COMMERCE OF THE UNITED STATES Continued.

GROWTH OF INDUSTRIES; INVENTIONS AND DISCOVERIES;
FOREIGN TRADE.

The Southern states were the scene of the conflict, and re-
sounded with the tread of armies. As a consequence, the pros-
perity of the South was arrested during the war and its fields
and towns destroyed or damaged. The North held the mechani-
cal industries of the country, and under the stimulus of war these
industries were expanded to their fullest capacity. Business of
all kinds in the North prospered, prices were high, and the armies
in the field were sustained and paid by a thrifty agricultural and
manufacturing domain behind them. The agricultural South

could not compete with the manufacturing North.
After the war Prior to the war, the diversified resources of the

South were not appreciated scarcely noticed.
Her rich deposits of iron and other ores, the coal to work the
ores, her timber and stone and her water power were almost
untouched. It was actually contended that manufacturing could
not be profitably carried on in the South on account of climatic
influences. But the war not only revolutionized the system of
labor in the South, but thereafter began the mechanical develop-
ment of the Southern states. With the return of peace, attention
was turned to the elements which are essential to industrial
development, and there has since grown up in that section an
extensive factory system. The South found that besides the
capacity to raise cotton and tobacco for domestic and foreign
consumption, great sources of wealth were hidden beneath the
surface in the mineral deposits of the country. Thus near
Birmingham, Alabama, rich iron mines were discovered, with

133



COTTON INDUSTRY. 1B3

coke-making coal and limestone needed for smelting and mak-
ing steel near by, and thus the cost of making did not involve
the transportation of either of these products. As a result,
Birmingham has now become an important manufacturing
center.

For a time directly after the war, and as its natural conse-
quence, agriculture and all other industries in the South were
depressed, and society was more or less discouraged, disorganized
and in a state of doubt. Fears were entertained that their great
staple, cotton, would not be raised so plentifully under free
as slave labor, but the contrary was proven to be the case. The
Growth of the largest cotton crop prior to the war was in 1860,
cotton and and amounted to 4,669,770 bales. This yield was

other Industries ^ reache( j &gain untn Ig71? and gince 187 g there

has never been a year when the crop did not exceed that of 1860,
while in 1901 it reached the enormous total of 10,383,422 bales.
While formerly the South exported nearly all of her raw cotton
or sent it to the mills of New England, she now manufactures
a very large part of it, 1,583,000 bales having been woven by
southern cotton mills during the year 1901 as against 1,964,000
bales manufactured in the North. The opening up of coal mines
in the South for fuel supply, and the movement of northern
capital and skilled labor southward, may be ascribed as the
reasons for the increased manufacture of cotton in the South.

The growth and development of the cotton industry in the
South during the past forty years may be almost taken as an
example of the general development of the country in all lines
of activity. New industries have been constantly appearing and
old ones enlarging. New processes and improved machinery
have been constantly reducing the cost and utilizing products
which formerly were considered worthless. Many industries
have passed from the household or small shop to the large fac-
tory, where steam power or electricity have supplemented man
power, and thus cheapened production. The wonderful devel-



134 HISTORY OF COMMERCE.

opinent of the natural resources of the country, the ambition
manifested by the people in all lines to supply home demand,
ever increasing on account of a large immigation, and to have
a share in foreign markets, have tended to stimulate all lines
of manufacturing during this period. Added to these, the pro-
tective tariff has given an additionl encouragement to a large list
of industries, and assisted in the general commercial advance-
ment.

In no class of industries has there been a greater advance-
ment in the methods of manufacture from the raw to the finished
product during the past forty years than in that of iron and
steel, and in none has there been produced a greater diversity of
finished products. The processes through which the metal
passes, from the ore in its natural form up to the manufacture
of almost an unlimited variety of articles for man's
steeiTndustry convenience, ranging from the spiral watch spring
up to the mammoth beam of structural steel, is
a triumph of inventive genius. One of the principal causes
of the enormous development of the steel and iron industry has
been the demand for railroad track, incident to the expansion of
our railroad systems. Iron rails were formerly used, but steel
has almost entirely superseded them. The substitution of coke
for coal and charcoal in the production of pig iron, and the
cheapening of the process of the manufacture of steel caused by
the introduction of the Bessemer and Siemens-Martin or open
hearth system, have tended to facilitate the use of steel in the
construction of buildings and otherwise, while the invention of
new machinery usually necessitates the use of steel in its con-
struction.

