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[Illustration: The United States manufactures and internal trade
compared with the manufactures and internal trade of all other
countries.]

OUR COTTON PRODUCTION AND COTTON EXPORT

The one article of export that is of greatest importance in our
commerce is COTTON. The production of cotton in the United States is
enormous. It is not far short of 5,000,000,000 pounds per annum. This
is probably four times the amount produced upon the whole globe
elsewhere. Our export amounts annually to about 4,000,000,000 pounds,
with a total value of about $240,000,000. Our greatest competitors in
the world's cotton markets are Egypt and India. The export of cotton
from Egypt amounts to $50,000,000 annually. The export of cotton from
India amounts to $45,000,000 annually. At least one half of our export
of cotton goes to Great Britain. Our next greatest customers are (in
order) Germany, France, Italy, Spain, and Russia. We send about
$7,500,000 worth annually to Japan, and $4,000,000 worth annually to
Canada. All our southeastern States produce cotton, but the States
that produce it most plentifully are (in order) Texas (about one third
of the whole), Georgia, Mississippi, and Alabama. The area under
cultivation in the whole country is about 21,000,000 acres, which is
about one sixth of the area devoted to corn, wheat, and oats, or one
half the area devoted to hay. The areas of greatest cotton production
are (1) the "Yazoo bottom," a strip on the left bank of the
Mississippi extending from Memphis to Vicksburg, and (2) the upper
part of the right bank of the Tombigbee. The productivity of cotton is
much higher in the United States than it is in India, averaging not
far short of 200 pounds per acre, as against less than 100 pounds in
India. In India, however, the cotton crop has been grown on the same
soil for ages, whereas in the United States the practice is to
substitute new soils for old ones as soon as crops begin to fail. On
the other hand, the United States cotton crop is much less per acre
than the crop in Egypt. There the yield per acre is from 300 pounds to
500 pounds. The remedy for this defect of productivity in our cotton
crop as compared with that of Egypt is manuring. Where the manuring is
properly attended to our cotton crop is comparable with Egypt's. But
the cotton of Egypt is of better quality than the great mass of the
cotton crop of the United States (the "upland" cotton crop). On the
other hand in the low, flat islands off the coast of Georgia and South
Carolina a species of cotton grows ("sea-island" cotton) which is the
finest in the world, its fibres being the longest, finest, and
straightest, of all cotton fibres produced anywhere, and the most
beautiful in appearance in the mass. Of this "sea-island" cotton about
three to four million dollars' worth is exported annually at a price
averaging from two and one fourth to two and three fourth times the
value per pound of the "upland" cotton. The great cotton ports of our
country are (in order of amount of exportation) NEW ORLEANS,
GALVESTON, SAVANNAH, NEW YORK, CHARLESTON, MOBILE, and WILMINGTON. New
Orleans' export is about a third of the whole, and Galveston's about a
fifth.

