SaSSli 
 
^n CORNELL 
 UNIVERSITY 
 LIBRARY 
 
 FROM 
 
 The Institution 
 
CORNELL UNIVERSITY LIBRARY 
 
 3 1924 070 647 379 
 
The original of this book is in 
 the Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924070647379 
 
History of Domesticand Foreign 
 
 Commerce of the 
 
 United States 
 
 BY 
 
 Emory R. Johnson, 
 T. W. Van Metre, G. G. Huebner, and D. S. Hanchett 
 
 With an Introductory Note by 
 Henry W. Farnam 
 
 Volume I 
 
 WASHINGTON, D. C. 
 Published by the Carnegie Institution of Washington 
 
 1915 
 
CONTRIBUTIONS TO AMERICAN ECONOMIC HISTORY 
 
 FROM THE 
 
 DEPARTMENT OF ECONOMICS AND SOCIOLOGY 
 
 OF THE 
 
 CARNEGIE INSTITUTION OF WASHINGTON 
 
 Henry W. Farnam, Chairman. 
 Walter F. Willcox Emory R. Johnson 
 
 Kenyon L. Butterfield Davis R. Dewey 
 
 Edward W. Parker John R. Commons 
 
 Victor S. Clark J. W. Jenks 
 
 B. H. Meyer Henry B. Gardner 
 
 Alfred H. Stone 
 
1AP 1, 
 
 From Redway and Hjnm.c-n's 
 
 PHYSICAL MAP OF THE UNITED STATES 
 
 Digitized by IVIicrosoft® 
 
MAP 1. 
 
History of Domestic and Foreign 
 
 Commerce of the 
 
 United States 
 
 BY 
 
 Emory R. Johnson, 
 T. W. Van Metre, G. G. Huebner, and D, S. Hanchett 
 
 With an Introductory Note by 
 Henry W. Farnam 
 
 Volume I 
 
 WASHINGTON, D. C. 
 Published by the Carnegie Institution of Washington 
 
 1915 
 
 6 
 
 / 
 
Carnegie Institution of Washington, Publication No. 2I5a. 
 (In two volumes. Volume I.) 
 
 PRESS OF GIBSON BROTHERS, INC., 
 WASHINGTON, D. C. 
 
INTRODUCTORY NOTE. 
 
 The general plan under which the Department of Economics and 
 Sociology of the Carnegie Institution of Washington has been prose- 
 cuting its work was first outlined in 1902 by a special committee, con- 
 sisting of the late Colonel Carroll D. Wright, Professor John Bates 
 Clark of Columbia University, and the writer. In 1903 the outline 
 was' elaborated, and an appropriation was made by the trustees of the 
 Institution for its execution. The work was begun in 1904. 
 
 The plan contemplated an extended study of the economic history 
 of the United States, to be carried out by the cooperation of a large 
 number of scholars. The subject was divided topically into eleven 
 divisions, and a twelfth was added in 1906; each was placed in charge 
 of an economist selected with particular reference to his familiarity 
 with the topic assigned him. Within each division it was designed to 
 secure special studies or monographs on topics not yet adequately 
 treated in economic or historical literature, and to use these as the basis 
 of a comprehensive treatise covering the entire subject-matter of the 
 division. It was expected that, as a rule, each summary would be written 
 by the head of the division, but in several cases it has been found 
 best to assign different chapters to different authors. The title adopted 
 for the work as a whole is Contributions to American Economic History. 
 In consequence of resignations and, in the case of Colonel Wright, of 
 death, changes have been made from time to time in the heads of four 
 of the divisions, the organization of which since 1909 has been as 
 follows : 
 
 Division I. Population and Immigration, Prof. Walter F. Willcox, 
 
 Division II. Agriculture and Forestry, President Kenyon L. Butterfield, 
 
 Division III. Mining, Mr. Edward W. Parker, 
 
 Division IV. Manufactures, Dr. Victor S. Clark, 
 
 Division V. Transportation, Prof. B. H. Meyer, 
 
 Division VI. Domestic and Foreign Commerce, Prof. Emory R. Johnson, 
 
 Division VII. Money and Banking, Prof. Davis R. Dewey, 
 
 Division VIII. Labor Movement, Prof. John R. Commons, 
 
 Division IX. Industrial Organization, Prof. J. W. Jenks, 
 
 Division X. Social Legislation, Prof. Henry W. Farnam, 
 
 Division XI. Federal and State Finance, Prof. Henry B. Gardner, 
 
 Division XII. The Negro in Slavery and Freedom, Mr. Alfred H. Stone. 
 
 In addition to the Contributions to American Economic History, it 
 was decided to compile and publish a comprehensive index of the 
 economic material found in the public documents of the States of the 
 United States, and this work was intrusted to Miss Adelaide R. Hasse, 
 
vi Introductory Note. 
 
 librarian in the Department of Public Documents of the Public Library 
 of New York City. Thirteen volumes of this index have already been 
 pubHshed by the Carnegie Institution of Washington. 
 
 Colonel Wright, besides taking charge of the Division of Labor, 
 served as chairman of the Department, and directed the general course 
 of its work down to the time of his death in 1909, when the writer was 
 chosen to succeed him. During the years which have elapsed smce 
 the beginning of actual work a large amount of material has been 
 accumulated. This is represented in part by 64 monographs pubhshed 
 independently of the Carnegie Institution of Washington, over 70 
 articles published in periodicals, and about 112 still unpublished 
 studies, besides the Documentary History of American Industrial Society, 
 in 1 1 volumes, edited by Professor Commons and associates, and the 
 14 volumes of the Index of Economic Material in Documents of the 
 States, referred to above. 
 
 Work of this kind is slow at best, and the completion of divisional 
 volumes has been retarded in many cases, not only by the demands 
 made upon the collaborators to undertake other responsibilities, but also 
 by special mishaps. The study of the history of commerce now issued 
 in two volumes is the first of the divisional summaries to be pubHshed. 
 
 Professor Johnson, who is the author of the first part of the book, 
 and who has carefully directed, supervised, and edited the whole, has 
 brought to his task an exceptional equipment. Besides filling the chair 
 of Transportation and Commerce in the University of Pennsylvania, 
 he has served as an expert on transportation for the Industrial Com- 
 mission, as a member of the Isthmian Canal Commission, as an expert 
 on traffic for the National Waterways Commission, as special com- 
 missioner on the Panama Canal traffic, tolls, and measurement of 
 vessels, as well as in other important public offices. He was also, from 
 1901 to 1914, editor of the Annals of the American Academy of Political 
 and Social Science. His associates in the preparation of these volumes 
 have been taken from the teaching staff of the University of Pennsyl- 
 vania, as indicated in the preface. It is hoped that the work will com- 
 mend itself not only to scholars but also to general readers. 
 
 The writer is convinced that it is only by studying the past that we 
 can understand the present and build a better future, and his work in 
 the Carnegie Institution of Washington has served to impress him more 
 and more with the abundance and the value of the economic experi- 
 ences of the United States. But the size of the country, its diversity 
 in soil, climate, and natural resources, the heterogeneity of its popu- 
 lation, the articulated nature of its political organization, which in 
 one great Federal empire embraces forty-eight commonwealths, each 
 
Introductory Note. vii 
 
 pursuing its own public policy in large fields of legislation, though in 
 others subject to the authority of the Congress, the President, and the 
 Federal Judiciary, all create a situation the complications and con- 
 tradictions of which are often baffling to the student. At the same 
 time these very factors make the United States a vast laboratory of 
 sociological and economic experimentation, such as no other part of 
 the modern world can duplicate. It is the difficult yet stimulating task 
 of the economist, first to ascertain and accurately record the facts, 
 then to interpret them, and finally to use them as the basis of induction. 
 While the Contributions are confined to the first two of these activities, 
 it is hoped that they will supply the systematic economist with material 
 which will be useful for the third. 
 
 Henry W. Farnam. 
 Yale University, September igiS- 
 
PREFACE. 
 
 This History oj Domestic and Foreign Commerce of the United States, 
 which constitutes one division of the Contributions to American Economic 
 History, comprises two volumes. The first volume contains three parts, 
 dealing, respectively, with "American Commerce to 1789," "The Inter- 
 nal Commerce of the United States," and "The Coastwise Trade." 
 Volume II also has three parts devoted, respectively, to "The Foreign 
 Trade of the United States Since 1789," "American Fisheries," and 
 "Government Aid and Commercial Policy;" this volume also contains 
 a classified bibliography, which it is hoped will prove useful to readers 
 and special students of American commerce. 
 
 Part 1 of volume I, with the exception of chapters IX and X, was 
 written by myself, and I intended, when the task was undertaken 
 in 1904, to write the entire work. This proved impossible; but I have 
 directed the investigation and edited the work of the collaborators. In 
 the preparation of the final volumes I was most fortunate in having the 
 assistance of Dr. T. W. Van Metre, who teaches the history of American 
 commerce at the University of Pennsylvania, and of Dr. G. G. Huebner, 
 assistant professor of transportation and commerce in the same insti- 
 tution. Dr. Van Metre wrote parts 2 and 3 of volume I and part 2 of 
 volume II. Professor Huebner wrote part i of volume II, with the 
 exception of chapter XXII, which was done by myself. Part 3 of vol- 
 ume II was written by Dr. David S. Hanchett, formerly assistant in 
 transportation and commerce at the University of Pennsylvania. The 
 author's name is attached to the part or parts written by him. 
 
 The final work, as presented in these two volumes, is based in part 
 upon monographic studies made by collaborators. Professor S. S. 
 Huebner and Dr. (now Assistant Professor) G. G. Huebner prepared an 
 elaborate, and as yet unpublished, historical account of The Foreign 
 Trade of the United States. Professor Thomas Conway, Jr., has written 
 an unpublished study of The Coastwise Commerce of the United States. 
 Assistant Professor Raymond McFarland, then principal of the Leices- 
 ter Academy, Leicester, Mass., wrote A History of the New England 
 Fisheries that was published by the. University of Pennsylvania. The 
 history of American fisheries other than those of New England was 
 worked up by Dr. Walter Sheldon Tower, now associate professor of 
 geography at the University of Chicago. This study of fisheries has 
 not been published. Dr. Tower also wrote a monograph upon A His- 
 tory of the American Whale Fishery thzt was published by the University 
 of Pennsylvania. Dr. Albert A. Giesecke, now Rector of the Univer- 
 
X Preface. 
 
 sity of Cuzco, in Peru, wrote a monograph upon American Commercial 
 Legislation Before 1789 that was published by the University of Penn- 
 sylvania. Dr. Chester Lloyd Jones, now associate professor of poHtical 
 science at the University of Wisconsin, prepared a monograph upon 
 The Consular Service of the United States that was published by the 
 University of Pennsylvania. Dr. (now Professor) J. Russell Smith 
 wrote a monograph upon The Organization of Ocean Commerce, pub- 
 Hshed by the University of Pennsylvania. Later, Professor Smith 
 elaborated this monograph into a volume upon The Ocean Carrier, 
 published by G. P. Putnam's Sons. 
 
 The collaborators who prepared monographs and the authors who 
 aided in the preparation of the final volumes have made possible the 
 completion of this contribution to the history of American commerce. 
 Their assistance is greatly appreciated. 
 
 Emory R. Johnson. 
 
 University of Pennsylvania, September 1915. 
 
CONTENTS. 
 
 Part I. — ^American Commerce to 1789. 
 By Emory R. Johnson. 
 
 Chapter I. P^^^ 
 
 Geographic Influences Affecting the Early Development of American 
 
 Commerce 3 
 
 Development of commerce the resultant of many causes, 3. Analysis of the con- 
 ditions controlling economic progress, 3. The continental shelf and the fisheries, S- 
 Shore line and harbors, 6. The rivers, the fur trade, and water power, 7. 
 Glaciation and its consequences, 8. The Coastal Plain and Fall Line, 9. The 
 Piedmont, 11. The Appalachian or Great Valley, 12. The rivers as highways 
 of inland commerce, 13. The Allegheny passes and the beginnings of western 
 commerce, 14. General results of geographic control, 15. 
 
 Chapter II. 
 
 The Beginnings of American Commerce, 1600 to 1660^. 17 
 
 Newfoundland fisheries in the sixteenth century, 18. 'Settlement of America begun 
 by chartered trading companies, 18. Services of chartered companies in early 
 development of American commerce, 18. The London Company and early trade of 
 Virginia, 21. The Plymouth colony and its early trade organization, 25. The 
 Massachusetts Bay colony and its early trade .organization, 26. The Laconia 
 Company, 28. New Netherland and its trade, 28. Patroonships and their .i-^ 
 results, 29. Early trade of New Jersey and Maryland, 30. Beginnings of inter- 
 colonial trade, 31. General survey of American commerce in 1660, 33. 
 
 Chapter III. 
 The Commercial Policy of England toward the American Colonies: 
 
 The Acts of Trade 35 
 
 The mercantile theory, 35. Origin of the Navigation Acts, 37. The Navigation 
 and Trade Acts of 165 1, 1660, and 1663, 39. The Administrative Acts of 1673 and 
 1696, 42. The Molasses Act of 1733, 42. British regulation of colonial manu- 
 factures, 44. English bounties, preferential duties, drawbacks, and other encour- 
 agements to colonial industries and trade, 46. The Grenville, Townshend, and 
 North Acts, 1764-1770, 48. Effects of the British commercial policy upon colonial 
 industry, commerce, and manufactures, 49. The illegal trade of the colonists, 51. 
 Summary of the effects of the Acts of Trade, 52. 
 
 Chapter IV. 
 
 Commercial Policy of the Colonies 54 
 
 Legislative power of colonies over commerce, 54. Authority exercised by Parlia- 
 ment, the Privy Council, and King, 55. Import duties of the colonies, 56. The four 
 purposes of import duties, 57. Export duties, 59. Bounties, 5o. Inspection 
 laws, 62. Embargoes, 63. Tonnage duties, 63. Regulation and administration 
 of ports, 64. Summary of commercial legislation in'rtie colonies, 65. 
 
 Chapter V. 
 
 The Early Development of American Commerce from 1660 to 1700 66 
 
 Significance of the period, 66. Economic and political status of the colonies from 
 1660 to 1700, 67. Leading industries: agriculture, 70; fur trade, 71; appropriation 
 of forest resources, 71; the fisheries, 72; manufactures, 72; ship-building, 72. The 
 maritime trade of the colonies as a whole, 73. New England's commerce, 75. The 
 trade of New York and East Jersey, 77. The trade of Pennsylvania, West Jersey, 
 and Delaware, 78. The commerce of Maryland and Virginia and the Carolinas, 79. 
 General survey of commercial conditions, 81. 
 
xii Contents. 
 
 Chapter VI. Page 
 
 Eighteenth Century to the Outbreak of the Revolution 84 
 
 Effect of wars upon progress of American commerce, 84. Estimated popula- 
 tion of the colonies in 1700 and 1760, 85. General industrial and commercial 
 changes from 1700 to 177s, 86. The value and growth of the commerce of the 
 colonies, (a) with Great Britain, 88, {b) with sections of world outside of Great 
 Britain, 90. Value and distribution of trade of colonies in 1769, 92. Trade with 
 the West Indies, 93. TheSugar Act of 1733 and its slight effect, 95. Illegal trading 
 of the colonies during the Seven Years' War, 96, The illegal trade with the French 
 at Monte Cristi, 98. Trade with West Indies after 1763, 99. The African slave 
 trade, 100. Causes of the slave trade, 102. Commerce from the Peace of Paris to 
 , the Declaration of Independence, {a) value of exports and imports, loj, {b) pros- 
 ,/ perity of whaling and other fisheries, 106.* Great Britain's bounties on hemp, masts, 
 indigo, and naval stores, 106. Failure of British taxes on commerce of the colonies, 
 107. Monetary conditions as affecting commerce in the eighteenth century, 108. 
 Summary, no. Sources of statistical information concerning American colonial 
 commerce, 112. Documentary sources and other references, 113. Statistics of 
 exports from the colonies in 1770, 118. Statistics of the trade between Great 
 Britain and the colonies, 1697 to 1776, 120. 
 
 Chapter VII. 
 
 Period of the Revolution and Confederation, 1775-1789 122 
 
 Indirect trade with Great Britain during the Revolution, 122. The effects of the 
 war upon American trade, 123. Effect upon American shipping and ship-building, 
 
 ,/ 123. Reasons why trade was chiefly with Great Britain after the Revolution, 125. 
 
 Conditions affecting American commerce, from 1783 to 1789, 127. British regula- 
 tions affecting American commerce, 1783-1795, 128. Changes in destination and 
 routes of American foreign trade, 130. 
 
 Chapter VIII. 
 
 American Commercial Policy, 1776 to 1789 132 
 
 Commercial policy determined by the States, not by the Confederation, 132. 
 Commercial legislation during the Revolution, 133. Import duties during the 
 Revolution, 134; between 1783 and 1785, 13S; from 1785 to 1789, 136. The impost 
 legislation of Massachusetts, 136. The Pennsylvania tariff law of 1785, 137. v^he 
 impost duties imposed by other States, 138. Discriminating duties in aid of Ameri- 
 can shipping, 139. Tonnage taxes, 140. Export duties, 140. Production bounties 
 and navigation laws, 141. Commercial legislation of the Confederation, 142. Gen- 
 eral characteristics of the period, 143. 
 
 Chapter IX. 
 
 The American Fisheries before 1789. By T. W. Van Metre 145 
 
 Dominant position of New England in American fisheries prior to 1789, 145. 
 American fisheries in the sixteenth century, 146. Development of New England 
 fisheries during the seventeenth century, 148. Establishment of the whaling 
 industry, 152. Struggles with France over the fisheries, 153. Extent of the New 
 England fisheries in 173 1, 154. The fisheries from the Peace of Paris to the Revolu- 
 tion, 156. Effect of the Revolution upon the fisheries, 158. Provisions as to 
 fisheries in the Treaty of 1783, 159. Revival of cod fishery from 1786 to 1790, 160. 
 Depressed condition of the whale fishery, 161. 
 
 Chapter X. 
 American Coastwise Trade before 1789. By T. W. Van Metre 162 
 
 The beginning of the coastwise trade, 162. Conditions in the northern colonies 
 favorable to coastwise trade, 164. British Navigation Acts and the colonial coast- 
 wise trade, 165. Evasion of the Navigation Acts, 166. Effects of the Acts, 167. 
 Character and volume of the intercolonial coastwise trade, 167. The trade between 
 the northern and southern colonies, 169. Statistics of vessel entrances and clear- 
 ances in 1769, 171. Interstate trade after the Revolution, 172. Commercial pro- 
 visions of the Constitution, 173. 
 
Contents. xiii 
 
 Chapter XI. Page. 
 
 The Organization of American Commerce in the Seventeenth and 
 
 Eighteenth Centuries 175 
 
 Place of the trading companies in early commerce, 175. The period of the mer- 
 chant carrier, 178. Reasons why merchants were their own carriers, 179. Size of 
 the Mayflower and other vessels, i8i. Effects of British legislation upon colonial 
 trade, 182. Trade conditions following 1783, 184. Effect of the establishment of 
 the National Government, 184. Direct trade with the Far East, 185. Early mer- "^ 
 chant princes, 185. Appearance of the common carrier on the sea, 186. Charter 
 traffic, 187. Attempts to establish line services between Europe and America, i88. 
 
 PART II. — Internal Commerce of the United States. 
 
 By T. W. Van Metre. 
 
 Chapter XII. 
 
 Volume and General Character of the Internal Commerce of the 
 
 United States 193 
 
 Definition of internal commerce, 193. Internal commerce larger in volume than 
 the foreign trade, 194. Resources and industrial characteristics of different sections 
 of the United States, 195. The Northeastern States, 195. The Southern States, 
 197. The Central States, 198. The Rocky Mountain States, 199. The Pacific 
 States, 199. Tonnage of commerce by rail in 1910, 200. 
 
 Chapter XIII. 
 
 Early Development of the Internal Commerce of the United States, 
 
 1789 to 1830 202 
 
 Location of settlements and commercial cities, 202. Inland transportation, 203. 
 The Mississippi River as an outlet for the trade of the Ohio Valley, 205. Opening 
 of the Mississippi River and the purchase of Louisiana, in 1795, 206. Growth in 
 population of the United States from 1790 to 1810, 208. The War of 1812 and 
 the growth of the West, 211. Internal trade in 1810, 212. Use of steamboats on 
 the Mississippi, 213. Trade of New Orleans in 1818, 214. The panic of 1819 and 
 its effects, 216. The American system, 218. Effect of opening of the New York 
 canals in 1825, 220. Building and aid of canals and turnpikes by the States, 221. 
 Summary, 222. 
 
 Chapter XIV. 
 
 Expansion of Internal Commerce, 1830 to i860 224 
 
 Increased area and population of United States, 224. Development of industries, 
 225. Growth of manufactures, 226. Extension of transportation facilities, 227. 
 Trade of Eastern with Central States via Erie Canal and Great Lakes, 230. The 
 grain trade, 230. Development of the Great Lakes district, 234. Trade on the 
 Pennsylvania Canal system, 235. Trade via the railroads between the East and 
 West, 237. Growth of inland commerce in the Southern States, 240. Internal 
 trade between the North and the South, 241. Active period of the river trade, 241. 
 The commerce of the Mississippi Valley, 242; of New Orleans, 243 ; of St. Louis, 243 ; 
 of Cincinnati, 244. Diversion of traffic from the Mississippi River to the eastern 
 railroads, 247. The domestic slave trade, 248. The internal trade of the far 
 West, 248. Summary, 250. 
 
xiv Contents. 
 
 Chapter XV. Page. 
 
 Economic Development, i860 to 1900 ^54 
 
 Changes produced by the Civil War, 254- Development of the United States from 
 i860 to 1900 in population and wealth, 256; in agriculture, 257; in mining, 262; 
 in lumbering, 263; in manufacturing, 263; in transportation, 266. 
 
 Chapter XVI. 
 
 Internal Trade, i860 to 1900 270 
 
 Broad scope of internal trade of the United States, 1860-1900, 270. Trade in 
 cereals and flour, 271. Live-stock and animal products, 276. Cotton, 278. Other 
 farm products, 282. Coal, 283. Iron ore, iron, and steel, 285. Other minerals, 
 286. Forest products, 287. Progress of manufactures, 290. Growth of the 
 volume of internal commerce, 293. Summary, 293. 
 
 Chapter XVII. 
 
 Organization and Management of Internal Trade 296 
 
 Transportation and communication, 296. The express service, 298. The tele- 
 graph and postal services, 299. Functions and development of markets and of 
 produce exchanges, 300. Federal and State banking, 303. First and second 
 United States Banks, 304. Regulation of banks by the States and the consequences, 
 305. Development of corporations, 307. Evils resulting from lack of regulation, 
 309- 
 
 Chapter XVIII. 
 
 Commercial Changes of the Opening Years of the Twentieth Century ... 312 
 Growth of population and industry, 1900 to 1910, 313; of agricultural industries, 
 313; of manufacturing, 315; of minerals, 316; of forest products,3i6. Development 
 of transportation and internal trade, 316. Growth of electric railways and the 
 use of electricity, 317. Waterway improvement and projects, 318. Public regula- 
 tion of transportation and commerce, 319. Regulation of corporations, 32J. 
 Revision of the tariff, 322. The conservation movement, 323. 
 
 PART III. — The Coastwise Trade. 
 
 By T. W. Van Metre. 
 
 Chapter XIX. 
 
 The Coastwise Trade of the Atlantic Coast, 1789 to i860 327 
 
 Legislation concerning coastwise vessels, 1789-1793, 328. Registry and enrollment 
 ofvesselsunderlawof 1792, 330. Development of the coastwise trade to 1830, 332. 
 Importance of cotton culture to the coastwise trade, 332. Nature of the trade of 
 the South with the North, 333. Effects of the embargo and non-intercourse acts 
 and the War of 1812, 334. Adoption of the protective tariff policy, 335. Foreign 
 vessels excluded from the coastwise trade, 1817, 336. Establishment of "great dis- 
 tricts," 1819, 336. Nature and volume of the coastwise trade in 1830, 338. The 
 coastwise trade at leading seaports, 339. The coastwise trade from 1830 to 1850, 
 341. Increase in tonnage of coastwise fleet, 342. Coastwise receipts and shipments 
 at New York, Philadelphia, Baltimore, and Boston, 1830 to 1850, 342. The coast- 
 wise trade at South Atlantic and Gulf ports, 344. The decade from 1850 to i860, 
 345. Competition of railroads with coastwise lines, 1850-1860, 345. Increase in 
 coastwise trade, 1850 to i860, 346. Growth in number of steamship lines, 346. 
 
Contents. xv 
 
 Chapter XX. Page. 
 
 The Coastwise Trade of Atlantic and Gulf Coasts Since i860 348 
 
 Changes in the coastwise trade after the Civil War, 348. Effects of competition 
 between the railroads and the coastwise carriers, 349. Decline of New Orleans in 
 the coastwise trade, 350. Development 1880 to 1900, 351. Incompleteness of 
 Government statistics of coastwise trade, 352. Act of 1906 establishing five 
 "coastwise districts," 353. Growth of coastwise trade from 1900 to 1912, 353. 
 Coastwise entrances at New York and Boston in 1902 and 191 1, 354- Ownership 
 of coastwise lines by railroad corporations and proposed regulation of coastwise car- 
 riers by the Federal Government, 356. 
 
 Chapter XXI. 
 
 The Coastwise Trade of the Pacific Coast and the Intercoastal Trade. . 357 
 
 Beginnings of the intercoastal trade, 358. EflFect of the discovery of gold in Cali- 
 fornia in 1848, 358. Entrances of vessels at San Francisco, 1850-1853, 359. Coast- 
 wise trade of the Pacific coast, 359. Intercoastal trade, 1869-1913, 361. Traffic 
 via Cape Horn and via Isthmus of Tehuantepec, 362. General effect of the Panama 
 Canal on the intercoastal traffic, 363. 
 
 MAPS. 
 
 1. Physical Map of the United States Frontispiece 
 
 Facing page 
 
 2. Map of the Canals and Railroads in the United States in 1840 228 
 
 3. Map of the Railroads in the United States in i860 246 
 
 4. Map of the Railroads in the United States in 1880 268 
 
 5. Map of the Railroads in the United States in 1910 316 
 
PART ONE 
 
 AMERICAN COMMERCE TO 1789 
 
 By EMORY R. JOHNSON 
 
CHAPTER I. 
 
 GEOGRAPHIC INFLUENCES AFFECTING THE EARLY DEVELOPMENT 
 OF AMERICAN COMMERCE. 
 
 Development of commerce the resultant of many causes, 3. Analysis of the con- 
 ditions controlling economic progress, 3. The continental shelf and the fisheries, 
 5. Shore line and harbors, 6. The rivers, the fur trade, and water power, 7. 
 Glaciation and its consequences, 8. The Coastal Plain and Fall Line, 9. The 
 Piedmont, 11. The Appalachian or Great Valley, 12. The rivers as highways 
 of inland commerce, 13. The Allegheny passes and the beginnings of western 
 commerce, 14. General results of geographic control, 15. 
 
 The development of the commerce of any country is a resultant 
 of many causes. Social ideals, individual traits and aptitudes, the 
 status of political organization, the legislative policies followed — each of 
 these has had its influence; but they are neither the primary nor the 
 most potent determinants of the nature and scope of a nation's com- 
 merce. Economic conditions are the cause of trade and they most 
 strongly control its growth. 
 
 Social ideals may strengthen the impulse of the individual to trade 
 and cause him to develop mercantile and maritime traits. The his- 
 tory of New England for more than two centuries affords a striking 
 confirmation of this truth. The aspiration of a country to become 
 an impregnable naval power will impel the government to give large 
 aid to trade and shipping — a fact amply verified by the history of 
 Japan since 1895, of Germany since 1890, and of England and Great 
 Britain since 1650. -- — 
 
 When social ideals, individual aptitudes, and economic conditions 
 harmonize, and are favorable to international commerce and to the 
 building and operation of ships, as they are to-day, to a marked degree 
 in Great Britain and Germany and largely in Japan, legislation for 
 the promotion of commerce and shipping may be an effective auxiliary; 
 but when these fundamental prerequisites are wanting, as they are in 
 great part in France, laws can accomplish but little. During the latter 
 half of the nineteenth century the social and economic conditions con- 
 trolling the investment of capital and the expansion of industry in the 
 United States brought about a large foreign trade; but ships could not 
 be built profitably for sale abroad or for operation in competition with 
 vessels under the flags of other countries. 
 
 ANALYSIS OF THE CONDITIONS CONTROLLING ECONOMIC PROGRESS. 
 
 The economic conditions that control the development of industry 
 and commerce are partly natural or geographic, and partly artificial or 
 of man's creation. The earth, as the field of human endeavor, broadly 
 controls what man may do; it may bestow free gifts upon mankind; 
 
4 History of Domestic and Foreign Commerce. 
 
 it may, and more often does, place obstacles, more or less difficult to 
 surmount or circumvent, between man and the goal of his efforts; 
 or it may fix definite limits beyond which it is vain to attempt to pass. 
 
 In the early life of the human race geographic control was absolute; 
 with the progress of mankind, the dominance of mind over matter, of 
 man over his physical surroundings, has increased with accelerating 
 speed; so that to-day men are able to live and prosper in regions for- 
 merly uninhabitable and are able to live with far greater comfort than 
 was formerly obtainable. Through mechanical power numerous 
 forces of nature minister to the wants of man and enable him to free 
 himself from many of the restraints of the world in which he lives. 
 
 Man's triumph over nature is, however, not complete; and if it 
 were, the forces of nature and the earth's material resources would 
 still largely control his life, because he can live only by cooperating 
 with nature. Temperature, winds, ocean currents, soil fertility, mines, 
 forests, land and sea life, these still regulate his economic life and 
 largely mold his character. 
 
 At the time of the settlement of America, three centuries ago, 
 industry and commerce were aided but slightly by the mechanical 
 agencies which now enable men to modify, direct, and turn to their 
 service the conditions imposed by their physical environment. Geo- 
 graphic conditions exercised such a strong influence upon the*economic 
 development of America that the history of American commerce should 
 begin with a survey of the geography of the North Atlantic and the 
 eastern part of North America. In making this survey, it will be 
 best to consider the geographic control of both industry and commerce. 
 As commerce is carried on chiefly to aid industry, both must receive 
 attention in this analysis, although the presentation will, as far as pos- 
 sible, be made with reference to commerce. 
 
 The subject naturally divides itself into two parts: one covering 
 the period of the seventeenth century and the larger portion of the 
 eighteenth century, during which time the region between the Atlantic 
 coast and the Allegheny Mountains was being settled and developed ; 
 the other part including the period of the occupation of the great 
 country beyond the Appalachians — the Mississippi Valley and the 
 West. The first period coincides roughly with the colonial epoch, the 
 second with the national era. The mountains had been crossed and 
 settlements had been made in the Ohio Valley before the Revolution — 
 especially after the French and Indian war — but the real work of occu- 
 pying the vast trans-Allegheny country was undertaken after the War 
 of Independence. 
 
 The geographic conditions influencing the over-sea and intercolonial 
 commerce of the section east of the Alleghenies, prior to 1789, were 
 maritime and terrestrial. The settlement and subsequent develop- 
 ment of America were largely influenced by the shape of the North 
 
Geographic Influences Affecting Early Development. 5 
 
 Atlantic, its winds, its currents, and its fisheries. The spread of 
 population along the coast and toward the interior, the industries 
 established in each colony, and their growth or decline, the over-sea 
 and domestic exchange of products — these were largely determined 
 by land factors, by the terrene of the Atlantic slope. 
 
 The maritime factors may be considered first. The narrowness of 
 the North Atlantic and the eastward reach of the Grand^ Banks off 
 Newfoundland made possible the regular pursuit of the fisheries in 
 American waters by English, Dutch, Portuguese, and French during 
 and after the early years of the sixteenth century. Fishing in America 
 antedated permanent colonization by a full hundred years. 
 
 THE CONTINENTAL SHELF AND THE FISHERIES. 
 
 The Atlantic continental shelf of North America, or that part of the 
 uplifted continent that is covered by the sea, slopes gently from the 
 shore seaward, approximately to the line of 100 fathoms of ocean depth. 
 From this line the descent is rapid to the abysmal area of the main 
 floor of the Atlantic. On the southeastern edge of Florida the line of 
 100 fathoms' depth runs close to the shore, there being a moderate 
 depression between Florida and the submarine plateau upon which the 
 Bahama Islands are built. Northward from Florida the continental 
 shelf gradually widens, with the exception of a slight narrowing of 
 the shelf by the eastward projection of the North Carolina shore above 
 and below Hatteras, the width off Georgia and South Carolina aver- 
 aging about 100 miles. From New Jersey eastward and northward 
 the shelf rapidly broadens until it reaches its maximum breadth of 
 about 400 miles in the banks off Newfoundland, the only areas upon 
 the broad shelf where the ocean is more than 100 fathoms deep being 
 the central part of the broad bay between Cape Cod and Nova Scotia, 
 the entrance to the Gulf of St. Lawrence between Cape Breton Island 
 and Newfoundland, and Hmited portions of the Gulf itself. 
 
 The wealth of fish off the Atlantic coast of America from Long 
 Island to the Grand Banks maybe ascribed to two causes : (i)The broad 
 "continental shelf" widening from south of the Nantucket shoals 
 northward and eastward to the Grand Banks gives a large area of 
 shallow ocean and provides a spacious home for the cod, mackerel, and 
 other fish of commerce. (2) This home is rendered the more habitable 
 and more populous— especially for the cod— by the cool water brought 
 down from the Arctic latitudes by the Labrador current that flows past 
 Labrador, through the Gulf of St. Lawrence, about Newfoundland, 
 over the Grand Banks, and along Nova Scotia and the New England 
 coast until it is overcome by its opponent, the more powerful north- 
 flowing Gulf Stream. , ,, a i • 
 
 The oyster and shad fisheries of the middle Atlaritic seaboard are 
 of much economic value, and there are sea fisheries of importance along 
 
6 History of Domestic and Foreign Commerce. 
 
 the south Atlantic and Gulf States of the United States. The oyster 
 fisheries of Maryland are now of great value; but during colonial times 
 the sea-food products secured along the coasts of the middle and south 
 Atlantic colonies held a minor rank in comparison with the fish caught 
 in the cooler waters of the broad northern continental shelf, extending 
 seaward from New England and Canada. When one considers the 
 limited possibilities of agriculture in New England and the wealth of 
 life in the ocean that washes her shores, it is easy to understand why 
 the fisheries and the trade in fish were the most important factor in the 
 economic development of New England throughout the colonial period. 
 
 SHORE LINE AND HARBORS. 
 
 The succession of deep bays and prominent headlands along the 
 Atlantic coast north of New Jersey forms a shore line contrasting 
 strikingly with the generally unbroken littoral of New Jersey and of the 
 states to the south of Virginia. From the mouth of the Hudson east- 
 ward and to the north the sea has invaded the land, submerged a former 
 coastal plain, and made it a part of the widened continental shelf. The 
 only parts of the former coastal plain now rising above the sea are Long 
 Island, Nantucket, Martha's Vineyard, and the small islands in the 
 vicinity. Indeed, the subsidence of the land northward from Cape 
 Cod was so great as to submerge a large part of the piedmont belt of 
 archaean rocks adjacent to which the coastal plain had been laid down in 
 a geologically recent period. Although a subsequent slight uplift has 
 reclaimed from the sea a fringe of land along parts of the coast, the 
 net subsidence is such that the rugged coast of New England north of 
 Cape Cod, of New Brunswick, Nova Scotia, and the islands beyond 
 is broken into bays and fiords separated by bold peninsulas and guarded 
 by outlying islands of granitic rock. At some places, as at Mount 
 Desert Island, the mountains rise from the sea; elsewhere the low hills 
 of the piedmont give character to the shore formation. 
 
 From New York toward the south the coast has sunk but little, 
 and the coastal plain, widening southward, intervenes between the 
 sea and the belt of rolling hills forming the piedmont, or Allegheny 
 foothills. Between what are now New Jersey and North CaroHna the 
 subsidence was enough greater than it was immediately to the north 
 and south to form the shallow estuaries of the Delaware and Chesa- 
 peake. The drowning of the lower valleys of the Delaware and of the 
 rivers flowing into the Chesapeake provided numerous navigable 
 waterways across the coastal plain, and gave ample harbors to a large 
 section of country. The beds of these bays are the favorable habitat 
 of the shellfish, the trade in which is of great value. 
 
 The continental shelf and the Atlantic shore line have exercised an 
 easily discernible influence upon the industrial and commercial devel- 
 opment of the American colonies. They account for New England's 
 
Geographic Influences Ajffecting Early Development. 7 
 
 long-continued leadership in the fisheries; and they, together with the 
 land influences to be discussed presently, go far to explain why the 
 greater attention was given by these colonies to shipping and com- 
 merce than was given to maritime pursuits by the middle and southern 
 colonies. 
 
 Before pointing out in detail the economic results of geographic 
 control, it will be best to consider the more important land influences 
 upon the life and growth of the colonies. The lines of progress taken 
 by the several colonies were determined by land and ocean influences 
 more or less minimized or accentuated by the difi^erences in the social 
 forces dominant in the northern, middle, and southern sections of the 
 country. 
 
 THE RIVERS, THE FUR TRADE, AND WATER-POWER. 
 
 The Streams aff"orded or denied access to the unsettled and unex- 
 plored land and were the natural highways through the country after 
 settlements had been established, they decided the rapidity or slowness 
 of occupation, they located and conditioned the growth of the towns 
 as centers of inland trade and as ports of maritime commerce. 
 
 The vain search made by the English, Dutch, and French navigators 
 for the northwest passage around America to the Orient led to the 
 exploration of practically all the large streams from the James to the 
 St. Lawrence. Close after the explorers came the more successful fur- 
 traders, who secured from the savages the second contribution made by 
 America to the wealth of Europe, the gold that was obtained from the 
 Spanish-American mainland having been the first gift of the New World 
 to the Old. 
 
 The Hudson River became the chief center of the early fur trade. 
 The noble stream provided a broad highway 150 miles inland, and the 
 Mohawk brought the tidal Hudson into easy communication with 
 a large interior section, inhabited by exceptionally thrifty and energetic 
 tribes of Indians. For fifty years the fur trade of the Hudson Valley, 
 and to some extent of the surrounding country, was conducted by the 
 Dutch, who placed this trade, at least during the first half of their occu- 
 pation of the country, ahead even of agriculture. 
 
 While the fur trade of the Hudson exceeded that of other rivers, the 
 diff"erence was mainly in degree. The Connecticut and the lesser 
 streams of New England, the Delaware, Lehigh, Schuylkill, Susque- 
 hanna, Potomac, James, and the many tributaries of the Chesapeake 
 floated the peltry-laden Indian canoes down to the interior and coast- 
 wise posts of the traders. 
 
 The people of New England did not give so much attention to the 
 fur trade as did the Dutch to the west and south, nor so much as did 
 the French on the north. In the earlier years of their colonial life the 
 Dutch and French could make the purchase and sale of peltries their 
 
8 History of Domestic and Foreign Commerce. 
 
 chief business, because the Hudson and St. Lawrence made that pos- 
 sible. In New England, on the contrary, the rivers^ with the exception 
 of the Connecticut, were short and were rendered unnavigable, almost 
 from their mouths up, by numerous rapids and falls. In this regard, 
 however. New England's limitation was her good fortune. The profits 
 derivable from the fisheries, agriculture, and commerce, and the social 
 benefits resulting from their pursuit, so far exceed those of fur trading 
 that the economic and social progress of a colony is hindered rather 
 than aided by giving much of its energy and capital to trading in furs. 
 
 The fact that most of the streams of New England were small and 
 had rapids or falls near the sea had several consequences. The settle- 
 ments and towns were located near the ocean, and the early life of 
 New England was carried on largely within sight and sound of the sea. 
 As the settlers advanced inland and occupied the country for agri- 
 culture, they found the soils, which throughout New England were the 
 result of glaciation, to be stony or sandy in many sections and fertile 
 in only limited areas. The gains to be made from farming, while 
 sufficient to cause New England to have a steady development in 
 agriculture, did not so lure men away from the sea as to check the 
 steady and rapid growth of fishing, ship-building, and trading. Before 
 the colonial period came to an end the unrivaled water-power afforded 
 by the New England rivers began to be used to a small extent for indus- 
 trial purposes. Later, in the early decades of the nineteenth century, 
 when capital had become more abundant and machinery had been 
 improved, this water-power made New England the manufacturing 
 center of the United States, and gave character to her entire industrial 
 development. 
 
 GLACIATION AND ITS CONSEQUENCES. 
 
 The glacial deposits covering New England, New York, and northern 
 New Jersey and Pennsylvania determined their soils and largely con- 
 ditioned their economic activities. In New England the deep covering 
 of glacial material made the country yield moderate or meager returns 
 to agriculture, except in the limited areas of the alluvial soil, but to 
 compensate for this parsimony nature was bounteous in her gift of 
 grand forests and of ample water-power. Glaciation remodeled the 
 drainage system, constructed numerous lake reservoirs in the river 
 valleys, forced the streams into new channels, and sent their waters 
 hurrying over rapids and tumbhng down cataracts. The till and sand 
 formed a thick sponge that absorbed the water faUing in the copious 
 rains and abundant snows, distributed it by filtration slowly to the 
 streams, and gave the rivers a nearly even flow throughout the year. 
 Thus the forests and natural harbors of New England favored ship- 
 building and commerce, while the free gift of water-power, abundant, 
 widely distributed, and reliable, predestined her to an industrial career. 
 
Geographic Influences A fleeting Early Development. 9 
 
 The results of glaciation in New York and northern New Jersey 
 and Pennsylvania differed from the results in New England. The 
 debris lejFt by the ice cap as it receded from New England consisted 
 of materials worked up from rocks that made less generally fertile soils 
 than were manufactured from the rocks which were supplied to the 
 ice mill by the section to the west and south of the Green Mountains 
 and the Berkshires. This is especially true of New York State, the 
 river valleys and wide interior of which rank high in agriculture. 
 Northern New Jersey and northeastern Pennsylvania are less fertile. 
 The water-power resulting from glaciation west of New England was 
 less per unit of area and in most cases was located so far inland as not 
 to be economically available at an early date. 
 
 THE COASTAL PLAIN AND FALL LINE. 
 
 South from the valley of the Hudson the section of country between 
 the ocean and the Allegheny front is separable into three well-marked 
 divisions. Along the Atlantic lies the coastal plain made up of sandy 
 or gravelly soils interspersed with areas of clay and of alluvium. This 
 plain, narrow at the north but widening southward to a breadth of 200 
 miles, the remnant of one that formerly extended from the Grand 
 Banks to the Gulf of Mexico, was laid down in the geological yesterday 
 under the margin of the sea when the ocean reached inland to the old 
 archaean uplift now represented by the rolling uplands of the piedmont. 
 The submarine plain thus constructed of the materials eroded from the 
 archaean highland was subsequently raised above the level of the sea. 
 A recent subsidence of the coast has restored to the sea a portion of the 
 land in the neighborhood of the Chesapeake and the lower Delaware 
 and has enabled the ocean to regain more ground than it had lost north 
 of Long Island; but most of the southern half of the plain remains dry 
 land. The sands, gravels, and clays of the geologically youthful coastal 
 belt rest upon the lower-lying old rocks of archaean antiquity, and the 
 west-northwest, or inland, margin of the recently made plain borders 
 directly upon the ancient piedmont. 
 
 The union of these two belts, the coastal plain and the piedmont, 
 is clearly marked by the "fall line." Rapids and falls of moderate 
 descent are formed as the rivers that flow across the piedmont pass 
 from the resistant archaean rocks to the easily eroded strata of the 
 coastal plain. The ocean tides invade each river to the fall line, and 
 made most of the streams readily navigable for the oceangoing ships 
 employed prior to the use of the large modern steamers. The natural 
 and favorable location for a seaport and for a manufacturing city being 
 at or near the head of river navigation for ocean vessels, at the point 
 where there is power for industry and a free highway for commerce, 
 the fall line from New York south may be traced on the map by a Hne 
 passing through Trenton on the Delaware, Philadelphia between the 
 
lo History of Domestic and Foreign Commerce. 
 
 Schuylkill and the Delaware, Baltimore on an arm of the Chesapeake, 
 Washington on the Potomac, and Richmond on the James. Further 
 south the fall Hne passes close to Raleigh near the Neuse, Columbia on 
 the Congaree, and Augusta on the Savannah. Raleigh is not a river 
 city. Columbia and Augusta are at the head of steamboat navigation, 
 but are situated too far inland on relatively small streams to have ever 
 been the head of ocean commerce. The earher and later cities of first 
 importance in the Carolinas and Georgia, where the coastal plain is 
 widest, were located near the sea., e. g., Wilmington, Charleston, and 
 Savannah. 
 
 The cities along the fall line from New Jersey to Virginia early 
 became the commercial centers both of the coastal plain, where the 
 earhest settlements and plantations were established, and of the 
 piedmont, into which population easily spread by way of the many river 
 valleys. North of Virginia the piedmont, being narrow, readily acces- 
 sible, and fertile, was settled earher than it was in and south of Vir- 
 ginia, although the Virginia plantations had overpassed the coastal 
 plain long before the Revolutionary War. 
 
 To the north and east of the Chesapeake, where a small-farm agri- 
 culture prevailed, the increase and spread of population caused cities 
 to grow up as centers of trade and industry; but in the section of the 
 country where the land was held in plantations, trade did not center 
 in cities, but was segregated among the plantations and small towns. 
 Baltimore, near the head of the Chesapeake, grew not only because it 
 was the market for Maryland, but also as a result of being an important 
 emporium for the trade up and down the Susquehanna Valley. Even 
 so, it did not rival Philadelphia in rate of growth during the eighteenth 
 century. 
 
 In structure and fertility, the sandy, light soils, the alluvial river 
 plains, and the salt and fresh water marshes of the coastal belt were 
 in sharp contrast with the soils formed from the piedmont gneiss which 
 disintegrated into the heavy clays, such as are found in parts of Vir- 
 ginia, and into the lighter micaceous and sandy clays prevalent in 
 southeastern Pennsylvania. In general, the lands of the coastal plain, 
 with the exception of the hmited areas of alluvium, were less fertile and 
 more easily exhausted than were those of the piedmont, but the soils 
 near the sea had the merit of being easily brought into cultivation 
 during those early years of settlement when the colonists were gaining 
 a sure footing on the edge of the great New World wilderness. 
 
 The first permanent colony in America was planted on the river 
 bottoms and the sandy uplands along the coast and between the rivers 
 of "tidewater" Virginia. Soon thereafter the lands about the Chesa- 
 peake in Maryland were settled. On these lands the culture of tobacco 
 in Virginia and of tobacco and cereals in Maryland was easy and profit- 
 able; and, although the light soils could not endure the improvidence 
 
Geographic Influences Afecting Early Development. 1 1 
 
 of plantation farming, there was, at least for many decades, an abund- 
 ance of virgin land within the wide plantations or on the frontier to be 
 substituted for the worn-out fields. 
 
 The early settlers on both banks of the lower Delaware found fertile 
 soils in the alluvium and marl belts along the estuary and tidal river; 
 and prosperous farming antedated Penn's arrival by more than forty 
 years. 
 
 In the CaroHnas and Georgia settlement began along the shores of 
 the broad Albemarle and Pamhco Sounds — then readily entered and 
 traversed by ocean vessels — and at the junction of the rivers with the 
 bays by which the sea indents the coast at numerous places from Cape 
 Fear southward. On the low coast lands rice and indigo were the crops 
 most grown, while from the adjacent sandy uplands the pine forests 
 provided unlimited quantities of tar, pitch, turpentine, and rosin, the 
 "naval stores" of those days. 
 
 The main products grown or secured from the coastal plain from 
 Delaware Bay to Florida — tobacco, rice, indigo, naval stores — ^were 
 export commodities. There could be but small market for them in 
 America; if sold at all they must be sent across the sea; hence it was 
 that the southern colonies had a larger commerce with Europe than did 
 the middle and New England colonies, despite the fact that the people 
 of the northern settlements had a more diversified industrial life and 
 engaged far more actively in maritime pursuits. 
 
 THE PIEDMONT. 
 
 In New England the piedmont extends inland from the ocean to 
 the mountains, while from New York south the piedmont reaches 
 inland from the fall line to the first distinct mountain ridge. This 
 ridge includes the highlands through which the Hudson has cut its 
 scenic course, the highlands of New Jersey, the range of hills from the 
 Delaware below Easton to Reading on the Schuylkill, the northern 
 half of South Mountain running southwest from Reading toward the 
 Susquehanna Valley, South Mountain extending from near the Susque- 
 hanna to the Potomac at Harper's Ferry, and the Blue Ridge, which 
 from the Potomac south presents an unbroken range of mountains that 
 grow higher and broader, until their climax is reached in the high sum- 
 mits and wide ranges of the CaroHnas. 
 
 From the Hudson to the Potomac the piedmont belt is narrow and 
 is made up of a rolling country of high average fertility, seldom reaching 
 500 feet above the sea level. The productive farming and dairying 
 coundes of southeastern Pennsylvania— with the exceprion of those in 
 the Appalachian Valley to be described presently— lie within the 
 piedmont. From the Potomac River to northern Georgia the pied- 
 mont is a broad upland country, much of which is between 500 and 
 I 000 feet above the sea. This wide belt of well-rimbered "foot hills" 
 
12 
 
 History of Domestic and Foreign Commerce. 
 
 was but gradually settled and not fully occupied during the colonial 
 period; indeed, many of the central sections of Virginia and the Caro- 
 linas are somewhat sparsely settled even to-day. Its soils average well, 
 though not high, in fertility, but when well tilled they yield good 
 returns. During the first half of the seventeenth century this region 
 furnished furs for export; thereafter lumber and naval stores became 
 most important, while plantations and farms advanced slowly up the 
 river valleys and back from them on to the intervening divides. The 
 first great development of the piedmont in the Carolinas and Georgia 
 came toward the end of the eighteenth century, when cotton became a 
 profitable crop. 
 
 THE APPALACHIAN OR GREAT VALLEY. 
 
 West of the Blue Ridge and its northern extensions, and intervening 
 between that range of mountains and the eastern front of the broad 
 Allegheny plateau, lies the Appalachian or "Great" Valley. This 
 remarkable valley extends, with nearly unbroken continuity, from the 
 Gulf of St. Lawrence almost to the Gulf of Mexico. From north to 
 south this intermontane depression includes in turn the lower basin of 
 the St. Lawrence River and Lake St. Peter, the trough containing 
 the Richeheu River, Lake Champlain, and the Hudson River, the " Kit- 
 tatinny" Valley across northern New Jersey, the AUentown-Lebanon- 
 Cumberland Valley stretching across Pennsylvania and Maryland to 
 the Potomac, the Shenandoah Valley of Virginia, the somewhat dis- 
 connected but physiographically related mountain valleys occupied 
 by the headwaters of the Kanawha, New, and Tennessee rivers, and 
 lastly, the valley of the Coosa River, which sends its waters by way of 
 the Alabama River to Mobile Bay. 
 
 The Appalachian Valley is noted for its exceptional fertility. North 
 of New Jersey glaciation has limited its productive powers, but south 
 of New Jersey the soils of much of the valley are formed of disinte- 
 grated Hmestone. "There is, perhaps, no other area in the United 
 States where as wide a range of field and garden crops will flourish 
 with the same luxuriance as here."^ Lying at an elevation of 500 to 
 2,000 feet above the sea (except in the highest mountains of North 
 Carolina and Tennessee), and having everjrwhere abundant rainfall 
 and a most favorable climate, with summers that are not enervating 
 and winters that are only moderately cold everywhere, except in 
 northern New York and in Canada, this valley along the eastern edge 
 of the Adirondack, Catskill, and Allegheny Mountains early invited 
 settlement. Indeed, within fifty years after the founding of Phila- 
 delphia scores of towns had been started in the Lebanon-Cumberland 
 Valleys, and the occupation of the beautiful Shenandoah Valley had 
 
 'Shaler, United States of America, I, 72. 
 
Geographic Influences Affecting Early Development. 13 
 
 been begun by emigrants from tidewater Virginia and by the Scotch- 
 Irish and Germans who came south from Pennsylvania. During the 
 hrst two-thirds of the eighteenth century the Great Valley, and the 
 many lesser valleys opening out from it, constituted the western 
 frontier, towards which emigration was steadily directed. 
 
 This fertile valley, lying relatively near the sea and readily accessible, 
 was an influential factor in the economic progress of the colonies during 
 the fifty years preceding the Revolution. While the expenses of 
 transportation by the ways and vehicles then available prevented the 
 valley from exporting much of its food products over-sea, its agricul- 
 tural surplus enabled the farming sections of the country nearer the 
 seaports to ship more than they otherwise could of their grain and pro-^ 
 visions to the West Indies and to Europe. Moreover, when the long) 
 war with Great Britain cut off the maritime commerce of America for 
 seven years and threw heavy financial burdens upon the people of 
 the new commonwealth, they were strengthened economically by thr-* 
 wealth annually created in the Appalachian Valley, the agricultural 
 West of that day. 
 
 THE RIVERS AS HIGHWAYS OF INLAND COMMERCE. 
 
 The commercial highways of the colonies were the ocean and the 
 rivers. Starting along the bays and at the head of tidewater naviga- 
 tion, settlement advanced inland along the streams and spread thence 
 laterally over the country by way of the tributaries of the rivers. 
 Most of the intercolonial intercourse was coastwise by the sea and on 
 such long arms of the ocean as the Delaware and Chesapeake bays; 
 although the rivers (the Merrimac, Connecticut, Delaware, Susque- 
 hanna, Potomac, and Savannah) were also used to a minor extent in 
 intercolonial trafl&c. 
 
 Practically the only avenues of inland commerce were the rivers, 
 which until some time after the beginning of the national period 
 remained unimproved. The rivers, however, were far more serviceable 
 to commerce in the seventeenth and eighteenth centuries than they are 
 to-day; not only because traffic was then of small volume and was 
 handled in small units, but from the fact that the rivers then drained 
 well-forested catchment basins from which the run-off of water into the 
 streams was less rapid in times of heavy rainfall and was more evenly 
 distributed through the year than is now the case, when the forest 
 areas have been greatly restricted or totally destroyed by axe, fire, 
 and plow. 
 
 The crudely constructed boats brought the productions of the up- 
 country settlements down the Connecticut, Hudson, Delaware, and 
 other rivers cheaply and without great difficulty, during most of the 
 year except in the winter, to supply the markets of the seaports and 
 load the vessels outbound for the West Indies or Europe. The move- 
 
14 History of Domestic and Foreign Commerce. 
 
 ment of traffic up-stream was more expensive, but its volume was 
 light as compared with shipments made with the current. As long as 
 settlement was confined mainly to the river valleys, the transportation 
 facilities afforded by the streams enabled the colonies to make steady 
 though moderate progress. When the country east of the Allegheny 
 Mountains came to be generally occupied, as it did toward the end of 
 the eighteenth century, turnpike roads were constructed to facilitate 
 long-distance traffic and the agitation for river improvement and canal 
 construction gathered headway. 
 
 THE ALLEGHENY PASSES AND THE BEGINNINGS OF WESTERN COMMERCE. 
 
 Even before the Revolution the colonies south of New York began to 
 push across the mountains and to plant outposts along the upper waters 
 of the Ohio and Tennessee rivers. The main gateways of the AUe- 
 ghenies were reached by ascending the rivers. The broad plateau from 
 which the Allegheny Mountains rise slopes to the southeast as far as the 
 valley of the New River, and consequently the Delaware, Susquehanna, 
 Potomac, and James rivers cut their way across the ranges and reach 
 the piedmont through deep gaps. The southern half of the Appa- 
 lachian highland slopes to the west and south, and the New, Holston, 
 and other rivers by which it is drained rise near the Blue Ridge, on the 
 eastern margin of the plateau. 
 
 The approach from Pennsylvania was up the Susquehanna by way 
 of its West Branch and the Juniata and its southern affluents, and 
 thence across to the streams flowing into the Allegheny River. From 
 Maryland and Virginia the route west was up the Potomac, either to 
 Cumberland and over the gap to the Youghiogheny River, or up to the 
 mouth of the Shenandoah and by that stream to its head and on into 
 the valley of the upper James, where a route might be taken westward 
 up the James and across to the Greenbrier and thence to the Kanawha, 
 or a trail might be followed to and up the New River to the divide 
 leading to the headwaters of the Holston, which was sometimes fol- 
 lowed to its union with the Tennessee, but more frequently was left 
 just north of the boundary of North Carolina, where passes were 
 crossed into the valleys of the Clinch and other streams, from which the 
 trail led through the Cumberland Gap to the headwaters of the Cum- 
 berland River. Another western route frequently taken by the tide- 
 water Virginians was up the James and thence either by the Greenbrier 
 River or by the Cumberland Gap. The people of Carolina had only 
 to cross the Blue Ridge from the Yadkin and other streams to reach 
 the New River or the streams flowing into the Holston. 
 
 The natural approaches to the West from the Atlantic seaboard lay 
 to the north and south of the Allegheny Mountains through New 
 York and northern Georgia; but the Hudson-Mohawk route ran 
 
Geographic Influences Affecting Early Development. 15 
 
 through the territory of the powerful Iroquois, who closed that route 
 as a highway for the westward progress of the English; while at the 
 southern end of the mountains were the Creeks and Cherokees, whom 
 the Spaniards inspired to oppose the Enghsh. It was not until some 
 time after the establishment of the National Government that these 
 easier highways to the West could be safely taken. 
 
 The advance of population across the Alleghenies by these routes 
 was the first of the great westward movements by which the American 
 continent has been occupied from ocean to ocean. The settlements 
 made after the close of the French and Indian War in western Penn- 
 sylvania, and in what is now Ohio, Kentucky, and Tennessee, could 
 have no trade with the people on the Atlantic slope, because the 
 mountains were an impassable barrier to transportation. The first 
 commerce of the trans-Allegheny sections was carried on through New 
 Orleans, with which they were connected by river ways. This river 
 trade, however, did not antedate the Revolution. Regular commercial 
 intercourse between the sections east and west of the Alleghenies began 
 during the last decade of the eighteenth century; and it was not until 
 the second and third decades of the nineteenth century that the trans- 
 portation facilities were such as to permit much traffic to be carried 
 across the Alleghenies. 
 
 It is an accurate generalization, that throughout the colonial 
 period, American commerce, with the exception of the fur trade, was 
 restricted by geographic conditions to the domestic and over-sea trade 
 of the section lying between the Alleghenies and the ocean; that the 
 shipment of goods from the western slopes of the Alleghenies to the 
 mouth of the Mississippi began after the Revolution; and that the 
 traffic east and west across the Alleghenies did not become of much 
 importance before the beginning of the nineteenth century. 
 
 GENERAL RESULTS OF GEOGRAPHIC CONTROL. 
 
 This brief survey of the geographic conditions obtaining on the 
 Atlantic slope of America from Newfoundland to Florida suffices to 
 show that the productions and the consequent trade of the three large 
 sections — the New England, the middle, and the southern colonies — 
 were subject to dissimilar geographic controls. 
 
 By devoting themselves to fishing, shipbuilding, navigation, and to 
 raising the cereals of the northern temperate latitudes,^ the settlers 
 of New England tended to compete with the people of England. 
 Consequently the British markets for the exports of New England were 
 restricted both by the economic activities of the English people and— 
 with the exception of the building and operarion of ships— also by the 
 navigarion and trade laws enacted by England to protect and develop 
 her industries. Their geographic environment predestmed the New 
 England colonists to trade, and being unable to exchange their com- 
 
i6 History of Domestic and Foreign Commerce. 
 
 modities under favorable conditions in England for the British manu- 
 factures they required, the people of New England built up a large 
 export trade to the West Indies and thereby secured the goods, coin, and 
 bills of exchange with which to purchase EngUsh wares. 
 
 The colonies of New York, New Jersey, Pennsylvania, and Delaware, 
 which were rich in agricultural and forest resources and had some min- 
 eral wealth, also found profit in engaging in the West Indian trade. 
 These colonies could trade with the home country more easily than New 
 England could; but their imports from England greatly exceeded their 
 exportations to that country. Until after the close of the eighteenth 
 century Great Britain's imports from America consisted mainly of the 
 commodities she did not produce at home; hence it was that the tobacco 
 of Maryland and Virginia, and the naval stores, rice, and indigo of the 
 Carolinas and Georgia, constituted the larger share of the colonial 
 exports to Great Britain. 
 
 The effect of the geographic forces that caused England to import a 
 comparatively small amount of the products of New England and the 
 middle colonies and to buy large quantities of tlie natural exports of 
 Maryland and the more southern colonies was augmented by the corn 
 laws and trade legislation enacted by England and Great Britain during 
 the seventeenth century. American geographic conditions influenced 
 the development of American commerce during the colonial period, 
 and in those conditions are to be found some of the reasons why Eng- 
 land legislated as she did in regulating the industries and trade of her 
 American colonies. 
 
CHAPTER II. 
 
 THE BEGINNINGS OF AMERICAN COMMERCE, 1600 TO 1660. 
 
 Newfoundland fisheries in the sixteenth century, l8. Settlement of America begun 
 by chartered trading companies, i8. Services of chartered companies in early 
 development of American commerce, i8. The London Company and early trade of 
 Virginia, 21. The Plymouth colony and its early trade organization, 25. The 
 Massachusetts Bay colony and its early trade organization, 26. The Laconia 
 Company, 28. New Netherland and its trade, 28. Patroonships and their 
 results, 29. Early trade of New Jersey and Maryland, 30. Beginnings of inter- 
 colonial trade, 31. General survey of American commerce in 1660, 33. 
 
 The commercial intercourse of Europe with America preceded the 
 planting of colonies in the New World. Spain, as the leader in the 
 exploration of America, took possession of a large part of northern 
 South America, the West Indies, and southern North America, accom- 
 panying her conquests with a confiscation of the stores of precious 
 metals that had been garnered through preceding ages by the Indians 
 in their slow progress from savagery towards social organization. The 
 Indians having been robbed of their treasures, the Spaniards engaged 
 extensively in the mining of silver, and thus it came about that, as 
 an incident to the maintenance of her authority in her possessions and 
 to the support of the mining operations of her subjects, Spain regularly 
 despatched her merchantmen and galleons to carry supplies to America 
 and to bring back the bullion her subjects had wrested from the natives 
 or had unearthed from the rich stores of unmined metal. The return- 
 ing treasure ships were eagerly awaited in Spain, where bullion was 
 prized more highly than all other forms of wealth, and although the 
 piratical prowess of the covetous English sea-rovers made England 
 instead of Spain the actual destination of not a few treasured cargoes, 
 the precious metals from America flowed, a copious stream, into and 
 beyond Spain, thereby enriching the money supply and quickening 
 the industries of all Europe. 
 
 The 'English, hke the Spaniards, were drawn to America during 
 the sixteenth century in part by their love of adventure — the lode- 
 stone that made pirates of reckless men, buccaneers of ambitious and 
 not overscrupulous patriots, and explorers and pioneers of men of 
 finer mold — and in part by that strange fascination which the precious 
 metals have ever had for men of all lands. From the voyages of the 
 Cabots at the close of the fifteenth century to the explorations of Gil- 
 bert and the unfortunate colonizing efforts of Raleigh and Gosnold 
 during the last quarter of the sixteenth century, the main objects sought 
 were gold and silver; indeed, the first settlers at Jamestown were so 
 much more desirous of mining than of planting that only direst suffering 
 and even starvation could force them to cultivate the soil while there 
 was any hope of discovering mines of precious metals. 
 
 '7 
 
1 8 History of Domestic and Foreign Commerce. 
 
 Luckily for them, the English in exploring the shore lands of the 
 continent of North America found neither accumulated hoards nor 
 mines of gold and silver, and thus in time they came to realize— much 
 more promptly than did the Spaniards— that the fisheries of the 
 Atlantic coast and the fertility of the American mainland could yield 
 far greater wealth than could be raised from even the richest mines. 
 
 The English, Dutch, and French had long appreciated the value of 
 the fisheries of Newfoundland and the coasts to the south and west. 
 Sebastian Cabot on his first voyage, in 1497, had discovered Newfound- 
 land and St. Johns, and had told the English people of the good fishing 
 grounds he had found. Fishing expeditions from England to those 
 shores must have become regular and frequent during the early part 
 of the sixteenth century, for the fisheries there had become important 
 enough to be mentioned in acts of Parliament in 1540 and 1547. 
 According to a letter received by Hakluyt, in 1577, fifty ships from 
 England were annually visiting Newfoundland. The French followed 
 the trans-Atlantic fisheries more eagerly than did the English, there 
 being 150 French vessels off Newfoundland in 1578, and temporary 
 stations and posts were established at various places in the Gulf of St. 
 Lawrence.^ On his second, and to him fatal, voyage (1583) Gilbert 
 put in at St. Johns Harbor, where he found thirty-six ships "of all 
 nations," and the importance to which the Newfoundland fisheries 
 had by that time attained is indicated by the fact that Gilbert was able 
 to provide his fleet with supplies "as if we had bene in a Countrey, or 
 some Citie, populous and plentifuU of all things."^ 
 
 The voyages of the explorers and, to a greater extent, the pursuit 
 of the fisheries required some trading to and in America. When 
 Gilbert sailed on the voyage just referred to, a portion of the outfit 
 of his five small vessels consisted of "petty haberdasheries" for trading 
 with the savages. The fishing craft and the stations in America were 
 necessarily supplied from Europe. That there may have been trading 
 along the coast to the southwest of Newfoundland is probable, and that 
 furs and timber, as well as fish, were at times taken back to Europe is 
 equally believable, although this traffic could have been neither regular 
 nor of large volume. Systematic trading and commerce began with 
 the establishment of settlements at Jamestown, New Plymouth, New 
 Amsterdam, and elsewhere. 
 
 SERVICES OF CHARTERED COMPANIES IN SETTLEMENT AND EARLY COMMERCE 
 
 OF AMERICA. 
 
 The earher settlements in America were planted and, for a while, 
 maintained by companies chartered in England and Holland — the 
 London, Plymouth, Canada and West India companies. In the case 
 of Virginia the colony was sent out directly by the "London" company; 
 in New Netherland likewise, the parent company, the West India 
 
 ^Avery, History of the United States, II, 1. 'Statement by Hayes in Hakluyt, VIII, 62. 
 
The Beginnings of American Commerce, 1600 to 1660. 19 
 
 Company, acted without an intermediary; while at Plymouth and 
 on Massachusetts Bay the colonies were established by patentees of the 
 English companies, of the London Company in the case of Plymouth, 
 and of the Council for New England as regards the plantations about 
 Massachusetts Bay. Other and later colonies were founded by "pro- 
 prietors," sometimes an individual, sometimes companies, upon whom 
 the King bestowed powers similar to those that had been intrusted to 
 the earlier companies. 
 
 Inasmuch as American trade, in the sense of regular and systematic 
 commercial intercourse, was started by the chartered companies, an 
 analysis may well be made of the functions they performed in the early 
 development of American commerce. We are now so accustomed to 
 thinking of commerce as an activity of any individual or group of men 
 who may elect to devote their money and labors to transportation or 
 trade, and we are so trained to regard the government's relation to 
 trade to be that of guaranteeing every one an open and fair opportunity, 
 that the purpose or the wisdom of the English and other governments 
 in the seventeenth century in turning over the settlement, the govern- 
 ment, and the commerce of large sections of the world to companies 
 with grants of exclusive monopolies is not readily manifest. 
 
 The commercial companies were chartered for economic and political 
 reasons. There was a marked extension of trade during the sixteenth 
 and seventeenth centuries, both within Europe and between Europe 
 and newly discovered lands. At the same time the universally 
 accepted theory of commerce was that, if it were left unregulated by 
 the government, the country would suffer. Most persons still thought 
 of trade as benefiting only one party to an exchange; and, if it were 
 needful that the government should be mindful of what trade was 
 carried on near home and of how it was conducted, it was far more 
 necessary for the State to make certain that commerce with distant 
 countries and sections should be organized and developed under 
 government patronage and control. The government, it was con- 
 ceived, ought either to do the trading through its own officials, as some 
 States had done in former centuries, or to intrust the commerce 
 to a carefully regulated and readily controllable company. J Hence it 
 was that there were so many companies chartered with grants of com- 
 mercial monopoHes and large political powers during the sixteenth and 
 seventeenth centuries. The chartered companies were one expression 
 of the mercantile system of poHtical and economic thinking, which will 
 be explained more fully in discussing the Navigation and Trade Acts 
 passed by England, in 1651 and later, to regulate the industries and 
 trade of her colonies. 
 
 The corporation or large stock company was a better agency than 
 the individual traders, if indeed it was not the only practicable one for 
 carrying on distant commerce in the stormy times of the sixteenth 
 
20 History of Domestic and Foreign Commerce. 
 
 and seventeenth centuries, when corsairs and pirates haunted all the 
 seas frequented by merchant shipping and when even minor states and 
 petty principalities wrung as many extortions as possible from traders 
 not strong enough to secure exemption from interference. Moreover, 
 few if any individuals could either command sufficient capital or safely 
 risk their fortunes in distant commerce, when at least several months 
 and often several years must elapse before returns could be secured. 
 
 The development of a commerce with a section where colonies were 
 to be planted or where "factories" or forts or stations were to be main- 
 tained presented especially great difficulties, too great, indeed, for the 
 individual trader. As Professor Cheyney states •} 
 
 "The preliminary equipment of ships, the purchase of supplies and mer- 
 chandise, the acquisition of land, the building of forts, and the supply of 
 weapons and military material; the payment of a military force to protect 
 their commerce against natives or interloping Europeans; the expenses, in 
 many cases, of transporting colonists, and finally the long waiting before 
 returns could be reasonably hoped for — some or all of these expenses were 
 inseparable from the whole plan of establishing distant trade. It was no 
 wonder that individual traders gave place to great unions of the merchants 
 of London, Amsterdam, or Dieppe, who risked part of their means and united 
 their resources to form companies to trade with the East and West Indies, 
 Africa, and other outlying parts of the world." 
 
 The companies that undertook to plant colonies in distant frontier 
 sections of the world and to build up a trade between those regions 
 and the home country were necessarily granted large political and 
 administrative powers, because they could not otherwise hope to 
 accomplish the economic objects for which they existed. The home 
 government was unable to protect the lives and the property of the 
 "adventurers" and to maintain order in the distant wilds of America 
 or in far-away India; hence they intrusted the companies with political 
 powers. 
 
 In chartering and supporting commercial companies each country 
 was seeking to strengthen itself in its unavoidable competitive struggles 
 with other countries. It was to spread its dominion over a wider 
 territory; to establish a favorable military or naval base, to insure a 
 favorable balance of trade or to outdo a rival in some one of many 
 ways — these objects in part or as a whole led to the chartering of the 
 commercial companies. 
 
 The companies chartered to colonize America and develop trade 
 with that part of the world were bodies whose chief objects were com- 
 mercial. They sought dividends, first of all; the planting of colonies 
 and the consequent spread of the civilization and religion of their 
 country was a secondary, but not by any means an ignored, considera- 
 tion. They failed in their main purpose, and as time went on they 
 
 ^European Background of American History, 161. 
 
The Beginnings of American Commerce, 1600 to 1660. 21 
 
 became more distinctly colonizing and political organizations. They 
 accomplished a larger and higher task than they had set about to do, 
 and wrought more wisely than they knew. 
 
 The contribution of the chartered companies to the early develop- 
 ment of American commerce may be summarized under four heads: 
 (i) They brought about the settlement of the country. Without their 
 aid the colonization of America must needs have come much later. 
 (2) In planting their colonies and in furnishing them with the supplies 
 required during the early years of trial the companies organized voyages 
 to and fro between Europe and America. Their experiences in these 
 trips and the results of those early years of trafficking paved the wa/ 
 for the individual traders that succeeded the companies. (3) The 
 companies first placed the natural products of America, the furs, 
 timber, tobacco, etc., upon the markets of the Old World. The 
 demand for American produce was thus created and made more definite, 
 and when the individual merchant began to trade he knew, in part at 
 least, what commodities could be readily sold at home. (4) Similarly 
 the trader was better informed as to the requirements of the settlers 
 in the wilds of America than the companies had been when they sent 
 out their colonies. He could better judge of the American market. 
 
 THE LONDON COMPANY AND EARLY TRADE WITH VIRGINIA. 
 
 The London Company, under the official title of "The Treasurer and 
 Company of Adventurers and Planters of the City of London for the 
 First Colony of Virginia," secured its charter in 1606,^ the year before 
 it planted the colony at Jamestown. The company was granted the 
 right to establish a plantation at any point on the Virginia coast 
 between the thirty-fourth and forty-first parallels of north latitude; 
 while at the same time the Plymouth Company (the history of which 
 will be given later) was given the right to plant a settlement anywhere 
 between the thirty-eighth and forty-fifth parallels. To prevent the 
 possibility of a conflict of jurisdiction within that territory, in which 
 both companies were permitted to settle, namely, that lying between 
 38° and 41°, it was provided "that the plantation and habitation of 
 such of the said colonies as shall last plant themselves, as aforesaid 
 shall not be made within one hundred like English miles of the other of 
 them, that first began to make their plantation." Each colony was 
 to have the exclusive possession of the land and all its resources within a 
 region extending for a distance of 100 miles along the coast, 50 miles north 
 and south of its first plantation, and 100 miles inland, as well as the pos- 
 session of all islands situated within 100 miles of the land, in that part 
 
 'The charter of 1606 is printed in full in Stith, History of Virginia, I; also in Brown, Genesis of 
 the United States. The charter of 1609 is to be found in Stith, I, app. ii, and with some omissions 
 in Brown I 208-237. The powers conferred by the charter of 1609 are summarized and dis- 
 cussed in'cheyney, European Background of American History, ch^p. vm; compare also the 
 paper by H L. Osgood on "The Colonial Corporation,' in Pol. Set. Quar.. XI, 1896, pp. 2^4r<268. 
 
22 History of Domestic and Foreign Commerce. 
 
 of the sea lying "over against" the coast hne to which the company 
 became entitled, and no one was to be "permitted, or suffered to plant 
 or inhabit behind, or on the backside" of the possessions of either 
 colony, "without the express licence or consent of the council of that 
 colony." By the charter of 1609, which replaced the original instru- 
 ment, the membership of the London Company was greatly enlarged, 
 and the territory granted was made to include a strip 400 miles wide, 
 200 miles north and south of Point Comfort. A third charter confer- 
 ring some additional financial powers was granted in 161 2. 
 
 By these charters, the London Company was required to take 
 settlers to the territory granted; and, to enable it to profit thereby, 
 the company was given a complete monopoly of trade until 1616; 
 supplies sent from England to Virginia for the "support, equipment, 
 or defense" of the colonists were, by the charter of 1606, to be free of 
 export duties for seven years; the imports into Virginia were to be 
 free for twenty years; and the duty on imports into England from 
 Virginia was never to exceed 5 per cent. Trade with the natives was 
 to be free of tax for seven years. 
 
 The experience of the London Company in organizing and carrying 
 on the commerce of Virginia for a decade and a half makes an instruc- 
 tive chapter in the history of commerce. Although the company 
 failed to make any profits for its adventuring members (they lost all their 
 investments, indeed), the men who controlled its councils are entitled 
 to great praise for the sacrifices they made of time and capital to plant 
 and maintain in America an outpost of English civilization. 
 
 The charter of 1609 made it possible for all goods sent out to the 
 colony to be dispatched by the company's supply ships, the funds 
 required for the purchase of the ships and goods thus dispatched being 
 obtained from indivfdual members of the company who subscribed in 
 their own names such sums as they cared to adventure. The goods 
 were shipped as the property of the subscribers as a body, who were 
 each to share in the profits of the venture in accordance with the 
 amounts of their respective subscriptions; but there was to be no divi- 
 sion of profits until 1616. When the goods thus sent reached the colony 
 they were to be stored in the company's magazine and were to be dis- 
 tributed by an official called the Cape Merchant, who was also the 
 treasurer of the colony. The second Cape Merchant was the famous 
 Captain John Smith. 
 
 The first colonists were started over, in December 1606, in three 
 small vessels that reached the James River in April 1607. Somewhat 
 more than a year later two supply ships were dispatched, and in the 
 autumn of 1608 yet other vessels were sent with supplies. It was 
 expected by the adventurers that the goods thus shipped to Virginia 
 would be exchanged for the products of the New World and that the 
 articles brought to England would yield a profit to the investors. 
 
The Beginnings of American Commerce, 1600 to 1660. 23 
 
 As a matter of fact, the members of the company received no returns 
 whatever. The colonists were in such straits that they had to be 
 supported by the company for four or five years; indeed, had the 
 company not sustained the colonists during those uncertain years the 
 whole colonizing venture must have failed. 
 
 Possibly the subscriptions of the adventurers might not have been 
 altogether lost had all the goods sent out by them reached the storehouse 
 in Jamestown; but unfortunately both the agents of the company who 
 were sent with the supplies and the sailors on the vessels, in spite of 
 stringent laws to the contrary, appropriated a large part of the supplies 
 and traded in them on their own account with the Indians and the 
 colonists instead of depositing the goods in the magazine for distribu- 
 tion by the Cape Merchant. 
 
 In theory the two colonies planted in America in 1607 by the Lon- 
 don and Plymouth Companies — one at Jamestown and theotherat Saga- 
 dahoc at the mouth of the Kennebec River — ^were private commercial 
 ventures of joint-stock companies. As Professor H. L. Osgood says :^ 
 
 "The colonies which were founded at Sagadahoc and Jamestown were both 
 plantations, owned, officered, and managed by the proprietors or company. 
 The colonists were servants of the company. They were freely transported 
 to Virginia in its vessels, and there worked for the company under prescribed 
 regulations. They were fed and housed out of the products of the total labor 
 of the colony, supplemented by cargoes of provisions received from home. 
 When, if ever, the colony became able to furnish a surplus product — lumber, 
 furs, tobacco — it was sent home in the vessels of the company and sold for 
 the benefit of the adventurers. A profit, supposedly large, was also made by 
 the adventurers and officers of their vessels on European goods taken to the 
 colony and sold. These, as well as supplies of provisions from England, were 
 regularly stored in a magazine or storehouse under the charge of a Cape 
 Merchant, whence they were delivered to the colonists." 
 
 The colonial officials "were more truly overseers and factors than 
 governors, councilors, and judges." 
 
 The London Company did not meet with the commercial success 
 it anticipated, and as the first trading venture had proved an entire 
 loss, much difficulty was experienced in 1608 in securing funds for the 
 second supply ships, and this caused the company to secure its second 
 charter (1609) by which no less than 650 individuals and 56 city com- 
 panies came together as a "company of private adventurers for the 
 advancement of the plantation" in Virginia. By dint of heroic efforts, 
 supply ships in increasing numbers were despatched annually during 
 1609, 1610, and 161 1, no less than 10 vessels being sent in 161 1; but the 
 Virginia settlements were still struggling for existence, and returning 
 vessels brought back no profits. The exports of Virginia were not of 
 much value until the tobacco trade began. It was not until 1612 that 
 the systematic cultivation of that plant was begun, and naturally a 
 
 ^The American Colonies in the Seventeenth Century, I, 34. 
 
24 History of Domestic and Foreign Commerce. 
 
 few years thereafter must needs elapse before the tobacco exports 
 could become of large volume. 
 
 The financial troubles of the company in 1612 were such that they 
 then secured a new or amended charter authorizing them to raise 
 funds by lotteries. By this device some funds were secured, and some 
 cash was also obtained by lawsuits instituted against those members 
 who had not paid in the amount of their subscriptions. But the capital 
 thus derived went the way of the former investments; and when, 
 in 1616, the time came to return to the subscribers the capital they had 
 adventured and the accumulated profits thereon, there was nothing 
 whatever to divide. However, the Virginia colony had now become 
 securely established, and it seemed possible that a profitable trade 
 might yet be carried on, if it could be rightly organized and managed. 
 
 The company decided to try a new kind of trade management, and 
 there was formed "The Society of Particular Adventurers for Traffic 
 with the People of Virginia in Joint Stock," i. e., certain members of 
 the company united as a joint-stock association to send out goods in 
 the name of a magazine, the members of the group subscribing, indi- 
 vidually in such amounts as they chose, to the magazine, which 
 was to be administered in England by a director and five councilors. 
 The company still reserved its right to trade as a company, but as a 
 matter of fact did not engage in trade. No individuals outside of the 
 members of the company were allowed to enter the commerce of 
 Virginia. The monopoly principle was still adhered to; but the plan 
 failed and greater freedom of trading became necessary. 
 
 The first step toward freedom of trading was taken in 16 19, when 
 persons not members of the company were permitted to ship cattle, 
 grain, and munitions of war to Virginia. The following year the com- 
 merce of Virginia became free to any Englishman who chose to engage 
 in it; indeed, the exclusion of the Dutch and other nationalties from the 
 trade was theoretical rather than real. 
 
 Virginia came directly under the royal government in 1624, when 
 Charles I annulled the charter of the London Company. This event, 
 however, was of slight significance so far as the commercial develop- 
 ment of the colony was concerned. The industrial progress of the 
 colony had become assured; its trade was open to all, and was soon 
 being carried on by such enterprising English merchants as John 
 Preen of London, who, aided by two associates, got permission, in 1626, 
 to carry goods, munitions, and passengers to Virginia, and was able to 
 testify two years later that he had sent out supplies on four occasions. 
 
 While it would require too great space to describe the early commerce 
 of each colony as fully as that of Virginia has been considered, a brief 
 account of the beginnings of the trade of New England, and New' 
 Netherland, and a short reference to other colonies seems desirable. 
 
The Beginnings of American Commerce, 1600 to 1660. 25 
 
 THE PLYMOUTH COLONY AND ITS EARLY TRADE ORGANIZATION. 
 
 After its unsuccessful attempt to establish a colony at Sagadahoc 
 at the mouth of the Kennebec River, in 1607-08, the Plymouth Com- 
 pany of Adventurers to North Virginia made no further serious efforts 
 to establish plantations within its territory, and the first colony 
 to be estabHshed in the region to which Captain John Smith, in 1614, 
 gave the name New England, instead of North Virginia as it had 
 previously been called, was that planted in 1620 at New Plymouth by 
 the Pilgrims, who secured their patent from the London, and not from 
 the Plymouth, Company. The business arrangement by which the 
 colony was established was a partnership composed of the colonists 
 and certain adventurers or capitaUsts in England. The shares were 
 £10 each, and each colonist counted as one share; the adventurers 
 supplied the funds to finance the expedition. All the earnings of the 
 colonists during the first seven years were to belong to the partnership. 
 At the end of the period the profits were to be divided. Meanwhile 
 there was to be no private property. 
 
 When the Pilgrims obtained their patent from the London Company, 
 they intended to locate within its grant, but New Plymouth, where 
 they settled, was within the grant made to the Plymouth Company in 
 1606. Accordingly they applied for, and secured, a patent from that 
 company, or rather from its successors; for, in November 1620, the 
 Plymouth Company obtained new letters-patent from Charles I, and 
 became the New England Council, or more precisely "The Council 
 estabHshed at Plymouth, in the County of Devon, for the planting, 
 ruling, ordering and governing New England in America." The colo- 
 nists in New Plymouth, however, had few dealings with the New 
 England Council; their business relations were with their partners in 
 England, the adventurers, who were in reality their proprietors. 
 
 The plan of having all property at New Plymouth in common proved 
 unworkable. The first homes were constructed and owned by their 
 builders to whom lots for houses had been assigned. The food supply 
 during 162 1 and 1622 was so scarce that famine nearly swept away the 
 struggling settlement, but conditions changed for the better in 1623, 
 when the cornfields were allotted as individual holdings. In 1627 
 the tillable land and the domestic animals owned in common were 
 divided among the colonists, and in 1633 the meadow lands were 
 allotted; thus communal property came to an end. 
 
 Meanwhile the management of the Plymouth Colony's commerce 
 had been revolutionized. During the early years the trade was 
 moAopolized by the EngHsh adventurers who were financing the colony. 
 Their ships brought out the suppUes and the new settlers and returned 
 to England with clapboards and beaver skins. This trade monopoly 
 soon grew irksome to the colonists, and at the end of the seven-year 
 
26 History of Domestic and Foreign Commerce. 
 
 term of their partnership contract, they bought out the claims of their 
 partners in England. 
 
 The funds for the Pilgrims were provided by a group of merchant 
 adventurers living in England, with an agreement that the venture 
 was to be communal in its nature and a division of profits to be made 
 at the end of seven years. 
 
 In 1628, the Plymouth settlers agreed to buy out the mterest of the 
 English adventurers for the sum of £1,800, payable in nine annual 
 installments of £200 each. The same year eight men of Plymouth and 
 four men in London assumed this debt of £1,800, together with the 
 other debts of the colony, amounting to about £600, in return for which 
 they received for a period of six years the monopoly of the trade of the 
 colony. 
 
 According to Bradford, the EngHsh partners, with the connivance 
 of Isaac Allerton, who was one of the Plymouth eight and the agent 
 for the colony in its early business transactions in England, soon 
 involved the colony in debts amounting to about £5,000, in addition to 
 the sums yet due the original adventurers. Allerton was dismissed and 
 the trading was carried on by Winslow and others. 
 
 When an attempt was made to settle the accounts between the 
 London and the Plymouth groups, it was found that they were in such 
 an involved condition that it was impossible to get a definite statement 
 of affairs. After much trouble a compromise was reached, by the 
 terms of which the Plymouth settlers agreed to pay the London part- 
 ners about £1,200, in full settlement of their claims. The last of this 
 sum was paid presumably in 1646. 
 
 The annual payments of the debt of £1,800 to the original adven- 
 turers were promptly met and this debt was cleared in 1636. The 
 bonds were finally delivered to the colony about 1642, the year in which 
 the compromise with the London partners was concluded. 
 
 THE MASSACHUSETTS BAY COLONY; ITS EARLY TRADE ORGANIZATION. 
 
 The Massachusetts Bay Colony secured its patent from the New 
 England Council in 1628, and in the following year obtained a charter 
 from Charles I, by whom the grant of territory was confirmed and full 
 corporate rights and governmental powers were granted. The govern- 
 ment of the colony, according to the patent of 1628, was to consist of a 
 general court {i. e., the company itself) in England, and by a court 
 resident in the colony; but, most fortunately for the political future of 
 America, the Massachusetts Bay Company (the general court) decided 
 in October 1629, to transfer itself to the colony. Thus it was that 
 Massachusetts Bay came to be a truly self-governing colony. ^'y-^ 
 
 When the company, or general court, made the transfer from Eng- 
 land to America it had debts amounting to £2,500, and it had need for 
 £1,500 additional for immediate use. To secure the necessary funds, 
 
The Beginnings of American Commerce, 1600 to 1660. 27 
 
 the favored device of creating a trade monopoly was resorted to; 
 although, as we shall presently note, the plan adopted did not accom- 
 plish what was intended by its authors. The capital required by the 
 company was advanced by ten "undertakers," half of whom were to 
 be of the adventurers in England and half to be planters residing in 
 the colony. The governor of the company was chairman of the board. 
 This Board of Undertakers, created in 1629, was to have the monopoly 
 of four kinds of trade: (i) The fur trade, (2) the making of salt, (3) the 
 transportation of passengers and commodities between England and 
 the colony, and (4) the maintenance of a magazine in the colony from 
 which goods were to be sold at fixed, or monopoly, rates of charges. 
 
 The attempt at monopoly failed, and private trading was the rule.' 
 /The fur trade was carried on by individuals or associations authorized 
 and controlled by the general court; the salt industry was apparently 
 not important enough to induce the undertakers to engage in it; and 
 the retail trade of the colony never centered in the magazine. Indeed, 
 there is no reference to the magazine after 1630. Winthrop's corre- 
 spondence refers to a payment made to the undertakers for the ships 
 in which the emigrants were brought to the colony in 1630, but to no 
 other transactions with the board. The colony had trade dealings 
 with the adventurers resident in England but not with the Board of 
 Undertakers.' 
 
 As stated by Osgood: 
 
 "By the close of 1630 the joint-stock, or purely commercial, element in the 
 Massachusetts enterprise had practically disappeared. It was decided that 
 henceforth the company should not directly engage in trade but should confine 
 itself to regulating it. With the removal of the patentees into the colony, 
 they began to devote themselves to the work of settlement and government. 
 Trade continued and expanded, but it was in private hands, subject to the 
 legislative and administrative control of the colonial government."' 
 
 Thus the early commerce of the Massachusetts Bay Colony diflfered 
 in organization and management from that of both the Virginia and 
 Plymouth colonies. In Virginia a trade monopoly was maintained 
 by the London Company until 1620; in the case of Plymouth the adven- 
 turers or proprietors held control of commerce until 1627, when the 
 colony organized itself into an association for the exclusive conduct of 
 its trade for a period of years; whereas in the Massachusetts Bay Colony 
 there was virtual freedom of trade after the first year. What was 
 true at Massachusetts Bay was by no means characteristic of all the 
 early settlements within New England. The numerous grants made 
 by the Plymouth Company, the New England Council, Charies I, and 
 their patentees to individuals and companies carried with them the 
 power to estabhsh private trade monopoHes. 
 
 •Osgood, American Colonies in the Seventeenth Century, I, ISO. 
 
28 History of Domestic and Foreign Commerce. 
 
 As a type of these early private companies having exclusive com- 
 mercial privileges may be cited the Laconia Company, promoted by 
 Gorges and Mason. It was organized in 1630 for tradmg and hshmg, 
 and two settlements were established within its grant on the Fisca- 
 taqua River. At one of the settlements saw mills were erected and 
 lumbering was carried on. Land was cleared to raise food; there was 
 some stock raising and some fishing, and there was some potash made. 
 The beaver trade was the most important industry. Ships operated 
 by the company sailed back and forth between England and the settle- 
 ments to bring out supplies and to take back the marketable products. 
 The loss of a vessel in 1632 bankrupted the company and a year later 
 the members of the company dissolved business relations and "the 
 land and other property of the patentees was divided." 
 
 The experiment of the Laconia Company was an economic enter- 
 prise on a small scale, similar to that undertaken in a larger way by 
 the London Company in Virginia. Fortunately for posterity, the 
 men who supported the Virginia company changed their primarily 
 economic project with great personal sacrifice into one whose chief aim 
 became the colonization of a part of the New World and the develop- 
 ment therein of British institutions. 
 
 NEW NETHERLAND AND ITS TRADE. 
 
 The commerce of New Netherland during the fifty years of the 
 control of that colony by the Dutch was for much of the period monop- 
 olized by chartered companies. Shortly after the discovery of the 
 Hudson River in 1609, individual trading expeditions to that valley 
 were sent out from Holland, and by the autumn of 1614 it had become 
 promising enough to cause certain merchants to unite in the "Amster- 
 dam Company," which was granted a charter that gave it an exclusive 
 monopoly, for four years, of the trade of New Netherland, a territory 
 bounded, south and north, by the fortieth and forty-fifth parallels. 
 This company did not attempt the settlement of the country, but 
 merely maintained posts for carrying on the fur trade which centered 
 at, the lower end of Manhattan Island and at the present site of Albany. 
 -'In 1621, three years after the end of the period for which the Amster- 
 dam Company was chartered, the Dutch West India Company came 
 into existence under the official title of "The United Company of 
 the United Netherlands,"^ and received for a period of twenty-four 
 years a monopoly of the government and trade of Africa and both sides 
 of the American continents. It was authorized, and was expected, 
 to devote its energies and capital to "the acquisition of wealth through 
 the spoiling of the Spaniards,"^ as well as to the development of com- 
 
 ^Osgood, "The Colonial Corporation," in Pol. Sci. Quar., XI, 1896, pp. 264-268; Jameson, 
 William Usselinx. (Usselinx was the founder of the company.) Cheyney, European Back- 
 ground of American History, chap, viii (this summarizes the chief powers of the company). 
 
 ^The quotation is from Channing, History of the United States, I, 445. 
 
The Beginnings of American Commerce, 1600 to 1660. 29 
 
 merce. To aid in accomplishing these objects the company received 
 a state subsidy of 1,000,000 florins, the use of 16 government ships 
 and 4 yachts, and was given the exemption of tolls and license dues on 
 Its own ships. The company was required to provide at least as many 
 vessels of its own as it secured from the government, and whenever 
 practicable the ships were to return to the home port from which they 
 sailed. The Dutch West India Company sent out settlers to New 
 Amsterdam in 1623, but the persons thus taken out were employes of 
 the company rather than colonists in the usual meaning of the term at 
 the present time. The company monopolized the entire economic hfe 
 of the colony. The fur trade, which, during the early years, amounted 
 to 6o,oooi guilders annually, was the all-important business; ship-build- 
 ing was successfully carried onto some extent; mills were set up for saw- 
 ing logs, but there was little if any export of lumber. The ownership 
 not only of the land, but of the stock upon the farms was retained by 
 the company until 1629, when the-^atroon system of land-holding 
 was introduced. 
 
 The private holding of land in patroonships constituted the first 
 modification of the plan of complete monopolization of industry by 
 the company, and this change was made, because the returns from the 
 fur trade were not large enough to make it worth while for the company 
 to bear the entire expense of developing the colonial enterprise 
 Accordingly, the company provided that any member who should 
 withm four years send out fifty families at his own expense would be 
 granted a large tract of land (a patroonship) of his own selection 
 The purpose of the company was to create large landed estates— the 
 best of which would naturally be secured by the individual members 
 controlhng the company at the time the system was adopted— culti- 
 vated by the patroon's tenants, assisted by slaves. The company was 
 to sell the patroons such slaves as they might need to purchase; the 
 profitable fur trade with the Indians was to be carried on only by the 
 company and by those living within its reservation at Manhattan. The 
 trade and industries of the patroonships were most carefully restricted 
 and regulated with a view to perpetuating the company's commercial 
 monopoly, and to keeping the colony dependent upon the home country 
 for clothing and other supplies. 
 
 It is not surprising that the Dutch West India Company's dual 
 system of patroonships and exclusive trade monopoly did not result 
 in a rapid growth of New Netherland. It was found necessary to 
 modify the land system and to open the commerce to competition. 
 
 To increase the number of small holdings of land and thus to bring 
 about a greater cultivation of the soil, the company, in 1640, olFered 
 to grant patroonships of 200 acres each, the proprietor being required 
 to bring out from the home country five servants to till the ground. As 
 
 'Channing, History 0/ the United States, I, 447. 
 
30 History of Domestic and Foreign Commerce. 
 
 this plan did not have the full effect desired, the company tried the 
 experiment, ten years later, of aiding the tenants by renting them stock 
 and supplying them with tools; but the results of this modification of 
 the patroon system, although favorable, were relatively slight. There 
 were some exports of flour, oats, peas, and beans during Stuyvesant's 
 administration (1647-1664), but the agricultural development of New 
 Netherland was slow as compared with other colonies and continued 
 to lag until after the country had been conquered by the EngHsh and 
 settlements were made by immigrants who held the land as individual 
 freeholds, as they were held in New England, Pennsylvania, and else- 
 where. 
 
 The first inroad upon the company monopoly of the trade of New 
 Netherland was made in 1638, when the company was compelled to 
 grant to the merchants resident within the colony the right to import 
 and export goods in the ships belonging to the company. This trade 
 by private persons was subject to a duty of 10 per cent on imports, and 
 15 per cent on exports, and for three good reasons was most carefully 
 regulated by the government: (i) The revenues for the maintenance 
 of the government were derived from the commercial monopoly or 
 from the customs collected from private traders. Private traders must 
 be taxed, and smuggling must be prevented. (2) The opening of the 
 trade to private merchants stimulated immigration and men of various 
 nationalities made New Amsterdam their temporary abode, and the 
 commerce of the colony passed to a large extent into the hands of per- 
 sons who were practically foreigners and but slightly identified with 
 the colony. (3) The most important branch of trade was in furs, which 
 were secured from the Indians in exchange for trinkets, guns, powder, 
 and rum. The government, i. e., the company, could not safely per- 
 mit its relations with the Indians to be determined by the unrestrained 
 cupidity of private traders. Stringent regulation was necessary. 
 
 EARLY TRADE OF NEW JERSEY AND MARYLAND. 
 
 The commerce of the territory now included in New Jersey was not 
 important prior to 1660. The Dutch made settlements across the 
 Hudson from New Amsterdam as early as 1620, and regarded all the 
 country east of the Delaware as a part of New Netherland. The 
 Swedes, in 1638, made settlements on the east bank of the lower 
 Delaware and considered that region a part of New Sweden, until they 
 were dispossessed of their territory by Peter Stuyvesant in 1655. Thus 
 the country between the Hudson and the Delaware was from the first 
 divided by political and economic forces into two distinct sections; and 
 the trade of the northern or eastern part centered at New Amsterdam, 
 while the commerce of the southern or western portion was tributary 
 to the lower Delaware. 
 
 The Swedes settled on both the east and west banks of the Delaware 
 estuary, and New Sweden was held to include the region between the 
 
The Beginnings of American Commerce, 1600 to 1660. 3 1 
 
 Chesapeake and the lower Hudson. Professor C. M. Andrews sum- 
 tnanzes the industries and trade of that section by saying: 
 
 S Jlde.'fen!'^" ^T^^ i ^""nt-y between the Chesapeake and Hudson, the 
 The Swedes ' t ?•'"*' A 'u -'^ " fl«"ri«hing agricuhural and trading 1 fe 
 
 goats cattle 'and swin^ Tl,*^"^-f "'^'"'i "i!'^-^'^'' ^"^^ f^™«' ^^^ "i«ed 
 h,n]?',^if ' / • 1 u ^V J^^^. ^'^ ^ go"*^ business in tobacco (with Marv- 
 ffeeleS after S^ t' I'?*^'^"^)',^"^ continued their agricultural rXradSg 
 lite even after the subjection of the region by the Dutch."i 
 
 Maryland from the time of its colonization in the third decade to the 
 end of the seventeenth century was engaged largely in raising tobacco, 
 and, although it was less exclusively devoted to tobacco culture than 
 Virgima was, the early foreign trade of Maryland consisted mainly in 
 exporting tobacco to England to exchange for manufactures. The 
 other important trade of the colony consisted in selling food and horses 
 to the tobacco plantations of Virginia. 
 
 Inasmuch as the Carolinas were first settled in 1663, and Georgia 
 seventy years later, the commercial history of those three colonies 
 begins some time after the period covered by this chapter. 
 
 The foregoing discussion of the early commerce of the colonies has 
 been concerned with their trade with their home countries in Europe 
 It remains to speak briefly of the beginnings of intercolonial trade. 
 The main charactensdcs of that commerce can be depicted by reference 
 to the intercolonial commerce carried on from New England and from 
 ^'lrglnla, and to the commerce of those sections with the colonies in 
 the West Indies. 
 
 BEGINNINGS OF INTERCOLONIAL TRADE. 
 
 By 1640 the intercolonial exchanges had become regular. According 
 
 to Weeden, the trade of Massachusetts with New Amsterdam and 
 
 Virginia began as early as 163 1.2 "After 1640, Boston, Salem, Scituate, 
 
 Dorchester, Gloucester, Plymouth, Newport, New London, and New 
 
 Haven" built vessels and dispatched them "loaded with produce and 
 
 lumber, to adjacent colonies, Barbados and England."^ The vessels 
 
 were often sold with the cargoes. New England's earhest exports 
 
 were furs, to which fish were soon added. Then lumber, grain, cattle, 
 
 and butter were included, and the coastwise commerce of New England 
 
 which reached New Amsterdam in the early thirties was in a few years 
 
 carried on regularly with Virginia and the West Indies. The trade of 
 
 Massachusetts with the Dutch at the mouth of the Hudson became 
 
 large enough by 1642 to cause Massachusetts to enact legislation 
 
 regulating the currency of Dutch coin. "By 1643, the trade (of New 
 
 England) extended to Madeira, and soon after to Spain, and wine, iron, 
 
 and wool were (thereby) included among the imports."* 
 
 ^Colonial Self-Government, 319. ^Economic and Social History of New England, I, 124. 
 
 'Andrews, Colonial Self-Government, 331. 
 
 'Doyle. History of English Colonies in America, III, 28. 
 
32 History of Domestic and Foreig?i Commerce. 
 
 The West Indies trade of New England early became more important 
 than the commerce with the other continental colonies; indeed, it was 
 the commerce with the West Indies that enabled New England to 
 develop industrially and to expand her trade with Europe. The fish, 
 pipe-staves, lumber, grain, pork, and other food products were sent 
 to the tropical islands and there exchanged for cotton, tobacco, salt, 
 rum, wine, sugar, negroes, and also for the coin and bills of exchange 
 which New England needed to use in paying for the manufactures of old 
 England. From the very first intercourse of New England with the 
 West Indies, fish were marketed in the islands; and the early import- 
 ance of the lumber exports is indicated by the fact that in 1640 eleven 
 ships sailed from New England for the West Indies with cargoes of 
 lumber. 
 
 These details give an indication of the commercial relations of New 
 England with her sister colonies and with the West Indies. A brief 
 survey of the intercolonial trade of Virginia will add further definite- 
 ness to the picture of the trade of the colonies with each other. 
 
 The trade of Virginia with New England, which had become regular 
 by 1640, grew increasingly active thereafter, Virginia purchasing in 
 New England not only colonial products, but also " a large quantity of 
 suppUes which had originally come from Europe,"^ which the Vir- 
 ginians paid for by tobacco and by bills of exchange on England. 
 
 Commercial intercourse between Virginia and New Amsterdam and 
 of Virginia with Europe via the Dutch colony was encouraged by the 
 governors of New Netherland and by the Dutch West India Company. 
 The importance of this trade was such that the Dutch West India 
 Company was careful to maintain friendly commercial intercourse 
 between New Netherland and Virginia even during the war between 
 Holland and England from 1652 to 1655.^ Exports from Holland and 
 from New Amsterdam were taken to Virginia in Dutch ships which 
 loaded with Virginia tobacco and sailed directly to Holland. The 
 traffic from Virginia to New Amsterdam was light. Vessels north- 
 bound from the West Indies for New Netherland or New England 
 sometimes stopped at Virginia to exchange tropical products for the 
 tobacco and other exports of that colony. Thus the commerce of 
 Virginia with the northern colonies was closely connected with her 
 European and West Indian trade. 
 
 The most active intercolonial trade of Virginia was naturally with 
 Maryland, her neighbor on the north, with which she had easy com- 
 munication by way of Chesapeake Bay, the Potomac River, and the 
 other streams debouching into the bay. Bruce states that, "As early 
 as 1641 the records [of Maryland] show that its inhabitants purchased 
 many of their supplies in the older communities south of the Potomac, 
 and, on the other hand, that citizens [of Virginia] were obtaining goods 
 of different sorts from persons living in Maryland."^ 
 
 'Bruce, Economic Hisl. of Va. in the Seventeenth Century, II, 322. ^Ibid., 314. 
 
The Beginnings of American Commerce, 1600 to 1660. 33 
 
 Commerce between Virginia and the West Indies began in 1633. 
 The planters of Virginia, unlike the merchants of New England, were 
 not largely engaged in operating ships. The owners of the most exten- 
 sive plantations exported their tobacco in their own ships, but the 
 intercolonial. West Indian, and some of the European commerce of 
 Virginia was carried on in vessels owned outside of the colony, by the 
 shipping of Holland, England, and New England. As regards the 
 trade with the West Indies, it was carried on not only by means of the 
 vessels owned in Virginia, and plying back and forth between the home 
 ports and those of the tropical islands, but also by various traders that 
 brought up West Indian cargoes as mercantile ventures. "Many 
 ships," says Bruce, "from year to year arrived in Virginia with cargoes 
 of West Indian commodities, the owners of which depended on casual 
 purchasers for the disposal of their stock, these purchasers being sought 
 by passing from landing to landing in the principal rivers."^ 
 
 GENERAL SURVEY OF AMERICAN COMMERCE IN 1660. 
 
 The difficulties to be overcome in the settlement and colonization of 
 America were many, and the increase in population was comparatively 
 slow during the first fifty years after the founding of Jamestown. The 
 Englisli jrolgmesj New Eoglatid, Maryland, and Virginia, contained 
 from 75,000 to 80,000 white inhabitants and New Netherland's popula- 
 tion added 6,000 or 7,000^ more. The total commerce carried on by 
 these 80,000 or 85,000 people could not have been large in comparison 
 with the later figures of American trade; nevertheless the colonies scat- 
 tered along the seaboard from the Kennebec to the valley of the James 
 were so closely dependent upon maritime commerce that a large share 
 of their economic activity was devoted to trade. 
 
 The English colonies far outweighed the Dutch in importance, and 
 the major share of their total commerce was with England; although, 
 up to the passage of the British Acts of Trade in 1660, Holland not 
 only had the trade of New Netherland, but also secured a large, though 
 minor, portion of the tobacco exports of Maryland and Virginia. 
 
 The several colonies were not vitally dependent upon each other. 
 Their economic connections were mainly with Europe, and the inter- 
 colonial trade was relatively small in scope and volume. The exports 
 of all colonies being agricultural and forest products, and in the case of 
 New England those commodities and fish, the most natural markets 
 of the colonies as a whole were in Europe, and it was there also that they 
 could most advantageously secure the greater part of their manufac- 
 tures and other necessary supplies. New England, however, afforded 
 a partial exception to this general rule, in that she early found a large 
 and profitable market in the West Indies. 
 
 ^Economic Hist, of Va. in the Seventeenth Century, II, 327. 
 'Channing, History of the United States, I, 510. 
 
34 History of Domestic and Foreign Commerce. 
 
 The trade between New England and the West Indies developed 
 early, because it formed the natural complement to her commerce 
 with Europe. The exports of New England to the tropical islands, 
 lumber, fish, etc., exceeded in value the purchases she made in the 
 West Indies; whereas the supplies New England required from Eng- 
 land greatly outvalued the exports that could be marketed in the home 
 country. The bills of exchange which New England obtained from the 
 West Indian importers enabled her to settle her commercial indebted- 
 ness to England. The steady economic progress of New England was 
 made possible by the profitableness of her commerce with the West 
 Indies. 
 
 Virginia had a larger foreign trade than any of the New England 
 colonies had and it was of very different character. Unlike New 
 England, Virginia had only a minor interest in the West Indies. Her 
 chief staple, tobacco, had its sole outlet in the European markets, and 
 the progress of Virginia was conditioned almost entirely by her com- 
 merce with England and Holland. Up to 1661 the tobacco trade, and 
 hence the import trade, of Virginia was shared by Holland as well as 
 England; and the growing commerce of Holland with the British colo- 
 nies in America was the occasion, if not the cause, of the enactment 
 of the British Navigation Acts restricting the trade of the British 
 colonies to ships of the national flag. The commerce of Virginia was 
 larger than that of the other colonies, because she exported nearly all 
 of her staple articles of production, and manufactured or produced'but 
 few of the supplies needed on her plantations. She even imported a 
 part of her food supply and was more economically dependent upon 
 Europe as time went on, whereas New England tended to become com- 
 mercially autonomous. 
 
 The progress of the several colonies in industry and commerce was 
 in no small measure affected by political and social forces as well as 
 by economic or material causes. The advance of New Netherland 
 under the political and social institutions maintained by the Dutch 
 was slow, while the progress of New England with far less favoring 
 natural conditions was comparatively rapid. New England led all the 
 colonies industrially and commercially, because she had political free- 
 dom in the highest degree, and because her settlers were men inured 
 to struggle and were so fashioned in mind and heart as to 
 
 "... welcome each rebuff 
 Which turns earth's smoothness rough." 
 
CHAPTER III. 
 
 THE COMMERCIAL POLICY OF ENGLAND TOWARD THE AMERICAN 
 COLONIES: THE ACTS OF TRADE. 
 
 The mercantile theory, 35. Origin of the Navigation Acts, 37. The Navigation 
 and Trade Acts of 1651, 1660, and 1663, 39. The Administrative Acts of 1673 and 
 1696, 42. The Molasses Act of 1733, 42. British regulation of colonial manu- 
 factures, 44. English bounties, preferential duties, drawbacks, and other encour- 
 agements to colonial industries and trade, 46. The Grenville, Townshen d. an d , 
 North Acts, 1 764-1770, 48. Effects of the British commercial policy upon (flWrnal 
 industry, commerce, and manufactures, 49. The illegal trade of the colonists, 51. 
 Summary of the effects of the Acts of Trade, 52. 
 
 Before continuing with the history of the development of American 
 commerce after 1660, it will be well to consider the policy adopted 
 by England and the measures enacted by the several American colonies 
 for the promotion and regulation of commerce. The present chapter 
 will discusss the British Acts of Trade; the following one will sum- 
 marily review the commercial policy of the colonies. 
 
 THE MERCANTILE THEORY. 
 
 During the seventeenth century, and indeed from the fifteenth until 
 well into the nineteenth century, the mercantile theory of trade was 
 accepted without question by practically all Englishmen, and in fact by 
 Europe generally. The nation was by this theory regarded as a politi- 
 cal and economic unit. Each country's relations with all other coun- 
 tries were to be carefully regulated so that all international intercourse 
 might enhance national wealth and power. 
 
 Under the mercantile theory it was held that if trade were to be of 
 advantage to the country as a whole the following principles must be 
 observed : 
 
 (i) Trade must be so conducted that the money value of the com- 
 modities exported from the country exceeds the money cost of the 
 goods imported, so that there is a "favorable balance of trade" with 
 a steady flow of coin or bullion into the country. It was believed 
 that the military and naval strength of a country depended upon the 
 stock of ready money in the war chest or at least in the possession of 
 the people of the country. 
 
 (2) It seemed equally evident to the people of the times of Elizabeth 
 and Cromwell that certain kinds of trade were much more to be desired 
 than others, and that it was the business of the government to restrict 
 or prohibit some exchanges and to foster others. The imports ought 
 not to compete with, but ought to contribute to, the growth of home 
 industries; the exports should not include those articles needed at home 
 for consumption or use in production. 
 
 (3) Under the fully developed mercantile system, it was held that 
 the merchants of other countries should be permitted to engage in the 
 
 35 
 
36 History of Domestic and Foreign Commerce. 
 
 commerce of the home country and its colonies only to the extent that 
 the producers and traders of the home nation were unable or disin- 
 clined to carry on and develop industry and commerce. Each foreign 
 country ought to be permitted of right to engage in its own trade with 
 another country, but each nation might, if it choose, reserve to itself 
 all the commerce between the different sections under its flag, and 
 might refuse to open its trade with a foreign country to the merchants 
 and ships of a third nation. These restrictions of trade were made to 
 promote the industries, increase the shipping, and strengthen the naval 
 power of the country. 
 
 (4) The commerce of a country ought, as far as possible, to be re- 
 served to the ships of the national flag, owned and manned by the people 
 of the country. This policy was believed to be wise, both economically 
 and politically. The maritime commerce and the merchant marine 
 ought to contribute to the naval power of the country. Even if for- 
 eigners were able to handle the maritime trade more cheaply, they ought 
 not to be allowed to do so; the naval power should be strengthened, 
 even though a temporary economic sacrifice were necessary. 
 
 (5) The reservation of the trade of the colonies to the home mer- 
 chants and to the national and colonial shipping seemed most natural. 
 The colonies were regarded as plantations, established and fostered to 
 provide the people of the parent country with a vent for their manu- 
 factures and with new and controllable sources from which to secure 
 the foods and materials needed to supplement the supplies required 
 by the mother country; and the colonists were encouraged, sometimes 
 with bounties, to produce the imports required by the parent country. 
 
 The policy of England was to increase and perpetuate the economic 
 dependence of the colonies upon the mother country. The plantations 
 were to be supplied with all their manufactures from Great Britain, 
 and the home country was to be, with few exceptions, the sole market of 
 the productions of the plantations. England was to be the " staple " of 
 the trade of the colonies. As Malachy Postlethwayt, the author of the 
 voluminous Dictionary of Commerce, stated in a volume entitled Britain's 
 Commercial Interest Explained (vol. I, pp. 107-108), pubhshed in 1747: 
 
 " Colonies ought never to forget what they owe to their mother country in 
 return for the prosperity and riches they enjoy. Their gratitude in that 
 respect, and the duty they owe, indispensably oblige them to be immediately 
 dependant on their original parent, and to make their interest subservient 
 thereunto. The eflPect of that interest, and of that dependency will be, to 
 procure the mother: (i) a greater consumption of productions of her lands; 
 (2) occupation for a greater number of the manufacturers, artizans, fisher- 
 men, and seamen; (3) a greater quantity of such commodities as she wants; 
 (4) a greater superfluity wherewith to supply other people. 
 
 "From the end of the establishment of colonies, result two kinds of prohibi- 
 tions. First, it is a law founded on the very nature of colonies, that they ought 
 to have no culture or arts, wherein to rival the arts and culture of their parent 
 country. For which reason, a colony, incapable of producing any other com- 
 
Commercial Policy of England Toward the Colonies. 37 
 
 modities than those produced by its mother country, would be more dangerous 
 than useful; it would be proper to call home its inhabitants and give it up. 
 
 "Secondly, colonies can not in justice consume foreign commodities, with 
 an equivalent for which their mother country consents to supply them; nor 
 sell to foreigners, such of their own commodities as their mother country 
 consents to receive. Every infringement of these laws is a real, though too 
 common, robbery of the mother country's labourers, workmen and seamen, 
 in order to enrich the same classes of men belonging to rival nations, who will 
 sooner or later take advantage of it against those very colonies .... 
 
 " From these principles it follows, that colonies are designed for culture only, 
 and that the navigation occasioned by that culture belongs to the seamen of 
 the mother country." 
 
 Such was the "mercantile doctrine" as regards the desirable economic 
 relation of colonies to the parent country. "The only use and advan- 
 tage of the American colonies, or the West India Islands," said Lord 
 Sheffield, " (is) the monopoly of their consumption, and the carriage of 
 their produce; for that object alone we could be tempted to support 
 the vast expense of their maintenance and protection."^ 
 
 The establishment of transoceanic colonies at the opening of the 
 seventeenth century gave a new and wider significance to the mercan- 
 tile theory. Up to that time the motive back of the doctrine had been 
 national, the aim and ideal now became both national and imperialistic, 
 and as England was the leading and most successful country in planting 
 permanent colonies of her own subjects, her navigation laws and acts 
 of trade express the mercantile theory in its clearest and most logical 
 form. 
 
 The commercial policy of England during the seventeenth and 
 eighteenth centuries has been so fully and ably discussed by Mr. 
 George L. Beer,* and the Acts of Trade by which that policy was 
 carried out have been so clearly analyzed by Professor Herbert L. 
 Osgood,^ that it will be necessary, in this history of American commerce, 
 only briefly to summarize the main features of that legislation, and to 
 point out its principal effects upon the trade and industries of the 
 British colonies on the continent of America. 
 
 ORIGIN OF THE NAVIGATION ACTS. 
 
 Some of the principles of the mercantile legislation of England ante- 
 dated by many years the settlement of America. An act passed in 
 i^Si, when Richard II was King, provided "that, to increase the navy 
 of England, no goods or merchandises shall be either exported or 
 imported, but only in ships belonging to the King's subjects.* The 
 
 ^Observations on the Commerce of the American States, 162 
 
 Law, 
 
 the. 
 
 2 vols. ,,, , 
 
 'American Colonies in the Seventeenth Century, III, chap. vii. 
 
 'Chalmers, Political Annals, I, 257. 
 
38 History of Domestic and Foreign Commerce. 
 
 patent that Henry VII granted to the Cabots, near the close of the 
 fifteenth century, stipulated that the commerce resultmg from their 
 discoveries must be with England. These and similar rules concerning 
 trade were probably not enforced to much extent and they probably 
 had comparatively slight effect; but the requirements which Richard 
 and Henry imposed illustrate the theory held at that time by the 
 people of England regarding the governmental control of maritime 
 commerce. 
 
 The principles embodied in the Navigation and Trade Acts of 1650, 
 1651, and 1660, and of later dates, had certain immediate precedents in 
 the provisions of the charters granted to the London and Plymouth 
 Companies, in the various royal patents bestowed by the Charleses, 
 and in the early regulations concerning the tobacco trade. The com- 
 panies that made the first settlements in America were given the exclu- 
 sive monopoly of the trade with their colonies, which meant that the 
 commerce as it developed was to be with England. The purpose of 
 the Crown to reserve to England the future commerce with America 
 was well shown in the patent granted by Charles I to Berkeley in 1639, 
 by which the patentee was "to oblige the masters of vessels, freighted 
 with productions of the colony, to give bond before their departure 
 to bring same into England .... and to forbid all trade with 
 foreign vessels, except upon necessity."^ 
 
 The first valuable import from the American settlements was 
 tobacco, and as there was a strong demand for this in the Netherlands 
 and elsewhere on the continent, England had much difficulty in monop- 
 olizing the market. Partly because the use of tobacco was thought to 
 be undesirable but more for the purpose of deriving a revenue from the 
 tobacco trade, the English government, in 1619, prohibited the growing 
 of tobacco in England for sale; and the next year a monopoly of the 
 right of importing tobacco into England and collecting the duties 
 thereon was granted to two men for a year for £10,000. The London 
 Company then arranged to dispose of the Virginia tobacco in the 
 Netherlands, but in 1621, despite the pleas of the company for the 
 privilege of freedom of trade, the Privy Council forbade the export of 
 any product of Virginia to a foreign country until the commodities 
 had been landed in England and had paid the English duties. This 
 order was repeated from time to time, and the policy of the government 
 did not change when the London Company was dissolved in 1624. 
 However, as the quantity of tobacco grown in Virginia rose and the 
 price fell, the incentive to evade the orders of the home government 
 became so strong that not a little trade was carried on directly with the 
 Netherlands, and indirectly by way of the Dutch merchants at New 
 Amsterdam. 
 
 'Chalmers, Political Annals, I, 120. 
 
Commercial Policy of England Toward the Colonies. 39 
 
 During the stormy years of the Civil War preceding the period of 
 the Protectorate in England there was no eflFort made to prevent the 
 colonists from trading with the Dutch; hence it was that when order 
 was established by the strong rule of Cromwell, a large share of the 
 trade of the British colonies was handled by Dutch merchants and 
 carried by Dutch ships. This was irritating to the English merchants; 
 and when, in 1650, the Rump Parliament passed the act to compel 
 rebellious Virginia, whose sympathies were with the Loyalists, to 
 accept the authority of Parliament, the act included a clause (inserted 
 as a war measure, it is true) prohibiting the ships of all foreign nations 
 from participating in the trade of the English colonies, except under 
 license from ParHament or the Council of State. The act was in 
 general terms and included all countries, but was aimed at the Dutch. 
 It was a temporary war measure hastily enacted, but it was superseded 
 the following year by a carefully prepared navigation act. 
 
 THE NAVIGATION AND TRADE ACTS. 
 
 The Navigation Act of 1651 was enacted to exclude foreign ships 
 from carrying the commerce between England and her colonies, and 
 to require all foreigners to employ their own or British ships in shipping 
 exports to England or its dominions. The act applied solely to navi- 
 gation or the carrying of traffic and was intended primarily to cripple 
 the Dutch; it did not give Englishmen a monopoly of EngHsh and 
 colonial trade. Its chief provisions were : 
 
 1. That goods grown or manufactured in Asia, Africa, or America could be 
 brought into England or its dominions only in ships of which the proprietor, 
 master, and the majority of the mariners were English. 
 
 2. That goods grown or manufactured in Europe could be imported into 
 England or its dominions only in English ships or vessels belonging to the 
 country where the goods were produced. 
 
 3. That goods of foreign growth or manufacture could be brought into 
 England only from the place of production or from "those ports where alone 
 the goods can be shipped or whence they are usually first shipped."' 
 
 The act contained certain minor exceptions to its provisions. The 
 forfeiture of cargo and vessel was the penalty for violation of the law. 
 The extent to which the law was enforced and its effect on British 
 shipping will be considered below. One consequence of the law was 
 immediate. The act was intended to cripple the Netherlands, and 
 it succeeded. War with that country followed the succeeding year, 
 and the great naval struggle between England and Holland began— 
 a conflict by which England, before the close of the seventeenth cen- 
 tury, came to be the leading maritime country of Europe. 
 
 The act of 1651 appHed only to shipping, or the ocean carrymg 
 business; the next and the most i mportant piece of commercial legis- 
 
 'Beer, Commercial Policy of England, 31. 
 
40 History of Domestic and Foreign Commerce. 
 
 lation, that of 1660, related to ship-building, to navigation, and to 
 trade. Its provisions regarding the construction and ownership of the 
 ships employed in the British colonial commerce and m the import 
 trade of England were: 
 
 1. That goods could be imported into or exported from the British planta- 
 tions in Asia, Africa, or America only in vessels owned and built by the 
 people of the realm (England, Wales, Berwick on Tweed), Ireland, and the. 
 English plantations. The master of the ship and three-fourths ot the crew 
 
 must be English.* ^ . . . r • a • \a 
 
 2. That the productions or manufactures of Asia, Africa, or America could 
 be imported into the realm, Ireland, Jersey, and Guernsey, only in vessels 
 built, owned, and operated as described above. 
 
 3. That articles of foreign production could be imported into the realm, 
 Ireland, Jersey, and Guernsey, only directly from the countries where they 
 were produced or from the usual places of shipment. 
 
 The act of 1660 so regulated the colonial trade as to give English" 
 merchants a great advantage over those of the Netherlands and other 
 foreign countries. It provided that no alien should be a merchant or 
 factor in the British colonies, and it enumerated seven colonial prod- 
 ucts (sugar, tobacco, raw cotton, ginger, indigo, and fustic and other 
 dye woods) that could not be shipped from any plantation to any 
 country or place except to another plantation or to the English realm. 
 This Hst of enumerated articles was somewhat lengthened in 1706 and 
 1722, molasses, rice, and naval stores being added in 1706; copper, 
 beaver, and other skins, in 1722. 
 
 In 1764, as one feature of Grenville's measures for taxing the Ameri- 
 can colonies, numerous additions were made to the list of enumerated 
 articles, coflFee, pimento, cocoanuts, whalefins, raw silk, hides and 
 skins, pot and pearl ashes, iron, and lumber. Two years later, to 
 prevent the colonists from buying manufactures from the continent 
 of Europe, the final and drastic step was taken of requiring the non- 
 enumerated (as well as the enumerated ones) to be shipped to England, 
 or Ireland, or to some country south of Cape Finisterre. 
 
 Until after the end of the seventeenth century tobacco was the only 
 enumerated commodity included in the export trade of the continental 
 American colonies. Accordingly, the monopolization by the mother 
 country of the market for the exported enumerated articles did not 
 immediately affect the trade of the colonies north of Maryland. The 
 grain, fish, naval stores, furs, etc., exported by those thriving colonies 
 had an unrestricted market until the eighteenth century, when the 
 naval stores, copper, and furs were enumerated. Moreover, when 
 
 'The word "English" as used in this law was intended to include the people of the colonies as 
 well as those of England. The act of 1662 (14 Car. II, c. 11, sec. S) removed all doubt on this 
 question by stipulating that "Whereas it is required by the said Act (of 1660) that in sundry cases 
 the Master and three-fourths of the Mariners are to be English, it is to be understood that any 
 of His Majesty's Subjects of England, Ireland, and His Plantations are to be accounted EngUsh 
 and no others." 
 
 ^ 
 
Commercial Policy of England Toward the Colonies. 41 
 
 naval stores were enumerated they were granted an export bounty to 
 encourage their shipment to England. 
 
 To prevent the enumerated articles from being shipped direct from 
 the colonies to foreign countries the act of 1660 provided that the 
 master of a ship must, before saiUng from a colonial port with any of 
 the enumerated commodities on board, give a bond, with one surety — 
 the bond being £1,000 for ships of less than 100 tons burden, and £2,000 
 if of greater burden — that the goods would be landed in England, 
 Ireland, Wales, or Berwick. No restrictions were placed at this time 
 upon the intercolonial trade. 
 
 To supplement the trade regulation provided for in the act of 1660 
 the statute of ^^3. was enacted. The administrative features of the 
 act of 1660 were strengthened by rnrtrp fji-ringpni- juioxisjons regardi ng 
 t he filing of the bond to landjtlie g oods in th e^xealm. aiid-tlie-d«Gla*ation 
 of Jthfi-El3£?_of construction and of the ownership of the vessel. Dis- 
 obedience of the law by the merchant or master was punishable by for- 
 feiture of vessel and cargo. If the governor of a colony failed to enforce 
 the act he was subject to removal and to a fine of £1,000. The English 
 customs officers were, likewise, required under heavy penalties to enforce 
 the law. The law stipulated that the productions of Europe could be 
 exported to the British colonies only when laden and shipped in Eng- 
 land, Wales, or Berwick on Tweed, and that the ships used to export 
 the goods to the colonies must be built, owned, and manned by British 
 subjects according to the act of 1660. An exception was made of salt, 
 which might be sent from any European port direct to New England.^ 
 Wines might be shipped directly from Madeira and the Azores. The 
 act of 1663 was intended to compel the colonists to buy rfll their imports 
 from the merchants of England aijd Wales. 
 