In 1859 petroleum was discovered in Pennsylvania, and the
supply from that region and from Ohio has thus far proven
inexhaustible. A method of refining the oil was soon after
devised, and there are now over two hundred products of this
mineral oil used for illuminating, lubricating, etc., the whole



PACIFIC RAILROAD. 135

constituting one of our most important industries. A great

demand for this oil in its various forms has made it an important

article of domestic and foreign commerce. Thou-

Sands f mlleS f P 1 ? 68 haV6 ^ QeU l ^ fr m

wells to the seaboard and the Great Lakes,
and extensive refineries have heen established in New York,
Philadelphia, Cleveland, Buffalo and Chicago. Large discov-
eries of fuel oil were made in Texas in 1901, affording a valuable
source of supply to western consumers, and proving especially
fortunate for use upon the great prairies of the west where wood
and coal are scarce.

In 1867 the United States again enlarged its territory, by the
purchase of Alaska from the Russian government for $7,200,000.
This has proven to be, like other extensions of our boundaries,
a profitable investment, the seal fisheries alone being worth
Alaskan much more than the price paid for the entire

Purchase country. Alaska is 1,200 miles long from north to

south, and 2,100 miles wide from east to west. It
is the chief source of supply of salmon fish, which abounds plen-
tifully, and the industry of fish canning here is the largest in the
world. Valuable gold mines have been discovered and par-
tially developed, and the country is no doubt rich in other
minerals. The extensive forests will also prove a source of
wealth to the nation.

One of the most important achievements of the decade fol-
lowing the Civil War was the completion in 1869 of the great
transcontinental line of the Pacific Railroad. The astonishing
development of the Pacific coast, and the travel and traffic that
inevitably followed, created an imperative need for a cheaper and
easier method of transportation to and from the
Railroad eaast. This great achievement in railroad build-

ing, difficult as it was, has since been followed by
other routes across the continent. The cheapening of transporta-
tion, together with improved facilities for carrying perishable



136 HISTORY OF COMMERCE.

freight, has enabled California to market her fruit, one of her
great products, throughout the East. The Eastern and Middle
states have been brought next door to the West, and prices of all
commodities have tended to become lower to the consumers. Vast
areas of unproductive and apparently barren land in the West have
become productive and valuable because they are brought within
reach of a market.

At the commencement of the Civil War our foreign trade foot-
ed up about $700,000,000, the imports and exports being nearly
equal and the balance being about $20,000,000 against us. Our
principal export at that time was cotton. The war blockades
seriously interfered with foreign commerce, and especially re-
duced our exports, so that in 1865 these amounted to only
about $166,000,000, almost wholly from the Northern states.
The great staple, cotton, had been neglected or destroyed and
very little raised. Industries in the South were prostrated, and
Foreign home consumption demanded nearly all the North

Commerce after produced. But the foreign commerce quickly
regained its activity, and continued to increase
until arrested in a measure by the panic of 1873, the imports,
however, considerably exceeding in value the exports. The
principal industries of the country at that time were the tex-
tiles, clothing, lumber, iron and steel, leather, boots and shoes,
flour and meal, sugar, paper, printing and publishing, farm
implements, carriages and liquors, malt and fermented. The
principal exports consisted of the great natural products, cotton,
petroleum, tobacco, wheat, lumber and iron, for the United States
had not yet arrived at the point where its manufactures could
compete with those of Europe. The depression which followed
the panic of 1873 caused a falling off in our foreign trade, but after
1875 trade revived, and for nearly ten years showed a steady in-
crease. The exports now began to exceed the imports, and
with slight exception have continued in that relation until the
present time. Since 1896 our imports have increased com-



FINANCE. 137

paratively little,* while our exports have enormously extended,
leaving a balance of trade in our favor of nearly $700,000,000.
The United States is now a vast exporter of meat and other
food products, while its manufactures are constantly finding a
wider market. The skill and ingenuity of American workmen,
with the latest and best types of machinery, enable the United
States to manufacture goods cheaper than Europe, while paying
American workmen larger wages than are paid in the old world.

