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diff --git a/25588.txt b/25588.txt new file mode 100644 index 0000000..2466373 --- /dev/null +++ b/25588.txt @@ -0,0 +1,1690 @@ +The Project Gutenberg EBook of Outline of the development of the internal +commerce of the United States, by T.W. van Mettre + +This eBook is for the use of anyone anywhere at no cost and with +almost no restrictions whatsoever. You may copy it, give it away or +re-use it under the terms of the Project Gutenberg License included +with this eBook or online at www.gutenberg.org + + +Title: Outline of the development of the internal commerce of the United States + 1789-1900 + +Author: T.W. van Mettre + +Release Date: May 24, 2008 [EBook #25588] + +Language: English + +Character set encoding: ASCII + +*** START OF THIS PROJECT GUTENBERG EBOOK OUTLINE--INTERNAL COMMERCE--U.S. *** + + + + +Produced by Frank van Drogen and the Online Distributed +Proofreading Team at https://www.pgdp.net (This book was +produced from scanned images of public domain material +from the Google Print project.) + + + + + + +An Outline of the Development + +OF THE + +Internal Commerce of the United States + + +1789-1900 + + + +By T. W. VAN METRE + +Thesis presented to the Faculty of the Graduate School +of the University of Pennsylvania in partial +fulfilment of the requirements for +the degree of Ph.D. + + + +BALTIMORE +WILLIAMS & WILKINS CO. +1913 + + + + +AN OUTLINE OF THE DEVELOPMENT OF THE +INTERNAL COMMERCE OF THE +UNITED STATES, 1789-1900[1] + + [1] In this paper, which is a brief abstract of a work to be + published later, an attempt is made to outline the history of the + development of the internal commerce of the United States after + the formation of the Union in 1789. The term "internal commerce," + though in its fullest signification embracing every purchase, + sale, and exchange of commodities between the individuals of a + country together with the business of transmitting intelligence + and of transporting persons and things from place to place, is + here used primarily as applying to the interchanges of + commodities among the various sections of the United States + carried on over interior lines of transportation--the rivers, + highways, canals, lakes and railroads. + + + + +I + +1789-1830 + + +At the beginning of the national era the internal commerce of the +United States gave small promise of the tremendous development it was +to undergo during the ensuing century. There was as yet too little +differentiation of occupation to give rise to a large interstate trade +in native products, and the proximity of the greater part of the +population to the seacoast made it cheaper and more convenient to carry +on the small interstate trade that did exist by means of small sailing +vessels plying along the coast. Practically all the internal trade was +devoted to bringing the surplus agricultural produce of the interior to +the seaport towns where it was exchanged for imported wares that could +not be produced by the inhabitants of the inland region. + +As is usual in a new country, the settlers who had first pushed into +the interior had founded their new homes close to the rivers, and these +natural highways had always been and still were the most important +means of transportation to and from the seacoast. At the mouths of the +larger streams flowing into the Atlantic Ocean were to be found large +and wealthy cities, where enterprising men were laying the foundations +of large fortunes in a rapidly growing trade in the agricultural and +forest products floated down from the interior. + +Living close along the ocean where numerous excellent harbors and long +stretches of sheltered water gave ample facilities for the little +inter-colonial trade that existed, and where rivers afforded natural +means of transportation from the interior to towns on the coast, the +people of early colonial days had not found it necessary to give much +time to the construction of roads. The gradual inland movement of the +population had finally compelled them, however, to give some attention +to the means of land transportation and many rude earth roads were +built to replace the old Indian trails. These roads were unspeakably +poor, sloughs of mire during the thaws of winter and spring and thick +with dust in the summer, but bad as they were they carried considerable +traffic and their use was constantly growing. Inland towns were +beginning to grow up at the focusing points of the country roads, and +the owners of general stores at such places derived large profits out +of their position as middlemen between the farmers of the interior and +the merchants at the nearest seaports. Three great roads had been built +into the western country, one up the Mohawk Valley into western New +York, and two across the Alleghany Mountains, the Pennsylvania Road +from Philadelphia to Pittsburgh, and the Wilderness Road over which the +early settlers of Kentucky had threaded their way up the Shenandoah +Valley and through Cumberland Gap to the southern banks of the Ohio +River. + +The transportation facilities of the times were, however, entirely +inadequate to the needs of the country, and the lack of better means of +getting products to market was a serious impediment to internal +development. Tench Coxe wrote in 1792: "To a nation inhabiting a great +continent not yet traversed by artificial roads and canals, the rivers +of which above their natural navigation have hitherto been very little +improved, many of whose people are at this moment closely settled upon +lands, which actually sink from one-fifth to one-half of the value of +their crops in the mere charges of transporting them to seaport towns, +and others, of whose inhabitants cannot at present send their produce +to a seaport for its _whole_ value, _a thorough sense of the truth of +the position_ is a matter of _unequalled_ magnitude and importance." + +Especially was communication between the Ohio Valley and the outside +world difficult and expensive. The natural outlet for the surplus of +this valley was the Mississippi River. During the Revolutionary War, +the Spanish government had given the people of the colonies the right +of free navigation of the river and a brisk trade had sprung up between +the western settlements and New Orleans, but in 1784 Spain had put an +end to this trade by withdrawing the right of free navigation. The +people of the West, enraged at being deprived of what they considered +their natural right, protested furiously and appealed to Congress for +protection, but their appeals were unavailing and the river remained +closed for more than a decade. The only market left to the western +farmers was the cities on the eastern coast. Peltry, ginseng and +whiskey were almost the only products that would pay their cost of +transportation to Philadelphia, and the proceeds derived from the sale +of these were sufficient to purchase only a few things of prime +necessity such as salt, gunpowder, and some indispensable articles of +iron. Even this small trade of the West was crippled when the new +government placed an excise tax on whiskey, and the resentment felt +against the federal authorities for their apparent disregard of the +economic interests of the western people blazed forth in open +rebellion. + +The commercial isolation of the Ohio Valley ended, however, in 1795, +when the national government, spurred to action by the threats of +secession and clamor for protection coming from the western farmers, +secured a treaty with Spain opening the Mississippi River to +navigation. The successful conclusion of the negotiations was hailed +with great rejoicing in Tennessee, Kentucky, Pennsylvania and Ohio. +Fleets of flat-boats loaded with tobacco, pork, flour, grain and +whiskey began to move down the river. In 1799, more than a million +dollars worth of goods were received at New Orleans from the country up +the Mississippi. In October, 1802, the Spanish Intendant at New +Orleans, acting on his own responsibility, suddenly withdrew the "right +of deposit" at the city, and contrary to the provisions of the treaty, +he refused to assign an equivalent establishment at any other place on +the banks of the river. The western people were wild with rage. It was +necessary to send troops to Kentucky to prevent an armed expedition +against the Spanish province. Fortunately, the Spanish government +disavowed the action of the Intendant and in April, 1803, the river +trade was again restored. Desirous of avoiding such difficulties in the +future, Jefferson pushed the negotiations already begun with Napoleon, +to whom Spain had ceded her claims to Louisiana, for the purchase of +New Orleans and the territory through which the river flowed from the +possessions of the United States to the Gulf of Mexico. The +negotiations ended in October, 1803, with a wholly unexpected +result--the purchase of the entire Louisiana province. In December, the +United States took possession of the newly acquired territory and the +undisputed control of the Mississippi was secured forever. + +The opening of the Mississippi marked the beginning of an active +internal commerce within the United States. The farmers of the Ohio +Valley, which was now being rapidly settled, found an outlet for their +heavy agricultural produce, and consequently secured a purchasing +power, enabling them to buy manufactured goods and merchandise, which, +notwithstanding the distance and the inferior roads, could be carried +to them in wagons from the East. Though the produce of the western +farmers was shipped down the Mississippi, very few of their supplies +were brought up the river, because of the difficulty of urging a +flat-boat against the powerful current of the stream. This triangular +trade of the Ohio Valley grew rapidly. The receipts at New Orleans, in +1807, including the cotton, sugar and molasses of Louisiana, which made +up a third of the total, amounted to $5,370,555. The money for which +the products of the West were exchanged at New Orleans was almost +invariably spent for manufactured and imported wares from eastern +cities. Large Conestoga freighters made regular trips from Philadelphia +to Pittsburgh bringing loads of hats, boots, powder, lead and clothing +which were distributed from the "Gateway of the West" among the towns +and villages down the river. Baltimore and New York also shared in the +western trade. + +The internal commerce of the country in 1810, as in 1790, was greatly +handicapped by the high costs of transportation. Taking the country +over, the charges for transporting merchandise were $10 per ton per 100 +miles and articles that could not stand this rate were shut from +market. Grain and flour could not bear transportation by wagon more +than 150 miles. The lack of commerce intercourse caused many sections +to develop local economic and political interests which endangered the +unity of the nation. "The question of the hour was plainly how to +counteract this tendency by a system of interstate commerce which +should unite them by a firm bond of self interest."