 The law was not, as -we shall presently see, capable of complete 
 enforcement; but had it been strictly executed the influence upon the 
 American colonies could hardly have greatly modified the course of the 
 colonial import trade, because England was the chief producer of the 
 manufactures desired by the American colonist. Moreover, the small 
 quantities of continental wares purchased by the colonists would prob- 
 ably have been secured mainly at London — the chief trade center of 
 Europe where most of the imports for America were obtained — instead 
 of being bought directly from the continental exporters. 
 
 It will have been noted that the acts of 165 1 and 1660 did not include 
 Scotland, which until 1707 had its separate government. Until 1707, 
 the people of England, Wales, Berwick on Tweed, Ireland, and the 
 colonists were English according to the Acts of Trade, but the Scotch- 
 men were not. The exclusion of Scotland from the direct trade with 
 the colonies was objected to both by the merchants of Scotland and 
 by the sugar planters of the Barbad os, but without avail. There were 
 
 'Pennsylvania got the same privilege by 13 Geo.I, chap. 5; and New York by 3 Geo. II. chap. 12. 
 
42 History of Domestic and Foreign Commerce. 
 
 a few instances of Scotch ships being Hcensed to engage in the colonial 
 trade, but Scotland was treated as a foreign country until the Act of 
 Union of 1707. 
 
 The act of 1660 had imposed no restraints upon the shipment ot 
 commodities from one colony to another. The Virginia and Maryland 
 planters took advantage of this to engage in an indirect exporf of 
 tobacco to the Netherlands, by shipping the tobacco to New Amster- 
 dam (until New Netherland was taken over by the English) and to 
 New England, whence the tobacco could readily be taken direct to the 
 Continent. The law was also more directly violated by transferring 
 the tobacco from colonial to Dutch ships at sea. The colonial vessels 
 that took the tobacco to the Continent would not care to return to 
 America empty, nor would they be safe in seeking cargo in England; 
 accordingly there were strong reasons for taking Dutch and other 
 continental goods back for sale in the colonies. This illegal trading 
 was carried on more or less regularly; but, as will be pointed out later, 
 it probably did not constitute a large share of the total trade of the 
 colonies. 
 
 To make the acts of 1660 and 1663 effective a law was enacted in 
 1673 providing that every vessel loading outbound from the colonies 
 with enumerated articles, either must give a bond that those commodi- 
 ties would be landed in England, Wales, or Berwick (Ireland was not 
 included), or must pay specific export duties. In other words, the 
 intercolonial trade in the enumerated commodities must be carried on 
 by way of England or be subject to export duties — at least this was 
 the probable intention of Parhament. The ambiguous phraseology 
 used gave a chance for diverse interpretations of its meaning. The 
 Commissioners of the Customs in London were authorized to enforce 
 this act, and they were empowered to appoint collectors of customs 
 resident in the colonies to supervise not only the collection of the 
 duties, but the granting of bonds and also the registry of vessels as 
 required in the acts of 1660 and 1663. The London Commissioners 
 appointed five collectors, one for each of the colonies of Virginia, 
 Maryland, the Carolinas, New York, and Massachusetts. 
 
 Administrative problems were not solved by the act of 1673, and 
 evasions of the law continued. Neither the Royal Governor of Vir- 
 ginia nor the colonial authorities of New England were disposed to 
 enforce laws enacted to give the English merchants a monopoly of the 
 over-sea and intercolonial trade in the "enumerated" articles of 
 colonial export, and make England the exclusive market, or "staple," 
 from which colonial imports might be obtained. In 1676, twenty-eight 
 English merchants united in a formal complaint, and shortly thereafter 
 the mercers and silk weavers of London made a protest, both alleging 
 that New England had taken the place of England as the mart through 
 which much of the tobacco exports and the imports of the several colo- 
 
Commercial Policy of England Toward the Colonies. 43 
 
 nies were being handled. It seems certain that the colonists were dis- 
 posed to evade paying the export duties on enumerated articles shipped 
 to a colonial port. If they paid the duty, they then felt that the com- 
 modities might rightfully be shipped from the intermediate colonial 
 port direct to any foreign country. 
 
 An investigation of the working of the act of 1673, made by the Lords 
 of Trade of the Privy Council, convinced them that the statute was 
 ambiguous as regards the payment of duties, and the attorney-general 
 was asked for an interpretation of the law. He interpreted the statute 
 to require that in the case of the shipment of enumerated articles 
 to another colony duties must be paid and bond also given that the 
 goods were to be delivered either in England or in an English plantation. 
 This meaning of the act of 1673 was adopted by the English Govern- 
 ment and was written into the statute of 1696. 
 
 The act nf . 1696 was-an^dministrative measure establishing^ machin- 
 ery for the stri cter enforcement of the previous acts, not only by means 
 of executive oSic&rTbut also through the aid of admiralty courts estab- 
 lished for the purpose. During the reigns of William and Mary and of 
 Queen Anne and the early years of George I attempts were made to 
 give as much validity as possible to the act of 1696; but during the 
 long period of Walpole's premiership, preceding the Seven Years' 
 War, there was little done to execute the trade laws. Walpole placed 
 the administration of the colonies in charge of the Duke of Newcastle, 
 who treated the colonies with "salutary neglect." 
 
 The most drastic of British Acts of Trade was the Molasses Act of 
 173 3> which "for the better securing and encouraging the trade of his 
 Majesty's sugar colonies in America" placed duties so high as to be 
 prohibitive of trade upon the rum, molasses, and sugar imported into 
 the British colonies from the French, Dutch, Spanish, or Danish West 
 Indies. The New England and middle colonies had found a large 
 market in these non-British West Indian Islands for fish, flour, biscuits, 
 lumber, cattle, and horses. These commodities were exchanged for 
 sugar, which could be bought more cheaply in these foreign than in the 
 British islands, and for molasses, of which the British islands could 
 furnish only an inadequate supply. In addition to selling their own 
 products the French and Dutch colonists also supplied the traders from 
 New England, New York, and Pennsylvania with some manufactures 
 from continental Europe. 
 
 The only possible course for the American colonists to follow was to 
 ignore the act of 1733. The corn laws of England, the small market 
 there for fish, and the fact that the importation of salted provisions was 
 prohibited by England compelled the northern and middle American 
 colonies to engage extensively in the West Indian trade to secure the 
 coin, the bills of exchange, and the commodities with which to pay for 
 the manufactures and other suppHes they were obliged to have from 
 
44 History of Domestic and Foreign Commerce. 
 
 England. The American colonies could not have supplied themselves 
 with these manufactures by domestic industry even had the English 
 Acts of Trade permitted them to engage freely in manufacturing, 
 instead of prohibiting, as they did, most manufacturing in the colonies 
 except for strictly local markets. 
 
 The Molasses Act was an economic and political blunder on the part 
 of England. It was intended to aid the declining sugar industry of the 
 British West Indies, but its purpose could not have been accomplished 
 without destroying the prosperity of the far more important conti- 
 nental colonies. It was a political mistake to pass a law that neces- 
 sarily made law-breakers of all the American colonists; it would have 
 been an even greater mistake to have attempted to enforce the act; 
 the attempt to do this after the French and Indian War was one of 
 the causes of the Revolution. 
 
 Complementary to the legislation, just summarized, enacted to 
 regulate the trade of Great Britain with her colonies and of the colonies 
 with each other, were the laws granting bounties and drawbacks to 
 increase the trade in certain commodities, and the acts restricting or 
 prohibiting certain manufactures in the colonies. 
 
 BRITISH REGULATION OF COLONIAL MANUFACTURES. 
 
 That the colonists should have engaged as early as the end of the 
 seventeenth century in manufacturing to such an extent as to cause 
 England to enact prohibitory legislation is to be explained mainly by 
 the laws enacted during the reign of Charles II, placing heavy duties 
 on grain imported into England, prohibiting absolutely the importa- 
 tion of salted provisions, and levying heavier duties on whale oil and 
 blubber when brought to England in colonial than when imported in 
 English ships. These laws prevented the northern colonies from mar- 
 keting profitably, if at all, the surplus products of agriculture and the 
 fisheries in exchange for British manufactures. 
 
 The tobacco from Maryland and Virginia found a welcome market 
 in England, as did the other productions of the other southern colonies. 
 The inclusion of tobacco, and later rice, among the enumerated articles 
 somewhat limited, but did not seriously affect the development of the 
 southern colonies. Those colonies could readily exchange their staple 
 exports for the manufactures of England, and the laws of England 
 restricting colonial manufactures had but slight influence in the agri- 
 cultural plantations south of Pennsylvania. 
 
 The economic situation in the northern colonies was different. 
 While their natural industries were those of agriculture and the fish- 
 eries, their population was qualified by temperament and antecedent 
 training for engaging in manufacturing. The rich stores of timber for 
 masts and lumber encouraged ship-building, the raising of sheep for 
 wool was easy, and there were at least fair supplies of iron ore. With 
 
" Commercial Policy of England Toward the Colonies. 45 
 
 these social and economic conditions prevailing within the northern 
 colonies, and with the European market for their agricultural and ma- 
 rine products restricted, they would have engaged in manufacturing to 
 the extent that their limited capital wo uld h ave permitted haff they not 
 been pre vented by tKe"laws^ of J^jxIJaiae-Ot. "Had there Been no restric- 
 tionTpTacecT'By England upon the domestic industries or foreign trade 
 of the American colonies, they would have devoted themselves chiefly 
 to the extractive industries, because their available capital could, with 
 few exceptions, have thus been more profitably employed than in manu- 
 factures; but had the poHcy of laissez faire been followed by England 
 the northern colonies would have gradually developed a limited number 
 of manufactures. 
 
 lli ere were three_ igipflttantJaazsL passed, to restrigtrnanufactures. 
 The first, enacted in 1699, provided that the manufactures of wool, 
 yarn, or woolen cloth in the English plantations were not to be sold 
 outside of the place where they were manufactured,^ i. e., the goods 
 were not to be exported abroad, nor sent outside of the colony. The 
 making of woolen yarns and fabrics in the colonies was a domestic 
 industry carried on chiefly during the winter months when outside work 
 was not possible. 
 
 The second kind of manufactures that was restricted by British 
 legislation was hat-making. Beaver skins being readily and cheaply 
 obtained from the Indians, the manufacture of beaver hats became an 
 industry of minor importance in New England, New York, and Penn- 
 sylvania, and some hats were exported to the West Indies, Spain, and 
 Portugal. This alarmed the Company of Feltmakers of England, and 
 in 173 1 Parliament was successfully petitioned by the company to 
 prohibit the exportation, after 1732, of hats from the colonies to 
 England, to a foreign country, or from one colony to another. Parlia- 
 ment further regulated the industry by requiring the hat-makers to 
 serve an apprenticeship of seven years and by prohibiting a master 
 from having more than two apprentices. The law was not strictly 
 enforced, and the colonists continued to supply themselves with at 
 least a part of their beaver hats. The coarser hats were imported from 
 England. 
 
 The most important industry of the colonies legislated against by 
 Great Britain was iron manufacturing. The making of pig and bar 
 iron was begun in a small way in the colonies at an early date — 1645 in 
 Massachusetts — but such an industry could not rapidly develop in an 
 unsettled country where the scanty supply of labor and capital was 
 most profitably employed in agriculture and the fisheries; hence it 
 was not until well into the eighteenth century that the iron manufac- 
 tures of the colonies became of such importance as to cause Pariiament 
 to consider the enactment of restrictive legislation. Virginia, Mary- 
 
 '10 and 11 William III. chap. 10, sec. xix. 
 
46 History of Domestic and Foreign Commerce. 
 
 land, and Pennsylvania began before 1730 to export pig iron in small 
 quantities. In New York and New England the pig iron from their own 
 furnaces was used at home, and bar and wrought iron were imported. 
 Indeed, nails, tools, and other iron manufactures were imported into 
 all the colonies. 
 
 As England was obliged to import iron in the eighteenth century, 
 there was a difference of opinion as to the wisdom of interfering with 
 the development of the industry in the colonies. It was conceded 
 by all that the colonists should be encouraged in making and exporting 
 pig iron; but the EngHsh iron interests were opposed to allowing the 
 colonists to work up their crude iron into manufactures. The iron 
 interests of England had their way only in part in the law which Parlia- 
 ment finally enacted in 1750. The act was a compromise measure that 
 (i) permitted bar iron to be imported free of duty at London, and 
 allowed pig iron to enter England at any port, (2) forbade the erection 
 in the colonies of any mill for rolling or slitting iron, or any plating 
 forge, and of any furnace for making steel. If such establishments 
 were constructed they were to be abated as nuisances. 
 
 The passage of this act was followed by some increase in the exports 
 of iron from the colonies to England, and in 1757, in response to numer- 
 ous petitions, ParHament passed a law permitting bar iron to be brought 
 into England, duty free, at any port, thus taking from London the 
 monopoly it had under the act of 1750. 
 
 ENGLISH BOUNTIES, PREFERENTIAL DUTIES, DRAWBACKS AND OTHER ENCOURAGE- 
 MENTS TO COLONIAL INDUSTRIES AND TRADE. 
 
 In order to construct and operate the great number of ships required 
 in British commerce. Great Britain needed large quantities of hemp, 
 masts, lumber, tar, pitch, turpentine, and rosin. With the excep- 
 tion of lumber. Great Britain had to depend entirely upon foreign 
 sources of supply, and most of the timber supply of England had been 
 exhausted by the eighteenth century. These naval stores were pur- 
 chased chiefly from Denmark, Norway, and Sweden, and as those 
 countries did not purchase large quantities of English exports, the 
 balance of trade was against England. To overcome this unfavorable 
 balance of trade and also to free herself from dependence upon foreign 
 countries for the materials necessary to maintain her navy, England 
 decided, in the early years of the war of the Spanish Succession (1706), 
 to grant bounties on naval stores exported from the colonies to England. 
 The bounty on hemp was £6 per ton, on masts £1 per ton, on tar £4, 
 on pitch £4, on rosin and turpentine £3 . The exportation of lumber 
 to England was encouraged somewhat later (1723) by placing timber of 
 all kinds from the colonies on the free list. These bounties were main- 
 tained throughout the colonial period, with the exception that the 
 amount of the bounty on tar, pitch, and turpentine was reduced in 
 the second year of the reign of George II. 
 
Commercial Policy of England Toward the Colonies. 47 
 
 The exports of lumber from the colonies to England were not very 
 large. Most of the trade remained with the Scandinavian countries, 
 which were able to compete successfully against the American colonies. 
 The results were different in the case of tar, pitch, turpentine, and rosin, 
 which were produced very cheaply in the southern American colonies 
 and were exported, particularly from the Carolinas, in such large quan- 
 tities that as early as 1719 England began to have a surplus of these 
 articles for reexportation. 
 
 The only other colonial product upon which Great Britain offered 
 a bounty was indigo, an article that was secured mainly from France 
 until after 1740, when the production of indigo was started in South 
 Carolina. The success of the indigo industry in the Carolinas caused 
 Parliament to pass an act in 1748 granting a bounty of 6d. per pound 
 on indigo imported into England from the British colonies in America. 
 
 Certain other bounties of minor importance and of slight conse- 
 quence were granted by English societies for fostering arts and manu- 
 factures, and several of the American colonies granted bounties to 
 stimulate the production of various kinds of commodities. The 
 bounties granted by the colonies will be discussed in the following 
 chapter. 
 
 To increase the trade in, and incidentally the production of, several 
 colonial commodities, England gave preferences in her import duties 
 to numerous colonial products. While the general rule was that 
 products from the colonies paid the same duties as commodities from 
 foreign countries, exceptions were made regarding a number of the 
 important colonial exports. Tobacco from America paid a lower duty 
 at the English ports than did Spanish tobacco. Pig and bar iron were 
 admitted duty free. Molasses paid no imposts after 1690. Whale 
 fins and train oil were charged lower duty when brought to England in 
 colonial vessels than when carried there by foreign ships. Indigo 
 from the British colonies enjoyed a preferential duty, and after the 
 beginning of the reign of George I it was exempted from all customs 
 charges. Raw silk from the colonies was admitted without duty in 
 1750, and in 1751 pearl and pot ashes were granted the same privilege. 
 
 The export duties of England were so arranged as to encourage 
 colonial productions in certain industries. Coal exported to the 
 colonies paid less duty than when sent to foreign countries. Tea 
 sent to the colonies was exempted from inland duties, and coffee grown 
 in British plantations and brought to England might be reexported 
 with the payment of lower duties than were placed upon coffee from 
 foreign countries. 
 
 It was the leading principle of the Brirish mercanrile system to 
 grant drawbacks in the case of the reexportation of imported com- 
 modities, the rule being to return to the exporter all but 2.5 per cent 
 of the value of the commodity. To increase the production of certain 
 
48 History of Domestic and Foreign Commerce. 
 
 colonial commodities exceptions were made to this general rule. The 
 drawback on colonial tobacco amounted to the entire duty. In the 
 case of hemp no drawback was allowed on the raw product when re- 
 exported to the colonies from England. The purpose of England was 
 to compel the colonies to grow more hemp. Iron and ironwares, like- 
 wise, were granted no drawback when exported to British plantations. 
 On the other hand, beaver skins were granted a drawback, but not so 
 large as that given to other commodities. 
 
 The general effects of the system of drawbacks were greater in stimu- 
 lating the export trade of England to the colonies than in increasing 
 the colonial exports to England. Linens, for instance, imported from 
 the Continent could be sold by British merchants in the colonies more 
 cheaply than could English and Irish linens; and this must have been 
 true, to a limited extent at least, of other articles of colonial import. 
 
 THE GRENVILLE, TOWNSHEND, AND NORTH ACTS, 1764-1770. 
 
 The foregoing survey of the British Acts of Trade includes the more 
 important laws enacted for the purpose of applying the principles of the 
 mercantile theory to the regulation of the trade and industries of the 
 colonies. Most of these laws, with the exception of the navigation 
 acts — ^those relating to shipping — ^were radically changed by the Gren- 
 ville-Townshend measures adopted from 1764 to 1767, when the unwise 
 and unsuccessful attempt was made to add parliamentary taxation to 
 imperial monopolization of the trade and industries of the colonies. 
 As Burke declared, this was "a new principle . . . with regard 
 to the Colonies, by which the scheme of a regular plantation parha- 
 mentary revenue was adopted. ... A revenue not substituted 
 in the place of, but superadded to, a monopoly; which monopoly 
 was enforced at the same time, with additional strictness, and the 
 enforcement put into military hands." 
 
 The Grenville-Townshend acts were fiscal rather than commercial 
 measures, and their enactment and attempted enforcement immediately 
 interrupted or discouraged the trade of the colonies. These laws are 
 to be regarded as the political measures that led to the American revolt 
 rather than as a part of the commercial policy of Great Britain; and 
 for this reason they require only brief mention in this connection. 
 
 Grenville's revenue act of 1764 — the so-called Sugar Act — reduced 
 the duties on colonial imports of foreign molasses, from prohibitory 
 rates to a revenue basis, forbade the importation of foreign rum, 
 retained the duty on foreign sugar, put duties on foreign indigo, coffee 
 when not bought in Great Britain, wines direct from Madeira, Spanish 
 and Portuguese wines from Great Britain, silks and other fabrics 
 from Great Britain. What was of even more consequence, machin- 
 ery for the enforcement of the law was set in motion. The list of 
 "enumerated" articles was increased as was stated above, and the 
 Stamp Act followed in 1765. 
 
Commercial Policy of England Toward the Colonies. 49 
 
 The opposition of the colonists to these laws was so strong that the 
 British merchants lost their trade; and in 1766 the Sugar Act and the 
 Stamp Act were repealed, and a law was passed imposing lower duties 
 on the imports into the colonies. The revenues thereby obtainable 
 did not seem to Parliament to be adequate, and in 1767 the Townshend 
 acts were adopted, placing duties on glass, paper, painters' colors, 
 red and white lead, and tea. Colonial opposition continued; th^ 
 non-importation agreements of the colonists cut down the exports 
 of goods from Great Britain; and in 1770 Parliament adopted Lord 
 North's measure repealing all the duties imposed by the acts of 1767, 
 except the tax on tea. The Boston "massacre" in 1770, the Boston 
 Tea Party in 1773, and other significant events in the colonies, failed 
 to convince the British ministry of their inability to administer unpop- 
 ular tax laws in America by means of military forces and admiralty 
 courts; and the colonies were allowed to enter upon their long and suc- 
 cessful revolutionary struggle. 
 
 The final results of the Grenville, Townshend, and North acts for 
 the taxation of the trade of the colonies were trade paralysis and politi- 
 cal revolution. These measures belong to the period of transition 
 from the colonial to the independent national existence of the British 
 settlements in America rather than to the period of the development of 
 the colonies under the guidance of the commercial legislation of the 
 mother country. In studying the commerical and industrial effects 
 of the British colonial policy attention may properly be confined to the 
 legislation that preceded 1764. 
 
 EFFECTS OF THE BRITISH COMMERCIAL POLICY UPON COLONIAL INDUSTRY. 
 COMMERCE, AND MANUFACTURES. 
 
 The laws for the restriction of the manufacture of woolen goods, hats, 
 and iron products were successful, but the effects could scarcely have 
 been important. The colonists could not have made woolens in com- 
 petition with England either for export to Europe or for the inter- 
 colonial trade; nor would the manufacture of hats, if unrestricted, have 
 had much development. The iron and steel industries were hampered; 
 but as the regulative law of Great Britain was not enacted until 1750, it 
 did not greatly affect the economic development of the colonies. The 
 colonies south of Pennsylvania would, in any event, have exported 
 their pig and bar iron, instead of working it up at home; New England 
 used all her domestic production of iron and imported more from Eng- 
 land. The iron industries of New York and New Jersey were not 
 important in colonial times. Pennsylvania had a comparatively 
 large output, but she exported but little crude iron, and regularly 
 imported wrought iron and steel. 
 
 Drawbacks and preferential duties granted by Great Britain were a 
 necessary part of the general system of giving British merchants a 
 monopoly of the colonial trade; they made it possible for the colonists 
 
50 History of Domestic and Foreign Commerce. 
 
 to sell more of their commodities in Great Britain than the British 
 required for their own consumption, and also permitted the colonists 
 to secure, by way of England, the manufactures of the continent of 
 Europe. The intention of the British statesmen was to make England 
 the emporium of the export and import trade of the colonies, and to 
 carry out that intention drawbacks and preferential duties were 
 -required. 
 
 The acts of 1651 and 1660 embodied the first important feature of 
 England's policy towards her colonies. These laws, it will be recalled, 
 had two distinct purposes: that of restricting the carriage of British 
 and American commerce to ships owned by the people of Great Britain 
 and the colonies, and that of securing to British merchants a monopoly 
 of the larger part of the colonial trade. 
 
 The Navigation Acts — ^the laws applying to the ownership and opera- 
 tion of ships — ^were of unquestionable benefit to the colonies. In the 
 New England and middle colonies the conditions were favorable to 
 the development of the ship-building industry. The nearby fisheries 
 and those off Newfoundland created a demand for ships and offered 
 strong inducements to the colonists to engage in seafaring pursuits; 
 the intercolonial and over-sea commerce of the colonies required the 
 use of a relatively large tonnage of shipping, and the result was that the 
 colonists north of Maryland engaged extensively in the building and 
 operation of ships. Restriction of the colonial trade to ships under the 
 British flag in no wise prevented the development of the colonies. 
 
 The Acts of 1660, 1663, 1673, and 1696, whereby Great Britain 
 granted British merchants a monopoly of the larger part of the colonial 
 trade, constituted the most significant feature of the commercial policy 
 of Great Britain toward her American colonies. The effects of these 
 laws were complex and it is difiicult to measure or even approximately 
 estimate the net results accomplished by the legislation. 
 
 In the first place it is somewhat difficult to determine the extent to 
 which the laws were actually enforced and in what measure they were 
 evaded. Postlethwayt,^ writing in 1747, states that the colonists 
 traded directly with Marseilles and Toulon, and that their ships 
 returned directly from those ports with French and other European 
 wares. He asserts that trade was also carried on with Holland, and he 
 dwells at length upon the well-established fact that the Molasses Act 
 of 1733 was practically disregarded. Lord Sheffield,^ writing in 1784, 
 stated : 
 
 "It is well known that from the first until some time after the yean 763, they 
 [the colonists] uniformly did evade them [the Acts of Trade] whenever they found 
 it to their interest to import the goods and manufactures of other countries 
 with whom they traded; and notwithstanding our custom house officers, 
 
 ^British Commercial Organization Explained, 344. 
 ^Observations on the Commerce of the American States, 248, 
 
Commercial Policy of England Toward the Colonies. 5 1 
 
 New England, New York, and Philadelphia carried on an almost open foreign 
 trade with Holland, Hamburgh, France, etc, bringing home East India goods, 
 sail cloth, Russia and German linens, wines, etc." 
 
 Weeden is also of the opinion that the Navigation Acts were largely 
 evaded. In his Economic and Social History of New England he cites 
 numerous instances to show the large extent of smuggling. 
 
 On the other hand, Professor W. J. Ashley^ takes the position that, 
 with the exception of the evasion of the Molasses Act of 1733, there 
 was a comparatively small amount of smuggling done. Professor 
 Ashley's reasoning is largely a priori and his argument is based upon the 
 fact that, as most of the colonial trade must inevitably have been with 
 the mother country, because that country was not only the best colonial 
 market but also the market best able to supply the American settle- 
 ments with the manufactures they required, there could not have 
 been a very strong incentive for the colonists to engage in illegal trade. 
 Mr. George L. Beer^ also takes a conservative position: 
 
 "In the main the colonies consumed English and not French manufactures; 
 fewgoodswereimported directly from the European continent. . . . Likewise, 
 in the main, the colonies sent the enumerated commodities to England. The 
 truth of this is clearly apparent when we consider that by far the greater 
 part of the rice and tobacco imported into England was reexported to other 
 countries. While, on the other hand, the attempt to aid the English West 
 Indies by the Molasses Act was a dismal failure, since it was contrary to all 
 economic forces." 
 
 While it is undoubtedly true that the earlier writers overestimated 
 the extent to which the American colonists engaged in illegal trading, 
 there can be no doubt that the Acts of Trade, other than the Molasses 
 Act, were more or less disregarded by many traders in the middle and 
 New England colonies. There was some smuggling done in the 
 southern colonies, but the inducement there was much less than in the 
 North and the illegal trade must have been relatively unimportant. 
 
 In considering the question of smuggling or illegal trade, three facts 
 should be borne in mind : First, that the colonists were Englishmen, 
 who, from time immemorial, had been accustomed to smuggling as a 
 regular practice. The illegal trade of the colonists probably only 
 exceeded the illegal trade carried on oflF the coasts of Great Britain to 
 the extent that it was possible to enforce the laws against smuggling 
 somewhat more successfully in Great Britain than in America. Another 
 fact to be remembered is that each of the colonies had laws for the regu- 
 lation of colonial and foreign trade, and that much of the illegal trading 
 was in violation of colonial laws as well as an evasion of the British 
 Acts of Trade. Those who complained against illegal trade did not 
 carefully discriminate between colonial and British legislation. 
 
 ^Surveys, Historic and Economic. 336-360. 
 
 ^Commercial Policy of England towards the American Colonies. 142. > 
 
52 History of Domestic and Foreign Commerce. 
 
 Illegal trading was more extensively carried on at certain periods 
 than at other times. During the war of the Spanish Succession, in the 
 early years of the eighteenth century, and also during the French and 
 Indian War, the violation of the Acts of Trade was notorious. The 
 same was true of the twenty years when Walpole was the dominant 
 factor in English politics, when he turned over the administration of 
 colonial affairs to the Duke of Newcastle, who treated the colonists 
 with "salutary neglect." 
 
 SUMMARY OF THE EFFECTS OF THE ACTS OF TRADE. 
 A survey of the general effects of the Acts of Trade shows that the 
 following generalizations are warranted : 
 
 1. The acts required most of the export and import trade of the 
 colonies with the continent of Europe to take the roundabout route via 
 England. This was not especially burdensome, however, because 
 England was practically on the route to the continent, and England 
 was the natural emporium for most of the colonial-continental 
 trade with the exception of rice. The southern colonies found the 
 necessity of sending their goods to England somewhat of a hindrance. 
 The continent provided the market for the larger share of the tobacco. 
 It would undoubtedly have been more profitable for the Maryland and 
 Virginia tobacco exporters and for the Carolina rice planters to have 
 been able to ship such of their exports as they desired, directly to the 
 Continent. 
 
 2. The customs duties paid to England in the case of goods destined 
 for the Continent were a tax on trade in spite of the drawbacks granted 
 by Great Britain. The laws that required the intercolonial trade to be 
 carried on via England, or, in the case of that carried on directly from 
 one colony to another, to pay an export duty equal to the British import 
 duties, was burdensome to the extent that the laws were enforced. At 
 times they were rather strictly enforced in the case of some colonies. 
 Even when the laws were not enforced they were, without doubt, a 
 deterrent to intercolonial trade. 
 
 3. The political effects of the Acts of Trade were quite as important 
 as their economic results. Great Britain's commercial policy towards 
 her colonies tended to emphasize any opposition of interest between 
 the home country and the plantations, instead of developing a feeling 
 that both the mother country and her dependencies had a common 
 economic welfare. The trade policy of England gradually undermined 
 the sentiment of loyalty on the part of the colonists. It was for this 
 reason, in part, that it was difficult for Great Britain to enforce the 
 Acts of Trade. 
 
 4. In endeavoring to enforce her commercial legislation in the 
 colonies, it was early discovered that the laws could not be made 
 effective in the chartered colonies. To strengthen her administrative 
 
Commercial Policy of England Toward the Colonies. 53 
 
 system, Great Britain took away the charters of the northern colonies 
 and made them royal provinces. This proved to be a poHtical mis- 
 step. In the long run, Great Britain was certain to fail in her attempt 
 to govern her subjects in America by royal governors. The political 
 revolution which was brought about in England in the nineteenth cen- 
 tury was worked out in America in the eighteenth century. The efforts 
 of Great Britain to strengthen her colonial administration by depriving 
 the colonies of self-government failed partly, because the British officers 
 in the colonies were under strong inducements, social and otherwise, to 
 side with the colonies and to permit the British laws to be disregarded. 
 Some royal governors and some customs-house officials were conscien- 
 tious in their efforts to enforce the laws, but many of these sided with 
 the colonists as the easier and more desirable course of action to follow. 
 Indeed, many of the royal governors, after endeavoring to administer 
 the laws, found that the obstacles to be overcome were insuperable, and 
 that it would be impossible for them to carry out their instructions. 
 
 5. In general. Great Britain's attempt to live up to the mercantile 
 system in her relations with her colonies was a failure both for political 
 and economic reasons. The enforcement of the Acts of Trade could 
 have been possible only with a much higher degree than had been 
 obtained of political and social unity between the home country and 
 the colonies. The wide separation of the colonies from the home coun- 
 try, not only in distance but in the time required for communication, 
 prevented the establishment of an administrative system effective 
 enough to give force to the mercantile policy. The colonies were so 
 far removed from the home country that they tended to develop an 
 autonomous economic life. The British Acts of Trade accentuated 
 the tendency towards autonomy. 
 
 In endeavoring to apply the mercantile system of legislation to her 
 commercial relations with her American colonies. Great Britain failed, 
 because she sought to treat the colonies as outlying parts of her realm. 
 As a matter of fact, the American settlements were not parts of the 
 British realm; they were colonies, and as such they could not be suc- 
 cessfully brought under mercantile legislation. The chief benefits to 
 be derived from the American colonies were commercial; but Great 
 Britain failed to realize that, in order to trade with her colonies largely 
 and successfully, they must be permitted to develop their resources 
 and industries in the fullest and freest manner. This is true of all 
 colonies at all times. The principle, however, was not understood by 
 Great Britain or any other country until some time after the beginning 
 of the nineteenth century. 
 
CHAPTER IV. 
 COMMERCIAL POLICY OF THE COLONIES. 
 
 Legislative power of colonies over commerce, 54. Authority exercised by Parlia- 
 ment, the Privy Council, and King, 55. Import duties of the colonies, 56. The four 
 purposes of import duties, 57. Export duties, 59. Bounties, 60. Inspection 
 laws, 62. Embargoes, 63. Tonnage duties, 63. Regulation and administration 
 of ports, 64. Summary of commercial legislation in the colonies, 65. 
 
 The commercial legislation enacted by the several colonies needs 
 to be considered in connection with the British Acts of Trade; both 
 conditioned the development of American commerce, and affected, at 
 least slightly, the progress of industry. Just as England in the seven- 
 teenth century, and Great Britain in the eighteenth, endeavored to 
 regulate the trade of the colonies so as to increase the wealth and add 
 to the power of the realm, so each American colony attempted to 
 promote its own interests by elaborate laws. To some extent, the 
 legislative enactments of the mother country and her American depen- 
 dencies were complementary, not only because they applied to the same 
 subjects, but also for the reason that they sometimes sought to accom- 
 plish the same results. 
 
 The trade acts of the colonies merit careful study. They reveal 
 much regarding the nature and importance of the commerce of the 
 several colonies; they throw light upon financial and industrial con- 
 ditions; and they illustrate some of the causes of the clash of British 
 and colonial interests. In legislating for the regulation and promotion 
 of their domestic industry and external trade, the colonies developed 
 the principle of self-government and achieved a far greater measure 
 of political autonomy than had been intended by crown or Parliament. 
 Neither the restored Stuarts nor the determined George III could 
 substitute centralized British authority in place of the ever-developing 
 colonial self-government. Indeed, it was in the efforts of the mother 
 country to regulate and tax the external trade of the colonies that its 
 administrative weaknesses were strikingly shown. The British laws 
 that interfered with trade were largely evaded by the colonies; and 
 when England attempted to enforce her statutes and administrative 
 requirements, a spirit of independence and revolt spread throughout 
 the colonies. 
 
 The legislative authority exercised by the colonies over commerce 
 was but slightly limited by King or Parliament. Theoretically, the 
 English colonists were settlers of regions belonging to the crown because 
 discovered by explorers bearing royal charters. When the King made 
 grants of American territory to corporations or proprietors he conferred 
 upon them general governmental control over their plantations and 
 settlements, subject to such regulative interference as the crown might 
 
 S4 
 
Commercial Policy of the Colonies. 55 
 
 deem necessary. In both corporate and proprietary colonies the actual 
 government soon came to be administered in large measure by the local 
 legislatures. Theoretically all the laws passed by the colonial legisla- 
 tures were subject to review by the Privy Council and to annulment by 
 royal veto; but, with the exception of the influence over colonial legis- 
 lation exercised by royal governors in those colonies where the governor 
 was appointed by the King, there was comparatively little control over 
 colonial legislation exercised by the King and Privy Council. 
 
 Parhament might have legislated to a large extent regarding colonial 
 matters, but, as a matter of fact, the acts of Parliament were confined 
 almost exclusively to the Acts of Trade regulating the commerce of 
 Great Britain and the external trade of the colonies. In the long 
 struggle to curb the power of the King but little effort was made by 
 Parhament to supplant the royal authority over the colonies. 
 
 The powers which from the beginning of the estabHshment of the 
 colonies were possessed by the Privy Council were three :^ (i) It was 
 the highest administrative board of the British Government concerned 
 with colonial affairs; (2) it acted, or might act, as a high court of appeal 
 for the determination of cases brought before it from the colonial courts; 
 (3) it had power, at least after the estabHshment of the royal colonies, 
 to grant or withhold its approval of the legislative acts of the colonies. 
 Prior to the restoration of the Stuarts the Privy Council Hmited 
 its functions mainly to administrative acts. The decisions of the colon- 
 ial courts were not reviewed, nor was it the practice to approve or veto 
 legislative enactments. The corporate colonies, such as Massachu- 
 setts, had practically complete autonomy. The proprietary colonies 
 did not have such full control over their local affairs, but in actual 
 practice the differences were not very great. While it was theoretically 
 possible for the King to control the proprietor and for the proprietors to 
 regulate both the executive and legislative actions of their colonies, the 
 actual interference of the King was but sHght. As Osgood says:^ "In 
 their relations with the King the proprietary provinces were nearly as 
 independent as were the corporate colonies." 
 
 When the Stuarts attempted to deprive the corporate colonies of 
 their charters and to increase the royal control of colonial affairs for 
 the purpose of developing a unified and systematic administration, 
 their effort was made ineffective by the English revolution of 1689; 
 and, although William and the Georges sought to make more effective 
 the royal power of veto over colonial legislation, to control the acts 
 of the colonies through the appointment of royal governors, and to 
 limit the colonial courts by subjecting their decisions to review by the 
 Privy Council, local government still made headway in the colonies. 
 During much of the time for three-quarters of a century following the 
 year 1689, Great Britain's attention was so taken up with the struggle 
 
 'Osgood, American Colonies in the Seventeenth Century, III, 16. ^Ibid., II, 440. 
 
S6 History of Domestic and Foreign Commerce. 
 
 with France and with her continental wars that only intermittent 
 efforts were made to extend and systematize her legislative authority 
 over the colonies and her administrative control of their affairs. The 
 consequence was that local self-government made such steady progress 
 that the colonies, by 1760, had come to regard themselves mainly as 
 self-governing bodies, related to Great Britain rather by ties of blood 
 and economic interest than by political subordination. 
 
 The laws in regard to commerce enacted by the several colonies 
 in the exercise of their practically unrestricted legislative power 
 covered a large variety of subjects and were so unsystematic as to 
 render classification and analysis especially difficult. This would 
 naturally be true regarding the legislation of thirteen colonies acting 
 not only independently, but, to some extent at least, with the intent 
 of nullifying the acts of each other. Economic conditions in the 
 several colonies differed largely and commercial legislation naturally 
 reflected these variations. Moreover, the commercial legislation of 
 most of the colonies was enacted to raise revenue; and as it was the 
 practice to impose special taxes to meet particular and temporary 
 needs, the laws were enacted without much reference to a well-defined 
 policy. Again, there was the ever-present struggle between the 
 colonial legislature and the royal governors, whose authority the 
 colonists were always striving to restrict; and, as the most effective 
 means of controlling the action of the governors was by laws regarding 
 revenue, the commercial legislation was in some measure shaped by 
 the changing phases of the controversies between the governors and 
 the representatives of the people. 
 
 In discussing the commercial legislation of the colonies the laws 
 may be treated under the following heads: Import duties, export 
 duties, bounties, inspection laws, embargoes, tonnage duties, and port 
 regulations. As each of the colonies passed many laws regarding all 
 these topics, it will be necessary to avoid going into much detail.^ 
 The plan of discussion will be to state the extent to which the colonies, 
 as a whole, legislated in regard to each of these topics, the purposes of 
 the laws that were enacted, and the characteristic features of the legis- 
 lation. Where definite results can be pointed out they will be stated. 
 
 IMPORT DUTIES. 
 
 Their revenue needs caused practically all the colonies, at one time 
 or another, to impose duties on some of the commodities imported. 
 This policy prevailed in spite of a general opposition to all laws restrict- 
 
 'The colonial legislation of the colonies is treated in detail in a book entitled American Com- 
 mercial Legislation Before 1789, by Dr. Albert A. Giesecke. He began his study by making a 
 tabular analysis of the provisions of the commercial legislation of each of the thirteen colonies 
 in accordance with the classification above stated. From the tables thus made an analytical 
 text was prepared discussing the more important details contained in the tabular analysis. The 
 summary here given of the legislation is based on the work by Dr. Giesecke, who was one of the 
 collaborators who assisted in the preparation of this history of American commerce. 
 
Commercial Policy of the Colonies. 57 
 
 mg trade. Every colony realized that its economic progress depended 
 in a great measure upon the unrestricted growth of its maritime com- 
 merce. The view expressed in the minutes of the Pennsylvania Council 
 in 1756 in regard to a proposed bill to levy certain imposts that "all 
 were of the opinion that trade should be the last thing taxed; that 
 exemption from duties and freedom of the port had more than anything 
 else contributed to the increase of trade" probably voiced the senti- 
 ments of the majority of the colonists. The Pennsylvania bill of 1756 
 was opposed, because the legislators "were afraid this measure would 
 divert" the trade from Pennsylvania to some other colony. There 
 were only three colonies, Massachusetts, New York, and South Caro- 
 lina, that adhered uninterruptedly to the plan of securing revenue by 
 duties on imports; and in those colonies the duties were so imposed as 
 to permit the largest possible development of the external trade. 
 
 The New England colonies, with the exception of Massachusetts, 
 restricted imposts mainly to liquors and negroes. Connecticut and 
 Rhode Island had no general tariff laws at any time, and the same is 
 practically true of New Hampshire after 1722. Of the middle colonies, 
 New York, whose policy was adopted about one hundred years prior 
 to the Revolution, was the only colony that maintained an impost 
 system. New Jersey and Delaware preferred to secure their necessary 
 funds by other forms of taxation. It should be noted, however, that 
 these two colonies had a rather small volume of maritime commerce. 
 Pennsylvania imposed various duties on imports prior to 1723, after 
 which for thirty-five years there was practically free trade. The 
 expenditures for the French and Indian War necessitated a restoration 
 of her duties. All the southern colonies levied imposts, the only excep- 
 tion being Virginia, which had free trade from 1644 to the close of the 
 Commonwealth government in England. 
 
 The colonies had four purposes in Jevyirig imposts, different laws 
 being intended to accomplish difFeren* ends : 
 
 1. The fiscal or revenue needs prompted most of the legislation. 
 There is no evidence of an attempt to promote or to protect domestic 
 industries by imposts. Bounties were granted and export duties were 
 imposed to stimulate production; but the tariffs were non-protective, 
 they were for revenue only. 
 
 2. The promotion of a direct trade with foreign regions of produc- 
 tion was anpther aim of the impost duties. Several colonies granted 
 lower duties or tariff exemptions in the case of commodities imported 
 directly from the place of growth or production. Goods brought 
 directly from England were also favored more than those from other 
 countries. 
 
 3. The policy of aiding its own shipping was followed by each of 
 five colonies, the lower duties granted to domestic ships being usually 
 on cargoes brought directly from the place of production. Connecticut 
 
58 History of Domestic and Foreign Commerce. 
 
 and Virginia made the duties on wines and liquors lower; Maryland 
 charged no duties on them when imported in domestic ships, and 
 Pennsylvania allowed molasses to come in free, and Madeira wines at 
 a reduced rate, if brought in Pennsylvania vessels. South Carolina's 
 legislation was more elaborate. It provided that goods could be 
 imported duty free in vessels built and owned by the inhabitants of 
 South Carolina; for one-half of the regular duties in ships built in 
 South Carolina and owned outside of the colony; and for three-fourths 
 of the regular rates in vessels built outside of the colony but owned by 
 its own inhabitants. This law, enacted in 1716, was repealed by the 
 proprietors of the colony in 1719. Two years later, however, the 
 colony reenacted the law and provided that a long list of dutiable 
 goods might be imported at one-half duty rates in vessels built and 
 owned in South Carolina, and at three-fourths the regular duty when 
 brought in vessels built in South Carolina and owned by non-residents. 
 
 These laws favoring the direct trade and domestic shipping applied 
 only to wines and liquors in the case of three colonies, and only to those 
 articles and molasses in Pennsylvania. South CaroHna alone applied 
 the principle generally to import duties. These laws, however, were 
 enacted during the latter part of the seventeenth and early part of the 
 eighteenth century and had expired by limitation or repeal some time 
 before the Revolution, doubtless because they discriminated against 
 British shipping and thus met with the opposition of the home govern- 
 ment. In the majority of the colonies the laws imposing import 
 duties had, from the beginning, made exemptions in favor of goods 
 coming from England. At the time of the outbreak of the Revolution 
 the colonial laws not only favored English goods, but also avoided dis- 
 crimination against British as compared with colonial ships. 
 
 4. In a few instances the colonies levied import duties to retaliate 
 against their neighboring colonies. Maryland, as one of the results 
 of the dispute over her northern boundary, sought to punish Pennsyl- 
 vania by charging much higher duties on imports from that colony than 
 from other sections. Pennsylvania, while generally inclined towards 
 low duties, imposed a 10 per cent rate on goods from Maryland, New 
 York, New Jersey, Delaware, and Virginia, because those colonies had 
 imposed duties on her exports; although, with the exception of Mary- 
 land, they placed the same rate on goods from Pennsylvania that they 
 did on articles from other colonies. Pennsylvania's action was taken 
 because she felt that other colonies should treat her as well as she 
 treated them. On two occasions Massachusetts letaliated against her 
 neighbors by imposing discriminating duties to punish them for actions 
 which were deemed to be unjust, but this legislation was only tempo- 
 rary; indeed, the retaliatory legislation of the colonies was neither 
 general nor of great importance in their commercial history. 
 
 The import duties imposed by the colonies were both ad valorem and 
 specific. The earlier laws provided usually for ad valorem rates, while 
 
Commercial Policy of the Colonies. 59 
 
 those enacted at a later date generally levied specific duties, the plan 
 most favored during the later years of the colonial era being to enumer- 
 ate certain articles which were made subject to specific duties, and to 
 place general ad valorem duties upon all non-enumerated commodities, 
 excepting those definitely exempted from imposts. 
 
 The articles which paid most of the import duties were wines, liquors, 
 tobacco, sugar, molasses, cocoa, and dye woods, and, during the later 
 years, tea. Wines and liquors, because they were luxuries, were 
 charged a far higher rate than were other commodities, and were taxed 
 by all the colonies, the purpose of the duties, however, being fiscal 
 rather than ethical. 
 
 It was customary to grant a drawback of the duties in the case of 
 reexported commodities; but this policy was more prevalent in the 
 later than in the earlier years of the colonial period. It was not usual, 
 except in Connecticut and Rhode Island, to refund the entire amount 
 of the duty. The policy of giving drawbacks was applied chiefly to 
 the duties on liquors and negroes, the purpose being not only to stimu- 
 late trade in those articles, but also to aid the manufacture of liquors. 
 Possiblytheexportationof liquors was favored because it was employed 
 in the profitable though nefarious slave trade. 
 
 EXPORT DUTIES. 
 
 Duties were levied on export commodities by all of the colonies except 
 Delaware and Rhode Island, but much less dependence was put upon 
 this source of revenue than upon taxes on imports. NessJ-^^ork, Mary- 
 land, South Carolina, and Virginia had more comprehensive levies 
 upon exports than did the other colonies, which before the year 1750 
 had all repealed their export duties. 
 
 Taxes upon exports were laid mainly for three reasons: to secure 
 revenue, to stimulate domestic production, and to encourage direct 
 trade, the revenue purpose being the most important. Efforts to 
 increase the direct trade by means of these duties were made by only 
 two colonies, and they did not continue the policy after the beginning 
 of the eighteenth century. 
 
 Tobacco, skins, furs, and lumber were the commodities upon which 
 the heavier export taxes were placed, but the list of other articles whose 
 export was made subject to payment of light duties was comparatively 
 long. Among the miscellaneous articles which, at some time, were 
 subjected to export duties by one or more colonies, were fish, meat, 
 wheat, pitch, tar, iron, and wool. For a while Maryland placed a 10 
 per cent ad valorem duty on all European goods reexported from the 
 colony. New York imposed a duty on goods sent up the Hudson River 
 to the Indians— a unique law that was enforced until the outbreak of 
 the French and Indian War. , . ,. , , 
 
 The nature and purposes of the export duties may be indicated by 
 referring to those placed upon tobacco, lumber, and skins. Maryland 
 
6o History of Domestic and Foreign Commerce. 
 
 and Virginia naturally were the colonies which levied the duties on 
 tobacco, and, as this was their chief staple product and was practically 
 all exported, these duties provided a reliable source of revenue. The 
 Maryland laws date from 1641 ; those of Virginia from 1657. The 
 taxes levied by Maryland on exported tobacco were intended entirely 
 to secure revenue for various purposes. Virginia, on the other hand, 
 framed her laws with a view to encouraging trade and effecting its 
 distribution. The tobacco shipped in vessels owned by Virginians was 
 usually exempted from duties, and it was customary to remit the duties 
 or impose lower taxes on tobacco sent direct to England. For a time 
 before 1660 the Dutch and all foreigners were required to pay especially 
 heavy duties, but by the British Acts of Trade of 1660 the colonial 
 trade was restricted to British and colonial ships. 
 
 Export duties on lumber were levied by five colonies, and, with the 
 exception of South Carolina, the duties were imposed where ship-build- 
 ing and coopering were important industries, one evident purpose of 
 the laws being to protect the domestic manufactures against an exhaus- 
 tion of desirable lumber. Connecticut and New Jersey imposed 
 heavier duties upon timber and for a longer time than did the other 
 colonies. The duties were placed upon shipments to other colonies 
 rather than upon those to Great Britain, and laws were enacted to 
 preserve the timber supply. The three other colonies that had 
 export duties on lumber (New Hampshire, Massachusetts, and South 
 Carolina) repealed the laws early in the eighteenth century and their 
 legislation upon this subject lasted for only a few decades. 
 
 Furs, skins, and hides were subjected to export duties by all the 
 southern colonies and by some of those in the North, eight in all. South 
 Carolina and Virginia levied these duties practically throughout the 
 colonial period, while most of the other colonies repealed these charges 
 before the middle of the eighteenth century. The reasons for this are 
 manifest. During the early decades, while an abundant supply of furs 
 could be obtained and exported and while the colonies had few taxable 
 industries, it was natural that these export duties should have been 
 levied. With the decline in the supply of furs and the consequent 
 decrease in their export and with the development of industries and 
 trade, the export duties on skins and furs were mostly all repealed. 
 The export charges had the effect of increasing the supply available for 
 domestic users of furs and skins, and it is probable that they were 
 imposed partly to protect the home industries. 
 
 BOUNTIES. 
 
 The granting of bounties to induce the colonies to produce and to 
 export certain articles desired by Great Britain, as was previously 
 explained, was a definite part of the British commercial policy. At 
 various times Great Britain gave bounties to the colonies to increase 
 their exports to England of flax, hemp, silk, fish, pitch, tar, potash. 
 
Commercial Policy of the Colonies. 6l 
 
 timber, yards, masts, wine, rice, and tobacco. This policy of the mother 
 country was supplemented by bounties granted by all the colonies 
 except Delaware. The southern colonies had the most comprehensive 
 and liberal laws, while New England gave more emphasis to the policy 
 than did the middle colonies. 
 
 The colonial bounties were of two distinct kinds : those to aid pro- 
 duction and those to increase exports. Bounties to increase the grow- 
 ing of hemp and the making of flax were granted by most of the colonies, 
 they as well as the mother country being especially desirous of securing 
 a greater supply of materials for the manufacture of cloth, canvas, and 
 other linen stuffs. With the exception of Massachusetts — and in her 
 case the exception was but for a short time — the bounties were granted 
 only for hemp and flax and not for the manufactured article. This is 
 easily accounted for by the fact that the British need was for the raw 
 materials rather than for the manufactures, and also by the fact that 
 the colonists were not prepared to engage to any considerable extent 
 in anything but strictly domestic manufactures. 
 
 The growth of silk was aided from time to time by Connecticut, New 
 Jersey, South CaroUna, and Virginia. The growth of wheat was 
 encouraged by bounties in South Carolina, Georgia, Virginia, and Mas- 
 sachusetts, and in the case of South Carolina and Massachusetts an 
 additional bounty was granted for the manufacture of flour from home- 
 grown wheat. During the Revolution the scarcity of salt induced the 
 colonies generally to grant special bounties on that article. During 
 the colonial period, however, only Virginia and South Carolina had 
 thought it necessary to grant salt bounties. Among the other articles 
 that received bounties were wine, olive oil, and indigo, which were 
 raised by South Carolina; whale bone, whale oil, and codfish by Rhode 
 Island, and ship-building, which was encouraged by bounties given by 
 Virginia and South Carolina. 
 
 With the exception of hemp and flax, it is probable that these 
 bounties on production had but comparatively slight effect. 
 
 The exportation of commodities received less aid from bounties than 
 production did, most of the bounties to aid exports being granted by 
 Virginia, North CaroHna, and South Carolina. The list of articles 
 aided included tar, hemp, flax, pot and pearl ashes, saltpeter, indigo, 
 cotton, and ginger. In order to secure an export bounty the shipper 
 was required to produce a certificate from the county justice stating 
 that the articles had been actually produced within the colony by the 
 person claiming the bounty. Before the bounty was paid it was also 
 necessary to show a certificate executed by the proper ofiicial at the 
 port to which the commodities had been shipped. 
 
 What the effects of the bounties on exports were would be difficult 
 to measure. Some of the articles aided, for instarice, pot ashes and 
 indigo, came to be exported in large quantities during the eighteenth 
 century, and it is probably safe to assume that the trade in these 
 
62 History of Domestic and Foreign Commerce. 
 
 articles developed earlier and reached a larger proportion than would 
 have been the case had they received no aid from bounties. 
 
 It should be noted that production and trade were aided in numerous 
 ways by the colonies. Bounties constituted only one, though the most 
 important, method of giving assistance. As Mr. Fisher says:^ 
 
 "Aside from the usual method of granting pecuniary bounties proportional 
 to the amount of the product, prizes were offered for the first or the best 
 produced; taxes were remitted to manufacturers; monopolies of the market 
 were given for lirnited times; lands were granted; bills of credit and loans 
 were issued to the projectors of mills; producers were exempted from military 
 duty; certain articles were either made receivable for taxes or were consti- 
 tuted general legal tender; and in many cases the declared purpose was to 
 promote domestic production. The branches of industry thus helped by the 
 colonial governments were not only those engaged in the production of raw 
 materials and naval supplies, but also manufactures, as of salt, powder, 
 firearms, iron, linens, cottons and woolens." 
 
 INSPECTION LAWS, EMBARGOES, AND TONNAGE DUTIES. 
 
 The export trade of the colonies was most carefully regulated by 
 inspection laws enacted primarily for the purpose of preserving the 
 reputation in the foreign market of the articles shipped abroad. As 
 the commerce of the colonies increased in quantity and variety the 
 inspection regulations became more detailed. In a few instances 
 imports were subject to inspection, but the legislation regarding 
 imports was comparatively unimportant. 
 
 Different colonies provided for the inspection of various articles, 
 but the inspection of beef and pork was insisted upon ever5rwhere. 
 In New England and New York exported fish was carefully inspected, 
 and in every colony, except Delaware, the laws provided for official 
 measurement and inspection of exported timber and lumber. Among 
 the other articles worthy of special mention because of the rigid inspec- 
 tion of exports are tobacco, flour, brea'd, and naval stores. Special 
 care was taken to prevent the exportation of tobacco of poor quality. 
 The colonies from which liquors were shipped abroad provided for the 
 official gaging of casks, and in the case of nearly all the commodities 
 exported the government passed such laws as were deemed necessary 
 to prevent the shipper from deceiving the foreign buyer. 
 
 The temporary prohibition of all trade in certain commodities was 
 frequently deemed necessary. Whenever any colony was threatened 
 with a scarcity of the domestic supply (as of food), all exports were 
 prohibited. During the war periods, as from 1756 to 1763, embargoes 
 were usual; and in a few instances trade was prohibited for the purpose 
 of protecting home industries. The earlier embargoes were laid to 
 prevent the scarcity of provisions, whereas during the later colonial 
 period (for instance, during the French and Indian War) the exporta- 
 
 'Fisher, American Trade Regulations Before 1789 (Papers of the Amer. Hist. Assn., Ill, No. 2, 
 1889), p. 470. 
 
Commercial Policy of the Colonies. 63 
 
 tion of commodities was prohibited in order to prevent their reaching 
 the enemies of the colonies and of Great Britain. Embargoes due to 
 war covered not only food suppHes but munitions of war and naval 
 stores. During the French and Indian War Georgia and Virginia 
 alone failed to place an embargo upon the export of these articles, but 
 it is well known that these embargoes did not deter the colonists from 
 selling large quantities of supplies to the French. This constituted a 
 serious grievance of Great Britain against her colonies, whom she 
 regarded as being thereby disloyal to the interests of the mother 
 country. 
 
 There are but few instances of the use of embargoes to aid or to pro- 
 tect home industries. New Hampshire for a while prohibited the 
 exportation of iron ore; Virginia, upon two occasions, and Maryland 
 in one instance, stopped the exportation of wool and scrap iron. Sev- 
 eral colonies, for purposes of protection, placed temporary prohibitions 
 upon the exportation of skins and hides, and some of these embargoes 
 prevented the shipment of these articles to certain countries, while 
 allowing them to be sent to others. 
 
 There were two methods of imposing embargoes upon trade. The 
 more usual method was by special legislative enactment, but in the 
 case of five colonies the governor was authorized to declare embargoes 
 under certain legally prescribed conditions. In a few cases, the 
 embargoes became automatically effective when prices exceeded a 
 specified limit fixed by law. Instances of this are to be found in the 
 legislation of Virginia and Pennsylvania. 
 
 With the exception of Delaware and New Jersey all the colonies 
 imposed tonnage duties practically throughout the colonial period, 
 these being among the earliest methods of taxation. At the beginning 
 the tonnage charges were levied mainly to raise money for the defense 
 of the colonies and particularly for the construction and maintenance 
 of forts at the entrance to the harbors; and it was customary to permit 
 the master of the vessel to pay his duties either in cash or in powder. 
 For this reason the early duties were often designated as "castle" 
 duties or "powder" money. During the eighteenth century the rev- 
 enues from tonnage duties were devoted to the maintenance of Hght- 
 houses, and, in a few instances, for beacons, buoys, and seamen's 
 hospitals. 
 
 In levying the tonnage duties it was the usual, but not the invariable, 
 practice of each colony to favor the shipping owned by its own inhabi- 
 tants. Similarly, the vessels engaged in the coasting trade were gener- 
 ally treated more liberally in the tonnage tax laws than were vessels 
 engaged in the over-sea trade; and it was customary (particularly 
 in New York, Pennsylvania, and New England) to favor the shipping 
 owned by the inhabitants of neighboring colonies. This policy, how- 
 ever, did not prevail in the South, although there are one or two 
 
64 History of Domestic and Foreign Commerce. 
 
 instances of lower tonnage duties being granted to vessels owned by 
 the people of nearby colonies. Occasionally British ships were exempted 
 from colonial tonnage taxes, but this was not the common practice. 
 
 In general, it may be said that the tonnage-tax laws of the colonies 
 were similar to those imposed by Great Britain, and that there was a 
 greater uniformity among the several colonies as regards these laws 
 than was true of other branches of colonial legislation. 
 
 REGULATION AND ADMINISTRATION OF PORTS. 
 
 Every country finds it necessary to provide for the careful regulation 
 of commerce at its ports and to care for the improvement and admin- 
 istration of its harbors. The ports at which commerce may be carried 
 on must be designated, measures must be taken to prevent smuggling, 
 the registration of vessels of domestic ownership must be required, 
 wharfage duties and port fees assessed and collected, pilotage provided 
 for, quarantine rules carried into effect, and the laws for the protection 
 of seamen enforced. These and other details of port administration 
 comprise an important phase of commercial regulation. 
 
 The difficulties connected with the enforcement of its port regula- 
 tions and the expenses of maintaining customs and other officials made 
 it necessary for each colony to restrict its maritime commerce to 
 a limited number of ports. The southern colonies, however, whose 
 seaboard was especially long, were obliged to have a relatively large 
 number of ports at which trade might be carried on. 
 
 Most colonies did little to improve their harbors. The small ocean 
 craft used in the seventeenth and eighteenth centuries were able 
 to enter the natural and unimproved harbors, but the safety and con- 
 venience of shipping often lequired the placing of beacons and buoys. 
 With the exception of three colonies, port improvements were made 
 from time to time under the auspices of the executive branch of the 
 government, or by temporary commissions; but in North Carolina, 
 South Carolina, and Pennsylvania the improvements were placed in 
 charge of permanent harbor commissions, the Pennsylvania authority 
 being called the Board of Port Wardens for the Port of Philadelphia. 
 
 Each colony had the requisite port officials for the execution of its 
 laws, the collector of the customs, the naval officer, and at some of 
 the ports a powder receiver and a comptroller. The collector of the 
 customs and the naval officer were intrusted not only with the admin- 
 istration of the colonial laws but also with the enforcement of the 
 British Navigation and Trade Acts. The difficulties encountered by 
 these officials in the execution of their duties and the extent to which 
 smuggling prevailed are considered elsewhere. 
 
 Some of the more important phases of the policy of the colonies 
 in the administration of their ports and the regulation of trade are 
 illustrated by the laws passed by nearly all governments regulating 
 
Commercial Policy of the Colonies. 65 
 
 rates which the owners of wharves, docks, and storage faciUties might 
 charge the public for their use; by the legislation concerning pilotage 
 enacted by all the colonies except New Hampshire, Rhode Island, 
 New Jersey, and Maryland; and by the legal safeguards thrown about 
 seamen to protect them from unjust treatment by their masters or by 
 others. As was customary> not only in America, but in all the ports of 
 the world, numerous petty fees were charged by the officials in charge 
 of the ports for the performance of their duties. The coasting trade 
 was frequently favored by imposing lower port fees upon vessels 
 engaged in that traffic. 
 
 The commercial legislation of the colonies, Hke that of England, was 
 based upon the mercantile theory of strict regulation. In applying 
 this theory to the economic and political conditions of the New World, 
 the colonial laws diflFered widely in detail from those of the mother 
 country, but they were based upon the same concept of the govern- 
 ment's duty as the controller of all economic affairs. The colonists 
 sought to promote their industry and trade by governmental measures 
 similar in provisions and in minuteness of detail to those by which 
 England was aiding her producers and merchants. 
 
 Except in so far as it was for fiscal purposes, the commercial legisla- 
 tion of the colonies was to aid shipping and to regulate and promote 
 trade; and was not in many instances enacted to further the interests 
 of production. The legislation, speaking generally, was commercial 
 rather than industrial or protective, although the bounties were 
 intended to aid both trade and industry. The export duties, likewise, 
 were not alone for revenue. They sometimes were levied to protect the 
 domestic manufacturer and consumer from a depletion of his supplies; 
 and were occasionally so framed as to discriminate in favor of domestic 
 shipping and direct trading. 
 
CHAPTER V. 
 
 THE EARLY DEVELOPMENT OF AMERICAN COMMERCE 
 FROM 1660 TO 1700. 
 
 Significance of the period, 66. Economic and political status of the colonies from 
 1660 to 1700, 67. Leading industries: agriculture, 70, fur trade, 71, appropriation 
 of forest resources, 71, the fisheries, 72, manufactures, 72, ship-building, 72. The 
 maritime trade of the colonies as a whole, 73. New England's commerce, 75. The 
 trade of New York and East Jersey, 77. The trade of Pennsylvania, West Jersey, 
 and Delaware, 78. The commerce of Maryland and Virginia and the Carolinas, 
 79. General survey of commercial conditions, 81. 
 
 The history of the external trade of the colonies from 1660 to the 
 War of Independence can be presented to advantage by considering 
 it from three points of view: The commerce of the colonies considered 
 as a whole; the industries and trade of the natural territorial sub- 
 divisions, New England, the middle and the southern colonies; and 
 the trade of the colonies with the different sections of the world with 
 which commerce was carried on, Great Britain, the continent of 
 Europe, the West Indies, and Africa. The exchanges of the colonies 
 with each other, which were of less volume and value than was their 
 over-sea trade, will receive separate treatment in another chapter. 
 
 It will be convenient and add to clearness to subdivide into two 
 parts the period of one hundred and fifteen years of the development of 
 the commerce of the American colonies under the British Acts of Trade 
 as enacted in 1660, and to discuss in turn the last four decades of the 
 seventeenth century, and the seventy-five years of the eighteenth 
 century that preceded the Declaration of Independence. 
 
 The close of the seventeenth and the beginning of the eighteenth 
 century marks a good point of time at which to take a survey of colonial 
 commerce, to note what progress has been made, and to take account 
 of the political and economic conditions to which trade development 
 was subject. All of the colonies, except Georgia, had been settled by 
 17CXD; their political institutions had been given permanent form 
 by the reorganization of their governments following close upon the 
 overthrow of the Stuarts and the accession of William III; in each 
 colony the settlers had ascertained what industries were profitable; 
 and the lines of external trade had been marked out. 
 
 The policy of trade regulation adopted by England upon the restora- 
 tion of the Stuarts had been continued and strengthened by Parliament 
 after William came to the throne; and, with the exception of the unen- 
 forced Molasses Act of 1733, there were no trade laws passed by Parlia- 
 ment from the beginning of the seventeenth century until 1764 — not 
 >even the acts limiting certain colonial manufactures — that may rightly 
 
 66 
 
Development of American Commerce, 1660 to lyoo. 67 
 
 be considered to have effected or to have been capable of effecting any 
 important change in the principles underlying British regulation of 
 American trade. Accordingly one may generalize, with fair accuracy, 
 that the early development of American commerce under the British 
 Acts of Trade occurred during the later decades of the seventeenth 
 century, and that the' larger growth of that commerce took place 
 between the early years of the eighteenth century and the beginning 
 of the struggle of the colonies for economic and political independence. 
 This chapter is concerned with the period from 1660 to 1700. 
 
 ECONOMIC AND POLITICAL STATUS OF THE COLONIES FROM 1660 TO 1700. 
 
 Before entering upon an account of the trade of the colonies during 
 the last forty years of the seventeenth century, a brief survey of the 
 status of the several colonies at that time may well be taken in order 
 to secure the necessary background to the presentation of the com- 
 merical events. 
 
 Until near the close of the seventeenth century, the limited resources 
 and sparse population of the colonies and the vigorous opposition of 
 the Indians kept settlement within a narrow strip along the ocean from 
 the Kennebec River, Maine, to, or slightly beyond, the Ashley River 
 in South Carolina. The English and French were contending for the 
 region east of the Kennebec, while the claims of the Spaniards extended 
 as far north as the Savannah River. In the Connecticut and Mohawk 
 valleys two frontier sections had been occupied; but the Great or Appa- 
 lachian Valley of Pennsylvania, Maryland, and Virginia had not yet 
 been invaded by white men. It was not until the last decade of the 
 century that even the towns near the seacoast were safe against Indian 
 
 forays. 
 
 The number of people in the colonies from 1660 to 1700 is not known. 
 Estimates make the population of New England about 90,000 at the 
 end of the century; in the middle colonies there were probably 7S,ooo 
 persons; in Maryland and Virginia between 90,000 and 100,000; and 
 in the Carolinas possibly 20,000 or 25,000. Apparently the total 
 population, white and black, in 1700 was between 250,000 and 300,000. 
 
 The settlers of New England and of all the southern colonies were 
 mainly English, a small French Huguenot settlement in South Caro- 
 lina forming a minor exception. There were some negroes in all sec- 
 tions, but the number of blacks increased from the North towards the 
 South, the negroes outnumbering the whites in South Carolina at the 
 end of the century. In New York, the Dutch probably were in the 
 majority; and Pennsylvania contained Swedes, Dutch, and some Ger- 
 mans, as well as the English Quakers who constituted the mam body 
 
 of the inhabitants. . , , it- • • j 
 
 New England led in general economic development; Virgmia and 
 
 Maryland in the value of agricultural productions. The most serious 
 
68 History of Domestic and Foreign Commerce. 
 
 check to New England's progress during the forty years following 
 1660 was given in i67S-7(> by King Philip's war, which practically 
 destroyed the beaver trade, seriously retarded the fisheries, and 
 burdened agriculture with heavy losses. In general the twenty-nine 
 years of the rule of the restored Stuarts were unfavorable to the devel- 
 opment of New England and the other colonies, but the main conse- 
 quences of the misgovernment of the Stuarts and of the regime of 
 Andros were political rather than economic. 
 
 New York advanced slowly during the seventeenth century. The 
 English conquerors had perpetuated the patroonship system of land 
 tenure, and had continued the burdensome taxes on trade. It was not 
 until the eighteenth century that the agricultural resources of New 
 York and her natural advantages for trade began to exert their due 
 influence; indeed, it was after the opening of the nineteenth century 
 that the third barrier to the settlement and the economic progress 
 of New York, the occupation of the larger part of her territory by 
 the firmly seated Six Nations, was finally overcome. Although New 
 York has long been the Empire State, it was not the empire colony. 
 
 The Jerseys, likewise, under Carteret and Berkeley, the proprietaries 
 to whom the territory was granted in 1664, made relatively slow head- 
 way until after the Jerseys became a crown colony in 1702. The pro- 
 prietors were chiefly concerned with deriving a revenue from their 
 possession, their rights were frequently bought and sold, and the 
 colonies were not well governed. "Controversies among the propri- 
 etaries themselves, between the proprietaries and the inhabitants, and 
 between the colonies and their neighbors rendered a rapid and pros- 
 perous growth practically impossible."^ In the seventeenth century, 
 and for a longer period. East Jersey was, economically considered, a 
 dependency of New York, and before the close of the century Phila- 
 delphia had become the principal entrepot for West Jersey. 
 
 Pennsylvania and Philadelphia developed rapidly from the start; 
 not only because of the zeal and success of the Quakers and others 
 whom Penn sent out and brought over in the early eighties to settle 
 at and near Philadelphia, but also because the Swedes and Finns 
 who settled along the lower Delaware as early as 1638, and the Dutch 
 who arrived in the region in 163 1 and again in 1638, had started the 
 economic development of the basin of the tidal Delaware long before 
 Philadelphia was founded. Penn's colony was not obliged to pass 
 through the doubtful years of uncertain struggle that nearly wrecked 
 the Jamestown and Plymouth plantations. Penn's conciliatory policy 
 towards the Indians made them his trade allies rather than his armed* 
 foes, while the prosperous farms along Delaware Bay furnished the 
 Pennsylvania settlements with needed supplies, and early made Phila- 
 delphia an important center of both domestic and over-sea trade. 
 Thus it was that by the end of the seventeenth century, before Phila- 
 
 'Andrews, Colonial Self-Government, 128. 
 
Development of American Commerce, 1660 to lyoo. 69 
 
 delphia was twenty years old, Pennsylvania had a well-established 
 trade with Europe and the West Indies, as well as with the other 
 colonies; indeed, Penn stated, as early as 1683, that the colony had a 
 surplus for export. 
 
 The development of Maryland and Virginia was relatively slow 
 during the later decades of the seveiiteenth century. In each colony 
 the culture of tobacco by plantation" methods had become the chief 
 activity of the people, and while each colony made headway, Virginia 
 holding first place among all the colonies, both suffered from internal 
 dissensions, and Virginia was afflicted with a costly Indian war. In 
 Maryland the internal troubles were due to the strife of Protestants 
 and Catholics and to the opposition of the people to the selfish and inef- 
 ficient rule of the proprietaries. In Virginia, Governor Berkeley's 
 long regime of inefficiency was made doubly detrimental by the Indian 
 war of 1675-76, and the contemporaneous unsuccessful rebellion led 
 by the incompetent Bacon. Berkeley ceased to trouble Virginia in 
 1677, but the other governors sent out by the Stuarts were little if any 
 tetter, and it was not until the last decade of the century, when the 
 English revolution had brought about a reorganization of the colonial 
 governments, that Virginia was permitted to enter upon a period of 
 prosperous growth. 
 
 With the exception of the small settlement made at Albemarle from 
 Virginia, about 1660, the Carolinas remained without successful 
 colonization until 1670, when Ashley founded Charles Town. The 
 favorable location of Charles Town soon made it an important center, 
 but the growth of South CaroHna was not rapid. The progress of 
 Albemarle and North Carolina was much slower. Both suffered from 
 bad government, due mainly to the conflicting interests of the pro- 
 prietors and the colonists. The persistent but unsuccessful attempt of 
 the proprietors to force Locke's "Grand Model" government upon the 
 struggling settlements in the American wilderness is well kriown. The 
 only consequence of the attempt was to arouse the opposition of the 
 colonists and to retard the development of the colony. A change for 
 the better in political conditions came after 1690 in the Carolinas, as 
 it did in most of the other colonies. 
 
 Georgia was founded by Oglethorpe in 1732. There were some 
 temporary settlements south of the Savannah before the year 1700; 
 l)ut Georgia was merely a source of furs until it began its existence as 
 the "buffer" colony organized by the English for the purpose, among 
 others, of holding the Spanish and French in check. 
 
 LEADING INDUSTRIES OF THE COLONIES FROM 1660 TO 1700. 
 
 While the trade of the colonies was affected by the political condi- 
 tions to which reference has been made, it was dependent upon and 
 associated with industrial activities. The leading industries of the 
 different sections were widely variant, but were few in number and may 
 be readily reviewed. 
 
70 History of Domestic and Foreign Commerce. 
 
 In general, it may be said that practically all of the industries charac- 
 teristic of the economic life of America during the colonial period had 
 been inaugurated before the end of the seventeenth century. Certain 
 manufactures, notably those of iron, had by that time made only 
 slight beginnings; but as most kinds of manufacturing were confined 
 mainly to those carried on in the homes or in the towns to meet strictly 
 local needs, as the work of millers, smiths, wheelwrights, etc., the 
 changes that took place during the eighteenth century were chiefly 
 those that came from growth rather than from any revolution in indus- 
 trial methods or activities. 
 
 In discussing the beginnings of American commerce during the period 
 from 1600 to 1660 (Chap. II), brief references were made to the natural 
 resources of the New World and to the industries by means of which 
 the colonists first secured a living and obtained the products that were 
 exchanged in their domestic and external trade. Supplementary to 
 what was said there it is desirable, in this connection, to make a sum- 
 mary statement of the economic interests and occupations of the 
 colonies as a whole, and of the northern, middle, and southern sections 
 severally during the later decades, and at the close of the seventeenth 
 century. 
 
 Agriculture was the chief occupation of the great majority of the 
 people in all the colonies, even in New England, which had the most 
 diversified economic life. There were, however, wide differences among 
 the colonies in the crops grown, the methods of culture, and the manner 
 of Hving. The farm in New England was small and was cultivated 
 mainly by the owner and his family. The farmers sometimes lived 
 upon their own land, and often in small villages from which they 
 worked their outlying farms, as had been customary with them and 
 their ancestors in England. The soil was relatively unproductive, 
 cereals and corn were raised with difficulty, and pulse and potatoes 
 were important articles of food. In New York the patroonships per- 
 sisted; but the farm of medium size owned in fee simple was becoming 
 more and more characteristic. Cereals were the main crops. The 
 Pennsylvania farm was larger than the average holding in New Eng- 
 land, the soil was more fertile, cereals and corn were more extensively 
 planted, and larger use was made of hired labor. 
 
 Plantation farming prevailed generally in Maryland, Virginia, and 
 the Carolinas. The holdings were especially large in South Carolina 
 and Virginia, although the size of Virginia plantations was kept in 
 check somewhat until 1699. In that year Virginia repealed a law that 
 had limited any planter's holdings to 50 acres per servant or person 
 whom the planter had brought into the colony. The vast plantations 
 of Virginia were mostly acquired during the eighteenth century. The 
 large plantation was organized with a view to producing one staple 
 crop, as tobacco or rice, for sale, and such cereals and other foods as 
 
Development of American Commerce, 1660 to lyoo. 71 
 
 the plantation required. The economic ideal was single-crop farming, 
 the sale of the farm products, and the purchase of all manufactures and 
 supplies other than such tools and homespun clothing as the plantation 
 hands could make. Virginia and South Carolina depended almost en- 
 tirely upon slave labor; Maryland less exclusively so. Tobacco was 
 almost the sole export crop of Virginia and Maryland during the period 
 under consideration. In the Carolinas there was more diversification in 
 production, but before the year 1700 rice had become the chief export 
 staple. 
 
 The trade in furs carried on in all the colonies with the Indians 
 had from the earliest days of settlement contributed an important item 
 to the sum total of their external trade. This trade continued through 
 the seventeenth and eighteenth centuries, growing less in volume with 
 the steady advance of settlement and shifting in location as time went 
 on. While the colonial fur trade was largest in New York, it was 
 actively prosecuted in New England, the middle colonies other than 
 New York, and the southern colonies. The Indian wars between 1670 
 and 1680, King Philip's War in New England, and the war in Virginia 
 in 1675-76, seriously checked, although they did not end, the fur trade, 
 even in New England and Virginia. 
 
 The continued growth of the British colonies in America could mean 
 only the decline of the trade with the Indians. The Briton displaced 
 the Indians; he did not assimilate with them, as the French and 
 Spaniards were wont to do. The French were most successful fur 
 traders, and the Canadian wilds, instead of the forests back of the 
 British colonies in America, had by the close of the seventeenth cen- 
 tury come to control an increasing share of the fur-export trade. From 
 the industrial and commercial point of view this was no misfortune 
 for the British colonies, because their capital and labor were more 
 profitably devoted to other pursuits than trading with the Indians. 
 
 Throughout the colonies, the valuable natural resources of the forests 
 were appropriated and made to contribute to commerce and wealth. 
 Clapboards and other lumber were among the earliest exports from 
 America, and throughout the colonial period the exports of timber and 
 lumber, masts, naval stores, and ships were a prominent feature of the 
 external trade. Housebuilding materials went to the West Indies and 
 Europe, ships and ship-timbers were sold mainly in Great Britain, 
 whose laws favored the exportation of these articles from the colonies. 
 New England led in the construction of ships and in the exportation 
 of masts, but New York and Pennsylvania each made its contribu- 
 tion The southern forests suppHed the pitch, tar, and rosin and the 
 durable yellow pine for the construction and equipment of vessels. 
 
 It is a satisfaction to know that the colonists were able to derive as 
 much wealth as they did from the vast forest resources. Unfortunately, 
 the settlement of the country and the development of agriculture 
 
72 History of Domestic and Foreign Commerce. 
 
 necessitated the destruction of the forests. The land had to be cleared; 
 the tree was the foe of the farmer. Thus it was that for two and a 
 half centuries in America the larger part of the forests had to be 
 destroyed at great expense instead of being profitably utilized. The 
 situation has now changed and the American people are spending large 
 sums to maintain and enlarge the remnants of their once seemingly 
 limitless forests. 
 
 Next to agriculture, the sea fisheries yielded the most wealth of the 
 several colonial industries, and they also held a prominent place in the 
 external trade. The Grand Banks fisheries, which had been prose- 
 cuted since the early part of the sixteenth century by men from Eng- 
 land, France, and Portugal, were followed by an increasing number 
 of the people of New England during the colonial and early national 
 periods. The catching of cod on the various banks off the New Eng- 
 land shore naturally developed as settlement progressed, and from 1668 
 on, deep-sea whaling became a business of expanding importance. 
 Sea-food was a valued asset in all the colonies, but the towns from which 
 the commercial fisheries were carried on were mainly in New England, 
 although there was some trade in fish by the colonies on the New York, 
 Delaware, and Chesapeake bays. 
 
 Most of the manufacturing done in the colonies was to supply 
 domestic and plantation needs; but, from the earliest days, forest 
 products were prepared for export, lumber of different kinds, masts, 
 and, somewhat later, naval stores. Provisions and flour and rum 
 were early added to the over-sea shipments, particularly to the West 
 Indies. The colonists also found a limited market in supplying the 
 ships with their needed stores, and until some time after the close of 
 the seventeenth century the traders, especially those in southern 
 ports, were not particular about inquiring whether the shipmasters 
 were engaged in mercantile or piratical pursuits. 
 
 The manufactures which early gained and long held special promi- 
 nence were New England rum and ships. The rum industry created a 
 demand for West Indian molasses, thereby made a larger market for 
 New England's exported fish, lumber, provisions, and live animals, 
 and supplied the slave-traders of Newport and other towns with the 
 commodity with which African negroes could be purchased. The sale 
 of negroes in the southern colonies and the direct shipment of rum to 
 the middle and southern sections promoted intercolonial trade, what- 
 ever the moral effects of slavery and rum-drinking may have been. 
 
 From the launching of Governor Winthrop's little 30-ton sloop, 
 the Blessing of the Bay, in 163 1, the coast towns of Massachusetts 
 Bay Colony actively engaged in ship-building. The industry was 
 carried on to some extent in Rhode Island, but not in Plymouth, 
 and but little in Connecticut. As early as 1638, a vessel constructed 
 in New England sailed up the Thames. In 1665, the Court of Massa- 
 
Development of American Commerce, 1660 to 1700. 73 
 
 chusetts estimated that the people of the colony then owned 192 vessels, 
 large and small.^ According to the report made in 1676 by Edward 
 Randolph, who was subsequently for a long time the British collector 
 of customs for New England, there had, up to that time, been 730 
 vessels built in Massachusetts.^ While New England led in the build- 
 ing of ships, the industry was carried on in New York and Pennsyl- 
 vania, and to a slight extent farther south. 
 
 The great majority of the early colonial-built vessels were as small 
 as 50 tons burden or less, constructed for the fisheries and the West 
 Indian and intercolonial trade; but a part of them were of 100 or more 
 tons burden and thus belonged to the class of larger ocean ships of that 
 time. This fact is illustrated in a report made by Governor Dudley 
 shortly after 1700, who stated that the trade of Massachusetts then 
 required 2CX5 vessels, of which 20 were of more than 100 tons burden 
 each, and 60 exceeded 50 tons capacity. 
 
 The sale of the ship as well as its cargo in the foreign port early 
 became a frequent occurrence, because the Americans had an abund- 
 ance of excellent ship lumber and masts and were skillful shipwrights. 
 The British market for American ships continued throughout the colo- 
 nial period; and at the outbreak of the Revolution 30 per cent of all 
 the ships (2,342 out of 7,694) engaged in the commerce of Great Britain 
 were built in American yards. The British writer Champion stated 
 that "America was able to supply us with ships 30 per cent cheaper 
 than they could be built in Great Britain."^ Fully three-fourths of the 
 commerce of the colonies during the later colonial period was carried 
 in ships of their own construction. 
 
 MARITIME TRADE OF THE COLONIES AS A WHOLE. 
 
 The other notable business activity of the colonists was the maritime 
 trade, European, intercolonial. West Indian, and, to some extent, 
 African, to which their productive industries and need of imports gave 
 rise.* The value of the trade of the colonies with the mother country 
 
 'Doyle, English Colonies in America, III, 28. ^Andrews, Colonial Self-Government, 332. 
 
 'Champion. Considerations' on the Present Situation of Great Britain, etc., 1784. 
 
 ^Statistical informationla^ery meager as to the commerce of the colonies during the seventeenth 
 century; indeed, the systematic compilation of the trade of Great Britain with the colonies began 
 after the appointment of the Board of Trade and Plantations by William III in 1696. There is no 
 continuous record of the trade of the colonies as a whole or severally even during the eighteenth 
 century, with countries other than Great Britain, with the West Indies, and with each other. 
 The British Act of Trade of 1663 had provided for the appointment of naval officers at the 
 colonial ports, among whose duties was that of recording imports and exports, but they were not 
 aoDointed untU a decade or more had elapsed, and then probably only for a part of the ports. 
 (Andrews. Colonial Self-Government, 33.) The British act of 1672 created the office of col- 
 lector of the port to collect the duties imposed by the law, and during the next few years (/6.d.) 
 such officers were appointed for New York (1674) Virgmia (1674). Maryland (1676), Albemarle 
 (1677) New England (1677). Carolina and Roanoke (1685), South Carolma (168S), and Pennsyl- 
 vania (1688) The records of the customs officers in England probably would not furnish the 
 material for a statistical account of colonial commerce during the later decades of the seventeenth 
 century were the records in existence. Whatever they contained was lost a century ago in a fire 
 that destroyed the original customs records. The reports of the naval officers were more regu- 
 larly and systematicaUy made, and they have been preserved. 
 
74 
 
 History of Domestic and Foreign Commerce. 
 
 in 1697, "c^r the close of the period under special consideration in this 
 chapter, is stated by the official statistics kept by the customs officers 
 at the ports of Great Britain to have been £140,132 7s. 6d. for exports 
 to the continental colonies in America, and £279,854 lis. gd. for the 
 imports thence into Great Britain, the total of exports and imports 
 being £419,986 19s. 3d. The year 1697 was the first one after the es- 
 tablishment of the Board of Trade. The value of the trade for the 
 year 1700 was: British imports from the colonies, £395,023 i8s. lod.; 
 British exports, £344,343 i8s. 4d.; total £739,367 17s. 2d. 
 
 The distribution of this trade among the different colonies in 1700 
 was as follows: 
 
 Table 1. — Trade of Great Britain with Colonies in lyoo. 
 
 
 British imports. 
 
 British exports. 
 
 Total. 
 
 
 £ s. d. 
 
 41,486 11 9 
 
 17,567 10 
 
 4,608 9 8 
 
 317,302 12 11 
 
 14,058 14 6 
 
 £ i. d. 
 91,918 14 6 
 49,410 15 
 18,529 6 2 
 173,481 10 4 
 11,003 12 4 
 
 £ s. d. 
 
 133,405 6 3 
 66,978 5 
 23,137 15 10 
 
 490,784 3 3 
 25,062 6 10 
 
 New York 
 
 Pennsylvania 
 
 Virginia and Maryland. . 
 
 Total 
 
 395,023 18 10 
 
 344,343 18 4 
 
 739,367 17 2 
 
 
 As the purchasing power of money in 1700 may safely be taken 
 as five times what it now is, the value of the British trade with the 
 American colonies was the equivalent of about $17,500,000 in the 
 currency of to-day. On the basis of a colonial population of 300,000, 
 this would give a per capita trade with Great Britain of $58 of our 
 present money. Thus viewed, the commerce seems large; but the 
 total trade of the colonies was much more valuable than these figures 
 indicate, because they include only the commerce with Great Britain, 
 while therewas in addition the direct trade with the continent of Europe, 
 ♦■^me African trade, the large commerce with the West Indies, and the 
 "intertQlbhiaiXex-changes. Indeed, the above figures probably under- 
 state the real value of the trade of the colonies with Great Britain. 
 The customs-house officials, then even more than now, undervalued 
 commodities; and that there was more or less of smuggling of goods 
 around the customs offices is a well-known fact. 
 
 What the total value of the maritime commerce of the colonies was 
 in 1700 can only be conjectured. It was, probably, from one and a 
 half to twice the value of the trade with Great Britain, in the case 
 of all the colonies except Maryland and Virginia, whose exports con- 
 sisted mainly of tobacco that was nearly all sold in England and thence 
 reshipped, in large part, to the Continent. The trade of New England 
 included none of the enumerated articles, and the exchanges made in 
 continental markets, in Africa, the West Indies, and in the other colo- 
 
Development of American Commerce, 1660 to lyoo. 75 
 
 nies probably exceeded the trade with the mother country. And the 
 same may have been true of Carolina during the seventeenth century, 
 when the West Indian trade was relatively larger than it was after 
 rice became her staple export. The imports into New England and 
 New York from Great Britain were twice to five times the exports 
 to the mother country, the coin and bills of exchange required to settle 
 the unfavorable balance being secured mainly from the trade with 
 other sections of the world. 
 
 The importance of tobacco in the external trade of the colonies is 
 shown by the figures for Virginia and Maryland; 80 per cent of the 
 entire exports to Great Britain in 1700 were from those two colonies. 
 The imports of those colonies consisted largely, though not exclusively, 
 of British goods, their purchases in the mother country amounting to 
 half of the total for all the colonies in 1700. 
 
 By considering the trade of the several colonies or sections somewhat 
 in detail, a more definite picture may be gotten of their commerce, 
 despite the fact that, for reasons already stated, it will not be possible 
 to present statistics either of volume or value. 
 
 NEW ENGLAND'S COMMERCE. 
 
 The colonies composing New England excelled the other colonies in 
 diversification of industry and in range and variety (although not in 
 value) of their maritime commerce. The chief commodities exported 
 were fish, provisions, rum, forest products, and ships. The forest 
 products and the ships found a welcome market in Great Britain; but, 
 as fishermen and farmers, the people of New England came into com- 
 petition with the people of old England, who protected themselves by 
 "com" laws, by duties on fish, and by the prohibition of the importa- 
 tion of salted provisions. The principal effect of British competition 
 and protection was to enlarge New England's trade with the British 
 and foreign West Indies, where sea and land products could be ex- 
 changed for a large variety of tropical products, especially sugar and 
 molasses. This West Indian trade, as has been pointed out, enabled 
 the distillery business to prosper in Massachusetts and Rhode Island, 
 and indirectly made New England the chief center of the slave trade. 
 
 Economic conditions cooperated to build up the shipping of New 
 England, and also to give her merchants the leading place in the inter- 
 colonial trade. The progress of New England brought into existence 
 a tonnage of shipping, large for that time, first, because the sea, quite 
 as much as the land, was the source of the Hving and of the wealth of 
 the people. The conditions in this regard were totally unlike those of 
 Virginia, where there was every incentive to till the soil and to ignore 
 the maritime resources, and dissimilar to those in Pennsylvania and 
 New York, where agriculture engaged the energies of the great majority 
 of the population, but did not cause maritime pursuits to be seriously 
 
76 History of Domestic and Foreign Commerce. 
 
 neglected. In New England the vessel was as much a tool of industry 
 as was the plough. 
 
 Another reason accounting for the relatively large shipping of New 
 England and for her activity in commerce was the necessity of securing 
 from the other colonies and the West Indies both goods and bills of 
 exchange with which to obtain a part of her imports from Great Britain. 
 The British market for New England's products being limited and sub- 
 ject to duties, double trading was necessary. To a large extent this 
 -was true of the middle colonies, but not of those south of Pennsylvania. 
 
 In the third place, both the maritime and mercantile interests of 
 New England were promoted by the advantages which her location 
 gave her merchants for engaging in intercolonial commerce, and for 
 acting as middlemen for a part of the trade between the colonies and 
 Europe. It was natural that New England and the tobacco colonies 
 should have some trade with each other, despite the fact that, at that 
 time, the northern farm and the southern plantation each suppHed 
 itself as fully as possible with its own food and crude manufactures. 
 The radical difference in the products of the two sections made a 
 limited trade profitable if not indispensable. Furthermore, it was 
 especially easy for the New England merchant to engage in the inter- 
 colonial trade in connection with his West Indian business. His ships 
 were sailing to and fro past the ports of the middle and southern 
 colonies, and it was frequently profitable to combine intercolonial and 
 West Indian trade. Many New England merchants had agents in the 
 southern colonies.^ In like manner, the merchants of New England 
 supplied the other colonies, particularly the southern ones, with a part 
 of their imports from Europe, and bought some of their exports for 
 immediate or subsequent shipment to Europe. The traders of New 
 England thus competed to some extent with the merchants of England 
 for their indirect trade with America. The merchant in New England 
 could act as middleman profitably not only because New England im- 
 ported from Europe more than she exported thence, but also because the 
 thriving ports of New England lay but little off the direct route from 
 the southern colonies to Europe. It was natural that the commercially 
 active towns of Massachusetts and of other northern colonies should 
 become entrepots for a portion of both the eastbound and westbound 
 trade of the southern colonies with Europe. )( 
 
 The external commerce of New England Degan with the trading of 
 numerous small, and largely dissociated, towns directly with Europe 
 and other regions; but as settlement increased, industry developed, 
 and commerce grew, there came to be more intracolonial integration 
 of trade, and the external commerce centered more largely, though by 
 no means solely, at a few of the populous ports most advantageously 
 situated, such as Boston, Salem, Newport, and New London. 
 
 'Bruce, Economic Hist, of Va. in the Seventeenth Century, II, 319-322. 
 
Development of American Commerce, 1660 to lyoo. 77 
 
 The manufacturing activities of New England had a controUing 
 influence upon the scope and volume of its external trade. Most of 
 the goods were made for domestic consumption, and were produced in 
 the homes, with the exception of milling products and the output of 
 small factories and distilleries in the larger towns. Nevertheless, the 
 total volume of manufactures was large enough to have the two marked 
 consequences: (i) lessening the demand for European goods, thus 
 causing New England to import far less of them than did the strictly 
 agricultural colonies such as Maryland and Virginia; and (2) causing 
 the importation of such materials as molasses, pitch, tar, and tools for 
 use in manufacturing. Before the end of the seventeenth century the 
 manufacturing tendencies of New England were so evident as to make 
 the British manufacturers and traders deem it wise to have laws passed 
 to seek to check colonial manufactures by confining their sale to local 
 markets. That those laws were unnecessary and were of small effect 
 has been pointed out in a previous chapter. 
 
 COMMERCE OF NEW YORK, EAST AND WEST JERSEY. PENNSYLVANIA. 
 
 AND DELAWARE. 
 
 The trade of New York during the latter part of the seventeenth 
 century was small, considering the early settlement of the colony and 
 the present greatness of the commerce of the State. The reasons for 
 the slow development, as has been pointed out, lay in the land system 
 and trade restrictions estabUshed by the Dutch and continued, with 
 modifications, by their English successors. The hinterland tributary 
 to the port of New York until after 1700 was the valley of the Hudson 
 River, a small part of the Mohawk basin, and the settled portion of 
 
 East Jersey. 
 
 The exports from New York were composed mainly of furs, cereals, 
 provisions, animals, staves, lumber, and whale oil. Like New England, 
 though to a less degree. New York had a restricted market in Great 
 Britain, and found the West Indian trade a necessary supplement to 
 her commerce with Europe. The fur trade was large throughout the 
 century, although it did not retain its early importance; the market 
 was principally in Europe. During the entire colonial period the 
 exports consisted chiefly of farm products, which were sent in part to 
 Great Britain and largely to the West Indies, where flour, biscuit, 
 beef, pork, bacon, and horses were regularly shipped. Lumber and 
 staves were Hkewise sold both in Europe and in the West Indies. 
 New York gained some importance towards the end of the century as a 
 market from which whale-oil was shipped to the West Indies and to 
 the neighboring American colonies. The intercolonial trade of New 
 York was relatively small and was largest with New England, although 
 it included a small volume of exchanges with the southern colonies. 
 Taken as a whole, the export commerce of New York ranked between 
 
78 History of Domestic and Foreign Commerce. 
 
 that of New England and the southern colonies in the scope of articles 
 and in territorial distribution. New York was subordinate to both 
 New England and Virginia in volume and value of maritime trade. 
 
 Practically all of the external trade of the New York colony was 
 handled through New York City. East Jersey, likewise, while under 
 the political dominance of New York, handled its commerce through 
 the same port. Until i68o. East Jersey was not permitted any other 
 port of entry, and not until 1700 was it given control over its own 
 customs duties. This was considered a serious grievance by the people 
 of Jersey, and, without doubt, its commerce, like that of New York, 
 was hampered by the export and import duties. It is hardly probable, 
 however, that East Jersey would in any case have developed much 
 foreign trade independent of New York before 1700. Until that time 
 she was little more than a supply territory tributary to New York. 
 
 New York had some ship-building, but the colony ranked high 
 neither in the building nor in the operation of shipping. Her com- 
 merce was carried on partly by her own merchants and partly by those 
 of New England and Great Britain. Her people were more agricul- 
 tural than mercantile or maritime in their ambitions: they permitted 
 or perpetuated the heavy taxation of commerce; and, until near the 
 end of the seventeenth century, little was done to foster and develop 
 external trade. 
 ^ West Jersey, Pennsylvania, and Delaware constituted an economic 
 district whose commercial center was in the towns on the lower Dela- 
 ware. By 1690, Philadelphia had secured the unquestioned leadership 
 in the trade of the Delaware region. Burlington, settled in 1677, was 
 the seat of government of West Jersey, and, for a time, was a rival of 
 Philadelphia. It was an important local market for agricultural prod- 
 ucts, fairs were regularly held, and timber, lumber, and furs were 
 exported. Gloucester and Salem were the other markets and shipping 
 points for West Jersey, but the trade of all three of these Jersey cities 
 was chiefly local. What they shipped out of the colony consisted 
 principally of farm products and was sent mainly to Philadelphia, to 
 be used in that market or to be exported abroad. 
 
 When Penn founded his colony at Philadelphia in 1681, there were 
 several prosperous settlements on the west bank of the Delaware, 
 among them New Castle and Fort Christiana (now Wilmington) in 
 the Three Lower Counties, which in 1696 became the separate colony 
 of Delaware. Another promising town was Upland (Chester). These 
 early settlers on the right bank of the Delaware — Swedes, Dutch, and 
 English — ^were thrifty farmers, raising a surplus of tobacco, cereals, 
 and animals. The rapid growth of Philadelphia in population and 
 trade gave the Lower Counties a good market, and they early became 
 an important tributary to the commerce of Pennsylvania. 
 
 In 1686, five years after the founding of Philadelphia, there were 
 8,000 people in the province of Pennsylvania. The soil was fertile, 
 
Development of American Commerce, 1660 to lyoo. 79 
 
 the Indians were friendly, and commerce was free of duties. The 
 commerce with Europe was continuous from 1680 on, and the West 
 Indian and intercolonial trades were well started within five years. 
 The Pennsylvania forests were rich in furs, and the friendly relations 
 with the Indians favored trading. The profits Maryland and Virginia 
 had secured from tobacco culture caused tobacco to be grown in 
 Pennsylvania. Thus it was that furs and tobacco were at first promi- 
 nent among the exports, and the shipment of furs long continued, but, 
 of course, in decreasing volume with the progress of the colony. 
 Tobacco, however, soon gave way to cereal crops, and the chief exports 
 came to be grain, flour, provisions, and lumber. The building of vessels 
 for use in the commerce of the colony and for sale abroad was early 
 begun. Penn's policy of encouraging agriculture, trade, and ship- 
 building was thoroughly successful. 
 
 The trade of Pennsylvania with Europe during the seventeenth cen- 
 tury — the first twenty years of the colony's existence — ^was not espe- 
 cially large, nor did it become notably valuable during the most of the 
 first half of the eighteerith century. Two causes readily account for 
 the fact that the prosperity of Pennsylvania did not necessitate a large 
 commerce with Europe, as was the case with her neighbors to the south : 
 
 (i) Instead of trading almost solely with Great Britain, as Virginia 
 and Maryland did, Pennsylvania had a well-distributed commerce, 
 her products being exchanged for those of the other colonies and the 
 West Indies as well as for those from Europe. As was true of the 
 exports from New England and New York, some of the staple products of 
 Pennsylvania competed with the industries of Great Britain, and could 
 be sold in that country only by paying protective duties. This caused 
 the merchants of Pennsylvania to follow the example of New England 
 in developing trade with the West Indies and her sister colonies. 
 
 (2) Pennsylvania, and Philadelphia, the commercial center of the 
 Delaware basin, had an expanding home market with the rapidly 
 increasing population of the three colonies in the valley. To an excep- 
 tional degree, the natural resources and the diversified activities of 
 West Jersey, Delaware, and Pennsylvania made of those colonies a 
 self-sufficient economic unit. As the region developed and its indus- 
 tries became more specialized, a large external trade became profitable; 
 but in the early decades there was less need than the other sections of 
 America had of producing large quantities of goods to be shipped 
 abroad to secure the commodities required to supplement the products 
 of home industry. 
 
 COMMERCE OF MARYLAND. VIRGINIA, AND THE CAROLINAS. 
 
 References have already been made to the main characteristic of 
 the commerce of Virginia and Maryland— the exportation of tobacco 
 from their plantations and the heavy importation of British manu- 
 factures. All efforts to diversify their industries, even their agricul- 
 
8o History of Domestic and Foreign Commerce. 
 
 tural prpducts, proved unsuccessful. In Maryland, however, as time 
 went on, an increasing acreage of wheat was sown, but not until into 
 the eighteenth century was there a surplus for export. The exports 
 of both colonies prior to 1700 consisted of tobacco, furs, some forest 
 products, and a small quantity of provisions. 
 
 Although the imports of Maryland and Virginia came mainly from 
 England directly and in English vessels, some wine and British goods 
 were brought from New England in the ships belonging to her mer- 
 chants. Likewise the ships of the New England, New York, and 
 Pennsylvania merchants were wont to call at Chesapeake ports on the 
 way from the West Indies to exchange sugar and other tropical products 
 for tobacco, furs, and hides. 
 
 The West Indian trade of Virginia,^ which started in 1633, grew with 
 the progress of the commercial intercourse of the northern colonies 
 with the West Indies and with the increase in the requirements of the 
 enlarging plantations for negroes, sugar, molasses, salt, ginger, and 
 rum. During the seventeenth century these imports came mainly 
 though not entirely from the Barbados and were paid for with tobacco, 
 provisions, grain, and bills of exchange. This trade was carried on not 
 only by the New England merchants, as described, but also to some 
 extent directly by the largest planters, who at times personally or 
 through agents made their purchases in the islands. There was also 
 some casual trading done by ship-masters, who brought cargoes to 
 Virginia and personally sold or bartered them at the plantation wharves 
 instead of consigning the goods to authorized factors. 
 
 Maryland had no over-sea shipping of her own, and Virginia had 
 practically none, both colonies depending upon the merchants of Great 
 Britain and the northern colonies for the transportation required to 
 handle their large commerce. 
 
 The most striking fact concerning the trade of Virginia and Mary- 
 land was its great value. The total external commerce of the two 
 colonies in 1700 must have approximated £600,000 in value, the 
 present money equivalent of which would be fully $15,000,000. This 
 was an average annual per capita trade of £6, or $150 as measured in 
 our currency. There are few countries at the present time whose 
 foreign trade is as valuable per inhabitant as was that of the tobacco 
 colonies 200 years ago. The foreign commerce of the United States 
 in 1914 was about $42 per capita. 
 
 The trade of the Carolinas during the three decades following the 
 settlement of Charles Town in 1670 was relatively small, and differed 
 greatly from their trade in the eighteenth century, when rice and 
 indigo had become the staple exports. In the seventeenth century, 
 South Carolina traded quite as much, if not more, with the West Indies 
 and with ship-masters, mercantile and piratical, seeking supplies, as with 
 
 'Bruce, Economic Hist, of Va. in the Seventeenth Century, II, 324-328. 
 
Development of American Commerce, 1660 to 1700. 81 
 
 the mother country. There was little, if any, commerce with the other 
 colonies. As Professor Andrews^ says: "Its isolation, southerly 
 location, and the character of its economic life during the seventeenth 
 century place it apart from the northern colonies, in a group with the 
 English plantations in the West Indies." The early exports, consisting 
 of the plantation products — corn, cattle, and pork — and the com- 
 modities obtained from the pine forests — pitch, tar, and clapboards — 
 were sold to ship-masters for coin, or sent to the West Indies to exchange 
 for sugar, molasses, rum, and ginger. A part of the articles thus 
 obtained, together with some furs and cedar-wood, were sent to 
 England to purchase manufactures. 
 
 The external trade of South Carohna, unlike that of North Carolina, 
 centered almost entirely in one city, Charles Town, which, at the end of 
 the seventeenth century, had become the most important port south of 
 Philadelphia. It was the entrepot for the large territory occupied by the 
 southern colonies; and its convenience as a port of call for the merchant- 
 men of Europe and the northern colonies was of advantage to its exter- 
 nal commerce and increased its sale of naval stores and ship supplies. 
 
 The progress of North Carolina in the seventeenth century in popu- 
 lation, industry, and commerce was notably slow, partly because the 
 government was badly managed, but largely because the Albemarle 
 Colony was not favorably located for the production of the crops that 
 were cultivated in the early years of the life of the settlement. The 
 limited exports consisted of furs and tobacco, which were sold to the 
 New England merchants. British ship-masters evidently did not 
 consider the trade of Pamlico Sound to be large enough to be profitable, 
 while the New England vessel could readily make a call in North Caro- 
 lina while en route from the West Indies or South Carolina. In neither 
 of the Carolinas did the people build or buy ships to carry on their 
 
 commerce. 
 
 GENERAL SURVEY OF COMMERCIAL CONDITIONS. 
 
 At the close of the seventeenth century most of the American 
 colonies had passed through the initial period of experiment. Settle- 
 ment and growth had proceeded far enough to establish the lines of 
 future economic progress, and the colonies were ready for the larger 
 industrial and commercial development they were to have in the 
 eighteenth century. 
 
 Political conditions were greatly improved when the period of mis- 
 rule under the Stuarts came to an end with the dethronement of James 
 II in 1689. The reorganization of the colonial governments during 
 the next two years removed many of the hindrances to growth and 
 prosperity. Moreover, the energies of William III were so absorbed 
 by the great struggle with France that he gave colonial affairs compar- 
 atively little attention and thus left the colonies, in most matters, free 
 
 ^Colonial Self-Covernment, 316. 
 
82 History of Domestic and Foreign Commerce. 
 
 to solve their new-world problerhs in their own way and to work out 
 their own destiny by establishing such social, economic, and legal 
 institutions as seemed to them best. What they did was to adapt 
 British laws and institutions to American conditions. The results 
 were most satisfactory, especially in the fields of industry and com- 
 merce. Great Britain had gained the commercial leadership of the 
 world by the close of the seventeenth century, and her colonies in 
 America achieved a commercial and maritime success even more 
 notable than the triumphs of the mother country. 
 
 This does not imply that the mercantile system, as applied by 
 Great Britain and the several colonies, is to be justified in all the details 
 of legislation. Mistakes were made, but they were not fatal. Indeed, 
 the British Acts of Trade, as applied to the colonies prior to 1764, did 
 not seriously affect their economic development; and this was espe- 
 cially true of the two acts of commercial legislation adopted by Great 
 Britain during the closing decade of the seventeenth century. The 
 law of 1696 was an administrative measure designed to strengthen the 
 acts of trade and to harmonize those laws with the commercial system 
 of the mother country; but it contained no new principles and within a 
 few years the enforcement of the law became lax. The British law 
 passed at the close of the century (1699) restricting the sale of colonial 
 woolen manufactures to the local market of the colony in which they 
 were made had but slight effect, even in New England, where manu- 
 facturing was most largely developed. 
 
 Colonial trade, both domestic and external, in the seventeenth 
 century, and in the eighteenth as well, was mainly barter. In none of 
 the colonies was there coin enough to use as a medium in the majority 
 of the exchanges. The leading standard coin was the Spanish silver 
 "piece-of-eight," and it was not only of insufficient quantity, but, 
 what was still worse as far as intercolonial trade was concerned, it had 
 diverse ratings in different colonies. As is well known, tobacco was 
 made the medium of exchanges in Virginia and Maryland, and it was 
 almost the only standard of payment available in domestic commerce 
 and in the payment of salaries and public and private obligations. 
 In Massachusetts "country pay" in commodities at fixed rates of 
 exchange was adopted to facilitate domestic trade. 
 
 The serious handicap put upon trade by the scarcity of coin, and the 
 extreme difiiculty of raising public funds, especially for military pur- 
 poses, seemed to necessitate the issue of paper money. Fortunately, 
 however, most of the experiments in credit money were postponed until 
 the eighteenth century, although Massachusetts resorted to the issue 
 of bills as early as 1690 to aid in financing Phips's expedition against 
 Quebec. Other colonies followed the lead of Massachusetts, from time 
 to time, with the disastrous results that always accompany attempts 
 to give money value to promises to pay. 
 
 The ethics of trade and commercial life in America, as elsewhere, 
 left much to be desired at the close of the seventeenth century. Moral 
 
Development of American Commerce, 1660 to lyoo. 83 
 
 standards tolerated the slave trade, excused smuggling, looked with 
 favor upon privateering, and scarcely condemned piracy. The diffi- 
 culties of merchants and others in enforcing contracts and securing 
 the payment of debts were another evidence of the persistence of the 
 primitive morals of trade. 
 
 Piracy died hard, but the eighteenth century saw it end among 
 the people of civilized countries, although it was after the opening of 
 the nineteenth century that Europe ceased to tolerate it on the part 
 of the inhabitants of the Barbary States. In 1700 and for some time 
 thereafter the pirate ship was a welcome visitor at many American 
 ports, and colonial officials were disposed to be considerate in their 
 treatment of pirates, because they were liberal buyers of provisions 
 and ship-stores, for which they paid good coin. The stringent law 
 against piracy, passed by Parliament in 1698, was much needed, 
 although its enforcement proved impracticable during the war of the 
 Spanish Succession (1702-13), the days of the famous Captain Kidd. 
 By 1720, however, the pritish navy had successfully driven the black 
 flag from the ports of civilized nations and greatly restricted its ravages 
 on the high seas. 
 
 It will, of course, not do to apply the rigid ethical standards of the 
 present to the commerce of two centuries past. Indeed, there is yet 
 much to be accomplished. The international slave trade persisted 
 until long after the opening of the nineteenth century, and the domestic 
 traffic in human beings ceased as late as 1865. Smuggling has always 
 been, and still is, a besetting sin of Anglo-Americans, and probably of 
 other peoples. Privateering is not now thought right; but naval 
 vessels still make prizes of private shipping in times of war, as was the 
 case in the recent war of the United States with Spain, and is the 
 practice on a large scale in the present terrible conflict in Europe. 
 
 In no other fields of endeavor were the colonists more successful 
 during the first century of their new-world life than in commerce; 
 nor were there any other pursuits that made a stronger or more lasting 
 impress upon American character than did the trading and the sea- 
 faring life of the merchants, mariners, and fishermen of the northern 
 colonies. The plantation did much to' "mold the character of the 
 southern colonists; and the ocean, and the aff"airs of commerce had 
 almost as much influence in deiprmining the type of the New England 
 Yankees. In the middfe colonies, where both the agricultural and the 
 maritime callings received about equal emphasis, a type of man 
 developed intermedi^e between the trader and the planter. Racial 
 types, it is quite true, are determined by more complex causes than this 
 enumeration suggests; but the eff"ect of economic occupation upon 
 character is strong and unmistakable; and this was especially true of 
 the influence which commerce had upon the people of America during 
 the seventeenth and eighteenth centuries. 
 
CHAPTER VI. 
 EIGHTEENTH CENTURY TO THE OUTBREAK OF THE REVOLUTION. 
 
 Effect of wars upon progress of American commerce, 84. Estimated popula- 
 ~ tion of the colonies in 1700 and 1760, 85. General industrial and commercial 
 changes from 1700 to 1775, 86. The value and growth of the commerce of the 
 colonies, (a) with Great Britain, 88, {h) with sections of world outside of Great 
 Britain, 90. Value and distribution of trade of colonies in 1769, 92. Trade with 
 the West Indies, 93. The Sugar Act of 1733 and its slight effect, 95. Illegal trading 
 of the colonies during the Seven Years' War, 96. The illegal trade with the French 
 at Monte Cristi, 98. Trade with West Indies after 1763, 99. The African slave 
 trade, 100. Causes of the slave trade, 102. Commerce from the Peace of Paris to 
 the Declaration of Independence, (a) value of exports and imports, 105, (5) pros- 
 perity of whaling and other fisheries, 106. Great Britain's bounties on hemp, masts, 
 indigo, and naval stores, 106. Failure of British taxes on commerce of the colonies, 
 107. Monetary conditions as affecting commerce in the eighteenth century, 108. 
 Summary, no. Sources of statistical information concerning American colonial 
 commerce, 112. Documentary sources and other references, 113. Statistics of 
 exports from the colonies in 1770, 118. Statistics of the trade between Great 
 Britain and the colonies, 1697 to 1776, 120. 
 
 The development of American commerce during the larger part 
 of the eighteenth century took place under conditions that would 
 to-day render international trade almost impossible; but, in spite of 
 adverse circumstances, there was large and almost continuous progress. 
 Had Great Britain been disposed^ and had she been able, to enforce 
 strictly the Acts of Trade, the commerce of her colonies must neces- 
 sarily have been seriously hampered^ mainly because the growth 
 of the West Indian trade would Jiave been checked; but serious effort 
 to enforce those acts was postponed until within about a decade of the 
 Revolution, and the attempt even then was largely unsuccessful. 
 Indeed, the dozen years intervening between the peace of Paris and the 
 battle of Lexington were the years during which the colonial trade 
 reached its maximum value. 
 
 Four prolonged wars interfered with the peaceful progress of Ameri- 
 can commerce during the first sixty-three years of the century. The 
 desperate struggles of European countries for political and commercial 
 leadership were inevitably shared in large measure by the American 
 colonies of Spain, France, and England, with the result that the ocean 
 commerce of the colonies was for considerable periods of time subjected 
 to the risks of warfare, privateering, and its natural accompaniment, 
 piracy. The last and the most epoch-making of the four conflicts — 
 the seven years war in Europe, called the French and Indian War in 
 America — ^was, as far as England and France were concerned, a struggle 
 for supremacy in India and America. It involved the colonies in 
 active war; indeed, it was the victories of the British and colonial 
 forces over the French in America that compelled France to turn over 
 her vast possessions in America and India to Great Britain and to the 
 shaping influences of British civilization. 
 84 
 
Eighteenth Century to Outbreak of the Revolution. 85 
 
 Such a struggle as Queen Anne's War or the French and Indian 
 War, if it were to occur to-day, when industry is organized with refer- 
 ence to a world market, and when the commercial interests of nations 
 are so integrated and so sensitive as to cause every part of commerce 
 to feel the shock of a blow received by any portion or section of the 
 world's industry and trade, would have temporarily crippled American 
 commerce; but the eflPect of these wars upon the industrial welfare of 
 the colonies was in reality relatively sHght. Production was carried 
 on mainly to supply local markets; and although their commerce, 
 which was largely maritime, was subjected to special dangers while 
 the great commercial nations of Europe were at war, yet the colonial 
 merchants continued to take the risks and to carry on an extensive 
 trade, not only at friendly ports, but, either directly or indirectly, with 
 the necessitous merchants of hostile countries. 
 
 The small sailing-vessels of the eighteenth century could make their 
 way quietly from port to port without attracting the attention which 
 is given the huge ocean ships of to-day, whose movements and where- 
 abouts are heralded the world over by cable and telegraph and are 
 recorded in all the large shipping centers. "The perils of the sea" 
 were very real in the eighteenth and earlier centuries, and the merchant 
 vessel was armed to defend itself against the attacks of pirates and 
 privateers as well as against the men-of-war of hostile nations. The 
 ship-master's dangers were increased by the outbreak of war; but he 
 ordinarily did not decide to leave the sea; he preferred to continue 
 to trade, and he merely sought to take a route as far as possible from 
 known enemies. Thus it was that the maritime commerce of the 
 colonies could prosper as much as it did from 1700 to 1763, although 
 war prevailed during more than a third of the period. 
 
 That the colonies made steady and substantial progress during the 
 first three-fourths of the eighteenth century, both industrially and as 
 regards their maritime commerce, is an undoubted fact, although 
 accurate statistical information is meager. ' A general measure of the 
 advance made is afforded by the growth in population from 250,000 
 or 300,000 persons, black and white, in 1700, to about 1,600,000 
 in 1760 — a five-fold or 500 per cent increase. The population could 
 hardly have doubled each 25 years on an average and have been six 
 times as numerous at the end as at the beginning of the period unless 
 there had been nearly continuous prosperity. This rate of increase 
 would not have been maintained if prosperous conditions had not 
 attracted immigration and permitted a rapid natural increase in popu- 
 lation. In none of the colonies was a census of population taken, and 
 it is thus impossible to state exactly what the population of the colonies 
 was, either at the beginning of the eighteenth century or in 1760. A 
 careful estimate of the population of the colonies has been made by 
 Mr. FrankHn B. Dexter,^ and upon the basis of Mr. Dexter's studies, 
 
 •"Estimates of Population," in Proceedings of American Antiquarian Society, 1887. 
 
86 
 
 History of Domestic and Foreign Commerce. 
 
 Mr. J. A. Doyle^ estimates that in 1720 the population of the colonies^ 
 as a whole, included 339,000 whites and 96,000 blacks, a total of 43 5,000. 
 The population of the colonies in 1760, according to the estimate of 
 Professor Edward Channing,^ "based upon the correlation of multi- 
 tudinous figures taken from many sources," was as follows: 
 
 Table 2. — Estimated population of the colonies in lj6o. 
 
 
 Total. 
 
 White. 
 
 Black. 
 
 New England colonies 
 
 Middle colonies 
 
 473,000 
 405,000 
 718,000 
 
 1 878,000 
 718,000 
 
 791,000 
 419,000 
 
 87,000 
 299,000 
 
 
 Total , 
 
 1,596,000 
 
 1,596,000 
 
 1,210,000 
 
 386,000 
 
 'Maryland, Virginia, North Carolina, South Carolina, and Georgia. 
 GENERAL INDUSTRIAL AND COMMERCIAL CHANGES FROM 1700 TO T775. 
 
 Few important changes occurred in the industrial activities of the 
 colonies during the eighteenth century. Their industries, and con- 
 sequently their commerce, were nearly as simple, both in organization 
 and in the range of commodities produced, as they had been in the 
 seventeenth century. Fur trading naturally declined as settlement 
 proceeded, while the forest resources yielded relatively less and agri- 
 culture an increasingly greater share of the wealth produced. Indeed, 
 the development and diversification of agriculture is the most salient 
 fict regarding the industrial progress of the American colonies. This 
 is, of course, what would be expected in a new country that was being 
 settled and brought under cultivation. The colonists were first of 
 all and chiefly engaged in farming, and because of this fact they had 
 an extensive external commerce by means of which they sold their 
 surplus abroad in exchange for goods not produced at home. 
 
 The inference to be drawn from the above generaHzation is not 
 that many new agricultural products were introduced, but rather that 
 in several, although not all, of the colonies a greater range of crops was 
 grown. The introduction of indigo into South CaroHna in 1741 or 
 1742 was an exceptional instance of the addition of a valuable agri- 
 cultural staple. Indigo was not included by Great Britain in the list 
 of "enumerated" articles, hence its foreign market was unrestricted j 
 and in 1748 Parliament granted a bounty of sixpence a pound on all 
 indigo imported into Great Britain from America. Ih that year, 
 six years after its, culture began, indigo accounted for one-tenth of 
 the total value of the exports of South Carolina. Upon the outbreak 
 of the Revolution nearly three-fourths of the British iniports of indigo 
 came from CafoHna. 
 
 While Virginia continued throughout the colonial period to adhere 
 closely to tobacco^:ulture, Maryland raised not only tobacco, but alsa 
 
 ^English Colonies in America, V, 484. 
 
 ^History of the United States, II, 491. 
 
Eighteenth Century to Outbreak of the Revolution. 87 
 
 an increasing quantity of wheat, by which the local demand was sup- 
 plied Tind a surplus amounting to 60,000 bushels per annum during the 
 years immediately preceding the Revolution was exported, mainly 
 from Baltimore. The development of cereal agriculture was most rapid 
 in the Delaware basin, and Philadelphia became the leading grain and 
 flour export center in the colonies, while the agricultural resources of 
 the Hudson and Mohawk Valleys gave New York a rank second only 
 to Philadelphia as a shipping point for grain, flour, and breadstuff's. 
 
 As stated above,^ manufacturing in the colonies not only was limited 
 mainly to the household stage of production, but also was kept within 
 narrow bounds by the small supply of capital and by the fact that 
 greater profits were obtainable from agriculture and commerce. Great. 
 Britain feared that the colonial manufactures of woolen goods, hats, 
 and iron might limit the market for British goods, both in the colonies 
 and elsewhere; but the stringent prohibitions upon these classes of 
 manufactures in the colonies were probably more vexatious to the colo- 
 nies than of revolutionary eflFect upon their industries. The southern 
 planters made no eff"ort to do more than to supply their plantations 
 with such tools and fabrics as the slaves could make; and, while it is 
 true that the people of New England, and to a less degree those of the 
 middle colonies, sought to supply their local needs more and more 
 fully as the eighteenth century advanced, their imports of manufactures 
 continued to increase up to the eve of the Revolution. Colonial 
 exports contained few manufactures other than rum, foodstuff's, forest 
 products, and ships. 
 
 The industrial development of the colonies during the first two-thirds 
 of the eighteenth century did not occasion any revolution in their 
 external trade. Commercial expansion resulted chiefly from an 
 increased export of a few staples, mainly agricultural products and fish, 
 and the consequent larger purchase of foreign manufactures and tropi-^ 
 cal products. Tobacco was the staple that led all others in valuei 
 and it, supplemented by rice» indigo, and naval stores, caused th^ 
 southern colonies to outrank the northern in volume and value of 
 exports. In the middle colonies the increasing cultivation o'f cereals ; 
 gave an expanding export of grain, flour, and biscuits, and made pos- ' 
 sible the growth and shipment of animals and meat products. In 
 New England, as formerly, fish, rum, lumber, ship materials, and ships , 
 comprised a large share of the outbound trade; but animals and other \ 
 farm products made up an important contribution to the total. 
 
 Xikewise the import trade of the colonies followed, m the mam, 
 the lines of its ea^ly development. The commerce with the West 
 Indies became of increasing importance.to the central and northerri 
 colonies as the eighteenth century advanced, and grew to be so essential 
 to their prosperity that the attempted enforcement of^the Sugar Act 
 
 iSee chap. iii. p. 45. 
 
88 History of Domestic and Foreign Commerce. 
 
 by Great Britain after the French and Indian War led quickly to an 
 open and determined revolt of the colonists against the mother country. 
 The intercolonial trade, unlike the trans-Atlantic and West Indian 
 commerce of the colonies, did not greatly increase. The southern 
 colonies traded directly and mainly with Europe, the only exceptions 
 being that a minor share of their exports and imports was handled 
 by New England merchants via the ports of New England, and that a 
 part of the plantation suppHes was furnished by the farmers and fisher- 
 men of the middle and northern colonies. The merchants of the] 
 middle colonies, as has been explained, traded with theWjest Indies andi 
 the home country, but had only a small share in the coastwise traffic! 
 The New England traders, as leaders in ship-building and in the West 
 Indian commerce, handled most of the coastwise commerce; but, for 
 reasons elsewhere considered,^ the economic necessity for a large 
 intercolonial trade did not exist; and such development as might 
 naturally have resulted from the growth of the colonies was hindered 
 by the restrictive customs duties, shipping laws, and retaliatory 
 measures which the jealousies and commercial rivalries of the politically 
 dissociated colonies caused them severally to adopt. 
 
 VALUE AND GROWTH OF THE COMMERCE OF THE COLONIES. 
 
 The value of the commerce of the colonies during' the eighteenth 
 century prior to the Revolution and its rate of growth are illustrated 
 in part by the figures presented by Burke in his memorable speech 
 upon "Conciliation with America." The facts presented by Burke 
 include the trade of Great Britain wjth her American colonies, both 
 insular and continental, but do not give the value of the large imports 
 into the continental colonies from the West Indies, and the value 
 of the less important purchases from southern Europe and Africa. 
 In spite of these limitations, Burke's statements are instructive. 
 
 "The trade to the colonies, taken on the export side, at the beginning of 
 this century, that is, in the year 1704, stood thus:* 
 
 Exports to North Ajnerica and the West Indies £483,265 
 
 To Africa 86, 665 
 
 £569,930 
 
 "In the year 1772, which I take as a middle year between the highest and 
 lowest of those lately laid on your table, the account was as follows : 
 
 To North America and the West Indies £4, 791 , 734 
 
 To Africa 866,398 
 
 To which if you add the export trade of Scotland 
 
 which had (in 1704) no existence 364, 000 
 
 £6,022,132 
 
 •See chap. x. 
 
 'The figures cited by Burlce were said by him to have been taken, for 1704, from the original 
 manuscript of Davenant, the first incumbent of the Inspector-General's office; the figures for 
 1772 "from official accounts kept tor the information of Parliament." 
 
Eighteenth Century to Outbreak of the Revolution. 89 
 
 . "From five hundred and odd thousand it has grown tolix miUions. It has 
 increased no less than twelve-fold {sic). This is the state of the colony trade, 
 as compared with itself at these two periods within this century; and this is 
 matter tor meditation. But this is not all. Examine my second account, 
 bee how the export trade to the colonies alone in 1772 stood in the other point 
 ot view, that is, as compared to the whole trade of England in 1704: 
 
 The whole export trade of England, including that 
 
 to the colonies in 1704 £6,509,000 
 
 Export trade to the colonies alone, in 1772 6,022,000 
 
 Difference £487,000 
 
 "The trade with America alone is now within less than £500,000 of being 
 equal to what this great commercial nation England carried on at the begin- 
 ning of this century with the whole world!" 
 
 Burke further emphasized the growth of the export trade of Great 
 Britain to her American colonies by referring to the trade of Penn- 
 sylvania: "In the year 1704, that province called for £11,459 in value 
 of your commodities, native and foreign. This was the whole. What 
 did it demand in 1772? Why nearly fifty times as much; for inT:hat 
 year the export to Pennsylvania was £507,909, nearly equal go the 
 export to all the colonies together in the first period." 
 
