imported products retained for consumption likewise reached a maximum of nearly $130,000,000 in 1816, and in 1818 was officially stated as $102,323,000. (See table 46.) As compared with the export trade, the growth in imports was much larger. In 1816, when the influx of foreign goods was at its height, they exceeded the previous maximum annual value of imports by $11,000,000 and were double the total exports of domestic commodities.

The reasons for the sudden increase of imports were much like those which caused the great expansion of domestic exports:

During the war, the merchants and manufacturers of England and Europe piled up cargoes of unmarketed goods, awaiting the resumption of the American trade. The merchants of England, in particular, were eager for the reopening of the American markets, because after the close of the European wars heavy restrictions were placed upon the importation of British goods into the continental countries.

For a time American merchants and consumers, even though domestic manufactures of many kinds were available, welcomed the arrival of foreign goods.

It was decidedly to the advantage of British manufacturers to crush the numerous manufacturing industries which had arisen in the United States during the war of 1812. As stated at the time by a member of Parliament, "it was well worth while to incur a loss upon the first exportation, in order by the glut, to stifle in the cradle, those rising manufactures in the United States, which the war had forced into existence, contrary to the natural course of things."

The British manufactures, which comprised the bulk of the imports, soon glutted the American market, to the serious detriment of the many industries which had not as yet been so firmly established as to withstand sharp competition. Before long, prices fell so low that from the eastern seaports to Cincinnati, Pittsburgh, and Nashville in the West, men were thrown out of work by the closing of factories.1 Cotton, woolen, silk, flax, iron, lead, tin, brass, and copper manufactures, glass and earthen ware, haberdashery, hats, and other English goods were sold at low prices in auction sales; cheap India cottons came in large bulks; silks, cotton goods, wine, and brandy came from southern Europe and France; woolen, linen, iron, lead, and glass manufactures, spirits, cheese, and paints from northern Europe; sugar, rum and molasses from the West Indies.

The very magnitude of the import trade led to the adoption of measures to check it, i. e., to the first concerted move for protection. The manufacturers of the Middle Atlantic and Central States were joined by the sugar and cotton interests of the South and the farmers of the West in a movement to curb the rising tide of importations by imposing a system of high duties on foreign products. The merchants and ship

'Fearson, Sketch of America, 417.

owners of New England, fearing its effect upon their foreign trade and shipping, opposed protection, but a tariff law was enacted in 1816, extending moderate protection to the cotton, woolen, and iron industries. The only effective provisions of this act were those against the low-priced India cottons, which were given a minimum valuation of 25 cents and were consequently obliged to pay an import duty two or three times that imposed by the former tariff laws. Aside from these provisions, the general rates were so low, and were so frequently circumvented by means of false sales and invoices,' that British manufactures continued to glut the American market. Even when a new tariff law was enacted in 1818 there was no effective protection. The continued influx of foreign goods, however, greatly strengthened the cause of protection.

Meanwhile, Congress was breaking down the old policy of protection to shipping which had been in force since 1789. By an act of 1815, the President was authorized to apply the policy of shipping reciprocity to the direct trade with any country granting equal privileges to American ships and cargoes. In July of that year a commercial treaty with England was concluded and the provisions of the treaty of 1794 regarding trade with British India were readopted. It was agreed that in the direct trade between Great Britain and the United States neither country should levy discriminating duties against the ships or commodities of the other, but that the West India trade might be regulated as either nation desired. The first of these provisions greatly injured the position in the carrying trade previously enjoyed by American vessels in the heavy direct trade with England, and the other provision was so interpreted as to cripple the American shipping and export trade with the British West Indies. Shipments of American flour, provisions, corn, rice, lumber, and live-stock to those islands were limited, and American vessels were debarred. English vessels secured the profits of a lucrative triangular trade in which they brought cargoes of English wares to the United States, carried thence American flour or lumber to the British West Indies, and then took cargoes of West India sugar, rum, and molasses back to the United States to exchange for American cotton, or proceeded to England with their cargoes from the West Indies.

The growth of both the import and export trade was abnormal and led to a commercial reaction. Even had there been no other disturbing influence, it is probable that the panic which began in October 1818 would have occurred; for in those days the dependence of the country upon foreign trade was far greater than it was after its own manufacturing industries, together with a large domestic market, had been developed. But other disturbing influences were effective. As the great excess of imports over exports was constantly draining specie out

'McMaster, History of the People of the U. S., IV, 341.

of the United States, large amounts of paper money were issued to replace it, and with the depreciation of this paper currency and the consequent inflation of prices, still more specie was driven out of the country. When in 1817 the evils of unwise paper issues became manifest, there was a reversal of policy, whereby the bank circulation was suddenly restricted to much smaller limits. However, the sudden contraction only disturbed matters still more. There was, moreover, a speculative mania which led to over-extension in all lines of business, except in the recently established manufacturing industries, which were ruined by the flood of foreign products. Finally, in the latter months of the year 1818, when the reaction came in foreign trade, a general business, banking, and currency panic ensued, and the active foreign commerce of the previous three years came to a sudden end.

TWELVE YEARS OF TRADE RECESSION, 1819 TO 1830.