[2] Gallatin's +report on internal improvements in 1808 reflects the plans and +ambitions that were in the minds of the commercial and political +leaders of the country, but unfortunately the foreign controversies in +which the United States became involved at that time prevented any +attempt to carry out his proposals. + + [2] B. McMaster, _A History of the People of the United States_, + vol. iii, p. 465. + +The war of 1812 brought a period of unsettled commercial conditions. +Domestic industry and trade were stimulated for a time, but a sharp +financial panic in 1814 caused a year of general depression. The return +of peace early in 1815 was followed by a quick revival of business, and +the next three years brought an era of prosperity to nearly everyone +except the manufacturers along the eastern coast, many of whom were +ruined on account of a deluge of importations from Europe. + +Immigration to the West set in with renewed vigor after the close of +the war. The fertile soil of the Ohio Valley contributed an enormous +product of grain, tobacco, fruit and hemp which continued to find an +outlet down the Mississippi, and the farmers increased their purchases +of imports which flowed into Pittsburgh from the East. In 1811 Fulton's +invention was introduced in western waters, and in 1817 the first +steamboat voyage was made from New Orleans to Louisville. The effect of +this new engine of commerce on the Mississippi trade was almost +magical. In 1818-19, the first year after the steamboat became an +assured success, the receipts at New Orleans rose to 136,300 tons, +valued at $16,778,000, and the volume of exports of domestic products +from the southern port was greater than that from any other port of the +country. + +But even more important to the commercial prosperity of the West than +the introduction of the steamboat was the spread of cotton culture into +the Southern States west of the Appalachian highland. Cotton culture +had been found exceedingly profitable in Georgia and South Carolina, +and when it was discovered that the rich bottom lands of Alabama, +Mississippi and Louisiana produced even better cotton than the upland +districts of South Carolina, there was a rush of settlers to the river +valleys of the new region. In 1811, fifteen-sixteenths of the cotton +raised in the United States was grown in Virginia, North Carolina, +South Carolina, and Georgia; in 1820, one-third of the total crop of +600,000 bales was raised in Alabama, Louisiana, Mississippi and +Tennessee. In the western part of the cotton belt, as in the eastern, +the planters directed practically all their capital and labor to the +production of cotton, relying on the region north of them for +provisions and live stock. The market for the grain, pork and flour of +the Ohio Valley was greatly enlarged. Flat-boat men disposed of their +cargoes of food products at the wharves of the plantations along the +Mississippi River; flat-boat stores peddled clothing, boots and shoes, +household furniture and agricultural implements from village to village +and from plantation to plantation; great droves of horses and mules +were driven into the Southern States in response to the demand for +draught animals for use in the cultivation of cotton. + +As the western farmers enlarged the volume of their sales to the +southern planters they increased their purchases from eastern +merchants. A large part of the foreign imports of the United States, +which in 1816 reached the unprecedented amount of $155,000,000, was +sold in the West. Attracted by the cheapness of the goods offered and +full of confidence in their ability to meet all debts with the proceeds +of the lucrative southern trade, the people indulged in extravagant +overtrading. Purchases far exceeded sales and the specie coming from +the South was drained away as fast as it was received, but dozens of +banks furnished a supply of currency by means of copious issues of +paper money, and the career of extravagance proceeded. The internal +trade of the country had never been so prosperous. + +The era of good times came to a sudden end in 1819 when the nation was +visited by a disastrous money panic. Nearly all the specie had been +shipped abroad, and large sums of paper money had been issued, much of +it on credit of a questionable nature. The general commercial expansion +following the war had led to extensive speculation all over the +country. When the new United States Bank suddenly began a vicious and +relentless campaign against all other banks of issue in an ill-advised +effort to force them immediately to a specie basis, loans were called +in everywhere, the circulation was greatly contracted, prices fell, +manufacturers and merchants were unable to meet their obligations, +factories shut down, mercantile firms went into bankruptcy, banks +closed their doors, and business everywhere was completely prostrated. +To make matters worse, the export price of the great "money crop," +cotton, fell from 32 cents in 1818 to 17-1/2 cents in 1820. The +provision market of the western farmers was greatly injured and thus +planter, farmer, merchant, manufacturer and banker all succumbed before +the general catastrophe. + +The panic gave a sharp check to extravagance and speculation, +importations declined, prices were readjusted and business soon began +to recover. By 1823, the country seemed to have been restored to its +former prosperous state and manufacturing in particular was more active +than it had been at any time since the war. + +Notwithstanding the revival of manufacturing and domestic trade, the +farmers of the grain states found themselves in distressing +circumstances. The Ohio Valley was yielding a product far in excess of +the demands that existed and each year found a large amount of +unmarketable grain left in the fields and granaries. Many foreign +nations refused admittance to American food products and though the +grain-growing capacity of the United States had increased sixfold since +1790, the annual exports of grain, meat and flour were but little more +than the average for the five years from 1790 to 1795. The plantations +of the South were drawing much of their subsistence from the northern +farms, but they were unable to absorb more than a small fraction of the +tremendous surplus that was seeking a market. + +Agricultural interests sought urgently for relief. Since there was no +foreign market for their surplus, they resolved to _create_ a home +market. If England would not buy food products from the United States, +the United States must refuse to buy manufactures from England, and +must, by the establishment of manufacturing industries at home, give +rise to a non-agricultural population that would consume the redundant +supplies of meat and grain. The problem of attracting capital to +manufacturing enterprises, the farmers proposed to solve by the +creation of a system of protective tariffs that would check +importations and encourage investment in mills and factories at home. +Manufacturing industries already in existence were in no apparent need +of protection and the shipping interests of Boston and New York and the +cotton planters of the South strenuously opposed the protective policy. +But the agricultural interests were not to be denied. Under the +leadership of Henry Clay, the tariff of 1824 was enacted and the +"American System" was inaugurated. In 1828, in response to an appeal, +emanating from the woolen manufacturers and seconded by the +agricultural interests, still further encouragement was given to home +manufactures. + +While the country was being agitated by the tariff controversy and +exceptionally bitter political contests, the New York canals were +opened for traffic throughout their entire length (October, 1825). No +other single work in the United States has ever had a more beneficial +effect on the prosperity of internal trade. The opening of the canals +brought to an end what had been the bane of internal commerce for half +a century--the excessive cost of freight transportation. Freight rates +between Albany and Buffalo were at once reduced 90 per cent and the day +of the freighter on the Genesee road was ended. The new canal wrought a +complete change in all the rural districts of western New York. Lumber, +staves, ashes, grain and vegetables, hitherto unmarketable, were now +shipped to the markets of the East; farm values doubted and quadrupled; +a stream of people poured into the fertile farming regions around Lake +Erie. Not less valuable was the new waterway to the district at its +eastern terminus. The laboring population of the growing manufacturing +towns reaped immense benefits from the cheaper and better means of +subsistence they could now secure, while the shipments of merchandise +westward on the canal exceeded in value the receipts of raw produce