In 1861 the Canadian banks throughout the country suspended specie
payment. The National Treasury was empty, and to carry on
the war the government resorted to an issue of paper money,
called "greenbacks." The volume of this currency ran up to
$450,000,000, and, as was inevitable, depreciated in value, thereby
causing a rise in prices of commodities. Two years later (1863)
the National Banks came into existence, with authority to issue
paper money based on their deposit of government bonds. Thus
the country went entirely upon a basis of irredeemable paper
Resumption money. After the war closed, it was the desire of
of specie the government to get back towards a specie basis,

and to that end proposed to gradually pay off and
retire the greenbacks. This was done until the volume had been
reduced to $356,000,000 in 1868.

There was a general outcry against a contraction of the
currency. Speculation throughout the country was active
and business was constantly expanding. Corporations, indi-
viduals, cities and states were active in the promotion of their
various enterprises and works. An unprecedented mileage of
railways was constructed, and a corresponding bonded indebted-
ness floated. Thus the condition of the country was unstable.
Our foreign commerce from the year 1872 had been very un-
satisfactory, the balance of trade setting heavily against us, and
foreign investors had called in some of their loans. The crash
came like a clap of thunder out of a clear sky when the firm
of Jay Cooke & Co. failed in New York. This was the begin-
ning of a general break in public confidence, and
Panic of 1873 i numerous failures of banks and business houses
all over the country followed. Credit in busi-
ness was refused, and debtors everywhere were pressed for pay-
ment. There was a general run upon savings banks, many of
which failed, disclosing shocking irregularities in management.
The prices of agricultural products declined, and manufactured
goods were a drug on the market. Factories closed or ran on
short time, and thus the months drew on until after nearly two
years business began to revive again. Severe as the lesson had
been it taught the people the necessity for a stable currency,
and resulted in steps being taken to reach the resumption of
specie payment, which was accomplished in January 1, 1879.

About 1876 there was a great advance in the production of
breadstuffs in the United States. The vast wheat fields of
Dakota were opened up to cultivation, and with improved farm
machinery and facilities for handling the immense volume of
grain there produced, grinding it into flour, or exporting it in
bulk by waterways to European ports, an immense industry grew
up and greatly added to the volume of our foreign trade. The
United States became at once the greatest exporter of wheat
and breadstuffs in the world, selling about one-
fhfNorthwest half its cr P to foreign countries. The method of
manufacturing flour was revolutionized and cheap-
ened about this time by new milling processes, and with low
rates for shipment by rail and water routes to the seaboard
through the Great Lakes and Erie Canal to New York or the
St. Lawrence River to Montreal, where it was loaded into
ocean steamers, we were able to supply Europe with breadstuffs
cheaper than from any other source. In 1867 the United States
exported a little over eight per cent, of its wheat product, but
in 1880, with the increased production and foreign market



THE McKINLEY BILL. 189

opened up, this percentage had risen to more than forty per cent.,
and now Great Britain buys four-sevenths of all the flour the
United States has to sell.

The McKinley bill which became a law in 1890 enlarged the
free list, but advanced the duty upon many manufactured arti-
cles. The sugar consumed in the United States in 1890
amounted to nearly 1,500,000 tons, of which only 250,000 tons
were domestic product. Thus the protective duty on this article,
while benefiting the Louisiana planters, served to raise the price
on all sugar consumed throughout the country, and had little
effect in increasing the volume of the domestic output, owing
to the fact that the area of sugar land in the South was limited.
On the other hand to remove the duty entirely would destroy
the sugar planters of the South, who would be
u tterly unable to compete against the sugar grow-
ers of Cuba, owing to the fact that sugar can be
produced much cheaper in Cuba than in Louisiana. The Cuban
grower does not replant his cane oftener than once in eight
or ten years, while the Louisiana planter must replant every
second year. The Cuban grower also has the advantage of a
more favorable climate and a longer grinding season, with no
damage from frosts. Therefore, to protect the Louisiana sugar
grower and the public, the McKinley Act put sugar on the
free list, and paid a bounty to domestic sugar producers. At the
same time a discriminating duty of one-tenth of a cent per
pound was placed upon sugar imported from countries which
paid a bounty upon sugar exportation.

