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r 1

^' ' i . :

SELECTIONS

ILLUSTRATING

ECONOMIC HISTORY

SINCE THE SEVEN YEARS' WAR.

COMPILED BV

BENJAMIN RAND, Ph.D.,

ASSISTANT IN PlULOSOPHy, HARVARD UNIVEUSITY.

,^„- Second lEbttton,

HE VISED AND ENLAJS^ED.

CAMBRIDGE :

JOHN WILSON AND SON.

JSniijerBitg Press.

1892.

■te}

mmi

PREFATORY NOTE

TO THE SECOND EDITION.

" I "HE first edition of these selections was published
as a text-book of required reading to accom-
pany r course of lectures on economic history given
at Harvard College. It was also adopted for a
similar purpose by other American Universities. A
continued demand for the work has led to the
preparation of the present revised and enlarged
edition. The design of the book has been to ex-
hibit in a series of articles of permanont value
different phases of economic tliought, and to pre-
sent in chronological order a narrative of some of
the more important events and influences of modern
economic history.

In this edition one chapter contained in the
former edition has been omitted and five new
selections have been introduced. Appendices have
also been added as the most convenient form in
which to place laws, purely statistical material, and

PREFATORY NOTE.

very recent economical data. A bibliography has
hkewise been inserted, which it is lioped may be
of service in the formation of special libraries of
economic history. The present edition moreover
contains an index.

The names of publishers, to whose courtesy is due
the permission to reprint a number of the selections,
will be found at the beginning of the respective

chapters.

B. R.

CxMimiDOE, December, 1891.

CONTENTS.

(,'hapter

1. Thk Colonial Policy of Euroi'e

From Adam Smith's Wealth of Niitious.

II. TiiK Ctkeat Inventions

From Spencer Walpole's History of England.

III. Economic Causes of the Fkench Revolution

, From Ileinrich Von Sybel's French Revolution.

IV. The Edicts op Stein and HAiJDENBEKa:

The Emancipating Edict of Stein
From J. R. Seeley's Life and Times of Stein.

The Agrarian Legislation of Hardenbercj
From R. B. D. Morior's " The Agrarian Legislation
of Prussia in the Present Century " in Systems of
Land Tenure in Various Countries.

V. The Orders in Council . .

From Leone Levi's History of British Commerce.

VI. The Finances of England, l70.'^-lSir> ....
From G. R. Porter's Progress of the Nation.

VII. La Politique C^mmerciale de la Restauratton

From E. Levasseur's Ilistoire dcs Classes Ouvriferes
en France depuis 1789 jusqu'ii nos Jours.

VIII. The ZoLLvi'iREiN

From John Bowring's Report on the Prussian Com-
mercial Union, Pari. Doc, 1840.

Le Zollverein

From A. Legoyt's La France et I'Jitranger.

8(5

109

I2fi

148

170

I9f;

■'»,

VI CONTENTS.

('ilAI'TKR PAOIC

\ IX. The Coun Laws, 1801-1849 liOT

Troin Leono Levi's History of British Commerce.

X. The Nkw Gold 242

From J. E. Cairnes' Essays iu Political Ecouoiny.

XI. Fbance sous le Second Empiue 1^84

From E. Levasseur's llistoire des Classes Ouvricres
ea France depuis 1789 jusqii'A nos Jours.

XII. Recent Changes in Tuanspobtation and Viw.

DUCTION !398

From David A. Wells' Recent Economic Changes.

XIII. The FnENCii Ixdemnfty:

The Payment ok the Five MiTiLiAiiDS . . . 326
From Blackwood's Edinburgii Magazine, 1875.

Thk Application of the Indemnity . . . .'WO

From G. Fr. Kolb's The Condition of Nations
(Trans. Mrs. Brewer).

XIV. The Liquidations of 1S73-7G 355

From llobert Giffen's Essays in Finance.

XV. The United States in 1880:

The Inckease of Population from 17!)0 to

1880 375

From Francis A. Walker and Henry Ganiiett's Re-
port on the Progress of the Nation, Tenth Census.

The Factory System 400

From Carroll U. Wright's Report on tlio Factory
System of the United States, Tenth Census.

The Cotton Manufactures 410

From Edward Atkinson's Report on the Cotton
Manufactures, Tenth Census

The Ikon and Steel Industries 435

From J!i,mps M. Swank's Statistics of the Iron and
Steel Production, Tenth Census.

CONTENTS.

ClMPTEB PA0«

XVI. Lkm DkTTES ruilLIQUKrt 460

From Alfred Neyinarck's Les Dcttes Publiques
Europeeiuies.

XVII. TnK Wound's Pkoouess in Tuade and Induhtry 469
From F. X. von Nouiiiann-Spallart's Uebersichten
der Weltwirthscliaft (Translated in Journal of the
Statistical Society).

8r).5

.•575

400

410

435

APPENDICES.

I. Leading Sections fbom the Enolish Navigation

Acts 611

From English Statutes at Large.

II. Impoktaxt Sections ok American Navigation

Acts 616

From United States Statutes at Large.

III. The American Civil War:

Cost ok the Civil War 520

From David A. Wells' Report as Special Commissioner
of the Revenue, 1869.

The Payment ok the War Debt 522

From Hugh McCulloch's Report as Secretary of the
Treasury, 1884.

IV. The Growth ok Canada, 1807-1890 ..... 525
From George Johnson's Graphic Statistics of Canada.

V. The United States in 1890:

The Population of the United States, 1890 . 526

By Robert P.Porter [Eleventh Census Bulletin, No. 16].

Iron and Steel Industries:

Iron-Ore Mining Industry 529

By John Birkinbine [Eleventh Census Bulletin,
No. 113].

CONTENTS.

V. TiiK Unitki) Htatks in 1890 {Continued) :

PkOUUCTION ok I'ld-IUON

By William M. Sweet [Eluveuth Census liuUutiu,
No. 0].

PuonucTioN OK Stki;l , . .

By William M. Sweet [Eleveuth Census Bulletin,
No. 13].

MUNICITAI. KkCKII'TS AM) I'iXI'KN'lJlTUUKH . .

Sunuiiaiy of Report of J. K. Upton, by Uobert P.
Porter [Eleventh Census Bulletin, No. 82].

National, Statk, and County lM)Kin'Ki)NK.s.s .
Summary of Report of J. K. Upton, by Robert P.
Porter [Eleventh Census bulletin, No. 61].

I' AUK

r,;;8

512
54;i

Biuliooraphy 545

1ni>kx 557

Paom

535

ECONOMIC HISTORY.

5;i8

. 542

545

557

THE COLONIAL POLICY OF EUROPE.

From Adam Smith's Wealth ok Nations, Book IV., Cn. VII.,

Paut II.

TITE colony of a civilized nation which takes possession
either oi' a wnste country or of one so tliiuly inhahitod
that the natives easily give place to the new settlers, ad-
vanco« "loi-e rapidly to wealth and greatness than any other
human society.

The colonists carry out with them a knowledge of agri-
culture and of other useful arts, superior to what can grow
up of its own accord in the course of many centuries among
savage and liarbarous nations. They carry out with them,
too, the habit of 8ul)ordination, some notion of the regular
government which takes place in their own country, of the
system of laws which sup[)orts it, and of a regular adminis-
tration of justice; and they naturally establish something of
tlie same kind in the new settlement. But among savage
and barbarous nations the natural progress of law and gov-
ernment is still slower than the natural progress of arts,
after law and government have been so far established as is
necessary for their protection. Every colonist gets more
land than he c.'in possibly cultivate. He has no rent, and
scarce any taxes to pay. No landlord shares with him in
its produce, and the share of the sovereign is commonly but
a trifle. He has every motive to render as great as possible
a produce which is thus to be almost entirely his own. But

ECONOMIC HISTORY.

his land is commonly so extensive that with all his own
industry, and with all the industry of other people whom he
can get to employ, he can sr Idom make it produce the tenth
part of what it is capable of producing. He is eager, there-
fore, to collect laborers from all quarters, and to reward
them with the most liberal wages. But those liberal wages,
joined to the plenty and cheapness of laud, soon make those
laborers leave him, in order to become landlords themselves,
and to reward, with equal liberality, other laborers, who
soon leave them for the same reason that they left their first
master. The 'liberal reward of labor encourages marriage.
The children, during the tender years of infancy, are well
fed and properly taken care of, and when they are grown
up the value of their labor greatly overpays their mainten-
ance. AVhen arrived at maturity the high price of labor
and the low price of land enable them to establish them-
selves in the same manner as their fathers did before them.

In other countries rent and profit eat up wages, and the
two superior orders of people oppress the inferior one. But
in new colonics the interest of the two superior orders obliges
them to treat the inferior one with more generosity and
humanity ; at least, where that inferior one is not in a state
of slavery. Waste lands, of the greatest natural fertility,
are to be had for a trifie. The increase of revenue which
the proprietor, who is always the undertaker, expects from
their improvement, constitutes his profit; which in these
circumstances is commonly very great. But this great profit
cannot be made without employing the labor of other people
in clearing and cultivating the land; and the disproportion
between the great extent of the land and the small number
of the people, which commonly takes place in new colonies,
makes it difticult for him to get this labor. He does not,
therefore, dispute about wages, but is willing to employ
labor at any price. The high wages of labor encourage
population. The cheapness and plenty of good land encour-
age improvement, and enable the proprietor to ])ay those
high wages. In those wages consists almost the svhole price
of the land; and though they are high, considered as the

COLONIAL POLICY OF EUROPE.

is own
lom he
3 tenth
there -
reward
wages,
e those
laelves,
s, who
cir first
irriage.
,re well
1 grown
laintcn-
A labor
h them-
thcm.
and the
ic. But
s obliges
kity and
(1 a state
"crtility,
le which
cts from
in these
at profit
r people
oportion
number
colonies,
oes not,
employ
icourage
encour-
,y those
|ole price
id as the

wages of labor, they are low, considered as the price of what
is so very valuable. What encourages the progress of popu-
lation and improvement encourages that of real Avealth and
greatness.

The progress of many of the ancient Greek colonics
towards wealth and greatness seems accordingly to have
been very rapid. In the course of a century or two several
of them appear to have rivalled, and even to have surpassed,
their mother cities. Syracuse and Agrigentum in Sicily,
Tarentum and Locri in Italy, Ephesus and Miletus in Lesser
Asia, appear by all accounts to have been at least equal to
any of the cities of ancient Greece. Though posterior in
their establishment, yet all the arts of refinement, philoso-
phy, poetry, and eloquence, seem to have been cultivated as
early, and to have been improved as highly in them as in
any part of the mother country. The schools of the two old-
est Greek philosophers, those of Thales and Pythagoras, Avere
established, it is remarkable, not in ancient Greece, but the
one in an Asiatic, the other in an Italian colony. All those
colonies had established themselves in countries inhabited
by savage and barbarous nations, who easily gave jilace to
the new settlers. They had plenty of good land, and as thoy
were altogether independent of the mother city, they were
at liberty to manage their own affairs in the way that they
judged was most suitable to their own interest.

The history of the Roman colonies is l)y no means so bril-
liant. Some of them, indeed, such as Florence, have in the
course of many ages, and after the fall of the mother city,
grown up to be consideralde States. Rut the progress of no
one of them seems ever to have l)een very rapid. They were
all established in conquered provinces, whic^ in most cases
had been fully inhabited before. The quantity of land as-
signed to each colonist was seldom very considerable, and,
as the colony was not indej)endent, they were not always at
lil)crty to manage their own affairs in tlie way that they
judged was most suitable to their own interest.

In the plenty of good land the European colonies estab-
lished in America and the West Indies resemble, and even

"jjFjijwfijniimjw

ECONOMIC HISTORY.

greatly surpass, those of ancient Greece. In their depend-
ency upon the mother State they resemble those of ancient
Rome; but their great distance from Europe has in all of
them alleviated more or less the effects of this dependency.
Their situation has placed them less in the view and less in
the power of their mother country. In pursuing their inter-
est their own way, their conduct has, upon many occasions,
been overlooked, either because not known or not under-
stood in Europe ; and upon some occasions it has been fairly
suffered and submitted to, because their distance rendered
it difficult to restrain it. Even the violent and arbitrary
government of Spain has, upon many occasions, been obliged
to recall or soften the orders which had been given for the
government of her colonies, for fear of a general insurrection.
The progress of all the European colonies in wealth, popula-
tion, and improvement, has accordingly been very great.

The croAvn of Spain, by its share of the gold and silver,
derived some revenue from its colonies from the moment of
their first cstal)lishmcnt. It Avas a revenue, too, of a nature
to excite in human avidity the most extravagant expectations
of still greater riches. The Spanish colonics, therefore,
from the moment of their first establishment, attracted very
much the attention of their mother country; while those of
the other European nations were for a long time in a great
measure neglected. The former did not, perha])s, thrive
the better in consequence of this attention, nor the latter the
worse in consequence of this neglect. In proportion to the
extent of the country which they in some measure possess,
the Spanish colonies are considered as less poi)ulous and
thriving than those of almost any other European nation.
The progress even of the Spanish colonies, however, in po])u-
lation and improvement, has certainly been very rai)id aiul
very great. The city of Lima, founded since the conquest,
is represented in Ulloa as containing fifty thousand inhabit-
ants near thirty years ago. Quito, which liad l)cen but a
miserable hamlet of Indians, is represented l)y the same
author as in his time equally populous. Gcinelli Carreri, a
pretended traveller, it is said, indeed, but who seems every-

COLONIAL POLICY OF EUROPE.

where to have written upon extreme good information,
represents the city of Mexico as containing a hundred thou-
sand inhabitants, — a number which, in spite of all the exag-
gerations of the Spanish writers, is probably more than five
times greater than what it contained in the time of Monte-
zuma. These numbers exceed greatly those of Boston, New
York, and Philadelphia, the three greatest cities of the
English colonies. Before the conquest of the Spaniards
there were no cattle fit for draught either in Mexico or Peru.
The lama was their only beast of burden, and its strength
seems to have been a good deal inferior to that of a common
ass. The plough was unknown among them. They were
ignorant of the use of iron. They had no coined money, nor
any established instrument of commerce of any kind. Their
commerce was carried on by barter. A sort of wooden spade
was their principal instrument of agriculture. Sharp stones
sei'ved them for knives and hatchets to cut with ; fish-bones
and the hard sinews of certain animals served them for
needles to sew with; and these seem to have been their
principal instruments of trade. In this state of things, it
seems impossible, that either of those empires could have
been so much improved or so well cultivated as at pres-
ent, when they are plentifully furnished with all sorts of
Europenn cattle, and when the use of "iron, of the plough,
and of many of the arts of Europe, has been introduced
among them. But the populousness of every country must
be in proportion to the degree of its improvement and culti-
vation. In spite of the ciiiel destruction of the natives
which folloAved the conqiicst, these two great empires are,
probably, more populous now than they ever were before:
and the people are surely very different; for we must ac-
knowledge, I apprehend, that the Spanish Creoles are in
many respects superior to the ancient Indians.

After the settlements of the Spaniards, that of the Portu-
guese in Brazil is the oldest of any European nation in Amer-
ica. But as for a long time after the first discovery neither
gold nor silver mines were found in it, and as it afforded
upon that account little or no revenue to the crown, it was

ECONOMIC HISTORY.

for a long time in a great measure neglected; and during
this state of neglect it grew up to be a great and powerful
colony. While Portugal was under the dominion of Spain,
Brazil was attacked by the Dutch, who got possession of
seven of the fourteen provinces into which it is divided.
They expected soon to conquer the other seven, when Portu-
gal recovered its independency by the elevation of the family
of Bi-aganza to the throne. The Dutch then, as enemies to
the Spaniards, became friends to the Portuguese, who were
likewise the enemies of the Si)aniards. They agreed, there-
fore, to leave that part of Brazil which they had not con-
quered to the king of Portugal, who agreed to leave that part
which they had conquered to them, as a matter not worth
disputing about with such good allies. But the Dutch
government soon began to oppress the Portuguese colonists,
who, instead of amusing themselves with complaints, took
arms against their new masters, and by their own valor and
resolution, with the connivance indeed, but without any
avowed assistance from the mother country, drove them out
of Brazil. The Dutch, therefore, finding it impossible to keep
any part of the country to themselves, were contented that
it should be entirely restored to the crown of Portugal, in
this colony there are said to be more than six hundred thou-
sand people, either Portuguese or descended from Portuguese,
Creoles, mulattoos, and a mixed race between Portuguese and
Brazilians. No one colony in America is supposed to contain
so great a number of people of European extraction.

Towards the end of the fifteenth, and during the greater
part of the sixteenth century, Spain and Portugal were the
two great naval powers upon the ocean ; for though the com-
merce of Venice extended to every part of Europe, its fleets
had scarce ever sailed beyond the Mediterranean. The Span-
iards, in virtue of the first discovery, claimed all America
as their own ; and though they could not hinder so great a
naval power as that of Portugal from settling in Brazil, such
was at that time the terror of their name that the greater
part of the other nations of Europe were afraid to establish
themselves in any other part of that great continent. The

COLONIAL POLICY OF EUROPE.

I during
powerful
)f Spain,
ission of
divided.
3n Portu-
he family
ncmies to
Avlio were
ed, there-
L not con-
) tliat part
not worth
the Dutch
! colonists,
lints, took
1 valor and
ithout any
re them out
ible to keep
tented that
rtugal. lu
ndred thou-
Portuguesc,
tugucse and
d to contain

)n.
the greater
^al were the
irh the corn-
its fleets
The Span-
all America
r so great a
Brazil, such
the greater
to establish
Itineut. The

W-.

French who attempted to settle in Florida were all mur-
dered by the Spaniards. But the declension of the naval
power of this latter nation, in consequence of the defeat or
miscarriage of what they called their Invincible Armada,
which haj)j)ened towards the end of the sixteenth century,
put it out of their power to obstruct any longer the settle-
ments of the other European nations. In the course of the
seventeenth century, therefore, the English, French, Dutch,
Danes, and Swedes, all the great nations who had any ports
ui)on the ocean, attempted to make some settlements in the
new world.

The Swedes established themselves in New Jersey; and
the number of Swedish families still to be found there suffi-
ciently demonstrates that this colony was very likely to
prosper had it been protected by the mother country. But
being neglected by Sweden it was soon swallowed up by the
Dutch colony of New York, which again, in 1674, fell under
the dominion of the English.

The small islands of St. Thomas and Santa Cruz are the
only countries in the new world that have ever been pos-
sessed by the Danes. These little settlements too were
under the government of an exclusive company, which had
the sole right both of purchasing the surplus produce of the
colonists and of supplying them M-ith such goods of other
countries as they wanted, and which, therefore, both in its
purchases and sales, had not only the power of oppressing
them, but the greatest temptation to do so. The government
of an exclusive company of merchants is, perhaps, the worst
of all governments for any country whatever. It Avas not,
however, able to stop altogether the progress of these colo-
nies, though it rendered it more slow and languid. The
late king of Denmark dissolved this company, and since that
time the prosperity of these colonies has been very great.

The Dutch settlements hi the West, as well as those in the
East Indies, were originally put under the governuKMit of an
exclusive company. The progress of some of them, there-
fore, though it has been considerable, in comparison with
that of almost any country that has been long peopled and

!l|

ECONOMIC HISTORY.

established, has been languid and slow in comparison with
that of the greater part of new colonies. The colony of
Surinam, though very considerable, is still inferior to the
greater part of the sugar colonies of the other European
nations. The colony of Nova Belgia, now divided into the
two provinces of New York and New Jersey, would probably
have soon become considerable too, even though it had re-
mained under the government of the Dutch. The plenty and
cheapness of good land are such powerful causes ot prosper-
ity that the very worst government is scarce capable of
checking altogether the efiicacy of their operation. The
great distance too from the mother country would enable the
colonists to evade more or less, by smuggling, the monopoly
which the company enjoyed against them. At present the
company allows all Dutch ships to trade to Surinam upon
paying two and a half per cent upon the value of their cargo
for a license; and only reserves to itself exclusively the di-
rect trade from Africa to America, which consists almost
entirely in the slave trade. This relaxation in the exclu-
sive privileges of the company is probably the principal cause
of that degree of prosperity which that colony at present
enjoys. Cura^oa and Eustatia, the two principal islands
belonging to the Dutch, are fi-ee ports open to the ships of
all nations; and this freedom, in the midst of better colo-
nies whose ports are open to those of one nation only, has
been the great cause of the prosperity of those two barren
islands.

The French colony of Canada was, during the (greater
part of the last century, and some part of the present, under
the government of an exclusive company. Under so unfav-
orable an administration its progress was necessarily very
slow in comparison with that of other new colonies ; but it be-
came much more rapid when this company was dissolved after
the fall of what is called the Mississippi scheme. When the
English got possession of this country they found in it near
double the number of inhabitants which Father Charlevoix
had assigned to it between twenty and thirty years before.
That Jesuit had travelled over the whole country, and had

COLONIAL POLICY OF EUROPE.

with
ny of
to the
'opcan
ito the
obably
lad rc-
ity and
irosper-
iblc of
The
able the
Lonopoly
sent the
im upon
eir cargo
y the di-
9 ahnost
[\Q exclu-
ipal cause
t present
il islands
e ships of
jtter colo-

only, has
0 barren

lie ji;reater
lent, under

so unfav-
larily very
I; but it bc-
lolvcd after

When the
. in it near
Icharlevoix
]ars before.
[y, and had

no inclination to represent it as less considerable than it
really was.

The French colony of St. Domingo was established by
pirates and freebooters, Avho for a long time neither re-
quired the protection nor acknowledged the authority of
France ; and when that race of banditti became so far citi-
zens as to acknowledge this authority, it was for a long time
necessary to exercise it with very great gentleness. During
this period the population and improvement of this colony
increased very fast. Even the oppression of the exclusive
company, to which it was for some time subjected, with all
the other colonies of France, though it no doubt retarded,
had not lieen able to stop its progress altogether. The
course of its prosperity returned as soon as it was relieved
from that oppression. It is now the most important of the
sugar colonies of the West Indies, and its produce is said to
be greater than that of all the English sugar colonies put to-
gether. The other sugar colonies of France are in general
all very thriving.

But there are no colonies of which the progress has been
more rapid than that of the English in North America.

Plenty of good land and liberty to manage their own
affairs their own way, seem to be the two great causes of the
prosperity of all new colonies.

In the plenty of good land, the English colonies of North
America, though no doubt very abundantly provided, are,
however, inferior to those of the Spaniards and Portuguese,
and not superior to some of those possessed by the French
before the late war. But the political institutions of the
English colonies have been more favorable to the improve-
ment and cultivation of this land than those of any of the
other three nations.

First, the engrossing of uncultivated land, though it has
by no means been prevented altogether, has been more re-
strained in the English colonies than in any other. The
colony law which imposes upon every proprietor the obliga-
tion of improving and cultivating, within a limited time, a
certain proportion of his lands, and which, in case of failure,

/'t;

:z"

ECONOMIC HISTORY.

illi

8; liin

declares those neglected lands grantable to any other person,
though it has not, perhaps, been very strictly executed, has,
however, had sonic effect.

Secondly, in Pennsylvania there is no right of primogeni-
ture, and lands, like movables, are divided equally among
all the children of the family. In three of the provinces of
New England the oldest has only a double share, as in the
Mosaical law. Though in those provinces, therefore, too
great a quantity of land should sometimes be engrossed by
a particular individual, it is likely, in the course of a gem* a-
tion or two, to be sufticiently divided again. In the omer
English colonies, indeed, the right of primogeniture takes
place, as in the law of England. But in all the English
colonics the tenure of the lands, which are all held by free
socage, facilitates alienation, and the grantee of any exten-
sive tract of land generally finds it for his interest to alien-
ate, as fast as he can, the greater part of it, reserving only
a small quit-rent. In the Spanish and Portuguese colonies,
what is called the right of Majorazzo^ takes i)laco in the
succession of all those great estates to which any title of
honor is annexed. Such estates go all to one person, and
are in effect entailed and unalienable. The French colonies,
indeed, arc subject to the custom of Paris, which, in the in-
heritance of land, is much more favorable to the younger
children than the law of England. But, in the French colo-
nies, if any part of an estate held by the noble tenure of
chivalry and homage is alienated, it is for a limited time
subject to the right of redemption, either by the heir of the
superior or by the heir of the family; and all the largest
estates of the country are held by such noble tenures, which
necessarily embarrass alienation. But in a new colony a
great uncultivated estate is likely to be much more speedily
divided by alienation than by succession. The plenty and
cheapness of good land, it has already been observed, are the
principal causes of the rapid prosperity of new colonies.
The engrossing of land, in effect, destroys this plenty and
cheapness. The engrossing of uncultivated land, besides, is

^ Jus Majoratus.

COLONIAL POLICY OF EUROPE.

the greatest obstruction to its improvement. But the labor
that is employed in the improvement and cultivation of land
affords the greatest and most valuable produce to the society.
The produce of labor in this case pays not only its own
wages, and the profit of the stock which emjjloys it, but the
rent of the laud too upon which it is employed. The labor
of the English colonists, therefore, being more employed in
the improvement and cultivation of land, is likely to afford
a greater and more valuable produce than that of any of
the other three nations, which by the engrossing of land is
more or less diverted toward other employments.

Thirdly, the labor of the English colonists is not only
likely to afford a greater and more valuable produce, but, in
consociucnce of the moderation of their taxes, a greater pro-
portion of this produce belongs to themselves, which they
may store up and employ in putting into motion a still greater
quantity of labor. The English colonists have never yet
contributed anything towards the defence of the mother coun-
try, or towards the support of its civil government. They
themselves, on the contrary, have hitherto been defended al-
most entirely at the expense of the mother country. But the
expense of fleets and armies is out of all proportion greater
than the necessary expense of civil governmout. The ex-
pense of their own civil government has always been very
moderate. It has generally been confined to what was neces-
sary for paying competent salaries to the governor, to the
judges, and to some other officers of police, and for main-
taining a few of the most useful public works. The expense
of the civil establishment of Massachusetts Bay, before the
commencement of the present disturbances, used to ))o but
about j£18,000 a year; that of New Hampshire and Rhode
Island, £3,500 each; that of Connecticut, X4,000; that of
New York and Pennsylvania, £4,500 each; that of New
Jersey, £1,200; that of Virginia and South Carolina, £8,000
each. The civil establishments of Nova Scotia and Georgia
are partly supported by an annual grant of Parliament.
But Nova Scotia pays, besides, about £7,000 a year to-
wards the public expenses of the colony ; and Georgia about

wsmm

ECONOMIC III STORY.

j£2,500 a year. All the different civil establishments in
North America, in short, exclusive of those of Maryland and
North Carolina, of which no exact account has been {jfot, did
not, before the commencement of the present disturbances,
cost the inhabitants al>ove £04,700 a year, — an ever-memo-
rable example at how small an expense three millions of
people may not only be governed, but well governed. The
most important part of the expense of government, indeed,
that of defence and i)rotection, has constantly fallen upon
the mother country. The ceremonial, too, of the civil gov-
ernment in the colonies, upon the reception of a new gov-
ernor, upon the opening of a new assembly, etc., though
sufficiently decent, is not accompanied with any expensive
pomp or parade. Their ecclesiastical government is con-
ducted upon a plan equally frugal. Tithes are unknown
among them; and their clergy, who are far from being
numerous, are maintained either by moderate stipends, or by
the voluntary contributions of the i)eoi)lc. The power of
Spain and Portugal, on the contrary, derives some sujiport
from the taxes levied upon their colonies. France, indeed,
has never drawn any c(jnsiderable revenue from its colonics,
the taxes which it levies upon them being generally sjicnt
among them. But the colony government of all these three
nations is conducted upon a much more expensive plan, and
is accompanied with a much more expensive ceremonial. The
sums spent upon the reception of a new viceroy of Peru, for
example, have frequently been enormous. Such ceremonials
are not only real taxes paid by the rich colonists upon those
particular occasions, but they serve to introduce among them
the habit of vanity and expense npon all other occasions.
They are not only very grievous occasional taxes, but they
contribute to establish perpetual taxes of the same kind still
more grievous, — the ruinous taxes of private luxury and ex-
travagance. In the colonies of all those three nations,
too, the ecclesiastical government is extremely oppressive.
Tithes take place in all of them, and are levied with the
utmost rigor in those of Spain and Portugal. All of them,
besides, are oppressed with a numerous race of mendicant

COLONIAL POLICY OF EUROPE.

and
did

CC8,

mo-

rt of

The
Icod,
upon

gov-

loiigh
;usivc
con-
mown
being
or by
A- or of
.upport
udocd,
Ionics,
spent
three
and
The
ru, for
nonials
those
o- them
asions.
ut they
nd still
and ex-
ations,
ressive.
ith the
,f them,
ndicant

friars, whose beggary, being not only licensed but consecrated
by religion, is a most grievous tax upon the poor people,
who are most carefully taught that it is a duty to give, and
a very great sin to refuse them their charity. Over and
above all this, the clergy are, in all of them, the greatest
engrossers of land.

Fourthly, in the disposal of their surjilus produce, or of
what is over and above their own consumption, the English
colonies have been more favored, and have been allowed a
more extensive nuirket, than those of any other European na-
tion. Every European luvtion has endeavored, more or less,
to monopolize to itself the comUierco of its colonicp, and uj)on
that account has prohibited thu sliips of foreign nations from
trading to them, and has prohibited them from importing Eu-
rojjean goods from any foreign nation. But the manner in
which this monopoly has been exercised in dill'erent nations
has been very different.

Some nations have given up the whole commerce of their
colonies to an exclusive company, of whom the colonics were
obliged to l)uy all such European goods as they wanted, and
to whom they were obliged to sell the whole of their own
surplus produce. It was the interest of the company, there-
fore, not only to sell the former as dear, and to buy the latter
as cheap as possible, but to buy no more of the latter, even
at this low price, than what they could dispose of for a very
high price in Europe. It was their interest not only to
degrade in all cases the value of the surplus produce of the
colony, but in many cases to discourage and keep down the
natural increase of its quantity. Of all the cxi)edients that
can well be contrived to stunt the natural growth of a new
colony, that of an exclusive company is undoubtedly the
most effectual. This, however, has been the policy of Hol-
land, though their compan}', in the course of the present
century, has given up in many respects the exertion of their
exclusive privilege. This, too, was the policy of Denmark
till the reign of the late king. It has occasionally been the
policy of France, and of late, since 1755, after it had been
abandoned by all other nations on account of its absurdity,

ECONOMIC HISTORY.

it has bccomo the policy of Portugal with regard at least to
two of the principal provinces of J3razil, Pernumbuco and
Manmnon.

Otlier nations, without establishing an exclusive company,
have confined the whole connnerce of their colonies to a jtar-
ticular port of the mother country, from whence no ship was
allowed to sail but either in a fleet, and at a particular sea-
son, or, if single, in consequence of a particular license,
which in most cases was very well j)aid for. This policy
oi)ened, indeed, the tradi^ of the colonies to all the natives of
the mother country, i)rovided they traded from the projter j)ort,
at the proper season, and in the ])roj)er vessels. IJut as all
the different merchants who joined their stocks in order to fit
out those licensed vessels would find it for their interest to
act in concert, the trade which was carried on in this manner
would necessarily be conducted very nearly ujjon the same
principles as that of an exclusive comjiany. The profit of
those merchants would be almost equally exorbitant and op-
pressive. The colonies w^ould be ill supplied and would bo
obliged both to buy very dear and to sell very cheap. This,
however, till within these few years, had always been the pol-
icy of Spain ; and the price of all Euro])can goods, accordingl}-,
is said to have been enormous in the Spanish West Indies.
At Quito, we are told ))y UUoa, a pound of iron sold for about
four and sixpence, and a pound of steel for about six and nine-
pence sterling. But it is chiefly in order to purchase Euro-
pean goods that the colonies part with their own produce.
The more, therefore, they pay for the one, the less they really
get for the other, and the dearness of the one is the same thing
Avith the cheapness of the other. The policy of Portugal is
in this respect the same as the ancient j)olicy of Spain, with
regard to all its colonies except Pernambuco and Jlarannon,
and with regard to these it has lately adopted a still worse.

Other nations leave the trade of their colonies free to all
their sul)jects, who may carry it on from all the different ports
of the mother country, and who have occasion for no other li-
cense than the common dispatches of the custom-house. In
this case the number and dispersed situation of the different

COLONIAL POLICY OF EUROPE.

traders render it impossible for them to enter into any gen-
eral coniltiimtion, and their competition is stinicient to hinder
them from making very exorbitant profits. Under so liberal a
policy till! colonies are enabled both to sell their own produce
and to buy tin; goods of Europe at a reasonable price. But
since th(! dissoluticm of the Plymouth company, when our col-
onies were but in their infancy, this has always been the pol-
icy of Huglaiid. It has generally too been that of France, and
has been uniformly so since the dissolution of what, in Eng-
land, is connuonly called their Mississippi company. The
profits of the trade, therefore, which France and England
carry on with their colonies, though no doubt somewhat
higher than if the competition was free to all other naticma,
arc, however, by no means exorbitant; and the price of Eu-
ropean goods accordingly is not extravagantly high in the
greater part of the colonics of either of those nations.

In the exportation of their own surplus produce too, it is
only with regard to certain commodities that the colonies of
Great H; "tain are confined to the market of the mother coun-
try, 'ily. ^le commodities, having been enumerated in the act
of navigation and in some other subsequent acts, have upon
that accoimt been called enumerated commodities. The rest
are called non-enumerated; and may be exported directly to
other counties, provided it is in British or Plantation ships,
of whidi the owners and three fourths of the mariners are
British sul)ject3.

Among the non-enumerated commodites are some of the
most important productions of America and the West Indies:
grain of all sorts, lumber, salt provisions, fish, sugar, and
rum.

Grain is naturally the first and principal object of the
culture of all new colonies. By allowing them a very exten-
sive market for it, the law encourages them to extend this
culture much beyond the consumption of a thinly inhabited
country, and thus to provide beforehand an ample subsist-
ence for a continually increasing population.

In a country quite covered with wood, where timber conse-
quently is of little or no value, the expense of clearing the

y-vl

mmm

ECONOMIC HISTORY.

ground is the principal obstacle to improvement. By allow-
ing the colonics a very extensive market for their lumber, the
law endeavors to facilitate improvement by raising the price
of a commodity which would otherwise be of little value, and.
therel)}' enabling them to make some profit of what would
otherwise be mere expense.

In a country neither half-peopled nor half-cultivated, cattle
naturally multiply beyond the consumption of the inhabi-
tants, and are often upon that account of little or no value.
But it is necessary, it has already been shown, that the price
of cattle should bear a certain proportion to that of corn
before the greater part of the lands of any country can be
improved. By allowing to American cattle, in all shapes,
dead and alive, a very extensive market, the law endeavors to
raise the value of a commodity of which the high price is so
very essential to imj)rovement. The good effects of this
liberty, however, must be somewhat diminished by the 4th
of George III., c. 15, which puts hides and skins among the
enumerated commodities, and thereby tends to reduce the
valuation of American cattle.

To increase the shipping and naval power of Great
Britain by the extension of the fisheries of our colonies is
an object which the legislature seems to have had almost
constantly in view. Those fisheries upon this account have
had all the encouragoment which freedom can give them, and
they have flourished accordingly. The New England lishery
in particular was, before the late disturbances, one of the
most important, perhaps, in the world. Tlie whale-fishery,
which, notwithstanding an extravagant bounty, is in Cireat
Britain carried on to so little purpose that, in the opinion
of , lany people (which I do not, however, pretend to war-
rant), tlie whole produce does not much exceed the value of
the bounties which arc annually paid for it, is in New Eng-
land carried on without any bounty to a very great extent.
Fish is one of the principal articles with which the North
Amcriciins trade to Spain, Portugal, and the Mediterranean.

Sugar was originally an enumerated commodity which
could be exported only to Great Britian. But in 1731, upon

COLONIAL POLICY OF EUROPE.

the

a representation of the sugar-planters, its exportation was
permitted to all parts of the world. The restrictions, how-
ever, with which this liberty was granted, joined to the high
])ricc of sugar in Great Britain, have rendered it in a great
measure ineffectual. Great Britain and her colonies still
continue to be almost the sole market for all the sugar pro-
duced in the British plantations. Their consumption in-
creases so fast that, though in conse([uencc of the increasing
improvement of Jamaica, as well as of the Ceded Islands,
the importation of sugar has increased very greatly within
these twenty years, the exportation to foreign countries is
said to be not much greater than before.

Rum is a very important article in the trade which the
Americans carry on to the coast of Africa, from which they
liring back negro slaves in return.

If the whole sur{)lus produce of America in grain of all
sorts, in salt provisions, and in (ish, had been })ut into the
enumeration, and thereby forced into the market of Great
Britain, it would have interfered too much with the produce
of the industry of our own people. It was probal)ly not so
much from any regard to the interest of America, as from
a jealousy of this interference, that those important com-
modities have not only been kept out of the enumeraticm,
but that the iuiportation into Great Britain of all grain, ex-
cept rice, and of all salt provisions, has, in the onlinary
state of the law, been prohibited.

The non-enumerated commodities could originally be ex-
ported to all parts of the world. Lumber and rice, hav-
ing been once put into the enumeration, when they were
afte.'wards taken out of it were confined, as to the European
market, to the countries that lie south of Cajie Finisterre.
By th(> Gth of George III., c. 52, all non-enumerated com-
modities were subjected to the like restriction. The i)arts of
Europe which lie south of Cape Finisterre are not manufac-
turing countries, and we were less jealous of the colony ships
carrying home from them any manufactures which could
interfere with our own.

The enumerated commodities are of two sorts : first, such

ECONOMIC HISTORY.

■A !

•H i

as are cither the peculiar produce of America, or as cannot
be produced, or at least are not produced, in the mother
country. Of this kind are molasses, coffee, cocoanuts, to-
bacco, pimento, ginger, whale-fins, raw silk, cotton-wool,
beaver and other peltry of America, indigo, fustic, and
other dyeing woods. .Secondly, such as are not the peculiar
produce of America, but which are Pi^l may J^e produced in
the mother country, though not in such quantities as to suj)-
ply the greater part of her demand, which is i)rincipally sup-
plied ii'uni foreign countries. Of this kind are all naval
stores, masts, yards, and bowsjjrits, tar, pitch, and turpen-
tine, pig and bar iron, copper ore, hides and skins, pot and
pearl ashes. The largest importation of commodities of the
first kind could not discourage the growth or interfere with
the sale of any part of the produce of the mother coimtry.
By confining them to the home market, our merchants, it
was expected, would not only be enablerl to buy them cheaper
in the Plantations, and consequently to sell them with a
better i)rofit at home, but to establish between the Planta-
tions and foreign countries an advantageous carrying trade,
of which Great Britain was necessarily to ])e the centre or
cm|)orium, as the European coimtry into which those com-
modities were first to be imported. The importation of
commodities of the second kind might be so managed too, it
was sujtposcd, as to interfere, not with the sale of those of
the same kind which were produced at home, but with that
of those which were imported from foreign countries; be-
cause, by means of proper duties, they might be rendered
always somewhat dearer than the former, and yet a good
deal cheaper than the latter. By confining such connnod-
ities to the home market, therefore, it was projiosed to dis-
courage the produce, not of Great Britain, but of some
foreign countries with which the balance of trade was be-
lieved to be unfavorable to Great Britain.

The ])r()hibition of exporting from the colonies to any
other country but Great Britain masts, yards, and bow-
sprits, tar, pitch, and turpentine naturally tended to lower
the price of timber in the colonies, and consequently to in-

COLONIAL POLICY OF EUROPE.

not

;her
to-

ool,

and

iliar

?d in

sup-

aaval

vpcn-

)t and

of the

3 -with

untrj.

ats, it

lieaper

with a

manta-

: trade,

ntrc or

^e com-

tion of
too, it

Aiose of

litli tliat
be-

Icndcred
a good

lommod-
to dis-
if some
was be-
to any
jiid bo-vr-
Ito lower
lly to in-

1
■I

crease the expense of clearing their Lands, the principal
obstacle to their improvement. But about the bcgiii-iing of
the present century, in 1703, the pitch and tar comi>any of
Sweden endeavored to raise the price of their commotlities
to Great Britain by prohibiting their exportation, except in
their own ships, at their own price, and in such (piantities as
they thought proper. In order to counteract this notable
piece of mercantile policy, and to render herself as much as
possible independent, not only of Sweden, but of all the other
northern powers. Great Britain gave a bounty upon the im-
portation of naval stores from America, and the effect of
this bounty was to raise the price of timber in America
nuK'h more than the confinement to the home market could
lower it; and as both regulations were enacted at the same
time, their joint ef^'cct was rather to encourage than to dis-
courairc the clearing of land in America.

Though pig and bar iron too have been put among the
enumerated commodities, yet as, when imjjortcd from Amer-
ica, they arc exempted from considerable duties to which
they arc subject when imported from any other country, the
one part of the regulation contriI)utes more to encourage the
erection of furnaces in America, than the other to discourage
it. There is no manufacture which occasions so great a con-
sumptiim of wood as a furnace, or which can contril)ute so
much to the clearing of a country overgrown with it.

The tendency of some of these regulations to raise the
value of timber in America, and thereby to facilitate the
clearing of the land, was neither, perhaps, intended nor
understood I)y the legislature. Though their beneficial
effects, however, have been in this respect accidental, they
have not upon that account been less real.

The most perfect freedom of trade is permitted between
the British colonies of America and the West Indies, l)oth
in the enumerated and in the non-enumerated commodities.
Those colonies are now become so populous and thriving
that each of them finds in some of the others a great aud ex-
tensive market for every part of its produce. All of them
taken together, they make a great internal market for the
produce of one another.

tr;i

''''■\

;

20 ECONOMIC HISTORY.

The lil)(?rality of England, however, towards the trade of
her colonies has been confined chiefly to what concerns the
market lor their produce, either in its rude state, or in what
may be called the very first stage of manufacture. The more
advanced or more refined manufactures even of the colony
produce, the merchants and manufacturers of Great Britain
choose to reserve to themselves, and have prevailed upon the
legislature to prevent their establishment in the colonies,
sometimes by high duties, and sometimes by absolute
prohibitions.

While, for example. Muscovado sugars from the British
jilautalions pay upon imitortation oiUy G*-, 4*?. the hundred
weight; white sugars pay £1, Is. li/. ; and refined, either
double or single, in loaves, £4, 2.'*. 5J. ,f^. When those high
duties were imposed Great Britain was the sole, and she
still continues to be the princijjal niarket to which the
sugars of the British colonies could be exported. They
amounted, therefore, to a prohibition, at first of claying or
refining sugar for any foreign market, and at present of clay-
ing or refining it for the market, which takes off, perhaps,
more than nine tenths of the whole produce. The manufac-
ture of claying or refining sugar accordingly, though it has
flom'ished in all the sugar colonies of France, has been little
cultivated in any of those of Kna-land, ex<'(>]it for the market
of the colonies themselves. While Cirenad.i was in the
hands of the French there was a refinery of si'irar, by clay-
ing at least, upon almost every plantati'Mi. ^^ince it fell
into those of the English, almost all works of this kind have
been given up, and tluMV are at pres(>nt, October. 177:5. I nni
assured, not aliove two or three remainimi' in the island. At
present, however, l)y an indulgence of the custom-honse,
clayed or refined sugar, if reduced from loaves into pinMbr,
is commonly iniport('(l as Muscovado.

While Great [Jrilain encourages in Ameiiea the manul'ac-
tures of pig and bar iron, by exemjiting them from duties
to which the like commodities are subjected when inijioi'ted
from any other country, she imjioses an absolute ju-ohibition
njion the erection of steel furnaces and slit-mills in any of

COLONIAL POLICY OF EUROPE.

dc of

IS the

what

more
colony
Iritaiu
on the
Ionics,
ijsoUite

r>iitish

imulrocl

, oithcr

)sehig-h

and she

M-\\ the
Thoy

uyinsr or

: (jf clay-

porhaps,

nanufae-
.•h it has

ecu little
i« niarkot
s m the

, bv clay-

./it fell

viiid have

ilii-lioiisc,

) poWiliV,

maiiiii'ae-
oni <lutie9

iiui»oi'teci
irohiMtion

in anv of

and

her American plantations. She will not suffer her colonists
to work in those more refined mainifacturos, ovon for their
own consumption; but insists upon their purchasing of her
merchants and manufacturers all goods o*' this kind which
they have occasion for.

She prohibits the exportation from one province to another
by water, and even the carriage by land upon horseljiick or
in a cart, of hats, of wools and woollen goods, of the produce
of America, — a regulation which effectually prevents the
establishment of any manufacture of such commodities for
distant sale, and confines the industry of her colonists in
this way to such coarse and household manufactures as a
private lamily commonly makes for its own use, or for that
of some of its neighbors in the same province.

To prohibit a great people, however, from making all that
they can of every part of their own produce, or from employ-
ing their stock and industry in the way that they judge most
advantageous to themselves, is a manifest violation of the
most sacred rights of mankind. Unjust, however, as such
prohibitions may be, they have not hitherto been very hurtful
to the colonics. Land is still so cheap, and, consequently,
labor so dear among them, that they can import from the
mother country almost all the more refined or more advanced
manufactures cheaper than they could make them for them-
selves. Though they had not, therefore, been prohibited
from establishing such manufactures, yet in their present
state of improvement a regard to their own interest would,
l»roljably, have prevented them from doing so. In their
present state of improvement those prohildtions, perhaps,
without cramping their industry, or restraining it from any
employment to which it woidd have gone of its own accoril,
are only impertinent badges of slavery imposed upon them,
without any sufficient reason, by the groundless jealousy of
the merchants and manufacturers of the mother countr}'. In
a more advanced state they might be really oppressive and
insupportable.

Great Britain too, as she confines to her own market some
of the most important productions of the colonies, so in

H';

ECONOMIC HISTORY.

compensation she gives to sonic of tlioni an advantage in that
nuirlcct ; sometimes by imposing higlier duties npon the like
product ion.j wlien imported from other countries, and some-
times by giving bounties upon their importation from the
colonics. In the first way she gives an advantage in the
home market to the sugar, tobacco, and iron of her own
colonies, and in the second to their raw silk, to their hemp
and flax, to their indigo, to their naval stores, and to their
building-timber. This second way of encouraging the colony
produce, by bounties upcm importation, is, so far as I have
been able to learn, peculiar to Great Britain. The first is
not. Portugal docs not content herself with imposing higher
duties upon the importation of tobacco from any other coun-
try, but prohibits it under the severest penalties.

With regard to the im])ortation of goods from Europe,
England has likewise dealt more liberally with her colonies
than any other nation.

Great Britain allows apart, almost always the half, gener-
ally a larger portion, and sometimes the whole of the duty
which is paid upon the importation of foreign goods, to bo
drawn back u))on their exportation to any foreign country.
No independent foreign country, it was easy to foresee, would
receive them if they came to it loaded with the heavy duties
to which almost all foreign goods arc subjected on their im-
portation into Great Britain. Unless, therefore, some part
of those duties was drawn back upon exportation, there was
an end of the carrying trade, — a trade so much favored by
the mercantile system.

Our colonies, however, arc by no means independent for-
eign countries; and Great Britain, having assumed to her-
self the exclusive right of sui)plying them with all goods
from Europe, might have forced them (in the same manner
as other countries have done their colonies) to receive sucji
goods loaded with all the same duties which they paid in the
mother country. But, on the contrary, till 1703, the same
drawbacks were paid ujjon the exportation of the greater part
of '' !gn goods to our colonics as to any indci)endcnt for-
c; 51 c im^cy. In 1703, indeed, by the 4th of George III.,

COLONIAL POLICY OF EUROPE.

c. 15, this indulgence was a good deal abated, and it was
enacted, "Tliat no part of the duty called the old subsidy
should be drawn back for any goods of the growth, produc-
tion, or nuuuifacture of Europe or the East Indies, wliich
should be exported from this kingdom to any British colony
or )ilantation in America; wines, white calicoes, and muslins
excepted." Before this law many dilTerent sorts of foreign
goods might have been bought cheaper in the plantations
than in the mother country; and some may still.

Of the greater part of the regulations concerning the
colony trade, the merchants who carry it on, it must be ob-
served, have been the prinei[)al advisers. We must not
wonder, therefore, if, in the greater part of them, their in-
terest has been more considered than either that of the
colonies or that of the mother country. Tn fheir exclusive
privilege of su])plying the colonies with all the goods wliicli
they wanted from Europe, and of i)urchasing all such parts
of their sui-plus jn'oducc as could not interfere with any of
the trades which they themselves carried on at home, the in-
terest of the C(jlonies was sacrificed to the interest of those
merchants. In allowing the same drawl)acks up<m the re-
exportation of the greater part of Ein-opcnn and East India
goods to the colonies, as upon their re-exportation to any
independent country, the interest of the mother country was
sacriliced to it, even according to the mercantile ideas of
that interest. It was for the interest of the merchants to pay
as little as possible for the foreign goods which they sent to
the colonies, and consetiuently, to get back as mueli as pos-
sible of the duties which they advanced upon their importa-
tion into Great Britain. They might thereby l)e eiuibled to
sell in the colonies, either the same quantity of goods with
a greater profit, or a greater quantity with the same i)rolit,
and, consequently, to gain something either in the one way
or the other. It was likewise for the interest of the colonies
to get all such goods as cheap and in as great abundance as
possible. But this might not always be for the interest of
the mother country. She might frequently suffer both in
her revenue, by giving back a great part of the duties which

tmummmimmt

ECONOMIC HISTORY.

had been paid upon the importation of such goods; and in
her munuluctiux'S, by being undersold in the colony market,
in conseciuencc of the easy terms upon which foreign manu-
factures could be carried thither by means of those draw-
backri. The progress of the linen manufacture of Great
JJritaiu, it is commonly said, has been a good deal retarded
by the drawbacks ujjon the re-exportation of German linen to
the American colonies.

But though the policy of Great Britain with regard to the
trade of her colonies has been dictated by the same mercan-
tile spirit as that of other nations, it has, however, upon the
whole, been less illiberal and oppressive than that of any of
them.

In everything, except their foreign trade, the lil)erty of
the English colonists to manage their own affairs their own
way is complete. It is in every resjject equal to that of
their fellow-citizens at home, and is secured in the same
manner, by an assembly of the representatives of the people,
who claim the sole right of imposing taxes for the support of
the colony government. The authority of this assembly
overawes the executive power, and neither the meanest nor
the most obnoxious colonist, as long as he obeys the law,
has anything to fear from the resentment, cither of the gov-
ernor, or of any other civil or military olTiecr in the province.
The colony assemblies, though, like the house of commons in
England, they are not always a very equal rei)resentation of
the people, yet they approach more nearly to that character ;
and as the executive power cither has not the means to cor-
rii|;t them, or, on account of the support which it receives
from the mother country, is not under the necessity of doing
so, they arc pcrha])S in general more influenced l)y the incli-
nations of their constituents. The councils, which, in the
colony legislatures, correspond to the house of lords in Great
Britain, are not composed of an hereditary noliility. In
some of the colonies, as in three of the governments of New
England, those councils arc not appointed by the king, but
chosen by the representatives of the peopV.\ In none of the
English colonies is there any hereditary nobility. In all of

COLOyiAL POLICY OF EUROPE.

thom, indeed, as in all other free countries the descendant
of an old colony family is more respected than an upstart of
equal mt-rit and fortune; but he is only more respected, and
he has no itrivileges by which he can be troublesome to his
neighbors. Ijcfore the comniencemeut of the, present dis-
turbances, the cohmy assemblies had not only the legislative,
but a i)art of the executive power. In Connecticut and
Rhode Island they elected the governor. lu the other colo-
nies they appointed the revenue oflicers who collected the
taxes imposed I»y those rcs])ectivc assemblies, to whom those
oflicei's were innnediately responsible. There is more ecpial-
ity, therefore, among the English colonists than among the
inhaliitauls of the mother country. Their manners are moro
republican, and their governments, those of three of the
provinces of New England in particular, have hitherto been
more repul)lican too.

The absolute governments of Spain, Portugal, and France,
on the contrary, take place in their colonies; and the dis-
cretionary jjowers which such governments commonly dele-
gate to all their inferior ofticers are, on account of the great
distance, naturally exercised there with more than ordinary
violence. Under all absolute governments there is more
liberty in the ca|iital than in any other part of the country.
The sovereign himself can never have either interest or in-
clination to ))ervert the order of justice, or to oppi-ess the
great body of the people. In the capital his ])resence over-
awes more or less all his inferior oHicers, who in the remoter
provinces, frcmi whence the comjdaints of the people are less
likely to reach him, can exercise their tyranny with much
moro safety. But the European colonies in America are
more remote than the most distant provinces of the greatest
empires which had ever been known before. The govern-
ment of the English colonies is perhaps the only one which,
since the world began, could give perfect security to the in-
habitants of so very distant a province. The aduiinistration
of the French colonies, however, has always been conducted
with more gentleness and moderation than that of the Span-
ish and Portuguese. This superiority of conduct is suitable

1 '«

ECONOMIC IIISTOliY.

both to tlio cliariU'tcr of tin; Fi'cnch nation, nnd to what
lornis th(! rliiiriicfcr oi every natinn, tho naliiro ol' their gov-
eriinieiit, wliicli, tlioiijih arbitrary and vioh'iit in eoniparison
with that of (Jreat Uritain, is h'<:;iil and free in comparison
witli those of Spain and I'ortngal.

It is in Ww proj^ress of tlie North American eohtnies, how-
ever, that the superiority of tho Enjilisli policy ehieOy
aj)j)ears. The [)ro^ress of the sugar cohniies of France has
been at kjast ecjiial, perliaps sujterior, to that of the greater
part of those of EngUind ; and yet tlie sugar ctdonies of Eng-
land enjoy a free govennncnt nearly of tlin same kind witli
that whidi takes place in lier colonies of North Auierica.
But the sugar colonies of France are not discouraged, like
those of England, from refining their own sugar; and, what
is of still greatei' importance, the genius of their government
naturally introduces a better manag(>ment of their negro
slaves.

In all Euro])ean cohmies the culture of the sugar-cane is
carried on by ncgi-o slaves. The constitution of those who
have been born in the tem])erate climate of Europe could not,
it is su])posed, support the labor of digging the ground under
the burning sun of the West Indies; and the culture of the
sugar-cane, as it is managt^d at present, is all hand labor,
though, in the opinion of many, the drill i)lough might be
intrcjduced into it with great advantage. IJut, as the profit
and success of the cultivation which is carried on by means
of cattle depend very much upon the good management of
those cattle, so the profit and success of that which is car-
ried on I)y shives nuist depend equally upon the good man-
agement of those slaves; and in the good management of
tlu'ir slaves the French planters, I think it is generally
allowed, arc superior to the English. The law, so far as it
gives some weak protection to the slave against the violence
of his master, is likely to be better executed in a colony
where the government is in a great measure arbitrary than
in one where it is altogether free. In every country where
the unfortmnite law of slavery is established, the m.agistratc,
when he protects the slave, Intermeddles in some measure in

COLONIAL POLICY OF EUROPE.

auc 18
n> who
id not,

unilor

of the

Uibor,

i-lit be
)r()fit

ineiiuH
ut of
s car-
man-
cut of

ucrally
r as it
olcnoc
colony
•y than
where
istratc,

isuro in

the mana,'};omont of the private property of the maater; and
in a free country, wliere the master is pcM'haps either a mem-
ber of tlie colony assembly or an eleetor of such a member,
he ilarc not do this but with the greatest caution and circjun-
spection. The respect which he is obliged to pay to the
master renders it more dillicult fcjr him to protect the slave.
Jjut in a country where the government is in a great measure
arliitrary, wlierc it is usual for the magistrate to intermeddle
even in the management of the private j)roperty of individ-
uals, and to send them, perhaps, a ktti'e de cachet if tbey do
not manage it acc<jrding to his liking, it is mueh easier for
him to give some protection to the slave; and common hu-
manity naturally disposes him to do so. The protection of
the magistrate renders the slave less contemptible in the
eyes of his master, who is thereby induced to ccmsider him
with more regard, and to treat him with more gentleness,
(jcntle usage renders the slave not only more faithful, but
more intelligent, and therefore, u\nm a double account, more
useful. lie approaches more to the conditi(jn of a free ser-
vant, and may possess some degree of integrity ami attach-
ment to his master's interest, — virtues which fre(picutly
belong to free sei'vants, but which never can belong to a
slave who is treatinl as slaves commonly are in countries
where the master is perfectly free and secure.

That the condition of a slave is better under an arl)itrary
than under a free government is, I believe, supported by the
history of all ages and nations. In the Roman history, the
first time we read of the magistrate inter[)osing to protect
the slave from the violence of his mastei- is under the em-
perors. When Vedius Pollio, in the ])resence of Augustus,
ordered one of his "slaves, who had eommittiMl a slight fault,
t > be cut into pieces, and thrown into his fish-pond in order
to feed his fishes, the emperor commanded him, Avith indig-
nation, to emancipate immediately, not only that slave, but
all the others that belonged to him. Und(!r the republic no
magistrate could have had authority enough to protect the
slave, much less to punish the master.

The stock, it is to be observed, which has improved the

ECONOMIC IIISTO/IY.

»n<rnv ('i)l(tuios of Friuicc, particularly the groat colony of St.
Doiniii^o, has Itccii raised nlmortt entirely from tlu; >j;ra<liial
iiu|)roveineiit and eiiltivation of those; colonies. It has iicen
alnidsl altoLictlier the produce of the soil and of the indnslry
of the eulonists, or, wiiat conies to the same thinji', the prico
of (hat produce, gradually acciuniilated liy ^ood niana;i'enient,
and employed in raisinj? a still greater produce. Ihit tho
stock which has improved and cultivated the sugar culonics
of Knuland has, a great part of it, heen sent out from Eng-
land, and has l)\ no means l)cen altijgether the produce of
tlie soil and industry of the colonists. The prospei'ity of the
Knglish sugar colonies has Ix'cn, in a great measure, owing
to (he great riches of England, of which a part has over-
flowed, if one may say so, upon those colonies. JJut the
pi'osperity of the sugar colonies of France has l)een entirely
owing to (he good conduct of the colonists, which nnist there-
fore have had some superiority over that of the English; and
this superiority has lieen remarked in nothing so much as in
the good management of their slaves.

Such have been the general outlines of the policy of the
dilTerent European nations with regai'd to their colonies.

The ijollcy of Europe, therefore, has very little to boast of,
either in the original establishment, or, so far as concerns
their internal government, in the subsecpient prosperity of
the colonics of America.

Folly and injustice seem to have been the principles which
presided over and directed the first jiroject of establishing
those colonies; the folly of hunting after gold and silver
mines, and the injustice of coveting the possession of a coun-
try whos(! harmless natives, far from having ever injured the
jieople of Europe, had received tin; (irst adventurers with
every mark of kindness and hospitality.

The adventurers, indeed, who formed some of the later
establishments, joined to the chimerical project of finding
gold and silver mines other motives more reasonal)le and
more laudable; but even these motives do very little honor
to (he policy of Europe.

The English Puritans, restrained at home, fled for free-

COLONIAL POLICY OF EUROPE.

riiiin t(t Aincricu, iiiid fstuhlishcd tlioro the four govcriinicuts
of New Kiiuliind. The Kurdish Cutliolios, troatetl with much
urcntcr iujusficc, t'Htahlishcd lluit of Maryhiud; thi; Quiikcrs,
that of IV'UUsylvauhi. Tho I'ortiitrur.so Ji'WH, ixTst'ciilcd by
the Iminisitioii, sli'Ippod of their fortuucs, and liaiiishcd to
IJrazil, iiitrodiK'cd, by their cxauiidc, Home .sort of oidcr
iiud in(hislry aujou'i the tranaportcd ftdous and Htruui|K'ts,
liy wlioiu that colony was oriu;iually peopled, aud tauizlit
them th(^ culture of the sui^ar-caue. L'pou all these diifer-
eut occasions, it was, not the wisdom and policy, liut the
disordei' and injustice, of the Hiiropeau governments, which
pcopleil and cultivated America.

Ill elfecttuitim; some of tlie most important of tliese estah-
lishmeuts, the diil'erent governments of Kurope had as little
niei'it as in projecting!: them. The conipiest of Mexico was
the jiroji'ct, not of the council of Spain, l)ut of a ji'ovenior of
Cuba ; aud it was otfoctuated hy the spirit of the bold adven-
turer to whom it was entrusted, in sjuto of cvorythin,L>; which
that u'overnor, who soon re])ented of havin;^ trusted such a
person, could do to thwart it. Tlu; compiei-ors of Chili aud
Peru, and of almost all the other Spanisli settlements upon
tlio eimlincnt of America, carried out with them no other
pul)lie eui'iinrairement, but a general permission to make
settlements and compu-sts in the name of the king of Spain.
Those adventures were all at the private risk and expense
of the adventurers. The government of Spain contril»uted
scarce anything to any of tluMu. That of England eontriit-
uted as little towards effectuating the establishment of some
of its most important colonies in Xorth America.

When thoS(! establishments were eii'ectuated, and had be-
come so considerable as to attract the attention of the mother
counti'v, the lii'st regulations wliich she made with i-egard to
them hail always in view to secure to hei'sclf the monopoly of
their commerce, — to confine their market, and to enlai'ge \\ov
own at their expense, anil, conseipu>ntly, rather to damp aud
discourage, than to (juicken and forward, the course of their
prosperity. In the different ways in Avhich this monojioly
has been exercised, consists one of the most essential difl'er-

,'yi

.«;■!

ECONOMIC HISTORY.

cnccs in the policy of the different European nations with
regard to their colonies. The hest of them all, that of Eng-
land, is only somewhat less illiberal and oppressive than
that of any of the rest.

In what way, therefore, has the policy of Europe contrib-
uted either to the first establishment or to the present
grandeur of the colonies of America? In one way, and in
one way only, it has contributed a good deal. Mcvjna virum
Mater! It bred and formed the men who were capable of
achieving such great actions, and of laying the foundation of
so great an empire; and there is no other quarter of the
world of which the policy is capable of forming, or has ever
actually and in fact formed, such men. The colonies owe to
the policy of Europe the education and great views of their
active and enterprising founders; and some of the greatest
and most important of them, so far as concerns their internal
government, owe to it scarce anything else.

THE GREAT INVENTIONS.

II.

THE GREAT INVENTIONS.

From Walpole's Histouy of England,^ Vol. I. pp. 50-76.

THE manufacturing industries of the country had never
previously experienced so marvellous a devel()i)uient.
The hum of the workshop was heard in [)laccs which had pre-
viously only been disturbed by the whirr of the grouse; and
new forces, undreamed of a century before, were employed to
assist the progress of production. The trade of the United
Kingdom accpiired an importance which it had never pre-
viously enjoyed, and the manufacturing classes ol)tained an
influence which they had never before known. The land-
owners were slowly losing the monopoly of power which they
had enjoyed for centuries. Ti-aders and manufacturers werf
dailv obtaining fresh wealth and influence. A new England
was supplanting the old country; and agriculture, the sole
business of our forefathers, was gradually Ijecoming of less
importance than trade. In 1703, the first year of the war,
the odicial value of all the imports into Britain was less than
£20,000,000. In ISlo, the year of Waterloo, it exceeded
£31,000,000. In 1702 the oriicial value of Hritish and Irish
exports was only £18,000,000 ; it rose in 181;") to £41,000,000.
The ollicial values, however, give only a very imperf(M^t idea of
the extent of our export trade. They are based on ])rices fixed
so far back as lOOG, and afford, therefore, an inaccurate test
of the extent of our trade. No attem|)t was made to ascertain
the declared or real value of the exports till tlu^ year 1708,
when it slightly exceeded £33,000,000. Tlic d.'cliin'd value
of the exports of British and Irisli produce in ISlo exceeded
£40,000,000. Tlie rise in the value of the exports and im-
ports was attril)utal)le to many causes. The predominance

1 London : Longmans, Green, & Co., 1878.

' i

ECONOMIC HISTORY.

of the British at sea had driven every enemy from the ocean,
and had cnaljled British merchants to i)ly their trade in
coni])arative safety. Tlie numerous possessions wliirh the
Britisli liad accpiired in every quarter of the globe had pro-
vided llicm with customers in all i)arts of the Avui'Id; and
the most civilized, as well as the most savage, of nations
were purchasing the produce of the looms of Manchester and
i)i the factories of Birmingham. Even the taxation which the
war had necessitated had stimulated the manufacturers to
fresh exertions. The merchants were continually discover-
ing fresh outlets for British trade; the manufacturers were
constantly encouraged to increase their produce.^

Wool was the most ancient and most important of English
manufactures. Custom seemed to ])oint to the permanent
superiority of the woollen trade. Tlic Chancellor of Eng-
land sat on a sack of wool ; and when men sp(jkc of the
staple trade, they always referred to the trade in wool. For
centuries Britisli sovereigns and British statesmen had, after
their own fashion, and according to their own ideas, actively
promoted this particular industry. Edward III. liiid induced
Flemish weavers to settle in this country. The Restoration
Parliament prohibited the exportation of British wool, and
had ordered that the very dead should he interred in woollen
shrouds. The maiuifacturers spread over the entire king-
dom. Wherever there was a running stream to turn their
mill, there was at any rate the possibility of a woollen fac-
tory. Xorwieli, with its contiguous village of ^Volstl'(|, was
the chief seat of the trade. But York and Bradford. Worces-
tershire and (Iloucestershire, Manchester and Kendal, were
larg(dy depeiideiit on it.

The steps wliieh Farliament took to promote this particu-
lar imlustry were not always very wise; in one point they
were not veiy just. Ireland, in many resix'cls, could have
comjieted u\\ advantageous terms with the woollen manufac-
tui'ers of England. English jealousy i)rohibiteil in eonse-

1 .Mcriillocirs " {\)mniprt'ial Dicrtionary," imports ami I'xpnrts ; cf ., liowovcr,
Portt'r's " I'rosiress i)f tlio Nation," p. 357, wliero tlie figuri's arc sliglilly differ-
ent. Nothing IS more ditfluult tlian to ascertain the correct figures.

THE GREAT INVENTIONS.

qiience the importation of Irish manufactured woollen goods.
The result hardly answered the sanguine anticipations of the
selfish senators who had secured it. The Irish, instead of
sending their fleeces to be worked up in Great Britain,
smuggled them, in return for contraband spirits, to France.
England failed to obtain any large addition to her raw mate-
rial; and Ireland was driven into closer comrauiiication with
the hereditary foe of England. The loss of the Irish fleeces
was the more serious from another cause. The home supply
of wool had originally been abundant and good; but its pro-
duction, at the commencement of the century, was not in-
creasing as rapidly as the demand for it; the quality of
home-grown wool was rapidly deteriorating. The same
sheep do not produce both wool and mutton in the greatest
perfection. Every improvement in their meat is efi'ectcd at
the cost of their fleece. English mutton was better than it
had ever been; but English manufacturers were com^jelled to
mix foreign with native wool. Had trade been free this
result would have been of little moment. The English could
have easily oljtained an ample supply of raw material from
the hills of .S|)ain and other countries. But, at the very
time at which foreign wool became indispensable, the necessi-
ties of the country, or the ignorance of her financiers, led to
the imposition of aheavy import duty on wool. Addington,
in 1802, levied a duty upon it of bs. 3(i. the cwt. ; Yansittart,
in 1813, raised the tax to Gs. %d. The folly of the protec-
tionists hud done much to ruin the wool trade. But the evil
already done was small in comparison with that in store.

Notwithstanding, however, the restricticms on the wool
trade, the woollen industry was of great importance. In
1800, Law, as counsel to the manufacturers, declared, in an
address to the house of lortls, that 600,000 packs of wool,
worth £6,600,000 were produced annually in England and
Wales, and that 1,500,000 persons were em|)loyed in the
manufacture. But these figures, as McCulloch has shown,
are undoubtedly great exaggerations.^ Rather more than

1 McCulloch, ad verb. Wool ; Porter's " Progress of the Nation," pp. 170-

175.

ECONOMIC HISTORY.

400,000 packs of wool were available for manufacturing pur-
poses at the commencement of the century ; more than nine
tcntlie of these were produced at home; and some 350,000
or 400,000 persons were probably employed in the trade.
The great woollen industry still deserved the name of our
staple trade; but it did not merit the exaggerated descrip-
tions which persons who should have known better applied
to it.

If the staple trade of the country had originally been in
woollen goods at the commencement of the present century,
cotton was rapidly gaining upon wool. Cotton had been
used in the extreme East and in the extreme West from the
earliest periods of which we have any records. The Span-
iards, on their discovery of America, found the Alexicans
clothed in cotton. "There are trees," Herodotus had writ-
ten, nearly two thousand years before, "which grow wild
there [in India], the fruit whereof is a wool exceeding in
beauty and goodness that of sheep. The natives make their
clothes of this tree wool. " ^ But though the use of cotton
had been known from the earliest ages, both in India and
America, no cotton goods were imported into Europe; and
in the ancient world both rich and poor were clothed in silk,
linen, and wool. The industrious Moors introduced cotton
iijto Spain. Many centuries afterwards cotton was imported
into Italy, Saxony, and the Low Countries. Isolated from
the rest of Europe, with little wealth, little industrj-, and no
roads; rent Ijy civil commotions, — the English were the last
people in Eiu'ope to introduce the manufacture of cotton
goods into their own homes.

Towards the close of the sixteenth century, indeed, cotton
goods were occasionally mentioned in the statute book, and
the manufacture of the cottons of Manchester was regulated
by acts passed in the reigns of Henry VIII. , Edward VI.,
and Elizabeth. But there seem to be good reasons for con-
cluding that Manchester cottons, in the time of the Tudors,
were woollen goods, and did not consist of cotton at all.

1 Rawlinson's " Herodotus," vol. ii. p. 411. The German name for cotton is
BaumwoUe — tree wool.

THE GREAT INVENTIONS.

rpur-
i nine
iO,00©
trade.
3f our
!scrip-
pplicd

ccn in
■ntury,
1 been
om the
Span-
,'xicans
d -svrit-
w Avild
ding in
ce their
: cotton
dia and

pe;

and

in silk,

cotton

nportcd

d from

and no

the last

cotton

cotton
l)()k, and
,'gulatcd
id VI.,
Il'or con-
IXudors,
at all.

cotton is

More than a century elapsed before any considerable trade in
cotton attracted the attention of the legislature. The woollen
miinufacturers comj^lainod that people were dressing their
cliildren in printed cottons; and Parliament was actually
persuaded to prohibit the introduction of Indian printed
calicoes. Even an act of Parliament, however, was unable
to extinguish the growing taste for Indian cottons. The
ladies, according to the complaint of an old writer, expected
"to do what they please, to say what they i)lease, and wear
what they please. " The taste for cotton led to the introduc-
tion of calico-printing in London; Parliament, in order to
encourage the new trade, was induced to sanction the imj)or-
tation of filain cotton cloths from India under a duty. The
demand which was thus created for calicoes probably pro-
moted their manufacture at home; and Manchester, Bolton,
Frome, and other i)laces, gradually acquired fresh vitality
from the creation of a new industry.

Many years, however, passed before the trade attained
anything but the slenderest proporticms. In the year 1G97
only 1,976,359 pounds of cotton wool were imported into the
United Kingdom. In the year 1751 only 2,976,610 j)ounds
were imported. The official value of cotton goods exported
amounted in the former year to only .£5,915; iu the latter
year to only £4.5,986. At the present time Britain annually
purchases about 1,500,000,000 pounds of cotton wool. She
annually disposes of cotton goods worth £60,000,000. The
import trade is five hundred times as large as it was in
1751; the value of the exports has been increased 1,300 fold.
The world has never seen, in any similar period, so prodi-
gious a growth of manufacturing industry. But the trade
has not merely grown from an infant into a giant; its con-
ditions have been concurrently revoluti(mized. Up to the
middle of the last century cotton goods were really never
made at all. The so-called cotton manufactures were a
coml)inati(m of wool, or linen, and cotton. Xo Englislnnan
had been ahlo to produce a cotton thread strong enough for
the warp; and even the cotton manufacturers themselves
appear to have despaired of doing so. They induced Parlia-

l w

ECONOMIC HISTORY.

mcnt in 1736 to repeal the prohibition which still encum-
bered the statute book, ajrainst wcarinj? printed calicoes ;
but the repeal was granted on the curif))i8 condition "that
the warp thereof be entirely linen yarn." Parliament no
doubt intended by this condition to check the importation of
Indian goods without interfering with the home manufac-
turers. The superior skill of the Indian manufacturers
cnal)led them to use cotton for a warp; while clumsy work-
manship made the use of cotton as a warp unattainable at
home.

In the middle of the eighteenth century, then, a piece of
cotton cloth, in the true sense of the term, had never been
made in England. The so-called cotton goods were all made
in the cottages of the weavers. The yarn was carded by
hand; it was sinin by hfind, it was worked into cloth by a
hand-loom. The weavi. i was ■-'uaily the head of the family;
his wife and unmarried ('ir i. ' s spun the yarn for him.
Spinning was the ordinary occupation of every girl, and the
distaff was, for countless 'enturies, the ordinary occupation
of every woman. The oceupau m \\i\-a ho nni'ersal that the
distaff was occasionally used as a .^ynuiiun for woman.
"Le royaume de France nc tombe point en qiienouille."

" See my royal master murdered,
Ilis crown usurped, a dUuiff in the throne."

To this day every unmarried girl is commonly described as
a " spinster. "

The operation of weaving was, however, much more rapid
than that of spinning. The Aveaver consumed more weft
than his own family could supply him with; and the weavers
generally experienced the greatest difViculty in obtaining
sulheient yarn. About the middle of the eighteenth century
the ingenuity of two persons, a father and a son, made this
difference more apparent. The shuttle had originally been
thrown by the hand from one end of the loom to the other.
John Kay, a native of Bury, by his invention of the fly-
shuttle, saved the weaver from this labor. The lathe in
which the shuttle runs was lengthened at both ends; two

THE GREAT INVENTIONS.

•ibed as

strings were attached to its opposite ends ; the strings were
lield by a peg in the weaver's hands, and by plucking the
peg the weaver was enabled to give the necessary impulse
to the shuttle. Robert Ka}', John Kay's son, added the
drop-box, by means of which the weaver was able "to use
any one of the three shuttles, each containing a different
colored weft, without the trouble of taking them from and
rejjlacing them in the lathe." By means of these inventions
the productive power of each weaver was doubled. Each
weaver was easily able to perform the amount of work which
had previously required two men to do; and the spinsters
found themselves more hopelessly distanced than ever in
their efforts to sui)ply the weavers with weft.

The preparation of weft was entirely accomplished by
manual labor, and the process was very complicated. Card-
ing and roving were both slowly performed with the aid of
the clumsy implements which had originally been invented
for the purpose. "Carding is the process to which the
cotton is subjected after it has been opened and cleaned,
in order that the fibres of the wool may be disentangled,
straightened, and laid parallel with each other, so as to ad-
mit of being spun. This was formerly effected by instru-
ments called hand-cards, which were brushes made of short
pieces of wire instead of bristles, the wires being stuck into
a sheet of leather at a certain angle, and the leather fast-
ened on a flat piece of wood about twelve inches long and
five wide, with a handle. The cotton being spread upon one
of the cards, it was repeatedly combed with another till all
the fibres were laid straight, when it was stripped off the
card in a fleecy roll ready for the rover. In 'roving' the
spinner took the short fleecy rolls in which the cotton was
stri|)ped off the hand-cards, applied them successively to the
spindle, and while with one hand she turned the wheel and
thus made the spindle revolve, with the other she drew out
the cardings, which, receiving a slight twist from the spin-
dle, were made into thick threads called rovings, and wound
upon the spindle so as to form cops." In spinning, "the
roving was spun into yarn; the operation was similar, but

:§

ECONOMIC HISTORY.

ill >■

i m\m

1 1

the thread was drawn out luuch finer and received much
more twist. It will be seen that this instrument only ad-
mitted of one thread being spun at a time by one pair of
iiands, and the slowness of the operation and consequent
expensiveness of the yarn formed a great obstacle to the
I'stablishment of a new manufacture."

The trade was in this humble and primitive state when a
series of extraordinary and unparalleled inventions revolu-
tionized the conditions on which cotton had been hitherto
prepared. A little more than a century ago John Ilar-
greaves, a poor weaver in the neighborhood of Blackburn,
was returning home from a long walk in which he had been
purchasing a further supply of yarn for his loom. As he
(mtered his cottage, his wife Jenny accidentally upset the
spindle which she was using, llargreaves noticed that the
spindles, which were now thrown into an upright position,
continued to revolve, and that the thread was still spinning
in his wife's hand. The idea immediately occurred to him
that it would be possible to connect a considerable number
of upright si)indles with one wheel, and thus multiply the
productive power of each si)inster. "He contrived a frame,
in one part of which he placed eight rovings in a row, and
in another ])art a row of eight spindles. The rovings, when
extended to the spindles passed between two horizontal bars
of wood, foi'ming a clasp which opened and shut somewhat
like a parallel ruler. When pressed together this clasj) held
the threads fast; a certain ))ortion of roving being extended
from the spindles to the wooden clasp, the clasp was closed,
and was then drawn along the horizontal frame to a consid-
erable distance from the si)indles, by which the threads were
lengthened out and reduced to the proper tenuity ; this was
done with the spinner's left hand, and his right hand at the
same time turned a wheel which caused the spindles to re-
volve rai)idly, and thus the roving was spun into yarn. By
returning the clasp to its first situation and letting down a
piercer wire, the yarn was wound upon the spindle. "

llargreaves succeeded in keeping his admirable invention
secret for a time ; but the powers of his machine soon he-

It i

THE GREAT INVENTIONS.

came known. His Ignorant neighbors hastily conchided
that ti machine which enabled one spinster to do the work
of eight would throw multitudes of persons out of emjjloy-
mcnt. A mob broke into his house and destroyed his ma-
chine. Ilargreaves himself had to retire to Nottingham,
where, with the friendly assistance of another person, he was
able to take out a patent for the spinning-jenny, as the
machine, in compliment to his industrious wife, was called.

The invention of the spinning-jenny gave a new impulse to
the cotton manufacture. But the invention of the spinning-
jenny, if it had been accompanied by no other improvements,
would not have allowed any purely cotton goods to be manu-
factured in England. The yarn spim by the jenny, like that
which had previously been spun by hand, was neither line
enough nor hard enough to be employed as Avarp, and linen
or woollen threads had consequently to be used for this pur-
pose. In the very year, however, in which Ilargreaves
moved from Blackburn to Nottingham, Richard Arkwright
took out a patent for his still more celebrated machine. It
is alleged that John Wyatt, of Birmingham, thirty years
before the date of Arkwright's patent, had elaborated a
machine for spinning by rollers. But in a woi-k of this
description it is impossible to analyze the conflicting claims
of rival inventors to the credit of discovering ])articu-
lar machinery; and the historian can do no more than
record the struggles of those whoso names are associated
with the improvements which he is noticing. Richard
Arkwright, like John Ilargreaves, had a humble origin.
Ilargreaves began life as a poor weaver; Arkwright, as a
barber's assistant. Ilargreaves had a fitting partner in his
industrious wife Jenny. Mrs. Arkwright is said to have
destroyed the models which her husband had made. But
Arkwright was not deterred from his pursuit by the poverty
of his circumstances or the ccmduct of his wife. "After
many years' intense and painful a])plication," he invented
his memorable machine for spinning by rollers; and laid the
foundations of the gigantic industry which has done more
than any other trade to concentrate in this country the wealth

'^l

ECONOMIC HISTORY.

of the world. The principle of Arkwright's groat invention
is very simple. He [assod the thread over two pairs of rol-
lers, one of which was made to revolve much more rapidly
than the other. The thread, after passing over the pair
revolving slowly, was drawn into the requisite tenuity by the
rollers revolving at a higher rapidity. By this sini])le ])ut
memorable invention Arkwright succeeded in i)roducing
thread capable of emjtloymcnt as warp. From the circum-
stance that the mill at which his machinery was first erected
was driven by water power, the machine received the some-
what inappropriate name of the water-frame; the thread
spun by it was usually called the water-twist.

The invention of the fly-shuttle by John Kay had enabled
the weavers to consume more cotton than the spinsters had
been able to provide; the invention of the s])inning- jenny
and the water-frame would have l^een useless if the old sys-
tem of hand-carding had not been superseded by a naore
efficient and more rapid process. Just as Arkwright a])i»licd
rotatory motion to spinning, so Lewis Paul introduced
revolving cylinders for carding cotton. Paul's machine
consisted of "a horizontal cylinder, covered in its whole
circumference with parallel rows of cards with intervening
spaces, and turned by a handle. Under the cylinder was a
concave frame, lined internally with cards exactly fitting
the lower half of the cylinder, so that when the handle was
turned, the cards of the cylinder and of the concave frame
worked against each other and carded the wool." "The
cardings were of course only of the length of the cylinder,
but an ingenious apparatus was attached for making thorn
into a perpetual carding. Each length was placed on a flat
broad ril)bon which was extended between two short cylin-
ders and which wound upon one cylinder as it unwound from
the other."!

This extraordinary series of inventions placed an almost
unlimited supply of yarn at the disposal of the weaver. But
the machinery which had thus been introduced was still

* Baincs' " History of the Cotton Manufacture," p. 173, from which work
the preceding quotations are also taken.

THE GREAT INVENTIONS.

incapable of providing yarn fit for tlic finer qualities of cot-
ton cloth. "The water-frame spun twist for warps, but it
could not bo advantageously used for the liner ciualities, as
thread of great tenuity has not strength to bear the pull of
the rollers when winding itself on the bobbin." This defect,
however, was removed by the ingenuity of Samuel Crompton, a
young weaver residing near IJolton. Crompton succeeded in
combining in one machine the various excellences of "Ark-
wright's water-frame and Ilargreavcs' jenny." Like the for-
mer, his machine, whicli from its nature is happily called the
mule, " has a system of rollers to reduce the roving; and, like
the latter, it has spindles without bobbins to give the twist,
and the thread is stretched and spun at the same time by the
spindles after the rollers have ceased to give out the rove.
The distinguishing feature of the mule is that the spindles,
instead of being stationary, as in both the other machines,
are placed on a movable carriage, which is wheeled out to
the distance of fifty-four or fifty-six inches from the roller
beam, in order to stretch and twist the thread, and wheeled
in again to wind it on the spindles. In the jenny, the clasp
whieh held the rovings was drawn back by the hand from the
spindles; in the mule, on the contrary, the spindles recede
from the clasp, or from the roller beam, which acts as a
clasp. The rollers of the mule draw out the roving much
less than those of the water-frame, and they act like the
clasp of the jenny by stopi)ing and holding fast the rove,
after a certain quantity has been given out, while the spin-
dles continue to recede for a short distance farther, so that
the draught of the thread is in part made by the receding of
the spindles. By this arrangement, comprising the advan-
tages both of the roller and the s))indlos, the thread is
stretched more gently and equably, and a much finer quality
of yarn can therefore be produced. " ^

The effects of Crompton's great invention may be stated
epigrammatically. Before Crompton's time it was thought
impossible to spin eighty hanks to the pound. The mule

1 Baines's "History of the Cotton Manufacture," pp. 197, 198.

'iram-ri-raaagciEgijag

It ■!.

ECONOMIC HISTORY.

has spun (lirco hundiTd and lilty hanks to the pound ! Tho
uutivoH of India coiihl spin u pdund of coMcjn into a thread
one hundred and nineteen miles long. The English suc-
ceeded in spinnin;^ the same thread to a length of one hun-
dred and sixty miles.' Yarn of the finest <|tuility was at
()n('(! at tlie disposal of tin; weaver, and an o]»port unity was
alTorded for the production of an indelinite (puintily of cotton
yarn. JUit the great inventions which have been thus enu-
merated would not of themselves have heen sidlicient to
establish the cotton manufacture on i(s present basis. The
ingemiity of Hargreaves, Arkwiight, and Crompton had
been exercised U> provide the weaver with yarn. 'J'heir in-
ventions had provided him with more yarn than he could by
any jiossibility use. The sitinster had beaten the weaver,
just as the weaver had previously Itealcn the si»inster, and
the manufacture of cotton s(!emed likely to staiul still be-
cause the yarn could not be woven more rapidly than an
expert workman with Kay's improved tly-shuttle could
weave it.

Such a result was actually contcmpiated by some of the
leading manufacturers, and such a result might possibly have
temporarily occurred if it had not been averted by the inge-
nuity of a Kentish clergyman. Eduuuid Cartwright, a clergy-
man residing in Kent, ha})pened to be staying at Matlock in
tho summer of 1784, and to be thrown into the company of
some Manchester gentlemen. The conversation turned on
Arkwright's macliinery, and "one of the com]iauy observed
that as soon as Arkwright's patent cxi)ired so many mills
would be erected and so much cotton spun that hands would
never be found to weave it." Cartwright replied that " Ark-
wright must then set his wits to work to invent a Aveaving
mill." The !^^anchester gentlemen, however, unanimously
agreed that the thing was impracticable. Cartwright " con-
troverted the im[)racticability by remarking that there had
been exhibited an automaton figure which ])layed at chess;"
it could not be "more diflicult to construct a machine that

' Baincs's "History of the Cotton Manuf.icturc, p. 200, and "Colchester,"
vol. ii. p. 76.

THE GREAT INVENTWSS.

shall weave than one which shall make all the variety of
inov(\s which are ro(|uiiv(l in that t^oniplicated jjaino. "
Within three years he had hinisell" proved that th(> invention
was praetieablo by prodtiein;jf the j)owerlooni. Siiljsecpicnt
inventois improved the idea whieh Cartwri;:;lit had orij-i-
natt'd, and witliin 'ifty years from the date of his nu'nioral)Ie
visit to Matloeli (here were not less than 100,000 power-
lo ' at work in (Ireat IJritain alune.*

inventions whieh have been thus enumerated arc the
most remarkable of the improvements whieh stinnilated the
d(!veli)pm('nt of the cotton industry. Hut other inventions,
less jj,enerally r(!memi)cred, were hardly less wonderful or
less beneficial than these. Uj) to the middle of last century
cotton could only be bleached by the cloth bein;? steeped in
alkaline lyes for several days, washed clean, and spread on
the ti'rass for some weeks to dry. The jjrocess had to l)e re-
peated several times, and many months were consumed i)eforc
the tedious operation was concluded. Scheele, the Swedish
philosopher, discovered in 177-1 the bleaching i>ropcrtie8 of
chlorine, or oxymuriatic acid. BerthoUet, the French
clunriist, conceived in 1785 the idea of applying the acid to
bh ing cloth. Watt, the inventor of the steam-engine,
a Miry of Manchester, respectively introduced the new

aeiu .nto the bleaeh-lields of Macgregnr of (rlasgow and
Ridgway of Bolton. The process of bleaching was at once
reduced fnmi months to days, or even hours. ^

In the same year in which Watt and llenry were introdu-
cing the new acid to the bleacher, Bell, a Scotchman, was
laying the foundations of a trade in printed calicoes. "The
old method of i)rintiiig was by blocks of sycamore, about ten
inches long by five broad, on the surface of which the pat-
tern was cut in relief in the common method of wood en-
graving." As the block had to be apjdied to the cloth by
hand, "no more of it could be printed at once than the block
could cover, and a single piece of calico, twenty-eight yards
in length, required the application of the block four hundred

1 Raines's " Cotton," pp. 220, 235.
'- Ibid., i)p. 247-249.

■'id

11!

ECONOMIC HISTORY.

and forty-eight times. " ^ This clumsy process was superseded
by cylinder printing. "A polished copper cylinder, several
feet in length and three or four inches in diameter, is en-
graved with a pattern round its whole circumference and from
end to end. It is then placed horizontally in a press, and, as it
revolves, the lower part of the circumference passes through
the coloring matter, which is again removed from the whole
surface of the cylinder, except the engraved pattern, by an
elastic steel blade placed in contact with the cylinder, and
reduced to so fine and straight an edge as to take off the
color without scratching the copper. The color being thus
left only in the engraved pattern, the piece of calico or
muslin is drawn tightly over the cylinder, which revolves
in the same direction, and prints the cloth." The sav-
ing of labor " effected by the machine" is " immense ; one
of the cylinder machines, attended by a man and a bc^y,
is actually ca))able of producing as much work as could
be turned out by one hundred block printers, and as many
tear boys. " '■^

Such are the leading inventions which made Great Britain
in less than a century the wealthiest country in the world.
"When we undertook the cotton manufacture we had com-
paratively few facilities for its prosecution, and had to
struggle with the greatest difficulties. The raw material
was produced at an immense distance from our shores, and
in Hindustan and in China the inhabitants had arrived at
such perfection in the arts of spinning and weaving that the
lightness and delicacy of their finest cloths emulated the
web of the gossamer, and seemed to set competition at defi-
ance. Such, however, has been the influence of the stupen-
dous discoveries and inventions of Hargreaves, Arkwright,
Croni])ton, Cartwright, and others, that we have overcome
all these difficulties, — that neither the extreme cheapness of
labor in Hindustan, nor the excellence to which the natives
had attained, has enabled them to withstand the com]i(»tition
of those who buy their cotton, and who, after carrying it

» Bnines's " Cotton," pp. 204, 205.
2 Ibid., pp, '205, 206.

THE GREAT INVENTIONS.

five thousand miles to be manufactured, carry back the goods
to them. " 1

If Great Britain entirely monopolized the woollen and the
cotton trades, she had done her best, in her own way, to
promote the manufacture of linen in Ireland. In 1698 Par-
liament, while rigorously prohibiting the exportation of
Irish woollen goods, sedulously attempted to encourage the
linen manufacture in Ireland. Bounties were paid on all
linen goods imported into this country from the sister
island; and the great linen trade ac(iuired, especially in
Ulster, the importance which it still retains. In 1800
31,978,039 yards of linen were exported from Ireland to
Great Britain, and 2,585,829 yards to other countries. In
1815 the export trade had risen to 37,986,359 and 5,496,206
yards respectively. A formidable rival to Ulster was, how-
ever, slowly rising in another part of the kingdom. At the
close of the great French war Dundee was still an insignifi-
cauu manufacturing town, but the foundations were already
laid of the surprising supremacy which she has since ac-
quired in the linen trade. Some three thousand tons of flax
were imported into the Scotch {)ort in 1814. But the time
was rapidly coming when the shipments of linen from this
single place were to exceed those from all Ireland, and Dun-
dee was to be sjioken of by professed economists as the Man-
chester of the linen trade. ^

The silk manufacturers of Britain have never yet succeeded
in acquiring the predominance which the woollen, cotton,
and linen factors have virtually obtained. The worm by
which the raw material is produced has never been accli-
matized on a large scale in England ; and the trade has natu-
rally flourished chiefly in those countries where the worm
could live and spin, or where the raw materiiil could be the
most easily procured. Insular prejiulice, moreover, should
not induce the historian to forget another reason which has
materially interfered with the development of this particular
trade. The ingenuity of the writish was superior to that of

1 McCullocli's " Commorcifil Diet.," ad verb. Cotton.

* McCuUoch, ad verb. Linen; Porter's "Progress of the Nation," p. 280.

'11^

ECONOMIC HISTORY.

every other nation ; but the taste of the British was inferior
to tliat of most people. An article which was only worn by
the rich, and which was only used for its beauty and deli-
cacy, was naturally produced most successfully by the most
artistic pcoitlc. English woollen goods found their way to
every continental nation ; but the wealthy English imported
their finest lustrings and a les modes from Italy and France.
The silk trade would, in fact, have hardly found a home in
England at all had it not been for the folly of a neighboring
potentate. Louis XIV., in a disastrous hour for France,
revoked the Edict of Nantes ; and the French Huguenots, to
their eternal honor, preferring their consciences to their
country, sought a home among a more liberal people. The
silk weavers of France settled in Spitalfields, and the British
silk trade gained rapidly on its foreign rivals. Parliament
adopted the usual clumsy contrivances to promote an indus-
try whose importance it was no longer possible to ignore.
Prohibitory duties, designed to discourage the importation
of foreign silk, were imposed by the legislature ; monopolies
were granted to successful throwsters, and every precaution
was taken which the follies of protection could suggest, to
perpetuate the supremacy which Great Britain was gradually
acquiring in the silk trade. The usual results followed this
short-sighted policy. Prohibitory duties encouraged smug-
gling. Foreign silk found its Avay into England, and the
revenue was defrauded accordingly. The English trade
began to decline, and Parliament again interfered to pro-
mote its prosjjerity. In that unhappy period of English
history which succeeds the fall of Chatham and the rise of
Pitt, Parliament adopted fresh expedients to i)nimoto the
pro8{)erity of the silk trade. Prohibitory duties were • o-
placed with actual prohibition, and elal)orate attempts wcrc
made to regulate the wages of the S|)itaUields weavers. The
natural cousequeucps ensued. Smuggling, which had been
created l)y prohibitive duties, flourished with fresh vitality
imder the iufhu-nce of actual prohil)iti(m. The capitalists
transferred their mills from Spitalfields, where the labors
of their workmen were fixed by law, to Macclesfield and

THE GREAT INVENTIONS.

other places, where master and workmen were free to make
their own terms.

The silk trade was hardly being developed with the same
rapidity as the three other textile industries. But silk,
like wool, cotton, and linen, was affording a considerable
amount of employment to a constantly growing population.
The textile industries of this country could not indeed have
acquired the importance which they have since obtained, if
the inventions of Hargreaves, Arkwright, Crompton, and
Cartwright had not been supplemented by the labors of ex-
plorers in another field. Machinery makes possible what
man by manual labor alone would find it impossible to per-
form. But machinery would be a useless incumbrance were
it not for the presence of some motive power. From the
earliest ages men have cudea.'ored to supplement the brute
force of animals with the more powerful forces which nature
has placed at their disposal. The ox was not to be perpetu-
ally used to tread out the corn; women were not always to
pass their days laboriously grinding at a mill. The move-
ment of the atmosphere, tlio f "w of running water, were to
be taken into alliance with man; and the invention of wind-
mills and water-mills was to mark an advance in the onward
march of civilization. But air and water, mighty forces as
they are, proved but fickle and uncertain auxiliaries. When
the wind was too low its strength was insulliciont to turn the
cumbrous sails of the mill; when it was too high it deranged
the cf)mplicated machinery of the miller. The miller Mdio
trusted to water was hardly more fortunate than the man
who relied u})on air. A summer drought reduced the power
of his wheel at the very time when long days and fine
weather made him anxious to accomplish the utmost possi-
ble amount of work. A flood swept away the dam on whicji
his mill depended for its supply of water. An admiral)lc
auxiliary during certain portions of each year, water was
occasionally too strong, occasionally too weak, for the pur-
poses of the miller.

The manufacturing industry of the country stood, there-
fore, in need of a new motive power; and invention, which

r s

"*''*

>i'»

iil '4

II i

'■ I,

lif

'I!

ECONOMIC HISTORY.

is supposed by some thinkers to depend like other commod-
ities on tlie laws of demand and supply, was busily elaborat-
ing a new problem, — the use of a novel power, which was to
revolutionize the world. The elasticity of hot water had
long been noticed, and for a century and a half before the
period of this history a few advanced thinkers had been
speculating on the possibility of utilizing the expansive
powers of steam. The Marquis of Worcester had described,
in his "Century of Inventions," "an admirable and most
forcible way to drive up water by means of fire." Steam
was actually used early in the eighteenth century as a mo-
tive power for pum]nng water from mines ; and Newcomen,
a blacksmith in Dartmouth, invented a tolerably efTicient
steam-engine. It was not, however, till 17G9 that James
Watt, a native of Greenock, and a mathematical instrument-
maker in Glasgow, obtained his first patent for "methods of
lessening the consumption of steam, and consequently of
fuel, in fire-engines." James Watt was born in 1730. His
father was a magistrate, and had the good sense to encour-
age the good turn for mechanics which his son displayed at
a very early age. At the age of nineteen Watt was placed
with a mathematical instrument-maker in Londtm. But
feeble health, which had interfered with his studies as a
boy, prevented him from pursuing his avocations in England.
Watt rt'turncd to his native country. The Glasgow body of
Arts and Trades, however, refused to allow him to exercise
his calling within the limits of their jurisdiction; and had it
not l)('on for the University of Glasgow, which befriended
him in his difficulty, and appointed him their mathematical
instrument-maker, the career of one of the greatest g(>niuses
whom (^.reat Britain has produced would have been stinted
at its outset.

There happened to be in the University a model of New-
comen's engine. It happened, too, that the model was
defectively constructed. Watt, in the ordinary course of
his business, was asked to remedy its defects, and he soon
succeeded in doing so. But his examination of the model
convinced him of serious faults in the original. Newcomen

THE GREAT INVENTIONS.

had injected cold water into the cylinder in order to con-
dense the ateam and thus obtain a necessary vacuum for the
piston to work in. Watt discovered that three fourths of
the fuel which the engine consumed was required to reheat
the cylinder. " It occurred to him that if the condensation
could be performed in a separate vessel, communicating with
the cylinder, the latter could be kept hot wliile the former
was cooled, and the vapor arising from the injected water
could also be prevented from impairing the vacuum. The
comminiication could easily be effected by a tube, and the
water could be pumped out. This is the first and the grand
invention by which lie at once saved three fourths of the fuel,
and increased the power one fourth, thus making every pound
of coal produce five times the force formerly olitaincd from
it."* But Watt was not satisfied with this single improve-
ment. He introduced steam above as well as below the
piston, and thus again increased the power of the machine,
lie discovered the princii)lc of parallel motion, and thus
made the piston move in a true straight line. He regulated
the supply of water to the boiler by the means of "lloats,"
the supply of steam to the cylinder by the application
of "the governor," and, by the addition of all these discov-
eries, "satisfied himself that he had almost created a new
engine, of incalculable power, universal application, and in-
estimable value. "2 It is unnecessary to relate in these
pages the gradual introduction of the new machine to the
manufacturing public. Watt was first connected with Dr.
Roebuck, an iron-master of Glasgow. But his name is per-
manently associated with that of Mr. Boultun, the proprietor
of the Soho Works near Birmingham, whose partner he be-
came in 1774. Watt and Boulton rajjidly supplemented the
original invention with further improveiueuts. Other in-
ventors succeeded in the same field, and by the beginning of
the present century steam was established as a new force;
ad.anced thinkers Averc considering the possibility of apply-
ing it to purposes of locomotion.

1 Lord Brougham's " Men of Letters and Science," p. 367.

2 Ibid., p. 371.

n h

11'

ECONOMIC HISTORY.

The steam-engine indeed would not have been invented in
the eighteenth century, or would not at any rate have been
discovered in this country, if it had not been for the vast
mineral wealth with which Great Britain has fortunately
been provided. Iron, the most useful of all metals, presents
greater difficulties than any other of them to the manufac-
turer, and iron was probably one of the very last minerals
which was applied to the service of man. Centuries elapsed
before the rich mines of our own country were even slightly
worked. The Romans indeed established iron works in
Gloucestershire, just as they obtained tin from Cornwall or
lead from Wales. But the British did not imitate the ex-
ample of their earliest conquerors, and the little iron which
was used in this country was imported from abroad. Some
progress was, no doubt, made in the southern counties, — the
smelters naturally seeking their ores in those places where
wood, then the only available fuel, was to be found in abun-
dance. Tlie railings which but lately encircled our metro-
politan cathedral were cast in Sussex. But the prosperity
of the trade involved its own ruin. Iron could not be made
without large quantities of fuel. The wood gradually dis-
appeared before the operations of the smelter, and the coun-
try gentlemen hesitated to sell their trees for fuel when the
increase of shipping was creating a growing demand for
timber. Nor were the country gentlemen animated in this
respect by purely selfish motives. Parliament itself shared
their apprehensions and endorsed their views. It regarded
the constant destruction of timber with such disfavor that it
seriously contemplated the suppression of the iron trade as
the only practical remedy, "^fany think," said a contem-
porary writer, " that there should be no works anywhere,
they so devour the woods. "^ Fortunately, so crucial a rem-
edy was not necessary. At the commencement of the seven-
teenth century, Dud Dudley, a natural son of Lord Dudley,
had proved the feasibility of smelting iron with coal; but
the prejudice and i norance of the work-people had pre-
vented the adoption of his invention. In the middle of the

1 Smiles's "Industrial Biograpliy," p. 43.

THE GREAT INVENTIONS.

eighteenth century attention was again drawn to his pro-
cess, and the {)()ssibility of substituting coal for wood was
conclusively established at the Darby's works at Coalbrook
Dale. The impetus which was thus given to the iron trade
was extraordinary. The total produce of the country
amounted at the time to only eighteen thousand tons of iron
a year, four filths of the inm used being imported from
Sweden. In 1802 Great Britain possessed one hundred and
sixty-eight blast-furnaces, and produced 170,000 tons of
iron annually. In 1806 the produce had risen to 250,000
tons; it had increased in 1820 to 400,000 tons. Fifty years
afterwards, or in 1870, 6,000,000 tons of iron were produced
from British ores.*

The progress of the iron trade indicated, of course, a cor-
responding development of the supply of coal. Coal had
been used in England for domestic purposes from very early
periods. Sea coal had been brought to London ; but the
citizens had complained that the smoke was injuiious to
their health, and had persuaded the legislature to forl)id the
use of coal on sanitary grounds. The convenience of the
new fuel triumphed, however, over the arguments of the sani-
tarians and the prohibitions of the legislature, and coal
continued to be brought in constantly though slowly increas-
ing (piantities to London. Its use for smelting iron led to
new contrivances for ensuring its economical i)r()dnction.
Before the commencement of the present century there were
two great dilliculties which interfered with the operations of
the miner. The roof of the mine had necessarily to be
propi)ed, and, as no one had thought of using wood, and coal
itself was cnijdoyed for the purpose, only sixty per cent of
the produce of each mine Avas raised above ground. About
the l)oginning of the nineteenth century timber struts wen>
gradually sul)stitut('d for the jiillars of coal, and it l)ecam('
consequently possible to raise from the mine all the coal
won by the miner. A still more important discovery was

» "Diet. Hist." vol. iv. p. 080; MfiCiilIoch, "Diet, of rommcrcp," nd vorh.
Iron; Porter's "Progress of the Nation," p. 620; Statistical Abstract of tiie
United Kingdom.

'111

' \\

■"^mmfrnfmrmfm

i §

S 3

ECONOMIC HISTORY.

made at the exact period at which this history commences.
The coal-miner in his imderground calling was constantly
exposed to the dangers of fire-damp, and was liable to be
destroyed without a moment's notice by the most fearful
catastrophe. In the year in which the great French war
was concluded, Sir Humphrey Davy succeeded in perfecting
his safety-lamp, an invention which enabled the most dan-
gerous mines to be worked with comparative safety, and
thus augmented to an extraordinary extent the availal)le
8ui)])lics of coal.'

llumi)hrey Davy was the son of a wood-carver of Pen-
zance, and early in life was apprenticed to a local apothe-
cary. Chance — of which other men would i)erhai)s have
failed to avail themselves — gave the lad an opportunity of
cultivating his taste for chemistry. A French surgeon,
wrecked on the coast, to whom Davy had shown some kind-
ness, gave him a case of surgical instruments, and "the
means of making some api)roximation to an exhausting
engine." Watt's son, Gregory Watt, was ordered to winter
in Cornwall for Ms health, and happened to take apartments
in the house of Davy's mother. "Another accident throw
him in the way of Mr. Davies Giddy, a cultivator of natural
as well as mathematical science." Giddy "gave to Davy
the use of an excellent library;" he "introduced him to Dr.
Beddoes," who made his young friend the head of "a jnieu-
matic institution for the medical use of gases," whicli he
was then forming. The publication, soon afterwards, of a
fanciful paper on light and heat gave Davy a ctmsiderable
reputatiou. He was successively chosen assistant lecturer
in cheiuistry, and sole chemical professor of the Royal In-
stitution. While he held this ollice his inquiries induced
him to investigate the causes of the fearful explosions which
continually took place in coal mines. He socm satisfied
himself that carburetted hydrogen is the cause of fire-damp;
and Ihat it will not ex])lode unless mixed with atmos]ilieric
air "in proportions i)etween six and fourteen times its
bulk;" and "he was surprised to observe in the course of

1 Porter's " Progress of the Nation," p. 277 ; McCuUoch, ad verb. Coal.

)

■ twP

'"'i.

THE GREAT INVENTIONS.

his experiments, made for ascertaining how the inflamma-
tion takes place, that the flames will not pass through tubes
of a certain length and smallncss of bore. He then found
that, if the length be diminished and the bore also reduced,
the flames will not pass; and he further found that by niul-
ti[)lying the number of the tubes this length may be safely
diminished, provided the bore be proportionally lessened.
Hence it appeared that gauze of wire, whose meshes were
only one twenty-second of an inch in diameter, stopped the
flame and prevented the explosion."^ These successive
discoveries, the results of repeated experiments and careful
thought, led to the invention of the safety-lamp. The first
safety-lamp was made in the year 1815. There is some sat-
isfaction in reflecting that the very year which was memo-
rable for the conclusion of the longest and most destructive
of modern wars, was also remarkable for one of the most
beneficial discoveries which have ever been given to man-
kind. Even the peace of Paris did not probably save more
life or avert more suffering than Sir Humphrey Davy's in-
vention. The gratitude of a nation properly bestowed titles
and pensions, lands and houses, stars and honors, on the
conqueror of Napoleon. Custom and precedent only allowed
inferior rewards to the inventor of the safety-lamp. Yet
Hargreaves and Ai-kwright, Crompton and Cartwright, Watt
and Davy, did more for the cause of mankind than even
"Wellington. Their lives had more influence on their coun-
try's future than the career of the great general. His
victories secured his country peace for rather more than a
generation. Their inventions gave Great Britain a commer-
cial supremacy which neither war nor foreign competition
has yet destroyed.

A series of extraordinary inventions, at the commenoe-
ment of the present century, had supjilied Great Britain
with a new manufacturing vigor. Hargreaves, Arkwright,
Crompton, and Cartwright had developed, to a remarkable
degree, the producing power of man ; Watt had given a new

1 See Brougham's " Men of Letters and Science," p. 462. The life of Davy
is admirably told by Lord Brougham.

♦r,i

I . !.!

■MM

ECONOMIC IJISTOIIY.

significance to tholi* inventions by superseding the feeble
and unequal forces which had hitherto been used, with the
most tractable and powerful of agents. And Davy, by his
beneficent contrivance, had enabled coal to be won with
less diinger, and had relieved the miner's life from one
of its most hideous perils. The ingenuity of these great
men had been exercised with different objects; but the in-
ventions of each of them had given fresh importance to the
discoveries of the others. The spinning-jenny, the water-
frame, and the mule would have been deprived of half their
value if they had not been supplemented with the })Ower-
loom ; the power-loom would, in many i)laces, have been
useless without the steam-engine ; the steam-engine would
have been idle, had it not been for coal ; the coal would
not have been won without danger, had it not been for Sir
II. Davy. Coal, then, was the commodity whose extended
use was gradually revolutionizing the world; and the popu-
lation of the world, as the first conso(pience of the change,
gradually moved towards the coal fields. The change was
just commencing at the beginning of the present century;
it was proceeding with rapid strides at the period at which
this history opens; its ultimate effects will be seen later
on in this work. The time was to come when the coal meas-
ures of England were to draw away the i)opulation of Ire-
land, to Aveaken the power of the southern agricultural
counties, to give i)redominance to the north of England,
and by these results to involve a political revolution.

CAUHES OF TtlE FRENCH HE VOLUTION.

III.

ECONOMIC CAUSES OF THE FRENCH
REVOLUTION.

From Von Sydel'8 Fuencu Revolution,' Vol. I. i>p. 21-53.

IN ordor to bring this matter, in its details, more clearly
before us, \vc may pass in review the three great classes
into which the French people were divided according to their
occupation.^ By far the most important of these occupa-
tions at that j)eriod was agriculture. Nearly 21,000,000
out of 25,000,000 of inhabitants were employed in tilling the
soil. Of the 51,000,000 hectares of which the whole king-
dom is composed, 35,000,000 were destined for cultivation,
that is, rather less than at the present day, but more than
twice as much as is now under cultivation in England. It
has often been imagined that the property of these great
masses of land was almost entirely in the hands of the
church, the monasteries, the nobility, and the financiers;
and that before 1789 only large estates existed, while the
class of small proprietors was created by the Revolution.
Some consider this sui)posed change as the highest glory,
and others as the greatest calamity of modern times; but
all are agreed as to the fact, and the more so, because it was
continually proclaimed in the debates of the revolutionary
assemblies. But on closer examination we shall find that
the effects of the feudal system upon agriculture are not to

' London: J. Murray, 1807.

'^ III drawing up tlie following statement we have chiefly consulted the
" Statistique nilnistcrielle de la France," and the admirable works of Moreau
de Yonne ; and also Lavergne, " Economic rurale." The latter gives much
information respecting the earlier state of things, which now and then, however,
requires examination and correction.

t'-\

■ ■r. I**

•\'n

li I

ECONOMIC iiisTonr.

bo looked for in this direction. We cannot rank tlic author-
ity of the revolutionary orators very hij^h, both because they
had a political interest in breaking uj) the large estates for
the advantage; of the city proletaries, and beeaust; they
always showed tlu'nis(dves fal)uloiisly ignoiant of statistics.
If we examine the state of things before 178lt we shall llnd
that — apart from the feudal tenure's and the church property
— even the old French law of inheritance by no means
favored the accmnuliition of estates. The nobility, indeed,
were often heard to complain tliat the roturierx were con-
stantly getting p(Jrtsession of land; which is intedligible
enough, since the moneyed classes were continually gaining
ground on the ancient aristocracy. It follows that there was
nothing in the circumstances of the age to render the division
of land impossilde; and one of the most credible witnesses,
after three years' investigation in all the French |)rovin('es,
tells us, as the result of his observations, that about a third
of the land was held by small i)roprictors, who were sulli-
ciently prosi)erous in Flanders, Alsace, Beam, and the north
of IJretagne ; but in other parts, especially in Lorraine and
Cliamj)agne, jjoor and miserable. The division of property,
he observes, is carried to too great an extent : " 1 have fre-
quently seen properties of ten roods with a single fruit-tree;
excessive division ought to be forbidden by law." The wit-
ness is Arthur Young, one of the first agriculturists of the
period in Europe, who gave this testimony after indefati-
gable impury; and his report is confirmed by native author-
ities. "The subdivision of land," says Turgot, "is carried
to such an extent that a property only just sunicient for
one family is divided among five or six children." "The
landed estates," writes an Intendant, "are broken uj) syste-
matically to a very alarming degree; the fields are divided
and subdivided ad injirtitum." ^ Such was the case among
the small proprietors; the other two thirds of the soil was
entirely in the possession of the great land-owners, — consist-
ing partly of the nobility and clergy, and partly of magis-
trates and financiers. We shall {trcscntly inquire in what
' Quoted by Tocquevilk-, " L'Ancicn Regime," p. 60.

CAUaiiS OF THE FRENCH REVOLUTION.

manner they turned their lands to profit; but \vc may lirst
of all ol»8L'rvo that a mid(U(! class of proprietors, substantial
enoii}j:h to derive; from their land a auilicient liveliliood, and
yet huniljle enouj^h to l)o bound to constant and diligent labor,
was entindy wanliiif,'. In the present day the landed pro-
prietors of Franco may be divided into thnio sections, each
of which possesses about one third of the productive soil of
tlu^ eounfry. Eiu;htcen million hectares beloii<^ to 1^^8,000
great landeil owners; fourteen millions to 700,000 proprie-
tors of the middle class, and fourteen millions to not ipiite
four millions of jieasant owners.' When wo compare these
figures with those of the pre-revolutionary period we (ind the
number of poor ])ossessors exactly corrcjspoiuling to oiu; an-
other; and, what is very remarkable, they are almost exactly
the same in 1831 as in 1815. The most fearful storms pass
over the surface of the land without producing any change in
tliese relations. IJut what the movement of 1789 — the eman-
cipation of the soil, and civil eipiality — <lid produce is this
middle class of proprietors, which now possesses one third of
the land. It must be confessed that this is a most remark-
able result. II(jw often has it been announced by feudalists
and socinlists that entire freedom of trade would inevitably
lead to the auniliilation of the middle classes, and leave
nothing but millionnaires and proletaries! We here see
the very contrary proved by one of the grandest historical
facts. Th(> feudal system, by its restrictions, crushed the
agrii!ultur;il middle class; the rule of freedom created it
afresh. Let us, however, consider the position of these lords
of the soil and their dependents more closely.

The first fact which meets us in this investigation is an
unhappy one. It was only an excessively small minority of
the great land-owners who concerned themselves about their
estates and tenants. All who were at all able to do so

hufT-inil

Coc

4itiquc,

•' ly to the enjoyments of the court or the capital,
/etunied to their properties to fill the purse which
i'mptied by their excesses. There they lived in

, " Revue de Deux Mondes," September, 1848; Rossi, "ficonomie
p. 025, ct scq.

' '1

1 ?L

ECONOMIC HISTORY.

miserly and shabby rotinnncnt; sometimes in wretchedly
i'lirnished casth'S, shuinu'd by the peasants as pitiless credi-
tors; sometimes in the midst of forests and wastes, that they
might have the pleasures of the chase close at hand. They
took as little interest in intellectual sulijects as ia agricul-
tiiial alTairs. and cherished little or no intercouisi; with
their neijihbors, — partly from parsimony, and partly from the
entire want of local roa.ls. When the period of fasting was
over, they rushed eagerly Inick to the alluring bauijuets of
Paris and Versailles. The number of exceptions to this
melancholy rule was so suiall as to exercise no inlluence on
the general conditimi of the country.

While these gentlemen were s(piandcring the |)rodu^o of
their estates in aristocratic splendor, their fields were let out
in parcels of ten or, at most, fifteen hectares, to the so-called
iiit-titijerffy who did not pay a fixed rent, but generally half
the gross produce, and receivc.'d from the owner, in return,
their first see(l-eorn, their cattle, and agricultural imple-
ments.^ This system yielded a wretched existence for the
tenants themselves, and reduced *h- estates to a miserable
conditiou, but it lirought the owners a large thongh uncu'rtain
income. The latter, who only saw their estates as travellers,
were accustomed to farm out the collection of their dues,
generally to a notary or an advocate, who treated the tenants
with merciless severity.

The peasants, in their turn, neglected the cultivation of
corn — of whieli they had to give np a luoiety — for any
chance occupation the whole i)rofit of wliicii f(dl to them-
selves; they used their oxen rather for purposes of trans-
port than for ploughing, fattened their geese in their own
wheat fields, aud, aliove all, introduced the system of alter-
nating crop and fallow, in order to get a greater extent of
pasture, and couseiiuontly a larger nund)er (tf cattle. This
was a personal gain to themscdves, but evidently brought no
advantage to the estate. A system of tillage, in short, pro-
vailed without industry, without science, and, al)ovc all,

1 Qucsnay in Dairc, " Pliysiocrates," p. 219, ct scq.; Young's "T">vel8,"
2d cd. vol. i. p. ooij; LuUia do Cliatcauviuux, vol. i. p. 270.

CAUSES OF THE FRENCH REVOLUTION.

without capital. It 1ms Itooii calculated that the average
amount of cajjital employed at that period in the French
m^tciiries was from forty to sixty francs to the hectare ;
while in England, at the same time, the avcrnge amounted to
two hundred and forty francs. ^ The result was, of course, a
wretched one; they only reckoned ui)on a crop of from seven
to eight hectolitres of wheat to the hectare, — the incn.'ase
being from fivo to six fold; while the English farmer of that
time obtained a twelve-fold increase. It was impossilde for
the peivaant under such circumstances to gain a livelihood;
the produce of ton hectares was scarcely sullicient to support
his family, and sale and profit were out of the (piestion.
The man who is thus ccmdenmed to pass hirf life in starva-
tion siion learns to fold his haiids^in idleness. A c<m-
stantly increasing extent of country lay unculfivate<l, which
Quesnay, in IToO, estimated at a (piarter of the arable land
of France, and Arthur Young, in 1790, at moi'e than
0,000,000 hectares. ^lillions of rural dwellings had no
aperture in them but the door, or at most one window;'* the
people had no clothing but a home-made, coarse, and yet not
thici<, woollen cloth; in many ))rovinces every one went
barefoot, aiul in others only wooden shoes were known. The
food of the people was gruel with a little lard; in the even-
ing a i)iecc of bread, and on great occasions a little bacon;
but liesides this no meat for months together, and in many
districts no wine at all.'^ The mental contlition of the peo-
pl(! was in accordance with their external circumstances.
Books and newspapers were as little known in the villages as
reading and writing. The peasants depended for instruction
on their pastors and parish clerks, ])roletaries like tlu'mselves,
who very seldom got beyond the horizon of the church steeple.
TIk' Church was, after all, the only institution that threw nn
intellectual spark into their wretc'hed life; Init unfortunately
their religious impulses were strongly mixed with l)arbarism

' Arthur Young, vol. i. p. 435. The elder Mirabcuu reckons for the whole
of Fraiici", 0(1 francs to the arpcnt.
- This is still tlie case.
' Kcports of the I'refocts to the Ministry, 1803.

ECONOMIC HISTORY.

and superstition. In many large districts of the south the
peasants had no other idea of a Protestant than as of a dan-
gerous magician who ought to be knocked on the head. Their
own faith, moreover, was interwoven with a multitude of the
strangest images of old Celtic heathenism. Of the world
outside thi'y heard nothing, for there was next to no traflic
or travelling in the country. There were some royal roads,
nuignilicently nuide, and sixty feet in breadth, — splendid
monuments of monarchical ostentation. On these, however,
up to 177G, only two small coaches ran,^ throughout the
whole of France ; and the traveller might pass whole days
without getting sight of any other vehicle.^ Only few vil-
lages, in the most favored provinces, possessed cross-roads
to these great highways, or to the nearest nuirket town.
And thus the whole existence of these people was passed in
toil and privation; without any pleasures excei)t the sigh'
of the gaudy decorations of a few church festivals; without
any change, save when hunger drove an individual, here and
there, to seek day-labor in the towns, or into military ser-
vice. It was seldom that such a one ever returned to his
father's house, so that his fellow-villagers gained no advan-
tage from his wider experience.

Under these circumstances the relation between peasant
and lord was naturally a dej)lorable one. What we have
already said sufficiently characterizes a community in which
all the enjoyments fell to the rich, and all the burdens were
heaped upon the poor. In aristocratic England at this
period, a rpiarter of the gross proceeds was considered a
high rent for a farm, and the owner, moreover, paid large
tithes and poor-rates.^ In France, half the proceeds was the
usual rent ; ami the owners were exempted by their privileges
from many public burdens, which fell with double weight
ni)on the wretched mC'tayer». Thus, the produce of the
French land, as compared with the English, was nine to
fourteen, while the rents of an English land-owner were at

' E. Diiirp, "Introduction aux ffiuvrcs de Turgot."

« Young's "Travels."

8 Yveriiois, " Tableau des Pertes," etc.

CAUSES OF THE FRENCH REVOLUTION.

the rate of two and three fourths per cent, and those of the
French land-owner three and three fourths per cent.'

The deliciency in the product of the hind, therefore,
affected the gains of the little farmer doul)ly, In addition
to this he was burdened l)V a numher of feudal services, by
forced lal)or on the lands of his lord, by tithes to the Church,
and by the oljligation to make roads for the State. The
landlord, who tried to sell his rent in kind as dearly as pos-
sible, wished for high prices of corn; the peasant, who, after
paying his dues, did not raise oiough for his own family,
longed, like the city jjroletary, for low prices. In short,
these two classes, so intimately connected with one another,^
had nothing at all in counnon; in education, in interests
and enjoyments, they were as widely separated as the in-
habitants of different quarters of the globe, and regarded
each other respectively with contempt and hatred. When
the peasant looked upon the towers of his lord's castle the
dearest wish of his heart was to burn it down, with all its
registers of debt. Here and there a bettor state of things
cxisttMl; but we can only bring forward two exceptions to
the mi'hincholy rule, extending over large tracts of country.
In Anjou the system of mdtairie prevailed, as in Lower
Brctagne and Guienne; and yet in the former province the
peasants were jjrosperous, and the noblemen beloved. Lower
Poitoii wiis the only province from which the nobles had not
alloweil themselves to bo enticed into the whirlpool of court
life. The nol)leman dwelt in his own cnstle, the renl lord
of his d'luinins, the cultivator of his lields, the guardian of
his pea-Miuts. lie advanced them money to purchase the
necessary stock, and instructed them in the managiMnent of
their cattle ;2 the expulsion of a tenant was a thing unheard
of; the laborer was born on the estate, and the landlord was
the godfather of all his farmers' children. Ife wa;^ often
seen going to market with his jieasants, to sell their oxen
for them as advantageously as possililo. His mental iKU'i/.on,
however, did not extend beyond these honorable cares; he

1 Young.

* Sauvegrain, "Considerations sur la Population, " etc. Paris, 1800.

,f.l

' ril

ECONOMIC HISTORY.

honored God and the King, labored in his own fields, w.as a
good sportsman and toper, and knew as little of the world
and its civilization as his tenants.

In the north of the kingdom a more modern state of things
had grown up. There, wealthy farmers were to be seen,
who held their land on lease at a fixed money rental, —
which was settled according to the amount of the taxes to
which they were liable, — and who brought l)oth skill and
cai)ital to the management of their land. This was the
regular practice in Flanders, Artois, Picardy, Normandy,
the Isle of France, and other smaller districts. In these
parts the landlords had a certain revenue, and their land
yielded twici- as unu-h as that which was in the hands of the
mt'ldi/crs. Tilt; whole country wore the appearance of a gar-
den, and the poorer neighljors fomul lucrative emjilovment
at the stately farndiouses. These were the sam(! ])rovince8
in which Artluir Young met with small proprietors in a tol-
erable condition. If a jteasant in this part of the country
possessed a small stri^) of laud near his cottage, large enough
to grow some vegetables, food for a goat, or a few vines, he
earned sutlicient to supply the rest of his wants, in day
wages, from the farmers, or, as a weaver, from the neighbor-
ing manufacturers.

His was a condition similar to the normal one of the peas-
ant proprietors in France at the present day; who are not
reduced farmeis. Iiut laborers who have in\csted their sav-
iuirs in laud.' It was more dillicult for these iieojile to make
a livelihood ;it Ihat time than now, because there were fewer
nuiuufacturers and wealthy agriculturists. Fxcept in the
altove-mentioned provinces, these l>etty proprietors were
C(piiilly wnlclied aud hopeless with the nu'tni/irx by whom
they were siiridunded; their only object was to leut a
virliiirlr in iidditiou to their own pitlaiu'e of laud. They
were in fact eulirely lost siurht of among the nn'tajicrH ; and
this is the reason that French writers, in their descriptions
of the so-called lU'titc culture (plot farming), never mak(> any
special mention of them, but always confound them .rith the

1 Rossi, 1. c.

CAUSES OF THE FRENCH REVOLUTION.

more numerous class by which they were surrouiuled. All
authorities arc agreed iu C8tinmtin<f the amount of land culti-
vated in small parcels at 27,000,000 hectares, while only
9,000,000 were hold at a money rent. The former, there-
fore, was nearly ecjually divided between the small owners
and the mStayer-i, who paid their rent in kind.

In France, at the present day, nearly 23,000,000 hectares
are cultivated by small proprietors and metayers; about
8,000,000 ' (the same as in 1780) ijy tenants iiayini; a money
rent; and rather more than nine and a half millions by
wealthy landlords.''^ Hence we can clearly see what the
French Revolution has done for French agriculture. Not
only did it create the middle class of land-owners, but
greatly promoted a more rational system of tillage. About
four millifm hectares have been rescued from the petite cld-
ture, and an e(puil number redeemed from utt(3r barrenness.
The breadth of land standing at a mcmey rent is exactly the
same as before the Revolution. The increase is entirely in
the properties of rich or sulistantial land-owners, who man-
age their own estates, — whicli indicates a change to more
zealous industry, coui)led with the employment of greater
capital. Tlie extent occupied by the mStaijerx is still very
great, and the condition of those who are subject to it but
little improved, notwithstanding the al)olition of socage and
seigniorial rights. It will be one of our most important
tasks to examine the several events and tendencies of
the Revolution in relation to their cfTects on the rural
population.

If we turn our attention to tl;e towns of ancii'iit France we
find that similar causes produeeii cfTects eorresi)onding to
those we have; just di'scrilxMl. The civic otlices, to which
persons li:id formerly Ix'i'U elected by the districts or the
guilds, had been fre(iuently HIKmI up by the crown in the
seventeenth century; and in (ho eighteenth, tlu^ great major-
ity of them were sold in hereditary possession to lill the cx-

' Qiicsnai, Turpnt, Young.

s Oti tliis point LiiUimic, Chatenuvicux, and Cochut are in tin- main agreed.
Lavcrgnt's figures are somewhat diftcrent, but the general result is the same.

ECONOMIC HISTORY.

fHf

cheqticr.' The government of the towns, therefore, was in
the hands of a close corporation consisting of a few families,
who, generally speaking, allowed themselves to lie infected
with the indolent and self-seeking sj)irit of the central gov-
ernment. Associated with these were the families of the
moneyed aristocracy, the memlu-r^ of the great financial
companies, the farmers of the indirect, and the collectors of
the direct, taxes, the shareholders of the trading monojiolies,
and the great i)ankeru. These circles, too, were either le-
gally or virtually closed to the general world. The hourise
was ruled by an aristocracy, to which only birth, or the per-
mission of government, could give access. Their activity
was of course nceessarily centred in Paris. Indeed, they
stamped their own character on tliis city to a degree which
would be impossiide in our age, notorious though it bo as
the epoch of the rule of paper. Every one knows to what
a dizzy and ruinous height 8tock-jobl)ing was carried by Law
in the beginning of the century; and from that time forward
its operations were never suspended, and all who luid wealth
or cre'lit engaged in it with reckless greediness. Kings,
nobles, ministers, clergy, and parliaments, one and all, took
part in these transactions; and the chronic delicit, autl in-
creasing debts, of the treasury alTorded constant opportuni-
ties of ".iV-olving the State, and making a profit out of its
embarrassments. We may confidently assert that, as com-
pared with the present diiA', the speculative swindling of that
age was as prevalent and as shameless as its immorality.
Paris was not at that time a manufacturing town, and its
wholesale trade was insignificant; with few except i(ms,
therefore, the industry of the city consisted in retail trade
and the negotiation of l)ills of exchange. It is not the least
characteristic featuie of the indolent and selfish licentious-
ness into which the higher classes of a great nation had
fallen, that of all securities, life annuities were most in
favor; by m(>ans of which the purchaser procured liigh inter-
est for himself, while ho robbed his children of the capital.

' Dcpping, " Corrcspondiince administrative de Louis XIV.," vol. ii., Intro-
duction.

t ;

[\\\

CAUSES OF THE FRENCH REVOLUTION.

The trade and commerce of the whole empire was fettered
hy the restrictions of guilds and corporations. The |)rinci-
ples on which they were conducted dated from Henry 111.,
who was the first to promulgate the pro|tosition that the king
alone can grant the right to labor, — a maxim which con-
tains the whole doctrine of the socialists from a monarchical
point of view. The masters of every handicraft managecl
its internal affairs, allowed no one to practise it who did
not belong to their guild, and ailmitted no one to their
privileges until he had passed an examination of his iiuali-
lication Ijefore themselves. Originally many trailes were
free from this organization, until these too were injuriously
affected by (he financial necessities of the State, — when the
exclusive rights of a guild were sold to the artisans, as their
olTices were to the; jmlges. The government soon further
proceeded to divide each trade into several guilds, and made
an exchisive cor])oration of the most insignificant occupa-
tion. Thus the workers in ebony were ilistinguisheil from
the carpenters, the sellers of old clothes from the tailors,
and the pastry-cooks from the bakers. The fruit-women and
flower-girls formed separate exclusive associations, re<rplated
by formal and liinding statutes. In the guilds of the seam-
stresses, eml)roiderers, and dress-makers, only men were
admitted to the privileges of masters. A number of these
statutes, by imposing excessive fees and duties, rendered it
douldy dillicult for an apprentice, liowever eapalile, to obtain
the rank of master. Other enactments only admitted the
sons of masti'rs, or the second husliands of the widows of
masters, to the privil(>ges of the guild. In short, the power
of the State was alnised in the most glaring manner for the
furtherance of exelusiv<> class interests. Those who did not
Indong to this aristocracy of trade, could only support them-
selves by the labor of their hands, in a state of eternal servi-
tu<le. Despair and famine drove the peasants from the
country into the towns, where they found no employment
open to them but that of day-laborers. The important intlu-
ence which this system exercised over the State was clearly
understood, both by the privileged and the excluded classes.

■n'P

■

ECONOMIC HISTORY.

I.'

(

When Tiirgot abolished the gtiikls in 1770, the parliament of
Paris, the princes, peers, and doctors, unanimously declared
that all Frenchmen were divided into close corporations, the
links of a mighty chain extending from the throne to the
meanest handicraft; and that this concatenation was indis-
pensable to the existence of the State and of social order. It
was not long before the guilds were re-established in accord-
ance with this declaration ; we shall see how the journeymen
and apprentices replied to this unctuoi.s manifesto some
fifteen years later.

The great manufacturing interests of the country were
confined by the same narrow restrictions. Since the time of
Colbert, who was the real creator of them, manufactures had
been the darling child of the government; and, as is usually
the case with darling children, had been petted and tyran-
nized over at the same time. When Coll)ert began his oper-
ations France produced neither the finer kinds of cloth nor
stockings, neither silks nor glass, neither tar nor soap.
The previously existing handicraft, which had been for a
century in the fetters of the guild, had d(me so little to de-
velop the native manufacturing talent of the country that the
minister was obliged to introduce Oerman, Swedish, and
Italian workmen. To secure a sale in foreign eounti-ies he
prescribed with great exactness the sort of fabric which he
wished to be produced; and to prevent competition from
without, he enacted a number of prohiltitory and firoteetive
duties. Here, again, the power of the State intruded itself
into the sphere of private business, to the advantage of the
manufacturer and the injury of the consumer. TIi(> same
system was continued by his successors with still worse
effects, because it was carried out with all the fickleness and
irregularity of Louis XV. 's government. It is true that
manufacturers made great progress, and increased their
annual products six-fold from the time of Colix'rt to that of
Necker. ' But tlie statutes liecamo more oppressive every
year; every new invention and imi)rovement was excluded
by them; and after 17<'>0 no legislation could keep pace with

' Tliis was the proportion in tlie woollen manufacture.

CAUSES OF THE FRENCH REVOLUTION.

the proj^ross of maoliincry. Manufacturers, therefore, as is
everywhere the case under such circumstances, no hmger
adapted themselves to the natural wants and capacities of
men, but immediately took an artificial and aristocratic
direction. Durinj]^ Colbert's ministry, while; only <50,-100
liands were employed in the manufacture of wool, no less
than 17,300 were enjjjaged in lace-makinnf ; and a hundred
years later, while the manufacture of soap only produced
18,000,000 of francs a year, that of luiir-powder was esti-
mated at not less than 24,000,000. The contrast between
the aristocratic luxury of the rich and the uncleaidy in-
di<j;ence of the populace can hardly be more glarinjrly
displayed. Asfrieulture experienced in every way the dis-
advantaues of a system which crippled communication with
foreiirn countries, raised the price of farminjr implements,
and injuriously affected the home trade. In their easrerness
to protect manufactures the government had learned to look
on the interests of agriculture as of secondary importance.
They accustomed themsidves, like the modern soeialists, to
apply the word proplc exclusively to th(> mnnufiu'turing
classes in the towns; and though they sacrificed the interests
of the latter in a thousand ways to the privileged monopolist,
yet |)liilanthropy and love of quiet co-operated in inducing
them to supply the necessities of the poorer artisans, at the
cost of the agricultural ])opulation. As supplements to the
protective and |)rohibitory duties in favor of manufactures,
decrees were issued fori)idding the exportati(m of corn and
other raw agricultural products. By these artifices the price
of the hectolitre of wheat, which on the average is at present
nineteen to twenty francs, was in 17(54 forced down to less
than eight francs.^ Choiseul then opened the tra<le, and the
jirice rose to more than fifteen francs. A similar result
followed the same measur<> in 177'), durinir the ministry of
Turgot; but a return to protecti<m reducctl the jirlc*' once
more to twelve and three fourths francs, until the Revolu-
tion. The city artisans had tolerably cheap bread, but
nowhere in the kingdom were the farmers prosperous. In

* Mulicr, in vol. x. of tlie " JK'nioircs (lu rAcadiSrnic royale de Mcdecinc."

■m

ECONOMIC niSTOliV.

h '

k'i

Spite of the most violent complaints from all tlio provinces,
the cause of the evil, and conseiiiiently the evil itself, re-
mained nnehiin^ed. The govornment adhered to the convic-
tion that it was their immediato duty to provide for the
maintenance of the population of the towns. It seemed to
them a mailer of course that the State should use its political
power for the advantage of its rulers and Iheir favorites.
No one considered the remoter consequences of such a prin-
ciple; no one asked the (juestion, " What if this power should
fall into democratic hands 't "

Let us endeavor to obtain a general view of the Aveallh of
France at this period. From the imperfection of ollicial
information the task is a dillicult one, and its results uncer-
tain. Even nn approximation to llu; ti-uth, however, will not
he without interest, since, in order not to hring forward un-
meaning figures, we shall constantly institute a comparison
with the now existing state of things.

The well-informed Tolosan, the imly authority on this sub-
ject, estimates the total produce of manufactures at nine hun-
dred and thirty-one million francs ; that of handicraft at
sixty millions. At the present day' the manufactures of
Eastern France alone, not reckoning handicraft, produce
2,282 millicms; the sum total therefore has been at least
quadruple*!. At the former ])eriod it amounted to thirty-
nine francs |)er head of the whole population; at ])rescnt wc
might unhesitatingly ])lace it at more than one hinu^red per
head. The emancipation of the internal trade since 1781) has
not raised the amount of |»roperty produced, but — what has
so often been called in question — has favorably inliueneed
the manner in which it is distribute*!. The daily wages of the
manufacturing laborers in 1788, according to a rather high
estimate, were for men twenty-six sous, and for women fif-
teen.''^ They are now, according to the most numerous and
trustworthy observation, forty-two sous for men, and twenty-
six for women. The daily wages of the agricultural laliorers,

1 In 18.J.S. In IftOOatnfnl of five milliards was reached. Boitoau, " ttat
de lii France en 1T8'J," pr. T.OO.
^ Boiteau thinks I'J tu 20 sous.

CAUSES OF THE FRENCH REVOLUTION.

too, can cortainly not be reckoned at more than fifteen
sous* for the year 1780, or less tliau twenty-live''^ in the
l)n'sent day. If wo further talve into account the very eon-
sidcrablc increase in the number of wcn-kinir days, arising
from tlie al»olition of tliirty holidays, we sluiil lind tlie annual
wauvs of the earlier period to be little more than half what
they now are, naiiudy, three hundred ami lifty-one francs for
the jnanufacluri.ifj;, and one hundred and lifty-seven for the
ajrricultural laborer, against six hundred and thirty, and three
hundred at tlo present day. To appreciate the siguilicance
of these resiJts we must compare tlu; prices of provisions nt
these two ) criods. It appears, then, that before \1H\) l)read
was consii'ered very cheap at three sous per pound, and it
was only in Paris that this rate was a commcm one; in the
jiroviuccM the price was generally higher. In our own times
the ave.age price for the whole of France from 1820 to 18-10
was SI venteen centimes, while at Paris, in l8.jl, it was four-
teen x-ents, — less, therefore, than the old rate of three sous.
This seems out of proi)ortion to the price of corn, since the
hedoUtre (»f wheat in 1780 cost from twelve to thirteen
francs, and in 1840 from nineteen to twenty. This ap|»arent
int'ongruiiy, however, is acenunted for by the improvement
in the method of grinding and baking, by which a third, or
even a lialf, more weight of bread is now obtained from the
same (pumtity of corn than in the former period."' We lind,
theref(»i'(>, that the laborer received for his wages little more
than half the quantity of bread which the modern workman
can obtain for what he earns. The same proportion holds
good in other kinds of food, and in regard to clothing the
comparisim is still inorc unfavorable to the untc-rcvolutionary
period.

We shall discover the determinate cause of these difl'er-
ences when we come to consider the main wealth of the
French empire, — the produce of the soil in the widest sense

I'M

■eV]

1 Lavcrgno says 30 sous (p o7).

* Bi'fore 178!) tlie seplicr (240 pounds) of wheat yielded only 180 pounds of
hrcad. — Moniliur, 12. July, 17U2, supploinent.

8 Young, " Assciuble'e Nationale," 15th Jan., 1700, 11th Aug., 1791.

'^m

ECONOAU C Ills TOU Y.

ol' the word. It would carry us too far if we wore to examine
every hrancli of the sultjeet, and discuss all the dilliculties
c.oinieeted with it; it will he sunicieiit to dwell on a few of
the principal points of interest. Of wheat, the p:reat stall'
of life, the soil of France produced hcfttrc the Revolution
uliout 40,000,000 hectolitres, or one hundred and sixty-seven
li/reH per head of the population; and in 1S4U, 70,000,000, or
two hundred and eight litres per head. At the former period
the numljer of cattle was calculated at iJ;3,000,OUO head, and
at the present day at 4'J, 000,000; and there is an «'(|ual in-
crease in the number of the other domestic animals. The
vineyards formerly yielded 27,000,000 hectolitren, and at
present 37,000,000, so that the |>n)portion per head is at any
rate not lower than it was.* And if we take into considera-
tion that a number of useful agricultural jtroducts were at
that time unknown, that a violent controversy was carried
on about the wholesomeneas of potatoes, that the forests
were allowed to run to waste far more than at the present
day,'* we shall not be astonished that the iDcst statist of
modern France estimates the vegetable product of the French
soil (which now exceeds in value the sum of 0,000 millions)
at not more than 2,000 millions at the period before the Revo-
luticm.''' The imp(}rtancc of this fact is sufliciently evident;
and we may gain an idea of the state of the population before
1789 by remembering that even now the total consumption
of food i:. France is not greater in proportion to the popula-
tion than in Prussia, and much less than in England.*

Respecting commerce, the third great branch of natiimal
wealth, I have but little to say. I am not aware that any
statistical data exist of the internal trallic of France before

' Morcau de Yonnfcs, from contemporary sources. I Imve followed liim
liecatisc space does not allow me to give my reasons for thinking a niueli more
unfavorable state of tilings in 1770 liintily probable.

- " Memoire remis aux Notables, 1781 ; " Young's " Travels," 2d ed. vol. li.
p. 100; Moreau, "Agriculture," ;306.

8 The calculation of Young agrees with this. Tolosan, Dedeley d'Agier,
Lavoisier, make amounts higher. (Boiteau, " fltat de la PVance en 1789,"
p. 481, compares their statements.) But the uncertainty of their calculations
is very perceptible.

* Communications from the Prussian Statistical Bureaus, 1861.

i':

CAUSES OF THE FRENCH REVOLUTION.

the Rt'V(jliili()n; it was, no doubt, smiillcr than at the pres-
ent (lay, in cunseiiuence of the ninltituile of inhuid duties.
And with regard to the foreign conunerec of the earlier
period, we have no means of dividing the sum totals whieh
lie Ix'fore us into the value of the raw nuiterials and the cost
of nianufactun', on the one luiiul, and the clear profits of
trade, on the (ither. It must sullice us to gain a genc^ral idea
of the relation between the two periods from the sununary
statement that in the custom-house registers immediately
i)efore the Revolution the annual imports are stated at
')7»),0()0,0(JO, and the exports at .540,000,000, while as early
as 1830 the former amounted to 905,000,000, and the latter
to UtJl, 000,000, and in 18o7 both Imports and exports had
risen to a value of more than 1,800,000,000. Taking all in
all, therefore, France under the old mimarchy was four times
as poor in manufactures, three tiuK.'s as poor in agriculture,
and more than three times as i)oor in conunerce, as it is in
the present day. We must bear this result well in mind
when wo try to form a judgment respecting the finances of
the ancien ret/hne. A budget of six hundred milliims
weighed as heavily upon the resources of the country at that
period as a budget of 1,800,000,000 would now, and conse-
quently a deficit of 100,000,000 was eipiivalent to one of
800,000,000 in our own times. Such a deficit actually
existed when Louis XVI. mounted tin; tlirone. It is there-
fore easy to conceive that his attention should ])e stnmgly
turned to the restoraticm of the l)alance between income and
expenditure, and that his vain endeavors in this direction
should shake the fal)ric of the State to its very foundatlcm.

A whole volume would be necessary to detail the dill'erent
schemes of reform which were brought forward between the
accession of Louis XVI. and the outl)reak of tlu; Revolution.
It will be sufficient for our purpose to notice the chief points,
whieh have an important bearing on the antecedents and the
actual events of that mighty movement.

Louis XVI. himself, as no one can doul)t who has ap-
proached the sources of the history of this period, entered
on the task of government with a heart full of j)'ety, philau-

«i-f!

'4T

■ riS

!*■

t' ' i

ECONOMIC IIISTOJiy.

r'
I,

\'a

; I

thropv, and public 8])irit. He waa earnest and pure-minded..
penetrated by a sense of his own dignity and the responsi-
bilities attached to it; and firmly rcsL.ved to close forever
the infamous paths in which his predecessor liad walked.

j5ut unhappily, his capacity bore no jiroporlion to his jrood-
will. Ih' was incapalde of forniinjr a decision; his education
was deficient; he was awiiward both in person and speech,
and slow of comprehension. As he had a very limited knowl-
edge, both of the people and the condition of his empire,
the selection of his ministers wa.s, from the very outset, de-
termined by accident, the iuliuence of his aunts, his queen,
or the contending court factions; and as he was inunovalde
wherever morality waa concerned, l)iif utterly helpless in the
practical e.\e<'ution of his ideas, his was just a case in which
almost everythiui": depended on the aid of his lu'arest .mI-
visers. He possessed just sidlicient sense of justice and
benevolence to enceurnge every effort for useful n-ioiuis, but
lacked entirely thai firmness of an enliuhtciUMl juduirient
which knows how to liriuu about a positiv(^ result in spite of
the opposition of existiu!' interests. The ini'vitablc emise-
(piences soon showed themscdves. Anarchy, which uudt-r
Louis X\'. had reiuned in the minds of men, now liroke
forth into t)vert acts. Tiie suiTeriiifrs of the peojile, which
individuals had hitherto Itttrne in silent apathy, now occupied
the atteuti<tn of the masses.

The same chance which in his reign directed the manage-
ment of public business had given him, as Ills lirst minister,
Turgot, the greatest reformer of the day.

This great minister's strokes fell heavily on the existing
svsteiu in every (lii'eclion. Among his measures we find fret'
trade in corn, al»olitiou of the carr/^f in the eoiiiitry distriels,
liberation of trade from tlu' IrammidH of the guilds, tlie erec-
tion of the riiixsc t/V^''')»J/<^',' a number of Improvements and
alleviations in the modi> of raising the pul)lic ta.ves, and a
prospect held out to all pos.sessors of |»roperty, of a gradual
increasing share in polilieal rights; and it is under these

' An institution for lending money for tlio furtherance of nmiuifiieturea and
commerce.

CAUSES OF THE FRENCH REVOLUTION.

heads that the restless activity of this liberal statesman may
be best anaiiired. We may easily eoiiecive that there was
scarei'ly one of the prlvil(';i;('<l classes which did not eo .sider
its previous existence imperilled.

Opposition rose in every ([uarter; the courtiers, the parlia-
ments, the landed arisloeraey, and the mciulters of the jruilds
all threw themselves into an attitude of defence with noisy
zeal. The cuntcst penetrated into the royal family itself, —
Louis's younjrer l)rother. Count Charles of Artois, a'oused
the minister, who, he said, was undermining the aristocracy,
the prop and rampart of the throne; and a cousin of the king,
th rich and almndoned Philip, Duke of Orleans, began,
amid the general uxeitement, to play the demagi gu<! on his
own account. Then ft»r (he lirst time a specl-.cle was seen
in I'aris which was subsecpiently repeated in ever darker
colors, — the spectacle of the police authorities of the capital
stirring up the mnb against the crown, and on this occasion
in the interest of (lie privileged classes.

At first Louis X\'l. detdared that he and Tiirgot were the
only friemls of the people, and stood linn against the parlia-
ment of Paris and the street rioters; liut he was not proof
against (he feeltleness of his own character and (he wi'aring
inlluence of (hose by whom lie was dailv siirroiiiuled. Af(er
an administration of nearly a year ami a half Tur^-ot was
oi)liged to yield (o (he reaction of the (iiifiiu rrjniif, and
almost all his creations collapsed at once. Then followed a
long period of experiments and palliatives, the siu'cessors
of Turii'ot woubl gladly ha\e gone on in the lu'oad (rack of
tradidonal privileges if (heir increasing linancial dillicul-
ties had lef( them any peace. I( was jus( at (bis time that
Louis resolved to su|»port the North .\meiicans against Kiig-
laud. which he really di<l aL'niiis( his own will and (he views
of bis miiiisteivu who dreaded the expense (tf a great war, and
clearly saw (hat the I'muiicipation of (he colonies would not
weaken l"aiglan<l. 15u( the umlelined Imigiinr bir frc'dom,
and the lilx-ral political doctrines whieb had taken ioo( lar
and wide in the laml prevaile(| over (he scruples of (he
king and his counsellors. The .Manpiis of fiafayette, then a

(I i/i

ECONOMIC HISTORY.

