646. Chief imports in 1860.—The imports of the United States have been so varied in character that it is impossible to classify them with any exactness. An attempt will be made in this section, however, to indicate the leading items in our imports in 1860, giving values in round millions of dollars. Of the total of the year, 354, the largest share fell to manufactures. Under this head the chief place was taken by the textiles (wool 38, silk 33, cotton 32, linen 10); nearly one third of the total imports of the country was derived from these four leading branches of the textile manufacture. Most of the other manufactures imported fell below the mark of 5 millions; a noteworthy exception is the item of iron and steel in various forms, amounting to 21 millions. In comparison with the amount of manufactures imported, the class of raw materials, to be used for manufacture in this country, was still small; we purchased abroad considerable amounts of hides and skins, wool, etc., but in general we either manufactured our wares out of materials procured at home or sent abroad for the finished product. The colonial wares had gained both in value and in the proportion which they formed of the total imports; the chief items in this class were sugar 31, coffee 21, tea 8, cigars and tobacco 6, molasses 5, altogether amounting to about one fifth of the imports of the year.

647. Significance of the import trade at this time.—The general character of our import trade, evidently, had not changed greatly in the seventy years since the establishment of the national government. The attractions of farming were so great, when fertile land was to be had in abundance and when there was an eager demand for such products as cotton and foodstuffs, that the American people still gave most of its energy to raising raw materials; and found it profitable still to look to other countries for much of its supply of manufactured wares. The policy of protection, which was established in the period under consideration, had not as yet succeeded in building up manufactures capable of supplying the wants of the home market. The comparatively small amount of materials imported for our factories showed that our manufactures were still local in character, without the strength, or else denied the opportunity, to reach out and draw from distant sources the raw materials which they could work up and return to the currents of the world’s trade.

The growth in the imports of colonial products represented the increase of general prosperity, enabling the people to consume luxuries in greater quantity. Dividing the amount of these wares imported by the population of the country, and so securing a rough idea of the share falling to each individual, we find that the per capita consumption rose as follows from 1790 to 1860: coffee from about 1 pound in 1790 to over 5 pounds in 1860, sugar from less than 5 pounds to over 30.

648. Growth of domestic manufactures.—Though the imports of manufactured wares increased greatly in the course of this period, it must not be assumed that the United States was as wholly dependent on foreign manufactures in 1860 as it had been in 1790. A population growing rapidly both in numbers and in welfare caused a demand for manufactures which stimulated some producers to choose manufacturing instead of farming for their livelihood, and the government aided these individuals by taxing imported wares, and so giving the domestic producer an advantage in the home market. In the following sections we shall survey the chief branches of manufacture which grew up in the United States at this time, and consider the bearing of the protective tariff on their development.

649. Increase in the use of coal.—Some idea of the development of modern forms of manufacture in the United States can be gained by tracing the history of coal, the great source of power for the developed system of factory industry. The demand for coal was still very small in the first quarter of the century; in 1830 the total production was less than half a million tons, and the United States was surpassed in coal output by four of the states of Europe. The second quarter of the century was marked by a great extension in the use of steam power, and the successful application of coal to iron making; by 1850 the United States had reached the second place among the countries of the world in coal production, with an output of over six million tons. Small as this seems in comparison with the output of Great Britain at that time (54 million), or the output of the United States in 1913 (over 500), it marked a tremendous advance over conditions as they were about 1800, and showed that at least the country had passed through the preparatory stage of industrial development.

