1902 Encyclopedia > Commerce


COMMERCE, in its general acceptation, is the international traffic in goods, or what constitutes the foreign trade of all countries as distinct from their domestic trade, and it will be convenient in this place to treat it chiefly under this aspect.

The same causes which give rise to exchange of com-modities in a limited field call it into operation over more extended territories, and the same effects which flow from it in the smaller flow from it in the larger sphere. There are the same phenomena in either case, but in proportion as trade extends beyond the narrow boundaries of a tribe or a nation, the greater are the obstacles it has to encounter, not only in physical distance, and the practicable transit of commodities, but in computation, in gauging the capacity and course of markets, in the risk of making wrong adventures, in the rivalry and exclusiveness, the wars and revolutions of states; and consequently the more liable it becomes to complications, partly native and partly foreign to itself, by which its advantages have been obscured and its progress has been impeded in all ages.

Exchange of commodities implies not only a division of labor, but a development of natural resources where most abundant and accessible. As long as mankind live in scattered and isolated families, each supplying its own wants directly by its own labor, there can be little or no commerce; and as long as there is no commerce every local habitation of man must depend on its natural resources, however poor, unvaried, or difficult to utilize. Division of labor and exchange may be said to be of twin birth, since the existence of the one cannot be conceived without the other; and as they grow up from the simplest embryo, they act and react each other, giving always wider scope to their mutual operation, and preparing a certain density of population in central places, or markets, where the traffickers meet and artificers find it their interest to settle; whether in the desert where caravans converge in their various routes from one region to another, or at the confluence of navigable rivers, or in secure bays of inland seas, commanding an extensive coast line, or some interoceanic passage, and thus laying the foundation of towns and cities, to become, it may be, as they have become in many instances, the seats of rule and empire. The direct result of these primitive human instincts, as they may be called, of division and exchange of the products of labor was to extend among mankind a material and social comity, apart from all tribal or political relations, from which sprung, as on a solid base or framework, the fair but often frail fabric of civilization, arts, sciences, letters, philosophy, religion -- all that gives grace and dignity to humanity. The special office of commerce, in the material part of the economy, is to organize places, soils, climates, all local conveniences of land or sea, and superior natural resources of various countries, as that of the division of labor is to organize the talent, handiness, and aptitude of individuals.

The formative and developing power of this function of commerce is much more conspicuous in the phenomena of ancient history and in contemporary results than may at first sight appear It were easy, judging from local qualities alone, to explain why the metropolis of the United Kingdom should be on the Thames where London now is; how rival ports arose along the western coast of Britain, on the Severn, the Mersey, and the Clyde; why Lancashire should have become the great centre of the cotton manufac-ture; why Dundee, from a small beginning in flax from the adjacent Baltic, should have become a great emporium of flaxen and cognate fabrics; why there should be a Hull on the Humber, a Newcastle on the Tyne, and a rapidly rising Middlesborough on the Tees; why the Thames should maintain, after many centuries of change and amidst many rivals, its pristine supremacy, and yet the western coast of our island be much more brilliant commercially than the eastern. But the same principle may be no less a guide to our understanding why the earliest records we have of great seats of population should be on the Euphrates, the Nile, the Ganges, and the Blue and Yellow Rivers of China; how Palmyra, the ancient grandeur of which has been discovered in its modern ruins, should have been built in the middle of a desert; how the cradle of navigation and maritime commerce should be so indelibly couched along the coasts and round the numerous islands of the Mediterranean Sea; how international trade, seeking an outlet from its dreary prison of overland desert, war, and rapine, should have found it for a time by the Mediterranean to the Red Sea and the Indian Ocean, only to be diverted by a bold navigation round the cape of Africa, and should now be returning under more secure conditions to the shorter route again. The tendency of commerce to connect one seat of population with another, to open roads, to seize on every physical advantage of transit between them, to create new centres of industry and traffic on the lines of communication, and by the union, not only of human labor and capacities, but of almost boundlessly diversified territorial resources thus effected, to increase the production and circulation of commodities is too obvious to require illustration. This is what has been called by economists "the territorial division of labor," but the term scarcely reaches a full expression of the effect of commerce. There is not only a territorial extension of the division of labor in the sense of being spread over a larger area and a greatly more numerous population, but the physical resources, the natural agents of wealth themselves, as found in various countries and places, are brought into the general organization as they could be by no other means, and made to yield in due harmony with each other all their special and relative superiorities.

A consideration of this action of international traffic in commodities is sufficient to dispel many false views that have at various times been propounded with much authority-such as that commerce, being an exchange of value for value, can add nothing to the general wealth; or that the profit of one party to an exchange is the loss of the other party; or that the only profit of commerce con-sists of the balance accruing in the precious metals; and similar crudities of conception. The substratum of the whole system of international traffic is that commodities, after bearing the cost of transit, are of more value in one place than in another. Commodities are often so abundant, or .capable of being produced so abundantly in some places, as to be superfluities, and absolutely valueless in such places, and yet are of much value in other places. As this relation is mutual, there is nothing inconsistent in an exchange of commodities of more value in one place than in another with a gain of value on both sides of the exchange; and this becomes all the more apparent when, in addition to the profit of the merchants or agents employed in the transaction, there is taken into account the gain arising to the communities in their industry, and in the pro-fits of their industry.

Exchange of commodities must have been coeval with human society. However self depending on their own labor men may have been in the social state, they must m soon have had some commodities to exchange with each other, and as stock increased the process would rapidly extend. The liability to failure of crops and to famine must have led to storing of corn in seasons of plenty, and to occasional traffic in the first necessary of life.

. The earliest records of commerce on an international scale are to be found in the Hebrew Scriptures. Such a transaction as that of Abraham, for example, weighing down "four hundred shekels of silver, current with the merchant," for the field of Ephron, is suggestive of a group of facts and ideas indicating an advanced condition of commercial intercourse,-property in land, sale of land, arts of mining and purifying metals, the use of silver of recognized purity as a common medium of exchange, and merchandize an established profession, or division of labor. That other passage in which we read of Joseph being sold by his brethren for twenty pieces of silver to " a company of Ishmeelites, coming from Gilead, with their camels bearing spicery, balm, and myrrh to Egypt," extends our vision still farther, and shows us the populous and fertile Egypt in commercial relationship with Chaldea, and Arabians, foreign to both, as intermediaries in their traffic, generations before the Hebrew commonwealth was founded. The allusions in Homer and other ancient writings do not bespeak so advanced a state of trade as those in Genesis. There would seem to have been brass coins among the warriors engaged at the siege of Troy and the shields of Homeric heroes cost, some nine oxen, some more splendid a hundred oxen, implying much rude magnificence in the form of barter; and yet probably not such barter, pure and simple, as is seen in the present day at Kiakhta and Maimatchin, on the Chinese borders of Russia, where chests of tea are exchanged in bulk for Muscovite manufactures of cotton or wool. One might fairly infer, from such archaic touches of the Greek bard, that he had in view an agricultural and pastoral. state of society, in which oxen, from their more ready power of purchase than any other commodity, had become a rough standard of value; but oxen could not in any state of society be a general medium of exchange, and the history of circulating media, by which exchanges were effected in ancient times, is curiously illustrative of the transition of real into symbolic value. It may be doubted whether the hundred kesitas paid by Jacob for a field in Shalem were lambs or pieces of money having lambs as their insignia. The leather money of Carthage, which appears to have been symbolic, was probably much more valuable than the iron money of Sparta, which had an intrinsic worth. Any commodity of the first rank ill a public mart might become in small circulable pieces the symbol of so much of that commodity to be delivered to order, and from the constancy of that particular exchange, might be relied upon for the purchase of other commodities. But, generally speaking, the use of gold and silver as instruments of exchange betokens a much higher commercial development than where commodities are priced by a number of oxen, or by rings of brass or iron; and it is on record that the precious metals were thus employed in Arabia and Syria, some 2000 years B.O., as they, no doubt, had been much anterior to that date both in Egypt on the one hand and in the rich and populous I plains of the Tigris and Euphrates on the other.