OUR PRODUCTION AND EXPORT OF BREADSTUFFS

The item in the official returns that figures largest for exports is
that which is set down as BREADSTUFFS. This term includes wheat, corn,
oats, rye, and other grains, and the flours or meals made from these.
For the year ending June 30, 1898, our total export of breadstuffs was
$334,000,000. This is an enormous increase over the year before, when
the amount was not quite $200,000,000.[5] A large part of this
increase was due to the high prices for breadstuffs which prevailed in
the European markets during the past autumn and winter, but a part of
the increase was due to an increased acreage and to good crops. The
main products that composed this vast exportation were: wheat,
$146,000,000; wheat flour, $70,000,000; corn, $75,000,000; cornmeal,
$2,000,000; oats and oatmeal, $22,500,000; rye and rye flour,
$9,000,000, and barley, $5,500,000. The magnitude of our breadstuffs
exportation can be judged from the magnitude and importance of our
exports of wheat and flour as compared with those of other countries.
Our average WHEAT EXPORT is two and one half times that of Russia,
four and one third times that of Argentina, five and one half times
that of India, and almost twenty-five times that of Canada, while it
is also four and one half times that of all other countries in the
world combined. Our FLOUR EXPORT ($70,000,000) is without a rival. The
export from Canada is now not much more than $1,500,000 a year, and
the export from Hungary not more than $2,500,000 a year, and these
are the only countries with which we have to compete in the western
European markets. Still it must be remembered that Hungarian flour,
owing to the dryness of the climate in which it is made, is the best
in the world, while the flour of Canada made from Manitoba hard wheat
is alike unsurpassed. As a rule much more than one half of our total
exports of breadstuffs goes to Great Britain. Germany is our next best
customer, but her imports of our breadstuffs are not more that a fifth
to a tenth of those of Great Britain. France comes next, but her
importation of our breadstuffs is still more uncertain, ranging from a
half to a hundredth of that of Great Britain. Our other principal
customers for our breadstuffs are (1) the other states of Europe, (2)
Canada, (3) the countries of South America, (4) the West Indies, (5)
Hongkong, (6) the islands of the Pacific, and (7) British Africa. Our
exportation of breadstuffs to Japan and China (direct)[6] is still
inconsiderable. Since the close of the War of the Rebellion our
exportation of wheat has increased thirtyfold and our exportation of
flour fifteenfold. Our chief wheat-growing States are Minnesota and
California, each with about 50,000,000 bushels a year; then Kansas,
North Dakota, Illinois, and South Dakota, each with about 30,000,000
bushels a year; and then Ohio, Indiana, Nebraska, Pennsylvania,
Missouri, and Michigan. The best wheat is grown in the deep black
soil, rich in organic matter, of the Red River valley of Minnesota,
and in the dry, sunny climate of California. The total yield for 1897
was 530,000,000 bushels, which was about 70,000,000 bushels more than
recent averages. The estimate for this year (1898) is over 600,000,000
bushels, which was also the yield for 1891. The total area sown to
wheat was for several years about 35,000,000 acres, but the average
is now increased to about 40,000,000 acres. Large as is the gross
production of our wheat, however, the yield per acre is somewhat
small, being only from 12 to 13 bushels as against 18 bushels in
Ontario, 20 in Manitoba, 26-1/2 in New Zealand, and 30 in Great
Britain. In fact, the wheat yield per acre is lowest in the United
States of all the great wheat-producing countries of the world, except
Australia (7 to 11-1/2), Italy (10-1/2), Germany (10-1/4), India
(9-1/4), and Russia (8). But far greater than our production of wheat
is our production of CORN. Of corn we have nearly 85,000,000 acres
under cultivation and a production of nearly 2,500,000,000 bushels.
Our export of corn, however, is proportionately not large, and figures
only to about 210,000,000 bushels a year, with a value (including
cornmeal) of about $76,000,000. As is well known, CHICAGO is the great
commercial centre of the continent for breadstuffs. NEW YORK is the
great port of export for the Atlantic seaboard, SAN FRANCISCO for the
Pacific seaboard. DULUTH is the great receiving point for the wheat of
the Red River valley and the northern Mississippi. BUFFALO is the
great point where the wheat brought down from Chicago, Duluth, etc.,
in barges, "whale-backs," and immense propellers, is trans-shipped to
the small boats of the Erie Canal for carriage to New York.
MINNEAPOLIS is the great milling point of the continent, its mills
being the largest and most capacious in the world.

FOOTNOTES:

[5] For the year ending June 30, 1899, the amount was $274,000,000.

[6] A portion of the exportation of breadstuffs made to Hongkong is no
doubt intended for consumption in China and Japan.

OUR EXPORT OF PROVISIONS AND ANIMALS

[Illustration: Principal articles of domestic exports of the United
States. (For the year ended June 30, 1898.)]