A sharp decline in the foreign trade accompanied the panic of 1818-19, the effects of which lasted for a long time. Imports dropped from a value of $121,750,000 in 1818 to $87,125,000 in the following year, and exports of domestic products fell from $73,854,000 to $50,977,000 during the trade year. It was the beginning of twelve years of dull foreign commerce. In 1830 the imports were valued at less than $71,000,000, the exports of domestic goods at $59,462,000, and the total export trade at $73,849,000. The reexport trade continued the downward tendency which began with the close of the European wars, so that the total export trade in 1830 had a smaller value than the domestic products which had been shipped abroad in 1818. The decline in value was partly due to the lower level of prices; but except in the cotton exports there was also a decrease in the volume of the foreign trade.

Dullness was especially pronounced in the import trade. While in 1815 the value of imports had exceeded the value of exports by $60,000,000, the excess was now a small item; indeed, during four of the twelve years the exports were in excess of the imports. There was a slight increase in the imports received from Spain, Norway, and Sweden, the Hanse Towns, Manila, China, Brazil, and the Argentine, but France alone, of the commercial countries which shipped large quantities of foreign goods to America, continued to increase the volume of her shipments. The imports received from England, Holland, the West Indies, Russia, Portugal, and British India fell off; and those from the Dutch East Indies remained about stationary.

The import trade of every large Atlantic port except New York was depressed. The quantity of goods received at New York increased after 1825, when the Erie Canal provided a direct connection between that port and the Central West; but the improvement at New York did not end the general stagnation of the import trade of the country as a

whole. It merely shifted a still larger share of the trade to New York, increasing the dullness at Philadelphia, Boston, Baltimore, Charleston, and Savannah. The import trade at New Orleans and Mobile gradually increased, for those ports served a large new country which was without adequate eastern transportation connections. But the imports received at the Gulf ports were small as compared with the exports handled by them and small as compared with the imports received at New York, Boston, and Philadelphia. The decrease in trade occurred with respect to practically all the important articles imported woolen and cotton goods, linen and silks, spirits, tea, lead, sugar, and molasses. There were but few imports which were not seriously retarded. In manufactures there was an increase in iron imports; wines, fruits, spices, and coffee were also more largely imported; and a few raw materials for the manufacturing industries, chiefly tropical cabinet woods, indigo, hides and skins, copper, tin, and brass were bought in slightly larger quantities.

TABLE 48.-Value of exports and imports of the United States, 1819 to 1830.1

While the export trade in American commodities did not increase much during the years 1819 to 1830 and remained below the high level of 1818, it is significant that it consistently remained at a higher level than it had occupied prior to the war of 1812. Domestic exports to the East Indies, the Swedish and Danish West Indies, Cuba, and Spain continued as they had before the panic; those to France, Canada, Norway and Sweden, Italy, and Brazil increased slightly. The export trade suffered chiefly in England and the British West Indies. Shipments to the British West Indies almost ceased, and those to the Dutch, French, and Spanish West Indies (except Cuba), Holland, Russia, the Hanse Towns, Portugal, and China were far less than they had been either before or immediately after the conflict with England.

The dullness affected most of the great articles of export-flour and wheat, corn, tobacco, fish, lumber, naval stores, and provisions. There were but two important exceptions, cotton and manufactures. Cotton culture had by 1830 been extended throughout all the South Atlantic States; and the Gulf States (Alabama, Mississippi, and Louisiana), together with Tennessee, produced nearly one-half the entire crop. Of the increased crop, but 60,000,000 to 70,000,000 pounds were consumed in American mills. The foreign cotton market was far more important

'Pitkin, A Statistical View, 35, 177.

than the domestic market, and cotton exports advanced from 87,000,000 pounds in 1819 to 298,000,000 in 1830. It was only because of the violent fall in prices that the value of these cotton exports grew but slightly. The advance in exports of manufactures was due to an unusual increase in the output of cotton textiles, boots and shoes, soap, candles, hats, wood manufactures, and iron goods. The value of exported manufactures increased from $2,000,000 in 1819 to nearly $6,000,000 in 1830.2

The stagnation in the export trade was greatest in the Atlantic States, and nowhere else was trade crippled so severely as in Pennsylvania. A short time before, this State had led in the foreign trade, but in 1830 her exports were valued at only $4,292,000, or less than those of any other important commercial State except Maryland. The depression in New England was only slightly less acute than in Pennsylvania. New York alone of all the Atlantic States increased the annual shipments to foreign markets, chiefly because the port of New York had after 1825 a direct canal route to the interior. In contrast with the reaction in the East, the foreign trade dependent upon the Mississippi River and the port of New Orleans slowly advanced. By 1830, New Orleans was second only to New York in the export trade; its exports were double those of Boston and more than treble those of Philadelphia. The trade of Mobile, dependent largely upon the Alabama River, was still relatively small, but was likewise gradually increasing. The values of exports in 1819 and 1830 from certain States, as stated by Pitkin, were as follows:

TABLE 49.-Value of exports from certain States, 1819 and 1830.

Though the violent depression of the foreign trade was due first to the panic of 1818-19, there were other reasons why foreign commerce remained in a continuous state of stagnation for a dozen years or more: A larger domestic commerce developed. It is significant that the depression in general business and in the internal trade of the country was less severe; indeed, by the middle of the period from 1819 to 1830, many branches of internal commerce were in a flourishing condition. A determined effort was being made to develop home industries and a domestic market for the agricultural crops, and with these purposes in view the farmers of the West and the manufacturers of

'Value of cotton exports: 1818, $31,334,000; 1819, $21,082,000; 1825, $36,847,000; 1830, $29,675,000.

'As compiled by Evans, Domestic Exports, 1789-1883, p. 70. 'See vol. I, chap. xiii, pp. 217-218.