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THE INDUSTRIAL DEVELOPMENT AND 
 COMMERCIAL POLICIES 
 
 OF THE 
 
 THREE SCANDINAVIAN COUNTRIES 
 
PRINTED IN ENGLAND 
 AT THE OXFORD UNIVERSITY PRESS 
 
 1569 •10 
 
/ 
 
 Carnegie Endowment for International Peace 
 
 DIVISION OP ECONOMICS AND HISTORY 
 John Bates Clark, Director 
 
 THE INDUSTRIAL DEVELOPMENT 
 AND COMMERCIAL POLICIES 
 
 OF THE 
 
 THREE SCANDINAVIAN COUNTRIES 
 
 By POVL DRACHMANN 
 
 EDITED BY 
 HARALD WESTERGAARD, LL.D. 
 
 MEMBEB OF COMMITTEE OF SESEABCH 
 
 OXFORD : AT THE CLARENDON PRESS 
 
 London, Edinburgh, New York, Toronto, Melbourne and Bombay 
 HUMPHREY MILFORD 
 
 1915 
 
 s 
 
Kzioosip 
 
INTRODUCTOEY NOTE BY THE 
 DIRECTOR 
 
 The Division of Economics and History of the Carnegie 
 Endowment for International Peace is organized to ' promote 
 a thorough and scientific investigation of the causes and 
 results of war '. In accordance with this purpose a conference 
 of eminent statesmen, publicists, and economists was held in 
 Berne, Switzerland, in August 1911, at which a plan of 
 investigation was formed and an extensive list of topics was 
 prepared. The programme of that Conference is presented 
 in detail in an Appendix. It will be seen that an elaborate 
 series of investigations has been undertaken, and the result- 
 ing reports may in due time be expected in printed form. 
 
 Of works so prepared some will aim to reveal direct and 
 indirect consequences of warfare, and thus to furnish a basis 
 for a judgement as to the reasonableness of the resort to it. 
 If the evils are in reality larger and the benefits smaller than 
 in the common view they appear to be, such studies should 
 furnish convincing evidence of this fact and afford a basis 
 for an enlightened policy whenever there is danger of inter- 
 national conflicts. 
 
 Studies of the causes of warfare will reveal, in particular, 
 those economic influences which in time of peace bring about 
 clashing interests and mutual suspicion and hostiUty. They 
 will, it is beUeved, show what poUcies, as adopted by different 
 nations, will reduce the conflicts of interest, inure to the 
 common benefit, and afford a basis for international con- 
 fidence and good will. They will further tend to reveal the 
 natural economic influences which of themselves bring about 
 more and more harmonious relations and tend to substitute 
 general benefits for the mutual injuries that follow unintel- 
 Kgent self-seeking. Economic internationaUsm needs to be 
 fortified by the mutual trust that just dealing creates ; but 
 
6 INTRODUCTORY NOTE 
 
 just conduct itself may be favoured by economic conditions. 
 These, in turn, may be created partly by a natural evolution 
 and partly by the conscious action of governments ; and 
 both evolution and public action are among the important 
 subjects of investigation. 
 
 An appeal to reason is in order when excited feelings render 
 armed conJSicts imminent ; but it is quite as surely called 
 for when no excitement exists and when it may be forestalled 
 and prevented from developing by sound national pohcies. 
 To furnish a scientific basis for reasonable international 
 policies is the purpose of some of the studies already in pro- 
 gress and of more that will hereafter be undertaken. 
 
 The publications of the Division of Economics and History 
 are imder the direction of a Committee of Research, the 
 membership of which includes the statesmen, publicists, and 
 economists who participated in the Conference at Berne in 
 1911, and two who have since been added. The list of 
 members at present is as follows : 
 
 Eugene Borel, Professor of Public and International Law 
 in the University of Geneva. 
 
 LuJo Beentano, Professor of Economics in the University 
 of Munich ; Member of the Royal Bavarian Academy of 
 Sciences. 
 
 Charles Gide, Professor of Comparative Social Economics 
 in the University of Paris. 
 
 H. B. Greven, Professor of PoUtical Economy and 
 Statistics in the University of Leiden. 
 
 Francis W. Hirst, Editor of The Economist, London. 
 
 David Kinley, Vice-President of the University of Illinois. 
 
 Henri La Fontaine, Senator of Belgium. 
 
 His Excellency Luigi Luzzatti, Professor of Constitu- 
 tional Law in the University of Rome ; Secretary of the 
 Treasury, 1891-3 ; Prime Minister of Italy, 1908-11. 
 
 GoTARO Ogawa, Professor of Finance at the University 
 of Kioto, Japan. 
 
 Sir George Paish, Joint Editor of The Statist, London. 
 
INTRODUCTORY NOTE 7 
 
 Mapfeo Pantaleoni, Professor of Political Economy in 
 the University of Rome. 
 
 EuGEN Philippovich von Philippsberg, Professor of 
 Political Economy in the University of Vienna ; Member 
 of the Austrian Herrenhaus, Hofrat. 
 
 Paul S. Reinsch, United States Minister to China. 
 
 His Excellency Baron Y. Sakatani, recently Minister of 
 Finance ; Present Mayor of Tokio. 
 
 Theodor Schiemann, Professor of the History of Eastern 
 Europe in the University of BerUn. 
 
 Harald Westergaard, Professor of Political Science and 
 Statistics in the University of Copenhagen. 
 
 Friedrich, Freiherr von Wieser, Professor of Political 
 Economy at the University of Vienna. 
 
 The function of members of this Committee is to select 
 collaborators competent to conduct investigations and present 
 reports in the form of books or monographs ; to consult with 
 these writers as to plans of study ; to read the completed 
 manuscripts, and to inform the officers of the Endowment 
 whether they merit publication in its series. This editorial 
 function does not commit the members of the Committee to 
 any opinions expressed by the writers. Like other editors, 
 they are asked to vouch for the usefulness of the works, their 
 scientific and hterary merit, and the advisability of issuing 
 them. In hke manner the publication of the monographs 
 does not commit the Endowment as a body or any of its 
 officers to the opinions which may be expressed in them. 
 The standing and attainments of the writers selected afford 
 a guarantee of thoroughness of research and accuracy in the 
 statement of facts, and the character of many of the works 
 win be such that facts, statistical, historical, and descriptive, 
 wUl constitute nearly the whole of their content. In so far as 
 the opinions of the writers are revealed, they are neither 
 approved nor condemned by the fact that the Endowment 
 causes them to be pubUshed. For example, the pubKcation 
 of a work describing the attitude of various socialistic bodies 
 
8 INTRODUCTORY NOTE 
 
 on the subject of peace and war implies nothing as to the 
 views of the officers of the Endowment on the subject of 
 socialism ; neither will the issuing of a work, describing the 
 attitude of business classes toward peace and war, imply any 
 agreement or disagreement on the part of the officers of the 
 Endowment with the views of men of these classes as to 
 a protective policy, the control of monopoly, or the regulation 
 of banking and currency. It is necessary to know how such 
 men generally think and feel on the great issue of war, and it 
 is one of the purposes of the Endowment to promote studies 
 which wiU accurately reveal their attitude. Neither it nor 
 its Committee of Research vouches for more than that the 
 works issued by them contain such facts ; that their state- 
 ments concerning them may generally be trusted, and that 
 the works are, in a scientific way, of a quahty that entitles 
 them to a reading. 
 
 John Bates Claek, 
 
 Director. 
 
CONTENTS 
 
 THE INDUSTRIAL DEVELOPMENT AND COMMERCIAL 
 POLICIES OF 
 
 PAGES 
 
 I. DENMARK 11-32 
 
 II. SWEDEN 33-82 
 
 III. NORWAY 83-115 
 
 INDEX 117-124 
 
 GENERAL APPENDIX. 
 
I. DENMARK 
 
 Denmark adopted the mercantile doctrines very early 
 — as far back as 1651 — ^and was also the first country to 
 abandon them. While it was in vogue the prohibitive 
 system was an almost unmixed evil. There was at the time 
 no natural foundation for a high industrial development, 
 and if in spite of this fact factories and ' industries ' were 
 to be developed, it could only be done at the expense of 
 agriculture and commerce. Importation of aU goods whose 
 domestic production was at all possible was forbidden. 
 Moreover, with the object, not of advancing agriculture, but 
 of cheapening the necessaries of life in the interest of ' indus- 
 tries ', the exportation of many agricidtural products, especi- 
 ally grain, was either prohibited or discouraged by export 
 duties ; commerce in these articles was obstructed by mul- 
 tiplied restrictions relating both to importation and exporta- 
 tion, and even more by the uncertainty of the Government's 
 tariff policy. The regulations on the subject changed with 
 confusing frequency ; in the course of one hundred years, 
 for example, the duties on grain were altered seventy-eight 
 times. The principal industries were cloth and textile 
 manufactures, flour mills, brandy distilleries, sugar re- 
 fineries, porcelain works (the manufacture of Copenhagen 
 ware was founded in 1775), tanneries, &c, ; the iron and 
 glass industries of the monarchy were carried on in Norway, 
 Norway and Denmark being of course politically united 
 down to 1814. As the people did not take to the various 
 manufactures with an enthusiasm equal to that of the 
 Government, a colossal smuggling trade was the result. 
 
 Such was the condition of affairs when the new liberal 
 ideas came into Denmark. The great agricultural reform of 
 
12 INDUSTRIAL DEVELOPMENT AND 
 
 the country began with an official determination of the 
 limits of holdings in 1781 and 1792 ; serfdom was abohshed 
 in 1788 and feudal services in 1799. At the same time with 
 this movement, the new or Physiocratic ideas — as well as 
 dire necessity, which was not the least effective cause — 
 forced a change in the commercial policy, the results of the 
 previous prohibitive system having been far from satis- 
 factory. In 1788, the great year of liberation of Danish 
 agriculture, the prohibition was removed from the exporta- 
 tion of grain and cattle, and aU export duties on grain 
 abolished. In 1793 new liberal principles found expres- 
 sion in the introduction of the bonded-warehouse system, 
 and a thoroughgoing reform of the whole tariff policy was 
 promised. This reform was carried out in the edict of 
 February 1, 1797, which marked a complete break with the 
 mercantile system, and placed Denmark in advance of all 
 other countries in the liberaUty of her commercial pohcy. 
 The reform entirely abolished aU restrictions on exporta- 
 tion, modernized and simplified the whole tariff system, 
 extended bonded-warehouse privileges, and finally reduced 
 all duties to an average of ten per cent ad valorem. 
 
 The liberality of the new Danish commercial poUcy and 
 agricultural organization was unique for the time and of 
 the greatest significance for the country. A free peasantry 
 arose and agriculture expanded rapidly with the introduc- 
 tion of the modern methods. The extensive and costly 
 reforms in agricultural methods were also favoured by a great 
 rise in the price of all agricultural products. But especially 
 commerce, which was in the hands of a great 'privileged 
 company ', showed an enormous development at the close 
 of the century, due to the armed neutrality of the northern 
 powers in the wars of the time. Danish wholesale trade 
 extended to the East and West Indies, to Africa and else- 
 where. Copenhagen became the great entrepot of the Baltic 
 and the Cattegat, and the centre of a magnificent transit 
 trade. A single firm, ' Det Asiatiske Kompagni,' brought 
 
COMMERCIAL POLICY OF DENMARK 13 
 
 to Copenhagen in the years 1772-1806 goods to the value 
 of 130,000,000 Rix-doUars (425,000,000 kroner). In 1805 
 the commercial fleet numbered over 1,000 ships, with a total 
 tonnage of more than 72,000. 
 
 The unfortunate war with England, 1807-14, brought 
 this ' brilhant commercial period ' to a sudden conclusion. 
 In the EngUsh attack on Copenhagen in 1807, Denmark 
 lost her strong navy, and the Danish-Norwegian shipping 
 and commerce were sacrificed.^ About 1,000 Danish ships, 
 or practically the whole commercial fleet, fell into the hands 
 of the enemy. The oversea connexions were broken off and 
 lost, the great commercial houses and the industries of the 
 country were ruined, and especially Copenhagen, the capital, 
 suffered incalculably. The rest of the country suffered less 
 from the war, thanks to the continued high prices of agri- 
 cultural products ; from 1801-10 an extraordinary rise in 
 prices resulted from the continental blockade. Yet the 
 losses were too great, and the monetary system broke down ; 
 in 1813 the Government declared itself bankrupt, and when 
 peace finally came in 1814 the country was without the 
 necessary capital to repair the damages it had sustained. 
 The flourishing foreign and wholesale trade was irretriev- 
 ably lost. In addition, there was a devastating crisis in 
 agriculture, in consequence of the rapidly falling prices of 
 grain, which made it scarcely profitable to harvest the crops. 
 From 1818 to 1828 conditions were at their worst. The 
 price of rye, which from 1801 to 1809 had averaged 12-3 
 kroner per hectoUtre, sank to an average of 4-6 kroner per 
 hectolitre for the years 1821-30. Agricultural exports were 
 further encumbered or rendered impossible by the pro- 
 hibitive rates of England's customs duties. Prodigious taxes 
 burdened the land ; agriculture, industry, commerce, all 
 were seriously affected. 
 
 Very slowly the times improved. Land values were 
 finally so depressed that new owners could work at unusually 
 
 "• In this connexion see also Norway. 
 
14 INDUSTRIAL DEVELOPMENT AND 
 
 low costs and agriculture was ready for the upward move- 
 ment. About 1828 the crisis in agriculture was passed, and 
 at the same time that prices began to rise new rational 
 methods and machinery were introduced. Manufactures 
 began to revive at about the same time. The situation in 
 this field felt the influence of the introduction from Norway, 
 on the loss of that country by Denmark in 1814, of several 
 branches of industry, such as iron and glass works, which 
 had formerly supplied the Danish trade. In the business 
 of the country, however, agriculture continued to predomi- 
 nate, and in 1840 still employed fifty-eight per cent of the 
 population. The industrial development was most pro- 
 nounced in the Duchy of Holsteiu. 
 
 Commerce, and especially that of the capital city, was 
 slowest to recover. Copenhagen lost its pre-eminence in 
 this respect not merely over the Baltic region but over the 
 Danish provinces (especially Jutland), and fell behind Ham- 
 burg and Liibeck. The flourishing provincial towns became 
 tributary to the city on the Elbe, and Hamburg's commercial 
 sway extended uncontested as far as Skagen. The imports 
 by water of the provincial cities rose from 44,000 to 122,000 
 tons between 1826 and 1845, while those of Copenhagen 
 increased only from 74,000 to 146,000 tons. The constantly 
 growing export trade in grain also worked to the advantage 
 of the principal ports, from which it could be more directly 
 shipped. The exports of grain amounted in the 'thirties 
 to 160,000,000 kilogrammes yearly ; in addition, 12,000 head 
 of horses, 40,000 head of cattle, 18,000 hogs, and 7,000,000 
 kilogrammes of butter were sent abroad. All these numbers 
 were rapidly on the increase, and the money situation also 
 improved. The notes of the banks of issue or ' national 
 banks ', founded in 1818, reached par in 1838, and were 
 made redeemable in 1845. 
 
 Under these conditions it cannot cause surprise that the 
 Hberal tariff policy was continued in the laws of 1838 and 
 1844. Manufactures were too weak and insignificant to 
 
COMMERCIAL POLICY OF DENMARK 15 
 
 carry through protective measures, and the house and small- 
 shop industries of the towns were afforded still further 
 security by the character of local monopolies which they 
 possessed at the time. This monopoly was not merely legal 
 in character, but was due in even greater degree to the 
 defective exchange system and the lack of modern means 
 of transportation and communication, and to the inefficient 
 business organization. Interest centred in agriculture, and 
 it was aheady felt that this branch of production held rich 
 possibilities for the future. 
 
 The war of 1848-50 produced significant results for the 
 business of the country. The influence of Hamburg suffered 
 practical suspension in consequence of the war, which led 
 to the emancipation of Danish commerce, and enabled 
 Copenhagen to regain its leadership of the provinces. The 
 new opportunities which presented themselves reawakened 
 the old commercial spirit, and capable men, trained in 
 England and in Hamburg, guided the development. The 
 great mihtary levies of the war years also led to a shortage 
 of labourers, which was especially felt in agriculture, and 
 stimulated the use of labour-saving machinery and appU- 
 ances. This in turn formed the basis of a domestic iron 
 industry, machine shops, foundries, &c. After the war, the 
 law of 1853 unified the customs of the monarchy, a step 
 which was to have very important consequences, as the 
 Duchies of Schleswig-Holstein had previously had their own 
 tariff system. 
 
 From this time on development was rapid. The removal 
 of the English duty on grain in 1849 was a great boon to 
 Danish agriculture. Direct steamship connexion between 
 Jutland and England had already been established in 1848, 
 and trade with that country grew by leaps and bounds. 
 Importation from England in 1847 was ten per cent of the 
 total ; in 1851 it was nineteen per cent, and in 1862, twenty- 
 five per cent ; while imports from Hamburg fell from twenty- 
 five per cent to twenty-three per cent in the same period. 
 
16 
 
 INDUSTRIAL DEVELOPMENT AND 
 
 A flourishing transit-trade again grew up, with Copenhagen 
 as staple point. In 1855, ten per cent of the total exports 
 went to Sweden, especially southern Sweden, and in 1862 
 the proportion had risen to eighteen per cent. Even the 
 commercial crisis of 1857 worked to the advantage of Copen- 
 hagen, whose trade indeed suffered, but who profited by the 
 fact that her great rival, Hamburg, was much more severely 
 affected by the disaster. 
 
 Industrial trade schools were founded at this period, and 
 in 1857 industrial freedom was introduced, to the great 
 advantage of the country. Exports of agricultural products 
 increased rapidly, as shown in the following table, giving 
 the yearly averages from 1850 to 1860 : 
 
 Exports of Ageicultueal Peoducts, 1850-1860 
 
 Product. Average Annual Export. 
 
 300,000,000 kilogrammes 
 
 Grains . 
 Butter . 
 Horses (approx.) 
 Cattle „ 
 
 Hogs 
 
 9,000,000 ,j 
 12,000 head 
 60,000 „ 
 60,000 „ 
 
 The numbers of live-stock in the country in 1861 are 
 shown in the next table. 
 
 Live-Stock. 1861 
 
 Horses 
 Cattle 
 Sheep 
 Hogs 
 
 Head. 
 
 325.000 
 1,120,000 
 1,750,000 
 
 300,000 
 
 In these years was also laid the foundation for the present 
 enormous butter-production of Denmark, by improving the 
 manorial dairies and securing free entry into England for 
 their product. 
 
 The Straits toll, which had naturally acted as a handicap 
 on the commerce of Copenhagen, was removed in 1857 on 
 a payment to the Danish treasury by the maritime nations 
 of an indemnity of 65,000,000 kroner. After the customs 
 
COMMERCIAL POLICY OF DENMARK 17 
 
 uiiity of the monarchy had been achieved, as aheady men- 
 tioned, in 1853, a revision of the tariff laws became necessary. 
 Not until 1863 were the efforts to enact a new schedule 
 successful (it was passed July 3 of that year), and before 
 the law went into effect j on AprU 1, 1864, the Duchies of 
 Schleswig and Holstein were lost to Denmark as a result 
 of the unfortunate war of 1864. Thus the tariff law of 1863 
 appHed only to the kingdom, although in framing it the 
 conditions in the duchies had been especially in mind. 
 Regard for the industries of these sections had led to a policy 
 much more friendly to the protective idea than would have 
 been the case if the law had been intended for the kingdom, 
 where industries were undeveloped and the principle of free 
 trade was fully dominant. The new law was, however, a 
 modification of that of 1797, and was in fact very moderate. 
 Export duties were entirely abolished, though transit duties 
 remained in force untU removed by the law of 1865. 
 
 As a result of these conditions the new customs law was 
 much more significant for Danish manufacturers than had 
 been intended. As they profited by the protective features 
 enacted in the interest of Holstein, many industries were 
 brought into the kingdom, which had formerly suppKed the 
 needs of the whole monarchy from Holstein, as, for example, 
 the tobacco industry. A strong industrial development set 
 in, and from this time on it is possible to speak of important 
 manufactures in Denmark. In the year 1871, 1,400 factories 
 were in operation, of which no fewer than 374 had been 
 founded after 1864, while 231 of the older establishments 
 had been enlarged since that date. 
 
 With respect to customs treaties, Denmark consistently 
 refused to conclude such agreements, in order to retain 
 a free hand in regard to her tariff policy ; yet Denmark 
 was the one country to leave its tariff schedules unchanged 
 for a period of forty-four years, and that at a time when 
 the greatest changes were taking place in the tariff policies 
 of other countries. 
 
 1569-10 B 
 
18 INDUSTRIAL DEVELOPMENT AND 
 
 The dominant feature of Denmark's agriculture at this 
 period was the production of grain. The highest pomt in 
 grain exportation was reached in the middle of the 'sixties 
 with 300,000,000 kilogrammes per year.^ The prices of the 
 most important grains were rising steadily, and attained 
 their highest level only in the years 1871-5, after which 
 time oversea competition made itself felt. The following 
 table gives a general view of the changes : 
 
 Prices of Grain in Kroner per Hectolitre 
 
 Period. 
 
 Rye. 
 
 Oats. 
 
 Wheat. 
 
 1841-50 
 
 6-53 
 
 3-05 
 
 9-II 
 
 1851-60 
 
 9-27 
 
 4-62 
 
 12-54 
 
 1861-70 
 
 9-21 
 
 4-83 
 
 12-54 
 
 1871-5 
 
 10-29 
 
 5-92 
 
 14-42 
 
 1876-80 
 
 9-50 
 
 5-64 
 
 12-85 
 
 1881-5 
 
 8-53 
 
 5-41 
 
 10-68 
 
 1886-90 
 
 7-10 
 
 4-95 
 
 9-08 
 
 After grain-production, stock-raising was next in impor- 
 tance. The following table shows the exportation of live- 
 stock : 
 
 Live-Stock Exports 
 
 Period. 
 
 Horses. 
 
 Cattk. 
 
 Sheep. 
 
 Hogs. 
 
 1866-70 
 
 12,000 
 
 51.000 
 
 11,000 
 
 39.000 
 
 1871-5 
 
 9,000 
 
 74,000 
 
 4-1,000 
 
 154,000 
 
 1876-80 
 
 11,000 
 
 99,000 
 
 64,000 
 
 213,000 
 
 1881-5 
 
 11,000 
 
 109,000 
 
 87,000 
 
 287,000 
 
 1886-90 
 
 16,000 
 
 111,000 
 
 77,000 
 
 136,000 
 
 Cattle were exported principally to England, while hogs 
 went chiefly to Germany. Exportation of animal products 
 was negligible down to 1890. An important stimulus to 
 agriculture was the highly developed mortgage system, 
 based on a law of 1850, whereby it obtained abundant 
 capital ; the total indebtedness on farms amounted in the 
 year 1880 to 1,200,000,000 kroner. In view of the preva- 
 lence of small holdings cultivated by their owners, this high 
 
 * After 1864 the figures relate to the kingdom alone. 
 
COMMERCIAL POLICY OF DENMARK 19 
 
 indebtedness was, however, attended with some risk for the 
 farmers in the case of a fall in the price of ground-rents. 
 Such a fall was soon to occur. The continuous and steady 
 improvement was broken off by the crisis which American 
 competition brought on in the agricultural countries of 
 Europe in the 'seventies and 'eighties. The unprotected 
 farming industry of Denmark lay entirely open to this 
 powerful competition. Yet the crisis did not here, as in 
 most of the other countries, lead to an agitation for pro- 
 iection of domestic producers. It was fortunate for Denmark 
 that the prices of animal products did not share in the general 
 decline, but even, especially in the case of butter, continued 
 to rise. 
 
 As soon as the fall in grain prices was seen to be permanent, 
 Danish agriculture undertook with remarkable energy and 
 insight the difficult and expensive change from grain-pro- 
 duction to that of animal products, as, for example, pork 
 and butter, or in other words, the transformation of exten- 
 sive into intensive farming. There was a marked increase 
 in the number of hogs as well as of cattle, and, in consequence 
 of hard work on the practical as well as the scientific side, 
 the dairy business also developed rapidly. About 1880 the 
 centrifugal separator was introduced, and in 1882 the first 
 co-operative dairy was founded, quickly followed by numerous 
 others. To-day these co-operative establishments number 
 about 1,000, besides 300 private — ^principally stock-company 
 — concerns. This marked the introduction into Danish 
 agriculture of the co-operative principle, which soon became 
 of the greatest importance, especially for the smaller and 
 medium- sized farms, procuring for them the advantages of 
 the large-scale producers in perfecting their products. As 
 the transition from extensive to intensive farming was also 
 of especial advantage for the smaller producers, the latter 
 became a principal factor in the new development of agri- 
 culture, while the larger estates, which were better suited 
 to grain-production, suffered most heavily from the crisis. 
 
 B2 
 
20 INDUSTRIAL DEVELOPMENT AND 
 
 On account of the depression, land values fell rapidly after 
 the middle of the 'eighties, and the decline continued until 
 about 1900, amounting in aU to a fall of twenty per cent. 
 It became extremely difl&cult to meet the interest on the 
 heavy mortgages, the amount of the indebtedness rising to 
 an average of fifty-four per cent ; nevertheless, the stability 
 of the mortgage credit system remaiued entirely unshaken. 
 
 From this time on the co-operative idea became the basic 
 principle of modern Danish agriculture, and soon found 
 application in buying and selling as well as in production. 
 Middle-men have frequently been almost entirely displaced 
 in agriculture by these often gigantic co-operative enter- 
 prises. When in 1877 Germany prohibited on sanitary 
 grounds the importation of live hogs, it was necessary to 
 change over to the slaughtering of the animals and exporta- 
 tion of pork, and England became the principal market for 
 this product. Here was new scope for initiative in the 
 co-operative field, and in the year 1887 the first co-operative 
 slaughter-house was started. The following year found 
 eight such establishments in operation, and now the number 
 is thirty-five, exclusive of twenty-three which are privately 
 owned. There are now annually slaughtered 2,200,000 
 swine, with a value of approximately 150,000,000 kroner. 
 Co-operative associations for the exportation of eggs were 
 also founded. In the year 1892 prohibition by England 
 also of the importation of live-stock from the Continent 
 greatly stimulated the slaughtering industry, and the German 
 sanitary regulations (tuberculin tests, ten days' quarantine, 
 import only by sea, &c.) worked in the same direction 
 after 1897. 
 
 This whole movement marked the beginning of the in- 
 dustrializing of Danish agriculture. A further result was 
 that the country was soon in a position to extend the develop- 
 ment on the basis of a very considerable consumption of 
 imported feed (barley, maize, oil-cake, &c.), since the domestic 
 grain-production did not furnish sufl&cient provender for the 
 
COMMERCIAL POLICY OF DENMARK 21 
 
 rapidly increasiBg animal production. This explains the fact 
 that Danish agriculture has taken no interest in a tariff on 
 grain and similar regulations, such as agrarians in other 
 countries have pushed through as an offset against agri- 
 cultural depression. In its commercial relations also the 
 agriculture of Denmark has become in fact ' industrial ', 
 working as it does with imported foreign raw materials, 
 which it transforms into high-grade finished products, 
 chiefly for exportation on a large scale. The following 
 table shows the shift between the leading categories of 
 agricultural products in Denmark's foreign trade : 
 
 Annual Excess of Exports over Imports 
 (In million kroner) 
 
 Period. 
 
 lAve Animals. 
 
 Animal Products. 
 
 Cereal Products, 
 
 1871-5 
 
 34 
 
 26 
 
 39 
 
 1876-80 
 
 44 
 
 22 
 
 28 
 
 1881-5 
 
 50 
 
 30 
 
 3 
 
 1886-90 
 
 35 
 
 66 
 
 -10 
 
 1891-5 
 
 33 
 
 107 
 
 -25 
 
 1896-1900 
 
 19 
 
 163 
 
 -46 
 
 1901-5 
 
 28 
 
 230 
 
 -61 
 
 1906-10 
 
 30 
 
 300 
 
 -76 
 
 The value of the exports of animal products was distributed 
 as follows in 1912 : 
 
 
 Animal Products. Exports, 1912 
 
 
 
 
 (In million kroner) 
 
 
 Article. 
 
 
 
 
 Butter 
 
 
 (approx.) .... 
 
 . 191 
 
 Pork 
 
 
 99 .... 
 
 . 141 
 
 Eggs 
 
 
 S9 .... 
 
 • 27 
 
 Cream and Milk 
 
 ?J .... 
 
 • 23 
 
 As already remarked, the exportation of live-stock has 
 fallen off sharply as a result of this development. The 
 annual exports amount at present to about 20,000 head of 
 horses and 100,000 head of cattle, all of which go to Germany, 
 To the same country are sent the exports of cream and milk. 
 
22 INDUSTRIAL DEVELOPMENT AND 
 
 while the butter, eggs, and pork go to England. Two-fifths 
 of England's total importation of butter is entered from 
 Denmark, and the same is true of one-third of her importa- 
 tion of pork. The table below shows the exportations of 
 live-stock : 
 
 Live-Stock Expoets 
 (Million head) 
 
 Year. 
 
 Horses. 
 
 Cattle. 
 
 Sheep. 
 
 Hogs. 
 
 Poultry 
 
 1871 
 
 0-32 
 
 1-2 
 
 1-8 
 
 0-4 
 
 — ■ 
 
 1881 
 
 0-35 
 
 1-5 
 
 1-6 
 
 0-5 
 
 — 
 
 1893 
 
 0-41 
 
 17 
 
 1-3 
 
 0-8 
 
 5-8 
 
 1903 
 
 0-50 
 
 1-8 
 
 0-9 
 
 1-5 
 
 II-6 
 
 1909 
 
 0-54 
 
 2-2 
 
 07 
 
 1-5 
 
 II-8 
 
 In 1903, eighty-one per cent of all the dairy cows in the 
 country were on farms connected with co-operative dairies, 
 while fifty per cent of all the hogs were butchered in co- 
 operative slaughter-houses. 
 
 In 1907, seventy-five per cent of the surface area of Den- 
 mark was under cultivation. Large stretches of the heath 
 and moor districts in Jutland have since been brought 
 under tillage, chiefly through the tireless activities of the 
 heath reclamation company ; now only four per cent of 
 the total land acreage is regarded as untillable. The total 
 value of the harvests is now from 600,000,000 to 700,000,000 
 kroner annually, whereas in the years 1875-85 it was about 
 300,000,000 kroner. The total value of the exports of 
 agricultural products for 1912 was 522,000,000 kroner, that 
 of the same class of imports 260,000,000 kroner, hence the 
 net exportation was 262,000,000 kroner. In the years 
 1901-5 the average animal net exportation was 148,000,000 
 kroner; in 1906-10, 184,000,000 kroner. In 1912, forty 
 per cent of the population of 2,800,000 were engaged in 
 agriculture and fisheries.^ This enormous development of 
 
 ^ Agriculture has in recent years employed a large number of foreign 
 seasonal labourers (Poles). At the present time the number is about 
 10,000 each year ; they are employed chiefly in the cultivation of sugar- 
 beets. 
 
COMMERCIAL POLICY OF DENMARK 2S 
 
 agriculture has been strongly encouraged by the Danish 
 Government. State-supported associations and institutions 
 work for the improvement of the industry ; in the fiscal 
 year 1910-11, 3,700,000 kroner were devoted directly to 
 the encouragement of agriculture through stock-breeding, 
 premiums in stock exhibitions, &c. (In 1887-8 the amount 
 was 1,200,000 ; in 1899-1900, 2,200,000 kroner.) Magnificent 
 scientific institutes are devoted to the service of agriculture, 
 while the excellent Danish ' high schools ' (Hochschulen) 
 should also be named as a factor in the general progress. 
 
