mediate

consumption, sugar and coffee, and of the raw materials, hides, skins, and India rubber are perhaps the only articles of import which individually constitute large shares of the total trade. In 1910 these four items aggregated one-fourth the total imports, while the remaining threefourths were divided among a vast variety of articles.

In short, if it were necessary to summarize the characteristic changes in the foreign trade of the United States in one sentence, it might be said that the change consisted mainly in the gradual substitution of ready manufactures for raw materials and food products in the export trade and a similar gradual substitution of raw materials for ready-to-use manufactured articles in the import trade-a significant index of the industrial revolution through which the United States has passed during the last fifty years.

It has often been stated that, as a result of this industrial revolution, the United States has become more self-sufficient economically and less dependent upon foreign countries. This rapid review of the foreign commerce shows that the statement is true in only a very limited sense. On the one hand, the dependence upon foreign sources of raw materials, if less urgent than the dependence upon the foreign food supply, is much more important than that upon a foreign supply on manufactured articles for it

affects home production as well as consumption; and on the other, the dependence of American industry on the export trade has considerably increased. In consequence, the question of governmental aid to export trade has become a very serious one during the last two decades, and to a certain extent the necessity for the increase of the export trade is affecting our traditional tariff policy. The study of the foreign markets and of the conditions of foreign demands has become a matter of great concern. The increased attention to the consular service, the organization of a special Bureau of Manufactures, the distribution of many special commercial agents throughout the world, the organization of a Railroad board of trade through the efforts of the Federal Department of Commerce and Labor, are a few of the efforts made by the National government to open a larger outlet to American industries. into some of the markets heretofore held almost exclusively by the British and Germans. The rapid organization of export museums and export associations through private efforts, a greater attention to the study of foreign commercial conditions and of foreign languages, and of the conditions of foreign trade in general in our best universities, are further evidences of the growing needs for the development of our export trade.

The influence of this comparatively new factor in American manufactures

is rapidly spreading in every direction. Such movements as the encouragement of a merchant marine, and even the gigantic undertaking of the Panama Canal, are due to the growing appreciation of the necessity of foreign markets. The sudden growth of the reciprocity movement may probably be explained more by the need of an outlet for our domestic goods than the desire of the American consumer for goods of foreign manufacture. In short, in so far as our protective policy, with its stimulus to the development of manufactures, has made a foreign outlet for surplus goods a necessary condition, this commercial policy has increased rather than decreased the interdependence of American economic life and international commercial markets. Thus it is quite fair to assume that the share of the United States in the world's trade will continue to grow in the future.

It is quite a difficult matter to ascertain the total value of the world's foreign commerce. An approximate computation made by the famous German statistician, Dr. F. von Juraschek, places the value of the combined exports from all countries in 1890 at $8,348,000,000; in 1900, at $9,957,000,000; and in 1907, when the highest level was reached, at $14,747,000,000. The value of imports (which is usually higher, since to the original value must be added the cost of transportation and other items) into all countries

for these respective years, was $9,555,000,000, $11,433,000,000, and $16,477,000,000.

The value of the total international trade is frequently spoken of as the total of both exports and imports. This, of course, represents a duplication, for the imports of one country reappear again in the statistics of foreign commerce as the exports of another country; but the total figures, if properly understood, present a better measure of the growth of the international trade than the figures of either exports or imports separately.

The totals for the three years selected were: In 1890, $17,903,000,000; in in 1900, $21,390,000,000; and in 1907, $31,224,000,000. Of these total amounts the share of the United States in 1890 was $1,647,000,000 (or 9.2 per cent.); in 1900, $2,244,000,000 (or 10.4 per cent.); and in 1907, $3,315,000,000 (or 10.6 per cent.). Thus the share of the United States is constantly rising.

Of the entire volume of marketable products which now enter the highways of international commerce, over one-eighth originates from the United States and nearly one-tenth is brought to American ports from foreign centres of production, so that almost onefourth of the entire trade of the world directly affects this country. Hardly a better illustration could be conceived of the tremendous growth of the economic interdependence of all the civilized countries at the present time.

An account of the development of interstate commerce in the United States may conveniently be divided into three epochs: (1) the period from 1789 to 1815; (2) that from 1815 to 1860; and (3) that from 1860 to the present time. Although our government records relative to foreign trade have always been fairly complete, it is worth noting that, as regards our interstate traffic (which has grown to

* Prepared for this history by S. S. Huebner, Professor of Insurance and Commerce, Wharton School of Finance and Commerce, University of Pennsylvania

such vast proportions as to outrank by far the volume of foreign trade), there has never been available anything like a comprehensive statistical compilation to show the extent of this trade between the leading producing sections of the country at different stages of our economic development. Even at the present time, the nature and volume of interstate trade can only be approximately inferred, especially as regards railroad traffic, from a study of general statistics relating to volume of production and tonnage carried.