The next most important item in our list of exports is PROVISIONS.
But, like "breadstuffs," "provisions" also is a composite term,
including two main divisions, "meat products" and "dairy products."
Practically there are three main divisions, "beef products," "hog
products," and "dairy products." We have in these great products of
our country an export trade of $165,500,000 per annum, and if we add
"animals," a similar item, we have $46,500,000 more, or a total of
$212,000,000 per annum. Our export of fresh beef is nearly 300,000,000
pounds a year. Almost the whole of this goes to Great Britain. Our
export of canned beef runs from 40,000,000 to 60,000,000 pounds a
year. About three fifths of this goes to Great Britain, the remainder
going principally to Germany and other parts of Europe and to British
Africa. We have about 50,000,000 cattle upon our farms and ranches,
and our production of beef is estimated to be the enormous amount of
5,400,000,000 pounds a year, which is between a third and a fourth of
the total quantity produced throughout the world. Of course the
greater portion of this is retained for our own home consumption, for
we eat more meat per inhabitant than any other people in the world
except the English. In addition to our beef we export about 400,000
cattle annually, more than seven eighths of which are taken by Great
Britain, our other principal customers being the West Indies and
Canada. The principal export, however, among our "provisions" is our
HOG PRODUCTS. We export annually of these products 100,000,000 pounds
of pork, 850,000,000 pounds of bacon and hams, and 700,000,000 pounds
of lard, with a value greater than $110,000,000. As with our beef
products, so with our hog products--by far the greatest share goes to
Great Britain. Great Britain, however, does not import largely of our
pork or of our lard. And though she purchases from us over four fifths
of our total export of bacon and hams, she does not pay for them so
much as she does for the bacon and hams of Ireland, Denmark, and
Canada. The reason for this is that as a rule our corn-fed bacon and
hams are too fat--a fault that could be easily remedied. After Great
Britain our next best customers for our hog products are Germany
(principally in lard), the Netherlands, Sweden, and the West Indies
(the latter principally in pork). We keep on our farms from 40,000,000
to 50,000,000 hogs, and our production reaches nearly to 4,600,000,000
pounds of pork, bacon, hams, lard, etc., per annum. A great drawback
to our swine-raising industry is the terrible swine plague which so
frequently devastates our swine herds. Were this plague stamped out by
thorough preventive measures our swine industry would soon become very
much larger and more profitable. The third principal item in our
provisions export trade is "dairy produce." Our export of butter now
amounts to 30,000,000 pounds a year. Our cheese export, once much
greater, is now about 50,000,000 pounds a year. As in our beef
products and in our hog products so again in our dairy products Great
Britain is our chief customer. But our butter export to Great Britain
is only one twelfth of her total importation of butter, and our cheese
export to Great Britain is only about one eighth of her total
importation of cheese. Our cheese has lost its hold on the English
market because of its relative deterioration of quality, and its
export is not more than a half or a third of what it once was. Much of
our butter also is not suited to the English taste. But both our
cheese and our butter are now improving in quality. Our great
competitor in the cheese export trade is Canada. Canada's export of
cheese to Great Britain is $15,000,000 annually, while ours is only a
fifth of that amount. Our great competitor in butter is Denmark.
Denmark's export of butter to Great Britain is $32,000,000 while ours
is not more than a fourteenth of that sum. Our competitors in the
markets of Britain for cattle are Canada and Argentina, but their
exports together, however, are less than a third of ours. Our
competitors in the British markets for the sale of meats are
principally the Australasian colonies and Argentina, but their
principal exportation so far is chilled mutton, which they send to
Britain to the amount of many million dollars annually (Argentina
alone $5,000,000 a year, New Zealand alone $10,000,000 a year), while
our exportation of mutton is practically nil. We do, however, export
$1,000,000 worth of sheep a year, but in this item we are frequently
far exceeded by Canada. CHICAGO is, of course, the great commercial
centre of the continent for "provisions" and "live stock," and NEW
YORK the great shipping port. Of the entire export trade of the whole
country New York does two fifths. BALTIMORE comes next with about one
ninth. Then (in order) come PHILADELPHIA, BOSTON, and NEW ORLEANS. The
chief centres of our great provision and live-stock trade, other than
Chicago, are CINCINNATI, KANSAS CITY, INDIANAPOLIS, BUFFALO, and
OMAHA.

