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When, in 1806, England extended her paper blockade so as to include all the European ports from the Elbe to Brest, Napoleon issued his famous Berlin decree declaring English ports in a state of blockade. England counterstroked in 1807 with the Orders in Council declaring a blockade against the ports of France and all her allies and forbidding neutral vessels to trade there except after calling at a British port, paying duties, and obtaining an English permit; and in answer to this the Milan decree of Napoleon made all vessels which traded in England and which recognized the British decrees subject to seizure by French men-of-war. It became the avowed purpose of Napoleon to bring England to terms by absolutely destroying her commerce, and to make this policy effective he refused to recognize the neutrality of any commercial power. From the Orders in Council of 1807 until the war of 1812, England seized 389 American ships; and from the Berlin and Milan decrees until 1812, 352 were seized by France, 70 by the Danes, and 47 by the Neapolitans.
Congress, on the advice of the President, sought a peaceful remedy, but the nature of the measures taken was such that the foreign trade continued to recede from its maximum of 1807. The first means of retaliation was a non-intercourse act which was never effective. This was followed on December 22, 1807, by an embargo on all ships in American ports, and the embargo was enforced by the American Navy. Imports fell from a value of $138,500,000 in 1807 to $56,990,000 in 1808; and exports fell from $108,343,000 to $22,430,000. So universal was the discontent which prevailed among American commercial interests that after a life of but fourteen months the embargo was replaced by a non-intercourse act applicable only to the trade with Great Britain and France. There was a slight recovery of trade, but, attacked by foreign enemies and hampered by non-intercourse restrictions, it remained in a depressed condition. War with England finally broke out in 1812, and the foreign trade continued to decline, until in 1814 it all but ceased. (See table 44.)
England had interfered with American trade by her Orders in Council, enforced by seizure and condemnation of vessels and cargoes; she had virtually blockaded American ports with her men-of-war; had impressed American seamen; and had apparently incited uprisings among the Western Indians. France and the allies of France had also attacked American commerce, but the grievances against England seemed the greater. The American people were willing to face a temporary suspension of trade in order to insure permanent future improvement. The desired effects of the war with England were not noticeable until the next commercial era, and there was no trade recovery until after December 24, 1814, when the envoys of both nations signed the Treaty of Ghent. Peace had meanwhile returned to Europe, thereby removing most of the reasons which had induced the United States to declare war on England and causing the commerce of the world to return once more to the channels in which it had flowed prior to 1793.
THE FOREIGN TRADE FROM THE TREATY OF GHENT TO THE CIVIL WAR.
The abnormal advance from 1815 to 1818, 31. Causes for the enlarged exports, 33.
The forty-five years from the close of the second war with England to the outbreak of the Civil War were for the foreign trade of the United States a period of transition. The industries of the country were seeking a solid basis, its transportation problems were being solved, its commercial policy was being shaped. Meanwhile the foreign trade experienced great fluctuations. There were years of advance and recession, of buoyancy and dullness, but each advance reached a higher level than had previously been attained, and each depression was less severe than those preceding. The country was in every way becoming larger and its trade, domestic as well as foreign, rested on a gradually widening base. The export trade for the period 1836-1846, for instance, was relatively dull, but its lowest figure ($84,346,000 in 1843) was not far below those for the years 1816 to 1818, when trade was active. An export trade of $93,281,000, regarded as abnormally large in 1818, would, thirty-five years later, have been evidence of commercial stagnation, for in 1853 the shipments to foreign markets aggregated but little less than $203,500,000.
The foreign trade from 1815 to 1860, taken as a whole, may be conveniently divided into the following periods, alternately of advance and reaction: (1) the abnormal advance from 1815 to 1818; (2) twelve years of trade recession (1819 to 1830); (3) six years of improvement (1831 to 1836); (4) a decade of irregular foreign trade (1837 to 1846); and (5) fourteen years of growth and expansion (1847 to 1860).
THE ABNORMAL ADVANCE FROM 1815 TO 1818.
The conflict with England, which began in 1812, had not proceeded far when the statesmen of both countries saw that it must soon run its course, inasmuch as the conditions which had led to the declaration of war had ceased to exist. Since the conflict between England and her European enemies had ended, there was no further need to question the neutrality rights of the United States, to seize and condemn American vessels and cargoes, to blockade American harbors with men-of
war, nor to impress American seamen. The conclusion of the European wars, moreover, made it difficult for the United States to obtain all that was originally requested by the American peace envoys. Though at first insisting upon definite stipulations concerning the right of impressment, President Madison finally instructed the American negotiators that "on mature consideration it has been decided, that [in view of] all circumstances above alluded to, incident to a prosecution of the war, you may omit any stipulation on the subject of impressment, if found necessary to terminate it."
TABLE 46.-Value of exports and imports of the United States, 1815 to 1818.
