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eries of the United States by giving bounties to French fishermen and by imposing high duties on foreign fish. But the superior natural advantages possessed by the fishermen of the United States enabled them to compete for the markets of the French West Indies and obstacles placed in the way of trade with the West Indies by both France and England were often evaded just as they had been during the years preceding the Revolution. Thus the New England cod fisheries were able to survive and, though the margin of profit was small, the industry gradually expanded. Although the average tonnage of the New England cod-fishing fleet and the average number of men employed thereon during the five-year period from 1786 to 1790 were roundly 30 per cent less than during the decade preceding the Revolution, the total tonnage reached by 1790 was considerably greater than the average amount employed during the prosperous years between 1765 and 1775.
The whale fishery, however, did not regain its former prosperity during these years. England had always supplied the chief market for American whale products and had encouraged the colonial whaling industry by preferential import duties. After the Revolution, however, the English market was absolutely closed to the whale products of the United States and, unable to find a profitable market for a large quantity of whale oil and whale bone either at home or abroad, the whaling industry remained in a depressed state. In 1774 there were 300 whaling-vessels having home ports in Massachusetts; in 1789 the number was slightly more than 100.2
Congress granted bounties to the fisheries by the tariff act of July 4, 1789, and by the acts passed in 1790, 1792, and subsequently. The provisions of these laws and the alternating progress and retrogression of the fisheries after the enactment of the laws are considered in Volume II. In general, the international events of the last decade of the eighteenth century did not give the fisheries of the United States the opportunity to expand that was afforded the foreign commerce and the shipping engaged in the carrying trade of belligerent countries in and after 1793.
CONDITIONS AFFECTING AMERICAN SHIPPING.
During the colonial period, American shipping had prospered. The coasting trade and most of the commerce of America with the West Indies were handled by the colonial merchants and their ships. In the trade with Great Britain the merchants and shipping of England had the advantage of the colonists and had most of the commerce. For the commerce with southern Europe, colonial ships were mainly used. The effect of the Revolutionary War was much more severe upon American
1A History of the New England Fisheries, 366.
2Tower, A History of the American Whale Fishery, 37, 42.
than upon British shipping, and when peace was restored, in 1783, the British merchants easily retained their superior position in the commerce between the United States and Great Britain; and in the same year, when the British Government closed the British West Indies to American shipping, the merchant shipping of the United States was seriously handicapped. The Congress, under the Articles of Confederation, was without power to regulate commerce or to aid shipping, and when the stronger National Government was established our maritime interests were still in a depressed though vigorous condition. Within a few years depression changed to prosperity.
The tonnage registered in the United States for the foreign trade in 1790 amounted to 346,254 tons. The enrolled coasting tonnage was 103,775, the fishing fleet included 28,348 tons, the combined total for the entire marine being 478,377 tons. During this year American vessels arriving from foreign ports made up 58.6 per cent of the total tonnage of entrances, and foreign vessels, mainly British, accounted for 41.4 per cent. That foreign shipping had not secured a larger share of American commerce during the trying years following the Revolution is proof of the maritime strength of the United States at that time.
In addition to the untoward political and monetary conditions from which the maritime and other industries of the United States were suffering at the close of the period of government under the Articles of Confederation, there were special disadvantages under which American shipping labored in competition with British shipping:
(1) Most marine insurance was written in England, and the rates on American vessels were usually higher than on those of British build. The insurance companies considered British vessels to be stauncher than American. Probably this was not the case, although the English ship was heavier and was more costly per ton of capacity than the American. It was felt by Americans, whether rightly or wrongly, that British patriotism had some influence upon marine insurance rates.
(2) The port charges which American ships had to pay in Great Britain were higher than British ships were required to pay in the ports of the United States. At the port of London, for instance, an American vessel of 160 tons register paid entrance and clearance fees ("light" money and "Trinity House" dues) of £9 6s. 2d. more than a British ship of the same tonnage would have to pay, in tonnage taxes and entrance and clearance charges, at an American port. Likewise, pilotage charges were lower in the United States. Furthermore, with the exception of the port of London, the charges at the ports of Great Britain were higher for American than for British ships, the American vessel's "light" and "Trinity House" charges being Is. 9d. per ton greater.
(3) The restriction of the trade of the British West Indies to British ships reduced the profits of a relatively large share of American shipping. Prior to the Revolution the trade with the British and foreign West Indies had given employment to fully a third of the colonial shipping engaged in over-sea commerce. After the closing of the British West Indies to American ships, it became possible for the British merchants to dispatch their ships from England with cargo for the United States, to be exchanged there for exports to the West Indies, where a lading of sugar and other tropical products could be obtained for sale in Europe. Congress promptly sought to offset these disadvantages of American shipping by the act of July 20, 1789, which placed much heavier tonnage taxes on foreign than on American ships, and which granted a rebate of 10 per cent in the duties payable on imports when the goods were brought into the country in American ships. It was estimated by British merchants that the discriminations imposed on their ships by the act of July 20, 1789, balanced the disadvantages under which American ship-owners competed with British shipping in the ports of Great Britain.