 As was stated in the preceding chapter, the statistical information 
 regarding colonial commerce is incomplete. The scope and limita- 
 tions of the data obtainable from documentary and other sources 
 are considered at length in the bibliographical note at the end of this 
 chapter. A detailed table of the value of the trade between Great 
 Britain and the American colonies from 1697 to 1776 is presented in 
 table 8, appended to this chapter. A summary statement of the 
 growth of Great Britain's trade, decade by decade, from 1700 to 1780, 
 with the American continental colonies that became the United States, 
 is made in table 3.^ 
 
 Table 3. — Imports jrom and exports to that part of America now the United States, 
 Annual average per decade from lyoo to 1780. 
 
 
 n Imports. 
 
 Exports. 
 
 Average from 1700 to 1710 
 
 1710 to 1720 
 
 1720 to 1730 
 
 1730 to 1740 
 
 1740 to 1750 
 
 1750 to 1760 
 
 1760 to 1770 
 
 1770 to 1780 
 
 £ s. d. 
 265,783 10 
 392,653 17 i 
 518,830 16 6 
 670,128 16 
 708,943 9 6 
 802,691 6 lb 
 1,044,591 17 6 
 743,560 10 10 
 
 £ s. d. 
 26.7,205 3 4 
 365,645 7 llf 
 471,342 12 10 
 660,136 11 11 
 812,647 13 0\ 
 1,577-419 16 2i 
 l,76i^409 10 3 ' 
 1,331,206 1 5 
 
 \ 
 
 'This table is a copy of Appendix IX (24) of Lord Sheffield's volume Observations on the Com- 
 merce of the American Stales. I have used the sixth edition, published in London, 1784. While, 
 in general, Lord Sheffield's statements and figures are not reliable, this table, compiled from official 
 statistics, is presumably correct. Lord Sheffield, in this particular instance, would not be dis- 
 posed to make the figures any larger than the facts allowed. I have elsewhere called attention to 
 the probable undervaluation of commodities by the customs officers. 
 
90 
 
 History of Domestic and Foreign Commerce. 
 
 The figures quoted above from Burkg. included the value of Great 
 Britain's export trade to all of North America and to the British 
 West Indies, while those from Sheffield in table 3 refer solely to the 
 colonies that became the United States. The relatively great value of 
 the commerce of England with her "sugar islands" — British export 
 trade with those islands normally exceeding that to the colonies on the 
 continent of America — readily explains why the mother country was 
 more soHcitous for the welfare of the West Indian than for the conti- 
 nental colonies. Sheffield's table shows that until the fifth decade of 
 the eighteenth century Great Britain's imports fromjthe American 
 colonies exceeded in value her exports thence, ^nd that there was a large 
 increase in the colonial market for British goods during the sixth and 
 seventh decades, the two decades whose medial years were taken up 
 by the French and Indian War, when Great Britain was both supplying 
 the colonial markets and supporting the British troops that were fight- 
 ing for- the possession of Canada and the^ Mississippi country. It 
 was the expanding trade of the colonies with the West Indies that 
 enabled the colonists to buy so much more of Great Britain thaa,they 
 sold to her. According to Sheffield, as shown by table 4, the value of 
 the exports from Great Britain to the "American States" from 1700 to 
 1773 exceeded the value of the imports hence by £20,193,568.^ 
 
 Table ir— Balance of British exports to and imports from the American Colonies from 1700 to 1773. 
 
 
 Excess of exports. 
 
 Excess of imports. 
 
 
 £ J. d. 
 13,896,287 17 4j 
 
 16,941,281 9 4| 
 
 £ s. d. 
 
 New York, New Jersey, and Pennsylvania, 
 including Delaware counties.-, 
 
 
 
 
 30,837,569 6 9 
 
 8,153,363 11 5i 
 2,611,671 13 10 
 
 
 
 
 123,034 9 7 
 
 Excess of exports to the provinces north of 
 Maryland 
 
 
 30,960,603 16 4 
 
 10,767,035 S 3i 
 *20,193,S68 11 Oj 
 
 Balance or excess of exports to America over 
 
 
 
 ♦This excess of exports of the southern colonies was probably more than balanced by the number 
 of slaves annually imported there by British merchants from Africa. 
 
 ' The trade of the continental colonies of America with sections of the 
 world outside of Great Britain — ^with the British and foreign West 
 Indies, Nova Scotia, and Newfoundland, the continent of Europe, and 
 with Africa — naturally grew in importance with the industrial and corri- 
 mercial progress of the colonies. Toward the close of the colonial 
 
 'See Observations on the Commerce of the American States (6th ed.), 233, where table 4 is given. 
 
Eighteenth Century to Outbreak of the Revolution. . 91 
 
 period the Americans secured nearly 40 per cent of their imports and 
 sold about 45 per cent of their exports by trading directly with sections 
 other than Great Britain. If their indirect trade with the continent 
 ot iLurope by way of England were included, these percentages, par- 
 ticularly the export percentages, would be appreciablylarger. 
 
 Details regardmg the trade of the colonies with countries and sec- 
 tions other than Great Britain are available for the five years^beginning 
 with 1768 The second of these five years, 1769, which came midway 
 between the Peace of Baris and the opening of the Revolution, may be 
 selected as one fairly representing the trade conditions prevailing 
 dunng the latter part of the colonial period. The colonial imports 
 reached their maximum twe-yeaF&4ater, when Great Britain sent a 
 large volume of supplies to New England to maintain her regiments; 
 and the exports from the colonies attained the highest point in 1775, 
 when the opening of hostilities and the certainty of war must have 
 caused American producers to sell as much as possible before British 
 warships and privateers made commerce impossible^ on the high seas; 
 but the conditions of American trade in the seventies were so clearly 
 abnormal that the year 1769 may well be taken for analysis. 
 
 The volume of the commerce of the colonies in 1769, and its terri- 
 torial distribution, are roughly measured by the registered tonnage of 
 the vessels that entered and cleared at the American ports during 
 that year. The figures are presented in table 5.^ 
 
 The tonnage of traffic carried was about 50 per cent greater than 
 the vessel tonnage.^ This would indicate that the cargo tonnage of the 
 colonial imports in 1769 amounted to nearly 500,000 tons and that of 
 the expor.ts to somewhat more than 500,qoo, the total trade being equal 
 to 1,000,000 tons of commodities. Although this figure is only an 
 estimate, it probably is a fairly accurate one. 
 
 The value of this million cargo tons of commerce in 1769 and the 
 distribution of the maritime trade of each colony among the different 
 sections of the world are shown by table 6.* 
 
 'For explanation of this consult Note 1 on the Statistical Sources appended to this chapter. 
 
 ^This table is constructed from parts of two tables in Macpherson's Annals of Commerce, III, 
 570 and 571. Macpherson speaks of this table and of the other I have reproduced below as 
 "accounts copied from those of the customs house." His source of information would be the 
 Ledger of Imports and Exports, America, 1768-72, to which reference is made in note 1 at the 
 end of this chapter. As this table appears in Macpherson's work, however, the tonnage of 
 entrances here given as from Southern Europe and Africa is given as from the West Indies, 
 and that from the West Indies as from Southern Europe and Africa. There is little doubt but 
 that these two columns were in some manner interchanged, as there is no reason for the enor- 
 mous disparity between the entrances from, and clearances to, these two regions, such as Mac- 
 pherson's table shows. The best proof that an error was made is that in the table for 1770, which 
 Macpherson also gives, there is no great difference in the entrances and clearances. Furthermore, 
 it is not likely that in 1769 it would take 94,916tons of shipping to carryimports from Southern 
 Europe and Africa, valued at only £228,682, while the exports thither, with a value of £573,014, 
 required a tonnage of only 42.601. 
 
 'This is the estimate made by Macpherson, who takes for his authority Thomas Irving, who was 
 "Inspector-General of Imports and Exports of North America and Register of Shipping." This 
 ratio of gross register and cargo tonnage is the one that obtains to-day in ocean commerce. 
 
 ^Macpherson, Annals of Commerce, III, 571. 
 
92 
 
 History of Domestic and Foreign Commerce. 
 
 Table S. — Grosf registered tonnage of the vessels entered and cleared at 
 
 the ports of each colony in 1769 
 
 _ 
 
 Colony. 
 
 1 
 
 Entered from — 
 
 Cleared to — 
 
 Great 
 Britain 
 
 and 
 Ireland. 
 
 Southern 
 parts of 
 Europe 
 
 and 
 Africa. 
 
 British 
 
 and 
 foreign 
 West 
 Indies. 
 
 Conti- 
 nent of 
 America, 
 Bahamas, 
 etc. 
 
 Totals. 
 
 Great 
 Britain 
 
 and 
 Ireland. 
 
 Southern 
 parts of 
 Europe 
 
 and 
 Africa. 
 
 British 
 
 and 
 foreign 
 West 
 Indies. 
 
 Conti- 
 nent of 
 America, 
 Bahamas, 
 etc. 
 
 Totals. 
 
 New Hampshire. 
 Massachusetts... 
 Rhode Island . . . 
 Coimecticut .... 
 New York 
 
 915 
 
 14,340 
 
 415 
 
 ISO 
 
 5,224 
 
 480 
 6,595 
 
 226 
 
 105 
 
 2,730 
 
 25 
 
 10,745 
 
 4,095 
 
 4,600,. 
 
 700 
 3,325 
 
 525 
 
 9,500 
 
 17,898 
 
 5,958 
 
 7,790 
 
 6,964 
 
 257 
 
 12,521 
 
 4,533 
 
 11,612 
 
 6,702 
 
 6,893 
 
 4,288 
 
 5,551 
 
 27,618 
 
 10,237 
 
 9,971 
 
 11,714 
 
 654 
 
 12,453 
 
 6,574 
 
 10,373 
 
 9,259 
 
 5,608 
 
 2,357 
 
 16,446 
 66,451 
 16,836 
 18,016 
 26,632 
 936 
 45,028 
 30,688 
 47,237 
 23,076 
 31,107 
 9,693 
 
 2,822 
 
 14,044 
 
 540 
 
 SSO_ 
 
 6,470 
 
 170 
 5,102 
 
 863 
 
 200 
 
 3,483 
 
 12,878 
 
 17,532 
 6,060 
 
 -9^201 
 
 5,466. 
 
 5SS 
 
 11,959 
 3,358 
 
 11,397 
 6,945 
 6,377 
 4,654 
 
 3,874 
 
 26,988 
 
 10,312 
 
 ' -7,9SS 
 
 11,440 
 
 538 
 
 11,738 
 
 5,298 
 
 . .8,531, 
 
 7,333 
 
 5,803 
 
 1,358 
 
 19,744 
 63,666 
 17, ns 
 ^7^966 
 26,859 
 1,093 
 
 Pennsylvania. . . 
 
 Maryland 
 
 Virginia 
 
 North Carolina. . 
 South Carolina. . 
 Georgia 
 
 9,309 
 15,486 
 20,652 
 
 6;4iS 
 15,281 
 
 2,523 
 
 7,219 
 16,116 
 24., 594 
 
 7,805 
 15,902 
 
 3,029 
 
 12,070 
 6,224 
 7,486 
 1,030 
 5,773 
 200 
 
 42,986 
 30,996 
 52,008 
 23,ii3 
 33,855 
 9,241 
 
 Total 
 
 90,710 
 
 34,151 
 
 94,916 
 
 112,369 
 
 332,146 
 
 99,121 
 
 42,601 
 
 96,382 
 
 101,198 
 
 339,302 
 
 Table 6. — Value in pounds sterling of the imports and exports of the several colonies, 1769. 
 
 IMPORTS. 
 
 Colony. 
 
 Great Britain. 
 
 South of Europe. 
 
 West Indies. 
 
 Africa. 
 
 Total. 
 
 New Hampshire.. 
 Massachusetts . . . 
 Rhode Island .... 
 
 Connecticut 
 
 New York 
 
 £ s. d. 
 
 \ 223,695 11 6 
 
 75,930 19 7 
 
 £ i. d. 
 
 1 652 7 6 
 
 j 21,908 S 6 
 
 ) 2,580 19 6 
 
 [ 267 5 3 
 
 14,927 7 8 
 
 326 18 2 
 
 14,249 8 4 
 
 / 4,683 2 3 
 
 \ 9,442 2 4 
 
 / 932 19 9 
 
 \ 6,166 6 1 
 
 547 7 7 
 
 £ s. d. 
 
 48,528 18 7 
 
 155,387 1 4 
 
 56,839 17 3 
 
 53,993 17 3 
 
 97,420 4 
 
 1,663 19 9 
 
 180,591 12 4 
 
 32,197 13 9 
 
 77,453 12 6 
 
 10,603 13 3 
 
 65,666 4 8 
 
 9,407 9 9 
 
 £ i. d. 
 180 
 697 10 
 
 £ J. d 
 
 564,034 3 8 
 
 188,976 1 3 
 
 1,990 17 11 
 
 399,820 18 
 
 } 851,140 6 6 
 
 1 535,714 2 3 
 81,735 16 8 
 
 Pennsylvania .... 
 
 Maryland 
 
 Virginia 
 
 204,979 17 4 
 1 714,943 15 8 
 
 1 327,084 8 6 
 58,340 19 4 
 
 
 5,400 
 
 7,020 
 
 1,080 
 
 124,180 10 
 
 13,440 
 
 North Carolina. . . 
 South Carolina. . . 
 Georgia 
 
 Total 
 
 1,604,975 11 11 
 
 76,684 9 11 
 
 789,754 4 5 
 
 151,998 
 
 2,623,412 6 3 
 
 EXPORTS. 
 
 New Hampshire. . 
 Massachusetts . . . 
 Rhode Island .... 
 
 Connecticut 
 
 New York 
 
 New Tersev. . .T . . 
 
 £ s. d. 
 
 \ 142,775 12 9 
 
 113,382 8 8 
 
 £ s. d. 
 r 464 5 
 j 76,702 4 
 ] 1,440 11 
 [ 2,567 4 5 
 50,885 13 
 
 £ s. d. 
 40,431 8 4 
 
 123,394 6 
 
 65,206 13 2 
 
 79,395 7 6 
 
 66,324 17 5 
 
 2,531 16 5 
 
 178,331 7 8 
 22,303 9 2 
 68,946 9 1 
 27,944 7 9 
 59,814 11 6 
 13,285 IS 1 
 
 £ J. d. 
 
 96 11 3 
 
 9,801 9 10 
 
 7,814 19 8 
 
 £ 5. d. 
 [ 550,089 19 2 
 
 231,906 1 7 
 
 2,531 16 5 
 
 410,756 16 1 
 
 1,313 2 6 
 
 Pennsylvania. . . . 
 
 Maryland 
 
 Virginia 
 
 28,112 6 9 
 1 759,961 5 
 
 1 405,014 13 1 
 82,270 2 3 
 
 203,752 11 11 
 / 66,555 11 11 
 \ 73,635 3 4 
 / 3,238 3 7 
 \ 72,881 9 3 
 614 2 
 
 560 9 9 
 
 
 991,401 18 6 
 
 1 569,584 17 3 
 
 96,169 19 4 
 
 North Carolina. . . 
 South Carolina. . . 
 Georgia 
 
 71 IS 4 
 619 16 9 
 
 Total 
 
 
 1,531,516 8 6 
 
 552,736 11 2 
 
 747,910 3 7 
 
 20,278 5 1 
 
 2,852,441 8 4 
 
Eighteenth Century to Outbreak of the Revolution. ' 93 
 
 Table 6 gives an instructive general picture of the trade of th^ 
 colonies. Nelar the close, as in the earlier part of the colonial period, 
 Maryland, Virginia, and the Carolinas were devoted to industries more 
 dependent upon maritime commerce than were the industries of other 
 sections. The trade of these four colonies accounts for over half of the 
 imports and exports of all the colonies. The commerce of the five 
 southern colonies was mainly with the mother country — in the case of 
 Virginia and Maryland nearly seven-eighths, and in the case of the 
 Carolinas three-fifths of the imports came from Great Britain. About 
 seven-ninths of the exports from Virginia and Maryland and five- 
 sevenths of those from the Carolinas went to Great Britain. Georgia 
 made nearly two-thirds of her purchases and over five-sixths of her 
 sales in the home country. New England, on the contrary, secured 
 only two-fifths of her imports from Great Britain, her purchases in the 
 West Indies being of greater value. As regards the exports, the dis- - 
 tribution of New England's trade was even more striking, her ship- 
 ments to Great Britain being only one-fourth of the total, while those 
 to the West Indies comprised five-ninths. Likewise, New York's 
 imports from the West Indies exceeded in value those from Great 
 Britain, and of her total exports less than half were sent to the mother 
 country. The distribution of the export trade of Pennsylvania is 
 especially interesting. Comparatively little of her exports went to 
 Great Britain, a large share, nearly half of the total, being sent to South 
 Europe, where there was a good market for grain, flour, and provisions. 
 
 During the year covered by table 6, the colonies as a whole derived 
 61. 1 per cent of the total value of imports from Great Britain, 2.9 
 per cent from Southern Europe, 30.1 per cent from the West Indies, 
 and 5-7 per cent from Africa. Of the value of their total exports,; 
 53.6 per cent went to Great Britain, 19.3 per cent to Southern Europe,- 
 26.1 per cent to the West Indies, and 0.07 per cent to Africa. 
 
 Table 7, appended to this chapter upon pages 118 and 119, gives the 
 quantity, value, and foreign distribution of each class of commodities 
 from the colonies during 1770. Tobacco, of course, led all the other 
 products in value, the second place being held by bread and flour, the 
 third by fish, the fourth by rice, after which came whale oil and "fins," 
 lumber in various forms, and wheat. The greater part of the total value 
 consisted of the products of the sea, the farms, and the forests. Only 
 small beginnings had been made in the exportation of iron, and the 
 exported manufactures consisted almost entirely of foodstufi^s and forest 
 products. /The transit trade of the colonies, made up of reexported 
 tropical products, amounted to 2.5 per cent of the total. 
 
 TRADE WITH THE WEST INDIES. 
 
 Numerous references have been made in the preceding pages to the ^ 
 
 trade of the colonies with the West Indies and to its relation to the 
 
 commerce with the mother country. This trade of the middle and 
 
 northern colonies with the tropical or "sugar islands" was of funda- 
 
94 History of Domestic and Foreign Commerce. 
 
 mental importance to the commerical activities of the more northerly 
 colonies and to the industrial life of all the colonies. A study of the 
 West Indian trade is necessary to a knowledge of American colonial 
 commerce. 
 
 Table 7 appended to this chapter shows that the colonial exports 
 to the British and foreign West Indies at the close of the colonial period 
 included a wide range of articles, their total value for 1770 being 
 £844,178. Fish, Indian corn, wheat and flour, lumber, and live 
 animals account for most of the value. The imports from the West 
 Indies during the same year were appraised at £949,656, or £105,478 
 more than the exports. Over half of the total value of the imports was 
 accounted for by the rum which came from the British islands. Molas- 
 ses ranked next to rum, and of the £186,200 imported, less than 7 per 
 cent came from the British islands. The sugar imports were valued at 
 £168,000, and all but £49,000 worth of the sugar was from British 
 ports. Rum, molasses, and sugar made up four-fifths of the value of 
 the imports from the West Indies, and more than two-thirds of these 
 articles came from the British islands. However, the trade of the 
 American continental colonies with the foreign West Indies, although 
 of less value than that with the British islands, was of almost equal 
 importance to the American colonies, because, as we,^hail-prfeS8ntlyisee, 
 it was a necessary supplement and complement to the trade with the 
 British islands. 
 
 The trade of the northern colonies with the West Indies was carried 
 on regularly after the middle of the seventeenth century, and it natu- 
 rally developed with the progress of the continental colonies and with 
 the growth in the volume of their imports from Europe. The early 
 trade was with the British West Indies, but later the industrial progress 
 of the Dutch and more particularly of the French islands, gave rise to a 
 commerce with them. The opportunity for trading with the French 
 islands was especially favorable for the continental colonies, because 
 of the unwise restrictions that France placed upon her trade with 
 her colonies. In 1668, the French West India Company was granted 
 a trade monopoly. Later the law was passed that prohibited the reex- 
 portation from France of the raw sugar imported from her colonies. 
 The theory upon which this mistaken policy rested was that France 
 ought not to supply her enemies with food. The importation of rum 
 into France was also forbidden for the purpose of protecting French 
 ybrandies from competition. Thus it came about that the price of 
 sugar was often lower in the French than in the British West Indies, 
 and that molasses could be bought at a very low price in the French 
 islands, where, in the early part of the eighteenth century, it was at 
 times actually thrown away as a waste product. The non-British 
 islands, moreover, not only had export products to sell cheaply, but they 
 also needed, although in much less quantity than did the British islands, 
 
( Eighteenth Century to Outbreak of the Revolution. 95 
 
 the fish, breadstufFs, live stock, and lumber which the New England and 
 middle colonies could offer in trade. 
 
 Until 1717, when France adopted a more liberal colonial policy, her 
 West Indies made but little progress; then, however, they began to 
 have a good surplus, especially of sugar and molasses, for sale, and they 
 began to compete so actively with the British islands in the trade with 
 the American colonies that the British sugar-planters ere long were 
 urging Parliament to shut the non-British islands out of the commerce 
 with the northern colonies, and the Sugar Act of 1733 was adopted by 
 ParHament in response to this demand. 
 
 During the two years that this measure was under consideration 
 by the British government, the people of New England and the middle 
 colonies sought unsuccessfully to make clear to Parliament what was 
 in reality the fact that any restrictions upon the West Indian-American 
 trade would be of no assistance to the British sugar-planters and would 
 be an injury to both the American continental colonies and to the 
 mother country. The gist of their argument, as paraphrased by Mac- 
 pherson, was ■} 
 
 "As all the sugar, rum and molasses of our sugar isles are taken off at high 
 prices by Great Britain and the northern colonies, it would be very impolitic 
 to obstruct the latter from taking molasses and even rum from the French 
 islands, for the supply of their Indian trade, and much more of their fisheries; 
 seeing our own sugar colonies are unable to supply the great quantity of 
 molasses which those two trades demand; more especially as from the French 
 islands they receive in payment silver and cacao, as well as molasses (but 
 seldom sugar or rum), which silver comes ultimately to Great Britain to pay 
 for the balance of trade; and the northern colonies distill the molasses into 
 rum for the above purposes. 
 
 " By this trade the northern colonies are enabled to make such considerable 
 remittances to England in ready money, as they could procure nowhere else 
 but by their traffic with the foreign colonies, as well as by indigo, cacao, sugar, 
 and rum, both from British and foreign colonies; for enabling them to pay 
 for the great quantities of our manufactures which they yearly take of us." 
 
 However, the sugar-planters had the ear of Parliament, and the 
 act of 1733 placed practically prohibitory duties of 9 pence per gallon 
 upon rum, 6 pence per gallon upon molasses, and 5 shiUings per hundred- 
 weight upon sugar imported into the colonies from the non-British 
 islands. This was never enforced, and doubtless for the reason that the 
 British planters soon came to see that its enforcement would not 
 enlarge their trade with the northern colonies. Channing says: 
 That "no sooner was the act passed than the sugar planters realized 
 tKat it was the prohibition to take their sugars directly to the ports 
 of the European continent that affected them."^ Sugar, it will be 
 recalled, was one of the "enumerated" articles which by the act of 1660 
 could be sold only in the English realm. Upon petition of the planters, 
 
 ^Annals of Commerce, III, 174. '^History cf the United States, II, 521. 
 
96 History of Domestic and Foreign Commerce. 
 
 Parliament, by the acts of 1739 and 1742, took sugar out of the Ust of 
 enumerated commodities, and in 1748 granted an export bounty on 
 sugar refined in Great Britain from the raw product grown in the 
 British plantations, and also allowed a drawback of the full amount of 
 the import duty paid upon the raw sugar. The measures gave the 
 British West Indies the assistance needed, and the act of 1733 was 
 permitted to remain a dead letter. 
 
 During the forty years intervening between the close of Queen 
 Anne's war and the French and Indian War, the trade of New England 
 and the middle colonies with the West Indies developed without seri- 
 ous legislative interference with economic forces. The larger share of 
 the commerce was with the British islands, whose population afforded 
 the best market for the colonial exports and whose industries supplied 
 most of the rum, much of the sugar, and many of the other tropical 
 products bought by the merchants of the northern colonies for sale at 
 home and for transshipment to Europe. Large quantities of molasses 
 and some sugar were regularly obtained in the French islands, rum was 
 purchased from the Dutch, and various tropical products were secured 
 from all the non-British islands, j The total import and export trade 
 of the northern colonies with the several West India islands, British 
 and foreign, was divided up among the islands year by year according to 
 the prevailing conditions of production and prices. 
 
 When the Seven Years' War broke out and England and France 
 entered upon their great struggle for the control of India and America, 
 the commerce of the British colonies in America with the French West 
 Indies ought theoretically to have come to a complete stop. That, 
 however, was not what happened. The colonial merchants, instead 
 of refusing to sell food to the enemies of the mother country in the 
 West Indies, sold them what they needed for their own consumption 
 and for supplying the warships of France. This disloyal action on the 
 part of the American traders prevented Great Britain from fully con- 
 trolling the West Indies, made the war more biirdensome for her, and 
 may doubtless have prolonged the struggle. 
 
 This action of the American merchants in continuing their trade 
 with the French West Indies during the Seven Years' War illustrates 
 forcefully the importance, and the profitableness to the continental 
 colonies, of the commerce with the "sugar islands," foreign as well as 
 British. As has already been indicated, "the West India trade was to 
 a great extent the basis of industry in the northern continental colo- 
 nies."^ The war made this trade of greater rather than less economic 
 importance, and the profits to be derived from selling lumber, fish, and 
 provisions to the necessitous French colonies, and from buying sugar, 
 molasses, and other tropical products in the glutted markets of those 
 besieged islands, were far in excess of ordinary fbmmercial gains. 
 
 ^Beer, British Colonial Policy, 1754-1765, p. 128. 
 
Eighteenth Century to Outbreak of the Revolution. 97 
 
 None of the colonial governments could openly justify this illegal 
 trading with the enemy. All of the colonies were desirous of seeing 
 Great Britain conquer France, because the French in Canada and 
 their Indian allies from the lakes to the Gulf were a constant menace; 
 but within three years after the opening of the Seven Years' War the 
 success of the British in America seemed assured. Louisbourg and 
 Fort Duquesne were taken in 1758, Quebec was captured in 1759, and 
 after that event the American colonists had only such sentimental 
 interest in the British struggle against France as was prompted by 
 patriotism and loyalty. 
 
 The American colonies were in no sense disloyal in 1760, but, for 
 manifest reasons, the imperialist sentiment in America was so weak as 
 to be almost non-existent. To Pitt and the British statesmen who were 
 guiding the destinies of the empire, France, wherever she had territory 
 or power, was -the enemy of Great Britain; while the average provincial 
 American thought of the French in America as dangerous neighbors, 
 but of the French in the West Indies as "an unfailing source of wealth." 
 
 The fact can not be denied, and is not to be forgotten, that the colo- 
 nial merchant was strongly individualistic. He was resourceful and 
 self-reliant, and his whole business training tended to make him more 
 disposed to evade than scrupulously to comply with laws and rules 
 which the State imposed on him and his affairs. Moreover, the 
 American merchant could find in precedent an excuse, if not a justifica- 
 tion, for this illegal trading. During the long war of the Spanish 
 Succession "a large trade was carried on with France and Spanish 
 colonies;" and later, during the war of the Austrian Succession, the 
 trade of the British colonies with the French West Indies was so large 
 as to have been one cause of the failure of the British naval operations 
 in the Caribbean.^ As a matter of fact, during none of these eighteenth 
 century wars was Great Britain able to prevent illegal trading with 
 her enemies. 
 
 The illegal trade with the French in the West Indies during the Seven 
 Years' War was carried on not only by the continental colonies, but 
 also by the Irish, who then exported provisions, and by the people of 
 the British West Indies, who reexported to the French islands a part 
 of the provisions they had imported. The governments of the British 
 sugar islands, however, succeeded in stopping a large part of the 
 illegal trading of those islands; and Ireland's exports were small in 
 comparison with those from the continental American colonies. 
 
 The trading was accomplished in various ways. To some extent, 
 the American vessels entered the French colonies directly from their 
 home ports, this being done with the connivance of customs officers 
 and the commanders of the French cruisers; but this method of pro- 
 cedure was too dangerous to be extensively followed. Another device 
 
 'Beer, British Colonial Policy, 1754-1765. p. 73. 
 
98 History of Domestic and Foreign Commerce. 
 
 for evading the law was for the master of an American colonial vessel 
 to secure from the governor of his colony a pass permitting the vessel 
 to proceed to a French island to exchange prisoners of war. The ship- 
 master might, as a matter of fact, take some prisoners to exchange, or 
 he might take none; his vessel was certain to take out a cargo of goods 
 and to return laden with tropical products. Such vessels were called 
 "flags of truce." Some of the colonial governors would not issue such 
 passes, but in some colonies, notably Pennsylvania and Rhode Island, 
 the ship-master had little if any difficulty in buying these permits. 
 The "flags of truce," however, carried only a minor share of the traffic. 
 
 Most of this illegal trading was done through a neutral Dutch or 
 Spanish port in the West Indies. During the early part of the war the 
 Dutch ports of Curasao, and more particularly St. Eustatius, were 
 centers through which the trade with the French was conducted. 
 The Dutch merchants at St. Eustatius, in buying the colonial goods, 
 furnished the ship-masters "with forged or fraudulent landing certifi- 
 cates, which were used to cancel the bonds given in the British colonies 
 not to take their cargoes to a foreign port."^ As France did not allow 
 foreigners to trade with her colonies in times of peace, the British 
 prize courts held, under the "Rule of 1756," that France could not 
 legally open her colonial ports to the Dutch "under pressure of war," 
 hence the British navy, being supreme in the West Indies, seized 
 numerous Dutch vessels trading with the French colonies; and the use 
 of St. Eustatius as a neutral port became impracticable after 1758. 
 
 In 1759, Monte Cristi, a small Spanish "free" port on the north 
 shore of Santo Domingo, became the chief center of the trade with the 
 French. Monte Cristi was most favorably situated for this, because, 
 although located on Spanish soil, it was close to the boundary of the 
 French portion of Santo Domingo. This hitherto entirely insignificant 
 settlement suddenly became a busy trade center, where the French 
 secured both American provisions and military supplies, and also 
 British manufactures, in exchange for sugar and molasses. 
 
 "This trade at Monte Cristi was carried on mainly by the New England 
 and middle colonies, but it was by no means unknown in Virginia and in the 
 West Indies. In addition, British subjects in England, Scotland, and Ireland 
 were implicated in it, though to a minor extent. The trade assumed large 
 proportions in 1759 and 1760. At times during these two years, over 100 
 North American vessels were at this port. In 1760, it was estimated that in 
 that one year 400 to 500 vessels had taken in cargoes of French sugar and 
 molasses."^ 
 
 The extent of this trade and the nationality of the participants is 
 concretely illustrated by the fact that on the 5th of February, 1759, 
 his Majesty's sloop Viper found 29 ships ranging from 30 to 1 50 tons 
 burden at anchor in the port, and of these 29 vessels, 28 were from the 
 
 'Beer, Brilish Colonial Policy, 1754-1765, p. 93 (note). ^lUd., 99. 
 
Eighteenth Century to Outbreak of the Revolution. 99 
 
 North American colonies — from New York 7, Rhode Island 8, Connecti- 
 cut 4, Massachusetts 8, Virginia i, and Bermuda i. Upon another 
 date, two years later, 50 vessels were reported, 36 of them hailing from 
 the continental American colonies — from Massachusetts 15, Rhode 
 Island 10, New York, 9, Connecticut i, and North Carolina i.^ 
 
 The extent of the trade with the French at Monte Cristi was well 
 known by the admiral of the British West Indian fleet and by the 
 commander of the British forces in America; and both were thereby 
 seriously hampered in their operations. The exportation of food from 
 the New England and middle colonies kept provisions scarce and prices 
 high. A part of the supplies for the British troops had to be brought 
 from Great Britain. The French colonies, meanwhile, were able to 
 exchange their sugar and molasses for provisions in sufficient quantity 
 to enable them to endure, without great hardship, the blockade of 
 their ports by the British fleet. 
 
 As early as 1759, the British navy had attempted to break up the 
 trade at Monte Cristi by capturing certain merchant vessels, but the 
 courts had not supported the navy in making prizes of ships trading at 
 a Spanish port. Two years later the making of captures was resumed, 
 and the West Indian vice-admiralty courts then held the prizes to 
 have been legally taken. This enabled the British navy temporarily 
 to restrict the Monte Cristi trade. The business was not entirely 
 broken up, and the following year, when Spain joined France in the 
 war, traffic at Monte Cristi again became active. This finally, in 
 1762, roused Amherst, the British commander in America, to take the 
 vigorous step of placing an embargo upon the trade of New England 
 and the middle colonies. Amherst had hesitated for some time to 
 adopt the plan of laying an embargo, because it injured the innocent 
 trader as well as punished the lawbreaker; but the injury to commerce 
 was not for a long period. The Peace of Paris brought the war to an 
 end the following year. 
 
 The trade of the continental American colonies with the West 
 Indies, foreign and British, was actively resumed in 1763; but Parlia- 
 ment, being confronted with a heavy debt, due largely to the Seven 
 Years' War, was disposed neither to allow the colonies to ignore the 
 Molasses Act of 1733, nor to permit them to continue to carry on an 
 extensive commerce with various ports of the world practically tax-free. 
 The well-known measures — associated with the names of George 
 Grenville, Charles Townshend, and Lord North — for raising revenue 
 by the amendment, extension, and rigorous enforcement of the Acts 
 of Trade were adopted by Parliament in 1764 and the six succeeding 
 years. As far as the trade with the West Indies was concerned, the 
 change in the provisions of the Molasses Act and the steps taken to 
 execute the modified law were the most important of the Grenville- 
 Townshend acts. 
 
 'Beer, British Colonial Policy, 1754-1765, p. 98. 
 
lOO History of Domestic and Foreign Commerce. 
 
 The duties imposed by the Molasses Act of 1733 (9 pence per gallon 
 on ram, 6 pence a gallon on molasses, and 5 shilling§sper hundredweight 
 on sugar) were too high to yield much revenue. The enforcement of 
 the act would have stopped trade with the' foreign West Indies, as was 
 the intention of those responsible for the passage of the law. The law 
 had yielded little revenue, because it was not enforced and was not 
 enforceable. Until 1759, the law was practically ignored. The Sugar 
 Act of 1764 was substituted for the Molasses Act, for the purpose, of 
 subjecting the trade with the West Indies to a law that could be made 
 effective in yielding a revenue to be applied tcnvards supporting the 
 ■ British military establishment in America. 
 
 By' the Sugar Act, as passed in 1764, the importation of rum into 
 America from foreign tolonies was forbidden, the duty on foreign raw 
 sugat was left at the old rate, and duty placed upon the refined articles 
 was raised from Js. to £1 7s. a hundredweight. The impost on foreign 
 molasses, which was the commodity most largely purchased in the non- 
 British sugar islands, was lowered from 6 pence to 3 pence a gallon. As 
 the North American colonies could secure rum and sugar in large quan- 
 tities from the British islands, their chief opposition to the Sugar Act 
 of 1764 was to the relatively high import duty of 3 pence per gallon> 
 on foreign molasses, and their opposition was so vigorous and effective 
 that at the end of two years the British Government changed the molas- 
 ses tax from 3 pence per gallon on foreign molasses to the low rate of 
 I penny per gallon, but levied this rate upon all of the articles imported, 
 whether from foreign''or British countries, this change being made at 
 the same time that the still more obnoxious Stamp Act was repealed. 
 
 Grenville's vigorous measures to enforce the Sugar Act of 1764 were 
 largely unsuccessful. The smuggling of molasses and other West India 
 products continued, despite the zeal of the customs officers armed with 
 writs of assistance and supported by the Vice-Admiralty Court. The 
 authority of the British officials was denied, and when, in 1765 the 
 Stamp Act added fuel to the fire, the customs officers were successfully 
 defied by mobs. The effect on the trade which the British merchants 
 had in America was so disastrous that the British Government the 
 following year sought to placate the colonies by repealing the Stamp 
 Act and reducing the molasses duty. One effect of the reduction of 
 duty on molasses to I penny per gallon was a diminution of smuggling 
 and a large increase in the revenue derived from the duty. 
 
 THE AFRICAN SLAVE TRADE. 
 
 One important featu re of the t rade of the AmericajijCQlQniesLmth.jJie 
 Wesjt Indies~was the traffic in slav^the^ccorrffif of which was omitted 
 from the above discussion of thT^est Indian trade in order that the 
 subject might be treated separately.^ The traffic in African slaves was 
 
 •This account of the slave trade is based largely upon The Suppression of the African Slave 
 Trade, by W. E. Burghardt Du Bois. 
 
Eighteenth Century to Outbreak of the Revolution. loi 
 
 I 
 
 closely connected with the West Indian trade, because nearly all of the 
 negroes purchased in Africa by the English, French, Portuguese, Dutch, 
 and American slave traders for sale in the American market were 
 brought first to the West Indies, the slave marke;ts in which islands 
 supplied both the sugar estates of the islands and the plantations of 
 the continental American colonies^ It was not until after the Revolu- 
 tion, when the trade of the United States with the West Indies was 
 limited to the use of British ships, that the direct importation pf negroes' 
 from Africa became frequent. Previously only occasional cargoes wfere 
 imported directly. Throughout the colonial period, after the use of slave 
 labor became general, negroes constituted a regular and important part 
 
 r^'of the export traffic, from the West Indies to North America. 
 
 The merchants of Holland were the first to develop the West Indian 
 slave trade on a large scale. During the first two decades of the 
 seventeenth century several small Dutch companies began taking 
 from Holland to Africa goods with which they secured negroes that 
 were taken to the West Indies or Brazil and there exchanged for sugar. 
 In 1621 these various companies united in the celebrated Dutch West 
 India Company, to which Holland gave a monopoly of the American 
 trade; and this company engaged so extensively and profitably in the 
 African-West Indian slave traffic as to arouse the English to active 
 competitiqn. Although the first slaves sold in continental America — 
 the 20 negroes purchased in Virginia in i6i9> — were brought by Dutch 
 traders, the Dutch did not, as a matter of fact, engage to much extent 
 in bringing the slaves from the West Indies to the American mainland. 
 There was but little demand for slaves in New Netherland; and the 
 majority of the Dutch slave ships held to the triangular route from 
 Holland to Africa, Brazil or the West Indies, and thence home. 
 
 The English pushed the trade actively after 1630, and in 1672 the 
 powerful Royal African Company came into existence and organized 
 the traffic on a larger scale than it had hitherto reached. During the 
 20 years from 1713 (when Great Britain secured from Spain a monopoly 
 for 30 years of supplying the Spanish colonies with slaves) until 1733, 
 the English took 15,000 negroes annually to America, one-third being ; 
 taken to the Spanish and two-thirds to the British islands. Later, 
 
 ' the traffic reached larger figures, especially after 1750, when the Royal 
 African Company was dissolved. Neither the exact number of slaves 
 imported into the West Indies nor the percentage of them that were 
 subsequently taken to the continental American colonies is kno\^n, 
 because,a large part of the traffic, unlike that carried in the British 
 ships, was unregistered, being carried on in the ships of non-British 
 European countries and of the American colonies. According to Du - 
 Bois: "It is probable that about 25,000 slaves were brought to America 
 (the West Indies) each year between 1698 and 1707." The number 
 
 then fell off, but rose after 1713 to "perhaps 30,000." 
 
 The number of slaves annually imported into the American colonies 
 increased as the eighteenth century advanced. Bancroft places the \ 
 
I02 History of Domestic and Foreign Commerce. 
 
 slave population of the continental colonies at 59,000 in 1714, 78,000 in 
 1727, and 293,000 in 1754. Bancroft's figures were probably conserva- 
 tive, the estimate of Doyle, as stated in the early part of this chapjfer, 
 being 96,000 blacks in 1720. The estimate of Channing for 1760 was 
 386,000 negroes. In 1790, when the first census ofttse United States 
 was taken, there were 697,877 slaves in the country. This steady 
 growth in the number of the slave population in the continental colo- 
 nies was due in part to natural increase, this being particularly true of 
 the negroes in the Chesapeake colonies; and in the colonies further 
 south, with the exception of the slaves on the rice plantations, the 
 negroes lived under healthy conditions. The condition of the negroes 
 was quite otherwise in the sugar islands, where the mortality was high 
 and the importation of a large number of slaves each year was necessary. 
 
 The negroes brought annually to the continental American colonies 
 must have averaged 10,000, and possibly much more than that number, 
 during the 50 years preceding the Revolution. English ships imported 
 about 3,000 into South Carolina each year from 1733 to 1766, and slaves 
 were also brought by American and other traders. 
 
 There were five causes, economic and social, that accounted for the 
 existence and growth of this traffic in human beings : 
 
 I. The planters in all the colonies south of Pennsylvania depended 
 mainly upon slave labor and required an increasing number of negroes 
 ' with the progress of each colony in industry and population. In 
 Maryland alone of the southern colonies was there any dependence 
 upon free labor, and there the slaves outnumbered the birred hands. 
 ^ 2. In tlie middle colonies, and to a small extent in New England, 
 TfSegroes were in demand as domestic servants, and were sometimes 
 used for farm labor; but the number of slaves in Pennsylvania before 
 the war did not exceed 11,000, and in New Jersey the maximum was 
 less than half that figure. New York had a relatively large slave 
 population amounting to 21,149 ^^ ^77 A- The relative unimportance 
 of slavery in New England is indicated by the fact that the maximum 
 negro population in Connecticut was about 6,500, and in Massachu- 
 setts about 5,800. Little Rhode Island, on account of the active 
 slave trade carried on at Newport, had only a thousand less slaves 
 than did Massachusetts; whereas in New Hampshire slavery was almost 
 nonexistent, there never having been as many as 700 slaves in the 
 colony at any one time. 
 
 3. While the slave trader, and particularly the American slave trader, 
 was not responsible for the existence of slavery in America, and was 
 not the chief cause of its continuance and growth, yet the profits which 
 American shipowners and captains derived from the traffic in African 
 negroes caused them and the commercial interests in general to condone 
 slavery throughout the colonial period, even in the northern colonies, 
 and, except in Pennsylvania, to oppose successfully, until after the 
 Revolution, the placing of any serious restrictions upon the slave trade. 
 
Eighteenth Century to Outbreak of the Revolution. 103 
 
 The abolition of slavery by the northern colonies in most instances 
 antedated the prohibition of the slave trade. The last anti-slave-trade 
 laws to be passed by the colonial or State governments were those 
 forbidding their citizens to engage in the traffic outside of the colony 
 or State. Most of the northern colonies passed such laws before the 
 "- end of the eighteenth century; but New York did not, and some of her 
 citizens continued in the slave trade until the Civil War — of course 
 clandestinely after the passage of the federal act of 1808. 
 
 4. The commercial interests of Great Britain, as well as those of 
 America, were opposed to the colonial laws restricting the importation 
 of negroes. From time to time the southern colonies felt, as did 
 South CaroHna as early as 1698, that "the great number of negroes 
 which of late have been imported into this colony may endanger the 
 safety- thereof," and various steps were taken to mitigate the evil. 
 Special encouragement was given white immigration; per capita taxes 
 were placed upon imported negroes, the amount of the tax varying 
 with the degree of public alarm. Occasionally this tax was made so 
 high as to be prohibitive,^ and in one instance. South Carolina in 1760, 
 the importation was prohibited. This act of South Carolina was vetoed 
 by the British government, as were numerous of the colonial laws 
 imposing high duties on imported negroes, as for example, the Virginia 
 acts of 1723 and 1727 and the Pennsylvania act of 171 3 imposing a head 
 tax of £20. Many similar laws were nullified by the veto of the royal 
 governors or by the disapproval of the mother country. Indeed, the 
 British slave-traders seem to have had no great difficulty in persuading 
 the British government to check the eflPorts of the American colonies 
 to restrict the slave trade. 
 
 5. Another economic reason, even more determinative than the 
 profitableness of buying negroes in the cheap slave markets of Africa 
 and selling to the slave-dealers and planters of the West Indies or the 
 American continental colonies, accounting for the prominent place 
 held by the slave traffic in the commerce of the northern colonies, was 
 the intimate connection of this traffic with both the West Indian trade 
 and with the rum-manufacturing business of New England. What 
 this connection was can best be described by the account of the voyage 
 and traffic of a typical slave-ship, the brigantine Sanderson, of Newport, 
 Rhode Island. The vessel was fitted out from her home port in March 
 1752, having, besides the captain (a Mr. Lindsay), two mates and six 
 men in her crew, and carrying a cargo of 8,220 gallons of rum and also 
 some short iron bars ("African" iron), flour, pots, tar, sugar, provi- 
 sions, shackles, shirts, and water. Upon reaching Africa the cargo was, 
 with some difficulty, exchanged for slaves and for some gold dust and 
 pepper. Captain Lindsay then proceeded to the Barbados, where he 
 arrived June 17, 1753, and where he sold his cargo of 56 slaves, "all 
 in helth and fatt," from £33 to £56 per head, and also disposed of 40 
 
 'For an account of these laws in each colony consult Du Bois, chapters 2-4. 
 
104 History oj Domestic and Foreign Commerce. 
 
 ounces of gold dust and 8 or 9 hundredweight of pepper. The net 
 proceeds of these sales above expenses was £1,324. From this sum the 
 captain spent £911 17s. in purchasing 55 hogsheads of molasses and 3 
 hogsheads 27 barrels of sugar, the remainder due the captain being paid 
 him in bills of exchange on Liverpool. From the Barbados the Sanderson 
 returned to Newport, and her owners were so well pleased with the suc- 
 cess of her captain that they at once fitted out another vessel and sent 
 Captain Lindsay forth on another trip.^ Most of the slave vessels hke 
 the Sanderson were small, their usual size being less than 100 tons. 
 
 Oftentimes the vessel that brought slaves from Africa to the West 
 Indies would take slaves to the southern colonies and there purchase 
 ship-building materials, or to more northerly colonies and exchange 
 the negroes for staves and cooperage supplies. Many slaves were 
 brought from the West Indies to Newport, which was a central market 
 from which the colonies north and south were in part supplied with 
 negroes. However, Newport, although it had the distinction of being 
 the largest slave market, was only one of many ports from which the 
 slave trade was carried on; Boston, Salem, New York, and many other 
 places participated in the business. As distinguished a citizen^ of 
 Boston as Peter Faneuil was the owner of a slave ship. 
 
 The African slave trade furnished the rum distillers of New England 
 with one of their three principal markets. The home demand and the 
 Indian trade doubtless gave them the largest outlet for their product; 
 the exports to Africa probably ranked second in amount; while the 
 fishing fleets provided the third market. The distillers as well as the 
 traders of New England profited by the prosecution and development 
 of the traffic in African negroes. 
 
 The opposition to slavery brought about the abolition of the institu- 
 tion in the middle and New England colonies during or shortly after the 
 Revolution. The victory was won with comparative ease, because both 
 the economic interests and moral forces of society were against slave 
 labor in those colonies. Slave-holding was not profitable where small- 
 farm agriculture prevailed, where skilled artisans were in demand, and 
 where a goodly share of the population led the free and hardy life of 
 fishermen and seamen. The extermination of the slave trade was more 
 difficult, because powerful economic interests favored its continuance; 
 but with slavery overthrown in the middle and northern colonies, it 
 was inevitable that the moral sentiment against the traffic in human 
 beings should soon prevail. Consequently the legalized slave trade 
 had practically ceased before the close of the eighteenth century. 
 Unfortunately, the trade did not stop, and as the traffic came to be 
 condemned first by the moral sentiment of society and then by statute 
 law, the horrors of the traffic increased. The worst days of the slave 
 trade were the latter days. 
 
 'Du Bois, Suppression of the African Slave Trade. 28. 
 
Eighteenth Century to Outbreak of the Revolution. 105 
 
 FROM THE PEACE OF PARIS TO THE DECLARATION OF INDEPENDENCE. ' 
 
 The trade revival that usually follows a war came in 1764, at the close 
 of the French and Indian War. The remoteness of America in distance 
 and time of ocean transit from the enemies of Great Britain, and the 
 crippling of the French fleet by the British navy early in the struggle, 
 enabled the continental American colonies to carry on the larger part of 
 their commerce without serious interference; but the military opera- 
 tions in America unavoidably checked industry to some extent, and the 
 risks of capture by privateers and French men-of-war must have been 
 a deterrent to commercial undertakings. 
 
 That such was the case is evidenced by the fact shown in table 8, on 
 pages 120 and I2i, that the trade of all the colonies, with the exception 
 ofVirginia and Maryland, was noticeably larger in 1764 than it had been 
 the two preceding years. As the export trade of Virginia and Mary- 
 land consisted almost entirely of tobacco, which could be sold only 
 in the English realm, and as their imports were made up mainly of 
 British manufactures, the Seven Years' War had not greatly affected 
 their commerce, although the export figures of 1754 were not again 
 reached until 1762, during which year there was a large expansion of- * 
 both exports and imports. 
 
 Table 3, on page 89, giving the average annual vaKje of the imports 
 and exports of the trade of the colonies with the mother country for 
 each decade from 1700 to 1780, shows that the yearly average was 
 much the largest from 1760 to 1770; and this was so in spite of the 
 undoubted curtailment of trade caused by the non-importation agree- 
 ments with which the colonists sought to compel Great Britain to aban- 
 don her policy of enforcing the Acts of Trade and otherwise taxing the 
 colonies. Had Great Britain continued, after 1763, the same hberal 
 policy toward the trade of the colonies that she had followed prior to 
 that time, the average annual value of her commerce with the American 
 continent during the years following 1760 would have been much larger. 
 
 In one of the colonial industries there was a most notable expansion 
 some time in advance of the formal treaty of peace in 1763. Promptly 
 following the fall of Quebec and the crushing of the French power in 
 Canada, American whalemen began operations throughout the Gulf 
 of St. Lawrence from the lower course of the River St. Lawrence to 
 and through the Straits of Belle Isle, a broad expanse of water that 
 had hitherto been monopolized by the French, who were not so skillful 
 as were the people of Nantucket in the destruction of whales. The 
 whaling vessels sent out from Massachusetts to the Gulf of St. Law- 
 rence increased from 10 in 1761 to join I762,and to 8oor morein 1763.^ 
 A larger exportation of whalebone to England immediately began, 
 despite the high customs duty. At and prior to this time most of the 
 whale products from continental America had been imported into Great 
 Britain by the Dutch whalers, against whom the English had not made 
 
 'Weeden, Economic and Social History of New England, II, 746. (Weedeti refers to Mass. 
 Archives, Ixvi. 243.) 
 
io6 History of Domestic and Foreign Commerce. 
 
 much headway. For a long time the British Government had favored 
 both English and colonial whalers in the fisheries off the coast of Green- 
 land, both by permitting the whalers to import the bone secured in 
 those waters duty free, and by granting a bounty on this bone. This 
 liberal policy had been adopted to develop seamen for the navy. In 
 1764 Parliament, seeing that it would be possible to transfer the trade / 
 in whalebone from the Dutch to the British colonists in America,^ 
 removed nearly the entire duty upon whalebone imported by British 
 subjects. The consequence was that Holland forthwith lost the trade, 
 and the Americans secured it.^ In 1761 there were 27 hundredweight 
 of whalebone imported into Great Britain directly from America, and 
 2,500 hundredweight from Holland; in 1764 the imports from America 
 were 1,550 hundredweight and from Holland 73 hundredweight. 
 
 The cod and other fisheries were carried on more largely and more 
 profitably upon the restoration of peace in 1763 and the eliminadon of 
 the dangerous privateers. With the development of the cod fisheries 
 there was an expansion of exports to the West Indies, a larger importa- 
 tion of molasses, and a greater output of rum. With an abundance of 
 New England rum for export, and with the enlargement of plantation 
 farming in the southern colonies, the conditions precedent and the 
 incentives to the prosecution of the African slave trade were present. 
 It seemed, in 1764, that both economic and political conditions favored 
 the colonial fisheries, the West Indian and African trades, and the 
 commerce with Great Britain — in a word, all the maritime activities of 
 the colonies. 
 
 Nor was the British Government in any sense averse to a large 
 development of American commerce. The King, ParHament, and 
 people of the mother country believed as firmly as ever that the com- 
 merce of all parts of the empire should be so regulated as to maintain 
 the principles of the mercantile theory; and they also thought the 
 trade of the colonies as well as that of the realm should be taxed to 
 meet the expenses of imperial defense. Subject to these two Hmita- 
 tions, the larger the trade of the colonies the better it would be for the 
 mother country as well as the colonies. Grenville did not set about 
 to injure the colonial trade; on the contrary, several of his measures 
 were intended to build it up. 
 
 In addition to favoring the. colonial whale-fisheries, as explained 
 above, bounties were bestowed in 1765 upon lumber imported into 
 Great Britain from America, although colonial lumber had, since 
 1722, enjoyed preferential duties over that from foreign countries; 
 and silk was added to the list of articles that had previously received 
 bounties — hemp, masts, tar, pitch, turpentine, and indigo. It is 
 true that the bounties on hemp and masts had had but little effect, and 
 that silk was not successfully grown in America. The bounties had 
 ■ aided the southern rather than the northern colonies; but by the 
 preferences granted in the duties on imports into Great Britain and 
 
 'Beer, British Colonial Policy, 1754-1765, pp. 218-221. 
 
Eighteenth Century to Outbreak of the Revolution. loj 
 
 by the drawbacks given on goods reexported from the realm, the 
 northern colonies as well as the southern were favored. The manner 
 in which the British duties and drawbacks sought to foster as well as to 
 regulate the trade of the colonies with the mother country has been 
 explained in Chapter III. Grenville and Rockingham continued the 
 policy of their predecessors and made further concessions. 
 
 It is well to keep in mind the facts just stated and to remember 
 that the purpose of the mother country was to foster as well as to regu- 
 late and tax the commerce of the colonies. The regulatory action 
 taken after the Peace of Paris consisted mainly of a stricter enforcement 
 of the old Acts of Trade and the inclusion of most of the colonial 
 exports among the "enumerated" articles that could be sold only in Great 
 Britain or the colonies. It was inevitable that the British Government 
 should some time seek to strengthen her administration of the colonies 
 and to give validity to the laws regulating colonial trade, and in 1764 
 there were two impelling reasons for making the attempt at that time. 
 Having decided that the expenses of governing, and particularly of 
 defending, the widely separated portions of the empire were too heavy 
 for Great Britain to bear without the aid of the colonies, the policy 
 of taxing colonial tr^de and of enforcing the tax laws seemed logically 
 the one to adopt. Moreover, the open and persistent trade of the colo- 
 nies with the enemies of England during the Seven Years' War had 
 impressed the mother country with the necessity both of enforcing the 
 Acts of Trade and of extending the list of commodities that might be 
 sold only in Great Britain and the British possessions. 
 
 Grenville seems to have been a man of a logical mind devoid of 
 imagination; neither he nor his colleagues in the ministry had any 
 conception of the difficulties they would meet with in regulating and 
 taxing the colonial trade. The story of the successful colonial oppo- 
 sition to the plans adopted by ministry and Parliament to carry out 
 the policy of trade regulation and taxation need not be repeated. We 
 all know that the measures intended to develop certain lines of colonial 
 industry and trade were more than negatived by the results of the 
 concurrent attempts to tax American commerce; that the Sugar Acts 
 of 1764 and 1766 could not be enforced; that the Stamp Act of 1765 
 resulted in riot instead of revenue, and was repealed in a few months ; 
 that the eloquent Townshend in 1767 could easily persuade Parliament 
 to lay colonial impost duties upon various articles — glass, paper, paint- 
 ers' colors, red and white lead, and tea — but could not overcome the 
 effect of the consequent colonial non-importation agreements; and that 
 George Ill's irresolute and ill-informed premier. Lord North, found 
 the temper of the colonists to be such by 1770 that they would neither 
 permit taxed tea to be landed nor submit peacefully to the presence 
 of British troops sent to maintain order in America. In a word, the 
 attempt to regulate and tax colonial trade not only failed of its pur- 
 pose, but resulted, in consequence of the fatuous administrative policy" 
 to which the King and his ministers blindly adhered, in the A^merican 
 
io8 History of Domestic and Foreign Commerce. 
 
 Revolution, and the political disunion of the two great national expo- 
 nents of Anglo-Saxon civilization. 
 
 In studying the commercial as contrasted with the political effects 
 of the British taxation of American trade from 1764 to 1770, the fact 
 should be remembered that only a small portion of the trade was 
 directly affected by the tax laws. The vigorous opposition of the 
 colonies was not due to the throttling of American commerce nor to 
 the crippling of industry. The years separating the Peace of Paris 
 and the opening of the Revolution were not a period of hard times. 
 Conditions in America were fairly prosperous. Had the relations 
 with Great Britain been harmonious, industrial progress would have 
 been more rapid, and maritime trade would have been larger; but, 
 in spite of the Hmiting effects of the non-importation agreements, 
 the commerce of most of the colonies, even with Great Britain, where 
 the friction was greatest, reached its maximum in 1771 and 1772; 
 and, in 1773 and 1774, the two years preceding the outbreak of hostili- 
 ties, the commerce of the colonies with the mother country was larger 
 than it was ten years previous. It was the principle of parliamentary 
 taxation without representation rather than actual economic oppres- 
 sion, against which the American patriots made their determined 
 stand. The American Revolution was fought to secure political liberty 
 because it was felt that without political freedom the economic pros- 
 perity of the colonies could not continue. 
 
 MONETARY CONDITIONS AS AFFECTING COMMERCE IN THE EIGHTEENTH CENTURY.i 
 Throughout the colonial period trade both domestic and external was 
 hampered by the absence of a uniform system of money current among 
 the several colonies. Indeed, the monetary conditions were well-nigh 
 chaotic; Massachusetts coined a limited quantity of "pine-tree shill- 
 ings" from 1652 to 1686, but the colonies had no common currency 
 of their own, nor were they able to obtain any considerable supply of 
 EngHsh money — pounds, shillings, and pence. The total supply of 
 metallic money in the colonies during the eighteenth century was not 
 small, although it came far short of being adequate for business at a 
 time when credit institutions were undeveloped. The coins were 
 Spanish, Portuguese, and French, mainly Spanish. The exportation of 
 coin from England was prohibited by law; but the statute was 
 unnecessary as far as the American continental colonies were concerned, 
 
 'The history of money and banking is not attempted in this work, although there is a vital 
 connection between commerce and both money and credit. Only a brief statement of the mone- 
 tary conditions in the latter half of the colonial period is here deemed necessary. For a com- 
 prehensive treatment of the subject consult C. J. Bullock, Monetary History of the United States, and 
 Henry Phillips, Jr. , Paper Currency of the A merican Colonies. Special students of financial history 
 will wish to consult the works dealing with the monetary history of single colonies, such as A.M. 
 Davis, Currency and Banking in the Province of Massachusetts Bay; E. R. Potter and S. S. Rider on 
 Paper Money of Rhode Island (in R. I. Hist. Tracts, first series, No. 8) ; W. Z. Ripley, Financial History 
 of Virginia (in Columbia Univ. Studies, IV, No. 1), and other similar works of which several are 
 in existence and in preparation. A good brief discussion of the colonial monetary system, with 
 numerous references to sources of information, is contained in Edward Channing's History of the 
 ' United States. II, 496-507. 
 
Eighteenth Century to Outbreak of the Revolution. 109 
 
 because the continuous balances of trade in favor of Great Britain 
 caused a steady flow of coin from the colonies to the mother country. 
 The scarcity of current coin was a permanent condition in America. 
 
 Although the coins used were not English, prices were quoted in 
 pounds, shiUings, and pence, the ratios between the various non-British 
 coins and Enghsh money being fixed, by business practices or by 
 statutes, dissimilarly in the different colonies, to the serious detriment 
 of intercolonial exchanges. The most generally accepted money basis 
 in the colonies was the Spanish coin of 8 reals, "the piece of eight," 
 which was equivalent to 4 shillings 6 pence English money; but in New 
 York and North CaroHna this coin was made equal to 8 shillings ; in New 
 Jersey, Maryland, Pennsylvania, and Delaware to 7 shillings 6 pence; 
 in New England and Virginia to 6 shillings, and in South Carolina and 
 Georgia to 4 shillings 8 pence. The difficulty of carrying on industry 
 and commerce under these conditions may be readily imagined. 
 
 The supply of coin being insufficient to meet the needs of trade, two 
 practices, begun in the seventeenth century, were continued in the 
 eighteenth. One was the designation by law of some staple commodity 
 as a standard of value. As is well known, tobacco took the place of 
 money to a large extent in Virginia from the early years of the colony. 
 Later, in 1730, the colony built warehouses in which owners of tobacco 
 might store the commodity and receive therefor transferable notes 
 somewhat similar to the silver and gold certificates now in circulation. 
 At one time wheat certificates were current in Pennsylvania, and. 
 in New England public dues were, at times, made payable in specified 
 products at fixed prices, while private contracts for the settlement of 
 obligations in staple commodities were often made. These devices 
 for doing business without the use of money were necessary, and, 
 although they often entailed serious burdens upon creditor or debtor, 
 they were of undoubted public benefit. 
 
 This, however, can not be said of the other means to meet the situa- 
 tion created by the inadequate supply of coin — ^the issue of paper 
 currency, much of which was fiat money. As was stated in the preced- 
 ing chapter, Massachusetts was the first to yield to the soft-money 
 temptation, her original issue of paper notes being made in 1690 to 
 pay the expenses of the unsuccessful expedition against Quebec. 
 Subsequent emergencies led to numerous issues of paper currency, 
 despite the opposition of the British Government and of the conserva- 
 tive residents of the colony. Carolina began the issue of paper money 
 in 1702, New York in 1709, Rhode Island in 171 5, and Pennsylvania 
 in 1723. All of the colonies put forth various issues of paper notes, 
 some colonies, as Pennsylvania, in a relatively conservative way that 
 resulted in little harm; others, as Rhode Island, with a reckless disre- 
 gard of the laws of trade and finance. 
 
 The paper currency issued by the colonies consisted in part of "bills 
 of credit" or "treasury notes," the redemption of which was provided 
 
I lo History of Domestic and Foreign Commerce. 
 
 for in the legislation authorizing the issues. Some of the colonies were 
 conscientious in retiring the bills according to the terms of their issue, 
 but other colonies were not; and most of the colonies indulged more or 
 less in putting out irredeemable or fiat money. In part, also, this 
 fiat currency consisted of small paper bills to provide retail trade with 
 the necessary change, the need for which was very great. What the 
 colonists ought to have done is what could hardly have been expected 
 of them. They should have taxed themselves, purchased bullion, 
 and issued coin or paper notes redeemable in coin or bullion; but 
 capital seemed to them much too scarce to be tied up thus in the vaults 
 of the colonial treasuries. 
 
 The desirability of having actual value back of paper notes was 
 realized, and the not unnatural expedient was tried of establishiijg 
 "land" banks with power to issue notes against mortgages upon land — 
 the only kind of capital that was really abundant; but it goes without 
 saying that such experiments were foredoomed to failure. Banking, 
 public and private, in colonial times was too crude to create successful 
 institutions of credit, let alone to provide a safe circulating medium — 
 a much more difficult function to perform. It is, however, not surpris- 
 ing that the colonies resorted to the issue of paper currency when one 
 considers the urgent need of a circulating medium and the practical 
 impossibility of maintaining within the colonies an adequate volume of 
 metallic money. 
 
 SUMMARY. 
 
 During the 75 years of the colonial period falling within the eigh- 
 teenth century, American maritime commerce kept even pace with the 
 economic progress of the several colonies. The deterrent effects of the 
 long wars were relatively slight and of short duration. The laws of the 
 mother country intended to secure to Great Britain the benefits of a 
 monopoly of the international commerce of her American colonies 
 were enforced in so far as their enforcement placed little or no actual 
 check upon the development of America, but remained a practical 
 dead letter as regards those branches of trade that would have been 
 seriously restricted by giving validity to the laws. The commercial 
 growth of the continental American colonies was in the main autono- 
 mous. The settlements in America were not economically a part of 
 the English "realm;" they were colonies, and the British Acts of 
 Trade did not change their status. 
 
 The industrial welfare of the colonies, in 1775, almost as much as in 
 1700, was dependent upon maritime commerce. The diversification of 
 production had advanced somewhat further in the middle colonies 
 than in New England or the South; but, even in the region between 
 the Chesapeake and the Hudson, Httle headway could have been made 
 without the free exportation of surplus commodities to the West 
 Indies and the other continental colonies and the importation of Euro- 
 
Eighteenth Century to Outbreak of the Revolution. 1 1 1 
 
 pean wares and supplies. In the southern colonies, where most of 
 the population was engaged in growing staple agricultural products 
 for export, progress was conditioned absolutely upon the steady 
 increase in the volume of ocean commerce. The natural markets of 
 southern products were in Europe. New England, the most maritime 
 of all the colonies, drew her wealth mainly from the fisheries, the West 
 Indian and African trades, the manufacture of rum, the construction 
 of vessels, and their extensive use in the carrying trade of all the colo- 
 nies. Agriculture yielded Httle for export, and some food was imported. 
 Commerce was the very life of New England. When in 1774 the 
 British Parliament, recognizing this fact, sought to force New England 
 into submission by closing its leading port to the commerce of the world, 
 the attempt was a failure, because the very severity of the measure 
 united all the colonies in support of New England and in defense against 
 an attack that threatened the political liberties and economic oppor- 
 tunities of every colony. 
 
 The West Indian trade, at the close of the colonial period, occupied 
 as pivotal a position in the commerce of the colonies as it had held in 
 1700. Indeed, its importance had become greater. Throughout the 
 eighteenth century to the time of the Revolution the commerce with the 
 West Indies, foreign as well as British, had been of such vital conse- 
 quence to the welfare of the middle and New England colonies that not 
 even the great wars between England and France, though waged in 
 America as well as in Europe and the East, had stopped traffic between 
 the continental colonies and the foreign sugar islands. There was no 
 general spirit of disloyalty in America from 1755 to 1763, although the 
 imperial sentiment was weak. The insistence of the colonial merchants 
 upon trading either indirectly or directly with the enemies of the 
 mother country indicates that non-intercourse involved a greater 
 economic sacrifice than their loyalty and patriotism prompted them to 
 make. Of course, it should not be forgotten that France,- especially 
 after the fall of Quebec, seemed to the colonists to be a distant enemy, 
 and the active foe rather of the British people in Great Britain and 
 India than of those in America. 
 
 The connection between the ijiaritime trade and the economic 
 welfare of the continental American colonies was so close that the 
 efforts made by Great Britain, shortly after the Peace of Paris, to 
 carry out the principles of the mercantile system by enforcing the old 
 Acts of Trade, and the policy of taxing moderately a portion of the 
 external and internal commerce of the colonies aroused a degree of 
 opposition in America out of all proportion to the actual burdens 
 which the attempted regulation and taxation would have imposed. 
 The colonists felt that any effective interference with their trade was 
 fraught with serious consequences. They stoutly resisted the principle 
 and policy of trade restriction, because the regulation and taxation of 
 their commerce endangered their economic and political future. 
 
112 History oj Domestic and Foreign Commerce. 
 
 NOTES. 
 
 1. SOURCES OF STATISTICAL INFORMATION CONCERNING AMERICAN 
 COLONIAL COMMERCE. 
 
 The officials chosen by the colonies did not keep commercial records; but 
 there were two classes of British officials in the colonies — the collectors of the 
 customs and the naval officers — ^whose records and reports ought theoretically 
 to contain detailed statistics of the exports and imports and of the shipping of 
 each colony year by year. As a matter of fact, however, the existing files of 
 the reports of neither class of officials contain an unbroken record of any one 
 of the continental American colonies for the first seventy-five years of the 
 eighteenth century, whereas information concerning the entire maritime com- 
 merce of these colonies as a whole is to be had only for a period of five years 
 beginning with 1768. 
 
 The law required the British collectors of customs stationed at the colonial 
 ports to make a quarterly report, but they were not held to a strict observance 
 of the law. Their remittances were at least as irregular as were the uncertain 
 means of communication with the home government, and probably much 
 more so. During a large share of the time there was little effort made by the 
 British government to enforce the Acts of Trade, and it is hardly to be doubted 
 that this lax administration of the laws caused the collectors to exercise their 
 discretion as to the completeness and regularity of their trade reports. How- 
 ever that may have been, the remissness of the collectors was rendered of little 
 present consequence by a fire that destroyed the original reports of these 
 officials nearly a century ago. 
 
 When, in 1767, Charles Townshend sought to make his revenue measures 
 effective, he created a Board of Customs Commissioners to supervise the 
 administration of revenue laws. The reports made by the "Inspector-General 
 of Imports and Exports of North America and Register of Shipping" for five 
 years from 1768 to 1772, inclusive, have been preserved in a volume entitled 
 Ledger oj Imports and Exports for America, 1768— 1772, and the data for those 
 years are just such as would be desirable, but are not to be had, for the entire 
 colonial period. 
 
 For the years of the eighteenth century prior to 1768, the chief sources of 
 information are the Naval Office Lists containing the reports made in accord- 
 ance with the act of 1663 by the naval officers to the Board of Trade, while 
 that body was in existence, and previously to the committee or council having 
 supervision of trade and plantations. It is most unfortunate that these 
 detailed reports of the naval officers, containing, as they do, a record by ports 
 of each vessel entered and cleared, the character and quantities (but not the 
 tons) of cargo, do not — at least as now preserved — cover every year and 
 include all the colonies.' If such were the case, a fairly complete picture of 
 American colonial commerce might be drawn, although, even then, it would 
 be possible only to estimate, and that as the result of great labor, the number 
 of cargo tons comprised year by year in the outbound and inbound maritime 
 commerce of the colonies. The value of the trade was not reported by the 
 naval officers, but by the customs officers, if at all. It was, accordingly 
 
 ^Under the head of Board of Trade Papers in the Colonial Office Catalogue, Public Record 
 Office, London, the Naval Office Lists cover the trade of the following colonies for the designated 
 years: Carolina, 1716-19, 1721-35, 1736-67; Georgia, 1752-67; Maryland, 1689-1702, 1751-65; 
 Massachusetts, 1752-65 (see New England) ; New England, 1686-1717; New Hampshire, 1723- 
 69; New Jersey, 1722-61; New York, 1715-65; Virginia, 1700-06, 1725-70. In addition to the 
 foregoing "lists," unconsecutive returns or lists are to be found scattered throughout the Board 
 of Trade Papers; but these returns would probably only partially fill in the gaps of the lists 
 covered by the above-named catalogue. Moreover, it will be noted that Pennsylvania and 
 Delaware are not included in the foregoing list of colonies. 
 
Eighteenth Century to Outbreak of the Revolution. 113 
 
 necessary to content ourselves with a partial presentation of the tonnage and 
 value of American commerce during the period covered by this chapter, and 
 the same situation obtained both as regards the seventeenth century and the 
 years from 177 c to 1789. Fortunately, the facts for a period of five years 
 shortly before the Revolution are available. 
 
 The records kept by the customs office in Great Britain contain the quan- 
 tities and the values of the commodities composing the export and import 
 trade of Great Britain with her several American colonies; and, to show the 
 value and the fluctuations in that trade, a table is appended to this chapter 
 on pages 120 and I2i,giving the value of the trade of the mother country, year 
 by year from 1697 to 1776, with the colonies as a whole, and also the trade with 
 the usual subdivisions of the colonies — ^New England, New York, Pennsyl- 
 vania, Virginia and Maryland, Carolina, and Georgia. The figures in this 
 table, with the exception of the totals, were compiled in 1776, from the cus- 
 tom-house records, by Sir Charles Whitworth, a member of Parliament. The 
 original report by Whitworth is in the Public Record Office, London, being 
 Volume 623, Board of Trade Papers, Commercial Series II, and entitled State 
 of Trade of England in its Imports and Exports, i6q'/—I773, distinguishing each 
 country. With preface and introduction. Written in 1776 by Sir Charles 
 Whitworth, M. P. From Custom House and other official records. This volume 
 contains: (i) Imports and exports compared with balance of each country, 
 1 697-1 773; (2) trade of England arranged under the particular head of each 
 country. In this volume figures for the trade with New England, New York, 
 Pennsylvania, Maryland and Virginia, Carolina, and Georgia are brought 
 down to 1 801. 
 
 In 1776, Sir Charles Whitworth published a volume entitled State of Trade 
 of Great Britain in its Imports and Exports, Progressively from the Year i6g7f 
 Also of the Trade to each particular Country, during the above period, distinguish- 
 ing each year. In two parts. With a Preface and Introduction, setting forth 
 the Articles whereof each Trade consists. This printed volume brought the 
 tables down to 1773, but in the copy of this volume in the Library of Congress, 
 Washington, the tables for the trade with New England, New York, Pennsyl- 
 vania, Maryland and Virginia, Carolina, Georgia, and Florida have been con- 
 tinued, with pen and ink, from 1773 to 1801, the facts for these years having 
 evidently been copied from the Board of Trade volume above mentioned. 
 The Library of Congress volume also contains a manuscript table giving the 
 "Statistics of the Number and Tonnage of Vessels between Great Britain and 
 North America and the West Indies, 1771-1801." 
 
 Whitworth's tables of the value of Great Britain's export and import trade 
 with New England, New York, Pennsylvania, Maryland and Virginia, Caro- 
 lina, and Georgia were reproduced in a single consolidated table in the first 
 issue of Hazard's Register, Vol. I, pages 4—5. Hazard's table, with the addition 
 of columns and of totals, is the one appended to this chapter. 
 
 2. DOCUMENTARY SOURCES AND OTHER REFERENCES. 
 
 (A) Documentary Sources in England. — The chief sources of information 
 regarding the commerce of the American colonies are in London and especially 
 in the Public Record Office and the British Museum. The scope and general 
 value of the documents in these and the other public collections in London are 
 briefly but admirably stated by Professor C. M. Andrews, in his paper on 
 "Materials in British Archives for American Colonial History" in the Ameri- 
 can Historical Review, X, 325-349 (1904-05). Detailed accounts of docu- 
 mentary materials in London are to be found in C. M. Andrews, Guide to the 
 Materials for American History, to 1783, in the Public Record Office of Great 
 Britain. Vol. I, The State Papers; Vol. II, Departmental and Miscellaneous 
 
114 History of Domestic and Foreign Commerce. 
 
 Papers (1914); and in Andrews and Davenport, Guide to the Manuscript 
 Materials for the History of the United States, to 1783, in the British Museum, in 
 Minor London Archives, and in Libraries of Oxford and Cambridge (1908). These 
 three volumes constitute Publications Nos. 90 and 90A of the Carnegie Insti- 
 tution of Washington, D. C. The documents of greatest interest naturally are 
 (i) those to be found in the Treasury Papers, particularly the series of Treasury 
 Accounts, including the Quarterly Accounts; (2) the Colonial Office Records; 
 and (3) the Board of Trade Papers, Commercial. 
 
 (i) The Custom House Accounts comprise 396 volumes covering the entire 
 eighteenth century. In this series will be found information regarding the 
 duties collected at the colonial ports and the customs revenues. Statistics of 
 imports and exports, however, are not contained in the treasury accounts, with 
 the exception of the years 1 768-1 772, inclusive, there being a Ledger of Exports 
 and Imports, America, for those five years. In the Admiralty Documents, 
 Miscellanea, there is a tabular statement of exports and imports for each 
 colonial port for 1768-69. So far as I have been able to discover, these are the 
 only systematic statistical tabulations of exports and imports for any portion 
 of the entire colonial period. 
 
 (2) The Colonial Office Records in the Public Record Office contain two 
 classes of documents, each of great value — ^the "Naval Office Lists" and the 
 "Board of Trade Papers and Journals." The Naval Office Lists, spoken of 
 here separately, although they are a part of the Board of Trade Papers and 
 Journals, are reports made by the naval officers appointed by the governors 
 for each important port, and contain detailed shipping returns, i. e., the facts 
 in regard to the entrances and clearances of vessels, the size of the vessel, and 
 the kind and usually the quantity of cargo. The Naval Office Lists, however, 
 give no information as to tonnage and value of cargoes carried into and out of 
 the colonial ports. Moreover, the Naval Office Lists cover only a part of the 
 colonial period, the returns being complete for none of the continental colonies. 
 
 (3) The most voluminous source of information regarding the details, othei: 
 than statistical, of the trade of the colonies is to be found in the Board of Trade 
 Papers and Journal comprising the governors' correspondence, entry books, 
 abstracts of letters, minutes of council and assembly of the several colonies, 
 records of grants of land, the Naval Office Lists (above described), and some 
 custom-house accounts. 
 
 In addition to these Board of Trade Papers and Journals, there is another 
 series comprising over 600 volumes discovered during recent years. This 
 series is now known as the Board of Trade Papers, Commercial, and is divided 
 into two series. As Professor Andrews says: these "two series of commercial 
 papers must have been originally a part of the Board of Trade Papers." In 
 most of these volumes the information contained is so indefinite as to make 
 their value to students of commerce comparatively slight. There are some 
 exceptions to this, however, notably volume 623, Board of Trade, Commercial, 
 Series II, which contains an account of " State of trade of England in its 
 imports and exports progressively from the year 1697; also of the trade of each 
 particular country during the above period distinguishing each year. In two 
 parts, with a preface and introduction setting forth the articles whereof each 
 trade consists. 1776." This is the origin of the volume by Sir Charles 
 Whitworth, to which reference is made below. 
 
 Some assistance to an understanding of the documents in the Public Record 
 Office may be gained from reading parts of a paper by Louise Phelps Kellogg 
 on "The American Colonial Charter," published in the Annual Report of the 
 American Historical Association for IQOJ, I, 185-342. One section of this 
 essajr gives the history of the Board of Trade and Plantations and tells of its 
 relation to the Colonial Office and to the Commissioners of Customs. The 
 
Eighteenth Century to Outbreak of the Revolution. 115 
 
 Board of Trade and Plantations existed from 1696 to 1787. Until 1768 there 
 were two Secretaries of State, one for the northern department and one for 
 the southern department. The Board of Trade was subordinate to the 
 Secretary of State for the Southern Department, who had jurisdiction over 
 Irish and colonial affairs. In 1763 a third Secretary of State was created (for 
 Colonial Affairs) and the Board of Trade became subordinate to that officer. 
 After this time the Board soon became of little importance and, even before 
 this, from the time of the close of Queen Anne's reign, it had little real 
 authority and did not exercise much effective control in the administration 
 of colonial affairs. 
 
 The Board of Commissioners of Customs, which had charge of the adminis- 
 tration of colonial revenue acts, was established by the law of 1663. From 
 1670 to 1688 there was a Receiver-General of Customs. The following para- 
 graph from Miss Kellogg's essay contains much information in a brief form 
 regarding the customs officers, the naval officers, and their relations to each 
 other: 
 
 The Board's direct connection with the colonies was through the Governors who were instructed 
 to correspond with the commissioners, and to send them, every three months, lists of clearances, 
 and also reports of illegal trading. The governor's agent in matters of trade was the naval officer 
 whom he was empowered to appoint, but who was required by 7th and 8th William III to give 
 security to the commissioners of customs. The chief agents of the custom's board .... were 
 the collectors of the customs whom they appointed for every port, and the surveyors-general 
 of customs, of whom there were two in America, one for the southern and one for the northern 
 department." 
 
 In addition to the manuscript documents in the Public Record Office and 
 other depositories of London, there are numerous manuscripts and a large 
 number of printed works in the British Museum. The most valuable is the 
 Egerton No. 2395 collection, with which students of American colonial history 
 are familiar. 
 
 The materials on commerce in the various public depositories in London 
 were made the subject of a special report, prepared by Dr. Albert A. Giesecke, 
 of Philadelphia. Dr. Giesecke's report, while incomplete, is valuable. It is 
 in typewritten form, unpublished, a copy being in the Library of the Univer- 
 sity of Pennsylvania, Philadelphia. 
 
 (B) Documentary Sources in the United States. — Only a small part of the 
 documentary material in the British archives has yet been or ever will be copied 
 and brbught to the United States. The most valuable collection of manu- 
 script transcripts are: 
 
 (i) Board of Trade Papers in the library of the Historical Society of Penn- 
 sylvania, Philadelphia, as follows: 
 
 Board of Trade Papers— Proprieties, 1697 to 1776, 24 vols. 
 Board of Trade Papers— Plantations General, 1689 to 1780, 31 vols. 
 Boardof Trade Journals, 1675 to 1782,9Qyo\s. 
 
 Stevens, Facsimiles of Manuscripts in European Archives Relating to America, 1773 to 
 1783, 25 vols. 
 
 (2) Documents Relating to the Colonial History of the State of New York, 
 published in 13 volumes. The documents were selected and procured by 
 John R. Brodhead, who acted as agent under the authority of an act of the 
 State legislature of New York, passed in 1839. The papers were edited by 
 E. B. O'Callaghan. 
 
 (3) Colonial Records of North Carolina, collected and edited by W. S. Saun- 
 ders, vols. I to 10, 1662 to 1776 (1866 to 1905). Mr. Saunders's historical 
 surveys introducing the volumes are of exceptional value to the student of 
 general history. 
 
ii6 History of Domestic and Foreign Commerce. 
 
 (4) Colonial Records of Georgia, compiled by Allen D. Candler, vols, i to 
 17, 1732 to 1774 (1904 to 1908). 
 
 Most of the other original States have published the records and acts of 
 their colonial assemblies. These records, however, contain few if any eco- 
 nomic "documents," and very little, except laws, regarding commerce. 
 
 In the published colonial records of New York and North Carolina very 
 little specific information concerning the volume of commerce as a whole or 
 as regards particular commodities composing the commerce is to be had. 
 Some idea may be gained as to the development of trade, the manner in which 
 it was carried on, and the countries with which there were commercial 
 exchanges. Naturally much is to be found regarding the evasions of trade 
 laws, a subject that was constantly troubling the governors and customs 
 officers. There were no statistical records kept in the colonies and conse- 
 quently none will be found in the colonial records. 
 
 (C) Statistical Sources. — ^The original statistical sources regarding colonial 
 commerce are practically confined to the volume above mentioned — Ledger 
 oj Exports and Imports, America, 1768-1772. Detailed but incomplete and 
 untabulated statistical material regarding shipping and concerning the kinds 
 and quantities of commodities exported and imported may be gathered from 
 the Naval Office Lists. There are three secondary statistical sources readily 
 available: 
 
 (i) Sir Charles Whitworth's volume entitled State of Trade of Great Britain 
 in its Imports and Exports, Progressively from the Year 1697; Also of the Trade 
 to each particular Country, during the above period, distinguishing each year. In 
 two parts. With a Preface and Introduction, setting forth the Articles whereof 
 each Trade consists. Information regarding the scope of this work and its 
 origin is given above. 
 
 (2) The tables in Macpherson's Annals of Commerce, III, 570-573. For 
 explanation of Macpherson's tables see footnote to table, page 1 19. 
 
 (3) The tables in the appendices to Lord Sheffield's Observations on the 
 Commerce of the American States, London, 1783. Most of Sheffield's tables 
 are confined to the trade between Great Britain and the colonies, but there are 
 three tables not thus restricted. Appendix IV reproduces a table prepared 
 by Thomas Irving, Inspector-General of the Imports and Exports of North 
 America, and Register of Shipping, that gives an account of the imports into 
 the North American colonies from southern Europe, Africa, and the West 
 Indies. The figures in this table include all the provinces of North America, 
 Newfoundland, Bermuda, and Bahama, and cover the year beginning January 
 5, 1770, and ending January 5, 1771. The chief articles and the value for 
 each class of articles from each source are given. Appendix V gives a similar 
 table presenting the quantity and value of articles exported from the colonies 
 to Great Britain, Ireland, southern parts of Europe, Africa, and the West 
 Indies. This table is also reproduced from a report by Thomas Irving and 
 is for the year 1770-71. The third instructive table in the appendix to 
 Sheffield's volume is the short one reproduced in this chapter, page 89, giving 
 the average annual value of the exports and imports for each decade from 1700 
 to 1780, for "that part of America now the United States." 
 
 (D) Contemporaneous Writings. — ^Among the books upon commerce written 
 during the eighteenth century from which the student of American history 
 may derive some information are the following: 
 
 W. Wood, A Survey oj Trade, together with Considerations on our Money and Bullion, 
 
 (London, 1718.) 
 Joshua Gee, The Trade and Navigation of Great Britain Considered. (London, 1729.) 
 
Eighteenth Century to Outbreak of the Revolution. 117 
 
 Malachy PosTLETHWAYT, Britain's Commercial Interest Explained and Improved. In 
 a Series of Observations on the Several Branches of our Trade and Policy. (2 vols., 
 London, 1747.) 
 
 Ibid., Universal Dictionary of Trade and Commerce. (1757.) 
 
 John Dickinson, Letters from a Farmer in Pennsylvania to the Inhabitants of the British 
 Colonies. (1769.) 
 
 John Lord Sheffield, Observations on the Commerce of the American States. With an 
 Appendix containing Tables of the Imports and Exports of Great Britain to and from 
 all Parts, from 1700 to 1783. Also, the Exports of America, etc. With Remarks on 
 those Tables, on the Trade and Navigation of Great Britain, and on the late Proclamation 
 etc. (London, 1784.) 
 ^- Richard Champion, Considerations on the Present Situation of Great Britain and the 
 United States of America, with a view to their Future Commercial Connections. (Lon- 
 don, 1784.) 
 
 George Chalmers, Introduction to the History of the Revolt of the American Colonies, being 
 a Comprehensive View of its Origin from the State Papers in the Public Offices of Great 
 Britain. (2 vols., Boston, 184S.) 
 I Benjamin Franklin, The Interest of Great Britain Considered with Regard to the Colonies. 
 (1761.) 
 
 Edmund Burke, Speeches upon Conciliation with America and upon American Taxation. 
 
 (E) Recent Writings. — 
 
 C. M. Andrews, Colonial Self-Government. (1904.) 
 
 W. B.Weeveh, Economic and Social History of New England. (2 vols., Boston, 1890-1891.) 
 
 W. MacDonald (Ed.) Select Charters and other Documents Illustrative of American History, 
 
 1606-1775. (New York, 1899.) Also, Documentary Source Book of American 
 
 History, 1606-1898. (New York, 1908.) 
 E. B. Greene, Provincial America, 1690-1740. (Amer. Nation Series, VI, New York, 
 
 I90S.) 
 J. A. Doyle, English Colonies in America. (S vols.. New York, 1882-1907.) 
 Edward Channing, A History of the United States. (Vol. I, 1000-1660; Vol. II, 1660- 
 
 1760; Vol. in, 1761-1789; 1907-1912.) 
 WooDROW Wilson, History of the American People. (S vols.. New York, 1902.) 
 J. W. Garner and H. C. Lodge, The History of the United States. (4 vols. Vol. I 
 
 treats of the colonial period. Philadelphia, 1906.) 
 H. C. Lodge, A Short History of the English Colonies in America. (New York, 1881.) 
 H. W. Elson, History of the United States of America. (One-volume edition. New York, 
 
 1904; same work in illustrated five-volume edition, 190S; in the five-volume edition 
 
 the pre-revolutionary period is covered in Vol. I and the first chapter in Vol. II.) 
 E. M. Avery, A History of the United States and Its People. (Vols. I-VII, Cleveland, 
 
 1904-1910.) 
 R. G. Thwaites, The Colonies, 1492-1750. (Epochs of American History, rev. ed.. 
 
 New York, 1897.) 
 G. P. Fisher, Colonial Era. (Amer. Hist. Series, New York, 1892.) 
 W. E. Burghardt Du Bois, Suppression of the African Slave Trade to the United States 
 
 of America. (1896.) 
 
 For detailed lists of historical works dealing with the eighteenth century, 
 consult 
 
 Channing, Hart and Turner, Guide to the Study and Reading of American History. 
 
 (New York, 1912.) 
 Justin Winsor, Narrative and Critical History. (8 vols., Boston, 1884-1889). 
 J. N. Larned, Literature of American History. (Boston, 1902.) 
 A. B. Hart (Ed.), Source Book of American History. (New York, 1900.) 
 
 The bibliographical notes in Channing and Doyle and in the various volumes of the 
 American Nation Series contain many helpful references. 
 
 The general histories of the United States contain but little material for the 
 student of industry and commerce. 
 
ii8 
 
 History of Domestic and Foreign Commerce. 
 
 «5 
 
 s 
 
 
 « o 
 
 ^ <^ 
 
 Si 
 
 1 fe 
 
 ■S <». 
 
 IS 
 
 II 
 
 ^■^ 
 =!§ 
 Is 
 
 
 Is 
 
 B 
 I 
 
 
 1 
 
 .^t^t^.vO'^O'OOO'rtW 
 
 OOOOfOOfO»H^OO*«*^00^0«00\COOOOO 
 
 
 
 *-lO**f*5^CS»Ot»00 
 
 ^ ^ ^ ^ ,-1 ^ 
 
 
 
 .S o 
 
 »H 00 00 t-- 1/5 
 
 0\ « 00 ro « 
 
 II^JA^AP. - II" S K S S S S3 " :^_3 2 S 5 g S § S S 
 
 1 
 
 
 fC N CS 
 
 
 
 ^h^i/Tm u^ w .^ iH O ^ 
 r* <N « -^ tr> y* 
 
 o « ^ »i^ o\ 
 
 CO f*5 fO.OO •H 
 
 
 SO 
 
 
 H 
 
 
 
 
 
 
 
 
 
 
 
 1 
 
 r^ r*3 ^ M N vo o ^D ^ -* in -* 00 o 00 vH « '::St5^ S !2 2S 
 
 ^tCo^^OO«C000CSC0VO OO VOVOOS^'H '^^'^ 
 
 -h" oToT t-''o'o'es'oo'''*''-H''d'T»r 0-* ^"^Tl S*"****" 
 
 fO t^ »-l 0\ O 00 
 r-) 0\ 00 N O ^ 
 
 « » <N m ts o 
 
 w to W O 00 o' 
 
 >o >n ni m « 
 
 
 a 
 
 f^ 
 
 
 
 \0 *f) "^ 
 
 00 
 
 ID W 
 
 
 "^ 
 
 r^ "I 
 
 
 
 
 
 
 
 
 
 
 
 C4 
 
 ■ 1^ 
 
 O 
 
 
 • -1-1 -a 
 
 
 
 • • PS 
 
 : : ^ 
 
 • SO t*. • O 
 
 U 
 
 
 
 O '^ 
 
 
 
 
 f*5 
 
 C^ 
 
 • 
 
 
 
 
 
 
 
 
 
 
 
 
 r* 
 
 
 o 
 
 . VO -. 
 
 o 
 
 s 
 
 
 
 O 
 
 es 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 T*3 
 
 • OS w 
 
 m 
 
 < 
 
 
 
 t^ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 :g 
 
 '^ 
 
 o 
 
 
 
 
 
 
 
 
 
 cs 
 
 H 
 
 
 
 
 
 
 
 
 
 
 
 m 
 
 
 
 
 
 
 
 
 
 
 V 
 
 
 lO o c 
 
 
 ^ « • 00 00 lO 1^ 
 
 
 f*^ CS 00 fO 00 
 
 t^ 
 
 
 •O\0esorot^'«*<00oo 
 
 1 
 
 
 
 cs 
 
 m 
 
 cs 
 
 
 00 00 •I/' 
 
 ro ID fO 
 
 
 00 « 
 
 
 
 • -«*< ro 00 «>. ^ 
 
 or- ws o ■* 
 
 
 
 VO lO 
 
 
 
 O lO • 0\ **• Ov fO 
 
 
 cs 
 
 
 
 ■■^'*<OWCOOsiOOCSiO 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ►-^ 
 
 
 
 
 t^ 
 
 
 
 O On • cs 
 
 "iH & 
 
 
 
 
 
 • tn TjTro es't^ lo es o X 00 
 
 •u 
 
 
 
 ir 
 
 lO 
 
 
 
 o CS ■ o e«« ■* 
 
 
 
 
 
 • cs 
 
 ss 
 
 in ■* 
 
 ss 
 
 f*" 
 
 
 
 M -^ 
 
 
 
 
 
 o 
 
 
 
 
 
 
 
 
 s 
 
 
 H 
 
 
 
 
 
 
 
 
 
 
 
 "o 
 
 • ■ ft* o 
 
 
 • \o r* Oi iH 
 
 ^ *-H VO 
 
 - . Pfj • . • lO • 
 
 • • T* 
 
 • ■* 
 
 • o « ■ o 
 
 
 
 
 ^C 
 
 « 
 
 
 
 00 O ■<*< M M « •* 
 
 
 t* 
 
 
 • t^ 
 
 
 
 
 o 
 
 • ■* 
 
 • rt Ov 
 
 o 
 
 •5 i. 
 
 
 
 
 « 
 
 
 
 CO CO r* M •* lO O 
 
 
 M 
 
 
 
 
 
 
 in 
 
 ■ N 
 
 • « N 
 
 « 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 d o 
 
 
 
 Tf 
 
 iH 
 
 
 
 w ifl 
 
 ^po oo'w 
 
 
 
 
 
 
 
 
 CO 
 
 
 ■ m « 
 
 
 o W 
 
 - ^ 
 
 
 
 
 00 
 
 
 T-* 
 
 
 • •* t^ 
 
 H 
 
 
 
 
 
 
 
 
 
 
 •d 
 
 ■ c 
 
 
 
 o »o fO c 
 
 • 1/5 . 
 
 • ir* m • • cs • 
 
 . . n 
 
 
 
 a 
 
 
 
 IT 
 
 
 
 
 ir> CS 00 IT 
 
 • 00 
 
 
 ■ vO 00 
 
 
 • CS 
 
 
 
 
 00 
 
 
 
 • f*5 
 
 
 
 
 a 
 
 
 
 ^ 
 
 
 
 
 Tt< O *H 
 
 ■ o. 
 
 
 ■ M 
 
 
 
 
 
 
 •o 
 
 
 
 • » 
 
 
 
 
 a 
 
 
 
 
 
 
 
 lO 
 
 ■ oT 
 
 
 
 
 
 
 
 
 PO 
 
 
 
 • t- 
 
 
 
 
 u 
 
 
 
 
 
 
 
 o 
 
 - '^ 
 
 
 
 
 
 
 
 
 
 
 
 
 o 
 
 
 
 
 f*> 
 
 «H 
 
 
 
 
 
 H 
 
 
 
 
 
 
 
 
 
 
 I 
 
 
 
 
 
 
 
 
 
 
 r*5 t* »r 
 
 
 
 »n NO f*^ O 
 
 • OS ■ Tj 
 
 \0 t^ c^ • • r*5 es -H 1- 
 
 •H « r*j 
 
 
 • O r^ • 
 
 
 c 
 
 *^ f^ VC 
 
 
 
 VO 00 M 00 
 
 • r*5 • C 
 
 00 ^ O 
 
 - Ov O t^ »C 
 
 ^ so 
 
 
 
 • 95; ' 
 
 
 CQ 
 
 -H t* OC 
 
 
 
 ■<t O w t* 
 
 • t^ . \C 
 
 t^ Tl 
 
 • »0 CS o» ^ 
 
 CS 
 
 
 
 . *o o • 
 
 
 -!-> 
 
 ^^ ■<* 
 
 
 
 t^c») vO^ 
 
 " ^^ ^ ^ 
 
 »0 CS 
 
 • ^"io"rs" 
 
 
 
 
 • •* • 
 
 
 
 
 
 
 (N 
 
 - ^ ■ ^. 
 
 
 • 00 *H 
 
 
 
 
 r* . • 
 
 £i 
 
 
 
 
 
 
 \n w 
 
 
 
 
 O 
 o 
 
 
 
 
 
 
 
 
 
 
 H 
 
 
 
 
 
 
 
 
 
 
 i 
 
 
 
 1 
 
 
 
 @ 
 
 
 
 g) 
 
 
 
 
 
 
 ® 
 
 
 
 !1) 
 
 (g) 
 
 ■ E 
 
 > 
 
 * 
 
 
 1 
 
 
 
 
 
 
 i. 
 
 
 X 
 
 ■ ■ 3 
 
 
 
 
 
 
 
 
 
 
 n 
 
 a 
 
 ! 10 
 
 • 3 
 
 
 :| 
 
 t-i 
 
 1 
 
 1 
 
 a 
 
 1 
 
 11 
 
 il 
 i 
 
 PL4 Xf 
 
 b ° 
 
 ^1? 
 
 1 
 
 a 
 
 III 
 
 "2 
 
 J 
 
 1 
 
 C 
 
 oj S m S 
 
 • ir 
 
 * c 
 
 m C 
 
 II 
 
 tr 
 
 1 
 
 1 
 1 
 
 S : 
 
 (— 1 l-H p 
 
 C 
 
 ■1 
 s 
 
 1- 
 
 Is 
 
 il 
 
 Si 
 
 .•S-5 
 mis 
 
 ■ .D 
 
 ■1 "i 
 
 • 3 
 
 •g g 
 
 c;5 
 
 ill 
 
Eighteenth Century to Outbreak 0/ the Revolution. 119 
 
 
 rsesi/^o,occ<»^csiooou^»i^^oooo*vo»oooO\^'*ovoocsf' 
 SJJ.^!C2S"2!2'*^0'**~'*f~ooot-.-*ooooooi^ioooi>t-vc 
 
 _ » ■<l<_N__'*_N MCS-H«rt«-*-*NvO\O00t^cS-<Jlrt.<lit^«00Tl 
 ts or«r»r;* « « 00" ■,!.■" f,"f,''„"'oo~t-."T|ro'Tirrtrtt-.-To''co~>C 
 
 3,356,159 10 2 
 SI "st^j. 17 n 
 
 
 i22S ■■*S.'2'*2!3'5 •«'H'*<»)«'Ooo-i*ic-<i^>o -t^ ■ n f 
 fS 2 S • ■" g «2 2 ts ■* ■* ■ « r~ « N 00 t~ 00 0\ o\ w -m • ■* p. 
 ^"1. . ; _"*!, °„" ° -Kjooo — Kjmortiot^vo .00 .rtu- 
 
 "» -00-1 . 10 rt ■* 10 « « ■ ON .OOP. 
 *^ 10 00 t^ w *- 
 
 in" on 
 
 • 
 
 - 
 
 ■ 
 - 
 
 
 
 
 • • • t~ ■* 
 
 - ■ • in t*5 
 
 00 
 
 : : :g 
 ■ ■ - 00 
 
 • • ■* 
 
 
 8,500 
 30 
 
 £87 -3 9 
 450 
 •> 4nn 
 
 00 c 
 
 
 00 
 00 
 
 85,035 
 
 3,149 
 
 640 
 
 £6,378 16 1 
 
 822 
 
 3,173 
 
 1,807 
 
 28 
 
 30 
 
 2 
 
 35,922,168 
 
 315 
 
 144 
 
 163 
 
 11,116,141 
 
 3,817,899 
 
 62,099 
 
 3,184 
 
 6,692 
 
 12,797 
 
 2,615 
 
 £1,569 "04 
 183,893 
 1 9.1a 
 
 00 Tt 
 
 s 
 
 00 
 00 
 
 •^ 
 
 
 
 
 IT 
 
 c 
 
 - 
 
 »o 
 
 OS 
 
 o\ 
 
 ^0 
 
 
 55 
 
 7,32 
 £116 13 
 
 
 
 486,07! 
 
 n 
 
 
 
 
 
 
 
 
 
 • 00 
 
 £9 
 50 
 
 " 185 
 
 C 
 OC 
 
 c 
 
 ■a « c 
 
 ^t-j ir 
 
 00 OC 
 
 Ov 
 
 00 
 
 •<ji 
 
 8,265 
 
 78,115 
 
 653 
 
 15,125 
 
 195 
 
 11 
 
 3,043 
 
 , £105 15 11 
 
 ' 6,013,519 
 
 10,582 
 
 3,710 
 
 4,921^020 
 18,912 
 
 £91,485 14 9 
 799,652 
 £904,981 14 
 800 
 
 ■^ c 
 
 ^O OC 
 
 00 ^ 
 
 10 
 
 1 
 
 1 
 
 C 
 J 
 
 Shoes, pairs 
 
 Ship stuff, bbls 
 
 Onions, value 
 
 
 
 g 
 
 E 
 
 E 
 
 .£ 
 
 I 
 
 'S3 
 
 
 
 1 
 
 1. 
 c 
 
 '1 
 
 9 
 
 Oil of turpentine, bbls 
 
 Masts, yards, etc., tons 
 
 Wednut wood, value «-> 
 
 Pine, oak, cedar boards, ft.^ 
 Pinp timhpr. tnn.s _ _ 
 
 C 
 
 t 
 
 Houses, framed. No Cjv . 
 
 Staves and headings. No .^ . 
 
 Hoops, No 
 
 Shook hogsheads. No 
 
 Cattle. No a-— s- ■ ■ 
 
 Horses, No (vil^. . . 
 
 Sheep and hogs. No 
 
 Poultry, dozens <jx .... 
 
 Furs, value .... ^.-^. SS). .... 
 
 Tobacco, value vL). . . . 
 
 1 
 
 Total value of articles 
 shipped as Ameri- 
 can produce 
 
 Foreign merchandise, 
 mostly from the 
 
 t. 
 
 1 
 
 "ci 
 
 c 
 (- 
 
 1 
 
 ■36 
 
 ,a - ^ 3 
 ^ 2 S'g 
 
 a a o *■ 
 < '5 O ^^ 
 
 S 1-1 o -yt^ 
 ■a 0! « a « 
 
 ^ 3 " S|3 
 
 m O a y SL 
 O £_, *J - 4) 
 
 o *J dJ ra 1*^ 
 i^-i ia oa +j 
 
 •a 2 siJ^ 
 
 ^ c K rt -o 
 
 I" 3 S a B 
 
 Ji S '" ■ 
 
 o rt 
 
 . CO .2 M 
 
 'Ml 
 
 ■" ■" *j a i3 
 ".&<« gn 
 
 " a ij ^ a 
 
 0, <4 IH >» rt 
 
 !r1 «. rt O 
 
 t- ^ M » f! 
 
 - O.J3 s <5 
 S Sen 03 
 
 1 .2 ° -S a 
 
 ,■^2 
 
 Cd 6) 
 
 ^ 1 M li .S 
 s~. ■" (u o n 
 
 -" ^ -n a il 
 
 §=" E »"3 
 S .S < ^ g 
 
 o «j ti "J .s 
 S n Z o 
 
 ta a W o u 
 » -8 ^ » 5 
 o d 2 o 
 
 Bfe' 
 
 W lO 5 
 +J * O 
 
 .2'= g'wii 
 
 ^ ^ flj o. 
 "J .S > 8 
 
I20 
 
 History of Domestic and Foreign Commerce. 
 
 ' 
 
 
 1 
 
 •a 
 
 a 
 
 e 
 
 
 i2 
 8 
 
 1 
 
 
 tlcSiOONO(*)Oe>qiO00«)00NOveSN^OOsiO-<tO«S««C\r0O\0^<Nr0OI^t^»O^« 
 
 .S 
 
 l-H 
 
 ....... 00 irt 
 
 tt^ *•'■■■•*•••••*'•'•■**;::::;:::::: : '^^o 
 
 " *-l 
 
 03 
 
 1 
 
 
 
 
 
 a 
 n 
 
 CJ 
 
 t 
 
 a 
 
 00^OOOO^OCS(N00OO\OsW'^O^«*-tP0l^i0Tt*r0O\Ot^'^f500f0iOV0'O00Tj*0\« 
 ^MTttrl<Oa\T(<Tj'Ot^OTt«0\iO'«Tj<00\t^»ONOQO«eSt'-COCNOO.-tO\MOf«^*^»^W^ 
 
 i/100'^»HM50eNvOOvTi<0'^OOOvOOr^f^'OI--tOiOO\OOt>.THeNt^ON(*5fr>fOOOTt<i-iOOO 
 
 ti 
 
 a 
 >< 
 
 ■<*iOC>IOOPOO^»«^COes*HO«Hf/).H'«J*0\000^-.ir)IOfC>OOOOfOrJ<Mt*)iOiOO»O.THWiO 
 
 WO\(N'<l<v0^r*J'^CSOOW1000«OvCS--tO\«^'OOn'HO\000*Hf*)\0^r*5^0v«t* 
 
 ■3 >> 
 
 •as 
 
 a 
 
 \0tO00»^fCWP^00(NiOiH^000SlOf0'<J*P0-^ONC^ir3Ot-'O'<^fC'<*<'<j<»-tiOM^WC0Oit*. 
 O*r0t^0000Os^ii^(N^O\O«r*)f*^0DOt^t^O\vOC^f^-Ht^iOcnOv00CO*OO*f^«*>l^00t* 
 t^^O'<i^^0W5WT^(*)OOvOM^l/^lOP000^<^lO0^O\^Ot^ff)^«0000C0©^0^OO^0^<SM1-^ 
 
 iiiwot*o\r*o\vot^infOt^oor40,roi^MOM^^o\«^Mt-»Mvoc>ooo\r^O»ni^'*QO 
 
 
 ioini-iOf^oor4<-ivoio(NO\»OMoo-<4*NOt^iDTt(oor>.OQO^O\0\'*(*i\Ooooot^MOO\» 
 
 CNt^O\^f*5t-*-<*^\0■^H-^O*H\0C0t^CT^O00^-C0O^■^fr^^0^nQ000t>.■.-lf>^MTH00^O•-^O 
 
 1 
 
 Ih 
 
 a 
 
 s 
 
 1— < 
 
 l^'*Tj*O\f^eSOvO\»Ot^ior0*-iTt<00'*t^t-<NMiflVO00TH00t^<S-«l<O\'*Ov00O\WO«>O 
 ^P;OCNOTt<Os*^Of*50(NOOO*0\Oro{NOOTf*0'^vOcr)'*a*0\(NOrOWt^O\0\voO\VO 
 
 c*^OioOfDoooo«0(*)r^ooio-<i*-<i<oo*wooiot^Oio»nf*50NfOM'00\-*wioes'0»n 
 
 CSOr^OO(NOsO\'^f^^-«t*Ou^o(rO\Oo"t^ --^t^ «-«esi«Sl>rrt<'»-<\o"ioCrNi^'^r^Oroo''^»HCr 
 
 en 
 
 1 
 
 
 
 .2 
 
 a 
 
 S 
 
 1— 1 
 
 0\CvC^OO*-t<N^N00iOO\t^inOM<OP00vr^O'Ou^r^rl-00f^OOOMrt<O'0'OOt^ 
 
 CS'^'^r*5CNiHCSNrOCS(Nf*;(*)CS,Hrt<'^miO"*\Ol/iroiOiO»OOr^OO^OO'0^*CvOO 
 
 
 a 
 
 
 1 
 w 
 
 1 
 
 a 
 
 i£:^^;::'S2?^92;9i2^®'^^^®'^°0'^"^ooortvocseNooo'Ooot^a^oc\oor- 
 
 1 
 
 
 Year. 
 
 
Eighteenth Century to Outbreak of the Revolution, 
 
 .121 
 
 \n -^ ^ 
 
 1^ *o (S 
 r< *o « 
 
 ^ 00 t^ 
 w5 \o r* 
 lo >o « 
 
 
 «^»Os\0-*l*f*30»H^O\MO\^(*500Tt*«^O^at--HroOvCSi-i»OTt* 
 
 ^O^*^O00O^0000^OlOr*^^00C^^')e^^^TJ^^^^OlOt^(^vO^O^^^OeSO^000^^c*^O\S 
 
 lO C*« »^ M »0 
 
 r^ iH (*5 vO *H 
 
 o T^ ^ w ^ 
 M o\ o-*o »o 
 
 ^ t^ Ov On lO 
 
 O 0\ lO T-t 
 
 »OMvOOO*-tt-*»-iONMO( 
 «*5(*5t^rOr4C4^MMOOi 
 
 
 
 ^(s'rTic vo'f^*^ 
 
 M b» M 
 
 00 O ■ - «^ r^ ^ 
 O ■ ■ (N OS 
 W3 - - 
 
 - cs 
 ■ o 
 
 ooooiooo^e>iOfOf*)vOMoor>» 
 
 OfONONOfO*0^0»0*Or*)^t-» 
 
 0\fiTHNco»oPOTHH^'*Ovioi^ 
 
 ■^ C^ (S fO -^C ' 
 
 On f^ »0 O C^ ^ *-H 
 
 *H ^ fo w5 -"i* r>. 
 
 ^OOTj<MOi»Of*i^'OMO(NOfO'-it>.t-.0\ 
 
 ^*o^^OMsoe^oo^*loo^-f*^^-^QOO\T^^•^o 
 Oi-tr*iO^f*5'-iO00^esu^00Of^'O^io 
 
 ^ ^c*3t0iOr0^00»ONO»O00'OO*H 
 
 — -^ rt tS -H rt « rt « rt rt « N rt -. -J tl -H tS tS IM rt N « t<5 O tS C-) m rt ■* •* m m 
 
 
 tS'* — 00-*«>OW)iOf>5Cvat-.0>0(S»Tlia)vOOC<>CMr<5ioO«'OQOCXlTl<tlOO\0\OOOt~ScSlO<^S.rt 
 
 -O rt ■* 
 00 00 9> 
 O «*5 t^ 
 
 '-"OOcoesNOio»/50N»oooTfOO*r^T-tNOPot*t^*^»-tt-»c»ioONi-iM^ooooTj<M(NvoOTj<oo»H • 
 
 ®2®^*'°^^"'0S'^00(SO'^<NiOt^'^mON00t-»O00iOON0NONM'«f(N00N000C>JWOf*5(N ■ 
 
 "nooesT*<u^^^Wf^ir)ONONO-*Owt^io^oo\o-^ooor*5iOPo^cs>?)'OOvfOt-.f<50NONt>.ON • 
 
 <N O •* 
 r* « O 
 -H r» r> 
 
 ■^oor^^c»-rt*oort*t--r40<Nf^ONt^>ONOf^iO'*Noooo*ioiooou^tnw3est^iooor^Of*5ooooiH • 
 
 ■^ifl^OO-«*'SO(NPnONOOOtOr>|-#'*J<<NiOC^OOf^Mf*)iDOTtt-Hio^QOt^iy3t^OO^MONMM 
 
 MMc>^o^c^r^p^cg^MM<Nrof*5PCPC^^fCcflf*5■^i^■^:^^i^NOlOTt'»OlOcnfr)■^M'T^^t>.o^^-f^>»o 
 
 o »o '^ 
 
 '0'<*''^r^a'ON— '0\fO'^OvNODONUDfOu:iiDOOOs»^MOOw«50NTfOO<-ir*5NOQO<NTj<00'*POOvO*0 
 -^J<wt0ONO'OMOMr*»-iiOi-if000lOI>.P^NOiO00V0<NiO00O0NOl^0N<N'>*0NONTj(OO**liOeS 
 P^OONOO\,-)t^OOt^'^(*)>OOOvOONO^i'J^*Or^OOCOr^^Ot^CStONONOONOOOOOOTf<QOO»^CS| 
 
 ~5 ■* O 
 w O. 00 
 fO fj «^ 
 
 pg^^^t^t^t^c*jC\ON<NTj<'^J<OOOONP»roONt^oOT(*r^'<JtW5»DNO\iO'^t^vo»-<ir)I^OOONMOOPO 
 ONON^^r*MmOCN—<ONONPOO^NOP'5t^oOM5*-fiOiCOiO'-t^iflO^OfCONOr/3t^eNOO»H»or* 
 T*(fri'*rf)iO'^u^rJ«CN:irJ<rJ4Tl<^iOT(*iO«ir)'^rf)Tt<Tj*fO»n'<*Tt*NOiotO'<tT(<Tt*rO-<tiOiOU^ 
 
 gs:3 
 
 1*3 oo »ri 
 
 OOM'^Oir)OTfOONTt*Ot^fOt^»O-«*"I>-\OON'Of«0'^00t^ONC^^00'«(*(Ot^NO^TjfO«00(NNOi/> 
 0,iOiOiO'^ON-«t*— *00ONOff)r0TH^NOT**'xtiONOe*»iO'OON\0O*u^ONN0wTiDOO00T(<OTfUDNO'O 
 ^0■«*''*^«.0^^^*:<N<N'0'*(r)NO^>.0\'O^ONO'^*HTt<ON-HO^O■^■^■-^^o^r!00»HONOOt^O^■^vOfOfO 
 
 •^f00■^\O^■<*•^O-Hl^)O^r^-«*^^0^^^»nQ0t^O^lOT^Tt^O00O00l^'<*^^O■^!*^vOP0I^'^<NO^■«*00t^^OlOl-l 
 
 »0'*«»ONOioioo\i^t-*'0»ot^oot^f^^ONO'*'*'*oovoasOOOcof*ivoe<»t^roo«foeMOMw 
 
 r* 0« NO 
 
 ■rt *-H 00 
 
 es &. t^ 
 
 OOOOTt<OOQOI^NONOOONr^r*3Ttt-^OOOI^ONNCi^Of^^'«*0'^000000^-^VO'-HONlor/3MT-iMw 
 0\'«-tf^'^ior>(0*-*t*5t^r^'0-*ONr^*^(N'^(r>0*ONOOO»Ot^O*MiOTH":»Tt*0'^0'-HroiO»HNOcs) 
 
 — lON^-lO'-l>OtOTf*Hr*OOf*30N»-IOOONU7NOrCOl-ICOTt<t»*-tOWeS*-HOONO^'H»HNO^HNONOO»Ti< 
 
 O-HOlO'-l00tO^*00O^^*O^O^C(N-*00^r>O^00O<NOTt*wc«^M0^0000^O>r)OW0^^O00-^0^N0ON»O»^ 
 
 00i>^Of*500Ot-O'-<t^Oi>-M'^'-'<r>O'-iOTl<r^*-ii0^^»0"l'OO"OO\00\0\r^O00»-H^O^t^00 ■ 
 u^OO'*5f^'^^**oC\oo^^u^>^oow^^^«5■^fO^OO^t^M■^^oooor^T^\o^-^Tt^^^I/^pOT-^o^r^^*■.H^o(N • 
 
 t^'^000-^Of^-«t"r)^0\C\r^O\fOr^— ^C^OQ0rt^OTi^fClOr-*HlOO"^■^(^00O\O^O^0^'OO^MO\es^ - 
 
 «s«SH2S§S35-«B2ssl2sH5gS^il.iHSiiS§-53iir ^ 
 
 t^ lO ^ 
 
 O ifl ■* 
 f*: -t On 
 
 fOoooNoa<s^ot^f--rc^(NOOPri'^)fr>oor^poiiO<r>coO'<*»ooor4cor^o\0(NioNO(Niot^NOoooooo 
 ronioO\'*<*5No«Noo-<tCv>r>'-H'r.*0'^iONOtDr^»ONooor>i-^j<QOO\0\io<Nn'.HNOcor^o-<*<o«-H^ 
 
 00(N•^-^»-^^OOlOO00a^^^-*^f0N0lnNOOO^^^^N0^^O000N^00NO^^■^^0000^^C^lOO^0 
 
 lO -^ r^ 
 
 i-H »-( ^ 
 
 *ONO00■^■^^^)lOTt^Tf00-+P^^0'^MOO'O00■*ON•^■rt^--(0000P0^0■*i-^wr^^00NlOesl^OOt^eN 
 ^^^C^lN^^THi-i ^wtNfC'^-^TjiMfNCJw^CSNTliiOtniOiONONOOOI-^NOONOOWOOOO 
 
 ISSgs^iSlsiiHiis§siS5l^llSSS«s^liiSi2Sii53i 
 
 
 l*5r0O*H0000eNf0O0NOt^00friiOP0u^0N'-i^r0t')l~-'0NTt'*^000\'-i0N*00Nr^^OTt*t^M»-tiO 
 NOf^t^O^-5<f>^-«ii^O'^ONrO-+Ol^-*P^Tt<OONONONONfOTt*<riiOtOOO^OONNMC^NOt^^ 
 
 siH^SIissS^lsSgg2HH^Si^l§iS5|SJ_SJ^P^^^^^ 
 
 <N CN »C 
 
 00 t^ NO 
 
 (nO^NOfMOrOPnOOOOO'^ONONOOrO-^fC'OCsr^t^OiOI^'O'^-^COiO.^OOOOONOOONO-^iM'O 
 
 Tl♦iONO^»000^O^M'r)'*^ON0l^00O^O»HMPr)r}^lr)^Ot^00ONO^(S^2■^>2N0I--MaO*He^^rr) 
 
 ;^i*);^i^^^^Tf*Tt<-*^Tj^^Tj^^^i/^io»ou^io«oioi2;^io;0;ONONO;ONO^o^^ 
 
 r 
 
CHAPTER VI I. 
 PERIOD OF THE REVOLUTION AND CONFEDERATION, 1775-1789. 
 
 Indirect trade with Great Britain during the Revolution, 122. The effects of the 
 war upon American trade, 123. Effect upon American shipping and ship-build- 
 ing, 123. Reasons why trade was chiefly with Great Britain after the Revolution, 
 125. Conditions affecting American commerce from 1783 to 1789, 127. British 
 regulations affecting American commerce, 1783-179S, 128. Changes in destination 
 and routes of American foreign trade, 130. 
 
 Both the non-intercourse agreements of the colonies that preceded 
 the Revolution and the war jtself necessarily restricted the over-sea 
 commerce of America, because the trade of the colonies was mainly with 
 Great Britain; but the interruption to trade was not especially serious 
 after the first three years of the war. After 1778 foreign goods of great 
 variety and of relatively large quantities were obtained by resort to 
 privateering, and, fortunately for the American people, it was possible 
 to continue to engage in foreign trade by sending traffic via roundabout 
 routes to ports whereby the commodities exchanged became neutralized. 
 . Macpherson states in his Annals of Commerce (Vol. Ill, 591) that a 
 marked effect of the war was a great reduction of the direct, trade 
 between the thirteen colonies and Great Britain, and the growth of a 
 large indirect trade, carried on through numerous circuitous channels. . 
 "The British, Danish, and Dutch islands in the West Indies were 
 filled with British manufactures which were exchanged for American 
 provisions, lumber, tobacco, and other products to the great emolument * 
 of the dealers on both sides." The statistics of exports at the ports ^f 
 Great Britain indicated a large increase in the value of commodities 
 sent to Nova Scotia during the period of the war, and it is probably safe 
 to assume that many of these articles sent to Nova Scotians were subse- 
 quently smuggled into the United States. Moreover, for considerable 
 periods of time during the war. New York, Carolina, and Georgia were, 
 under British control, and while such was the case, British merchant 
 ships might enter from Great Britain and clear for that country. 
 
 The restoration of peace and the achievement of American inde- 
 pendence changed the status of the foreign commerce of the United 
 States. Before the war the greater share of the trade was with Great 
 Britain, which, by the Treaty of Paris in 1783, became a foreign 
 , country. While the British Acts of Trade had hampered American 
 commerce, they had also given British colonies many favors which 
 foreign nations did not enjoy in trading with England and Scotland. 
 When the United States became a foreign country most, although 
 happily not all, of the special commercial privileges which Great 
 Britain had previously granted were withdrawn. 
 
 The development of American trade during the years immediately 
 following the Revolution was hindered by the poHtical conditions 
 
Period of the Revolution and Confederation, lyy^-iySg. 123 
 
 existing in the United States under the Articles of Confederation. 
 The central government had no power to ^regulate commerce among 
 the States, nor to provide an adequate revenue, nor to estabhsh a 
 sound monetary system. Our relations with foreign countries were no 
 better, for though the central government could make treaties with 
 foreign countries, it had no power to compel the States to live up to 
 the treaties thus made. The country with which we had most of our 
 commerce refused to treat with the United States, and our international 
 treaties afforded but little assistance to the development of our foreign 
 commerce prior to the establishment of the National Government 
 under the Constitution. 
 
 The Revolution in America was fought to secure commercial and 
 industrial freedom through the establishment of political liberty. 
 The Revolution was caused primarily by the mercantile policy by 
 means of which Great Britain sought to monopolize the trade of her 
 colonies for the benefit of the people of the home country; and the 
 occasion of the war was the vigorous measures taken by the British 
 Parliament after 1763 to enforce the Acts of Trade with a view to 
 making the colonial commerce the source of revenue to be applied 
 towards supporting the administration of the British Government in 
 the colonies. The immediate occasion of the break between England 
 and America was the contest over the policy of making colonial com- 
 merce a source of revenue. While the American colonies disliked the 
 policy of trade monopolization and sought when possible to evade the 
 Acts of Trade, they did not seriously question the merit and justice of 
 ^ the general commercial policy of Great Britain. The Americans, how- ' 
 ever, or at least a majority of them, did object to having the trade of 
 the colonies taxed by the British Parliament. The Revolutionary 
 War was fought to secure freedom of trade and to obtain home rule 
 in the levying of taxes for the support of the government. 
 
 EFFECTS OF THE WAR UPON TRADE, SHIPPING AND SHIP-BUILDING. 
 
 The over-sea trade of the American colonies at the outbreak of the 
 Revolution and the effects of the war upon that trade, for reasons that 
 were stated in Chapter VI, can not be measured with strict exactness. 
 For six years ending in 1774, the annual average value of the exports 
 from the United Kingdom to the thirteen American colonies, according 
 to official British statistics, was £2,732,036. The annual value of 
 the' exports for the six years ending in 1789 was £2,333,643, the annual 
 average for the latter six years being £398,393 less. During the six 
 years ending in 1774 the average annual value of the imports into 
 Great Britain from the thirteen American colonies was £1,752,142; 
 while for the six years ending in 1789, the annual average was £908,636. 
 The average for the latter^ six years being £843,506 less per year than ' 
 for the previous period, it would seem that the British market for . 
 
' 124 History of Domestic and Foreign Commerce. 
 
 American goods during the six years following the Revolution was only 
 about a little over one-half what it had been during the six years before 
 the' Revolution. Most of this large decrease in the exports of the 
 tJnited States to Great Britain can be accounted for by the smaller 
 quantity of rice and tobacco exported. Before the Revolution the 
 colonies had a monopoly of the British market, American tobacco sup- 
 plied the British trade, and was distributed from London to many 
 parts of Europe. Indeed, four-fifths of the tobacco sent from the 
 colonies to Great Britain was reexported to other countries. During 
 and after the war, however, tobacco from other sections of the world 
 was admitted to the British trade and largely supplanted the American 
 article. Moreover, it is to be borne in mind that the Revolutionary 
 War compelled the temporary shifting of much of the over-sea trade 
 of ;jhe colonies from Great Britain to the Continent, and that it took 
 British merchants a few years subsequent to the war to regain the 
 commerce that had been diverted from them. During the six years 
 between the clqse of the war and the establishing of the government 
 under the Constitution, Great Britain recovered the trade that had 
 been lost. For reasons cited in this chapter, the American foreign 
 trade continued to be mainly with Great Britain. 
 
 As regards the proximate effects of the Revolution upon American 
 shipping, it is certain that the seven years of warfare must have been 
 injurious to all classes of shipping that engaged in the trade of the 
 United States with Great Britain, that between the United States and 
 ^ the Wfest Indies, and that employed in the general carrying trade of the 
 cbmmerce of the world. British shipping increased during the war, 
 while American tonnage fell off largely; but in view of the fact that all 
 ships, whether built in America or in Great Britain, were under the 
 British flag before the Revolution, it is difficult to determine just what 
 effect the separation of the colonies from the mother country had upon 
 the shipping employed in the trade between the United States and 
 Great Britain, although it can not be doubted that the shipping engaged 
 in the trade between America and Great Britain must have become 
 mainly British as the result of the Revolution. This would naturally 
 be so, because of the fact that the larger share of the tonnage engaged 
 ^n that trade before the war was owned and operated by British mer- 
 chants. American shipowners and traders, howevei", suffered chiefly 
 from the closing of the West India ports to American vessels by the 
 Treaty of Paris in 1783. The greater part of this large and profitable 
 shipping was changed from American to British by Great Britain's 
 policy of enforcing the Acts of Trade against American shipping. 
 