The Treaty of Ghent contained no great commercial guarantees, either as regards impressment or otherwise. But though resulting in no definite treaty stipulations with respect to the important questions over which the conflict had been waged, the war nevertheless had certain permanent effects of extreme political and economic significance. First of all, it showed to the rest of the world that the United States was not only determined to insist upon her international rights, but was able to protect them. Secondly, the fact that for three years the country was shut off from the outside world and thrown upon its own resources worked a profound change in the character of domestic industry and trade, and at the same time brought the people to a sudden realization of the weakness of their former economic conditions. Internal (domestic) trade between the North and South, the East and West, became necessary in order that the people might live, and the lack of internal transportation facilities was impressed upon the public mind; while for the first time the extensive establishment of manufacturing industries became both requisite and, with foreign competition gone, readily possible. The war afforded as complete protection to the infant industries of the country as did the high protective tariffs of later years. Though the ultimate effects of the war with England were its wholesome influence upon the opinion of the European powers concerning the United States and its stimulus to American manufactures, the immediate effect of its termination was a temporary rise in the export and import trade.
From less than $7,000,000 in 1814, the volume of American exports rose to over $52,500,000 in 1815 and to $93,281,000 in 1818. The
'See Pitkin, A Statistical View of the United States of America, 406. 2See vol. I, chap. xiii.
total volume of exports was less than during some of the years prior to the war, but the value of domestic exports, as distinct from the reexports of foreign products, rose to a higher level than had ever before been attained, their highest previous point having been $48,700,000 in 1807. The return of peace to Europe effectively destroyed the remarkable reexport trade which had enriched American merchants during the Napoleonic conflicts. European trade returned to its usual channels-it again became largely a direct trade between producing and consuming countries and was conducted mainly in European vessels.
The unusual activity in the exportation of domestic commodities, which began shortly after peace was declared, was due to various circumstances:
(1) It was largely due to the sudden sale of accumulated commodities. Shipments to foreign markets during the war with England had been infrequent, although production had continued. Great stores of surplus cotton, flour, grain, tobacco, rice, provisions, and lumber, the products of two harvests, had remained unmarketed. For months prior to the declaration of peace, the large ports of New York, Boston, Philadelphia, Baltimore, New Orleans, Savannah, and Charleston were the scenes of active preparation for the resumption of foreign trade and shipping. Vessels were repaired and loaded, and wharves were crowded with cargoes awaiting the opportunity to be shipped to Europe and the West Indies.
(2) Since England and the Continent had been largely deprived of American products during the war, there was clamor abroad for a resumption of trade. The cotton mills of England had suffered from a lack of raw cotton, and for a short time they afforded an abnormally large market for the American staple.
(3) It became manifest that the war had scarcely touched the resources of the country, but that it had revealed the economic possibilities of America. There was energetic activity in agriculture and domestic trade, and the return of peace was the beginning of a period of prosperity in all lines of business except in the manufacturing industries that had been established during the war. Unfortunately, however, men set themselves too rapid a pace and the excessive activity soon resulted in commercial and industrial disaster.
In those days news traveled slowly, and even after the war was officially ended the long-idle merchant ships were forced to wait until the vessel carrying the messages announcing the signing of the treaty made the voyage across the Atlantic. But as soon as it became known that peace had been declared and that the European, West Indian, and British trade could be resumed, every available American vessel cleared port. Domestic exports to England during 1818, when this trade was at its height, reached a value of nearly $31,000,000, and those to France $8,700,000. Indeed, the shipments of domestic commodities to Eng
land and France were chiefly responsible for the unusual revival of the export trade. Germany, Holland, Spain, the West Indies, Portugal, South America, the East Indies, and China took greater quantities of American goods than during the war of 1812, but less than they had taken during the years 1793 to 1807.1
It was mainly the agricultural products, which had been piled up at the ports during the war, that now found a market abroad. An aggregate of $62,897,000 in value of farm products, chiefly cotton, flour and wheat, tobacco, rice, provisions, and Indian corn, were exported in 1818. One-half of the total ($31,334,000) consisted of cotton, which had far outstripped flour and wheat ($12,463,000) as an article of export. Exports of forest products were valued at nearly $5,700,000 in 1818 and at nearly $7,300,000 in 1816. Sea products valued at $2,187,000 and manufactures valued at $4,439,000 were shipped abroad in 1818.
The nature of the domestic exports and the decline of foreign reexports caused striking changes in the relative positions in the export trade of the various States and seaports. New York still led, but its exports, foreign as well as domestic, were less than they had been during the European wars. All other North Atlantic States were now exceeded by Louisiana. Massachusetts was third, but only 37 per cent of the exports from Boston consisted of domestic products. Cotton exports placed South Carolina and Georgia respectively fourth and fifth, and then followed Pennsylvania, Maryland, and Virginia. The shipment of foreign goods reexported centered at the North Atlantic ports, while the rise of cotton exports and the partial occupation of the Mississippi Valley gave a surprising impetus to the shipment of domestic exports from New Orleans, Charleston, and Savannah. The exports in 1818, as compiled by Pitkin, are shown in table 47.
Coincident with the sudden rise in the exports of domestic products, - there was an inrush of imports from England, and to a less extent from the Continent, India, and the West Indies. The value of all imported commodities soared from less than $13,000,000 in 1814 to $113,041,000 in 1815, $147,103,000 in 1816, and $121,750,000 in 1818. The value of
1Evans, Domestic Exports, 1789-1883, pp. 78-95.