CHAPTER XIX
THE ENCOURAGEMENT AND REGULATION OF
COMMERCE.
The purpose of this chapter is to explain what commerce is, how it is regulated, and what the government does to promote it.
Who are engaged in commerce.
The Purposes of Commerce.—The people of the world spend a large part of their energy in supplying their material wants, including food, clothing, and shelter. We commonly think of the farmer and the manufacturer as the ones chiefly engaged in this task, but if you stop to think of it you will quickly realize that the farmers could not feed the world nor could the manufacturers clothe it without the aid of another important class, which includes merchants, traders, transportation workers—in a word, all who are engaged in commerce. The purpose of commerce is not to create things but to put economic goods into the hands of those who need them. It places commodities where they are wanted at the time when they are wanted. |Commerce produces values.| In this sense commerce is a great producer, a producer of values. It fetches the raw material from the mines or agricultural areas to the industries. It brings the products of the factories to the merchant and from the merchant to the homes of the people. It helps to adjust the supply to the demand. Without commerce there would be an abundance of things in one place and a shortage in another. Commercial organization permits every part of the country, and indeed every part of the civilized world, to produce the things which it is best fitted to produce and to use these things in buying goods made elsewhere. Florida grows oranges and Massachusetts makes shoes, but through channels of commerce each secures what it needs from the products of the other.
Commerce in its earliest forms.
The Development of Commerce.—Now although the advantages of commerce are so easy to realize, the commercial system of the modern world took many centuries to develop. Primitive people did not have many wants and all of them they supplied by their own exertions. Each little group of people, each tribe or village, met its own needs. Then trade between different villages and tribes began. It grew slowly in the early ages because there were no easy means of transporting goods, and because neighboring tribes were so often hostile to each other. This early trade was conducted by barter, the direct exchange of one article for another, there being no general use of money as a medium of exchange.
As time went on the area of trade widened until it covered whole countries, and finally expanded into international trade or commerce between different countries. |Inventions which have helped commerce to grow.| This widening kept step with improvements in the methods of transportation from pack-horse to wagon, from wagon to railroad, and from sailing vessel to steamship. The expansion of trade was also aided by the growth of strong governments which protected the trader and made the paths of commerce safe. Likewise the general use of money facilitated the operations of trade; so did the creation of a system of commercial credit. Without railroads and steamships, law and order, money and credit, it would not be possible to carry on commerce as we have it today. If the world can feed and clothe and shelter an enormously greater population than it could two hundred years ago this is not because the people work harder; it is because they work more intelligently and because they have created that gigantic system of economic co-operation which we call commerce.
Commerce includes exchange.
The Scope of Commerce.—It is an error to suppose that commerce is concerned only with the transportation of goods. Its scope is far wider. Commerce includes not only the moving of goods but the whole process of buying and selling. Wholesalers, jobbers, retailers, together with all those who work for them are engaged in commerce. Not only are the steamship lines, the railroads, and the motor trucks entitled to be called agencies of commerce, but the telegraph and telephone systems as well. The pipe lines which carry oil from the depths of the earth to the great cities are instrumentalities of commerce; so are the gas mains in the streets, the subways, and the street cars. The postal service, likewise, is one of the most important factors in expediting commercial transactions.
It depends upon currency and credit.