 Some indication of the effect of the Revolutionary War upon the 
 American shipping interests in general may be gathered from the 
 statistics of the shipping employed in the commerce of Great Britain 
 before and after the Revolution. Before the Revolution the commerce 
 
Period of the Revolution and Confederation, lyjS'^T^Q- ^-5 / 
 
 of Great Britain as a whole employed 7,694 vessels; of which, 2,342 
 were built in America, 4,092 were of British build, and 1,260 were con- 
 structed in foreign countries. At the close of the war the commerce 
 of Great Britain employed 7,580 vessels; of which, only 1,126 were of 
 American build, 3,562 were of British construction, and 2,892 were ' 
 secured from foreign countries. The immediate eflFect of the war was 
 not to increase the British-built ships in the merchant marine of Great 
 Britain, but to substitute foreign-built vessels for those constructed irv^ 
 America. Champion is authority for the statement that the tonnage 
 employed in the commerce of Great Britain as a whole amounted to 
 1,300,000 tons. He estimates that the tonnage of ships built in Amer- 
 ica was in the ratio to the tonnage of those built in Great Britain as 
 23 to 40 before the war, and of 1 1 to 3 5 after the war. Otherwise stated, 
 more than one-third of the British merchant marine consisted of Amer- ^ 
 ican-built vessels before the war, and the relation after the war was 
 that less than one-fourth of the total was of American construction. 
 
 Before the Revolutionary War ship-building was carried on much 
 more economically in America than in Great Britain. AsyLord Shef- , 
 field states: "The Americans were, before the Revolution, rapidly 
 increasing in the carrying trade, and, considering our situation and 
 circumstances, we had comparatively little of it." After the Revolu- 
 tion, however, British shipping was steadily supplanting the American 
 vessels in the world's general carrying\rade. The war had reduced the 
 tonnage in American ships; it had restricted their use in the trade of 
 Great Britain and in the commerce between the United States g,nd 
 that country, and had closed the entire British West Indies to shipping 
 owned in the United States. 
 
 REASONS WHY TRADE WAS CHIEFLY WITH GREAT BRITAIN AFTER 
 THE REVOLUTION. 
 
 Although the people of America fought the war for political liberty 
 in order that they might thereby secure freedom from British restraints;, , 
 upon American commerce, independence did not permanently divert 
 the foreign trade of the United States to non-British countries. By ; 
 the Treaty of Paris, Great Britain became to the United States a for- 
 eign country whose policy, like that of all nations, was to favor its . 
 own ship-owners and merchants, but the commerce of the United 
 States tended to be carried on increasingly with Great Britain instead 
 of the Continent. It was supposed by the people of the United States 
 that, when they were free from the restraints of British trade monopoly, 
 they would rapidly develop commerce with other European countries. 
 This, for several reasons, did not happen: 
 
 In the first place, the fact that the colonial trade had been mainly 
 with the mother country tended to cause the commerce of the United 
 States to remain with Great Britain. American and British traders} 
 
1 26 History of Domestic and Foreign Commerce. 
 
 knew their markets and were disposed to continue to trade in the com- 
 modities and in the markets with which they were familiar. 
 
 ^Another reason that tended to produce the same result was that 
 
 American commerce, not only in colonial times but after the Revolution, 
 was carried on very largely by the aid of British capital. There was 
 a scarcity of capital in America, and merchants in the United States 
 ■traded with British merchants whose supply of capital enabled them 
 to extend the necessary credit to American traders after, as well as 
 before, 1783. 
 
 Moreover, the foreign trade of America continued to be mainly with 
 Great Britain after the war of independence, because British traders 
 understood American business conditions much better than French, 
 Dutch, and Spanish traders did. The people of Great Britain knew 
 what goods were wanted in America. The common language of the 
 ^two peoples and their common blood contributed to the development 
 of their commerce with each other. 
 
 Again, Great Britain was developing in industry more rapidly than 
 was the continent of Europe, and hence was not only a better market 
 for exported foods but was also able better to supply America with the 
 manufactures which the people of the United States required. When 
 the British monopoly of American trade was terminated by the Revo- 
 lution and the staple articles of export from America were no longer 
 "enumerated," but were free to go to any market in the world, there 
 proved to be little demand for the articles outside of Great Britain, 
 where they had previously been sold. 
 
 Another contributory cause of the permanence of Great Britain in 
 the American trade was that in France, the most natural rival of Great 
 Britain in the American trade, the political situation prevented the 
 ^growth of a large foreign trade. 
 
 Lord Sheffield gives another reason why the Americans failed to 
 develop a large trade in Europe outside of Great Britain. The Ameri- 
 cans, he states, "have so few articles to send to Sweden or indeed to 
 any part of the North, that all the articles for the Baltic may be 
 imported through Great Britain to greater advantage than directly 
 from those countries if a drawback should be allowed on such articles." 
 In other words, Great-BrLtain was naturally the emporium and dis- 
 tributing-point for the trade of America with Europe. It was so at 
 that time; it has remained so to a large extent ever since. 
 
 One other reason that may be noted as in part accounting for the 
 control of American trade by Great Britain after the Revolution was 
 that many, if not most, of the staple articles of manufactures desired 
 by American buyers were made better in Great. Britain and sold more 
 cheaply there than in continental Europe. As an illustration of this, 
 Lord Sheffield cites the fact that "when France granted a sum of money 
 to Congress for clothing the American troops, Mr. Laurens, Jr., was 
 
Period of the Revolution and Confederation, lyy^-iySg. 127 
 
 employed to provide it; but instead of laying out the money in France 
 he went to Holland and bought English cloths and sent them to 
 America." 
 
 The period intervening between the close of the Revolution and the 
 establishment of the National Government under the Constitution has, 
 until recently, been pictured as an especially depressed period of Ameri- 
 can industry and commerce. The necessitous economic conditions, 
 were considered to have been due mainly to political causes, to remove 
 which the Constitution was framed and put into operation. It is true 
 that for a part of the period the economic conditions were unfavorable 
 and that the causes were partly political. In general, it may be said 
 that the Revolution was followed by a brief period of over-trading 
 which led in 1785 to a business depression that by 1789 had given way 
 to prosperity. 
 
 The interference of the Revolution with the foreign commerce of 
 America was greatest during the first three years of the war. When 
 the war broke out, colonial warehouses, for the most part, contained 
 few foreign goods, because of the agreements which the colonists had 
 made during the pre-revolutionary controversy not to purchase British 
 goods. Although commerce with England was prohibited both by 
 Great Britain and by the American States, trade was carried on indi- 
 rectly, and goods were secured by capturing British merchant vessels 
 to such an extent that, from 1778 to the end of the Revolution, foreign 
 goods could be obtained in most American markets. All kinds of 
 manufactured goods that had been imported from abroad prior to the 
 war were scarce from 1775 to 1778 and prices were correspondingly 
 high, but from 1778 on there was an increasing volume of imports, 
 and American manufactures developed rapidly. 
 
 During the latter half of the seven years of the revolutionary strug- 
 gle the people of the United States were fairly prosperous. Indeed, 
 Channing^ says: "The thirteen States . . . achieved their inde- 
 pendence by preserving their economic well-being, while the contest 
 with the sea-trading nations of continental Europe had sapped Eng- 
 land's strength for the moment." 
 
 CONDITIONS AFFECTING AMERICAN COMMERCE FROM 1783 TO 1789. 
 
 Industry and commerce were hampered by the absence of a good 
 monetary system. The paper currency issued by the Continental 
 Congress rapidly depreciated in value after the first year, and, had it 
 not been for the fact that local trade was mainly barter or the exchange 
 of farm products at the stores for manufactures, the degree of pros- 
 perity that prevailed during the latter part of the war period would 
 not have been possible. The most serious hindrance to commerce 
 and industry was the lack of land-transportation facilities. Food 
 
 ^History of the United Stales, III, 388. 
 
128 History of Domestic and Foreign Commerce. 
 
 might be plentiful in one section and scarce in a neighboring section. 
 The serious effect of there being no good roads was particularly felt 
 by the army, which suffered from the lack of clothing, food, and other 
 supplies when the articles needed were abundant in parts of the country , 
 not distant from the army. Of course, the poor provisioning of the; 
 continental army was in part due to the bad currency system and to the 
 poverty of the Government, but the chief difficulty was the lack of 
 transportation. 
 
 At the time of the close of the war, agriculture was being carried on 
 in most parts of the country under practically normal conditions. 
 Difficulties were encountered and risks were incurred in exporting 
 agricultural products, but this handicap upon agriculture was partly 
 offset by the excellent market furnished by the British and French 
 armies, who paid gold and silver for the commodities they purchased. 
 According to Channing,^ "at the end of the war people were living 
 in unwonted ease" as the result of the prosperity in agriculture and the 
 increase in foreign commerce during the latter half of the war. •"■"^ 
 
 It was natural that trade should have been exceptionally active 
 during the two years following the war. Foreign manufacturers and- 
 merchants eagerly pushed their sales in America as soon as peace was 
 restored. American manufacturers, who had built up their industries 
 during the war period, expected larger sales both at home and abroad, 
 but they soon realized that their foreign trade was subject to greatter ' 
 restrictions than had prevailed prior to and during the war, and they ' 
 also found it impossible to hold the domestic markets for the manufac- 
 tured goods that competed with imported articles. Imports entered 
 the country in enlarged volume, buyers purchased freely, consumption 
 expanded, and credit was unduly extended. Reaction and liqui"dation 
 soon followed and business depression prevailed during 1785. Fron? 
 1786 to 1789, business gradually recovered; domestic industry and 
 foreign commerce revived, and, by the summer of I789^the maritime "^ 
 , trade, as measured by the statistics of vessel entries, had become as 
 large as it ever had been.^ 
 
 Although after the Peace of Paris the American merchants found 
 themselves to be foreign traders in British ports and that France and 
 Spain no longer granted American commerce the special favors that 
 had been accorded while the war was being waged against their com- 
 mercial rival (Great Britain), some helpful privileges were still enjoyedi^^""* 
 except in the British West Indies. The principal foreign market Was 
 in Great Britain, where some goods from America received certain 
 concessions,-T:hough not all that the new American ^nation hoped to 
 receive; yet American commerce had a somevif&at more favorable 
 place in British markets than was enjoyed .b5^ the commerce of other 
 countries. 
 
 ^History of the United States, III, 397, 403. Hbid., 414. 
 
Period of the Revolution and Confederation, I7y5-i:^8g. 129 
 
 BRITISH REGULATIONS AFFECTING AMERICAN COMMERCE, 1783-1795. 
 
 An analysis of the British regulations affecting American commerce, 
 as they prevailed from 1783 until they were changed by Jay's treaty 
 in I79S> will indicate the conditions under which American commerce 
 was carried on with Great Britain and the British possessions during 
 the years succeeding 1783. The British government refused to make a 
 commercial treaty with the United States and adopted the plan of 
 regulating the trade with the United States by proclamations issued 
 from time to time by the Privy Council. The first of these proclama- 
 tions was made in 1783, when it was stipulated: 
 
 (i) That goods from the United States might be imported into Great 
 Britain in American or British ships, i. e., the United States was in this 
 regard placed upon the same footing as were European nations. 
 
 (2) Unmanufactured goods, except fish-oil, whale-fins, blubber, 
 spermaceti, and also pig iron, bar iron, tar, pitch, turpentine, rosin, 
 pot ashes, pearl ashes, indigo, masts, yards, and bowsprits produced in - 
 the United States might enter Great Britain by paying the same duties 
 as were levied on such goods from British possessions in America. 
 Fish-oil, blubber, whale-fins, and spermaceti paid the same duty when 
 the articles were imported from the United States as was paid when the 
 commodities came from other non-British countries. All woods 
 excej^ masts, yards, and bowsprits entered Great Britain free from the 
 United States, whereas they paid small duties when imported from 
 Europe. It will thus be seen that in certain minor particulars the 
 American exports to Great Britain were then given greater privileges 
 than were accorded commodities exported by the countries of conti- 
 nental Europe. 
 
 (3) Goods imported into Great Britain from the United States in 
 American vessels did not have to pay the "alien," i. e., additional, duty 
 imposed upon goods brought in the vessels of other non-British 
 countries. 
 
 (4) The trade between the United States and the British West Indies 
 was restricted entirely to British shipping. Naturally, this regulation, 
 which imposed a most severe restriction upon American commerce as 
 well as upon American shipping, was strongly resented by the people of 
 the United States. The restriction, however, was founded upon the 
 long-established laws of Great Britain that since the middle of the 
 seventeenth century had forbidden any goods to be exported from or 
 imported into the British possessions in Asia, Africa, or America unless 
 carried in British ships, manned by British seamen. 
 
 This policy of keeping the British West Indies closed to all but British 
 shipping was not abandoned by Great Britain until 1828. Ja/s 
 treaty as negotiated provided for the admission of American vessels 
 of 70 tons burden or less, but that provision was rejected by the 
 American Congress. Viewed from the standpoint of Great Britain, 
 
ijo History of Domestic and Foreign Commerce. 
 
 V 
 
 it is hard to see why the trade of the British West Indies should have 
 been opened in 1783 to American shipping. The chief interest Great 
 Britain had in the American colonies was that they would strengthen 
 the mercantile and naval power of Great Britain. By achieving their 
 independence the American colonies had reduced the power of Great 
 Britain upon the seas. There were strong reasons why Great Britain 
 should endeavor to increase her naval and mercantile strength. 
 
 There was no doubt that the opening of the West Indies would 
 result in the practical exclusion of British shipping from the large 
 trade between the United States and the British West Indies. The 
 traffic would certainly have been handled mainly in American ships 
 jailing back and forth between the United States and the islands, or 
 sailing from America to the West Indies and from the West Indies to 
 Europe and from thence to the United States. On the other hand, 
 by confining the trade between America and the West Indies to British 
 ships, vessels could load out from Great Britain to America with 
 British exports which would make at least part cargoes; could then 
 secure full cargoes in American ports, at profitable freight rates to the 
 West Indies, where a large volume of export traffic to Great Britain 
 could be secured. Freight rates were low from Great Britain to the 
 United States, but were high to the West Indies from Europe. There 
 is no doubt that the monopolization of the trade of the British West 
 Indies by British shipping strengthened the British marine and put 
 it in better shape for the struggle which followed at the close of the 
 century in the great wars with France. 
 
 Much has been written concerning the evasions of the British pro- 
 hibitiona of the trade with the British West Indies in ships under 
 American registry. It was possible for American merchants to use 
 American ships to a considerable extent by resorting to fraudulent 
 registration papers and by trading by way of non-British West Indian 
 ports; but in spite of these evasions, the trade with the West Indies 
 did not increase during the period between the Peace of Paris and 
 the establishment of the National Government under the Constitution. 
 Great Britain and other European countries succeeded in diverting 
 to their own ships much of the commerce that, without restrictions, 
 would have been handled in American ships by merchants in the 
 United States. The development of American trade during the five 
 years ending with 1789 was due not to the growth of the West Indian 
 trade, but to the reestablishment of the commerce with Great Britain, 
 and to the building up of a new trade with the Mediterranean and 
 with the Far East. 
 
 Important changes were made in the destination and routes of the 
 American foreign trade during the half decade that preceded the estab- 
 lishment of the National Government. Prior to the revolutionary era, 
 there had been a large triangular trade via Spain, Africa, and the 
 
Period of the Revolution and Confederation, lyy^-iySg. 131 
 
 West Indies. The people of the West Indies secured a large share of 
 their slaves and also some of their imports from Spain in American 
 ships. Exports were sent from America to Spain and Africa to be 
 traded for commodities and slaves for sale in the West Indies in 
 exchange for sugar, rum, molasses, and other articles required in the 
 markets of continental America. When the United States became an 
 independent country, this triangular trade tended to decline; the loss, 
 however, was made good by the development of trade with Russia 
 via the Baltic and with countries of the Far East. Although the 
 trade with these two sections was only in its infancy in 1789, it had been 
 well established. The commerce with the Far East subsequently 
 became an important source of wealth to American traders, such as 
 Derby of Salem, Peabody and Cabot of Boston, and Girard of Phila- 
 delphia. Important as was the West Indian trade to the United States, 
 the loss of commerce due to the closing of the British West Indies to 
 American ships was offset by the opening up of the comrnerce with 
 Russia and the Far East. The main outlet for American products 
 and the chief source of imported manufactures was Great Britain. It 
 was the large trade with Great Britain, and, by way of Great Britain, 
 with the other European countries, that enabled American merchants 
 so to develop American commerce that, by 1789, it had reached the 
 proportions it had attained before the Revolution. 
 
CHAPTER VIII. 
 AMERICAN COMMERCIAL POLICY. 1776 TO 1789. 
 
 Commercial policy determined by the States, not by the Confederation, 132. 
 Commercial legislation during the Revolution, 133. Import duties during the 
 Revolution, 134, between 1783 and 1785, 135, from 1785 to 1789, 136. The im- 
 post legislation of Massachusetts, 136. The Pennsylvania tariff law of 1785, 137. 
 The impost duties imposed by other States, 138. Discriminating duties in aid of 
 American shipping, 139. Tonnage taxes, 140. Export duties, 140. Production 
 bounties and navigation laws, 141. Commercial legislation of the Confederation, 
 142. General characteristics of the period, 143. 
 
 Within a short time after the declaration of independence the several 
 colonies established State governments, and in 1781 the States united 
 under the Articles of Confederation. The union thus formed was a 
 loose one, each State retaining almost complete sovereignty, and reserv- 
 ing to itself the authority to legislate on finance, commerce, and other 
 questions of common concern to all the States — matters that ought to 
 have been intrusted to the general government. 
 
 American commercial policy during the thirteen years preceding the 
 inauguration of President Washington was determined by the States, 
 and is embodied in their laws instead of in the legislation enacted by 
 the Federal Government. In order to secure the revenues indis- 
 pensable to the maintenance and continuance of the Federal Govern- 
 ment the Federal Congress sought in vain to obtain the consent of the 
 States to the national levying of duties on imports; consequently the 
 history of the commercial policy of the federation is a short chapter of 
 unsuccessful eflForts to get the power to do what was denied it by the 
 States. 
 
 The period from 1776 to 1789 includes two distinct parts — the war- 
 time to 1782 and the years of transition from federation to nationality. 
 The legislation of the States during the war differed greatly from that 
 of the six years intervening between the achievement of independence 
 and the realization of efficient national existence under the Constitu- 
 tion. While the war was in progress commercial intercourse with 
 Great Britain was prohibited both by the States and by Great Britain, 
 and embargoes were laid by the States to prevent the exportation of 
 certain commodities to any country. Trade with countries other 
 than Great Britain was permissible as regards most commodities, but 
 was reduced to small proportions by the vigilance of the powerful 
 British navy. The States did not impose duties on imports from 1776 
 to 1782, but at the close of the war the levies were laid, at first for rev- 
 enue only, but later for the two-fold purpose of affording protection 
 to domestic industries and trade, and securing the necessary public 
 funds. The promotion of American shipping was another important 
 aim of the State laws. 
 132 
 
American Commercial Policy, 1776 to 1789. 133 
 
 COMMERCIAL LEGISLATION DURING THE REVOLUTION. 
 
 Before the war started, the non-importation agreements of the colo- 
 nists had severely checked the trade with Great Britain. The opening 
 of hostilities put an end to all commerce with British countries, except 
 such clandestine trading as was possible, which must have been of 
 small volume. This meant the suspension of nearly all of the over-sea 
 trade of the States, because colonial commerce, as the result of the 
 economic factiws by which it was mainly controlled and of the British 
 Acts of Trade by which it was regulated, had been confined chiefly 
 to Great Britain and the British West Indies. 
 
 Little headway could be made during the Revolution in developing 
 a trade between America and non-British countries. The danger of 
 capture by the British navy would have prevented most merchants 
 from risking their property on the high seas; but there were other ser- 
 ious obstacles to trade. The prosecution of the war and the cessation 
 of the trade with British countries combined to reduce the purchasing 
 power of the people of America, and the volume of imports must neces- 
 sarily have been small had there been no Hability of their being seized 
 in transit across the sea. 
 
 Exports from the States were hampered during the war. The 
 demand for home products was increased, because most of the supplies 
 that had been secured in the mother country were no longer to be had 
 by importation. Indeed, the domestic supply of foods and other neces- 
 sities became so limited, as the war proceeded, that many colonies 
 placed embargoes upon the exportation of various commodities. 
 
 The earlier embargoes were in most instances laid upon foodstuffs, 
 the purpose of raising these bars to trade and those that were raised 
 at a later date being both to protect the home supply and to prevent 
 the enemy or outside rivals from obtaining the commodities. The 
 sentiment in favor of these embargoes was general. Congress having 
 requested their imposition by the States; but the strict enforcement of 
 the laws prohibiting exports was difficult, especially in New England, 
 where such a large portion of the people lived by trade. The usual 
 pohcy was to permit small quantities of foodstuffs to be exported for 
 particular purposes, the governor or some other designated official 
 being authorized by law to grant temporary licenses to individual 
 exporters. There were doubtless some evasions of the laws. 
 
 After 1777, embargoes were placed on various commodities other 
 than foodstuffs, and the prohibitions appHed, not only to the export 
 to foreign countries of the articles specified, but also to their sale in 
 neighboring States, each commonwealth being concerned to prevent 
 a scarcity of the foods or materials its population might require. When 
 the war ended, all the embargoes were terminated, and with the excep- 
 tion of occasional and unimportant prohibitions upon the export of 
 particular articles, the States did not again raise the bars against the 
 outflow of Ainerican wares. 
 
134 History of Domestic and Foreign Commerce. 
 
 IMPORT DUTIES. 
 
 The policy of the States in regard to duties on imports during the 
 period from 1776 to 1789 passed through three phases: 
 
 Import duties were not levied during war. Virginia was the only 
 exception to this, as she was the only State that did not cease to lay 
 and collect the duties. 
 
 After hostilities ceased, i. e., between 1781 and 1784, the States, with 
 the exception of New Jersey, placed duties on imports, but for revenue 
 only and not for protection. 
 
 By 1785, economic conditions had developed in the United States 
 that caused the New England and most of the Middle States to adopt 
 the principle of moderate protection to domestic industries, and to 
 change their tariff laws accordingly. The Southern States, not having 
 industries that suffered from foreign competition, and being large pur- 
 chasers of foreign manufactures, did not, with the possible exception 
 of Virginia, change their tariffs so as to make them protective. 
 
 (i) While engaged in the war with Great Britain, there was small 
 reason why the States should, ^and some reasons why the States should 
 not, place duties on imported goods. They could not trade with 
 British countries and they had but little commerce with countries 
 not under the British flag. Nor could they expect, at least during 
 the progress of the war, to develop much trade with any foreign 
 country. The States might well have omitted to levy imposts, merely 
 because it was useless to do so; but it is doubtful whether the States 
 whose formation resulted from the declaration of independence would 
 have been disposed to reestablish, of their own accord, any of the 
 restrictions by which their trade and industry had been restrained 
 by Great Britain. The sentiment of the States at the close of their 
 struggle for independence was for full freedom of trade. The heroic 
 contest in which the States had engaged had been waged to secure 
 economic freedom, and for that reason the doctrines of economic 
 liberty, as expounded by the French economists, and especially by 
 Adam Smith, must have had a strong influence upon the thought of 
 Americans. We know, indeed, that some of the political leaders — 
 Franklin, Jefferson, John Adams, and others — -were earnest advocates 
 of Adam Smith's views. The public men of America were, however, 
 not of the doctrinaire type, and when the economic interests of the 
 States seemed to require tariff duties and protection to domestic indus- 
 tries, they did not hesitate to adopt such political measures as the 
 situation demanded. 
 
 The only State that maintained import duties throughout the five 
 years of active warfare (1776-1781) was Virginia, which secured a part 
 of her revenues from imposts upon liquors. Virginia was better 
 able than most States to obtain a revenue by taxing commerce, because 
 the exportation of tobacco was not altogether stopped by the war,. 
 
American Commercial Policy, ijjd to 178Q. 135 
 
 and the continuance of an export trade made possible the maintenance 
 of an import traffic in liquors and other commodities. Maryland was 
 without import duties only during 1778 and 1779. 
 
 (2) A period of "tariffs for revenue only" began with the restoration 
 of impost duties toward the end of, and shortly after, the Revolution, 
 and lasted until 1785 or 1786, when the majority of the States revised 
 and raised the duties for the purpose not only of securing more revenue, ^ 
 but also to afford protection to domestic industry and trade and to aid ^ 
 American shipping. 
 
 There was a pronounced revival in trade, particularly in foreign 
 commerce, at the close of the Revolution. As always happens imme- 
 diately or soon after a war which has compelled many forms of business 
 to suspend for some years, men were more than usually active and hope- 
 ful in trade and industry. All desired to regain lost ground, make 
 up for lost time in production, or by pushing trade and extending credit 
 to dispose of the stock of goods that had accumulated dupng the war. 
 At such times the consumer who has practiced enforced abstinence for 
 a long time is an eager buyer and is often more optimistic as to the 
 payment of his bills than his financial means justify. 
 
 The American States afforded a good market in 1783 and 1784, and 
 one that the British merchants were eager to enter. The market 
 was good, not only for the psychological reason just cited, but also 
 from the fact that there was then a relatively large supply of coin in 
 America. This stock of the precious metals had accumulated in the 
 United States as a result of the shipments of coin made by Great 
 Britain and France to maintain their armies and fleets. As the Ameri- 
 cans could buy but little abroad, the gold and silver remained in the 
 country until the close of the war. 
 
 The supply of "hard" money meant good prices and ready buyers, 
 and stimulated the flow of British goods into America. Moreover, 
 British producers and merchants had large stocks of goods on hand as 
 the result of the interruption of trade for several years, and over- 
 selling readily followed. The purchasing power of Americans was 
 overestimated, and credit was unduly expanded. But little time was 
 required for the real condition of America, economically and politically, 
 to become manifest. The people of the United States were not strong 
 enough industrially and financially to compete successfully with Europe. 
 The successful development of American industries during the years of 
 the war, when all competition with Europe was prevented by the prac- 
 tical cessation of trade, had deluded the people of the United States as 
 to their real and relative economic condition. Two years of free and 
 acdve trading with Europe during 1783 and 1784 were sufficient to 
 undermine many of the industries that had grown up to supply the - 
 markets secured to them by the protecrion afforded by the war. 
 
 In 1785 the panic came. The monetary situation was deplorable, 
 not only because the coin had been exported to pay for imported goods, 
 
136 History of Domestic and Foreign Commerce. 
 
 but also from the fact that the Confederation had no authority to 
 coin money and to establish a uniform system of currency. Each State 
 still had the power to issue money, and many of them unwisely sought 
 to relieve the situation of 1785 and 1786 by putting out paper money. 
 The industries suffered severely from the falling prices (in coin) and 
 the loss of the markets that were now more than adequately supplied 
 as regards many articles by the importations from Europe, mainly 
 from England. American merchants had become embarrassed and 
 were unable to pay for the goods they had bought on credit. The 
 situation of both producers and traders in the United States was made 
 much worse by the closing of the British West Indies to American 
 shipping. 
 
 The industrial depression and the financial crisis combined to reduce 
 the revenues of the States at a time when their fiscal needs were rapidly 
 growing. The war left them with heavy debts and large interest 
 charges, and there was a natural increase in the ordinary expenses of 
 government as the States took up the administrative problems with 
 which they were confronted in the organization and development of 
 their new institutions. Political needs as well as economic troubles 
 led to an increase in the import duties in or about 1785. 
 
 (3) The period of State imposts for both revenue and protection 
 covered, in general, the four years 1785 to 1789. The aid afforded 
 by the laws of those States that adopted the principle of a protective 
 tariff was intended to assist industry, trade, and domestic shipping. 
 The colonies south of Virginia adhered to the policy of import duties 
 for revenue only; New Jersey levied practically no imposts; the other 
 States changed their tariffs so as to afford incidental protection. 
 
 The general features of the impost legislation adopted in the closing 
 years of the war and the nature of the changes made in those laws in 
 1785 and 1786 maybe briefly illustrated by reference to Massachusetts 
 and Pennsylvania. 
 
 When Massachusetts reluctantly returned to the imposition of 
 import duties in 1782, the law provided that it should continue in force 
 only six months after the restoration of peace, because, as the statute 
 stated, "all restrictions upon trade have been found to be highly 
 injurious to those countries which derive a great part of their wealth 
 and Strength from commerce." By this law there were but a few 
 articles upon which specific duties were laid — ^wine, tobacco, tea, sugar, 
 iron, and coaches being the principal ones. Upon six commodities 
 an ad valorem rate of 5 per cent was placed. Upon all other imports the 
 duty was 2.5 per cent. As this law did not seem to injure trade, it was 
 continued in 1783 with a slight lowering of the specific duties. The 
 act of 1784 shows a change in policy. The ad valorem rates on several 
 articles — paper, candles, soap, linseed oil, leather, "beef, and pork — ^were 
 made 7.5 per cent, and the duty on coaches, carriages, harness, saddles, 
 
American Commercial Policy, 1776 to 178Q. 137 
 
 boots, shoes, and plated ware were fixed at 12.5 per cent. The articles 
 upon which the rates were raised were among the commodities produced 
 at home, and the act of 1784 was intended to afford some measure of 
 protection against Great Britain. The act of the following year gave 
 still more prominence to protection by increasing the specific duties, 
 and by making the ad valorem rate on some articles as high as 25 per 
 cent. The preamble of the act indicated its purpose: "Whereas, it 
 is highly necessary for the welfare and happiness of all States, and 
 more especially such as are repubUcan, to encourage agriculture, 
 the improvement of raw materials and manufactures, a spirit of 
 industry, frugality and economy, and at the same time to discourage 
 luxury and extravagance of every kind : Be it enacted," etc. However, 
 the protection afforded by this measure was not deemed adequate, and 
 in 1786 the State adopted the plan of prohibiting any importation . 
 whatever of 58 articles, among which were included certain articles of 
 luxury, for which in the opinion of the legislators it was unwise for the 
 people of Massachusetts to spend good money, and all the important 
 products manufactured in the State. Thus during the four years inter- ' 
 vening between 1782 and 1786, Massachusetts reversed her position' 
 on the question of protecting home industries. The acts of 1785 and 
 1786 were clearly the result of the financial and industrial difficulties 
 of those years. 
 
 The revenue and tariff law enacted by Pennsylvania in 1785 has 
 received much attention, because it was the model followed by Con- 
 gress in framing the first federal tariff legislation — the act of July 
 4, 1789. The act of 1785 was preceded by certain revenue measures. 
 In 1780, low specific duties were placed upon distilled liquors, wines, 
 sugar, molasses, and tea, and an ad valorem tax of i per cent on all 
 other imports. Two years later these duties were somewhat increased 
 in order to obtain funds to provide defenses for the Delaware; but, 
 when peace was restored in 1783, the merchants of Philadelphia secured 
 the repeal of the additional duties imposed for construction of forts, 
 because, as they alleged, the imposts were a handicap upon trade. 
 The State, however, was soon obliged to raise the rates to obtain 
 revenue to pay the interest on its debt. In 1784, the duties were 
 increased for revenue purposes; then the following year the industrial 
 as contrasted with the commercial interests brought about the passage 
 of the celebrated act "to encourage and protect the manufactures of 
 this State by laying additional duties on certain manufactures which 
 interfere with them." The industrial situation which brought about 
 the passage of the law is clearly described in the preamble to the act: 
 
 "Whereas, although the fabrics and manufactures of Europe, and other 
 foreign parts, imported into this country in times of peace, may be afforded at 
 cheaper rates than they can be made here, yet good policy and a regard to the 
 wellbeing of divers useful and industrious citizens, who are employed in the 
 
138 History of Domestic and Foreign Commerce. 
 
 making of like goods, in this State, demand of us that moderate duties be laid 
 on certain fabrics and manufactures imported, which do most interfere with,^ 
 and which (if no relief be given) will undermine and destroy the useful manu- 
 factures of the like kind in this country." 
 
 Many articles, among them carriages, clocks, scythes, beer and ale, 
 soap and candles, boots and shoes, and cordage, were subjected to 
 specific imposts; an ad valorem rate of 10 per cent was placed upon other 
 manufactures; and special protection was afforded to the manufacturers 
 of refined iron, to ship-builders, and to carpenters. With the exception 
 of minor modifications in 1786 and 1787 this law remained in force 
 until the National Government was established under the Constitution, 
 the most important amendment being made in 1787, when a reduction 
 of 5 per cent from the import duties was allowed on goods imported 
 in vessels built in Pennsylvania and at least two-thirds owned by 
 citizens of the State. 
 
 The policy of the other States as regards import duties during the 
 period under discussion need not be considered in detail. The New 
 England States, New York, and Pennsylvania decided in favor of 
 raising their import duties so as to protect domestic production and 
 trade. New Jersey and Delaware did not levy imposts either for rev- 
 enue or for protection. Of the Southern States, Virginia was the only 
 one that adopted the policy of protection; Maryland, North Carolina, 
 South Carolina, and Georgia adhered to the plan of tariffs for revenue 
 only; they were chiefly interested in a large export trade and in cheap 
 prices for imported goods; their industries were not such as could be 
 aided by tarilFs. The policy followed by Virginia was an intermediate 
 one, less protective than that adopted by the Northern States and less 
 strictly non-protective than the legislation enacted by her southern 
 neighbors. The Virginia statute of 1783, while in most respects a 
 revenue measure, included specific duties on salt, hemp, cordage, beer, 
 ale, and snufF. In 1786, the rates on hemp and cordage were raised, 
 and a duty was placed on cheese; and in the revision and codification 
 of the laws the following year the policy of moderate protection was 
 adhered to. Such leaders as Patrick Henry and James Madison, who 
 were theoretically opposed to trade restrictions, favored the legislation 
 of 1784 and 1787 as being necessary for thfe protection of Virginia's 
 trade and industries. 
 
 The import duties levied by each State were imposed on the goods 
 imported from other States as well as from foreign countries. This, 
 of course, placed a handicap upon the development of American com- 
 merce. The interstate trade was not specially large at that time, it is 
 true, and the rates of duty were highest upon the products of foreign 
 countries, particularly of Great Britain; nevertheless,^ the tariff barriers 
 tended to hinder the growth of the trade among the States, as well as to 
 check the progress of commerce with lands beyond the sea. 
 
American Commercial Policy, ly/d to lySg. 139 
 
 The most serious result was that the rivalries and jealousies of the 
 States, which had prevented them at the time of the adoption of the 
 Articles of Confederation from conferring upon the Congress the power 
 of regulating commerce, caused each State to view with alarm and to 
 strive to limit the commercial success of every other State. Fortu- 
 nately for the future of America, the political leaders of that time were 
 large-minded enough to realize the folly and danger of continued inter- 
 state dissension and to bring about the establishment of an effective 
 national government under the Constitution. 
 
 DISCRIMINATING DUTIES IN AID OF AMERICAN SHIPPING. TONNAGE TAXES, AND 
 
 EXPORT DUTIES. 
 
 The tariff laws of nearly every State aided domestic shipping in two 
 ways: by making the duties less on goods when imported in the ships 
 built and owned by its own citizens, and by making the tonnage taxes 
 less on domestic than on foreign ships. The laws containing these 
 provisions were numerous. 
 
 The discriminating duties favoring domestic shipping were adopted 
 not only to aid the American ship-builders and owners to hold their 
 own in competition with foreigners, but also for the special purpose of 
 retaliating against Great Britain for the action she took at the end of 
 the Revolution in closing the ports of the British West Indies against 
 American ships. On the ground that our independence had made us 
 a foreign country, Great Britain decided to apply her Navigation Acts 
 to the United States, just as she did to other nations not under the 
 British flag. No other act of hers did so much as this to injure the 
 trade of the American States, particularly those in New England; 
 indeed, it checked the commercial progress of America for a full decade, 
 or until the beginning of the great war between France and Great 
 Britain, when the United States was permitted to engage in the West 
 Indian trade and was allowed special advantages as the foremost neu- 
 tral carrier on the high seas. 
 
 Another purpose of the discriminating duties imposed by one St^te, 
 Pennsylvania, was the promotion of direct trading and the increase 
 of commerce with the Far East. The effect of placing higher duties 
 on goods when not imported directly from the place of growth or manu- 
 facture was felt chiefly by British merchants, because they were the 
 chief competitors of American traders. This feature of the Pennsyl- 
 vania act of 1785 was incorporated in the first national tariff law, and 
 did much to build up the commerce of America with India and China. 
 
 The general character of the discriminations in duties to favor 
 American ships is indicated by the fact that New Hampshire and New 
 York imposed double duties on goods brought in foreign ships; that 
 Rhode Island made the duty 7.5 per cent on goods imported in British 
 bottoms and 2.5 per cent in other ships and followed this law by one 
 
140 History of Domestic and Foreign Commerce. 
 
 (1786) providing that no goods from the United States should be 
 brought into Rhode Island in British ships; that Pennsylvania favored 
 direct trade with the Far East, as stated above, and th^t Maryland 
 made the duty 2 per cent higher on goods brought to her ports by 
 British vessels. Virginia and North Carolina discriminated against 
 the imports from those nations not having a commercial treaty with the 
 United States. From this brief statement it will be seen that most, 
 I though not all, of the States adopted the policy of discriminating 
 duties and that the policy, as would naturally be the case, was given 
 more prominence in the Northern than among the Southern States. 
 
 Tonnage taxes require only brief discussion. They were imposed by 
 most of the States, laws providing for levying them being enacted by 
 Virginia and North Carolina before the close of the Revolution, and 
 by other States shortly thereafter. These taxes were placed upon ship- 
 ping for the twofold purpose of securing the funds required for such 
 harbor expenses as the maintenance of lights and buoys, and of aiding 
 domestic shipping by discriminations against foreign vessels. To some 
 extent the coastwise trade was favored, most States exempting or 
 placing low tonnage taxes upon their shipping when engaged in coast- 
 wise commerce. As illustrations of the discriminations made in the 
 tonnage taxes, mention may be made of New Hampshire's law of 1784, 
 which imposed treble duties on foreign ships, and of the Pennsylvania 
 legislation of 1784, which retaliated against Great Britain for closing 
 the West Indies by imposing a duty of 7s. 6d. per ton upon the vessels 
 of the countries not having a cornmeEciaHreaty with the. United States^ / 
 The States in their tonnage laws followed the samB-geiieial policy as in 
 their legislation concerning imposts, except that the tonnage taxes 
 were more strongly protective of domestic shipping than the impost 
 duties were of home trade and industry. 
 
 As it was the policy of all the colonies to promote rather than to 
 hinder maritime commerce, most of them had, by the middle of the 
 eighteenth century, ceased to levy export duties. The only colonies 
 that maintained these taxes as a regular part of their revenue system 
 were Maryland and Virginia, whose exports, especially tobacco, could 
 be taxed without much danger of limiting the volume of trade. Shortly 
 before the Revolution (1773) Georgia placed an export duty of minor 
 importance on raw hides. These three States, Georgia, Virginia, and 
 Maryland, were the only ones that imposed duties on exports after 
 the Revolution. Georgia continued the tax on raw hides; Virginia 
 placed the duty only on tobacco; while Maryland levied export duties, 
 not continuously, but most of the time, upon tobacco, pig-iron, wheat, 
 and flour. 
 
 While the chief reason for levying a tax on exports was to secure 
 revenue, fiscal aims were not the only ones sought. Maryland made 
 reductions in the duties on goods exported in vessels owned and oper- 
 
American Commercial Policy, 1776 to I78g. 141 
 
 ated by her own inhabitants; and Virginia, in order to carry out the 
 provisions of the treaty of 1778 between the United States and France, 
 exempted from duties the tobacco exported to the French West Indies. 
 Congress is now prohibited by the Constitution from taxing exports. 
 The States decided against giving the National Government the power 
 to tax both exports and imports. The reason for this decision, how- 
 ever, was not so much a theoretical opposition to export duties as it was 
 the fear on the part of the States having a large export trade that the 
 Congress might tax their commerce relatively more than it did the trade 
 of the other States. The five Southern States, with the support of 
 Massachusetts and Connecticut, secured the adoption by the consti- 
 tutional convention of the provision against taxes on exports. 
 
 PRODUCTION BOUNTIES AND NAVIGATION LAWS. 
 
 Burdened, as they were, with heavy war debts, crippled by the 
 absence of a unified and sound monetary system, and handicapped 
 soon after the war by the serious business depression of 1785, the States 
 would not have been financially able, had they been disposed, to grant 
 bounties to much extent in aid of production and trade during the 
 years that intervened between the close of the Revolution and the 
 establishment of the National Grovernment. Bounties had been a 
 rather prominent feature of the industrial and commercial policy of the 
 colonies; and there were several States that gave bounties after the 
 war. Connecticut gave a small bounty of a penny a pound on yarn 
 spun at Hartford and aided' the foreign trade by exempting from ton- ^ 
 nage taxes all vessels employed for at least four months each year 
 in commerce with Europe, Africa, or Asia; New Hampshire granted 
 premiums and exemptions from taxation to induce men to make linseed 
 oil, duck and sail cloth, and to erect slitting mills and nail and sail- 
 cloth factories; Rhode Island paid bounties to growers of wool and hemp 
 "to encourage the growth of all raw materials, more especially those 
 that supply clothing to the inhabitants, and duck or cordage for carry- 
 ing on commerce;" New York gave Hberal bounties on hemp; New 
 Jersey gave similar assistance to wool, flax, and hemp; Maryland 
 encouraged salt production; and Georgia assisted the producers of 
 
 hemp, flax, and wheat. ' , • . • 
 
 With but three exceptions, these post-revolution bounties were 
 granted in or after 1785, more aid being given by the laws passed in 
 1788 than in those previously enacted. It is evident that the bounties 
 were one of the means adopted in some States to aid industry and 
 trade to recover from the effects of the business depression of 1785 
 
 and 1786. . r J . 
 
 The laws regarding pilotage, inspection of exports, port and customs 
 administration, and legislation concerning seamen do not require special 
 analysis New Jersey was the only colony and State that enacted no 
 
142 History of Domestic and Foreign Commerce. 
 
 pilotage laws prior to 1789. The other States continued to regulate 
 pilotage much as they had before the Revolution, making such amend- 
 ments and additions to their laws as were required by the increase in 
 trade and the growth in the size of the vessels. The majority of the 
 States continued after the Revolution to enact laws for the inspection 
 of their staple exports; but five of the States, New Jersey, Delaware, 
 North CaroHna, South Carolina, and Georgia, did not deem any new 
 legislation necessary on this subject. Laws of various kinds for the 
 benefit of seamen were passed by all but four of the States. New 
 Hampshire and Rhode Island did not pass laws on this subject after the 
 war, while New Jersey and North Carolina legislated neither as colonies 
 nor as States. The laws for the administration of the customs and the 
 , regulation of the ports were necessarily detailed in all of the States, as 
 they had been in the colonies. The theory and practice regarding 
 the inspection of ships and the regulation of imports and exports did 
 not change when the colonies became States. 
 
 COMMERCIAL LEGISLATION OF THE CONFEDERATION. 
 
 The Congress under the Articles of Confederation having been 
 granted no power to regulate or tax interstate and international com- 
 merce, it could only pass resolutions requesting the States to authorize 
 the Congress to enact specified laws. Two unsuccessful attempts 
 were made to obtain the consent of the States to an act of Congress 
 imposing duties on imports. A request for power to regulate foreign 
 trade was also denied. The jealousies of the States defeated each 
 efi^ort. 
 
 The first request made by Congress was on February 3, 1781, when 
 permission was asked for power to levy a duty of 5 per cent on imports 
 and on prizes condemned in any port. The receipts from the tax were 
 to be applied to the payment of the principal and interest of the 
 national debt. As Congress could not act unless all of the States 
 gave their authorization, the refusal of Rhode Island prevented action. 
 The second attempt of Congress to obtain authority to levy imposts 
 was made in 1783. A few commodities were to pay specific duties, the 
 other articles 5 per cent ad valorem; the funds secured were to be used 
 for paying the public debt. During the next three years, twelve of the 
 States gave their consent, some with conditions attached; but the 
 movement was finally defeated in 1786 by the refusal of New York even 
 to consider the measure. 
 
 After the British Government, in 1783, restricted the trade of the 
 British West Indies to British vessels, Congress sought, by resolution of \/ 
 April 30, 1784, to obtain permission of the States to prohibit, for 
 fifteen years, the importation or exportation of goods at American ports, 
 except in vessels owned by the people of the United States or by the 
 subjects of foreign powers having treaties of commerce with the United 
 
American Commercial Policy, iyj6 to lySg. 143 
 
 States. The people of foreign nations were, also, to be prohibited from 
 importing into the United States any goods not grown or manufactured 
 in their own country, unless authority to do this had been granted by 
 treaty. Although the consent of nine States would have given Congress 
 the power to pass this law, the authority was not obtained, and Con- 
 gress was not permitted to attempt the regulation of commerce by 
 legislative enactments. 
 
 The Articles of Confederation gave Congress the treaty-making 
 power, and conventions were entered into with France, Holland, 
 Sweden, and Prussia covering the commercial relations of the United 
 States with those powers; but these treaties were of only slight benefit 
 to our foreign trade, because the power to levy import and export 
 duties and generally to regulate commerce remained with the several 
 States. The Congress had no means of giving effect to the treaties.. 
 It was this fact, in part — there were other reasons also — that caused 
 Great Britain to refuse to sign a commercial treaty with the United 
 States. The foreign trade of the American States was chiefly with 
 Great Britain and the British West Indies, and commerce suffered 
 severely, because the government oi the Confederation was unable to 
 secure by treaty any exemption from the strict application of the 
 British Navigation Acts to American trade with regions under the 
 British flag. It is, however, not probable that Great Britain would 
 have made a treaty shortly after the Revolution granting commercial 
 concessions satisfactory tothe United States, even had the latter country- 
 been governed by a strong national government in full control of inter- 
 national commerce. As late as 1794, Jay had great difficulty in nego- 
 tiating a convention, although the treaty contained so few concessions 
 to the United States that all Americans regarded it as a humiliating one. 
 
 GENERAL CHAEIACTERISTICS OF THE PERIOD. 
 
 Viewed as a whole, the thirteen years from 1776 to 1789 were an 
 important period not only in the growth of our pohtical institutions, 
 but also in the evolution of commercial theories. The trade embargoes 
 which characterized the war period were of no special significance as 
 regards commercial policy, because it is customary for warring nations 
 to prohibit commerce with each other and to prey upon each other's 
 ocean trade and shipping; but the change in the opinions of the pubHc 
 men during the decade preceding 1789, regarding the principles that 
 ought to prevail in the governmental regulation of commerce, affords an 
 instructive illustration of the control of theory by economic conditions. 
 The change also indicates the practical statesmanship of American 
 political leaders. 
 
 During the Revolution and for a short rime thereafter the prevailing 
 thought of Americans was in favor of commercial freedom. Patrick 
 Henry probably expressed the views of the majority of his compatriots 
 
144 History of Domestic and Foreign Commerce. 
 
 when, in the closing year of the war, he stated, in his characteristic 
 style, while addressing the Virginia Assembly: 
 
 "Why should we fetter commerce? Fetter not commerce, sir; let her be 
 free as the air — she will range the whole creation, and return on the wings of 
 the four winds of heaven to bless the land with plenty." 
 
 There were, however, two strong reasons why the States fpund it 
 impracticable and undesirable to let commerce be free as the air: 
 Revenue must be had for the maintenance of the State government, for 
 paying the interest on the State debt, and for meeting the requisitions 
 of Congress. The easiest and surest way to obtain the necessary 
 public funds was to place duties on imports; and such taxes were 
 imposed by nearly all of the States during the early eighties. A second 
 and longer step away from freedom of trade was taken by the majority 
 of the States in 1785 and 1786 to protect their industries and trade 
 against the overwhelming competition of Great Britain. The severe 
 business depression of 1785 was so clearly due in large part to overtrad- 
 ing with Great Britain that the demand for protection was made by 
 the New England and Middle States, the sections in which domestic 
 industries had made most progress. The disposition of the American 
 commonwealths to protect themselves against Great Britain was 
 strengthened by the closing of the ports of the British West Indies to 
 American shipping, an act that seriously crippled the trade and ship- 
 ping of the Northern States. 
 
 The protection afforded by the States included both industry and 
 trade, and was secured by import duties, bounties, and discriminating 
 tonnage taxes. In adopting this policy America was but following the 
 practice of Great Britain and other countries of Europe. Although it 
 was England's appHcation of the mercantile theory to the administra- 
 tion of her colonies and to the regulation of their economic development 
 that caused the colonies to revolt, yet when they achieved their inde- 
 pendence and undertook, as a separate country, to compete with 
 Great Britain, they found it necessary to adopt a system of commercial 
 and industrial regulation differing little from that followed by European 
 countries. Political liberty brought America neither economic inde- 
 pendence of Euiope nor the ability to practice the principles of com- 
 mercial freedom in advance of their adoption by the leading old-world 
 countries. 
 
CHAPTER IX. 
 THE AMERICAN FISHERIES BEFORE 1789.i 
 
 Dominant position of New England in American fisheries prior to 1789, 145. 
 American fisheries in the sixteenth century, 146. Development of New England 
 fisheries during the seventeenth century, 148. Establishment of the whaling 
 industry, 152. Struggles with France over the fisheries, 153. Extent of the New 
 England fisheries in 1731, 154. The fisheries from the Peace of Paris to the Revolu- 
 tion, 156. Effect of the Revolution upon the fisheries, 158. Provisions as to 
 fisheries in the Treaty of 1783, 159. Revival of cod fishery from 1786 to 1790, 160. 
 Depressed condition of the whale fishery, 161. 
 
 Previous to 1789, and, in fact, until near the middle of the nineteenth 
 century, New England held a virtual monopoly of the American fish- 
 eries possessing any great degree of commercial importance. A 
 history of the early development of the American fisheries is, therefore, 
 little more than an account of the rise and growth of the fishing indus- 
 tries of New England, and it is to that subject that this chapter will 
 be chiefly devoted, the early history of the fisheries in other parts of the 
 United States being left for consideration in subsequent chapters. 
 
 That the predominance of the New England fisheries for two and a 
 half centuries was due to other conditions than the lack of fishing 
 resources elsewhere in America is apparent from the fact that in recent 
 times the fisheries of the Middle Atlantic States have yielded an annual 
 product greater in value than the products of the New England fishing 
 industries. The explanation of the commanding position of New Eng- 
 land during the early centuries lies in a consideration of the physical 
 character of the land along the Atlantic coast and the economic laws 
 governing the industrial development of a nation. The material 
 development of a new country is invariably characterized by the early 
 exploitation of those resources and the rise of those industries yielding 
 the largest returns in proportion to the productive effort expended. 
 This principle was admirably illustrated in the economic development 
 of the American colonies. In the region south of the Hudson River, 
 where the fertile coastal plain and the piedmont afforded an abundance 
 of arable soil, agriculture was easily the most profitable industry. The 
 material prosperity of that section was based primarily upon the cereals 
 of the middle colonies, and the tobacco, rice, and indigo of the southern 
 colonies, together with the various forest products of lumber, ashes, 
 and naval stores; and though offshore and inshore fisheries of great 
 value existed all along the coast, they remained practically undeveloped, 
 as long as a large supply of cheap agricultural land was readily avail- 
 able. In New England, though agriculture was the most important 
 single industry, it did not absorb the energies of the inhabitants to the 
 extent that it did those of the people living farther south. The early 
 
 'This chapter was written by T. W. Van Metre. 
 
 14s 
 
146 History of Domestic and Foreign Commerce. 
 
 settlers of New England found that the sea offered in many respects 
 a more fruitful field for their labors than did the land. The somewhat 
 barren soil yielded a return relatively meager in comparison to the rich 
 harvests that could be gathered from the shallow ocean waters along the 
 shore, and so the fisheries soon came to constitute one of the most 
 important factors of the economic life of New England, and the fishing 
 industries formed the "cornerstone" upon which the commercial pros- 
 perity of New England rested throughout the colonial period. Ship- 
 building, navigation, and commerce proceeded directly from the 
 development of the fisheries, giving to New England a greater diversi- 
 fication of industry than was to be found anywhere else among the 
 American colonies. 
 
 The New England people found, extending along the coast of 
 America, from Long Island to the Grand Bank of Newfoundland, one of 
 the richest fishing-grounds in the world. The submerged coastal 
 plain or continental shelf provides a large area of shallow water, which, 
 cf^oled by the ocean current from the Arctic seas, makes a home for 
 c6d, mackerel, herring, halibut, and many other varieties of fish; and 
 the deeply indented shore-line of the islands and of the mainland 
 furnishes scores of excellent harbors where vessels may seek shelter from 
 the storms at sea and where fishermen may cure their catch before 
 taking it to market. In addition to being populated by a multitude 
 of fish, the cool waters along the New England coast were frequented 
 by whales, and before the close of the seventeenth century the whaling 
 industry also began to be an important factor in the economic life of 
 the New England colonists. 
 
 AMERICAN FISHERIES IN THE SIXTEENTH CENTURY. 
 
 Long before the first permanent settlement was founded in New 
 England the fisheries of America were well established. In fact, the 
 fisheries were among the very first of the natural resources of America 
 to be systematically exploited by the wealth-seeking nations of Europe. 
 The existence of the Newfoundland fisheries was probably first made 
 known to the people of Europe by John Cabot, the Venetian navigator, 
 who, sailing under a patent granted by Henry VII, in 1497, discovered 
 the mainland of North America. Among the nations of the Old World 
 where the prevailing religious beHef caused the consumption of large 
 quantities of fish, the report of the discovery of a new and rich fishing- 
 ground was gladly received, and within a few years after Cabot's 
 announcement the fishing-vessels of several countries began to carry 
 home cargoes from the shores of Newfoundland. The French were 
 first upon the ground. There are authentic records that fishing-vessels 
 of Brittany visited Newfoundland in 1504,^ and since then not a single 
 year has passed in which the French flag has not been carried to the 
 
 'Winsor, Narrative and Critical History of America, IV, 4. 
 
The American Fisheries Before 178Q. 147 
 
 Newfoundland bank. By 1522, forty or fifty houses had been erected 
 at Newfoundland by French fishermen for use during the fishing 
 season, and at least one attempt had been made before that year to 
 plant a permanent settlement on the island.^ The interest stimulated 
 by the growth of the French fishing industry led to the expeditions of 
 Cartier in 1534 and 1535, when he explored the Gulf of St. Lawrence 
 and voyaged up the river as far as the present site of Montreal. 
 
 Though England sent out the explorer who discovered the Ameri- 
 can fisheries, she took but a minor part in their early development. 
 Anthonie Parkhurst, writing to Richard Hakluyt in 1578, stated that 
 the Newfoundland fishing-fleet was made up of about 350 vessels, of 
 which 1 50 were from France, 100 from Spain, 50 from Portugal and 50 
 from England.^ For more than three-quarters of a century after the 
 voyage of Cabot, while both Spain and France were being enriched by 
 the wealth of the New World, England, though by right of discovery 
 possessing a claim to large portions of North America, was too busily 
 occupied with domestic difficulties to send out a single expedition to 
 lay hold of and occupy the regions of the New World to which she was 
 of right entitled. But during the latter half of the sixteenth century 
 the interest of England in America revived. Dispossessed of the last 
 vestige of their territorial holdings on the European continent and 
 estranged from their Catholic neighbors across the channel, the British 
 people began to diiect their energies toward rearing a colonial empire 
 which would give them the economic self-sufficiency needed to meet 
 the conditions imposed upon them by their physical, political, and 
 religious isolation. 
 
 A fundamental feature of the English pohtical policy of the sixteenth 
 century was the creation and maintenance of a strong navy, which 
 would render the country safe from devastation by the fleets and 
 armies of their continental enemies. To provide a "nursery for 
 seamen" the government turned to the fisheries. Popular literature 
 and public documents of the period show that there was a widespread 
 movement for building up the English fisheries, which were at that 
 time inferior to those of Holland, France, and Spain; encouragement 
 in many forms was ofi^ered to those who would engage in the fishing 
 industry; and the laws forbidding the eating of meat on Fridays, 
 Saturdays, and during Lent were rigorously enforced.^ 
 
 In 1578, Elizabeth gave a charter to Sir Humphrey Gilbert, author- 
 izing him to discover and settle remote lands of America not possessed 
 by a Christian monarch and "to have, hold, occupy and enjoy such 
 lands with all commodities both by sea and by land." Gilbert made 
 a voyage to Newfoundland in 1583 and in the name of the EngHsh 
 government took possession of the islands and all surrounding lands 
 
 'Sabine, Reforl on the Principal Fisheries of the American Seas, 36. 
 ^Hakluyt, Principal Navigations, VIII, 10. 
 
 'Calendar of State Papers. Domestic, 1595-97, p. 540. For examples of such documents cf . 
 English Garner (Arber, ed.), Ill, 621; IV, 323. 
 
148 History of Domestic and Foreign Commerce. 
 
 within the distance of 200 leagues. Though Gilbert's voyage ended 
 tragically for himself, it helped to stimulate the interest in the fishing 
 industry, and it was followed by a rapid increase in the number of 
 fishing-vessels sent out to Newfoundland from England, which country 
 now claimed the right to monopolize all the fisheries within the district 
 of which Gilbert had taken formal possession. By the close of the 
 sixteenth century, 200 English ships were going each year to New- 
 foundland, furnishing employment for 10,000 men and boys or^ shore 
 and aboard the vessels.^ Sir Walter Raleigh stated before Parliament 
 in 1593 that the Newfoundland fisheries were the "stay and support 
 of the west counties of England." 
 
 Though the English claimed a monopoly of the Newfoundland 
 fisheries and on several occasions emphasized their claim by the seizure 
 and confiscation of fishing-vessels belonging to other nations, the 
 French persisted in retaining a share of the profitable industry. The 
 French established a permanent settlement at Port Royal (Annapolis) 
 in 1604. Nine years later they attempted to plant another settlement 
 on Mount Desert Island, but the colonists had scarcely disembarked 
 before they were set upon and dispersed by an English force under 
 Samuel Argall, the Governor of Virginia, who had come northward on 
 a fishing voyage. This conflict marked the beginning of the century 
 and a half of struggle between England and France for the control of 
 the North American continent. 
 
 DEVELOPMENT OF NEW ENGLAND FISHERIES DURING THE SEVENTEENTH CENTURY. 
 
 In 1602, Bartholomew Gosnold commenced the fisheries off the 
 shore of New England. Gosnold gave Cape Cod its name because of 
 the large quantity of fish he captured in its vicinity, and when he 
 returned to England he reported that tjie fishing-grounds along the 
 coast he had visited were better even than those of Newfoundland. 
 In 1603, Martin Pring, who with two small vessels was sent to the 
 New England coast by some Bristol merchants, made a similar favor- 
 able report about the fisheries in that region. Three years later Pring 
 made a voyage to the Maine coast for the Plymouth partners of the 
 first Virginia Company. His favorable report concerning this voyage 
 led to an attempt in 1607 to plant a colony on the Kennebec River, 
 or the Sagadahoc River as it was then called, but the death of the 
 leading promoters of the scheme caused the settlement to be abandoned 
 before it had been in existence a year. 
 
 Though the initial attempt at the colonization of the New England 
 coast failed, the rich fishery which the early explorers discovered was 
 not neglected. Each year a number of English ships came to the new 
 fishery grounds. In 1614, Captain John Smith visited the coast, 
 
 'Whitbourne, Observations, in Smith, Works (Arber, ed.), 777. 
 
The American Fisheries Before lySg. 149 
 
 explored many of the bays and harbors, and gave both New England 
 and Plymouth harbor their names. In Smith's account of his voyage, 
 published in 1616, he states that near Monhegan Island he took 47,000 
 fish, which he sold for a goodly sum on his return to Europe.^ In his 
 General History of Virginia, written in 1624, Smith states "There hath 
 been a fishing, this year upon the coast [of New England], about fifty 
 English ships."^ Between 1620 and 1630, a number of settlements 
 were established in New England, virtually all of which, with the 
 exception of the one at Plymouth, were planted primarily for the 
 purpose of prosecuting the fishing industry. The Plymouth colony, 
 during the early years of its existence, depended largely upon the 
 fisheries for food, and the Pilgrims attempted to engage in the fishing 
 industry as a business venture, but because of a lack of skill and 
 equipment their early efforts ended in failure and loss. 
 
 The early years of the first fishing-stations in New England were 
 marked by a bitter dispute between the Colonial and English fishermen 
 on the one side and the Council for New England on the other over 
 the fishing rights along the New England coast. The members of the 
 Council to which James I granted, in 1620, that part of America lying 
 between the fortieth and forty-eighth degrees of north latitude, 
 claimed a monopoly of the fisheries in the waters adjacent to their 
 grant and tried to exclude from them all persons, whether British or 
 alien, who did not secure a license from the Council and pay a sum 
 equal to about 83 cents a ton on all vessels engaged in fishing within 
 the Council's territory. In 1623, the Council sent an agent to America 
 with power to restrain vessels from fishing without a license, but the 
 stubborn resistance offered by the fishermen against what they con- 
 sidered an invasion of their natural rights made the task of exacting 
 tribute too great to be accomplished, and the agent was compelled to 
 return and announce the total failure of his mission.^ The Council 
 did not again renew their efforts to secure a revenue from fishing licenses 
 and turned their attention to selling grants of land from their American 
 possessions. A few of the earlier patents which they sold conveyed 
 exclusive fishing-rights, but the practice of granting such monopolies 
 was discontinued in 163 1, and with the exception of a few quarrels 
 among the earlier patentees concerning their respective rights, the 
 American fisheries were never again disturbed by the question of 
 private monopolization. 
 
 The members of the Massachusetts Bay Company, who came to 
 America in 1630, though not realizing the commercial importance 
 which the fisheries were ultimately to have for them, were careful to 
 send over fishermen, salt, and fishing equipment even before their own 
 
 'Smith, "A Description of New England," in Works (Arber, ed.). 187. 
 
 'Smith, Works (Arber, ed.), 783. 
 
 'Sabine, Report on the Principal Fisheries of the Ameirican Seas, 43. 
 
ISO History of Domestic and Foreign Commerce. 
 
 emigration. Moreover, within a year after the settlement of Boston, 
 Governor Winthrop launched at Mystic the Blessing of the Bay, a 
 vessel of 30 tons, for use in trading with the Dutch at New Amsterdam 
 and with the other English plantations. Other vessels, both large 
 and small, were built at the various settlements planted by the Massa- 
 chusetts Bay Company, and a thriving commerce quickly arose. 
 Though fishing was for a few years carried on only in an incidental and 
 desultory manner, the products of the industry from the very first 
 constituted a part of the exports from the colony. In 1633, fish were 
 exported from Boston, and in 1634 a Maryland pinnace came to Boston 
 to exchange a cargo of corn for fish and fur.^ 
 
 By 1636, the people of Massachusetts began fully to realize that in 
 the fisheries lay their chief opportunity for commercial advancement, 
 and preparations were made to engage in the fishing industry on a 
 larger scale. Hugh Peter, a minister of Salem, inaugurated a move- 
 ment to raise capital for the purpose of establishing the fishing business 
 on a more substantial basis. He labored with untiring zeal to induce 
 the people of Salem to build ships and engage in trade, and to his 
 efforts was due in no small degree the maritime importance which the 
 city of Salem came to enjoy .^ At the same time that Salem responded 
 to the exhortations of the Reverend Peter, Boston, Marblehead, 
 Gloucester, Manchester, and other ports along the Massachusetts shore 
 also expanded their fishing industries. In 1639, for the encouragement 
 of the infant industry, the General Court passed an act providing that 
 all vessels and other property employed in taking, curing, and trans- 
 porting fish should be exempt from all duties and public taxes for seven 
 years, and that all fishermen, during the season of their business, as 
 well as ship-builders, should be excused from military duty.^ Under 
 this and other encouraging acts of the General Court the Massachusetts 
 fisheries prospered greatly. Governor Winthrop records that in 1641 
 about 300,000 dried fish were sent to market,* and his narrative gives 
 further indication of the growing importance of the fish trade in the 
 account of the return, in 1643, of the Trial, the first vessel built in 
 Boston, from a voyage to Bilbao and Malaga with a cargo of wine, 
 fruit, oil, and wool that had been purchased with the proceeds of the 
 sale of a cargo of fish.^ Before the middle of the century New England 
 merchants began to send cargoes of fish to the West Indies to be traded 
 ^ for molasses, rum, and bills of exchange. 
 
 The most important fish of commerce was the cod, and this variety 
 constituted by far the largest portion of the annual catch. But 
 mackerel, hake, pollock, herring, and other fish were also caught in 
 considerable quantities both for local consumption and for exportation. 
 It is worthy of notice that in 1670 the Plymouth Company, whose 
 
 'Winthrop, Journal (Hosmer, ed.), I, 131. ^Ibid., 168. 
 
 ^Shurtleff (ed.), Records of Massachusetts Bay, I, 257. 
 ^Winthrop, Journal (Hosmer, ed.) II, 42. '■Ibid., II, 92. 
 
The American Fisheries Before lySg. 1 5 1 
 
 fisheries were usually leased to individuals for a fixed annual sum, 
 granted the profits of the mackerel, sea bass, and herring fisheries for 
 use towards the maintenance of a free pubHc school.^ 
 
 Throughout New England the codfish were divided into three sorts : 
 The first of these, the merchantable, were exported to southern Europe; 
 the second or middling (of smaller size and poorer quality) were shipped 
 to the Canaries, the Madeiras, and Jamaica; the third (or refuse), 
 which consisted of the smallest and thinnest and the broken fish, were 
 sold to the sugar planters of the West Indies to be used as food for 
 negro slaves.^ As early as 1652 the General Court provided for the 
 inspection of fish. Other measures were enacted to fix the season for 
 taking diflFerent kinds of fish, to regulate the packing and curing of fish 
 intended for shipment to foreign markets, and to protect the people 
 living along the coast from the depredations of fishermen who were 
 inclined often to take timber and wood without compensating the 
 owners. 
 
 In 1645 some merchants of Charlestown and Boston sent several^ 
 vessels to the Newfoundland fisheries, but as the vessels were preparing 
 to return with their cargoes they were seized by a ship cruising in 
 Newfoundland waters in the interest of Charles I, who was at that 
 time battling for his crown and was not favorably disposed toward his 
 New England subjects, because of their sympathy with his Puritan 
 opponents. For a number of years after this occurrence few vessels 
 went from New England to the Newfoundland Banks, but about 1670 
 the need for a larger field for the rapidly growing fishing fleet of Mas- 
 sachusetts caused a renewal of the interest in the fisheries farther north, 
 and from that time forward the fishing-grounds off Newfoundland 
 were regularly visited by the New England fishermen.^ 
 
 The enactment of the Navigation and Trade Acts of 1660 and 1663 gave 
 an impetus to the ship-building and fishing industries of New England. 
 The omission of New England's most important products from the list 
 of enumerated commodities left the export trade free, and the monopo- 
 lization of the carrying trade of the colonies by vessels of the empire 
 increased the opportunities for the employment of colonial shipping. 
 The fact that England excluded the chief exported products of New 
 England was of benefit to the latter's shipping. Shipping interests of 
 England did not care to make a practice of carrying cargoes to places 
 
 ^Plytnouth Colonial Records, V, 108. 
 
 documents Relating to Colonial Hist, of N. Y., IV, 790. 
 
 'Seybert, in his Statistical Annals, p. 333, stated that in 1675 New England sent to the New- 
 foundland fishing-grounds 665 vessels measuring 25,650 tons and navigated by 4.405 seamen. 
 This statement, which has been quoted as showing a remarkable growth of the interest of New 
 England in the Newfoundland fisheries, manifestly contains a typographical error. The date 
 intended was 1765. Moreover, the figures, which Seybert probably took from Jefferson's report 
 on the fisheries (Am. State Papers, Commerce and Navigation, I, 8), were for the entire cod fishery 
 of New England during the ten years following 1765, and not for the Newfoundland cod fishery 
 alone. The fishing fleet of Massachusetts in 1741 did not contain above 400 sail, and in 1575 the 
 number was probably less than 150. 
 
152 History of Domestic and Foreign Commerce. 
 
 where no return cargo was available, and consequently a large part of 
 the carrying trade between England and the northern colonies was 
 relinquished to the New England vessels. The growth of the shipping 
 of New England was so great that it soon rivaled that of the mother 
 country. EngHsh shipping interests made earnest pleas to Parliament 
 to restrict this branch of colonial industry, but fortunately this was 
 not done. 
 
 The act of trade compelling the colonies to purchase wares of Euro- 
 pean manufacture in England worked little hardship on the trade of 
 New England. With the exception of wines and salt, the countries of 
 southern Europe, where a large part of New England's exports were 
 sent, produced but Httle that New England needed, and the law per- 
 mitted wines to be imported directly from the Azores and Madeira, 
 while with regard to the importation of salt there were no restrictions 
 whatever. For the purchase of the manufactured goods needed in the 
 colonies, England supplied the leading articles and also afforded the 
 most economical market for their acquisition. It was not until the 
 passage of the Molasses Act in 1733 that the commerce of New England 
 felt the heavy weight of burdensome regulation; but as this law was 
 ignored, commercial prosperity was practically unimpeded by English 
 legislation until the beginnings of the controversies that led directly 
 to the struggle for independence. 
 
 The whaling industry was estabHshed in the American colonies at an 
 early date. When Captain John Smith visited the New England coast 
 in 1614 he came with the intention "to take Whales and make tryalls 
 at a Myne of Gold and Copper,"^ but he abandoned both these projects 
 and engaged in fishing for cod off Monhegan Island instead. Richard 
 Mather, who came to Massachusetts in 1635, told of seeing, off the New 
 England coast, "mighty whales spewing up water in the air like the 
 smoke of a chimney .... of such incredible bigness that I will 
 never wonder that the body of Jonas could be in the belly of a whale."^ 
 The whaling industry started with the utilization of occasional drift 
 whales cast ashore by the sea, but it soon passed to the second stage of 
 pursuing in small boats the whales which appeared along the coast, 
 killing and towing them to shore, where they were cut up and the oil 
 and bone extracted. At Plymouth, Salem, Nantucket, at the villages 
 on the eastern end of Long Island, and in fact at all of the localities 
 where whaling subsequently became an important industry, with the 
 exception of New Bedford and New London, the whale fishery was 
 established as a regular business before the close of the seventeenth 
 century, and whale products constituted a considerable part of the 
 exports regularly shipped by New England merchants. 
 
 'Smith, "A Description of New England," in Works (Arber, ed.), 187. 
 'Young, Chronicles of the First Planters of Mass. Bay. 465. 
 
The American Fisheries Before lySg. 153 
 
 STRUGGLES WITH FRANCE OVER THE FISHERIES. 
 
 Early in the development of the fishing industries of New England 
 the fishermen became involved in difficulties with their French neigh- 
 bors to the northward. The rival claims of France and England to 
 Acadia and the efforts of EngHsh and French patentees to monopolize 
 the fisheries of that region, caused much strife and bloodshed between 
 the French and English fishermen during the early years of the seven- 
 teenth century. By the treaty of St. Germain, Charles I relinquished 
 to the French crown all places in Canada, Acadia, and Cape Breton 
 occupied by EngHsh subjects,^ but since the treaty was very unpopular 
 in England, and since it defined no territorial lines, contentions quickly 
 arose again.^ Cromwell, repudiating the treaty made by Charles I as 
 fraudulent, took forcible possession of Acadia in 1654, established a 
 colony, and organized a governmentr but after the Restoration these 
 acts were disavowed, Acadia was again relinquished to France by the 
 Treaty of Breda (1667),^ and the Treaty of London in 1686 confirmed 
 to both France and England the possessions in America held at the 
 beginning of the hostilities of which the treaty marked the end.^ 
 These two treaties also failed, however, to define the territorial limits 
 of the American possessions of the rival powers, and the fishing-grounds, 
 which both sought to monopolize for their own subjects, continued to 
 be the scene of collisions and quarrels. As the New England fishing 
 industry expanded, the relations of the English colonies with the French 
 became exceedingly hostile, and the leading citizens of New England 
 began to clamor for the expulsion of French fishing interests from 
 American waters. The French, on the other hand, were equally anx- 
 ious to maintain the exclusive possession of the fisheries of Nova Scotia 
 and Cape Breton. They laid claim to all the territory east of the 
 Kennebec River, levied tribute on all foreign vessels engaged in fishing 
 on the Acadian coast, and to discourage the visits of New England 
 fishermen to that region they incited the Indians to attack the outlying 
 English settlements and to murder the crews of boats frequenting the 
 coast of Maine. 
 
 The war between England and France which followed the accession 
 of William and Mary gave the New Englanders the eagerly desired 
 opportunity to undertake the conquest of Nova Scotia. Sir William 
 Phips, a native of Maine, led a successful expedition against the 
 French colony in i6go. At the Peace of Ryswick, in 1697, it was 
 stipulated that all territory conquered during the war should be re- 
 stored, and the New England people, much to their dissatisfaction and 
 indignation, were compelled to see France confirmed in the possession 
 of all the coast islands and fishing-grounds from the Penobscot River 
 to beyond Labrador, except the eastern half of Newfoundland, which 
 
 ^Corps Universal Diplomatique, VI, pt. i, 31. -Ibid., VII, pt. i, 40. ^Ibid., VII, pt. ii, 140. 
 
154 History of Domestic and Foreign Commerce. 
 
 was retained by England.^ The governor of Nova Scotia received 
 orders from King Louis to seize every American fisherman that ven- 
 tured east of the Kennebec River, leaving free to American vessels only 
 those fisheries of the eastern half of Newfoundland and those lying 
 between the Kennebec River and Cape Cod. 
 
 In 1702 the war between France and England broke out again, and 
 the contest for the mastery of the American fisheries was once more 
 renewed. In 1710 Nova Scotia was again taken by combined colonial 
 and EngUsh forces, and this time it was not given back. Peace was 
 concluded in 171 3. By the terms of the treaty, signed at Utrecht, the 
 French were prohibited from fishing within 30 leagues of the coast of 
 Nova Scotia from Sable Island to the southwest; and the whole of 
 Newfoundland, together with Hudson Bay and its borders, was for- 
 mally ceded to England.^ France retained possession of Cape Breton 
 Island, the Gulf of St. Lawrence, and the islands lying within its mouth, 
 while at Newfoundland, French fishermen were to have the privilege of 
 catching fish and drying them on the land on the eastern coast from 
 Cape Bonavista to the northern part of the island and thence down the 
 western coast as far as Point Riche. It was thought by the English 
 interests that this would give them exclusive possession of the richest 
 of the fisheries, including those off the coasts of Maine and Nova 
 Scotia and in the Bay of Fundy, together with an equal chance to 
 compete with the French in all the other fisheries. The French, 
 however, immediately colonized Cape Breton Island and erected a 
 strong fortress at Louisbourg. Within a short period of time their 
 fisheries, which had declined during Queen Anne's War, were more 
 flourishing and prosperous than ever before, much to the jealousy and 
 dissatisfaction of all New England. 
 
 The years between the Peace of Ryswick and the Treaty of Utrecht 
 were a period of depression for the New England fisheries, but upon 
 the conclusion of peace in 171 3 there was a general revival. The 
 settlements on the coast of Maine were reestabHshed and new stations 
 planted farther east, the ship-building industry commenced once more 
 to thrive and expand, and the volume and range of foreign trade were 
 increased. The renewed activity in the fisheries was soon checked by 
 the recurrence of Indian depredations on the Maine coast and by the 
 aggressive competition of the French. In 1725, however, a treaty was 
 made with the Indians, and once more a period of prosperity ensued, 
 which lasted for a score of years. 
 
 In 173 1 New England employed between 5,000 and 6,000 men in the 
 fisheries, and the annual product was estimated at 230,000 quintals of 
 dried fish.^ It was about this time that Marblehead took the lead as 
 a fishing-port. Gloucester, Plymouth, Salem, and other towns of 
 Massachusetts added each year to their fishing fleets, and the fishing 
 
 ^Chalmers, Treaties, I, 332. '^Ibid.. 381. 'Anderson, Origin of Commerce, III, 172. 
 
The American Fisheries Before lySg. 155 
 
 industries of New Hampshire, Maine, and the Isles of Shoals grew very 
 rapidly. The cod fishery retained the place of chief importance, but 
 sturgeon, mackerel, herring, salmon, and other varieties of fish con- 
 stituted a considerable part of the total yearly catch. The whale 
 fishery advanced from the stage of boat whahng to deep-sea whaHng. 
 By 171 5 Nantucket had 6 sloops engaged in the deep-sea whaling and 
 by 1730 the number had increased to 25. In 1736, a dozen vessels, 
 some of which were of 100 tons burden, went from Provincetown to 
 the whale fishery of Davis Straits, and at other New England whaling 
 ports there was a similar steady expansion.^ 
 
 In 1744, England again became involved in war with France. Filled 
 with envy and alarm on account of the continued prosperity that had 
 attended the French fisheries after the Treaty of Utrecht, the people 
 of New England hailed with satisfaction the coming of the opportunity 
 to make another attempt to expel their rivals from the field. Cape 
 Breton Island, with its strong fortress at Louisbourg, was the key to 
 the French position and it was the seizure of this point that the colonial 
 government of New England decided to undertake. Accordingly, in 
 March 1745, an expedition under the command of William Pepperell 
 was sent against the French stronghold. In the colonies south of New 
 England the authorities declared Louisbourg to be impregnable and 
 refused to lend any assistance to the expedition, which they asserted 
 could end only in ridiculous failure. But notwithstanding the strength 
 of the French position and the opinions of their neighbors, Pepperell's 
 men, with the aid of an English fleet, accomplished the capture of 
 Louisbourg in less than two months, an exploit that was one of the 
 most remarkable events of colonial history. However, the effect of 
 this brilliant feat on the outcome of the struggle for the control of the' 
 fisheries was entirely negligible, for in the Treaty of Aix-la-Chapelle, 
 by which the war was terminated, in 1748, England returned Louisbourg 
 and Cape Breton Island to France, thus restoring conditions in America 
 to practically the same state that had existed before the war.^ 
 
 In 1756, the conflict was once more renewed. Again the English and 
 colonial forces demonstrated their superiority over the French, and this 
 time the fruits of victory were not given back. By the terms of the 
 treaty concluded in Paris in 1763, France was dispossessed of her con- 
 tinental possessions in North America and lost all her territory in the 
 northern fishing-grounds except the two small islands of Miquelon and 
 St. Pierre, which she was allowed to retain for the use of French fisher- 
 men.^ The treaty provided that the fisheries of Newfoundland and 
 Nova Scotia should remain on the footing established by the treaty of 
 1713, but France was excluded from the fisheries lying within 1 5 leagues 
 of Cape Breton Island and from the fisheries in the Gulf of St. Lawrence 
 lying within 3 leagues of the coast of any land belonging to Great 
 
 "Tower. History of Amer. Whale Fishery, 27. ^Chalmers, Treaties, I, 424. ^Ibid., 467. 
 
IS6 History of Domestic and Foreign Commerce. 
 
 Britain. Thus did England acquire an empire from her ancient rival, 
 and the long struggle of the two nations for supremacy in the New 
 World came to an end. 
 
 THE FISHERIES FROM THE PEACE OF PARIS TO THE REVOLUTION. 
 
 To the American colonists the most important result of the conflict 
 with France was, at that time at least, the termination of the efforts 
 of the French to monopolize the fisheries. During the two decades 
 preceding the Peace of Paris the fishing industry of New England had 
 failed to expand at a normal rate. Thousands of fishermen had 
 entered the regular EngHsh navy, many had abandoned their peaceful 
 calling for the exciting life aboard a privateer, and others had joined 
 the numerous expeditions sent against the French military posts in 
 Canada. With the close of the war all conditions seemed propitious 
 for a rapid industrial and commercial expansion. The danger of a 
 foreign war was no more present, there was no longer a risk of molesta- 
 tion of fishing and trading vessels by ubiquitous privateers, the range 
 of industrial and commercial operations was greatly widened, and a 
 period of unprecedented prosperity seemed to be at hand. But, unfor- 
 tunately, the English King and his ministry announced that the time 
 had come for a radical change of colonial policy. It was declared that 
 henceforth the trade of the colonies was not only to be regulated in such 
 a way as to serve the interests of the English merchants and manufac- 
 turers, but also to be subjected to taxation, the revenue from which 
 would contribute to the support of the imperial administrative system 
 and, perchance, even afford a surplus to help extinguish the large debt 
 incurred in the acquisition of the imperial possessions. 
 
 Casting around for a starting-point for the new colonial policy, the 
 British ministry hit upon the almost forgotten and long-neglected 
 Molasses Act of 1733 as a measure exactly suited to their needs, and 
 announced their intention of enforcing its provisions to the letter. 
 Their proposal met with the most vigorous protestations from the New 
 England colonies. The prosperity of the fisheries which furnished the 
 basis of New England commerce was dependent upon the West Indian 
 trade, and the English islands in the West Indies provided a market 
 for only one-third of the fish exported and furnished a still smaller 
 fraction of the molasses needed in the New England rum distilleries. 
 The General Court of Massachusetts stated that the enforcement of 
 the Molasses Act would cause a direct pecuniary loss to the colony of 
 nearly £300,000 annually from injury to the fisheries, besides decreasing 
 the amount of importations from England by a sum almost as large. 
 The people of Rhode Island sent a long remonstrance to the Lords 
 Commissioners of Trade and Plantations, stating that the total yearly 
 production of molasses in the British West Indies would not equal two- 
 thirds of the amount annually imported into their colony, and that the 
 
The American Fisheries Before lySg. 157 
 
 Molasses Act of 1733, if revised and carried into execution, would bring 
 utter destruction to all their industries and trade.^ Notwithstanding 
 these representations, the English Parliament passed the Sugar Act of 
 1764. By this measure duties considerably lower than those levied by 
 the act of 1733 were imposed on foreign molasses imported into the 
 colonies, and the importation of foreign rum was prohibited. At the 
 same time, duties were levied on several other important colonial 
 imports and preparations were made for the extension of the British 
 system of stamp taxes to the colonies. 
 
 The ten years following the passage of the Sugar Act witnessed the 
 gradual widening of the breach between the colonies and the mother 
 country. Parliamentary measures to compel submission and obedience 
 were met one after the other with evasion and resistance on the part 
 of the colonies. One of the last efforts of England to force the colonies 
 to submit was an act, passed in 1775, restricting New England's com- 
 merce entirely to English ports and providing that no vessel of New 
 England should be permitted, except by special license, to engage in 
 any fishery on any part of the coast of North America. In less than 
 a month after the passage of this measure, the engagements at Lex- 
 ington and Concord signalized the beginning of the Revolutionary War^^ 
 
 In spite of the oppressive commercial legislation following the French 
 and Indian War, the commerce of New England had steadily expanded. 
 By bribery or intimidation of customs officials, by using false certifi- 
 cates, and by smuggling, a large trade with the French and Spanish 
 West Indies was continually maintained, and by means of this trade 
 the fisheries grew more rapidly than at any previous time. It is esti- 
 mated that during the ten years from 1765 to 1775. there were 665 
 vessels, of a total of 25,630 tons, and carrying 4,405 men, annually 
 employed in the New England cod fishery alone.- In Maine the 
 number of vessels was 60, with a tonnage of 1,000; the remainder 
 belonged to Massachusetts. Marblehead and Gloucester were the 
 leading fishing-ports, and Salem, Ipswich, Yarmouth, Plymouth, and 
 Chatham all had cod fleets numbering 30 sail or more. Three hundred 
 and fifty vessels, many of which were more than 100 tons burden, were 
 employed in carrying the fish to markets in Europe and the West 
 Indies. Altogether the fisheries furnished employment for upward of 
 10,000 men, and yielded a product approximating $2,000,000 a year in 
 value. The colonial whale fishery in 1774 employed no less than 360 
 vessels, with an aggregate burden of 33,000 tons. Of these, 300 be- 
 longed to Massachusetts ports, of which Nantucket held the lead with 
 at least 120, and the remainder were distributed among different ports 
 of Connecticut, Rhode Island, and New York. 
 
 'Callender, Selections from Earn. Hist, of U. S., 56. 
 'Amer. State Papers, Commerce and Navigation, I, 8. 
 
158 History of Domestic and Foreign Commerce. 
 
 EFFECT OF THE REVOLUTION UPON THE FISHERIES. 
 
 The opening of the Revolutionary War marked a complete cessation 
 of the fishing industry. In his History of the New England Fisheries 
 (p. 121), Mr. Raymond McFarland graphically pictures the conditions 
 of the time as follows: 
 
 " For the first time since its beginning in the early part of the seventeenth 
 century, this ancient industry of the sea was wholly suspended. For a decade 
 the annals of the fisheries give place to records of war, to feats of daring on 
 land and sea. What could be accompHshed neither by raiding Indians, nor 
 by hostile French wars, nor by restrictions of Parliament, nor by two centuries 
 of battling with the storms of the ocean, was accomplished in a single season by 
 the war. The doughty schooners fled for refuge to their native harbors; lines, 
 tubs and sounding-lead were laid away in storehouses; cargoes of fish and salt 
 were unloaded upon the wharves; captain and crew threw off their oiled 
 barvels, and the seas were undisturbed by the white sails of fishing craft that 
 had dotted their surface for more than five generations. 
 
 "But a wonderful transformation was at hand! Almost in a night the 
 change took place, for, on another day, the largest vessels in the fleet were 
 speeding out of harbor once more to scour the seas in search of a new prey. 
 Lines and tubs had given place to cutlasses and swivels; out of the sounding- 
 leads bullets had been melted; the hold of the vessel, once filled with salt and 
 fish, furnished commodious quarters for a score or two of fighting seamen; 
 barvels had been exchanged for American uniforms for men who were as eager 
 now to train their guns upon British men-of-war as they had been but a few 
 weeks before to cast their lines on the Grand Bank of Newfoundland. In this 
 way hundreds of fishing schooners were fitted out as privateers, manned by 
 fishermen in numbers reaching into the thousands. Many fishermen enlisted 
 in the land service, too, and gave good accounts of themselves at Bunker Hill, 
 Trenton, and other places. But the sea held by far the greater number of the 
 enlisted fishermen. This was but natural, as the sea was their chosen home, 
 and men who had been driven from the scene of their daily toil in securing a 
 living for their families found no better place for redressing their wrongs than 
 at the place where the wrong was committed." 
 
 The losses caused by the interruption of the fisheries can not be 
 determined. The loss in products must have been $15,000,000, and 
 the loss from the decay of wharves, vessels, and other property used 
 in fishing was unquestionably several hundred thousand dollars. The 
 condition of the fishing-ports at the close of the war bore adequate 
 testimony as to the ravaging eflFect of the struggle upon the entire 
 industry. At Marblehead, for instance, the vessel tonnage decreased 
 from 12,000 in 1772 to 1,509 in 1780, and the number of polls from 
 1,203 to 544. In 1774, Chatham employed 27 vessels in the cod fishery 
 and in 1783 only four or five vessels were left in the harbor, and "the 
 town was filled with widows mourning the loss of their husbands and 
 sons." The fishing industry in all its branches was virtually destroyed, 
 and the people who had formerly depended upon it for their livelihood 
 were reduced to destitution and misery. 
 
 In the negotiations for peace in 1783, the fisheries were an important 
 subject for consideration, just as they had been an important factor in 
 
The American Fisheries Before lySg. 159 
 
 the events leading up to the war for independence. Fortunately for 
 New England, one of the commissioners who negotiated the treaty was 
 John Adams, who, as a native of Massachusetts, thoroughly understood 
 the importance of securing from England liberal concessions in regard 
 to the fishing-rights of the people of the United States. By dint of 
 arduous labor, Adams was able to achieve results that surpassed both 
 the hopes of his government and the expectations of the New England 
 people. The terms of the treaty in regard to the fisheries were expressed 
 in Article III, as follows: 
 
 "It is agreed that the people of the United States shall continue to enjoy 
 unmolested the right to take fish of every kind on the Grand Bank, and on the 
 other banks of Newfoundland; also in the Gulph of St. Lawrence, and in all 
 other places in the sea where the inhabitants of both countries used at any 
 time heretofore to fish. And also that the inhabitants of the United States 
 shall have liberty to take fish of every kind on such part of the coast of New- 
 foundland as British fishermen shall use (but not to dry or cure the same on 
 that island) and also on the coasts, bays, harbours and creeks of all other of 
 His Britannic Majesty's dominions in America; and that the American fish- 
 ermen shall have the liberty to dry and cure fish in any of the unsettled bays, 
 harbours, and creeks of Nova Scotia, Magdalen Island, and Labrador, so long 
 as the same shall remain unsettled; but so soon as the same or either of them 
 shall be settled, it shall not be lawful for the said fishermen to dry or cure fish 
 at such settlements, without a previous agreement for that purpose with the 
 inhabitants, proprietors or possessors of the ground." 
 
 The privileges granted to the people of the United States by this 
 article were practically equal to the privileges enjoyed during the 
 colonial period. The securing of such favorable terms was one of the 
 most satisfactory results of the treaty negotiations. 
 
 With the return of peace, efforts were immediately made to revive 
 the languishing fishing industries. However, the long period of inaction 
 had brought about changes which made recovery exceedingly difficult. 
 The large fishing equipment had decayed or had been devoted to other 
 uses, the fishermen had sought other employment, and their children 
 were without training or experience in the fishing business. More- 
 over, the fisheries were dependent upon the foreign trade, and the new 
 nation found that the commercial relations of an independent power 
 with the rest of the world were quite different from the relations 
 possessed by the colonies of a powerful and wealthy empire. England 
 was no longer a protector, but a keen competitor. France and Spain 
 were willing enough to lend encouragement and assistance to rebeUious 
 English colonies, but, the discomfiture of their hereditary foe accom- 
 plished, they displayed a decided aversion toward aiding the develop- 
 ment of a new commercial rival. The British navigation laws, literally 
 interpreted, not only excluded all vessels of the United States from 
 trade with English colonies, but even prohibited them from carrying 
 goods produced anywhere in America to the ports of Great Britain. 
 
l6o History of Domestic and Foreign Commerce. 
 
 Shortly after the conclusion of peace, and annually thereafter for a 
 number of years, Parliament empowered the King to regulate the com- 
 mercial intercourse of England with the United States. Orders in 
 council were soon issued placing vessels of the United States on prac- 
 tically the same footing as British vessels with respect to the carriagd 
 of produce of the United States directly to the ports of Great Britain, 
 but there was no relaxation of the navigation laws with regard to the 
 trade between the United States and the British West Indies. More- 
 over, for the purpose of promoting the British fisheries in America, the 
 orders in council designating the commodities which British vessels 
 might carry from the United States to the British West Indies excluded 
 fish from the Ust. The English sugar-planters themselves earnestly 
 endeavored to secure freedom of trade with the United States, but their 
 efforts were unavailing. The orders in council respecting the West 
 Indian trade were repeated from year to year, and in 1788 their pro- 
 visions were embodied by Parliament into permanent law. In 1784 
 France and Spain closed their colonial ports in America, thus excluding 
 the shipping of the United States from all commerce with the West 
 Indies, except a small trade with the Danish and Dutch Islands. To 
 add to these adverse conditions, the Mediterranean trade of the United 
 States, now that the protection of England was withdrawn, was totally 
 destroyed by the Algerian pirates. The prospects for a revival of 
 commerce were indeed gloomy. 
 
 However, the protestation of the sugar planters of the French West 
 Indies, the decline of the French fisheries, and a crop failure in France 
 caused the French government soon to relax the restrictions it had 
 imposed. Once a number of important West Indian ports were open 
 to American vessels, the West Indian trade quickly recovered. Though 
 the English laws were not modified, they were evaded or disregarded and 
 American provisions found access to markets in the British islands. 
 Trade with Portugal and Spain was renewed, and new markets were 
 found along the Baltic and in the Far East. Beginning with 1786, the 
 foreign trade of the United States began to revive very rapidly, and 
 by 1788 it was as prosperous as it had been at any previous time. 
 
 With the revival of foreign commerce, especially of that with the 
 West Indies, Portugal, and Spain, the New England cod fishery began 
 to recover. Between 1786 and 1790 it employed each year an average 
 of 539 vessels measuring 19,185 tons. The tonnage for 1789-90 was 
 26,522, a thousand tons more than the average for the prosperous years 
 from 1765 to 1775, and the quantity of dried and pickled fish exported 
 in 1789 was somewhat larger than the quantity exported in 1771. The 
 profits derived from the industry were not so large, however, as in 
 former years, because of the advantage held in competitive markets by 
 the fishermen of France and England, who were aided by large bounties 
 granted by their governments. Nevertheless, the superior natural 
 
The American Fisheries Before lySg. i6i 
 
 advantages of the American fishermen enabled them to maintain and 
 expand their business. At the time of the beginning of the new govern- 
 ment the cod fishery seems to have been rehabiHtated, though it was 
 soon to be reduced to a temporary state of distress through losses 
 occasioned by the import duties levied by Congress on salt and material 
 used in fishing equipment. 
 
 Though the cod fishery recovered, the whale fishery did not. For 
 some years before the Revolution, England had provided the market 
 for nearly all colonial whale products and Parliament had encouraged 
 the colonial whaling industry by granting preferential duties. Whale- 
 fins were "enumerated" in 1766, and practically all the oil produced in 
 the colonies was also sold in Great Britain. After the war, the English 
 markets were completely closed to American shipments by prohibitive 
 duties. Moreover, while whaling had been suspended, the people of 
 America had grown accustomed to the use of tallow candles, and there 
 was no large domestic demand for oil after the whaling industry was 
 resumed. Prices fell far below what they had been before the Revolu- 
 tion. The fleets of Nantucket, New Bedford, and other whaling ports 
 did not attain their former size. Some Nantucket whalemen went 
 to Nova Scotia in response to inducements from the British govern- 
 ment and a few others emigrated to Europe to carry on the whaling 
 business at Dunkirk under the patronage of the French King. In 1789 
 the prospects of American whaling were made somewhat brighter by 
 the opening of the French market to American products, but the hopes 
 occasioned by this action were soon dispelled by the outbreak of the 
 French Revolution. The adverse conditions of restricted market and 
 low prices could not be overcome, and though the whaling industry 
 continued, it remained on a precarious footing for more than a quarter 
 of a century, and at times it seemed doomed to total extinction. 
 
CHAPTER X. 
 AMERICAN COASTWISE TRADE BEFORE 1789.^ 
 
 The beginning of the coastwise trade, 162. Conditions in the northern colonies 
 favorable to coastwise trade, 164. British Navigation Acts and the colonial coast- 
 wise trade, 165. Evasion of the Navigation Acts, 166. Effects of the Acts, 167. 
 Character and volume of the intercolonial coastwise trade, 167. The trade between 
 the northern and southern colonies, 169. Statistics of vessel entrances and clear- 
 ances in 1769, 171. Interstate trade after the Revolution, 172. Commercial 
 provisions of the Constitution, 173. 
 
 The coastwise commerce of the continental colonies planted in 
 America had its origin partly in the work of collecting commodities 
 for export and of distributing imported goods, and partly in the inter- 
 change of the various colonial products. The Plymouth colonists 
 established trading-posts along the New England coast, for the col- 
 lection of furs and other native commodities, from the sale of which 
 they secured the funds to pay their debt to the English investors who 
 had furnished the capital for their colonizing venture. Governor Brad- 
 ford records, too, that in 1627 a vessel came to Plymouth from the 
 Dutch plantation of New Amsterdam, bringing "diverse commodities, 
 as sugar, linen cloth, Holland finer and courser stufes, etc." In 163 1 
 Governor Winthrop built the Blessing of the Bay for trade with the other 
 plantations, and he records that during the same year a vessel arrived 
 from Virginia laden with corn and tobacco to be exchanged for fish. 
 
 To the Dutch who settled at New Amsterdam may be given the 
 credit for being the first to develop an extensive coastwise commerce on 
 a systematic basis. At the time the Dutch settlement was established, 
 Holland was the greatest distributing center of Europe. Like the city 
 state of Venice in the fourteenth and fifteenth centuries, Holland was in 
 the seventeenth century a nation of traders. To the busy seaports of 
 that country came the products of all parts of the world, to be redis- 
 tributed, and in the outposts established by the Dutch trading com- 
 panies the eager and energetic commercial activities of the Dutch 
 people found prompt expression. From New Amsterdam small vessels 
 sailed to the English plantations both to the north and to the south, 
 exchanging gunpowder, salt, clothing, and European manufactures of 
 all kinds for large quantities of tobacco, grain, fish, and furs, part of 
 which was consumed at the Dutch colony, but most of which was trans- 
 ported to the markets of Holland. In the ubiquitous Dutch trading- 
 
 'This chapter, which is intended to present a brief general account of the Coastwise Commerce 
 prior to 1789, was written by T. W. Van Metre, who consulted, in addition to the works referred 
 to in the footnotes, the earlier chapters of an unpublished History of the Coastwise Commerce of 
 the United States by Professor Thomas Conway, Jr. [Editor.] 
 
 162 
 
American Coastwise Trade Before l^Sg. 163 
 
 vessels England found the greatest obstacle to her own commercial 
 and naval progress, and it was only after a stubborn conflict that the 
 restrictive commercial poUcy of the Commonwealth prevailed and the 
 formidable rival was crushed. In 1664 New Amsterdam was seized by 
 the English, and though the Dutch continued for a time to share in the 
 American trade, and even recovered their colony for a brief period, their 
 power in the American continent, both political and commercial, was 
 broken, and before the close of the seventeenth century Dutch shipping 
 virtually ceased to figure in either the foreign or the domestic trade of 
 the English colonies. 
 
 Meanwhile, even before any attempt had been made to exclude the 
 Dutch from the EngHsh colonial trade, the shipping of New England 
 had begun to assume a position of no small importance in the inter- 
 colonial and over-sea commerce of America. During most of the first 
 century of their existence the New England colonies had a surplus of 
 grain for export, which, with fish and other provisions and imported 
 wares from Europe, found a ready market in Virginia and Mary- 
 land as well as in the West Indies. From Virginia and Maryland large 
 quantities of tobacco were taken coastwise to Boston and Salem, and, 
 regardless of the admonition of Charles I, this product was then sold 
 in the markets of continental Europe, while from the West Indies sugar 
 and dyewoods were collected for export, and molasses was imported for 
 the rum manufacture. Aside from the coastwise trade with the 
 southern colonies, the New England people developed a thriving and 
 prosperous trade along their own coasts, collecting at their important 
 seaports the grain, fish, fur, and other products of the smaller settle- 
 ments and distributing among them the imports from Europe and the 
 other colonies. 
 
 There were several reasons why the colonies of New England, as 
 well as New York, and, later, Pennsylvania, should develop a commerce 
 to be carried on by their own people and in their own ships. In the 
 first place, the comparative lack of native commodities which could be 
 sold in England made it almost imperative that the people of these 
 settlements should provide their own vessels to transport their surplus 
 products to whatever markets they could find, and it was inevitable 
 that a portion of the population should engage in trade as a means of 
 securing a livelihood. The development of the fisheries gave a tre- 
 mendous stimulus to ship-building, and both of these industries, as 
 well as the rum manufacture and small-farm agriculture, were con- 
 ducive to the growth of seaport cities, which became the centers of a 
 thriving and prosperous commerce. With such advantages as cheap 
 ships, little external competition, and well-located markets, the traders 
 of the northern colonies were able almost completely to monopolize 
 the intercolonial trade of the British possessions in America. In the 
 South exactly opposite conditions prevailed. The two chief products. 
 
164 History of Domestic and Foreign Commerce. 
 
 tobacco and rice, were demanded in England, and English merchants 
 sent out the ships necessary for their transportation. Agriculture, 
 conducted on a large scale, was the chief industry, navigation and 
 shipping remained undeveloped, few cities arose, and the number of 
 merchants and traders was relatively small. 
 
 For the development of coastwise trade, conditions in the northern 
 colonies were much more favorable than in the southern. In the 
 former, the population lived near the sea, and, while there was a large 
 number of ports to be found along the coast, it was from only a few of 
 them that an important over-sea trade was carried on. To these larger 
 ports numerous small shipments of articles intended for the export 
 trade were carried from the other settlements, and from them were 
 distributed the imported wares which poured in from Europe, Africa, 
 the Western Islands, and the West Indies. To this business of collec- 
 tion and distribution was added the interchange of colonial products 
 intended for domestic consumption, a trade which became increasingly 
 important during the eighteenth century, when New England was 
 compelled to rely for breadstufFs on the farms of Pennsylvania, New 
 Jersey, and New York. In the South a large part of the over-sea trade 
 was carried on directly from the plantation wharves which lined the 
 numerous navigable rivers, a single plantation often being able to give 
 employment to two or morevessels. Theworkof the collection of exports 
 and the distribution of imports in small vessels was relatively unimpor- 
 tant, and consequently the local coastwise trade never approached the 
 magnitude of the local trade of the northern colonies, where production 
 was on a smaller scale, industry more diversified, and trading more active. 
 The coastwise trade between the North and the South came to be of 
 some importance, but it was small in comparison either to the local 
 coastwise trade of the northern colonies or to the trade between the 
 continental colonies and the West Indies — the most important branch 
 of the inter-colonial trade. Only a small amount of southern products 
 was consumed in the northern colonies, and the demand for the prod- 
 ucts of the northern settlements among the southern plantations was 
 likewise relatively small. 
 
 It was not until after the close of the colonial period, when the cotton 
 industry was established and the South began to supply raw materials 
 for northern manufactures and to draw its subsistence from northern 
 farms, that a large and valuable intersectional commerce was developed. 
 During most of the colonial period Virginia and Maryland raised grain in 
 sufficiently large quantities to have a surplus for export, and many 
 of the southern plantations maintained small fishing industries to 
 supply domestic needs. Rum was probably the most important 
 domestic commodity purchased from New England, and even rum 
 could be secured as easily from Jamaica as from Rhode Island. The 
 exportation of the southern surplus to Europe fell for the most part into 
 
American Coastwise Trade Before 178 g. 165 
 
 the hands of British merchants, and though the carriers of New Eng- 
 land and New York collected some southern tobacco and rice at 
 northern ports for shipment to Europe, the quantity was very small as 
 compared to that carried directly in the vessels of England. The 
 shipping of England likewise carried to the southern planters most of 
 the European imports which they consumed. 
 
 BRITISH NAVIGATION ACTS AND THE COLONIAL COASTWISE TRADE. 
 
 The enactment of the Acts of Trade of 1660, 1663, and 1673 had a 
 tendency to crystallize the conditions of trade described above. That 
 is, these laws practically gave control of the intercolonial trade to the 
 shipping of the northern colonies, made direct trade with England the 
 most important branch of the commerce of the southern colonies, and 
 greatly limited the possibility of the expansion of the coastwise trade 
 between the two sections. The act of 1660 provided that all vessels 
 sailing to the plantations from England, Ireland,^ Wales, or Berwick 
 were to give bond at the fort of departure that if the vessels loaded enu- 
 merated commodities, they should be brought to some port of England, 
 Ireland, or Wales or to Berwick, and "for all ships coming from any 
 other port or place to any of the aforesaid plantations, who by this 
 Act are permitted to trade there, that the Governor of such English 
 Plantation shall before the said vessel be permitted to load on board 
 any of the said commodities, take Bond . . . that such ship or vessel 
 shall carry all the aforesaid goods that shall be laden on board . . . 
 to some other of his Majesty's Plantations, or to England, Ireland, 
 Wales or Town of Berwick upon Tweed." The strict enforcement of 
 this act would have meant, of course, that a vessel saihng from England 
 would not be able to transport any of the enumerated articles from one 
 colony to another, and that for the most part this trade would be left 
 to colonial vessels. There is no printed evidence available to show 
 whether this apparent discrimination in favor of colonial vessels was 
 ever rigorously enforced, but it is true, nevertheless, that the colonial 
 vessels did almost completely monopolize the intercolonial trade, and 
 not until after the Revolution did ships from England engage to any 
 large extent in the carrying trade between the continental colonies and 
 the West Indies. 
 
 Under the law of 1660 the colonists had perfect freedom of trade in 
 enumerated commodities, and were able to secure them for their own 
 consumption at a smaller price than was charged the English consumer, 
 who was compelled to pay an import duty. This privilege, however, 
 the colonial merchants soon abused, especially in connection with the 
 Virginia tobacco trade. It appears that after the tobacco was landed 
 at a New England port no effort was made at the time of its reexporta- 
 
 ^Ireland was excluded from the plantation trade in enumerated commodities by the act of 1663 
 and subsequent laws. 
 
l66 History of Domestic and Foreign Commerce. 
 
 tion to secure a bond that it would be shipped to some other plantation 
 or to some port in England or Wales. Consequently the tobacco was 
 carried directly to continental Europe, and not only did the English 
 crown suffer the loss of the revenue it would have obtained had the 
 tobacco been sent to England, but the EngHsh merchants were deprived 
 of the commissions they would have received had the trade passed 
 through their hands. It was estimated that in 1663 the English 
 government was losing annually £10,000 on account of the activity 
 of the New England merchants in the Virginia tobacco trade. 
 
 To prevent the loss of revenue and to compel the shipment directly 
 to England of the enumerated commodities, beyond the amount actu- 
 ally demanded for colonial consumption, the act of 1673 was passed, 
 levying export duties on enumerated commodities shipped from one 
 colonial port to another, the duties being practically the same as the 
 import duties paid on the goods when taken to England. For a time 
 this law had but little effect. The New England traders smuggled 
 tobacco out of the southern colonies and exported it to Holland and 
 France as before. Moreover, they interpreted the law to mean that 
 once they had paid the export duties required they were then at liberty 
 to send the tobacco wherever they chose. After carrying tobacco to 
 ports on the European continent they returned with cargoes of manu- 
 factures which, contrary to the law of 1663, were not "laden and 
 shipped in England." These open violations of the Acts of Trade 
 called forth a vigorous protest from British merchants, who in a peti- 
 tion^ to the King in 1676 stated that New England was becoming the 
 "great mart and staple" of all the colonies, and that England was 
 being robbed of her trade and the King of his revenue. Notwith- 
 standing the opinion of the attorney-general of England that the act 
 of 1673 did not abolish the necessity of giving bond for the shipment 
 of enumerated goods to some English dominion, the direct trade with 
 the continent of Europe continued, and even after the passage of the 
 act of 1696, which specifically provided that bond should be given 
 whenever the enumerated articles were shipped and that the export 
 duties should be paid just as often as these articles were sent from one 
 colony to another, the illicit trade was carried on to some extent. 
 Edward Randolph reported^ in 1676 that Massachusetts took no notice 
 of the Navigation Acts, importing enumerated goods of all varieties 
 and transporting them directly to Europe. A favorite plan to secure 
 tobacco was to smuggle it out of Carolina and the "Out Parts of Vir- 
 ginia,"^ where it was possible to evade the payment of export duties. 
 Robert Holden wrote to the Commissioners of Customs in 1679 that 
 half a dozen Boston traders were receiving each year the greatest part 
 of the tobacco of Albemarle County, upon which little of the export 
 
 ^Calendar of Stale Papers, America and West Indies, 1675-76, p. 337. 
 ^Ibid., 466. ^Documents Relating to Colonial Hist, of N. Y., V, 30. 
 
American Coastwise Trade Before lySg. 167 
 
 duty had been paid.^ In a letter to the Commissioners of Customs in 
 1692 Randolph inclosed a forged certificate given by a Boston mer- 
 chant, who he asserted had carried away 1,644 hogsheads of tobacco 
 in three years.'' 
 
 However, it is apparent that the act of 1673 had a restrictive effect 
 on the coastwise trade. Governor Dongan of New York reported in 
 1687 that the law prevented New York from becoming a collecting port 
 for the tobacco of Delaware.^ And even the New England m"er- 
 chants are said to have paid the export duties on tobacco carried from 
 Virginia to Boston and then to have shipped the tobacco to England, 
 where import duties were paid.* There is Httle doubt that but for 
 the Acts of Trade, Boston, New York, and Philadelphia would- have 
 competed actively for the trade of Virginia, and if so the coastwise 
 commerce between the northern and southern colonies would have 
 attained a much greater magnitude. The largest part of the colonial 
 shipping belonged to merchants who preferred to carry the commodi- 
 ties which they themselves bought and sold. The carriage of tobacco 
 and rice directly from the southern colonies to England apparently did 
 not appeal to them as a profitable business and the field was left to the 
 shipping of England. It seems also that the shipping owned in New 
 England did not engage largely in the transportation of sugar from the 
 West Indies to Europe, for when a law was passed in 1739 permitting 
 the exportation of sugar directly to points south of Cape Finisterre, 
 but limiting the carriage to vessels built and owned in Great Britain, 
 there was no protest, except 'from the British carriers who owned 
 colonial-built ships. In 1742 the privilege of entering the trade was 
 accorded to them, but the New England ship-owner never received the 
 same concession. In the same manner only the ship-owner residing in 
 Great Britain was permitted by the act of 1730 to carry rice from Caro- 
 lina directly to points south of Cape Finisterre, and the New England 
 merchants and carriers never protested. 
 
 CHARACTER AND VOLUME OF INTERCOLONIAL COASTWISE TRADE. 
 
 While there is no source of information from which one may derive 
 an accurate statement of the development of the coastwise trade during 
 the eighteenth century, there is abundant evidence that indicates 
 the general character of the trade and shows its relative importance. 
 Next to the West Indian trade, the coastwise trade of the northern 
 colonies was unquestionably the most valuable btanch^of commerce 
 c^ried on by American merchants and shippers, though neither the 
 West Indian trade of the colonies as a whole nor the coastwise trade 
 ever attained during the colonial period the value of the total direct 
 
 ^Calendar of Slate Papers, America and West Indies, 1677-1680, p. 372. 
 'Ibid., America and West Indies, 1689-92, p. 659. 
 'Documents Relating to Colonial Hist, of N. Y., Ill, 393. 
 *Peter Force, Tracts, IV, No. 11, 8. 
 
1 68 History of Domestic and Foreign Commerce. 
 
 commerce between the colonies and Europe. Among the northern 
 colonies, New Hampshire, Connecticut, New Jersey, and Delaware had 
 comparatively little shipping engaged in the transatlantic or the West 
 Indian trade, and their people sold their surplus produce at the impor- 
 tant seaports of the neighboring colonies and bought at those cities the 
 salt, clothing, sugar, tea, spices, wines, and manufactured goods whick 
 had been brought in from Europe and the West Indies. In 1725 the 
 little colony of New Hampshire reported that its trade with Boston 
 had a value of £5,000 a year.^ In 1730 the General Assembly of 
 Connecticut reported to the Board of Trade : 
 
 "The trade of the Colony is but small. Horses and lumber are exported 
 from hence to the West Indies, for which we receive in exchange, sugar, salt, 
 molasses and rum. What provisions we can spare, and some quantity of tar 
 and turpentine, are sent to Boston and New York, and Rhode Island, for 
 which we receive European goods." 
 
 Forty-two vessels, the largest of which was of a burden of 60 tons, 
 belonged to the people of the colony. There was no trade with 
 Europe " excepting only a few voyages to Ireland with timber and some 
 few, one or two, that have of late been built here made their voyage to 
 Bristol, there sold ship and cargo and brought their returns hither." 
 All kinds of British manufactures, such as "woolen cloath, silks, 
 glass, nails, scythes, pewter, brass and fire-arms" were imported, but 
 they were nearly all purchased from the merchants of Boston.^ 
 
 In the report of the Board of Trade on the state of the plantations in 
 1 72 1, New Jersey was said to have no ships but coasting vessels, in 
 which the colonists sent their produce, chiefly grain and cattle, to New 
 York and Philadelphia, to be exchanged for English manufactures.^ 
 Regular packet service was estabhshed between all the more important 
 northern ports, and both travel and trade among these cities grew 
 constantly in volume. During the three years from June 24, 1714, to 
 June 24, 171 7, the vessels clearing from Boston to other ports on the 
 continent numbered 390, with a tonnage of 11,589.* This was equal 
 to the tonnage cleared for Great Britain and about one-third of the 
 tonnage cleared for the West Indies. During the three years from 
 1715 to 1718 the clearances from New York for other continental 
 colonies amounted to 4,234 tons.* Cadwallader Colden wrote from 
 New York in 1723 that "several of our neighbors upon the continent 
 can not well subsist without our assistance as to Provisions for we 
 yearly sent Wheat & Flower to Boston and Road Island as well as 
 to South Carolina, tho [not] in any great quantity."^ In one weekMn 
 May 1741, Boston received 6,650 bushels of corn, 200 bushels of peas, 
 180 bushels of beans, 534 barrels of flour, 291 barrels of beef, 278 
 
 'Weeden, Economic and Social History of New England, II, 589. 
 'Public Records of Colony of Ccmneclicut, VII, 583. 
 ^Documents Relating to Colonial Hist, of N. Y., V, 603. 
 'Ibid.. 618. 'Ibid., 686. 
 
American Coastwise Trade Before i^Sg. 169 
 
 barrels of pork, and 79 barrels of rice.^ Governor George Clinton 
 wrote to the Board of Trade and Plantations in 1749 that New York 
 received from the northern and southern portions of the continent 
 "Fish, Oil, Blubber, Whale Fins, Turpentine Oil, Seal Skins, Hops, 
 Cyder, Flax, Bricks, Cole, Lamp Black, certain Wrought Iron, Tin and 
 Brasiery, Joinery, various Carriages and Chairs," while to the EngHsh 
 districts north and south New York sent "Provisions, Chocolate, 
 Lumber, European and India Goods with those enumerated in the 
 Plantation Trade Acts and such other Imported here for conveyance 
 home regularly."^ / After 1730 New York refined sugar for sale to the 
 other colonies.* Boston was the center of a large domestic trade in 
 beef, butter, timber, fish, and rum, while New York and Philadelphia 
 were centers for the collection and distribution of flour and grain. 
 Boston would unquestionably have been the center of a considerable 
 coastwise trade in domestic woolens, had it not been for the repressive 
 policy of England. The hat-making industry of the northern colonies 
 was also restricted, and as a consequence there was little trade in colo- 
 nial manufactures, if one excepts breadstufFs, lumber, and rum. 
 
 The trade between the northern and southern colonies gradually 
 expanded. With the increase of population there was a growing inter- 
 change of products, the tobacco, rice, and naval stores of the South 
 being traded for rum, flour, fish, beef, pork, and European manufac- 
 tured goods. In the report of the Board of Trade* above referred to 
 several statements were made indicating the nature of the state of the 
 trade between theNorth and South during the early eighteenth century. 
 Maryland sent tobacco, beef, pork, and grain to the other colonies and 
 received, in return, rum and sugar. Virginia likewise sold tobacco and 
 provisions to the other plantations. North Carolina had but little 
 commerce, and that was carried on by the sloops of New England, 
 which brought clothing and ironware to exchange for pork, corn, pitch, 
 and tar, the two articles last mentioned being carried first to New Eng- 
 land and then to Great Britain. Few of the southern colonies pos- 
 sessed any shipping to speak of, the planters depending upon the mer- 
 chants and carriers of Great Britain and New England. 
 
 During the early part of the eighteenth century an interesting coast- 
 wise commerce began between New England and the southern colonies, 
 which, asWeeden says, "sheds light both upon the general development 
 of coasting trade and upon the peculiar tendency of early New England 
 enterprise to join capital and labor."^ During the winter, when there 
 was little fishing carried on, the owners of small fishing-sloops would 
 load their craft with salt, rum, sugar, molasses, iron and wooden ware, 
 hats, caps, cloth, handkerchiefs, and stockings, which they carried to 
 
 'Weeden, Economic and Social History of New England, II, 591. 
 
 ^Documents Relating to Colonial Hist, of N. Y., VI, Sll. Hbid. 
 
 *Ibid., V, 591. 'Weeden, Economic and Social History of New England, II, 590. 
 
lyo History of Domestic and Foreign Commerce. 
 
 the southern colonies and peddled from place to place, returning early in 
 the spring with a valuable lot of pitch and tar and supplies of corn and 
 pickled pork. These trading expeditions of the fishermen were private 
 ventures entirely, which offered a good opportunity to secure a profit 
 even during the winter season from the investment in fishing craft. 
 
 Thus, while the most important portion of the commerce of the 
 southern plantations was with Great Britain, the trade with the colo- 
 nies of the north formed a regular feature of their economic life. Part 
 of this trade was carried on in connection with the West India trade of 
 the northern colonies, vessels stopping on the voyage each way, once 
 to exchange rum and imported merchandise for staves, headings, and 
 provisions for the sugar islands, and again to leave sugar, molasses, 
 rum, and negroes. Occasionally slaves were sent from Newport and 
 other northern cities to the southern plantations, but for the most part 
 the slaves came either directly from Africa or from the West Indies. 
 Goods which had been smuggled into New England from Europe were 
 sold regularly in the South, though probably not in large quantities, 
 and manufactures of all kinds from England were also distributed 
 among the southern ports by the northern merchants. Peter Faneuil 
 and Thomas Amory, Boston merchants, traded regularly with the 
 southern colonies, and the merchants of New York and Philadelphia 
 also bought and sold there. The volume pubHshed in 191 4 by the 
 ■ Massachusetts Historical Society, containing a portion of the corre- 
 spondence of several Newport merchants during the eighteenth cen- 
 tury, throws some interesting light on the coastwise trade. The New- 
 port traders had dealings with merchants at practically every port of 
 any importance along the entire coast, selling rum, clothing, manu- 
 factures, and slaves, and buying provisions, rice, tobacco, and other 
 native products.^ That they met with competition is indicated by a 
 letter from Charleston, South Carolina, in 1770, saying that the market 
 there had been supplied with sugar from New York and Philadelphia.^ 
 That the Acts of Trade were not enforced with complete effective- 
 ness is indicated by the sailing orders given a Captain Hammond in 
 1770 to take a cargo of rice, sugar, and ginger to Gothenburg or to 
 Hamburg and lay out the proceeds in Bohea tea and other articles, 
 which were to be consigned to one of the French Islands in the West 
 Indies, but carried to Rhode Island and secretly unloaded.^ 
 
 The volume of the coastwise trade of the colonies on the eve of the 
 Revolution is indicated in table 9, showing the entrances and clear- 
 ances at the ports of the northern and southern colonies in 1769. The 
 statistics of the tonnage of entrances and clearances of the several 
 individual colonies are given in table 5, on page 92. 
 
 TAe Commerce of Rhode Island, I (Mass. Hist. Soc. Collections, 7th series, IX, 1914). 
 ^Ibid., 325. 'Ibid., 332. 
 
American Coastwise Trade Before 1789. 
 
 171 
 
 Table 9. — Gross registered tonnage of the vessels entered and cleared at the ports of the northern and 
 
 southern colonies in 1769. 
 
 ENTERED. 
 
 
 From Great 
 
 Britain and 
 
 Ireland. 
 
 Southern 
 
 ports of 
 
 Europe and 
 
 Africa. 
 
 Brllish and 
 
 foreign 
 
 West 
 
 Indies. 
 
 Continent 
 of America, 
 Bahamas, 
 Newfound- 
 land, etc. 
 
 Total. 
 
 Total for northern colonies .' , 
 Total for southern colonies . .^ 
 
 Total for all colonies. . 
 
 30,353 
 60,357 
 
 20,906 
 13,245 
 
 60,888 
 34,028 
 
 78,198 
 3^,171 
 
 190,345 
 141,801 
 
 90,710 
 
 34,151 
 
 94,916 
 
 112,369 
 
 332,146 
 
 CLEARED. 
 
 Total for northern colonies . . 
 Total for southern colonies . . 
 
 Total for all colonies. . 
 
 Total entrances and 
 clearances 
 
 31,675 
 67,446 
 
 21,888 
 20,713 
 
 63,651 
 32,731 
 
 72,875 
 28,323 
 
 190,089 
 149,213 
 
 99,121 
 
 42*601 
 
 96,382 
 
 101,198 
 
 339,302 
 
 189,831 
 
 76,752 
 
 191,298 
 
 213,567 
 
 671,448 
 
 The statistics in the fourth column of this table indicate fairly well 
 the volume of the coastwise trade. Part of the entrances and clear- 
 ances here indicated were for the trade with Newfoundland, Canada, 
 Nova Scotia, Florida, Bermuda, and the Bahamas, and in order to con- 
 sider only the trade among the thirteen colonies it would be necessary 
 to make some subtraction, though at the most the deduction would 
 not amount to more than 25,000 tons.^ Even with this deduction the 
 coastwise trade of the thirteen colonies would, from the standpoint of 
 tonnage of shipping engaged, rank among the leading branches of 
 colonial commerce. It may be safely assumed, however, that its value 
 was less than that of the trade with Great Britain or of the West Indian 
 trade. The most important feature which the table brings out is the 
 difference in the character of the commerce of the northern and south- 
 ern colonies. In the North the coastwise business took high rank in all 
 the colonies, employing in Rhode Island and Connecticut practically 
 
 •The entrances and clearances of Canada, Nova Scotia, Newfoundland, and Florida, for ports, 
 of the continent of America, in 1769, were as follows (Raynal, Histoire Philosophique, IX, No. 3) : 
 
 Table 10. — Tonnage of entrances and clearances, continent of North America, 1769. 
 
 
 Canada. 
 
 Nova 
 Scotia. 
 
 New- 
 foundland 
 
 East 
 Florida. 
 
 West 
 Florida. 
 
 Total. • 
 
 • 
 
 
 2,246 
 
 2,752 
 
 4,495 
 5,489 
 
 3,087 
 923 
 
 1,097 
 1,688 
 
 375 
 612 
 
 11,300 
 11,064 
 
 
 
 Lord Sheffield, in his Observations on Commerce, gives a table showing the entrances and clear- 
 ances for all the English colonies in America in 1770. The total for tlje continental colonies was 
 larger than for 1769, but the relative proportions were about the same. 
 
172 History of Domestic and Foreign Commerce. 
 
 one-half of the tonnage entered and cleared, and more than one-third 
 of the tonnage of the entrances and clearances of Massachusetts, the 
 leading commercial colony. Among the southern colonies the coast- 
 wise business held a much less important position. Direct trade with 
 Great Britain, as shown in table 9, employed almost one-half of the 
 tonnage of the entrances and clearances of southern ports, and the 
 coastwise trade was represented by little more than one-fifth. 
 
 Like all the other branches of trade carried on in colonial vessels, 
 the coastwise commerce was almost utterly destroyed during the 
 Revolution. American ships which were not employed as privateers 
 were compelled for the most part to lie rotting at the wharves until 
 the war was ended, and though a small amount of trade was carried on 
 among the colonies, the business was dangerous and therefore small and 
 irregular. It was during these years that the need for home manufac- 
 tures and better means of inland transportation were effectually demon- 
 strated. It is of interest to note that almost as soon as the war ended, 
 steps were taken to improve the inland navigation of Virginia and other 
 States, in order that a sheltered waterway might be provided for at 
 least a part of the distance along the Atlantic coast. 
 
 INTERSTATE TRADE AFTER THE REVOLUTION. PROVISIONS OF THE CONSTITUTION. 
 
 At the close of the war the coastwise trade was at once resumed. 
 It was, in fact, the only branch of the old colonial trade of the American 
 merchants and carriers which it was possible freely to take up again, 
 the trade to the West Indies being forbidden by the Navigation Laws 
 of Great Britain and the commerce with southern Europe ruined by the 
 withdrawal of British protection against pirates. Direct trade with 
 Great Britain immediately resumed its former volume, but, as before, it 
 was carried on chiefly in British ships. For a time the coastwise trade 
 prospered, but before Ipng, in common with the other branches of 
 trade, it experienced a severe depression. Credit everywhere was 
 impaired, there was little money, and the various States, jealous and 
 fearful of the commercial prosperity of one another, began to erect 
 barriers that crippled the commerce of all. New York attempted to 
 break up the trade of Connecticut and New Jersey by imposing heavy 
 fees on every vessel entering from those States. Delaware and New 
 Jersey tried to attract to their ports the foreign trade of Pennsylvania 
 and New York by a system of legislation offering lower import duties 
 and more favorable trade regulations. When Massachusetts and 
 Rhode Island placed almost prohibitive duties on imports carried in 
 British ships, Connecticut admitted such imports free, hoping to obtain 
 a monopoly of domestic trade in British products. Several of the 
 States imposed heavy duties on goods from all other States with the 
 two-fold object of encouraging domestic production and of conserving 
 the supply of coin. It was due primarily to the extreme need of a 
 
American Coastwise Trade Before i^Sg. 173 
 
 system of uniform regulation of interstate and foreign trade that the 
 Annapolis convention was held in 1786, the convention which called 
 the meeting of the body that framed the Federal Constitution at 
 Philadelphia in 1787. 
 