. A

\ .;>\

(

!■■?■

tall, light-haired youth, full of vanity and ambition, who, on
account of his ungraceful manners, had no success at court,
fitted ;»ut a ship at his own expense and sailed across the
Atlantic. A number of inlluential persons cried out for
vengeance upon England lor the humiliation sustained in the
Seven Years' War; in a word, the warlike party carri(!d
their point, and war was declared against England. The
consecjuence to Fi'ance was a rapid spread of democratic
sentiments on the American pattern. The followers of
Rousseau were triumphant; here, they said, might be .seen the
possibility of a democracy on a broad basis, — the construc-
tion of a State un the foundation of the natural rights of
man. Another consecjuence of the war was to tln»w fresh
burdens on the public exclu'(|uer. The minister of finance
at this time was Necker, a native of Geneva. Having come
to Paris as a poor clerk, he had risen by his talents and skill
in business to the p<jsition of a rich banker, and with great
self-complacency had made his heuse the rendt'srouH of the
moie distinguished members of the liberal party. By his
intiuence with the bourse he procured a certain degree of
credit for the State, and raised loan after loan to the amount
of five hundred millions, without any increase of the taxes,
or any provision for a li(|ui(lation of the debt incurred.
This was evidently sacrificing the future to the present, since
the deficit became larger every year, as the interest of the
public debt increased. Necker had the real merit (jf bring-
ing some of the departments of finance into better order; ho
enjoyed for the time being unbounded po])ularity, and basked
with delight in the universal acknowledgment that he was
the greatest statesman in Europe. Public confidence was
freely given to a minister \\\. endeavored to found his ad-
ministration on credit alone, —that is, on the confidence of
mankind. lie was looked on as a perfect hero when he
introdueeij, with good results, provincial assemljlies into
Berry and Guienne, and soon afterwards, breaking through
all the traditions of the ancient mtmarchy, published a de-
tailed, but unfortunat(dy very inexact and highly colored
report on the slate of the finances. But as he nowhere laid

CAUSES OF THE FRENCH REVOLUTION.

the axe to the root of the evil, he only roused a nuiubor of
powerful Interests by his attempts at innovation, but was
utterly uiuible to elose the source of linaneitil confusion.
lie, too, soon saw no other means of recovt-ry hut limitation
of the budf^et, and economy in the expenses of the court ; l)y
avowing which he nuide himself hateful to all the grandees
of the ant' haniber, and was deprived of his ollice in May,
1781. Aftc. "^wo insignificant and inexpcrionecil ministers
had cxhauated their strength in the years innnedialely
following, the intendant of Ijille, the gifted l)ut frivolous
Calonne, was called to the lii'lni. lie began with the pr(»po-
sition that whoever wi.shed for credit must eidlivate hixurv;
and he renewed the prodigality of the court in tiie style of
Louis XV. After nuitters bad gone on in this juljilant
course for some years, and the pul)lie debt had been increased
by four hundrecl millions, and the taxation l)y twenty-one
millions, the ruin of the country lieeame palpable at the be-
ginning of the year 1787, and tlie catastroplu; ini'vitaltle.

Let us here cast a glance ut the budget of the (iitcir/i
r^ijime, the disorder of which was to give the signal of con-
vulsion to '"v (juarter of the civilized world. After
Necker an ; ('■<] .nne, the Notables and tlie Revolution, liave
quarrelled about its contents with eipial meuilacity, tiiis
budget now lies in its most secret details before the eyes of
the historical inquirer.'

And first, with icgard tr) the national income, which, as
is well i<nown, amoimted to about live hundred millions be-
fore 17H1), nearly eight buiidred under Napoleon, and then
increased during tiie period lietween 181^. mkI 1S48 to 1,500
million francs. However delinite tluwe figures may appear,
we can by no means draw a coixdusion from tliem as to the
(dieapness of tlu; respe<'tive modes of t'overnuient alxtve-
mentioned. We have already observeil that in proportion to
the national wealth a taxation of (ive bundrrd millions i)e-
fore 1780 would l)e about eipiivalent to one of 1,000 millions
at the present day. In the i\e\t |tlaee, we nnist make several
additions to the round sum of live hundred millions.

1 Bnilly, " Hist, flimiic. du la Franco," ii. 278.

ECONOMIC UlSrORY.

'1 i'

The income of the State in tlic yeiir ITSo was calculated
at live Imiulred and fifty-eight millions, to which wero added
forty-one millions more for the local administration of the
provinces, a sum which was never paid into the treasury, hut
immcdiatily exi-cndcd in the dilTercnt places where it was
raised. Thus we find that (he nation was hearinu; an annual
bui'di'U of fi'oni live hundred and ninely-nine to six hundred
millions. At the same time the Church, whose expenses no ;
liguie in the hud<ret of the State, rai.^ed one hundied and
thirty-three millions in tithes, and sixteen millions in other
dues and olTerin^fs.' The fees, which servnl as a compleuicnt
to the judicial salaries, auKtunted to twenty-nine millions;''*
the seigniors raised al>out :2,r)00,00(.) in tolls of various kinds,
and at least 87, 000, 000 in stamp duties.'' 1 pass over the
feudal rents and services, the valuation of which is quite
impossiltle. These, from their very nature, eaimot l»e taken
into account in speakinirof the puldie Ijurdens, ami nuiy very
well lie set olT against the mortgage delits of the modern
peasant proprietors.

'I'he items already mentioned, however, in addition to
some of a similar character, amounted to two hundred and
eighty millions, so that the Fri-nch people had at that period
to hear a tutal annual taxation of eight himdred and eighty
millions. 11 we compare this sum with ihe national wealth,
we may unhesitatingly set it down as e(|uivalent to an
amount of "J, 400 millions at the present day; i* follows,
therefore, that fi'om the time of Louis XV. to that of Napo-
leon III. there existed hut one governnu>nt in France which
appropriated to its(df a still larger proportion to the puldie
income tliai! the anci'cn nv/Zz/fc, and that one was the govern-
ment of the .Facohins during the Heign of T; i ror. The
Kmpire, the Restoration, and lionis Philippe contented them-

1 Louis T'liuic, I) iii c. H, fstimatcg them, aci-onling to other nutlioritic*.
not nt Kt, )ii:t at :>0 millions.

' Aci'ordiiitt to otlicr rgtimntes, -12 niiliions. Boitonu, " fttnt dc la I'Ynnco I'H
1781." Paris, IHOl.

'* For the !<aki' of lirivity I ii«i> this term to denote all the fees paid on clmnge
of property, * (j , hds, relvds, ijiiir.ls, etc.

'^^

CAUSES OF THE FllENCIl REVOLUTION.

selves with far HinallfM' sums; hero, too, fcudulioiu finds its
counterpart anionj; the socialists.

When we incjuire into the distribution of these taxes
amontr the dilVerent classes of the people, wo disccjver a j^hir-
inj^ inecpiality. The higher ranks were not indeed exempt
from taxation, htit they were in many respects favored. Of
the taxes on consumption, which were valued at three him-
dred and eiiiht millions, they l)ore of course a full share; but
of the land and capitation taxes (one hundred and seventy-
one millions) they ought, as was discovered during the
Revolution, to have paid, on a fair distril'Mtion, thirty-three
millions more than they actually did. In the next place
the maintenance of the public roads, which were entirely
kept up l>y means of the mrvci', at a cost of twenty millions,
and further, the expenses of the provincial militia, aliout six
and one fourth millions, rested entirely on the shoulders of
the lower classes. If we take into consideration the forty
millions ijuoteil aliove, which the seigniors received fntm the
peasants, the fact that the poorer classes of every town were
respiriisiide for the taxes of their rommunc, even when their
rich i'ellow-citi/ens escaped payment Ity the purehase of
privileged oilices, and lastly, the scandalous unfairness in
the imposition of the tax.'s on consumption to whieh the
helpless multitude was sui)jected by their superioi'S, we shall
easily umlerst'ind the triumphant fury with which, in 17Si>,
the pciisiints luore espei'inlly received the joyful int(dligencc
of the utter destruction of the system above descril)ed.

(treat as was the proportion which it exai'ted of the national
income, tiie government found its(df, nevertheless, in a state
of ever-increasing need and embarrassment. Disorder on the
one side and sellishness on the oth( r seiitti'ri'd its t re:isui"es
to the wind. 'Ihe case was the sjime in the linancial aiii.iin-
istration as in that of justic'; no one had ever tried to or-
giuii/.e it on any grant principle of wise adaptation to the
end in view; on the contrary, a number of isolated jurisdic-
tions, (listinguisluMl from i»ne another accoi-ding to provinces
or sources of income or the destination of the funds in tpu's-
tion, existed side by side, inter' riuL' with ea(d\ other'h

,^ n

t ■ I .

}! i

E COSOMI C Ills TOR V.

•M

oporationa and drstroyiii}? all rosponailiility. The amount of
arrears due the treasury, e(iual perhaps to half the anjuial
hiid^'et, not even the Ilevohition has l»een able to ascertain,
and it eould only jret hold of the prolits of the; farmers of tlio
revenue Ity means of the <ruillotine. When onee fauiiliari/.ed
with deficits the irovernment soon fell iuto the stream of
floating del)ts. The anticipation of the ri'venue (if future
years, at a usurious discount paid to the (collectors them-
selves, the puttin<r olT the payment of deitts which had fallen
due, and the omission of expenditure pnvserilK'd liy law,
were the cause of etiually enormous losses, when the day for
liipudation at last arrived. How wid<'ly this confusion
spread iu;iy he gathered from tlie actual cash ae(V)unts of the
year ITi^'o. I>y the side of the rcLndiir iiu-ome of the treas-
ury, of not (juite three hiuidred and lifty-seveu millions,
there is aii(»ther accijtinl of four hundred and uiuety-lhree
millions iucouie and four hundred and seven millions ex-
penditure, cousistiuir of items which helonj; eithci- to the
earlier or hiter years of the period between ITHl iuid 17M7;
so that the siiui total amounts to tieaily eight hiuidred anil
fifty millions. We see what a field was opene<l to speeiila-
tora and the lovers of plunder, and to what a state siadi pro-
ceedings liiid reiluceil the prosperity of an empire wliiidi, a
hundred veins earlier aiul twenty years later, dictated its
will to Kiiropc iis a law.

The hist feature iii this State economy Avhieli reveaU to us
ils character is the kind of expeiiditiin- in which these trt^aa-
ures collecte(l with so much ditliciilty were employed. The
expenses <if the court were stated in the .dlicial budget at
thirty-three or thirty-live millions, Imt they were in reality
forty millions, which ilid not include the roynl liiiutiiig ex-
iM-ditions and journeys, tlie salaries of the great ollicera of
the court, or the maintenance of the rov;il palaces. The war
oflice, the cost of which Xt cker states at ninety-nine millions
and ("mIoiiiic at one himdred and fourteen iiiillions. received
one loiudred iiiid tli'ity-oue millions, of which rather more
than thirty-nine millions went to the administration, forty-
four millions lor the pay and commissariat of the troops,
and foriv-six millions for the salaries of the ollicera.

CAUSES OF THE FllEXCII REVOLUTION.

Knlircly icmovcd from all inini.stcrial calculation were the
money orders of the kin)^ himself "for presents, etc., to
courtiers, to tlie minister of finance and nmgistrates; repay-
ment of foreii^n loans; interest and discount to the treasury
ollieials; remission of certain personal taxes, and iniforcseen
expenses of every kind."' This class of expenditure, which is
well chara(!teri/.ed hy the ahove headinir, amounted in ITS')
to one liun<lreil ami thirty-six millions; in other years the
sum was rather smaller; l»ut we may fairly assume tlii't the
annual avernir<' was more than one hundred millions. ' And
while we thus see nothini^ l)ut uljundance and superliuity
anion;/ the hiixhest classes of society, the itridjres and roads
are only set down at four millions; the puldie huildings at
scarcely two miilion.s, and th(( scientific institutions at
rathi'r more than one million; for which olijects the Imdfijet
of lS;):i iind the followiinr years ^'ranted fifty-nine millions!
The hospitals and fouiidlinu; institutions received six millions
from tlie .>^tate, six from the Church, and had a revenue of
twenty-l'oiir millions of their own; while the i)enevolent in-
stitutions of moilern France (IS."):]) had an. annual sum of one
hiiiidrcil and nineteen millions at their disposal. In short,
whatever portion of the financial aiVairs of this feudal state
we iiivi sti irate, we arrive at the same ri'sult, and find the
people separated into two jri'eat clas.se8, one of which was
enriched at the cost of the other.

Ihit as every such draininir of the wealth of a nation Itears
within itseP' the trerms of ruin, liy tlryiuir up on the one
hand the sources of income, ami increasinir on the other the
passion for extravairance, the irovernment found itscdf at the
end of 17S(! in the followiiiur condltifui: the retriilar anniiiil
incoiiie was three hundred and twenty-seven millions; the

annual expenditure nccordinir to the treasury ac iints

amounted to three hundred ami forty millioiis; in addititm
to this there were twenty-seven millions for pensions and
seventy-two millions of nrtrent aii-ears ""rom former years;

' \Vi' arrive nt tliis rosiilt from tlio dclmtt ^ of lln' " Afscinlilrc Constini-
antc " (in April, IT'.W)) on tlip ppiisions, tlie ordnuiiiiti-es li rnwiitnnt, and tliu /iit«!
rmige. Louis Illanc gives a nunil)cr of details from tlu'sc in b iv., c. 5.

i.i

ECONOMIC HlSTOllY.

and laslly, iii the year 1TH7 there was a losa of twonty-ono
inillioiis Iroiii the cessation of a tax wliieh had only been
imposed for a pei-iod eiidiii«,' with that year. 'Die dclieit,
therefore, ainouiited to one hundred and ninety-eidit mil-
lions. U|) to (his time the j^overnnu'nt had hidpcMJ itself by
all the arliliees, both bad and good, of a credit strained to the
very utmost and now utterly exhausted. An inen-ase of the
taxes was nt»t to lie thoujilit of on account of the eiioiinoua
burdens by which the nation was already cruslird. Under
these circumstances C. lonne, with jrenial frivolity, recurred
to the serious and nolde plans of Turj>-ot.

He had hitherto lived on tlic favor of the jnivilejred
classes; he now endeavored by sacrilicinir them to relieve
the ('(mimonwealth. lie congralulate(l the State on having
within it so many great al)uses, Ity the removal of which new
sources of prosperity might be opened.

The (»ppnsition which 'i'urgot had met with Avas of course
directed with redoubled fury against (^iloune. A closely
crowded throng of privileges rose tumultuously against his
plans. The court nol)ility, the provincial estates, <lie tax-
collectors, the courts of law, tlu' ]»olice oHicers, the cnuncil-
lors of the connininr, and the heads of the guilds, took up
the contest against the will of the king and his ministeis.
But the development oi' modern ideas had made such progress
that the parties competed w'th one anotlier for the power of
public opinion. The ministry itsidf emancipated the press
in order to exi)08e the advocates of the old system to the na-
tional conteni|it. The young nobles of the court ami in the
provinces armed the mob of Paris and the pi'asauts of
Auvergne against the ministers, and instigated tlieuj to vio-
lent excesses. An assembly of aristocratic notaliles, to
whom Calonne submitted his schemes of refcuMn, refused
their assent. clainxMl the right of inspecting and sujierin-
tending every department of the pul)lic service, and emled liy
declaring th.it, as they were nominees of the king and not
representatives of the nation, tl ey were not competent to
make new grants. Immediately after their dismissal the
parliament of Paris, which next to the ministry was the

CAUSES CF THE FRENCH ItEVOLVTlON.

hijrhost autliority in the State, broiit^'ht forward, as a [M)sitivo
(Itiiiimd, wliiit the notables had only ni'jrativcly sujrL'tstcd.
in a formal decree they denumded that an Assfnil)ly of
lh(5 States-General should he called, — an Asscinldv which
lh(! monarchy had dis|tensed with (or two hundred years.
The ministry at first received this proposal with jxreat dis-
favor; liiit as the want (»f money grew more and more urgent,
the alluring hope arose in their mimls of linding in th<
States-general, which was chiefly com|iosed of Imrghers, a
powerful support against the privileged classes. We shall
never understand (he extraordinary success of the (irs( revo-
Indonary movements, unless we hear in mind wha( a larirn
share in (he government, of (he eoun(ry was possessed hy
(ho higher orders and (ho corporadons, and how (hey now
mu(ually sought each odier's (les(ruc(ion.

Calonne was not long al)le to ni;ikt head against this noisy
op|»osition. The last of the man. Idnws which caused his
fall was dealt ity the (pieen, whom lie afterwards persecuted
with inextinguishable hatred. His successor, Hrienne, after
a violent contest with the parliaments, resigned his onico
when (he convocation of th(^ States-general had already b(M'n
determined on, and the national bankrup(cy vir(ually pro-
claimed, fiouis had recourse (o Xecker airaiii, who reallv
relieved (he liuancial cmbarrassnient for (he mom('n(, and
recognizing llie n(>cesslty of a liberal policy, lixed (Ik* meeting
of (he Sta(es-t:vneral lor (he :27(h of .Vpcil, 17St>. The fer-
men(, which owiuu; to the preceding disputes bad lor (he first
(ime since the religious wars peiietrateij (he mass of the peo-
jile, increased from hour to hour. Tlie agitation was princi-
pally cause(l by the question whether the States-general should
meet as before in thret> sejiarate chambers, or form a single
assembly, in which the //(■/•.'< (7(i/ should have a douldt> iiuiiiIht
of votes. On this point (h(> hi(her(o allied opjiositiou parties
differed, the nrisfocrats advocating the separation, the liiierals
the union of the three estates. Necker, with gr(\it want of
(act, betrayed his own views by assigning the double numlxT
of vf>tes to the t'hrx r/af, while lie induced the government to
observe an obstinate silence on the main point in (piestion.

■ ■ f ,

'..Ml

-.\m

hi-' *

i ''I

,* 4-,

ft:

) .1

I '

1^'

» ■

ECONOMIC nisTouy.

Tlic piihlic (li'liiitos oil this siihjt'ct were alt tlu' more violent in

consiMjUt'iK'c ol itiiH roticenee, iiiul in lirelii^iie it came to an
open eivil war lictween the nol)ility and the liiir;ihers.

The nidieal ek'nientH in France saw that tiieir time for ac-
tion was eome, and the great dearnewa of provittions which
prcvailt'd durinjj; the winter montlis placed a lar^re numher ol'
d( spcnitc men at the disposal ot every cdnspirator. In Taris
tlic revolutionary dema^ojiiies gathered round the agents
of the Duke of Orleans, and at the <'nd of April tried their
strength in a sanguinary street riot, which was professedly
directed against the nsuritius avarice of a rich nianutaetnrer,
liut really had no other object than to intimidate the mod-
erate party before the impending elcetinn of the States-
general.' In other respects external ipiict still prevailed
in the provinces; but the feverish agitation of men's minds
increased with every day, and in this stati" of things the
elections by almost universal sulTrage began to be hcdd.
Every (deetoral college was to intrust its instructions and
complaints to its deputies, a(!eording to mediieval custom.
In every district, therefore, a long list of al)U.ses was drawn
up an<l examined and Itrought home to the minds of the
p(M)ple at large by means of discussion. A modern historian
has justly oliserved that these complaints do not leave a sin-
gle particle of the anclen r^ifhuc untouched, that everything
was rejected by the restless desire of innovation, and that
nnfortunatelv neither the possiliility nor the method of in-
troducing reforms is anywhere pointed out. Revolution,
universal and radical revolution, speaks in every line of
these documents. There was but one thought through the
whole of France, that thenceforward a new era was to com-
mence for the people and the em])ire, and that the work be-
gun must be completed in spite of every opposition.

While the millions in every part of the country were thus
emancipating themselves fnmi the bonds of traditional law,
uncertain al)out their future, but firm in their resolution to
proceed, the government was daily sinking more and more

' This lins Ijcen flo.'irly anil concisely sliown l)y Croker in his " Essays on
the Trench Kevolution," p. 00.

k ill

CAUSES OF THE FliESCll REVOWTIOS.

into utter lu'lplcHsncsH. it had imli'i'il a present iiiu'iit of tlie
(lan^er.s wliicli would aeeonipany the hreakinjjj out ol" the
now cpoeli, hut its destitution was so coniidete that it eajferly
lonjjcd for the coninieneeineiit of thci crisis. Money, one of
the ffreat factors <tf nuit( rial power, was not to he found in
its colVi'rs, and even the other, the army, was already
alTected l»y the jreneral process of dissolution. This is per-
liMps the most important circunislanoe with respect to the
sidtsetpient ccturse of the French litsvolution, aiul its tlilTerence
from all those whicli have since taken place in Europe. The
reason is simple eiu)Uirh: the Frentdi army was in the nuiin
orjiiinized accordinjf to the sani(! principles as the other do-
parlnjenta of tlu> State, and like them had hecn thoroui^hly
nnhin're<l hy the contests hetwcen tlu; crown and the feudal
oi'dei's lonj^ ix'fore the iu'<>akin<i; out of the Rev(dution. The
noliility alone were eliiiihlc! for ciimmissions in the army,
and thoujrh sinjile exceptions to this rule really occurred, yet
the monopoly was actually limited by a law of ITMl to nolde-
n»en of four descents. Twenty-seven regiments helonged to
foreiuu or native grandees, and in tliest' the owner of eairh
r(>uiment appointed the colonel from a list drawn up hy the
minister at war, and tlu^ colonel appointed the otln'r oillcers.
The influence of the king's government, thercfori', in the
sideetion of ollicers, was limited to tin; composition of the
list of camlidates for the single olVuje of colonel. In the other
divisions of the army, indeed, the highest rank was in the gift
of the king alone, hut of the other commissions only one half
weie hi'stowed hy the king and the other half hy the colonid.
The otlicer moreover received his commission, after giving
proofs of his fitness, on payment of a sum of money; it was a
j)urchase for life, as in the case of th(> courts of law it was a
jturehase of an hereditary right. The duty of unconditional
obedience was not indeed al)rogated l)y this system, but it
was inevitable, especially under a weak government, that the
corps of oiricers should feed itself, what it really was, a part
of that great aristocracy which .shared with the king the
ruling power of France in every dcj»artment of public life.
The contest between this nobility and the ministry, by which

hi /i

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Sciences
Corporation

23 WEST MAIN STREET

WEBSTER, NY. 14580

(716) 872-4503

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ECONOMIC HISTORY.

the last years of the ancien rSgime were filled, must, there-
fore, have had a deep effect upon the army. It frequently
occurred that the officers, like the judges, with their colonels
at their head, refused obedience. And as in the rural dis-
tricts the opposition of the aristocracy was followed by ex-
citement among the peasants, and the opposition of the
towns by excitement among the artisans, so in the case of
the army the popular movement found its way into the minds
of the soldiers, and operated side by side with the class re-
sistance of the officers. The common soldiers had felt the
oppression of the ancien regime perhaps more deeply than the
peasants themselves, for they were starving on a pay of ten
sous, while countless sums were employed in rich endow-
ments for 1,171 generals. They suffered all the insolence
of the nobility towards the canaille, embittered by the weight
of a severe and often brutal discipline, and, like their fellow-
citizens, they looked forward to the meeting of the States-
general as the signal of liberation from intolerable slavery.
The number of regiments on which the government could
reckon was extremely small. The bands of discipline were
loosened iu every rank; the officers invoighed against the
despotism of the ministers, and the soldiers promised one
another to do nothing against the people.

The ancient polity, therefore, was destroyed by its own
internal discord and dii>- olution before a single revolutionary
word had been uttered. The government Avas destitute of money
and troops to defend its position, and the feudal seigniors,
though they had important individual rights, had no general
organization which could enable them to replace the govern-
ment. As soon as public opinion, which, guided by radical
theories, emphatically rejected both the government and the
aristocracy, obtained an organ of power in the States-general
it only needed to declare its will, nay, only to give expres-
sion to the facts before them, and the old system hopelessly
collapsed in its own rottenness. What was to follow no man
at that time was able to foresee. As most men were ex-
tremely ill-informed respecting the condition of the country,
they indulged in hopes which were all the more ardent in

CAUSES OF THE FRENCH REVOLUTION.

proportion as they wore undefined. But there were many
who knew the poverty and brutality of the masses, the bitter
hatred between rich and poor, and the selfish immorality of
the upper classes, and looked, some with ambitionij pleas-
ure, others with patriotic anxiety towards a stormy future.

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ECONOMIC HISTORY.

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IV.

THE EDICTS OP STEIN AND HARDENBERG.

THE EMANCIPATING EDICT OF STEIN.

Fkom Seeley's Life and Times of Stein.i Vol. I. pp. 287-297.

1807.
T CALL by this name the great edict which was signed on
-^ the 9th of October, that is, only five days after Stein had
received his powers, not solely because it contains the provi-
sion that from a certain date there shall be only free persons
in the States of the King of Prussia. It is indeed to be re-
marked that the principal authors of the measure are so
intoxicated with the pride of being the bestowers of freedom
upon bondsmen that they forget to remark how much more
and how many other emancipations they accomplished by
the same act. Stein's own account of the edict of October
runs as follows : —

"The measures adopted to reach the above-mentioned general
object were : —

" (1) Abolition of personal serfdom in the Prussian Monarchy :
by an Edict of October, 1807, it was decreed tliat from October
8tli, 1809 (sic; it should be 1810), i)er.s()nal serfdom with its con-
sequences, especially the very oi)ijressive obligation of menial ser-
vice, should be abolished; but the obligations of the peasant, as
far as they flowed from his possession of property, remained unal-
tered. It was reserved for the Chancellor Hardenberg's love of
innovation (on the advice of a H. Scharrenweber, a dreamer who
(lied in a madhouse at Eberbacli in 1820) to transform in 1811 the
relations of the landlord to the peasant class, and its inner family
relations in a manner pernicious to it; in this I had no share.

" (2) The transformation of the peasants on the Domain in East
and West Prussia into free proprietors."

University Press, Cambridge, Eng., 1870.

EDICTS OF STEIN AND HARDENDERG.

Here not a word is said of any changes made by the Edict
of October except those which affected the peasant. It is
the same aspect of the edict which interests Schtin. This
edict, he says, "has made the figure of the king stand
higlier, since he is henceforth no longer a king of slaves, but
of free men. " And again : —

"Tims came into existence the law of Oct. 9th, 1807, that
Habeas Cori)us Act of our State. The idea of freedom had begun
to live. With ninety-nine hundredths of the people it made a
deep and elevating imi)ression; the few friends of slavery intrigued
and nnirmured no doubt a good deal, so that, according to Rliedi-
ger's story, a prejudiced man said at the Herlin Casino after read-
ing the law, 'Rather three battles of Aucrstiidt than such a law! '
But the king stood firm, and God maintained the right."

In stating pretty strongly his claims to be considered the
real author of the law, Schon uses language which shows that
he is thinking almost exclusively of this part of it. "All
else that I did in life, " he says, " was as nothing compared
to calling into life the idea of freedom." Only from one
casual expression do we learn that he even knew that the
measure had another side, where he says, " I represented that
hereditary serfdom, that scourge of our country, must be
brought to an end, and that a proclamation of free trade in
landed property would bo sufficient to promote material
interests."

Here we are suddenly introduced to something quite now,
and very different from the abolition of serfdom, namely,
free trade in landed property.

Up to a certain point it is true that these two things coin-
cide. One part of the burden of serfdom lay in the incapac-
ity of the serf to alienate his land, bi.c this is a small matter.
The proclamation of free trade in land affected all classes of
society at once, and the upper and middle classes much more
than the peasantry. When, therefore, we observe that the
edict of the 9th of October, at the same time that it abolished
personal serfdom, removed all the principal restrictions that
interfered with traffic in land, we see that it is in fact not a

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ECONOMIC HISTORY.

single law, but two laws in one, and two laws of such mag-
nitude that each by itself might bo considered equivalent to
a social revolution.

But when we look closer still we discover that the edict
goes even furthei-, and should be rather described as three-
fold than as twofold. Englishmen are only too familiar with
the notion of a depressed class of agricultural laborers; but
such depression may be of two kinds, and may spring from
two very different causes. We are not to suppose that the
peasantry of Prussia were in a condition resembling that of
our own laborers any further than as it was bad. The evils
afllicting the Prussian peasantry were those arising out of
itaiUH ; those which alTlict English laborers arise mainly out
of contract. The English laborer is nominally free and at
liberty .o carry i:l3 industry to the best market; he is re-
duced to real dependence by his inability to make a favorable
bargain for himself. The Prussian peasant was nominally
a serf, but in reality some very important rights were se-
cured to him. We arc not to suppose, for instance, that cruel
punishments were allowed, or that he was subject to the ca-
price of the landlord. He was far more of a proprietor than
the English laborer, for, though on a degrading tenure, he
did for practical purposes own land. Nor were his interests
neglected as those of a freeman, who is supposed able to take
care of himself, may be neglected. Not only was he a mem-
ber of an ancient and organized village community, but the
Government also took, and was obliged to take, the greatest
possible interest in his class ; for these serfs were neither
more nor less than the Prussian army.

Now it might very plausibly be maintained that the pro-
clamation of free trade in land would not create a happy
peasant class, but would simply substitute for a jjcasantry
laboring under certain evils that class of famished drudges
whom we know in England, and who if they cannot be called
serfs can still less be called peasants, for a peasant properly
so called must have a personal interest in the land. Hence
the conservative opponents of Stein, such as Marwitz, actually
declare that there existed no slavery or serfdom in the land

EDICTS OF STEIN AND HARDEN BERG.

when ho professed to abolish it, but "that it thou for the
first tiuio began to appear, namely, the serfdom of the small
holder towards the creditor, of the poor and sick towards the
police and the work-houses;" and again, "that with the pro-
clamation of free trade disappeared the previous security of
the peasantry in their holdings. Every rich landowner could
now buy thorn out and send them off; fortunately, scarcely
anybody was rich any longer ! "

These were the criticisms of the conservative party, which
might have been very truly applicable to a simple measure
of free trade in land. But the edict of October had in fact
taken account of the danger, and contained an express pro-
vision to meet it. Hence, as I have said, it was actually a
threefold enactment, for not only did it first abolish serfdom,
and secondly, establish free trade in land, but, thirdly, it
endeavored to guard the peasantry against the danger, which
in so many countries has proved serious, of being gradually
driven out or turned from proprietors into wage-receivers by
the effects of the unequal competition to which they are
exposed.

At the same time that we carefully distinguish these
different enactments all included in one legislative edict,
let us 1)0 as careful to remark what was not included in it.
Englishmen arc apt to attribute to the legislation of Stein all
the innovations introduced in this period. In particular it
has been supposed that he created the j)easant-proprietorship
of modern Prussia. But this he did not do, except, as he
says in the passage quoted above, on the Domain Lands of
West and East Prussia. Proprietors in a certain sense the
peasantry were l)efore this edict, that is, they cultivated
land for themselves, and with a considerable sense of secur-
ity ; proprietors in the full sense they were not, because they
hold of a landlord to whom they owed various dues and
services. Now Stein's edict altered the nature of these ser-
vices, and abolished the most oppressive; but it did not
destroy the rights of the landlord or leave the peasant sole
master of the land he cultivated. It was reserved for
Hardenberg to do this by an edict issued on Sept. 14, 1811,

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ECONOMIC IIISrORY.

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und it should bo noticed that Stein expressly declines to ac-
cept any rcsixinsibility for this innovation. Again, it is not
to bo supposed that the provision just mentioned, by which
Stein tried to jtrcv-ent the altsorption of the small holdings by
Ihe great proprietors, has actually proved the menns of pre-
serving the peasant class in Prussia; for all this passed away
with the legislation of IJardenbcrg, and it has been by its
own vitality, and not by State interference, that jteasant-
proprietorship has maintained itself.

Further, it is to be remarked that Htein is (]uitc accurate
when he describes his Land Reform as not consisting solely
in the edict of October, but as incliuling also another quite
distinct act of legislation, which applied only to the i)rov-
inces of East and West Prussia. This act belongs to July,
1808, and is confined not simply to the peasants of those two
provinces, but to a particular chiss of peasants, namely,
those sometimes called ivwiediatc peasants, or in other words
those who, living on the Royal Domains, had no other land-
lord but the king. It is evident that the (lovcrnment could
deal with these more easily than with those peasants whose
condition it could not improve without meddling wilh the
rights of another class. The extreme distress in which
these two provinces lay, and which the Government was in
no condition to relieve directly, was the justification for
granting privileges to these particular immediate ])easant8,
which for the moment were not extended to tliv^oC of the
other provinces.

Such then, defined in general terms, was the extent of
this reform. It needs, however, a much closer descrii)tion.
In the first place the reader must guard against a misappre-
hension of the phrase "free trade in land" into which he is
likely to be led by his English experience. Free trade in
land is also a cry of our own reformers ; but we must beware
of sujiposing that what they call for is the same thing that
was granted in Prussia by Stein's edict. The complaint in
England is that a niunl)er of practical obstructions prevent
land from being the object of such free purchase and sale as
other commodities. Much of the land of the country, it is

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EDICTS OF STEIN AND JIARDENDERG.

said, is in the hands of persons who in family settlements
have given up the right to alienate it; the system tinder
which landed property is conveyed is so cumbrous and ex-
pensive as to deter people from transactions of the kind;
and lastly by recognizing the principle of primogeniture with
respect to land and not with respect to i)ersoual proi)erty in
cases of intestacy, the law itself countenances the notion that
landed property staiuls in a class l)y itself, and is not to be
di'alt with or transferred as if it were purely a commodity.
Xow it is an instance of the confusing and misleading in-
accuracy of our party cries, when the removal of these
restrictions is called free trade in land. Free trade in other
cases means the removal of restrictions imposed by the law
or l)y the government; but these restrictions arc of (piitc an-
other kind. Only the last mentioned is the work of the law,
and it cannot in any ])roper sense be called a restriction, for
the only way in which it operates rostrictingly is by lending
the moral influence of the law to the sujjport of a restrictive
system. The curnl)rousnes8 of our conveyancing is merely
the result of the gradual way in which our land system has
been formed, and as to the system of settlements, so far
from being a restriction of freedom, it is the direct result of
freedom of contract, — so much so that the reformers them-
selves demand an interference of the law to prevent it; in
other words, wish to promote what they call free trade by a
new legal prohibition.

Now when Stein is said to have established free trade in
land the expression is to be understood literally. The hin-
drances to the sale and purchase of land which ho removed
were not accidental pr ictical obstacles, but formal legal pro-
hibitions. In the old law of Prussia and in the Code of
Frederick or Allgemeines Landrecht, which came into force
in 1704, it is laid down that nol)le estates (adelige Giitcr)
can only be held by nobles, and that persons of civic origin
(biirgerlicher Herkunft) can only acquire them by express
permission of the sovereign. In the same way peasant-land
could, as a rule, only be held by peasants, and land belong-
ing to towns only by citizens. We are familiar with the

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E CONOMIC HIS TOR Y.

idea of casto ns applied to hiimau beiii^s, that is, of an nnal-
tei'ttble Htatm staiuped upon a luau from his l)irth; in Prussia
it luiiy lie siiid tliat casto extended aetually to the land, so
that every rood of soil in the country was of a delinile and
unalteral)le rank, and, liowevcr it nii^ht change its owners,
always remained either noble or citizen or j)easant land.
Now the llrst innovation contained in Stein's edict consisted
in (Miicellinu; in the fewest and simplest words all the regu-
lations which established caste in land.

When the edict is examined more closely it will l)e seen
to be much more comprehensive even than it was repri'sented
above when 1 pointed out how much more comi)rehensive it
was than was commonly snj)i)osed, or than Steiii himself
descril)ed it. For at the same time that it abolishes caste
in land it accomplishes another act of emancipation, which
is in no way exi»re8sed in the phrase free trade in land ; it
removes another quite distinct set of restrictions and abol-
ishes caste in persons. The Code of Frederick i»rohibited
the nobleman from engaging in any occupation properly
belonging to the citizen, and only allowed under certain
conditions the citizen to pass into the class of ])casants or
the peasant into the class of citizens. The Nobles, the Citi-
zens, the Peasants; these were the three castes into which
the Prussian population outside the professions was divided;
into one or other of them each ])erson was born, and in the
same, as a rule, he died. To each caste was assigned its
special pursuit. The Noble cultivated his estate and exer-
cised jurisdiction over the peasantry who held under him,
though he could not himself hold or cultivate peasant-land;
he also served the king in civil or military oflice. The
Peasant cultivated his plot of ground rendering fixed services
to the lord and subject to his jui-isdiction, and belonged at
the same time to the rank and file of the army. Between
them stood the Citizen, holding a monopoly of trades and
industries which by law were confined, with few exceptions,
to the towns. It is remarkable that the military profession
was, for the most part, closed to him. This must be borne
in mind when we compare the Seven Years' War with the

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EDICTS OF STEIN AND HARDENDEHG.

War of Libiiratlon. Wo have read of the fearful consuinp-
tiou of nu'ii caused by the Seven Years' War, and of the
desperate shifts of Frederick to procure recruits; hut we
nuist understautl that no levee en mitane took phice tiicn, and
tliat tlie citizen eh)ss had scarcely any share in what was
•joinir forward. This is the more to he noted because the
connection between the citizen class and the learucd (dans
was ch)S('r than in other countries. TIk; learniuir, litera-
ture, anil philosojihy, which lloui-ished so riMuarkalily in that
aiic took the tone of the middle class, and a curious result
followed. In the most military of all modern States, litera-
ture, because it apranu: from a class which enjoyed an ex-
emption from military service, and as a conseipience, the
tone of public feelini^ which is d(!termined l)y literature,
was in an especial deirree wanting in the military spirit,—
Scharnhorst describes the army as being generally hated
and despised, and Kant speaks with contempt of a man of
cducatiim who had embraced a military life, — and this fact
goes some way to ex])lain that phenomenon of a military
State lighting exceptionally ill which we have so long luid
before us.

This state of society is very foreign to our ideas, and may
perhaps, because we have no exjierience of it, fascinate some
imaginations. No laisxez /aire here; every man's place is
assigned to him from his birth; his occupations are pre-
scribed, and a great taskmaster or earthly Providence stands
at the head of the whole society, which may be called army
or nation at jdeasure, since even the unmilitary citizens were
regardeil l)y the State i)rincipally as a sort of commissariat
department. And for the immediate purjjose of Frederick
William I. and Frederick the Great the system was well
adapted, for that purpose was simply military. A place for
every man, and every man in his ])lace; the "j)roduetivc
forces of the country perfectly inventoried and a debtoi- and
creditor account of its resources kept;"^ by such a system
the rulers could wield the whole force of the country most
easily and certainly. Nevertheless, the destruction of this

> Morier.

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ECONOMIC ins TOR Y.

wliole syatcm by a stroke of Stein's pen was now regfirtled as
the greatest ol' reforms and the comnieneenient of the resto-
ration of I'russia. For it will be evident that the Bame sys-
tem whieli coneentrated so powerfully and measured so e.\-
uetly the forces of the country at the same time entirely
preventi;d them from growiuff, not to mention the intellect-
ual stagnation, outside the university world, which was pro-
duced by such rigid uniformity of life. A country in which
no man can follow his natural lient, take to agriculture if he
does not like trade, or to trade if lu; does not succeed in agri-
culture, is evidently not an industrial country. Its material
resources under such a system will remain undeveloped, and
if it be a poor country, as Prussia was, the system will actu-
ally in the end defeat its own object, for such a country from
mei'e j)overty will be weak in war.

As the first section of the edict abolished what 1 have
called "caste in land," so the second, consisting of aljout
three lines, abolished caste in persons. And here it may
perhaps be observed that I omitted above one principal cir-
cumstance which made such sweeping changes so easy to
Stein. Uefore the Peace of Tilsit it would have been scarcely
possil)le to carry out such reforms, however nnich the rulers
might have been convinced of their necessity. Frederick
had shrunk from the emancipation of the serfs because ho
felt that it would introduce disorder into his army, and for
the same reason these reforms also would have been scarcely
])raetieal»le so long as the army existed. The di-sastei-s
brought v,'ith them the compensation that they destroyed for
a moment this incubus. The necessity of maintaining a
great position in Europe, the necessity even of defending the
country, ceased when the country actually fell into French
occu|)ation; and thus, as we may say, the building being down
it was i'or the first time possible to mend a defect in the
foundati(jns.

Tlu>sc reforms, favored as they were by circumstances and
requiring but few lines in the edict, were yet much more
fundamental and pregnant with consequences than any such
practical reforms as may be called for in England to make

EDICTS OF STEIN AND IlAHDEXIiERG.

the |)iir('li!isi' of land more easy. Tlioy were a sort of Ma^'iia
Cliarta to the Prussians, and Schon mijjrlit well liavi; applied
to thcni the enthusiastic expressions which he keeps for thi;
sections which emancipated the serf. In v. Ronne's stand-
ard text-hook of Prussian Constitutional Law 1 (ind in thv
I'liaptfT on Itijiihts, under the Hist lille, Preedom or Si'curity
of th(^ Peison, that tliis freedom is composed of three rights:
(1) the riuht of movement and free choice of ahodc (Preizii-
i^ij^keit); (2) the rij^ht of eniii;ration (Answanderunirsreclit) ;
('■]) the rii//if of i'luK'xuiij <i eii//ini/ ar Iruih; (Preie Wahl von
15eruf und (Jewerbe) ; and this tiiird right, we are infcjrnied,
was ji'iven to the; Prussians by the edict of October, 1807.
The same is said of the lirst of the rinhts which go to make
up the second tith;; nanudy, free right to the ac4ui;<ition
and possession of pi'opcty (Prcies Recht zum Erwerl)e und
Uesitze des Kiglienthums).

I proceed to give the text of this edict, the vast impor-
tance of which will liave l)y this time i)ecome clear. Tho
less ir-; rtant sections are pi-inted in a smaller type, and of
§§ III, and v., as ])urely technical, only the heading is

Edict concern'ni'j the facU'ttattoii of posses fiio7i and the free use of
hmdrd projxrfij, as irell as tlie personal relations of the inhabi-
tants of the count nj.

AVk, Frederick Williiiin, hy the grace of (lOil Kinp; of Prussia, &c., &c.,
JIakc known lu'irhv ami j;ive to uiulerstand. Since tiie iH'jiinniiif; of the
peace We liave been liefore all things occupied with tho care for the de-
pressed condition of Our faithful suhjects, and the sjieodiest restoration
and "greatest ini|irovement of it. We have herein considertd that in the
universal need it ])asses tiie means at Our command to furnish hel[) to each
indiviihial, an<l yet We could not attain the oliject ; and it accords e(|ually
with the inii)erative demands of justii'c and with tlie principles of a proper
national economy, to remove all the hindrances which hitherto prevented
the individual from iittainin'^ the ])rosperity which, according to tlu!
measure of his powers, he was capable of reachin;^ ; further, \\'e have
considered that the existing restrictions, partly on the possession and en-
joyment of landed property, partly on the personal condition of tlie agri-
cultural laborer, specially tliwart Our benevolent purpose? and disable a
great force which might be applied to the restoration of cultivation, the

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ECONOMIC HISTORY.

former by their prejudicial influence on the value of landed property and
the credit of the proprietor, the latter by diminishing the value of labor.
\\c j)urpo8e, therefore, to reduce both within the limits required by the
common well-being, and accordingly ordain as follows : —

§ I. Freedom of Exchange in Land.

Every inhabitant of our States is competent, without any limita-
tion on the part of the State, to possess either as property or pledge
landed estates of every kind : the nobleman therefore to possess not
only noble but also non-noble, citizen, and peasant lands of every
kind, and tlie citizen and peasant to possess not only citizen, peas-
ant, and other non-noble, but also noble, pieces of land, without
either the one or the otlier needing any special permission for any
acquisition of land whatever, although, henceforward as before,
each change of possession must be announced to the authorities.

§ II. Free Choice of Occupation.

Every noble is henceforth permitted without any derogation from
his position, to exercise citizen occupations; and every citizen or
peasant is allowed to pass from the peasant into the citizen class,
or from the citizen into the peasant class.

§ III. How far a legal right of Pi-e-emption and a First Claim still
exist.

§ IV. Division of Lands.

Owners of Estates and Lands of all kinds, in themselves alienable either
in Town or Country, are allowed, after due notice given to the provincial
authority, with reservation of the rights of Direct Creditors and of those
who have the right of pre-emption (§ IIL), to separate the principal estate
and its parts, and in general to alienate piecemeal. In the same w.ay Co-
proprietors may divide among them property owned in common.

§ V. Granting of Estates under Leases for a Long Term

§ VI. Extinction and Consolidation of Peasant Holdings.

When a landed proprietor believes himself unable to restore or
keep up the several peasant holdings existing on an estate which
are not held by a hereditary tenure, whether of a long lease or of
copyhold, he is required to give information to the government of
the province, with the sanction of which the consolidation, either
of several holdings into a single peasant estate, or with demesne
land, may be allowed as soon as hereditary serfdom shall have
ceased to exist on the estate. Tlie provincial Authorities will be
provided with a special instruction to meet these cases.

§ VII. If, on the other hand, the peasant tenures are hered-
itary, whether of long lease or of copyhold, the consolidation or

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EDICTS OF STEIN AND HARDENBERG.

other alteration of the condition of the lands in question, is not
admissible until the right of the actual possessor is extinguished,
whether by the purchase of it by the lord or in some other legal
way. In this case the regulations of § VI. also apply.

§ VIII. Indebtedness of Feudal and Entailed Estates in consequence
of the Ravages of War.

Every possessor of feudal or entailed property is empowered to raise the
suras required to replace the losses caused by war, by mortgaging the sub-
stance of the Estates themselves, as well as the revenues of, them, provided
the application of the money'is attested by the Administrator (Landrath)
of the Circle or the Direction of the Department. At the end of three
years from the contracting of the debt the possessor and his successor are
bound to pay off at least the fifteenth part of the capital itself.

§ IX. Extinction of Feudal Relations, Family Settlements, and En-
tails, by Family Resolution.

Every feudal connection not subject to a Chief Proprietor, every family
settlement and entail may be altered at pleasure or entirely abolished by a
Family Resolution, as is already enacted with reference to tiie East Prus-
sian Fiefs (except those of Ermeland) in the East Prussian Provincial Law,
Appendix 36.

§ X. Abolition of Villainage.

From the date of this Ordinance no new relation of villainage,
whether by birth, or marriage, or acquisition of a holding, or by
contract, can come into existence.

§ XI. With the publication of the present Ordinance the exist-
ing condition of villainage of those villains with their wives and
children who possess their peasant-holdings by hereditary tenures
of whatever kind ceases entirely both with its rights and duties.

§ XII. From Martinmas, 1810, ceases all villainage in Our
entire States. From Martinmas, 1810, there shall be only free per-
sons, as this is already the case upon the Domains in all Our prov-
inces; free persons, however, still subject, as a matter of course, to
all the obligations which bind them as free persons by virtue of
the possession of an estate or by virtue of r, special contract.

To this declaration of Our royal Will every man whom it may concern,
and in particular Our provincial and other governments, are exactly and
loyally to conform themselves, and the present Ordinance is to be made
universally known.

Authentically, under Our royal Signature. Given at Memel, Oct. 9th,
1807.

Friedrich Wiliielm,
Schrotter, Stein, Schrotter II.

),S|

\Ma

ECONOMIC HISTORY.

Ilk'

It" ■!

i '

1%?'

The elder Schrotter was at this time minister for the prov-
ince of Prussia, and he with his brother was entrusted with
the task of publishing the Ordinance in the province where
it had received the king's signature. It is for this reason
that their names are affixed to it along with Stein's.

That threefold character of the edict which was pointed
out above will appear very visibly by observing the three
groups of sections, which on account of their especial impor-
tance have been printed in large type. The abolition of caste
both in land and in persons is accomplished in the first two
sections; the abolition of villainage in the last three, which
it is evident might as well have composed a separate edict.
Sections six and seven arc introduced to prevent the system
of free trade in land from bearing too hard on the peasant
and making the proprietorship of land a monopoly of the
richer classes. ...

THE AGRARIAN LEGISLATION OF HARDENBERG.

m '•

I'!

From Morieu's " The Agrarian Legislation of Prussia during
THE present Century," in "Systems of Land Tenure in vari-
ous Countries." * pp. 306-316.

1811.

The edict of 1807, great and incisive as had been its
operation, Avas of a negative kind. It removed disabili-
ties, undid the shackles which bound the peasant to the
glebe, allowed such rights as existed to be used freely, and
pulled down the walls which separated from each other the
different classes of society. But it created no new forms of
property ;, it proclaimed freedom of exchange, but it did not
provide the title-deeds required as the first condition of ex-
change. Peasants' land could now be held indiscriminately
by all the citizens of the State; but it was still held under
the old forms of tenure; there were still two "dominia. "
The lord was still owner of the peasants' land, but had no

1 London : Macmillan & Co., 1870.

:!■■

EDICTS OF STEIN AND HARDENBERG.

right to its possession. The peasant was free but was not
master of his hibor.

The legislation of 1811 stepped in to remedy this state of
things, and applying to the monarchy generally the princi-
ples which during the last three years had proved in the
highest degree successful when applied to the State domains,
it set itself to substitute allodial ownership for feudal ten-
ure. Its work was in the highest degree positive.

The legislation of 1811 mainly consists of two great
edicts, both bearing the same date, that of the 14th of Sep-
tember,— the one entitled "Edict for the Regulation of the
Ilelations between the Lords of the Manor and their Peas-
ants ; " the other, " Edict for the better Cultivation of the
Land."

The first is concerned with the creation of new title-deeds
for the peasant holders, and with the commutation of the
services rendered in virtue of the old title-deeds.

The second surveys the whole field of agrarian reform, and
introduces general measures of amelioration.

The preamble to the " Edict for the Regulation of the Re-
lations l)etween Landlord and Tenant " recites how " We,
Frederick William, by the grace of God, King of Prussia, hav-
ing convinced ourselves, both by personal experience in our
o\vn domains, and by that of many lords of manors, of the
great advantages which have accrued Ixjfh to the lord and to
the peasant by the transformation of peasant holdings into
property, and the commutation of the services and dues on
the basis of a fair indemnity, and having consulted, in re-
gard to this weighty matter, experienced farmers, and skilled
persons of all kinds belonging to all our provinces, and to
all ranks of our subjects, ordain and decree as follows:"

The edict then branches off into two main parts, — the
first dealing with peasant holdings in which the tenant has
hereditary rights; the second with holdings in which the
tenant has no hereditary rights.

•I

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-4

:i in-

■■ii*

100

ECONOMIC HISTORY.

PART I,

All tenants of hereditary holdings, that is, holdings which
are inherited according to the common law, or in which the
lord of the manor is bound to select as tenant one or other
of the heirs of the last tenant, whatever the size of the holding,
shall by the present edict become the proprietors of their
holdings, after paying to the landlord the indemnity fixed
hy this edict. On the other hand, all claims of the peasant
on the manor, for the keeping in repair of his farm-buildings,
etc., shall cease.

We desire that landlords and tenants should of themselves
come to terms of agreement, and give them two years from
the date of the edict to do so. If within that time the work
is not done, the State will undertake it.

The rights to be commuted may be thus generally classed : —

I. Rights of the landlord.

1. Right of ownership ("dominium directum ").

2. Claim to services.

3. Dues in money and kind.

4. Dead stock of the farms.

5. Easements or servitudes on the land held.

II. Rights of the tenant. ^

1. Claim to assistance in case of misfortune.

2. Right to gather wood and other forest rights in the

forest of the manor.

3. Claim upon the landlord for repairs of buildings.

4. Claim upon the landlord in case tenant is unable to

pay public taxes.

5. Pasturage rights on demesne lands or forests.

Of these different rights only a fcAv, namely, the dues paid
in kind or money, the dead stock and the servitudes, are capa-

1 It is worthy of remark that the tenant's " dominium utile," or right of pos-
session, is not recorded as a set-off against tlie dominium directum of the lord
of the manor. The fact is, tliis riglit of possession is something so self-under-
stood, that it never seems present to the mind of the legislator. The " domin-
ium directum " is something quite different, for it represents an aggregation of
all kinds of different rights. These rights he has to sell to the peasant, and
the peasant buys them with the only thing he possesses, viz., the land.

EDICTS OF STEIN AND IIAItDENBERG.

101

pos-
lord
Kler-
niin-
)n of
and

ble of exact valuation. The others can only be approxi-
mately estimated.

To obtain, therefore, a solid foundation for the work of
commutation, and not to render it nugatoi-y by difficulties im-
possible to bo overcome, we deem it necessary to lay down
certain rules for arriving at this estimate, and to deduce
those rules from the general principles laid down by the laws
of the State. These principles are : —

1. That in the case of hereditary holdings, neither the

services nor the dues can, under any circumstances,
be raised.

2. That they must, on the contrary, be lowered if the holder

cannot subsist at their actual rate.

3. That the holding must be maintained in a condition

which will enable it to pay its dues to the State.

From these three constitutional principles, as well as
from the geneval principles of public law, it follows that the
right of the State, both to ordinary and extraordinary taxes,
takes precedence of every other right, and that the services
to the manor are limited by the obligation which the latter
is under to leave the tenant sufficient means and to pay
taxes.

We consider that both these conditions are fulfilled when
the sum-total of the dues and services rendered to the
manor do not exceed one-third of the total revenue de-
rived by an hereditary tenant from his holding. Therefore,
with the exceptions to be hereafter descriLicd, the rule shall
obtain:

That in the case of hereditary holdings the lords of the
manor shall be indemnified for their rights of ownership in
the holding, and for the ordinary services and dues attached
to the holding, when the tenants shall have surrendered one
third portion of all the lands held by them, and shall have
renounced their claims to all extraordinary assistance, as
well as to the dead stock, to repairs, and to the payment on
their behalf of the dues to the State when incapable of
doing so. .

','■:*

^*, >

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102

ECONOMIC HI STORY.

si'

1 3'

if.

The edict then goes on to lay down the rules to be ob-
served in a})j)lying this principle.

These rules presuppose the existence of the agricultural
eonununity referred to in the earlier part of this paper,
namely, equal allotments in an arable mar'*' ; the division
of the arable mark in which these several allotments arc
situated into three " Commonable Fields, " or " Fluren ; " a
common system of cultivation obligatory on the community,
in order to secure the community's right of pasture on
the fallow and stubbles; and common rights of property in
common lands occupied "de indiviso," mostly pasture lands,
woods, etc., but sometimes also in arable common lands.
As the rule, the lord of the manor is to acquire possession
of one of the three Fields, or of one third portion of each
held, and of one third portion of the common lands.

Wc have no space to enter into the details of the ar-
rangements which provide for the cases differing from
these.

As noted above, the lords and the peasants are left free to
make what arrangements they j)leasc, as long as the propor-
tion of one third is maintained; that is, the indemnity may
take the form of a payment of capital, or of a corn or money
rent. Yet the rule to be followed (and a departure from this
rule must have a distinct motive) is that the indemnity must
be paid in land where the holdings are over fifty "morgen,"i
but in the shape of a corn-rent where the holdings are under
that size.

As a matter of practical convenience to both parties, the
absolute separation of proprietary rights suffers some few
exceptions; the first and most important is that the lord
retains the right of pasturing the manorial sheep on two
thirds of the fallow and stubbles of the arable mark;^ the
peasant also continues to enjoy the right of collecting as
much firewood in the demesne as he requires for his per-

> The Prussian acre is about equal to two thirds of an English acre, an
hundred English acres being equal to 158^ Prussian acres.

''■ Compare Rogers' " History of Agriculture and Prices in England," vol. i.
p. 31.

EDICTS OF STEIN AND HARDENIiEllG.

103

sonal use. For this right and for the acquisition oi his house
and farm-buildings as well as his garden-plot (his allot-
ment in the mark of the township) he continues to render
services to the lord of the manor at times (for example, har-
vest) when extra hands are wanted. These services are
however restricted to a maximum of ten days of team-
work, and ten days of hand-labor for a team-peasant, and
ten days' man's-work and ten days' womau's-work for a hand
peasant.

Several paragraphs of the edict are taken up with provi-
sions tor so aj)portioning the burdens on the holdings that
nothing shall prevent their dismemberment, and being sold
or exchanged in single parcels. Among these provisions is
one preventing the peasant from mortgaging his estate above
one fourth of its value. Where corn-rents are not paid
punctually the lord of the manor can exact services instead.

PART II.

The class of holdings treated of in the second part are
those held at will, or for a term of years or for life. In
these cases the landlord gets an indenmity of one half of the
holdings under much the same conditions as in the case of
the hereditary holdings. When the conditions differ they
do so in favor of the lord of the manor.

By the edict, of which the above arc the main provisions,
entirely new conditions of land occupation were inaugurated,
and corresponding changes became necessary in the other
branches of the agricultural system.

The "Edict for the better Cultivation of the Land," pub-
lished on the same day, had these changes in view.

Fully to understand what these changes were, and what
was the nature of the agricultural reforms to l)e introduced
into Prussia, the picture of the peasant community as a mi-
crocosmic reproduction of the old community of the mark
must be kept in mind. The ])easant occupier's tenement is
situated apart from his land in a village or township; his
estate is made up of a number of single lots or parcels
(Grundstiickc) distributed over the three main divisions or

■ 1 H .

■' 'H

'I-'

,-ns

104

ECONOMIC HISTORY.

l\\\i

h t

i V

Fields (Flurcn, Campi) into which the arable mark is di-
vided. Often intermixed with these peasant parcels, and
subject to the same obligatory cultivation, are parcels of de-
mesne lands. In addition to his individual rights of posses-
sion in the arable mark, controlled by the common rights of
pasturage on the stubbles, he has common rights in the
common pasture, which common rights he shares with the
lord of the manor. Besides these rights he has rights of
pasture, etc., in the forest lands of the demesne proper. T)' ;
sum total of these individual and common rights make up
the peasant holding, correlative to which are the services to
be rendered to the manor. As long as these services were
calculated on the sum total of the rights enjoyed by the
tenant, it was of paramount importance that no dismember-
ment should take place. Consequently, even in the case of
freeholders, none but exceptional dismemberments were
allowed.

Apart then from the relations between landlord and ten-
ant, or rather inseparably implicated in those relations, and
therefore requiring simultaneous regulation are the common
rights of the peasants themselves, and the impediments
which these common rights throw in the way of individual
cultivation, and the free use of the rights of property to be
granted.

The ruling idea of the "Edict for the better Cultivation of
the Land," as of its predecessor, and indeed of the whole
legislation connected with the names of Stein and Harden-
berg, is to enfranchise not the owner of land merely, but
likewise the land owned by him, and to remove every im-
pediment in the way of the soil finding its way out of hands
less able to cultivate it into those better able to cultivate
it. Conformably to these principles, the edict in question,
in the first place, removes all restrictions still existing in
the way of free exchange in land, in so far as private rights
(namely, rights arising from entails, servitudes, etc.) are
not affected. By this proviso the restrictions contained in
paragraphs six and seven of the edict of 1807 were removed,
the difference between tenant's lands and demesne land

EDICTS OF STEIN AND HARDENBERG.

105

ceased, and the lord of the manor could freely acquire the
i'ornior without the previous sanction of the State. On the
other hand, by the perfect liberty granted for dismemberment
(the maxim being laid down that it was better both for the
cultivator and for the land cultivated that the former should
administer a small unencumbered estate rather than a hirge
encumbered one), the advocates of the "petite culture" were
conciliated. Tlie passage in the edict is worth quoting in ex-
tenso, as it contains very explicitly what we have described as
the ruling idea of the legislation we are discussing; an idea,
it is true, which only attained its full development forty
years later, but which, nevertheless, in spite of the obstacles
thrown in its way by the successors of Stein and Ilardcnbcrg,
took sufhcient root even at this early period to enable us to
judge of its fruits. It is the idea of otvnership versus ten-
ancij, and of absolute freedom of exchange and disposal;
and special importance attaches to it as representing princi-
ples opposed both to the French system of compulsory divi-
sion and to the English system of tenancy, primogeniture,
and strict settlement. The passage we refer to runs on as
follows: ^

"The proprietor shall henceforth (excepting always where the
rights of tliird parties Jire concerned) be at liberty to increase his
estate, or diminish it by buying or selling, as may seem good to
him. He can leave the appurtenances thereof (the * grund*
stiicke,' or parcels distributed in the three Fields) to one heir or to
many, as he pleases. He may exchange them or give them away,
or dispose of them in any and every legal way, without requiring
any authorization for such changes.

"This unlimited right of disposal has great and manifold advan-
tages. It affords the safest and best means for preserving the pro-
prietor from debt, and for keeping alive in him a lasting and lively
interest in the improvement of his estate, and it raises the general
standard of cultivation.

"Tlie first of these results is obtained by the power it gives to
the actual proprietor, or to an heir upon entering on his estJite, to
sell such portions as will enable him to provide for his heirs or co-
heirs, as the case may be, or for any other extraordinary emer-

■'m\

. M

106

ECONOMl C ins TOR 1'.

.. ^

gency, leaving what roinaius of the property unencumbered with
mortgji^cs or Hettleinents.

"Tile interest in tlie estate is ke])t alive by tiie freedom left to
l)arents to divide their estate among their children as they think
fit, knowing that the benefit of every improvement will be reaped
by them.

" Lastly tlie higher standard of cultivation will be secured by
land — which in the hands of a proprietor without means would
necessarily deteriorate — getting into the hands of a proprietor
with means, and therefore able to make the best of it. Without
this power of selling portions of his property, the proprietor is apt
to sink deeper and deeper into debt, and In pro])()rtion as he does
so the soil Is deprived of its strength. I'y selling, on the other
hand, he becomes free of debt and free of care, and obtains tlie
means of i)roperly cultivating what remains to him. Hy this un-
hindered movement in the possession of laml, the whole of the
soil remains in a good state of cultivation; and this point once
attained, increased industry and exertion will make it possible to
attain a yet higher [)oint; whereas a backward movement, except
as the result of extraordinary miscliances from without, is not to
be apprehended.

"I)ut there is yet another advantage springing from this power
of piecemeal alienation which is well worthy of attention, and
which fills our paternal heart with especial gladness. It gives,
namely, an opportunity to the so-called small folk (kleine Leute),
cottiers, gardeners, boothmen, and day laborers, to ac(piire landed
property, and little by little to increase it. The pros[iect of such
acquisition will render this numerous and useful class of our sub-
jects industrious, orderly, and saving, inasmuch as thus only will
they be enabled to obtain the means necessary to tlie ])urchase of
land. ]\Iany of them will be able to work their way u])wards, and
to acquire jiropcrtj', and to make themselves remarkable for their
industr}'. The State will acquire a new and valuable class of in-
dustrious proprietors; by the endeavor to become such, agriculture
will obtain new hands, and by increased voluntary exertion, more
work out of the old ones."

The edict next exacts as a supplementary measure to the
"Edict for the Regulation of the Relations between Lords
of the Manor and their Peasants," that in the case of heredi-

EDICTS OF STlilN AND llARDENUEna.

107

tary IcasL'liolds (Krbpiioliti') Iho services and fmos amy bo
comiuiitcd into ix'nt-cliar,ir<'s, andtla-bv leut-cluirges redeemed
by a capital payment ealeiilaled at lour per ci'iit.

It next proceeds to deal with the common rlijhts of tlic peas-
ants and of tlie lords; and hero it fairly owns its inability to
carry out the prineiitle of the free owner on the free soil.
Tlio great mass of the peasant holdings are disjiersed in
small, ()j)en, "commonable," int((rmi.\ed fields over the arc!U
of the arable mark; and the coinmoii rights of pasturage over
the arable mark necessarily chain down the individual culti-
vator to the modes of cultivation compatil)le with these com-
mon I'ights. To disentangle this complicated wel) must be
the work of time ami of special legislation. The edict there-
fore amiounces a future law on the subject, and for the pres-
ent conlines itself to making jtrovisions by which one third
part of such " commonal}le " fields can be freed from the com-
mon rights of pasturage and placed at the absolute disposal
of individual i)roprietors. The rights of pasturage in the
forest lands of the manor are more easily dis|)osed of. The
advantageous terms on which full rights of property are
obtainable by the peasants render it i)ossiblc to make strin-
gent regulations in regard to the exercise of those rights,
in the interest of the landlord and for the preservation of
the forests.

To guard against the possibility of a return to the double
ownershij) system, the edict lays down the rule that though a
landed proprietor may settle laborers on his estate, and pay
for their services in land, sm^h contracts are never to be
made for more than twelve years.

The edict concludes by expressing it to be his Majesty's
wish and will that agricultural societies should be formed in
every ]»art of the country for the purpose of collecting and
diffusing knowledge. Tbe ex))enses of these societies and
the salaries of their secretaries will be ))aid out of the
exchequer, and the societies themselves will be placed in
communication with a central oftice in the capital, whoso
business it will also be to establish and maintain model
farms in various parts of the country for the diffusion of

'■•is!

■ r*s
'5 Tftj

t-';T

'*1

108

ECONOMIC HISTORY.

agricultural knowlidjio. JJesidoa this more or loss unoflicial
nmchinory, [(rovisiuii is muilc tor olliciul aj^riciiltiinil Ixianls
to l)e i'stablisliL'ii in cacli district; but these arrangements,
having Ijcen suporscdod by subaequcut legiBlutiou need not
be referred to.

Tho two edicts of the 14th of September, 1811, may be
considered as the culminating point of the legislation which
goes by the name of iStein and Ihirdcuberg.

h,i

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m *

F 1 ; is ,

THE OIWERS JN COUNCIL.

109

THE ORPERS IN COUNCIL.

Fkom Levi's IIistouy ok Bkitisii Cummekck' ('Jded.), ri-. 101-113.

IIP] political horizon was ominously dark at the com-
nH-nccnicnt of tlu* ninotocnth century. While frricv-
ously siilTcrinjj; from the hiujh prices of corn and provisions

th<

den of

contest already suHiciently
prohjnj^ed, Eni^lanil was threatened by tho renewal of an-
other armed neutrality on the part of the Northern powers, —
a neutrality l)ascd on a new code of maritime law then
deemed utterly inconsistent with the rijrhts of this country.
The Northern powers wished to ])roclaim that free ships
should make free goods ; hut En<^land was determined that
the trade of tho enemy should not he carried on by neutrals.
The Northern powers asserted that only contraband goods
should be excluded from the trade of neutrjils, and th(>sc of
certain definite and known articles. Enghmd did not wish
tho enemy to obtain timber, hemp, and other articles, which,
though not contraband of war, arc still essential for warfare.
The Northern powers declared that no blockade should bo
held valid unless real. England had already assumed tho
right to treat whole coasts as blockaded in order to prevent
the enemy receiving supplies from any quarter. And when
the Northern powers adde(l that a merchant vessel accom|)a-
nied and protected by a Ixdligcrent ship ought to I)e safe from
the right of search, England was not prc^pared to recognize
the authority of such ships, and would place no limit to the
action of her cruisers. When, therefore, Russia, Denmark,
and Sweden entered into a convention to enforce tho princi-

■M

London : John Murray, 1880.

I In
lit-.

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110

ECONOMIC HISTORY.

pics of the armed neutrality, and in pursuance of the same
Russia caused an embargo to be laid on all British vessels in
her ports, the British Government, ill-disposed to bear with
such provocation, issued a proclamation on Jan. 14, 1801,
authorizing reprisals, and laying an embargo on all Russian,
Swedish, and Danish vessels in British ports. What fol-
lowed IT well known, and with the battle of Copenhagen
the Northern confederacy was completely dissolved. By this
time Mr. Pitt had given in his resignation, and a change of
government took place, which led to a change of jiolicy
towards France, and to negotiations which ended with the
conclusion of the treaty of Amicus.*

But, alas ! from whatever cause it was, that peace was of
short duration, and more than ever the patriotic spirit of the
people was evoked to defend British soil against Britain's
inveterate enemies.^ From class to class the national enthu-
siasm spread and increased, and even the merchants, setting
aside their books and business, issued v declaration promis-
ing in a solemn manner to use every exertion to rouse the
spirit and to assist the resources of the kingdom; to be ready
with their services of every sort and on every occasion in its
defence, and rather to perish altogether than live to see the
honor of the British name tarnished, or that sublime inheri-
tance of greatness, glory, and liberty destroyed, Avhich de-
scended to them from their forefathers, and which they Avere
determined to transmit to their posterity. Again was Mr.
Pitt called to be prime minister, as the only man who could
really be trusted in times of so much anxiety and peril.
And then it was that that continental system was inaugu-
rated which made of oceans and seas one vast battle-field of
strife and bloodshed.

i''ully to understand the policy of this country as regards

1 Peace was ratified on October 10, 1801; and the treaty of Amiens was
concluded Marcli 2o, 1802.

'■^ On May 10, 1803, an order in council was made, issuing letters of marque
and reprisals against France, and another laying an onihargo on all ships be-
longing to tlie French and Batavian republics. Reprisals against Spain were
ordered Deceniber 19, 1805; against Prussia on May 14, 1806; and against
Russia on December 18, 1807.

(iff

i ■

THE ORDERS IN COUNCIL.

Ill

these orders in council, we must briefly retrace our steps by-
examining tlie measures talcen in previous wars. During the
Seven Years' War, which ended in 1763, France, hemmed in
on all sides by England and hindered by the British naval
force from carrying on any trade with her West India colo-
nies, adopted the plan of relaxing her colonial monopoly, and
allowing neutral ships to carry the produce of those islands
to French or foreign ports in Europe. The produce being
thus carried really or ostensibly on neutral account, it was
assumed that no danger of capture could be incurred. But
the prize courts of England condemned such vessels as were
captured while engaged in the trade, and the rule was then
adopted, called the rule of 1756, ^ that a neutral has no right
to deliver a belligerent from the pressure of his enemy's
hostilities by trading Avltii his colonics in time of war in a
way tliat was prohil)ited in time of peace. As Sir William
Scott said, "The general rule is that the neutral has a right
to carry on in time of war his accustomed trade to the
utmost extent of which that accustomed trade is capable.
Very different is the case of a trade which the neutral has
never possessed ; which he holds by no title of use and habit
in time of peace; and which, in fact, he can obtain in war
by no other title than by the success of the one belligerent
against the other, and at the expense of that very belligerent
under whose success he sets up his title." During the
American war this principle did not come practically into
action, because, although then also the French government
opened the ports of her West India islands to the ships of
neutral powers, it had the wisdom to do so before hostilities
were commenced, and not after.

In accordance with these iirinoiples, when the war of the
French Revolution commenced, instructions were given on

' The rule of 1750 had been acted upon even by France on previous ocra-
sions. See Note 1, On .he practice of the Rritish Prize Courts with regard to
the Colonial trade of the Enemy durii^g tlie American War, in 0 Rob Rep.
App. ; and Consid^rathms siir /'Admission des Narires neutres aux Colonies fran-
^oisfs de. I'Am&ique en Terns de. Guerre, p. 13, 1779; and see the Wiihelmina,
4 Hob. Rep., p. 4; and the Inimanuel Tudor —Leading 'Cnses of Mercantile
Law, p 814.

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ECONOMIC HISTORY.

Nov. 6, 1793, to the commanders of British ships of war and
privateers, ordering them "to stop and detain for lawful
adjudication all vessels laden with goods, the produce of any
French colony, or carrying provisions or other supplies for
the use of any such colony." And this order was the more
necessary from the fact that American ships were crowding
the ports of the French West Indies, where the flag of the
Unit.^d States was made to protect the property of the French
planters. Great numbers of ships under American colors
were thus taken in the West Indies and condemned, the
fraudulent pretences of neutral pi-opcrty in the cargoes being
too gross to be misunderstood. Complaints were, however,
made of the hardshii)s of this practice on the bona fide
American trader, and in January, 1794, the instructions
■were so far amended that the direction was to seize "such
vessels as were laden with goods the produce of the French
West India Islands, and comimj directly from any ports of
the said inlands to Uurope." This rule continued in force
till 1798, when again it was relaxed by ordering that vessels
should be seized " laden with the produce of any island or
settlement of France, Spain, or Holland, and coming di-
rectly from any port of the said island or settlement to any
port in Europe, not being a port of this kingdom, or of the
country to which the vessel, being neutral, should belong,"
European neutrals M'cre thus permitted to bring the produce
of the hostile colonies from thence to ports of their own coun-
tries; and European or American neutral ships might carry
such produce direct to England. But when the war was re-
sumed in 1803 the rule of 1798 was again put in force, and
instructions were given "not to seize any neutral vessels
which should be foimd carrying on trade directly between
the colonics of the enemy and the neutral country to which
the vessel belonged, and laden with property of the inhabi-
tants of such neutral country, provided that such neutral
vessel should not be supplying nor should have on the out-
ward voyage supplied the enemy with any articles of contrar
band of war, and should not be trading with any blockaded
ports. "

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By thus allowing, however, neutrals to trade safely to and
from neutral ports, means were opened to them to clear out
for a neutral port, and under cover of that pretended desti-
nation to make a direct voyage from the colony to the par-
ent State, or really to proceed to some neutral country,
and thence re-export the cargo in the same or a different
bottom to whichever European market, neutral or hostile,
they might prefer. The former, on an assumed voyage to
the parent State, being the shortest and most convenient
method, was chiefly adopted by tlie Dutch on their homeward
voyages, because a pretended destination for Prussian, Swed-
ish, or Danish ports in the North Sea or the Baltic was a
plausible mask, even in the very closest approach the ship
might make to the Dutch coast down to the moment of her
slipping into port. The latter method, or the stopping at an
intermediate neutral country was commonly preferred by the
Spaniards and French in bringing home their colonial pro-
duce, because no i)retcnded neutral destination could be given
that would consist with the geograijhical position and course
of a ship coming directly from the AVest Indies, if met with
near the end of her voyage in the latitude of their principal
ports. The American flag in particular was a cover that
could scarcely ever be adapted to the former method of elud-
ing our hostilities, but it was found peculiarly convenient in
the latter. Such is the i)osition of the United States, and
such was the effect of the trade-winds that European vessels,
homeward bound from the West Indies, could touch at their
ports with very little inc(nivenience or delay; and such was
also the case, though in a less degree with regard to vessels
coming from the remotest jjarts of South America or the
East Indies. The passage from the Gulf of Mexico, espe-
cially, runs so close along the Xorth American shore that
shij)s bound from the Ilavannuh, from Vera Cruz, and other
great Spanish ports bordering on that gulf to Euroj)0 could
touch at certain ports in the United States with scarcely
any deviation. On an outward voyage to the East and West
Indies the proper course would be more to the southward
than would well consist with touching on North America;

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ECONOMIC HISTORY.

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yet the deviation for that purpose was not a very formidable
inconvenience. From these causes the protection given by
the American flag to the intercourse between our European
enemies and their colonies was chiefly in the way of a double
voyage, in which America was the half-way house or central
point of conmmnication. The fabrics and commodities of
France, Spain, and Holland were brought under American
colors to ports in the United States, and from thence re-
exported under the same flag for the supply of the hostile
colonics. Again, the produce of these colonics was brought
in a like manner to the American ports and thence reshipped
to Euroi)e. But the Americans went still farther. The
ports of this kingdom having been constituted by the royal
instructions of 1798, legitimate places of destination for
neutrals coming with cargoes of produce directly from the
hostile colonies, the American merchants made a pretended
destination to British ports a convenient cover for a voyage
from the hostile colonies to Europe, which their flag could
not otherwise give, and thus rivalled the neutrals of the old
world in this method of protecting the West India trade of
the enemy, while they nearly engrossed the other. As the
war advanced, after the Peace of Amiens, the neutrals be-
came bolder and more aggressive. American ships were
constantly ari'iving at Dutch and French ports with sugar,
coffee, and other productions of the French and Spanish
West Indies. And East India goods were imported by theru
into Sj)ain, Holland, and France.

By these and other means Hamburgh, Altona, Emden,
Gottenbiirgh, Copenhagen, Lisbon, and other neutral nuir-
kets were glutted with the produce of the West Indies and
the fabrics of the East, brought from the prosperous colonies
of powers hostile to this country. By the rivers and canals
of (Jermany and Flanders these were floated into the ware-
houses of the enemy or circulated for the supply of his cus-
tomers in neutral countries. He rivalled the British planter
and merchant throughout the continent of Europe, and in
all ports of the Mediterranean, and even supi)lanted the
manufacturers of Manchester, Birmingham, and Yorkshire,

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THE ORDERS IN COUNCIL.

115

and by these means the hostile colonies derived benefit, and
not inconvenience, from the enmity of Great Britain. What
moreover, especially injured the commerce of this country
was the increase in the cost of imi)ortation into this country
from the British colonics, from freight, insurance, and other
charges, which taken together were as much as, if not supe-
rior to, those to which the enemy was subjected in his covert
and circuitous trade. It was a general complaint, therefore,
that the enemy carried on colonial commerce imder the
neutral flag cheaply, as well as safely; that he was enabled
not only to elude our hostilities, but to rival our mer-
chants and planters in the European markets; that by the
same means the hostile treasuries were filled with a copious
stream of revenue; and that by this licentious use of the
neutral flag, the enemy was enabled to employ his whole
military marine for purposes of offensive war, without being
obliged to maintain a squadron or a ship for the defence of
his cohmial ports. It was, moreover, contended that, since
neutral States have no right, but through our own gratuitous
concession, to carry on the colonial trade of the enemy, we
might after a reasonable notice withdraw that ruinous in-
dulgence; that the neutral did not require such principles;
that the comparative cheapness of his navigation gives him
in every open market a decisive advantage; that in the com-
merce of other neutral countries he could not fail to sup-
plant the belligerent; and that he obtained an increase of
trade by purchasing from one belligerent and selling to his
enemies the merchandise for which, in time of peace, they
depended on each other.

Such complaints made against neutral States found a pow-
erful echo by the publication of a work entitled " War in
Disguise and the Frauds of the Neutnl Flag," supposed 1o
have been written by Mr. James Stephen, the real author of
the orders in council. The British government did not see
its way at once to proceed in the direction of prohibiting to
neutral ships the colonial trade, which they had enjoyed for
a considerable time ; but the first stop was taken to paralyze
the resources of the enem}', and to restrict the trade of neu-

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ECONOMIC HISTORY.

trals bj- the issue of an order in council in May, 1806, de-
claring that all the coasts, ports, and rivers from the Elbe to
Brest should be considered blockaded, though the only por-
tion of those coasts rigorously blockaded was that included
between Ostcnd and the mouth of the Seine, in the ports of
which preparations were made for the invasion of England.
The northern ports of Germany and Holland were left partly
open, and the navigation of the Baltic altogether free.

Napoleon, then in the zenith of his power, saw in this order
in council a fresh act of wantonness, and iic nict it by the is-
sue of the Berlin decree of Nov. 21, 1806. In that document,
remarkable for its boldness and vigor, Napoleon charged Ii^ng-
land with having set at naught the dictates of international
law, with having made prisoners-of-Avar of private individu-
als, and with having taken the crews out of merchant ships.
He charged this country with having ca})tured private prop-
erty at sea, extended to commercial ports the restrictions
of blockade applicable only to fortified places, declared as
blockaded places which were not invested by naval forces,
and abused the right of blockade in order to benefit her own
trade at the expense of the commerce of continental States.
He asserted the right of combating the enemy with the same
arms used against himself, especially when such enemy ig-
nored all ideas of justice, and every liberal sentiment which
civilization imposes. He announced his resolution to apply
to England the same usages which she had established in her
maritime legislation. He laid down the principles which
France was resolved to act upon until England should recog-
nize that the rights of war are the same on land as on sea,
that such rights should not be extended either against pri-
vate property or against persons not belonging to the mili-
tary or naval forces, and that the right of blockade should
be restricted to fortified places truly invested by sufficient
forces. And upon these premises the decree ordered : 1st,
that the British islands should be declared in a state of
bloci^adc; 2d, that all commerce and correspondence with
Trii 'Jri^iah islands should be prohibited, and that letters
addriri: .od to England or Englishmen written in the English

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117

lanj^uagc should be detained and taken ; 3d, that every Brit-
ish subject found in a country occupied by French troops or
by those of their allies should be made a prisoner-of-war;
4th, that all merchandise and property belonginjr to British
subjects should be deemed a good prize; 5th, that all com-
merce in English merchandise should be prohibited, and
that all merchandise belonging to England or her colonies,
and of British manufacture, should be deemed a good prize ;
and Gth, that no vessel coming direct from England or her
colonies be allowed to enter any French port or any port
subject to French authority ; and that every vessel which, by
means of a false declaration, should evade such regulations
should at once be captured.

The British government lost no time in retaliating against
France for so bold a course; and on Jan. 7, 1807, an order
in council was issued, which, after reference to the orders
issued by France, enjoined that no vessel should be allowed
to trade from one enemy's port to another, or from one port
to another of a French ally's coast shut against English ves-
sels ; and ordered the commanders of the ships of war and pri-
vateers to warn every neutral vessel coming from any such
port, and destined to another such port, to discontinue her
voyage, and that any vessel, after being so warned which
should be found proceeding to another such port should be
captured and considered as lawful prize. This order in coun-
cil having reached Napoleon at Warsaw, he immediately
ordered the confiscation of all English merchandise and co-
lonial produce found in the Ilanseatic Towns. Bourrienne,
Napoleon's commissioner at Ilamlnirg, declared that all who
carried on trade with England supported England ; that it
was to prevent such trading that France took possession of
IFamljurg; that all English goods should be produced by the
Ilamburghers for the purpose of being confiscated; and that
in forty-eight hours, domiciliary visits would be paid and
military punishments inflicted on the disobedient. But
Britain in return went a step further, and by order in coun-
cil, Nov. 11, 1807, declared all the ports and places of France,
and those of her allies and of all countries where the English

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ECONOMIC HISTORY.

flag was excluded, cvoii though they were not at war with
Britain, should he placed under the same restrictions for com-
merce and navigation as if they were blockaded ; and conse-
(juently that ships destined to those [)orts should be liable to
the visit of JJritish cruisers at a British station, and thero
subjected to a tax to be imposed by tlie British Parliament.^

Napoleon was at !Milan wlien this order in council was
issued, and forthwith, on December 17, the famous decree
appeared l)y which he imposed on neutrals just the contrary
of what was prescribed to them by England, and further de-
clared that every vessel, of whatever nation, that submitted
to the order in council of November 11 sliould l)y that very
act become denationalized, considered as British property,
and condemned as a good prize. The decree placed the Brit-
ish islands in a state of blockade, and ordered that every
ship, of wliatever nation, and with whatever cargo, proceed-
ing from English ports or English colonies to countries
occupied by English troops, or going to England, should be a
good prize. This England answered by the order in council
of April 2G, 1809, which revoked the order of 1807 as re-
gards America, but confirmed the blockade of all the ports
of France and Holland, their colonies and dependencies.
And then France, still further incensed against England,
issued the tariff of Trianon, dated Aug 5, 1810, completed by
the decree of St. Cloud of September 12 and of Fontaineblenu
of October 19, which went the length of ordering the seizure
and burning of all British goods found in France, Germany,

1 One of the fruits of the preat blockade was the introduction of bcct-root
sujjar. In 1810, the price of sugar being very high, experiments wore made to
nin.ke sugar from the beet-root, and the results were encouraging. In 1811 and
1812 the Government put at the disposal of the Minister of Agriculture 100,000
arpents of land and l.OOO.OOOf., as well as the exemption from nil taxes on
native sugar, and works for the purpose were constructed all over the country.
But as soon as the blockade was removed native sugar could no longer com-
pete with foreign sugar, an<l most of the works were abandoned. In 1812
Benjamin Delessert found the way of making the grains of beet-root sugar as
line as those of cane sugar. And Vilmorin was able to make a kind of white
beet-root very nearly as rich as the beet-root of Silesia. In 1829 there were
100 sugar factories, which produced 5,000,000 kilos of sugar. In 18:?2 beet
production was double. In 1837 tliere were 43(5 sugar works, and now the beet-
root enters largely in the sugar industry all over the Continent.

TUE ORDERS IN COUNCIL.

119

irulliind, Italy, Spain, and in every place occupied by French
troops. Strange infatuation ! and how many States took
part in this mad act of vindictiveness ! The princes of the
Rhenish Confederation hastened to execute it, some for the
purpose of enrichinji; themselves by the wicked doed, some
out of hatred towards the English, and some to show their
devotion towards their master. From Carlsruhc to Munich,
from Cassel to Dresden and Hamburg, everywhere, bonfires
were mad(! of English goods. And so exacting were the
French that when Frankfort exhibited the least hesitation in
carrying out the decree French troops were sent to execute
the order.

By means such as these the commerce of the world was
greatly deranged, if not destroyed altogether; and none suf-
fered more from it than England herself. Was it not enough
to be ef'i'ectually shut out from all commei'cc with French
ports, that we should have provoked the closing of neutral
ports also ? Was it politic, at a time when our relations with
the principal powers were in a condition so critical, to alien-
ate from us all the neutral States of Europe ? Was it wise
to indict so grievous an injury upon neutral States, as to
force them to make common cause with the enemy ? It is
scarcely possible to describe at what peril the commerce of
the world was carried on. The proceedings of the Court of
Admiralty are full of the most romantic incidents. An
Americnm ship^ with a cargo of tobacco was sent from Amer-
ica to Vigo, or to a market for sale. At Vigo the tobacco
was sold imder contract to deliver it at Seville at the master's
risk, and the vessel was going to Seville to deliver the cargo
when she was captured. A British vessel ^ was sei)arated
from her convoy during a storm and brought out by a French
lugger which came up and told the master to stay by her till
the storm moderated when they would send a boat on board.
The lugger continued alongside sometimes ahead and some-
times astern and sometimes to windward for three or four
hours. But a British frigate coming in sight gave chase to

1 The " Atlas," 3 Roh. Rep., p. 299.

2 xiie « EJward and Mary," 3 Rob. Rep., p. 305.

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ECONOMIC HISTORY.

the lufiger and captured her, during which time the ship
made lier escape, rejoined the convoy and came into Poole.
Ships were taken because they were sailing to false destina-
tions under false pajjcra, false flags, false certificates of
ownership, and false bills of sale. They were seized for
running the blockade, and for escaping from blockaded ports.
They were arrested for carrying despatches, military men,
and contraband of war. In every way, at every point of the
ocean, the pursuit was carried on, till the seas were cleared of
merchant ships, and the highway of nations, the widest and
freest arena for trade, was converted into an amphitheatre
lur the display of the wildest and worst excesses of human
cupidity and j)as8ions.

But a greater evil than even this extreme derangement of
maritime commerce was that which flowed from the system
of licenses,' an evil which undermiucd the first principles of
commercial morality. It was forcibly stated by the Marquis
of Lansdowne that the commerce of the country was one
mass of simulation and dissimulation; that our traders crept
along the shores of the enemy in darkness and silence, wait-
ing for an opportunity of carrying into effect the simulative
means by which they sought to carry on their business ; that
such a system led to private violation of morality and honor
of the most alarming description; and that instead of bene-
fiting our commerce, manufactures, and resources, the orders
in council diminished our commerce, distressed our manu-
factures, and lessened our resources. Yet all these warnings
and expostulations were unheeded. The national mind was
preoccupied by the one thought of compelling France and her
military leader to a complete submission; and no considera-
tion of a commercial or pecuniary character, no regard to the
bearing of her measures upon other countries were sufficient
to induce a reversal of this military and naval policy.

Upwards of fifteen years had elapsed since the first shot
was fired between England and France after the great revolu-

• The numbor of commercial licenses granted for imports and exports was
68 in 1802, 830 in 1803. 1,141 in 1804, 701 in 1805, 1,620 in 1806, 2,G06 in 1807,
4,910 in 1808, 15,226 in 1809, 18,35G in 1810, and 7,002 in 1811

THE ORDERS IN COUNCIL.

121

tion, ami yet tho two nations were as intent as ever on
securing their mutual destruction. England had indeed
learned by this time to make light of all such decrees, and
she had found by experience that British goods found their
way to the Continent in 8{)ito of all vindictive measures.
But the attitude of the United States became more and more
threatening, and the nations saw an absolute necessity for
revising the policy oi the orders in council. For years past
Lord Temple, Lord Castlcreagh, Mr. Perceval, and Sir John
Nichols had brought the subject before the Mouse, and many
a long discussion had taken place on the subject. In their
opinion this country had, without any alleged provocation
from the United States of America, interrupted nearly the
whole of their commerce with Europe, and they held that
such orders in council were unjust and impolitic, and that
the issuing of them at the time and under the circumstances
was an act of the utmost improvidence and rashness. Yet
the nation was disposed to be guided by the government; and
when Lord Grenville moved resolutions of similar import in
1809 ho met with no better resi)onse. When, however, the
United States, after having passed the Non-intercourse Act,
proceeded still further in the way of preparation for open
hostilities, the merchants began to speak their mind on the
subject; and from London, Hull, Bristol, and all the chief
ports ])etitions came to the legislature praying for the revoca-
tion of the obnoxious orders. The merchants of London
represented that trade was in a miserable condition, chiefly
from the want of the customary intercourse with the conti-
nent of Europe ; that em[)loyment w'as very scarce, and the
wages of labor very low; that the aspect of affairs threatened
additional suffering to those then exj)erienced ; that since all
the evils then suffered were owing to the ccmtinuancc of the
war, it was all-important to obtain if possible an early res-
toration of the blessings of peace; that it was not from any
dread of the enemy that they made such a request, but from
a desire that no opportunity might be lost of entering into
negotiations for the purpose; that in their opinion it was a
great error to suppose that the policy of the orders of the

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ECONOMIC HISTORY.

council could in any way ho honoficial to trade; but that, on
tho contrary, thoy regarded with extreme appridicuHioii its
oft'cct on our relations with tho United States of America.
The meirhants of Hull complained that the system of license
sapped puhlie morals; those of Bristol reijresented that they
suflered intensely in their general trade; and riots occurred
in Lancashire, Yorkshire, and Clieshiiv.

On April 28, 1812, the House of Commons agreed without
a division to hear evidence in support of these ])etitions; and
on Juiu' 1() Mr., afterwards Lord, i^rouuham moved "That
an humble address he presented to his Royal liighness tho
Prince Regent, representing to his Royal Highness that this
House has for some time past been engaged in an imiuiry
into the present depressed state of the manufactures and
commerce of the country, and the effects of the orders in
council issued by his Majesty in the years 1S07 and ISO!);
assuring his Royal Highness that this House will at all times
suppoit his Royal Higliness to the utmost of its powei's, in
maintaining those just maritime rights which have essen-
tially contrii)uted to the prosperity and honor of the realm;
but beseeching his Royal Highness that he would be graciously
pleased to recall or suspend the said orders, and to adopt such
measures as may tend to conciliate neutral powers without
sacrificing the right and dignity of his Majesty's crown." In
the most gra|)hic manner Lord IJrougham depicted the dis-
tress of the country, showed how erroneous was the idea that
what wo lost in the European trade we gained in any other
quarti>r, ami warned the cotmtry of the certainty of a war with
America if the orders were not at once rescinded. " I know,"
he said, "I shall be asked wliether I would recommend any
sacrifice for the mere purpose of conciliating America. I rec-
ommend no sacrifico of honor for that or for any purpose; but
I will tell you that I think wc can well and safely for our
honor afford to conciliate America. Never did we stand so
high since wc were a nation in point of military character.
Wc have it in abundance and even to spare. This unhappy
and seemingly interminable war, lavish as it has been in
treasure, still more profuse of blood and barren of real ad-

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128

uich

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but
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ippy
in
ad-

vanta<i;o, lias at Itnist boon oquully lavisli of jrlory. Its feats
have nol merely sustauiud the warlike fame of the nation,
wliieli would have been much; they have done what seemed
seareely possible, — 1 hey have jxreatly exalted it. They have
covered our arms with immortal renown. Then, 1 say, use
this glory, — use this proud heij^ht on whieh we now stand,
for the purpose of peace and eoneiliation with Anu'riea. Let
this and its inealeidable benelits bt; tlu! advantaj^e which we
reap from the war in Kurope, for the fame of that war enables
us safely to take it. And who, 1 demand, give the most dis-
graceful counsels, — they who tell you wo are in military char-
acter but of yesterday, we yet have a name to win, wc; stand
on <loubtful ground, W(^ dare not do as we list for fear of be-
ing thought afraid, wi* cannot without loss of name stoop to
pacify our AnuM-ican kinsmen? or 1, who say we are a great,
n proud, a warlike jjcople ; we have fought everywhere and
conrpiered wherever we have fought ; our character is eter-
nally fixed; it stands too firm to be shaken, and on the faith
of it we may do towards Ameri(;a safely for our honor (hat
which wc know our interests require '! This perpetual jeal-
ousy of America ! (Jood (lod! I cannot with temper ask on
what it rests! It drives me to a jjassion to think of it!
Jealousy of America! I should as soon think of being jeal-
ous of the tradesman who supplies m(! with necessaries, or
the client who entrusts his suits to my patronage. Jealousy
of America! whose armies are as yet at the plough, or mak-
ing, since your policy has willed it, so awkward (though im-
proving) attempts at the loom; whose assembled navies could
not lay siege to an English harbor! Jealousy of a })owor
which is necessarily ])eaceful as well as weak, but wl.icdi if
it had all the ambition of France and her armies to bade it,
and all the navy of England to boot,— nay, had it the lust of
conquest which marks your enemies, and your own army as
well as navy to gratify it, — is j)laced at so vast a distance as
to be perfectly harmless! And this is the nation of whieh
for our honor's sake we are desired to cherish a perpetual
jealousy for the ruin of our best interests! I trust, sir, that
no such phantom of the brain will scare us from the path of

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ECONOMIC HISTORY.

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our duty. The advice which I tender is not the same which
has at all times been offered to this country. There is one
memorable era in our history when other uses were made of
our triumphs from those which I recommend. By the treaty
of Utrecht, which the reprobation of ages has left inade-
quately censured, we Avere content to obtain, as the whole
price of Ramillies and Blenheim, an additional share of the
accursed slave trade. I give you other counsels. I should
have you employ the glory which you have won at Talavera
and Corunna in restoring your commerce to its lawful, open,
honest course, and rescue it from the mean and hateful
channels in Asdiich it has latclv been confined. And if
any thoughtless boaster in America or elsewhere should
vaunt that you have yielded through fear, I would not bid
him wait until some new achievement of our arms put him
to silence, but 1 would counsel you in silence to disregard
him."

The effect of such an appeal was fatal to the whole system.
The government saw that resistance was no longer possilile,
and on April 21 the Prince Regent made a declaration that
the orders in council would be revoked as soon as the Berlin
and J^Iilan decrees should bo repealed. But it was too late.
America had by this time ceased to maintain a neutral atti-
tude. And having made a secret treaty with Napoleon, she
issued an embargo on all British vessels in American ports,
declared war against England, and proceeded to make an in-
effectual attack Upon Canada. The political condition of
Europe, however, at this stage happily assumed a brighter
asi)cct. The long-desired peace began to dawn on the hori-
zon, and in rapid succession tlie news came of the battle of
Leipzig, the entry of the Allies into Paris, and the abdication
of Bonaparte. Negotiations then commenced in earnest, and
they issued in the treaty of peace and Congress of Vienna,
which once more restored order and symmetry in the politi-
cal organization of Europe.^ On Dec. 24, 1814, a treaty of

1 The total cost of the war with France, from 1703 to 1815 (the war expen-
diture continued till 1817), was £831,446,449. The national debt, which, in
1703, amounted to £247,874,434, rose in 1816 to £861,039,049.

ft I-

THE ORDERS IN COUNCIL.

126

peace was signed between the United Kingdom and the
United States. On June 0, 1815, Mhe principal act of the
Congress of Vienna was signed, which established the future
political relations of the European States, and laid down the
regulations for the free navigation of rivers. And on July
27 of the same year a Treaty of Conmiercc was concluded
between Great Britain and the United States of America.

1 The treaties of Vienna had to deal with the financial as well as with the
political condition of States. By agreement dated August 10, 1815, France be-
came boinid to pay 185,840,130f. to the Allied Powers for the maintenance of
the 1,135,000 men, tiie army of occupation. And by the treaty of November
15, France undertook to pay 700,000,000f. to tlie Allied Powers as war contribu-
tion, to pay all legitimate debts, and also the expense of occupation uf 150,000
men for five years. Numerous claims were, moreover, made by the Banks of
Hamburg, Amsterdam, Genoa, the Swiss bankers, and many merchants for
losses and destruction of their property, amounting in all to 2,700,000,000f., and
all these claims were settled by means of loans contracted with the banking
houses of Earing and Hope.

\' il

* ^1

126

ECONOMIC HISTORY.

VI.

THE FINANCES OP ENCxLAND, 1793-1815.

From Pokteu's Pkogkess of the Nation,^ Section IV.

CHAPTER I.

11: I

1 \

TN order to give an intelligible account of the financial
-*• state of the kingdom at the beginning of the present
century, it is necessary to explain briefly the system which
had been brought into operation by Mr. I'itt during the pre-
ceding three years.

In November, 1797, that minister had recourse to what he
was pleased to call "a perfectly new and solid system of
finance." The public expenditure of that year amounted to
twenty-five and a half milliims, of which sum only six and a
half millions were provided for by existing unmortgaged
taxes, leaving nineteen millions to be raised by extraordinary
means. In the then condition of the money market it was
felt to be impossible to borrow such an amount in the ordi-
nary manner, that is, ])roviding by new taxes for the pay-
ment of only the i)ermanent annual burden oeeasi'>ned l»y
the increased debt; and a new impost, calculated to produce
seven millions, was sanctioned by parliament, which impost
was to be continued until it should in conjunction with the
produce of tlie sinking-fund, re})ay the twelve millions that
would be still delicient. Tliis new system of finance might
have been entitled to tlie character given of it by Mr. Pitt, if
it had not l)een pn)bal)le. — nay, certain, that in the follow-
ing years an cfjual expenditure must be met by similar means,
until the seven millions would j)rove inade(]uate even for the
payment of the annual interest of the sums for which the tax

' London : John Murray, 1851.

FINANCES OF ENGLAND.

127

rax

was imposed, when it would become part of the permanent
burdens of the country. This new impost, to which the
name of "triple assessment" was given, was in fact an addi-
tion made to the assessed taxes, " in a triplicate ])roportion
to their itrevious amount, — limited, however, to the tenth of
each person's income."

The adoption of this or some similar plan of financial
arrangement was hardly a matter of choice with the minister
by whom the funding system, as ordinarily practised, could
not have been any further pursued at that time. Unfortu-
nately for the success of the principle which it was thus
sought to establish, the mode in which it was proi)osed to
raise the seven millions of additional revenue was highly
uiip()i»ular; and indeed it has always excited dissatisfaction
on the part of the public to be called on for the payment of
any tax from which they have not the power to protect them-
selves by a])staining from the use of the taxed commodity.
It is this consideration which has always made our finance
ministers prefer indirect to direct taxaticm, and which led,
during the ))rogress of a long and expensive war, to the im-
position of duties that weighed with destructive force upon
the springs of industry. The financial difficulties by which
the government was then embarrassed may be known from the
fact that a loan of three millions was raised in April, 1798,
at the rate of £200 three per cent stock, and 5.s'. long an-
nuity for each £100 borrowed, being at the rate of six and a
quarter per cent, and that the "triple assessment," which
was calculated to produce seven millions yielded no more
than four and a half millions. In the following December
the triple assessment was repealed, and in lieu of it an in-
come-tax was imposed at the rate of ten percent upon all
incomes amounting to £200 and ujjwards, with diminishing
rates upon smaller incomes, down to sixty jkjiukIs i)er anuuni,
l)elow which rate the tax was not to apply. This tax was
estimated to produce ten millions: it was called a war tax ;
but when the minister proceeded to mortgage its produce to
defray the interest of loans to a large amount such a name
appeared to be little better than a delusion. Like the triple

■^^

128

ECONOMIC Ills roil Y.

ill
W

1 1'

assessment, the produce of the income-tax fell greatly short
of its estimated amount and yielded no more than seven
millions, a lai'gc i)art of which was quickly absorbed to de-
fray the interest of loans for which it was successively
pledged. In 1801, after deducting the sums thus chargeable
on it, this tax produced only four millions towards the na-
tional expenditure. In proposing a loan of twenty-five and
a half millions for the service of that year, it was considered
inexpedient to mortgage the income-tax any further, and
new taxes were imposed estimated to yield j£ 1,800, 000 per
annum. In March, 1802, jjcace was made with France, and
in the same month notice was given by the Chancellor of the
Exchequer, Mr. Addington, of his intention to repeal the
income-tax, which was felt to be highly oppressive, and had
become more and more odious to the i)eoi)le. In eifecting
this repeal, and at the same time to keep faith with the pub-
lic creditors to whom its ])roduce had been mortgaged to the
extent of fifty-six and a half millions of three per cent stock,
additional taxes were im])osed ui)on beer, malt, and hops,
and a considerable increase was made to the assessed taxes ;
besides which an additiijn under the name of a modification
was made to the tax on imports and exports previously known
under the name of the convoy duty.

At this time the aggregate amount of permanent taxes
was thirty-eight and a half millions, exactly double what it
had been at the breaking out of the war in 1793. During
those nine years taxes to the amount of £280,000,000 ex-
clusive of the cost of collecti(m had been levied from the peo-
^)le ; and a few words arc necessary in order to account for the
seeming contradiction implied in the fact that, notwithstand-
ing this ruinous rate of expenditure, many of the great inter-
ests throughout the country wore the outward appearance of
prosperity. A nation engaged in an expensive war, which
calls for the systematic expenditure of large sums beyond its
income may be likened to an individual spendthrift during
his career of riot and extravagance; all about him wears
the aspect of plenty and prosperity, and this appearance will
continue until his means begin to fail, and those who have

FINANCES OF ENGLAND.

129

fattened upon his profusion are at length sent away empty.
The enormous expenditure of the government joined to the
state of the currency (as already explained) necessarily caused
a general and great rise of prices; as regarded agriculturol
produce, this effect was exaggerated by tiie ungcnial nature of
the seasons. Rents had risen throughout the country in a far
greater degree than the necessary expenditure of the land-
owners, who thence found their situations imi)roved, notwith-
standing the additional load of taxation. The great number
of contractors and other persons dealing witli the government
had derived a positive benefit from the public expenditure,
and being chiefly resident at the seat of government, they
were enabled greatly to influence the tone of public opinion.
The greater command of money thus given to considerable
classes occasioned an increacod demand for luxuries of for-
eign and domestic pi'oduction, from which the merchants and
dealers derived advantage. There were besides other classes
of persons who profited from the war exi>enditure. These
were the producers of manufactured goods and those who
dealt in them, and who found their dealings greatly in-
creased hy moans of the foreign expenditure of the govern-
ment in subsidies and expeditions, the means for which were
furnished through those dealings; the manufacturers were at
the same time l)Oginning to reap the advantages that have
since been experienced in a more considerable degree from
the series of inventions begun by Ilargrcaves and Arkwright,
and which acted in some degree as palliatives to the evil
effects of the government profusion.

As in the case of the sjtendthrift, while all these causes
were in operation there was an a])pearance of prosperity, and
those who were profiting from this stiatc of things were anx-
ious to keep up the delusion. That it was no more than delu-
sion will be at once apparent to all who examine below the
surface, and who inquire as to the condition of poverty and
wretchedness into which the groat mass of the jjooplo wore
then plunged. In some few cases there had been an advance
of wages; but this occurred only to skilled artisans, and
oven with them the rise was wholly incommensurate with the

9 '.

.! i

; Hi
> Ml

M t"

180

ECONOMIC HISTORY.

increased cost of all the necessaries of life. The mere laborer
— he who had nothing; to bring to market but his limbs and
sinews — did not participate in this partial compensation
for high prices, but was in most cases an eager competitor
for employment at the same or nearly the same wages as had
been given before the war. Nor could it well be otherwise,
since the demand for labor can only increase with the in-
crease of the caj)ital destined for the payment of wages ; and
we have seen that capital, so far from being suffered to
accumulate, was dissipated by the government expenditure
more rapidly than it could be accumulated by individuals.
In London and its vicinity the rates of wages are necessarily
higher because of Hio g.-cater expense of living than in coun-
try districts; ail': it n "^ss'rted from personal knowledge of
the fact that at the lu ;■ [uestion there was a superabund-
ant supply of laborers constantly comi)eting for employment
at the large govcnuarnt establisliments, where the weekly
wages did not exceed lo. , wluio iho price of the (piartern
loaf was Is. 10c?., and the other n. essary outgoings of a
laborer's family were nearly as high in proportion. If we
contrast the weekly wages at the two periods of 1790 and
1800, of husbandry laborers and of skilled artisans, measur-
ing them both by the quantity of wheat which they could
command, it will be seen that the former could in 1790 pur-
chase eighty-two pints of wheat, and in 1800 could procure
no more than fifty-three pints, while the skilled artisau, who
in 1790 could buy one hundred and sixty nine pints, could
f)rocurc in 1800 only eighty-three pints. To talk of the pros-
perous state of the country under such a condition of things
involves a palpable contradiction. It would be more correct
to liken the situation of the community to that of the inhabi-
tants of a town subjected to a general conflagration, in which
some became suddenly enriched by carrying off the valuables,
while the mass were involved in ruin and dostitiitiou.

It may be objected to the view here taken, but which is
founded upon facts that hardly admit of controversy, that
had the condition of the country been such as is represented,
we must have sunk under the greater efforts we were so soon

FINANCES OF ENGLAND.

131

after ciillod on to sustiiin ; ami there is every reason to be-
lieve that but for the invention of the spinning- jenny and the
improvements in the steam-engine, whieh liave produced such
almost magical effects upon the productive energies of tliis
kingdom, it would have been impossible to luivc withstood
the combination with which single-handed wc were called
upon to contend. The manner and degree in which these
powerful agents have enabled us to withstand and to triumph
over difliculties unparalleled in the history of the world have
been shown in a preceding section of this inquiry.

CIIAPTEK II.

lirh is
, that
nited,

The public expenditure of England during the war which
was begun in 1793 and continued (with short intermissions
in 1801 and 1814) until the final overthrow of Napoleon in
1815, was conducted throughout upon a truly gigantic scale.
In 1792, the last year of peace, the entire public expenditure
of the kingdom was £19,8r)9,123, which sum included
ce9,7G7,333 interest upcm the public debt. In 1814 the cur-
rent expenditure amounted to £70,780,805, and the interest
ui)on the debt to £30,051,365 making an aggregate sum of
£100,832,2(30 paid out of the public exchequer for the dis-
bursements of that one year. This is the largest annual
outlay over made; that of the previous year was within om;
million of the same amount.

It is hardly possible to conceive that the public expendi-
ture could have been long continued upon this scale of mag-
nitude. The state of exh<austion under which the country
was made to suffer, during the first few years of the peace
that followed, sulhciently attests the truth of this oi)inion.
The financial efforts of the government had been made for
several preceding years with a degree of lavish profusion
that was continually augmented until it reached the height
above mentioned; the expenditure, including interest ujjon
the debt, during the ten years from 1800 to 1815 inclusive,
averaged £84,007,761 per annum, sums which, until the

'^U

♦r

1 1

a,;

11?:

(::

'I I I

132

ECONOMIC HISTORY.

years in which they wore actually expended it would have
been considered wholly chimerical to expect to raise. The
experience of that period has shown liow inij)ossiblc a thing
it is to judge correctly from the ))ast as to the growing re-
sources of our country, or it might be conlidently aflirmed
that during the concluding y(!ars of this scries we had
assuredly reached the limit of possibilit}'. Without that
experience for their guidance, our ancestors, in former but
not very remote times, gave way to gloomy forebodings as to
their future prospects, at Avliich we cannot but smile when
thinking of the c(miparatively pygmy efforts wliich called
them forth. Some of those forebodings have been recorded
by Sir John Sinclair in his work on the public revenue of
this kingdom. A few passages \i\)on the subject taken from
that work, and with the dates at which they were written,
may not be without interest to the reader at the present
moment.

IT.'JC. "Tho, vast load of debt under wlii('li the nation still
groiins IS tlie true source of all those calamities and gloomy prospects
(if wiiicli w(! have so much reason to conn)lain. To this has been
owing that multii)licity of burdensome taxes which have more than
doubled the jjrice of the common necessaries of life within a few
years past, and tlierehy distressed tlie i)oor laborer and maiuifao-
turer, disabled the farmer to pay his rent, and put even gentlemen
of plentiful estates under the greatest diiiiculties to make a toler-
able provision for their families." *

At the time this gloomy picture was drawn the public debt
did not exceed .£50,000,000, and the annual charge on that
account was somewhat under £2,000,000, being considerably
below the sums added to the public burdens in the single
year 1814.

1749. "Our parliamentary aids, from the year 1740, exclu-
sively, to the year 1748, inclusively, amount to .^5.5, .522, 159 IDs.
od., a sum th.at will appear incredible to future generations, aiul is
so almost to the present. Till we have j)aid a good part of our
debt, and restored our country in some measure to her former

1 The Craftsman, No. 502, 14th February, 1736.

-w

■■4

"•S>

FINANCES OF ENGL AX D.

188

y)\]c debt
on that
lulorably
single

exclu-
,159 Ifis.
lis, and is
(•t of our
|r former

wi'ulth and power, it will be ditticult to maintain the dignit}' of
Grwit liritain, to make her resiH'ctcd abroad, and secure from
injuries or even affronts on the part of her neiglibors." *

The debt, to the effects of whicli so much evil is hero at-
triijuted, was still under £80,000,000, and the annual inter-
est scarcely more than il 3, 000, 000.

ITW). " It lias been a generally received notion among political
arithmeticians, that we may increase our debt to Jfc;lO(),000,()()0,
but they acknowledge that it must then cease, by the debtor
becoming bankrupt."*

la the few years that preceded the publication of Mr.
Ilannay's letters the debt had been somewhat diminished,
so that it amounted to about iJ 75, 000, 000, and the annual
charge on the country to X 2, 400, 000.

1701. "The first instance of a debt contracted upon parliamen-
tary security occurs in the reign of Henry VI. Tlie commence-
ment of this pernicious practice deserves to bo noted, — a practice
the more likely to become pernicious the more a nation advances in
opulence and credit. Tlio ruinous effects of it are now liecome
apparent, and tlireaten tlie very existence of tlie nation."^

The public burdens had by this time so far exceeded the
possible limit assigned by Mr. IJannay, that the debt
amounted to nearly =£150,000,000, and the annual interest
to =£4,800,000. The amoimt was simiewhat reduced between
that period and the breaking out of the American war, when
a succession of loans again became necessary. On winding
uj) the accounts of that contest, the del)t amounted to
X 21)8,000, 000, and the annual charge to i:9,500,000. On
the 6th of January, 1793, just before the beginning of the
war of the French Revolution, the debt continued nearly the
same as at the beginning of the peace (the exact amount of
funded and unfunded debt, including the value of terminable

' Some Reflections on the Present State of the Nation, by Henry St. John,
Lord Holingbrolcc.

^ Letters by Samuel Ilannay, Esq.

' Hume's History of England, 8vo edition, 1778, vol. iii. p. 215.

-H

.'if

^ I

134

ECONOMIC ill STORY.

ABaTKACT OF PUBLIC INl^OMK AND KXI'RNDITIJUK IN THK UNITED KINGDOM
IN KACII VKAK, FROM 17'J2 TU 1«4'J

1 1

p.^

1 ;

1.
1 1

<}«■

«1 .

■'

1 1 1

l| : 1

li..

\\ I

r.'

1792 ..
17!i3 ..

1704 ..

1705 ..
17111!
17!»7...
1708...
1700 .
IH(II) ..
llOl...
1st 12,..

mw ..

1*14 .
l.S(»5
l«mi ..
1807...
18US ..
ISOO .
1810..
1811...
1812 ..
181H
1814...
181.5 ..
181(i...
1817 .
1S18 .
1810..

1820 ..

1821 .
m22
1823

1824 .,

1825 .
182»> .
1827 ..
1^28 . .
1820 ..
1.8;5J ..
1831 .
1>*;32
KW .

is;u ..
\^v, ..

183)...

1837 ..

1838 ..
IWW ..
1840...
1841 ..
1842..
1843 ..
1S44 ..
1845 ..
1-<4I! ..

1847 ..

1848 .
1849..

YKA113

I.XCOUI.

cW £.d

w. o 2

^.^l.

51
■ a

3 9 -• -- - •

£19,258,814
10,845,705
20,103,074
10,88;i,520
21,454,728
23,120,040
31,<l!J5,3tW
3('.,li02,44 1
34,I45.,584
34,113,141)
30,308,140
38,000,30i
40,170,402
50,807,700
05,700,080
50,;«9,321
02,908,101
t>.3,719,400
07,144,512
05,173,.'-)45
05,O37..8j-)0
(i8,74K,303
71.134,503
72,210,512
02,204,540
52,055.913
53,747,7051
52,t)48,847
64,282,9.58
.5.5,8.34.192'
55 WW,i«0)
57,(!72.0t«!
60,302,4031
57,273.8«ol
54,804,989j
54,0325181
5,5,187,142'
5O,780,(iS2!
5tl,O5i),01«,
40,424,440
40,O8S,7.5i')
40,271, .320;
40.42J-..203
45,893,30a|
48,591,180,
4l),475,194i
47,a'i3,400|
47,844.899,
47,5li7,.')05
48,n84,3tai:
40,0<i5,031l
52,682,817'
54.(KI3,7.54'
5.'1.0li0.a54l
r>.'i.70O,l.S8l
61,540.2'>5i
53.:!X8,T17i
52,931,7401

4,877,9.-)('

0,0>I8,3S0
3o,4i:4,>'31
22.244,0S2
30,3."i.l,SV3
10,858 ,.503
21,714,803
23 ,o: Jo ,529
27,3115.271
14.o;J8,2r)4

8,7.52.701
14,570. 7t'>3
10 84O,.801
13.(tt-|,314
10,432,031
12.005,"44
12,208,3'

7,792.444
19,143,.ra
24,7!K-l,007
30.040,282
34,.50:),0(i3
2U, 241,8117
514,059

333,989

853,0,3'
1,014,359

7,470.353

I. .503,045

374,568;

§1

EXPKIIDtTOai

^ OS

lt =

"a. o'"

_ fc» o '

q 4. 4. 5 i^

£19,258,814
24,723 001 I
27,101,403
50,318,351
43,000,710 I
53,lSi,S13 I
47,K03,sr,0 !
57,317,:)07 ;
57,170,113 '
(1,418,417
51,lK«i,403
47,302,1.53 !
tlO,747,2i-)5 I
07,747,507 1
71,831,4:10
00.772,255
75,O03,2;J5
(0.017,770
74,930,080 1
84,317,498 \
89,828,547

los,307.(H5 !

10,5,008,1(10
!I2,4.52,319
02,778,(;05 ,
.52.1155,1113
53,747.705
52.048,847
54.282,05X
fi,5,834,l!t2 '
55,(;(K),0.5O '
57,(i72,:iOO '
fi9..'iii2,403 I
67,273.809 i
54,H94,0.-<9
54,0:i2,5l8
55, 1.87,142 1 1
50,78ti,()S2 I
5O,O5(i,01(i,i
40,424,440
47.322,744 [
40,27 l,32(i
40,42-i,2i3 i
45,803.310
48.591,18(1
40,475,104
47,3;W,4i»i
47,844,809
47 ,507 ,.505
48,937,.307
48,r)8(),(i2(!
52„'-,82,817
54,(KI3,7,54
53.0(50.354
5:1700,138
50,022.017
54.0.^2,002
63,320,317

£9,707 ,ai3 £2,421,081

9.437,802 ..;

0,800,004'

10,810,728,

11,841,204

14,270,018

17,585.5181

17,22(1,083,

17.381,.50l|

10,945,0241

19.8(V.,588|

20,099,8041

20,726,772

22,141,426

2;j,UKi,0(Ki

2;i,3i '.2,0.85

2;J,15H,982

24 213.807'

24,240,940

24,077,916

26.540,508

28.o;}0,239

30,051, ;M)

31,57ti,074

32,038751

31,430 245

30,8.80,244

30,807,249

31,1.57,846

31,9.55,304

20,921,493

29,215,005'

29,Ol>0,3riOi

28,ll(;(),287:

28.076.957

28,239,847

28,095,500'

29,li')5,lil2i

29,118,868:

28,341,4161

28,3'23,75l!

28.,522,,507'

28,504,i'96

28,514,010

29,243.508.

29.480.5711

20 200.2;i8l

29.4.54,002'

29.381,7181

29.450.145

29,428,120|

29,200,100!

,30.405,4591

28,2,53,872

28,(177,087!

2H,141,.531I.

2s.5i!;!,517

28,323 961

K 3

c -3
C 13

1,826,814

l,(i24.(;06

3.103.1;*)

1,918,(119
4.104.457
2,!h;2,.504
5,2(il.72j'-)
6,46i),.550
»,!ifHl,725
1,196,531
2,023,O'i8
4,007 ,9(;5
2,7f«),(X13,
l,93i5,4651
2,673,8581

5,696'
l,023,784i
1,776,378
1.270.O.5ol
1.690,727!
1,985,886!

7,496:

8,016;

8,741
1,663,361
4,143,891

21,074

£7,670,10!)
14,769,208
17,.851,213
37,003,149
30,im,li87
80,469,993
83.541,727
3^,403,421
39,430.700
41,iJh3,.555
29,(;93,(il9
28,298,366
3H.04!i,436
45,027,89:
45,941,206
44,2j')0,;i57
40,984,105
52,;i5'.i,14 ■
62,(il 1,002
68,757,308
0;j,210,8IO
77,913,488
70,780,895
00.704,100
32,2ii 1,020
22.01M 179
20,843,728
21,430,130
21,3S|,3,S2
21,o7o,'*25
20,H:ii;,567
21,74ii,ll0
23,708.262
23..559,741
25,80S,5S5
25,.5IW,440
21,407,07(1
19,910.,522
18,024,085
18.781,882
18,0,50,245
16.235.73)')
lt),397,0(J5
15,884,649
17,2,58,871
17,041,383
1.8,418 449
19,903,0'iO
10,779,818
20,7.3i'),.'.84
21,517.049
21.870,353
20,1,52,180
20,988,840
22,8ti6.843
26,,S01,416
25,021. (ilO
22,629,061

s.g

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£19,869,123
24,107,070
27,742.117
4S,414,177
42,175,201
60,740,009
61,127,245
65,(i2.|,404
6(1,821,207
01,3'J9,17»
49,549,207
48,U!)8,2;30
59,376,208
«7,10!1,318
t«,94 1,211
07,613,042
73,143,087
70,.500,(113
70,865,548
83,7ii''>,223
88,757,324
10.-..94:i,727
10(i,832,2(i()
02,2MI,180
65,160,771
65.281.2:18
53,348 578
5ri,4(i0,609
54.457.247
57,l;J0,686
63,710.624
66 22;t.740
59,2;il,16l
61.5i:o,763
55.081.1173
55,8 3,;i21
54,171.141
61,835,137
40.(178,108
49.797,156
40,370,092
46,782,026
46,078,079
45,009.309
48.01(3,196
49 110,839
47,686,1.83
49,;jf,7,691
4!l,100,552
50,185,729
6(1.945,109
51,148,2/')4
62,21 1,(M'9
69.3a(>,603
60.94:1.8,30
64,602,947
64,18.5,136
60,874,696

FINANCES OF ENGLAND.

135

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annuities was X 201, 73/), 059, and tho annual ('liarfijn was
uC!*,471,(575). From that tiino to tho ikmicc of Aiulcns
hardly a year passed witliout wltncHsing some increase to tho
national burdens, so that at niiilrtumnier, 1802, the capital
of th(^ funded and unfunded del)t amounted to i:(i:{7,000,00(>.
On tlie oth of Junuury, 181U, tho capital was XHSr),l8(J,323,
and tlie annual charge was £32,457,141. The preceding
statements exhibit the progressive state of tho ])ublic income
and expenditure frona 17i)2 to 1849, including the annual
charge on account of tlie public debt; and the amount of
money raised by loans, aiul the fimding of Exehe(pier Hills,
with the amount and description of stock created, and the
annual chai'ge in respect of the same in each year from the
beginning of the present century.

An extraordinary degree of delusion is observable in tho
proceedings of the dilTerent finance ministers by wlumi the
support of the sinking-fund was advocated during the war.
It has been pretended that the 'purchases made l)y means of
that fund had the effect of keeping up the market value of
the public debt, and thereby enal)led the minister to con-
tract loans upon more advantageous terms than, without
this machinery, would have been jiossible. It may well be
doubted, however, whether the repurchase in th's manner,
from time to time, of parts only of that 8urj)lu8 portion of
the ])ublic debt which was created for the express i)urpose of
such o])erations, had any real effect in raising the price
of the remaining portion of the public securities; in other
words, whether the price thus factitiously acted upon, of the
larger amount of debt, was at any time greater than the
price would have been of the smaller amount of debt that
would have existed if the sinking-fund had not been created,
the purchases of the commissioners never having in fact
accomplish(!d more than the repurchase of the so needlessly
created part of the debt. It has been further urged in de-
fence of the sinking-fund that the prospect which it enabled
the minister to hold out of the speedy redemption of the
whole debt had the effect of reconciling the people to the
payment of a larger amount of taxes than they would other-

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FINANCES OF ENGLAND.

137

wisd liiivf lu'fii \villinj» to pay. Allowiuij Hint tho cfi't'ct
liorti Hinted wiih id'oduccd, wo mny Htill doiil)! llu' wisdom of
tliiit ^ovcriiinciit which is olilij^i'd to ri'sort to ii jiijrjilc in
order t<» rccoiudh' the people to its incasiin's, and cspfciiilly
when, lis in tho case under cxamiiiiition, tlio didusioii was so
asivo and likely to prove so permanently injurious in its
.i.iiure.

The iiveriigo rate at whieh three per cent stock was orc-
at('(l l)etween 171*3 and IHOI was Xo7 7«. 0(/. ol' money for
£100 stock, and the average market price during that i)eriod
was j£()l 17s. Chi. for XlOU stock. Tho loss to the piihlic upon
tho additional sum borrowed in order that it might l)e re-
deemed dining that period, which was £4!),(;r)5,r)t)l, amounted
to four and a half per cent, or X2,234,5UU. IJetween 1803
and the termination of the war the average price at which
loans were contracted was jGGO 7s. OJ. per £100 stock, and
tho average market price during that time was <£<]2 Xla. (Sd.
per £100. The loss was, therefore, two and a half per cent
n >u the sum redeemed during that time, <£17li,173,240 or
'04,331, making together an amount of £0,038,831 al)so-
; lost to the pultlic by these operations. This amount,
reckoned at the average price of the various loans, is eijulva-
lent to a capital of more than eleven millions of thire ]»or
cent stock, with which the country is now adiiitionally hur-
dcncd through tho measure of borrowing in a depressed
market more money than was wanted in order to its being
repaid when the market for ))iil)lic securities was certain to
bo higher. The fallacy attending this system is now so
fully recognized that it is not likely any minister will in
future make a show of redeeming debt at the moment when
circumstances compel him actually to increase its amount
for that purpose.

Another error, of a still more important nature, involved in
this system remains to bo noticed. The uljsurdity of borrow-
ing money in order to extinguish debt could never have been
seriously adopted but wnth the anticipation of the pood effects
that might bo drawn from such a course after the necessity
for further borrowing should cease, when it might be benefi-

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ECONOMIC msroRY.

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cial to a])))!}' towards the redemption of the debt the high
scale of taxation wliich that system rendered practicable.
There never could liave existed any doubt of the fact that
' whenever the necessity for bori'owing should cease the mar-
ket value of the public funds would advance greatly, and
would therefore in an equal degnjc limit the redeeming
power of the sui'j)lus income, however arising. The knowl-
edge of this fact should have led the ministers by whom
successive additions were made to the i)ublic debt to the
ad()j)tion of a course ^vhich would have enabled them to turn
this rise of prices to the advantage of the public, instead of
its being, as it has proved, productive of loss; and this end
would certainly have been accomplished if, at the expense of
a small jjresent sacrifice, the loans had been contracted at a
high rate of int. -rest, instead of their having been contracted,
as for the most ))art they wcsre, in three i)er cent auimitics.
It is presumable that if the borrowing had been restricted to
the sums actually wanted from time to time, without thought
of a sinking-fund, the public might possibly have had to pay
at the outside a quarter per cent moi'e of annual interest
than they actually paid. At this rate the deficiency of in-
come compared with expenditure between 1793 and 1815,
which amounted, as will be shown in the next table, to
^425,482,701 would have occasioned an addition to the
capital of the debt to the amount of .£455,200,554 of five per
cent stock, the annual interest of which would have been
£22,703,327, instead of a nominal capital of ,£547,202,764,
with the annual additional charge of £20,000,871. At the
close of the war the nominal ca]>ital of the debt would have
then amounted to £724,285,720, and the annual charge
to £32,530,000, instead of £810,311,030 of capital, and
£30,458,204 of annual charge, which was the state of the
unredeemed public debt on the 5th of January, 1810. The
government would then have been in the most favorable posi-
tion for taking advantage of the lowering of the rate of inter-
est which was certain to follow, and many years before the
present time the whole of the five per cent annuities might
have been converted without any addition to the capital into

FINANCES OF ENGLAND.

139

annuities of the samo amount bearing interest at the rate of
three and a half per ecnt or jicrhaps lower. Assuming, how-
ever, that the reduetion would not have gone lower than
tliree and a half per cent, and taking into consideration the
surplus revenue which has been actually aj)i)lied to the re-
demption of debt between 5th January, 181(5, and oth Janu-
ary, 1849, which, as will be seen, amounted to £45,779,04(5,
the funded debt existing on 5th of January, 1837, would
have amounted to £(578,500,083, and the annual charge to
X"2a,747,734, instead of its actual amount, £773,108,310,
and ils actual annual charge £27,080,458; showing that the
loss entailed on the country by the plan pursued, of funding
the debt in stocli bearing a nominal low rate of interest, is
£94,(501,033 of cai)ital, and £3,938,724 of annual charge.
It is not ))ossible to calculate with certainty the further
benefits that uuist have resulted from the repeal of five mil-
lions and a half of annual taxes, which would have been
practicable beyond the amount actually repealed; but it is
probably much under-estimating those benefits to state that
among their results the amount of public income over expen-
diture would have Ijeen so far augment((d that the unredeemed
debt would not at this time have exceeded six hundred mil-
lions, while the annual charge upon the same would have
been twenty-one millions, a state of things at which, if the
peace of Europe should continue undisturbed, and if our pro-
gress should only ecpuil our past experience, we may possibly
hope to arrive in about half a century.

Tlie charge of inconsistency on the part of our finance
ministers is fully deserved by their adoption of two meastncs
having for their objects results exactly opposed to each
other. These measures are, first, the creation of what is
called the dead-weight annuity; and, secondly, the conver-
sion of pcrj)etual annuities into ainiuities for lives or for
terms of years; the effect of the first being to l)ring present
relief .at the expense of future years, while the second in-
creases the present burden with the view of relieving pos-
terity. When the measure for commuting the half-pay and
l)ensions was brought forward in May, 1822, the charge upon

•h

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140

ECONOMIC HISTORY.

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the country on that account was estimated at about five
millions. This was necessarily a decreasing charge, and
from year to year the public would have been relieved by the
falling in of lives until at the end of forty-five years the
whole, according to probability, would have been extin-
guished. In order to turn to present advantage this pros])CC-
tive diminution of burden, it was attempted to commute the
whole of those annually diminishing payments into an un-
varying annuity to last during the whole probable term of
forty-live years; and it was computed that, by the sale of a
fixed annuity of £2,800,000, funds might be obtained in
order to meet the diminishing demands of the quarterly
claimants. This scheme was only partially carried into
executi(m by means of an arrangement made with the Bank
of England, under which that corporation advanced to the
government, in nearly equal payments, during the six years
from 1823 to 1828, the sum of £13,08iU19 as the purchase
money of an annual annuity of £080,740 to be i)aid until
1807. The result of this operation has been to save the
immediate payment, during the years in which it was in
progress, of .£9,574, 979, and in return to fix upon the coun-
try the annual payment for thirty-nine years thereafter of
£585,740.

In the prosecution of the opposite plan of converting per-
petual annuities into annuities terminable at stated periods
or upon the occin-rence of certain natural contingencies,
the amount of terminable annuities has advanced from
£1,888,83.5, at which it stood at the end of th , war, to
£3,755,099 at the beginning of the year 1850. It would
o(H'u))y considerable space to exhibit the i>rogress of this con-
version from year to year, and it will j)robably suffice to
cxemi)lify the result of the operation during one year (1834).
In that year the perpetual annuities received in exchange
amounted to £6,500,169 of capital, bearing an annual
charge of £202,831, and there were granted in lieu of
the same, —

FINANCES OF ENGLAND. 141

Annuities for lives £195,337

" for terms of years 313,138

Deferred annuities 2,871

Together £511,346

makinii; a present annual increase of £308,51-1 to the public
burdens in o.ucr to ensure the earlier extinction of the
charge of £202.831.

It is not necessary here to inquire which of those two
modes of proceeding is preferable. Under different circum-
stiuiccs either of tlicm might be wise or prudent, but it is
(juite im|)Ossible that at the same time, and consequently un-
der the same circumstances, both could be either wise or pru-
dent; and the minister and legislators by whom the plans
were proposed and sanctioned must be allowed to have stulti-
fied themselves by the o])crations. Of the two courses that
is assuredly the most generous under which the parties by
whom it is adopted subject themselves to additional burden
in order to lighten the load for their successors; and indeed
it would seem no more than an act of justice on the part of
those by whom the debt was contracted to adopt every means
within their power for its extinction.

It is singular that, with so much experience and so much
of scientific acquirement that could have I)een brought to the
correct elucidation of this subject, the tables adopted for the
creation of terminaljle armuities were incorrect to a degree
which entailed a heavy loss upon the jMiblic. The system
was established in 1808 and during the first year of its
operation annuities were granted to the amount of X58,r)06
lO.s'. ])er annum. Of that amount there continued payable
£23, 2.")1 ))er annum at the beginning of 1827, when, to adojjt
the calculation of the actuary of the national debt, as given
in a report to the Chancellor of the Exchequer, the public
had already sustained a loss of more than £10,000 by the
transactions, besides having the above annual sum of £23, 2')1
still to pay for an indt'linite term. In this report of Mr.
Finlaison he states that the loss to the ]uiblic through mis-
calculation in these tables was then (April, 1827) proceeding

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ECONOMIC HISTORY.

at the rate of .£8,000 per week, and during the three preced-
ing months had exceeded £95,000. The discovery of this
bUnider had been made and pressed upon the attention of the
finance minister as early as 1819, but no active steps were
taken to remedy It until 1828, and even then the rates at
which annuities were granted upon the lives of aged persons
were, after a time, found to be so unduly profitable to the
purchasers, that the government was again obliged to inter-
fere and to limit the ages upon which life annuities could be
obtained.

It is quite impossible that any similar scries of blunders
could have been committed by any private persons or as'- .-
ciation of individuals whose vigilance would have been
sufliciently preserved by their private interest, and it is dis-
graceful that the government, which could at all times com-
mand the assistance of the most accomplished actuaries,
should have fallen into them. It is yet more disgraceful
that after the evil had been discovered and pressed uj)on its
notice, so many years were suffered to elapse before any step
was taken to put a stop to the waste of public money.

It would require a voluminous account to explain all the
financial operations of the government during the period
embraced in the foregoing statements. In the earlier years
of that time, while on the one hand the minister was an-
nually borrowing immense sums for the public service^ an
exi)ensive machinery was, as we have seen, employed to kcej)
up a show of diminishing the debt, and by this means the
people were brought to view with some degree of compla-
cency the most ruinous addition to their burdens under the
expectation of the relief which, through the magical effect of
the sinking-fund, was to be experienced by thom in [future
years. The establishment and sup[)ort of this sinking-fund
was long considered as a master-stroke of human wisdom.
Having since had sulhcient opportunity for considering its
effects, M'e have arrived at a different conclusion, and can no
longer see any wisdom in the plan of borrowing larger sums
than were wanted, and })aying in conse(iuenee more dearly
for the loan of what was actually re(iuircd in order to lay

, /r*»»*i"'

FINANCES OF ENGLAND.

143

out the surplus to accumulate into a fiind for buying up the
debt at a higher price tliau that at which it was contracted.

In the fourth report of the Select Committee on Public
Income and Expenditure, which was printed by order of the
House of Connnons in 1828, there are three statements
showing the difference between the public receipts and dis-
bursements in the ten years ended 5th January, 1802; the
fourteen years ended r)th January, 1816 ; and the twelve
years ended oth January, 1828, an abstract of which is here
given; and the statement is further continued for the twenty-
two years ended 5th January, 1850 : —

BALANCES OF INCOME AND EXPENDITURE.

Ten Years ended 5lh Januaiy, 1S03.

Expenditure . £447,812,77.3
Income . . 268,659,322

Expenditure
more tlian
income . .

.£189,153,451

Raised by creation of
debt

Applied to redemption

of debt £180,340,440

Money raised for Aus-
tria 4,600,000

Diseoiint and eliarges
of receipt .... 2,410,497

£380,997,.380

Balance 5th January,

1802 £0,027,021

Balance 5tl) January,

1792 4,540,029

Fourteen years ended oth Jiiniiari/, 1S16.

Expenditure £1,059,083,370
Income . . 823,354,000

Expenditure
more than
income . . £230,329,310

Raised by creation of

debt .....
Applied to redemption

of dil)t £651,952,051

Raised for East India

Company .... 2,.50O,0OO

Discount, etc. . . . 2,887,199

187,302,937
£193,034,443

4,480.092
£189,153,451

£900,107,717
657,.3.39,850

Balance 5th January,

1810 £15,406,578

Balance 5th January,

1802 9,027,021

£242,707,867

0,4.38,557
£236,320,310

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Income
Expenditure .

ECONOMIC HISTORY.

Twelve Years ended 5th January, 1828.

£C70, 198,280
640,000,021

Income more
tlian expen-
diture . .

Applied to redemption
of debt

Discount and charges
of receipt ....

Raised by creation of
debt

£C80,454,422

544,688

£680,999,040

640,6:50,450

Balance 5th January,

1810 .£15,465,578

Balance 5th January,

1828 4,228,76.3

.£29,231,766

Twenty-two Years ended 5th January, 1850.

£40,408,690

11,2.30,825
£29,231,765

Income . .£1,002.219,072 : Applied to redeiuptinn
Expenditure. 1,076,045,391 of debt, beyond the

Income more
than expen-
diture . .

£10,574,281

amount of debt cre-
ated

Balance 5th January,

1850 £9,748,639

Balance 5th January,

1828 4,228,753

£11,064,405

5,519,786
£16,574,281

It api>oars from this statement that during the ten years
from 5th Jan., 1792 to 5th Jan., 1802 : ~

The public expenditure exceeded the income . £180,153,451
Between 1802 and 181G the excess of expendi-
ture was 230,329,310

Excess of expenditure during twenty-four years
of war £125,182,701

During tliirty-four j'oars of peace, between
1810 and 1850, the excess of income over
expe.iditure has been 45,779,010

At this "ate it wouhl require three hundred and sixteen
years of peace to cancel the debt incurred (hiring twenty-four
years of Avar, or thirteen years for one; but the eom])arison is
even more unfavoral)lo than this, l)ecause at the time of bor-
rowing the rate of interest is high and the * ?,lue of })ublic

FINANCES OF ENGLAND.

146

securities low, whereas at the time of liquidation the reverse
of these circumstances is ex])ericnccd ; so that on the most
favorable suitposition it requires iiftecn years of saving in
jicace to repair the evil consequences of one year of war ex-
j)cmliture; at which rate our successors who may be living
about the close of the twenty-second century might, if during
all that time the nation should remain at peace, find them-
selves relieved from that portion of the pul)lic debt which
has bei'u contraetetl since 1792. On the other hand, this
period would be somewhat hastened through the extinction
of that part of our puljlic debt which consists of terminable
and life annuities.

It is necessary here to explain briefly the financial ])lans
which have at different times within the present century been
proposed by the Government and sanctioned by Parliament.

At the breaking out of the war in 1803 it became neces-
sary to meet as far as possible the increased expenditure of
the country by the imposition of new taxes, among which
was included the income-tax under the name of a property-
tax. The greater part of these taxes were declared to be of
a temj)orary character, and were to cease in six months after
the re-estal)lishment of peace. It socm became apparent,
however, that to adhere to this stipulation would be impos-
sible, since the exigencies of the country recpiired the con-
traction of loans, the interest of which could not be provided
except by the gradual appropriation of one jtortion after
another of the proceeds of the war taxes. Under these cir-
cumstances it was proposed in 1807 by Lord Henry Petty,
then Chancellor of the ExelRMpier, to depart from the usual
practice of conlining the financial arrangements to the cur-
rent year, and to determine at once, as far as was possil)le,
the amount which it would be necessary to raise during each
one of a series of years, providing beforehand the means for
uieeting the increasing burden. It was assumed that the
loans to be raised in 1807 and the two fcdlowing years
shoidd be each £12,000,000; that for 1810 was stated at
.£14,000,000, and during each of the ton ensuing years the
amount was assumed at £10,000,000. It was calculated

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ECONOMIC HISTORY.

that, the intorost ui)on those hxans Avouhl bo mot, up to that
for the year 1811, by the falling in of annuities, after which
the war taxes were to l)c pledged at the rate of ten ])er cent
upon each loan; five per cent to pay the interest, and live per
cent to accumulate as a sinking-fund for discharging the
principal. The deficiency that would be occasioned by this
appropriation year by year of the war taxes was to be met by
su])plementary loans, for the interest on whicli, and to pro-
vide a sinking-fund for their redemption, it would be neces-
sary to impose new taxes. By these means it was expected
that the country would have been able to meet the chai-gos of
an ex])onsive war during a series of years with only a moder-
ate addition to the public burdens. The ministry, of which
Lord Henry Petty formed a part, having gone out of oflice
before the next annual linance arrangement was brought for-
ward, his plan was abandoned, and no attempt has since been
nuide by any minister to form linancial arrangements em-
bracing the circumstances of future years.

The exjjlanations offered each year in the House of Com-
mons by the Chancellor of the Exchequer concerning the
financial condition of the country are not given in such a
form as to be readily understood. In the accounts by which
the statements arc accompanied, the interest of the debt and
other permanent charges are not included, and on the other
hand nothing is stated regarding the produce of the perma-
nent taxes, forming what is called the consolidated fund,
excejjt the amount of its surplus or deficiency, as the case
may be, after providing for the permanent charge upon it.
The Builin't, as it is the practice to call this annual exposi-
tion, explains on the one hand the sums roiiuired for the
public service during the year under the different heads of
Navy, Army, Ordnance, and Miscellaneous Services, to-
gether with any incidental charges which may api)ly to the
year; and on the other hand are ^\\cn {he ways and means
for meeting the same. These ways and means consist of the
surplus (if any) of the consolidated fund, the annual duties,
and such incidental receipts as come in aid of the national
resources.

FINAXCES OF ENGLAND.

147

The detail of tliuso hiulfjcts would conscciuently throw but
little light upon the linanoiiil condition of the country, if
even thuy had been preserved in an authentic form, which has
not been done. Any statements of the kind that could be
offered must be drawn from unauthorized publications, in
which they have been given without regard to methodical
arrangement, while, as respects some years of the series, wc
sliould seek in vain for any statement whatever.

1 ■■ rf

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148

ECONOMIC HISTORY.

VII.

LA POLITIQUE COMMERCIALE DE LA
IIESTAUIUTION.

FuoM Lkvasski-u's IIistoiuk des Classes OuvitifcuEs en Fiiance
DEi'fis 1781) jusQu'A Nos Jouus,' — Vol I. in-. 405-128.

LES lois coinmcrcialos qui dcvralent etrc principalemcnt
fondiics 8ur Ics bcsoins de la consummation, sont sub-
ordonnd'cs en r^ialitc a la politifiuc. Faitcs i)ar dcs hommcs,
il Icur arrive trop souvcnt do porter remj)reinte dcs i)assions,
ct de rcprescnter moins la nature des rapi»orts dconomiqucs
d'unc nation, que Ics intercts particulicrs et les prejug(5s de
ccux qui la gouvernent.

11 n'l'st |)us de lois huinaincs qui soicnt i\ I'abri de ce
ddfaut ; mais il n'cn est peut-etre i)as qui en soicnt jjIus
ordinairement afTcct(?cs que les lois relatives au commerce
cxtcrieur. La Rcpubliipie ct TEmpire s'etaicnt acharnds a
la lutte centre les Anglais ; la legislation douaniere fut alors
urm(!C en guerre ct li<^rissde de prohibitions belliqucuscs : lo
but dtait dVcarter rcnnenii de la place. La Restauration fut
l)acifique, mais obligde de se concilicr les grands propri(jtaires
ct les grands manufacturiers (pii formaicnt la majoritd do la
Chambrc; la legislation douaniere se pliant h. leurs exigences,
continua a se hdrisser de {)rohibitions mercantilcs ct <5goistes :
le but, cctte fois, dtait de r(?servcr le marcli(5 {\ ccux qui fai-
saient la loi.

Le systeme continental dtait devcnu odieux aux populations.
Il dtait certain que le nouveau gouvcrncment commenccrait
l)ar le renier. D'aillcurs la force des choses y poussait. A la
suite des armdes dtrangorcs, dtaient entrees, dans nos ports

1 Paris : L. Ilachettc et Cie, 1867.

LA POLITIQUE DE LA llESTAURATWN.

149

lations.

Iicerait
Ala
ports

ct par toutos nos frontitJrcs, Ics donrdcs colonialcs ct les
marohaiulises anglaiscs. Lcs prix avaiout <5prouv(j unc revo-
lution Houilaiuc, ot Ton voyait so produirc cctto bizarrcrie, quo
Ic sucro, par cxoniple, so vondait coimmmuiuout 38 sous la
livro au moinoiit ou la loi lo frap|)ait oiiooro, on droit, d'uiic
taxo do 44 sous, ct empochait ainsi les nogociauts do rctircr
lcs approvisionncmcnts (pi'ils avaiont dans loa cutrepots : il
otait impossihlo do maiutcnir la loi. Lcs Anglais d'aillours,
douts lcs d(f;sirs d'taiont alors dcs ordrcs, en soUioitaicnt le
rii])pol. I'ou do jours apros son cntrdo i\ Paris, Ic comto
d'Artois signa deux ordounances, Tunc qui supprimait lea
('ours prevotak'S,^ I'autrc, (pii levait lcs obstacles mis au com-
morco niaritiinc.2 Los taxes ])i"oliiliitivcs furent remjdacecs
])ar un droit tres modere sur lo sucre,^ ct le cafe ct par un
simple droit do balance sur lcs cotons en lainc.

Cottc mcsure sc lieurta contro une double opposition.
L'administration im])driale, formdc i\ rdcolc do la prohibition,
s'c'tait habituoc depuis treizo ans a en pratiquer les maximes ;
ellc t'tait en gon<!ral imbue dc I'csprit du systeme ct d'autant
moins disposoo il y rcnoncer que ringdrcnce dc I'Etat dans
lcs affaires commcrcialcs lui donnait plus d'importaucc. Do
leur cote, lcs grands industriels ctaient dcsireux, comnic tou-
jours, do privileges ct jiartisans dcs restrictions douaiiiercs.
.Mais ils etaicnt pcut-ctro plus cxcusal)lcs qu'c\ d'autres
epoques, parcc (pic leurs int(irets etaicnt plus quo jamais
ancrds sur le fond dc la prohibition. Grace ^ lours richesscs,
ils dtaient appcles a reprdsenter Tindustric fran^aisc, ct, par
unc illusion asscz ordinaire, disposes a prendre Icurs intercts
jjour les sicns. Ils allaient, avec lcs grands jiroprictaircs,
dieter lours conditions aux ministrcs.

La Restauration se trouva placec ontro lcs deux ponvoirs
de I'dpoquc, Tadministration ct la Chambre, (pii votilaiont la
protection, Tune par habitude, Tautro par calcul. La protec-
tion triompha ; lcs tarifs prirent un nouvoau caractorc non
molus exclusif sur certains points (pic cclui de rEmpire, ct

1 Ord. (In 20 .ivril, 1814.

2 Ord. du 23 avril, 1814. Voir le Moniteur de 1814, p. 461.
^ Le Sucre fut taxe a 6 sous la livre.

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150

ECONOMIC HIS TO R Y.

d'uilleiirs bcaucoti]) plus diiiigcroux ; parcc qu'on prdti'udit
driver en uii 8}>tt'inu conuncrcial n'guliur, co qui n'avait 6t6
juH(|ue-li\ qu'une conscMiuencc regretti'o do IV'tat du guorrc.

Ijii I'l'luriiic ilu coiiitu d'Artuis soidcva uno tcmpC'tt! do n'rlji-
niiitions. Ou aurait pu croirc que k-s mauufacturiors soraioiit
satisl'aits dc ho pntcurcr la luaticJre promic'ro h bun niarelu'.
II u't'ii fut riuu. I/iutt'ret du prdscnt lea avcuglait asscz sur
riuttTct do I'avouir, pour quo les cotonuicra dc Toucst ct du
nord, 80 protoiidissout ruiiu's, ))ar('o ([tio rahaissoniont dos
droits 8ur lo cotoii allait diiuiiuior d'autant la valour dos
(jtolTos (pi'ilH avaiont ou niagasin. lis i)(5tilioiinorcnt, 6cv\-
viront (ja'auc " inunonso population scrait r(5duito au ddses-
poir," quo '■ la prohibition ost do droit politi(iuo et social," ct
(pio, dopuis lt( i'abrioaut jus(pi'ii Touvrior, tons ont " lo droit
do fournir cxolusivoniont a la consonunation du i);iys (pi'ils
liabitcnl."' lis domandaiont oO millions d'indoninito, ot la
prohibition dos Ills ct dos tissus dc colon : ils obtinrcnt la
prohiiiition.