The first foreign merchants of whom we read, carrying goods and bags of silver from one distant region to another, were the Southern Arabs, reputed descendants of Ishmael and Esau. Touching in their territory on the south the Red Sea and the right bank of the Nile, and on the north and east the most densely inhabited tracts of Asia, and accustomed in their own interior economy to a free and nomadic life, it may have occurred to the more intelligent and enterprizing of these people to enter on this new and adventurous course. Their traffic could only have small beginnings, but they were pioneers of foreign trade, and showed to their richer neighbours that the desert could be pierced. On the other hand, the first navigators and maritime carriers of goods of whom we read were the Phoenicians, the debris of the Canaanites overthrown by the conquering Hebrews, who, intent on the plain of the Jordan, the hilly slopes of Judea, and the sacred Mount Moriah -- the long " promised land, " -- allowed the dispossessed to settle on a narrow strip of territory along the coast of the Mediterranean. As the clearance proceeded the number of refugees increased, and this outcast race, with one foot on the sea and the other barely on the land, soon outstripped the Edomites and the Ishmaelites in the career of commerce. They founded Tyre and Sidon, of whose opulence there are abundant proofs both in sacred and in profane history. Launching their oared barks on the wave, and steering close along the shore so as to be able to take shelter in the near-est harbourage from a storm, they established a securer and cheaper passage between Egypt and Syria than had before been known. The corn and ivory of the Nile and the oil, silk, dyes, and spices of Western Asia flowed into their hands. From carriers they became merchants, and to merchandize they added manufactures. They enlarged their ships, grew bolder in navigation, and hoisted sails. In the days of Solomon their vessels had penetrated the Red Sea, and-brought back to the great king the wealth of Ophir; but that this land of gold was in India, and that the Phoenicians craft crossed the Indian Ocean are conclusions unsupported by evidence. It is certain that they traversed thoroughly the shores of the Mediterranean, both continen-tal and insular, established settlements and colonies in many of the islands of the Greek Archipelago, and, greatest of all, founded Carthage, one of the most noted, and probably the most lamented in its fall, of the commercial cities and empires of the ancient world. The kings of Tyre and Sidon, though often involved in the wars and troubles of the Hebrew monarchy, remained for the most part in friendly alliance with Judah and Israel, to whom they were the most valuable of allies both in a commercial and defensive point of view; and it was their adhesion to the cause of Zedekiah, king of Judah, that brought upon the Tyrians the terrible and all but fatal revenge of Nebuchad-nezzar, king of Babylon, 3416 A.M. But while their old city on the shore was being reduced to ashes by a thirteen years' siege, the portion of inhabitants who clung to the defence built a new city on an adjacent island, and thus took a new lease of life from the sea-a process which was destined to be almost identically repeated by Venice many centuries afterwards, when the Roman empire was falling under the blows of the barbarians. But Phoenician never fully recovered her former power, and the coup de grace was given to this famous commercial republic in the capture of Tyre by Alexander the Great, 250 years after the struggle with Nebuchadnezzar. The whole inhabitants of the once proud city, who had not saved themselves by flight, were either put to the sword, crucified, or sold into slavery. After this event the name of the Phoenicians disappeared from history, or was soon absorbed in the rising splendour of the commercial cities of Greece Athens, Corinth, Argos, and their colonies; of Carthage, still in full fame; and of the great seaport named after its founder Alexander, and built in a spot so well chosen that the city retains its importance to the present hour.

In the commerce of the ante-Christian ages the Jews do not appear to have performed any conspicuous part. Both the agricultural and the theocratic constitution of their society were unfavourable to a vigorous prosecution of foreign trade. In such traffic as they had with other nations they were served on their eastern borders by Arabian merchants and on the west and south by the Phoenician shippers. The abundance of gold, silver, and other precious commodities gathered from distant parts, of which we read in the days of greatest Hebrew prosperity, has more the character of spoils of war and tributes of dependent states than the conquest by free exchange of their domestic produce and manufactures. The varied merchandize of Tyre and Sidon must have passed over the roads of Palestine, and helped to enrich the Jewish treasury. Tadmor, built by Solomon in the Syrian desert, where there were wells of water, can only be supposed to have been designed as a post for the service of this traffic; and it became not only a resting-place for traffickers and their camels, but a great centre of commerce and political power, under the later name of Palmyra. But it was not until the Jews were scattered by foreign invasions, and finally cast into the world by the destruction of Jerusalem, that they began to develop those commercial qualities for which they have since been so famous. A similar remark may be made of the more ancient nation of Egypt, of whom there is scarce, a trace to be found as pioneers of foreign trade. When famine visited adjacent tracts of country corn was usually to be obtained on the Nile, but those in want had to go for it, and the Phoenicians at one period, and the Greeks at another, became the corn merchants of Egypt, while Rome' for some centuries drew ·large supplies to order of her Government. One can readily believe the great wealth, industry, and resources of empires of which such cities as Nineveh and Babylon were the capitals; but the habit of Eastern potentates to drain to their central treasuries the I riches of the most distant provinces, and the boundless I power by which millions of people were doomed to servitude, are calculated to weaken the impression that such emblems of grandeur as may still remain in ruins are to be ascribed to anything which in the present age could be.

Such being the general spirit and economy of ancient nations of the East of which we have historic records, it may be more easily conceived how dense populations might grow up on the great plain of Hindustan and the still greater plain of China; have their own wars, re-volutions, and social changes; develop much wealth and varied riches, much art and science, much literary and philosophical refinement; have much internal traffic, with little or no commerce beyond their own widely-extended and impassable frontiers; and yet be so unknown to the rest of the world that the Persians, even in the days of Xerxes, appear to have had scarce a conjecture that there was such an empire as China in existence; that Alexander, on conquering Persia and watering his horses in the Indus, should dream that he was master of all Asia -- " weep," as the romantic version runs, " that there was no more world to conquer;" and that, in short, over the growth of these ancient civilizations of Eastern Asia, surviving to the present day and embracing about a half of the human race, the curtain of history should drop as blankly as if they belonged to another planet, or could be seen only through a haze of fable and mystical tradition.

There are three conditions as essential to extensive international traffic as diversity of natural resources, division of labor, accumulation of stock, or any other primal element-(l) means of transport, (2) freedom of labor and exchange, and (3) security; and in all these con-ditions the ancient world was signally deficient.

The great rivers, which became the first seats of population and empire, must have been of much utility as channels of transport, and hence the course of human power of which they are the geographical delineation, and probably the idolatry with which they were sometimes honored. Nor were the ancient rulers insensible of the importance of opening roads through their dominions, and establishing posts and lines of communication, which, though primarily for official and military purposes, must have been useful to traffickers and to the general population. But the free navigable area of great rivers is limited, and when diversion of traffic had to be made to roads and tracks through deserts, there remained the slow and costly carriage of beasts of burden, by which only articles of small bulk and the rarest value could be conveyed with any hope of profit. Corn, though of the first necessity, could only be thus transported in famines, when beyond price to those who were in want, and under this extreme pressure could only be drawn from within a narrow sphere, and in quantity sufficient to the sustenance of but a small number of people. The routes of ancient commerce were thus interrupted and cut asunder by barriers of transport, and the farther they were extended became the more impassable to any considerable quantity or weight of commodities. As long as navigation was confined to rivers and the shores of inland gulfs and seas, the oceans were a terra incognita, contributing nothing to the facility or security of transport from one part of the world to another, and leaving even one populous part of Asia as unapproachable from another as if they had been in different hemispheres. The various routes of trade from 'Europe and North-Western Asia to India, which have been often referred to, are to be regarded more as speculations of future development than as realities of ancient history. It is not improbable that the ancient traffic of the Red Sea may have been extended along the shores of the Arabian Sea to some parts of Hindustan, but that vessels braved the Indian Ocean and passed round Cape Comorin into the Bay of Bengal, 2000 or even 1000 years before mariners had learned to double the Cape of Good Hope, is scarcely to be believed. The route by the Euxine and the Caspian Sea has probably never in any age- reached India. That by the Euphrates and the Persian Gulf is shorter, and was besides the more likely from passing through tracts of country which in the most remote times were seats of great population. There may have been merchants many, who traded on all these various routes, but that commodities were passed in bulk over great distances is inconceivable. It may be doubted whether in the ante-Christian ages there was any heavy transport over even 500 miles, save for warlike or other purposes, which engaged the public resources of imperial states, and in which the idea of commerce, as now understood, is in a great measure lost.