650. Sluggish development of the iron industry.—While the use of coal is perhaps the best index of a country’s development in the modern forms of manufacturing and transportation, the use of iron is also certainly of great significance; iron is the fulcrum through which the power of steam is applied, to repeat Jevons’ figure of speech. Great importance attached, therefore, as has been noted in previous chapters, to the improvements introduced in the English iron manufacture towards 1800, by which it was freed from dependence on charcoal, and was enabled to turn out increased quantities of pig and bar iron at reasonable prices. American iron makers showed a slackness which we find it hard now to forgive in adopting the improved processes. Coal and coke were not used in the American iron manufacture until about 1840, and the new methods of puddling and rolling, which had transformed the English iron industry, were applied in this country only shortly before that date, about half a century after their introduction in England. Some excuse can be found for our delay in the lack of transportation facilities for bringing the iron ore and coke together. The result, at any rate, was unfortunate. A heavy duty was laid on imported iron, to protect the home producer, but did not make up for his inefficiency. It was necessary, therefore, throughout the period, to import a considerable part of the necessary pig and bar iron and steel, paying the higher prices caused by the tariff; and the machine industries could not but suffer from the added expense. Down to 1860 our iron industry was not strong enough to export crude iron in any quantity, though American ingenuity succeeded in finding a market for considerable quantities of iron manufactures.

651. Success of the cotton manufacture.—With one of the branches of textile manufacture, that of cotton, the Americans had more success. Thanks to the alertness of the cotton manufacturers in introducing improved machinery, and to the advantages they enjoyed in their supply of raw material, they had soon outgrown the need of protection. The higher wages which they paid to American laborers were more than offset by the quantity of work turned out, and in the manufacture of the common sorts of piece goods they did not fear the competition of any other country. Large manufacturing towns grew up in New England to meet the demand for cloth which formerly had been made in the household of the consumer, and by 1850 there were as many cotton spindles at work in New England as there were inhabitants. American cottons were sold so readily in South America and other foreign markets that English manufacturers condescended to imitate them, and our exports of cotton manufactures in 1860 amounted to over ten million dollars, more than double the export of fish products, and not far below the export of forest products. The strength of the American cotton manufacture lay in the production of plain cloth; the bulk of the imports consisted of finer and fancy products.

652. Failure to establish a strong woolen manufacture.—The United States was, of course, peculiarly fortunate in its supply of raw material for the cotton manufacture. It enjoyed no such advantage with respect to wool. The wool fibers from American sheep were comparatively short, and unsuited to the manufacture of the finer woolens and worsteds. Manufacturers were hampered in their use of other wools by a tariff designed to protect the sheep growers, and paid for other raw materials higher prices than their competitors in England, while they could not, as in the cotton industry, make up for the higher wages in this country by the skilful application of machinery. Under these conditions the duties designed to check the importation of woolen manufactures from abroad were only a partial protection to the American producer; and the woolen manufacture did not flourish in this country. We could in large part supply the demand of the home market for coarser fabrics (flannels, blankets, etc.), but we manufactured no wool for export, and we continued to import the finer fabrics.

653. Other manufactures.—In the manufacture of other textile products which were imported in considerable amounts, silk and linen, the United States made no important progress during this period. Sewing silk and silk trimmings were made in the country, but the great bulk of silk manufactures were bought in France and England, while there were only the beginnings of a linen manufacture in this country before the Civil War.

Other manufactures existed besides those named, but the most important of them were devoted chiefly to the first processes in working up raw materials, and scarcely correspond to our ideas of manufacturing at the present time. This point is illustrated by the list of domestic manufactures exported from the country in 1860, as given by the government. Of the total of 37 millions, the items cotton 10.9 and iron 5.7 were the product of developed manufacture, and the same may be said, perhaps, of the item copper and brass and their manufactures, 1.6. Among the other items, however, the leading products were of a different character, and showed strength in raw materials rather than in manufacture (manufactured tobacco 3.3, spirits of turpentine 1.9, oil cake 1.6, household furniture 1.0).