 The disputes among the makers of the Constitution over what power 
 of commercial regulation should be given to Congress were exceedingly 
 bitter, and in no other phase of the work of the convention did the 
 opposing economic interests of the sections of the country stand out 
 more clearly. The northern navigating and trading States wanted 
 complete power placed in the hands of the Federal Government, but 
 the southern delegates feared that Congress might at some time, if 
 dominated by the commercial interests of the North, enact a navigation 
 law excluding foreign carriers. The result of such an act could only 
 be a tremendous increase in freight rates which would impoverish the 
 southern planter and enrich the northern carrier. Almost unani- 
 mously, therefore, the southern delegates insisted that a provision be 
 inserted in the Constitution by which Congress would be prohibited 
 from enacting a navigation law unless by a two-thirds vote of both 
 houses. Furthermore, the South demanded that Congress be for- 
 bidden to levy export duties or prohibit the importation of slaves. 
 Out of these conflicting views a compromise was eventually reached. 
 Congress was given general power "to regulate commerce with foreign 
 nations, and among the several States, and with the Indian tribes," and 
 empowered to levy import duties on the condition that they be uniform 
 throughout the United States. However, it was stipulated that "no 
 preference shall be given by any regulation of commerce or revenue to 
 the ports of one State over those of another; nor shall vessels bound to, 
 or from, one State, be obliged to enter, clear, or pay duties in another," 
 that "no tax or duty shall be laid on articles exported from any State," 
 and that "the migration or importation of such persons as any of the 
 States now existing shall think proper to admit, shall not be prohibited 
 by the Congress prior to the year 1808." Furthermore, it was agreed 
 that "no State shall, without the consent of the Congress, lay any 
 imposts or duties on imports or exports, except what may be absolutely 
 necessary for executing its inspection laws; and the net produce of all 
 duties and imposts, laid by any State on imports or exports, shall be 
 for the use of the Treasury of the United States; and all such laws 
 shall be subject to the revision and control of the Congress." "No 
 State shall, without the consent of Congress, lay any duty of tonnage 
 or . . . enter into any agreement or compact with another State, or 
 with a foreign power." 
 
 Before the new Constitution went into operation economic conditions 
 in the United States began to take a turn for the better. Washington 
 wrote to Jefferson in 1788: "The people have been ripened by mis- 
 fortune for the reception of a good government. They are emerging 
 
174 History of Domestic and Foreign Commerce. 
 
 from the gulf of dissipation and debt into which they had precipitated 
 themselves at the close of the war. Economy and industry are evi- 
 dently gaining ground. Not only agriculture, but even manufactures, 
 are much more attended to than formerly." Under the stimulating 
 influence of renewed industrial activity the trade among the States 
 quickly revived. Not only in the commodities of the colonial period 
 did trade expand, but in the products of the growing manufactures and 
 the imports from the newly opened East India markets a healthy 
 domesti^c commerce sprang up. However, at the time the new govern- 
 ment was launched, there was as yet no indication that the coastwise 
 trade would ever occupy a more important relative position than during 
 the colonial period, when it was exceeded in value both by the direct 
 trade with Europe and by the West Indian trade. Domestic trade of 
 great volume occurs only when there is a sectional diversity of products 
 for which there is a great intersectional demand. Diversity of produc- 
 tion of this kind did-not exist to a large extent during colonial days, 
 and even at the time of the adoption of the Constitution there was no 
 indication that conditions favorable to a large interregional domestic 
 commerce would soon arise. But two events, one occurring within a 
 little more than a year after Washington's inauguration and the other 
 four years after, foreshadowed a fundamental change in the economic 
 organization of the nation. The first was the building of a cotton-mill 
 by Samuel Slater at Pawtucket, Rhode Island, and the second was the 
 invention of the cotton-gin by Eli Whitney. Out of the change heralded 
 by these two events was to grow a domestic commerce, both coastwise 
 and internal, more valuable than the foreign or domestic trade of any 
 other nation of the world. 
 
CHAPTER XI. 
 
 THE ORGANIZATION OF AMERICAN COMMERCE IN THE 
 SEVENTEENTH AND EIGHTEENTH CENTURIES. 
 
 Place of the trading companies in early commerce, 175. The period of the mer- 
 chant carrier, 178. Reasons why merchants were their own carriers, 179. Size of 
 the Mayflower and other vessels, 181. Effects of British legislation upon colonial 
 trade, 182. Trade conditions following 1783, 184. Effect of the establishment of 
 the National Government, 184. Direct trade with the Far East, 185. Early 
 merchant princes, 185. Appearance of the common carrier on the sea, 186. 
 Charter traffic, 187. Attempts to establish line services between Europe and 
 America, 188. 
 
 The merchant and carrier, at all times, adapt their methods, as fully 
 as they can, to the work to be done; and trade management advances 
 with the progress of economic organization. The activities of foreign 
 merchants and ocean carriers are conditioned, first of all, by the status 
 of industry and inland transportation, by national monetary systems, 
 and by the extent to which domestic and international credit and 
 banking institutions have been developed. 
 
 Political conditions and ideals, also, affect both the scope of com- 
 merce and the methods followed in carrying on trade. The existence 
 or absence of an efficient central government will almost certainly aid 
 or hinder the growth and organization of both inland and over-sea 
 commerce; national ideals, such as found expression in the "mercan- 
 tile system" and are embodied in present-day tariff laws, modify com- 
 mercial evolution; while warfare and international recriminations have 
 frequently interrupted the peaceful progress of trade. 
 
 The purpose of this chapter is to state briefly how American maritime 
 commerce was carried on during the seventeenth and eighteenth 
 centuries, to describe how American commerce was developed by 
 British and colonial merchants under seventeenth and eighteenth 
 century conditions. The account must necessarily begin with a brief 
 reference to the trading companies by which the first colonies were 
 planted in America. 
 
 PLACE OF THE TRADING COMPANIES IN EARLY COMMERCE. 
 
 The chartered companies that estabHshed settlements at Jamestown, 
 Plymouth, New Amsterdam, and Boston were given the monopoly of 
 the commerce of the regions granted to them. These companies 
 expected to make money by reserving to themselves the exclusive 
 conduct of the commerce of the American plantations; but experience 
 soon showed that the companies, as such, were not effective trade 
 managers. Their monopoly of commerce proved to be of advantage 
 neither to the companies nor to the colonies. As the colonies grew, it 
 
 17s 
 
176 History of Domestic and Foreign Commerce. 
 
 became evident that the trade between America and Europe could 
 be carried on best by the merchants of England, the planters, traders, 
 and fishermen of America, and, in course of time, by the merchant- 
 traders of New England and the middle colonies. 
 
 The trade monopoly given the chartered companies was not only in 
 harmony with the general practice of the sixteenth and seventeenth 
 centuries, but was justified by the nature of the task which the com- 
 panies assumed when they undertook to plant and maintain colonies 
 in America. It was known that, even under the most favoring condi- 
 tions, the plantations in the New World could hardly be expected to 
 give rise immediately to a profitable commerce. Capital must be 
 invested by the adventurers without returns for a period of years. The 
 first division of profits, in the case of the Virginia and Plymouth 
 companies, was to be made at the end of seven years, and by the second 
 charter secured by the Virginia Company, in 1609, the distribution of 
 the accumulated earnings was to be made in 1616. During the early 
 years of experimental struggle to establish the American settlements, 
 the commerce with America was not so much the exchange of com- 
 modities as the contribution of food and supplies by the companies to 
 their plantations. The obligations assumed by the companies in 
 return for their trade monopoly and their political powers proved to 
 be much greater than the favors received; thus in a comparatively 
 short time the trading companies went out of existence. 
 
 The Virginia Company decided in 1619 to permit outsiders to trade 
 with its colony. Five years later, the King terminated the company's 
 charter by quo warranto proceedings and Virginia became a crown 
 colony. After that, the merchant traders of England and the planters 
 in Virginia (the latter acting through their "factors" in England) 
 slowly built up the large over-sea commerce of the colony. 
 
 In the case of Plymouth, the colonists, in 1627, made a financial 
 settlement with the "adventurers" who had advanced the funds to 
 start the colony. By this arrangement the colony secured control of 
 its commerce when, seven years after the settlement of the colony, the 
 time had come for the adventurers in England to make the first division 
 of profits. The Plymouth Colony, in 1627, formed itself into a com- 
 pany and bought out the rights which the adventurers resident in 
 England had in the property in New Plymouth, and the colony — i. e., 
 the company into which the colonists had formed themselves — decided 
 to give to their eight leading men exclusive trading privileges for six 
 years. These eight men, the "undertakers," accepted this trading 
 monopoly not for their own gains, but that the profits of trading might 
 be applied to the payment of the debt of £2,400 which the colony had 
 incurred in settling with the adventurers. 
 
 The commerce of New Netherland was strictly monopolized by the 
 Dutch West India Company from 1621 to 1638. Previously, in 1614, 
 
Early Organization of American Commerce. 177 
 
 the Amsterdam Company had been given the monopoly, for four years, 
 of the trade of the Dutch possessions in America. The trade of the 
 Amsterdam Company consisted of bartering with the Indians to secure 
 furs, and this was the characteristic of commerce until some years after 
 the Dutch West India Company had established permanent settle- 
 ments in New Netherland. When, in 1638, the West India Company 
 opened the trade of New Netherland to individual merchants resident 
 in the colony, it required them to ship their goods in the company's 
 vessels, and carefully regulated both the over-sea commerce and the 
 traffic with the Indians. The merchants had to pay a duty of 10 per 
 cent on imports and 15 per cent on exports. This was deemed neces- 
 sary for revenue purposes; while the careful regulation of the trade with 
 the Indians was imperative in order to prevent unscrupulous individuals 
 from selling firearms and rum to the red men. The safety of the 
 colony as well as the continuance of the fur trade depended upon this 
 regulation. 
 
 The commerce carried on at New Amsterdam consisted both of the 
 direct trade of the colony with Holland and of the indirect trade of 
 the merchants of Holland with the tobacco colonies of Virginia and 
 Maryland and with southern New England. The success of the Dutch 
 merchants in securing the export trade of the British colonies, even to 
 England, was such as to cause Parliament to pass the Navigation Acts 
 of 1650 and 165 1, requiring the use of English and colonial ships to 
 bring colonial goods to England; and the British Act of Trade of 1660 
 included tobacco, the chief basis of the Dutch trade with the English 
 colonies, among the enumerated articles that might be sold only in 
 the English realm. For thirty years before this Act of Trade became 
 a law there had been a continuous trade between Holland and the 
 tobacco colonies in America. Some of the Amsterdam merchants who 
 engaged in this commerce were Englishmen. The ships from Holland 
 sometimes made direct trips to and from the Chesapeake, although it 
 is probable that the traffic was more largely carried on via New 
 Amsterdam. 
 
 The Dutch had developed this trade during the Civil War in England 
 and it continued during the Protectorate in spite of Cromwell's vigorous 
 measures. The British Acts of Trade of 1660 and 1663 confined the 
 Dutch trade in America to New Netherland, and the conquest of that 
 colony by the English in 1664 practically shut Holland out of the com- 
 merce with continental America. The elimination of the West India 
 Company from New Netherland ended the monopolization of American 
 commerce by trading companies; henceforth in all the colonies com- 
 merce was developed by English and colonial merchants subject to 
 such restrictions as were contained in the British Acts of Trade and 
 in colonial laws for the regulation of commerce and shipping. 
 
 In the proprietary colony, Maryland, there was no restriction placed 
 upon trade. From the start it was open to individual traders; and 
 
178 History of Domestic and Foreign Commerce. 
 
 the early commerce of Maryland, as well as that of Virginia, after 1619, 
 was carried on by English and Dutch merchants. The Acts of Trade 
 prevented the Dutch merchants from engaging in the business and 
 restricted the market of the principal export commodity to England. 
 As the plantations grew larger, some planters sent their crops in their 
 own vessels to their factors in England; and the merchants of New 
 England, as they enlarged their coasting traffic, carried the products of 
 New England, and also some of the supplies imported from Europe, to 
 Virginia and Maryland to exchange for tobacco to be marketed in 
 England. 
 
 The Carolinas, Pennsylvania, and Georgia were settled some time 
 after the trading companies had made their unsuccessful attempts to 
 monopolize the commerce of the colonies they had planted. The early 
 commercial history of New Jersey was associated with that of New 
 Netherland and New York, while Delaware was, at the beginning, a 
 part of Pennsylvania. 
 
 THE PERIOD OF THE MERCHANT CARRIER- 
 
 The competitive organization of American commerce under the 
 management of individual merchant traders prevailed throughout 
 most of the seventeenth century and all of the eighteenth. American 
 trade during these two centuries was carried on mainly by merchants 
 who owned their own ships and were their own carriers. The trader 
 did not pay freight to another man or to a company that owned ships 
 and that acted as a common carrier. The ocean ship, like the ware- 
 house or the store, was a part of the equipment of the merchant. At 
 the present time the international trader and the ocean carrier are 
 distinct. The merchant usually neither owns nor operates ships. He 
 may charter one or more from time to time; but, for the most part, he 
 buys transportation either of those who operate lines of sail or steam 
 vessels or of those who own one or more vessels which may be chartered 
 for a particular service or for specified times. 
 
 The transportation services of maritime commerce may be performed 
 by one of three classes of persons: 
 
 (i) By the producer or manufacturer, who acts as his own merchant 
 and himself takes his wares to the over-sea market. To some extent 
 this was done by the tobacco planters of Virginia and the rum manu- 
 facturers and the fishermen of New England. The Standard Oil 
 Company is to-day a conspicuous instance of a producer that operates 
 ships. 
 
 (2) By the merchant or trader who owns and operates such vessels 
 as his business may require. This trader's main business may be that 
 of merchant with capital invested in one or more stores, warehouses, 
 and piers, as well as in ships; or the trader may be merely the owner or 
 master of one or several ships — the itinerant ocean trader who buys or 
 
Early Organization of American Commerce. 179 
 
 barters in whatever markets give promise of greatest profit. The 
 merchant trader, ashore or afloat, carried on most of the maritime com- 
 merce of America till after the opening of the nineteenth century. 
 
 (3) By common carriers, by those who operate vessels as lines or as 
 single units, and charge freight rates for their services. This is char- 
 acteristic of ocean transportation to-day. Only a few producers and 
 merchants operate ocean vessels, while both producers and traders 
 depend upon common carriers for the transportation services. To 
 make it possible for widely scattered shippers to secure ocean trans- 
 portation readily, freight forwarders and ship-brokers act as inter- 
 mediaries between shippers and carriers, while each company operating 
 a line of vessels maintains an agency or many agencies in order to 
 secure the traffic required to keep the ships profitably supplied with 
 freight. This organization of maritime commerce diflfers as greatly 
 from that prevaiHng in the eighteenth century as present international 
 exchanges are unlike the over-sea trade of colonial days. 
 
 The reasons why the maritime commerce of America was carried 
 on for nearly two centuries almost entirely by merchants and indi- 
 vidual traders, and why ocean transportation did not become an organ- 
 ized service performed by common carriers who were not merchants, 
 becomes evident if but a superficial survey be made of the manner 
 in which industry was conducted and of the conditions prevailing upon 
 the high seas. 
 
 Until some time after the opening of the nineteenth century, industry 
 was still in the stage of small-scale, individual production. The 
 era of large enterprises and big corporations had not arrived, and could 
 not be ushered in, at least in America, until capital had become more 
 abundant, until an economical system of inland transportation had 
 been provided, and until mechanical inventions had cheapened the 
 costs of production. The ocean carrier adapted to the industrial 
 conditions of the eighteenth century, to the irregular shipments of 
 small, dissociated, and scattered producers and merchants of that time, 
 was the small vessel owned by the producer or merchant. Such a 
 craft could wait upoii traffic or be readily built when required, and, 
 when loaded, could be sent anjrwhere in search of the market where its 
 cargo might be most profitably sold or be bartered for other goods. 
 
 The commerce of the seventeenth and eighteenth centuries was 
 largely barter, the direct exchange of goods for goods. With few excep- 
 tions, the producer or merchant did not and could not sell his goods 
 until they reached the over-sea market. There were no telegraphic 
 and cable connections with distant markets; there was no way as at 
 present of selling goods in advance of shipment, to be delivered at a 
 specified future date. Even the mails were of little, if any, aid to the 
 producer or merchant. There was no regular mail service between 
 Europe and America, and the only means of getting letters across the 
 
i8o History of Domestic and Foreign Commerce. 
 
 ocean was to intrust them to the obHging captain of the next vessel to 
 sail to the part of the world to which the letters were destined. The 
 brig or ship might not sail for some days or weeks, the voyage might 
 take six weeks or three months, and the letters could not be delivered 
 promptly upon the arrival of the vessel at destination, unless the person 
 to whom the mail was addressed Hved in the vessel's port town or city. 
 Ordinarily, a trader would be fortunate, if he got a reply from across the 
 sea within six months after he wrote a letter of inquiry. 
 
 Being thus completely disconnected from his distant market, the 
 merchant had to take or send his goods in his ship to the buyer. What 
 the cargo brought, in coin or goods, after it had reached the end of the 
 slow and uncertain ocean passage, depended upon the market condi- 
 tions prevaihng at that time; and the value of goods at any place, even 
 at the largest commercial centers, was determined by the local trade 
 situation. The electrically unified world-market of to-day did not exist. 
 
 Not all trade was barter of goods for goods. In the Spanish, French, 
 and Portuguese markets of the West Indies and of Southern Europe, 
 goods from America were paid for partly in coin; and in the West 
 Indies, more especially in the British islands, bills of exchange on 
 London were obtained by American merchants; but without a regular 
 ocean mail service, without steamships and cables, international bank- 
 ing could make little headway and could do little to aid in the organi- 
 zation of international trade. 
 
 It was, however, the dangers to which commerce on the high seas 
 was subject in the seventeenth and eighteenth centuries and until the 
 close of the Napoleonic wars that more than anything else made 
 impossible the handling of international trade in large units and the 
 systematic organization of the service of the common carrier distinct 
 from the mercantile business. In the seventeenth century and during 
 the early decades of the eighteenth, piracy was so universal as to cause 
 the black flag to be a familiar sight on the ocean and even in the ports of 
 the southern colonies as far north as the Chesapeake. As the eighteenth 
 century advanced, the pirates were quite generally driven from the 
 seas, but were tolerated in the Mediterranean even into the nineteenth 
 century. 
 
 On the whole, privateering was more destructive to commerce than 
 was piracy. Five long wars added dangers to American commerce 
 during the eighteenth century — ^the wars of the Spanish and Austrian 
 Successions, the Seven Years' War, the American Revolution, and the 
 earlier years of the long conflict started by the French Revolution. 
 For more than 30 years during that century the merchants engaged in 
 American trade had to take the risk of their goods and ships being 
 captured by warships or privateers. 
 
 Under conditions of such frequent warfare there could ordinarily be 
 00 regular and advertised sailings of vessels over established ocean 
 
Early Organization of American Commerce. i8l 
 
 routes. The ocean "line" and, indeed, the ocean carrier, publicly- 
 seeking traffic were impossible. The merchant loaded his goods into a 
 small and preferably swift sailing vessel and quietly dispatched the 
 ship in charge of a hardy captain and crew who recked little of danger, 
 though they carefully avoided risk of capture by pirates or other foes. 
 Like the Merchant of Venice, the merchant trader of the eighteenth 
 century might well say: 
 
 . . . "I thank my fortune for it, 
 My ventures are not in one bottom trusted, 
 Nor to one place; nor is my whole estate 
 Upon the fortune of this present year." 
 
 That the ocean commerce of the first two centuries of American 
 history was composed of small shipments, i. e., was handled in small 
 units, is clearly shown by the size of the vessels employed. The char- 
 acter and volume of trade, of course, determined the size of the carrier 
 used for ocean transportation. 
 
 The Mayflower was a typical deep-sea vessel of the early part of the 
 seventeenth century. It was a three-masted, double-decked ship 
 barely loo feet long and between 20 and 25 feet wide. Governor 
 Bradford states in his diary that it was "of burden about 9 score," 
 180 tons, which would be the equivalent of about 120 tons gross register. 
 There were 102 Pilgrims and the ship's crew on the Mayflower. The 
 Speedwell, which started across with the Mayflower, was "of some 
 60 tuns," or one-third the size of the Mayflower. The Speedwell proved 
 unseaworthy and had to be left in England, not because she was.small, 
 but because she was leaking (or the captain may have been treacherous). 
 Bradford says that "after she was sould & put into her_.ol5 trime, she 
 made many viages & performed her service very sufficiently, to ye great 
 profite of her owners."^ 
 
 At the close of the eighteenth century, the large vessels operated in 
 the transatlantic trade were the three-masted ships and barks of 200 
 tons gross register, but they were above the average. Brigs (two- 
 masted, square-rigged vessels) were more numerous than the full- 
 rigged ships were in the over-sea trade. The ordinary brig would be 
 of 100 to 1 50 tons burden. Smaller vessels than this — snows, schooners, 
 and even sloops — were used to carry freight across the Atlantic. 
 
 During the three years ending with 1789 the vessels clearing from 
 England for America averaged 190 tons, gross register, each; those 
 entering England from America were of i jG tons average. The English 
 writer, Richard Champion, in his book Considerations of the Present 
 Situation of Great Britain and the United States of America, published 
 in 1784, placed the number of ships engaged in the American-European 
 trade at 1,220, with a total gross register of 195,000. This would make 
 
 'Davis (ed.), Bradford's Hist, of Plymouth Plantation, 85. 
 
1 82 History of Domestic and Foreign Comfnerce. 
 
 the average tonnage of each vessel 160 tons. Champion's figures as 
 to the number and tonnage of vessels engaged in the West Indian and 
 coasting trade of the American States in 1784 show an average of 
 68 tons register per vessel. These figures indicate the size of vessels 
 employed in ocean commerce near the end of the eighteenth century. 
 For the smaller trade of the previous century yet smaller vessels were 
 constructed; the craft each man built or bought at any given time 
 presumably would be such as his business required. Neither com- 
 mercial organization nor the shipping employed in commerce under- 
 went any radical change during the eighteenth century. 
 
 EFFECTS OF BRITISH LEGISLATION UPON COLONIAL TRADE. 
 
 After the middle of the seventeenth century, the trade of the colonies 
 had to be carried on subject to the commercial legislation of England 
 and the regulations and laws adopted by the colonial governments. 
 The effects of British and colonial legislation upon trade may be 
 briefly stated. 
 
 The general purposes of the British Navigation and Trade Acts 
 were: (i) to require the trade between the mother country and the 
 colonies to be handled in ships owned and built in England or the 
 colonies; and (2) to give, as far as practicable, the merchants in 
 England a monopoly of the trade of the colonies. 
 
 The Navigation Acts, which excluded the Dutch and other foreign 
 ships from the trade of the colonies with each other and with England, 
 aided both the ship-builder and the merchant in the colonies. The 
 fishermen and traders of New England, the merchants of the middle 
 colonies, and to some extent the planters in the South were encouriaged 
 by the British Navigation Acts to build or buy vessels with which 
 to market their goods. Had the colonial commerce been open to the 
 ships and traders of all nations, the maritime trade of the colonies 
 would hardly have been handled to the extent that it was by colonial 
 ship-owning merchants. 
 
 In the fisheries, the intercolonial trade, and the commerce with the 
 West Indies, American-built vessels were used and the colonial mer- 
 chants were supreme. In the commerce with Africa, Spain, and Portu- 
 gal, the colonial traders and ships had the advantage; but in the 
 commerce with the mother country the English merchants had the 
 main share of the business throughout the colonial period. They had 
 the capital with which to develop the trade, British legislation favored 
 them, and they were located in the country where the colonies, as a 
 whole, sold the major share of their exports and from which the colonists 
 imported most of their manufactures and other supplies. As the 
 eighteenth century advanced, an increasing share of the ships used by 
 British merchants was built in America, and a growing portion of the 
 trade was handled by the colonists; but it was some time after the 
 
Early Organization of American Commerce. 183 
 
 close of the Revolution — the last decade of the eighteenth century — 
 before the control of the transatlantic trade of America passed to 
 the owners and operators of American ships. The Napoleonic wars 
 gave American merchants their opportunity, and the establishment 
 of our National Government under the Constitution made it possible for 
 the people of the United States to take advantage of that opportunity. 
 
 The British Acts of Trade were a handicap to the colonial merchants 
 in so far as those laws prevented or burdened direct trading of the 
 colonies with non-British countries in the articles "enumerated" in the 
 laws of 1660 and later years. It was the aim of the English merchants — 
 and they were supported by the British Parliament — to handle all of 
 the over-sea trade of the colonies, with such exceptions as the English 
 merchants and government chose to make. The merchants of England 
 had their factors to represent them in the colonies; foreign traders were 
 not allowed to have factors in the British colonies; and it was not 
 expected that the colonists should become merchants. They were to 
 remain fishermen, farmers, planters, and producers of foods and such 
 materials as England required. The enforcement of this policy proved 
 impracticable. Through most of the century following 1660, the Acts 
 of Trade were but intermittently and partially enforced. The colonists 
 took the leading part in organizing and developing their trade. Their 
 commercial as well as their political development was in the main 
 autonomous. 
 
 England's import duties on grain and fish and her prohibition of the 
 importation of salted provisions caused the New England and middle 
 colonies to give extra efforts to the development of their trade with 
 the West Indies by means of which they secured coin, bills of exchange, 
 and commodities to send to England for the purchase of manufactures 
 and other necessary supplies; thus, the "corn laws" and other tariffs 
 of the mother country caused the colonies to engage more largely than 
 would otherwise have been necessary in indirect or three-cornered 
 trading. England's policy of protecting her fishermen and her land- 
 owning class, in so far as it hastened the growth of the West Indian 
 trade of the colonies, tended to build up a trade carried on by colonial 
 merchants without competition from those in England and had the 
 effect of making the organization of American commerce increasingly 
 autonomous, or independent of that of England. When Grenville 
 came to try to tax colonial commerce, he was surprised to find that the 
 colonists felt that their commerce was peculiarly their own, something 
 they themselves had built up in their own way, something which they 
 alone ought to tax. 
 
 The laws of some colonies made the import duties or the export 
 duties, or both, lighter in the case of trade carried on directly with an 
 over-sea country than in the case of commerce handled indirectly via 
 the port of some other colony or country. Likewise, some colonies 
 
■ 184 History of Domestic and Foreign Commerce. 
 
 favored domestic^ships both by granting their ca^-goesa reduction in 
 import or export duties and by imposing Hghter tonnage taxes on ves- 
 sels owned within the taxing colony than on ships belonging to non- 
 residents. Each colony that had such laws was trying to assist in 
 building up a trade carried on by its own merchants, in their own 
 ships, and directly with distant markets. The colony was applying 
 to the organization and conduct of its trade the principles of the 
 mercantile system, in so far as the Acts of Trade of the mother country, 
 which were based on the same principle, permitted this to be done by 
 thfi colpny. The colonies derived their commercial theories and prac- 
 tices from England. 
 
 By the Revolution, which ended in 1783, the colonies achieved polit- 
 ical, but not commercial, independence. Their transatlantic trade 
 continued /o be mainly^with Great Britain and not with the continent 
 of Europe; and the Englfish merchants, after as before the war, carried 
 on the larger share of the commerce between Europe and America. 
 It was the British traders who had the stock of goods for supplying the 
 American market reopened in 1783 at the close of the long war; and, 
 of course, the imports from England came to the United States in 
 British ships. Moreover, these and other British ships could alone 
 be used by such American merchants as traded in the British West 
 Indies after the Treaty of Paris was signed. When the United States 
 became to Great Britain a foreign nation, the British navigation laws 
 excluded American ships from the trade of the English colonies; and 
 although trade between the United States and the British West Indies 
 did not thereby cease, its growth was hampered and American mer- 
 chants were handicapped in their competition with those of England, 
 especially until the great war between Great Britain and France made 
 it necessary for the London government temporarily to tolerate the 
 use of American ships in the trade of the British islands. 
 
 During 1785 and 1786 there was trade depression in the United 
 States. Business revived during the ensuing three years, but the 
 decentralization of political authority among the States, the absence 
 of a national monetary system, the inchoate international relations, the 
 insufficient supply of capital, and the severity of the competition with 
 the British merchants so hampered the mercantile, the shipping, and 
 the industrial interests as to convince the leaders of America that 
 political integration must precede the satisfactory organization and 
 expansion of American commerce. 
 
 American commerce upon an enlarged scale was made possible by the 
 establishment of the National Government and its wise administration 
 under Washington. The constructive work of Alexander Hamilton 
 in emphasizing the necessity of drafting a Constitution that gave the 
 central government effective powers, in persuading the States to adopt 
 the Constitution, and in building solidly the foundations of the fiscal, 
 
Enrly Organization of American Commerce. 185 
 
 financial, and credit institutions of the new nation give him an undis- 
 puted place among the greatest of American statesmen. He it was 
 who made it possible for American merchants so to organize and expand 
 American trade during the first two decades of our national life aS to 
 enable the United States, in spite of damages done, during the ten years 
 ending in 181 5, by French reprisals, British impressment, the unwise 
 embargo and non-intercourse acts, and the three years' war with 
 Great Britain, to gain and hold, during the first half of the nineteenth 
 century, a position in the trade of the world second only to that occu- 
 pied by the United Kingdom. 
 
 DIRECT TRADE WITH THE FAR EAST. 
 
 There was one important advance made by American merchants 
 during the critical years intervening between the end of the Revolution 
 and the beginning of the National Government under the Constitution. 
 The East India Company had long held the exclusive right to trade 
 in the British East Indies; and, having this monopoly, the comjjany had 
 little incentive to push the commerce either of the British Indies or of 
 other eastern countries. The Americans saw their oppoirtunity to 
 trade directly with India and China instead of buying East Indian 
 and Oriental products and wares in London after the commodities had 
 been brought there by the East India Company. In 1784, New York 
 merchants dispatched the Empress of China to Canton; the following 
 year Elias Hasket Derby, of Salem, sent his Grand Turk out to Mauri- 
 tius, India, and China; and soon Boston and Philadelphia merchants, 
 as well as those of New York and Salem, were carrying on a direct 
 trade with the countries about and beyond the Indian Ocean. The 
 cottons, silks, and teas of India, the teas, silks, and porcelain of China, 
 the spices of the East India Islands, and the many other articles from 
 the East were generally sold in America with large profit to the import- 
 ers, and this trade helped to build up the fortunes of the first merchant 
 princes of America. 
 
 Salem, under the leadership of Derby, was very active in pushing 
 the long-distance trade with regions beyond the Cape of Good Hope. 
 It is stated by Marvin^ that "of the fifteen American ships at Canton 
 in 1789, five hailed from Salem, and in 1790 there came into port con- 
 signed to Mr. Derby 728,000 pounds of China tea." This trade of 
 Salem with the East grew for several decades. At the opening of the 
 war of 1812, that port had 126 vessels in its deep-sea fleet, and of that 
 number 58 were Indiamen. 
 
 During the last two decades of the eighteenth century and the first 
 dozen years of the nineteenth, one characteristic of the organization 
 and conduct of American commerce was the prominent place occupied 
 
 Tfte American Merchant Marine, 198; Marvin's information was gotten from the Historical 
 Sketch of Salem, by Osgood and Batchelder. 
 
1 86 History of Domestic and Foreign Commerce. 
 
 by the large traders typified by such merchant princes as Elias Hasket 
 Derby, of Salem, and Stephen Girard, of Philadelphia. The activities 
 of such traders as these show that industry had sO developed in the 
 United States by the end of the eighteenth century, and capital had so 
 accumulated, as to permit commerce to be organized upon a relatively 
 large scale. It was still handled in small units; but it was widely 
 distributed among the countries of the world; and was carried on, not 
 Dnly by small producers and traders, but also by large merchants, each 
 operating a fleet of vessels and each having more than a local mercantile 
 business. 
 
 When Derby died in 1799, he left an estate of a million dollars or 
 more, a large fortune for that day. At one time he owned about 40 
 vessels, with which he traded in the Baltic, the Mediterranean, the West 
 Indies, India, the East Indies, China, and the Philippines. 
 
 Stephen Girard was first a merchant trader, then a banker. He 
 prospered in both lines of business, lived until 183 1, and left an estate 
 of $9,000,000. His mercantile activities were carried on mainly 
 between 1780 and 18 12. He gave most attention to the West Indian 
 trade, but his vessels were also sent to Europe and the East Indies and 
 China. The captains in charge of his vessels were encouraged to act as 
 roving merchants. This method of carrying on commerce was, of 
 course, practiced by the owners and masters of other ships than those 
 in Girard's fleet; but Girard may be said to have been especially suc- 
 cessful in multiple trading. "His vessel went to the West Indies, 
 where cargo was exchanged for coffee and sugar; then proceeding to 
 Hamburg or Amsterdam, the coffee would be sold for Spanish dollars 
 or exchanged for cargo which would secure him at the Spice Islands, 
 Calcutta, or Canton the products of those climes."^ 
 
 APPEARANCE OF THE COMMON CARRIER ON THE SEA. 
 
 It was almost two centuries from the termination of commercial 
 monopolies possessed by the trading companies that planted the first 
 colonies in America to the establishment of the Black Ball Line in 18 16, 
 the first organized common carrier engaged permanently in the over-sea 
 commerce of the United States. During these two centuries the trader, 
 whether he was a producer or a merchant, was his own carrier. The 
 shipping and mercantile interests were identical, except in so far as 
 the fishermen, lumbermen, and planters sent their commodities to 
 market in their own ships. The merchant trader, by his individual 
 organization and conduct of commerce, built up a large and widely 
 distributed market for American products; and, as the volume of 
 exchanges increased, the most successful traders became the wealthiest 
 men of their time, the merchant princes of the beginning of the nine- 
 teenth century. 
 
 'J- R. Smith, The Ocean Carrier, 92. (The quotation is from Henry Wairey's Girard College 
 
 ani its Founder, 16.) 
 
Early Organization of American Commerce. 187 
 
 Toward the end of the second decade of the nineteenth century, a 
 new method of carryiftg on American commerce began to be adopted. 
 It had become possible and profitable for common carriers who were 
 not merchants to perform the service of ocean transportation. When 
 the Napoleonic wars came to an end and the second war of the United 
 States with Great Britain was over, Vessels were safe on the high seas. 
 Piracy had been finally exterminated when the American navy brought 
 the Barbary States to terms; and now, in 181 5, the privateers were 
 called home, and the long-dreaded warships became the protectors 
 instead of the destroyers of commerce. A common carrier might 
 operate a line of vessels with a regular schedule of sailings without 
 danger of the loss of ships by capture. 
 
 Traffic conditions made possible the profitable maintenance of line 
 services between America and Europe. The growth of the United 
 States in population and in industrial activities gave rise to an over-sea 
 trade large enough in volume and regular enough in flow to furnish 
 tonnage and pass^engers for line ships dispatched on fixed dates. It is 
 the certainty of traffic quite as much as its amount upon which the 
 success of line services depends. 
 
 The separation of the trading and transportation services, like other 
 economies in industry connected with the division of labor, required 
 the employment of capital in larger units. It meant changing from 
 small-scale to larger-scale industry in the ocean transportation business. 
 Had it been safe for line vessels on the high seas before 1815, and had 
 the volume and flow of commerce made probable the success of their 
 services, the capital could doubtless have been secured by Americans 
 for the purchase and operation of lines. Certain it is tbat when the 
 Treaty of Ghent and the battle of Waterloo made the ocean safe, and 
 the revival of industry made the volume of traffic fairly dependable, 
 capital was found for the establisliment of ocean lines. 
 
 Charter traffic was not of great importance in the seventeenth and 
 eighteenth centuries, nor, indeed, till after the middle of the nineteenth, 
 although the practice of chartering, or hiring, ships is probably as old 
 as that of leasing houses. From the early days of maritime commerce, 
 producers and merchants temporarily in need of vessels have indi- 
 vidually or jointly hired ships when they were available. The " adven- 
 turers" who financed the planting of the Plymouth Colony purcliased 
 the S.peediuell, but hired the larger ship Mayflower; and, it may be 
 remarked incidentally, they criticized the Pilgrims severely (though 
 unjustly) for detaining the Mayflower at New Plymouth through the 
 winter of 1620-21 and dispatching her back to England without cargo. 
 
 The demand for chartered vessels first became general wTien industry 
 made possible the importation of crude materials or the exportation of 
 the products of agriculture, mining, or manufacture in full-cargo lots. 
 During the latter half of the nineteenth century, charter traffic came 
 
1 88 History of Domestic and Foreign Commerce. 
 
 to be of great volume, and a large amount of capital was invested in 
 "tramp" ships, sail and steam, whose owners, acting as common 
 carriers, secured, with the assistance of ship-brokers, bulk cargoes for 
 the transportation of which the shippers paid stipulated freight rates. 
 In general, it may be said that charter traffic came to be a prominent 
 feature of ocean commerce after merchants ceased to own and operate 
 the ships needed for their trade. 
 
 The separation of the services of the carrier and the merchant came 
 about gradually, and began earlier in Great Britain than in the United 
 States. In 1807, the Society of Shipowners of Great Britain pubHshed 
 a volume entitled a Collection of Interesting and Important Reports and 
 Papers on the Navigation and Trade of Great Britain, etc., to assist in 
 securing certain desired legislation by Parliament; and the introduc- 
 tion to this book (p. xxvi) contains the following significant paragraph: 
 
 "The Society of Ship-owners think it important to state that the numerous 
 body of Men whose Capitals are embarked at this time in British Shipping are 
 not engaged in other Mercantile pursuits, but depend wholly on the returns 
 they expect to receive from their property so employed. This observation is 
 considered the more necessary from recent inquiries which have been made to 
 ascertain who the Ship-owners were, they never having been before considered 
 distinct from the Merchants, and that the property in Shipping had generally be- 
 longed to that very respectable and intelligent class of his Majesty's Subjects." 
 
 This would indicate that English merchants and shippers had come 
 to employ common carriers upon the sea to a large extent during the 
 opening years of the nineteenth century; whereas there is no evidence 
 of the successful operation of the common carrier in maritime commerce 
 in the United States prior to 1816, when the Black Ball Line began to 
 run packet ships between New York and Liverpool. Had it not been 
 for the interruption in the commerce of the United States with Europe 
 caused by the embargo and non-intercourse acts of 1807 and 1809 and 
 the war of 181 2, it is probable that the period of transition from the 
 era of the merchant carrier to that of the common carrier on the sea 
 would have begun several years earlier in America. 
 
 At least two attempts were made before the end of the eighteenth 
 century, one by Englishmen, the other by Frenchmen, to establish fine 
 services between Europe and America.^ The Falmouth Line, with 
 5 packet ships, began running between Falmouth and New York before 
 the Revolution, but the service was necessarily infrequent during the 
 war and seems not to have become of much importance, even after 
 1783. When the treaty of 1783 made the United States politically 
 independent of Great Britain and it was supposed that Americans 
 would henceforth trade less with England and more with France, who 
 had befriended them in their war for independence, a French company 
 began running packet ships between I'Orient and New York. Monthly 
 
 ij. R. Smith, The Ocean Carrier, 99. 
 
Early Organization of American Commerce. 189 
 
 sailings were announced and passenger, mail, and freight traffic was 
 solicited. It was soon discovered, however, that the trade of the 
 United States was, for the most part, to remain with England. The 
 French line to America soon disappeared. It had less vitality and 
 shorter life than the Falmouth Line; neither succeeded in establishing 
 itself as a common carrier in the trade of America. 
 
 The appearance of the common carrier in the maritime commerce of 
 the United States after the war of 1812 meant neither the immediate 
 nor the rapid withdrawal of the merchant carrier. Indeed, there are 
 survivals of the old-time merchant carrier even to-day, although the 
 international trade of the world is now served both by scores of great 
 lines each managing a large fleet of 5,000 to 20,000-ton steamers, and 
 by thousands of chartered sail and steam vessels which, though operated 
 as single units, approach in size and efficiency the ships composing the 
 well-known ocean lines. The world's commerce, however, is no longer 
 handled solely or mainly by the merchant. He shares his task with 
 the common carrier, both being assisted by the ship-broker, the freight- 
 forwarder, the insurance-underwriter, and the international banker 
 The cooperation of these indispensable co-workers with the merchant 
 and the carrier in the present-day conduct of trade is a part of the 
 history of the organization of commerce in the nineteenth century. 
 
PART TWO 
 
 INTERNAL COMMERCE OF THE 
 UNITED STATES 
 
 By T. W. van metre 
 
 191 
 
CHAPTER XII. 
 
 VOLUME AND GENERAL CHARACTER OF THE INTERNAL COMMERCE 
 
 OF THE UNITED STATES. 
 
 Definition of internal commerce, 193. Internal commerce larger in volume than 
 the foreign trade, 194. Resources and industrial characteristics of different sec- 
 tions of the United States, 195. The Northeastern States, 195. The Southern 
 States, 197. The Central States, 198. The Rocky Mountain States, 199. The 
 Pacific States, 199. Tonnage of commerce by rail, 1910, 200. 
 
 Though in its fullest signification the internal commerce of a country 
 embraces every purchase, sale, and exchange of commodities occurring 
 within its boundaries, together with the business of transmitting intel- 
 ligence and of transporting persons and things from place to place, the 
 term is here taken as referring to the interchange of commodities among | 
 the various sections and communities of a country carried on over' 
 interior lines of transportation — rivers, lakes, canals, highways, and 
 railroads. In a study of the history of internal commerce, the local 
 exchanges among the individuals of single communities, which would 
 be included within the scope of the broad definition of internal com- 
 merce given above, are not of practical significance; and the business 
 of the transmission of intelligence and of the transportation of persons 
 and property, though its development is of vast importance in the 
 building up of internal trade, is of itself a subject for incidental con- 
 sideration. To describe the development of the exchange of products! 
 among the various sections of a country is the primary object of a his- 
 tory of internal trade. 
 
 Internal commerce can scarcely be said to have existed in America | 
 prior to the Revolutionary era. Practically the entire population 
 lived on a narrow strip of territory along the Atlantic Ocean, and about 
 the only domestic commerce of importance was the coasting trade. 
 Even this trade was engaged largely in the distribution of imported 
 goods and in the collection of domestic farm and forest products for 
 exportation, as none of the colonies produced a large surplus of any 
 commodity for which there was a demand in any of the other colonies. 
 After the close of the Revolution, the rapid settlement of the region i 
 west of the Appalachian highland and the development of a sectional 
 diversity of occupation — manufacturing in the New England and; 
 Middle States, grain-raising in the Ohio Valley, and cotton-raising in 
 the South — gave rise to a large internal trade. 
 
 After this beginning, internal trade had a steady and rapid growth. 1 
 The westward migration never ceased until the occupation of the 
 continent from ocean to ocean was accomplished. The vast extent 
 of territory with its incalculable wealth of natural resources, its plen- 
 tiful rainfall and wide range of climatic conditions, and its facilities 
 
 193 
 
194 History of Domestic and Foreign Commerce. 
 
 for manufacturing, yielded a constantly increasing store of wealth to 
 the activities of an energetic and industrious population, and at the 
 same time aflforded opportunity for an amazing diversification of 
 industry. The high standard of living of the people created a demand 
 for food, clothing, and many comforts and luxuries more varied than 
 ,that of any other people. Transportation facilities developed with the 
 ; spreading of the population and the growth of industry, binding 
 kogether all the widely separated parts of the large territory, permitting 
 an extensive subdivision and specialization of productive effort, and 
 enabling the inhabitants of each section to secure the products of all 
 other sections and in turn to send their surplus to any market in the 
 country. Increasing with constant acceleration, internal commerce 
 outstripped in magnitude all other lines of industry, and to-day is the 
 best index of the wealth and prosperity of the nation. 
 
 The internal commerce of the United States has received far less 
 study than its foreign trade, the spectacular development of which has 
 been the theme of much writing and discussion. But large as the vol- 
 ume of foreign commerce has become, it fades into somewhat small 
 proportions when compared to the stupendous volume of internal trade. 
 Each year the United States produces many biHions of dollars worth of 
 exchangeable commodities. A small fraction of the output is exported 
 to foreign countries. The remainder, with the exception of a relatively 
 small portion that is consumed by those who produce it, is bought and 
 sold within the United States. Practically all the goods exported 
 abroad also enter the domestic trade of the nation before they become 
 available for exportation. This great stock of products thus exchanged, 
 together with most of the foreign imports that are resold after entering 
 ithe country, make up the chief materials of domestic trade. Part of 
 this stock is consumed within the immediate vicinity of the place of 
 its production, but a tremendous amount is distributed throughout the 
 country over the railroads, lakes, rivers, and canals. Adhering strictly 
 to the interpretation of the term "internal commerce" previously 
 given, one may consider these commodities as constituting the materials 
 of the internal trade of the country. By far the largest part of the 
 internal commerce is carried on over the railroads. Each year since 
 1887 the Interstate Commerce Commission has collected statistics 
 showing the volume of railroad traffic. During the fiscal year ending 
 June 30, 1910, the traffic originating on the various railroads of the 
 country amounted to 1,026,491,782 tons. Complete statistics of the 
 volume of traffic carried by water within the United States are not 
 collected. In 1906, however, the Bureau of the Census, after a careful 
 inquiry, estimated that the total volume of the internal trade by water 
 amounted to 107,410,495 tons, divided as follows: 
 
 Tons. 
 
 Great Lakes and St. Lawrence River 75,609,649 
 
 Mississippi River and its tributaries 27,856,641 
 
 All other inland waterways 3,944,655 
 
 Total 107,410,945 
 
Volume and General Character of Internal Commerce. 195 
 
 Allowing for no difference in the volume of traffic in inland water- 
 ways between 1906 and 1910, the entire rail and inland water traffic for 
 the latter year amounted to 1,133,902,727 tons. 
 
 It is impossible to give an accurate statement of the value of this 
 traffic. Contrary to its practice in regard to foreign trade, the value of 
 which is reported annually with great detail, the Government makes 
 no attempt to ascertain the value of the larger and more important 
 domestic trade. It is probable that the value of the internal traffic for 
 1910 amounted to something more than ^30,000,000,000, a sum ten 
 times the value of the foreign trade of the United States, and almost as 
 large as the value of the foreign trade of the entire world. 
 
 Internal commerce, like foreign trade, arises because of the natural 
 and acquired differences in the productive capacities of separate com- 
 munities so situated that the inhabitants of one community are able to 
 secure needed commodities, for which they have inferior advantages 
 for production, in exchange for articles the production of which is 
 favored by the conditions in their particular locality. With a growing 
 ease of interchange among neighboring regions, productive effort tends 
 to a greater specialization, which in turn is reflected in a larger and 
 larger trade. In the United States, where great diversities of climate 
 and resources favor a wide variation of production, this principle of 
 commercial growth has been fully exemplified. Adapted naturally or 
 artificially to certain lines of activity, different sections of the country 
 have become more or less specialized, and this localization of trades and 
 occupations has been the most important of the factors determining the 
 general character of internal trade. 
 
 For convenience the United States may be divided into five sections, 
 distinguished from one another on the basis of industries which consti- 
 tute the primary source of their economic prosperity. Geographically 
 these sections may be designated as the Northeastern States, the 
 Southern States, the Central States, the Rocky Mountain States, and 
 the Pacific States. No one of these sections is economically self-] 
 sufficing, but each depends more or less upon all the others for various 1 
 commodities to support its economic welfare. A review of the principal 
 resources and characteristic industries of each section and a brief 
 description of their most important commercial relations will indicate 
 the chief features of the internal trade of the entire country. 
 
 RESOURCES AND INDUSTRIAL CHARACTERISTICS OF DIFFERENT SECTIONS 
 OF THE UNITED STATES. 
 
 The Northeastern States include all the States north of North Caro- 
 lina and east of Ohio and Kentucky. The principal industries of this 
 section are manufacturing and mining. The great manufacturing 
 industries of these States are chiefly accountable, directly and indirectly, 
 for the extensive trade with the other sections. By far the largest 
 part of the raw materials for the many large manufacturing establish- 
 
196 History of Domestic and Foreign Commerce. 
 
 merits are brought from a distance. The chief sources of iron ore 
 are the mines around the western end of Lake Superior, whence 
 millions of tons are transported each year by lake vessels to ports on 
 Lake Erie to be carried by rail to the furnaces of Pennsylvania and 
 New York; all the cotton and most of the wool used in the textile mills 
 are shipped in from the South and West; and many other industries, 
 too great in number to be given here, in a similar way draw their raw 
 products from the other sections. The finished products of the mills 
 are marketed everjrwhere throughout the country. Tools, machinery, 
 steel rails, and structural iron from the iron and steel mills, and the 
 fabrics, clothing, carpets, and rugs from the cotton and woolen mills 
 of these States are sold in every State in the Union. 
 
 The concentration of population brought about in this section by 
 the growth of manufacturing is also a reason for its large trade with 
 other States. Though agriculture holds a place of importance among 
 the economic interests of the Northeastern States, and dairying, truck- 
 farming, and mixed farming contribute a large supply of food for the 
 inhabitants of the numerous urban centers, they are entirely inadequate 
 to supply the total amount of food required, and a large part of the 
 subsistence of the population is drawn from the States farther west. 
 
 Considerably more than one-half the tonnage of the coal mined in 
 the United States is secured in this section and the distribution of a 
 large part of the output among these States forms an important part 
 of their commerce. Moreover, large quantities of coal are shipped west 
 and south. Both anthracite and bituminous coal are shipped by rail 
 or by rail and lake to all Central States east of the Mississippi River, 
 and a large tonnage of soft coal is shipped in barges down the Ohio and 
 Mississippi Rivers. The oil-refineries of this region secure crude petro- 
 leum from nearly all the oil-fields of the country and ship its various 
 refined and finished products to many markets among the other sections. 
 
 In addition to the large commerce in all the important domestic 
 products of the United States, which are shipped in and out for home 
 consumption, the Northeastern States possess the ports through which 
 is handled the major portion of the foreign trade of the nation. A 
 heavy tonnage of agricultural produce, cereals, cotton, fruit, animals, 
 and provisions, and a large amount of manufactured goods move from 
 the interior to the North Atlantic ports for exportation to European 
 countries and all other parts of the world. Through New York alone 
 one-third of the outbound foreign commerce of the country passes, and 
 Baltimore, Boston, and Philadelphia handle a sixth. The import trade 
 is concentrated to an even greater degree within this section. Three- 
 fourths of the importations into the country come through the four 
 cities just named. New York alone handling six-tenths of the total. 
 The commodities brought in are of a wide variety and of great value, 
 and their distribution constitutes an important part of the internal 
 trade of the eastern seaboard cities. 
 
Volume and General Character of Internal Commerce. 197 
 
 The Southern States, including all the States lying south of the 
 thirty-seventh parallel of latitude, between the Atlantic Ocean and 
 the western boundary of Texas, have long followed as their chief 
 industry the cultivation of cotton. The importance of cotton-raising in 
 this section has greatly influenced the history of the internal trade of 
 the United States. The almost exclusive devotion of the South to 
 this great staple for a long time compelled the dependence of that section 
 upon the Northern States for practically all its manufactured necessi- 
 ties and a large part of its food-supply. At the same time the southern 
 cotton was a necessary factor in the development of the extensive textile 
 industries of the North, especially in the New England and Middle 
 States. The rail shipments of cotton to northern mills make up a 
 large part of the trade of the Southern States; large quantities of this 
 valuable commodity are also shipped by rail to every important port 
 of the Pacific and North Atlantic States for exportation; and still 
 larger amounts are concentrated at the south Atlantic and Gulf ports 
 for the coastwise and foreign trade. 
 
 Within recent years there has been a notable development of cotton 
 manufacturing in the Southern States themselves, and their mills are 
 now consuming more cotton each year than the mills of the North. 
 The expansion of these manufactures has caused a decline in the trade 
 in raw cotton in a few States, but the loss has been more than com- 
 pensated for by the added commerce in food and manufactured products 
 occasioned by the change. 
 
 The industrial and commercial life of the South has been further 
 modified in recent years by the development of its mineral resources. 
 The coal fields of Alabama, Tennessee, Missouri, and Oklahoma con- 
 tribute a large amount of fuel for distribution among the States com- 
 posing this section, and the iron mines of Alabama and Tennessee now 
 form the basis of large iron and steel industries in those States. The 
 phosphate beds of Tennessee, South Carolina, and Florida supply 
 valuable fertilizing material which enters both foreign and domestic 
 trade. The oil-fields of Oklahoma and Texas are among the most 
 productive in the country. 
 
 The lumber production of the Southern States has grown to such 
 an extent that this section now outranks all other lumber-producing 
 regions of the country in the value and quantity of the annual cut. 
 The yellow-pine belt extending along the Atlantic Ocean and Gulf of 
 Mexico from North Carolina to Texas furnishes lumber in large amounts 
 for all the Northern States, as well as a large quantity of naval stores; 
 and the hardwood forests lying north of this belt have given rise to an 
 extensive milling industry, the products of which are widely distributed 
 throughout the North and South. 
 
 Though cotton, forest products, and petroleum are the most impor- 
 tant commodities shipped from the South to other parts of the country, 
 
198 History of Domestic and Foreign Commerce. 
 
 many other articles add to the commerce between this section and the 
 other States. Tropical fruits from Florida, sugar from Louisiana, rice 
 from the lowlands on both the Atlantic and Gulf coasts, tobacco from 
 North Carolina and Tennessee, live-stock from Texas, and large quan- 
 tities of fresh vegetables and fruit from several of the States are sold 
 in all parts of the North, and help to pay for the heavy return ship- 
 ments of food products, manufactures, and general merchandise. 
 
 The Central States lie north and west of the two groups just dis- 
 cussed, extending westward to the eastern boundaries of Montana, 
 Wyoming, and Colorado. This group forms a great cereal and live- 
 stock belt, and it is the principal food-producing region of the country. 
 The spring wheat of the Dakotas, Minnesota, and Wisconsin and the 
 winter wheat of the remaining States of this section furnish flour for 
 millions of people in the United States and in foreign countries; and the 
 immense corn crops of the States south of the forty-third parallel of 
 latitude are used to fatten thousands of hogs and cattle which are 
 converted into various food products. Other cereals, such as oats, 
 barley, and rye, potatoes and other vegetables, all kinds of orchard 
 fruits, and large quantities of butter, cheese, poultry, and eggs are also 
 produced in this region for local consumption and shipment to other 
 sections. The collection and distribution of a large part of the agri- 
 cultural produce of these States and of the States of the Southern and 
 Rocky Mountain groups are accomplished by a number of large cities 
 on the Great Lakes and on the Mississippi, Ohio, and Missouri rivers. 
 The trade of these great primary markets is one of the most important 
 features of the internal commerce of the country, and the traffic moving 
 between this section and the Northeastern States makes up a large 
 proportion of the total internal trade. 
 
 Though agriculture is the leading industry of this group of States, 
 manufacturing is of almost equal importance. Practically all the prod- 
 ucts of the farms must be changed in form before they are ready for 
 sale to the final consumers, and the preparation of raw food products for 
 wholesale and retail markets is a notable feature of the industrial 
 activity of this section. Slaughtering and meat packing, milling, 
 canning and preserving, and the manufacture of butter and cheese are 
 leading industries of this nature. Agricultural development has also 
 led to an extensive manufacture of agricultural implements. Other 
 kinds of manufacturing industries not closely related to agriculture 
 have also been developed, especially in the eastern part of this section, 
 which now rivals the Northeastern States as a manufacturing center. 
 The easy access which Chicago and the surrounding region have to the 
 coal fields of Illinois and Indiana and to the great iron-ore ranges 
 around Lake Superior makes that district an ideal place for the location 
 of iron and steel mills; and Ohio, too, has large industries of this kind. 
 Other mineral resources of petroleum, copper, stone, lead, and zinc are 
 
Volume and General Character of Internal Commerce. 199 
 
 the basis of manufacturing industries; and abundant forest resources 
 have led to the estabHshment of many lumber mills and factories for the 
 production of all kinds of articles of wood. This section shares with 
 the Northeastern States the business of supplying the South and West 
 with many manufactured commodities. 
 
 The Rocky Mountain States — Montana, Idaho, Wyoming, Nevada, 
 Utah, Colorado, Arizona, and New Mexico — have for their funda- 
 mental industry the production of wool and live-stock. Over one-half 
 of the sheep of the United States are to be found in these eight States. 
 The wool from them is practically all used in the textile industries 
 of the Northeastern States. The cattle are shipped both to the live- 
 stock markets of the Central States and to the larger cities on the 
 Pacific coast. 
 
 The mineral resources of these States make up a large part of their 
 wealth. The census of 1910 ranks Colorado sixth and Wyoming 
 eleventh among the States according to the value of bituminous coal 
 produced. Gold and silver are found in greater or less quantities in 
 every State of this group; nearly two-thirds of the total output of 
 copper of the country is mined and smelted in Montana, Arizona, and 
 Utah; and extensive deposits of iron ore are to be found, the most 
 important being in Colorado. 
 
 The arid climate of this region will always prevent the development 
 of agriculture to the extent reached in other sections of the country, 
 but irrigation is now converting into productive farming land many 
 large tracts that were once barren. The reclamation of still more of 
 the "Great American Desert" is only a question of time and, as the 
 movement continues, the population and wealth of this section will 
 grow and its commercial importance increase. 
 
 The Pacific States are still primarily agricultural. Like the Rocky 
 Mountain States, they secure most of their manufactured goods and 
 merchandise from the Central and Northeastern States. Wheat, 
 barley, live-stock, beet-sugar, fruits, and lumber constitute the basis 
 of their industrial and commercial prosperity. A portion of their 
 surplus is shipped by sea across the Pacific Ocean and to the 
 lands bordering the Atlantic Ocean, but a still larger part finds its 
 way by rail to markets in the States east of them. The fruits of 
 California and the lumber and shingles of Washington and Oregon 
 form the most valuable part of the traffic moving eastward from this 
 section. The market for orchard and vineyard products includes 
 the entire United States, and the market for timber products is spread- 
 ing rapidly eastward as the depletion of the forests of the Central and 
 Southern States goes on. The grazing industry and the fisheries of the 
 Pacific States are also a source of a valuable eastbound traffic. The 
 coal of Washington and the petroleum of California are important 
 articles of trade within this region. 
 
200 
 
 History of Domestic and Foreign Commerce. 
 
 The rapid growth of the foreign trade with the Orient has added 
 greatly to the commercial prosperity of the Pacific Coast. Through 
 its ports are handled raw cotton, manufactures, and food products sent 
 from the States east of the mountains for exportation, and the imports 
 from the transpacific countries entering these ports for shipment to 
 eastern points over the transcontinental railroads are an even larger 
 source of traffic. 
 
 TONNAGE OF INTERNAL COMMERCE BY RAIL. 
 
 In the volume of statistics published annually by the Interstate Com- 
 merce Commission an analysis of the railroad freight traffic is presented 
 which gives, as far as is practicable to do so, the character of the freight 
 transported within the United States and also indicates the territory 
 
 
 Table 11 
 
 . — Railroad tonnage by groups of commodities 
 
 , IQIO. 
 
 
 
 
 
 Division I. Territory 
 
 Division II. Territory 
 
 Division III. Terri- 
 
 
 
 north of Ohio and 
 
 south of Ohio and 
 
 tory west of Lake 
 
 
 United States. 
 
 Potomac Rivers and 
 
 Potomac Rivers and 
 
 Michigan, Indiana, 
 
 
 
 east of Illinois and 
 
 east of lower Missis- 
 
 and lower Missis- 
 
 Class of 
 commodity. 
 
 
 Lake Michigan. 
 
 sippi River. 
 
 sippi River. 
 
 
 
 
 
 
 
 
 
 
 Tonnage 
 
 Per- 
 
 Tonnage 
 
 Per- 
 
 Tonnage 
 
 Per- 
 
 Tonnage 
 
 Per- 
 
 
 reported as 
 
 centage 
 
 reported as 
 
 centage 
 
 reported as 
 
 centage 
 
 reported as 
 
 centage 
 
 
 originating 
 
 of ag- 
 
 originating 
 
 of ag- 
 
 originating 
 
 of ag- 
 
 originating 
 
 of ag- 
 
 
 on line. 
 
 gregate. 
 
 on line. 
 
 gregate. 
 
 on line. 
 
 gregate. 
 
 on line. 
 
 gregate. 
 
 Products of — 
 
 
 
 
 
 
 
 
 
 Agriculture . . 
 
 78,736,587 
 
 8.13 
 
 20,814,209 
 
 4.42 
 
 9,913,080 
 
 6.79 
 
 48,009,298 
 
 13.67 
 
 Animals 
 
 20,294,144 
 
 2.10 
 
 7,402,683 
 
 1.57 
 
 1,083,606 
 
 .74 
 
 11,807,855 
 
 3.36 
 
 Mines 
 
 544,604,373 
 
 56.23 
 
 291,210,129 
 
 61.80 
 
 79,201,479 
 
 54.24 
 
 174,192,765 
 
 49.60 
 
 Forests 
 
 113,010,825 
 
 11.67 
 
 23,988,412 
 
 5.09 
 
 30,561,411 
 
 20.93 
 
 58,461,002 
 
 16.64 
 
 Manufactures. . . . 
 
 139,678,391 
 
 14.42 
 
 90,419,841 
 
 19.19 
 
 16,302,043 
 
 11.16 
 
 32,956,507 
 
 9.38 
 
 Merchandise 
 
 35,718,413 
 
 3.69 
 
 13,780,911 
 
 2.92 
 
 5,188,786 
 
 3.55 
 
 16,748,716 
 
 4.77 
 
 Miscellaneous 
 
 Grand total. 
 
 36,421,276 
 
 3.76 
 
 23,597,090 
 
 5.01 
 
 3,778,254 
 
 2.59 
 
 9,045,932 
 
 2.58 
 
 968,464,009 
 
 100.00 
 
 471,213,275 
 
 100.00 
 
 146,028,569 
 
 100.00 
 
 351,222,075 
 
 100.00 
 
 in which the traffic originates. Table ii shows the results of the 
 analysis of the railroad freight business for the year ending June 30, 
 1910. A little more than 94 per cent of the total tonnage for the year 
 is included within the classification. 
 
 It will be seen from the table that mineral products, chief among 
 which are coal and ore, constitute more than half of the freight tonnage 
 of the railroads, though this traffic takes a much lower rank in value 
 than the other important classes of goods. Manufactures, forest 
 products, and farm products rank next, in the order given, in the 
 amounts of tonnage contributed. The sectional classification of the 
 traffic shows little that has not been indicated in the preceding dis- 
 cussion of the resources and industries of the country. Division I, 
 including the Northeastern States and the eastern half of the Central 
 States, contributes almost half of the total classified traffic, practically 
 two-thirds of the total manufactures, and more than one-half of the 
 
Volume and General Character of Internal Commerce. 201 
 
 minerals transported. In Division II the products of agriculture seem 
 of less importance than they really are, chiefly because cotton, the most 
 important agricultural product of the section, is relatively light in 
 weight. In Division III the products of the farms — cereals, flour, 
 hay, fruits and vegetables, animals, and the various animal products- 
 constitute the traffic of greatest volume next to minerals. 
 
 The traffic on the inland waterways of the United States consists, 
 even to a greater extent than does the railroad traffic, of low-grade, 
 bulky commodities. On the Great Lakes, which form the most 
 important waterway, iron ore and coal make up the largest part of the 
 tonnage; but large quantities of cereals and flour are also transported 
 on these bodies of water, and lumber, manufactured goods, and mer- 
 chandise are items of considerable importance. Of the traffic on the 
 Mississippi River system, the proportion of low-grade freight is prob- 
 ably higher than the proportion on the Great Lakes. The coal carried 
 on the Ohio River and its tributaries is the most important single item 
 from the standpoint of tonnage. 
 
CHAPTER XIII. 
 
 EARLY DEVELOPMENT OF THE INTERNAL COMMERCE OF THE 
 UNITED STATES. 1789 TO 1830. 
 
 Location of settlements and commercial cities, 202. Inland transportation, 203. 
 The Mississippi River as an outlet for the trade of the Ohio Valley, 205. Openmg of 
 the Mississippi River and the purchase of Louisiana, 206. Growth in population 
 of the United States from 1790 to 1810, 208. Internal trade in 1810, 212. The 
 War of 1812 and the growth of the West, 211. Use of steamboats on the Miss- 
 issippi, 213. Trade of New Orleans in 1818, 214. The panic of 1819 and its 
 effects, 216. The American system, 218. Effect of opening of the New York 
 canals in 1825, 220. Building and aid of canals and turnpikes by the States, 221. 
 Summary, 222. 
 
 At the beginning of the national era the internal commerce of the 
 United States gave small promise of the tremendous development it 
 was to undergo during the ensuing century. There was as yet too little 
 sectional differentiation of occupation to give rise to a large interstate 
 trade in native products, and the proximity of the great part of the 
 population to the seacoast made it cheaper and more convenient to 
 carry on the interstate trade that did exist by means of small saiHng- 
 vessels plying along the coast. Practically all the internal trade was 
 devoted to bringing the surplus agricultural produce of the interior 
 to the seaport towns, where it was exchanged for imported wares that 
 could not be produced by the inhabitants of the inland region but which 
 w^ere necessary to their welfare. The domestic commodities collected 
 at the seaports were nearly all exported to foreign countries. 
 
 As is usual in a new country, the settlers who had first pushed into 
 the interior had founded their new homes close to the rivers, and these 
 I natural highways had always been and still were the most important 
 means of transportation to and from the seacoast. The most impor- 
 tant of the rivers flowing into the Atlantic Ocean were the Hudson in 
 New York, the Delaware between Pennsylvania and New Jersey, the 
 Susquehanna in western New York, Pennsylvania, and Maryland, and 
 the Potomac and James in Maryland and Virginia. Other rivers, now 
 considered unnavigable, were continually used at this period, the Con- 
 necticut, Roanoke, Savannah and other smaller streams being but little 
 less important than the large rivers. The Mississippi River having been 
 closed to the people of the United States soon after the Revolution, 
 the great western system of inland waterways was of little commercial 
 value, but the current of the Ohio was being used to bear thousands of 
 emigrants to their new homes in the West. 
 
 At the mouths of the larger streams that flowed into the Atlantic 
 were to be found the large and wealthy cities, where enterprising men 
 were already laying the foundations of large fortunes in a lucrative and 
 rapidly growing export trade in the agricultural produce that was 
 
Early Development of Internal Commerce. 203 
 
 floated down from the farms of the interior. Philadelphia, connected 
 with the sea by the readily navigable Delaware River and Bay, 
 exported large quantitiesof meat, grain, flour, and lumber, collected from 
 Pennsylvania, New Jersey, and Delaware, and sold to the inhabitants 
 of these States thousands of dollars worth of imported goods. New 
 York received, by the sloops and arks of the Hudson River, the raw 
 produce of the Hudson and Mohawk Valleys; the lumber, pot and 
 pearl ashes, grain, meat, and dairy products coming down the Connecti- 
 cut River from as far as the Canadian border were often carried through 
 Long Island Sound to New York to be exported abroad. In a simi- 
 lar way, Baltimore was the center for the collection of the products 
 from the lands around the upper part of the Chesapeake Bay and from 
 the extensive territory drained by the Susquehanna, even the farmers 
 in the distant region of western New York utilizing this city as the 
 outlet for the surplus of their crops and the source of their imported 
 necessities. In the South, where the plantation system of farming 
 prevailed, the practice of carrying on foreign commerce from the wharves 
 of the plantations themselves had prevented the development of cities 
 of a considerable size; but the settlement of the higher country for the 
 cultivation of upland cotton indicated that the old methods of trade 
 were soon to become obsolete. 
 
 INLAND TRANSPORTATION. 
 
 Living close along the ocean, whose numerous excellent harbors and 
 long stretches of sheltered water gave ample facilities for the little 
 intercolonial trade that existed, and where rivers aff"orded natural 
 means of transportation from the interior to the towns upon the coast, 
 the people of early colonial days had not found it necessary to give 
 much time to the construction of roads. The gradual inland move- 
 ment of the population and the settling of lands back from the edges 
 of the rivers had finally compelled them, however, to give more atten- 
 tion to the means of land transportation. Rude earth roads were built 
 to replace the old Indian trails through the forests. These roads were 
 unspeakably poor — sloughs of mire during the thaws of winter and 
 spring and thick with dust in the summer; but bad as they were, they 
 carried a large traffic and their use was steadily growing. Dwight^ 
 told how tinware peddlers from Berlin, Connecticut, made their way in 
 carts and wagons to every section of the country from Maine to 
 Georgia. It was possible to carry freight overland from Boston to 
 Savannah, but the trip consumed 115 days and the cost was enormous. 
 Genet, in 1793, traveled by coach from Charleston to Philadelphia; 
 and Washington, during his administration, traveled by land through 
 every State in the Union. 
 
 ^Travels in New England and New York (1797), II, 43-45. Quoted by Callender, Economic 
 History of the U. S., 302. 
 
204 History of Domestic and Foreign Commerce. 
 
 Three great roads had been built into the western country: one up 
 the Mohawk Valley into western New York, and two across the 
 Allegheny Mountains— the Forbes or Pennsylvania road from Phila- 
 delphia to Pittsburgh, and the Wilderness road, over which the early 
 settlers of Kentucky had threaded their way up the Shenandoah 
 Valley and through Cumberland Gap to the southern banks of the 
 Ohio River.i The Mohawk Valley road carried great quantities of 
 grain to the city of Albany; the Pennsylvania road was traveled by 
 thousands of emigrants starting for the lands on the Ohio, and by long 
 trains of pack-horses and wagons bringing such of the produce of 
 western Pennsylvania as could afford the cost of carriage to the 
 markets of Philadelphia. In the South, the roads were poorer than in 
 the North. Tobacco and cotton were much lighter than the grain 
 and other products of the northern farms and could be transported with 
 greater ease. Much of the tobacco was hauled over "rolling roads," 
 shafts being attached to the ends of a hogshead and a horse used to 
 roll it over a rough, narrow track to some wharf on an inlet or river. 
 
 Inland towns were beginning to grow up at the focusling points of 
 the country roads, and the owners of the general stores at such places, 
 
 ' where sugar, tea, coffee, molasses, cloth, hardware, metals, and earthen- 
 ware were freely bartered for grain, meat, poultry, cheese, butter, 
 candles, fruits, vegetables, and rude articles of domestic manufacture, 
 derived large profits out of their position as middlemen between the 
 producing farmer and the importing and exporting merchant at the 
 nearest seaport. Especially if such inland towns were situated on the 
 navigable streams they assumed an appearance of affluence and pros- 
 perity. The citizens of Albany, which was a market for furs and skins 
 from Canada, for lumber from the mountains, and for the grain from 
 the "rich and splendid valley already famous for its wheat fields and 
 corn fields and rye,"^ had long been boasting about the commercial 
 future in store for them. Springfield, Massachusetts, was a thriving 
 market-town on the Connecticut River. Lancaster, Pennsylvania, 
 was the largest inland town not situated on a waterway, and the 
 highway between it and Philadelphia probably carried more traffic 
 than any other road in the country. This highway, by 1792, had been 
 converted into a turnpike, the first in the United States. Winchester, 
 Virginia, had several grist mills grinding up the wheat of the surround- 
 ing farms, and teams were "constantly employed in the transportation 
 of flour to Alexandria,"^ 80 miles away, at a cost of carriage of $1.25 a 
 barrel. 
 
 , The transportation facilities of the time, however, were entirely 
 inadequate to the needs of the country, and the lack of better means 
 
 'For map of roads in 1787 see Avery, Hist, of the U. S. and its People. VI, 410. 
 ^McMaster, History of the People of the U.S., I, 58. 
 'Coxe, View of the United Stales. :i\A. 
 
Early Development of Internal Commerce. 205 
 
 for getting products to market was a serious impediment to internal j 
 development. Tench Coxe, writing in 1792, graphically pictured the 
 plight of many of the people when he said : 
 
 "To a nation inhabiting a great continent not yet traversed by artificial 
 roads and canals, the rivers of which above their natural navigation have been 
 hitherto very little improved, many of whose people are at this moment closely 
 settled upon lands, which actually sink from one-fifth to one-half of the value 
 of their crops in the mere charges of transporting them to the seaport towns, 
 and others of whose inhabitants cannot at present send their produce to a 
 seaport for its whole value, a thorough sense of the truth of the position is a matter 
 of unequalled magnitude and importance."' 
 
 Especially was the communication between the Ohio Valley and the ( 
 outside world difficult and expensive. Washington, recognizing the 
 desirability of means of cheap transportation across the mountains, 
 had, in 1785, succeeded in securing the meeting of a commercial con- 
 vention to settle problems of river navigation preliminary to the con- 
 struction of a canal between tributaries of the Potomac and Ohio 
 Rivers. The negotiations of this convention, however, had been di- 
 verted to a larger and more important matter than that for which it was 
 originally called, and the question of a canal between the eastern and 
 western country was temporarily forgotten. Agitation for such a 
 canal had been renewed during 1789 and 1790, but nothing was accom- 
 plished in this direction until long after the war of 181 2. 
 
 The natural outlet for the surplus of the Ohio Valley was the Missis-^' 
 sippi River. During the Revolutionary War the Spanish Government 
 had given the people of the United States the right of free navigation 
 of the river and a brisk trade had sprung up between the western 
 settlements and New Orleans; but in 1784 Spain had suddenly with- 
 drawn the right of free navigation and had imposed exorbitant tolls and 
 duties on all vessels descending from the United States. The people of 
 the West, enraged at being deprived of what they considered to be their 
 natural right, protested furiously at the action of the Spanish govern- 
 ment and appealed to Congress for protection. Their appeals were 
 unavailing; Congress not only failed to take steps to open the river 
 again, but in 1786, under the domination of the commercial interests 
 of the East, was on the point of bartering away, for a period of twenty- 
 five years, all claims to a right to navigate the Mississippi, in return for 
 Spanish concessions in regard to the Florida boundary. Fortunately, 
 this deal was never made, but the river remained closed in spite of the 
 protests and threats of the western farmers. The only market left 
 to them was in the cities of the eastern coast. Peltries, ginseng, and 
 whisky were almost the only products of the West that would pay 
 their cost of transportation overland to Philadelphia, and the proceeds 
 derived from the sale of these were sufficient only to purchase a few 
 
 'Coxe, View of Ihe United States, 384. 
 
2o6 History oj Domestic and Foreign Commerce. 
 
 things of first necessity, such as salt, gunpowder, and some indis- 
 pensable articles of iron. When the new government placed the 
 excise tax on whisky, which was practically the only form in which the 
 farmers of western Pennsylvania could profitably take their grain to 
 eastern markets, a storm of rebellion arose in Fayette, Washington, 
 Westmoreland, and Allegheny counties that indicated how precarious 
 their situation really was and how slender were the bonds that united 
 them to the rest of the country. The prices of the agricultural products 
 of the West were absurdly low, a cow and a calf being given in exchange 
 for a bushel of salt.^ 
 
 I Shut off as they were from commercial intercourse with the rest of 
 'the country, the inhabitants of the inland communities were forced to 
 rely upon their own efforts for the production of nearly everything 
 that they used. In the interior counties of all the Southern States the 
 household manufactures consumed were much greater in amount than 
 those imported. Out of 130 famiHes in Pittsburgh in 1790, there were 
 37 "manufacturers."^ Clothing, hats, and shoes were made in nearly 
 all homes, iron furnaces were opened in the vicinity, and in a few years 
 nails, wire, guns, and agricultural implements were being manufactured 
 in western Pennsylvania. In 1796 Brownsville had 24 grist, saw, oil, 
 and fulling mills, as well as one mill for the manufacture of paper, and 
 each year 100 boats of 20 tons each were constructed for the emigrants 
 to Kentucky.^ By reducing their raw materials to a manufactured 
 state, the people were able to avoid the importation of many wares, and 
 in face of heavy transportation charges to the eastern markets could 
 export some of their surplus. After the suppression of the whisky 
 rebellion, many Pennsylvania farmers turned their attention to raising 
 cattle and hogs, which could furnish their own transportation to market 
 and thus afford a way of disposing of otherwise useless grain. 
 
 OPENING OF THE MISSISSIPPI AND THE PURCHASE OF LOUISIANA. 
 
 The closing of the Mississippi, however, had been a deadly blow at 
 the prosperity of the western country. The bitter resentment that 
 the people had felt against the old Congress, which had allowed them to 
 be deprived of the right to unhampered navigation of the river, was 
 readily transferred to the new government. This resentment grew 
 still deeper when a temporary opening of the river, brought about in 
 1789 by the treasonable negotiations of James Wilkinson with the 
 Spanish authorities, demonstrated what splendid opportunities for 
 rich profits really existed in free trade with New Orleans. The trade 
 in 1789 was of but short duration. Almost immediately the people of 
 the United States were forbidden to sell goods in New Orleans and the 
 vexatious regulations and heavy tolls were again imposed upon vessels 
 
 "^Roosevelt, Winning of the West, I, 116, 122. 
 
 'Bishop, History of American Manufactures, I, 568. 'Ibid., II, 67. 
 
Early Development of Internal Commerce. 207 
 
 passing to the Gulf. Some men in Pittsburgh and Marietta built 
 sea-going vessels, loaded them with pork, flour, and grain, and, sub- 
 mitting to the exactions and duties imposed in Louisiana, made the 
 voyage to St. Thomas and disposed of their cargoes, after which they 
 brought the vessels to Philadelphia, sold them, and returned overland 
 to Pittsburgh. Such enterprises could be indulged in but seldom, 
 however, and even then could be shared by but a few persons. The 
 people angrily demanded of Congress whether it intended to abandon 
 or protect the West, a half-organized movement was put on foot to 
 compel the Spaniards to open the river, while the irksomeness of the 
 situation drove many to talk openly of secession from the United States 
 and union with the Spanish province. Spurred to action by the insis- 
 tent clamor of the Western people and fearful of the results which might 
 occur if their demands were neglected, the National Government at 
 length made a determined effort in their behalf, and, in October I795,v 
 secured a treaty with Spain opening the river to navigation. The 
 "right of deposit" was given at New Orleans for a period of three years, 
 with the stipulation that, if not continued there, an "equivalent 
 establishment" would be assigned on another part of the banks of the 
 Mississippi. 
 
 The successful conclusion of the negotiations was hailed with great i 
 rejoicing in Tennessee, Kentucky, Pennsylvania, and Ohio. Fleets of 
 flat-boats and keel-boats loaded with tobacco, pork, flour, grain, 
 whisky, and brandy began to move down the river. After disposing of 
 both cargo and boat at New Orleans, the owner would sail for Phila- 
 delphia or Baltimore, there lay in a supply of calicoes and other manu- 
 factured goods, and finish the journey home by wagon or on horseback, 
 arriving six months after his departure. Very seldom did any one 
 attempt to urge a craft up-stream against the powerful current of the 
 Mississippi. In the earlier days, when the northern part of the Missis- 
 sippi territory was held by the Indians, the journey by land from New 
 Orleans to the Ohio was rarely made, but later this method of reaching 
 home became popular with the flat-boat men, the route across Lake 
 Pontchartrain and through Nashville being generally used. The 
 hazard and exposure connected with the trip down the river and the 
 wearisome journey home would seem to have been sufficient to prevent 
 the New Orleans trade from attaining great dimensions, but the hardy 
 pioneers of the West were not to be daunted by the hardships involved 
 in the undertaking. The river trade grew rapidly, and in 1799 goods 
 worth more than $1,000,000 were received at the Louisiana port from 
 the country up the Mississippi.^ Now that the western farmers had a 
 
 'Although New Orleans was on Spanish territory, but a small part of this commerce was strictly 
 "foreign," because of the existence of the "right of deposit." The trade down the river was 
 analogous to the trade of inland districts of the Atlantic coast with the seaport cities. New Orleans 
 bearing the same relation to Kentucky and Tennessee that New York did to the valley of the 
 Hudson. 
 
2o8 History of Domestic and Foreign Commerce. 
 
 market for their heavy agricultural products, the cost of transporting to 
 which did not exceed the value of the commodities, they secured to 
 some extent that which before they had scarcely possessed at all— a 
 purchasing power. This enabled them to satisfy to a certain degree 
 their desire for the lighter manufactured articles of cloth and leather 
 which, notwithstanding the distance and the inferior roads, could be 
 jcarried to them in wagons from the eastern cities. The rising pros- 
 'perity in the West stimulated business in the East; nearly all the 
 money received by the flat-boat men at their southern market found 
 its wayinto the pockets of the merchantsof Baltimore and Philadelphia. 
 Indeed, there was an incessant complaint in the West because the 
 farming sections across the mountains were constantly drained of specie 
 by those two cities. 
 
 . Meanwhile, the eastern section of the United States began to develop 
 strongly those conditions indispensable to the rise of a true domestic 
 commerce — ^the exclusive devotion of different parts of the country to 
 particular lines of industry and the mutual dependence upon one 
 another for the commodities the production of which is abandoned. 
 The invention of the cotton gin decided the future of the South. 
 South Carolina and Georgia began at once to depend upon the neigh- 
 boring States for the provisions formerly raised at home. Under the 
 fostering care of the protective policy adopted by the new government, 
 the manufacturing industries of the Northern States, which had re- 
 ceived a start after the outbreak of the Revolution, increased in size 
 and variety. This sharp differentiation of interests was immediately 
 reflected in the growing coasting trade, the tonnage employed in which 
 increased from 103,775 tons in 1790 to 272,492 tons in 1800. Trans- 
 portation by land, however, was far too expensive to compete for long- 
 distance commerce, and very little of the trade among the Atlantic 
 States was conducted over internal routes of communication. 
 
 Between 1790 and 1800 the United States enjoyed, because of the 
 European wars, a considerable commercial prosperity. Business con- 
 ditions in the East being good, emigration to the West had been 
 checked, and, except in the States of Kentucky and Tennessee, which 
 absorbed more than three-fourths of the 150,000 emigrants of the 
 period, the population west of the Alleghenies had showed but small 
 absolute increase. In the following decade, during which the foreign 
 trade received several severe setbacks, the emigration to the West set 
 in very strongly. The population during the twenty years .increased 
 as shown in table 12} 
 
 The number of people west of the Appalachian Mountains tripled in 
 ten years, and by 1810 was 1,078,315, exclusive of several thousand in 
 western Pennsylvania and Virginra. The movement toward the newly 
 
 'Twelfth Census of U. S., 1900. Population, pt. i, p. xxii. 
 
Early Development of Internal Commerce. 
 
 209 
 
 opened lands in Mississippi and Louisiana was well under way, though 
 it did not begin to take on large proportions until ten years later. 
 
 The trade down the Mississippi had continued to grow. In 1802 
 the shipments from American territory down the river amounted to 
 $2,634,564, of which $1,182,800 came from Kentucky and $700,000 
 from Pennsylvania and Ohio.^ In October of that year, the Spanish 
 Intendant at New Orleans, acting upon his own initiative and responsi- 
 bility, suddenly withdrew the right of deposit at the city, granted to 
 the United States in 1795, and, contrary to the provisions of the treaty, 
 he refused to assign an equivalent establishment at any other place on 
 the banks of the river. The Western people were enraged, and it 
 was necessary to send troops to Kentucky to prevent an armed expedi- 
 tion against the Spanish province. Cries of "No protection, no alle- 
 gia"nce" were again poured into the ears of the Washington officials. 
 
 Table 12. — PopuJation of the Western States and Territories, lygo, 1800, 1810. 
 
 State. 
 
 Kentucky 
 
 Tennessee 
 
 Ohio 
 
 Indiana 
 
 Illinois 
 
 Mississippi 
 
 Louisiana (Missouri) 
 
 Territory of Orleans (Louisiana) 
 Michigan 
 
 1790 
 
 73,677 
 35,691 
 
 1800 
 
 220,955 
 
 105,602 
 
 45 , 365 
 
 5,641 
 
 8,850 
 
 1810 
 
 406,511 
 
 261,727 
 
 230,760 
 
 24,520 
 
 12,282 
 
 40,352 
 
 20,845 
 
 76,556 
 
 4,762 
 
 Fortunately, the Spanish Government disavowed the action of the 
 Intendant, and, in April 1803, the river commerce was restored to its 
 former basis. Desirous of avoiding such difficulties in the future, 
 Jefferson pushed negotiations already begun with Napoleon (to whom 
 Spain had secretly ceded her claims to Louisiana) for the purchase of 
 New Orleans and the territory through which the river flowed from the 
 possessions of the United States to the Gulf. The negotiations termi- 
 nated in October 1803, with a wholly unexpected and surprising result — 
 the purchase of the entire Louisiana province. In December, the 
 United States took possession of the newly acquired territory. Not 
 only was the undisputed control of the Mississippi secured forever, but 
 the area of the Republic was doubled. The peaceful continuance and 
 growth of the existing river trade were assured to the inhabitants of 
 the West, and the basis was laid for a future internal commerce which 
 was far to outstrip their most sanguine expectations. 
 
 The receipts at New Orleans in the years immediately following the 
 Louisiana purchase, though not exhibiting the increase that was ex- 
 pected, rose to $5,370,555 in 1867. This included sugar, cotton, and 
 
 ^Report on Internal Commerce of U. S., 1887, p. 183. 
 
2IO History of Domestic and Foreign Commerce. 
 
 molasses of Louisiana, which commodities made up a third of the entire 
 amount. Shipm,ents up the river were very small, employing less than 
 lo per cent of the tonnage used in the traffic downstream. It took 30 
 men over three months to work a loaded flat-boat from New Orleans to 
 the mouth of the Ohio, and the freight rates were greater than those 
 on traffic carried by wagons from Philadelphia to Pittsburgh in twenty 
 days. Until after 1817, the entire commerce from New Orleans to 
 the upper country was carried on by means of 20 barges averaging one 
 trip each a year. The money for which the products of the western 
 farmers was exchanged at New Orleans was invariably spent for 
 manufactured and imported wares from the eastern cities. The large 
 Conestoga freighters, drawn by 6 to 10 horses and capable of carrying 
 2 and 3 tons, made regular trips from Philadelphia to Pittsburgh, 
 bringing loads of hats, boots, powder, lead, and clothing, which were 
 distributed from the "Gateway of the West" among the towns and 
 villages down the river. Baltimore, too, had a large western trade, 
 and New York, notwithstanding its greater distance away, was begin- 
 ning to engage in it, and by a sharp cutting of freight rates was soon 
 able to secure a considerable share of the traffic. 
 
 INTERNAL TRADE IN 1810. 
 
 I The internal commerce of the country in 18 10, as in 1790, was still 
 ' handicapped by the fearfully high costs of transportation. An era of 
 V turnpike building that was to last for forty years began in 1790, and 
 the problem of land carriage for those regions close to the seacoastor the 
 navigable streams of the East had been almost eliminated; but turn- 
 pikes were unable to afford cheap carriage for long distances. The 
 charges to send goods by wagon were enormous. 
 
 "To haul a ton from Philadelphia to Pittsburgh, an all-land route, cost 
 $125. . . . To move a bushel of salt 300 miles over any road cost $2.50. 
 . . . Taking the country through, it may be said that to transport goods, 
 , wares, or merchandise cost $10 per ton per 100 miles. Articles which could 
 not stand these rates were shut from the market and among these were grain 
 and flour, which could not bear transportation more than 150 miles. The 
 causes of these rates were the terrible state of the roads and the high rate of 
 tolls."! 
 
 The Western States found the outlet for their produce in one direc- 
 tion and the source of their supplies in another, the difficulties of trans- 
 portation giving to the commerce of the Ohio Valley a peculiar tri- 
 angular character, which was retained for a half century. The States 
 bordering along Canada turned to Montreal and Quebec for a market, 
 the freight rates from Buffalo to Montreal being ^30 per ton, and from 
 Montreal to Buffalo ^60 to $75 a ton, while the rates from Buffalo to 
 'New York were $100 per ton.^ Western New York became entirely 
 
 'McMaster, History of the Peopleofthe U. S., Ill, pp. 463-464. For statement of cost of trans- 
 portation during this period consult documents appended to Gallatin's "Report on Roads and 
 Canals." American State Papers, Miscellaneous, I, 724. 
 
 'Poor, "Railroads and Canals in the United States," in Andrews, Report on Colonial and Lake 
 Trade, 278; see also Callender, Economic History of the U. S., 326. 
 
Early Development of Internal Commerce. 211 
 
 separated commercially from the eastern part of the State, and not only 
 were the various sections of the country developing local and sectional \ 
 economic interests, but local political interests as well. "The economic ' 
 question of the hour was plainly how to counteract this tendency by a! 
 system of interstate commerce which should unite them with a firm, 
 bond of self-interest."^ Gallatin's report on internal improvements 
 in 1808 reflected the plans and ambitions that were in the minds of 
 the commercial and political leaders of the country, but unfortunately 
 the foreign controversies in which the United States became involved 
 at that time prevented any attempt to carry out his proposals. 
 
 The only products of the farmer, the marketing of which was not 
 greatly interfered with by the excessive costs of land transportation, 
 were his live-stock. The whisky rebellion had given a great impetus 
 to the business of stock-raising in western Pennsylvania, and the 
 industry had readily taken root in all parts of the Ohio Valley. The 
 abundance of mast in the large forests and later the cheapness of corn 
 made hog-raising in particular a profitable occupation in Ohio, Ken- 
 tucky, and Indiana. Until after 1812 many of the cattle and hogs of 
 the West were driven to Baltimore and Philadelphia to be slaughtered 
 for the domestic and foreign provision trade and to supply hides for 
 the manufacture of leather goods in New England. It was estimated 
 that over 100,000 hogs were driven east annually from Kentucky alone; 
 herds of several hundred cattle and droves of 4,000 to 5,000 hogs were 
 no uncommon sight to travelers on the highways leading across the 
 mountains to the eastern markets.^ 
 
 The manufactures of the United States, which had grown but slowly 
 since 1790, were tremendously stimulated Jjy conditions resulting from/ 
 the interruption of foreign trade in 1808 and 1809. Not only were 
 importations reduced, but a great deal of capital was transferred from 
 commercial operations to manufacturing. Scores of people in Massa- 
 chusetts, Rhode Island, and other States turned from the sea to secure 
 their livelihood in the new establishments erected for the manufacture 
 of cotton and woolen goods, iron, wood, glass, hardware, leather, and 
 pottery. In 1810 the census marshals returned $127,694,602 as the 
 total value of the manufactures of the United States,* one-half of which 
 amount was credited to the three States of Pennsylvania, New York, 
 and Massachusetts. Tench Coxe estimated the value of all manufac- 
 tures of the United States, including those of the households, at 
 $198,000,000. Sixty-two cotton factories, turning 80,000 spindles,: 
 contributed $4,000,000 of this amount, and the woolen factories were 
 turning out a considerable product. The New England States were 
 taking the lead in the new textile industries; their purchases of raw 
 
 'McMaster, History of the People of the U. S., Ill, 465. 
 » 'Turner, Rise of the New West, 101. 
 
 'Bishop, History of American Manufactures, II, 163. 
 
212 History of Domestic and Foreign Commerce. 
 
 cotton from the South grew steadily, while their demand for wool 
 induced the owners of the rocky hillside farms of Vermont, New Hamp- 
 shire, and Massachusetts to turn their attention to sheep-raising. 
 Pennsylvania led in the production of iron, having 44 blast furnaces, 
 78 forges, 18 roUing and slitting mills, and 175 nail factories, making 
 nails by machinery.^ Pittsburgh manufactured cast-iron kettles for 
 the sugar plantations of Louisiana and produced annually 200 tons of 
 nails, part of which were shipped to New York by way of New Orleans. 
 
 ^ THE WAR OF 1812 AND THE GROWTH OF THE WEST, 
 
 The foreign complications in which the United States was involved 
 finally culminated in the war of 181 2. The depression of foreign trade 
 and the blockade of most of the Atlantic coast compelled the people of 
 
 ' \the United States to depend upon their own resources to satisfy their 
 wants, and internal commerce was for the time greatly stimulated. 
 The coasting fleet was forced to remain in the harbors, and for the first 
 time a large part of the commerce between the North and the South 
 was carried on by land. Never was the need for better means of inland 
 transportation brought home more forcibly to the people. Domestic 
 I commodities commanded much higher rates than foreign goods of the 
 ' same kind during times of peace. The manufacturers of the North- 
 east, possessing a monopoly of the market and producing wares that 
 could be carried most cheaply, enjoyed a period of great prosperity. 
 The output of the cotton mills alone reached $9,000,000 in 18 15. New 
 England not being subjected to the blockade, practically all of the 
 foreign trade of the country was carried on through the port of Boston, 
 whose merchants during the early part of the war shared with the 
 manufacturers the high profits arising from war prices and a monopo- 
 Hzed trade. When the embargo of December 1 8 1 3 deprived Massachu- 
 
 ' setts also of its foreign trade, the mercantile interests added their 
 protests against the war to those of the shipping interests, but there 
 was little complaint from the manufacturers. 
 
 As a result of the centralization of trade around the importers and 
 manufacturers of New England, all the rest of the country was com- 
 jpelled to pay tribute to Boston, whose banks "cornered" nearly the 
 entire supply of available specie. In 18 14 there were $7,000,000 in 
 specie lying in the Boston banks, while the States south and west of 
 New England were practically stripped of metallic money. To make 
 up for the deficiency in a circulating medium, the banks resorted to the 
 expedient of issuing large sums of paper money. During 1814 the 
 unfavorable turn in the fortunes of war and a sharp attack on all paper 
 issues by the disgruntled Boston banking interests caused a great 
 depreciation in this credit currency and the nation suffered its first 
 
 \ severe financial panic; but the return of peace (early in 181 5) and the 
 
 'Coxe, Statement of the Arts and Manufactures of the U. S. of A. for 1810, pp. 49-51. 
 
Early Development of Internal Commerce. 213 
 
 revival of foreign commerce soon restored confidence and the next three 1 ^ 
 years brought an era of prosperity to nearly everyone, except to the 
 owners of the textile mills and iron manufactories along the eastern 
 coast, most of which were compelled to shut down on account of a 
 deluge of importations from England. The attempt made to relieve 
 the distressed manufacturers by the passage of the tariff of [816 was 
 apparently ineffectual, but their plight was for a time lost sight of in I 
 the return of "good times" to the rest of the people. 
 
 After the war, emigration to the West set in with a renewed vigor. 
 By 1820, Ohio, with a population of 581,434, had outstripped both 
 Kentucky and Tennessee, with 564,317 and 422,813 respectively. 
 The people of Indiana numbered 147,178, of Illinois 55,211. In the 
 South, Louisiana attained a population of 153,407, Alabama 127,901, 
 Mississippi 75,448, and Missouri (whose people were asking admission 
 into the Union) 66,586. The fertile stretches of virgin soil in the Ohio 
 Valley contributed an enormous product of grain, tobacco, fruit, and 
 hemp which continued to find an outlet down the Mississippi, and the 
 farmers increased their purchases of manufactured goods which flowed 
 into Pittsburgh from the East. Shipments to New Orleans were 
 stopped temporarily in 1813-14 by the stress of the war and the attack 
 on New Orleans by the British army, but after peace was declared ship- 
 ments became larger than ever. The receipts at New Orleans in 1816 
 amounted to $9,749,253,^ fully 60 per cent of which came from the 
 district north of Mississippi. 
 
 In 181 1 Fulton's great invention was introduced on the western — 
 waters, and in 18 17 the first steamboat voyage was made up the river ' 
 from New Orleans to Louisville. The effect of this new engine of I 
 commerce on the Mississippi trade was almost magical. The steam- 
 boat afforded a more efficient means of transporting products to the 
 southern markets; it enabled the flat-boat men to get home safely and 
 quickly after disposing of their cargoes and boats, and it made possible 
 the movement of freight up the river. The shipments up the Missis- 
 sippi, however, never attained more than one-half the volume of the 
 trade downstream, notwithstanding the ability of the steamboat to 
 stem the current of the water, and, with the exception of such bulky 
 articles as sugar and coffee and occasionally some heavy machinery, 
 very few commodities were sent as far north as the Ohio Valley, most 
 of the northbound traffic being destined for the planters of Louisiana 
 and Mississippi, who drew their stores from New Orleans. The value ■ 
 of the steamboat was reflected chiefly in the large increase of the traffic >^ 
 downstream. In 181 8-19, the first year after the steamboat became, ^ 
 an assured success, the receipts at New Orleans rose to 136,300 tons, 
 valued at $16,771,711, and the volume of exports of domestic products 
 from New Orleans was greater than that from any other city in the 
 
 ^Report on Internal Commerce of United Slates, 1887, p. 199. 
 
214 
 
 History of Domestic and Foreign Commerce. 
 
 country. Table 1 3 , showing the kinds and quantities of various articles 
 received at New Orleans in 1818, gives an idea of the importance of the 
 city as a market for the produce of the Western States.^ 
 
 The advent of the steamboat and the increase of population and 
 capital in the West made it unnecessary for the farmers to act as their 
 own merchants and transporting agents. The flat-boats gradually gave 
 way to steamboats, which by 1825 were carrying more than one-half 
 of the river traffic. The river cities of the Ohio Valley became the 
 markets for the produce of the surrounding country. The old practice 
 of driving hogs across the mountains to the seacoast was gradually 
 dropped and the hogs were sold at Cincinnati. This city, by 181 8, had a 
 population of 10,000 and because of its great pork-packing business 
 
 Table 13. — Quantities of commodities received at New Orleans, 1818. 
 
 Article. 
 
 Quantity. 
 
 Article. 
 
 Quantity. 
 
 Article. 
 
 Quantity. 
 
 Beans, bbls 
 
 Cotton, bales . . . 
 
 Sugar, hhds 
 
 Bacon, cwts. . . . 
 Pork: 
 
 Hhds 
 
 Bbls 
 
 3,643 
 65,223 
 21,115 
 18,620 
 
 813 
 
 22,225 
 
 4,000 
 
 5,142 
 
 306 
 1,825 
 2,150 
 
 520 
 
 145,200 
 
 4,350 
 
 Flour, bbls 
 
 Gin, galls 
 
 Ginseng, bbls . . . 
 
 Hay, tons 
 
 Hides, sides 
 
 197,620 
 
 50,250 
 
 1,200 
 
 40 
 
 6,200 
 
 1,200 
 
 412 
 
 6,738 
 1,126,500 
 4,200 
 4,220 
 426 
 3,550 
 3.200 
 
 Rice, bbls 
 
 Skins (bear). No. 
 
 Soap, boxes 
 
 Starch, boxes . . . 
 
 Tafia, galls 
 
 Tallow, cwts. . . . 
 
 Tar, bbls 
 
 Tobacco : 
 
 Hhds 
 
 Carrots 
 
 Manufactured, 
 
 boxes 
 
 Wax (bees), cwts. 
 
 Wheat, bush 
 
 Whisky, galls.... 
 
 9,265 
 
 3,000 
 
 2,576 
 
 125 
 
 42,026 
 
 206 
 
 837 
 
 8,642 
 1,600 
 
 154 
 
 320 
 
 95,650 
 
 256,610 
 
 Lard: 
 
 Bbls 
 
 Bark, cords 
 
 Beef, bbls 
 
 Beer, bbls 
 
 Butter, kegs. . . . 
 Candles, boxes . . 
 
 Cider, bbls 
 
 Corn, bush 
 
 Cordage, cwts. . . 
 
 Cwts 
 
 Molasses, galls . . 
 
 Oil, bbls 
 
 Onions, bbls .... 
 
 Paper, reams 
 
 Peltries, pkgs . . . 
 Pitch, bbls 
 
 was known everywhere as the "Porkopolis" of the United States. 
 Louisville was the center of the tobacco trade. St. Louis, the com- 
 mercial capital of the vast territory across the river, had a population 
 of S,ooo in 1820, and the large quantities of peltry and lead coming 
 from the trans-Mississippi region indicated that the subjugation of the 
 new West was well under way. At every city along the river there was 
 a shipyard, and steamboats were being constructed in increasing num- 
 bers at Pittsburgh, Cincinnati, and Louisville. In 1817 an $80,000 
 manufactory of steam-engines was established at Cincinnati, which the 
 first year turned out products to the market value of $130,000.^ Pitts- 
 burgh, with a population of more than 7,000, was one of the foremost 
 iron-producing centers of the country. 
 
 But even more important to the commercial prosperity of the West 
 than the introduction of the steamboat was the transformation being 
 efi^ected in the new Southern States. Cotton culture had been exceed- 
 ingly profitable in Georgia and South Carolina, and when it was found 
 
 ^Report on Internal Commerce of United Stales, 1887, p. 192. 
 ^Bishop. History of American Manufactures, II, 240. 
 
Early Development oj Internal Commerce. 215 
 
 that the rich bottom-lands of Alabama, Mississippi, and Louisiana 
 produced an even better grade of cotton than the upland districts of 
 South Carolina, there was a rush of settlers to the river valleys of the 
 new region. In 181 2 the sales of public lands in the Mississippi 
 territory amounted to 144,872 acres, the largest amount sold in a 
 single year up to that time. The sales were 490,873 acres in 18 16 and 
 617,090 acres in 1817.^ In 181 1 fifteen-sixteenths of the cotton pro- 
 duced in the United States was grown in Virginia, North Carolina, 
 South Carolina, and Georgia; in 1820 one-third of the total crop of 
 600,000 bales was raised in Alabama, Louisiana, Mississippi, and 
 Tennessee.^ In the western part of the cotton belt, as in the eastern 
 part, the planters devoted their capital and labor almost exclusively 
 to the production of cotton, relying on the region north of them for 
 provisions and live-stock. The market for the grain, pork, flour, and 
 other food products of the Ohio Valley was greatly enlarged, and 
 moreover it was a "home" market. A smaller and smaller proportion 
 of the shipments of provisions down the Mississippi reached New 
 Orleans, the flat-boat men finding it easy to dispose of their cargoes at 
 the wharves of plantations which lined the river for miles above the 
 city. Flat-boat stores peddled clothing, boots and shoes, household 
 furniture, hardware, and all kinds of agricultural implements from 
 village to village and plantation to plantation. Great droves of horses 
 and mules were driven into the Southern States in response to the 
 demand for draught animals to use in cotton culture, and the planters 
 bought from the North large quantities of hay and corn to feed their 
 live-stock, just as they bought the food for themselves and their slaves. 
 As the western farmers enlarged the volume of their sales to the 
 southern planters, they increased the number of their purchases from 
 the eastern merchants. The rise in the value of shipments of agri- 
 cultural produce down the Mississippi River was immediately reflected 
 by a corresponding rise in the value of receipts of manufactured goods 
 and merchandise coming to the West on the Pennsylvania, New York, 
 and Maryland turnpikes. A large part of the foreign importations of 
 the United States, which in 18 16 reached the unprecedented sum of 
 $155,000,000, was sold in the West. Attracted by the cheapness of 
 the goods off'ered for sale and full of confidence in their ability to meet 
 all debts with the proceeds of the lucrative southern trade, the people 
 indulged in extravagant over-trading. Purchases far exceeded sales 
 and the specie coming from the South was drained away as fast as it 
 was received; but dozens of new banks furnished a sufficient supply of 
 currency by copious issues of paper money, and the career of extrava- 
 gant buying proceeded. The internal trade of the country never had 
 been so prosperous. Birkbeck reported that 12,000 wagons came to 
 Pittsburgh from Baltimore and Philadelphia in 1817, bringing goods on 
 
 'Seybert, Statistical Annals, 364. ^Hammond, The Cotton Industry, pt. i, 247. 
 
2i6 History of Domestic and Foreign Commerce. 
 
 which the freight charges alone were £300,000.1 -j-^e delay of the peo- 
 ple of Pennsylvania in providing for the improvement of roads to the 
 West resulted in a loss by Philadelphia of a large part of the Pittsburgh 
 trade. Freight rates between the two cities were forced down to ^9.50 
 a hundredweight in 1817 and to $6.50 in 1818, but even then the rates 
 from New York to Pittsburgh were less by $1.50.2 When the new 
 National Road was opened from Cumberland to Wheeling in 181 8, 
 Baltimore deprived Philadelphia of still more of the western trade, and 
 Wheeling soon rivaled Pittsburgh as the entrepot of the Ohio Valley. 
 
 The people of western New York, still handicapped more severely 
 by the difficulties of transportation than the people farther south, did 
 not enjoy the same degree of prosperity. As long as there was no inland 
 waterway to the Hudson River, the farm and forest products of the 
 Genesee Valley were practically unmarketable. The clamor for a 
 canal between the eastern and western sections of the State redoubled 
 when the war of 18 12 interrupted the small commerce with Montreal, 
 and appeals were addressed to Congress to assist in the construction of 
 such a canal by appropriations of funds from the Federal treasury. 
 The appeals were ineffective, and despairing of receiving the expected 
 aid from the National Government, the people of New York, under the 
 leadership of De Witt Clinton, decided to construct the waterway at 
 their own expense. Work on a barge canal from Albany to Buffalo was 
 started in 18 17, and thus a beginning was made at last on the solution 
 of the problem of transportation between the East and the West. 
 
 THE PANIC OF 1819 AND ITS EFFECTS. 
 
 j The era of good times through which the United States seemed to be 
 (passing came to a sudden halt in 1819, when the nation was visited with 
 a disastrous money panic. Nearly all the specie in the country had 
 been shipped abroad to settle the large unfavorable balance of trade 
 that existed during the few years following the return of peace. The 
 administrators of the government finances had contracted the currency 
 still further by the withdrawal, between 1816 and 1819, of $24,000,000 
 of the treasury notes issued during the war. To counteract this unfor- 
 tunate step and make up for the loss of specie, banking institutions of 
 the South and West had emitted large amounts of paper money, some 
 of it on credit of a questionable nature. As the tide of internal com- 
 merce had risen, there had been a general expansion of business. 
 Buoyed up by the protection afforded by the tariff act of 18 16 and 
 expectant of further relief in case of need, many manufacturing inter- 
 ests had sunk more capital in their enterprises. Extensive investments 
 were made in canal and turnpike schemes that anticipated the needs 
 of a generation. 
 
 'Birkbeck, Notes on a Journey in America (3d ed.), 1818, p. 30. 
 
 'McMaster, Hist, of the People of the U. S., IV, 427. (McMaster refers to contemporary news- 
 papers as sources of information.) 
 
Early Development of Internal Commerce. 217 
 
 In 1 8 16 the new United States Bank had been chartered for the 
 express purpose of restoring the currency to a normal and satisfactory 
 condition. Instead of attempting to avert the approaching crisis by a 
 gradual replacement of the questionable issues of bank-notes with a 
 currency that would command confidence throughout the country, 
 the officers of the new bank, who had launched it into business without 
 complying with the provisions of its charter, began a vigorous campaign 
 against all other banks of issue, in an endeavor to force them to a 
 specie basis. ^ Considering the amount of specie in the country, 
 such an attempt was bound to end only in failure; but, as a result 
 of the pressure, banks everywhere began to call in their loans and 
 the per capita circulation was reduced from ^11.68 in 1817 to $7.74 
 in 1819. Confidence in all paper money was destroyed. Prices fell 
 at once, manufacturers and business men were unable to meet their 
 obligations, factories shut down, mercantile firms went into bank- 
 ruptcy, banks closed their doors, mortgages were foreclosed, debtors were 
 thrown into prison, and business all over the country was completely 
 prostrated. The few textile industries that had survived the competi- 
 tion with England after the war were ruined, the iron industries of 
 Pittsburgh and Cincinnati, some of which had not been disturbed by 
 the importations because of the protection afforded by high freight 
 rates and the increased duties of 1818, were compelled to close down 
 on account of the heavy fall in prices and the general depression. To 
 make matters worse, the export price of the great "money crop," 
 cotton, fell from 32 cents in 1818 to 17.5 cents in 1820, because of the 
 discriminatory tariff imposed by England and the increased competi- 
 tion of the Indian cotton-fields. The provision market of the western 
 farmers was greatly injured, and manufacturer, farmer, planter, and 
 merchant all succumbed before the general catastrophe. 
 
 The panic gave a sharp check to ruinous extravagance and over- 
 trading; importations declined; investments in visionary schemes of 
 internal improvements ended; prices were readjusted; and legitimate 
 business began to recover. After the depletion of the large surplus 
 stock accumulated during the wars of Great Britain with France and 
 the United States, English merchants and manufacturers restricted 
 their exportations to America and the American manufacturers quickly 
 recuperated from their temporary prostration. All the cotton mills 
 of the United States were soon at work. Every mill in Pawtucket 
 was in full operation by the middle of 1821; during the last six months 
 of that year, Philadelphia started 4,000 new looms; all the factories 
 of Paterson resumed work by 1822; a Boston company erected a mill 
 at Dover, New Hampshire, with a capacity of 20,000 spindles, and by 
 1823 the demand for American cotton cloth was larger than the manu- 
 
 'Dewey, "The Second United States Bank," in Publications National Monetary Commission, 
 IV, 1911. 
 
21 8 History of Domestic and Foreign Commerce. 
 
 facturers were able to meet.^ The supply of domestic wool was too 
 small to answer the needs of the woolen factories, whose owners were 
 compelled to import wool to keep their looms busy. As the manufac- 
 turing industries revived, internal commerce also recovered. In 1820, 
 3,000 wagons went from Philadelphia to Pittsburgh, carrying 
 $18,000,000 of merchandise; in 1822 one of the five commission houses 
 at Wheeling unloaded 1,081 wagons, each carrying an average freight 
 of 3,000 pounds, the total transportation charges being $90,000.^ After 
 a heavy slump for two years, the river trade of the West with the South 
 recovered, the receipts at New Orleans in 1821-22 amounting to 
 $15,126,420, and the fact that less than half of it came from the valley 
 of the Ohio indicated that the planters of the lower Mississippi were 
 intercepting a larger and larger percentage of the provisions that for- 
 merly went all the way to New Orleans. 
 
 -THE AMERICAN SYSTEM. 
 
 Notwithstanding the revival of manufactures and domestic com- 
 merce, the farmers of the grain-belt still found themselves in distressing 
 circumstances. The fertile soil of the great Ohio Valley was yielding 
 a product far in excess of the demand that existed for it, and each 
 year found an increasing amount of unthreshed or unmarketable grain 
 left in the fields and granaries. Foreign nations that profited by export- 
 ing their manufactured products to America refused admittance to 
 American grain and flour, and though the grain-producing capacity of the 
 United States had increased six-fold since 1790, the annual exports of 
 flour, beef, pork, and grain were but little more than the average for the 
 five years from 1790 to 1795. Of that which was exported, but very 
 little went to Europe, the chief foreign provision market being, as in colo- 
 nial days, the islands of the West Indies. The plantations of the South 
 were drawing much of their subsistence from the northern farms, but 
 they were unable to absorb more than a small fraction of the tre- 
 mendous surplus of meat and flour that was seeking a market. In 
 1824 corn could be bought at Cincinnati in any quantity for 8 cents a 
 bushel.^ Wheat yielded the farmer 25 cents a bushel; flour sold as low 
 as $1.25 per barrel. After the advent of low prices, the high costs of 
 transportation fell more heavily upon the farmer than before, a larger 
 proportion of the value of agricultural products being sunk in the 
 expense of carriage to market than of the value of any other commodities. 
 
 Agricultural interests sought urgently for relief. Since there was no 
 foreign market for their surplus, they resolved to create a domestic 
 market. If England would not buy the food products of the l/nited 
 
 ^NiUs' Register, XXI, 1821-22, p. 39; XXII, 1822, p, 67; XXIII, 1822-23, p. 291. Bishop. 
 History of American Manufactures, II, 268-89. 
 
 'Turaei, Rise of the New West, 100; Birbeck, Notes on a Journey in America, 39; Hulbert, 
 Historic Highways, X, 57. 
 
 'Niles' Register, XXVII, 1824-25, 123. 
 
Early Development of Internal Commerce. 219 
 
 States, the United States must refuse to purchase manufactured goods 
 from England, and by the establishment of extensive manufacturing 
 industries at home give rise to a non-agricultural population that would 
 consume the redundant supplies of meat and grain. Upon the growth 
 of domestic manufacturing industries depended the future welfare of 
 agriculture. The farming interest proposed to solve the problem of 
 attracting more capital to manufacturing enterprises by the erection of 
 a system of protective tariffs that would check foreign importations and 
 give encouragement to investments in mills and factories at home. 
 Manufacturing industries already in existence were in no apparent 
 need of more protection from foreign competition; the navigating and 
 shipping interests of Boston and New York and the cotton planters 
 of the South strenuously opposed the protective policy. But the 
 agricultural interests were not to be denied. Henry Clay, speaking 
 for the tariff bill of 1824, said:^ 
 
 "Our agricultural is our greatest interest. . . . We must speedily adopt a \ 
 genuine American policy. Still cherishing the foreign market, let us also 
 create a home market, to give further scope to the consumption of the produce 
 of American industry. . . . Let us suppose that half a million persons are 
 now employed abroad in fabricating for our consumption those articles of 
 which, by the operation of this bill, a supply is intended to be provided within 
 ourselves. That half a million persons are, in effect, subsisted by us; but their 
 actual means of subsistence are drawn from foreign agriculture. If we could 
 transport them to this country, and incorporate them in the mass of our own 
 population, there would instantly arise a demand for an amount of provisions 
 equal to that which would be requisite for their subsistence throughout the 
 whole year. That demand in the article of flour alone would not be less than 
 the quantity of about 900,000 barrels, besides a proportionate quantity of beef 
 and pork and other articles of subsistence. But 900,000 barrels of flour 
 exceeded the entire quantity exported last year by nearly 150,000 barrels. 
 What activity would not this give, what cheerfulness would it not communi- 
 cate to our own dispirited farming interest ! But if, instead of these 500,000 
 artisans emigrating from abroad, we give by this bill employment to an equal 
 number of our own citizens now engaged in unprofitable agriculture, or idle 
 from the want of business, the beneficial effect upon the production of our 
 farming labor would be nearly doubled. The quantity would be diminished 
 bythe subtraction of the produce from the labor of those who should be diverted 
 from its pursuits to manufacturing industry, and the value of the residue would 
 be enhanced, both by that diminution and the creation of the home market to 
 the extent supposed. ..." 
 
 Under Clay's leadership, the tariff of 1824 was enacted by the votes 
 of the grain-raising and manufacturing districts, and the "American 
 system" was inaugurated. In 1828, in response to an appeal, emanat- 
 ing this time from the woolen interests, who were unable to compete 
 with the English manufactories, and seconded by the agricultural 
 interests, who still found the supply of grain too large for the existing 
 
 'Speech in House of Representatives, March 30-31, quoted in Taussig, State Papers and 
 Speeches on the Tariff, 265, 267, 268; Callender, Economic History of the U. S., 501-503. 
 
220 History of Domestic and Foreign Commerce. 
 
 demand, still further encouragement and inducement were extended to 
 home manufactures. 
 
 . While the country was being agitated by the tariff controversies 
 and exceptionally bitter political contests, the New York canals, 
 reaching the St. Lawrence River by the valley of Lake Champlain, 
 and Lake Erie by the Mohawk Valley and the small lakes of western 
 
 i/ New York, were opened for traffic throughout their entire length 
 (October 1825). Thanks to the ability and persistent endeavors of 
 De Witt Clinton, the problem of transportation between the East and 
 
 >:: the West at last was solved by the opening of the Erie Canal. No 
 ! other single work in the United States has ever exerted a greater 
 influence on the prosperity of internal trade. An end was brought to 
 what had been the bane of internal commerce for a half century — the 
 excessive charges for freight transportation. Freight rates between 
 Albany and Buffalo were at once reduced 90 per cent and the day of 
 the freighter on the Genesee Road was gone forever.^ The new canal 
 wrought a complete transformation in all the rural districts of western 
 New York. Lumber, staves, ashes, grain, and vegetables, hitherto 
 unmarketable, were now shipped to the markets of the East; farm 
 values doubled and quadrupled; a stream of people poured into the 
 fertile farming regions; towns and villages sprang up all along the canal. 
 Not less valuable was the new waterway to the district at its eastern 
 terminus. The laboring population of the growing manufacturing 
 towns reaped immense benefits from the cheaper and better means 
 of subsistence they could now secure, while the shipments of domestic 
 and foreign merchandise to the western region exceeded in value even 
 the receipts of raw products at tidewater. New York had achieved 
 economic unity at a single stroke. In 1826, the first year of operation 
 of the entire canal, 302,170 tons were delivered at tidewater in New 
 York, and the tolls paid to the State on the entire canal traffic amounted 
 to $677,466. Statistics of the volume and value of shipments were not 
 kept until after 1835, but it is estimated that the annual value of traffic 
 averaged $15,000,000 during the period from 1825 to 1830. At the end 
 of that time tolls collected were more than $1,000,000 annually. 
 ^/ Meanwhile, the adoption of the "American system" had been followed 
 by a rapid growth of manufacturing in the North and West. New 
 England gradually turned from commerce and navigation to manufac- 
 turing, which became second only to agriculture in importance, and 
 though the transition was not complete in 1828, the evidences of the 
 transformation were sufficient to impel Daniel Webster to espouse the 
 cause of protection, and he spoke as vigorously in favor of the second 
 tariff measure as he had spoken in opposition to the first. By 1830, 
 the products of the woolen and cotton mills of the United States, most 
 of which were in New England, rose in value to $37,000,000, and 
 
 'Poor, "Railroads and Canals in the U. S.," in Andrews, Report on Colonial and Lake Trade, 234. 
 
Early Development of Internal Commerce. 221 
 
 the pig-iron product coming chiefly from Pennsylvania and New York 
 amounted to 195,000 tons.^ Philadelphia foundries were using the 
 "stone" coal, floated down the canals built for the purpose along the 
 Lehigh and Schuylkill Rivers. New cities, such as Lowell, Lawrence, 
 Paterson, and Newark, that owed their prosperity solely to manufac- 
 turing, began to rival in wealth and population the older commercial 
 cities of the North Atlantic States. In the West populous commercial 
 and manufacturing towns arose. Pittsburgh maintained its lead in the 
 iron industry, and the population of 12,500 was nearly double what it 
 had been ten years before; Cincinnati, with an annual product of manu- 
 factures of over $2,000,000, was the "Queen City" of the West, and her 
 population had grown to 25,000; Louisville with 10,000 people had more 
 than doubled in size during the past decade, and had several factories 
 making ropes, cotton and woolen cloth, and bagging of both hemp and 
 cotton. 
 
 To provide for the growing internal commerce arising from the 1 
 diversification of industry and the increase in production, improved 1 ^ 
 means of transportation were essential. There was a universal demand / 
 for more roads and canals. The widespread agitation of the time in 
 favor of government aid for internal improvements was as intimately 
 related to the "American system" as the appeal for protection of manu- 
 facturing industries. The National Government had built the 
 National Road, and though it engaged but little in the construc- 
 tion of other commercial highways, it gave extensive aid to private 
 and State enterprises by means of appropriations in the way of land- 
 grants and stock subscriptions. The individual States, unrestrained 
 by any considerations of constitutional authority, embarked in schemes 
 of canal and turnpike building which involved them in debts of millions 
 of dollars. Ohio and Indiana, realizing the value of the newly provided 
 outlet to the East, began to construct canals joining the Ohio River 
 and Lake Erie. Pennsylvania, awakened to the danger of the total 
 loss of western trade through the State by the fact that the shipments 
 of merchandise to the West were rapidly abandoning the wagon-roads 
 from Baltimore, Philadelphia, and New York in favor of the cheaper 
 route by way of the Erie Canal, began, in 1 826, an extensive system of 
 canals to connect Philadelphia with the Ohio River and the Great 
 Lakes. Not to be outdone by their rival States, Maryland and Virginia 
 agreed upon the construction of a canal from tidewater in the Potomac 
 River to the Ohio River, and on July 4, 1828, President Adams dug the 
 first spadeful of earth to signaHze the beginning of the undertaking. 
 Some financiers of Baltimore, dubious of the success of an effort to 
 build a waterway over the difiicult route adopted by the promoters of 
 the Chesapeake and Ohio Canal, withdrew their support from that 
 
 •U. S. Census 1900, Manufactures, pt. iii, p. 11; Pitkin, Slatislical View of the Commerce of the 
 United Stales. 494. 
 
222 History of Domestic and Foreign Commerce. 
 
 enterprise and, putting their confidence in a new and almost untried 
 transportation device, which they beHeved would prove superior to 
 canals, just as canals had proved superior to turnpilces, they boldly 
 inaugurated the plan of a railroad from their city across the mountains 
 to the Ohio, and Charles Carroll of Carrollton, placed the stone that 
 commemorated the beginning of its construction on the same day that 
 President Adams officiated at the rival celebration that marked the 
 beginning of the canal. 
 
 SUMMARY. 
 
 j Thus by 1830 it was certain that the internal commerce of the United 
 'States would develop upon a large scale. The territorial division of 
 labor already begun could have but one result — a tremendous expan- 
 sion of domestic trade. That this expansion had already commenced 
 was amply evident from the fact that notwithstanding the large growth 
 in wealth and population from 1820 to 1830, the imports of the United 
 f States had increased but slightly. "The nation was building an empire 
 ' of its own, with sections which took the place of kingdoms."^ New 
 England, New York, and Pennsylvania were manufacturing the clothing 
 and iron utensils for the West and South, and the rising tide of foreign 
 immigration was swelling the population of the eastern manufactur- 
 ing centers. The South was still absorbed in cotton raising, but more 
 than half of the crop was now being raised in Alabama, Mississippi, 
 Louisiana, and Tennessee, and the fine of plantations was creeping up 
 the Arkansas and Red Rivers, while many planters were moving with 
 their slaves and cotton gins over into the rich coastal plain of Texas. 
 The people of the entire South relied upon the West for their food 
 and Hve-stock; they bought their clothing and machinery from the 
 North Atlantic States, and their exports, which comprised more than 
 two-thirds of the exports of the entire United States, brought in the 
 specie that facilitated the commerce of all sections. The West was 
 a vast granary. Its new factories were drawing artisans from the East 
 and taking laborers from the country to the cities, thus swelling the 
 demand for the flour and grain that had recently been seeking in vain 
 for a market. The volume of shipments of provisions and merchan- 
 dise down the Mississippi was larger than ever and the manufacturing 
 population of the East, already too large to be fed by the agricultural 
 produce of New England, New York, and Pennsylvania, was beginning 
 to draw its subsistence from the western farms. 
 
 Means of cheap transportation, the lack of which had been such an 
 obstacle to internal development, had been or were being supplied to 
 meet the requirements of the new conditions. Nearly a thousand 
 steamboat arrivals annually at New Orleans, now a city of 50,cxxD, and 
 the hundreds of flat-boats floating down the river indicated that the 
 
 'Turner, Rise of the New West, 297. 
 
Early Development of Internal Commerce. 223 
 
 Mississippi system still carried the largest portion of the nation's 
 internal commerce. Water communication between the Atlantic Ocean 
 and the interior of the United States was estabhshed when the Erie 
 Canal connected the Hudson River to the waterways aflForded by the 
 series of great inland seas, and settlers were swarming into Michigan 
 and northern Ohio, Indiana, and Illinois, eager for the conquest of the 
 new lands, whose tremendous resources would soon double the volume of 
 the commerce of the nation. There were 1,348 miles of canals in opera- 
 tion in all the United States, and 1,828 miles more in the process of 
 construction. Louisville was rejoicing in the completion of a canal 
 around the falls of the Ohio. Ohio and Indiana were rapidly pushing 
 the work on their canals that were to tap the regions hitherto tributary 
 only to the Mississippi; the construction of the Pennsylvania Canal 
 was being hurried forward to enable Philadelphia to get back the trade 
 diverted by the building of the Erie Canal, and Maryland and Virginia 
 were persistently going on with the building of the waterway westward 
 from Washington City. Meanwhile, 44 miles of railway had been com- 
 pleted and were in operation in 1830. That confidence in the new 
 device was not lacking was shown by the fact that 422 miles were in 
 the process of construction and 697 miles more were already projected. 
 
CHAPTER XIV. 
 EXPANSION OF INTERNAL COMMERCE. 1830 TO 1860. 
 
 Increased area and population of United States, 224. Development of industries, 
 225. Growth of manufactures, 226. Extension of transportation facilities, 227. 
 Trade of Eastern with Central States via Erie Canal and Great Lakes, 230. The 
 grain trade, 230. Development of the Great Lakes district, 234. Trade on the 
 Pennsylvania Canal system, 235. Trade via the railroads between the East and 
 West, 237. Growth of inland commerce in the Southern States, 240. Internal 
 trade between the North and the South, 241. Active period of the river trade, 241. 
 The commerce of the Mississippi Valley, 242, of New Orleans, 243, of St. Louis, 
 243, of Cincinnati, 244. Diversion of traffic from the Mississippi River to the 
 eastern railroads, 247. The domestic slave trade, 248. The internal trade of the 
 far West, 248. Summary, 250. 
 
 The years between 1830 and i860 witnessed a remarkable expansion 
 of the United States in area, population, and wealth. At the beginning 
 of the period the gross area of the country, which had been increased 
 once since the acquisition of Louisiana, by the purchase of Florida in 
 1819, was 1,792,223 square miles. By the annexation of Texas in 
 1845, a vast tract containing 376,000 square miles was acquired and the 
 settlement of the Oregon dispute during the following year resulted 
 in the addition of 285,000 square miles more. The treaties with 
 Mexico in 1848 and 1853 secured to the possession of the United States 
 the immense territory of 573,000 square miles lying between Texas and 
 the Pacific Ocean, bringing the total area of the national domain up to 
 3,026,000 square miles. 
 