The advantage which absolute power gave to ancient nations in their warlike enterprises, and in the execution of public works of more or less utility, or of mere ostentation and monumental magnificence, was dearly purchased by the sacrifice of individual freedom, the right to labor, produce, and exchange under the steady operation of natural economic principles, which more than any other cause vitalizes the individual and social energies, and multiplies the commercial resource of communities. Commerce in all Periods and countries has obtained a certain freedom and hospitality from the fact that the foreign merchant has something desirable to offer; but the action of trading is reciprocal, and requires multitudes of producers and merchants, as free agents, on both sides, searching out by patient experiment wants more advantageously supplied by exchange than by direct production, before it can attain either permanence or magnitude, or can become a vital element of national life. The ancient polities offered much resistance to this development and in their absolute power over the liberty, industry, and property of the masses of their subjects raised barriers to the extension of commerce scarcely less formidable than the want of means of communication itself. The conditions of security under which reign trade can alone flourish equally exceeded the resources of ancient civilization. Such roads as exist must be protected from robbers, the rivers and seas from pirates; goods must have safe passage and safe storage, must be held in a manner sacred in the territories through which they pass, be insured against accidents, be respected even in the madness of hostilities; the laws of nations must give a guarantee on which traders can proceed in their operations with reasonable confidence; and the Governments, while protecting the commerce of their subjects with foreigners as if it were their own enterprise, must in their fiscal policy, and in all their acts, be endued with the highest spirit or commercial honor. Every great breach of this security stops the continuous circulation, which is the life of traffic and of the industries to which it ministers. But in the ancient records we see commerce exposed to great risks, subject to constant pillage, hunted. down in peace, and utterly extinguished in war. Hence It became necessary that foreign trade should itself be an armed force in the world; and though the states of purely commercial origin soon fell into the same arts and miles as the powers to which they were opposed, yet their history exhibits clearly enough the necessity out of which they. arose. Once organized, it was inevitable that they should meet intrigue with intrigue, and force with force. The political empires, while but imperfectly developing industry and traffic within their own territories, bad little sympathy with any means of prosperity from without. Their sole policy was either to absorb under their own spirit and conditions of rule, or to destroy, whatever was rich or great beyond their borders.

Nothing is more marked in the past history of the world than this struggle of commerce to establish conditions of security and means of communication with distant parts, Wren almost driven from the land, it often found both on the sea; and often, when its success had become brilliant and renowned, it perished under the assault of stronger powers, only to rise again in new centres and to find new channels of intercourse.

While Rome was giving laws and order to the half civilized tribes of Italy, Carthage, operating on a different base, and by other methods, was opening trade with less accessible parts of Europe. The strength of Rome was in her legions, that of Carthage in her ships and her ships could cover ground where the legions were powerless. Her mariners had passed the mythical straits into the Atlantic, and established the port of Cadiz. Within the Mediterranean itself they founded Carthagena and Barcelona on the same Iberian Peninsula and ahead of the Roman legions had depots and traders on the shores of .Gaul. After the destruction of Tyre, Carthage became the greatest power in the Mediterranean, and inherited the trade of her Phoenician ancestors with Egypt, Greece, and Asia Minor, as well as her own settlements in Sicily and on the European coasts. An antagonism between the great naval and the great military power, whose interests crossed each other at so many points, was sure to occur; and in the three Punic wars Carthage measured her strength with that of Rome both on sea and land with no unequal success. But a commercial state impelled into a series of great wars bas departed from its own proper base; and in the year 146 B.C. Carthage was so totally destroyed by the Romans that of the great city, more than 20 miles in circumference, and containing at one period near a million of inhabitants, only a few thousands were found within its ruined walls. In the same year Corinth, one of the greatest of the Greek capitals and seaports, was captured, plundered of vast wealth, and given to the flames by a Roman consul. Athens and her magnificent harbour of the Piraeus fell into the same bands 60 years later. It may be presumed that trade went on under the Roman conquests in some degree as before; but these were grave events to occur within a brief period, and the spirit of the seat of trade in every case having been broken, and its means and resources more or less plundered, and dissipated -- in some cases, as in that of Carthage, irreparably -- the most necessary commerce could only proceed with feeble and languid interest under the military, consular, and proconsular licence of Rome at that period. It may be remarked that Tyre, the great seaport of Palestine, having been destroyed by Alexander the Great, Palmyra, the great inland centre of Syrian trade, was visited with a still more complete annihilation by the Roman Emperor Aurelian within little more than half a century after the capture and spoliation of Athens. The walls were razed to their foundations; the population-men, women, children, and the rustics round the city-were all either massacred or dispersed; and the queen Zenobia was carried captive to Rome. Palmyra had for centuries, as a centre of commercial intercourse and transit, been of great service to her neighbors, east and west. In the wars of the Romans and Parthians she was respected by both as an asylum of common interests which it would have been simple barbarity to invade or injure; and when the Parthians were subdued, and Palmyra became a Roman annexe, she continued to flourish as before. Her relations with Borne were more than friendly; they became enthusiastic and heroic; and her citizens, in a most brave expedition, having inflicted signal chastisement on the king of Persia for the imprisonment of the emperor Valerian, the admiration of this conduct at Rome was so great that their spirited leader Odenathus, the husband of Zenobia, was proclaimed Augustus, and became co-emperor with Gallienus. But the Palmyrians, on receiving this exalted honour from the Roman senate and people, might have said, "Timeo Danaos dona ferentes," for it introduced into their secure, palm covered, and lucrative groves of commerce the bane of imperial politics and ambition; and it was the passionate impulse of Palmyra and her widowed queen to erect an empire of their own that brought down upon them the terrible and enduring retribution of Aurelian. It is obvious that the destruction of Palmyra must not only have doomed Palestine, already bereft of her seaports, to greater poverty and commercial isolation than had been known in long preceding ages, but have also rendered it more difficult to Rome herself to hold or turn to any profitable account her conquests in Asia; and, being an example of the policy of Rome to the seats of trade over nearly the whole ancient world, it may be said to contain in graphic characters a presage of what came to be the actual event the collapse and fall of the Roman empire itself. The repeated invasions of Italy by the Goths and Huns gave rise to a seat of trade in the Adriatic, which was to sustain during more than a thousand years a history of unusual splendour. The Veneti cultivated fertile lands on the Po, and built several towns, of which Padua was the chief. They appear from the earliest note of them in history to have been both an agricultural and trading people; and they offered a rich prey to the barbarian hordes when these broke through every barrier into the plains of Italy. Thirty years before Attila razed the neighbouring city of Aquileia, the consuls and senate of Padua, oppressed and terrified by the prior ravages of Alaric passed a decree for erecting Rialto, the largest of the numerous islets at the mouth of the Po, into a chief town and port, not more as a convenience to the islanders than as a security for them-selves and their goods. But every fresh incursion, every new act of spoliation by the dreaded enemies, increased the flight of the rich and the industrious to the islands, and thus gradually arose the second Venice, whose glory was so greatly to exceed that of the first. Approachable from the mainland only by boats, through river passes easily defended by practiced sailors against barbarians who had never plied an oar, the Venetian refugees could look in peace on the desolation which swept over Italy; their warehouses, their markets, their treasures were safe from plunder; and stretching their hands over the sea, they found in it fish and salt, and in the rich possessions of trade and territory which it opened to them, more than compensation for the fat lands and inland towns which had long been their home. The Venetians traded with Constantinople, Greece, Syria, and Egypt. They became lords of the Morea, and of Candia, Cyprus, and other islands of the Levant. The trade of Venice with India; though spoken of, was probably never great. But the crusades of the 12th and 13th centuries against the Saracens in Palestine extended her repute more widely east and west, and increased both her naval and her commercial resources. It is enough, indeed, to account for the grandeur of Venice that in course of centuries, from the security of her position, the growth and energy of her population, and the regularity of her government at a period when these sources of prosperity were rare, she became the great emporium of the Mediterranean -- all that Carthage, Corinth, and Athens had been in a former age on a scene the most remarkable in the world for its fertility and facilities of traffic, -- and that as Italy and other parts of the Western empire became again more settled her commerce found always a wider range. The political history of the Venetian Republic is deeply interesting, were this proper place to do more 'than glance at the fortune of commerce and the circumstances and conditions under which it attains its grandest success. The bridge built from the largest of ; the islands to the opposite bank became the" Rialto," or famous exchange of Venice, whose transactions reached farther, and assumed a more consolidated form, than had been known before. There it was where the first public ; bank was organized ; that bills of exchange were first negotiated, and funded debt became transferable; that finance became a science, and book-keeping an art. Nor must the effect of the example of Venice on other cities of Italy be left out of account. Genoa, following her steps, rose into great prosperity and power at the foot of the Maritime Alps, and became her rival, and finally her enemy. Naples, Gaeta, Florence, many other towns of Italy, and Rome herself, long after her fall, were encouraged to struggle for the preservation of their municipal freedom, and to foster trade, arts, and navigation, by the brilliant success set before them on the Adriatic; but Venice, from the early start she had made, and her command of the sea, had the commercial pre-eminence.

