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COMMERCIAL SUGGESTIONS.



BY S. WATEEHOUSE,

OF WASHINGTON UNIVERSITY.



In the first half century after the fall of
the great Napoleon, the balance of trade in
favor of England exceeded 1,600,000,000
sterling. The rich spoils of her commercial
conquests made England the richest country
in the world. The victories of peace rivaled
the triumphs of war. The obstinate hero-
ism of British fleets did not surpass the
sturdy virtues of English merchantmen.
The gallantry which won Trafalgar was the
same aggressive energy which invaded every
ocean and acquired for England the com-
mercial sovereignty of the seas. If a pro-
phet of classic antiquity had attempted to
forecast the future and to determine what
land would to-day hold commercial suprem-
acy, it would have baffled even Delphic
inspiration to point out the obscure little
islands which now constitute Great Britain.



There is scenic as well as historic grandeur
in the mercantile greatness of England.
The unfolding scenes in the emergence of
Great Britain from its barbaric condition to
its present ascendency are impressive in
spectacular effect.

The student of political economy, assured
that the accidental greatness which some-
times befalls individuals is never thrust upon
nations, naturally seeks for an explanation
of this commercial expansion. An inquiry
into the sources of her development will show
the means by which England, so limited in ex-
tent and not exceptionally favored in natural
resources, achieved her mastery of the
world's commerce. The English nation is
fortunate in the essential qualities of race . It
has the hardy virtues which insure conquest.
Wherever it has gained a foothold, it has
displayed the capacity and the monuments
of empire. It has built institutions and
material works with a Roman solidity of
structure. It has the physical vigor and
dauntless courage which were necessary to
open a free, field for its enterprise and
administrative ability. But British com-
merce quickly availed itself of the ocean
pathways which a pioneer valor had cleared.
England, in view of her incapability of
agricultural greatness, devoted herself to



3

other sources of prosperity. She fashioned
her iron into machinery and her live oak
into ships. A vast capital was invested in
factories, fleets and quays. The industrial
equipment of England was marvelous. The
best mechanical inventions were intro-
duced into her factories and the latest
facts of naval science were embodied in the
construction of her vessels. The whole
country was an economic organism for the
accumulation of wealth. So great a variety
of industries was established that almost
every product which the need or taste of
man demands was fabricated in British
workshops. In consequence of her intelli-
gent economies, England was able to supply
the world with better and cheaper commodi-
ties than other countries could furnish.
Then culminated a commercial career which
is peerless in the history of nations. Then
the merchantmen of England, bearing her
manufactures to the four quarters of the
globe and returning freighted with the
treasures of every land, made the mistress
of the seas the banker of the world.

In the lapse of time, England, trusting to
her amassed wealth and traditions of great-
ness, became remiss in effort and careless of
improvement. But the London Exposition
of 1851 startled England from her dream of



fancied security. The exhibition revealed
the unwelcome fact that many of the prin-
cipal manufactures of Great Britain were
inferior to those of the continent. The
Government, dismayed by a discovery that
imperiled the commercial supremacy of the
nation, at once appointed a commission to
investigate the causes of this industrial
decay. The official report ascribed the
deterioration of British products and the
consequent decline in mercantile prosperity
to a want of technical instruction. Then
the Government founded the South Ken-
sington Museum, and lavished upon it in
the first decade of its existence 1,000,000
sterling. Other polytechnic schools were
established in various parts of the realm
and liberally endowed. These energetic
eiforts prevented a further retrogression in
artisan skill, but they did not enable Eng-
lish workmen to overtake their Gallic com-
petitors .