Los niaitros do forgos (^devaiont d'autrcs ])rdtcntions. L'Kui-
pirc n'avait impost', il ost vrai, qu'une taxo modi(pio do 44
francs par lonno (lOOO kilog.) sur Ics tors en barrc. Mais la
guerre formait uno barriorc plus ditlicilc h franchir quo Ics
douanos ct duraut vingt ans Ics hauts fourneaux du conti-
nent u'avaicnt pas eu i\ rodoutor los i'ors anglais. Apros la
paix, ils so trouvoront tout ii coup surpris par uno concur-
rence qui livrait scs prodiiits a 30 ou 40 pour 100 au-dossoiis
dos prix ordinaircs, ct par unc crisc commerciale qui paraly-
sait la vento. Vivos reclamations. Lcs maitrcs dc forges
voulaiont siuon uno indenniite, au moins le setpiostrc imnu?-
diat dos fors (pii otaiont encore en entrepot et la ]irohibitioa
des fors etrangers; ils obtinrcnt Ic (juadruplemont du droit
(pii, decime compris, fut portd k 1G5 francs, taxc rcj)rdsen-
tant environ 50 pour 100 dc la valour dc la marchandisc ou
cntre]»ot.2

Lo baron liouis n'avait pu resistor <\ I'oragc. Cepcndant il
nc dissimula i)as (pie Ic gouvernemont approuvait pcu rcsj)rit

' Voir aux Arch, de I'Emp., I'original d'uno <le ces petitions (25 avril, 1814).
'■^ Voir M. Aine, Tarifs des douanes, chap, xviii.

LA POLITIQUE DE LA ItESTAURATION.

If)!

lant il
'esprit

1, 1814).

do mnnopolc dcs iniiniiriicturii'i's. " Loh prohiliiliuurt aliHolucs
(k'trui.sL'iit ri'imiliitioii. Ausni cspt'roiiH-iKiii.s," ajoiitiiit-il,
" poiivoir, aiix sossioiis prochaiiics, dciuaiuler la r<^ducti()n h»ic-
ccssivo (111 tarif (luo nous propoaoiis aujourd'hui siir los fcrs." '
11 so faisait illii.sioii. Les iutc'rots soiit plus toiiaces. lis so
]>r<^cipitrr('nt i\ la ciirc'o, r(^claniaiit i\ I'divi, (pii pom- les
colons, (pii puiir les C'iuvcurs, (pii pour les niaiiiil'at'turicrs ;
i;t CO que cliacun d'eux obtiiit ii titro de fuveur passagere, il
pr^^tcndit le consorvcr coinine unc propriety;, 11 s'en lit niomo
uu litre pour ohtcnir dc nouvoaux avautag(!S. ("est aiiisi *\\w
Ics lois proti'ctionistes se suocederent ct s'aggraven;ut de
session cii scMsioii.

liC gouverncnient sonireait <\ fairc unc rcfonto gen(1ralc du
I aril'. 11 n'cn cut pas le loisir cu 181-1, et so coutenta de pre-
sentcr uii projot par lo(|U('l il auforisait le transit, donnait au
pavilion lranf;ais la faveur d'une surtaxe, et relevait, inais a
uu taux encore trcs moderc, certains droits abaisses par I'or-
donnance du '1"^ avril.''^ il s'excusait de no pas fairo plus,
j)arcc qtu; les douanes venaicnt a peine d'etre rdtablies, et il
liasardait tiuiideuient, ([ue " (Taillcurs le bon inarclie provo-
(puiit la cniisDniuiation." Tel u'otait pas I'avis de la (Miain-
bre, qui vota la loi,-'^ niais v\\ donnant une lo(;on aux ministres.
" En prineipe d'econoniie politi(pie," disait lo rapporteur, "les
douanes soiit (Stabiles pour assurer la prosp(^rite dcs manufac-
tures, pour fairo fleurir Tindustrie nationale. Elles sauvcnt
le comnieree en donnant aux fabricants franqais, par dos pro-
hibitions ou dcs droits sur les j)roductions de Tindustrie
('traniri'rc, ravantagc de la concurrence dans le marcli^- in-
terieur ; elles sont utiles au consommateur en lui assurant a
■niiiindre i)rix les niarcliandiscs qui so fal)ri(picut exterieurc-
mcnt avcc des niatiC-rcs premieres indiiirnes, (pie IV'trau'^er
aecaparerait. sons la prohibition ;\ la sortie. . . . L'institution
(' lli'inont nationale, lorsquc la combinaison des dif-

'(" liMuents sera parvcnue au point d'activcr dans les

Anil', T'lriis (li'n ihnnnfs, p. 02.
.»t' 40 il (in fiMMcs ]mr quiiunl nietriqiic sur le sucre brut,

sur lo cafo,

(iO "

100 " " "

* Loi du 17 (leccmbrc, 1814.

i;)i

sur Ic cacao.

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ECONOMIC HISTORY.

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mains d'un million d'ouvriers I'instrnmcnt qui les nourrit,
lorsquc ccttc combinaison repoussera par des proiiibitions
n<jces8aircs les marchandiscs dtrangdrcs dont I'cntrde porterait
pr('jnclice aux marchandiscs de meme ospecc qui sc fabriquent,
se vcndent et so consomment dans I'inWrieur." *

Lc ministerc comprit la le^'on, i)rorait de rddiger scs lols do
douanc en vuc de la protection,^ ct prdscnta, en 1810, uu non-
veau projet pour refondrc le tarif do 1806, qui, jusquc-ljl,
n'avait subi que des modifications do ddtail. 11 proposait dca
droits plus forts. La Chambre les rcnfor(ja encore,^ acccp-
tant, sans en poser la valour, les arguments qnelquefois singu-
liers que suggeraient les intdrets on les prdjuj^'s. Un ddputd
declarait la cdrusc de Clichy excellcnte pour la consomma-
tion, supdrieurc meme, do I'avis do tout lc monde, i\ cello do
IloUande ; mais, ajoutait-il, le vulgaire vout le cac'iet des
manufactures dtrangi'res ; " pour Ten ddgouter, il demandait,
et il obtint un droit dnormo sur la cdruso etrangere."^ Un
autre voulait qu'on imnosiit fortemcnt lc thd, parcc que les
Anglais lo fournis«c !. ct quo " c'ost autant do numdrairc qui
sort do Franco." ^ Sur la demande des agricultcurs, la pro-
hibition des ])oaux, i\ la sortie, fut lovde d'uno part, et d'autrc
part, I'entrde dos eaux-de-vie, autrcs que de vin, fut prohibdo.
On rdtablit, en ploino paix, les rigueurs de la Idgislati^n prd-
votal'^, et Ton autorisa la recherche et la saisie j\ rintdrieur
des dtolTos proliibdes."

La Chambre introuvable fut dissoutc. Mais lo cabinet cut
besoin, on 1817 comme en 181G, do s'appuyor siu* uno ma-
joritd qui, si ello no profossait pas les memos sentiments poli-
tiquos, avait en agriculture et on Industrie les memos intdrets

' Hnpport do Mnffnii'-firandprez, MonUeur de 1814, p. 1253.

"- Mwillriir de 1815, p. l'J53.

8 Le ({"uvomeincnt, par excmple, proposait do cr(?cr un entrepot h, Lille.
Les (kputt'ji des ports de nier se re'eriferent et flrent, aprJis un long dcTiat, sup-
primer I'lirticle.

* Mniiitpur de 1810, p. 440.

'> 11)1.1, p. 4.'?».

" Loi (hi 28 (irrll, 1810. — Art. 50. A dater do la publication de la prescnte
lol, les colons fllrs, les tissus et tricots de colon et de laini- 't tons autres tissus
de fabriquei< etrangcrcs proliib^s seroni rcchcrches ct saisis ians toutc I'c'tendue
du royaume.

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LA POLITIQUE DE LA RESTAURATION.

153

ct les mOmcs exigences.^ La legislation commercialc se sentit
done pcu till soullle libdral qui inspirait alors Ic gouvcrnc-
mcnt. Lorsquc la question des tarifs se produisit h, la session
dc 1817, lo dircctcur g(;n(jral dcs douanca so contonta de
glissor tiniidement un (iloge platonique de la liberty des
ecliangos,^ tout en ddclarant aussitut no vouloir porter aucune
atteinte an systeme proliiljitif, " qu'il est," ajoutait-il, " sage dc
respecter aussi longtemps que nos manufactures se croiront
fondocs a le considerer comme leur plus solidc appui."

Les doput<;s voulaient non-seuleraont le respecter, mais le
fortifier. Les propridtaires, en favour des raaitres do forges
auxquels ils vcndaieut Icur bois, chcrchaicnt ^ (jcarter la con-
currence des fcrs strangers, et ne prenaicnt gnerc la peine dc
dissinuiler le mobile qui les faisait agir.^ Les iudustricls,
pcnsant que " la prospdritd des manufactures pent soul pro-
curer des consommateurs utiles a, I'agriculture," * voulaient
qu'on supprimat tout droit d'ontr<;e sur les matiercs premie cs,
et lo directeur g(!n<;ral avait quelquc peine <\ ddfendre les in-
t<^rets dn (isc. La loi du 27 mars, 1817, ajouta quelques re-
strictions nouvelles au commerce cxtdrieur.

Cello du 21 avril 1818 fut le sujet d'un curieux ddbat.
Avant 1780, les provinces d'dtranger effectif n'dtant pas
comprises dans la circonferencc des douanes, commer^aient
lil)rement avec les pays voisins ; I'Alsacc dtait du nombrc, et
avait gagnd cinq millions par an au transport des marclian-
dises entre rAUemagne et la Suisse. La Rdvolution, en por-
taut la ligne des douanes ^ la frontierc, avait interrompu ces

* Ccpcndaiit le rapporteur, Morgnn de BcUoy, parla avec moderation et fit
di>.s vceiix pour Tontier atTrnncliissoment des niatii'res proiuiorcs quo les circon-
siiinces III' periiK'ttaient pas do di'frrdvor. — Munilriir do 1810, p. 2'Jl ; voir aussi
la loi qui fut pi-oniulgut'o le 28 avril, 181G.

'* Sans (loute il est louable d'annoncer, liaiitoment lo df'sir do cetto lieureuso
revolution dans le systeme commercial du mondo ; niais nous n'aurons pas la
Imrdiosse de vous conseiller d'on dcvancer I't'poque. — Monileur de 1817,
p. UG.

' Lo goncral Angior proposait un amondcment pour porter de 20 }i 30 fr. par
100 kil. le droit impose' par la loi du 21 docombre, 1814, sur les fors lamino's, que
k'S L'trangors fabriquaicnt par des procedos cconomiqucs. — Moniteur de 1817,
p. 286.

* Monileur de 1817, p. 278. Discoure du comte Beugnot.

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154

ECONOMIC HISTORY.

relations; TEmpire, par ses prohibitions centre le commerce
maritime, les avait en partie renoudes ; muis, dcpuis 1815, lo
bdndfice en avait pasad au grand-duclid dc Bade. L'Alsace
rdclamait.' Lo ))rojet de loi donnait cnfni satisl'action,^ en
antorisant par divers bureaux le transit de certainos mar-
chandises et surtout des dcnrdes coloniales. Aussitot les
])orts de mcr, dcfenseui-s ordinaircs de la liiiertd conmierciale
(juand elle servait les intdrcts particuliers dc leurs armateurs,
s'dcrierent (pi'en pcrmcttant le jtassagc des denrdes coloniales,
on faeilitait les ventcs des Ilollandais en Suisse, au detriment
dc la marine fran^-aise qui avait la pretention de fournir seule
le Sucre et lo cafd h la Rdpuljlitjue helvdtiiiue. En vain I'ad-
ministration jjrouva-t-clle surabondamment qu'il s'a^issait
seulement de faire prendre aux marcliandises la rive gauche
du Uliin au lieu de la rive droilo, et (|ue les 11' 'landais n'en
vendraient pas une caisse de plus a la Suisse, ni nos ports
unc caissc dc moins.'^ La connnission rejeta I'article ; et la
Cliambre, malgrd les i)rotestations des rcj)r(isentants d(! I'Al-
sace, vota sa connnission. Cc fut seulement un an |)liis tard,
i\ la suite d'une eufpiete, quo le miuistero, jicrsistant .bins son
dcsseiu, jiai'vint a faire voter lo transit par TAlsace, a la I'aible
majority de 17 voix sur 195 votants.*

Cost par lo memo ministore que fut prdsentde la premiere
loi conslituant en Franco, a rimairede rAn<rl<'t(>rro, lo systome
de Vrahi'l/c moliilc. '•'• L'inteiet <ie bi propridtd ot do riudustrie
atrricob;" I'avait diofoo. I'our la promioro fois, les rostriotions
douanieres robitivos au oounnercc des cdrdales furent dirigdes,
non plus contrc rex|)or<ation conuno on I'avait fait par lo
pas8<!!, mais centre Timpertation ;^ il falbiit quo los marches

' Voir les v<riix ilii Rns-Rlii!i, Rpssiona des Tonsoils jn'iu'rntix dc 1817 ot dc
1S18. Kn 1810, le (\)iiseil k'''"'"'' so jdaiKiiit (iiie k'8 conditions fiiitcs nu tran-
sit f nssciit trop oncrciisca. Duns les annccs suivanfos, w fiit le tour des dcpnrtc-
nicnis dc I'ancicnnc Lorraine qui rc'clanicrcnt dc nicnie Ijc'nc'fice que I'Alsnoe.

" Article ;!1 du projct.

^ Voir M. Ami', Elmle aronnmiiiiifl .iiir le Itirifds (li)Uiinrs, p. 84, et le ^foniteur
de 1818, p. .'!•'!:'.. Le rapporteur Morfian dc Hclloy parle "des alarmcs des no'j{o-
cianfs dc» ports qui ont ii sc pn'valoir de la possession et des lois solcnnellcs."

* Loi .lu '2C, niai, 181!).

* Cettc loi du 10 juillet, 1810, 1'talilissait a I'lniportation un double droit;
droit fixe de 25 centimes par quintal de grains pour les navires fran\'aig, de 1 fr.

LA POLITIQUE DE LA RESTAURATION.

loo

rcstasscnt aux fcrmiors uatiouaux, dut Ic pcuplc payer cher
sa suljsistaucc.

La nalure dejoua Ics calculs dos legislatcura. La ri-colto
ftit ahondante, ct li'S prix, (juo la disottc do 181G avait fort
cxagort'rt, haissiToiit. Do noiivi'llcs ri^clainations so lircnt
ontcndre, d'autant plus vivos (niV'Ucs (5taient plus suros d'etre
favoralilonu'ut dcouteos sous radniiuistratiou du comte dc
Villt'lo. On accusait riniportation. Verilication faito, il se
trouva que cettc iini)ortatiou avait i\ peine exeede I'expor-
tation do 700,000 hectolitres. On se rejeta sur rdlet moral
dcs arriva<^es (pii intiuiidaient, disait-on, la hausse.

II fallut ime nouvelie loi, (pii donnat de nouvelles facilit<?s
i\ Texportation et init plus olistaeles a riin|>ortation. Pre-
sentee dans la session de 18-1, par le ministere, remanide et
eonsidt'raltlement ai^irravee par la conunission, ello lut vutee
par une nonil)reu8e majority.*

On se felieitait de niettre ainsi les apjriculteurs c\ Tabri de la
eoneurrence. On n'oubliait qn'mie chose ; I'inti^ret des masses
dont le pain est le principal aliment. 11 est vrai (pr.en (K'pute
etait Venn soutenir (pie la eherte du ]>ain etait un bien pour
les ouvriers, parce qu'elle les ohlijreait a travailler avee plus
d'ardeur pour vivre. !Mais cetti; sin<i;ulierc theorie trouva jieu
d'cclio ; les proprietaircs ii'avaitMit aueune intention d'ait'anier
la classe ouvriere : seulenient ils soni;'eaient i\ cux-memes.
IJeujauiin Constant le leur lit sentir. " Je me hornerai," s'ecri-
ait-il, interronipu par les murnuires dt; rassemblde, " je me

2") ])()iir li's nnviros t'tranjicrs , ilroit variiiblo di- 1 franc par cliaiiiic franc dc
liaissi' lies ([u'oii di'sccnilait dans k's triiis rc'tiimis dc la France amlcssous dcs
prix norniau.x dc 'Z-\. 'Jl, ct IS francs; a la liinitc dc 20, IK, ct I'J frnnca, toute
iinportrtlion c'tait intcrdite. La loi fut vr)t<'c a une innJDi'ic ilo 2HI voix
contrc 28.

' I'ar 2S2 vdix cDntrc ")l. Dans cctic loi ilu t jiiillct 1>*2I, la taxc variaMc
connncncait ii ctro pcrcnc (piaiid les prix ctaicnt ii 2il francs dans la premiere
ilassc, il 20 ilans la dctnii'rc, ct les importations ccssaicnt nu taiix cle 22 ct dc
iS francs. L'i'cliellc nioliilc a rimportaiions fonctioiniait cntre 20 et is francs,
c'cst-inlirc (lu'elle fut e'lcvee <lc 2 francs audessus de la liniile de IHl'.t, I,'e.\-
liiirtalion, an contrairc, i>erinisc scidenieiil jiisqu'ii 2:t fr. piir la loi de IHII), cut
2.") francs pour liinite en 1S21 : d(nil)lc avanl;l^;c pour Ics aijricultcurs, qui pou-
vrticnt exporter plus longtcmps, et qui ctaicnt jdus tot ii I'aliri do la concurrence
ctnmgure.

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166

ECONOMIC HISTORY.

borucrai a vous dire qu'il est fachcux do voir que vous faitcs
rencherir lea dcnrees que vos tcrrca produisent et dout vos
grciiicrs sont remiilis." ^

CepeiKlant Ics elTets ne rdpondircnt pas h Tattcntc dcs pro-
pridtaires. Le bid baissa pour aiuai dire d'aundo eu anndc :
il toniba a 14 fr. 80 cent., en 1825. Les tarifs u'y faisaient
rieu. Pourtant ils dtaicnt rigoureux ; car diirant les neuf
amides qui s'dcoulerent do la publication de la loi c\ la rdvolu-
tion de juillet, I'iniportation ne fut permisc que pendant un
scul mois, en fdvrior, 1828. On ne ])ouvait aggravcr le tarif.
Mais '- i)our calmer Topiuion," on porta, en 1825, une loi qui
supprimait Tcntreput lictif dcs grains.

L'evdncmcnt ijui avait prdcipitd la chute du ministorc, ddji
chancelant, dans lequcl le comte Docazes avait tcntd un raj)-
proehement entre los convictions ro3alistes et les ))rincipes
libdraux, n'dtait pas do nature adoucir Ic rdgime douanier.
Les grands propridtaircs prirent une influence plus decisive et
le systomc protecteur se consolida : tdmoin la loi de 1821 sur
les cdrdalcp. Los iutdrossds ne se lassaicnt pas do domandor,
et cluuiue concession faisait naitre de noiivelles exigences
qui se iiroduisaient a la tribune, dans les pdtitions, dans les
vocux des conseils gdndraux. Tout argument leur dtait bon.
L'industrie languissait-elle ; ils dddaraient, comme les maitres
de forges de la Haute-Sauiio, qu'ils dtaicMit menacds de mine
par Tintroduction tro[) facile des fers dtrangers et denian-
daient qu'on renfor(;at les barriered.''* L'industrie prospdrait-
clle; ils dddaraient, comme les fnln-icants de Saint-Quentin,
qu'il importait " an jn-ogres de l'industrie miinufacturierc de
la rassurer completemont sur le maintien des lois jirohibi-
tivcs." ^ Pour la vente a riutdricur, les ddi»artemcnts ])o»tu-
laiont i\ I'envi los fournituros do Tl-^tat,'* et I'esjjrit d'oxclusion
dtait tol que quebiues-uns oussont volontiers relevd les barri-
dres du moyen flge au profit des manufactures ])rovinciales :
le Loir-ct-Clier voulait qu'on fit exclusivenieut " habiller les

1 Mimileur du 30 nvril, 1P21.

"^ Iliuifc SaoiK'. — VdMix (U'8 Conseils gi'iuTaux on IhU .

* AisiK'. — Va'ux (k's Consoils gcnrriiux en 1825.

* Voir Ilerault en 1818, Tyn'nces Orientalis en 1821, Aveyron en 1825, etc.

it!

LA POLITIQUE DE LA RESTA [/RATION.

157

solilats dc la k'giou do Loir-et-Chcr, avec dcs draps et autres
dtutVes dc la fabrique de llomorantin.i

Dans une telle disposition dos efprits, Ic tarif no satisfaisart
jiuuais toutes les cupiditiis. 11 fnt remanie par des lois pres-
(pic consecutives rcndues en 1820, en 18-2, en 1826,^ sans
compter Ics projcts, qui u'aboutirent pas et les ordounances
(pii, dans rintcrvalle des sessions, aggraverent plusicurs taxes.
L'administration elle-meme se fatigua, et, en 1822, le dircc-
teur general osa felicitcr ironiqucment les deputes de n'avoir
apportc; aucun changcment i\ la loi des douanes dans le cours
de Tanncc procddente. " C'est, disait-il, un avantagc que nous
ainierions k voir se r(;p<3ter. Les lois de douanes vculent etre
staliles." ^ Les ddputds pcnsaient autrement.*

Apres les grains, la question principalc a la Chambrc ^tait
cello des fers, qui rdunissait dans un niojne interet les direc-
tcurs des usines et les jjroprietaires dos bois. La loi du 17
decombrc, 1814, avait (jleve les droits sur les fers de toute
espL'ce ; niais dans la repartition dcs favours du tarif, les acicrs
avaient otd les moins favorises. lis rdolamoront, au nom
memo de leurs progres,^ et la loi du 7 juin, 1820, fit droit a
lours jdaintos en augmentant les taxes de 4o h (50 pour 100 :
c'dtait fra{)per directemcnt les instruments iudispensablcs au
travail, limes, faux, outils. Mais il cntrait dans lo systomo
do la Cliambro de pr<jf<5rcr Tinterot du proibicteur, int^irrt
immddiat, exigeant, calculant son profit par grosses sommcs,
a rint<;ret du consonmiateur, dont la perto somblait Idgere
parcc ([u'clle se repartissait sur un grand nombro de totes.

La monic loi facilita la sortie des lainos indigonea et mit un
droit c\ rentrdc dos lainos dtrangores. Les fabricants dc draps
firout une opposition vivo. Mais cotte fois encore la cause de

J Si]

» Session lie 1819.

« Loi (lu 7 juin, 1820 ; loi du 27 juillct, 1822 ; loi du 17 mai, 1826.

8 Mc'iiitinr de 1822, p. 80.

* "Souniettro les douanes ii une rtgle invariable, c'est leur interdiro les pro-
gr&9 qu'unc lounble emulation aspire sans cosse favoriser." — ilunilitir de 1820,
p. 52tj, Ivnpport de Morgan de Belioy.

* r.e jury ilos arts leur ik rendu leg plus honorablcs tdmoignages et la
grande niajorite de votre Commission Ji pense qu'il convenait de leur accorder
renuourageuient de nouveaux droits. — Moniteur de 1820, p. 66.

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158

ECONOMIC UISrOllY.

la production, fortifido do rintdret agrlcolc, I'emporta Bur
rinteivt dos cousommatcurs ; ^ ct, loiscja'apres uiio longuc
discussion qui avait on, commc toujours, pour r(;sultat d'ag-
graver lea taxes primitives, lo vote d'ensemblc cut lieu, il se
trouva dans I'urne 185 boules blanches contrc unc seule boule
noire.*'* Les ddputds ne purent s'empecher dc rirc ; il y avait
alors sur la question du systeuic protecteur unc parfaite en-
tente entre Ics partis.

L'accord dtait dcvenu moins unanimc on 1822. Lc prix
des fers fabricpids au bois et an marteau avait baiss<5 par un
de ces accidents frdtiuents du marelu:?, dont on dolt s'applaudir
(piund ils out pour cause unc production plus dcouoniiipie.^
Nouvelles doleanees des niaitrcs de forges (pii s'en jtrirent
a Timportation, et obtiurent unc ordonnance augnientant les
droits. Aussitot des reclamations de tout genre assaillirent
le ministere (pii, bien que pen dispos<) a remanier les tarifs, dut
coder, en declarant (pic rintort't du fisc dtait cette fois tout
it fait dtranger a la mesure.'* 11 pr<iscnta un projet qui, commc
le disait lc baron de Saint-Cricq, dans I'exposd des motifs,
avait pour but " de protdger ct pour cela d'encourager par de
forts droits sur les produits du dehors, de ddfendrc memo
par des prohibitions toutcs les exploitations du sol, tons les
efforts do rindustrio." Vouloir proteger tout, c'eut dtd ue
rien i)rotdgcr.

Neanmoins, la Chambrc, tronvant le projet insuffisant, lc
rcfondit. Lc rajjporteur dc la connnission dtait IJourienne.
Celui-ci ])rofc3sait commc princijie dconomiciuc (jue lc j)euple

' Le projot niiiiist('rii'l nvnit mis un droit do 20 pour 100, nti lieu de In pro-
liiliition, pour les cliales Ciii'lieiiiires, parceque cette prohibition etiiit tout ii fait
iilnsoire. L'assemblee rc'tabiit la prohibition; cettc fois les fabrieants de lai-
iiage appu.vi'rent, et la Clianibre vote ii runaniniite. — Moniltw de 1820, p. 607.

■^ Monilmr de 1820, p. (120.

' Les fers ail hois ou au marteau etaient tonibe's de 400 a 500 francs la tonne
par suite de la concurrence des fers ii la liouille ou la laniiuoir.

■* " Les autres," disait le baron de Saint-Cricq, " inodifient quelques articles du
tarif, non duns I'inti'ret du Tresor; car plusicurs taxes subissent une reduction,
et I'augmentation proposc'e sur quelques autres aura pour effet d'attenuer les
recottes en restreifjnant I'importation des objets qui en seront grev^s, niais
dans la seule vue de satisfaire it des intcrOts nouvcaux ou luiuux constates." —
MoniUur de 1822, p. 79.

LA POLITIQUE DE LA RESTAURATION.

159

" Ic pins riclic (jtait toiijours cclui qui cxportait Ic plus ct qui
importuit lo moins." 11 cu d<;vt'lopi)ait Ics cons<3<iuoncc8 pur
des arguuiL'iits que rAssi'iuljleo out sans doute nioins approu-
v(?s, si clle out 6i6 jjIus desiuturessiie. " Lcs lois do douanes,"
disait-il, " en favorisant ct en satisfaisant un grand nonibrc
d'intt'ivts genuraux, blesscnt quolcjucs intc-rot-s jjarticulit-rs ;
niais cV'st uu nial in(jvitable, ot lorsipiMl est bien di'niontre
qu'uue m»!sure est utile au grand nonibre, il i'aut la prendre.
Dans les soeietds humaines, tout so riisout i)ar des majorit<58.
Lc marcliand en gdiidral repousse les droits (pii diniinuent sea
profits. Foreo do s'adresser in I'industrie interieure il gagncra
pcut-ctre nioius, nuiis lc pays y gagnera \)\\m. Tout ce qu'im
peuple c<insnmnie est un {"lenient d'aisanec ct do prosp(5ritd
nationales ; tout cc qu'il consomme par (^change est encore
favorable ; tout co qu'il aehetc avec dc I'argcnt pour sa con-
somniiition, I'appauvrit."

Les vit'illes crrcurs de la balance du commerce dtaient en-
core vivaces. Mais il (itait au moins singulicr d'invoqucr
rint(?rot gc^-neral, (piaud les oljjots fra])pi's do droits (^taient
de ceux que tout le monde consomme, quand on faisait cn-
clu'rir le sucre, la viande, et le for au j)rofit de trois cati^gories
do produeteurs. Le comto dc Laborde ne craignit pas de le
lour rcprocher. "La loi quo vous allez rendre," dit-il, "est
esscntiellement privildgiairc ; c'est unc prime que toute la
France va payer aux colons, aux maitres de forges, aux nour-
lissouis dc bcstiaux do la Xormandio." En eiTet la loi du 27
j lillet, 1822, portait principalement sur ces trois points.

La loi du 28 avril, 1810, avait mis sur les sucres (Strangers
lino taxe supdrieure de 33 pour 100 !\ cellc des sucres de nos
e()loni(>s: grande favour, qui en pen (riinndes doulila le chifl'ro
lies im])ortations eoloniales et permit, en 1821, i\ nos planteurs
de placer en Franco M millions do kilogrnmmes de suere,
tandis (|uc les Strangers n'en vondaient (pie 2.t!00,000 kilo-
grammes, Cepcndant, les planteurs so trouvaient gC-n^^s par
eolte concurrence; ils ()l)tinrent (|ue la surtaxc filt dlevde ii ^)0
|)OMr 100. Les interessiis auraient voidii j)lus encore. lis
tomborent de Charybde en Scylla ; car, si les sueres <5trangors
ue vinrent plus, le sucic dc bettcrave, soUicitd par lcs liauts

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160

ECONOMIC HISTORY.

piix, Ics rcmpla^a ct disputa bicntot Ic marchd aux produits
dca Antilles.

Lc8 ba'iifs ciitraicnt en franchise sous TEnipirc : ils avnicnt
dte souniis aii droit moderc do 3 francs a partir de 18Ui, ct ils
cuntinuiiieut a entrer. Los (jleveurs rt'clamorent ct le isiisiistrc
dut jtroposer, dans son projot, do decupler la taxe siir les
ba'ufs j^ras. C't'tait enorme surtcit un pays oil " la \ iande
est un objet de luxe pour les classes infurioures," conuue tlisait
un depute. La Chanibre ne le jugeait pas ainsi ; elle demanda
beauc(jup plus, et Unit par obtenir 50 francs. Kn nienie temps,
nialgie le niinistere, elle augnieuta les taxes d'entrde sur les
laines, sur les suit's, sur les viaudes fraiehes et saldes.

Les nuiitres de forges deelaraicnt le droit de 105 fr. tout k
fait insuUisant, et le direeteur gendral, soutenant leurs preten-
tions, annon(,'ait avec efl'roi que Timportation des i'oules s'etait
dlevde, en six aus, de 800,000 kilogrammes a 7,000,000. " C'd-
tait," ajoutait-il, " un avertissoment jjour radministratiou." ^
Le droit sur les fers a la houille fut porte i\ 275 fr., repn'son-
tant 120 pour 100 de la valeur des marchaudises auglaisea
qu'on voulait dcartcr. On reussit ; car la production du gros
fer doubla, et I'importatitm auglaise deviut i»resi|ue nulle.
Mais le fer, qui sous Louis XVI. valait 350 fr., moiita a 050
fr. la tonne. C'etait un triste progres. Kucore les forges ne re-
cueillircnt-ellos pas le profit de ce lourd impot jirdleve sur I'in-
dustrie nationale. "Nous faisions (piel(pies benelices," disait
en 1828 un propridtaire d'usinc, "(puiud lujus vendiuus a 450
fr., et nous perdous aujourd'hui en vendaut i\ 500 fr. ; la cause
en est (lu'en 1810 la bannc de charbon revenait i\ 18 fr. 05 c,
tandis qu'ello revient t\ 37 fr. 50 c." L"a vantage restait aux
proprietaires fonciers.

Les plus clairvoyants on les nioins engagds dans les iutdrets
prohibit iounistes couimen(,'aient i\ eutrevoir le danger du sys-
terae. Ternaux Ic signalait: " L'lvspagnc," disait-il, " a rdpondu
par unc prohiliition de nos produits manufactures i\ I'impot mis
sur les laines, et le ralentisscment de la draperie a fait baisser
les laines fram^aises." '^ Plusicurs s'etonnaient qu'une matiere

» Voir Ic Monilnir do 1822, p 010.
* ilontUur Ju 1822, p. 3Uy.

LA POLITIQUE DE LA RESTAURATION.

IGl

promu-'rc, telle que la fonte, fiit jxnir ainsi dire proBcritc,^ et
lo cointo (1(> Lal)()rde 8'iiuli<,'nait, au noiu tlu projjres imliistriel,
(piMl cut J'allii payer 7,000 fr. de droit pour iutroduire c\ Saiul-
Eticnne uno niachiue a vapour.''* Mais Ics prohibitionnistcs
uioutraiout en perspective, au nioiudre relAchoment des ri-
irueurs, lo marolu' Irancjais ouvahi, nos ateliers formes, nos
ouvriers sans travail, et obteuaient sans peine uu vote favor-
able, en <''V(H|uant le i'antonie de la ruiiio et do la njisere uni-
versellcs |M)iir r(:^torquer Targument de lours advorsaires on
favour des consoniniatours.''

Memo apr^'s la loi do 1822, il.s roolamaient encore. Ladrolte
trouvait que lo niinistero n'avait pas assoz fait pour Tafj^rioid-
turo et pour lo oonunorce. Kilo provoipui, en 1823, la creation
d'un eoniite dVncpiote qui dcvait " s'attacher surtout ^ reeh(>r-
eher si les ol)jet8 (?tran<;ei8 iniportrs en Franoe y sout d'une
ndocssite iudispensaldo connuc niatiero premiere."'*

Vivomeut attaipid a oo sujot par lo comle do Vaublane,
ancien miuistro,'' le baron dc Saint-Cric(|, (pii, (b^puis le eom-
monoonient de la Hcstauration, oecupait le postc de dircoteur
lioneral (k's douanos, so ddfendit par une lettro in8<5rdc au
Mii)utiu)\ professnut bautoment la doetrino protootionniste,^
(]u'il avait, disait-il defondue avant M. de Va\iblanc, mais
det'larant (pie pour la rendre prati(pic il fallait sc jj^ardor do
la pousseur a roxtremo, et rappolant les favours dont le gou-

' Entrp nutrc's, l)nvergior ile Ilniiranne ct Lniiie.

2 MoHiU'ur do 1822, pp. 031) ot 040.

' " Liiissi'z I'litriT k's tissiis ile cotnn, li's drnps, 1p» fn'iVnccs, log fors, les
fiiiitcs, It'.s siHTi's, ct iiiu' foiilo (I'mitri's nrlicloa (pu' vdiis ho poiivoz ciicon' fiib-
riquiT on prodiiire nil prix de nos voisiiis, la C()iis('(jucik'o imiiu'dinte stTft la
ruiiie de vos I'olonieH, ile vos niamifactiires, la niisi're dc deux millions d'ou-
vriiTS, I'cxportatioii r. pido de votrc numt'riiire ct la diiiiiinitioi) plug rapide
I'licore dc vos coiilribtitioiis."— I)is<'onrs dc 15<iuricnne, rapporteur, en rcponse
!i Laliliiy dc Poiipiircs ; Mtmitrur de 1822, p. '.MI2.

■• Moiiili.ii do 182!J, st'ance du 15 mars, p. 'MO. Lo niinistero pnsn la question
d'fltat, dcelaiant qu'll scrait danpereux (|uc la Cliand)rc eni|>ietut sur les at-
tributions dc la puissance exe'cutive, ct la proposition fut rijctco; la droite
inuriuura. ("est ii ce propos (pie furent pulilics Ics premiers tableaux du com-
nierec exterieur; rattft(jue cut au moiiis de ce cot»' un bon rcsultat.

' Pu Commrree de la France en 1820 if 1H21, broeliurc.

' " II n'cst pas de bon tarif pour la France que celui qui ri'serve aux Fran-
cais le plus de travail possible."

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102

ECONOMIC HISTORY.

veruemcnt avait comMi' les aj^riculteuis ct los manufacturiers,
trop (iiil)lit'ux d(.'S sorvioes passi^.s. Cctto Icttri! pout f'trc
rc'^ardec cumuu,' lo iiianifcsto do radmiuLstration douanic'rt! dii-
rant cotfo j»(;riodo : " Dopuis la Rcstauration," disait lo l)an)n
do Saint-Cric(i, " Ics lois do doiiaiioa so sent applicpidcs con-
stainmcnt i\ concilior, dans la vuo d'linc protection connniino,
Ics intci'cts soiivcnt oppos^^s, toiijours distincts, do ra^iiciil-
tiirc, dc riudiisti'io et du conuucrco. . . . J\.' dcniandcrai a
ragi'iculturo si co n'est pas it cos lois qii'cllc doit ot Ics
taxes d'inipoitation (pii la pi()l(f\u;ont contrc un noniI)rc in-
lini do produits dtrangcrs, tcls (pu! Ics l»l(^s, Ics bcstiaiix, Ics
laincs, Ics jraraiiccs, Ics clianvrcs, Ics lins, Ics liouldoiis, (pic
lo systcmo constant dcs taril's anlcricurs ctait d'attircr par
uuo cntioi'o ininiiuutd, ot los IVanohiscs d'cxportalion (pii
ouvrcnt un facile (jcoulonicnt il dcs produits que los lois an-
cicnnos nc setaient jamais appli(iudc3 qu'a rotonir? Jo dc-
juandorai ;\ notro Industrie nianiii'actuiici'o si co n'cst pas dans
cos memos lois (prollo a trouvo ct lo mainticn dcs j^arantics
(pie le travail national avait prde^^dcmment ohtcnucs ot los
jrarantios ninivolles sans IcsciucUcs nos forges, nos ral)ri(|uos
do faux, dc limes, de ceruse, de minium, do zinc, ot do cuivrc
Inminf^s, ct hcaiicoup d'autrcs encore, seraicnt loin du liaut
(lotiii; dc iirosp(5ritd auqucl cllcs sont i)arvcnucs? Je doman-
dcrai cnlin an connncree maritime si ce n'est pas frrace i\ ccs
lois, ct jo ne craindrai pas d'aj(Hitor, trraco a Icur lihdrale ap-
jilication, qu'il a i)U donner I'cssor i\ scs armemciits, prot(j<i</s
p(tur la premiere fois par dcs droits diflcrcntii'ls, f;r;idu(?s
suivant le jtavillon ot la longueur de la course, cnticprendrc
avcc 8ecnrit(5 dcs sp(?cidiitions lointaines, (pic les taxes po8t(j-
ricurcs i\ rontrcpriso out constammcnt respcct(:;os, jouir, quant
anx cntrepi^its, an transit, an cal)otage, et nn'^tnc an rcgleincnt
(Ics droits, dc toutcs Ics francliises, de toiites Ics facilitcs,
(le toutes les exceptions rigourcuscment compatiljlcs avcc I'ac-
complisscmcnt dcs lois gdndralcs et dc la suretd des per-
ceptions ? " '

Lc8 intdrcss^'s nc so payi^rcnt pas du souvenir dc bicnfaits

1 Moniteur de 1823, p. 156.

LA POLITIQUE DE LA ItESTAUnATION.

168

qii'ils avaicnt pour la pliipart csooinpK'a. lis on voiiliirt'iit ot
ils en armclictrent d'autrt's, d'alxtnl par dos ordoiiuuiiccs ;
puis, 8UU8 Charles X., par la lol du 17 iimi, 1820, qui diininua
Ics droits d'cxportation, ct aj5<j;rava cncurc dans inio pro-
portion oon»i(K'nil)li; los droits d'cnfreo sur la plupart dcs
produits aiirit'oles. Li'S laincs i)futes L'trauj^crcs, par oxonipK',
(pii payaiont 10 I'l". an tarif de la loi do 1820, avaicnt <:!tc'
inipost'cs i)ar onlonniinco i\ 30 fr. on 1823, a 40 on 1824, ct la
loi do 1826, sanotionna celtc dorniorc taxo : c'dtait en (pidtpic
Kortc cxcluie ontiorcniont los inipoitateurs do nos niarclios
ruraux. Autre ajr^Ji'avation sur les ba-ul's (pii, nuiigres ou
gras, payoront oO fr. ; mOnio droit pour los chovaux. Sur los
couvorturos do laine, I'acicr fondu, los cordages, les plumes
a ocriro ct d'autros articles, les taxes fnrent doublees. Idles
fureut {piadrupldcs sur la plupart dos tissus de (il. Pes sur-
taxes nouibreuses fiu'ent iniposees sur les niareiiaudises ini-
portees par navircs (Strangers ; dcs primes d'cxportation
aceordees anx manufacturicrs.^

La loi do 182<'>, eonipu'ta le systemc restrictif de le Restat:-
ratiou. tiuel([ues-uns do S(>s plus iial)il(>s del'enseui's, le eumte
de Villelo eutro autres, lo consideraient '• comme un moyen
teinporairo, mais indispensable, ofl'crt a la production fran-
(,aise, do so niottrc autant que la nature des clioses le permot,
en (^(|uilil)rc avoc la production etrangere." ^faia cos pro-
liil)itions temporaires, loin do tendrc <\ disparaitre, dovaicnt
I'atalemenI se luultipiier, s'aggraver, so consnlider.

Lc gouvernemcnt CVaM plus sago (pie les partis. Toutefois,
s'il avait sur ccs (pjcstions plus dc luniiercs que la Chanibre,
I)arcc (pi'il etait moins aveugld par des interets jtarticulicrs, il
n'avait ni dcs convictions assoz fortes ni une puissance assez
iM(lc|MMidantc pour resistcr victorieuscmeiit : pcu dcs ministrcs
auraient consent i i\ joucr Icur portefcuille sur une question dc
douanca, surtout avcc tant dc chances dc perte. Le gouvornc-
ment so contentalt done de modcrer les ardours inconsiderc^es
dcs |)rotectionnistos, tout en se proclamant ouvcftcnicut lc
dcfcnseur du systemc. Do temps a autre, il faisait entendre

^ill

1 Voir le Monitettr de 1826, pp. 177 et 807.

104

ECONOM - HISTORY.

'it

i\ lii tribune qu('l(|uo nvortiHSoiiiciit, comino le baron Louis on
181 t. liO b;in>n do S;iint-Cric(i lui-niGme, duns IV'Xposd dcs mo-
tifs do la loi du '28 avril, 181 (), H'dtait exprinio avec iMuuicoup do
niosurc : " Nona aurioiis nioins do progres t\ fairo," diHait-il, " si
uno trop lonj^uo iulcrniption dans nus relations conunercialcs
u'cilt cunstitu<) uno pnjliibition ii I'abri do bKiucllo on a pu \\6.-
filijroi', sans danj^or, dos nioyons do porfoctionin.'nu'nt qu'uno
licurcuso rivalitd n'auiait pas mamiuo kW. drvoloppor." . . .
Tour adniottro cctto rivalitd, " nous avons du," ajoutait-il, "at-
tondroquo Ics temps ct los )»roj^rc8 d'uno opinion (pii sY-clairc
tons k'H jours davanta^'o aiout rdsolu cotto >;rando (lucstion."
Malliourousoniont, c'otait liors du palais llourhon (pio los
lumic'ros so i'aisaiout i)eu a pcu ; dans rAss('ml)loo, ri'\<^no-
ment prouva quo d'ordinairo los inlorots s'obstiiKMit et no
s'oclairont pas. Ainsi Ic vout la naturo liumainc. Ouvrc/ la
porto du privileuio, la foulo s'v procipitora, et on s'y ('■touflora
bion longlemps avant do conqtrendro (pio Ton out ett' plus )\
I'aiso en picin air (piodansuno onoointo r(jsorveo, mais oii tout
Ic monde a voulu entrcr.

Cot oncombromont finissalt i>ar dcvcnir j^r'nant pour los j)ro-
tcotionnisfcs oux-niemes, (jui ^-taiont ol)li<i(.'s do rudoyor lea
trop nonibroux prcUondants, et d'iuvoquor contro oux la tli(3-
orie (in saint puidic. "No sait-on pas," disaient-ils, " (pio Ics
societes no subsistent ct no prosperent quo par les sacrifices
individuels ?" ' lis vantaieiit, ct avcc raison, la proHp(5ritd
indiistricllo do la France sous lo governement des I5ourl)ons ;2
mais e'etait i\ tort (pi'ils en rapportaii'ut riiuiineur aux taxes
proiiiliitives. lis ne comprciiaiont pas que, sous do bonnes
comiiu? sous do mauvaiscs lois, uno sooiote pout so dev(;lop]icr,
(pnmd elle a en ellc dc puissantes causes do vitality, ot qu'cn
pareil casjes deltiils do radministration (pi'il no faut pourlaiit
jniiiais dedaigner, facilitent on retardeiit le progres, mais sans
l\'toiiff('r. Or la France du dix-neiivieme sieelo (5tait animi^o
p!ir deux principes sup^^rieurs qui la faisaient alors grandir,
malgr<! les obtaclos : la science ct la liljcrtd.

1 IJnppnrt do M. Foiiqiiipr-LonK, Mimili'ur do IHlfl, p. 400.

• Sous HI'S roig K'nitiiiii's, I'c liciiu royauiiio jouit de tons los Iiionfiiits do la
p;iix ; cliaquc jour sos rioliosscs s'accroissont, la grnnde ninsso do lu population
lu8 partuge, Ic uercio des jouissances individuellos s'etond. — Ibidem.

LA POLITIQUE DE LA RESTAURATION.

1G5

A rext^irieiir, le systi^mo proliibitif deviiit iK^ocssaircment
amcnor, coinmo fl I'dpociuc do la lutto do Oolbort contrc 1p3
lloUiindais, dus nK^cunfi'iitcmoutH, ct pui' suitf dus irprosaillcs
ct, di'S capitulations. Fia ili'.stauratii)n ct'da traliord dovaiit lea
lupiKU'cs dcs K<ats-Uni8, I't sigua la cuuvcntion do 18:22, (pii
^tablissait ciitro los deux marines lo principo do la rocipro-
citt! ; ' puis cllo c(1da devant rAnf,doterrt',- et bicntot ellc
traita sur pied dY;^nili(<; avec les Klats-Unis.^

Lt' spectacle do la ricliosso croissaiito, non-soidonicnt on
Franco, niais dans la plupart dos Etats do rHuropo, oil la
paix favorisait rosaor des entrcprisos, avait pourtant 8tinud($
les dtudos d'<!cononiio politique. L'Anf^lotorro conimentjait it.
fixer son attculion sur lo sort de classes lal)oricusos, ct llus-
Ivisson vouaitdo la fairo rdsohunent cntror dana les voies do la
libort^i conunercialo. L'Allcma<i;nc (^coiitait la voix do List
proclaniajit les bionfaits d'unc union douaniore, et organisait
lo Zollvoroin.

La France, qtil avait cu, an dix-huitiomc siiiclo, lo m<;rito
do poser avoc Quosnay los prouiiors fondonionls do la science
<5cononii(pio, la retrouvait transt'orni(jo par Adam Sniitli, et on
rasseniblait, avec J. H. Say, lea ('domonts on un corps do doc-
trine niotliodi(iuo. Lo TraitS d" Efonomh' J'(tlltit/ne, publid
pour la |)i'oniiore fois sous lo Consulat, romanio ct ani('lior<5
dans chacuno dos (iditionssuccossivcs,' ropnndait do justos idecs
sur les lois do la production ct de la distribution dos richcasos,

1 "Art. 1. Ia'8 produito nntiiri'U nu iniinufacturi'g dps fttnts-Unis iinportt's
en France siir biUiincnts iles f*]tat8-Uiii8, piiyeront un ilroit adilitionci qui n'cx-
t'l'ilcni pii.s 20 fr. par tonnenu do ninrcliandiscs, en sus des droits payrs sur les
niL'nK'3 produits naturcia ou inaniifacturi's des fttats-Unis, quand iis sont ini-
portc's par navires franc.ais. — Art. 2. Lea produits natureU ou nuuiufactures
de France, iniportes aux Ktats-Unis sur batinients frani.ais, payeront nn droit
iidditionnel qui n'excedcra pas 3 dollars 75 cents par tonnoau de niarcliandi.xc,
eii SU8 des droits paye's sur los niC-nies produits naturels ou inanufactun's do
France, quand ils sont inijiortes par navires des fitats-l'nis." — (Convention do
navigation et de coinniorce conclue entrc la France ot les Ktats-Unis le 24 juin
1^22.

■•^ Traito' de navig. avec I'Anpletorrc, du 8 fdvrier, 182G.

' Traito do comni. ot do navig. du 7 juin, 18'J(5.

* La premiere c'dition est de 1803. Quatrc autrcs editions ont etc' publie'es,
it un grand nombre d'excmplaircs, pendant la Rcstauration, en 1811, 1817, 1819,
et 1820.

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166

ECONOMIC HISTORY.

ct rautour les avait lui-mL. le, dci)ui8 1819, propag<?c8 au Con-
BiTvatoiro des arts ct m<5tier8 dans renseignemcnt dont I'avait
charge le cumto Dccazcs.^

Non-seulomcnt il montrait, commc Adam Smitli, la source
des riclicsscs dans Ic travail ; niais Ic premier i)ar une thdorie
neuve "^ aulunt que simple, il faisait apercevoir les liens do
solidarity »pii miissent les diffdrentes industries et dans une
mumc nation et entre des nations diverses. "De toute
nianifire," di.sait-il avcc la rectitude du bons sens, "I'acliat
d'un produit ne peut etre fait qu'avec la valeur d'un autre. —
La ])remierc conseijuence tjn'on peut tirer de cette importantc
vevitd, c'est (jue, dans tout Ktat, i)lus les producteurs sont
nombreux et les prodiiits multiplies, et plus les deboueh<js s" it
iaciles, varies, et vaafesi — Une seconde cons(5queu(;o du memo
principe, t'est que cbacun est iiitdresai? a la prosp^ritd de tons,
et que la prospdritd d'un genre d'industric est f'.ivorubie (\ la
prospdritd de t tus les autres. — Une troisienie consequence
de cc j)rincipc ^'eeoud, c'est que rimportation des jjroduits
efrangers est favorable h. la vento des produits indigenes ;
ear nous ne pouvons aclutor les marcliandises dtrangeres
([u'avec (les produits de notre Industrie, de nos terres et
de nos eapitaux, auxquels ce commerce, par consdtjuent,
procure un ddbouclid." ^

Ces principes dtaient bien diffdrents de ceux qii'on pro-
fcssait k la Cliambrc des Ddputds. lis eonstituaient un
remarquable jjrogres dans la manierc non-seulement de com-
prendre les questions commerciales, mais d'euvisager la
|)olitique tout cntiere. L'opposition api)arente des intdrets
avait rendu nationale la liaiue de I'dtranger et i)lacd les
pcuples vis-iVvis les uns des autres dans un dtat permanetit
il'Iiostilitd secrete ou avoude ; les sages eux-mrmes le pro-
I'lamaient. "Telle est la co!ulition humaine," dcrivait Vol-
taire, "<iue souhaiter la grandeur de son pays, c'est souliaiter
(lu mal c\ ses voisins. ... 11 est clair qu'un pays ne peut

' I'librn! 80118 lo titro (le Cours romplet d'liconomie polillijHf. pratique,
■^ Autiiiit (1111' pcuvi'iit Otrc nouvi's les oljcrviitions du bons sens. Un (logo
lie Vcnise pariait au (luin^ioine siecle conimo .7. H. Say au dix-neuviome. Voir
la lei.'on d'ouvorturo de M. Bnndrillart au Collc-ge de France, annc'u 1800.
"• I'raiti d'Ecoiwmie jmliliijue, «5ditiun de 1841, pp. 141, 144. 145.

LA POLITIQUE DE LA RESTAURATION.

167

Un doge
Voir

•jagucr sans qn'im autre pcrdc." * Do cctte o]vniou ddrivait
naturellonient la balance du coiumercc et I'esprit du systeme
proliibiiif. La thdoric des ddbouclxjs do J. B. Say ouvrait un
horizon bien autrcinent largo an commerce et a la ijlnlo80|)hie
politiiiue. Mais, qnoique produitc k la tribune, avec bcaucoup
do r<i8erve, par quclques orateurs do la gauche, olio no pouvait
avoir I'agremcnt do la majoritd : Ics int<irets cohiprennent dif-
licilcmcnt les theories qui les genent.

Cependant le ministerc Villele, devant I'liostilit*? manifcste
de la bourgeoisie parisienne, avait fait appel a I'opinion do la
r'rancc; les elections lui avaient 6i& contraircs, et il s'etait
retird pour fairc place au cabinet le plus liberal qui ait dirig<i
les affaires sous la Restauration. !Martignac crda un ministere
du commerce et y appela le baron do Saint-Cricq. C'dtait
le moment do tenter une reforme ; la gauche appuyait lo
cabinet, et, dans son adresse, la Chambro proclama " que
Ic premier bcsoin de I'industrie et du commerce dtait la
liberte." Unc commission d'enquete fnt nommde par le
gouvcrnement en 1828.2 La conclusion, qui dtait loin de
donner jtleine satisfaction an vaMi do I'adresse, fut que
" dans I't'tat de I'industrie en Franco en presence des intdrets
(|ui s'y trouvent engagds, on doit s'en tenir <\ un systeme rai-
sonnc de ))rotection, c'est-a-dire, d'uno part, protdger elllcace-
ment le travail du pays, et do I'autre, dtudier soignewsemoni:,
pour chacpie industrie, la (piotite de la protection necessaire
en i)rdsence des dommagcs (pie ])ouvait order une protection
excessive."'' Le baron do Saint-Cricq pouvait, comme tout
I'ailiniuistration, Taccoptor sans n noncer a ses [)ropros iddos :
il dc'elara a la tribune avoir toujours pensii et i)rofessi' «iu'il
ne fallait "ni tout permettro ni tout iuterdire," et quo, pourvu
qii'on admit lo principc de la protection, il admettait tres-bion,
do son cotd, la controverse sur la limite k fixer. Or, le proict
qu'il prdscnta, sans changer I'esprit des tarifs, adoucissait les

' Voltuiri', Dirt, philos., v" partie.

- II y out (los coin miss.i ires dans la plupart dps grandcs villes ot pour les
uraiules industries. Voir, posaim, lo Monilrnr do 1828.

^ Miinitfur do 1R2!>, p. 810. K.xposc' dos motifs par le baron de iSnint-Crioq.
Cependant deux onqiiGtes Roulemoiit furent faiti * niotliodiqueniont it publlees.
L'Enquete sur les fefs, 1828, 1 vol. in-4, et I'Emjiiete sur les sucres, 1828, 1 vol. in-4.

■»••

108

ECONOMIC HISTORY.

I ,

\i:'

', T

11 i f

taxes (Ic certains produits oxotiques, et annon^ait que, cinq ans
apres la publication do la lo', lo droit sur les fers serait di-
niinu<3 d'un ciniiuieine. C'dtait un commcnconicnt di; rdformc
qui, par son extreme niodenition, avait I'avantii^o dc no pas
froissor trop rudement los intt^rots, ot la chiinoo d'etre adojitij.
II nc fut pas nienic discut<3. Lo ministero Martit^nac toniha,
ct son succcssour so garda bion de rcprcndro un projet dcs-
agrdable i\ la droite.

Lc systenio pruhiliitif qui caract(^riso la Idirislation douaniere
de la Restaurationdonioura intact. Constitu*? par los lolsdo 1810
ct dc 1821 pour U'S cereales, par Ics lois do 181(1, do 1817, do
1818, dc 1820, dc 1822, ot do 1820 ])0ur los produits de I'agri-
culturc et dos grandes fabri(iueK, 11 s'etait propose: coninie but
do r<:^scrver aux seals productours fran^ais le marclid francais.
But bien diHioilc h attoindro dans un dtat de civilisation oil
los rapports dos pcuplos .out si fr^^ipuMits; impossildo ot il-
logiquc, dos qu'on avait on luoiuc tonips la protontinndc favor-
ioor et dY'tondro le comniorco oxtoriour. Pour roussir, sans
commettre do trop grandos injustices, il aurait fallu ])Ouvoir
isolor la France commo le Japon s'est longtenips isol<j au
milieu do TOcean; lo travail qu'on so plaisait a appeliir na-
tional aurait scul pourvu, taut bion quo nuil, aux besoins dos
nationaux, et tons auraiont subi la condition oonimunc. Mais
des cpie la l»arrierc nc c'elevait que j)0ur (iuol(|Ucs-un8, il y
avait necessairomont un \ •iviloge en faveiu' do coux, (pu-ls
qu'ils fussent, (pii avaiont ie droit, conuno prodiu'tours, d"im-
poscr lours nuireliaudisos a lours eonoitoyens ot le droit,
commo consomuiateurs. do clioisir entn; los marchaudisos do
lours concitoyens et cellos dos dtrangors. II devait y avttir,
par suite, uno ardonto competition pour '"trc adinis a la
JDuissance do co privilege.

Pour assuror a rinteriour roxecution des lois proliiiiitivos,
il fallut dtendrc encore i\ do nouvoaux objets la surveillance
administrative, — ordonner, par oxomplo, que les tissus ot
tricots do la natiire de coux qui dtaient proliibes no fussent
mis en vcnto tiu'avec uno marque particuliero,' jjrescrirc le

J Ord. dc8 8-11 aoftt, 1810.

LA POLITIQUE DE LA RESTAURATION.

1G9

mode lie lU'vidage ct (reiivelopiio do cotoiis lilc^s cu France,'
fiVM'c dc visiles doiuiciliaires, Haisir les inarcliandises suspcetes,
exciter des nidcontenteiuents ct des roclaiuations.'* Un luul
CDiidiiisait a un autre nial.

11 taut i! i<', pour niieux fairo comprcndre les eauses do la
politiipio curuuicroialo en France, quo dans touto i'Kuropo le
vent (;tait alors a la protection. Apres les rudos secousses dc
TKnipiro, les nationalites s'etant reconstitn(^es, les gouvernc-
nients avaient favorise dans uno eertainc liniito cette tendance
ipii seniblait assiu'er lour independanoo politi<iue, et eliarun
s'etait i^arde d'autant plus do ses voisins (pie les eveuenients
raviiit, (pielipio temps aujtaravant, lie plus etroitement i\ eux.
Partout on avait repoussd les produits (Strangers, et [larti-
culieronient les produits anglais, dout I'introduction a bas
prix avait fort dt'coiu'erte les nianufacturiers du continent.
La France, il est viai, avait donne rexeniplo aux <'ays-l>as,
\i rAlleinagne, .1 I'Espagne ; niais ceux-ci s'etaient empresses
dc le suivre, ct parfois Tavaient d<^passe. L'Angleterrc elle-
mnne ('•taii .i-.ro, jus(iu'en 1821, lierissee do prohibitions,
(pi'clle ava. i. :nic aggravecs au profit dc ses proprietaircs
louciers.

La protection etait au p(»nvoir en Fiin-opc. Toutefoia I't'co-
nomic politique, patronnc de la liberte commercialo, lui livrait
deja dc rudcs combats dans Ic domaine do la science; elle tri-
oiMpliait dans le doiuiiine des fails; ello dniuiait Iluskisson
a rAngleterre et en France ello ('iimmont;ait ii miner, avec Ic
doul)lo argument dc la consommation et (jos debouclies, la
forteressc elevdo par des interets prives et soutenuc par des
pri'juges : mais la forteressc dtait dncrgiipiement defenduc.

' Loi du 21 nvril, 1818; Ini <lu 20 mal. 1810; or.l. ilii 1(1 jiiiii, 1810; <lo8 1-ir,
iK'.'. IHII); .les 8-24 ,'>vril, Is-.'O.

- !'r>ii;iiit en eoncidiTiitioii Ioh rcpn'scntiitions ndrpMi't'g ilc lii [lart d'nii
Kriiiid iioiiilire do ninniifHcturicni I't di' timrchands ilc homiotfrio, Hoit sur I'insiif-
li^aiifi', I'll ci' qui li'g cnncornc, des di'lnis prt'cc'dumnicnt nccordi's, soil mir U'S
dillli'iiltfn (|iii s'Dpposi'iit il (•(■ line la marqui' puissc rlrc sc'pan'riipnt n()pliiiiu'e &
cliucun Jtu objcts iirovunuut du luur iiiduKlrie. — Old. dt-b 2^-iiO supt. 1818.

^ %

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170

ECOSOMIC HISTORY.

VIII.

THE ZOLLVEREIN.

From Bowuing's Repokt on the Puussian Commeuciai. Union,
Tarl. Doc. 1810, Vol. XXI. i-i-. 1-17.

IN compliance with tlie instructions whirh I had the honor
to receive from your lordship, dated Foreign OITice, July
14, 1830, I i)roceed to re|)ort on the progress, ])r('sent state,
and future ])rospccts of the Prussian (>ommercia) League.

No doubt this great Union, which is ivuown in (icrmany by
the name of the ZoUverein, or Zollvrrbande (Toll Associa-
tion or Alliance), derived its lirst and strongest influence from
a desire to get rid of those barriers t'» interconimunication
which the sejiaraic fiscal legislation of the various States of
(Jerniany raised among a ]ieople whom natu.al and national
feelings, as well as common interests, would otherwise have
connected more intimately and ])ermanenlly together.

The ZoUverein represents, in Ciermauy, the operation of
the same o])inions ar.d tendenci<>s which have already elTected
so many changes in the comniereial legislation of other coun-
tries. In the United Kingdom the custom-house laws which
separated Scotland an<l Irehmd from Eagland have been
superseded l»y a general system applicable to the whole. In
France the local lyarriers and the local laritTs have given way
to a general and uniform system of taxation. Even before
the Commercial League associated so many States in a com-
mon union, several less extensive combinations had prepared
the way fo" a more diffusive intercour.se. Between the States
which do not form part of the Prussian Lengue — as, for
example, between Hanover ami Ihunswick and Oldenbtn-gh, —
the sauic tariffs have been adopted, and the payment of duties

THE ZOT.T.VEREIN.

171

in one of the States is sufficient to secure free sale or transit
in t' e other.

The Commercial League is, in fact, the substantial repre-
sentative of a sentiment widely, if not universally, spread in
(Jernuiny, — that of national unity. It has done wonders in
breaking down petty and local prejudices, and has become
a foundaliim on which future legislation, representing the
common interests of the German people, may undoubtedly be
hereafter raised. If well directed in its fuLure operation, the
Zollvereiu will represent the fusion of German interests in
one great alliance. The j)eril to its beneficial results will
grow out of the efforts which will Ijc made, and which are
already made, to give by protections and prohibitions an undue
weight to the smaller and sinister interests of the Verein. Uut
if its tariffs l)e so moderate and so judicious as to allow full
play to the interests of the consumers in the field of competi-
tion ; if there should be no forcing of capital into regions of
imprc'.luctiveness or of less productiveness; if the claims of
manufacturers to sacrifices in their favor from the community
at large be rejected ; if the great agricultural interests of Ger-
many recover that portion of attention from the commercial
union to which they are justly entitled; if the importance of
foreign trade and navigation be duly estimated, — the Zoll-
vereiu will have the liai)picst influence on the general prosper-
ity. And that the League has been much strengthened l)y the
experience of its benefits; that its popularity is extending;
that its further spreading may In; confidently auticijiated,
— appears to be indubitable. In fact, the Zollvercin has
l)rought tiie sentiment of Gcrmnn nntiouality out of the
regions of hope and fancy into tli..se of positive and materinl
interests; and representing, as it do(>s. tln' jxipuliir feoling nf
Germany, it may l)ecome, under enlightened irMidance, an
instrument not only for promoting the pejirf anil prosperity
of the States that compose it, but of extending their friendly
relations th'-ongh the world.

Coi'.siderations both of morality aod eeonomy wero not
wanting to recommend the Commercial Cuion t<» the Gorman
[)eoplc. Not only were the numerous kirriers and various

■'ill

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172

ECONOMIC HISTORY.

legislation of the German States groat impodiincnts to frado,
but they created a considerable anioiuit of contraband tralTic,
and caused the country to swarm willi petty snnigglers, who
lived upon the profits which the varieties of the tarirts placed
within their reach. Tlie custom-house achninistratidu was
costly, ifud generally ineflicicnt, from the extent of froiitii-r
to be guarded; so that the estal>lishmcnt of one large, instead
of a variety of small circles, has led at the same time to a
great diminution of cost and a great increase of eilicieney,
while it has rcmoveil fi'om all the intei-ior of Cermany that
demoralizing inliuence which the presence of multitudes of
illicit traders and smugglers always brings with it.

The Zollverein was not, as it has been often asserted to be,
a union formed in hostility to the connneroial interests of
other States ; it was not intended ])n'iniitiirely to create a
manufacturing jiopulation in rivalry with or opposition to tho
manufacturing aptitudes of fJreat J>ritain ; it was by no
means the purpose of its founders to misdirect capital to
unprolitable employment, to saerilice agriculture to trade,
or to encourage less the field than the factory. The Zoll-
verein was the substantial expression and effect of a general
desire among a great nation, split into many small States,
but still of common origin, similar manners, speaking the
8am(> language, educated in the same spirit, to communicate,
to trade, to travel, without the annoyance and impediments
which the separate fiscal regulations of every one of their
governments threw in the way. If, in the natural process of
things, th(^ tarilVs of the Zollverein have become hostile to
tho importation of foreign, and especially of Hritish produce,
it is Iteeause (Hir laws have prevented the greater extension of
conunereial relations with (iermany. We have rejected the
payments they liave olVered ; we hav<> foiccd them to manu-
facture what they were unable to buy; and we have put in
their hands the means of manufacturing cheaply, by refusing
to take the siiiplus of their agiieultural produce, the non-ex-
portation of which has ke]it their markets so low that small
wag(>s have been sulTicient to give great comforts to their
laborers.

THE ZOLLVEREIN.

173

Tlicre can be no doubt tbat the bostilc tariffs of other
nations, and ospecially the corn and timber hiws of (ireat
Britain, served j^reatly to strengthen the arj,mnu'nts in favor
of conuncrcial uni(Mi. It was felt necessary to extend the
homo market while foreign markets were closed, or only
partially and irregularly opened, to the leading articles of
IJernian production.

" We should iu)t liave complained," says a distinguished
(icrman writer, in 18:5'), " that all our markets were overllow-
ing with Kngli.sh manufactures, — that (iermany received in
liritish cotton goods alone more than the huiulred millions
of Hritish suitjects in tlu! Kast Indies, — had not Kngland,
while she was inundating us with Iwr productions, insisted on
closing her markets to onrs, Mr. Robinson's Resolutions in
181.") had, in fact, excbided our corn from the ))orts of Great
IJritain; she told us we were to l)uy, but not to sell. Wo
were not willing to adopt reprisal*^ ; wo vainly hoped that
a sense of her own interest would lead to reciprocity. IJut
wo were di.sa|»pointed, and wo were compelled to take care of

ou;'S(dves." ^

Thus, while on the one hand, the Zollvorein was iidvo-
cated as a measure of self-defence against the hostile legis-
lation of foreign nations, it should not be forgotten that, as
respects the confederated States, it represented the priiuiiples
of unrestricted inten'omniunication.

As between more than twenty-six millions of riermnns, it
was the estal)lisliment o( free trtvh' ; restrictions, duties, pro-
hiliitions, custom-houses, there are none, as far as regards the
various States that comprise the Commercial I'nion. What-
ever impe(liments \\w tiirilTs create to conniiereial eonimuni-
Ciition with foreign lands, tin' League has thrown down every
bari'ier which stood in the way of trading intercourse Ix'tween
tlii> diil'erent branches oi tlie great (ferui: ii family, which the
League represents. And, as the conception of the League was
popular and national, .?o it cannot be denied that its workings
have been, on the u'hoh\ favorable to the prosperity and to the

i Kankc'g " Ilistoriscli-pulitische Zcitsuhrift."

<►,■'

■ '1

mi:

! 1 ^:* ..

i, 1-

. - :S

;,' I

174

ECOSOMIC IIISTOUY.

hnp|iiiu'8a of (he fJonnnn coniniiinity. Tiiiiffs less iKwtilo to
tli(.' maiiul'ucturc'H and luit'i;,n» cttmincrcc (tf natioiiH would, hh
1 conceive, have K''*'»*b' "ddid to the liuni'licial cITccts ol" the
Union. Its morn extended connnunicatiuns with other coun-
tries woidd have given jrreater energy, and opened a wiilcr
licld to the increased acli\ily of the hi)nic tiaih'. There is nn
reason wliy foreign eununeree slumltl noi have heen iteneliti d
to the same or even a ^vider extent liian internal inihistry,
hy the overthrow of that hteal h'gishilion which impeded in-
tercourse, and liy the introihiction of a uniform nnd Uheral
system of custom-house h-gislation.

'l"he ZoUvereiu now represents the interests (well or ill
understood) of njore than twenty-six uiillions of inhalfilants
of the most civilized and opuli'iit pa' Is (if Europe, and has
accomplisheil one important nsult, namely, of exeilintr the
attention and of awakeuiu'/ the appnlirusious of more than
one neighlioriiig nation. What the Zollverein is to iii'come
may dt'pend as nuieh upon others as upon themselves; and,
should its course he guided hy enlightened economy and
sound commercial policy, it may hecome an instrument of
incalcidalile and houndlcss good.

liOtig hefore the /olUereiii came into o|>eration, the same
sjiii-it which lc(l to its formation hail heen exhihited in various
parts of (irrmany, leacMng to sundry local and even naticjual
rcfoi'ms in the commercial policy of the (lernuin States.

Somi' steps had heen tiikcn in Prussia, during the years
lNl(! and ISlT, liy sundry ordiusinccs to introduce a gi'neral
anti simple system of eustom-hou.He legislation,' and ou the
Utith May, 1(SlS, a new tariff was puhlished, which is, in fact,
the groim(hv(U-k of the existing airangements, IJefore this
period a diri'ercnt liscal system prevailcti in different parts
of the Prussian kingdoiu. The imposts in Ihaudcnliiii'g
amounted to •!'.• grosclien — 1». 17. pei' individual; in Silesia
they wcic only -J groschen — 'Ik.%1. 'J'he new law allowed
tlu> unrestricted circulation of all foreign products which had

' Sec csppcinlly tlio onlinnnco of lltli .fiinr, 1810 — "Ziir AiifluOiiiii); iUt
W.'issiT lliniu'ii uiul I'rovin/iiilzolic zuiiiielint in ili'ii iilti'ii rrovinzi'ii dtr
Muiiarcliiu."

[Ifi;
It"

77//; ZOLLVEllKIN.

1(0

rtncf pjifisod the frontier, nml tlic fico trnnsit of all liomo |)ro-
iliicliuiirt. The intention of this lariiT of 1M18 was to estaliliah
10 per cent ns \\w niaxinuun of protection; and, liad tlie
intention of llic I'liissians l)een carried into effect, there
wonid have been no ^ronnds for complaint.

in HiifakinL"" of Ihi- I'rnsHian tarilV to the House of Coni-
mons, on the 7th May, IfSJT, Mr. Iliiskissun statetl "that, liie
duties on the internal consiniiption of Ihilish jroods are what
\V(! should consider \ery low upon most artitdi's, (hietuatin>;
from T) to 10 per cent — upon no one article, I iielieve, ex-
cel'din jr 1') percent ;" luit this was undoiilite(lly an incorrect
view of tl.inLTs, for it will appear, on the investiLTation of the
matter, thai the duties on many articU's of Hritish manufac-
ture vary from liO to 100 per cent upon the value; and
thouirh no doultt the duty (hein^r levied on the weiirht) has

mueh increased in n

I Villi

n'liii amount* 'incn

IS'

(, It was.

even then, fiom -0 lot'.o percent on \ mius low-priced manu-
factures; nor was Mr. Iluskisson warninted in sayin«r that,
"in the whole I'russiau tarifl', there is not a sintilc pmhihi-
tion," inasmuch as imports of salt and phiyin^-cards are
wholly prohiltited, except for u^oveinmeiit account.

The most important step liy which eviilence was Lnven of
the tendency of the dilTerent States of (Jermany to amalira-
mate tlii'ir interests and to estalilish, instead of many tarilTs,
one single system, was the union of IVivaria, Wiirtemlierfr,
II(ihen/.nllcrH-Si!_"'marinL''en, and Ifoheuznllcru-ireeMiuiren, in
the ('(juimercial leaiiiie of *2,Sth duly, IS^M. Iladeii, the two
llesses, and Saxony were aftcrwanls invited to join the

icajfue,

The LTovenimeiit of Prussia, ali\c

to ll

le state of

pultlic opinion, h.ul rnteictl liy various treaties, from lsl!> to
Is. 50, into a commercial li'airue with (Irand Hucil Hesse,
Lippe Hetmold, and some smaller states, and in l>eceml)er,
18"Jtl, the cnrlai'i's (such portions of the territory as are sur-
iiiundeil liy another State) of .Mecklenliurjj-Sehwerin, Uipen-
llesseland, Sch<enl»ertr, Aidiall-Kothen. .\nlialt-l)essau, llesse-
llomlturir, and other Stales, joined the Piiisso-Ilessiau I'nion ;
wliile, in IS'.l, Saxony, Klectoral Hesse, Saxe Weimar, Saxc^
Meiningen, Siuve Cuburg, Su.xc Altenhiirg, and other united

I .Ml 1

■ c

2:?

t, ■ ■
■I ' '

'■J

W 1

-I

It, f

I' I

176

ECONOMIC HISTORY.

tlu'inHclvos to tlio Iliivuro-Wiirtciiilicrf; Icdjjfuo. Kiich of thcRC
two great Ijnmchcs niitiirally Hoiijrht to extend its inlluenoe,
imd each itie|tare(l tlit; way for a fiiHion of tho whole hi one
great association.

On the 2:i(l March, IS.'Jo, a treaty was conclmhMl hetween
Prussia, IJavaria, Wiirteniherii', Kh'cforal and I)iical Jlesse;
on the 80th March of the same ycnr, Saxony joined the asso-
eiution ; on the 11th of May, Aidialt and Dneal Saxony nnited
themselves. The ralilications wi.'re exchauired on the 11th of
May. This treaty is the hasis of th(! Zollverein, or Coni-
nieicial licagiie. It will l)e fonnd at length in the A|t|)endix
I. (l»arl. I)(.e. pj). 7.'5-78). In 1835 IJailen iniited itself to the
League, and Nassan and Fraidil'ort-"n-the-Maino have also
heciinie parlies.

Th(> lirst Prusso-llessiiin Union, taking the name of tho
I'rctisslxi-/i-ffi'ssl.'«'/iiii Z'l/I I'l rli(iiidi\ comprising many smaller
Slates, such as ,\nhall Dessau, Anhalt Neuherg, Saxo Coliurg
fJollia, Anhalt Kolhen, Schwarzlturg Sondershauscn, llcsse
Ilomhurg, Scliwar/lturg Iludolstadt, etc., represented, accord-
ing to the census of 1831, a population of 13,93(!,0S7 souls,
and contained a territory of r),"J78 s<piarc (!erman miles.
In 18:'>o it had, hy the nnit»n of Eleidoral IIes.se and the
increa.se of population, nngmented the nundier of souls to
1 1.8-J7,418, and the territory to r),4(I0 square (Jerman miles.
The States of Thuringia, containing altout 1>00,OU() iidud)i-
tants, had also their commercial and toll union before they
joined the Prussian League in 1833, while Havaria, Wiirtem-
herg, Saxony, and Kaden, brought between 8 and *J millions
of i)opulation, and nearly 2/)00 square German miles of terri-
tory into the confederation.

The following tal)le exhil)its tho population of the States
now con>i)rising tho German Cu.stom-hou.se Union, to serve as
a basis for the Division of the Receipts at Triennial Periods :

ffii

niF. ZOLLVEIIEIX.

177

IK'iilltnnMoii of the Mtnli-iiwlilili
liitfi- k'vi'Ii tliiilr iMout lu
tbulr uwii uam«.

I'nmiiiii, ntiil tin- Stiitc§
wliicli liiivc conic tl>
nil ngrui'iiicnt with
luT

nnviiri:i

Saxony

Wiirtcinlicru . . . .

(iniTiil Diicliy of liiuk'n.

Klc<'tori»ic of llcs-tc . .

(irniiil Diicliy of llcsso .

'riiiirin){inii States . ,

Duuliy of Nassau . . .

Tolnl for Division
Frankfort^ . . , ,

Total for Topulation .

Kxtont nf t<ir-
rlliirliil mi-
|wrfli'li-H ill
•i|Uun) lulloa

,157
• 77
271

;wr>

27'.i
1M2
17'.t

loa

4.'a^

H.2W,'(Ai

Kx trn t of

lIlH ClllltOIII

Ik'Uku froii'
llur iu mllui.

I'npiilttinn KAPonlInK tn til*
I'lMiHiii tiicrtt'il iifHiii nil
till.' iJliit uf iM^emlwr, lu

774,%

I'rtO

liil^ro

llld

iV«

:»l'n"(,

,^*<T

flOiVfl

1 <l

l«.'o"<,

IrVff

t • • >

III

MOT

' • * •

1.064A»o

IWM

i«a7.

i;i,mf2,8«i)

■J.'-T) 1,118

l,'.ll.'),(ltiH
l,lL'7,122
l,'-';17,tl.-.7
1)40,(17 4
7tl!Ml'.tl
1K)K,17H
y7.!,t)(il

'-'fi,()'.t0,8n8
60,0<»0

26,160,81*8

M,ni8,LV,()

4,:!lli.«H7

I,<ir>-j.ii4

l,<lli7,".Mil

1,-Ji'i4,f.l4
r.;-.2,7tii

7!ll,7;!(i
lt.il. :f4()
;J8;J,7:!0

25,()»'.> :!:i;i
t;i),(NMi

'2«>,042,88a

The Zolheroin had to contend witli a stroni; oppDsition in
its orif^in, not only from some of the States whose hxMil posi-
tion forced lh(>in into tlie union, hut from otiicr (Jerman
States thai eontiniu'd indcpemh'nt, for Ihe tariff pi-essecl
e(]ually on all, not parties to the Lcairno, \vh<'th<'r neiuhliois
or foreiu;nei's. The I'nissian tarilTs of ISlS had hreii stronirly
resisted Ity Hlectoral Ifesse, Cassel, and other States. Sax(my
denounced them as hostile, nay, fatal to hei- niaiinfaetnrin<^
and commercial interests. Yet it cannot he dcnieil that the
tariffs of 181H were a j^reat improvenu'iit npon the previously
existing; leirislation, for they replaced multitudes of pruhihi-
tions and prohihitory duties hy moderate imports. Jn 1820
the qtiestion of a union Itetween I'russia and Ife.sse Darm-
stadt was disctissed, and an in<|uii'y was made, in case Ilesse
Darmstadt should unite with IJavaiia and Wiirtcmlicrg,
whether Prussia would ho willing to enteilain the suhject

' Tlie population of Frankfort Is not taken into the Division of tiie I{cvo-
nues, as lliis town receives an inaiionalile and invariable sum calculated on the
basis of a population of OO.CKX) souls (Oo.OJiO).

r m

..t

IMAGE EVALUATION
TEST TARGET (MT-3)

1.0

I.I

1.25

IIIIIM

IB
IIIIM

il: ■• 0

IIM

2.0

III™

U III 1.6

'(5.

<?.

C^ c>'

Photographic

Sciences
Corporation

23 WEST MAIN STREET

WEBSTER, N.Y. 14580

(716) 872-4503

4>^

♦

^,^

f^ <»^

C^^

178

ECONOMIC HISTORY.

'A*

of a commercial treaty. The first answer of Prussia was
unfavorable, but the difficulties were at last surmounted, and
the League before referred to was formed between Prussia
and Hesse Darmstadt, of which the Prussian tariff of 1818
was the basis, the custom-houses between the two countries
being wholly removed, — each State, however, reserved the
right to establish duties of consumption on sundry articles of
food and drink; and Prussia was allowed to maintain the
monopoly of salt and playing-cards.

The objects proposed by the Zollverein were the removal
of all restrictions to communication and transit, the abolition
of all internal custom-houses, the establishment of a common
tariff and system of collection, and the repartition of the
receipts on all imports and exports according to the popu-
lation among all the members of the League. The States
reserved to themselves the right of introducing any local
arrangements which did not interfere with the general princi-
ples, — of nominating the functionaries of their own districts,
and of examining the accountancy of any part of the League.
The League is bound not to interfere with matters of local
revenue, such as port-dues, turnpikes, tolls, etc. The Prussian
tariff of 1818 was recognized as establishing the maximum of
duties. It was determined that a common system of moneys,
weights, and measures, should replace, as soon as possible,
the various complicated and discordant usages of the dif-
ferent States of the union, and that the whole influence of
the union should be directed towards the extension of its
commercial relations with other States. The intention of
the tariff is to admit raw materials without any, or on merely
a nominal duty. The lightest duty levied is on silk goods,
amounting to 110 dollars per cwt., or about 3 shillings ster-
ling per Ib.^ The common rate of duty is half a dollar, or
Is. 6d. per cwt. on all articles not specially excepted. The
tariff, as fixed by the Congress which has just closed its
labors, will be found in the Appendix IL (Pari. Doc, p. 78).

It would ill become me, in this report, to discuss — though

^ The duty levied by the English tariff on silk goods is from lis. to 27s. Qd.
per lb.

u»\

THE ZOLLVEREIN.

179

I cannot pass over in absolute silence — the probable political
consequences of the establishment of the Zollverein. They
certainly were not lost sight of by its founders. The intimate
connection between commercial and political interests is obAd-
ous ; and the advocates of the League did not fail to perceive
that no political alliance would be so strong as that based
upon a community of pecuniary and social interests. The
jarring of differently constituted institutions, tlie local jeal-
ousies which still exert their influences, the clashing of
personal and privileged interests with the public weal, have
prevented, to a certain extent, the fusion which would other-
wise have taken place, so that the political and the commercial
policy are not always identified ; but it cannot be denied that
nrder a wise direction the machinery of the Zollverein would
become a very mighty political engine, which would be
brought to bear with great power upon the future concerns
of Europe and the world at large.

The general feeling in Germany towards the Zollverein is,
tnat it is the first step towards what is called the German-
ization of the people. It has broken down some of the
strongest holds of alienation and hostility. By a community
of interests on commercial and trading questions it has pre-
pared the way for a political nationality, — it has subdued
much local feeling, prejudice, and habit, and replaced them
by a wider and stronger element of German nationality.

The Zollverein, by directing capital to internal, in prefer-
ence to external trade, has already had a great influence
in improving the roads, the canals, the means of travelling,
the transport of letters, — in a word, in giving additional im-
pulse to inland communications of every sort. The isolation
of the several German States, with separate fiscal interests,
and often hostile legislation, prevented those facilities from
being given to intercourse which are alike the evidence and
the means of civilization. On every side beneficial changes
are taking place. Railways are being constructed in many
parts of the German territory, steamboats are crowding the
German ports and coasting along the German shores ; every-
thing is transported with greater cheapness and rapidity.

\ -'i

(

uAn

■n

•ii

II:
It

iif-

f. !<t

1 1"
if

180

ECONOMIC HISTORY.

But whatever opinions may be formed as to the effect of
the Commercial League upon British interests, it is now too
late to discuss tlicm beneficially. The League exists, and is
not likely to be broken up ; the separate interests of the
different States are blended in the common interests of the
Zollverein ; all the topics of comparison between the general
tariff and the tariffs which previously existed in the various
independent States of the union are now removed ; whatever
existed of local fiscal influence is merged in the common alli-
ance, and the League must now be accepted and treated with
as a body more iulluential than were any of its members, —
capable of controlling the smaller influences of its component
parts by the concentrated influence of the whole.

It is natural that a body so powerful as the Commercial
League should seek to extend its influence. More coasts,
more ports, and more shipping are the three desiderata whicn
are put forward by its advocates and members. For the
coasts and the ports of the Baltic belonging to the union are
so much cramped and prejudiced by the Sound dues that they
cannot meet, in any of the great emporiums of trade out of
the Baltic, the competition of the ports and coast south of the
Baltic; while the ports, such as Hamburg, Rotterdam, etc.,
which are the natural outlets of the great rivers which run
through the provinces of the League, all belong to States not
associated with it. The subject has been discussed of giving
a flag to the Zollverein, as it has already a coinage ; but to
possess a marine, both warlike and commercial, in order to
compete with the growing squadrons of Russia, and to be on
a level with the Hansc Towns and with Plolland, is an object
mucli insisted on, but which does not seem to present any
immediate prospects of realization.

On the 30th of July, 1838, an arrangement was made
(Appendix III., Pari. Doc, p. 95) for introducing a unity of
currency, to take effect from the 1st of January, 1841, the
unity to consist of the mark, weighing '2.^^-^^^^ grammes.

The mark to be represented by fourteen dollars ; the dollar
by If florins ; and the florin to be ^^ of a dollar.

The accounts to be kept either in dollars (Prussian crowns)
or florins (guilders).

ill

cct

any

THE ZOLLVEREIN.

181

Two millions of pieces of two dollars each are to be coined
before the Ist of January, 1842. The coinage has already
been introduced ; it bears the effigies of the King of Prussia,
and has on the reverse the inscription of Vereins Atiinze, or
" Association's Money."

The future influences and direction of the Zollverein will
1)0 determined not alone by the growing strength of the inter-
ests it represents, but by the direction which foreign nations
trading with Germany may be able or willing to give to their
own commercial legislation ; for, however enlightened may
be the policy, and however sincere the purpose, of the states-
men of Germany to prevent the League becoming an in-
strument for advancing the minor interests of certain classes
of producers, as opposed to the major interests of greater
producers, and to the general interests of the whole body
of consumers, all experience shows that the minor interest,
being more youthful, vigorous, and concentrated, weighs in
the balance for much more than its real value. The agi icul-
tural interest, for example, whiol^ in the States of the union
is the most diffused, the most important, and the most pro-
ductive, will not, in the contest with the rising manufacturin<^'
interest, obtain its full share of power, dependent as it mnst
naturally be to a great extent on the demands of foieign
markets. For it is to foreign markets alone it can look for
the sale of that surplus produce which home demand does not
consume, and wliich, as long as it remains without vent, must
create a depression in the price of the whole quantity pro-
duced. Hitherto the operation of the Zollverein has been to
strengthen the manufacturing interest at the expense of the
agricultural. As the foreign demand for agricultural produce
has been uncertain and capricious, the low average prices
have operated, on the one hand, in forcing capital out of
agricultural into manufacturing channels ; while the cheap
price of food has given to the German artisan great advan-
tages in his competition with the labor of countries in which
the price of food is relatively higher.

Were foreign markets accessible to the German agricul-
turist, there is no doubt the flow of capital towards manu-

hr3

lil

fir

182

ECONOMIC HISTORY.

facturcs would be checked, first by the increased demand for
agricultural labor, and, secondly, by the loss of the advantage
which the German artisan now possesses in the comparative
cheapness of food. For the prices of the countries which
would be importers of German corn, for example, would deter-
mine the prices of corn in the German markets for the Ger-
man consumer. In his own market he must give the same
price as the foreign buyer who comes into that market.

One of the great difficulties with which sound commercial
principles have had to contend, in Germany as elsewhere, is
the too general adoption of a phraseology which has grown
out of a vicious legislation, and has to a great extent popu-
larized error. High duties on imported articles are justified
by the plea that it is necessary to afford protection to the
producer, while the substantial fact of the consequent sacrifice
of the consumer is wholly kept out of view. For one case in
which the loss to the many is put forward, there are a thousand
in which the profits to the few are urged as sufficient sanction
to perverse legislation.

Dioterici^ gives a very curious table (p. 127), showing the
operation of the Zollverein during the years 1833 to 1835, on
imported articles.

On foreign articles of consumption not coming into compe-
tition with German articles the increase in the three years is
as fifty -four to forty-six ; in foreign articles of consumption
competing with German articles the decrease is as twenty-
four to twenty-nine ; in half-manufactured articles serving for
further labor the increase is only from 9,161 to 9,520 ; while
in wholly manufactured articles the decrease is from thirteen
to ten. . . .

The facilities created for communication by the improve-
ment of roads, canals, etc., have greatly aided the inland
trade of Germany. At the close of the last war there were no

* I have had occasion constantly to consult Dieterici's " Statistischo Ueber-
sicht der wichtigsten Gegenstande des Verkehrs und Verbraucha ira Preuesi-
schen Staate und im Deutschen Zollverbande, von 1831 bis 1830, aus amtlichen
Quellen dargestellt," Berlin, 1838. The valuable facts he has collected will be
found scattered over the whole of this report.

'I:

THE ZOLLVEREIN.

188

roads of the first class either in Pomerania, Poscn, or Prussia
proper. In 1816 the number of German miles laid down in
Chausdes was 523| = 2,408 English; in 1828 it was 1,062| =
4,889 ; and in 1831, 1,228^ = 5,610 ; and this amount has been
greatly increased at the present time.

Of the activity of communication, the following official
returns of the quantities of goods which passed through Prieg-
nitz will furnish remarkable evidence : —

Years,

1830 .

1831 .

1832 .
1333 .
1834 .

o o

1
1

9
O

Cwt.

246,934

683,020

446,567

48,322

138,813

. . .

. ■ .

153,314

229,412

695,610

519,086

45,574

158,196

46,988

. . .

34,088

246,145

720,289

540.240

53,297

147,617

57,213

18,489

94,899

200,664

700,858

477,979

32,902

132,612

50,948

9,694

80,595

307.087

927,764

755,038

28,575

221,623

70,728

11,067

906,112

Totol ia
Cwt.

1,716,963
1,628,954
1,878,19a
1,746,198
3,225,998

^>'i

j*4

I I

I '

It must not be forgotten that Great Britain had long enjoyed
]>eculiar advantages in the facilities of communication ; and to
these facilities much of the activity and success of her manu-
facturing and commercial industry is attributable. For many
years her progress in this respect created almost a monopoly
of benefit; but the advantages she enjoyed are now partici-
pated in by other nations ; and in Germany especially great
advances have been made, and continue to be made, in all
those improvements which facilitate intercourse.

It is obvious that England cannot long maintain exclusive
possession of advantages which civilized man is everywhere
successfully struggling to obtain. Railroads arc noAV being
introduced between the principal towns in the Zollverein, —
those between Dresden and Leipzig and between Berlin and
Potsdam are completed, many others are begun, and a still
greater number are projected; and in these enterprises the
undertakers have all the advantages of our experience. The

''i\

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? t .* TiJ

! it

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184

ECONOMIC HISTORY.

number of canals has considerably increased ; steamers are
giving great development to river navigation; and even in
those branches of industry in. which our superiority is the
most marked, such as the manufacture of machinery, com-
petition is marching after us with rapid strides.

But, independently of the progress of Germany towards a
participation in the advantages which for a scries of years
have been almost exclusively possessed by Great Britain, she
has aptitudes and facilities of her own which must greatly aid
her in the development of her industry. The frugal and
economical habits of the German people enable them to pro-
cure a far greater proportion of comforts for the same pro-
portional rate of wages than are generally obtained by the
English laborer; added to which a simpler mode of life, a
smaller consumption of animal food, and a less costly class of
garments, leave out of their smaller earnings a larger amount
of savings. Their savings are, for the most part, invested in
tlie pui'chase of the house in which they dwell, and the garden
which they cultivate, — whose cultivation is alike a source of
health, enjoyment, and profit, being in most cases a valuable
auxiliary to manufacturing industry. Nor ought the general,
the almost universal education of the population, be forgotten
as immensely contributory to the public prosperity. Elemen-
tary instruction is provided for all, and special instruction for
those who, in any department of art or industry, exhibit any
particular aptitude. I have given in the Appendix (IV., Pari.
Doc, pp. 96-97), a short account of the Gewerbe-Schule at
Berlin, which under the admirable superintendence of M.
Banth (whose services to his country arc beyond all estimate,
and above all praise), has first gathered from every part of
the kingdom the youths best fitted for scientific training ; and,
after a thorough course of education, has again dispersed them
over the country. The gradual diffusion of a knowledge and
a taste for art over the whole field of German industry, its
happy influence upon all manufactures, exhibited in a thou-
sand evidences of improvement, are obvious to every observer.
Manual skill and experience, more and more intimately asso-
ciated with scientific instruction, have been long preparing

it:

I}:,'-

THE ZOLLVEREIN.

185

the most important results ; and when the rising generation
of intelligent artisans bring their information and taste into
the wide region of manufacturing and commercial competi-
tion, there can be no doubt of their contributing largely to
the general wealth and weal.

The tariff of the Zollverein has no other prohibitions than
those of salt and playing-cards, which are monopolies in
Prussia ; and the principle of the tariff is to admit raw-
material, and materials serving the ends of agriculture and
manufactures, either on very low, or without any duties.
Thus, raw cotton, wool, coals, pig-iron, ores, raw hides, and
skins, hare and rabbit skins, potashes, common pottery, tur-
pentine, common furniture, chalk, rags, raw refuse of sundry
manufactures, trees for planting, manure, earths, fish, grass
and hay, garden produce, birds, blacklead, worn clothes,
precious metals, wood, turf, fresh fruit, milk, seeds, etc., pay
no duties at all.

The objections to the tariff of the Zollverein are twofold ;
they refer to the amount of duties levied, and to the manner
in which they are levied.

The duties are far higher than the Prussian government
professed its intention to levy. They were intended to repre-
sent the tariffs of Prussia. Now, in the communication of
Baron Maltzahn to Mr. Canning, dated Dec. 25, 1825, and
laid before Parliament, by order of Her Majesty, in answer
to the address of the House of Commons of 1st July, 1839,
the words of the Prussian minister arc as follows : —

" No one of the duties on imports is sufficiently high to
prevent the importation of foreign products, as is proved by
their extensive sale in all parts of the monarchy. The duties
levied on the products of foreign fabrics or manufactures
arc generally only ten per cent on their value ; on some they
amount to fifteen per cent, but there are many which are
more moderate."

But these repi-esentations are certainly not borne out by
facts ; for, not only do the duties levied on manufactures vary
from twenty to eighty per cent (instead of from ten to fifteen
per cent), but there are great varieties of goods which are

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ECONOMIC IIISTOIiY.

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wholly excluded from the Prussian markets in consequence
of the elevation of the tarift".

The manner in which the duties are levied is such as to
press most severely, with reference to their cost, on coarse,
inferior and heavy articles ; those least able to bear a high
rate of duty arc most imposed, the same amount of duty being
taken en all species of goods made of the same raw material,
— the finest (pialities pay the least, and the lowest qualities
the highest amount. The ad valorem principle, which is in
its nature the fairest, because it distributes taxation l)y the
measure of wealth and expenditure, is wholly lost sight of,
and the goods employed by the poor arc visited by a much
heavier rate of taxation than those by the opulent. The
richest muslin and the coarsest calico, the cloth of Sedan and
the serge of Devon pay the same amount per cwt. Hence
articles of low quality — such as are used by the many, such
as would have the largest sale — are wholly ex iluded from
the markets of the League.

It caimot be disputed that t\\o ad valorem system, as applied
to manufactures, has many inconveniences and ditticulties. It
is not easy always to ascertain even the approximative value ;
and with the number of custom-houses by which goods arc
allowed to be imported through a frontier, both of sea and
land, so various and extensive as that of the Commercial
League, it would be out of the question to seek for a sufficiency
of custom-house functionaries, with knowledge and experience
competent to the protection of the revenue against fraud.
There is no system so simple as that of weight ; it is intelli-
gible to everybody ; it is, too, a generally popular system, as
it affords no latitude for the caprice of the officer, and opens
no door to the frauds of the importer. It might probably
be associated with some classification of articles, if not too
detailed or complicated, into a few great divisions ; but the
desirableness of a thorough change in the system itself may
well be doubted, and such a proposal is not likely to be
entertained.

The Americans have strongly objected to the system of
levying duties by weight, instead of on value. They have

THE ZOLIVEREIN.

187

represented that the duty of ^ dollars on their tobacco, being
the same as that levied on the tobaccos of the Havana and
the Spanish colonics, is, in fact, a discriminating duty on
their produce, even to the extent of two hundred to three
hundred dtjlhirs per cent. They complain that while tlie
duties in the United States on the articles imported from
Germany do not upon the whole amount pay more than an
average of 5| per cent, the imjiorts from the United States
into the ZoUverein i)ay forty-six per cent duty. They re-
present that Prussia levies on American produce a gross
revenue of 770,006 dollars ; and while the United States
receive only 159,003 dollars from imports of the ZoUverein.
Of about four millions of dollars exported from the Com-
mercial League to the United States three millions (one and
one-half millions of linens, one million of silk, and half a mil-
lion merino and other similar articles) pay no duty at all.
The remaining million is principally composed of glass, hard-
ware, hosiery, etc., paying from twenty to twenty-five per
cent.

The original intention of the Prussian tariff has certainly
been much departed from, and the general principle which
was put forward has not been carried out In its details. For
not only did the Prussian government, in its ofhcial corre-
spondence, declare that it was its purpose not to lay duties
exceeding from ten to fifteen per cent, but the Commercial
League itself professed to make the Prussian tariff the basis
of the legislation of the union ; and the maximum intended
to be established by the Prussian tariff was an ad valorem
ten per cent on manufactures; for that tariff provides that
"The duty on consumption in foreign fabrics and manufac-
tured goods shall not exceed ten per cent; and it shall be
less, whenever a smaller duty can be imposed without injury
to the national industry."^ But the duties levied being, on
cotton manufactures, £1 lOs. per cwt.; on woollens, ^4 lOa. ;
on hardware, £>% 5*. ; on common linens, 33s. ; on fine linens,
X3 6s. ; and on silks, £16 lOs., per cwt., — do, on the whole,

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188

ECONOMIC HISTORY.

greatly exceed the proposed ton per cent. Tho system of
imposing tho duty by weight has tho advantage of great sim-
plicity, but it acts in complete hostility to tho ad valorem
principle, as tho duty increases, instead of diminishing, with
tho lownoss and coarseness of tho article ; so that tho oper-
ation of tho tariff is as complete an exclusion of every low-
priced manufacture as if it were absolutely prohibited. Under
the influence of this state of things, the duty on cotton goods
varies from three and one half to one hundred and twenty
per cent.

It has been remarked that this system fails in the very ends
proposed, namely, to distribute tho amount of protection in
proportion to the backwardness of the manufacture. C:i cer-
tain articles the amount of duty is so heavy as completely to
exclude foreign competition, where tho homo production re-
quires no such encouragement as that afforded by the tariff ;
and on others, where a protecting duty is required by the con-
dition of the home production, tho duty on the foreign article
is small, and insufficient to check its introduction. Uut tho
general result of the tariff is to exclude the foreign articles of
low quality and general consumption, and thus to keep the
largo demand exclusively for the home manufacturers. One
baneful effect is, however, that tho increased price is levied
on those who are least able to pay, and levied on articles of
the lowest value, for tho piece goods which are consumed by
the opulent are precisely those upon which the smallest amount
of duty is collected.

It has, indeed, been argued that the levying heavy duties
npon manufactures of ordinary quality, so as to exclude them
from the markets of the league, is, in fact, to create a demand
for superior articles, and so confer a benefit upon the German
consumer ; but to the immense multitude of consumers, cost
is tho all-important consideration ; and to deny access to low-
priced articles — or by prohibitory duties on foreign fabrics,
considerably to elevate the price of the home-made article —
is, in all cases, to levy an unfair and unequal contribution on
the poor, and in many cases wholly to exclude them from tho
enjoyment of what would otherwise be accessible to them. In

THE ZOLLVEREIN.

189

i !* ;

fact, to exclude the ordinary manufactures of foreign countries
is to give a 8i)ccial premium to the production of ordinary
manufactures at home, is to create for the least advanced,
tho least intellij^ent indi stry, a field of peculiar favor; and
it may bo well doubted if tho monopoly thus established for
tho manufacture of low articles is beneficial to them. That
it is prejudicial to the consumers is obvious, but some of tho
ablest writers on the ZoUvcrein have expressed their convic-
tion that tho uncontrolled power given to the German manu-
facturer of low articles in the German market is baneful as
well to his own as to the public interest.^

Tho tendency of opinion in Germany is towards free trade.
Almost every author of reputation represents tho existing
system as an instrument for obtaining changes in favor of
commercial liberty. One of tho most distinguished writers
on the Commercial League, in cautioning the capitalist from
embarking his wealth in tho protected branches of industry,
says, *' You are building ships which are not prepared for the
storm. You are creating interests which cannot make their
way through a crisis; you arc erecting edifices upon sand."^

It should be borne in mind, however, that the tariffs of tho
ZoUvcrein are far more liberal than the old tariffs of Prussia,
which were intended wholly to exclude foreign manufactures.
But diminished duties have not injured her own manufactures.
No man is found to deny that tliey have made a much greater
progress under a less protection than they made when the
home market was, by a greater protection, closed against for-
eign competition.

The Prussian tariff of 1818 was a great improvement on
preceding legislation, but it contained many incongruities,
which were changed by the tariff of 1822. On many articles
the duties varied between the eastern and western provinces.
Common cloths, which paid 2G rix-d. 22^ gr., and fine cloths
paying 47 rix-d. 10| gr. in the eastern provinces, paid only
22 rix-d. 18| gr., and 43 rix-d. 7i gr. in the western ; cotton

^ See Osiander, " Bctrachtungcn iiber don Zoll Preussischen Tarif ." Stut-
gart, 1837, pp. «9, 90.

" See Osiander, " Betrachtungen," p. 97.

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190

ECONOMIC HISTORY.

twist paid 2 rix-d. 10 gr. in the eastern, and only half that
amount iu the western provinces; while dyed twist paid
6 rix-d. 17^ gr. in the former, and 5' rix-d. 17^ gr. in the
latter. White and colored woven cottons and cottons mixed
with thread paid the same duties as fine woollens, namely,
47 rix-d. 10^ gr. and 43 rix-d. 7i gr. ; and printed and fine
cottons, 61 rix-d. 3} gr. in eastern, and 57 rix-d. in western
districts ; gray linens 2 rix-d. and 1 rix-d. 22| gr., and
bleached, 12 rix-d 65 and 8 rix-d. 8^ gr. ; silks, 171 rix-d.
3 J gr. in the eastern, and 167 rix-d. in the western depart-
ment; half silks, 79 rix-d. 131 gr., and 75 rix-d. 10 gr.
Common iron goods paid 6 rix-d. 17| gr. in the east, and

5 rix-d. 2^ gr. in the west; fine iron goods, 24 rix-d. 12i gr.,
and 20 rix-d. 10 gr. ; and cutlery and fine hardware, 79 I'ix-d.
13i gr., and 75 rix-d. 10 gr. The tariff of 1822 left the
distinction only existing on cotton twist; introduced a uni-
form duty of 30 rix-d. on woollens, and 6 rix-d. on dyed twist;
60 rix-d. on cottons generally, but reduced the duty on cot-
tons mixed with thread to 10 rix-d., which it also levied on
bleached linens ; lowered the duties on silks to 100 rix-d.,
and on half-silks to 50 rix-d.; on common iron goods levied

6 ri.x-d. ; on fine, 10 rix-d.; and on cutlery and hardware,
50 rix-d.

Thus the tariff of 1822 was in every respect an improve-
ment on that of 1818. In 1825 the duties on woollen warps
were reduced from 30 rix-d. to 10 rix-d.; and those on car-
pets of wool and thread from 30 rix-d. to 20 rix-d. ; those on
fine linens and cottons mixed with flax were raised from
10 rix-d. to 20 rix-d. In 1828 the duties on flannels, mol-
tons, etc., were reduced from 30 rix-d. to 10 rix-d., and on
woollen carpets from 30 to 20 rix-d.

Up to this period half the duty was payable in friederlchs
iVoi', which was an augmentation of about six per cent upon
the tariff. In 1832 the duty on wocHen yarn was lowered
from 0 rix-d. to 15 silver gr. ; on carpets in general it was
lowered from 30 rix-d. to 22 rix-d. ; on woollens it was raised
from 30 rix-d. to 33 rix-d.; on cotton yarns 2 rix-d. were
established as a general duty ; 55 rix-d. on cottons and cut-

..it-":

\l>k l

THE ZOLLVEREIN.

191

lery, instead of 50, which 50 continued to be levied on cotton
and flax manufacturers; and the duties on silk were raised
from 100 rix-d. to 110 rix-d. The tariff of the Zollverein,
in 1834, reduced the duty on carpets from 32 rix-d. to
20 rix-d.; and on woollens generally from 33 rix-d. to
30 rix-d. ; on cottons from 55 rix-d. to 50 rix-d. Tlie duty
on linen thread was raised, in 1837, from 6 rix-d. to 8 rix-d. ;
and on twisted cotton to the same amount. The tariff of
1840 has lowered the duties on cutlery and hardware from
55 rix-d. to 50 rix-d.

The changes introduced by the Congress of 1839 into the
tariffs 01" 1837-39, are not very considerable. The adoption
of the unity of 50 kil. as the cwt. of the tariff, operates as
an elevation of 2|^ per cent, in all cases, when it applies to
articles, the duty on which is charged by weight, as is the
case with the major part of the goods mentioned in the tariff.
The system of tarification has been simplified throughout by
the cutting off all fractions of lbs. The most important
change is the reduction of the sugar, rice, and hardware du-
ties. . . . Tlio standard of the florin is altered from 24 gold
standard to 24A gold standard ; so that, under the new tariff,
the rix dollar is now represented by If fl., instead of If, as
in tlie former tariff. Thus, the general rate of import duty
(when there is no special exception) was, in 1837-39, one-
half Prussian dollar, or 15 silver gr., represented by 50 kreut-
zers ; but at present the general import duty of one-half
Prussian dollar is represented by 52i krs.

Attached to the custom-house tariff will be found the va-
rious regulations under which the transit duties are levied in
the States of the Prussian Union.

The legislature yji Prussia has generally made the transit
of goods tlirough her provinces a source of revenue ; and it
has not been wholly unproductive, as a large portion of Po-
land and southern Russia import and export through the
Prussian ports in the Baltic. The difficulties which Russian
legislation has always thrown in the way of transit may, per-
haps, have had some influence on the councils of Prussia ; in
fact, the lieavy transit-duty imposed on goods imi)orted through

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192

ECONOMIC HISTORY.

I ' J

if!

I '

the ports of the Baltic could hardly be maintained were the
Prussian transit-system a wise and liberal one. The South-
ern States of the union have, for the most part, endeavored
to secure through their territories a cheap transit for com-
modities intended for other countries. The general princi-
ples of the transit law are, that, —

1. All articles admitted without duty shall transit without
duty through the ZoUverein.

2. All articles upon which the export and import duties,
separate or together, do not amount to i dol. or 52^ kr. per
cwt., are to pay the amount of the said duties.

3. All articles upon which, the export and import duties
exceed ^ dol., or 52i kr. per cwt., shall pay on transit i dol.
per cwt.

But there are many exceptions. The exceptional transit
duties levied by the tariffs of the Zollvercin arc : On cotton
and other -goods, coming or going through Baltic ports, 4 dol.
(12s.) per cwt. ; through other roads, 2 dol. (Gs.) per cwt. ; on
cotton twist and dyed woollen yarn, 2 dol. ; on copper, coffee,
etc., 1 dol. per cwt. ; on raw sugar, 20s. gr. (28.).

But goods going from the Oder mouth on tlie left bank of
the Oder, westward, towards the Rhine, and through the
frontier between Ncu-Benin, in Silesia, to Tliorn, in Bavaria ;
or, entering the right bank of the Rhine again, to traverse
the Rhine for export, cottons, woollens, and many other
articles, 1 dol. (3s.) per cwt.

Goods conveyed by the left bank, or on the Rhine, or on
the Moselle, and over the southern frontier between Hamburg
and Freilassing, or over the northern frontier between the
Rhine and the Elbe, 10 sq. (Is.) per cwt.

Goods conveyed over the southern frontier, or from the
Rhine to the Danube, 4 J sq. (5Jrf.) per cwt.

Tlic details will be found in the Appendix (III. Pari. Doc.
p. 95) attached to the Tariff.

The transit system of the ZoUverein is somewhat compli-
cated, and inconsistent with the general and simple character
of the legislation. The tables in the Appendix (V. Pari. Doc.
pp. 99-112) will exhibit the amount of goods passing through

i^ii

THE ZOLLVEREIN.

193

the various provinces of the League. One general transit
duty, of low amount, would certainly be very favorable to the
carrying trade of the union ; nor are the reasons quite ob-
vious why, in the recognition of a principle of equality, the
conveyance of goods through certain States of the union
should be loaded with much heavier fiscal charges than
through others. It would seem more accordant with sound
principles to encourage transit through the districts which
geographically present the greatest facilities, rather than to
give advantages, by lower duties, to districts less conveniently
situated.

Perhaps the wisest course, in the common interest of the
Zollvercin, would be to completely disassociate all fiscal con-
siderations from the question of transit, and to levy no other
duty than is necessary for paying the expenses of collection
and control. The prohibitory tariffs of Russia, Poland, and
Austria, certainly require no new charge or impediment to be
added by a heavy transit duty to the cost of the articles im-
ported through the States of the League. And, even with the
high rate of duty levied (or perhaps rather on account of the
high rate of duty levied), tlie pecuniary interest to preserve
the present system is small, — far too small to counterbalance
the disadvantages and detriments which the system creates.

Another obvious inconvenience and loss accrues to tlio Zoll-
vcrein from tlio motives which the lower transit dues of
France, Holland, and Belgium create for transporting goods
through the ports of those countries instead of tlic ports of
Germany ; added to which, a habit of forwarding articles by
a particular line creates new interests and motives, which
make it diHicult to revert to a former state of things. When
business has been forced out of its natural channel into a
novel course it does not promptly resume its old direction,
and the ground lost is often not again to bo won.

The lowest transit duty levied in the Zollvercin, with tlie
exception of the road from Mayence to the southern frontier,
is 4J silver gr. (5^(7.) per cwt. ; but on the main roads of
Austria transit is free from charge, while in France the charge
is less than half the amount of the minimum Prussian duty.

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194

ECONOMIC HISTORY.

At the same time, the advantages which the railroads of
Belgium offer, and the free navigation of the principal rivers
of Germany, as established by the Vienna Congress, would
all seem to co-operate in showing how much it is for the in-
terest of the League to facilitate transit by every possible
means.^ The attention which has been of late years so suc-
cessfully given in Germany to the improvement of the roads,
and all other means of communication, cannot receive a
greater recompense than by encourngcment given to the tran-
sit trade by a low rate of duty levied. The profits deposited
by the transport of merchandise, are, from their cliffusion, apt
to escape attention ; but perhaps there are none whif^.h give a
greater activity to agricultural industry, nor which are jriore
intimately connected with the public prosperity and the gen-
eral progress of improvement and civilization.

There is considerable difficulty in estimating the amount
of the imports from Great Britain into the States of the Zoll-
verein, as they penetrate through so many channels, — not
only through German ports, but from the ports of Holland
and Belgium and the Hanse Towns. From Hamburg and
the Elbe especially a large part of the wants of the Vcrein
are supplied ; there are also large importations through Rot-
terdam and the Rhine, as well as through Bremen and the
Wescr. But, by a comparison of tlie returns of our imports
from and exports to the various circumjacent countries,
which have been prepared with his accustomed accuracy and
diligence by Mr. Young (Appendix VI. to IX. Pari. Doc.
pp. 113-139), with the very detailed statements given me by
the Prussian government, all of which documents will be
found in the Appendix (XI. to XVII., Pari. Doc. pp. 143-
226), an approximate estimate of the general amount, and
of the special details of our commercial intercourse will be
obtained.

Though the strong and irresistible tendency of an organ-
ization like that of the Commercial League is to blend the
separate interests of its component parts into the common

•' ' 1 Osiander, pp. 116-117.

Id-

THE ZOLLVEREIN.

195

and paramount interests of the whole, and to give to the
Union, as a body, an influence sufficiently powerful to pre-
dominate over the local and partial influences of the various
elements of which that Union is composed, still much time
and much judicious legislation will be required, in order that
the Union may fairly represent the various interests which
are comprehended in its action. Happily the greater interests
are and must long continue intimately connected with the
foreign trade of Germany, — for though the manufacturing
tendencies of a portion of the States of the Union, associated
as such tendencies are with a restless activity, — a spirit of
association, a unity of purpose, a combined action, hich give
them more than their fair and full importance in the struggle
for what is called " protective legislation," yet it cannot bo
denied that there is in Germany such a general diffusion of
intelligence as will check the sinister interests in their de-
mand for prohibitory duties on foreign manufacture. And at
the present moment the agricultural interests, taking in the
whole of the confederated States, represent a vastly greater
amount of capital and labor than the manufacturing. The
agricultural interest exists everywhere and in many extensive
provinces of the Union without any counterbalancing manu-
facturing interest, while the manufacturing interest is to a
great extent of modern growth, and confined to a limited
portion of the field of production. And even that manufac-
turing interest can only safe^" rest upon a system of moderate
duties ; for as soon as it is able to supply the markets of Ger-
many, it must, for its surplus produce be thrown into compe-
tition with the manufacturers of other lands, and can only
compete successfully by cheap production, to which a protec-
tive and prohibitory system is in its very nature opposed ; for
its object and its essence are to promise and to secure high
prices to the home manufacturer. And if the interest of
Prussia for example be considered, — Prussia, whoso popiila-
lation comprises two thirds of the whole population of the
Commercial Union, — it is certain that not only arc her true
interests hostile to any system which prohibits the introduc-
tion of foreign manufactures, her capital engaged in manufac-

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196

ECONOMIC HISTORY.

tures being inconsiderable ; but the general conviction of the
heads of departments in Prussia is opposed to a protecting
legislation.

The financial necessities of Prussia have frequently been
put forward as the reason for the high rate of duties estab-
lished by the tariff of the ZoUverein ; ^ but it is clear that
many of the rates are far too high to be productive ; some of
them are wholly prohibitory ; and the revenue would certainly
be benefited by a considerable reduction. The ZoUverein,
however, has never been regarded by the contracting States
with a view solely to the financial question ; its social and
political consequences would reconcile many of its members
even to considerable pecuniary sacrifices. . . .

! i

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LE ZOLLVEREIN.

{Resume Statxstique.)
From Legoyt's La France et l'Stranger,* Vol. T. pp. 250-5.

LE ZOLLVEREIN (des deux mots allemands Zoll,
douane, et Verein, association) est le nom donnd h,
I'association douaniere qui existe a' jourd'hui entre tons les
racmbros de la Coufdddration gormanique, moins TAutriche,
Ics trois villes Ansdatiqucs (Bremc, Hambourg, et Liibcck),
le Mccklembourg, les duchus de Ilolstein et du Lauenbourg,
et la principautd de Lichtenstcin. La Prusse y figure meme
pour ses provinces placdcs en dehors de la Confederation.

Le principe do cette association se trouvc dans I'articlc 19 du
traitd qui a fondd la Confederation germanique et qui est ainsi
con^u : " Ses mcmbres se rdservent, c\ la premiere rdunion de
leurs pldnipotentiaires i Francfort, de deliberer sur un projet

1 Osiander.

2 Paris ; Veuve Berger-Levrault et fils, 1805.

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LE ZOLLVEREIN.

197

de douanes et de navigation pour toute rAllemagne." Mais
elle trouvait surtout sa raison d'etre dans I'organisation tcrri-
toriale et politique de I'Allemagne, composde de quarante Etats
presque tous enclaves les uns dans les autrcs, ayant ehacun
8CS barriOres fiscales et son tarif. On a conitd que, pour par-
vcnir do la frontiere au centre du pays, soit du nord au sud,
soit de I'ouest a Test, sur un espace de 370 i\ 445 kilometres,
les marchandises n'avaient pas moins de seize lignes de dou-
anes ^ traverser, non compris les lignes intdrieures appar-
tenant ^ I'Etat, aux communes et meme aux particuliers !
De h\, des frais et des pertes de temps dnormes, qui, en les
grevant outre mcsure, arretaient h, la fois la production et
la consommation.

La Prusse, dont les provinces orientalcs dtaient sdpardes du
reste de la monarchic par le Hanovre, le Brunswick, et la
IIesse-Cassel,etqui souffrait le plus,peut-etrc, de ce morcelle-
ment de son territoire, prit I'initiative des ndgociations qui
devaient conduire au Zollverein actuel. Ses ouvertures furent
d'abord accueillies par le Schwarzbourg-Sondersliausen, I'une
de ses enclaves; puis, de 1819 ^ 1828, 1'association naissante
vit successivcment venir h, elle les principautds ou duchds de
Hesse-Darmstadt, Schwarzbourg-Rudolstadt, Saxc- Weimar,
Anhalt-Bernbourg, Anhalt-Dessau, et Anhalt-Coethcn, soit
pour la totalitd, soit pour une partie de leur territoire. Un
certain nombre d'Etats du second ordre, ayant &, leur tete la
Baviere et le WUrtcraberg, tenterent d'enrayer ce mouvcment
dans Icquel ils voyaient un agrandissement indirect do Tinflu-
ence politique de la Prusse ; mais, convaincus do I'inutilitd
de Icurs efforts pour constituer unc ligne douaniore de quelque
importance, ils se rdunirent au Zollverein, le 23 mars 1833.
La Saxe suivit leur exemple, le 30 mars de la memo annde,
et entraina ^ sa suite les Etats de la Thuringc, la branche
Ernestine de Saxe, Schwarzbourg et Rouss. Apres de longues
lidsitations. Bade se ddclara pour le Zollverein le 12 mai 1835;
Nassau, le 10 ddcembre 1835 ; Francfort-sur-le-Mein, le 25
Janvier 1836 ; la principautd de Lippe-Detmold, le 18 octobre;
le Brunswick, le 19 octobre ; la Hesse-Electorale et le comtd
de Schaumbourg, le 13 novembre ; le comtd de Waldeck, le 11

'■I sti

.f,\

1 I 'I

198

ECONOMIC HISTORY.

ddccmbrc 1841; Ic duchd de Luxembourg, Ic 8 fdvrior 1842;
cnlin, le 1" Janvier 1854, les derniers Etats rest<J8 fideles i\
I'association du Steuerverein, c'est-^-dire le Hanovrc ct lo
duclid d'Oldenbourg,

D'ai)ro3 le receiisement de ddccmbre 1861, la population do
cliaquc Etat associd s'^levait aux noinbres ci-apres : —

I'russe . . .

18,807,061

Wiirtemberg .

1,V20- 78

Oldonbourg

238,502

Luxembourg

197,731

Bade . . .

1,365,732

Nassau .

454,320

Biiviere . .

4,095,424

Ik'sse-Casscl .

710,080

Fraucfort

84,606

Saxf royale .

2,225,244
1,069,821

Hcsse-Darni-
stadt . . .

874,231

Tliuriiige

Uanovre . .

1,908,031

Brunswick

257,624

Total .

84,670,277

■

't '

m rillB

J" .,-

■■!:'

Ccs 34.6 millions d'habitants occupent une superficie de
502,260 kilometres carriis.

Le Zollverein n'est pas rest<5 commercialemcnt isold. D«5s
sa formation, il s'cst cfl'orcd d'agrandir ses dijbouchds par des
traitds avcc les principaux Etats do I'ancien et du nouveau
mondc.

Ces trait(js de commerce so sont succddd dans I'ordro ci-
aprcs: avec la Hollande, les 21 Janvier 1839 et 31 d(;cembrc
1851; avec la Porte, le 19/22 octobre 1840; avec I'Angle-
tcrre, les 2 mars 1841 et 11 novembre 1857 ; avcc la Belgiquc,
les 1«' scptombre 1844, 2 Janvier 1851, ct 18 f(ivrier 1852 ;
avec la Sardaignc, les 23 juin 1845,20 mai 1851, et 28 octobre
1859; avec rAntriche, le 19 fevricr 1853 (d'abord avec la
Prusse seulement, puis avec le Zollverein, ct plus tard, avec
les duchds dc Parme et de Modene) ; avec le Mexique, le 30
juillet 1855 ; avcc Ercme, Ic 26 Janvier 1856 ; avcc la Sicile,
le 10 aoflt 1856 ; avec le Danemark, le 14 mars 1857 ; avcc
I'Autrichc et la principautd de Lichtenstein (convention mond-
taire), le 24 Janvier 1857 ; avec la Perse, le 25 juin 1857 ;
avec la confdddration Argentine, le 19 septembre 1857.

L'influencc de ccs traitds sur le commerce du Zollverein est
clairemont indiqude par le tableau suivant, qui en fait con-
naitre, de 1834 k 1860, la valeur moyenne annuclle absolue
et par tete d'habitant. Pour la pdriode 1834-1846, cette va-
lour a dtd calcul^e par M. O. Hiibner (Jahrbuch pour 1860 et

LE ZOLLVEREIN.

199

1861'), d'apr^a des prix iuvariables ; pour les autrcs anndes,
d'aprcs Ics prix rdels. Lea sominca aont en milliona de
francs.

4
P^rlodes et annies.

S
•B

V 2

If.'

5.M.S

111
III

1834-1838 .
1839-1843 .
1844-1846 .
1860-1852 .
1853 . . .

477.0

077.2

813.4

704.6

764.0

1,009.1

1,184.2

1,312.9

1,327.5

1,205.6

691.0

602.6

655.1

070.6

042.7

1,262.9

1,157.2

1,195.5

1,324.1

1,315.6

219.0
207.4

aio.o

3146
3956
457.5
020.2
550.9
541.5
419.2

1,008.0
1.339.9
1,408 5
1,375.1
1,707.3
2,202.0
2,341.4
2.508.4
2,051.6
2.521.1

24.6
20.7
29.0
30.2
32.5
32.6
32.7
33.0
33.2
33.5

434

60.2
50.6
46.5
62.5

1864 . . .

09.2

1865 . . .

71.5

1856. . .
1867 . . .

70.0
79.9

1868 . . .

75.2

D'apr^s CO tableau, Thistoire commercialo du Zollverein a
eu trois pliaaes tres-distinctca. La premiere comprend la
pdriodc 1834-1846 ; c'est peut-etre la plua brillante. La
secondc embrasse lea anndes de crise 1847 ^ 1852. La troi-
sieme, commencde en 1853, se continue en ce moment ; 1857
en est le point culminant. Vient ensuite une r<:;action asaez
sensible, qui, quoique pcrdant cliaque jour de son intensity,
n'a pas encore fait place i une recrudescence bien caractdr-
isdc. — Les deux colqpncs, importations et evportations, in-
diqucnt la correlation intime qui exisfce toujours et partout
cntre ces deux ei<jmcnts du commerce. Infdrieures pendant
assez longtemps aux premieres, les secondes ne tardcnt pas h
les <5galer et memo h les ddpasscr dans ccrtaines anndes. Cost
la preuvc du rapide ddveloppcmcnt manufacturicr de I'associa-
tion. Par suite do I'extension graduelle de son rdseau do
voics ferrdes, de I'amdlioration dc ses voies navigables et do
la reduction des droits de transit (aujourd'hui supprimds),
son territoire est, en outre, cmpruntd par une valeur (calculde)

1 On Bait que les droits de douane du Zollverein sont e'tablis au poids. Les
publications officielles ne font done pas connaitre la valeur du commerce de
I'association.

I ('

200

ECONOMIC III STORY.

VkV^

I'l.

i .t'i\

m
m

• M

sans ccssc croissanto do marchandiscs. No pcrdona pas dc
vue toutcfoia quo la valour, surtout la valour acfuelle, no
saurait donnor, particuliercmcut dans oos dornicrcH ann<;o8
ou Ics prix oni; 6t6 I'objot d'uno luui.sse si 8(judaiuo et si
rnpido, la mosurc cxacto du mouvemcnt dcs (ichanges ct du
transit du ZoUvoroin. L'indication des quant ites scrait un
documont plus prdcis ; mais olio cxigurait des d(5voloppomcnt8
qui no sauraiont trouver place ici.

D&iliaNATlON PES ARTICLI8.

Toilesdefil

Soieries puree

Soiories iiiulnngdcs

Lainii(;cs

Fourriires et pelleteries . . .

Habits (reiifantB

Objots en f'er

Objets en cuivre et laiton . .

Objets en plonib

Objets en zinc

Objets en e'tnin

QiilncRillerie

Objets en pierre, marbre, et

nutres minernux

Vaisselle et porcelaine . . . .

Verre et vorrerie

01)jet8 en bois

Objets en cuir

Brosserie et boissellerie . . .
Objets en paiile, en ecorce, etc.
Papiers, jeux de cartes, papier

de tcnturc, cartons ....

Frodiiits cliimlques

I'oiidre a tirer

Savons

Boufiies et chandellcs ....
Farines et prodiiits farineux . .

Sucre rafflne

J'au-de-vie

Taliac

Livres

Iiistruinents

Valeur totale

Importations.

1834. 1814. 1837

88.9
34.1
12.4
2.6
4.9
0.2
0.1
2.2
0.7
0.04

0.1
1.9

0.4
1.5
2.0
1.1
0.7
0.1
0.4

0.4
1.9

0.1
0.1
0.1
0.3
0.3
1.5
4.9
0.4

164.9

C1.5
8.6

14.6
H.'J

13.1
0.1
0.3
5.2
2.2
0.04

0.1
3.7

0.4
1.5
5.6
2.6
1.6

0.7

0.4

2.6

0.2

0.1

0,1

0.2
30.4
13.1

7.1

0.4

184.5

78.4

ltt.9

33.0

7.1

22.6

0.4

0.2

10.0

0.03

0.1

1.4

0.03

0.1

7.1

4.5

3.0

0.01

1.9

1.1

6.0

0.1
0.1
4.9
0.1
22
9.0
8.6
1.1

223.9

EZPORTATIONS.

1834. 1844. 1837

44.2

88.1
27.4

7.9
67.1

0.4

0.7
12.7

3.4

0 04
01
18.4

0.3

3.7

6.0

7.9

3.7

0.04

4.5
3.4
0.1
0.1
0.1
1.6
1.1
1.1
5.2
4.5
1.5

315.2

40.5

67.0

40.1

13.5

W).0

0.7

1.5

13.9

3.0

0.1

45.4

1.1
7.5
3.7
9.4
1.9
0.1
0.1

1.5

4.9

0.1

0.04

0.1

1.1

1.9

0.0

6.7

305.4

100.9

55.5

85.1

18.0

168.6

1.9

18.0

0.7

0.4

6.0

0.4

52.6

0.3

20.2

18.0

22.9

7.1

0.2

0.3

7.6

16.9

0.4

0.2

1.9

1.3.6

7.1

36.2

18.7

16.9

5.7

698.9

Lo tableau prdcddcnt fait connattrc la valour dos produits
fabriquds que le ZoUvorein a importds et exportds en 1834,

LE ZOLLVEREIN.

201

1844, ct 1857. II n'a d'autro but quo d'indiqucr ccux do ccs
|)roduit8 qui sont le plus habituoUomcut consommos ou fab-
riquda daus les Etats do rUuion,les ([uautitus ayant du ndces-
sairouicnt s'cjlcvcr avcc lo chitlrc do la poitulatiou. CVpoudant
il fournit co irnsuigucmout important et indupondunt du
niouvcniont do la population, que, tandis que los importations
no HO sont aocrucs, do 1834 i\ 1857, quo do 3G p. 100, les
exportations out plua quo doubld. Cost, cummc nous le
disons plus haut, le signo certain dos progrus remaniuables
do I'industrio manufacturiero dans I'association.

La signature rdccntc d'un trait<i do commerce et do naviga-
tion entro la France ct la Prussc, traitd en co moment soumis
^ rcxamon dos autrcs fitats do I'association, donne un intdret
particulier au tableau ci-apr6s, relatif a nos relations com-
mercialcs avec lo ZoUverein. 11 a dtd dresse d'apros les docu-
ments francjais, ct indique les valours actuelles (en millions
do francs). II so rapporto au commerce special.

Importa-

Exporta-

Importa-

E.iporta-

AnniSca.

tion!! en

tions do

Annies

tion.'! en

tionx (le

Fruuce.

France.

1847

52.7

40.2

1853 ....

fln.9

490

1848

2:!.0

29.6

1854 ....

75.7

646

184!)

32.3

38.0

1855 ....

108 1

fio.S

1850

30.2

44.7

1856 ....

110.3

89.7

1861

38.1

44.1

1857 ....

120.7

117.7

1852

48.3

42.3

1858 ....

100 8

147.7

Les importations du Zollvcrcin en France portent princi-
palement sur dcs matieres premieres de I'industrio (laines,
bcstiaux, houille, coke, bois, pcaux brutes, poils). Les soie-
ries et les lainages y figurent ccpcndant pour un chiffro assez
(jlevd.

Les exportations do la France pour Ic Zollvcrcin ont, au
contraire, pour objcts principaux dcs produits fabriquds,
comme les soieries, les lainages, les vetcments et lingeries,
les cotonnades imprimdes, les pcaux ouvrdes, les fils de lainc,
les outils et instruments, etc. La France expddie en outre
dans le ZoUverein, quand la rdcolte est bonne, dcs quantitds
assez considdrables de vins ordinaircs.

!; ■

202

ECONOMIC HISTORY.

H'il fallait jugcr, d'apris lo mouvoincnt do la navigation
dans Ics ports prussiens, do I'importanco relative du com-
merce du Zollvorcin avcc Ics divers Etats eurupdens, c'est
avec I'Angleterro qu'il cntretiendrait Ic mouvcment d'affaires
le plus considerable. Viendraient cnsuite, par ordre ddcrois-
sant de trafic, les trois royaumes scandinaves, la Ilullande,
les portes ansdatiques, la Franco, la llus.sie, etc. Mais il ne
faut pas pcrdre do vue qu'en co qui conccrne la Franco, la
plus grando i)artie do son conunerco avcc lo ZoUverein so
i'ait par la voie de terre.

Les recettes des douancs du ZoUverein ont oscilld ainsi
qu'il suit do 1834 Jt 1859 (nombrea en millions do francs).

Anii(>ea.

ImporUi-
tiuii.

Exporta-
tluii.

Transit.

AuD6oa,

Importa-
tion.

Exporta-
tion.

TniDilt.

1834 . .

52.1

1.5

1.0

1847 . .

100.0

3.0

1.5

1836 . .

5!).0

i.y

1.0

1K»8 . .

85.6

1.6

1.1

1880 . .

(J.VO

i.y

1.9

1H49 . .

88.0

1.5

1.9

1837 . .

(13,7

1.6

2.2

1850 . .

86.2

1.1

1.0

1838 . .

72.4

1.0

1861 . .

87.0

1.1

1.5

1839 . .

73.1)

1.9

2.6

1852 . .

01.1

1.1

1.6

1840 . .

7(1.0

1.9

2.0

1853 . .

82.6

1.1

1.9

1841 . .

80.2

1.6

2.2

1854 , .

86.2

0.7

1.6

1842 . .

86.5

1.6

2.2

1855 . .

97.5

0.7

2.2

1843 . .

02.6

1.6

2.2

1856 . .

98.0

0.7

1.5

1844 . .

06.0

1.9

2.0

1857 . .

09.0

0.7

1.5

1845 . .

101.0

1.6

1868 . .

100.1

0.7

1.5

1846 . .

90.6

1.9

1.1

1859 . .

88.1

0.7

1.5

Les faiblcs oscillations du produit des douanes dopuis 1844
constituent lo trait saillant do co tableau. Toutefois, cet dtat
h pen pros stationnairc des recettes ne saurait etre \ntci'\n'6t6,
en presence des documents qui precedent, comme le signc
d'un mouvement d'affaires peu progrcssif. 11 ne faut pas
pcrdro de vuc, d'aillcurs, quo Ics plus grand nombre des ma-
tieres premieres ont 6t6, en 1851 ot depuis, ou completemcnt
affranchies ou considdrablement ddgrevds. Les droits do
transit ont dgalcment 6t6 I'objct d'importantes reductions
jusqu'au moment do leur suppression en 1861. . . .

En 1858 et 1859, les recettes h I'importation (seulement),
ramendes k 100,000, se sont rdparties ainsi qu'il suit cntrc les
Etats qui precedent (Francfort-sur-le-Mein non compris) ; —

Li: ZOLLVEREIN.

208

I'ruaso

liavii'ru ....
ilanuvro ....

811x0

Wurteiiiber(< . . .

Uaile

TlmriiiKo ....
lli>88u ((irand-diiclic)
Ht'Hso (ftli'clorale) .
OMi-nbuurg , . .

Nassau

Bruiiawiuk . . .
Luxeinbuurg . . .

Totaux . . .

IMflM.

60,020

64,021

13,188

13,022

10.002

10,321

6,104

6,980

4,843

4,701)

3,808

4,759

2,075

2,941

2,400

2,431

2,068

1,972

1,208

1,310

1,242

1,228

713

704

64U

642

100,000

1M30.

100,000

Voici quelle a dtd la repartition de la recctto nctto cntro
les divers Etats, de 1857 k 1851) (valours eu millions de
franca) : —

1867.

1868.

1869.

I'nur
100.

I'russe . . .
Haviuro . .

• •

45,330,221

11,036,200

9,150,003

5,282,801

4,273,155

3,359,430

2,057.085

2,147,583

1,815,843

1,154,000

1,0!»0,125

717,188

033,020

481,833

40,408,492

12,(i8!),373

0,704,025

5,702,(555

4,007,72(5

3,070,278

2,898,435

2,370,881

1,983,858

1,223,058

1,107,142

781,402

001,882

620,095

30,770,540

10,055,831

7,909,578

4,(577,101

8,079,.308

2,902,875

2,300,415

1,877,872

1,522,751

1,011,708

948,247

007,983

618,051

418,218

50.77
12.84

Ilaiiovre .

10.18

Saxe

5.97

Wurtcmberg .
Bado . . .

4.70
3 71

f^tats de Tiiurin
llesse ((/raiul-di
Ilosse (Electoral
Oldenbourg .
Nassau .

^0 . .
iclld) .
e). .

2.94
2.40
1.04
1.29
1.21

Fraticfort-sur-le-
Brunswick ,
Luxeinbuurg .

Mein

0.85
0.70
0.60

Totaux ....

89,744,309

97,938,002

78,366,634

100.00

La colonne des rapports ccnt(5simaux dcs deux tableaux
qui pr(3cedent, appclle tout particulierement I'attcntion en
indiijuant les Etats qui gagnent ou perdent ^ I'association.
Ainsl, par exemple, la Prusse, qui encaisse 58.82 p, 100 des
rccettes totales, no figure que pour 50.77 dans la repartition,

"^11

' "II

■ ' '1;

MMMMMMMIm.'

■

4 ■'*■

204

ECONOMIC HISTORY.

tandis que, pour la Baviere, ces rapports sont respectivement
de 5.15 k la rccetto et de 12.84 h la repartition. En rdsumd,
les Etats gagnants sont Ics suivants : Uaviere, Hanovre, WUr-
tcmbcrg, Ics deux Ilcsses, la Thuringe, Oldenbourg, ct Nassau.
La Prussc, lo Luxembourg, la Saxe, Bade, Brunswick, et
Francfort-sur-le-Mciu composent la serie des perdants. Les
parts du ZoUverciu sont ceux de la Prusse, du ducli^ d'Oldcn-
bourg ct du Hanovre. Les documents qui suivent indiqucnt
le mouvement de la navigation de ces ports de 1856 ^ 1859
(grand et petit cabotage noii compris).

PORTS PRUSSIENS.

'■f

(!;'•

ItATIHENTS.

TONNEAOX.'

BAtiments

sua LEST.2

TONNEAOX.

AKN&E8.

Entr^.

9,116

8,i)22
8 533
7,682

Scrtis.

Eutr^9.

Sortis.

Entr^.

Sortis.

Entrcs.

Sortis.

1869 .. .

i>m . . .

1867 ...
1866 ...

9,197
9,032
8,441
7,684

1,471,522
1,401,560
l,f)S4.622
1,337,746

1,414.602
1,469,582
1,664,384
1,374,416

2,668
2,.599
3,052
1,994

1,743
1,939
1,229
2,111

4,'i2,846
433,78s
561,130
381,860

319,458
401,614
2.54,432
380,310

Dans le ducli(5 d'OIdenbourg, la navigation a 6t6 en 1859 :
a I'entrde, de 933 navircs charge's, jaugcant 78,484 lasts et
do 11 sur lest, jaugeant 879 lasts ; h la sortie, de 311 navires
chargds, jaugcant 88,295 lasts et de 502 sur lest avec 37,821

PORTS IIANOVRIENS.

Navires CaARofes.

Navires sdr lest.

Nombre,

Lasts.

Nombre.

Lasts.

^^•"^ • ■ i Sortie
^^•"^ • i Sortie . .

1,141
1,092

3,016
1,194

30,850
29,270

112,931
36,459

782
899

592
2,470

21,004
32,964

21,858
100,281

Les avantagcs purcment mat<;ricls du Zollverein pour les
^tats intdressijcs peuvent se rdsumer ainsi qu'il suit : 1° re-

• Le tonneau de mer pru8sien = OOS'.SO.
' Coraprls dans les totaux precedents.

Ml:

til!

LE ZOLLVEREIN.

205

duction des frais de perception et d'administration, par suite
de la suppression des rayons de douanes cutre Ics Etats asso-
ci^s ; 2° rapidc developpement industriel, par suite de rap-
plication d'un tarif moderd ; 3° elevation du cliiffre primitif
des rccettcs de douane, par suite de raccroissemcut de con-
somraation resultant de I'application do ce tarif; 4° conclu-
sion de traitos de commerce avantagcux avec Tetrangcr, plus
dispose a faire des concessions a un Etat qui lui oi'fre un de-
bouche consid(5rable qu'i\ des pays sans importance ; 5° usage
gratuit on ?i des conditions tres moderdcs des grandcs voies
de communication, terrestres, fluvialcs, ou maritimcs, qui n'ex-
istaient auparavant qu'au profit d'un ou de quelqucs-uns d'entre
eux ; G° rapide essor de certaincs industries indigenes, aux-
quellcs la libre ouverture d'un marchd int<;rieur de 33 mil-
lions d'habitants,^ ainsi que I'usage en franchise de matieres
premieres fournies par I'un ou I'autre des Etats associds et
autrefois frappdes de droits de douane, permcttent de pro-
duirc plus dconomiqueraent ; 7° creation d'une forte marine
marchaudc.

L'institution du Zollverein a eu des avantages correspond-
ants pour le commerce dtranger. xVu lieu d'avoir a traverser
40 lignes douaniercs, ddfenducs par des droits plus ou moins
compliquds, plus ou moins dlcvds, et appliques par des ad-
ministrations plus ou moins tracassieres, il s'cst trouvd en
face d'un pays unique, recevant ses produits a des conditions
rclativcmout moddrdcs. Au lieu d'avoir &, traitor avec des
consommatcurs pcu aisds, rcstreignant Icnrs ddpcnscs au plus
strict ndccssaire, il a profitd du developpement do la riclicsse
publique dans le Zollverein dcveuu, apres quelqucs aundcs,
un grand pays, non-sculement par le tcrritoire et la popula-
tion, mais encore par le bicn-etre croissant do sa population.

Le Zollverein n'cst cepcndant pas, dans son organisation
et ses rdsultats actucls, la fornuilc la plus complete, la jjIus
heUiCuse du principe de I'association commcrciale. Le mode
compliqud de ses adlibdrations ;2 la dillicultd, pour ses raembres,

Id 4

n
n

♦r

-1

1 D'aprc's le do'nombromont do 1861 clont les rc'sultats ofBciels nous arrivcnt
en ce moment, de 34,705,694 habitants.

''' On salt que toutes les deliberations du Zollverein, pour utre valablcs.

H' ' !

^H >

I B ^=!i

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206

ECONOMIC HISTORY.

d'arriver, sur les questions lea plus graves, k une solution favo-
rable aux int<5rets souvent tres oppos<is qu'ils reprdsentent ;
les influences politiques qui s'agitcnt dans son sein et I'em-
pechent de discerner toujours clairement la voie h suivre
pour tirer de I'union les r<isultats dconoiniques les plus con-
sid(5 rabies, telles sont les justes critiques dont il a souvent
6t6 I'objet. On pout encore lui reprochcr do maintenir,
malgrd I'exemple de I'Angleterre et de la France, des droits
qui, pour certains produits fabriquds, depasscnt tres-sensible-
mcnt, par le fait de la diminution considerable, depuis la
formation du ZoUvcrein, du prix des produits grev^is, cette
moyenne de 10 p. 100 de la valeur, destinde, d'apres lo pro-
gramme de I'association a son ddbut, a devenir la base de son
tarif. Cette protection exagerde est une double faute, d'abord
parce que les consommateurs de I'association, moins aises que
ceux des deux pays que nous vcnons de citer, sont moins en
dtat de payer des prix dlevds ; puis, parce que Ic Zollverein,
par les perfectionnemcnts introduits dans ses procddds de
fabrication et le bas prix de la main-d'oeuvre, est aujourd'hui
tout a fait en mcsure de lutter cfficacement centre la con-
currence dtrangere. 1862.

doivent Ctre prises h. runnnimite. Ainsi, dans ces deliberations, la Priisse
ne pcse pas d'un plus grand poids que Francfort-sur-le-Mein avec ses 80,000
habitants! ...

t (5

•ft

THE CORN LAWS.

207

IX.

THE CORN LAWS, 1801-1849.

From Levi's History of British Commerce,^ 2d Ed.

PART III. — CHAP. 7.

THE corn laws had long been a bone of contention in
England. Maintained for the interest of a class who
clung to them as their anchor of safety, they had always been
attacked as an obstacle to the well-being of the middle and
lower classes. In the opinion of their advocates, protection
was necessary in order to keep certain poor lands in cultiva-
tion, and to encourage the cultivation of as much land as
possible in order to provide for the wants of the country.
Let the cultivation of such lands cease, they said, and we
shall be dependent on foreigners for a large portion of the
people's food. Such dependence, moreover, may bo fraught
with immense danger, inasmuch as, in the event of war, the
supplies may be stopped or our ports may be blockaded, the
result of which may be famine, disease, or civil war. Ac-
cording to the defenders of protection it was the advantage
gained by the corn laws that enabled landed proprietors and
their tenants to encourage mnnufacturos and trade. Abolish
the corn laws and half the country sho])kecpers will be
ruined, mills and factories will be stop|)0(l, large numbers of
the working-classes will be thrown out of work, disturbances
will ensue, capital will be withdrawn, and no one dare ven-
ture to say what may be the fatal consequences.

In 1801 the price of wheat reached the high limit of 155s.
a quarter, and we may well imagine what sufferings that
price entailed among the people, at a time especially when

1 London: John Murray, 1880.

>-,i|!

tMki

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208

ECONOMIC HISTORY.

trade and manufacture were so much paralyzed by the Con-
tinental war. Happily, for two or throe years afterwards, a
succession of good harvests changed the condition of things,
and in March, 1804, the price of wheat fell to 49s. M. per
imperial quarter. But what was anxiously desired by the
people was regarded a great disaster by the agricultural in-
terest. They comjjlained that with the high cost of produc-
tion, in consequence of high wages, high rate of interest,
and the heavy cost of implements of husbandry, they could
not afford to sell at such prices. Meetings were held
throughout the country to consider the case of the farmers.
Mr. Westci-n brought the state of agriculture before the
House of Commons, and a committee was apj)ointed on the
subject. The farmers contended that at a time when all
foreign supplies were shut out from our markets, and when
we were more than ever depending on home production, it
was the bounden duty of the legislature to pass laws which
would encourage the production of grain at homo, so that
the nation might be as much as possible independent as re-
gards the first necessaries of life. Unfortunately all the
measures hitherto taken for the protection of the farmers
resulted only in the aggravation of the sufferings of the
peoi)]e. It was easy by means of prohibitions and bounties
to raise the price of corn and to give an artificial stiuuilus to
agricultural prosperity, but the people were not able to buy
bread at famine prices, especially at a time when tuxes were
so heavy. The report of the committee of the House of
Commons, presented the same session in 1804, was to the
effect that the price of corn from 1791 to the harvest of 1803
had been very irregular, but that upon an avenige it had in-
creased in a great degree in consequence of the years of
scarcity, and had in general yielded a fair profit to the
grower. Tt appeared to the committee, moreover, that high
prices had the effect of stimulating agricultural industry in
bringing into cultivation large tracts of waste lands, and
that this fact combined with the abundance of the two last
productive seasons, and other causes, occasioned such a de-
pression in the value of grain as would tend to the discour-

THE CORN LAWS.

209

ngement of agriculture, unless maintained by the support of
Parliament. Nor was there much difficulty in persuading
the legislature to give liccd to such recommendations. Very
soon after the 'presentation of the report a corn law was
passed,^ which imposed a duty of 2-4s. M. per quarter on
wheat so long as the price of the home market should be
under GSs. ; of 2s. Qd. so long as the price should be at or
above that rate, and under 66s. ; and of 6t?. a quarter when
the price should be above that rate. It does not appear,
however, that the fear entertained by the farmers and the
agricultural interest had been very substantial, for in the
same year the harvest was deficient in quantity and inferior
in quality, and all apprehensions that bread might become
too cheap were entirely out of the question. A proposal, in-
deed, was made to encourage the growth of corn in Great
Britain, and yet to diminish the price thereof for the benefit
of the people by exempting farmers from all direct taxes.
But such a plan would have only transferred the burden from
one class to another. The time had not yet arrived for
acting on the "laissez-faire" principle. Artificial aid
was sought for on all sides, and that always ended in
disappointment.

At the conclusion of the French war, in 1815, precisely the
same state of matters arose as in 1804. By the opening of
the ports, wheat which hitherto averaged £5 10s. a quarter
suddenly fell to £3 5s., and immediately the farmers raised
a cry of distress. Again a co.nmittce of the House of Com-
mons was appointed to inquire into the state of the law
affecting the corn trade, and once more the legislature was
engaged in framing a corn law,- which resulted in an act
prohibiting the importation of wheat when the price was
under 80s., and rendering it free when above 80s. Yet
serious misgivings existed as to the ultimate effect of the
restrictive legislation respecting corn in the minds of raanj-,
and in the very House of Lords, Avhich traditionally stood
in bold defence of a protective policy, protests were lodged,

1 44 Geo. III. c. 109.

a 55 Geo. III. c. 26.

x-%i

, I

'1 (-

Mr I H

ft:!'