The state of things which arose on the collapse of the Roman Empire presents two concurrent facts, deeply affecting the course of trade-(1) the ancient seats of industry and civilization were undergoing constant decay, while (2) the energetic races of Europe were rising into more civilized forms and manifold vigour and copiousness of life. The fall of the Eastern division of the empire prolonged the effect of the fall of the Western empire ; and the advance of the Saracens over Asia Minor, Syria, Greece, Egypt, over Cyprus and other possessions of Venice in the Mediterranean, over the richest provinces of Spain, and finally across the Hellespont into the Danubian provinces of Europe, was a Hew irruption of barbarians from another point of the compass, and revived the calamities and disorders inflicted by the successive invasions of Goths, Huns, and other Northern tribes. For more than ten centuries the naked power of the sword was vivid and terrible as flashes of lightning over all the seats of commerce, whether of ancient or more modern origin. The feudal system of Europe, in organizing the open country under military leaders and defenders subordinated in possession and service under a legal system to each other and to the sovereign power, must have been well adapted to the necessity of the times in which it spread so rapidly; but it would be impossible to say that the feudal system was favourable to trade, or the extension of trade. The commercial spirit in the feudal, as in preceding ages, had to find for itself places of security, and it could only find them in towns, armed with powers of self-regulation and defence, and prepared, like the feudal barons themselves, to resist violence from whatever quarter it might come. Rome, in her best days, had founded the municipal system, and when this system was more than ever necessary as the bulwark of arts and manufactures, its extension became an essential element of the whole European civilization. Towns formed themselves into leagues for mutual protection, and out of leagues not infrequently arose commercial republics. The Hanseatic League, founded as early as 1241, gave the first note of an increasing traffic between countries on the Baltic and in northern Germany, which a century or two before were sunk in isolated barbarism. From Lubeck and Hamburg, commanding the navigation. of the Elbe, it gradually spread over 85 towns, including Amsterdam, Cologne, and Frankfort in the south, and Dantzic, Konigsberg, and Riga in the north. The last trace of this league, long of much service in protecting 'trade, and as a means of political mediation, passed away the other year in the erection of the new German empire, but only from the same cause that had brought about its gradual dis-solution-the formation of powerful and legal governments which, while leaving to the free cities their municipal rights, were well capable of protecting their mercantile interests. The towns of Holland found lasting strength and security from other causes. Their foundations were laid as literally in the sea as those of Venice had been. They were not easily attacked whether by sea or land, and if attacked had formidable means of defence. The Zuyder Zee, which had been opened to the German Ocean in 1282, carried into the docks and canals of Amsterdam the traffic of the ports of the Baltic, of the English Channel, and of the south of Europe, and what the seas did for Amsterdam from without the Rhine and the Maese did for Dort and Rotterdam from the interior. By the Union of Utrecht in 1579 Holland became an independent republic, and for long after, as it had been for some time before, was the greatest centre of maritime traffic in Europe. The rise of the Dutch power in a low country, exposed to the most destructive inundations, difficult to cultivate or even to inhabit, affords a striking illustration of those conditions which in all times have been found specially favourable to commercial development, and which are not indistinctly reflected in the mercantile history of England, preserved by its insular position from hostile invasions, and capable by its fleets and arms to protect its goods on the seas and the rights of its subjects in foreign lands.

The progress of trade and productive arts in the middle Ages, though not rising to much international exchange, was very considerable both in quality and extent. The republics of Italy, which had no claim to rival IT en ice or Genoa in maritime power or traffic, developed a degree of art, opulence, and refinement commanding the admiration of modern times; and if any historian of trans -Alpine Europe, when Venice had already attained some greatness, could have seen it 500 years afterwards, the many strong towns of France, Germany, and the Low Countries, the great number of their artizans, the products of their looms and anvils, and their various cunning work-manship might have added many a brilliant page to his annals. Two centuries before England had discovered any manufacturing quality, or knew even how to utilize her most valuable raw materials, and was importing goods from the Continent for the production of which she was soon to be found to have special resources, the Flemings were selling their woollen and linen fabrics, and the French their wines, silks, and laces in all the richer parts of the British Islands. It is more commonly, indeed, when com-merce is somewhat still, and men, finding their means resting within limited bounds, learn to delight in labour and invention for their own sake apart from their imme-diate profits, that the quality of work is improved, and a vantage ground is established for more extended operations, than when commerce is in full career, everything buoyant, saleable, and rising in value, and the lust of gain has taken possession of the human spirit. The middle Ages may be said to have had this result on a large scale. They placed the barbarous populations of Europe under a severe discipline, trained them in the most varied branches of industry, and developed an amount of handicraft and ingenuity which became an always more solid basis for the future. But trade was too walled in, too much clad in armour, and too incessantly disturbed by wars and tumults, and violations of common right and interest, to exert its full influence over the general society, or even to realize its most direct advantages. It wanted especially the free-dom and mobility essential to much international increase, and these it was now to receive from a series of the most pregnant events.

The mariner's compass had become familiar in the European ports about the beginning of the 14th century, and the seamen of Italy, Portugal, France, Holland, and England entered upon a more enlightened and adventurous course of navigation. The Canary Islands were sighted by a French vessel in 1330, and colonized in 1418 by the Portuguese, who two years later landed on Madeira. In 1431 the Azores were discovered by a shipmaster of Bruges. The Atlantic was being gradually explored. In 1486, Diaz, a Portuguese, steering his course almost unwittingly along the coast of Africa, came upon the land's-end of that continent; and nine years afterwards Vasco de Gama, of the same nation, not only doubled the Cape of Good Hope, but reached Zanzibar. About the same period a Portuguese traveler penetrated to India by the old time-honoured way of Suez; and a land, which tradition and imagination had invested with almost fabulous wealth and splendour, was becoming more real to the European world at the moment when the expedition of Vasco de Gama had made an oceanic route to its shores distinctly visible One can hardly now realize the impression made by these discoveries in an age when the minds of men were awakening out of a long sleep, when the printing press was disseminating the ancient classical and sacred literature, and when geography and astronomy were subjects of eager study in the seats both of traffic and of learning But their practical effect was seen swiftly succeeding events. Before the end of the century Columbus had thrice crossed the Atlantic, touched at San Salvador, discovered Jamaica, Porto Rico, and the Isthmus of Darien, and had seen the waters of the Orinoco in South America. Meanwhile Cabot, sent out by England, had discovered New-foundland, planted the English flagon Labrador, N ova Scotia, and Virginia, and made known the existence of an expanse of land now known as Canada. This tide of discovery by navigators flowed on without intermission. But the opening of a maritime route to India and the discovery of America, surprising as these events must have been at the time, were slow in producing the results of which they were a sure prognostic. The Portuguese established at Goa the first European factory in India a few years after Vasco de Gama's expedition, and other maritime nations of Europe traced a similar course. But it was not till 1600 that the English .East India Company was established, and the opening of the first factory of the Company in India must be dated some ten or eleven years later. So also it was one thing to discover the two Americas, and another, in any real sense to possess or colonize them, or to bring their production into the general traffic and use of the world. Spain following the stroke of the valiant oar of Columbus, found in Mexico and Peru remarkable remains of an ancient though feeble civilization, and a wealth of gold and silver mines, which to Europeans of that period was fascinating from the rarity of the precious metals in their own realms, and consequently gave to the Spanish colonization’s and conquests in South America an extraordinary but unsolid prosperity. The value of the precious metals in Europe was found to fall as soon as they began to be more widely distributed, a process in itself at that period of no small I tediousness; and it was discovered further, after a century or two, that the production of gold and silver is much like the production of other commodities for which they exchange, viz., limited, and only increased in quantity at a heavier cost, that is only reduced again by greater art and science in the process of production. Many difficulties, in short, had to be overcome, many wars to be waged, and many deplorable errors to be committed, in turning the new advantages to account. But given a maritime route to India and the discovery of a new world of continent and islands in the richest tropical and subtropical latitudes, it could not be difficult to foresee that the course of trade was to be wholly changed as well as vastly extended.