But the most important and interesting feature of this tariff
legislation was the reciprocity feature, due to the far-seeing
statesmanship of Secretary of State James G. Blaine.* His
foreign policy looked to a trade federation of the countries of



"Thomas Jefferson was the originator of the reciprocity idea, and in a
report to Congress in 1793 recommended reciprocity as the true method of
meeting the problem of our foreign commerce.



140 HISTORY OF COMMERCE.

the Western Hemisphere. He elaborated the Bureau of Ameri-
can Republics, and through his efforts, under the administration

of President Harrison, a Pan-American Congress
Reciprocity was held in Washington presided over by Mr.

Elaine. Reciprocity treaties were concluded with
several countries, considerably extending our trade. Those with
Germany, France, Belgium and Italy resulted in relieving Ameri-
can pork from the embargo placed upon it in those countries.
Under the policy of reciprocity our foreign commerce increased
rapidly. Thus in 1891 we sent to Cuba approximately 115,000
barrels of flour; in 1892, 366,000 barrels; in 1893, 610,000 bar-
rels; in 1894, 662,000 barrels. After the repeal of the act, we sent
Cuba in 1895, 380,000 barrels of flour; in 1896, 177,000 barrels;
and in 1898, 130,000 barrels.

Nothing has contributed to the commercial growth and
development of the United States more than its railroad system,
which now reaches, with its multitudinous branches, nearly every
village in the eastern half of the republic, and all of the im-
portant towns in the western portion, while the trans-continental
lines provide great highways of travel and transportation from
ocean to ocean. The growth of our railway systems, from their
unpropitious beginning in 1827 to their present gigantic propor-
tions, embracing a mileage of nearly 200,000 miles, is one of the

most animated chapters in our national history. The
Railroads United States has a far greater mileage of railways

than any other country more than all Europe, and
nearly one-half that of the entire world. About 1,300,000
freight and 26,000 passenger cars run upon these tracks, and
the net earnings foot up nearly $400,000,000 per annum. But
the railway systems of the United States have not only extended
in mileage but in even a greater degree in their capacity to move
freight and passengers. The roadbeds are more substantial than
formerly, the rails larger, heavier, and of steel instead of iron;
the roads have fewer curves, lower gradients, steel bridges,



LAND TENURES. 141

double tracks, larger cars and more powerful engines, so that
trains haul heavier loads and make better time.* Numerous
safety appliances, signals, improved air brakes and other devices
now contribute to the safety of railroad travel, and reduce the
loss by accidents. Withal there has been a general cheapening of
carrying cargoes, the average cost of carrying a ton of freight one
mile now being less than one cent, whereas in 1865 the cost was
upwards of three cents. With lower freight rates and quicker
service, together with refrigerator cars and special facilities for
carrying live stock and perishable articles like meats and fruits,
the market for these has widened, their price has cheapened and
become more uniform, and the cost of the necessaries of life to
the consumer has constantly tended to become lower.

Allusion was made to the division of the landed estates of
France under Napoleon, by which agriculture was greatly im-
proved, and also to the division by Henry VIII of England of the
large landed properties held by the monasteries during the six-
teenth century, and the beneficial effect of this division upon the
commercial welfare of the kingdom. Under the English law of
primogeniture the eldest son inherits the entire estate of his
father, and as a consequence there are yet large bodies of land
in England which have been held intact by a single individual
and his descendants from generation to generation for
hundreds of years, and which cannot be sold or di-
vided. This is greatly to the disadvantage of the agri-
cultural classes. To be able to own the
Land Tenures little farm which he tills is a great encouragement
to the small farmer. He at once becomes interested
in its proper and successful tillage, takes care of the improve-
ments, and is decidedly a better farmer. The law of primo-
geniture and also the English doctrine of entailment, whereby
a testator can limit or restrict the future ownership of an estate



*The time between Chicago and New York has now been reduced to
twenty hours.