 The total value of the farms amounted in 1909 to about 
 2,500,000,000 kroner, of which large estates (baronial 
 manors, &c.) represented eighteen per cent, smaller estates 
 eighteen per cent, and peasants' farms sixty-four per cent. 
 To encourage the development of small farms the laws of 
 1899, 1904, 1909 provide for cheap loans by the State. Up 
 to 1912, 6,300 such farms had been estabUshed, and the 
 sums loaned by the State for the purpose totalled over 
 28,000,000 kroner. Loans are also granted for the purpose 
 of parcelUng out the larger estates. As shown above, cultiva- 
 tion by owners is the prevailing rule in Danish agriculture. 
 Of the 250,000 farms in Denmark, about 210,000 are worked 
 by their owners. 
 
 The mortgage credit system has been farther and farther 
 developed. The total indebtedness on the farms was esti- 
 mated in 1903 at 1,200,000,000 kroner. The average 
 indebtedness was fifty-four per cent of the value. The 
 system of mortgage associations was supplemented in 1906 
 by the establishment of a State mortgage bank, whose 
 business it should be to cover the existing loan association 
 obHgations by the issue of a unified mortgage paper adapted 
 for foreign markets. The high indebtedness of the farms 
 has also attracted attention in recent years, and the danger 
 involved has been repeatedly pointed out. Large sums 
 leave the country yearly as interest, and a change in this 
 respect would undoubtedly be very desirable. On the other 
 
24 INDUSTRIAL DEVELOPMENT AND 
 
 hand, it must not be forgotten that Danish agriculture has 
 gradually taken on an ideal character in many respects, and 
 could never have reached its high stage of development 
 without the aid of foreign capital. The ever-increasing 
 productivity achieved by intensive cultivation, modem 
 machinery, costly animal-breeding, &c., form, it must be 
 remembered, the credit side of the account. 
 
 It goes without saying, that in comparison with this 
 tremendous development of agriculture the growth of 
 manufactures has necessarily fallen into the background. 
 Especially with respect to exportation, manufactures were 
 almost rasignificant down to a few years ago ; but this 
 relation seems to be changing at present, particularly as 
 the attention of the nation is being drawn more and more 
 to industrial development. We have seen how not only 
 the war of 1864, but also the customs regulations of that 
 year, were favourable to manufactures. In the 'seventies 
 and 'eighties there was a strong movement of population 
 from the country to the towns, and the latter grew rapidly. 
 The development of agriculture created great opportunities 
 also for the towns. By this means a further industrial 
 development was favoured, and shops and factories profited 
 by the increased purchasing power of the rural population. 
 The requirements of agriculture also called new industries 
 into being, such as the manufacture of farm machinery and 
 implements, wagons and carriages, &c. The development 
 of the railroad network and the consequent prosperity of 
 the towns and larger villages, further stimulated the growth 
 of manufactures. Textiles and metal workiug were especially 
 flourishing, and a new industry was added in the production 
 of sugar, which now plays an important role in both the 
 manufactures and the agriculture of the country. 
 
 At the time when protectionist ideas were gaining the 
 ascendancy in all the neighbouring countries, the tariff 
 poUcy of Denmark offered a picture of unalterable calm and 
 steady adherence to the old ways. One reason for the 
 
COMMERCIAL POLICY OF DENMARK 25 
 
 survival of liberal commercial policy, it is true, lay in the 
 unfortunate political relations of the country, but another 
 reason was the fact that there was no occasion in Denmark 
 for the union of agriculture and manufactures in the advocacy 
 of a protective system, since agriculture had nothing to gain 
 from such a policy. Thus the recent period passed by 
 without a change, and not until 1908 was the effort successful 
 to put through a new tariff law, and even then the measure 
 represented a moderation of the old law. This does not mean 
 that attempts have not been made ia the direction of a 
 revision of the tariff system ; no less than seventeen such 
 attempts failed before the effort was successful and a revision 
 secured,^ which was not then achieved untU it had been 
 rendered urgently necessary by changing conditions, which 
 left the old law antiquated and inadequate. Except for 
 a reduction of the duties on sugar and petroleum in the year 
 1891 the tariff schedules had not been changed in the period 
 from 1864-1908, and Danish manufactures had in con- 
 sequence not been exactly pampered. When the tariff 
 revision finally came, it was carried through in a spirit of 
 outspoken friendhness to free trade, and the best the indus- 
 tries could do was to endeavour to limit further reduction. 
 It should be emphasized, however, that even without con- 
 siderable protection manufactures had grown so strong that 
 they were not only able to withstand the new reductions, 
 but even continued in spite of them to develop rapidly. It 
 is true, however, that the evil effects of the dumping system 
 are occasionally felt in certain industries, and also that the 
 results of Sweden's change to protectionism in 1888 were 
 noticeable in Denmark's manufactures and commerce ; on 
 the other hand, Danish manufactures operate with relatively 
 cheap raw materials and productive agents. 
 
 The customs law of May 5, 1908, modernized the whole 
 tariff system, and removed or lowered the duty on most 
 raw materials and means of production ; thus coal, iron 
 ^ After the opposition party, the Left, came into power. 
 
26 
 
 INDUSTRIAL DEVELOPMENT AND 
 
 rods, and bar-iron, pig iron, &c., as well as oils, petroleum, 
 and the like, are duty free. Protective schedules were greatly 
 reduced, and ad valorem duties were applied to a greater 
 extent ; the duty on miscellaneous articles is 7-5 per cent 
 of the value. The effect of the reduction is shown in the 
 fact that since 1908 the income of the Government from 
 the tariff amounts to about six per cent of the imports, 
 where previously it had been between seven and eight 
 per cent. 
 
 Modern industrial statistics exist only for the time since 
 1897. ' The industrial census ' of that year showed 77,000 
 estabhshments, with 180,000 industrial labourers. At the 
 latest census (1906) there were 85,000 establishments, with 
 208,000 employees. The total mechanical energy employed 
 was 49,200 horse-power in 1897, and in 1906, 125,000. It 
 wlU be seen that Danish industry is predominantly of the 
 small- shop variety, though in recent years the growth of 
 large plants has been rapid. The following table shows the 
 total personnel, including labourers and other employees in 
 the various industries : 
 
 Employees in Various Industries 
 
 Industry. 
 
 
 
 
 No. in 1897. 
 
 No. in 1906 
 
 Food Products 47,000 
 
 55.000 
 
 Textiles . 
 
 
 
 
 
 19,000 
 
 19,000 
 
 Confectionery . 
 Bmlding . 
 Timber Products 
 
 
 
 
 
 57,000 
 63,000 
 13,000 
 
 63,000 
 76,000 
 13,000 
 
 Leather 
 
 Stone and Glass 
 
 
 
 
 
 1,500 
 16,000 
 
 1,200 
 17,000 
 
 Metals 
 Chemicals 
 
 
 
 
 
 40,000 
 7,000 
 
 49,000 
 9,000 
 
 Paper 
 Decoratives 
 
 
 
 
 
 2,500 
 7,700 
 
 2,800 
 10,000 
 
 The table below shows, by principal groups, the value of 
 the products of Danish industries in the years 1905 and 
 1911: 
 
COMMERCIAL POLICY OF DENMARK 
 
 27 
 
 Relative Importance of Industries 
 (In millions of kroner) 
 
 Industrial Groups. 
 Food Products . 
 Metals 
 Chemicals 
 Textiles 
 
 Stone, Terra Cotta, Glass 
 Paper and Graphic Arts 
 Timber Products 
 Leather Products 
 
 Total . 
 
 Value of I 
 
 'roducts 
 
 1905. 
 
 1911 
 
 197 
 
 255 
 
 65 
 
 77 
 
 35 
 
 69 
 
 50 
 
 47 
 
 28 
 
 36 
 
 22 
 
 29 
 
 25 
 
 24 
 
 17 
 
 22 
 
 439 
 
 559 
 
 The last table shows most clearly the striking development 
 of Danish manufactures which has taken place in the last 
 few years. The table which follows gives the figures for the 
 particular industries in which this development has been 
 most rapid. 
 
 Industrial Development. Special Industries 
 (In millions of kroner) 
 
 Industrial Branch. 
 Sugar 
 
 Oleomargarine . 
 Tobacco . 
 Coffee-roasting 
 Machinery and Shipyards 
 Electric Cables 
 Metal Goods 
 Oil MiUs . 
 Chemicals 
 Cements . 
 Shoes 
 
 It is now universally recognized that the industrial possi- 
 bihties of a country are no longer absolutely dependent on 
 natural relations, such as mineral wealth, &c. Cheap modern 
 means of transportation, especially by water, have placed 
 the raw-material question rather in the background, and the 
 
 Value 
 
 of Products. 
 
 1905. 
 
 1911. 
 
 23-5 
 
 55-0 
 
 23-2 
 
 35-0 
 
 i6-6 
 
 20-0 
 
 8-0 
 
 i6-o 
 
 48-0 
 
 52-0 
 
 2-6 
 
 7-5 
 
 4-3 
 
 6-0 
 
 6-9 
 
 30-0 
 
 6-1 
 
 12-0 
 
 3-8 
 
 lo-o 
 
 9-4 
 
 12-5 
 
28 INDUSTRIAL DEVELOPMENT AND 
 
 principal conditions of a highly developed industrial life are 
 now above all technical skill and energy, competent work- 
 men, and sound money and market conditions and the Hke. 
 With its many splendid harbours and its excellent geo- 
 graphical situation,^ its high stage of general culture and 
 thorough technical education, Demnark has rich possibiUties 
 for further progress in the industrial field. Undue speciahza- 
 tion in the agriculture of a country now becomes impossible 
 as soon as cultivation reaches the intensive stage and the 
 population attains a certain stage of culture. This is shown 
 even in the incidental phases of present-day agricultural 
 development. Take, for example, the growth of beet-sugar 
 production ; of the machine industry — ^first for the repair 
 and then for the independent manufacture of farming imple- 
 ments and tools ; the manufacture of feed and f ertihzers, of 
 oleomargarine, &c., and of oil-meal ; the packing industry, &c. 
 The marketing of agricultural products gives rise also to an 
 extensive commerce which in turn leads to the estabhshment 
 of shipyards, ironworks, &c. ; in short an exclusively agri- 
 cultural country is to-day an impossibility under the con- 
 ditions as described. 
 
 Moreover, when the population reaches a still higher stage 
 of efficiency it will no longer be contented with a one-sided 
 industrial life. The question of culture is here quite signi- 
 ficant. The famous Copenhagen china industry is an example 
 of this ; another is the construction of the first ocean-going 
 motor ship of the world (the Selandia, 10,000 tons burden) 
 by the shipyard of Burmeister & Wain at Copenhagen^ 
 in 1912. The former achievement is the result of artistic 
 skill, the latter of technical ; many such examples might be 
 named. 
 
 ^ For example, the freight on coal from the coalfields of the North of 
 England is as cheap to Copenhagen as to London itself. 
 
 2 This shipyard, the largest in Scandinavia, employing at present about 
 4,000 workmen, has delivered, or has at present under construction (spring 
 of 1913), altogether 17 motor ships with a total horse-power of 70,000. 
 Thus it has established its position as leader of the world in this field. 
 
COMMERCIAL POLICY OF DENMARK 29 
 
 Danish exports of other than agricultural products re- 
 mained for a long period at around 30,000,000 to 40,000,000 
 kroner annually. In the last three years the value has 
 increased to 49,000,000, 58,000,000, and 71,000,000 kroner 
 respectively. The values of purely manufactured products 
 were as follows : 
 
 Exports of Manufactured Products 
 
 (In millions of kroner) 
 
 Year, Value. 
 
 1909 26 
 
 1910 35 
 
 1912 59 
 
 This shows an increase of a hundred per cent in four 
 years, which, as far as one can see, is not traceable to any 
 chance cause. The actual value of the exported products of 
 various industries for 1912 is shown below : 
 
 Exports or Manufactures, 1912 
 (In millions of kroner) 
 Class. Value. 
 
 Sugar .......... 9-0 
 
 Beverages .......... 1-5 
 
 Oil, Oil-cakes, &e. ........ 7-3 
 
 Chemicals (Fertilizers, &c.) ....... 3'i 
 
 Minerals (Cement, &c.) ....... 9-0 
 
 Porcelain, &c. . . . . . . . . . i-S 
 
 Iron Manufactures, &c. ....... 6-i 
 
 Ships .......... 6-6 
 
 Machinery .......... 8*6 
 
 We have seen how manufactures have grown enormously 
 in spite of the absence of tariff protection. They have, 
 however, had gro;m.d for complaining of a lack of interest 
 on the part of the general pubKc as well as the Government. 
 This situation is comprehensible in a country of pronounced 
 free trade tendencies, especially in view of the great prepon- 
 derance of agriciilture in the national economy. But in this 
 respect also a change is manifest, and the association ' Dansk 
 
30 
 
 INDUSTRIAL DEVELOPMENT AND 
 
 Arbejde ' (Danish Labour), founded in 1908, labours for the 
 advancement of domestic industry. 
 
 The commerce of a country Uke Denmark must needs be 
 large. The growth of the export, import, and transit trade 
 is shown in the following table : 
 
 Foreign and Transit Trade 
 (In millions of kroner) 
 
 Period. 
 
 Foreign 
 
 Trade. 
 
 (Annual Average.) 
 
 Imports. 
 
 Exports 
 
 1876-80 
 
 196 
 
 152 
 
 1881-5 
 
 235 
 
 155 
 
 1886-90 
 
 238 
 
 164 
 
 1891-5 
 
 296 
 
 211 
 
 1896-1900 
 
 366 
 
 250 
 
 1901-5 
 
 444 
 
 342 
 
 1906-10 
 
 571 
 
 437 
 
 1912 
 
 734 
 
 593 
 
 Transit. 
 
 19 
 27 
 
 32 
 
 43 
 89 
 
 134 
 
 170 
 
 ? 
 
 The estabUshment of the free port at Copenhagen in 1894 
 has among other things contributed largely to the growth 
 of the transit and staple trade. The deficit in the trade 
 balance of the country is largely covered by the earnings 
 of its shipping industry, the gross proceeds of whose foreign 
 business are at present from 80,000,000 to 100,000,000 kroner, 
 of which sum about haK is profit for the coimtry. The income 
 from transit trade, &c., ranges from about 8,000,000 to 
 10,000,000 kroner. 
 
 The trade with the principal commercial countries is shown 
 in the following table : 
 
 Foreign Trade with Principal Nations 
 
 Country. 
 
 
 Imports. 
 
 
 Exports. 
 
 
 (Per cent of the total.) 
 
 (Per cent of the total.) 
 
 
 1876 
 
 1901 
 
 1908 
 
 1876 1901 1908 
 
 England . 
 
 . 24 
 
 16 
 
 16 
 
 40-0 58 55 
 
 Germany 
 
 • 38 
 
 32 
 
 34 
 
 32-0 20 21 
 
 Sweden . 
 
 . II 
 
 10 
 
 8 
 
 14-0 8 7 
 
 United States . 
 
 . 6 
 
 14 
 
 14 
 
 0-2 3 5 
 
 Russia 
 
 • 7 
 
 13 
 
 II 
 
 0-5 5 6 
 
COMMERCIAL POLICY OF DENMARK 31 
 
 The shipping industry has always been of considerable 
 importance in Denmark. In contrast with Sweden and 
 Norway, the larger part of the business in Denmark is done 
 by regularly estabhshed hues, owned by large companies. 
 The two greatest in the country are ' Det forenede Damp- 
 skibsselskab ' (D. F. D. S.) and ' Ostasiatisk Kompagni ' 
 (0. K.)/ which maintain routes to America, Africa, and East 
 Asia, the latter also carrying on wholesale merchandising 
 and manufacturing. By these and other companies the 
 active commercial spirit of the brilUant commercial period 
 about the year 1800 has been reawakened. The table shows 
 the tonnage of the commercial fleet at different dates. 
 
 
 Tonnage of Merchant Fleet 
 
 
 
 Sailing Ships. 
 
 Steamships. 
 
 Year, 
 
 Number. 
 
 Tonnage (R.T.). 
 
 Number. 
 
 Tonnage (B.T.). 
 
 i8oo 
 
 700 
 
 70,000 
 
 — 
 
 — 
 
 1839 
 
 1,600 
 
 65,000 
 
 3 
 
 146 
 
 1862 
 
 2,700 
 
 130,000 
 
 43 
 
 4,000 
 
 1879 
 
 2,900 
 
 200,000 
 
 192 
 
 44,000 
 
 1895 
 
 3,000 
 
 180,000 
 
 400 
 
 144,000 
 
 1905 
 
 3,100 
 
 130,000 
 
 570 
 
 330,000 
 
 1911 
 
 2,100 
 
 95.000 
 
 640 
 
 412,000 
 
 Forestry is of less significance in Denmark, only eight per 
 cent of the land being wooded. Fisheries, on the other hand, 
 employ 17,000 men, with 13,000 boats of a total tonnage of 
 28,000, 1,500 equipped with motors. The annual yield of 
 the fisheries is about 13,000,000 kroner. Exports of fish 
 amount to 8,000,000 kroner; imports, however, to about 
 5,000,000. 
 
 The total length of the railways is 3,500 kilometres, 2,000 
 kilometres representing State railways and 1,500 kilometres 
 private lines. Connexion between the different islands is 
 effected by means of train ferries. 
 
 ^ The tonnage of the D. F. D. S. (including vessels building) is at present 
 approximately 200,000, that of the O. K. about 160,000. The latter 
 company owns the largest motor fleet in the world, comprising 16 large 
 motor ships. 
 
32 INDUSTRIAL DEVELOPMENT OF DENMARK 
 
 The three Scandinavian countries have by treaties of 1873 
 and 1875 a conunon coinage system, with the krone as the 
 unit of coinage ; letter postage is also the same for all 
 Scandinavia. With the exception of certain legal relations, 
 however, these are the only bonds of economic union which 
 exist at present between the three countries. Efforts to 
 achieve a ' practical Scandinavianism ', especially in the way 
 of a customs union, have thus far proved unsuccessful. 
 Agitation toward this end has, moreover, subsided since 
 1905, and in fact it is questionable whether such a customs 
 union is possible, in view of the different economic conditions 
 in the three countries. 
 
II. SWEDEN 
 
 The prohibitive system remained longer in force in Sweden 
 than in the neighbouring Denmark. The new poUtical con- 
 stitution of 1809 brought with it no change in tariff policy. 
 The schedules contained numerous sweeping prohibitions, 
 relating to exports as well as imports, and with regard to 
 shipping, the so-called ' Schedule of Products ' of 1724, the 
 Swedish copy of the Enghsh Navigation Act of 1651, was 
 in force. The Continental poUcy of Napoleon even involved 
 for a time an increase in the rigour of the system. 
 
 At this time exportation of lumber was already of the 
 greatest significance for Sweden, England forming the prin- 
 cipal market for this product. At that period, lumber 
 occupied almost the same position in the world economy 
 that iron does to-day. The great fleets of merchant vessels 
 and warships used wood for mast timber as well as for 
 building purposes ; the construction of buildings of all kinds, 
 of dams and dykes, of foundations, &c., was based on a wood 
 technique which was very highly developed. In 1809, 
 Sweden exported lumber to the amount of nearly 32,000,000 
 board feet, no less than two-thirds of which went to England. 
 The total value of the exports of lumber was estimated at 
 5,500,000 kroner, and formed one-seventh of the total 
 exports of the kingdom. At the time of the Napoleonic 
 wars the development of the lumber trade was interrupted. 
 Thus in 1809, England, by way of retaliation against the 
 Continental blockade, increased sharply the import duty on 
 wood coming from the Continent; in 1813 the duty was 
 again enormously increased, so that it finally amounted to 
 £3 5s. (59 kroner) per ' load ' (1-42 cubic metres). This 
 duty produced a much greater effect on European exports 
 
 1569-10 C 
 
34 INDUSTRIAL DEVELOPMENT AND 
 
 to England by virtue of the fact that at the same time 
 a very small tax was collected on the same products imported 
 from British North America. In consequence, the trade 
 between Sweden and England naturally fell into decay. It 
 is true that the English duty was lowered after the close 
 of the war to £2 15s. per ' load ', but at the same time that 
 on the American product was only 10s. As a result, European 
 lumber was practically excluded from the English market. 
 It is even said to have been shipped from Europe across 
 the Atlantic to America, in order later to be brought to 
 England as the American product. In spite of these con- 
 ditions, however, the Swedish lumber trade was by no means 
 at a standstill. In the year 1821 there were 3,633 sawmills, 
 with a production of over 38,000,000 board feet, of which 
 29,000,000 was exported. It goes without saying that so 
 important an article of export as lumber then formed was 
 subjected to an export duty. 
 
 The Continental blockade did not have for Sweden the 
 disastrous consequences suffered, for example, by Norway, 
 where the interruption of importation of grain caused actual 
 suffering for lack of food. The grain harvest of Sweden in 
 the years 1801-20 averaged 6,600,000 metric tons per year, 
 while the annual consumption was 6,900,000 metric tons, 
 so that the country was almost independent of a foreign 
 food-supply. 
 
 Besides agriculture and forestry, mining also played an 
 important role in the economic life of Sweden at this period. 
 The industry is very old, and has for centuries been of the 
 greatest importance for the country. As long as charcoal 
 was used exclusively in the smelting of iron, Sweden ranked 
 high among the iron-producing countries of the world ; but 
 at the close of the eighteenth century the new puddling 
 process was introduced, which permitted the use of mineral 
 coal. This new method changed the former conditions 
 entirely, and to the disadvantage of Sweden, which did not 
 possess sufficient coal deposits to enable the new large- 
 
COMMERCIAL POLICY OF SWEDEN 35 
 
 scale production to be carried on there. In 1800, Sweden's 
 share in the pig-iron production of the whole world was 
 stiQ placed at ten per cent ; the circumstances just referred 
 to brought about a notable decrease in this proportion after 
 that date. At the close of the eighteenth century her 
 annual pig-iron production was 78,000 tons. It reached its 
 highest point in 1805 with 79,000 tons, and then fell off, 
 in consequence of the economic conditions attending the 
 war, to 54,000 tons in the year 1810. 
 
 An institution peculiar to Sweden was the ' Iron Ex- 
 change ', which was founded in 1748, and whose manage- 
 ment was freed from all restrictions in 1769. The object 
 of this institution was to aid its members, which is to say 
 practically all Swedish ironworks, with the loan of money 
 on advantageous terms ; it also purchased iron from the 
 plants at times of slack demand, and laboured to further 
 the interests of the Swedish iron industry in general. It 
 may be noted that the institution is still in existence. 
 
 In the early nineteenth century copper was, next to 
 iron, the most important metal in Swedish mining opera- 
 tions, which indeed is still the case. The copper mines of 
 Sweden are among the oldest in the world. Among others 
 may be mentioned the Falun Mine and the ' Store Koppar- 
 bergslags Aktiebolag ', which ranked for nearly two hundred 
 years as the largest producer of copper in the world. The 
 last-named company is also probably the oldest industrial 
 corporation in the world. In contrast with copper, the 
 production of sUver was already on the decline at the begin- 
 ning of the nineteenth century, and played only a secondary 
 role. 
 
 It is but natural that the mercantilist policy should have 
 concerned itself especially with the mining establishments 
 just described, but it also manifested itself in connexion with 
 manufactures. About the year 1800 the principal industries 
 were such tjrpically ' mercantUistic ' ones as textile, silk, 
 glass, porcelain, and tobacco factories, and the like. In 
 
 C2 
 
36 INDUSTRIAL DEVELOPMENT AND 
 
 Stockholm alone there were no fewer than 463 factories, 
 with a total working force of 10,000 persons and an annual 
 product of the value of about 7,000,000 kroner. The textile 
 industry was especially flourishing here, employing 8,000 
 persons. By the end of the century, however, the reaction 
 set in. It was partly in consequence of the general revolu- 
 tion in technique which, with its introduction of large- 
 scale establishments, tended to concentrate industries where 
 natural conditions of marketing and production were most 
 favourable. 
 
 Another cause of the reaction was the revolution in the 
 dominant modes of economic thought, which deprived the 
 factories of their subsidies, special privileges, &c. The pro- 
 found industrial changes that characterized the economic 
 life of the greater industrial nations manifested themselves 
 in Swedish manufactures also, and men found themselves 
 forced to build up, almost from the beginning, even those 
 industries to which the country was naturally adapted. It 
 is true that it would be going too far to speak of this period 
 as one of industrial renascence. Yet it is worthy of note 
 that one industry was estabUshed in Sweden in those years 
 which has since shown unusual power to survive. We refer 
 to the founding of mechanical engineering establishments, 
 which earned the gratitude of posterity by enabling Sweden 
 to adopt and utiHze with extraordinary promptness the epoch- 
 making invention of the steam-engine. The beginning was 
 made in 1809 with the founding at Stockholm of ' Det 
 Owenska Verkstad ', which formed the comer-stone of 
 modern mechanical engineering in Sweden. Among its 
 achievements was the construction in 1817 of the first 
 Swedish steamship. 
 
 In the commercial field, great privileged trading com- 
 panies had flourished in Sweden, as elsewhere, during the 
 mercantflistic period. The most important of these, the 
 ' Ostindiska Kompaniet ', existed down to 1813. Thanks 
 to the armed neutrality of the country during the North 
 
COMMERCIAL POLICY OF SWEDEN 37 
 
 American War of Independence, Swedish shipping and 
 commerce enjoyed a period of great prosperity at the close 
 of the eighteenth century, which, however, was interrupted 
 for a few years by the war with Russia. Then followed 
 another revival of trade, which profited by Swedish neutrality 
 during the great Napoleonic wars. But when Sweden her- 
 self was drawn into the war, her trade and shipping were 
 crippled ; the profitable smuggling trade with England, who 
 exported her goods to Sweden to be forwarded to the interior 
 of the Continent, did not reach sufficient proportions to 
 compensate for the loss. Swedish exports resumed their 
 growth only after the peace of 1814 had re-established 
 settled conditions. It goes without saying that at this 
 period domestic commerce was burdened with restrictions 
 and privileges. 
 
 That the miseries of the war had not led to the introduc- 
 tion of liberal ideas into Sweden is shown by the customs 
 law of 1816 ; mercantUistic principles were stiU more 
 extensively applied, and no fewer than 318 import and 53 
 export prohibitions were enacted. It was not long, how- 
 ever, before a new attitude came to dominate the com- 
 mercial policy of the country. The new economic doctrines 
 soon found appUcation even in the forestry regulations of 
 the country. Under the influence of the new ideas as to 
 the impracticabihty of Government industry, the great 
 State forests in the southern provinces were largely given 
 away outright or sold at a nominal price between the years 
 1810 and 1830. Unfortunate as were the consequences 
 which were to follow these transactions, in a social-political 
 way as well as in the field of forestry itself, they nevertheless 
 undoubtedly contributed in a high degree to the develop- 
 ment of the lumber industry, which soon became of great 
 importance to the country. 
 
 After 1823 the new tendencies began to manifest them- 
 selves in the tariff policy, and the attacks on the prohibitive 
 system became more and more violent. The zeal of the 
 
38 INDUSTRIAL DEVELOPMENT AND 
 
 Swedish Parliament for reform was traceable not merely to 
 its newly-acquired power over customs regulations ; the evil 
 effects of the prohibitive system had long been recognized, 
 and it was hoped that by this means a higher degree of 
 freedom would both infuse new life into trade and com- 
 merce and secure an increased customs revenue for the 
 i Government. The example of Norway was also serving as 
 i a guide, that country having aheady enacted a customs law 
 I in 1821, in which the protective system had been definitely 
 1 abandoned. As a commercial bond between the two coun- 
 tries, which had since 1814 been under a common king, but 
 between which no customs union subsisted, the so-called 
 Inter-Dominion Ordinance {Zwischenreichs-Verordnung) was 
 issued in 1825 and confirmed by law in 1827. The principal 
 features of this ordinance were reciprocal freedom of trade 
 in certain articles ; a fifty per cent reduction in duties both 
 for certain domestic products and for foreign goods imported 
 across the boundary ; and finally, admission to trade between 
 the two countries on the payment of fifteen per cent ad valorem 
 on goods the importation of which from other countries was 
 prohibited. 
 
 The new customs law of 1824 still carried 174 import and 
 28 export prohibitions. The movement which had begun 
 continued, however, slowly but without interruption. The 
 last import prohibition was not removed until 1858, and 
 the system continued to retain its strongly protective 
 character. As early as 1826 a very significant reform was 
 carried through in the change from ad valorem to specific 
 duties. Moreover, treaties were concluded with Great 
 Britain, Denmark, Prussia, Russia, and the United States, 
 which secured great concessions for Swedish shipping through 
 the reciprocal grant of most-favoured-nation treatment. 
 Differential customs and port duties were levied upon the 
 trade of other than treaty powers, down to 1857. In the 
 meantime England, which had suffered at least as much as 
 Sweden from the suppression of the importation of Swedish 
 
COMMERCIAL POLICY OF SWEDEN 39 
 
 lumber, repeatedly reduced the duty on that product. The 
 duty was lowered in 1842, in 1851, and again in 1860, when 
 it was cut to a nominal figure, and finally in 1866 it was 
 entirely abolished. The Swedish export duty on lumber 
 products was generally reduced in 1857, and was abolished 
 in 1863. 
 
 The disturbed conditions attending the wars at the 
 beginning of the century were followed by crises which 
 paralysed industry and whose effects were stUl felt, especially 
 in manufactures, down to the 'forties. After this interval 
 of depression came a period of progress and prosperity for 
 Swedish industries, and in the decades about the middle of 
 the century the foundations of modern Sweden, economically 
 speaking, were laid. Population at the time was steadily 
 on the increase ; from 2,300,000 in the year 1800 population 
 increased to 3,100,000 in 1840, and 3,900,000 in 1860. 
 Emigration, which later became so important, was at this 
 period quite negligible. Agrictdture was throughout the 
 most important industry, employing nearly three-fourths of 
 the population. The average total amount of grain harvested 
 was 900,000 metric tons yearly from 1821 to 1840, and 
 1,200,000 yearly from 1841 to 1860. After 1841 Sweden 
 began exporting grain, and in the period from 1840 to 1860 
 the average annual exportation was 500,000 metric tons, 
 increasing gradually. The most important varieties of grain 
 exported were rye and especially oats. The area under 
 tillage rose from 500,000 hectares at the beginning of the 
 century to about 1,000,000 hectares fifty years later. The 
 large production of grain naturally threw stock-raising some- 
 what into the background. The nmnber of live-stock, taking 
 cattle as a basis, and counting one horse equal to one and 
 one-half head, one sheep equal to one-tenth, a goat one- 
 twelfth, and a hog one-fourth, was estimated for the year 
 1800 at 2,000,000 head, for the year 1850 at 2,400,000 head. 
 Not until 1844 was stock-raising taken up seriously, when 
 the Diet voted 100,000 kroner for the establishment of 
 
40 INDUSTRIAL DEVELOPMENT AND 
 
 breeding centres ; after this time the movement progressed 
 gradually if not with uniformly good results. 
 
 About 1850, Sweden still imported annually 500,000 kilo- 
 grammes of butter and an equal quantity of cheese, besides 
 2,300 head of Uve-stock, while exporting grain. From this 
 time on she began exporting butter and live-stock, and 
 secured an excellent market for these products in England 
 as well as in Denmark. For the encouragement of agri- 
 culture numerous agricultural schools and institutes were 
 estabhshed, and these attained great importance. Mortgage 
 credit associations, which were founded in the 'thirties and 
 'forties, also furthered the development of agriculture. As 
 a means of uniting the different associations, the Sveriges 
 allmanna Hypotheksbank was founded in 1861 ; the principal 
 object of this institution was to negotiate loans for the credit 
 associations. 
 