- The superiority of French handicraft was
conspicuously evident in the late Paris Ex-
position. In almost every department of
creative industry the French stood pre-emi-
nent. The splendid rally of France from
financial disasters which appeared to be
overwhelming, was the recent astonishment
of nations. But if mankind could at that



time have foreseen the industrial miracles
which the French Exposition disclosed, the
seeming mystery would not have excited
surprise ; for it would have been understood
as the legitimate result of the opulence
which disciplined skill had acquired and
which systematic economy had reserved for
that supreme exigency. The beauty of
French conceptions and the faultless ele-
gance of their execution render French
products the fashion and admiration of the
world. The practical consequence of this
exquisite dexterity is the enrichment of
France. With possibly the exception of
the United States, no country on the face
of the globe is more rapidly accumulating
wealth than France. The agricultural re-
sources of France are great, but the chief
cause of her riches is the artistic skill of
her workmen. The aesthetic sense, scien-
tifically cultivated for generations, has now
become an inherited instinct. The world's
demand for the beautiful products which
this cultured taste is creating is steadily
enlarging the commerce and enriching the
exchequer of France. The sagacious policy
of the French Government in organizing
and maintaining professional schools is re-
ceiving its just reward. The returns which
these institutions are now making for the



mil lions of public money so lavishly ex-
pended upon them are a perennial source of
national wealth.

But the trained intelligence which has
been so powerful a commercial factor abroad
has not been inoperative at home. The in-
ventive talent of our countrymen is a great
economic force which is modifying the in-
dustries and trade of the world. An official
examination shows that our improved ma-
chinery has reduced the cost of spinning
cotton more than twenty-live per cent, be-
low the price of English production. The
commercial significance of such a fact is soon
shown in the statistics of trade. In 1872,
the United States exported 12,000,000 yards
of cotton goods ; in 1878, more than 100,-
000^000 yards. Our better methods and ma-
chines enable us, in many important articles
of manufacture, successfully to compete with
the skill and cheap labor of foreign countries.

(ireat Britain feels a just apprehension
of American rivalry. An English expert,
after an inspection of the mechanical depart-
ment of the United States in the French
Exposition, writes to the London Times as
follows: "It may almost certainly be pre-
dicted of any modern mechanical congress
that the Americans will carry off the palm
for novel and ingenious application of force



to practical purposes, the substitution of
mechanism for hand labor in new and curi-
ous contrivances, which, to the amateur in
such matters, surprises as much by the new
ways in which old problems are attacked as
by the fine way in which the work is done.
The mass of invention and practical result
from it produced by the Americans within
the century, and especially the last twenty
or thirty years, is so great, and so impor-
tant in results, that it presents an important
problem in political economy."

Another Englishman, after carefully ex-
amining the manufactories of the United
States, expresses the opinion that "Ameri-
cans are a better educated and superior class
of work-people. * * * The average
American operative is undoubtedly more
sober, more intelligent, and more industri-
ous, than the average operative of England.
The American operative possesses more in-
dividuality and more independence than is
to be found among ourselves. He works
longer hours, and does not hesitate to take
the fullest advantage he can of the aid which
self-acting machinery gives him. It was
stated as one of the grievances of the Lan-
cashire work-people, that in Burnley weav-
ers were required to attend to, or 'tent,'
six plain calico looms instead of four. Why,



in J"all River City, I found it not an uncom-'
mon thing for a weaver to * tent ' twelve
such looms, while the tenting of six or eight
by one weaver was as common a practice as
the tenting of four in this country.
The English weaver requires an assistant for
four looms, while the American requires
none for his eight, or even twelve/*

These remarks are applicable only to that-
general intelligence which our public schools
develop, for it is certain that American arti-
sans are inferior in technical education to
their European rivals.

Our commercial prospects are now bril-
liantly encouraging. Agencies for the sale
of American cotton fabrics, watches, jewelry,
boots and shoes, agricultural implements,
locomotive engines, and many other products,
have been established throughout Europe.
For the last calendar year, the total ex-
ports, of the United States amounted to
$737,000,000, and the balance of trade be-
tween England and this country was more
than $300,000,000 in our favor. The panic
of 1872 was, perhaps, a blessing in disguise.
Its stern discipline repressed the spirit of
reckless speculation, reduced property to its
real value, and enforced habits of useful
economy. In 1872, the value of our imports
from Great Britain was $200,000,000; in



1876, it was only $84,000,000. These fig-
ures strikingly illustrate the impoverishing
extravagance that prevailed prior to the
financial revulsion. If the panic has taught
lessons which will prevent its recurrence, if
it has inculcated simpler tastes in domestic
life and sounder methods of doing business,
the costly experience will not have been
dearly bought. Our most formidable mer-
cantile rival is, of course, Great -Britain.
But there are reasons for believing that a
permanent decline in the commercial great-
ness of England has begun. The following
statistics of the foreign trade of Great
Britain are significant :

Exports. Imports.

