577. Development of internal trade 1789-1914.—It will be impossible, in the later chapters of this book, to describe in detail the development of the internal trade of the United States. This trade has grown to such proportions that, at the present day, it far outranks in volume and importance the foreign commerce of the country. The reader may be trusted to realize this fact, and to have some knowledge of the character and organization of internal trade at the present day. It is not probable, however, that he knows the humble origins from which this trade has risen; and a description of the conditions and character of internal trade about 1789 will enable him to appreciate the progress of the past century, even though the different steps in progress receive but scant mention in the narrative.

578. Condition of the roads; effect on freight traffic.—The roads, which furnished the only means of communication and transportation by land, were still the earth roads of the colonial period, thick with dust in summer, and absolute sloughs, with mud a foot or more deep, during the thaws of winter and spring. During the greater part of the colonial period wagons were a rarity, because there was so little opportunity to use them. Men used mere sledges on the farm, and traveled or carried their produce from one farm to another on horseback. In the northern States the facilities for land carriage were good in only one season, winter, when the periods of sleighing enabled the people to make the market trips and visits which were impracticable at other times. Even near the large towns laden carts had to be drawn by two to six oxen, when there was no snow on the ground.

When there was no other means of transportation, as in the case of the settlements west of the Alleghany Mountains, wares were carried over the roads in wagons, sometimes for a distance of hundreds of miles; but such instances of extensive land transport were exceptional, and the freight charges were so high that only articles of the first necessity, as salt and iron, could pay for carriage.

579. Sparsity of passenger traffic.—Some men lived and died in the town where they were born, without visiting another town a dozen miles distant. There was so little intercourse between the adjoining towns of Easthampton and Southampton, on Long Island, that each town preserved individual peculiarities of pronunciation down even to 1800. Throughout the colonial period, and even in the days of the early Federal government, it was very difficult to collect delegates at a political gathering; and it was not uncommon for men to make their wills before starting to a State convention in Pennsylvania. Travel by stage-coach did not become of importance until well into the nineteenth century. In 1783 two stage-coaches, consuming a week or ten days on the trip, sufficed for the travel between Boston and New York; though a few years later (1794) twenty stages were employed. Postage rates for a single letter ranged from 8 to 25 cents, according to the distance, and mails were infrequent.

580. Relatively great importance of waterways.—Like the people of the Middle Ages, the inhabitants of the United States at this period were driven to the use of water transport by the difficulty of transportation on land. Rivers which are used now only by canoes and pleasure boats were then important means of communication and transportation. The Connecticut River has now a scant traffic as far as Hartford, about forty miles from its mouth; in 1816 we read, “The Connecticut River is navigable 200 miles above Hartford, for Boats, of 15 tons, and 50 miles higher, for Floats and Pine Timber”; large quantities of potash were carried down the river even from the Canada line. The Hudson and other rivers were the channels through which export products were collected and brought to the sea, and the farmers of central and western New York sent their wares to market by rafts and “arks” on the Delaware and Susquehanna. Waterways were of especial importance in the southern States, where the means of land transportation were even less developed than in the North; tobacco was brought to the wharves on inlets and rivers by “rolling-roads,” rough tracks over which the hogsheads were rolled with the assistance of a horse.

581. Importance of the country store.—The great institution of trade at this period was the country store, which collected the surplus products of the townspeople and gave them in exchange the wares imported from abroad. Every town of any size had one of these stores, and only the largest towns had distinct shops for the sale of special articles. The stock in trade of one of the typical country stores included all of the articles which have been mentioned among the imports of the country: sugar, molasses, tea, coffee, metals, and hardware, cloth, thread, books, glass, earthenware, etc. The list on the other side of the store-keeper’s books would be as long, for it included all the export products of the country, and some wares which were sent to market in the large towns or in other States. The merchant must always be prepared to receive in pay for his goods “Grain of all kinds, beef, pork, poultry, cheese, butter, eggs, nuts, berries, hides, tallow, candles, lard, domestic flannels, feathers, quills, braided straw hats, potatoes, apples and other fruits, both green and dried, home-made brooms, flax and flax seed, cider and domestic wines, etc.” At the period which we are studying, well past the close of the colonial period, barter was still the usual form of exchange, and money rarely passed at the transactions in the store or in the trade between the townspeople and the village artisans.

