A. L. (Arthur Lyon) Bowley.

A short account of England's foreign trade in the nineteenth century, its economic results; online

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A SHORT ACCOUNT OF

ENGLAND'S FOREIGN TRADE

IN THE NINETEENTH CENTURY
ITS ECONOMIC AND SOCIAL RESULTS

BY

ARTHUR L. BOWLEY, B.A.

Cohden Prizeman [Cawbridge), iSg2 ;
Formerly Scholar of Trinity College, Cambridge.

WITH TEN STATISTICAL DIAGRAMS



" Here shall you trace in flowing operation,
In every state of practical busy movement,
The rills of civilisation."

Walt Whitman.




LONDON
SWAN SONNENSCHEIN & CO.

NEW YORK : CHARLES .SCRIBNER'S SONS
1893



HI-



PREFACE



3 The subject set for the essay for the Cobden Prize
I awarded at Cambridge University in December,
1892, was, " Changes in the Volume, Character, and
Geographical Distribution of England's Foreign Trade
! in the Nineteenth Century, and their Causes." The
^ essay which was then successful was not published
• at once, but has been re-cast and completed, while
additions and changes have been made to bring it
within the scope of the "Social Science Series."
As it now stands, it does not profess to be a com-
^ plete account of our recent foreign trade — that being
^ of course impossible in a book of this size, where the
^ subject of each chapter would easily fill a volume by
V itself; but an endeavour has been made to point out
and give the right prominence to the more important
of the events and causes that have affected the
growth of trade, to touch on the more obvious of
the social effects of this growth, and more especially
to furnish an introductory text-book, which will
supply the fundamental facts of this century's com-
merce in an easily accessible form.

Tables of figures have been as far as possible



IV PREFACE.

avoided, since they are liable merely to weary tlie
reader without affording him any real information
but their place is supplied by diagrams, on the use
of which it is desired to lay special stress, ^y these
it is possible to present at a glance all the facts which
could be obtained from figures as to the increase,
fluctuations, and relative importance of prices, quanti-
ties, and values of different classes of goods and trade
with various countries ; while the sharp irregularities
of the curves give emphasis to the disturbing causes
which produce any striking change. In many cases, per-
haps, more can be learnt by considering and account-
ing for all the features of a diagram than in any
other way, so that the text of this book may to some
extent be regarded as an explanation and interpreta-
tion of the plates. Great care has been taken to
ensure the accuracy of these ; they are substanti-
ally the same as those sent with the original essay
to the Yice-Chancellor, but have all been redrawn
and verified.

A. L. B.

Bristol,
bfh September, 1893.



CONTENTS



PAGE

List of Dates ..... vii

I.— INTRODUCTORY.

1. Introduction — England Commercially in 1793:

internally. ..... t

2. England Commercially in 1793 : abroad . . 8

3. Division of Labour . . . . . 11

4. Index Numbers ..... 17

II.— THE FRENCH WARS, 1793-1815.

1. Expense of War, and Hindrances to Trade . 23

2. Permanent Effects of War on Commerce . . 29

3. The Industrial Revolution .... 32

III.— THE BATTLE OVER FREE TRADE, 1815-1850.

1. Introductory ...... 38

2. Principles and History of Free Trade . . 40

3. Reforms ...... 46

4. Immediate Effects ..... 50



IV.— SUCCESS OF FREE TRADE, 1S50-1870.

1. Unlimited Expansion

2. Treaties with Foreign Countries

3. American War and its Effects

4. Balance of Imports and Exports : Foreign Invest-

ments .....



54
60

63



CONTENTS.



v.— RECENT TRADE, 1870- 1892.

PAGE

1. The Crises of 1873 and 1883, and their Causes . 79

2. Railways, Transport, and Freights, . . 85

3. Silver and its History (1870-1893) ... 95

4. The Steady Increase of the Volume of Imports

and Exports ..... loi

VI.— ENGLAND'S PRESENT POSITION.

1. The Position of England's Great Trades . . 106

2. Exports and Foreign Competition . . . 118

3. Imports and Agriculture .... 131

4. Conclusion ...... 139



INDEX TO DIAGRAMS.

1. Giving general view of total Foreign Trade and proportion per

head of population ; and the same reduced by index-numbers,

2. Showing fluctuations of Imports and Exports, 1793-1818,

3. Showing fluctuations of the price of Wheat, 1793-1818 -

4. Showing expansion of Trade (Imports and Exports), 1830-1873 -

5. Showing excess of Imports over Exports, 1855-18(51,

6. Showing the Depressions of Trade since 1870, illustrated by the

Shipping statistics, and interpreted by index numbers,

7. Showing the character of Exports, 1849-1891, and distinguishing

Textiles and Minerals, . - ...