 In the meantime extraordinary development was taking 
 place in the lumber industry. In the 'forties began the 
 construction of modern water-power saw-miUs, and in 1857 
 the first steam saw-miU in Sweden was built ; the number of 
 steam mills increased rapidly in subsequent years. The 
 growth of the lumber industry was also greatly aided by the 
 stock-company system, which was introduced in consequence 
 of the edict of 1848 authorizing the formation of such 
 companies. The development of transportation faciUties 
 within the country and the introduction of steamships, which 
 considerably cheapened exportation, were Ukewise very 
 important in this connexion. The rebuilding of the TroU- 
 hattan canal (1838^14) was a great advantage for exporta- 
 tion via Gothenburg, and the growth of the railway system 
 soon became of importance for the whole country. The 
 vigorous growth of the lumber mills was also important for 
 Swedish engineering establishments. The latter developed 
 rapidly, particularly after 1850, in the direction of the 
 building of steam saw-miUs, turbines, traction engines, 
 and the like. In 1860, sixty steam saw-miUs and 5,000 
 
COMMERCIAL POLICY OF SWEDEN 41 
 
 water- and wind-power mills were enumerated in Sweden, 
 and the exports of lumber were estimated at 216,000,000 
 board feet. 
 
 The most important districts for the lumbering industry 
 were the great forest regions in Warmland and Dalsland, to 
 which was later added Norrland with its almost inexhaustible 
 forest wealth. While wood had formerly been exported in 
 practically the crudest form, as a result of the movement 
 we are describing it became possible for Sweden to work it 
 up into more valuable products before exportation. Of the 
 greatest importance at all times for this whole industry was 
 the cheap transportation of logs by water, and this traffic 
 was now greatly facihtated by the regulation and dredging 
 of the beds of the streams. 
 
 Mining also shared in the upward movement. New 
 technical methods were introduced, and iron-ore production 
 increased from about 200,000 tons in the year 1830 to about 
 400,000 tons in 1860. Exportation of ore was indeed still 
 out of the question ; this was made possible only by modern 
 large-scale production and by the newly discovered ore 
 deposits in Lapland as well as by the modern cheap means 
 of transportation. Swedish production of pig iron, which 
 had reached its minimum by the year 1810, rose in the 
 'thirties to 100,000 tons annually, and in the 'fifties to 160,000 
 tons per year, and in 1860 reached a level of about 200,000 
 tons. Blast furnaces were greatly improved in technical 
 respects, and toward the close of the 'fifties experiments were 
 carried out in Sweden which were of essential importance 
 for the discovery of the Bessemer process. The production 
 of steel was still in the future. 
 
 For manufacturing itseK it was of the very highest sig- 
 nificance that the development in this period was more and 
 more in the direction of industrial freedom. Two enactments 
 of 1821 and 1828 resulted in the freeing of industry from the 
 old guild regulations. In 1848 guilds were definitely aboUshed 
 and their place was taken by free organizations of working- 
 
42 INDUSTRIAL DEVELOPMENT AND 
 
 men in the interest of the trades ; finally, in the year 1864, 
 complete industrial freedom was achieved. 
 
 In 1840 the total value of the products of Swedish factories 
 was still only about 28,000,000 kroner ; approximately half 
 of this amount was divided between clothing, sugar, and 
 tobacco manufactures (8,000,000, 5,000,000, and 2,000,000 
 kroner respectively). Machine shop products were valued at 
 only 800,000 kroner. From 1840 on, the depression in manu- 
 factures was overcome, and development proceeded rapidly. 
 In 1860 the number of factories stood at 2,400, employing 
 30,000 persons and turning out products to the value of 
 70,000,000 kroner per year. 
 
 Among the most important industries were the flour-mills, 
 which, like the saw-mills, derived the greatest advantage 
 from the cheap power furnished by the numerous waterfalls 
 of the country, also the manufacture of spirits, breweries, 
 tobacco factories, and finally the extensive textile industry. 
 Among the textiles, wool-weaving flourished especially, in 
 particular at Norrkoping, ' the Swedish Manchester ', where 
 in 1850 the number of cloth factories was 122. Cotton- 
 spinning was extensively followed as well as silk-weaving, 
 the last reminiscence of the days of mercantiUsm. Tanning, 
 candle-making, soap manufacture, &c., may also be named. 
 
 Of especial significance among the new estabUshments of 
 this period was the founding of a chemical industry which 
 began with the erection of the first plant of the famous 
 Swedish match-factories at Jonkoping in 1844. Swedish 
 matches, thanks to continual improvement, soon became 
 a staple article all over the world and one which was destined 
 to be of the highest importance for Swedish industry. Paper 
 mills also made progress at this time and changed to modern 
 methods with the utihzation of water power, and glass and 
 porcelain works were in operation, many of which had come 
 down from olden times. 
 
 As already mentioned, the development of an extensive 
 machine industry was favoured by the erection of saw-mills, 
 
COMMERCIAL POLICY OF SWEDEN 43 
 
 by the extension of means of transportation, and by the 
 general revolution in industrial technique. Such machine 
 shops, for example, as those of Kockum, Bergsund, Bolinder, 
 Nydqvist and Holm, Motala, Goteborg, Stora Varfvet, Munk- 
 tells, and many others trace their origin to this period. All 
 the above estabUshments are in existence to-day, and their 
 names are inseparably connected with the up-building 
 of industrial Sweden. In addition, numerous iron-works 
 and foundries were estabhshed. Hardy pioneers guided 
 the development, and world-famous inventors such as 
 John Ericsson (1803-89), inventor of the screw-propeller, 
 G. E. Pasch, inventor of safety matches, and many others, 
 shed lustre over the name of Sweden. 
 
 Commerce likewise revived, favoured by the long period 
 of peace and by the estabUshment of a sound currency. The 
 total foreign trade of the kingdom at the close of the 'thirties 
 had amounted to 57,000,000 kroner (exports 30,000,000, 
 imports 27,000,000) ; at the close of the 'forties the total was 
 76,000,000 kroner (exports 40,000,000, imports 36,000,000), 
 and by the close of the 'fifties it reached 160,000,000 kroner 
 (exports 79,000,000, imports 81,000,000). The repeal of the 
 Oresund toll by agreement with Denmark in 1857 was a 
 great boon to Swedish commerce. In these years shipping 
 began to go over to the use of steam propulsion. In 1850 
 Sweden had 2,700 vessels with an aggregate tonnage of 
 about 200,000, of which about six per cent represented 
 steamships. Also the first State railway was opened in 
 1856, and railway development was rapid from that time 
 onward. 
 
 As already stated, the tariff revisions of the first half of 
 the century had by no jtneans deprived the system of its 
 decidedly protective character. In 1857, however, a com- 
 plete change took place. Under the influence of the ideas 
 then dominant in the economic field, as well as of the example 
 of the policy of England, free trade doctrines had gained 
 considerable vogue in Sweden. In the Government itself the 
 
44 INDUSTRIAL DEVELOPMENT AND 
 
 new doctrines found their most ardent advocates, especially 
 in the highly gifted and enthusiastic friend of free trade, 
 Baron J. A. Gripenberg, who became Minister of Finance 
 in 1856. The programme of the Government now embraced 
 a complete abandonment of the prohibitive system, with 
 protection only as a transitional expedient and complete 
 free trade as a final goal. In 1857 the duty on grain and 
 flour was permanently removed (it had already been tem- 
 porarily suspended during the Crimean War) ; the duty was 
 likewise abolished on cattle, beef, pork, cheese, and butter, 
 most raw materials, the coarser iron goods, machines, tools, 
 and vehicles. At the same time significant reductions were 
 made affecting the finer manufactures. In the report which 
 followed the submission of the Bill, the Minister of Finance 
 used these words : ' I surely am not mistaken in the behef 
 that the public opinion of this country already condemns 
 the protective system which has become more and more 
 discredited in other countries.' 
 
 During the same session of the Parhament, in addition to 
 the tariff changes, the differential system in the navigation 
 policy was aboHshed ; from this time on, foreign vessels were 
 placed on an equahty with Swedish with respect both to 
 port dues and to duties on cargoes. These changes are impor- 
 tant not merely in themselves but as indicating a complete 
 revolution in the Swedish tariff poKcy. It is of interest, too, 
 to note that the advocates of the new ideas were found 
 especially in the more influential circles. 
 
 It soon became manifest, however, that the enthusiasm for 
 free trade had not yet taken deep root either in the Parlia- 
 ment or in the country at large. An immediate incentive 
 for the free trade movement was the desire to bring about 
 a greater freedom of intercourse and a closer commercial 
 union between the recently united countries, Norway and 
 Sweden. A beginning in this direction had been made, as 
 already mentioned, as early as 1825, in the Inter-Dominion 
 Law (Zwischenreichsgesetz). The effort was continued on the 
 
COMMERCIAL POLICY OF SWEDEN 45 
 
 Swedish side and a commission, established in the year 1855, 
 soon found that the great inequahty in the customs schedules 
 in Sweden and Norway was one of the most considerable 
 obstacles to a freer mutual trade. As at this time the 
 Norwegian schedule was in general notably lower than the 
 Swedish, it was the wish of the Government to bring the 
 latter down to an equahty with the Norwegian in order to 
 prepare the way for a later sweeping reduction in that of 
 both countries simultaneously. Meantime, the Parliament 
 was not wholly inchned to follow the Government when it 
 came to a radical departure from the protective system. In 
 1863, on the occasion of a motion to appoint a committee 
 to work out a new customs schedule, a resolution was carried 
 to the effect that, ' Import duties on manufactured articles 
 produced by domestic industries should be fixed on such 
 a scale that, on the one hand, Swedish producers could have 
 no opportunity to reap unreasonable profits at the expense 
 of the pubUc, and that, on the other hand, it would be 
 possible for them by the use of foresight and industry to 
 compete profitably with foreign estabhshments more favour- 
 ably situated as to cKmate, location, and availabiUty of 
 capital.' But this resolution was disregarded by the Govern- 
 ment, and it was ordered that the reconstruction of the 
 system should go forward ' on the basis of a continued 
 appUcation of the principles of free trade, and at the same 
 time that care should be taken that the import duties on 
 manufactured goods also produced by domestic industries 
 should, in cases where it was found necessary, be so adapted 
 to the conditions obtaining that these articles of consumption 
 would not be unduly raised in price.' 
 
 Yet it is doubtful after all whether the Government would 
 have succeeded in carrying out a really free trade pohcy in 
 opposition to the protectionist sentiment of the Parhament, 
 if the conclusion of a commercial and shipping treaty with 
 France in 1865 had not given an impulse in its favour. As 
 previously stated, the Parliament had already (in 1857) 
 
46 INDUSTRIAL DEVELOPMENT AND 
 
 removed all inequalities in the treatment of domestic and 
 foreign ships. This action was especially significant for the 
 relations with France, which nation had previously refused 
 to conclude with Sweden such a mutual agreement as she 
 had already made with other Governments, including those 
 of the most important commercial nations. In Sweden it 
 was expected that the results of the law of 1857 would be 
 a return of courtesy for courtesy on the part of France, and 
 that Swedish vessels would be granted the same advantages 
 that Sweden had granted to the French. This was not the 
 case, however, and it soon became apparent that because of 
 this fact, and also because of the favoured position in French 
 trade which EngHsh, Belgian, and Prussian and other German 
 vessels had received by treaty in 1860, 1861, and 1862, 
 Swedish ships were gradually being forced out of that trade. 
 These conditions gave rise in Swedish and still more in 
 Norwegian shipping and trade circles to a growing desire for 
 a shipping treaty with France which should lead to an 
 equahty of treatment of Swedish, Norwegian, and French 
 vessels. From the negotiations on the side of France, it 
 soon became clear that she would not conclude a shipping 
 treaty by itself, but only a combined commerce and shipping 
 agreement. Removal of the navigation restrictions would 
 only be granted in return for a reduction on goods exported 
 by France to Sweden and Norway. Thus the latter two 
 countries were forced to ' purchase a shipping treaty with 
 a commercial agreement '. The price to be paid was a reduc- 
 tion of duties, very considerable in the case of the Swedish, 
 less in the case of the Norwegian. The treaty was concluded 
 on February 14, 1865. The commercial agreement resulted, 
 in several instances, in extensive reductions in the duties, 
 and these reductions were made general by the ' most- 
 favoured-nation clauses ' in the treaties with other countries. 
 For Sweden, the result was in part duty reduction and in 
 part free trade, the latter in no fewer than 235 cases. The 
 treaty was, it is true, to be submitted to the Parliament, but 
 
COMMERCIAL POLICY OF SWEDEN 47 
 
 it nevertheless went into effect immediately, a circumstance 
 which aroused extreme disapproval on the part of that body. 
 It had been hoped that a shipping agreement might be secured 
 in exchange for a duty reduction of about 500,000 kroner. 
 It soon appeared, however, that the treaty as drawn reduced 
 customs receipts by 2,600,000 kroner. Under ordinary 
 circumstances, the reproaches to which the Government 
 would have had to listen for all this would have been both 
 numerous and sharp ; at this time, however, criticism of the 
 action of the Government was blunted by a diversion of 
 the popular interest to another matter. Upon that session 
 of the ParUament devolved the task of finally deciding the 
 question of a reconstruction of the national system of repre- 
 sentation, a question which, after long travail, had finally 
 reached sin acceptable solution. The Government, which 
 had laboiired diligently to this end, was rewarded with great 
 popularity and was consequently able to bear with unconcern 
 the criticism directed toward it from various quarters in 
 regard to the treaty question, particularly as the matter was 
 settled and not subject to change. 
 
 Norway and Sweden received in compensation for all these 
 duty reductions the long-sought-for shipping agreement. 
 Yet the treaty placed the vessels of the united countries by 
 no means on an equahty with the French, but provided only 
 that Swedish and Norwegian vessels in French harbours to 
 which they had proceeded directly, should be treated, with 
 respect to the discharge of the cargo, as French vessels were 
 treated in Sweden, which, indeed, was as domestically owned 
 ships. By the French law of May 19, 1866, however, the 
 vessels of all nations were put on an equahty with those of 
 France. In regard to the tariff, France in turn granted 
 many reductions in duties, especially on metal and wooden 
 goods, as well as on fish, meats, and cheese. But only actual 
 raw materials and certain kinds of fresh food products were 
 made duty free ; all other important articles continued to 
 be taxed. It will be seen that this agreement gives occasion 
 
48 INDUSTRIAL DEVELOPMENT AND 
 
 to admire rather the French diplomacy than the free trade 
 sentiments of the time. 
 
 From an economic view-point the following decade was 
 unusually favourable to Sweden. Harvests were bounteous 
 and export relations in the world market were satisfactory. 
 This flourishing development was attributed by friends of 
 free trade to the Hberal conamercial poUcy, though in fact 
 it had its roots in the favourable economic conditions of 
 the time. 
 
 In the years 1868-9, and especially from 1870 to 1874, 
 occurred a succession of reductions and even aboHtions of 
 various duties, and the free trade party gradually gained 
 ground. The promulgation of the Inter-Dominion Law of 
 May 29, 1874, which effected a final settlement of the trade 
 regulations between the countries of the union, is also to be 
 explained chiefly by the free trade tendency. The guiding 
 principles of the law were the following : ' A reciprocal 
 exemption from duties of all domestic products, with the 
 exception of sugar, sugar manufactures, spirits, and malt 
 liquors, coffee, and playing-cards, on which articles full 
 duties were to be levied.' FuU duties were also appHcable to 
 all foreign goods, whether shipped by sea or overland. It 
 was assumed that the tariff systems of both countries would 
 approach nearer and nearer together through the continued 
 application of the principles of free trade in each, an assump- 
 tion the erroneous character of which was to prove fatal to 
 the Inter-Dominion Law. Thus, for example, so long as 
 differences existed in the systems of the two countries, an 
 industry could easily be founded in one which, by working 
 up half-manufactured materials from abroad, could profit 
 at the expense of the other country by means of the difference 
 in duty ; and in fact it was not long before this condition 
 was realized. With the exception of the above provisions, 
 each of the united countries retained complete autonomy in 
 regard to its customs tariff. 
 
 Meanwhile the movement toward free trade was to come 
 
COMMERCIAL POLICY OF SWEDEN 49 
 
 to an end in Sweden also. It reached its culmination in two 
 Bills privately introduced in the Parliament in 1875. The 
 object of these was, among other things, nothing less than 
 to make entirely free the majority of consumption goods and 
 a great number of articles for use in manufactures, and to 
 cancel all duties whose net product for the treasury fell 
 short of a specified amount. The ParUament, however, 
 showed itself little incHned to pass these BiUs even in a 
 strongly modified form. It was considered sufficient to 
 remove the duty on some individual articles and to reduce 
 it in the case of others. The majority, though quite friendly 
 to the theory of free trade, yet hesitated to take the last 
 step and definitely abandon the protective principle. Men 
 already felt that new times were approaching and were 
 inclined to be cautious. Even the Government, which now 
 took matters in hand with a view to carrying the free trade 
 movement to complete success, was defeated in its attempt ; 
 a Government Bill, which was introduced in the Parliament 
 in 1877, reducing the tariff, especially for the paper industry, 
 was rejected. The ground-swell of the new movement in 
 European tariff policy had reached the country, and the 
 decisive step in the direction of complete free trade for Sweden 
 was destined not to be taken. The time was not yet. Many 
 indications already pointed to the fact that the period of 
 prosperity was drawing to a close and the paper industry in 
 particular had come to feel that this was true. In the tariff 
 policy of the world a strongly egoistic attitude was on the 
 point of becoming dominant, and the approaching struggle 
 aroused a feeling of insecurity among the weak in the face 
 of competition with countries of greater wealth and superior 
 economic advantages. 
 
 Sweden now possessed thriving manufactures which would 
 not surrender without a struggle. But, however difficult it 
 would have been for the industries of the time to maintain 
 themselves against an aggressive foreign competition, in- 
 dustrial opinion in the country was stiU too weak to carry 
 
 1669-lD D 
 
50 INDUSTRIAL DEVELOPMENT AND 
 
 through, unaided, a change in the tariff poUcy. The decisive 
 factor in Sweden as in other countries was to be the fact 
 that agriculture also came to suffer under the pressure of 
 new conditions, i. e, from oversea competition ; thus it came 
 about that the country and the towns united in the desire 
 to meet the difficulties of the period by increased protection 
 of the national industries. 
 
 Another problem which had an intimate bearing upon the 
 movement for developing the means of supporting the 
 national population had been pushing itself irresistibly into 
 the foreground ; this was the problem of emigration. Prior 
 to 1860, emigration had hardly made itself felt in Sweden ; 
 from 1861 to 1865 the average annual number of emigrants 
 was about 4,000. From 1866 to 1870, however, the average 
 was 20,000. In the period of prosperity at the beginning 
 of the 'seventies the yearly average fell back to about 
 13,000 ; but in the latter half of the 'seventies it rose again 
 to 20,000 ; at the beginning of the 'eighties it was 35,000, 
 and in the latter half of the 'eighties, culminated with over 
 40,000 emigrants per year. These numbers were so large in 
 proportion to the population of the country that they 
 naturally aroused apprehension. The population of the 
 country had increased during this period from 3,800,000 in 
 1860 to 4,500,000 in 1880. In the same period the various 
 branches of Swedish industry had made notable growth. In 
 agriculture a high point was reached in grain exportation. 
 From 1860 to 1880 the annual surplus of the harvests over 
 and above domestic consumption averaged 100,000 metric 
 tons. The importation of wheat, which later became con- 
 siderable, was still small, and the same was true of the 
 importation of rye. The export surplus of oats on the other 
 hand was very large and was estimated in the 'sixties at 
 140,000 metric tons annually, and in the 'seventies at 250,000. 
 As was natural, the development of stock-breeding was 
 hindered by the enormous grain production. The number 
 of animals increased from 1850 to 1870 by only 200,000 
 
COMMERCIAL POLICY OF SWEDEN 51 
 
 head, reaching a total in the last-named year of 2,600,000 
 head. Nevertheless, the exportation of butter and of live- 
 stock increased constantly, and great efforts were put forth 
 to encourage the development of stock-breeding. The exten- 
 sive growth of agriculture led also to the establishment of 
 a considerable industry in the field of agricultural machinery 
 and implements. This industry was later able to compete 
 successfully with agricultural machinery imported from 
 abroad, especially from America, and even came to export 
 a considerable surplus. 
 
 In the 'sixties and 'seventies, dairying showed most rapid 
 development and became one of the most important sources 
 of income for the farmer. It was the same industry also 
 which gave rise to the establishment of agricultural machinery 
 manufacture, already referred to, and the invention of the 
 centrifugal separator by Gustav de Laval, in 1878, contributed 
 largely to its development. At the same time marked pro- 
 gress in agriculture, both in theory and in practice, was 
 attained through the work of agricultural schools and 
 institutes. 
 
 Forestry, the second great natural source of wealth in 
 Sweden, had hkewise flourished. Approximately haK the 
 area of Sweden is wooded, and of this, large tracts are the 
 property of the Crown. In 1880 the State forests covered 
 approximately 5,500,000 hectares. The ' liberal ' forest 
 policy previously mentioned, which at the opening of the 
 century had led to the free gift or sale at a low price of 
 extensive sections of the State forests, was displaced about 
 1860 by new principles. The Government now put forth 
 every effort to extend its forest properties as far as possible, 
 with the result that the Crown forests proper increased 
 from 500,000 hectares in 1870 to 2,300,000 in 1880 (besides 
 which there were 3,200,000 hectares of other State forests). 
 At the close of the eighteenth century the Government had, 
 with the object of encouraging the lumbering industry in 
 Norrland, granted certain lumber mflls the right to use 
 
 D2 
 
52 INDUSTRIAL DEVELOPMENT AND 
 
 timber from the Crown forests on payment of a certain fee. 
 It later developed that these concessions carried with them 
 an unreasonable advantage for the saw-mUls in question, 
 and the State abandoned the system. 
 
 In addition to the State forests, there are others belonging 
 to the communes. Yet the greater part of aU the forests 
 of Sweden (about 22,000,000 hectares) are privately owned, 
 and the legislation with regard to the utiUzation of these 
 was naturally of greater interest than the regulations with 
 respect to public domains. Private forestry is important 
 for the whole country, and it is not strange that the State 
 should make it an object of regulation. Legislation in this 
 field has varied in the past three hundred years between 
 complete freedom from restriction in forest management at 
 first and later strict control by the State, only to swing back 
 in the first half of the nineteenth century to almost com- 
 plete freedom. At the period now under consideration 
 a new reaction set in, and many restrictions were placed on 
 the rights of private owners. The change is most easily 
 followed in the great forest exploitation district of Norrland, 
 where wild speculation had operated to the serious detri- 
 ment of the forests. In 1866 a strict control of timber- 
 cutting was introduced in this region, and in 1873 similar 
 regulations were made applicable to other wooded districts 
 of northern Sweden. As yet, however, the private forests 
 brought under legislative control constituted but a small 
 fraction of those of the country, most of which still enjoyed 
 complete freedom. 
 
 The conunercial treaty with France was of the greatest 
 importance for the lumber industry, as Swedish timber 
 products were freed from the old customs duties and 
 exports rose with a bound. Progress was particularly steady 
 in Norrland, resulting in a notable movement of population 
 to that section from the rest of the country, but extensive 
 speculation also followed, as mentioned above. As long as 
 the price of lumber was rising, all went well, but in 1874 
 
COMMERCIAL POLICY OF SWEDEN 53 
 
 came the turning-point, when the foreign market failed. 
 At the close of the 'seventies, prices of timber products 
 were falling with fearful rapidity, and a general crash in 
 the lumber industry resulted. The exportation of wood 
 products had increased threefold from 1860 to 1875, reach- 
 ing in the latter year the value of 100,000,000 kroner, in 
 round numbers, or forty- seven per cent of the total exports 
 of the country. At the same time, the movement for develop- 
 ing wooden manufactures for export went forward, and the 
 industries producing finished wooden products grew steadily. 
 Enormous saw-miUs and factories for making various wooden 
 articles were built, and existing establishments were enlarged. 
 Of the greatest importance for the timber industry also was 
 the introduction of cellulose manufacture (see below). 
 
 In the field of mining, the output of the iron-mines in- 
 creased to about three-fourths of a million tons at the close 
 of the 'seventies. Mining and mineral production were not 
 subjected to regulation by the Government. Pig-iron pro- 
 duction rose at the close of the 'eighties to 400,000 tons, 
 and at the same time the production of steel began to increase 
 rapidly. 
 
 At the close of the 'seventies there were in Sweden approxi- 
 mately 2,800 factories, with 60,000 employees, and an annual 
 production of the value of 150,000,000 kroner. In view of 
 the lack of a native fuel supply, the cheap water-power of 
 the country played an important role in many industries, 
 and the modern efficient turbines which were introduced at 
 this time increased the significance of water-power. Among 
 industries which became especially important at this period 
 should be named the newly-established sugar manufacture, 
 and in particular the wood-pulp industry. The first cellulose 
 factory was established at TroHhattan in 1857, and the 
 sulphite method, introduced soon afterwards, assured a great 
 future for this industry, which has become typically Scandi- 
 navian. By the beginning of the 'seventies, there were 
 19 wood-pulp factories in Sweden, employing 900 men, and 
 
54 INDUSTRIAL DEVELOPMENT AND 
 
 exporting products to the value of 1,000,000 kroner; in 
 1880 the value had increased to 2,000,000 kroner, and it 
 has since risen still higher. 
 
 At the beginning of the 'seventies, the match manufacture 
 already employed 3,500 people in thirty factories, and the 
 value of the product was 4,400,000 kroner, of which 3,600,000 
 represented exports. At the beginning of the 'eighties the 
 number of workmen had grown to 4,900, and the value of 
 the exported product to 8,300,000 kroner. Matches were 
 exported principally via Hamburg and London, from which 
 points they were distributed over the entire world. 
 
 The manufacture of paper had at the close of the 'sixties 
 employed 1,800 persons in sixty-three mills, with a product 
 valued at 4,000,000 kroner. Ten years later, forty-one 
 miUs were employing about 3,000 persons, and turning out 
 8,000,000 kroner in product. About half of this amount 
 was exported, and Swedish paper was already widely and 
 favourably known. 
 
 The manufacture of cement was started in these years, 
 and brick-yards made an extremely rapid growth. Super- 
 phosphate production also was begun in 1871, and has since 
 been greatly extended. Among the other chemical indus- 
 tries, the manufacture of explosives should be named. The 
 dynamite factory founded by Nobel in 1864 is the oldest in 
 the world. The great metal and machine works Hkewise 
 developed considerably at this period, and progressed more 
 and more toward a t3rpical special manufacture. Among 
 the new establishments in this branch of production should 
 be named the A-G Separator and Atlas Machine Factories, 
 also the great iron-works, ' Domnarfvet ', in Dalarne, which 
 is at present the most considerable in Sweden ; the Sand- 
 vikens iron-works, &c. This industry made especially rapid 
 strides in the decade of the 'seventies, when it employed 
 a considerable amount of foreign capital. At the close of 
 the decade a disastrous reaction set in, and many plants 
 were forced to cease operations. 
 
COMMERCIAL POLICY OF SWEDEN 55 
 
 The Swedish foreign trade became thoroughly modernized 
 during the years from 1850 to 1870. Formerly, Sweden 
 had lain outside the stream of the world's trade ; after that 
 time modern means of transportation came into use, and 
 a surprising leap marked the transition between the periods 
 1866 to 1870 and 1871 to 1875. In the first period the 
 total foreign commerce amounted to 260,000,000 kroner, 
 while in the second it was 450,000,000 kroner, or nearly 
 seventy-five per cent greater. The most important foreign 
 trade was carried on with England, Germany, and Denmark. 
 About fifty per cent of the total exports went to England, 
 and about thirty per cent of the total imports came from 
 the same country. To Germany went only seven per cent 
 of the total exports, but twenty-three per cent of the imports 
 came from Germany. Denmark received about ten per cent 
 of the total exports, and sent about eighteen per cent of 
 the imports. 
 
 The edict of June 18, 1864, establishing complete industrial 
 freedom, naturally stimulated the growth of shipping, and 
 the number of both sailing and steam vessels increased 
 steadily. In 1860, Sweden had 3,200 ships; sailing ships 
 with a total tonnage of 270,000, and steamships totalling 
 12,000. Twenty years later, or in 1880, the number had 
 increased to 4,300, the tonnage of sailing vessels to 460,000, 
 and that of steamships to 91,000 tons. Canals were built 
 or enlarged, and good harbours became common. Railways, 
 especially, were extended by gigantic strides, as shown in 
 the table. 
 
 Swedish Railways 
 
 Year. Length of railway 
 
 lines in kilometres. 
 
 i860 507 
 
 1870 1,700 
 
 1875 3>6oo 
 
 1880 ........ 5,900 
 
 A third of the lines were State-owned. Rapid means of 
 communication were bound to be of special importance for 
 
56 INDUSTRIAL DEVELOPMENT AND 
 
 a country like Sweden, with its great geographical extension 
 and sparse and widely- scattered population. 
 
 Under the pressure of the hard times, Bills of a protec- 
 tionist character were introduced into the Parliament at the 
 close of the 'seventies. Among the proposed new duties 
 were, for example, those on bacon, maize, flour, grains, &c. 
 These proposals, it is true, led to no results, but they marked 
 the beginning of the great struggle over the commercial 
 policy which was to continue for ten years, and to end 
 with a change in the tariff system in 1888. In the meantime, 
 extreme financial straits forced the Government to seek new 
 sources of income. In order to produce a balance in the 
 Budget, a Bill was introduced raising the rates of various 
 revenue duties. This was so altered by the Parliament that, 
 in its substitution of the metric system for the old basis of 
 specific duties, a general rounding out in an upward direc- 
 tion was effected in many cases, especially on articles of 
 luxury. In addition to thus raising many duties, the Parlia- 
 ment of 1880, after a fierce struggle, imposed a duty on 
 cheese, maize, and hops, and also subjected wheat flour 
 and some other articles to a so-called registration tax. The 
 general uneasiness on the subject of commercial pohcy and 
 growing doubt as to the advantages of free trade, found 
 expression at the same time in an address by the Parhament 
 to the king asking for a systematic exposition of the economic 
 condition of the country based on an investigation of the 
 facts. 
 
 The majority of the Parhament, however, assumed a wait- 
 ing attitude, and the next few years brought no change in 
 the tariff policy. Interest in the question was, in fact, not 
 very widespread, and the general wish in the Parhament 
 was to await the results of the changing conditions in other 
 countries as well as the report of the investigations of the 
 tariff committee which had been appointed. At one time 
 it even seemed as though the protectionist movement was 
 subsiding. At the beginning of the 'eighties, the Parlia- 
 
COMMERCIAL POLICY OF SWEDEN 57 
 
 ment rejected various Bills of a protectionist tendency, and 
 on the initiative of the Government the registration fee on 
 wheat flour mentioned above was abolished. Further, the 
 treaties with France and Spain were renewed in 1882 and 
 1883, though the former was opposed in the second chamber 
 on the ground that it was not desirable to fix the schedules 
 of duties for a period of ten years, as provided in the treaty. 
 Political conditions continued to work in favour of the 
 Government with its inclination to free trade. The agrarian 
 party did not dare to turn against the Government, on 
 whose aid it counted for removiQg the land-tax. 
 
