371. Effect on commerce of technical progress.—It is now time to discuss the effects on commerce of the technical changes which have been described in preceding chapters. Following back the substance of those chapters, the effects may be briefly summarized as follows. First, an improvement in the means of communication and transportation which has brought men and goods of different regions vastly nearer to each other than they have ever been before in the world’s history. Second, a control over the forces and materials of nature which has enabled men to manufacture old wares more cheaply and new wares which were before unknown. Third, as a result of the development of the transportation system, the settlement of new countries with virgin soil and rich mineral resources, and the connection of these countries with each other and with the countries of the Old World.

Of these three factors any one alone would be a powerful stimulus to trade; the three working together account for the astounding growth of commerce during the nineteenth century. Comparing the present and earlier periods we may characterize the advance by saying that in the Middle Ages commerce concerned itself almost entirely with the luxuries of life; that in the modern period (1500-1800) it served mainly men’s comfort; while in the recent period, since 1800, it has become necessary to the very existence of a considerable part of mankind.

372. Growth of the sphere of commerce and resulting specialization of production.—The world has gone far toward realizing the ideal of the early free trader, that wherever a man might be, he should share in the productive advantages of all other men, wherever they might be. Customs tariffs have been able to check the movement of commerce; they have been powerless to stop it. The sphere of ordinary trade, which was once the manor, a mere hamlet or village; which grew in time to be the town with its surrounding country; then included the whole nation; and became in the modern period international,—this sphere of regular and ordinary trade is now the world. Whole countries now specialize in the production of different articles, as individuals or small districts once did.

Northwestern Europe has become a great factory, drawing its food supplies and raw materials from distant parts of the world, and exporting manufactured products in exchange. Beside Europe stands the continent of North America, supplying in large part the needs of its own people for manufactures, and producing a surplus for export. North America, indeed, stands in one aspect above Europe, for it has unexhausted stores of natural resources which it lavishes on other parts of the world less richly endowed. The other continents take subordinate positions. They are enabled by commerce to procure from Europe and North America the manufactured goods which they require, and specialize in the production of various food supplies and raw materials for the means of purchasing these goods.

373. Abolition of the slave trade.—The description of the present world-organization of production, and of the exchange of wares to which it gives rise, belongs to the department of commercial geography. It is proper here, however, to call attention to some of the marked changes in the wares of trade which have taken place since 1800.

One ware which was, before 1800, of great commercial importance, and which yielded immense profits to those who dealt in it, has disappeared with the abolition of the slave trade by all civilized nations. Long before the abolition of slavery itself, humanity revolted against the horrors of the “middle passage,” and the protests took effective form about 1800; the states of Europe and America agreed, one after another, that the slave-trade under their flags, and for the supply of their territories, should cease.

374. The great wares of commerce. Coal.—For the purpose of a summary survey the most important wares of commerce before 1800 can be designated as belonging to the two classes, colonial products and textiles. We shall have to note, in ensuing sections, striking changes affecting both of these classes, and the addition to the important wares of commerce of two new classes, mineral products and foodstuffs.

Taking first the mineral products, and including coal with them, as common usage justifies us in doing, we find, at first sight, that this article takes a far lower rank among the modern wares than we should expect from its commanding importance in industrial life. There has been, it is true, a great growth in the coal trade, and considerable quantities are exported from England, Belgium, Germany, on occasion the United States, etc., for use in countries lacking coal mines, or at sea. There is an immense internal commerce in coal. In 1900 more than half of the tonnage carried on the railroads of the United States consisted of mining products; and of these coal certainly formed a very considerable, perhaps the major, part. Still coal does not rank among the chief wares of foreign trade.

375. Metals and Manufactures.—An explanation of the comparative insignificance of coal in foreign trade is found in its bulk. An active industrial people can compress the value of coal, as it were, by using it near the mines for the production and transformation of other materials. Coal is transmuted into iron and manufactures, and so loses its identity, though it remains still the real power behind the exports of that character.

Commerce in iron and steel, and the manufactures depending on them, has increased enormously in the course of the century, as the reader may readily suppose. Supplies of iron and machinery flow from the centers of production to the less advanced countries, and the simpler tools penetrate every nook and corner of the earth. Copper has grown greatly in importance, as its use for electrical appliances has extended, and now forms a considerable item in exchanges of countries like the United States and Germany.

