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growth of commerce may be seen by comparing the figures of our exports and imports from 1855 to 1890, from which it will be seen that the most rapid increase went on until 1870 or 1872, and that since then it has not been so remarkable. On the other hand, it must be remembered that these figures are values only, and do not show the actual volume of trade. It is beyond doubt that, in spite of the groans of pessimists, the foreign commerce of England is greater now than it was in 1872, though, owing to a great depreciation in prices, the values may seem lower; and that the actual commercial intercourse of this country with others has largely increased.1

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Even before 1855, however, England was commercially far ahead of other countries. The great Exhibition of 1851, for instance, the precursor of several others, showed to all the world her immense superiority in productive and manufacturing industries. A certain stimulus to trade was given at the same time by the discovery of gold in California and Australia (1847-51), which supplied a much-needed addition to the currency of the world.

$257. Our Colonies.

But one of the most important causes of the growth of British trade has been the quite modern development of our

1 See the article Commerce in Palgrave's Dict. of Pol. Econ., i. 339. It is there stated that the volume of our foreign commerce is 30 per cent. larger than in 1872.

2 The table is from the article Commerce in Palgrave's Dictionary of Pol. Econ. (Vol. I.). Since 1854 "official" values were abandoned in favour of "computed" values for imports and "declared" values for exports.

colonies.1 Since the war of American Independence, England has been building up a great colonial empire, and she has been wise enough not to attempt again to levy taxes upon her unwilling offspring. India was taken over from the East India Company (1858). The colonies of Canada and the Cape were gained by conquest; those of Australia and New Zealand were the result of spontaneous settlement.? The two former were captured from the French and Dutch, but of South Africa at least we have not yet made a commercial or even a political success; nor are we likely to do so unless we have the sense to keep on good terms with the original settlers, and to allow no misplaced sentiment about native races to disturb cordial relations between Europeans. The recent activity in gold mining in South Africa will, however, have a beneficial influence upon that branch of our colonial trade. As regards our Australasian colonies, they have grown far beyond the expectations of former generations, and gained for themselves entire political freedom, though they have chosen to use it chiefly in carrying on a one-sided war of hostile protective tariffs against their mother-country.3 As, however, they owe English capitalists a large amount of money, the interest on which is paid in colonial goods, there is a strong commercial bond of union between the old country and the new; a bond which protectionists in England are strangely anxious to break, by placing unnatural obstacles upon the payment in goods of the interest due upon colonial loans. It is calculated that the amount of capital borrowed from English investors by the colonies is some 250 millions at present outstanding, and, unless some violent act of repudiation takes place, the interest alone on this vast sum guarantees

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1 For the great question of colonial trade, see Farrer, Free Trade v. Fair Trade, on the one hand, and the publications of the Imperial Federation League on the other. A useful summary is found in Palgrave's Dict. Pol. Econ. (Art. Trade and the Flag, by A. Caldecott, i. 324-326); also my British Commerce and Colonies, ch. xvii.

2 See Caldecott's Colonisation and Empire for a short summary of colonial history, and Lucas's Historical Geography of the British Colonies.

3 Cf. Prof. Bastable, The Commerce of Nations, ch. x.

'Palgrave's Dict. Pol. Econ., i. 324; and see paper on Colonial Indebtedness, by H. F. Billington, in Journal of Institute of Bankers, March 1889.

a considerable trade between borrowers and lender.1 But into this most interesting question of colonial commerce,2 involving as it does colonial history and colonial industry, there is not space to enter in the limits of the industrial history of the mother-country. It can be studied at length in other works, and here is only noted as one element in the enormous foreign trade which our home industries have rendered possible.

§ 258. England and other Nations' Wars.

But besides the extension of our colonial relations, English trade has benefited by the quarrels of her competitors.3 The prostration of Continental nations after 1815 precluded much competition till almost the middle of the century, and then the Crimean War broke out (1854-56). As mentioned before, this war gave a great stimulus to our agriculture,1 and had a similar effect upon our manufactures. The Indian Mutiny which followed it did not much affect our trade, but it rendered necessary the deposition of the East India Company and the assumption of government by the Crown (1858), and thus eventually served to put our relations to that vast and rich empire upon a much more satisfactory and profitable basis. About the same time the Chinese wars of 1842 and 1857, regrettable as they were, established our commercial relations with the East generally upon a firm footing, and since then our trade with Eastern nations has largely developed. Then came the Civil War in America (1861-65), after which there was an urgent demand for English products to replace the waste caused by this severe conflict. The Civil War was succeeded by a series of short European wars, chiefly undertaken for the sake of gaining a frontier, as was the war waged by Prussia and Austria upon Denmark (1864), followed by another struggle between the two former allies (1866). Then in 1870-71 all Europe was shaken by the tremendous fight