 The new commercial treaty with France was in any case 
 a virtual repetition of the former one. Equahty of treat- 
 ment with French ships was secured for those of Sweden 
 and Norway, which was paid for with quite considerable 
 duty reductions, while those granted in return by France 
 were insignificant. French diplomacy won a second victory, 
 and the real explanation of the fact was again to be sought 
 in the internal political relations of Sweden. The treaty 
 with Spain was important for Norway, because of the reduc- 
 tion in the duty on cured fish, as seventy per cent of the 
 Norwegian exports of the product went to Spain. 
 
 Not untU the second half of the decade of the 'eighties 
 did active discontent in regard to the tariff question make 
 itself felt. The agitation became more and more pronounced ; 
 through the medium of the press it affected the masses of 
 the people, with whom the tariff became from this time on 
 the dominant political question, about which all else revolved. 
 It was, as previously intimated, the economic depression 
 which in these years began to make itself felt in nearly all 
 branches of Swedish industry, that was responsible for the 
 movement in favour of protection. The advantageous indus- 
 trial situation had passed by several years since, but the 
 political influence of manufactures was too limited to enable 
 them to start a successful opposition to the prevailing 
 commercial policy ; opportunity for a stronger opposition 
 
58 INDUSTRIAL DEVELOPMENT AND 
 
 was offered only when the hard times reached agriculture 
 also. 
 
 After 1882 the prices of grain began to fall, beginning 
 with wheat and then extending to rye and all other agri- 
 cultural products. Under these conditions, the agricultural 
 classes, who were not strong enough to endure the hard 
 times permanently, soon showed an inclination to join in 
 the clamour for protection against the importation of Russian 
 and American wheat. On this occasion the fact was of no 
 small significance that the land had been purchased at a time 
 of high prices, and that it now became extremely difficult 
 to make it earn interest on the investment. An additional 
 consideration was the imusuaUy high mortgaged indebted- 
 ness with which Swedish agriculture operated ^ (in which 
 respect it resembles that of Denmark). It sheds Ught on 
 the situation that so heavy a burden of debt, on which 
 interest had to be paid at the rate of from five to six per 
 cent, unquestionably weakened the ability of the landowners 
 to endure any considerable reduction in income. As the 
 crisis which threatened their existence was due to foreign 
 competition, nothing seemed simpler than that they should 
 secure themselves in some degree against that competition 
 by protective duties. 
 
 These conditions and the example of the larger nations 
 were to prove decisive for the Swedish tariff policy. A multi- 
 tude of petitions were introduced into the Parliament, asking 
 for protection on agricultural and manufactured products, 
 while, on the other hand, organizations were formed to 
 combat duties on necessaries. For the protectionist party 
 the national phase of the question was pre-eminent ; their 
 slogan was ' Sweden for the Swedes '. After a long struggle, 
 the protectionists became strong enough in 1887 to carry 
 through the second chamber of the Parliament a Bill pro- 
 viding for a duty on cereals and some other articles. But 
 
 '■ From 1867 to 1887 the mortgaged indebtedness rose to seventy-one 
 per cent of the value of the farms. 
 
COMMERCIAL POLICY OF SWEDEN 59 
 
 when the Bill was rejected by the Upper House the Govern- 
 ment proceeded to dissolve the Parliament, so that the 
 whole question of the future commercial policy could be laid 
 before the electorate for final decision. A monster agitation 
 was now carried on by both sides. But it was due to an 
 accident that the protectionists received a majority at this 
 time, as an error in the conduct of the election led to a falsifica- 
 tion of the result in their favour. The struggle of a year 
 between the protective and free trade systems thus ended 
 in victory for the policy of change, and Sweden entered 
 upon the course of tariff policy she has followed ever since. 
 
 The new tariff of 1888 imposed a duty of 2-5 kroner per 
 100 kilogrammes on rye, wheat, maize, peas, and beans ; of 
 one krone on oats and vetches, three kronen on malt, and 
 four kroner three ore on all kinds of flour and meal. In 
 addition, duties were placed on horses, cattle, sheep, and 
 hogs, and on beef, bacon, butter, &c., and either new 
 duties or an increase in existing ones were made applic- 
 able to the most important manufactured products. Since, 
 however, existing commercial treaties made an increase in 
 many cases impracticable, the ParUament urged the king to 
 appoint a committee charged with the duty of ' reporting 
 on the changes to be worked out in the conditions relating 
 to the customs, which would be necessary in order to afford 
 a reasonable degree of protection to the commerce and 
 industry of the country '. The changes were to be carried 
 out after the expiration of existing tariff agreements. When 
 France herself terminated her treaty with Sweden in 1891, the 
 Parhament was able to put into execution the recommenda- 
 tions of the committee. Among them was the principle 
 that in the future no tariff agreements were to be made. 
 
 With the tariffs of 1888 and 1891, Sweden entered the 
 ranks of the countries in which free trade principles had 
 been forced to give way to protectionism. Although the 
 protectionist doctrine in the modern sense was, as we have 
 seen, by no means old in Sweden, it soon became fixed in 
 
60 INDUSTRIAL DEVELOPMENT AND 
 
 the thought of the people, and we have here probably the 
 best proof that the protectionist poUcy was in some sense 
 the natural one for the country. The Swedish economist, 
 Professor Fahlbeck, is doubtless right in his assertion that 
 protective measures are much more justifiable for countries 
 deficient in capital, and where agriculture is little favoured 
 by nature, even though some of the conditions of a high 
 industrial development are present, than it is for economically 
 strong and wealthy countries. In the first case, economic 
 protection is far more likely to assume a really defensive 
 character, helping the country over the first period of diffi- 
 culties, and thus taking on an educative significance and 
 working in the direction of making itself superfluous, than 
 is true in the case of a permanent protective pohcy in States 
 economically favoured by nature from the beginning as well 
 as plentifully supplied with capital. 
 
 The revolution in the Swedish tariff policy affected the 
 commercial relations of Norway as well. As stated above, 
 the Inter-Dominion Law of 1874 was based on the assump- 
 tion that the inequality of the duties of the two countries 
 might be expected to disappear through the progressive 
 application of free trade principles in both. This assumption 
 now became contrary to the facts. 
 
 The object of the Inter-Dominion Law had been to encour- 
 age a more extensive trade between the two peoples, and 
 at the same time to secure a more effective division of labour 
 and speciaHzation of industry in each. It is not to be denied 
 that the law produced some effect in this direction, perhaps 
 more especially for Norway. But the danger aheady referred 
 to, of advantage being taken of differences in the duties 
 of the two countries, very soon began to arouse dissatisfac- 
 tion. The weak point in the law was the broad interpretation 
 to which the concept of ' domestic manufacture ' was sus- 
 ceptible. Foreign partial manufactures, after having ever 
 so little labour expended upon them in Sweden or in Norway, 
 
COMMERCIAL POLICY OF SWEDEN 61 
 
 thereby became naturalized, and passed into the other 
 country duty-free. For example, uncompleted articles on 
 which the duty was lower in Norway than in Sweden, would 
 be slightly worked over in the former country and sent into 
 the latter as Norwegian goods, when they could be sold 
 cheaper than the corresponding Swedish product. Diffi- 
 culties of this character were necessarily greater in proportion 
 to the amount of difference in the duties on foreign goods 
 coming into the two countries. 
 
 The initiative toward a change in the Inter-Dominion Law 
 in a protectionistic direction was taken in an interpellation 
 on the subject in 1885, and a revision of the law followed. 
 In 1887 a differential duty was placed on clothing made from 
 imported fabrics, corresponding to the difference in duty on 
 the material in the two countries. In addition, certain 
 degrees of further manufacture of imported materials were 
 specified as not entitling goods to classification as domestic 
 products. Since, however, the great change which the 
 whole Swedish system underwent in 1888, and in particular 
 the introduction of many new duties on manufacturers' raw 
 materials, greatly increased the difficulties connected with 
 differences in the duties of the two countries, a thorough- 
 going revision of the Inter-Dominion Law was seen to be 
 urgently needed. On May 30, 1890, a new Inter-Dominion 
 Law was enacted, but it introduced no really new principle 
 into the method of dealing with trade between the two 
 countries, and proved satisfactory to neither of them. 
 Finally, the dissatisfaction with this new arrangement 
 became so great that in 1895 the Swedish Parliament repealed 
 the law. It was intended that a law better adapted to the 
 changed customs relations of the countries should be drawn 
 up on the basis of a discussion by the interested parties. 
 But in spite of the fact that in both countries an Inter- 
 Dominion Law was fully approved of in principle, the dele- 
 gates who were appointed failed to reach an agreement and 
 perfect a new arrangement. The explanation is doubtless 
 

 Trade with 
 
 Imports from 
 
 Period. 
 
 Norway. 
 
 Norway. 
 
 
 Per cent of total. 
 
 Per cent of total. 
 
 1871-5 
 
 4-45 
 
 5-25 
 
 1876-80 
 
 4-44 
 
 5-29 
 
 1881-5 
 
 5-40 
 
 6-46 
 
 1886-90 
 
 7-01 
 
 8-43 
 
 1891-5 
 
 7-20 
 
 8-87 
 
 1896-1900 
 
 4-55 
 
 5-45 
 
 1901-5 
 
 5-24 
 
 4-42 
 
 1906-10 
 
 4-34 
 
 3-50 
 
 62 INDUSTRIAL DEVELOPMENT AND 
 
 to be sought in the strained poUtical relations between the 
 two countries. Thus the law expired on July 1, 1897, without 
 being renewed. 
 
 The followmg table shows the effect of the law on the 
 trade between the two countries : 
 
 Ratio of Swedish-Norwegian to Total Swedish Trade 
 
 Exports to 
 
 Norway. 
 
 Per cent of total, 
 
 3-49 
 3-35 
 4-04 
 
 5-27 
 5-35 
 3-31 
 6-30 
 
 5-38 
 
 Since Sweden changed to protectionism, no departure from 
 that system has been made, the application of protectionist 
 principles having been rather extended by subsequent 
 changes in the duties. We shall later return to a considera- 
 tion of these changes ; for the present, the greatest interest 
 in the past quarter-century centres in the specially vigorous 
 economic development which Sweden has experienced, and 
 which in the last decade has placed her among the great 
 industrial nations. Not only can the development of the 
 country in this respect be followed step by step, but the 
 connexion may also be traced between the progress of industry 
 and that of legislation along what might be called mercan- 
 tilistic lines. The designation would be subject to qualifica- 
 tion, however, to the extent that there is a fundamental 
 distinction between the economic policy of the eighteenth 
 century and that of our day, as the poUcy of the earUer 
 period sought to control material conditions, while to-day 
 the opposite procedure is rather the rule — Cleaving out of 
 account the interference of the State in economics on so- 
 called ' social ' grounds. In this connexion, nationalism has 
 
COMMERCIAL POLICY OF SWEDEN 63 
 
 played a role in Sweden which must not be overlooked, 
 especially since the dissolution of the Union in 1905. 
 Agriculture, it is true, continues to form the leading means 
 of livelihood of the people, about fifty per cent of the popula- 
 tion being engaged in that pursuit (fisheries included),^ but 
 interest still centres predominantly in the development of 
 manufactures. Agriculture, however, is important for manu- 
 facturing progress also, on account of its power to feed the 
 ever-increasing population. While in the 'seventies and 
 'eighties grain formed the principal article of export, animal 
 products have now come to occupy that position. This 
 difference is the result of a corresponding change in agri- 
 culture, which has gone over from grain culture to stock- 
 breeding as its principal object. The following table shows 
 the annual trade in grain products, the numbers representing 
 yearly averages for the periods indicated : 
 
 Annual Trade in Grain Products 
 
 Imports. Earports. 
 
 Period. Million kroner. Per cent Million kroner. Per cent 
 
 of total. of total. 
 
 I87I-5 
 
 20 
 
 8 
 
 37 
 
 i8-o 
 
 1876-80 
 
 32 
 
 12 
 
 39 
 
 19-0 
 
 I88I-5 
 
 42 
 
 13 
 
 29 
 
 12-0 
 
 1886-90 
 
 29 
 
 8 
 
 18 
 
 7-0 
 
 I89I-5 
 
 33 
 
 9 
 
 15 
 
 5-0 
 
 I896-I900 
 
 35 
 
 8 
 
 4 
 
 i-o 
 
 I90I-5 
 
 49 
 
 9 
 
 2 
 
 0-4 
 
 1906-10 
 
 50 
 
 8 
 
 2 
 
 0-3 
 
 In the above table the effect of foreign grain competition 
 in the 'seventies and 'eighties can be plainly traced in the 
 figures for both imports and exports. The following table 
 shows in the same way the imports and exports of animal 
 products. 
 
 * In 1870, the per cent of the population engaged in agriculture and 
 fisheries was seventy-two, in 1880 the proportion had fallen to sixty-one 
 per cent, and in 1899 it was fifty-six per cent. 
 
64 INDUSTRIAL DEVELOPMENT AND 
 
 Annual Trade in Animal Products 
 
 Imports. Exports. 
 
 Period. Million kroner. Percent Million kroner. Percent 
 
 
 
 of total. 
 
 
 of tot 
 
 1871-80 
 
 20 
 
 8 
 
 8 
 
 4 
 
 I88I-5 
 
 21 
 
 7 
 
 19 
 
 8 
 
 1886-90 
 
 17 
 
 5 
 
 41 
 
 15 
 
 I89I-5 
 
 16 
 
 5 
 
 59 
 
 19 
 
 I896-I900 
 
 22 
 
 5 
 
 49 
 
 14 
 
 I90I-IO 
 
 27 
 
 5 
 
 48 
 
 10 
 
 In this class of goods butter is the leading item. In 
 1910 the exportation of butter amounted to 44,000,000 
 kroner, that of salt herring to 8,000,000 kroner, and of 
 bacon 3,000,000 kroner. At the same date the exports of 
 live stock on foot were 9,500,000 kroner, while imports of 
 the same class were 2,300,000 kroner. In the total foreign 
 trade in agricultural products in 1910, there was an excess 
 of imports amounting to about 10,000,000 kroner. 
 
 The area under cultivation was in 1910, 3,600,000 hectares, 
 and the total grain harvest was about 2,600,000 metric tons, 
 exclusive of 800,000 metric tons of sugar-beets. The most 
 important grains are oats, rye, barley, and wheat. The Uve- 
 stock census in 1910 showed 600,000 horses, 1,800,000 cattle, 
 900,000 other large animals ; 1,000,000 sheep and 1,000,000 
 hogs. Dairy husbandry has made much more rapid progress 
 in recent years. In all there are 1,700 dairies, of which 500 
 are co-operative, organized on the model of those introduced 
 into Denmark in the 'nineties. 
 
 Forestry also continues to maintain its place among the 
 most important industries of Sweden. The timbered area 
 amounts to 21,000,000 hectares or fifty -two per cent of the 
 land surface. The yearly cutting is estimated at 30,000,000 
 cubic metres. On the countless streams are floated annually 
 35,000,000 logs. With regard to the forest policy, protective 
 measures against destructive exploitation have been extended. 
 
COMMERCIAL POLICY OF SWEDEN 65 
 
 The Norrland law of 1906 should be especially mentioned, 
 Umiting to some extent the right of corporations to buy up 
 the timber lands of the peasants in the northern part of the 
 country. As the result of such pmrchase of timber land by 
 the great saw-mills, peasant owners of the region were being 
 steadily transformed into poor and dependent leaseholders, 
 a condition which worked to the great disadvantage of agri- 
 culture as well as of forestry itself. In 1901 this condition 
 led to the appointment of the so-called Norrland Committee, 
 and the law was the result of their illuminating report. 
 Later, the law, in common with the other forest-protection 
 regulations (the Dimension-Laws), became the occasion of 
 bitter complaint on the part of the lumbering industry. It 
 was asserted that such regulations crippled the competitive 
 power of the saw-mills in the affected districts and so robbed 
 the forests of their value — ^thus producing a result opposite 
 to that aimed at. 
 
 After the serious depression in the 'seventies and 'eighties, 
 the liunbering industry again worked upward in spite of 
 fluctuating conditions. The value of the exports of timber 
 products in 1910 was about forty-six per cent of the total 
 exports of the country, or 265,000,000 kroner ; that of 
 unmaniifactured timber was, in comparison with this, of 
 quite secondary importance, amounting to only 18,000,000 
 kroner. Thus Sweden has succeeded in building up in this 
 field a very considerable industry in working up raw materials 
 before exportation ; of the greater saw-mills alone there 
 were 1,200 in 1909. 
 
 This encouraging result naturally aroused a wish to 
 follow a similar procedure with another important raw 
 material produced in Sweden, namely, iron ore. It is in 
 fact mining which has been of greatest importance in 
 the economic development of Sweden in the last twenty 
 years. The increase of ore output is shown in the following 
 table : 
 
 1669-10 
 
66 INDUSTRIAL DEVELOPMENT AND 
 
 Millions of tons 
 Period. (Annual Average). 
 
 1871-80 075 
 
 1881-90 0-9 
 
 1891-5 1-5 
 
 1896-1900 2-3 
 
 1905 4-3 
 
 1910 5-5 
 
 This growth has been due especially to the development of 
 fields of enormous extent in Norrboten (Gellivaare, Kiiruna- 
 vaare, and Luossavaare) since the construction of the Lapland 
 railway, and has been effected in part with the aid of foreign 
 capital. Conformably with this development, the exporta- 
 tion of iron ore began in the 'nineties to assume larger 
 proportions. At the beginning of the decade it was 200,000 
 tons yearly ; in 1899, 1,600,000 tons, 1906, 3,600,000 tons, 
 and in 1910 the amount had rieached 4,400,000 tons, with 
 a value of 43,000,000 kroner. 
 
 It wiU be observed that the exportation of iron ore amounts 
 to a considerable part of the total output. Yet the produc- 
 tion of pig iron has also grown, as shown in the following 
 table : 
 
 Pig-Iron Production 
 Period. Tons annually, 
 
 1870-80 345,000 
 
 1881-90 ........ 440,000 
 
 1891-1900 ....... 500,000 
 
 1901-5 528,000 
 
 1910 ........ 600,000 
 
 The same period also shows an increase in the making of 
 steel, which was carried on only to an inconsiderable extent 
 down to the end of the 'eighties. In the 'nineties, the average 
 annual production was 200,000 tons ; for 1901 it was 270,000, 
 for 1905, 370,000, and for 1910, 472,000 tons. It is to be 
 expected that electric methods of smelting will be of the 
 highest importance for the production of both pig iron and 
 steel, as electricity can be cheaply generated by the enormous 
 
COMMERCIAL POLICY OF SWEDEN 67 
 
 water-power of the country and should offset the lack of 
 a native fuel supply. In 1912, several such smelters have 
 been in operation, and the favourable results have given 
 great promise for the future. 
 
 Among other kinds of ore, zinc, silver, lead, pyrites, and 
 others are mined. In 1910, 300,000 tons of coal, worth 
 2,300,000 kroner were marketed. In the same year there 
 were in all, 13,000 workmen employed in mining and 16,000 
 in iron smelters. 
 
 Pohtically, the mining industry has in general enjoyed 
 complete freedom in Sweden, by the terms of a law enacted 
 in 1884. This applies to the more important metals, but 
 not to coal. By the law of August 12, 1910, however, the 
 Government affirmed its prerogative in the region of the 
 State mines in the northern part of the country, and the 
 extent of the area referred to, which moreover is very great, 
 was later specified. In a general way the attention of the 
 country is strongly directed toward the great iron ore-beds, 
 and an effort is being made to bring them under State 
 control. The motive is not entirely financial, but also the 
 desire to be able to restrict the exportation of ore in favour 
 of domestic industries in which it could be utiKzed. It is 
 hoped to prevent a wasteful exploitation from exhausting 
 the ore wealth of the country to the future hurt of its 
 industries. The efforts to assist the growth of Swedish iron- 
 using industries which might compete with those of England, 
 Germany, and Belgiiun — at present the principal consumers 
 of Swedish ore — ^have thus turned to the pohtical method of 
 encouragement as well as to direct aid through the intro- 
 duction of electric smelting and the utilization of water- 
 power already referred to. 
 
 Through tlae regulation of the transportation of ore from 
 the Lapland districts by rail to the shipping ports, the State 
 has had it in its power to control the production to a certain 
 extent. In this way, as well as through the purchase of 
 ore-beds and through the law of 1910, the Government has 
 
 E 2 
 
68 INDUSTRIAL DEVELOPMENT AND 
 
 been able to carry forward its policy of mine-regulation, and 
 various agreements have been concluded with the Granges- 
 berg Company, the leading owners of mines in Lapland.^ 
 By the terms of the contract with this company, the total 
 output for the years 1908-32 is limited to a maximum of 
 75,000,000 tons of ore in the Kiirunavaare and 18,000,000 
 tons in the Gellivaare district ; the State is further recognized 
 as proprietor of a half-interest in the ore-beds, though it 
 comes into the usufruct of its portion only in 1932. After 
 the latter date the State has undisputed title to half the net 
 profit from exportation mth the right to take over the 
 Kiirunavaare beds at a price based on a capitaUzation at 
 four per cent of the average net profit from 1920 to 1929. 
 In addition the companies are bound to reserve for domestic 
 consumption a particularly valuable variety of ore ('A' ore), 
 and further to grant to Swedish producers preferential rights 
 in the purchase of ore. In return, the State is pledged 
 to transport over its railroads in the period of 1908-^2, 
 93,000,000 tons of ore from Kiirunavaare and Gellivaare to 
 the ports of Narvik and Lulea at a reasonable maximum 
 freight charge stipulated in the contract. 
 
 These provisions enable the national treasury to acquire 
 a title to valuable assets and they secure to the people 
 a share in the income from the natural wealth of the country, 
 much of which has hitherto been in the hands of foreigners. 
 These conditions afford a typical illustration of State inter- 
 ference in economic affairs from motives of national protec- 
 tion ; the most striking example of this pohcy on the 
 Scandinavian peninsula is the legislation relating to water- 
 falls (see Norway). 
 
 Of the 29,000,000 tons of iron ore which have been exported 
 from Lapland from 1892 to 1911, seventy-four per cent have 
 gone to Germany, seventeen per cent to England, and seven 
 
 ^ The Grangesberg Company owns or controls most of the Swedish ore 
 mines ; it has a capital stock of 75,000,000 kroner, whose market value in 
 1912 was over 600,000,000 kroner. 
 
COMMERCIAL POLICY OF SWEDEN 69 
 
 per cent to Belgium and France. Besides those in Lapland 
 there are also extensive iron ore districts in central Sweden, 
 which have been utilized for haK a thousand years. These 
 provide principally for domestic needs. 
 
 The development of manufactures proper in the recent 
 period is shown in the following table : 
 
 
 
 
 Value of Products 
 (million kroner). 
 
 Period. 
 
 Factories. 
 
 Employees, 
 
 1881-5 
 
 2,900 
 
 69,000 
 
 185 
 
 1886-90 
 
 3,200 
 
 84,000 
 
 290 
 
 1891-5 
 
 4,200 
 
 117,000 
 
 316 
 
 1896-1900 
 
 9,700 
 
 238,000 
 
 800 
 
 1901-5 
 
 11,400 
 
 271,000 
 
 1,100 
 
 1910 
 
 11,400 
 
 302,000 
 
 1,603 
 
 In the course of the last twenty years the number of factories 
 has trebled, and that of the employees has increased nearly 
 fourfold, while the value of the product has increased over 
 fivefold. The period of 1880-1910 saw the estabhshment in 
 Sweden of large-scale production. The movement has pro- 
 gressed rapidly, particularly in recent years, and concentra- 
 tion of plants and of capital has taken place extensively. 
 Swedish manufacturing is highly organized and to a con- 
 siderable degree controlled by mergers, so that in many 
 branches practical monopoly prevails. 
 
 Among new industries estabhshed in the period under 
 consideration should be named especially that of beet-sugar 
 production from the beginning of the 'eighties, though sugar 
 refineries had existed in Sweden since the eighteenth century. 
 Raw sugar production and refining has grown to be one of 
 the richest and most important branches of manufacture in 
 Sweden ; it has also been of the greatest importance for 
 agriculture, in districts where beets are cultivated, especially 
 the Malmohus district. The production of beet sugar in 
 1910 was 130,000 tons, and that of the refined product 
 122,000 tons, which suppKed the home demand. In technical 
 
70 INDUSTRIAL DEVELOPMENT AND 
 
 respects, the Swedish sugar production occupies a high rank, 
 the yield being sixteen per cent. The factories are united 
 under a great corporation, the greatest in Scandinavia, with 
 a capital of 125,000,000 kroner. Other new industries were 
 rubber manufacture (making rubber shoes), cement factories, 
 chemical and electro-technical industries (machines as well 
 as instruments), and in the years just past, electro-chemical 
 industries, following upon the utiUzation of water-power. 
 
 Among branches of industry aheady estabhshed, machinery 
 manufacture showed an especially vigorous growth, due in 
 no small degree to important inventions. In general, indus- 
 tries based on patents have come to play a very important role, 
 and Sweden offers a fine example of the value to a country 
 of technical skill in the population. This is also connected 
 with the high plane of general culture among the people, 
 which must be regarded as one of the important factors 
 conditioning a high industrial development. Efforts are con- 
 tinuously exerted toward the encouragement of these quahties 
 among the people by means of general and technical education. 
 
 Exports of machinery amounted in 1911 to approxi- 
 mately 41,000,000 kroner. Included in this amount were 
 cream separators, 13,500,000 kroner ; electrical machinery, 
 3,500,000 kroner ; internal combustion engines, 6,200,000 
 kroner ; hydrauhc turbines, 500,000 kroner ; wood- working 
 machinery, &c., 2,500,000 kroner ; match - machinery, 
 500,000 kroner ; agricultural machinery and implements, 
 5,000,000 kroner ; stone, clay, and cement machinery, 
 1,300,000 kroner ; tools, 1,300,000 kroner ; traction engines, 
 600,000 kroner, and steam turbines, 300,000 kroner. Among 
 exports of instruments, especial mention should be made of 
 telephone apparatus to the value of 4,300,000 kroner. Both 
 the cream separator and telephone manvdactures have com- 
 mercial aflfihations over the whole world, and each occupies 
 a commanding position in its field. Such names as de Laval 
 and L. M. Ericsson are written in the world history of modern 
 technology. 
 
COMMERCIAL POLICY OF SWEDEN 
 
 71 
 
 The industrial situation in 1910 is shown in the following 
 tables, which include all branches having an annual product 
 of the value of over 10,000,000 kroner.^ 
 
 Swedish Industries, igio 
 
 Industry. 
 
 Establish- 
 ments. 
 
 Employees. 
 
 Value of 
 Product 
 
 
 
 {million kroner) 
 
 Saw and Planing Mills 
 
 . 1,200 
 
 40,000 
 
 182 
 
 Flour Mills 
 
 1,400 
 
 4,000 
 
 106 
 
 Sugar Factories 
 
 31 
 
 9,000 
 
 105 
 
 Wood-pulp Mills 
 
 160 
 
 13,000 
 
 96 
 
 Iron and Steel Manufactures 
 
 660 
 
 23,000 
 
 94 
 
 Textile Mills . 
 
 160 
 
 17,000 
 
 88 
 
 Machine Shops . 
 
 460 
 
 22,000 
 
 82 
 
 Spinning Mills . 
 
 160 
 
 11,000 
 
 67 
 
 Brandy Distilleries 
 
 160 
 
 1,100 
 
 65 
 
 Paper Mills 
 
 70 
 
 8,000 
 
 54 
 
 Breweries .... 
 
 670 
 
 6,000 
 
 39 
 
 Boot and Shoe Factories . 
 
 87 
 
 7,000 
 
 34 
 
 Tanneries .... 
 
 240 
 
 2,000 
 
 29 
 
 Metal Goods . . . . 
 
 260 
 
 4,000 
 
 27 
 
 Furniture Factories . 
 
 500 
 
 10,000 
 
 27 
 
 Tobacco Factories 
 
 1 10 
 
 5.000 
 
 22 
 
 Oleomargarine Factories 
 
 7 
 
 450 
 
 19 
 
 Electrical Works 
 
 23 
 
 3.300 
 
 19 
 
 Match Factories 
 
 20 
 
 7,000 
 
 17 
 
 Brick and Terra-cotta 
 
 400 
 
 10,000 
 
 16 
 
 Shipyards 
 
 70 
 
 4,100 
 
 13 
 
 Knitting Mills . 
 
 53 
 
 3.200 
 
 12 
 
 Rubber Manufactures 
 
 9 
 
 1,500 
 
 10 
 
 Glass Works 
 
 60 
 
 5.000 
 
 10 
 
 Soap Factories . 
 
 60 
 
 700 
 
 10 
 
 Super-phosphate Production 
 
 6 
 
 600 
 
 10 
 
 "• Swedish industrial statistics go back to 1739, the date when true 
 factory statistics were first established. Reports submitted each year 
 covered the number of employees, the quantity and value of the product, 
 &c. The system was improved in 1802, when the work was placed under 
 the supervision of the Bmeau of Conunerce, and since 1830 the annual 
 reports have been published. In the meantime it has come to be generally 
 understood that much of the information, particularly with reference to 
 amovmt and value of product, was inaccurate, due to want of means of 
 checking. In 1863 a reform was attempted ; the Bureau introduced the 
 
72 
 
 INDUSTRIAL DEVELOPMENT AND 
 
 The total product for the year 1910 was distributed 
 among the principal groups as shown in the following 
 table : 
 
 Manufactured Peoducts by Geoups 
 
 Kind of Factory. 
 
 Food Products, &c. . 
 
 Grain Products, &c. . 
 
 Hides and Furs 
 
 Oil, Rubber, &c. 
 
 Wooden Manufactures 
 
 Paper, &c. 
 
 Stone, Terra-Cotta, Peat, &c. 
 
 Chemical substances . 
 
 Metal Work 
 
 Ships, Wagons, and Machinery 
 
 Graphics .... 
 
 The next table gives the figures for the most important 
 single export industries for 1911, 
 
 Value 
 
 of Product in 
 
 Percentage 
 
 millions of kroner. 
 
 of total. 
 
 ■ 437 
 
 27 
 
 
 209 
 
 13 
 
 
 71 
 
 4 
 
 
 39 
 
 2 
 
 
 334 
 
 21 
 
 
 66 
 
 4 
 
 
 99 
 
 6 
 
 
 37 
 
 2 
 
 
 130 
 
 8 
 
 
 133 
 
 8 
 
 . 
 
 45 
 
 3 
 
 system of report blanks to be filled out by the proprietors of plants and 
 provided with full instructions for this purpose. But the blanks were 
 confusingly drawn up and conclusions based on the reports in consequence 
 largely arbitrary. In 1893 a proposal for another reform of industrial 
 statistics was brought forward, though the system had previously been 
 reorganized on the old lines and fundamentally improved. In 1896 the 
 new system was put in operation. At an earlier date the authorities who 
 were in charge of the collection of the material had undertaken a concentra- 
 tion of the posts ; now the entire work was placed in the hands of the 
 Bureau of Commerce, and fines were imposed for false reports. At the 
 same time the field to be covered by the statistics was distinctly specified, 
 the new form taking effect in 1898. With regard to estimating the value 
 of the product, this is defined as the full market value at the place of 
 manufactiu'e. No inquiries are instituted as to the value of raw or partly 
 manufactured materials used. The new system is characterized by clear- 
 ness and simplicity, the forms are easily filled out and the data consequently 
 definite and easily handled. The great fault of the system is that goods 
 whose manufacture occupies several stages are reported after each new 
 process at their total value. In order to correct this defect special investi- 
 gations are conducted at longer intervals and their results serve to supple- 
 ment the annual industrial reports. See further, Statistiska Komitdens 
 Betdnkande, Stockholm, 1910. 
 
