Clive Day

“ Insurance and speculation.—The practice of insurance has made us familiar with the means by which producers secure themselves against some of the risks of their business. A farmer can insure his growing crop against hail, a merchant can insure his stock against loss by fire, a shipowner can insure his vessel against loss at sea. For a small annual payment, which the producer can well spare, he secures himself against a loss which might prove ruinous, if it chanced to come to him. ”

“ Methods of agriculture.—Though agriculture as a source of wealth overshadowed all other industries in the colonies, it was conducted with methods which we should now consider extremely inefficient and wasteful. Washington wrote to an agricultural specialist in England: “An English farmer must have a very indifferent opinion of our American soil when he hears that an acre of it produces no more than from 8 to 10 bushels of wheat; but he must not forget that in all countries where land is cheap and labor is dear the people prefer cultivating much to cultivating well.” ”

“ Northwestern Europe has become a great factory, drawing its food supplies and raw materials from distant parts of the world, and exporting manufactured products in exchange. Beside Europe stands the continent of North America, supplying in large part the needs of its own people for manufactures, and producing a surplus for export. North America, indeed, stands in one aspect above Europe, for it has unexhausted stores of natural resources which it lavishes on other parts of the world less richly endowed. ”

“ It is safe, I think, to challenge the ordinary reader of the present day to name a machine which is not composed largely or almost wholly of iron. The whole structure of our modern industry depends on the means of getting cheap iron. “Without it the engine, the spinning-jenny, the power-loom, the gas- and water-pipe, the iron vessel, the bridge, the railway—in fact, each one of our most important works—would be impracticable from the want and cost of material.” ”

“ On the other hand, there are periods in which commercial competition is so intense that it puts a strain on international relations, tempting one or another party in the struggle to further the interests of its people by threats of force or by force itself. The economic strain is particularly likely to lead to rupture if the political system of the period is faulty, if international politics provide no effective way for the just settlement of differences, and if national politics fail to represent the interests of the people as a whole but sacrifice these to the selfish interests of a group. ”

“ The regulation prescribing a minimum breadth for cloth would have killed an industry in one part of France that wove strips for flags, an industry in another part that could sell cloth cheaper by weaving so narrow a breadth that one man could tend the loom. ”

“ The Americans have recently taken the place of leaders among the machine builders of the world, and no country, however high it may have ranked in the past, can afford now to neglect the contributions offered by American machinists. The cheapness of raw materials, iron and steel, has aided the recent development of the American machine industry, but has not caused it. We must look further, to the ingenuity of inventors encouraged by a liberal patent system, and to the genius of business leaders who have known how to make use of the contributions of technical science to industrial efficiency. ”

“ The gain in regularity shows itself notably in institutions like the market, the fair, and the exchange. The old system of market-days, under which country people came to town on stated days to display their wares and enable housewives to lay in a supply of provisions, has given place to a steady flow of products through city shops and market halls to the consumers. Fairs have lost their significance in modern countries, because the volume of trade is now so great, and the instruments of trade are so highly developed, that commerce has developed into one permanent fair. ”

“ The organization is wonderfully efficient in normal times, but it is unsteady. It passes, at intervals, through periods of feverish activity, culminating in a crisis and followed by dull stagnation. A curve showing the course of the world’s trade during the century would not present a steady rise, but a series of waves, with distinctly marked crest and trough. There is a waste of labor and capital in all periods of a crisis. In the good times men strain themselves to build railroads where they are not needed, or to make machines for which there is no profitable use. ”

“ The food and clothing and tools and other desirable articles which they produce are valuable only when they are put into the hands of a man who wants them and can use them. Articles which we all should pronounce desirable, the ripe fruit of the farmer and the finished product of the manufacturer, have still only the possibility of good in them; and this possibility is realized only when they are put in the place where they are wanted at the time when they are wanted. It is the business of the merchant to attend to the proper distribution of wares, in place and time. ”

“ The manufacturers of protected nations, themselves, secure from England’s competition, market their surplus output in England at prices which may not cover the costs, much less the profits, of production. It is cheaper to do this than to break prices in the protected market at home; it kills the English industries and enables foreign manufacturers in the long run to raise prices to a profitable level in the English market. ”

“ In the great conflict there was but one country, with an extensive merchant marine, which managed to maintain neutrality, and this was the United States. The carrying trade of the world fell into our hands. The countries of Europe, forced by the exigencies of war, gave up the cherished principles of their colonial policy, and threw open the trade with their colonies and themselves. The rights of neutral states in time of war were, it is true, still unsettled. American ship captains and merchants were subject to arbitrary and humiliating interference on the part of the belligerents. ”

“ Emigration was not so much a government policy as a popular movement, that attracted some of the best stock of English blood. There were great differences between the people of the different colonies on the Atlantic coast, as every student of American history knows, and there was again a difference between the colonies in the South and those on the islands. But in general it may be said that no European country could vie with England in the commercial quality of its colonial population. Certainly none could rival England in the quantity of colonists of European stock. ”