654. Dependence of the South on the North for manufactured wares.—It is noteworthy that most of the manufactures which grew up in the United States in this period were established in the North. The prevalence of slavery in the South and the attractions of agriculture in that section prevented the rise of any considerable manufacturing industry; and the South manufactured even of its staple product, cotton, less than one fifth as much as the mills of the North. Conditions were thus adapted to the triangular trade, as it has been termed above, by which surplus shipments from the North to the South balanced surplus shipments from the South to Europe. The results were set forth in the following extract from a book published by a Southerner in 1857:

“In one way or another we are more or less subservient to the North every day of our lives. In infancy we are swaddled in Northern muslin; in childhood we are humored with Northern gewgaws; in youth we are instructed out of Northern books; at the age of maturity we sow our ‘wild oats’ on Northern soil; ... in the decline of life we remedy our eyesight with Northern spectacles; in old age we are drugged with Northern physic; and, finally, when we die, our inanimate bodies, shrouded in Northern cambric, are stretched upon the bier, borne to the grave in a Northern carriage, entombed with a Northern spade, and memorized with a Northern slab!”

We shall see in the following sections, reviewing the course of tariff policy, that the North and the South took opposite sides with respect to the protective tariff. The South, which had practically no manufactures, desired free trade, that it might make its purchases in the cheapest market, while the North desired protection for its growing manufactures.

655. Beginning of the system of protective tariffs, 1816.—In previous sections (609-611) attention was directed to the fact that the earliest tariffs were but slightly protective. The establishment of manufactures was stimulated much more by the interruption of commerce at the time of the embargo and of the war with England than by any deliberate policy of protection. At the close of the war of 1812, however, the time seemed to have come for the legislators to intervene in favor of American manufacturing industries. The privations of the war period awakened people to the dependence of the United States on Europe, which seemed unworthy of a free state and which seemed unsafe from the military standpoint. The manufactures which had grown up during the war were exposed, at the return of peace, to a flood of imports which threatened to reconquer the American market for the foreign manufacturer. The tariff of 1816, therefore, included a number of duties designed to restrict imports for the benefit of the American producer; the scale of duties was moderate, the highest permanent duty being 20 per cent.

656. Course of tariff policy, 1816-1860.—The conflict of interests between different sections of the country led to many changes in the tariff schedules, and occasioned some bitter political contests. Without attempting to recount the details, it may be said in summary that the course of the tendency was toward higher duties till about 1830, when some of the duties amounted to 40 per cent and 50 per cent or more.

The high duties were particularly obnoxious to Southerners, who considered them a tax taken from their pockets for the benefit of the North, and who fought persistently for a reduction. They finally secured a hearing; and duties were steadily reduced in the period from 1833 to 1842 until they stood, at the later date, at a general level of 20 per cent. The tariff remained at this low level only two months, when it gave place to another tariff with higher duties; the average of the duties levied ad valorem was 33 per cent, while some duties rose far above this rate. Finally, from 1846 until the Civil War, the country was under a low tariff; duties were reduced until the maximum protective duty was 24 per cent, while the general level was about 20 per cent.

657. Effect of the tariff on industrial development.—What effect did the tariff policy have upon the industries and the commerce of the country? To this question the only safe answer is that the effect of the tariff was much less, for good or for bad, than has commonly been stated by writers on either side of the controversy between protection and free trade. The country has grown rich from the wealth of its natural resources and the character of its people. The tariff diverted into manufacturing more people than would otherwise have chosen that branch of production, but it did not succeed in making them all prosperous. Manufactures which were suited to the conditions of the time, as the cotton manufacture, grew strong under the tariff, and would have grown strong without it; other manufactures, such as those of iron and wool, were still feeble after years of protection. Commerce must have felt the effect of the tariff, for protection could be effective only as it restricted the exchange of wares with foreign countries. We are tempted to ascribe the rapid increase in imports and exports after 1846 to the reduction in duties. Yet, even here, many other influences favored the growth of our foreign trade, and it is impossible to determine which of them all was most effective.