COMMERCIAL POLICY OF SWEDEN 73 
 
 Important Exports, 1911 
 
 A H 1 Value 
 
 {million kroner). 
 Wood Products (including Matches, 12,000,000 
 
 kroner) ....... 265 
 
 Paper, Pasteboard, &c. ..... 32 
 
 Minerals (unmanufactured) : 
 
 Iron Ore, 43,000,000 kroner \ r. 
 
 Other Ores, 15,000,000 kroner! • • • 5 
 
 Minerals (manufactured) ..... 14 
 
 Metals ........ 58 
 
 Metal Manufactures ...... 19 
 
 Machinery, &c. ....... 41 
 
 Miscellaneous Manufactures .... 7 
 
 Manufactures of Tar, Rubber, &c. ... 3 
 
 Of the total of 11,400 manufacturing plants in the country, 
 4,600 with 138,000 employees were located in the cities, and 
 6,800 with 164,000 employees in the country, while the value 
 of the product was divided with 834,000,000 kroner for the 
 cities, and 769,000,000 kroner for the country. Forty-four 
 per cent of the estabhshments were owned by private parties, 
 forty-two per cent by independent companies, thirteen per 
 cent belonged to large corporations, and one per cent to the 
 State or coromunes.^ 
 
 The total mechanical power employed in Swedish manu- 
 facturing industries in 1910 was 811,000 horse-power, of 
 which 500,000 horse-power was hydrauhcaUy generated. 
 The significance of the water-power for the growth of industry 
 has already been mentioned ; in consequence of electro- 
 technical progress in the last few years, it has come to be 
 of the greatest importance for the future industrial develop- 
 
 1 A calculation carried out for the year 1908 places the foreign-owned 
 portion of the total industrial stocks of Sweden at 78,000,000 kroner. Of 
 this sum 20,000,000 kroner were invested in the limiber trade and 
 19,000,000 kroner in mining and water-power companies. On the other 
 hand, the Swedish capital invested in foreign stocks is estimated at a total 
 of 74,000,000 kroner, with 32,000,000 kroner in the telephone busmess, 
 16,000,000 kroner in iron mines, and 17,000,000 in other mining concerns. 
 
74 
 
 INDUSTRIAL DEVELOPMENT AND 
 
 ment of Sweden. It is necessary to the understanding of 
 conditions in countries like Sweden and Norway, with their 
 lack of a coal supply, to consider the important role played by 
 water-power. The power which can be profitably developed 
 from Swedish waterfalls is estimated at approximately 
 5,000,000 horse-power ; of this amount about 600,000 horse- 
 power is at present utihzed. While formerly, as noted, it 
 was principally the saw-mills, flour mills, and iron smelting 
 which profited by the water-power, its greatest importance 
 has come with the development of the electro-chemical and 
 thermo-electric industries, which must be based on cheap 
 power in large supphes. It must, of course, be borne in mind 
 that power is only one of the determining factors in any 
 industry, but it must be an important one in turning the 
 balance against the difficulties which industrial establish- 
 ments necessarily encounter in a mountainous region, thinly 
 populated, and poor in capital. This is especially true in 
 the case of the industries mentioned, in which the power- 
 bill is so important a factor in view of the large quantities 
 employed. In consequence of these conditions the newly- 
 discovered methods appear to afford to both Norway and 
 Sweden the unexpected possibihty of becoming the natural 
 home for such industries, which, moreover, are in their 
 infancy, with possibilities of growth beyond present estima- 
 tion. 
 
 The amount of water-power utilized in Sweden in 1890 
 was 60,000 horse-power ; in 1903 it was 290,000, and in 
 1912 about 600,000 horse-power. The table shows its dis- 
 tribution among the principal industries employing it. 
 
 Utilization of Watee-Power 
 Industry. Horse-power employed. 
 
 Milling Industry 
 
 . 8o,ooo 
 
 Wood-working . 
 
 . 125,000 
 
 Paper-working . 
 
 . 38,000 
 
 Iron and Machinery . 
 
 . 25,000 
 
 Miscellaneous 
 
 . 205,000 
 
COMMERCIAL POLICY OF SWEDEN 75 
 
 About forty-five per cent of the total value-product of 
 Swedish industry is based on water-power ; this figure is 
 the best indication of the importance of the role already 
 played by this factor in the national economy. Of especial 
 interest are the chemical industries, which employed 12,000 
 horse-power in 1904, 18,000 in 1908, 33,000 in 1911, and 
 60,000 in 1913, while the value of their product increased 
 in an equal ratio. Among thermo-electric and electro- 
 chemical industries the most important are electric ore- 
 smelting and steel manufacture and electric nitrogen fixation, 
 manufacture of saltpetre, of artificial fertilizers in general, 
 of carbide, &c. The possibilities offered by the electric 
 smelting process in building up a domestic iron industry 
 were the occasion of the desire of the Government to limit 
 the exportation of ore. 
 
 With regard to governmental water-power poHcy, the 
 general rule may be laid down that with certain restrictions 
 as to navigation, fishing, the floating of timber, &c., the 
 owner of the land is the owner of the waterfalls ; at the 
 same time, the Government has seen fit to exercise its 
 prerogative over certain falls, especially in the northern 
 part of the country. Private ownership has naturally been 
 a great incentive to utilization of the power. But in 1906, 
 the Government put in execution a positive water-power 
 policy, among other things, building large central power- 
 stations. The first of these was at TroUhattan (80,000 
 horse-power), followed by the plant at Porjus, in Norrland 
 (50,000 horse-power). The latter estabhshment is to supply 
 Hght and power for the iron mines in that section, and also 
 ftirnish motive power for the Lapland ore road (Riksgrans- 
 banen), which is to be converted to electric propulsion 
 during 1914. It is further hoped that the power plants 
 may lead to the estabhshment of new industries in the 
 thinly-populated districts of the far north. 
 
 In addition, other power plants and great impounding 
 lakes are already projected, and with a view to the electrifica- 
 
76 INDUSTRIAL DEVELOPMENT AND 
 
 tion of the State railways the Government has bought up 
 a number of waterfalls in southern and central Sweden at 
 a cost of 5,000,000 kroner, 500,000 kroner were expended on 
 experimental plants in this connexion during the years 1905-7, 
 and in the light of the results achieved, it is only a question 
 of time until the roads will go over to electric propulsion. 
 
 In the meantime, as the legal bearings of the waterfall 
 utilization question were much in doubt, a water-rights 
 commission was established in 1906 to draft an up-to-date 
 water-power law. This is now ready, and its adoption is 
 expected in 1914 or 1915. The law will doubtless mean 
 the recognition of private ownership in specified cases and 
 within specified limitations. It is to be hoped that the 
 State wiU not stipulate advantages for itself in privileges, 
 concessions, &c., as has been the case with Norwegian 
 legislation on the subject (see Norway). In this connexion 
 it is not to be forgotten, however, that the Swedish Govern- 
 ment, as previously mentioned, is itself a leading entre- 
 preneur in water-power development, which is not yet 
 (1912) true of the Government of Norway.^ 
 
 While with regard to water-power policy it must be 
 admitted that, in spite of some conflicts between public 
 and private interests, the Government has, on the whole, 
 contributed substantially, in ways both direct and indirect, 
 to the development of the industry, yet the results of State 
 interference in other fields are much more striking. Among 
 other examples should be named the State encouragement 
 in recent years of domestic shipyards as a part of an active 
 and well-planned shipping pohcy. Without this aid the 
 estabUshments would ere this have been forced to succumb 
 to the competition of neighbouring countries. A memoran- 
 dum drawn up by the authorities concerned assumes that 
 
 ^ According to an estimate by the Finance Department (for the year 
 1908) the present value of Swedish waterfalls is 138,000,000 kroner, state- 
 owned sites representing 29,000,000 kroner of this amount and privately 
 owned falls 109,000,000 kroner. 
 
COMMERCIAL POLICY OF SWEDEN 
 
 77 
 
 from 1913 to 1922 State aid to the amount of 13,000,000 
 kroner is to be granted, partly in construction bonuses and 
 partly in the form of contributions toward expense for 
 materials. It is too early to say to what extent the Govern- 
 ment's programme will be adopted, but it is beyond doubt 
 that the time is not far distant when the payment of pre- 
 miums on the building of new ships will be introduced. 
 
 In the field of commerce is astir the same active life and 
 the same spirit of enterprise as in manufactures. The table 
 below shows the development of foreign trade. 
 
 
 Foreign Commerce 
 
 
 Period. 
 
 Average Annual Trade in 1 
 Imports. Exports. 
 
 millions of kroner 
 Total. 
 
 1881-5 . 
 1886-90 
 
 1891-5 • 
 1896-1900 
 
 317 
 335 
 352 
 452 
 
 244 
 273 
 318 
 358 
 
 561 
 608 
 670 
 810 
 
 1901-5 . 
 1906-10 
 
 1 ■ I -I 
 
 533 
 
 645 
 
 n 
 
 410 
 515 
 ■1 
 
 943 
 1,160 
 
 " 1 1 -n 1 
 
 The export trade was principally carried on with England, 
 Germany, Denmark, and France ; the import trade with 
 Germany, England, and Denmark. 
 
 As a step in the general direction of freeing the trade 
 from the exactions of intermediaries (particularly in Germany 
 and Denmark), much work has been done to further the 
 estabhshment of direct shipping connexions with foreign 
 countries, especially those beyond the seas. Hitherto the 
 Swedish merchant fleet has, Hke the Norwegian, pUed 
 principally in the tramp trade, but quite recently fixed 
 steamship routes have been estabhshed to the more important 
 oversea countries, aided by very substantial State subsidies. 
 In addition to the direct annual subsidies, the Government 
 has established a navigation loan fund of 15,000,000 kroner 
 for the assistance of newly-estabhshed routes. The following 
 table of exports to the oversea countries with which direct 
 routes have been estabhshed brings out the growth of this 
 
78 
 
 INDUSTRIAL DEVELOPMENT AND 
 
 trade in consequence of the measures of encouragement. 
 The figures give the value of exports in millions of kroner. 
 
 1905. 
 
 1908. 
 
 1910 
 
 4-5 
 
 3-8 
 
 9-0 
 
 3-2 
 
 3-5 
 
 4-5 
 
 0-7 
 
 0-5 
 
 1-4 
 
 0-6 
 
 2-3 
 
 5-6 
 
 2-7 
 
 5-1 
 
 8-9 
 
 1-7 
 
 3-8 
 
 6-8 
 
 13-4 
 
 ig-o 
 
 36-2 
 
 Exports to Overseas Countries 
 
 _, ^ Value of Exports (millions of kroner). 
 
 Country. 
 
 South Africa 
 East India . 
 China 
 Japan 
 
 Australia . 
 South America 
 
 Total . 
 
 In connexion with the subject of foreign trade, mention 
 should be made of the development of the chamber of 
 commerce in Sweden. There are at present twelve chambers 
 of commerce in the more important cities, while in foreign 
 countries also, Swedish chambers of commerce have been 
 organized, as, for example, in London, New York, and 
 Sydney. In general the country has looked outward for 
 opportunities of increasing its prosperity, at the same time 
 that it has striven for the development of its natural resources 
 at home. The greatest efforts are put forth, not merely to 
 keep fully abreast with every line of progress which appears 
 in the world market, but as well to take every step that 
 may tend to assure the maintenance of an advanced position. 
 These efforts, too, in common with those directed toward 
 the material development of the country, are supported 
 by an unusually aggressive business public opinion, and 
 this seems to have taken on an especially energetic and 
 far-sighted character since the withdrawal of Norway from 
 the former union. 
 
 The vigorous growth of foreign commerce has, of course, 
 been favourable in a high degree to the Swedish merchant 
 fleet. In 1880, the tonnage of sailing vessels reached its 
 culmination with 460,000 tons, against 90,000 of steamships. 
 The displacement of saihng craft in the world's commerce 
 
COMMERCIAL POLICY OF SWEDEN 79 
 
 led, in the decades of the 'eighties and 'nineties, to a stag- 
 nation in the growth of Sweden's merchant fleet as a whole, 
 as the increase in steamships was insufficient to overbalance 
 the rapid decUne in sailing-ship tonnage. After the 'nineties, 
 however, the critical point had been passed in the difficult 
 and costly change from sail to steam navigation. The table 
 below gives the progress of the movement. 
 
 The Swedish Merchant Fleet 
 
 Year. 
 
 Sailing vessels. 
 Tons. 
 
 Steamships. 
 Tons. 
 
 Total. 
 Tons. 
 
 1880 . 
 
 . 461,000 
 
 91,000 
 
 552,000 
 
 1890 . 
 
 . 370,000 
 
 140,000 
 
 510,000 
 
 1895 . 
 
 . 302,000 
 
 i8r,ooo 
 
 483,000 
 
 1900 . 
 
 . 288,000 
 
 325,000 
 
 613,000 
 
 1905 . 
 
 . 263,000 
 
 460,000 
 
 723,000 
 
 1910 . 
 
 . 177,000 
 
 593>ooo 
 
 770,000 
 
 Of corresponding significance for domestic trade is the 
 extension of the railway network. The total length of the 
 railway Unes is 14,000 kilometres, or over 2-5 kilometres 
 per 1,000 of population, which gives Sweden the first rank 
 among European countries. The Hve question in this field 
 at present relates to the projected roads in the northern 
 part of the kingdom (the Inland Railway). This enterprise 
 will open for development vast stretches of forest and great 
 waterfalls, in addition to the fact that there are in the 
 region affected 100,000 hectares of tillable land, only waiting 
 for the hoe and the plough. The canal system also is con- 
 stantly improved and extended ; in particular, a very 
 considerable extension of the TroUhattan canal was decided 
 upon in 1909, by which the inland industrial centres will be 
 made accessible to sea-going vessels. Excellent and modern 
 harbours have Ukewise been laid out, and the law of 1907 
 makes possible the establishment of free ports. It is expected 
 in particular that the free port system will mean much to 
 the cities of Gothenburg and Malmo, especially for their 
 competition with Copenhagen. 
 
80 
 
 INDUSTRIAL DEVELOPMENT AND 
 
 We have already had occasion to emphasize the significance 
 of nationaHsm in the recent economic development of 
 Sweden, A striking expression of this movement is seen in 
 the efforts to favour home industry. Efforts in this direc- 
 tion are manifested in ^ Swedish Weeks ', associations, 
 expositions, national marks for goods and the Uke, while 
 the press is by no means the least important factor in the 
 movement. A substantial result of these endeavours is that 
 the home market for Swedish products has been consider- 
 ably extended in the past few years ; this appKes particularly 
 to textile manufactures and household goods in general. 
 
 All efforts have thus far failed to reduce emigration to 
 inconsiderable proportions. The number of persons emigrat- 
 ing per year for different periods is shown in the table which 
 follows. 
 
 Swedish Emigeation 
 
 Period. 
 
 Average annual 
 
 number of Emigrants. 
 
 1886-90 
 
 40,000 
 
 1891-5 
 
 32,000 
 
 1896-1900 . 
 
 17,000 
 
 1901-5 
 
 29,000 
 
 1906-10 
 
 22,000 
 
 The amount of emigration fluctuates according to economic 
 conditions. Its extent continues to cause uneasiness, and 
 various means are employed to combat it. In 1907 an 
 Emigration Committee was appointed to investigate its 
 causes, and to suggest preventive measures. Up to the 
 present, however, positive results of this work seem not to 
 have been considerable. The fact apparently is that not 
 even the enormous growth of industry has been able to 
 offset the effects of the extreme chmatic disadvantages 
 under which agriculture is carried on, especially in the 
 northern part of the country. The discussion of the ques- 
 tion has at least had the effect, as already mentioned, of 
 arousing the nation to reflection, and in spite of the dark 
 
COMMERCIAL POLICY OF SWEDEN 81 
 
 side of the question it is probably entitled to no small share 
 of the credit for the spirit of earnest work which has been 
 the cause of the great national development. 
 
 In the period which has elapsed since the great change 
 in the tariff system in 1888, there have, as aheady noted, 
 been no considerable alterations made. The later tariff 
 edicts and the laws of 1892, 1895, 1897, 1898, and 1904 
 have been chiefly formal renewals. Of all these, only the 
 law of 1895 carried important provisions ; the duty on 
 grain had been temporarily reduced on account of a short- 
 crop year in 1892, and this measure increased the duty on 
 grain (formerly kroner 2.50) to kroner 3.70, and that on 
 flour (formerly kroner 4.30) to kroner 6.50. Two edicts 
 of 1903 should also be mentioned, raising the duty on spirits 
 and sugar coming from countries with a premium on exporta- 
 tion of those articles. 
 
 An important poUtico-commercial question was solved 
 by the acceptance of the Swedish-German commercial treaty 
 of May 8, 1906. Its significance lay especially in the fact 
 that Sweden entered into a tariff agreement which during 
 the term of the treaty hmited in essential respects her power 
 over customs relations ; such an action marked a complete 
 break with the principles previously followed. At the same 
 time the treaty disposed of one of the most vital economic 
 questions of recent years, that relating to the export duty 
 on iron ore, which Germany had opposed by every means 
 in her power. As compensation for giving up the export 
 duty, Sweden received present security for its stone industry 
 and cabinet work and for its exportation of beer, the pro- 
 duction of which has grown rapidly, and for which Germany 
 has furnished one of the leading markets. In 1906, Sweden 
 also concluded commercial treaties with Russia and Portugal. 
 These, however, were not tariff agreements, but merely 
 the common most-favoured-nation treaties with certain 
 modifications. 
 
 The commercial treaty of 1906 between Sweden and 
 
 1669.10 F 
 
82 INDUSTRIAL DEVELOPMENT OF SWEDEN 
 
 Germany was renewed in 1911, with some changes, and its 
 term extended to 1917. In view of the negotiations for the 
 new treaty, a new tariff law had been enacted in 1910, to 
 take effect on the expiration of the then existing agree- 
 ment. By it the protective features of the tariff were much 
 strengthened, the object being to afford as wide as possible 
 a margin of negotiations for the new treaty. As the new 
 agreement made it necessary for Sweden either to give up 
 or to modify many features of the increases determined 
 upon or to introduce a differential system applying to 
 Germany, it was deemed advisable to revise the newly- 
 enacted tariff before it went into effect. 
 
 The new customs law, which finally took form in 1911, 
 contains many special duties — 1,325 in all^ against 740 in 
 the tariff of 1906 — and is as unmistakably protectionist in 
 tendency as formerly, though, as already mentioned, a signi- 
 ficant reduction from the schedules adopted in 1910 is to 
 be noted in the instances where such changes were involved 
 by the new treaty. It is of great importance that the new 
 law has insured a stability in the duties hitherto vainly 
 sought for in Sweden ; the treaty with Germany largely 
 fixes the permanence of most of the rates for the term of 
 the agreement. In this respect the law marks a great advance 
 over conditions in 1906. The new treaty again guarantees 
 duty-free exportation of iron ore, as this was the principal 
 point in consideration on the German side. In the same 
 connexion, Sweden further binds herself for the term of the 
 treaty to make no change in the agreement between the 
 Government and the mining companies which would limit 
 or hinder the exportation of ore. 
 
III. NORWAY 
 
 In Norway, as in Denmark, with which it was pohtically 
 united down to the year 1814, mercantilistic principles were 
 abandoned at the close of the eighteenth century. The 
 cause was in part the general change in dominant economic 
 opinion which set in at this time, and in part the great 
 prosperity enjoyed by Danish-Norwegian commerce and 
 shipping in the period from 1776 to 1807. 
 
 The customs edict of 1797 (see Denmark) marked for 
 Norway also a decisive break with mercantihsm. This 
 important and, for its time, uniquely liberal regulation had 
 been preceded by still earlier ones, all aiming at a loosening 
 of the bonds which had in so large measure impeded free 
 industrial development. Thus in 1788 was aboUshed the 
 Danish grain monopoly, which gave Denmark exclusive 
 right to supply southern Norway with cereals. Again, in 
 1789 the trade of Finnmarken and Iceland was freed from 
 restrictions, and in 1793 the bonded- warehouse system was 
 introduced; in 1795 the restrictions on timber-cutting, 
 among others, were also abolished, but on the other hand the 
 concession system for saw-mills, for example, was retained, 
 assuring the privileged mills, to a large extent, a local 
 monopoly in return for an annual concession fee to the 
 State. 
 
 The permanent state of war, in which most of Europe 
 and America as well found themselves at the close of the 
 century, naturally placed the commerce and shipping of the 
 few neutral countries in a position to reap enormous harvests. 
 By virtue of the neutrality agreement of the northern 
 powers this situation was profitable, in by no means a negli- 
 gible degree, to the Scandinavian countries (cf. Denmark 
 
 F2 
 
84 INDUSTRIAL DEVELOPMENT AND 
 
 and Sweden). The Norwegian merchant fleet, which in 
 1792 had numbered approximately 860 ships of 110,000 tons, 
 had grown in 1806 to 1,650 ships, and a total tonnage of 
 180,000, At the same time, exports — ^particularly of timber 
 and fish — ^not merely increased in quantity, but the prices 
 received for exported goods also rose rapidly. In 1805 the 
 timber exportation reached its culmination with 1,250,000 
 cubic metres. Under these conditions prosperity was general 
 in Norway, and the towns experienced a flourishing growth. 
 An index of conditions is afforded by the customs receipts, 
 which increased from 460,000 Rix-doUars in 1767 to 1,270,000 
 Rix-doUars in 1806. A considerable manufacturing industry 
 also profited by the situation, as did also mining. The 
 principal branches of the latter to be carried on were copper, 
 silver, and iron mining ; copper and iron smelting were also 
 especially prosperous. 
 
 But this flourishing period came to a sudden termination 
 when Norway and Denmark were drawn into the war by 
 which they had been profiting. First, the war with England 
 broke out in 1807 (see Denmark), and to this was added 
 war with Sweden in 1809. General disaster overtook the 
 country ; the merchant fleet was broken up by the enemy's 
 warships ; business was paralysed ; the oversea connexions 
 — ^the great arteries of Norway's economic life — ^were severed. 
 Property values were wiped out, and aU sources of income 
 were impaired. With the interruption of grain importation, 
 which had amounted to from seven to eight hundred thousand 
 hectohtres annuaUy, actual famine ensued, the domestic 
 grain production being insufficient for the needs of the people. 
 Suffering was especially severe in the year 1809. The situa- 
 tion was the result of various quite natural conditions, 
 climatic and geological, but was particularly attributable 
 to the great extent of the country and its deficient means 
 of communication, which impeded any considerable trade 
 between the grain-producing districts and the country at 
 large. During the war, over 500 Norwegian ships were lost. 
 
COMMERCIAL POLICY OF NORWAY 85 
 
 and great numbers remained as dead capital scattered about 
 in blockaded foreign ports. 
 
 From 1807 to 1814, it is true, the hardships of the situation 
 were somewhat abated by the so-called navigation licences. 
 As England could do without Norwegian timber only with 
 as great inconvenience as Norway suffered through depriva- 
 tion of foreign goods, Norwegian ships were given letters 
 granting safe conduct through the English blockade lines. 
 But neither this circumstance nor privateering, profitable as 
 was the latter, sufficed to reKeve the general poverty. In 
 1812, crop-failure was added to the other misfortunes, and 
 in 1813 the Government declared itself bankrupt (cf. Den- 
 mark). Manufactures, whose growth had been stimidated 
 under the mercantilistic regime by an almost prohibitive 
 protection, special privileges, &c., included, at the end of the 
 eighteenth century, brickyards, oil-mills, sugar refineries, 
 paper-mills, cork, pottery, dye-stuffs, textUe and cannon 
 factories, salt and glass works, &c., and enjoyed considerable 
 prosperity. Now, however, manufactures were obliterated, 
 and almost a generation was to pass before they began to 
 revive. 
 
 It was thus under desperate conditions, economic and 
 financial, that Norway began its history as an independent 
 nation in 1814. The people were reduced to poverty, the 
 great commercial houses of the eighteenth century had gone 
 into bankruptcy, trade relations with foreign countries had 
 been broken off in the long period of the war, and the 
 monetary situation was frightfully disorganized. Conditions 
 improved but slowly after peace was established. The Norges 
 Bank was founded in 1816 to encourage the economic recon- 
 struction, but not untU 1842 did its notes reach par. 
 
 In the field of tariff legislation, a strongly protectionist 
 policy continued to dominate. The country had, it is true, 
 broken with actually prohibitive priaciples, which were 
 definitely abandoned in 1821 ; but a great deal of the old 
 mercantilistic spirit was stiU alive. In the 'twenties and 
 
86 INDUSTRIAL DEVELOPMENT AND 
 
 even in the 'thirties several actual increases were made in 
 the duty rates. The common duty on manufactured goods 
 was thirty per cent ad valorem. But it was soon to become 
 manifest that the ' unprotected ' industries were the ones of 
 future significance for the national economy ; manufactures 
 showed a constant tendency to vegetate, and the same was 
 true of mining which had been overtaken by a noticeable 
 decline. After the middle of the 'twenties, timber exports 
 began again to move upward and soon surpassed in value 
 even the abnormal exportation of the war-years. At the 
 same time exports of fish were increasing rapidly, and in 
 1820, seal and whale fishing were begun in the Arctic seas ; 
 the latter were an important source of wealth for several 
 cities, especially Tonsberg. Along with these movements 
 went a revival of commerce and shipping. 
 
 Under such circumstances the losses in ship material were 
 gradually repaired, and forestry, fisheries, and navigation 
 were seen to be the best and most natural sources of income 
 for the country ; the same state of affairs was to continue 
 for a long time in the future and soon began to have its 
 influence on the Norwegian tariff policy. In regard to 
 forestry regulations, the saw-miU privileges were modified in 
 1818 in that forest owners were granted the right to erect 
 mills which paid no fees, though only for working up specified 
 timber products. In 1835 the tonnage of the merchant fleet 
 again reached the figure of the year 1806 (180,000 tons), and 
 in 1850 it had grown to 300,000 tons, distributed among 
 4,300 vessels. Strong encouragement for the shipping was 
 afforded by the Inter-Dominion Law (Zwischenreichsgesetz) 
 of 1827 with Sweden (see also Sweden), by the terms of 
 which Norwegian ships took over a considerable part of the 
 timber exports from the Swedish Baltic ports. 
 
 These conditions now led to a change in the tenor of the 
 tariff policy, and an encouragement of navigation through 
 commercial treaties was attempted. A committee was ap- 
 pointed in 1839 to prepare for a general tariff reduction. 
 
COMMERCIAL POLICY OF NORWAY 87 
 
 The result of its work was a lowering of the duties on all 
 raw materials together with a smaller reduction in the tax 
 on manufactured goods, the duty on this class of articles 
 being cut to about twenty-five per cent. By the law of 
 1842, practically all trades restrictions were done away with, 
 guild regulations having been already abolished in 1839. 
 
 After about 1850, economic relations in Norway were again 
 on a sound basis. With the English change to free trade, 
 and especially the repeal of the Navigation Act in 1849, new 
 fields were opened for Norwegian commerce and shipping ; 
 a little later the Crimean War brought prosperous times for 
 neutral shipping, from which Norway reaped large profits. 
 Timber exports rose from 600,000 cubic metres in 1845 to 
 1,400,000 cubic metres in 1855 and 2,000,000 in 1865. The 
 absence of forestry regulations was here, as in Sweden, of 
 the greatest significance for the lumbering industry, which 
 now developed a thriving business in the improvement of 
 timber products, and indeed for the whole wood trade. 
 Complete freedom in this field was established with the 
 repeal of the last restrictions in 1836. In the same direction 
 tended the extensive sale of the State forests at this period, 
 and also the sale of the communal forests {Bygdealmenning- 
 erne), following the law of 1848. The utilization of the 
 forests was now entirely unrestricted until in the second half 
 of the century, when it again became necessary to protect 
 them against wasteful exploitation. By laws enacted in 
 1854, the last remnant of the sawing privileges was repealed. 
 The system had been introduced, it should be stated, not 
 merely on fiscal grounds but for the purpose of conserving 
 the forests and maintaining the quality of the export product. 
 It had now become an obstacle to the free development of 
 the timber industries, and was forced to succumb to the new 
 liberal economic tendencies. 
 
 We now turn to agriculture, which, while not so distinctly 
 the leading industry as in the case of Sweden and Denmark, 
 has yet always played an important role in Norway in 
 
88 INDUSTRIAL DEVELOPMENT AND 
 
 a political way and in the thought of the people, as well as 
 in a purely economic sense. At the period we are discussing 
 it was principally concerned with extending the cultivated 
 area. Thus from 1820 to 1829 about 13,000 hectares of new 
 land were brought under the plough, and from 1845 to 1855 
 about 58,000 hectares were added. Besides grains, potatoes 
 formed the principal crop. The yield in millions of hectolitres 
 for typical years is shown in the table. 
 
 
 Agricultueal Products 
 
 Year. 
 
 Grain {million hi.). 
 
 Potatoes (million hi.). 
 
 1835 
 
 2-1 
 
 377 
 
 1845 
 
 4-1 
 
 5-6 
 
 1855 
 
 5-4 
 
 6-9 
 
 1865 
 
 5-1 
 
 7-5 
 
 The production of grain, however, was not sufficient to 
 supply the needs of the country, and by the middle of the 
 century 1,500,000 hectolitres were annually imported. Graz- 
 ing was also carried on and feed for stock was grown. The 
 number of animals increased notably, especially that of the 
 cattle, of which there were 650,000 head in 1835, 850,000 
 head in 1845, and in 1855, 950,000 ; after 1855 the number 
 remained nearly constant for the rest of the century. By 
 the middle of the century there were 150,000 head of horses, 
 1,500,000 sheep, 350,000 goats, and 100,000 hogs. These 
 numbers also remained remarkably constant during the 
 second half of the century. 
 
 Fisheries likewise developed, and fish exports increased 
 notably, thanks to the opening of many new markets. Nor- 
 wegian cured fish found a sale not only in southern Europe 
 but in South America, the West Indies, and other Catholic 
 regions. 
 
 In spite of high protective duties the financial disorganiza- 
 tion and general poverty which followed the great wars did 
 not, as already noted, afford conditions for the renascence 
 of manufactures. Not until the 'forties and 'fifties did a spirit 
 
COMMERCIAL POLICY OF NORWAY 89 
 
 of enterprise revive in the manufacturing field. Establish- 
 ments of considerable proportions and strong vitality were 
 then founded in the textile industry {Nydalens Fabriker) in 
 machine building {Nyland mek. Vcerhsted, AJcers mek. Vcerk- 
 sted), in spinning, &c. These are to be regarded as marking 
 the real begianing of the extensive manufacturing industry 
 of the country at the present day ; to such a degree had the 
 commercial paralysis at the beginning of the century obli- 
 terated the manufactures established in the mercantilistic 
 period. From this time on, too, as noted above, wood 
 manufacturing proper developed, the products of the forests 
 being exported in a more and more highly improved state. 
 In 1850, this branch employed in all 12,700 persons, of 
 whom 3,700 were in the towns ; in 1860 the numbers had 
 grown to 19,700 and 7,500 respectively. 
 
 Mining resumed its development somewhat earlier than 
 did manufacturing. The Kongsberg sUver fineries in par- 
 ticular were in a flourishing condition by the beginning of 
 the 'thirties, and at the same time the iron smeltries enjoyed 
 a final period of prosperity, their product being in exceptional 
 demand. The production of pig iron was 9,750 tons per 
 year from 1840 to 1850, 9,000 tons from 1850 to 1860, and 
 6,500 tons from 1860 to 1870. The output of ore for the 
 year 1850 was 23,000 tons. The total value of the products 
 of mines and smeltries combined at this period was about 
 1,500,000 kroner annually. 
 