210

ECONOMIC HISTORY.

which indicated the existence of a more enlightened opinion
on the real bearings of the whole question. Lord Grenville
and his compeers protested against this new corn law, be-
cause they were adverse in principle to all new restraints in
commerce, deeming it most advantageous to public prosper-
ity to leave uncontrolled the free current of national indus-
try. In their opinion "the great practical rule of leaving
all commerce unfettered applied more peculiarly, and on
still stronger grounds of justice as well as of policy, to the
corn trade than to any other. Irresistible, indeed, must be
that necessity which could, in their judgment, authorize the
legislature to tamper with the sustennnce of the people, and
to impede the free purchase and sale of that article on
which depends the existence of so large a portion of the
community. They thought that expectations of ultimate
benefit from any corn law were founded on a delusive theory.
They could not persuade themselves that such a law would
ever contribute to produce plenty, cheapness, or steadiness
of price. So long as it operated at all, its effects must be
the opposite of these. Monopoly is the parent of scarcity,
dearness, and uncertainty. To cut off any of the sources of
supply can only tend to lessen its abundance. To close
against ourselves the cheapest market for any commodity
must enhance the price at which we purchase it. A.nd to
confine the consumer of corn to the produce of his own coun-
try is to refuse ourselves the benefit of that provision which
Providence itself has made for equalizing to man the varia-
tions of climate and of seasons. But whatever might be the
future consequences of that law at some distant and uncer-
tain period, they were convinced that these hopes must be pui--
chased at the expense of a great and present evil. To compel
the consumer to purchase corn dearer at home than it might
be imported from abroad was the immediate ])ractical effect
of the law just passed. In this way alone could it operate.
Its present protection, its promised extension of agriculture
must result (if at all) from the profits which it created by
keeping up the price of corn to an artifical level. These fut-
ure benefits were the consequences expected, though they con-

-■■■

fe,,".

iHllni

■V

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(.'

( V

THE CORN LAWS.

211

fidently believed erroneously expected, from giving a bounty
to the grower of corn by a tax levied on its consumers."
Such were the reasons urged against the corn law of 1815,
and certainly they do honor to those who recorded them in
the journal of the House. But many a year was to pass ere
the protests of the few did become the deliberate conviction
of the entire community.

For twelve years nothing further occurred on the subject
of the corn laws except the emission of repeated cries of
distress by the agricultural classes, especially in the House
of Lords. The country was indeed learning by bitter ex-
perience how direct is the relation between dear bread and
bad trade, and t^o time arrived when the working of the
corn law was to be laid before the legislature. " The corn
laws," said Mr. Wliitmore, "have inflicted the greatest in-
jury upon the general trade of the world that ever perhaps
was ))roduced by injudicious legislation. They have de-
ranged its course, stagnated its current, and caused it to
flow in new and far less beneficial channels than it formerly
occupied." To the corn laws he attributed the great and
ruinous fluctuation of prices, which is the inevitable result
of a system of restriction. " The more the basis from whence
your supplies are drawn is widened, the greater the steadi-
ness of prices ; the more it is narrowed the more constant and
the more fatal is their effect on the fluctuations to which you
are subject. In the early times, when there was a difliculty
iu the conveyance of bulky commodities from one part of the
country to another, arising from want of roads, when there
existed a prejudice as well as a legal penalty against what was
called forestalling and regrating, the fluctuations in prices
were immense. And the same holds good as regards other
times and other countries." Lord Lauderdale himself, while
entertaining considerable fear of foreign competition, clearly
showed what are the solid and what arc the fictitious ways
to agricultural prosperity. "I will take upon myself," he
said, " to assert that if there is any one proposition in politi-
cal economy which may be affirmed, it is this, that the
interests of landlords properly understood are absolutely

\ '\%

212

ECONOMIC HISTORY.

identified with the general interests of the country. Land-
lords have no interest in high prices; high prices raise rents
nominally and in appearance; and now and then some tem-
porary advantage may bo obtained from them, for which
landlords will always ))ay afterwards with more than com-
l)oiind interest; but rents can only be raised largely, perma-
nently, and beneficially to landlords by one of two causes,
both of which arc equally conducive to the prosperity of all
other classes; first, by improvements in agriculture, which
leave a larger suri)liis produce after the expenses of cultiva-
tion arc defrayed ; and secondly, by improved and extended
markets. Now all improvements of agrlcultui-c which in-
crease the surplus i)roduce of the country are obviously a
direct addition to the public wealth. And how are markets
im])roved and extended ? By new communication, — roads,
railways, canals, — but principally by the continual rise
and increase of large towns within our own empii'o, rendered
rich and prosperous by thriving manufactures, and l)y all the
improvements in skill and machinery connected with such
establishments. The best job for the landlord is the ))ros-
perity of trade in all its branches, as the best job for trade
is a prosperous state of agriculture. There is nothing to
make the inhabitant of the town and the cultivator of the
soil jealous of each other; quite the contrary, for the more
each pi-oduces, the more he will have to exchange for the
other; and this is the foundation of the great internal trade
which is worth one hundred times more than all the foreign
commerce of the country put together."

Yet notwithstanding the enunciation of these truths the
farmers clung tenaciously to protection; and it was not
without a great struggle that they allowed the corn laws to
be relaxed to a small extent. In the session of 1827 resolu-
tions were passed in the House of Commons to the effect
that corn should be allowed to be imported free of duty, in
order to be warehoused, and that it should be admissible for
home consumption at a shilling jicr quarter duty when the
price of wheat should be 70.s., and at two shillings more for
every shilling that the price fell below 70s. per quarter.

THE CORN LAWS.

213

Tlicsc resolutions, however, made no progress in conse-
quence of the change of government. The following session
the House of Couunons passed other resolutions to the effect
of imposing a sliding scale from 23«. per (piarter when the
price of wheat should be 04s., and IGs. 8t^. when the price
should be G9s., to one shilling per quarter when the price
should be at and above TSs. per quarter. And upon these
bases a new corn law was passed,^ which, like its predeces-
sors, did not long remain in force.

It was ten j'ears after the passing of this first sliding
scale, or on March 15, 1838, that Mr. Villiers, seconded by
Sir William Molesworth, first commenced his attack on the
polic}' of the corn laws in the House of Connnons, though
with little effect. In those days political economists were
simply allowed to speak and complain. Their opinions
were received as mere speculative theories, their recom-
mendations were deemed as far beyond the reach of practical
statesmanship. There was only one minister present when
Mr. Villiers' motion was made, and as might have been ex-
pected, it was lost by an oA'erwhelming majority. But about
that time a lecture was advertised to be delivered at Bolton,
the birthplace of Arkwright and Crompton, on the corn
laws, by a person quite a stranger to the town. It was a
new subject for a lecture, and as the public mind was di-
rected to the question, the lecture drew a fair number of
hearers. Thd lecturer, however, found only when it was too
late that it was not easy to deal with economic questions
before a mixed audience, and he completely broke down.
The audience, not prepared for the disappointment, became
impatient and vociferous, and, a riot was impending, when a
youth, a medical student, rushed to the platform, and on the
spur of the moment addressed the people on the subject in a
vigorous and manly manner. The people were delighted at
this turn, and Mr. Paulton won for himself enthusiastic
admiration. On the news of such an event travelling to the
neighboring towns, the volunteer lecturer was overwhelmed

1 9 Geo. IV. c. 38.

■'111

^'3

wf^immm

¥ ilil

214

ECONOMIC HISTORY.

with invitations to redeliver liis address, and everywhere ho
captivated the audience with his elociuent attacks on monop-
oly and monopolists.

As the interest in the (picstion of the corn laws grew and
extended, it became evident that a special and more ])opular
agency was wanted for the purpose, and thus in October of
1838 eight * men first united themselves with a view to estab-
lish an Anti-Corn Law Association. The list of the provi-
sicmal committee was afterwards increased to thirty-seven,
conspicuous among them being John Bright, George Wilson,
and Richard Cobden. And the object of the association was
declared to bo to form a fund in order to diffuse information
by lectures or pamj)hlet8 on the bearing of the corn laws, to
defray the ex))ense of petitioning, and above all to create an
organization to l)ring numbers to<.i ther in such force and
with such energy of purpose as to secure the great object,
namely, the complete freedom of trade and the destruction
not only of the corn monopoly, but of all the other monopolies
bolstered up by this monster grievance. Small was the sup-
port at first obtained by this new association. Very few then
appreciated its great moral imi)ortanco. "For the first two
or three years of our agitation," said Mr. Cobden, "it was a
very hopeless matter, and there was no ^clat nor a))plause.
. . . We sat in a small room, and we had a dingy red curtain
drawn across the room that we might not be chilled by the
paucity of our numbers. Two or three were all that were
here (Newall's Buildings) on one occasion, and I recollect
saying to my friend Prentice, 'What a lucky thing it is
the monopolists cannot draw aside that curtain and see how
many of us there are, for if they could they would not be
much frightened. ' " It was not long, however, ere the
small association began to manifest its power and influence,
and when, aided by the powerful support of some at least of
the leading journals, its voice resounded through the length

> The original founders of the Leaguo were John Benjamin Smith, Archi-
bald Prentice, Richard Cobden, Thomas Bazley, William Rawson, W. U. Cal-
lender, Henry and Edmund Ashworth. (See " Cobden and the League," by
Henry Ashworth, Esq.)

THE CORN LAWS.

216

and breadth of the land. Meetings and conferences then suc-
ceeded each other. From the mauufacturinpf districts tho
movement spread to tho metropolia, and with a clearly defined
purpose in view, and with tho highest economic authorities
to ajjpcal to- in support of their principles, tho Anti-Corn Law
agitators made everywhere a profound and lasting imjjression.
On March 12, 1839, Mr Villiers again brought the subject
of the corn laws before the House of Connnons, now, how-
ever, backed by a strong party both inside and outside tho
House. His motion was, "That this House resolve itself
into a committee of the whole House, to take into considera-
tion the act 9 George IV., regulating the importation of for-
eign grain." Mr. Villiers showed that the corn laws were
not benclicial to tho agricultural interest, and that neither
the agricultural laborer nor the farmer reaped from them
any benefit. He asserted that the community at large suf-
fered a loss through the corn laws, equal to a poll tax of 8«.
a head, or a tax of £2 on each family in the kingdom, and
he demonstrated that commerce and shipping were greatly
injured by them. Mr. Villiers' motion was seconded by Sir
George Strickland, and on his side spoke Mr. Poulett
Thomson, Sir William Molosworth, Mr. Groto, Mr. Clay,
Lord Howick, Sir Henry Parnell, Mr. Ward, Lord John
Russell, Mr. Hume, Mr. Fieldon, and Mr. O'Connell ; while
against him were Sir James Graham, Sir Robert Peel, and
a host of Conservatives. The discussion was animated and
well sustained, and after five whole nights' debate the votes
wore taken and the motion was lost by 195 to 342. In the
House of Lords too a discussion was commenced on tho sub-
ject. On March 14 the Earl of Fitzwilliam moved, "That
the act 9 George IV. c. 60, entitled ' An Act to amend the
law relating to the importation of corn, ' has failed to secure
that steadiness in the price of grain which is essential to
the best interests of the country ; " but the motion was lost
by 24 against 224. A day after Lord Brougham moved,
"That this House do immediately resolve itself into a com-
mittee of the whole House, to take into consideration the
importation of foreign corn. " But the motion met a similar

'in

216

ECONOMIC HISTORY.

i'atc, only 7 having voted for it, and 01 against it. Slow is
the progress of any nioasuro in the Iloimo of Commons whon
any substantial reform is contcMnplutod, Imt slower still is
its tidvunce in tho House of Lords. Coming less in contact
with the mass of the jicople, comparatively strangers to their
feelings and wants, conservative by interest and liercditary
policy, tho peers of the realm are necessarily the last to ad-
mit the need of change, and the last to make concessions to
the altered exigencies of the times. Nevertheless, there have
never been wanting enlightened members in the Upper Ilonsc
who sought the maintenance and preservation of their order
from that same law of progress on which all the institutions
of the realm depend, and who, far from regarding their in-
terests as antagonistic to those of other classes of society, had
the wisdtmi to discern that wo are all suijject to the same
laws, influenced by the same circumstances, and alike bound
to obey those laws of nature which, more than any human con-
trivance, determine the progress and prosperity of States.

The result of Mr. Villiers' motion in the House of Com-
mons was not likely to discourage the Anti-Corn Law Asso-
ciation. On the contrary, it imparted to it a m)\v life and
a fresh impulse. Determined to persevere till the end, the
agitators saw in the strength of their opponents only an ad-
ditional cause for more energetic labors. A meeting was
accordingly organized in London, and the same voice which
first gave strength and vivacity to the Manchester gathering
was now heard exclaiming, *' Wo are the representatives of
three millions of people, — a far greater number of constitu-
ents than the House ever could boast of. We well know that
no great principle was ever indebted to Parliament for success ;
the victory must be gained out of doors. The great towns of
Britain have extended the right hand of fellowship to each
other, and their alliance will be a Hanseatic league against
the feudal corn-law plunderers." The Anti-Corn Law
League was never a political organization. For years its
members went on lecturing, distributing tracts, and acting
as a peripatetic university in instructing the people on the
evil of commercial monopoly. Never did they allow them-

THE CORN LAWS.

217

solves to bo tempted to other politinil topics. The Lcaj^iio
dill not even wish to interfere witli (he svHtem of taxation
further tlian extinguisliinif at once mid forever tlio principle
of inaintiiininjL,' taxes for \\w henelit of a partieiilar elaas. "If
it bo asked," said Mr. Cobden, '"why it is that we, profess-
ing to bo free-traders in (sverything, should restrict the
title of oiu" association to that of the 'National Anti-Corn
Law League,' I will explain the riJason. Wi; advocate the
abolition of the corn law because we believe that to \n\ tlic
foster-parent of all other monopolies; and if wo destroy that,
— the j)arent, the monster monopoly, — it will save us the
trouble of destroying all the rest."

PART IV. — CHAP. 1.

The day arrived when the government of the country had
to bo conlided to the great Conservative i)arty in the House.
For some time past the administration of Lord Mellxturne
had shown unmistakable signs of inherent weakness, and its
opponents, counting among them such men as Sir Robert
Peel, Lord Stanley, Mr. Gladstone, and Mr. Disraeli, were
decidedly gaining strength and influence. The Conservative
party has been charged with thwarting and opposing the
liberal tendencies of the nation, and they certainly resisted
the passing of the Reform Bill, the repeal of the Test and
Corporation Acts, and the Emanci|)ation of Roman Catho-
lics. Yet a memorable Conservative administration is be-
fore us, which inaugurated an era of great [jrosperity, and
one which, under the presiding genius of Sir Robert Peel,
has ever since been held in grateful remembrance for the prac-
tical wisdom which it displayed, and the bold and vigorous
commercial and financial policy it carried into cfTect. Sir
Robert Peel had already gained for himself a high reputation
as a statesman.^ As a member of the Bullion Committee

llri

.H!

> Sir Robert Peel's first mlministration was a short one. IIo formed his
Cabinet on December 9, 1834, and forthwith dissolved Parliament. A new
Parliament was summoned to meet on February 19, 1835, but an amendment to
the address was carried in the House of Commons on February 20, by a ma-

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218

ECONOMIC HISTORY.

of 1810, as undcr-sccrctary for the colonies during the most
trying years of <hc Continental War, as Secretary for Ireland,
in all these ea[)acities he proved himself an able minister
and an economist of much practical wisdom ; and it was a
good omen for the country when, in Se{)tcmb(M', 1841, at a
time of nuich financial anxiety, Sir Robert Peel was once
more called to take the helm of the State.

There was something novel and encouraging in the speech
from the throne which opened the labors of the new admin-
istration. "Her Majesty is anxious that this ol)ject, namely,
the increase of the public revenue, should be effected in the
manner least burd' usomc to her people; and it has appeared
to Iler Majesty, after full deliberation, that you may, at this
juncture, j)roperly direct your attention to the revision of
dutii's affecting the (aoductions of foreign countries. It will
be for you to consider whether some of (he duties are not so
crifiing in amount as to be unproductive to the revenue, while
they are vexatious to commerce. You may further examine
whether the principle of prohibition in which others of these
duties are founded, be not carried to an extent injurious alike
to the income of the State and the interest of the people. Iler
Majesty is desirous that you should consider the laws which
regulate the trade in corn. It will be for you to determine
whether those laws do not aggravate the natural fluctuation
of su[)ply, whether they do not embarrass trade, derange cur-
rency, and by their oi)eration diminish the comfort and in-
crease the privations of the great body of the community."
Surely this was a programme more liberal than could have
l)een exjiected from a C(mservative ministry; but the temper
of the people and the exigencies of the time demanded that
and a great deal more. (Jloom and discontent prevailed ex-
tensively throughout the manufacturing districts. The Anti-
Corn-Law League had by this time become formidal)le. The
demand was loud and imperious for cheap food, and the total
repeal of the corn laws. And on the day fixed for the an-

jority of 300 to 802. Otlier adverse divisions immediately thereafter took
place, and Sir Hubert Peel announced his resignation of the ministry on
April 8.

THE CORN LAWS.

219

noiiiicemont of the ministerial measure some five hundred
deputii's from the Anti-Corn-Law Associations in the me-
tropolis and provinces went in procession to the House of
ConiniDus, but were refused admittance. Yet with all this
the guvernnient was not disconcerted, and with imperturba-
ble gravity on February 9, 1842, ;?ir Robert Peel exposed
the policy of the cabinet on the corn laws.

At first Sir Roliert Peel did not attach much weight to the
influence of these laws. In his speech in the House he said
that to his mind the (question was not so much what was the
price of food as what was the command which the laboring
classes of the population had of all that constituted the en-
joyments of life. His belief and the belief of his colleagues
was that it was important fi^" he country to take care that
the main source of the supply of corn should be derived from
domestic agriculture. And ho contended that a certain
amount of protection was absolutely required for that indus-
try. But he made a most important avowal, one which no
Protectionist ministry had ever made, that protection should
not be retained for the special bcnelit of any particular class,
but only for the advantage of the nation at large, and in so
far only as was consistent with the general welfare of all
classes of society. Sir Robert Pool then entered on the ex-
tent of such protection, and having taken 54.s'. to o8.s. per
quarter as the price at which corn should range for a fair
remuneration to the agriculturist, he asked. Shall the corn
laws be based on a sliding scale, or on a fixed duty ? Much
might be said for the one and for the other. A sliding scale
was introduced in France iu 1819, one had boon adopted
in Belgium, the Xotherlands, and other countries, and it
seemed to have the advantage of adapting itself to every
circumstance. But experience did not confirm the hopes
entertained of its working. It did not hinder prices rising
higher than was desiral)lo in years of scarcity; and it had the
same j)reiudicial effect as every corn law of (pausing the cul-
tivation of land to be regulated, not by its inherent capacity,
but by the amount of forced stimulus given to it by the
Legislature. Besides these radical defects the objections

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ECONOMIC HISTORY.

urged against the sliding scale were, that the reduction of
duty was so rapid as to hold out temptation to fraud ; that
it operated as an inducement to retain corn, or combine for
the purpose of influencing the averages ; that the rapid de-
cline of the duty was injurious to the consumer, the pro-
ducer, the revenue, and the commerce of the country ; that
it was injurious to the consumer because when corn was at a
high price, say between ijiju. and 70s. and just when it would
be for the public advantage that corn should be liberated for
the purpose of consumi)tion, the joint operation ^.f increased
price and diminished duty induced the holders to keep it
back in the hope of realizing the price of uj)wards of 70s.
and so paying only Is. duty; that it operated injuriously to
the agricultural interest, because it held out a temptation to
keep back corn until it could be suddenly entered for con-
sumption at the lowest amount of duty, when agriculture
lost the protection which the law intended it should possess ;
that it was injurious to the revenue because instead of corn
being entered for home consumption when it arrived, it was
retained until it could be introduced at Is. the revenue los-
ing the dift'erence between Is. and the amount of duty which
would otherwise have been levied; that it was injurious to
connnerce because when corn was grown at a distance, in
America, for instance, the grower was subject to the disad-
vantage that before his cargo arrived in this country the
sudden entries of wheat at Is. duty from countries nearer
England might have so diminished the price and increased
the duty as to cause his speculation to prove not only a fail-
ure but ruinous. These were formidable objections to any
sliding scale, but between a gradual and a fixed rate of duty
there was not a material difference. On the other hand, a
fixed duty of 8s. per quarter was too low as a protection in
time of abundance, and was in effect a prohibitory duty in
time of scarcity. Nor was it possible to maintain more than
a nominal duty when prices began to rise. It was indeed
difficult to strike the balance of advantage and inconvenience
between the sliding scale and the fixed duty. So, on the
whole, Sir Robert Peel favored the principle of the sliding

THE CORN LAWi.

221

scale, that is, of making the duty upc n corn vary inversely
with the price in the home market, ta'ang the average of the
market prices from returns colleocod by excise officers.
Having, therefore, decided on changing 208. duty when the
average price of wiict was ^'^o. and Sis. ])er quarter, ho
proposed to make that duty fall by a reduction of Is. a
quarter as the average price rose Is., with some slight modi-
fications, so that the duty should be only Is. per quarter
when the price of wheat rose to 73s. a quarter and upwards,
and a bill so framed he presented to the House of Commons.
The House was not prepared at the time for a very liberal
measure. Lord John Russell made a motion in favor of a
fixed duty, but it was not popular; and notwithstanding a
few expressions of dissatisfaction, the Government proposal
was well received. Lord John Russell's amendment was
lost by 226 to 349, and Sir Robert Peel's bill passed into
law. 1 But the country was not satisfied. ]\Ieetings con-
tinued to bo held in the manufacturing districts, and Mr.
Villiers, stimulated by the representations and efforts of the
Anti-Corn-Law League, again brought forward his motion
for the total repeal of the corn laws, which was again lost
by the enormous majority of 90 to 393. The battle of the
corn laws had \)\ this time become violent both in and out of
Parliament, and ^Ir. Villiers was not likely to be dispirited
by the result of this divisicm.

It is not, however, by the vain attempt to render a corn
law acce))tablo tliat the commercial administration of Sir
Robert Peel will l)e rememl»ered. That was at best a tem-
porary and transitory measure. It is when we consider his
financial policy as a whole, and more especially ilie plan
which he devised for improving the state of the finances
and imparting new life to commerce and industry, that wo
recognize the breadth of view, the sound wisdom, and [)racti-
cal knowledge which Sir Robert Peel jiossessed. For years
past the finances of the country had fallen into complete dis-
order. An annual deficiencv of one or two millions had

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222

ECONOMIC HISTORY.

become a chronic evil, and no means of escape presented
itself.' With a disaffected people and frequent riots in the
manufacturing districts, with a paralyzed trade and wages
reduced to a very low scale, any idea of imposing new taxes
or making those existing heavier was out of the question.
A temporary and casual deliciency might have been met by
an issue of exchequer bills ; but what would have been the
use of resorting to such expedient when there was no
ground whatever for expecting any immediate improvement?
On the other hand, to have recourse to loans in times of
peace in order to balance the revenue and exfienditure was
equally inadmissible. Sir Robert Peel knew that a timely
and moderate reduction of taxes is favorable rather than
injurious to the revenue. He knew that though for the
moment such a reduction might show a loss, nevertheless,
by the stimulus it affords to increasing consumption, the
revenue would soon recover itself, and probably exceed the
amount previously produced. Yet, unfortunately, the few
precedents he had for such an operation, attempted in times
not very prosperous, were not encouraging. In 182") the
revenue from wine amounted to £2,153,000. The duty was
then reduced from Os. lid. to 4s. 2; (7. i)er gallon; and what
was the result ? The year after tht; revenue was ,£1,400,000;
it afterwards increased to £1,700,000, but it fell again to
£1,400,000. The duty on tobacco had been reduced from
4s. to 3.S'. per pound. B(;fore the reduction the revenue was
£3,878,000, immediately after it fell to £2,000,000: and
though it rose somewhat from that point, it did not reach
the ])reviou3 amount. Of course the consumption of articles
of luxury, such as wine i'ud t<jbacco, is not so affected by a
reduction of duty as that of tea, sugar, and other necessaries
of life. ^Moreover, the resources of the country were at that
time comparatively undeveloped, to admit of any large in-
crease of consumption. Still, such experience did not war-
rant the exjuM'tation that a reduction of taxes would have
the effect of tilling the exchequer.

' The (Icficionry in the yoar riKh'd April 6, 1811, was .£1,157,601; in the
year ended April f), 1812, Xl 17,027 ; and 1813, £2,704,510.

THE CORN LAWS.

223

But the circumstances of trade required insto^t relief,
and the tariff needed a thorough reform and simplification.
Two years before, in 1840, on the motion of Mr. Hume, a
committee of the House of Commons was appointed to in-
quire into the duties levied on imports, and to determine
how far they were imposed for purposes of revenue ; and in
their report the committee said: "The tariff of the United
Kingdom presents neither congruity nor unity of purpose ;
no general principles seem to have been applied. The tariff
often aims at incompatible ends; the duties are sometimes
meant to be both productive of revenue and for protection,
objects which are fi'cquently inconsistent with each other.
Hence they sometimes operate to the complete exclusion of
foreign produce, and in so far no revenue can of course be
received ; and sometimes when the duty is inordinately high
the amount of revenue is in consequence trifling. They do
not make the receipt of revenue the main consideration, but
allow that primary object of fiscal regulations to be thwarted
by the attempt to protect a great variety of particular inter-
ests at the expense of revenue, and of the commercial in-
tercourse with other countries. While the tariff has been
made subordinate to many small i)roducing interests at home
by the sacrifice of revenue in order to support their interest,
the same principle of interference is largely applied by the
various discriminating duties to the produce of our colonies,
by whicli exclusive advantages are given to the colonial in-
terests at the expense of the mother country." Such were
the general features of the tariff, the result of years of care-
less legislation on the subject. The fact was indeed too
evident that it was necessary to prune the over-burdened
tariff, and to liberate a large variety of articles from the
needless trammels of legislation.

But how to accomplish this without a handsome surplus
revenue ? Fortunately Sir Robert Peel, undeterred by the
state of the revenue, determined to do what was neces-
sary for trade. And he acted wisely. Untrammel indus-
try from the boiuls of legal restrictions, open the avenue
to wealth and prosperity, — that is the right policy. Pur-

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ECONOMIC HIS TOR V.

sue this course and there is no fear but the revenue will
set itself speedily right. Some slight reductions he made
in 1841, but on March 11, 1842, in his famous financial
statement, he ])roposed to reduce considerably all the
duties on the raw materials of manufacture, all duties
on goods partially or wholly manufactured, as well as
the duties on timber, and all export duties, together
producing ^£1, 500,000; and to make np this loss, and to
provide for the original deficit in the revenue, amount-
nig to .£2,570,000, by an income and projierty tax of
7a. in the pound, which he expected would produce
£3, 700, 000 ;i by the equalization of the stamp and spirit
duties, which would give .£400,000; and by a small tax on
the exportati(m of coals, which would give £200,000, — mak-
ingr in all £4,310,000. It was a very simple plan; yet
lucre \''is profound wisdom in Sir Robert Peel's Itudgct.
Th(t Vo :!.;• of the reductions proposed far exceeded the
amount of nlief in taxation they each and collectively
aff. ;(]od. The removal of the taxes on raw materials was a
grcut buoi\, inasii.at' as they had the effect of putting our
manufactures in n disadvantageous position in the markets
of the world, and restricting the field for the employment of
capital and labor. As was said in the discussion on the
budget, suppose 50,000 head of cattle were to be annually
imported in consequence of such remissions, such importa-
tion would produce but a small effect on the price of meat,
but it would create an import trade to the amount of half a
million of money, a trade which, in its nature, would tend
to produce an export trade in return of an c(|ual amoimt.
Our export trade is measured and limited by our import
trade. If an individual merchant cannot afford to send his
goods to other countries without obtaining any return,
neither can all merchants collectively, and the country as a
whole afford to export commodities to foreign countries, if

• The nmoimt of duty assessed, in 1843, was £5,608,348. The amount of
property assessed was: Schedule A, X9o,284,497 ; Schedule B, £46,709,915;
Schedule C, £27,009,793; Schedule D, £71,330,31i; Schedule E, £9,718,454.
Total, £261,013,003. [Additional note omitted.]

THE CORN LAWS.

225

ill some shape or other imports arc not received from those
countries in return. Reduce the duties on imports, and you
tliereby promote the export of our produce and manufactures.
Remove those taxes which burden our manufactures and you
j)romotc the importation of those articles which are neces-
sary to tlie comfort and welfare of the nation. The income
tax might be odious, "inquisitorial, intolerable," yet it was
at that time the only means by which the necessary reforms
in the tariff could be attempted. And the nation, having
balanced the evil and the good of the proposal, and having
found that the advantages preponderated, cheerfully accepted
the government proposal, and gave to the proposal its hearty
consent.

The commercial policy thus inaugurated by Sir Robert
Peel, being in perfect accord with sound economic princi-
ples, could not fail to be successful. From 1841 to 1843, as
wc have seen, there was a yearly deficit in the budget. In
the year ending April 5, 1844, Sir Robert Peel found him-
self in possession of a handsome surplus of .£2,(300,000,
which was exceeded in the following year, and continued at
a high point for four consecutive years.^ The exjjorts of
British produce, which in 1842 had fallen to ^47,000,000
increased to £52,000,000 in 1843; to £58,000,000 in 1844;
and .£60,000,000 in 1845. The ship])ing entered and cleared
increased from 0,000,000 tons in 1842 to 12,000,000 tons in
1845. In every way, financially and commercially, the re-
sults fully realized the anticipations formed, and Sir Robert
was encouraged to advance still further in the same direc-
tion. Nothing important was attempted in the budget of
1843, '-^ but in 1844 the duty on wool was abolished, the
duties on currants and coffee were reduced, and a great
change was made on the duties on marine insurance. And
then, as we have scon in the previous cha))ter, the differential
duties against foreign-grown sugar were relaxed by permit-
ling the importation of sugar, the growth of China, Java, or

1 The surplus in the year ended April 5, 1844, was £2,685,125; 1845,
£3,027,615; 1840, £1,647,324; and in 1847, £2,823,762.
* [Foot-note on " Taxes Reduced or Repealed," omitted.]

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ECONOMIC HISTORY.

Manilla, or of any other countries which Her Majesty in
council shall have declared to be admissible nt moderate
rates. In 1845 another still more important scries of re-
forms was introduced. The duty on cotton wool, which,
however slight and inappreciable on the coarser material,
pressed rather heavily on the liner muslin, was abolished.
The export duty on coals, which had been found vexatious
and injurious was removed. The timber duties were further
reduced. The duty on glass was removed from the tariff,
and also the duties on four hundred and thirty articles,
which produced little or no revenue, including fibrous mate-
rials such as silk, hemp, and flax, furniture, woods, cabinet-
makers' materials, animal and vegetable oil, ores and
minerals, etc. In 184G the liberal policy was further ex-
tended. Hitherto our manufacturers had been benefited
by the free access granted to the raw materials. It
was right to ask of them to relinqiiish some, at least, of
the protecting duties still in existence. And the duties
on linen, woollen, and cotton manufactures were reduced
from 20 to 10 per cent. The silk duties then at 30 per
cent were also reduced to 15 per cent. A reduction was
made on the duties on stained paper, on manufactures of
metals, earthenware, on carriages, and on manufactures
of leather ; and the duties on butter, cheese, and hops were
further reduced. ^

But was it right to effect all these reforms without asking
for reciprocity on the part of foreign countries ? For years
past it was known that Her Majesty's government had used
every effort to enter into treaties with several States, such
as Brazil, Portugal, SiKiin, and France, with a view to
the adoption of mutual concessions. In 1843 and 1844
Mr. Ricardo brought the subject before the House of Com-
mons, and moved for an address to Her Majesty, praying
that Her Majesty be pleased to give directions to her ser-
vants not to enter into any negotiations with foreign powers

1 In 1842 there were 1,090 articles and subdivisions of articles charged with
distinct rates of import duty in the customs tariff. In 1846 the number was
reduced to 424.

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THE CORN LAWS.

227

1 Hansard's Debates, Jan. 27, 184G.

which wouhl make any contemplated alterations of the tarilT
of the United Kingdom contingent on the alterations of the
tariff of other countries; and exjjressing to Iler Majesty the
opinion of the House, that the great object of relieving
the commercial intercourse between this country and foreign
nations from all injurious restrictions would be best promoteil
by regulating our own customs duties, as might bo most
suitable to the financial and commercial interests of this
country, without reference to the aniount of duties which
foreign powers might think it expedient for their own in-
terest to levy on British goods. But the government opposed
the motion, and Mr. Ricardo was defeated. Mr. Gladstone
especially defended the policy of endeavoring to obtain such
treaties. He did not wish, he said, "to be trammelled by
an abstract proposition, and unless Mr. Ricardo could show
that there were no possible circumstances in which a com-
mercial treaty could be aught other than evil, he had no
right to call upon the House to aflirm his resolution." The
government, however, now practically acted on the policy
advocated by Mr. Ricardo, and Sir Robert Peel avowed it
frankly.

"I have no guarantee," he said,' "to give you that other
countries will immediately follow our examj)le. I give you
that advantage in the argument. Wearied with our long
and unavailing efforts to enter into satisfactory commercial
treaties with other nations, wo have resolved at length to con-
sult otir interests, and not to punish other countries for the
wrong they do us in continuing their high duties upon the
importation of our products and manufaeturoa, by continu-
ing high duties ourselves, encouraging unlawful trade. We
have had no communication with any foreign government
npon the subject of these reductions. We cannot promise
that France will immediately make a corresponding reduction
in her tariff. I cannot promise that Russia will prove her
gratitude to us for our reduction of duty on her tallow by
any diminution of her duties. You may, therefore, say in

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ECONOMIC HISTORY.

opposition to the present plan, 'What is this 8U])crfhious
lllK'rality, that you are going to do away with all those
duties, and yet you exi)eet nothing in return ? ' I may per-
haps be told that many foreign eountrics since the former
relaxation of duties on our part, — and that would be ])er-
fcctly consistent with the fact, — foreign countries which
have been benefited by our relaxations, have not followed our
example ; nay, have not only not followed our example, but
have actually applied to the importation of British goods
higher rates of duties than formerly. I quite admit it. I
give you all the benefit of that argument. I rely upon that
fact as conclusive proof of the policy of the course we are
pursuing. It is a fact that other countries have not followed
our cxanii)lc, and have levied higher duties in some cases upon
our goods. But what has been the result upon the amount
of your exports ? You have defied the regulations of these
countries. Your export trade is greatly increased. Now,
why is that so ? Partly because of your acting without wish-
ing to avail yourselves of their assistance, partly because of
the smuggler, not engaged by you, in so many continental
countries, whom the strict regulations and the triple duties
which are to prevent the ingress of foreign goods have raised
up, and partly perhaps because these very precautions against
the ingress of your commodities are a burden, and the taxa-
tion increasing the cost of production disqualify the foreigner
from competing with you. But your exports, whatever be
the tariff of other countries, or however apparent the ingrati-
tude with which they have treated you, your export trade
has been constantly increasing. By the remission of your
duties upon the raw material, by inciting your skill and in-
dustry, by competition with foreign goods you have defied
your competitors in foreign markets, and you have been
enabled to exclude them. Notwithstanding their hostile
tariffs the declared value of British exports has increased
above ^10,000,000 during the period which has elapsed since
the relaxation of duties on your part. I say, therefore, to
you that these hostile tariffs, so far from being an objection
to continuing your policy, are an argument in its favor. But,

THE CORN LAWS.

229

depend upon it, your example will ultimately prevail. When
your example could be quoted in favor of restriction, it was
(pioted largely. When your example can l>e quoted in favor
of relaxation as conducive to your interest, it may, perhaps,
excite at first in foreign governments, in foreign boards of
trade but little interest or feeling; but the sense of the peo-
ple of the great body of consumers will prevail, and in spite
of the desire of government and boards of trade to raise
revenue by restrictive duties, reason and common sense will
induce rclaxatioii of high duties. That is my lirm belief."

PART IV. — CHAP. 4.

The Anti-Corn-Law agitation was one of those movements
which, being founded on right principles, and in harmony
with the interest of the masses, was sure to gather fresh
strength by any event affecting the supply of food. It was
popular to attempt to reverse a policy which aimed almost
exclusively to benefit one class of society. It was well
known that the League wanted to outset an economic fallacy,
and that they wished to relieve the people from a great bur-
den. And as time elapsed and the soundness of the princi-
ples propounded by the League at their public meetings was
more and more appreciated, their triumph became certain,
and Her Majesty's government itself began to see that it was
no longer ])ossible to treat the agitation either by a silent
passiveness or by expressed contempt. The economic theo-
rists had the mass of the people with them. Their gather-
ings were becoming more and more enthusiastic. And even
amidst Conservative landowners there were not a few enlight-
ened and liberal minds who had already, silently at least,
espoused the new ideas. No change certainly could be ex-
pected so long as bread was cheap and labor abundant. But
when a deficient harvest and a blight in the potato-crop crip-
pled the resources of the people and raised grain to famine
prices, the voice of the Lc3,gue acquired greater power and
influence. Hitherto they had received hundreds of pounds.
Now thousands were sent in to support the agitation. A

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ECONOMIC IIlSTOnV.

(pmrtcr of a million was readily contrilmtcd. Nor were the
coutrilmtors LancuHhin^ mill-owners cxiiluriividy. Among
them were mereliants and hankers, men of heart and men of
mind, the poor laijorer and the peer of the realm. The fer-
vid oratory of Hright, the demonstrative anil at''!;nmentativo
reasoning of Col)den, the more popular appeals of Fox,
Rawlins, and other platform speakers, filled the newsp^'oor
press and were eagerly read. And when Parliament
solved in August, lH-4.5, even Sir llohert Peel showed somo
slight symptoms of a convietion that the days of the corn
laws were numbered. Every day in truth brought homo to
his mind a stronger need for action, and as the ravages of
the potato disease progressed he saw that all further resist-
ance would be absolutely dangerous.

A cabinet council was held on October 31 of that year to
consult as to what was to be done, and at an adjourned meet-
ing on November o Sir Robert Peel intimated his intention
to issue an order in council remitting the duty on grain in
bond to one shilling, and oj)cning the ports for the admission
of all species of grain at a smaller rate of duty until a day to
be named in the order; to call Parliament together on '^o
27th inst., in order to ask for an indemnity and a sanct '
the order by law; and to submit to Parliament, immcdju,. ^
after the recess, a modification of the existing law, includ-
ing the admission, at a no.ninal duty, of Indian corn and of
British colonial corn. A serious diiferencc of opinion, how-
ever, was found to exist in the cabinet on the question
brought before them, — the only ministers supporting such
measures being the Earl of Aberdeen, Sir James Graham,
and Mr. Sidney Herbert. Nor was it easy to induce the
other members to listen to reason. And though, at a snbse-
(jucnt meeting held on November 28, Sir Robert Peel so far
secured a majority in his favor, it was evident that the cabi-
net was too divided to justify him in bringing forward his
measures, and he decided upon resigning office.

His resolution to that effect having been communicated to
the Queen, Her Majesty summoned Lord John Russell to
form a cabinet; and to smooth his path, Sir Robert Peel,

THE CORN LAWS.

231

witli churactcriatic frankncsa, sent a incraorandum to Ilor
MajoHty I'lubodying a promiso to ^'ivo him his support. Hut
Lord John Ruaaoll failed in hia elTorta, and the Queen had
no alternative but to recall Sir Robert Peel and f?ive him
full power to carry out hia meaaures. It was under aueh
eircumatanccs that Parliament waa called for January 22,
1840, and on January 27 the government plan was pro-
pounded before a crowded House. It was not an immediate
repeal of the corn laws that Sir Robert Peel recommended,
lie jiropoaed a temporary protection for three years till Feb-
rurary 1, 1841), impoaing a scale during that time ranging
from 48. when the price of wheat should be 50». per quarter
and upward, and 10s. when the price should be under 48«.
per quarter, and that after that period all grain should be
admitted at the uniform duty of Is. per quarter. The meas-
ure, as might have been expected, was received in a very
different manner by the political parties in both Houses of
Parliament. There was treason in the Conservative camp,
it was said, and keen and bitter was the opposition otl'ered
to the chief of the party. For twelve nights speaker after
speaker indulged in personal recriminations. They recalled
to Sir Robert Peel's memory the speeches he had made in
defence of the corn laws. And as to his assertion that he
had changed his mind, they denied liis right to do so. Mr.
ColqulKJun "wondered that Sir Robert could say, ' I have
changed my opinion, and thei-o is an end of it. ' But there
was not an end of it. His right honorable friend must not
forget the laws by which the words of men of genius, whether
orators or poets, are bound up with them. His right honor-
able friend's words could not thus pass away. They were
winged shafts that pierced many minds. They remained
after the occasion which produced them passed away. His
right honorable friend must remember that the words which
he had used adhered to the memory, moulded men's senti-
ments, guided public opinion. He must recollect that the
armor of proof which he had laid aside, and the lance which
ho had wielded, and with which he had pierced many an
encumbered opponent, remained weighty and entire. Greatly

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.ie;

N! I"

(lid he wish that his right honorable friend were again on
this side to wield them, that he were here to lead their ranks
and guide then) by his prowess. But if not, they retained at
least his arms ; these lay at their feet, strewed all around
them, an arsenal of power." Petulant remonstrances like
these were of course of little avail. Sir Robert Peel and
Mr. Cobdcn were ready to meet every challenge, and to re-
fute every argument with their unanswerable logic of facts.
And when the opposition endeavored to throw all the respon-
sibility of a measure of such a character on the prime minis-
ter, Mr. Cobden besought them to turn from the will of one
individual to those laws economic and divine which seemed
to impose the duty of laying wide open the door for the im-
portation of food. "Oh, then divest the future prime minis-
ter of this country of that odious task of having to reconcile
rival interests ; divest the office, if ever you would have a
sagacious man in power as prime minister, divest it of the re-
sponsibility of having to find food for the ])eople ! May you
never find a prime minister again to undertake that awful
responsibility ! That responsibility belongs to the law of na-
ture. As Burke said, ' it belongs to God alone to regulate the
supply of the food of nations. ' . . . We have set an example
to the world in all ages: we have given them the representa-
tive system. The very rules and regulations of this House
have been taken as the model for every representative assem-
bly throughout the whole civilized world; and having besides
given them the example of a free press, and civil and relig-
ious freedom, and every institution that belongs to freedom
and civilization, we are now about giving a still greater ex-
ample; we are going to set the example of making industry
free, to set the example of giving the whole wtirkl every ad-
vantage oi clime and latitude and situation, relying ourselves
on the freedom of our industry. Yes, we are going to teach
the world that other lesson. Don't think there is anything
selfisli in this, or anything at all discordant with Christian
principles. 1 can prove that we advocate nothing but what
is agreeable to the highest behests of Christianity. To buy
in the cheapest market and sell i - the dearest. What is the

f}?f

THE CORN LAWS.

233

meaning of the maxim ? It means that you take the article
which you have in the greatest abundance, and with it
obtain from others that of which they have the most to
spare, so giving to mankind the means of enjoying the full-
est abundance of earth's goods, and in doing so carrying out
to the fullest extent the Christian doctrine of 'Do ye to all
men as ye would they should do unto you. ' " The passing
of the measure was, however, more than certain, and after a
debate of twelve nights' duration on Mr. Miles's amendment,
the government olttained a majority of 97, 337 having vuted
for the motion, and 240 against it. And from that evening
the corn law may be said to have expired. ^ Not a day too
soon certainly, when we consider the straitened resources
of the country as regards the first article of food, caused not
only by the bad crop of grain, l)ut by the serious loss of the
potato crop, esiiecially in Ireland.

Ireland has often grievously suffered from social and
political wrongs, from absenteeism and repeal cries, from
Protestant and Roman Catholic bigotry, from Orangeism
and Ribbonism, from threatening notices and mid-day assas-
sinations, but seldom has her cup of adversity been so brim-
ful as in 1845 and 1846, from the failure of the potato crop.
Though comparatively of recent introdtiction, the first ])otato
root having been imported by Sir Walter Raleigh in IGIO,
potatoes had for years constituted a large proportion of the
food of the people of Ireland. A consideral)le acreage of
land was devoted to that culture, and an acre of potatoes
would feed more than doul)le the numl)er of individuals that
can be fed from an acre of wheat. Such cultivation was,
moreover, very attractive to small holders of land. It cost
little labor. It entailed scarcely any expense, and little or
no care was bestowed on it, since the people were quite
satisfied with the coarsest and most prolific kind, called
lumpers or horse potatoes. Nor was it the food of the people
only in Ircliind. Pigs and poultry shared the potatoes with
the peasant's family, and often became the inmates of his

1 9 anil 10 Vict. c. 22, suspended by 10 and 11 Vict. c. 1.

\rt

MMMiiMMMtaiMikiMMH

234

ECONOMIC HISTORY.

;i r

u I !

cabin also. One great evil connected with potato culture is
that, while the crop is precarious and uncertain, it cannot
1)0 stored up. The surplus of one abundant year is quite un-
fit to use ill the next, and owing to its great bulk it cannot
even be trans[)ortod from place to place. Moreover, once
used to a description of food so extremely cheap, no retrench-
ment is possible, and when blight comes and the crop is
destroyed the people seem doomed to absolute starvation.
This, unfortunately, was the case in 1822 and 1831. In
those years public subscriptions were got up, king's letters
issued, balls and bazaars held, and public money granted.
But in 1845 and 1846 the calamity was greater than any
previously experienced.

The potato disease first manifested itself in 1845. The
early croj), dug in September and October, which consists of
one sixth of the whole, nearly escaped ; but the whole of the
late crop, the people's crop, dug in December and January,
was tainted before arriving at maturity. In that year there
was a full average crop of wheat. Oats and barley were
abundant, and turnips, carrots, and greens, including liay,
were sufficient. Yet on the continent the rye crop failed,
and the potato disease appeared in Belgium, Holland,
France, and the west of Germany. On the whole the supply
of grain was fair during the year 1845, and prices ruled mod-
erately high. In 1840, however, the blight attacked the
potatoes with even greater fury and suddenness in the month
of July, and it attacked both the early crop and the people's
crop at the same time that the wheat crop proved under an
average. Barley and oats werr also deficient, and the rye
crop again failed on the Coiument. In the previous year
some counties in Ireland escaped the potato disease, but this
year the whole country suffered alike. The loss was indeed
very great. Probably £13,000,000 was a low estimate, and
from 4,000,000 to 5,000,000 (piarters of grain at least would
be rcquireil to rei)laoc it. As might be expected the news
of such a disaster had a fearful eifect throughout the coun-
try, and the utter helplessness of many millions of our
fellow-subjects became a subject of the greatest anxiety.

THE CORN LAWS.

235

lis

\IY

As soon as the potato disease appeared in 1845, govern-
ment took the step of appcnnting jirofessors Kane, Lindley,
and Phiyfair to inquire into tlie nature of the disease, and to
suggest means for preserving the stoek, but this was of little
avail. Urged by necessity, the government even stepped
out of its province and sent orders to the United States for
the purchase of £100,000 worth of Indian corn, established
depots in different jtarts, and formed relief committees.
But this was nothing compared with what became necessary
to be done in 1846. Public works were then commenced on
a large scale, giving employment to some five hundred thou-
sand ))erson8. The poor law was put in action with unparal-
leled vigor, so that in July, 1847, as many as three millions
of persDUs were actually receiving separate rations. A loan
of iE 8, 000, 000 was contracted by the government, ex])ressly
to supply such wants, and every step was taken by two suc-
cessive administrations — Sir Robert Peel's and Lord John
Russ 'I's — to alleviate the sufferings of the people. Nor
was private benevolence lacking. The Society of Friends,
always ready in acts of charity and love, was foremost in the
good work. A British Association was formed for the
relief of Ireland, including Jones Loyd (Lord Overstone),
Thomas Baring, and Baron Rothschild. A Queen's letter
was issued. A day of general fast and humiliation was held,
and subscriptions Avcre received from almost every quarter
of the world. The Queen's letter alone produced £171,533.
The British Associati(m collected £263,000; the Society of
Friends, £43,000; and £168,000 more were intrusted to the
Dublin Society of Friends. The Sultan of Turkey sent
£1,000. The Queen gave £2,000 and £500 more to the
British Ladies' clothing fund. Prince Albert gave £500.
The National Club collected £17,030. America sent two
shijjs of war, the "Jamestown" and ''Macedonian" full of
provisions; and the Irish reaidiMits in the United States sent
upwards of £2(10, 000 to their relatives to allow them to emi-
grate. But with all this, the i)eo[)le passed through a most
eventful catastrophe. One third of the people at least was
reduced to destitution. A largo number died by fever and

St '■

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286

ECONOMIC HISTORY.

ptslilencc. Such as could raise the requisite funds emi-
grated to America. Crowds of emaciated and famished
people flocked by every available means to English ports.
The rest were kept alive by employment on j)ublic works, by
private local charity, by local subscriptions, by contribu-
tions from all parts of the world, and by the most extensive
system of gratuitous distribution of food which history
affords any record of.

The i)rice of wheat and other grain did not rise much at
first. Indeed for a lengthened time but faint C()nce[)tion was
entertained of any want of foreign grain. The potato failure
was comparatively a new thing, a..d few imagined that it
would act powerfully on the consumption of grain. Iil 1845
the average ])ricc of wheat was no more than 50s. lie?, per
imperial quarter, it having risen from a mininuuu of 45s.
3t/. in March to 58s lOJ. in November; while the average
price of barley was 31s. 8d, and of oats 22s. (>(/. In 1846,
also the average price of wheat was 54s. 8<?., the jtricc having
ruled first 55s. G(7., falling to 4Gs. 3(7. in August, and rising
to GOs. 7(7. in Noveml»ei', while the average price of l)arley
was 32s. 8(7. and of oats 23s. 8(7. I>ut in 1847 a sudden great
rise took i)laee. The price of wheat rose from an average of
GOs. 11(7. in January to an average of 92s. 10(7. in June ; the
price of barley was 50s. 2(7. in Jamiary, 53s. 5t7. in Febru-
ary, ami 52s. 11(7. in May and June; and oats, conmieneing
at 20s. GiL in January, rose to 34s. 2(7. in June. In July,
however, a sudden change took jilaec by the concurrent ac-
tion of large importaticms and excellent prospects of the
approaching harvest. From June to December wheat fell
from 02s. 10<7. to 52s. 3.7. ; barley from 52.s. Ilt7. to 30s.
0/7. ; and oats from 34s. 2(7. to 21s. 10(7. i)er imj)erial
quarter. The importation of grain had lU'ver been so large
as in this year. In former years 1,000,000 or 2,000,000
quarters was the maxinuun, but in 184G the imp(trts
amounted to 4,752,174 ijuarters of grain and meal, and in
1847 to as much as 11,012,8G4 quarters, the greatest in-
crease having taken idacc from Russia and America. Then,
indeed, the nation realized that the corn law could not be

THE CORN LAWS.

237

•11

,ir(.'
(""

•ts
ill

maintained any longer. Onr dependence on foreign grain
became very great, and thankful indeed we were that by the
wisdom and foresight of our legislators, the last corn law and
the navigation law were alike suspended, and our ports were
opened to the su[)ply of food from any quarter of the globe.

Another important consequence of the potato disease was
an enormous stimulus to emigration. Great is the change in
the state of public opinion and law as respects emigration.
In oldon, yet not very remote times, an absolute prohil)!tion
existed against the departure of artisans from this countiy,
and we would have regarded as a dire misfortune the dejiart-
ure of hundreds and thousands of families from our shores
in quest of hap[)icr homes and more fruitful sources of indus-
try. Now we see whole fleets of emigrant ships carrying
away many of the ablest and most industrious of our work-
ing population, without a murmur of complaint or a feeling
of sorrow. And why ? because we feel that they only obey
the law of nature, which is always foreseeing and beneficent.
Even savages are impelled by their economical condition to
lie always moving in quest of food ; and when civilization
created new wants, a still greater impulse was given to
migrations from place to place. Sometimes religious and
political dissensions have been the causes of great emigra-
tion. Jhit motion is a law of human society, and endless
processions arc always moving, now from south to north,
and anon from north to south; at one time from west to east,
and at audthcr Iroiii east to w(>st. As for this ct)untry the
constant alternation of times of prosperity and distress in
commerce and manufnctures renders it the more necessary
tor our working people to have other outlets for their indus-
tries than are alTorded within these circumscribed islands,
and it is fortunate that the colonies are ever open for the
employment of any numl)er of laborers. As early as 1826
and 1827 the subject of emigration engagedthe atteiitidii of
the House of Commons, and th(>ir recommendation was that
the emigrants should be settled upon land granted by the
State, and that whatever fund be advanced for their l)enefit
should be subject to repayment. In 1831 a royal cominis-

>;?

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!.:

288

ECONOMIC HISTORY.

sion inquired into the subject, and while it did not approve
of any direct grant of money for emigration to Canada and
otlier North American colonies, it recommended that as re-
spects New South Wales and Van Diemen's Land the pro-
ceeds of public land sold should be devoted as loans of .£'20
and upwards towards the passage money of fauiilies of me-
chanics and agricultural laborers, and as bounties of, and
towards the conveyance of, young unmarried females. This
recommendation was subsequently adopted and carried out
by the colonial olhce, and then a loan for the Australian
emigrants was converted into a free gift and increased to
j£30, the bounty to single females being also increased to
X30. But notwithstanding these encouragements, the emi-
gration from the United Kingdom continued very limited for
a long time. For sixteen years, from 1815 to 1830, the
average number of emigrants was only 23,000 per annmn,
most of whom went to the North American colonies and the
United States of America. From 1831 to 1840 the average
number of emigrants increased to 70,000 per annum, Aus-
tralia then connnencing to attract great attention ; and from
1841 to 184G the average still further increased to 100,000.
But in 1847 and subsequent years the stream of emigration
flowed in a most rapid manner. Ireland sent forth the
greater part of her lal)oriug population, and in thedecennium
from 1847 to 18r»G the nimiber of emigrants actually in-
creased to 280,000 per annum. It was a |ti(ifiil sight to see
those crowds of worn-out Irish embarking in rags and jienni-
less for a foreign shore. But they went away from a i)lace
of sorrow and sulTering to a country which seemed to open
a boundless field for the exercise of honest industry. Nor
was the benefit of emigration limited to th(> emigrants them-
selves. The advantage was quite as great to the mother
country. Here they added nothing to national wealth.
They constituted the mortified ])art of the social system
which needed amputation. There, not only they ceased to
trench upon the labor of others, l)ut, after providing food
for themselves they became large customers for our produce
and manufactures.

■u

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THE CORN LAWS.

239

Ere wc pass from the repeal of the corn law and its conse-
quences, reference must be made to an achieveini'nt certainly
not less important in relation to the economic policy of the
country, the rci)cal of the navigation law. In 1845 these
laws were consolidated, and it seemed as if they were to
continue for many a year in existence, but the necessity for
suspending their operation in 1846 and 1847, and the pro-
gress of public opinion in matters of free trade suggested
an inquiry into the operation and policy of sucli laws in
1847. Of that committee Mr. Milner Gibson was chairman,
and during tlie year they published five reports on the
subject containing valuable evidence, tending to show the ob-
jections to such laws and the injury which they caused, not-
withstanding their restricted operation, — a large portion of
the trade being no longer protected by them. Evidence was
given to the effect that, looking to the geographical position
of this country, and to the peculiar energy of her people, the
extent of her trade, her great capital, and her success in
maritime enterprise, there need be no limit to the prosperity
of her shipping were it not for the restrictions and unneces-
sary charges imposed on it by the Navigation Act, the Regis-
try Act, and several other acts. It was urged that if we
could reduce the cost of ships and consequently of freights,
we should increase trade to an enormous extent; that the
immense traffic which railways occasioned in this country
was the strongest proof that cheap conveyance on the sea
would be attended with similar results, and that we should
not only obtain a much larger quantity of goods than have
hitherto come to market, but that we should find new ex-
changealde commodities wliich did not then como here; that
we should bring the timber of India or Australia at half its
present cost ; and that we should carry on the fisheries to a
much greater extent, and be enabled to increase every branch
of industry in this and other countries to a very large extent.
Shipowners certainl\;_prognosticated all manner of evil
likely to arise from the repeal of the navigation laws. They
warned the nation that such laws had raised it to the station
it held, and that without them it would as rapidly go down

I
pii

\tA.

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- i

]^"'

IP '

240

ECONOMIC HISTORY.

as it had risen. They were certain that the repeal of such
laws would reduce shipping property fully 30 j)er cent in
value, and introduce the cheap navigation of other countries
in competition with the costly navigation of this country,
and that, despairing of success, the British shipowner must
retire from the contest. Really, however, the advocates of
the navigation laws had little to say in their favor based on
substantial facts. The committee made no report in 1847,
but the general impression was that the rejjcal of such laws
would benefit trade, and that the necessity for action had
become imminent.

Accordingly, in 1848, as soon as public attention could be
given to the subject, Mr. Labouchere, in committee of the whole
house, moved a resolution to the effect, "That it is expedient
to remove the restrictions which [)revent the carriage of goods
by sea to and from the United Kingdom and the British pos-
sessions abroad, and to amend tlie laws regulating the coast-
ing trade of the United Kingdom, subject, nevertheless, to
such control as may be necessary, and also to amend the laws
for the registration of ships and seamen." But a concerted
opposition was made to such ju-oposition, and Air. I ferries
moved a counter resolution, "That it is essential to the
national interest of the country to maintain the finulamentul
principles of the navigation laws, subject to such modifica-
tions as may be best calculated to obviate any jjroved incon-
venience to the commerce of the United Kingdom and its
dependencies, and without danger to our national strength."
The discussi(m was long and animated, and the two oppos-
iuir views were fully enforced and illustrated; luit it ended,
as might have been expected, in the defeat of ^\v. [Terries'
amendment by a majority of 294 against 177. But the ses-
sion was lost, and the subject had to be deferred to another
year. Again, however, in 1849 Mr. Labouchere proposed
the same resolution, only adding that provision should be
made givin<r power to the Queen in council to re-enact these

hiws, wholly or in ]iart, with regard to any countries as to
which the government might think fit that they should be
preserved. Power was given to him to bring in a bill, and

\\f

THE CORN LAWS.

241

it was read a second time by a inajoi-ity of 200 to 210. As
originally proposed the bill was inti'nded to tlirow open the
coasting trade as well as the foreign trade, bnt the govern-
ment of the United States having notilied their refnsal to
reciprocate this concession, and some objection having been
raised by the department of customs because of the dilliciilty
of enforcing efVectual regulations to guard the revenue from
danger, the clauses relating to the coasting trade were with-
drawn, and the bill passed into law.^ But even the restric-
tion of the coasting trade was ultimately relin(piished, and
both the navigation on the coast of the United Kingdom and
the manning of British ships were left entirely free.'*

1 12 ami 13 Vict. c. 29.

2 10 and 17 Vict. c. 107, and 17 and 18 Vict. c. 120.

., 34!

■Vijiii'*^

¥&

242

ECONOMIC 111 STORY.

THE NEW GOLD.

FitOM Caiunes' Essays in Political Economy.*

;l I

KSSAY 11. — THE COURSE OF DEPRECIATION.

NO one, I think, who has attended to the discii.ssions
occasioned by the recent gold discoveries, can have
failed to observe, on the part of a large number of those
who engage in them, a strange unwillingness to recognize,
among the inevitable consequences of tho.sc events, a fall
in the value of money. I say, a strange unwillingness, be-
cause we do not lind similar doubts to e.xist in any corre-
sponding case. With respect to all other commodities, it
is not denied that whatever facilitates ])roduction jtromotcs
cheapness ; that less will be given for objects when they can
bo attained with less trouble and sacrifice. It is not denied,
for example, that the .steam-engine, the spinning-jenny, and
the mule have lowered the value of our manufactures ; that
railways and steamships have lessened the expense of travel-
ling, or that the superior agricultural resources of foreign
countries, made available through free trade, keep down the
price of our agricultural ])roducts. It is only in the case of
the precious metals that it is supposed that a diminution of
cost has no tendency to lower value, and that, however
rapidly supply may be increased, a given quantity will con-
tinue to command the same quantity of other things as before.
Among persons unacquainted with economic science, the
prevalence of tliis opinion is doubtless principally due to
those ambiguities of language, and consequent confusion of
ideas, with which our monetary phraseology, unfortunutely,

1 London : McMillan and Co., 1873.

THE NEW GOLD.

243

abounds, many of wliicli tend to oiicournf^c the notion of some
peculiar and countant stability in tlio value of the precious
nictals. TbuH, tlio expression "a fixed price of gold" has led
sonic people to imagine that the ])ossibility of a depreciation
of this metal is precluded by our mint regulations. The
double sense, again, of the phrase, " value of money," has
countenanced the same error ; for people, perceiving the rate
of interest (which is the measure of the value of money, in
one sense of the phrase) remaining high, while the supply of
gold was rapidly increasing, — perceiving money still scarce
according to this criterion, notwithstanding the increase in its
j)roduction, — have asked whether this did not alTord a pre-
sumption that its value would be permanently preserved from
depreciation, a biink rate of discount at (5, 8, or 10 per cent,
as they remarked, ai't'ording small indication of money becom-
ing too abundant.

It a]»i)ears to mo, however, that misconceptions respecting
the influence of an increased supply of gold upon its value,
and upon general ])rices, are by no means confined to the class
who could bo misled by such fallacies, but that even among
economists (at least among economists in this country) wc may
observe the same indisposition to believe in an actual and pro-
gressive depreciation of this metal. It is not, indeed, denied
— at least, 1 presume it is not denied — by any one pretend-
ing to economic knowledge, that the enlarged i)roduction of
gold now taking place has a tendency to lower its value ; but
it seems to be very generally supposed that the same cause —
the increased gold production — has the cITect, through its
inlluence on trade, of calling into operation so many tenden-
cies of a contrary nature that, on the whole, the depreciation
nnist proceed with extreme slowness, the results being dis-
persed over a period so great as to take from them any prac-
tical importance, and that, at all events, up to the present
time no sensible effect upon prices proceeding from this cause
has become perceptible.

The existence of this opinion among economists is, I appre-
hend, to be attributed in some degree to the circumstance that
so few have taken the pains to compare the actual prices of

■ .'I'l

.1 1

^^ 7,

hnn

: ' i';

244

ECONOMIC msTony.

the preaont liino with (hose of tlin period previous to (lie jijold
(liHoovericM, but much more to the liict that tiic cluiracter of
tlie new agency and the mode of its operation arc not, in
general, correctly conceived. I heliiive the most general
opinion with reference to the action of an increased supply
of money upon its value is, that it is nnii'orm, talves place,
that is to say, in the same degree in relation to all commodi-
ties and services, and (hat therefore jtrices, so far ns they are
inlluenced by an increase of nioney, must exhibit a nniform
advance;' and, no such unifi)rmity being observed in the
actual muvemcnt of prices, the ini'erenee has not nnnaturally
been drawn that such eidiancement as has taken plac(! is not
due to this cause ; that it is nut money which has fallen, but
commodities which have risen in value.

Now 1 am (piite ])repar('d tt) admit that an increase of
money tends nltimately, where the conditions of j)r(' luction
remain in other respects the same, to affect the prices of all
commodities and services in an c(|ual degree; but before this
result is attained a period of time, longer or shorter acconling
to the amount of the augmentation and the general circum-
stances of commerce, must elapse. In the j)resent instance
the additions which are bi-ing made (o the monetary systems
of the world are upon an enormous scale, and the dis(urbanco
eU'ected in the relation of prices is j»ropor(ionally great.
Under such circumstances it is very ])ossible (hat the ine(iuali-
(ics resulting may not find their correction throughout the
whole period of progressive depreciation, — a jioriod which,
even with our present facilities of production and distribution,
may easily extend over some thirty or forty years. During
(his transitionary term the action of the new gold will not l)e
uniform, but j)artial. Certain classes of commodities and
services will bo afTected much more powerfully than others.
Prices generally will rise, but with unecinal steps. Ncvorthn-

■1 "In relation to the Influence of the gold discoveries on the pr' il

cultural proiluee, it is plain that it could ho only the sai"
those of any other class of commodities. If it has caiiH' m

then ftiror, il must liarecHiisetl a rise of '20 fxr ciiU in rreri, se." ^ es,"

City article, August G, 185"J.) And the same assumption, i r expre8> . or im-
plied, runs through most of the reasoning whicli I have seen on this uestion.

THE NEW GOLD.

245

less thcfp will 1)0 in tlioso npparcnt irrcgiilariticfl notliiiii^
L'itlior (.'ii|n'ii'i()ii8 or nliiiorniiil. Tlic inovcinont will Ik; fj^ov-
criu'd (liPoMjfliout iirt coiii'sc hy ocoiiomic laws; niul it is (iio
|)ur|)os(^ nf tiic pri'scnt iiKjuirv to iisccrtiiin the nature of
tlicso laws and the niodo ol" tln'ir operation.

Tlio process by wliieli an increased production of p)ld oper-
ates in depreeiatiiiff the value of the metal and rai.sinjf general
prices appears to he twofold; it acts, first, i/ircctli/ through
the medium of an enlarji'.j*! money denuxnd, and secondly,
iihh'irrf/i/ through a contraction of supply.*

When an increased amount, of money conies into existence,
there is, of course, an increased expenditure on the part of
those into whose; possession it comes, the immediate effect of
which is to raise the prices of all connnodities which fall under
its inlluencc. It is obvious, lu^wever, that the advance in
price whitdi thus occurs will be, in its full extent, tcMuporary
only; since it is innnediately followed by an extension of i>ro-
duction to meet the increased dennind, and this must again
lead to a fall in price. Some writers who have treated this
question, ol)serving this effect, have somewhat hastily con-
cluded that under the ojieration of this principle thi; level of
prices wotdd never permanently be altered, since, as they
have urged, each addition to the circulating medium forming
the basis of a corresponding increase of demand, gives a
corresponding impetus to production ; every increase of
money thus calls into existence an equivalent augmentation
in the quantity of things to l)c circulated ; and the proportion
between the two not being ultimately disturbed, prices, it may
be presumed, will return to their original level.''* The least

• Acconlins to Mr. Nowmarcli (" History of TriL'ts," vol. iv., pp. 224-225),
tlif <li'prwi!iti()ii of inoiu-y may oi'ciir by a process wliicli is iicitiier cf tlu'so,
wlii'ii iiioiK'y oiuTiiti's upon pricos ncitlior tliroiifili tli'iiuitiil nor yet tiiroiii;li
supply, Itut " by rcnson of aiijjmpiitod quantity." I must confess myself wholly
unable to conceive the process bere indicated.

•^ [It may be worth while to ])reserve a specimen of the sort of I'olitioal
Economy tliat was talkeil and written on this subject some fifteen years ago.
A leadin{j article in the Extiminrr (December \?,, 1S50) contains the fnllowin);:
"The additional supply of the precious metal.s has stimulated the industry of
the world, and in fact produced an amount of wealth in representing which
they have been themselves, as it were, absorbed. . . . But the produce of

W.'^

V 'i

•^1

.It

246

ECONOMIC HISTORY.

reflection, however, will sliow that this doctrine has been
suggested by a very superlicial view of the phenomena.

For — not to press the obvious reductio ad ahsurdum to
wliich this argument is liable — how is this extension of pro-
duction to bo carried out ? In the last resort it is only j)ossiblc
through a more extended employment of labor. IJut, when
once all the hands in a community are employed, the effect of
a further competition for labor can only be to raise wages ;
and, wages once being generally raised, it is plain (supposing
all other things to remain the same) that profits can only be
maintained by a corresponding elevation of prices. When,
therefore the iulluencc of the new money has once reached
Avages, it is evident that there will be no motive to continue
])roduclion to that point which would bring prices to their
former level, and that consequently an elevation of ])ri('o must,
at this stage of the proceeding, be j)ermanently established.

So far as regards articles which fall dirccthf under the
action of the new money. With respect to those wliieh do
not happen to come within the range of the new demand,
price is, 1 conceive, in their case raised by an indirect action
of the new money in curtailing supply.

We luive seen that the effect of the efforts to extend jiro-
duotion in the directions indicated by the new expenditure
must 1)0 to raise wages; but it is plainly impossible that wages
should continue to advance in any of the principal depart-
ments of industry without affoeting their rates in the rest;
whence it will iiappen that, under tlie operation of the new
monetary iuliuencc, some departments of industry will expe-
rience a rise of wages before any advance takes place in the
prices of the now commodities produced by the laborers whose
wages have risen, it is evident that in all departments of
industry wliieh may be thus affected — in which prices will
nut liavo shared the advance which has affected wages —

tlic Aiistriilian ainl riilifortiian poM. as wi'll as that of silver wliicli has acconi-
paiiicil it, is likely U\ ^'o on ; and it may hi' aski'il if this must not in conrso of
tunc proiliii'c ili|)rc(iiiti(>n. We 'hitik it certainly is not likfly to do so ; . , .
on the contrary, it will surely be .bsorbed by increasing wealth nnd population
as fH"'. .".o it is produced."]

THE NEW GOLD.

247

uf
•ill

profits will fall below the general average ; the effect of which
must be to discourage production until, by a contraction in
the supply of Lie articles thus furnished, the price shall be
raised up to that i)oint which will place the producers on the
same footing of advantage as those in other walks of industry.

An increased supply of money thus tends, by one mode of
its operation, to raise prices in advance of wages, and thus to
stimulate production ; by another, to raise wages in advance
of prices, and thus to check it ; in both, however, to raise
wages, and thus ultimately to render necessary, in order to
the maintenance of profits, a general and permanent elevation
of price.^

This being the process by which increased supplies of
money operate in raising prices, in order to ascertain the
laws of their advance, wo must attend, first, to the direction
of the new expenditure ; secondly, to the facilities for extend-
ing the supply of different kinds of commodities ; and, thirdly,
to the facilities for contracting it.

With regard to the first point, — the direction of the new
expenditure, — this will naturally be detei-mined by the habits
and tastes of tho persons into whose possession the new money
comes. These persons are the inhabitants of the gold coun-
tries, and, after them, those in other countries who can best
supply their wants. Speaking broadly, we may say that the
persons who will chiefly benefit by the gold discoveries belong
to the middle and lower ranks of society ; in a large degree to
the lowest rank, the class of unskilled laborers. The direction
of the new exi)enditure will consequently be that indicated by
the habits and tastes of these classes, and the commodities

' It must not be supposed that tliis is inconsistent with tlie fundamental doc-
trine maintained by Hicardo, tliat "hijili wages do not make higli prices."
Tiiat doctrine assumes tlie value of money to be constant. Hicardo was quite
aware of tlie exception to the general priuciple, and points it out in tlie foUow-
injt passage: —

"Money, being a variable commodity, the rise of money wages will bo fre-
quently' occasioned by a fall in the value of money. A rise of wages from this
ciiiise will, indeed, be invariably accompanied by a rise in the price of commod-
ities; but in such cases it will be found that labor ancl all commodities have
not varied in regard to each other, and that the variation has been confined to
money." (liicardo'ii Works, second edition, p. 31.)

^■Wm

If;; 'm

I If..:

■ 'r?

,i]

■ "4
liii

248

ECONOMIC HISTORY.

lis'.

!ii

which will be most affected by it will be those which fall most
largely within their consumption.

With respect, secondly, to facilities for extending supply,
these will be found to depend i)rincipally upon two circum-
stances: first, on the extent to which machinery is employed
in production; and, secondly, on the degree in which the pro-
cess of production is independent of natr.ral agencies which
reciuirc time for accomplishing their ends. The distinction
marivcd by these two conditions, it will be found, corresponds
pretty accui-ately with two other distinctions, — with the dis-
tinction, namely, between raw and manufactured products ;
and, among raw products, with that between those derived from
the animal and those derived from the vegetable kingdom. An
article of fmisiied manufacture, in the ])roduction of which ma-
chinery bears a principal par*^ and which is inde])endent, or
nearly so, of natural processes, may after a short notice be
rapidly multiplied to meet any probable extension of demand.
An article of raw produce, being in a less degree inider the do-
minion of machinery, and depending more upon luitural pro-
cesses which require time for their accomplishment, cannot
be increased with the same facility; and i)roduction will con-
sequently, in this case, be comparatively slow in overtaking
an extension of demand. But of raw products, those derived
from the animal are still less under the dominion of ma<'hinery
than those derived from the vegetable kiugdom,au(l still more
dependent on the alow processes of nature, and, consequently,
production must, in their case, be still more tardy in over-
taking drnifind. .'>up])osing, then, the extension of demand to
bo in all three cases the same, the immediate rise of ]irice
w'xW., civt oris pnrif'>iK,\)o in all the same; but in the ease of
articles of (ini.shed nianufacture, this rise will be quickly cor-
recteil by the facilities available for increased production,
while in raw vegetable products the correction will take place
more slowly, and in raw animal products more slowly still.*

■.i ' •'

' Tlic foUowinp pnssnRC occurs in the "History of Prices," vol. vi., p. 170:
"The proiiiis of ('(minioiiities wiiicli exiilhit tlie most iinportnnt iiistiinccs of a
rise of price arc tlie raw niatcriais most extensively used Iti ninniifactiires, and
the production of which does not admit of rapid extension ; and, second, the

fi^ ■! |:

fit

THE NEW GOLD.

249

But, thirdly, I said that the progress of prices under the
influence of tlio gold supplies would be governed by the facil-
ity with which supply can be contracted. Every one who has
practical experience of manufacturing operations is aware
that, when capital has once been embarked in any branch of
production, it cannot at once be removed to a different one
tlio moment the needs of society may rc(iuire a change ;
whence it happens that, on any sudden change taking j)lace
in the direction of a nation's expenditure, or when from mis-
calculation production lias been extended beyond existing
wants, producers frequently choose to continue their business
at diminished jjrofits or even at a positive loss, rather than
incur still greater damage by suffering their capital to lie idle,
or by attempting to transfer it suddenly into some new branch
of production. The supply of a commodity is not therefore
always, or generally, at once contracted on the demand for it
falling off, or on its production becoming less profitable, and,
where this is so, it is evident that prices must at times
continue depressed below the normal level ; the duration of
the depression depending on the length of time required to
effect a transference of the unproductive capital to some more
lucrative investment. Now, the difficulty of accomplishing
this will generally be in direct proporti(m to the amount of

groups of enmnioditics in wliit.-li there is little, if any, rise of iirice in 18')7, as
eotniiiireil with 1S.')1, are nrtieles of eoioninl and fro])iciil produce, the supply
of whicli, drawn from a variety of sources, does admit of heinsj eonsiilerabiy
and e.xpe<litiousiy enhirjjed." The /(/c< of tiie rise of price in raw niaterlals is
liLTe admitted, thougli, in ascribing tliat rise, as l)y implication the passage
does, to the paucity of the sources of supply, tlie explanation is, as I conceive,
erroneous. The sources, for example, from which tea and sui^ar are drawn are
not more various than, nor indcd >;> various as, thosefrom which beef and tnut-
ton, butter and provisions, tinii)cr, t.illow, and leather are drawn; yet all these
latter articles have very eonsiilerably advanced in price. Afjain, among
colonial and tropical produce Mr. Newmarch includes rum and tobacco, anil he
mivjht also have included cotton; yet these articles, thouch falling within the
class which he says admits of being expeditiously enlarged, and which, there-
fore, according to bis theory, sliould ttol have risen in price, have in flirt risen in
a very marked manner. It api)ears to me that these phenomena can only be
imderstood by reference to the principle which I have endeavori'd to explain
further on — namely, the eflicacy of the currency of different countries in
determining local prices.

I'.

260

ECONOMIC HISTORY.

fixed capital employed ; and the principal form in which fixed
capital exists is that of machinery. It is, therefore, in articles
in the production of which machinery is extensively employed
— that is to say, in the more highly finished manufactures —
that the contraction of supply will be most difficult ; and this,
it will be observed, is also the kind of commodities for extend-
ing the supply of which the facilities are greatest. While,
therefore, manufactured articles can never be very long in
advance of the general movement of prices, they may, of all
commodities, be the longest in arrear of it.

The oj)eration of this j)rineiplc will be shown chiefly in that
class of articles which feels the efl'ect of the new gold only
through its indirect action — that is to say, through its action
upon wages. With respect to such article there is no exten-
sion of demand, and the price consequently can only be raised
through a C(mtrac(ion of sujiply. It is evident that of all
commodities this is the class in which the rise of price must
proceed most slowly.

From tlic foregoing considerations, then, I arrive at the fol-
lowing general conclusions : —

First. — That the commodities the price of which maybe
expected first to rise under the infkience of the new money are
those which fall most extensively within the consumption of
the productive classes, but more ])articidar]y within the con-
sumption of the laboring and artisan section of these.

Sfcomi/i/. — Tliat of such commodities, that portion which
consists of finished manufactures, though their price may in
the first instance be rapidly raised, cannot continue long in
advance of the general movement, owing to the facilities
available for n'pidly extending the supplv ; whereas, should
the production, i'rom over-estimation of tlie increasing reipiire-
ments, bo once carried to excess, their prices, in consecjuence
of the difficulty of contracting supply, may be kept for some
considerable time below the normal level.

T/iin/l//. — That such raw pnuhu-ts as fall within the con-
sumption of the classes i,; licated, not being susceptible of the
same rapid extension as K.inufactures, may continue for some
time in advance of the general movement, and that, among raw

t*r

THE NEW GOLD.

251

Itrmlucts, the effects will be more marked in those derived from
the animal than in those derived from the vegetable kingdom.

Fourthly. — That the commodities last to feel the effects of
the new money, and which may be expected to rise most
slowly under its influence, are those articles of linished manu-
facture which do not happen to fall within the range of the
new expenditure; such articles being affected only by its
indirect action, and this action being in their case obstructed
by impediments to the contraction of supply.

This is one class of laws by which 1 conceive the ascending
movement in prices will be governed ; and up to this point 1
have the satisfaction of finding my conclusions very fully
corroborated by the independent investigations of a French
economist, M. Levasseur, who, in some articles lately con-
tril)utod by him to the Journal ileif A'conoinistes, has, by an
entirely different line of investigation from that which I have
followed, — namely, by generalizing on the statistics of prices
in Fniucc during the period of 1847 to 185G, — arrived at
conclusions in the main points identical with those which 1
have now advanced.*

There is, however, another principle to which I venture to
call attention, which has not, so far as I know, been noticed
by any of the economists who have treated this (luestion, but
wliich. It appears to i.ve, must exercise a po>verful infhience on
the course of the movement. Tlie principle to which I refer
is that elVicacy which resides in the currency of each country,
into wliich any portion of tiie new money may be received,
for (b'tcruiining the effect of this infusion on the range of
local i)rici'S.

It is evident that the quantity of metallic money necessary
to support any required advaiu-e of prices throughout a given
range of business will vary with tlie character of the currency
into which it is received; that the (iiinntity recpiired will 1)0
greater in proportion as the metallic clement of the currency
is greater; and, on the other hand, less in proportion as the
credit element prevails. If the cuireney of a country be

' Si'o r'liiriipg, Appciulix, p oOO, for a suminnry of M. Levnsseiir's con-
clusions.

P"m

!|r

i >

252

ECONOMIC HISTORY.

jmrcly metallic, a given addition of coin will increase the ag-
gregate niedimu of exchange in that country only by the same
amount; if, on the other hand, the currency consists largely
of credit contrivances, each addition to its coin becomes the
basis of a new superstructure of credit in the form of bank-
notes and credits, bills of exchange, checks, etc., and the ag-
gregate circulation is increased, not simply by the amount of
the added coin, but by the extent of the new fabric of credit
of which this coin is made the foundation. Applying this
princi[)le to the dilTerent countries of the world, it follows that
a given addition to the metallic stock of Great Britain or the
I'nited States, in whose monetary systems credit is very cfli-
eaciou8, will cause a greater cx[>ansion of the total circulation,
and therefore will support a greater advance in general prices,
than the same addition to the currency of countries like Franco,
in which credit is less active ; and that, again, the effect in
countries like France will be greater than in countries like
India or China, in whieh the currencies are almost purely
metallic, and where credit is comparatively little used.

Now, this being so, if we consider further that the coun-
tries wliich receive in the first instance the largest share of
the new money — namely, England and the United States —
are also those in whieh, from the character of their curren-
cies, a given amount of coin will produce the greatest effect;
and, on the other hand, that Asiatic communities, in which,
from the weakness of the eredit element, the currencies are
least expansible, receive but a small portion of their share of
the new money direct from the gold countries;^ being com-

' I From sfiitistics roocntly fiirnislicd by the Economist, I learn that the facts
liavp not l)fi'ri as I licre assiiincMl, at loast since 1858 (the date from wliich full
returns of specie imports have been published by the Board of Trade) ; and it Is
jirobalile 1 was mistaken in my supposition with re(;ard to v/hat had occurred
before that time. Since 18')8, of .C'.lO.(M>(>,000 of gold received and retained by
ludia ami the Kast, some .£10,000,000, more than a half of tlie whole, appear
to have fj""e there divecllij from Australia, the remainder only having come
throusili Kurope. This error as to matter of fact will, no doubt, affect to some
extent the conclusion contended for. The causes tending to a divergence of
European from Asiatic prices have not been, it seems, as powerful as I had
supposed; and, in point of fact, this feature in tlio movement has been liss
marked than I skelched it , b\it for this, other causes besiiles that noticed here
liave been responsible (1872). See Introductory Chapter, p. 12.)

^il.M't i

fir

THE NEW GOLD.

253

polled to wait for the remainder till it has flowed throiif?h the
principal markets of Euroi)e and America, allccting prices in
its transit, — if, I say, we consider these facts in connection
with the principle to which I have adverted, I think we nuist
recognize in that principle — in the influence of the currency
of each country on the range of its local prices — an agency
which must modify in no small degree the general character
of the movement which is now in progress.

In spea,king of the influence of the currency of a country on
the range of its local jtrices, I should explain that I use the
words "local prices" in a somewhat restricted sense; namely,
with reference to the locality in which commodities are jn'o-
iluced, not to that in which they are sold, their price in the
latter i)lace being always determined by their price in the
former. Thus, when I speak of Australian, English, or In-
dian prices, I shall be understood to mean the prices of their
several products in Australia, England, or India.

Understanding the words, then, in this sense, let us sec
how far local prices are likely to be affected by the cause to
which I have adverted.

In the first i)lace, then, let it be observed that a very re-
markable divergence of local prices from the range previously
obtaining in the international scale has already taken place. ^
The prices of all articles produced in Australia and California
are at present on an average from two to three times higher
than those which prevailed previous to the gold discoveries;
these rates have now been maintained for several years, and
arc likely to continue ; but, while this advance has taken place
in the gold countries, in no part of the world external to those
regions have prices advanced by so mueb as one third. Tb(^
possibility of a divergence of local prices is thus, as a matter
of fact, established ; and the explanation of the jihenomenon
I take to be this. The sudden cheapening of gold in Australia
and California quickly led, through the action of comi)etition
among the diflfercnt departments of industry, to a corre-
sponding advance in the jirices of everything produced in
those countries ; this advance being in their case possible, be-

1 See Cairnes, pp. 24, 25.

hi',

M'J

^ i

•254

ECONOMIC HISTORY.

iii\

cause, from (lie limited extent of the transactions, the local
circulation was quickly raised to the point sullicient to sustain
a doulile or triple elevation ; but it was inipossiljle that the
currencies of all countries should he expanded in the same
proportions in the same time; and, constMiuently, prices in
other countries have not risen with the same rapidity. The
cause, therefore, of this divergence of local prices — the cir-
cumstance which k(!eps general prices in arrear of that ele-
vation which they have attained in Australia and California —
is the diHiciilty of expanding the currencies of the world to
those dimcjisions which such an advance would rccpiirc. This
expansion, however, is being gradually effected by the process
we are now witnessing, — the increased production of tlic pre-
cious metals, and their dilTusion throughout the world. Hut,
as I have said, (he diffusion is not uniform over the various
currencies, nor are the currencies receiving the new supplies
of uniform 8uscep(il)ility ; and the inequalities arc such as to
aggravate each other; the currencies which arc (he most sen-
sitive to an increase of the pi'ccious metals receiving in the
first instance nearly the whole of the new gold; while (he
least sensidvc currencies are (ho last to receive their share.
And these, it appears to me, are grounds for expecting among
other countries further exami)l('s of tliat jthoiiomenon of local
divergence, of which one has already been alTorded by the gold
countries.

To judge, liowcver, of the extent to which such local vari-
ations of price can bo carried, we must advert to the corrective
influences which the play of international dealings calls into
action; and these api)ear to me to resolve themselves into the
two following: namely, first, (he corrective, which is supplied
Ity the competition of dilTcrcnt nations, producers of the same
commodities, in neutral markets; and secondly, that which
exists in (he recijirocal demand of the different commercial
countries for each other's productions.

The first f«)rm of the corrective is obviously the most pow-
erful, and must, so far as its oj)cration extends, at once im-
pose a check upon any serious divergence. Thus it is evident
that prices in England and the United States could not pro-

THE NEW GOLD.

255

into
the
iliod
lame
lileh
I'cial

|)0W-

im-
Icnt
liro-

ceed very much in advance of prices on the continent of Europe,
since the certain elYect of such an occurrence would be to send
consumers from the dearer to tlic cheaper markets, and tlius
to divert the tide of gold from the currencies of England and
America to the currencies of France, Germany, and other con-
tinental States, — a process which would bo continued until
prices were restored to nearly the same relative level as before.
But it is only among nations which arc competitors in the
same description of commodities that this equalizing process
comes into operation. As between countries like England and
America on the one hand, and India and China on the other,
— in which the climate, soil, and general physical conditions
dilTer widely, in which, conseiiuently, the staple industries aro
different, and whose productions do not, therefore, come into
competition in the markets of the world, — this corrective in-
fluence would be felt slightly or not at all. The only check
which could be counted on in this case would be that far
weaker one which is furnished by the action of reciprocal de-
mand in international dealings. Thus, supposing prices to
rise more rapidly in England than in India, this must lead, on
the one hand, to an increased expenditure in England on In-
dian c(mimodities, and, on the other, to a diminished expendi-
ture in India on English commodities, with this result, — a
steady elllux of the precious metals from the former to the
latter country. Such an elllux, as commercial men are well
aware, has long been a normal phenomenon in our Eastern
trade, but it has lately assumed dimensions which constitute
it a new fact needing a special explanation. I believe that
explanation is to be found in the circumstances to which I am
calling attention.

English and American prices, and with thorn money incomes
in England and America, have, under the action of the new
gold, been advancing more rapidly than prices and incomes in
Oriental countries ; and the result has been a change in the
relative indebtedness of those two parts of the world, leading
to a transfer to the creditor country of corresponding amounts
of that material which forms the universal equivalent of com-
merce. It is true, indeed, that other causes have also contrib-

i-' t
t'V

\t. I

I'll

256

ECONOMIC II f STORY.

utcd tolliis result, ami in particular I may mention tlio failure
of the silk crop in Europe, which has larj^cly thrown us upon
China, as a means of suitplomenting our delicient sup|)lies.
But the main cause of the i)henomenon in its present propor-
tions is, 1 conceive, to be found, not in any such mere tempo-
rary disturbances, but in the natural overllowiujr (eonse(iuent
uj)on the increase of the precious metals) of the redundant
currencies of Europe and America into the more absorbent
and im,)assive systems of Asia.* This, then, I say, is the only
substantial corrective alforded to the advance of prices in
Europe and America beyond their former and normal level in
relation to prices in the East ; and the cpiestion is, will this
corrective be sullicient to neutralize the tendency to a diver-
f^ence ? Will tlie flow of the precious metals fr(jm West to
East sullice to keep prices in England and America within the
range prescril)ed by the inelastic metallic systems of Asia? I
do not conceive that the corrective will be adequate to this
end, and I rest this conclusion upon the facts and jirinciples
which I have stated, — the vast proportion of the whole gold
production which finds its way in the first instance into the
markets of England and America, the comparatively small
)»ortion which goes direct to the markets of Asia,^ the highly
elastic and expansible currencies of the former countries, and
the extremely impassive and inexpansiblc currencies of the
latter.

W»^ find, therefore, two sets of laws by which the progress
of prices, or (which comes to the same thing) the deprecia-

' Accnrilinply we find that tlie drain wliicli, duriiiK tlic rovulsiori of trade
following on tlio conunorcial crisis of 1X57, had for a wiiile wusi-d, has witii
the revival of trado, recommenced. As a proof iiow liitte mere practical sagacity
is to bo trusted in a questi(in of this kind, it may l)c wortii wliile to mention that,
only three montlis since, mercantile writers were confidently jiredictiMg llie turn-
ill;/ of the tide of silver from the F.ast to F.nijland. The foUowintJ is from a circu-
lar of Messrs. Kllisen & Co., quoted in the Times City article, .Inly 28, 18o8,
apparently with the editor's approval: "The time is rapidly ai)proacliing when
silver will also be shipped from here [China] to ICnslanil." So far from this
being the case, the drain to the Kast has again set in, and (jives every indica-
tion of assuming its former dimensions. Every mail to India during the pres-
ent month (November, 1858) has taken out large amounts of silver.

3 See ante, p. 252, note.

THE NEW GOLD.

257

tion of ^old uiulor the action of nn iiicrenscd supply, is rejjfu-
lafcil : lir.st, tliosc wliich I cxplaiiuMl in the earlier portion of
this paper, which depend chiefly on the facility with which
the supply of commodities can he adjusted to such chanj^es in
demand as the new money expenditure nuiy oecasion ; and,
secondly, those which result from the action of the new money
on the currencies into which it is received. According to the
former principle, the rise in price follows tlie nature of the
commodity affected ; thus it will in general be greater in ani-
mid than in vegetable productions — in raw produce than in
(inished manufactures. According to the latter prineiplcj the
advance follows the economic conditions of the locality in
which the commodity is produced. Thus the rise in price has
been most rapid in commodities produced in the gold coun-
tries ; having in these at a single bound reached its utmost
limit, — -the limit set by the cost of procm-ing gold. After
commodities produced in the gold regions, the advance 1 con-
ceive will proceed most rapidly in the productions of England
and the United States ; after these, at no great interval, in
the productions of the continent of Ei ro|)e ; while the com-
modities the last to feel the effects of the new money, and
which will advance most slowly under its influence, are the
productions of India and China, and, I may add, of tropical
countries generally, so far as these share, as regards their
economic conditions, the general character of the former
countries.

Such appear to bo the general principles according to which
a depreciation of the precious metals, under the action of an
increased supply, tends to establish itself. With a view to
ascertain how far, in the progress of prices up to the present
time (1858), any trace of their operation can be discerned, T
have drawn up some statistical tables ; i and although, from
the imperfect nature of the materials which 1 have been able
to collect, I cannot claim for the result a complete verification
of the theoretic conclusions which I have ventured to ad-
vance, I think they are such as to justify me in placing some
confidence in the general soundness of those views. Before,

^ See Cairnes, Appendix.
17

If: I

"I!

'<V.

'Mi

^•m

It! '

* n

2.J8

ECONOMIC HISTORY.

however, stntinp; the roaiilts of the tables, two or three re-
marks iniist \n\ premised.

First, 1 woultl cruvo ntteiitioii to this fact, that the present
time [1S*)8J is one sin^nihirly free from liistiirliinj; inthienees,
and that such as do exist arc of a kind rather to conceal than
oxaj^j^'crato the elTects of (h'preciation. Thus, we have had
three harvests in succession of, I believe, more than averap*
productiveness (tiio last year of deficiency bcinj^ 185;')); and
this cause of abundance has been assisted l)y free-trade, whicli
has opened our ports to the produce of all (piarters of the
world. Aj^aiii, althoujrii in the jteriod under leview we have
passed thr(»u<^h a Kuropean war, yet we have now enjoyed two
years and a half of peace, during wliicb, I think, tlu? economic
intluonces of the war may be taken to hnve exlmustcd them-
selves. It is true, Imieed, that we liavo an Indian i(>volt still
on our hands, Ix^sidcs havintr but just concluded some hostile
operations in China. I»ut these disturl»iinccs have not ijcen
of a kind to interferes seriously with the ^^(.ik.i'jiI course of
trade, except in some few Oriental commodities in which their
elTeets are slightly apparent.

Ihit what renders the present time pecidiarly important as
a point of comparison with former periods, is its being in im-
mediate aeipuMice to a .severe commercial crisis. The elTect
of the crisis of last winter has been elTectually to eliminate
one great disturbing element from those causes to which a
rise of price might l)e attriliutcd, — the element of credit.
Trade is now sulTering d(>pression in almost all its braiu-hes ;
and prices, after a period of undue inllation, have, through an
ordeal of bankruptcy, been brought to the test of real value.
In till! tluctiiations of commerce we have reached the lowest
point of the wave; whatever, therefore, be the range of prices
at the present time, we may at least be sure that no commer-
cial convulsion is likely to lower it.

We have further to remember that in an ngc like the pres-
ent, in which science and its applications to the arts arc in all
civilized cou!itries making rapid strides, there exists in most
articles of general consumption (but more particularly in the
more linishcd manufactures) a constant tendency to a decline

THE NEW GOLD.

259

of prico, tliroii<,'li the employincnt, of more cfTiciont mncliinery
mill iiuprovt'd procoHHUH of production. Now, tiikinj? all these
circiimstaiiccrt tojictluT, — (1h! propitioiisuosH of the HeiiHons,
the action of fri'i'-lnidc, lln.' ahscnt'c of war, th(! contraction of
credit, and tlic general tendency to a reduction of cost pro-
cectlini; from the proj^rcss of knowledtrc, — it appears to n»e
that, were then; no other cause in operation, we should have
reason to look for a very considerable fall of prices nt the
])i'es(Mit lime, as compared with, say, ei|iht or ten years aj:fo.

the f(

tabli

not

es ' w ill show, have
fallen; they have, on the contrary, very decidedly risen, and
the advance has, moreover, as the same tables will also show,
on llie whole proceeded in conformity with the principles
which I have in this paper endeavored to establish. And this
is my <j:round for asserliii}:; that Ihe deprccialion of our .stan-
dard money is already, under the action of the new gold, an
accomplished fact.

im-

Tect

nale
ich a
red it.

hcs ;
h an

alue.
owest

iriccs
iimer-

pros-
in all
inost
in the
cclinc

ESSAY III. — TNTERN'ATIONAL HESITLTSU

In a former essay '' it was attempted, from a review of the
industrial history of Australia since the late discovery of <rold,
to make some irencral deductions rospectinu: the character
of that event, and of its iiilluence upon national interests.
Anions? other conclusions it was maintained that the; ti-ndoncy
of the }?oI(l discoveries, or, to spoak with mon.' precision, the
ten<lency of the increased production of pold, was rather to
alter the distribution of real weallh in the w<»rlil than to
increase its amount ; Ihe beiiefil derived by some countries
and classes from the event beimr for the most part obtained at
the expense of others. It was shown, for example, that the
frain to Australia ami California from their irold pKilds accrued
to them exclusively Ihrouirh their foreiirn trade, — their cheap
gold enalilint? them to commainl on easier Icnns than for-
merly all foreiirn productions; while, on the other hand, the
only result to foreign nations of the trallic thence arising was

• See Cairnps, Apiiemlioca.
' V.asay I. u( this scrii'S.

'^ Fraser's Magazine, January, 1800.

■:<l

'til

«, ' >u

',? 1

260

E CONOMIC HIS roll Y.

an incrcfisc in tlicir stociv of money, — a result rendered nec-
cssiU") indocd l)y (ho new conditions of raisinj^ p;old introduced
by the frold discoveries, hut in itself destitute of any real
utility. It was shown, in short, that, as regards commercial
nations, the elYect of the gold discoveries was to place tlu-ui
untier the necessity of enlarging their currencies, compelling
them to pay for the rciiuisite increase by an increased expoit
of their productions.

'i'o this conclusion I was led by direct inference from the
facts presented in the gold countries. In the present jjaper it
is j»roposed to follow up the inquiry, with a view to a mo'"
particular ascertaimncut of tlie consefpieiu:es fornuM'ly de-
Hcrilied ; the olijcct hciing to discover in w',at maimer the los.^
arising from the gold movement is likely to l)e distributed
anuuig conunercial nations, and how far this loss may in jiar-
licular cases be neutralized or compensated by other iulluonces
which the same movement may develop.

In the discussions whi* h have hillu'rto taken place upon
this (piesti(»n, the ini|uiry into the ('onsc(|iieuces of the gold
discoveries has been couliucd almost exclusively to that as-
pect of ihe event ill which it is regai'dcd as alVecting fixed
(•i)ntracts through a (le|>rcciation of the moiu'tary stamlard.*
As soon as the probaliility of depreciation is settled, and the
elTi'cfs of this upon the dilTcrent classes of society, accoi'ding
as they happen to In- dclitois ov creditors under fixed con-
tracts, explainetl, the suliji'ct for the most part is considered
as exhausted. I venture, however, to think that this uiikU'
of treatment is vcrv far from exhausting the (|uestion. It
seems to inc that, iuibpi'iulently altogether of the existence
of lixcil contrai'ts, indcpendtMitly even of gold lieing a stand-
ard of value, (he increasc(l piMductinn of this metal which is
now (akinir place will be attended, inileed has already bet n

' Si'o Stirliiiti's " GoM Diacnvorios nml tlicir prf)l>i>lili> Conscqupncra ; "
riicvuliiT "<)ii tlic I'rolmlilf K.ill in tlic Viiliic of (loM;" I.cvmsscw s cimtrilni-
tinlis lo llic ".Fiilirnal ilrs llidlloMli^tis," IS.'iH; >!'( "ullocli's jirl.ilc " I'lii'ioi'.S
Mi'tnl«," in tlic " I'.iic.vcliipii'diii Hritiiniiica " In nil tlii'«c, iinil in nmny otIiiT
ininnr pniiiuctions on tlio dninc ("iilijcci, nliiifist tlir on! y t'i>nst'(im'nci's of tlio
Kolcl iliscDvcrics wli.cli arc taken aii'u'ii't of arc tlio.su whicli occur in tixetl
cjiitnictii tliroiigli a tlciirccimioii of the stnmliinl.

THE NEW GOLD.

261

IS ; "
•il.ii-

|i()i:8

Itlicr

til.'

.al tended, with very important results. Let us observe for
a nioment tlic movement which is now in progress. Austra-
lia and California have, during the last eight or ten years,
sent into general circulation some two hundred millions
sterling of gold. Of this vast sum portions have penetrated
to the most remote (juarters of the world ; hut the bulk of
it has been received into the currencies of Europe and the
United States from which it has largely displaced the silver
formerly circulating; the latter metal, as it has become free,
flowing off into Asia, where it is permanently absorbed.
ViewiTig the effect as it occurs in the mass of the two metals
combined, it may bo said that the stream which rises in the
gold regions of Australia and California flows through the
currencies of the United States and Europe, and after saturat-
ing the trade of these countries, finally loses itself in the
hoards of Chiiui and flindostan. The tide which comes to
light in the sands and rocks of the auriferous regions disap-
pears in the accumulations of the East. In conjunction,
however, with this movement, there has been a counter one.
With every advance in the metallic tide a stream of com-
modities has set in in the opjjosite direction along the same
course, — a stream which, issuing from the ports of Europe,
America, and Asia, and depositing as it proceeds a i)orti()n
of the wealth with which it is charged, finds its termination
in the markets of the gold countries. Here, then, we find a
vast disturbance in the conditions of national waUh, — a
disturbance originating in the gold discoveries, and result-
ing in a transfer, on an enormous scale of consumable goods
— the means of well-being — from oue side of the globe to the
other. This disturbance, it is evident, is entirely independ-
ent of the accident that gitld happens to be in some countries
a standard of value, as well as of the existence of fixed monev-
contracts; for it includes within tiie range of its influence
countries in which gold is not, no less than those in which
it is, the mimetary standard; and it affects alike j)ers(ms
whose bargains are made from day to day, and those Avho
engage in contracts extending over centuries. The fact is,
the movement in question is the result, not of gold's being a

:•. iii

i.'l w

2G2

ECONOMIC iiisroii y.

stiiiulanl of valiio, Imt of its iK'iiijjf a SDiirco of jmrchasing
power; and tlu> inlliiciH'f of Ihc tidld discoveries liavin;^ beci)
lutlier<o repirded almost exclusivtdy with refereiiee lo tlu!
i'oi'iiier function, llie vast olTccts wliicli they are jtrodiieiiiji-
throiifrh the action of the lattiT, — that is to say, l>y ulteiiuix
the distril)Ution of piirchasini^ power in liie worhl, — liavc!
been almost wholly overlooked. It has indeed heen per-
ceived that a u:reat inlliix of the jd'ecious metals is takinuf
place, uccompanifd with certain consciiiienecs on the tradt;
of the world; hnt so far as 1 know, heyond some general
phrases respectiiiir the stimulus {xiven to production liy an
increase of money, and the great devcdopment of coinmerctj
which it is cansintr. no attempt has yet Ix'cn made to state
the principles l>y which ihi' niovemcut is L''o\crned, or the
cITects which may How from it. It is to these (piestions,
then, that 1 would now solicit the reader's attention, ami
towi'ids their solution (he f(dlowing remarks are oflcrt d
as a cont ril)iit ion.

'I'hose who have followed the course of this controversy are
aware that, hy most peisons who have taken i)art in it, it has
liceii assiime(l, almost as an axiom, that no depreoiation of
gold in eonseipirnce of the gold discoveries has, up to the
I res(Mit time, taken plae(>. ' As a matter of fact, how(>ver,
we km w (h.!: ilie gold prices of all commodities produ 'cd in
Austr: lia and California have risen in at least a twofeid pro-
portion:'- while we have si-cn that (so long as the eoiiditions
of pioducimr gold remain as at pi'csent) liils rise mu-st lie per-
manent. To express the same thing dil't'icntly : in 'he pur-
eha.sc of every commodity nnsed in the gold countries tw(»
sovereigns are now retpiired, and (the nhovo conditions being
fiillilled) will continue to be rcijuired, wlu-re one was formerly

' Till' prii)i'iiml oxcciilioiis to tliin stntcnu'iit lUf M. I.cviissi'iir (wlm, in lui nr-
ticlf in tlie".Iniirnii! iI'-h Ivomiminti's," Mnrcli, 1H.',S, cBtimnti's the rise (if pricis
ill I'Vaiu'c siiii'i' is|7 at 'J") jut iciit on all coninKidiiin*), ami Dr. Sncilpfcr, of
!i:iniliiiru, who, in Imh table of priccK ;,'ivi'n it) Iii8 " I'ontrihiitionH to thi' Sliitis-
tirs of I'rici's ill llalllhll^^,^" arrivi's at a Hiiniiar result (see Appeii'lix). .Many
other writers, iinl.'eil, iiel^iinwleiijje that prii'es liave ri.oii, hut the rise is always
atirihnlcd to caiiM's ilihtiiiei from tliu iiicreaiieil pruductioii of gold.

^ Suo CuiriKit, p. '24

THE NEW GOLD.

268

suHicit-'iit ; iuul if tliis docs not amount to a fall in the value
of y;oltl, 1 must C(jniV'.ss mysclt' unal)lt' to understand \\w nunin-

tliosc who hav(> written on this (piestion; it seems to

ing of tliat expri ssion. It is not to he su])|iose(l that so re-
njarkahlo a fa(;t as this should have escaped the attention of

rather that tlu; ijiuorinu: of it in the discussion is to 1)0
attrihutcil to a want of <lclinite iileas respecting value in tho
precious metals, as well as respecting the mode in which
changes in their value arc accomplishecl. The language
which is connnonly used on the sul)jcct would seem to iujply
that gold and silver possess throughout the worhl a uniform
value, and that all changes therein proceed in a uniform
maimer, showing themselves at tho same time in all coun-
tries, and in respect to all conunodities. But nothing can
he further from th<' truth than such a notion. (lold and
silver, like all other vhings which are the suiijects of inter-
national exchange, possess local values;' and it is hy a
succession of operatitms on the local values of gold of an
unc(|iial and tluctuating character that its dcpreciiiticm is
Iteiuir elTectcd, and that (the conditions of prtiduction re-
maining as at present) its value will continue to <leclino.
Tho twofold rise of prices in tho gold countries forms tho
first step in this progress; and it will he through ;i series of
similar partial advances in other countries, and not l>y any
general movement, that tho depreciation of the metal
throughout the worlil will Iti- accomplished, if that t oiismn-
niation is indeed to take place. With the <piestinn of do-
preciatinn, howe- er, 1 am at present no further cmicerned
than may lie necessary to show the I'caring of these changes
in the local values of gold upnu the movements of trade, an<l
through these ujion national interests.

There is no need hero to resort to argument to prove that
a general rise or a L^eneral fall of |irices, provided it he
sinudtaneous and uniform, can ho attendcil, always exclud-
ing tho case of fixed incomes and conti-acts already entered

• Set' on the fulijoct i)f ilio local valiU'S of tlic prcciouK nu'trtJH, liicanlo'*
" Works," pp. "7-SO, ami Mill's " PriiicijiK'S of Political Kcononiy," Hook lii.,
clinps. xix. aiul xxi.

Vii

fl'>

204

ECONOMIC II I STORY.

into, with no iiupuitMiit consoqucncos oithcr to nations or to
individiiuLs. It iw cvidi'nt that such a chanjic woiihl merely
alter the terms in whieli transactions are carried on, not the
transactions themselves. Hut wiien the rise or fall of prices
is not jreneral, in other words, when (he chaiiLre in the values
of the precious meliils is merely lot;al, it will lie seen that
important c()nse(|ueni es must result. Supposimr, l'«ir exam-
ple, the prices of all connnoditus produced in Knuliind to he
doubled, while prices throu<i;hout the rest of the world re-
mained uneli!iMi"-ed, it is evident that hiilf the commoditicH
exp(Mte<| friun Kniiland would, und -r theses circumstances,
he sullieieiit to discharge our fondi: i delils. With half the
capital and laltor now employed in pi'odneinj; floods for the
foreign markets, we should attain the same result as at pres-
ent,— the procuriiitj: of our imports; while the remaining
half woulil Ite set free to i-e applieil tt other purposes, — to
the further augmeiitition of our wealth and well-l)eing,
Kntrland would, therefore, in the c;ise we have supposed, he
hcneliteil in all her foreign dealings to the fuil extent of the
rise in price. On the other hand, foreign comiti'ies would,
in exchange for the commodities which tlii'v send us, receive
in return of our commodities l»ut half their present supply.
Their lahor and ciipital would go lad half as far as at pres-
ent in commanding <tur prt lucti(»ns, and they would he
losers in proportion. It is evident, therefoi'c, that while
nations hav(< not, any more than individuals, any interest in
the positive height which jtrices may attain, every nation, as
well as every individual trader, is interested in raising, in
nlatioii lit iiflirrx, the piiee of its own productions. The
lower the htcnl value, therefore, of the prcidous n tals in
any coimtvy, the gi-eater will lie the advantage to hat coun-
try in forei<rn markets.

This lieing the manner in which nations are interested in
chan<jres in the value of gold, let us now oiiserve the elTect
which the gold discoveries are produeiu'j: in this respect.
As has lieen already stat<'d, the local value of gold in Aus-
tralia and California has fallen tu one-half, tlie prices uf

;!»

THE NEW GOLD.

205

thoir protluclions liavinp^ rison in a twofold proportion;' and
prici's in otlii'r parts of the world havinjr undciLronc no cor-
rcspondinn ('lian}:ft>, tlu'sc countrict} realize the jiosition which
wo have just hccn considerinj? in our hypothetical cast!. A
given (plant ily of their (Capital and lal)or goes twice as far as
formerly in conunandinL^ fort'i^;n |)ro(hH'tions, whili' a trivi-n
(pianlity of foreign laltor and capital ^oes only one-half as
far in conini:indiii;x theirs. The world has thus, throii;i;h the
{?old discoveries, been placed in its dealings with I'alifornia
and Australia at a commercial disadvantage; and from this
disadvantage! it can only escape (always supposing the pres-
ent coiulitions of producing gold to continue) liy raising the
prices of its productions in a correspi»nding degree. Kvcry
country, therefore, is interested in raising as rapidly as pos-
Bil)lc tlio prices of its productions, — in other words, in the
ir st rapid possiide deprecialion in the local value of its
gold.''^ The sooner this is elVecled, tiie sooner will the coun-
try ho restortMl to its natural conniiercial footing in relation
to Australia and (/alifornia; while in relation to cmmtries
where prices do not rise with thtj same rapidilv, it will pos-
sess tlie same kind of advantage which is now enjoyed ly
the gold countries.

This coiit'lusion, I find, is directly at variance with tin*
opinion of some economists of eminence. .Mr. .M'Culloch,
for cxnuiple, in his recent eontriitutiou to the " Kncyclopa>dia
Hritanuic'i," '' niMintains ^Mhat the misihievous inlluence
resulliuL, from a fall in the value of the precious ux'tiils de-
pends in a great measure on the rapidity with which it is
brought aiiout " iSuf 1 apprehend the dilTerence between

1 'I'liis NtaliMiK'iii irt not Kivcn ua Htri<'liy tti'curiito. On the wliolc, tlic> ml-
vanci- i)f lociil prices in the ijohl coiinlriiK In at presi'iit (lS.')il) comiiilcriilily
niiiro thiin thin, — minii' it'iuliii); iirticlfH. iik hniiHc-rcnt, nioaf, etc., Imvinit riccn in
a fiiiiriiilil |iri>porlioii nml upwiinlti. I nih>]H thr prnporti'Mi of two to onr, be-
cause Mimify tt;j}{es Imve riwn in iiliout thin rulio. iiiiil money w;i(res, iiniler a
ileprei iiiliun of the pre('ioii> micIuIh, uiliiimiely jjovitm money prices.

" For the ({ciienil i,rTMiml .if this lUHiertion the reatlcr i« referred to .Mr. Mill's
chapters on Interimtio.ial Vh1iii'« and on .Money us an Imported Comtnoility,
in his " IVineiples c)f I'olitical Kcoiiuiny , " niuu lu Mr. Sutuwr'* tHMM^ " Oa the
Gout of Ohiaiiiinc Money."

» Arutli • rreiiuus .MelaU."

n«

266

ECONOMIC HISTORY.

Mr. M'Ciilloeh and myself arises from his attending exclu-
sively to a single class of consequences, — those, namely,
which result in the case of fixed contracts, from a deprecia-
tion of the standard. With respect to this class of efi'ects,
it is (|uite true that the evils which they involve ,vill be
increased by the rapidity of the depreciation; but as I have
shown, the new gold is producing effects quite independently
of its operation upon fixed contracts; and it is to those other
elVects that the statement 1 have just made is intended to
ai)ply. The distinction which 1 have in view will l)e best
cxemplilied by recurring to the experience of the gold coun-
tries. In these the value of gold fell l»y more than 50 per
cent in a single year, tlu^ depreciation involving a jjropor-
tional loss to creditors with a correspondinjr gain to debtors
and entailing in addition those numerous incidental evils
which always result from a sudden disturbance of social
rclati(ms. No one, however, on Ibis account, will Scay that
the sudden depreciation of gold in Australia and California
was not for these countries a great gain. The nature and
extent of that gain 1 endeavored on a former occasion to
estimate.* It consisted, as I showed, in the increased com-
mand conferred by the cheapness of their g(dd over mar-
kets in which gold prices had not ]»roportionally risen.
With every rise in the price of Australian and Califoruian
products, i»r, what comes to the same thing, with every fall
in the local value of their gold, their })ovver of jturchase in
foreign markets increased, — an increase of purchasing power
which, as we know, was immediately followed l>y a sudden
ai\d extraordinary inllux of foreign goods. Now, precisely
the same principle applies in the case of other countries. A
fall in the value of gitld will, where gold is the standard,
lead to a disturiiance in fixed contracts, with the concomi-
tant evils; but it will at the same time, as in the I'ase just
C(msidcrcd, place the countries in which it occurs in a better
position conimercially in the markets of Ihe world. Suppos-
ing, for example, a rise in prices to take place in all com-
mercial countries equivalent to that which has occurred in

» See Cairnes, p 39.

THE NEW GOLD.

2G7

1.1

II ■

California and Australia, the consocjucncc would be what I
endeavored to explain in the paper just referred to; the
export of gold from California and Australia, at least on its
present scale, would at once cease, and the world would re-
ceive instead an increased supply of agricultural and pastoral
products, aiul of (jther commodities which those countries
arc fitted to j)roduce, — a result which, I ventured to think,
would bo a gain for the world. On the other hand, suppos-
ing the rise in price to bo confmed to a single country, — say
to England, — then England would at once bo placed on a
footing of commercial e(puility with California and Austra-
lia, while as regards other coimtries she would occupy the
same vantage-ground which California and Australia now
])osscHs. She would, in short, obtain her gold at half its
present cost (for she would receive twice as much as at pres-
(Mit in return for the same expenditure of lal)or and capital),
while the gold thus obtained would be expended on foreign
commodities, of which, according to the hypothesis, the
prices had not risen. Notwithstanding, therefore, the evils
which undoubtedly attend variations in the standard of
value, more especially in an old and highly artificial com-
munity like ours, it is nevertheless, I nuiintain, for the in-
terest of every country, that, a fall in the cost of gold having
Im'cu effected, the progress of depreciation should in it be as
rapid as possiljle. Until by a depreciation of gold corres-
ponding to that which has occurred in California and Aus-
tralia, the value of that metal is brought into harmonv with
its cost, we must continue to receive fnmi those countries
little more tlian a Itarreu addition to our stock of money.
IJut with each successive step in the jjrogress of deprecia-
tion, there will be for the nation in wliieh it occurs, a nearer
api>ro!ich to the footing of connui'rcial e(puility witli the gold
countries froi i which it has l)een temporarily displaced,
while in its dealings with other places wh(>re the decline
has been less rapid, the nation so circumstanced will, during
the period of transition, enjoy a commercial superiority.
As a general conclusion, therefore, we may say that i;i
projjortion as in any country the local de}»rcciatioii of gold

•Ml

! '.J 1

268

K CON 0 MIC HIS TOR Y.

fe:

is more or loss rapid than the iivcnijro rate clsowhoro, the
cITcct of the monetary disturbance will bo for that country
beneficial or injurious.

Thi8 conclusion, I nmy in passin-r remark, throws li]trht
upon a practical iiucstion of sonic interest at the present
time, — 1 mean tin; question of introduciiifj^ a p»!d currency
into India. The measure has been advocated by Mr,
M'Culloch, on the ground that, by providing a new njarket
for tlu^ increasetl supplies of gold, its cITect would be "to
counti'ract that fall in its value which is so generally aj)pre-
heiuled."' There can be no doultt that the effect of the
measure would be wluit Mr. M't'uUoch describes; but, if
the above reasoning be sound, this circumstance, instead of
being a reason km- intnjducing gold into the currency of In-
dia, iifTords {»o Jar ax the ititcrcxts <>/ Iinlld arc concerned) a
strong reason against the ad<»pti(»n of this course. Mr.
M't.'ulloch does not state whether the elTect wliich he antici-
pates u|)on the value of gold would l)e general or local;
whether extending over ihe whole conuuercial world or con-
fined to the markets (»f India, — a point of vital importance
in d( (crmining the character of the result. If the effect were
general, — if whih; counteracting depreciation in India, it
influenced the value of gold proportionateli/ in other parts
of the world, — then it must be concede(l that the result
would l)e entirely Ijenelicial. The evils incident to a dis-
turbance of fixed contracts would be avoided, and no others
would be incurred. But this is just the point vthich I ven-
ture to deny. The adoption of gold as the monetary stand-
ard of India would certainly not afl'ect the local value of
gold in Australia and Calit'ornia; for, as I jtroved (m a for-
mer occasion, the value of gold in these countries is deter-
mined by its cost, and its cost ilepends on tlie p-oductivencss
of the gold-lu'lds. Nor, for reasons which will be hereafter
stated, would it influence more than in a slight degree the
range of gold ])riccs in England and the United States.
The operation, therefore, of the measure would be to depress

1 ! !■■■

" Encyclopedia Britannica," article " Precious Metals," p. 473.

If.

THE NEW GOLD.

269

gold prices in India, or at least to prevent them from rlsinjj;
in that tiuarter as rapidly as they otherwise would; whih; in
California and Australia, in Knjfland and the United States,
it left their course; substantially unafVeeted. Now this re-
sult would tend undoubtedly to the advanta«?o of California
and Australia, of En;;land and the Uniti'd States, l)ut, as
it seeuis to me, would as clearly be injiu'ious to India. Tho
purchasiui; power of the former countries over the markets
of India would, through the relative 8U|)eriority of their
prices, l)e increased, but tho purchasinj? i)ower of India over
their markets would, for tho o])posite reason, be diminished.
An Kn'_dish or American merchant, instead of diseharf^ing
his debts, as at present, through the medium of silver which
ho has to purchase with gold at (52J. per ounce (and may
sixm have t" purchase at a higher rate), might discharge the
same debts *ilh gold directly; and gold l)eing by hypothesis
more valualde in India than before, the same amount would
of coiu'se go farther. But an Indian purchaser of English or
American commodities would have the same sum in gold to
pay as if no change had taken place in tho currency of In-
dia; while the gold prices of his native productions being
lower, his al)ility to pay would ol course be less, it seems
to me, therefore; (and the ccjnsiderations here adduired are
entirely indi pendent of the reasons which exist on the score
of good faith, — tho Indian debt having been contracted in a
silver currency), that, viewing the matter from the side of
Indian interests, the introductiim of a gold currency into
India juust bo regarded as a measure decidedly detrimental.*

'i'i

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' RcfcrriiiR to tlic ndoption of a silvor stniiJanl by 'Ilollnnd in 1851, Mr.
M'Ciilloi'li cliiiriictorizi's it as a nu'iisuri' " in oiiiiosition to nil tiontnl principli's."
I confess I am at a loss to conji'ctiirf what sound principle was violati'cl in i)rc-
fi'rring as the standard of valnu that metal the value of wiiieli tliere was every
reas(m to helieve would be the steadier of the two. [I may say now (1K72)
that I am disposed to assign much less importance to this (inestion of a cliango
in tlie monetary staiitlard of India than I tlid when the aliove passajie was
written. The reasonin)^ assumes the possibility of a serious (liverp;enco in tlic
relative values of nold and silver; but I now believe that such a diver^ieiice is
practically out of the (juestion, the grounds for which oi)inion wdl be found
farther on \_Cairnes, p. 141 ]. This eircunistance, however, does not alTect the tlico-
retic point argued with Mr. M'CuUoch. //' the exchange of tlie existing silver

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ECOSOMIC HISTORY.

Rcdiniinfj; once moro to flic f^cncriil tiucation wo may con-
Hidcr tlic iDlldwiii}; (MdicliisiHUH as ('stalilislu'd : Ist, tlial llic
(•nVcl nl' \\w clK'niit'iiiiitr ••!" ;^i»l(l upon conuiiciTial ctiiintrit's
Itciii^ to ('oiupol llu'in to cularjrt' tlicir metallic (Mincncits,
for which ciilar^'cnicnt they must pay hy an export ol' their
j)ro<liictions, ciich c(Uintry will enilure a loss upon this head
to the extent ol" the additional sum which may he reipiisite
for each; and -dly, that while there will he a fjjeneral loss
from this eaiisc, yet the profiress ol' depreciation over the
world not licinir uniform or sinmltancous, thi> primary lost)
may, throuji'h the disttirliancc in intcruat iomil values thence
arisintr in particular cases, he compensated or even con-
verted into ii positive irain; the loss w jrain upon the dis-
turbance hcinir determined accfirdinir as tlu rise of prices in
any country is in advance or in arrear of tlie <rcneral avcraire.
To ascertain, therefore, the effect of the movement upon any
particular nation, we must consider the manner in which,
in its case, these two principles will operate.

With I'espcot to the first, I am aware that, in spenkiiiL'' of
the loss imposed on a country hy the necessity of eiilaruinjf
its eurreney, — hy the necessity of reccivinj;' and keepintr
increased supplies of <rold and silver, — 1 am usiiiir lani^iiatre
which, notwithstandinu; what was said on a f(wmcr occnsion
in its just ilical ion, and not withstandiiiir that it is mcndy in
strict conformity with the most (dementary priiu-iplcs of
economic science, will still afipear paradoxical to niiiny. I
would, therefore, heforc proceedin<r farther with this hrandi
of tlu' arsrument, ask tli(> reader to consider the east; of a
private mercliunt who is compelled to increase the stock of
cash with which he carries on his husiness. The metallic
circiil.it ion of a country performs in relation to the com-
munity functions jireciscly analogous to those which arc dis-

fnr a p.oh\ stiiinliird in India wore enlcnlafcil to produop the offocts Mr. MTiil-
lofli t'xpi'ctiMl from it, tlu' ini'asiire, it si ill scfins to nic, would Itc opt'ii to Hit-
ol>ji'ctions I have iirfrcd nj;ainsl it. Hut I do not liclicvc tliat tlie I'ffi'cts in
question woidd result ; and I enn well eoneeivo tlmt, liaviiij; rojiiird to tlio
general convenience of coniiiUToe, tiie change iiiiglil, on tiie wiiole, be
advantageous.]

t! ■'■■

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THE NKW COLD.

271

clinrtrpd for a moroliiint liy hii* cuhIi rosorvo. Tf n morchnnt
Oiia HiilVIy (lispciisc with a p(»rtioii (tf liis rc-idy ciisli, he is
(Mml»I('(|, with the money thus lilu'riitcd, citlicr to iidd to liiH
productive! I'lipitiil or to iiu'roiiHo his piivatc cxpciiditiiiT.
On the other hand, if he finds it necessary to increase iiis
reserve of cash, his productive capital ninst he proportionally
encroa»die(| upon, or his private expenditure pioportioiuilly
curtailed. And preciscdy the same niay Ite said of the cur-
rency of a nation, Wheie a country does not itself yi(dd
g(dd or silvei', ' i'vrvy increase of its metalli(! circulation
nuist he obtained — can only he obtained — hy parti njf with
certain (dements of real wealth, — (dements which, liut for
this necessity, niiuht lie made conducive to its w(dl-iieinj;.
it is in enahlini^ a nuti(m to reduce within the narrowest
limits this unproductive portion of its stock that the (diief
advantai;e of a ^ood Itankin^ system consists; and if tiie
augmentation of the metaHi(! eurreiu-y of a coimtry lie not
an evil, then it is dilliciilt to see in what way the institution
of hanks is a j^ood. In regarding?, therefore, tlie necessity
imposed u|ion commendal countries of enlar^injr their metal-
lic currencies as injurious to their interests, I make no as-
sumption whi(di is not in perfect keepinur with the hest
known and most jj;enerally reooj^iii/.ed facts of commercial
exporience.

An increase in the metallic cnrrency of a country, tluni,
heinij; an evil, let us consider what the circumstances are liy
whi(d» the au'i'inentalion rendered necessary liy the {^old
discoveries will lie determined. This, it is evident, will
principally depend — the amount of liusiuess to he carried on
hein<^ jjiven — on the extent to whitdi siihstitutes for metal-
lic money are in use; in other words, on the de<rree of
peil'ection whicli the hankini; system of each country lias
attained. To illustrate this, let us suppose a <riven sum of
metallic money, say a million stiTliii^'', to he introduced

' Kvon wlicrc it docs yield tlicso iiv.'tnli<, the tu'('(\«sity of nuirinonting tlio
ourri'iicy is not tlio less nn pvii, since the ojii^nition will ncciipy, with no rcswlt
liiit that of iivoidinK nil iiiconvi'iiii'nco, a portion of the liilior iitid <'npitnl of
till.' country, wliicli, but for this, might hiive contributed to its iiosilivo welfare.

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272

ECONOMIC HISTORY.

into two countries in which the currencies are differently
constituted, — for example, into England and India. In
India coin is the principal medium of circulation^ — in
many parts the only one, and consequently a million sterling
introduced into the currency of India would represent only
an equal, or little more than an equal, addition to its total
medium of circulation, — to the whole monetary machinery
by which the exchange of commodities is effected and prices
maintained. But in England, where the currency is differ-
ently constituted, the result would be different. The great
bulk of the circulating medium of this country consists of

1 [The reader will bear in mind that this was written in 1859. The state of
the Indian currency at that time may be gathered from the following extracts
from a paper on " The Trade and Commerce of India," read before the British
Association in 1850.] " Intimately connected with Indian trade and commerce
is a sound system of banking. At present there are only three banks of impor-
tance in India, — the banks of Bengal, Bombay, and Madras. These have no
branches, the absence of which constitutes one of the main defects of tlie sys-
tem. The fev other banks in India do not issue notcS; and employ their capi-
tal in makinf, advances on bills of lading, in exchange operations, and in some
instances in loans to members of the Service, at high rates of interest ; but
afford no banking facilities for conducting the internal tra<le of the country."
The writer then refers to a table, showing the state of the three loading banks
(Bengal, Bombay, and Madras) in the preceding June, from which it appears
that the bullion at that time in the coffers of the banks was in excess of the
notes in circulation, the amount of these latter being, for the whole of India,
£2,241,471, or about one-te'i"i of the amount issued by the Bank of England
alone; while the total amount of "accounts current" was only .£1,855,000, —
aboJt one-sixth of those held by some of the private banks of London, and not
one-fifteenth of those of the Bank of I-^ngland. The total amount of commer-
cial bills discounted in these three leading banks of India is set down at £278,-
ftOO! " And this," it is observed, " in a country where the gross annual revenue
is .£34,000,000 ; the export trade, on an average of the last five years, £24,000-
000; the import trade, on the same average, £23,000,000, witli an internal trade
to an extent almost impossible to estimate." (" The Trade and Commerce of
India," by J. T. Mackenzie, reail before the British Association, 1859, pp. 15,
16.) In tlic' evidence taken before the late Committee " On Colonization and
Settlement in India," Mr. Alexander Forbes, when questioned with reference to
the large absorption of silver in India, expressed his opinion that the silver was
all required for current coin. " It lias often been said that the natives hoard
silver. Now my experience is that they do not hoard silver; tliey hoard gold;
and that the silver is actually required for the commerce of the country." And
this he traces (Answers 2,222,2,223,2,372-80) to the want of banking accom-
modation and the imperfect means of communication generally in the country.
See also the evidence of Mr. Mangles (Answers 1,025-1,633).

THE NEW GOLD.

273

certain forms of credit; and the amount of these credit
media standing in a certain large proportion to the coin in
the country, the effect of introducing a million sterling into
our currency would be to increase the medium of circulation
by an amount very much greater than that of the added coin.
Let us consider for a moment what becomes of a sum of coin
or bullion received into England. I do not now speak of
that moving mass of metal which passes (so to speak) through
the currency of the country, — which, received to-day into
the vaults of the Bank of England, is withdrawn to-morrow
for foreign remittance, — but of gold which is permanently
retained to meet our genuine monetary requirements. Of
such gold a portion, greater or less, according to circum-
stances, will always lind its way into the channels of retail
trade ; and so far as it follows this course, its effect in aug-
menting the circulation will be, as in India, only to the
extent of its actual amount. But a portion will also be
received into the banks of the country, where, either in the
form of coin, or of notes issued against coin, it will consti-
tute an addition to their cash reserves. The disposable cash
of the banks being thus increased, an increase of credit
operations throughout the country would in due time follow.
The new coin would become the foundation of new credit
advances, against which new checks would be drawn, and new
bills of exchange put in circulation, and the result would be
an expansion of the whole circulating medium greatly in
excess of the sum of coin by which the new media were
supported. Now, credit, whatever be the form which it
assumes, so long as it is credit, will operate in purchases,
and affect prices in precisely the same way as if it were
actually the coin which it represents. So far forth, there-
fore, as the new money enables the country to support an
increase of such credit media, — to support them, I mean, by
cash payments, — so far it extends the means of sustaining
gold prices in the country; and this extension of the cir-
culating medium being much greater than in proportion to
the amount of added coin, the means of sustaining gold
prices will be in the same degree increased. Thus, suppos-

274

ECONOMIC HISTORY.

'* , , s ra

ing the ratio of the credit to the coin circulation of the
country to be as four to one (and the proportion is greatly in
excess of this), the addition of one million sterling of coin
would be equivalent to an increase in the aggregate circula-
tion of four millions sterling,^ and one million sterling of
gold would consequently, in England, for a given extent of
business, support the same advance in gold prices as four
times that amount in India. It follows from these consid-
erations, that in order to raise prices throughout a given
range of transactions to any required level, the quantity of-
metallic money which will be necessary will vary in differ-
ent countries, according to the constitution of their curren-
cies; the requirements of each increasing generally in an
inverse ratio with the efficiency of its banking institutions.

We may thus see how very unequal will be the operation
of the gold discoveries with respect to commercial com-
munities. The reduction in the cost of gold to which they
have led has, as we have seen, produced in the gold countries
a twofold rise of gold prices ; and supposing the present con-
ditions of raising gold to continue, the same cause must
ultimately lead to the same result throughout the world,
imposing upon each country the necessity of so enlarging
its currency as to admit of this advance. But we have
seen that the quantity requisite for this purpose varies ac-
cording to the monetary status of the country for which it is
required ; and inasmuch as the new money must be paid for
by commodities, the abstraction of commodities, and there-
fore the loss of the means of well-being, to which each coun-
try must submit, will vary with the same circumstance. On

1 Strictly speaking, this conclusion would not follow on the above supposi-
tion, the efflciency of different forms of credit in performing the work of circu-
lation being (as pointed out by Mr. Mill, " Principles of Political Economy,"
vol. ii., pp. 58-01) different, and only some of them being in this respect equal
to coin. But such distinctions do not affect the general truth of the principle
contended for in the text, that the necessity for coin varies inversely with the
use of credit. Besides, as I intimated, the proportion of credit to coin in our
circulation is much greater than I have assumed ; and a million of coin taken
into our currency would really be equivalent to more than four millions added
to a purely metallic one.

THE NEW GOLD.

275

the supposition, therefore, on which we are arguing, the
quantity of new money which England would require would
he, when compared with the extent of her business, ex-
tremely small, and her loss of real wealth small proportion-
ally. The same would be true of the United States, where
credit institutions have also attained a high degree of
efficiency, and whose paper consequently forms a large pro-
portion of the whole circulation. In France, the use of
credit being more restricted, the requirements for coin
would be greater, and consequently also the loss of consum-
able commodities; while in India and China, and indeed in
Asiatic communities generally, the circulating medium be-
ing almost purely metallic, the requirements for coin would,
in proportion to the business in which it was employed,
attain their maximum, with a corresponding maximum of
loss in the elements of well-being.^

The operation of this principle is indeed, in the actual
circumstances of the world, in some degree concealed by the
complex conditions under which it comes into plu,y. Thus
Great Britain and the United States, instead of obtaining
the smallest shares, receive in the first instance nearly the
whole of the new gold. On the other hand, the quantity
which goes to India and China from the gold countries is
comparatively trifling ;2 and although a large drain of treas-
ure has set in thither from Europe, yet this consists chieHy
of silver. If, however, passing by the accidents of the

* It is curious to observe the contradictions in which persons are involved
who, still under tlie intiiience of the mercantile theory of wealth (and there are
few even among professed economists who are free from its intluence), are
nevertheless sensible from experience of the advantages of a system witli which
it is incompatible. Thus several witnesses l)oforn tiie late Committee on Indian
Colonization refer to the large influx of silver into India in recent years as a sure
indication of tiie increasing prosperity of that co. .itry ; yet, almost in the same
breatli, they speak of the deficiency of banking accoiinnodation as among its
most pressing wants. Now, it is certain tiiat, just in proportion as hanking ac-
commodation is extended, tiie absorption of silver by India will decline; whence
it would follow, if the reasoning of the witnesses be sound, that the effect of
the extension of banks would bo to check the growing prosperity of the coun-
try. See " Minutes of Evidence," Questions 1,625-1,0:!:!; 2,221-2,223.

2 This order in the diffusion of the new gold has not been sustained. See
ante, p. 252, note.

■'a

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276

ECONOMIC HISTORY.

%'A

movement, we attend to its essentials wc shall find that the
results are entirely conformable to the principle I have en-
deavored to describe. For though the bulk of the new gold
comes in the first instance to England and the United States,

— determined thither by the course of international demand,

— yet England and the United States do not form its ulti-
mate destination. The monetary requirements of these coun-
tries being easily satisfied, the mass of the metal on reaching
these markets becomes immediately disposable for foreign
purchases, by which means the United States and England are
enabled to transfer to other countries this uni)rofitable stock,
the commodities with which in the first instance they parted
being replaced by others which they more require. So also,
altliough the jnetallic drain to the East is composed princi-
pally of silver, the efilux, at least in its present proportions,
is not the less certainly the consequence of the increased pro-
duction of gold, for the silver of which it consists has been
displaced from the currencies of Europe and America by the
gold of Australia and California ; and the drain to the East is
only not a golden one, because silver alone is in that region
the recognized standard. As the final result of the whole
movement, we find that, while the metallic systems of Eng-
land and the United States are receiving but small perma-
nent accessions, those of India and China arc absorbing
enormous supplies. The former countries, though the first
recipients of the treasure, yet, not requiring it for domestic
purposes, arc enabled to shift the burden to others, whose
real wealth they command in exchange, while the latter,
requiring what they receive, are compelled to retain it.
Having parted with their commodities for the new money,
they are unable afterwards to replace them. As their stock
of coin increases, their means of well-being decline, and
they become the permanent victims of the monetary
disturbance.

But, secondly, we conclude that the loss of real wealth
resulting from the augmentation of their currencies would
in particular countries be compensated, and might in some
bo even converted into positive gain, by the disturbance

^ih

THE NEW GOLD.

277

which, during the period of transition, would take place in
international values. As has been already remarked, a
general rise of prices in all countries, if simultaneous and
uniform, since it leaves the pro{)ortions in which commod-
ities are exchanged undisturbed, leads to no change in inter-
national values, and produces no effect upon national inter-
ests. But where prices rise unequally, international values,
and til rough these, national interests are affected. Wo have
therefore to consider how far, in the actual circumstances of
the world, a rise of prices in particular countries, unaccom-
panied by a corresponding advance in others, is possible.,
and, in so far as it is possible, in what order the several
changes may be expected to occur.

As regards the question of possibility, this is placed be-
yond controversy by the example of California and Austra-
lia. It is a matter of fact that prices in those regions have
advanced in a twofold proportion, while no corresponding
rise of prices has occurred throughout the world. The cir-
cumstances, however, of the gold countries will probably be
thought of too exceptional a character to form the basis of
any general conclusion ; and it will therefore be desirable to
advert for a moment to the causes which produced in Cali-
fornia and Australia that local elevation of price, with a
view to consider how far the same conditions are capable of
being realized elsewhere.

These causes, as was formerly shown, ^ Avere the special
facilities for producing gold enjoyed by California and Aus-
tralia, combined with the limited range of their domestic
transactions. The sudden cheapening of gold, involving a
corresponding increase in money earnings, placed an extra-
ordinary premium on the production of the metal, while the
limited range of their domestic trade rendered the necessary
enlargement of their monetary systems an easy task. On
the other hand, the immense extent of the aggregate com-
merce of the world required, in order to secure a similar
advance, a proportional increase in its aggregate stock of

'"li

■■'li

1 See Cairnes, pp. 26, 26.

278

ECONOMIC HISTORY.

:!;!!

money, an augmentation which could only bo accomplished
after the lapse of a considerable time. Prices therefore rose
rapidly in the gold countries, while over the area of general
commerce the rise had been but slow.

Such being the circumstances which produced the local
divergence of prices to which I have called attention, it will
at once be seen that of the two conditions which I have
stated, the latter — the necessary enlargement of the local
currency — may in most countries, though not in all at the
same time, be ful tilled, if not with the same rapidity as in
Australia and California, still after no very long delay. It
has been computed,^ for example, that the total quantity
of gold coin circulating in Great Britain amounts to
£75,000,000 sterling. Assuming this to be correct, it
would follow (all other conditions being sujjposcd identical)
that an addition of £75,000,000 would be sullicicnt to effect
an elevation of our local prices equivalent to that which has
occurred in Australia. Now at the present rate of produc-
tion, the quantity of gold which arrives annually in Great
Britain cannot fall much short of X30, 000,000 sterling;^ so
that were we merely to retain all that we receive, we should
at the end of two years and a half be in a position, so far as
the augmentation of our currency is concerned, to maintain
the same advance in price as has occurred in the gold coun-
tries. If, then, prices in Great Britain have not risen in
the same degree, the result, it is evident, cannot be due to
the dilificulty of procuring the supply of gold necessary
for the enlargement of our currency. It remains, therefore,
to be considered how far those special facilities for procuring
gold which have operated in the gold countries may come
into play in other parts of the world.

The extraordinary facilities for procuring gold enjoyed

' " History of Prices," vol. vi., App. xxii. Tliis also is Mr. M'Culloch's es-
timate : " Enuyclopaedia Britanniua," article " I'recious Metals," p. 466. [It
will be borne in mind that these estimates apply to tiie period immediately
preceding the first publication of these Essays (1859-00).]

2 [.£20,000,000 would have been nearer the mark, but at the time this paper
was written no trustworthy statistics of gold imports existed. Either amount,
however, answers equally well the purpose of the argument (1872).]

THE NEW GOLD.

279

by Australia and California depend, of course, on the posses-
sion of their gold mines; and this being so, it might seem
us if all countries, not being like them auriferous, were by
the nature of the case precluded from fulfilling this condition
of the problem; but this by no means necessarily follows,
us will be evident if we reflect that there are other modes of
obtaining gold than by direct production, of which modes
the elliciency enjoyed by different countries differs almost
as much as the degrees of fertility in different gold mines.
Where countries do not themselves produce gold, the mode
by which they obtain it is through their foreign trade.
Now, it is a fact well known to economists^ that, with refer-
ence to the cost of commodities the terms on which foreign
trade is carried on differ greatly in different countries, the
labor of some going much farther in commanding foreign
productions than that of others. According, however, to
the conditions on which foreign productions generally are
obtainable, will be those on which gold may be obtained.
If a country possess special facilities for supplying markets
where gold can be given in exchange, it will obtain its gold
more cheaply, at a less sacrifice of labor and capital, than
countries which do not share these facilities; and among
such countries it will therefore occupy precisely the same
position as an auriferous country whose mines are of more
than the usual richness among the countries which yield
gold. It is thus possible for a non-auriferous, no less than
for an auriferous country, to possess exceptional facilities in
the means of procuring gold, and therefore to fulfil the sec-
ond of the conditions by which a divergence of local prices
from the ordinary level of the world may be effected.

No'.v it appears to me there arc two countries which pos-
sess in an eminent degree the qualifications i-ecpiisite for
attaining this result, 1 mean Great Britain and the United
States, the former, as being par excellence the great manu-
facturer among civilized nations, — the manufacturer more

1 See Ricardo's " Works," chap, vii., on Foreign Trade. Mill's " Principles
of Political Economy," chaps, xvii., xix. Also, Senior's Essay, " On the Cost
of Obtaining Money."

■'ii

■I

^h 51

i:d

< 'A

\'4

I" 4

— •'■'-nirTi-i7i"rTT»™ rrTrrmiitr

280

ECONOMIC HISTORY.

^j^y

;t H;

particularly of descriptions of goods, — as cotton, woollen,
linen, and iron, which enter largely into the consumption of
the classes by whom chiefly the gold countries are peo[»led ;
and the latter, as the principal producer of raw material, as
well as of certain commodities, — as grain, tobacco, sugar,
and rice, — which are also largely consumed by the same
classes. In tliesc circumstances Great Britain and the United
States enjoy peculiar advantages in the miirkots of the gold
countries, and these advantages are extended and confirmed
by other important incidents of their position. Thus they
possi!Ss the greatest mercantile marine in the world, by which
they are enabled to give the fullest 8co[)e to their manufac-
turing and agricultural superiority, while by race, language,
and religion they arc intimately connected with the i)roduc-
ers of the new gold, — a connection from which spring ties,
moral, social, and political, to strengthen and secure those
which commerce creates. Great Britain and the United
States thus possess in their foreign trade a rich minc,^
worked by their manufacturers, planters, and farmers, tended
by their mercantile marine, and protected by their naval
power, — a mine by means of which they are enabled to ob-
tain their gold on terms more favorable than other nations.
The effect of this in ordinary times is shown by a scale of
money rates, wages, salaries, and incomes, permanently
higher than that which elsewhere prevails ; but in times of
monetary disturbance like the present, when the cost of
gold having been reduced its value is falling, these advan-
tages, it seems to me, must tell, as analogous advantages
have told in the gold countries, in a more rapid realization
of the results which are in store, — in a quicker ascent
towards that higher level of prices and income which the
cheapened cost of gold is destined ultimately to produce.

There is reason, therefore, on considerations of theory, to
expect a repetition in England and America of that phe-

1 The mine worked by England is the general market of the world ; the
miners are those who produce those commodities by the exportation of which
the precious metals are obtained. — Senior's Essay " On the Cost of Obtaining
Money," p. 16.

THE NEW GOLD.

281

iiomcuou which has been alre.idy exhibited in Australia and
California, — a diver<i;cncc of local money-rates from the
average level of surrounding countries. On a future occa-
sion I shall endeavor to ascertain how fur, in the case of
Oreat Britain, these a priori conclusions arc sui)ported by
facts, — how far prices and incomes have here, under the
influence of the gold discoveries, outstrij)ped the correspond-
ing movement in other countries.' Having settled this
point, we shall be in a position to form a general estimate of
the benefit which may thence accrue to us. Meanwhile,
however, I nuiy in conclusion point out the mode in which
the advantages incident to the monetary position wc shall
occupy arc likely to be realized.

And here it may be well to call the reader's attention to
the distinction, sometimes overlooked, between a fall in the
value of gold and a rise in the price of commodities. A rise
in the price of commodities if general, implies commonly a
fall in the value of money; but, according to the ordinary
use of language, alike by economists and common speech,
money would, I apprehend, in certain circumstances, be said
to have fallen in value, even though the prices of large
classes of commodities remain unatt'ected. For example,
supposing improvements to have been effected in some
branch of production resulting in a diminished cost of the
commodity, the value of money remaining the same, prices
would fall ; if imder such circumstances prices did not fall,
that could only l)e because money had not remained the
same, but had fallen in value. TJic continuance of prices
unaltered would, therefore, under such circumstances, amount
to proof of a fall in the value of gold. Now, when in con-
nection with this consideration, we take account of the fact

111* *

' [Some evidence on the point will be found in the Appendix (see Cairnes) ;
but the inquiry here contemplated was never carried into effect. A very inter-
esting and carefully prepared paper on the subject, however, was read some
years later by my friend Professor Jevons, before the London Statistical Society,
when I had the satisfaction to find that the results of his entirely independent
investigations to a very large extent corroborated the conclusions at which I
had arrived, mainly by way of deduction from the general principles of the
science]

. ^1

> 'in

!<*r' :

liM,'.5:r

,ir

p: Villi

282

ECONOMIC HISTORY.

tliat over the j^roater portion of tlio field of British industry
inij)rovc'mcnt is constantly taking plac(!, it is obvious that
tlio nicro movements of ])rice8 hero, taken without reference
to tlie conditions of production, arc no sure critcron of
changes in the vahie of gold.

The truth is, in a large class of commodities, in all those
to which mechanical or chemical inventions are extensively
applicable, even on the supposition of a very great deprecia-
tion of gold, no considerable advance in price is probable.
Gold, for example, might have fallen since the beginning of
the present century to the extent of 75 per cent, that is to
say, four sovereigns now might be e(pial to no mcn-e than
one sovereign at the commencement of the period, and yet
in a large class of manufactured goods no advance in price
would be ajiparent, the reduction in the cost of production
being in more than an equal proportion. In ordinary times
agricultural operations escape in u great degree the influence
of industrial progress ; but within the last ten years, that is
to say, since the repeal of the Corn Laws, which nearly
synchronized with the gold discoveries, — the spirit of im-
provement has been as busy in agriculture as in any other
department of industry, and in conjunction with importa-
tions from foreign countries has acted, and must for some
time at least continue to act powerfully upon the price of raw
products in this country.

The depreciation of gold, therefore, may be realized cither
in a corresponding advance of prices, or in the neutraliza-
tion of a fall which, in the absence of depreciation, would
have occurred ; but in whatever form it may come to us, our
gain or loss as a nation will be the same, and will depend
upon the condition I have stated, — the more or less rapid
depreciation of our currency as compared with the curren-
cies (convertible, like ours, into gold) of other countries.
Whether, the conditions of production remaining unaltered,
the depreciation be indicated by a corresponding advance of
prices, or, those conditions undergoing improvement, the
fall in the value of gold merely operates in neutralizing, as
regards price, the effects of the cheapened cost of commodi-

THE NEW GOLD.

283

tics, — in cither case the (/old price of the products of .English
I'lfior and ahtttincnce will rine. A given exertion of English
industry will reap a larger r/old reward than before; and
fiirt'ign commodities not rising in price in the same degree,
the larger gold reward will indicate, over so much of our
expenditure as is directed to foreijn productions, a real aug-
nientation of well-being. As regards that portion of our
expenditure which falls upim the products of our own indus-
tiT, individuals and classes will, according to cireum-
Btanecs,^ be benefited or injured by the change; but as a
nation, we shall neither gain nor lose, since here the in-
creased cheapness of gold will be exactly neutralized, either
by a corresponding advance in price, or by the j)revention in
the same degree of a fall which would otherwise have taken
place. It is in this way, by the increased command which
she obtains over foreign markets by her cheap gold, — and
not, as is commonly supposed, by finding an outlet for her
wa: . . in California and Australia, that England will benefit
by the gold discoveries. That outlet for her productions, —
were the movement to stop here, — however it might benefit
indiviiluals, would for the country at large bo an injury and
not a boon ; it Avould deprive her of that which might con-
duce to her comfort and happiness, and would give her a
" breed of barren metal " in exchange. But the movement
does not stop hero. The money which she obtains from the
gold countries, instead of absorbing, like India or China, she
employs in purchasing the goods of other nations. It is in
the enlarged command which she acquires over such goods
that her gain consists, and it is thus that she indemnifies
herself, though at the expense of the nations who ultimately
i^etain the new gold for the loss, the indubitable loss, which
she is called on in the first instance to sustain.