582. Benefits and disadvantages of the country store.—The country store was the focus of the village, not only in economic but in political and social life as well. There was no better training school in the world for the study of human nature and the development of business sense. Practically all of the business life of the times was concentrated in these stores, and it is, therefore, not surprising, that few men rose to eminence later in the mercantile world who had not passed a period of apprenticeship in one of them. Charles Tiffany, Levi P. Morton, E. D. Morgan, H. B. Claflin; of a later period Marshall Field, Pullman, Pillsbury, Armour, J. D. Rockefeller, J. J. Hill, and many others; all these rose from the position of clerk in a general store to the place which they attained in later life.

From the standpoint of the villagers, however, it was a great disadvantage to have the market for their produce restricted to the store in their immediate vicinity. The store-keeper in the smaller towns had no competitors, and enjoyed a practical monopoly of trade of which he took full advantage in driving his bargains. In the northern colonies, where the difficulties of transportation were leveled by the snows of winter, the people could attain a certain measure of independence of the country store by making market trips to one of the larger towns. Neighbors would agree upon a date and set off, sometimes in a troop of fifty or sixty. They loaded their sleighs with a supply of food for the journey, and with the produce of the farm and household, and sought out the nearest large town, Portland, Newburyport, Boston, Providence, Springfield, Hartford, etc. In one of these market centers they could make much better bargains than at home.

583. Relative smallness of interstate trade.—When the products of the country had been collected at the large coast towns by the farmers and store-keepers, they were, for the most part, exported to foreign countries. Interstate commerce was as yet comparatively small. There was, it is true, an active coasting trade, but this was employed chiefly in the collection and distribution of goods along short stretches of coast. Small vessels plied frequently from the large ports like Boston, New York, Philadelphia, and Charleston, to the country districts on either side, but rarely made extensive trips, as from Boston to Charleston, for instance.

Commerce between States as distant even as Massachusetts and South Carolina existed and was by no means insignificant in absolute amount. The northern colonies sent a part of their surplus of rum, live stock, dairy products, and home-made cloth to the South, and brought back tobacco or bills on England which they could cash. Still, comparing this trade with other elements of internal trade, with the foreign commerce of the time, or with interstate commerce of later times, the striking thing about it is not that it was so large, but that it was so small.

584. Share of different States in foreign commerce.—The relative contributions of different parts of the country to its foreign commerce can be shown by the following summary, giving the exports by localities in the year 1791. The chief States ranked as follows, giving values in millions of dollars and indicating the leading ports in parenthesis: Pennsylvania, 3.4 (Philadelphia); Virginia, 3.1 (Bermuda Hundred, Norfolk); South Carolina, 2.6 (Charleston); Massachusetts, 2.5 (Boston); New York, 2.5 (New York); Maryland, 2.2 (Baltimore). No other State or port exported as much as one million; and exports from all the other States together amounted to little over one tenth of the total of nineteen millions.

The striking feature of the table is the relative importance of the southern States in foreign commerce, an importance which they were destined to hold for a long time to come, as the cotton industry was developed. It must be remembered, however, that the figures refer only to the export trade, and that there would be considerable changes in rank if we could include the import trade. Taking as a rough means of measuring imports the amount of duties collected, we find, for example, in the first year of the national government, that though Pennsylvania again headed the list, the second and third in rank were New York and Massachusetts respectively, while the southern States ranked lower by very considerable amounts. This period which we are studying was, moreover, one of rapid change, marked especially by the development of the central and northern colonies. Taking the year 1795, when these colonies were profiting by a great increase in their food exports, and when the cotton trade was still undeveloped, New York had risen to the second place in exports and Massachusetts to the third.

585. Development of the chief seaports into cities.—The seaports named in the preceding section had gained from trade an amount of wealth and population, which, however small it may seem from the modern standpoint, put them in a class above the ordinary towns, and made them the representatives of a more advanced business organization. The most populous of these places had in 1790 a population of only about 30,000 (in thousands, New York 33, Philadelphia 28, Boston 18, etc.); and the total number of people living in towns of over 8,000 inhabitants was still only about 130,000. In other words, only one person in thirty lived in a large town or city. The budding cities retained many of the rural characteristics of the towns from which they had grown. A mere beginning had been made in paving the streets, and many people still kept kitchen gardens. The price of provisions, however, was rising rapidly, and the cities had become dependent on trade with the country districts for most of their supply. Cattle were fattened in the Connecticut valley for the New York and Philadelphia markets, and wood for heating and building was brought by coasting vessels from considerable distances.