The substantial advantage of the oceanic passage to India by the Cape of Good Hope, as seen at the time, was; to enable European trade with the East to escape from the Moors, Algerines, and Turks who now swarmed round the shores of the Mediterranean, and waged a predatory war on ships and cargoes which would have been a formidable obstacle even if traffic, after running this danger, had-not to be further lost, or filtered into the smallest proportions, in the sands of the Isthmus, and among the Arabs who commanded the navigation of the Red and Arabian Seas. Venice had already begun to decline in her wars with the Turks, and could inadequately protect her own trade in the Mediterranean. Armed vessels sent out in strength from the Western ports often fared badly at the hands of the pirates. European trade with. India can scarcely be said, indeed, to have yet come into existence. The maritime route was round about, and it lay on the hit her to almost untrodden ocean, but the ocean was a safer element than inland seas and deserts infested by the lawlessness and ferocity of hostile tribes of men. In short, the maritime route enabled European traders to see India for themselves, to examine what were its products and its wants, and by what means a profitable exchange on both sides could be established; and on this basis of knowledge, ships could leave the ports of their owners in Europe with a reasonable hope, via the Cape, of reaching the places to which they were destined Without transshipment or other intermediary obstacle. This is the explanation to be given of the joy with which the Cape of Good Hope route was received in one age, as well as the immense influence it exerted on the future course and extension of trade, and of the no less apparent satisfaction with which it has been to some extent discarded in favour of the ancient line, via the Mediterranean, Isthmus of Suez, and the Red Sea in our own time.

The maritime route to India was the discovery to the European nations of a "new world" quite as much as the discovery of North and South America and their central isthmus and islands. The one was the far, populous Eastern world, heard of from time immemorial, but with which there had been no patent lines of communication. The other was a vast and comparatively unpeopled solitude, yet full of material resources, and capable in a high degree of European colonization. America offered less resistance to the action of Europe than India, China, and Japan; but on the other hand this new populous Eastern world held out much attraction to trade. These two great terrestrial discoveries were contemporaneous; and it would be difficult to name any conjuncture of material events bear-ing so importantly on the history of the world. The Atlantic Ocean was the medium of both; and the waves of the Atlantic beat into all the bays and tidal rivers of Western Europe. The centre of commercial activity was thus physically changed; and the formative power of trade over human affairs was seen in the subsequent phenomena, -- the rise of great seaports on the Atlantic seaboard, and the ceaseless activity of geographical exploration, manufactures, shipping, and emigration, of which they became the outlets.

The Portuguese are entitled to the first place in utilizing the new sources of wealth and commerce. They obtained Macao as a settlement from the Chinese as early as 1537, and their trading operations followed close on the discoveries of their navigators on the coast of Africa, in India, and in the Indian Archipelago. Spain spread her dominion over Central and South America, and forced the labour of the subject natives into the gold and silver mines, which seemed in that age the chief prize of her conquests. France introduced her trade in both the East and West Indies, and was I the first to colonize Canada and the Lower Mississippi. The Dutch founded New York in 1621 ; and England, which in boldness of naval and commercial enterprize had attained high rank in the reign of Elizabeth, established the thirteen colonies which became the United States, and otherwise had a full share in all the operations which were transforming the state of the world. The original disposition of affairs was destined to be much changed by the fortune of war; and success in foreign trade and colonization, indeed, called into play other qualities besides those of naval and military prowess. The products of so many new countries -- tissues, dyes, metals, articles of food, chemical substances -- greatly extended the range of European manufacture. But in addition to the mercantile faculty of discovering how they were to be exchanged and wrought into a profitable trade, their use in arts and manufactures required skill, invention, and aptitude for manufacturing labour, and these again, in many cases, were found to depend on abundant possession of natural materials, such as coal and iron. In old and populous countries, like India and China, modern manufacture bad to meet and contend with ancient manufacture, and had at once to learn from and improve economically on the estab-lished models, before an opening could be made for its extension. In many parts of the New World there were vast tracts of country, without population or with native races too wild and savage to be reclaimed to habits of industry, whose resources could only be developed by the introduction of colonies of Europeans; and·innumerable experiments disclosed great variety of qualification among the European nations for the adventure, hardship, and perseverance of colonial life. There were countries which, whatever their fertility of soil or favour of climate, produced nothing for which a market could be found; and products such as the sugar-cane and the seed of the cotton plant had to be carried from regions where they were indigenous to other regions where they might be successfully cultivated, and the art of planting had to pass through an ordeal of risk and speculation. There were also countries where no European could labour; and the ominous work of transport-ing African negroes as slaves into the colonies -- begun by Spain in the first decade of the 16th century, followed up by Portugal, and introduced by England in 1562 into the West Indies, at a later period into New England and the Southern States, and finally domiciled by royal privilege of trade in the Thames and three or more outports of the kingdom, -- after being done on an elaborate scale, and made the basis of an immense superstructure of labour, property, and mercantile interest over nearly three centuries, had, under a more just and ennobling view of humanity, to be as elaborately undone at a future time. These are some of the difficulties that had to be encountered in utilizing the great maritime and geographical conquests of the new epoch. But one cannot leave out of view the obstacles, arising from other sources, to what might be dreamed to be the regular and easy course of affairs, Commerce, though an undying and prevailing interest of civilized countries, is but one of the forces acting on the policy of states, and has often to yield the pace to other elements of national life. It were needless to say what injury the great but vain and purpose· less wars of Louis XIV. of France inflicted on that country, or how largely the fruitful and heroic energies of England, were absorbed in the Civil wars between Charles and the Parliament, to what poverty Scotland was reduced, or in what distraction and savagery Ireland was kept by the same course of events, The grandeur of Spain in the preceding century was due partly to the claim of her kings to be Holy Roman Emperors, in which imperial capacity they entailed intolerable mischief on the Low Countries and on the commercial civilization of Europe, and partly to their command of the gold and silver mines of Mexico and Peru, in an eager lust of whose produce they brought cruel calamities on a newly-discovered continent where there were many traces of antique life, the records of which perished in their hands or under their feet, These ephemeral o causes of greatness removed, the hollowness of the situation was exposed; and Spain, though rich in her own natural resources, was found to 'be' actually poor -- poor in number of people, poor in roads, in industrial art, and in all the primary conditions of interior development. All examination of the foreign trade of Europe two centuries after the opening of the maritime route to India and the discovery of America would probably give more reason to be surprised at the smallness than the magnitude of the use that had been made of these events.