1 Cf. Rogers, Economic Interpretation of History, 339-340.

2 Very full statistics of its relation to British and foreign trade are given in Farrer's Free Trade v. Fair Trade, especially in Table V. of the Appendix. 3 For the following brief summary, cf. Rogers, Economic Interpretation, pp. 292-294. 4 Ib., p. 293.

between France and Germany, and since then the Continental nations have occupied themselves in keeping up an armed peace at an expense which, though undoubtedly in the present state of affairs necessary, is almost equal to that of actual warfare. All their conflicts have arrested their industrial development, to their own detriment, but to England's great advantage. Not content, however, with that, they increase their difficulties by a dogged protectionism.1 As a result, they are far poorer in general wealth than our own land,2 and only succeed in competing with us by means of underpaid and overworked labour. But the labourer will not always consent to be overworked and underpaid, and signs are not wanting that his discontent is fast ripening into something more dangerous.

§ 259. Present Difficulties. Commercial Crises.

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But although English commerce has reached a height of prosperity considerably above that of other nations, it has not been, and is not now, without serious occasional difficulties. It has been throughout the century visited at more or less periodic intervals by severe commercial crises. deed, very soon after the conclusion of the Continental War, a severe commercial crisis passed over this country.3 It happened partly because during the war our manufacturers had accumulated vast stocks of manufactured products, and could not get rid of them as quickly as they expected, owing to the financial exhaustion of those countries whom they expected to be their customers, and partly also because foreign countries sought to protect their own almost ruined industries by imposing prohibitive duties upon English manufactures. The harvests of 1816 and 1817 were also very bad in England, and these, added to the causes just mentioned, produced a very severe crisis,5

1 Bastable, The Commerce of Nations, ch. ix. (on European Tariffs, 18651890).

2 Cf. Mulhall's Dictionary of Statistics.

3 During the war there had also occurred a very severe crisis, that of 1810-11; cf. Tooke, History of Prices, i. 303 sqq., and iv. 273.

4 Ib., ii. 8 to 12.

5 Ib., ii. 77-79; Craik, British Commerce, iii. 219-224.

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which reached its worst point in 1819. Once again, in 1825, a second crisis followed, caused by the too rapid importation of raw products that had been bought at a very high price, and by financial follies in speculation in the trade with the Spanish-American colonies, that seemed to recall the days of the South Sea bubble.1 In fact, this panic is often called the second South Sea bubble. Ten years afterwards, in 1836 to 1839, another crisis occurred, owing chiefly to the formation of numerous joint-stock banks and other companies, together with extravagant speculation in corn and tea. During the forties, however, our commercial condition continued to improve, and capital was rapidly accumulated, till the bad harvest of 1846, combined with speculations in grain, and the high price of cotton, caused another period of disaster, in which the cotton industry, in particular, was severely damaged. The speculations in railways were also remarkable at this time, no less than £500,000,000 being raised in loans in 1847. The country, however, recovered once more, and with the discoveries of gold in California and Australia in 1851, a renewed activity was seen in all branches of trade. As the supplies of gold increased, English exports increased also, since they were eagerly taken, especially by Australia, in return for the precious metals. Nevertheless, before very long another crisis 5 broke upon the commercial community (1857), having its origin in North America, but which extended over the whole commercial world, and proved very prejudicial to English interests on account of the close connection between our country and the United States. This time our iron and textile industries were specially affected; factories were closed, and blast furnaces extinguished, and the greatest distress prevailed amongst the working classes. But once more the nation recovered as usual; and for 1 These colonies required capital to work their silver mines, and this led to heavy speculation by English capitalists; cf. Tooke, u. 8., ii. 145, 147, 159.

2 Tooke, u. s., ii. 278, 303.

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3 Ib., iv. 314 (railways); Leone Levi, British Commerce, p. 310; Palgrave's Dict. Pol. Econ., i. 459.

4 Dict. Pol. Econ., i. 459.

5 Dict. Pol. Econ., i. 464; Hyndman, Commercial Crises, ch. v.

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