 At the end of each decade of the thirty years the population of the 
 entire country was found to have increased a third or more over what 
 it had been ten years before, the total number of people rising from 
 12,866,020 in 1830 to 31,443,321 in i860. The increase was not 
 uniform in the different sections. The South Atlantic States showed a 
 percentage of increase for the entire period that was less than half the 
 percentage of total increase, and the North Atlantic States also failed 
 to keep up with the country as a whole. The southern division of the 
 Central States, including Alabama, Mississippi, Louisiana, Texas, 
 Arkansas, Tennessee, and Kentucky, had an increase of more than 40 
 per cent during each decade between 1830 and 1850, and an increase 
 of 34 per cent between 1850 and i860. In the northern division of the 
 Central States there was a most remarkable growth of population. 
 This section, made up in 1830 of Ohio, Indiana, Illinois, Michigan, and 
 Missouri, had a population of 1,610,473. Including the partly settled 
 territories of Wisconsin and Iowa, this group had, in 1840, a population 
 of 3>3Si>S42> an increase of more than 100 per cent. The number of 
 people in Indiana in 1840 (685,866) was almost exactly double what it 
 had been ten years before; the number in Illinois (476,183) was three 
 times as great, the population of Missouri had more than doubled; and 
 that of Michigan (212,267) increased nearly seven-fold. By 1850, the 
 224 
 
Expansion of Internal Commerce, i8jo to i860. 225 
 
 entire section, including Minnesota, had 5,403,595 people, an increase of 
 61 percent in ten years, and by i860, with Kansas, Nebraska, and Dakota 
 added to the group, the number was 9,076,716, an increase of 68 per cent 
 since 1850. One State, Ohio, had more than 2,000,000, and three 
 others, Indiana, Illinois, and Missouri, each had more than 1,000,000 
 people. The Far West was very sparsely populated at the time of its 
 acquisition by the United States, but the discovery of gold in California 
 was followed by a rush of settlers, and by i860 the western section had 
 a population of 618,796, two-thirds being in the State of California.^ 
 
 DEVELOPMENT OF INDUSTRIES. 
 
 The opportunities afforded by the fertile lands of the Mississippi 
 River and the Great Lakes to the thousands of settlers flocking to that 
 region enabled agriculture to maintain its prominence among the in- 
 dustries of the country. More than one-half of the total wealth of 
 the nation, which was estimated to be more than $7,000,000,000 in 
 1850,^ was made up of the value of farms and farm property,^ and of a 
 total of $16,000,000,000 in i860 the farms contributed just a little less 
 than half. Corn was by far the most valuable agricultural product, 
 though not as important an article of trade as wheat. The statistics of 
 production showed a yield in 1840 of 377,000,000 bushels of corn,* in 
 1850 of 592,000,000 bushels, and in i860 of 839,000,000.^ Tennessee 
 held first place in the production of corn in 1840, but in 1850 Ohio, 
 Kentucky, Illinois, and Indiana were the foremost producing States, 
 and in i860, Illinois ranked first with a crop of 115,000,000 bushels, 
 while Ohio, Missouri, and Indiana came next, each with a little more 
 than 71,000,000 bushels.® The production of wheat advanced from 
 84,000,000 bushels in 1840 to 173,000,000 bushels in i860.'' In the 
 former year. New York, Ohio, and Pennsylvania were the leading 
 wheat-producing States and again in 1850 these three States led, with 
 Pennsylvania first and New York third, but in i860 Illinois led in the 
 production of wheat as well as in the production of corn, and Indiana, 
 Wisconsin, and Ohio held in order the next three places.^ The only 
 other cereal of great importance was oats, the production of which 
 grew from 123,000,000 bushels in 1840 to 172,000,000 bushels in i860, 
 nearly all of which was produced in the Central and Middle Atlantic 
 States.^ In i860, the crop of rye amounted to 21,000,000 bushels.^" 
 Hay was one of the most important agricultural products, ranking in 
 value next to corn, wheat, and cotton. In the South, cotton continued 
 
 'For growth of population of the United States, see U. S. Census 1910, I, 30-35. 
 '^Statistical Abstract of United States, 1911, p. 702. ^Ibid., 732. 
 
 ^DeBow, Statistical View of the United States (U. S. Census 1850, Compendium), 174. 
 'U. S Census 1860, Agriculture, xlvi. 'Ibid., xlvii. 
 
 'DeBow, Ibid., 174; U. S. Census 1860, Agriculture, xxix. 
 'DeBow, Ibid., 171; U. S. Census 1860, Agriculture, xxix. 
 'DeBow, Ibid., 174; U. S. Census 1860, Agriculture, Ixiv. 
 "U. S. Census 1860, Agriculture, lix. 
 
226 History of Domestic and Foreign Commerce. 
 
 its sway, the production increasing very rapidly from 732,000 bales of 
 SCO pounds each in 1830 to 1,348,000 bales in 1840, 2,136,000 bales in 
 1850, and 3,841,000 bales in 1860.^ Mississippi was the leading cotton 
 State in 1840 and again in i860, with Alabama, Louisiana, and Georgia 
 the nearest competitors in the latter year. South Carolina held fourth 
 place in 1850, but ten years later was surpassed by both Texas and 
 Arkansas. In addition to being one of the chief cotton-producing 
 States, Louisiana was practically the only sugar-producing State of 
 the Union, its cane plantations yielding an average annual product 
 of more than 300,000,000 pounds of sugar between 1850 and i860. 
 
 The live-stock of the entire country increased in value from 
 ^545,180,516 in 1850 to $1,089,329,915 in 1860,^ half of it belonging 
 to the farmers of the Central States, in which the great corn fields were 
 to be found; 7,000,000 head of horses and mules worked on the farms 
 and plantations; 25,000,000 cattle furnished large quantities of beef, 
 hides, and tallow, as well as over $100,000,000 worth of dairy products 
 each year; 22,000,000 sheep provided wool for the eastern mills, and 
 33,000,000 swine fattened on the great crops of corn. The value of 
 animals slaughtered for meat in 1850 was $111,000,000, and by i860 
 it had risen to $213,000,000. 
 
 The exploitation of the mineral resources of the country increased 
 slowly but steadily. From 285,779 tons of coal mined in 1830 the 
 quantity grew to 13,044,680 tons in 1860,^ nearly two-thirds of which 
 was from the anthracite fields of Pennsylvania. The iron mines of 
 that State turned out 500,000 tons of ore in 1850 and more than 
 1,000,000 tons in i860, and in the latter year four other States, Ohio, 
 New York, New Jersey, and Michigan, were each producing annually 
 more than 100,000 tons.'* Copper production, which amounted to 
 100 tons in 1845, rose to 7,200 tons by i860, in which year nearly 
 $2,000,000 worth of domestic copper and copper manufactures were 
 exported abroad.^ The lead mines, the most important of which were 
 in Wisconsin, Illinois, and Missouri, had an output of 15,000 tons in 
 i860. The production of oil began in 1859 and during the following 
 year 21,000,000 gallons flowed from the wells of the Pennsylvania 
 field.^ Gold was found in California in 1849, and for the next ten 
 years an annual average quantity of $55,000,000 was washed from the 
 gravels of the Western States.^ 
 
 Manufacturing industries shared the general prosperity, although 
 the tariff" was reduced practically to a revenue basis in 1846. The 
 total value of manufactured products, including also the value of 
 minerals, amounted to $1,019,107,000 in 1850,* more than twice 
 
 ^SlalisHcal Abstract of the United States, 1911, pp. 734, 138. 
 
 'U. S. Census 1860, Agriculture, cxxvi. 
 
 'Ibid., cxliii; Statistical Abstract of United States, 1911, p. 735. 
 
 *Monlhly Summary of Commerce and Finance, August 1900, p. 209. 
 
 ^StatisticalAbstractofUnitedStates, 1911, pp.735, 731. 'Ibid., 736. Ubid., 734. 'Ibid.,73S 
 
Expansion of Internal Commerce, l8jo to i860. 227 
 
 the value given by the census figures ten years previously, and in 
 i860 the amount rose to $1,885,862,000,^ a sum which exceeded the 
 value of the agricultural production of that year. In 1850, the value of 
 the flour and meal manufactured was over $100,000,000, and boots and 
 shoes, cotton goods, and lumber products were each valued at more 
 than $50,000,000. The manufacturing industries, the value of whose 
 product in i860 was more than $15,000,000, were, in order of import- 
 ance: flour and meal, cotton goods, sawed lumber, iron and its manu- 
 factures, boots and shoes, men's clothing, leather and skins, woolen 
 goods, miscellaneous machinery, sugar refining, provisions, printing 
 and publishing, carriages, distilled liquors, furniture and cabinet 
 wares, tobacco and snufF, malt liquors, paper, soap and candles, oil, 
 agricultural implements, bread and crackers, hats and caps, tin, copper 
 and sheet-iron wares, marble and stone work.^ Cotton goods were 
 produced to the amount of $1 16,000,000 in i860, and woolen goods, the 
 production of which had increased but little between 1810 and 1840, 
 amounted to $43,000,000 in 1850 and $73,000,000 ten years later. The 
 three leading manufacturing States, in order of importance, were New 
 York, Pennsylvania, and Massachusetts. Ohio held fourth place, 
 being especially prominent in the production of animal products, and 
 agricultural implements and machinery. The sectional localization, 
 which had been apparent in 1830, was much more pronounced in 
 i860. The manufacture of boots and shoes and cotton and woolen 
 goods was carried on chiefly in New England ; Pennsylvania led in coal 
 and iron production, while New York's chief manufacturing interests 
 were in flour, men's clothing, sugar refining, and leather.^ 
 
 EXTENSION OF TRANSPORTATION FACILITIES. 
 
 The development of the interior region of the country was accom- 
 panied by the construction of transportation facilities to care for the 
 expanding internal trade. The success of the Erie Canal gave a great 
 stimulus to the building of artificial waterways throughout the Northern 
 States both east and west of the Alleghenies, and before 1837 more than 
 $100,000,000 was invested in various canals. The Ohio Canal between 
 Portsmouth and Cleveland was opened in 1832; in 1834, Pennsylvania 
 completed the main-line improvement connecting Philadelphia and 
 Pittsburgh, a remarkable transportation system made up of a railroad for 
 horse or locomotive traction, two stretches of canal, and a system of 
 inclined planes by which canal-boats were drawn across the crest of the 
 mountain range by stationary engines.* The Wabash and Erie Canal, 
 extending from Toledo down into Indiana, was finished to Evansville on 
 the Ohio River in 1851, and the Miami Canal, between Cincinnati and 
 Dayton, which had been opened in 1829, was pushed northward to 
 
 lU. S. Census 1860, Manufactures, 742. Hbid., 733-742. 
 
 'See tables for vEirious states in U. S. Census 1860, Manufactures, II, 742. 
 
 ^Bishop, The State Works of Pennsylvania. 
 
228 History of Domestic and Foreign Commerce. 
 
 connect with the Wabash and Erie in 1845. A New Jersey corporation 
 opened a waterway between the Raritan and Delaware Rivers in 1838, 
 and by using the ship-canal built between the Delaware River and 
 Chesapeake Bay in 1829, it was possible for small vessels to go from Bal- 
 timore to New York almost without touching the waters of the ocean. 
 The Canadian government built the Welland Canal in 1833 and the 
 State of Michigan finished the locks at Sauk Ste. Marie in 1855, thus 
 removing the last obstacle in the way of navigation from the western 
 extremity of the Great Lakes to the Atlantic seaboard. In 1848, the 
 Illinois River was connected with Lake Michigan at Chicago, and a 
 canal across the portage between the Fox and Wisconsin Rivers gave 
 an all-water route from Green Bay to New Orleans along the path 
 followed by the adventurous Marquette in his voyage down the 
 Mississippi two centuries before.^ 
 
 Railroads quickly manifested their usefulness as a means of trans- 
 portation, and by the close of this period the railway traffic of the 
 country exceeded that of all the inland waterways combined. In the 
 States along the Atlantic Ocean, the steam railway grew steadily 
 in favor from the time of its origin, and by 1840 over 2,500 miles of track 
 was laid east of the Alleghenies. The following ten years witnessed 
 a continuation of the growth of railway mileage in the East, but the 
 total number of miles in the Northern Central States in 1850 was only 
 a little more than 1,000. The decade from 1850 to i860, however, 
 brought a great augmentation of the railway mileage of the Central 
 States. In the northern section, 10,000 miles of track were laid, 
 uniting the cities of the Great Lakes with those on the Ohio and Mis- 
 sissippi Rivers, and connecting the entire section with the western 
 termini of the eastern roads. In the South, a set of roads was con- 
 structed northward from the Gulf of Mexico to carry the traffic of the 
 cotton-belt. Early in the decade the trunk lines of the Eastern States 
 were pushed across the mountains and through railway connection over 
 several lines was established between the Mississippi Valley and the 
 Atlantic Ocean. The Western and Atlantic road connecting Charles- 
 ton and Savannah with Chattanooga afforded the first railroad route 
 across the highland in 1849. In 1850, the New York Central made 
 through connection with the Great Lakes, and the next year the Erie 
 was completed to Dunkirk. The Pennsylvania Railroad, following 
 the route of the main line of the Pennsylvania Canal, was opened to 
 Pittsburgh in 1852, and the ambitions of the men that had inaugurated 
 the building of the Baltimore and Ohio road a quarter of a century 
 before were realized in 1853, when that line was finished to Wheeling. 
 Chicago was connected with New York by a direct rail route in 1853, 
 and St. Louis in 1855, and, by 1858, one railroad reached the Mis- 
 souri River. Thus by i860 there was ample railway connection among 
 
 'DeBow, Resources of the Southern and Western Stales, II, 458. 
 
MAP 2. 
 
 Digitized by IVIicrosoft® 
 
Expansion of Internal Commerce, 18^0 to i860. 229 
 
 all the States east of the Mississippi, and two States west of that 
 river, Missouri and Iowa, each had more than 500 miles of roads in 
 operation. There was a total of 30,626 miles of railway in the entire 
 country. Of this amount the North Central States had more than a 
 third, the number of miles in Ohio, Indiana, lUinois, Wisconsin, Iowa, 
 and Missouri being more than 11,000, while the North Atlantic States 
 stood second in the amount of railway mileage. Ohio stood first among 
 the States with 2,946 miles, and lUinois second with 2,790. One other 
 State west of the AUeghenies, Indiana, had more than 2,000 miles, and 
 the mileage of Pennsylvania and New York also exceeded that figure.^ 
 The growth of the population, wealth, and transportation facilities 
 of the United States from 1830 to i860, a brief outHne of which has 
 just been given, was accompanied naturally by a large increase in the 
 volume of internal commerce. Moreover, there was a decided change 
 in the course of the flow of commodities bought and sold. With the 
 completion of canals and railroads connecting the interior of the 
 country with the eastern coast, the internal commerce lost the peculiar 
 triangular character which distinguished it during the preceding period. 
 The North-Central States, which formerly had been almost wholly 
 dependent on the southern cities and plantations for a market, began 
 to send their agricultural products directly to the Eastern States for 
 consumption and exportation, but at the same time they expanded 
 their shipments to the South, where the increasing population of the 
 cotton-belt created a larger demand for food and live-stock. The 
 Northern States, both east and west of the AUeghenies, in all of which 
 manufacturing had a considerable growth, exchanged their products 
 with each other and both sections sold manufactured goods to the 
 South, where agriculture continued to be practically the sole interest. 
 The South, in turn, sold large quantities of its agricultural products to 
 all the Northern States. The internal commerce of the country, during 
 this period, consisted of a few well-defined currents of trade flowing 
 between certain sections. A large volume of products went from the 
 Central to the Eastern States and a trafiic of less volume but of greater 
 value moved in the reverse direction. There was a heavy internal 
 movement of commodities from the Northern to the Southern and a 
 light movement from the Southern to the Northern States. Aside ' 
 from the trade among these sections, there was an overland trade by 
 pack-horse and wagon with the Far West, which became of particular 
 importance after the discovery of gold. For the sake of greater clear- 
 ness, these difi^erent currents of trade between the various sections will 
 be considered separately and in order as follows: (i) the internal trade 
 between the Eastern and Central States; (2) the internal trade between 
 the North and the South; and (3) the internal trade with the Far West. 
 
 'For growth of raUway mileage in the United States see Statistical Abstract of United States, 1911. 
 p. 280; Poor's Manual of Railroads, 1868-69, p. 20. 
 
230 History of Domestic and Foreign Commerce. 
 
 TRADE OF EASTERN WITH CENTRAL STATES VIA ERIE CANAL AND GREAT LAKES. 
 
 One of the notable features of the internal commerce of the United 
 States after 1830 was the rise of trade on the Great Lakes. Before the 
 construction of the Erie Canal there was but little commerce on the 
 lakes aside from occasional shipments of stores and provisions to the 
 scattered military posts on the frontier and a small local trade on the 
 waters of Lake Ontario. After the opening of the canal there was a 
 large and steady migration of people to the farming lands of the lake 
 district. In the course of a few years thousands of acres of woodland 
 were cleared and put under cultivation, the center of cereal production 
 shifted rapidly westward, and hundreds of shiploads of grain and 
 lumber were borne over the great inland seas toward the eastern 
 markets. Previous to 1830, practically all the eastbound traffic of the 
 Erie Canal originated within the State of New York, but in 1835, the 
 first year for which statistics were collected, flour and wheat equivalent 
 in amount to 268,259 barrels of flour,^ from States west of New York, 
 arrived at tidewater by way of the canal, as compared to 868,561 
 barrels from the State of New York, and in 1839 the shipments of grain 
 and flour from the Western States to the Hudson River, amounting to 
 683,000 barrels of flour, exceeded the New York shipments.^ The 
 following year the quantity arriving at tidewater from the Western 
 States rose to 1,066,740 barrels of flour, and, increasing steadily, it 
 grew to 3,084,959 barrels in 1850 and 4,344,387 barrels in 1860.^ 
 
 Ohio was the first of the States west of New York to export grain via 
 the lakes. The district along the southern shore of Lake Erie was 
 naturally the first part of the lake region to be occupied by the incoming 
 settlers, and it was the surplus produce of the farms in the northern 
 counties of Ohio that comprised the earliest shipments of western grain 
 through the Erie Canal to the Hudson River. By 1835, wheat and 
 flour from northeastern Indiana were finding their way to the eastern 
 markets through the port of Toledo, and the city of Detroit was begin- 
 ning to export the agricultural and forest products collected from the 
 lands of eastern Michigan. In 1836, the first shipment of grain from 
 Lake Michigan was recorded, a cargo of 3,000 bushels of wheat from 
 Grand Haven to Buff^alo.^ Two years later, a shipment of 78 bushels 
 of wheat from the western shore of Lake Michigan marked the begin- 
 ning of the exportation of Illinois grain over the Great Lakes and the 
 inauguration of the cereal trade of Chicago,^ and in 1841 the first 
 exportation of wheat from Wisconsin left the harbor of Milwaukee.^ 
 
 The growth of the grain trade on the lakes was exceedingly rapid. 
 As soon as the Ohio Canal was completed between Portsmouth and 
 Cleveland (1832), a part of the surplus grain of Pennsylvania, Ken- 
 
 ^Monlhly Summary of Commerce and Finance, Jan. 1900, p. 1969. 
 'U. S. Census 1860, Agriculture, cxlvi. 'Ibid., cxlvii. 
 
Expansion of Internal Commerce, i8jo to i860. 23 1 
 
 tucky, and southern Ohio, which formerly had been shipped down the 
 Mississippi River, was diverted to the eastern route to the coast, and as 
 early as 1838 the receipts of wheat and flour at Bufi^alo were greater 
 than the receipts at New Orleans.^ The Mississippi was no longer the 
 sole outlet of the great central valley, and in the course of a few years 
 the grain trade on the lakes far outstripped that on the river. In 
 1842, the shipments of food products from Cleveland alone, valued at 
 $4,431,000, were as large as the shipments from New Orleans.^ 
 
 The repeal of the EngHsh Corn Laws in 1846 gave a great stimulus to 
 the cereal production and trade of the United States by opening a larger 
 foreign market for American grain. As the population of the Central 
 States increased and canals and railroads were built to connect the 
 farming districts of the interior with the cities on the lakes, the ship- 
 ments of grain from the newly settled regions swelled in volume, and 
 the amount sent eastward was constantly augmented by the increasing 
 diversion of traffic from the southern markets. By i860 the total 
 receipts of grain by lake at Buffalo, Dunkirk, Oswego, Ogdensburg, and 
 Cape Vincent amounted to 61,428,693 bushels,^ including 2,063,339 
 barrels of flour, 29,000,000 bushels of wheat, and 18,000,000 bushels 
 of corn. Buffalo always received the largest part of the grain shipped 
 over the lakes, and the receipts at that city off"er a fair index of the 
 growth of the lake traffic in grain and flour. In 1836, a total of 
 1,239,531 bushels of grain entered this city, and the receipts increased 
 thereafter as follows:* 5,542,525 bushels in 1841, 13,366,167 bushels in 
 1846, 17,740,781 bushels in 1851, 25,753,967 bushels in 1856, 37,053,115 
 bushels in i860. One barrel of flour equals 5 bushels of wheat. 
 
 The superior transportation advantages possessed by Ohio in the 
 two canals extending through the State from the Ohio River to Lake 
 Erie and a third canal from Toledo to Evansville, Indiana, enabled 
 that State to maintain its lead in the grain trade of the lakes for nearly 
 a score of years, but it lost its position when the numerous railways 
 constructed in Indiana, Illinois, and Wisconsin began to carry produce 
 from the interior of those States to the ports of Lake Michigan. An 
 example of the effect of the new railroads was afforded by the Galena 
 and Chicago Union Railway, built in 1849, which in a single year 
 (1852) brought 1,658,725 bushels of grain to Chicago.^ Illinois soon 
 obtained the lead in the exportation of grain and flour, the shipments 
 from Chicago rising from less than 2,000,000 bushels in 1850 to more 
 than 20,000,000 bushels in 1858;^ Wisconsin, too, surpassed Ohio in 
 the amount of agricultural produce sent eastward.^ In i860, the total 
 
 ^U. S. Census 1860, Agriculture, cxlviii and clvi. 
 
 "DeBow, Resources of the Southern and Western States, III, 506. 
 
 ^Statistics of Foreign and Domestic Commerce, 1864, p. 159. 
 
 ^Monthly Summary of Commerce and Finance, Jan. 1900, p. 2015. 
 
 'U. S. Census 1860, Agriculture, cxlvii. ''Ibid., cxlix. 
 
 'Callender, Economic History of the United States, 323. ' 
 
23 2 History of Domestic and Foreign Commerce. 
 
 shipments of grain from all the ports on Lake Michigan amounted to 
 43,211,448 bushels,^ which was more than double the amount shipped 
 from the diflFerent ports on all the other lakes. The grain trade on 
 Lake Superior during this period wa:s almost negligible. In 1855, 
 about 10,000 barrels of flour passed through St. Mary's Falls Canals 
 and during the six years from 1855 to i860 the total amount of produce 
 passing through the canals amounted to less than 150,000 barrels of 
 flour and 275,000 bushels of grain other than wheat.^ No wheat was 
 shipped from Lake Superior ports until 1870. 
 
 Though grain and flour constituted the most important part of the 
 products moving eastward over the Great Lakes, there was at the same 
 time a considerable trade in other articles. Large quantities of pork, 
 bacon, and other provisions were transported to Buffalo for the eastern 
 trade. The receipts of provisions at Bufi^alo by lake in 1854, the year 
 in which they reached a maximum, included 147,898 barrels of pork, 
 56,997 barrels of beef, 20,445,400 pounds of bacon, and 13,575,660 
 pounds of lard.^ The lumber trade on the lakes was also very large, 
 though only a small part of the lumber received at the primary lake 
 markets found its way to the East, most of it being retained for building 
 operations in the rapidly growing cities and towns of the Central States. 
 Millions of feet of lumber were sent from the forests of Michigan and 
 Wisconsin to the ports of Illinois and Ohio. A large part of it was used 
 in these cities and most of the remainder shipped by railroad and canal 
 to the cities of the interior. The receipts at Bufi^alo, in i860, however, 
 amounted to more than 100,000,000 feet of lumber (half of which came 
 from Michigan) and 23,000,000 staves.* The lake trade in live-stock 
 never attained large proportions. By the time stock-raising had 
 reached an advanced state in the lake district, the railroads, which 
 were better adapted than lake vessels to the transportation of cattle 
 and hogs, were able to bid for and secure the traffic. The lake receipts 
 of live-stock at Buffalo reached a maximum in 1852, and even for that 
 year consisted of only 16,000 cattle, 171,000 hogs, and 16,000 sheep. ^ 
 Hides, wool, and whisky formed a considerable part of the minor 
 articles of lake traffic, and after 1850 soft coal was shipped from Ohio 
 through Buffalo to central and eastern New York. The shipping of 
 copper from Lake Superior began in 1845, when 1,300 pounds were sent 
 east. This commodity soon became one of the valuable articles of the 
 lake trade, the shipments amounting in i860 to 8,614 tons, valued at 
 $2,520,000.^ The iron mines of the Lake Superior district began in 
 1855 to contribute to the lake traffic, and at the close of this period 
 more than 100,000 tons of ore and 5,000 tons of pig-iron were being 
 
 'U. S. Census 1860, Agriculture, cl. 
 
 ^Monthly Summary of Commerce and Finance, Jan. 1900, p. 1990. 
 ^Statistics of Foreign and Domestic Commerce, 1864, p. 162. 
 *Ibid., p. 163. Hbid., 164. Hbid., 154. 
 
Expansion of Internal Commerce, i8jo to i860. 233 
 
 shipped annually from Lake Superior, most of it being destined for 
 Cleveland and Pittsburgh.^ 
 
 The west-bound shipments over the lakes were smaller in volume 
 than the east-bound shipments, but they were of greater value. The 
 Erie Canal provided an outlet for large quantities of merchandise from 
 the city of New York, and the value of the goods sent to the Western 
 States by way of the canal and lakes was greater almost every year 
 from 1836 to i860 than the value of western produce received at Buffalo 
 and Oswego.^ By 1850 the through traffic moving westward on the 
 canal had a greater tonnage even than the local traffic intended for the 
 people living within the State of New York.^ The value of the traffic 
 shipped through the canal in 1836 to be forwarded to the Western 
 States was ^9,723,250. With the exception of a few losses during the 
 years immediately following, this amount increased steadily until it 
 reached a maximum of $94,230,720 in 1853, after which there was a 
 rapid decline because of the competition of railroads.* The shipments 
 to the West were made up of a wide variety of commodities . Dry goods 
 of all kinds, cordage, bagging, boots and shoes, earthenware, hardware, 
 nails, railroad iron, machinery, paper, lead, articles of tin and copper, 
 drugs, medicines, sugar, molasses, coffee, tea, tobacco, fish, salt, and 
 coal, and in the years when emigration was heavy, large quantities of 
 furniture, were included in the west-bound canal freight. From Buffalo 
 and Oswego the traffic was transported on the lake vessels to various 
 ports, whence, together with the products of those cities, it was dis- 
 tributed to the interior over the canals and railroads. 
 
 The growth of the shipping on the lakes serves as an index of the 
 growth of the traffic carried on their waters. Previous to 1830, the 
 vessels of the United States employed in the lake trade amounted to 
 less than 7,000 tons. During the following three years this tonnage 
 was more than doubled. By 1841 the total shipping belonging to the 
 lake ports of the United States was more than 50,000 tons, five years 
 later it was more than 100,000 tons, in ten years it tripled, and by 
 i860 amounted to 450,726 tons.® This tonnage included all vessels 
 enrolled in the river and canal trade that centered at the various lake 
 cities, and was not the tonnage of the shipping actually engaged in 
 lake commerce. The actual shipping on the lakes, however, formed 
 more than three-fourths of the above amount. In i860 it amounted 
 to 393,220 tons, of which 76,717 tons were owned in Canada and the 
 remainder in the United States.® Two-thirds of the lake craft in i860 
 were sailing-vessels, while the steamers and "propellers" made up 
 104,543 tons. 
 
 ^statistics of Foreign and Domestic Commerce, 1864, p. 154; Monthly Summary of Commerce 
 and Finance, Aug. 1900, p. 225. 
 '^Statistics of Foreign and Domestic Commerce, 1864, p. 181. 'Ibid., 133. *Ibid., 181. 
 
 'Ibid., p. 143. 'Ibid., 144. 
 
234 History of Domestic and Foreign Commerce. 
 
 The remarkable development of the lake district and the rise of trade 
 over the water-route between the Eastern and Central States resulted 
 in the growth of many thriving and populous cities at points affording 
 commercial advantages. The effect of the Erie Canal on the State 
 of New York was to be observed in the rapid development of Troy, 
 Utica, Syracuse, Rochester, and Buffalo, and as the tide of prosperity 
 spread westward settlements on the lakes grew into large, flourishing 
 cities. In 1840, no lake city west of Buffalo contained as many as 
 10,000 people, but twenty years later Cleveland had a population of 
 43,000, Detroit and Milwaukee more than 45,000 each, and Chicago 
 109,260, while in the interior such cities as Dayton, Fort Wayne, 
 Lafayette, Peoria, Quincy, Dubuque, and Davenport arose under the 
 stimulus of the lake commerce from little cross-roads villages to busy 
 market cities varying in population from 10,000 to 20,000.^ 
 
 Lying at the junction of the Erie Canal with Lake Erie, Buffalo 
 became the chief point of transshipment of the large traffic coming 
 from and going to the western region. Though smaller than Troy 
 and Rochester in 1830 and 1840, it soon passed both these cities after 
 the latter year, and by i860 it had a population of more than 80,000. 
 While not a great primary market for grain and provisions, Buffalo 
 received nearly every year more than one-half of the grain and flour 
 shipped eastward on the lakes, and it was by far the most important 
 distributing point for goods destined for the Central States. Its 
 receipts of grain, flour, and live-stock after 1845 were larger than 
 those of any other city in the United States, and in i860 more than 
 $100,000,000 worth of merchandise destined for the Central States 
 passed through the city. Oswego, located on Lake Ontario and con- 
 nected by canal to Syracuse, stood next to BuflTalo in the amount of 
 grain received from the lakes, but its traffic even in its most prosperous 
 years rarely attained half the volume of that at Buffalo, and usually 
 it was much less than half.^ 
 
 The two leading lake cities of Ohio were Cleveland and Toledo. To 
 the former city came the flour, wheat, corn, and butter and lard from 
 the rural districts of Ohio and Kentucky, merchandise from Cincinnati, 
 and nails and hardware from Pittsburgh, while its canal and railroads 
 carried into the interior the merchandise, furniture, and salt received 
 from the East and millions of feet of lumber shipped in from the forests 
 of Michigan.^ Toledo for many years shipped more grain via the 
 lakes than any other city except Chicago.* Canals reaching the Ohio 
 River at Cincinnati and Evansville, and later a network of railroads 
 extending through Indiana and western Ohio, poured large quantities of 
 grain and provisions, both from those two States and from Kentucky, 
 
 'U. S. Census 1900, I, 430-434. 
 
 ^Statistics of Foreign and Domestic Commerce, 1864, p. 159; U. S. Census 1860, Agriculture, cxlviii. 
 
 ^Report on Domestic Trade. 1845, p. 378. < Hunt's Merchants' Magazine, XL. 1859, p. 727. 
 
Expansion of Internal Commerce, 1830 to i860. 235 
 
 Illinois, and Missouri, into Toledo for the lake trade, and Chicago 
 sent flour over the Michigan and Southern Railway to this city to take 
 water transportation further eastward. 
 
 Detroit, situated near the western extremity of Lake Erie, was the 
 most important port of Michigan and shipped grain, live-stock, wool, 
 and lumber from that State. This city was the largest primary 
 market for Michigan produce and, like Toledo, it added to its commerce 
 by forwarding by water large shipments of flour that came by rail from 
 Chicago, in order to avoid the long trip through Lakes Michigan and 
 Huron. The relation that Cleveland and Toledo bore to Ohio and 
 Indiana, and Detroit to Michigan, Milwaukee bore to Wisconsin. The 
 shipments of grain from that city did not begin until 1841, and in 1845 
 they amounted to only 133,260 bushels, but in i860 it exported 
 9,995,000 bushels of grain, including flour, as well as large amounts of 
 wool, live-stock, and meat. 
 
 Of all the lake cities Chicago had the most spectacular growth. 
 Not mentioned in the census of 1830 and with a population of less than 
 5,000 in 1840, this city was in i860 a metropolis of more than 100,000 
 people, having grain receipts almost as great as those of all the other 
 primary grain markets combined,^ and exporting annually nearly 
 $50,000,000 worth of wheat, flour, corn, live-stock, meat, wool, whisky, 
 and other agricultural products.^ The year 1838 witnessed the first 
 shipment of wheat from Chicago, consisting of 39 sacks. In 1840 the 
 wheat exports of the city amounted to 100,000 bushels, five years later 
 to more than 1,000,000 bushels, and in 1858, twenty years after the 
 first shipment left the port, Chicago exported grain and flour equiva- 
 lent to 20,000,000 bushels.^ Flour was first shipped east from the city 
 in 1844 and corn (which by i860 formed more than one-half of Chicago's 
 grain shipments) in 1847.^ The receipts of lumber at Chicago after 1850 
 averaged nearly 300,000,000 feet each year,^ most of which was used in 
 the city or sent to the interior towns of IlHnois and Indiana. The 
 abundance of corn raised on the Illinois prairies gave that State a 
 leading position in the raising of hogs and cattle, and Chicago rapidly 
 developed into a great meat-packing center, rivaling Cincinnati in the 
 number of hogs slaughtered annually and eventually assuming, in 
 1863,* the lead which it still retains. 
 
 TRADE VIA THE PENNSYLVANIA CANAL SYSTEM. 
 
 The trade through the Great Lakes and Erie Canal was without 
 doubt the most notable feature of the commerce between the Atlantic 
 coast and the interior of the country during the period from 1830 to 
 
 ^Hunt's Merchants' Magazine, XL, 1859, p. 727. 
 
 ^Ibid., XXXVIII, 353; Statistics of Foreign and Domestic Trade, 1864, pp. 148-150. 
 
 'U. S. Census 1860, Agriculture, cxlix. 
 
 'Monthly Summary of Commerce and Finance, Jan. 1900, p. 2001. 
 
 »/6«d., Nov. 1900, p. 1144. «/i»"d., Feb. 1900, p. 2285. 
 
236 History of Domestic and Foreign Commerce. 
 
 i860, but this route, though the most important avenue for the 
 exchange of commodities between the two sections, by no means 
 absorbed all the traffic. The main line of the Pennsylvania Canal 
 system, completed in 1832, made it possible for both Philadelphia and 
 Baltimore to maintain an extensive trade with cities of the Ohio 
 Valley; but this trade, like the wagon trade preceding it, was largely 
 one-sided, the westward movement of light merchandise exceeding 
 the eastward movement of western agricultural and animal products. 
 Very little grain was shipped over this route from the States west of 
 Pennsylvania, and though large quantities of flour, pork, lard, beef, 
 wool, tobacco, and hemp were sent annually from Pittsburgh to 
 Philadelphia, they were not sufficient to pay for the cotton, woolen 
 and leather goods, porcelain, earthenware, coffee, tea, spices, dried 
 fruits, drugs, and liquors going westward from the latter city. The 
 heavy balance of trade against the Central States was settled by 
 drafts on New Orleans and New York, and with these bills the Phila- 
 delphia and Baltimore jobbers settled their unfavorable balances 
 with New York and Boston, where they bought many of the manu- 
 factured articles which they shipped to the West.^ 
 
 Nearly all the traffic between the Central States and Philadelphia 
 passed through Pittsburgh, which was situated in an advantageous 
 position at the western terminus of the Main Line Canal and occupied 
 the same relation with regard to the trade over that waterway that 
 Buffalo occupied with regard to the trade over the Erie Canal. From 
 Pittsburgh the merchandise coming from Philadelphia and Baltimore 
 was distributed by means of the Ohio River and the canals and rail- 
 roads of the Central States among the towns of Ohio, Kentucky, 
 Indiana, Illinois, Missouri, and Tennessee, and even to Mississippi 
 and Arkansas.^ In addition, Pittsburgh sold large quantities of iron, 
 glass, and bituminous coal to the various cities down the river,^ and 
 received flour, provisions, and tobacco for local trade and for trans- 
 portation to Philadelphia and Baltimore. 
 
 The through trade on the main line of the Pennsylvania Canals 
 never approached the volume of the through trade on the Erie Canal, 
 though the local trade over the entire canal system of Pennsylvania 
 compared favorably with the local commerce of the New York State 
 canals. In 1844 the traffic passing to and from the Central States 
 over the Erie Canal was more than 350,000 tons, and in the same year 
 the through traffic over the Pennsylvania Canal was less than 75,000 
 tons.* The inclined planes which carried the canal-boats across the 
 mountains proved to be an expensive and cumbersome device and the 
 annual cost of the maintenance and operation of that part of the main 
 
 ^Hunt's Merchants' Magazine, X, 1844, p. 323; XIII, 1845, p. 135. Hbid., X, 1844 p. 325. 
 
 'Ibid., X, 1844, p. 323; Monthly Summary of Commerce and Finance, Apr. 1900, p. 2858. 
 * Hunt's Merchants' Magazine, XIII, 1845, pp. 130-136. 
 
Expansion of Internal Commerce, 1830 to i860. 237 
 
 line improvement west of the Columbia Railway was invariably larger 
 than the tolls received on the traffic passing over it/ though the toll- 
 rates were always considerably higher than those charged over the 
 New York waterways. Because of the lack of adequate transportation 
 facilities, the trade of Philadelphia and Baltimore with the Central 
 States suffered constant losses, and for a time New York seemed des- 
 tined eventually to monopolize the entire commerce between the 
 Atlantic coast and the Mississippi Valley. 
 
 TRADE VIA RAILROADS BETWEEN THE EAST AND THE WEST. 
 
 In 1841, however, the situation of the commerce between the Eastern 
 and Central States was modified by the entrance of a new factor that 
 foretold a great change in its subsequent development. The new factor 
 was the Western Railroad, the completion of which gave through rail 
 connection between Boston and Albany. Because of its isolated posi- 
 tion, Boston had never shared in the direct trade with the Central 
 States, but had been forced to sell its manufactured products through 
 merchants of New York and Philadelphia and secure food products for 
 the people of New England from the same sources. The new railroad 
 completely altered the position of Boston and brought an era of great 
 prosperity to the city. In 1844 the railway transported 300,000 
 barrels of flour from Albany and Troy to the cities of New England, 
 and two years later^ 361,000 barrels. New England manufacturers 
 began to consign their wares directly to the merchants of the cities in 
 the Central States. As Boston prospered, Philadelphia declined, losing 
 not only one of its best markets for breadstufi^s, but also a large part 
 of the trade in New England dry goods and other manufactures that 
 had formerly passed through the city to the West.^ 
 
 The immediate success of the railroad between Boston and Albany 
 fully demonstrated the practicability of the steam road and stimulated 
 the belief that it possessed advantages superior to those of canals for 
 handling nearly any kind of traffic, and the decade between 1850 and 
 i860 witnessed the beginning of the competition of the trunk-line 
 railways with the canals for the through traffic between the East and 
 West. The failure of the Pennsylvania Canal and the growing com- 
 mercial prosperity of Boston incited the people of Pennsylvania to take 
 decisive steps to win back some of the western trade to Philadelphia. 
 That city had the distinct advantage of a shorter distance and a more 
 direct route to the trade centers of the Ohio Valley, and needed only a 
 thoroughfare across the crest of the mountains, connecting Philadelphia 
 with Pittsburgh and later with Cleveland, Toledo, and Cincinnati, so 
 that the grain and live-stock of the cereal-belt would come to the Dela- 
 ware River in as large quantities as it was coming to the Hudson. In 
 1846 the Pennsylvania Railroad Company was chartered for the 
 
 ^American Railroad Journal, 1856, p. 35. 
 
 ^Hunt's Merchants' Magazine, XVI, 1847, p. 325. 'lUd., X, 1844, p. 324. 
 
238 History of Domestic and Foreign Commerce. 
 
 purpose of constructing a steam road that would unite Philadelphia 
 and Pittsburgh. By 1854 the last link of the track was completed and 
 trains were able to move from one city to the other. The business of 
 the railroad immediately surpassed that of the old canal system. The 
 inclined planes of the latter were replaced by a steam portage railway in 
 1855, but even that improvement failed to make its business remun- 
 erative, and in 1857 the State sold the entire "main line of public 
 works " to the railway company. The railway company operated the 
 portage railway less than three months, and it abandoned the canal 
 between Johnstown and Pittsburgh in 1864, but the Susquehanna and 
 Juniata division was maintained for nearly forty years to help in 
 handling the movement of coal and stone.^ 
 
 Even before the Pennsylvania Railroad was finished the New York 
 Central, the New York and Erie, and the Baltimore and Ohio Railroads 
 were carrying traffic between the eastern cities and the trans-Allegheny 
 region.^ The additional transportation facihties afforded by the trunk- 
 line roads and the numerous railroads built throughout the Central 
 States caused a large addition to the volume of trade between the 
 eastern and central portions of the country and also brought about 
 further changes in the course of internal commerce. In i860 the 
 Pennsylvania Railroad carried 99,747 tons from Philadelphia to Pitts- 
 burgh,^ two-thirds of which consisted of dry goods, groceries, hardware, 
 boots and shoes, drugs, and coffee, and 176,007 tons from Pittsburgh 
 to Philadelphia, half of which was live-stock, flour, and grain.* The 
 sameyear the New York Central Railroad transported eastward 293,529 
 tons of through freight, composed almost entirely of vegetable and 
 animal food products,^ and the through west-bound traffic on the road 
 for the year amounted to 1 18,977 tons, of which more than 108,000 tons 
 were classed as merchandise.^ The traffic of the Erie and the Baltimore 
 and Ohio Railroads was as large as that on the New York Central and 
 Pennsylvania, and though only partly classified, was apparently com- 
 posed of the same kind of commodities.^ The through traffic on all four 
 trunk-line roads was not yet as large as that passing through the Erie 
 Canal.^ However, the railroads had succeeded in getting two-thirds 
 of the total flour traffic and practically all the merchandise and live- 
 stock,^ leaving to the canal only forest products and grain. In addition 
 to the freight taken from the canal, the railroads easily secured the 
 traffic that was accustomed to go from the Northern Central States to 
 the eastern coast and to Europe by way of New Orleans. The lakes 
 and canals had previously made inroads on the commerce down the 
 
 iHulbert, Historic Highways, XIII, 213-15. ^ggg p. 228. 
 
 'Statistics of Foreign and Domestic Commerce, 1S64, p. i.2i. *Ibid.,138. ^Ibid., liO. '/Wd.,126. 
 ''Ibid., 135; Lord, The Effect of Secession on the Commercial Relations Between the North and 
 South, 34. 
 
 'Statistics of Foreign and Domestic Commerce, 1864, pp. 141, 180. 
 ^Monthly Summary of Commerce and Finance, Jan. 1900, p. 1963. 
 
Expansion of Internal Commerce, 1830 to i860. 239 
 
 river, but notwithstanding their influence on the course of trade, the 
 river cities of Ohio and Kentucky continued to send the larger part of 
 their exports southward until the railroads afforded through connec- 
 tions with the East.^ The speed of the railroads and the superiority 
 of New York as an importing point gave the direct rail routes to the 
 East a decided advantage over the long roundabout route by way 
 of New Orleans. In 1852 the Galena lead trade, which had long 
 formed an important item of the river and coasting commerce of New 
 Orleans, was captured by the railroads.^ Flour and provisions of 
 Illinois, Indiana, and Kentucky that had formerly been sent to Phila- 
 delphia, Washington, Baltimore, and other cities by way of New 
 Orleans or New York were taken directly over the mountains to the 
 points of consumption.^ Shipments downstream from Cincinnati* and 
 other important centers on the Ohio shrunk rapidly in volume and, 
 even before the war broke out, the direct commerce of Cincinnati with 
 the East was much larger than its trade with the South.^ 
 
 The transportation of Hve-stock from the grain-belt to the Eastern 
 States was taken over almost entirely by the railroads. Neither the Erie 
 Canal nor Pennsylvania Canal had carried many hogs and cattle, 
 though large quantities of meat, lard, and other animal products had 
 been sent to the eastern cities over both these routes. After the rise 
 of the pork-packing industry in Cincinnati and other cities of the 
 Central States, but few live swine were sent to eastern markets. 
 However, the trade in cattle continued to flourish. Large numbers of 
 cattle were driven from Ohio (usually by way of BuflFalo and Albany) 
 to New York, where more were slaughtered than in any other city. ; 
 Illinois, too, raised many cattle, but the distance was too great to permit 
 the driving of fat stock to the eastern coast, and consequently the 
 Illinois farmers sent their cattle to Ohio, where they were fattened for 
 the New York market. The cattle trade of Ohio thus had a period of 
 great prosperity up to 1850, but after that year it quickly declined.® 
 The advent of the railroad put an end to the practice of driving fat 
 cattle to distant markets. Moreover, the railroads brought the 
 Illinois prairies nearer to the Atlantic coast than the cornfields on the 
 Scioto had been during the preceding years, and it was no longer 
 impossible for the Illinois farmers to feed their own stock and send it 
 directly to New York and Philadelphia. Ohio was soon surpassed in 
 the production and sale of corn-fed cattle by the corn-raising States 
 farther west. The transportation of cattle was an important source 
 of profit to the western railroads and to the trunk lines, and large 
 numbers of hogs and sheep were shipped from the Central to the 
 
 'DeBow, Resources of the Southern and Western Slates, I, 253. 
 ^ReportonInternalCommerce,XS87, p. 212. 'DeSow. Ibid., Ill, 16. 
 
 *U. S. Census 1860, Agriculture, clviii. ^Reporton InternalCommerce, 1882, AppendixJ, 83. 
 
 'U. S. Census 1860, Agriculture, cxxx. 
 
240 History of Domestic and Foreign Commerce. 
 
 Eastern States, constituting almost a totally new element in the com- 
 merce between the two sections. In 1859 live-stock furnished a larger 
 amount of the through eastward traffic of the Pennsylvania Railroad 
 than any other single commodity/ and the other trunk lines and the 
 railways radiating from Chicago, Toledo, and Cincinnati transported 
 each year an increasing number of animals destined for the slaughtering- 
 pens of the East.^ 
 
 While the new railroads in the Northern States were making such 
 marked changes in the course of internal trade, a similar transformation 
 was occurring in the South. Interstate commerce between the eastern 
 and western sections of the Southern States before 1849, aside from 
 some traffic in slaves, was unimportant. Georgia and South Carolina 
 each had a large internal trade of its own, but very few of the exports 
 from either State were drawn from beyond its western border. In 
 1849, when the Western and Atlantic Railroad began to run trains 
 from Chattanooga to the Atlantic coast, the planters of northern 
 Alabama and Tennessee, who had always sent their cotton to New 
 Orleans and Mobile for exportation, turned to the markets of Charles- 
 ton and Savannah. The cotton receipts at Charleston advanced from 
 261,000 bales in 1848 to 458,000 bales in 1849, and those of Savannah 
 from 255,000 to 391,000 bales, while the receipts at New Orleans fell oflF 
 nearly 100,000 bales.^ The short crop of 1850 caused a curtailment 
 in the receipts of all the southern ports, but it was noticed that Charles- 
 ton and Savannah together received 35 per cent of the total crop and 
 New Orleans, where two years before more than one-half the cotton 
 crop had been marketed, received only 38 per cent.^ The shifting 
 of the center of cotton production farther westward and the continual 
 increase of the annual crop enabled New Orleans to make up for the 
 losses to the South Atlantic ports, but these cities, nevertheless, easily 
 maintained their increased trade, the receipts at Savannah rising in 
 i860 to 525,219 bales and those of Charleston to 510,109 bales.* 
 After the completion of the railroad from Chattanooga to Nashville 
 in 1854 the South Atlantic ports competed with New Orleans and the 
 cities on the Ohio River and the Great Lakes for the merchandise 
 trade of Alabama, northern Mississippi, and Tennessee, and the pro- 
 visions for Georgia and South Carolina came by rail from Kentucky 
 and Tennessee, the coasting trade on the Atlantic seaboard both losing 
 and gaining by the changes in the course of trade.^ 
 
 Thus by i860 railway connection was established between the 
 Central States and the Atlantic coast from Massachusetts to Georgia. 
 A half century before, the direct exchange of products between the 
 East and the West had been impossible and it seemed that the Appa- 
 
 ^StatisHcs of Foreign and Domestic Commerce, 1864, p. 138. Hbid., 140, 149, 157, 164. 
 
 •DeBow, Resources of the Southern and Western States, II, 555. 
 *Report on Internal Commerce, 1886, Ixxi. ''Ibid., 374. 
 
Expansion of Internal Commerce, 1830 to i860. 241 
 
 lachian highland was to remain an insuperable barrier to close economic 
 and commercial relations between the two great productive regions of 
 the country. The Erie Canal fully demonstrated the value of an 
 eastern outlet for the agricultural and forest products of the great 
 central valley, but the benefits derived from the commerce passing 
 through that waterway had been reaped by only a limited portion of 
 the land, and jealousy and dismay had been the part of the sections 
 not served by the Erie Canal. The railroads could penetrate any 
 region, and with their power to surmount physical and climatic diffi- 
 culties they were able to distribute the domestic trade more equitably 
 and permit all portions of the country to enjoy in full the benefits 
 arising from their natural economic advantages. 
 
 INTERNAL TRADE BETWEEN THE NORTH AND THE SOUTH. 
 
 The general character of the commerce between the North and South 
 between 1830 and i860 differed little from what it had been before that 
 period. East of the Appalachian highlands the exchanges were cared 
 for by the coasting-trade. There was no through rail connection 
 between the two sections until near the close of the period, and con- 
 sequently almost the entire internal commerce between the North and 
 South, aside from that in slaves and live-stock, consisted of the trade on 
 the waters of the Mississippi River system. A history of the trade 
 between the North and South from 1830 to i860 is therefore Httle more 
 than an account of the commerce on the Mississippi. 
 
 This period was the golden age of the river trade. Each year it 
 increased steadily in volume, reaching a point of prosperity in i860 
 never equaled before or since. Notwithstanding the fact that the Erie 
 Canal, during each year after its completion, carried to the Atlantic 
 seaboard an increasing volume of surplus food products for which 
 formerly the Mississippi River provided the sole outlet, the shipments 
 of flour, grain, and provisions down the river grew almost constantly 
 in magnitude. Until the railroads began to compete for the traffic in 
 flour and provisions after 1850, the cities on the Ohio River sent most 
 of the produce collected at their markets to New Orleans to be shipped 
 to Europe and the Eastern States or to be sold to the planters of the 
 cotton-belt. And even after 1850, when the surplus agricultural 
 produce of the Ohio River country, upon which New Orleans had 
 formerly depended mainly for its supplies, was almost entirely diverted 
 from the river, its place was taken by that coming from the fertile 
 region around St. Louis, where thousands of immigrants from the 
 Eastern States and Europe came to found new homes. Moreover, 
 the loss of traffic in agricultural produce from Pennsylvania, Ohio, 
 and Kentucky was compensated for by the increasing volume of manu- 
 factured goods and coal coming down from Cincinnati, Louisville, and 
 Pittsburgh. Thus the downstream movement from the North, though 
 
242 History of Domestic and Foreign Commerce. 
 
 suffering a heavy relative loss because of the canal and railway compe- 
 tition, made an absolute gain, and, with the enormous amounts of cotton 
 shipped from the Southern States into NewOrleans added to this traffic, 
 the Mississippi River carried considerably more produce to the sea 
 than either the Hudson River or the eastern railroads. As before 1830, 
 the trade up the river failed to keep pace with the growth of the 
 movement downstream. New Orleans, though continuously holding 
 the lead in the value of domestic produce exported abroad, received 
 but a small fraction of the imported wares entering the country. Of 
 the shipments upstream from that city, 75 per cent were articles 
 previously sent downstream that had been brought to New Orleans to 
 be resold to the planters of Mississippi, Louisiana, and Arkansas.^ 
 The region north of these States bought sugar and coffee from New 
 Orleans, but, as before 1830, it drew nearly all its manufactured and 
 imported goods directly from the East, except occasionally some heavy 
 articles of iron which could be transported more cheaply by water 
 through the southern city. 
 
 The sales of manufactures and food by northern merchants and 
 farmers to the southern planters, which had begun when the South 
 adopted cotton as a staple, had a steady and uninterrupted growth 
 during this entire period. Levi Woodbury, writing in 1833 of the 
 things he saw in a trip down the Mississippi, said : 
 
 "At every village we find from ten to twenty flat-bottom boats, which 
 besides corn on the ear, pork, bacon, flour, whiskey, cattle, and fowls, have a 
 great assortment of notions from Cincinnati and elsewhere. Among them are 
 brooms, cabinet-furniture, cider, plows, apples, cordage, etc. They remain 
 in one place until all is sold out, if the demand be brisk; if not, they move 
 farther down. After all is sold they dispose of their boat and return with the 
 crews by the steamers to their homes." 
 
 As the years went by and the plantations grew larger and the planters 
 wealthier, this practice of peddling from wharf to wharf along the river 
 gradually died out. The planters engaged men at New Orleans to act 
 as their agents in the sale of their cotton and the purchase of suppHes 
 for the plantations, and as this custom spread it became necessary for 
 flat-boats and steamers to carry their cargoes to New Orleans, where 
 they were bought and shipped in small packet-boats back up the river. 
 
 The flat-boat trade on the Mississippi, which had been surpassed by 
 the steamer traffic even before 1830, continued to form an important 
 part of the river commerce for many years. As late as 1846, the flat- 
 boat arrivals at New Orleans numbered 2,792, over half of which came 
 from Ohio and Indiana. After that year there was a gradual decrease, 
 and in 1855 only 718 arrivals were noted, 249 coming from Indiana with 
 cargoes composed largely of hay, and 203 coming from Pittsburgh with 
 coal. After 1856 the flat-boats ceased to be a factor in the river traffic 
 and were no longer listed among the arrivals at New Orleans.^ 
 
 ^Report on Internal Commerce, 1887, p. 205. ^Ibid., 222. 
 
Expansion of Internal Commerce, 18^0 to i860. 243 
 
 Of the profits and benefits arising from the growth of the river trade, 
 New Orleans received the largest share. Between 1830 and 1840 no 
 city in the country kept pace with the southern metropolis in the 
 increase of wealth and trade, and though it fell behind relatively during 
 the next two decades, because of its inability to hold the traffic from the 
 agricultural region of the upper Mississippi Valley, it never suffered the 
 shghtest retrogression. It continued to hold its position as the largest 
 city west of the Appalachian highland, advancing in population from 
 46,310 in 1830 to 102,193 in 1840, and it contained 168,175 people in i860. 
 
 The value of the receipts of produce from the interior at New Orleans 
 in 1830 amounted to $22,065,518.^ In 1840 the total value was 
 $49,763,825.^ In 1850 it was $96,897,873, and in i860 it reached the 
 large figure of $185,211,254.^ The largest part of this great increase 
 resulted from the growth of the cotton receipts, which in i860 consti- 
 tuted 60 per cent of the value of all commodities entering the city. 
 The receipts of "western produce," which in 1820 formed 58 per cent 
 of the commodities coming to New Orleans, gradually fell in relative 
 value until in i860 they amounted to only 23 per cent of the total 
 receipts.^ But though showing a relative decline, the receipts of provi- 
 sions and merchandise had a gradual and steady aggregate increase. 
 The receipts of flour at New Orleans, which in 1832 amounted to only 
 221,000 barrels, advanced to 1,618,000 barrels in 1847, ^^^ during the 
 five-year period from 1856 to 1861 they averaged annually 1,150,000 
 barrels.* The receipts of bacon, hams, lard, and pork in 1846 amounted 
 in value to $7,635,208^ and in 1856 to $16,621,099,® and the receipts of 
 corn, wheat, and whisky, though declining slightly in the ten years, 
 still amounted to more than $7,000,000 in 1856.^ Other important 
 products coming down the river from the Northern States were rope, 
 bagging, lead, oats, hay, potatoes, beef, butter, hides, hemp, staves, 
 and coal,^ and from the States on the lower Mississippi, New Orleans 
 drew besides cotton large quantities of sugar, molasses, and tobacco. 
 As a cotton market the city had no rival. In 1850, $41,885,156 worth 
 of this great staple was sold in New Orleans, and ten years later the 
 amount was $109,389,228, an increase of 160 per cent. Charleston 
 and Savannah captured some of the cotton trade when their railroads 
 were extended into Alabama and Tennessee, but, notwithstanding this, 
 New Orleans easily maintained the lead. 
 
 Of the cities up the Mississippi, St. Louis derived the most benefit 
 from the river commerce. Until after 1855 St. Louis remained strictly 
 a river city, entirely dependent upon the river for both the importation 
 and exportation of the large quantities of flour, grain, meat, tobacco, 
 lead, manufactured goods, and merchandise that entered and left its 
 busy markets. Before railway connection was established between 
 
 ^Report on Internal Commerce, 1887. g. 199. ^IMd., 209. ^Ibid., 215. 
 
 ^Monthly Summary of Commerce and TPinance, Jan. 1900, p. 1959. 
 ''Report on Internal Commerce, 1887, p. 219. »/6»(f., 220. 
 
244 History 0/ Domestic and Foreign Commerce. 
 
 St. Louis and the East over the Ohio and Mississippi Railroad (1855) 
 practically all the commodities leaving the city sought a market in 
 New Orleans and the smaller cities on the lower Mississippi.^ But 
 though most of the steamers leaving St. Louis were destined for New 
 Orleans, the number of arrivals from the Ohio River greatly exceeded 
 the arrivals from the Louisiana city,^ for St. Louis, like Cincinnati and 
 Pittsburgh, secured most of its merchandise and manufactured goods 
 from the eastern ports instead of New Orleans. The trade of St. Louis 
 grew to large proportions after 1840. It was the point for the concen- 
 tration of the agricultural produce of much of Illinois, Iowa, and 
 Missouri, and was likewise the point from which eastern manufactured 
 goods were distributed to many of the inhabitants of those States. 
 In 1838 St. Louis was still obliged to purchase flour for its own con- 
 sumption, but seven years later it was selling flour to both the Atlantic 
 and the Gulf States.^ In 1857 its receipts and manufactures of flour 
 combined amounted to 1,221,155 barrels, and the same year its receipts 
 of wheatwere 3,330,395 bushels and of corn 2,766,062 bushels.^ Chicago 
 was the only interior city that surpassed it as a primary grain market.^ 
 As a market for meat, hides, whisky, and tobacco it rivaled all the 
 leading cities of the Central States. It was the principal depot of 
 the American Fur Company and handled more furs than any other 
 city in the United States, the skins of bison and other wild animals of 
 the western plains forming each year a valuable part of its trade. In 
 population St. Louis had a phenomenal growth. In 1830 it contained 
 only a little more than 5,000 people, and in 1840 only 16,469, but by 
 1845 its population had advanced to 63,491, and in i860 it reached 
 160,773. After St. Louis secured railway connection with the East, a 
 large part of the trafiic entering the city from Pittsburgh and Cincinnati 
 was transferred to the railroads, and at the same time some of the 
 traffic leaving the city was diverted from the southern river route to the 
 eastern railway route. However, the volume of trade taken from New 
 Orleans was not very large at first, and the movement of commodities 
 toward the south showed no marked decHne until the outbreak of the 
 Civil War. Like New Orleans, St. Louis was still a river city in i860. 
 
 THE TRADE OF CINCINNATI. 
 
 Cincinnati, Louisville, and Pittsburgh continued to be the important 
 commercial centers on the Ohio River. The prosperity of these cities 
 was greatly enhanced by the building of the canals that gave them an 
 outlet to the East. Cincinnati in particular was benefited by the 
 acquisition of the eastern outlet for its hog products, flour, and grain. 
 Centrally located at the junction of water routes to both the Atlantic 
 and the Gulf coasts, this city profited enormously from the competition 
 between the eastern and southern markets for the produce of the Ohio 
 
 ^Report on Internal Commerce, 1887, p. 53. ' Hunt's Merchants' Magazine, XV, 1846, p. 1 67. 
 nUd., 164. Hbid., XXXVIII, 1858, pp. 222-224. Hbid., XL, 1859, p. 727. 
 
Expansion of Internal Commerce, 1830 to i860. 245 
 
 Valley. ( The chief effect of the Ohio State canals on the trade oQ 
 Cincinnati was to enable its products to command higher prices in the 
 Southern States rather than to turn the course of its trade suddenly to 
 the East. Until the trunk-line railroads began to compete with the 
 river the merchants of Cincinnati found their most important markets 
 toward the south. A considerable quantity of meat and flour was sent 
 to Toledo, Cleveland, and Pittsburgh for transportation to the east, 
 but the diversion of the Ohio Valley traffic from the southern route 
 before 1850 was accomplished mainly by the concentration at Toledo 
 and Cleveland of much produce that would have come to Cincinnati 
 had the Erie Canal not been constructed. Table 14, which is part of 
 one given by DeBow, showing the destination of certain articles shipped 
 from Cincinnati in 1850-51, indicates how greatly the southern trade 
 exceeded that to the east.^ 
 
 Table 14. — Destination 
 
 of specified articles shipped from the port c 
 
 / Cincinnati, 
 
 x8so-5i- 
 
 Commodity. 
 
 To New 
 Orleans. 
 
 To other 
 
 down-river 
 
 ports. 
 
 To up-river 
 ports. 
 
 By canals 
 
 and 
 railways. 
 
 J 
 By flat- 
 boats. 
 
 
 19,319 
 35,200 
 69,258 
 76,245 
 
 281,609 
 22,854 
 56,380 
 
 112,622 
 1,345,860 
 
 140,661 
 
 68 
 
 959 
 
 48,432 
 
 20,272 
 
 95,943 
 
 117 
 
 5,358 
 
 1,055 
 
 755,860 
 
 56,164 
 
 314 
 
 15 
 
 2,165 
 
 10,695 
 
 7,719 
 
 3,277 
 
 5,739 
 
 3,801 
 
 1,559,280 
 
 31,231 
 
 236 
 8 
 1,900 
 6,195 
 4,859 
 4,143 
 2,823 
 4,608 
 1,092,953 
 3,268 
 
 1,611 
 
 315 
 
 920 
 
 522 
 
 95,877 
 
 1,821 
 
 1,587 
 
 3,781 
 
 525,820 
 
 17,980 
 
 Butter, firkins and kegs. . 
 Cheese 
 
 Candles, boxes . 
 
 Flour, barrels 
 
 
 
 
 Pork, pounds .... 
 
 Whisky, barrels 
 
 This table reveals plainly that, with the exception of meat products, 
 the shipments from Cincinnati to the eastern cities were very small in 
 comparison to the shipments to the cotton States, and that the river 
 commerce of the city was by far the most important element of its 
 trade. Under the stimulus of its commercial prosperity Cincinnati 
 grew very rapidly in population from 24,831 in 1830 to 1 15,436 in 1850, 
 and 161,044 ill i860, at which time it was the second largest city west 
 of the Appalachian highland and a close rival of New Orleans for first 
 honors. After 1850 the railroads accomplished what the canals had c 
 only partly effected : they altered the course of the main current of the 
 Cincinnati export trade and transferred the chief commercial interests 
 of the city from the South to the East. In 1855 the value of the 
 exports from Cincinnati to the East was almost equal to the value of 
 the exports to the South.^ During the three years preceding i860 the 
 shipments of flour and wheat from Cincinnati stood as shown in 
 table 15.^ 
 
 'DeBow, Resources of the Southern and Western States, I, 253. 
 
 'Report on Internal Commerce, 1882, Appendix 7, 83. 'U. S. Census 1860, Agriculture, clviii. 
 
246 
 
 History of Domestic and Foreign Commerce. 
 
 Thus at the outbreak of the Rebellion, Cincinnati had ceased to be 
 strictly a river city, and the commerce of the Mississippi had received 
 a blow from which it was never to recover, though, as indicated before, 
 the increase of the amount of merchandise and coal floated down the 
 Ohio, the growth of the cereal shipments from the St. Louis district, 
 and the constant development of the cotton trade prevented any 
 immediate decrease in the volume of receipts entering New Orleans. 
 
 Table 15. — Shipments of flour and wheat from Cincinnati, iSS7, 1858, 18^9. 
 
 Commodity. 
 
 1857 
 
 1858 
 
 1859 
 
 South. 
 
 North. 
 
 South. 
 
 North. 
 
 South. 
 
 North. 
 
 Flour, barrels 
 
 Wheat, bushels 
 
 162,565 
 30,446 
 
 445,650 
 601,214 
 
 17,569 
 1,182 
 
 544,570 
 270,531 
 
 92,919 
 11,341 
 
 385,389 
 310,154 
 
 Thus the river trade of the Mississippi Valley maintained an impor- 
 tant position in the domestic commerce of the United States. Not- 
 withstanding the relative losses it suffered, it never failed to exhibit 
 an annual increase, and the last year of this period (1859-60) was the 
 "best year on the river." This year stands on record yet as the maxi- 
 mum of river prosperity, showing the largest receipts at New Orleans 
 and the heaviest trade the lower part of the river has ever carried. 
 However, the growth of commerce on the Mississippi had failed sig- 
 nally to keep up with the growth of wealth and population of the great 
 area that the river drained. The bulk of the produce of the Ohio 
 Valley had been diverted to the railroads and canals and only one- 
 fourth of it was being carried to the South.^ Charleston and Savannah 
 had captured the trade of northern Alabama and eastern Tennessee, 
 and after 1850 the Mobile and Ohio Railroad began to carry much of 
 the cotton of Mississippi to the Alabama seaport. 
 
 The enormous growth of the grain traffic on the eastern routes to the 
 seaboard and the relative dechne on the southern route, and the diver- 
 sion of the cotton traffic to other Gulf ports and the cities on the south 
 Atlantic coast, engendered in the minds of some commercial leaders 
 of New Orleans grave fears for the continued prosperity of the river 
 trade. DeBow, in a speech at Nashville, in 1851, declared that 
 northern enterprise had "rolled back the mighty tide of the Mississippi 
 and its ten thousand tributary streams until their mouth, practically 
 and commercially, is more at New York and Boston than at New 
 Orleans,"^ and he earnestly exhorted the people of the South to construct 
 railroads radiating from the Crescent City, by which it was asserted, 
 "thetravel and much of the trade" would be taken off on the very banks 
 
 ^Report on Internal Commerce, 1887, p. 215. 
 
 'DeBow, Resources of the Southern and Western States, II, 484. 
 
MAP 3. 
 
 -—I i\ 
 
 MAP OF THE RAILROADS IN THE UNITED STATES IN 1860. 
 
 (From Scribner's Statistical Atlas of the United States, 1883.) 
 
T 
 stric 
 abl( 
 the 
 Ohi( 
 and 
 
 Tl 
 tant 
 with 
 an a 
 "bei 
 mun 
 and 
 HoAA 
 nail] 
 area 
 Vail 
 four 
 had 
 and 
 the ( 
 
 Tl 
 seab 
 sion 
 Ada 
 of N 
 tradi 
 norti 
 and 
 and 
 Orle; 
 railr 
 "the 
 
Expansion of Internal Commerce, 1830 to i860. 247 
 
 of the nvers.^ Such warnings and appeals were unavaihng. New 
 Urleans remained apathetic, partly because of the prosperity resulting 
 trom the tremendous growth of its cotton trade, and partly because of 
 the impossibility at that time of convincing the people that railroads 
 could successfully compete with river transportation. 
 
 However, evidence was not lacking that railroads would ultimately 
 gain the ascendancy over the river, even in the transportation of cotton 
 and other southern products. One notable proof of the superiority 
 of the railroad was the rise of the so-called "overland movement" 
 of cotton, which in 1859 began to take on large proportions. In that 
 year 106,678 of the 786,521 bales of southern cotton consumed in 
 Northern States were transported to the factories entirely by rail. 
 In 1855 only 7,661 bales had been shipped north on the railroads, 
 and in 1850 practically all of the 475,702 bales used in the northern 
 mills had been transported in coasting vessels to the northern seaports.^ 
 None of the cotton sent north by rail passed through New Orleans. 
 The development of the overland movement injured both the river and 
 the coasting trade. It represented a definite loss to the commerce of 
 New Orleans and at the same time added a new factor to the internal 
 trade between the North and South. Furthermore, it indicated that 
 the trade on the lower Mississippi was beginning to decay and that it 
 was doomed inevitably to sink to relative insignificance whenever a 
 network of railways overspread the region from which the river drew 
 its traffic. Another generation was to see the construction of railroads 
 to parallel the great natural highway and witness the fulfillment of 
 the "Cassandra warnings" uttered by DeBow and others during the 
 decade before the war. 
 
 Next to the river commerce, the trade in live-stock and slaveswas the 
 most important element in the commercial intercourse between the 
 North and South. Each year large droves of horses, mules, cattle, 
 and hogs were driven into the South from the northern and "border" 
 States. It was estimated in 1845 that in the preceding twenty years 
 the southern planters had spent $900,000,000 in the neighboring States 
 for mules, horses, implements, and clothing.^ Buckingham stated in 
 1 841 that 10,000 horses and mules came every year from the Middle 
 Atlantic and Western States to the South Atlantic States.* Rearing 
 mules for the southern markets was an important occupation in Ken- 
 tucky and Tennessee, where the extensive grazing-lands could be used 
 for that purpose more profitably than for any other, and the farmers all 
 over the corn-raising section of the country found an unfaihng source 
 of gain in the demand for live-stock in the southern cottonfields. 
 
 'DeBow, Resources of the Southern and Western States, II, 456. 
 'Report on Internal Commerce, 1879, pp. 122, 128. 
 'Ingle, Southern Sidelights, SS. 
 
 •Buckingham, Slave States in America, II, 203; also in Callender, Economic History of United 
 States, 292. 
 
248 History of Domestic and Foreign Commerce. 
 
 The domestic slave-trade of the United States commenced to be of 
 importance after 1820, when cotton culture, with which the institution 
 of slavery was so intimately connected, began to spread among the 
 States along the Gulf. During the years from 1830 to i860 the slave 
 traffic was very large. The price of an adult negro in 1790 had been 
 $200, but as the demand for slaves in the cotton-belt expanded, the 
 price rose until in 1840 it was $500; in 1850 it was $1,000, and in i860 
 good plantation hands brought from $1,400 to $2,000 each.^ Slaves 
 were sent to South Carolina, Georgia, Alabama, Mississippi, Louisi- 
 ana, Arkansas, and Texas, from plantations in Virginia, Maryland, 
 North Carolina, Kentucky, Tennessee, Missouri, and Delaware, the 
 slaveholders in the latter group of States finding it more profitable to 
 dispose of their negioes at the prices prevailing in the cotton States 
 than to keep them for labor on their farms. Though no statistics of 
 the volume of the internal slave traffic exist, evidence from contem- 
 porary accounts make it plain that the trade was unquestionably 
 extensive. Olmsted in 1856 estimated that considerably more than 
 20,000 negroes were sent annually from the border States to the cot- 
 ton States,^ and at the prices then existing the traffic must have had 
 a value approaching $30,000,000 a year, thus giving it an important 
 place among the commercial interchanges between the North and 
 South. 
 
 INTERNAL TRADE OF THE FAR WEST 
 
 Long before Texas had gained independence or the California terri- 
 tory had passed into the possession of the United States, enterprising 
 merchants on the western frontier began trading with the Mexican 
 settlements situated in what is now the State of New Mexico. In 1821 
 a small caravan of pack horses went from Franklin, Missouri, to Santa 
 Fe with dry goods and other light merchandise. Large profits were 
 realized on very small quantities of goods, and the traders were en- 
 couraged to expand their business, ^n 1824, wagons drawn by mules 
 and oxen were introduced as a means of transportation, and the same 
 year the old "Santa Fe Trail" was made an authorized road by an act 
 of Congress. By 1843 the export trade with the Mexican settlements 
 in the Southwest had grown to an annual value of nearly $500,000.^ 
 For a few years the trade was almost entirely shut off by the hostile 
 action of President Santa Ana, but after the occupation of the western 
 territory by the United States troops in 1846 it began again and assumed 
 larger proportions than ever before. From 1847 to 1859 the average 
 annual value of merchandise carried in wagons to New Mexico was 
 about $1,150,000, and in i860 the total value was $3,500,000.* The 
 chief shipping-points were Independence and Kansas City, Missouri. 
 
 'Hammond, The Cotton Culture and the Cotton Trade, 51. ^The Cotton Kingdom, I, 58. 
 
 'Report on Internal Commerce, 1889, p. 563; Hunt's Merchants' Magazine, XI, 1844, p. 475. 
 ^Report on Internal Commerce, 1889, p. 565. 
 
Expansion of Internal Commerce, 1830 to i860. 249 
 
 Transportation was supplied by regular freighters, who employed a 
 large number of men to conduct the white-topped "prairie schooners" 
 across the broad expanse of unsettled country between the Missouri 
 River and the mountains. New Mexico paid for its imports with 
 bullion and wool produced within the Territory, and with the money 
 secured by the sale of sheep driven to California or by the sale of the 
 scanty agricultural produce, which was disposed of at remunerative 
 rates at the government military posts and Indian agencies.^ 
 
 In addition to the wagon trade with New Mexico, the Missouri River 
 cities carried on a similar commerce with Utah, which was occupied by 
 the Mormon settlers in 1848. Utah was closer to CaHfornia than 
 to the Missouri River points, but the inferiority of the roads to San 
 Francisco made transportation to that city more expensive than to 
 Kansas City or Leavenworth. The traffic carried to the Mormon 
 settlements consisted chiefly of dry goods, groceries, hardware, and 
 drugs. No statistics of the volume of trade were kept, but it is esti- 
 mated that it never reached more than 12,000 tons a year, which was 
 somewhats mailer than the trade with Santa Fe.^ 
 
 When gold was discovered in Colorado in 1859 there was an immedi- 
 ate rush of settlers to that territory, which was accompanied by the 
 rise of a heavy trade in tools and provisions. A stage-line was started 
 between Leavenworth and Denver to accommodate the gold-seekers 
 hurrying to the newly found deposits, and the next year (i860) the 
 line was continued to Salt Lake City. A line was already in operation 
 between that city and San Francisco, and thus regular passenger service 
 was established entirely across the United States.^ 
 
 There was no overland freight traffic to or from the Pacific coast. 
 The commerce of Cahfornia with other parts of the country, aside 
 from the sheep trade with New Mexico, was all carried on around 
 Cape Horn or across Central America. The internal trade within 
 California itself, however, was extensive. Mining camps in the 
 mountains drew from San Francisco their supplies of tools, machinery, 
 and food, which were shipped in boats up the Sacramento and San 
 Joaquin Rivers and hauled in wagons to the mining districts. The 
 freight rates on the rivers were ^75 a ton and the rates for land trans- 
 portation were simply enormous,* while passenger fares were strictly in 
 keeping with the charges for freight service. San Francisco was a 
 city of 58,802 in i860 and its manufacturing estabHshments turned out 
 more than ^19,000,000 worth of products, the most important of which 
 were flour, sawed lumber, sugar, and liquor,^ all made from products 
 carried to the city in boats and wagons. Only 30 miles of railroad 
 were to be found in California in i860, but the growth of industry and 
 commerce promised a rapid accumulation of capital that was to develop 
 
 ^Report on Internal Commerce. 1889, p. 566. Hbid., 1890, p. 853. 'Ibid., 1890, p. 123. 
 
 Hbid., 1890, p. 124. ^Ibid., 373. 
 
250 History of Domestic and Foreign Commerce. 
 
 a transportation system within the State as well as assist in the con- 
 struction of the transcontinental railroad line to connect the Far West 
 with the loyal States of the East. 
 
 SUMMARY. 
 
 The expansion of the volume of the internal trade of the United 
 States during this era of industrial and agricultural expansion more 
 than justified the expectations existing in 1830. The improvement of 
 the facilities for communication and transportation permitted a con- 
 tinually increasing accentuation of territorial division of labor, which 
 fostered the growth of mutual dependence between regions where geo- 
 graphic, social, or other conditions led naturally to the predominance 
 of a special type of industry. The manufacturing and commercial pop- 
 ulation of the Northeastern States was fed by the farm products of 
 the Central States, and the inhabitants of the Central States drew their 
 imported supplies, clothing, shoes, and large quantities of general mer- 
 chandise from the eastern markets. The South relied almost entirely 
 upon the North for food, manufactures, and imported goods. In i860 
 the wheat production in Florida, Alabama, Mississippi, Louisiana, 
 Arkansas, and Texas amounted to only a peck for each inhabitant. 
 Food for the entire cotton-belt was raised in northern fields, and the 
 clothing, tools, and machinery consumed in the Southern States were 
 made in northern factories. The North in turn bought from the South 
 raw materials for northern sugar and cotton industries, and northern 
 shipping interests carried to European markets the heavy exports of 
 southern cotton, the proceeds from which paid the southern debts in 
 Northern States and settled the large unfavorable balance of the 
 northern foreign trade. 
 
 Domestic trade was several times larger than the foreign trade. 
 Foreign exports comprised but a small fraction of the great volume of 
 wealth annually produced. In the treasury report of 1847-48, Secre- 
 tary Robert J. Walker said : 
 
 "The value of our products exceeds three thousand millions of dollars. 
 Our population doubles once in every twenty-three years and our products 
 quadruple in the same period. Of this $3 ,000,000,000 only about $1 50,000,000 
 are exported abroad, leaving $2,850,000,000 at home, of which at least 
 $500,000,000 are annually interchanged among the States of the Union." 
 
 In 1854 DeBow estimated the value of home and foreign commerce 
 at $1,500,000,000. It is probable that in i860 the interstate commerce 
 alone amounted to almost $1,000,000,000. 
 
 Israel D. Andrews gave the estimate of the amount and value of 
 domestic trade that is presented in table 16.^ 
 
 Before 1830 the chief problem in regard to internal commerce had 
 been the creation of a market for the agricultural produce of the great 
 
 ^Report on Colonial and Lake Trade (prepared in 1852), p 90S. 
 
Expansion of Internal Commerce, 1830 to i860. 251 
 
 central grain-belt. There was an urgent necessity for the develop- 
 ment of a non-agricultural population that would consume the super- 
 fluous supply of food products and give the farmers an opportunity to 
 exchange their grain for commodities which they could not produce for 
 themselves. During this period the development of manufacturing 
 in the North, the spread of cotton culture in the South, and the open- 
 ing of foreign markets to American grain created the demand for cereal 
 products and relieved the embarrassed agricultural interests of the grain 
 States. Of these three factors, the development of manufacturing was 
 by far the most important. As factories multiplied in the Northern 
 States, large industrial and commercial cities arose, and the population 
 
 Table 16. — Estimated tonnage and value of domestic commerce, iS^i and 18^2- 
 
 
 Net. 
 [Less duplications.] 
 
 Gross. 
 
 Tons. 
 
 Value. 
 
 Tons. 
 
 Value. 
 
 Estimate of 1851: 
 
 Lake commerce 
 
 River commerce 
 
 Aecresate . . 
 
 1,985,563 
 2,033,400 
 
 $157,236,729 
 169,751,372 
 
 3,971,126 
 4,066,800 
 
 1314,473,458 
 339,502,744 
 
 4,018,963 
 
 326,988,101 
 
 8,037,926 
 
 653,976,202 
 
 Estimate of 1852: 
 
 Coasting trade 
 
 20,397,490 
 9,000,000 
 5,407,500 
 
 1,659,519,686 
 594,000,000 
 540,750,000 
 
 40,794,980 
 18,000,000 
 10,815,000 
 
 3,319,039,372 
 1,188,000,000 
 1,081,500,000 
 
 Canal commerce 
 
 Railway commerce 
 
 34,804,990 
 
 2,794,269,686 
 
 69,609,980 
 
 5,588,539,372 
 
 
 of these great urban centers consumed the largest part of the surplus 
 produce of the farmer and provided the market so urgently needed. 
 The growth of the cotton industry in the South and the rise of the 
 foreign grain-trade were also important factors in the solution of the 
 problem of securing a market, but the amount of produce of the Central 
 States consumed in the South and in Europe was small in comparison 
 to the large shipments made to eastern manufacturing districts or 
 in comparison to the quantity consumed in the manufacturing and 
 commercial centers of the grain-belt itself. 
 
 To what degree the tariff legislation of 1824 and 1828 was responsible 
 for the growth of manufacturing in the United States has been a debata- 
 ble question. That manufacturing continued to grow after the tariff 
 had been reduced to what was almost a revenue basis is evidence that 
 protective duties were not needed to sustain the manufacturing indus- 
 tries, but whether these industries would have been started on as large 
 a scale without the encouragement afforded by the tariff legislation pre- 
 vious to 1830 is at least uncertain. Whatever may be the merits of" the 
 
252 History of Domestic and Foreign Commerce. 
 
 arguments concerning the tariff of this period^ the fact remains that the 
 development of manufacturing was the chief factor in solving the diffi- 
 culty of supplying a market for agricultural produce. Furthermore, 
 the enactment of the tariff laws of 1824 and 1828 represented an effort 
 on the part of the people to employ legislative measures to ameliorate 
 their economic condition. When it was no longer deemed necessary 
 to retain high import duties for the purpose of creating a market, the 
 policy of protection was gradually abandoned, and the provisions of 
 the tariff measures enacted in 1846 and 1857 were governed chiefly by 
 considerations in regard to the revenues of the Federal Government. 
 
 The problem of supplying adequate transportation facilities con- 
 tinued to confront the nation during this period, and in the solution of 
 this question the people employed their political institutions. Nearly 
 all of the numerous canals built throughout the country after 1825 
 and some of the earliest railroads of the Central States were public 
 enterprises undertaken by the State governments. However, the 
 States were financially and administratively unable to cope alone 
 with the transportation problem. Many of them embarked in unwise 
 costly ventures foredoomed to failure; bankruptcy and repudiation 
 followed, and the private corporation replaced the State in the field of 
 transportation. But though the corporations assumed the initiative 
 and control, they were unable to carry out their various projects alone, 
 and it was by means of generous aid given directly by local and State 
 governments, and indirectly by the Federal Government, that the 
 transportation system of the country was developed. 
 
 It was unfortunate that the Federal Government, while so active 
 in developing markets and providing transportation facilities, was not 
 equally active in attempting to establish a satisfactory currency sys- \ 
 tem. In 1837 the country was visited by a disastrous financial panic, 
 directly attributable to ill-advised financial administration by the 
 government and to extravagant speculation, much of which would 
 have been impossible had there existed a system by which the issue of 
 credit money could have been properly regulated. Again, in 1857, an 
 era of speculation culminated in a panic, which, however, was not so 
 severe nor so long protracted as that of 1837. Both these crises seri- 
 ously impeded industry and commerce, but because of the abundance 
 of real wealth in the country there was in neither instance a great 
 retardation of material progress. 
 
 On the whole, the period from 1830 to i860 was one of great pros- 
 perity and contentment. The wealth of the country grew enormously, 
 and for the most part it was equally distributed, there being few 
 paupers and few very rich individuals. The twenty years following 
 1840 have been called the "golden age',' of American history, and as 
 far as concerns the widespread diffusion of material comforts they 
 deserve the name. 
 
Expansion of Internal Commerce, i8jo to i860. 253 
 
 Notwithstanding the great material prosperity that attended the 
 country, however, the spirit of sectionalism which had arisen during 
 the contest over the adoption of the "American system" remained 
 strong even after the question of protection had practically ceased 
 to be an important political issue. FeeHng that the economic prog- 
 ress of the North had been effected largely at the expense of the South, 
 and fearful that the propaganda of the abolitionists and the success- 
 ful efforts of the northern political leaders to restrict the territorial 
 extension of slavery foretold the ultimate intention of destroying that 
 institution altogether, the southern people decided to sever the 
 political bonds between the two sections, the economic institutions 
 of which differed so widely, and to establish a separate State whose 
 political ideals would conform to the economic conditions and social 
 ideals of the South. This decision the South stood ready to enforce by 
 an appeal to arms; the people of the North preferring "to accept war 
 rather than that the nation should perish," made ready to prevent the 
 proposed dissolution of the Union; and the era of general happiness and 
 comfort ended amid the rumblings of the impending struggle. 
 
CHAPTER XV. 
 
 ECONOMIC DEVELOPMENT. 1860 TO 1900. 
 
 Changes produced by the Civil War, 254. Development of the United States from 
 i860 to 1900 in population and wealth, 256; in agriculture, 257; in mining, 262; 
 in lumbering, 263 ; in manufacturing, 263 ; in transportation, 266. 
 
 The Civil War marked a notable turning-point in the economic 
 history of the United States. National development since i860 has 
 been shaped to a large degree by fundamental political and economic 
 changes that occurred during the war — changes which were, for the 
 most part, the effect of various expedients resorted to by the Federal 
 Government to enable it to bring the struggle for the preservation of 
 the Union to a successful issue. To crush the military strength of 
 the South the Federal authorities adopted the expedient of the abolition 
 of slavery and, to the surprise of both the North and the South, "the 
 cause of the conflict ceased before the conflict itself," and the country 
 emerged from the war freed of the greatest obstacle to its social homo- 
 geneity. To secure revenue for the prosecution of the war, the duties 
 on imports were raised between 1861 and 1866 to an unprecedented 
 point, and when Congress failed, after the return of peace, to reduce 
 the tariff schedules to their old level, manufacturing interests found 
 themselves protected by a tariff so high that foreign competition 
 was largely eliminated. To secure needed aid in financing the costly 
 struggle. Congress established the national banking system, which 
 gave more uniformity to the currency and brought the financial centers 
 of the country into closer relation. The anxiety to connect the Atlantic 
 and Pacific coasts by rail led the Federal Government to adopt the 
 practice of granting large subsidies to the builders of great transconti- 
 nental railway lines. The stimulation which the war gave to manu- 
 facturing and transportation in the North and the shrewd manipula- 
 tion of the money market during the years of the national crisis made 
 possible the accumulation and concentration of large quantities of 
 capital funds under the control of a small number of persons. 
 
 It was inevitable that such radical changes would modify the course 
 of industrial progress. Because of the importance of slavery as the 
 underlying cause of the war, there has been a natural tendency to regard 
 its abolition as the most striking and significant net result of the great 
 conflict, but it is to be doubted whether the emanicipation of the negro 
 had as great an effect on subsequent economic development as the 
 other innovations, which were so obscured by the turmoil of the war 
 that they received but little attention and were regarded as being of 
 much less significance. The complete transformation in the tariff 
 254 
 
Economic Development, i860 to igoo. 255 
 
 policy of the nation permitted the growth of manufacturing to an 
 extent that likely would have been impossible had the war not occurred; 
 the construction of the transcontinental railroads had an immeasurable 
 effect on the development of the great region west of the Missouri River; 
 the concentration of capital provided the means by which industrial 
 enterprises could be carried out on a gigantic scale; the establishment 
 of a uniform currency and a better banking system accelerated the 
 growth of industry and trade. It is in these changes that is found the 
 explanation of much of the economic history of the United States since 
 the Civil War. 
 
 The period from i860 to 1900 was one of development and exploita- 
 tion. The years prior to the Civil War had been marked by the 
 advance of the political authority of the United States to the Pacific 
 Ocean, and at the same time the nation had enjoyed an era of notable 
 agricultural, industrial, and commercial prosperity, especially in the 
 States east of the Mississippi River. However, the tremendous possi- 
 bilities of the country were only beginning to be realized in i860 and, 
 remarkable as was the development before that year, it was completely 
 eclipsed by the amazing progress made during the latter part of the 
 century. An abundance of unoccupied land of rich and varied natural 
 resources, favorable climatic conditions, a complete absence of checks 
 on individual initiative and enterprise and of restrictions on internal 
 communication and trade, and the encouragement afforded to industry 
 by the liberal policies of the Federal Government all combined to create 
 exceptional economic opportunities. Labor, capital, and transportation 
 facilities alone were needed, and as these increased the wealth production 
 of the United States multiplied with great rapidity. The extension of 
 the railway system permitted the constant growth of agriculture and 
 rendered accessible the mineral and forest products in which the land 
 abounded; cheap and plentiful raw materials from field, mine, and forest 
 made possible a rapid increase of manufacturing. European immigrants, 
 eager to share in the wealth of the new world, poured in to recruit the 
 labor force necessary for the industrial conquest; and the invention and 
 application of labor-saving machinery of every description greatly 
 increased the effectiveness of the effort of each individual. All parts 
 of the country participated in the material progress. The South 
 recovered from the state of prostration in which it was left by the 
 ravages of the disastrous war, and became more prosperous and flour- 
 ishing than ever; the Northern States east of the Mississippi increased 
 their agricultural production and also became one of the greatest manu- 
 facturing and mining districts in the world; on the prairie lands west of 
 the Mississippi a new cereal kingdom was founded; the western plains 
 were converted into live-stock ranches; and the forests, orchards, and 
 grain-fields of the Pacific States proved to be greater sources of wealth 
 than were their mines of gold and silver. 
 
256 
 
 History of Domestic and Foreign Commerce. 
 
 A statistical account of the economic progress of the United States 
 from i860 to 1900 gives an idea of the rapid exploitation of the resources 
 of the country during that period, and while the figures involved in 
 such an account are of too great magnitude to convey an adequate 
 impression as regards the actual volume of national wealth, they 
 nevertheless afford a standard by which the growth of the country 
 may be measured and furnish a basis for comparing different times 
 and different sections. An understanding of the expansion of com- 
 merce from i860 to 1900 would be impossible without a knowledge of 
 the material progress that was made, and the story of the internal 
 trade will be preceded by a sketch of the economic development during 
 the last forty years of the century. 
 
 POPULATION AND WEALTH. 
 
 In the forty years following i860 the number of people in the United 
 States, exclusive of outlying possessions, rose from 31,000,000 to 
 76,000,000. Table 17 shows the total population of the continental 
 portion of the country and the number of inhabitants per square mile 
 at each census, with the percentage of increase for each decade from 
 i860 to 1900.^ 
 
 Table 17. — Number, density, and increase of population of the United States, 
 decennial censuses, iSdo-igoo. 
 
 Year. 
 
 Population. 
 
 Number of inhabi- 
 tants per square mile. 
 
 Percentage 
 of increase. 
 
 1860 
 1870 
 1880 
 1890 
 1900 
 
 31,443,221 
 38,558,371 
 50,155,783 
 62,622,250 
 76,303,387 
 
 10.8 
 13.3 
 17.3 
 21.2 
 25.6 
 
 35.6 
 22.6 
 30.1 
 24.9 
 20.7 
 
 The rate of increase of the number of inhabitants was considerably 
 less than it had been during the period before the war, but the decennial 
 increase in density of population was larger than it had been before. 
 In the section of the country east of the Mississippi, where the rapid 
 development of manufacturing, mining, and transportation created a 
 large demand for wage laborers, the greatest actual increase of numbers 
 occurred. Most of the 14,000,000 foreign immigrants who entered the 
 country during the four decades settled in this section, and they and 
 their descendants formed a large part of the added population. How- 
 ever, the rate of increase in the States east of the Mississippi was not 
 nearly so large as the rate of increase in the States west of the river, 
 and the actual increase of numbers in the western section was suffi- 
 ciently great to cause the center of population to advance steadily 
 
 'U. S. Census 1900, Fopulalion, I. 2-6. 
 
Economic Development, i860 to igoo. 257 
 
 nearer the Mississippi. The agricultural region between the river and 
 the western mountains began to fill up very rapidly after the war, and 
 the population of the western-central group of States rose in forty 
 years from 4,000,000 to 17,000,000. The movement to the Far West, 
 which had begun during the fifties, went constantly forward, and the 
 States along the Pacific coast and in the mountain section, with an 
 increase of population from a Httle more than 500,000 to more than 
 4,000,000, showed a higher rate of growth than any other section of 
 the country. 
 
 The wealth of the nation increased at a much more rapid rate than 
 the population. Between i860 and 1900, the total wealth of the 
 country, as given in the census reports, grew from ^16,159,616,000 to 
 $88,517,306,775, a per capita increase in the forty years from $514 to 
 $1,165.^ These figures convey some idea of the growth of the produc- 
 tive capacity of the people and of the material progress of the country as 
 a whole. It would be impossible to give a detailed account of the 
 innumerable industries to which the energies and resources of the 
 nation were devoted to create such a vast total; only some of the large 
 basic ones may be considered. 
 
 AGRICULTURE. 
 
 The growth of agriculture, which had been one of the most conspicu- 
 ous features of the development of the United States before i860, 
 proceeded on a still greater scale after the war. Within two decades 
 the country assumed the leading place among the nations of the world 
 in the production of grain and live-stock, maintaining at the same 
 time its supremacy as a producer and exporter of cotton and tobacco. 
 The chief reasons for the great increase in the farming industry were the 
 existence of an enormous area of fertile land, the application of machin- 
 ery to the cultivation of the soil, and the fact that foreign and domestic 
 markets expanded to a degree sufficient to absorb the greatly augmented 
 annual production. 
 
 West of the Mississippi River in i860 lay wide areas of rich soil 
 yet untouched by the plow. In 1862 the Homestead Act was passed, 
 by the provisions of which farms were granted without charge to 
 persons who would settle on the land and maintain a residence for at 
 least five years. The opportunity to secure a comfortable home on 
 siich easy terms was eagerly seized by thousands of people. During 
 the twenty years between i860 and 1880 the Federal Government gave 
 away 65,000,000 acres of land to various individuals; the "frontier" 
 disappeared before the advance of the sturdy "homesteaders;" and 
 much of the western prairie was transformed into grain fields. In the 
 western section of the Northern Central States, where the greatest agri- 
 
 ^Statistical Abstract of United States, 1911, p. 702. 
 
258 History of Domestic and Foreign Commerce. 
 
 cultural development took place, the population increased 4,000,000 
 in the twenty years following i860. In the rest of the region west of 
 the Mississippi the increase was but little less rapid, and by 1880 
 the wave of westward migration had swept across the continent. 
 During the remainder of the century the West continued to fill up 
 very rapidly. The less desirable grain-land was occupied, large tracts 
 of arid soil were irrigated and added to the cultivated area of the 
 country, and wide sections of the western plains were fenced off and 
 converted into sheep and cattle ranches. In i860 the total number 
 of farms in the United States was 2,044,077, comprising 407,212,538 
 acres of land. By 1880 the number of farms doubled, with a total 
 added area of 130,000,000 acres, and by 1900 there were 5,739,657 
 farms, with an acreage of 841,201,546,^ while the value of farm property 
 advanced duringthe forty years from $7,980,493,000 to $20,514,001,000. 
 
 This addition of 400,000,000 acres to the agricultural domain of the 
 nation would have been impossible had it not been for the rapid growth 
 in the use of agricultural machinery and the consequent transformation 
 in the methods of farming. Not only did the improved methods of 
 agriculture make possible the cultivation of a much larger quantity of 
 land, but they added greatly to the productivity of each unit of land 
 and labor, thereby cheapening the products of the farm for the con- 
 sumer without curtailing the profits of the farmer. 
 
 Before the Civil War broke out, the application of machinery to 
 agriculture had spread to a considerable extent. The withdrawal of a 
 large part of the labor-supply to recruit the armies greatly stimulated 
 the use of labor-saving devices while the war was in progress, and after 
 the return of peace the practice was continued on a still more extensive 
 scale. Improved cultivators, seeders, reapers, threshers, and other 
 machines, and the substitution of horse-power and steam-power for 
 manual labor multiplied the productive capacity of a single man more 
 than twelve fold in the half century between 1830 and 1880. The 
 value of farming implements in use increased from $246,000,000 in 
 i860 to $407,000,000 in 1880 and to $761,000,000 in 1900.^ 
 
 Of no less significance was the improvement of the mechanical 
 devices and the processes by which raw products of the farm were 
 handled, transported, and converted into commodities ready for the 
 consumer. The roller process of manufacturing flour made the spring 
 wheat of the Northeast superior to winter wheat as a breadstuff. The 
 devices for separating cotton seeds from the fiberwere greatly improved. 
 The methods of slaughtering live-stock and of packing and transporting 
 meats were revolutionized. The marketing of the annual product 
 of agriculture was made possible only by the use of unique devices by 
 which the various commodities could be handled and transported in a 
 safe, speedy, and economical manner. 
 
 HJ. S. Census 1900, Agriculture, I, xvU. ^Ibid., xxix. 
 
Economic Development, i860 to igoo. 
 
 259 
 
 The most striking feature of the new agricultural era was the rapid 
 expansion of the exportation of farm products, especially of cereals. 
 The development of the grain-raising industry subsequent to i860 
 gave rise to an annual product far in excess of domestic needs, and 
 it was fortunate for the farming interests and for the country as a 
 whole that it was found possible to dispose of the large yearly surplus 
 abroad. The exportation of grain in large quantities began during 
 the Civil War, when the grain States lost temporarily one of their 
 most important domestic markets. After the close of the war the 
 internal grain trade quickly surpassed its former proportions; but, 
 rapidly as the home market expanded, the increase of the volume of 
 production was considerably greater, and of the entire amount of 
 wheat raised in the country between 1870 and 1900, nearly a third 
 was sent abroad for consumption.^ The exportation of cotton, which 
 had constituted the most important part of the foreign trade in agri- 
 cultural products for several decades before i860, was almost com- 
 
 Table 18. — Cereal production in the United States, i860, 1880, 1900. 
 
 Census 
 year. 
 
 Production. 
 
 All cereals. 
 
 Corn. 
 
 Wheat. 
 
 Oats. 
 
 Rye. 
 
 Barley. 
 
 1860 
 1880 
 1900 
 
 bushels. 
 1,242,000,000 
 2,699,000,000 
 4,435,000,000 
 
 bushels. 
 839,000,000 
 1.755,000,000 
 2,666,000,000 
 
 bushels. 
 173,000,000 
 459,000,000 
 659,000,000 
 
 bushels. 
 173,000,000 
 408,000,000 
 943,000,000 
 
 bushels. 
 21,000,000 
 20,000,000 
 26,000,000 
 
 bushels. 
 
 16,000,000 
 
 44,000,000 
 
 120,000,000 
 
 pletely stopped while the war was in progress, but after 1865 it soon 
 regained and surpassed its former volume. More than two-thirds of 
 the cotton raised in the United States between 1865 and 1900 was 
 exported.** For the last quarter of the nineteenth century the United 
 States was the chief source of supply of food products for nations of 
 western Europe, as well as the chief source of supply of raw materials 
 for some of their most important industries. The increase in the vol- 
 ume of exports to Europe created and maintained a balance of trade 
 by which abundance of new capital was obtained for use in the United 
 States. Thus the growing foreign market not only made possible the 
 rapid agricultural progress, but furnished the means of creating and 
 expanding many other lines of industry. 
 
 Among the various products grown on the farms of the United States 
 after i860 the cereals held by far the most important place. The 
 advance in cereal production is shown by table i8.^ 
 
 The cereal crop of 1899 constituted nearly half of the total value of 
 all the crops raised in the country and almost a third of the total value 
 of all farm products of that year. 
 
 ^statistical Abstract of United States, 1911, p. 563. ^Ibid., p. 566. 
 
 'U. S. Census 1900, Agriculture, II, 64-89. 
 
26o History of Domestic and Foreign Commerce. 
 
 Corn was the leading grain, composing more than a half of the entire 
 cereal production. As an article of commerce, corn remained somewhat 
 less important than wheat, most of it coming to the market in the form of 
 beef, pork, poultry, or dairy products. The center of corn production 
 shifted rapidly westward during this period. In i860 Missouri was the 
 only State west of the Mississippi River that held a place among the 
 five leading corn-producing States. In 1870 and in 1880 Iowa held 
 second place, and in 1890 and 1900 four States west of the Mississippi — 
 Iowa, Kansas, Nebraska, and Missouri — ^were among the five leading 
 corn States. Every census from i860 to 1900 except one showed 
 Illinois as holding first place, the one exception being that of 1890, when 
 IlHnois lost precedence to Iowa. The shifting of the center of wheat 
 production was no less marked. Illinois still maintained the lead in 
 1880, but after that year the wheat-belt around the lakes rapidly lost 
 precedence to the great spring-wheat area of the northwest. In 1900 
 Ohio was the only State east of the Mississippi to rank among the five 
 leading wheat States, the other four being Minnesota, North Dakota, 
 South Dakota, and Kansas. The wheat crop of Minnesota alone in 
 1899 amounted to more than 95,000,000 bushels, a quantity almost 
 equal to the wheat production of the entire United States a half cen- 
 tury before. 
 
 The production of cotton in the United States was given in the 
 various census years as follows:^ 5,387,052 bales in i860; 3,011,996 
 
 in 1870; 5,755,359 in i88p; 7A7^,S^^ in 189°; 9.534707 in 1900- 
 
 The Civil War left agriculture temporarily prostrated in the cotton 
 States. Thousands of acres of land passed out of cultivation, the 
 majority of the large planters were ruined financially, and the evils of 
 the labor system during the "reconstruction" period made recovery 
 slower than it otherwise should have been. By 1880, however, the 
 South had regained its agricultural prosperity and the new era of small 
 farms, free labor, and cultivation by tenants was inaugurated which 
 brought about an even more rapid progress in the cotton-belt than 
 had occurred during the days of slavery. The failure to perfect cotton- 
 picking machinery prevented the development of cotton-culture at a 
 rate equal to that of the development of grain-raising in the North, 
 but the improvement of devices for planting, fertilizing, cultivating, 
 and handling the crops, and the utilization of the seeds, stalks, and 
 roots of the plant, which had formerly been discarded as waste, greatly 
 stimulated the industry and added largely to the profits of the planters. 
 Hay and forage continued to hold an important place among agri- 
 cultural products. The development of the dairy business, the increase 
 in the number of draft animals used on farms, and the growth of the 
 cattle-raising industry in the West made necessary the production of 
 hay in large quantities, and while it was not as important an article of 
 
 'U. S. Census 1900, Agriculture, II, 425. 
 
Economic Development, j86o to igoo. 
 
 261 
 
 commerce as many other farm products, it took high rank as to total 
 value. The crop increased from 19,000,000 tons in 1859 to 79,000,000 
 tons in 1899, ranking in value next to corn among the agricultural 
 products of the latter year.^ 
 
 The production of tobacco increased from 434,000,000 pounds in 
 1859 to 868,000,000 pounds in 1899, Kentucky leading in this article 
 at every census year following that of 1860.^ Cane sugar and rice were 
 other important commodities of the South, the production of both 
 nearly doubling in the four decades. 
 
 The live-stock in the United States increased in value from 
 $1,089,000,000 in 1859 to $3,078,000,000 in 1899,^ when it composed 
 1 5 per cent of the total value of the farm property of the nation. No 
 country in the world made use of so many horses in farm work as the 
 United States, and no country raised so many animals to be converted 
 into food for human consumption. The greatest live-stock belt was 
 developed in the Northern Central States, where the immense crops 
 of corn were used to fatten hogs and cattle for the meat-packing 
 industry. Great improvement was made in the breeds of all kinds 
 of live-stock, the period of feeding was reduced, and the entire live- 
 stock business was placed on a scientific basis. Improved methods 
 of refrigeration made meat-packing possible in summer as well as in 
 winter, and the introduction of the refrigerator car in 1869 made it 
 possible within a few years to ship to the most distant markets the 
 fresh meats prepared in the great packing centers of the Central States. 
 
 Among the most important products of the farm were butter, cheese, 
 milk, poultry, and eggs. Table 19 shows the amounts of these com- 
 modities produced in i860, 1880, and 1900:^ 
 
 Table 19. — Dairy and poultry products in the United States, i860, 18S0, igoo. 
 
 Product. 
 
 I860 
 
 1880 
 
 1900 
 
 Butter Dounds 
 
 459,681,000 
 103,664,000 
 
 806,672,000 
 243,158,000 
 1530, 129,000 
 125,507,000 
 456,911,000 
 
 1,491,872,000 
 248,345,000 
 
 7,266,392,000 
 250,682,000 
 
 1,293,819,000 
 
 
 
 Chickens and other fowls, number. . . 
 
 
 
 
 
 'Amount sold. 
 
 The value of the butter, milk, and cheese produced in the United 
 States in 1899 was $472,000,000,* a sum greater than the value of any 
 single agricultural crop except corn and hay, and the value of the 
 poultry and eggs, amounting to $281,000,000, was almost equal to the 
 value of the cotton crop. In the case of these commodities, too, 
 
 •U. S. Census, 1900, Agriculture, II, 526. 
 'Statistical Abstractof UnitedStates, 1911, pp. 150-156. 
 
 ^Ibid., I, 700. 
 
 *U. S. Census 1900, Agriculture, I, cxxi. 
 
262 
 
 History of Domestic and Foreign Commerce. 
 
 improved methods of handling and transportation were adopted which 
 widened the extent of the market accessible to the sections producing 
 them in large quantities, and consequently added to their commercial 
 importance. 
 
 MINING. 
 
 No less impressive than the progress of agriculture in the United 
 States between i860 and 1900 was the development of the mining 
 industry, though unfortunately the exploitation of the mineral resources 
 of the continent during the period was characterized by wastefulness 
 and extravagance. Those minerals which form the basis of modern 
 industry — coal, iron, and copper — no country in the world possesses 
 in larger quantities than the United States; and in the production of 
 precious metals, gold and silver, of the mineral fuels, petroleum and 
 gas, and of other important commercial minerals such as lead, alumi- 
 num, phosphate of lime, zinc, stone, gypsum, sulphur, and clays, the 
 country has a high rank. The total value of the output of the mines 
 in the United States rose from $218,598,994 in 1870 to $1,107,031,392 
 in 1900, an increase of 400 per cent.^ The increase in the production 
 of the most important minerals is shown in table 20.^ 
 
 Table 20. — Quantities of important minerals produced in the United States, i860, 1880, IQOO. 
 
 Product. 
 
 1860 
 
 1880 
 
 1900 
 
 Coal, long tons 
 
 13,044,680 
 7,200 
 
 63,822,830 
 
 27,000 
 
 7,120,362 
 
 26,286,123 
 
 1215,000 
 
 23,239 
 
 240,789,310 
 
 270,588 
 
 27,553,161 
 
 63,620,529 
 
 23,698,674 
 
 123,886 
 
 7,150,000 
 
 Copper, long tons 
 
 Iron ore, long tons 
 
 Petroleum, barrels 
 
 Natural gas, dollars 
 
 Zinc, short tons 
 
 Aluminum, pounds 
 
 500,000 
 
 
 
 
 
 'Year 1882. 
 
 In the production of coal, iron, and copper the United States easily 
 led all other nations of the world at the end of the century. In i860 
 the quantity of anthracite coal mined exceeded that of bituminous, 
 but before 1880 the production of the latter was considerably greater 
 than that of the former, and by 1900 was nearly four times as large. 
 Pennsylvania continued to be the only State in which anthracite was 
 mined in large quantities, and it also maintained the lead in the pro- 
 duction of bituminous, its output of 71,000,000 tons in 1900 being 
 three times that of Illinois, its nearest competitor. Coal-fields were 
 developed in practically every Northern State from Pennsylvania to 
 Utah, and the deposits of Alabama, Tennessee, New Mexico, Arkansas, 
 Kentucky, and Virginia contributed more than a tenth of the total 
 
 ^statistical Abstract of United States, 1911, p. 737. 
 
 Hbid., p. 735. 
 
Economic Development, i860 to igoo. 263 
 
 output of soft coal in the United States in 1900.^ The abundance of 
 cheap fuel permitted a rapid utilization of the rich deposits of iron in 
 Pennsylvania, Alabama, and the Lake Superior district. The copper 
 deposits of the Lake Superior region, which contributed most of the 
 output before the war, were worked on a much greater scale during the 
 latter part of the century, and the mines of Montana and Arizona, 
 opened after 1880, became an important factor in the production of 
 this valuable metal. The petroleum field of Pennsylvania, tapped 
 first in 1859, was the only one developed largely before 1880, but ten 
 years later the output of Ohio was almost as large as that of Pennsyl- 
 vania, and in 1900 the important fields in West Virginia, Indiana, 
 and California were each contributing several million barrels of oil 
 yearly. Crude oil and its products became important factors in domes- 
 tic and foreign trade, as well as the basis of important manufacturing 
 industries. The discovery of natural gas revealed a further source of 
 fuel supply, and was followed by a conspicuous growth of manufactur- 
 ing in the Northern Central States, the territory in which gas was 
 first found in abundance. 
 
 The value of the gold production of the United States averaged 
 nearly $40,000,000 a year from i860 to 1900. The output of the silver 
 mines never fell below an annual amount of $31,000,000 after 1872. 
 Practically all of the output of both metals came from the Western 
 States. 
 
 LUMBERING. 
 
 The forests of the country were subjected to the same rapid exploita- 
 tion as the other natural resources and in a manner yet more extrava- 
 gantly wasteful. Extensive building operations, the construction and 
 maintenance of an enormous mileage of railway track, and the growth 
 of manufacturing created a heavy demand for timber, and by 1900 the 
 annual cut amounted to nearly 35,000,000,000 feet. The northeastern 
 group of States, which had formed the chief source of the lumber-supply 
 before i860, lost precedence by 1880 to the Lake States of Michigan, 
 Minnesota, and Wisconsin, and this section in turn was surpassed by 
 the Southern States by 1900, the yellow pine of that section comprising 
 more than a fourth of the production of the entire country. The 
 timber-lands of the Pacific States contributed more than 2,000,000,000 
 feet each year after 1890.^ 
 
 MANUFACTURING. 
 
 The most significant feature of the economic history of the United 
 States between i860 and 1900 was the rise of manufacturing. Previous 
 to this period the country had been primarily agricultural. It has 
 
 ^Statistical Abstract of United States. 1911, p. 216. Ibid., p. 167. 
 
264 History of Domestic and Foreign Commerce. 
 
 already been recounted how the inabihty to dispose of surplus farm 
 produce abroad had led in the early twenties to the adoption of a 
 system of protective tariffs to encourage manufacture. When resulting 
 expansion of manufacturing industries and the removal of foreign 
 restrictions on the entry of American agricultural products had brought 
 relief to the agricultural interests, the necessity of encouraging the 
 growth of manufacturing at a faster rate than would have occurred 
 under normal conditions had been obviated and the practice had been 
 discontinued. The result had been a tendency in the United States to 
 invest capital in all varieties of industry. Consequently economic 
 development before i860 had been in the main symmetrical. Agri- 
 culture had maintained the lead because physical conditions gave it 
 a peculiar advantage; ship-building and shipping had grown steadily, 
 reaching a point of maximum development just at the opening of the 
 war; manufacturing, too, had increased largely, but the increase had 
 not been due, after 1846 at least, to any conditions tending to give it 
 an unnatural advantage in the competition for capital. 
 
 This situation the war abruptly changed. In the first place, the 
 armies demanded large quantities of clothing, arms, wagons, and other 
 military supplies and the manufacture of these articles was greatly 
 stimulated. In the second place, one of the most important sources 
 of profits of the northern shipping interest, the carrying trade between 
 the Southern States and Europe, was suddenly cut off, and though the 
 export trade of the North Atlantic ports expanded somewhat, the 
 increase was not nearly enough to overcome the reduction in the total 
 foreign trade occasioned by the loss of southern exports and the 
 decrease in imports. The changes which occurred in New England 
 after the enactment of the tariff of 1824 were repeated on a larger 
 scale. Capital hitherto invested in foreign trade was invested else- 
 where, many sailors entered the navy or engaged in other occupations, 
 and the tonnage of the merchant marine of the United States engaged 
 in foreign trade fell more than 1,000,000 tons, almost 45 per cent, 
 between 1861 and 1866. And finally, the imposition of heavy tariffs 
 while the war was in progress greatly enhanced the profits to be derived 
 from manufacturing by insuring a domestic market free from foreign 
 competition. 
 
 Had Congress, after the close of the war, reduced the tariff schedule 
 to the level of i860, it is probable that a flood of foreign imports, similar 
 to that following the war of 1812, would have swamped many of the 
 new manufacturing plants, and the subsequent economic history of 
 the United States would have more nearly resembled that before the 
 war. But the southern influence which had been able to compel the 
 tariff compromises after 1830 was absent in 1865, and the northern 
 sentiment against protection was unable to muster sufficient strength 
 to counteract the powerful influence brought to bear upon Congress 
 
Economic Development, i860 to igoo. 
 
 265 
 
 to make the war tariffs a permanent part of the national program. 
 The result was inevitable. Manufacturing almost immediately became 
 the dominant industry, because it promised the largest returns on 
 investments. The value of the manufactured products of the United 
 States increased 124 per cent between 1859 and 1869, exceeding the 
 value of the total products of agriculture for the latter year by 
 $2,250,000,000. The decHne of the merchant marine engaged in 
 foreign trade has continued unchecked to the present day, and though 
 agriculture, for reasons given before, has continued to expand wonder- 
 fully, its growth was far less rapid than that of manufacturing. 
 
 The rapid rise of manufacturing between i860 and 1900 is shown in 
 table 21.^ 
 
 Table 21. — Growth of manufacturing in the United States. Decennial censuses, i860 to igoo. 
 
 Census 
 year. 
 
 Capital invested. 
 
 Wage-earners 
 employed. 
 
 1 
 Value of prod'-cts. 
 
 1860 
 1870 
 1880 
 1890 
 1900 
 
 11,009,855,715 
 2,118,208,769 
 2,790,272,606 
 6,525,156,486 
 9,817,434,799 
 
 1,311,246 
 2,053,996 
 2,732,595 
 4,251,613 
 5,308,406 
 
 $1,885,861,676 
 4,232,325,442 
 5,369,579,191 
 9,372,437,283 
 
 13,004,400,143 
 
 Of course, the radical change in the tariff policy was not alone 
 responsible for the great industrial expansion. The growth of manu- 
 facturing in the United States would have been impossible without 
 a corresponding growth of the domestic market for manufactured 
 commodities, and the mere fact that foreign competition was largely 
 excluded was not the cause of the expansion of the domestic market. 
 Indeed, the elimination of competition permitted such high prices that 
 without the influence of other important factors in the industrial evolu- 
 tion of the country the effect of the policy of seclusion might have 
 been to arrest rather than to hasten development. The enormous 
 increase of agriculture throughout the entire country, and particu- 
 larly in the West and South, was the chief factor in the creation of a 
 large home market for manufactured goods of every description. 
 Furthermore, great natural resources offered an apparently unlimited 
 supply of raw materials and cheap fuel. The self-sufficiency of the 
 nation enabled it to carry out a program of industrial independence 
 that could have been attempted in but few other countries. Further- 
 more, in manufacturing as in agriculture, acting as both cause and 
 effect, there was a steady evolution in methods of production. Grow- 
 ing dependence on steam and electricity as sources of motive power, 
 discoveries of new processes, invention of mechanical devices of every 
 description and improved means of transportation and communication 
 were all potent factors in this epoch of progress. 
 
 'U. S. Census 1900, Manufactures, I, xlvii, 3. 
 
266 
 
 History of Domestic and Foreign Commerce. 
 
 The increase of the value of manufactures produced in various 
 sections of the country was as shown in table 22.^ 
 
 Table 22. — Value of manufactured products in the United States, i860, 1880, iqoo. 
 
 
 1860 
 
 1880 
 
 1900 
 
 New England States 
 
 Middle States 
 
 $468,599,287 
 
 802,338,392 
 
 193,462,521 
 
 341,710,554 
 
 7,114,012 
 
 72,636,910 
 
 $1,106,158,303 
 
 2,219,072,594 
 
 338,791,898 
 
 1,502,637,308 
 
 72,518,749 
 
 130,400,399 
 
 $1,875,792,081 
 
 4,957,874,935 
 
 1,184,398,684 
 
 4,000,817,987 
 
 555,482,428 
 
 435,670,399 
 
 Southern States 
 
 Central States 
 
 Western States 
 
 Pacific States 
 
 
 The States along the Atlantic coast maintained the lead in manu- 
 facturing, but the increase in the Central States was larger than in the 
 East, and since 1880 there has been a distinct period of progress in 
 manufacturing in the South. The census of 1900 showed that in 27 
 States the value of manufactured products was more than ^100,000,000, 
 and in4 States — New York, Pennsylvania, Illinois, and Massachusetts — 
 the value was more than ^1,000,000,000.^ Fifteen cities were reported 
 in 1900 as having each produced more than $100,000,000 of manu- 
 factures, New York leading with a product valued at $1,371,000,000, 
 and Chicago and Philadelphia ranking second and third respectively.^ 
 
 All the manufacturing industries of the country were grouped in the 
 census report of 1900 under 15 headings, ranking in order of the value 
 of their products as follows: food and kindred products, iron and steel 
 and their products, textiles, hand trades, lumber and its manufactures, 
 miscellaneous industries, metals and metal products other than iron 
 and steel, paper and printing, leather and its finished products, chem- 
 icals and allied products, vehicles for land transportation, liquors 
 and beverages, clay, glass and stone products, tobacco, ship-building.* 
 The first four of these groups each showed an output of more 
 than $1,000,000,000, that of food and kindred products alone being 
 $2,777,702,000. Of the single industries comprising these groups 
 there were 33 having an output in 1899 of more than $100,000,000 
 and 22 more with an output of more than $50,000,000. Iron and steel 
 products took the leading place with a total value of $804,000,000, and 
 next in order were slaughtering and meat-packing, foundry and 
 machine-shop work, lumber and timber products, and flouring and 
 grist-mill products, each valued at more than $500,000,000.^ 
 
 TRANSPORTATION. 
 Simultaneously with the expansion of agriculture, the exploitation of 
 forest and mineral resources and the rise of manufacturing in the United 
 States, partly as an effect of them but almost equally a cause, came 
 the development of the great transportation system of the country. 
 
 •U. S. Census 1900, Manufactures, I, clxxiii. Hbid., clxxxii. 
 
 *Ibid., cxlv. ^Ibid., clxiii. 
 
 'Ibid., ccxxxv. 
 
Economic Development, i860 to IQOO. 267 
 
 The period of i860 to 1900 was the era of the railroad. Before 
 the Civil War, the superiority of the steam railway over rivers and 
 canals had been demonstrated. The decade from 1850 to i860 had 
 witnessed the completion of a comprehensive railroad system in the 
 Northern States east of the Mississippi River. Many lines had been 
 planned in the South, but construction had not been especially active, 
 except in those States along the Atlantic coast. Only six States west 
 of the Mississippi possessed any railway lines in i860, and two of these, 
 California and Arkansas, had less than 50 miles. Not a single foot of 
 track had been laid between the Missouri River and the Rocky Moun- 
 tains. However, railway building was constantly becoming more 
 active, and plans were afoot to make large additions to the existing 
 mileage when the Civil War broke out and suddenly checked most of 
 the railroad building that was in progress. 
 
 Almost immediately after the war ended there began a period of 
 rapid and extensive construction. The entire country was seized with 
 a mania for railroad speculation. Over 35,000 miles of track were 
 laid between 1865 and 1874, an increase of almost exactly 100 per 
 cent in the total mileage of the country. It was during this time 
 that the first transcontinental railroad, begun in 1864 and built largely 
 by means of the liberal aid given by the Federal Government, was 
 completed (1869). Unfortunately, the enormous increase in the rail- 
 way mileage during these years was considerably in excess of the needs 
 of the country, and the speculative fever which attended the expansion 
 resulted in the severe financial crisis of 1873. 
 
 Following 1873 there was a period of business depression lasting 
 for five years, during which there was little railway building. This 
 was followed by a second and much greater revival. Between 1878 
 and 1890 over 85,000 miles of new line were added to the railway 
 system, the total number of miles in the latter year reaching 167,191.^ 
 Four more transcontinental lines were completed and others partly 
 built; the region between the Mississippi and Missouri Rivers and the 
 plains of the Southwest were supplied with railroads, many new lines 
 were added in the Southern States, and the trackage was greatly 
 increased in New England and in the trunk-line territory. Many of 
 the western roads were constructed in advance of the settlement of the 
 country, the builders relying on subsequent development of the land 
 for the creation of traffic for their lines. 
 
 By 1890 railroad construction had reached a point where there was 
 no longer a need for such a rapid extension as had occurred during the 
 previous ten years, and the annual increase of mileage began to decline. 
 This decline was accentuated because of the severe financial depression 
 following the panic of 1893 . Not only was further construction almost 
 halted, but existing roads suffered losses because of decreased traffic 
 
 ^Statistical Abstract of United States. 1911, p. 745. 
 
268 History of Domestic and Foreign Commerce. 
 
 and many of those built during the prosperous years of the preceding 
 decade were forced into bankruptcy. The return of prosperity in 
 1898, however, saw a slight rise in the rate of annual increase of mileage. 
 In 1900 there were 198,964 miles reported in the entire country.^ 
 
 The increase in mileage was attended by a constant improvement in 
 the physical elements of the railway. The roadbeds were made more 
 substantial, rails of wood and iron gave way to all-iron rails, and 
 these in turn were succeeded by the rails of steel, the quality and weight 
 of which were steadily increased; the high-speed passenger locomotive, 
 the heavy freight engine, the improved passenger coaches, the large 
 freight cars used for ordinary traffic, the many types of freight cars 
 designed for special kinds of traffic, and the numerous mechanical 
 devices for promoting safety, comfort, and economy were all evolu- 
 tionary products of this period. The complex freight terminal, the 
 yards, buildings, and mechanical equipment which are of such impor- 
 tance in freight transportation, developed during these years, and the 
 modern passenger terminal came into existence in response to the needs 
 created by the rapid expansion of great urban centers. 
 
 The important results of the steady growth of railways and the 
 improvement of their equipment were an improved service and re- 
 duced charges. At the close of the period before the war it had 
 been demonstrated that railroads could carry economically high-grade 
 freight such as flour, live-stock, lighter manufactured goods, and general 
 merchandise, but as yet they had not been able to compete success- 
 fully with waterways in the transportation of grain, and the carriage for 
 long distance of low-grade freight such as coal and ore had not been 
 attempted. As the railway developed, however, its use was extended, 
 and it was found in a few years that there was no commodity so cheap 
 that it could not be profitably handled. Accompanying this extension 
 of the service to include all kinds of bulky freight was an uninterrupted 
 decline in the general level of transportation rates on all classes of 
 goods, resulting from the increased efficiency of the roads, the struggles 
 of competing lines, and above all from the tremendous increase of 
 traffic. The receipts per ton per mile on the entire amount of freight 
 carried decreased by more than one-half between 1867 and 1897,^ 
 the average charge falling from 1.92 cents to about 0.80 cent. More- 
 over, the charges were not in exact proportion to distance carried, the 
 rate per mile usually being lower for longer hauls. This reduction of 
 transportation charges was one of the most potent factors determining 
 the course of economic growth. Field, mine, forest, factory, and store 
 were linked together into a unified whole; raw materials could be con- 
 centrated at any point; and there was practically no limit to the extent 
 of the market for finished commodities. 
 
 ^statistical Abstract of United Stales, 1911, p. 745. 
 
 ^For a statement of the costs of transportation in this period consult the documents attached 
 to Gallatin, "Report on International Improvements," in American State Papers, Miscellaneous, 
 I. especially the letter of Robert Fulton, p. 917. 
 
MAP 4. 
 
 Digitized by IVIicrosoft® 
 
Economic Development, i860 to igoo. 269 
 
 As the railway system developed and railroad rates declined, trans- 
 portation on most of the inland waterways of the country, which had 
 been so important in earlier times, diminished. Though for almost a 
 score of years after the war the traffic on the most important rivers and 
 canals became somewhat larger, in no case did the increase compare 
 favorably with the growth of railroad traffic or keep pace with the 
 commercial progress of the country as a whole.^ After 1880 there was 
 a gradual absolute decrease of nearly all canal and river traffic. Nearly 
 1,700 miles of canals were abandoned between the years i860 and 1900.^ 
 In New York the railroads reduced the proportion which canal freight 
 bore to the entire freight tonnage carried across the State over canals 
 from 44 per cent in 1868 to 5 per cent in 1898.' In the value of ton- 
 nage transported the reduction was even greater, the canal traffic 
 gradually becoming limited to heavy bulky commodities. 
 