at +tide-water. New York had achieved economic unity at a single stroke. + +The success of the Erie Canal and the rapid growth of internal trade +which followed the adoption of the "American System" caused a demand +everywhere for more roads and canals and a widespread agitation in +favor of government aid to internal improvements. The federal +government gave extensive aid to private and state enterprises in the +way of land grants and stock subscriptions, though it did not engage +directly in the construction of commercial highways. The individual +states embarked in schemes of canal and turnpike building which +involved them in debts of millions of dollars. Ohio and Indiana began +to construct canals joining the Ohio River to Lake Erie in order to +secure the advantage of the new outlet to the East. Pennsylvania, +awakened to the danger of the total loss of western trade through the +state by the fact that shipments of merchandise to the West were +abandoning the wagon roads from Philadelphia, Baltimore, and New York +in favor of the cheaper route by way of the Erie Canal, began, in 1826, +an extensive system of canals to connect the Delaware River with the +Ohio River and the Great Lakes. Not to be outdone by their rival +states, Maryland and Virginia agreed upon the construction of a canal +from Chesapeake Bay to the Ohio River, and on July 4, 1828, President +Adams dug the first spadeful of earth to signalize the beginning of the +undertaking. Some financiers of Baltimore, dubious of the success of an +effort to build a waterway over the difficult route adopted by the +promoters of the Chesapeake and Ohio Canal, withdrew their support from +that enterprise, and putting their confidence in a new and almost +untried transportation device, which they believed would prove superior +to canals, just as canals had proved superior to turnpikes, they boldly +inaugurated the plan of a railroad from their city across the mountains +to the Ohio, and Charles Carroll, of Carrollton, placed the stone that +commemorated the beginning of its construction on the same day that +President Adams officiated at the rival celebration that marked the +beginning of the canal. + +Thus by 1830, the future of the internal commerce of the United States +was assured. The adoption of the "American System" could have but one +result--a tremendous expansion of domestic trade. That this expansion +had already commenced was evident from the fact that notwithstanding +the vast growth in wealth and population from 1820 to 1830, the imports +of the United States had exhibited but little increase. "The nation was +building an empire of its own with sections which took the place of +kingdoms."[3] New England, New York and Pennsylvania were manufacturing +the clothing and iron utensils for the West and South. The people of +the South were absorbed in cotton raising. They relied upon the West +for much of their food and live stock; they bought their clothing and +machinery from the North Atlantic States; and their exports brought in +the specie which facilitated the commerce of all sections. The West was +becoming a vast granary. Its new factories were drawing artisans from +the East and taking laborers from the country to swell the demand for +flour and grain that had recently been seeking in vain for a market. +The volume of shipments of food and merchandise down the Mississippi +was larger than ever and the manufacturing population of the East, +already too large to be fed by the agricultural produce of New England, +New York and Pennsylvania, was beginning to draw subsistence from the +western farms. + + [3] F. J. Turner, _Rise of the New West_, p. 297. + +Means of cheap transportation, the lack of which had been so great an +obstacle to internal development, had been or were being supplied to +meet the requirements of the new conditions. The steamboat arrivals at +New Orleans numbered a thousand each year. Water communication between +the Atlantic Ocean and the very center of the United States was +established when the Erie Canal connected the Hudson River to the +waterway afforded by the series of great inland seas. There were 1,343 +miles of canals in operation in all the United States, and 1,828 miles +more were in the process of construction. Louisville was rejoicing in +the completion of a canal around the falls of the Ohio; Ohio and +Indiana were rapidly pushing the work on the canals that were to tap +the regions hitherto tributary only to the Mississippi; the +construction of the Pennsylvania Canal was being hurried forward to +enable Philadelphia to recover the trade lost to the Erie; Maryland and +Virginia were persistently going on with the building of the waterway +westward from Chesapeake Bay. And meanwhile 44 miles of railway had +been completed and were in operation, and to show that confidence in +the new device was not lacking, 422 miles were in the process of +construction and 697 miles more were already projected. + + + + +II + +1830-1860 + + +The years between 1830 and 1860 witnessed a remarkable expansion of the +United States in area, population and wealth. By the annexation of +Texas and by treaties with England and Mexico, nearly a million square +miles of territory were added to the national domain and the western +boundary was pushed to the Pacific Ocean. The total number of people +increased in the thirty years from 12,866,020 to 31,443,321; the total +wealth from about $2,000,000,000 to more than $16,000,000,000. It was a +period of great prosperity for all branches of industry. As the tide of +settlers swept over the fertile lands drained by the Mississippi River +and Great Lakes, the agricultural production of the country increased +with amazing rapidity. The production of corn in 1859 was almost +1,000,000,000 bushels; of wheat and oats 175,000,000 bushels each, and +of cotton 4,300,000 bales, while the live stock of the country that +year, including, among other animals, 25,000,000 cattle, 22,000,000 +sheep and 33,000,000 swine, was valued at $1,000,000,000. The +exploitation of the mineral resources of the nation was carried on more +rapidly. From 300,000 tons of coal mined in 1830, the quantity grew to +13,000,000 tons in 1860; the iron mines turned out 1,000,000 tons of +ore in 1860, the copper mines 7,000 tons and the lead mines 15,000 +tons, while the production of gold in the far West, which began in +1849, averaged $55,000,000 annually during the following ten years. +Manufacturing likewise grew in importance, the value of its products +rising to nearly $2,000,000,000 in 1859. The tendency toward a +territorial division of industry was accentuated during this period. +Cotton cultivation became more than ever the dominant industry of the +entire South; most of the manufacturing was done in the New England and +Middle Atlantic States; the Northern Central States were devoted +primarily to the production of grain and live stock. + +The development of the country was accompanied by the construction of +transportation facilities to care for the expanding trade. A large +number of important canals were completed; the Ohio River was joined to +Lake Erie; Pittsburgh and Philadelphia were connected by a rail and +water line; the Illinois River was connected with Lake Michigan at +Chicago; the St. Mary's Falls Canal was built to aid the navigation of +the Great Lakes, and many other waterways of lesser importance were +constructed. Railroads grew rapidly in favor and as time went on they +were built in increasing numbers and the construction of canals was +practically abandoned. Before 1840 over 2,800 miles of track were laid +and by 1850 the mileage amounted to 9,000. The decade from 1850 to 1860 +was a period of extensive railway construction, especially in the +Northern Central States, where more than 10,000 miles were built. Early +in the decade the trunk lines of the Eastern States were pushed across +the mountains and through railway connection was established between +the Mississippi Valley and the Atlantic Ocean. New York was connected +with Chicago by a direct rail route in 1853, and with St. Louis in +1855, and in 1858 a railroad reached the Missouri River. In the South, +roads were built into the interior from all the important cities on the +Atlantic and Gulf coasts. In 1860 there was a total of 30,626 miles of +railroad in the entire country. + +With the growth of population and wealth, the diversification of +industry and the development of canals and railroads, there was a great +increase in internal commerce. The trade of this period consisted of a +few well-defined currents flowing between certain sections. A large +volume of products, mainly agricultural, went from the Central States +to the East, and a traffic of less volume but of greater value moved in +the reverse direction. There was a heavy internal movement from the +Northern to the Southern States and a light movement from the South to +the North. Aside from these movements, there was an over-land trade by +pack-horse and wagon with the Far West which became of particular +importance after the discovery of gold. For the sake of greater +clearness, these different currents of trade will be considered +separately in the order named. + + +1. TRADE BETWEEN THE EASTERN AND CENTRAL STATES + +One of the notable features of the internal commerce following 1830 was +the rise of the trade on the Great Lakes. After the opening of the Erie +Canal there was a large migration to the lands around the lakes; in a +few years thousands of acres of land were cleared and put under +cultivation; the center of cereal production shifted westward; and +hundreds of shiploads of grain were borne over the lakes toward eastern +markets. Ohio was the first state west of New York to ship grain over +the lakes. By 1835, Indiana and Michigan were sending grain eastward +over Lake Erie; in 1836 the first shipment from Lake Michigan was +recorded; in 1838 a shipment of 78 bushels of wheat from Chicago