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advanced to a new high level, the Puget Sound ports taking the lead in the volume of exports and San Francisco in the import trade. The exports of all the Pacific coast ports combined grew from $70,175,000 to $146,856,000 and their imports from less than $59,000,000 to $128,895,000. Meanwhile the exports shipped directly across the Mexican border increased from $22,320,000 to nearly $25,000,000, and the imports received in that way from $5,378,000 to $27,059,000.


The most significant lessons disclosed by the rapidly growing foreign trade of the years 1900 to 1913 were in connection with the development of markets for American manufactures. The sale of such wares in the new and undeveloped markets of the world, as well as in Europe, proved far more difficult than the sale of foodstuffs and raw materials in the established markets of western Europe. At every step the exporters of American manufactured goods encountered vigorous competition by European manufacturers who had regularly shipped their wares to the non-industrial countries of the world during all the years of the nineteenth century, when American merchants regarded those countries chiefly as sources of imports and as dumping-grounds for occasional cargoes which could not be readily sold in the domestic or European markets. However, the improvement in the position of the American exporter as compared with his European rivals, after the close of the nineteenth century, was highly gratifying, especially in some of the newly developed markets. The proportion of the total imports of Canada received from the United States, for example, although England was favored by preferential import duties, advanced from 60.3 per cent in 1900 to 63.4 per cent in 1911. The relative position of American exports in Mexico likewise rose from 50.6 to 53.9 per cent, in Cuba from 44.2 to 52.8 per cent, and in the British West Indies from 26.5 per cent to 42.9 per cent of the total imports of those countries.

In many other markets sought by the American manufacturer, his relative position was distinctly secondary, although the total volume of American wares purchased gradually increased. In Argentina, the leading South American market, the United States furnished 11.8 per cent of the total imports in 1900 and 13.8 per cent in 1910. In Chile the relative share of the United States likewise rose from 9.4 to 12.4 per cent, and in Brazil from 12.52 to 13.0 per cent. In China it advanced from 7.5 to 8.5 per cent, and in British India from 1.7 to 3.8 per cent.3 The relative progress made in these countries was gratifying, but the smallness of the total imports received from the United States is an index of the foreign rivalry which was encountered. In some of the newly sought foreign markets, the share of imports provided by the United States has declined since the close of the nineteenth century. In

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Australia, even though the imports from the United States increased in volume, the American proportion declined from 12.2 in 1900 to 11.6 per cent in 1911, and in New Zealand the decrease in the same time was from 10 per cent to 8.2 per cent. The imports of Japan from the United States likewise declined from 20.9 to 15.8 per cent of the entire import trade of the Empire.

The obstacles encountered in the competition with foreign manufacturers were various. European exporters, having obtained a foothold in the past, could not be easily dislodged and were in a position where they could readily take advantage of trade opportunities. In many instances the more widespread investment of European funds in the countries where markets were sought has been a powerful trade asset. Superior steamship service was a point in favor of European producers, and so was the policy of manufacturing expressly for foreign markets, the establishment of European banks, the policy of direct sales through branch houses, export houses, and salesmen who are acquainted with local conditions, the extension of long-term credit when necessary to make sales, the ability to sell at low prices because of low cost of production, and the policy of careful packing and adherence to specifications. In some markets the political control by European countries has been an obstacle to American traders, for while trade does not blindly follow the flag, yet political control has frequently led to the investment of European funds and to the enforcement of tariffs favorable to the controlling country.

At some points the relative absence of return cargoes was a disadvantage to American exporters. Australia, New Zealand, and Argentina, for example, found an American market for relatively few of their great agricultural exports. Their exports being sold very largely in Europe, it was almost inevitable that large quantities of European wares would be imported.

In China the struggle for markets was made severe by the activities of Japan. Favored by low cost of production, geographical proximity, cheap and effective transportation, and thorough understanding of Chinese trade conditions, Japan became the leader in the foreign trade of China. Since 1905, European as well as American exporters have suffered from the effects of Japanese competition. The rise of the manufacturing industries of Japan, moreover, gradually narrowed the Japanese market for American manufactures, and in 1907 Japan adopted a protective tariff policy which proved to be detrimental to American trade. When the price of raw cotton increased, the Japanese market for American cotton also narrowed, the textile mills of Japan turning more and more to the low-grade cotton of India and China.

Aside from foreign competition, certain obstacles retarded the sale of American exports in the newer markets of the world. The undeveloped condition of some of these countries placed them in strong contrast

with countries having the settled conditions to which the American exporter was accustomed in trading with Western Europe. Brazil and Australia afforded few great markets, because wide stretches of their territory were unpopulated, while in China and parts of Africa, where there was a dense population, the sales were nevertheless restricted because the requirements and purchasing power of the people were limited. Political and military disturbances were an obstacle to uninterrupted trade in countries such as China, Mexico, and the Central American republics. Local difficulties, moreover, sprang up in certain countries, causing temporary trade upheavals. In Brazil, for example, the low price of coffee from 1905 to 1910 prevented many of the people of the Brazilian coffee states from purchasing large quantities of imports. The Chinese policy of restricting the poppy culture, though certain to promote ultimately the welfare of China, caused an abrupt fall in the purchasing power of many of the people of that country, who were deprived of their accustomed means of gaining a livelihood. American exporters have made much progress since the close of the nineteenth century, and they have profited by their past mistakes. Effective selling organizations have been adopted, especially by some of the large industrial corporations, whose strong financial standing enables them to undergo the costs and risks incident to the development of markets in little-known foreign countries. They have established foreign branch houses, sent out agents, and placed skilled sales managers in charge of their export business. Though many orders continue to be filled through commission houses, the importance of export houses which purchase and sell on their own account has gradually increased in the United States as it has in Europe. A growing number of concerns have undertaken the manufacture of wares expressly for the export trade and abandoned the long-standing belief that foreign market customs can easily be changed to suit the convenience and wishes of the American manufacturer. Efforts have also been made to sell American exports on the same credit terms as those granted by European exporters.

