440. Development of English commerce since 1850.—An accompanying table sets forth the course of English trade down to the outbreak of the World War. The figures refer, as in the previous table, to imports for consumption in the country, and to exports of British and Irish produce. To indicate, however, the share of commerce which the English enjoyed merely as middlemen I add a column of re-exports, foreign and colonial wares imported but shipped away again. If the amount of these wares be doubled (since they figure both as imports and exports), and added to the other items, the sum gives the gross foreign trade (excluding that in precious metals). The system of valuation of imports changed in 1854; under the old system of “official” values the imports of that year would have been entered at twenty-eight million pounds less than under the new system of giving the “real” values. This table, therefore, is not directly comparable with the table of the preceding chapter; and to remind the student of this I have left a few years vacant, making a gap between the two tables.

441. Importance of England and of British Empire in trade of the world.—A mere glance at this table will be sufficient to show the progress that has been made since 1850. Some idea of the importance of this trade, not only to England but to the world at large, can be gathered from the fact that it amounted, about the middle of the period, to nearly one-fourth (23 per cent) of the estimated total foreign trade of the world, and at the close of the period, (1912), in spite of the commercial progress of other countries, it was still one-sixth. If we extend our view to embrace not only the little islands in the North Sea, but all the countries depending on them and forming the British Empire, we find the trade of this group over one-fourth of the trade of the world.

A survey which omits from consideration trade across land-frontiers, and considers only sea-borne trade, is even more impressive. Of the total sea-borne trade of the world in 1912 it is estimated that 15% (in value) was between countries within the British Empire, and 39% was between the Empire and foreign countries. Thus the trade of which one or both terminals lay within the Empire was over half of the maritime trade of the world. The trade of which one terminal was in the United Kingdom amounted by itself to about 40% of the world’s total sea-borne trade.

442. Chief causes of the rapid development of English commerce.—The causes of this development may be summarized briefly as follows: (1) The English people were the most advanced, in industrial and mercantile ability, of any people in the world. They had the start on others in manufactures and trade, and reaped the benefits of their early training in this period. (2) The geographical situation of England, and the physical resources of the country, especially its coal, made the English superior to most peoples and equal to any, in this age of transportation and manufacture by steam. (3) The commercial policy of the government allowed the people to make the most of their advantages. Toward the close of the eighteenth century an English statesman had told Benjamin Franklin of his idea “to make England a free port, for which he said the English were especially fitted by nature, capital, love of enterprise, maritime connections, and position between the old and new world, and the north and south of Europe, and that those who were best circumstanced for trade could not but be gainers by having trade open.” This idea waited long for its realization, but on that account led to the more rapid progress when it was carried into effect. Within five years of the repeal of the corn laws exports rose fifty to one hundred million pounds sterling per annum; manufactures and trade developed by leaps and bounds. Free trade alone cannot be credited with all the progress that England made in this period. It was, perhaps, the least of the three factors enumerated, but still it was of such importance that the other two factors would have been of much less effect without it.

443. Character of English exports.—This trade had now in a more pronounced form, the characteristics which it had been gradually assuming and which make it one of the most remarkable examples of advanced commerce in the world. Considering first the exports, we find that over three-fourths of them (in value) have consisted of wares wholly or mainly manufactured. Only one raw material has gone out in great quantity; this is coal, which has contributed about one-tenth of the total value of exports. Aside from coal few wares, and those of relatively slight importance, have left the islands in their crude form.

444. Leading items among the exports.—Cotton manufactures kept their place at the head of the list of exports, comprising about one quarter of the total. England in 1913 exported the enormous sum of over seven thousand million yards of cotton cloth a year. The exports of iron and steel and their products rose in this period to the second place; England was now purveying to other nations the means of raising the structure on which modern manufactures and transportation are based. The growth in the exports of machinery is especially striking; this item increased over fivefold within the fifty years to 1900, and doubled again in the short period before the outbreak of the war. Below these leading items come others with which we are already familiar (woolen and linen manufactures) and some which had gained promotion on the list of exports; leather goods, chemicals, jute manufactures, pottery, etc.

445. Imports; prominence of foodstuffs.—The fact suggested by the list of exports, that England has specialized more and more in manufactures, is borne out by the list of imports during the past half century. Since the adoption of the free-trade policy the English people has been freed from dependence on the home supply of food and has supplied its necessities by purchases abroad. Among the imports, therefore, we find that the largest item is that of foodstuffs, which has grown rapidly both in its absolute value and in its proportion of the total imports. In contrast with the medieval period, when only luxuries like wines and spices could pay for their transportation, we find now the great food staples flowing to England from countries thousands of miles distant. Improvements in transportation, due especially to the use of steam, have enabled bulky cargoes to pay for their passage, and the weight of the imports in tons has increased much more rapidly than their value. Improved means of transportation and preservation have moreover enabled the English to import perishable articles like meat, fruits, and vegetables, and dairy products; and the imports of these wares have increased from ten to twentyfold in weight.

446. Imports of raw materials and manufactures.—The same conditions have affected the imports of raw materials. A century ago the manufacture of iron from imported ore would have been thought an absurdity, but it has become a regular practice now that freights are so low; and the import of minerals is a respectable item in a list in which the raw materials for the textile industry are still, of course, most important. Free trade encouraged also a great increase in the imports of manufactures, which grew nearly tenfold in the fifty years to 1900, though they still were less important than foodstuffs and raw materials. The largest item among them after the crude metals, was silk, for the manufacture of which other nations have always shown more aptitude; but the list included woolens, hardware, leather (boots and shoes), paper, and many other items.