 From 1851 on the free trade tendency began definitely to 
 get the upper hand in Norway. This result followed in part 
 from the great importance of the country's shipping, fisheries, 
 and lumber trade, as sketched above, the value of the timber 
 and fish exports alone being for 1860 nine-tenths of the total 
 exports ; in part also, the dew movement in economic 
 thought spreading outward from England began to make 
 its influence felt. In 1851, 1854, and 1857, successive reduc- 
 tions were made in the duties on cotton goods, metal goods, 
 grain, meat, bacon, &c. In 1858 a new committee was 
 
90 INDUSTRIAL DEVELOPMENT AND 
 
 appointed to revise the tariff, and its deliberations inclined 
 toward the view that the exclusive object of customs duties 
 is to provide revenue for the public treasury. 
 
 Thus a revenue tariff system was inaugurated which was 
 to settle the character of the Norwegian tariff policy until 
 the close of the century. At the same time it was emphasized 
 that transition from the protective to the revenue system 
 was to be effected with caution. The reductions adopted 
 by the Storthing, the Norwegian Parliament, related chiefly 
 to cotton goods, dye-stuffs, metal goods, paper, hides, and 
 various wooden manufactures, while nearly all raw materials 
 were placed on the free list. Simultaneously with these 
 reductions, which carried with them a falling- off in the 
 customs receipts of over a million kroner annually, the rates 
 were increased for numerous other goods, such as coffee, 
 sugar, tobacco, brandy, and petroleum — in short, for the 
 usual revenue articles. 
 
 The introduction of the new system met with no great 
 opposition. The fisheries and shipping, the lumbering and 
 related export industries had no interest in the protective 
 duties, and other industries which may have felt such an 
 interest were stiU too weak to exert effective influence. The 
 interests of the country accordingly centred rather in the 
 question of free entry into foreign markets, and in this con- 
 nexion the commercial treaty with France was significant. 
 This agreement forms a typical example of the concessions 
 granted to foreign countries by Norway as to duties on 
 manufactures in order to secure a market for her own 
 products or new fields for her shipping activities. The 
 economic situation of Norway at that time made it both 
 comprehensible and natural that she should be one of 
 the earliest countries to follow the example of England in 
 going over to free trade principles. 
 
 The commercial treaty of 1865 with France, and later that 
 with Spain, were of even greater significance for Norway 
 than for Sweden. Norwegian shipping had previously suffered 
 
COMMERCIAL POLICY OF NORWAY 91 
 
 much from the unfavourable treatment accorded ships of 
 that nationaUty in French ports, and besides, Norway was 
 deeply interested in the Catholic countries on account of her 
 cured fish exportation. Consequently there was the greatest 
 readiness to grant extensive tariff concessions for the sake 
 of securing a treaty favourable to the shipping. (For details 
 as to the negotiation and conclusion of the treaty, see under 
 Sweden.) 
 
 The number of maximum rates fixed in the treaty was 
 158. The most important reductions effected related to 
 glass, porcelain, paper, pasteboard, leather, confectionery, 
 textiles, and metal goods. Against these, the French con- 
 cessions were the same as those for Sweden. Of especial 
 significance for the Norwegian fish exports was the reduction 
 in the duties on fish, whale-oil, and whalebone. The relief 
 granted to navigation did not after all place it on an equality 
 with that of France ; the longed-for complete equalization 
 was not secured for Swedish-Norwegian ships until 1866, 
 when it followed as a result of the most-favoured-nation 
 treaty of France with Austria. The satisfaction with the 
 treaty in Norway was none the less extraordinarily great, as 
 was not unnatural in view of the fact that it was chiefly 
 Swedish manufactures that had to pay for the advantages 
 obtained for the shipping of the united countries (as already 
 explained in the section on Sweden). 
 
 The succeeding period witnessed further progress in the 
 reduction of the tariff rates, and strenuous efforts were made 
 both to eliminate the protective rates from the treaty and 
 to simplify the latter as much as possible. In Norway, as 
 in Sweden, and perhaps in a still higher degree, the prosperous 
 times contributed to place the adoption of the liberal system 
 in the light of a boon to the country. About the year 1870 
 the following leading articles were placed on the free list — 
 machinery of aU kinds, matches, cork goods, rubber goods, 
 and many iron and steel articles. At the same time new 
 reductions were put in force for great numbers of metal. 
 
92 INDUSTRIAL DEVELOPMENT AND 
 
 textile, and manufactured articles. In addition, the duties 
 on grain and flour were much reduced, and butter was made 
 duty free. 
 
 In 1873 the Norwegian tariff finally received practically 
 the general form which it was to retain without substantial 
 change until 1897. The tendencies finding expression in the 
 tariff were consistently in the direction of free trade. Duties 
 were transferred chiefly to such articles as were not produced 
 competitively by home manufacture. The extent to which 
 this was true is most clearly shown by the proportion of the 
 total customs receipts which was derived from such duties 
 at different dates. In 184!7 such articles had yielded thirty 
 per cent of the total customs revenue, in 1875 they produced 
 fifty-five per cent, and in 1886 fully sixty-six per cent, while 
 in the same period the total itself had doubled. That the 
 process stopped at this point and the system was not trans- 
 formed into one of absolute free trade was not due to any 
 lack of inclination to take such a step, but simply to the 
 fiscal importance of the customs taxes as a source of revenue 
 for the Government. This dependence of the Government 
 upon the customs revenue was a consequence of the aboHtion 
 of the more important direct taxes as far back as 1838. At 
 the close of the 'forties the customs receipts aheady made 
 up seventy-five per cent of the national taxation revenues, 
 and this proportion remained unchanged down to the end 
 of the century. The duties on coffee, tea, sugar, tobacco, 
 and illuminating oil were successively raised until the rates 
 were so high that it was considered unsafe to continue farther 
 the concentration of the State taxes upon these particular 
 articles. Expedients which were practicable in a rich country 
 with a widespread use of luxuries (such as England, for 
 example) required handling with greater care in a poorer 
 country, like Norway, if the system was not to end in 
 failure. 
 
 The new liberal views were also of the greatest importance 
 in carrying through the ' Inter-Dominion Law ' of 1874, 
 
COMMERCIAL POLICY OF NORWAY 93 
 
 which (as stated under Sweden) proceeded on the assumption 
 that progress would continue in the direction of greater and 
 greater commercial freedom. A committee was appoiQted 
 in 1874 to draft a new Inter-Dominion law and also a new 
 treaty with France, and in addition, on the basis of both, 
 to revise the customs schedules. The committee's Bill, sub- 
 mitted the next year, stated as its aim ' to purge the Nor- 
 wegian tariff of every rate which involved the risk of affecting 
 productive relations in a protectionist direction '. The BUI 
 was rejected by the Storthing, however, and opposition to 
 it was quite determined. In Norway, too, it now became 
 evident that conditions were no longer wholly favourable to 
 free trade ideas, though the reaction in legislation presented 
 itself much later here than in other countries. 
 
 The hard times which swept over the country at the close 
 of the 'seventies contributed in a high degree to further the 
 protectionist tendency in manufacturing circles and in the 
 trades. In 1879 a petition was laid before the Storthing 
 from the Artisans' and Manufacturers' Association, asking 
 for protection for domestic industries. In consequence a new 
 tariff commission was appointed, but the majority of the 
 members were favourable to free trade (though only eight 
 against seven), and the result was that the changes proposed 
 were not of a pronounced character. Hence the new tariff 
 law of 1881 was of no great significance for the business of 
 the country. 
 
 The protectionist movement thus called into being was 
 rooted in the development of Norwegian industrial life. The 
 change from sailing vessels to steam navigation, and from 
 a less to a more intensive agriculture, created a need for 
 larger employment of capital. The same was true of the 
 lumbering industry as it grew into an important branch of 
 manufacture, and even of the fisheries with the introduction 
 of modem vessels, appliances, &c. A similar situation 
 appeared in other industries also. But if capital was to be 
 forthcoming for the new industrial developments it was 
 
94 INDUSTRIAL DEVELOPMENT AND 
 
 essential that it should be rendered secure. Hence the wish, 
 and in a sense the necessity, of protection against overwhelm- 
 ing competition from foreign countries. 
 
 The emigration question came to be another important 
 factor in the issue between free trade and protection. Before 
 1850, emigration from Norway had been insignificant. After 
 this time, however, and especially after the American Civil 
 War, it increased by leaps and bounds untU, in 1869, it 
 reached a temporary maximum of 18,000 yearly. In the 
 prosperous years of the 'seventies followed a decrease to 
 approximately 8,000 per year, the minimum being reached 
 in 1877 with 3,200. In the succeeding period of business 
 depression in Norway agriculture and lumbering were 
 seriously affected. One of the consequences of the depression 
 was another ascending movement of emigration, and in 1882 
 the number of emigrants reached 28,800. It goes without 
 sayiQg that such a state of affairs aroused the greatest 
 concern and furnished material for the protectionistic 
 agitation. 
 
 We have previously referred to the important role played 
 by shipping in the economic life of Norway. The large 
 income earned by the ships in foreign freight service was 
 a principal item in the commercial balance-sheet of the 
 country. The following table shows the gross freights earned 
 in typical years : 
 
 Geoss Freight Earnings 
 Year. Million kroner. 
 
 1865 53 
 
 1870 71 
 
 1880 98 
 
 1885 83 
 
 Of the gross freight earnings at least one-half can be credited 
 as net income for the country. The size of the commercial 
 fleet in number of ships and tonnage is given in the table 
 below. 
 
COMMERCIAL POLICY OF NORWAY 95 
 
 
 Merchant Fleet 
 
 
 Year. 
 
 Sailing Ships. 
 Number. Tons. 
 
 Steamships. 
 Number. Tons. 
 
 Total 
 Tonnage. 
 
 1875 
 1885 
 
 1895 
 
 7,600 1,350,000 
 7,150 1,450,000 
 6,300 1,280,000 
 
 218 46,000 
 510 114,000 
 915 320,000 
 
 1,400,000 
 1,600,000 
 1,500,000 
 
 In these decades railroad building likewise made great 
 strides, and the railways and steamship lines, and also new 
 and improved highways, were of the greatest importance for 
 the internal and external business of the country. For 
 timber transportation, too, the streams played and continue 
 to play the same important role as in Sweden. 
 
 The vigorous development of manufactures was shown in 
 the increase in the number of industrial workers from 19,700 
 in 1860 to 33,000 in 1870, but at the close of the 'seventies 
 a reaction set in in this field. In consequence of the change 
 from wood to iron as material for ship construction, the 
 depression was sharpest in wooden-ship building, and thus 
 indirectly in the whole lumber and wood-working industry 
 and timber exportation. Timber exports reached a high 
 point in the years 1870-5 with 2,300,000 cubic metres 
 annually, then fell off in the second half of the decade to 
 1,700,000; they rose again in the 'eighties to 1,900,000 
 cubic metres, at which point they remained until 1905. 
 After the reaction the number of industrial workers did not 
 resume its upward movement until several years had elapsed, 
 reaching 42,000 in 1885. After this time the utilization of 
 the enormous water-power of the country made rapid pro- 
 gress, as turbines came into common use. The influence of 
 this change was especially pronounced in the flour-miUing 
 and lumbering industries and in the newly established wood- 
 pulp manufacture. The exports of wood-pulp and cellulose 
 rose from 8,500 tons, with a value of 700,000 kroner, in 1875 
 to 90,000 tons, worth 5,600,000 kroner, in 1885. Another 
 new industry was the match manufacture, which also rapidly 
 
96 INDUSTRIAL DEVELOPMENT AND 
 
 developed an export trade, as shown in the following 
 table : 
 
 Exports or Matches 
 Period. Annual Exportation 
 
 (million kilogrammes). 
 
 1876-80 1-2 
 
 1881-5 2-9 
 
 1886-90 4-5 
 
 In the 'sixties, the old iron smeltries of Norway, chiefly 
 smaU establishments, were forced to succumb to pressure 
 from large-scale producers abroad, with which they cotild 
 not profitably compete. In the next decade, their average 
 annual production was only 1,500 tons, and in the 'eighties 
 it fell to 700 tons. The exportation of ore similarly fell away, 
 dropping in the 'eighties to 2,000 tons annually and by 1890 
 to the vanishing-point. Up to that time Norway had exported 
 in all 3,500,000 tons of iron ore, of which amount about 
 2,330,000 tons came from the Arendal district. Silver pro- 
 duction also came to a standstill at this period, due in part 
 to large-scale production in oversea lands, and in part to the 
 falhng price of silver, which in turn was partly traceable to 
 the large production, but also in part to the general change 
 from bimetaUism to the gold standard and demonetization 
 of silver in the great nations. In compensation for these 
 decHnes the business of the copper smeltries grew apace and 
 new exports were started, as, for example, those of pyrites 
 and nickel. The last-named soon lost its significance, but 
 the production of pyrites and copper.developed considerably, 
 thanks to the discovery of rich deposits in northern Norway. 
 The largest copper mines were those of Roros and SuUtelma, 
 the latter first opened in the decade of the 'eighties. The 
 value of the output of copper and pyrites was 1,000,000 
 kroner annually in the 'fifties, 2,500,000 kroner at the close 
 of the 'sixties, and by 1875 reached 2,800,000 kroner, at 
 which figure it remained nearly constant until the next great 
 upward movement at the close of the 'nineties. 
 
COMMERCIAL POLICY OF NORWAY 97 
 
 As to the forest policy, there existed as early as 1863 
 various restrictions on the rights of forest owners to dispose 
 of their property at will. Effort was being made to secure 
 a more rational utiHzation of the forests, and the prevention 
 of waste of this great source of national wealth was pro- 
 gressively carried into effect. After the 'sixties the Govern- 
 ment began buying up forests, and during the remainder of 
 the century about 2,000,000 kroner were expended in this 
 way, with the result that approximately 1,600 square kilo- 
 metres of timber land became the property of the State. 
 In addition, other sums were appUed in encouraging private 
 forest culture. Exports of fishery products amounted in the 
 second half of the 'seventies to an average of 43,000,000 
 kroner annually. This amount remained constant until the 
 'nineties, when it rose to 45,000,000 kroner. 
 
 Grain production was about 5,200,000 hectohtres in 1865, 
 about 6,000,000 hectohtres in 1875, and 5,300,000 in 1890, 
 while in the same period the total yield of potatoes increased 
 from 7,500,000 to 8,400,000 hectohtres. As previously stated, 
 the numbers of Uve stock did not materially change after 
 the year 1850. As a result of the stationary position of 
 grain production, importation of that commodity increased 
 considerably in the second half of the century. Imports for 
 1850 were 1,500,000 hectohtres ; for 1870, 2,500,000 ; and 
 for 1890, 4,500,000. Other agricultural products as well were 
 extensively imported, notably beef and pork. 
 
 The tariff of 1881 already discussed did not bring a final 
 settlement of the question at issue ; continued hard times 
 and the example of other countries every year gave new 
 strength to the movement in favour of protection. The 
 centre of this movement was the Norwegian Association of 
 Manufacturers and Industrial Workers in Christiania. The 
 programme of the organization called for the transfer of 
 duties from articles not produced in the country to those so 
 produced, and it was endorsed by many artisans' associa- 
 tions, labour unions, and municipal authorities. Finally, in 
 
 1569.10 G 
 
98 INDUSTRIAL DEVELOPMENT AND 
 
 1886, the agitation resulted in the appointment of a new 
 committee with instructions to undertake a revision of the 
 tariff. In this committee, as in that of 1878, there were eight 
 advocates of free trade and seven opponents of the same 
 poHcy. The two factions submitted separate reports in 1888. 
 The Government showed itself in substantial agreement with 
 the majority of the committee, but, in view of the depressed 
 condition of agriculture, agreed to a small increase in the 
 duty on wheat (from 22 ore to 1 kr. per 100 kilogrammes) 
 and on wheat flour (to 2.10 kr.). The Government itself 
 proposed a duty of 10 ore per kilogram on butter, which 
 had been on the free list, and one of 4 ore on oleomargarine 
 and fats. On the whole, however, the alterations made in 
 the customs rates at this time amounted to no general or 
 fundamental change in the system, and the same was true 
 of the modifications effected in 1890. At the latter date the 
 duties on coffee and sugar were somewhat reduced. Export 
 duties were gradually abohshed. Not until the middle of 
 the 'nineties, however, was the Storthing induced to appoint 
 a parUamentary commission to work out a tariff with the 
 definite object of affording protection to the industries of 
 the country. The occasion of its action was the negotiations 
 relating to a new Inter-Dominion Law and the repeal of the 
 old measure.^ The change in attitude was brought about 
 by the growth of the protectionist movement, which tended 
 more and more to gain the upper hand and was notably 
 furthered by the certain prospect of the repeal of the Inter- 
 Dominion Law. The growing poUtical tension between the 
 united countries and the strong separatist tendencies in 
 Norway were thus an influence hardly to be overestimated. 
 The latter nation was asserting with increasing vigour her 
 claim to complete poUtical independence and to the economic 
 self-sufficiency pertaining thereto. The nationaUstic tendency 
 has been throughout of the greatest importance in both 
 Norway and Sweden, especially since the separation in 1905, 
 
 1 With regard to the circumstances see also under Sweden. 
 
COMMERCIAL POLICY OF NORWAY 99 
 
 and that with respect not merely to the tariff pohcies of the 
 two countries but to the general character of their business 
 public opinion as well. 
 
 In 1896 a committee of the Storthing declared that, ' inas- 
 much as the present Inter-Dominion Law is to be replaced 
 by the establishment of a customs hne, the claim of Nor- 
 wegian producers for higher protective duties to secure to 
 them the domestic market is undoubtedly asserted with 
 greater emphasis.' The Parliamentary Tariff Commission 
 appointed the same year was thus clearly instructed to 
 draft a frankly protective tariff, and the final step was made 
 aU the more abruptly after the previous period of hesitation. 
 The result of the committee's work was the tariff law of 
 1897, which, following the example of France, enacted dual 
 schedules with maximum and minimum rates, and with 
 a complex speciaUzation of duties. The maximum rates 
 were appKcable to such countries as had no commercial or 
 shipping treaties with Norway, and which treated Norwegian 
 goods or Norwegian ships less favourably than those of 
 other nations ; they were also to be appUed to goods the 
 rates on which had previously been fixed by tariff treaties 
 as soon as the latter expired. But results soon showed that 
 such retributive tariff provisions, or ia fact a maximum- 
 minimum tariff in general, was of httle significance in the 
 hands of a small country. The maximum rates were never 
 appHed in practice, as the effect would have been to the 
 great damage of Norway herself. In consequence, an amend- 
 ment of the law was adopted in 1904, giving the Govern- 
 ment discretionary power in the application or non-applica- 
 tion of the maximum rates. 
 
 Moreover, the new law itself was less protective in character 
 than the committee's draft had been, as it had undergone 
 modification in the Storthing. But the movement had begun, 
 and was not to be thwarted or checked. A Departmental 
 Tariff Committee, appointed in 1903, was instructed to 
 ' continue in the direction marked out in 1897, and propose 
 
 G2 
 
100 INDUSTRIAL DEVELOPMENT AND 
 
 such changes as should afford to domestic products a more 
 adequate tariff protection than had been provided by the 
 previous revision '. 
 
 The efforts to develop the natural resources of the country, 
 with especial reference to the miaeral wealth and the enor- 
 mous power of the waterfalls, assumed a more definite and 
 inteUigent character as it became clear that progress in this 
 direction was abeady taking place, and that further develop- 
 ments were practicable. At the same time, public interest 
 in the economic relations of the country was aroused. It 
 was felt that these relations could be and must be improved, 
 in order, among other reasons, to stem the stiU enormous 
 tide of emigration. In this connexion the unfavourable 
 balance of trade also played an important role ; the excess 
 in value of imports over exports for the period 1876 to 1890 
 had averaged only about 50,000,000 kroner per year, while 
 for the period 1891 to 1895 it was 79,000,000 kroner, and 
 by the years 1896 to 1900 the average reached 120,000,000 
 kroner. Nor was it considered possible that the difference 
 was offset by the earnings of the shipping in foreign service, 
 as this had not increased in corresponding proportions. The 
 gross freight for 1890 was 113,000,000 kroner ; for 1895, 
 93,000,000 kroner, and for 1899, 129,000,000 kroner. This 
 factor received such emphasis at the hands of the Tariff 
 Committee that it may be said to have formed the basis 
 of its whole point of view. The committee drew thence the 
 conclusion, ' that the times demanded in Norway a change 
 to a more rationally administered system of protection as 
 a direct counterpoise against corresponding measures long 
 since enacted by foreign nations '. Yet at the same time 
 the necessity for moderation in connexion with this pro- 
 tectionism was also emphasized. ! 
 
 The committee's Bill contained numerous increases in 
 duties on agricultural products — 60 ore on oats and 50 ore 
 on potatoes per hundred kilogrammes, increases on pork, 
 vegetables, flour, &c. — and also on manufactured articles. 
 
COMMERCIAL POLICY OF NORWAY 101 
 
 specially textiles, leather, hides, various iron and metal 
 lanufactures, &c. The total increase was estimated at over 
 1,000,000 kroner, but at the same time it was proposed to 
 educe the duty on sugar from 20 to 15 ore per kilogramme, 
 rom which it was expected that a tariff loss of 1,700,000 
 :roner would ensue. This reduction met with opposition 
 •n the part of the Government, which also opposed the new 
 luties or increases on potatoes and meats, contending that 
 he needs of the farmers for protection had been fully met 
 n 1897. In addition, the Government advocated con- 
 iderable reductions in the duties on manufactures called 
 or in the Bill. On this occasion, however, the protectionist 
 entiment in the Storthing showed such strength that the 
 Jovernment's Bill was rejected, and that of the committee 
 pas accepted on May 12, 1905, by a vote of 67 to 46. The 
 aw was, it is true, enacted provisionally, but no arrange- 
 nent was made for the reimbursement of any duties paid 
 n case of a future lowering of the rates. In the final Bill, 
 ;oo, the Storthing accepted the Government's provision for 
 etaining the old duty on sugar, though for purely fiscal 
 easons ; on the whole the law, as enacted, resembled the 
 ;ommittee's Bill much more closely than it did that of the 
 jovernment. It went into effect August 8, 1905. 
 
 In Norway as in Sweden, it is not merely the customs 
 elations themselves which are of interest, but to a much 
 greater degree the rapid industrial development, and the 
 neasures that have been taken by the Government to 
 urther and to regulate this progress. In this connexion 
 ;he nationalist-protectionist movement has pushed itself 
 nto the foreground in every field, and nowhere more con- 
 picuously than in water-power legislation. This movement 
 s most intimately connected with the extraordinary impor- 
 ance to the country of the role which foreign capital has 
 ;ome to play in Norway, particularly in the industries most 
 lependent on water-power utilization. 
 
 Agriculture has made relatively little progress in the past 
 
102 
 
 INDUSTRIAL DEVELOPMENT AND 
 
 twenty years, quantitatively viewed, the natural limitations 
 on its expansion in Norway being narrow. Yet a consider- 
 able area of new land has been brought under the plough 
 in that time, and the State has liberally supported the develop- 
 ment of the industry by reclamation works, contributions 
 toward the draining of submerged lands, &c., especially 
 along the Jader. Cheap loans have also been granted to 
 encourage small holdings and the like. At the agricultural 
 census in 1907 the cultivated area was estimated at 4,500 
 square kilometres, in addition to which there were 3,600 
 square kilometres of natural meadows. The census showed 
 the following numbers of live stock : 
 
 Live Stock in 1907 
 
 Animal. 
 
 Number of Head 
 
 Cattle . . . . 
 
 . 1,100,000 
 
 Horses . . . . 
 
 172,000 
 
 Sheep . . . . 
 
 . 1,400,000 
 
 Goats . . . . 
 
 296,000 
 
 Hogs . . . . 
 
 318,000 
 
 Reindeer 
 
 142,000 
 
 The total value of agricultural products between the 
 years 1900 and 1910 rose from 200,000,000 to 220,000,000 
 kroner. In all, thirty per cent of the population are employed 
 in agriculture. Dairying has made most notable progress. 
 In 1895 there were 481 dairies in Norway, while in 1905 the 
 number was 810, chiefly co-operative establishments on the 
 Danish plan. In 1911, butter to the value of 3,300,000 
 kroner was exported, besides condensed milk and cream 
 worth 10,000,000 kroner. As an offset to this was an importa- 
 tion of grain products, amounting to 67,000,000 kroner, and 
 of animal products to the value of 16,000,000 kroner. 
 Another great stimulus to agriculture was afforded by the 
 estabUshment of agricultural schools with pubUc grants, &c. 
 The progress of the co-operative principle has, with the 
 exception of the dairies, been slower in Norwegian agri- 
 
COMMERCIAL POLICY OF NORWAY 103 
 
 culture than, for example, in the Danish, but some co- 
 operative purchasing organizations are active. 
 
 In recent years, forestry has made rapid strides. Twenty- 
 one per cent of the total area of Norway, or 69,000 square 
 kilometres, is wooded. The effort to protect the forests 
 against destructive exploitation and to promote rational 
 forest culture has been energetically pushed. The law of 
 1893 conferred on the communes the right to regulate the 
 utilization of private timber tracts within their borders, 
 and the law was re-enacted in 1908. As soon as a communal 
 ordinance is approved by the king it has the force of law. 
 Such ' forest ordinances ' have been passed in 170 Herreden, 
 or political districts. All are based on the ' dimension 
 principle ', forbidding the cutting for sale or industrial use 
 of trees under a specified size. A law of 1908 further limited 
 the duration of cuttiug contracts in the interest of the 
 forests. 
 
 In 1909 was passed a timber concession law (see below 
 for other such enactments). By this law, foreigners and 
 both Norwegian and foreign corporations, and in part 
 Norwegian citizens, must have a permit from the Govern- 
 ment in order to purchase more than 100 hectares of timber 
 land, though the law specifies that financial considerations 
 shall not be allowed to influence the drawing or granting 
 of such concessions. The law further grants the local govern- 
 ment the right of refusal over timber tracts in case of sales 
 where a permit is required. These regulations set somewhat 
 narrow limits on the former right of free purchase and sale 
 of timber land. They have naturally been the object of 
 much criticism, in common with the other concession laws 
 (cf. below) ; it is contended that such regulations reduce 
 the commercial value of the forests, and work injury to the 
 lumbering industry. 
 
 Of State forests there are in all 8,600 square kilometres, 
 and in 1910 the net income from these was 1,500,000 kroner. 
 In the past few years — also in consequence of the law referred 
 
104 INDUSTRIAL DEVELOPMENT AND 
 
 to — a strong tendency to the purchase of communal forests 
 has become manifest ; of these there are now 120,000 
 hectares. 
 
 After the crucial period through which the lumber trade 
 passed in the 'eighties, exports of such goods again rose, 
 and the proportion exported in manufactured form increased 
 steadily. In the last few years another decrease has taken 
 place, due to the fact that larger and larger quantities of 
 wood are consumed in the manufacture of cellulose and 
 wood-pulp. The yearly exports of wood from 1890 to 1905 
 averaged about 1,900,000 cubic metres, falling by degrees 
 to 1,200,000 cubic metres in 1911. The value of the exports 
 feU from 43,000,000 kroner in 1900 to 34,000,000 kroner in 
 1911. At the same time, exports of cellulose and wood 
 pulp rose from 5,700,000 kroner in 1885, to 15,400,000 in 
 1895, 27,600,000 in 1905, and 40,400,000 in 1911. 
 
 Fisheries also maintain their place among the principal 
 sources of wealth in the country ; modern fishing craft, 
 steamships, and motor-boats, have been purchased in recent 
 years. The public treasury offers cheap credit for the 
 purchase of vessels and equipment. The number of 
 fishermen is about 90,000. Exports of cured and fresh fish 
 amounted to 45,000,000 kroner in 1895, 49,000,000 in 1901, 
 58,000,000 in 1905, 90,000,000 in 1910, and 98,000,000 in 
 1911. 
 
 The canning industry, which is connected with Norwegian 
 fish production, is of large extent and is making rapid pro- 
 gress. The value of exports of canned fish, which reached 
 significant proportions only in the 'nineties, was 2,000,000 
 kroner in 1901, 3,300,000 in 1905, and 15,000,000 in 1911. 
 Norwegian canned fish have successfully engaged in com- 
 petition with French sardines and other such goods. In 
 1905, whaling was forbidden in northern Norway, in the 
 interest of other fishing, but since that time Norwegian 
 initiative in whale fishing has thrown itself with astonish- 
 ing success into other waters of the Arctic and Antarctic 
 
COMMERCIAL POLICY OF NORWAY 
 
 105 
 
 seas and elsewhere. The net earnings of the industry 
 for the country were estimated in 1910 at 15,000,000 
 kroner. 
 
 Manufactures proper have made great advances in which 
 the utilization of the enormous water-power of the country 
 has played an important role. The number of industrial 
 workers (including miners) was 45,000 in 1885, 60,000 in 
 1895, 86,000 in 1905, and 110,000 in 1909. In the 'nineties 
 the country was favoured with a flourishing industrial 
 development, which, however, was terminated by a depres- 
 sion about 1900. After 1904-5, another upward movement 
 could be detected, and this has become more pronounced 
 in the last few years. Among branches which have made 
 the largest growth should be named paper, wood-pulp, and 
 cellulose mills, textile, iron, and metal manufactures, and 
 the chemical and electro-chemical industries. In 1909 the 
 number of actual manufacturing estabhshments was about 
 3,800, and that of their employees about 104,000. The table 
 gives the figures for the more important branches.^ 
 
 Norwegian Manufactures, 1909 
 
 Group. 
 Mining . 
 Stone 
 Metals . 
 Machinery 
 Chemicals 
 Illumination 
 Textile . 
 Paper, Leather, and Rubber 
 Wood Manufactures 
 Food Products 
 
 Establishments. Emjployees. 
 
 40 
 
 5,500 
 
 196 
 
 5,700 
 
 142 
 
 4,700 
 
 270 
 
 19,000 
 
 63 
 
 4,000 
 
 211 
 
 3,400 
 
 215 
 
 11,000 
 
 191 
 
 14,000 
 
 1,000 
 
 15,600 
 
 1,100 
 
 14,500 
 
 The value of exported manufactured products was 44,000,000 
 kroner in 1896, 55,000,000 kroner in 1902, 78,000,000 in 
 
 1 True industrial statistics were first undertaken in Norway in 1909 and 
 their compilation is not yet (1912) complete. 
 
106 
 
 INDUSTRIAL DEVELOPMENT AND 
 
 1906, and 121,000,000 in 1911. The following table gives 
 the value of the principal exports : 
 
 Norwegian Exports, 191 i 
 
 Goods. 
 
 Wood-pulp and Cellulose 
 
 Paper 
 
 Ores 
 
 Carbide 
 
 Zinc 
 
 Aluminium 
 
 Matches 
 
 Cyanide 
 
 Norwegian Saltpetre 
 
 Nitrate 
 
 Nitrite 
 
 Value of Exports 
 (million kroner). 
 
 40-0 
 
 21-0 
 
 lo-o 
 7-0 
 
 3-5 
 3-0 
 
 2-1 
 2-0 
 1-5 
 
 1-4 
 I-I 
 
 The majority of these are entirely new goods in Norway, 
 their production being dependent chiefly on the water- 
 power development. The exports of such products alone 
 (principally of a chemical and electro-chemical character) 
 was in 1911, 29,000,000 kroner. 
 