,4"!l

iii!

.»^:

' On this point see Cairnes, p. 147, et seq.

284

ECONOMIC HISTORY.

XI.

FRANCE SOUS LE SECOND EMPIRE,

«i

* !

From Levasseur's IIistoire des Classes Ouvuieres en France
DEPUis 1789, jusqu'a nos jouks.^ Vol. ii. pp. 307-321.

T^EPUIS qiiinzc ans, trois grand faits (jconomiques ont
-'--' exercd eu Fi-ance unc influence considerable sur la
production manufacturiere ; le ddvcloppemcnt du crddit, la
multiplication des cliemins de fer ct la rdformc douaniere.

11 cntrait dans les vues du gouvcrnement de provoquer
I'esprit d'cntrcprise. L'annde 1852 vit se former deux dtab-
lissemcnts d'une nature tres-diverse, mais qui tons deux de-
vaient concourir au memo but, celui de fournir des capitaux
au travail : Ic Credit foncier, et le Credit mobilier.

Le premier, depuis longtemps rdclam^ par M. Wolowski,
se proposait do vcnir en aide a I'agriculture en avan^ant sur
premiere hypotheque .^ la propridt(3 fonciere des sommes rem-
boursablos par annuitds ; en r<;alitd, Ics prets agricoles, qui
augmentent aujourd'hui, ont ^i6 les plus lents ^ se d^velopper,
et la nature de sa clientele I'a fait servir plus a la construc-
tion des maisons et aux travaux publics dans les communes
qu'a la culture proprement dite : a ce titre, il appartient a
riiistoirc de I'industrie. Le second, crdd et dirig^ par M. E.
Pdreirc, est uno puissante banque de commandite et de sp<ic-
ulation, non sans analogic avcc celles que recommcndait le
saint-simonisme. II <;tait destind par ses statuts a fonder on
&, soutcnir de grandes entreprises, et il a, en effet, donnd nais-
sance aux cliemins de fer du Midi, ^ la compagnie immobiliere
de Paris, au gaz de Marseille, aux paquebots transatlantiques ;
il devait etre, en raison meme de son caractere, tres-vivement

1 Paris : Libraire de L. Hachette et Cie, 1867.

mm».

FRANCE SOUS LE SECOND EMPIRE.

285

affectd par toutes les influences de hausse et de baisse, et sa
fortune d(jpendait eutiercment de I'habileti? de ses directeurs.

La Banque de France, dont le gouvernemcnt avait le droit
de suspendre le privilege en 1855, fut affranchie de cette
crainte et autorisde c\ faire dcs avanccs sur depot d'actions ct
d'obligations de cliemin de fer : ^ la speculation en usa large-
ment. Quelques ann<;es apres, la Banque obtenait par une
loi la prorogation de son privilege jusqu'en 1897, aux prix de
100 millions pretds h, I'liltat et fournis par une draission de
nouvclles actions; la Banque pouvait dlever le taux de son
escompte au-dcssus de 6 pour 100, et le gouvernoment pouvait
exiger, dix ans aprfis la promulgation de la loi, qu'cllo eut au
moins une succursalc par d<jpartement.2

" Les operations de la Banque se sont consid(jrablement
am(jliordes," disait le gouvcrneur, en parlant dc la situation en
1852 ; " le commerce et I'industrie ont rcpris leur essor." En
effet, le montant des operations s'(;tait dlev^ d'un milliard et
demi, chiffre de 1851, ;\ deux milliards et dcmi. Le produit
des impots indirects s'^tait notablement accru ; la rente avait
d^passd le pair ; toutes les valeurs dc bourse avaient 6t6 em-
portdes dans le meme mouvement, et les marchandises, sous
la triple impulsion de I'abondance de I'or, d'une consommation
plus active, et d'une speculation audacieuse, encbdrissaicnt
chaque jour.

Ce fut I'age d'or de la Bourse. Londres, qui avait etd
dcpuis le commencement du siecle le principal marchd des
capitaux ct des grandes entreprises en Europe, cdda le pas ^
Paris. L'eian dtait tel qu'il permit au commerce de franchir
le cholera, la disette, la guerre d'Orient, et ii I'Etat d'emprun-
tcr un milliard et demi sans briser le 'ossort du credit. Les
capitaux, 5, peine forrnds, dtaient absorbes ; les travaux pub-
lics, les emprunts, la disette ellc-meme, tout y contribuait ;
on spdculait ^ la hausse, ct les cours s'dlevaient.

Cependant les affaires dtaient devcnucs plus difficiles en
1856 : le gouvernemcnt crut utile d'enrayer lui-mcmc la sjkj-
culation^ et de faire une loi restrictive sur les socidtds en com-

■ -,&
• '< 'i

^ Ddcret du 28 mars, 1852.

' Voir au Mon., la note du 0 mars, 1850.

« Loi du 9 juin, 1867.

286

ECONOMIC HISTORY.

M-

mandite par actions.^ La langueur continua cependant en
1857, et I'abondance de la r<5colto rendait inevitable la baisse
des denrdes, lorsque, vers le mois d'aout, la crise dclata avec
violence aux Etats-Unis. EUe se corarauniqua I'apidement ^
Londres, h Hambourg, h Paris. Quoique moins rudcment
dprouvde que ses voisines, la France vit, comme elles, les
sources du credit tarir ; la sp(3Culation dut liquider, et I'ann^e
1858 fut marquee par une baisse g<3n<)rale des marcbandiscs^
et par un ralcntissement des transactions.

La guerre d'ltalie qui survint I'ann^e suivante, et ses con-
sequences qui se firent scntir jusqu'cn 18G2, empecherent les
affaires de reprendre leur essor jusqu'au jour oix le combat
d'Aspromonte fit croire a la consolidation du trone de Yictor-
Emmanuel. Les cours se releverent alors, et I'csprit d'entre-
prisc se ranima. Mais une autre cause do malaise pesait
deja sur le marchd : la guerre d'Amdrique privait I'Europe
de coton ct rdduisait a la misere les districts manufacturiers
de I'Angleterre et de la France. Une crise mondtairc s'en-
suivit; en 1864, I'escompte de la Banque de France monta
k 8 pour 100,^ et le gouvernement, sollicitd par une petition
do trois cents ndgociants et par une contrepdtition de la
Banque, ordonna une enquete sur le regime du credit. Cette
crise s'apaisait a son tour, lorsque (iclata la guerre du Dane-
mark, puis la guerre d'Allemagne. Les agitations de la po-
litique, dans le vieux et dans le nouveau monde, contrarient
frdqucmmont, dcpuis dix ans, le ddploiemcnt pacifique des
forces du travail marchant a la conqucte de la matiere.

Une villc a particuliercmcnt souffcrt, et souffre aujourd'hui
plus que les autrcs, de la langueur des affaires dont se plaint
Ic commerce. Cost Lvon, dont la nombreuse population
ouvriere, dependant presque tout cntiere, pour sa subsistance,
d'unc seule industrie de luxe, est toujours la premiere h
s'affaisser sous le coup des crises et la dernierc a se relever.

' Loi du 17 jiiillft, 1850. II sVtait form;-, on 1852, 21 socict(?s de ce genre ;
en 1853, 25 ; en 1851, :](> ; on 1855, 18 ; en 1850, 17. II s'en forma, en 1867, 6 ;
13 en 1858, et 12 en 1859.

^ Voir, sur cette crise, la Question de I'or, par E. Levasscur.

^ Au niuis de niai.

FRANCE SOUS LE SECOND EMPIRE.

287

Elle avait d^veloppd ses relations extdrieurcs; la guerre
d'Amdrique lui a dtd funeste; de 84 millions en 1858, I'ex-
portation de la soierie est tombde h 11 millions en 1865.^ Le
n:e'lleur remedo pour elle serait, k cotd de son industrie de
luxe, souraise aux caprices de la mode et aux variations de
la fortune, la creation d'une industrie commune ayant un
large ddbouchd.

Ndanmolns, malgr<? les obstacles, le travail a brillamment
deploy<5 ses forces.^ La Banque de France, dont les cscomptes,
a Paris, avaient une seule fois atteint 1,329 millions, sous le
regne de Louis-Philippe, atteignit de nouveau et depassa ce
chiffre en 1856; en 1865, elle faisait 2,458 millions. Elle
etait alors dcvenuc la seule banque d'dmission et la rdgula-
trice souveraine du credit en France ; les operations de ses
succursales, jointes au chiffre des affaires de Paris, formaient,
h la mOme dpoque, un total de 7,422 millions, tandis qu'en
1847 les banques d<;partementales et la Banque de France
n'atteignaient que 2,075 millions. Dans le memo temps, sans
que le commerce des banques privdcs parut diminuer,'' se fon-
daient d'autres grands <jtablissements, comme la Socidtd gcnd-
rale de credit industriel et commercial,* la Socidtd de dcpOts
et do comptes courants,^ la Socidtd gdndralo pour favoriser
le commerce et I'industrie en France.^ L'usage des cheques,
antromont dit I'habitude de ddposer en banque ses fonds de
caisso et de faire ses paiements en mandats, commence, quoique
trop lenteraent, h se naturaliser en France et h mcttre une plus
graudc masse de capitaux h la disposition du credit.

Parmi les entreprises qui devaient obtenir la favour, les
chemins de fer dtaient au premier rang. On avait souvent
reprochd a la France dc s'ctrc laissd devancer par ses voisins,
et I'activitd imprimde aux constructions durant la scconde
moitid du regno de Louis-Philippe par la loi de 1842, s'dtait

'•'Jj

cir

1 Lettre de M. Aries Diifour a I'Opininn nntionale du 18 octobre, 1866.

2 Le progrcs des impots indirccts, qui a continue en 18Rrt, est, avec le progrfes
du comnieree exte'rieur, une preuve que la sitimtion, considtTco dans son ensem-
ble, n'a pas empird depuis un an, malgre la langueur des affaires dans direrses
industries.

' On pre'tend toutefois qu'il n'augmente pas. * 7 inai, 1859.

« 6 juillet, 1863. « 4 mai, 1864.

288

ECONOMIC HISTORY.

amortie sous la R^publique. Le nouveau gouvernement la
ranima.^ Lcs capitaux dtaiont confiants. On en profita pour
inaugurer un autre mode de concession. A la construction
de la voie par I'fitat, on substitua la construction par les
compaguies que Ton encouragea par une longue jouissance ;
les baux, avec les nouvelles compagnies et meme avec les
ancienncs, furent la plupart pass^ss ou revisds pour quatre-
vingt-dix-neuf ans.^ On engageait sans doute un plus loin-
tain avenir; mais on faisait immddiatement pescr toute la
charge sur les capitaux appelds k recueillir les bdndfices les
plus directs de Tentrcprise ; la combinaison dtait dvidcmment
prdfdrable. Elle n'cut pas dtd possible dix ans plus tot.

Les concessions multiples, cr(jant des int(jrets divers et
parfois hostiles sur un meme parcours, dtaient un obstacle ^
la circulation. On lcs r<3unit, de manicre a former de vastes
compagnies qui se partagerent le domaine du rdscau f ranqais :
ce ne fut pas sans quelques tatonnements qui fournirent des
armcs &, la speculation.^ Mais dans I'espacc de la premicjre
annde, 3,000 Ivilomotrcs trouvaient des concessionnaires ; et,
h, la fin do la quatriome annde, sur une longueur d'cnviron
5,000 kilometres, les trains circulaicnt.

Les grandes arteres dtaient dcssindcs et allaicnt se terminer
en pen d'anndcs. Lc gouvernement rdsolut hardimcnt d'abor-
der la construction des lignes secondaires et do faire pdndtrer
' vie commcrciale dans tout le corps do la nation, comme les
petits vaisseaux font pdndtrer le sang jusqne dans les chairs
de rhomme. Ccttc fois, le profit ne scmblait pas pouvoir de
longtcmps rdmundrer la ddpcnse et d'aillcurs la crise de 1857
avait rendu plus timides les entreprises. Lc gouvernement
intervint, et, par deux lois successives,* donna des subventions

1 Le cliemin de cointurc avuit 6t& terete d&s le 11 Jecembre 1851. Dans la
seule anneo 1852, 40 docrets furont rendus relativement aux chemins de fer, et
207 kilom. fiircnt livri's a la circulation.

2 Les concessions c'tnicnt faitos pour 99 ans, avec garantie, pour le capital
engage par les Compagnies, d'un minimum d'interut do 4% pendant la moitie' de
CO temps. Quelques concessions furent meme faitos sans garantie. Cette ga-
rantie fut d'ailleurs supprimde pour le premier reseau, lorsque la loi du 11 juin,
1859, accorda une garantie particulibre au second rc'seau.

3 De'crets du 17 Janvier, in fevrier, 20, 27 mars, 1862.
« Lois du 11 juin, 1859, et du 11 juin, 1863.

%-ii

n'*;!

FRANCE SOUS LE SECOND EMPIRE.

289

ou garantit aux capitaux du second rdscau, lesqucls devaient
etre fournis par dcs obligations, un intdrfit do 4 pour 100 et I'a-
mortissemcnt eu cinquante ans.

C'est ainsi qu'^ la fin de I'annde 1866, la longueur totale
dcs concessions definitives atteignait 21,050 kilom., ct cello
dcs lignes exploitdes, 14,500 ; la d(;penso faite s'^jlevait a pres
do 7 milliards.^

Lcs canaux, quoiquo reldguds au second plan, ont 6t6 ter-
minals sur phisieurs points, entrepris sur quelqucs autres,^ et
sont rentr(5s, pour la plupart, dans le domaine do rEtat,^ qui
s'est empresse d'abaisser presque partout les droits au niveau
des frais d'cntretien. La navigation des rivieres a 6t6 amd-
liorde.* Les grandes routes, paralleles aux voies de fer, se
trouvaicnt ddlaissdcs ; mais les routes transversales, emportant
ou apportant voyageurs et marchandiscs, que lcs trains rc-
cueillent ou sement sur leur route, s'animaient.^ On a en
consequence redoubld do zele dans I'application de la loi do
1836 sur les chemins vicinaux," et une loi nouvelle a encou-
ragd les conscils gdndraux c\ construire, aux memos conditions,
dcs chemins de fer, qui, ii, I'exemple de ceux dc I'Alsace, for-
meront un troisicmc rdsoauJ

La tdldgraphie dlectrique, qui dtait k ses ddbuts en 1851,
a commencd k envelopper de son rdseau la France, k la suite du

1 On se rappelle qu'h la fin du r&gue de Louis-Philippe, la dopenso efEectue'e
I'tait d'environ 1 milliard J, et le noinbre de kilometres -xploitos de 1830.

- La France possedait 4,200 kilom. de canaux en i818, et, en 1800, 4,500;
de plus, 0,900 kil. de rivieres navigables. De grands travaux ont ete' poursuivis.
Voir Erp. de la sit. de I'Emp., 1807, Mon., p. 450 et 451.

» Ddcret du Janvier, 1852, et loi du 28 jtiillet, 1800.

* Voir, entre autres, la loi du 14 juillet, 1861.

6 De 1848 ?i 18G0 exclusivement, I'fitat a dispense' pour routes, canaux,
ponts, phares, etc., G"27 nullions.

" Rclativemcnt aux chemins de fer, routes, canaux, etc. M. P. Boiteau.
Voir Fortune puhlique et ^finances de la France, t. I. Le chemins vicinaux ont
cofttL' en 1860, 120 millions, dont un tiers en prestations, en nature.

"> C'est en 1850 et 1860 que le conseil gcne'ral du Bas-Rliin, M. Migncret
e'tant pre'fet, classa les premiers chemins de ce genre. — La loi rendue sur la
matifere est du 12 juillet, 1805. Deux dc'partements (Euro, Saone et Loire), inde'-
pendamment du Haut et du Bas-Rhin ont de'jii entrepris des chemins de ce
genre. 29 autres departenients ont de'cide' en principe des creations du mdme
genre.

i4t

290

ECONOMIC HISTORY.

d<jcret du 6 Janvier, 1852 ; elle couvre anjourd'hui I'Europc;^
elle fait communiquer lea deux mondes ct transmet, en France
sculcment, pres do trois millions do d(ipeclies pour le compte
des particuliers.^ La podte, dont le service a requ ^ diverges
reprises de notables ameliorations, transportait trois fois plus
de lettres ou d'imprim^s, en 1865 qu*en 1847 ;3 de nombreuses
conventions postales et des conventions mondtaires ont dtd
signdes avec les pays voisins.* Les regions lointaincs de I'Asie
et de I'Amdi'ique ont 6i& miscs en relations rdgulieres avec
nos ports par la Compagnie des mcssagcries impdrialcs, qui
s'est habilcment transformde devant la concurrence des chc-
mins do for, et par la Compagnie des paquebots transatlan-
tiques dont, vingt ans auparavant, un ministre aurait ddji\
voulu doter la France.^

Les hommes, leurs pcnsdes et leurs produits circulent an-
jourd'hui en beaucoup plus grande nombre,^ avec plus de
rapiditd et &. moins de frais : cette mobility qui a sensiblcment
modifie I'dconomie de la vie privde, ct qui modifie les rapports
des nations, restera un des caracteres distinctifs de la scconde
moitid du dix-ncuviome siecle.

Avec de pareillos conditions, le commerce extdricur no
pouvait manquer de s'accroitre. En 1850, dpoque ^ laquclle

1 Grace a la convention tdle'grapliique du 17 mai, 1805, "lerc'seau tek'gra-
phique du continent europeen est adjourd'liui, dans toutes scs parties sans excep-
tion, soumiskdes principes etudes regies unifonncs." Exp. de la sit. de I'Einp.,
1807.

* 2,307,091 do'pC'ches dans les 10 premiers mois de 1806, ce qui suppose c vi-
ron 2,480,000 pour I'anne'e. Au 1" dec, 1800, il y avait 2,091 bureaux tcL.gra-
pliiqucs. Des lignes souterraines ont c'te ctablies dans quelques grandes villcs
et des fils d'un diametre supc'rieur sur les princlpales lignes pour prc'vcnir les
interruptions do service.

» En 1847, 210 millions; en 1805, 590 millions.

< La convention monetaire du 23 dec, 1805, a e'tabli une monnaic uniforme
f inais critiquable a certain c'gard) entre la France, la Belgique, la Suisse, I'ltalic,
ct commence a constituer ce que M. de Parieu nomme le Miinzverdn latin.

* Plusieurs autres services ont e'te e'tablis, Exp, de la sit. de I'Emp., 1807.

* Le nonibre des voyageurs des cliemins de fer e'tait dc 37 millions en 1857,
de 84 millions en 1860. Dans cette derniere annee, les 84 millions de voyageurs
ont fait 3,301 millions de kilombtres, et 34 millions de tonnes ont fait 5,171 mil-
lions de kil. Le produit brut a etc' de 184 millions do francs pour les voyageurs
et de 314 millions pour les marchandiscs. Depuis 1855, le prix moycn kilomc'-
trique du transport de la tonne a baissd de 0 fr. a 1,117.

FRANCE SOUS LE SECOND EMPIRE.

291

il avait h peu pres retrouv^ le niveau do I'annde la plus pros-
pere du rogno de Louis-Philippe, il <}tait de 2,555 millions.
En 1864, il s'dlcvait h 7,329 millions, c'cst-a-dire qu'il a pres-
que tripl(j dans I'espacc de quinzo ana.

Si Ton prend la moycnne de chacun des trois lustres qui
composont cctte pdriode, on constate, non-seulement un pro-
gres, raais une progression constante, h n'cnvisagcr que les
marchandises import<jes ou exportdcs au commerce spdcial.
La moycnne de 1850-1854 est de 2,294 millions ; ccllc de
1855-1859, de 3,626 millions, et ccllc de 1860-1864, pdriodc
pendant latiucUc Tabaissement des tarifs fran^-ais a provoque
la concurrence (jtrang^re, de 4,701 millions et le progrcs
continud.*

II a 6t6 plus rapide qu'aux deux <;poques prdcddentes de
notro histoirc contemporainc. Diirant les quinzo anndes de
la Rcstauration, notre commerce extdrieur avait h pen pres
doubl<j ; durant les dix-sept anndes du regno de Louis-Phi-
lippe, il avait fait un peu plus quo doubler.2

Ce progres ticut k des causes gdnd rales et n'cst pas un
privilege particulier k la France. Dans les dtablisscmcnts
de crddit c'est elle qui a donnd des exemples k une partie de
I'Europc, mais elle n'a fait que suivre k distance rAngletcrre ;
dans la construction des chemins de for, elle avait dtd devan-
cde par plusieurs Etats. Cependant aucune nation, la Bel-
gique exceptde,^ n'a, depuis quinzo ans, plus largemcnt que
la France, dtcndu ses relations extdrieures. Pendant qu'elle

1 Ccs cliiffres, il est vrai, sont ccux des valeurs actuclles, c'est-ii-dire des prix
du marclie, et, conime la valciir de rarpcnt a diminue, ils ne represcntent pas
une qiiantite' triple do marcliandises. L'unnee 18t)5, dont on ne connait encore
que le commerce spo'cial, a produit 5,081 millions, I'annc'e 18G0 produira environ
(),300 millions (a produit f),;i08 millions pour les 10 premiers mois) ; le com-
merce special de 18t>4 etait de 6,452 millions. La naviijation s'est accrue
connne le reste ; 12,531,504 tonnes en 1854; 17,(i.')8,000 tonnes en 1800. La
principale augmentation a etc' pour les ports de Marseille, du Havre, et de
Monleaux.

'^ lin 1816 (tr&s-mauvaise annce d'ailleurs), 621 millions; en 18.']0, 1,211 mil-
lions; en 1847, 2,437 millions.

3 Belgique, en 1835, 358 millions de francs, et, en 1847,584; en 1850,618
millions, et, en 1804, 2,432 millions ; ce qui fait environ 500 fr. par habitant.
En France, la proportion n'est pas tout a fait de 200 fr. par habitant. Elle est
en Angleterre de 360 fr.

■' ■CI

«' i

292

ECONOMIC HISTORY.

cn triplait Ic chiffro, la plupart dcs pa3's commcrqants, ct
rAngloterro cn particulicr, doublaicnt soulemcut Ic leiir; il
est juste do notcr toutefois que ce doublement, en Angleterre,
portuit son chiffre h, 11 milliards.^

II rostc il dire quelles lois ont favorisd cettc extension du
commerce et rdgissent aujourd'hui le travail.

V!i.

LES TRAITfiS DE COMMERCE.

Qiiclques jours aprcs la proclamation de I'Erapire, le sdnav
tus-consulte du 25 doccmbrc 1852 interprdtait et dtcndait les
prdrogatives du souverain en matiere dc traitds de commerce,
en ddelarant qu'ils auraicnt " force de loi pour les modifica-
tions do tarif qui y sont stipulees," e'cst-tVdiro que le Corps
Idgislatif n'aurait plus le droit de les ratifier ou de les annulcr
par son vote. Ce pouvoir, remis au chef dc I'Etat, jjouvait,
en dehors dcs considdrations politiqucs, inquidter certains
intdrots ; le prdsidcnt du Sdnat, dans son rapport, s'appliqua
a les rassurer en se pronongant centre les thdorics de la libertd
commcrciale.

Cepcndant la rdcolte de 1853 fut mauvaise. L'importation
seule pouvait combler le deficit. Le gouverncment, pour I'en-
courager, n'hdsita pas a abaisser toutes les barrieres de la
douanc ; il ddcrdta la suspension de I'dchelle mobile,^ I'exemp-
tion du droit de tonnage et de la surtaxe de pavilion pour les
navires chargds de substances alimcntaires,'^ I'abaisscment du
droit sur les bestiaux.* Ce n'dtaicnt que dcs mcsures tempo-
raires ; mais elles semblaient indiquer un esprit nouveau.

' En 1854 (prcniii-re .innr'e oii la stafistique ait donne les valours), 268 millions
(le livrcs sterling;, et, cn 18()-t, 4;>5 inilliuns (soit environ 10 milliards, 000 mil-
lions). En 18150, imc statistique angiaise {voir les Anuales du commerce extericur)
donnait 120 millions : il y aiirait done eu li pou pros doublement de 1830 ii 1850.
I'ays-Bas, en 18;VJ, 471 millions de franes; en 18-50, 1,079; en 1804, 1,1104.
IJussie, en 1850, 102 millions de roubles; cn 1863, 300 millions. £tats-Unis, cn
18IU, environ 184 millions de dollars ; en 1861, 412 millions en 18(50, 702
millions.

'^ Di'cret du 18 aout, 1853. Cetto re'forme c'tait alors doniandec par le conscil
municipal de Marseille ct par le conseil genc'ral de I'lIcTault que prcsidait M.
Michel Chevalier.

« Dec. du 8 aofit, 1853.

* Dec. du 14 scptenibrc, 1853. — Les droits sur boeufs et taureaux dtaient
rdduits dc 50 fr. k 3 fr.

FRANCE SOUS LE SECOND EMPIRE.

298

Dans los deux camps opposes on s'einut. M. Jean Doll f us
cntropi'it unc campagnc contro la prohibition tics lils do coton.
Lq ddbat fut portd successivcmont dovant la Socidto indiis-
triellc dc Mulhouse, devant Ic Consoil snperiour du conimcrcc,
et dans Ic cabinet de I'Enipcreur: M. Dollfus attaqua, M.M.
Fcray d'Essonne et Seilliere ddfcndirent le systOme protocteur.
Le tarit' dcs cotons no subit (ja'ane modification l(!gere ;^ niais
ddji\ un d(jeret, plus signilicatif, changcait les zones d'entreo
pour la lionillc et diminuait, de raoitid environ, le droit sur
les fcrs.'^ Deux ans apres, nouvcUe rdduction, et, commc con-
sequence, abaissement du droit sur le fer-blanc, le fil do for, la
vicillc ferraille, et les macliines.^ L'annde 1855 dtait marqudc,
en outre, par lo retranchement de pros de 200 articles sans
importance, tels que les yeux d'dcrevisse on le gui do chono,
(pii allongeaient le tarif sans profit pour le Trdsor,'' et par
une diminution importantc du droit sur les laines et les peaux
brutes.^ La tendance du gouvernement s'accusait avec plus
de nettet^.

L'Exposition universclle de Paris vcnait d'avoir lieu et I'in-
dustrie fran^aisc y avait brilld au premier rang parmi les
nations. Dans le but d'dpargncr aux exposants (strangers 1^
la couteusc ndcessitd de rcmporter lours produits, et peut-otrc
aussi dc tenter une experience, le prince Napoleon, president
dc la Commission, avait fait decider quo tous les objets ex-
poses, qu'ils fnssent prohibds on non, pourraient etre vondus
et admis exceptionnellcmcnt en Franco en payant un droit de
22 p. 100.*' Or, sur un total d'cnviron 22 millions de ricliesscs
etrangeres, qui avaient 6t6, pendant i)lusieurs mois, <jtal(;es
sous les yeux d'un public si nombrcux, 2 millions | seulcment
avaient trouvd dcs achetcurs frangaisj L'industrie fran(;aiso
n'dtait done pas aussi incapable de lutter contro la concur-
rence du dehors que le proclamaient les parties inttjressees.

» Voir le decret du 28 ddccnibre, 1853.

* l><?c. du 22 novembre, 1853. — La diminution sur I'acier fondu dtait mGme
beaucoup plus forte . de 132 fr. k 3 fr.

a De'c. du septembre, 1855. * Dec. du 16 juillet, 1855.

* Dec. du 17 Janvier et du 10 docembre, 1855.
6 Dec. du 6 avril, 1854.

' Voir Journ. des Econ., 2« serie, t. xi. p. 471.

it']

294

ECONOMIC HISTORY.

r«U

'• L' observation qui m'a frnppd tout d'aboril," disait le prince
Napoldon dans son rapport, "c'cst quo do ces grands concoura
jaillit unc fois do jUus la i)rouve que les socidtds nioderncs
murchent vers la libertd." D(jji\ le gouvernenient, ddsireux de
ddveloppcr " les relations internationales qui prdparent lo
progrcs de la civilisation," avait prdsentd au Corps Idgislatif
" un j)rojet levant toutes les prohibitions." Pour la prcmiiirc
fois peut-etre, il avait rencontrd uno resistance qui I'avait
d'autant plus dtonnd qu'elle dtait [)lus rare et qu'cllo cherchait
h prendre son point d'appui, liors de Tasscmblde, dans I'agita-
tion des villes raanufacturieres. 11 retira le projct, en annon-
<;ant qu'une nouvelle loi dtait inise a Tdtude, et que la levde
des prohibitions n'aurait lieu qu'^ partir du 1" juillet, 1861.
" L'industrie frangaisc, prdvenuc des intentions bien arretdes
du gouvernenient, ajoutait le 3Ioniteur, aura tout le temps
ndcossaire pour se prdparer i\ un nouvcau regime commercial.*

Durant trois ans, le silence se fit sur cette grave question.^
D'aillours vers la fin de 1857, une criso terrible avait ddsar-
gonnd la spdculation et fait momentandment refiner en baisse le
prix, sans cesse montant depuis 1852, des denrdes, des matidres
premi(ires, et, par suite, des objets manufacturds ; la reprise des
travaux avait dtd suspeudue en 1859 par la guerre d'ltalie.

Le commerce commengait h peine h retrouver son dquilibre,
lors(iue, le 15 Janvier 18G0, le Moniteur publia la lettre que
TEmpcreur avait, quelqucs jours auparavant, dcrite h son
ministre des finances.^ C'dtait un vaste programme dcono-
mique dont le but dtait "d'imprimer un grand cssor aux di-
verses branches do la richessc nationale," et que son auteur
rdsumait en ces termes : —

" Suppression des droits sur la laine et les cotons ;

" Rdduction successive sur les sucres et les cafds ;

" Amdlioration dnergiquement poursuivie des voies de com-
munication.

" Rdduction des droits sur les canaux, ct, par suite, abaissc-
ment gdndral des frais de transport ;

1 Monitntr du 17 octobro, 1856.

* Cepciidant plusieurs ddcrets importants furent rondus.

« Lettre du 5 Janvier, 1860.

FRANCE SOUS LE SECOND EMPIRE.

295

" Prots & I'agriculturo ct ^ Tindustric ;

" Suppression des prohibitioua ;

'• Traitd dc commerco avcc Ics puissances dtrangdrcs."

" Par COS mcsurcs," ajoutait rEmpercur, " I'agriculturo
trouvcra rdcoulemont do ses produits; I'industrie, affranchio
d'entravcs extdrieures, aiddo par lo gouvcriicmcnt, stimulde
par la concurrence, luttera avantageuseraent avcc les produits
dtrangers, ct notro commerce, au lieu do languir, preudra un
nouvcl essor."

La pensde du gouvernement, sur ce point, so relcvait tout
entifire. 11 dtait impossible qu'issu du suffrage univcrsel ct
ddgagd des liens qui avaient arretd ses prdddcesseurs, 11 con-
sentit d maintenlr dans son intdgritd Ic systi^mo prohlbitlf quo
los gouvernements prdcddents cux-memes n'avaient crdd ou con-
servd aussl rigoureux quo par la ndcessitd do compter avcc do
puissantes influences ; mais il out pu so faire qu'un autre sou-
vcrain embrassat moins rdsolument un moins vaste ensemble.
Quol qu'il en soit, depuis le ddcret do Berlin, aucun fait
aussl considerable ne s'dtait produit dans I'histolro do notre
legislation douani^re.

Ddji dtaient arretds les articles du plus important traltd do
commerce quo put signer la Franco, de celui qui devait la Her
^ sa rlvale la plus redoutde. Le hdros de la llgue anglaiso,
Richard Cobden, et M. Michel Chevalier, qui, depuis 1852,
falsait h, chaque session du Conscil gdndral de I'Hdrault, voter
un raanifcste en favour do la llbertd commerciale, en avaient
eu les premiers la pensdo, et avaient trouvd des disposi-
tions favorables dans lo ministcre anglais et h. la cour
des Tuilcrlcs. Au lendemain de la paix de Villafranca et i
la volllo du traitd de Turin, TEmporour, ddsireux de sorrer
les nocuds pacifiqucs de la Franco et do I'Anglcterro, approuva
un projet qui rdpondait aux bcsoins de sa politique extdrleure
comme ^ ses vues de rdformcs dconomiques, et d6s la fin de
novembre, 1859, los ndgociations prdliminalres, condultes avec
le plus grand secret par M. Rouher, ministre du commerce, et
par les deux dconomistes, dtaient termlndes. Ce fut par la
lettre du 6 janvler quo la Franco apprit qu'oUe eutralt dans
une nouvelle dro industrlelle. Lo 23 du memo mois, le traitd
dtalt signd.

. ;|ii

296

ECONOMIC III STORY.

< i

Lc8 prohibitions dtuiont supprimdcs. Lus marchandiscs
aiiglaisfs eiitroraioiit cii Franco on payant un droit ad valorem,
(iui Bcrait bioiitot converti en droit spdcilinno, ct qui n'excddo-
rait pa8 30 pom- 100 au d(!but, 25 pour 100 i\ partir do TaniK^o
18G4. La (Jrando-Hrotaj^nc, do son cot(), admottait en ploino
franchise nos produits, ipii payaient oncoro pour hi i»lupart un
droit do 10 pour 100, ct no prdlevait plus qu'uno taxc variable
do 1 ik. 2 scholliugs sur noa vins, et do 8 schellings 5 pence sur
nos caux-de-vic.^

Lo traitij du 23 Janvier dtait un typo sur lequol on so propo-
sait de reformer toutc notrc legislation douaniere, ct do rtiglcr
les rapports conunerciuux do la France avcc scs voisins. Dcs
ndgociations furent preaque aussitot cntanidcs ; ellcs ont
amend la conclusion do plusieurs traitds, d'abord, avcc la
Bclgique,^ puis avcc la Prussc et le Zollvcrcin," puis avcc
ritalic et la Suisse,'* enlin, en 1865 et 1860, avcc les Pays-Has,
Ics villcs hansdaticiucs, le Meclilembourg, la Suede, I'Espagne,
lo Portugal, le Pdrou, rAutrichc.''

Le Cor[)8 Idgislatif nc fut saisi do ces rdformcs qu'aprtis le
fait accompli." Get usage dcs droits confdrds au souverain
par le sdnatus-consultc du 25-30 ddcembre, 1852, cut lo regret-
table effct do donncr a unc transformation libdrale rapparcnce
d'un coup d'Etat commercial, et preta aux partisans do la
protection lour plus solide argument. Lc gouvcrnement tint
bon. Dans les discussions successivcs qu'ont amendes les
traitds, il s'est appliqud constamment a dtablir dcs droits de
plus en plus moddrds, afin de rendro toujours plus faciles les
relations intornationalcs,^ et quoique la politique ait rendu

' Le trait(5 portait 8 sch. 2 pcnuc; mais lc taux fut trouvc insuffisant en
Angleterre et portd u 8 Bch. 5 p. par un art. addit. du 20 fJvrier.
2 10 niai, 1801.
« 24 mars et 2 aoflt, 1802, 10 mai, 1865.

* 17 Janvier, 1804, et 30 juin, 1804.

» 7 juin, 1865, 11 mars, 1805, 9 juin, 1865, 4 et 30 juin, 18 juin, 1805, 11 juil-
let, 1806; 2 de'c, 11 dec, 1800. Voir M. Boiteau, Les TraiUs de commerce et
Exposifde la sit. de I'Empire. {^fon. de janv., 1866 et de fe'v. 1867.)

* La discussion sur les modifications de tarif du traite du 23 Janvier ne
recommenfa au Corps Ic'gislatif que le 28 avril.

' Ainsi, par exetnple, les moderations de droits portc'es dans le traite' avec
ritalie, ont dte, par dccret du 20 Janvier, 1804, appliqudes k la Belgique et &
I'Angleterre.

hi\'

vm n

FRANCE SOUS LE SECOND EMPIRE.

297

vuinc dumnt pliusicura ann(^e« la Convention avcc lo Zollvcrcin,
la Franco cummiiniquo aujuui'iriiui avec toutcu los nations
linutru|ihes do son terrltoirc, sans rcncontror rol)staclo insur-
uiontablo do la prohibition, et suiis avoir, dans la niajorito
dcs cas, i\ payor autre chose qu'un simple droit de consoiunui-
tion, asscz lc1;^or en I'ait, ct l<;gitinie en prineipe.

Cea traitda avaient fait disparaitro les prohibitions. Lo
systtSino protectenr qu'cllea dtayaient, ct dans le{|iiel do si
largos brtichcs dtaient ouvertes, devait n(5ce8sairenient crou-
ler. II no restait au Corps legislatif (pi'il deblayer lo tcr-
rnin et ii rdtablir riiarmonio dans les diverscs [)artie8 do
notre Code douanicr, en votant les projets que lui prdsentait
lo gouvernement. . . .

■'t'flii!:

K'i

298

ECONOMIC HISTORY.

xu.

RECENT CHANGES IN TRANSPORTATION AND
PRODUCTION,

IV\ {■

hv i

From Wells' Recent Economic Changes, pp. 27-65.

WHEN the historian of the future writes the history of
the ainetecnth century he will doubtless assign to the
period embraced by the life of the generation terminating in
1885 a place of importance, considered in its relations to the
interests of humanity, second to but very few, and perhaps to
none, of the many similar epochs of time in any of the centu-
ries that have preceded it; inasmuch .is all economists who
have specially studied this matter are substantially agreed that,
within the period named, man in general has attained to such
a greatei* control over the forces of Nature, and has so com-
passed their use, that he has been able to do far more work in
a given time, produce far more product measured by quantity
in ratio to a given amount of labor, and reduce the effort nec-
essary to insure a comfortable subsistence in a far greater
measure than it was possible for him to accomplish in any
previous generation. In the absence of sufficiently complete
data, it is not easy, and perhaps not possible, to estimate accu-
rately, and specifically state the average saving in time and
labor in the world's work of production and distribution
+hat has been thus achieved. In a few departments of indus-
i.'ial effort the saving in both of these factors has certainly
amounted to seventy or eighty per cent ; in not a few to more
than fifty per ccnt.^ Mr. Edward Atkinson, who has made

1 According to tlie United States Bureau of Labor (report for 1886), the
gain in the power of production in some of the leading industries of the United
States " during tlie past fifteen or twenty years," as measured by ttie displace-
ment of the muscular labor formerly employed to effect a giren result (i. e.

CHANGES IN TRANSPORTATION.

299

(his matter a special study, consldei's one third as the mini-
mum average that can be accepted for the period above speci-
fied.^ Other authorities are inclined to assign a considerably
higher average. The deductions of Mr. William Fowler, Fel-
low of University College, London, are to the effect that the
saving of labor since 1850 in the production of any given arti-
cle amounts to forty per cent ; ^ and the British Royal Com-
mission (minority repoi't, 1886) characterizes the amount of
labor required to accomplish a given amount of production
and transport at the present time as incomparably less than
was requisite forty years ago, and as " being constantly
reduced."

But be this as it may, out of such results as are definitely
known and accepted have come tremendous industrial and
social disturbances, the extent and effect of which — and
more especially of the disturbances wliich have culminated.

amount of product) has been as follows : In the manufacture of agricultural
implements, from fifty to seventy per cent; in the manufacture of shoes,
eigiity pur cent; in the manufacture of carriages, sixty-five per cent; in the
manufacture of machines and machinery, forty per cent ; in the silk-manufac-
ture, fifty per cent ; and so on.

1 In a print-cloth factory in New England, in which the conditions of pro-
duction were analy-sed by Mr. Atkinson, the product per hand was found by
liim to liave advanced from 20,531 yards, representing 3,382 hours' work in
1871, to 132,391 yards, representing 2,095 hours' work, in 1884, — an increase of
twenty-two per cent in product, and a decrease of twenty per cent in hours of
labor. Converted into cloth of their own product, the wages of the operatives
in this same mill would have yielded them 6,205 yards in 1871, as compared
with 9,737 yards in 1884, — an increase of oCi''^ per cent. During the same
period of years the prices of beef, pork, flour, oats, butter, lard, cheese, and
wool in the United States declined more than twenty-five per cent.

A like investigation by the same authority of an iron-furnace in Pennsyl-
vania showed that, comparing the results of the five years from 1860 to 1864
with the five years from 1875 to 1870, the product per hand advanced from 776
tons to 1,219 tons; that the gross value of the product remained about the
same ; tliat the number of hands was reduced from seventy-six to seventy-one ;
and that consumers gained a benefit of reduction in price from $27.05 per ton
to 819.08.

'■' Wages have greatly increased, but the cost of doing a given amount of
work has greatly decreased, so that five men can now do the work which
would have demanded the labor of eight men in 1850. If this be correct, the
saving of labor is forty per cent in producing any given article. — Appreciation
of Gold, William Fowler, Felloto o/ Universily College, London, 1886.

;

Hl^C

300

ECONOMIC HISTORY.

as it were, in later years — it is not easy to appreciate with-
out the presentation and consideration of certain typical and
specific examples. To a selection of such examples, out of a
large number that are available, attention is accordingly next
invited.

Let us go back, in the first instance, to the year 18G9, when
an event occurred which was probably productive of more m-
mediate and serious economic changes — industrial, commer-
cial, and financial — than any other event of this century, a
period of extensive war excepted. That was tlie opening of
the Suez Canal. Before that time, and since the discovery by
Vasco da Gama, in 1498, of the route to India by the Cape of
Good Hope, all the trade of the Western hemispheres with the
Indies and the East toiled slowly and uncertainly around the
Cape, at an expenditure in time of from six to eight months
for the round voyage. The contingencies attendant u{)on such
lengthened voyages and service, as the possible interrui)tion
of commerce by war, or failure of crops in remote countries,
which could not easily be anticipated, required that vast stores
of Indian and Chinese products should be always kept on hand
at the one spot in Europe where the consumers of such com-
modities could speedily supply themselves with any article they
required ; and that spot, by reason of geographical position
and commercial advantage, was England. Out of this condi-
tion of affairs came naturally a vast system of wai'chousing
in and distribution froyn England, and of British bani ing and
exchange. Then came the opening of the canal. What were
the results ? The old transportation had been performed by
ships, mainly sailing-vessels, fitted to go round the Cape, and,
as such ships were not adapted to the Suez Canal, an amount
of tonnage, estimated by some authorities as high as two mil-
lion tons, and representing an immense amount of wealth,
was virtually destroyed.^ The voyage, in place of occupying

1 "The cnnal may therefore be snid to have given a death-blow to sailing-
vessels, except for a few special purposes." — From a paper by Charles Mag-
niac, indorsed by the " London Economist " as a merchant of eminence and
experience, entitled to speak with authority, read before the Indian Section of
the London Society of Arts, February, 1876.

CHANGES IN TRANSPORTATION.

301

from six to eight months, has been so greatly reduced that
steamers adapted to the canal now make the voyage from
London to Calcutta, or vice versa, in less than thirty days.
The notable destruction or great impairment in the value of
ships consequent upon the construction of the canal did not,
furthermore, terminate with its immediate opening and use ;
for improvements in marine engines, diminishing the con-
sumption of coal, and so enabling vessels to be not only sailed
at loss cost, but to carry also more cargo, were, in consequence
of demand for quick and cheap service, so rapidly effected
that tlio numerous and expensive steamer constructions of
1870-73, being unable to compete with the constructions of
the next two years, were nearly all displaced in 1875-76,
and sold for half, or less tlian half, of their original cost.
And within another decade these same improved steamers
of 1875-70 have, in turn, been discarded and sold at small
prices, as unfit for the service of lines having an established
trade, and replaced with vessels fitted with the triple-expansion
engines, and saving nearly fifty per cent in the consumption
of fuel. And now " quadruple-expansion " engines are begin-
ning to be introduced, and their tendency to supplant the
" triple expansion " is " unmistakable."

In all commercial history, probably no more striking illus-
tration can be found of the economic principle that nothing
marks more clearly the rate of material progress than the
rapidity witii which that which is old and has been considered
wealth is destroyed by the I'csults of new inventions and
discoveries.^

Again, with the reduction of the time of the voyage to the
East by the Suez Canal to thirty days or less, and with tele-
graphic conmiunication between India and China and the
markets of the Western world, permitting the dealers and
consumers of the latter to adjust to a nicety their supplies

1 In Hie last analysis it will appear that there is no such tliinff as fixed
capital ; there is nothing useful that is very old except the precious metals,
and all life consists in the conversion of forces. The only capital which is of
permanent value is immaterial, — the experience of generations and the devel-
opment of science. — Edward Atkinson.

la
4

Mil

vtl

802

ECONOMIC HISTORY.

'¥f

of commodities to varying demands, there was no longer any
necessity of laying up great stores of Eastern commodities in
Europe ; and with the termination of this necessity, the India
warehouse and distribution system of England, with all tho
labor and all the capital and banking incident to it, substan-
tially passed away. Europe, and to some extent the United
States, ceased to go to England for its supplies. If Austria
wants anything of Indian product, it stops en route, by the
Suez Canal, at Trieste; if Italy, at Venice or Genoa; if
France, at Marseilles ; if Spain, at Cadiz. IIow great has
been the disturbance thus occasioned in British trade is shown
by the following figures : In 1871 the total exports of India
were £57,550,000, of which £30,737,000 went to the United
Kingdom ; but in 1885, on a total Indian export of £85,087,000,
the United Kingdom received only £31,882,000. During the
same time the relative loss on British exports to India was
less tlian a million and a half sterling.

As a rule, also, stocks of Indian produce are now kept, not
only in the countries, but at the very localities of their pro-
duction, and are there drawn upon as they are wanted for im-
mediate consumption, with a greatly reduced employment of
the former numerous and expensive intermediate agencies. '
Tims a Calcutta merchant or commission agent at any of .the
world's great centres of commerce contracts through a clerk
and the telegraph with a manufacturer in any country — it
may be half round the globe removed — to sell him jute, cot-
ton, hides, spices, cutch, linseed, or other like Indian produce.
An inevitable steamer is sure to be in an Eastern port, ready

1 In illustration of this curious point, attention is asked to the following
extract from a review of the trade of British India, for tlie year 1880, from the
" Times," of India, published at Bombay : " What tho mercantile conunu-
nity " — i. e., of Hombay — "has suffered and is suffering from, is tlie very nar-
row margin which now exists between the producer and consumer. Twenty
years ago the large importing houses held stocks, but nowadays nearly every-
thing is sold to arrive, or bought in execution of native orders, and the bazaar
dealers, instead of European importers, have become the holders of stocks.
The cable and canal have to answer for tho transformation; wliile the ease
with which funds can bo secured at liome by individuals absolutely destitute
of all knowledge of tho trade, and minus tho capital to work it, has resulted in
the diminution of profits both to importers and to bazaar dealers."

;-JJ

s&mt

CHANGES IN TRANSPORTATION.

303

m-
ar-

inr
ks.

ISO

ite
in

(

to sail upon short notice ; the merchandise wanted is bought
by telegraph, hurried on board the ship, and the agent draws
for the price agreed upon, through some bank, with the ship-
ping documents. In four w^oks, in the case of England, and
a lesser time for countries intermediate, the shipment arrives ;
the manufacturer pays the bill, either with his own money or
his banker's; and, before another week is out, the cotton and
the jute are going through the factory; the linseed has been
converted into oil, and the hides in the tannery are being
transformed into leather.

Importations of East Indian produce are also no longer con-
fined in England and other countries to a special class of
merchants ; and so generally has this former large and
special department of trade been broken up and dispersed
that extensive retail grocers in the larger cities of Europe and
the United States are now reported as drawing their supplies
direct from native dealers in both China and India.

Another curious ami recent result of the Suez Canal con-
struction, operating in a quarter and upon an industry that
could not well have been anticipated, has been its effect on an
important department of Italian agriculture, — namely, the
culture of rice. Tiiis cereal has for many years been a staple
crop of Italy, and a leading article of Italian export, — the
total export for the year 1881 having amounted to 83,598
tons, or 167,190,000 pounds. Since tlie year 1878, however,
rice grown in Burmah, and other parts of the far East, has
been imported into Italy and other countries of Southern
Europe in such enormous and continually increasing quanti-
ties, and at such rates, as to excite groat apprehensions amimg
the growers of Italian rice, and largely fUminish its exporta-
tion,— the imports of Eastern rice into Italy alone having
increased from 11,957 tons in 1878 to 58,095 tons in 1887.
For Prance, Italy, and other Mediterranean ports east, the
importation of rice from Southern Asia (mainly from Hurmah)
was 152,147 tons in 1887, as compared with about 20,000
tons in 1878.

That the same causes are also exerting a like influence upon
the marketing of the cereal crops of the United States is

-H^'

'^M

ii-

304

ECONOMIC HISTORY.

shown by the circumstance that the freight rates on the trans-
port of grain from Bombay to England, by way of the Suez
Canal, declined from 32.5 cents per bushel in 1880, to 16.2
cents in 1885 ; and, to the extent of this decline, the ability of
the Indian ryot to compete with the American grain-grower,
in the markets of Europe, was increased.

How great was the disturbance occasioned in the general
prices of the commodities that make up Eastern commerce by
the opening of the Suez Canal, and how qiiickly prices re-
sponded to the introduction of improvements in distribution,
is illustrated by the following experience : The value of the
total trade of India with foreign countries, exclusive of its
coasting-trade, was estimated, at the time of the opening of
tlic canal in 1869, at ^£105,500,000 ($527,500,000). In 1874,
however, the value was estimated at only X 95,500,000, or at
a reduction of ten per cent ; and the inference might naturally
have been that such a large reduction as ten millions sterling
(i50,000,000) in five years, with a concurrent increase in the
world's population, could only indicate a reduction of quanti-
ties. But that such was not the case was shown l)y the fact
that 250,000 tons more shipping (mainly steam, and there-
fore equivalent to at least 500,000 more tons of sail) was em-
ployed in transporting commodities between India and foreign
countries in 1874 than in 1869; or, that while the value of
the trade, througli a reduction of prices had notably declined
during this period, the quantities entering into trade had so
greatly increased during the same time that 250,000 tons
more shipping were required to convey it.

In short, the construction of the Suez Canal completely
revolutionized one of the greatest departments of the world's
commerce and business ; absolutely destroying an immense
amount of what had previously been wealth, and d;si)lacing or
changing the employment of millions of capital and thousands
of men ; or, as the London " Economist " has expressed it,
" so altered and so twisted many of the existing modes and
channels of business as to create mischief and confusion " to
an extent sufficient to constitute one great general cause
universal commercial and industrial depression and

\rr

iS^.U' ^'UoO,

CHANGES IN TRANSPORTATION.

305

The deductions from the most recent tonnage statistics of
Great Britain come properly next in order for consideration.
During the ten years from 1870 to 1880, inclusive, the British
mercantile marine increased its movement, in the matter of
foreign entries and clearances alone, to the extent of 22,000,-
000 tons ; or, to put it more simply, the British mercantile
marine exclusively engaged in foreign trade did so much more
work within the period named ; and yet the number of men
who were employed in elfecting this great movement had de-
creased in 1880, as compared with 1870, to the extent of about
three thousand (2,990 exactly). What did it ? The intro-
duction of steam-hoisting machines and grain-elevators upon
the wharves and docks, and the employment of steam-power
upon the vessels for steering, raising the sails and anchors,
pumping, and discharging the cargo ; or, in other words, the
ability, through the increased use of steam and improved ma-
chinery, to carry larger cargoes in a shorter time, with no
increase — or, rather, an actual decrease — of the number of
men employed in sailing or managing the vessels.

Statistical investigations of a later date furnish even more
striking illustrations to the same effect from this industrial
specialty. Thus, for 1870, the number of hands (exclusive of
masters) employed to every one thousand tons capacity, en-
tered or cleared of the British steam mercantile marine, is
reported to have been forty-seven, but in 1885 it was only
27.7 ; or seventy per cent more manual labor was required in
1870 than in 1885 to do the same work. In sailing-vessels
the change, owing to a lesser degree of improvement in the
details of navigation, has been naturally smaller, but never-
theless considerable ; twenty-seven hands being required in
1885 as against thirty-five in 1870 for tlie same tonnage en-
tered or cleared.* Another fact of interest is, that the recent
increase in the proportion of large vessels constructed has so

1 Tlie ofBcial statistics do not sliow in tlio British mercantile marine whether
the cconoYny of labor wliicli was oEfeuted prior to 1880 has continued to be pro-
gressive; inasmuch as the totals for 1886-88 include Lascars and Asiatics
under Asiatic articles of agreement ; allowing for this, liowever, the proportion
of men employed to every one thousand tons of shipping was considerably
smaller in the years 1880-87 than in 1884-85.

iit

,• 'ISJ

t U'?

1 ■%\

<-^H

306

ECONOMIC HISTORY.

"ii i-

greatly increased the efficiency of shipping, and so clieapened
the cost of sea-carrlagc, to the advantage of both producers
and consumers, that much business that was before impossible
has become quite possible. Of the total British tonnage con-
structed in 1870, only six per cent was of vessels in excess of
two thousand tons burden ; but in 1884 fully seventeen per
cent was of vessels of that size, or larger. Meanwhile, the
cost of new iron (or steel) ships has been greatly reduced ;
from 190 per ton in 1872-74 to *65 in 1877, #57 in 1880,
while in 1887 first-class freighting screw-steamers, constructed
of steel, fitted with triple compound engines, with largely
increased carrying capacity (in comparison with former iron
construction) and consequent earning power, and capable of
being worked at less expense, could have been furnished for
133.95 per ton.i

1 The following is a copy of a circular issued in October, 1887, by 'bo rep-
resentatives in Now York of a well-known iron-sbip-building flrni at Newcastle-
on-Tyne, England : —

" Inviting your attention to the inclosed particulars of two steel screw
freigiit steamers building to our order, by the well-known builders, Messrs.
, of Newcastle-on-Tyne, wo beg to give you some additional details :

" The contract price is £34,250 each, which is just about XG 17s. (six pounds
seventeen shillings sterling) a ton dead-weight capacity, and including all ex-
penses up to time of delivery, will not exceed £7 a ton dead-weight, or at
present rate of exchange, $3;5.95 American money.

" Tlius it will lie seen that as regards the cost of these vessels, while of large
carrying capacity nnd consequent earning power, and fitted as tliey will be with
engines of the newest type and with all modern appliances whicli liave been
tried and found conducive to quick and economical working (while avoiding all
innovations of an experimental character), the present price of not over £1 per
ton, dead-weight capacity, as against £12 to £VA a few years ago, renders the
difference in values relatively even greater tlian appears at first sight."

A brief examination of what is embraced in tlio construction of these vessels
is not a little interesting and instructive, especially to those who recall wliat
w.is deemed but a comparatively few years ago the very best conditions for
ocean steam navigation: Triple-expansion engines — three cylinders — of the
latest and most approved type. Horse-power, 1,700. Propeller shifting blades
and spare set ; each part of engines interchangeable. Two double-ended steel
boilers, in the corrugated furnaces, to work at one hundred and fifty pounds
pressure. Four steam winches of most approved pattern and large power.
Steam steering-gear forward, and powerful hand-gear aft. Patent stockless
anchors, working direct into hawser pipes, effecting great saving in time, labor,
and gear. Water-ballast in double bottom. Lighthouses on forecastle. Decks
of steel throughout ; height, seven feet, nine inches, being the suitable height

CHANGES IN TRANSPORTATION.

807

liivge
with
been

per

irs the

resscls
what

lis for
)f the

blades
Bteel

lounils
)ower.
ckless
labor,
Decks
height

Prior to about the year 1875 ocean steamships had not been
formidable as freight-carriers. The marine engine was too
Jicavy, occupied too nmch space, consumed too much coal.
For transportation of passengers, and of freight having largo
value in small s{)ace, they were satisfactory ; but for perform-
ing a general carrying-trade of the heavy and bulky articles
of commerce they were not satisfactory, A steamer of tlio
old kind, capable of carrying three thousand tons, might sail
on a voyage so long that she would be compelled to carry
twenty-two hundred tons of coal, leaving room for only eight
hundred tons of freight; whereas, at the present time, a
steamer with the compound engines and all other modern
improvements can make the same voyage and practically
reverse the figures, — that is, carry twenty -two hundred tons
of freight with a consumption of only eight hundred tons of
coal. The result of the construction and use of compound
engines in economizing coal has been illustrated by Sir Lyon
Playfair by the statement that " a small cake of coal, which
would pass through a ring the size of a shilling when burned
in the compound engine of a modern steamboat would drive a
ton of food and its proportion of the ship two miles on its way
from a foreign port." Another calculator, says the London
'' Engineer," has computed that half a sheet of note-paper will
develop sufhcient power, when burned in connection with the
triple-expansion engine, to carry a ton a mile in an Atlantic
steamer. How, vmder such circumstances, the charge for sea-
freights on articles of comparatively high value has been re-
duced, is shown by the fact that the ocean transport of fresh
meats from New York to Liverpool docs not exceed one cent
(i(/.) per pound; and including commissions, insurance, and
all other items of charge, docs not exceed two cents (It?.) per

for passengers, horses anil cattle. Ventilation of holds specially provided
through automatic exhaustion by means of the funnel. Ilatclies of largo
dimensions capable of taking in locomotives or other large pieces of machinery.
Six steel bulkheads, witli longitudinal bulkheads throughout holds and between
decks. Coal consumption twenty-two tons per day. Coal-bunkers sufficient
for forty days' Btcaining ; outfit in sails, steel hawsers, oil and water tanks, load-
ing and discharging gear, cutlery, plate, china, and glass, and optician's stores —
all of the best makers and full supply.

A.)

•I

10 V'

^ >
u <

I •

308

ECONOMIC HISTORY.

pound. Boxed meats have also boon carried from Chicago to
Loudon as a regular business for fifty cents jjcr 100 pounds.
In 18G0 GcL (twelve cents) per bushel was about the lowest
rate charged for any length of time for the transportation of
bulk grain froniNcnv York to Liverpool, and for a part of tliiit
year the rate ran up as high at ISJf/. (twenty-seven cents) per
bushel. But for the year 1880 (he average rate for the same
service was 2\(l. (live cents) per bushel ; while in April, 1888,
the rate on grain from New York to Liverpool by steam de-
clined to as low a figure as Id. per bushel of sixty pounds ;
3(?. to Antwerp, and 1<L to Glasgow. It seems almost need-
less to add that these rates were much below the actual cost
of carriage. In like manner, the cost of the ocean transpor-
tation of tea from Cluna and Japan, or sugar from Cuba,
or coffee from Brazil, has been greatly reduced by tlie same
causes.

The above are examines on a large scale of the disturbing
influence of the recent application of steam to maritime in-
dustries. The following is an example drawn from compara-
tively one of the smallest of the world's industries, prosecuted
in one of the most out-of-the-way places : The seal-fishery is a
most important industrial occupation and source of subsis-
tence to the poor and scant population of Newfoundland.
Originally it was prosecuted in small sailing-vessels, and uj)-
ward of a hundred of such craft, employing a large number of
men, annually left the j)ort of St. John's for the seal-hunt.
Now few or no sailing-vessels engage in the business ; steam-
ers have been substituted, and the same number of seals arc
taken with half the number of men that were formerly needed.
The consequence is, a diminished opportunity for a population
of few resources, and to obtain " a berth for the ice," as it is
termed, is considered as a favor.

Is it, therefore, to be wondered at that the sailing-vessel is
fast disappearing from the ocean ; ^ that good authorities esti-

1 The statistics of the world's shipping show that in 1885 there were 25,700
sailintj-vcssds, of 11,216,018 tons; in 1880 there were 25,155, of 10,411,807 tons;
and in 1887 there were 23,310, of 9,820,492. The decrease in two years was
therefore, 1,396,123, or 12.4 per cent.

CHANGES IN TRANSPORTATION.

809

in-

lol is

Icsti-

[5,766

|tons;

was

mated in 1886 that the tonnage then afloat was about twenty-
live per cent in excess of all that was needed to do the then
carrying-trade of tlic world ; and that ship-owners everywhere
were unanimously of the opinion that the depression of indus-
try was universal ?

[During tlio yciir 1888, from causes that must be regarded as
exceptional (and which will be hereafter noticed), an increased
demand for sliiiii)ing accommodatiou suddenly sitriing up, and
which, not being readily supplied, was followed by an almost con-
tinued advance in freight rates, until in many directions — i. e.,
in the Kussian grain and Eastern trade — the rise was equal to one
hundred per cent advance ui)on the rates current in 1887 and the
early months of 1888. This condition of affairs in turn gave a
great impulse to ship-building, especially in Great Britain, where
the construction for 1888 amounted to 903,087 tons, as against
()37,0()0 in 1887; an extent of annual increase that, except in two
instances, has never been exceeded. The additional tonnage thus
supplied proving in excess of the world's demand, the advance in
freights in 1888 was in a great measure lost in the first six months
of 1889.]

Groat, however, as has been the revolution in respect to
economy and efficiency in the carrying-trade upon the ocean,
the revolution in the carrying-trade upon land during the same
period has been even greater and more remarkable. Taliing
the American railroads in general as representative of the rail-
road system of the world, the average charge for moving one
ton of freight per mile has been reduced from about 2.5 cents
in 1869 to 1.06 in 1887 ; or, taking the results on one of the
standard roads of the United States (the New York Central),
from 1.95 in 1869 to 0.68 in 1885.1 To grasp fully the mean-
ing and significance of these figures, their method of presen-
tation may bo varied by saying that two thousand pounds of
coal, iron, wheat, cotton, or other commodities, can now be

1 On certain of the railroads of the United States an even lower averapo
rate of freijjht has been reported. Tlius, for tlio year 1886 tlie Micliigan Cen-
tral Railroad reported 0.56 cent as their average rate per ton per mile for tluit
year, and the Lake Sliore and Micliigan Soutlicrn liailroad 0.55 cent for like
service.

4^i

'5^

310

ECONOMIC HISTORY.

c'itrri(>d on tlic beet mannRod railways for a distanoo of one
niilo for a sum ho small that outside of China it would bo
dillicidt to (ind a coin of equivalent value to f»;iv(3 to n boy as a
reward for carry iiif? an ounce i)ackago across a street, oven if
a man or boy could l)0 found in Europe or the United States
willing to give or accept so small a compensation for sueli a
service.

The following ingenious method of illustrating the same re-
sults has been also suggested : The number of miles of rail-
road in operation in vai'ious parts of the world in 1885 was
probably about 300,000.' Reckoning their capacity for trans-
portation at a rate not greater than the results actually
achieved in that same year in the United States, it would
appear that the aggregate railroad system of the world could
easily have performed work in 1885 eipiivalent to transporting
120,000,000,000 tons one mile. " IJut if it is next considered
that it is a fair day's work for an ordinary horse to haul a
ton G.7 miles, year in and year out, it further appears that the
railways have added to the power of the human race, for the
satisfaction of its desires by the cheapening of products, a
force somewhat greater than that of a horse working twelve
days yearly for every inhabitant of the globe."

In the year 1887 the freight-transportation by the railroads
of the United States (according to Poor's "Manual") was
equivalent to 60,001,009,996 tons carried one mile ; wliile the
population for that year was somewhat in excess of 60,000,000.
The railroad freight service of the United States for 1887 was
therefore equivalent to carrying a thousand tons one mile for
every person, or every ton a thousand miles. The average
cost of this service was about -f 10 per annum for every person.
IJut if it had been entirely performed by horse-power, even
under the most favorable of old-time conditions, its cost wouUl
have been about |200 to each inhabitant, which in turn would
represent an expenditure greater than the entire value of the
then annual product of the country ; or, in other words, all

1 The world's railway mileage for January, 1889, was probably in excess of
.370,000 miles. At the same date the telegrajjh system of the world comprised
at least 1,000,000 miles of length of line.

'8j

'f:

VIIANGES IN TRANSPORTATION.

311

that the people of the LFnitod Stntcw earned in 1H87 would not
p:iy the cout of tnin8|)(>rlation ulono of the amount of hucIi
Hervico rendered in tliat year, had it been performed by horse-
power exclusively.'

Less than half a century ago, the railroad was practically
unknown.''' It is, therefore, within that short period that this
enormous power has been placed at the disposal of every in-
habitant of the globe lor the cheapening of transportation to
him of the products of other people and countries, and for
enabling him to market or exchange to better advantage the
results of his own labor or services. As the extension of
the railway system has, however, not been equal in all parts
of the world — less tluui thirty thousand miles existing, at
the close of 1887, in Asia, Africa, and Australia combined —
its accruing benefits have not, of course, been equal. And
while all the inhabitants of the globe have undoubtedly been
profited in a degree, by far the greater part of the enormous
additions that havo been made to tho world's working force
through tho railroad since 1840, havo accrued to the benefit
of the people of the United States, and of Europe, — exclusive
of Russia, Turkey, and tho former Turkish provinces of nouth-
eastorn Europe, — a number not much exceeding two hundred
millions, or not a quarter part of the entire population of tho
globe. Tho result of this economic change has therefore
been to broaden and deepen rather than diminish the line
of separation between the civilized and tho semi-civilized and
barbarous nations.

Now, while a multi])licity of inventions and of experiences
have contributed to the attainment of sucii results under this
railroad system of transportation, the discovery of a method

1 One further interesting corollary of this exhil)it is thiit the avornRe rettirii,
in tho form of interest ami dividends, on the enormous aniount of capital which
has been actually expended in order tliat the present railway service in the
United States may bo performed, cannot be estimated as in excess of four per
cent per annum as a maximum.

* As late as 1840 there were in operation only about 2,800 miles of railway
in America, and 2,130 in Europe, or a total of 4,0!)0 miles. For practical pur-
poses, it may therefore be said that tho world's railway system did not then
exist ; while its organization and correspondence for doing full and efficient
work must be referred to a much later period.

utA:

It 1

Si'.

h'-

III

If."! !i *r

If- ,^ii

312

ECONOMIC HISTORY.

of making s^t'c? cheap was the one thing which was ahsolutoly
essential to nuilvC them finally possible ; inasmuch as the cost
of fmiuently replacing rails of iron would have entailed such
a burden of exi)enditure as to have rentlered the present
cheapness of railway transportation utterly unattainable.
Note, therefore, how ra])idly improvenacuts in processes have
followed the discovery of Bessemer, until, on the score of rel-
ative first cost alone, it has become economical to substitute
steel for iron in railroad construction. In 1873 JJessemer
steel in England, where its price has not been enhanced by
jtrotective duties, commanded $!80 per ton ; in 1S8G it was
profitably nuiuul'actured and sold in the same country for less
than •'^20 per ton !i Within the si.uc time the annual pro-
ducing capacity of a Bessemer converter has been increased
fourfold, with no increase but rather a diminution of the in-
volved labor ; and, by the Gilchrist-Tiiomas process, four men
can now make a given product of steel in the same time and
with less cost of material than it took ten men ten years ago
to accomi»lish. A ton of steel rails can now alst) be made
with live thousand pounds of coal, as compared with ten
thousand pounds in 18G8.

''Till' iinportaiK'o of tlio Besseinor invontidu of stool can bo host
undorstood bv looking at the world's production of tliat niotal in
1SS7. Tho i)i'odiiction of Bossonior stool in tlio oiglit cliiof iron
and stool jirodiicing countries of the world amounted in that year
to 7,2(il),7(i7 tons, as compared with (),0.'U,llo tons in 18S(), show-
ing an increase of 1,200,()',)4 tons, or twenty per cent. The sav-
ing oftectod I)y railway companies by the use of Bessemer metal
and tho additional security ii;ainod tiiereby is sliown by the fact
tliat a locomotive on the Groat Northern Kailway has acctun-

1 Tl)c tivoMfjo price of iron rails in Groat Britain for tlie. year 1S83 was L'-')
per ton ; stool rails in the saino market sold in 18()t) for .C\ Ss. per ton ; and in
1887 sales of ^tcel rails wore made in Holnium for .£3 lO.s. ($18.75) \wr ton, df-
livcrable at the works. The avcrajic price of steel rails in Pennsylvania (U. S.)
at the works, for 1880, with a tariff on imjiorts of §17 per ton, was S3U per
ton. Since the bofrinninf; of 1883 the maniifactnro of iron rails in tho United
States has been almost entirely discontinned, and dnrinji; the years from 1883
to 1888 there were virtnally no market qnotalions for them. The last recorded
average price for iron rails was ^\o\ per ton in 1882.

■I

CHANGES IN TRANSPORTATION.

813

111 ill

iriMi

yi'iw

luiw-

SilV-
lU'till

fact
h'oni-

tiis X'.'.
id in

\V. S.)

nitcnl

1883

Drded

jilislu'il, witli a iiuxk'ratc train-loud of passougor t-oaclu's, a statute
mile ill fifty seconds, or at tho rate of seventy-two miles per hour,
and makes a considerable continuous run at a speed of one mile per
minute, — a rate of railway travelling almost lieyond the dreams or
ivnticipations of tho renowned (Jeorge !Stei)lienson." The use of
stetd in jdai-o of iron in shi])-constriietiou may be said to date from
1878, and the ra[iidit3' with which the former has replaced the lat-
ter metal is very remarkable. Thus, in 1878 '* the percentage t>f
steel used in the construction of steamships in Clreat Ihitain was
only I'OU but in 1887 the percentage of iron used in proportion to
steel was only 0'1)3; or, in other words, in 1878 there was ninety
times as much iron as steel used for steamers, but in 1887 there
was more than eight times the quantity of steel nsed as compared
with iron for the same purjiose, and, as regards sailing-ships, the
(piantity of steel used in 1887 amounted to practically one half
that of iron." — Adi/irsii of f/ic President {Mr. Adaiiisun) of the
British Iron and Steel Association, JIiii/, ISbS.

Tlie api)lication and use of steam alone up to date (1880)
has accordinuly more than trebled man's working power, and
by enabling him to economize his physical strength has given
him greater leisure, comfort, and abundance, and also greater
opportuiiily for that mental training which is essential to a
liiglier develojiment. And yet it is certain that four fifths of
the steam-engines now working in the world have been con-
structed during the last (puirter of a C(>ntury, or sinci' iSOo.

One of the most momentous and what maybe called human-
itarian results of the recent great extension and cheapening
of tiie world's railway system and service is that there is
now no longer any occasion for the people of any country
indulging in either excessive hopes or fears as to the results
(if any particular harvest; inasnuich as the failure of crops
in any one country is no longer, as it was, no later than
twenty years ago, identical with high prices of grain ; the
prices of cereals being at present regidated, not within any
particular country, but by the combined production and con-
sumption of all countries made mutually accessilde by rail-
roads and steamships. As a matter of fact, indeed, the
granaries for no small portion of the sur}ilus stock of the

:>:4

m-f

314

ECONOMIC HISTORY.

B'V^ T

world's cereals are at the present time ships and railroad-
cars in the process of movement to the points of <rreatcst
demand for consumption. Hence it is that, since 1870, years
of locally bad crops in Europe have generally witnessed con-
siderably lower prices than years when the local crops were
good, and there was a local surplus for export.^

In short, one marked effect of the present railroad and
steamship system of transportation has been to compel a uni-
formity of prices for all commodities that are essential to life,
and to put an end forever to what, less than half a century
ago, was a constant feature of European commercial experi-
ence, namely, the existence of local markets, with widely
divergent i)rices for such commodities.

How much of misery and starvation a locally deficient har-
vest entailed under the old system upon the poorer classes,
through the absence of opportunity of sujiplying the deficiency
through importations from other countries and even from
contiguous districts, is shown by the circumstance that in the
English Parliamentary debates upon the corn laws, about the
3'ear 1840, it was estimated upon data furnished by Mr. Tooke,
in his '' History of Prices," that a deficiency of one-sixth in
the I']nglish harvest resulted in a rise of at least one hundred
jicr cent in the price of grain; and another estimate by

m^-

^ A ccntur.v npo every nation of Europe raised in ordinary years enough
grain to supply the needs of its own population, and tlie circulation of food
from country to country, and from province to proviocc, was restricted and
even generally proliihited. After the middle of the eighteenth century there
were indications that the domestic growth of wheat in England was falling
helow the consinnption of the people; hut this unpleasant fact was studiously
concealed — by the enormously expensive corn laws, which on the one hand
artificially stimulated agriculture and kept poor lands in cultivation, and, on
tlie other, restricted through high prices the consumption of bread — and was
not openly recognized for nearly half a century later. Subsequently the other
nations of Europe, with the exception of Hussia ami Austria-Hungary, have
experienced the same alteration in their food-producing capacity — in part due
to natural influences, and in part to artificial factors — which have turned the
attention of the people away from the cultivation of cereals into employments
tfiat promised to be more profitable; and they have found it cheaper to import
food than to grow it themselves. So that there are now no countries in Europe
save the two above mentioned that have a surplus product of wheat available
for export.

i. , .•• « ■

;e by

nough
food
and
there
iiUing
iously
liand
nd, on
d was
otluT
have
•t due
■d the
ments
iiport
urope
liable

CHANGES IN TRANSPORTATION. 315

Davcnant and King, for the close of the seventeenth century,
corroborates this apparently excessive statement. The esti-
mate of these latter authorities was as follows : —

For a dtHcit There will be a

equal to— rise in price of —

1-10 ' 3-10

2-10 8-10

3-10 1^-10

4-10 -'«-10

5-10 40-10

As late as 1817 the difference in France between the highest
and the lowest prices of grain in different parts of the country
was 45 francs per hectolitre. In 1847 the average dift'erenec
was 2G francs. Since 1870 the greatest difference at any
time has not been in excess of 3.55 francs. The following
table, given on German authority, and representing the price
(in silver gulden per hectolitre) of grain for various pe-
riods, exhibits a like progress of price equalization between
nations : —

rKHIOD.

182l-:]0
1H:JI-'40
1841-'o0
18ol-'tJ0
1801-70

EiiglnnJ.

10 25

y tio

015
940
8-80

Franco.

7tll
7 89

7-84
8' 5!)

Rclgium.

044

7 81
7'.)0
065
9-24

Prussia.

5fi5

0 41

807
7-79

For grain henceforth, therefore, the railroad and tlie steam-
ship have decided that there sliall be but one market — the
world ; and that the margin for speculation in this commodity,
so essential to the well-!)oing of Innnanify, shall be restricted
to very narrow limits ; the speculator for a rise in wheat in
any one country finding himself ])raetically in competition
with all wheat-j)roducing countries the moment he undertakes
to advance prices ; while fvbnormal values in one country or
market, or excessive reserves at one centre or another, are
certain to be speedily neutralized and controlled by the
influence of all countries and markets.

'Cil

^!1

W'i

li )' :

/■.

.;![1

I \

31G

ECONOMIC Ills TOR Y.

The movement and prices of wheat for the year 1888 fur-
nish a most remarkable ilUistration and oonfirmution of the
above statements, and also (as Sir James Caird has pointed
out) ''of the smoothness (at the present time) of the o])cra-
tions of trade nnder natural conditions." During the eleven
months of 1888, ending November 30(h, (Ireat .Uritain im-
ported a little more than sixty-seven million hundred-weight
of wheat and Hour. Jn the cornspouding eleven months of
1887 the foreign supi)ly was practically the same. There
was, however, a very great change in the sources of supply.
Thus, in 1887, North and South America furnished _/'()W//-;(//(('
million hundred-weight out of the Hlxfij-scvcn million Inmdred-
weight that Great liritain required; but in 1888 the harvests
of America were comparatively meagre, and sup|)lied Great
Britain with but twenty-nine million hundred-weight, leaving
a deficiency of twenty millions to be ol)tained from other
sources. Eastern Eui'o])C, and especially Russia, which were
favored during the year 1888 with splenilid weather and enor-
mous crops, were able to {tromptly make good the missing
twenty millions ; but the market changes and vicissitudes of
trade eonsequent on such an extensive transfer of the British
supplies of wheat were something extraordinary. Twenty
years ago, had Russia in any one year harvested a surplus of
wheat as large as she did in 1888, such surplus, through an
inability to cheaply and promptly move it to a market, would
have been not only of little monetary value to the prodiu'er,
but would probably by its unsalable presence in the country
have considerably lowered the market price of so much of the
crop as was required for home consumption. Under existing
conditions, however, great gain accrued to the Russian farmer
and to all the interests and nationalities employed in the
movements of liis product. A demand for shipping for this
special trade, which could not at once be fully sui)plie{l. also
occasioned a quick advance in ocean freights in all quarters
of the globe, in some instances to the extent of one hundred
per cent, and concurrently a revival of the industry of shiji-
building. On the other hand, this transfer of the wheat-
supply of Great Britain represented an immense change in

I;- :;!

CHANGES IN TRANSPORTATION.

817

ISO

M'S

red

llp-

lat-
iti

the carrying-tnido and business of the United States ; while
the Anieriean spceuhitor, recognizing the hii-al di'lieiency of
the -wheat-crop for 1888, and assiiniing that the American
supply of this cereal was the prime factor in determining its
European price, largely advanced prices (the aveiage price of
No. 2 red winter wheat in New York for the six montlis
ending Heeemher, 1888, having been 81.01 per l)ushel, as com-
pared with 84.2 cents for the corresponding period of 1887).
IJut in this they were disapi)ointed. The Eurojican prices did
not materially advance;' and as a consequence, while the
American pul)lic siiffercd, "the British consumer was enabled
to eat his loaf at the same ])ricc or a less price than he did in
the previous year." And if the consumer was not a student
of statistics, he would not have been in the least conscious
that it was Russian rather than American grain fi'om which
his bread was manufactured. In short, uniler the system of
commercial freedom which Oreat Britain has established, all
the farming interests on the earth grow with an eye to Iho
possible advent of the British people as customers; while
the latter, on their part, have so provided themselves with the
best C(|uipment for anniiiilating time and distance, that it is a
matter of indilTercnee to them whether the wh(>at-(lelds which
for the time l)eiug shall have their preference are located in
India, Russia, Dakota, South America, or Australia.

The changes cfTected by the cheapened means of transpor-
tation have moreover been equalled, if not surpassed, by those
•wrought through the lessened cost and increased amount of
l)roduction. The world's total product of pig-iron increased
slowly and regularly from 1870 to 1870, at the rate of about
2j percent jter ainium, but after 1870 j)roduetion increased
enormously, until in 188:] the advance among all nations was
82.2 i)er cent in excess of the make of 1870, the increase in
the product of the United Kingdom being 43 per cent, and
that of other countries 100.1 per cent (Tcxt'nnonii of Sir LoW'
tliitn. Bell, British Commission, 1881!). Such an increase

' English wlie.it solil Doc'eiiiljor 25, 18S8, at Xl lis Pul. a (luiirtiT, niraiiist
CI lis". 2f/., or 2^ cents a busiiol more tlian at the corresponding date in 1887,
and Is. lOrf. less than in December, 1880.

P ":

lav

;

!f I:

ih'A

}i,;(!i

818

ECONOMIC HISTORY.

(after 1879), justified perhaps at the moment, was far in
excess of the ratio of increase in the world's population, and
for a terra of years j^reatly disitroportionate to any increase in
the world's consumption, and finally resulted as has been
before shown (sec Wells, Chapter 1.), in an extreme depres-
sion of the business, and a remarkable fall of prices.

By reason largely of the cheapening of iron and steel, the
cost of building railroads has also in recent years been greatly
reduced. In 1870-71, one of the leading railroads of the
Northwestern United States built 12G miles, which with some
tunnelling, was bojuled for about 840,000 per mile. The same
road could now (1889) be constructed, with the payment of
higher wages to laborers of all classes, for about 820,000 per
mile.

The power to f'rn.ivate earth, or to excavate and blast rock,
is from five to i. i. un, afi great ..s it was when operations
for the constructi'-i' Suez Canal were commenced, in

1859-00. The machinery seiit to the Isthmus of ranamn,
for the excavation ;f the canal at that point was computctl
by engineers as cajabie f pciiicni' 'g the labor of half a
million of men.

The displacement of muscular labor in some of the cotton
mills of the United States, Avithin the last ten years, by im-
proved machinery, has been from thirty-three to fifty per cent,
and the average work of one operative, working one year, in
the best mills of the United States, will now, according to
Jlr. Atkinson, supply the annual wants of 1,600 fully clothed
Chinese, or 0,000 partially clothed East Indians. In 1S40
an oiierative in the cotton-mills of Rhode Island, working
thirteen to fourteen hours a day, turned off 9,000 yards of
standard sheeting in a year; in 1880 the operative in the
same mill made about 80,000 yards, working ten hours a day.
In 1840 the wages were 8170 a year; in 1880 the wages were
$285 a year.

The United States census returns for 1880 report a very
large increase in the amount of coal and copper produced
during the ten previous years in this country, with a very
large comparative diminution in the number of hands cm-

is. ■ ■

CHANGES IN TRANSPORTATION.

319

prking

•ds of

1 llio

liny.

were

very

lluocd

very

em-

ployed in these two great mining industries ; in anthracite
coal the increase in the number of hands employed having
been 33.2 per cent, as compared with an increase of product
of 82.7 ; while in the case of copper the ratios were 15.8 and
70.8, respectively. For such results, the use of cheaper and
more powerful blasting agents (dynamite), and of the steam-
drill, furnish an explanation. And, in the way of further
illustration, it may be stated that a car-load of coal, in the
principal mining districts of the United States, can now
(1889) be mined, hoisted, screened, cleaned, and loaded in
one-half the time that it required ten years previously.

The report of the United States Commissioner of Labor for
1886 furnishes the following additional illustrations : —

"In tlio manufacture of agricultural implements, specific evi-
denco is submitted, showing tliat six liundred men now do the
work tliat, fifteen or twenty years ago, would have required 2,145
men, — a displacement of 1,545.

" Tlie manufacture of boots and shoes offers some very wonder-
ful facts in this connection. In one large and long-establislied
manufactory the proprietors testify that it would recpiire live hun-
dred persons, working hy hand processes, to make as many women's
boots and shoes as a hundred persons now make with the aid of
machinery, — a displacement of eighty per cent.

" Anotlier firm, engaged in the manufacture of children's shoes,
states that the introduction of new machinery within the jiast
thirty years has displaced abont six times the amount of liand-
labor re(pnred, and that the cost of the i)roduct has been reduced
one half.

"On another grade of goods, the facts collected by the agents
of the bureau show that one man can now do the wiU'k wliicli
twenty years ago re(piire(l ten men.

"lu the manufacture of flour there has been a displacement of
nearly rhreo fourths of the manual labor necessary to produc(> the
same product. In the manufacture of furniture, from one half to
three fourths only of the oM nund)er of jiersons is now required.
In the manufacture of wall-paper, tlie best evidence puts the dis-
l)laeement in the proportion of one hundred to one. In the mauu-
fa(;ture of metals and metallic goods, long-established firms testify
that machinery has decreased manual labor 33^ per cent."

\ ' \

\ j
•A

Hi''

[i M

1: .

'Wl

320

ECONOMIC III STORY.

I f'

In 1845 the boot and shoe makers of Massachusetts made
ail average production, under the then existing conditions of
manufacturing, of 1.52 pairs of hoots for each working day.
In 1885 each employe in the State made on an avoragc 4.2
pairs daily, while at the present time in Lynn and Haverhill
the daily average of each person is seven pairs i)cr day,
" showing an increase in the power of production in forty
years of four hundred per cent." ^ . . .

But in respect to no other one article has change in the
conditions of ])roduction and distribution been productive of
such momentous consequences as in the case of wheat. On
the great wheat-fields of the State of Dakota, where machinery
is applied to figricultnre to such an extent that the require-
ment for manual labor has been reduced to a minimum, the
annual product of one man's labor, working to the best advan-
tage, is understood to be now equivalent to the i)roduction of
5,500 bushels of wheat. In the great mills of Minnesota, the
labor of another one man for a year, under similar conditions
as regards machinery, is in like manner equivalent to the
conversion of this unit of 5,500 bushels of wheat into a thou-
sand barrels of Hour, leaving 500 bushels for seed-purpo.ses ;
and, although the conditions for analysis of the next step in
the way of results are more dillicult, it is reasonably certain
that the year's labor of one and a half men more — or, at
the most, two men — employed in railroad transportation, is
eiiuivalont to putting this thousand barrels of Hour on a dock
in New York ready for exportation, where the addition of a
fraction of a cent a pound to the price will further transport
and deliver it at almost any port of Europe.-

1 Aildress by Mr. F. W. Norcross, November, 1888, before the Boston Boot
and Slioe Club.

- When the wli^at readies Xow York eity, and comes into t)ie possession
of a great liakor, who lias established the manufacture of bread on a large
scale, anil wiio sells the best of bread to the working-peoiile of New York at
tlie lowest possible price, we find that one thousand barrels of tlour can be con-
verted into bread and sold over the counter by the work of three persons for
one year. Let us add to the six and a half men already named the work of
another man six months, or half a man one year, to keep the machinery in re-
pair, and our modern miracle is that seven men suffice to give one thousand
persons all the bread they customarily consume in one year. If to these we

CHANGES IN TRANSPORTATION.

321

i-t

JOt

311-

'or

Hero, then, wo have the labor of three men for one year,
workiiij; with machinery, resulting in the i)roducing all the
flour that a thousand other men ordinarily eat in a year,
allowing one barrel of flour for the average consumption of
each adult. Before such a result the question of wages paid
in the different branches of tlour production and transporta-
tion becomes an insignificant factor in determining a market;
and, accordingly, American flour grown in Dakota, and ground
in^Minneapolis, from a thousand to fifteen hundred miles from
the nearest seaboard, and under the auspices of men paid from
a dollar and a half to two dollars and a half per day for their
labor, is sold in European markets at rates which are deter-
minative of the prices which Russian peasants, Egyptian
"fellahs," and Indian " ryots," can obtain in the same mar-
kets for similar grain grown by them on equally good soil,
and with from fifteen to twenty cents per day wages for their
labor.

On the wheat-farms of the Northwestern United States it
was claimed in 1887 that, with wages at twenty-five dollars
per month and board, for permanent em[)loy(!s, wheat could be
produced for forty cents per bushel ; while in Rhenish Prussia,
with wages at six dollars per month, tlio cost of production
was reported to be eighty cents per bi'shel. . . .

A great number of other similar and equally remarkable
experiences, derived from almost every dc])artment of indus-
try except the handicrafts, might be presented ; but it would
seem that enough evidence has been offered to prove abun-
dantly that, in the increased control which mankind has
acquired over the forces of Nature, and in the increased utili-
zation of such control — mainly through machinery — for the
work of production and distribution, is to be found a cause
sulVicient to account for most if not all the economic disturb-
ance which, since the year 1873, has been certainly universal
in its influence over the domain of civilization, — abnormal to
the extent of justifying the claim of having been unprece-

aJil three for the work of providing fuel and other materials to the railroad
ami the balier, our final result is that ten men working one year serve bread
to one thousand, — Edwaud Atkinson, Distribution of Products.

:ri?

■m

ECONOMIC HISTORY.

V '■'

dented in character, and which bids fair in a greater or less
degree to indelinituly continue. Other causes may have and
doubtless liave contributed to such a condition of alVairs, but
in this one cause alone (if the influences referred to can be
properly considered as a unity) it would seem there has been
suilicicnt of potentiality to account not only for all the
economic i)henomena that are under discussion, but to occa-
sion a feeling of wonder that the world has accommodated
itself so readily to the extent that it has to its new con-
ditions, and that the disturbances have not been very much
greater and more disastrous.

A question which these conclusions will naturally suggest
may at once be anticipated. Have not these same induenccs,
it may be asl^ed, been exerted during the whole of the present
century, and in fact ever since the inception of civilization ;
and are there any reasons for supposing that this induence
lias been different during recent years in kind and degree
from what has been heretofore experienced '! The answer is,
Certainly in kind, but not in degree. The world has never
seen anvthing comparable to the results of the recent svstem
of transportation by land and water, never experienced in so
short a time such an expansion of all that pertains to what is
called business, and has never before, as was promised at the
outset of this argument, been able to accomplish so much in
the way of production with a given amount of labor in a
given time. Thus it is claimed in respect to the (lerman
Empire, Avherc the statistics of production and distribution
have doubtless been more carefully studied by exports than
elsewhere, that during the period from 1872 to 1S85 there
was an expansion in the railroad trallic of this empire of
ninety per cent ; in marine tonnage, of about a hundred and
twenty per cent; in the general mercantile or commercial
movement, of sixty-seven ])er cent ; in postal matter carried,
of a hundred and eight per cent; in telegraphic despatches,
of sixty -one per cent ; and in bank discounts, of two hun-
dred and forty per cent. During the same period ])opula-
tion increased about eleven and a half per cent ; and from
such data there has been a general deduction that, " if one

ClIANaiaS L\ TliANSPOIiTATIOX.

323

hat is
at the
uch in
ov in a
onuan
butiou
s than
thoi'o
pirc of
ed and
nicrcial
carried,
latches,
ivo hun-
])opuhi-
id from
" if one

unit of trade was the ratio to one unit of popuUitiou in
(Icrniany in 1872, the proportion in 18SD was more than
ten units of trade to one of popuhition." IJut, be this as it
may, it can not bo doubted that whatever has been tlic in-
dustrial expansion of Oerniany in recent years, it has lieen
at K-ast e(iiialled l)y Hnj^Iand, approximated to by France,
and certainly surpassed ijy the United States.'

There is very nmeh that contributes to the support of the
idea which lias been sutrgested by JM. Laveleye, editor of the
" .Mnniteur des lnt(!rets Alatdriels," at Jh'ussels, that the
industrial activity of the greater part of this century has
been devoted to fully equipping the civilized countries of
the world with economic tools, and that the work of the fu-
ture in this same sphere must be necessarily that of repair
and replacements rather than of new constructions. I>ut a
more impoitant inference from this same idea, and one tbat
fully harmonizes with and rationally explains the phenomena
of the existing situation is that, the equipment having at last
been made ready, the work of using it for |)roduction has in
turn begun, and has been iiroseculed so eiliciently that tlie
worlil has within recent years, and lor the first time, become
saturated, as it were, under existing conditions for use and
consumption, with the results of these modern improvenuMits.

Again, although the great natural laboi'-saving agencies
had been recognized and brought into use many years prior
to 1870, their powers were long kept, as it wore, in abcyaneo;
because it required time for the instrumentalities or methods,
by which the world's work of production and distribution was
carried on, to adjust themselves to new conditions; and until
this was accomplished, an almost infinite number and variety
of inventions which genius had produced fur facilitating and

' A statistical oxliitiit of tlic prnwtli of Rritisli iiiilii«trial intcrosts diiriii}^
tlie rfi(iii of (^lu'i'ii Victorifi (fifty years), piililislicd in 1887, in coniirctiiiii witli
tlie "Queen's .Jubilee," sliowed tlmt the production of coal lias increased in
(ircat Britain diiriiiK tliis ju'riod from .".(i,000,(M)0 tons to 1 17,000,01)0 tons per
aniiuni; and tliat manufactures had increased in about an eciual ratio with the
output of coal — that is to say, hail about quadrupled (fo\ir hundred per cent).
Meanwhile, the population of the United Kingdom increased only thirty-three
per cent.

•li

":!l

;j24

ECONOMIC HISTORY.

: « , !i

accelerating industrial evolution were matters of promise
rather limn of consuniuiatiun. I>ut, with the extension of
|io|»ul!ir eduoaliou ami the rapid dilTusion of intellij^encc, all
new aehievenieiits in .science and art have been brought in
recent years so nuicii more rapidly " within the sphere of the
every -day activity of the people" — as the nt)ted (Jcrman in-
Nt'Utor, Dr. Werner Siemens, has expressed it — " that stages
of devel()i>mrul which ages ago recpiired centuries for their
consunjination, and which at the beginning of our times
HMpiired decades, now complete themselves in years, and
not uufre(iuently present themselves at once in a state of
completeness."

It shoidd also bo remembered that fifty years ago the
"sciences" were little more than a mass of ill-digested facts
or " unassorted laws," and that in the departments of physics
and chemistry comparatively little had l)een accomplished
in the way of industrial application and direction. To say,
indeed, what the world diil not liaAe half a century ago is
almost ('(piivalent to enumerating all those things which in
their understanding, possession, and common use the world
now regards as constituting the dividing lines between civili-
zatidu and barbarism. Tlius, fifty years ago the railroad and
the locomotive wen^ practically unknown. The ocean steam
marine dates from lS:5y, when tiic Sirius and ( J reat West-
ern— the two j)ioneer vessels — crossed the Atlantic to New
York. Electricity had then hardly got "beyond the stage of
an elegant amusement," and the telegraph was not really
brought into practical use before 1844. The following is a
further partial list of the inventions, discoveries, and ajjpliea-
tions whose initial point of "being" is not only more recent
than the half-century, but whose fuller or larger development
in a majority of instances is also referable to a much more
recent date: the mechanical reapers, mowing and seeding
machines, the steam plough, and most other cminiMitly labor-
saving agricultural devices ; the IJessemer process and the
steel rail (ISf)!); the sul)marino and trans-oceanic tclegrai)h
cables (1800 ); photography and all its adjuncts ; electro-plating
and the electrotype ; the steam-hammer, repeating and breech-

CHANGES IN TUANsroiiTATloN.

325

loading firc-anns, and rilled and strid cannon; gnn-t'otton
and dynamite ; llio industrial nso of Indiu-ruliltcr and gutla-
porclia ; the stcani-oxcavator and .steani-di'ill ; liio sewing-
niacliinc ; the piactical use of tho electric li,i;lit; the applica-
tion oi' dynamic electricity as a motor for machinery ; the
steam liru-engiuo ; the telephone, microphone, spectroscope,
und the process of spectral analysis; tho polariscope ; the
compound steam-engine; the centrifugal process of refining
sugar; tho rotary printing-press; hydraulic lifts, cranes, and
tdevators ; tho " regenerative " furnace, iron and steel ships,
pressed glass, wire rope, petroleum and its derivatives, and
aniline tlyes ; the industrial use of the metal nickel, cotton-
seed oil, artificial butter, stearinc-candles, natural gas, cheap
postage, and the postage-stamp. Electricity, which a very
few years ago was regarded as something wholly immaterial,
has now ac(piired a suiliciently objective existence to admit of
being manufactured and sold the same as pig-iron or leather.
In short, to one whoso present memory and life-experiences
do not extend over a i)erlod of time more cxtensivi than
what is represented by a generation, the recital of the econ-
omic experiences and industrial conditions of the generation
next preceding is very much akin to a recurrence to ancient
history. . . .

■./■

' . u

'\\

pgi-aph
nlating
jrecch-

: I ' 5 !

326

ECONOMIC HISTORY.

XIII.

THE FRENCH INDEMNITY.

THE PAYMENT OF THE FIVE MILLIARDS.
Blackwood's Edinburgu Magazine, Feb. 1875, pp. 172-187.

AS soon as it became known, five years ago, that France had
to hand over ;£ 200,000,000 to Germany, it was generally
predicted that the financial equilibrium of Europe would be up-
set by the transfer of so vast a sum from one country to another,
and that the whole system of international monetary relation-
ship would be thrown into confusion. Apprehensions of an
analogous nature were abundantly expressed when the two
French loans successively came out. Wise bankers shook
their heads in Frankfort, London, Amsterdam, and Brussels,
and assured their listeners that, though the money would prob-
ably be subscribed, it could not possibly be paid up under five
years at least. And yet the whole of this vast transaction
was carried out between 1st June, 1871, and 5th September,
1873 ; twenty-seven months sufficed for its completioii ; and
not one single serious difficulty or disorder was produced by
it. The fact was that the commercial world had no idea of
its own power ; it thought itself much smaller than it really
is ; it failed altogether to suspect that its own current opera-
tions were already so enormous that even the remittance of
five milliards from France to Germany could be grafted on to
Ihcm without entailing any material perturbation. Such,
however, has turned out to be the case ; and of all the les-
sons furnished by the war, no other is more practical or more
strange. The story of it is told, in detail, in a special report
which has recently been addressed by M. L<;on Say to the
Commission of the Budget in the French Chamber. It is so

THE FRENCH INDEMNITY.

827

curious and instructive that it is well worth while to analyze
it. It may, however, be mentioned, that the order of exposi-
tion adopted by M. Say is not followed here. To render the
tale clear to English readers, the form of it is changed.

But before explaining the processes by which the war in-
demnity was paid, it will be useful to recall the principal
features of the position in which France was placed by
her defeat. It is now computed that the entire cost of
the campaign amounted, directly und indirectly, to about
jE 410,000,000 ; and this outlay may be divided into five sec-
tions, — the first three of which were declared ofiicially by
the Minister of Finance in his report of 28th October, 1873,
while the two others have been arrived at by a comparison
of various private calculations. They are composed as
follows : —

Sums paid by France for her own military operations —

War expenses to the end of 1872 £76,480,000

Food bought for Paris before the siege .... 6,781,000

Assistance to families of soldiers, etc 2,000,000

Balance of war expenses payable out of the Liquida-
tion Account 21,942,000

Total of French expenses proper . . . £107,203,000

Sums paid to Germany —

Indemnity

Interest on unpaid instalments of indemnity
Maintenance of German army of occupation
Taxes levied by the Germans

Total paid to Germany

£200,000,000

12,005,000

9,915,000

2,468,000

£224,478,000

3. Collateral expenses —

Cost of issue of the various war loans, rebates of
interest, exchange, and cost of remitting the
indemnity £25,247,000

Loss or diminution of taxes and revenue in conse-
quence of the war 14,567,000

Total of collateral expenses

£39,814,000

! !

828

ECONOMIC HISTORY.

4. ReijuLiitions in cash or objects —

Supplied by towns or iudiriduals, including the
£8,000,000 paid by Paris, estimated at . . £15,000,000

5. Loss of profits consequent upon the suspension of trade —

Estimated at £30,000,000

R£suM^.

1 £107,203,000

2 224,478,000

3 39,814,000

4 15,000,000

5 30,000,000

General Total £416,495,000

Now, what has France to show against this ?

Her annual gains before the war were put by M. Maurice Block
("Europe, Politique et Sociale," p. 317) at £900,000,000; un-
fortunately he does not tell us how much of this she spends,
and how much she lays by ; but there is a prevalent impres-
sion in France that her annual savings amount to X80,000,000.
We shall mention presently a calculation which seems to in-
dicate that, during the later period of the Empire, they must
have amounted to a considerably larger sum than this ; but if
we admit it, for the moment, as correct, it would follow that
the cost of the war, in capital, represented five years' ac-
cumulation of the net profits of the country. It is not, how-
ever, in that form that a proportion can be established
between liabilities and resources ; the measurement must be
made, not in capital, but in interest; for it ie of course, in the
latter form alone — that is to say, in new taxation to pay in-
terest on loans — that France now feels the pressure. That
new taxation, when completed (it is not all voted yet), will
amount to about £20,000,000 a year; and that is the real
sum which is to be deducted from the annual profits of the
country in consequence of the war. Now, if tliose profits
were only £80,000,000, and if they are not progressing, but
standing still at their previous rate, this deduction would ab-
sorb almost a third of them ; but as they are continually ad-

THE FRENCH INDEMNITY.

329

i-s'

ild ab-
,lly ad-

vancing — as every branch of trade in France is active — as
foreign commerce, which is generally accepted as a safe test of
national prosperity, was one fifth larger in 1873 than in 18G9
— it may fairly be supposed that, after paying the .£26,000,000
of war taxes, France is effectively laying by as much as she
did in the best years before the war, whatever that really was.

After this rough indication of the situation, we shall better
understand the story of the five milliards, it is scarcely pos-
sible to disassociate it from the general attendant circum-
stances of the position as a whole ; the two should be kept in
view together.

The payment of the indemnity, and the detailed conditions
under which that payment was to be made, were stipulated in
the three treaties or conventions signed successively at Ver-
sailles, Ferrieres, and Frankfort, in January, March, and May,
1871. It was determined by the last-named treaty that " pay-
ments can be made only in the principal commercial towns of
Germany, and shail be effected in gold or silver, in English,
Prussian, Dutch, or Belgian bank-notes, or in commercial
bills of the first class." The rates of exchange on coin were
fixed at 3f. 75c. per thaler, or at 2f. 15c. per Frankfort florin ;
and it was agreed that the instalments should be paid as
follows : —

30 days after the suppression of the Commune . £20,000,000

During 1871 40,000,000

1st May, 1872 20,000,000

2d March, 1874 120,000,000

Total £200,000,000

The last X 120,000,000 were to bear interest at 5 per cent.

It umst be particularly observed that no currency was to
be " liberative " excepting coin, German thalers, or German
florins. The other forms of money which the German Gov-
ernment consented to accept did not constitute a definite pay-
ment ; it was not until those other forms were converted into
their equivalent value in thalers or in florins that the pay-
ment became " liberative." This was the essential basis of
the bargain.

- > »■*■■

' III

111

■*t

880

ECONOMIC HISTORY.

Furthermore, it was declared that the instalments must be
paid at the precise dates fixed, neither before nor afterwards ;
and that no payments on account should be allowed. It was
not till July, 1872, that leave was given to make partial pay-
ments, but only then with the express reservation that such
partial payments should never be for less than j£ 4,000,000 at
a time, and that one month's notice of them should be given
on each occasion. Under no circumstances, from first to last,
was any payment permitted on account.

Two main conditions, therefore, governed the operation : the
first, that all payments made in anything but coin or a proper
German form were to be converted into a German form at
the expense of France ; the second, that the proceeds of all
bills or securities which fell due prior to the date fixed for
an instalment, were to be held over until that date. The
dates themselves were ultimately changed, — the last payment
was advanced six months ; but, with two special exceptions,
those conditions were rigorously enforced throughout the
entire business.

As the annexation of Alsace-Lorraine to the German
Empire obliged the Eastern Railway Company of France to
abandon all its lines within those provinces, it was agreed
that Germany should pay for them, that the price should be
£13,000,000, and that this sum should be deducted from the
indemnity. This w.as the first exception. The second was
that Germany consented, as a favor, to accept ,£5,000,000 in
French bank-notes. By these two means the £200,000,000
were reduced to .£182,000,000. But thereto must be added
£12,005,000 for interest which accrued successively during
the transaction, and which carried the total for payment in
coin or German money to £194,065,000. And even this
was not quite all, for France had to furnish a further sum of
about £580,000 for exchange, and for expenses in the con-
version of foreign securities into German value. This last
amount does not appear to be finally agreed between the two
Governments; there is a dispute about it; but as the differ-
ence extends only to a few thousand pounds, the final
sum remitted may be taken at about £194,645,000 or at

THE FRENCH INDEMNITY.

881

.£199,645,000, if wc include the ^5,000,000 of French bank-
notes. The <£13, 000,000 credited for the railways carried
the entire total of the indemnity, with interest and ex-
penses, to jE 212, 645, 000.

The first payment (in French bank-notes) was made on
June 1, 1871. As the first loan was not Ijrought out until
the end of the same month, £5,000,000 were taken for the
purpose from the Bank of France ; but with that exception
and subject to temporary advances (as will be seen hereafter),
the funds for the entire outgoing were provided by the two
great loans; the interest was, however, charged separately
to the budget. Consequently, the money was derived suc-
cessively from the following sources : —

The value of the Alsace-Lorraine railways . . £13,000,000

Loan from the Bank of France 5,000,000

Out of the first loan for two milliards . . . 62,478,000

Out of the second loan for three milliards . . 120,102,000

Out of the budgets of 1872 and 1873 (interest) 12,005,000

Total £212,615,000

It is not necessary to go into the details of the dealings
with the Bank of France, of the subscription of the loans, or
of the dates and proportions of the payments made upon
them. It will suffice to observe, as regards those elements
of the subject, that though the payments on the loans came
in, nominally, before the dates fixed for the delivery of the
corresponding instalments to Germany, they, practically,
were not always available in time. The reason was that,
though the actual handing over to Berlin took place at fixed
periods, the remittances themselves were necessarily both
anterior and continuous, their proceeds being accumulated
by French agents until wanted. The result was that the
French jMinistry of Finance was under the necessity of mak-
ing almost constant advances on account of those remit-
tances. Each time a payment was coming due, the means
of effecting it had to be arranged long beforehand. It is
not possible to collect or carry £20,000,000 at a week's
notice, so the Treasury was of course obliged to keep on

832

ECONOMIC HISTORY.

I.i '"'

r (

buying bills as fast as it could get tlicm, in order to have a
stock in hand for future needs. That stock fluctuated a
good deal, and there is some contradiction in M. Lcdu Say's
report as to its amount; but it appears, at one period, to
have ranged for months as high as £30,000,000, ])art of the
cash to i)ay for it being provided temporarily, until the loan
moneys came in, either by Exchequer bills or by the Bank
of France in notes.

There was, moreover, towards the end of the operation, an
advance made specially in gold by the Bank of France; and,
as the circumstances under which it was effected jtreseut a
certain interest, it will be worth while to state them. In
May, 1873, the French Treasury had before it the obligation
of providing £40,000,000 between oth June and otli Septem-
ber; £24,000,000 of bills were in hand for the purpose, and
about ,£10,000,000 of instalments were coming due on the
loan; but there was, at the best, a clear delicit of about
£0,000,000 in the resources available. The Bank of France
agreed to supjily that sum; but as, at that very moment, the
circulation of its notes had reached £112,000,000, and as it
had, consequently, only a margin of £10,000,000 between
that figure and its total authorized issue of £128,000,000, it
seemed dangerous to withdraw £6,000,000 of that margin in
notes, and it was decided to effect the loan by preference in
gold. It is worth remarking that this is probably the lii'st
example, in the history of national banks, of a bank electing
to make an advance in gold, as being less " dangerous " than
the delivery of its own notes. The French Treasury was of
course well j)lea8ed to obtain bullion, which was immedi-
ately "liberative," instead of notes, which would have had
to be converted into bills at various dates. But, after all,
this aid did not suflice; the incomings from the loan did not
arrive, practically, in time for use, and the Treasury had to
supply a further final balance of £9,700,000 to enable the
concluding payment to Germany to be regularly efleetcMl.

Finally, it may be noted that there were thirty-three de-
liveries to Germany, the com[)onent parts of each of which
were so scrupulously verified by the representatives of the

THE FRENCH INDEMNITY.

833

Berlin Finance Department that several days were occupied
by the counting, on each occasion. Indeed, wlien thalers
had to bo told up, the maximum got through in a day never
exceeded £32,000.

After these preliminary explanations we can now liegin to
show the means by which the transfer was performed. We
will divide them, in the lirst instance, into four categories: —

1. German bank-notes and money collected in

Franco after the war £1,201,000

2. French gold and silver 20,'19l»,000

3. French Banknotes 5,000,000

4. Bills 109,9J2,000

Total £199,645,000

The first observation to be made here is that the German
money found in France amounts to a singularly large sum;
indeed, if this i)roof of its importance had not been furnished
no one could possibly have suspected that the invatlers, for
their personal and private necessities, had spent anything
like so much. Their wants, as soldiers, were supplied dur-
ing the war, either by stores sent from Germany or by recpii-
sititms levied in France; until peace was signed they paid
for no objects of public or official need; all this cash repre-
sented, therefore, individual expenditure. And manifestly
the real total nnist have been still larger. It cannot bo
8U]>])osed that the whole of the German money spent in
France was reserved by its French proprietors for sale to
their own Government; it maybe taken for granted tliat a
considerable portion of it went back straight to Germany
through ordinary channels; and it maybe guessed thiif the
entire sum expended by the e(m(|uerors, out of their individ-
ual resources, in (Jerman money, was at least a half more
than the amount here shown, and that it consequently at-
tained £0,000,000. The questicm is curious, and this is the
first time that any ofTieial information bearing on it has been
published. It remains to add, as regards this element of
the jiayment, that, as might have been expected, the Germnn
money was included, almost entirely, in the earlier inatal-

^- Ul\

•■I

.^4

Ws.'

Ill J

884

ECONOMIC HISTORY.

mcnts, and that scarcely any of it appeared in the later
remittances.

The j£ 20, 492, 000 of French money wai- composed of
£10,920,000 in gold and X9,572,000 in silver. IJiit it
should be said at once that these figures express only the
amounts transmitted by the French Government oflicially,
and do not comprise the quantities of French gold bought by
Germany or forwarded by private bankers to cover their own
bills; these other (pumtities will be referred to ])re8('ntly.
iiO,000,000 of the Government gold were sujtplied by the
Bank of France ; the rest was bought from dealers or fur-
nished by the Treasury. Of the silver £5,810,000 were
obtained in France, and .£3,732,000 were drawn, in bars,
from Hamburg, and coined in Paris.

But these direct remittances of German and French cash
represented after all only about one eighth of the entire pay-
ment; the other seven eighths were transferred by bills, and
it is in this section of the nuxtter that its great interest lies.
It will at once be seen that, as no remittance in paper becanu^
" liberal ive" until it was converted into an equivalent value
in thalers or in florins, the French Treasury could obtain no
receipt for an instalment until all its various elements had
been so converted ; its o))ject, therefore, was to obtain tlie
largest possible amount of bills on Germany, so that, at their
maturity, their proceeds might be at once available in the
prescribed form. But at the same time it was quite im-
possible to collect in France alone, within the time allowed,
anything approaching to the quantity of German bills re-
quired. The result was that it was found necessary not
only to hand in a large amount of bills on other countries,
which had to be converted into German values at the cost
of France, but also, as regards the ])urchase of direct bills
on Germany, to effect it frequently in two stages. In tlu;
first stnge l)ills were bought in Paris, as they offered, on
England, Belgium, or Holland; in the second, a portion
of the proceeds of those bills was reinvested, in those coun-
tries, in other bills on Germany itself. Of course the
French Government was very anxious to employ every sort

THE FRENCH INDEMNITY.

335

ih cash
re ]>ay-
Is, and
si lies,
became
t value
ain no
iiad
n the
their
n the
im-
owed,
s re-
f not
utries,
10 cost
bills
n the
d, on
)ortion
coun-
c the
y sort

of moans to increase the quantity of German bills, and to
avoid leaving to the German Treasury the right of convert-
ing foreign \y^\^(iv into German value at French expense. At
the origin of the operation the importance of this element of
it was not fully realized; but by degrees the French minister
discovered that it was far more advantageous to effect his
conversions himself than to leave them to be carried out
anyhow at Berlin. The result of this discovery was that,
while j£4r)4,000 were paid to Gerjuany for the cost of con-
version on the first two milliards, only .£11,000 were paid to
her under the same head on the remaining three milliards.
After the experience of the first twelve months, France sought
for bills on Germany wherever she aid get them all over
Europe ; and it may be added that she was somewhat aided
in the effort by the sjjecial position of Germany, who, at the
moment, was in debt considerably to England not only for
the war loans she had issued there, but also on commercial
account as well. But, as has just been mentioned, a good
many of these bills were substitutions for each other, and
consequently the amount of paper shown as bought is con-
siderably larger than the real sum paid to Germany, the
reason being that a good deal of it appears in the account
twice over. The following table gives the composition of
the total (piantity of bills bought by France : —

Bills on Germany, bought direct, in thalers . £02,550,000

" " " " " in florins . 9,518,000
" " " bought, in thalers, with the

proceeds of other bills . 42,218,000

" " " in rt'ichsmarcs 15,172,000

" " England, in sterling 01,780,000

" " Hamburg, in niarcs-banco .... 21,432,00!)

" •' Belgium, in francs 2n.8.")0,OOO

" " Holland, in florins 12,9.')2,000

Total £234,508,000

These bills were paid for mainly in French bank-notes;
and the average rates of exchange at which they were bought
came out as follows, for the entire operation : —

■i

■41

■\& 'It

^ f

:]%

336 ECONOMIC HISTORY.

Fnnoi.

Thalers 3.71)10

Pounds sterling 25.4043

Marcs-banco 1.0089

Belgian francs 1.0001

Dutch fieri n.s 2.1500

Frankfort florin.s 2.1037

Keichsmarcs 1.2528

Every one at all acquainted with oxchangps will recognize
how low, luulcr such circumstances, these prices are; and
will ask, with wonder, how they can have been kept down to
such averages on so large an undertaking.

But though the foregoing table shows the quantities of
bills, of each kind, that Avere bought by the French Govern-
ment as vehicles of transmission, it in no way indicates the
form in which the money was in reality handed over to the
German Treasury. IMost of the above figures Avcro largely
modified by conversions and substitutions; and when all the
bills had been cashed, when the whole payment had been
effected, it appeared that the real totals of each sort of cur-
rency which had been finally delivered to Germany were as
follows : —

French bank-notes £5,000,000

" gold 10,02(1,000

" silver 9,572.000

German notes iind cash 4,201,000

Bills — Thalers 90,412,000

" —Frankfort florins 9,101,000

" —Mares-banco 10,008,000

•' —Keichsmarcs 3,100,000

" — Duteii florins 10,020,000

" —(and in silver) — Belgian francs . . 11,828,000

«' —Pounds sterling 25,400,000

Total £199,045,000

This catalogue shows at last in what shape the bills were
really utilized and made "liberativc," either in German
money direct, or by the equivalent of foreign value in thalers
or florins. The differences of composition between this defi-

':-*i

THE FRENCH INDEMNITY.

337

and

nitivc list and that of the bills originally bought arc only
partially explained by M. Ldon Say ; it is not, however,
necessary, nor would it be interesting, to follow out precisely
the various conversions which took place ; we will only men-
tion, as an illustration, that out of the £01,780,000 of original
bills in England <£;U,687,000 were converted here into other
bills on ^Germany, that .£25,490,000 were sent to Berlin in
sterling bill, and that the balance remains unexplained. As
regards the direct delivery by Franco herself, of English,
Belgian, or Dutch bullion, the report says nothing; it is
only stated incidentally that £720,000 of Belgian francs
were sent to Berlin in metal, and that the London agency of
the French Treasury bought £1,132,000 here in gold and
silver, which probably was also shipped to Berlin ; but these
are the sole allusions to the subject. It is probable, as in-
deed has always been supposed, that the bullion which was
withdrawn, during the operation, from London, Brussels,
and Amsterdam, was not taken for French account, but by
Germany out of the sums at her disposal in each place after
the bills on that place had matured.

We have now before us, in a condensed form, the main
elements of this prodigious operation ; we see now what were
the conditions which regulated it, where the money came
from to realize it, how that money was successively employed,
and in what shapes the payments were at last effected.

We recognize that France herself provided, in

her own notes and coin . . . £25,492,000

•« •« that German money and bills on

Germany produced .... 120,815,000

•• " that hills on England, Belgium,

and Holland contributed . . 47,338,000

were
:'rman
llialers

defi-

Total £199,645,000

Here, however, wc must repeat that the Paris bankers who
sold drafts on Germany were obliged to some extent to remit
cash to meet them. On this point M. Leon Say goes into
calculations which we will mention presently; for the mo-
ment it will suffice to say that, according to his view, the

H- r

Uiti ' f

888

ECONOMIC HISTORY.

t'fft'ctivc transmission of bullion from Franco to Germany,
tliroiiKli privah! hands, from 1871 to 1873, did not exceed
jCH,OO(),000 for the purposes in viewliere. He acknowledges,
as will be seen, that the entire exportation of French gold
during the three years reached (probably) jC 40, 000, 000; but
still ho ex|)resses the opinion that <iC8, 000,000 were all tliat
was required, as a balance, to cover the Frendi bills on
Berlin. Of course this is a (piestion which nobody can de-
cide; but, to lookers on, it does seem somewhat contrary to
tlic probabilities of such a case that this sum can luive been
suflicient. It may, perliaps, have been enougli, as M. Say
says, to balance accounts in the long run, but it is dillicult
to believe that it was not considerably exceeded while the
operation was under cxecuticm. Furthermore, M. L(^on Say
makes a mistake of .£10,000,000 in liis account, as we shall
sli(»w, and for that reason, wo belicvo that j£ 18, 000, 000
instead of .£8,000,000 were required, so putting the whole
total of French bullion temporarily used, including the
.£20,000,000 of the Government, at about £38,000,000, or
a little more than one-sixth of the entire sum to pay. As
this is certainly a maximum, it follows that France got out
of this great debt with a payment of only 18 per cent of it,
at the outside, in her own money. And there is good rea-
son to suppose that all the gold exported by her has come
back, and that her reserves of bullion are reconstituted at
present as they were before the war.

And now we can approach the most important and inter-
esting point in the whole transaction. IIow came it that
i; 170, 000, 000 of bills could be got at all ? We have given a
general answer to the question at the commencement of this
article; we will now consider it more in detail, partly with
the aid of ^f. Leon Say's report, partly by reference to other
sources of informatiim. It appears, as might have been ex-
pected, that various measures were employed by the French
Government in order to render possible the collection of
such a huge mass of paper. In the first place, particula
facilities and temptations were offered to foreigners to in
duce them to subscrilic to the two loans; commissions vary-

TIfE FRENCH IX DEM MTV.

339

\n\t, Iroin J lot per (H'lit were ofTcrctl (o tlicm, the ()l>j<,H't \n\-
iiig to U(:(|iiir(i llu! powci' of drawiiijf on tlicm lor the; aiuount
of their iiistahnt'iilrt. Secondly, cverylhini^ wuh done to en-
courage anticipated payincntH oi' those inrttalnicntrt, ho as to
liastcn tlie dales at whieh they eoiild Im diawn lor. Thirdly,
art some fear was felt that the second loiin lui^dit |M)Hsildy not
he eag('rly siil)seril)ed, ct)ining as it did so iinniedialely alter
a previous issue which was not quite paid up, it was thought
desirahle to get a portion of it guaninteed hy hankers. Ihit
in order not to risk giving to those hankers a largt; connnis-
sion for nothing, it was stipulated with them, as a part of
tlu! arrangement, that they should supply tin; Treasury with a
fixed quantity of foreign hills. By the two former plans of
action the immense amount of <£7O,92(),O00 of drafts on
other countries was ohtained, £1 "),0t50,0()0 of which were on
account of the first loan, and ii')4,9ti(),000 on account of tlu;
second; and it may he remarked at once, hefore we proceed,
that though this figure supplies decisive evidence of the fact
that at least one third of the two great loans was paid uj)
hy foreign suhscril)ers, it is certain that nearly tin; entire
au'iount has heen bought hack since, and that almost the
whole of the new stocks is, at the present moment, in French
hands. By the third plan the hankers who formed fh(! syn-
dicate, and it may he mentioned that fifty-five of \\w. first
houses in Eiu'opc' were associated for the purpose, euiraged
tn supply £28,000,000 of paper. C(Hise(pi(Mitly, hy these
admiral)ly devised scliemes, £98,920,000 of drafts were
successively procured, and the exact quantity to he bought
in the open market was reduced to £71.0:12,000.

It must, however, be observed that, though we can regard

these drafts on foreign countries for loan instalments as a

special product of the occasion, and are therefore justifi(>d in

cniuiting them apart, the same cnnnot anyhow be said of the

28.000,000 of bills furnished by the syndicate of bankers.

"he latter were evidently composed of ordinary coinmer-

•'\\ paper, and conseqjiently must be added to the total

which had to be su|)j)lied from commercial sources proper,

80 letting that total at £99,032,000. Now bills of this

in ."

If ' :'-

■Hi

•„|ll
'1

3J0

ECONOMIC HISTORY.

sort necessarily imply an effective counter-value of some
kind; so, as we have already seen that at the otitsidc only
.£18,000,000 of that counter-value was sujjplied in bullion,
there remained at least <£81,03l\000 of bills which must
necessarily have been based on ordinary trading or financial
operations. What were those oj)eration8? Veiy often the
general character of a bill is indicated on its face; but in
this case a test of that kind could not be ajjplied, not only
because there were so many bills to handle that a serious ex-
amination of their nature was impracticable (there were in
all one hundred and twenty thousand of them, of every con-
ceivaljle amount, from ,''-40 to £200,000), but also because
every jiossible kind of business transaction must have been
reijresented in that accinnulation of securities from all ])aris
of th'' world. Bank credits, circulation bills, settlements for
goods delivered, remittances on account of future purchases,
drafts against the coupons of shares and stocks, special paper
created for the occasion, — all these forms, and many others,
too, were, according to M. Ldon Say, incliuled in the collec-
tion. It was not possible to seek out in detail the origins and
meanings of such a varied mass ; liiit we may take ]\r. Say's
general description of it to be true, not only because it cor-
ros])onds with probabilities and e.\i)erience, but .dso because
he was himself Minister of Fin<ince during a part of the
operation, and has therefore, a personal knowledge of its
main circiunstances. Researches, however, which could not
be attempted with the bills themselves, may be practically
and usefully pursued if they are directed towards the general
signs and symptoms of the financial state of France. It is
prol)able that a relatively small amount of bills was created
specially to be sold to the French Ciovernment. We may,
indeed, take the supposed £18,000,000 of exported bullion
as. indicating the apjtroximate extent of uncovered or
manufactured paper; all the rest was evidently Itascd on
mercantilo transactitms. Now, we know that mercantile
transactions imjily the delivery of pro))crty of some kind,
and that the two main forms of propert; , commercially, arc
merchandise and stf»"ks. It is therefore necessary, in order

THE FRENCH INDEMNITY.

341

to arrive at an idea upon the question, to <;lance at the ae-
tual position of France in her dealings witli other nations in
these two values.

We have already alluded to the development of French
trade, and to the general inlluence of that development on
the payment of tlie war indenmity as a whole; but we must
go into a few figures here in order to make the bearings
of the subject clear. The value of the foreign commerce
of France — importations and exportations together —
was £207,000,000 in 1871, i: "203, 000, 000 in 1872, and
£301,000,000 in 1873. Now it will be at once recognized
that the amount of bills necessitated by this quantity of
commerce supplied a solid foundation for carrying the addi-
tional paper whose origin we are now seeking to discover.
M. Say is of opinion that scarcely any part of the indemnity
bills was furnished by the current cinnmercial trade of the
country; but, as wc have just seen that the (pumMty n;quired
from trading sources was £81,000,000, or about £40,000,000
per annum, it does seem to be possil)le, notwithstau<liiig his
contrary imj)ression, that some portion of that relatively
reduced quantity nuiy have been found in the ordinary com-
mercial movement. For instance, it may reasonably 1)0
argued — as iudci'd M. Say liimself admits — that bills
drawn against French exports to (Germany or England would
bo included, to some extent, among those which were olTcnMl
to the Government. There seems to be no reason why this
should not have been so.

JJut if M. Say considers that the habitual cnmm(M-cial
paper of France has not been of much servic(> to the 'i'reas-
ury in its cimduct of this operation, he IntKIs a totally dilTer-
ent opinion with reference to the influence of th(> foiciuii
investments of the French people. What he says on this
subject is new and curious, and is well worth repeatiuL'.

He begins by statinir, with an ap]»earanee of nmch truth
and reasim, that for many years b(>i"on' the war, Freiu'h
capital was being ctmtinuously invested in foreign securities;
that the sums bo placed have been estimated Ity different
economists at from £30,000,000 to £00,000,000 a year.

342

ECONOMIC HISTORY.

H(?rc, however, before wc follow out his argument, we must
open a parenthesis, and observe that if even the smaller of
tliose ligures is exact, the computation of ^E 80, 000, 000 of
annual savings, which was alluded to at the commencement
of this article, must be altogether wrong. It is manifestly
inadmissible that France can have been investing in foreign
countries three eighths of lier whole net yearly profits.
Consecpiently, we may legitimately suppose that the popular
impression about the ^£80,000,000 is a delusion, and that
France is in reality laying by a vast deal more than that.
If so, the ease and speed with which she has recovered from
the war would be comprehensibly cxj)laincd. M. Ldou Say
goes on to tell us that French investments in foreign stocks
amounted in 1870 to so large a total that the dividends on
them represented, at that date, about ^fG, 000, 000 a year,
for which sum drafts on other countries were of course put
into circulation by its French proj)rietors. Furthermore,
the revenues of the strangers who live in Franco come to
them princi|)ally from their own country; and it is estimated
tliat before the war £10,000,000 or £12,000,000 of such
inconics were drawn for annually in the same way. Conso-
(pieiitly, on this showing it would api)ear that somewlicre
about 'i::3r),000,000 or £40,000,000 of French drafts on for-
eign countries were created every year from those two
sources. It is, however, certain that this quantity has
dimini.shed since the war, by the departure of some of the
strangers whr) used to live in France, and also hy the sale,
in order to provide funds for subscriptiim to the two new
loiins, of some of the foreign securities held in France. JJut
M. I/on Say considers that the annual diminuticm, on both
III ads togetlKM" does not exceed £4,000,000, and tliat at least
C.O, ()()(), 000 of paper, rei)resenting cash due to France (m
a<-eount of ineoines from abroad, irrespective of commerce
projierly so called, were drawn in 1871 and 1872. In sup-
port of these eonaiderati(ma, he mcMitiona, among other
facts, tliat in 18r)S and 18»;n the coupons paid in Paris on
Italian stock alone amounte<l to £3,400,000; wliile in 1872
and 1873 they fell to £2,400,000. On this one security,

THE FRENCH INDEMNITY.

848

therefore, which is, however, probably held in France in
hirger proportions than any other foreign stock, the diminu-
tion of income since the war amounts to .£1,000,000. With
these figures and probabilities before him, he concludes by
cxi)ressing the confident opinion that, as French purchases
of foreign stocks have ceased, to a great extent at least, since
1870, and as remittances of French money to pay for such
purchases have consequently ceased as well, the drafts on
other countries for coupons and revenues became entirely
disposable for transmission to J3erlin, and that it is here that
the main explanation lies of the facility with which the
bills were found. This theory is ingenious, and it is proba-
bly in great part true.

Tiie movement of the precious metals forms a separate
element of the subject, and one that is not easy to trace out;
for in France, as in most other countries, the public returns
of the international trade in sjiecie are very incomplete.
We know how much gold and silver are raised from mines,
and how much thereof is coined by each country; but we are
very ill informed as to what becomes of them when once they
have issued from the mint. On this head also, however, M.
Ldon Say has collected some valuable facts. The Custom-
house Reports inform us that during tlie three years from
1871 to 1873 £53,400,000 of bullion were exported, and
=£50,480,000 were imported; on this showing, therefore, (ho
loss of bullion was only £2,020,000. But as private int'or-
mation gave good reason to believe that the auiounts nuist
luive been in reality ecmsiderably larger, calculations have
l)een made in ord<>r to arrive at a more correct conclusion.
It appears, from ofTicial ))ublioatious, that the stock of gold
and silver in the (/iiristinu world i^ si.|ti)0sed to have in-
creased l)y £371,000,000 fr.wu 1H4!) to 1H()7; but the aug-
mentation has not occurred in both the metals, it has taken
j)lace in gold only; the quantity of gold is greater by
£428,000,000, while, in consequence of exportations to
Asia, the quantity of silver has diminished by £57,000,000.
Xow out of this £428,000,000 of new gold, France alone, in
the first instance, received more than half; at least we arc

i si ;

i!(|

844

ECONOMIC HISTORY.

justified in supposing so, from the fact that, during the same
period the Paris mint converted £230,000,000 of bar gold
into French coin. Of course this quantity of gold did not re-
main permanently in Prance ; its whole value was not added
in reality to the general French stock of motal; as gold
arrived in France silver went away; indeed it is imagined
that, out of the £200,000,000 of silver which have been coined
in France since the year 1800 only £40,000,000 remained
in the country in 1809. It is, however, calculated that the
£100,000,000 of hard cash, gold and silver together, which
were said to really belong to France in 1848, have doubled
since; and M. Wolowski, who is regarded as an authority
on such questions, declared in the French Chamber, on 4th
February last that, in his ojjinion, the national stock now
ranges between £200,000,000 and £2r)0,000,000.

But whatever be the interest of these computations, and
useful as it nuiy be to count up the amount of bullion which
luxs come into France, we must look elsewhere for informa-
tion as to the quantity of it which the conse(iuence8 of the
war took oiit. We know that the German mint melted
down, for its own coinage, £33,880,000 of French napoleons.
It is also known, says ^f. Ldon Say, that the Bank of Eng-
land bought nearly £8,000,000 of the same sort of money
between 1870 and 1873. Here, therefore, wo can trace the
passage out of France, since the war, of nearly £42,000,000
of her gold. But, as Clcrmany drew from Loudon £1,080,000
of the napoleons which she put into the furnace, it may be
that that sum was included in the £8,000,000 of the Bank
of England, and is therefore counted twice. For this reason
the amount renlly sent to Genuany and England may be put
at £40,000,000.' M. Ldon Siiy adds, that the Bank of Am-
sterdam l)ought a further £3,000,000 of French gold; but,
as he fancies thai this may not have come direct from
Franco, he does not add it to the total, and he holds to
£40,000,000 as representing probably the effective loss of
gold which France had to support af;«"'r the war. Of ih's
sum £10,920,000 were exported to Bclin, as we have al-
ready shown, by the French Government itself; the other

THE FRENCH INDEMNITY.

345

£29,080,000 were consequently carried out by private firms
for transmission to Berlin, and for various other purposes.
Silver, however, arrived in considerable (luantities U) replace
the gold. <£9, 500,000 of silver were coined in l*aris be-
tween 1870 and 1873; and the Custom-house returns, which
are almost always below the truth, show an importation of
£12,1(10,000 of it. From all this, M. Say eoueliules that
£40,000,000 of gold left France; that £12,000,000 of silver
came to her; and that the £28,000,000 of difl'erence between
the two rej)resents the real total loss of bullion which the
war entailed.

But in making this calculation M. Ldim Say commits a
most wonderful mistake; he entirely cmiits to take accoimt
of the £9,.'i72,000 of silver which the French fJovernment
sent to Berlin, and which must, of coiu'se, be iuMed to the
out-going. When this strange error is corrected, the loss
becomes, not £28,000,000, but £38,000,000, of which the
Government exported £20,000,000, leaving aitpnrently
£18,000,000 instead of £8,000,000, as the sum crmliibiited
by private bankers. Thit, ditTerence of £10,000,000 in the
issue of the calculation gives some value to another com-
putation which M. Leon Say has made, but which woidd
have had no foundaticm if tliis error had not (>.\isted. \h\
says, prol)ably with some truth, thirt the (piantity of money
in circulation in a coimtry remains usually at the same
general total during the same period, whatever l)e the nalun^
of the various elements wliich cimipose it. fh' then goes
on to argue that as the issue of Freiu^h bank-notes was
£44,000,000 higher in September, 1873, than in June, 1870,
tluit increase ought to approximately indicate the amount of
metal withdrawn in the interval from circulation, and re-
placed by notes. But according to his theory, that amount
of metal did not exceed £2S,000,000, leaving an excess of
£10,000,000 of notes, which excess he exi)lains by saying
that it represents an equal sum in gold which the French
people had hidden away. Now everybody knows that the
lower classes of the French people do hide mcmey, do
" thesaurise, " as they say; but such an explanation of the

,r.'

, f?i

.'A\

ail

346

ECONOMIC IIISTOUr.

Si.?* '<■

)

missing .£16,000,000 is so purely imaginary that it cannot
merit any serious credit. The theory assumes, lu)\vever, a
very dill'erent form when the error of the .£10,000,000
is coi-rected. In that case wo have an extra issue of
jE 44, 000, 000 in banli -notes, corresponding to a loss of
£3^,000,000 in gold and silver; and tliere the two figures
get sulHciently close to each other for it to be possible that
there really is some relationship between them, without be-
ing forced to resort to the possible but improbable solution
of thesaurising.

Consecpiently, with all these various considerations be-
fore us, it seems reasonable to suppose that the natures of
the bills employed to pay the war iiulemnity were of <hreo
main classes, and were grouped approximately in the follow-
ing proportions: —

Drafts for fiireign subscriptions to tlie loans . £70,020,000

IJills .against French bullion siieci.-illy exjiorted 18,000,000
Cominorcial bills and drafts for dividends and

revenues from abroad 81,032,000

General total of bills £109,952,000

Before we j)roceed to sum up the case, and to try to draw
from it the teaching it contains, there is one more detail
which is worth explaining.

AVe have alluded to the coining in Paris of a certain quan-
tity of Hamburg silver. To make the story of it clear, it is
necessary to remind our readers that, according to the ccm-
stituticm of the Banli of Ilaujburg, which dates from 1019,
accounts were kejit by it in a money called mai'c-banco, and
credits were opened by it in that money on the dt'posit of
silver, coined or uncoined, the value of that silver being
calculated pure. By degrees the marc-banco, though only an
iniiigiuiiry money, grew to be the universal denominator em-
ployed in the home and foreign business of IJamluirg; it ac-
(piired an importance greater tiian that of the etl'ective money
of many filerman States. But when the Em|)ire was estab-
lished, and it was decided to introduce a gold standard into
CJermany, it became essential to suppress the marc-banco,

THE FRENCH INDEMNITY.

847

for it had the double defect of representing silver and of form-
ing a separate value outside CJernian monetary unity. So it
was abolished by law and ordered to disappear, — the plan
adopted being that the l>ank of Hamburg should li(piidato
its deposits by paying olT, in i)ure silver, the marcs-banco in
circulation. It was, however, stipulated that this right
should cease on loth February, 1873, and that after that
day, all perstms who held securities in marcs-banco should
lose the old right of receiving pure silver, and should only bo
entitled to half a thaler for each marc-banco, that being the
value of the silver represented by the latter. Now the
French Treasury had bought, as we have seen, .£21,000,000
of hills in marcs-banco, and conseipiently possessed the right
of claiming silver for such of them as fell due before 15th
February, 1878, while all the rest from that date were paya-
ble in thalers. The thaler was "liberative," while the
marc-banco was not; but the pure silver which the marc-
l)anco represented could be coined into five-frane pieces, and
l)e delivered to the (Jerman (Government at the rate of 3
francs 7") centimes per thaler. Tlu^ result was that, being
by far the largest holder of marcs-l)an('o paper, the French
Treasury was able for a time to control the Hamburg niiirket,
and it naturally used for its own advantage the [)ower which
this position gave it. The ITamlturg Hank was utterly una-
ble to deliver the quantity of silver for which France lield
acceptances in marcs-ltanco; it was absolutely in the hands
of the French Minister of Finance; that functionary appears,
however, to have acted very fairly, — to have only asked for
silver in moderation, and to have profitecl l)y his ])ower
solely to ol)tain conversions into thalers on good condi-
tions. The result was, as we have said, that £3,732,000 of
Ifamburg silver came to the Paris mint, partly through Oov-
crnment importations on marcs-banco bills, partly through
{)rivate speculators, who followed the example of the Treas-
ury, and pressed the Ifandiurg Hank for metal.

Such are, in a condensecl form, the essential features of
the history of this extraordinary operation; and now that wo
have completed the account, we need no longer delay the

-M?=l

v^yt

'^•fyi

348

ECONOMIC HISTORY.

m*i

expression of our admiration of the consununate ability with
which it was comhu'tod. Its success may bo said to have
been, in every point, complete; we cannot detect one sijj^n of
a grave hitch or of a serious error in it. It does the highest
honor to (he ollicials of the French Treasury, nwd proves that
(hey possess a perfect knowledge of exchange and bank-
ing both in their minutest details and in their largest
aj)plications.

When we look back ui)on the subject as a whole, three
great facts strike us in it: the lirst, (hat France is vastly
rich; the second, that tlie trade of Europe has attained such
a magnitude that figiu'cs are ceasing to convey its measuie ;
the third, tluxt the aggregate eonnnercial action of nations is
a lever wliich can lift any (inaneial htad whatever. As we
see the transai^tion now, with these explanations of its com-
position before us, we cannot fail to recognize that it has
been rather Eiu'opean than purely French, All purses
helped to provide funds for it; all trades supplied bills for it.
In every previous state of the world's connncrce such an
operation would have been impossible; fifty, thirty, twenty
years ago, it would have ruined France and have disoi'dered
Europe; in our time it has come and gone without seriously
disturbing any of the economic condidons under which avc
live. France, out of her own stores, has quietly transjjorted
to lierlin a (piantity of bullion larger than the whole ordi-
nary stock of (h(? Hank of England; and yet she shows no
sign of having lost a sovereign. She has paid in her bank-
notes for ,£170,000,000 of transmission pa])er, and yet the
(pianiity of lu-r l»ank-notes in circulation is now steadily
diminishing. Such realtities as these would ])C altogether
inconceivable if we did not see their cause behind them;
(hat cause is simple, natural, indis])utable; its name is the
present situation of the world's trade. The vastncss of that
trade explains the mystery.

IJut yet with these advantages to help it, the operation
had, in addition to its enormous size, certain special dilh-
culties to contend with. As one example it may be men-
tioned that among the elements of perturbation and of

1^;

THE FRENCH INDEMNITY.

349

conscfpient impediments to remittance, the Frenc^h Govern-
ment liiid to keep in view the fact that, at the very moment
wlion it needed all the monetary facilities it conld obtain,
the German Government was locking iij) gold in its cellars,
in order to provide metal for the new coinage it was [)re-
paring. This was a most unlucky coincidence; but it ex-
isted, and it had to be met. The German plan was to hold
back the issue of the new money until £30,000,000 of it
were ready to be exchanged for the old silver currency; con-
secpiently, no silver could be expected to leave Gernumy
until simie months after the date at which the gold had been
brought in there; and during the interval France knew that
she must suffer from the withdrawal of so much bullion from
the general market. But she foiuid assistance in an unex-
pected way; silver did flow back to her at once from Ger-
many, without waiting for the issue of the new gold currency.
France paid Germany j£l),572,000 in French silver; but this
was of no use to the latter; on the contrary, it Avas an em-
barrassment to her, for she was on the point of exporting a
quantity of her own silver, which would become superfluous
as soon as the new gold got into circulation. So, for this
reason, a considerable portion of the French five-franc })icces
came back immediately to France, and helped to reconstitute
her store.

And all the other difficulties were, more or less, like this
one. At first sight they looked grave and durable, l)ut they
diminished or disap|)eared as soon as they were seriously
attacked; the whole thing turned out to l)c an astcmishing
example of obstacdes overrated. The unsuspected wealth of
France, assisted l)y an extent of general commercial dealings
which was more unsuspected still, mnnngod to g»^t the better
of all the stumbling-blocks and impossibilities which seemed
to bar the road. France has lost £400,000,000, one half of
which she has delivered to her enemy, and yet she is going
on prospering materially as if nothing at all had happened.
But it is now (piite clear that she never could have nuinage<l
all this alone; she could have found the money, but never
could she, single-handed, have carried it to Germany. It is

I. III? .' ■«

3r)0

ECONOMIC JH STORY.

vi:

fir I

i^'

m^-..

!§■

;

there, far more tlmn in siilwcriptions to her loans, that tlio
worUl has really helped her; she has lujught back the stock
that foreii^ners subscribed lor her, but she could not do 8()
without tilt; bills they S(jld her. If she had been left to her
own resources for the transport of the indeiuuity to I>erlin
she would probiil)ly have l)een forced to send two thirds of it
in bullion, and to empty her i)eople's pockets for the pur-
pose; the vastness of the world's trade and the unity of in-
terests which connncrce has produced, permitted her to use
other nations' means of action instead of her own.

Viewed in this light, the payment of the live milliards
becomes an enormous piece of admirably well-arran<i(;(l in-
ternational banking, in which nearly all the count inghouses
of Northern Kurope took a share. That delinition of it is
worth knowing, and we may be glad that the inforuudion
given in M. Say's report has enabled us to arrive at it.

APPLICATION OF TIIK INDEMNITY.

FitoM Koi.n's "Thk Condition of Nations" (Trans, hy Mrs.
Bui:wEii), I'l'. 290-"_'99.i

When the North Cicrman Confederacy was formed, not-
withstanding the transfer of the proceeds of the customs and
of other indirect imposts to the Coiifeileracv, and in s|;iie of
considcnilile contril)Utions by the difTcrent States, the reve-
nues did not sullice to cover the expenditure, especially that
of the establishment of a larger sea force. A deficit was the
result, and loans had to be raised.

In the yoar 1><08 tlic debt of tlin Confeder.iey

nmonnted to il.T 10,000

bi isc.iito 1,:M-J,:J:58

And ill 1870 it rose to l,7.3.'j,74:l

\\h\U; ill 1S71 it was I,!t88,882

The war made the contraction of a further debt unavoida-
ble, both for the States of the North (Jerman Ccmfederacy

1 London: George Bill & Co., 1880.

THE FIIENCII INDEMNITY. 861

n3 well as for thnso of South Oormnny. Tlio sum immedi-
ately expemled on the war must have amounted to about
X")!, 000, 000. The result of the war led to a eomplete revo-
lution in the condition of finance. We extract the following
data from the memorandum which was laid before the Diet
Ity the Imperial Chancellor on February 18, 1H74, with
rcirard to the a|)plieation of the French war contribution: —
The HrcciptH amounted to —

1. War contribution by France £200,000,000

2. Interest upon this till the payment of the

debt lL>,0IT,G78

Total £'-'12,017,078

3. Added to tiiis, contribution of the City of

Paris 8,025,879

4. Customs levied in France and local contri-

butions, less cost of collection, so far as
these sums were not employed for siiecial
military purposes, about 2,600,133

Total receipts £222,082, T'O

Of this sum £12,(>9!\000 must be deducted for the acqui-
sition of railways ))elon;jjin,u; to a private company in Alsace-
Lorraine, the remainder being, therefore, .£209,082, GDI.

ExpeniVitiiren.

1st. Expenses for which hxed sums were granted by Im-
perial di'crees, namely: —

For the Imperial Invalid Fund £2S,0.-n,000

For the completion of German fortresses . . . 10,S(»(),()00

For fortresses in Alsace-Lorriiine G,0:57,G12

For raih'oads in the Iin|ierial Dominions, par-
ticularly the W'ilhelin-Luxeniliourp lino . . 8,210,883

For Imjierial war treasures, to bo kept in the
Julius tower of the fortress of Spaiulau . . 6,000,000

Compensation for tlie deerease in the revenue
causeil by alterations in the management of
tiio customs and taxes 2,008,907

Imperial Treasury fund, for the administration
of tlie marine, and for unredeemable advances
for the management of the I n4)erial army . . 1,503,000

h *m

■ t • I

sf ■:■

Wty^^

852 ECONOMIC HISTORY.

For p^rnttiilics to guiionilH fur diHtinguished sor-
vicHS 600,000

For aid to (Icrmans banished from France . 300,000

For rxerciso ground for the Artillery-trial Com-

MiisHJon 200,250

Ex|K.'n(iiture for jronoral pur|ioses defrayed by
the Imperial Truaitury iu 1U70 and IH71, and
the additional outlay for troops garrisoned in
Alsace-Lorraine till Iho end of 1872 . . . 1,240,600

Fjnatly, c£6,19r),181 jjrriintcd ity nii Imperial decree of July
8, 1878; for iimrine, i: 4, -200,7 83; iMiililinjrs for the Diet,
jC1,2<)0,000. Sii|»|tlcin(Milal cxpcnHcs of war, inclii<liii<r
various other jrraiits, inakiuf^ total of X72,ll(»,704.

To this must he adtlccl those outlays the aiuount of which
dej)eiuls on the sum reipiired for the attainment of the ohjcct
in view. They may bo estimated as follows: —

1. Compensation for damages by war and for

war £5,0'r),000

2. Compensation to German ship-owners . . . 810,000

3. For war medals 45,000

4. Invalid ponsions in consequence of the war of

1870, 1871, and 1S72 1,513,466

5. Additi(mal for payment of invalid pensions,

payable out of the Imperial Invalid Fund
during the time that that fund was not per-
fectly established 897,000

6. War expenses connected with the French War

costs indemnification, which, according to
Art. 5 of the decree of .July 8, 1872, are to
be treated as common charges, viz. : —

(n) For arming and disarming of fortresses . 1,477,078

(h) For siege material 1,400,223

((•) For marine administration 1,402,876

((/) For temporary arrangements for coast de-
fence, etc 148,121

(e) For laying down and repairing railroads,

etc , necessary for prosecuting the war 718,797
(/) For the establishment and working of
telegraplis outside the limit of the tele-
graph system 30,418

THE FRENCH INDEMNITY.

853

(ij) For temporary civil administration in
France, especially for niiiiiagcmeiit of
railways in AUacu-Lorruiiio, till the
end of lb71

£50;),057

Further for nervices wliicli from July, 1,
1871, were in connection with the war,
viz.: —

(A) Management of the post

(/) Managument of telcirraplis

(A) Increased expenditure in tlio manage-
ment of the army, over and above that
in time of peace, consequent ujion the
occupation of French territory . . .

(/) Further estimates for general expenses
to bo defrayed by the Imperial Treas-
ury, about

83,7.-10
««,500

3,150,000

37,500

The total aiijoiint of oxixMiditiirc fiiiiil to ho dcdiictcMl from
the rcvonnc ainoiints thorcfon! to il'.M), liio, ')44, l(>avintf a
remaiiuior of jG11'.*,Oo7,11>7 to Ito dividftl. It is, liowcvcr,
dt'sirahlc to retain a moderates roHcrvc; for |>(»8sii)l(* dcfificn-
cic'S in tht; t'stiniatfil irccipts, in oxpcotation of greater
requirements in the e.\|ieiiditure.

The Sinn to l)e divided may, therefore, l»o estlmatecl in
romid numlMM-s at £118,000,000. Tlu-ee fourths of this
were, in accordance with Artichi 0 of the statute of the Hth
of July, 187:5, set apart f<u' military |mr|Mises, in the propor-
tion specified in the ahove Article G, and one fourth to lie
divided aceordini^ to a fixed standard of 1871. The sum for
division is shared as follows: —

1. Bavaria £13,.380,001

2. Wiirtemborg 4,27.'), l:JO

3. North German Confederation 79,r)17,lo7

4. Haden 5,(>1!(.!»77

5. Hesse l,|(K»,()r)l

„ , , \ !)17,H50

For the payment of expenses i , j. ,,g,j r.^\

About £22,. 500, 000 of the entire war contriluiticm were,
in obedience to Imperial decrees, applied to civil objects,

jfli

:' i

f ' .