447. Explanation of the excess of imports over exports.—A feature of England’s foreign trade deserving comment and explanation is the great excess of imports over exports. It is natural to expect that these two items, which seem to represent the two sides of a balance sheet, should be nearly equal to each other; but in fact the value of exports has for many years been far below that of imports, and the difference in the years toward 1900 amounted to the enormous total of $700,000,000 to $900,000,000 a year.

England did not receive this surplus of goods as a gift, but earned it by services in the past and in the present which put other countries under obligations to her. The English had invested enormous sums abroad, and had the right therefore to interest and dividends; their merchant marine did a large part of the carrying trade of the world, and naturally had a large bill for freight to render to other people; London was the financial center of the world, and made the foreigner pay tribute for the services and commissions executed for him. There were some items on the other side of the account, but on the whole England had the right every year to take from other countries in the form of goods vastly more than she exported to them.

448. Detailed items in England’s international balance.—The items which go to make up the credits and debits of England in relation to other countries may be set forth in the form of a balance sheet, as in the table below, which gives the estimate of these items for the year 1910. Figures are given in round millions of pounds sterling.

The students should note several characteristic features of this balance sheet. (1) Only the items at the head of the columns are measured accurately: the others are “invisible” items, represented only by pieces of paper passing through the mail, but these are, pound for pound, of equal importance. (2) The inflow and outflow of bullion are large items, but nearly balance; England has acted as a clearing house for the payments of the world’s debts, and the distribution of the world’s gold. (3) In this period England re-invested in other countries most of the great sum due in interest and dividends. The English investor may be pictured as receiving a dividend check from the United States or South America, and as mailing it back instead of cashing it, asking that it be added to the capital sum of his investment.

449. Growth of the merchant marine.—England was the leader among nations in the carrying trade in 1850, and retained her position still unchallenged at the close of the century. At the outbreak of the war in 1914 nearly half of the world’s steam tonnage was under the British flag; the tonnage of Germany, which came second on the list of countries, was not one-fourth of the British. The number of ships in the English merchant marine has actually decreased in this period of progress, but the carrying capacity has grown immensely by the increase in size of the ships and by the substitution of steam for sailing vessels. It will be remembered that the protection afforded by the navigation acts was removed before the beginning of this period. The government has made generous payments for the carriage of mails, but still has refused to pay regular subsidies or bounties for the encouragement of shipping. English shipping, nevertheless, has held its own. Of the steam shipping built in the twenty years preceding the war, two-thirds were built in the United Kingdom, and over one-half was built to sail under the British flag. While soon after 1850 the English merchant marine carried not much more than half of the foreign commerce of the country, the proportion grew in later years to two-thirds and nearly three-quarters. This proportion declined somewhat in more recent years, under the competition of Continental steamers, but it is estimated that in 1913 British shipping carried over one-half of the total sea-borne trade of the world, including nine-tenths of the trade inside the Empire, nearly two-thirds of the trade between the Empire and foreign countries, and nearly one-third (30%) of the trade between foreign countries.

450. Relative rank of English ports.—The great commerce of the United Kingdom was very unequally distributed among its parts, nine-tenths of it going to England and Wales and most of the remainder to the lowlands of Scotland. London still kept its place as the chief port not only in the United Kingdom but in the world, mainly by reason of its import trade; it was exceeded in the amount of exports by the second port, Liverpool, which distanced all rivals in the important trade with the United States. An immense gap separated these two leading ports from the others, Hull, Manchester, Glasgow, Southampton, etc. Ports whose names were famous in the Middle Ages and even in later times have dropped into obscurity, with fortunate exceptions like Harwich and Grimsby, which have recovered their positions in recent times. Their places were taken by ports from which cotton and coal products are shipped: Manchester, once an inland village but now united with the sea by a ship canal and standing (1913) fourth on the list, the Tyne ports, Cardiff, etc.

The importance of ports was measured in the preceding paragraph by the value of the cargoes imported and exported through them. While this appears to be the best standard by which to determine commercial ranking it is proper also to consider not the value of cargoes, but the volume of shipping entering and clearing from a given port. Measured by the tonnage of vessels London was but little superior to Liverpool before the World War, was inferior to New York and to Hamburg, and about even with Rotterdam and Antwerp.

451. Relative share of different countries in England’s commerce.—Taking up now the direction of England’s trade abroad and the changes in its course during the last half of the century, we find ourselves approaching questions which have roused acute political controversy. Reserving for future consideration changes which have shown themselves in the most recent period we may note conditions as they were about 1900. England still found the trade with her European neighbors the most important part of her commerce, making up about two-fifths of the whole; this trade had increased by over one-half during the last forty years of the century. Next in importance to it was the trade with the British dependencies, a little less than one-quarter of the whole, which had increased somewhat more slowly. In the third place we may put, not a continent or group of countries, but one country, the United States, between which and England the trade was greater than between any other two countries on earth. England bought from the United States in 1901 more than twice as much as she bought from the next largest seller (France); and she sold the United States in that year more than she sold to all the countries embraced in her great Empire. This part of English trade, moreover, had grown more rapidly than any other, increasing by once and a half in the period. Grouping together all countries beside those enumerated, we find that the trade with them had remained nearly stationary, and amounted only to about one-eighth of the total.

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