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The Americana: a universal reference library, comprising the arts ..., Volume 10 online

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price and that there should be no glut of goods,
no undercutting, but a "well ordered trade. *
Hence rules as to quantities to be exported were
a great feature of these companies. There was
no idea of pushing trade or selling at a low
price and getting quick returns. Moreover, the
numbers admitted to the companies were lim-
ited by the high fees charged for entrance,
while no one who did not belong to them
could lawfully engage in the trade. The only
open trades were those to France, Spain and
Portugal. Hence a regular attack on the
monopoly of the companies was carried on and
this constituted the early free trade movement.
It was successful; after the Revolution the
entrance fees of the companies were reduced
by Acts of Parliament; only the East India
Company and the Hudson's Bay Company con-
tinued strict monopolies. With the throwing
open of trade it was possible for an enterpris-
ing man to carry on commerce on any scale, to
push his wares r.nd generally increase his sales
wherever he could without limitation of any
kind. This amounted to a veritable revolution
in commerce. Alongside of this opportunity

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for expansion came the emigration of the
Huguenots into England. Besides introducing
many new industries such as silk, cotton print-
ing, paper and linen, there was no branch of
English trade which they did not improve with
their taste and skill. Hence England had a
more varied assortment of goods with which
to push her trade. Moreover the Huguenots
preserved their old business connections, and
England inherited in this way a great deal of
the French trade.

At the revolution of 1689 the control of
economic affairs definitely passed to the House
of Commons, and the Whig party became the
arbiters of national policy. The Tories were
inclined toward (< free trade. » They believed
in favoring the consumer and in removing re-
strictions on intercourse, especially with France,
the chief industrial rival of England. The
Whigs on the other hand held very decidedly to
a policy of encouraging industry and in so
manipulating commerce that it should react on
the prosperity of industry. Hence they devised
a system of bounties for encouraging the expor-
tation of silk, linen and corn. Bounties were
also given to the fishing trades. They tried to
stop the growth of competing industries in both
Ireland and the colonies, and when Scotland
showed signs of becoming a rival the Union was
brought about.

In their fiscal policy and in their trade
treaties the same Whi$ ideas were carried out.
We first see them applied in the commercial re-
lations between England and France. England's
great industrial competitor at the end of the
17th century was France. Colbert had been
doing everything in his power to encourage
French industry and had gone so far, in 1667,
as to put prohibitory rates on English cloth.
Englishwomen with (to the masculine mind) an
extraordinary perverseness would insist on
wearing French goods when they could get
them. Hence, according to the opinion of the
day, to shut out French goods was to assist
English industry in the best possible way. To
this the Tories were opposed, but the Whigs
were successful, in 1678, in carrying an Act
prohibiting trade and commerce with France.
A system of high duties was substituted for
prohibition under James II., but the Whigs
returned to the earlier policy. In 1713 a clause
was added to the Treaty of Utrecht to the effect
that England should admit French goods as in
1664. This gave rise to a tremendous contro-
versy. Again the Whigs were successful; the
commercial clauses of the treaty were not
carried out, and the policy of protecting English
industry by cutting off trade with France was
not reversed till the treaty concluded by Pitt
in 1786. By that time England no longer feared
French competition and English manufactures
were so much sought after in France that there
was a tremendous outcry on the part of French

The Whig desire to shut out competitors
extended to another department of commerce,
namely, the trade with India. The East India
Company had been bringing back silks and mus-
lin and cotton goods which were worn by the
•greatest gallants* as well as by «the meanest
cook maids'* instead of good English cloth.
Hence employment was being diverted from
Englishmen to Hindoos, and in 1700 an Act

was passed by which East India goods might
be warehoused for re-exportation, but they
might not be sold within the country.