8. Showing distribution of Exports (quinquennial averages, 1849-

i8gi); distinguishing British Possessions, United States,
India, Australia, Germany, France, Russia,

9. Showing the character of Imports, 1854-1891, and distinguishing

food, and raw materials for textile manufactures,
10. Showing the sources of Imports (quinquennial averages, 1854-
1891); distinguishing British Possessions, United States,
India, Australia, Germany, and France,



F,


ontispiece


icmg page


26







28




,,


54




,,


72



PRINCIPAL DATES CONNECTED WITH
ENGLAND'S FOREIGN TRADE.



Declaration of War with France, 1793.
Spinning Jenny in use, 1798.
Union of Great Britain and Ireland, 1800.
Cartwright's Loom in use, 1801.
Peace of Amiens, 1802.

Berlin Decrees, and Orders in Council, 1807.
War with America, 18 12-15.
Waterloo, 181 5.

Resumption of Cash Payments, 18 19.
Petition of Merchants, 1820.
Commercial Crisis, 1825.
Settlement in West Australia, 1829.
First English Railway, 1830.
First American Railway, 1832,
East India Company's Charter repealed, 1833.
Settlement in South Australia, 1834.
Commercial Crisis, 1836.
Wheatstone's Telegraph, 1837.
Commercial Crisis, 1839.
Penny Post established, 1840.
Settlement in New Zealand, 1840.
Hume's Tariff-Committee, 1840.
Ceding of Hong Kong, 1841.
Paris and Rouen Railway, 1842.
Peel's Fiscal Reforms, 1842.
„ V 1845.

Irish Potato Famine, 1845.

vii



PRINCIPAL DATES.



Repeal of Corn Laws, 1846.

Gold Discovery in California, 1847.

Commercial Crisis, 1847.

International Exhibition, 1851.

p'irst Submarine Telegraph, 1851.

Gold Discovery in Australia, 1851.

Gladstone's Fiscal Reforms, 1852.

Crimean War, 1854-55.

Bessemer's Steel Patent, 1856.

War with China, 1856.

Indian Mutiny, 1857.

Commercial Crisis, 1857.

Commercial Treaty with France, i860.

American Civil War, 1861-63.

Austro-German War, 1866.

Commercial Treaty, 1866.

Suez Canal, 1869.

Franco-Prussian War, 1870-71.

Commencement of Fall of Rupee, 1872.

Russo-Turkish War, 1877-78.

M'Kinley Tariff, 1890.

Gold Standard adopted in India, 1S93.



ENGLAND'S FOREIGN TRADE IN
THE NINETEENTH CENTURY.



>>



I— INTRODUCTORY.

1. England's commercial condition internally.

The history of foreign trade is inextricably bound up
with the general history of the development of civilis-
ation in the nineteenth century; without foreign trade
tiiis development could not have taken place, while
progress in all directions has in turn re-aeted on the
growth of trade.

The beginning of this progress in knowledge, power,
and intercourse may be traced back to the inventions
of the spinning-jenny, the steam-engine, and other
mechanical appliances, which took place in the latter
half of the eighteenth century. These inventions
produced manufactures ; manufactures needed and
found purchasers, not only at home, but in the colonies,
America, and the Continent ; increased and profitable
exchange gave renewed stimulus to science, which



ENGLAND'S FOREIGN TRADE JN



fi>nLiiuially guve birth to new inventions, not only in
iiiaimfacture, but in every brancli of human labour ;
iiiacliiiiery superseded hand-labour, the quantity pro-
duced by the same amount of work, differently applied,
was indefinitely increased ; labour was spared from
agriculture, and used in the manufactures and arts,
placing within everyone's reach things hitherto costly
or unknown, and adding to the comfort and luxury of
common life in a way which we, who regard the cheap
possession of the most finished products of the most
complicated machinery as a matter of course, cannot
well realise.

Meanwhile manufacture at home was found so pro-
fitable that England ceased to provide her own food,
but in new and distant countries hardy pioneers were
content to send us the fruit of virgin soil in return
for the ])roducts of our machinery ; both the new
and old countries were enriched by this exchange,
and both our colonies and the half-cultivated tracts of
older States were populated and rendered prosperous.
At home population was congregating into cities, and
the stimulating etftct of bus}^ city life was hastening
the process of the application of the forces of nature
to the performance of the hard work formerly done
by man, and of the consequent increase of labour need-
ing brain-power rather than physical strength.