142 HISTORY OF COMMERCE.

to certain persons and their heirs, was introduced into this
country as a part of the common law of England, from which
our system of jurisprudence was borrowed. These laws
were like a "dead hand" upon the land, sending it down for gen-
erations in the line of the eldest male. The aristocratic families
in New York and south of Pennsylvania were favorable to these
laws, as sustaining and perpetuating their leadership. Massa-
chusetts abolished these laws of inheritance but recognized their
spirit to a degree by giving a double portion to the eldest
son, according to the Mosaic code, but divided the rest among
the daughters as well as the sons, and this system prevailed
generally throughout New England and also in Pennsylvania;
but after the American Revolution, the founders of our repub-
lic, recognizing its injustice to a portion of the heirs of an
estate, and its objectionable feature as a hinderance to commer-
cial progress, chiefly through the efforts of Thomas Jefferson,
abolished it. Estates in this country can be subdivided or
transferred with ease, and are free from many of the prescriptive
rights and entailments which prevent or hinder transfers of
titles to land in the older countries. By a convenient system
of surveying the land and dividing it into counties, townships
and sections, located with reference to established meridians,
and the recording of titles upon public books of record, the
transfer of land is encouraged and made easy. This, we believe,
has had a marked effect, upon not only the agricultural classes,
by inducing thrift and industry, but also upon the general
progress and commercial welfare of the nation.

To signalize the attainment of the one hundredth anniver-
sary of the birth of the republic a great exposition was held
in the city of Philadelphia in 1876, in which were exemplified the
wonderful improvements in the industrial and mechanical arts
made since the Crystal Palace exposition in New York in 1853.
From the mammoth Corliss engine, which put in motion fourteen
acres of innumerable steel and iron organisms, the visitor could



EXPOSITIONS. 143

examine the processes of nearly every important manufacture on
the globe. Numerous great palaces, each devoted to a particular
department of human activity or achievement, were completely
filled with extensive and interesting exhibits, from not only the
United States but from all parts of the world. Egypt sent speci-
mens of corn, cotton, sugar, woods, fruit, honey and perfumery;
Australia sent wool, iron, wood, tin and agricultural products;
Centennial Switzerland, her far-famed watches; Norway and

Exposition Sweden, their glass work, wood carvings, porcelain,

iron and steel; Holland, her excellent models of
dikes and sea coast defenses, bridges and dams; China, her jars,
vases and other ceramics; Japan, her porcelain and bronzes;
Italy, her fine art contributions; France, her vases, statuary, tex-
tiles and wines; England, her woolens, cotton and silk goods,
hardware, etc., and thus the infinite collection was made up,
proving to be a vast object lesson upon the achievements of the
race and the brotherhood of man.

The Centennial Exposition was only surpassed by the World's
Columbian Exposition held in Chicago in 1893 to commemo-
rate the 400th anniversary of the discovery of America. In
magnitude and grandeur the palaces of the White City surpassed
those of any exposition ever previously attempted. While the
displays were commensurate with the beauty, variety and extent
of the Palaces in which they were installed, the one great dis-
tinguishing feature of the exposition of 1893 was the display in
world's coium- electricity. In 1876 the telegraph constituted al-
bian Exposition most the sole practical application of electricity to
1893 the utilities of man, but in 1893 we had the elec-

tric light in its varied forms, the electric motor for the propul-
sion of machinery and cars, the telephone and numerous other
adaptations of this wonderful though subtle power. The one
great lesson of this exposition was, that we had been, and were,
passing through an age of invention. Thousands of examples
were to be seen on every hand of inventions which multiplied



144 HISTORY OF COMMERCE.

human control over natural forces. In the language of President
McKinley at the Pan-American Exposition, his last public ad-
dress, "Expositions are the timekeepers of progress. They record
the world's advancement. They stimulate the energy, enter-
prise and intellect of the people and quicken human genius/'

Through the inventive genius of man, manufactures have
been cheapened during the past hundred years, while at the
same time the price of labor has constantly advanced and the
hours have shortened, thus greatly improving the condition of the
working clashes. In 1790 carpenters received 60 cents a day;
in 1800, 70 cents; in 1810, $1.09; in 1820, $1.13; in 1830 to
1840, $1.13 to $1.40, and about the same up to 1860; in 1880,
$2.42; and in 1890, $3.50, with the day shortened
Rate of wages from ten hours to eight. Common laborers in
1790 received 43 cents a day; in 1800, 62J cents;
in 1810, 82 cents; from 1810 to 1820, something over 90 cents;
and 1840 to 1860, from 87J cents to $1 per day.* While ma-
chinery has displaced hand labor, new industries have sprung
up to furnish work for all willing hands, and the shortening of
the hours, with better pay, has given workmen time and means
for self-improvement and social enjoyment. Under the modern
factory system men are brought into closer relationship with
others, and as a consequence a higher standard of intelligence
prevails. Low grades of labor are constantly giving place to edu-
cated labor, and what are luxuries to one generation become
necessaries to the generations which follow. This is illustrated
by the fact that "there was a time when a linen sheet was worth
thirty-two days of common labor, and a gridiron cost from four
to twelve days' labor."