marked +the beginning of the cereal trade of that city, and in 1841 the first +exportation of Wisconsin wheat left the harbor of Milwaukee. + +The growth of the lake grain trade was exceedingly rapid. As soon as +the Ohio Canal was completed (1832) there was a diversion of traffic +from the Mississippi River to Lake Erie, and as early as 1838, the +receipts of western wheat and flour at Buffalo were larger than the +receipts at New Orleans. The repeal of the English Corn Laws in 1846 +gave a great stimulus to cereal production in the United States. As the +population of the Central States increased and as canals and railroads +were built to connect all parts of the cereal belt with the lake +cities, the lake grain trade constantly swelled in volume. In 1860 the +receipts of grain by lake at Buffalo, Oswego, Dunkirk, Ogdensburg and +Cape Vincent amounted to 62,000,000 bushels. The shipment from Lake +Michigan ports that year were 43,000,000 bushels, half of which came +from Chicago alone. + +Though grain and flour constituted the most important part of the +eastbound lake traffic, there was at the same time a considerable trade +in other commodities. Large quantities of pork, bacon, beef, lard, and +other provisions were sent to Buffalo for distribution eastward; hides, +wool, whiskey and live stock formed an important part of the traffic. +Millions of feet of lumber were transported annually from Michigan and +Wisconsin to all the other lake states; the shipment of copper from +Lake Superior began in 1845, and the iron ore traffic began ten years +later. + +The westbound shipments over the lakes were also large and valuable. In +1836, $9,000,000 worth of merchandise was sent to western states over +the Erie Canal and the lakes, and by 1854 the amount reached +$94,000,000. After the latter year there was a rapid decline in the +merchandise traffic over the canal and lake route because of railway +competition. The shipments to the West consisted mainly of dry goods, +clothing, machinery, railroad iron, drugs, imported foodstuffs, +household furniture, salt and coal. + +The trade over the Great Lakes and Erie Canal was without doubt the +most important feature of the commerce between the Atlantic States and +the interior of the country between 1830 and 1860, but this route by no +means absorbed all the traffic. The Main Line of the Pennsylvania canal +system, completed in 1832, made it possible for Philadelphia and +Baltimore to retain some of their trade with the cities of the Ohio +Valley, but this trade, like the wagon trade preceding it, was largely +one-sided, the westbound movement of light merchandise exceeding the +eastbound movement of agricultural produce. The inclined planes which +carried the traffic across the mountains proved to be an expensive and +cumbersome device, and because of a lack of better transportation +facilities, the trade of Philadelphia and Baltimore suffered constant +losses, and for a time it seemed that New York was destined to +monopolize the entire commerce between the Atlantic coast and the +trans-Appalachian region. + +In 1841, however, this situation was modified by the entrance of a new +factor--the Western Railroad, the completion of which gave through rail +connection between Boston and Albany. Because of its isolated position +Boston had not shared in the direct trade with the Central States, but +had been compelled to buy and sell through the merchants of New York +and Philadelphia. The new railroad completely altered the position of +Boston and brought an era of great prosperity to the city, at the same +time demonstrating the practicability of the steam road as a carrier of +nearly all kinds of freight. + +The immediate success of this road was a signal for the beginning of +more extensive railway construction, and the decade from 1850 to 1860 +witnessed the entrance of the trunk line roads as competitors with the +canals for traffic between the East and the West. The failure of the +Pennsylvania Canal and the growing prosperity of Boston incited the +people of Pennsylvania to take decisive steps to win back some of the +trade lost by Philadelphia and in 1846 the Pennsylvania Railroad +Company was chartered for the purpose of completing steam railway +connection between Philadelphia and Pittsburgh. By 1854, this line, the +Erie, the New York Central and the Baltimore and Ohio all reached the +Ohio River or Lake Erie. During the next six years these four lines +took over two-thirds of the flour traffic and practically all the +merchandise and live-stock traffic between the eastern cities and the +trans-Alleghany region, leaving to the Erie Canal the forest products +and grain. In addition to capturing a large share of the canal freight +the railroads easily secured most of the traffic that was accustomed to +go from the cities along the Ohio River to the eastern coast and to +Europe by way of New Orleans. The lakes and canals had previously made +some inroad on the commerce down the Mississippi, but notwithstanding +their influence the river cities of Ohio and Kentucky continued to send +the largest part of their exports southward until the railroads gave +them a through route to the East. After 1855 the shipments down the +river from Cincinnati and other important ports on the Ohio shrunk +rapidly in volume and even before the war broke out their commerce with +the East was much larger than their river trade to the South. + +While the railroads in the North were making such marked changes in the +course of internal trade, a similar transformation was occurring in the +South. Trade between the eastern and western sections of the cotton +states before 1849, aside from some traffic in slaves, was almost +negligible. In 1849 when the Western Atlantic Railroad began to run +trains from Chattanooga to the Atlantic coast, the planters of Northern +Alabama and Tennessee, who had always sent their cotton to New Orleans +and Mobile, turned to the markets at Charleston and Savannah. The +cotton receipts at those two ports doubled in a single year, while the +receipts at New Orleans fell off nearly 100,000 bales. The shifting of +the center of cotton production farther westward enabled New Orleans to +make up for its losses, but the South Atlantic ports easily maintained +and increased their trade. They also competed with New Orleans and the +cities on the Ohio River for the merchandise trade of Alabama, +Mississippi and Tennessee, and the provisions for Georgia and South +Carolina began to enter the states overland from the West, the coasting +trade on the Atlantic seaboard both gaining and losing by the changes. + + +2. TRADE BETWEEN THE NORTH AND SOUTH + +The general character of the internal commerce between the North and +South, between 1830 and 1860, differed but little from what it had been +before the former year. There were no through rail connections between +the two sections until near the close of the period, and consequently +almost the entire commerce, aside from that in slaves and live stock, +consisted of the trade on the waters of the Mississippi River system. + +This was the golden age of the river trade. Each year it grew steadily +in volume, reaching a point of prosperity in 1860 never equalled before +or since. Until the railroads began to divert the traffic in flour and +provisions after 1850, the cities on the Ohio River sent most of the +produce collected at their markets to New Orleans to be shipped to +Europe and the Eastern States or to be sold to the planters of the +cotton belt. After 1850, as the surplus agricultural produce of the +Ohio Valley was diverted from the river, its place was taken by that +coming from the fertile region around St. Louis, where thousands of +immigrants were settling in new homes. Moreover, the loss of traffic in +agricultural produce from Pennsylvania, Ohio and Kentucky was +compensated for by the increasing volume of manufactured goods and coal +coming down from Cincinnati, Louisville and Pittsburgh. Thus the +downstream traffic from the Northern States, though suffering a heavy +relative loss, made an absolute gain, and with the enormous amounts of +cotton shipped down the river added to this traffic, the Mississippi +carried considerably more produce to the sea than either the Hudson +River or the eastern roads. As before 1830, the trade up the river +failed to keep pace with the movement downstream. Of the shipments +upstream, 75 per cent consisted of articles previously sent down and +resold to planters of Mississippi, Louisiana and Arkansas. The district +north of these states bought some sugar and coffee of New Orleans, but +drew practically all its manufactures and other imported goods from the +East. + +The value of the receipts of produce at New Orleans advanced from +$22,000,000 in 1830 to $185,000,000 in 1860. The largest part of the +increase resulted from the growth of the cotton trade. The receipts of +"Western produce," which in 1820 formed 58 per cent of the commodities +entering New Orleans, constituted only 23 per cent of the total +receipts in 1860. But though showing a relative decline, the receipts +of foodstuffs and merchandise had a steady aggregate increase. As a +cotton market, New Orleans had no close rival. Its receipts of this +great staple in 1860 amounted to $109,000,000. + +St. Louis was the city of next importance on the Mississippi. Until +after 1855, St. Louis remained strictly a river city, almost entirely +dependent upon the Mississippi and its tributaries for both the +importation and exportation of the flour, grain, meat, tobacco, lead +and other goods that entered and left its busy markets. After the city +secured railway connection with the East in 1855 a large part of the +traffic entering from that direction was transferred to the railroads, +and some of the traffic leaving the city was diverted from the southern +river route to the eastern railway route. However, the volume of trade +taken from the Mississippi