But these changes were not made easily, old
customs, old ideas, old virtues almost had to be rooted
out and new ones planted, prejudices stood in the
way. Trade was not free, moMy of its natural outlets
wore absolutely' blocked in every countr}*, and while
it was not understood what benefits would accrue from



THE NINETEENTH CENTURY.



freedom, classes interested in old established indus-
tries understood very well what injury might come
to tliemselves. The development was thus hindered
for half a century, till it had gathered force to over-
come all rLsistance.

With the fieedom of trade came an expansion of
statistical and economic knowledge, and the relative
powers, populations, and resources of the nations of
the world gradually became understood.

Thus this development of foreign trade was essen-
tial both to our manufactures and to the general
furtherance of what for want of a more exact name
is called civilisation.

It is convenient to divide the economic results of
inventions into two classes — the increase of efficienc}',
which would be discussed in a history of home trade,
and the division of labour, which concerns us now.

Foreign trade is merel}'' the carrying out of the
principle of the division of labour. The benefits of
this division are even more obvious when we are deal-
ing with countries, with different products, difi'erent
climates, and different aptitudes and habits of w(jrk.
than when dealing with people of the same habits in
the same country.

During the 3'ears 1790-1870 the history of foreign
trade is the history of the division of the world into
new countries producing raw materials and old coun-
tries manufacturing them. That this is so may be
seen by considering the period 1870-1873, the climax
of this century's commerce, when the inflation and
following depression were mainly due to a too great
acceleration of this process of division, when new



ENGLAND'S FOREIGN TRADE IN



countries produced inoi'c raw materials than old
countries could manufacture.

This division was in its nature only temporary, for
each new country, as it grew and prospered, has
taken to manufacturing, and at present no broad
distinction can be made ; trade is still so hampered by
artificial hindrances that the natural divisions cannot
show tiicmselves, but it seems probable that with the
varied resources and aptitudes that all countries
possess in themselves a very complex and intricate
sub-division of work throughout the world will ulti-
mately be established.

It w^as obviously impossible to import raw materi-
als and export manufactures, to make the world one
great workshop, each part in intimate connection with
all the others, without a development of transport
and communication undreamt of in the eighteenth
century. But the genius of invention has proved
equal to all calls on his resources ; having first given
the impetus, he was prepared to find the means ;
canals, railways, steamers, electricity were ready
directly they were wanted, and no doubt new needs
will find equally quick satisfaction.

We can sum up in thi-ee words — inventions, foreign
trade, division of labour.

Let us now glance at the state of England at the
end of the eighteenth century, bearing in mind that
the changes from that to her present condition would
have been impossible wathout foreign trade. There
were practically no manufactures, in our present
sense of the word, no ships to carry great increments
of goods, no foreign demand for them, no admission



THE NINETEENTH CENTURY.



to other countries : the products of machinery were
known by our ancestors of three generations ago as
little as to savage races now.

The population of Great Britain and Ireland
was 16,000,000 in 1801 ; in 1802, it was 38,000,000.
Total imports and exports wece £37,000,000 in
1791; in 18'JI, they were £744,000,000. At the
same time the average income per head has in-
creased greatly.

In fact, in the eighteenth century foreign trade was
of so little importance to the majority of the inhabi-
tants of England, that with one important exception
the whole of it might have been destroyed without
making any appreciable change in the habits or
wealth of the people ; the rich would have been de-
prived of some luxuries, the poor of very few, a small
class of traders would have been affected, and an
unimportant branch of revenue destroyed; but no
other result wonld have followed.

This was shown by the little change which the
almost complete cessation of trade at the end of
the century, during the wars with France, made in
our habits ; the exception being the dearth caused
by the restriction of the wheat sui)ply.

It will be our object to trace briefly the causes and
events which have led to this startling development.

The invention and improvement of machinery, wiiich
made it i)rofitable to manufacture in England goods
which were in excess of our home consumption and
became in demand elsewhere, specialised our industry,
increased its output, gave employment to our growing
population, and facilitated tiansjtort ; and that ex-



ENGLAND'S FOKEIGN TRADE IN



chiuiig'c of inaimf.'vctnrcs for fcxjiJ, which is tlie back-
hone of our trade, was necessarily initiated.