During the period from 1789 to 1815 our internal trade assumed but the humblest proportions. One writer remarks that that "the "the striking thing about it is not that it was so large but that it was so small," while another observes that "it can hardly be said that anything deserving the name of interstate commerce existed in this country at the beginning of the 19th century." The population of the country in 1810 was only 7,239,000, settled almost entirely on a long, narrow strip along the Atlantic Coast, hardly larger than the State of Texas. Settlement beyond the Alleghanies was still on a limited scale, as the mountains proved to be an almost impassable barrier between the East and West. Nine-tenths of the population was engaged in agricultural pursuits. Such limited manufactures as existed were intended chiefly to supply the immediate neighborhood; and in most instances foreign markets were depended upon for the greater part of the necessary manufactures. In fact, the high cost of labor placed America at a disadvantage in the manufacture of such articles as linen, and cotton

and woolen cloth, the cost of producing these commodities ranging from 20 to 50 per cent. higher than in England. Moreover, with the exception of river transportation for short distances, communication between the

*Clive Day, History of Commerce, p. 476. Edward A. Moseley, in Depew's One Hundred Years of American Commerce, chap. iv., p. 25.

States was by wagon on roads, which were notable for their muddy or dusty condition; and freight rates to destinations beyond the Alleghanies were so high as to preclude the transportation of all articles except those of the utmost necessity, such as salt, iron, etc.Travel by stagecoach," we are informed, "did not become of importance until well in the 19th century,

and postage rates for a single letter ranged from 8 to 25 cents, according to the distance, and mails were infrequent." * Under such circumstances the internal trade prior to 1815 proved to be small, even when compared with the sparse population. Briefly summarized, the most notable features of this country's trade during this period were the following:

(1) The foreign trade was emphasized as much more important

than the interstate trade. The New England trade consisted chiefly in lumber and fish, which were exported; and, while Massachusetts possessed manufactures of coarse cloth, the same could be imported more cheaply. In the same way New York, Pennsylvania and New Jersey, while producing a large variety of articles, such as oil, pitch, tar and provisions, disposed of the same locally and depended on the foreign market for the disposal of the balance; while Virginia and the South produced a limited number of articles only, especially

* Clive Day, The History of Commerce, p. 473.

tobacco, which were destined for the oversea trade.

(2) The interstate trade of this period involved only a small volume and comparatively short haul, because the essential feature of the economic life of this period was the selfsufficiency of the household and the self-sufficiency of the town. Not only were local wants supplied by local production, but the variety of wants was surprisingly limited when compared with the number of wants now regarded as necessities of life.

(3) Such long distance internal trade as existed was conducted almost entirely by coastwise trading vessels, the tonnage in this trade increasing from 78,607 tons in 1789 to 477,971 in 1812. Some of the farm products and coarse cloth of the North were sent to Charleston to be exchanged for tobacco or bills on England. But such long hauls were comparatively rare. In the main, the coastwise tonnage was employed along short stretches of the coast, either for the purpose of collecting commodities at some large port, thence to be exported abroad, or for distributing goods from that port after they had been imported.

The period from 1815 to 1860 has been well named the era of "National Expansion." Instead of devoting their energies almost exclusively to building up the foreign trade, Americans then turned to the development. of the unlimited resources of the interior. Even as late as 1815 the population was still confined mainly

to the Atlantic Coast, depending upon Europe and the West Indies for its trade, and the centre of population was still near Washington, D. C. By 1860, however, the centre of population had shifted near to Chillicothe, Ohio, and nearly the whole West to the Mississippi River was continuously settled. Even the plains beyond the Mississippi River to the Rocky Mountains were being dotted with settlements, and the Pacific Coast received such an influx of population between 1850 to 1860 as justified the giving of statehood to Oregon and California.

This spread of population throughout the country and the breaking in of enormous areas of fertile territory naturally implied that the days of the self-sufficiency of the household and town were over and that means of transportation would have to be developed to bring these widely separated areas together. Small production was to be replaced by large production, and the disadvantage of distance was to be counteracted by greater speed in transportation. Hence" National expansion "in this era meant expansion in the volume of production and trade and the extension of transportation facilities.

These two movements worked hand in hand, and in proportion as transportation facilities increased larger production became possible. At first the country devoted its energies to the development of the turnpike, the canal, and the river steamboat. In 1818 the