was not large at first and the movement of +commodities southward showed no marked decline until the outbreak of +the Civil War. + +Next to the river trade, the trade in live stock and slaves was the +most important element in the internal commerce between the North and +the South. Each year large droves of horses, mules, cattle and hogs +were driven into the South from the Northern and "border" states, the +farmers all over the corn-raising section finding an unfailing source +of gain in the demand for live stock in the southern cotton fields. The +domestic slave trade commenced to be of importance after 1820, when +cotton culture spread among the Gulf States. Slaves were bought in +South Carolina, Georgia, Alabama, Mississippi, Louisiana, Arkansas and +Texas, and exported from Virginia, Maryland, North Carolina, Kentucky, +Tennessee, Missouri and Delaware. Though no statistics of the volume of +the internal slave trade exist, evidence from contemporary accounts +indicates that it was unquestionably extensive, probably reaching a +value of $30,000,000 a year in the late fifties. + + +3. TRADE OF THE FAR WEST + +Long before Texas and the California territory became a part of the +United States, enterprising merchants on the western frontier began a +merchandise trade with the Mexican settlements in what is now New +Mexico. By 1843 this trade reached an annual value of $500,000. After +the occupation of the territory by the United States troops it became +much larger, reaching a total value in 1860 of $3,800,000. The chief +shipping points were Independence and Kansas City, Missouri. +Transportation was supplied by regular freighters who employed a large +number of men to conduct the white-topped prairie schooners across the +unsettled plains between the Missouri River and the mountains. New +Mexico paid for its imports with bullion and wool produced in the +territory, or with money secured by the sale of sheep driven to +California, or by the sale of a scanty agricultural produce to +government military posts and Indian agencies. + +In addition to the wagon trade with New Mexico, the Missouri River +cities carried on a similar trade with Utah after its occupation by the +Mormons in 1848. When gold was discovered in Colorado in 1859 there was +an immediate rush of settlers to that territory, which was accompanied +by the rise of a large trade in tools and provisions. There was no +regular overland freight traffic to the Pacific coast, the commerce of +California with the rest of the country, aside from the sheep trade +with New Mexico, being carried on around Cape Horn or across Central +America. Within California itself there was an extensive trade between +San Francisco and the agricultural, lumbering and mining districts of +the surrounding regions. + + +4. CONCLUSION + +The expansion of the volume of the internal trade of the United States +during this epoch more than justified the expectations existing at +1830. The improvement of the facilities for communication and +transportation, permitted a continually increasing accentuation of a +territorial division of labor which fostered the growth of mutual +dependence between regions where geographic, social or other conditions +led naturally to the predominance of a special type of industry. The +manufacturing and commercial population of the Northeast was fed by the +farm products of the Central States and the inhabitants of the Central +States drew their imported supplies, their clothing, shoes and large +quantities of other manufactured goods and general merchandise from the +Eastern markets. The South relied upon the North for food, manufactures +and imports. The North in turn bought from the South raw materials for +its cotton and sugar industries, and the Northern shipping interests +carried to European markets the heavy exports of Southern cotton, the +proceeds from which paid the Southern debts in Northern States and +settled the large unfavorable balance of the Northern foreign trade. + +The multiplication of factories in the North together with the spread +of cotton culture in the South and the opening of foreign markets to +American grain brought about the demand for cereal products, which the +agricultural interests had been so anxious to create. When the market +problem was solved, the tariff duties were reduced to a revenue basis. + +In the solution of the transportation problem the people freely used +their political institutions. Nearly all the numerous canals built +after 1825 and several of the early railroads were public enterprises, +undertaken by state governments. However, the states proved unable to +cope with the problem of administering their railways and canals, and +surrendered the field of transportation to private corporations, which +were helped to carry out the work by generous and munificent gifts of +land and money from federal, state and local governments. + +Unfortunately the federal government did not attempt to establish a +satisfactory currency system. In 1837 and again in 1857 the country was +visited by a financial panic due in a large measure to extravagant +speculation, much of which would have been impossible had the issue of +money been properly regulated. + +On the whole the period from 1830 to 1860 was one of great prosperity +and contentment. The wealth of the nation grew enormously and for the +most part it was equally distributed, there being few paupers and still +fewer very rich individuals. The twenty years following 1840 have been +called the "golden age" of American history, and as far as concerns the +diffusion of material comforts they certainly deserve the name. + +Notwithstanding the great material prosperity however, the flames of +sectionalism, which had blazed forth during the contest over the +adoption of the "American System" remained unquenched even after the +question of protection had ceased to be an important political issue. +Filled with animosity engendered by the thought that the economic +progress of the North had been effected at the expense of the South, +and fearful that the fulminations of the abolitionists and the +successful efforts of the Northern political leaders to restrict the +territorial expansion of slavery only foretold an ultimate intention of +destroying that institution altogether, the Southern partisans decided +to sever the political bonds between the two sections, the economic +institutions of which differed so widely, and to establish a separate +state whose political ideals would conform to its economic and social +predilections. This decision the Southerners stood ready to enforce by +an appeal to arms; the people of the North, preferring "to accept war +rather than let the nation perish," made ready to prevent the proposed +dissolution of the Union; and the era of general happiness and comfort +ended amid the preparations for the impending struggle. + + + + +III + +1860-1900 + + +The Civil War marked a notable turning point in the economic history of +the United States. National development since 1860 has been shaped to a +large degree by fundamental political and economic changes that +occurred during the war--changes which were for the moat part the +effect of various expedients resorted to by the federal government to +bring the struggle for the preservation of the Union to a successful +issue. To crush the military strength of the South the federal +authorities adopted the expedient of the abolition of slavery, and to +the surprise of both the North and the South "the cause of the conflict +ceased before the conflict itself," and the nation emerged from the war +freed of the greatest obstacle to its social homogeneity. To secure +revenue for the prosecution of the war, the duties on imports were +raised to an unprecedented point, and when Congress failed, after the +return of peace, to reduce the tariff schedules to their former level, +manufacturing interests found themselves protected by a tariff wall so +high that foreign competition was largely eliminated. To secure needed +aid in financing the costly struggle, Congress established the national +banking system which gave greater uniformity to the currency and +brought the financial centers of the country into closer relation. The +anxiety to connect the Atlantic and Pacific coasts by rail led the +federal government to adopt the practice of granting large subsidies to +the builders of great transcontinental railway lines. The stimulation +which the war gave to manufacturing and transportation in the North and +the shrewd manipulation of the money market during the years of the +national crisis made possible the accumulation and concentration of +large quantities of capital funds under the control of a small number +of persons. + +It was inevitable that such radical changes would modify the course of +industrial progress. Because of the importance of slavery as the +underlying cause of the war, there has been a natural tendency to +regard its abolition as the most striking and significant net result of +the great conflict, but it is to be doubted whether the emancipation of +the negro had as great an effect on subsequent economic development as +the other innovations, which were so obscured by the turmoil of the war +that they received but little attention and were regarded as being of +much less significance. The complete transformation in the tariff +policy of the nation permitted the growth of manufacturing to an extent +that would have been impossible had the war not occurred; the +construction of the transcontinental railroads had an immeasurable +effect on the development of the great region west of the Missouri +river; the concentration of capital provided the means by which +industrial enterprises could be carried out on a gigantic scale; the +establishment of a uniform currency and a better banking system +accelerated the growth of industry and trade. It is in these changes +that one finds the key to much of the economic history