“ It seems as if the people of the country, after the close of the war of 1812, had turned their gaze away from Europe, the continent which they had for centuries regarded as the source of civilization, and had fixed their attention on their own continent, with the determination to make its resources satisfy their needs, so far as they were able. Many of the settlers in the western country led lives of extreme simplicity, unable to find a market for the surplus which the fertile soil returned to them, and consequently forced to restrict their purchases of foreign goods to the bare minimum. ”

“ In the towns, however, practically all the population were free; the artisans were numerous and intelligent enough to provide for their own protection, and did not need to subject themselves to a lord. The towns were islands of freedom in a sea of serfdom or of half-freedom. The custom established itself that a serf who could escape from his lord, and who lived a year and a day within the walls of a town, became a free man, and could not be reduced to his former position. ”

“ England fought France consistently, not because of old traditions of enmity, but because France was a commercial rival, refusing English manufactures and attempting to market her own in England, and because France had possessions in America and India that England desired. England allied herself with Portugal, on the other hand, because the trade of the two countries was complementary rather than competitive. ”

“ Another American economist, Wells, said about 1890, “When the historian of the future writes the history of the nineteenth century he will doubtless assign to the period embraced by the life of the generation terminating in 1885 a place of importance, considered in its relations to the interests of humanity, second to but very few, and perhaps to none, of the many similar epochs in time in any of the centuries that have preceded it.” Is the generation terminated in 1915 willing to admit that it takes a less important place in history than its predecessor? ”

“ Since the adoption of the free-trade policy the English people has been freed from dependence on the home supply of food and has supplied its necessities by purchases abroad. Among the imports, therefore, we find that the largest item is that of foodstuffs, which has grown rapidly both in its absolute value and in its proportion of the total imports. In contrast with the medieval period, when only luxuries like wines and spices could pay for their transportation, we find now the great food staples flowing to England from countries thousands of miles distant. ”

“ He was fortunate if he could estimate with some accuracy the expense of transportation; he was almost helpless in estimating the time that would be consumed. So dependent were men on wind and weather, heat and cold, war and peace, and all the manifold conditions of nature and man, that loss was frequent and delay was constant. The element of chance, great by nature, was heightened by man; carriers were emboldened to make the most of their opportunities and to extort from the merchant all that the difficulties of his position might force him to pay. ”

“ Spain.—Spain, with an area much larger than that of Italy, and with a population more than half as large, had in 1912 a commerce less than half that of the Italian. The fault lay not with the country, which in mineral resources is perhaps the richest in Europe, and which under the skilful agriculture of the Moors was made to bloom like a garden, but with the people who have neglected or misused their opportunities. Spain furnishes a striking example of the evil that bad politics can work in economic development. ”

“ At the centers of business the great merchants, in touch, by the post and telegraph, with both consumers and producers, study to apportion the supply so that it will reach those who stand most in need of it, and seek to regulate future production so that there may be neither waste nor want when the product is brought to market. ”

“ We shall consider three groups of topics: the reform of the general tariff; the repeal of the corn laws, protecting agricultural products, especially wheat; and the repeal of the navigation laws, protecting shipping.
England entered the nineteenth century with a cumbrous mass of tariff regulations inherited from the past, from which only the worst excesses had been pruned by statesmen like Walpole and Pitt. Customs laws had accumulated for 500 years to the amount of 1,500 statutes, “often confused, often contradictory, sometimes unintelligible.” ”

“ A fair is the same kind of institution as a market, and grew up for similar reasons, but it represented a further step of development, for it attracted buyers and sellers from a far greater area, and served the needs of wholesale as well as retail trade. The fair is, of course, much less advanced than the modern exchanges (stock and produce) , from the fact that it was intermittent instead of being continuous, as well as for other reasons; but in the Middle Ages it was the means by which commerce grew strong, and the prosperity of commerce could be measured by the prosperity of fairs. ”

“ The Phœnicians.—In the Oriental states which we have hitherto considered, commerce never grew to a position of decisive importance in the national life, however great it may seem when we compare it with its meager beginnings. It served mainly the needs of luxury, and left untouched the economic position of the mass of the people. If we seek in the ancient Orient a people whose very existence depended on trade we must look further. ”

“ The countries which gained new markets for their agricultural products, and flourished during the period of development of steam transportation in Europe, have lost their foreign markets and find their home markets menaced, as the transportation system has grown to embrace other continents and now brings cheap products from across the seas to the door of the European consumer. Countries which willingly accepted the manufactures of advanced industrial states when their own industries were in a primitive stage of development have since aspired to establish modern factories of their own at home. ”

“ It was about this time that wheat won the first place among the exports away from flax and its products. Commerce by way of the Black Sea increased very rapidly, while the Baltic did not keep its proportional share in the commerce of the country, and the proportion of trade finding its outlet by the Arctic Ocean had sunk to insignificance. Commerce with the west of Europe across the land frontier, which formerly had been restricted by the difficulty of transportation, grew even faster than the Black Sea commerce, and gave an entirely new importance to trade relations with neighboring states. ”