Mr David Macpherson, who published his elaborate Annals of Commerce in 1805, states that in 1764 the total imports of Great Britain amounted in official value to £Il,250,660, and the total exports to £17,446,306,1 He found from the Custom House books that in: 1800 the imports had increased to £30,570,004, and the exports to £43,]52,019, which he deemed an encouraging amount of progress, as, in view of the events, then deemed peculiarly disastrous, that had occurred in the interval-the loss of the American colonies, the French Revolution, and the wars of Bonaparte-it may, no doubt, be held .to be. Of the exports in 1800 £24,304,283 were British, and£18,847, 735 foreign and colonial merchandize. The proportion of the latter shows to what extent this country had become the medium of trade between Europe and the East and West Indies; but as these re-exports must be deducted from the total imports, there is left only £11,722,269 of imports to, Great Britain for her own purposes of manufacture and consumption. At the beginning of the century two-thirds of the foreign commerce of England was through London, and was largely in the hands of privileged companies. The commercial towns of the provinces and of Scotland had only begun to make some figure. In 1787 Liverpool was a small seaport, having only 445 vessels of 72,731 aggregate tonnage, and clearing inward and outward in foreign trade less than double the amount of her own tonnage. At the same period Glasgow, enriched though she had been by the trade with America, had only 46,000 inhabitants; and Manchester, though a place of considerable manufacture, was still waiting the great impulse to be given to her industry by liberal supplies of cotton, and by the inventions of Arkwright and Crompton.

It may be said, however, that in three eventful centuries the world had been well explored. Colonies had been planted on every coast; great nations had sprung up in vast solitudes or in countries inhabited only by savage or decadent races of men; the most haughty and exclusive of ancient nations had opened their ports to foreign merchantmen; and all parts of the world been brought into habitual commercial intercourse. The seas, subdued by the progress of navigation to the service of man, had begun to yield their own riches in great abundance; and the whale, seal, herring, cod, and other fisheries, prosecuted with ample capital and hardy seamanship, had become the source of no small traffic in themselves. The lists of imports and exports and of the places from which they flowed to and from the centres of trade, as they swelled in bulk from time to time, show how busily and steadily the threads of commerce had been weaving together the labour and interests of mankind, and extending a security and bounty of existence unknown in former age.

Apart from wars, which commerce directly tends to avert, but which often spring from forces more powerful for the time than commercial interest, there remained little more by which a rapid extension of international trade could be impeded, save causes arising from ignorance or impolicy; and among these deserves chiefly to be noticed the prevailing practice of nations, in promoting their own several industries and trade, to wage a subtle war in times of peace on the industries and trade of each other. That foreign imports, and even domestic exports, should contribute some quota to the public revenue is in itself a reasonable proposition. The custom-house, which has to register goods coming in and going out, and to exercise an official regulation in the ports, should defray at the least its own expense, like any other necessary mercantile function. The convenience of raising public revenue by duties on imports and exports is amply evinced by the universal adoption of this expedient; and the convenience will always be materially modified by the more or less crude or scientific form which the system of taxation has assumed, by the financial exigency of states, and by the degree in which other objects than those of revenue have been permitted to enter into the general policy. It has been argued with much plausibility that there are certain stages and conditions of some branches of industry, in which it is politic to protect them against unequal competition in their own markets with the more advanced arts and appliances of foreign countries, until they have by this means acquired ability to stand upon their own merits and this being once admitted, the transition is easy to the general doctrine that, since every nation always finds that there are commodities which other nations can produce much better and cheaper than it can produce them for itself, it is wise and expedient to place the admission of nearly all foreign goods and produce under a custom duty protective of the native industry. The interest of the public revenue is here lost in another line of policy, because protective duties carry the consequence that several parts of a nation have to pay to several other parts more of their own means for what they need than they should have had to pay to the foreigner, and under a system of this kind the sources of public revenue, so far from being increased, are certain of being impaired. On the other hand, there are imports so entirely of foreign origin, and so free from considerations of competition with domestic industry, that large revenue may be raised upon them in the custom-house, without disturbing the freedom or equity of international trade. The immense customs revenue of the United Kingdom from duties on tea, coffee, and tobacco (duties on wines and foreign spirits may be excluded since they are set off by excise duties on native liquors) is a remarkable example of the power of levying public revenue in the ports without infringing any commercial or economic principle. The question of tariffs thus appears to be capable of reasonable solution as long as it is kept within the circle of what is permanently expedient to the public revenue. When it passes beyond these bounds it launches into a sea of complicated errors. The idea or self interest that has force to discourage the imports of foreign commodities by protective duties passes naturally onward to bounties on the export of some favoured articles of domestic produce, under which the same practical result is conversely produced, and one part of the nation has to pay in taxes to the state some proportion of the price necessary to effect a sale abroad of the produce of another part of the nation. When bounties are given, they have to be accompanied with a series of compensations or "draw-backs;" and the confusion has often become so great, as when the export bounty is on the manufactured article and the Protective duty on the imported raw material, or as, say, when there is a duty on foreign wool, and woollen goods on export are entitled to a drawback, that the state bas been reduced to a dilemma, and anything it did seemed only to make the condition worse. This medley of cross purposes is increased by the means adopted by parent states on one hand to bolster, on another to monopolize to themselves, the trade of their colonies, and by the elaborate rules of preference and exclusion by which maritime nations have attempted to favour their own ships in the carrying trade of the seas.

All the mischief of the protective and prohibitory system was exhibited by the Orders in Council of the British Government, and the Berlin and :Milan decrees of Bonaparte, fulminated in the passion and fury of war ; and if these high acts of power were seen to be not only futile and sublimely ridiculous, but in their aim and effects destructive of all commercial civilization, it would argue little reason on the part of nations to carry out the same objects through the more calm, systematic, and insidious operation of mutually hostile tariffs. Though nothing dies more slowly than the spirit of monopoly in trade, yet from many signs it may be hoped that this obstacle to commerce will gradually disappear like others.

The present century has witnessed an extension of the commercial relations of mankind of which there is no parallel in previous history. The facts are so well known that it is unnecessary to reproduce them in all detail; and yet it may be useful to indicate, however lightly, the principal phenonema. The heavy debts and taxes, and tbo currency complications in which the close of the Napoleonic wars left the European nations, as well as "the fall of prices which was the necessary effect of the sudden closure of a vast war expenditure and absorption of labour, had a crippling effect for many years on trading energies. Yet even under such circumstances commerce is usually found, on its well-established modern basis, to make steady progress from one series of years to another. The powers of production had been greatly increased by a brilliant development of mechanical arts and invention. The United States had grown into a commercial nation of the first rank. The European colonies and settlements were being extended, and assiduously cultivated, and were open-ing larger and more varied markets for manufactures. In 1819 the first steamboat crossed the Atlantic from New York to Liverpool, and a similar adventure was accomplished from England to India in 1825-events in themselves the harbingers of a new era in trade. There began also to be signs, in the general prominence given to the study of economic principles, and in the policy of Mr Huskisson in England, of a growing public opinion in favour of greater freedom of trade; and China, after many efforts, was opened under treaty to an intercourse with foreign nations which was soon to attain surprising dimensions. These various causes supported the activity of commerce in the first four decades; but the great movement which has made the century so remarkable was chiefly disclosed in practical results from about 1840.

It has been seen above what the amount other foreign trade of Great Britain was in the last year of the 18th century. In 1839 the total value of British produce and manufactures exported, then including under the Legislative Union of the Kingdoms Irish produce and manufactures, was £53,233,580; and the total value of imports was £62,048,000, of which .£12,796.000 was exported to other countries. The number of vessels belonging to the British empire in 1839, while the navigation laws were still in force, was 27,745, of an aggregate tonnage of 3,068,433, and 191,283 men. In 1850 the exports of home produce and manufactures had increased to £71,368,000, and the imports to £100,469,000, of which £21,874,000, was exported. In 1873, which may be taken as the close or the period under review, the declared value of exports of British and Irish produce and manufactures reached the enormous total of £255,073,336, and the imports the still more astonishing total of .£370,380,742. In the returns for 1873 the exports of foreign and colonial merchandize are given only in quantities, but in the two succeeding years the value of this branch of export trade is given as .£10,251,220 in 1874, when the total imports were £370,054,834, and '£12,103,732 in 1875, when the total imports were .£373,941,125-much less than in 1800, when the official value of re-exports is given as £18,847,735, on a total import of only £30,570,004, indicating, on the one hand, how greatly direct import from the countries of origin to the countries of use must have increased during the century, and, on the other hand, in how much larger proportion our imports of foreign and colonial merchandize had been entered for home consumption. The shipping in 1873, not of the British empire as in 1839, but of the United Kingdom alone, had increased, under repeal of the navigation laws, to 21,581 vessels, 5,748,097 tons, and 202,239 men.