':i

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K . ■'!

■ f

rn-

i-.

m ' 1

hhI

354 ECONOMIC HISTORY.

the rest for purpo"^ os of war. The sums which fell to the
separate States in the division were also mostly expended
in defraying the costs of war, and the repayment of loans for
war.

According to the statute of 2d of July, 1873, £10,027,021
of the sum to be divided were set apart for restoring the
army to a war-footing and increasing its general cflicicncy.

We find f"onx a report of the Commission on the State debt,
under date April, 1874, that the Imperial Invalid Fund pos-
sessed paper of nominal value —

Iiithalers £23,081,742

In South German guldens 933,187

In Dutch guldens 213,"" <

In English pounds sterling 918,760

In dollars 3,55(3,800

And in banks 393

The fortress building fund possessed at the same time a
nominal value of X5, 229, 795 in effects, and a capital of
£2,789,913 in the Prussian bank. . . .

THE LIQUIDATIONS OF 1873-WQ.

855

XIV.

THE LIQUIDATIONS OF 1873-76.

FuoM Giffkn's Essays i.n Finance,' vv. 107-131.

"IT 7IIAT are the characteristic marks of the jrioat dcpres-
'^ ' sion of trade clurinj^ t)ie last three or four years V It
is now ascertained that such, depressions are periodical. They
recur at toleraldy regular intervals, folhjwing in the wake of
equally regular periods of great prosperity in trade, when
everybody makes profits or seems to make them. The alter-
nation has no doubt its roots in human nature, which lends
itself to an ebb and How, an action and reaction in alTairs.
The depressions, like the periods of prosperity coming before
them, have also many features in common. Just as the pros-
perity is shown by the prevalence of good credit, an active
money market, and a high range of prices for Ijuth securities
and commodities, so the depression is marked by a low range
of prices, heavy failures, bad credit, and con3e(iuently a slug-
gish money market. IJut each has likewise its own sjK'cial
features and incidents. The crisis in which it begins, or
which it j)roduce3, indicates some special development ni
trade at the time, or some special disease in it, — the favorite
business of a country changing from time to time, and a ccm-
stant tendency existing to go to an extrem(> with the momen-
tary fashion. We propose, then, to inipiiie what are tbeso
special features in the n^cont depression, — tiiis })roc(!eding
beiiig likoiy, it is obvious, to be more instructive than a mere
examination and record of those features which most depres-
sions have in common. There is an additional reason for
this course. An impression prevails tliat the pnsent stagna-
tion of trade is unprecedented in intensity and duration, and

' London : George Bell and Sons, 1880.

«H

■1

356

ECONOMIC HISTORY.

:!'

tliat it is likely to be pcnn.ancnt. A similar impression has
ol'ten been found to prevail at such times, and it will be inter-
esting to inquire whetiier it is now, for once, well founded, or
whether in reality the depression is not much less than those
to which trade lias often been subject, and is not as likely as
any otlier to terminate in a new period of pros])erity.

Endeavoring to answer the (picstion we have put, what wo
are first struck with, in a general survey of the last three or
four years, is the universality of the depression. Almost
every ei\ ili/ed country has l)een afVected. The begiuning was
in 187;5, with the great Vienna panic and crasii in May of
that year, — a crash which was accompanied by immense
agitation throughout (leiinauy and in Kngland, and the itcciu*-
rence of incidents on almost every European Dourse. which
only stopped short of panic. IVext came a great panit; and
crash in the autunm of 187;> in the Tnited States, perhaps the
greatest event of the kind to which that cnuntry, tliough it
has had nuuiy great panics, has ever been sultject. This was
accompanied by a renewal t)f agitation in Kuglan<l, as well as
genoriilly on the (^)nt;nen . ^^ the rates of discount in Novem-
ber, 1S7:>. signi(ie:iiitl\ jirove. At that date the minimum liank
rate of discount was in London no less than nine per cent, the
maximum being two and three per cent higher; the min'nium
in I'aris and Hrussels was seven per cent ; in Herlin and Frank-
fort, live per cent; Vienna, live per cent: and Amsterdam,
six and a bidf per cent. Thf> following year was comparatively
quiet, i)ut it was marked by great monetary disturbances in
South America, and by a great fall in prices both at home, m
the Continent, and in the rnifed States. In IHl!) came re-
newed disturliances in South America, a renewal of agit.ition
in the rnitnl States and rJeimany ; and then the !m Thurn.
Aberdare, Collie, Sanderson, ami otiier I'aiiures, eonstiliiting
the commercial crisis of that year in Mngland. This was in
turn succeeded by a great collapse in foreign loans, which had
been heralded and partly rehearsed in 1873, on the occasion

THE LIQUIDATIONS OF 1873-1876.

867

of tho bankruptcy of Spain, and of which the conspicuous
incident now was tlic non-payment of tlic Turkish debt inter-
est. To all these events succeeded renewed depression and
stairnation in trade at home, as well as on tho Continent, tho
crisis in Russia in 1871) being very marked, and the wholo
'intinuing till it seemed to have a fresh cause in the appre-
hension and actual outl)reak of the present war. Tlius tho
depression has been widespread and general, — Italy, Spain,
and France perhaps escaping with little hurt, but Austria,
Germany, Russia, the United States, and the South Ameriean
countries having all l»(>en in deep distress.

This iniiversality, on a comparison with former periods of
crisis, may be in fact apparent only, arising from the greatly
increased facilities of observation at tho present day. There
never was a time, probably, since commerce was suHiciently
advanced in niore countries than one to admit of crises, in
\\i>ich the cdmmercial misfortunes of one country did not re-
act on countries with which it did business. At such periods
PS 182.3, 1837-39, 1857-58, 18t)l-()2, and 18(;i)-08, it is un-
d"! btedly the case that the crisis in England has l)een aecom-
(..vnied by more or less severe crises elsewhere, — France,
America, Fngland, Holland, and the flerman towns on the
KUte, having sjiared eaeli other's misfortunes more or less
during (lie whole period. Now the crisis is f(!lt to be moro
exter lid, because we are immediately informed of the events
in most distant places, liecause we see at once the association
of failures at centres remote from each other, and because wo
also see lit onct> the eileet in one plai-e of tlu' c:\]\ upon it to
render assistance at another distiirlied ceiitie of business. But
it is also true that connnercial relations are themselves far
more extendeil than was tiie case before I'aiiwnys and tele-
graphs; that there are wide reii'ions — in tb<' I'nited States,
for instance — wliicli could not have been the suiiject of crisis
twenty or thirty years ago. liccause they were iini)eopled ; that
such countries as Austria and Russia have lately shared moro
largely than before in iiulustrial development : and that (!er-
many has also advanced farther in tin. path which mnkes it
possible for it to be the sul)jeet of a commercial crisis. There

I >

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358

ECONOMIC HISTORY.

h ■.:?;

1.1 ■ « '

is consequently a rcol reason for the greater extension of the
commercial depression of the last three years as compared
with anything before witnessed, while it is eiiually true that
steam and telegraphs, Ity facilitating communication, have
destroyed the niitural barriers bcUvcen the dillerent coun-
tries of the commercial world. The Londor money market
appears to be the great e<|ualizer of miukets, because it re-
ceives the shock of every important business event through-
out the world, and transmits the shock cf what it feels to
every other centre. Rut whatever the nature of tbe connec-
tion, it is certain tlwit there is a connection between com-
mercial crises in difl'erent parts of the world, and tiiat the
wider range of business increases the possible area of dis-
aster when once disaster has set in.

II.

The next important characteristic of the depression, and
perhaps the most important characteristic of all, apjtears to
be that the conspicuous industry which has failed is that of
the " exploitation " of new count', ies with littl'; surplus capital,
and whose business is mainly that of producing raw materials
and food for export, by old countries which have large surjilus
capital, and arc largely engaged in manufacturing; in other
words, the investment in new countries by the capitalists of
old countries. Much l)ad Iiusiiu'ss is brought to light in eve:y
depression; but it is the peculiarity of the comiricreial cycle,
as we have noticed, that there is a change fn»m time to time
in the favorite business, so that every period has its special
trade development, and special tr;.(l(^ disease. The favorite
liMsiiK'ss for many years b(>fore \^~'-\ had become that of
foreign investnu-nt, and now the depression (tceurs where
there was the greatest expansion. [)ircct cvideiuH! in such
matters is dillicult : it would hardly lie possible to measure
precisely t1;e extent of tiie various descriptions of disaster
which combine to make a crisis; liut there ai-e many facts and
circinnstances wliich can leave little (h)ui)t in llie mind that
the direct evidence, if it could be obtained, would wholly con-
firm the conclusion stated.

iV.!

77//; iJQriDATroys of m.i-isrc.

860

Tho onlor of events in tlic crisis affords of ilsclf a very
striking confirmation of the assiunptioii. TIh; tlilliciiltics com-
menced in tlic countries more or less farmed by the caitital
of Eiiijhind and other old countries ; whose inthistrics are
nourished hv pulilie l(»ans from Kmrhmd, and bv the invest-
ment of private Kntrlish capitalists within tlieir territories,
principally in the form of Kn)^lish iron and manui'aetures.
The crisis in Austria, whicli was the lirst in the whok; series,
was a crisis in a country answering tliis description to some
extent. To the United States, where tlie next crash occurred,
tlie description is still more aitplicable. The South American
countries, whose prolonged sulTering was the special feature
of 1874, are almost a domain of Kngland; and Russia, too,
is largely " dcvelo|)ed " by English capital. Some of these
countries, especially Austria and Russia, have not l»een ex-
clusively dependent on Knglish capital. They have also l)ene-
lited by the accumulation of capital in Holland, Delgium, and
France, which had been drawn largely to Cermany before
1873, through the French indemnity, and hail overllowcd
thence into Austria and Russia; but the imlemnity payments,
though they helpeil to precipitati; mid agLn-avate the crisis in
Aust'iii, did not alter the power of the crisis to renct on Kng-
land. No doubt, in 1873, as already noticed, the eolhipse of
the fon igu loan financing liad l)een foreshadowed ; iiut the
anticipatory events of that year were in themselves compara-
tively unimportant, so that down to 187") what (diiefly hap-
pened was a succession of monetary and cnuiuierci;il crises in
countries dependent on Kuglaiul, but from which Kuglaiid by
comparison escaped. Tn iS7.*) these crises were suceeeded by
a crisis in Fuiilund itself of very -ji-eat intensity, naturidly
leading to a renewal of crisis and distress elsewhei'e, though
not of actual puiie. and the whole eidmiiiatinL' in the linan-
cial disorders of the foreign lo:iii eollapses. whieh will 'iroli-
i'.bly form, in after years, tfie m^st eonspieuous feature of the
whole series of liimidatit»n.i. Tli' le appears to have been a
natural order, theret'ore, in tlic suiffssive crises to whieh the
countries dependent on Kuirland have been sulijectcd. le.Jiuj^
to a <'risis in. Kiiirhind itself, und ilnally tu a linanciul as well
as a commercial coUapsa.

860

ECONOMIC HISTORY.

Wo have next to adduce in evidence the fact of the great
expansion of the buHJness of invoatnicnt in foreign countries
previous to tlie di'iiression. The great multiplication of for-
eign loans in the period is now familiar. Not to sprak o<"
Turkish and other loans, which were so largely mere borrow
ings to pay interest, there was a loan of £ll:i,(lOO,000 for Egypt,
after there had been large loans in 18(18 and 1870; Chili
in the same time (18()7-73) borrowed iio.-JoO.OOO ; Peru,
£24,000,000: Brazil, X 10,000,000; Russia, i:77.0(i(),()()0 ; and
Hungary, j£22,000,000, — exclusive of minor borrowings by
guaranteed companies and otherwise. These were the nominal
amounts of the loans, and the real money or money's worth
ever transmitted to those coimtrics in respect of tlicin must
have been much less; but, making all deduetions, flicy indi-
cate an innuensc direet credit opened \\\\ in this country in
favor of the States named. The minor Itorrowiuirs we have
referred to were eipially important, if not more important,
and, espeeially in the cnsc of tlu' United States, tlie agsjregate
of sujiill loans lor railways and ofht'r purposes was inuncnse.
All this direet l»orrowing likewise implif(l a great invest uient
of capital privately in foreign countries. Merchants and
traders were induced to set up establishments abroad to facili-
tate the business which the loans Itronght into existence, and
aecommod;ite \\w wants of emigrants t(j the new lirlds of in-
dustry. Tbe result was a luxuriant industiial gi'owth in tlie
new countries by means of this vast direct ami indirect credit
which old countries were giving. Thus in the United States,
immediately before 1873, the length of the whole railway
system had been doulded in seven years; in Russia almost the
entire systiMU nl' 12,'>(I0 miles has been created since 18*1S; in
Austria there liad been an increase from "2,200 miles in 1865,
to over (!.0(M» miles in 187:3: and in South America, Brazil,
the River Tlate republics. Chili, and Rem, had all been en-
dowed witli railways in a very f<>w years, — the loans for
these countries above enumerated, and especially the above
h>an of £21.000,000 for I'eru, being avowedly all for railways.
And never was there a more rapid development of the foreiizn
trade of the United Kingdom. The total import and cxjwrt

rilE LIQUIDATIONS OF 1873-187G.

301

trade, which was jC')00,98n,000 in 1807, had riacii in 1873, or
in six years only, to £08:^,292,000, or thirty-six per cent ; and
the trade per head from XIO 1«. '^<l. to .t21 4«. ihi., or thirty-
two per cent. Tiic exports of British prodiieo alone, to take
the two cxtr(>mc years, liad risen from .1)170,078,000 in IcSOS
to .£2')0,2')7,000 in 1H72, or forty-two per cent in four years,
the inereasc ]>cr head Iieint? in the same period from X") 17».
4'/. to .CS Ix., or thirty-seven per eeut. All this had followed
a ra]tid rise in previous years; for the panic of 1800 was
chiefly the collapse of a liome company mania, and had not
l)ri)ii<rlit with it discredit of forei<?n loans, or a eolla|tse of the

i)usii

>f lendin'' to foreiirn

)un

tries. And in one or t

ismcss oi lendin;.^ to loreiirn coi
trades the increase of business was even frreater than the
general inereasc. Thus the (juantity of our iron and stetd ex-
ports rose from 2,042,000 tons in 1S(;8 to 3,383,000 tons in
1872, or sixty-six per cent in four years, while there was sim-
ultaneously a rise of price whiidi made the increase in values
imujense, not only in these, hut in other articles wiiere there
was no such increase of t|uantity. It is sonietinies said that
the hurst of trade which euliuinate(l in 1S72-73, was larjrely
due to the extra demand for our manufactures created l)y
the Franco-derman War. This war cheiked manufacturimr
on the Continent for nearly a twelvemonth, besides eausiiiL^
a war demand for certain of our manul ictures. Hut the
comparison we have made is of a year when the war was loni?
over, with a year quite before the war, while the most con-
spicuous instance of increase in our exports was in iron and
steel, whieli was clearly in connection with increased railway
construction al)road. The expansion of our foreiirn trade was
thus manifestly in connection with the general expansion of
our foreign investment business, and not the result of the
accidental or tempoiary caii><es which lia'c bee i\ assigned.

That there has been a ni tst disprcportionatc stoppage of
the foreign investment business, which would go far to ac-
count for the present depression, is also very ol)vious. I do
not refer so much to the notorious stoppage of .he issues of
foreign loans, small and great; after every great e|•I^is new
issues of almost every kind come to a standstill, as freipieut

« : If

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_ {■

§-

■m

3G2

ECONOMIC HISTORY.

'Y-i

experience has shown. It was so after 1800, and had been so
after siiuihir years of crisis, although I doubt if foreign issues,
as distinguislied from home cnterpi-ises, have ever been so com-
pletely 8toj)ped as they are now. Quite apart from this, wc
have tuimistakable evidence of the decline in foreign invest-
ment business in the (iuancial and industrial endiarrassmcnts
in new coiudries, of which, as I write, the great railway strikes
in the United States furnish a now illustration. There has also
been a diminution of singular magnitude in our export trade.
That traile has freciuently fallen oil' in times of general de-
pression, but never to such an extent as has lately been wit-
nessed. The diminution altogether in the exports of home
produce and manufactures hrs l)een from ^Ji")(),2r)7,000 in
1872 to £200,030,000 in 1870, the change being partly due,
as usual, and perhaps rather more than usual, to a fall in
price, but only partially to that cause. There has not since
the free trade period been such a dicliue in (jur fdrcign trade,
just as there had been no previous example of so great an
expansion. The decline has also been mainly in the exports
to such countries as the United States, which had l)een our
great borrowers, — the falling off to the United States abme
being from i:40,7:57,O00 in 1872 to X10,8:U,000 in 1870, this
latter ligurc being the lowest since 1804. It has also been
mainly in such articles as iron and steel ; the exports of which
diminished from 3,38.3,000 tons and jC3r),090,000 in value in
1872, to 2,224,000 tons and £20,737.000 in value in 1870;
while the exports to the United Slates alone fell from 07o,000
tons in 1872 to only 100,000 ttms in lS7(i. The recent dimi-
nution in our export trade is therefore not oidy unusual, but
it is a diminution of the exports to new count ries, and a
diminution of those articles which we send abroad for the
purpose of new works in such countries. So great a change
in one great branch of our business would go far to account
for the general depression now prevailing, which is thus once
more traced to the failure of our foreign investments.

The embarrassments in the new eoinitries were also con-
nected with tiie excessive development of their capabilities
which had been attempted. A very consideral)le amount of

li!' i'.

rilE LIQUIDATIONS OF 1873-1S7C,.

n03

the railway and other speculation during the last few years
has been pruved to have been wholly in anticipation of the
wants of the world, the evidence of this bcinjif an overpro-
duction of raw materials and food, the characteristic pro-
ducts of the new countries. Of this over-production the most
sijfuilicant Hi^■n was the low price of wheat in 1875, notwith-
staudinj? the l)ad harvest of that year in several countries.
There had previously been complaint of low prices in the
United States, — in 1873, for instance, — and of inability
to " k( -p back" crops. Similar complaints had also been
received from Russia in 1874. Even in 187G the price of
wheat was slow in rising in the autumn, notwithstanding a
goiKM-ally bad harvest, and the extreme war rise the follow-
ing spring was only maintained a few days. In other words,
the assumption as reganN wheat that new countries might be
settled indefinitely has pi'nnl to l)e erroneous. The result of
what appears to i)C excessive cultivation is an unremuuerative
price, which leaves merely agricultural communities in dis-
tress, and disturbs their whole system of industry. It has
been the sumo with other raw materials, studi as cotton,
although perhaps not to the same extent. ]»ut in general
the business of producing raw materials and food had been
o\erdone, and the crises in Austria and the United States in
1873, f()llowe(l as they have since been by the similar crises
in South AuKM'ica and Russia, were evidiMice that tlu; power
to support the linanciug of the previous two or three years,
which was based on the business of investment in new coun-
tries, had ceased.

The uglier features of the collapse of foreign loans also
furnish evidence of the characteristic uiai'k of the crisis with
whicli we have been dealing, lu addition to the issue of loans,
which involved llie investment of capital in a llxed form to an
extravagant extent, so that immediate loss and ruin could not
but ensue, there had taken plac(> in a few years before 1872
frecpient issues of loans in foreign countries so-called, which
weic only disguises to plunder the public. We refer to the
loans for Honduras, Paraguay, San Domingo, and Costa Rica,
which were investigated by the Foreign Loans Committee,

;' 1

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and lo a iiiimorous class of which tliosc wore perha|i.H the
iiKi.st lliij^rant Hpfi'iiiu'nH. Thcso wort' Hiniply issues by knots
of s|>coiilators, usually on the plea that they weir for sonic
|»ul)lii; work, — to which a small jtortion of (he money raist-d
was perhaps, in fact, devoted, — but really with the d(.'sij,'n, as
carried out by those concerned, to pay themselves larj^e sums
in commissions and otherwise, so lonj; ns the public eoidd bo
y:ot to believe in such Ihinjis by the payment of interest out
of the funds they had themselves advanced. All this was
very natural. The peculiarity of the time beinj,' the develop-
ment of foreifrn countries by loans, it was only natural that
the illejritimate linanciuir of the time should als(» consist of so-
calle(l liiaiis. As there had iieeii liojrus compaiiii's in the days
of the enmpauy mania, so now there were Ixijrus loiins.

These !ire all ciremnstances tendin^r to show how nmeh thn
bad liusiness luoiiLdit to lifrht in the recent depression was
coinieeted with the business of investment in new countries,
and its accessories, whieh had previously just received so
jrreiit an expansion. As we have already reuinrked, there
was nnieh bad liusiness besides. In the set of failures con-
nected with that of Messi's. Collie, what seemed to be shown
especially was a peeidiar disiwder in the trade with ludiii. —
the result, it is prolcdtle, of th<' undue investment of capital

in that trade at a date as far back as tht tton mania in

18»»;{ and lS(i4. IJut the liid liusiness of foreiirn investment
and rmaneinir has ceitainly been far the most prominent.

i 1 *'

A thii'd distiu'jruisbinir mark of the crisis appears to be the
siuirular liiilituess of its elTccts on Mnirlish industry and
wau'cs. As has been hinte<l already, sindi is not the com-
mon iuipi'essioii rcLrardinir it. On the contrary, the depies-
sion of tiade is spoken of in common speech as somelliiiej!.-

entirely uiipn dented both in intensity and duration, lint

a careful examiiiatiou must prove that, as far as matters
liave yet L'oue, the counuon impression is wrontr, ami the
tacts are cntirelv the other wav.

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The common impiTHMioii appcarH to lie due to a miHiiitcr-
prctation of two iiiiiloiilttcd facts; lirrtt, tlic fvi<li>iit ma;;iii-
tilde of tli(> liiiancial collapHc in forci^Mi loiiiis, wliicli hn8
Itccu product i VI) of jjrcat sttcial diriticss aiiiuipj' tlic cIiissch
who have moHt aiiiph* opportunities of procliiiiiiiii^ their

jfricvanccs ;

ind next, the iiui<;ilitllde of tile decline of til

foreign trad(^ of tlie coiilitrv, which is ideiitilieil with a de-
clino in its \vli(du trade. Hut it is easy to see that there is
a niisintiM'pretatioi). The magnitude of the liiiaiicial collapse
is, of coiiise, very serious. The novelty of the deception uf
the pui)lic liy iio;j:iis loans lias increased tiie evil as compared
with the evil of u company mania, wiiile th(; opportunities of
fraud were really mor»! favoralihi to the conspirators than in
tlie iiianufa(*tiir«' of hiilihle eiunpanies. A State lniin sounds
more respectaldi^ than a company issue. (Jn the wiiulc, the
securities of States for a Ioii;j: periinl had also answered
hetter than the shares of coinpanii-s, and althoiiLih also in
former years many State loans had proved the source of loss
to Kii'jrlish investors, — several South Americiin States.

(iieecc, >pain, and <iiie or two .states ol the AmeiMcaii I nion

havini>; all proved ilefaulters, — yet there had I n no lliiL''iant

instances of loans which were merely cloaks t(» let pnnuoters
and limineicrs have commissions. The aufciits ami institu-
tions connected with States also controlled larirer resources
tiian ha<i iiceii (MtntroUed liy tlie linanciers of companies.
Tlie inaldlity of investors, therefore, to form a ^ood jiidjr-
nieiit on the investments sniimitted to tlieni, tiieir disposition
to ndy on market price, and otiier extraneous or irrelevant
cireiiinstanees, was never experimented on so widcdy, or
with more unfortunate results. lieiice tlie mairnitude (»f the
Itrid husiness an<l the ensuimr collapse. In the loans tur
Turkey, lOirypt, and I'erii alone, the depreciation of securities
witiiin a year after the 'I'uikish collapse amounte(i to aliout
Xl.'iO, 000, ()()(), while there is a total destruction or suspen-
sion of income from tainted securities exceediie_' £20. Odd, 000
a year. Ihit trreat as this e<dla|»se i.s, it iias proltaldy afTected
very little the nocnmiilation or real wealth of tie' country.
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the community as a whole is not really poorer by the pricking
of all these bladders. A certain number of people are 8im{)ly
prevented from continuing any longer the process of living
on their capital, for that is what they were doing when they
were spending the so-called interest paid them, which was
really only a rctui-u of what they had themselves advanced.
But the whole of the so-called interest was not so spent, a
great deal of it, as is the case with the interest of every de-
scription of investment, being reinvested, and in this way
the collapse really changes nothing, except to let many peo-
ple know that theii accumulations were imaginary. The
direct economic effect is consequently nil, although the so-
cial effects and individual disasters are of the most serious
kind. The depression of trade attending a financial col-
lapse ought not, therefore, to be measured by the seeming
magnitude of the linancial collapse itself, which last may be
very great without the ordinary industry of a country being
seriously checked.

As regards the second fact which is misinterpreted, —
namely, the decline of the foreign trade, — the conmion im-
pression only requires to be challenged to prove its unsound-
ness. We have probably a larger pro])ortion of foreign trade
than any other great nation. Our workmen and ca])italists
have gradually come to exchange a larger proportion of the
products of their industry iov foreign products than any other
people. But even yet we are very far from exchanging more
than a small part of what we produce. Our whole agriculture
is for home consum])tion; our coal and iron mining, our cot-
ton and wool spinning and weaving, our manufactures gener-
ally are also mainly for home consumers. A decline in our
foreign trade, therefore, is only a decline in a branch of our
whole trade, and should by no means be identified with a gen-
eral dejjression in business. The recent decline in the foreign
trade, moreover, is almost entirely a decline in "optional"
business. It is a decline in our exports of such articles as
we have been in the habit of exporting as a means of invest-
ing our cai)ital abroad. When we stoj) such exports, certain
branches of home industry, which have been fitted to this

THE LIQUIDATIONS OF 1873-187G.

367

peculiar trade suffer ; but the capital which would otherwise
have been sent abroad, and the means of producing that
capital, arc not destroyed. In the course of time if the taste
for foreign investment docs not revive, the cr.pital and labor
employed in making articles for export will be turned to the
production of articles for consumption and investment at
home. Instead of merely looking at the foreign trade, then,
we should look at our aggregate trade in such times of de-
pression, and not suffer our opinions to be distorted by one
or two conspicuous facts.

Coming to the subject in this way, wo do not see how it
can be doubted that the recent depression, although it is
vo"v protracted, is as yet singularly light in degree. Our
imports of the chief articles of popular consumption, to begin
with, have not diminished but increased. Indeed, one of the
favorite complaints about the depression of trade is the old
cry of the excess of imports over exports, which is certainly
greater than usual because our investments in new countries
have ceased for a time, but which is the permanent charac-
teristic of English trade. It is quite certain, however, that
no country sends us any goods on credit ; it is England which
always gives credit in the trade of the world. Whatever
increase of imports there may be, then, is a sign of real abil-
ity to pay for them, and pro tanto of the undiminished pros-
perity of the country. To the same effect we have the fact
of an increase of railway traffic year after year during the
depression. The increase in 1874 and 1876, and again in
1877 has been small ; but in 1875, the very year of the great
commercial and financial collapse, it was considerable. Evi-
dence in the same sense is also supplied by the non-increase
of pauperism all through the depression, and by the steady
augmentation of the national revenue until the present year,
and by the increase of the savings-bank deposits. The non-
increase of pauperism is no doubt partly due to our improved
administration, but no improvement of administration could
have prevented such an increase of j)auper8 and decline of
revenue as followed the panics of 1847, 1857, and 1866, not
to speak of the awful convulsions and distress which marked

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ECONOMIC HISTORY.

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the depression of trade in still earlier periods. To any one
who has even glanced at the economic history of England
during the present century, the common talk now about the
"unusual " depression of our trade appears sim[)ly ludicrous.
The people who indulge in it have simi)ly never thought of
what depression of trade is. There has jjrobably never been
a great commercial crisis in England which caused so little
suffering to the mass of the nation.

When we think of the matter a little it seems reasonable
enough also that the depression should be a mild one.
Severe as the crisis has been, we were lucky enough to es-
cape an actual panic, with the shock to credit and other
lamentable incidents which a panic invariably produces. It
is probable also that we were really befriended by the pecu-
liar events in the money market in connection with the
German coinage. The withdrawals of gold for Germany
had the effect of anticipating the stringency in the money
mariict which a period of great expansion ends in. The ex-
pansion was thus hindered from reaching the fxtrcme it
would otherwise have reached, and the reaction is less
severe. Some good judges are of opinion that we have to
thank yet another cause, — the high normal wages of our
workmen and their independence of abundant harvests and
cheap wheat, as compared with what was formerly the case,
so that all our staple industries are steadier than they Avere.
But I should doubt the effect of this cause without greater
experience than we have yet had. Workmen will suffer, it
is to be feared, in a way in which they have not lately suf-
fered, if another time of expansion such as there was in 1872
should reach its full term and industry be subjected to the
strain of the inevitable reaction. But without this cause, the
actual facts of the absence of a panic during all this depres-
sion, and of the successive stringencies in the money market
which checked the exuberant growth of 1872 and 1873, ap-
pear quite sufficient to account for the comparative mildness
of the effects of the depression we are witnessing.

l4N.

THE LIQUIDATIONS OF 1873-1876.

369

IV.

The marks of the present depression which we have enu-
merated are thus its universality, its origin in the breaking
down of the bad business of foreign investment, and its
mildness in the United Kingdom as compared with former
periods of depression. Is there anything in these peculiari-
ties, or in any other circumstances of the depression, to lead
us to anticipate that it will be unusually protracted or that its
effects will be permanent ? Is the depression, in other words,
the beginning of anything unusual or unprecedented ?

To put the questions thus explicitly is perhaps to answer
them. Although there is much vague talk about existing
Repression, — which is really based on an assumption that it
is something unheard of and must be lasting, — it is not so
easy to assert explicitly what is so confidently assumed. To
suppose the permanence of almost any depression would, in
fact, be to suppose a change in human nature itself. Uni-
versal dulness and poverty are, .n fact, contradictions in
terms, unless it is supposed that all people will voluntarily
be idle when they have the strongest motives to work.
Whatever awkwardness there may be in the distribution ot
labor and capital at certain times, the power to produce and
the wish to consume ensure that with the means of production
unimpaired, — and there is no allegation that the means of
production in the present case are impaired, — production
will go on and increase with the increase of population and
with every species of chemical and mechanical improvement.
It is thus morally certain that if at any time the industrial
machine, as a whole, is pax-tially disused and times are dull,
a period of full employment and prosperity will return.

And short of the depression being permanent, its effects
will not, we think, be worse than usual, if indeed the worst
is not already past. The disorder has been very general
throughout the world, because industrially the world is get-
ting to be more and more one country ; but there is mani-
festly nothing in the extent of a depression to alter its
character or the power of the communities affected to re-

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ECONOMIC HISTORY.

cover. So far as England ia concerned, moreover, all that
has happened is that a particular part of our trade, — our
exports of domestic produce and manufactures, — is mo-
mentarily weak, just as in former times the home trade
dependent on railway contractors or bubble companies was
weak. Our new investments in a particular direction have
failed, but that is all. There is clearly no reason in this for
any prolonged stoppage or diminished use of the industrial
machine for all the miscellaneous purposes of life, although
it will only be by degrees that new outlets for our surplus
capital can be found. All the reasons assigned to account
for the lightness of the depression until now, — ^the absence
of panic, the fact that the collapse is so much a merely finan-
cial one, and the circumstance that the expansion previous
to the depression was arrested in its natural development, —
are also reasons why it should not be more protracted than
usual. Some new mischief may of course arise, but there is
nothing on the face of the facts, according to all former ex-
perience, to lead us to expect an aggravation of the present
evils.

Nor do the special causes sometimes assigned for expect-
ing an unusual degree and continuance of depression appear
to be entitled to much weight. The British workman, it is
said, drives business away by his misconduct and his de-
mands for excessive wages. Foreign nations are increasing
their manufactures of the very articles of which England till
lately had a monopoly. Every import of a foreign manu-
facture into England, at a time like this, gives occasion
for a new exclamation that English industry is threatened.
The changes are constantly rung upon such facts as the in-
creased capacity of the United States for the production and
manufacture of iron; the importation of certain descriptions
of American cotton manufactures into England ; the appear-
ance of Belgian and German manufactures in our markets at
a cheaper price than the articles can be made by ourselves.
But those who use this language appear to fail altogether in
measuring the extent of the mischief they point out. A
great deal of the apparent competition of foreign manufac-

THE LIQUIDATIONS OF 1873-1876.

871

turcs is due to the search for a market which occurs in every
time of depression, and which furnishes no sure indication
whatever of any real change in the currents of trade. All
we know for certain is that on the other side the complaints
abroad of the competition of English manufactures are loud-
est at such a time, and that facts as to foreign competition,
similar to those now alleged, have been brought forward in
every time of depression for the last half-century, without
any serious permanent result on English trade being trace-
able. That trade, on the contrary, as, for example, after
the year 1809, when a great noise was made about similar
facts, always makes a more rapid advance than ever after each
depression. No one can dispute, indeed, that English work-
men arc often foolish for their own interest, or that some
English trades have diminished, and others may yet dimin-
ish or may become stationary, while foreign trades of the
same kind increase. Still the question here is of the general
prosperity, and it is easy to recognize the strength of the
influences which are likely, and, we believe, are certain to
limit the evils feared, as, in fact, they always have limited
them. Our workmen do, in fact, succeed in getting higher
wages, as a rule, than foreign workmen ; they do not migrate,
and pauperism does not, on an average of years, increase, —
all signs that manufacturing, as a whole, whatever may hap-
pen to particular trades, increases in England. It is because
there is so much more profitable manufacturing hero than
elsewhere that our workmen can enforce the higher wages.
As we certainly cannot expect that foreign countries should
manufacture nothing at all, but must rather desire their
manufacturing to increase, there is really nothing in all that
is said of foreign competition to concern us in an inquiry as
to the permanence of the present depression.

The fallacy in the use of these alleged facts as to foreign
competition consists, indeed, very largely in the forgctful-
ncss of other facts which are equally material : that our for-
eign trade itself is not everything to us, but is, after all,
only a fraction of our whole business ; that long before com-
petition can diminish that trade materially it must produce

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ECONOMIC HISTORY.

II ("

a fall of wages, while wages abroad will rise if foreign trade
increases ; and that although foreign countries increase their
manufactures, we arc not necessarily ruined, — probably we
arc greatly gainers. To take what seems as formidable a
case of possible competition with us as any that is threat-
ened, namely, the increase of the American iron and coal
industries under natural conditions. It seems probable
enough that in course of time these industries will bo very
largely developed in the United States. The people have
natural aptitude and skill, and other advantages, and they
may produce iron manufactures cheaper than they can buy
them abroad. In time they may export them to other coun-
tries. But how is England necessarily the poorer for that,
and how much ? We may come to export a smaller quantity
of our iron manufactures to the United States than in the
years before 1872 ; but at most we shall only lose the profit
on so much trade, not the whole value of what we sold to the
United States, which was, in comparison with our whole
trade, by no means a large sum. Nor shall we even lose the
whole profit. We can only lose the difference of profit be-
tween what was derived from that trade and the return on
the less profitable trade, into which a portion of our capital
and labor are diverted. Possibly, also, the growth of the
world may be such that the expansion of American industry
will not be exclusive of, but will be coincident with a simi-
lar expansion of our own, — there may be room for both of
us. In that case, there would be no reduction of the profits
on our own trade at all, although America had become an
exporter of iron manufactures. Ux liyjyothesi the increase of
the American iron trade would also mean that America be-
comes richer, and consequently a better customer to the
world generally for other things, — thus causing an increase
of the general prosperity in which, with our extended and
various trade, we could not but participate. Worse things
may thus happen to us than a natural extension of the Amer-
ican iron trade ; and if it is extended by protection only, it
can of course do us still less harm. There is something
essentially unsound, therefore, in the continual references to

5ii

THE LIQUIDATIONS OF 1873-1876.

373

the increase of manufacturing^ abroad. Our concern should
rather be to have that inanufacturinfij increase. To antici-
pate that the world outside England is to be merely agricul-
tural or mining, is to anticipate the maintenance throughout
the world of the least productive forms of applying human
industry, and of low purchasing power among other coun-
tries. What mankind re([uire for the greater efliciency of
their labor is that the proportion of people employed in
{igriculture and mining should diminish, and more and more
attention should be given to other forms of industry. How
England should grow poorer as this transformation is being
effected, it is difficult to imagine. It appears to be as clear
as any proposition, that the general increase of production,
leading to still greater varieties and subdivisions of manu-
facturing than those which now obtain, must benefit most of
all the countries like England, which have got the start of
others, and possess all the best manufacturing appliances.

We should fully expect, then, when the liquidations which
have been in progress are over, to see once more a great
revival of prosperity. Still more, according to all former
experience, the prosperity to come must be even greater than
anything yet seen. Ever since 1844 there has been an
ascending scale in the rate of our industrial advance. The
years after 1848-49 were more prosperous than any before,
but the prosperity of 1863-65 exceeded that of 1850-53, just
as the prosperity of 1870-73 exceeded that of 1863-65. In
like manner the next period of prosperity will probably ex-
hibit a fuller development than 1870-73, and for a similar
reason, namely, that the productive capacity of civilized
nations, in proportion to their numbers, is annually increas-
ing,— being capable of almost indefinite increase. More
railways and more machinery, the improved knowledge of
chemical and other arts, imply that, one year with another,
in proportion to their population, civilized communities can
produce more real wealth than they did before. Depression
comes at times because mistakes have been made, and the
wrong things are produced ; but when the mistakes are cor-
rected, or some new favorable influence operates, such as a

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ECONOMIC HISTORY.

good harvest, the tide flows again, industrial communities
work up to their full power, and they are all richer than be-
fore. Possibly the workmen at a given place may take out
their share of the increased production in the privilege of
working fewer hours; but the prospciity is there, however
it may be enjoyed. The great extension of railways through-
out the world in aatici])ation of real wants, which was the
mistake of the period of inflation, should, now that the mis-
take has been paid for, contribute to a more rapid advance of
general ])rosperity than would take place if the world had
fewer railways. . . . [1877.1]

• It is obvious that if I were now writing I should have to speak of the liqui-
dations, not of tliose years only 1187;]-76], but of 1873-70, and have to explain
more points than I could possibly take up when writing in 1877. But I see no
reason to doubt the general soundness of the view I have expressed on the course
of tiie present depression and its origin ; although, subsequent to the date of my
writing, bad harvests and other accidents have aggravated that depiession
[1870].— 11. G.

INCREASE OF POPULATION.

375

inmuiiitios
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XV.

THE UNITED STATES IN 1880.

THE INCREASE OF POPULATION FROM 1700 TO 1880.

From Walker and Gannett's IIefout on the Progre88 of the
Nation. Tenth Census, Vol. I., pp. xii-xx.

1790.

THE first Census of the United States, taken as of the
first ]\Ionday in August, 1790, under the provisicas of
the second section of the first article of the Constitution
showed the population of tho thirteen States then existing
and of the unorganized territory to be, in the aggregate,
3,929,21-1.

This population was distributed almost entirely on the
Atlantic seaboard extending from the eastern boundary of
Maine nearly to Florida, and in the region known as the
Atlantic plain. Only a very small proportion of the inhabi-
tants of the United States, not, indeed, more than five i)er
cent, was then to be found west of the system of the Appala-
chian mountains. The average depth of settlement, in a
direction at right angles to the coast, was 255 miles. The
densest settlement was found in eastern Massachusetts,
Rhode Island, and Connecticut, and about New York City,
whence population had extended northward up the Hudson,
and was already quite dense as far as Albany. The settle-
ments in Pennsylvania, which had started from Philadelphia,
on the Delaware, had extended nor^^heastward and formed a
solid body of occupation from New York through Phila-
delphia down to the upper part of Delaware.

The Atlantic coast, as far back as the limits of tide-
water, was well settled at that time from Casco Bay south-

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ECONOMIC HISTORY.

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ward to the nortlKM-ii border of North Carolina. In ^\l»at
was then the Ditttriiit of Maine, sparse scittlenicnts extended
aloii"^ the whole seaboard. The southern two thirds of New
JIanipshire and nearly all of Vermont were covored by jxtpu-
lation. In New York, branching olf from the Hudson at the
mouth of the ^fohawk, the line of jtopulation followed up a
broad gap between the Adirondaeks and the Catskills, and
even reached beyond the centre of the State, oeeupying the
whole of the Mohawk valley and the country about the inte-
rior New York lakes. In Pennsylvania i)oj)u]ation had
spread northwestward, occupying not only the Atlantic plain,
but with 8j)ar8e settlements the region traversed by the
numerous ])arallel ridges of the eastern portion of the Appa-
lachians. The general limit of settlement was at that time
the southeastern edge of the Allegheny plateau, but beyond
this, at the junction of the Allegheny and Monongahcla
rivers, a point early occupied for military purposes, consid-
eral)le settlements had been established prior to the War of
the Revolution. In Virginia settlements had extended west-
ward beyond the Blue Ridge, and into what is now West
Virginia, on the western slope of the Allegheny mountains,
though very sparsely. From Virginia also a narrow tongue
of settlement had penetrated down to the head of the Ten-
nessee River, in the great Appalachian valley. In North
Carolina the settlements were abruptly limited by the base of
the Appalachians. The State was occupied with remarkable
nniformity, except in its southern and central portion, where
population was comparatively sparse. In South Carolina, on
the other hand, there was evidence of much natural selection
apparently with reference to the character of soils. Charles-
ton was then a city of considerable magnitude, and about it
was grouped a comparatively dense population; but all along
a belt running southwestward across the State near its cen-
tral part the settlement was very sparse. This area of sparse
settlement joined with that of central North Carolina, and
ran eastward to the coast near the junction of the two States.
Further westward in the "up country" of South Carolina,
the density of settlement was noticeably due to the improve-

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INCREASE OF POPULATION.

877

inont in soil. At this diih) sc'ttU'inc'iits were almost entirely
agricultural, and the causes for variuticju in their density
wore general ones. The movements of population at this
epoch may ho traced in almost every case to the character of
the soil, and to facility of transportation to the seaboard;
and as the inhabitants v/erc then dependent mainly upon
water transportatit)n, we find the settlements also conform-
ing themselves very largely to the navigable streams.

Outside the area of continuous settlement, which we have
attempted to sketch, were found in 17'JO a nmnber of smaller
settlements of greater or less extent. The principal of these
lay in northern Kentucky, bordering upon the Ohio River,
comprising an area of 10,900 s(piare miles. Another in
western Virginia lay upon the Ohio and Kanawha rivers,
and comprised 7^)0 square miles. A third in Tennessee,
upon the Cumberland River, embraced 1,200 square miles.

In addition to these, there were a score or more of small
posts, or incipient settlements, scattered over what was then
an almost imtroddcn wilderness, such as Deti'oit, Yincennes,
Kaskaskia, Prairie du Chien, Mackinac, and Green Bay,
besides the humble beginnings of Elmira and Binghamton,
in New York, which, even at that time lay outside the body
of continuous settlement.

Following the line which limits this great body of settle-
ment in all its undulations, we find its length to be 3,200
miles. In this measurement no account has been made of
slight irregularities, such as those in the ordinary meandcr-
ings of a river which forms the boundary line of population ;
but we have traced all the ins and outs of this frontier line,
which seem to indicate a distinct change in the settlement of
the country for any cause, whether of progression or of retro-
gression. The area of settlement, thus, is the area embraced
between the frontier line and the coast, diminished by such
unsettled areas as may lie within it, and increased by such
as lie without it. These are not susceptible of very accurate
determination, owing to the fact that our best maps arc, to a
certain extent, incorrect in boundaries and areas; but all
the accuracy required for our present purpose can bo secured.

i>i

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1 1

378

ECONOMIC HISTORY.

it "

i,!>

The settled area of 1790, as indicated by the line traced, is
220,085 s(iuare miles. The entire body of continuously set-
tled area lay between 31° and 45° north latitude and 67°
and 83° west longitude.

Outside of this body of continuous settlement are the
smaller areas mentioned above, which, added to the main
body of settled area, give as a total 239,935 square miles,
the aggregate population being 3,929,214, and the average
density of settlement 16.4 to the square mile.

In 1790 the District of Maine belonged to ]\Iassachusctts.
Georgia comprised not only the present State of that name,
but nearly all of what are now the States of Alabama and Mis-
8issipj)i. The States of Kentucky and Tennessee were then
known as the "Territory south of the Ohio River," and the
present States of Ohio, Indiana, Illinois, Michigan, Wisconsin,
and part of Minnesota, as the " Territory northwest of the Ohio
River. " Si)ain claimed possession of what is now Florida,
with a strij) along the southern border of Alabama, Missis-
sii)pi, and all of the region west of the Mississippi River.

An inspection of the maps relating to the earlier census
years will show that the progress of population westward
across the Appalachian system has taken place, in the main,
along four lines. The northernmost of those, which was the
first to be developed, runs through Central New York, fol-
lowing u]>, generally, the Mohawk River. This line has,
throughout our history, been one of the principal courses
of population in its westward flow. The second crosses
southern Pennsylvania, western Maryland, and northern
Virginia, parallel to and along the course of the upper
Potomac. The third runs through Virginia, passing south-
westward down the great Appalachian valley, crossing thence
over into Kentucky and Tennessee. South of this, the prin-
cipal movement westward has been around the end of the
Appalachian chain, through Georgia and Alabama.

m^^M

1800.

At the Second Census, that of 1800, the frontier line, as
it appears on the map, has been rectified, so that while it

INCREASE OF POPULATION.

379

c traced, is
mously set-
idc and G7°

nt are the

the main

larc miles,

lie average

sachusetts.
liat name,
a and Mis-
wei-e then
" and the
Wisconsin,
)f the Ohio
V Florida,
a, Missis-
River,
ier eensus
westward
he main,
I was the
ork, fol-
ino has,
courses
crosses
northern
le upper
g south-
thence
he prin-
of the

line, as
tN'hile it

embraces 282,208 square miles, it describes a course, when
measured in the same manner as that of 1790, of only 2,800
lineal ni'les. The advancement of this line has taken place
in every direction, though in some parts of the country much
more markedly than in others.

In Maine and New Hampshire there is apparent only a
slight northward movement of settlement; in Vermont, on
the other hand, while the settled area has not decidedy in-
creased, its density has become greater. Massachusetts
shows but little change, but in Connecticut the settlements
along the lower course of the Connecticut River have appre-
ciably increased.

In New York settlement has poured up the Hudson to the
mouth of the Mohawk, and thence through the great natural
roadway westward. The narrow tongue which before ex-
tended out beyond the middle of the State has now widened
until it spreads from the southern border of the State to Lake
Ontario. A narrow belt of settlement even stretches d(jwn
the St. Lawrence, and along all the northern border of the
State, to Lake Champlain, completely surrounding what
may be characteristically defined as the Adiroiulack region.

In Pennsylvania settlements have extended up the Susque-
hanna and joined the New York groujjs, leaving as yet an
unsettled space in the northeast corner of the State, which
comprises a body of rugged mountain country. With the
cxcei)tion of a little strip along the western liorder of Penn-
sylvania, the northern part of the State, Avest of the Sus(pie-
lianna, is as yet entirely without inhal)itaiits. Population
has streamed across the southern half of the State, and sot-
tied in a dense body about the forks of the Ohio River, at the
present site of Pittsburgh, and thence extended slightly into
the State of Ohio. In Virginia we note but little change,
although there is a general extension of settlement, with an
increase in density, especially along the coast. North Caro-
lina is now almost entirely covered with population; the
mountain region has, generally si)eaking, been nearly all
reclaimed to the service of man. In South Carolina there
is a general increase in density of settlement, while the

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ECONOMIC HISTORY.

southwestern border has been carried down until now the
Altamaha River is its limit. The incipient settlements in
northern Kentucky have spread southward across the State,
and even into Tennessee, forming a junction with the little
settlement, noted at the date of the last census, on the Cum-
berland River. The group thus formed has extended down
the Ohio, nearly to its junction Avith the Tennessee and the
Cumberland, and across the Ohio River into the present State
of Ohio, where we note the beginning of Cincinnati. Other
infant settlements appear at this date. On the east side of
the Mississii)pi River, in the present State of Missi8sii)pi, is
a strip of settlement along the bluffs below the Yazoo
bottom. Besides the settlement on the present site of St.
Louis, not u, this time within the United States, is an adja-
cent settlement in what is noAV Illinois, while all the pioneer
settlements i)reviously noted have grown to a greater or less
extent.

From the region embraced between the frontier line and
the Atlantic must be deducted the Adirondack tract, in
northern New York, and the unsettled region in northern
Pennsylvania already referred to; so that the actual area of
settlement, bounded by a continuous line, is to be taken at
271,908 square miles. All this lies between 30° 45' and
45° 15' north latitude, and 67° and 88° west longitude.

To this should be added the aggregate extent of all settle-
ments lying outside of the frontier line, which collectively
amount to 38,800 square miles, making a total area of settle-
ment of 305,708 square miles. As the aggregate population
is .5,308,483, the average density of settlement is 17.4.

The infant settlements of this period have been much re-
tarded at many ]H>ints by the opposition of the Indian tribes;
)ut in the neigliborhood of the more densely settled portions
of the northern part of the country these obstacles have been
of less magnitude than farther south. In Georgia, espe-
cially, the large and powerful tribes of Creeks and Cherokees
have stubbornly opposed the progress of population.

During the decade just past Vermont, formed from a part
of New York, has been admitted to the Union ; also Ken-

INCREASE OF POPULATION.

381

tucky and Tennessee, formed from the "Territory south of
the River Ohio ; " Mississippi Territory, having however very
different boundaries from the present State of that name,
has been organized; while the "territory northwest of the
River Ohio " has been divided and Indiana Territoi-y organ-
ized from the western portion.

1810.

At 1810 we note great changes, especially the extension of
the sparse settlements of the interior. The hills of western
New York have become almost entirely covered with popula-
tion, which has spread along the south shore of Lake Erie
well over into Ohio, and has effected a junction with the
previously existing body of population about the forks of the
Ohio River, leaving unsettled an included heart-shaped area
in northern Pennsylvania, which comprises the rugged coun-
try of the Appalachian plateau. The occupation of the Ohio
River has now l)ecomc complete, from its head to its mouth,
with the exception of small gaps below the mouth of the
Tennessee. Spreading in every direction from the "dark
and bloody ground " of Kentucky, settlement covers almost
the entire State, while the southern border line has been
extended to the Tennessee River, in northern Alabama. In
Georgia settlements are still held back by the Creek and the
Cherokee Indians, although in 1802 a treaty with the former
tribe relieved the southwestern portion of the State of their
presence, and left the ground open for occui)ancy by the
whites. In Ohio settlements, starting from the Ohio River
and from southwestern Pennsylvania, liavc worked northward
and westward, until they cover two thirds of the area of the
State. Michigan and Indiana are still virgin territory, with
the excei)tion of a little strip about Detroit, in the former
State, and a small area in the southwestern part of the lat-
iov. St. Louis, from a fur-trading ])()st, has become an
important centre of settlement, population having spread
northward above the mouth of the Missoiiri and southward
along the Mississippi to the mouth of the Ohio. At the
mouth of the Arkansas, in what is now the State of Arkan-

r.slff

II:,

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\:iii

till

If i \

vi r c ; • !

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382

ECONOMIC HT STORY.

sas, is a similar body of settlement. The transfer of the
Territory of Louisiana to our jurisdiction, which was effected
in 1803, has brought into the country a large body of popula-
tion, which stretches along the ^lississippi River from its
mouth nearly u]) to the present noi'thern limit of the State of
Louisiana, up the Red River and the St. Francis, in general
occu|)ying the alluvial regions. The incipient settlements
noted on the last map in ^lississippi have effected a junction
with those of Louisiana, while in Lower Alabama and Mis-
sissi]»pi a similar patch ajjpears upon the ]\Iobile and the
Pearl rivers.

In this decade large additions have been made to the terri-
tory of the United States, and many chiinges have been
effected in the lines of interior division. The i)urcliase of
Louisiana has added 1,124,08") square miles, an oni])irc in it-
self, to the United States and has given to us alisolute control
of the Mississippi and its navigable branches. Georgia, dur-
ing the same jjcriod, has ceded to the United States the por-
tion of its territory which now constitutes the larger part of
the States of Ala))ama and Mississippi. The State of Ohio
has been formed from a j)ortion of what previously was known
as the " Territory north of the Ohio River. " Michigan Terri-
tory has been erected, comprising what is now the lower pen-
insula of Michigan; Indiana Territory has been restricted to
the ])resent limits of the State of that name; Illinois Terri-
tory conijjrises all of the present State of Illinois, with that of
Wisconsin and apart of Minnesota; while from the Louisiana
])urchase has been carved imder the name of the " Territory
of Orlenns" all that ])art of the present State of Louisiana
which lies west of the Mississippi river, the remiiinder of the
great territory so chea])ly accpiired from France being known
by the name of the "Louisiana Territory."

At this date the frontier line is 2.900 miles long and in-
cludes l)('tween itself nnd the Atlantic 408,80") s(|uare miles.
From this must be deductcMJ several large areas of unsettled
land ; first, the area in northern New York, now somewhat
smaller than ten years before, but still by no means inconsid-
erable in extent; second, the heart-shaped area in north-

INCREASE OF POPULATION.

383

sfcr of the
as effected
of populn-
r from its
lie State of
in general
ottlements
a junction
I and Mis-
i and the

the terri-

lave been

u'diasc of

pirc in it-

te control

r,u;ia, dur-

s tlic por-

;er part of

c of Ohio

as known

Terri-

nvcr i)en-

ricted to

is Terri-

1 that of

niisiana

'crritory

)iiisiana

er of the

g known

and in-
e miles,
nscttlcd
iiicwluit
iconsid-
L north-

western Pennsylvania embracing part of the Allegheny pla-
teau, in size about equal to the imscttled area in New York;
third, a sti-ip along the central part of what is now West Vir-
ginia, extending from the Potomac southward, taking in what
is now a part of eastern Kentucky and southwestern V^irginia,
and extending nearly to the border line of Tennessee ; fourth,
a comparatively small area in northern Tennessee upon the
Cumberland plateau. These tracts together comprise 20,050
S(piarc miles, making the actual area of settlement included
within the frontier line 382,845 square miles. All this lies
between latitude 29° 30' and 45° 15' north, and between the
meridians of 07° and 88" 30' west.

Beyond the frontier there are, in addition to thi steadily
increasing number of outposts and minor settlements, several
considerable bodies of population, which have been above
noted. The aggregate extent of these, and of the numerous
small patches of population scattered over the West and
South, may bo estimated at 25,100 square miles, making the
total area of settlement in 1810 407,945 square miles; the
aggregate population being 7, 239, 881, and the average density
of settlement 17.7 to the square mile.

Between 1800 and 1810 the principal territorial changes
have been as follows: Ohio has been admitted, and the
Territories of Illinois and Michigan have been formed from
parts of Indiana Territory.

j.620.

The decade from 1810 to 1820 has witnessed several terri-
torial changes. Florida at this date (1820) is a l)lank u]ion
the maj). The treaty with Spain, which gives her to us, is
signed, but the delivery has not yet taken place. Alabama
and Mississippi, made from the Mississippi Territory, have
been organized and admitted as States. Indiana and Illinois
appear as States Avith their present limits. The Territory of
Louisiana has been admitted as a Slate. The District of
Maine has also been erected into a State. Arkansas Terri-
tory has been cut from the southern portion of the Teiritory
of Louisiana. The Indian Territory has been constituted to

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384

ECONOMIC HISTORY.

serve as a reservation for the Indian tribes. Michigan
Territory has been extended to include all of the ])resent
States of Michigan, Wisconsin, and part of Minnesota.
That part of the old Louisiana Territory remaining, after
cuttin'^ out Arkansas and Indian Territory, has received the
name of "Missouri Territory."

Again, in 1820, we note a great change in regard to the
frontier line. It has become vastly more involved and com-
plex, extending from southeastern Michigan, on Lake St.
Clair, south westward into what is now Missouri; thence
making a great semicircle to the eastward, it sweeps west
again around a body of jjopulation in Louisiana, and ends on
the Gulf coast in that State. The area included by it has
immensely increased, but much of this increase is balanced
by the great extent of unsettled land included Avithin it.

Taking up the changes in detail, avc note, fii-st, the great
increase in the population of central Now York, a belt of
increased settlement having swei)t up the Mohawk valley to
Lake Ontario, and along its shore nearly to the Niagara
River. A similar increase is seen about the forks of the
Ohio River, while in northern Pennsylvania the unsettled
region on the Ai)palachian plateau has sensibly decreased in
size. The unsettled area in western Virginia and eastern
Kentucky has very greatly diminished, poijulation having
extended almost entirely over the Allegheny region in these
States. The little settlements about Detroit have extended
and spread ahmg the shore of Lake Er o, until they have
joined those in Ohio. The frontier lii.(j in Ohio has crept
northward and Avestward, leaving only the northwestern
corner of the State unoccupied. Population has spread
northward from Kentucky and westward from Ohio into
southern Indiana, covering sparsely tlic lower third of that
State. The groups of population around St. Louis, wliicli at
the time of the previous census were enjoying a rapid
growth, have extended widely, making a junction with the
settlements of Kentucky and Tennessee, along a broad belt
in southern Illinois; following the main watercourses, popu-
lation has gone many scores of miles up the Mississippi and

1' I

INCREASE OF POPULATION.

385

the Missouri rivers. The settlements in Alabama, which
up to this time had been very much retarded by the Creelvs,
were rapidly re-enforced and extended, in consequence of the
victory of General Jackson over this tribe and the subse-
quent cession of portions of this territory. Immigration to
Alabama has already become considerable, and in a short
time the whole central portion of the State, embracing a
large part of the region drained by the Mobile River and its
branches, will be covered by settlements, to extend north-
ward and clTect a junction with the Kentucky and Tennessee
settlements, and westward across the lower part of Missis-
sippi until they meet the Louisiana settlements. In Georgia
the Cherokces and the Creeks still hold settlement back
along the line of the Altamaha River. There are, however,
scattered bodies of population in various parts of the State,
though of small extent. In Louisiana wo note a gradual
increase of the extent of redeemed territory, which appears
to have been limited almost exactly by the borders of the
alluvial region. In Arkansas the settlements, which we saw
at 1810 at the mouth of the Arkansas River, have extended
up the bottom lands of that river and of the Mississippi, form-
ing a body of population of considerable size. i3csides these
a small body is found in the southern central part of the
State, at the southeastern base of the hill region, and another
in the prairie region in the northern part.

The frontier line now has a length of 4,100 miles, em-
bracing an area, after taking out all the unsettled regions
included between it, the Atlantic, and the Gulf, of 504,517
square miles, all lying between 29° 30' and 45° 30' north
latitude, and between G7° and 93° 45' west longitude. Out-
side the frontier lino are some l)odics of population on the
Arkansas, White, and Washita rivers, in Arkansas, as before
noted, as well as some small bodies in the Northwest. Com-
puting these at 4,200 square miles in the aggregate, we have
a total settled area of 508,717 square miles; the aggregate
population being 9,633,822, and the average density of set-
tlement 18.9 to the square mile.

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886

ECONOMIC HISTORY.

1830.

In the decade from 1820 to 1830 other territorial changes
have occurred. lu the early part of the decade the Ihial
transfer of Florida from Spanish jurisdiction was effected,
and it became a Territory of the United States. Missouri
has been carved from the southeastern part of the old Mis-
souri Territory, and admitted as a Slate. Otherwise the
States and Territories have remained nearly as before.
Settlement during the decade has again spread greatly.
The westward extension of the frontier does not appear to
have been so great as in some former periods, the energies
of the people being mainly given to filling up the included
areas. In other words, the decade from 1810 to 1820 seems
to have been one rather of blocking out work which the suc-
ceeding decade has been largely occupied in completing.

During this period the Indians, especially in the South,
have still delayed settlement to a great extent. The Creeks
and the Cherokees in Georgia and Alabama, and the Choc-
taws and the Chickasaws in Mississippi, occupy large areas
of the best portions of those States and successfully resist
encioachment upon their territory. Georgia, however, has
witnessed a large increase in settlement during the decade.
The settlements which have heretofore been stayed on the line
of the Altamaha spread westward across the central portion
of the State to its western boundary, where they have struck
against the barrier of the Creek territor}'. Stopped at this
point, they have moved southward down into the southwest
corner, and over into Florida, extending even to the Gulf
coast. Westward they have stretched across the southern
part of Alabama, and joined that body of settlement wl ich
was previously formed in the drainage-basin of the ]\Iobile
River. The Louisiana settlements have but slightly in-
creased, and no great change appears to have taken place in
Mississippi, owing largely to the cause above noted, namely,
the occupancy of the soil by Indians. In Arkansas the spread
of settlement has been in a strange and fragmentary way.
A line reaches from Louisiana up the Arkansas River to the

fii

;Hf :U

INCREASE OF POPULATION.

887

State line, where it is stopped abruptly by the boundary of
the Indian Territory. It extends up the Mississippi, and
joins the great body of population in Tennessee. A branch
extends northeastward from near Little Rock to the northern
portion of the State. All these settlements within Arkansas
Territory arc as yet very sparse. In Missouri the j)rincipal
extension of settlement has been in a broad belt up the Mis-
souri River, reaching to the jiresent site of Kansas City, at
the mouth of the Kansas River, where quite a dense body of
l)opulation aj)pears. Settlement has progressed in Illinois,
from the Mississippi River eastward and northward, covering
more than half the State. In Indiana it has followed up the
Wabash River, and thence has spread until it reaches nearly
to the north line of the State. But little of Ohio remains
unsettled. The sparse settlements about Detroit, in Michi-
gan Territory, have broadened out, extending into the inte-
rior of the State, while isolated patches have appeared in
various other localities.

Turning to the more densely settled parts of the country,
wc find that settlement is slowly making its way northward
in Maine, although discouraged by the poverty of the soil
and the severity of the climate. The unsettled tract in
northern New York is decreasing, but very slowly, as is
also the case with the unsettled area in northern Pennsylva-
nia. In western Virginia the unsettled tracts arc reduced
to almost nothing, while the vacant region in eastern Ten-
nessee, on the Cumberland plateau, is rapidly diminishing.

At this date, 1830, the frontier line has a length of 5,300
miles, and the aggregate area now embraced Ijetween the
ocean, the Gulf, and the frontier line is 725,406 square
miles. Of this, however, not less than 97,389 square miles
are comprised within the included vacant tracts, leaving
only 628,017 square miles as the settled area within the
frontier line, all of which lies between latitude 29° 15' and
46" 15' north, and between longitude 67° and 95° west.

Outside the body of continuous settlement are no longer
found large groups, but several small patches of population
appear in Ohio, Indiana, Illinois, Michigan, and Wisconsin,

\'<: *Y'

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III

iff 1l

388

ECONOMIC IIISTOHY.

ugji;ro<,'iiting 4,700 square miles, making a total settled area,
in 18;]U, oF ()!5-,7l7 siiuare miles. As the aggregate popula-
tion is 12,HtJ0,020, the average density of settlement is 20.3
to the scjuare mile.

1840.

During the decade ending in 1840 the State of Michigan
has been created with its present limits, the rcnuiinder of the
old territory being known as Wisconsin Territory. Iowa
Territory has been created from a portion of Missouri Terri-
tory, embracing the present State of Iowa and the western
part of Mimiesota, and Arkansas has been admitted to the
Union.

In 1840 we find, by examining the map of population that
the process of filling up and completing the work blocked
out between 1810 and 1820 has been carried still farther.
From Georgia, Alabama, and Mississippi the Cherokee,
Creek, Choctaw, and Chickasaw Indians, Avho, at the time
of the previous census, occupied large areas in these States,
and formed a very serious obstacle to settlement, have been
removed to the Indian Territory, and their country has been
opened up to settlement. Within the two or three yeai-s
which have elajjsed since the removal of these Indians the
lands relin(piished by them have been entirely taken up,
and the country has been covered with a comparatively dense
settlement. In northern Illinois, the Sac and Fox and
Pottawatomie tribes having been removed to the Indian
Territory, their country has been promptly taken ujt, and
we find now settlements carried over the whole extent of In-
diana, Illinois, and across Michigan and Wisconsin as far
north as the forty-third parallel. Population has crossed
1ho ^lississippi River into Iowa Territory, and occupies a
broad belt up and down that stream. In ^Missouri the settle-
ments have spread northward from the Missouri River nearly
to the boundary of the State, and southward till they cover
most of the southern portion, and make connection in two
places with the settlements of Arkansas. The unsettled area
found in southern Missoui'i, together with that in north-

'Ih

INCREASE OF POPULATIOX.

380

wostcrn Arkansas, is due to the hilly and ruirgcd nature ot'
the I'ountry, and to the poverty of the soil, as eonipared with
the rieh prairie lands all around. In Arkansas the settle-
ments remain sparst^ and have spread widely away from the
streams, eoveriu}^ much of tlic prairie ])art8 of the State.
There is, besides the area in northwestern Ai'knnsas just
mentioned, a larjre area in the northeastern part of the
State, comprised almost entirely within the alluvial regions
of the St. Francis Ilivcr, and also one in the southern ])ortlon,
extending over into northern Louisiana which is entii-ely in
the fertili! ))rairie section. The fourth unsettled region lies
in the southwest part of the State.

In the older States wc note a gradual decrease in the unset-
tled areas, as in Maine and in New York. In northern Penn-
sylvania the unsettled section has entirely disa|»peared. A
small ])ortion of the unsettled patch on the Cuml)erland
plateau still remains. In southern Georgia the ()keefenoke(!
swamp and the pine barrens adjacent luive thus far repelled
settlement, although population has increased in Florida,
passing entirely around this area to the south. The greater
part of Florida, however, including nearly all the peninsula
and several large areas along the Gulf coast, still i-cniains
without settlement. This is doubtless due, in part, to the
nature of the country, being alternately swamp and hum-
mock, and in part to the hostility of the Seminole Indians,
who still occujjy nearly all of the peninsula.

The frontier line in 1840 has a length of 8,300 miles.
This shrinking in its length is due to its rectification on the
northwest and southwest, owing to the filling out of the entire
interior. It encloses an area of OOOJJ.'jS sipiare miles, all
lying between latitude 29° and 415" 30' north, and longitu(l(>
Cu° and 95° 30' west. The vacant tracts have, as noted
above, decreased, although they are still (juite considerable
in Missouri and Arkansas. The total area of the vacant
tracts is 9.5,51(5 square miles. The settled area outside the
frontier line is notably small, and amounts, in the aggregate,
to only 2,150 miles, making the entire settled area 807,292
square miles in 1840. The aggregate ]iopulation being
17,009,453, the average density is 21.1 to the square mile.

r • ■ (

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890

ECONOMIC HISTORY.

18S0.

notwocu 1840 and 18r)0 the liinita of our country hnvo
boon I'urthur extended by the annexation of the State of
Texas and of territory acipiired from Mexico by the treaty of
(luadalupe llidal^^o. The States of Iowa, Wisconsin, and
Floi-ida have lieen admitted to the Union, and the Terri-
tories of Alinncsofa, Oref>;on, and New Mexico have been
created. An examination of the maps shows that the fron-
tier line has chau<;(Ml very little during this decade. At the
western border of Arkansas the extension of settlement is
peremptDrily limited by the boundary of tiie Indian Terri-
toi'y; but curiously enough also, the western boundary of
Missouri i>uts almost a complete stoj) to all settlement, not-
withstanding that some of the most densely jtopulated i)or-
tions of the State lie directly on that boundary. In Iowa
settlements have nuulc sonu) advance, moving up the Mis-
souri, the Des Moines, and other rivers. The settlements
in Miimesota at and about St. Paul, which appeared in 1840,
arc greatly exteiuled tip and down the Mississippi River,
while other scattering bodies of population ap])ear in north-
ern Wisconsin. In the southern part of the State settlement
has made considerable advance, especially in a northeastern
direction, toAvards Green I3ay. In Michigan the change has
been very slight.

Turning to the southwest we find Texas, for the first time
on the map of the United States, with a considerable extent
of settlement; in general, however, it is very s])arse, most
of it Iving in the eastern part of the State, and being largely
dependent upon the grazing industry.

The included unsettled areas now are very small and few
in numl)er. There still remains one in southern Missouri,
in the hilly country ; a small one in nortlioastcrn Arkansas, in
the swampy and alluvial region; and one in the similar
country in the Yazoo bottom-lands. Along the coast of
Florida are found two jjatches of considerable size, which are
confined to the swampy coast regions. The same is the case
along the coast of Louisiana. The sparse settlements of

iWr

umtry have
ic State of
lie treat}' of
M)nHin, and

the Terri-

liavc been
at the f rou-
te. At the
ttleincnt ia
(liau Tcrri-
jouiulary of
cmont, not-
j)ulate(l i)or-
'. In Iowa
ip the Mis-
settlements
red in 1«40,
f\\)\n River,
ai* in nortli-

settlement
lortheastern

ehangc has

le first time

'.'title extent

larse, most

ing largely

all and few
n Missonri,
rkansas, in
the similar
le coast of
whieh are
is the case
Icments of

■i

INCREASE OF POPULATION.

391

Texas arc also interspersed witli several patches devoid of
settk'ment. In southfrn Georgia the hirgo vacant space
heretofore noted, exteiuling also into mtrthcrn Florida, luis
entirely disappeared, and thi! Florida settlements Imve al-
ready reached southward to a eousideralile distance in the
peninsula, being now free to extend without fear of hostile
Seuiinoles, the greater part of whom have bfjcn removed to
the Indian Territory.

The frontier line, whieh now extends around a eonsideral)lc
part of Texas and issues on the (Julf coast at the mouth of the
Nueces River, is 4,500 miles in length. The aggregate area in-
cluded Ity it is 1,005,213 square miles, from which deduction
is to be made for vacant spaces, in all, 04,330 stpuire miles.
The isolated settlements lying outside this body in the west-
ern part of the country amount to 4,775 square miles.

But it is no longer by a line drawn around from the St.
Croix River to the Gulf of Mexico that we embrace all the
pojtulation of the United States, excepting only a few outly-
ing jiosts and small settlements. We may now, from the
Pacific, run a line around 80,000 miners and adventurers,
the pioneers of more than one State of the Union soon to
arise on that coast This body of settlement has been
formed, in the main, since the actpiisition of the territory by
the United States, and, it might even be said, within the
last year (1849-50), dating from the discovery of gold in
California. These settlements may be comptited rudely at
33,600 square miles, making a total area of settlement at
that date of 979,249 square miles, the aggregate populatitm
Itcing 23,191,870 and the average density of settlement 23.7
to the square mile.

1860.

Between 1850 and 1860 the territorial changes noted are
as follows: the strip of Arizona and Xew Mexico south of
the Gila River has been acquired from Mexico by the Gads-
den purchase (1853); Minnesota Territory has been admitted
as a State; Kansas and Nebraska Territories have been
formed from parts of Missouri Territory; California and

lit

! II !

392

ECONOMIC HISTORY.

Oregon have been admitted as States, while, in the unsettled
parts of the Cordillcran region, two new Territories (Utah
and Washington) have been formed out of parts of that terra
incoynita which we bought from France as a part of Louisi-
ana, and of that which we acquired by conquest from Mexico.
At this date we note the first extension of settlements beyond
the line of the Missouri River. The march of settlement up
the slope of the great plains has begun. In Kansas and Ne-
braska population is now found beyond the 97th meridian.
Texas has filled up even more rapidly, its extreme settle-
ments reaching to the 100th meridian, while the gaps noted
at the date of the last census have all been filled by popula-
tion. The incipient settlements about St. Paul, in Minnesota,
have grown like Jonah's gourd, spreading in all directions,
and forming a broad band of union with the main body of set-
tlement down the line of the Mississippi River. In Iowa set-
tlements have crept steadily northwestward along the course
of the drainage, until the State is nearly covered. Following
up the Missouri, population has reached out into the south-
eastern corner of the jjrosent area of Dakota. In Wisconsin
the settlements have moved at least one degree farther north,
while in the lower peninsula of Michigan they have spread up
the lake shores, nearly encircling it on the side next Lake
Michigan. On the upper peninsula the little settlements
which appeared in 1850 in the copper region on Koewccnaw
Point have extended and increased greatly in density as that
mining interest has developed in value. In northern New
York there is apparently no change in the unsettled area. In
northern Maine we note, for the first time, a decided move-
ment towards the settlement of its unoccupied territory, in
the extension of the settlements on its eastern and northern
border up the St. John River. The unsettled regions in south-
ern ^lissouri, northeastern Arkansas, and northwestern Mis-
sissipi)i have become sparsely covered by population. Along
the Gulf coast there is little or no change. There is to be
noted a slight extension of settlement southward in the pen-
insula of Florida.

The frontier line now measures 5,300 miles, and em-

INCREASE OF POPULATION.

393

braces 1,126,518 square miles, lying between latitude 28° 30'
and 47° 30' north, and between longitude 67° and 99° 30'
west. From this deduction should bo made on account of
vacant spaces, amounting to 39,139 square miles, found
mainly in New York and along the Gulf coast. The outly-
ing settlements beyond the 100th meridian are now numer-
ous. They include, among others, a strip extending far up
the Rio Grande in Texas, embracing 7,475 square miles (a
region given over to the raising of sheep), while the Pacific
settlements, now com))rising one sovereign State, arc nearly
three times as extensive as at 1850, embracing 99,900
square miles. The total area of settlement in 1860 is thus
1,194,754 square miles; the aggregate population is now
31,443,321, and the average density of settlement 26.3 to
the square mile.

1870.

During the decade from 1860 to 1870 a number of territo-
rial changes have been effected in the extreme West. Ari-
zona, Colorado, Dakota, Idaho, Montana," Nevada, and
Wyoming have been organized as Territories. Kansas,
Nebraska, and Nevada have been admitted as States. West
Virginia has been cut off from the mother Commonwealth
and made a separate State.

In 1870 we note a gradual and steady extension of the fron-
tier line westward over the great plains. The unsettled areas
in Maine, New York, and Florida have not greatly dimin-
ished, but in Michigan the extension of the lumber interests
northward and inward from the Lake shore has reduced con-
siderably the unsettled portion. On the upper peninsula
the settlements have increased somewhat, owing to the dis-
covery of the rich iron deposits destined to play so imi)ortant
a part in the manufacturing industry of the country.

Settlement has spread westward to the boundary of the
State in southern Minnesota, and up the Big Sioux River in
southeastern Dakota. Iowa is entirely reclaimed, excepting
a small area of perhaps a thousand square miles in its north-
western corner. Through Kansas and Nebraska the frontier

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394

ECONOMIC HISTORY.

c '

It mI:

line has moved steadily westward, following in general the
courses of the larger streams and of the newly constructed
railroads. The frontier in Texas has changed but little,
that little consisting of a general westward movement. In
the Cordilleran region settlements have extended but slowly.
Those upon the Pacific coast show little change, either in
extent or in density. In short, we sec everywhere the
effects of the war in the partial stoppage of the progress of
development.

The settlements in the West, beyond the frontier line have
arranged themselves mainly in three belts. The most east-
ern of these is located in central Colorado, New Mexico,
and Wyoming, along the eastern base of and among the
Rocky mountains. To this region settlement was first at-
tracted in 1859 and 1860 by discovery of mineral deposits,
and has been retained by the richness of the soil and by
the abundance of water for irrigation, which have promoted
the agricultural industry.

The second belt of settlement is that of Utah, settled in
1847 by the Mormons fleeing from Illinois. This community
then differed, and still differs, radically from that of the
Rocky mountains, being essentially agricultural, mining
having been discountenanced from the first by the church
authorities, as tending to fill the *' Promised Land " with
Gentile adventurers, and thereby imperil Mormon institu-
tions. The settlements of th's group, as seen on the map for
1870, extend from southern liabo southward through cen-
tral Utah, and along the eastern base of the Wahsatch range
into northern Arizona. They consist mainly of scattered
hamlets and small towns, about which are grouped the farms
of the communities.

The third strip is that in the Pacific States and Territo-
ries, extending from Washington Territory southward to
southern California and eastward to the system of "sinks,"
in western Nevada. This group of population owes its ex-
istence to the mining industry, the moving cause in nearly
all westward migrations. Originated in 1849 by a "stam-
pede " the like of which the world had never before seen, it

INCREASE OF POPULATION.

395

g in general the
ewly constructed
ngod but little,

movement. In
iided but slowly,
lange, either in
everywhere the

the progress of

>ntier line have
The most east-
^ew Mexico,
■nd among the
t was first at-
leral deposits,
c soil and by
liave promoted

tah, settled in
ia community
1 that of the
ural, mining
' the church
Land " with
tnon institu-
thc map for
hrough cen-
isatch range
of scattered
'd the farms

nd Territo-
ithward to
:>f "sinks,"
"'cs its ex-
0 in nearly
a "stam-
re seen, it

has grown by successive impulses as new fields for rapid
money-getting have been de veloped. Latterly-, however, the
value of this region to the agriculturist has been recognized,
and the character of the occupations of the people is under-
going a marked change.

These three great Western groups comprise nine tenths of
the population west of the frontier line. The remainder is
scattered about in the valleys and the mountains of Montana,
Idaho, and Arizona, at military posts, isolated mining
camps, and on cattle ranches.

The frontier line in 1870 embraces 1,178,068 square
miles, all between 27° 15' and 47° 30' north latitude, and
between 67° and 99° 45' west longitude. From this, how-
ever, deduction is to be made of 37,739 square miles, on
account of interior spaces containing no population. To
what remains we must add 11,810 square miles on account
of settled tracts east of the 100th meridian, lying outside of
the frontier line, and 120,100 square miles on account of
settlements in the Cordilleran region and on the PaciP.c
coast, making the total area of settlement for 1870 not less
than 1,272,239 square miles, the aggregate population being
38,558,371, and the average density of settlement 30.3 to
the square mile.

1880.

In tracing the history of the settlement of our country we
are now brought down to the latest census, that of 1880.
During the decade just passed Colorado has been added to
the sisterhood of States. The first point that strikes us in
examining the map showing the areas of settlement at this
date, as compared with previous ones, is the great extent of
territory which has been brought under occupation during
the past ten years. Not only has settlement spread west-
ward over largo areas in Dakota, Nebraska, Kansas, and
Texas, thus moving the frontier line of the main body of
settlement westward many scores of miles, but the isolated
settlements of the Cordilleran region and of the Pacific coast
show enormous accessions of occupied territory.

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396

ECONOMIC HISTORY.

The migration of farming population to the northeastern
part of Maine has widened the settled area to a marked ex-
tent, probably more than has been done during any previous
decade. The vacant space in the Adirondack region of
northern New York has been lessened in size, and its limits
reduced practically to the actual mountain tract. The most
notable change, however, in New England and the ]\liddle
States, including Ohio and Indiana, has been the increase
in density of population and the migration to cities, with
the consefjuent increase of the urban population, as indicated
by the number and the size of the spots representing these
cities upon the mapi Throughout the Southern States there
is to be noted not only a general increase in the density of
population and a decrease of unsettled areas, but a greater
approach to uniformity of settlement throughout the whole
region. The unsettled area of the peninsula of Florida has
decreased decidedly while the vacant spaces heretofore seen
along the upper coast of Florida and Louisiana have entirely
disappeared. Although the Appalachian mountain system is
still distinctly outlined by its general lighter color on the
map, its density of population more nearly ai)proaohes that
of the country on the east and on the west. In Slichigan
there is seen a very decided increase of the settled region.
Settlements have not only surrounded the head of the lower
peninsula, but they leave only a very small body of unsettled
country in the interior. In the uj)per i)eninsula the copper
and the iron interests, and the railroads which subserve them,
have peopled quite a largo extent of territory. In Wisconsin
the imsettled area is rapidly decreasing as railroads stretch
their arms out over the vacant tracts. In Mini.esota and in
eastern Dakota the building of railroads, and the develop-
ment of the latent capabilities of this region in the cultiva-
tion of wheat, have caused a rapid (low of settlement, and
now the frontier line of population, instead of returning to
Lake Michigan, as it did ten years ago, meets the boundary
line of the British possessions west of the 97th moridiaii.
The settlements in Kansas and Nebraska have made great
strides over the plains, reaching at several points the boun-

INCREASE OF POPULATION.

397

1 iiioriuu.ii.

tlaiy of the humid region, so that their westward extension
beyond this point is to be governed hereafter by the supply
of water in the streams. As a natural result, we see settle-
ments following those streams in long ribbons of population.
In Nebraska these narrow belts have reaehed the western
boundary of the State at two points: one upon the South
Platte, and the other upon the Republican River. In Kansas,
too, the settlements have followed the Kansas River and its
branches and the Arkansas nearly to the western boundary
of the State. Texas also has made great strides, both in the
extension of the frontier line of settlement and in the in-
crease in the density of poi»ulation, due both to the building
of railroads and to the development of the cattle, sheep, and
agricultural interests. The heavy population in the prairie
portions of the State is explained by the railroads which now
traverse them. In Dakota, besides the agricultural region
in the eastern part of the Territory, wo note the formation
of a body of settlement in the Black Hills, in the southwest
corner, which, in 1870, was a part of the reservation of the
Sioux Indians. This settlement is the result of the discov-
ery of valuable gold deposits. In Montana there appears a
great extension of the settled area, which, as it is mainly
duo to agricultural interests, is found chiefly along the
courses of the streams. Mining has, however, played not a
small part in this increase in settlement. Idaho, too, shows
a decided growth from the same causes. The small settle-
ments which, in 1870, were located about Bolsd City, and
near the mouth of the Clearwater, have now extended their
areas to many hundreds of square miles. The settlement in
the southeastern corner of the Territory is almost purely of
Mormons, and has not made a marked increase.

Of all the States and Territories of the Cordilleran region
Colorado has made the greatest stride during the decade.
From a narrow strip of settlement, extending along the im-
mediate base of the Rocky ]\Iountains, the belt has increased
so that it comprises the whole mountain region, besides a
great extension outward upon the plains. This increase is
the result of the discovery of very extensive and very rich

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ECONOMIC HISTORY.

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mineral deposits about Leadville, producing a "stampede"
second only to that of '49 and '50 to California. Miners
have spread over the whole mountain region till every range
and ridge swarms with them. New Mexico shows but little
change, although the recent extension of railroads in the
Territory and the opening up of mineral resources will, no
doubt, in the near future, add largely to its population.
Arizona, too, although its extent of settlement has increased
somewhat, is but just commencing to enjoy a period of rapid
development, owing to the extension of railroads and to the
suppression of hostile Indians. Utah presents us with a
case dissimilar to any other of the Territories, a case of
steady, regular growth, due almost entirely to its agricul-
tural capabilities, as was noted above. This is duo to the
policy of the Mormon Church, which has steadily discounte-
nanced mining and speculation in all forms, and has encour-
aged in every way agricultural pursuits. Nevada shows a
slight extension of settlement, due mainly to the gradual
increase in the agricultural interest. The mining industry
is probably not more flourishing at present in this State than
it was ten years ago, and the population dependent upon it
is, if anything, less in number. In California, as the atten-
tion of the people has become devoted more and more to
agricultural pursuits, at the expense of the mining and cattle
industries, we note a tendency to a more even distribution
of the inhabitants. The population in some of the mining
regions has decreased, while over the area of the great val-
ley, and in the fertile valleys of the Coast ranges, it has
increased. In Oregon the increase has been mainly in the
section east of the Cascade range, a region drained by the
Des Chutes and the John Day rivers, and by the smaller
tributaries of the Snake, — a region which, with the cori'es-
ponding section in Washington Territory, is now coming to
the front as a wheat-producing district. In most of the set-
tled portions here spoken of irrigation is not necessary for
the cultivation of crops, and consequently the possibilities of
the region in the direction of agricultural development are
very great. In Washington Territory, which in 1870 had

•i-ii

INCREASE OF POPULATION.

399

been scarcely touched by immigration, we find the valley
west of the Cascade Mountains tolerably well settled through-
out, while the stream of settlement has poured up the
Columbia into the valleys of the Walla Walla and the Snake
rivers and the great plain of the Columbia, induced thither
by the facilities for raising cattle and by the great profits of
wheat cultivation.

The length of the frontier line in 1880 is 3,337 miles.
The area included between the frontier line, the Atlantic
and the Gulf coast, and the northern boundary is 1,398,945
square miles, lying between 26° and 49° north latitude and
67° and 102° west longitude. From this must be deducted,
for unsettled areas, as follows: —

Square Miles.

Maine 12,000

New York 2,200

Michigan 10,200

Wisconsin 10,200

Minnesota 34,000

Florida 20,800

making a total of 89,400 square miles, leaving 1,309,545
square miles.

To this must be added the isolated areas of settlement in
the Cordilleran region and the extent of settlement on the
Pacific coast, which amount in the aggregate to 260,025
square miles, making a total settled area of 1,569,570 square
miles. The population is 50,155,783, and the average den-
sity of settlement 32 to the square mile.

i^M

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400

ECONOMIC HISTORY.

THE FACTORY SYSTEM.

FuoM Wright's Repoht on tiiu Factouv System of toe United
States, Tenth Census, Vol. II. pp. 537-511.

At the time of the agitation of their independence the
desire to plant the mechanic arts in this country became
ahnost a passion, — certainly a feature of the patriotism of
the day. Hon. Edward Everett, in an address on American
manufactures^ in New York, in 1831, stated: —

"Tlio first measuros of the patriots aimed to establish their in-
dependence on the basis of tlie productive industry and laborious
arts of the country. They began witli a non-importation agree-
ment nearly two years before the Declaration of Independence.
That agreement, . . . with the exception of tlie Address to the
People of America and Great Britain, was the only positive act of
the first Congress."

In this country, as well as in England, the germ of the
textile factory existed in the fulling and carding mills; the
former, dating earlier, being the mills for finishing the coarse
cloths woven by hand in the homes of our ancestors ; in the
latter, the cavding-mill, the wool was prepared for the hand-
wheel. At the close of the Revolution the domestic system
of manufactures prevailed throughout the States.

The first attempts to secure the spinning machinery which
had come into use in England were made in Philadelphia
early in the year 1775, when probably the first spinning-
jenny ever seen in America was exhibited in that city. Dur-
ing the war the manufacturers of Philadelphia extended their
enterprises, and even built and run mills which writers often
call factories, but they can hardly be classed under that term.
Similar efforts, all preliminary to the establishment of the
factory system, were made in Worcester, Massachusetts, in
1780. In 1781 the British Parliament, determined that the
textile machinery by which the manufactures of England were

lii

THE FACTORY SYSTEM.

401

)F THE United
511.

jpcndcnco the

uutry became

patriotism of

1 on American

ablisli their in-
•y and laborious
lortatiou agrce-
' Iiulepeiulcnce.
Address to the
y positive act of

0 germ of the
ing mills ; the
ling the coarse
icstors ; in the
for the hand-
nucstic system
ites.

chincry which
Philadelphia
irst spinning-
at city. Dur-
cxtcndcd their
writers often
idcr that term,
ishment of the
ssachusetts, in
Tiined that the
f England were

being rapidly extended, and which the continental producers
were anxious to secure, should not be used by the people of
America, re-enacted and enlarged the scope of the statute of
1774 against its exportation. By 21 George 111., c. 37, it
was provided thuL any person who packed or put on board,
or caused to be brought to any place in order to be put on
any vessel for exportation, any naachinc, engine, tool, i)ress,
l)a]ior, utensil, or implement, or any j)art thereof, which now
is or hereafter may be used in the woollen, cotton, linen, or
silk manufacture of the kingdom, or goods wherein wool,
cotton, linen, or silk are used, or any model or plan of such
machinery, tool, engine, press, utensil, or implement, should
forfeit every such machine, etc., and all goods packed there-
with, and c£200, and suffer imprisonment for one year. In
1782 a law was enacted which prohibited, under penalty of
^oOO, the exportation or the attempt to export "blocks,
plates, engines, tools, or utensils used in or which are proper
for the preparing or finishing of the calico, cottim, muslin, or
linen printing manufactures, or any part thereof." The
same act prohibited the transportation of tools employed in
the iron and steel manufactures. Acts were also passed in-
terdicting the emigration of artificers. All these laws were
enforced with great vigilance, and were of course serious
obstacles to the institution of the new system of manufacture
iu America.

The manufacturers of this country were thus compelled
either to smuggle or to invent their machinerv. Both
methods were practised until most of the secrets of the
manufacture of common goods were made availalile here.

The planting of the mechanic arts in this country became
a necessity during the War of the Revolution, and after-
wards the spirit of American enter) rise demanded that New
England and the Middle States should utilize the watcr-
powcrs which they possessed, and by such utilization supply
the people with home manufactures.

When the people of the States saw that the Treaty of
Paris had not brought industrial independence, a new form
of expression of patriotism took the place of military service;

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ECONOMIC HISTORY.

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and associations were formed, the object of which wns to
discourage the use of British goods ; and as the Articles of
Confederation did not provide for the regulation of com-
merce, the Legislatures of the States were besought to pro-
tect home manufactures. The Constitution of 1789 remedied
the defects of the articles in this rcsjiect, and gave Ccjngress
the power to legislate on commercial affairs. The Consti-
tution was really the outcome of the industrial necessities of
the people, because it was on account of the difiiculties and
the irritations growing out of the various commercial regula-
tions of the individual States that a convention of commis-
sioners from the various States was held in Annapolis in Sep-
tember, 1786, which convention recommended the one that
framed the new or present Constitution of the United States.

Of course those industries whose products were called for
by the necessities of the war were g.oatly stimulated, but with
peace came reaction and the flooding of our markets with
foreign goods.

The second act under the Constitution was passed July 4,
1789, with this preamble : —

"Whereas it is necessary for the support of the government, for
the discharge of the debts of the United States, and for tlie encour-
agement and tlie protection of manufactures, tliat duties be laid on
goods, wares, and mercliandise imported;

" Be it e7iacted, ate."

Patriotism and statute law thus paved the way for the
importation of the factory system of industry, and so its
institution here, as well as in England, was the result of
both moral and economical forces.

As early as 1786, before the adoption of the Constitution
of the United States, the Legislature of Massachusetts
offered encouragement for the introduction of machinery for
carding and spinning by granting to Robert and Alex-
ander Barr the sum of £200 to enable them to complete a
roping-machine, and also to "construct such other machines
as are necessary for the purpose of carding, roping, and
spinning of sheep's wool, as well as of cotton wool. " The

THE FACTORY SYSTEM.

408

ic way for the

ry, and so its

the result of

next year these parties were granted six tickets in a land-
lottery, — otliers engaj^ed in the invention and construction
of cotton-spinning niachinea at JJrldgewater, lit'ing associ-
ated with the Harrs, who came to Massachusetts from Scot-
land at the invitaticm of Hon. Hugh Orr, of nri<igewater,
and for the purpose of constructing spinning-machines.
There is no doul)t that the machinery built l)y them was the
first in this country which included the Arkwright devices ;
the first factory, however, in America ex[)ressly for the
manufacture of cotton goods was erected at Beverly, Massa-
chusetts, in 1787. This enterprise was aided by the Legis-
lature. Tiio factory at Beverly was built of brick, was
driven by horse-power, and was continued in operation for
several years, but its career as a cotton-mill was brief, and
no great success attended it. About the same time other
attempts had been made in Rhode Island, New York, and
Pennsylvania, but j)rincipally in Rhode Island and that part
of Massachusetts contiguous to Rhode Island.

The honor of the introduction of power-8|)inning machines
in this country, and of their early use here, is shared by
these last-named States; for while Massachusetts claims to
have made the first experiments in embodying the principles
of Arkwright's inventions and the first cotton factory in
America, Rhode Island claims the first factory in which
perfected machinery, made after the English models, Avas
practically employed. This was the factory built by Samuel
Slater, in 1790, in Pawtucket, Rhode Island, which still
stands in the rear of Mill Street in that city, and the hum
of cotton machinery can still be heard within its walls.
Previous to 1790 the common jenny and stock-card had been
in operation upon a small scale in various parts of the
United States, but principally in Pennsylvania, New York,
Rhode Island, and Massachusetts ; but every endeavor to in-
troduce the system of spinning known as water-frame spin-
ning, or Arkwright's method, had failed. The introduction
of this system was the work of Slater, whom President
Jackson designated "the father of American manufactures."
Samuel Slater was born in Belper, Derbyshire, England,

! —

404

ECONOMIC IllSrORY.

June 0, 1708, and nt fourteen years of ago was bound as nn
apprcnlico to Jedediah Strutt, Ks(i., a manufacturer of
cotton machinery at Milford, near Helper. Strutt was for
several years a partner of Sir Ilichard Arlcwright in the
cotton-spinning l)usineH8; so young Slater had every oppor-
tunity to master the details of the (jonstruction of tl»e cotton
machinery then in us(! in England; for during the last four
or (he years of his apprenticeship he served as general over-
seer, not only in mailing machinery, hut in the manufactur-
ing department of Strutt's factory. Near the close of his
term his attention was drawn to the wants of the States by
accidentally seeing a notice in an American paper of the
efforts vaiious States were making l»y way of offering
bounties to parties for the production of cotton machinery.
Slater knew well that under the laws of England he could
carry neither machines nor mod(ds or jjlans of nuichines out
of the country; so, after completing his full time with Mr.
Strutt, he Cimtinued some time longer with him, superin-
tending some new works Mr. Strutt was erecting. This he
did that he might so perfect his knowledge of the business
in every department that he could construct machinery from
memory without taking plims, models, or specifications.
With this knowledge Slater embarked at London, September
13, 1789, for New York, Avhere he landed November 17, and
at once sought parties interested in cotton manufactures.
Finding the works of the New York Manufacturing Com-
pany, to whom he was introduced, unsatisfactory, he corres-
ponded with jMessrs. IJrown <t Almy, of Providence, who
owned some crude spinning-machines, some of which came
from the factory at Beverly, ^Massachusetts. In January-,
1790, Slater made arrangements with IJrown & Almy to
construct machinery on the English plan. This he did at
Pawtucket, making the machinery principally with his own
liands, and on the 20th of December, 1790, he started three
cards, drawing and roving, together with seventy-two si)in-
dles, working entirely on the Arkwright ))lan, and being the
first of the kind ever operated in America.

It is generally supposed that the course of the progress of

'l[v.

THE FACTORY SYSTE^^.

406

bounil ns nn
luriicturer of
Initt W118 for
rij^ht in tho
ovory oppor-
of the cotton
; the last four
general ovcr-
L' manvifaetur-
close of Ills
the States Ity
paper of the
y of olTering
)U maehinery.
• liuul he eouhl
i machines out
time with Mr.
him, superin-
ting. This he
of the husiness
lachinory h-om
specifications.
Ion, September
ember 17, and
manufactures,
iieturing Com-
)ry, he corres-
ovitlence, who
)f which came
In January,
u <t Almy to
This he did at
with his own
c started three
enty-two spin-
and being the

the progress of

the manufacture of cotton goods in this country is quite
clearly marked; yet a careful study of the subject seems
rather to dissipato the line of advancement instead of bring-
ing it into clearer view. Dr. Leander IJishop, in his exceed-
ingly valuable work, "A History of American Manufactures,"
in speaking of th(! clothing manufacturi!, states that a, corres-
j)i)ndent of the "American Museum," writing from Charles-
ton, South Carolina, in July, 1790, refers to a gentleman
who "had compl(;te(| ;ind liad in operation on the High Hills
of the Santee near Statesburg, giiuiing, carding, and other
machines driven by water, and also spinning-machines, with
eighty-four Hi)indles each, with every necessary article for
manufacturing cotton. If this information be correct, tho
attempt to manufacture by machinery tho cotton which they
were then beginning to cultivate extensively was nearly as
early as those of the Northern States."

Certainly this bit of history of attempts in Southern
States, of the efforts of Samuel Wetherell, of Philadelphia,
of the Beverly Company in Massachusetts, of Moses ]}rown
at Providence, 11. I., all before Slater's coming, to introduce
spinning by power, illustrates the dilliculty of locating tho
origin of an institution when a country of such projmrtions
as our own constitutes the field. It is safe, historically, to
start with Slater as the first to erect cotton machinery on the
English plan, and to give the factory system 17!)0 as its
birthday.

Tho progress of tho system has been uninterrupted from
1790, save by temporary causes and for brief periods; but
these interruptions only gav(> an increased Impetus to its
growth. In 1792, l)y the invention of the cotton-gin, an
American, Eli Whitney, of Massachusetts, residing tempo-
rarily in Georgia, contributed as much toward the growth of
the factory system as England had contributed by the splen-
did series of inventions which made the cotton-manufacturing
machinery of the system.

The alarm of the people at the increase in the demand for
foreign goods took shape again in 1794 and tho decade fol-
lowing, and by patriotic appeals to all classes, societies and
clubs wore formed pledged to wear only home-made goods.

ECONOMIC HISTORY.

hi I

r
If i

,m\

Congress was called upon to restrict importations. The re-
sult of all these efforts and influences stimulated the manu-
facture of cotton and other textiles. The water privileges of
New England and the Middle States offered to enterprising
men the inducement to build factories for the spinning of
yarn for the household manufacture of cloth. At the close
of 1809, according to a report made by Mr. Albert Gallatin,
Secretary of the Treasury in 1810, eighty-seven cotton fac-
tories had been erected in the United States, which, when in
operation, would employ 80,000 spindles.

The perfect factory, the scientific arrangement of parts for
the successive processes necessary for the manipulation of the
raw material til! it came out finished goods, had not yet
been constructed As 1 have said, the power-loom did not
come into use in England till about 1806, while in this coun-
try it was not used at all till after the war of 1812. In Eng-
land even it had not been used in the same factory with the
spinning-machines. In fact, for many years the custom of
spinning the yarn under one management and weaving the
cloth under another has prevailed in England.

In 1811 Mr. Francis C. Lowell, of Boston, visited England
and spent much time in insjiecting cotton factories, for the
purpose of obtaining all possible information relative to cot-
ton manufacture, with a view to the introduction of improved
machinery in the United States. The power-loom was being
introduced in Great Britain at this time, but its construction
was kept very secret, and public opinion was not very favor-
able to its success. Mr. Lowell learned all he could regard-
ing the new machine, and determined to perfect it himself.
He returned to the States in 1814, and at once began his
experiments on Broad Street, Boston. His first move was
to secure the skill of Paul Moody, of Amcsbury, Mass., a
well-known mechanic. By and through the encouragement
of Mr. Nathan Appleton, a company had been organized by
Mv. Lowell and Mr. Patrick T. Jackson, with Mr. Appleton
as one of its directors, for the establishment of a cotton
manufactory, to be located in Waltham, Mass., on a water
privilege they had purchased. This factory was completed
in the autumn of 1814, and in it was placed the loom per-

THE FACTORY SYSTEM.

407

ns. The re-
;d the manu-
privileges of
enterprising
I spinning of
At the close
)ert Gallatin,
a cotton fac-
lich, when in

tit of parts for
nilation of the

had not yet
•-loom did not
3 in this coun-
812. In Eng-
ictory with the

the custom of
id Aveaving the

Id.
sited England
ctorics, for the
relative to cot-
on of improved
oom was being
ts construction
not very favor-
c could rcgard-
foct it himself.
)ucc began his
first move was
bury, Mass., a
encouragement
in organized by
Mr. Appleton
nt of a cotton
ss., on a water
was completed
I the loom per-

fected by Mr. Lowell, which differed much from the English
looms. Mr. Lowell had neither plans nor models for his
factory and looms, but in the year named the company set
up a full set of machinery for weaving and spinning, there
being 1,700 spindles; and this factory at Waltham was the
first in the world, so far as record shows, in which all the
processes involved in the manufacture of goods, from the raw
material to the finished product, were carried on in one
establishment by successive steps, mathematically consid-
ered, under one harmonious system. Mr. Francis C. Lowell,
aided by Mr. Jackson, is unquestionably entitled to the
credit of arranging this admirable system ; and it is remarka-
ble how few changes have been made in the arrangements
established by him in this factory at Waltham.

So America furnished the stone which completed the in-
dustrial arch of the factory system of manufactures.

The growth of the factory system [is well] illustrated by
the cotton manufacture. After the success of the power-
loom, the cotton manufacture took rapid strides, both in
Europe and America. The hand-loom and the hand-weaver
wore rapidly displaced. Factories sprung up on all the
streams of Yorkshire and Lancashire, in England, while in
this country the activity of the promoters of the industry
won them wealth, and won cities from barren pastures.
They erected Lowell, Lawrence, Holyoke, Fall River, and
many other thriving cities and towns, and now in this gener-
ation the industry is taking root upon the banks of Southern
streams. The progressive steps of this great trade are shown
by the tables which follow. The facts for Great Britain for
the year 1833 are taken from Baines' "History of Cotton
Manufacture," and have been corroborated as far as po8si1)le
from other sources; they constitute the most reliable data
obtainable for that period. For 1831, for the United States,
we have the census returns and other sources, none of them
very accurate, yet they give the best ajtproximate figures.

It will be observed that the number of cotton factories in
this country was 801 in 1831, 1,240 in 1840, 1,074 in 1850,
and that since 1850 there has been a constant decrease in
the number of establishments. This is the result of consoli-

r 0

;:i\ f:

408

ECONOMIC HISTORY.

dation and the establishment of large works, the smaller
factories being closed or united with the large ones.^ While
the number of factories has decreased, the consumi»tion of
cotton and the production of goods has steadily increased.
Perhaps the best gauge for the progress of the industry is to
be found in the quantity of cotton consumed per capita of
the population. In Great Britain, in 1831, the home con-
sumption of cotton per capita (excluding the proportion for
the export trade) was 6.02 pounds; in 1881 it was 7.75
pounds; in the United States, for 1830, it was 5.9 pounds;
in 1880 it was 13.91 pounds. That is, the clothing of the
people of this country in 1830 required 5.9 pounds of cotton
per annum and now it requires 13.91 pounds.

If we take the per capita consumption of the factories,
including exports and home consumption, the proportion for
Great Britain in 1831 was 16.15 pounds; in 1881, 40.8
pounds; for the United States, in 1831, it was, on this basis,
0.1 pounds; in 1880 it had risen to 14.96 pounds. The
ratios given as to spindles to persons employed, capital to
spindles, j)roduet to spindles, capital to jtroduct, product to
persons employed, while in some sense fallacious, and more
valuable to the expert than to the general reader, yet arc
true for the time given and the existing circumslances, and
certainly show the change of circumstances. The ratio of
consumption to spindles is of course influenced largely by the
number of the yarn produced, and many of the British mills
spin finer numbers than do the mills of this country; but
whatever may be the cause, the ratio stands as given, and
shows that the attendant circumstances, either of machinery
or kind of product, or of some other matter, vary as to the
two countries.

' The number of cotton factories for 1880 should be increased by the num-
ber of mills engaged in working raw cotton, waste, or cotton yarn into liosiery,
webbing, tiijH's, fancy fabrics, or mixed goods, or other fabrics which are not
sold as specific manufactures of cotton or of wool ; some of these work both
fibres, but belong more in the class of cotton manufactures than in any other.
Tliese establishments, 240 in all, in 1880, have vithout doubt been incluiled in
the list of cotton-mills heretofore ; so that now the total number, to correspond
with the past, should be 1,005 cotton factories in the United States in 1880.

, the smaller
oncs.^ While
jiisumption of
lily increased.

industry is to

per capita of
the home con-
proportion for
1 it was 7.75
as 5.9 pounds;
;lothing of the
muds of cotton
s.

the factories,
))roportion for
in 1881, 40.8
, on this basis,
pounds. The
yed, capital to
ict, product to
ious, and more
fcader, yet are
unstanoos, and
The ratio of

larjiely by the
British mills
country; but

as given, and
of machinery

vary as to the

cased by the nnni-
yarn into hosiory,
it's which art' not
if these work both
than in any other,
t been included in
hor, to correspond
States in 1880.

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H
m

M
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ei
n

■<
a

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o

g 1
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to 3

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= •5

r^B FACTORY SYSTEM.

409

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;£ CO i-* kO CO

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3 to Q

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fH IH rH ,-«

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ff> M CI ?1

CO 00 54 U5

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a^ :o

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sssss

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■w

410

ECONOMIC HISTORY.

sail
11

;i *'

n *t

THE COTTON MANUFACTURES.

Fkom Atkinson's Report on the Cotton Manufactures, Tenth
Census, Vol. II. pp. 946-955.

The cotton manufacture of the United States may be now
considered more firmly established than ever before. The
method on which the business is conducted in the United
States varies greatly from that of any other country; and
this difference arises mainly from a difference not only in
the habits and customs of the people, but also in their con-
dition and intelligence.

The home market is the most important one, and may long
continue to be so, although the export demand for our fabrics
now takes from 7 to 8 per cent of our annual product, and is
likely to increase.

In contrast with the cotton manufacturer of Great Britain,
our principal rival, we are therefore called upon to meet the
demands of an intelligent class of customers, living under
substantially uniform conditions, and varying but little in
their requirements. Hence we are not called upon for the
great variety of fabrics that must be supplied by Great
Britain. In consequence of this demand for a great variety
of fabrics the work of the cotton manufacturer of England is
much more divided than with us. With the exception of a
few large establishments, working mainly to sui)ply the home
market, few goods are known in England by the name of the
factory in which they are made, nor are they sold under the
name of the manufacturer; but to a very large extent the
yarn is spun in one establishment, woven in another, and
finished in a third. The gray cloth is sold to the ware-
houseman, or to the merchant, to be stamped and packed by
him, or to be dyed, bleached, or printed under his direction.
If English goods had been sold under the name and stamp of
the manufacturer, as cotton goods are in the United States,

THE COTTON MANUFACTURES.

411

CTURES, Tenth

perhaps the substitution of clay for cotton might not have
been carried to so great an extent. In the United States
cotton goods are spun and woven in the same factory, and
whether sold in the gray or bleached, they are almost all
stamped and marketed under the name of the factory in
which they are made. Each factory, therefore, has its repu-
tation to sustain, and whether the fabric be coarse or fine
it is the effort of every one to make it good of its kind.

The same rule applies to printed calicoes. These are
marketed under the name of the works in which they have
been i)riuted, and the reputation and permanent existence of
these works rest upon uniformity in quality, excellence in
color and style, and constant progress in the art of design.

We may not claim to be more honest than our rivals,
but it is a great error to suppose that it is permanently profit-
able to make an article that is not what it purports to be.
A cotton fabric may be of a low grade, and may be intended
to sell at a low price, but yet it is not profitable to sul)stitute
clay for cotton; the fabric, whatever it is, has its name and
reputation, and must be true to them, or else the demand for
it will sooner or later cease. Even goods that are made for
linings, and that need to be starched and stiffened in order
to be used, must have a uniform quality in the fabric itself
to hold a permanent place in our market. Dyed goods that
require to be woven on heavily-sized warps cannot, except by
rule, be loaded with sizing. If an attempt is made to intro-
duce an article in which clay has been added to make it
heavier, it is immediately detected, because the use of
sewing-machines is almost universal, and the clay in the
fabric heats the needle and exposes the fraud.

In stating those conditions under which the manufacture
of cotton is conducted in the United States for the home de-
mand, it is not intended to imply that the use of a foreign
substance to give additional weight to a cotton fabric is, of
necessity, a fraud. For instance, there is a very large de-
mand in China for materials for the grave-clothes of corpses,
and for this use " earth to earth, and dust to dust " may bo
considered a legitimate rule, even if the earth is conveyed in

¥'-'\

412

ECONOMIC HISTORY.

the fabric which is nominally made of cotton. Some of the
finest cotton fabrics yet made in the United States, which
closely resemble silk, are used mainly for lining coflins.

The principal market for our own fabrics is found among
the thrifty working-people, who constitute the great mass of
our population.

It has therefore happened that, although we have not until
recently undertaken the manufacture of very fine fabrics, the
average quality of the fabrics that we do make is better
Ihan that of any other nation, with the possible exception of
France. It is for the wants of the million that our cotton
factories arc mainly worked, and we have ceased to import
staple goods, and shall never be likely to resume their im-
port. On the other hand, we may for a long period continue
Ui u'lporf the finer goods that depend mainly on fashion and
s' • ' . their use, and that are ]mrcly articles of luxury.
^i.,-} ha,-, been stated, the substantial fabrics that constitute
the main part of our cotton manufacture, and that are used
b_ iiic masi?os of the people, are of the best of their kind,
with the possible reception of those made in France. The
French peasantry are a sagacious and truly economical race,
and will not buy a poor fabric if they can get a good one;
hence, the cotton fabrics for their use are of a very substan-
tial kind, and are much more free from adulteration than
those of any other country in Europe. The common cotton
fabrics of England, Belgium, and Germany could hardly be
sold in the United States at any price.

The finest printed calicoes of France and England may be
the best of their kind; but the printed calicoes for the use
of the multitude, and which constitute the really important
branch of this department of the manufacture, are of much
better quality in the United States than in Europe, and are
also of finer colors and of more varied styles.

In fact, one of the chief obstacles that it has been neces-
sary to overcome in the introduction of unldeached American
cotton fabrics in the English market, and in other markets
heretofore supplied by England, has been their apparently
open texture, owing to the absence of heavy sizing. In the

-^ ■.ninwiWialM

. -'f -s

THE COTTON "^MANUFACTURES.

413

ivc not imlil

United States the sizing nsed upon the warp, and which is
necessary in order to weave it, is made from corn or potato
starch, free from any substance intending to malce it heavier.
In the gray cloth the sizing, therefore, constitutes only 2^
to 5 per cent of the weight, and when the fabric is washed
it shrinks more in measure than it loses in weight; hence a
square yard washed and dried without stretching will be
heavier than a sijuaro yard taken directly from the loom.

In England, on the other hand, even the pure sizing is
made from wheat flour, which is very glutinous; and the
fabrics thus woven, even where no adulteration is intended,
lose from 10 to 12 ))cr cent of their weight on the first wash-
ing. These pure goods are, however, made chiefly for the
home consumption of the richer classes of England. The
greater part of the Engl ish cotton fabrics, exported or used
by the working-classes, arc loaded with from 10 to 40 per
cent of cl.ay and other substances. The art of sizing has
been highly perfected in England, and has been made the
subject of very numerous patents; and, as the use of clay
and flour to the extent of 100 pounds to each 100 pounds of
cotton-warp yarn involves great danger of mildew, many
ingenious chemical applications have also been patented to
serve as antiseptics, such as chloride of zinc, chloride of
calcium, comnu)n salt, white vitriol, etc. These various
antiseptics are compounded with flour, gypsum, soapstone,
china clay, and other heavy sul)stances in various ways.
The English text-books upon the art of sizing are iuhtructive
nnd suggestive, especially in respect to the rules for the pur-
chase of the most glutinous kinds of flour, and for the
detection of adulteration in flour, it being ol)vious that un-
less the flour is pure and well adapted to the purpose, it
would be necessary to use cotton instead of clay to make up
the weight of the fal)ric.

It will, of course, take a good deal of time to accustom
buyers to the more open texture of cotton fabrics in which
no clay is used; but as time passes American fabrics are
being steadily substituted for those previously used by for-
eign nations, especially in China.

5-' I

iH'ci

in ',

;- 1

414

ECONOMIC HISTORY.

Since the year 1860 the cotton manufacture of the United
States has been exposed to greater vicissitudes than any
other important branch of the national industry, and the
wonder is, not that there should have been some disasters,
but that it should have survived at all in the hands of its
original owners. In 18G0 the whole number of 8i)indle8 in
the United States was 5,235,000. From 1857 to 18G0 the
cost of constructing a spinning and weaving factory on the
medium fabrics woven of No. 25 yarn was from |16 to #20
per sjjindle (the number designates the number of skeins of
840 yards of yarn each in one pound). The value of a bale
of cotton of 480 pounds was from $40 to f 50. Then came
the combined effects of war, paper money, and scarcity of
cotton. At one period more than two thirds of the cotton
machinery of the United States was stopped; the value of
a bale of cotton rose to over 'fOOO, and the price of some
kinds of goods was seven to eight times the present price.
A little later new mills were constructed which cost from
-130 to $40 per spindle.

At the date of the census the number of spindles operated
in the specific manufacture of cotton fabrics was 10,053,435;
but the s])indle has changed in its ))roductive power, and each
spindle of 1880 was much more effective than that of 18G0.
The value of the bale of cotton was again from $40 to $50;
the standard printing-cloth, which reached 33 cents a yard
during the war, was worth 4 cents; the No. 25 mill for
spinning and weaving could be built for from $14 to $18
per spindle; our export of cotton fabrics was more in value
and much more in quantity than in 1860, and the only
check to its steady and profitable increase was the renewal
of the home demand. Such have been the changes and fluc-
tuati(ms; yet, despite them all, not one spindle in ten has
passed from the ownership of the person, firm, or corj)ora-
tion in whose possession it was in 1860, except in the regu-
lar process of bequest or voluntary sale.

During the period of inflation or of great vicissitude, the
attention of the managers of the property was of necessity
devoted to other matters than the improvements and minute

&'\,\

I f

THE COTTON MANUFACTURES.

415

if the United
lc8 than any
try, and the
mc disastcra,
I hands of its
)f spindles in
' to 18G0 the
actory on the
.m #16 to #20
r of skeins of
aluc of a bale
Then came
id scarcity of
of the cotton
the value of
price of some
present price,
ich cost from

idles operated
s 10,053,435;
wor, and each

that of 1800.
m #40 to #50 ;

cents a yard

25 mill for
a #14 to #18
more in value
and the only
s the renewal
nges and fluc-

c in ten has
11, or corpora-
)t in the rcgu-

cissitude, the
of necessity
ts and minute

savings in which the profit of the business now consists; hut
during the last few years very great improvements have been
made, and the lesson of economy and saving has been
learned. The best example that can be cited may be found
in the record of one great factory working upon coarse and
substantial fabrics, and consuming more than 20,000 bales
of cotton a year. Sixty per cent of its products are sold for
export to various parts of the world. The proportion of
operatives to each 1,000 spindles has been decreased 43 per
cent, or from 26 J to 15. The wages of women, who consti-
tute more than two thirds of the operatives, have been in-
creased 33 per cent. The cost of making the cloth, aside
from the material used, has been decreased 21 per cent.

In 1860 the average product of one operative, working
one year was 5,317 pounds; in 1880, 7,928 pounds of drill,
such as is exported to China. Assuming 5 pounds, or about
16 yards, as the annual requirement of a Chinaman for
dress, in 1860 one Lowell operative working one year clothed
1,063 Chinese; in 1880 one could sujiply 1,586. It will be
obvious that no hand spinning and weaving can compete
with this product of machinery; yet the machine-made
fabrics of Europe and America combined have as yet reached
only six or eight in a hundred of the Chinese. How soon, the
rest will be clothed in cotton fabrics made by machinery from
American cotton, therefore, depends but little on whether
the wages of the Lowell factory girl be #4 or #6 [)er week,
but rather on what exchangeable products the Chinese can
produce better or cheaper than we can. The more tea, silk,
sugar, and other commodities we buy from them, the more
cotton fabrics and other products in which we excel will they
buy from us.

It has been held that the cotton of America must Ije more
and more used both in America and elsewhere, and that, as
time goes on, almost every other kind, with the exception of
the cotton of Egypt, must give place to it. To Avhat extent
may the same pre-eminence be secured for the cotton fabrics
of the United States in the markets of the world that we
have secured in respect to the cotton fibre ?

IK
It

VJ 'ri

fl- '

f i

i ,

ffc' ''

f . t *

UKfK'.ifi

^Hunii

11::

416

ECONOMIC HISTORY.

In the consideration of this brunch of the subject, our
attention nuist be given to the present condition of competi-
tion between the mills of the Middle and Eastern States with
the mills of Great Britain.

In respect to the Eastern States the cotton factories of
Lowell in Massachusetts, Manchester in New Ilanipshire, JJid-
dei'ord and Lewistun in Maine, may be considered in their re-
lation to the factories of Manchester, Stockport, Preston, and
Bolton in Enj^land. For the purposes of this comparison it
may be assumed that there can be no permanent advantaj^c of
one set of mills over the other in respect to the (piality and
perfection of the machinery. At any pfiven time some ad-
vantage may be claimed and admitted on either side in sorao
special department of the mill; but every invention or im-
provement will sooner or later be adopted on both sides, and
the supremacy in the art of converting cott(m into cloth nnist
ultimately fall to that country or section which ))ossesses the
advantage in resi)ect to the conditions ofl'ered to the oper-
atives, and in j)roximity to the source of the raw material.

The best conditions of life for the ojuM-atives, and the best
prospects of imi)roving their condition and that of their
children, are of the gravest importance. The factors in this
problem are education, shelter, subsistence, and opportunity
for other kinds of Avork. In respect to education, the
common-school system of the United States assures a thor-
ough training free of cost, and in the principal towns and
cities free education is carried to the point of preparing the
pupil to enter a university.

In respect to subsistence, the factories of New England
are 3,000 miles nearer the wheat-fields and gra/ing-grounds
of the West than those of Lancashire; and so long as Europe
buys food of America our own mills must have the advantage
of proximity to the Western prairies. In respect to the
rents of dwelling-houses there cannot long be any difference,
if there is any at present, because the materials for construc-
tion are most abundant in America. Ojiportunity for other
work than that of the factory must continue for many gen-
erations, and until this continent is peopled.

THE COTTON MANUFACTURES.

417

subject, our
1 of compoti-
1 States with

factories of
upshiiv, Hid-
1 ill their re-
I'reston, and
oinparison it
advantage of
L^ (piality and
me some ad-
side in some
ention or im-
th sides, and
to eh)th must
possesses the
to the oper-
nv niateriah
and the best
hat t)f their
actors in this
1 ojjportunity
neat ion, the
,suros a thor-
al towns and
)reparin}? tlie

sVw England
zinu-grounds
ng as Europe
he advantage
spect to the
ly difference,
for construc-
lity for other
or many gen-

Tn comparing our power to compete willi Eiighind we may
chiim advantages of one kind, and in comparing witli the
nations of continental Europe we may claim advantages of
another kind, in some res[(ccts of a different order. In
eompetition with England, it is often claimed that our chief
advantage lies in a certain alleged versatility and power of
adapting nutans to ends, and in great (piickness of perception
on the part of working-people in respect to the advantages
to be gained by the adoption of new processes or inventions,
if wc have this advantage, there nniat be special causes for
it in the inlluences that are brought to bear upon th(> opera-
tives and artisans who do the work; for a very large propor-
tion of them are foreign-born, or are the children of foreign
immigrants. Why should they work with any more zeal or
judgment here than in the countries whence they have come ?
Why are Irish aiul French-Canadian factory hands to be re-
lied on for more steady work, larger j)roduct, lietter disci-
pline, and more cleanly and wholesome conditiims of life
than the operatives of England, Belgium, and Germany ?
To me it appears evident that these advantages, so far as they
exist, are due mainly to the following circumstances: —

Firfif. Our system of common and purely secular schools,
attendetl by the children of rich and poor alike.

Second. Manhood suffrage.

T/iii'd. The easy ac([uisition of land.

Fourth. The habit of saving small sums induced by the
establishment of savings-banks throughout the manufacturing
States.

Fifth. The absence of a standing army, and the apjdica-
ti(m of the revenue derived from taxes on the whole to us(>ful
jiurposes.

In respect to the first of these influences, the pul)lic-school
system, the foreign oliserver generally takes notice only of
the quality of the instruction given, and though he may find
something to praise, he finds also much to blame. He finds
ill many cases the instruction bad and the subjects often ill-
chos(>n, and he wonders at the misdirection of a force that
might be so much more wisely applied. What he fails to

418

ECONOMIC HI STORY.

r. t

1 ■

I I-
I'

I I

notice is that the school itHolf, entinjly aimrt from its instruc-
tion, is the groat ('(iucator of tho childron who attend it.
The school is, first of all, no respecter of persons; the stupid
son of a rich man, led in every class hy the son of a me-
chanic, cannot in after-life look down on him as an inferior,
whatever tho conventional position of tho two may lu!; or, if
the rich man's son has hrains as well as fortune, th ">r
man's son can never attribute to fortune only the lei at
ho may take in after-life. The school is thonnighly demo-
cratic, and each jmpil learns in it that it depends on himself
alone what jjlace he may take in after-life, and that, al-
though society may be divided into pianos, there is no
system of caste and no barrier in the way of social sucooss
exeejjt the want of character and ability tb attain it. The
associations of the common school utterly prevent anything
like servility in the relation of classes in after-life; and
although it is sometimes made a little too manifest that
"one man is as good as another, and a little better," on the
part of those who are more eager than discreet in their effort
to rise, yet on the whole the relation of tho various classes,
which must in the nature of things always and over- ore
exist, is that of mutual respect, and anything like 1-

world distinctions of caste and rank would seem aboui as
absurd to one as to tho other. The common school is the
solvent of race, creed, nationality, and condition.

In another way the discipline of the school affects the pro-
cesses of manufacture. In the schools, cleanliness, order,
and regular habits are enforced, with deference to the
teachers and respect for authority; and in these later years,
this is coupled with the teaching of music and drawing in
all the principal towns and cities. When children thus
trained are removed to the mill or the workshop, habits of
order and cleanliness, with some ajsthetio taste, are already
established. Nothing strikes an American manufacturer
with so much surprise, as the extreme untidiness of the
large textile mills of England and the dreariness of the fac-
tory towns. In this respect, however, it must be confessed
that the managers of the New England mills are greatly

11 I

THE COTTON MAXUFACTUIIES.

419

iiidcil by tho absence of smoke, the coal commonly used
being antliracito. Much surprise is often expressed by our
foreign visitors, at the amount of decoration permitted in
tlie fitting of stationary and locomotive engines and in nnieh
of our machinery; but, bad as the taste displayed may some-
times be, it is nevertheless a fact that such engines or
macdiines arc better cared for and kej)t in better repair than
where no individuality, so to speak, is permitted. On one
of our great railways the attempt was not long since made
to dispatch the locomotives as they hapjjened to arrive at the
central station, sometimes with one and sometimes with an-
other engine-driver; but the immediate and great increase
in tlu! repair account caused tho corporation to return very
soon to the customary plan of giving each driver a particu-
lar locomotive, with which he may be identified.

Tho Instruction of tho school also gives every pupil a
superficial knowledge, if no more, of the geography and re-
sources of tho country, which the universal habit of reading
newspapers keeps up. Hence comes fb' almost entire ab-
sence of anv fixed character in the labor of the country;
every boy believes that he can achieve success somewhere
else, if not at home. No congestion of labor can last long.
The war and the succeeding railway mania combined con-
centrated population at certain ))uints to a greater extent
than ever happened before, and it has taken more than five
years to overcome the difficulty; but within these five years
a million or more new inhabitants in Texas, half a million
or more in Kansas, and probably tw^o or three millions
added to the population of Nebraska, Colorado, Minnesota,
and the far Northwest, indicate that the evil has already
found a remedy.

It is already apparent that a very slight increase in the
demand for skilled woi-kmen in certain branches of employ-
ment would not easily be m(>t in tlie Eastern States except
by drawing upon England and Germany. During the years
of depression, the cessation of railway building and the use
of the excess of railway plant existing in 1873 has caused
the dispersion of a large portion of the trained mechanics

420

ECONOMIC HISTORY.

I Si-;

i|i.

aiul artisans who then did the work of supplying this de-
mand ; but these are not the men who have crowded the East-
ei'u cities and eaused the api)arent excess of Uiborers out of
work. Such men have gone back to the land, or in the new
States and Territories have found other ways in wliich (o
apply their sldll and energy, and they will not return. It
may be that the greatest danger to the manufacturers of
Kughmd will not 1)C in our competition in the sale of goods
in neutral markets, l)ut in our competition for the skilled
workmen and artisans who make these goods, when we offer
tliem eijual or higher wages and better comlitions of life in
the work that will very soon need to l)e done to supply the
increasing demand in our own country.

The patent system may here be cited also as a factor in
our industrial system. It has been carried to an almost ab-
surd extreme, so that it is not safe for any one to adopt a
new method, machine, or j)art of a machine, and attempt to
use it quietly and without taking out a paient, lest some sharp
person, seeing it in use and not ))ublished, shall himself
secure a patent and come back to the real inventor with a
claim for royalty.

Manhood suffrage, subject as it is to gi'cat abuses, and
didicult as it has made the problem of the self-government of
great cities, where voters do not meet each other, as in the
town-meeting, face to face, l>ut where the powers of govern-
ment are of necessity delegated to men of whom the voters
can have little personal knowledge, yet works distinctly in
the direction of the safety, stai)ility, and order of the com-
munity. Outside of two or three of the very largest cities,
where there are concentrated great masses of illiterate citi-
zens, it would be dillicult to find a case of serious abuse of
till' power of taxation except in the South since the war, and
ev.Mi there the evil is now mainly abated.

The easy ac(piisition of land throughout the country under
simple forms of conveyance, registered in every county, gives
a motive to economy, and induces habits of saving that are
of supreme importance in their ellVct on society. In the
town in which I live, — and in wliich I can remember the

THE COTTON MANUFACTURES.

421

ing this ilo-
dcd the East-
borors out of
31' hi the new

in which Id
,t return. It
ufactiircrs of

sale of goods
)!• the sldUed
wlien wc offer
ions of life in
to sui)i»ly the

as a factor iu
an almost ah-
uue to adopt a
md attempt to
I'st some sharp
shall himself
nventor with a

at abuses, and
■overument of
ther, as in the
crs of govcrn-
lom the voters
s distinctly in
cr of the; corn-
largest cities,
illiterate citi-
rious abusi! of
c the war, and

? country imder

ry county, gives

saving that are

ociety. In the

remember the

CDming of the first Irishman who became a land-owner, — out
of about one thousand owners of real estate, over two hun-
dred are of Irish birth or extraction. The richest one among
them came from Ireland in 184G, a steerage jtassenger. lie
now i)ay8 taxes on ])roperty of the value of •'r'5U,0U0, almost
all in real estate. His son is superintendent of the rej)airs
of highways, and is one of the most elHcient members of the
school committee.

During the last thirty years the factory population of New
England has ])assed through three phases. First came the
s(»ns and daugliters of the New England farmer; but as the
sewing-machine and other inventions opened new demands
for women's work, women of American lurth passed out to
easier or better-paid employment, while the men took up
other branches requiring more individual skill. These
})laces were taken mainly by Irish, with a few Germans anu
English. But as the Irish saved their earnings, and as the
New England yeomen emigrated to the richer lands of the
great West, they ]»assed out of the mills to buy up the de-
serted farms of the ))0(u-cr Northeastern .States, wliero, by
their persistent industry and manual labor, they aehieve(l
success, and gained a position which satisfied them, l)ut
with which the native New Englander is no longer contented.
Their places in the mills are now being more and more taken
l»y the French Canadians, who, in their new conditions and
surroundings, show little of the stolid and uu])rogrossive
character which has kcjit them so long contented on their
little strips of land on the Saint Lawrence River. In the
very air they breathe they seem to imliibe a new and restless
energy, while the intelligence shown by their children in
the schools augurs Avell for their future progress. On the
whole the simplicity of our system of land tenure, and the
ease with which small parcels may be ol)tained, nuist be
rated among the most important factors in considering our
jiossible advantage over other countries.

Next in our list comes the savings-liank. In IST"), out of
the 1,052,000 inhabitants of Massachusetts, 720,000 were
depositors in savings-banks to the amount of !^238,000,000.

irt

siV

.. I \.

^Ss

422

ECONOMIC HISTORY.

During the late years of depression the deposit has decreased
somewhat in amount, but the decrease has been chiefly owint^
to the withdrawal of money for other investment, especially
in United States bonds. There have been some failures of
banks and some losses, as might well have been ex))ected,
but they have been less than in any other branch of business ;
and the savings-bank system stands firmly based on well-
earned confidence, and offers an easy means of saving the
smallest sums to every man, woman, and child in the State.
At the present time the deposits in the savings-banks of
Massachusetts amount to about !fti240,000,000, owned by
about 750,000 persons.

To these causes of quick adaptation to any conditions that
may arise, or to any necessity for the application of new
methods or devices, may be added the custom, which has
almost the force of law, of an equal distributi(m of estates
among the children of the testator, l^ools to him who can
use them is the unwritten law; and neither land nor capital
can remain long in the j)ossession of him who cannot direct
or use them wisely. Liberty to distribute is esteemed as
important a factor in our Itody-politic as liberty to accumu-
late, even though the libiM-ty may sometimes lead to the
apparent waste of great fortunes.

Finally, it must be held that our freedcmi from the blood-
tax of a standing army, and the fact that the proceeds of
taxation are, on the whole, usefully and ])roductively ex-
pended, arc among our greatest advantages ; and this is
asserted with conlidence, notwithstanding the misgovern-
ment of some great cities and of several of the Southern
States. What arc these failures but proofs of the general
• 'onlidence of the people in local self-government? Great
frauds and great abuses can only hap})en where integrity is
the common rule; and where each nian distrusts his neigh-
bor, or each town, city, or State, distrusts the next, the
opportunity for fraud or breach of trust cannot occur. The
use of inconvertible paper money during many years has not
been without its necessary malign result npcm the character
of the people, and the newspapers arc filled with the fraud

^??1r

THE COTTON MANUFACTURES.

423

i lead to the

and corrnption that have come to light; but no newspaper
has ever yet recorded one fact that offsets many frauds. In
the great Boston fire, one of the Boston banks lost not only
every book of account but every security and note that was
in its vaults, amounting to over 11,250,000. On the morn-
ing after the fire its officers had no evidence or record by
which any of the persons or corporators who owed it money
could be held to their contracts; yet within a very short
time, duplicate notes were voluntarily brought in by its
debtors, many of whom knew not whether they could ever
pay them because the fire had destroyed their own property,
and the known ultimate loss of that bank from the burning
of its books and securities was less than 'j!lO,000.

Our army is but a border police. Although its officers are
held in honor and esteem, military life is not a career that
very many seek, and as time goes on it will become an occu-
l)ation less and less to be desired. Thus we arc spared not
only tl tax for its support, but the worse tax of the with-
drawal of its members from useful and productive pursuits.
It is in this respect that we claim our greatest advantage
over the nations of continental Europe. What have we to
fear from the competition of Germany if we really luidcrtakc
to beat her in the neutral markets, which we can reach as
readily as she can ? For a little while, the better instruction
of the merchants in her technical and commercial schools
may give her advantage ; but that can be overcome in a single
generation, or as soon as the need is felt with us, as it is
now l)eginning to be felt. After we shall have su])plicd our
present want of technical educaticm, the mere diff'erence be-
tween the i)rcsence of a great army on her soil and its neces-
sary support, and the absence of such a tax cm us, will
constitute the difference on which modern commerce turns.
Wlien traffic of the world turns on half a cent a yard, a cent
a bushel, or a half-penny a ])ound cm the great staples, no
nation can long succeed in holding a traffic that is handi-
capped with a standing army. The ]»rotection of Germany
from our competition in neutral markets may be offset in
our yet more dangerous competition for men. The German

If.

II. i ■ .

i- h

424

ECONOMIC HISTORY.

already knows Texas, and in the one l)lock of 60,000 square
miles of land by which the State of Texas exceeds the area
of the German empire, we offer room and healthy conditions
of life for millions of immigrants; and if they come in sutti-
cient numbers, they can raise on that single square of land
as much cotton as is now raised in the whole South, that is
to say, 5,000,000 bales; and as much wheat as is now raised
in the whole North, that is to say, 400,000,000 buslu'ls, and
yet subsist themselves beside on what is left of this little
patch that will not be needed for these two crops.

It will be obvious that even the least imaginative cannot
but be moved l)y the intiuences that have been designated,
and that versatility and readiness to adopt every laltor-saving
device will not only be i)roniotcd, but will be aI)Solutcly
forced into action, when such vast areas arc to be occupied,
and when even the dullest boy is educated in the belief that
he also is to be one of those who are to build uj) this nation
to the full measure of its high calling. We may not dare
to l)oast, in view of all we have passed through ; but we know
that slavery has been destroyed, and that the nation lives
stronger, truer, and more vigorous than ever before. We
know that it has Iteen reserved for a democratic re])iiblic to
be the first among nations that, having issued govci'nuicnt
notes and made them a legal tender, has resumed jjayment
in coin without repudiation or reduction of the promise.
We know that wo have }»aid nearly a half of our great na-
tional debt already, and that the rest is now mainly held l)y
our own citizens. We believe that within the lives of men
of middle age now living, the nation will number one hun-
dred millions, and that, in whatever else we may be found
wanting, we cannot long be kept back in our career of mate-
rial prosp(>rity, which shall be shared with absolute certiiinty
by every one who brings to the work health, integrity, and
energy.

If there is any force in this reasoning, our competition
with other manufacturing couutries, in the supplying of neu-
tral mark(!ts with manufactured goods, will not be compassed
by the low rates of wages paid to our factory operatives or to

?.rv ^

THE COTTON MANUFACTURES.

425

the working-people engaged in our metal works and other
occupations, but first by obtaining and keeping such an ad-
vanced ]»()sition in the application and use of improved tools
and machinery as shall make high wages consistent with a
low cost of i)roduction; secondly, by our ability to obtain the
raw materials at low cost. Every emi)loycr knows that
among (Mnploy<^s who arc paid by the piece, it is the opera-
tive that gains the largest earnings whose ]>roduction costs
tlic least, because under the control of such operatives the
machinery is most elTcctively guided during working hours.
As it is with single ojjcratives, so it is with large masses; if
well instructeil and working under the incentives to industry
and frugality that have been named, their large product will
cam for them ample wages, and yet result in a low cost of
labor to the employer. Such workmen never have any "• blue
Jlonday. " The workman who in this country iuil)itually i)e-
conies intoxicated is soon discharged, and his place is lilled
by one who resj)ects himself and values his place too much
to risk his position in dissipation.

Competition with England in sup])lying the markets of
Asia, Africa, and South America with cott<m goods, is now
perhai)S the best criterion by which to gauge our ability to
compete in othei- branches of manufacture. It has been
often assumed in England that the increasing shipments of
cotton goods from this country have been forced Ijy necessity,
and merely consisted of lots sold below cost, as a means of
obtaining ready money; but there is no ground whatever for
this general assumi)tion, even though some small shipments
may have been made at first with this view. Our export of
cotton fabrics amounts as yet to but 7 or 8 per cent of our
]>ro(luction, and is but a ti-itle compared to that of Clreat
Ih'itaiu; but it is not made at a loss, audit constitutes a
most important element in the returning j)rosperity of our
cotton-mills. The goods exported are mostly made by strong
and prosperous corporations, paying regular dividends, and
consist mainly of coarse sheetings and drills, which are sold
by the manufacturers to merchants, who seiul them to China,
Africa, and South America in payment for tea, silk, ivory,

426

ECONOMIC HISTORY.

III'

I J

I I

sugar, gums, hides, and wool. They are not made by oper-
atives who earn less than the recent or present rates of wages
in England, but in most dei»artments of the mills by those
who earn equal wages, or even more. This competition had
been fairly begun before tlie late war in this country, but it is
now continued under better conditions. The mills of New
England, owing to through connections by rail, are now
relatively much nearer the cotton-lields than they were then.
Prior to 18G0 substantially all the cotton went to the sea-
ports of the cotton States, and from there the cost of moving
it to the North or to Liverj)ool varied but little ; but at the
present day a large and annually increasing portion of the
cotton used in the North is bought in the interior markets,
and is carried in covered cars directly to the mills, where
the bales are delivered clean, and much more free from
damage and waste than those Avhich arc carried down the
Southern rivers on boats and barges dumped np(m the
wharves, and then compressed to the utmost for shipment
by sea.

In j)roof that this advantage is an actual one, the following
example may be cited : A contract has just been made for the
transportation of a large quantity of cotton from Texas to
Liverpool at the rate of -fl.lO per 100 pounds, the ))roportion
assigned to the land carriage being 70 cents, to transship-
ment in Boston and to the steamship 40 cents; the rate of
marine insurance is three eighths of 1 per cent, and the cost
of handling in Liverpool and transportation to IManchester,
not less than a quarter of a cent per ])ound. Bargains may
be made to bring cotton from the same point in Texas to the
principal factory cities of New England at the rate assigned
to the land carriage, namely, 70 cents per 100 pounds. This
cotton is brought from the interior towns of Texas to Boston
and cannot be carried to Liverpool by way of Galveston or
New Orleans so chea])ly, else it would not come this way.
Assuming the bale to weigh 500 pounds, at 10 cents a pound,
wc have the following comparative cost: —

THE COTTON MANUFACTURES.

427

LOWELL.

Per Bale. Per Cwt

Cost of cotton ill Texas, TjOO pounds, at 10
cents, including all local charges . . . 850 00

Freight to Lowell in a covered locked car in
which the cotton is protected from rain,
mud, and otlier causes of waste, at 70
cents per 100 pounds 3 50

Total $53 50 $10 70

LANCASHIlU:.

500 pounds, at 10 cents, including all local

charfijes $50 00

Freigiit from Texas to Liverpool, at $1.10

per 100 pounds 5 50

Lisurance at three eighths of one per cent on

!»!5(> 21

Transshipment in Liverpool, and freight to

Lancashire, one fourth of a cent ... 1 25

Total $56 96 11 39

Advantage of Lowell over Lancasliire . . $3 40 30 69

There may bo changes in the rates, but it does not seem
lirobablc that the relation of the land to the ocean late can
l»e much changed, and it wotdd therefore aj)pear tliat the
New England manui'aeturer will have a permanent advantage
in the price of American cotton of any given grade, varying
from (3 to 8 per cent as the price of cotton may vary from
12 to 9 cents per pound; and this advantage may be equal to
15 or 25 per cent in ability to pay wages, as the cost of lal)or
varies from a rpiarter to a third in the total cost of coarse
and medium goods, such as constitute the chief part of the
demand of the world.

It may be said that this proves too much, and that the
cotton spinners of the Southern States will have the same
relative advantage over New England. Let this be freely
admitted. We are treating the <|uestion of the future
supremacy of the United States in the manufacture as well
us in the growth of cotton, and if the future changes in

428

ECONOMIC HISTORY.

I i

'•'!i*

Iff

t (

jiopnlation, wcaltli, and condition of the different sections of
this country sliall, in the future, cause the increase of sjiin-
dh's especially in coarse fabrics, to be jihinted in the heaKliy
hill country of northern fJeorgia, eastern Tennessee, and the
Carolinas, it will simply be the greater evidence that natural
laws are paramount. If Georgia has twice the advantage
over Lancashire that New England now jiossesses it will
only be the fault of the people of Georgia if they do not
reap the benelit of it,

]t has been stated that our present rates of wages in our
cotton factories are higher than they were in 18(10, and with
our increasing prosperity they will tend to advance ; but at
the same time the cost of the labor in the finished fabric has
been reduced hij the ureater produetive power of the maehinery.
The fabrics npon which by far the lai'gest i)art of the spin-
dles and looms of the country are operated may be divided
substantially into the following classes: —

1. Till' printing-clotli, 28 indios wide iiiid 7 yards to the jxmud.
Tlit'coat of mill lulxu" in making tills fabric, iiu'buliiig tlic salaries,
wages, or oarnings of every one t-mployed, is now less than one
cent, or a lialf-ixMiiiy, a yard.

'2. Tlio heavy slu'cting, 3(5 inclics wide and tlio heavy drill, 30
iiK-lies wide, each wcigliing fniin 2;] to 3 yards to the pound. The
cost of mill lalior in making these fabrics is about 1| cents per
yard.

3. Shirtings and sheetings, 30 to 30 inches wide, Nos. 20 to 30
yarns, each weigliing from 3 to 4 yards to tlie ixniiid. The cost of
mill lal)or in these goods is from 11 to 2 cents per yard.

4. The fine sheeting or shirting, from 30 to 40 inches wide,
Nos. 30 to 40 yarns, weighing from 3 to 4 yards to the jxniiid.
The cost of mill labor in these goods is from 1^ to 3 cents per
yard.

r>. Fabrics of a similar kind to the above, from 1 to 3 yards
wide.

C. Heavy cotton duck, cotton grain-bags, cotton hose, and other
special articles.

7. IJliie denims, stripes, tickings, brown denims and duck, and
other heavy colored goods, substantial ginghams, cottonades, and
other fancy woven fabrics of medium or heavy weight.

THE COTTON MANUFACTURES.

420

These seven classes coinpi'ise more than 9') per cent of our
(!()tton fabrics in weight; to them are to l)e added hiwns,
woven fabric of liuht weight for dresses, and spool-cotton.

In respect of one half of these fabrics, beinji,' those of the
heavier <!;rade, our proximity to the cotton-lield, computed at
not less than half a cent per pound, oftener three (puirters
will enable the X(!W JMisiland manufacturer to pay from 15 to
•JO per cent higher wa,ii,es and yet to make the goods, other
things being equal, at the same cost as his competitor in
liancashire. On a large portion of the other kinds this ad-
vantage in the cost of cotton would be from lU to lo per
cent.

The natural advantages cannot work immediate results;
the ways and means of a great commerce cannot be impro-
vised in a year, hardly in a generation. Much depends on
the Avisdom of our legislators in framing the acts under
which our taxes are collected, whether customs or excise,
and yet more upon our adherence to a sju'cic l)asis in our
currency; but in the long run the only reason why we shall
not assume a constantly increasing share in the cotton manu-
facture of the world will be the free choice that our country
offers for other occupations of a more profitable or more
desiral)le kind.

Reference has l)een made to the small proportion of fine
spinning in the United States. Within the last few years
great ))rogres3 has been made in spinning and weaving
fabrics of Xos. GO to 100, such as lawns and line dress goods,
and also in spinning line yarn for spool-cotton. In the latter
direction yarns as line as No. liiO are now spun on the ring
spinning-frame, a machine invented in this country and
more used than any other for warp spinning, and now ])eing
adojjted in Euro]>e. Yai'us as line as ooO are spim on nmh-s
lor three-cord sewing-cotton, and for ex|teriment much limn"
ounts have been readied. It has often l)(>en alleged that
line yarns could not be as well spun in the United States as
in England, owing to tlie dry and electrical conditions of the
atmosphere din-ing a consideraltle part of the year. This
ditliculty has existed in some degree, although not so as to

430

ECONOMIC HISTORY.

1 4 ■;' •* I ' ,

li^^

i(>.,..

I-

preclude fine work if it lind l»ccn profitfil)lc to tindortakc it;
Ijut as far as tliis diniciilty (.'xisted it lias lately Iioom entirely
reiiKJVCMl l)y the invention of a very simple and inexpensive
apparatus for nioisteninji^ the air with the (inest spray of jinre
cold water, by which method the air of a spinninjjj or weav-
in;j;-room may be kept at any desired detiree of humidity in
the driest day, so that the adverse effect of electricity is
entirely overcome.

Whenever the condition and extension of our market will
war'-ant the undertakin<r, there is now no obstacle to our
manufacturing any variety of cotton fabric that is in de-
manil, either coarse or linr.

While it may not be worth while to pivc historical statistics
in relation to the cotton manufacture of this country in the
present report, a few words may well be devoted to chaufres
in the work, which have conduced not only to the welfare of
the people, but to the welfare of the operatives also.

When the cotton manufacture was first established in the
United States water-jiower was considered essential to the
work, and, as a rule, the location of mills was limited to
narrow valleys, or places where there was room only for
mills of several stories in height. The first mills liuilt were
very considerable structures for their time, but they were
low-studded, badly lighted, and were heated by stoves; and
in these mills the operatives were compelled to work under
arduous conditions (owing to the imperfection of the machin-
ery) thirteen to fourteen hours a day. These narrow struc-
tures were in some ])laces built seven stories in height. All
the jilans were made with reference to this form of structure,
whether the mill was to be operated by water-power or l>y
steam, until (piite a recent period. In 18U0 the "normal"
cotton-mill (so to speak) hiul become a factory four or five
stories high, aliout 00 feet wide, varying in length according
to the amount of machinery, high-studded, well lighted,
thoroughly well ventilated, and heated by radiation from
8team-))ipeg.

In 18(50 the mnfliino for sizing yarn, known as the
"slasher" was first imported, displacing the machine known

THE COTTON MANUFACTURES.

431

ndcrtakc it :
iron eutiri'ly

inex[H'n«iv('
ipray of i>iiro
hi<;!; or woav-

Imiuiility in
electricity ia

r marl<ot will
staclc to our
lat is ill il*'-

rical statistics
country in the
oil to chantrca
the woUarc of
vos also,
iblirtlioil ill the
iscntial to the

as limited to
room oiily for
liUs l>nilt were
but they were
)y stoves; and

to work luuler

of the niaehin-
0 narrow struc-
iu height. AH
m of structure,
or-power or by
) the " nornuil "
ory four ov five
LMiLrth according
well liiihtcd,

radiation from

known as the
machine known

as the "dresser." In the use of the shislier ono man and a
hoy working in a thoroughly well-ventilated I'ooni, at a
moderate degree of heat, took the jtlaeo of seven or eight
men who had l)een previously eniployed in the .same work in
!i room which was of necessity kept at over 100'^ F., the at-
mosphere saturated with sotw starch. Tliis change removed
the only really objectionable kind of woi'k from the cottcm
factory, in the earlier mills the apparatus for the removal
of dust from the factory was very imperfect, but to-day every
room oven including those in which tlie cotton is 0])ened, is
sul)stantially free from dust; and it happens that the degree
of heat and of Innnidity recpiirod for the best work of the
cotton factory is ono which conduces in great measure to the
health of the operative, perhaps a little warmer than may be
desirable.

At the present time another change is in progress. Tlie
use of water-power is becoming less, its developnu'nt for the
purpose of sale having never proved prolitalde. The power
thus develoj)ed has boon a valuable auxiliary in the working
of the factory, but as a nuitter of investment the develo])nu'nt
of land and water-power together have almost without cx-
cejition failed to be profitable.