But it was not enough to shut out possible
competitors. Definite encouragements to Eng-
lish trade were given by the Methuen Treaty
negotiated with Portugal in 1703, and by the
Asiento Contract obtained from Spain in 1713.
The Portuguese had prohibited the importation
of English cloth, and in 1703 Mr. Methuen was
successful in getting this prohibition removed
on condition that Portuguese wines were ad-
mitted into England at two-thirds of the duty
on French wines. The trade with Portugal thus
opened up was reckoned to be a very large one,
and was especially cherished since a large part
of the returns was paid in Brazilian bullion,
with which we could renew our depreciated

By the Asiento Treaty the Whigs got a
large part of the slave trade with Spanish
America into their hands. They obtained the
right to import 4,800 negroes annually and to
send one vessel of 500 tons to import goods into
the Spanish colonies. The West Indies became
a great depot for this trade and under the cover
of the one ship the English got possession of
much of the Spanish-American trade. From
every point of view the slave trade commended
itself to the general opinion of the time. It
encouraged shipping, promoted trade with
Africa — which country took English cloth in
payment for slaves — it supplied labor to the
West -Indies and Virginia and helped the agri-
cultural development of the colonies. Moreover
the slaves were a means of carrying on trade
with Spanish-America. But from the English
point of view the economic effects were still
more important. As long as the colonies had
slaves they would never take to manufacture,
the negro being incapable of the necessary
training. The colonies would continue there-
fore to grow the tropical commodities for Eng-
land to distribute.

Sir Robert Walpole began to reform the
fiscal system with the same object of stimulat-
ing industry through commerce. Accordingly
he overhauled the book of rates between 172 1-4
with the object, to use his own words, of mak-
ing (< the exportation of our own manufactures
and the importation of the commodities used
in the manufacturing of them as practical and
easy as may be.* He repealed or reduced the
import duties on raw materials and arranged
for manufactured exports to be duty free. He
next began to try and stimulate the warehous-
ing trade which the Navigation Acts (see Great
Britain — Navigation Acts) were partly
designed to create. He hoped to make England
"one general free port and a magazine and
common storehouse for all nations.*

This system of deliberately building up
English industry was continued until the time of
the younger Pitt, who, following out the Tory
tradition of free intercourse, not merely re-
opened trade with France but tried to carry free
trade between England and Ireland^ unsuccess-
fully however, owing to the hostility of the
English manufacturers. He also wished to
allow American ships to trade freely with Eng-
land and the West Indies in spite of the Navi-
gation Acts. But this Tory reversal of the
Whig policy was doomed to failure.

Digitized by



The French wars prevented any relaxation
of the system for revenue reasons, and it was
not until 1822 that the great breach with the
Whij? policy of the 18th century was definitely

During the 18th century English commerce
steadily increased in almost every direction,
especially with the colonies. In 1699 the ex-
ports had been estimated at £7,302,716. By 1720
they were £8,681,200 and by 1740, £11,469,872.
In 1760 the figure had reached £i5>579>073; in
1771, £17,161,146; while with machine products
the total reached £34,381,617, in 1800.

The imports in 1699 were £3482,586; by
1720 they had nearly doubled, being £6,090,083.
In 1760 they were £9,832,802; and in 1771 had
reached £12,821,995. In 1800 they were

It is exceedingly difficult to say whether this
increase was a result of the Whig policy or no,
but the fact remains that while they held the
reins of power English trade extended as they
intended it should, and thus prepared the way
for the introduction of machinery. It was no
accident that the industrial revolution (see
Great Britain — Industrial Revolution) oc-
curred in England when it did. At the
Restoration English industry was very back-
ward; English agriculture undeveloped; and
English commerce small. By the end of the
18th century England, in spite of the loss of her
American colonies, was the greatest trading
country in the world. Her goods, through
sheer cheapness, were forcing their way into
every country. She was the great carrier of the
world, and the only people that could compete
with her were the Americans, whose shipping
had grown up under English protection. She
was able to withstand, by her wealth, the great
financial strain of the French wars, and to con-
trol the access of colonial produce to Europe.

That many mistakes were made is no doubt
true, and Adam Smith did not hesitate to expose
them; but the objects which the Whigs had at
heart were attained to an extraordinary
degree during their tenure of power.