In 1898 the Hawaiian Islands were annexed and now form
a territory of the United States. Their chief productions are
sugar, coffee, rice and bananas, the principal export being raw
sugar. The chief value of the islands, however, lies in the fact

'Wright's Industrial Evolution in the United States.



ISLAND POSSESSIONS. 145

that they are situated at the crossing of the routes of ocean
travel between America, Asia and Australia, and afford a con-
Hawaiian and venient coaling and supply station for ocean ves-
Phiiippine sels. As a result of the Spanish- American War,

islands Spain ceded to the United stateg in 1899 the island

of Porto Rico, one of the Antilles, and the extensive group of
the Philippines in the Pacific. Porto Rico produces cotton,
sugar, coffee, fine tobacco and tropical fruits. The climate is
healthful, and the island will no doubt be greatly improved and
developed by American capital. The Philippines are of volcanic
origin, with mountain ranges predominant, but the valleys are
adapted to tropical argiculture. The coast lands, plains and
valleys produce large quantities of Manila hemp, raw sugar,
tobacco and cocoanuts. The Manila hemp is of a superior qual-
ity, and the islands have practically a monopoly of the industry.
The United States and Great Britain take nearly all of the crop.
While the United States has for many years bought more than
one-fourth of the Philippine exports, its share of the imports
has been small. Under the new relation, however, as a territory
of the republic our trade will no doubt greatly extend. The
greatest value of the Philippines to the United States, however,
will no doubt prove to be their proximity to Asia, and the aid
they will afford in securing and carrying on an important and
constantly expanding trade with China, where our manufactures
are now being introduced.

Our total export for the year ending June 30, 1901, amounted

to the enormous sum of $1,487,764,991, being the largest volume

of exports during any year in the history of the republic. Of

this sum $944,000,000, or nearly 65 per cent., were the products

of agriculture, and of these breadstuffs, such as

commerce wheat, corn, rye, oats, barley, etc., amounted to

$276,000,000; cotton, $314,000,000; provisions,

comprising meats and dairy products, $197,000,000; animals,

including horses, cattle, hogs, sheep, mules and poultry, $52,-



146 HISTORY OF COMMERCE.

000,000; raw tobacco, $28,000,000; oil cake, $18,000,000. The
exports from the products of our mines, including coal and'
mineral oils, amounted to $28,000,000, or 2 6-10 per cent.; of
our forests, $55,000,000, or about 3J per cent.; and fisheries,
$8,000,000, or about J per cent. The total export of the prod-
ucts of our manufactures in 1901 amounted to $412,000,000,
or about 28J per cent, of the whole. The total imports of the
United States in 1901 amounted to $823,172,165, leaving a
balance of trade in our favor of $664,592,826. The total manu-
factures of the United States now foot up annually $13,000,000,-
000, which is about forty per cent, of the entire manufactures of
the world. This enormous increase of manufactures* places the
United States in the ranks of the great manufacturing nations of
the world; and whereas heretofore our exports have been chiefly
agricultural products, we may expect in the future a large in-
crease in the exports of our manufactures. We are now supply-
ing Europe with articles which we formerly imported, and
American products are establishing a reputation for excellence
in foreign markets. With the natural factors of production
yet largely undeveloped and in no prospect of exhaustion, aided
by the genius of the American inventor and the capacity and
enterprise of the American business man, we believe the com-
mercial future of the United States is destined to a remark-
able development. Social and industrial problems may confront
us, such as combinations of capital and labor, tariff and finance,
but let us hope that these may all be wisely solved, and that as
our commerce grows in greatness it may be governed by the
principle of right.

*In 1870 our total manufacturing amounted to about $4,250,000,000, or
less than one.third of their present value.