of the United +States since the Civil War. + +The period from 1860 to 1900 was one of development and exploitation. +The years prior to the Civil War had been marked by the advance of the +political dominion of the United States to the Pacific Ocean, and at +the same time the nation had enjoyed an era of notable agricultural, +industrial and commercial prosperity, especially in the states east of +the Mississippi River. However, the tremendous possibilities of the +country were only beginning to be realized in 1860, and remarkable as +was development before that year, it was completely eclipsed by the +amazing progress made during the latter part of the century. An +abundance of unoccupied land, of rich and varied natural resources, +favorable climatic conditions, a complete absence of checks on +individual initiative and enterprise and of restrictions on internal +communication and trade, and the encouragement afforded to industry by +the liberal policies of the federal government all combined to create +economic opportunities of boundless scope. Labor, capital and +transportation facilities alone were needed and as these increased the +wealth production of the United States multiplied with astonishing +rapidity. The extension of the railway system permitted the constant +growth of agriculture and rendered accessible the mineral and forest +products in which the land abounded; cheap and plentiful raw materials +from field, mine and forest, made possible a phenomenal increase of +manufacturing. Multitudes of European immigrants, eager to share in the +wealth of the new world, poured in and recruited the labor force +necessary for the industrial conquest; and the invention and +application of labor-saving machinery of every description increased +many fold the effectiveness of the effort of each individual. All parts +of the country participated in the material progress. The South, +issuing quickly from the almost abject state of prostration in which it +was left by the ravages of a disastrous war, became more prosperous and +flourishing than ever; the Northern States east of the Mississippi +constantly increased their agricultural production, and at the same +time became one of the greatest manufacturing and mining districts in +the world; on the prairie lands west of the Mississippi a new cereal +kingdom was founded; the western plains were converted into great live +stock ranches; the forests, orchards and grain fields of the Pacific +States proved to be an even greater source of wealth than were their +mines of gold and silver. + +In the forty years following 1860 the number of people in the United +States, exclusive of outlying possessions, rose from 31,000,000 to +76,000,000, the wealth of the nation grew from $16,000,000,000 to +$89,000,000,000. These figures convey some idea of the progress of the +country as a whole. Such an advance was possible only by the most rapid +expansion of all the numerous lines of industry to which the resources +and energies of the nation were devoted. + +The growth of agriculture proceeded on a magnificent scale. Within two +decades after the war the United States assumed the leading place among +all nations of the world in the production of grain and live stock, +maintaining at the same time its supremacy as a producer and exporter +of cotton and tobacco. Countless thousands of acres of virgin soil west +of the Mississippi River were given away under the provisions of the +famous Homestead Act of 1862 and by 1880 the continent was practically +settled from one coast to the other. The area of farm lands increased +from 407,000,000 acres in 1859 to 841,000,000 acres in 1899, and the +value of farm property rose from $8,000,000,000 to $21,000,000,000. The +application of machinery to the cultivation of the soil and the +substitution of horse and steam power for manual labor multiplied the +productivity of each unit of land and labor. In 1899 the country +produced from its fields 4,500,000,000 bushels of cereals, 9,500,000 +bales of cotton, 79,000,000 tons of hay and 868,000,000 pounds of +tobacco. The value of the live stock that year was $3,000,000,000, and +the production of dairy products, poultry and eggs amounted to +$750,000,000. + +The output of the mines increased in value from $219,000,000 in 1869 to +$1,107,000,000 in 1899. Over 240,000,000 tons of coal, 27,000,000 tons +of iron ore, 270,000 tons of copper, and 63,000,000 barrels of +petroleum were taken from the earth during the latter year. + +The most significant feature of the economic history of the United +States between 1860 and 1900 was the rise of manufacturing. The radical +change in tariff policy, the rapid expansion of the home market due to +the tremendous growth of agriculture and the spread of railroads, and +the presence of an unlimited amount of cheap fuel and raw materials all +combined to make manufacturing in some respects the dominant industry +of the country. The value of the products of manufactures in 1899 +reached a total of $13,000,000,000. + +Simultaneously with the expansion of agriculture, the exploitation of +natural resources and the rise of manufacturing, partly as an effect of +them but almost equally as a cause, came the development of the great +transportation system. This was the era of the railroad. Immediately +after the war there began a period of extensive construction, over +35,000 miles of line being laid between 1865 and 1874. The first +transcontinental line was completed in 1869. Unfortunately the enormous +increase of mileage during these years was considerably in excess of +the needs of the country, and the speculative fever which attended the +expansion resulted in the panic of 1873. After a period of depression +of five years there was a second and much greater revival of +construction. Between 1878 and 1890 over 85,000 miles of new track were +laid, including four transcontinental tracks completed and others +partially finished. By 1900 there were 199,000 miles of railroad +spreading a vast net over the entire country. + +The important result of the growth and improvement of railways was the +great reduction in the cost of transportation. At the close of the +period before the war it had been demonstrated that railroads could +economically carry high grade freight such as flour, live stock, +lighter manufactured goods and general merchandise, but as yet they had +been unable to compete successfully with waterways for the +transportation of grain, and the carriage for long distances of such +low-grade freight as coal and ore had not been attempted. As the +railway developed, however, its use was extended, and it was soon found +that there was no commodity so cheap that it could not be profitably +handled. Accompanying the extension of the service to include all kinds +of bulky freight there was an uninterrupted decline in the general +level of rates on all classes of goods, resulting from the increased +efficiency of roads, the stress of competition, and above all from the +tremendous increase of traffic. The rate per ton per mile decreased +from 1.92 cents in 1867 to 0.73 of a cent in 1900. This reduction of +transportation charges was one of the most potent factors determining +the course of economic progress. Field, mine, forest and store were +linked together into a unified whole; raw materials could be +concentrated at any point and there was practically no limit to the +extent of the market for finished commodities. The increase of the +tonnage of railway freight from less than 20,000,000 tons in 1860 to +almost 600,000,000 tons in 1900 is the best index of the growth of +internal trade during this period. + +As the railways increased in importance, transportation on most of the +inland waterways declined. Nearly 1,700 miles of canals were abandoned +between 1860 and 1900. After 1880 there was a gradual decrease of +nearly all canal and river traffic. The Great Lakes were practically +the only inland waterway that retained an important position in +internal trade. The unusually favorable conditions prevailing for the +growth of traffic on these bodies of water enabled their commerce to +thrive and expand at a rate which compared favorably at all times with +the growth of railway traffic. + +Commerce has been aptly defined as "taking things from where they are +plentiful to where they are needed." This being true, the volume of +internal commerce of any country must depend upon the number of its +people, the total volume of its production, the sectional diversity of +its products, the efficiency and cheapness of its transportation, and +the freedom from foreign competition in the sale of native commodities +in home markets. In the economic progress of the United States from +1860 to 1900, there was a continuous and rapid development of all the +requisite factors for the existence of a large internal trade. +Population more than doubled, annual production per capita quadrupled, +the diversification of industry became more pronounced and the +transportation system developed to a degree that afforded the utmost +fluidity of movement of all articles of trade. Furthermore, the range +of movement of internal trade was greatly widened by the settlement of +the vast expanse of new country west of the Mississippi River. + +The extent, volume and complexity of internal trade during this period +render it impossible to attempt, within the scope of this paper, to +give a connected account of its development. However, some idea of its +wonderful expansion may be conveyed by the following brief statement of +the growth of the movement of some of the most important commodities. + +_Cereals and Flour._ The history of the internal grain trade from 1860 +to 1900 centers around the receipts and shipments at the great primary +grain markets situated on the Great Lakes and the rivers of the upper +Mississippi Valley. In 1900 the chief surplus cereal area of the United +States comprised a vast stretch of