The total value of British and Irish exports in 1873, as compared with 1839, shows an increase of 379 per cent., and of imports an increase of 496 per cent.-an expansion of trade within the third of a century wholly without example. In the years from 1800 to 1839 the increase of domestic exports had been only 119 per cent., and of imports 102 per cent. A larger progressive increase of imports than of exports has been a feature of British commerce for the last twenty years, and would seem to bear out the opinion of economists that this is the result of all prosperous foreign trade, though an excess of imports over exports so large as £120,000,000 per annum cannot possibly be due to the cause which they have usually assigned for it, viz., the profit accruing from the exchange of goods less valuable for goods more valuable in the respective countries, and is probably only accounted for by the large investments of British capital of late years abroad, the interest of which has for the most part to be paid in merchandize. 1

An increase of the foreign trade of the United Kingdom from £115,281,580 to £625,454,078, in the course of thirty-four years, presents a vaster theme than can be easily grasped, and it may be enough here simply to supply some concise information -- (1) as to the commodities which entered into so large a commerce, and (2) as to the distribution of the movement in the various quarters of the world. In the Parliamentary Account of Revenue, Population, and Commerce for 1839, a summary is given of the principal articles of British and Irish export, and their respective values; and by placing these in juxtaposi-tion with the same articles of export from the Board of Trade returns for 1873, as in the following table, a pretty comprehensive view may be obtained of the impulse given to our various manufacturing industries;


These figures speak largely for themselves.' The British export of cotton manufactures in 1839 was so great as to cast into the shade every other export, and, though its increase since that period has been wonderful, yet it is gratifying to observe, in the progress of other branches, the greater breadth and variety which the manufacturing industry of the United Kingdom has assumed. The export of cotton goods and yarns in 1839 was nearly a half of our whole export of produce and manufactures. In ] 873 they were less than a third. Indeed, if coal and iron, and iron and steel manufactures be put together, they will be found much to exceed in export value the cotton industry, though it must be added that to the extension of the latter there are yet no apparent limits. Many articles of export, which in 1839 were too inconsiderable to be included in a summary of principal articles, and not a few which had not then appeared in the export list, have since risen to a value much exceeding that of some principal articles in 1839 ; as for example, in 1873 alkali and chemi-cal products, £4,676,861; beer and ale, £2,419,575; books, £912,534; herrings, £1,027,121; paper manufactures, £973,899; painters' colours and materials, £1,016,975; stationery other than paper, £672,970; telegraphic wire and apparatus, £2,359,563; and iron, steam, and sail-ing ships, made to foreign order, of which there is no record in the Board of Trade returns whatever. The imports of the United Kingdom in 1873, besides many new commodities of great aggregate value, such as esparto, guano, gutta-percha, hops, jute, oil-seed and oil-seed cakes, petroleum, pyrites, and various chemical substances, present a general increase over the whole range of foreign and colonial merchandize, most marked in raw materials and provisions, of which the chiefly notable example, since they may fitly be embraced in the same category, includes wheat, corn, flour, rice, cattle, sheep, pigs, bacon, butter, cheese, eggs, poultry, potatoes, all manner of farm and dairy pro-duce, the import value of which in 1873 is found to have amounted to £85,036,365.

This, however marvellous, is indeed but the commerce of our kingdom, but it contains the main current of the commerce of the whole world, and is consequently an example, though a strong and concentrated example, of what has been passing in other mercantile communities, The exports of all nations have not been computed at more than £800,000,000 to £850,000,000. Deducting from the larger sum the British and Irish exports, it follows that more than two-thirds of the exports of all other parts of the world are imported into the United Kingdom. Any permanent increase of trade in so large a centre is impossible without an increase throughout the general sphere, though this increase may be variously distributed. The following stat,istica1 results of Professor Levi exhibit in the briefest form where the chief movement has been in the remarkable epoch under consideration, so far as it can be seen through the trade of the United Kingdom.1


It is always critical to assign specific causes for com· ercial results on so vast a scale and over so wide a theatre,in such cases there must not only have been a long antecedent preparation of means to enable such rapid and gigantic efforts to be made, but it is certain that many economic causes will be found to have been in concurrent operation, effects themselves becoming causes in turn, and though in apparent conflict, one checking the excess of the other, yet in reality extending and sustaining the general impulse. But three grand characteristics of the period have been adduced with almost common consent as affording an explanation of the phenomena -- (1) the adoption of free trade by Great Britain, (2) the Californian and Australian gold discoveries, and (3) steam navigation, railways, telegraphs -- and these may obviously be accepted as the most powerful forces ever brought to bear on the extension of trade in any one age.

The measures by which Sir Robert Peel introduced this great change in the policy of the United Kingdom were marked by four general objects, merging by practical sequence in the absolute principle of freedom of trade -- 1st, to remove from the tariff all prohibi-tions of foreign import, among the chief of which were agricultural live stock, while retaining for a limited period some protective regulation; 2nd, to place hundreds of articles of the nature of raw materials of manu-facture, and others of less importance, yet useful in the a.r-s, on a footing of entire freedom from customs duty; 3rd, to reduce the duties on foreign manufactures which came into competition with home manufactures; and 4th, to repeal the corn laws, admitting foreign grain on a nominal fixed duty, which last involved an equally com-plete relief to provisions, live stock, agricultural produce of every kind, and to foreign manufactures. When the landlords and farmers were placed in full and direct competition with the world, no class of manufacturers had any excuse left for the slightest shred of protection. All these measures had the appearance more of liberal concessions to foreign nations than of any advantage to home producers; and this is, no doubt, the reason why free trade was so long resisted, and many were unable to see, until the problem was visibly demonstrated, that in libocating commerce, even in developing foreign resources, the most powerful impulse may be given to all the springs of domestic prosperity. The immediate effects in increasing the public revenue -- even the customs revenue, which seemed en· dangered by the abolition of so many duties -- in reviving British trade and manufactures, and imparting new life to agriculture itself, were so great that the free trade policy was speedily carried up to its highest points of triumph. The differential duties on foreign and colonial, slave and free labour sugar were removed; and the navigation laws, in favour of which the greatest prejudice had long existed, were fully conformed to the new policy. The expected influence of so successful an illustration of free trade on other nations has not yet been realized to any considerable extent. A more liberal system of trade with France and other European countries has only been effected by treaty, which, however mutually advantageous in its results, is in its temporary and provisional character more or less unsatisfactory. It was not enough that Great Britain could say to her neighbours that free trade had worked well not only for herself but for them. There was always the ready retort of the protected interests in the respective countries that what was good for England in ' her somewhat exceptional condition, might not be good, or might even be impossible, for them; and here the controversy has rested. But it must be allowed to argue a vast deal for the power of free trade that Great Britain, in the , face of so many unreciprocal tariffs, has been able to open: an effective. market in her ports for amounts of foreign' goods and produce which thirty years ago would have been deemed fabulous, while at the same time circulating her own commodities in such increasing quantities to all parts of the world. There can be little question that the free commercial policy of this country has been one of the leading springs of the late marvellous extension of inter· national trade.

The effect of the Californian and Australian gold mines has been compared to that of the silver mines of South America at two periods-when their treasures began to be distributed in Europe, and again when the abundance and cheapness of quicksilver increased their productiveness; -- but there is one difference at least, viz., that under the greatly more active life of the present age, as compared with the 16th and 17th centuries, the results of the Californian and Australian gold discoveries were much more rapidly developed than in the other case, and may be said to have passed and been exhausted under the eyes of a single generation. We should thus be better able to judge the effect of sudden, though, as they prove, always temporary increases of the supplies of the precious metals.