 The water-power problem ^ is so intimately connected 
 with the recent industrial development of Norway that 
 a discussion of it in some detail may not be out of place 
 here. The utilization of water-power itself in the service 
 of industry is of course nothing novel. Its importance in 
 the lumbering and other industries, particularly after the 
 general introduction of turbines in the 'seventies and 'eighties, 
 has already been mentioned. But in Norway, as in Sweden, 
 it was the successful development of electro-technology at 
 the close of the century, making practicable the transmission 
 of electrical energy over long distances, and especially the 
 rise of the new electro-chemical and electro-metallurgical 
 industries in recent years, which directed serious attention 
 
 1 In regard to the importance of water-power for the Scandinavian 
 Peninsula, see also under Sweden. 
 
COMMERCIAL POLICY OF NORWAY 107 
 
 to the significance of the water-power, and so created new 
 possibilities for the industrial development of Norway. 
 
 The power contained in the waterfalls of Norway, and 
 which may profitably be utilized, is estimated at from five 
 to six milUon horse-power. Of this amount, 600,000 horse- 
 power are already utilized, as against 146,000 horse-power 
 in 1900, and 300,000 in 1907. By way of comparison, it 
 may be noted that the total steam-power used in Norwegian 
 industries is 110,000 horse-power. Measures have been 
 taken toward regulating the use of about 700,000 horse- 
 power, but, in contrast with Sweden, the Norwegian Govern- 
 ment takes almost no direct active part in the utihzation. 
 Aside from the purchase of a single large fall for the purpose 
 of development, it has taken a hand in the waterfall question 
 only by way of legislative control. 
 
 Unfortunately, there are no official data on the waterfalls 
 of Norway similar, for example, to those already given for 
 Sweden, but some figures may be cited. Electric power 
 plants, including both private and pubUc establishments, 
 used in the years indicated the following quantities of 
 power: 1907, 53,000 horse-power; 1908, 163,000 horse- 
 power; 1909, 180,000 horse-power; 1910, about 190,000 
 horse-power. The increase is to be attributed exclusively 
 to the utihzation of water-power. The total power in use 
 in the industries of the country in 1910, the latest year for 
 which figures are available, was about 560,000 horse-power, 
 of which about 110,000 horse-power represented steam, and 
 450,000 horse-power, water-power. The electric plants are 
 not included in the figures, having been omitted to avoid 
 double counting. Further, the statistics do not strictly 
 separate water- and steam-power by industries. Some power- 
 consumption figures for typical ' water-power industries ' 
 are given in tabular form below, but it must be borne in 
 mind that plants generating their own power are not taken 
 into account. 
 
108 INDUSTRIAL DEVELOPMENT AND 
 
 Power in Water-Power Industries 
 
 Industry. Power consumed (horse-power). 
 
 1907. 1908. 1909. 1910. 
 
 Large-scale Electro-chemical 
 
 
 
 
 
 Manufacturing 
 
 . 
 
 . 8,8oo 
 
 40,000 
 
 60,000 
 
 200,000 
 
 Carbide Works 
 
 , 
 
 29,000 
 
 59,000 
 
 57,000 
 
 64,000 
 
 Wood-working 
 
 . 
 
 94,000 
 
 108,000 
 
 113,000 
 
 118,000 
 
 Cellulose Mills 
 
 . 
 
 19,000 
 
 27,000 
 
 30,000 
 
 
 Wood-pulp and Paper 
 
 Mills 
 
 12,000 
 
 19,000 
 
 22,000 
 
 24,000 
 
 Flour Mills . 
 
 
 21,000 
 
 23,000 
 
 23,000 
 
 23,000 
 
 In addition to the above, saw-mills consumed in 1910 
 a total of 55,000 horse-power. Everywhere great progress 
 is manifest, which in the case of the industries under dis- 
 cussion, is undoubtedly to be attributed to the utiHzation 
 of the water-power. 
 
 Water-power is of especial importance in connexion with 
 the development of electro-chemical manufacturing, which 
 has become famous through the great saltpetre factories at 
 Rjukanfoss. By a process which is the invention of the 
 Norwegians Birkeland and Eyde, calcium nitrate is here 
 manufactured from atmospheric air. These gigantic works 
 now use 200,000 horse-power of water-power. The exports 
 of Norwegian nitrate and its derivatives were in 1910, 
 3,700,000 kroner, and in 1911, 6,000,000 kroner, and, accord- 
 ing to estimates, will soon amount to from 12,000,000 to 
 14,000,000 kroner per year. Further, the notable production 
 of carbide, zinc, aluminium, &c., is, as already stated, chiefly 
 based on water-power. The same force has recently made 
 possible in Norway, as in Sweden, the use of electric smelting 
 processes both in extracting iron from the ore and in the 
 manufacture of steel. The electrification of the State rail- 
 ways is likewise projected, and the first step in that direction 
 has already been taken in the transformation from steam 
 to electric propulsion of the stretch from Christiania to 
 Drammen. 
 
 Water-power development has been greatly furthered by 
 
COMMERCIAL POLICY OF NORWAY 109 
 
 the complete freedom of private enterprise in this field ; 
 from 1887 to 1909 the right of private ownership of the 
 faUs was fully recognized in Norway. But about the year 
 1906 decided unrest was manifested with regard to the 
 water-power question. The problem was compUcated ; Nor- 
 way had a large emigration and considerable excess of imports 
 over exports, both of which conditions urgently demanded 
 the development of her natural resources. For this purpose 
 the capital wealth of the country was too small, and foreign 
 capital to a considerable amount had gradually been invested 
 in the Norwegian water-power industry. On the other hand 
 there was the nationahstic side of the question and the 
 natural reluctance to see the wealth of the country in the 
 hands of foreign capitahsts. Moreover, water-power legisla- 
 tion had to take account of the corporation system, and 
 provide against the formation of trusts and monopohzation 
 of the country's water-power. In addition to these con- 
 ditions an out-and-out sociahstic sentiment arose, with 
 insistence on the view that valuable national assets, such as 
 the waterfalls, should belong to society as a whole, and that 
 the nation and the communes should profit by their utihza- 
 tion. After much wrangling a solution of the problem was 
 finally reached in the so-called ' Concession Law ' of Septem- 
 ber 18, 1909. By the terms of this statute only the Norwegian 
 Government, Norwegian communes, or Norwegian citizens 
 are permitted to acquire waterfalls of over 1,000 horse-power 
 without first securing a concession. That is, a concession is 
 required for the purchase of waterfalls by foreigners and by 
 both foreign and Norwegian corporations. The conditions 
 which must be fulfilled to obtain a concession are as follows : 
 (1) It may be stipulated that Norwegian capital is to be 
 granted a share in the development works and that native 
 labour shall be preferred as far as possible. (2) The develop- 
 ment shall be begun within a specified time (five years) after 
 the granting of the concession. This condition, with several 
 others of similar import, is aimed to guard against the 
 
110 INDUSTRIAL DEVELOPMENT AND 
 
 purchase and holding of power sites for speculative purposes 
 by preventing them from lying undeveloped after purchase. 
 (3) The purchaser is further prohibited from entering into 
 any sort of agreement as to the price of electrical energy. 
 By this means it was hoped to prevent price monopolies and 
 combinations. (4) The concessionary is obhged to furnish 
 five per cent of the power to the commune in which the fall 
 is located, at a price fixed within narrow limits, and is further 
 bound to furnish eventually to the general Government 
 another five per cent at the same rate. But the most 
 important condition of all is (5) the time hmit of the con- 
 cession. By this provision the concession is granted only 
 for a period of from sixty to eighty years, after which time 
 the waterfall and all the utihzation works, including finally 
 the power-station and machinery, revert without compensation 
 to the State. Similar regulations, moreover, apply to the 
 sale of electric power in greater quantities than 500 horse- 
 power, and in the case of such sale the concession is subjected 
 to an annual tax of not more than 1-25 kroner per horse- 
 power. 
 
 A later law of August 4, 1911, contains among other pro- 
 visions, corresponding regulations pertaining to the water- 
 courses and designed to secure rational utilization as to 
 raising the water level in lakes, construction of dams, &c. 
 It also subjects concessions to a tax of from 10 ore to 1 krone 
 payable to the commune and an equal amount payable to 
 the State. 
 
 In these laws Norway has embarked on a course closely 
 approaching the privilege pohcy of mercantihsm (cf. earher 
 saw-miU privileges). The system has naturally been criticized 
 on this account in many quarters, and not least by the 
 manufacturers. It has been asserted that such harsh con- 
 ditions, which have been designated as indirect expropriation 
 without compensation, would frighten away foreign capital 
 from the water-power industry to the irreparable damage 
 not merely of manufactures but of the national economy as 
 
COMMERCIAL POLICY OF NORWAY 111 
 
 a whole. The fact is undeniable that the foreign capital 
 invested in recent times in Norwegian undertakings has been 
 of the greatest importance for the striking economic develop- 
 ment of the country and that every branch of industry has 
 profited as a result. On the other hand, the nationalistic 
 phase of the question is not to be overlooked, and the 
 following table, showing the proportion of foreign ownership 
 of Norwegian corporation stocks in 1909, clearly proves that 
 the question of the influence of foreign capital creates a real 
 problem for the country. 
 
 Foreign Capital in Norwegian Corporations, 1909 
 
 Corporation Stocks Owned Abroad. 
 
 Industry. Million kroner. Per cent of total. 
 
 Mining. ..... 
 
 Metal Manufactures 
 
 Chemical Industries including 
 
 Electro-chemical Plants 
 Illumination Industry 
 Paper Manufacturing . 
 
 In all, the foreign-owned portion of the capital stock of 
 Norwegian industrial corporations in the above year was 
 estimated at 115,000,000 kroner, or thirty-eight per cent of 
 the total capitahzation of 300,000,000 kroner. This is a very 
 considerable amount and it has undoubtedly increased since, 
 in no small degree, in consequence of the development of 
 large-scale electro-chemical manufacturing in the past few 
 years. Furthermore, no account has been taken in the above 
 figures of capital borrowed in foreign countries, which is 
 certainly no small amount. 
 
 Concerning the effects of these laws, it is in fact too early 
 as yet to speak positively. They do not seem thus far to 
 have produced the threatened interruption of water-power 
 development ; but it must be added in this connexion that 
 nearly all the great establishments which now arouse interest 
 in the Norwegian water-power industry are based on power- 
 site purchases made before the Concession Law went into 
 
 25-0 
 
 8o-o 
 
 2-3 
 
 32-5 
 
 40-0 
 
 85-0 
 
 lO-O 
 
 47-0 
 
 32-0 
 
 44-0 
 
112 INDUSTRIAL DEVELOPMENT AND 
 
 effect and to which its restrictions do not apply. A further 
 circumstance to be noted is that the share of the communes 
 in water-power development is here, as in Sweden, of great 
 importance. 
 
 Mining has made an especially notable growth in Norway 
 in the last ten years. With respect to iron ore, the output 
 now comes chiefly from deposits in the northern districts 
 which were not known to exist twenty years ago (Sydva- 
 ranger, Dunderlandsdalen, Salangen, &c.). The region is 
 estimated to contain over 350,000,000 tons of iron ore, which, 
 however, is of lower grade than that of Sweden and hence 
 requires considerable working over in order to become avail- 
 able for smelting purposes. The productivity of the mines 
 is thus conditioned on the use of an advanced technique, 
 but this has been to a large extent introduced, or is pro- 
 jected, in the form of magnetic separators and the like. In 
 1910, 2,000,000 tons of Swedish iron ore were exported from 
 the Norwegian port of Narvik. With a view to the estabhsh- 
 ment of a Norwegian iron industry, the Government in its 
 contract with the Swedish mining company reserved refusal 
 rights at Narvik prices over ten per cent of all the ore exported 
 via that port. In central and southern Norway also there 
 are extensive iron ore deposits, estimated at millions of tons. 
 Great hopes are therefore entertained for a rich development 
 of the iron-smelting industry in Norway. During the last 
 few years the value of the ore exports has fluctuated between 
 1,600,000 and 300,000 kroner, but is certain to increase 
 notably in a short time. 
 
 Hitherto, as already mentioned, the production of copper 
 and pyrites has been the most important branch of mining 
 in Norway. The value of the output, which was about 
 3,000,000 kroner at the close of the 'nineties, rose steadily 
 to about 8,000,000 kroner in 1909. In the same year the 
 copper- smeltries turned out a product worth 1,700,000 
 kroner. The total exportation of ores from Norway in 1911 
 was 10,400,000 kroner, exclusive of refined copper to the 
 
COMMERCIAL POLICY OF NORWAY 
 
 113 
 
 value of 1,500,000 kroner. With regard to the mining 
 legislation, the policy of free private enterprise which had 
 obtained before 1909 was brought to an end in that year 
 with the enactment of a concession law. The conditions 
 provided for the granting of concessions in mining were 
 similar to those in the case of waterfall development, and 
 in addition a production tax may be placed on ore to the 
 amount of three per cent of its value. In 1909 the mining 
 industry furnished employment in all to 6,000 persons. 
 
 Norwegian shipping has maintained its place as a sig- 
 nificant factor in the national economy, and this in spite of 
 low freight rates which have worked to the disadvantage 
 of the industry. Its earnings are also an important item in 
 the commercial balance-sheet. The merchant fleet repre- 
 sented in 1900 a total tonnage of 1,500,000, divided between 
 steamships, with 500,000 tons, and sailing vessels, with 
 1,000,000. After that time the total tonnage increased some- 
 what, but later fell back once more until in 1910 the figure 
 was again 1,500,000 tons, now divided between 900,000 for 
 steamships and 600,000 for sailing vessels. The gross freight 
 earned by the shipping in foreign service is shown for different 
 years in the table. 
 
 Freight Earnings of Norwegian Shipping 
 
 Year. 
 
 Gross Freight (ntilli 
 
 1890 
 
 113 
 
 1895 • 
 
 93 
 
 1901 
 
 124 
 
 1905 • 
 
 115 
 
 1909 . 
 
 131 
 
 Formerly the shipping, consisting mainly of sailing craft, was 
 principally employed in the tramp trade ; in recent years, 
 however, regular routes have been established, especially 
 with oversea countries, and these enjoy substantial State 
 subsidies. The total foreign trade is given for the periods 
 indicated in the table below. 
 
 1569-10 
 
114 INDUSTRIAL DEVELOPMENT AND 
 
 Norwegian Foreign Trade 
 
 Average Annual Trade (million kroner). 
 
 Period. Imports. Exports. Excess of Imports. 
 
 1881-5 158 115 43 
 
 1886-90 165 119 46 
 
 1891-5 211 132 79 
 
 1896-1900 281 161 120 
 
 1901-5 295 190 105 
 
 1906-10 384 263 121 
 
 The significance of the sharp increase in the excess of 
 imports after 1890 has aheady been discussed in connexion 
 with the tariff relations of the country. To understand this 
 trade balance it is necessary to take account of the many 
 ' indirect ' sources of income outside of exportation of goods ; 
 such are the earnings of the shipping in the foreign service, 
 of the whale fisheries (see above), and the large and ever- 
 increasing tourist trafiic, the proceeds of which are estimated 
 at approximately 20,000,000 kroner per year. The imports 
 in 1910 were distributed by percentages among the different 
 countries as follows : from Germany, thirty per cent ; 
 England, twenty-four per cent ; Sweden (including transit 
 trade), twelve per cent ; United States, seven per cent ; 
 Russia, six per cent ; Denmark, five per cent. The exports 
 of the same year were similarly distributed as foUows : to 
 England, twenty-nine per cent ; Germany, nineteen per 
 cent ; United States, nine per cent ; Sweden, seven per 
 cent ; Belgium, four per cent ; and France, four per cent. 
 
 Norwegian emigration, which, as already mentioned, 
 reached a high point at the beginning of the 'eighties, 
 decreased with the coming of better times, amounting in the 
 period 1891-5 to 12,000 annually, and from 1896 to 1900 
 to 7,000. The business depression which came at the turn 
 of the century brought with it another increase to 21,000 
 yearly in the period 1901-5. The numbers for subsequent 
 years have been as follows : 1906, 22,000 ; 1907, 22,000 ; 
 1908, 8,000 ; 1909, 16,000 ; 1910, 19,000. The significance 
 of this very considerable emigration in connexion with the 
 
COMMERCIAL POLICY OF NORWAY 115 
 
 endeavour to further the industrial development of the 
 country has already been referred to, and also the narrow 
 bounds which nature has set to the power of agriculture to 
 employ an increasing population. The population of Norway 
 has increased during the last century from 900,000 in 1800 
 to 1,400,000 in 1850, 1,700,000 in 1870, 2,000,000 in 1890, 
 and 2,400,000 in 1910. The total length of railway hues was 
 in 1909 about 8,000 kilometres. Among the newer railway 
 enterprises of especial importance should be named the 
 Bergen-Christiania line, which connects the eastern and 
 western parts of the country. 
 
 The foregoing affords a discussion in dry figures of the 
 economic development of Norway in the last few decades. 
 But figures are after all only figures, and to give a true picture 
 of the economic movements in modern Norway it is necessary 
 to go outside of the realm of figures and include aU factors 
 having significance for the picture. The same movements 
 which have pushed themselves into prominence in Sweden 
 in recent years are met with again in Norway. The national 
 rebirth in 1905 has here had its great significance, greatly 
 strengthening the interest of the people in the material 
 upUft of the country. The working spirit and eager confi- 
 dence which now animate the nation will surely be not 
 without great influence on the economic development of the 
 future. By technical and trade schools the effort is made 
 to increase the industrial efficiency of the populations and 
 Norway has recently founded its first polytechnic institute. 
 With respect to preference for domestic workmanship, the 
 movement has attracted the attention of the entire nation, 
 and many branches of industry owe to it favours at the 
 hands of the State in the form of pubhc contracts, &c. But 
 the Government not only affords to industries such indirect 
 assistance, but direct subsidies are also granted for the 
 establishment of new shipping Unes, such as the Emigration 
 line between Norway and the United States of America and 
 others. In this respect again, Norway offers an example of 
 the ' neo-mercantilistic ' system. 
 
 H 2 
 
INDEX 
 
 Africa, Danish trade with, 12. 
 
 A-G Separator and Atlas Machine 
 Factories, 54. 
 
 American competition, effect of, 
 on the agricultural countries of 
 Europe, 19. 
 
 Arendal district, iron ore from, 96. 
 
 Artisans' and Manufacturers' Asso- 
 ciation, 93. 
 
 AustraUa, Swedish exports to, 78. 
 
 Austria, commercial treaty with 
 Norway and Sweden, 91. 
 
 Baltic, the, 12, 14. 
 
 Belgium : trade with Norway, 114 ; 
 
 Sweden, 67, 69. 
 British North America, English 
 
 trade with, 34. 
 
 Cattegat, the, 12. 
 
 China, Swedish exports to, 78. 
 
 Christiania, 97. 
 
 Commerce, Bureau of (Sweden), 
 71-2. 
 
 Concession laws, 103, 109-11, 113. 
 
 Continental blockade (1809), results 
 of, 13, 33, 34. 
 
 Copenhagen : centre of trade, 11, 12, 
 14, 15, 79 ; china industry, 11, 
 28 ; English attack on, 13 ; es- 
 tablishment of free port at, 30. 
 
 Crimean War, effect of, on neutral 
 shipping, 87. 
 
 Dalarne, iron-works in, 54, 
 
 Dalsland, lumber industry of, 41. 
 
 ' Dansk Arbejde ', 30. 
 
 de Laval, Gustav, 51, 70. 
 
 Denmabk : 
 
 agricultural products : exports, 
 13, 16 ; excess of exports over 
 imports, 21 ; imports, 11 ; 
 value of exports, 22. 
 agricultural reform, 11, 12. 
 agriculture, 11 ff. ; crisis in, 13 ; 
 extensive and intensive, 19, 24, 
 28 ; population engaged in, 
 22 ; state encouragement of, 
 23. 
 
 1S69<10 
 
 Denmark : 
 
 animal products, exportation of, 
 18, 19 ; value of exports, 21 ; 
 excess of exports over imports, 
 ib. 
 
 beet-sugar production, 28. 
 
 beverages, exportation of, 29. 
 
 bonded-warehouse system, 12. 
 
 brandy distilleries, 11. 
 
 buUding trade, employees in, 26. 
 
 butter production, 16, 19 ; ex- 
 portation of, 14, 16, 22 ; value 
 of exports, 21. 
 
 cattle, exportation of, 12, 14, 16, 
 18, 22 ; head of, 16, 19. 
 
 cement manufacture, value of, 27. 
 
 cereal products, excess of imports 
 over exports, 21. 
 
 chemicals, exportation of, 29 ; 
 number of employees engaged 
 in manufacture, 26 ; value of 
 products, 27. 
 
 cloth manufactures, 11. 
 
 coffee-roasting, value of products, 
 27. 
 
 coinage system, 32. 
 
 commerce, 12 ff. ; foreign and 
 transit trade, 30 ; trade with 
 principal nations, ib. ; treaty 
 with Sweden, 38. 
 
 commercial poUcy, 25 ; see also 
 tariff policy. 
 
 confectionery trade, numbers em- 
 ployed in, 26. 
 
 co-operative establishments, 19, 
 20, 22, 64. 
 
 customs of the monarchy, unifi- 
 cation of the, 15, 17 ; customs 
 edict (1797) , 83 ; customs law 
 (1908), 25 ; customs treaties, 
 17 ; see also tariff policy. 
 
 dairy farming, 19 ; co-operative 
 dairies, 22, 64 ; manorial 
 dairies, 16. 
 
 decoratives, employees engaged 
 in manufacture of, 26. 
 
 eggs, exportation of, 20, 22. 
 
 electric cables, value of, 27. 
 
 exportduties,ll, 12 ; abolished,17. 
 
118 
 
 INDEX 
 
 Denmark : 
 
 exports and imports, 11-16, 18, 
 20-2, 29 ; prohibition of ex- 
 ports, 11, 12. 
 
 factories, 17. 
 
 farm implements and tools, manu- 
 facture of, 24, 28. 
 
 farms, size of, 12, 18, 19 ; value 
 of, 23 ; see also small holdings. 
 
 fertilizers, exportation of, 29 ; 
 manufacture of, 28. 
 
 feudal services, abolition of, 12. 
 
 fishing industry, 22, 31. 
 
 flour-mills, 11. 
 
 food products, manufacture of, 
 26, 28 ; value of, 27. 
 
 forestry, 31. 
 
 free trade, 14, 24, 25, 29. 
 
 glass industry, 27. 
 
 grain, duties on, 11 ; exportation 
 of, 12, 14, 15, 16, 18 ; importa- 
 tion of, 20-1 ; monopoly abol- 
 ished, 83 ; prices of, 18, 19 ; 
 production of, 19. 
 
 harvests, value of the, 22. 
 
 ' high schools ', 23. 
 
 hogs, exportation of, 14, 16, 18, 
 
 20, 22 ; number of, 16, 19. 
 horses, exportation of, 14, 16, 18, 
 
 22 ; number of, 16. 
 
 industrial development, 17, 83 ; 
 census, 26 ; employees in 
 various industries, ib. ; ' in- 
 dustrial ' agriculture, 20-1 ; 
 trade schools, 16 ; relative im- 
 portance of industries, 27 ; 
 value of products in special 
 industries, 27. 
 
 iron manufactures, 15, 26 ; ex- 
 portation of, 29. 
 
 labour-saving machinery, 15. 
 
 leather products, number engaged 
 in manufacture of, 26 ; value 
 of, 27. 
 
 letter postage, 32. 
 
 live-stock : exports, 14, 16, 18, 20, 
 
 21, 22 ; head of, 16. 
 loans for farming, 23. 
 local monopolies, 15. 
 machine industry, 28. 
 machinery, value of exports, 29 ; 
 
 of products, 27. 
 manufactures, development of, 
 
 24, 25, 29 ; value of exports, 
 
 29. 
 mercantile doctrines, 11, 12, 83. 
 metal goods, value of, 27. 
 
 Dknmark : 
 
 metal-working industries, 24; em- 
 ployees engaged in, 26 ; value 
 of products, 27. 
 
 middle-men, displacement of, 20. 
 
 milk, exportation of, 21. 
 
 minerals (cements, &c.), exporta- 
 tion of, 29. 
 
 monetary system, 18, 14. 
 
 mortgage credit system, 18, 20, 
 23. 
 
 motor-ships, construction of, 28. 
 
 national banks, 14. 
 
 oU, oil-cakes, &c., exportation of, 
 29. 
 
 oU-meal, production of, 28. 
 
 oil-mills, value of products, 27. 
 
 oleomargarine, manufacture of, 
 
 28 ; value of products, 27. 
 packing industry, 28. 
 
 paper and graphic arts, value of 
 products, 27. 
 
 paper production, employees en- 
 gaged in, 26. 
 
 peasants' farms, 23 ; see also 
 small holdings. 
 
 porcelain, &c., exportation of, 29. 
 
 porcelain works, 11. 
 
 pork trade, 19 ; exports, 21, 22. 
 
 poultry, exportation of, 22. 
 
 protection, 12, 15, 17, 24, 25. 
 
 railways, development of, 24, 31. 
 
 scientfec institutes, 23. 
 
 serfdom, abolition of, 12. 
 
 sheep, exportation of, 18, 22 ; 
 number of, 16. 
 
 shipping, 13, 15, 31 ; tonnage of 
 the merchant fleet, 31. 
 
 ships, exportation of, 29. 
 
 shipyards, 27, 28. 
 
 shoes, manufacture of, 27. 
 
 slaughter-houses, co-operative, 
 20, 22. 
 
 small holdings, 18, 19, 23. 
 
 smuggling, 11. 
 
 stock-raising, 18, 23. 
 
 stone and glass manufacture, em- 
 ployees engaged in, 26 ; value 
 of products, 27. 
 
 sugar production, 11, 24 ; ex- 
 ports, 29 ; value of products, 
 27. 
 
 taimeries, 11. 
 
 tariff policy, 12, 14, 15, 17, 24, 25, 
 
 29 ; schedules, 17, 25, 26. 
 taxes on land, 13. 
 technical education, 28. 
 
INDEX 
 
 119 
 
 Denmabk : 
 
 textile manufactures, 11, 24 ; 
 employees engaged in, 26 ; 
 value of products, 27. 
 timber products, numbers em- 
 ployed, 26 ; value of products, 
 27. 
 tobacco manufacture, value of, 
 
 27. 
 trade with Norway, 114 ; Swe- 
 den, 38, 43, 55, 77. 
 transit duties, 17. 
 war of 1864, 17, 24 ; war with 
 England (1807-14), 13, 84. 
 Departmental Tariff Committee 
 
 (Norway), 99, 100. 
 ' Det Asiatiske Kompagni ', 12. 
 'Det forenede Dampskibsselskab ', 
 
 31. 
 ' Det Owenske Vaerksted ',36. 
 Dimension Laws (forest protection), 
 
 65. 
 Dunderlandsdalen, iron-ore deposits 
 in, 112. 
 
 East Indies, Danish trade with, 12 ; 
 Swedish exports to, 78. 
 
 England : effect of the English free- 
 trade movement on Norwegian 
 commerce, 87, 89, 92 ; naviga- 
 tion policy, 33, 87 ; trade 
 with Denmark, 15, 18, 20, 22, 
 30 ; Norway, 87, 114 ; Sweden, 
 33, 34, 37-9, 55, 67, 68, 77 ; 
 treaty with Sweden, 38 ; war 
 with Denmark and Norway 
 (1807), 84, 85. 
 
 Ericsson, John, 43, 70. 
 
 Fahlbeck, Professor, on economic 
 protection, 60. 
 
 Falun Mine (Sweden), 35. 
 
 Finnemarken, trade of, freed from 
 restrictions, 83. 
 
 France : commercial and shipping 
 treaties with Norway, 45-7, 
 90-1 ; Sweden, 45-7, 52, 57, 
 59 ; trade with Norway, 114 ; 
 Sweden, 69, 77. 
 
 Free trade, see under Denmark, Nor- 
 way, Sweden. 
 
 GeUivaare district, iron ore from, 
 66, 68. 
 
 Germany : commercial treaties with 
 Sweden, 81-2 ; sanitary regu- 
 lations of, 20 ; trade with Den- 
 
 mark, 18, 20, 21, 30 ; Norway, 
 
 114 ; Sweden, 55, 67, 68, 77. 
 Gothenburg, centre of trade, 40, 
 
 79. 
 Grangesberg Company (Lapland), 
 
 68. 
 Gripenberg, Baron J. A., 44. 
 
 Hamburg, trade of, 14-17. 
 Holstein, Duchy of, industrial de- 
 velopment in, 14, 17. 
 
 Iceland, trade of, freed from re- 
 strictions, 83. 
 
 Inter-Dominion Laws (Norway and 
 Sweden), 38, 44, 48, 60-2, 86, 
 92-3, 98, 99. 
 
 Japan, Swedish exports to, 78. 
 Jonkoping, match factories at, 42. 
 Jutland, trade of, 14, 15, 22. 
 
 Kongsberg silver fineries, 89. 
 Kiirunavaare district, iron ore from, 
 66, 68. 
 
 Lapland : iron-ore deposits and ex- 
 ports, 41, 68, 69 ; railway 
 facilities, 66, 67, 75. 
 
 Liibeck, trade of, 14. 
 
 Lulea, port of, 68. 
 
 Luossavaare district, iron ore from, 
 66. 
 
 Malmo, centre of trade, 79. 
 
 Napoleonic wars, effect on trade 
 of, 33, 37, 39, 83. 
 
 Narvik, port of, 68, 112. 
 
 Navigation Act of 1651 (English), 
 33 ; repeal of, 87. 
 
 Nobel, dynamite factory founded 
 by, 54. 
 
 Norges Bank, 85. 
 
 Norrboten, development of iron-ore 
 production, 66. 
 
 Norrkoping, cloth factories at, 42. 
 
 Norrland Committee on forest pro- 
 tection, 65. 
 
 Norrland, lumber industry in, 41, 
 51-2 ; power-station, 75. 
 
 NOEWAY : 
 
 agricultural schools, 102. 
 agriculture, 85, 87, 88, 94, 98, 100, 
 115 ; cultivated area of land, 
 
120 
 
 INDEX 
 
 NOEWAY : 
 
 102 ; duties on products, 100- 
 1 ; importation of products, 
 97 ; numbers employed in, 102 ; 
 value of products, 88, 102. 
 
 aluminium production, 108 ; 
 value of exports, 106. 
 
 animal products, importation of, 
 102. 
 
 beef, importation of, 97. 
 
 bonded-warehouse system, 83. 
 
 brick-yards, 85. 
 
 butter, value of exports, 103. 
 
 canning industry, value of ex- 
 ports, 104. 
 
 cannon factories, 85. 
 
 carbide, value of exports, 106 ; 
 water-power consumed in 
 works, 108. 
 
 cattle, head of, 88, 102. 
 
 cellulose manufacture, 105 ; ex- 
 ports, 95, 104 ; value of ex- 
 ports, 106 ; water-power con- 
 sumed in mills, 108. 
 
 chemical industries, foreign capi- 
 tal invested in, 111 ; number of 
 establishments and employees, 
 105 ; value of exports, 106. 
 
 climatic conditions, effects of, 
 84. ' 
 
 commerce : aboUtion of trade 
 restrictions, 87 ; balance of 
 trade, 100 ; bankruptcy of 
 commercial houses in the 
 eighteenth century, 85 ; effects 
 of the continental blockade and 
 of the great wars, 34, 83, 85, 
 88-9 ; total foreign trade, 114. 
 
 commercial treaties : with France, 
 46-7, 90, 91 ; Spam, 57, 90. 
 
 concession laws, 103, 109-10, 111, 
 113. 
 
 co-operative organizations, 102-3. 
 
 copper mining, 84, 96, 112 ; value 
 of output, 96, 112. 
 
 cork manufacture, 85. 
 
 corporation stocks. 111. 
 
 customs duties and regulations, 
 38, 45, 83, 84, 86-9, 90-3, 97- 
 101 ; see also tariff policy, 
 dairy farming, 102 ; number of 
 
 dairies, ib. 
 dye-stuffs, manufacture of, 85. 
 electro-chemical industries, 105 ; 
 foreign capital invested in, 1 1 1 ; 
 value of exports, 106 ; water- 
 power consumed in, 108. 
 