658. Changes in the relative importance of shipping ports; southern ports and the export trade.—In the course of this period the development of new land in the West and Southwest, and the rise in importance of the cotton crop, effected some notable changes in the relative rank of the ports of the country. Measuring importance by the value of the domestic exports, we find that New York now held the first place; this port was in 1860 the shipping point for nearly one third of the total export values of the country. A considerable part of the value of exports from New York, however, was formed of precious metals, attracted there by the banks and the facilities for rapid voyages on passenger vessels. If we confine ourselves to the shipment of ordinary merchandise, we find that New York, in spite of the western connections afforded by the railroads and the Erie Canal, took second place, showing but two thirds of the export values leaving the country by way of New Orleans. This port was the natural outlet for the cotton-growing country of the lower Mississippi valley, and its export of the one ware, cotton, exceeded in value all the merchandise shipped from New York. It was cotton, again, that gave standing to the ports next in rank, Mobile, Charleston, and Savannah; the exports from these cities, aside from that single staple, were insignificant. Old ports like Boston and Baltimore had sunk to the sixth and seventh place, while Philadelphia, once the leader, was still lower on the list, and was outranked by San Francisco, if the gold shipments from that port be counted.

659. Northern ports and the import trade.—The reader who remembers what has been said above about the triangular course of trade in this period will not be surprised to learn that the figures of imports tell a very different story. New York enjoyed an import trade nearly double that of all the other ports of the country together; it was the great distributing point for European manufactures, from which the various ports of the country secured most of their supply. Second in rank, but separated by an immense interval, was another northern port, Boston; while New Orleans was but a poor third, and Philadelphia and Baltimore followed in the order named. Other southern ports, ranking high in the value of their exports, had only an inconsiderable import trade.

660. Changes in the direction of trade. New character of the trade with England.—There had been changes also in the direction of our trade abroad. The following brief table gives figures in round millions, for 1860, which may be compared with the figures for 1790 given in section 586.

It will be noted that our trade with English-speaking people formed still the most important part of our total commerce. A noteworthy change had taken place, however, in our trade with the British possessions. At any earlier period we imported from them far more than we could sell to them in return; the balance of trade was against us, as men said. This condition had been reversed by the rise of the cotton trade, and was to be still further affected by our export of foodstuffs. Great Britain was now dependent on us for the raw material of her most important manufacture, and was seeking from us also increasing supply of food, for her factory population.

661. Trade with Canada and the West Indies.—Our trade with Canada was of comparatively recent growth. Restrictive duties had formerly checked exchange with our northern neighbor, but as population and industries developed on either side of the frontier a demand for greater freedom of exchange made itself felt; duties were reduced, a reciprocity treaty was negotiated (1854), and under it many articles were exchanged free of all duties.

It will be noted that trade with the British West Indies had not developed to a similar degree; and it would be apparent, if other figures were included in the table, that our West India trade in general was far less important than it had been in the earlier period of our history. Trade with the French and the Dutch West Indies was, in fact, less in 1860 than in 1790. Among all the West India islands Cuba alone was a prominent exception to this tendency to decline. Slavery was still maintained in that island; and the sugar industry, which had felt severely in other islands the abolition of slavery, continued to flourish there.

662. Expansion of American commerce in Europe, South American, and the Far East.—It may be said, in general, that our commerce had broken through the rather narrow bounds which had formerly directed so much of it to England and to the West Indies. We were building up our trade with the continent of Europe. Our trade with France had increased greatly under the liberal commercial policy of Napoleon III, and we were establishing profitable connections with other European states, as is shown by the following figures for our total trade with them in 1860 (millions of dollars): German states 33, the Netherlands 10, Italian states 9.

Still more noteworthy is the extension of our commerce to the South and to the Far East. During the period under review the states of Central and South America had won their independence from Europe, and were now free to establish such trade relations as they chose. With Mexico and various states of South America (especially Brazil and the Argentine Republic) we had in 1860 a commerce amounting to about sixty million dollars. Our trade with China amounted to about twenty million; and while our trade with Japan (about $150,000) gave no immediate reward for the American enterprise which had opened the ports of that country, it was at least a promise for the future.

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