1862 $ 620,000,000 $ 917,000,000

1871 1,115,000,000 1,352,000,000

1877 993,000,000 1,720,000.000

This table does not include the imported
goods which were re-shipped to foreign mar-
kets. From these figures it appears that in
1877 the balance of trade against England
was $727,000,000. Doubtless a part of the
reduction in British exports is due to the
commercial depression which has lately
swept over the entire business world, but a
portion also is certainly attributable to per-
manent causes. The United States, which
have heretofore been one of the largest mar-
kets for British merchandise, are becoming



10

dangerous rivals for the commerce of the
globe . Hundreds of English mills and work-
shops are to-day silent in consequence of
American economy and competition.

Nor is it easy to see how England can
regain her former ascendency. The cost of
production cannot be lessened by lowering
the wages of the workmen , for at present rates
the operatives barely earn a livelihood. Nor
is there any reason for believing that the cost
of living in Great Britain can be materially
diminished. 'English fields have been culti-
vated almost to the limits of possible pro-
ductiveness. The quantity of imported
breadstuff's is steadily increasing. In 1857,
the value of the foreign food consumed in
Great Britain amounted to $10 a head
throughout the realm ; in 1876, the average
had risen to $25 a head. The proportion
of this food which comes from the United
States may be inferred from the fact that in
1877 this country shipped to England 100,-
000,000 bushels of wheat alone. Nor can
the cost of English manufactures be cheap-
ened by the imposition of lighter taxes on
productive capital. The growing expenses
of her civil list and the heavy outlays for
colonial defense, which are largely increas-
ing the national debt of England, will
scarcely justify any reduction in the rates



11 -^

of taxation. Nor can Great Britain hope to
develop some new source of wealth which
would decrease the cost of production by
relieving the over-taxed manufacturers of a
part of their burden. The main resources of
England have been known and utilized for
centuries. Her mines of coal and iron
will not probably be more productive in
the future than they have been in the past.
In fact, the expense of working is pre-
sumably greater from year to year. The
unavoidable inference from these consider-
ations is that British manufacturers can-
not lessen the cost of their products ex-
cept by improvements in their machinery
and processes of manufacture. In such a
competition, Americans will prove more than
a match for Englishmen.

What, on the contrary, is the industrial
condition of the United States? The cost
of living has never been so low since 1860.
Our agricultural resources are almost illimit-
able. In 1878, the total cereal product of the
United States was more than 2,300,000,000
bushels. Yet even in the Middle States
there are large areas of arable land that
have never been cultivated, while west of
the Mississippi there are hundreds of thou-
sands of square miles of productive soil
that have never yet felt the fertilizing touch



12

of the plow. The products of the vast
tracts of wild lands which are every year re-
claimed to tillage are increasing the capital
of the country, cheapening the necessaries
of life, and furnishing ampler supplies for
foreign exchange. The mineral wealth of
the United States is apparently boundless.
The coal fields and lead mines of the Missis-
sippi valley, the iron ores of Missouri and
Tennessee, the copper and silver beds of
Wisconsin, and the lodes of precious metal
in the Rocky Mountain and Sierra Nevada
ranges have as yet scarcely been touched.
In view of the vast reaches of mineral terri-
tory that still await geological examination,
it is certainly probable that future explora-
tions will develop far richer treasures than
have yet been brought to light. Nor are
these mere speculative dreams of riches,
destined perchance only to a remote fulfil-
ment. Every year is bringing a golden re-
alization. Prior to the panic, the wealth of
the United States was doubling about every
ten years. According to the census of 1 870,
the value of the real and personal property
of this country was over $30,000,000,000.
The rapid development of our agricultural
and mining interests is creating new taxable
values which will, by lowering the rates of
assessment and hastening the extinguish-



ment of our national debt, reduce the cost
of living and of textile production. It is
also amassing that vast reserve of produc-
tive capital which is essential for the suc-
cessful conduct of great manufacturing and
commercial enterprises.