 Norway : 
 
 emigration, 94, 109, 114. 
 
 exports, 62, 84, 86-9, 95, 96, 98, 
 100, 103-6, 109, 112, 114; 
 abolition of duties on, 98. 
 
 fisheries, 57, 86, 88-90, 93, 104 ; 
 exportation of fish, 84, 86, 88, 
 91, 104 ; value of exports, 89 ; 
 value of products, 97. 
 
 flour-milling, 95 ; water-power 
 consumed, 108. 
 
 food products, number of estab- 
 lishments and employees, 105. 
 
 foreign trade, see commerce. 
 
 forestry and forest regulations, 
 86, 87, 97, 103 ; commercial 
 and state forests, 103, 104 ; 
 products, 89. 
 
 free trade, 87, 89-94, 98. 
 
 glass manufactures, 11, 85. 
 
 goats, number of, 88, 102. 
 
 grain, importation of, 34, 84, 88, 
 97, 102 ; production of, 84, 97 ; 
 value of products, 88. 
 
 hogs, number of, 88, 102. 
 
 horses, number of, 88, 102. 
 
 illumination industry, foreign 
 capital invested in. 111 ; num- 
 ber of establishments and em- 
 ployees, 105. 
 
 imports, 62, 84, 87-92, 97, 100-2, 
 109, 114 ; reduction of duties 
 on raw materials, 87. 
 
 industrial development, 83, 93, 
 101 ; abolition of guild regula- 
 tions, 87 ; foreign capital in- 
 vested in industrial corpora- 
 tions, 101, 109, 111 ; number 
 of establishments and em- 
 ployees, 95, 105. 
 
 iron industry, 11, 89, 105, 112 ; 
 output of smeltries, 89, 96. 
 
 iron-mines, 84. 
 
 iron ore, 112 ; exportation of, 96. 
 
 leather manufacture, 105. 
 
 live-stock, number of, 88, 97, 102. 
 
 lumber industry, 87, 89, 93-5, 104. 
 
 machinery manufacture, 89 ; 
 number of establishments and 
 employees, 105. 
 
 manufactures, growth and de- 
 velopment of, 84r-6, 91, 92, 95, 
 101-2, 105 ; duties on, 100-1 ; 
 number of establishments and 
 employees, 105 ; value of ex- 
 ports, 106 ; value of products, 
 105. 
 
INDEX 
 
 121 
 
 Norway : 
 
 match factories, 95-6 ; exports, 
 96 ; value of exports, 106. 
 
 mercantilism, 83, 85, 89, 110, 115. 
 
 merchant fleet, see shipping. 
 
 metal manufactures, foreign capi- 
 tal invested in, 111 ; number 
 of establishments and em- 
 ployees, 105. 
 
 milling industry, 95, 108. 
 
 mineral wealth, 100, 106, 112. 
 
 mining industry, 84, 86, 89, 105, 
 112; concessions, 113; foreign 
 capital invested in. 111 ; legis- 
 lation concerning, 113 ; number 
 of establishments and em- 
 ployees, 105, 113 ; output of 
 mines, 89. 
 
 nationahsm, 85, 98, 101, 109, 
 115. 
 
 navigation licences, 85. 
 
 navigation policy, 86, 87, 91, 99 ; 
 see also shipping. 
 
 nickel, exportation of, 96. 
 
 nitrate, value of exports, 106, 108. 
 
 oil-mills, 85. 
 
 ore, exportation of, 96 ; output, 
 89 ; value of exports, 106, 112. 
 
 paper manufacture, 85, 105 ; 
 foreign capital invested in. 111 ; 
 value of exports, 106 ; water- 
 power consumed by mills, 108. 
 
 pig-iron production, 89. 
 
 population, 115. 
 
 pork, importation of, 97. 
 
 potatoes, total yield of, 97 ; value 
 of products, 88. 
 
 pottery works, 85. 
 
 privateering, 85. 
 
 protection, 85, 88, 90, 91, 93, 94, 
 97-101. 
 
 pyrites, exportation of, 96 ; value 
 of output, ib. 
 
 railway system, 95, 108 ; length 
 of lines, 115. 
 
 reclamation works, 102. 
 
 reindeer, number of, 102. 
 
 rubber manufacture, 105. 
 
 saltpetre, manufacture of, 108 ; 
 value of exports, 106 ; water- 
 power consimied, 108. 
 
 salt-works, 85. 
 
 saw-mills, concession system and 
 privileges, 83, 86, 87 ; local 
 monopolies, 83 ; water-power 
 consumed by, 108. 
 
 seal-flshing, 86. 
 
 NOBWAY : 
 
 sheep, number of, 88, 102. 
 
 shipbuilding, 95. 
 
 shipping, 31, 89, 90, 93, 100, 113, 
 115 ; effect of the great wars 
 on, 83, 84 ; freight earnings, 
 94, 100, 113 ; policy towards, 
 86, 87, 91, 99 ; tonnage of the 
 merchant fleet, 84, 86, 95, 113 ; 
 treaty with France, 46-7. 
 
 silver, production of, 84, 96. 
 
 small holdings, loans for, 102. 
 
 spinning-mills, 89. 
 
 stock-raising, 88, 97, 102. 
 
 stone industry, number of estab- 
 lishments and employees, 105. 
 
 Storthing, the, 90, 93, 98, 99, 101. 
 
 sugar refineries, 85. 
 
 tariff policy, 60-1, 86, 89-94, 97- 
 101, 114. 
 
 technical and trade schools, 115. 
 
 textile industry, 85, 89 ; number 
 of mills and employees, 105. 
 
 timber industry, 86, 87, 89 ; 
 concession law, 103 ; exports, 
 84-7, 95, 104 ; restrictions on 
 cutting abolished 83 ; trans- 
 portation facUities, 95 ; value 
 of exports, 89. 
 
 tourist traffic, 114. 
 
 trade with Sweden, 44-5, 60-2. 
 
 war with England, 84 ; with 
 Sweden, ib. 
 
 waterfaUs, 103, 107, 113 ; legisla- 
 tion regarding, 109-10 ; pri- 
 vate and communal ownership 
 of, 109, 112. 
 
 water-power, 95, 100, 101, 105-7, 
 111 ; concessions, 113 ; foreign 
 capital invested in companies, 
 101, 109-11 ; Government 
 policy concerning, 76, 101, 109, 
 110 ; power consumed, 108. 
 
 whale-fishing, 86, 91, 104-5, 114. 
 
 wood manufactures, number of 
 establishments and employees, 
 105 ; water-power consumed, 
 108. 
 
 wood-pulp industry, 95, 105 ; ex- 
 ports, 95, 104 ; value of ex- 
 ports, 106 ; water-power con- 
 sumed, 108. 
 
 zinc, 108 ; value of exports, 
 106. 
 Norwegian Association of Manufac- 
 turers and Industrial Workers, 
 97. 
 
122 
 
 INDEX 
 
 Oresund toll, repeal of the, 43. 
 ' Ostasiatisk Kompagni ', 31. 
 ' Ostindiske Kompaniet ', 36. 
 
 Parliamentary Tariff Commission 
 (Norway), 99. 
 
 Pasch, G. E., 43. 
 
 Porjus (Norrland), power-station at, 
 75. 
 
 Portugal, commercial treaty with 
 Sweden, 81. 
 
 Protection, see ttnrfer Denmark, Nor- 
 way, Sweden. 
 
 Prussia, treaty with Sweden, 38. 
 
 Rjukanfoss, saltpetre factories at, 
 
 108. 
 Roros, copper-mines of, 96. 
 Russia: commercial treaty with 
 
 Sweden, 38, 81 ; trade with 
 
 Denmark, 30 ; Norway, 114 ; 
 
 war with Sweden, 37. 
 
 Salangen, iron-ore deposits in, 112. 
 
 Sandvikens iron-works, 54. 
 
 'Schedule of Products' (1724), 
 33. 
 
 Schleswig-Holstein, Duchies of, lost 
 to Denmark, 17 ; tariff system 
 of, 15. 
 
 Skagen, 14. 
 
 South Africa, Swedish exports to, 
 78. 
 
 South America : trade with Nor- 
 way, 88 ; Sweden, 78. 
 
 Spain: commercial treaties with 
 Norway and Sweden, 57, 90. 
 
 Stockholm, factories in, 36. 
 
 ' Store Kopparbergslags Aktiebo- 
 lag ', 35. 
 
 Straits toll, the, removal of, 16. 
 
 Sulitelma, copper-mines of, 96. 
 
 ' Sveriges aUmanna Hypotheks- 
 bank ', 40. 
 
 Sweden : 
 
 agricultural machinery, manu- 
 facture and export of, 51, 70. 
 agricultural schools and insti- 
 tutes, 40, 51. 
 agriculture, 34, 39, 40, 58-60, 69 ; 
 climatic disadvantages, 80 ; fall 
 in prices, 58 ; foreign trade, 
 64 ; numbers engaged in, 63 ; 
 pressure of oversea competi- 
 tion, 50 ; surplus of harvests 
 over consumption, ib. 
 
 Sweden : 
 
 animal products, 63 ; annual 
 trade in, 64. 
 
 beet-sugar production, 64 ; value 
 of, 69, 70. 
 
 boot and shoe factories, mmiber 
 of establishments and em- 
 ploy ees,71 ; value of products, ib. 
 
 brandy distilleries, number of 
 employees and value of pro- 
 ducts, 71. 
 
 breweries, 42, 71 ; exportation of 
 beer, 81. 
 
 brick-works, 54 ; value of pro- 
 ducts, 71. 
 
 butter, exportation of, 40, 51, 64 ; 
 importation of, 40. 
 
 cabinet-work, 81. 
 
 canal system, 79. 
 
 candle-making, 42. 
 
 cattle, head of, 39, 64. 
 
 cellulose manufacture, 53. 
 
 cement manufacture, 54, 70. 
 
 chambers of commerce, 78. 
 
 cheese, importation of, 40. 
 
 chemical industries, 42, 54, 70, 
 75 ; value of products, 72. 
 
 cloth factories, 42. 
 
 clothing, manufacture of, 42. 
 
 coal-mining, 67. 
 
 commerce : effect of the Napo- 
 leonic wars, 37, 39 ; progress 
 and development, 43, 77 ; re- 
 strictions on, 37. 
 
 commercial treaties : with Den- 
 mark, 38 ; France, 45-6, 52, 
 57, 59 ; Germany, 81-2 ; Great 
 Britain, 38 ; Portugal, 81 ; 
 Prussia, 38 ; Russia, 38, 81 ; 
 Spain, 38-57; United States, 
 38. 
 
 co-operative dairies, 64. 
 
 copper-mines, 35. 
 
 cotton-spinning, 42. 
 
 cream-separator manufacture, 70. 
 
 currency, 43. 
 
 customs duties and regulations, 
 33, 37, 38, 45, 47, 48, 56, 59, 61, 
 81, 82 ; see also tariff policy. 
 
 dairy farming, 51 ; number of 
 dairies, 64. 
 
 electrical works, statistics of, 70, 
 71. 
 
 electro-chemical industries, 70, 
 74, 75. 
 
 electro-technical industries, 70. 
 
 emigration, 39, 50, 80. 
 
INDEX 
 
 123 
 
 Sweden : 
 
 engineering establishments, 40. 
 
 explosives, manufacture of, 54. 
 
 exports, 33, 34, 37, 39-41, 50, 51, 
 53-5, 62-6, 70, 73, 75, 77, 78, 
 82 ; duties on, 39, 81 ; prohi- 
 bition of, 38. 
 
 factories, 36, 53, 69, 71 ; number 
 of employees, 42, 53, 69 ; value 
 of products, 42, 53, 71, 72. 
 
 fertilizers, manufacture of, 75. 
 
 fisheries, 63. 
 
 flour-mills, 42, 74 ; number of 
 mills and employees, 71 ; value 
 of products, ib. 
 
 food products, value of, 72. 
 
 food supply, 34. 
 
 foreign trade, 43, 55 ; average 
 annual trade, 77. 
 
 forestry and forest regulations, 
 34, 37, 51, 52, 64, 65. 
 
 free ports, 79. 
 
 free trade, 38, 43-6, 48-9. 
 
 furniture factories, statistics as 
 to, 71. 
 
 furs, value of, 72. 
 
 glass manufactures, 35, 42 ; num- 
 ber of establishments and em- 
 ployees,71; valueofproducts,t6. 
 
 goats, number of, 39. 
 
 grain, duty on, 81 ; exportation 
 of, 39, 40, 50, 63 ; fall in prices, 
 58 ; harvests, 34, 39, 64 ; im- 
 ports and exports, 63 ; value 
 of products, 72. 
 
 graphics, value of products, 72. 
 
 harbours, 79. 
 
 hides, value of, 72. 
 
 hogs, number of, 39, 64. 
 
 horses, number of, 64. 
 
 imports, 40, 50, 55, 62-4, 77 ; 
 duties on, 56, 58, 59, 61, 63, 81, 
 82 ; prohibition of, 38 ; re- 
 moval and reduction of duties, 
 44-9, 57, 81, 82. 
 
 industrial development, 70 ; for- 
 eign capital invested in indus- 
 trial stocks, 73 n. ; freedom 
 from guild regulations, 41-2 ; 
 number of establishments and 
 employees, 71 ; value of pro- 
 ducts, ib. 
 
 ' Iron Exchange ', 35. 
 
 iron industry, 35, 43, 54, 67, 74, 
 75 ; number of establishments 
 and employees, 71 ; value of 
 products, ib. 
 
 Sweden : 
 
 iron-mines, 75 ; output of, 53. 
 
 iron ore, exportation of, 66, 82, 
 112 ; export duty on, 81 ; output 
 of, 65-6 ; value of exports, 73. 
 
 iron-ore production, 34, 35, 41, 
 67 ; limitation of output, 65. 
 
 knitting-mills, number of estab- 
 lishments and employees, 71 ; 
 value of products, ib. 
 
 live stock, exportation of, 40, 51, 
 
 64 ; importation of, 40 ; num- 
 ber of, 39, 50-1, 64. 
 
 lumber industry, 37, 40, 41, 51-3, 
 
 65 ; duty on exports, 39 ; ex- 
 ports, 33, 34, 41 ; foreign capi- 
 tal invested in, 73 n. 
 
 machinery manufacture, 42-3, 51, 
 54, 70, 72, 74 ; exports, 70, 
 73 ; number of establishments 
 and employees, 71 ; value of ex- 
 ports, 73 ; value of products, 71 . 
 
 manufactures, growth and de- 
 velopment of, 35, 39, 42, 49, 
 60-2, 69 ; number of factories 
 and employees, 71,73; value of 
 exports, 73 ; value of products, 
 69, 71, 72. 
 
 match factories, 42, 54 ; number 
 of factories and employees, 54, 
 71 ; value of exports, 54 ; value 
 of products, 54, 71. 
 
 mechanical engineering establish- 
 ments, 36. 
 
 mercantilism, 35, 37, 42. 
 
 merchant fleet, see shipping. 
 
 metal manufactures, 54 ; nimiber 
 of factories and employees, 71 ; 
 value of exports, 73 ; value of 
 products, 71, 72. 
 
 metals, value of exports, 73. 
 
 milling industry, 74. 
 
 minerals, manufactured and un- 
 manufactured, value of ex- 
 ports, 73. 
 
 mining industry, 34, 35, 41, 53, 
 67, 82 ; foreign capital invested 
 in, 73 n. ; Government regula- 
 tions, 67, 68 ; numbers em- 
 ployed in, 67. 
 
 mortgage credit system, 40, 58. 
 
 nationalism, 62, 80, 98. 
 
 navigation loan fund, 77. 
 
 navigation policy, 44-7, 57 ; see 
 also shipping. 
 
 oil, value of, 72. 
 
 oleomargarine factories, 71. 
 
124 
 
 INDEX 
 
 Sweden : 
 
 ore, exportation of, 75, 82. 
 
 paper manufacture, 42, 49, 54, 71, 
 74 ; number of mills and em- 
 ployees, 54, 71 ; value of ex- 
 ports, 54, 73 ; value of pro- 
 ducts, 54, 71, 72. 
 
 peat manufacture, 72. 
 
 pig-iron production, 35, 41, 53, 66. 
 
 population, 39, 50. 
 
 porcelain works, 35, 42. 
 
 protection, 25, 33, 37, 38, 43-6, 
 49, 56-62, 81-2. 
 
 railway system, 40, 43, 76 ; length 
 of lines, 55, 79. 
 
 registration tax, 56. 
 
 representation, parliamentary, 47. 
 
 rubber manufacture, 70, 73 ; 
 number of factories and em- 
 ployees, 71 ; value of products, 
 71, 72. 
 
 rye, 58 ; importation of, 50. 
 
 salt-herring, exportation of, 64. 
 
 saw-mills, 34, 40, 42, 52, 53, 65, 
 74 ; number of miUs and em- 
 ploy ees,71; value of products, i6. 
 
 sheep, number of, 39, 64. 
 
 shipping, 31, 33, 37, 38, 40, 43, 
 44, 77 ; policy towards, 44-7, 
 57, 76-7 ; tonnage, 43, 55, 78- 
 9 ; treaty with Prance, 45-6. 
 
 shipyards, 72, 76 ; number of 
 yards and employees, 71 ; 
 value of products, 71. 
 
 silk- weaving, 35, 42. 
 
 silver, production of, 35. 
 
 smuggling, 37. 
 
 soap manufacture, 42 ; number 
 of factories and employees, 71 ; 
 value of products, ib. 
 
 spinning-mUls, 71. 
 
 spirits, manufacture of, 42. 
 
 steel production, 41, 53, 66, 75 ; 
 number of estabUshments and 
 employees, 71 ; value of pro- 
 ducts, ib. 
 
 stock-raising, 39, 50-1, 63. 
 
 stone industry, 72, 81. 
 
 sugar manufacture, 42, 53, 69, 
 70 ; number of factories and em- 
 ployees,71 ; value of products,t6. 
 
 superphosphate production, 54 ; 
 number of factories and em- 
 ployees,71 ; value of products, ib. 
 
 tanning industry, 42 ; number of 
 tanneries and employees, 71 ; 
 value of products, ib. 
 
 Sweden : 
 
 tar, manufacture of, 73. 
 
 tariff policy, 25, 33, 37, 38, 43-50, 
 56-62, 81-2. 
 
 technical education, 70. 
 
 telephone manufacture, 70. 
 
 terra-cotta works, 71, 72. 
 
 textile industry, 35, 36, 42 ; 
 number of mills and employees, 
 71 ; value of products, ib. 
 
 thermo-electric industry, 74, 75. 
 
 timber industry, exportation of 
 products, 53, 65 ; value of un- 
 manufactured exports, 65. 
 
 tobacco factories, 35, 42 ; num- 
 ber of employees and value of 
 products, 71. 
 
 trade with Denmark, 16, 30 ; 
 with Norway, 44-5, 60-2, 114. 
 
 transportation facilities, 40 , 41 , 43 . 
 
 wagons, manufacture of, 72. 
 
 war with Norway, 84 ; with 
 Russia, 37. 
 
 waterfalls, ownership of, 75, 76, 
 
 water-power, 53, 70, 73 ; foreign 
 capital invested in companies, 
 73 n. ; Government policy con- 
 cerning, 75-6 ; power con- 
 sumed, 74-5. 
 
 wheat, fall in prices of, 58 ; im- 
 portation of, 50. 
 
 wood manufactures, exportation 
 of, 53, 74 ; value of exports, 
 73 ; value of products, 72. 
 
 wood-pulp industry, 53 ; exports, 
 54 ; number of mills and em- 
 ployees, 71 ; value of products, 
 
 wool-weaving, 42. 
 ' Swedish Weeks ', 80. 
 Sydvaranger, iron-ore deposits in, 
 112. 
 
 Tonsberg, importance of whale- 
 fishing to, 86. 
 
 TroUhattan, central power-station 
 at, 75 ; first cellulose factory 
 established at, 53. 
 
 TroUhattan Canal, 40, 79. 
 
 United States : trade with Den- 
 mark, 30 ; Norway, 114 ; 
 treaty with Sweden, 38. 
 
 Warmland, lumber industry of, 41. 
 West Indies : trade with Denmark, 
 12 ; Norway, 88. 
 
GENERAL APPENDIX 
 
 PUBLICATIONS OF THE DIVISION OF ECONOMICS 
 AND HISTORY 
 
 The Conference which met at Berne in 1911, under the auspices 
 of the Division of Economics and History of the Carnegie Endowment 
 for International Peace, appointed three Commissions to draft the 
 questions and problems to be dealt with by competent authorities 
 in all countries. The first Commission was entrusted with The 
 Economic and Historical Causes and Effects of War ; the second with 
 Armaments in Time of Peace ; the third with The Unifying Influences 
 in International Life. Subsequently the suggestions of the three 
 Commissions were considered and approved by the entire Conference. 
 
 The questions are to be discussed scientifically, and as far as possible 
 without prejudice either for or against war ; and their discussion 
 may have such important consequences that the questions are pre- 
 sented below in extenso. 
 
 Report of the First Commission 
 
 THE ECONOMIC AND HISTORICAL CAUSES AND EFFECTS OF WAR 
 
 The Conference recommends the following researches : 
 
 1. Historical presentation of the causes of war in modern times, 
 tracing especially the influence exercised by the striving for greater 
 political power, by the growth of the national idea, by the political 
 aspirations of races and by economic interests. 
 
 2. Conflicts of economic interests in the present age : 
 
 (o) The influence of the growth of population and of the industrial 
 development upon the expansion of States. 
 
 (6) The protectionist policy ; its origin and basis ; its method 
 of application and its influence upon the relations between coun- 
 tries ; bounties (open and disguised, public and private) ; most 
 favoured nation treatment ; the attitude towards foreign goods 
 and foreign capital ; the boycott ; discouragement of foreign 
 immigration. 
 
 1 
 
GENERAL APPENDIX 
 
 (c) International loans ; the policy of guarantees ; the relations 
 of the creditor to the debtor States ; the use of loans for gaining 
 influence over other States. 
 
 {d) Rivalry among States with respect to capitalist investments 
 in foreign countries : 
 
 1. The endeavour to obtain a privileged position in banking 
 enterprises, in the opening and development of mines, in the 
 letting of public contracts, in the execution of pubUe works, in 
 the building of railways (Siberian, Manchurian, Persian Bagdad 
 Railway, Adriatic Railway, &c.) ; in short, the organization of 
 larger capitalistic enterprises in foreign countries. 
 
 2. The hindering of foreign countries by convention from 
 executing productive enterprises on' their own soil, e.g. from 
 building railways in their own countries. 
 
 3. The anti-militarist movement, considered in its religious and 
 political manifestations. (Only opposition to all military organization 
 is here to be considered.) 
 
 4. The position of organized labour and the socialists in the various 
 States on the questions of war and armaments. 
 
 5. Is it possible to determine a special interest of individual classes 
 making for or against war, for or against standing armies ? 
 
 6. The influence of women and woman suffrage upon war and 
 armaments. 
 
 7. The extension of obligatory military service in the different 
 States, in times both of war and of peace. 
 
 (a) The conditions of miUtary service ; the system of enhstment 
 and of general obligatory service, the actual position of aliens. 
 
 (b) The ratio of the persons obliged to render military service 
 to the entire population. 
 
 (c) The influence of the present system of military obligation 
 and the organization of armies upon warfare and upon its duration. 
 
 8. The economic effects of the right of capture and its influence 
 upon the development of navies. 
 
 9. War loans provided by neutral countries ; their extent and 
 influence on recent warfare. 
 
 10. The effects of war : 
 
 (a) Financial cost of war. The methods of meeting it : Taxa- 
 tion ; International Loans ; External Loans. 
 
 (&) Losses and gains from the point of view of public and private 
 economic interests ; checks to production and the destruction of 
 productive forces ; reduction of opportunities for business enter- 
 
 2 
 
GENERAL APPENDIX 
 
 prises ; interruption of foreign trade and of the imports of food ; 
 the destruction of property ; shrinkage of values of property, 
 including securities ; financial burden caused by new taxes, debts, 
 and war indemnities ; effects upon private credit and upon 
 savings banks ; advantages to those industries which furnish 
 miUtary materials ; advantages and disadvantages to neutral 
 countries. 
 
 (c) The effects of war upon the supply of the world with food 
 and raw materials, with special reference to those States which 
 are in large degree dependent upon other countries for such 
 supplies, e.g. Great Britain and Germany ; by diversion of capital 
 from those countries which produce food and raw materials 
 (especially the stoppage of railway building and of new investments 
 in agriculture and other industries). 
 
 (d) The condition of the victorious State : manner of levy and 
 use of contributions and war indemnities ; influence upon industry 
 and social life. 
 
 (c) The manner in which the energy of nations is stimulated or 
 depressed by war. 
 
 11. Loss of human life in war and as a result of war : influence 
 upon population (birth-rate, relation between the sexes, ratio of the 
 various ages, sanitary conditions). 
 
 12. The influence of war and of the possibility of war upon the 
 protective policy, upon banking conditions (especially upon banks 
 of issue), and upon monetary systems. 
 
 13. The influence of annexation upon the economic life of the 
 annexing States, and upon the State whose territory has been annexed. 
 
 14. The annexation of half-civilized or uncivilized peoples, con- 
 sidered especially from the point of view of the economic interests, 
 which act as motive powers ; the methods through which private 
 enterprises take root in such regions and through which they bring 
 influence to bear upon their own governments ; the effects of such 
 annexations upon the development of trade with the annexing State 
 and with other countries, as well as upon the economic and social 
 life of the natives. 
 
 15. The progressive exemption of commercial and industrial 
 activities from losses and interferences through war. 
 
 16. Influence of the open door policy upon war and peace. 
 
GENERAL APPENDIX 
 
 Report of the Second Commission 
 
 ARMAMENTS IN TIME OF PEACE. MILITARY AND NAVAL ESTABLISH- 
 MENTS. THE THEORY, PRACTICE, AND HISTORY OF MODERN 
 
 ARMAMENTS. 
 
 1. Definition. Armaments might be described as ' the preparations 
 made by a State either for defence or for attack '. These would 
 include the provision of food, financial preparations, and also semi- 
 military railways, canals, docks, &c. 
 
 2. Causes of armaments. Motives for increasing or commencing 
 them, distinguishing the great from the small powers. 
 
 3. Rivalry and competition in armaments. Motives and conse- 
 quences of rivalry, with the possibilities of Hmitation. 
 
 4. Modern history of armaments, with special fullness from 1872. 
 To be noted as important landmarks : 
 
 (a) The introduction of conscription into Germany, France, 
 Austria, Italy, Japan, &c. 
 
 (6) Modern inventions affecting war. 
 
 (c) The question of privateering and private property at sea. 
 
 (d) Duration of military service. 
 
 (e) The traffic in arms. 
 
 5. MiUtary budgets from 1872 (distinguishing ordinary from extra- 
 ordinary expenditures). 
 
 6. The burden of armaments in recent times. 
 
 (a) The proportion of miUtary to civil expenditure. 
 (6) Military expenditure per capita. 
 
 (c) Military expenditure from loans in time of peace, i.e. a com- 
 parison of expenditure from taxes with expenditure from borrowed 
 money. 
 
 (d) Comparative burdens of individual taxpayers in different 
 countries and the extent to which the differences are due to 
 armaments. 
 
 (e) MiUtary pensions. 
 
 (/) It is desirable to ascertain where possible the ratio between 
 the total income of each nation and the total expenditure on 
 armament at various times. 
 
 7. The effects of war preparations upon the economic and social 
 life of a nation : 
 
 (a) On the sustenance of the entire population of a country at war. 
 
 4 
 
GENERAL APPENDIX 
 
 (b) On railway policy. 
 
 (c) On public administration and on social legislation. 
 
 8. The economic effects of withdrawing young men from industrial 
 pursuits, into the army and navy : 
 
 (a) Compulsory. 
 
 (6) Of non-compulsory service (specially in the case of mercenary 
 troops). 
 
 (Allowance being made for the industrial value of military 
 education and training.) 
 
 9. The influence of changes in the occupations of a people upon the 
 composition and efficiency of armies, and the influence of the changes 
 in the composition of armies on the economic life. 
 
 10. Loans for armaments (participation of domestic and foreign 
 capital). 
 
 11. The industries of war, i.e. the various manufactures and other 
 industries which are promoted and encouraged by mihtary and naval 
 establishments, distinguishing between : 
 
 (a) Government undertakings (arsenals, dockyards, &c.). 
 
 (6) Private undertakings, including the history and working 
 of the great armament firms, which sell to foreign customers as 
 well as to their own governments. 
 
 12. War materials (munitions of war). Their recent development 
 and their cost. This includes arms, ammunition, armour-plate, war- 
 ships, guns of all kinds, military airships, &c. So far as possible the 
 effect of recent inventions upon offensive and defensive war should be 
 indicated. 
 
 Report of the Third Commission 
 
 THE UNIFYING INFLUENCES IN INTERNATIONAL LIFE 
 
 1. The Conference is of the opinion that the economic life of 
 individual countries has definitely ceased to be self-contained ; and 
 that, notwithstanding the barriers raised by fiscal duties, it is becom- 
 ing in ever increasing measure a part of an economic life in which the 
 whole world participates. 
 
 2. It desires that this change be studied with the object of ascer- 
 taining to what extent the economic life of individual nations has 
 ceased to be self-contained, and the causes which are bringing about 
 the greater interdependence of nations. 
 
 3. Special attention should be paid to the following factors : 
 
 (a) How far the growth of population is responsible for the 
 changes that have occurred and are in progress. 
 
 6 
 
GENERAL APPENDIX 
 
 (6) The extent to which the insufficiency of the natural resources 
 of individual countries for their own requirements has con- 
 tributed to it. 
 
 (c) Whether the increasing economic unity of the world is the 
 cause or the result of the rising in the standard of living, and how 
 far the increasing welfare of nations has been caused by the 
 growing unity. 
 
 (d) In what measure the need of individual countries to obtain 
 materials of production from other lands and to find new markets 
 for their own products is responsible for the growth of international 
 dependence. 
 
 4. The Conference desires that investigations be made into : 
 
 (a) The volume of the world's production of all the many articles 
 of food, of the various raw materials and of the principal manu- 
 factures. 
 
 (&) The productions of individual countries, and the extent to 
 which they are retained for home consumption or are exported. 
 
 (c) The consumption of individual countries, and the extent to 
 which the various articles are supphed from home productions or 
 are imported. 
 
 5. The Conference wishes to ascertain to what extent the economy 
 of production by large units, instead of by small units, has contributed 
 to the international dependence of nations. 
 
 6. The development of this world-embracing economy has taken 
 place in great measure in consequence of the investment of capital 
 by rich countries in less developed lands. Through this there have 
 arisen close relations and a great increase of wealth, not only for the 
 lending and the borrowing countries, but for all nations. The Con- 
 ference is of the opinion that researches should be made into the 
 extent of the interdependence of the nations in the matter of capital. 
 
 7. The Conference desires to institute inquiries into the inter- 
 dependence of the financial centres of the world. 
 
 8. The Conference desires to make the unifying effects of inter- 
 national trade, the building of railways, the progress of shipping, 
 the improvement and extension of all means of communication and 
 the progress of inventions, the subjects of careful investigation. 
 
 9. The Conference is in favour of making a comprehensive study 
 of the various international unions and associations, in which the 
 social and economic interests of all classes of society are now either 
 organized or in process of organization, through official or private 
 action. 
 
 6