A survey which omits from consideration trade across land-frontiers, and considers only sea-borne trade, is even more impressive. Of the total sea-borne trade of the world in 1912 it is estimated that 15% (in value) was between countries within the British Empire, and 39% was between the Empire and foreign countries. Thus the trade of which one or both terminals lay within the Empire was over half of the maritime trade of the world. The trade of which one terminal was in the United Kingdom amounted by itself to about 40% of the world’s total sea-borne trade.
442. Chief causes of the rapid development of English commerce.—The causes of this development may be summarized briefly as follows: (1) The English people were the most advanced, in industrial and mercantile ability, of any people in the world. They had the start on others in manufactures and trade, and reaped the benefits of their early training in this period. (2) The geographical situation of England, and the physical resources of the country, especially its coal, made the English superior to most peoples and equal to any, in this age of transportation and manufacture by steam. (3) The commercial policy of the government allowed the people to make the most of their advantages. Toward the close of the eighteenth century an English statesman had told Benjamin Franklin of his idea “to make England a free port, for which he said the English were especially fitted by nature, capital, love of enterprise, maritime connections, and position between the old and new world, and the north and south of Europe, and that those who were best circumstanced for trade could not but be gainers by having trade open.” This idea waited long for its realization, but on that account led to the more rapid progress when it was carried into effect. Within five years of the repeal of the corn laws exports rose fifty to one hundred million pounds sterling per annum; manufactures and trade developed by leaps and bounds. Free trade alone cannot be credited with all the progress that England made in this period. It was, perhaps, the least of the three factors enumerated, but still it was of such importance that the other two factors would have been of much less effect without it.
443. Character of English exports.—This trade had now in a more pronounced form, the characteristics which it had been gradually assuming and which make it one of the most remarkable examples of advanced commerce in the world. Considering first the exports, we find that over three-fourths of them (in value) have consisted of wares wholly or mainly manufactured. Only one raw material has gone out in great quantity; this is coal, which has contributed about one-tenth of the total value of exports. Aside from coal few wares, and those of relatively slight importance, have left the islands in their crude form.
444. Leading items among the exports.—Cotton manufactures kept their place at the head of the list of exports, comprising about one quarter of the total. England in 1913 exported the enormous sum of over seven thousand million yards of cotton cloth a year. The exports of iron and steel and their products rose in this period to the second place; England was now purveying to other nations the means of raising the structure on which modern manufactures and transportation are based. The growth in the exports of machinery is especially striking; this item increased over fivefold within the fifty years to 1900, and doubled again in the short period before the outbreak of the war. Below these leading items come others with which we are already familiar (woolen and linen manufactures) and some which had gained promotion on the list of exports; leather goods, chemicals, jute manufactures, pottery, etc.
445. Imports; prominence of foodstuffs.—The fact suggested by the list of exports, that England has specialized more and more in manufactures, is borne out by the list of imports during the past half century. Since the adoption of the free-trade policy the English people has been freed from dependence on the home supply of food and has supplied its necessities by purchases abroad. Among the imports, therefore, we find that the largest item is that of foodstuffs, which has grown rapidly both in its absolute value and in its proportion of the total imports. In contrast with the medieval period, when only luxuries like wines and spices could pay for their transportation, we find now the great food staples flowing to England from countries thousands of miles distant. Improvements in transportation, due especially to the use of steam, have enabled bulky cargoes to pay for their passage, and the weight of the imports in tons has increased much more rapidly than their value. Improved means of transportation and preservation have moreover enabled the English to import perishable articles like meat, fruits, and vegetables, and dairy products; and the imports of these wares have increased from ten to twentyfold in weight.
446. Imports of raw materials and manufactures.—The same conditions have affected the imports of raw materials. A century ago the manufacture of iron from imported ore would have been thought an absurdity, but it has become a regular practice now that freights are so low; and the import of minerals is a respectable item in a list in which the raw materials for the textile industry are still, of course, most important. Free trade encouraged also a great increase in the imports of manufactures, which grew nearly tenfold in the fifty years to 1900, though they still were less important than foodstuffs and raw materials. The largest item among them after the crude metals, was silk, for the manufacture of which other nations have always shown more aptitude; but the list included woolens, hardware, leather (boots and shoes), paper, and many other items.
447. Explanation of the excess of imports over exports.—A feature of England’s foreign trade deserving comment and explanation is the great excess of imports over exports. It is natural to expect that these two items, which seem to represent the two sides of a balance sheet, should be nearly equal to each other; but in fact the value of exports has for many years been far below that of imports, and the difference in the years toward 1900 amounted to the enormous total of $700,000,000 to $900,000,000 a year.
England did not receive this surplus of goods as a gift, but earned it by services in the past and in the present which put other countries under obligations to her. The English had invested enormous sums abroad, and had the right therefore to interest and dividends; their merchant marine did a large part of the carrying trade of the world, and naturally had a large bill for freight to render to other people; London was the financial center of the world, and made the foreigner pay tribute for the services and commissions executed for him. There were some items on the other side of the account, but on the whole England had the right every year to take from other countries in the form of goods vastly more than she exported to them.
448. Detailed items in England’s international balance.—The items which go to make up the credits and debits of England in relation to other countries may be set forth in the form of a balance sheet, as in the table below, which gives the estimate of these items for the year 1910. Figures are given in round millions of pounds sterling.
| Credits | Debits | ||
|---|---|---|---|
| Exports of merchandise | 430 | Imports of merchandise | 678 |
| Re-exports (foreign mdse.) | 103 | Imports of bullion | 71 |
| Exports of bullion | 64 | ||
| Income from investments | 178 | Capital invested abroad | 170 |
| Earnings of shipping | 100 | ||
| Banking and business earnings | 55 | Earnings due foreigners | 15 |
| 931 | 934 | ||