Bibliography.— Ashley, W. T., <The Tory
Origin of Free Trade Policy > in < Surveys, His-
toric and Economic } (1900); Cunningham, W. f
( Growth of English Industry and Commerce,*
vol. II.; ( The Mercantile System ) (1903),
and <The Rise and Decline of the Free Trade
Movement y (1905) ; Dowell, ( History of Taxa-
tion and Taxes in England* (1888) ; Davenant,
'Works* (edited by Sir C. Whitworth) ;
Macpherson, D., < Annals of Commerce* (1805) ;
Smith, Adam, <The Wealth of Nations* ; Whit-
worth, Sir Charles, ( State of the Trade of
Great Britain in its Imports and Exports from
the Year 1697* (1776).

Lilian Knowles,
Appointed Lecturer in Modern Economic His-
tory, University of London.

19 (b). Great Britain — Commerce, Volume
of Trade. — It has been estimated that nearly
a fifth of the working population o* the United
Kingdom depends for existence on the sale of
its products in foreign markets; add to this
the classes engaged in ocean transport; in
market organization and financial settlements,
and it is possible to arrive at some conception
of the magnitude of the interests involved and

the importance assigned in the United Kingdom
to oversea commerce. Parliament and the Press
never tire of the theme. Not merely the Board
of Trade, but all other great departments of
administration, whether concerned with de-
fence, revenue, foreign and colonial affairs, or
education, find themselves involved in one way
or another in the consideration of the interest
of international commerce. So far, indeed, has
been carried this exclusive attention to external
relations, that the existence of a home market
is not seldom forgotten or ignored. Some
ground for this forgetfulness may be found
in the great value of the foreign trade — over
£920,000,000 sterling in 1904 — in relation to a
limited population and area; but its real im-
portance in the economy of the United King-
dom appears only on a further analysis of the

Of the imports, valued at £551,000,000, three-
fourths must be credited to food and raw ma-
terial, the rest to manufactures of various
kinds. The exports are made up of £300,000,-
000 of British produce and £70,000,000 foreign
and colonial re-exports. Manufactures consti-
tute the mass of British produce exported, with
one important exception — coal. The figures
imply much that is interesting both in past his-
tory and present organization A country of
restricted area and resources obtained, through
various economic and political accidents, a start
in the industrial race a century ago. Some
of the necessary raw materials of industry it
cannot produce, of others the quantity is in-
sufficient for its growing demands. Increasing
specialization leads to greater dependence on
certain types of foreign imports and greater
need for a market abroad for the constantly
increasing surplus of manufactures. Food, too,
must be brought from more favored regions,
and the very success of manufactures breeds a
natural tendency to neglect the interest of agri-
culture; though native resources, utilized to the
utmost, would still be insufficient, in the present
state of agricultural science, for the needs of
the growing industrial population. The basis
of the present system, and the only home
product, on a large scale, which is more than
sufficient for the needs of the moment, is coal.
Hence it is exported from those districts where
it is not utilized in local industries, and where
access to the sea is easy: its ultimate functions
being to provide power for British and foreign
shipping or for foreign factories.

The entrepot business, in foreign and colo-
nial produce, again represents a historical ad-
vantage. It is a relic of the partial monopoly
of the carrying trade, and the control of the
supply of tropical, eastern, and colonial com-
modities to continental markets, long enjoyed
by the United Kingdom. Though aided by the
principle of inertia, and the facilities of old-
established commercial centres, such business
has not increased at a rate proportional to the
general movement of trade; in fact, for a long
period it was stationary at about £60,000,000,
though recent years have witnessed a great im-
provement. This slow rate of growth is due
mainly to the development of continental ship-
ping and the establishment of direct relations
between the European consumer and distant
markets, which have been conspicuous features

Digitized by



in the elaboration of international commerce
during the last generation.

The last point noteworthy in the general
figures, is the vast difference between the value
of imports and exports. Apart from minor
questions of statistical method, the excess of
imports represents two main facts: firstly, re-
turns for the service of some 9,000,000 tons of
foreign-going shipping, which carries nearly the
whole trade of the United Kingdom and no
inconsiderable portion of that of the rest of
the world; secondly, payments of interest by
debtor nations and foreign industries to the
great creditor nation of the 19th century, or in
some cases, perhaps, the redemption or creation
of capita] liabilities.

