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instead of raw leather, shoes; instead portion of the American exports diof lumber, complicated ottice furni- verted from Europe to the South ture; instead of raw iron, machinery, American and Asiatic countries. bicycles, typewriters or scientific in- Thus in the five years (1866 to 1870) struments. This, in a few words, is Europe absorbed 77.8 per cent.; the change in the export trade in this North America, 13.5 per cent.; South country, and this undoubtedly. is the America, 4.2 per cent.; Asia, 2.7 per growing tendency of the future. cent.; Australasia, 1.4 per cent. and

And since the manufactured prod- Africa but.5 per cent. of the American ucts have largely substituted the raw exports. In the last five years, howmaterial in this trade, it is quite ever, North America's share has innatural that the currents of the ex- creased to 18.5 per cent.; South ports from the United States should America's, to 4.5 per cent.; Asia's, to not have radically changed. From 4.9 per cent.; that of Australasia, to the very beginning of the foreign com- 2.4 per cent.; and Africa's, to 1 per

, merce of the United States, from two- cent.; correspondingly, then, Europe's thirds to three-fourths of the exports share has declined to 68 per cent. If went to Europe and over two-thirds figures did not make such dull readstill continue to cross the Atlantic. ing, it would be possible and instrucNevertheless, under the influence of tive to show that the share of the the changed character of the exports, extra European countries is very some changes in the current of trade much larger when only manufactures were inevitable. On the one hand, the are considered. This analysis does substitution of manufactured prod- not mean, of course, that our trade ucts for food and raw materials in- with Europe has actually declined, evitably caused some difficulties in the but only that, as manufactures are European markets where the products substituted for raw materials in the of American factories were forced to export trade, the markets of the meet the competition of the products younger countries less advanced inof domestic factories; and, on the dustrially have become proportionother hand, it opened markets in such ately more important, and it is upon countries as were of no importance as them that international rivalry is conconsumers of American exports here- centrated. tofore, either because they had a sur- It was shown above that the implus of food products of their own or ports into the United States had not because they had no demand for the grown as rapidly as the exports. particular foods or raw materials Nevertheless they have increased which the United States could offer. faster than population and now do so As a result, we find an increased pro- more uninterruptedly, notwithstanding all the important changes in tar- one-third. Adding to these the imiff policy. The sudden decreases in ports of partly manufactured articles the early 70's (from $642,000,000 in for further use in manufactures, over 1872 to $461,000,000 in 1876), again one-half of the imports into the United in the 90's (from $866,000,000 in 1893 States is called for by the demands to $654,000,000 in 1894), and finally of American industries. Contrary to from $1,434,000,000 in 1907 to $1,194,- some alarmist statements, the impor000,000 in 1908, were due to periods of tation of food products has not ineconomic depression rather than to creased, relatively speaking, and the changes in the tariff. Within the most time is still far distant when the recent years imports have increased United States will become dependent in face of the considerable drop in upon a foreign food supply excepting the exports, so that the balance of for such articles as, say, sugar or trade has declined from $666,000,000 coffee, for whose importation a good in 1908 to $188,000,000 in 1910.

climatic reason exists. In this conThese few data will indicate the nection we may point to the most ingrowing importance of the import teresting analysis to be found in the trade, which is frequently disregarded report of the chief of the Bureau of by writers on questions of foreign Statistics of the Department of Agricommerce. It is true that, with the culture for 1910, which shows that, rapid growth of American industries, owing to improved methods of agriculthe United States is becoming very ture, the production of foodstuffs on much more self-sufficient than it was, the American farm is actually growinasmuch as our industries are better ing faster at present than the populaable to satisfy the demands of the tion. internal markets. The most telling For this reason the sources of the demonstration of this is found in the import trade of the United States are fact that, while early in the Nine- more evenly divided among the conteenth century more than one-half and tinents than are those of the exports. sometimes nearly three-fifths of the Less than one-half comes from Europe imports consisted of manufactured (the proportion within the last 25 goods ready for consumption, by the years having gradually declined); beginning of the new era (that is after about one-fifth comes from the other the Civil War) the proportion has North American countries; about 15 declined to 40 per cent. and now con- per cent. from Asia; and 10 to 12 per stitutes less than one-fourth, while cent. from South America (the rethe imports of raw materials for the spective shares of the last two regions use of manufactures has increased having materially increased within from 10 per cent. in the 60's to over recent years). Of articles for im

VOL. X - 24

mediate consumption, sugar and affects home production as well as concoffee, and of the raw materials, hides, sumption; and on the other, the deskins, and India rubber are perhaps pendence of American industry on the the only articles of import which in- export trade has considerably individually constitute large shares of creased. In consequence, the question the total trade. In 1910 these four of governmental aid to export trade items aggregated one-fourth the total has become a very serious one during imports, while the remaining three- the last two decades, and to a certain fourths were divided among a vast extent the necessity for the increase variety of articles.