376. Petroleum.—Nor is the new commercial significance of mineral products confined to the metals. In the last half century the trade in mineral oil (petroleum, “kerosene”) has become a necessary part of the world’s economy. One result of the great improvements in manufactures and transportation was a demand, from all sides, for more light. Artificial illumination was needed for the full utilization of machinery and means of transportation; and to provide light for the newspaper reading, study, and recreation to which people gave themselves in increasing numbers. The first half of the century witnessed many improvements: the invention of matches, the introduction of glass lamp-chimneys, the spread of gas lighting, and the use of new oils for illumination. No previous advance, however, compares in importance with the discovery that crude petroleum could be made the source of a cheap and efficient means of illumination. The development of the petroleum trade in the space of little more than a generation is a matter of common knowledge, and is readily explained by the importance of the service which it performs.

377. The grain trade; slight development before 1800.—Important and characteristic as the trade in mineral products has grown to be in the nineteenth century, it is still far from first place among the branches of the world’s commerce. The primacy belongs, without question, to the trade in foodstuffs, especially grain.

Before the development of the modern system of transportation commerce in foodstuffs concerned itself largely with the condiments rather than the aliments, with spices and seasoning rather than the substantial food staples. Even at a freight rate of 15 cents per ton-mile (and the expense of transportation on European roads before 1800 was certainly far above that), wheat at $1.50 a bushel would be limited to a trade-radius of 330 miles; the whole value of the wheat would be consumed in transporting it that distance. Transportation by sea was, of course, much less costly, and enabled limited amounts of food to be imported under favorable conditions. Still, food has to be grown on land, and often on land distant from any means of water carriage; and the countries of Europe were forced in general to a policy of self-sufficiency, raising the requisite supplies of food at home under conditions however unfavorable. We may appreciate the short space of time separating us from this state of affairs by noting that in France, even in 1817, people were dying of famine in Lorraine, while wheat was abundant in Brittany; the carriage of provisions from one province to the other quadrupled prices. In Russia, even later (Pskov, 1845), the same conditions prevailed.

378. Extent and importance of the grain trade at present.—Grain formed, therefore, one of the least considerable of the wares of foreign commerce before 1800. A French economist estimated the international trade in grain at 30 million bushels at most. From that figure, comparatively insignificant, the grain trade of the world had risen, even in 1887, to over 1,500 million bushels; grain formed then, in value, almost one tenth of the total of the wares of trade, and in importance far exceeded any other ware. The expense of transportation had undergone such a vast diminution that one day’s wages of a common laborer would pay for the carriage over a thousand miles of all the grain and meat which he needed for a year’s subsistence.

It would be interesting, if time permitted, to note the far-reaching social and political effects of this revolution. We must, however, confine ourselves to its economic aspect. The English people, to take the most striking example, depend for more than half of their food supply, perhaps two thirds of their wheat supply, on imports from abroad. It is said that in every month in the year wheat is harvested in some country, of the northern or of the southern hemisphere, for the English market; a Floating Cargoes List reported 163 vessels bound for England with cereals, at sea at one time. As formerly the citizens of London depended on the farmer of a nearby county for the supply of his daily bread, so now the inhabitants of England in general depend upon people in the Dakotas, in California, in the Argentine Republic, in Egypt, in India, or in Australia. The Englishman is enabled, by commerce, to share in the agricultural advantages of any and all those countries; he applies himself to his specialty and exchanges the product for his food.

379. Commerce in other foodstuffs.—In some respects even more striking, though on the whole of far less importance, has been the growth of foreign commerce in stock and meat. About 1800 the common way of marketing meat was to drive it to market on the hoof; the trip might consume a number of days, and the animal would arrive in poor condition and with weight diminished. For transportation to distant countries meat had to be preserved by pickling in brine. Fresh meat of good quality was a luxury, and the average consumption of meat was small. Modern progress has solved the problem of using the great grazing spaces of North and South America and Australia for the supply of distant peoples, in two ways. Improvements in transportation by land and sea have allowed the carriage of live-stock for thousands of miles, in good condition. The use of refrigerating appliances, especially artificial refrigeration by means of steam power, has permitted the carriage of dead meat the same distance without deterioration. Furthermore, the application of scientific principles to the preservation of meat has enabled supplies of that article to be utilized which would otherwise be wasted, and has contributed a new form of ware to modern trade. Other foodstuffs (fruit and fresh vegetables) have profited by similar advances in the means of transportation and preservation.

380. The textiles; changes in relative importance.—In this brief survey only two more classes of wares may be noted, the textiles, and colonial products. Trade in wares of both these classes has undergone a great development and important transformation in the course of the century, though it presents no such revolutionary changes as in the case of wares described above.

The textiles have continued to be among the most important wares of commerce. A population, advancing rapidly not only in numbers but in average purchasing power, has demanded constantly increasing supplies of clothing material. There has been, however, a noteworthy change in the kind of fabric demanded. Measuring by the weight of the raw material consumed, the English textiles about 1800 were composed as follows: over two fifths woolen, over two fifths linen, considerably less than one fifth cotton. Note now the change as shown by conditions about 1880: wool made up one fifth of the total, linen little more than one tenth, while cotton had risen to two thirds. For some purposes cotton fabrics are better than those of any other material, for other purposes they present a cheap and satisfactory substitute; and consequently they have been able to displace other textiles to a large extent.

