American voyage round the world. Already on almost every sea the stripes and stars began to wave. In a second voyage Captain Gray entered for the first time the mouth of the Columbia or Oregon River, an exploration relied upon by the United States, in their controversy with Great Britain many years afterward as to the ownership of that region, as affording a claim of title by discovery.

CHAPTER VI

FOREIGN INFLUENCES

INTRODUCTION

It is important to bear in mind that from an economic point of view the colonial period of American history did not end with the Revolution, but continued for more than a generation after that event. The chief characteristic of colonial economy, as explained in the introduction to the second chapter, is the dominance of foreign trade in the economic affairs of a community. The political separation from Great Britain scarcely affected this feature of our economic situation. After the Revolution, as well as before, prosperity depended upon our ability to exchange the products of certain industries based upon our natural resources with other countries for all other forms of wealth. Whatever interfered with that exchange brought hard times; whatever promoted it brought prosperity. Two events after the establishment of the new government profoundly affected this important element in our economic life. One was the European wars which followed the political revolution in France; the other was that series of improvements in the arts of production which pass under the name of the Industrial Revolution. The first was much greater than the second in its immediate effect, but was temporary and came to an end in 1815. The second was slower in its operation, but steadily increased in importance and has continued to the present day.

The chief effect of the European wars was to throw into our hands the greater part of the colonial carrying trade of the world—an economic prize for which European nations had been fiercely struggling for nearly two centuries. A secondary effect was to create a European market for the food products of the northern states. The effect of the Industrial Revolution upon colonial communities generally was to create a demand in older communities for those extractive products which the new communities could easily produce. The first commodities for which a demand arose were the raw materials of the textile industries, cotton and wool. Later on food supplies in the form of meat and breadstuff were required. This country at once took the leading part in supplying cotton, as the demand for it arose, and has held it without interruption to the present time. Half a century later it was able to secure the first place in the supply of food products also.

Until the close of the European wars in 1815 put an end to the first influence, the economic life of this country continued as in colonial times to be concerned almost entirely with the extractive industries and the foreign

commerce upon which they depended. After that date the South continued in that situation until the Civil War, while the North was compelled to diversify its industry and to depend upon internal rather than foreign commerce for its prosperity. This internal commerce was, however, as we shall see, closely connected with the foreign commerce of the South.

I. THE EUROPEAN WARS AND THE NEUTRAL TRADE

A. GROWTH OF NEUTRAL TRADE

1 The war between France and Great Britain, which commenced in 1793, and which continued, with but a short interval, for many years; and until it involved all the nations of Europe, and principally, on the side of France, against Great Britain, threw into the hands of the Americans, no small portion, of the trade of the world. The vast superiority of the naval force of England, rendered the intercourse of the European nations, with their colonies, extremely difficult. These nations, therefore, were obliged to depend upon neutrals, to carry on this trade, between them and their distant possessions. The valuable productions of the French, Spanish, and Dutch colonies, could find their way to Europe, in no other mode, than under a neutral flag.

The local situation of the United States, in relation to the West India Islands, naturally threw a great proportion of the trade of those Islands, into the hands of the American merchants; and the great increase of the tonnage of the United States, as well as the spirit and enterprise of their citizens, led them, also, in the progress of the war, to engage in the more distant trade of the East Indies, and every other part of the world. The valuable articles of colonial produce, such as sugar, coffee, spirits, cocoa, indigo, pepper, and spices of all kind, were carried by them, either directly to Europe, or brought to the United States, and from thence exported in American vessels. These and other articles imported, were allowed, under certain regulations, to be exported with a drawback of the duties upon them. The manufactures of Europe, and particularly those of Great Britain, as well as the manufactures and produce of the East Indies and China, were, also, imported, and again

1 Pitkin, A Statistical View of the Commerce of the United States of America [1835], pp. 145-147, 150-152.

exported in large quantities, to the West Indies, South America and elsewhere. This trade, called the carrying trade, in some years, exceeded in value, the trade of the United States, in articles of domestic produce; and was the means, not only of increasing the American tonnage, but of adding, to the wealth of the nation, as well as to that of individuals.

The value of the exports of the United States, both of foreign and domestic origin, are presented in Chapter III. In the years 1805, 1806 and 1807, the value of domestic exports was $134,590,552, on an average $44,863,517 per year, while the value of foreign exports was $173,105,813, being, on an average, each year $57,701,937, making a difference, in favor of the latter, of $38,515,261, or $12,838,420 per year.

The following quantities of sugar, coffee, pepper, cocoa, and manufactures principally paying duties ad valorem, were exported from 1791 to 1816.

This trade, brought the United States, into collision with some of the European powers, and particularly Great Britain and France; and in consequence of the celebrated decrees and orders of those two nations, (some notice of which will be taken, in a subsequent chapter,) the embargo was laid and commercial restrictions commenced with these nations; and which finally ended in a war between the United States and Great Britain. During the war, this trade was annihilated. On the return of peace in Europe, as well as in America, this trade in foreign articles, was, of course, greatly diminished.

...

While the Americans were thus carrying to Europe the rich products of the East and West Indies, they brought back in return, great quantities of manufactured goods, principally from Great Britain, which they again exported, to different parts of the world, especially, to the West Indies and South America.

The amount of goods, free of duty, and paying duties ad valorem, embracing woollens and cottons, exported in 1806, was $18,571,477; and in 1807, $18,564,507.

The whole amount of goods, paying ad valorem duties, imported the same years, was,

Between one third and three quarters, therefore, of all the goods, paying those duties, imported in these two years, were again exported. These goods came from different quarters of the world, in 1807, in the following proportions, viz.

Of which $43,525,320 came from the United Kingdom of Great Britain and Ireland and dependencies; $3,812,065 from France and dependencies; and the residue, being $11,318,532, from other countries and places.