A history of commerce

by Clive Day

515. Belgium: early industrial development.—Belgium is far more richly endowed with mineral resources; in spite of its small area it produced in 1912 more than half as much coal as France, and has also rich supplies of ore of iron, and other metals. Even before the full value of these resources was realized Belgium was a distinctly industrial state, and for many centuries Flanders and other districts have been noted for their manufactures. Belgium did not suffer, therefore, as did the Netherlands, from the period of French occupation; it was freed by the French from many trammels on industry dating from the gild period, and it found in France a market for its manufactures which enabled it to endure the restrictions of the Continental System. During the period of union with the Netherlands (1815-1830) Belgian industries continued to develop, with the aid of Dutch capital, commerce, and colonies; the districts represented by Ghent, Brussels, Charleroy, and Liege became widely known for the manufacture of textiles, iron wares, etc. Progress was checked for a time by the breach with the Netherlands (1830), but this was just the period when steam began to be applied to manufactures and to railroads, and with the aid of this new force Belgium quickly recovered her former position. The prosperity of Antwerp, the one important port of modern Belgium, was seriously threatened by the act of the Dutch in closing the Scheldt to navigation; but the Belgians were willing to pay for this means of access to the sea, and finally bought outright the privilege of using it.

516. Belgian commercial policy.—During the first decades of Belgian independence the tariff which had been inherited from the period of Dutch rule was made more strict, and before the middle of the century it had been changed so as to grant considerable protection to agriculture, industry, and the carrying trade. Belgium, however, like the Netherlands, is too small a country to be able to afford high protection. After 1850 a free-trade movement led to lower duties and to liberal commercial treaties, the policy which has since been followed in the main. Many influences were at work in this period to further commerce, chief among them the technical improvements in manufactures and transportation; so it is dangerous to argue that the prosperity of Belgium in the following period was due to the policy of greater freedom of trade. It is certain, however, that Belgian commerce could not have attained the development it did without this policy.

517. Survey of the recent development of Belgian commerce.—Giving figures roughly in millions of dollars, the total commerce rose in the protectionist period, 1840 to 1850, from 70 to 80. In the following ten years of transition it rose to 190; in 1880, after twenty years of nearly free trade, it had risen to 560, and in the decades since then the figures have been 600, 856 and 1480. To this commercial expansion the port of Antwerp owed its position as second only to Hamburg among the ports of the Continent. An analysis of the different items of which the recent trade of the Belgians was composed shows that their strong exporting industries were manufactures (yarns and textiles, iron, glass, etc.), while they were obliged to import a large part of their food supply, and of the raw materials for their industries.

518. Switzerland: obstacles to industrial development.—Another country, small in area but with a commerce exceeding that of many greater states, is Switzerland. With its agricultural capabilities restricted by the area covered by mountains, and with no important mineral resources, Switzerland has to depend upon the character of its people as its chief industrial asset. In the early part of the nineteenth century it suffered not only from the restrictive tariffs of the states surrounding it, but also from the fact that it had itself not become a political unit, and was cut into small pieces by dues and tolls on trade. The hindrances to internal trade were finally swept away in 1848, when Switzerland became a federal republic; and the people made use of their greater freedom at home and of the lowering of tariff rates abroad to extend their commerce rapidly.

519. Position of the Swiss in recent commerce.—Switzerland has developed almost entirely along the line of manufactures. The agricultural population has actually decreased since 1870, as it has become easier to purchase food products from abroad by the export of manufactured products: silk and cotton textiles, clocks and watches, etc. Swiss industries have not reached the development of those in more advanced countries, and much of the work is still done outside of factories, and with simple home machinery. These conditions imply hard work and low returns, but the Swiss must choose between securing in this way some share in the world’s commerce, or starving in the vain attempt to support themselves by the scanty resources of their own country.

520. Austria-Hungary: survey of commercial development.—The state of Austria-Hungary, though it was in size the third in Europe, ranked only seventh in commerce in 1912, taking place after the Netherlands, Belgium, and Russia. Reference to an earlier chapter, describing conditions before 1800, will suggest that Austria-Hungary entered the nineteenth century handicapped by its economic and political conditions. It required roughly a full half of the century to remove the more serious obstacles to progress, and the latter half of the century has not given time enough to enable the people to win a place with their more advanced neighbors of the West of Europe.

521. Obstacles to the growth of commerce and industry.—Of the difficulties under which commerce labored the following are among the most important: (a) the character of the government, which was a personal absolutism like that in France before the French Revolution, absorbed by the family interests of the ruling house and by questions of foreign policy, and attending but slightly to the interests of the people as a whole; (b) the system of prohibitive tariffs, which was maintained more strictly than in any other state of central Europe; (c) the separation of different parts of Austria-Hungary by tolls and tariffs; (d) the slight development of manufacturing industry, due not to the lack of natural resources but to the backwardness of the people and to the persistence of restrictions dating from the period of the gilds.

522. Gradual removal of these obstacles.—(a) The revolution of 1848 began a movement for constitutional government, which led in time to the fall of absolutism and the introduction of modern representative assemblies. At the same time, however the spirit of nationalism was awakened among the various peoples, and their conflicting claims (especially in Hungary and in Bohemia) have seriously affected the working of the parliamentary system. (b) The prohibitive system, which had absolutely excluded the most important manufactures or had allowed them to be imported only as a special favor and by payment of high duties, was abandoned after 1848 for a more moderate system of protection, and commercial treaties with various states were made to facilitate the movement of wares. (c) The freedom of internal trade was secured for the Austrian half of the monarchy in 1826, and for the whole state (with slight exceptions) in 1851. (d) The restrictions on industry continued even after 1850. A man could not exercise any trade requiring the use of a machine, or any but the simplest household employments, without securing a public license; a man might exercise only one trade, and a cabinet-maker might not upholster the furniture he made, nor might a baker make confectionery. Most of these restrictions were abolished in 1860.

523. Growth of commerce since 1850.—Commerce and industry, which had developed with exceeding slowness before 1850, were quick to respond to the change in conditions, aided by the extension of the railroad system which marked this period. In spite of heavy taxes and a depreciated paper currency there was an extraordinary increase of energy and growth of business. Foreign trade more than doubled in twenty years, and each part of the monarchy developed along the line of its strongest resources; the Austrian lands, especially Bohemia, extended their mines and built up their backward manufactures, while the Hungarian lands exported increasing quantities of agricultural products (wheat, flour, stock, etc.). A reaction toward protection, felt since the ‘70’s, did not check the growth of commerce; a more serious danger appeared to be the possibility that a tariff barrier would again be established between the two parts of the monarchy as the result of the national aspirations of the Hungarians.

524. Position of Austria-Hungary in recent commerce.—Austria-Hungary carried on by far the largest part of its commerce with its neighbor, Germany, and found the greatest hope of the future in building up the trade with the Balkan states, and along the route to Salonika and Constantinople. Hampered by its position, it has not succeeded, in spite of generous bounties, in developing its shipping trade to important proportions. The first ships to pass through the Suez canal in 1869 were three steamers of the Austrian Lloyd, but in 1913 less than one twentieth of the tonnage using the canal was Austrian. The two ports that served the monarchy, Trieste for the Austrian part and Fiume for the Hungarian, were favored by every sort of assistance that the government could render, but remained still ports of the second class, surpassed in importance by a score of other ports in Europe.