511. States of minor commercial importance.—In the year 1912 four great states carried on nearly one-half of the foreign commerce of the world, considerably more than one-half if their dependencies be counted with them. Three of these, England (including the British Empire), Germany, and France, have already formed the subject of study, and the fourth, the United States, will be considered at length in a later section. We must now attend to the commercial development in other countries, reviewing their history more briefly as accords with their minor importance. We shall take up first two countries, the Netherlands and Belgium, which stand not far below the leaders, and which would even rank high among them but for their small size. It may not be unnecessary to remind the reader that Belgium is a creation of the nineteenth century; the country had formed a province subject to Spain or Austria until the period of the French Revolution when it was for a time incorporated in France, then (1815) joined to the Netherlands in a single kingdom, and finally, in 1830, established as an independent state.

512. Commerce of the Netherlands to 1830.—Dutch commerce had long passed its best days when, toward the close of the eighteenth century, it received what seemed to be its death blow in the war with England, growing out of the American war of independence. Before the Netherlands had begun to recover from its reverses it was engulfed in the movements of the French Revolution; was conquered and heavily taxed by the French; suffered under the ban of Napoleon’s continental system; and lost for a time its most valuable colonial possessions. At the close of the wars, in 1815, it recovered its colonies, except Ceylon, the Cape of Good Hope, and parts of Guiana, which remained in the possession of the English, but it could not recover its former commercial position. Other peoples had learned to do for themselves what the Netherlands had once done for them as a merchant and carrier; and Amsterdam and Rotterdam saw their commerce pass to London, Hamburg, and other ports. In striking contrast with the earlier period the Netherlands had in 1824-5 only 7 large ships under construction while England had about 800. The union with the Belgian provinces, lasting from 1815 to 1830, increased the area and the internal trade of the country, but was a hindrance rather than a help to the development of foreign commerce. The Belgian industries required protection, and the tariff, framed to meet both their demands and a protectionist sentiment in the Netherlands which had grown up in the period of decline, hampered free commercial relations with other states.

513. Dutch commerce since 1830.—The Netherlands, even after the separation of Belgium in 1830, clung to the protective tariff, and remained outside the great current of commerce. A colonial policy known as the culture-system, adopted in their East Indian possessions, especially Java, returned a large revenue to the government, but prevented commercial development there, while the West Indian possessions suffered severely from the lack of labor following the abolition of slavery. Meanwhile, however, a movement for free trade had grown up which resulted, after 1850, in a lowering of tariff rates until they were little more than nominal in amount. The growth of the European railway system gave to the Netherlands a new importance as a place of import for wares destined for central Europe; and the country profited largely by the growth, on either side, of the two great industrial powers, England and Germany. In the last half of the century the growth of the Dutch commerce has been rapid and nearly constant. The annual value of the total special trade (exports plus imports, in this case including the precious metals) was as follows at ten-year intervals from 1850 to 1910, in milliards of dollars: .1, .2, .2, .6, 1.0, 1.5, 2.4. Figures for the general trade of the country, including goods imported and then re-exported, would be considerably larger.

514. Position of the Dutch in recent commerce.—The Netherlands suffers from a lack of mineral resources, as the country is largely “made” land, composed of sand and silt which the great rivers have deposited at their entrance to the sea. The Dutch, therefore, have been handicapped in their attempts to share in the development of modern industry, and find in agriculture rather than in manufacturing their chief occupation. They have succeeded in certain special manufactures (diamond-cutting, chocolate, oleomargarine), in gaining a leading place, but cannot compete with other nations in the staple machine industries. They produce a surplus of dairy products for export, and import raw materials and manufactures which cannot be produced in sufficient quantity at home; but the striking feature of their trade is the fact that in general the same products appear among both the imports and the exports. The Dutch, favored by their national training and geographical position, and diverted from other means of livelihood by lack of resources, are the middlemen of Europe, arranging exchanges between other countries.

515. Belgium: early industrial development.—Belgium is far more richly endowed with mineral resources; in spite of its small area it produced in 1912 more than half as much coal as France, and has also rich supplies of ore of iron, and other metals. Even before the full value of these resources was realized Belgium was a distinctly industrial state, and for many centuries Flanders and other districts have been noted for their manufactures. Belgium did not suffer, therefore, as did the Netherlands, from the period of French occupation; it was freed by the French from many trammels on industry dating from the gild period, and it found in France a market for its manufactures which enabled it to endure the restrictions of the Continental System. During the period of union with the Netherlands (1815-1830) Belgian industries continued to develop, with the aid of Dutch capital, commerce, and colonies; the districts represented by Ghent, Brussels, Charleroy, and Liege became widely known for the manufacture of textiles, iron wares, etc. Progress was checked for a time by the breach with the Netherlands (1830), but this was just the period when steam began to be applied to manufactures and to railroads, and with the aid of this new force Belgium quickly recovered her former position. The prosperity of Antwerp, the one important port of modern Belgium, was seriously threatened by the act of the Dutch in closing the Scheldt to navigation; but the Belgians were willing to pay for this means of access to the sea, and finally bought outright the privilege of using it.