Classification and Distribution of Imports. —
The close relationship between foreign com-
merce and internal organization is best seen
by tracing commodities from their sources or
following them to their destination -within the
country. For this purpose much of the United
Kingdom can be removed from the map. A
small fragment of Scotland, a single port in
Ireland, the north and part of the midland
and west of England, with London and its
subsidiary ports, cover the whole region of
industrial and commercial importance. Lon-
don including the minor ports from Harwich
to Southampton, receives about 40 per cent of
the total imports of the United Kingdom. Of
this vast trade, food, in one shape or another,
accounts for nearly half; fruit, eggs, vege-
tables, butter and other minor agricultural prod-
ucts, with large supplies of beet sugar, from
the neighboring districts of Europe; grain and
meat from more distant countries; tea, coffee,
rice, and miscellaneous tropical and sub-tropical
products; all are poured in to supply the needs
of the dense population of the London area, or
to be distributed over the lines of communica-
tion radiating northward and westward.

Apart from food, the most important items
of note in the statistics of London and its sub-
sidiary ports are the silk, woolens and other
textiles consigned from France and other parts
of the continent which are valued at over £25,-
000,000 sterling. In this matter, London appears
as the great consumer of luxuries ; on the other
hand the receipt of raw wool from distant parts
of the world to the value of some £17,000,000,
and of large quantities of tin from the East,
shows her as a controller of markets and dis-
tributor of commodities which she does not
utilize herself. For the rest, the trade is made
up of innumerable minor manufactured articles,
chiefly from European countries, and of mis-
cellaneous raw materials from every region of
the world, partly for use in the many industries
of the London area, partly attracted thither
by facilities of transport and marketing.

The only group to compare with London
consists of Liverpool, with the Mersey ports,
now including Manchester. Together they take
another 30 per cent of the total imports of the
kingdom. Roughly, a third is staple food stuffs,
mainly from across the Atlantic; Liverpool vie-
ing with London as a distributer of these com-
modities; another third is raw cotton, nearly the
whole of the supply needed for native indus-
tries ; while in the miscellaneous group, the cane
sugar and tobacco of the Indies, the palm-oil,
nuts and rubber of the African and American

tropics are interesting reminders ^f the inti-
mate connection of Liverpool with the older
colonial and plantation trade.

The remainder of the import business is
divided between the eastern group of seaports,
represented by the Forth, the Tyne with Mid-
dlesboro, and the Humber; and the western,
represented by the Clyde, the Severn and
Belfast. The main intercourse of the east
coast is naturally with the continent of Europe,
from the Baltic to the Black Sea; and, for the
most part, it can be regarded as merely an
extension of London for the receipt of con-
tinental goods. One commodity alone deserves
special remark. Iron, in various elementary
stages of manufacture, enters the Humber from
abroad, while Middlesboro and the Tyne find
it necessary to import more and more foreign
iron ore for their smelting industries. The
native supplies, for certain purposes, show a
distinct and unpleasant tendency to run short
On the west coast, the Clyde and Severn, like
Liverpool, need food for the population con-
centrated on their coal areas, and have a small
share in the sugar and tobacco of the plan-
tation trade. Glasgow must look abroad for
iron ore, Cardiff and South Wales for iron,
copper, and tin, while Belfast needs flax and
linen yarn to supplement native supplies.