The discriminating legislation of 1789 and subsequent years undoubtedly was of great assistance to American shipping in meeting British competition. There was a steady, though not a phenomenally rapid, gain in the tonnage of the registered marine of the United States from 1790 to 1793, and a corresponding decline in the percentage of American commerce handled in foreign ships; but the rapid rise in the deep-sea tonnage under the American flag began in 1793-94 with the outbreak of the continental wars and with the consequent large opportunity for neutral carriers upon the high seas.
(4) In general, the commercial prospects were not especially promising in 1789 and 1790. Great Britain, with which country and with whose possessions the people of the United States had the major share of their trade, was actively hostile to American shipping. No treaty defining commercial rights and privileges could be made with Great Britain until 1794, and that treaty secured to the United States only a few of the privileges desired. The larger share of the foreign commerce of the United States was subject to such conditions as the British Privy Council might decree.
THE COMMERCIAL OUTLOOK IN 1790.
In 1790 it did not seem probable to the people of Europe, especially to the leaders of British political thought, that the United States would develop a large intercourse with other countries. Its trade with Great Britain was then less than at the beginning of the Revolutionary War; the American people were devoting most of their capital and labor to agriculture and were interested mainly in foreign trade as providing a market for their surplus products of agriculture. To such writers as
Lord Sheffield, the special champion of British shipping interests, it did not seem possible that any country could build up a foreign trade upon the basis of agricultural exports. European countries, under ordinary conditions, could at that time supply themselves with food products. Their purchase of grain from foreign countries was limited mostly to the years of small crops. It is true that the evidences of decline in British agriculture were plain, but still the British people had not then thought of becoming heavy purchasers of food.
American fisheries throughout the seventeenth and eighteenth cen- \ turies had provided the basis of a large foreign trade, but Lord Sheffield and the committee of the Privy Council that reported in 1791 felt certain that the fisheries of the United States would inevitably decline. The policy of Great Britain was to restrict all British markets to the British fisheries and, as this closed the largest export market for American fish, the prospect of continued commerce upon the basis of exported fish did not seem bright.
It was argued that, if there should develop a large European market for grain, England would not draw her supply from the United States; that the British settlements to the north and south of the United States would develop rapidly upon the stable political conditions existing in those sections; and that the people of the United States would not be able to compete successfully with Canada in supplying Europe with grain and lumber. It was likewise contended that Nova Scotia and Newfoundland would supply Europe and the West Indies with fish.
Nor did Lord Sheffield and the British Government think it possible for the people of the United States to establish a large trade with China and with the Orient. It was thought that the people of the United States were still too poor to provide a large market for "Asiatic luxuries," and thus the large direct trade which subsequently came into existence between the United States and the Orient was not foreseen.
It is, of course, clear that this pessimistic view of the future development of the commerce and fisheries of the United States was due to ignorance of the real industrial and commercial strength of the country in 1790; but one had to look below the surface to see what the future had in store. American commerce, shipping, and fisheries had contended against adverse conditions for most of the time since the outbreak of the Revolutionary War. The establishment of a vigorous national government with power to regulate commerce was encouraging, but it was too early to determine whether American traders, vessel-owners, and fishermen could prevail in competition with their rivals in Great Britain. In 1790 no one could foresee that three years later a long war would begin, involving most of the countries of Europe, and that American merchants and ships would consequently be given an opportunity to make great profits as neutral traders and
THE FIRST QUARTER CENTURY, 1790 TO 1815.1
Activity in the foreign trade from 1790 to 1807, 14. Reasons for growth of export
By the time the Federal Constitution went into operation in 1789, the dullness which had characterized the foreign trade of the American Confederation during the years that ensued shortly after the conclusion of peace with Great Britain was almost overcome. A brisk foreign trade arose, the previous pessimism of the merchants and ship-owners was replaced by general optimism, and the unusual profits of trade and shipping drew into the foreign trade many who had formerly been engaged in other pursuits. Timothy Pitkin, one of the ablest of contemporary writers, recorded the surprising growth and effects of the foreign trade as follows:
"The increased demand for the agricultural productions of this country, during the period under review, raised their price to a height before unknown. This, as well as the trade in foreign productions necessarily created a demand for shipping, and agriculture, commerce and navigation, became the most lucrative employments, and almost exclusive objects of pursuit in the United States."
During the later years of the period considered in this chapter, international reprisals and embargoes, the second war with England, and the restoration of peace in Europe adversely affected the American merchant and ship-owner. The quarter century 1790 to 1815 witnessed a complete commercial cycle in which the foreign trade underwent a distinct rise and fall.
The years of growing foreign trade, which extended from 1790 to 1807, were unique in that there has never been since, in the history of the United States, a period of such length in which the foreign trade so completely absorbed the attention of a large portion of the people and exercised so vital an influence on industry in general. The wider European market for foodstuffs caused a rise in the price of agricultural crops and a flow of capital and labor to the farms. Rising profits caused a similar flow into the shipping and carrying trades, and the brisk demand for deep-sea vessels revived the prosperity of the shipbuilding industry. Little progress was made in the manufacturing industries, however, during these years of growing foreign trade. The profits in agriculture, shipping, vessel operation, and ship-building were more attractive, and the rise in exports was accompanied by a growth
1This and the succeeding chapters in this part were written by G. G. Huebner.