516. Belgian commercial policy.—During the first decades of Belgian independence the tariff which had been inherited from the period of Dutch rule was made more strict, and before the middle of the century it had been changed so as to grant considerable protection to agriculture, industry, and the carrying trade. Belgium, however, like the Netherlands, is too small a country to be able to afford high protection. After 1850 a free-trade movement led to lower duties and to liberal commercial treaties, the policy which has since been followed in the main. Many influences were at work in this period to further commerce, chief among them the technical improvements in manufactures and transportation; so it is dangerous to argue that the prosperity of Belgium in the following period was due to the policy of greater freedom of trade. It is certain, however, that Belgian commerce could not have attained the development it did without this policy.

517. Survey of the recent development of Belgian commerce.—Giving figures roughly in millions of dollars, the total commerce rose in the protectionist period, 1840 to 1850, from 70 to 80. In the following ten years of transition it rose to 190; in 1880, after twenty years of nearly free trade, it had risen to 560, and in the decades since then the figures have been 600, 856 and 1480. To this commercial expansion the port of Antwerp owed its position as second only to Hamburg among the ports of the Continent. An analysis of the different items of which the recent trade of the Belgians was composed shows that their strong exporting industries were manufactures (yarns and textiles, iron, glass, etc.), while they were obliged to import a large part of their food supply, and of the raw materials for their industries.

518. Switzerland: obstacles to industrial development.—Another country, small in area but with a commerce exceeding that of many greater states, is Switzerland. With its agricultural capabilities restricted by the area covered by mountains, and with no important mineral resources, Switzerland has to depend upon the character of its people as its chief industrial asset. In the early part of the nineteenth century it suffered not only from the restrictive tariffs of the states surrounding it, but also from the fact that it had itself not become a political unit, and was cut into small pieces by dues and tolls on trade. The hindrances to internal trade were finally swept away in 1848, when Switzerland became a federal republic; and the people made use of their greater freedom at home and of the lowering of tariff rates abroad to extend their commerce rapidly.

519. Position of the Swiss in recent commerce.—Switzerland has developed almost entirely along the line of manufactures. The agricultural population has actually decreased since 1870, as it has become easier to purchase food products from abroad by the export of manufactured products: silk and cotton textiles, clocks and watches, etc. Swiss industries have not reached the development of those in more advanced countries, and much of the work is still done outside of factories, and with simple home machinery. These conditions imply hard work and low returns, but the Swiss must choose between securing in this way some share in the world’s commerce, or starving in the vain attempt to support themselves by the scanty resources of their own country.

520. Austria-Hungary: survey of commercial development.—The state of Austria-Hungary, though it was in size the third in Europe, ranked only seventh in commerce in 1912, taking place after the Netherlands, Belgium, and Russia. Reference to an earlier chapter, describing conditions before 1800, will suggest that Austria-Hungary entered the nineteenth century handicapped by its economic and political conditions. It required roughly a full half of the century to remove the more serious obstacles to progress, and the latter half of the century has not given time enough to enable the people to win a place with their more advanced neighbors of the West of Europe.

521. Obstacles to the growth of commerce and industry.—Of the difficulties under which commerce labored the following are among the most important: (a) the character of the government, which was a personal absolutism like that in France before the French Revolution, absorbed by the family interests of the ruling house and by questions of foreign policy, and attending but slightly to the interests of the people as a whole; (b) the system of prohibitive tariffs, which was maintained more strictly than in any other state of central Europe; (c) the separation of different parts of Austria-Hungary by tolls and tariffs; (d) the slight development of manufacturing industry, due not to the lack of natural resources but to the backwardness of the people and to the persistence of restrictions dating from the period of the gilds.