All ports alike, from London downward,
absorb vast quantities of timber in various
shapes. The native supply is a thing of the
past; so northern Europe, North America and
the tropics are called in to provide this neces-
sary material for railways and mining, and
above all for one of the greatest home indus-
tries, — building — an industry which does not
figure in the export list but is none the less
of vital importance in the general economy of
the country. An annual timber bill of £25,-
000,000 is a fairly prominent item in the
national balance sheet. For food, raw mate-
rials, luxuries, for nearly all the needs of civi-
lized existence, the United Kingdom depends
partly or wholly on supplies from beyond the
seas; it is small matter for surprise that the
question- of safety of trade routes, on the one
hand, and of the economic and political policy
of the regions from which the necessary sup-
plies are drawn, on the other, should loom
larger and larger in the view of statesmen, as
the economic dependence of the country steadily

Classification and Distribution of Exports. —
As an outlet for those districts which produce
the chief British staples, London cannot com-
pare with Liverpool. Over a third of the total
exports of British produce goes by way of the
Mersey, only . about a quarter by way of the
London group. At Liverpool, cotton goods
provide half the export, then come iron and
steel in all stages of manufacture, large quan-
tities of woolens, with textile machinery, chemi-
cals and earthenware. In fact the mam indus-
tries of Lancashire, Yorkshire, Cheshire, and
the Midlands are here represented roughly in
order of their relative importance. With one
or two qualifications, the foreign trade of Liver-
pool may be taken as a type of that of the whole

The export business of the London group is
less easy to define, partly owing to the many
minor industries of London and district, partly

Digitized by



owing to the modifying effects of cost of
transport from the great producing centres.
Textiles still hold the first place in the cus-
toms list, but large quantities of leather, milli-
nery and apparel, paper and stationery, pro-
visions, confectionery, pickles, and medicines,
suggest rather the minor activities of a great
centre of population than the staple industries
of modern life. In short, London may be re-
garded rather as a general store, handling
every kind of goods and forwarding to all parts.
The main activities are typical of commercial
rather than industrial England.

The export trade of the east coast has
certain peculiarities worth a moment's atten-
tion. Many million tons of coal leave the Tyne
and Humber for European ports, while the
textile industries are represented by yarns and
machinery rather than finished goods. A cer-
tain amount of iron and steel, with ships and
their machinery, completes the main features
of the trade. The European markets, owing
to their advance in industrial organization, tend
to be accessible only to certain restricted groups
of British industries; the changing conditions
are reflected in the customs records of the
eastern seaports.

On the west coast, a few million pounds
worth of cotton, iron and steel, ships and ma-
chinery represents the industrial activity of the
Glasgow district; while the linens of Belfast,
the iron, steel, and tin plate of the Severn ports
and £10,000,000 worth of steam coal from Car-
diff complete the schedule of the chief British

In the entrepot business, London and Liver-
pool alone are worthy of notice. London is still
the chief European market for wool, though
her position has been affected by the increase
of direct relations between Australia and the
continent. But the supreme control of the
world's tea trade has dropped from her grasp.
The teas of China, whether destined for
Europe or America, no longer fill her ware-
houses. In this, as in other less important
departments of commerce, the development of
commercial policy of the Powers in the Far
East and more particularly the activity of
their shipping, have gradually undermined
those special advantages on which the great
entrepot trade was founded. London still re-
mains a convenient market for miscellaneous
tropical and colonial products, and this posi-
tion she shares with Liverpool Broadly
speaking, the one looks to the east for im-
ports, the other to the west; together they
provide a collecting centre for minor com-
modities of the whole world. So long as
British trade and shipping exist on their pres-
ent scale, and London maintains its reputation
in the financial transactions of commerce, this
type of commission business is likely to per-
sist, though it may represent a decreasing pro-
portion of the total commercial activity of the

Changes in Character and Sources of Imports.
— The ultimate destination of exports or the
origin of imports may be a matter of indiffer-
ence to the individual trader; but in a review
of the whole movement of commerce, the ques-
tion of sources of supply and markets for prod-
ucts, is of the highest interest. In recent years
there havi been great changes both in the

distribution of British manufactures exported
and in the sources of the national food supply.
Raw materials for the great industries have
been affected to a less degree. A generation
ago, Europe vied with North America as an
exporter of wheat and flour to the United
Kingdom; at the close of the century her share
had fallen from over 40 to less than 10 per cent.
North America had annexed the trade, the
larger share falling to the United States, though

Online LibraryWilfrid RichmondThe Americana: a universal reference library, comprising the arts ..., Volume 10 → online text (page 22 of 185)