The great progress in the constructiim of the steam-engine
and in the econ(miy of fucd is steadily working towards a
change to steam as the principal motive-power for the cotton
factory. An Incidental advantage in this change is that the
factory may be placed nearer to the principal markets, where
it can be more conveniently supervised and more easily
reached. The use of st(Muu also renders a choice of location
perfectly fi'asil)le; and the modol factory, one or two stories
high, may be placed upon a level plain, and can b(! more
easily lighted and ventilated and mon' economically operated
than when any othei- form of biiildiiur is used, Uiuler these
new conditions, better dwelling's for the operativt^s, less
crowded, can also bo provided, and in every respect the work
can be conducted under better conditions.

At the present time the hours of laltor in New England,
Avliere most of the cotton manufacturing is done, vary from

. m-

■

p™^i'

m':f' 1*

B'*'

■ > '

n'' ,

i'' ' ■

if' . i

ii '

m )

432

ECONOMIC HISTORY.

ten ti) clcvpn hours \n'V diiy. Tliirt jfrcal clianfjfo lias hccn
hroii^lit iil)()ut by ii {iiadual ('()in|in'licnsi(»ii (tf the licHt con-
ditioiitf both for \\w hiboror and lor tlic capitaliHt, and witli-
out niiK'li rct^ard to IcLvislaiion. It i« iirultaldc lliat ere lon<r
ten hours will l)o tlu; limit of fat-toi-y work throniihoiil New
Knj;land, citiior by process of If^'islalion or through tiic
conviction on Ihr part of ciMploycrs that any lonjrcr hours
arc not prolitablc, — a conclusion to which niiiuy have al-
ready come.

A <rreat chanire has also in the progress of time been
effected in the dwellings in which the factory operatives
live, in part tending towai'ds liettei- conditions, in part to
worse conditions. On the wlnde there has Im'cu less average
[>rogress in this directinu than in the construction and opera-
tion of the mills themselves. Th(! elujice of position, how-
ever, wliich is now given by the greater use (jf steam, gives
better opportunities for scattering the dwelling-houses over
a wider area at little cost.

A more al)imdant supply and choice of food has been
effected in this as in all other l)ranches of work, to the great
benefit of the operatives, by the consolidation and more
effective service of railroads. Tiie average work of a male
operative over sixteen years of age in a tex.ile fact(uy will
earn enough in a day to pay for the transportation of meat
and lu'cad for one year, one thousand miles, or from Chi-
cago to Lowell, Lawrence, or Fall River. So far as cost is
concerned, the grea4; fields of the West and the factoiies of
the East arc in closer ])roxlmity than if the factory depended
for its food upon its own immediate neiuhboihood, when
served only by wagon-roads. The same changes which have
Si) greatly reduced the railway charges between East and
West are now taking ])lace between North and South. The
charge for moving cotton is becimung less year 1
it will soon matter little where the cottni fm'
so far as distance between the field :
cerned. The choice may be made so a seem.
lus of a moderately cold climate, in wi li in-d'
more to be desired than out-door, in which th humidity of

M I,

I.-
St .11-

abor is

Till:: COTTON MANUFACTURES.

433

,' St

Il-

n-.l

r liihor

tl.

Imiuitlity

the atiiioHplu'rc is inciirtural)ly unifonn or is not subject to
extremes, uiitl wliero facilities for repairs on niachiiiery are
close at hand, and the iio|»iilation is siidieienlly dense to
assure an adiMjiiate and constant supply ol operatives, — ■mills
wiiieh are nnicli isolated always woriiin^ at a disadvantai^e.

(Jreat changes of a lu'nelicial kind can now be foroHoen in
the application of electricity to the liLditim? of the factory.
The (levi'Io]iiiieiits in this direction are also such, that, what-
ever the relative cost of the electric liiJiht as compared (o j^as
may lie, it is yet so lienelicial in other respects, that no fac-
tory manauer can well afford to dispense with it, not only
because of the more perfect work which its use assures, but
becausi! th(^ choic(» of the operative in selectinu; the place in
which to work will render the use of the electric light almost
a nuitter of necessity.

In eon(dusion, it may bo said tlnit the progress in the art
of manufacturing cotton fal)rics in the last forty years has
been very great, distinctly sustaining the rule which affects
all the arts to which modern machinery can be applied,
namely, that, in i»roi)ortion to the effectiveness of capital in
the form of machinery and the freedom with which it may
l)e applied, the cost of production is lessened and the con-
sumer is served more cheaply; while, on the other hand, tho
wages of the operatives arc increaseil, the conditions of work
made better, and the identity of interests between labor and
capital are established.

It may be said that in the absence of any artificial obstruc-
tions to trailic between ."^tates or nations, the truest guide to
the place where the lowest cost of production is couipassed
may be found by ascertaining where the wages of labor are
the highest, and tho conditions of life the best; that at that
point the lowest cost of ])roduction must be found for this
reas(m : both wages and profits are derived from the sale of
the thing produccfl ; heiu;e it follows that where the natural
conditions of production arc best, the machinery most ef-
fective, and the labor tho most intelligent and skilful, the
product will be largest at the least etfort to those who do the
work, and when the division of this product is made under

Mi'.."

}*"

I ''

r ■ It ;

484

ECONOMIC HISTORY.

the conditions of absolutely free competition, the relative
proportion which capital can secure to itself will bo least,
even though its absolute share be greater and greater as the
years go on; but the share which the laborer will receive
will increase year by year, both absolutely and relatively.
As capital increases the absolute sum of profits is greater,
but the relative share of the product secured by capital be-
comes less. The increase of capital and its effective use by
skilled laborers assure a larger production, and the workman
obtains a larger share of a larger product, measured in kind
or in ^\ages paid in money. In the cotton-mill, as well as
in many other arts, special skill is required, but perluips
loss general intelligence ; therefore a lower grade of opera-
tives may be employed from iime to time as the machinery
becomes more automatic, but at a steadily increasing rate of
wages. Invention may, therefore, be said to enable all con-
ditions of men to attain a higher plane of material welfare,
and as one class passes from the factory to other occui)ation8
which offer better conditions of life, new imjirovemeuts ena-
ble those who could not do the factory work before, to under-
take and carry it on. Thus it has been in the j)a8t, since
the farmers' daughters of New England left the factory, in
which, with much longer hours of work, they earned only
about one half the wages now paid ; but those who have suc-
ceeded them could not then have been capable of doing the
work at all which they now so easily accomplish.

mim

1 ^

(

(! i
1 i

THE IRON AND STEEL INDUSTRIES.

435

THE IRON AND STEEL INDUSTRIES.

From Swank's Statistics of the Iron and Steel Production,
Tenth Census, Vol. II. I'l'. 886-800.

Important Uses of Iron and Steel.

The people of the United States are the largest per capita
consumers of iron and steel in the world, and of all nations
they are also the largest aggregate consumers of these pro-
ducts. Great Britain makes more iron than we do, but she
exports about one half of all that she makes. She exports
more than one half of the steel that she makes, and yet makes
but little more than this countr}'. No other European coun-
try equals Great Britain either in the per capita or aggregate
consumption of iron and steel. This country is not now
producing as much iron and steel as it consumes, but imports
huge quantities of both products, CJreat Britain being the
principal source of our foreign sup[)ly. Our exports of iron
and steel are only nominal.

A simple enumeration of some of the more important uses
to which iron and steel arc applied by our people will show
how prominent is the part these metals play in the develop-
ment of American civilization and in tho advancement of
our greatness and power as a nation.

We have built almost as many miles of railroad as the
whole of Europe, and C(msequently have used in their con-
struction almost as many rails, and now use almost as
many railroad cars and locomotives. At the close of 18S1
this country had 100,000 miles of railroad, Europe had
about 106,000 miles, and all the rest of the world had about
4'), 000 miles. The Unite*'. States had nineteen miles of
railroad to every 10,000 of population, while Europe h.ad a
little more than three miles to the same population. Rail-
roads, it is well known, annually consume more than ono
half of the world's production of iron and steel, — rails,

436

ECONOMIC HISTORY,

Ut^

•f':

bridges, cars, and locomotives being impossible without
these metals. The street railway is an American invention
which also consumes large quantities of iron and steel, and
we arc far in advance of every ether nation in its use. We
were also the first nation in the world to introduce elevated
railways especially to facilitate travel in large cities. In the
construction of our New York elevated railways beauty of
design, fitness of parts, and strength of materials have been
80 perfectly combined as to excite the admiration of all who
behold them. We are the foremost of all nations in the use
of iron and steel in bridge-building for railroads and ordinary
highways, and the lightness and gracefulness of our bridges
are nowhere equalled, while their strength and adaptability
to the uses to which they arc required are nowhere surpassed.
In the use of iron for water-pij)es and gas-pipes we are prol)-
ably in advance of every other nation. We make more iron
stoves for heating halls and dwellings and for the i)urposos
of the kitchen than all the rest of the world, and in the use
of heaters and ranges wc are behind no other nation. Our
household stoves, both for heating and cooking, are works of
real art as well as of utility. They are ornaments of Ameri-
can homes, instead of luniig conveniences simply. Our heat-
ing stoves are especially handsome, bright, cheerful, health-
ful, and clean. In all resi)ects they form the best combination
of desirable qualities yet devised for the heating of private
dwellings. Cooking and other domestic utensils of iron have
always, even in colonial days, been freely used in American
households, Wc make liberal use both of cast and wrought
iron in the construction of public and private buildings. Our
use of iron for these purposes has in late years been quite
marked, and in no respect more so than in the truly artistic
eflects which we give to this metal. We probably excel all
nations in the use of iron for ornamental purposes in connec-
tion with masonry, brick-work, and wood-work. Pine illustra-
tions of the artistic combination of inm with other materials
may bo seen in the interior of the new State Department
building at Washington and in the interior of the new passen-
ger depot of the Pennsylvania railroad at Philadelphia. Wo

THE IRON AND STEEL INDUSTRIES.

437

load the world in the use of iron and steel wire for fencing
jmrpcjsea, and we have more miles of telegraph wire in use
tlian any other country. Barbed-wire fencing is an Ameri-
can invention. We have made creditable progress In the con-
struction of iron ships, and we would have made much greater
progress if the same encouragement that has been given by
other nations to their shipping interests had been given to
ours. We use immense (juantities of plate-iron in the stor-
age, transportation, and refining of petroleum, in the produc-
tl(m of which nature has given us almost a monojmly. The
oil-wolls themselves yearly require thousands of tons of iron
pipes for tubing. We make liberal use of plate and sheet iron
in the construction of the chimneys of steamboats on our lakes
and livers, and in the construction of factory, rolling-mill,
and blast-furnace chimneys, and the stacks of blast-furnaces.
American jdanishcd sheet-iron has almost entirely super-
sudcd Russia sheet-iron in our markets. We use it for loco-
motive jackets, in the manufacture of stoves and stove-pipe,
and for many other i)urp()ses. Wo are the largest consumers
of tin plates in the world, — Great Britain, their principal
niiinufacturer, sending us annually more than one half of her
whole j)r()duct. I'ortaljle and stationary engines consume
large quantities of iron and steel. Our beautiful steam fire-
engines are the product of American taste and skill, if they
are not strictly an American invent i(m, and we annually
make large numbers of Ihcm for home use and f(tr exporta-
tion. Anchors and chains, cottcm-presses and cotton-ties,
sugar-pans and salt-pans, and general foundry and machine
work annually require large (piantities of either iron or steel.
We make our own cotton i.nd wot)llen manufacturing machin-
ery, and nearly all the other machinery that we use. The
manufacture of the printing-presses of the country consumes
immense (puintities of iron and steel. No other country
makes sueh free use of the ])rinf ing-pross as this country.
We are the leading agricultural nation of the woild, and
hence are the largest consumers of agricultural implements;
l)ut we are also in advance of every other nation in the use
of agricultural machinery. Our use of iron and steel in

..-..Iv', .W'i' f ,

438

If P ■ . r i

I*-. . If; .^1.

ECONOMIC HISTORY.

agriculture takes rank next to their use in the construction
and maintenance of railroads. We lead all nations in the
manufacture of cut-nails and spikes. Having a larger and
more rapidly increasing population than any other country
that is noted for its consumption of iron, we are consequently
the hirgost consumers of nails and spikes in the construction
of dwellings and public buildings, stores, warehouses, oHices
and similar structures. Our extended and varied mining
operations consume iron and steel in large quantities. So
do our manufactures of scales and balances, letter-presses,
burglar-proof and fire-p" <^ safes, sewing-machines, and
wagons and carriages. Sv...ing-machincs are an American
invention. Considerable quantities of iron or iron and
steel are used for sewer and other gratings, street-crossings,
iron pavements, lamp-posts, posts for awnings, all sorts of
small hardware, horseshoes and hoi'scshoe nails, wire-rope,
iron hoops, iron cots and bedsteads, woven-^Vire mattresses,
iron screens, iron railings, and fire-anns. In the manufac-
ture of machine and hand tools and general cutlery we are
excelled by no other nation, and in the use of machine tools
we are in advance of every other nation. In general cutlery
our saws and axes especially enjoy a world-wide reputation.
Not the l^ast important use to which iron and steel are put
in this coi ntry is in the extension of the iron industry itself,
— every blast-furnace, rolling-mill, or steel works that is
erected first devouring large (pumtities of these products
before contributing to their general supply.

In the substitution of steel for iron (his eountry is rapidly
progressing, especially in the construction and equipment of
its railroads. During the past few years fully two thirds of
all the rails that have l)een laid on American railroads have
been mnde (.f Bessemer steel, and at present a still larger
proportion of steel rails is rocpiired by our railroad coni-
|»anies. On sev-al American railroads the boilers of all
new locomotives re now required to be made of steel, and
the tendency is toward tlie exclusive use of steel for locomo-
tive boilers, and its general use for stationary and marine
boilers. The tires of American locomotives arc now made

THE IRON AND STEEL INDUSTRIES.

439

.4"

exclusively of steel, and the fire-boxes of our locomotives are
generally made of steel. The steel used in the construction
of American locomotives is now chiefly produced by the open-
hearth process. We have built a few steel bridges, but there
is no marked tendency to substitute steel for iron in bridge-
building. Steel is, however, largely used in the manufacture
of wire, including wire-fencing, and for car and carriage
axles, carriage tires, fire-arms, screws, and many other pur-
poses. But little steel has yet been used in this country for
nails and horse-shoes.

Mention has been made of the artistic finish of some of our
iron-work; but the subject seems worthy of further notice.
It is not only in stove-founding, in the graceful designs of
bridges and elevated railways, and in the delicate combina-
tion of iron with other materials in the construction and
ornamentation of buildings that American iron-workers have
displayed an excjuisite taste and a b'^ld and dexterous touch.
The fine arts themselves are being enriched by the achieve-
ments of our iron- working countrymen. An iron foundry
at Chelsea, in Massachusetts, has recently reproduced, in
iron castings, various works of art with all the fidelity and
delicacy of Italian iron-founders. The most delicate antique
patterns have been successfully copied. Shields representing
mythological groups and classic events, medallions contain-
ing copies of celebrated portraits, panels containing flowers
and animals, an imitation of a Japanese lacquer-tray one
sixteenth of an inch thick, and a triumphal procession repre-
sented on a large salver comprise some of the work of the
Chelsea foundry. Some of the castings have been colored to
represent bronze, and others to represent steel, Avhile others
again preserve the natural color of the iron. The bronzed
castings resemble beaten work in copper. Only American
iron is used. The ornamental uses to which art castings of
iron may be ))ut are many, and as thoy can 1)0 cheaply pro-
duced it may be assunicMl that a demand will ere long be
created for them that will be in keeping with the artistic
taste which has been so generally developed in our country
during the past few years.

' i'.

■•I . ■

ja\

440

ECONOMIC HISTORY.

m '

We conspicuously fall behind many other nations in the
use of iron and steel for military purposes. We maintain
only a small standing army and a small navy, and hence have
but little use for iron or steel for the supply of either of these
branches of the public service. We are also behind many
other nations in the use of iron and steel sleepers for rail-
way tracks. We yet have an abundance of timber for railway
cross-ties, and hence do not need to substitute either iron oi*
steel cross-ties. Except possibly as an experiment, there is
not an iron or steel cross-tie in use in this country. It is a
singular fact that we still import many blacksmith's anvils,
their manufacture being a branch of the iron business to
which we have not yet given adequate attention. Anvils of
the best quality are, however, made in this country. A far
inore serious hiatus in our iron industry is found in the al-
most total absence of the manufacture of tin plates, the basis
of which is sheet-iron, as is well known. As we can import
the crude tin as easily as we import other commodities, our
failure thus far to manufacture tin plates must be ascribed to
the only true cause, — our inability to manufacture sheet-iron
and coat it with tin as cheaply as is done by British manu-
facturers. It is not improbable that tin ore may be yet dis-
covered in our own country in sufficiently large quantities to
supply any domestic demand that may be created for its use.

Conclusion. — In reviewing the historical pages of this
report the most striking fact that presents itself for consid-
eration is the great stride made by the world's iron and steel
industries in the last hundred years. In 1788 there were
only eighty-five blast-furnaces in Great Britain, most of
which were small, and their total production was only 08,300
tons of ]tig-iron. In 1880 Great Britain had 907 ftirnaces,
many of which were very large, and their production Avas
7,740,233 tons. A hundred years ago there were no rail-
roads in the world for the trans|)ortation of freight and \va»-
sengers. Iron ships were unknown, and all the iron l)ridges
in the world could be cotmted on the fingers of one hand.
Without railroads and their cars and locomotives, and with-
out iron ships and iron bridges, the world needed but little

THE IRON AND STEEL INDUSTRIES.

441

iron. Steel was still less a necessity, and such small quan-
tities of it as were made were mainly used in the manufac-
ture of tools with cutting edges.

The great progress made by the world's iron and steel
industries in the last hundred years is as marked in the
improvement of the processes of manufacture as in the in-
creased demand for iron and steel products. A hundred
years ago all bar-iron was laboriously shaped under the trip-
hammer; none of it was rolled. Nor was iron of any kind
refined at that time in the puddling furnace ; it was all refined
in forges, and much of it was made in i)rimitive blooraary
forges directly from the ore. Nearly all of the blast-furnaces
of a hundred years ago were blown with leather or wooden
bellows by water-power, and the fuel used in them was chiefly
charcoal. Steam-power, cast-iron blowing-cylinders, and the
use of bituminous coal had just been introduced. Loss than
sixty years ago heated air had not been used in the blowing
of blast-furnaces, and fifty years ago anthracite coal had not
been used in them, except experimentally. Thirty years ago
the Bessemer process for the manufacture of steel had not
Ijeen heard of, and the open-hearth process for the manufac-
ture of steel had not been made a practical su-ccss. Thirty
years ago the regenerative gas furnace had not been invented.
The nineteenth century has been the most prolific of all the
centuries in inventions which have improved the methods of
manufacturing iron and steel, and which have facilitated
their production in large quantities.

The next most important fact that is presented in the
historical chapters of this report is the astonishing prog-
ress which the iron and steel iiulustrles of the United States
liavc made within the last twenty years. During this
period we have not only utilized all contemporaneous im-
provements in the manufacture of iron and steel, l)ut we have
shown a special aptitude, or genius, for the use of such im-
provements as render possible the production of iron and
steel in large quantities. Enterprising and courageous as
the people of this country have always been in the manu-
facture of iron and steel, they have shown in the last

■' m

442

ECONOMIC HISTORY.

twenty years that they have in all respects been fully alive
to the iron and steel requirements of our surprising national
development. If we had not applied immense blowing-
engines and the best hot-blast stoves to our blast-furnaces
our present large production of pig-iron would have been im-
possible. If we had not built numerous large rolling-mills
we could not have had a suflicient supply of plate-iron for
locomotives and other boilers, the hulls of iron ships, oil-
tanks, nails and spikes, and other important uses; nor of
8heet-ir(m for stoves and domestic utensils; nor of tee, angle,
and channel iron for bridge-building and general construc-
tion purposes; nor of iron rails for our railroads; nor of bar-
iron and rod-iron for a thousand uses. If we had not i)roniptly
introduced the Bessemer j)roce8s the railroads of the country
could not have been 8up|»lied with steel rails, and without the
four and a half million t(ms of American steel rails that have
been laid down in the past twelve years our trimk railroads
could not have carried their vast tonnage of agricultural and
other products, for iron rails could not have endured the wear
of this tonnage. If we had not established the manufacture
of crucible steel and introduced the open-hearth process there
would have been a scarcity of steel in this country for the
manufacture of agricultural imjdemcnts, 8i)ring8 for railway
passenger-cars, tires for locomotives, etc. Foreign coimtries
could not in late years have supplied our extraordinary wants
for pig-iron, rolled iron, iron and steel rails, and crucible
and open-hoarth steel, for, if there were no other reasons,
the naturally conservative character of their ju'ople would
have prevented them from realizing the magnitude of those
wants. If our iron and steel industries had not been devel-
oped in the past twenty years as they have been it is clear
that our railroad system could not have been so wonderfully
extended and strengthened, and without this extension of
our railroads we could not have produced our large annual
surplus of agricultural products for exportation, nor could
our population have been so largely increased by immigration
as it has been.
We cannot fully comprehend the marvellous nature of the

THE IRON AND STEEL INDUSTRIES.

448

s nature of the

changes which have taken place in the iron and steel indus-
tries of this country in recent years, unless we compare the
early history of those industries with their present devel-
opment.

In Alexander Hamilton's celebrated "Report on the Sub-
ject of Manufactures," presented to Congress on the oth of
December, 1791, just ninety years ago, it was stated with
evident satisfaction that "the United States already in a
great measure supply themselves with nails and spikes," so
undeveloped and primitive was her iron industry at that time.
In the preceding year, 1790, " Morse's Geography" claimed,
in a description of New Jersey, that " in the whole State it
is supposed there is yearly made about 1,200 tons of bar-
iron, 1,200 ditto of pigs, and 80 of nail rods;" and in 1802
it was boastingly declared in a memorial to Congress that
there were then 150 forges in New Jersey, "which at a
moderate calculation would produce twenty tons of l)ar-iron
each annually, amounting to 3,000 tons." In 1880 there
were several rolling-mills in New Jersey and several hundred
in the United States which could each produce much more
bar-iron in a year than all of the 150 forges of New Jersey
would produce in 1802.

Less than fifty years ago the American blast-furnace which
would make four tons of j)ig-iron in a day, or twenty-eight
tons in a week, was doing good work. "Wo had virtually
made no progress in our blast-furnace practice since cobmial
days. In 1831 it was publicly proclaimed with some exulta-
tion that "one furnace erected in Pennsylvania in 18.30 will
in 1831 make 1,100 tons of ])ig-iron. " But, as CJeorgo
Asmus has well said, "a time came when men wore no
longer satisfied with these little smclting-itots, into which a
gentle stream of air was blown through one nozzle, which
received its scanty 8uy)])ly from a loather bag, squeezed by
some tired water-wheel." After 1840 our blast -furnace prac-
tice gradually improved, but it was not until about 18(15 that
any furnace in the country could produce 150 ttms of pig-iron
in a week. Ten years later, in 1875, we had several furnaces
which could each make 700 tons of pig-iron in a week; in
1880 we had several which could each make 1,000 tons in a

fi*

fill It

5. flfii / .' ■

i i

(

;!l

1 1

444

ECONOMIC HI STORY.

week ; and in 1881 wo had one furnace which made 224 tons
in a day, l,3o7 tons in a week, and .^TjOS tons in a month.

In 1810, seventy years ago, wo prodnced only 917 tons of
steel, none of wliich was criicil)le steel. In 1831, fifty years
ago, we produced only al)r)ut 2,000 tons of steel, not one
pound of which was crucible steel of the best quality. So
imperfect were our attainments as stec.'Iniakcrs in 1831 that
we considered it a cause of congratulation that "American
«'omp;'lition had excluded the British common blister steel
altogether." In 1880 we had virtually ceased to make even
the best blister steel, better steel having taken its place and
in that year we produced 1,247,335 gross tons of steel of all
kinds, 04,004 tons of which were crucible steel. Our produc-
tion of IJessemer steel and IJessemer steel rails in 1880 was
larger than that of Clreat Britain.

It was not until 1844 that we commenced to roll any
other kind of rails than strap rails for our railroads, and not
even in that year were we prepared to roll a single ton of T
rails. In 1880 we rolled l,30r),212 gross tons of rails, nearly
two thinis of which were steel rails, and nearly all of which
were T rails.

The growth of the iron and steel industries of the United
States during the present century is perhaps best exemplified
in the statistics of the production of our blast-furnaces at
various periods. In 1810 W(! produced 53,908 gro.ss tons of
])ig-irun and cast-iron; in 1840 we i)rodueed 315,000 gross
tons; in 1800 we produced 821,223 gross tons; and in 1880
we produced 3,835,191 gross tons. Our production in 1881
will be about 4,500,000 gross tons.

The position of the United States among iron and steel
producing countries in 1880 is correctly indicated in the fol-
lowing tal)le of the world's production of pig-iron and steel
of all kinds, which wc liavc compiled from the latest and
most reliable statistics that are accessible. This table jdaces
the world's |>roduction of pig-iron in 1880 at 17,088,59(5
gross tons, and the world's production of steel in the same
year at 4,343,719 gross tons. The percentage of pig-iron
produced by the United States was nearly 22, and its per-
centage of steel was nearly 29.

:t^V

THE IRON AND STKEL INDUSTRIES.

445

1 to roll any
roads, and not
iin<»;lo ton of T
)f rails, nearly
y all ol' which

iron and stool
itod in the fol-
iron and stool
the latest and
his taldo jdacos

at ii,cm,rM)

cl in the same
ijrc of pis-iron
12, and its per-

5 ^ 8 :$ S ^

CO C7 O ^ O ^

O I- to 00

— -»" I- I- .

•t" n I- w i" >->

cl M I-

CO e

CO "

IT £•

5" 8 S"

■M

'?r

CI •:<

CO tl

c'l S Ss 8

I- CO C^ i-l

o> — r-
-»< >o 3>
■:< <5 —.

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o

M
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at
M

-3

* cio

S B

3 at

B
3

5
S

•3
a
a

•c

o
u
u

I-

lis

440

ECONOMIC HIS TOR V.

^.H

I' I' J

AKlioiif^li this country cannot produce iron and 8toel as
clu'iiply as Kiiropraii countries which poHscHs the udvantii^cH
of ciicap hilior and proximity of raw nuitcrials, it is not ex-
cel h'd l»y aay other country in the skill which it displays or
the nieelianical an<l seientilic ccononiies which it practises in
any braneii of their manufacture, while in certain leading
branches it has displayed superior skill and shown superior
aptitude for economical improvements. Our blast-furnace
practice is the best in the world, and it is so chiefly beeauso
we use powerfid bIowin<^-en<riiu's and the best hot-blast stoves,
possess pMKl fuel, and carefully select our ores. The excel-
lent (juality of our pig-iron is universally conceded. Our
Bessemer steel practice is also the Ix-st in the world. We
produce much more Hessemcr steel aiul roll more Hessemer
Bte(d rails in a yiven time by a fijiven amount of machinery, '
technically tcruu-d a "plant," than any of our KurojK'an
rivals. No controversy concerninjjj the relative wearing
(jualities of European and Auu'rican steel rails now exists,
and no controversy concerning the (juality of Anu-rican IJcs-
Bcmer steel ever has existed. We experience no dillicully in
the manufacture of open-hearth steel in Ihe Siemens-Martin
furnace, and our steel which is thus jiroduced is rapidly com-
ing into general use side by side with crucil)le steel. In
the manufacture of crui-ible steel our achieveuu'nts are in
the highest degree '•reditable. In only one res|)ect can it be
said that in its nuuiufacture we fall l.'ehind any other conn-
try; we have not paid that attention to the manufacture of
fine cutlery steel which (treat Britain has done. This is,
however, owing to commercial and not to mechanical reasons.
Auu'rican crucible steel is now used, without prejuilice, in
the manufacture of all kinds of tools, and in the manufacture
of carriage-springs and many other articles for which the best
kinds of steel are recjuired. In the quantity of open-hearth
and crucible steel produced in a given time by a given i)lant,
we are certainly abreast of all rivals. The largest crucible
steel-works in the world are those of Park, Brother, & Co.,
at Pittsburg, Penn. Our rolling-mill practice is fully ecpial
to the best in Europe, except in the rolling of heavy armor

Vi i\

THE IRON AND STEEL INDUSTlilES.

447

|iliitc8, for which tlioiT has been but little demand, and in
the production ol" wliich we have, couHCt uently, had but little
experience. The <iuality of our rolled iron, indudinjr bar-
iron, plate-iron, Hheet-iron, iron hoo|)H, and iron railH, is
iniilornily Huperior to that of foreign rolled iron, in the
production of heavy lorgings and castingrt, a.s well aH all
lighter products of the foundry and niacin iu,'-shop, thirt coun-
try hart shown all the skill of the most advanced iron-working
countries in Kuro|K'. In the production of steel castings wo
have exhibited creditable! skill and enterprise, and we an; in
advance; of all countries in the regular use of the Bessemer
converter for this purpose.

All of our leading iron and steel works, and indeed, very
many small works, are now supplied with systematic chemi-
cal investigations by their own chemists, who are often men
of eminence in their profession. The managers of our blast-
furnaces, rolling-mills, and steel-works are themselves fre-
(pu'ntly well-educated chemists, metallurgists, geologists, or
mechanical engineers, and, sometimes, all of those coml)incd.
Our rapid progress in increasing our production of iron and
steel is not merely the result of good fortune or the possession
of unlimited natural resources, but is largely due to the pos-
session of accurate technical knowledge by our iron-masters,
and by those who are in charge of their works, combined
with the characteristic American dash which all the world
has learned to respect and admire. The "rule of thumb"
no longer governs the operations of the iron and steel works
of this country.

A feature of our iron and stool industries which has at-
tended their marvellous pro.hictivonoss in late years is the
aggregatitm of a nund)er of large producing establishments
in districts, or, "centres," in lieu of the earlier practice of
erecting small furnaces and forges wherever suflicient water-
j)ower, inm ore, and charcoal ciaild bo obtained. This ten-
dency to concentration is, it is true, not confined to our iron
and steel industries, but it is to-day one of the most powerful
elements that inthienco their development. It had its begin-
ning with the commencement of our distinctive rolling-mill

~ t\

» -u

-ma

448

ECONOMIC HISTORY.

era, about 1830. In colonial days and long after the Revo-
lution our iron-making and stcel-raaking establishments be-
longed to the class of manufacturing enterprises descriljcd by
Zachariah Allen, in his "Science of Mechanics," in 1829.
" The manufacturing operations in the United States arc all
carried on in little hamlets, which often appear to spring up
in the bosom of some forest, gathered around the Mj'terfall
that serves to turn the mill-wheel. These villages are scat-
tered over a vast extent of country, from Indiana to the
Atlantic, and from Maine to North Carolina, instead of being
collected togetl>er, as they are in England, in great manu-
facturing districts." While these i)rimitive and pieturescpie,
but improductive, methodic could no. forever continue, it is
greatly to be regretted that our manufactures of iron and
steel and other staple products could not have grown to tiieir
present useful and necessary proportions unattendcid by the
evils which usually accompany the collection of large manu-
facturing populations in small areas.

Upon the future prospects of iron and steel industries it is
unnecessary for us to dwell. Our resources for the increased
production of iron and steel for an iniU'llnite jjcriod are
ample, and all other essential conditions of contituied growth
arc within our grasp. We arc to-day the second iron-nuxk-
ing and steel-making country in the world. In a little while
we shall sur])ass even Great IJritain in the |)r()(luction of steel
of all kinds, as we have already surpassi-d her in the pro-
duction of Bessemer steel and in the consiinipf ion of all iron
and steel products. The year 18S2 will proimhly witness this
consummation. We are destined also t<» n;iss (Jrcat Mritain
in the production of jug-iron. These conditions and results
arc certainly gratifying to our national pride, for, ol them-
selves, they assure the ultimate jtre-eminence of the Unitcil
States among all civilized countries. If h be true, as rccoi-ded
in the second chapter of Daniel, that" iron lircaketh in pieces
and subdueth all things," the country which produces ami
consume ) the most iron and steel nuist hold the first rank.
When the United States takes the jiositiou which it is des-
tined soon to take, as the leading iron and steel producing

THE IRON AND STEEL INDUSTRIES.

449

well ns consuming country, the saying of Hishop Berkeley,
that "Westward the course of empire takes its way," will
receive a new interpretation; for the iron industry, which
had its begimiing in Asia, and then passed successively to
the countries along the Mediterranean, upon the Rhine, and
in the north of Europe, will then have made the circuit of
the world.

iBii

460

ECONOMIC HISTORY.

XVI.

LES DETTES PUBLIQUES,

FuoM Neymarck'b Lk8 DKTTEa PtnuQiKH Klkui-eennes, pp. 86-102.

I. — AUGMENTATION .DES DETTES I'UBLIQUES DEPUIS 1870.

"P^ANS cette longuc <;num<5r}ition dc chiffros, cc qui frai)pc
-■— ^tout (l'til)orcl Teaprit, c'est rauirmcntatioii cousidc^rablo
fit! lu dette pul)li(pi(' dcs Etals Eiintpc'oiis depiiis 18^0. Octto
dettc s'olevait i\ TA milliard.s on lISTO onvirun ; I'lle attcint
llf) inillia .Is en 1880. L'auj^mcntatiun n'ost pas nioiiidro
do 40 milliards.'

Nous ovons pris i\ dcssein cotto date do 1870 qui nous
rappcllc It- j)ius grands niallieurs (pic notro pays ait janmis
supportds, Ics lourdos charges qui ont dt(5 la cons<^<pience do

' D'lipri'R lo joiiriml (If la " Socii-td di- Btutixtiijiii' " (avi-il, 1807), la dettc
I)iil)li(|iU' iI'FMiropc s'cli'vait, en 1H65-180(J, aux cliiftros suivaiiti : —

I) ppiim>ii toliiU'K ill's tiiiiliti'tn ... 1(1 iiiilUiirJ.i r>Of milliona.

("iiliilallwitinn .!.•» iWnv» Wl " 013 "

IiiU'ret et BUiortiHHeiiieiit . . . , 2 " 438 "

La population di> TEurope tftait cvaluo' h 201,7:18,371) liakiitants; la di-ttc par
lialiitaiit rt'prc'si'ntait 'I'lfi fr. ;iO.

M. I'aul Hditciiii, (larm son article sur 1(> biidKct jjc'nt'ral dc I'Elat, insert^ dans
lo Dictioniiairo dcx finances dv M. I.t'on Say, a rc'uni lou* Ic titre de - " liudgvtii
Eiiropi'cdH " la ]>liipart dcM hiidKcta du continent, ct pour en faciliter Tc'tudis il
a pliii(' en retfard dii nioiitant dcs dc'peniieR [.nviu':* pour Tcxereice 1886, le
niiintant den detten consolidccH ct aiitrct (pii jrri'vciit I'actif dcs difTiTciits Etats
ainxi (pic le nmntant des* dcpenHeit inililaircM ct cellos du service de la Dette ut
de raini)rtis»enient. 11 olitient le» cliitTrct «uivanl8 : —

l'ri'Tlii|iin!< tnenlir <|)>ii (li'iicnM'i liiiilirrtniiVK nnniii>ll<>ii IH niillUrilii 848 milliona.
('n|<itJiliMilinii lied iIkIU'k (■cinnolliliH'H, ilt'ii Uc'tiw MiKirli*-

fatili'H. sniKilii'M illTpruM, pto KW " 431 "

Ili>|i<'iiM>ii ilii siTTlri' (It-.H lii'iipK pt ill' ritiiinrtlnwiiieiil 4 " HiW "

Di-pcnwn luilitaire*, guprri' vt marine .... .4 " 48!) "

On pourra comparer ces ctiiffres h ceux que nous donnons plus loin.

NE8, PP. 86-102.

DEl'UIS 1870.

, cc (jui frappc
c()iisi(l^ral)lc
k 1870. Cottc
ello atteint
; pas inoindru

870 qui nous

ays ait jamais

on.s<^(luunco da

•i-il, 1807), ladette

ntt —

).< r<OH milliona

013 "

438 "

tants ; In dettc par

VpAnt, ing('n<dnn8
itri' do • " liudKi'tit
faciliter rctiidi', il
IVxiTciti" 1885, If
k's (lifTiTciiti* (^.Ints
vice di' la Dutte et

In H48 mlllioni.

431

HIVI "
43!l "

plus loin.

LES DETTES PUBLIQUES. 451

la guerre, le fardeau qui })dse sur nous tous. La guerro dc
1870 a cuutd ^ la France plus de 10 milliards; sans clle nous
no serious pas grcvii . d'inipots ccrasants, et aucun pouple no
supportcrait plus facilemcnt quo nous le poids de sa dettc
publiquc.

Aucun pays n'a, on effet, subi dcs d<?sastres aussi grands
que les notres ; aucun n'a eu une iudemnitd de 5 milliards i\
payer li retraugor; aucun n'a dii reconstitucr sa puissance
militairo, son luateriel de guerre ; aucun n'a eu i^ refaire, pour
aiusi dire, la patrio elle-mC'inc tout entiere. Et cependant (juo
voyons-nous ? A I'e.xception de I'Angleterro (jui, par suite
do divers reinboursenionts d'annuites, a pu diiuiuuer sa detto
de 1,350 millions ; i\ r<'xct'p(ion du Daneinarck (|ui,i)ar suite dc
conversions houreusoincnt elTectuees, a pu reduire sa dettc
de 20 millions, tous les pays se sont endettes depiiis 1870
dans dos proportions ^'normes. Voici sur ce point <[uelques
chilTri's precis. Nous rangeons les Etats par ordre d'aceroisse-
ment do leurs dottos depuis 1870.

AUGMKNTATION DU CAI'ITAL NO.MINAL DK I'LUSIKUKb
DETTKS PUBLIQUES DEl'UIS 1870.

Franco 12 inilliardg.

Kiissiu' 11

rrussu 3 •' 217 millions.

Italio 8 " 132

Hoiiurie 2 " 240 "

Autricho 1 " 770 "

Ks|ianne 1 " ;iOO "

IU'IkIiiiio 1 " 80

Houiiianio 701 "

AlliiiiaKiie 526 "

Saxe 888

(Jri'co 270

SiTl.ie ... 244

Wiirti'inberg I'.l4 "

Wu.'-ili' 181 "

Ilaiul)(iiir){ 24 "

Fiiilande 20 "

Cotte augmentation du capital nominal dos dottos pwbliriuos
ourop<^enne8 (jui atteint, dopuis 1870, 40 milliards environ,

' Auijinontation depuis 1806.

,1 !

452

ECONOMIC HISTORY.

a eu pour consdcjueucc ruugmentatiou des int^rets ct dcs
amortisscmeuts anuuols pour Ics enipruuts contractus, I'ac-
croisaemcut dos dupcnses totales dcs budgets, uno surcharge
dans Ics iniputs. Coiubicn nc scrions-nous pas all(:'g<>s si
nous n'aviuus pas a payer cha(iuc annee les luurds impots qui
grevcnt notrc coiumerce ct Motrc Industrie, ct qui, s'ajoutant
aux frais do production, out rendu la concurrence a nos
produits d'autant plus facile ? Toutes proportions garddcs,
ics pays d'Kurope soull'iCnt, counnc nous, de ccs lourdcs
charges qui, dans tons les pays, oberent les contribuablcs.
Cost la guerre, toujours la guerre, (pii redoit aux budgets.
Dcpuis seize ans, les budgets de la guerre et de la marine out
coiltd a la France plus de 11 milliards, c'est-a-dire plus dc 700
millions par an; rAllemagne et la Kussic n'ont pas ddpcnsd
moins de 10 millards, chacun pendant la meme p^riode,
I'Autriche et rilalie presfjue Ic menie cliilVix'. Voila done
cinq grands pays qui, en vue d'lMic guerre prjijiil>le,deitcnsent
tous \va uiis dc 500 a 900 nnllions, depuis seize ans. Que
coutcrait done la guerre elle-meme ?

Les Etats curo|»<;ens paient annuellement pour lours d^jpcnses
do la guerre et de la marine a pen pres les nienics .sonnnes que
pour riutdrei et ramortis',emeut de leurs dettes. D'apres les
dernicrs budgets, ainsi que le {)rouvcnt les chiffrcs ()Tic nous
publions plus loin, la guerre et la marine content h I'Kuropc
4 milliards 528 miliioiis, rilors epic Tinterr-t et ramorti.s.senu'iit
dcs dettes publitpu's reclament 5 milliards 843 millions. En
voici Ic relevd : —

ii' I

LES DETTES PUBLIQUES.

453

II. — DfePENSES DE LA GUERUE, DE LA MARINE, CAPITAL
NOMINAL ET INT£K^TS DES DETTES.

Etata.

Bzercioea financiers.

Oipitnl

nominal de

Itt Uutto.

InWrSti

et uniort.

ami.

D^pensos

aun.
Uuerre et
marine.

l'rii9«o

Alli'mas?iie

Autriclie

Iloiigrie

WiirtenibtTg ....
Sii.xe

ler avril, 1880 . .
81 ili'ocnibro, 1880 .
31 ili'cenibre, 1884 .
;?• (litembre, 1884 .
31 lieeenibre, 1885 .
31 doccnibrc, 1885 .
31 di'cuinbre, 1883 .

Milllnrdii.
Milliuna.

4.814

520

0.288

3.178

525

800

178

1.700

2(J8

11.131

345

151

274

2.200

1.771

6.042

2.821

17.820

244

720

348

2.622

*66"
18.028
31.000

Mllllonii.
220 )
20.1 \
380.0 1
200.8 j
21.6
33.2
8.7
61.1
2.1
11
632
16.4
0

12.4

60.5

80.6

274.1

89.3

737.5

1.8

13.7

50.2

55.4

2.1

6.9

1.038

1.330

HllUoni.
639.1
842

Bavii're

IJaile

Etats allenmnds . . .
Italie

ler avril, 1880 . .
31 d.'cenibre, 1885 .
31 di'cenibre, 1885 .
31 di'Vcnibre. 1885 .

342 5

Suoile

Norwfcge

Dancniark ....

31 ili'i.'onibrc, 1885 .

30 juin, 1885 . . .

31 d.'cenibrc, 1885 .
31 ili'combrc, 1885 .

35.5
18,3
23

60 5

31 di'cenibro. 1885 .

45 6

Eiipiignu

Portugal

Anfjic'liTrc ' ....

Snis.se

Si rbio

Uuuinanie

Grbcf

Turquio

Bulgarie

Kinliinilo

ler juiilet, 1880 . .
ler juilii'f. 1880 . .
31 mars, 1885 . .
ler jiinvler, 1886 .
13 juin, 1880 . , .
ler avril, 1887 . .
ler Janvier, 1880 .
1880-lHHl ....
ler Janvier, 1885 .
31 tlt'cembre 18S5

200.3
30.:{

740.2
17.1
10.2
28.5
23

200

6.1

082.4
850.5

Kussic

France

31 decenibre, 1885 .
31 decinibre, 1886 .

Totau.x

117.112

5.343.2

4 5281

Dans (luoUea proportions dnonnos Ics dcttos publiciuos de
toute rKiirope no |)ourraiiMit-olle.s pas C'tre r()duites si Ics
(it'pon.><(\s d(> la L^'ioiTo ii'.ilisorl)niciit pas tons los nii.s plus do
H")*}^ dc; CCS nirinos dcttcs ''. Toulcs Ics puissances curo-
pocnncs ont dos cinhanas linancicrs ; tontcs on presqnc toutcs
auiruiontcnt on out brsuin d'auirnicntcr Icnra impots. Toutos,
sans o.xcoption, li>nt des anuemonts con.sidi'ral)los. Ccttc

' D'apn-s une note cle I'lionnrnMe M. Hnnnonjick, tie la Sneietr ile stutislique
lie I,onilre«, ile flu inam, 1884, ii lir mars I ■'85, 1 Angleterre paie eiininie intr'ret
22,000,000 JL'. et 7,000,00»t X cciiiiu .Miorti-Minent, soit au total 20,500,000 Ji.

il ' '*

f''''Tj., '"

f(i!i'f \ii

wLL\'ri'i

454

ECONOMIC HISTORY.

situation prdscnto les plus graves dangers et plus quo jamais
cupendunt, le niaintien do la paix est ndcessairc k 1' Europe
pour consolider son credit, aiu<iliorer lY'tat '' ses finances,
donnei- de I'essor et du la confiancc au commerce ct a
I'industrie.

III. -LES CONVERSIONS DE RENTES A L feXRANGER ET EN

FRANCE.

Et cependant, nialgr^ los charges de toute nature qui pi^scnt
sur les Etats, les rentes de ces menies pays se sont n<''goci<;es
pendant Taun^-e 1886 {)res(|ue toutes aux jilus liauts cours
(ju'ellcs aient cotds depuis 1870. Nun seulenicut, grace a
I'abundance des capKau.v ct ii Tahaisscment du taii.x de
rint(''ret, les fonds puljlies out hauss<^, niais il a 6t6 rdalis^i,
en niatirre de liuances, des progres consid^^rahles.

Les Etats, ni»ii plus que les villos ct les soeieles industricllcs
on liuaiicieres, n"li<^sitent pas a elTefituer, sur une tres largo
^t'licllo, lies (>p(^rati(»ns ipi'on cut a jieine os<5 coneevoir il y a
moins de trente ans.

Aujourd'liui des Etats, dont la puissance financi^ro a toiijours
{>i6. relativomout restreinte, ])euvent contracter des eniprunts
qui depassfiit de lieaiieoup eeux (pie nagu«^re encore des
nations ricln-s n'eusseut tent(''s (pravce apprehension.

Toutes les conihinaisons auxcpielies pouvent prefer les fi-
iianers d'Ktat <pii etaient si longtenips restees dans le donuune
de la tlu'orie, sunt pleinenient enlrrcs dans la pratique et se
n'aliscnt courainnicnt. Hicn des prejugrs ('eontuuiqucs et
linauficrs se son! dissiprs ; l»ien des priui'ipes, encore conlestes
nagut're, out trionqtlie et so sont inqtoses.

liC cn'dit a acfpiis une forc(> d'e.xpansion inouie ; les fonds
puldies, Ifs valiMirs niohilit-'res se sont de plus en pUis n'pan-
(liit's, vulL'nrisi'cs, dt'nioeratisces en fpiel(|Ui' sorte. licur
urantio facilifc di^ circidation, leur moltiliti'. h'lir difl'usion,
Iciir accessiltilitr a toutes les fortimes, petites on grandes, leur
out assurt'- iiuc t'avcur qui' Ton p<Mit trouvtM" e.veessive, niais
(|ui est, ;\ divers points de vue, trcs iiistifit'e. Cct essor de la
fortune niol)ilien' a iietermine une \''rital)le r<^volntiitn dans
les condition> tinancien's de Texistenef des peuples.

LES DETTES PUBLIQUES.

455

IGEU ET EN

Emprunts, unifications dc dcttcs, conversions, sont dcs
operations dcvcnucs fuiuiliurcs mume aux moindres Etats.
Et, cIjohc asscz etrangc, c'cst la France qui, apres avoir dtd,
avcc rAnglotcrrc, Tinitiatrico dcs grandes rdformes finan-
ciercs, a (ttd dcpuis quclciucs anndes, parmi les nations, la plus
timido ti rdaliser les combinaisons licurcuses, legitimes, profi-
tiiblcs, (pie la puissance ct la soliditd do son crddit lui rendcnt
si facilcs.

Rien, en cffct, dc plus curieux ^ observer, autour dc nous,
que les nonibreuses operations ilc conversion ddji\ accomi»lics
avec succL's on en voie dc prd[)aration. Si on pout reprocher
i\ certains Etats uno propcnsiitn trop grandc ii cmpruntcr, il
faut bicn reconnaitro qu'ils se preoccupent aussi, pour la
l)lupart, do n'eniprunter qu'au plus bas prix possible. Dfis
(pic leur cr<?dit s'iitend ct 8'ain(?liorc, ils s'efforccnt dc rem-
placcr les ancienncs dcttcs coutcuscs, on(5rcusci!:, par dcs
dcttcs plus Icl-gcres, contract(;es a un taux moins (jlevd. Ce
sont maintcnant dcs puissances financ'^rcs de second ct dc
troisienie oniro qui nos donnent rcxemplc. Pans cct ordre
d'id<5c8 ct do faits, il n'est cortiiincment pas inutile d'oxaniiner
comment sc sont elYcctuees les conversions reccntes ct d'in-
diquer Ifs divers procedes jusqii'ici cujployds.

Dcpuis 1870, deux fonds d'Etats frantjais ont dtd I'objet
d'unc conversion : remprunt Morgan, ct la rente 5%. On se
rappclle comment clles s'effectuorcnt : on offrit aux portcurs
d'obligations Morgan 0'/^, Ic mcmc rcvcnu en route 3%,
moyeniKuit une soulte de 12-4 fr. par obligation. Los portcurs
de rentes 5% curent i\ opter entrc Ic rcmboursement }\ 100 fr.
de lours rent's et lYeiiangc centre un nouvcau titrc de
rente 4^% non-convertible avant un ddlai de 10 ans qui
expire en 1893.

La IJelgitiue a opdrd trois conversions: son 4^, est devcnu
(111 4%, puis du ;^%. Pour la premiere operation, elle cut
iiumediiitement recours a un syndicat dc banquiers, qui sc
obariroait du placomont de la rente uouvello, tandis que I'Etat
oporait le retrait de la rente convertie. I'our la seconde con-
version, le gouvcrncmcnt beige voulut opi'rcr soul et eniettre
dircctcment sa rente nouvelle; il n'obtini pas tout le succes

'"f;..^

456

ECONOMIC HISTORY.

ddsird ct dut, aprHs dcs cssals pcu favorablcs, accepter le
concours qui lui avait 6t6 donnd prdcddcmincnt.

Tout ruccmmont, ainsi qu'on I'a vu dans Ic cours do ccttc
<jtudt.>, la JJclg'uiuc a rdalisd unc troisicime conversion en con-
vertissant ses rentes 4% coutrc du 31%. Cettc op^lnition,
efl'ectudo directemcnt par le Trdsor, obtint un plcin success.

La Suede a, ellc aussi, transform^ successivcment son 4A en
4% et en 3),% en recourant il rinterni<;diairc des grandos
maisons de bancjue. Cellcs-ci dmettaient sur les march(!s
(itrangers la nouvelle rente suddoise, tandis quo 1^'tat restait
cliarg<5 du retrait des anciens titres.

On con^oit (jue rintcrvcntlon des syndicats ct des groupcs
financiers soit, pour aiasi dire, Tuniquc moycn des pctits
Etats q»ii n'ont pas de marclid national. 11 est certain (pio la
Roumanie, par cxemple, n'a pu effcctucr la conversion de sa
dette 6% que grace an concours de puissantos maisous aux-
(pielles ellc s'est adressde. Ce sontcesderniores (pii pla^-aient
la nouvelle rente tandis quo I'l'^tat remboursait ranciennc.

L'Espagno, lors de la rdcento conversion do ses oniprunts
de I'lle de Cuba, s'est adrc.s.s('e a un groupo de banquiers : ellc
s'entendait avec eux pour Ic prix de la nouvelle rente t\ r.r<;er,
et avec Ic produit du nouvcl cmprunt remboursait des dettes
ancicnues contractdes h plus gros intdret.

Les grands Etats qui ont, presqnc tons, d'importants
marclids financiers no so croient cepondant pas toujours
assez silrs de leurs projjrcs forces pour dddaigner lo concours
des banques et des iustitutions de crddit. Sans cos hautcs
influences, aucuno operation do crddit importantc no pourrait,
sans doute, acqudrir un caracterc international et obtcnir la
pnrticipation des marchds extdrieurs. Aussi toutes les con-
vei'sions opdrdes dans dc largos proportions no ront-ellos dtd
qu'avec la j)articipation des syndicats.

La Ilongric a effectud la conversion dc sa rente G% en rente
4% on or, ct ellc prdi)aro, en cc moment memo, une opdra-
tion du memo genre sur d'autres dettes. lei, les banqiiicrs,
groupds en vuo de cctto transformation, so sont cliargds a la
fois et du jdacomont dc la rente nouvelle et du retrait de
la rente ancicnne. Le remboursement au pair n'est devenu

imai

LES DETTES PUBLIQUES.

467

ohligatoire pour Ics portcura do G% liongrois qu'ii I'issuc do
I'opdration qui s'est effoctuiJo par tractions dchclonndes. La
loi, (jui a fixd los conditions dans lesquollcs cetto conversion
fut autorisdc, <itait con^uc prcsquc dans los memcs tonnes (pic
Ic projct (pic nous formulions noiis-meuK? dOs lo niois d'aout,
1876,' en vue do la conversion (fvcntuello du 6*^ fran(;ais.

En Alloniagnc, Ics conversions do fonds prussiens, bavarols,
ot wurtenibergcois se sont op<5rdes par remission d'eniprunts
dont Ic produit a servi au rembourscment des anciennes
rentes.

A I'dlranger, il nous rcstc i\ citer, au-dcssus de tons, Tcx-
cmplc des Ktats-Unis (pii ont accompli avec unc liabiletd et un
esprit de suite merveilleux des conversions successivcs dans
ics conditions Ics plus heurcuscs et les {)lu8 favorablcs, sans
(jue los particulicru aicnt jamais cu a souffrir des con8(5-
quences do cos fiansformations r(jp('t{^03. Grace i\ la prdvoy-
ance avec laquelle rAm(?riquc du Nord avait cv6C: scs rentes
par B<5rics, des conversions partiellos ont pu so 8ucc<5dcr
ra[)idement ; et Ton a vu en pen d'anni^^^s du (5% se trans-
former en 5%, puis en 4<^, i)nis en .'5f^. Cos op(?ration8
nombreuses, Ics l*;tata-Unis les ont cfl"ectu(-'cs dircctemcnt sur
lours propres marcbes et il rcxtdrieur avec Ic concours do
graudes maisons de ban(iue.

Mais, en dehors acs exemplcs que nous ont donnds les
autrcs nations, nous pourrions rappelor ccux (pic, sous des
formes diverses, nous (mt efforts nos dopartcmcnts fran(;ais et
nos propres villes. Lit encore, nous trouvons des efforts trcis
louables et des combinaisons tres vari<?es. Nous avons vu des
villes recourir au rembourscment au pair d'ancionnes dettes et
a des emprunts plus avantageux pour alk'gcr Icurs cbarges,
les uncs s'adressant au public, les autros s'assurant I'appui de
syndicats, d'autros culin traitant, sans autre intcrmddiairc,
avec Ic Cr<!dit E'oncier de France (pii leur garantissait \ un
taux maximum les capitaux dont ello avaicut besoin pour
rembourscr la dettcant<5rieurecontract<^e ii un taux jtlus ("'lovd.

Nous avous vu enfin, plus pros de nous encore, Ic Cr<5dit
Foncier dc Franco prolitcr, pour son proprc compte, et au

* Voir notre etude ; La Conversion de la Rente 5%. Paris, Dcntu, lidit, 1876.

Ill

'**i||

f !

u-K

,w ■<;

458

ECONOMIC HISTORY.

i I

grand profit do sa vasto clicnWlo d'cmpruntcurs, do I'abaissc-
mcnt du prix do I'argent, ct convcrtir dos ol)ligatiou8 cntral-
nant uno annuitd dlev<!0 i)ar dt's litres n'cxigeant qiruue
annuitd notableincnt infdrieuro. On sait avoc (|nclle simpli-
cit(j s'est elYi!Ctu<5o cetto op<jration : les porteurs dcs obliga-
tions i\ convcrtir avaicnt nn droit do pr(5fdrcncc dans la
souscription dcs obligations nouvoUes ; ils restaicnt lii)re8 de
n'cn pas user, inais dtaient dumcnt avcrtis du rcmbourscmcnt
procliain ct obligatoire dcs titres ancicns.

Ainsi lc9 nations (pii nous cntourcnt ct, chez nous-mcmcrt,
Ics provinces, Ics villos, Ics institutions dc crddit, ont prati(|U(^
avcc cmpresscmcnt ct avcc succcs, sons Ics formes Ics plus
divcrscs, dcs conversions qui, toutcs, ont 6i6 profitablcs. En
cc moment mcme, dc grandes op<)rations do ce genre sont a
prdvoir. II n'cst pas doutcux, en clYct, (juc rAnglctcrrc nc so
prdparc i\ unc nouvellc conversion dc scs Consolidcs dunt Ics
cours sont au-dcssus du pair; des (pic I'occasion sera propice,
la transformation sera faitc. En Italic, la conversion dc la
rente 5% est ^ I'ordrc du jour, ct il nc s'dcoulcra pas bcaucoiiji
dc temps avant qu'ellc nc soit rdalisdo. Ddjii Ic gouverne-
mcnt a prdj)ar6 un projet pour convcrtir plusieurs dcttcs
rachetablcs ct offre du 4i a la i)lacc du Tx^.

II est i^ remaniuer quo toutcs ccs conversions dc rentes, qui
ont diminu(1 I'int^lret \)ny6 par les Etats i\ Icurs prctcurs, n'ont
nuUcmcnt diminud les charges dc ccs divers pays. Pour ctre
juste, d(iuitablc, toute conversion do rentes doit avoir pour
cons(;(pience unc diminution d'impots. 11 n'en a rien <jt<?.
Prenez tons les budgets des pays qui ont cffcctu(; d(?s conver-
sions ; comparcz les chiffros des deponses publi(|ueH et dos
impots j\ ccux (pii dtaient inscrits avant ct nprcs les conver-
sions, vous trouvcrcz partout dcs augmentations de ddpeuscs
et d'impots.

II faut rcmarqiicr, d'autre part, que presquc toutcs ccs
conversions n'ont pu etre rdalisdcs avcc succcs (|u'autant que
la haute bampic est intcrvenuo et leur a donnd son concours.
II convicnt enfin de dire quo toutcs ccs operations ont (-tv
facilitdcs par I'abondancc toujours croissanto dcs capitaux

LES DETTES PUDUQUES.

469

ilisponiblca, ot par la biiisso du taux do riutdrct, consdciuonco
dc cottu abondancu duH capitaux.

■■)!m

IV. — ABAISSEMENT DU TAUX DR LINXfeufcT HV. LARGENT

DEI'UIS 1870.

Dcpuis 1870, ct surtout depuis Ic jour oii, pour la prcmiiirc
fois (Icpuis la guerre, la rente 6% fut cote au pair, e'est-ii-dlrc
il 100, Ic 4 8eptt'ml)re, 1874, de« cliuugenients proluiidrt so wont
])rt)duits sur les niarch<>8 fran^ais et dtrangerH dans Ic taux de
capitalisation. Successivenient, d'annoo on annee, lentenient
(I'abord, puis par <5tapes vigoureuscuient francbies, les valcum
do pieniier ordrc, do preniiorc suretd, doscondiront do 5%
d'intorot a 4J% ; les valours do second ordre, qui rapp«^rtaiont
OA, 7, et 8%, descendiront }\ 0% ot nitMue au-dossous. A
inosurc (jue lo capital dc ces valours augmontait, lour rcvonu
dovonait naturellomcnt nioins {"lovd.

Au lendemain dc la gtUMic, un capital dc 100,000 plac<5 en
ronfos 0% aurait produit .O.SOO a (1.000 fr. de routes. Lo
nionie capital, placd aujourd'hui en rentes fran^-aisos 3% pro-
duirait si peine 3.700 francs.

Hopuia 1870, lo G<^ Ani<;ricain ndisparu; c/)nvortl d'abord
en 5%, puis en 4*}^, Icvoilil maintenant en 3% en attendant
uno nouvelle conversion en 2A.

Lo 4A Holge, les fonds Allonmnds, tols quo les 690 Badols,
Bavarois, Wiirtcmbergcois, etc., out, sur la coto, cede la place
11 dos litres de moindre rapport, ^ dcs rentes dc 3A et do 3"^,
(|iii atteignont Ic pair.

Dans TEurope entiorc, lea rentes 4% (pii ont <?t6 erodes en
reniplaceinont do rentes '>% sont au pair ot memo au-dossus,
ou ont etd dobang^-os contre du ^.^ ou du 3%.

Dos fonds dtrangers, exoti(iuos, comnio Ton dit en Hourse,
arrivent maintenant au taux nioyen aucpiel so n(''gociaient
anciennonient de bons credits euro])oens de second ordrc.
Les cotes anglaises nous donnent i\ cot <?gard, do curicux
c.\eniples.

11 y a dix ans sculcmont, voici, notammont, le 7% Japonais
(pii valait 100 fr. fin 187tl et qui maintenant vaut 113 ; ^

IMAGE EVALUATION
TEST TARGET (MT-3)

1.0

I.I

1.25

ilM IIM
llitt 111^

NO nil 2.0

1.8

U 11.6

PhotDgraphic

Sciences
Corporation

23 WEST MAIN STREET

WEBSTER, N.Y. 14580

(716) 872-4503

^9)

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¥ ^

C/j

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I III'' (

460 ECONOMIC HISTORY.

pareillc date,le 6% Argeutin 1868, cot6 aujourd'hui 101 k 102,
valait 60; le 5% Br(;silicn valait, fin 1876,87 k 88; il est
maintenant a 103, trois points au-dessus du pair.

Le 5% Italien qui nc donne net que 434, valait, fin 1867, 72
fr. : il 6ta\t dans ecs derniers temps h 102 fr. et meme au-
dessus, c'est-a-dire 20 fr. plus cher que le prix auqucl nous
dmettions en 1871 notre rente fran^aise 5%.

Le 5% Roumain, qui valait 40 fr. fin 1876, et qui rapportait
consdquemmcnt 8%, se ndgocie au-dessus de 90. On lvalue
done aujourd'hui le credit de la Roumanie a un taux bien
supdrieur a celui auqucl notre proprc crddit dtait estimd en
1871 et 1872, puisfjue, dans ces deux ann()es, la France
dmettait ses rentes 5% a 82,50 et 84 fr. 50.

La I'cnte Autrichicnne 4<?^ or, cot(ie 89 h 90 fr. et qui, il ya
pen de temps, s'est n(?gocide meme a 96 et 97 fr., est encore
plus haut que nos rentes frangaiscs en 1871. La rente Hon-
groise 4*^ or, a valu jusqu'^ 88 dans ces derniers mois, alors
que nous avons <;mis du 6% frangais 5 ct 6 francs plus bas.

Voici, pour les principaux fonds d'Etats, la difference des
cours cotds au 31 ddcembrc, 1869, et au 31 ddcembre, 1886 : —

31dic.,186!>. 31 dec, 1880.

3%Franvai8 70,05 82,20

4,34 jMlien 57,30 101,85

6%Ammcain 84 134 (le 4%).

4J Beige 102^ 95,40 (le 3%).

5% llusse 1862 85 06

3% Consolides anglais 92| lOlJ

v. — MODES DibMISSION ET TYPES DE RENTES EMPLOYES
PAR LES GOUVERNEMENTS EMPRUNTEURS.

Nous venons de montrcr comment les conversions de rentes
cffoctudcs par les principaux Etats avaient 6t6 rdalisdcs ct
comment la baisse du taux do I'interot et I'abondance dos
capitaux avaient facilit<j ces op(!rations. II n'est pas sans
utilitd de faire remarqucr aussi comment les divers pays
effcctnont leurs emprunts. On voit, d'apros cette dtude
comparative des dettcs europ(;onnes, combien est varide la
divcrsit(j des types de rentes dmiscs. L'Angleterre a du 3%,

" ■III

LES DETTES PUBLIQUES.

461

ui 101 k 102,
^ 88; il est

, fin 1867, 72

et memo au-

auqucl nous

qui rappovtait
0. On <• value
un taux bien
ait cstim<; cu
es, la France

r. et qui, il y a
tr., est encore
La rente Hon-
ers mois, alors
ics plus bas.
diff<3rencc des
smbre, 1886 ; —

, 1880.
2,20
1,85
4

5,40
6
H

(le 4%).
(le 3%).

ES EMPLOYES
EURS.

rsions de rentes

{•td r(<alis(3cs et

Tabondancc dos

n'cst pas sans

cs divers pays

■es cette (5tude

in est vari(}C la

eterre a du 3%,

du 2^%, des aunuit<3S tcrminables ; I'Autriche, du 4.20% md-
talliquc, du 4% or, du 5% papier, du 5% argent, des lots ^
primes sans int(ircts. La Belgique a eu du 4i, du 4% , du 3%.
La Russie a dmis des emprunts sous forme de rentes G%,^%,
4% ; la Hollande a des rentes 3^, 3%, 2i% ; I'ltalie a du 5%,
(In 3%, et vient de d<3crdtcr du 4i% ; la Norwugc a du 4^, du
4%, du 3J% ; le Portugal a du 5% et du 3% ; la Prusse a du 4<>^
et du 3|%; laRouraanic adu7%,du 6%,du 5%; la Saxe, du3^
et du 3% ; la Suede, du 4^%, du 4%, du 3i% ; le Wiirtemberg,
du 4|, du 4%, da 3i%, etc. Parmi les fonds coloniaux, noxis
trouvons du 5% de la Nouvelle Zdlande, du 5% Qudbec, du
6% Queensland, du 4|, 4% et 3|% des Indes, du 4% du Canada,
de la Jamaique, u' Tasmania, du 5%, 4^%, 4% Victoria.
Quel enseignement tirer de ces faits ? C'est qu'on ne pent
dire d'une fa^on absolue, c'est qu'il n'est pas scientifiquement
ni pratiquement prouv<j qu'il soit pr(if<;rab'e pour un Etat do
n'emprunter que sous un meme type de rentes, et que la
diversitd de ces types de rentes pent nuire i\ leur plus-value.
La v^ritd est qu'il en est des Etats comme des particulicrs : Ic
meilleur mode d'emprunt est celui qui coute le moins cher et
procure la plus grande somme des capitaux. II peut etro
utile d'emprunter sous forme d' obligations ou sous forme de
rentes; en 4% ou en 3% ; en 5% ou en 4A%. C'est une
question d'opportunit^ et d'apprdciation. Tous les gouverne-
ments ont choisi la forme d'emprunt la plus avantageuse aux
intdrets de tous, sans s'astreindre h n'dmettre qu'un type de
rentes ddtermind h I'avance.

II en est do meme pour le mode d'dmission des emprunts.
C'esc la France qui, lors de la guerre de Crimdc, gdndralisa le
systeme des souscriptions publiques. Avant 1852 les em-
prunts d'Etat dtaient soumissionnds par de grandes maisons
de banque qui pla9aient ensuite les titres de rentes dans
leur clientele: plus tard, les gouvernements firent appcl
directement aux capitaux du public sans se servir do
I'intermddiaire des banquiers. Cepcndant, des modifications
sdrieuses se sont produites dans le systeme des souscrip-
tions. Nous voyons I'Anglcterre pour ses emprunts coloniaux,
pour ses emprunts de villes, effectuer des appels au crddit

462

ECONOMIC HISTORY.

n ' j?

sous forme d'adjudication publique. Elle offre 4% d'intdret,
par exemple ; elle a'cngaj^e k servir d'abord Ics demandes do
ccux qui se contenteut d'un intdret luoiudre. Co systomo
favorise Ics souscriptcurs les moins exigeants, ne ddcourage
pas Ic public par des mdcomptes imm6rit<js c\ la repartition et
pcnnet a I'cmpruntcur d'obtouir les conditions les plus favor-
ables; ce genre de souscription rend les emprunts moins
ondreux pour les cmprunteurs. Les autres modes d'cmprunts
employes par les gouvcrncraents sont des ventes fermos ou a
option k des banquiers et a des dtablissemcnts dc crddit.
Plusieurs Etats se sont born<Js h charger des maisons de
bauque dY-mcttre les emprunts qu'ils desiraient effectuer,
moyennant unc commission. A Texccption de I'Angleterre
et de la France, presque tons les gouvcrncments europdens
traitcnt encore avec des syndicats de banquiers pour leurs
Amissions.

lis ''

VI. — DE LA REPARTITION DES FONDS PUBLICS STRANGERS
DANS LES PORTEFEUILLES FllANgAIS.

Dans le cours de cette dtude, nous avons essayd de connaftre
le montant approximatif des valeurs dtrangeres appartcnant
k nos nationaux. Les chiffres que nous avons citds nous
ont 6t6 donhds par les ministres des finances et les directcurs
de statistiquc des gouvernements dtrangers ; mais ils auraient
besoin d'etre compldtds, et aucune autoritd ne pourrait mieux
que notre conseil supdrieur do statistique obtenir et grouper
des indications plus nombrcnscs sur co sujct important.

A de rares exceptions pres, et sauf des circonstances particu-
lieres tellcs que la hausse ou la baissc du prix du change sur
<ics valours internationales, les capitalistes fran^ais qui pos-
sbdent des valeurs dtrangorcs ne font pas recevoir le montant
de leurs coupons d'int<;ret il r<;tranger : ils s'adressent a des
banquiers et des dtablisscments de crddit frangais, pour
encaisser leurs coupons dcluis.

Nous sommes convaincus que MM. de Rothschild, la Banque
de Paris, la Soci(5td Gdndrale, le Coniptoir d'Escompte, le
Cr<3dit Lyonnais, le Crddit industriel et tons les banquiers —

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LES DETTES PUBLIQUES.

463

qui paient une patente spdciale comme effectuant des paie-
mcnts de coupons strangers, — r^poudraient sans difficult^s ^
un questionnaire que le Conseil 8up<iricur de statistique leur
adresscrait.

Ce n'cst pas par simple curiositd que des documents
scmblablcs auraient besoin d'etre mis au jour. Les questions
financiercs et fiscales doiveut, plus que jamais, prendre le pas
snr les questions politiques. Or, ce que nos l<;gislateurs et la
plupart de nos hommes politiques connaissent le moins, c'cst
I'exacte situation de la fortune publique de la France, le
montant et la puissance de son dpargne, la nature et le chiffre
de ses placements soit sur des valours fran^aises, soit sur des
valeurs ^trangeres. C'est h. ce d^faut de connaissances qu'il
faut attribuer, pour beaucoup, les erreurs fiscales (jconoraiques
et financieres qui ont ^td commises dans I'dtablissement,
Taugmentation et la suppression de tel ou tel impot de
pr<!ference ^ tel ou tel autre. A une dpoque ou 11 est ques-
tion d'impot sur les rentes, d'impot sur les valeurs dtrangeres
appartenant ^ des Frantjais, d'impOt sur le re. jnu, etc., ces
renseigneraents sont indispensables si Ton veut dviter de dan-
gereuses erreurs. Le Conseil supdrieur ne doit pas hdsiterj a
notre avis, S. faire la lumiere sur ces questions spdciales : c'est
du c8te des statistiques financifires, nous ne saurions trop in-
sister surce point, que doivent porter les efforts et les travaux
des hommes dminents qui font partic de la Commission.

VII. — DE LA COTE ET DE LA NI^GOCIATION DES RENTES
FRANgAISES AUX BOURSES liTRANG^RES.

Nous devons aussi signaler une rdforme que nous avons
bien souvent rdclamde et qui paraitra sans doute utile i\
obtenir quand on se sera rendu cumpte de I'importance des
emprunts Strangers contractus en France. A I'exccption des
fonds allcmands, tous les fonds d'Etat strangers, toutes les
])rincipales valeurs dtrangeres sont cotds h, notre bourse; tous
Ics gouvernements Strangers ont fait appel aux capitaux fran-
qais. Or, aucune de nos rentes fran^aiscs n'est cotde ni c\ Vi-
enne, ni &, Saint-Pdtersbourg, ni ^ Stockolm, ni h. Christiania,

111'

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f ll

H^^^^^H

' nH

U': h

464

ECONOMIC HISTORY.

ni i\ Rome, ni ^ Florence, ni k Madrid, ni h Lisbonne, ni k Ath-
encs. Notre 3% est cotd ^ Londres, I3ruxelle8,ct Amsterdam.
Et c'est tout. Cette situation mdrito qu'on y porte attention.

L'afiluencc des fonds d'Etat Strangers sur Ic marchd
fran^ais, la facility avcc laquellc ils s'y placent et s'y nego-
cient, sont des faits financiers qui rdvelent uno tendance des
capitaux centre laquello il serait peut-etro b. la fois tres
diflicile de tenter uno reaction soudaino et violente.

11 est certainement regrettable que nos nationaux deviennent
les creanciers d'Etats dont la solvabilit() et le crddit sont
douteux. 11 est non moins facheux qu'aux capitaux lente-
ment formds par Ics hommes d'dpargne de notre pays se sub-
stituent des titres strangers ddpourvus de garantie sdrieuse.

Mais, d' autre part, il ne saurait etre mauvais et il est meme
ndcessaire et utile, au point de vue financier et dconomique,
que les nations honnetes et notoirement solvablcs soient
ddbitrices de la notre. 11 ne saurait etre mauvais qu'a un
moment donnd il y ait entrc les mains descapitalistes fran^ais
une certaine quantity de bon papier (jtranger, bicn et dumcnt
garanti, et facilement r(;alisable.

On couQoit cependant qu'il y a un certain <3quilibrc financier
international que ne saurait etre rompu sans inconvenient. On
conceit le pdril qu'il y aurait pour la France a ne compter au
dehors que des ddbiteurs et point do crdanciers, k toujours
absorber le papier et ne jamais en cdder, a so saturer de
valeurs dtrangercs tandis qu'elle ne placcrait point dans les
autres pays une quantity a pcu pres dquivalente de valeurs
fran^aises. On pent enfin mesui'er le danger que notre pays
pourrait courir le jour ou les nations qui nous entourent
gagneraient plus h notre mine qu'a notre prospdrit(3. Memo
au point de vue politique, ces considdrations ne sont pas sans
consistance.

Politiquement, aussi bien quo financierement, il est done
sage et ddsirable d'intdresser I'Europe h nos progres, a notre
ddveloppement national, k notre avenir dconomique.

Un des moyens les p'.is eflicaces d'atteindre ce but est de
placer parmi les capitalistes dtrangers la plus grande quantity
possible de rentes et de valeurs fran^aises.

1-.

LES DETTES PUBLIQUES.

465

b, il est done

Maia, dira-t-on, cette expansion dcs titres fran^ais a'optjrera
naturcllcnicnt, grace ^ la eonfiance si grandc que le credit dc
la France inspire aux autres peuplcs. Si bien qu'il n'y aurait
(pfcl laisscr I'aire au temjjs, aux capitaiix Strangers et a la
sagcsse dcs nations pour assurer uu rcsultat si souhaitable
pour notre avcnir.

Cc raisonncment est d'une logique exccllente, et pent pa-
nutre trcs solidcmont fondd en tli(;orie. 11 est absolumunt
vain, s'il n'cst pas justilic par la pratique. Or, il no Test
mallieurcuscnient pas.

Ce n'cst pas tout de dire aux autres nations : " Moi, France,
j'cmets de la rente, offrant toutes garanties, plcine scriurite.
Prcnez-la ; il n'y a ricn de mcilleur. Vou.s connaissez ma
ricliessc, ma puissance de production, mon amour du travail,
nia probitd rcconnne. Vous savez que j'ai toujours pay(i et
bien payd ; vous savez combien, menie dans les circonstances
les plus critiques, j'ai dte ponctuelle a remplir mes engage-
ments. Prenez de ma rente ! Quels meilleurs titres avez-
vous chez vous ? Quels meilleurs placements ? Quel emploi
plus productif et plus sur?"

Un tel discours n'aurait ricn que de juste ct d'exact. Tout
le monde est pdnetrd de ccs v(;rites et nous n'aurions h, precher
que dcs convertis.

Mais, pour quo Totrangcr prenne beaucoup de nos fonds
d'Etat, encore faut-il qu'il sache ou allcr les prendre, ou aller
les achetcr, et meme ou aller les vendrc, le besoin <jcli(5ant. II
faut les rcndre accessibles a tons les capitalistes de I'Europe,
et ndgociables facilement partout.

Or, e'est ce dont on ne nous parait pas s'ctre suffisamment
occupd.

Comme nous I'avons dit plus haut, nos rentes franqaisos ne
sont pas cotdes aux bourses dtrangorcs. Dans ccs dernieres
anndes, de grands emprunts ont dte effectuds chcz nous notam-
mcnt en rente 3% amortissable. On pent dire qu'i\ riieure
ou nous sommos, cette rente est presque inconnue sur les
grandes places financieres de I'Europe. II y a li\ unc faute
commise, une grave ndgligcnce qu'il taut se hater dc rdparer.
On doit faire pour nos rentes ce que les autres nations font

466

ECONOMIC HISTORY.

Wi \

m \

pour Icurs funds d'liltat qii'clles prcnnent taut do soin do nous
fciii'c connaitro et auqucls ellcs ouvrcnt acces sur tous les
grands marches europdons.

VIII. — GUEllllE, RUINE, OU k6 VOLUTION INDUSTRIELLE ET

i;CONOMIQUE.

Mais cc qui, h. notrc avis, rcssort jusqu'^ I'dvidcnce du tra-
vail auqucl nous nous sommcs livrds, c'cst que I'Europc
cntiere, avec lo poids de sos d(5pcnse8 militaires, avcc la sur-
charge dcs dettes i)ubliques ct d'imputs qui I'dcrascnt, marchc,
si ellc persevere dans cctto voie, ^ la guerre, a la ruinc, a unc
v^jritablc revolution industriellc ct (3conomique. Quel que
soit le pessimisme d'unc telle conclusion, nous ne pouvons
taire nos impressions. La paix de I'Europe n'est, h, vrai dire,
qu'un (jtat de guerre latent, et cette situation qui semblc la
condition ordinaire du vieux continent pese de deux manieres
sur le mondc civilisd : elle lui enleve, d'une pai't, une bonne
partie des capitaux constitues par I'dpargne annuelle, par le
travail de tous, pour cntretcnir dcs soldats, acheter des fusils,
des canons, des munitions, construire des fortercsscs, des
navires ; d'autre part, elle rcmpeclie de se servir de ces capi-
taux unormes pour d<3velopper le commerce, I'industrie, le
matdriel de la production, diminucr les frais g^iu^raux de la
nation. L'apprdhcnsion et les pr^^j.aratifs de guerre devicnnent
aussi nuisibles et aussi couteux que la guerre cUe-memc. Les
finances do I'Europe sont tellcmcnt obdrdes qu'on pent craindre
qu'ellcs ne coiiduisent fatalement les gouvernements a se de-
mandcr si la guerre, avec ses dventualitds terribles, ne doit
pas gtre prdfdrde au maintien d'unc paix prdcaire et couteuse.
Si ce n'cst point ^ la guerre que doivcnt aboutir les prdpara-
tifs militaires et les armements do I'Europe, ce pourrait bien
etre, ainsi que le disait, il y a vingt ans, lord Stanley, k " la
banqueroute des Etats." Si ce n'est ni ^ la guerre ni h, la
ruinc que doivent conduirc de semblables folies, c'cst assurd-
ment &, une revolution industriellc et dconomiquc.

La vieille Europe lutto contre la concurrence de pays jcunes,
riches, produisant ^ meilleur compte. II est, au-delEb de

LEli DETTES PUBLIQUES.

467

TRIELLE ET

rOcdan, uno rdpubliquc puissantc, rAmdrique, qui a su
eteindre unc dcttc que Ics ndcessitds d'unc <?rtindo cause lui
avaiont fait coutracter ; cllc offre au mondc entier le 8j)CctacIo
d'unc prospdritd sans excmplo. Tout rdcounuont, Ic message
du prdsident Cleveland i\ rouvcrture du CongrOs a traduit Ic
sentiment d'un vdritablc cmbarras de richcsses. En Asie,
tous Ics pcuples commenccnt k profiter des ddcouvertes et des
progres quo I'Europe a accomplis, ct comme dans ces pays le
prix de la niain-d'ceuvre ct les charges publiques sont presquc
nuls, I'Europe cutiere dprouvera chaiiue anndo, de plus en
plus, Ics effets do I'apparition sur la scene commerciale et
industi'ielle, de tous ces i)eaples qui n'ont j)as ^ payer, tous Ics
ans, ni quatre milliards ct derai pour les ddpenses de la guerre,
ni plus de cinq milliards pour les intdrets dc Icurs dettes
publiques.

Le mardchal de Moltko disait rdccmment au Reichstag
" qu'a la longue les pcuples ne pourront plus supporter les
charges militaii'cs." II aurait pu ajouter que le jour oii les
pcuples se rendront compte de tout ce (pic Icur coute la guerre,
mome lorsqu'ellc demeure ^ I'dtat de simple risque, lorsqu'ils
considdreront la masse croissante d'intdrets que le progres
jettc chaque jour du cOtd de la paix, les gouvcrnds sauront ce
jour-la dieter lenrs volontds a leurs gouvernants. Les 41
milliards d'augmentation des dettes publiques de I'Europe,
depuis 1870, mis en regard des milliards de diminution de la
dette de I'Amdrique offrent un puissant enseigncmcnt. Non,
les pcuples ne pourront plus h, la longue supporter dc tels
fardcaux ; non, ils ne pourront plus continuur a travailler, ii
peincr, a souffrir, ^ dlevcr pdniblement leurs families pour
(jue leurs biens, Ijurs ressources, leurs dpargnes, les ctrcs qui
Icurs sont chers, soicnt sacrifids et ddtruits i)ar la guerre dans
des luttes gigantcsqucs. lis vculcnt la paix, profiter des
bicnfaits qu'elle procure, dchanger paisiblement leurs produits,
comraerccr, travailler ; ils vculcnt tous unc administration
dconome, des diminutions d'impots.

A CCS ddsirs, les gouvernemcnts rdpondent on augmentant
tous Ics ans les charges militaircs, les prdparatifs de guerre,
Ics charges publiques. '

I V

408

ECONOMl C HIS TOR Y.

Lc8 pcuplcs finirout par se lassor du maintien d'un tel dtat
dc choscs qui nous ramouo atix temps baibarcs : la civilisation
qui a abattu Ics barriercs cntrc Ics pays et Ics individus, rendu
Ics conuniications jilus rapidcs ct plus faciles, dtabli dcs
chemius do for ct dcs routes, crcusc dcs canaux, pcrcd des
uiontagnca et des isthmes, imposcra la paix aux socidtds
modcrncs d'uuc I'uqon aussi irresistible que la guerre s'im-
posait aux sauvagcs et aux societds ancieuncs. — Janvier,
1887.

:'f'

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I'. I >

M;Hii

PROGRESS IN TRADE AND INDUSTRY.

469

XVII.

THE WORLD'S PROGRESS IN TRADE AND
INDUSTRY.

FuoM XKUMANN-SpAi.LAnr'fl " Ueiiersiciiten der WELTwinxn-

SCIIAFT," ' TKANsr.ATEI)* IV THE " JoUKNAL OF THE STATISTICAL

Society," Vol. XLV. ri'. 82-111.

THE latter i)art of the present century liaa witnessed
many changes in the economic and industrial condi-
tions of the majority of the civilized countries of the world.
Industries, arts, and manufactures have accjiiired a remark-
aljle dcvelojiment ; the more striking Avhen avc consider how
rapidly the change has been effected. The i)rogre8S made by
individual States is easily traced by thoir degree of refinement
and a study of their statistics; and from these it will be seen
how quickly this transformation advances. Little less than
a century ago the industries of certain countries and States
were isolated and estranged ; at the present time they are to
a great extent united. It is not so long since that burden-
some restraints Avere placed upon internal intercourse by
reason of ]nono|)olies which were in the hands of guilds and
corporations. Li addition to this, staple rights and traffic
rights, privileges which were granted to certain townships,
had also the effect of restricting the progress of national,
and in a far greater degree of individual, industries and
trades. In some of the central European countries this state
of affairs continued until very recently, and even when the
horizon gradually began to widen among some of the more
erdightened nations, this isolation still continued, though
with n extended boundaries. It was, however, not so much

1 Jahrgang, 1880, Stuttgart. Julius Maier, 1881.

2 The edition of the " Uebcrsichten " for 1887 has necessitated a number
of changes in this translation. — B. R.

470

ECONOMIC III STORY.

ail isolation of town from town as province from province,
and many Kiirojican count rics formed the type of a narrow
niimled policy of seclusion in their economic life. It was
only during the decade from 1JS70 to 18H() that those admin-
istrative reforms wen; introduced whieh had the effect of
causing the whole State to Ix; recognized as a unit in respect
of economii! (pieslions alTecting the entire populatitm. Soon
after this important epoch in tlie history of economic pro-
gress, people hecamc more sensible of the pressing n(>e(l that
existed of freeing commerce throughout the huid from the
burdensome restraints which had hitherto fettereil it. As
soon as the political horizon began to clear, the Cierman States
banded together and formed the Zollvcrein. CJreat Britain
then proceeded to al»olish protective tarilTs; the continental
States also, after a little time, reduced the existing high
duties, repealed the guild and corporation laws, which until
then had so jiaralyzed trade, and endeavored to ent(!r into a
species of jiolitical trades nnion with each other. It was
not hmg before the Eurojjean CJovernments, following the
example set them by England and I'^-ance in 18(50, concluded
a series of international conunercial treaties, l»y which they
reciprocally guaranteed to each otlier "most favored" treat-
ment; and the snbse(pient modifications of the treaties thus
contracted in the period 18(50-(»8 wei-e generally in a favor-
able direction, and tended to minimize the domain of cus-
toms' exclusion.

After the expiration of the treaty-period in 1877 we enter
again upon a time of economic retrogression. The treaties
during later years were not collectively renewed, and although
in some cases t^ic duties ha<l been raised, yet there was no
actual return to the old system of restrictive and i)rohibitive
tariffs. The force of circumstances imperatively demands that
commercial relations shonld remain tmdistnrbed, and not suf-
fer from restraints placed upon free importation into the re-
spective coimtries. In connection with the close economic
combinations of all civilized nations, there has in our time
been an increasing effort to attain a similarity of conditions
Avith reference to industry, justice, and administration. The

pRoannss ix tiiade and industry.

471

unity <»r the inuHt eomplox Stiito relationships depends on the
(M)nt('nts of numerous economic treiities. At first in f»ermany,
and afterward in certain other European States, railroail or-
ji^nnizations were formed. Hy means of these enterprises
goods and personal projierty were transported throuirhout the
whole len<>;th and i>readth tjf the land. Even in a far ^'reater
decree than railways, have the postal and telejj;raphie systems
been the means of unitinir not only the iState l)ut the entire
world, and of mal<inir people of all nations neiuhltors in spite
of disianee. Tiie world's postal union, which extends neaidy
1,:]00,000 Sijuare miles, and unites approximately 7(!<) mil-
lions of peo})le, is one of the hajjpiest results of the develop-
nii-nt of commercial industries. In the same way, in IHii'),
tlio first steps were taken to establish an international tele-
grajihic union, and the results in 18S0 went far to prove that
this union had been the means of breakinfj; down the barriers
of international commercial intercourse. Railway c(m-
grcsses, assemblies of a thorouu;hly cosmopolitan character,
the postal c<inii;reas, and the international teleijraphie confer-
ence,— all enjoying otlicial authority, — have been the means
of extending still further commercial relations. What they
accom])lish in the region of intellectual and material culture
is recorded in golden characters in the history of the world.
They have proved, in a far greater degree than was antici-
pated, the means of promoting still furthci* advancement in
the economic conditions of the world. To them we owe the
unity of the weights and measures on the basis of the metri-
cal system, the international system of goods transjjortation,
and the adoption by entire groups of States of the same
monetary standard, of which we have an exami)le, first, in
the Austro-German monetary c(mference, then in tlie con-
ference of 18(55, known as the Great Latin Conference, and
lastly in the Scandinavian monetary union. The adoption
of a complete international system of weights and measures
is a question the settlement of which cannot be long de-
ferred; the only point ujion which controversy is likely to
arise is the settlement of the basis which is to be taken.
There has already been established a similarity in the inter-

V- 1

r; hi

472

ECONOMIC HISTORY.

national laws of banking and exchange. This has been the
means of affordinp^ greater security for the protection of in-
ternational rights, and given also an impetus to the distri-
bution of capital. As may be easily credited, at no period
of the world's history has there been a time when the rapid
circulation of capital between one nation and another has
been more easily and expeditiously effected than at present.
The movement of milliards now occasions no surprise, and it
is pei'fectly consistent that in the case of English or French
capital which circulate?, in Austria, Germany, Russia,
Egypt, or in South America, or Asiatic countries, any ex-
cess or deficiency may be provided for by credit drawn on
Europe, in America, or India. Thus in the same way all
commercial enterprises combine to assist in the development
of cosmopolitan economy, — railways, posts, and telegraphs
being the outward sign of this union. With these goes hand
in hand the division of labor which conveys the production
of the masses to its proper place in the world. With the
ever-increasing masses, the necessity of the world's produc-
tion being considerably extended becomes a matter of the
first importance, and there are now no barriers sufficiently
strono: to resist this universal demand. Administrative in-
stitutions must be so adapted that this century's legislation
may be fixed on a firm and lasting basis.

International relations have had the effect of creating a new
order of life, in which the industries of individual States,
without detriment to their independence or individuality,
must perform their share of the functions of the whole, of
which they constitute a unit. The part then which in the
world's economy is taken by individual States is of the
greatest value ; and though the present economic conditions
of the world are not yet fully developed, they are sufficiently
advanced to enable us to form an idea of their ultimate im-
portance. Wonderful progress has been already made, and
even if it be found that the improvements which have so far
manifested themselves in these economic conditions will not
be further advanced by the present generation, still there can
be no question as to the excellent results of which they have

I'l'Vi'.js;

PROGRESS IN TRADE AND INDUSTRY.

473

already been productive. In all parts of the civilized world
the growth of capital has made rapid progress, and even
during the commercial crisis of 1873, and the consequent
depression, this progress, though certainly interrupted, was
not wholly checked. It again received a powerful impulse
in 1880-82, and has by no means come to a standstill in the
relatively unfavorable years 1883-85. Adequate employment
for these accumulated millions has been possible in large
economic undertakings. Thus, for instance, Avhen sufficient
jirofit was not obtainable in Europe by reason of a fall in the
rates of interest, capital was diverted into other channels,
and employed in foreign investments in far distant countries,
which, though remote, yet offer a fair field for investment.
In this manner inventions and enterprise have been univer-
sally stimulated.

All these considerations lead us confidently to predict that
though there may be interruptions and checks to the ever
increasing progress in the improvements of the world's
economic conditions, these interruptions are of a purely
temporary character, and must eventually be overcome. In-
dustries and commerce which have advanced with such rapid
strides, and the vast amount of labor and capital which have
been expended upon railroads, shipping, telegraphs, etc.,
have all given an impetus to the world's progress, and can-
not fail to make a lasting impression upon it.

In order thoroughly to appreciate the changes which the
world's economic conditions have experienced under the dif-
ferent natural political and social influences, as well as to
estimate the reaction caused by crises, or periods of specu-
lation, favorable or unfavoral)lc harvests, wars, or revolu-
tions, protection or free trade, an '. other important factors in
determining the national prosperity, it will be necessary to
arrange a broad and comprehensive system of statistics ex-
tending over a lengthened period. Wc have to deal with
snch a mass of complex individual elements, that only the
consideration of the most important will lead us to any logi-
cal deduction. Social economy, commercial policy, finance,
changes of administration, as also the specific influences of

bii

1' : ii

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474

ECONOMIC HISTORY.

good or bad years, must be taken into account. In the in-
vestigation of a subject so complicated as the present, we
must be satisfied with very crude information, and as it is im-
possible to obtain accurate and reliable data, we are obliged
to depend in a very great measure upon inference and deduc-
tion. As a means of approximately estimating the extent of
increase or decrease in material prosperity, it is advisable to
take as a basis for the calculation, the income-tax returns,
affording as they do a certain indication of the position of
national wealth.

Among the nations which have contributed so enormously to
increase the world's prosperity, Great Britain takes the fore-
most place, the growth of her national capital having since the
commencement of the present century made very rapid strides.
A reference to the income-tax returns will show how great
this annual increase has been. Mr. Dudley Baxter gives the
income for the year 1814-15 as 146 millions sterling (accord-
ing to the income-tax assessments) ; in 1843 it amounted to
251 millions, while in 1865 it rose to 396 millions, and in
1875 to 571 millions ; and according to the estimates formed
by one of the most distinguished statisticians, Mr. Robert
Giffen, the national wealth of Great Britain, which in 1865
amoimted to 6,113 millions, rose in 1875 to 8,548 millions;
thus exhibiting for the decennial period an increase of 2,435
million sterling. Latterly, on account of the general depres-
sion which has prevailed, the annual increase of wealth is
estimated only at 90 millions. Thus the progress for the en-
tire period may be presented in the following statements : —

Years.

1800
1840
18fi0
1876
1880

Authority.

Reck and Pultcney
Porter ....
Leone Levi . . .
Giffen

National Wealth.

£1,800,000,000

4,000,000,000

0,000,000,000

8,550,000,000

about 9,000,000,000

And it will be readily conceded that the latter figures are
rather under than over estimated, when we consider the fact
that the amount of British capital invested in Government

PROGRESS IN TRADE AND INDUSTRY.

475

3> 4 ssili

> , ' T!

18, Mr. Robert

National Wealth.

securities and different companies, in railway and other in-
dustrial enterprises, is estimated by Mr. Giffen, in his paper
on the accumulation of capital in the United Kingdom, at
2,788 millions, and by the "Banker's Magazine" (March,
1881) at 3,465 millions. According to the income-tax re-
turns, the exempted incomes in 1845 were at the rate of £7,
in 1855 £11, and in 1875 <£17 per head. According to the
most recent calculations (1884), however, the amount is esti-
mated at about .£36 per head of the community. Tliese
figures will show at what an extraordinary rate the wealth
of the country is increasing, and we may repeat that the
estimates are rather below than above the mark.

As regards the progress of the national wealth in France,
it appears from the examination of the data that the accumu-
lation of capital has increased in the period 1848-71 from
50 to 60 per cent. M. L. Wolowski estimated the national
wealth in 1871 at 150 to 200 milliards of francs, of which
120 milliards consisted of property in land and houses, so
that tliis latter description of property has absorbed since
1851 about 20 milliards, or yearly one milliard of francs.
This view of the natimial prosperity of France has also been
taken by M. de Fovillc, after a critical examination of the
estimates formed by M. Block, S. Mony, A. Amclin, Vacher,
and other well-known writers. He estimates the national
wealth, after the loss of Alsace and Lorraine, at from 200
to 216 milliards of francs; these estimates arc also forti-
fied by the authority of Fehler, who agrees in the main with
De Fovillo as regards the increase in the accumulation of
wealth, which may be estimated at 1,500 millions of francs
yearly.

There arc so many insurmountable difficulties in the way
of approximately estimating the increase in the national
wealth of German}, that a com|)arative statement is almost
out of the question. The many political, administrative, and
territorial changes which of late years have taken place, ren-
der it almost impossilile to produce a comparison between
its present position and that of earlier years ; an idea, how-
ever, maybe formed of the great progress made by this nation

f •

• ly-

-■ii i

476

ECONOMIC HISTORY.

by a study of the value of the exports, which increased from
1,060 million marks in the year 1850 to 6,554 million marks
in 1884. Another method of arriving at an approximate idea
of the increase of public wealth is to take the amount of duties
levied on all steam industries. Dr. Engel computes the actual
assessed capital in the German Empire employed in these
industries at 11,104 million of marks. Dr. Soetbcer, in his
valuable work on the extent and distribution of wealth, though
taking a somewhat pessimistic view of the situation, states
that in the kingdom of Prussia alone during the period
1872-78 — a period of industrial stagnation — there was
found to be a sensible increase in the national wealth, as
the following table will show: —

Tears.

1872
187a
1874
1875
1876
1877
1878

National Income,

Per Head of
Population.

Marks.

6,969,000,000

293

7,195,000,000

299

7,532,000,000

807

7,628,000.000

311

7,857,000,000

.316

7,992,000,000
8,069,000,000

315

323

As an indication of the increase of national income, if we
estimate it simply from the "income-tax assessments, it will
1)0 seen that the tax-paying income, which amor.nted in 1854
to 302 million marks, rose in 1878 to 957 millions, — an in-
crease of 300 per cent. It is evident, therefore, from an
examination of Soctbeer's that there has been a very consid-
erable increase in the national wealth of Prussia.

The remaining western European countries also afford
valual)le materials for researches into the question of the
growth of economic power. Thus in the ease of Austro-
Ilungar)', C. von Czoernig, basing his calculations upon
various statistical returns, estimates roughly the income
derivable from land, mining, and other industries in 1859
at about 3,360 million florins; an unofficial publication
issued in 1868 estimates it at 4,300 millions ; and the

PROGRESS IN TRADE AND INDUSTRY.

477

Per Head of

Population.

Mnrlu.

2!t3

299

807

811

»0

316

315

323

figures for the year 1874, taking the very lowest estimate,
may be reckoned at from 5,500 to 6,000 million florins.
M. Falbe Hansen is of opinion that the national wealth of
Denmark amounted in 1873 to 2 million reichthalers, and
M. Massalski estimates that of Belgiunx at 29 milliard
francs; and as regards Sweden, it appears from a work
which has been issued by an anonymous statistician, who
has evidently devoted much care and attention to the subject,
that its national wealth in the year 1876 amounted to four
and one half milliards kroners, or five milliards marks.

Still more interesting than this review of Europe is a study
of the remarkable progress which has been made in the eco-
nomic conditions of the United States. This country pos-
sesses the data of regular valuations at every census, and
from them we find that in 1790 the wealth of the then three
millions of inhabitants was estimated at 1750,000,000 or an
average of $187 to each person. The decennial increase since
that date is shown in the following table : —

Year.

1700.
1800.
1810.
1820.
1830 .
1840.
1860.
1860.
1870.
1880.

Population.

3,929,827

5,305,037

7,239,814

9,638,191

12,800,020

17,0(59,453

23,191,876

31,500,000

38,558,000

60,166,783

Wealth.

$750,000,000

1,072,000,000

1,500,000,000

1,882,000,000

2,058,000,000

3,704,000,000

7,136,000,000

16,159,000.000

30,009,000,000

43,042,000,000

Decennial

Percentage

Percentjige

Increase of

Population.

Wealth.

Per cept.

Per cent.

3502

43 00

36-43

3000

3313

25-40

33-4C

4100

3267

41-70

85'87

80-60

3559

126-42

22 00

86-13

3000

4500

Average

Property to

each

Person.

202
207
195
206
220
307
614
780
870

Here also the progress of national wealth, as in England,
was very slow prior to the year 1840, after which a much
more rapid increase was made. The remarkable difference
between the figures of 1850 and 1860 is attributed in the
census-volume itself to an undervaluation for the year 1850.
It is, however, affirmed that a sufficient improvement in sta-
tistical methods has taken place since 1860 to permit of a

■■ Si

•: m

l!* i i

478

ECONOMIC HISTORY.

correct comparison of the figures of that year with those of
1870 and 1880, and to establish statistically a rapid growth,
particularly in the decade from 18G0 to 1870. Especially in
1880 was an exact and comprehensive method employed in
order to ensure the greatest possible accuracy. The com-
parative slowness in the increase of wealth from 1870 to 1880
is explained by the census commissioner by two considera-
tions. In the first place the valuation in 1870 was made
upon the basis of a depreciated currency, but in 1880 upon
a gold basis ; and in the second place there has been an in-
creasing tendency of personal property to escape assessment.
In any event the depression in the years 1874 to 1879 has
also exerted an appreciable influence.

The aggregate of the national wfealth for 1880 is made up
from the following particular valuations : —

itim. Doll.

Farms 10,197

Ilesideuces and business real-estate, including water-
power 9,881

Railroads and equipment 5,536

Telegraphs, shipping, and canals 419

Live stock, farniing-tools, and machinery .... 2,406
Household furniture, paintings, jewelry, books, etc. . 5,000
Mines and quarries, together with ^ the annual pro-
duct 781

Three-quarters of the annual product of agriculture
and manufacture and of the annual importation of

foreign goods 6,100

Churches, schools, asylums, public buildings . . 2,000

Specie 612

Miscellaneous items, including tools of mechanics . 650

Total 43,642

In this summary of national wealth, which appears not to
have been based upon the assessed valuation of property, as
that amounted only to $16,903,000,000, but upon 25,000
replies to inquiries and upon numerous local estimates, the
public debt of the Union has not been taken into considera-
tion, although it is chargeable in some manner to the total
national wealth pro rata parte ; but allowance has been made

PROGRESS IN TRADE AND INDUSTRY.

479

for private indebtedness, the debts of the various States,
corporations, insurance companies, mortgages, etc. The cor-
rectness of the data has, however, been established with
greater accuracy as regards the details, and under any cir-
cumstance we have here to do with one of the most inter-
esting direct valuations of modern times.

For the completion of the foregoing data concerning the
national wealth of the United States certain figures from the
annual reports of the Treasury Department will serve, as they
likewise tend to show both the rapid increase of national
prosperity in recent years and in particular the remarkable
lluctuations since 1879.

[MiUioDB omitted.]

For Fisoal Years Ending
30th June.

Ordinary national rev-
enue

Ordinary national ex-
penditure (exclu-
sive of sinking fund
and interest on
debt)

Net public debt . .

Interest on public
debt

1875.

1880.

1881.

1882.

1883.

284-0

333-5

360-8

403-6

398-3

171-5
2,128-7

109-1
1,942-2

177-1
1,840-0

186-9
1,088-9

206-2
1,6511

103-1

95-8

82-5

50-2

1884.

348-5

189-5
1,4500

54-6

It would be impossible to find in the financial position of
any other State such striking evidence of the increase of
national wealth as is discernible in the above figures.

The figures which we have already quoted will be sufficient
to convince every one of the very remarkable universal in-
crease which has taken place in national wealth during the
latter part of the present century, both incomes and capital
having increased in a much more noticeable degree during
this period than in any other. We will therefore proceed to
a statement of the causes which have contributed to this
vast increase of wealth, — and this is a subject which cannot
be dismissed in a few words, but requires, in order to make
it thoroughly clear and comprehensive, to be dealt with some-
what e.xhaustivel}'. It will here, however, be practicable only

U ii -

",'«*?'•

480

ECONOMIC HISTORY.

to enumerate in aa clear and concise a manner as possible
what have been the most important factors in determining
this remarkable development of national wealth. One of the
chief points to be considered is the influence exercised on the
economic conditions of the world by the introduction of
machinery and its substitution for manual labor, which is
one of the growths of the present century. The importance of
the wonderful inventions and improvements which have taken
place is visible in the effect which they liave had upon the in-
crease of capital invested in machinery, and which as an in-
vestment has far exceeded in profit that employed in manual
labor. Then too the application of steam, which has Avrought
so complete a change in locomotion must be recognized. As
an indication of the vast amount of the world's capital which
is invested in steam undertakings, we may mention that Dr.
Engel, in one of his interesting publications, estimates the
capital so invested, in round numbers, at 133 milliard marks,
distributed as follows: eighty milliards in railways, forty
milliards in various steam undertakings, five milliards in
sea-going steamships, and the remainder in river steamers.
The part, then, taken by steam as a motive power, and the
introduction of machinery in the improvement of the eco-
nomic conditions of the world, are of the very greatest impor-
tance. These inventions have been the means of causing a
very large increase in the accumulation of national, and in a
corresponding degree of the world's wealth. Another impor-
tant element to which we must direct attention is the devel-
opment of the credit S3'stem, which has in all civilized parts
of the world taken place during the last twenty-five years.
This does not necessarily produce fresh capital, but it has
the effect of facilitating the better application of capital
which is anywhere disposable; floating capital is collected
and is brought into more permanent forms of investment.
Deposit banks, savings banks, and credit institutions, and
above all the general employment of bills of exchange, which
have now become universally adopted, have all been the
means of supplying what was in earlier years a want much
felt, and have become important factors in determining the

^"^■"•w^

t; '.'1

1 I

PROGRESS IN TRADE AND INDUSTRY.

481

augmentation of capital. Tho judiciouB operations of bank-
ing are mainly instrumental in rendering capital active and
productive. It will be seen by reference to the international
savings bank statistics, published by the Italian Statistical
Bureau in 1876, how vast the operations of savings banks
were. From this work it appears that although these insti-
tutions were only established some forty or fifty years ago,
yet in the year 1875 in Europe alone about 6,400,000,000
,marks, and in the United States about 3,500,000,000 marks,
making in round numbers a total of 10 milliard marks, had
been invested. This is a sufficient indication of the influence
exercised over the accumulation of capital by other and simi-
lar institutions, and tends to show how by this credit system
activity and usefulness have been given to accumulations
which without these benefits would have become mere hoards.
And lastly, we come to the question of the maintenance of
the working population; and here we cannot lay too much
stress upon the necessity which exists of increasing and
maintaining a national working population, this population
in itself representing so much living capital.

We will now turn to another method of estimating wealth,
namely, an attempt to determine the economic condition of a
country during a fixed period of time. This is a labor analo-
gous to that which the science of meteorology has to set
before itself in determining the peculiarities of weather in a
certain neighborhood. As climate depends on a great com-
plexity of individual elements, so what we call the world's
economy is the result of various factors, which act upon tho
material processes of life in a given population with greater or
less power. In both cases, in the statistics of meteorology and
economy, a similar analytical examination of the causes of a
total impression have to be the object of investigation ; but
while meteorology deals with actual elements or factors of tho
present, such as atmospheric pressure, temperature, humidity,
direction and force of wind, etc., while it possesses exact
measuring instruments for the determination of these, and
finally can supply itself with an endless series of exact obser-
vations, economic statistics must be satisfied with surrogates

^,\^ i>)l

m i J,

-*r

482

ECONOMIC HISTORY.

of the methods of natural science. In order to calculate upon
the real clcnienls of economic conditions when frequently re-
maining concealed, our investigation must often be satisfied
with such appearances as lie upon the surface, and which in
their nature are merely symptoms, and actually have them-
selves no ultimate effect on the sources and action of things.
Besides this, even these symptoms cannot in the real signifi-
cance of the word be measured or exactly expressed, but only
individually employed for computations and numerical com-
parisons. And finally, the same i)rimary causes in the mate-
rial life of culture have not the same effects among all nations
and at all times. Thus even if we are able to point to more
than mere symptoms, we shall have to be careful in forming
our conclusions, and cannot afl'ord to overlook that almost
all such results must in their very nature be empirical, that
is to say, must depend upon laws which are only binding
upon the given circumstances of space and time, and in no
way permit us to generalize. The desired object, though
comparatively limited, is nevertheless a difficult one to
attain ; it presents an array of operations which as regards
physical science are superfluous, but are here indispensable.
One of these operations consists in the choice of the most
important, and of a study of the remainder of the accessible
symptoms of the ec(momic situaticm which are capable of
being estimated. The symptoms, then, of the world's econ-
omy will be dealt with in the following pages. Another,
which is an exact operation of measurement, consists, accord-
ing to our theor}', in the endeavor to deduce the type or nor-
mal course of the groups of facts or observations chosen as
symptoms of the economic situation, which embrace definite
periods. The esta))lishment of the typo will result in many
cases in the choice of normal years as the point of compari-
son, and of the mean, in many other cases, by choosing the
commenccmont or the end of the series, and taking the
average of an entire period as the mean.

There is scarcely any period which has been so character-
ized by a series of powerful reactions as that comprised be-
tween the years 1870-85. From 1870 until the middle of

PROGRESS IN TRADE AND INDUSTRY.

483

1873 almost everywhere the progress of economic life could
bo clearly traced, and this was a period marked by a eom-
men'ial crisis which made itself universally felt. There
followed then a tinu! of depression lasting until the year
1870, when a reacticm set in. This revival was experienced
in the United States about the end of 1879, and at the com-
mencement of 1880 was felt in the countries of western
Eurojte, (Jreat Britain, the Netherlands, Belgium, Franco,
and Oermnny. The effects of this reaction were somewhat
slow in miiuii't'sting themselves in European countries, those
first ex])eri('ncing them being Holland, England, Belgium,
and France, while the German States, Italy and Austro-
Hungary were amcmg the last. It will be impossible in a
work of this description to pursue a complete analytical in-
vestigation into all the symptoms which are likely to afford
any indication of the position of economic progress. These
symptoms must be considered in groups, which we shall
classify as follows, — jtrimary symptoms, secondary symp-
toms, and reflective symptimis.

Under primary symptoms we proceed first to deal with the
question of the extent of production. There is no more re-
liable basis on which to determine the real economic condi-
tiim during a fixed period of time than that which lies in the
activity manifested in producing power; but in considering
this subject we must not lose sight of the fact that great dis-
crimination is necessary to distinguish between the relative
importance of these symptoms of increased production. For
instance, we must in(piire whether that particular branch of
industry in which such expansion is visible affects articles
which arc liable to extremes of activity and depression, and
whether by this the decline of great industries is regulated;
and again we must satisfy ourselves to what extent the im-
provements or the reverse are affected by the prevailing con-
(liticms of administration or government. As affording a
certain indicati(m of the positicm of economic progress, we
will take the case of mining industries. Activity, or stag-
nation here are certain symptoms of favorable or unfavorable
position. On the other hand, if we take the case of harvests

'til

^%\M

f i i

Ji''

if «

f»':^'l

484

ECONOMIC HISTORY.

and the wheat productions of good and bad years, as these
are affected l»y the weather, and arc entirely dependent for
their alxnKhiiice upon the rain and smi in due season, they
have only a (;a.siuil, and not what we should call a sympto-
matic character.

Let us now draw our deductions fi'om the symptoms as
nuiuilVsted in the extent of production durinjj; the period
1870-85. All of the more important industries of the world
experienced from 1870 to 1873 a wond«!rful extension, and
as affecting the world's prosjM'rity, this may be regarded
as a token of the most favorable ecimomic conditi(ms. Wo
will take as an example the enormous increase in cotton
industries and in mines and iron works. As regards the
former, the number of spindles and looms have everywhere
increased very considerably, and the (juantity of yarn and
woven goods exported from England, which amounted in
1870 to 1)42 million pounds, rose in 1873 to 1,078 millions.
The value of cotton gcjoiis in the same period increased from
ninety-three millions sterling to 104 millions, — similar
symptoms arc everywhere visible in the industries of the
world for the same period. As regards iron works, there
was a considerable increase in the number of furnaces set
up, and the total production of ])ig ir<m in the world rose
from twelve million tons in 1870 to nearly fifteen millions
in 1873. Everything during this period in fact tended to
prove that the world's prosperity was making very rapid
strides. A change, however, was wrought by the commer-
cial crisis of 1873, and the effect of this crisis was to para-
lyze both the textile and iron industries, the statistics of the
amount of jiroduction in each case showing a gradual but
steady diminutitm. In the chief centres of the iron industry
there were, at the end of 1876, 2,537 furnaces in existence,
which were approximately capable of producing at the lowest
estimate twenty million tons of iron; there were, however,
but 1,329 of these furnaces at work, while 1,208 were at a
standstill, and the quantity of iron produced amounted to
only 280 million centners.

Again in 1878 we have very good authority for stating that

■-■! I?

PROGRESS IN ThADE AND INDUSTRY.

485

(ars, as thcso
Icpoiidont for
• season, they
ill a sympto-

symptoms as
ijr the period
s of the world
xtension, and

be regarded
iditions. Wo
[ISO in cotton
s regards the
vc cvcrywhero

of varn and

amounted in
,078 niillions.
ncrcascd from
ms, — similar
ustrics of tho
L works, there
f furnaces set
ho world rose
iftcen millions
fact tended to
ig very rapid

the commcr-
is was to para-
tatistics of the

a gradual but

iron industry
3 in existence,
g at the lowest
ivcre, however,

,"208 were at a
i amounted to

or stating that

it was a time of almost universal depression. To dvnionstratc
this more clearly, w<! will take tho case of the most impor-
tant of the great industries, namely, the cotton industries,
which in (Ireat Britain, under favorable circumstnnces, give
employment to some four millions of people.* In the years
1870 and 1877, though there were large sales owing to a great
amount of stock having accumulated, tho prices obtained
were considerably below tho market value. In 1878 there
set in a complete cotton crisis, and the effects of this were
more severe than any which had been experii-ntied by the
preceding generation. In the more lirmly established houses
tho hours of labor were shortimed, while in others business
was entirely suspended, and there ensued a period of de-
pression, not only as regards Kngland, but in fact the whole
world, imparallelcd in commercial history. According to
Ellison's cotton reports the dejjression reached its climax
during the first three months of 1871), when there was appar-
ent an indication of a grand revival of trade. The same
features which characterized the cotton trade wore apparent
in woollen, silk, and linen industries, — the depression in
the two latter being more marked than in the former.

It was only in tho latter part of 1879 and in the beginning
of 1880 that a marked improvement was to bo seen in most
of the important industries. It was particularly noticeable
in tho coal trade, tho increase in the production of which in
Great Britain, Germany, France, Belgium, and more espe-
cially in America (from fifty-two million tons in 1878 to sixty-
nine millions in 1880), may be assuredly taken as a certain
indication of a steady improvement in the world's economic
conditions. Soon afterwards, in the autumn of 1879, a stim-
ulus was given to the production of iron in America, followed
in a few months by renewed activity in tho iron industries
of Great Britain and most of the European countries. The
fires which had been for some time extinguished were once
more kindled, and the production of iron increased in one
year at the rate of between twelve and twenty-one per cent.
There was also renewed activity in the smelting and puddling

' This seems a great over-estimate. — Editor of "Journal."

I' nt'

.".-

1-.

486

ECONOMIC HISTORY.

works, and in fact towards the end of 1880 there was not
only a marked but a widespread improvement of trade. The
cotton industries of the world particularly exhibited signs
of revival, and this may be accepted as a certain symptom of
an amelioration of the economic position. Taking the case
of spun yarn, the weekly production, which in Great Britain
amounted in the year 1878-79 to 50,026 pounds, and on the
Continent to 47,352 pounds, rose in 1879-80 to 58,038 and
50,344 pounds respectively, thus showing an increase in this
one article of 572,200 pounds, or nearly twelve per cent in
this year alone. The other branches of textile industries did
not in the same degree exhibit such an improvement, yet it
was evident that toward the close of 1880 unmistakable signs
of revival were not wanting. This revival continued during
the years 1881-82, but was not however destined to be per-
manent. The ca))acity of the markets of the world was
everywhere overestimated, and the extent of production in
the principal industries soon exceeded the demand. Al-
though in 1883 an extension in some of the branches of pro-
duction was still noticeable, yet the prices of the various
products had commenced to decline. During the years 1884-
85 the decline in the ])roduction of all the industries to which
we have here called attention was most clearly marked ; and
as these industries comprise three-quarters of the value of
the entire production of the world, depression or activity in
them forms an excellent indication of the actual prosperity
of the world.

Again, the extent of consumption is of symptomatic im-
portance in regard to the condition of national wealth.
The increase or decrease in the consumption of articles
which may be termed necessaries, such as breadstuffs, provi-
sions, and clothing, are not such reliable signs of an im-
provement or the i-everse in national prosperity as the same
fluctuations which may be observed in those articles which
are not indis])ensablc to man, and come under the heading of
luxuries, as it is obvious that in a time of depression there
would be a far more restricted consumption in the latter than
would be found if trade and industries were flourishing and

PROGRESS IN TRADE AND INDUS J RV.

487

there was not
>f trade. The
chibited signs
in symptom of
Liking the case
Great Britain
ds, and on the
to 58,038 and
iicrease in this
vc per cent in
industries did
)vcment, yet it
istaltable signs
iitinued during
ned to be per-
the world was
production in
demand. Al-
ranches of pro-
of the various
he years 1884-
istries to which
y mai'ked ; and
)f the value of
1 or activity in
tual prosperity

mptomatic im-
itional wealth,
ion of articles
adstuffs, provi-
igns of an im-
■ity as the same
articles which
the heading of
i'pression there
the latter than
flourishing and

prosperous. Although the data arc of a somewhat meagre
description, we will again take the period of 1870-85 in
which to form our conclusions as to the position of national
wealth, judging from the extent of consumption. If we look
first at the consumption of coffee, tea, sugar, and tobacco,
it would appear that the same indications are shown of
material prosperity during the i)eriod of 1870-73, and that
the effect of the commercial depression which followed this
period did not so seriously affect the national wealth as
might have been expected, the consumption being certainly
to some extent limited, but in most countri.L. only in a very
slight degree. From 1878 to the end of 1879 seems to have
been the most unfavorable time of the whole period. On
the other hand, in the year 1880 a revival is perceptible
throughout the economic world, which continued with vigor
during the years 1881-82, and was again checked in the years
1883-84. As an example of the consumption of coffee, the
supply received in Europe in 1871 amounted to 2.47 million
centners, in 1875 to 3.30 millions, but in 1880 it fell as low
as 2.74 million centners. From 1880 the consumption stead-
ily increased until 1883, when it reached 4.39 million cent-
ners. It then again declined to 4. 09 million centners in 1884,
and to 4.31 in 1885. The great increase in the consumption
of tea in 1870-74 was almost imiversal; it was only in 1878-
79 that the consumption was first checked ; and in the years
1880-83 it again distinctly increased. The same may be said
as regards tobacco. A study of those articles in individual
countries also reveals similar economic indications. In
America, for instance, in the fiscal year 1879-80 the quan-
tity of coffee imported amounted to sixty-nine million pounds,
or 1.4 pounds per head of the community; that of tea to
twelve million pounds, or 0.25 pounds per head; tobacco
leaf to three millions ; wine 6,394 million gallons and
1,303,356 bottles; and the American peoj^e retained in this
year for hon^o consumption about 130 million pounds more
of refined sugar than they had done in previous years. In
England, though this was a favorable year, yet the increase
in luxuries was small, only cocoa, wine, and tobacco being

. I!l

''^ -t

M
mi

;/ ■■?:■.

!|i

488

ECONOMIC HISTORY.

consumed in greater quantities, whereas there was a decrease
in tea, coffee, and sugar. An examination, however, of the
return of taxes for the last nine mouths of the year 1880
point conchisively to the fact that tlie economic position was
substantially ameliorated. In France the signs of increas-
ing prosperity were more apparent than in England, a very
considerable augmentation in the imports of coffee, sugar,
and tea being perceptible in 1880, and although this year
was not a very favorable one as regards the wine production,
yet as a set-off against this there were in 1880, 852,000
hectolitres more beer consumed than in 1879, and about
9,463 kilograms (valued at nine million francs) of tobacco
and cigars than in the previous years, and there are not
wanting signs to show that this increase of material prosper-
ity was not of a spasmodic character. A similar progress was
also to be seen in Belgium. And finally we will take the
case of Germany, where in the year 1878 about 8,7 million
marks more duty was paid on luxuries, such as sugar, to-
bacco, brandy, and beer, than in previous years, and this in
connection with the information already given with regard
to the imports of foreign produce, effectually removes all
doubt as to tho improvement at that time in its economic
position. Only in Italy was there to be found a slight indi-
cation of an unfavorable tendency, and in Austria there was
an inference of the maintenance o.P the status quo, the revival
in both instances having taken place since 1880.

No one who has studied the comiaoi-cial statistics of the
decade 1870-1880 can fail to be impressed with the enormous
increase which has taken place in the consumption of textile
fabrics, iron, steel rails, and the production of other sta[)le in-
dustries. To follow these in all their details would be out of
place here; it will only bo necessary to remark that they ex-
perienced a moderate rise dating from the year 1873, and a
partial decline in 1880, As an American writer forcibly put
it, the poor man in the time of depression wore his coat twice
as long as he otherwise would, the rich man entertained less,
and in many instances disposed of his horses and carriages ;
the tailor and the shoemaker complained that they had much

-Ik'*

u,'

PROGRESS IN TRADE AND INDUSTRY.

489

to meud and but little to make. As an illustration of this,
we may mention that in England in 1878 about twenty-six
million pounds less wool and 897, o8d pounds less silk were
consiuned than in 1877, and besides this, all the warehouses
were full of stock. The universal decrease in the consump-
tion of these staple articles continued during the gloomy
period 1874-79. The depression was of such a lasting char-
acter, and carried such disheartening effects in its train,
that one hardly cared to inquire how it happened that such
an unfavorable state of affairs, unbroken by any prospect of
a speedy revival, could exist in central Europe and America.
With this restriction in consumption was associated a cur-
tailment of profits and a consequent lessening of income;
and when in 1879 the horizon commenced to clear, and the
first ray of hope was to be seen, it was welcomed with a
feeling of intense relief by all classes of the community.

We will now see from the extent of commercial facilities
what conclusions may be formed as to the actual economic
position; and it appears to us, after many years of patient
observation, that the increased activity in commercial enter-
prises should assuredly be placed in the front rank of what we
have called the primary symptoms. If one follows the im-
provements which have during the last few years been made
in railways, postal systems, telegraphs, banking, etc., one
cannot fail to be impressed with their very vast importance
as factors in determining the condition of the world's pros-
perity. Thus, in all civilized parts of the world, railways,
one of the most important of these factors, showed a very
rapid increase from 1870 to 1873 or 1874, both in the number
of passengers carried and in the quantity of goods conveyed,
and as a natural consequence the receipts from both sources
greatly increased. From 1874 to 1878, and in many countries
until 1879, there ensued a period of stagnation in railroad
enterprise, and in fact to such an extent that not only were
the effects very disastrous as regards industry, but great social
dangers were apprehended.

As an example of the stagnation of industrial life in North
America, we may state that the loss to holders of scrip in

4 II

490

ECONOMIC HISTORY.

bankrupt or worthless railways in 1877 is estimated in round
numbers at 1000 million dollars, and that they were power-
less to prevent the fearful strike which happened on the Balti-
more and Ohio Railway on 16th July, 1877. It was only in
1879, or the beginning of 1880, that an improvement mani-
fested itself in railway enterprise, and the revival was first
experienced in the United States. In Great Britain, France,
Belgium, and Austro-Hungary the traffic receipts began then
gradually to increase ; while in Italy alone a similar impulse
docs not appear to have been given until the autumn of 1881.
From 1881 to 1883 great activity in railway construction and
large increase of traffic were manifested in all countries of
western civilization. There appeared, however, in the United
States symptoms of a reaction in 1883, which led to an actual
crisis in 1884. In European countries also a stagnation in
'commerce began in 1884, which continued in 1885, and caused
a dangerous diminution in the dividends of railways.

In shipping, the same features are to be seen as those which
characterized railway enterprise. During the same period we
notice similar peculiarities in this particular branch of indus-
try. The fluctuations in the number and tonnage of vessels
built, the increase or decrease in the tonnage entering or
clearing, and the amount of freight, — all these will show the
condition of the world's prosperity.

The postal and telegraphic statistics are not of such valu-
able assistance as symptoms of the periodically favorable or
unfavorable condition of economic progress. We will, how-
ever, give the following figures, as thoy tend to show, in a
slight degree, which were the favorable and unfavorable
periods. The number of newspapers and books sent through
the British post-office rose from 202 millions in 1871 to 254
millions in 1873, that is, about twenty-six millions annually ;
from 1873 to 1874, however, the number rose to only 258
millions, that is, about four millions annually. With the revi-
val of trade this number again rose from 328 millions in
1879 to 412 millions in 1882, that is, about twenty-eight
millions annually, the same as before the crisis ; and from
1882 to 1885, to 464 m., indicating a slight retrogression. The

t€

PROGRESS IN TRADE AND INDUSTRY.

491

11 ■; ;

lated in round
' were power-
i on the Balti-
It was only in
vemcnt mani-
ival was first
t'itain, France,
)ts began then
milar impulse
tumn of 1881.
nstruction and
il countries of
, in the United
;d to an actual

stagnation in
185, and caused
ways.

as those which
lame period we
i-anch of indus-
4age of vessels
le entering or

will show the

t of such valu-
ly favorable or
We will, how-
to show, in a
d unfavorable
sent through
In 1871 to 254
ions annually ;
e to only 258
With the revi-
28 millions in
t twenty-eight
isis ; and from
)gression. The

number of telegrams, which in 1870 amounted to 8.6 mil-
lions, increased in 1874 to 17.8 millions, showing a yearly
increase of 2.3 millions ; from 1874 to 1878 the number
ouly increased to 22.5 millions, an annual increase of 0.8
million. On the other hana in 1881 the telegrams amounted
in round numbers to thirty millions, showing an average in-
crease for three years of 2.6 millions, as before the crisis ;
but after that date there occurred a diminution, as in 1885
the number had redched only 33.2 millions.

Let us now take another of the primary symptoms of
economic progress ; viz., the state of the money market. If
we look at the value of paper currency as the substitute for
cash payments, we find that it increased during the period
1869-73 about 1,679 million marks, and declined from that
date till 1879, to the extent of 2,350 million marks. At this
time there was a larger amount of uninvested capital lying idle
than had ever before been known. The bank hoards accumu-
lated, fi'om the commencement of the period of stagnation,
at least 1,100 to 1,200 millions of marks in gold and silver.
If we take the returns of the two greatest financial institu-
tions in the world, the clearing houses of London and of New
York, Ave find that they show an increase from 190 milliard
marks in 1870-71, to approximately 256 milliards in 1873-74 ;
and on the other hand in 1878-79 they stood at 188 milliards,
which, taken in conjunction with the increase of population,
must be regarded as an unusual depression. How great was
the revival of trade in 1880 may be gathered from the returns
of both clearing houses, which show an increase from 203
milliard marks in 1878-79 to 266 milliards in 1880.

The condition of foreign commerce, though of course af-
fected by the state of industrial enterprise, also furnishes in
itself an important symptom of the economic situation, as
by it one can compare tne rise and fall in the purchasing
power of nations. The wonderful fluctuations in national
wealth are nowhere more clearly shown than in the statistical
trade returns of the last decade. The figures, although they
cannot be said to be in any case strictly accurate, still point
conclusively to progress or retrogression in material pros-

ilii!

492

ECONOMIC HISTORY.

perity. In almost all countries the export returns are less
reliable than the statistics of imports. It must be borne in
mind also that the volume of foreign trade is determined not
by quantities but by value, and this is to a certain extent
misleading, as changes must take place from time to time in
the aggregate values of imports and exports ; and one ought
to consider how far these changes, which are due to fkictua-
tions in average prices of commodities, affect the total import
and export trade. We find, then, from an examination of the
trade returns of the most important countries of the earth,
that the total import and export trade increased from 1865
to 1872 annually 2,166 million marks ; from 1872 to 1873
about 1,620 million marks ; while from 1873 to 1877 it expe-
rienced a sudden and rapid decline. The year 1878 witnessed
the inauguration of a brighter era, trade improving to the
extent of nearly 1,400 million marks ; and this revival con-
tinued to make progress throughout the years 1879 and 1880.
To avoid misconception, we cannot insist too much upon the
influence exercised over these remarkable fluctuations by the
rise and fall in prices ; these, of course, being very material
elements in determining the general totals of imports and
exports ; but even making due allowance for the effecf of the
changes in prices, these fluctuations are none the less remark-
able, and must be accepted as unmistakable symptoms of
the economic situation. From the trade volumes of the vari-
ous countries, we find that the value of the foreign trade of
the United States in 1880 exceeded by 308 million dollars
that of the preceding year. Great Britain, for the same
period, showed an increase of seventy-nine millions sterling,
France 482 million francs, and Austro-Hungary 55 million
florins. These four countries, then, will serve as an illustra-
tion of the increasing growth of economic power, having in
one year alone raised the value of the world's foreign trade
to the extent of about 3,300 million marks.

We will now proceed to an examination of those symptoms
of economic progress which we have designated above as
secondary symptoms, and "will consider first tlie prices of
commodities and wages. The favorable period, comprised

PROGRESS IN TRADE AND JNDUSTRY.

493

between 1870 and 1873, was characterized by a general rise
in the prices of commodities and in wages, by reason of the
demand for industrial power far exceeding the supply. If
we look at the trade circulars of London, Hamburg, and
New York, which contain regularly the same staple commodi-
ties, we find that the highest prices as regards textile fabrics,
iron, tin, copper, most articles of food, and colonial produce,
were quoted in 1873 and 1874. The tables published by M.
Bodio, the statements of Mr. Giffen in the Commercial His-
tory of the " Statist " (1881), the quotations of the New York
commercial papers and of the Hamburg lists, all point to
the existence of this symptom in the economic situation.
Laspeyres has conclusively shown that at hardly any period
had the prices of commodities attained such a high rate as
during the year 1871. The decline was first apparent in
Hamburg in 1872 ; in New York and London, owing to the
enormous supply on hand, it was experienced in 1874 or 1875.
This decline, though gradual at first, began rapidly to assume
larger proportions, and continuing until the middle or end of
1879, points to the existence of a distinct commercial depres-
sion. Laspeyres states, on the authority of Hamburg quota-
tions, that the fall in prices of commodities in Germany from
1873 to 1877 had been greater than after an experience of
forty years had been thought possible. As regards England
the " Economist," in its annual review, gives a very interest-
ing statement showing the prices of staple commodities in
1870, as compared with 1845-50, the years for which the
index number of 100 may be taken. From this it appears
that, taking twenty -two categories whoso total index number
is originally 2,200, the prices stood in 1870 at 2,689, and in
1873 had increased to 2,947, and declined in 1879 as low as
2,202 ; that is, had fallen to the prices of 1845-50. Mr.
Giffen points out in an exhaustive review that, with but few
exceptions, the English heavy goods in the period comprised
between 1873-79 became from 26 to 66 per cent cheaper. In
1878 lower prices ruled than had ever been quoted in London
since 1850. M. A. de Foville, in a series of comparative state-
ments, gives some interesting details of trade values; from

^M\

{ifiifi

\m-

494

ECONOMIC HISTORY.

these we gatlier that in 1877 the values of hnports into France
were 14.5 per cent, and of exports 27.1 per cent lower than
in 1802. The same decline was experienced everywhere, and
it was a period of sucli universal commercial depression tliat
many industrial establishments had to forsake all branches ci"
their busiuess. Many important woollen firms in England and
America failed, owing to the ruinous i)rices which prevailed.
The decline in tlic prices of coal and iron caused a loss in
these industries in Great Britain of from 60 to 70 per cent.

The enhancement of prices was first observable in the
United States, and was noticeable in the case of pig iron, silk,
and steel, at the end of 1878, and this upward tendency con-
tinued till the middle of 1879. For example, Pennsylvania
pig iron rose in 1878 from 10.5 to 18.5 dollars, and in 1879
from 28 to 32.5 ; it continued to rise, until in 1880 it attained
the average price of 38 dollars per ton, approximately the
same rate as was quoted in 1873 ; in the same way the Glas-
gow warrants, which were quoted in 1879 at 408. per ton,
reached the high price of 738. in the year 1880 ; and this
favorable impulse was not wholly confined to England and
America, but was visible throughout the commercial world.
The twenty-two goods categories of the " Economist,'' which
we mentioned above, ascended from tlie lowest index num-
ber in 1879; viz., 2,202, in one year, to 2,538, an increase of
about 16 per cent. Heavy goods, such as wool, cotton, yarn,
twist, and manufactures, experienced during the course of
1880 a still greater enhancement of prices. According to the
published statistics also of Germany, the rise of wholesale
prices in 1880, as compared with 1879, was of a more marked
character tlian was a])parent in the returns of the majority of
tlie other European countries.

In connection with the variation in prices, we ought at the
same time to study the influence they exercised over wages.
Tliese constitute an important symptom as regards industrial
condition, and are instrumental in determining the degree of
the material prosperity of various classes in the community.
The old axiom of political economists, that wages only fol-
lowed slowly in the wake of prices, has of late years suffered

'■r'isr'f'iil

PROGRESS IN TRADE AND INDUSTRY.

495

ts into France
nt lower than
erywhere, and
eprossion that
til branches c""
1 England and
lich prevailed,
ised a loss in
70 per cent,
irvable in the
: pig iron, silk,
tendency con-
, Pennsylvania
s, and in 1879
880 it attained
I'oximately the
! way the Glas-
,t 40s. per ton,
L880; and this
) England and
imercial world,
noraist," which
St index nnm-
an increase of
I, cotton, yarn,
the conrse of
cording to the
! of wholesale
a more marked
he majority of

re ought at the
cd over wages,
ards industrial

the degree of
le community,
rages onlv fol-

years suffered

very considerable modifications. The effect of the sinking of
prices upon wages during the period of depression between
1874 and 1878 was clearly apparent, and the same marked
influence exercised by the impulse given to commercial ac-
tivity and the improvement of the industrial condition was
particularly noticeable in the augmentation of wages dating
from the year 1879. It would be impossible in this review to
enter into minute details of the fluctuations during the vari-
ous periods of depression and commercial activity ; but to
show how high wages had risen before the crisis of 1873, we
may mention that a special brand of champagne was ordered
for the Belgian mining districts, and thousands of bottles
consumed. In England the wages of coal miners rose from
4s. M. a day in 1871 to 7s. Sd. in 1873, and in Scotland to
88. Qd. ; whereas in October, 1878, these wages had been re-
duced to 2s. 9d. a day, a decrease to nearly one third. Fur-
nace men who were receiving in 1869 only 38. 9d. a day, in
1872 were paid 7s. 6d., and in 1873 as much as 8s. Gd. ; but
in 1876 they had to be content with 48, Gd., and in 1878 with
only 2s. 9J. a day. Puddlers were in 1868 in the receipt of
8s. per ton, in 1873 138. 2d., in 1874 lis. Gd., and in 1878-79
between 7s. and 78. Gd. During this latter period wages in
the textile industries also suffered a very considerable diminu-
tion. For instance, in one single year (1877-78) the spinners
and weavers of northeast Lancashire snffered a reduction in
wages to the extent of 10 per cent, and those of Oldbam 15
per cent. It lias been stated in the " Times " that the actual
difference of miners' wages between 1873 and 1878 amounted
to as much as twenty-six millions sterling. The reduction of
wages was not confined to England alone, but extended also
to America. We find there tliat after a period of coramorcial
prosperity and high wages, there ensued a time of such un-
paralleled depression (in 1876) in the mining districts of
Pennsylvania that it had the most disastrous results, one
being a series of sanguinary riots, which nocessitatcd for a
time the establishment of martial law. The statistics of
England, America, Belgium, and Germany, clearly show the
increase in wages from the commencement of 1880. Accord-

1 II

496

ECONOMIC HISTORY.

10 *<.l

ing to the estimates of Mr. Fallows, it would appear that the
Scotch miners in 1879 received on an average 6<7., and in 1880
9c?. a day, more than they earned in 1878. And as regards
the cotton industries, we gather from Ellison's well-known
reports that out of the total value of British production, in
1879 only forty-four millions sterling, while on the other
hand in 1880 forty-six millions sterling were put by for wages
and j)ront. From America we have abundant information re-
specting the increase of wages in agricultural, mining, and
other industrial enterprises, and these clearly show the im-
provement which had already taken place in 1880 in the in-
dustrial condition. According to more recent statistics wages
continued to increase during the years 1880-83, and again
declined in 1884-85.

We will now turn to the subject of the rates of discount, as
also affording an indication of the eoo"';omic progress. During
the period 1870-79 there were very many fluctuations in the
rates of discount. The Bank of England, we find, previous
to the commencement of the period on which we have made
our calculations, only changed its rate two or three times, or
at the most seven times yearly. In 1870 and 1871 it was
altered ten times, in 1872 fourteen times, and in 1873 twenty-
four times, — in this year the bank I'ate was raised thirteen
times. The rate of discount stood during a period of fifty-
seven days at 6 per cent, during twenty-two days at 7 per
cent, and during thirteen days at 8 and 9 per cent. The
Bank of Franco in 1870 and 1874 changed its rate four times,
and in the three years 1871, 1872, and 1873, the rates were
established at 5 per cent for 735 days, 6 per cent during 349
days, and 7 per cent during twelve days. Similar fluctuations
were also experienced in Germany. In 1874 the commercial
depression commenced to be universally felt, and from then
until the middle of 1878 there were a greater number of
changes in the rate of interest. The Bank of England altered
its rate five times during one year, the Bank of France once
only, and the rate was everywhere so reduced that it aver-
aged — taking the chief financial centres, London, Paris,
Amsterdam, Berlin, Vienna, Frankfort, and Brussels — only

PROGRESS IN TRADE AND INDUSTRY.

497

poar that the
., and in 1880
d as regards
3 woU-known
iroduction, in
on the other
, by for wages
iformation re-
mining, and
show the im-
880 in the in-
atistics wages
B3, and again

)f discount, as
;rc88. During
nations in the
find, previous
(ve have made
;hrcc times, or
a 1871 it was
I 1873 twenty-
aiscd thirteen
leriod of fifty-
days at 7 per
cr cent. The
ito four times,
;he rates were
nt during 349
ar fluctuations
10 commercial
nd from then
;er number of
n gland altered
France once
I that it aver-
london, Paris,
russels — only

4.01 per cent in 1875, 8.52 per cent in 1876, and 3.55 per cent
in 1877. In making up this average, the higher rates which
prevailed in Vienna, Frankfort, and lierlin (4J to 5 J per cent)
arc taken into account, as well as the lower ones of London
(2.47 per cent), Amsterdam (3 per cent), and Paris (2.31 per
cent), although these last determine with greater accuracy
the industrial position, as they experienced the first fall ; for
in 1870 the bank rate in London stood at 2 per cent for 255
days, in 1877 again for 170 days, and it was only towards the
end of 1877 that there was a rise. In 1878 the Bank of
England rate of discount was scarcely more than 3A and 4^
per cent, but in the open markets short bills were discounted
at \l and 1^ per cent. In Paris, the rate was at the most 1^
and 1 J per cent, and it stood at 2 per cent only once, in March,
and from October to December at 2J. The rates at Berlin,
Amsterdam, and Brussels exhibited greater regularity in their
fluctuations between 2A, 31, and 4i per cent. The unproduc-
tiveness of floating capital, and the absence of speculative
spirit, cannot be said to afford such unfailing symptoms of
material prosperity as these fluctuations in the bank rates.
To pursue our investigations still further, we find that dur-
ing the latter part of 1878, and also in 1879, a greater os-
cillation was to be found than in 1880 ; again the increases
in the rate were also more important in 1878 and 1879 than
in 188C, and clearly indicated a stimulus which was want-
ing in 1880. The alterations in the Bank of England rate
amounted in 1878 to 11, in 1879 to 6, and in 1880 to 2 only ;
but in 1880, taking six of the most important financial circles
of Europe, these alterations only amounted to 17, of which, as
we have already shown, 2 occurred in London, 3 in Paris, 5 in
Berlin, 2 in Brussels, 3 in Amsterdam, and 2 in Vienna.
These symptoms tend to show that the lowering of rates of
discount is a distinct voucher for the excess of the supply of
lending capital over the demand. Economists agree in re-
garding them as indications of the approach of a lasting
period of cheap money.

As regards investments, these are mainly dependent upon
favorable or unfavorable economic conditions, as during a

II''

III

498

ECONOMIC HISTORY.

period of commercial prosperity there would naturally bo a
larger amount of available capital to invest than would bo the
case were depression prevailing. The amount of capital in-
vested in the formation of new industrial establishments and
various forms of investment would afford an insight into the
condition of the industrial position. It appears from a state-
ment in the " Moniteur des Int<5ret8 Matdriels," in an article
devoted to the consideration of the subject of investments,
that they averaged during the ten years ending 1879, 6,109
million marks, tho amounts for the years 1871-73 being very
considerably above tho average, thus clearly indicating the
existence of a period of excessive speculation. The following
statement shows the amount invested each year, and the
character of tho investments : —

[MillloDa omittod.]

Years.

In 8t«t« and
City Loans.

In Credit
luatitutioDS.

In lUilwaj'B
and other In-
dustrial Kntor-
prises.

Total.

Above or below

the Uecenuial

AveniKea.

Mntkl.

Mark!.

M«rki.

Miirkl.

1870 . .

45t)0

— 1649

1871 . .

9;ioo

1200

2f)00

12500

4 6451

1872 . .

4380

1504

4106

10110

+ 4001

1873 . .

3470

1390

3856

8722

+ 2613

1874 . .

1208

230

1804

8868

— 2741

1876 . .

372

350

646

1308

— 4741

187tt . .

2356

498

2920

— 3189

1877 . .

4018

320

1384

6322

+ 213

1878 . .

28!M)

126

622

3044

— 2466

1879 . .

4406

1902

1212

7520

+ 1411

1880 . .

1747

1035

1644

4426

— 1683

1881 . .

2395

1033

2315

5743

— 366

1882 . .

1075

409

2256

3740

— 2369

1883 . .

1253

.374

1741

3368

— 2741

1884 . .

1446

318

2193

3P57

— 2152

1885 . .

1181

151

1332

2664

— 3445

In this comparison the proportion of investments in credit
institutions, banks, railway and industrial enterprises, to public
loans is of special significance, and we therefore present it
by per centage in the following table : —

:!!t,„

PROGRESS IN TRADE AND INDUSTRY.

499

Yean.

I'ulllio

Cnxlit

lUllwityi,

Yran.

Pul>llo

Cri'tllt

Ruilwayi,

Ixwui.

Inititutiuoi.

«to.

LlMDi.

luatltuUuui.

oto.

Pi r cent

Per cent.

J'cr cent.

Percent.

Per cent.

1871. .

74-5

100

1870 .

58-76

2526

100

1872. .

43-6

16'6

410

1880 .

31)46

23 38

3717

1873 . .

400

100

440

1881 .

41-70

17-09

40-34

1874. .

380

560

1882 .

28-74

10-03

60-31

1875. .

276

25-75

40-75

1883 .

87-20

11-10

6180

1870. .

8076

226

170

1884 .

36-64

8-03

6643

1877. .

73-25

21-75

1886 .

44-33

5-67

60-00

1878. .

7025

3'60

17-25

AboTe

or below

tbo Decnnulal

AvenMsel.

1549

0461

4001

2013

2741

....

4741

3189

213

2465

1411

1083

300

2309

2741

2152

—

-3445

Here wo perceive that in the early period of speculation
private enterprises, and in the subsequent period of dej)res-
sion public loans received the larger proportion of invest-
ments. After the revival in 1879 the relation between these
two classes of investments is once more reversed, especially
for the year 1882 ; on the other hand, since that date there
would appear again to be an increase of public loans.

In the invested capital for the same period of the several
individual countries, peculiarities similar to those which char-
acterize the preceding tables are likewise to bo found. Of cap-
ital invested in the English market, the " Economist " gives
the following statement ; —

Years.

NomlDsl.

Actual.

Yeam.

Nominal.

Actual.

Million £.

1870 ....

02-26

80-00

1879 ....

56-47

47-46

1872

151-65

113-10

1880 .

122-20

77-00

1873

15i-70

10115

1881 .

189-40

11525

1874

114-15

110 55

1882 .

146-65

94-65

1876

62-05

00-85

1883 .

81-16

76-90

1876

4320

42-85

1884 .

10903

00-00

1877

51-50

38-00

1885 .

77-97

77-87

1878

50-20

60-40

These figures may be taken as more strictly accurate than
those affecting the total investments, as they relate only to
a single stock market ; they indicate, moreover, the increase
of invested capital up to the year 1874, the decrease from
this period till 1878, and the rapid recovery since 1879; likc-

[I* ''■!

ti. m-

500

ECONOMIC HISTORY.

wise the character of the recent phase from 1881 to 1885.
This statement is the more interesting, as \vc can estimate
very nearly, by the proportion between the nominal and effect-
ive cajjital, whether the investments were of a purely specu-
lative or real character. In France, ca})ital invested during
the first six months of 1879 amounted to only 350 million
francs, as compared with 1,748 million francs in the corre-
sponding period of 1880. For the whole year, ending 30th
June, 1880, it amounted in round numbers to 4,000 million
francs, and this is exclusive of the Belgian, Austrian, and
Russian loans, which were not directly floated on the Parisian
market. There wre established in Paris, in the year 1881,
432 new conipanios, with 1,929 million francs of capital ; in
the year 1882, 328 \:ompanics, with 798 million francs; in the
year 1883, 230 coi.panies, with 251.5 million francs ; and
in the year 1884, only 143 companies, with 91.9 million
francs. In Germany during the first half of 1879, capital to
the extent of only 142 million marks was invested, against
G59 million marks in the corresponding period of the ensuing
year, of which twcntv-fivc million marks only were in railways
and other companies, and the remainder in foreign loans. In
Austria it is estimated that the total amount of invested cap-
ital in 1880 was only 170 million florins, compared with 271
million florins in 1879 ; but great stress is here laid upon the
fact that, after a lengthened period of inaction, in 1880 money
was for the first time largely invested in railways and commer-
cial enterprises, in preference to foreign loans, — the amount
represented by the former being fifty-four million florins.
Thus, as may be gathered from the preceding observations,
statistics of invested capital afford an important symptom of
greater or less commercial activity.

Again we can discover, by reference to financial journals,
tlie ihictuations which have appeared in the dividends paid
by railways and other commercial enterprises. The influence
of good and l)ad years exorcised over these dividends is clearly
shown in the comparative statements which tlicy have from
time to time publislied. For example, the depreciation of
foreign stocks on the London Exchange amounted in July,

mm'^^^

PEOGnESS IX TRADE AND INDUSTRY.