 Transportation upon the Mississippi River system suffered a similar 
 decline. Though after the war there was a brief period of prosperity, 
 during which manylarge steamboats were built and profitably operated, 
 yet there was a large relative loss to the railroads. DeBow's prophecy 
 that the railways would handle traffic on the very banks of the river 
 was literally fulfilled, and though the Federal Government spent many 
 millions of dollars to improve the Mississippi, it failed to check the 
 decay of the river commerce. The entire freight carried on all the 
 rivers of the Mississippi Valley in 1889 amounted to 29,405,000 tons,* 
 and the traffic ten years later was probably less. Considerably more 
 than half of this tonnage was carried on the Ohio River and its tribu- 
 taries, the coal traffic out of Pittsburgh being almost the only freight 
 that the river was able to compete for successfully with the railroads.^ 
 
 Though the commerce on the canals and rivers sunk in importance, 
 that on the Great Lakes thrived and expanded under the unusually 
 favorable conditions prevailing for the development of traffic on those 
 bodies of water. The iron and copper mines, forests, and grain-fields 
 around Lake Superior furnished an enormous tonnage for water trans- 
 portation to the manufacturing districts around lower Lake Michigan 
 and Lake Erie, and a considerable quantity of coal and merchandise 
 was carried westward to the interior. The sail and steam tonnage on 
 the lakes rose from 390,000 in 1870 to 1,441,000 in 1900,^ and the cargo 
 tonnage for the latter year was more than 45,000,000. The rate of 
 growth of lake traffic compared favorably at all times with that of the 
 traffic on railways. 
 
 ^Preliminary Report of Inland Waterways Commission, 227; Report on Internal Commerce of 
 United States, 1876, pp. 101-119. 
 
 ^Preliminary Report of Inland Waterways Commission, 204-209. 'Ibid., 217. 
 
 *U. S. Census 1890, Transportation by Water. 435. In 1906 the traffic had fallen to 27,856,000 
 tons. (See Preliminary Report of Inland Waterways Commission, 133, and U. S. Census 1906, 
 Transportation by Water, p. 33.) 
 
 ^Preliminary Report of Inland Waterways Commission, 118. 
 
 'U. S. Census 1906, Transportation by Water, 122. 
 
CHAPTER XVI. 
 INTERNAL TRADE. 1860 TO 1900. 
 
 Broad scope of internal trade of the United States, 1860-1900, 270. Trade in 
 cereals and flour, 271. Live-stock and animal products, 276. Cotton, 278. Other 
 farm products, 282. Coal, 283. Iron ore, iron, and steel, 285. Other minerals, 
 286. Forest products, 287. Progress of manufactures, 290. Growth of the volume 
 of internal commerce, 293. Summary, 293. 
 
 Commerce has been well defined as taking things from where they 
 are plentiful to where they are needed. This being true, the volume 
 of internal commerce of any country must invariably depend upon the 
 number of its population, the total volume of its production, the sec- 
 tional diversity of its products, the efficiency and cheapness of its trans- 
 portation, and the freedom from foreign competition in the sale of 
 native commodities in home markets. In the economic progress of 
 the United States from i860 to 1900 there was a continuous and rapid 
 development of all the requisite factors for the existence of a large 
 internal trade. Population more than doubled, annual production per 
 capita quadrupled, the sectional diversity of products became more 
 pronounced, and the transportation system developed to a degree 
 that afforded the utmost fluidity of movement to all articles of trade. 
 Furthermore, the range of movement of internal trade was greatly 
 widened by the settlement of the vast expanse of new country west of 
 the Mississippi River. 
 
 This extension of the area over which trade flowed and the develop- 
 ment of the railroad as the chief agency for transportation gave to the 
 internal commerce of this period a character widely diff"erent from that 
 of the commerce of previous years. Before i860 the extent of the 
 populated area of the United States and the facilities for transportation 
 were such that the bulk of internal trade followed two distinct routes: 
 an east-and-west route over the Erie Canal or the trunk-line railroads, 
 and a north-and-south route over the waters of the Mississippi River. 
 Consequently internal-trade movements were comparatively simple, 
 and it was practicable to study them geographically. The westward 
 movement of the population and the development of the great railway 
 net completely put an end to the simplicity which characterized the 
 trade of the period before i860. The old lines of trade were modified 
 or swept away. In the course of time direction and distance ceased 
 to exercise a profound influence on commercial intercourse. The rail- 
 road permitted a north-bound movement of traffic in the Mississippi 
 Valley which in time reached the volume of the south-bound movement; 
 eastern cities made overland shipments of manufactures and merchan- 
 dise to San Francisco and secured from that city the fruit and lumber 
 270 
 
Internal Trade, i860 to igoo. 271 
 
 of California and the teas and spices of the Orient. Every section 
 could exchange its products directly for the products of any other 
 section. Rival producers separated by long distances invaded the 
 local territory of one another. 
 
 • The wide extent of the internal trade and the complexity of its 
 movements during this period render it impracticable to deal with it in 
 the manner adopted in previous chapters, and therefore the subject 
 will be approached in a different manner. First, separate studies will 
 be made of the trade in several of the great commodities which con- 
 stitute most of the materials of commerce; following this will be a 
 brief discussion of the total volume of internal trade; and finally a 
 short conclusion dealing with the most vital economic and political 
 problems connected with commercial development during the forty 
 years. 
 
 CEREALS AND FLOUR. 
 
 The history of the grain trade from i860 to 1900 centers around the 
 receipts and shipments at the great primary grain markets situated 
 on the Great Lakes and the rivers of the upper Mississippi Valley. 
 Already by i860 the region around the lakes had assumed the lead in 
 the production of cereals and several cities of the Northern Central 
 States, chief among which were Chicago, St. Louis, Cincinnati, Mil- 
 waukee, and Toledo, had become large primary markets where great 
 quantities of grain and flour were concentrated to be shipped to domes- 
 tic markets in the South and East for home consumption and to the 
 seaboard for exportation to foreign nations. As cereal production 
 increased and the center of production moved westward, other markets 
 further to the north and west assumed a position of importance in the 
 handling of the great volume of surplus grain. 
 
 In 1900 the chief surplus cereal area of the United States comprised a 
 vast stretch of territory included in a semicircle described by a southern 
 and western sweep of a compass moving on a radius extending from 
 Duluth to BuiFalo.^ Of the 4,500,000,000 bushels of grain produced 
 in the United States in 1899, three-fourths were raised in the twelve 
 States embraced in this territory. The ten most important primary 
 grain-markets in the region, each of which was receiving annually 
 from 10,000,000 to 300,000,000 bushels of grain, were Chicago, Minne- 
 apolis, Duluth-Superior, St. Louis, Milwaukee, Toledo, Kansas City, 
 Peoria, Cincinnati, and Detroit. From each of these points there 
 radiated toward the north, south, and west a network of railways over 
 which grain came from the farming districts and over some of which 
 there was a return movement of flour and grain for domestic con- 
 sumption or for exportation from southern seaports, while stretching 
 to the eastward were numerous rail and water lines by which a large 
 
 ^Report of Indtistrial Commission, 1900, VI, 37. 
 
272 
 
 History of Domestic and Foreign Commerce. 
 
 cereal and flour trafiic was carried to the manufacturing districts and 
 exporting cities of the Atlantic States. Table 23 shows the receipts 
 and shipments of grain at Chicago during census years from 1 860.^ 
 
 Table 23. — Receipts and shipments of grain a Chicago, 1860-IQ00. 
 
 Year. 
 
 Flour. 
 
 Wheat. 
 
 Corn. 
 
 Receipts. 
 
 Shipments. 
 
 Receipts. 
 
 Shipments. 
 
 Receipts. 
 
 Shipments. 
 
 1860 
 1870 
 1880 
 1890 
 1900 
 
 barrels. 
 
 713,348 
 1,766,037 
 3,215,389 
 4,358,058 
 9,313,591 
 
 barrels. 
 
 698,132 
 1,705,977 
 2,862,737 
 4,131,586 
 7,396,697 
 
 bushels. 
 14,927,083 
 16,394,409 
 23,541,607 
 14,248,770 
 48,048,298 
 
 bushels. 
 12,402,197 
 16,432,585 
 22,796,288 
 11,975,276 
 36,649,956 
 
 bushels. 
 15,862,394 
 20,189,775 
 97,272,841 
 91,387,754 
 134,663,456 
 
 bushels. 
 13,700,113 
 17,777,377 
 93,572,934 
 90,574,379 
 111,099,653 
 
 Year. 
 
 Oats. 
 
 Total grain, flour reduced to wheat. 
 
 Receipts. 
 
 Shipments. 
 
 Receipts. 
 
 Shipments. 
 
 I860 
 
 bushels. 
 
 2,198,889 
 
 10,472,078 
 
 23,499,915 
 
 75,150,249 
 
 105,226,761 
 
 bushels. 
 
 1,091,698 
 
 8,507,735 
 
 20,649,427 
 
 70,768,222 
 
 77,554.695 
 
 bushels. 
 
 37,235,027 
 
 60,432,574 
 
 165,855,370 
 
 219,052,518 
 
 349,637.295 
 
 bushels. 
 
 31,108,759 
 
 54,745,903 
 
 154,377,115 
 
 204,674,918 
 
 265.552.246 
 
 1870 
 
 1880 
 
 1890 
 
 1900 
 
 
 
 
 
 
 
 
 
 1 
 
 Table 23 is given as an illustration of the growth of the internal 
 cereal trade. Though the receipts and shipments at the markets east 
 of Chicago did not increase at such a rapid rate, there was nevertheless 
 a steady increase at all of them until the close of the century,^ and at 
 the markets farther west the rate of growth was even greater than that 
 at Chicago. The volume attained by the grain trade by 1900 is 
 indicated by table 24, showing the receipts and shipments for that year 
 at the principal primary markets.^ 
 
 The development of the grain trade during this period was marked 
 by the same commercial rivalry among cities and the same competition 
 among transportation routes that characterized the trade of the two 
 decades preceding the Civil War. Before i860 the contest between the 
 southern and eastern routes to the seaboard had resulted in a victory 
 for the latter. The grain received at New Orleans, little of which 
 came from points farther north than St. Louis, had fallen to a volume 
 little more than sufficient to satisfy the demands of the surrounding 
 cotton plantations, and both the coasting and export trade of the 
 southern port had been considerably reduced.^ The outbreak of the 
 war put a temporary stop to all shipping of grain to the Southern 
 States either for consumption or exportation. The destruction of this 
 
 ^Report of Board of Trade of Chicago. 1901, p. 20. 
 
 'Monthly Summary of Commerce and Finance, Dec. 1910, pp. 1000-1008. 
 
 ^Report on Internal Commerce, 1887, pp. 286, 382. 
 
Internal Trade, i860 to igoo. 
 
 273 
 
 important branch of the trade was immediately reflected in a sudden 
 expansion of shipments to the East over the Erie Canal and trunk-line 
 railroads, and a rapid rise in the exports of grain to Europe.^ The 
 return of peace saw an immediate resumption of the grain and flour 
 trade with the cotton States, and throughout the remainder of the 
 century this trade continued to flourish. The Gulf ports also made 
 attempts to share in the export grain trade. The fact that the corn- 
 belt extended farther to the south than the wheat-raising district 
 enabled the southern ports to secure a considerable portion of the 
 
 Table 24. — Receipts and shipments of grain at primary markets, igoo. 
 RECEIPTS. 
 
 City. 
 
 Wheat. 
 
 Com. 
 
 Oats. 
 
 Barley. 
 
 Rye. 
 
 Flour. 
 
 Total grain 
 and flour. 
 
 
 bushels. 
 
 bushels. 
 
 bushels. 
 
 bushels. 
 
 bushels. 
 
 bushels. 
 
 bushels. 
 
 Chicago 
 
 48,048,298 
 
 134,663,456 
 
 105,226,761 
 
 17,813,919 
 
 1,973,701 
 
 9,313,591 
 
 349,637,295 
 
 Minneapolis . 
 
 83,312,320 
 
 6,502,410 
 
 10,837,160 
 
 4,551,970 
 
 509,730 
 
 223,102 
 
 106,717,549 
 
 St. Louis 
 
 20,860,805 
 
 20,834,060 
 
 15,728,130 
 
 1,939,993 
 
 686,810 
 
 2,170,548 
 
 69,817,264 
 
 Duluth 
 
 31,815,000 
 
 4,186,000 
 
 1,402,000 
 
 2,692,000 
 
 625,000 
 
 4,519,540 
 
 61,057,930 
 
 Milwaukee.. . 
 
 10.848,939 
 
 5,779,850 
 
 8,506,100 
 
 16,250,831 
 
 1,165,150 
 
 3,012,625 
 
 56,107,682 
 
 Toledo 
 
 9,228,000 
 
 24,829,000 
 
 6,973,000 
 
 453,000 
 
 358,000 
 
 1,195,000 
 
 47,218,500 
 
 Kansas City. 
 
 34,775,450 
 
 8,334,250 
 
 3,341,600 
 
 16,000 
 
 170,950 
 
 
 46,638,250 
 
 Cincinnati. . . 
 
 2,961,211 
 
 14,005,973 
 
 7,392,957 
 
 1,173,742 
 
 442,215 
 
 2,561,977 
 
 38,104,995 
 
 Peoria 
 
 674,000 
 
 18,595,300 
 
 11,263,000 
 
 1,899,700 
 
 156,000 
 
 837,170 
 
 36,355,265 
 
 Detroit 
 
 2,611,909 
 
 3,378,934 
 
 3,217,836 
 
 1,469,622 
 
 325,416 
 
 285,500 
 
 12,288,467 
 
 SHIPMENTS. 
 
 Chicago 
 
 36,649,956 
 
 111,099,653 
 
 77,554,695 
 
 5,739,009 
 
 1,223,796 
 
 7,396,697 
 
 265,552.245 
 
 Minneapolis . 
 
 10,937,010 
 
 1,303,610 
 
 3,932,210 
 
 3,830,980 
 
 506,280 
 
 14,954,806 
 
 87,806,717 
 
 St. Louis 
 
 12,473,366 
 
 22,682,765 
 
 7,588,703 
 
 121,460 
 
 431,778 
 
 2,535,206 
 
 54,706,499 
 
 Duluth 
 
 30,859,000 
 
 3,548,000 
 
 851,000 
 
 2,685,000 
 
 611,000 
 
 4,860,250 
 
 60,425,125 
 
 Milwaukee.. . 
 
 2,166,431 
 
 4,958,140 
 
 7,962,205 
 
 8,348,776 
 
 793,398 
 
 3,788,658 
 
 41,277,911 
 
 Toledo 
 
 5,150,000 
 
 23,103,000 
 
 6,600,000 
 
 452,000 
 
 353,000 
 
 2,022,000 
 
 44,757,000 
 
 Kansas City. 
 
 28,499,450 
 
 5,588,250 
 
 1,576,000 
 
 8,800 
 
 138,950 
 
 
 
 35,811,450 
 
 Cincinnati. . . 
 
 2,270,728 
 
 10,902,716 
 
 4,315,478 
 
 222,168 
 
 162,653 
 
 2,161,744 
 
 27,601,591 
 
 Peoria 
 
 304,950 
 
 5,371,990 
 
 10,948,100 
 
 1,363,481 
 
 39,900 
 
 841,130 
 
 21,813,506 
 
 Detroit 
 
 846,874 
 
 1,956,564 
 
 428,097 
 
 51,420 
 
 195,667 
 
 226,900 
 
 4,499,672 
 
 exports of corn, but in the competition for wheat and flour they were 
 almost uniformly unsuccessful, until during the last five years of the 
 period, when some of the powerful railroads to the South entered into 
 a vigorous rate war with the eastern lines, which resulted in a quick 
 diversion of a large part of the grain traffic. From 1878 to 1897, with 
 the exception of two years, in which there were unusually large crops 
 (1892 and 1893), the Gulf ports never secured as much as 10 per cent of 
 the annual wheat exports of the country, and usually their share was less 
 than 5 per cent. Their portion of the total exports of flour during these 
 
 ^Monthly Summary of Commerce and Finance, Jan. 1900, pp. 1964, 1969, 2015; Year Book of 
 U. S. Department of Agriculture, 1911, p 682. 
 
274 History of Domestic and Foreign Commerce. 
 
 years never reached 2 per cent; but the rate war begun in 1896 quickly 
 effected a marked change, and three years later 29 per cent of the wheat 
 and 3.9 per cent of the flour exports left via the harbors of the Gulf.^ 
 
 Among the eastern cities which so long held the supremacy in the 
 foreign grain trade there was even a keener competition than existed 
 between them collectively and the seaports of the Gulf. Before the 
 trunk-line railroads had been constructed, the Erie Canal had given 
 New York the unquestioned lead as a distributing and exporting 
 point of western products, but when the railroads had begun to com- 
 pete actively for the transportation of eastbound grain and flour, New 
 York had been obliged to surrender to other Atlantic ports a share 
 of the trade. In i860 the railroads were carrying two-thirds of the 
 flour traffic, but as yet were transporting but a small quantity of grain 
 to the eastern seaboard. The struggle for the carriage of grain was 
 seriously begun while the war was in progress, and by 1867 the rail 
 routes had captured 38 per cent of this traffic and the elimination of 
 the canal as an important factor in the transportation of grain was 
 clearly indicated. A succession of fierce rate wars after 1870 resulted 
 in the downfall of the canal traffic and also brought about a compromise 
 among the various trunk lines, whereby the competing cities on the 
 Atlantic coast were placed on a more nearly equal footing. The effect 
 was seen in the gradual decrease of the percentage of grain exports from 
 New York and a rise in the exports from the seaports farther south,^ 
 and at the same time the heavy shipments of grain and flour intended 
 for domestic use in the East took direct routes to the various centers of 
 consumption. 
 
 An important feature of the cereal trade was the growth of the grain 
 traffic on the Great Lakes, especially the growth of the traffic in wheat 
 and flour. Until early in the eighties Chicago maintained the lead 
 as a wheat and flour market and the railroads were able to divert a 
 large part of the trade from Lake Michigan, but when after 1880 the 
 center of wheat production shifted toward the northwest, Chicago 
 lost precedence in the wheat trade to both Minneapolis and Duluth, 
 and a great quantity of wheat and flour began to move eastward by 
 water from ports on Lake Superior. The growth of the traffic passing 
 through St. Mary's Falls Canal (table 25) shows the rapidity of the 
 increase of the Lake Superior shipments.^ During the late nineties there 
 was also a heavy increase of the shipments of coarse grains by this 
 route, the amount rising from 8,000,000 bushels in 1895 to 30,000,000 
 bushels in 1899. The lake grain-trade from the ports of Lake Michi- 
 gan began to recover its lost ground after 1880, when the sharp compe- 
 tition with the railroads was abated, and at the close of the century the 
 lake shipments of wheat and corn from Chicago were much larger than 
 
 ^Monthly Summary of Commerce and Finance. Jan. 1900, p. 1984. ^Ibid.. 1986. Hbid., 1990. 
 
Internal Trade, i860 to igoo. 
 
 27s 
 
 the shipments by rail. The railroads, however, maintained the lead in 
 the transportation of flour and oats.^ 
 
 A marked effect of the rate-making practices of the railroads during 
 this period was the tendency of the milling industry to become con- 
 centrated near the wheat-fields. Freight rates on equal quantities 
 of flour and wheat were kept almost equal, and it was more profitable 
 to transport the finished product than the raw material. A com- 
 parison of the relative volume of the receipts of flour and wheat at 
 
 Table 25. — Flour and wheat traffic of the St. Mary's Falls Canal, i86o-t8oq. 
 
 Year. 
 
 Flour. 
 
 Wheat. 
 
 1860 
 1870 
 1880 
 1890 
 1899 
 
 barrels. 
 
 50,250 
 
 33,548 
 
 523,860 
 
 3,239,104 
 
 7,114,147 
 
 bushels. 
 
 49,700 
 
 2,105,920 
 
 16,217,370 
 
 58,397,335 
 
 Buffalo shows the growth of the milling industry in the West. From 
 1877 to 1888, of the total receipts of wheat at Buffalo, only 22 per cent 
 consisted of flour, but during the next decade 42 per cent of the receipts 
 were in that form. Minneapolis became the greatest milling center in 
 the world, its output of flour rising to more than 15,000,000 barrels 
 annually by the end of the century.* Duluth and Superior together 
 were manufacturing over 3,000,000 barrels, and St. Louis, Milwaukee, 
 Chicago, and Toledo were each producing more than 1,000,000 barrels 
 a year. 
 
 Another important surplus cereal belt was developed in the three 
 Pacific States. From the time of its settlement the State of Cali- 
 fornia became an important wheat-producing State, and in Washington 
 and Oregon also this cereal became the staple agricultural product. 
 The product of those three States provided most of the flour for domes- 
 tic consumption in the western section of the country and also gave a 
 large surplus for exportation. Between 1880 and 1900 about one- 
 fourth of the exports of wheat and one-seventh of the exports of flour 
 of the United States went from the Pacific ports.^ 
 
 The most important center of rice production shifted after 1880 from 
 South CaroHna to Louisiana. In i860 the former State produced 
 two-thirds of the total amount raised in the United States, but the 
 industry languished after the war. Until extensive cultivation was 
 begun in Louisiana the total product of the country remained small, 
 but by 1900 it had risen to 250,000,000 pounds in the continental 
 
 ^Monthly Summary of Commerce and Finance, Jan. 1900, pp. 1964, 1965. 
 Hbid.. 2014. 'Ibid., 1984. 
 
276 
 
 History of Domestic and Foreign Commerce. 
 
 portion of the United States. Two-thirds of this was raised in Louis- 
 iana and about one-fifth in South Carolina. New Orleans was the 
 most important domestic market. 
 
 LIVE-STOCK AND ANIMAL PRODUCTS. 
 
 The extension of the railroads to the grazing-lands of the West and 
 the rapid increase of corn production in the Mississippi Valley after 
 i860 gave a great impetus to live-stock raising. Like the trade in 
 grain, the trade in live-stock centered in cities so located as to be 
 within easy reach of the producing sections and the regions of con- 
 sumption. To these primary markets the railroads carried thousands 
 of carloads of stock. The horses and mules were distributed among 
 the farms and cities of the East and South; while the cattle, hogs, and 
 sheep were sent to the large primary markets either to be slaughtered 
 there, or to be distributed thence among the farms of the Central 
 States to be fattened for killing or to be shipped to the slaughter- 
 houses in the eastern cities. 
 
 Table 26. — Receipts and shipments of live-stock at St. Louis, iSyo, 1880, i8go, igoo. 
 
 Year. 
 
 Receipts. 
 
 Shipments. 
 
 Cattle. 
 
 Sheep. 
 
 Hogs. 
 
 Horses 
 and mules. 
 
 Cattle. 
 
 Sheep. 
 
 Hogs. 
 
 Horses 
 and mules. 
 
 1870 
 1880 
 1890 
 1900 
 
 201,422 
 424,720 
 639,014 
 795,800 
 
 94,477 
 205,969 
 358,496 
 434,133 
 
 310,850 
 1,840,684 
 1,359,789 
 2,156,792 
 
 46^011 
 
 82,071 
 
 169,082 
 
 129,748 
 228,879 
 361,705 
 207,998 
 
 11,649 
 
 93,522 
 
 251,728 
 
 65,199 
 
 17,156 
 770,769 
 665,471 
 513,561 
 
 44,416 
 
 79,030 
 
 147,463 
 
 Until 1863 Cincinnati was the chief meat-packing city of the country, 
 but in that year Chicago took the lead, and as the live-stock industry 
 moved westward, St. Louis, Kansas City, Milwaukee, Indianapolis, 
 Omaha, and St. Joseph in turn surpassed Cincinnati in this business. 
 The trade in meat was revolutionized in the early seventies by the 
 perfection of chilling and refrigerating processes that made possible the 
 shipment of fresh meats for long distances. Previous to this time the 
 meat trade, with the exception of local business, was confined to salted 
 and pickled meats, and eastern cities secured their supplies of fresh meat 
 only by importation of live animals. The introduction of the refrigera- 
 tor car caused a rapid growth of the trade in dressed beef and mutton 
 at the packing centers in the Central States, and a coincident relative 
 decline in the east-bound shipments of live-stock, a condition that was 
 further accentuated by the fact that the railroads imposed relatively 
 higher rates on live-stock than on meat products shipped to the 
 Atlantic coast. 
 
Internal Trade, i860 to igoo. 
 
 277 
 
 The statistics of the Hve-stock movements at St. Louis for a number 
 of years, shown in table 26, typifies the great development of the trade.^ 
 
 The volume attained by the Hve-stock trade is indicated in table 27, 
 which shows the receipts and shipments at the principal primary 
 markets in 1900.^ 
 
 Table 27. — Receipts and shipments of live-stock at principal primary markets, igoo. 
 
 RECEIPTS. 
 
 City. 
 
 Cattle. 
 
 Calves. 
 
 Hogs. 
 
 Sheep. 
 
 Horses 
 and mules. 
 
 Total. 
 
 
 2,729,046 
 1,969,718 
 828,204 
 795,800 
 379,967 
 176,172 
 
 136,310 
 113,077 
 
 10,414 
 44,509 
 
 8,109,064 
 3,094,139 
 2,200,926 
 2,156,972 
 1,678,520 
 500,415 
 
 3,548,885 
 860,449 
 
 1,276,775 
 434,133 
 390,308 
 489,574 
 
 99,010 
 103,308 
 
 59,645 
 169,082 
 
 13,497 
 
 26,778 
 
 14,622,315 
 6,140,691 
 4,365,550 
 3,555,987 
 2,472,706 
 1,237,448 
 
 Kansas City 
 
 St. Louis. . . . 
 
 St. Joseph 
 
 St. Paul 
 
 
 SHIPMENTS (BY RAIL). 
 
 Cliicago 
 
 934,649 
 853,303 
 274,479 
 207,998 
 85,847 
 134,645 
 
 14,006 
 64,197 
 
 6,154 
 19,698 
 
 1,452,183 
 
 223,963 
 
 36,996 
 
 513,561 
 
 83,044 
 
 45,158 
 
 487,254 
 216,272 
 552,234 
 65,199 
 103,440 
 403,924 
 
 91,703 
 87,787 
 54,845 
 147,463 
 12,181 
 24,723 
 
 2,979,795 
 1,445,522 
 918,554 
 934,221 
 290,666 
 628,148 
 
 Kansas City 
 
 St. Louis. . . 
 
 St. Joseph 
 
 St. Paul 
 
 
 The difference between the receipts and shipments at these markets 
 indicates the extent of their slaughtering and meat-packing industries. 
 The total value of the products of wholesale slaughtering and meat- 
 packing in the United States in 1900 amounted to $700,000,000, of 
 which more than half was produced in three cities— Chicago, Kansas 
 City, and South Omaha. The hogs packed in all western cities in 1900 
 numbered 22,201,000. In Chicago alone, 1,814,921 cattle and 7,364,859 
 hogs were packed.^ The chief market for the numerous products of 
 the large packing establishments was in the manufacturing districts 
 of the East. The eastward rail shipments of provisions from Chicago 
 in 1900 averaged about 20,000 tons a week.* 
 
 The same forces that stimulated the stock-raising and meat-packing 
 industries — the necessity of providing food for a large non-agricultural 
 population and the desire of the farming interests to convert their 
 grain into a form that would be marketed most profitably — led to an 
 extensive development of the dairy business and a large trade in milk, 
 butter, and cheese. 
 
 In all the States having a large urban population many dairy farms 
 were established to supply the immense quantities of fresh milk con- 
 
 ^Monthly Summary of Commerce and Finance, Feb. 1900, p. 2300; Ibid., Dec. 1910, p. 994. 
 ^Ibid., Dec. 1910. p. 994. 'Report of Board of Trade of Chicago, 1901, p. 44. 
 
 ^Mmithly Summary of Commerce and Finance, March 1901, p. 2089. 
 
278 
 
 History of Domestic and Foreign Commerce. 
 
 sumed each day in the cities. In the Northern States in particular, 
 where the growth of manufacturing caused a greater density of popu- 
 lation, there was a rapid growth of the milk trade. 
 
 In the corn-belt the business of making butter and cheese for local 
 and eastern trade made a great advance. Over 800,000,000 pounds 
 of butter and more than 133,000,000 pounds of cheese were made in 
 the Northern Central States in 1899, the leading States being Iowa and 
 Wisconsin.^ The receipts and shipments of butter at Chicago, the 
 most important interior market, grew as shown in table 28.^ 
 
 Table 28. — Receipts and shipments of butter at Chicago, iSyo, 1880, i8go, igoo. 
 
 Year. 
 
 Receipts. 
 
 Shipments. 
 
 1870 
 1880 
 1890 
 1900 
 
 lbs. 
 
 11,682,348 
 
 67,337,044 
 
 140,548,850 
 
 244,385,190 
 
 lbs. 
 
 11,049,367 
 
 59,970,601 
 
 156,688,837 
 
 208,536,699 
 
 The trade in poultry and eggs also took on large proportions during 
 this period. The introduction of commercially valuable incubators 
 and the use of cold storage were important factors in the development 
 of poultry and egg production. The trade in these products was 
 heaviest in the cities of the corn-belt, from which more than half of 
 the total output came. In 1900 Chicago received nearly 75,000,000 
 dozens of eggs,^ half of which were shipped to eastern cities. 
 
 The output of wool in the United States in 1899 was 277,000,000 
 pounds,* about five times the quantity produced in i860. The sheep- 
 raising industry shifted largely to the Rocky Mountain States after 
 1880, over half of the wool cHp of 1899 coming from that section.' 
 The ultimate market of practically the entire product of wool lay in 
 New England, Pennsylvania, and New York, where the woolen mills 
 remained concentrated. The wide separation between the chief pro- 
 ducing and consuming centers necessitated a transcontinental move- 
 ment and gave the wool trade a position of some importance in internal 
 commerce. The entire output was never sufficient to satisfy the home 
 demand and large quantities were annually imported to supplement the 
 domestic supply. 
 
 COTTON. 
 
 Of the economic disturbances occasioned by the Civil War none was 
 more trying than that caused by the prostration of cotton cultivation 
 and the disruption of the foreign and domestic cotton trade. Of the 
 
 ^statistical Abstract of United States, 1911, p. 151. 
 
 ''Report of Board of Trade of Chicago, 1901, p. 104. 'Ibid., 101. 
 
 *U. S. Census 1900. Agriculture. I, ccxi. ^Ibid.. 673. 
 
Internal Trade, i860 to igoo. 279 
 
 economic problems facing the country at the close of the war none was 
 of greater magnitude than that of rehabilitating the cotton-raising 
 industry. Burdened by the evils of poHtical reconstruction, hampered 
 by the suddenly transformed system of labor, and oppressed by the 
 general financial and industrial ruin resulting from the costly struggle, 
 it was little less than remarkable that the Southern States were able, 
 within five years after the conflict ended, to bring the total production 
 of their great staple up to the point it had reached in i860. But not- 
 withstanding the obstacles and difficulties that existed, the cotton 
 crop of 1870 was slightly greater than that of i860, and in 1877 the 
 total product was the largest ever harvested in a single year up to that 
 time. From that year until the end of the century the volume of 
 cotton production steadily increased. The geographical limits of the 
 cotton-belt, which were fixed by climatic conditions, had been reached 
 before i860, and consequently there was no further extension; but the 
 cotton acreage within this region was increased from about 13,000,000 
 to more than 25,000,000 acres.^ Texas, the leading State in 1900, had 
 over 7,000,000 acres devoted to cotton-culture, producing a crop of 
 3,300,000 bales, and seven more of the thirteen States in the cotton- 
 belt each had an acreage of more than 1,000,000.^ 
 
 The manufacture of cotton cloth in the United States during this 
 period grew at almost the same rate as cotton production, about one- 
 third of each annual crop after 1865 being required for domestic mills. 
 The total consumption of domestic cotton increased from 927,000 bales 
 in 1859 to 3,632,000 bales in 1899.^ For a number of years most of 
 the cotton manufacture was confined to the Northern States, but fol- 
 lowing 1885 there was a rapid growth of the textile industry in the 
 cotton-belt itself, and by the close of the century the consumption of 
 cotton in Southern millls was equal to about three-fourths of the con- 
 sumption in the mills of the North. 
 
 The internal trade in cotton during this period possessed four features 
 which may be considered separately: (i) the concentration of cotton at 
 interior points; (2) the movement to southern seaports; (3) the over- 
 land movement to northern markets; (4) the consumption by southern 
 mills. 
 
 In the ante-bellum days, before railroads became a factor in the 
 transportation of cotton, the only interior points of concentration of 
 importance were several cities, virtually all on navigable streams leading 
 to the Gulf or Atlantic coast. Some of the largest of these interior 
 markets were Atlanta, Memphis, Shreveport, Vicksburg, Montgomery, 
 Augusta, and Columbia. The development of a comprehensive system 
 of railways in the cotton-belt, however, permitted many other inland 
 
 ^statistical Abstract of United Slates. 1911. p. 142; Monthly Summary of Commerce and Finance, 
 March 1900, p. 2548. 
 ^Statistical Abstract of United States, 1911, pp. 138-142. Hbtd., 740. 
 
28o History of Domestic and Foreign Commerce. 
 
 cities to share in the cotton trade. Moreover, the railroads succeeded in 
 securing the greater portion of the cotton traffic, even in regions where 
 water transportation was available, and the river ports lost or main- 
 tained their prominence according to the advantage they possessed as 
 railway centers. The most important of the interior markets in 1898 
 were Houston, St. Louis, Memphis, Augusta, Cincinnati, Atlanta, Little 
 Rock, Montgomery, Shreveport, and Dallas.^ Each of these cities was 
 the focal point of numerous railroads running through productive 
 portions of the cotton-belt. The city of Houston, through which 
 passed a large part of the Texas cotton destined for exportation from 
 Galveston, had the heaviest receipts, amounting to 1,768,000 bales. 
 St. Louis and Cincinnati owed their prominence to the fact that they 
 were the natural gateways through which cotton passed to northefn 
 markets from Texas and the lower valley of the Mississippi. In addi- 
 tion to the cities named there were at least 20 other interior points each 
 handling from 10,000 to 100,000 bales a year. The combined receipts 
 at all 30 markets comprised 55 per cent of the cotton crop for the year. 
 
 The movement of cotton from the interior to the southern seaports 
 underwent a change during this period, due likewise to the influence 
 of the railroads. It has already been told how the railroads extending 
 from Savannah and Charleston had caused a decHne in the relative 
 importance of New Orleans in the cotton trade before i860. After 
 the war this diversion to the eastern ports continued, and the increase 
 of the overland movement also injured the relative standing of New 
 Orleans. However, New Orleans, too, became an important railroad 
 center, and the geographical position of the city enabled it to maintain 
 its position as the leading market until 1 899, when Galveston took first 
 place because of the enormous increase of cotton production in Texas, 
 of which this city was the chief market. New Orleans and Galveston 
 together shipped about nine-tenths of the cotton exported by way 
 of the Gulf of Mexico, the receipts at Mobile declining to a point below 
 what they had been in i860. On the Atlantic coast Savannah con- 
 tinued to hold the lead in cotton receipts. At Charleston the receipts 
 advanced steadily till 1881, after which they declined in volume. Nor- 
 folk and Wilmington, of relatively small importance before the war, 
 became important markets during this period, the former ranking next 
 to Savannah after 1880. Table 29 shows the receipts at these various 
 ports for a number of years.^ 
 
 The overland all-rail movement of cotton, which began about 1855, 
 developed to large proportions after the war. Before this movement 
 began practically all the cotton not consumed in the South was sent 
 to southern seaports, whence it was shipped abroad directly or was 
 carried by coastwise vessels to northern ports for exportation or dis- 
 
 ^Monlhly Summary of Commerce and Finance, Jan. 1901, p. 1659. ^Ibid.. Mar. 1900. p. 259.'!. 
 
Internal Trade, i860 to igoo. 
 
 281 
 
 tribution among the cotton mills. The growth of the overland move- 
 ment represented the result of the efforts of the railroads to secure 
 a share of the cotton traffic that had formerly belonged entirely to 
 the coasting trade. So successful were the railroads in the competitive 
 struggle that by 1899 the coastwise movement was only a third larger 
 than the all-rail movement. The overland cotton traffic originated 
 in all the cotton States and most of it went through St. Louis or gate- 
 ways on the Ohio and Potomac Rivers to the North Atlantic States 
 
 Table 29. — Bales of cotton received at principal ports, i860, 1870, 1880, iSgo, i8gg. 
 
 Port. 
 
 1860 
 
 1870 
 
 1880 
 
 1890 
 
 1899 
 
 Galveston 
 
 New Orleans 
 
 252,000 
 
 2,139,000 
 
 843,000 
 
 525,000 
 
 510,000 
 
 41,000 
 
 56,000 
 
 246,000 
 1,142,000 
 306,000 
 488,000 
 246,000 
 59,000 
 203,000 
 
 480,000 
 1,504,000 
 358,000 
 741,000 
 464,000 
 78,000 
 590,000 
 
 860,000 
 1,973,000 
 261,000 
 956,000 
 327,000 
 134,000 
 404,000 
 
 2,344,000 
 2,231,000 
 452,000 
 1,099,000 
 375,000 
 291,000 
 691,000 
 
 ScLvannah. . . . 
 
 Charleston 
 
 Wilmington 
 
 Norfolk 
 
 to be sold to eastern spinners or exported from New York, Boston, 
 Philadelphia, or Baltimore. A considerable quantity of the cotton 
 purchased by Canada reached the border by rail, and in the latter part 
 of the century the growth of cotton exports to Japan gave rise to heavy 
 rail movements to the seaports on the Pacific coast. The increase of 
 the overland movement of cotton from 1857 to 1898, as compared with 
 the coastwise movement, is shown in table 30.^ 
 
 Table 30. — Shipments of cotton, all-rail and coastwise, i8s7-i8gg. 
 
 Year. 
 
 Overland 
 movement. 
 
 Percentage of 
 total coastwise 
 and overland. 
 
 Coastwise 
 movement. 
 
 Percentage of 
 total coastwise 
 and overland. 
 
 1857 
 1877-78 
 1887-88 
 1898-99 
 
 bales. 
 
 9,264 
 
 693,640 
 
 971,702 
 
 1,370,398 
 
 1 
 19 
 30 
 40 
 
 bales. 
 
 760,537 
 1,620,495 
 2,258,875 
 2,019,153 
 
 99 
 81 
 70 
 60 
 
 The cotton mills of the South, the number of which increased 
 remarkably during this period, secured most of their supplies from 
 local planters. The chief results of the local consumption were the 
 enhanced profits of the producers in the neighborhood of the cotton 
 mills and the stimulating effect of the added competition on the level 
 of prices. Only in the States situated in the northern portion of the 
 cotton-belt — ^Tennessee, Virginia, and North Carolina — ^were the 
 
 ^Monthly Summary of Commerce and Finance, Mar. 1900, p. 2567. 
 
282 History of Domestic and Foreign Commerce. 
 
 manufacturers compelled to purchase a considerable amount of their 
 raw material from beyond their own State boundaries. In South 
 Carolina, Georgia, and Alabama less than 3 per cent of the mill con- 
 sumption of cotton in 1899 was taken from other States. In some 
 instances the cotton trade of certain points was reduced, the decline 
 of exports from Charleston being due largely to the fact that the mills 
 of South Carolina developed, until they consumed nearly half of the 
 annual crop of the State. 
 
 OTHER FARM PRODUCTS. 
 
 Though there were no other farm products, the internal movements 
 of which approached in value the traffic in grain or live-stock or cotton, 
 there were many others that were important factors in internal trade. 
 
 The Southern States bought large amounts of hay from the North, 
 this article forming an important item in the southbound river and rail 
 traffic in the Mississippi Valley. In all the cities of the North, and 
 especially in those having a heavy trade in live-stock, there was a large 
 demand for hay, which in the early part of this period was usually sup- 
 plied by local farms; but as cities grew larger and the demand greater, 
 many Eastern States purchased hay from the trans-Mississippi States. 
 The hay traffic of the railroads in 1900 amounted to 4,000,000 tons. 
 
 One of the most interesting trade developments of the period was in 
 the eastward shipment of fruits from CaHfornia. The first shipment 
 was made in 1867, and in 1899 the traffic amounted to 193,000,000 
 pounds, 95 per cent of which was carried in refrigerator cars. The 
 shipment of fresh vegetables and fruit from the warmer Southern States 
 to all parts of the North during the months of winter and early spring 
 was also an important feature of the internal trade of these years. 
 
 The increasing production of all kinds of vegetables and orchard 
 fruits led to a large commerce in these articles. The potato crop of 
 the United States in 1899 ^^^ valued at $98,000,000, and the sweet- 
 potato crop at $20,000,000. The crop of apples amounted to 
 175,000,000 bushels. New York, Pennsylvania, and Ohio raising over 
 20,000,000 bushels each. Many of the vegetable and fruit crops were 
 the basis of large canning industries. The products of preserving and 
 canning in the United States in 1899 were valued at $56,000,000, 
 of which half came from California, New York, and Maryland. 
 
 Among other agricultural products, the most valuable was tobacco, 
 in which the States of Kentucky and North Carolina had the largest 
 trade, Louisville becoming the largest leaf-tobacco market in the world. 
 Louisiana possessed a large trade in cane sugar, most of which was 
 distributed from New Orleans. The different varieties of grass seeds 
 were important articles of trade, especially among the Central States, 
 and the flaxseed of the Dakotas, Minnesota, Iowa, and Kansas formed 
 a profitable source of income for the farmers there. 
 
Internal Trade, i860 to IQOO. 283 
 
 COAL. 
 
 Under modern conditions the industrial development of a nation 
 is largely a question of fuel, and to the abundance of the coal-supply 
 may be ascribed in a large measure the great increase in manufacturing 
 and the rapid growth of the railroad mileage of the United States after 
 i860. However, fuel derives its importance only from the existence 
 of opportunity for its utilization, and it may be said with equal truth 
 that the great demand created by the development of manufacturing 
 and transportation was the chief cause of the tremendous growth of 
 the consumption of coal and the most important factor in the remark- 
 able development of the coal-mining industry and the coal trade. 
 However these various factors may be classified into causes and effects, 
 the fact remains that at the end of the century coal-mining was by far 
 the greatest of the mineral industries of the United States, and the ship- 
 ments of coal constituted a greater tonnage than all other commodities 
 entering into internal trade combined. 
 
 Lack of statistics makes it difficult to trace the development of the 
 internal commerce in coal during this period, but the growth of some of 
 the most important movements from producing to consuming centers 
 may be indicated. The trade in anthracite coal is comparatively 
 easy of description because of the fact that the entire commercial 
 product came from a relatively small area in eastern Pennsylvania. 
 In the case of the bituminous-coal trade only the general trend of the 
 movement from the most important fields can be shown. 
 
 Previous to i860 practically all the anthracite coal shipped from 
 the mining district was transported by water and short rail lines to 
 Philadelphia and New York, where it was consumed or carried coast- 
 wise to various points along the Atlantic seaboard. This eastward 
 movement continued to constitute the largest part of the anthracite 
 trade after i860. The railroads, however, took practically the entire 
 business from the canals, and a large part of the distribution to points 
 north and south of New Jersey was also accompHshed by the railroads 
 instead of by coasting vessels from New York and Philadelphia. The 
 desirability of hard coal as a fuel, however, stimulated a demand for it 
 in the Central States and a considerable trade sprang up toward the 
 west, about a fifth of the total annual output being carried in that 
 direction at the end of the century. The chief route for this traffic 
 was by canal or rail to Buffalo, whence it was distributed by lake 
 vessels to points in Ohio, Michigan, Illinois, Wisconsin, and Minnesota. 
 The receipts of anthracite coal at Buffalo in 1898 amounted to 
 4,225,000 tons, of which more than one-half was shipped away by lake,^ 
 over 1,000,000 tons being destined for Chicago; 500,000 tons for Mil- 
 waukee, and 500,000 tons for Duluth-Superior.^ The other important 
 
 '20th Annual Report United States Geological Survey, VI, Metallic Products. Coal and Coke, 368. 
 ^Monthly Summary of Commerce and Finance. Apr. 1900. p. 2853. 
 
284 History of Domestic and Foreign Commerce. 
 
 westward movement was to Pittsburgh, large quantities being shipped 
 thither for local trade and distributed westward by rail. The fact 
 that St. Louis in 1898 received 225,000 tons and Chicago 526,000 tons 
 of anthracite coal by raiU showed the importance of the long-distance 
 rail traffic in this commodity. 
 
 Until the early sixties the production of bituminous coal in the 
 United States was less than that of anthracite, and the latter variety 
 was sold to the consumer at a lower price. When large amounts of coal 
 began to be used in the iron industry, however, the great abundance 
 of bituminous and the wider area in which it was found caused its 
 volume of production to increase more rapidly, and by 1900 the annual 
 output was three and a half times that of anthracite. The tendency 
 of industries which consumed most of the soft coal to gravitate toward 
 the mining district, the wide extent of the region over which soft coal 
 was found, and the relatively high cost of transportation as compared 
 to value, lessened the possibility of a large amount of extremely long- 
 distance traffic in this fuel. Consequently, though soft coal furnished 
 most of the freight tonnage of the country, a relatively small part 
 of the shipments were for such long distances as other raw materials, 
 such as grain and cotton, were carried. Nevertheless the demand for 
 fuel in cities not located near coal-bearing regions and the consumption 
 of soft coal by railroads created a large and exceedingly valuable coal 
 trade for the highly productive mining localities. 
 
 The great fields in Pennsylvania, West Virginia, Maryland, and 
 Ohio produced considerably more than half the bituminous coal mined 
 in the United States between i860 and 1900. From this region there 
 were heavy shipments in all directions. The Chesapeake and Ohio 
 Canal and the southern trunk-line roads carried a large tonnage to the 
 cities on the Atlantic seaboard;^ millions of tons were floated down the 
 Ohio River to Cincinnati, Louisville, and points below; the railroads 
 took immense quantities westward for consumption among the cities 
 of the Central States and for lake transportation from all important 
 points on the southern shore of Lake Erie. The lake coal trade became 
 especially heavy because of the absence of coal deposits in the region 
 around Lake Superior, and because the large shipments of iron ore from 
 such points as Duluth and Superior made possible low freight rates on 
 return cargoes of coal. 
 
 The second large center of the bituminous-coal trade was in the 
 fields of Ilhnois, Indiana, Iowa, Missouri, and Kansas. From these 
 States came most of the soft coal consumed in the numerous manufac- 
 turing cities north and west of Louisville,^ and the coal supplies of the 
 Southwest were also drawn from this region. The third center of 
 soft-coal production, which had a period of very rapid development 
 
 '20th Annual Report U. S. Geological Survey, VI, Metallic Products, Coal and Coke, 374, 384. 
 ^Monthly Summary of Commerce and Finance, Apr. 1900, p. 2855. *Ibid., 2880-2866. 
 
Internal Trade, i860 to igoo. 
 
 28s 
 
 after 1885, was the Alabama and Tennessee field. It provided fuel 
 for the growing manufacturing industries of the Southeast and com- 
 peted to some extent with the northern mines for the coal trade of 
 points in the lower valley of the Mississippi. 
 
 IRON ORE, IRON, AND STEEL. 
 
 The development of the movement of iron ore from the ranges around 
 Lake Superior to the furnaces of the Eastern States was one of the most 
 interesting features of the internal commerce of the United States during 
 this entire period. Thiswas the only movement of ironorethat attained 
 large dimensions. The close proximity of a coal-supply to the iron 
 mines of the Appalachian district made possible the smelting of the 
 ore of that region in the immediate vicinity of the mines, and conse- 
 quently a heavy internal movement of the ore produced in that section 
 was unnecessary. Of the iron ore produced in the Lake Superior dis- 
 trict very little was smelted in the States where it was mined, practi- 
 cally all of the enormous output being conveyed by lake vessels to ports 
 on Lake Erie and Lake Michigan to be converted into pig iron and steel 
 in the blast furnaces of Pennsylvania, Ohio, New York, and Illinois. 
 The magnitude of this trade is shown by the fact that from 1870 to 
 1880 one-fourth, from 1880 to 1890 more than one-third, from 1890 
 to 1895 more than one-half, and from 1895 to 1900 more than two- 
 thirds of all the iron ore mined in the United States was shipped east- 
 ward from the Lake Superior district. The growth of these shipments, 
 as compared to the growth of the production of iron ore in the United 
 States, is shown in table 31.^ 
 
 Table 31. — Iron ore production in the United States, 1870, 1880, 1890, 1899. 
 
 Year. 
 
 Production of 
 iron ore in the 
 United States. 
 
 Shipment of 
 iron ore from 
 the Lake Supe- 
 rior district. 
 
 1870 
 1880 
 1890 
 1899 
 
 long tons. 
 
 3,031,891 
 
 7,120,362 
 
 16,036,043 
 
 24,683,173 
 
 long tons. 
 
 859,507 
 
 1,987,598 
 
 9,003,725 
 
 18,251,804 
 
 No industry in the United States had a more remarkable growth after 
 i860 than the iron and steel industry. Table 32 shows the increase 
 in the production of pig-iron and steel from 1870 to 1900.^ 
 
 The increase in the output of pig-iron was especially rapid between 
 1885 and 1890, during which time the annual amount produced doubled 
 in volume. The most important period in the steel industry was the 
 decade following 1890. 
 
 ^Monthly Summary of Commerce and Finance, Aug. 1900, pp. 202, 206, 220. 
 ^U. S. Census 1900, Manufactures, IV, 28, 74. 
 
286 
 
 History of Domestic and Foreign Commerce. 
 
 Of the development of the internal trade in iron and steel it is impos- 
 sible to give accurate details, though some idea of the consumption 
 throughout the entire country may be given, and the chief centers of 
 production may be indicated. Practically every State east of the 
 Mississippi and several of those west produced more or less pig-iron 
 and steel during this period. However, there were four States that 
 stood out most prominently in the industry. Pennsylvania con- 
 tributed about one-half of the entire output of both iron and steel dur- 
 ing the whole forty years. Ohio ranked next to Pennsylvania, being 
 the only other State before 1890 to produce more than 1,000,000 tons 
 of pig-iron a year. In the other two States, Alabama and Illinois, 
 the pig-iron industry began to expand rapidly in the early eighties, and 
 by 1900 the annual output of these two States comprised more than 
 one-fifth of the total product of the country.^ In Illinois the pro- 
 duction of steel also developed rapidly; but Alabama, though turning 
 out 1,203,000 tons of pig-iron in 1900, manufactured only 48,000 tons 
 of steel. 
 
 Table 32. — Iron and steel production in the United States, 1870, 1880, 18(10, IQOO. 
 
 Census 
 Year. 
 
 Pig-iron. 
 
 Crude steel 
 
 ingots and 
 
 castings. 
 
 1870 
 1880 
 1890 
 1900 
 
 gross tons. 
 1,832,876 
 3,375,912 
 8,845,185 
 
 14,452,185 
 
 gross tons. 
 
 '28,069 
 
 1,027,381 
 
 4,174,652 
 
 10,685,000 
 
 'U. S. Census 1870, Industry and Wealth, 625. 
 
 The immense output of the iron and steel mills was sold everywhere 
 throughout the country. A large quantity of it, in the form of rails, 
 went to build the great mileage of railway track constructed in every 
 State; the remainder was used as the raw material for manufactures of 
 a great variety of iron and steel products that were used in all branches 
 of mining, agricultural, and manufacturing industries. Practically the 
 entire domestic product of iron and steel was consumed at home. 
 Until 189s the annual value of the exports of both iron and steel and 
 the products manufactured from them was less than $30,000,000. 
 
 OTHER MINERALS. 
 
 Of the non-metallic minerals, other than coal, petroleum was by far 
 the most important. The crude petroleum produced in the United 
 States in 1900, amounting to 64,000,000 barrels, came chiefly from the 
 Appalachian and the Lima-Indiana fields.^ Ohio, West Virginia, and 
 
 'U. S. Census 1900, Manufactures, IV, 33-34. 
 
 'Statistical Abstract of United States, 1911, p. 223; 20th Annual Report of United States 
 Geological Survey, VI, Non-Metallic Products, 6. 
 
Internal Trade, i860 to igoo. 287 
 
 Pennsylvania together produced 52,000,000 barrels, Indiana 4,800,000, 
 New York 1,300,000, and the only other State producing more than 
 1,000,000 barrels annually was California. Most of the crude oil of 
 the two large eastern fields was conveyed in pipe-lines to the refineries 
 of Pennsylvania, New York, New Jersey, and Ohio^ to be converted 
 into various finished products that occupied an important rank among 
 the commodities entering foreign and domestic commerce. 
 
 Among the other non-metaUic minerals were many varieties of stone. 
 The marble of Vermont and Georgia, the granite of Maine, Massa- 
 chusetts, and New York, the limestones of Pennsylvania, New York, 
 Ohio, Indiana, and Illinois, the slates of Pennsylvania and Vermont, 
 and the sandstones of Ohio formed the largest part of the $36,000,000 
 worth of stone produced in 1900 and distributed over the country. 
 Large quantities of Portland cement were shipped from factories in 
 Pennsylvania, New York, and Ohio. The phosphate rock of Florida, 
 South Carolina, and Tennessee constituted an important part of the 
 domestic and foreign trade of those States. 20,000,000 barrels of salt 
 were produced in 1900, the leading centers being New York, Michigan, 
 Kansas, and Ohio. The natural-gas fields were located in the same 
 States in which petroleum was found in large quantities, and gas was 
 piped to nearly all the large cities between New York and Chicago to 
 be consumed in factories and homes. 
 
 Of the metallic minerals, other than gold and silver, the most 
 valuable was copper. The production of this metal grew from 7,200 
 tons in i860 to 270,000 tons in 1900.^ The three important mining 
 districts in 1900 were Montana, Arizona, and the Lake Superior dis- 
 trict, these three regions producing 475,000,000 pounds. Until 1882 
 the Lake Superior district contributed over three-fourths of the copper 
 mined in the United States, but thereafter this field declined in relative 
 importance though increasing its total output.^ Practically all of the 
 copper ore was smelted in the locality of the mines and the metal 
 shipped to the refineries in the Eastern States to be worked up into 
 useful forms. Over 32 per cent of the refining in 1900 was done in 
 New Jersey.* 
 
 FOREST PRODUCTS. 
 
 In 1900 there were five large lumber-producing regions in the United 
 States, commercially distinct from one another because of location or 
 difference in the character of product, ranking as follows in order of 
 the volume of output: (i) The southern region, made up of Oklahoma, 
 
 'U. S. Census 1900, Manufactures, IV, 684. 
 ^Statistical Abstract of United States, 1911, p. 735. 
 
 '20th Annual Report of United States Geological Survey, VI, Metallic Products, Coal and Coke, 
 160. 
 <U. S. Census 1900, Manufactures, IV, 140. 
 
288 History of Domestic and Foreign Commerce. 
 
 Texas, Louisiana, Arkansas, and all the States east of the Mississippi 
 and south of the Ohio and Potomac Rivers, except Kentucky and Ten- 
 nessee; the chief timbers of this section were the longleaf and the short- 
 leaf yellow pine and cypress ; (2) the lake region, including Wisconsin, 
 Michigan, and Minnesota, with white pine and hemlock as the char- 
 acteristic woods; (3) the Central States (Illinois, Indiana, Kentucky, 
 Missouri, Ohio, Tennessee, and West Virginia), forming the great, 
 hardwood belt; (4) the northeastern region, embracing the New Eng- 
 land and Middle Atlantic States, with the spruce, pine, and hem- 
 lock of Maine, and the pine, hickory, and oak of the Middle States as 
 the principal timbers; (5) the Pacific States, important for their large 
 area of redwood, fir, cedar, and pine.^ The lumber production of these 
 five districts, amounting to more than 34,000,000,000 feet, together 
 with shingles, naval stores, and other forest products, contributed a 
 large volume of material to the internal commerce of the nation, the 
 lumber tonnage of the railroads being greater than the tonnage of any 
 other commodity except bituminous and anthracite coal.^ 
 
 The principal feature of the internal trade in forest products between 
 i860 and 1900 was its rapid development in the great central region 
 extending from the Great Lakes to the Gulf States. Before i860 the 
 Lake region had assumed a prominent place as a lumber-producing 
 center, and in addition to supplying a large quantity of material for 
 the construction operations of all kinds in the Central States, it was 
 producing a heavy surplus of boards and staves which were shipped by 
 lake to Buffalo to be distributed eastward. The development of manu- 
 facturing and transportation after i860, the growth of cities, and the 
 settlement of farming regions caused a continually increasing demand 
 for forest products and a rapid exploitation of all the timber resources 
 of the Central States. 
 
 By 1 880 the three Lake States formed the most important lumbering 
 center in the country, a position which they held till near the end of 
 the century; Michigan was the leading State for more than a score 
 of years. The chief primary market was Saginaw, where the produc- 
 tion of white-pine lumber alone in 1882 amounted to nearly 900,000,000 
 feet.^ As the pine forests of Michigan disappeared, the lumber industry 
 of the Lake district shifted westward and Minneapolis and Duluth 
 became the most important primary markets.* From the three cities 
 just named and many other points in the Lake region the sawed lumber, 
 lath, and shingles were shipped by water and rail to such points as 
 Chicago, St. Louis, Detroit, Cleveland, and Buffalo for local consump- 
 
 ^StatisHcal Abstract of United States, 1911, pp. 160-167; Monthly Summary of Commerce ani 
 Finance, Nov. 1900, p. 1084. 
 
 ^Statistics of Railways in the U. S., 1900, p. 65. 
 
 'Monthly Summary of Commerce and Finance, Nov. 1900, p. 1128. *Ibid., 1129, 1132. 
 
Internal Trade, i860 to igoo. 
 
 289 
 
 tion and distribution. Table 33 gives statistics of the receipts and ship- 
 ments of lumber and shingles at Chicago and affords an index of the 
 volume of trade.^ 
 
 Table 33. — Receipts and shipments of lumber and shingles at Chicago, i860, 1870, 1880, i8go, igoo. 
 
 Year. 
 
 Lumber. 
 
 Shingles. 
 
 
 
 
 
 
 Receipts. 
 
 Shipments. 
 
 Receipts. 
 
 Shipments. 
 
 
 Mfeet. 
 
 Mfeet. 
 
 Mfeet. 
 
 Mfeet. 
 
 1860 
 
 262,494 
 
 225,372 
 
 127,894 
 
 168,302 
 
 1870 
 
 1,018,998 
 
 583,490 
 
 652,091 
 
 666,247 
 
 1880 
 
 1,561,779 
 
 925,682 
 
 649,546 
 
 134,375 
 
 1890 
 
 1,941,392 
 
 812,655 
 
 515,575 
 
 108,822 
 
 1900 
 
 1,596,746 
 
 769,451 
 
 338,488 
 
 244,276 
 
 In the Northern Central States there was a development of the manu- 
 facture of vehicles, agricultural implements, furniture, and other 
 wood products, in which a large part of the hardwood timber of that 
 district was consumed. A large share of the cross-ties and heavy 
 lumber used by the railroads was also supplied by the oak forests of 
 this region. The greater relative value of cleared land hastened the 
 deforestation of much of the region north of the Ohio River, and at 
 the end of the century many of the wood industries depended for raw 
 material on hardwoods shipped from Kentucky, Tennessee, and Ala- 
 bama, for which Cincinnati was the leading distributing center. 
 
 Until after 1880 the timber resources of the States of the lower 
 Mississippi Valley were developed slowly, but as the forests of the 
 Lake region and the Northern-Central States were cut away, the 
 manufacturing districts of the North began to draw heavily upon the 
 yellow-pine forests of the South. The result was seen in the rapid 
 expansion of lumber production in such States as Arkansas, Missis- 
 sippi, Louisiana, and Texas, each of which was producing more than 
 i,cxx),ooo,ooo feet of lumber in 1900, a greater quantity than the com- 
 bined output of all four States in 1880. The principal distributing 
 center of the north-bound internal shipment from the yellow-pine 
 district was St. Louis. The lumber receipts at this city in 1899, 
 composed chiefly of yellow pine, amounted to 1,100,000,000 feet.^ 
 
 The internal movement of lumber along the Atlantic and Gulf 
 coasts consisted largely of shipments from the forests and mills to the 
 seaports, the interstate traffic being cared for to a large extent by the 
 coasting trade. Practically every port from Baltimore to Jackson- 
 ville was an important market for lumber sawed in the South Atlantic 
 
 ^Report of Board of Trade of Chicago, 1901, p. 104. 
 
 ^Monthly Summary of Commerce and Finance, Nov. 1900, p. 1147. 
 
290 History of Domestic and Foreign Commerce. 
 
 States, and the Gulf ports also collected large quantities of other 
 southern forest products for coastwise and foreign commerce. An 
 important part of the trade in forest products in the southern region was 
 in naval stores, of which the yellow pine yielded a large and valuable 
 supply. In the northeastern region the spruce timber of New York, 
 Maine, and New Hampshire formed the basis of an extensive trade in 
 wood-pulp. 
 
 The large timber resources of the Pacific States began to be developed 
 on an extensive scale in the eighties, the total production of 2,000,000,000 
 feet in 1890 being 3I times the product of 1880. Until the completion 
 of the Northern Pacific and Great Northern Railroads, California was 
 the leading State, but in 1890 the output of Washington was equal 
 to that of the other two States together. The centers of the lumber and 
 shingle trade of this region were San Francisco, Portland, and the 
 ports on Puget Sound. Until late in the century most of the commerce 
 in forest products was confined to heavy coastwise shipments and a 
 small foreign trade. However, reductions in freight rates on east-bound 
 lumber led to the building up of a large inland trade. Thousands of 
 carloads of shingles and building timbers were shipped to States east 
 of the Rocky Mountains to compete with the white pine of the Lake 
 district and the yellow pine of the South,^ and the rapid rate of increase 
 of this trade indicated that within a few years the area of competition 
 was to spread farther and farther to the east. 
 
 PROGRESS OF MANUFACTURES. 
 
 The progress of manufacturing after i860 was marked by a great 
 augmentation of production, a continuance of the tendency to transfer 
 household industries to shops and factories, a concentration of manu- 
 facturing within a relatively small section of the country, and a locali- 
 zation within that section itself of many of the various single industries. 
 These factors, together with the expansion of the consuming powers of 
 the nation and the development of the transportation system, furnished 
 the basis of an enormous internal trade in manufactured products. 
 
 Table 34 shows the percentage of the total manufactures of the 
 census years of this period produced in the various groups of States.'' 
 
 It will be seen that in 1859 the New England and Middle States 
 produced nearly three-fourths of the total manufactures, and that their 
 share in 1899 was still more than one-half, while these two groups 
 together with the Central States turned out more than eight-tenths 
 of the total product of manufactures of each census year. In general 
 it may be said that the rest of the country was dependent upon these 
 sections for manufactured wares, and when one considers that most of 
 the manufacturing in the South, with the exception of the textile 
 
 ^Monthly Summary of Commerce and Finance, Nov. 1900, p, 1119. 
 *U. S. Census 1900, Manufactures, I, clxxv. 
 
Internal Trade, i860 to igoo. 
 
 291 
 
 industries developed late in the century, consisted in converting cotton, 
 forest products, and sugar into marketable form, that the manufac- 
 turing in the West was chiefly the smelting of minerals and sawing of 
 timber, the enforced reliance of these sections upon the northeastern 
 quarter of the country becomes still more evident. The fact that over 
 one-half of the manufactured products of the United States in 1899 
 was produced in five States — New York, Pennsylvania, lUinois, Massa- 
 chusetts, and Ohio — serves to designate still more closely the chief 
 centers of trade in manufactured goods. 
 
 Table 34. — Percentage distribution of manufactures by groups of States, i86o-igoo. 
 
 Region. 
 
 1860 
 
 1870 
 
 1880 
 
 1890 
 
 1900 
 
 New England States 
 
 Middle States 
 
 27,8 
 42.5 
 10.3 
 18.1 
 0.4 
 3.9 
 
 23.8 
 
 41.8 
 
 6.6 
 
 24.9 
 
 1.1 
 
 1.8 
 
 20.6 
 
 41.3 
 
 6.3 
 
 28.0 
 
 1.4 
 
 2.4 
 
 16.0 
 
 38.9 
 
 7.5 
 
 31.4 
 
 3.0 
 
 3.2 
 
 14.4 
 
 38.0 
 
 9.1 
 
 30.7 
 
 4.3 
 
 3.3 
 
 
 Central States 
 
 Western States 
 
 Pacific States . . 
 
 
 The segregation of many large industries within the manufacturing 
 belt itself was an important factor in determining the course of internal 
 trade between the manufacturing States and the rest of the country 
 and among the manufacturing States themselves, which were the 
 largest consumers as well as the largest producers of manufactured 
 goods. Of the products of the slaughtering and meat-packing industry, 
 the trade in which has already been described briefly, over 67 per cent 
 came in 1899 from lUinois, Kansas, Nebraska, and Indiana. Chicago 
 alone contributed 35.6 per cent in 1889 and in 1899 ^he share of that 
 one city was 45 per cent or nearly one-half of the entire product of the 
 country. Pennsylvania manufactured over one-half of the entire 
 quantity of iron and steel products of this period and a large proportion 
 of the glass. The manufacture of agricultural implements moved 
 westward with the development of the central grain belt, and in 1899 
 Illinois was credited with 41 per cent of the total product. The leather 
 industry was largely centralized in Pennsylvania, Massachusetts, and 
 New York, and of the boots and shoes manufactured and sold through- 
 out the country Massachusetts produced approximately one-half. 
 This State led also in the manufacture of cotton goods, turning out a 
 third of the entire amount. 
 
 Of the 15 leading manufacturing cities in 1899, 12 were situated east 
 of the Mississippi River and 2, St. Louis and Minneapolis, were situ- 
 ated on the banks of that river. All of these cities were the centers 
 of a large amount of trade. New York City alone produced in 1899 
 over one-tenth of all the manufactures of the country; Chicago and 
 Philadelphia together produced another tenth. These three cities. 
 
292 History of Domestic and Foreign Commerce. 
 
 in the order named, led all other cities in printing and publishing, in 
 the production of men's and women's factory-made clothing, and in the 
 manufacture of planing-mill products. They also led, though not in 
 the same order, in foundry and machine-shop work and the manu- 
 facture of cigars and cigarettes. 
 
 GROWTH OF THE VOLUME OF INTERNAL COMMERCE. 
 
 The increase of the total value of the products of manufactures from 
 less than ^2,000,000,000 in 1859 to more than $13,000,000,000 in 1899 
 is an index of the growth of the internal trade in manufactured products. 
 Of a total of 516,000,000 tons of classified freight transported by the 
 railroads in 1900, manufactures furnished over 69,000,000 tons or 
 13.41 per cent of the total, a larger proportion than any other class of 
 freight except products of mines, which formed more than one-half of 
 the total traffic. In the territory north of the Ohio and Potomac 
 Rivers and east of Illinois and Lake Michigan, manufactures constituted 
 16.52 per cent of the entire traffic,^ and probably represented a much 
 greater value than any other class of freight. 
 
 The distribution of imported merchandise from the seaports and 
 other points where they enter the country, like the collection of mer- 
 chandise intended for export at such places, forms an important part 
 of the internal trade of any nation possessing a large foreign commerce 
 and having a wide expanse of territory over which the imports must be 
 distributed. 
 
 The annual value of the imports of the United States rose from 
 $353,000,000 in i860 to $850,000,000 in 1900. About one-third of the 
 imports of the entire forty years consisted of food products in crude 
 or manufactured state, among the most important of which were sugar, 
 coffee, tobacco, fruit, and tea. Manufactures ready for consumption 
 and manufactures and raw materials for use in the manufacturing 
 industries of the United States made up practically all the remainder. 
 A conspicuous feature of the importations was the decreasing propor- 
 tion of finished manufactures, and the increasing proportion of raw 
 materials, the latter class of imports being first in importance at the 
 end of the period. 
 
 By far the largest part of the imports of the United States entered 
 by way of New York. This city received 70 per cent of the total in 
 i860 and in 1900 its share was 60 per cent. Boston, Philadelphia, 
 and Baltimore were the only other large importing centers on the 
 Atlantic coast, but their receipts were small in comparison to those of 
 New York. The imports at New Orleans reached an annual value 
 of $20,000,000 only twice in the forty years, and usually they were 
 less than $15,000,000. On the Pacific coast the increasing trade 
 with Hawaii and nations of eastern Asia caused a steady growth of 
 importations at San Francisco, their value rising from $7,000,000 
 
 ^statistics of Railways in the United States, 1900, p. 66. 
 
Internal Trade, i860 to igoo. 293 
 
 in i860 to $47,ooo,ocxD in igcx). The imports received at the northern 
 border and Lake districts also formed an important part of the foreign 
 trade and added to the internal trade of Chicago, Detroit, Buffalo, and 
 other ports of entry in that region. 
 
 The best index of the growth of internal trade after i860 was the 
 vast increase in the freight tonnage of the railroads over which the 
 largest part of the trade was conducted. In i860 the total traffic 
 originating on the railway lines of the country probably amounted 
 to about 26,000,000 tons.^ In 1900 the tonnage of railway traffic, 
 exclusive of that received from connecting lines and other carriers, 
 was 593,970,955." The freight carried on inland waterways in i860 
 was apparently about equal in amount to the railway traffic. In 1900 
 the traffic on inland waterways amounted to about 90,000,000 tons, 
 of which 60,000,000 tons were carried on the Great Lakes, 28,000,000 
 tons on the Mississippi River system, and 2,000,000 tons on other 
 rivers and canals. 
 
 Of the railroad traffic in 1900 about 87 per ceiit was classified by 
 the Interstate Commerce Commission according to the character of 
 freight and the territory of the lines on which it originated. Of the 
 516,432,217 tons thus classified about six-tenths originated in the 
 territory north of the Ohio and Potomac Rivers and east of Illinois 
 and Lake Michigan; one-eighth in the territory south of the Ohio and 
 Potomac Rivers and east of the Mississippi River; and the remainder 
 in the territory west of Lake Michigan, Indiana, and the lower Missis- 
 sippi River. Products of mines made up 52.59 per cent of this classi- 
 fied tonnage; manufactures 13.41 per cent; products of forests 11.61 
 per cent; products of agriculture 10.35 P^r cent; merchandise 4.26 
 per cent; products of animals 2.87 per cent; and 4.91 per cent was 
 classed as miscellaneous.^ 
 
 SUMMARY. 
 
 A most interesting and significant feature of the history of the 
 United States during this period was the transition in the character of 
 the economic problems of the country. Until the time of the Civil 
 War its chief problems had been those of securing the means to develop 
 its resources, of acquiring the facilities to move its products from place 
 to place, of providing markets in which its products could be sold. 
 As capital, population, and transportation facilities were provided to 
 perform the work of developing the latent wealth of the continent, it 
 was discovered that from their presence grew far larger and more vital 
 economic and political problems than their absence had ever created. 
 The economic difficulties of the nation after the Civil War arose chiefly 
 because of the existence of the things which before i860 it was a ques- 
 tion of acquiring. 
 
 'U. S. Census 1860, Preliminary Report, 105. 
 
 ^Stalislics of Railways in the United States, 1900, p. 67. ^Ibid., 66. 
 
294 History of Domestic and Foreign Commerce. 
 
 In no instance was this general proposition better demonstrated 
 than in the railroad problem. For nearly sixty years of the nineteenth 
 century the chief obstacle to internal trade had been the lack of the 
 means of transportation. To overcome this difficulty the States had 
 first built or aided canals and railroads. Many of the State enterprises 
 failing because of weak administration, the States had surrendered the 
 management of railroads to private corporations, but the public still 
 shared in the work of railroad construction through the numerous 
 grants of aid by Federal, State, and local governments. For a number 
 of years almost the only activity of the pubHc in regard to the railroads 
 was to foster and protect the interests of the railroad companies. In 
 the seventies the public gradually came to realize that the railroad 
 companies disregarded the interests of the public. Persons and com- 
 munities found themselves at the mercy of railroad corporations, which, 
 by discriminations in charges, built up and destroyed towns and had 
 power to control arbitrarily the economic future of sections of the 
 country. Moreover, the railroad companies were instrumental in the 
 creation of industrial combinations which were considered to be a 
 menace to the welfare of the general public. The transportation 
 problem of the United States was not alone that of providing facilities, 
 but also that of controlling and regulating the existing facilities in such 
 a manner that reasonable rates and services would be given to the 
 public that had intrusted the business of transportation to private 
 agencies. Regulation was first exercised by State legislation. The 
 States being powerless to regulate the interstate trade, the National 
 Government found it necessary to act, and in 1887 the interstate 
 commerce law was enacted, having for its chief purpose the prevention 
 of unjust discrimination. As a regulative measure the law proved 
 inadequate, and some important provisions were narrowed in scope by 
 a series of decisions by the Supreme Court. The century ended with 
 railroad regulation but partially accomplished. 
 
 No less pressing than the problem of regulating the railroads over 
 which the internal commerce of the nation was carried on was the 
 question of regulating the great combinations of capital through which 
 a large part of the buying and selHng of the products of the country 
 were controlled. The unfair advantages secured by large combinations 
 because of their abundance of capital and the discriminating favors of 
 railroads enabled them often to throttle competition and to create 
 monopolies that were a menace to the public. This situation brought 
 about the enactment of the Federal anti-trust act of 1890 intended to 
 prevent the monopolization of trade, but previous to 1900 but little 
 application of the law had been made. 
 
 To the tariff and to the currency the nation owed its most bitter 
 political struggles after the reconstruction of the Union was accom- 
 plished. Immediately after the war ended an agitation was begun 
 for the downward revision of the tariff. In 1872 there was a horizontal 
 
Internal Trade, i860 to 1900. 295 
 
 reduction of 10 per cent, but the old rates were restored in 1875 because 
 of a falling off in revenue during the panic of 1873. In 1882 a national 
 tariff commission recommended a 25 per cent reduction of the duties, 
 but the protectionist influence was too strong to permit such a change. 
 Slight reductions were made, however, in 1883, but in 1890 the McKinley 
 act was passed, raising the level of rates higher than ever. The presi- 
 dential campaign of 1892 was fought out on the tariff issue, and though 
 the Democratic party, which championed revision, was victorious, it 
 was able to make an average reduction of only about 10 per cent. 
 The panic of 1893 was ascribed to the new tariff act, and when the 
 RepubHcan party returned to power in 1897 the Dingley act was 
 enacted, raising the general average of duties to a point 10 per cent 
 higher than it had been at the close of the Civil War. 
 
 The frequent disasters into which a poor monetary system had 
 plunged the nation during the first ninety years of its existence would 
 seem to have been suflRcient incentive to cause the currency to be 
 placed on a sound basis, but as a matter of fact the situation after the 
 Civil War, with the exception of the improvement of the banking 
 system, was in other resjjects worse than it had been before. The 
 chief trouble arose because of the adoption of measures intended to 
 satisfy insistent demands for a greater volume of mon^ without 
 making provisions for its retirement when business conditions were 
 such as to warrant a contraction of circulation. A quarter of a century 
 of struggle finally ended in the overthrow of the advocates of the un- 
 limited coinage of cheap silver money, but no attempt was made 
 before 1900 to remedy the inelasticity of the national currency or to 
 check the tendency toward a concentration of the control of credit in 
 a few financial centers. In 1873 and in 1893 the country suffered from 
 money panics, the latter one being due almost entirely to unwise 
 financial measures that had virtually bankrupted the Government and 
 destroyed confidence in the money it issued. 
 
 The end of the century was reached with only a little headway made 
 in the solution of the most vital economic problems. In striking 
 contrast to the conditions of American industry, from 1830 to i860, 
 when there was neither much pauperism nor great riches, this period 
 from i860 to 1900 saw the development of both poverty and wealth, 
 and furthermore, an ever-growing tendency toward the concentration 
 of national wealth under the control of a few powerful interests. The 
 disregard which some of these interests evinced for the welfare of the 
 general public and the power which they possessed to thwart the at- 
 tempts of the pubHc to protect itself created the most serious question 
 which confronted the nation. However, there was ample evidence that 
 the national consciousness was beginning to take cognizance of much 
 of the existing maladjustment and was awakening to a sense of duty 
 long undone. In a quick and intelligent realization of the meaning of 
 existing conditions lay the hope for the immediate future. 
 
CHAPTER XVII. 
 ORGANIZATION AND MANAGEMENT OF INTERNAL TRADE. 
 
 Transportation and communication, 296. The express service, 298. The tele- 
 graph and postal services, 299. Functions and development markets and pro- 
 duce exchanges, 300. Federal and State banking, 303. First and second United 
 States Banks, 304. Regulation of banks by the States and the consequences, 305. 
 Development of corporations, 307. Evils resulting from lack of regulation, 309. 
 
 It is intended to present in this chapter a short account of the 
 development during the nineteenth century of some of the more impor- 
 tant commercial institutions and commercial practices by means of 
 which the growth of the internal trade of the United States was facil- 
 itated and its operations given a greater degree of safety, certainty, 
 and regularity. To give a history of all the changes in the methods 
 and means employed by buyers and sellers to meet and transact their 
 business and to describe in detail the exact manner in which the opera- 
 tions of commerce were carried on during the course of the century 
 would require more space than can here be given to those topics. How- 
 ever, the number and importance of the innovations and modifications 
 in the commercial processes of the nation render it necessary to give at 
 least a brief survey of the history of the institutions, to the influence of 
 which was due in a large measure the great transformation which took 
 place in economic and commercial conditions. 
 
 TRANSPORTATION AND COMMUNICATION. 
 
 As regards changes in the field of transportation, enough has been 
 said in previous chapters concerning the advance made in mechanical 
 processes. Attention has also been called to the close relations that 
 existed between the progress of internal trade and the evolution of 
 the inland transportation system through the various stages of wind- 
 ing trail, inferior earth road, turnpike, canal, and railroad. No other 
 single feature of the progress of the work during the nineteenth century 
 was more significant than the improvement and development of "the 
 inventions which abridge distance," and no country reaped greater 
 benefits from the changes in the means of transportation than did the 
 1 United States. To the continuous improvement of the methods of car- 
 ' rying goods from place to place, more than to any other single cause, 
 was diie the rapid progress of domestic trade. Space and time and 
 the difficulties imposed by the physical features of the surface of the 
 earth and the wide variety of climatic conditions were all overcome, 
 and the operations of trade largely relieved of the burdens formerly 
 imposed by elements of risk and chance. 
 
 An important advantage coming with the improved system of trags- 
 poitation was the possibility of securing through freight service over 
 long distances, regardless of the number of carriers employed in tlie 
 296 
 
Organization and Management of Internal Trade. 297 
 
 movement. In the first part of the century few common carriers 
 offered regular"transportation service over long inland routes, and there 
 were few instances where through routes and through rates were given 
 by connectihg carriers. A shipper sending a consignment of goods 
 which had to be conveyed by several different carriers in turn was 
 compelled either to accompany his shipment, or to employ an agent 
 at the terminal of each route to take charge of his property and forward 
 it to the next point of reshipment, until it reached its final destination. 
 It was impossible to calculate in advance the cost of transporting 
 freight for long distances, and the expense and delay occasioned by the 
 necessity of providing for the special oversight of through traffic was a 
 great burden to internal trade. Sellers of goods often provided their 
 own means of transportation to distant markets and accompanied their 
 shipments, and merchants at inland points usually made periodical trips 
 to large cities, where they would lay in a large stock of goods sufficient 
 to supply the needs of their trade for a considerable length of time. 
 
 The development of the railway freight service put an end to these 
 difficulties of long-distance transportation. Before i860 the elimi- 
 nation of the forwarding agencies was begun through the formation of 
 the fast freight lines — companies organized especially for the purpose 
 of caring for traffic passing over the lines of more than one railroad 
 company. These freight lines provided their own cars and made 
 arrangements with different railroads for hauHng them, thus obtaining 
 continuous service between distant points. Because of several abuses 
 springing up in connection with the operations of these freight lines they 
 were soon superseded, to a large extent, by cooperative fines, which 
 were merely joint arrangements entered into by two or more connecting 
 railroads, each supplying a definite share of the equipment for the 
 through service. The final step in the direction of securing freedom of 
 movement was the agreement of practically all the railroads of the 
 country "to permit the interchange of their freight-car equipment. The 
 adoption of the system of car interchange marked the discontinuance 
 of the organization of fast-freight lines, and even those which still 
 existed at the close of the century had lost their former status, practi- 
 cally all of them having become company fines or freight bureaus of 
 large railway systems which had been formed by the consofidation of 
 the lines that had previously entered the joint traffic arrangement. 
 
 Thus , at th e cloge of the century it was possible for a shipper in any 
 part of die~United States to bill goods, either in carload or less than 
 carload amounts, to a consignee in any other part of the country, receive 
 a through rate on the shipment, and be refieved of all care of his prop- 
 erty while it was in transit, regardless of the number of times it was 
 transferred from the fines of one carrier to those of another. These 
 benefits were at first given voluntarily by transportation agencies for 
 the purpose either of attracting business or of meeting competition, 
 
298 History of Domestic and Foreign Commerce. 
 
 and the public had become so accustomed to them that they were no 
 longer regarded as favors growing out of considerations of a business 
 nature, but as rights to be maintained and protected by legislative 
 enactments. 
 
 It is impjDssible to estimate the beneficial effects on trade, of the 
 improvement in the system of caring for traffic. The speed and safety 
 with which goods could be transported from one section of the country 
 to another eliminated practically all the necessity of making allowance 
 for an element of chance in trade calculations. Buyers of goods found 
 it unnecessary to tie up a considerable portion of their business capital 
 for the sake of keeping in possession a large stock of commodities, there 
 being always a reasonable certainty that they could replenish a dimin- 
 ished supply within a short period of time. Furthermore, large 
 artiqunts of capital were no longer locked up becausFoTthe excessive 
 delay of goods in transit, and all business transactions could be carried 
 on with more regularity and economy. Shippers found it possible to 
 negotiate the bills of lading representing the property intrusted to 
 carriers, and their operations were not hampered by the need of waiting 
 for final settlement with consignees. , A greater stability was given to 
 prices^ both because commodities could be moved freely. and quickly, 
 and because it was possible to calculate exactly the cost of transporta- 
 tipn for any distance. 
 
 Another important development in the field of transportation was 
 the express service, which was first started in 1839 by William Harnden, 
 of Boston. Previous to the origin of this service, it had been customary 
 to send money and small parcels by stage-drivers, steamboat captains, 
 railway conductors, special messengers, or friends and acquaintances 
 who happened to be journeying to the point where delivery was desired 
 to be made. Harnden saw the need of a safe and more systematic 
 service than such methods afforded, and he established a regular 
 express business between Boston and New York, he himself receiving 
 and carrying parcels between the two cities. The immediate success 
 of his initial effort caused him soon to extend the service to other points, 
 hiring agents and messengers to receive and care for the parcels, and 
 making special contracts with railroad and steamboat companies for 
 the transportation of his men and their traffic. The profitableness of 
 his venture encouraged others to enter the field, and within a dozen 
 years several companies were organized to give similar service over 
 various sections of the country. By the end of the century the busi- 
 ness had grown to immense proportions. Most of it became centralized 
 in the control of a half dozen large companies, which in a general way 
 divided up the country among themselves, thus protecting their busi- 
 ness from the danger of loss arising from violent competition and 
 insuring to all of them a large measure of profit. The service, which 
 at first was confined to a high-class parcel traffic, became much more 
 
Organization and Management of Internal Trade. 299 
 
 comprehensive in its nature as time passed. Perishable commodities 
 requiring careful transportation and speedy delivery became a part 
 of the regular express traffic, valuable Hve-stock and shipments of 
 machinery were handled, and in fact all kinds of packages, either large 
 or small, upon which the shippers were willing to pay charges higher 
 than those paid for railway freight service in order to secure more 
 rapid and prompt delivery. Furthermore, the express companies de- 
 veloped a money-order and letter-of-credit service, an order and com- 
 mission business, and a collecting service. 
 
 Of almost equal importance with the betterment of the transporta- 
 tion service given to the country was the improvement in the facili- 
 ties for communication. The progress made in trade would have been 
 impossible without the means for securing a rnoje. rapid,-d.issermnaiion» 
 of inform ajtiori I and the development of the steam railway itself to its 
 high degree of efficiency could not have been accomplished had it not 
 been for the invention of its great accessory, the electric telegraph. 
 
 As early as 1835 Samuel F. B. Morse perfected a mechanism for 
 transmitting verbal messages along an electric wire. He was unable 
 to interest business men in his device and endeavored to persuade 
 Congress to grant him sufficient funds to establish an experimental 
 line. He exhibited his invention before Congressional committees in 
 1838, and five years later he finally secured an appropriation of $30,000 
 for the construction of a line between Baltimore and Washington.^ 
 This line was put in operation in 1844, and it immediately demonstrated 
 the practicability and enormous usefulness of the great invention. 
 By i860 over 50,000 miles of telegraph line were being operated in the 
 United States. All the cities of the eastern half of the country were 
 connected with one another and in i860 a line was built from the Cor- 
 dillera to the Pacific coast. The use of the telegraph in train dispatch- 
 ing was begun about 1850. By 1900 there were about 200,000 miles 
 of telegraph line in the country and the number of messages sent each 
 year amounted to nearly 65,000,000. 
 
 The services which the electric telegraph performed in the operations 
 of commerce are incalculable: producer, consumer, and merchant were 
 brought into immediate and constant touch with one another, regard- 
 less of the distance by which they were separated; the conditions of 
 demand and supply could be made known at all markets; price quota- 
 tions could be carried broadcast to all parts of the country at the same 
 time; and information concerning the industrial and business situation 
 in any locality could be communicated instantly to any point. Busi- 
 ness men could direct their enterprises from a distance, and merchants 
 in widely separated localities could transact their affairs with one 
 another with as much expedition and certainty as if they were together. 
 
 'E. L. Morse (ed.), Samuel F. B. Morse, His Letters and Journals. 2 vols. 
 
300 History of Domestic and Foreign Commerce. 
 
 Commerce was enabled to rid itself of many costly practices that encum- 
 bered its processes under previous conditions. A large number of 
 middlemen were dispensed with, and the costs of their commissions 
 taken off the price of commodities, the amount of stock in trade neces- 
 sary for a merchant to keep in store was greatly reduced, and the 
 greater certainty with which conditions of the future could be calcu- 
 lated decreased the margin necessary to allow for safety in commercial 
 transactions. 
 
 Other means of communication also became highly developed during 
 the century. The efficiency of the postal service given to the people 
 by the government was improved constantly, and at the same time the 
 rates of postage were greatly reduced. The railway post-office, the 
 free delivery of mail by carriers in cities and in many rural districts, 
 and the postal money-order system were some of the more important 
 improvements in the service. The mileage of post-routes in 1900 was 
 500,989, the number of post-offices 76,688 and the number of pieces 
 of all kinds of mail matter handled 7,129,990,202- The telephone 
 was invented in 1876 and quickly became an important adjunct to 
 commerce. The number of newspapers, trade journals, and other 
 publications grew very rapidly, and their usefulness as a means of 
 spreading information concerning prices and business conditions and 
 as a medium for advertising made them a prominent factor in the devel- 
 opment of trade. In 1900 nearly 21,000 newspapers and periodicals 
 were being published in the United States. 
 
 FUNCTIONS AND DEVELOPMENT OF MARKETS AND EXCHANGES. 
 
 In the organization of markets or the actual manner in which buyer 
 and seller meet to transact their business there was as marked a devel- 
 opment during the century as in the methods of transportation and 
 communication. This was true particjilarly as regards the market for 
 the staple agricultural products, such as grain, cotton, and live-stock. 
 In the marketing of most manufactured goods and most of the mineral 
 products, including the two leading ones, coal and iron, the organiza- 
 tion consistently preserved the form and principle of the direct-selling 
 system based on actual bargaining between seller and buyer, though 
 there were many modifications in the details of the methods employed 
 by producers to get their wares to consumers either directly or through 
 a series of wholesaling and retailing middlemen. It will be unnecessary 
 to discuss this form of organization. In the marketing of many raw 
 materials, and especially of farm products, instead of the direct-selling 
 system which prevailed during the first part of the century there was 
 developed a series of exclusive markets or produce exchanges in which 
 the prices of products and the volume of exchanges were determined by 
 the competitive bidding of a restricted class of organized traders. 
 The importance of the functions of these produce exchanges and the 
 
Organization and Management of Internal Trade. 301 
 
 influence they exerted on commerce warrant a brief description of 
 their chief features. 
 
 The great produce exchanges of the United States began to develop 
 about the middle of the nineteenth century in response to the need for 
 a well-organized market for the distribution of the staple agricultural 
 products of the country, which had increased in amount until they so 
 far exceeded the local demands each year that the surplus stocks were 
 sufficient to supply materials for a trade world-wide in its extent. 
 The improvements in the methods of transportation and communica- 
 tion facilitated the growth of trade, but in order to secure an adequate 
 distributive system it was necessary to develop a special commercial 
 organization in which buyers and sellers would have the advantages of 
 maximum promptness and convenience as well as of uniform standards 
 of usage, and consequently general and special exchanges, the former 
 admitting several commodities to the list of products which could 
 be bought and sold within its precincts and the latter organized for trade 
 in one commodity only, grew up at the important commercial cities 
 which were the collecting and distributing points for the various agri- 
 cultural products of the country. 
 
 A produce exchange is merely an organized market in which people 
 may buy and sell freely certain commodities either in person or through 
 a broker. The main purposes of the exchange, which are always enu- 
 merated in its charter, are: to maintain a suitable room for a market- 
 place; to inculcate just and equitable principles in trade; to establish 
 and maintain uniformity in commercial usages; to acquire, preserve, 
 and disseminate valuable information; and to adjust controversies 
 and misunderstandings between persons engaged in business. The 
 exchange itself makes no transactions in the trade as an organized 
 body, the trading being done solely by individual members, who are 
 limited in the extent and nature of their transactions only by their 
 own desires and the standards imposed by the special trading rules and 
 regulations of the exchange organization. 
 
 There are two main kinds of transactions on a produce exchange — 
 trading in a commodity for immediate delivery or "spot" transactions, 
 and trading in contracts for delivery at a specified future time or 
 dealings in "futures." The original and basic purpose of the organi- 
 zation of exchanges was to facilitate the former class of sales by pro- 
 viding a convenient place at which all the merchants interested in the 
 trade in a particular commodity could meet and buy and sell among one 
 another. This kind of trading still comprises a large amount of the 
 business done on produce exchanges. Practically all the smaller 
 exchanges have never been anything else but "spot" or "cash" markets, 
 but in the larger exchanges not only did cash trading grow to a large 
 volume, but speculative dealing in a few commodities, such as grain 
 and cotton, also became highly developed. 
 
302 History of Domestic and Foreign Commerce. 
 
 The advantages of the cash market of the produce exchange are 
 obvious. The organization of a series of exchanges creates a con- 
 tinuous market, insures a more or less general level in the price of a 
 commodity in all markets, and gives an added mobility to produce, all 
 of which result in great benefit to both producer and consumer. The 
 dealing in futures on produce exchanges has met with much unfavor- 
 able criticism, but a clear understanding of the exact nature of specula- 
 tive trading reveals that when conducted within proper limitations it 
 renders an important service to commerce which could not well be 
 dispensed with. The chief advantage lies in the fact that it affords a 
 way for merchants and manufacturers to insure themselves against a 
 loss of ordinary trade profits by shifting the burden of risk to an expert 
 commercial class who make it a profession to assume the risk on a 
 chance of gain from price fluctuations at different times and places. 
 A grain merchant, an exporter, or a miller, through the process of 
 "hedging," can protect himself against the hazard of a loss of trade 
 profit, and the service which a produce exchange renders enabling 
 this to be done makes it both an effective and an extremely useful 
 commercial institution. Evil practices, it is true, have risen in con- 
 nection with speculative operations on exchanges, but these do not 
 detract from the usefulness of these markets as far as concerns their 
 legitimate and proper functions. 
 
 This brief description indicates in a general way the purpose and 
 function of produce exchanges. As was previously stated, the great 
 exchanges of the United States were organized about the middle of the 
 nineteenth century. Some of them were the direct successors of mer- 
 cantile organizations without trading functions which had been formed 
 originally for the purpose of promoting the commercial interests of 
 various sections of the country. The New York Produce Exchange, 
 incorporated in 1862, had an ancestry running back through many both 
 trading and non-trading organizations, the earliest of which were 
 founded in colonial times. The Merchants' Exchange of St. Louis, 
 the history of which as a trading body began about 1850, was the suc- 
 cessor of the St. Louis Chamber of Commerce, organized in 1836 pri- 
 marily as a debating society. The Chicago Board of Trade was 
 organized in 1848 and incorporated eleven years later. The New York 
 Cotton Exchange and the New Orleans Cotton Exchange were both 
 incorporated in 1871. Other important exchanges organized during 
 the latter part of the century were the Live Stock Exchange of Chicago, 
 the Chamber of Commerce of Minneapolis, the Duluth Board of Trade, 
 and the Board of Trade of Kansas City. Many other exchanges were 
 established at other important commercial cities. All of these great 
 markets provided the medium through which a large part of the agri- 
 cultural produce of the country was transferred from producer to con- 
 sumer, and their organization and growth constituted an important 
 feature of the commercial progress of the century. 
 
Organization and Management of Internal Trade. 303 
 
 FEDERAL AND STATE BANKING. 
 
 Of equal importance in the operations of commerce with the organi- 
 zation of the market and the methods of transporting goods, is the sys- 
 tem for settling accounts between debtors and creditors. The diffi- 
 culty and inconvenience of attempting to complete every commercial 
 transaction by a transfer of money led long ago to the devising of a 
 means by which settlements could be made by transfers of credit and 
 to the development of banking institutions to facilitate such transfers. 
 Classic still is the comparison made by Adam Smith of the "judicious 
 operations of banking" to a "waggon-way through the air," and in 
 Alexander Hamilton's report on the Bank of the United States one 
 may find a concise and lucid statement of the whole theory of modern 
 banking. 
 
 The primary function of a bank is to serve as a "manufactory of 
 credit." This credit a bank lends to business men who transfer it from 
 one to another for the payment of debts just as they would transfer 
 money, it being understood that the bank stands ready to redeem its 
 credit obligations at all times with lawful money. The evidence of 
 bank credit used in transfers may in general take two forms — bank 
 notes payable to the possessor on demand, and checks or drafts payable 
 to the order of a specified individual. In the early period of American 
 history the bank note was the form of bank credit most extensively 
 used, but as commerce grew and the banking business of the country 
 developed in efficiency the method of settlement of business transac- 
 tions by the use of checks and drafts became proportionately more 
 important, and at the close of the century by far the largest part of 
 the trade of the country was carried on by this means. 
 
 Banking in the United States has had a checkered history. During 
 the colonial era the scarcity of specie was the cause of most of the 
 attempts at banking, which were in the main confined to efforts of 
 companies or partnerships to emit on landed security bills of credit 
 which would supply the need for a circulating medium. Such experi- 
 ments violated the cardinal principles of safe banking, that a bank 
 should be ready to redeem its obligations in money, and that its invest- 
 ments should have not only the quality of safety but also that of being 
 "quick," that is, easily convertible into money at any time. Prac- 
 tically all of the experiments failed dismally or were suppressed by the 
 colonial governments or by the government of the mother country. 
 
 At the time of the adoption of the Constitution there were three banks 
 in the United States — one each in New York, Boston, and Philadelphia — 
 all of which were organized after 1780. The Philadelphia institution, 
 called by name the Bank of North America, was chartered originally 
 by Congress and it rendered important service to the National Govern- 
 ment during the closing days of the Revolution, at a time when the 
 credit of the country had reached its lowest ebb and the Continental 
 currency had become worthless. All three of these banks were man- 
 
304 History of Domestic and Foreign Commerce. 
 
 aged in a conservative manner and all of them continue to exist at 
 the present time. 
 
 Twice after the formation of the Union the National Government 
 granted a special charter to a bank, the Government becoming a share- 
 holder in the bank in both instances. The first Bank of the United 
 States, chartered in 1791, was organized according to plans formulated 
 by Alexander Hamilton, who fathered a number of important measures 
 intended to restore the disordered finances of the nation and place its 
 credit on a firm basis. The bank was an extremely successful enter- 
 prise. It was the fiscal agent for the government, and it rendered 
 a still greater service by acting as a regulator of the currency, its high 
 standards compelling State banks carefully to avoid any undue expan- 
 sion of their issues of paper money. Mainly because of the opposition 
 of State banks, which wished to avoid the competition of such a power- 
 ful rival, the first Bank of the United States failed to secure a renewal 
 of its charter, and in 181 1 it was put in Hquidation. A large number of 
 additional State banks immediately sprang into existence to take its 
 place. Lack of proper regulation permitted a rapid inflation of the 
 currency. During the sharp crisis of 1814 most new banks in all the 
 States, and most old banks outside of New England, suspended specie 
 payment, and the Federal Government, with most of its money deposited 
 in the suspended banks, the notes of which were quoted at discounts 
 varying from 10 to 30 per cent, found itself in desperate financial straits. 
 The ending of the war brought a measure of relief, but the disordered 
 state of the currency induced President Madison to recommend the 
 establishment of a second bank, which was chartered, accordingly, in 
 1816. During the first few years of its career the bank was nearly 
 ruined by the mismanagement of its directors, but by 1820 it was 
 placed in a sound condition and it eventually succeeded in its original 
 purpose of establishing a sound and uniform currency. Unfortunately 
 the question of renewing the charter of the bank was made a political 
 issue by its president for the purpose of defeating Andrew Jackson in 
 1832. A spectacular conflict ensued in which Jackson was completely 
 victorious and the bank failed to secure a renewal of its charter, falling 
 a sacrifice to its entanglement with the political fortunes of Henry 
 Clay and the Whig party.^ 
 
 Between 1836, the time of the expiration of the charter of the second 
 Bank of the United States, and 1863, the year of the enactment of the 
 national banking law, the regulation of banking in the United States 
 was left to the individual States, the Federal Government making no 
 eflfort directly to control the business. The overthrow of the second 
 Bank of the United States was followed, as was the liquidation of the 
 first, by the organization of a large number of State banks. The lack 
 of adequate and uniform public regulation permitted almost universal 
 fraud and abuse, and the banking business of the country during these 
 
 'White, Money and Banking (4th ed.)> Book III, chap. viii. 
 
Organization and Management of Internal Trade. 305 
 
 years was in an almost continual state of disorder. As the chief opera- 
 tion of banks consisted in the emission of currency intended for general 
 circulation, the country became flooded with a great variety of bank 
 notes, many of which fell rapidly in value. Many States, instead of 
 attempting to check fraudulent banking operations, remained passive, 
 and some even enacted measures intended to protect unstable banking 
 institutions in their reckless practices. Notes of most banks were 
 quoted at a certain discount in different sections of the country; 
 merchants were compelled to refer to "Bank-Note Reporters" to deter- 
 mine the value of the currency tendered by their customers; and to 
 complicate the situation, counterfeits of every description were put in 
 circulation. Bank failures were of course common occurrences, and 
 the losses suffered by the people totaled milHons of dollars. 
 
 The States of the South and West were the worst offenders in the 
 matter of failing to regulate banking, though there were some notably 
 sound banks in both these sections, the most conspicuous examples 
 being the State Bank of Indiana, the State Bank of Ohio, and the Bank 
 of Virginia. The banks of Louisiana, organized according to the provi- 
 sions of the banking law of that State enacted in 1842, were also sound. 
 The banking system of the New England States afforded an example 
 of safe banking which contrasted strongly with the prevailing systems 
 in other parts of the country. The Suffolk Bank of Boston, aided by 
 the legislature of Massachusetts, established the New England system. 
 This bank accepted at par the notes of any solvent New England bank 
 which would provide funds for their redemption and also keep a perma- 
 nent deposit at the Suffolk bank, the interest on which would provide 
 compensation for its trouble. Banks in all parts of New England 
 entered the system. When the legislature of Massachusetts passed a 
 law forbidding banks to pay out any notes but their own, the Suffolk 
 was virtually constituted a clearing-house for all the banks of that State 
 and through the voluntary action of the banks in other New England 
 States it occupied a similar position for them. The system was highly 
 advantageous to New England, and the credit of the banks under the 
 system was so good that their notes found ready acceptance throughout 
 the entire country. In New York the famous safety-fund system was 
 instituted in 1829, but about the time that the system was developed 
 to a point of greatest possible efficiency it was abolished. Under the 
 free banking system established in 1838 there was a renewal of unsound 
 banking, but public opinion and effective regulation had almost elimi- 
 nated reckless methods by the time of the outbreak of the Civil War. 
 In Pennsylvania there was a large number of disastrous bank failures 
 during this period of unregulated State banks. This State repeatedly 
 enacted laws declaring that all banks suspending specie payment should 
 forfeit their charters, but whenever general suspension occurred the 
 legislature promptly passed measures relieving the offending institu- 
 tions from being subjected to the penalty. 
 
3o6 History of Domestic and Foreign Commerce. 
 
 The national banking act was passed during the Civil War. The 
 purposes of this measure were to bring banking under the supervision 
 of the Federal Government, to regulate the currency, and to provide 
 a market for government bonds. In 1865, by imposing an annual 
 tax of 10 per cent on the notes of State banks. Congress gave to the 
 national banks a monopoly of issuing notes for general circulation. 
 The law providing for the organization of national banks laid down a 
 system for their regulation and inspection by officials of the Federal 
 Government. The adoption of the new system produced some benefi- 
 cial effects. Its most notable service, in view of the condition of bank- 
 ing prior to the time the national banking act was passed, was that it 
 provided a bank-note circulation of uniform value. Notwithstanding 
 the improvements brought about, the banking and currency system of 
 the country was still burdened with many defects. The extreme 
 rigidity of the bond-secured currency and the lack of cohesiveness and 
 cooperation among the banks in times of strained financial conditions 
 were the principal disadvantages with which the banking business was 
 forced to combat, and these defects all tended to hinder the commercial 
 progress of the country. 
 
 The great commercial and financial crises which visited the country 
 during the nineteenth century were in part the result of the condi- 
 tions of banking. In 1814 and again in 1818 the injudicious issue by 
 State banks of a large volume of notes, for the redemption of which 
 there was no specie available, coupled with a sudden attack on these 
 issues by specie-paying banks, was largely responsible for the misery 
 into which the nation was plunged. In 1837 not only was there an 
 absence of an adequate cash reserve against the large volume of bank 
 notes in circulation, but the loans of many of the banks had been made 
 to transportation and industrial companies whose enterprises were 
 foredoomed to failure. The stocks representing a large part of the 
 assets of the banks were utterly worthless, and the resulting failures 
 were exceedingly disastrous. The panic of 1857 was a true financial 
 panic. There was a sudden loss of confidence, and the supply of specie 
 again proving inadequate, many banks were forced to suspend pay- 
 ment. This occasion, however, was not marked by the disaster that 
 was witnessed during the years immediately after 1837. Business had 
 been good and for the most part conservatively managed; the securities 
 held by banks were those of solvent and prosperous organizations, 
 and consequently the country quickly recovered. The panic of 1873 
 was unfortunately a repetition of that of 1837. Heavy investment in 
 railroads that were built long in advance of the need for them was the 
 chief fault of great banks, the failure of which precipitated the catas- 
 trophe. Again there was a lack of assets to offset the heavy liabilities 
 of the failing concerns and the depression was protracted and severe. 
 The crisis of 1893-95 '^^^.s due less to unsound banking than to the pur- 
 chase and coinage of silver under the Acts of 1878 and 1890, though 
 
Organization and Management of Internal Trade. 307 
 
 the undue extension of credit to speculative business enterprises and 
 the inherent weaknesses in the banking system of the country were 
 again important causes of the severe depression. 
 
 By the close of the nineteenth century the banking business of the 
 United States had grown to very large proportions. In 1900 there were 
 12,975 banking institutions in the country, exclusive of savings banks, 
 which numbered 1,002. The national banks, of which there were 
 3,732, possessed resources amounting to $4,944,165,000. The Comp- 
 troller of the Currency received reports during the year from 6,650 
 State, incorporated, and private banks, the resources of which amounted 
 to $5,841,658,000, making the total resources of the 10,382 banks which 
 reported $10,785,823,000. The resources of the savings banks were 
 $2,624,833,000, and 290 loan and trust companies reported resources 
 valued at $1,330,160,000. The great commercial importance of the 
 banking business was indicated by the total amount of bank clearings 
 for the year, which reached a sum of more than $84,500,000,000. 
 
 One important service of the banking business to commerce has 
 already been referred to. The bank is the agency employed in the 
 settlement of accounts between buyers and sellers. The convenience 
 of banking to the business world and the speed, certainty, and facility 
 which it gives to the operations of trade have made it one of the most 
 effective and useful modern business institutions. In addition to 
 being agents for the completion of commercial transactions of ordinary 
 character, banks also perform an important service in acting as a reser- 
 voir for the collection and utilization of the unused capital of a com- 
 munity. The large funds deposited with banks are always available 
 for loans to mercantile and industrial concerns, and thus they may con- 
 stantly be employed in the production of additional wealth. As Levi 
 P. Morton justly says: "To national life the banking system is as the 
 arterial system to animal life. Through it circulates the vitalizing 
 current which sustains the brain of business and statecraft and 
 strengthens the arm of labor." As custodians of the resources of 
 a community bankers are placed in a position of extreme responsibility. 
 Special institutions, the credit and commercial agencies, have been 
 developed, the function of which is to determine, after careful investi- 
 gation, the strength of the credit of business firms, and the information 
 supplied by these agencies assists bankers in deciding whether loans 
 can be made with safety to the individuals who apply for them. 
 
 DEVELOPMENT OF CORPORATIONS. 
 
 In turning finally to a consideration of business organization as a 
 whole within the United States, without regard to any distinct kind of 
 enterprise, it may be said that there was one institution which held a 
 position of commanding importance in the economic and commercial 
 development of the nation during the nineteenth century. This 
 institution was the private business corporation. In the early period 
 
3o8 History of Domestic and Foreign Commerce. 
 
 of the history of the country the leading industrial activities could 
 easily be carried on by individual business men or by partnerships, 
 but as population spread and the natural resources of the country 
 became available for exploitation, it quickly became apparent that the 
 older types of business structures could not command a supply of 
 capital sufficient to carry out the large projects in the fields of trans- 
 portation, manufacturing, and banking necessary to a proper utilization 
 of the economic opportunities which the country afforded. The cor- 
 poration was a device in every way suited to the needs of the situation. 
 It afforded a means of concentrating the capital of a large number of 
 persons into a single enterprise without subjecting the contributors to 
 a risk greater than the amount of their investment, or requiring their 
 personal attention to the management of the business, and the other 
 advantages of corporate organization, such as the continuity of existence 
 and the easy transferability of ownership, were additional features 
 that favored its extensive use. 
 
 At the time of the formation of the Union there were few private 
 corporations in the United States. Within a few years, however, the 
 number began to grow rapidly, the first marked increase coming shortly 
 after 1790, with the organization of a large number of turnpike com- 
 panies in the Eastern States. At first, transportation and banking 
 offered the best fields for corporate activity; but manufacturing soon 
 afforded abundant opportunity for general investment, and the cor- 
 poration began to displace the individual and the partnership in this 
 branch of industrial activity. Early corporations were chartered by 
 special legislative acts, but, both because of the corrupt practices that 
 arose in connection with attempts to secure the enactment of special 
 legislation and because of the need for a more comprehensive and uni- 
 form system of dealing with the questions affecting the organization 
 and control of chartered companies, most of the States passed general 
 laws regarding their formation and management. Under the liberal 
 policies of the State governments and with the growth of population, 
 wealth, and commerce the corporation rapidly assumed a position of 
 dominance in all industrial and financial enterprises. Most of the 
 transportation, banking, insurance, manufacturing, and mining inter- 
 ests of the country passed under the control of corporations before 
 1850, and after that year, as the need for larger and larger amounts of 
 capital arose and as the advantages of large-scale production and con- 
 centration of industry became more apparent, there was an even more 
 rapid growth in their number and a greater increase in their wealth and 
 dominating influence. In 1900 practically all of the 192,00x3 miles of 
 railroad in the United States were owned and operated by railway cor- 
 porations, of which the number was 2,023 > there were 40,743 corpora- 
 tions engaged in manufacturing, and the value of their output comprised 
 two-thirds of the total value of all product of manufactures; of the 
 products of mines and quarries more than 86 per cent was produced by 
 
Organization and Management of Internal Trade. 309 
 
 incorporated companies; and practically all the banking and insurance 
 business of the country was under corporate ownership. An increasing 
 proportion of the retail mercantile business was assuming the corporate 
 form of organization, and even in agriculture, especially in the Western 
 States, where projects for extensive irrigation of arid lands called for 
 large outlays of capital, the corporation was assuming a position of no 
 little importance. 
 
 The chief advantage of the corporation lay in the fact that it made 
 possible the accumulation of a large amount of capital to be devoted to 
 a single venture. To move a great inert mass requires a powerful lever. 
 The conquest of a continent was a problem too great for individual 
 effort; it took the associated effort of many individuals to surmount 
 the difficulties which the situation presented, and the corporation 
 made possible the union for a common purpose of an unlimited number 
 of individuals. Furthermore, the placing of a tremendous amount of 
 capital under the control of a few persons brought to the front a large 
 number of men of great foresight and capacity, the "captains" of 
 industry and finance, to whose genius for management and organization 
 of productive forces was partly due the spectacular rise of the United 
 States to a place of foremost rank among the industrial nations of the 
 world. The powerful agencies which the corporation set in motion 
 made economic development rapid, and, on the whole, steady and 
 uniform. 
 
 The corporation was not, however, without evil. Though to its 
 influence may be ascribed in a large measure the rapidity of material 
 progress, it was at the same time often used as a means for the perpe- 
 tration of dishonest and degrading acts which brought a train of uneco- 
 nomic and wasteful consequences. Adventurous speculators formed 
 companies to carry out impracticable or impossible schemes, and 
 brought ruin to themselves and to many other individuals of a specula- 
 tive turn of mind who were induced to participate in their unwise 
 ventures; and many corporations were launched for no other purpose 
 than the creation of a mass of worthless securities to be sold by the 
 promoters to easily deceived and unwary investors. Corporations 
 organized for legitimate ends were also often used as a means of swind- 
 ling stockholders by unscrupulous directors who absorbed the profits 
 by leasing valuable privileges to themselves or by other forms of mis- 
 management. The purchase at low cost of valuable franchises was often 
 accomplished by bribery and corruption of public officials, and undue 
 and improper influence was often used to secure the passage of legis- 
 lation desired by corporate interests, the Federal Government itself 
 not being able at all times to avoid the taint of suspicion. The pecul- 
 iar legal status of the corporation as a person in contemplation of law 
 seemed to cause officials to feel that the acts of the corporation were 
 not their own acts and to lead to a lower standard of business morality 
 and to the condonement by corporation officials of unethical practices. 
 
3IO History of Domestic and Foreign Commerce. 
 
 which would not have been countenanced under the previous forms 
 of business organization. 
 
 In addition to permitting the development of evils such as those 
 mentioned above, the corporation was the instrument for the develop- 
 ment of what was probably the greatest economic problem of the latter 
 part of the nineteenth century — the problem of combination and 
 monopoly. It was inevitable that corporations engaged in the leading 
 industries in the United States, where there existed such great oppor- 
 tunities for prosperous growth, should eventually become enormously 
 wealthy and powerful, and it was equally inevitable that in time, as 
 production expanded, great corporations which were rivals in the same 
 branch of industry should engage in a competitive struggle for the 
 possession of markets which all could serve. When rich and powerful 
 organizations with tremendous resources at their command met in com- 
 petition the resulting conflict was disastrous. Defeat usually meant 
 ruin, and victory was often purchased at the same cost. Out of the 
 frequent disasters resulting from rate wars between i860 and 1880 
 railroad managers learned that continued struggle usually brought 
 only destruction, and that the path of safety lay in the elimination of 
 competition. For some years the managers of rival roads attempted 
 to avoid competition by means of rate and traffic agreements, but when 
 the enactment of State and Federal laws to enforce competition ren- 
 dered it impracticable to make such agreements, extensive combination 
 and consolidation were resorted to as the best available means of 
 securing cooperative action. In a general way the United States was 
 divided up among a number of powerful interests, and the perfection 
 of various devices for securing harmonious relations among these 
 interests insured the absence of future wars of destruction. 
 
 Though the tendency toward the amalgamation of rival interests in 
 the fields of manufacturing and mining became almost as strong as in 
 the field of railway transportation, competition among rival manufac- 
 turers was not so inherently destructive as was competition among 
 railroads, and manufacturers began later than did the railroads to 
 form large combinations. The earlier industrial combinations may be 
 said in general to have been due chiefly to a desire for monopoly profits 
 on the part of those by whom the combinations were eflPected. Some- 
 times the union of rival interests would come about because of pressure 
 brought to bear on smaller concerns by a powerful corporation which, 
 because of economies of large-scale production and preferential advan- 
 tages secured from railroads, was able to give its weaker competitors 
 a choice between absorption or destruction. The Standard Oil Trust 
 was an example of this type of combination. Other combinations 
 resulted merely because rival producers became convinced that greater 
 profits could be secured through cooperation than through competition, 
 and they pooled their interests accordingly. Public protest against 
 such attempts at monopolization resulted in a large amount of pro- 
 hibitive legislation directed against trusts and pools. The dissolution 
 
Organization and Management of Internal Trade. 311 
 
 of such agreements was promptly followed, however, by the adoption 
 of much more effective methods of combination — either the complete 
 merging of the competing concerns into a single one, or the formation 
 of a holding company, usually a gigantic corporation which took over 
 the stock of the various combining companies in exchange for the stock 
 of the new organization. The combinations were usually accompa- 
 nied by large issues of watered stock which represented a capitaUzation 
 of the expectations of the promoters of the new companies. The success 
 of many of the earlier combinations and the advance in the market 
 value of their watered stock revealed the fact that combination in 
 and 0/ itself might prove an enormous source of profit, and it was this 
 idea as well as the desire to eliminate competition that furnished the 
 incentive for many of the later industrial combinations. Speculative 
 promoters took quick advantage of the trend towards combination and 
 they created for themselves and for others paper fortunes of great 
 dimensions, many of which were transmuted into real fortunes during 
 the rising tide of prosperity after 1896. The many combinations 
 among most of the companies out of which was eventually formed 
 the United States Steel Corporation, and the formation of that com- 
 pany itself, furnished conspicuous examples of excessive capitalization. 
 Too often the monopolistic combinations took advantage of their 
 position to raise prices and exact heavy tribute from the consuming 
 public. Attempted competition by outsiders was throttled by local 
 price-cutting, by factors' agreements, or by other unfair devices. 
 Unwilling to endure or tolerate some of the unfair practices, many 
 States passed measures intended to prevent the formation of monopo- 
 listic combinations. However, the indulgent policy of a few States 
 toward all private corporations virtually negatived the efforts of the 
 others. In 1890 the Federal Government, acting on its constitutional 
 authority to regulate interstate trade, passed a law declaring illegal 
 "every contract, combination in the form of a trust or otherwise, or 
 conspiracy, in restraint of trade or commerce among the several 
 States," and providing punishment for "every person who shall monop- 
 olize or attempt to monopolize . . . any part of the trade or com- 
 merce among the several States." The interpretation given to this 
 statute by the Supreme Court in its decision in the E. C. Knight 
 (Sugar Trust) case in 1895 seemed to indicate that the law would be of 
 little effect, but in later decisions, in the cases of the Trans-Missouri 
 Freight Association (1897), the Joint Traffic Association (1898), and 
 the Addyston Pipe and Steel Company (1899), the court seemingly 
 modified its previous position and clearly showed that the statute could 
 be used to put a stop to monopolistic methods in controlling railroad 
 rates and to bring about a dissolution of a combination through which 
 a monopoly of interstate commerce in any commodity was effected. 
 With this direct application of Federal control there was foretold 
 another era of modification in the forms and methods of business 
 organization and management. 
 
CHAPTER XVIII. 
 
 COMMERCIAL CHANGES OF THE OPENING YEARS OF THE 
 TWENTIETH CENTURY. 
 
 Growth of population and industry, 1900 to 1910, 313; of agricultural industries, 
 313; of manufacturing, 31S; of minerals, 316; of forest products, 316. Develop- 
 ment of transportation and internal trade, 316. Growth of electric railways and 
 the use of electricity, 317. Waterway improvement and projects, 318. Public 
 regulation of transportation and commerce, 319. Regulation of corporations, 321. 
 Revision of the tariff, 322. The conservation movement, 323. 
 
 In the preceding chapters there has been given a brief description of 
 the development of the United States during the nineteenth century 
 from an economic position of comparative insignificance to a place of 
 importance among the rich and powerful nations of the world. Rapid 
 as was the material progress of the country during the nineteenth cen- 
 tury, the opening of the twentieth century held promise for growth yet 
 more rapid. The number of people in the country was increasing and 
 there was room for millions more; the products of agriculture were 
 enlarging steadily; the natural resources were being drawn upon each 
 year for a larger and larger quantity of fuel and raw materials; manu- 
 facturing was growing at an unprecedented rate; new industries were 
 rising in response to new wants and needs; new sources of power were 
 being utilized ; new discoveries, new inventions, and new methods were 
 multiplying the productivity of all industry; the entire machinery of 
 production and distribution was gaining in efficiency and power. 
 
 As civilization advances each century builds upon a heritage from 
 centuries gone before. The achievement of the nineteenth century 
 was the foundation upon which the century to come was to build. 
 The opening of the new century gave promise that the progress of the 
 United States was to continue not only through using the fruits of 
 former success, but also through the uprooting of old evils and the 
 redemption of old faults. As was pointed out in another place, though 
 the efforts to solve the great economic problems of the latter part of 
 the nineteenth century had not met with a large measure of success 
 before the century closed, there were nevertheless distinct indications 
 that the immediate future would witness more determined efforts to 
 secure a readjustment of the unsatisfactory conditions in the indus- 
 trial system. The fruits of these efforts, together with the steady 
 improvement in general material welfare, constitute the significant 
 features of the economic history of the United States during the 
 opening years of the twentieth century. 
 
 That the promise which the beginning of the century seemed to have 
 for a continuance of material progress was not false was amply demon- 
 strated by the achievements of the first decade of the new century. 
 312 
 
Commercial Changes, Opening Years of Twentieth Century. 313 
 
 A comparison of the statistics of the census of 1910 with the statistics 
 collected at all previous census years shows that the first decade of 
 the twentieth centi^ry witnessed a greater increase in the population 
 and wealth of the United States than any previous ten years. In 
 the following paragraphs will be given a brief survey of the material 
 growth of the nation from 1900 to 1910, to be followed with a state- 
 ment concerning the development of internal trade during that period; 
 and the chapter will close with a short discussion of the important 
 changes in government policies affecting industry and trade. 
 
 GROWTH OF POPULATION AND INDUSTRY FROM 1900 TO 1910. 
 
 The total population of the continental portion of the United States 
 increased from 75,994,575 in 1900 to 91,972,266 in 1910.^ Again the 
 Western States showed a greater percentage of increase than the 
 other States, and the center of population shifted a few miles farther 
 westward. Almost 9,000,000 foreign immigrants entered the country 
 during the first ten years of the century, the number of arrivals 
 for each year after 1901 ranging from 648,000 to 1,285,000.^ The 
 valuation of the real and personal property of the people of the United 
 States in 1904 showed the total physical wealth of the country, which 
 in 1900 had been $88,500,000,000, to be $107,000,000,000 or $1,318 
 per capita.^ By 1910 the amount had probably increased to more 
 than $180,000,000,000. 
 
 Table 35. — Production and value of specified crops in the United States, iSgg and 1909.^ 
 
 Crops. 
 
 Production. 
 
 Value. 
 
 1899 
 
 1909 
 
 1899 
 
 1909 
 
 All crops, value 
 
 
 4,512,564,000 
 
 2,552,189,000 
 
 683,379,000 
 
 1,007,142,000 
 
 97,453,000 
 
 1,055,764,000 
 
 10,649,000 
 
 5,324,000 
 
 389,194,000 
 
 $2,998,704,000 
 1,482,603,000 
 828,192,000 
 369,945,000 
 217,098,000 
 484,254,000 
 
 56,987,000 
 323,758,000 
 
 46,950,000 
 
 98,380,000 
 140,152,000 
 
 83,750,000 
 
 $5,487,161,000 
 2,665,539,000 
 1,438,553,000 
 657,656,000 
 414,697,000 
 824,004,000 
 104,302,000 
 703,619,000 
 121,076,000 
 166,423,000 
 251,686,000 
 140,867,000 
 
 All cereals, bush 
 
 Corn, bush 
 
 4,438,857,000 
 
 2,666,324,000 
 
 658,534,000 
 
 943,389,000 
 
 79,251,000 
 
 868,112,000 
 
 9,534,000 
 
 4,767,000 
 
 273,318,000 
 
 Wheat, bush 
 
 Oats. bush. . . 
 
 Hay and forage, tons.. . 
 Tobacco, lbs 
 
 
 Cotton seed, tons 
 
 Potatoes, bush 
 
 Other vegetables, bush . 
 Orchard fruits, bush . . . 
 
 212,365,000 
 
 216,083,000 
 
 ^Abstract, U. S. Census 1910, p. 360. 
 
 The statistics for agriculture for 1910 showed that while there had 
 been some increase in the output of farm products since 1900, the 
 percentage of increase was not so large as the percentage of increase 
 
 ^Abstract, U. S. Census 1910, p. 21. 
 
 'Statistical Abstract of United States. 1912. p. 789. 
 
 'Ibid., 738. 
 
314 
 
 History oj Domestic and Foreign Commerce. 
 
 of the population. The number of farms increased between 1900 and 
 1910 from 5,737,372 to 6,361,502, and the farm acreage from 838,591,774 
 to 878,798,325. The value of farm property, including land, buildings, 
 implements and machinery, and domestic animals doubled in the ten 
 years, advancing from $20,000,000,000 to $40,000,000,000.^ The 
 increase in the production of the most important crops is shown in 
 table 35. The increase in the value of the various products, which 
 because of rising prices was much greater proportionately than the 
 increase in the actual quantity of articles produced, is also shown. 
 
 In the number of domestic animals in the United States there was an 
 actual decrease between 1900 and 1 910 in every important class except 
 horses and mules. In the case of live-stock, however, the change in 
 prices caused its total money value to be much greater in the latter 
 than in the former year, notwithstanding the reduction in the number 
 of animals. The statistics for the principal classes of this stock for 
 the last two census years are given in table 36.^ 
 
 Table 36. — Statistics of live-stock in the United States, igoo and iqio. 
 
 
 Number. 
 
 Value.1 
 
 1900 
 
 1910 
 
 1900 
 
 1910 
 
 All domestic Eininials. . . 
 
 
 63,682,000 
 27,618,000 
 59,473,000 
 52,838,000 
 
 $2,979,197,000 
 
 1,475,204,000 
 
 1,098,546,000 
 
 231,978,000 
 
 170,203,000 
 
 $4,760,060,000 
 
 1,499,523,000 
 
 2,622,180,000 
 
 399,338,000 
 
 232,841,000 
 
 Cattle 
 
 69,335,000 
 24,752,000 
 64,686,000 
 61,735,000 
 
 Horses, mules, asses, and burros 
 Swine 
 
 Sheep 
 
 
 'Value given only for domestic animals on farms. 
 
 The relative decrease in the output of agricultural products was 
 reflected in a falling-off of the exportation of foodstuffs. The wheat 
 crop of the United States in 1910 was larger than that of any previous 
 year but one (1902), but the exports of wheat and flour that year were 
 less than they had been for more than twenty-five years, except in 
 1905, when there was a great shortage in the crop. The exports of 
 wheat in 191 1 were even less than in 1910.^ The steady decrease in 
 the production of food products as compared with the amount of 
 domestic consumption has led some persons to asseit that not many 
 years will have passed before the United States becomes a grain- 
 importing instead of a grain-exporting country. However, the United 
 States has not yet neared the Hmit of its agricultural resources. Even 
 if there were not a very large area of untilled land available for future 
 cultivation, the possibilities lying in more scientific and more economi- 
 cal methods of cultivating the soil now in use, if taken advantage of, 
 
 ^Abstract, U. S. Census 1910, p. 265. ^Ibid., 311, 342. 
 
 'Statistical Abstract of United States, 1912, p. 591. 
 
Commercial Changes, Opening Years oj Twentieth Century. 315 
 
 will postpone for many decades the time when there will be no annual 
 suppHes of grain, live-stock, and provisions for exportation. 
 
 If the expansion in agricultural industries did not keep up with the 
 increase of population between 1900 and 1910, the relative loss was 
 made up for in a way by the amazing development that took place in 
 manufacturing. Twice since 1900 a census of manufactures has been 
 taken. On both occasions statistics were collected only for factory 
 industries, the neighborhood, hand, and building industries being dis- 
 regarded. Table 37 shows a record of the progress in manufacturing 
 from 1899 to 1909. All the statistics refer only to factory production.^ 
 
 Table Zl .—Factory manufactures in the United States, i8gQ, igo4, igoQ. 
 