America is fortunate in its superior ability
to produce the great staples which the
necessities of mankind demand. The cour-
tesy of Commissioner LeDuc enables me to
present the following official statistics of
the principal agricultural products of the
United States. The summary is taken
from his unpublished report for the year
1878:-

Crops . Acres.

Buckwheat 673,100

Eye 1,622,700

Barley 1,790,400

Oats 13,176,500

Wheat 32,108,560

Corn 51.585,000

Potatoes 1,776,800

Hay 26,931300

Tobacco 542,850

Cotton 12,266,800



Tons..
Lbs...,
Lbs...



Bushels.
12.246,820
25,842,790
42,245,630

413,578,560

420,122.400
1,388,218.750

124.126,650
39,608,296

392,546,700
2,347,471,250



The current value of our last year's cot-
ton crop was $260,000,000 ; and if the labor
system of the Southern States remains undis-
turbed, the yield hereafter will probably be
still more productive. Its superior cheap-
ness and excellence render American cotton
indispensable to English manufacturers, but
no British staple is an American necessity.



14

Thus in every point of this industrial con-
trast between England and America, the
present or prospective advantage seems to
be on the side of the United States.

Never were our opportunities or the dis-
positions of other nations more favorable
than now for the extension of our foreign

o

commerce:

Mexico, so rich in mineral resources
and. tropical products, is making mercan-
tile overtures which the United States
cannot afford to decline. When stable
government and civil order are firmly
established in that country, doubtless a
large trade will spring up between the sister
republics. It is only a want of enterprise
that would permit trans-atlantic nations to
control a trade that lies at our very doors.

The states of South America are also
disposed to extend their commercial rela-
tions with this country. Assuredly a trade
whose total value is more than $400,000,000
a year is worthy of American competition.
A reasonable hope of securing the splendid
prize should stimulate our countrymen to
strenuous rivalry. The United States pro-
duce in cheap abundance the chief commo-
dities which South America requires, and,
with a water carriage 3000 miles shorter
than that of their European competitors,



15

ought at least to obtain a proportionate
share of this enriching traffic.

India has recently been discussing the
policy of levying duties on imports from
the mother country. The imposition of an
equitable tariff would open a fair field to
American enterprise and encourage larger
exchanges between India and the United
States.

Our trade with China is expanding with a
steady but comparatively slow growth. The
commercial wants of the Chinese are limi-
ted. Low-priced cotton goods are the prin-
cipal' articles of foreign importation. Lat-
terly the Chinese have manifested a strong
preference for American fabrics they have
found that our textures are cheaper and
more durable than those of English manu-
facture. But the aversion of the Chinese to
change and the simplicity of their tastes
discourage the hope of a rapid extension of
our commerce with the Celestial Empire.

But Japan, with its richness of native
products, its less conservative character,
and its ready adoption of foreign institu-
tions, justifies expectations of commercial
development. Every year the exchanges
between the United States and this progres-
sive and charmingly courteous people will
become larger and more profitable. The



16

relative nearness of America geographically
entitles it to a control of the foreign trade
of China and Japan.

A comparison of these countries with
Australia strikingly confronts the commercial
differences of races. The transition carries
us from an Oriental civilization whose for-
eign wants are few to an Anglo-Saxon re-
finement which makes products of the whole
habitable globe tributary to its requirements.
Even now, in the infancy of their develop-
ment, the external commerce of the Austra-
lian colonies is $377,000,000 a year. If the
foreign exchanges of China bore a corres-
ponding proportion to its population, they
would reach the enormous annual aggregate
of $15,000,000,000. New Zealand is twice
the size of England and probably quite as
rich in natural resources. According to Sir
Julius Vogel, this island with a population
of only 450,000 has a foreign trade of
$65,000,000 annually, and has spent in the
last eight years $100,000,000 upon its pub-
lic works. Its gold mines have already
yielded $160,000,000 worth of bullion.
Such rapidity of material development has
only an American parallel. Possibly the
brilliant dream of Macaulay has already be-
gun its distant fulfilment. Australia, with
an area larger than the whole territory of