of the export trade is affecting our In short, if it were necessary to traditional tariff policy. The study of summarize the characteristic changes the foreign markets and of the conin the foreign trade of the United ditions of foreign demands has beStates in one sentence, it might be said come a matter of great concern. The that the change consisted mainly in increased attention to the consular the gradual substitution of ready man- service, the organization of a special ufactures for raw materials and food Bureau of Manufactures, the distribuproducts in the export trade and a tion of many special commercial similar gradual substitution of raw agents throughout the world, the materials for ready-to-use manufac- organization of a Railroad board of tured articles in the import trade - a trade through the efforts of the Fedsignificant index of the industrial eral Department of Commerce and revolution through which the United Labor, are a few of the efforts made States has passed during the last by the National government to open a fifty years.

larger outlet to American industries It has often been stated that, as a into some of the markets heretofore result of this industrial revolution, held almost exclusively by the British the United States has become more and Germans. The rapid organization self-sufficient economically and less of export museums and export assodependent upon foreign countries. ciations through private efforts, a This rapid review of the foreign com- greater attention to the study of formerce shows that the statement is eign commercial conditions and of true in only a very limited sense. On foreign languages, and of the condithe one hand, the dependence upon tions of foreign trade in general in our foreign sources of raw materials, if best universities, are further eviless urgent than the dependence upon dences of the growing needs for the the foreign food supply, is much more development of our export trade. important than that upon a foreign The influence of this comparatively supply on manufactured articles for it new factor in American manufactures

is rapidly spreading in every direc- for these respective years, was $9,555,tion. Such movements as the en- 000,000, $11,433,000,000, and $16,477,couragement of a merchant marine, 000,000. and even the gigantic undertaking of The value of the total international the Panama Canal, are due to the trade is frequently spoken of as the growing appreciation of the necessity total of both exports and imports. of foreign markets. The sudden This, of course, represents a duplicagrowth of the reciprocity movement tion, for the imports of one country may probably be explained more by reappear again in the statistics of the need of an outlet for our domestic foreign commerce as the exports of goods than the desire of the American another country; but the total figures, consumer for goods of foreign manu- if properly understood, present a betfacture. In short, in so far as our ter measure of the growth of the inprotective policy, with its stimulus to ternational trade than the figures of the development of manufactures, has either exports or imports separately. made a foreign outlet for surplus

The totals for the three years segoods a necessary condition, this com- lected were: In 1890, $17,903,000,000; mercial policy has increased rather in 1900, $21,390,000,000; and in than decreased the interdependence of 1907, $31,224,000,000. Of these total American economic life and inter- amounts the share of the United national commercial markets. Thus it States in 1890 was $1,647,000,000 is quite fair to assume that the share (or 9.2 per cent.); in 1900, $2,244,of the United States in the world's 000,000 (or 10.4 per cent.); and in trade will continue to grow in the 1907, $3,315,000,000 (or 10.6 per cent.). future.

Thus the share of the United States is It is quite a difficult matter to as- constantly rising. certain the total value of the world's Of the entire volume of marketable foreign commerce. An approximate products which now enter the highcomputation made by the famous Ger- ways of international commerce, over man statistician, Dr. F. von Juraschek, one-eighth originates from the United places the value of the combined ex

States and nearly one-tenth is brought ports from all countries in 1890 at to American ports from foreign cen$8,348,000,000; in 1900, at $9,957,000,

in 1900, at $9,957,000,- tres of production, so that almost one000; and in 1907, when the highest fourth of the entire trade of the world level was reached, at $14,747,000,000. directly affects this country. Hardly The value of imports (which is usu- a better illustration could be conceived ally higher, since to the original value of the tremendous growth of the must be added the cost of transporta- economic interdependence of all the tion and other items) into all countries civilized countries at the present time.

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Causes of its rapid development

The three periods of interstate commerce Chief features of the first period

between 1815 and 1860 — Its enormous growth since 1860.

An account of the development of such vast proportions as to outrank interstate commerce in the United by far the volume of foreign trade), States may conveniently be divided there has never been available anyinto three epochs: (1) the period from thing like a comprehensive statistical 1789 to 1815; (2) that from 1815 to compilation to show the extent of this 1860; and (3) that from 1860 to the trade between the leading producing present time. Although our govern- sections of the country at different ment records relative to foreign trade stages of our economic development. have always been fairly complete, it is

Even at the present time, the nature worth noting that, as regards our in- and volume of interstate trade can terstate traffic (which has grown to only be approximately inferred, es

pecially as regards railroad traffic, * Prepared for this history by S. S. Huebner, from a study of general statistics reProfessor of Insurance and Commerce, Wharton

lating to volume of production and School of Finance and Commerce, University of Pennsylvania

tonnage carried.

*

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