Triumphs and Wonders of the 19th Century: The True Mirror of a Phenomenal Era / A volume of original, entertaining and instructive historic and descriptive writings, showing the many and marvellous achievements which distinguish an hundred years of material, intellectual, social and moral progress

by James P. Boyd

VIII. CAUSES ACCOUNTING FOR THE CENTURY’S COMMERCIAL PROGRESS.

The commercial progress of the nineteenth century, the salient phases of which have been depicted in the foregoing pages, has been the result of three sets of causes, economic, political, and social.

The economic causes of most importance are the improvements in transportation, the reorganization of industry on a large scale, the accumulation of capital, together with the growth of corporations and credit institutions whereby the utility of capital has been enhanced, and the discovery of large stores of gold.

CRAMP’S SHIPYARD ON THE DELAWARE.

Transportation is the handmaid of trade. Whatever enables this handmaid to do her work cheaper and quicker enlarges the scope and volume of the world’s commerce. When one considers that it cost nearly four times as much in 1875 to ship wheat from New York to Liverpool as it did twenty years later, and fully three times as much from Chicago to Liverpool, one can readily understand how transportation has removed hindrances to commerce.

Cheap and rapid transportation has made an extensive commerce possible, but it has been the organization of industry on a large scale that has created the chief demand for commerce. Industry at the present time is, to a large extent, so organized as best to promote the territorial and international division of labor; and each large producer regards the whole world as his market. The amount of commerce required increases with the concentration and specialization of industry, and with every widening of the producer’s market.

It has been the accumulation of capital and its increased availability for purposes of production that have made possible the organization of industry on its present basis, and enabled men to construct the highly developed transportation system by means of which commerce is accomplished. The material progress of the past century is unprecedented. Industry has created wealth as with the touch of a magic wand; and this rapidly growing wealth has been made available capital through the instrumentality of the corporation which, by means of stocks and bonds, has gathered into giant organizations the property of hundreds and even thousands of individuals. The industrial corporations have been greatly assisted in their work of concentrating and applying capital, by the banks and other institutions that have enlarged credit and made a given amount of property capable of performing a much larger work. The expansion of industrial credits, furthermore, has been greatly facilitated by the issue of government bonds in large amounts during the century. These state obligations constitute excellent business securities, of which banks, other corporations, and individuals make extensive use. Such are some of the factors that have promoted the accumulation of capital and increased the volume of commerce.

Money is not capital, but an adequate supply of a sound and stable medium of exchange is essential to industrial and commercial progress. Twice in the history of the world the discovery of large supplies of the precious metals has given a great impetus to industry and trade: once, in the sixteenth century, when the Spanish galleys brought to Europe rich treasure from the silver mines of America; and again, in the middle of the nineteenth century, when the rich finds of gold were made in Australia and California. The very rapid increase in the commerce of the United States and of the world at large, which began about 1850, was in no small degree the result of the rising prices which followed the discoveries of gold. The closing decade of the century is witnessing a similar occurrence. For many years prices declined rapidly; the demands made upon the world’s gold supply were rapidly increased at a time when the annual output was declining. From 1850 to 1870 the annual output of gold averaged over $130,000,000; it then declined so rapidly that it amounted to only a little over $100,000,000 a year, in 1885 and 1886. It was only $118,848,700 in 1890; but the present annual production is nearly $300,000,000, and the fall in prices has been cheeked for a while at least. The very rapid enlargement in commerce during the past two years must have been facilitated by the recent increase in the annual production of gold.

A second general cause accounting for the world’s progress in commerce is political—the commercial policy followed by the leading nations of the world. Up to the nineteenth century, practically every country strove to promote its trade, navigation interests, and its power as a nation by means of the mercantile system,—a system of strict and detailed regulation of foreign trade by means of tariffs and navigation laws. Each country strove to determine the nature of its international trade, and endeavored to carry on its commerce in its own ships. In the case of one country, at least, the mercantile system was eminently successful. Great Britain entered the great Napoleonic wars with a powerful naval and merchant marine, and emerged from that struggle the unquestioned mistress of the ocean. Her industries also, as well as her ships, were stronger than those of other countries; and she soon concluded that both her foreign trade and her shipping would profit by doing away with the restrictions of the mercantile system, and adopting the policy of entire commercial freedom. She made no mistake, for her industries and commerce have wonderfully prospered.

The success of free trade and freedom of commerce in the United Kingdom had much influence upon other countries, and, during the third quarter of the nineteenth century, several countries began to move cautiously in the direction that the United Kingdom had taken. They soon found, however, that for them free trade and shipping meant British trade and shipping, because of their inability to compete successfully with their powerful rival; and, during the last quarter of the century, the dominant commercial and maritime policy outside of the British Isles has been one providing for the regulation of trade by tariffs, and for the promotion of the mercantile marine by postal payments and bounties. At the present time, the two most powerful commercial rivals of the United Kingdom are the United States and Germany; and their trade policy is one of regulation instead of freedom. It would seem, therefore, judging by results, that both the United Kingdom and her competitors have acted wisely, and that in both cases the means adopted were such as conditions demanded.

The third cause of the world’s commercial progress during the past century has been colonial expansion. Germany, France, and other countries, influenced by the great success of the United Kingdom, have established colonies in different parts of the world, and assumed control over uncivilized peoples, until there are now 125 colonies, protectorates, and dependencies. These 125 regions comprise two fifths of the land surface of the globe, and contain one third of its population. These colonies and protectorates import annually over $1,500,000,000 worth of commodities, and of this large sum more than forty per cent is bought from mother countries. The last nation to adopt the policy of colonial expansion is the United States, her principal colony, the Philippine Islands, having been made a part of her possessions because of our desire to secure a larger share of the trade of the Orient.