territory included in a semicircle +described by a southern and western sweep of a compass moving on a +radius extending from Duluth to Buffalo. Three-fourths of the +4,500,000,000 bushels of grain were raised in the twelve states +embraced in this territory. The ten most important markets in the +region, each of which was receiving annually from 10,000,000 to +300,000,000 bushels of grain, were Chicago, Minneapolis, +Duluth-Superior, St. Louis, Milwaukee, Toledo, Kansas City, Peoria, +Cincinnati and Detroit. From each of these points there radiated toward +the South and West a network of railways over which grain came from the +farming districts and over some of which there was a return movement of +flour and grain for domestic consumption or for exportation from Gulf +ports, while stretching to the eastward were numerous rail and water +lines by which an immense cereal and flour traffic was carried to the +manufacturing districts and exporting cities of the Atlantic coast. In +1900 the ten markets named received about 850,000,000 bushels of grain, +including flour, and shipped 650,000,000 bushels. + +_Live Stock and Meat._ The extension of railroads to the grazing lands +of the West and the tremendous increase of corn production in the +Mississippi Valley after 1860 gave a great impetus to live stock +raising. Like the trade in grain the trade in live stock centered +around a series of great cities located centrally within easy reach of +the producing sections on one side and of the consuming region on the +other. To these primary markets the railroads carried thousands of car +loads of stock--horses and mules for distribution among the farms and +cities of the East and South, cattle, hogs and sheep for slaughter at +the packing houses at the primary markets, for distribution among the +farms of the Central States to be fattened for subsequent killing, or +for shipment to the slaughter pens of Eastern cities. + +Until 1863 Cincinnati was the chief meat packing city of the country, +but in that year Chicago took the lead and has held it ever since, and +as the live stock industry shifted westward, St. Louis, Kansas City, +Milwaukee, Indianapolis, Omaha and St. Joseph in turn surpassed +Cincinnati in the business. The trade in meat was revolutionized during +this period by the introduction of the refrigerator car which made +possible the transportation of fresh meat for any distance. The total +value of the products of wholesale slaughtering and meat packing in +1900 amounted in value to $700,000,000, of which more than one-half was +produced in three cities, Chicago, Kansas City and South Omaha. In +Chicago alone 2,000,000 cattle and 22,000,000 hogs were packed. The +chief market for the numerous products of the packing establishments +was in the manufacturing districts of the East. The eastbound rail +shipments of provisions from Chicago in 1900 averaged about 20,000 tons +a week. + +_Cotton._ The geographical limits of the cotton belt had been reached +before 1860 and consequently there was no further extension, but the +cotton acreage was increased from about 13,000,000 acres to more than +30,000,000 acres during the period. Texas in 1900 had over 7,000,000 +acres of land devoted to cotton raising and seven more of the thirteen +states in the cotton belt each had an acreage of more than 1,000,000. +The chief interior cotton markets in 1898 were Houston, St. Louis, +Memphis, Augusta, Cincinnati, Atlanta, Little Rock and Shreveport. The +city of Houston, through which passed a large part of the Texas crops, +destined for export from Galveston, had the heaviest receipts amounting +to 1,800,000 bales. St. Louis and Cincinnati owed their prominence to +their position as natural gateways through which cotton passed to +Northern markets from Texas and the lower valley of the Mississippi. +Among the Southern seaports New Orleans held the lead in cotton +receipts until 1899, when Galveston took first place. Together these +two cities shipped nine-tenths of the cotton exported by the way of the +Gulf of Mexico. On the Atlantic coast Savannah held the lead in cotton +receipts. The trade of Charleston declined somewhat after 1880; Norfolk +and Wilmington, of relatively small importance before the war, became +large markets during this period, the former ranking next to Savannah +after 1880. + +The "overland movement" of cotton by rail to the North, which began in +1855, developed to large proportions after the war. This movement +represented the results of the efforts of the railroads to secure a +share of the traffic that had formerly belonged entirely to the +coasting trade. The "overland" traffic originated in all the cotton +states, most of it passing through St. Louis and the gateways on the +Ohio and Potomac rivers to North Atlantic States to be sold to Eastern +spinners or exported to Europe. In 1899 the all-rail movement of cotton +amounted to 1,370,000 bales, as compared to a coastwise movement of +2,019,153 bales. + +A noteworthy feature of the cotton trade of this period was the +increase of cotton consumption in the South. After 1885 there was a +rapid expansion of cotton manufacturing in several Southern States, and +in 1899 their mills used 1,400,000 bales of cotton, only a third less +than the number of bales consumed in Northern mills. The decline of +cotton receipts at Charleston was largely due to the growth of cotton +manufacturing in South Carolina, whose mills were consuming more than +one-half of the annual product of the state at the close of the +century. + +_Coal._ Previous to 1860 practically all the coal shipped from the +anthracite districts in Pennsylvania was transported to Philadelphia +and New York where it was consumed or carried coastwise to points along +the Atlantic seaboard. The movement to Eastern points continued to +constitute the largest part of the anthracite trade after 1860, but a +trade toward the West also sprang up. The chief route for this traffic +was by canal or rail to Buffalo, from where it was distributed among +other ports on the Great Lakes. Another important movement was to +Pittsburgh, large quantities being shipped thither for distribution +westward by rail. + +Until the early sixties the production of bituminous coat was less than +that of anthracite, but with the increase of manufacturing the +production of the former increased rapidly and by 1900 the output, +amounting to 190,000,000 tons, was nearly four times the output of +anthracite. The great fields of Pennsylvania, West Virginia, Maryland +and Ohio turned out much more than one-half of the bituminous coal +mined during this period. From these fields there were large shipments +in all directions. The Chesapeake and Ohio Canal and the southern trunk +line railroads carried a heavy tonnage to the cities on the Atlantic +seaboard; millions of tons were floated down the Ohio River; the +railroads took immense quantities westward for consumption among the +Central States, a large part of it being distributed by water from all +the lake ports on the southern shore of Lake Erie. The second great +center of bituminous coal trade was in the fields of Indiana, Illinois, +Iowa, Missouri and Kansas, whence the numerous cities of that district +drew most of their large fuel supplies. The third important center of +production, which was developed very rapidly after 1885, was the +Alabama and Tennessee field. It provided fuel for the growing +manufacturing industries of the south-eastern portion of the country +and competed for the coal trade of points on the lower Mississippi. + +_Iron Ore, Iron and Steel._ The development of the movement of iron ore +from the mines around Lake Superior to the furnaces of the Eastern +States was one of the most interesting features of the internal trade +of the United States during this entire period. This trade grew in +volume from less than 1,000,000 tons in 1870 to 18,000,000 tons in +1899, the shipments during the latter year comprising two-thirds of the +total iron ore production of the whole country. Practically the entire +traffic went by lake vessels to ports on Lake Erie and Lake Michigan +whence it was taken by rail to the blast furnaces of Pennsylvania, +Ohio, New York and Illinois. + +No other industry in the United States had a more remarkable growth +after 1860 than the iron and steel industry. The production of pig iron +in 1899 was nearly 15,000,000 tons, and of crude steel almost +11,000,000 tons. Pennsylvania contributed about one-half of the entire +output of both pig iron and steel during the forty years, Ohio ranking +second. The pig iron industry began to expand rapidly in Alabama and +Illinois in the early eighties, and by 1900 the output of these two +states constituted a fifth of the total product. The immense output of +iron and steel was distributed everywhere throughout the country. A +large part of it was used in building the railroads and the remainder +was utilized as the raw material for the manufacture of a great variety +of iron and steel products that were used in all branches of industry. + +_Lumber._ The forests of the United States were subjected to a rapid +and often wasteful exploitation during these years. Extensive building +operations, the construction and maintenance of an enormous railway +mileage and the growth of manufacturing created a heavy demand for +timber, and by 1900 the annual cut amounted to 35,000,000,000 feet. The +northeastern group of states which had formed the chief source of +lumber supply before 1860, lost precedence by 1880 to the lake states, +Michigan, Wisconsin and Minnesota. The tremendous consumption of timber +throughout the country rapidly depleted the supply in this district and +by 1900 the yellow pine of the South was being heavily drawn upon, +forming a fourth of the production of the country. The timber lands of +the Pacific coast contributed more than 2,000,000,000 feet a year after +1890, and the shipments of lumber and shingles from this