- 17

the United States prior to the acquisition of
Alaska, is fast achieving a national impor-
tance. With the exception of our own ex-
ample, there is not in modern times so ex-
traordinary an instance of industrial growth.
The destined greatness of these far-off lands
challenges the attention of American enter-
prise. The Australian colonies cordially
invite American competition for their trade.
But, at present, the share of the United
States in this Australian commerce is humili-
atingly small. The American contribution to
$190,000,000 of imports is only $6,000,000.
Victoria now imposes duties on English mer-
chandise and it is not improbable that the
other provinces may imitate her example.
But even without this advantage, American
dealers have secured an almost exclusive
control of certain branches of the Australian
trade. This virtual monopoly in the sale of
special wares shows what a profitable pat-
ronage the exercise of greater energy might
attain. Great Britain is 4000 or 5000 miles
farther from Australia than America is.
The additional cost of English transportation
is a protective tariff in favor of American
trade. And yet England not only sells in
the markets of Australia the goods which
British mills have manufactured from Ameri-
can cotton, but she also imports the fabrics



18

of our looms and re-ships them to the same
destination. A fact so mortifying to our
national pride should no longer discredit the
commercial enterprise of the United States.

The Universal Exposition which is to be
held next year in Melbourne will afford an ad-
mirable opportunity for the exhibition of
American manufactures, and for the exten-
sion of our commercial relations with the
Australian colonies. An adequate govern-
ment subsidy should aid individual effort in
making a display which shall be worthy of
the manufacturing greatness and commercial
aspirations of the United States. Mercantile
enterprise and public statesmanship will be
alike recreant to duty if they neglect so rare
an opportunity for national usefulness.

The examples of England and France,
introduced in the beginning of this discus-
sion, are valuable for the moral which they
suggest. The forces which wrought their
greatness may achieve ours. The sagacious
enterprise which explores the world for op-
portunities of trade, the fine sense of mer-
cantile honor that scorns the repudiation of
an obligation, the adherence to a gold stand-
ard for a uniform measurement of values
and the prevention of speculative fluctua-
tions, the wide diversification of manufac-
turing industries, and the attainment of a
manual and mechanical excellence that con-



19

trols foreign markets by a greater cheapness
of production, are qualities and policies that
will always command commercial success.
If Americans desire mercantile ascendency,
they must be willing to take the arduous
steps that will insure it. Technical skill
must be cultivated in every branch of indus-
try. Untrained workmen cannot reasonably
hope for a successful competition with the
educated artisans of Europe. Though agri-
culture is indeed the basis of national pros-
perity, it ought to be supplemented by a
wide range of manufactures . Comparatively
few nations need our cereals, but the mar-
kets of the whole world are open to the pro-
ducts of our mills and workshops. The vast
opulence of England and France is mostly
derived from their manufacturing industries,
and from the commercial exchanges which

o

their manufactures enable them to make.

America may profitably imitate the exam-
ple of France in diversifying its products.
The almost infinite variety of French manu-
factures is a copious fount of prosperity.
Apparently insignificant industries are often
important. The manufacture of toys adds
millions every year to the wealth of France.
A wide range of industries is also a source
of safety in times of financial depression.
France felt the panic of 1872 less than any
other civilized nation. When there are few



20

manufactures, they are more apt to be such
as a monetary revulsion would prostrate.
But when there are many resources, though
some industries may languish, the prosperity
of others will relieve the public distress.
Even agriculture flourishes best in the pres-
ence of manufactures. The maintenance
of a large population engaged in mechanical
employments will afford better home mar-
kets and higher foreign prices for our agri-
cultural products. As Europe must pur-
chase American staples, the more completely
the United States supply their own wants,
the larger will be the balance of trade in


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