A history of commerce

by Clive Day

624. Commercial benefit of the canals.—The canals effected a reduction in transportation charges which placed trade on an entirely new footing along the lines that they covered. In contrast with the cost of ten cents per ton-mile, on the turnpikes, we find a cost of movement of about one cent, and tolls which brought the total charge to about three cents. The tolls varied on different articles and were not the same on different canals, but the total charges represented a great saving in transportation even in the early days of the canals, and tended to grow less with the passage of time. The crops which grew in abundance on the fertile lands of western New York had gone begging before the construction of the Erie Canal, and the inhabitants had been able to purchase few manufactured or foreign articles. A letter from the Genesee country (east of Buffalo), written in 1799, said that grain was so low in price as to be scarcely worth the raising, while European goods were very dear; it took the produce of one acre to buy a pair of breeches. Conditions had improved somewhat before 1825, with the extension of turnpikes and with the increase in the navigation of the Susquehanna River, but the Erie Canal brought nevertheless a new era of prosperity to this district, and first made its rich resources available for consumption in the New York market and for extensive export.

625. Canals less important than rivers for distant shipments.—Important as were the canals, their influence in this period was local rather than national. Managers were slow to adopt the practice of reducing rates on a long haul, to stimulate distant traffic, and the canals served mainly local needs. We read, it is true, of cotton being carried from Alabama to Philadelphia by canal, and of wheat reaching New York over the Erie route from Ohio and Indiana. It is noteworthy, however, that even in 1840 only one seventh of the freight carried on New York canals came from outside the State. The river system of the Mississippi proved still to be the most valuable outlet for the products of the great interior valley, and about 1850 the value of the wares which it carried to the coast was double that reaching the seaboard by the Hudson River and its canals. A line drawn east and west through the center of Ohio marked the commercial watershed between the competing routes; north of that line practically all goods were shipped by lake and canal, while south of it only articles like tobacco, wool, and manufactured wares were sent by that route, and most products were shipped by way of the Mississippi. Indiana and Illinois showed a still more decided tendency to the river route. In the reverse direction, however, the northern route, by canal and lake, had the advantage, and the movement to the interior by this route was double that ascending the Mississippi.

626. Demand for further improvement met by railroads.—Reviewing the substance of preceding sections, we find that of the new means of transportation adopted to develop the resources of the country and to make them available in internal trade and foreign commerce, none had yet proved adequate to meet the conditions. Transportation on the turnpikes was too expensive to permit the carriage of bulky freight over great distances. River navigation, valuable as it was in opening the interior to commerce, still was tied fast to channels cut by nature; the rivers must at least be supplemented by feeders and by connections across the country. Canals were of great service as supplements to the rivers, but they too, were restricted in their course by the conditions set by nature, and, like the rivers, could be used in northern districts during only part of the year. What the country needed was a means of transportation available throughout the year, free to follow the paths toward which the interests of merchants most inclined, and cheap enough to encourage the exchange of common articles between points widely separated. The need was met, in the course of time, by the development of railroads.

627. Early American railroads little used for freight traffic.—The operation of steam railroads began in this country and in England at almost the same time; the Baltimore and Ohio railroad was in course of construction in 1830, when the Liverpool and Manchester line was opened. In this early period, however, the railroad was a much more valuable instrument in the Old World than in the New. In England and other European countries the railroad found great manufacturing and shipping centers already established, with large volumes of valuable freight to be carried short distances; the task before it was comparatively easy. Conditions were somewhat similar along our eastern seaboard, but in the United States in general the railroad was wanted to develop agricultural districts with a comparatively sparse population, separated from industrial and shipping centers by hundreds of miles. The traffic offered by these districts could not bear the high charges imposed by railroads in their early period; these charges greatly exceeded those paid for canal transportation and seem in some cases to have equaled those paid for carriage on turnpikes. Aside from coal and cotton the early American railroads carried comparatively little freight; and they played but a slight part in the development of commerce.

628. Extension of the railroad system in the West after 1850.—In 1850 there were still few railroads west of the Allegheny Mountains. In contrast with nearly seven thousand miles of line in the States along the eastern coast the States of the upper Mississippi Valley could show little over one thousand. Not a mile of railroad had been built in Iowa and Minnesota, and there was no railroad connection with the East in all the country west of the Mississippi and north of the State of Missouri.

Conditions were ready at last for the extension of the railroad system through the interior of the country and the West saw many thousand miles of line constructed in its territory in the decade ending in 1860. The New York Central, the Erie, the Pennsylvania, the Baltimore and Ohio, and other lines united the roads of the interior with the East; many roads were built from Lakes Erie and Michigan to the Ohio and Mississippi rivers; while another set of roads extended north from the Gulf of Mexico, aiming to attract the traffic of the great valley southwards.

629. Effect of the improvements in transportation, especially marked in the following period.—The commerce of the country got the full benefit of the railroad system only after 1860, when various improvements led to a great reduction in freight rates, and stimulated an immense increase of traffic. The period before the Civil War must be regarded as one of preparation for the great commercial expansion in the period following; the lines were laid, in large part, but men had not learned to make the best use of them. Even before 1860, however, the railroad had become an indispensable instrument to the commerce of the country. While it did not displace other means of transportation, it forced them to improvement, and gave service in forms which they could not supply. There will be little space in the two following chapters to refer to the development of the means of transportation described here, but the student must bear in mind this factor, as contributing always and in very important measure to the growth of the country’s commerce. We may close this summary of the subject by giving an illustration of the effect of transportation on the value of the resources of Ohio; the price of farm produce in that State rose 50 per cent after the completion of the canals, while the railroads appear to have doubled the price of flour, trebled the price of pork, and quadrupled the price of corn.

630. Prosperity of the American merchant marine.—The period from 1815 to 1860, in which the country first grappled successfully with the problem of internal transportation, was also the period in which the American merchant marine reached the pitch of its prosperity. Even after the conclusion of peace in Europe in 1815, which subjected our ships again to the competition of foreign carriers and to the restrictions of other countries, American ship-builders and sailors were able to hold their own; and the period is marked by a great increase in our merchant tonnage. Down to about 1850 the wooden sailing ship was still supreme in its control of the ocean carrying trade. American builders developed the ship to its highest type, the clipper, and led the world in the art of naval construction. Their skill, and the cheapness of good ship timber, more than offset the higher prices which the tariff forced them to pay for materials and equipment such as iron, copper, cordage, and sail-cloth. The officers and crews of American vessels enjoyed an international reputation for their efficiency.