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TABLE 62.-Shipments of merchandise between the United States and non-contiguous territories, 1889 to 1913. Continued.

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Domestic merchandise. . . $10,000,000 $10,000,000 $10,699,000
Foreign merchandise.
10,000,000 10,000,000 10,802,000

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'Compiled from Reports of U. S. Department of Commerce. Statistics differ slightly from those contained in reports of War Department and Navy Department.

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Trading companies prior to 1664, 117. The merchant carrier, 117. The common
carrier on the ocean, 118. Charter and line services, 119. Steamship lines:
organization, consolidations, conferences, 121. International express service, 124.
International mail services and payments, 126. Cable and wireless telegraphy,127.
International trade organization, 128. Financing international trade, 130. Marine
insurance, 132. Export trade developed by “trusts," 134.

That a growth in the foreign commerce of the United States from a value of $43,000,000 in 1789, when the Federal Government was established, to $4,278,000,000 in the fiscal year of 1913 should have occasioned great changes in trade organization is not surprising. The growth in the volume of shipping, each extension of the range of foreign markets and of the sources from which imports were gathered, each addition to the variety of wares exported and imported, and each widening of the base of international trade increased the complexity of the shipping, marketing, and financial organization which was gradually developed for the safe and effective conduct of foreign com


Some parts of the foreign trade organization are similar to the organization which was evolved to conduct the vast domestic commerce of the country, and therefore need not be fully discussed at this point. The place of the railroads, of the domestic water routes, express companies, and domestic telegraph lines, of banks and credit agencies, of produce exchanges, of the domestic postal service, and of corporations, in the machinery of commerce is described in Volume I, Chapter XVII of this work. It is intended to trace here the development of those phases of trade organization which are distinctively or primarily concerned with foreign commerce.

It is at the great seaports that the commodities entering the foreign trade are concentrated-the exports, for distribution throughout the markets of the world, and the imports, for distribution among the interior markets of the United States. The ports are served by a network of railroads and inland waterways, which connect them with the grain fields, cotton and tobacco plantations, live-stock ranches, factories, mills, mines, and forests, and with the numerous inland markets, where many of the wares brought from abroad are consumed. They are also served by deep-sea vessels of many types and flags. The development of the railroads and inland waterways concerned domestic commerce even more than it did the commerce between the United States and foreign countries, but the services rendered by ocean carriers have been primarily in the foreign trade.

In the early stages of American commerce, the ocean carrier was the individual merchant who occasionally carried freight for his neighbors, but whose chief purpose was to convey his own wares to over-sea countries to exchange them for valuable cargoes of foreign wares and precious metals. The possibilities disclosed by the efforts of these pioneer traders soon led to the organization of large trading-companies such as the British and Dutch West India, London, Plymouth, Massachusetts Bay, and New Amsterdam companies.

These companies were colonization and land companies, but their principal object in many cases was to carry on trade. The charters which they obtained from their home governments frequently gave them the exclusive privilege of trading in certain defined ports of America. But the monopolistic trading rights which they enjoyed came to an end long before the American colonies became a nation. After the Dutch lost control of New Amsterdam, in 1664, the famous trading companies had little part in the trade of the thirteen colonies.


The colonial over-sea trade was, after 1664, conducted almost entirely in vessels which were owned by individual merchants or producers and which were operated in connection with their trading business. Such a trade organization, in which ocean transportation was merely incidental to the trading activities of merchants, or in some cases of producers, required relatively large investments of capital and tended to confine the ocean carrying trade to merchants or producers who had extensive funds at their command. Gradually, each trade district had its wealthy "merchant princes," who owned large fleets of ships in which they carried occasional cargoes for others, but which they utilized chiefly in their own trading enterprises. The names of Winthrop, Endicott, Derby, Peabody, Gray, Abraham Pech, and Stephen Girard became famous as merchant-shippers. There were also merchants whose trading sphere was less extensive, but who nevertheless had sufficient capital to own and operate one or more vessels. Some, too, were owned by producers, notably by the tobacco planters of Virginia; and in some cases trading-vessels were jointly owned and operated by several merchants or producers, who realized they could not well conduct an over-sea trade unless they operated a vessel in connection with their mercantile business.