The large towns could boast of a diversified industrial population, in which many special branches of manufacture were represented, and of numerous shops; Boston was credited with 366 stores in the enumeration of 1789. The first commercial bank of discount and deposit in the United States began operations in Philadelphia in 1782, and about 1800 there were 33 banks of this kind in the country.

586. Foreign countries of the greatest commercial importance to the United States.—An indication of the direction of commerce is furnished by the following table, showing the chief countries to and from which the United States shipped wares in 1790. Figures give the values in millions of dollars.

The figures of imports are based on estimates, and no sum is given for the total amount of the year; the total exports were but slightly above twenty million, and countries the names of which do not appear received but insignificant amounts of our goods.

587. Insignificance of direct trade with Asia and Africa.—Some reasons for the direction of American commerce at this period will appear in the next chapter, in which the commercial policy of European countries will be discussed. I propose here merely to point out some of the striking facts shown by the table, and to indicate their connection with the development of American commerce in the colonial period.

Attention may be drawn, first of all, to the significance of omissions from the table. In the year in question the United States sent to the two great continents of Africa and Asia less than one third of a million dollars of exports. The imports, especially from Asia, were probably somewhat larger, for American vessels had begun to frequent the ports of East India and China, and to bring direct from them the rich cargoes which formerly had reached America through the hands of English middlemen. Still, any reasonable estimate of the trade with distant continents would leave it insignificant in comparison with the European trade, which formed the mainstay of American commerce.

588. Unique position of England in trade with the United States.—Of the European countries there was one which occupied a position of commanding prominence. Great Britain received of our goods more than all the rest of Europe together, and sent us of her own far more than all the other European states could supply. It is noteworthy, and was so regarded at the time, that this country, after a bitter struggle for political and commercial independence, and after having broken the bonds which were supposed to hold her in subjection to the English market, should voluntarily resume the trade relations which had formerly been considered so oppressive. The great amount of our trade with England is the more remarkable, as it covered a considerable amount of trade with other countries. England felt as yet no great need for our export products, and forwarded to other countries a considerable part of what she received. Of the imports which we received from England, on the other hand, while the greater part was doubtless the product of English manufacturing industry, there were many wares which came from other countries, but which we found could be purchased more conveniently in England than at the original place of production.

589. Commerce with the rest of Europe.—It was but natural that the United States should have a commerce of some importance with states like France and the Netherlands, which were still among the leaders; and it can only be regarded as surprising that this commerce was so small in comparison with that with England. Our trade with eastern Europe was carried on so largely through England that Germany and the Baltic countries would make but an insignificant showing if they were included in the table. Our trade with southern Europe, however, was evidently governed by other conditions. Portugal and Spain could furnish few desirable wares of their own production, except wine; the table shows that the imports from those countries were small. They offered, however, what we sought in vain in northern Europe, a ready market for our fish, cereals, and other foodstuffs, and were hence of great importance to our export trade. Commerce with the Mediterranean countries, which had been interrupted during the Revolution, had not since then been developed to any considerable proportions, because of the ravages of the Algerine pirates. These countries had formerly taken a quarter of our fish exports, and about one sixth of our wheat and flour shipments; and trade with them revived later when our navy had brought the pirates to terms.

590. Importance of the West Indies as an outlet for wares excluded from Europe.—A place of very peculiar importance in the commercial economy of the American people, in the colonial period and well past the time which we are now studying, was taken by the West Indian islands. Of the chief products of the United States those coming from the South, especially tobacco, were sure of a good market in Europe, and were a ready means of purchasing the manufactures which the people needed to import. The chief products of the North, however, including breadstuffs, provisions, and fish, enjoyed no such favorable reception. The statesmen of England and other countries clung still to the plan of protecting domestic agriculture by assuring it the home market, and desired to encourage domestic fisheries as a means of supporting the navy. In the colonial period, therefore, the staple products of the central and northern colonies were kept out of England and other states by heavy duties or by prohibitions. The people of those colonies, therefore, were at a great disadvantage in their trade with the mother country: they found it difficult to secure the means of paying for the English manufactures which they imported, and were forced to rely in some measure on the crude products of their own domestic manufactures, as described in a previous chapter.