522. Gradual removal of these obstacles.—(a) The revolution of 1848 began a movement for constitutional government, which led in time to the fall of absolutism and the introduction of modern representative assemblies. At the same time, however the spirit of nationalism was awakened among the various peoples, and their conflicting claims (especially in Hungary and in Bohemia) have seriously affected the working of the parliamentary system. (b) The prohibitive system, which had absolutely excluded the most important manufactures or had allowed them to be imported only as a special favor and by payment of high duties, was abandoned after 1848 for a more moderate system of protection, and commercial treaties with various states were made to facilitate the movement of wares. (c) The freedom of internal trade was secured for the Austrian half of the monarchy in 1826, and for the whole state (with slight exceptions) in 1851. (d) The restrictions on industry continued even after 1850. A man could not exercise any trade requiring the use of a machine, or any but the simplest household employments, without securing a public license; a man might exercise only one trade, and a cabinet-maker might not upholster the furniture he made, nor might a baker make confectionery. Most of these restrictions were abolished in 1860.

523. Growth of commerce since 1850.—Commerce and industry, which had developed with exceeding slowness before 1850, were quick to respond to the change in conditions, aided by the extension of the railroad system which marked this period. In spite of heavy taxes and a depreciated paper currency there was an extraordinary increase of energy and growth of business. Foreign trade more than doubled in twenty years, and each part of the monarchy developed along the line of its strongest resources; the Austrian lands, especially Bohemia, extended their mines and built up their backward manufactures, while the Hungarian lands exported increasing quantities of agricultural products (wheat, flour, stock, etc.). A reaction toward protection, felt since the ‘70’s, did not check the growth of commerce; a more serious danger appeared to be the possibility that a tariff barrier would again be established between the two parts of the monarchy as the result of the national aspirations of the Hungarians.

524. Position of Austria-Hungary in recent commerce.—Austria-Hungary carried on by far the largest part of its commerce with its neighbor, Germany, and found the greatest hope of the future in building up the trade with the Balkan states, and along the route to Salonika and Constantinople. Hampered by its position, it has not succeeded, in spite of generous bounties, in developing its shipping trade to important proportions. The first ships to pass through the Suez canal in 1869 were three steamers of the Austrian Lloyd, but in 1913 less than one twentieth of the tonnage using the canal was Austrian. The two ports that served the monarchy, Trieste for the Austrian part and Fiume for the Hungarian, were favored by every sort of assistance that the government could render, but remained still ports of the second class, surpassed in importance by a score of other ports in Europe.

525. The Scandinavian states; their position in recent commerce.—The Scandinavian states (Sweden, Norway, Denmark) held a lower rank among commercial countries than others which will be mentioned later, but in a geographical grouping they may be properly considered here; and their commerce was important, at least, in proportion to the irrelatively small population. These states were characterized, in general, by a lack of coal and by the slight development of manufactures; and by a soil and climate which are disadvantageous to the ordinary operations of agriculture. The difficulties of life have forced many inhabitants to emigrate, and forced those who stayed at home to make the most of their extractive industries (forestry, mining, dairying), the products of which they could exchange for the wares of more favored nations. The time when the Baltic trade was one of the great branches of world commerce was long past. The rest of Europe would have been but slightly affected if it had been separated from the Scandinavian countries, while such a separation would have entailed ruin on them.

526. Denmark.—The little state of Denmark, with a population of but slightly over two million, had taken advantage of modern commercial facilities to specialize in the dairy industry, in which it has been a leader and teacher of Europe. When we add to butter the pork products raised in connection with the dairies, and the eggs from Danish poultry yards, we have the articles which made up more than two thirds of the total value of the country’s exports.

527. Norway; Norwegian shipping.—In Norway, also, a country so barren that far less than 1 per cent of its area is suited to cultivation by the plough, dairying has been an important industry; and the dairy and forest industries supplied most of the exports. The difficulties of life on land were so great that the people were forced to take to the sea; they gained one tenth of the national income from the fisheries, and had, in proportion to their numbers, more merchant shipping than any other people. In 1913 Norway ranked second in tonnage of sailing ships (after the United States), fourth in total tonnage (after Germany), and fourth in tonnage of steamers. The position of Norwegian shipping was even higher before the use of iron ships had become general, and when Norway could utilize its forest products in shipbuilding. Norway enjoyed the most brilliant period of its shipping in the generation following 1850, when it took the place of the United States as one of the great carrying nations of the world.

528. Sweden.—Sweden was somewhat more fortunate than the other Scandinavian countries in its agricultural resources, and during part of the century has been able to export a surplus of grain. It has been recently, like the others, reduced to importing the cereals, and found its chief strength in products of the forest, the pasture and the mine. From its rich iron deposits it contributed raw materials for maintaining the iron industry in other countries, especially England.

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