381. Commerce in raw materials for the textile manufacture.—The rise in importance of cotton is partly, not entirely, responsible for a great change in the character of the textile trade. With the exception of silk, which has always, because of its high price, been of restricted use, the raw materials for the textiles had formerly been produced in the country of manufacture. England and the Netherlands, it is true, had begun before 1800 to import wool from Spain, but wool was then an object of internal rather than foreign trade, in general, and flax was raised for home consumption in practically all the European countries. The introduction of the cotton manufacture in Europe introduced a change, for in the case of this textile the raw material as well as the finished product was necessarily a ware of foreign trade. The past century has witnessed a vast increase in the commerce in raw cotton, and, moreover, the establishment of an important trade in raw wool. In 1850 Europe still supplied four fifths of the wool consumed, and has continued since that date to produce about the same quantity as then. The proportion which it contributes to the total supply has, however, declined to less than one third. There has been an immense increase in the production of wool in South America and Australia, and a less notable advance in the amounts furnished by Africa and Asia. At the present time, therefore, raw wool flows to Europe from all the other continents, and returns to them in the form of finished goods.

382. Colonial products.—The last class of wares to engage our attention will be that of the so-called colonial products, of which tea, coffee, and sugar are familiar examples. The wares received their name because, before 1800, Europe depended entirely on distant parts of the world for their supply. The reader will remember what an important part they played in the commerce of countries like England and France, in the modern period.

At least one ware of considerable commercial importance has been added to the list of colonial products in the course of the century. Rubber (using that word to cover also gutta-percha, an article with somewhat different qualities), counted for little in commerce before 1830. Soon after that time, however, it was regarded as “promising,” and the discovery of the vulcanizing process by Goodyear enabled manufacturers to gain the full benefit of its valuable qualities, elasticity, impermeability, etc. It is now an indispensable article in many applications, and though the production has risen to a hundred million pounds a year the demand for it has increased still more rapidly, and the price has risen.

The old wares have not only retained but also increased their importance as elements in human consumption. The people of Germany consumed, on an individual average, about 2 pounds of coffee in 1840, 6 pounds in 1900; 4 pounds of sugar in 1840, 30 pounds in 1900. Figures from other countries present, with some variations, the same growth in demand. The people of the United States now demand over 10 pounds of coffee per capita, and over 70 pounds of sugar.

383. Rise of beet sugar, and effect on commerce.—One of the colonial wares, sugar, demands special attention. The methods of production have undergone a complete change in the course of the century, and the former currents of trade in sugar have, in some cases, actually been reversed. Before 1800 people relied entirely for their sugar supply on the cane plantations of the colonies. It was known already, however, that beets contained a large percentage of sugar, and during the Napoleonic wars, when the Continent was closed in large part to colonial imports, an attempt was made to secure sugar from this native source of supply. The attempt was sufficiently successful to stimulate further efforts. With the aid of liberal protection from the governments a beet sugar industry was established on the Continent in the first half of the century. That industry supplied in 1860 one quarter of the total amount of the sugar of the world, in 1882 one half, in 1900 nearly two thirds.

The change in the method of manufacturing sugar has had far-reaching effects on commerce. Countries with cane plantations have seen the price of sugar fall under the increased output of European factories, equipped and operated with scientific accuracy; they have lost a large part of their former market; some of them have been almost ruined. England, which once made great profit by importing cane sugar and distributing it among the other European countries, now, on the contrary, goes to the Continent for the larger part of its sugar supply; and continental states like Germany and France export sugar instead of importing it.

384. The European sugar bounty system.—The reader should, however, note carefully that these changes were due in large part to a system of protection which had grown to formidable proportions. European governments have found in sugar a convenient object of taxation, but have desired at the same time to further the growth of the home sugar industry, and to secure for it a market in foreign countries. They have sought to combine the two objects by taxing the home consumer, and by remitting the tax and giving special premiums to the exporter. A pound of sugar cost far more in a country of Europe where it was manufactured, than in the country to which it was exported; every pound sold at home had to bear a tax, and every pound sent abroad received a premium which enabled it to be sold more cheaply. The orange marmalade industry, for which the town of Dundee is famous, could flourish in spite of the expense of transporting the fruit from Spain to Scotland, because sugar was artificially cheap in the English market. Such a condition of affairs was admitted to be unwholesome; in some aspects it became absurd. The burden of the bounty system became intolerable and the governments of the Continent agreed upon measures of reform, which went into effect in 1903.

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