501

1873, to 49.2 millions sterling; and in October, 1875, the loss
was estimated by the Foreign Loan Committee of the Stock
Exchange to amount to as much as 157.8 millions sterling.
There was in addition the loss by the joint-stock banks, four-
teen of which alone, in 1878, sulfered, according to the
" Economist," a diminution in the value of their stock of ten
million pounds sterling. As regards the chief industrial estab-
lishments of England it is admitted that the depreciation in
the shares of the cotton spinning and weaving industries of
Oldham from January, 1877, to 1879, represented a total loss
of £1,31j0,000. The foregoing figures, however, convey only
an approximate idea of the general loss of capital in Great
Britain and Ireland, the actual extent being statistically un-
ascertainable. In 1880, on the other hand, a decided improvi>-
mcnttook place in the United Kingdom, which, when compared
with the period of depression of 1879, is all the more clearly
marked.^

As Mr. Giffcn points out in the Financial and Commercial
History of 1880, published in the '• Statist," the increase of
selling value of the mass of securities in the United King-
dom would probably amount to not less than 000 millions
sterling. In the United States the loss in railway shares,
from 1873 to 1877, amounted to nearly one milliard of dollars,
but the improvement which took place after September, 1879,
to a great extent made up this loss, as in ilay, 1880, it was
already reduced to 200 million dollars, and was soon after-
wards almost entirely removed. A similar improvement in
tlie value of securities was also to be found in the case of
Austria. There it appeared that tlie value of the diff(>rent
description of securities, which amounted in 1873 (^lay) to
l.oSO million florins fell to 7o.") in 1870 ; in 1877 it was only
879, and in 1878, 900 million florins ; l)ut a steady improve-
ment then set in, until in 18S0 the total increase in the value
of all securities amounted approximately to 300 million
florins. This favorable tendencv continued in both countries,
as in Great r)ritain, until the close of 1881, after which a
general decline in securities took place until 1885.

1 See " Statist," Dec. 11, 1880, for full details.

502

ECONOMIC HISTORY.

-•

M''-'

U i<.

-,'•

h 'it'

tih"'''

lll

""If f^c
'if '11

Inl^

Statistics of bankruptcies and failures may likewise be
taken as unfailing symptoms of the industrial position. But
our information as regards this subject is by no means com-
plete, owing to the scarcity of oflicial data. The following
table, which has been carefully compiled by R. Seyd, serves,
however, to indicate the economic phases from 1870-188J: in
the United Kingdom by the number of failures : —

Years.

Number.

Years.

Number.

1870

1871

1872

1873

1874

1875

8,151
8,164
8,112
9,004
9,250
9,194
10,848
11,022

1878

1879

1880

1881

1882

1883

15,059
16,637
13,147
12,005
11,019
10,599
'4,394
6,089

1870

1877

1884

1885

It is noteworthy that the extreme depression of the large
industries in Great Britain was already relieved in 1878,
whereas of the smaller trades not until 1879. As regards the
United States the periods of commercial activity and of depres-
sion are clearly perceptible in the statistics of failures i)ub-
lished by Messrs. Dun, Wiinan, & Co. According to these
returns, the smallest number of failures in the Union is to be
found in the years 18G9-1872; a depi'cssion begins in the
latter half of 1873, whicli steadily increases until 1878; and
the years 1879-1881 witness a genuine revival. Tlie yearly
average of the munber of failures, and the amount of liability,
in the different periods is as follows : —

Yearly Average.

1800-1872
1873-1878
1879-1884

Amount of
LiabiliticH.

SS.'l.OOO.OOO
200,000,000
124,000,000

' Tlio years 1884 and 1885 cannot be compared with tlie preceding years,
owing to the enactment, on 25tli Aug., 1883, of a new and more stringent bank-
ruptcy act.

PROGRESS IN TRADE AND INDUSTRY.

503

Number.

15,059
10,037
13,147
12,005
11,019
10,599
'4,394
5,089

rof
es.

Amount of
LiabilitiuK.

$sn,ooo,ooo

200,000,000

124,000,000

In Franco the movement is not so strikingly accentuated, as
that country was less affected by the crisis of 1873 ; yet the
fluctuations were considerable. Thus in 1872 the number of
declared bankrupts amounted to 5,30G, and the extent of their
failures was represented by a total of 215 million francs ; in
1873, 5,508, liabilities 218 millions; in 1874, 5,596, liabil-
ities 241 millions ; in 1875, 5,361, liabilities 246 millions, and
in 1876, 5,193, liabilities 298 millions. It was not until 1877
that any real improvement was visible ; and in 1881, though
tiierc were 6,795 failures, the amount of liabilities was only
236 million francs. Finally, in Austria, according to the pult.
lished returns, the number of insolvents in 1875 was 1,381 ; in
1876, 1,777; in 1877, 1,377; in 1878, 1,334; in 1879, 1,048;
and in 1880 only 971 failures. The amount of debt in 1876
was established at nearly twenty-six million florins ; in 1877
at thirteen millions, and in 1878 at about fourteen millions.

The intimate connection between the economic and social
conditions demands no extended proof. The bonds of union
between these two phases of life are so numerous that we
proceed directly to a statistical presentation of a series of
phenomena which we have termed reflective symptoms, inas-
nmch as they reveal the reactions of a greater or lesser degree
of economic prosperity in a nation or period.

We here look first into the condition of the working classes,
and we find that during the favorable period, 1870-73, com-
plaints of want of employment were almost unknown, wln>reas
the demand for labor, on the contrary, was great and wages
were high ; but in 1874 there came a change, the hours of
labor were reduced, and workmen were discharged in great
numbers. This was particularly exemplified in the years
1876-77, when the conditions of trade were most unfavorable,
and it was especially noticeable in England and the majority
of the continental countries. In America, moreover, in the
beginning of 1877, it is estimated that the number of work-
men totally nnem[)loyed- amotmtod to half a million, and
about an equal number worked only one or two days a week.
At the end of 1877 the trades union committee gave the num-
ber of unemployed workmen as two millions. These com-

504

ECONOMIC HISTORY.

plaints began to cease about the middle of 1879, first in the
United States and soon afterwards in England and Western
Europe. From the data respecting the condition of hil)or
in mining, textile, and other industries for 1880 it may be
safely affirmed that the state of labor had' then everywhere
again materially improved. In the American Union, in par-
ticular, there was a great demand for laborers, which contin-
ued throughout the years 1881-83, and then again declined.

Strikes, likewise, afford a characteristic symptom of the
state of the labor market, not only by their numbers and
duration, but also by the manner in which they terminate,
whether in favor of the employers or the employed. On this
general subject English, American, French, and Belgian sta-
tistics afford valuable information. As regards Great Britain,
Mr. G. Phillips Bevan, in a very interesting report, has given
a ci»mparative statement, as follows, showing the number of
strikes which took place in tbc years 1870-79 : —

Years.

Number of
Strikes.

Years.

Number of

Strikes.

1870

1875

245

1871

187(5

229

1872

.S48

1877

180

1878

365

1878

208

1874

280

1870

308

The greatest number of strikes during this period occurred
in 1872-73, and happened at a time when industry was at its
highest. There was then a very large demand for labor, and
a great inflation in prices, and although men were getting
good wages, yet they were not satisfied. Though tl: ) gener-
ality of them wore earning more than they had ever earned
before, they struck for a reduction of working hours. This was
the reason for very many of the strikes which occurred at that
time. The effort, on the other hand, of the masters to win
back the extra hour they were obliged to concede in 1872-73,
affords an explanation of the large number of strikes in 1879.
In that year the greatest number of strikes occurred in the
building trade (598), the metal trades (390), mining Indus-

PROGRESS IN TRADE AND INDUSTRY.

505

Number of

Strikes.

2J5

229

180

2(38

308

trios (339), and textile industries (440), which establishes be-
yond a doubt their symptomatic connection with the economic
situation. The improvement in the economic condition, and
the extension of raw jjroduction, increased, beyond what could
otherwise have been expected, the demands for hi<rhcr wages,
and the number of strikes in 1881-82. In America, as well
as in England, the years in which the activity in commercial
enterprises was greatest, were characterized by the largest
number of strikes, — for examijle, 1871-72. During this
I)eriod there was a cessation of work in the anthracite coal
mines of Pennsylvania, by which 90,000 workmen were put
on half time. Strikes in the coal regions continued, indeed,
in the years 1874 and 1875; but tiie second period of their
occurrence in remarkable numbers was not reached until
1876-77. This was a period of great distress, during which
wages were reduced, and hands were discharged. There
resulted in consequence one of the most unfortunate strikes
that ever took place in America. It occurred in the State of
Penns^'lvania, and culminated in open revolt and bloodshed.
Then followed the strike on the Baltimore and Ohio Rail-
way, which was also of a very serious nature. From 1870
to 1880 the social tension was again relaxed ; and with the
revival in the years 1881 and 1882 the strikes also increased,
especially among the laborers in the coal mines, iron works,
and kindred industries of the Southeast. Both at this time
and in 1883 the ends of the workmen were thereby attained.
In 1884 and 1885, however, the strikes in America have been
chiefly characterized by their futility. In France, Belgium,
and Germany similar symptoms of the economic situation
arc not lacking, but they appear in a less marked degree.
The recent phases of socialism and social-communism in those
countries are an expression of the changing situation and a
reflex of their economic condition. With the improvement of
the latter the influence of socialistic leaders must diminish.

In connection with the subject of strikes and workmen's
wages we must not omit to give a passing glance at the effect
which the peculiar conditions of the labor market have upon
immigration and emigration. In consetiuence of the increased

506

ECONOMIC HISTORY.

facilities for emigration this is a subject which has attained
a vast importance, and may be classed as one of the relevant
symptoms of the economic position. The great centre of at-
traction for those leaving the more densely populated of the
European countries appears to be the United States. As wc
have already pointed out there have been very many changes
in the conditions of commercial activity during the period
under our consideration. The effect these changes have had
upon immigration into the United States may first be seen in
the speculative era from 1871 to 1873, when there was a very
i!;ieat influx of immigrants. Then in 1874-78 the powerful
attractions which induced such vast numbers to migrate were
wanting; consv. quently we find at that time a considerable
decrease in these numbers. In 1879, with the return of pros-
perity, there again appeared an increase in immigration. This
attain 'd its maximum in 1881-82, after which occurred a
declii.',' .. owing to the diminishing opportunities of labor and a
more critical state of affairs in the New World. The official
si atistics of the movement are as follows : —

Years Ending 30th Juno.

Number of
Immigrants.

Tears Ending 30th Juno.

Number of
luimigrauts.

1870-71

1871-72

1872-73

1873-74

1874-76

1876-70

1870-77

1877-78

321,350
401,800
459.803
313,339
227,498
]<i9,980
141,857
138,409

1878-79

1879-80

1880-81

1881-82

1882-83

1883-84

1884-86

177,826
4.')7,257
069,431
788,902
003,322
618,592
395,346

In this stream of American immigration the largest num-
ber of persons is uniformly supplied by Germany, and next
to it by Great Britain and Ireland. By reference also to
the emigration returns of the other European countries we
discover a uniformity of movement in corresponding years
that can only be cxplniued upon similar economic grounds.
According to these statistics it can thus be affirmed in gen-
eral of Europe, as has been demonstrated by Mr. Giffen for
Great Britain in particular, that an increase of emigration

PROGRESS IN TRADE AND INDUSTRY.

507

Number of

le.

lujuiigruuts.

177,826

457,257

069,431

788,092

CO;},322

618,592

395,346

is to be regarded as characteristic of a period of economic
prosperity, and the reverse as indicative of a period of
economic depression.

Another and very intercstinf? symptom of the conditions of
materiiil prosperity lies in the movement (Ijcwcgung) of the
population. The variations in the number of l)irths, deaths,
and marriages afford clear indications of the fsivorable or un-
favorable conditions of the years in which they occur. Mar-
riages especially would appear to be a most important element
in determining the economic condition in different years. It
will readily be conceded that an increase or decrease in the
number of these point conclusively to the existence of mate-
rial ease or the reverse. In dealing.with this subject for the
assigned period wo find that the years 1870-73 were char-
acterized by a very marked increase in the number of mar-
riages, thereby indicating the existence of favorable conditions
and confidence in a time of increased prosperity. This in-
crease was particularly noticeable in Great Britain, Germany,
France, Belgium, Austro-Hungary, and Holland. With the
unfavorable reaction of 1873 and 1874, on the other hand, the
number of marriages in all these countries began to decrease.
In Italy, Switzerland, Norway, and Denmark, the economic
reaction was likewise similarly manifested ; but corresponding
to a later maximum in the frequency of marriages, the de-
crease occurred not until 1877-78. At the close of 1879
increasing confidence was here and there again slightly per-
ceptible in the number of marriages. In their greater fre-
quency, however, during the years 1880 and 1881, in England,
France, Austria, and Italy, we discover decided and powerful
symptoms of the improved economic and social conditions.
In the United States, where as a whole this relation ought to
be most apparent, it is only to be proven statistically in
particidar States ; but this detached evidence from Massa-
chusetts, Connecticut, and Rliode Island, shows the most strik-
ing effects of the changing prosperity of the last twelve years
upon the frequency of mairiages. The favorable and unfavor-
able conditions of life are not so strikingly manifested in the
"movement" of population as regards births and deaths as in

Ill

h ' :■ I

hv.

508

ECONOMIC HISTORY.

the case of marriages. In the births, however, a considerable
diminution is to 1)0 found, beginning with the year 1877 or
1878 and continuing until the year 1881 or 1882. In the
majority of European countries the death rate was likewise
highest in those years in which the birth rate was lowest.
The years of dei)re8sion thus appear not to have seriously
affected at the time the entire growth of the population, but
the after effects were undoubtedly felt in 1879-80. The crisis
of 1873, however, had a direct and unmistakable influence on
the number of suicides. M. Jochnick states that in twenty-two
European countries the number of suicides increased from 90
in every million of inhabitants during the quinquennial period
1871-75 to 119 per million in the period 1870-80. M. A. von
Oettingen, taking another group of twenty European countries,
gives also the following statement of the increase of suicides
in successive quinquennial periods between 1870 and 1878 : —

Years.

Number

of
Suicides.

Proportion
per Million
Iiiliubitants.

1870-1874

20,n00
20,208
21,(i;58
2n,(!54
2t,'J10

1871-1876

1872-187<'i

187;;-1877

1874-1878

The fact, however, must not be overlooked that statistics re-
lating to suicides must necessarily be incomplete, as on this
subject it is almost impossible to obtain reliable data, owing to
omissions. Statistics of mendicity and crime likewise afford
abundant proof that good and bad times make their influence
felt in a very perceptible manner in the domain of social life.
They are consequently an additional and corroborative symp-
tom of economic progress or retrogression.

It is, then, by all the symptoms which we have enumerated
that we have endeavored to estimate the world's prosj)erity ;
and these have unquestionably proved that in the period from
1870 to 1885 economic conditions have been exposed to
greater and more varying fortunes than they had ever before

niOGRESS IN TRADE AND INDUSTRY.

509

iber

ides.

Proportion
per Million
Inlmbitants.

208

688

(i;j4

•J 10

experienced. At the commencement of the period there were
unmistakable signs of an increase in weultli almost without
j)arallel in commercial annals ; afterwards for a number of
years there were ajiparcnt a sensible decline in wealth and
an enormous reduction of profit ; and again, dating from
the middle of 1879, there were signs of renewed commercial
activity, a fresh impetus was given to trade, investments were
found for capital hitherto "unemployed, workmen were in
greater demand, wages were good, a very marked improve-
ment was to be seen not only in the European but also on the
American exchanges, and in fact there was a general revival
in all branches of trade and industry. This revival continued
until the close of 1882 or the middle of 1883, after which
economic symptoms again indicated a period of depression
for 1884 and 1885. The recent years of economic advance
must be a convincing proof to those pessimists who took such
a desponding view of the situation, that their fears as to the
ultimate improvement in material prosi^erity were altogether
groundless. Who is there who still believes in the liypothesis
that the depression of 1874-78 marked the termination of
commercial and industrial prosperity? Who now believes
that the crisis of 1873 marked a new era, and that the highest
point which improvements in trade and industry could reach
had been attained ? Who in like manner will now share the
pessimist view of the present depression that in the future a
very great decrease of prosperity is to be looked for before the
increase is to be expected ? Past experience must give ground
for conlidencc in a new revival in the economic life of the
present, and in a still greater increase of prosperity for the
future. Who can predict what wonderful inventions may yet
be in store for us, — what improvements electricity, for in-
stance, may effect in the future ? Who can gainsay the im-
provements which are continually being brought to bear
upon machinery ? In looking at the wonderful strides with
which cultivation and improvement have been advancing,
who can fail to be impressed with a sense of their vast-
ness and of their very great importance ? All these point
to the inauguration of a new and even brighter era in econ-

610

ECONOMIC HISTORY.

vt^

ii^

" i(

; '

]

(

omic life. And although wo arc of the opinion that the
characteristics of tlio ensuing economic period may dilTer ma-
terially from those which marked the preceding one, yet after
a patient study of the facts in connection with the present
situation, we can by no means look forward to a period of con-
tinued depression. While it may readily bo concluded from
the symptoms of the existing depression that the next revival
is not to bo expected with great precijjitancy, yet the more
slowly and more gradually the disturbed ecpiilibrium between
production and consumption, between prices and wages, and
between interest upon capital and profits of investments is
adjusted, so much the greater is the guarantee for the perma-
nent consolidation of economic life.

APPENDICES.

LEADING SECTIONS FROM THE ENGLISH NAVIGA-
TION ACTS.

Act of 1600, 12 Car. II., c. 18.

An Act for the Encouraging and Increasing of Shij)j)ing and

Navigation.

Foil tlio Increase of Shipping and Encouragement of the Naviga-
tion of this Nation, wherein, under the good Providence and Pro-
tection uf God, tlie Wealth, Safety, and Strength of this Kingdom
is so much concerned; (2) P«e it enacted by tlie King's most Ex-
cellent Majesty, and by the Lords and Cominons in this present
Parliament assembled, and by the Authority thereof, Tliat from
and after the lirst day of December, one thousand six Imndred and
sixty, and from thenceforward, no Goods or Commodities whatso-
ever shall be imported into or exported out of any Lands, Islands,
Plantations, or Territories to his Majesty belonging or in his Pos-
session, or which may hereafter belong unto or be in the Possession
of his ]\Iajesty, his Heirs and Successors, in Asia, Africa, or Aniei'-
ica, in any other Ship or Ships, Vessel or Vessels whatsoever, but
in such Ships or Vessels as do truly and without Fraud belong only
to the People of England or Ireland, Dominion of Wales, or Town
of Berwick upon Tweed, or are of the Built of and belonging to
any the said Lands, Islands, Plantations, or Territories as the Pro-
prietors and right Owners thereof, and whereof the Master and
three-fourths of the Mariners at least are English; . . .

III. And it is further enacted by the Authority aforesaid,
That no Goods or Commodities whatsoever, of the Growth, Pro-

'ip: ;:

612

ECONOMIC msroitr.

(liictiou or Miinufiictiirc of Jfrica, Asia, or America, or of any
Part thereof, or wliiuli are (leMcril^'d or laid dosvii in tlic usual
Maps or Canls of tliosc Places, lie iinixirtt'd into Enijlund, Inland,
or Wales, IsIuiuIh of Guernseij and Jersey, or Town of lierwick
upon Tweed, in other Ship or Ships, Vessel or Vewstds whatsoever,
but in such as do truly and without Fraud belong only to the
IVophf of EDijIand or Ireland, Dominion of Wales, or Town of
Berwick upon Tweed, or of the Lands, Islands, Plantations, or
Territories in Asia, Africa, or America, to his Majesty beloi
as the Proprietors and right Owners thereof, and whereof the j-
ter, and three-fourths at least of the Mariners are Enijlish ; . . .

IV. And it is further enacted by the Authority aforesaid. That
no Goods or Commodities that are of Foreign Growth, Production,
or ^fanufacture, and which are to bo brought into England, Ireland,
Wales, the Islands of Gueimsc}/ and Jersey, or Town of lierwick
upon Tweed, in ii'/z^^tA'/i-built Shipping, or other Shipjiing belong-
ing to some of the aforesaid Places, and navigated by Emjlish ^lari-
ners, as iiforesaid, shall be shipped or brought from any (tther Place
or Places, Country t)r Countries, but only from those of the said
Growth, Production, or Manufacture, or from those Ports where
the said Goods and Commodities can only, or are, or usually have
been, first shipped for Transportation, and from none other Place
or Countries; . . .

VIII. And it is further enacted by the Authority afo- 1,
That no Goods or Commodities of the Growth, Product
^Manufacture of Muscovy, or of any the Countries, Dominions, or
Territories to the Great Dulce or Enii)eror of Muscovy or Russia
belonging; as also that no Sort of Masts, Timber, or Boards, no
foreign Salt, Pitch, Tar, Rosin, Hemp or Flax, Raisins, Figs,
Prunes, Olive-Oils, no Sorts of Corn or Grain, Pot-Ashes, Wines,
Vinegar, or Spirits called Aqua-Vitae, or Prandy-Wine, shall
from and after the first day of April, which shall be in the Year of
our Lord one thousand six hundred sixty-one, bo imported into
England, Ireland, Wales, or Town of JBerwick upon Tweed, in any
Ship or Ships, Vessel or Vessels whatsoever, but in such as do
truly and without fraud belong to the People thereof, or some of
them, as the true Owners and Proprietors thereof, and whereof the
Master and three-fourths of the Mariners at least are English;
And that no Currans nor Commodities of the Growth, Production,
or Manufacture of any the Countries, Islands, Dominions, or Ter-
ritories to the Ottoman or Turkish Empire belonging, shall from

APPENDIX I.

513

a, or of any

ill tlic iiHiiul
UTid, Ireland,
II of Berwick
Im whiitHoeviT,
; only to tlu'
I, or Town (if
liintiitionH, or
ity lii'loi
•rt'of tlu
if/Ush ; . . .
foresaid, Tiiiit
li, l'ro(ln(;ti(in,
jland, Ireland,
\n of Berwick
ipping lii'lon^'-
Entjlish Miiri-
ny other Place
oso of the said
u Ports where
)r usually have
lie other Place

I'ity af<r I,
rodiu't

Dominions, or
!Ovi/ or Bussla
or Boards, no
Raisins, Figs,
Ashes, Wiuea,
y-\Vine, shall
in the Year of
iinjiorted into
Tweed, in any
in such as do
Mjf, or some of
id whereof the
are English:
1, Production,
lions, or Ter-
ig, shall from

and after tho first day of Sej)temher, which shall lie in the year of
our Lord one thousand six hundred sixty-one, Im iniported into any
tho aforo-mentioned places in any Ship or Vessel, but whicli is of
EnfjUah built, and navigated, as aforesaid, and in no other, except
only such foreign 8iii|is and Vessels as are of the lUiilt of that
Country or J'lace of which the said Goods are tho Gr<iwtli, Produc-
tion, or Manufacture respectively, or of such Port where tho said
Goods can only be, or most usually are, first shipped fur Transpor-
tation, and whereof the Master and three-fourths of tho Mariners
at least aro of tho said Country or I'lace; . . .

XVIII. And it is further enacted by the Authority afore-
said. That from and after tho first Day of April, which shall bo
in tho Year of our Lord one thousand six humlred sixty-one, no
Sugars, Tobacco, Cotton-Wool, Indigoes, Ginger, Fustick, or
other dying Wood, of the Growth, Production, or Manufacture
of any English Plantations in America, Asia, or Africa, shall bo
shipped, carried, conveyed, or transported from any of the said
English I'lantations to any Land, Island, Territory, Dominion,
Port or Place whatsoever, other than to such other English I'lanta-
tions as do belong to his Majesty, his Heirs and Successors, or
to the kingdom of England or Ireland, or I'rincipality of
Wales, or Town of Btrwick upon Tweed, there to be laid ou
shore; . . .

Act of 1662, 14 Car. II., c. 11.

XXIII. And whereas some Doubts and Disputes have arisen
concerning tho said late Act, For increasing and encouraging of
Shipping and Navigation, about some of the Goods therein pro-
hibited to be brought from Holland and the Parts and Ports there-
abouts; (2) Be it enacted and declared, that no Sort of Wines,
(other than Hhenish) no Sort of Sjiicery, Grocery, Tobacco, Pot-
Ashes, Pitch, Tar, Salt, Kozin, Deal-Boards, Fir, Timber, or
Olive-Oil, shall be imported into England, Wales, or Berwick,
from the Netherlands or Oermany, upon any Pretence whatsoever,
in any Sort of Ships or Vessels whatsoever; . . .

Act of 1663, 15 Car. IL, c. 7.

V. And in regard his ^lajesty's Plantations beyond the Seas
are inhabited and peopled by his subjects of this his Kingdom of
England, for the maintaining a greater Correspondence and Kind-
ness between them, and keeping them in a further Dependance

I'm

614

ECONOMIC HISTORY.

upon it, and rendring them j-et more beneficial and advantageous
unto it in the further Iniployment and Increase of English Sliip-
ping and Seamen, Vent of Englich Woollen and other Manufac-
tures and Commodities, rendring the Navigation to and from the
same more safe and cheap, and making this Kingdom a Staple, not
only of the Commodities of those plantations, but also of the
C'ommodities of other Countries and Places for the Supplying of
them ; and it being the Usage of other Nations to keep their Plan-
tations Trade to themselves :

VI. Be it enacted, and it is hereby enacted, That from and
after the five and twentieth day of March, one thousand six hun-
dred sixty-four, no Commodity of the Growth, Production, or Man-
ufacture of Europe, shall bo imported into any Land, Island,
Plantation, Colony, Territory, or Place to his Majesty belonging,
or Avhich shall hereafter belong unto or be in the Possession of his
Majesty, his Heirs and Successors, in Asia, Africa, ov America,
( Tangier only excepted) but what shall be bona-fide, and without
Fraud, laden and 8hii)ped in England, Wales, or the Town of Ber-
wick upon Tweed, and in English built Shipping, or which were
bona-fide bought before the first day of October one thousand six
hundred sixty and two, and had such Certificate thereof as is di-
rected in one Act passed the last Sessions of this Present Parlia-
ment, intituled. An Act for preventing Frauds, and Regulating
Abuses in his Majesty^s Customs; and whereof the Master aiul
three Fourths of the Mariners at least are English, and which shall
be carried directly thence to the said Lands, Islands, Plantations,
Colonies, Territories, or Places, and from no other Place or
Places whatsoever; any Law, Statute, or Usage to the contrary
notwithstanding; . . .

See English Statutes at Large.

APPENDIX II.

515

IMPORTANT SECTIONS OF AMERICAN NAVIGATION

ACTS.

Act of July 20, 1789.
Chap. Ill.-s- An Act imposing Duties on Tonnage.

Be it enacted hy the Senate and House of Representatives of
the United States of America in Congress assemJ)led, That the fol-
lowing duties shall be, and are imposed on all ships or vessels en-
tered in the United States, that is to say :

On all ships or vessels built within the said States, and belong-
ing wholly to a citizen or citizens thereof, or not built within the
said States, but on the twenty-ninth day of May, one thousand
seven hundred and eighty-nine, belonging, and during the time
such vessel or vessels shall continue to belong wholly to a citizen
or citizens thereof, at the rate of six cents per ton. On all ships or
vessels hereafter built in the United States, belonging wholly,
or in part, to subjects of foreign powers, at the rate of thirty cents
per ton. On all other ships or vessels, at the rate of fifty cents
per ton.

Sec. 3. And be it further enacted, That every ship or vessel em-
ployed in the transportation of any of the produce or manufactures
of the United States, coastwise within the said States, except such
ship or vessel be built within the said States, and belong to a citizen
or citizens thereof, sliall, on each entry, pay fifty cents per ton.

1 U. S. Statutes at Large, 27.

Act of Dec. 31, 1792.

Chap. I. An Act concerning the Rrgii^tcring and Recording of

Sh ips or Vessels.

Sectiox 1. Be it enacted, . . . That ships or vessels which shall
have been registered by virtue of the act, intituled "An act for regis-
tering and clearing vessels, regulating the coasting trade and for
other purposes," and those which after the last day of March next,
shall be registered, pursuant to this act, and no other (except such

516

ECONOMIC HISTORY.

as shall be duly qualified, according to law, for carrying on the
coasting trade and fisheries, or one of them) shall be denominated
and deemed ships or vessels of the United States, entitled to the
benefits and privileges appertaining to such ships or vessels: Pro-
vided, Tliat they shall not continue to enjoy the same, longer than
they shall continue to be wholly owned, and to be commanded by a
citizen or citizens of said states.

Skc. 2. And be it further enacted, That ships or vessels built
within the United States, whether before or after, the fourth of
July, one thousand seven hundred and seventy six, and belonging
wholly to a citizen or citizens thereof, or not built within the said
states, but on the sixteenth day of May, in the year one thousand
seven hundred and eighty nine, belonging and thenceforth continu-
ing to belong to a citizen or citizens thereof, and ships or vessels
which may hereafter be captured in war, by such citizen or citizens,
and lawfully condemned as prize, or which have been or may he
adjudged to be forfeited for a breach of the laws of the United
States, being wholly owned by a citizen or citizens thereof, and no
other, may be registered as hereinafter directed: Provided, That
no such ship or vessel shall be entitled to be so registered, or if
registered, to the benefits thereof, if owned in whole, or in part,
by any citizen of the United States, who usually resides in a for-
eign country, during the continuance of such residence, unless
such citizen be in the capacity of a consul of the United States, or
an agent for, and a partner in, some house or trade or co-partner-
ship, consisting of citizens of the said states actually carrying on
trade within the said states.

1 Statutes at Large, 287.

Act of March 1, 1817.

Chap. XXXI. — An Act concerning the navigation of the United

St ties.

Be it enacted, . . . That after the thirtieth day of September next
no goods, wares, or merchandise, shall be imported into the United
States from any foreign port or place, except in vessels of the
United States, or in such foreign vessels as truly and wholly be-
long to the citizens or subjects of that country of which the goods
are the growth, j)roduetion, or manufacture; or from which such
goods, wj'.res, or merchandise, can only be, or most usually are,
first shipped for transportation: Provided, nevertheless, That this
regulation shall not extend to the vessels of any foreign nation

APPENDIX II.

617

■ying on the
denominated
ititled to the
ressels: Pro-
, longer than
manded by a

vessels built
:he fourth of
nd belonging
ithin the said
one thousand
;orth continu-
ips or vessels
m or citizens,
en or may be
.f the United
lereof, and no
rovided, That
gistered, or if
e, or in part,
sides in a for-
dence, unless
ited States, or
or co-partner-
y carrying on

5/ the United

ptember next
to the United
essels of tlu'
nd wholly be-
ich the goods
1 which sui'h
usually are,
.s-s, That this
oreigu nation

which has not adopted, and which shall not adopt, a similar
regulation.

Sec. 4. And be it further enacted, That no goods, wares,
or merchandise, shall be imported, under penalty of forfeiture
thereof, from one port of the United States to another port of the
United States, in a vessel belonging wholly or in part to a subject
of any foreign power; but this clause shall not be construed to
prohibit the sailing of any foreign vessel from one to another port
o* the United States, provided no goods, wares, or merchandise,
other than those imported in such vessel from some foreign port,
and which shall not have been unladen, shall be carried from one
port or place to another in the United States.

3 Statutes at Large, 351.

Act of May 24, 1828.
Chap. CXI. — An Act in addition to an act, entitled, "An act con-
cerning discriminating duties of tonnage and impost."

Be it enacted, . . . That, upon satisfactory evidence being given
to the President of the United States by the government of any for-
eign nation that no discriminating duties of tonnage or impost are
imposed or levied in the ports of the said nation upon vessels wholly
belonging to citizens of the United States, or upon the produce,
manufactures, or merchandise imported in the same from the United
States, or from any foreign country, the President is hereby author-
ized to issue his proclamation, declaring that the foreign discrim-
inating duties of tonnage and impost within the United States a»'e
and shall be suspended and discontinued, so far as respects the ves-
sels of the said foreign nation, and the produce, manufactures, or
merchandise imported into the United States in the same from the
said foreign nation, or from any other foreign country: the said
suspension to take effect from the time of such notification being
given to the President of the United States, and to continue so
long as the reciprocal exemption of vessels belonging to citizens of
the United States, and tlieir cargoes, as aforesaid, shall be contin-
ued and no longer.

4 Statutes at Large, 308.

Act ok Feb. 10, 18C6.
Chap. VIII. — An Act to regulate the Registering of Vessels.

Be it enacted, . . . That no ship or vessel, which has been re-
corded or registered aa an American vessel, pursuant to law, and

518

ECONOMIC HISTORY.

LLiEU'i'

i -

which shall have been licensed or otherwise authorised to sail under
a foreign flag, and to liave the protection of any foreign govern-
ment during the existence of the rebellion, shall be deemed or
registered as an American vessel, or shall have the rights and priv-
ileges of American vessels, except under the provisions of an act
of Congress authorizing such registry.
14 Statutes at Large, 3.

Act of Junk 28, 1884.

Chap. CXXI. — An Act to remove ceHain burdens on the American
merchant marine and encourage the American foreign carry-
ing trade.

Sec. 14. [Be it further enacted,"] That in lieu of the tax on ton-
nage of thirty cents per ton per annum heretofore imposed by law, a
duty of three cents per ton, not to exceed in the aggregate fifteen
cents per ton in any one year, is hereby imposed at each entry on
all vessels which shall be entered in any port of the United States
from any foreign port or place in North America, Central America,
the West India Islands, the Bahama Islands, the Bermuda Islands,
or the Sandwich Islands or Newfoundland; and a duty of six cents
per ton, not to exceed thirty cents per ton per annum, is hereby
imposed at each entry upon all vessels which shall be entered in
the United States from any other foreign ports:

Sec. 17. When a vessel is built in the United States for foreign
account, wholly or partly of foreign materials on which import
duties have been paid, there shall be allowed on such vessel, when
exported, a drawback equal in amount to the duty paid on such
materials, to be ascertained under such regulations as may be pre-
scribed by the Secretary of the Treasury. Ten per centum of the
amount of such drjiwback shall, however, be retained for the use of
the United States by the collector paying the same.

23 Statutes at Large, 67.

Act op March 3, 1891.

Chap. DXIX. — An Act to inovide for ocean mail service f':.iioeen
the United States aiid foreign ports, and toj^romote commerce.

Be it enacted, . , . That the Postmaster-General is hereby author-
ized and empowered to enter into contracts for a term not less than
five nor more than ten years in duration, with American citizen.*,
for carrying of mails on American steamships, between ports of the

1 i^-l'ii-''- i :■ *.

APPENDIX II.

619

United States and such ports in foreign countries, the Dominion of
Canada excepted, as in his judgment will best subserve and pro-
mote the postal and commercial interests of the United States, the
mail service on such lines to be equitably distributed among the
Atlantic, Mexican, Gulf, and Pacific ports. . . .

Sec. 3. That the vessels employed in the mail service under the
provisions of this act shall be American built steamships, owned
and officered by American citizens, in conformity with the existing
laws. . . . They shall be divided into four classes. The first class
shall be iron or steel screw steamships, capable of maintaining a
speed of twenty knots an hour at sea in ordinary weather, and of a
gross registered tonnage of not less than eight thousand tons. No
vessel except of said first class shall be accepted for said mail ser-
vice under the provisions of this act between the United States
and Great Britain. The second class shall be iron or steel steam-
ships, capable of maintaining a speed of sixteen knots an hour at
sea in ordinary weather, and of a gross registered tonnage of not
less than five thousand tons. The third class shall be iron or steel
steamships, capable of maintaining a speed of fourteen knots an
hour at sea in ordinary weather, and of a gross registered tonnage
of not less than two thousand five hundred tons. The fourth class
shall be iron or steel or wooden steamships, capable of maintaining
a speed of twelve knots an hour at sea in ordinary weather, and of
a gross registered tonnage of not less than fifteen hundred tons.

Sec. 4. That all steamships of the first, second, and third
classes employed as above and hereafter built shall be constructed
with particular reference to prompt and economical conversion into
auxiliary naval cruisers, and according to plans and specifications
to be agreed upon by and between the owners and the Secretary of
the Navy, and they shall be of sufficient strength and stability to
carry and sustain the working and operation of at least four effect-
ive rifled cannon of a caliber of not less than six inches, and shall
be of the highest rating known to maritime commerce. . . .

Sec. 5. That the rate of compensation to bo paid for such ocean
mail service of the said first-class ships shall not exceed the sum of
four dollars a mile, and for the sccoTid-class ships two dollars a
mile, by the shortest practicable route, for each outward voyage;
for the third-class ships shall not exceed one dollar a mile, and for
the fourth-class ships two-thirds of one dollar a mile for the actual
number of miles required by the Post Oflico Department to be
travelled on each outward bound voyage : . . .

2G Statutes at Large, 830.

520

ECONOMIC HISTORY.

A'X M

THE AMERICAN CIVIL WAB.
COST OF THE WAR.

From Report op Special Commissioner of the Revenue (David
A. Wells) 1869, pp. iv-vii.

It would seem desirable at this point, now that all feeling in re-
gard to the subject from its bearing on political questions lias
apparently passed away, to place upon record the exact cost of the
war, as nearly as the same can be determined. With this object
attention is asked to the following exhibit: —

The amount of outstanding national indebted-
ness March 7, 1861, was $76,455,299.28.

During the four years of war which terminated

in April, 1865 (April 1, 1801, to April 1,

1865), the actual receipts of the treasury,

were as follows : —
From internal revenue . . $314,337,317 01

From customs 280,861,618 45

From lands 1,812,083 80

From direct tax ... . 4,068,259 31

From miscellaneous sources 74,120,413 37

Total receipts $875,799,691 94

The receipts of revenue from April 1, 1865,

to June 30, 1869, inclusive, during which

period the larger portion of the expenditures

has been directly in consequence of the war,

were as follows : —
From internal revenue . . $967,207,221 41

From customs 729,991,875 97

From lands 7,402,188 28

From direct tax .... 9,017,217 30

From miscellaneous sources 194,949,122 13

Total receipts $1,908,567,625 09

APPENDIX HI.

521

ENCE (David

575,799,691 04

The amount of outstanding indebtedness,
less cash and sinking fund in treasury,
June 30, 1869, was $2,489,002,480.58.

Deducting from this the amount of outstand-
ing indebtedness at the outbreak of the
war ($76,455,299.28), we have, as the
sum borrowed for war purposes and not
repaid out of the receipts above indicated 12,412,547,181 30

Making the total expenditure (loans
and receipts) in eight and a quarter
years of war and its effects . . .
Deducting the amount which, but for the
war, might be taken as the average ex-
penditure of the government during this
period, say $100,000,000 per annum . .

$4,996,914,498 33

825,000,000 00

We shall have «i, 171,914,498 33

which sum represents the coat of the war to the United States
government down to June 30, 1869.

To this sum should be added the value of the pensions now paid
by the government on account of the war, if the same were capi-
talized. This at eight years' purchase of the present annual pay-
ment, would amount to about two hundred vilUions.

But this aggregate, however large, must still furtlier be increased
by other items if we would reach the true cost of the war to us as
a people, the above representing only the expenditures of the na-
tional government.

These additional charges are substantially as follows: —

)08,567,825 09

Increase of State debts, mainly on war
account

County, city, and town indebtedness in-
creased on account of the war (estimated)

Expenditures of States, counties, cities, and
towns, on account of the war, not rep-
resented by funded debt (estimated) . .

Estimated loss to the loyal States from the
diversion and suspension of industry, and
the reduction of the American marine
and carrying trade 1,200,000,000 00

Estimated direct expenditures and loss of
property by the Confederate States by
reason of the war 2,700,000,000 00

$123,000,000 00
200,000,000 00

600,000,000 00

; ' I

' jl

622

ECONOMIC HISTORY.

im-'.

Tliese estimates, which are believed to be moderate and reason-
abh', sliow an aggregate destruction of wealth, or diversion of in-
dustry, wliich would have produced wealth in the United States
since 1861 approximiiting nine thousand millions of dollars — a
sum nominally in excess of the entire increase of wealth, as re-
turned by the census for the whole country from 1850 to 18G0.

This, then, was the cost of the destruction of slavery; the cost
of compromise ; the cost of the unfaithfulness of those who
founded this nation to the idea by which the nation lives. What
does it measure? It is substantially a thousand millions a year
for nine years; or at the wages of five hundred dollars a year, the
labor of two millions of men exerted continuously during the
whole of that period. It is tliree times as much as the slave prop-
erty of the country was ever worth. It is a sum which at interest
would yield to the end of time twice as much as the annual slave
product of the South in its best estate.

*' The places of those who sleep in their graves have been filled
by new laboi-ers; the incubus of slavery, which was slowly but
surely making the fertile South a desert scorched as by a consum-
ing fire, has been removed; thousands of miles of new railroads;
inventions never before excelled in their labor-saving character;
millions of acres of the richest lands opened to settlement, now
render labor easy and product large." Without faltering and with-
out tampering with the public faith, it is now the duty of this
people to undertake the far easier task of payment for the service
already rendered. If we hesitate or falter, dishonor, second only
to that which tolerated slavery, will overwhelm the land, and the
idea of a free people governing themselves will become a scorn and
a by-word among nations.

PAYMENT OF THE WAR DEBT.

From RKPonr of the Secretary of the Treasury (Hugh Mc-
Cum.och) 1884, pp. xxvii-xxix.

It is in the highest degree gratifying to the Secretary to noticq
the great reduction of the public debt since it reached its highest
point in August, ISfx"), and its continued reduction since his last
report, in 1S08. The following table exhibits the reduction botli
of principal and interest: —

lJ; *>

APPENDIX III.

On August 31, 18C5, the iudebteclness of the United States, not
including bonds issued to the Pacific Railroad Companies, was as
follows : —

Debt bearing coin interest $1,108,310,191 80

Debt bearing currency interest .... 1,273,220, 10;3 16

Matured debt not presented for payment . 1 ,503,020 09

Debt bearing no interest 401,010,311 51

Total debt $2,844,649,626 56

Cash in the treasury 88,218,055 13

Amount of debt less cash in the treasury $2,750,431,571 43

The annual interest charge was $150,977,697.87, and the average
rate paid was 6 yW P^r cent.

On Nov. 1, 1868, the indebtedness of the United States, not
including bonds issued to the Pacific Kailroad companies was as
follows : —

Debt bearing coin interest $2,107,577,950 00

Debt bearing currency interest .... 72,325,000 00

Matured debt not presented for payment . 9,753,723 64

Debt bearing no interest 409,151,898 42

Total debt .^2,598,808,572 06

Cash in the treasury 113,873,019 24

Amount of debt less cash in the treasury $2,484,935,552 82

The annual charge was $126,408,343, and the average rate paid
was 5 ^ per cent.

On Nov. 1, 1884, the public debt was as follows: —

Debt bearing interest $1,206,475,600 00

Debt on which interest has ceased since

maturity 12.517,485 26

Debt bearing no interest 623,468,436 36

Total debt 31,812,491,.521 62

Cash in the treasury 434,008,572 93

lllll

Amount of debt less cash in the treasury $1,408,482,948 69

Si II

624

ECONOMIC HISTORY.

Jii

mm]

The annual interest charge is now (1884) 047,323,831.60, and
the average rate paid 3 ^"1^ per cent.

Reduction of debt in sixteen years .
Reduction of annual interest charge
Reduction of debt in nineteen years .
Reduction of annual interest charge

01,076,452,604 13

79,084,511 50

1,347,048,622 74

103,653,806 37

In the management of its debt the United States has been an
example to the world. Nothing lias so much surprised European
statesmen as the fact that immediately after the termination of one
of the most expensive and, in some res[)ects, exhaustive wars that
have ever been carried on, the United States should have com-
menced the payment of its debt and continued its reduction through
all reverses until nearly one lialf of it has been paid; that reduc-
tion in the rate of interest has kept pace with the reduction of the
principal; that within a period of nineteen years the debt, which
it was feared would be a heavy and never ending burden upon the
people, has been so managed as to be no longer burdensome. It is
true that all this has been effected by heavy taxes, but it is also
true that these taxes have neither checked enterprise nor retarded
growth.

APPENDIX IV.

626

H has been an
ised European
i nation of one
tivo wars that
ihl have com-
iction through
1; that reduc-
luction of the
e debt, which
rden upon the
>nsome. It is
but it is also
e nor retarded

rt V 1 * fc — I - 1 - tc A c '/ X X r. t^ J 1 i 5i -- S ^ ?i 2 to I - ti «? 'JS ^ ?j
V — - Cl J» O X V Ji ™ -»;i - r-. I- ?5 54*1 f-i 51 * i- ^> o\^ »c c 'f fi 5 H

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a ««

e . a
1.1^

<s ■£ a _ „-
■= « T, B a

aj »>

a a
3

S2 S

«5S •§f2

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0.S2 <

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a

B s I ^ -a s^* ■J X
i llillslii

I I I I I O cS 2 (S a

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526

ECONOMIC HISTORY.

THE UNITED STATES IN 1890.

THE rOPULATION OF THE UNITED STATES, 1890.

RODKKT P. POIITKU.

[Eleventh Census Bulletin, No. 16,]

Thk population of the United States on June 1, 1890, as shown
by the final count of persons and families, exclusive of white per-
sons in Indian Territory, Indiana on reservations, and Ahuska, was
&2,{S'2'2^'2'A); including these persons the population will jtrohably
reach in round numbers 0;i,()00,000. In 1880 the population was
50,155,78.'^. The absolute increase of the population in the ten
years intervening was 12,4(5(),4G7, and the percentage of increase
was 24.86. In 1870 the population was stated as 38,558,371.
According to these figures the absolute increase in the decade be-
tween 1870 and 1880 was 11,597,412, and the percentage of in-
crease was 30.08.

UjMin their face these figures show that the population has in-
creased between 1880 and 1890, 869,055 more than between 1870
and 18(S0, while the rate of increase has apjiarently diminished
from 30.08 to 24.86 per cent. If these figures were derived from
correct data, they would be disappointing. Such a reduction in the
rate of increase in the face of the heavy immigration during the
past ten years would argue a diminution in the fecundity of the
population or a corresponding increase in its death rate. TJu-ne
figures are, however, easily explained when the oharn' il

data used is understood. It is well known, the t;<'f
demonstrated by extensive and thorough in' th

census of 1870 was grossly deficient in the Sout State.-. uucl

80 as not only to give an exaggerated rate of intjtftse of the popu-

APPENDIX r.

627

liition l)ot\vpen 1870 ami 1880 ia tliose States b«it to ftffoct very
niatt'riiill}' tlio rato of iiicn-asf in tliu country at large. . . .

It is fair to uHsunio tliat tlie rates of inrrcasc of population of
tlio Southern States between 1800 and 1870 and between 1870 and
1880 were related to one anotlier in a proportion similar to tlio cor-
respondin^j rales in tho Northern States during; the same jieriods.
In tho term "Southern States" is here included tlio two Virj^iniaa,
tho two Carolinas, Georgia, Florida, Alabama, Mifsissippi, Louisi.
ana, Texas, Arkansas, Tennessee, and Kentucky. Tlio census of
1870 is known or ia suspected to bo deficient in all tlieso States.
In tho other States and Territories there is no suspicion of incom-
pleteness. Tiio poj)uliition of tho Southern Statea in 1800, 1870,
and 1880, was as follows : —

1800 10,250.018

1870 11,250,411

1880 16,257,303

The population of tho other States and Territories in 18G0, 1870,
and 1880, was as follows : —

18(10 21,184,305

1S70 27,307,900

1880 34,808,390

hi ■ <•■

'; l.i, .

Tho rate of increase in these other States and Territories waa
28.9 per cent between 18G0 and 1870, and 27.8 per cent between
1870 and 1880. These two rates are so nearly equal that in ex-
tending them to the Southern States they may be regarded as iden.
tical; in other words, it may be as.sumed that the rate of increase
in tho Southern States between 18G0 and 1870 and between 1870
and 1880 were tho same.

Classified as white and colored, the population of the Southern
States was as follows : —

Year.

1800
1870
1880

White.

6,300,70."]
7,067.213
0,592.568

Colored.

3,890,037
4,179,222
6,657.035

ii:

111

528 ECONOMIC HISTORY.

The increase of the white between 1860 and 1880 was 50.67 per
cent, or at a uniform rate for each ten years of 22.75 per cent.
The increase of the colored between 1860 and 1880 was 45.43 per
cent, or at the rate of 20.6 per cent for each ten years. Applying
these rates of increase respectively to the white and colored popu-
lation in 1860 there results as the approximate white population in
1870, 7,815,128 and for the colored, 4,691,385. These results are
in excess of the figures as returned by the census of 1870, in the
case of the white 747,915, and in the case of the colored 512,163,
a total of 1,260,078, which may be assumed as approximately the
extent of the omissions by the faulty census of 1870. The total
population in 1870 was, therefore, apijroximately 39,818,449, in-
stead of 38,558,371.

Assuming these figures to represent approximately the true pop.
ulation in 1870, the rates of increase would stand as follows : —

Per ccDt.

1860. 31,443,321

1870. 39,818,449 26.6

1880. 50,155,783 25.9

1890. 62,622,250 24.8

Omitting from consideration those States in which the census of
1870 is known or is presumed to have been faulty, the rate of in-
crease between 1870 and 1880 in the remaining States has been
very nearly maintained in the decade between 1880 and 1890.

POPULATION OF UNITED STATES IN 1870, 1880, AND 1890 BY
GEOGUAPIIICAL DIVISIONS.

GiooRAPBicAL Divisions.

POPDLAIIOH.

1 iHCREAIIt
FROM 1880

TO 1890.

iNrRKASK
FROM 1870

10 1880.

IRCRKASI
FRUM 1860

10 1870.

1S90.

1880.

1870.
38,658,371

Per cent.

The United States . .

02,622,250

60,166,783

24,86

80.08

22,63

North Atlantic dlTiatnn .

17,401,646

14,607,407

12,298,730

19.05

17.96

10.09

South Atlantic diTlsion .

8,867,920

7,597,197

6,868,610

16.59

29,79

911

North Central diTlilon .

22,3«2,270

17,804,111

12,981,111

28.78

88,78

42.70

South Central dIvi»lon .

10,972,898

8,919,871

6,434,410

23.02

88,02

11,64

Weitem diTision . . .

8,027,61i

1,767,697

990,510

7127

78.48

80.03

APPENDIX V.

529

18 60.67 per
5 per cent.
IS 45.43 per

Applying
lored popu-
)pulation in
3 results are
L870, in the
•ed 512,163,
Liniately the

The total
818,449, in.

le true pop-
llows : —
Per cent

. 26.0
. 25.9
. 24.8

he census of
e rate of in-
es has been
11890.

ND 1890 BY

IKASC

1 1870
1880.

IlfCHIASI
FRUM 1860

TO 1870.

cent.

Per cent.

008

22.63

7.96

10.09

9.79

911

3.76

42.70

S.C2

ll.M

9.40

60.03

IRON AND STEEL INDUSTRIES.

IRON-ORE MINING INDUSTRY.

John Birkinbine.
[Eleventh Census Bulletin, Xo. 113.]

During the year ended Dec. 31, 1889, the production of iron
ore amounted to 14,518,041 long tons, which was contributed by
twenty-six States and two territories, and this output represented
a value on cars or carts at the mines of «$33,351,978, an average of
$2.30 per ton.

The stock of ore on hand at the commencement of the census
year was 1,966,824 long tons, while at its close this amount was
augmented to 2,256,973 tons, an increase for the entire country of
290,149 tons, or nearly 15 per cent. The stoc'.; of iron ore carried
over is equivalent to 15.65 per cent of the production for the census
year, but the increased stock, that is, the amount of ore rained
but not consumed, represents but 2 per cent of the total output
for 1889. Owing to the fact that the census year for mining cor-
responded with the calendar year 1889, the stocks of iron ore on
hand at the commencement and end of the year represented a
larger amount than would have been the case a few months earlier,
the practice of mine managers whose products must reach a market
by means of water transportation encouraging a depletion of stock
at the mines during the shipping season and an augmentation dur-
ing the winter months, when navigation is suspended. . . .

Michigan was by far the large.st producer of iron ore in the
census year 1889, a total of 5,856,169 long tons having been mined,
tlie value of which was .1*15,800,521 at the mines, an average of
.■$2.70 per ton. The tonnage from IVIichigan therefore represents
40.34 per cent of the total, wliile the aggregate value is 47.38 per
cent of that of the entire country.

The credit of holding second rank lies between the States of Ala-
bama and Pennsylvania, the former, from the figures collected, hav-
ing apparently a slightly greater output than the latter. This
uncertainty is owing to the fact that the reports obtained from two of

i,.,

530

ECONOMIC HISTORY.

the larger Alabama mines covered operations commencing May 1,
1889, and ending May 1, 1890, and no detailed record of the
amount of ore produced and labor employed during the three
months of 1890 was obtainable. The position of Pennsylvania is
also affected by the refusal of one large producer to supply absolute
figures; but it will be noted that in the shipments or apparent con.
sumption of iron ores Pennsylvania takes precedence of Alabama.

Alabama is therefore placed second as a producer of iron ore,
with 1,570,319 long tons, valued at $1,511,611, an average of 90
cents per ton. These figures represent 10.82 and 4.53 per cent,
respectively, of {he total output and value.

Pennsylvania closely follows Alabama, its output being 1,560,234
long tons, valued at $3,063,534, an average of $1.96 per ton, and
10.76 and 9.19 per cent, respectively, of the total output and
value.

The other State which produced over 1,000,000 tons in the pres-
ent census year was New Yc.k, which is credited with 1,247,537
long tons, valued at $3,100,216, an average of 2.49 per ton, the
figures representing, respectively, 8.69 and 9.30 per cent of the
total output and value.

These four States therefore produced a total of 10,234,259 long
tons, or 70.49 per cent of the entire output of the iron-ore mines
of the United States, while the value of the ore aggregates
$23,476,882, or 70.39 per cent of the total valuation. . . .

Although the iron ores of the United States are very liberally
distributed, the production in the year 1889 came from compara-
tively limited areas. This statement will be made more prominent
by taking the output of various sections of the country for this
purpose.

If the United States be divided into eastern and western sec-
tions by the most prominent physical feature, namely the Missis-
sippi River, and connecting the headwaters of this stream by an
imaginary line with the Lake of the Woods, the output of that
portion of the United States east of this division in 1889 was
14,043,782 long tons, or 96.73 per cent of the total production of
the United States, and that of the western division 474,259 long
tons, or 3.27 per cent. If the eastern division is again subdivided
by a lino nearly east and west, following the Ohio and Potomac
rivers, uniting these along the southern boundary of Pennsyl-
vania, the northern portion produced 11,153,282 long tons in 1889,
or 79.42 per cent of the output of the eastern division and 76.82

APPENDIX V.

681

per cent of the total for the United States, and the southern portion
2,890,500 long tons, or 20.58 percent of the product of the eastern
division and 19.91 per cent of the total for the United States.

Adding to the stock of iron ore on hand Jan. 1, 1889, 1,966,824
long tons, the production for the year, 14,618,041 tons, and de-
ducting the stock on hand Jan. 1, 1890, 2,256,973 long tons, there
is an apparent total consumption of 14,227,892 tons, valued at
$32,766,506. To this apparent consumption, however, should be
added: (1) the materials which are charged into blast furnaces as
ore, but which are products coming from the puddling and heating
furnaces and the rolls and hammers of rolling mills; (2) the
materials from the retorts in which the franklinite of New Jersey
is treated for the removal of zinc, leaving as a residuum a mixture
of iron and manganese oxides, employed in blast furnaces for pro-
ducing spiegeleisen; and (3) the blue billy or purple ore, the re-
siduum of pyrites burned to produce sulphuric acid, and some of
the silicates of iron, which, as cinder, result from the treatment of
copper ores, may also be utilized and smelted as iron ores.

The following resum^ illustrates the apparent consumption of
iron ore and materials used as iron ore in the year 1889 : —

APPROXIMATE CONSUMPTION OF IRC; ORE, ETC., BY VARIOUS

INDUSTRIES IN 1889.

[Long tons.]

Itemi.

Total.

1 Used in
IRnlllug Mills,
Forges, etc.

Used In

Silver
Smelting.

Used in

Illiut
Furniices.

Total

15,7.3.'3,405

424,600

157,008

16,151,057

Domestic iron ore ....

Foreign iron ore ....

Mill cinder, scale, residuum,
blue billy, etc

14,227.892
863,573

652,000

417,000
7,500

157,008

13,652,984
846,073

652,000

Comparing tli» figures for the census year ended Doc. 31, 1889,
with the census year 1880, it is found that a totJil of 7,120,362
long tons of ore were mined in 1880, valued at $23,156,957, while
the production of the census year 1889 shows a total output of

532

ECONOMIC HISTORY.

14.618,041 long tons, valued at $33,351,978, an increase of
7,397,679 long tons, or 103.89 per cent, over the production of
IHcSO, and an augmented value of $10,195,021, or 44.03 per cent.

The average value per ton of iron ore at the mines haa been re-
<luced from $3.25 per long ton in 1880 to $2.30 per ton in 1889.
This is due to the consolidation of a number of mines which liavo
been grouped under one management, reducing the cost of sui)erin-
tcndence, ofHce force, administration, etc., encouraging the use of
improved machinery and permitting systematic and advancHjd meth-
ods of mining, greatly increasing the output of the mines. Tlie
reduced freight rates, due to improved facilities, shijiping and re-
ceiving docks, special vessels and cars having been built for ore.
handling and transportation, render the comi)etition between the
mines much keener than in 1880. The low co.st of mining ore in
the Southern States has also contributed to this diminution of value
at the mines.

Iron ore was obtained from twenty-throe States in 1880, and all
(if these States, with the exce])tion of Indiana and Vermont, were
prixhu'ers, as reported to the Eleventh Census. In addition to the
States which mined ore as reported to the Tenth Census, there are
added Colorado, Idaho, Minnesota, Montana, New Mexico, Utah,
and AVashington as new producers for the Eleventh Census. t)f
these, Colorado and Minnesota were the only States which contrib-
ute<l largrly to the output of 1889. . . .

Tlie total value of the iron-ore mines of the United States Dec.
31, 1889, was $109,7(;(>,199, as against $(>!, 782,287 invested in
1880 in regular mining establishments, an increase of $47,983,912,
or 77.07 jier cent.

The State of Mi<higan has advanced from second place in 1880,
with a total re] orted investment of $17,490,775, to first jiosition
in 1889, with an investtiu'iit of $41,958,571, an increase of
$24,401,79(). or nearly 140 per cent, or 38.23 per cent of tiie total
capital used in iron ore mining for the United States.

Pennsylvania occujiies second place, with a valuation of $10,-
249.31.3, or 14.80 ].er cent of the total, a decrease of $1,372,388.
or 7.79 per cent from the 1880 valuation of $17,()21,701, when it
occupied tirst plai-e.

New York follows next, occiipying the same relative rank as in
1880, with $12,4S9.4^1, or 11..3S jn'r cent of the total valuation
for the U^nited States, in increase in capital of $4,220,342, or
51.15 per cent.

APPENDIX V.

i33

Minnesota, which produced no ore in 1880, Aliihama, Mis-
souri, and Wisconsin, follow in the order named, the last three
occupying, respectively, ninth, fifth, and fourteenth places in
1880.

The valuation of the iron-ore mines of the above seven States as
reported is $93,422,218, or 85.11 per cent of the total capital in-
vested in ore mining. . . .

The returns recorded show that the mining of iron ore gave em-
ployment directly to 38,227 persons, an increase of G,u59 men, or
20.71 per cent, over the Tenth Census, when the number was
31,GG8 engaged in work connected with breaking down and raising
the ore and delivering it in cars or carts or on stock piles at the
mines. This force was divided as ftdlows: 1,3G() foremen (GSOem-
plo^-od above and G86 below ground), 2,071) mechanics, 12,432
miners, 21,010 laborers (14,531 above and G,479 below grouiul),
820 boys (709 being employed above and 111 below ground), and
520 men in offices. Omitting the latter, the total number act-
ually employed in handling the ore was 37,707, and the aniount
paid in wages direct to miners and contractors reached a total of
$15,458,118. This would show an average earning capacity for
each man employed of $409.95 per annum, and includes the con-
tractitrs' profits and the additional pay allowed to foremen. This is
an increase over the figures for 1880 of $101.01, or 32.70 per cent,
which is due principally to the fact that a larger number of the
mines are now under ground, permitting tiie men to be constantly
employed throughout the year and demanding better skill.

The lowest expenditure for Is bor per ton of ore was in the States
of Alabama and Georgia and North Carolina, where it amounted to
G9 and 71 cents per ton, respectively, due to large open workings
and modern and systematic systems of mining, and in Alabama
aiui Georgia to the soft character of the ore, etc.

In Pennsj'lvania one half of the iron ore credited to the State
c(mu's from the Cornwall ore hills, where tlie soft character of tin-
ore and its accessibilitj' assist in reducing the average cost of labor
employed in mining for the entire State to 75 cents per long ton.
The cost of nuning the hard Lake Superior ores is best illustrated
in the State of Michigan, wliere 81.19 was expended for wages per
ton of ore won. The high cost in Colorado, Idaho, and Montana is
due to the higher rates of wages prevailing in those States and the
small amount of ore won.

In the New England States, New Jersey, Ohio, Delaware, and

ilil

I'lliii!

ilililii!

ill

584

ECONOMIC HISTORY.

Cf'-

'■\('

ii.it*--'

Miirylaiul tlie exploitation of old workings or of scattered di-posita
causes a high cost per ton for wages. The use of improved ma-
cliinery and the predominance of large mines assist in reducing the
cost for labor in Wisconsin, Minnesota, Alabama, New York, and
other States. The partial employment of convicts in Tennessee,
Texas, and Georgia, affects the figures for these States.

Michigan, as the largest producer, naturally gives employment to
the greatest number of persons, namel}', 13,120, or 34.32 per cent
of all the employes at the mines of the United States; Pennsyl-
vania follows with 4,410 employees, or 11.54 per cent; New York
ranks third, its iron-ore mining industry giving employment to
3,178 persons, or 8.31 per cent of the total number of employ«5s;
and Alabama occui)ies fourth ])lace, which'State reported a total of
3,122 employes, or 8.17 per cent. These four States had 23,830
persons, or 02.34 per cent of tiie total, employed in their iron-ore
mines.

Alabama returns the largest output per employe, Minnesota,
Wisconsin, Miciiigan, New York, Missouri, Pennsylvania, Georgia
and North Carolina, Tennessee, Colorado, New Jersey, Virginia
and West Virginia, and Ohio, following in the order named.

The total cost of the ore mined, as represented by schedules re-
turned, aggregates $24,781,()a8, e(juivalent to an average cost of
$1.71 per ton of ore mined against $2.21 in 1880, a decrease of
$0.50 per ton, or 22.G2 per cent. The difference includes more
than supplies and materials. These figures indicate the advance
made in labor-saving appliances and improved facilities for mining
and handling the product of the mines.

In the total cost of producing iron ore Alabama is the only State
which averages less than .i^l jter ton, namely, 82 cents. Next in
order of low cost come Texas, $1.05; Tennessee, $1.08; Pennsyl-
vania, $1.10; Georgia and North Carolina, $1.14. In Colorado
the cost of producing one long ton of ore, $3.4i), is greater than in
any other Statu.

•:4 /flii

■WV:'M:V

APPENDIX V.

686

PRODUCTION OF PIG-IRON.

William M. Sweet.

[Eleventh Census Bulletin, No. 0.]

The production of pig-irou during tlio year ended June 30, 1890,
was tho largest in the history of the iron industry of this country,
amounting to 9,579,779 tons of 2,000 pounds, as compared with
3,781,021 tons produced during the census year 1880, and 2,052,821
tons during the census year 1870. From 1870 to 1880 the increase
in production amounted to 1,728,200 tons, or nearly 85 per cent,
while from 1880 to 1890 the incretise was 5,798,758 tons, or over
153 per cent. The following table shows the production of pig-
iron in tho various sections of the country in the census years 1870,
1880, and 1890, in tons of 2,000 pounds, including castings made
direct from the furnace. The statistics for 1870 and 1»&0 are for
the census years ended May 31, but for 1890 they cover the year
ended June 30.

Mi Ml

DinsioTS.

New England States
Middle States . . .
Southern States . .
Western States . .
Far Western States .

Totol

ToNf OF 2,000 PooiiDa.

Year endwl
Msy 31, 1870.

34,471

1,311,040

184,540

522,161

2,0.J2,821

Tear ended
MaySl, I8bv

30,967

2,401,093

350,436

005,.'J;}6

3,200

3,781,021

Tear ended
June 30, 1880.

a3,78l
5,210,591
1,780,909
2,522,351

20,147

9,570,77!>

I: •: i

From the above it will be seen that the |)ig-iron industry of New
England has been practically stationary during the past twenty
years, while during the same period, and especially since 1880,
there has been a womlerful development of the manufacture of
pig-iron in all other sections of the country.

mil

636

ECONOMIC HISTORY.

The relative rank of the various States is seen to have undergone
many changes since 1880. Pennsylvania still retains its lead<.'i-
ship as the producer of about one half of the pig-iron that is an-
nually made in the United States, producing 51 per cent of the
total production in the census year 1880, and over 49 per cent in
1890. Ohio was second in rank in both 1880 and 1890, the output
of pig-iron in the former year being over 14 per cent of the total
production in the United States, and in the latter year over 13 pur
cent. Alabama, which occupied tenth place in 1880, with an out-
put of G2,3'^C tons, is now the third largest producer of pig-iron,
the production of this State in 1890 amounting to 890,431i tons,
an increase of more than 1,328 per cent over the production of
1880. Illinois, which was seventh in rank in 1880, is fourth in
1890, and New York, which was third in 1880, occupies fifth place
in 1890. Virginia, which was seventeenth in rank in 1880, is now
sixth; while Tennessee has gone from thirteenth to seventh place.

Notwithstanding the fact that the i)roduction of pig-iron has in-
creased from 3,781,021 tons of 2,000 pounds in 1880 to 9,579,779
tons in 1890, the total number of comi»leted furnaces has decreased
during the ten years from C81 to 5G2.

Of the 5(52 coni[)leted furnaces at the close of the census year
1890 there were 338 in blast, of which 110 were anthracite or an-
thracite and coke furnaces, 1G5 coke and bituminous coal furnaces,
and 63 charcoal furnaces. The number of furiuices building at the
date mentioned was 39, of which 9 were in Virginia, 7 in Alabama,
6 in Pennsylvania, 4 in Illinois, 3 each in Kentucky, Tennessee,
and Michigan, 2 in Maryland, and 1 each in Georgia, Ohio, and
Wisconsin.

One of the most noticeable features in the growth of the manu-
facture flf pig-iron in this country during the past decade is the
development of the blast-furnace industry of the Southern States.
In 1880 the South had already commenced to api)reciate the value
of the extensive deposits of iron ore and coal within her borders
and to realize the superior advantages which she possessed for the
cheap production of pig-iron, owing to the close proximity to each
other of these materials, and a number of large coke furnaces were
built in that year and the few succeeding years. The greatest
activity, however, in undertaking new furnace plants was in 1887,
during which year 5 new furnaces were blown in and 25 others
were under construction. There has been but little abatement in
this activity to the present time.

APPENDIX V.

637

The greatest activit}' in the develojunent of the Southern pig-
iron industry during the \y,\nt decade was in Ahibania. This State
produced in the census year 181K), one lialf of all the pig-iron n»a<le
in the South, and was only exce»'ded in production in the United
States by Pennsylvania and Ohio. Virginia and Tennessee now
occui)y) respectively, second and third places among the pig-iron
j»roducing States of the South. Prior to the census year 1890
Tennessee was the second leading manufacturer of pig-iron in that
.section, but the activity which has been noticeable during the past
few years in Virginia, in the erection of new furnaces has placed
this Stiite next to Alabama among Southern States in the ipiantity
of pig-iron jtroduced. In IS.SO, West Virginia was the leading
producer of pig-iron in the South, but in 181K) it was fourth in
rank. The manufacture of pig-iron in Kentucky and Georgia has
been practically stationary during the past decade, and j>rior to the
census year IS'.K) but little progress had been made by Texas. Two
charcoal furnaces were building in that State in the census year
1890, both of which were completed but not blown in at the close of
that year. All of the furnaces in North Carolina, seven in num-
ber, were idle in 1880, and since that year very little activity has
been shown in tlie erection of new works, while the seven furnaces
referre«l to have either been abandoned or are now classed as long-
inactive furnaces. With the exception of West Virginia and
Maryland, nearly all the pig-iron made in the South is produced
from southern ores, and of the quant it}' produced by the use of
mineral fuel, much the larger part is made from southern coke.
Most of the pig-iron made in West Virginia is produced from Lake
Superior ores. In Maryland the recent building of four large
coke furnaces by the I'ennsylvania Steel Company, at Sparrow's
Point, near Haltimore, to smelt iron ores from Cuba, has suddenly
brought this State more prominently forward as a manufacturer of
pig-iron. Two of the furnaces were blown in during the census
year 1890, and of the other two, one is comjjleted and ready for
operation. . . .

The following table shows the production of ]>ig-iron in the
United States, in tons of L',000 jiounds, in the census years 1880
and 1890, arranged according to the fuel iised, with the percentage
of increase or decrease in production in 1890; —

i^il

588

ECONOMIC IIISTOnr.

Fuol Uaad.

Anthracite alone

Mixed anthracite coal and coke,
Coke and bituiiiiiiuUH cual . .

Cliurcoal

Castings direct from furnace

Total

Year *nd«il
Hay 81, 1880.

Torn.

1,112.7;)5
71.1,932

1,615,107

436,018

4,220

3,781,021

Yunr anded
Jaue80,18U0.

I'crrentag*

of liiaraoM

tDl8»0.

Tom.

823,258
l,H7'J,0(t8
0,711,974

655,620
0,929

163.20

848 00

fiO.flO

184.78

0,670,779

163.36

ParcanUn*

of Decraiua

Id 1880.

70.06

The foregoing figures clearly exhibit the important part that
bituminous coal and coke have taken in the growth of the pig-iron
industry since 1880. The larger proportion of the production of
pig-iron credited to these fuels is made from coke alone. A few
furnaces use raw bituminous coal only, and their production is
included in the total for coke and bituminous coal. In the use
of anthracite coal alone as a blast-furnace fuel there is seen to
have been a marked decrease since 1880, while the production of
pig-iron with mixed anthracite coal and coke has more than
doubled. . . .

PRODUCTION OF STEEL.

William M. Sweet.
[Eleventh Census Bulletin, No. 13.]

The total production of steel in the United States in the form of
ingots or direct castings during the year ended June 30, 1890,
amounted to 4,406,920 tons of 2,000 poumls, as compared with
1,145,711 tons produced during the year ended May 31, 1880; an
increase of 3,321,215 tons, or 290 per cent.

The following table gives the production of the various kinds of
steel in the form of ingots or direct castings in 1880 and 1890.
The statistics for 1880 are for the census year ended May 31, 1880,
but for 1890 they cover the fiscal year ended June 30, 1890. A
few steel works produce blister, cemented, and other miscellane-
ous steel, but the quantity made annually is very small, and the
statistics thereof for 1880 and 1890 are not included in the table
below.

APPENDIX V.

589

lUg.

n-ane
WO.

ofDorrMiM
In 1H80.

(.20

70.06

KM)

• •

l.()l>

.78

. . .

(.30

. . .

Kind* or Stkil.
(Ingots ur direct cutiiigi.)

Ui'tseinur steel . . .
Opcnliearth atcel .
Crucible steel . . .
Clnpp-Uritflths steel
Kobcrt-Besicmer steel .

Total

TOMI Uf 2,000 PoUNDi.

Year enilml
May 81, 1800.

986,208
8-1,302
76,201

1,145,711

Ywir rnili-il
JuneaO, I8U0.

3,788,672

504,361

86,580

83,063

4,504

4,466,020

During 1880 fourteen States contained steol-niaking establish-
ments, and steel was produced in that year in each of these States
except Rhode Island and Maryland. In 1890 steel works were
located in nineteen States, and steel was made in that year in each
of these States except Kentucky, Missouri, and Virginia.

Pennsylvania continues to occupy the position of the leading
producer of steel in the United States, producing 57 per cent of
the total production in 1880, and G2 ])er cent ax 1890. Illinoia
wiis second in rank in both years, and Ohio was third. From 1880
to 1890 the increase in production in Pennsylvania was 324 per
cent, in Illinois 241 per cent, and in Ohio 314 per cent. Since
1880 the manufacture of steel has been aban(h>ned in two States,
namely, Rhode Island and Vermont, and seven States have engaged
in its production, namely, Alabama,California, Colorado, Indiana,
Michigan, Virginia, and West Virginia. . . .

The remarkable growth that has taken place in the Bessemer
steel industry of this country during the past ten years is well
shown by the above ligures. The increase in the number of estab-
lishments producing Hessemer steel has been the result almost en-
tirely of the demand for steel in forms other than rails. All of
the eleven Bessemer steel plants that were completed in 1880 had
been built to manufacture steel for rails, many of them being added
to previously existing iron rail mills. Of the fifty-three Bessemer
steel plants at the close of 1890 only fourteen made steel rails dur-
ing that year, and of the total quantity of rails produced over 90
per cent was made by ten of these works. Thus, while the pro-

II:

ECONOMIC HISTORY'.

M
m

m.i

<lii('ti<)ii of Htt'i'l rail« Iiiih nciirly trcMt'd in uinouiit since 1880, the
nunilx'r of t'stuMiHlinicntH fn^Mgcd in tlwir niuinifiu-tur*' hiiH hIiowh
l)Ut little cliiiii^'f in tlic ten ^-cuih, iiitliuiigh iniiny of tlu>H*> workH
liiivf jjriiitiy intn'ii.st'il in size tin<l ftlicii'iify. Tiw coiniK-tition in
till- niunnfiu'turo of ItcsHcnicr Htccl rails IniH coni|K'llf(l iniiiiy of tlu>
mil mills to convert ii lar},'i' part of tlio «t»'or|iro(lnc<Ml liy tlicni into
furniH utlier thun rails, thu ]iro(hictiun uf rails to any consiilerabU-
extent at the present time being possible only in works favorably
located for thu supply of cheap raw materials and operated nnder
the latest and most improved methods of nnmufacture. Incinded
in the total production of Hessemer steel rails during IH'.H) were
(m,!.'?.'! tons rolled in iron rolling mills frum purchased itessemur
stetd blooms.

Whilt! the demand for steel rails has shown a remarkable growth
Bince 1880, thereby forcing a practical discontinuance of the manu-
facture of iron rails, there has also been a rapidly injTcasing use of
steid for nails, bars, rods, wire, and other miscidlaneous forms.
The growth of the I^essemer steel industry in this direction is
clearly shown in the number of plants that have been added to
iron rolling mills during the past ten years for the purpose of
manufacturing steel in forms other than rails. The increased
i|uantity of Bessemer steel mainifactured in these miscellaneous
f(Tms is ajiproximately shown by a coniparisim of tlu' ingots and
rails produced, over 7o per cent of the ingots made in IH.SO being
converted into rails, while in 1890 the percentage of rails made to
ingots |)r(Mluced was only 5l^ per «;ent.

The production of open-hearth steel in the form of ingots or di-
rect castings during 181)0 amounted to 504,;ir>l tons of 2,000
jKMinds, as (compared with 81, .'{((li tons nuide during 1880. In 1880
there were lio establishments containing open-hearth steel plants,
located in ten State.i, and in 185)0 there were 58 establishments
containing open-hearth sti'el plants, located in twelve States.
Since 1880 the manufacture of open-hearth steel has been aban-
doned in two States, Vermont an<l Rhode Island, and four States
have engaged in its manufacture, New York, Alabama, Indiana,
and California. During the past fv'W years great activity has taken
place in the erection of open-hearth steel plants, and indications
point to a still larger production of this kind of steel during the
next f«'w years.

The crucible steel industry has shown but little progress since
1880, the production in that year amounting to 76,201 tons of

I !i

APPENDIX v.

L'jOiK) (xnitulfl, na comjJnnMl with 8/>,j"»."Ui tonw produced in 1890.
Ill 1880 tlitTc were i'{(> t'stiihlisIinii'iitH contiiiiiiiif; cnuriblo Hti-ol
plnntH, lociiti'd in niiit* StatcH, wliilu in 1890 thu lunnbor of etituh-
liHhnit'iitu IiikI increased to 47, located in eleven States. Fur pur-
poses reipiiriMg special j^iiides of steel the ppidiict of the crucildo
process will he always in demand, hut the hi^h cost of nianufacturu
prevents it in many instances from successfully competing in prico
with the other processes mentioned.

The lirst hasi«! ste(d made in the United States was i)roduced ex-
jieriniiMitally at Steelton, lVnn.sylvania, l>y the Pennsylvania Ste«d
Co. on iMay 24, 1884, in a IJessemer converter. The he^inniiig of
tin* manufai^ture of hasi(! steel in this country as a commercial
product, however, dates from 1888, on the L'8th of ^larcli of which
year the first basic open-hearth steel was produced at the Home-
stead Steel Works of Carnegie, rhi|ips, & Company, Limited, at
Ifomestcad, near Pittsburgh, Pennsylvania. Since that date the
manufacture of basic open-hearth steel has been continued at these
works, and during 1890 this firm commenced the erection of eight
additional open-hearth furnaces for the manufacture of basic steel,
of whi(di number four are now in operation, and the remaining four
furnaces are expected to be rea<ly for working in a short time.
When completed thes(> works will contain IG open-hearth furnaces
prepared to manufacture basic steel. The manufacture of basic steel
is now also regularly carried on at the Steelton works of the Penn-
sylvania Steel Company, where a combination of the ISessemerand
open-hearth processes is used. During 1890 the Henderson Steel
and Manufacturing Company, at Birmingham, Alabama, jiroduced
steel experimentally by the basic process. Since the close of the
year the Southern Iron Company has successfully commenced the
manufacture of basic open-hearth steel at its works at Chattanooga,
Tennessee, The Pottstown Iron Company, at Pottstown, Pennsyl-
vania, has also pniduced steel by the basic process.

Ill Cireat Hritaiu and on the Continent the liasic process has been
received with great favor, and large (piantities of basic steel are
made annually by all the leading iron and steel jtroducing countries
abroad. The wonderful growth of the steel industry of Germany
and Luxemburg during recent years has followed the introduction
of this process, the ir(>a ores of these countries being especially
suited to the manufacture of basic stetd.

While the basic process is api)licable to either the Bessemer or
open-hearth process, its use in this country in connection with the

542

ECONOMIC HISTORY.

open-liearth furnace \» mo»^ promising of successful results, and
the in 'ciitions are tlmt tiio growth of the basic steel industry of
the United States will be largely in this direction. The total pro-
duction of basic steel in the United States <luring 1890 amounted
toO-,17y tons of 2,000 pounds, nearly all of which was made by
the basic open-hearth method, a small part being produced by the
dupli!x process, a combination of the Jiessemer and open-hearth
methods.

MUNICIPAL RECEIPTS AND EXPENDITURES.

ItouKKT r. Porter.

It'f™', . .: '1

[Eleventh Census nullotin, No. ^'> ]

TiiK statistics of this bulletin showing in detail the receipts and
expendituri's for one year of oin' hundred |>iini'ipal or representative
cities in the United States, aggr.gating a population of 12, 4-;"), .*{(}(!,
or al)out two tliirds of tlie urban population of the United States,
have been prepared I>y Mr. J. K. Upton. The following table
shows the total receipts and expenditures as elassilied by the
detailed statement: —

RKCKII'TS.

TnxM J130^,226

SperinI iu>i<cii<in6nti>, utrppUi anil

briilip'*

Special MW'Mnenf", wwpni , .

Uoctifo, I ''''"""•

t OtiHT

TiH-n, fltip'i, nnd |i«nitltlva .

WHt«'r«iirk«

lnti'rr«t nn (le|in«lt,«

Inrniiio frDiii funds anil InTfiit-

niCMtK

MiiTi'llitneoui

13,*i«,n36
1,3*1,1157

.tlllATO
2,714, 4tH

18,t>2«,3Blt
676,0.17

in,W2.i'tl

12,HH0,()33

Totnl onllnary rwplpU . , Kin,^!..!^

I.o«n« 8»,.'1.".2,IW.S

Fiinl«nniltriin.fiT!i , . . . 1H,:!S|,'17.1

From Sintf or connly , . . . r.,ll.1,!t47
llnUiirc, oiuli on h«nil lii'nln-

nli'K <>r jcnr

a'i,H44,nM

Gnnd total «a68,024,8tr: I

KXPEND1TUKK9.

Librarirt

Sl'llMlU

Kim

Ilmlth

l.lKliliiig

I'l.lic.'

'.'Iiiirltalilo obJwU

Strt'vU nnd briili^a

Si'ttcri"

lliilMiiiir« and ImiiroYrinpntu
l*ark« and publlr itroundj , .

Siilnrli'd

W'litorwnrka

Iiitcn-Kt nn debt

MiiTt'llnm-oiii . ....

Ti'fnl onllnnrv PxponfM . .

I.onnii

KnndH and »ran»fi'-- . , , .

Dnlnnrc, rn»li iir band at end of

>far

»RlS,2n2
2i'sllPt<,i:.3
11,8(16,402

2,280,317

7,747,818
17,817,436

7,liVl.U01

3a,:.H(),ai9

f>,(M3,510
0.7ir,,070
12 (172,494
ll,8;»,4ri8
111,08(1,761
a2,2ri0,.'M8
»l,8(ll,ik43

i2.'M,fi2lVn66

Mi,4KH,nii

28,;i30,,S86
311,670, 1!«

GraodtoUl t36U,lKM,3-.i3

t4.»i.i,:'--

APPENDIX V.

543

esults, and
industry of
e totiil pro-
i) ani( united
,s niiulu l)y
iced by tlio
)Iic'n-hoartli

JitES.

■cccipts and
jrcsfiitativc

rj,42r),;{(JG,

itod StatPH,
wing talilc
^iod by the

KS.

2il,llit<,173

ll,8«n,402
2.2H<l,317
7.747,318

17,N17,430
7,lti'l,B0l

33,W0,a(«

r>,!>i3,riio

9.71A.ii7()

\'i ii72,4m
ii,K;«,4r*
i'.i.m«i,7r)l

83,'2«l,868
84,H«l,ii4U

C2S4.n9R.flB6

Mi.4>'N,llll
2S,3»U,385

80^70.108

Comparing detailed aniounta expeudt'J by cities with those ex-
pended by States, the magnitude of municipal expenditures is
clearly exhibited.

Omitting amounts on account of loans, transfers, and funds, the
ordinary expoiiditures of the State of Miissachu.setts for the year
ending Dec. 31, 188i), as compiled by this office, was $4,955,009.
With like omissions, the expenditures for the city of lioston for
the year named amounted to $16, 117,04.'J. Like ordinary expendi-
tures of the States of New York, Massachusetts, Pennsylvania,
Ohio, l^lissouri, and Illinois, the six largest States in the Union in
population, for one year uiuounted in the aggregate to $28,859,010,
while in the same jteriod the ordinary expenditures of New York
City alone amounted to 848,9.'i7,094. The State of New York ex-
pended in 1889, for legislative, executive, and judicial purposes
$1,019,127, an amount cinsiderably exeeeding like expenditures in
any other State; but tiie amount for the same period paid for sal-
aries alone for such jturposes in certain cities was as follows: New
York, «a, 488,834; Brooklyn, S2,.'JL'5,084; riiiladelphia. 81,l.'U,;i7f>.

NATIONAL, STATK, AND COUNTY INDEBTEDNESS.

RonKKT p. PORTEB.

[Eleventh Census Bulletin, Xo. 64.]

TiiK total and per capita indebtedness of seventy-nine foreign

nations, the United Stati-s, the several State><, and tlidr res] tive

counties, given in the present bulletin, was prepared by Mr. .J. K.
Upton. Tlie indebtedness of tlie world for 1890 and 1880. us far
as it has been possible to ccdlect the data for this bulletin, with
the amount of increase or decrease, is as follows: —

DiTIUONI.

Debt Lks SiNKwa Fund.

1880.

Total .

I $2n.'.tl7,0!t«,tWil

IfWO.

Incrram.

$3fi,HIH,621,21U tl,0!W,r>7r>.461

Foreign nation* . Wri,rK'W,O7r,,S40 f2.1,4Sl,B72.I8fi #2,lM,Sl3,88fi

ff35U,ii24,3'.''i

TlielJnltcil.'«tiit«"<

8UIM and t«ni-
turlri . . .

Conntira . .

Iil5,962,112 1,922.617,3<H

223.107,<«;i' a!iO,.«6,643
141,'.>60,H45 124,li>-.,(rr

17,M5,S18

DwfMUIO.

Dm?
PER CAriTA.

91,0n(),«l,'-,.262 14.63

67,218.760

1890.

1880.

63 82

80.73

33.16

34.14

14 63

88 a3

3S6

r.79

2 27

3.47

i'!!

544

ECONOMIC HISTORY.

From the summary published it will be seen that ulatively the
burden of debt falls far heavier upon the inhabitants of the prin-
cipal foreign countries, except those of Germany, than upon those
of this country. France in 1889 had a debt per capita of $110.35,
and it is understood that this does not include certain annuities of
an unstated but large amount; Great Britain, though slowl}' de-
creaHing it.s debt, hrfd a burden at that time of $87.79 per capita;
Russia, $30.79; Austria-Hungary, 670.84; Italy, 870.00; Belgium,
603.10; The Netherland.«, 695.50, while that of the United States
was but 614.03, and of its indebtedness nearly one half was made
up of non-interest-bearing notes.

Wliilo individual fluctuations in the amounts of indebtedness of
the seventy-nine foreign nations reported have been considerable
during the decade, the aggregated indebtedness shows relatively
but little change, especially if comi)ure(l with the increase of
population.

The j>ublio debt of the United States shows a gratif^'ing decrease
within the last ten years, the burden per capita having been re-
duced from 638.33 in 1880 to 614.03 in 1890.

The indebtedne-s of the States and Territories has also decreased
607,218,700 during the decade, reducing tlie per capita from 65.79
in 1880 to 63.50 in 1890. It should be remembered, however, that
of the total decrt ' f State (lel)t as reported tliere has been scaled
by refunding in some of the Southern States alunit 6-8,500,000.

The indebtedness of the counties, though increasing somewhat
within the decade, has not kept pace with the increase of popula-
tion, and the per capita has been reduced from 62.47 in 1880, to

Aggregating the national. State, and count ,• indebtedness, the
per capita shows a decrease from 640.59 in 1880 to 620.40 in 1890,
or more tlian one half, and this decrease has been brougb.t about
mainly by voluntary taxation. The aggregate surplus receipts of
another decaile like tlie one just past would relieve the country
from nearly all national, State, and county indebtedness could they
be distributed for the purpose.

A SELECT BIBLIOGRAPHY OF
ECONOMIC II18TOKY.

P
illi

increase of

Acwortb, W. M. Tlie Railways of Eiijjlaml, 2(1 ed. London, 1890.

Tin; Uailways and llie Traders. A Skftch of tlie llailway Rates

Question in Tln'niy and I'raotici'. London, 18!)1.

Adams, Jr., Charles Francis. Railroads: tladr Origin and Problems.
New York, \S7S.

Railroads and I'ailroad (^nestions. Xew York, 1878.

Adams, Henry C. Taxation in the United States 17b!)--1818. Jolm.s
Hopkins University rnblications, Raltiiiiore, 1884. 2d ed., Ann
Arbor, 1888.

rnblic Debts. 2d ed. Xew York, 18.00.

Allard, Alph. La Crise, la baisse ties \'v\x, la, nionnaie. Paris et

r.iiixelles, 18S.-..
Anic, Leon. Kliide snr le.^ Tarifs de Donanes, et .sur les Traites do Com-

niiMcc. 2 toin. I'aiis, 187')
American Economic Asaociation, Publications of. Vols, i.-vi. 15al

tinicire. iSSi-Dl.
Annual Pubticationg.i

Annuaire ile 1 I'^conomie Politique. 48" Annee. Paries, 1801.

Annnaiie ;.tatisticiue de la lielgiciue. XXI. Annee, 18:)i). Rrnxelles,
Lsill.

Constitutional Year-Book. Vol. vii. London, 1801.

.'statesman's Veai-I!(»ik. Vol. xxviii. Lnnd. and X. Y.. 1801.

Statistical Year-I.ook ot .'anada. (Jtli year, 1800. Ottawa. 1801.

Stati.^tisclics J.iln'oucli fur das Dent-sclu'S Reich, ell'tor .lahr. Berlin,
18!)i».

Wliitaker's .\hnanac. London, 1801.
Arendr, O l)i" vertrag.srniisiire Doiipel-Wiilirnnj*. 2 Th. Rerlin. 1880.
Aschrott, P r. The Kni^lisli Poor-Law System, I'a-t and Present.

Trans, by IL Prrston i'honias, with preface by M. Sedgwick.

Lontb:., 1888.
Ashley, W. J. An Introduction to English Economic History and

Theory. The Middle Ages [P„„,k I.].'^ Lond. & X. Y., 1888. '

1 Only the current volume U mentioned.
86

' I

546

ECONOMIC IIlSTOliV

Atkinson, Edward. I'lic Distribution of Products. New York, 1885.
Till! MiiiL'iii of I'lotits. New York. 1887.

Tiie Iiidiisliliil i'nijrnss of the Xiilion. New York, 1890.

Atti della Commiaaione d' lucbieata suil' Kserciziu deilu I'eiTuviu Ituli-

uno. 7 vols. 1881.
Baboau, Albert. Lu Village .sous riiMci(n regime. ;i« ed. rev. et aug.

I'liris, 1.S8-'.

Lii \u' ruralo dims i'luuicinie Franco. Paris, 188.1.

Baeriii either, J. M. Knglisii AsHocintiuii.s of WOiking Men. London,

]8s:).
Bagebot, ^Valter. Lonihard .Street. Otli cd. London, 1875.

l)e|HtM iiiti(»n of Silver. London, i.'^77.

Balnea, Edward. History of tUe Cotton Manufacture in (ireat Britain.

Liindnn, 18).').
Bamberger, L. Die Sciiicksal des lateinisdien Miin/.l)undcs. Berlin,

188,").
Baudrillart. Henri. Ilistoire du Luxe. 1 toni. Paris, 1881.

Les P()jiidati(Uis Hj,'rieolos ile la l-'rance. ['_' toni.] Paris, 18S.')

et SS.

Baxter, R. Dudley. National Debts. 2d ml. London, 1871.

Beer, Ad Ailgemeine Gescliiclite des >Vultliandels. •'{ Abtlt. in i liden

Wirn, 18110 81.
Besobiasof, W. Ltudes sur I'lvonoinie nationale do Jt. Ilussio. St.

I'l'i'rslHiin'u:, l^xii.
Bigelow, E. B 'I'lie Tariff (.^ncstinn. P.pston, Isd'J.
Birbeck, W. Lloyd. Ilistorual Skeicli of tin; Distribution of Lanil in

LuKland. Lun.l. \ N. V., Ls8.V
Bishop, J. Leander. History of American Manufacture from 1008 to

l.>i(iO. 'J vols. Pliiladeiphia, 1801 ISOL
Block. Maurice. Dictionnaire I'^eni'ral de la Politique, 'i'" e<l. 'J torn.

Paris, lsi;7.

Statisti'iue de la I'rance, comparee avec les divers Pays de I'Euroix'.

'2' ('d. L' toni. Pari-., 1.S7.").

Boiteau, Paul, l^tal de la I'r.cu'ppn 17^0. Pari-, l.siil.

Bolles, Albert S. Finanrial lli.-lcry of llie I'liiled .Suites from 1771 to

Iss.".. ;i vols. New York, I.s7!)-i880.
Bourne, E O, The History of tiie Surplus llovenue of 18;J7. '"-'ewYork,

1 ss:..
Bousquet, O. Lo Jiipon de nos jotn-s et les fieliolles di- I'lixtremn Orient.

Paris, 1.S77.
Bowker, R. R., and lies, George (editors). The Keailer's fJnide on

Keonomic, Social, and Political Science, being a classilied Ilibli-

oirrniiliy. New York. lS!tl.
BrachfiUi. H. P. Di- Stiaten F.uropa's. 4 Anfl. Priinn, ISHl.
Branspy. Thomas. Foreiirn Work aiicl l",nirli>h Wau'es. London. 1870.
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Mfl

:ork, 1885.

>9().
BiTovic Itali-

rev. ct aug.

n. London,

reat Urilaiii.

lies. Berlin,

II.

I'iiris, 186')

71.

Ii. in I n.li'ii

Un.ssie. St.

1 of Land ill

rom 1008 to

(■d. 2 toin.

ide rKiiroi>i',

fiom 1771 to

, 's'owYork,

it^ine Orient.

r'8 Gnido on
.ssilied llibli-

18H1.

iiiiilon. 1S7!).
k. 1S18
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Burnley, J The lli.story of Wool and Wool-Combing. London, 1887.
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vol.s. i.iondon, 1888.
Caird, Sir James. The Landed Interest and the Su{i(>ly of Food.

London, 1^78.

India, 'I'lit' Land and the IVojiU!. London, 1883.

Cairnes, J. E. Slave I'ower. I.,ondoii, l.stJ2.

Ks.siijs in i'olitii!id Kcononiy. l.,oiidon, 1873.

Census. Sec (ioveniinent I'nliiiciitioii.s.

Chevalier, Michel. IliHtoiru ct De.scription des Voies de Communica-
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Chisholtn, Oeorge. ilanili'ook of Commercial (Jcoi,'ra]ihy. London, 188!l.
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of the Kaiik of liie United Slat.'s. Washiiinton. Ks:iJ.
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Second .Series. l.,ond., Paris, \e\v York, 1S7'J.

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187.->.

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the Karly and Middle Atjes. I'd ed enl. I^ond. & N. Y., 1800.
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554

ECONOMIC HISTORY.

M '

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Stein, Lorenz von. Lehrbuch der Finaiizwissenschaft. 2 Theile,

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Stourm, Rene. Les Finances de I'Ancien Regime et de la Revolution.

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Cours de Finances. Le Budget, son Histoire et son Mecanisme.

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Stvirmer, G. Geschichte der Eisenbahnen. 2 Th. Statisticbe Darstel-

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Sumner, William G. A History of American Currency. New York,

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Swank, James M. History of the Manufacture of Iron in all Ages.

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Sybel. Heinrich von. History of the French Revolution. [Trans, from

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555

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Tocke, Thomas, and [5th and Gth vols.

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^Il^l

'iii

656

ECONOMIC HISTORY.

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1875.

INDEX.

Ad vALoitKM duties, principle of, 186.

Agrioultiira, systt'in of, in tlie IStli cen-
tury, 08; in tlie lOtli, ')•); injured by
commercial lej^islution, 07; importance
to Gennaii V of, 181 ; con(liti(m oC, in I'-n;;-
land, 212, 215, 219, 22l); in Ireland, 23^-
237; Italian, 303; effects of impro^e-
menls on, 211, 313-310, 320-321.

Alsace-Lorraine, 5(), 330.

Ancien rc'fjime, budi^et of, 75.

Anjon, systiMU of nii'tairie in, 02.

Annuities, conversion of perpetual into
terminable, 140-1 tl.

Anti-(Jorn-Law Leai;ue, formation of, 214;
object of, 210; inlluence of, 218. 22!).

Arkwrljjlil, Sir Kiiliard, bis invention of
tbe water-frame, 31), 40, 12i).

Army, orf^anization of, under Louis XVI.,
83; absence of standing, in America,
417, 422.

Artois, (iiarles. Count of, his opposition to
reform, 73.

Auerstiidt, 87.

Atkinson, Kdward, 208, 318, 410, 546.

Augustus, Kmperor, 27.

Australia and California, effect of gold dis-
coveries in, 250, 204-200, 277-270.

Austria, advantage ot Suez Canal to, 302;
finamial crisis, 357, 3.50, ;i(i3; national
wealth of, 470 ; business failures in, 503.

Auvergne, peasants of, oppose reform, 80.

Baltic ports, hampered by Sound dues,
180.

Banks of Kngland aiul ot France, fluctua-
tions in rate of discount of, 406-497.

Basic steel, ,541.

Baxter, Dudley, estimate of British income
by, 474.

Beddoes, Dr.. assists Pavj'. .52.

Belgimn. 417, 483, 48."), 400. 500. .507.

Bell, Mr., inventions of, for printing cali-
coes, 43-44.

Belligerent and neutral rights, conflict of,
116.

Berkeley, Bishop, 449.

Berlin decree, Uii.

Bertbollet, M., his experiments in bleach-
ing, 43.

Bessemer steel, 312, 324, 438, 442, 448,
530, 540.

Blockade, neutral demands respecting, 100.

Bolton, adopts oott'm manufacture, 35;
birthplace of Arkwriglit and Cronipton,
213; comparison with Lowell, 416.

Boot and shoe industry, displacement of
labor in, by machinery, 320.

Boulton, Mr., of Soho, his connection with
Watt, 40.

Boinse, (!u', 04.

Bradford, dependent on the wool trade, 32.

Br,azil, 0, 14.

Bread, cost of manufacture and distribu-
tion, .321.

Bietagne, .5, 6, 82.

Brienne. ministry of. 81.

Bright, John, 214.

Britain, see Great Britain.

Camfornia, see Australia and California.

Calonne, ministry of, 75; statement of mil-
itary expenses, 78; new measures by,
80; dismissed, 81.

Canada, Frcndi colony of, long under the
government of an exclusive company, 8.

Canada, Dominion of, its growth, 1807-
18!I0, .525.

Canal, Suez, economic effects of its con-
struction, 300-304.

Carrying tride, on the ocean, revolution
of, 305-300; on the land, revolution of,
.300-317.

Chanipaune, land owners in, 56.

China. 308, 413. 415.

Church, revenue of, in 1875, 76.

Clearing houses of London and New York,
returns of, 401.

Coal, difticnities in mining, 51; industrial
revolution due to, 54; reduction in con-

■y •

Ihi >

iM'^ ' '

M' '

ml , ;

(

kHk ^

H^ '

sn- '""

558

INDEX.

sumption of, by ocean steamers, 307;
effect of machinery on, 319 ; use of m\-
tliracite, 41U; increase in ]]ro(luction of,
485; waf^es in ininin;^ of, 405; produc-
tion of, in Canada, 525; pussesbiuu of,
by llic Soutli, 530.

Cobden, Ititliard, and the Anti-Corn-Law
League, 214; on the corn laws, 217, 232.

Colljcrl, manufactures encouraged by, (iU,
C7.

Colipilioun, Mr., speecli of, 231.

Collie, Messrs, fijilure of, 3.')fi, 364.

Colonies, ancient Greek and Roman, 3 ;
Spanish, 4; l'ortuf?uese, 5; of Holland,
7; of France, 8; rapid proj^ress of Knj;-
lisli, !), 2G ; exclusive companies injuri-
ous to, 13; the trade of Uritish, how
resulated, 14-2(), 511-514; the different
kinds of non-enumerated commodities
specified, 15; enumerated commodities,
17; restraints uimn their manufactures,
20; favored by Britain, 22; except as
to foreipin trade, 24; little credit due to
European policy for success of, 28;
their chief indebtedness, men, 30; Kuf;-
lish interference with trade of French,
111-112.

Commerce, restraints on by exclusive com-
panies, 13-14; by navigation acts, 15,
511; F'rench, fettered by pnilds, 05;
effect of American Non-intercourse Act
on, 121 ; policy of France towards, under
the Restoration, 1G8; of Zollverein, 178-
180, 181); treaties of, l!t8, 2!)2-2!)(l ; effect
of Suez Canal on, 300-304 ; improved
transportation and, 307, -'lOO, 48!) ; con-
dition of foreiLjn. an economic symptom,
4i)l ; of Cannda. 525.

Commonable Fields, 102.

Contraband of war, neutrals' demand re-
spectin};, lOfl.

Corn laws, object of, 207 ; of 1801, 207 ;
of 1804. 20!): of 1810, 200; of 1828. 213;
new law of 1840, 231; report of com-
mittee on, 208; injurious effects of, 211;
formal ion of Aiiti-('orn-l,aw League, 214;
Mr. Villiers on the, 215 ; Sir Robert
Peel's opinion of, 219; the slidinp; scale,
220 ; policy of I'eel towards. 230 ; linal
nvii>^ur>' of graduiil renenl, 231 ; their
reliition to the new Rold, 282.

Corporations, restrictions on trade, im-
posed by, 05.

Cotton, early nninnfacture of, 34; inven-
tions which have developed the manii
facture of, 30-43; the factory system
illustrated by its manufacture, 407 ;
statistical and economical comparison

of its manufacture in Great Britain and

the United States, 400-417; the extent

of its production an economic svmptoin,

485.
Cotton-gin, invented by Eli Whitney, 405.
Crises and revivals, periodicity of, 355, 357,

373, 483, 509-510. See Depression.
Crompton, Samuel, his invention of the

mule, 41.

Dakota, wheat product of, 320 ; settle-
ment of, ;)92, 393, 397.

Davy, Sir H., his early career, 52 ; invents
safety lamp, 53.

Decree, Berlin, Nov. 21, 180G, 110 ; at
Warsaw, 1807, 117 ; Milan, Dec. 17,
1807, 118; of St. Cloud, Sept. 12, 1810,
118 ; of Fontainebleau, Oct. 19, 1810, 118.

Deficit of 1787, 80.

Depression, economic, of 1873-1870, 355 ;
universality of, 356-358, 473 ; a cause,
the failure of foreign investments, 358-
304; mildness of its effects in the United
Kingd<an, 304-308 ; question of its con-
tiniumce discussed, 369-373; existence
of. from 1873 to 1879, proven by statistics
and economic sympt(Mns, 409-510; fol-
lowed by a revival, 1870-1883, similarly
presented, 46!)-510; and renewed depres-
sion of 1883-1885, 473-510,

Dettes publl(pies, chap, xv.; augmentation
des, depuis 1870, 450-452 ; dc'penses de
la guerre, de la marine, capital nominal
et interets des dettes, 453 ; conversion
de rentes, 454 ; abaisscnient du toiix
depuis 1870, 359 ; modes d'l'inission,
301; repartition des fonds publics, 462:
nc'gocialion des rentes fran(;'aises aux
sources ('•trangeres, 303 ; revolution
t'cononiiqne, 305.

Di-count, rates of, in 1873, 350; variations
in, an economic symptom, 490-497.

Disturbances, economic, since 1873, an ex-
plainifion of, 321-322.

Domingo, St., French colony of, 9.

Douanes, K^gishition affectant les, 108; les
recettes des, du zollverein, 202.

Dudley, Dud, discovers a mode of smelt-
ing iron with coal, 50.

Dutch settlements in America, slow im-
provement of, owing to government of
an exclusive company, 7.

Duties, modes of levying, 185-188.

l^;riiEU,R mobile, 154.
Edict of Stein, see Stein.

INDEX.

659

Edicts of Hardeiiberg, see Ilardciiberg

P'gypt, cotton of, 415.

Electricity, Industrial use of, 325; future
cftwtH of, uOi).

Employnicnt of labor, changing conditions
of, '318-;i21, aa.l, 4(I7; advantages ef
America in tlie, 417-428, condition of,
an economic symptom, 5(l'i-5U5.

Englauil, linancea of, 17'Jii-1815, cliap. vi.;
a new system introduced by Mr. I'itt in
171)7, 12ii; new impot^t called the triple
assessment, 127; income tax imposed
and repealed, 127-128; explanation of
partial prosperity under heavy taxation,
128-121); inventions rescued England
fnjm linancial rinn caused by French
war, 12:)-1;)1 ; iimoiint of expenditure
during the war (171):)-181.')), lUl ; quota-
tions from Sir John Sinclair's work on
the Revenue containing forebodings of
linancial distress, l;J2-133; amount of
public debt at successive periods from
1736 to 1810, 132-133, 13(J; tabular state-
ment of public income and expenditure,
1792-184!), 134; amount aised on loan,
etc., 135; delusive nature of the sinking
fund, 13(1-137, 142; inconsistent meas-
ures adopted, dead weight annuity, con-
version of perpetual into terminable
annuities, 13S)-142; balances of income
and expoiuliture, 17'J2-1850, 143-144;
excess of expenditure over income dur-
ing the period of war, and excess of
income during subsequent peace, 144;
316 years of peace required to cancel
debt of 24 years of war, 144-146. See
Great Britain.

Europe, colonial policy of, 1-28; little to
boast of, 28-21); except in the contribu-
tion of men, 30; the army in her revolu-
tionf, 83; failure of rye crop in, 234;
rise of prices in, due to new gold, 25.5,
2.57; drain of silver from, to the East,
275; elfect of Suez Canal on the com-
merce of, 302; financial crises in, 357;
rapid advance ni her cotton manufactures,
407; advantages of America for compe-
tition with, 417-427; economic changes
in, 469-473, ,508-510; the wealth of, 474-
477; her indebtedness, 450-468, 543-
544.

Famines, prevention of, 31.3.

Feudal system, the, described, 57-68; over-
throw of, in France, 84.

Finances, diffiiidtics of, Louis XVI., 77-79;
Indicioug policy of Sir Robert Peel, 221-

229. See England, la Restauration, la
France sous le second empire, French
Indemnity.

Flanders, small proprietors in, 66, 62.

Flour, displucement of labor iu the inauu-
facture of, 320-321.

Foville, A. (le, 475, 493.

F'rance, the trade of her colonies, how reg-
ulated, 15; the goVLrument of the colo-
nies conducted with moderation, 25; the
sugar colonies lietler governed than those
of Britain, 26; Huguenots from, settle
in I'Jiglaiid, 46; rurid nobility and peas-
ant population of, 55-63; condition of
towns, 63; of trade, 65; of tnamifac-
tures, 60; decline of national prosperity,
68-70; efforts of reform under Louis
XVI., 71; resistance of privileged classes,
72; the budget, 75; general di-solution
of order, 82; the army, 83; final catas-
trophe, 84; permits colonial trade to neu-
tral ships, 111-116; restrictions on this
trade by Fnglish orders in council, 116,
117; blockade of her ports by ICngiand
118; la Restauration, 148-169; potato
disciise appears in, 234; elT.cts of new
gold in, 251; sous le second empire, 284-
297; payment of indemnity liy, 32(i-350;
investments of, in new countries, 3.5!); in-
crea-e of her public <Ielit, 451 ; sells Lou-
isiana to the United States, 382: irational
wealth of, 475; invested capital of, .500;
business failures in. 503; reciMit tluctua-
tions of trade, 488, 490, 492. 50!).

F^ ranee, la, sous le secoiul empire, c'lap. xi. ;
le credit foncicret le credit moliilier, 284;
anlciir de la sp('culation, 285: la crise de
1857 et ses suites, 286; dc'veloppement du
cn'dit, 287; nouvcau systeme de conces-
sion des chemins de fer, 287; Ics grandcs
compagnies, 288; midliplications des
nioyens de communication, 289; prngres
du commerce extcrieur, 290-'i91 ; le si'^na-
tiis consultedn 25 dec, 1852, 2!)2; nu-sures
relatives ii la disette. 2n2; premiers de-
grevcments, 2!)3; oxpo.iiti(in de 1855, 293;
projet de supprimer Ics prohibitions, 294;
left re du 5 Janvier, 1861); le traitc de com-
merce avec I'Augleterre, 295; autres
traites, 296.

Frederic the Great. 93.

F'reileric William III., edict of emancipa-
tion, 95. J

Free ships, free goods, neutral demands of,
109.

Freight rates, reduction of, .307, .300.

French Indemnity, payment of, a vast
transaction, 326; conditions under which

560

INDEX.

payment was to be made, 320, .I.^O ; jjon-
erul process of payment, 'i'AY-'M'i ; piull-
culiir n eniis employed, 333-337; bills
how iibtaitiiilile for, 338-340; relation of
l''reii(jli Iradc to, 341 ; movement of
preeioiis metals an el -ment in, 343-347 ;
strikiiii; fails sii|,'f,'eNled by, 348 ; tri-
umph over obstacles in, 34'J-350, appli-
cation of, the various items classilied,
350-353.

French Uevolutinn, the, division of classes
before, 55 ; division of property, 50;
feudal system, 57, Gl ; rural nobility,
58; town government, 04; the guilds,
65 ; restrictions on manufactures, 00 ;
wealth of Krance at the period of, 08 ;
in manufactures, 08 ; in agriculture, O'J ;
in commerce, 70 ; schemes of reform,
71-75; the budget, 75-70; inequality in
distribution of taxes, 77; expenses of
the court, 78; the army, 83 ; the ancient
polity destroyed, 84.

Fronie adopts the cotton manufacture, 35.

Gallatin, Albert, report of, 406.

Germany, social and agrariiin clianges ef-
fected in, by Stein and Hardenberg, 80-
108; her neutral markets glutted during
the war 17i>3-181.'i, 110 ; formation, ob-
jects, and adniinistraliiin, of the ZoUver-
ein, 170-200 ; effect of the new gold
upon, 255, 257, 201; payment of indem-
nity to, by Fr;\nce, 320-350 ; application
of the indemnity by, 350-354; financiul
depression in, in 1873, 350, 357, 361 ;
the change in her monetary system, 308;
increase of her public debt since 1870,
451; American advantages in manufac-
ture over, 417-425; national wealth of,
475-470, 480; recent economic progress,
322, 483, 485, 488, 403-490, 500, 509 ;
her penple the largest element m recent
American immigration, 500.

Giddy, Davies, his acquaintance with
Davy, 52.

Giffen, Rubert, economic investigations of,
355, 474, 49.), 501, 500. 548.

Glidstone, .Mr., 217.

Gloucestershire, dependent on the woollen
trade, 32; Koman iron works in, 50.

Gold, an element in payment of French
indemnity, 32:i, 333, .TiO, 343-340, 349;
a special iidvauee <A, nmde by the Bank
of I'rance, 332, 334; its production in
British Colmnbia and Nova Scotia, 525.
Sk New (!(ild.

Grain, vaiations in prices of, in the
17th century, 315 ; effect of improved

transportation on prices of, 311-317.
See Corn Laws.

Great Britain, progre.ss of her American
colonies, 9-13; the trade of her colonies,
how regulated, 14; distinction bc^tween
enumerated and unenumerated commodi-
ties explained, 15; restrains manufac-
tures in An\erica, 20; privileges granted
to her colonies, 22; constitutional free-
dom of her colony government, 24; the
sugar colonies worse governed than those
of France, 20; increase in her trade dur-
ing the war, 1793-1815, 31; introduction
of woollen and cullon manufactures, 32-
36; encourages nuinufacture of linen in
Ireland, 45 ; lack of siucess in silk
manufactin'e, 45-46 ; her great inven-
tions, 30-44, 47-53; gave her wealth and
commercial suprennicy, 44, 53-54 ; her
laborers contrasted with the German,
88; trade if neutrals opposed, during
war with France, lOK, 115; orders in coun-
cil, 110-118: their ab lition, 120-124;
the war of 1812, 124; linauces of, 1793-
1815, 120-147; tariff of the Zollverein
hostile to, 172; the Zollverein participates
in the advantages of. 183-184; imports of
the Zollverein from, 194 ; the Corn Laws
1801-1849. 207-241; their abolition, 231-
233; repeal of the navigatimi laws, 239-
241; advance in general prices due to
the new gold. 252-2")3; a corrective in-
flow of silver to the Fast, 250, 209, 276;
her use of credit, 2.j2, 271-276 ; com-
mercial treaty with France, 23 ,Ian.,
1800, 295-290; distribution system of,
302 ; tonnage statistics of, .305 ; British
wheat niu.ret, 317; growth of her in-
dustries, 32! ; bills ou, in French in-
demnity, 335, 337 ; licpiidationsof, 1873-
1876, 355-374; statistical and economi-
cal comparison of cotton nmnufactures
in United Slates and, 409-417, 425-427 ;
consumption of iron and steel by, 435;
increase of blast-furnaces, 440; expense
of her army and navy, 453 ; growth of
her national wealth, 474 ; cotlcm indus-
tries of, 485-480; postal statistics of,
490 ; foreign trade of, 492 ; prices of
staple commodities in, 493-494; wages
of her coal miners, 495 ; iuvesied capital
of, 499 ; business failures in, 502 ; emi-
gration from. .500; increase in nuirriages,
507 ; her navigation acts, 511-514.

Greek colonies, 3.

Guicnne, system of mctniri" in, 01 ; pro-
vincial assemblies introduced into, 74.

Guilds, restrictions imposed by, 65-67 ;

INDEX.

661

311-317.

hereditary poa8e!<sion salable, 63 ; at-
tempt to abolish, 66,

Hamilton, Alexander, Report ou Manu-
factures, 44a, 54'J.

Hanse Towns, 117, 180, 194.

Hurdenberp:, agrarian IcgislatiMi rf, in
1811, "J8 ; consists of two edicts, 99 ;
riglits commuted by first edict of, 100 ;
principles of iiulcmuification, 101 ; rules
for giiidaucc in tlie application of tliese
princijiles, 102; a:;riciiltural reforms of
the second edict, 103-104 ; restrictions
in edict of 1807 removed, 104; important
passage quoted tnim, 104-100 ; various
measures in, lOO-luS.

Hargreuves, John, liis invention of the
spinniiig-jeniiy, 38, 12!).

Henry HI., restrictions on trade imposed
by, 85.

History, place in, of period from 1860 to
183j, 2U8; summary of recent economic,
322-325, 469-473, 508-510.

Holland, 114, 118, 119, 180, 194, 483, 497,
607.

Hours of labor, reduction in, 503-505.

Human race, the, increased power of,
through railroad agencies, 310 ; com-
mercial relations establish the unitv of,
471-472.

Immigration, American, 28-30, 238, 395,
505-507, 520.

Imports, increase of, in England, 1793-
1815, 31 ; restrictive duties on, in Eng-
land, 40, 207-212; in France, 07, 148-
169 ; in Germany, 185-191 ; effects of
decrees and orders in council, 114, 116-
121 ; oscillations in receipts of, in Ger-
many, 1834-1859, 202; removal of duties
on, in England, 211-233; reduction of
duties on, in France, 294-297 ; varia-
tions in, an economic symptom, 487,
491-492; amount of, in Canada, 525.

Income and property tax, introduction of,
by Sir Robert Peel, in 1843, 224; ex-
empted, in England, 1845, 187.5, 475:
value of property assessed for, in Eng-
land, 224, 474 ; in France, 475 ; in Ger-
many, 476 ; in United States, 478.

Indemnity, see French Indemnity.

India, cotton manufacture an ancient in-
dustry in, 34 ; effects of new gold
upon," 252-258, 268-209 ; due chiefly to
her absorption of silver, 272-270; reduc-
tion in length of voyage to and from,
by Suez Canal, 300-306.

Industries, tee Cotton, Iron and Steel, In-
ventions, Worlds' Econoinif- I'rogresB.

Interest, rates of, 135, 453, 496-497.

International relations, increase and im-
portance of, 409-473.

Inventions, John Kay's tly-shuttle, 30;
Robert Kay's drop-box, 37; John Har-
grcave's spinning-jenny, 33; Richard
Arkwright's water-frame, 39 ; Lowin
Paul's revolving cylinders, 40; Samuel
Croiiipton's mule, 41 ; Edmund Cart-
wright's power-loom, 43; James Watt's
steain-eiigine, 49; Dud Dudley's smelt-
ing process, 50 ; Humphrey Davy's
sufely-lamp, 53; Eli \\ liitney's cotton-
gin, 405; recent, eiiiii icratt'd, 324-325;
general effects of, 53-54, 131, 322-324,
509-510.

Ireland, manufacture of linen in, 45 ; dis-
tress in, 233-236 ; emigration from,
237-238.

Iron, its early use in Rritain, 50 ; the im-
petus given by Dudley's smelting pro-
cess, 51 ; effect of duties on, during the
Restoration, 100 ; exports of, from Zoll-
vercin, 200-201 ; world's production in
1880, 445; iron-ore in the United Staves,
529-534.

Iron, pig, increase in world's product 1870-
1883, 317; in England, 484; in the
United States, 1880-1890, 535-538.

Iron and steel, effect of cheapening on
railroad construction, 318 ; important
uses of, 435-447 ; steel production in
the United States. 538-542.

Italy, 34, 303, 481, 483, 488, 490, 544.

Kay, John, his invention of the fly
Bhuttle, 36.

Kay, Robert, his invention of the drop-
box, 37.

Kendal, dependent on the woollen indus-
try, 32.

Labor, liberally rewarded in the colonies,
1, 9 ; restrictions upon, by the guilds,
65-08 ; rights commuted by the edict of
Hardeiiberg, 100 ; demand for, can only
increiise with increase of capital, 130*-
131 ; decrease of, in the management of
vessels, 305 ; displacement of, by ma-
chinery, 318 ; in cotton mills of the
United States, 318, 415 ; advantages
possessed in America, 417-427 ; cost of,
reduced by machinery, 428 ; strikes a
symptom of its condition, 504-505 ; cost

r-'

-»nl

' iif

iif'

s '1

>f,

•1.

■;

f'''

f '

•».

¥lt ft

•li'-

i' «,f

1,: %.,*

562

INDEX.

' '4

of, in United States iron-oro miiiitig,

Lulidrors, furnirc (if, in Hrilish American
CdliinioH, 10; vfft'cts (if tliu fuudal xyalcni
upon, r)7-(i8 ; iibnlitidn oi " cimlo in
pursuns," liy Sloin, !12, 94; I'liaiiuter of
Ueinian, 184 ; dl' liritisli, ;i70-;t71 ; of
Anii'i'icun, 41ti-421 , variations in tlie
foudilidii of, an ccondniii.' sjniptoni,
oOJ-5(l4 ; nuinbur of, eniployud in tliu
United Ututes iron-ore mining inull:^try,

5;i;i.

Lufuvettc, i\Iur(|nid uf, liis American ex-
pedition, ".'1-74.

Land, (pianiity of, an element in coloniza-
tion, li, 4, 'J, 10; clas^ilicatidn (if, before
and after llie Kevoiiition. 5(j-r)7; "caste
in land" uliolislied by Stein, !I2, 04, UO;
ograrian legislatidii of llardenberg, 98-
107 ; failure of crisis, 1845-1840, 234-
238; effects of improved transportation
and production, 212, 320-321 ; westward
progress of American settlement, 375-
30'J.

Latin Monetary Union, 2!)0.

Lead, Uomans obtained from Wales, 50.

I^vasseur, li., writings of, 251, 505.

Licenses, cdnimercial, number of, 1802-
1811, (tidte) 120; evils of, during tlie
blockade, 120-122.

Linen trade, the, its history, 45.

Loans, amount of money raised by, in
Englaml (1801-1821), i;i5; two distinct
metliods of obtaining, 130-141 ; extent
of, by the IJank (if France under the
Sccoiul I'jniiire, 285-287 ; tlnir employ-
ment of, for payment of French nnlcin-
nity, 331-332, 338-341 ; conversion of,
454-451); inveslments in public, an
ecoiuiniic symptom, 408-500.

London, its money market a great distribu-
tor, 253 ; and e(pializer, 358.

Louis XVL, char.'icter of, 71 ; abortive
reforms by, 72.

Lowell, Francis C, establishes first com-
plete cotton factory at Waltham, 407.

Macclesfield, transfer of .silk trade from
SpitaKields to. 4(1.

Machinery, improvements in cotton, So-
il ; the steam engine, 49-50 ; enact-
ments against, prior to French l^evolu-
lion, 66; displacement of labdr by, 318-
319, 415 ; epoch of elliciint, 32i-325 :
laws ogainst exportation of, by ICngland,
404; cotton, introdnced into America by
Samuel Slater. 403-404 ; Eli Whitney's

cotton gin as important as inventi(ms of
I'lnglisli cotton manufacturing, 405 ; Mr.
Lowell sets up improved cotldii, 406-
407 ; stdppiig(! (if, (luring American civil
war, 414 ; Uritish dpcralives, 370-372;
Anu'rican operatives, 417-425 ; cost of
labor, reduced by, 428 ; advantages of,
430-4.14; important iron products due
to, 435-440 ; recent advancenu'nt in iron
and steel, 441-440, 530-537, 530-542.

Malt^alin, llaron, i'e|iorl of, to Mr. Can.
niug, 185.

Manchester, its early prosperity dependent
on wool, 32; adopts cotton ii.dustry, 30.

Mankind, we llinnan liace.

Manufactures, llritish restraints on, in
North America, 20; fostered by Colbert,
06-07; the protective po'icy of the IJesto-
rati(>;i, 148-169 ; benelieial elTects of Sir
liobert I'eel's policy, 224-220; establish-
ment of, by the /ollvcrein, 172, 181 ;
growth of the factory system, 400-409.

Meats, cost of ocean transpcirt, 303.

Merchants, the government of a company
of, the worst possible for a country, 7.

Metals, precious, the movi'inent of, an ele-
ment in the payment of F'rciich indem-
nity, 343-347. See New Gold.

Mexico, 390.

Milan decree, 118.

.Mining, coal, 51-53; iron-ore, 529-534.

Money, effects of an increased supply of,
244-251, 250-257; efl'ects of a credit sys-
tem, 251-2.")2; kiiuls of, used in pay-
ment of I'rench indemnity, 330, 33.3-
338, 340; investments in credit institu-
tions, 408; C'amiilian savings, 525.

Monopolies, injurious effects of colonial,
7-8, 15-22; the guilds, 05-66; the ex-
ample of England, 232.

Nantes, edict of, the revocation of, 46.
Napoleon I., Uerliii decree of, IKi; Milan

decree of, 118; decree of St. Cloud and

of I''ontaineblean, 1 18..
Nations, increasing relations of, 409-473.
Navigation Acts, l'Jig!isli, enumerated and

uncninnerated connnodilies of, 15-22;

repeal of, 2311-241 ; leading sections

from the, 511-514; American, important

sections of, 51.5-519.
Necker, appointed minister, 74; dismissed,

75; restored to othcc, 81.
Neutrals, historical sketch of England's

policy towards, 110-112; evasion of

belligerent rights by, 11:1-115 ; orders

in council against, 110, 117, 118.

INDEX.

568

Neutrality armed, principles of, 109-110;
ndvuiilaups, llii-l 15.

Newcoinuii, tlic iiivuiitdr of a steam engine,
48; its (Iffi'LtH, 48-4!).

New Kngland, iIju colonial law of .nlierit-
ant'u, 10; inipurtanfc of its lisliery, l(i ;
frecclDni of its n"ViTiinu'iit, 'J5; ihiinKfH
ill the luctdiy pupiilutKiii, 421 ; udvaii-
tnf,'e9 of, for nmniifactiircs, 417-4^)4 ;
reeunt decrease in lier iron niannfactiircs,
5a5.

Xewfoiindland, .'lOS.

New (iold, tlic, cliap. x; a fall in value of
money anil a rise of fjcncral prices,
caused liy, ■242-'24^J ; the rise of prices
nneipial iliirin<; period of aii<;mcnlation,
244; two-l'old process by which tlie in-
creased production operates, 245-247 ;
the laws whicli jjovern tlie rise of prices,
247-2il ; the inlluenee of difl'erent cur-
rencies u|)on the course of tlie movement,
251-257; a clniMf^e in the dislrihution
rather than an increase in the amount
of wealth from, 25'.) ; a loss to com-
mercial nations (jroduecd hy, 200 ; the
order and effects of the movement upon
dilTereiit natKUia, 2li0 275 ; inllueiices
developed hy the movement that com-
pensate for the loss, 275-2V8 ; the un-
equal rise of prices in parliciilar countries
durini; the movement, 278-281.

Norwich, the original seat of the woollen
trade, 02.

(JCE.\N freights, reduction of, due to
economy in consumpiion of coal by com-
pound engines, ;J07-.)t)8.

Operatives, the character of German, 184;
of luiglish, 370-;J72; of American, 417-
425; average product oC, at different pe-
riod-, in cotton milU of the United States,
318, 415.

Orders in council, of May Ifi, 180G, IIG; of
Jan. 7, 18:)7, 117; of Xov. 11, 1807, 117;
of Aprd 2(i, ]8U:), 118; Lord Hrougham
on, 122-124; declaialion by the I'rince
IJegenl to revoke, 124; but too late to
prevent llie war of 1812, 124.

Panics, sef, Crises.

Paris, trade of, in the 18th century, G4;
its mob armed against the ministry, 80;
parliament of, demaiicls an Assembly of
the States (Jeneral. 81 ; treaty of, not the
cause of American industrial indepen-
dence, 401 ; number of new companies
established in, 1881-1884, 500.

Peasantry, French, condition of, prior to
the Kevoliition, 57-03; their emancipa-
tion, 82-85; (lerman, condition of, jirior
to the emancipating edict of Stein, 87-
88 ; the aliolilion of caste in persons and
Herfd(>ni, !)2-!)(i.

Peel, Sir Hubert, adiiiiniittration of, 217;
his policy in regard to the corn laws,
21',)-221;'linaiieial pidiey of, 221-225;
cominereial policy of, 225-22t) ; re|)eal
of the corn laws by, 2.'iU-2.'t3.

Petty, Lord Henry, new linancial depar-
ture by, 145-14(i".

Picardy, siimll landed proprietors of, fi2.

Population, moveinent of, an economic
symptom, 507-508. ^'ce Immigrulion,
United .States Census.

Portugal, colonies of, 5; in 10th century a
great naval power, (i ; her colonial
government, 25.

Postal statistics, econcnnic sigiiillcance of,
4ilO-4!U.

Potato, Ireland and the, 2:t:i-2.'18.

Prices, low, of land iti the colonies, 7 ;
colonial, of Kuropean goods, 15; com-
parison of, of bread hi'fore and since
1781), (i'J; of bread, in Kiigland during
the war (1703-1815), 130; the sliding
scale regulated by, of wheat, 213, 210-
222; increase in, of grain owing to fail-
ure of the potato crop, 23(1; effect of the
new gold on general, 242-283; effect of
railroads and steamships on, 314-315;
of cottim, in relation to the Ameriran
civil war, 41 f; tlieir economic signi-
ficance, \'.)1-V.)\.

Production, in European colonies, 1-.30;
an increase of, owing to the great inven-
tions, 31,51, 53-54; low state of, in
Prance jirior to tlie Kcvolution, 55-08 ;
hindered in Prussia by the caste system,
04; effects of the proleetive system upon,
of iron during the Uestoralion, 100 ;
improved conditions of, in the /ollverein,
184-185; the lessened cost and increased
amount of, owing to recent improve-
ments, 317-320. comparison of intton,
in ISfiOand 18811,415; the world's, of iron
and steel in 1880, 445; the ecniiomic
signilicance of varintimis in the world's,
1870-188,5, 484-4811; of coal and g(dd
in Canada, 525; of iron and steel in the
United Stales, 1880-18'.)l), ,52i)-.542.

Production and distrilnition, average sav-
ing in time and labor of, in recent years,
298; new conditions of, 298-325.

Prussia, see Germany, Stein, Ilardenberg,
Zollverein.

664

INDEX.

I'urfliasiiij,' power, in France, 09; in Eng-
land, l;iU; in America, 4iU.

(iUITCI, 4.

KAii.itoAii construction, recent rciliicfion
in tlif cost of, ;J12, :II8; extent uf, uii
economic sjinptoMi, -JSlMUO; extem<ivo
line of liusaeniur sliel in American, b'M-
540.

Hallways, introduction of, in Germany,
18) ; extension of, in France, '287-28!) ;
avinif;e frcii{lit ciiarnen of American,
;)Ull-;il(l; economic ellccts of, ail-lllo ;
(ierinan aci|iiisili(in of, in AlHacc-Lor-
ruine, JWO-.'MI ; jnvotmcnis liy (iennany
of I'reneli indemnity in, 'iril ; Kpeeiilation
in, l)y new countries, 'MO; comparative
milcatje in J881 of, in tlie United States
Hiid oilier countries, 4'I5 ; tlie world's
mileage, in 188il, !!!(); increase in Cana-
dian mileage, 18(18- 18i)l), r>2r-i.

Reciprocity of foreign countries, speech nf
Sir liohert I'cel on, 227 -22i); beiiellts of,
4(i!)-47;).

Rcslauration, In, politlrpic comnierclale de,
cliap. vil.; de I'esprit des lois douani-
cri's, 1-18; ordonnauce du 2-'i avril, 1814,
1411 ; I'adminlstration et la Chambre,
14!) ; reclamations contre rordonnaiice,
151); droits sur les fers, 150; loi du 17
dccembrc, 1814, ITiI; rapport de Rlagnit'-
Grnndprc/,, ir)2; loi du 28 avril, 1810,
152; loi du 27 mars, 1817, 153; le transit
d' Alsace retiibli, 154; protestations des
ports de mer, 154 ; loi de 181!) .ur
IVclielle mobile, 104; loi de 1821, 155;
ges consequences, 150 ; reclamations pro-
tectlonistes, 150 : loi de 1820, 157 ; loi
du 27 jiilllet, 1822, 157; rapport de
Bouriennc, 158 ; les sucres, 15!) ; les
bestiaux, 100; les fers, 100; prenilfcres
rt'clamntions des manufacturiers contre
le systeme, 100; pretentions de ladroite,
IGl; profession de foi du Ilaron Saint-
Cricq, 101; loi du 17 mai, 1820, 10.1;
attitude du gouverneinent, 163: diiU'-iltcs
du systeme, 104; traltcs de commerce,
105 ; les ('■tildes economiques, 105; ,J. H.
Say et la tlii'orle des di-boiiclies, 105;
projet de loi moiliMv du ininislere Mar-
tignac, 107; caractcre du systeme pro-
tecteur. 108; de la fnveur dont il joiiis-
sait en Kurope, 101).

Revenue, public, and expenditure, before
the Revo!nii(m, in France, 75-80; from
1792 to'l849 in Kiiglaiul, 1.34, 143-144;
18G1-1884 in the United States, 520-

624; 1808-1890 in Canada, 625; muni-
cipal, in the United States, 542.

Kuvolutiun, economic, due to inventionn,
31, 53-54, 208, 324-325, 405, 415, 501);
Rocial and political, ate French Ruvo-
lullun, .Stein.

Uoebuck, Dr., associated with James Watt,
4!).

Romans, the advance of the Roman slower
than of the (Jrcek cohmies, .3.

Rule, of 1750, meaning of. 111; relaxation
of, 112; of 1708, neutral complaints of,
112.

Russell, Lord tlohn, advocates a fixed
duty, 221; fails to form a cabinet, 231.

Russia, reprisals agiiiiist, 110; prolilliitorj'
tarllT of, 193 ; graui harvest of, 1888,
310; increase in i)ublic debt since 1870,
451 ; restrictions upon its goods in the
English Navigation Act«, 512.

Sau.ino-vksski.s, decrease in number and

total tonnage of, 300, 308.
.Savings banks nf ('aiiada, 525.
Say, M. Leon, Report of, discussed, 326-

350.
Schecle, discovers the bleaching properties

of o.\yinuriutlc acid, 43.
Schiiii, Thcodor.v., bis opinion of the

edict of emancipation, 87, 95.
Seal fishery of Newfoundland, changes in,

308.
•Search, right of, neutral demands, 109.
Securities, govcriunent, investments in, an

economic symptom, 498-499.
Serfdom, abolition of, in France, 84 ; in

Oermany, 94.
Shipping, increased cITiciency of, 300-309;

eiic(uirageinent to American, 519 ; amount

of (^iinadiMi. 525.
Siemens-Martin furnace, 446.
Silk traile, tlie, established in England by

the Huguenots, 40.
Silver, the drain of, to the East, 275-276.
Sinclair, Sir John, quotations fr<iin his

work on the public revenue, 132-133.
.Slater, Samuel, erects first cotton factory

with liiucliliu'iy after K.iigllsh models in

America, 403.
Socialism, recent phases of, 505.
Soetbeer, Dr., statistics of, 476.
Southern Slates, the, eslim ited loss to, by

the civil war, 521; the rate of increase

of their population an important factor in

the census, 527-528 ; recent development

of the blast-furnace industry in, 536.
Spain, the colonies of, 4; her assertion of

INDEX.

6G6

can; munl-

iiivenlii>iiK,
•, 415, m)i»;
oiiclj Uuvo-

lnme8 Watt,

Oman slnwor
I.

; relaxatidii
iiniilaiiitH of,

tcH a fixed
liiiicl, -J.'!!,
pniliiljilory
St (if, 1H88,
t since 1870,
;o(iila in the
12.

number and

cussed, 326-

ig properties

lion of the

I, changes in,

inds, lOi).

tmcnts in, an

tncc, 84 ; in

of, 300-30)1 ;
Dl'J; amount

England by

St, 275-276.
ns fi'nm his

, i;i2-i:i;3.
Diioii fiictory
sU models in

)5.

(1 loss to, by

e of increase

tant factor in

devoliipment

i' in, 5:i6.

' assertion of

an exclusive claim to all America, 0;
policy of her trade with tho colonies,
14; cotton introduced hy the Moors into,
'14; reprisals against, ill 180.'), 110; aug-
mentation of debt niiue 1870, 4&1; cuii-
virsiim iif its loan to (Julia, 45U,

Speculation, see ('rises.

.Spices, 5l;l.

Spindles, ,lohn Hargreaves tho first to
make use of a nmnlier of, 38; total num-
ber of, operated in 1880, in the cotlon
mannfaetiire of the I'liited States, 414.

States-tjciieral, demanded, 80; meeting of,
fixed, 81.

Steam engine, invention of, 48-BOi effects
of, upon the priiduetive energies of Great
Britain, 12Ii-131 ; ecoiioniie value of
recent improvements in, 307.

Steamers, ocean, displace sailing vessels,
300-308 ; their increased ellicieney, 305-
308.

Steel, Bessemer, value of discovery of,
312; substitution of, in place of iron,
312-313; prompt introduction of, rails
in America, 442; the United States in
advance of other nations in the use of
(1880), 447, 448; remarltable increase in
'ts use from 1880 to )8!)0 in the United
Slates, 531). »SVe Iron and Steel.

Stein, the emancipating edict of, decreed
in 1807, 8(i; his own account of the edict,
86; Schiiii's view of, 87; its threefold
character, 88; inoilern peasant proprie-
torship not included in,8;(; a description
of, in detail, OO-Ho; text of, 05-07.

Stock, amount ami description of, created
in Kiigland from 1801 to 1821, 135; com-
parison of methods of funding debt in,
in 3 and in 5 per cent annuities, 137-13!!.

Strikes, economic sigiiilicance of, 504-505.

Suez Canal, economic effect of its construc-
tion, 300-304.

Sugar, originally an "enumerated" com-
modity, 10 ; nianufiictiiro of refined,
discouraged in British colonies, 20, 2(i;
increased coiisiiinptiun of, in 1880 in the
United States, 487.

Suicides, variations in the number of, an
economic symptom, 508.

TahikI'-, protective, levied during tho
Uc'^loiation, 148-100; nature of, in the
Zollverein, 185-103 ; prohibitory, in
Russia, i'olnnd, and .\ustria, 193; adop-
tion of free trade by Kngland, 207-233.
Sre Imports.

Taxation, under Louis XVI., 76; indirect,
formei'ly preferred to direct, by British

governmentii, 127; tt eonimon sj.'tem of,
introduced by llio /(dlverein, 178; valu-
ation of property lor, in the United
States, 478.
Tea, increased importation of, in 1880 in
the United States and France, 487, 488.
Telegraph, extent of the electric system,
280-200, 310 ; intlueiice of, on the con-
ditions of commerce, 302, 471; statistics
of its use, a symptom of ecouomic pro-
gresH, 400-401."
Textile inanuliicliires, early history of, in
Kngland, 32-38 ; iniportance of the great
iiiveiilions to, 38-40, 53-'i4 ; resliictions
upon, prior to 1780, in I'laiice, (ill-07 ;
progress of, in (ieniiaiiy, 181-185; de-
velopment of the factory system in the
United States, 400-408; nature and ex-
tent of American cotton manufactures,
400-41U ; advantages of the United
States for competition in, 417-434;
strikes of workmen in, 505.
Tilsit, peace of, 04.

Tin, obtained by the Romans from Corn-
wall, .50.
Tobacco, an "enumerated" commodity,
18; low duty upon colonial, 22; impor-
tation of, in United States, France, and
(Jermany, 487, 488.
Tolosan, on the wealth of France, 08.
Tonnage, statistics of British, 305; of the

woiM's, 308, 400; of Canadian, 525.
Towns, magistracy of, before the lie volu-
tion, 03-04; municipal receipts and ex-
penditures of 100 cities in the Un''"d
States, 542.
Trade, restrictions upon colonial, 1.1-24;
increase of, in England, 1703-1815, 31;
extent of, in France, before and after the
Revolution, 70-71 ; effect of orders in
council upon, 110; development of in-
ternal, of the Zollverein, 178-170; its
policy towards exteriiiil, 187-105; eman-
cipation of English, 207-233; iiiflnence
of the new gold upon, 250-251, 250, 270-
271, 270-280; progress of, in Fr.ince,
201; changes in, through the opening of
the Suez Canal, 300-304; effect of im-
proved fransportalion on, 30.5-817 ; of
improved production, 317-321 ; charac-
teristics of the depression in, 1873-1870,
300; comparison of English and United
Slates cotton, 400; illiistralioii of Ameri-
can advanta-ie for competition in for-
eign, 42.5-428 ; statistics of Canadian,
525. See Worhl's Ixpuomic Progress.
Transportation, early conditions of, in
France, 60; improved facilities of, in the

566

INDEX.

ZoIIver<?in, 178-179, 183-184; mullipli-
ciitioii of means of, in France, 284, 287-
28'J; iiiiliienco of Suez Cii'ial on, 300-
30-1; revolution in the carrying Lrade on
tlie ocean, 305-30!) ; on the land, 30SJ-
312; effects of improved, 312-317; eco-
nomic signilicnnce of, 48'J-4yO.

Treaty, of Amiens, 110, l.'iU; at A'^ienna,
124; between United States and (ireat
Britain, in 1815, I'Jo; Aiif^ld-Krench com-
mercial, of 18UI), •J;io-2.Ki; three I'ranco-
Oernniu treaties or conventions of 1871,
320.

Treaties of commerce, of the Zollvercin,
108-201; of France, under the Second
Empire, 202-207; series ot internatiomil,
470.

Trianon, tariff of, 118,

Turgot, on subdivision of land, Sfi ; guilds
abolished by, 05; counnercial Icf^islation,
67; measures of reform, 72; dismissed,
73.

T'NiTKrt KiNcnoM, see. Great Britain.

United Slates, the colonial progress, 0-25;
advantii^es from neutral position of, in
the French and Fiifjlish war, 113-114;
non-intercourso act by, 121; the war of
1812, 122-124; pciuc concluded, 125;
trade with the /ollvercin, 187; relief
sent to Ireland, 2:i5: Irish emiu'ration to,
2;!(i-2.;8: effects of new pild in, 252, 254-
2.57, 275-270; iiilliii.'iK'e ol the Suez Canal
on, 302; reduction on ocean freight to
foreign countries, 308 ; railroad freight
transportation of, 310: transfer of its
western wl'eat crop, 317; displacement
of muscular l.-ibor in the cotton mills of,
318; crisis of ia7-! in. 350. 350; railway
speculation in, 300; decline of Fnglish
exiMirls to, 3<'i2; low prices in, ."03; in-
creased capacity for pnidnction and
manufacture of iron, 370, 372 ; early
introduction of textile machinery in,
4n0-4'15; growth of the factory system,
405-4'>S: statistical (•dinparison of cotton
manufacture of (ireat Untiiin and, 401);
cliariicter tif the cotton fabrics in ICiig-
land and, 410-413; advantages in indus-
trial cnmpetiiion over Ivimpe of, 417-
424; ability for compel il ion in foreign
markets of. 424-42'); improvements in
cotton manufacture by, 4'l()-434; con-
smnption of iron and steel in. 435. 531;
the various uses of iron ami steel by,
435-43!), 540; progress of the iron and
steel industries, 441-440, 520-542; na-

tional wealth of, 477-470; consumption
of tea and coffee in, 487; revival of
trade in 1880, 400, 402 ; statistics of
failures in, 502 ; variations in the de-
mand for laborers, 1870-1885, 503-504;
strikes in, 505; innnigraticjii returns of,
500 ; increase of marriages in, an eco-
nomic syio))tom, 507; important sections
from navigation acts of, 515-519; cost
of the (Jivil War, 520-522; payment of
war debt by, 522-524 ; production of
iron ore in 1800, 520-534 ; of pig iron,
535-538; of steel, 5:18-542; municipal re-
ceipts and expenditures in 100 cities,
542: the national, state, and county in-
debtedness, 543-544.
(inited States Census, of 1700, 375-381;
of 1810, 381-.383; of 1820, 38.3-385; of
1830, 380-388 ; of 1840, 388-38!) ; of
1850,3i)0-;i01: of 1800. ;i!ll-303; of 1870,
303-305; of 1880, 305-30!); of 1800, ,521)-
528.

■Vei!saii.i.i:s, treaty signed at, Jan., 1871,

320.
Vessels, economy in constructi(ni and inan-

ageincnt of, 305; sailing, disappearance

of, 308.
Vienna, crisis of 1873 begins in, 350.
Villainage, abolition of, 08.
Viilier.s,'Mr., 213, 215, 210, 221.

Waok.s, comparison of, in the 18tli and
lOtli centuries in France, 08-ll!l ; demand
for labor can only increase with increase
of capital, 130 ; necessarily higl'.er in
London than in the country, 130; cein-
parison of weekly wages in 17!lO and
1800, in iMigland, 130; of cotton-mill
operatives, in Kliode Island in 1840 and
1880, 318; on wheat f:ir]ns in the United
Stales and l'russi;i, 321 : of ICnglish work-
men, 371 : of women in cotton mills of
Lowell, 415: variations in, an economic
symptom. 4!)4-4!lO; increase in, in the
iron ore miuieg iudii-trv of the United
States from 1880 to ISDO, 533.

War, cost of French, to Kugland 1703-
1815, 124, 131; co-t of In r American
war, 133-134; mctbo(l of payment, 136-
147; cost of the .An 'rican civil, ,520-
,522; the p.aymeiit of the war debt, 522-
524.

Watt, James, his invention of the steam
engine, 48-40.

Wealth, increase of, caused by the groat

INDEX.

667

inventions, HI, 44; estimate of, in France,
08-71 ; public iiicdinc ami cxpoiKliture
of the L'liik'd Kiii{;duiii from 17112-1849,
134; liuaucial [xilii'y of Sir Kobert I'ed,
221-2'2'J; cliaiif^o in distribution ratlier
than in the increase of, from tlie new
gold, 25!) ; cost of Kranco-tjennan war to
France, ;J27--i28; result of the war on
German liiiaiice, •'iol; increase in na-
tional, an evidence of economic pro-
gress, 474; in Great Britain, 474; in
France, 470; in Germany, 47(i; in Aus-
tria, 470; in the United States, 477; cost
of the American Civil War, 520-522 ;
payment of tlie war debt, 522-524; Ca-
nadian, 525.

West Indies, tlie remoteness of, greatly in
favor of its Kurnpoaii colonies, 4; the
sugar coliiuies of Kranc'' belter governed
than tliose of Hritaiii, 20; trade of, with
Europe carried on by neutrals during
the war, 17i)-M810, ifl-IU.

Wheat, price of, in Kiisl.u-l in 1801, 207;
in 181)4, 2(18; at the cmiclusion of the
French war, in 1815, 209; the sliding
scale of 1829 regulated by the price of,
213 ; increase in price of, owing to the
failure of the potato crop in Ireland,
236 ; moiiieiitous consequences of im-
proved conditions of production and dis-
tribution in the instance of, 313-317,
320-321.

Whitmore, Mr., his opinion of tlio corn
laws, 21 1.

Whitney, Kli, invention of the cotton gin
by, 405.

Woollen industry, the most ancient and
important in Great Britain, 32; meas-
ures taken for its promotion, 32-33;
enactments against tlie exportation of
the machinery, 400-401.

Work, reduction in the hours of, a reason
for strikes, 504.

Workingmen, character of the German,
184; condition of the ICnulish, 371; ad-
vantages of the Amerii'aii, 417-423.

World's economic progress, the, 1873-
1885, clia|). xvii.; rapidity of, in recent
years, 4i)l)-473; increase in national
wealth, an evidence of, 474; in Great
Britain, 474; ia France, 475; in Ger-

many, 47G; in Austria, 476; in the
United States, 477; causes of, 47U-481;
symptomatic metliod of estimating, dur-
ing a fixed period, 481-482; primiiry
symptoms of, 483; extent of production,
483-480; extent of consumption, 480-
489; changes in transportation, 489-
490; state of the money market, 491;
foreign trade, 492; secandary symptoms
of, 492; variation in prices, 492-494;
in wages, 494-490; rate of discount,
490-497; investments and dividends,
497-501 ; bankruptcies and lailures, 502;
reflective symptoms of, 503; condition
of the working classes, 503; strikes, 504;
immigration and emigration, 505-506;
relative frequency of births, deaths, and
marriages, 507-508; the future, 509-
510.

Youso, Artlmr, travels in France of, 50,
59, 02, 550.

ZoLLVEREiN, the, motives for its forma-
tion, 170; sentiment of national unity
created by, 171; the union not due to
commercial hostility towards other
States, 172-173; the various treaties
which preceded the final league, 174-
170; its extent and population, 177;
objects of, 178; results from, 179; three
desiderata of, 180; future iiillueiices of,
181; its facilities for inland trade, 182-
183; special advantages possessed bj",
184; tariffs of, 185-193.

Zollvercin, le, historique de cette associa-
tion, 190: population des l-;tats associt^s
en 1801,198; traiti's de commerce avec
les principaux pays du inonde, 198;
valeur de son commerce de 1835-1858,
199; principaux produits importi's et
exportes en 1834, 1844 et 1857, 200;
commerce avec la France de 1847-1858,
201; recettes des douanes de 1834-
1S59, 202; rocettes en 1858 et 1859
classees d'apres les I'^tats de rUiiion,
2')3; partage de la recette entre les
divers I'^tats, 203; navigation, 204, avau-
toges du Zollverein, 2U5>

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