The two events in question were almost coincident, and they came when a general extension of trade had already been ten years in progress. The first effect was to produce a great emigration to the countries in which the gold-fields were situated, and this was followed by large exports of goods to the same quarters, which, as usually happens when business falls under speculative impulses out of the: ordinary mercantile course, were much overdone, and ended eventually in heavy loss to the shippers. Abundance of labour had been supplied to the goldfields with unwonted celerity, and as the labour was not unremunerative, and in many cases was even rewarded by large findings of gold, the commotion in emigration, traffic, and shipping was sustained for a considerable time. The coffers of the banks of England and France were soon filled with the new supplies of gold, and these imparted increased confidence to banking operations by which they were as soon redistributed. All this was calculated to give additional impulse and extension to the commercial forces already in motion. There was a new increase of demand for goods; much labour had been transferred from old seats of industry to new fields; and there was rise of wages, and rise of prices. But whether the effects would have been different whatever other produce than gold had been the impelling cause may be much doubted. The effect of increased supplies of the precious metals per se on prices is difficult to trace, and is seldom detected by the keenest analysis, more especially in : a period of extending trade and industry, for the precious; metals are then more quickly absorbed, and many causes, I of which their increased supply is but one and the least, are operating on the value of goods. The Californian and ' Australian mines remain productive, though in much diminished amount, and their most permanent effect on i commerce will probably be found to be that they helped! materially to build California into a populous State, which has become one of the largest granaries of wheat in the ' world, and to make the Australian colonies a growing empire, of such varied resources that its foreign trade, it greatly as it had increased in the first ten years of the gold discoveries, continued to increase in the' subsequent ten: years, when its produce of gold had declined into a sub- , ordinate interest.

Immensely important as the creative and stimulating effect of the free trade of Britain and the Californian and Australian gold discoveries had been, they pale before a mighty service that remains to be noticed, and which, in the prolific force of a world aroused to commerce, they had all the while been carrying forward in their train.

There is little need of remark in this place on steam ships, railways, and telegraphs-equally marvellous in their power of facilitating commerce and in the rapidity of their construc-tion to this end-beyond a simple indication. The words alone convey what an age we have been living in, and what the international progress in commerce must have been. In 1839 the ocean steamers in the world, if any, could have been counted on one's fingers. In the United Kingdom alone there are now 1597 steam vessels, of nearly 1000 average tonnage, wholly employed in foreign trade. All the greater maritime states have lines of ocean steamers, and there is scarce any part of the world to which goods and passengers are not carried with the speed, regularity, and capacity which steam-power has given to navigation. That goods might be hauled overland by steam was only deemed possible when George Stephenson opened the first short railway in England in 1825. There are now 17,000 miles of railway in the United Kingdom, or one mile of steam-road to every seven square miles of area, carrying both goods and passengers with the ease and celerity of this new system. A similar work has been done in other civilized nations, and over many thousands of miles of comparatively desert tracts of country. The only densely-peopled quarter of the world unknown to railway enterprize is China, and in China a short railway has just been opened from Shanghai to Woosung, amid the curiosity and welcome of the populace. The rapid development of telegraphy is more wonderful even than that of steam ships or railways. Difficult problems of pure science, of science applied to art, and of material manufacture, had to be solved and tested at every step, and all this had to be done with the slightest attractions to capital on the stock exchange. Yet the telegraph wires have been laid successfully under the Atlantic, the Pacific, and the Eastern Seas, and there remain now but few parts of the commercial world to which messages may not be sent and answers received within a few hours. These wondrous and wondrously combined powers of science and mechanism have realized, in the highest form conceivable to the practical mind, the facility of transport and the means of rapid communication and intelligence which commerce had been seeking at infinite distance from the beginning of time, but seeking in vain. Their influence on the interior economy of commonwealths has been no less marked than on the exterior distribution of their products. They are the work of less than half a century, and yet to form them has cost tens of thousands of millions sterling of capital. On whatever side the question is considered, nothing less than marvels are presented to our reason. For supposing these achievements possible, the science, art, and labour prepared and ready, where was the wealth to be found to accomplish them It may be said that steam ships, railways, and telegraphs have been called into existence by the rising energy and resource,; of commerce, and it may also be said that at every stage I they have created the traffic by which alone they could be sustained and extended.

The international lending of capital has attained such magnitude, and is so often lost sight of in the study of more visible imports and exports, as to require careful con-sideration, not only on the part of the immediate lenders and borrowers, but of all who are engaged in foreign trade.1

Capital, in its monetary form of transfer, is as launch a commodity as the more usual articles of trade; and when a country lends large sums to another country, the same effects are produced on the rates of exchange for the time I being, and more protractedly on the general course of import and export, as would be produced by an equivalent amount of goods exported by the borrowing country. The imports of the borrower, during the period of expendi-ture of the loans, will increase; and the exports, though they may not diminish, will lose in some measure their previous proportion to the imports. These are consequences worthy of observation in the general conduct of mercantile business, but they also go farther. The free lending of , money from country to country, with its incidents of higher rates of interest, and a certain degree of speculative adventure, is legitimate. By this means the richer parts of the world help to develop the poorer, as well as to increase their own prosperity; and when the debts thus contracted become valid and transferable securities, they are an import-ant element in equalizing exchange where temporarily disturbed. But the extreme looseness with which this branch of commerce is conducted almost exceeds belief. The proceedings of the recent Committee on Foreign Loans have thrown some light on the subject. As long as bankers and financiers of repute put loans on the market without care as to their objects or security, or an exercise of the least mercantile judgment as to the probable effect of the loans on the value of requisite materials, and with the view simply of making some large immediate profit to themselves, and dropping the whole charge and risks, often by deceptive means, into the hands of a helpless public of investors, the most deplorable consequences must ensue. It is scarcely an exaggeration to say that in the years 1869-72 the foreign railway and other undertakings thus launched were such I as there were not materials in the markets of the whole world to, carry through, without an enhancement of values, that should not only render the undertakings themselves hopeless, but seriously cripple much well-established trade. In the more solid class of foreign loans, bearing the security of not unprosperous states, it has frequently happened that nearly the whole revenue of the state was derived from customs duties. While the borrowing proceeded, the imports of the state increased, and the revenue flourished, giving a guarantee to the creditors. When the loan had been expended, and the return interest and redemptions had to be paid, the imports suddenly declined, and the, revenue security on which the money had been lent disappeared, throwing the states themselves into much commercial, embarrassment, in some cases into political convulsions. This subject cannot here be further pursued, but its bearings on trade are sufficiently apparent.

It may be said, in conclusion, that commerce has acquired a security and extension, in all its most essential conditions, of which it was void in any previous age. It can hardly ever again exhibit that wandering course from route to route, and from one solitary centre to another, which is so characteristic of its ancient history, because it is established in every quarter of the globe, and all the seas and ways are open to it on terms fair and equal to every nation. Wherever there is population, industry, resource, art, and skill, there will be international trade. Commerce will have many centres, and one may relatively rise or relatively fall; but such decay and ruin as have smitten many once proud seats of wealth into dust cannot again occur without such cataclysms of war, violence, and disorder as the growing civilization and reason of mankind, and the power of law, right, and common interest forbid us to anticipate. But, with all these advantages, it must not be supposed that the future course of trade is free of difficulty. The very magnitude of commerce now suggests what serious work devolves on all who are engaged in it. If in the older times it was thought that a foreign merchant required to be not only a good man of business, but even a statesman, it is evident that all the higher faculties of the mercantile profession must still more be called into request when imports and exports are reckoned by hundreds instead of fives or tens of millions, when the markets are so much larger and more numerous, the competition so much more keen and varied, the problems to be solved in every course of trans-action so much more complex, the whole range of affairs to be overseen so immensely widened. It is not a company of merchants, having a monopoly, and doing whatever they please, whether right or wrong, that now hold the commerce of the world in their hands, but large communities of free merchants in all parts of the world, affiliated to manufacturers and producers equally free, each under strong temptation to do what may be wrong in the pursuit of his own interest, and the only security of doing right being to follow steady lights of information and economic science common to all. The triumphs of commerce and its auxiliaries have been exhibited in the present article. Easy transport of goods by land and sea; prompt intelligence from every point of the compass, general prevalence of mercantile law and safety, have all been accomplished; and the world is opened to trade. But intellectual grasp of principles and details, and the moral integrity which is the root of all commercial success, have to be severely tested in this vaster sphere. (R. SO.)

The above article was written by Robert Somers; edited the Scottish Herald, 1844; assistant-editor of The Witness, 1845-47; author of Letters from the Highlands, The Southern States since the War, 1871, and Trade Unions.

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