591. Character of commerce with the West Indies; triangular trade.—The very products, however, which were rejected in Europe, were keenly desired in the West Indies. The islands had become the great source of the world’s sugar supply, and the advantages of sugar production, under the system of slave labor, were so great that planters neglected all other crops and did not produce even a sufficient amount of food for their laborers. They were eager to purchase food either by the direct exchange of sugar and molasses, or, what amounts to the same thing, by giving the seller bills on Europe drawn against sugar products shipped thither. They offered a ready market, therefore, for the wheat, flour, corn, meat, and fish of the mainland, and purchased also large quantities of lumber and shingles for building, staves for hogsheads, etc. The colonies of the mainland took in pay considerable amounts of sugar and molasses for their own use, and took molasses also for the manufacture of rum, of which part was exported. On the whole, however, the mainland exported to the islands more than it received from them, and had thus a credit balance with which it could liquidate its debts for European manufactures. The conditions thus gave rise to a triangular trade: the mainland shipped food and lumber to the West Indian islands; the islands shipped sugar products to Europe; and Europe shipped manufactures to the American mainland, thus closing the transaction. So strong was the economic demand for a trade of this description, that the attempts of European governments to check it had proved entirely unsuccessful in the colonial period; restrictions were evaded by smugglers or were openly defied. The problems of policy relating to this and other parts of the American trade after 1789 will be treated in the next chapter.

592. Development of ship-building in the colonial period.—A resource of the United States which deserves to be mentioned, before we close this survey of the conditions of commerce about 1789, was the building and sailing of ships. The colonies were at first dependent on the mother country for the vessels which they used. Most of the raw materials for ship-building were, however, abundant in America; and the construction of ships, unlike other manufacturing industries, was rather helped than hindered by British colonial policy, which put colonial vessels on the same footing as those which were built at home, and protected them from the competition of the ships of other countries. An active ship-building industry grew up, therefore, especially in New England, where ship timber of the finest quality was abundant, and where the difficulties of life and the discouragement of staple exports forced the people to make the most of every resource. A petition of Boston citizens in 1746 calls ship-building “the ancient and almost the only Manufacture the Town of Boston ever had.” In the Massachusetts towns a ship could be built of oak for $24 a ton, while in England, France, or the Netherlands an oak vessel cost $50 to $60 a ton, and even the fir vessels, built on the Baltic, inferior in strength and durability, cost $35 a ton. The colonies, therefore, could supply not only their own wants, but also could sell ships abroad; before the Revolution more than a third of British tonnage, it is said, was American built.

593. Extension of American shipping.—The colonists were as proficient in the sailing as in the building of ships, and carried on a large part of the ocean traffic which served the needs of American commerce. In the first year of the national government considerably more than half of the tonnage entering the ports of the United States from foreign countries was American, and English ships were the only serious competitors. The bulk of American shipping was engaged in the West India trade, but American ships carried also nearly half of the commerce between the United States and Europe, in spite of the adverse policy of European states, designed to exclude American ships from commerce with them and with their colonies. Driven further afield by this policy, American skippers began to seek commercial connections with more distant countries, from which wares had reached them hitherto only through middlemen. An American ship sailed for the first time to China in 1784; in 1788 two ships were advertised as loading at Boston for the Isle of France (Mauritius) and India, and “anybody wishing to adventure to that part of the world may have an opportunity of sending goods on freight”; soon afterward a Philadelphia ship made the round voyage to China in less than a year. A vivid impression of the boldness and skill of American mariners of this period is given by the voyage of the Experiment to China. This boat, a sloop of eighty tons, no larger and no more seaworthy than the sloops which now bring bricks down the Hudson River to New York, carried her crew of fifteen men and boys safely to Canton and back, despite the perils of the sea and of pirates.

QUESTIONS AND TOPICS

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