The deep-sea marine of the United States continued up to 1913 in the static condition which prevailed during the last decade of the nineteenth century. Beginning with 1913 there has been a gratifying annual increase in the tonnage of American shipping engaged in the foreign trade, but in 1912 the entire registered fleet aggregated only 932,101 gross tons, it carried but 9.4 per cent of the commodities imported and exported, and constituted but 23 per cent of the shipping which entered and cleared American ports in the foreign trade of the United States. The steamship service between the United States and the newer markets of the world continued to be inferior to the service from Europe, but it was improved to some extent, and further improvement is looked for as a result of the opening of the Panama Canal.



Commercial importance of outlying possessions of the United States, 98. The
trade with Alaska, 99. The trade with the Hawaiian Islands, 101. The sugar
industry of Hawaii, 103. The trade with Porto Rico, 104. Trade of the Philippine
Islands under Spanish dominion, 107. The trade of the Philippines since American
acquisition, 109. Advance in Philippine trade with the United States, III. Com-
mercial value of non-contiguous possessions summarized, 112. Statistics of trade
between the United States and its non-contiguous territories, 1899, 1900, 1905, 1910,
1913, 114.

The commercial importance of the outlying possessions of the United States has from the time of their acquisition been the subject of much discussion. Opposing views are held as to the usefulness of the possessions, some persons ascribing to these territories almost limitless value as stepping-stones to the foreign markets of the world and as direct sources of trade, while others regard them as politically burdensome and commercially useless. The years which have passed since the last territory was acquired have gone far to demonstrate that the extremists neither among the optimists nor the pessimists were correct in their conjectures.

While the possessions of the United States have not become points of redistribution from which large quantities of American wares are reshipped to surrounding foreign markets, they have become regions having a heavy direct trade with the United States. In the fiscal year 1913 they provided markets for American wares valued at $108,303,000, and shipped domestic products valued at $128,207,000 to the United States. As markets for American exports and as sources of needed imports they are exceeded in importance only by Great Britain, Canada, Germany, and France. The annual trade between the United States and these possessions exceeds that conducted between the United States and Japan or China, Cuba, Argentina or Brazil, Australia, Italy, Belgium or the Netherlands.

The trade with the non-contiguous possessions may be conveniently divided into (1) the trade with Alaska, (2) with the Hawaiian Islands, (3) with Porto Rico, and (4) with the Philippine Islands. A small trade has arisen with Guam, Tutuila, and the Midway Islands, but the commercial value of these minor territories has been chiefly in their use as ports of call. Shipments to the Panama Canal Zone during the period of canal building consisted chiefly of materials, fuel, supplies, and foodstuffs for use of the construction forces. Much freight has also been transshipped across the Isthmus by rail, but the entire trade with the Canal Zone has been so completely dependent upon the work of canal construction that it may be omitted from further discussion.


The first non-contiguous territory acquired by the United States was Alaska. At the time of its acquisition, October 18, 1867, there were not half a dozen prominent men in Congress who spoke in its favor. It was stated on the floor of Congress that "the people of the country do not want these Russian possessions. If submitted to them they would reject the treaty by a majority of millions. Alaska, with the Aleutian Islands, is an inhospitable, wretched, and god-forsaken region, worth nothing, but a positive injury and encumbrance as a colony of the United States."

When this discouraging sentiment prevailed the one article of Alaskan commerce consisted of furs. The Alaskan fur trade had begun long before Alaska was acquired by Russia.1 After the discovery by the Russian Commander Vites Bering, in 1741, trade was extended to Russia and the fur markets of the remainder of continental Europe and England. In 1787, two Boston trading-vessels procured a cargo of furs in the Oregon country for use in the Chinese trade, and soon thereafter vessels from various Atlantic ports actively engaged in the Alaskan fur trade,2 the furs usually being exchanged in China for cargoes of tea, silk, spices and chinaware. The Russian-American Company and the individual merchants of the Atlantic coast drew a large proportion of this early Alaskan trade to the United States.

A new but temporary phase of Alaskan commerce developed shortly after the discovery of gold in California. So great was the demand for supplies in San Francisco that cargoes of old goods which had been held in the warehouses of the Russian-American Company for decades were disposed of at fabulous prices. In exchange for corn, dried beef, and tallow, Alaska provided the California gold-seekers with Russian tools, implements, ironware, and salt fish. However, the only permanent branch of Alaskan trade prior to the discovery of gold in Alaska, and for more than fifteen years after the annexation to the United States, was the fur trade. It is estimated that during the first twentytwo years subsequent to annexation, furs valued at over $48,500,000 were exported. In more recent years the fur trade has declined because of the ruthless destruction of the fur-bearing animals, which formerly abounded, until in the fiscal year 1913 the entire receipts of Alaskan furs in the United States amounted in value to but $751,000. Alaskan commerce since the decline of the fur trade has depended chiefly upon two great industries-the gold mines and the fisheries. Gold was first found in southwestern Alaska in 1863, that district being later developed with Ketchican as the supply center in the south and Juneau holding a similar position in the north. A second gold district. came into prominence in 1883 on the upper Yukon-Dawson City, the

1Bancroft, History of Alaska, 97.

2U. S. Census 1890, Alaska, 243.

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