region to the +interior were beginning to take on very large proportions. + +_Manufactures._ In 1859 the New England and Middle Atlantic States +produced nearly three-fourths of the total manufactured products of the +United States, and these two groups together with the Central States +reported more than 80 per cent of the product of manufactures of each +census year thereafter. In general, it may be said that the rest of the +country was dependent upon these sections for its manufactured goods. +The fact that over one-half of the product of 1899 came from five +states, New York, Pennsylvania, Illinois, Massachusetts and Ohio, +serves to designate still more clearly the chief centers of trade in +manufactured goods. Of the fifteen leading manufacturing cities in +1899, twelve were located east of the Mississippi River and two were +situated on its west bank. New York City alone produced in 1899 +one-tenth of all the manufactures of the country and Chicago and +Philadelphia together produced another tenth. The localization of many +industries within the manufacturing belt itself was an important factor +in determining the course of internal trade between the manufacturing +states and the rest of the country and among the manufacturing states +themselves, which were the largest consumers as well as the largest +producers of manufactured goods. The increase in the value of the +products of manufactures from $2,000,000,000 in 1859 to $13,000,000,000 +in 1899 gives an idea of the expansion in the trade in manufactured +commodities, the details of which it is impossible here to consider. + +There were no other articles the movements of which equalled in +importance those of the various commodities discussed above, but there +were many that contributed a tonnage of large volume and value to +internal trade. Dairy products, poultry and eggs, wool, hay, sugar, +tobacco, fruits and vegetables from the farms, petroleum, gas, copper, +stone and many other valuable mineral products, and the large annual +quantity of imports of food products, manufactures and raw materials +entering the seaports to be distributed among interior markets helped +to swell the volume of traffic that moved from place to place within +the country. + +_Conclusion._ A most interesting and significant feature of the history +of the United States during this period was the transition in the +character of the economic problems of the country. Until the time of +the Civil War its chief problems had been those of securing the means +to develop its resources, of acquiring the facilities for transporting +its products from place to place, and of providing markets in which its +products could be sold. As capital, population and transportation +facilities were provided to exploit the latent wealth of the continent +it was found that out of their presence grew far larger and more vital +problems than their absence had ever created. The economic difficulties +of the nation after the Civil War arose chiefly because of the +existence of the things which before 1860 it was a question of +acquiring. + +In no instance was this general proposition better demonstrated than in +the railroad problem. For nearly sixty years of the nineteenth century +the chief obstacle to internal trade had been the lack of the means of +transportation. To overcome this difficulty the states had first built +their own canals and railroads. Many of the state enterprises failing +because of weak administration, the states had surrendered the +management of railroads to private corporations, but the public +continued to share in railroad construction through numerous grants of +aid by federal, state and local governments. For a number of years +almost the only activity of the public in regard to railroads was to +foster and protect the interests of the railroad companies. In the +seventies the public gradually came to a realization of the fact that +the railroad companies were displaying a lamentable lack of regard for +the interests of the public. Persons and communities found themselves +entirely at the mercy of railroad corporations, which, by vicious +discriminations, built up and destroyed where they chose, and even +endeavored to control arbitrarily the economic future of entire groups +of states regardless of their natural advantages or the choice of their +people. And not only did the railroad companies themselves become a +source of danger, but they were instrumental in the creation and +development of great industrial combinations, which were equally +indifferent to the welfare of the general public. The transportation +problem of the United States was no longer that of providing +facilities, but of controlling and regulating the existing facilities +in such a manner that reasonable rates and services would be given to +the public which had entrusted the business of transportation to +private agencies. The demand for relief was first voiced in state +legislation. The states being powerless to regulate interstate trade, +the national government found it necessary to act, and, in 1887, the +Interstate Commerce Law was passed, having for its chief purpose the +prevention of unjust discrimination. As a regulative measure the law +proved inadequate, its most important provisions being emasculated by +court decisions, and the century ended with effective railway +regulation unaccomplished. + +No less pressing than the problem of regulating railroads, over which +the internal commerce of the nation was carried on, was the question of +regulating the great industrial combinations through which a large part +of the buying and selling of the products of the country was +controlled. The unfair advantages secured by large combinations because +of their abundance of capital and the discriminating favors of +railroads enabled them often to throttle competition and to establish +monopolies that were a menace to the public. This situation likewise +called forth federal legislative measures intended to prevent the +monopolization of trade. Previous to 1900, however, but little +application of the law was made. + +To the tariff and to the currency the nation owed its most bitter +political struggles after the reconstruction of the Union was +accomplished. The net result of a half dozen efforts to modify the +tariff was the existence, at the end of a century, of a tariff law in +which the general average of duties was 10 per cent higher than the +average at the close of the Civil War. The currency system of the +nation, with the exception of the improvement in banking, became worse +instead of better after the war, the chief trouble arising because of +the adoption of measures intended to satisfy insistent demands for a +greater volume of money, without making provision for its retirement +when business conditions were such as to warrant a contraction of +circulation. A quarter of a century of struggle finally ended in the +overthrow of the advocates of the unlimited issue of cheap money, but +no attempt was made before 1900 to remedy the inelasticity of the +national currency or to check the tendency toward a concentration of +the control of credit in a few financial centers. In 1873 and in 1893 +the country suffered from money panics, the latter one being due almost +entirely to unwise financial measures that had virtually bankrupted the +government and destroyed confidence in the money it issued. + +The end of the century was reached with only a little headway made in +the solution of the most vital economic problems. In striking contrast +to the "golden age" of American history, noted for the absence of both +pauperism and great riches, this period saw the development of the +extremes of poverty and wealth, and, furthermore, an ever-growing +tendency toward the concentration of the national wealth under the +control of a few powerful interests. The disregard which too many of +these interests evinced for the welfare of the general public and the +power which they possessed to thwart the efforts of the public to +protect itself created most of the great questions which confronted the +nation--questions of such serious nature as to dim the record of +achievement and material progress from 1860 to 1900. + +However there was ample evidence that the national consciousness was +beginning to take cognizance of much of the prevailing maladjustment +and was awakening to a sense of duty--long undone. A growing sense of +personal responsibility both on the part of those who suffered from +existing conditions and on the part of those who profited by them was +paving the way for a speedy application and a willing acceptance of a +system of conservative public regulation of private business in which +careful consideration would be given to the rights of all persons. In +the intelligent realization of the meaning of the existing situation +lay the basis of a dear perception of the proper steps to be taken and +a strong hope for the immediate future. + + + + + +End of the Project Gutenberg EBook of Outline of the development of the +internal commerce of the United States, by T.W. van Mettre + +*** END OF THIS PROJECT GUTENBERG EBOOK OUTLINE--INTERNAL COMMERCE--U.S. *** + +***** This file should be named 25588.txt or 25588.zip ***** +This and all associated files of various formats will be found in: + https://www.gutenberg.org/2/5/5/8/25588/ + +Produced by Frank van Drogen and the Online Distributed +Proofreading Team at https://www.pgdp.net (This book was +produced from scanned images of public domain material +from the Google Print project.) + + +Updated editions will replace the previous one--the old editions +will be renamed. + +Creating the works from public domain print editions means that no +one owns a United States copyright in these works, so the Foundation +(and you!) can copy and distribute it in the United States without +permission and without paying copyright royalties. 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