'J'ill this century we were an ai^iicultural nation,
even exportin:^,' corn t') tlie Continent. A large class of
yeomen, now harily in existence, had from time ini-
nioniorial tillcfl their own land, an«l suV)sisted almost
entirely on its produce. Every villa;:]fe had its
common- field, where the peasants added to their
wages by rights of pasture and cuUivation, needing
few things tiiat could not be obtained at homo or at
the nearest i;iarket-town.

At a few towns special crafts tlouri-hed, but for tlie
must part those manufactures, which now condense
the population so markedly in our great towns, if
they were in existence at all, were carried on in
scattered villages ; and the only function of the town
was to bo the market, the headquarters of the sale,
while aiuiual country fairs were the occasion of an
important part of the countryfolk's purchases.

London was at once tlie general market of the
kingd(»m, the seat of many localised trades (tailors,
silversmiths, etc.), and, with Bristol and (Jlasgow, the
emporium of all foreign goods, which thence filtered
very slowly through the country.

Many of the main roads were all but impassable,
for the improvement of the great coach roads took
place at a later date, and only reached its climax just
before they were rendered comparatively superfluous
by railways ; travelling was the privilege of the rich,
and migration of labour was almost unknown.

Ono of tile efi'ects of tiiis dirticult\' of transport was
t«> make traile in articles of huge bulk and small



THE NINETEENTH CElWTURY.



value out of the question when any substitute what-
ever coukl be obtained close at hand. For instance,
no one would use coal where wood was to be had ; the
iron foundries were established in the neighbourhood
of forests that wood might be at hand for smelting ;
notliinof would be of iron that could be made of wood ;
and while in Cornwall even small houses would be
built of granite, in other counties granite would onlv
be used for the most costly buildings.

Goods can now be brought from the most distant
countries at less risk, less expense, and in almost the
same time, as they could tiicn be transported from
London to the extreme parts of England.

The necessity of obtaining wheat from abroad had
overcome the expenses of importation more than once
in bad seasons before the end of last century. In-
deed, there is no country, which, if dependent on its
own resources, is not in perennial danger of famine.
Even now, whole provinces of China, Russia, or India
may be devastated by a bad harvest. Apart from
this spasmodic trade, wine and tropical produce were
the only goods which came regulaily to our shores.

Till the growth of the cotton tiade, which may be
perhaps considered to date from 1750, woollen cloth
was our only export of importance. Since tl)e time
of Edward III., the Covernment had taken great care
to foster the trade. Till the beginning of the nine-
teenth centur}'-, English cloth was entirely made of
home-grown wool, and that there might be a plentiful
supply, exportation of wool or sheep was forbidden
under heavy penalties. The wool was all home-spun
in cottages, villages, or towns, and either carried to



S ENG LAND'S FOREIGN TRADE JN

markrt by the spinner (as flax was till recently carried
in Ircl.iiKl), or collected by travt'llinrr merchants for
iiinniifactnre.

Even of this, which formed our one export trade, by
far the larj^er portion was used at homo. The era of
trade with other countries liad not arrived : our re-
lations with them were chiefly imlitical and our rulers
more froqi)ently concerned wiih international war
than with international trade.

i\ ENCiL.\XD'S COMMEUCIAL RELATIONS ABROAD.

Till after the Napoleonic War the most important
pfvrt of our foreign trade was with our colonies.
" Settlements," or " plantations," as they used to be
called, were apparently regarded by the home Govern-
ment as under a favour in being allowed the use of
the land on which they had settled ; and, in conse-
(luenco, every restriction might rightly, it was
considered, be imposed to prevent their benefiting
themselves in any way which could possibly have
injurious effects on England or English trade.

Tlu'V were therefore obliged to export all their
])roduce to us, and only thtough us to other countries;
thej' were not allowed to undertake an}* manufactures
tliemselves nor to jiurchase manufactures from any
but the mother country, and no trade whatever
might be carried on except in English ships. The re-
lations of all other European countries with their
colonies were on the same plan. The American War
of Independence in reality gave this system its death-
blow, but it continued in force till the era of Free



THE NfNETEENTIl CENTURY. 9

Trade ; and the French War actually benefited the
West Indian colonies, for, when the commercial re-
strictions of Napoleon and England were generally
being set at defiance, colonial produce was exported
in American ships direct to the Continent.