 
 
 
 Per cent 
 
 
 Per cent 
 
 Per cent 
 
 
 
 
 of in- 
 
 
 of in- 
 
 of in- 
 
 
 1899 
 
 1904 
 
 crease 
 1899- 
 1904. 
 
 1909 
 
 crease 
 1904- 
 1909. 
 
 crease 
 1899- 
 1909. 
 
 Factories 
 
 207,514 
 8,975,256 
 
 216,180 
 12,675,581 
 
 4.2 
 41.2 
 
 268,491 
 18,428,270 
 
 24.2 
 45.4 
 
 29.4 
 105.3 
 
 Capital (thousands of dollars) . 
 
 Wage-earners (average num- 
 
 
 
 
 
 
 
 ber) 
 
 4,712,763 
 
 5,468,383 
 
 16.0 
 
 6,615,046 
 
 21.0 
 
 40.4 
 
 Wages (thousands of dollars) . 
 
 2,008,361 
 
 2,610,445 
 
 30.0 
 
 3,427,038 
 
 31.3 
 
 70.6 
 
 Value of products (thousands 
 
 
 
 
 
 
 
 
 11,406,927 
 
 14,793,903 
 
 29.7 
 
 20,672,052 
 
 39.7 
 
 81.2 
 
 
 The five leading manufacturing industries, according to the value of 
 their products, were the same in 1909 as in 1899, the only change being 
 a reversal of the order of the first two. In 1909 these industries were in 
 order: meat packing; foundry and machine-shop products; lumber and 
 timber products; iron and steel, steel works, and rolling mills; and 
 flour-mill and grist-mill products. The first three of these each had 
 an output of more than ^i,ooo,ooo,chx) and the other two each more 
 than ^880,000,000 for the year, and 38 other manufacturing industries 
 contributed products ranging invaluefrom^ioo,ooo,oooto$735,ooo,ooo. 
 Almost three-fourths of the total manufactures were produced in the 
 section of the country east of the Mississippi River and north of the 
 Ohio River and the southern boundary of Pennsylvania. New York, 
 Pennsylvania, Illinois, Massachusetts, and Ohio maintained their 
 places as the leading manufacturing States in the order named, the five 
 together producing more than one-half of the total manufactured 
 product. The city of New York again produced approximately one- 
 tenth of the total product, and Chicago and Philadelphia together 
 almost as much as New York. 
 
 The tremendous increase in manufacturing gave the United States 
 a large surplus of wares to dispose of abroad, and the opening years of 
 the twentieth century were signalized by a rapid expansion of the annual 
 
 '■Abstract, U. S. Census 1910, p. 439. 
 
3l6 History of Domestic and Foreign Commerce. 
 
 exports of manufactured goods. In 1899 manufactures ready for 
 consumption and manufactures for further use in manufacture made 
 up 30 per cent of the total exports of the United States and in 1912 they 
 comprised 47 per cent of the total. One of the important features 
 of the foreign policy of the United States during the greater part of the 
 intervening years was the "dollar diplomacy," the frankly avowed 
 purpose of which was to promote the foreign trade of the United States 
 by seeking markets for its products. Manufacturing interests espe- 
 cially were indebted to the State Department for its eflPorts to find 
 customers for the products of their rapidly expanding industries. 
 
 As would be expected from the remarkable increase of manufacturing, 
 the mining industries of the United States had a period of great activity 
 during the first part of the twentieth century. There was hardly a 
 single mineral product the output of which did not show a substantial 
 increase. The production of coal almost doubled between 1900 and 
 191 1, increasing from 240,000,000 to 443,000,000 long tons.^ The pro- 
 duction of iron ore in 1900 was 28,000,000 long tons, and in 1910 it was 
 57,000,000 long tons. The next year showed some reduction, the 
 total output being 41,000,000 tons.^ The output of copper showed an 
 increase from 270,000 long tons in 1900 to 490,000 long tons in 1911,^ 
 and the output of crude petroleum advanced during the same time 
 from 54,000,000 barrels to 220,000,000 barrels.^ The total value of the 
 products of the mines, quarries, and the wells of the United States in 
 1909 amounted to $1,175,475,000, an increase of 52 per cent over the 
 value of the output in 1902.* 
 
 The forests of the United States contributed an enormous supply of 
 timber during this period. The lumber production of the country, 
 which in 1900 was 35,000,000,000 feet, reached 45,000,000,000 feet in 
 1909. During the next two years there was a considerable decrease, the 
 production in 191 1 being 37,000,000,000 feet.^ The yellow-pine belt of 
 the South furnished a far larger portion of the timber cut during these 
 years than any other section. Washington, however, became the 
 leading lumber State near the close of the period. 
 
 DEVELOPMENT OF TRANSPORTATION AND INTERNAL TRADE. 
 Along with the agricultural and industrial expansion since 1900 there 
 has been constant development in the inland transportation system of 
 the United States. The mileage of the railroad net, though showing no 
 spectacular increases such as those witnessed during the great periods 
 of railroad building just after the Civil War and after the depression 
 caused by the panic of 1873, has nevertheless grown steadily, an 
 average of about 5,000 miles of line being added to the entire system 
 each year since 1900. The total number of miles of railroad line 
 
 ^statistical Abstract of United States, 1912, p. 773. ^Ibid., 774. Hbid., 247. 
 
 ^Abstract, U. S. Census 1910, p. 557. ^Statistical Abstract of United States, 1912, p. 191. 
 
MAP 5. 
 
 MAP OF THE RAILROADS IN THE UNITED STATES IN 1910. 
 
 (From Appleton's Cyclopedia of American Government, Vol. ili, with additions by authors.) 
 
Commercial Changes, Opening Years of Twentieth Century. 317 
 
 operated in the continental portion of the United States in 191 1 was 
 about 253,000. 
 
 A notable change in transportation since 1900 has been the growth 
 in the number of electric railways. Electrictractionwas first adopted for 
 city street-railways in 1888, and near the end of the nineteenth century 
 a beginning was made in the construction of electric railway lines for 
 service between comparatively distant points. Since 1900 the devel- 
 opment of interurban electric lines has been very rapid. In southern 
 New England all the principal cities are connected with one another 
 by electric railroads, and the total electric-railroad mileage, including 
 both interurban and city street-railway lines, in Massachusetts, Con- 
 necticut, and Rhode Island is now greater than the mileage of the 
 steam railroads. In Ohio, Indiana, Michigan, and Illinois the inter- 
 urban electric railway has also reached a high development, there being 
 a large network of lines spreading over the greater portion of these 
 States. In New York, Pennsylvania, New Jersey, and many other 
 States where there is a considerable number of urban communities 
 grouped comparatively close to one another the electric interurban 
 railway service is being steadily extended. The possibility of variation 
 of the units of service according to the amount of traffic and the greater 
 economy in construction and operation enables the electric railway 
 to give a service that is both more frequent and cheaper than the 
 service offered by steam roads. Though constructed mainly for the 
 purpose of handling passenger traffic, the electric railways have also 
 developed a freight service which is rapidly growing in volume. The 
 handling of parcels and light package freight in and out of large cities, 
 the transportation of farm products from rural districts to city markets, 
 and performing the function of branch lines or "feeders" to steam 
 roads have thus far comprised the most important part of the trolley 
 freight service; but as the electric systems extend their lines they are 
 entering the field as competitors with steam roads for all kinds of 
 freight business. The great convenience of the interurban lines has 
 had a strong influence on the development of communities where they 
 have been built. Travel has been encouraged, rural districts have been 
 brought into close touch with the cultural advantages to be found in 
 cities, and there has been a distinct increase in commercial intercourse 
 between city and country. 
 
 The great success that has attended the use of electricity as the 
 motive-power for land transportation has led to some question as to 
 whether the use of the steam locomotive might not eventually be 
 entirely abandoned. Though the question of general electrification is 
 not of pressing importance at the present time, it is not impossible that 
 at some time during the twentieth century, as the fuel resources of the 
 world become more scarce, it will be necessary to depend upon elec- 
 tricity generated by water-power to perform much of the work of 
 
3i8 History of Domestic and Foreign Commerce. 
 
 transportation now done by steam. Electricity has already been 
 adopted to some extent by steam roads for particular branches of their 
 service. In tunnels and subways and in terminal and suburban service 
 the smoke, gas, and noise of the steam-engine render it highly objec- 
 tionable, and in many cases it is being replaced by the electric loco- 
 motive. All traffic in the railroad tunnels under New York is hauled 
 by electric engines. The use of steam locomotives in the city of New 
 York and its suburbs has been practically ehminated, and the electri- 
 fication of railroad lines in Chicago, Philadelphia, and several other 
 large cities is either projected or already under way. The hauling of 
 both freight and passenger traffic over heavy mountain grades is 
 another kind of service for which the electric locomotive is well adapted 
 both because of its mechanical superiority over the steam locomotive 
 in this kind of work and because of the possibility of utiHzing the 
 water-power generally obtainable in mountainous districts. In addi- 
 tion to these special types of service some steam railways have elec- 
 trified sections of track in certain densely populated districts for the 
 purpose of giving more frequent local passenger service. The through 
 freight and passenger traffic in such sections is still hauled by steam 
 locomotives. 
 
 On the inland waterways of the United States, with the exception 
 of the Great Lakes, traffic continued after 1900 to show a steady 
 diminution in volume. There has arisen in recent years, however, a 
 steady and insistent demand for a rehabilitation of inland water 
 transportation in the United States, and numerous movements have 
 been started in favor of ambitious projects of canal construction and 
 river improvement. The people of New York in 1903 voted to expend 
 ^101,000,000 in building a new barge canal across their State to take 
 the place of the old Erie Canal. The new waterway is to be much 
 wider and deeper than its famous predecessor, and it is expected that 
 it will be used by a large tonnage of traffic. The National Govern- 
 ment is proceeding steadily with the canalization of the Ohio River, 
 and in the course of a few years that stream will have a minimum 
 depth of 9 feet all the year round from Pittsburgh to its mouth. The 
 Mississippi, the Columbia, and some other rivers are also being im- 
 proved. The two movements for waterway improvement that have 
 commanded most attention are those looking to the establishment of 
 a canal and river route of some kind from Lake Michigan to the Gulf 
 of Mexico and to the construction of a great chain of inland waterways 
 along the Atlantic coast to connect the numerous rivers and bays in 
 that section and give a completely sheltered waterway all the way 
 from New England to Florida. As was indicated before, the commerce 
 on the Great Lakes has continued to thrive. In 1910 the traffic on this 
 great waterway amounted to 85,000,000 short tons. 
 
 The general character of the internal commerce of the United States 
 during the opening decade of the twentieth century showed but little 
 
Commercial Changes, Opening Years of Twentieth Century. 319 
 
 change, the principal features of the geographical distribution of 
 industry prevailing at the close of the nineteenth century being in a 
 general way maintained. However, with the increased production of 
 wealth and the growth of population there has been a great expansion 
 in the volume of internal trade. The growth of the total freight traffic 
 received by railways from 1,082,000,000 tons in 1900 to 1,880,000,000 
 tons in 1910 is the best index of the growth of the internal movement 
 of commodities. An analysis of the railway traffic of 1910 and a de- 
 scription of the general character of the internal commerce of the United 
 States at the present time has already been given.^ 
 
 PUBLIC REGULATION OF TRANSPORTATION AND COMMERCE. 
 
 For the development of the public regulation of transportation and 
 commerce the twentieth century opened with a promise of progress, and 
 this promise, too, has been fulfilled. 
 
 In the regulation of railroads the United States has made great 
 advances since 1900. The first step taken, the Elkins act of 1903, 
 was due as much to the solicitation of the railroads as to that of their 
 patrons. 
 
 Before 1900, by means of numerous consolidations, combinations, and 
 formal or informal rate agreements, the railroad corporations had suc- 
 ceeded in almost entirely eliminating active competition, and they had 
 furthermore brought their mutual relations to such a degree of harmony 
 that they were able to begin concerted action to raise freight rates 
 everywhere throughout the country. Feeling it no longer necessary to 
 give rebates to large shippers for the purpose of securing competitive 
 traffic, and wishing to avoid as much as possible the chance of secret 
 violation of a mere voluntary compact to abolish giving rebates and 
 abstain from cutting rates, the railroad interests, aided by many ship- 
 pers who were desirous of securing an end of personal discrimination, 
 secured in 1903 the passage of the Elkins law, the most important 
 provisions of which were that it would be illegal for a railroad company 
 to charge any other than the published rate on traffic hauled, that the 
 recipient as well as the giver of rebates should be subject to punish- 
 ment, and that a railroad corporation as well as its agent could be 
 punished for violation of the law. Though of great advantage to 
 shippers, this law was of even greater benefit to the railroads. The 
 law of 1887 had failed to put a stop to rebating and the practice often 
 cost some railroads many millions of dollars a year. The Elkins act 
 prevented the danger of such large losses in the future. With the 
 volume of traffic constantly expanding, and with freight rates being 
 increased, the railroads entered on an era of great prosperity. 
 
 But though personal discriminations were checked by the Elkins 
 law, discriminations between places and commodities — discriminations 
 from which the public and not the railroad suflFered injury — ^were not 
 
 'Chap, xii, p. 200. 
 
320 History of Domestic and Foreign Commerce. 
 
 affected. The public decided that if personal discriminations could 
 be removed, other evils could be removed also. The Interstate Com- 
 merce Commission was given authority to fix reasonable maximum 
 rates on interstate traffic in 1906 by the passage of the Hepburn 
 amendment to the interstate commerce act of 1887. The act of 1906 
 also subjected express, sleeping-car, refrigerator-car, and pipe-fine 
 companies doing interstate business to the regulations of the interstate 
 commerce law, made stricter provisions as to granting passes, gave the 
 Commission control over joint rates, provided for expeditious judicial 
 action on appeals from the orders of the Commission, authorized the 
 Commission to prescribe a uniform accounting system for all carriers 
 subject to the interstate commerce act, and required carriers to make 
 such special statistical reports as the Commission might call for. This 
 law was a long step forward in railroad regulation and it marked a great 
 advance in the solution of the railroad problem. Yet another forward 
 step was taken in 1910 by the passage of the Mann-Elkins law, which 
 granted to the Interstate Commerce Commission the important power 
 to suspend proposed changes in rates on interstate trafiic pending an 
 examination into their reasonableness; it strengthened the "long and 
 short haul clause" of the original interstate commerce act by removing 
 the words that robbed it of its vitality; and it created a special Com- 
 merce Court to be the court of appeal from the orders of the Interstate 
 Commerce Commission. 
 
 There has now been established adequate machinery to prevent most 
 of the abuses in the railroad service. The Interstate Commerce Com- 
 mission, after existing for a score of years with but limited power, has 
 been transformed into a strong administrative body with functions of 
 great importance. It was thought that the creation of the Commerce 
 Court would greatly facilitate and expedite the details of railroad 
 regulation, but unfortunately the Commerce Court, though in theory a 
 thoroughly desirable addition to the judicial system, proved in practice, 
 as first organized, to be a disappointment. Several of its early deci- 
 sions, some of which have subsequently been reversed by the Supreme 
 Court, were given in favor of the railroads. Because of this and because 
 the new court assumed jurisdiction over some cases and matters which 
 the Supreme Court held the Commerce Court was without authority to 
 determine, the court became unpopular with the public. The impeach- 
 ment and removal from office of one of its judges because of improper 
 relations with certain railroad corporations served to accentuate the 
 sentiment against the court. In 191 3 it was abolished and the deci- 
 sions of the Interstate Commerce Commission again became appealable 
 to the other Federal courts. 
 
 One great problem of railroad regulation has been the conflict between 
 State and Federal authority. Many States have adopted compre- 
 hensive systems for the regulation of railroad rates and services in 
 
Commercial Changes, Opening Years of Twentieth Century. 321 
 
 regard to traffic wholly within their borders and in some cases the State 
 regulations have had a direct bearing on conditions of interstate trade, ' 
 which is subject to regulation solely by the Federal Government. 
 In some matters pertaining to the operation of railroads it has been 
 conceded that the Interstate Commerce Commission has the authority 
 to regulate conditions within individual States, but as regards the rate- 
 making power there was for a long time much conflict of opinion. In 
 the Minnesota rate case,^ decided in June 1913, the Supreme Court held 
 that the State governments possess the right to fix rates on intrastate 
 traffic as long as the rates established are not so low as to be confis- 
 catory, but at the same time the court stated that the power of Congress 
 to regulate interstate trade includes the power also to regulate that 
 part of intrastate trade the regulation of which affects in any way the 
 conduct of interstate business. Consequently the court,^ in June 1914, 
 sustained a decision of the Interstate Commerce Commission which 
 virtually annulled an order of the Texas Railroad Commission fixing 
 certain Texas rates at a point which brought about a discrimination 
 against jobbers shipping goods From Louisiana into Texas at rates which 
 in themselves were not unreasonable. 
 
 An important innovation in the transportation service of the country 
 has been made recently by the National Government, which amounts 
 to a regulation of a part of the transportation system and which at 
 the same time seems likely to have a great influence in promoting 
 commercial intercourse within the country. This was the inauguration 
 on January i, 1913, of a domestic parcel-post system. The useful- 
 ness of the parcel post has been demonstrated in nearly all European 
 countries, and the popularity it has attained in the United States 
 during the brief interval that has elapsed since its authorization indi- 
 cates that it is bringing about a large addition to the volume of 
 domestic trade. Not only is the new service efficient and, except for 
 long distances, somewhat* cheaper than that offered by the express 
 companies, but it also covers a much greater range of territory. 
 
 In the regulation of corporations other than transportation companies 
 and in the control of monopolistic combinations there has also been 
 considerable advance since 1900. In 1903 the Government took steps 
 to secure a fund of accurate information concerning the methods and 
 work of the great business organizations of the country, by authorizing 
 the establishment of a special Bureau of Corporations, the duty of 
 which was to make searching investigations into the organization and 
 management of any corporation engaged in commerce among the States. 
 The Bureau has made several reports on various industries that are 
 largely controlled by corporate combinations. A vigorous effort has 
 been made by the Department of Justice of the National Government 
 to enforce the provisions of the Sherman anti-trust law, and a number 
 
 •230 U. S. 352. *234 U. S. 342. 
 
322 History of Domestic and Foreign Commerce. 
 
 of prosecutions under this act have resulted in decrees by the Supreme 
 Court ordering the dissolution of several large industrial combinations 
 as well as of some consolidations of transportation companies. In 191 1 
 the Standard Oil Company and the American Tobacco Company, two 
 of the most notable of the greater combinations, were ordered to be 
 dissolved. Suits against the United States Steel Corporation, the Inter- 
 national Harvester Company, and several other combinations were 
 started in 1911, 1912, and 1913. The mere dissolution of large combina- 
 tions has failed to have much effect on the industrial situation, but the 
 information which the prosecutions have brought to light and the wide 
 pubHcity which the cases have given to the various aspects of the entire 
 problem of monopoly and combination have been effective agencies for 
 promoting a movement toward establishing a better system of regu- 
 lation. 
 
 The tariff system of the United States led once more to a poHtical 
 controversy. The growing dissatisfaction with the Dingley tariff act 
 led to an almost universal demand that it should be modified, and in 
 the presidential campaign of 1908 both the leading political parties 
 pledged themselves to tariff revision. The Republican party was suc- 
 cessful in the election, but the tariff law enacted by Congress in 1909 
 was not satisfactory to the public, and for this and other reasons 
 the elections of 1910 and 191 2 resulted in victories for the Demo- 
 cratic party. The pledge for tariff reduction was carried out in the 
 Underwood law, signed by the President October 3, 1913. Those who 
 brought about the enactment of this act advocated the "competitive 
 principle," the aim of the new tariff law being "to introduce in every 
 line of industry a competitive basis providing for a substantial amount 
 of importation, to the end that no concern shall be able to feel that it 
 has a monopoly of the home market gained other than through the fact 
 that it is able to furnish better goods at lower prices than others." 
 The average level of duties was reduced from 40.12 per cent to 29.6 per 
 cent, the greatest reduction being made in the schedules deahng with 
 various textiles, manufactures of metal, and agricultural products. 
 
 A reform of the currency system was accompHshed by the enact- 
 ment of the federal reserve act, which was introduced during the 
 special session of Congress called primarily for revising the tariff, 
 passed early in the regular session, and approved by the President 
 December 23, 1913. This measure is designed to correct the funda- 
 mental weaknesses in the present currency system of the United States. 
 By creating a system of regional reserve banks through which bank 
 reserve funds may be quickly mobilized in time of emergency, the law 
 is intended to overcome the decentralization which had characterized 
 the national banking system; and by providing for the issuance, when 
 necessary, of an asset bank-note currency, as well as for a greater free- 
 dom in the use of deposit credit, through the authorization of bank 
 
Commercial Changes, Opening Years of Twentieth Century. 323 
 
 acceptances and the extension of rediscount privileges, the law is 
 intended to give the currency the requisite degree of elasticity. 
 
 Another movement of great economic importance that has been 
 started in the early years of the twentieth century is the conservation 
 movement. Near the close of the nineteenth century the people of 
 the United States began to awake to the fact that the natural resources 
 of the country were disappearing at an alarming rate. The forests 
 were being depleted and no provisions made for their replacement, 
 many kinds of fish and game were nearing the point of extinction, some 
 mineral resources were being consumed at a rate that foretold nearing 
 exhaustion, and the agricultural soil was being wasted and its fertility 
 lessened. It was not the mere disappearance of these resources that 
 aroused the sentiment for conservation so much as the fact that their 
 destruction was being accompanied by the most needless waste and 
 extravagance. The results of the conservation movement have been 
 to check waste, to call a halt on the appropriation of valuable public 
 domain by private interests, and to create a widespread movement in 
 favor of a more economical utilization of the resources yet existing. 
 
 Considered in their entirety, the important events in the history of 
 the United States during the early years of the twentieth century seem 
 to indicate a new epoch in the economic and political history of the 
 nation. Material progress has continued, but it has been attended 
 with a greater measure of forethought, and the change in the attitude 
 of the people toward their problems indicates that progress in the 
 future will be directed with more wisdom. However, it is not only in 
 problems of purely domestic concern that the chief difficulties of the 
 future will be found. The growth of wealth and population and the 
 increased diversity of production have made the United States a lead- 
 ing factor in the industrial, commercial, and financial activities of the 
 entire world. In its position as a world power, which has come with 
 economic development and political expansion, the nation will meet 
 duties and responsibilities of a new kind. International relations, both 
 economic and political, will constitute a leading feature of the next 
 period of American history. 
 
PART THREE 
 
 THE COASTWISE TRADE 
 
 By T. W. van metre 
 
 32s 
 
CHAPTER XIX. 
 THE COASTWISE TRADE OF THE ATLANTIC COAST, 1 789-1 860.» 
 
 Legislation concerning coastwise vessels, 1789-1793, 328. Registry and enrollment 
 of vessels under law of 1792,330. Development of the coastwise trade to 1830,332. 
 Importance of cotton culture to the coastwise trade, 332. Nature of the trade of 
 the Soutli with the North, 333. Effects of the embargo and non-intercourse acts 
 and the War of 1812, 334. Adoption of the protective tariff policy, 335. Foreign 
 vessels excluded from the coastwise trade, 1817,336. Establishment of "great 
 districts," 1819, 336. Nature and volume of the coastwise trade in 1830, 338. 
 The coastwise trade at leading seaports, 339. The coastwise trade from 1830 
 to 1850, 341. Increase in tonnage of coastwise fleet, 342. Coastwise receipts 
 and shipments at New York, Philadelphia, Baltimore, and Boston, 1830 to 
 1850, 342. The coastwise trade at South Atlantic and Gulf Ports, 344. The 
 decade from 1850 to i860, 345. Competition of railroads with coastwise lines, 
 1850-1860, 345. Increase in coastwise trade, 1850-1860, 346. Growth in number 
 of steamship lines, 346. 
 
 The coastwise commerce of the United States has passed through a 
 series of interesting changes. Of relatively small value during most 
 of the colonial period, it gradually increased in volume as the popula- 
 tion of the country grew and industry became diversified, until it came 
 to be the most important branch of the commerce of the nation. Com- 
 pared to the foreign and the internal trade the coastwise business 
 attained the point of highest development during the decade preceding 
 the Civil War. Since the war, though increasing in volume, it has 
 suffered steadily from the competition of the railways and has failed to 
 keep pace in its rate of growth with either foreign or internal commerce. 
 
 No statistics of the value of either branch of domestic commerce are 
 available, but it is doubtful if, at the present time, the value of the 
 coastwise trade, exclusive of harbor and purely local traffic, is as great 
 as the value of the foreign commerce of the nation; and it is certain 
 that its value is far less than that of the tremendous internal trade 
 carried on by rail. In one respect the coastwise trade retains a posi- 
 tion of extreme significance. Being restricted to vessels built and 
 owned in the United States, it has for several years provided the 
 country with a merchant marine at a time when the tonnage of the 
 national shipping engaged in foreign trade has decHned to a compara- 
 tively small volume. It has made possible the existence of the ship- 
 building industry and has given the nation virtually its only "nursery 
 of seamen." It is as much because of these features as for its impor- 
 tance as a factor in commercial exchanges that the coastwise trade 
 retains a large degree of interest. 
 
 'In addition to the references indicated, the writer of these chapters on the coastwise trade has 
 consulted an unpublished history of the coastwise trade, written by Professor Thomas Con- 
 way, Jr., of the University of Pennsylvania. 
 
 327 
 
328 History of Domestic and Foreign Commerce. 
 
 An account of the development of the coastwise trade before 1789 
 is given in Chapter X. This chapter and the next will be devoted to 
 a discussion of the coastwise trade of the Atlantic seaboard since 1789, 
 and a third chapter will deal with the coastwise trade of the Pacific 
 coast and the intercoastal trade. 
 
 LEGISLATION CONCERNING COASTWISE VESSELS. 
 
 Bythe provisions of theConstitutionforbiddingthe individual States, 
 without the consent of Congress, to levy export, import, and tonnage 
 duties, the coastwise commerce of the United States was freed of the 
 burdensome restrictions imposed upon it during the critical years from 
 1783 to 1789; and by the clause granting to Congress the power to 
 regulate trade among the States and with foreign nations, the regu- 
 lation of the coastwise trade was in effect vested entirely in the Federal 
 Government. Acting under its authority to lay and collect taxes and 
 duties. Congress passed, in July 1789, the first measure affecting the 
 coastwise trade.^ By this law, designed primarily for the purpose of 
 raising revenue, all vessels built in the United States and owned by 
 the citizens thereof, or vessels not built in the United States but 
 belonging to the citizens thereof on May 29, 1789, and continuing in 
 their possession, were required upon entry at any port of the country 
 to pay a tonnage duty of 6 cents per ton; vessels built in the United 
 States after the passage of the law and owned wholly or in part by 
 foreigners paid a duty of 30 cents a ton; and all other vessels 50 cents 
 a ton. It was provided, however, that vessels built and owned in the 
 United States, while employed in the coastwise trade or fisheries, should 
 not be obliged to pay tonnage duties more than once a year. All 
 vessels not built and owned in the United States, when carrying 
 products of the United States coastwise, should pay a duty of 50 cents 
 a ton at each entry. The effect of this act was that, although foreign- 
 owned and foreign-built vessels had a legal right to participate in the 
 coastwise commerce of the United States, yet they were subjected to a 
 discriminating tonnage tax that was virtually prohibitory. 
 
 On July 31, 1789, an act was passed establishing districts and ports 
 for the collection of import and tonnage duties.^ Massachusetts was 
 divided into 20 districts, Virginia into 12, Maryland into 9, Georgia 
 into 4, Connecticut, New Jersey, and South Carolina each into 3, New 
 York into 2, and New Hampshire, Pennsylvania, and Delaware each 
 constituted a single district. In each district certain regular ports of 
 entry and dehvery were designated. The entrance of North Carolina 
 and Rhode Island into the Union made necessary the creation of 
 additional customs districts in 1790, the former State being divided into 
 5 and the latter into 2; and at the same time the number of districts 
 in New Jersey was increased from 3 to 4. In 1799 another readjust- 
 
 ^U. S. Statutes at Large, I, 27. -Ibid., 29. 
 
The Coastwise Trade of the Atlantic Coast, lySg-iSdo. 329 
 
 ment was made, the number of districts in Massachusetts and New 
 Jersey each being increased by 2, the number in Pennsylvania, Mary- 
 land, Connecticut, and Georgia by i, and the number in Virginia being 
 reduced from 1 2 to 1 1 . 
 
 The "Act for registering and clearing vessels, regulating the coast- 
 wise trade, and for other purposes," passed September 1789, was the 
 first important law of the new government dealing with the regulation 
 of navigation and commerce.^ The first part of this law contained rules 
 concerning the registering of vessels, and the second part dealt with the 
 unregistered vessels which might be employed in the coastwise trade or 
 fisheries. The act stipulated that every unregistered vessel of a burden 
 of 20 tons and upward built and owned in the United States, or not 
 built in the United States but on May 16, 1789, wholly owned and 
 continuing thereafter to be owned by a citizen or citizens of the United 
 States, in order to secure the privileges of ships or vessels belonging 
 to the United States, should be "enrolled" with the collector of the 
 customs of the district in which the owner or one of the owners of the 
 vessel resided. The masters or owners of such enrolled vessels, as well 
 as the owners of registered vessels, were entitled to receive a yearly 
 license to trade between the different customs districts. Before the 
 license could be secured, it was necessary that the tonnage duty on the 
 vessel be paid and that a bond of $1,000 be given that the vessel would 
 not be employed in any iUicit trade during the time for which the license 
 was granted. All vessels of 20 tons or more, not provided with a certifi- 
 cate of registry or enrollment, and a license, which were found trading 
 between diflPerent districts, were to be subject to the same tonnage 
 duties as foreign vessels. The master of a vessel of less than 20 tons 
 and not less than 5 tons burden employed in trade between different 
 customs districts was required to secure a trading license from the 
 collector of the district to which the vessel belonged and to give bond 
 for the sum of $200 that the vessel should not be employed in illicit 
 trade. The license for such vessels exempted them from entering or 
 clearing for a period of one year. 
 
 The master of a vessel of 20 tons or more, licensed to engage in the 
 coastwise trade and carrying a cargo of foreign goods of more than $200 
 value, or rum or other ardent spirits exceeding 400 gallons, was 
 obHged, when proceeding from one district to another, to give to the 
 collector duplicate manifests of the entire cargo of the vessel, one of 
 which manifests was to be certified to by the collector and returned 
 to the master of the vessel, together with a permit authorizing the 
 vessel to proceed to its destination. Masters of licensed vessels bound 
 from one district to another within the same State or from a district 
 in one State to another in an adjoining State, having on board only 
 products of the United States, rum and other ardent spirits exceeding 
 
 't/. 5. statutes at Large, I, 55. 
 
330 History of Domestic and Foreign Commerce. 
 
 400 gallons excepted, were not required to file manifests or to obtain a 
 permit to sail. When licensed vessels of more than 20 tons were bound 
 from one district to a district in any other State than the same or an 
 adjoining State, the masters were required to file manifests of their 
 entire cargoes and secure permits to sail, in the same manner as if they 
 had cargoes of foreign commodities. 
 
 In 1790 the law relating to tonnage duties was revised. The scale 
 of duties fixed the previous year was retained with respect to vessels 
 entering from any foreign port or place. A duty of 6 cents per ton 
 was to be paid on vessels of the United States entered in a district in 
 one State from a district in another State, "other than in an adjoining 
 State on the sea coast, or on a navigable river, having on board goods, 
 wares and merchandise taken in one State to be delivered in another,"^ 
 but it was not to be paid more than once a year on vessels regularly 
 licensed to engage in the coastwise trade. Upon foreign vessels entered 
 in any district for the purpose of delivering goods consigned from 
 another district a duty of 50 cents a ton was to be paid at each entry. 
 
 A brief experience with the act of 1789 concerning the registry and 
 enrollment of vessels showed that the law was not sufficiently explicit 
 in all its details and that a complete revision was necessary. Accord- 
 ingly on December 31, 1792, a detailed statute^ was enacted dealing 
 with the registering and recording of vessels, and a few weeks later 
 (February 18, 1793)^ a law was enacted providing for a more compre- 
 hensive regulation of the coastwise trade. By the latter act only 
 enrolled vessels possessing a license to engage in the coastwise trade, 
 and vessels of less than 20 tons not enrolled, but licensed, were to be 
 deemed vessels of the United States entitled to the privileges of vessels 
 employed in the coastwise trade. Until June i, 1793, vessels were to 
 be enrolled in accordance with the terms of the law of September i, 
 1789, but thereafter the qualifications for the enrollment of a vessel 
 should be the same as for registry — ^that is, only those vessels could be 
 enrolled which were built and owned in the United States; which were 
 not built in the United States but were owned by a citizen or citizens 
 thereof on May 16, 1789, and continued to be so owned thereafter; 
 or which were condemned as prizes or forfeited for breach of the law 
 and belonged wholly to a citizen or citizens of theUnited States. Regis- 
 tered vessels were permitted to engage in the coastwise trade, but they 
 received a regular license only when their registers were exchanged 
 for certificates of enrollment. Collectors of the customs were author- 
 ized to register any enrolled vessel upon the enrollment and license 
 being surrendered. No license for carrying on the coastwise trade was 
 to remain in force after the vessel to which it was granted was sold, 
 altered, or transferred to some other employment. Unregistered 
 vessels, not possessing a license, which might be found engaged in the 
 
 •J7. S. Statutes at Large, I, 135. 'Ibid., 287. 'Ibid., 305. 
 
The Coastwise Trade of the Atlantic Coast, iy8Q-i86o. 331 
 
 coastwise trade, if laden only with goods produced in the United 
 States (distilled spirits excepted), were to be subjected to the same 
 tonnage duties as foreign vessels; if they had on board goods of foreign 
 production or distilled spirits, other than sea-stores, they were to be 
 forfeited. Furthermore, it was provided that, if any enrolled or licensed 
 vessel should proceed on a foreign voyage without its enrollment being 
 exchanged for a register, it should be liable to seizure and forfeiture. 
 The owner and the master of a licensed vessel were required to give 
 bond, varying in amount from $100 to $1,000, according to the size 
 of the vessel, that the vessel would be employed in no trade whereby the 
 revenue of the United States might be defrauded. The master was 
 compelled to take oath that he was a citizen of the United States and 
 that the license received should be used for no other vessel and for 
 no other employment than that for which it was specially granted. 
 
 The regulations in regard to the entrance and clearance of vessels 
 engaged in the coastwise trade were similar to those contained in the 
 law of 1789. If a vessel, licensed to carry on coasting trade, bound 
 from a district in one State to a district in the same or adjoining State 
 on the seacoast or on a navigable river, had on board "either distilled 
 spirits in casks exceeding 500 gallons, wine in casks exceeding 250 
 gallons, or in bottles exceeding 100 dozen, sugar in casks or boxes 
 exceeding 3,000 pounds, tea in chests or boxes exceeding 1,000 pounds, 
 or foreign merchandise in packages, as imported, exceeding in value 
 $400, or goods, wares, or merchandise consisting of such enumerated or 
 other articles of foreign growth or manufacture, or of both, whose 
 aggregate value exceeds $800," the master was required to file with the 
 customs collector duplicate manifests of the whole of "such cargo," 
 and take oath that to the best of his knowledge the foreign goods were 
 legally imported and the duties paid or secured, and that the excise 
 duties on domestic spirits had been paid or secured. The collector 
 certified one of the manifests and issued a permit for the vessel to 
 proceed. On arrival at his destination the master was required, before 
 unloading, to deliver the certified manifest and secure a permit to 
 unload a part or the whole of the cargo, as desired. If a licensed vessel 
 bound from a district in one State to a district in the same or an adjoin- 
 ing State did not have on board a cargo as above described, the master 
 was not obliged to secure a permit to depart or to make any report of 
 his arrival, though he was required to make out a manifest of his cargo, 
 and exhibit it, upon demand, to the proper authorities. 
 
 If a vessel licensed to carry on the coastwise trade was bound from any 
 district to a district other than one in the same or an adjoining State on 
 the seacoast or on a navigable river, the master was required to give the 
 collector at the port of departure duplicate manifests of his entire cargo; 
 and if there were any distilled spirits or foreign wares on board, to 
 specify in the manifests the marks, numbers, etc., of every package 
 
332 History of Domestic and Foreign Commerce. 
 
 containing the same, together with the names and addresses of shippers 
 and consignees. When such manifests were filed, the processes of 
 clearing and entering were the same as described above for vessels 
 bound to a neighboring district with a cargo for which it was necessary 
 to file manifests. Registered vessels in proceeding from district to 
 district were subjected to the same requirements as were enrolled and 
 licensed vessels. 
 
 The provisions of the act of 1793 concerning the enrollment and 
 licensing of vessels engaged in the coastwise trade are still in force. 
 Some modifications have been made in the law with respect to the 
 entering and clearing of vessels, but on the whole there has been but 
 little change. An unfortunate feature of the act, which has always 
 persisted, is that it made no provision for collecting information in 
 regard to the volume and value of the coastwise commerce of the 
 country. The manifests required of the masters of vessels contain 
 specific information concerning shipments of foreign merchandise or 
 domestic spirits only, and it is not necessary that the quaHty or value of 
 these shipments be noted. Under these conditions government officials 
 have never been able to secure information concerning the character 
 or value of the coastwise trafl&c. It has been possible at some large 
 ports to collect statistics of trade in such commodities as lumber, 
 coal, and cotton, which are shipped in cargo quantities, but for move- 
 ments of highly diversified merchandise trafiic, such as that between 
 New England and New York, it has been impossible to secure a satis- 
 factory statistical record. 
 
 DEVELOPMENT OF THE COASTWISE TRADE TO 1830. 
 
 Stimulated by the general revival of prosperity and aided by the 
 elimination of the restrictions placed on interstate commerce by adverse 
 State legislation, the coastwise trade of the United States, during the 
 early years of the new government, had a period of vigorous expansion. 
 Foreign commerce became active once more, and the coastwise shipping 
 found employment in the distribution of imported wares and in the 
 collection at the large seaports of the commodities to be exported 
 abroad, while the interchanges of domestic products gradually increased 
 in volume. In 1793, the first year in which the Treasury secured 
 accounts of the tonnage of the merchant marine, the enrolled and 
 licensed vessels of the country had a total tonnage of 122,071, and by 
 1800 the tonnage had increased to 272,492. 
 
 The beginning of the cotton industry in the United States — the 
 spread of cotton culture in the South and the rise of cotton manu- 
 facturing in New England — ^was an event of signal importance in the 
 history of the coastwise trade. In a former chapter it has been ex- 
 plained how, during the colonial period, the coasting trade held a low 
 rank as compared with other branches of American commerce, because 
 
The Coastwise Trade of the Atlantic Coast, 178Q-1860. 333 
 
 few commodities produced in one section of the country were consumed 
 in large quantities in any other section. There was a certain degree 
 of diversification of industry throughout the colonies, but there was no 
 great intersectional demand for the leading products of the various 
 groups of colonies. 
 
 With the establishment of the cotton industry this situation was 
 changed and an intersectional trade began to develop which was to 
 reach enormous proportions. Cotton was to become the pivot about 
 which the major portion of the commerce of the United States, both 
 foreign and domestic, was to revolve for a half century. The influence of 
 cotton-culture on foreign and internal trade has been discussed in former 
 chapters. Its effect on the coastwise trade was even more significant. 
 
 In both the foreign and the internal commerce of the South before the 
 Civil War the movement of commodities was largely one-sided; a large 
 volume of exports flowed out to foreign markets, but a comparatively 
 small volume of foreign imports came directly into southern ports; 
 immense quantities of foodstuflFs and other domestic products came 
 down the Mississippi River to be sold to the southern planters, but the 
 movement northward on the river was relatively small. In the coast- 
 wise trade there was a heavy movement in both directions. Mer- 
 chandise and manufactured goods of both foreign and domestic pro- 
 ductions were carried coastwise from northern to southern cities, 
 and there were large returning cargoes of southern cotton and tobacco, 
 the shipments of the former constantly increasing in volume as manu- 
 facturing grew throughout the North. Furthermore, the volume of 
 traffic northward was swelled by the shipments of food products from 
 the Mississippi Valley, which were collected at New Orleans and sent 
 to many points along the Atlantic coast. Until the trunk-line railroads 
 were built to connect the seaboard cities along the Atlantic coast with 
 the region west of the Appalachian Highland, a large part of the surplus 
 farm produce of the central portion of the country found its way to 
 consumers in the Eastern States by way of New Orleans. The treaty 
 with Spain in 1795, by which the Mississippi River was opened and the 
 "right of deposit" secured at New Orleans, and the purchase of Louis- 
 iana from Napoleon in 1803, were events of great importance in the 
 development of the coastwise commerce. 
 
 Though conditions within the United States were highly favorable 
 to the extensive growth of domestic trade during the first quarter of a 
 century of the national period, the situation created by the European 
 wars, which began in 1793, caused so great a diversion of activity to 
 foreign commerce that the expansion of the coastwise trade was less 
 than it probably would have been, had peace prevailed in Europe. A 
 large portion of the capital of the country was invested in shipping 
 employed in the foreign trade, and for a time the merchant vessels of 
 the United States were the carriers for the entire world. 
 
334 
 
 History of Domestic and Foreign Commerce. 
 
 The following statement of the growth of the tonnage of vessels of 
 the United States employed in the foreign commerce and in the coast- 
 wise trade shows the great relative importance of the foreign trade. 
 Though the growth of the tonnage of enrolled and licensed vessels 
 was not so great as that of registered vessels, nevertheless the increase 
 was steady and uninterrupted. During the brief period of peace in 
 Europe from 1801 to 1803 registered shipping declined almost ioo,cX)0 
 tons, but the coasting fleet during the same period increased at a normal 
 
 rate. 
 
 Table 38. — Tonnage of vessels of United States in foreign and coastwise trade, 1793-1810. 
 
 Year. 
 
 Foreign trade 
 tonnage. 
 
 Coastwise trade 
 tonnage. 
 
 1793 
 1795 
 1800 
 1805 
 1810 
 
 367,734 
 529,471 
 667,107 
 744,224 
 981,019 
 
 122,071 
 184,398 
 272,492 
 332,663 
 405,347 
 
 The embargo and non-intercourse acts and other measures by which 
 the United States endeavored to compel Great Britain and France to 
 show a greater degree of respect for the rights of neutral commerce not 
 only put an end to the prosperity of the foreign trade, but also crippled 
 the coastwise trade of the United States. The most important portion 
 of the coastwise commerce still consisted of the distribution of imports 
 and the collection of commodities for export, and when foreign com- 
 merce was cut ofi^, the coastwise trade was made to suffer. However, 
 the burden was not so heavy upon the coasting business as upon the 
 foreign trade. Domestic trade in products of the United States was not 
 interdicted, and the volume of exchange in trade of this character was 
 necessarily madelarger by the prohibition of commerce with other nations. 
 
 The termination of commerce with Great Britain encouraged the 
 development of manufactures in the United States, and a thriving 
 trade arose in the products of the new manufacturing industries and in 
 raw materials. Cotton manufacturing in particular had a notable 
 development, and the trade between the North and South expanded 
 rapidly. Gallatin, in his Report on Manufactures in 18 10, stated that 
 at the end of the year 1809 he had received reports from 87 cotton mills, 
 62 of which were in operation, working 31,000 spindles. This probably 
 represented a sixfold increase of cotton manufacturing in the space of 
 four years. In 181 1 it was estimated that the investments in cotton 
 mills in the United States amounted to ^4,800,000 and that these 
 mills consumed 3,600,000 pounds of cotton, worth $720,000. 
 
 The growth of manufacturing stimulated both the local and the long- 
 distance coastwise business along the entire Atlantic seaboard. Besides 
 profiting from the expansion of purely domestic business, a portion of the 
 coasting fleet found remunerative employment by circumventing the 
 
The Coastwise Trade of the Atlantic Coast, 178Q-1860. 335 
 
 laws restricting foreign trade. Many vessels engaged ostensibly in the 
 coastwise trade sailed to Nova Scotia, Florida, or the West Indies, 
 where their cargoes were sold or transferred to foreign vessels and 
 carried to Europe. Several laws were enacted for the purpose of 
 putting an end to this illicit commerce, but it was impossible to stop 
 it completely. 
 
 The War of 1812 virtually put an end to all commerce of the United 
 States carried on by sea. Shortly after the war started, the British 
 Government declared a blockade of the entire coast of the United States 
 with the exception of Massachusetts. An embargo laid by Congress 
 in December 1813 closed the ports of the whole country to trade, and 
 in April 1814 the British blockade was extended to include every port 
 of the United States from New England to Louisiana. British war 
 vessels waited along the coast ready to seize any vessel attempting to 
 carry on commerce with blockaded ports. Occasionally the rigor 
 of the blockade was relaxed, and a small local coastwise trade became 
 possible, but most of the time the risk of capture was too great for any 
 vessel flying the flag of the United States to put to sea. Deprived of 
 maritime commerce, the people of the United States attempted to 
 carry on by land a part of the trade which formerly had been borne by 
 the coastwise fleet, the enormous prices which many articles commanded 
 making possible a wagon trade between points as widely separated as 
 Savannah and Boston. Flour, for example, which sold at Richmond 
 for $4.50 per barrel, brought $11.87 ^^ Boston; the price of rice in 
 Charleston and Savannah was $3 per hundredweight and in Boston $8; 
 upland cotton, which could be bought for 9 cents a pound in Savannah, 
 sold in Boston for 20 cents .^ The wagon trade, however, was insig- 
 nificant in volume compared to coastwise commerce carried on in times 
 of peace, and it was with a feeling of great joy that the people witnessed 
 the end of the war and the return of trade to its normal channels. 
 
 The greatest lesson which the war taught the people of the United 
 States was the necessity for taking steps to render the nation more 
 nearly self-sufficient. The encouragement of manufacturing industries 
 which could consume raw materials of domestic production and supply 
 at least a portion of the commodities for which it had been customary 
 to rely entirely upon foreign producers, the construction of roads and 
 canals by which internal communication could be carried on, and the 
 building of a navy large enough, at least, to protect the coasting trade — 
 these projects in particular appealed to political leaders as wise meas- 
 ures to be taken for the defense of the people, in case a conflict with a 
 foreign power should again occur. For the first time the people saw the 
 importance of having a greater diversification of industry in the coun- 
 try, and for the first time a definite policy was adopted looking to the 
 
 ^Niles' Register, V, 41; see McMaster, History of the People of the United States, IV, 218, for 
 a very interesting account of the wagon trade during the war of 1812. 
 
336 History of Domestic and Foreign Commerce. 
 
 development of domestic commerce and the creation of a home market 
 for domestic products. So strong was the feeling of need for economic 
 self-sufficiency as a means of national defense, that all sections of the 
 country united in supporting measures whereby the desired improve- 
 ment could be reahzed. Even Calhoun lent his support to the tariff 
 law of 1 8 16 as the only practicable means of preventing the wealth and 
 vigor of the nation from becoming impaired during a time of war. 
 
 Next to the inauguration of the protective tariff policy, the passage 
 of the navigation act of 1817 was the most important part of the new 
 program of economic legislation.^ Two sections of this act dealt with 
 the coastwise trade: One, which still remains in force, provided "that 
 no goods, wares, or merchandise shall be imported under penalty of 
 forfeiture thereof, from one port in the United States to another port 
 in the United States, in a vessel belonging wholly or in part to a subject 
 of any foreign power;" the other stipulated that the tonnage duty on 
 vessels licensed for the coasting trade should be 6 cents a ton, only if 
 the master and three-fourths of the crew should be proved to be citi- 
 zens of the United States; otherwise the duty should be 50 cents per 
 ton. By this law foreign vessels were entirely excluded from the coast- 
 wise trade, and the building up of a merchant marine owned by domes- 
 tic capital and manned by citizens was insured. 
 
 The abnormal conditions of the foreign trade immediately following 
 the conclusion of peace imparted a great stimulus to the coasting 
 trade. A large part of the tremendous volume of manufactured goods 
 and merchandise which poured into the leading ports of the United 
 States in 18 15 and 18 16 was loaded on coasting vessels and distributed 
 along the entire seaboard. From Portland to New Orleans the country 
 was flooded with all classes of foreign goods imported chiefly into New 
 York, Boston, Philadelphia, and Baltimore. The infant manufac- 
 turing industries were soon stifled, and trade in domestic products 
 languished, but the loss was more than compensated for by the activity 
 in the distribution of imported wares. The industrial and com- 
 mercial depression which came in the wake of the period of extravagant 
 overtrading brought distress to the coastwise commerce, though the 
 depression does not appear to have been so severe as in most of the 
 other branches of trade and industry. From 1818 until 1825 there were 
 only two years in which there was not an increase in the tonnage of the 
 coastwise fleet, and the total increase for the five years amounted to 
 90,000 tons. 
 
 An event of importance to the coastwise commerce was the enact- 
 ment of the law of 1819 establishing the "great districts." By this 
 law all customs districts, so far as concerned vessels of more than 20 
 tons which were regularly licensed to engage in the coastwise trade, 
 were abolished, and in their place the seacoast and navigable rivers 
 
 ^U. S. Statutes at Large, III, 351. 
 
The Coastwise Trade of the Atlantic Coast, 178Q-1860. 337 
 
 of the United States were divided into "two great districts, the first 
 to include all the districts on the seacoast and navigable rivers between 
 the eastern limits of the United States and the southern limits of 
 Georgia, and the second to include all the districts on the seacoast and 
 navigable rivers between tlje river Perdido and the western limits of the 
 United States." After the passage of this act regularly licensed vessels 
 of more than 20 tons burden proceeding from a collection district to 
 another in the same great district, or from a State in one great district 
 to an adjoining State in another great district, were subject to the 
 regulations imposed by the law of February 18, 1793, or vessels trading 
 from one district to another in the same or in an adjoining State, and 
 if proceeding from one great district to another, except when the ports 
 of departure and destination were in adjoining States, were subject to 
 the rules imposed in 1793 on vessels trading from a district in a State 
 to a district not in the same or an adjoining State. The regulations 
 with respect to licensed vessels of less than 20 tons were not changed. 
 In 1822 the newly acquired territory of Florida was designated as a 
 third "great district." 
 
 These laws gave a much greater degree of freedom to the coastwise 
 trade. Any enrolled vessel could go from Maine to Georgia without 
 any report of its departure or arrival being made, provided its cargo 
 did not include the commodities listed in the act of 1793. No change 
 was made as to the nature of the manifests required of the masters of 
 vessels, and the difficulty of securing statistical information concerning 
 the coastwise trade became greater than ever. 
 
 During the time of recovery from the severe depression of 1818-19, 
 
 the people of the United States began to give more consideration to 
 
 problems of purely domestic concern. Before the War of 181 2 the most 
 
 important political questions confronting the nation were problems 
 
 growing out of foreign relations, and the chief economic interest seemed 
 
 to be the development of the foreign trade. The time had now come 
 
 for the people to realize that their paramount economic and political 
 
 problems were internal and not external; that their absorbing interests 
 
 were at home and not abroad. The decade from 1820 to 1830 was 
 
 singularly full of occurrences which indicated that the nation had at 
 
 last come to realize the new state of affairs. Possibly no other single 
 
 decade of the history of the country has contained as many events so 
 
 full of economic significance. The enunciation of the Monroe Doctrine 
 
 indicated a definite separation from political entanglements with the 
 
 Old World; the Missouri Compromise marked the opening of a struggle 
 
 that was to shape political history for half a century; the tariff laws of 
 
 1824 and 1828, the completion of the Erie Canal, and the introduction 
 
 of the steam locomotive evidenced the beginning of a determined effort 
 
 to develop the resources and industries of the country in such a way 
 
 that it would achieve economic as well as political independence. 
 
338 History of Domestic and Foreign Commerce. 
 
 NATURE AND VOLUME OF THE COASTWISE TRADE IN 1830. 
 
 With the adoption of the "American system," population increased, 
 manufacturing and agriculture developed, and domestic commerce 
 began to expand with surprising vigor. Of the two branches of 
 domestic trade, the coastwise and the internal, the former was until 
 after the Civil War the more important. The sea offered the best 
 means of communication between the most populous parts of the 
 country, and the value of the traffic carried coastwise was greater 
 than the value of the traffic transported on the railroads, rivers, lakes, 
 and canals. One of the most significant features of the coastwise trade 
 during this period was, that in 183 1 the tonnage of enrolled and licensed 
 vessels employed in the coasting trade for the first time exceeded the 
 tonnage of registered vessels employed in the foreign ttade.^ In 1810 
 the tonnage of the latter was more than twice that of the former. The 
 development of the coastwise trade for a score of years sufficed to give 
 its fleet a position equal to that of the shipping engaged in foreign 
 trade. In only two years since that time, 1856 and 1857, has the 
 tonnage of the coasting fleet been smaller than that of the foreign-trade 
 shipping of the country. Of the exports and imports of the United 
 States in 1831 the percentage carried by shipping belonging to the 
 country was 86.5. Making allowance for the greater number of trips 
 that could be made by the coasting vessels, it may be safely estimated 
 that the value of the coastwise commerce was much greater than that 
 of the foreign trade, which amounted at that time to $185,000,000. 
 
 What the general character of the coastwise trade was in 1830 has 
 been indicated before. By this time cotton had become the great 
 product of the South, and from both the South Atlantic States and 
 the Gulf States this commodity was shipped in large quantities to the 
 North Atlantic ports, some of it to be distributed among the cotton 
 manufacturers of the North and some to be exported abroad. Rice, 
 tobacco, and naval stores from the South Atlantic States and sugar and 
 molasses from Louisiana were shipped to northern markets, and large 
 quantities of the produce of the Mississippi Valley — tobacco, whisky, 
 hams, bacon, pickled pork and beef, lard, cheese, butter, flour, corn, 
 and wheat — were transported from New Orleans to all the States 
 along the Atlantic seaboard. From the Northern to the Southern 
 States were shipped manufactured goods and merchandise of all kinds 
 of both foreign and domestic production — dry goods, wearing apparel, 
 
 The statistics in the annual Report of the U. S. Commissioner of Navigation show that the 
 tonnage employed in the coasting trade first exceeded that employed in the foreign trade in 1821. 
 However, the excess of the former in that year was not real. In 1818 a reduction of over 200,000 
 tons was made in the registered tonnage by striking off all vessels the registration of which had 
 been granted before 1815, which were supposed to have been condemned, lost at sea, or captured. 
 No correction was made at that time in the enrolled and licensed tonnage, and as a result the 
 statistics were incorrect until 1829, when a correction was made in the tonnage of all classes of 
 vessels. The result was a shrinkage of over 300,000 tons in the tonnage of the coasting fleet, 
 which brought its total to a smaller amount than the tonnage of the registered vessels engaged in 
 foreign trade. It is extremely probable that if both lists had been corrected in 1818, the statistics 
 would have shown the tonnage of the registered shipping to have been greater than that of the 
 coasting fleet each year until 1831. 
 
The Coastwise Trade of the Atlantic Coast, iy8g-i86o. 339 
 
 tools, cotton gins, foodstuffs, household goods, and building material. 
 In addition to this large intersectional trade there was still larger local 
 trade. Each large port on the Gulf and Atlantic coasts was a center 
 for the collection of articles to be shipped away and for the distribu- 
 tion of wares coming in, and each locality had commodities to exchange 
 for the products of neighboring localities. Bulky products, such as 
 lumber and coal, were becoming factors in the coastwise trade, though 
 the range of markets was not as extensive as in later years. 
 
 In the commerce of all the leading seaports the coastwise trade was an 
 important factor. New York, with matchless shipping advantages, 
 a direct water route to the West, and superior facilities for financing 
 the movements of both foreign and domestic trade, had already 
 become the commercial and financial capital of the nation. Cheaper 
 freight rates on import traffic enabled the merchants of New York to 
 handleforeign goods forthe entire country, and alargepartof the exports 
 of other sections were shipped from the harbor of this prosperous city. 
 Every port along the Atlantic and Gulf coasts traded with New York, 
 sending commodities thither to be sold to near and distant consumers, 
 and securing a large variety of imported and domestic goods. Great 
 quantities of cotton came from the Southern States to be sold to the 
 spinners of New England, New York, and Pennsylvania, or to be 
 exported to Europe; a large part of the farm produce pouring in by way 
 of the Erie Canal was shipped coastwise to New England and to the 
 Cotton States, and the manufactured wares of all the Northern States 
 were collected at the wharves of Manhattan Island and reshipped to 
 dozens of domestic markets from Maine to Louisiana. By 1825 the 
 receipts of cotton at New York amounted to over 150,000 bales a 
 year.^ The arrivals of coasting vessels atthe city in that year numbered 
 4,000 as compared to 1,400 arrivals from foreign ports.^ In 1828 it 
 was estimated that the clearances from New York to points on Dela- 
 ware Bay alone amounted to 16,508 tons, and the clearances to points 
 on Chesapeake Bay to 51,000 tons.^ 
 
 Philadelphia was in 1830 the leading manufacturing city of the 
 country, with a foreign trade second only to that of New York. The 
 merchants of this city, too, had built up a trade with all the important 
 seaports on the Altantic and Gulf coasts, shipping out a wide variety 
 of manufactured goods, meat, grain, flour, and some imported goods, 
 and receiving cotton, sugar, molasses, rice, fish, and textiles. It was 
 just at this time that the anthracite-coal trade of Philadelphia was 
 assuming a position of importance in the commerce of the city. The 
 Lehigh and the Schuylkill Rivers had been improved, and thousands of 
 tons of coal were being carried to Philadelphia to be used in iron fur- 
 naces and to be shipped coastwise to New York, New England, and 
 occasionally to southern ports. From 1822 to 1830 the coastwise 
 
 ^NiUs' Register, XXIX, 1825-26, p. 101. ^Ibid., XXXIV, 1828, p. 28S. 
 
 Hbid., XXXV, 1828-29, p. 330. 
 
340 History of Domestic and Foreign Commerce. 
 
 shipments of coal grew from 200 tons to 63,000 tons.^ An interesting 
 feature connected with the coal trade was the beginning of the coastwise 
 ice trade from Maine to Philadelphia about 1828. Vessels taking coal 
 to New England returned with cargoes of ice, thus securing a return 
 freight. The ice traffic increased rapidly, though there are no statistics 
 indicating its exact extent.^ 
 
 The coastwise trade of Baltimore was also extensive. Numerous 
 cotton-mills were in operation in the city, as well as rolling-mills and 
 flour-mills, all of which contributed a large volume of products to be 
 distributed to neighboring States. Baltimore was also the center of 
 a large tobacco trade, though the outbound shipments coastwise were 
 small as compared to the foreign exports. 
 
 The greater part of the coasting trade of New England centered at 
 Boston. Probably more than one-half of the cotton consumed in the 
 United States was shipped to Boston for distribution among the New 
 England spinners, and in addition to this product the city received hemp, 
 sugar, molasses, tobacco, and naval stores from the South; grain, flour, pro- 
 visions, and imported goods from New York; agricultural products and 
 coal from Philadelphia; and lumber from Maine. In return, Boston 
 exported coastwise large quantities of manufactured cotton and woolen 
 goods, shoes, furniture, fish, and rum. The growing manufacturing city of 
 Providence purchased large quantities of cotton, foodstufi^s, and lumber, 
 and sold manufactures of various kinds. Virtually every port of New Eng- 
 land possessed a fishing industry, which was the basis of a local coastwise 
 trade of greater or less extent, most of the business centering around Boston. 
 
 In the South Atlantic States, Charleston and Savannah were the 
 leading ports, though Wilmington, Norfolk, and Richmond had each 
 a trade of considerable volume. Cotton and rice made up the major 
 portion of the exports of the South CaroHna and Georgia cities, the 
 coastwise shipments going chiefly to New York, Providence, Boston, and 
 Philadelphia, in return for which came grain, flour, provisions, imported 
 goods, and miscellaneous manufactures for the planters of the eastern 
 cottonbelt. An eager and strenuous conflictwasbeingwaged by thesetwo 
 cities for the wholesale and retail trade of the interior. During the early 
 part of the century Charleston hadheld firstplace, butwith theintroduc- 
 tion of steam navigation on the Savannah River the Georgia port had 
 been able to capture a part of the trade formerly belonging to Charleston 
 merchants and was soon challenging the South Carolina city for the lead. 
 
 On the Gulf coast. New Orleans held the undisputed lead in domestic 
 trade and also possessed a greater foreign export trade in domestic 
 products than any other city in the country. Like all other southern 
 seaports. New Orleans received a relatively small proportion of her 
 foreign imports direct from the producing country, securing a large 
 part of them coastwise from the North Atlantic ports, together with 
 cargoes of domestic manufactures. 
 
 'Taylor, Statistics of Coal, 305. ^Ibid., XXXIV, 1828, p. 288. 
 
The Coastwise Trade of the Atlantic Coast, 178Q-1860. 341 
 
 With the setthng of Alabama the commerce of Mobile expanded 
 rapidly. A large part of the cotton crop of Alabama was shipped 
 from this port, much of it being carried coastwise to New Orleans and 
 to the Northern States, and shipments of lumber to other points in 
 the Southern States and to the West Indies, and of staves to New York 
 and to other domestic as well as foreign markets, helped swell the 
 volume of the commerce of this growing city. 
 
 THE COASTWISE TRADE FROM 1830 TO 1850. 
 
 During the two decades following 1830 there was little change in 
 the general character of the coastwise trade of the Atlantic coast — that 
 is, in the nature of the traffic exchanged and in the direction of the 
 movement of the commodities of the different sections of the country. 
 But while there was little alteration in the general character of the 
 trade, there was an enormous increase in its volume. As the popula- 
 tion of the country increased and thousands of acres of new farm lands 
 in both the North and South were occupied, and as manufacturing and 
 mining industries expanded, a constantly growing quantity of products 
 was available for exchange. Each seaport endeavored to improve its 
 transportation system to the interior, and as railways and canals 
 multiplied in number, an ever-rising volume of commodities was carried 
 to the coast to be transported abroad or to other ports of the United 
 States. The sectional diversification of industry became more pro- 
 nounced than before, creating a greater degree of mutual dependence 
 between different portions of the country and adding to the volume of 
 intersectional trade. Foreign trade rose in value from ^134,000,000 
 in 1830 to $318,000,000 in 1850, and since the major portion of the 
 imports continued to enter northern harbors, the coastwise commerce 
 was constantly augmented by the work of distribution. By far the 
 largest part of the southern products which were marketed in the North 
 was carried by the coasting fleet, and there was a continuation of the 
 movement of farm produce from a large area of the Mississippi Valley 
 to the Atlantic States by way of New Orleans. 
 
 The canal and river system connecting New York Bay with the Gulf of 
 Mexico did not figure greatly as a competitor for the traffic between the 
 East and the South, nor did the eastward water-route capture a very 
 large amount of traffic from the Mississippi River. By far the largest part 
 of the traffic flowing between the East and West over the Erie Canal rep- 
 resented new trade and was an addition to the total domestic commerce 
 of the country. It was not until adequate railway connection was estab- 
 lished between the Mississippi and the Atlantic seaboard in the sixth 
 decadeof the century that a large volume of the commerce of the Central 
 States was actually diverted from the southern to the eastern coast, and it 
 was not until after the Civil War that the overland movement by rail 
 from the South to theNorth began to cut heavily into the coastwise trade.^ 
 
 'See chap. s. 
 
342 History of Domestic and Foreign Commerce. 
 
 The best index of the growth of the coastwise trade from 1830 to 
 1850 was the increase of the tonnage of the coasting fleet from 516,979 
 tons to 1,797,825 tons. Of the tonnage in 1850, 1,755,797 tons con- 
 sisted of enrolled vessels of more than 20 tons burden, and 42,028 tons 
 consisted of small licensed craft. A part of this tonnage was made up 
 of vessels engaged inthe trade of the Great Lakes and the western rivers. 
 The enrolled tonnage of the lake district in 1830 amounted to about" 
 9,000 tons. In 1850 the enrolled tonnage of the lakes and western 
 rivers was 300,000 tons, and on the Pacific coast there was a fleet of 
 enrolled and licensed vessels amounting to 2,500 tons. By far the 
 largest part of the coastwise fleet, however, operated on the Gulf and 
 Atlantic coasts.^ 
 
 While there are no statistics of the coastwise trade for comparison 
 with those of the foreign trade, there may be found various accounts 
 which indicate the conditon of the trade of certain cities. New York, 
 with the best transportation system to the interior and a superior 
 financial and mercantile organization, easily led in both domestic and 
 foreign trade. Over two-thirds of the imports of the nation in the dec- 
 ades 1830 to 1850 entered the harbor of New York, and a large part of 
 the surplus products of New England, the Middle Atlantic States, and 
 the lake district were collected at this city, all helping to swell the coast- 
 wise business and giving New York the unquestioned leadership in the 
 distribution of merchandise to domestic markets. The cotton receipts 
 at New York by 1850 were exceeded by the receipts at only two other 
 cities in the country, New Orleans and Mobile, and only three cities, 
 the two just named and Charleston, had foreign cotton exports exceed- 
 ing those of the great northern seaport. The receipts of cotton at New 
 York in 1846 amounted to 311,418 bales, of which 134,506 bales were 
 exported abroad.^ Coal from Philadelphia and Baltimore, sugar and 
 molasses from New Orleans, rice from South Carohna and Georgia, 
 tobacco from Virginia, and manufactured goods from all the new 
 England and Middle States made up a large part of the coastwise 
 imports of New York.^ 
 
 The growth of the coastwise business at Boston is shown by the 
 increase of the entrances and clearances of coastwise vessels from 5,244 
 in 1830 to 9,064 in 1850.* These statistics are of course inaccurate, 
 
 'These statistics, taken from the annual Report of the U. S. Commissioner of Navigation, are not 
 entirely reliable. Many registered, enrolled, and licensed vessels were continued in the records 
 of tonnage, after they were lost or condemned. No important correction was made between 1829 
 and 1856. Hence the figures showing the annual tonnage of the merchant marine are unques- 
 tionably too large, the amount of error increasing each succeeding year. 
 
 ^Hunt's Merchants' Magazine, XV, 1846, p. 396; XVII, 1847, p. 410. The receipts of cotton 
 at New York from various southern points (in 1846) were as follows: 
 
 bales. bales. 
 
 New Orleans 54,076 South Carolina 57,442 
 
 Mobile 44,714 North Carolina 9,306 
 
 Florida 56, 196 Texas 7,457 
 
 Georgia 62,807 Virginia 2*927 
 
 'Ibid., XXII, 1850, p. 331. Ubid., VI, 1842, p. 184; XX, 1849, p. 214; XXIV, 1851, p. 225. 
 
The Coastwise Trade of the Atlantic Coast, 178Q-1860. 343 
 
 as many vessels from both near and distant ports entered and cleared, 
 for which no record was kept. The receipts of cotton at Boston in- 
 creased from 46,203 bales in 1830^ to 270,593 bales in 1849, and the 
 receipts of flour, a large part of which entered coastwise, grew during the 
 same period from 309,997 barrels to 987,988 barrels. New England 
 by 1850 had made great progress in manufacturing, and raw materials 
 for factories and food and fuel for the rapidly growing urban population 
 were secured in a large measure from other sections of the country, 
 in exchange for manufactured goods, fish, ice, and lumber. 
 
 The cities of Philadelphia and Baltimore had a much greater degree 
 of prosperity in domestic than in foreign trade. The shipments of 
 anthracite coal from Philadelphia rose from 63,000 tons in 1830 to 
 1,075,000 in 1850.^ The vessel tonnage employed in the transporta- 
 tion of Philadelphia coal was greater than the tonnage employed in the 
 transportation of any other single domestic product. The Susque- 
 hanna and Tidewater Canal gave Baltimore a share of the anthracite 
 coal trade, and the opening of the Cumberland coal field, made possible 
 by railway and canal construction, gave Baltimore also a large coast- 
 wise trade in bituminous coal. A description of the commerce of 
 Philadelphia contained in Hunt's Merchants' Magazine^ in 1846 contains 
 a typical picture of the coastwise trade of the cities of the Middle States 
 during this period. 
 
 "... a considerable proportion of the foreign merchandise which supplies 
 its [Philadelphia's] warehouses is brought into the port of New York, and is 
 thence transported to its harbor, either by railroads and steamboats, or by 
 vessels in the coastwise trade. Many foreign goods, besides manufactures of 
 cotton and wool, shoes, bonnets, fish, oil, and other products of the industry of 
 the more northern States, are received from New England, and a large amount 
 of goods from England, France, China, and the principal nations of Europe, 
 is here landed from New York. To the neighboring State of New Jersey she 
 sends coal, lime, and iron, as well as various other products of her own manu- 
 factories, and her coal, flour, wheat, and corn to New York and the New 
 England States. Besides, she transports to the adjoining States the products 
 of New England, the manufactures of cotton, wool, leather, and iron. Agri- 
 cultural products are introduced from New Jersey, and Delaware sends its 
 flour, cornmeal, wheat, and com to the port of Philadelphia. Although the 
 exports to Virginia are moderate in their amount, yet Philadelphia receives 
 from that State tobacco, cotton yarn, wheat, corn, and bituminous coal. 
 Naval stores, cotton yam, cotton, and lumber are received from North Caro- 
 lina, cotton and rice from South Carolina and Georgia, and cargoes of cotton 
 from Alabama. 
 
 "A considerable amount of cotton, sugar, and molasses is received from 
 Louisiana, the products of that State, which, in return, imports a portion of 
 the manufactures of Pennsylvania and New England for its own consumption. 
 Heavy goods, to a large amount, are, however, sent from the port of Philadel- 
 phia to the Western States, by the way of New Orleans, and there is here 
 received, in return by the same track, considerable quantities of cotton, tobacco, 
 hemp, pork, lard, lead, and the like products from those States." 
 
 > Niles' Register, XLIV, 1833. p. 40. ^faylor, Statistics of Coal, 405. 'XIV, 1846, p. 428. 
 
344 History of Domestic and Foreign Commerce. 
 
 None of the South Atlantic ports experienced the degree of prosperity 
 enjoyed during the two decades from 1830 to 1850 by the cities of the 
 North. The eastern part of the cotton-belt failed signally to keep pace 
 in material development with other sections of the country, the increase 
 of population being very small, and the expansion in industry and 
 commerce relatively unimportant. Charleston and Savannah continued 
 their struggle for commercial supremacy, neither city gaining a decisive 
 advantage. In both the foreign and coastwise trade of these cities 
 the outbound shipments of cotton, rice, and naval stores grew slightly 
 in volume, and there was a corresponding increase in the receipts 
 of manufactured goods and merchandise. Savannah, handicapped on 
 account of being located on a somewhat shallow river several miles from 
 the sea, had a smaller foreign trade than Charleston. In fact, part of 
 the cotton marketed at Savannah was carried coastwise to Charleston 
 for exportation. 
 
 In contrast to the lack of development in the eastern cotton belt, the 
 western belt prospered highly. As the production of cotton and sugar 
 increased, and the shipments down the Mississippi River rose in 
 volume, the foreign and coastwise trade of both New Orleans and 
 Mobile rapidly expanded. The coastwise shipments of cotton from 
 New Orleans grew from 63,000 bales in 183 1 to 214,000 bales in 1850^ 
 and those from Mobile increased from 54,000 bales to 129,000 bales 
 during the same period.^ The coastwise sugar and molasses trade of 
 New Orleans grew at even a more rapid rate than the cotton trade;' 
 the shipments of grain and provisions did not grow as rapidly, not 
 because of any falling off in receipts, but because of greater local 
 consumption. Lumber continued to occupy an important place in the 
 trade of Mobile, the coastwise shipments amounting in 1850 to nearly 
 5,000,000 feet.* A large part of the food supplies entering Mobile 
 came from New Orleans, while manufactured goods and merchandise 
 were purchased chiefly in northern markets. 
 
 It is, unfortunately, impossible to give a statistical statement of the 
 total value of coastwise trade at ajiy year. An estimate in Andrews's 
 Report on Colonial and Lake Trade gives the gross value of the various 
 branches of domestic commerce in 1852 as follows: Coasting trade, 
 $3,319,039,732; canal commerce, $1,188,000,000; railway commerce, ' 
 $1,081,500,000. The "coasting trade" included the commerce of the 
 lakes and western rivers, which, according to an estimate for 1851, 
 amounted in value to $653,976,202. Deducting this sum, the com- 
 merce carried on along the seacoast had a value of about $2,600,000,000. 
 It is of interest to note that the coastwise trade was considered by far 
 
 ^Hunfs Merchants' Magazine,l'K,m3,p.3l5; XIX, 1848, p. 503; XXIII, 1850, p. 536; Hall, 
 Statistics of the West, 280. 
 
 *md., XIII, 1845, p. 422; XXI, 1849, p. 555; DeBow's Review, XX, 1856, p. 446. 
 ^Hunt's Merchants' Magazine, XV, 1846, p. 494; XXIII, 1850, p. 659. 
 *Ibid., XXV, 1851, p. 736. 
 
The Coastwise Trade of the Atlantic Coast, 178Q-1860. 345 
 
 the most valuable and important portion of the domestic trade and 
 that its estimated value was more than six times the value of the 
 foreign trade of the nation. 
 
 THE DECADE FROM 1850 TO 1860. 
 
 The most prominent feature of the history of the coastwise trade 
 between 1850 and i860 was the diversion of a large amount of traffic 
 from the sea to the railroad. In the northern section of the country 
 four trunk-line railways had, by 1852, established through connection 
 with the Mississippi Valley and the basin of the Great Lakes. No 
 soonerwas this accomplished than the agricultural and mineral products 
 of the Central States, which had formerly found their way to markets in 
 the East by way of New Orleans, were diverted from the Mississippi 
 River and shipped directly eastward over the new transportation 
 routes. This change constituted a distinct loss both to the river and 
 to the coastwise commerce. In the South a similar transformation 
 was effected. The westward extension of the railway lines reaching 
 inland from Charleston and Savannah made it possible for the planters 
 of South CaroHna and Georgia to secure by rail the food supplies which 
 previously had come coastwise from New Orleans or from Philadelphia 
 and Baltimore. However, the loss to the coastwise trade occasioned 
 by this change was partially compensated for by the opportunity now 
 given to Charleston and Savannah to compete with New Orleans and 
 with such inland cities as St. Louis, Louisville, and Cincinnati for the 
 merchandise trade of the people of Alabama and Tennessee. The 
 westbound shipments made by the merchants of the South Atlantic 
 ports were first received coastwise from the North, and to whatever 
 extent they competed successfully against the goods coming from St. 
 Louis and the cities on the Ohio River, a distinct gain was made in the 
 coasting trade of the Atlantic seaboard. 
 
 Though these were the most striking instances of railway competi- 
 tion, they were by no means the only ones. All along the Atlantic 
 coast the local traffic between seaboard cities was beginning to abandon 
 the water route for the safer and more speedy method of rail trans- 
 portation. Abundant signs were in evidence that the time was coming 
 when the coastwise trade, so long the most important factor in domestic 
 commerce, was to be relegated to an inferior position. Even the ship- 
 ments of cotton by rail from the South to the North began during this 
 decade, as well as the shipment by rail of merchandise and foodstuffs 
 from the North to the South. The water routes between the two sec- 
 tions of the country were being gradually paralleled by rail lines, and 
 competition between rival routes was already beginning to result in the 
 development of the peculiar "basing-point" system of railway rates in 
 southern territory. 
 
346 History of Domestic and Foreign Commerce. 
 
 Notwithstanding the encroachment of the railroad upon transporta- 
 tion by water, however, the coasting trade during the decade from 1850 
 to i860 had a large growth. The foreign imports of the country grew 
 from ^174,000,000 to ^354,000,000 and exports from ^144,000,000 to 
 $334,000,000. The city of New York alone imported more in i860 than 
 the entire United States imported in 1850. The addition to the coast- 
 wise trade resulting from the growth of imports would probably have 
 been enough to compensate for any loss due to the changes in the move- 
 ment of domestic trade. The number of bales of domestic cotton con- 
 sumed in northern mills rose from 404,000 in 185 1 to 760,000 in 1859,^ 
 and there was a constant increase of the quantity of northern manu- 
 factures consumed in Southern States. The coastwise coal trade 
 doubled in volume, the ice trade of New England grew rapidly, and the 
 shipment in the late winter and early spring of all kinds of vegetables 
 and fruits from such points as Norfolk, Richmond, and Wilmington 
 (North Carolina) became an important factor in the trade of these 
 ports. Probably the best index of the growth of the coastwise trade 
 during this decade was the increase in the tonnage of the merchant 
 marine employed. Twice during the decade extensive corrections were 
 made in the government statistics by striking off a large number of 
 vessels which had been lost or condemned but had not been stricken 
 from the list, but notwithstanding these corrections the fleet of enrolled 
 vessels on the Atlantic coast grew from 1,450,000 tons to 2,100,000 
 tons, the largest increase made in a single decade up to that time. 
 
 A notable feature of the decade was the growth in the number of 
 the steamship lines engaged in coastwise trade. By 1832 New York 
 had regular semi-monthly communication with Charleston, Savannah, 
 and Florida by the New York and Charleston United States Mail 
 Steamship Line, which had four vessels in commission, with an aggre- 
 gate tonnage of 6,200. Two steamers of this same line offered regular 
 service between New York and New Orleans, while the New York and 
 Alabama Steamship Company, with one vessel, afforded competing 
 service from New York to New Orleans, Mobile, and Havana. The 
 New York and Savannah Steamship Company, with two steamers in 
 commission and a third under construction in 1852, offered weekly 
 service between New York and Savannah, and weekly accommodation, 
 connecting New York, Petersburg, Norfolk, and Richmond, was afforded 
 by the New York and Virginia Steamship Company. In all there were 
 17 steamers engaged in regular service between New York and the 
 South in 1852, the ports reached being eight in number — Charleston, 
 Mobile, New Orleans, Savannah, Jacksonville, Richmond, Petersburg, 
 and Norfolk.^ Lines were established between Charleston and ports in 
 Georgia, Florida, and North Carolina; a daily service was offered 
 between Mobile and New Orleans; and vessels pHed regularly between 
 
 ^statistical Abstract of the United States, 1912, p. 778. 'DeBow's Review, XIV, 1852, p. 576. 
 
The Coastwise Trade of the Atlantic Coast, 178Q-1860. 347 
 
 New Orleans and Galveston and other Texas ports. At the end of the 
 decade New York was connected by the Atlantic and Pacific Steamship 
 Company with New Orleans, Havana, Aspinwall, and California, and 
 other important lines, such as the Southern Steamship Company and 
 the Cromwell Line, offered service touching at all the important points 
 south of New York.^ In New England the regular coastwise service 
 was even more highly developed than along the other parts of the coast. 
 Iri the long train of events and circumstances leading up to the Civil 
 War the coastwise trade occupied an interesting position. To the 
 southern leaders the coastwise trade seemed continually to present con- 
 crete evidence of what they believed to be their great grievance, namely, 
 that the North profited at the expense of the South. Why should the 
 South, contributing two-thirds of the exports of the nation, be com- 
 pelled to buy its necessities from northern merchants, market its crops 
 through northern brokers and bankers, and pay tribute to northern 
 ship-owners ? For the most part, the South attributed to the action 
 of the Federal Government its condition of dependence, and further- 
 more felt not only that it was being discriminated against, but that, 
 inasmuch as most of the revenue of the Federal Government was 
 derived ultimately from southern consumers, the South was being com- 
 pelled to support the government by which its oppression was accom- 
 plished. It is an all but universal failing to attribute economic con- 
 ditions to political policies, and in the United States the tendency to 
 do this has always been strong. The people of the South felt that if 
 the Union were dissolved there would be a satisfactory readjustment 
 of their economic situation, and they looked upon their large and valu- 
 able commerce as a prize which would secure ready European aid for 
 their cause.^ The idea that their great coastwise commerce could be 
 transformed into direct trade with a foreign ally added to their deter- 
 mination to open the conflict and gave them an increased measure of 
 confidence as to its issue. 
 
 ^Hunt's Merchants' Magazine, XLIII, 1860, p. 110. 
 'Callender, Economic History of the United States, 124. 
 
CHAPTER XX. 
 THE COASTWISE TRADE OF ATLANTIC AND GULF COASTS SINCE I860. 
 
 Changes in the coastwise trade after the Civil War, 348. Effects of competition 
 between the railroads and the coastwise carriers, 349. Decline of New Orleans in 
 the coastwise trade, 350. Development 1880 to 1900, 351. Incompleteness of 
 Government statistics of coastwise trade, 352. Act of 1906 establishing five " coast- 
 wise districts," 353. Growth of coastwise trade from 1900 to 1912, 353. Coast- 
 wise entrances at New York and Boston in 1902 and 191 1, 354. Ownership of 
 coastwise lines by railroad corporations, and proposed regulation of coastwise 
 carriers by the Federal Government, 356. 
 
 The outbreak of the Civil War put a stop to the coastwise trade 
 between the North and the South and, with the exception of a small 
 trade carried on by northern shippers at a few southern ports captured 
 and held by the Union forces, there was virtually no commercial inter- 
 course between the warring sections of the country for a period of four 
 years. 
 
 The South, moreover, besides being deprived of trade with the North, 
 was also compelled to witness the almost total suspension of the local 
 coastwise trade and the large foreign trade, both of which were effec- 
 tively crippled by the blockading vessels of the Federal navy. 
 
 The North lost the valuable coastwise trade previously carried on 
 with the Southern States, but the loss was partially compensated for 
 by the vigorous growth of the foreign trade. There is little information 
 available concerning the local coastwise trade of the Northern States 
 during the war. The partial stagnation in the cotton-manufacturing 
 industry resulting from the interruption of cotton shipments from the 
 South doubtless injured local trade somewhat, but it is likely that the 
 total volume of the local business increased by reason of the growth of 
 other manufacturing industries and the prosperous state of the foreign 
 trade. 
 
 CHANGES IN THE COASTWISE TRADE AFTER THE CIVIL WAR. 
 
 The end of the war brought an immediate resumption of domestic 
 trade, and though it was apparent that some time must elapse before 
 the Southern States would recover sufficiently from the devastation 
 and havoc wrought by the conflict to regain the commercial prosperity 
 of former years, yet the energy with which productive activities were 
 undertaken indicated that recovery would be rapid. It was thought in 
 some quarters that the domestic trade would, for the most part, return 
 to the channels in which it had flowed previous to the war, and that the 
 coastwise trade would again assume a position of dominant importance, 
 but this was not to be. Even before the war broke out there had been 
 ample evidence that the railroad was to become the most important 
 factor in domestic trade. While the war was in progress, the effective- 
 ness of the railroad had been displayed in the carriage to the Atlantic 
 348 
 
Coastwise Trade of Atlantic and Gulf Coasts Since i860. 349 
 
 seaboard of western farm produce for which the market in the South 
 had been destroyed. No sooner was the war over than a period of great 
 activity in railway construction began, and within a remarkably short 
 time all parts of the country, especially in the region east of the Missis- 
 sippi River, were linked together by a network of railway lines which 
 became active and successful competitors for the transportation of a 
 large portion of the traffic carried by the coastwise fleet. 
 
 The competition of the railroads brought about a fundamental 
 change in the character of the coastwise trade along the Atlantic coast. 
 While transportation by natural waterways is cheaper than transpor- 
 tation by rail, yet the cost of carriage of most merchandise traffic adds 
 so little to the price that merchants and consumers can, as a general 
 rule, well afford to pay the somewhat higher charge for rail transpor- 
 tation in return for the greater speed and safety with which traffic can 
 be moved. As a result, where there is a choice of rail and water routes, 
 by far the largest portion of valuable traffic is shipped by rail. How- 
 ever, a water route is often used, where available, for the carriage of 
 bulky freight, the price of which is strongly affected by the cost of 
 transportation. As a result of the competition of the railroads with 
 the carriers by water along the Atlantic coast, the merchandise traffic 
 for the most part abandoned the water route, leaving the freight 
 moving coastwise to consist largely of bulky raw materials such as coal, 
 lumber, iron and steel, cement, stone, and sand. 
 
 It must not be supposed that the coastwise trade diminished in vol- 
 ume. As a matter of fact, it has grown steadily since the Civil War, 
 but the rate of increase has been smaller than it was before the war, 
 and the growth has been almost insignificant as compared with the 
 tremendous expansion of the traffic carried by rail. Neither must it 
 be thought that the coastwise trade has suffered the entire loss of the 
 general merchandise traffic. Line service has been maintained between 
 all the important ports ofthe Atlantic coast, and large quantities of gene- 
 ral merchandise freight, as well as a large number of passengers, are car- 
 ried annually by the vessels operated in such lines. In fact, the miscel- 
 laneous manufactured goods and general merchandise, together with 
 the cotton, canned goods, ice, naval stores, and farm products carried 
 by the regular steamship lines constitute, from the standpoint of value, 
 the largest portion ofthe coastwise traffic, though in volume this traffic 
 is exceeded by the bulky freight carried both by line and chartered 
 vessels. The total traffic is by no means small. The Census Report 
 on Transportation by Water shows that in 1906 the total volume of 
 coastwise traffic on the Atlantic and Gulf coasts, exclusive of harbor 
 traffic, was 63,773,169 tons, of which over 41,000,000 tons consisted 
 of coal, lumber, stone, sand, and miscellaneous minerals and mineral 
 products.^ So far, however, had the coastwise traffic of the Atlantic 
 
 *U. S. Census Report, Transportation by Water, 1906, pp. 73, IS. 
 
350 History of Domestic and Foreign Commerce. 
 
 and Gulf coasts fallen in relative rank, that it was only one-fourteenth 
 as great as the volume of traffic originating on the railways of the 
 country. Even the traffic of the Great Lakes was larger than that 
 comprised in the coastwise trade of the Atlantic seaboard.^ 
 
 For a few years following 1870 there was a keen competitive struggle 
 between the railroads and the coastwise shipping. The carriers by water 
 were aided slightly by the law enacted in 1870 abolishing federal ton- 
 nage duties on all vessels engaged in the coastwise trade. However, 
 as was the case in most of the rate wars among competing railroads, the 
 struggle for traffic was brought to a close by the formation of rate agree- 
 ments among competing lines or by their consolidation. The process of 
 consolidation of coastwise lines with railroads has been carried to such 
 an extent that there are but few important coastwise steamship lines 
 now in operation (1914) in which a controlling interest is not possessed 
 by some railroad company or by a shipping consolidation which has 
 close operating and financial connections with various large railway 
 corporations.^ 
 
 At no place was the failure of the coastwise trade to regain the posi- 
 tion it had occupied before the Civil War more marked than at New 
 Orleans. From this city the eastern railroads took virtually all of the 
 trade which had been carried on between the Central and Eastern 
 States by way of the Mississippi River and the Gulf of Mexico. Fur- 
 thermore, the railroads penetrating the western cotton belt from the 
 east and north made large incursions into the trade of New Orleans. 
 St. Louis merchants sold provisions and supplies to planters living with- 
 in 100 miles of New Orleans; on one side the cotton trade of the Gulf port 
 was secured by growing railroad centers such as Memphis and Vicks- 
 burg, and on the other side similar inroads were made by the cities of the 
 South Atlantic States. In 1858 almost one-half of the cotton crop of 
 the country was marketed through New Orleans; in 1870 only 33 per 
 cent. The receipts of meat at New Orleans in 1867-68 were only 
 709,000 pounds, as compared to 3,803,500 pounds in 1859-60, and there 
 was a shrinkage in the receipts of all other western products.^ As the 
 South recovered from the effects of the war and railways were con- 
 structed radiating from New Orleans, the cotton traffic of the city again 
 reached large proportions, and the coastwise trade in that commodity 
 once more became large; but New Orleans has never regained the wide 
 range of commercial activity possessed before the war. 
 
 At other ports on both the Gulf and the South Atlantic coast the 
 competition of the railroad wrought similar changes. The merchan- 
 dise trade was diverted from the coastwise lines, and though the cotton 
 
 'Harbor traffic not included. 
 
 'S. S. Huebner, Report on Steamship Agreements and Affiliations in the American Domestic and 
 Foreign Trade: (House Report, Committee on the Merchant Marine and Fisheries, 63 Cong., 
 1914, IV. 403.) 
 
 ^Report on Internal Commerce, 1886, p. 528. 
 
Coastwise Trade of Atlantic and Gulf Coasts Since i860. 351 
 
 trade eventually expanded to even a larger volume than before the 
 war, the proportion of cotton transported by water gradually decreased.^ 
 A significant change in the character of the trade of the South Atlantic 
 States was noted by the secretary of the Southern Railway and Steam- 
 ship Association in an article on "The Development of the Traffic 
 between the Southern States and the Northern and Northwestern 
 States," written about 1885.^ He said: 
 
 "Until 1878 or 1880 the business from the West to the South and Southwest 
 was done almost exclusively in grain and meat, thus giving rise to the expres- 
 sion that 'the South had its meat-house and grain-crib in the West.' 
 
 "Prior to about 1878, the eastern cities furnished to the South all her furni- 
 ture, agricultural implements, and goods of like character. Now fully seventy- 
 five per cent of the above articles are furnished by the West, also large quan- 
 tities of paints, some boots, shoes, and groceries, and nearly all the oils. 
 Indeed, with the exception of dry goods, notions, etc., the West is an active 
 competitor with the East in supplying the South; and in groceries New 
 Orleans is a competitor with the East." 
 
 This change in the movement of a traffic deprived the ports of 
 Georgia and South CaroHna of large business and cut deeply into the 
 merchandise traffic of the coastwise lines. In the North the competi- 
 tion of the railways was just as effective. Pennsylvania and Virginia 
 coal, New England lumber, and ice, stone, sand, brick, and other bulky 
 freight continued to traverse the water route, but other traffic was 
 taken over by the railroads. 
 
 DEVELOPMENT 1880 TO 1900. 
 
 There was little substantial change in the general character of the 
 coastwise trade from 1880 to 1900, unless it was the increasing degree 
 of control of coastwise Hnes by railway corporations and the increase 
 in the volume of bulky freight as compared to merchandise traffic. 
 Probably the best index of the progress of the coastwise trade is a 
 statement of the increase of the tonnage of the vessels employed. 
 In 1870 the enrolled coastwise tonnage of the Gulf and Atlantic sea- 
 board was approximately 1,425,000 tons. Ten years later the total 
 had fallen to 1,365,000 tons. By 1890 the fleet had increased to 
 1,775,000 tons and by 1900 to 2,100,000 tons. New York retained the 
 leading position as a center of coastwise traffic, both because of her 
 great prominence as a center for export and import trade, and because 
 of her importance as a consuming and distributing center of domestic 
 commodities. The coal trade of Philadelphia overshadowed the trade 
 which that city had in other products. In New England, lumber, 
 ice, stone, and other bulky freight composed the major portion of the 
 outgoing traffic. Baltimore maintained a valuable trade in coal and 
 fishery products; and the local trade of many points on Chesapeake 
 
 *See chap. x. ^Report on Internal Commerce, 1886, p. 679. 
 
352 
 
 History of Domestic and Foreign Commerce. 
 
 Bay continued to center at the Maryland port. Norfolk (Virginia) 
 and Wilmington (North Carolina) probably made a greater relative 
 advance in maritime commerce, both domestic and foreign, than any 
 other Southern cities. Savannah and Charleston, benefited by im- 
 proved railroad communication with the interior and by the improve- 
 ment of their harbors, each became the possessor of larger commerce 
 than ever. 
 
 Table 39. — Coastwise vessels required by law to report to customs officers, entered and cleared at ports 
 on the Gulf Coast from and to ports north of Cape Sable. 
 
 
 Entered. 
 
 Cleared. 
 
 Steam. 
 
 Sailing. 
 
 Steam. 
 
 Sailing. 
 
 No. 
 
 Tons. 
 
 No. 
 
 Tons. 
 
 No. 
 
 Tons. 
 
 No. 
 
 Tons. 
 
 1900: 
 
 Ne\y Orleans 
 
 228 
 93 
 22 
 
 190 
 
 503 
 
 56 
 
 308 
 359 
 759 
 
 502,355 
 
 215,981 
 
 31,366 
 
 366,488 
 
 1,219,650 
 
 115,024 
 
 636,104 
 
 772,012 
 
 1,714,402 
 
 21 
 
 59 
 
 9 
 
 10 
 
 122 
 
 18 
 
 140 
 136 
 204 
 
 15,772 
 
 52,263 
 
 3,635 
 
 10,787 
 
 244,617 
 
 9,210 
 
 72,910 
 100,055 
 302,114 
 
 228 
 94 
 18 
 
 201 
 489 
 
 55 
 
 269 
 358 
 782 
 
 502,659 
 
 216,442 
 
 27,757 
 
 377,908 
 
 1,089,076 
 
 124,760 
 
 605,712 
 
 768,950 
 
 1,644,279 
 
 14 
 33 
 31 
 
 10 
 
 126 
 
 64 
 
 180 
 201 
 312 
 
 8,259 
 25,458 
 16,255 
 
 13,117 
 
 250,497 
 
 43,928 
 
 101,659 
 137,874 
 406,097 
 
 Mobile 
 
 1906: 
 
 New Orleans 
 
 Galveston 
 
 Mobile 
 
 Total for customs dis- 
 tricts of New Orleans, 
 Galveston, Mobile, 
 Apalachicola, Tampa, 
 and Pensacola: 
 
 1894 
 
 1900 
 
 1906 
 
 
 Little attempt was made by the Government — in fact under the laws 
 which existed little attempt could be made — to secure statistics of the 
 coastwise trade. In the annual volumes on Commerce and Navigation 
 of the United States there were published from 1875 to 1880 statistics 
 of the entrances and clearances of vessels engaged in coastwise com- 
 merce, but since only a small portion of the vessels were required by 
 law to make any report of arrival or departure, the statistics presented 
 "a very incomplete view of the entire movements of tonnage in the 
 coastwise trade. "^ From 1898 to 1906 statistics of the movements of 
 tonnage at Gulf ports to or from ports north of Cape Sable were pub- 
 lished, it being possible to record a portion of such movements because 
 the ports connected were, previous to 1906, in separate " great districts." 
 Table 39, which shows the entrances and clearances for all ports and 
 for each of the three most important ports for a few years, gives a 
 partial indication of the growth of the coastwise trade.^ The great 
 
 ^Commerce and Navigation of the United Slates, 1880, p. 836. 
 
 'Compiled from Commerce and Navigation of the United States, 1900, p. 1111; 1906, p. 1273. 
 
Coastwise Trade of Atlantic and Gulf Coasts Since i860. 353 
 
 increase between 1900 and 1906 was due in a large measure to the 
 opening of the Texas oil-fields, the products of which were shipped coast- 
 wise from Port Arthur and other Texas points to eastern refineries. 
 
 In 1906 a law was enacted changing the "great districts." The 
 seacoasts of the United States and Porto Rico were divided into five 
 great districts — 
 
 "the first to include all the collection districts of the seaports and navigable 
 rivers between the Northern boundary of the State of Maine and the Southern 
 boundary of the State of Texas; the second to consist of the island of Porto 
 Rico; the third to include the collection districts on the seacoasts and navi- 
 gable rivers between the Southern boundary of the State of California and the 
 Northern boundary of the State of Washington; the fourth to consist of the 
 Territory of Alaska; the fifth to consist of the Territory of Hawaii." 
 
 By this law the three great districts existing since 1822 were con- 
 solidated into one, and it is no longer necessary for masters of vessels 
 of more than 20 tons, which are bound between ports on the eastern 
 coast of the country and which carry no commodities listed in the 
 act of 1793, to make any report of arrival or departure. Statistical 
 material such as that contained in the preceding table is consequently 
 no longer available. 
 
 An act of Congress of February 21, 1891, requires owners and masters 
 of vessels using a waterway which is being improved by the Federal 
 Government to furnish the officers in charge of the work of improve- 
 ment with a statement of the vessels and the passengers, freight, and 
 tonnage. Under the provisions of this act the Army engineers have 
 been able to collect a considerable fund of information concerning the 
 coastwise traffic. The results of their work are published annually in 
 the Report of the Chief of Engineers. Even these statistics, however, do 
 not give a comprehensive picture of the coastwise trade. The purpose 
 of collecting information is to show the amount of commerce carried 
 by particular waterways. Duplications are unavoidable, accurate 
 manifests can not be secured, often no distinction is made between 
 foreign and domestic trade, and at many points along the coast no 
 statistics are collected at all. Some of the statistics contained in 
 these documents and in others will be shown in subsequent paragraphs. 
 
 GROWTH OF COASTWISE TRADE FROM 1900 TO 1912. 
 
 Since 1900 the coastwise trade of the Atlantic and Gulf coasts has 
 grown considerably, though the expansion has been less than the 
 increase of the traffic of the eastern railways. The tonnage of the 
 vessels employed in the coasting trade, enrolled in the customs districts 
 of the Atlantic and Gulf coasts in 1914, amounted to 2,958,000 tons, an 
 increase of more than 850,000, or of 40 per cent of the tonnage of 1900. 
 Of licensed vessels of less than 20 tons burden engaged in the coasting 
 trade of the Atlantic seaboard in 1914 the number was 7,201, with a 
 
354 
 
 History of Domestic and Foreign Commerce. 
 
 total burden of 90,127 tons. In the following paragraphs some sta- 
 tistical material collected from a variety of sources is presented to show 
 the general character of the coastwise trade of the leading seaports of 
 the Atlantic and Gulf coasts. Where possible, information regarding 
 the trade in different years has been given, in order that a view of the 
 progress of the trade might be given. It must be remembered that in 
 most instances the statistics are estimates, based partly on information 
 collected by commercial and maritime exchanges, and partly on data 
 collected by custom-house officials and Army engineers. 
 
 At New York, the chief center of the coastwise trade, the entrances 
 from other Atlantic ports in 1902 and 191 1 were as shown in table 40.^ 
 
 Table 40. — Coastwise entrances at New York, igos and IQII. 
 
 
 1902 
 
 1911 
 
 From Eastern ports 
 
 From Southern ports 
 
 Total 
 
 3,988 
 3,969 
 
 2,189 
 3,029 
 
 7,957 
 
 5,218 
 
 
 Though, from the standpoint of volume, coal and lumber are the two 
 most important articles entering the New York coastwise trade, ship- 
 ments of merchandise to and from all other ports along the Atlantic 
 seaboard, cargoes of cotton, sugar, tobacco, naval stores, and petro- 
 leum from the South, and of ice and stone from New England, make up 
 a large part of the traffic entering and leaving the city. In 1902 the 
 coastwise shipments of merchandise to and from New England ports 
 amounted to 675,896 tons, and the receipts from New England amounted 
 to 302,694 tons.^ In 191 1 the shipments were 1,113,923 tons and the 
 receipts 907,054 tons.^ Boston led all other New England cities in the 
 trade with New York, though a valuable trade centered at such ports 
 as Portland, New Haven, Fall River, Newport, Providence, and New 
 London. The coastwise coal trade of New York gives employment to 
 a larger tonnage of shipping than the trade in any other commodity. 
 In 1902 more than 10,000,000 tons of coal, mostly anthracite, was 
 shipped from the coal-docks of the city.* By 191 1 the coal shipments 
 reached over 25,000,000 tons, of which about 10,750,000 tons was 
 bituminous.^ About half of the coal carried coastwise from New 
 York is taken to points in the immediate vicinity of the city, and the 
 remainder is taken for the most part to New England cities, Boston and 
 New Haven beingthe largest customers. Lumber is another important 
 item in the coasting trade of New York. The receipts of southern 
 
 ^Monthly Summary of Commerce and Finance, Dec. 1902, p. 1817; Dec. 1911 p 982 
 »/6«., Jan. 1903, p. 2075. '/Wd., Dec. 1911, p. 981. '/6id., Tan! 1903 d2066 
 
 «76«U, Dec. 1911, p. 980. 
 
Coastwise Trade of Atlantic and Gulf Coasts Since i860. 355 
 
 pine in 1902 amounted to 475,000,000 feet,^ and in 191 1 to 396,000,000 
 feet.^ Nearly every port in the Carolinas, Georgia, and Florida shares 
 in the New York trade in southern pine. From New England also 
 considerable quantities of lumber, piling, laths, and material for boxes 
 and crates are secured each year. 
 
 The arrivals of coastwise vessels at Boston in 1902 and 1911 are 
 given in table 41.^ 
 
 Table 41. — Coastwise entrances at Boston, IQ02 and IQH. 
 
 
 1902 
 
 1911 
 
 From Southern ports 
 
 From Eastern ports 
 
 Total 
 
 5,030 
 3,486 
 
 6,502 
 3,738 
 
 8,516 
 7,291,931 
 
 10,240 
 11,905,887 
 
 Tonnage 
 
 The outbound traffic of Boston consists mainly of merchandise 
 and manufactured goods, while the inbound traffic is made up largely 
 of coal, lumber, cotton, vegetables, petroleum, and general merchan- 
 dise. The coal receipts in 191 2 amounted to 6,338,802 tons, the largest 
 portion coming from New York.* 
 
 At Philadelphia the coastwise arrivals in 1902 numbered 3,749 and 
 in 191 1, 4,955.^ The total value of the domestic trade by water at 
 Philadelphia in 191 2, including a large amount of purely local trade, 
 was $1,062,000,000.^ The coal trade of Philadelphia amounts to 
 about 7,000,000 tons annually, about one-third of the shipments being 
 anthracite and two-thirds bituminous.^ 
 
 At Baltimore the coastwise arrivals increased in number from 1,084 
 in 1902 to 1,402 in 191 1, and the clearances from 1,107 ^'^ i>744-' 
 Bituminous coal constitutes an impo/tant item of the Baltimore 
 coasting trade, the shipments in 191 1 amounting to 4,002,809 tons.'^ 
 Only a small quantity of anthracite is shipped from this port. From 
 Newport News and Norfolk several million tons of bituminous coal are 
 also shipped each year. 
 
 In 1912 the value of the coastwise traffic entering Charleston was 
 $22,583,435 and the value of the outbound traffic $33,055,176.* The 
 incoming freight at this city is made up chiefly of general merchandise 
 and manufactures, and the outbound shipments consist largely of 
 cotton goods, cotton, and lumber. The value of the coastwise trade of 
 
 ^Monthly Summary of Commerce and Finance, Dec. 1902, p. 1816. 
 
 Hbid., Dec. 1911, p. 981. 'Ibid., Dec. 1902, p. 1817; Dec. 1911, p. 982. 
 
 ^Report of U. S. Chief of Engineers. 1913, II, 1551. 
 
 ^Monthly Summary of Commerce and Finance, Dec. 1902, p. 1818; Dec. 1911, p. 982. 
 
 'Report of U. S. Chief of Engineers, 1913, II, 1754. 
 
 ''Monthly Summary of Commerce and Finance, Dec. 1902, p. 1817; Dec. 1911. p. 983. 
 
 ^Report of V. S. Chief of Engineers, 1913, II, 2009. 
 
356 History of Domestic and Foreign Commerce. 
 
 Savannah in 1912 was ^199,000,000, the receipts being valued at 
 ^113,416,394 and the shipments at $85,135,532.^ The traffic is of the 
 same general character as that of Charleston. 
 
 Galveston, by reason of the great trade in Texas cotton, now has 
 the largest coastwise trade of any seaport on the Gulf. In 191 2 the 
 coastwise shipments from Galveston, consisting chiefly of cotton, ore, 
 copper, rice, and lumber, had a value of $86,086,343, and the receipts, 
 composed largely of manufactures, lumber, iron and steel products, 
 and miscellaneous manufactures, were valued at $62,305,533.^ New 
 Orleans still possesses a large and valuable trade. The chief shipments 
 from this city are cotton, sugar, molasses, and lumber, and the chief 
 receipts are manufactured goods, oil, iron and steel products, and all 
 kinds of manufactured goods. At Mobile the coastwise shipments of 
 cotton and lumber and the receipts of merchandise and food products 
 from ports on both the Atlantic and Gulf coasts make up a considerable 
 part of the domestic commerce of the city. 
 
 On the whole, the coastwise commerce of the Atlantic and Gulf coasts 
 of the United States is not so large as might be expected in view of the 
 conditions of production and the cheapness of water transportation. 
 The control of numerous water lines by railroad corporations has 
 greatly limited competition among existing water and rail carriers, 
 and has made it more difficult for independent water lines to enter 
 the field. Destructive methods of competition have been employed 
 by the railroads against the water lines.' Little attempt has been 
 made in the past to regulate the operation of water Hnes, and the rela- 
 tions of coastwise carriers with each other and with the railroads. By 
 the Panama Canal act of August 24, 191 2, the Interstate Commerce 
 Commission was given authority to regulate interstate transportation 
 involving the carriage of property by rail and water to the extent of 
 having power to compel the establishment of physical connection 
 between rail and water carriers, to establish through routes and joint 
 rates over rail and water lines, and to establish the proportional rail 
 rate to the ports from or to which goods are transported by a carrier 
 by water; and in 191 3 a movement was started in Congress to enact a 
 law giving the Interstate Commerce Commission a larger degree of 
 authority, especially with reference to the regulation of the competitive 
 practices to be employed by rail and water carriers. The outbreak of 
 the European War in 1914 caused the consideration of the proposed 
 legislation to be postponed. 
 
 ^Report of U. S. Chief of Engineers. 1913. 11, 2022. ^Ibid., 2242. 
 
 ^For discussion of the control of competition among domestic water carriers see tlie Report of 
 the Committee on the Merchant Marine and Fisheries on Steamship Agreements and Affiliations 
 in the American Domestic and Foreign Trade, IV, pt. II. (House Report, 63 Cong., 1914.) 
 
CHAPTER XXI. 
 
 THE COASTWISE TRADE OF THE PACIFIC COAST AND THE 
 INTERCOASTAL TRADE. 
 
 Beginnings of the intercoastal trade, 358. Effect of the discovery of gold in Cali- 
 fornia in 1848, 358. Entrances of vessels at San Francisco, 1850-1853, 359. Coast- 
 wise trade of the Pacific coast, 359. Intercoastal trade, 1869-1913, 361. Tra£5c 
 via Cape Horn and via Isthmus of Tehuantepec, 362. General effect of the 
 Panama Canal on the intercoastal traffic, 363. 
 
 Until after the United States acquired possession of California in 
 1848 the commerce of that portion of the Pacific coast between the 
 present northern and southern boundaries of the United States was of 
 small volume. The country contained but few people and was for the 
 most part in an early stage of economic development. In the Oregon 
 country the only commerce of importance was that carried on in con- 
 nection with the operations of Russian, British, and American fur com- 
 panies, which established j3osts at various points along the coast or 
 navigable streams during the latter part of the eighteenth and early 
 part of the nineteenth century. The only industries of importance 
 in California were agriculture and stock-raising. This province had 
 by 1848 built up a small trade with England and the United States, 
 exchanging small quantities of wool, hides, tallow, grain, and fruit for 
 manufactured goods and miscellaneous merchandise. For the most 
 part, the commerce was carried on by vessels engaged in the trade with 
 the Hawaiian Islands and the Orient, or by whaling vessels which 
 visited the Pacific hunting-grounds. 
 
 The interest of the people of the United States in the region along 
 the Pacific coast was greatly stimulated by the controversy with Great 
 Britain over the Oregon territory, which was settled in 1846, and by 
 the occupation of California by the United States troops during the 
 Mexican War. An important question with which the Government 
 had to deal was that of establishing a more effective system of trans- 
 portation and communication between the Atlantic and Pacific coasts. 
 In 1846 a treaty was negotiated with New Granada in which the 
 Government of New Granada guaranteed to the Government of the 
 United States — 
 
 "that the right of way or transit across the Isthmus of Panama upon any 
 modes of communication that now exist, or that may be hereafter con- 
 structed, shall be open and free to the Government and citizens of the United 
 States, and for the transportation of any articles of produce, manufactures, or 
 merchandise, of lawful commerce, belonging to the citizens of the United 
 States; that no tolls or charges shall be levied or collected upon the citizens 
 of the United States, or their said merchandise thus passing over a road or 
 canal that may be made by the Government of New Granada, or by the 
 authority of the same, than is, under like circumstances, levied upon and 
 collected from the Granadian citizens."^ 
 
 ^Treaties of the United States, Senate Ex. Doc. No. 36,41 Cong., 3 sess., p. 186. 
 
 3S7 
 
358 History of Domestic and Foreign Commerce. 
 
 BEGINNINGS OF THE INTERCOASTAL TRADE. 
 
 On March 3, 1847, Congress enacted a law authorizing the Secretary 
 of the Navy to enter into contracts for the carriage of the mail between 
 New York and Oregon by way of the Isthmus of Panama, and in pur- 
 suance of this law a contract was negotiated in April for semi-monthly 
 steamship service from New York to Charleston, New Orleans, Havana, 
 and Chagres; and in November another contract was entered into 
 for monthly service between Panama and Astoria.^ The construction 
 of the steamships for these Hnes was commenced at once and late in 
 1848 vessels of both the Atlantic and the Pacific fleet were ready for use. 
 To facilitate still further the exchange of commodities between the two 
 coasts of the country, Congress on May 27, 1848, passed an act permit- 
 ting any registered vessel engaged in trade between domestic ports to 
 stop and trade at one or more foreign ports during the course of its 
 voyage. Under this law registered shipping could trade between 
 Atlantic and Pacific ports of the United States, and touch at ports of the 
 West Indies, Mexico, or South American countries. 
 
 Meanwhile, during the course of these preparations for more effective 
 intercoastal communication, before the first vessel of the subsidized 
 steamship lines was ready to sail and even before the ratification of the 
 treaty of Guadalupe Hidalgo, by which Mexico ceded California to 
 the United States, an event occurred which was completely to revolu- 
 tionize the economic condition of the Pacific coast. This was the dis- 
 covery of gold near Sutter's Fort, California, in January 1848. No 
 sooner had the news of the discovery been definitely announced than 
 thousands of people dropped their ordinary pursuits and prepared to 
 hasten to the West. Some of the hurrying throngs went overland, and 
 still more went by water, either around Cape Horn or via the Isthmus 
 of Panama. In 1849 no less than 698 vessels cleared for California 
 from various ports on the Atlantic coast, carrying passengers, provisions, 
 tools, and all kinds of equipment for the mining camps.^ Sailing-vessels 
 were used in great numbers, and many large steamships were soon built 
 to care for the expanding traffic. Two transisthmian routes of travel 
 were soon opened, one by way of Panama and the other across Nicaragua . 
 A railroad was started across Panama in 1850 and was completed in 
 1855. In 1850 the Clayton-Bulwer treaty was negotiated between 
 England and the United States, providing for the protection of any 
 canal which might be constructed across the Isthmus of Panama, and 
 enumerating the rights and obligations of the two governments with 
 respect to the canal. When the Gadsden treaty with Mexico was 
 negotiated in 1853, a clause was included giving to the United States 
 the right of transit across the Isthmus of Tehuantepec over a plank 
 
 ^Senate Doc. No. SO, 32 Cong. 1 sess. 
 
 ^Hunt's Merchants' Magazine. XXII, 1850, p. 208. 
 
Coastwise Trade of Pacific Coast and Intercoastal Trade. 359 
 
 and rail road, the construction of which the Mexican Government had 
 just authorized.^ 
 
 Table 42 shows the arrivals of vessels at San Francisco during the 
 years immediately following the gold rush and gives an idea of the 
 great volume of trade which sprang into existence.^ 
 
 Table 42. — Entrances at San Francisco, 1850-1853- 
 
 Year ending 
 June 30 — 
 
 U. S. vessels. 
 
 Foreign vessels. 
 
 No. 
 
 Tonnage. 
 
 No. 
 
 Tonnage. 
 
 1850 
 
 1851 
 
 1852 
 
 1853 
 
 140 
 379 
 342 
 216 
 
 47,950 
 115,779 
 145,893 
 120,211 
 
 355 
 482 
 376 
 444 
 
 82,914 
 142,349 
 115,459 
 137,817 
 
 For the most part, the American vessels came from ports of Central 
 or South America, with passengers and cargoes from the Atlantic coast 
 of the United States, and the arrivals indicate consequently the state 
 of the intercoastal trade. San Francisco advanced in a few months 
 from a position of relative insignificance as a port to a position of high 
 importance, standing next to New York by 1850 with respect to the 
 number of vessels entered and cleared. In 1849 there were 12 steamers 
 making regular trips between San Francisco and Panama, a larger 
 number than were employed between New York and Liverpool and 
 New York and Havre combined.^ The freight brought in from the 
 Eastern States and from abroad included a wide variety of articles — 
 clothing, provisions, tools, machinery, furniture, explosives, tents, 
 drugs, hardware, and general supplies of many kinds. 
 
 While gold was the most important product of California and the 
 chief export from the standpoint of value, the other resources of the 
 State were by no means neglected. Disappointed gold-seekers were 
 quick to turn to other opportunities presented for acquiring wealth, and 
 a stream of products from ranches and farms — ^wool, hides, skins, wheat, 
 and barley — helped swell the volume of trade. By i860 California 
 was sending almost 3,000,000 pounds of wool each year to New York.* 
 The growth of population in California from 92,597 in 1850 to 379,994 
 in i860 was an index of the rapid economic development of the State. 
 
 COASTWISE TRADE OF THE PACIFIC COAST. 
 
 The sudden expansion of population in Cahfornia gave animation 
 to industry along the entire Pacific coast. South of San Francisco the 
 small ports — San Diego, San Pedro, Santa Barbara, and Monterey — 
 
 ^Treaties of the United States, Ex. Doc. No. 36, 41 Cong., 3 sess., p. 575. 
 
 'Compiled from Commerce and Navigation of United States, 1850-1853. 
 
 'Hunt's Merchants' Magazine, XXIV, 1851. p. 549. *Ibid.. XLV, 1861, p. 6. 
 
360 History of Domestic and Foreign Commerce. 
 
 acquired a thriving business, most of their trade consisting of the 
 exchange of grain and provisions for the supplies brought from the 
 Atlantic States to San Francisco. Northward the development of the 
 forest districts around Humboldt Bay and in Oregon and Washington 
 met the demand for lumber for ship-building and for the construction 
 operations of the rising western cities. Oregon in particular had a 
 steady growth, the population rising from 13,294 in 1850^ to 52,465 
 in i860. The number and acreage of farms in Oregon quickly advanced 
 and each year large quantities of flour, bacon, fruit, and cattle were sent 
 to San Francisco. Gold was discovered in Washington in 1857, along 
 the Fraser River, and there was a rush to that section similar to that 
 made to San Francisco a few years before. Deposits of coal were found 
 in Washington near Puget Sound, and this valuable mineral, together 
 with lumber, made possible the development of a thriving coastwise 
 trade with San Francisco. The total coastwise trade of the Pacific 
 coast, including the commerce of the rivers, was sufficient in 1 860 to 
 give employment to a fleet of enrolled and licensed vessels of a total 
 tonnage of 37,000 tons.^ 
 
 After i860 there was a steady advance in the economic development 
 of thf Pacific region. California's population rose from 864,694 in 
 1880 to 2,377,549 in 1910. The gold mines of California soon reached 
 the maximum of their output, and though they continued to be a source 
 of wealth, they were of small importance as compared to the ranches, 
 farms, vineyards, and forests of the State. In Oregon lumbering and 
 agriculture remained the most important industries and the same was 
 true of Washington. Following 1883, when the Northern Pacific Rail- 
 road was completed, both Washington and Oregon developed with 
 great rapidity. The population of the former State increased from 
 75,116 in 1880 to 1,141,990 in 1910, and the population of the latter 
 advanced from 174,768 to 672,765 during the same period. Wash- 
 ington became the leading lumber-producing State of the country, and 
 also took high rank in the production of wheat. 
 
 The coastwise trade carried on among the three Pacific States con- 
 stantly increased in volume. As was the case on the Atlantic coast, 
 the water traffic came to consist chiefly of heavy bulky commodities, 
 lumber being by far the most important single item. 
 
 The steamship lines put in operation along the coast, however, of 
 which there were 8 important ones by 1913, made possible the develop- 
 ment of a large water-borne merchandise freight and passenger service. 
 The increase in the tonnage of vessels enrolled and licensed at the customs 
 districts of the Pacific coast from 1 10,000 tons in 1870 to 307,000 tons in 
 1900 and to 637,000 tons in 1914 was a good index of the growth of 
 the coastwise trade among the three Pacific States.^ 
 
 'Including Washington in 1850. 
 
 ^Commerce and Navigation of the United Slates, 1860, p. 659. 
 
 'Ibid., 1870, p. 752; Report of U. S. Commissioner of Navigation. 1900, p 363; 1914, p. 156. 
 
Coastwise Trade of Pacific Coast and Intercoastal Trade. 361 
 
 San Francisco maintained its position as the leading trade center 
 on the Pacific coast for both foreign and domestic trade. The tonnage 
 of vessels arriving at this port coastwise in 191 1 was over 4,200,000 tons, 
 and the tonnage of departing vessels 4,640,000 tons.^ The receipts of 
 lumber, the most important item in the coastwise trade, amounted in 
 1911 to nearly 1,000,000,000 feet.^ Pine and fir from Washington and 
 Oregon and redwood from the Humboldt Bay district made up most of 
 the lumber trade. In addition to lumber, the inbound coastwise 
 traffic at San Francisco included large quantities of flour, wheat, 
 barley, and oats from other ports along the coast, and several hundred 
 thousand tons of coal each year from Seattle, Tacoma, and other 
 Washington ports. The outbound traffic from San Francisco was made 
 up mainly of lumber, oil, manufactured goods, and general merchandise. 
 
 The chief ports to be developed on Puget Sound were Seattle and 
 Tacoma. The value of the coastwise shipments from Seattle in 191 1 
 was given by the harbor-master as $39,286,000, and the value of the 
 receipts as $29,080,000.^ The outbound coastwise traffic is made up 
 chiefly of lumber, grain, and coal, and receipts consist of oil, cement, 
 iron and its manufactures, sugar, salt, and all kinds of general mer- 
 chandise.^ At Portland, the chief shipping center of Oregon, a trade 
 similar to that of the Puget Sound ports was built up, with the excep- 
 tion that there were no shipments of coal. The manufacture of flour 
 became an important industry in Portland, and each year thousands of 
 barrels of flour entered the shipments to domestic and foreign markets. 
 
 The city of Los Angeles by 1914 was a close rival of San Francisco 
 as a commercial and industiial center. At the Port of Los Angeles, 
 formerly named San Pedro, a good harbor was constructed and a coast- 
 wise trade similar to that of San Francisco was built up, the inbound 
 traffic consisting largely of lumber and provisions and the outbound 
 traffic being made up of oil, manufactured articles, and general mer- 
 chandise. 
 
 INTERCOASTAL TRADE, 1869 TO 1913. 
 
 The commerce by water routes between the States on the Atlantic 
 and Pacific coast was greatly reduced by the competition of the trans- 
 continental railroads, the first of which, the Union Pacific, was com- 
 pleted in 1869; and though a portion of the intercoastal trade continued 
 to be carried on around Cape Horn or by way of the Isthmus of Pan- 
 ama after the railroads were constructed to the coast, by far the largest 
 part of the trade soon abandoned the water routes. In 1870 the ship- 
 ments from New York to San Francisco via the Isthmus of Panama were 
 valued at $15,300,000, and the return shipments over the same route 
 were valued at $3,150,000.* By 1880 the value of the two streams of 
 
 ^Monthly Summary of Commerce and Finance, Dec. 1911, p. 989. 'Ibid., 990. 
 
 'Ibid., 991. ^Commerce and Navigation of the United States, 1870, p. 672. 
 
362 
 
 History of Domestic and Foreign Commerce. 
 
 traffic had fallen to $2,6oo,cxx) and $2,850,000 respectively. The traf- 
 fic in both directions increased somewhat after 1890, though it never 
 attained the value reached before the beginning of railway competition. 
 In 1910 the west-bound traffic by way of Panama had a value of 
 $4,244,000 and the east-bound traffic a value of $3,590,000,^ and in 
 1913 the value of the two movements were respectively $11,323,000 
 and $6,875,000.^ Wool and wine held a leading position in the traf- 
 fic from the Pacific coast, while the return shipments were made up 
 largely of miscellaneous manufactured wares. It was estimated that 
 in 1909, of the west-bound traffic between the Atlantic and Pacific 
 coasts, 89.5 per cent moved by rail and only 10.5 per cent, by water,' 
 and of the east-bound traffic in 191 1 the railroads carried 95 per cent 
 and the water carriers 5 per cent.* The preponderant position of the 
 railroads in the intercoastal traffic was maintained not altogether on 
 account of their natural advantages. From 1874 until 1907 the trans- 
 continental railroad companies either controlled the steamship lines 
 operating between the two coasts byway of the Isthmus of Panama, or 
 by a consistent policy of competition kept the traffic of the water car- 
 riers down to a relatively small volume. 
 
 The intercoastal trade around Cape Horn likewise had but little 
 growth from 1890 to 1913, as is shown by table 43, which shows the 
 movement of vessels between the two coasts by this route.^ 
 
 Table 43. — Movement of vessels between Atlantic and Pacific ports of the United States via 
 Cape Horn, selected years i8gi to igij. 
 
 
 1891 
 
 1896 
 
 1900 
 
 1910 
 
 1913 
 
 No. 
 
 Tons. 
 
 No. 
 
 Tons. 
 
 No. 
 
 Tons. 
 
 No. 
 
 Tons. 
 
 No. 
 
 Tons. 
 
 Atlantic ports: 
 
 Cleared from .... 
 
 Entered at 
 
 Pacific ports: 
 
 Cleared from .... 
 
 Entered at 
 
 62 
 16 
 
 14 
 59 
 
 108,206 
 26,275 
 
 23,812 
 98,996 
 
 15 
 8 
 
 25 
 37 
 
 28,946 
 13,667 
 
 53,143 
 71,090 
 
 21 
 
 4 
 
 7 
 18 
 
 39,487 
 8,216 
 
 12,642 
 36,428 
 
 11 
 14 
 
 11 
 28 
 
 30,143 
 30,307 
 
 25,201 
 87,004 
 
 16 
 4 
 
 1 
 23 
 
 35,437 
 9,506 
 
 2,052 
 67,147 
 
 In 1907 a third route for intercoastal trade was opened, when the 
 American-Hawaiian Steamship Company, which had formerly run its 
 vessels by way of the Straits of Magellan, began to ship its traffic from 
 ocean to ocean over the railway across the Isthmus of Tehuantepec. 
 The traffic by this route soon attained a considerable volume, the west- 
 bound shipments increasing in value from $5,500,000 in 1907 to 
 $62,400,000 in 191 3, and the east-bound shipments increasing from 
 
 ^Commerce and Navigation of the United States, 1910, p. 1438. 
 
 'Monthly Summary of Commerce and Finance, June 1913, pp. 1376, 1377. 
 
 'Johnson, Panama Canal Traffic and Tolls, 54. 
 
 *Ibid., 58. ^Commerce and Navigation of the United States, 1900, p. 1111; 1913, p. 876. 
 
Coastwise Trade of Pacific Coast and Intercoastal Trade. 363 
 
 $5,880,000 to $32,000,000 during the same period.^ The west-bound 
 trafiic consisted chiefly of manufactured goods, while the most impor- 
 tant item of the east-bound shipments was Hawaiian sugar destined for 
 the refineries of Philadelphia and New York. 
 
 An event of great importance in the intercoastal trade was the open- 
 ing of the Panama Canal in 1914, the construction of which was begun 
 by the United States Government in 1904. This great waterway, 
 built at a cost of $375,000,000, was constructed primarily to assist the 
 intercoastal trade and to add to the efficiency of the United States 
 navy. The costs of transportation had for a long time restricted the 
 volume of trade between the eastern and western sections of the 
 country, but the canal has made possible the greatest freedom of 
 interchange of commodities produced in both sections. Even before 
 the opening of the canal preparations were made to take advantage 
 of the commercial opportunities which the canal offered. New ships 
 were built, new docks were constructed, and new markets were sought. 
 
 The effect of the canal upon the intercoastal coastwise trade was 
 immediately apparent. Six steamship lines with 49 vessels began 
 operating coastwise through the canal, and vessels owned or chartered 
 by shippers were used to a large extent in transporting bulk cargoes of 
 lumber, oil, and coal. During the first year of the canal's operation, 
 the intercoastal shipments via the canal averaged 175,000 tons of 
 cargo monthly. This was a much larger trafiic than had been pre- 
 dicted for the first year, and it indicated clearly that with the opening 
 of the Panama Canal the intercoastal trade had entered upon a new era. 
 
 ^Commerce and Navigation of the United States 1907, p. 1308; Monthly Summary of Commerce 
 and Finance, June 1913, p. 1376. Traffic includes shipments to and from Hawaii.