A history of commerce

by Clive Day

499. Sluggishness of industrial development.—At the time when England was building up her system of manufactures, when every decade was marked by some important step in industrial progress, France resolutely excluded herself from the influences which would have stimulated progress at home. While England was endeavoring to keep her improved machinery in the country, by forbidding export, France aided her by imposing on machinery duties running up to 100 per cent. Means to spin linen by machinery were invented by a Frenchman, Girard, in 1810, but were first utilized in England; and England could show nearly a million and a half spindles in 1849, against a quarter of a million in France. A Frenchman estimated in 1827 that the steam-engines in Great Britain amounted to a force of 6,400,000 laborers, while they amounted in France to but 480,000. About 1840 there were still less than 2,000 steam-engines in France. The French iron industry was far behind the English in efficiency and in output, but was secured the home market by protective duties, and built up large fortunes for the iron producers at a direct loss to the country estimated to be $10,000,000 a year, and an indirect loss far larger.

500. Effect of the tariff on commerce.—The effect of the tariff in checking commerce between the two great states in this period can be seen in the fact that in 1829 less than one seventieth of British exports were declared for France; England found better customers in Spain, in Turkey, or in Chile. The amount of trade was in fact somewhat larger, for smugglers evaded the restrictions of the tariff, and by a number of ingenious devices (including the use of trained dogs), succeeded in bringing wares to the people who wanted them.

This one example indicates how the French were losing the opportunities for commercial expansion which this period offered to them as to other peoples. No more striking commentary on the history of the commerce of France at this time can be furnished than the following fact: nearly sixty years after the French Revolution the special commerce of the country was only just beginning to exceed the figures which it had attained at the earlier date.

501. Reform of the tariff by Napoleon III.—The astonishing increase of French commerce in the decade 1850-1860 (from less than two to over five milliards of francs) was due chiefly to the reform of the tariff by Napoleon III. Attempts before this time to lower duties had failed because of the determined resistance and the strong political organization of the protectionists, but the new Emperor enjoyed a position of exceptional strength, and was not fettered by the dependence on the manufacturing class which had stopped action by the previous government. By his mere decrees he lowered or suspended duties on agricultural products and on important raw material (coal, iron, steel, wool, etc.).

502. Effect of the reform on commerce.—French industry and commerce, checked so long in their development, responded with surprising quickness. In a period of little over ten years (1847-1859) the steam power of France increased over threefold. The commerce with England, which in the previous period of twenty years had merely doubled, now quintupled in ten years. With Portugal and Greece commerce quadrupled; with Germany, Switzerland, Brazil, etc., it tripled; with Belgium, the Netherlands, Spain, Italy, the United States, etc., it doubled. French commerce recovered its lost ground so quickly that, according to a French estimate, it amounted to more than three-fifths of English commerce about 1860, and the country took easily second place among the trading countries of Europe.

503. The free-trade treaty of 1860.—At the end of the decade which we have been studying, in 1860, the movement toward greater freedom of trade progressed still another stage by the ratification of a treaty of commerce between France and England. Free traders, of whom Richard Cobden was the chief, convinced the Emperor that France would benefit by a further reduction of duties. Cobden asserted that French operatives worked 20 per cent more time for 20 per cent less wages, and paid upwards of 10 per cent more for their clothing than the same class in England; and promised the Emperor that the French would share in the advantages of the English if they would only adopt a similar commercial policy. The Emperor, moreover, was desirous of winning the good-will and support of the English to strengthen his international position; and agreed to the proposals partly on this account. England abolished the duties on a number of articles of French origin, and reduced the duties on wine and spirits; while France removed all prohibitions on trade, and scaled duties down to about half their former amount in commerce between the two countries. This treaty, which was to last ten years from its ratification in 1860, is one of the turning-points in European commercial policy; it marked the extension of the free-trade movement from England to the other states of Europe; and it inaugurated a succession of similar treaties on the part of France and other states on the Continent.

504. Results of the treaty of 1860.—There had, of course, been opposition in France to the further reduction of duties; and many people prophesied that the movement to free trade would entail the industrial ruin of the country. The results did not justify these predictions. Commerce expanded greatly, as was to be expected; it grew in the period 1859-1869 from 5.4 to 8 or from 3.9 to 6 milliards of francs, according as the general or special trade of the country is taken as the standard of measurement. This commerce, however, was serving French industry and agriculture, and not destroying them. There was a marked increase in the importation of the raw materials of industry; the amount of wool and silk brought into the country for manufacture more than doubled in ten years, and in spite of the disastrous effects of the American Civil War there was a considerable increase in the importation of cotton. The use of coal and iron, both important indexes of industrial development, extended largely; and the population engaged in industry and commerce grew by nearly a million workers in the period 1861-1866. The increase in the products of French industry found a market both abroad and at home. The exports of manufactures increased, it is true, but slowly except in the case of special products; but the consumption of manufactures within the country extended greatly, as new purchasers appeared for wares which formerly had been beyond their means.

505. Return to protection after the war with Germany.—It has long been the misfortune of France to have her commercial and industrial interests at the mercy of politics; and at this point in her growth her progress was stayed by the outbreak of the great war with Germany. From the direct losses of the war the country recovered with a quickness surprising to those who did not realize the thrift and saving power of the French people. The war led, however, to the overthrow of the government of Napoleon III, and in time to the overthrow also of the liberal commercial system which he had established. Though the commercial treaties were allowed to continue for a few years, the tendency was strongly toward protection. It was a period of bad times in business, and French agriculture was beginning to feel the competition of countries outside of Europe; the new French republic, with all its merits, lent itself too easily to the representation of class and sectional interests.

506. Growth of protective duties.—In 1881, therefore, a new tariff was established, which raised many duties about one quarter, though it allowed many of the higher rates to be abated by treaties with other states. Proposals to increase duties now multiplied. Not only manufacturing industry but also agriculture became clamorous for protection. The duty on a quintal (about 220 pounds) of wheat, which had been 60 centimes since 1861, was raised to 3 francs in 1884, to 5 in 1887, to 7 in 1894. While in the past the agriculturists had been free traders they had become by 1890 almost a unit for protection, whether they raised wheat or cattle, grapes or sugar-beets, hemp or flax. In 1892 an entirely new tariff was adopted, considerably higher than that of 1881, affecting some important raw materials, and not affording the same freedom in the negotiation of commercial treaties.

507. Attitude of the French toward commerce.—A writer who published a study of the French tariff system in 1892 thought that public opinion would force a revision of the recent tariff if it checked the country’s commerce. Such was actually its result. Exports and imports did not reach again the figures of 1892 for five and six years respectively. Nevertheless the protective duties were raised again in 1910 to a level far above that which prevailed in the neighboring states of northwestern Europe. The French had to choose between a career in commerce and the maintenance of the traditional organization. They could not extend their trade without lowering the barriers of their tariff. This step they were unwilling to take, apparently because it would have entailed efforts and sacrifices in the readjustment of their industries. The caution and disinclination to change, which mark the great peasant population of the country, appear to have determined the course of commercial policy, and to have decided the French to hold fast to what they had, rather than to take the chances involved in a struggle for a higher place in the open market of the world. In such a struggle they were at a disadvantage, because of the scarcity of their mineral resources and still more because of the many backward features in their industrial organization. On the other hand they could comfort themselves with the reflection that few if any of the neighboring states were qualified as were they to renounce the possible benefits of trade. The great agricultural resources of the country make possible an approach to self-sufficiency which elsewhere could not be considered.