The services of the American merchant-carriers became especially important during the last half decade prior to the Revolutionary War, and subsequently until the outbreak of the War of 1812. During both of the wars with Great Britain many of their fastest vessels acted as privateers, and during the Napoleonic Wars in Europe they acted as the ocean carriers, not only of the United States, but of England and most West European countries as well. The rise of the Oriental trade

during the period of the Confederation, the revival of foreign trade generally after the Federal Constitution was adopted, and the blockade of European and British ports during the European wars created a situation in which the American merchant carriers reached the climax of their prosperity. In view of the limited volume of the foreign trade, the small tonnage of the vessels then in use, the uncharted condition of the seas, and the uncertainty of the outcome of trading ventures in little-known parts of the world, the wide range of markets frequented by these merchant traders was astounding. In addition to trading in the customary ports of Great Britain, Europe, and the West Indies, they dispatched their vessels to many distant regions-to the East Indies and British India, to China, Japan, and the Philippines, to the Cape of Good Hope and many ports of Africa, to South America, to the Oregon Country, Alaska, and the Hawaiian Islands, to Arabia and Russia.

The organization needed to conduct the trade of the merchant carriers was simple and to a high degree personal. In many instances the master of the vessel was its owner, and often the vessel, though sailed by a hired captain, was accompanied by the owner, who took charge of the trading which he had in mind. The great merchant princes who operated fleets of vessels placed their ships and wares in complete charge of trusted captains, who were skilled traders as well as navigators. A vessel would leave port with quantities of specie, precious metals, and a wide variety of miscellaneous merchandise, and after many months it would return with a cargo of spices, silks, chinaware, or other valuable commodities which would be disposed of at a great profit. In order to make sure that careful attention would be given to trading operations, the merchants usually permitted the master and crew to carry a certain amount of freight on their own account. Sometimes the vessels failed to return; in the little-known seas to which the small ships ventured danger was always lurking. The risks assumed by the merchant-carriers and their vessels were large, as were also the losses and profits resulting from the enterprises which they undertook.


The War of 1812 marked a turning-point in the organization of the ocean-carrying service. During the expansion of foreign trade which followed the restoration of peace in Europe and America, the merchantcarrier of ocean freight was supplanted by the public carrier, whose function was solely the work of transportation. However, the transition from one type of carrier to the other was not abrupt.1 The merchant-shippers had frequently accepted cargoes from others in addition to those which they carried for themselves, they had often carried the foreign mails, and they had given passage to the relatively

1Smith, The Ocean Carrier, 94.

few passengers who desired to travel in those days. Toward the end of the eighteenth century, ship-owners frequently advertised that their vessels would leave for stated destinations and that arrangements for carrying freight and passengers could be made with the masters. Soon permanent vessel agents were stationed at some of the large ports to book cargoes. Gradually, also, the practice of hiring or chartering ocean vessels became more common. As the demand for public carriers became more widespread an increasing number of such vessels made their appearance.

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Numerous causes were instrumental in bringing about the transition. As the base of the foreign trade and its volume expanded many new shippers besides the long-established merchant-shippers of the Atlantic seaboard desired to enter the foreign trade. Some of them knew nothing of ocean navigation, and most of them felt little inclined to invest in sailing-vessels a portion of the funds which were needed in their business. The flow of trade, moreover, became more regular, the risk of loss from sailing uncharted seas and trading in unknown lands and the probability of attacks by pirates and of seizure by foreign men-of-war were diminished, and the margin of profits in the carrying trade as a whole became more certain, while profits resulting from individual voyages no longer attained the proportions which they formerly did. These changes made it possible for vessels to be profitably operated as public carriers, and at the same time removed some of the principal reasons which had induced large merchants to own and operate private vessels. The lack of regular means of transporting the foreign mails, which had long been a source of inconvenience and delay, was another factor leading to the use of public carriers, especially of regular lines. The growing demand for passenger accommodations opened a new field to ocean carriers which could scarcely be entered by private vessels built and operated in the interests of merchants who sold and bought wares wherever they believed the market to be the most favorable. Moreover, the gradual increase in the tonnage of ocean carriers, with resulting increase in their cost, made it difficult for merchants to own vessels.


Two types of public carriers emerged: (1) the "tramp" or chartered vessel, and (2) the regular ocean line. The line of demarcation between the services of these two types can not always be readily drawn, because vessels are frequently chartered by navigation companies to be operated in the line service. Ordinarily, however, a 'tramp" is an individual ship which is chartered to shippers, either for a trip or for a stated period of time, is operated on no definite schedule and no regular route, while an ocean line comprises a number of vessels

'Smith, The Ocean Carrier, 94; also Johnson, Ocean and Inland Water Transportation, 129–130.

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