A history of commerce

by Clive Day

580. Relatively great importance of waterways.—Like the people of the Middle Ages, the inhabitants of the United States at this period were driven to the use of water transport by the difficulty of transportation on land. Rivers which are used now only by canoes and pleasure boats were then important means of communication and transportation. The Connecticut River has now a scant traffic as far as Hartford, about forty miles from its mouth; in 1816 we read, “The Connecticut River is navigable 200 miles above Hartford, for Boats, of 15 tons, and 50 miles higher, for Floats and Pine Timber”; large quantities of potash were carried down the river even from the Canada line. The Hudson and other rivers were the channels through which export products were collected and brought to the sea, and the farmers of central and western New York sent their wares to market by rafts and “arks” on the Delaware and Susquehanna. Waterways were of especial importance in the southern States, where the means of land transportation were even less developed than in the North; tobacco was brought to the wharves on inlets and rivers by “rolling-roads,” rough tracks over which the hogsheads were rolled with the assistance of a horse.

581. Importance of the country store.—The great institution of trade at this period was the country store, which collected the surplus products of the townspeople and gave them in exchange the wares imported from abroad. Every town of any size had one of these stores, and only the largest towns had distinct shops for the sale of special articles. The stock in trade of one of the typical country stores included all of the articles which have been mentioned among the imports of the country: sugar, molasses, tea, coffee, metals, and hardware, cloth, thread, books, glass, earthenware, etc. The list on the other side of the store-keeper’s books would be as long, for it included all the export products of the country, and some wares which were sent to market in the large towns or in other States. The merchant must always be prepared to receive in pay for his goods “Grain of all kinds, beef, pork, poultry, cheese, butter, eggs, nuts, berries, hides, tallow, candles, lard, domestic flannels, feathers, quills, braided straw hats, potatoes, apples and other fruits, both green and dried, home-made brooms, flax and flax seed, cider and domestic wines, etc.” At the period which we are studying, well past the close of the colonial period, barter was still the usual form of exchange, and money rarely passed at the transactions in the store or in the trade between the townspeople and the village artisans.

582. Benefits and disadvantages of the country store.—The country store was the focus of the village, not only in economic but in political and social life as well. There was no better training school in the world for the study of human nature and the development of business sense. Practically all of the business life of the times was concentrated in these stores, and it is, therefore, not surprising, that few men rose to eminence later in the mercantile world who had not passed a period of apprenticeship in one of them. Charles Tiffany, Levi P. Morton, E. D. Morgan, H. B. Claflin; of a later period Marshall Field, Pullman, Pillsbury, Armour, J. D. Rockefeller, J. J. Hill, and many others; all these rose from the position of clerk in a general store to the place which they attained in later life.

From the standpoint of the villagers, however, it was a great disadvantage to have the market for their produce restricted to the store in their immediate vicinity. The store-keeper in the smaller towns had no competitors, and enjoyed a practical monopoly of trade of which he took full advantage in driving his bargains. In the northern colonies, where the difficulties of transportation were leveled by the snows of winter, the people could attain a certain measure of independence of the country store by making market trips to one of the larger towns. Neighbors would agree upon a date and set off, sometimes in a troop of fifty or sixty. They loaded their sleighs with a supply of food for the journey, and with the produce of the farm and household, and sought out the nearest large town, Portland, Newburyport, Boston, Providence, Springfield, Hartford, etc. In one of these market centers they could make much better bargains than at home.

583. Relative smallness of interstate trade.—When the products of the country had been collected at the large coast towns by the farmers and store-keepers, they were, for the most part, exported to foreign countries. Interstate commerce was as yet comparatively small. There was, it is true, an active coasting trade, but this was employed chiefly in the collection and distribution of goods along short stretches of coast. Small vessels plied frequently from the large ports like Boston, New York, Philadelphia, and Charleston, to the country districts on either side, but rarely made extensive trips, as from Boston to Charleston, for instance.

Commerce between States as distant even as Massachusetts and South Carolina existed and was by no means insignificant in absolute amount. The northern colonies sent a part of their surplus of rum, live stock, dairy products, and home-made cloth to the South, and brought back tobacco or bills on England which they could cash. Still, comparing this trade with other elements of internal trade, with the foreign commerce of the time, or with interstate commerce of later times, the striking thing about it is not that it was so large, but that it was so small.

584. Share of different States in foreign commerce.—The relative contributions of different parts of the country to its foreign commerce can be shown by the following summary, giving the exports by localities in the year 1791. The chief States ranked as follows, giving values in millions of dollars and indicating the leading ports in parenthesis: Pennsylvania, 3.4 (Philadelphia); Virginia, 3.1 (Bermuda Hundred, Norfolk); South Carolina, 2.6 (Charleston); Massachusetts, 2.5 (Boston); New York, 2.5 (New York); Maryland, 2.2 (Baltimore). No other State or port exported as much as one million; and exports from all the other States together amounted to little over one tenth of the total of nineteen millions.

The striking feature of the table is the relative importance of the southern States in foreign commerce, an importance which they were destined to hold for a long time to come, as the cotton industry was developed. It must be remembered, however, that the figures refer only to the export trade, and that there would be considerable changes in rank if we could include the import trade. Taking as a rough means of measuring imports the amount of duties collected, we find, for example, in the first year of the national government, that though Pennsylvania again headed the list, the second and third in rank were New York and Massachusetts respectively, while the southern States ranked lower by very considerable amounts. This period which we are studying was, moreover, one of rapid change, marked especially by the development of the central and northern colonies. Taking the year 1795, when these colonies were profiting by a great increase in their food exports, and when the cotton trade was still undeveloped, New York had risen to the second place in exports and Massachusetts to the third.

585. Development of the chief seaports into cities.—The seaports named in the preceding section had gained from trade an amount of wealth and population, which, however small it may seem from the modern standpoint, put them in a class above the ordinary towns, and made them the representatives of a more advanced business organization. The most populous of these places had in 1790 a population of only about 30,000 (in thousands, New York 33, Philadelphia 28, Boston 18, etc.); and the total number of people living in towns of over 8,000 inhabitants was still only about 130,000. In other words, only one person in thirty lived in a large town or city. The budding cities retained many of the rural characteristics of the towns from which they had grown. A mere beginning had been made in paving the streets, and many people still kept kitchen gardens. The price of provisions, however, was rising rapidly, and the cities had become dependent on trade with the country districts for most of their supply. Cattle were fattened in the Connecticut valley for the New York and Philadelphia markets, and wood for heating and building was brought by coasting vessels from considerable distances.

The large towns could boast of a diversified industrial population, in which many special branches of manufacture were represented, and of numerous shops; Boston was credited with 366 stores in the enumeration of 1789. The first commercial bank of discount and deposit in the United States began operations in Philadelphia in 1782, and about 1800 there were 33 banks of this kind in the country.