The " plantations " were essentially dependent on
exporting their produce, and by virtue of the above
regulations were obliged to purchase clothes and
manufactuies fiom us. Hence a trade, by no means
contemptible, existed between England and the Indies,
East and WVst; tropical produce came to England,
and our growing manufactures had for some time a
sufficient outlet. It was when the supply exceeded
the wants both of the nation at home and the colonies,
that the pressing need for continental trade was
felt. Now, our exports to the West Indies and the
other colonies then settled (excluding India) are less
than two per cent, of our total exports.

A further effect was to make England an emporium
for troiiical produce and Oriental goods ; all trade
with the East was obliged to pass round the Cape,
and London was, therefore, a not inconvenient centre
of distribution.

England was the victor in the European competition
for colonial expansion which marked the eighteenth
century. The Spanish, Dutch, and French were all
obliged to give way to England, and the mass of trade
witii the East was under English control. The Indian
trade (as other smaller colonial trades) was in the
hands of a company which monopolised the trade with
all countries east of Persia; which ruled kingdoms
and carried on wars on its t)\vn account : brought to



to ENGLAND'S FOREIGN T RADE IN

En^rlaiid for distribufcion through Europe the treasures,
silk«^, fruits, sjiices, and jewels of India ; and in its
own immediate interest made scarce and dear goods
that iiave since, owing to competition and improved
tran-p"rt, become plentiful and cheap.

Ireland was regarded in much the same light as the
colonies: no conc.ssion was allowed to her which
could be supposed to injure England. Manufacture of
glnss and the diai'ery trade were suppressed, and
their agriculture injured by bounties on corn exports
from England. They were injured both by the re-
strictions forced on them and by the unwise privileges,
such as the bounties on exjwrtation of corn and
manufactures, which the Irish Parliament of 1784
granted to special trades.^

The trade between England and the United States
of America has always been of the greatest import-
ance both to us and to them. It was greatly un-
settled by the War of Independence (1776) ; but the
absolute necessity to the States of having England as
an outlet for her cotton, and the growing advantage
of the cotton trade to both countries, tended to estab-
lish commerce on a .sound and permanent basis.

Our European trade, owing to the perpetual wars
with Fiance, was subject to great vicissitudes from
the earliest times till long after tiie Napoleonic War;
but the genius for trading of the Dutch had, except
during the short periods that we were openlj^ at war
with them, kept open a means of communication with

* Fur .1 full discussion of this subject, see Cunningham's
"Growth of English Industry and Commerce," vol. ii., pp.
.523-529.



THE NINE TEE NTH CENTUR Y. 1 1



Central Europe, and our trade with the States border-
ing on the Baltic was regular and sound, if unde-
veloped.

All the commercial relations between country and
country were marred by what may be called inter-
national prejudice. Every admission of imports from
another was regarded as a concession at the expense
of the importing nation, only to be made when neces-
sary to obtain a similar concession, or when forced by
a stronger power. Trade was not regarded as bene-
ficial to the purchaser, but only as profitable to the
vendor. This, at least, was the politician's and popular
\iew, and merchants were only beginning to realise
tlie fallacy of it.

3. DIVISION OF LABOUi;.

All cKchanrre is a sign of division of labour, and is
an advantage to both parties concerned, for otherwise
the exchange would not be made. This has always
been recocrnised ia transactions between fellow-
countrymen ; but, when members of two nations are
concerned, other considerations, based fundamentally
on political or social disadvantages, su])posed to
follow changes in the course of a nation's trade, and
also on a want of imagination in realising the actual
transactions, have often hidden the possibility of
u-ing a foreign neighbour's special opportunities and
skill to save their own work.

Of all the phenomena of human development it is
perhaps no exaggeration to say that the progress of
division of labour has been the most continuous and



ENGLAND'S FOREIGN TRADE IN



the most gradual. It requires and makes use of
every improvement in skill, every means of more
rapid and intimate communication, every advance in
mutual confiilence, in security, and in freedom ; and
in each of these there is still prospect of unlimited
progress.

It is worth while to trace lightly tliis development
in England since the Middle Ages.

In feudal times, within the precincts of each castle,
many trades were carried on ; the insecurity of life
and property preventing industries elsewhere. Here
we have labour, divided indcdl, but only among some
few scoie hands.

But even in so small a country as England different
localities have necessarily different products. Copper
and tin must come from Wales or Cornwall, or not at


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Online LibraryA. L. (Arthur Lyon) BowleyA short account of England's foreign trade in the nineteenth century, its economic results; → online text (page 1 of 10)