OUR FOREIGN CARRYING TRADE

One aspect of our foreign trade is not so well understood as it ought
to be. Our foreign commerce is carried on largely in foreign ships.
The reason is that no vessel is allowed to be registered as belonging
to a United States owner unless she is built in the United States, and
it therefore seems as if our ship-builders could not compete (in
price) in the building of steel and iron ships with those of Great
Britain and Germany. Formerly, when wooden ships were used, our
foreign trade was carried on in our own vessels, and our "clipper"
sailing vessels beat the world. In 1859 seventy per cent. in value of
our foreign trade was carried in American vessels. Since that date the
proportion has decreased steadily until in 1896-97 it was only eleven
per cent., and for 1897-98 it was even less than this. During the five
years 1881-85 it averaged barely twenty per cent. Taking into
consideration tonnage only the proportion at present varies from
twenty five to thirty per cent., showing that the American vessels are
used for carrying the cheaper sorts of goods. The aggregate tonnage
burden of vessels belonging to the United States registered as engaged
in the foreign trade 1896 was for 792,870 tons. For the same year the
aggregate tonnage burden of vessels belonging to Great Britain
engaged in the foreign trade was considerably more than ten times that
amount. Of our export trade to Europe United States vessels carry only
five and one half per cent., and of our export trade to Africa only
four and one half per cent. But of our export trade to Asia and
Oceanica our own vessels carry twenty six and one half per cent.,
while of our export trade to other countries on the American continent
our own vessels carry nearly forty per cent. But as our Atlantic trade
is seventy six per cent. of the whole, and as our trade elsewhere than
on the Atlantic is more than one third carried by sailing-vessels, it
is evident how largely our steamship ocean carrying trade has been
allowed to fall into the hands of foreigners. Seven tenths of our
total export trade, and nearly two thirds of our total foreign trade,
both export and import, are carried in British vessels. The next
greatest carriers of our foreign trade are, first, the Germans, then
ourselves, then the Norwegians, then the Dutch, then the French, then
the Belgians.

EXAMINATION PAPERS

NOTE.--_The following questions are given for the purpose of
indicating to the student the sort of knowledge he ought to be
possessed of after he has made a careful study of the papers of
the course. The student is recommended to write out carefully
the answers to the questions asked. Only such answers need be
attempted as can be made from a careful study of the papers._

_PART I_

1. GREAT BRITAIN. Give as full an account as you can of the causes
which have made London the great commercial centre of the world.

2. GREAT BRITAIN. England is said to be "a beehive of mercantile and
manufacturing industry." Give reasons for this statement and also show
how England has become such.

3. GREAT BRITAIN. (_a_) Describe the foreign trade of Great Britain.
(_b_) Describe the steps taken by Liverpool, Manchester, and Glasgow
to improve their natural facilities for external trade.

4. FRANCE. (_a_) Describe the conditions which (1) conduce toward, and
(2) militate against, France's being a great commercial nation. (_b_)
Give an account of the distinctive manufactures of France.

5. GERMANY. (_a_) Give an account of what Germany has accomplished in
technical education. (_b_) Compare Germany and France as commercial
nations. (_c_) Give a brief account of Germany's foreign trade.

6. SPAIN AND ITALY. (_a_) Why are Spain, Italy, and Turkey sometimes
called "the three decadent nations of Europe"? (_b_) Give some account
of Spain's foreign trade. (_c_) Give an account of the conditions that
militate against Italy's prosperity as a trading nation.

7. RUSSIA. (_a_) Describe the social condition of the Russian people.
(_b_) What are the "artels" of Russia? (_c_) Describe Russia's export
trade.

8. INDIA. (_a_) Describe the present condition of the manufactures of
India. (_b_) Give a brief account of India's trade--(1) external, (2)
internal.

9. CHINA. (_a_) Give an account of China's size, population, and trade
resources. (_b_) Give an account of China's present foreign trade.
(_c_) Give an account of the trade possibilities of China, and show in
what manner an increase of the foreign trade of China is most likely
first to occur.

10. JAPAN. (_a_) Describe the transformation which in recent times has
been witnessed in the Japanese nation. (_b_) Describe Japan's
manufactures. (_c_) Show in what respects an increase in the foreign
trade of Japan is presently possible.

_PART II_

1. AFRICA. (_a_) Describe the "partition of Africa." (_b_) Describe
more particularly Great Britain's possessions in Africa. (_c_)
Describe South Africa's mineral wealth.

2. AUSTRALIA. (_a_) Describe Australia's "peculiarities." (_b_)
Enumerate the political divisions of Australia, and for each describe
briefly (1) its climate, (2) its resources and trade.

3. SOUTH AMERICA. (_a_) Describe the social and political condition of
the various peoples of South America. (_b_) Describe the agricultural
resources and export trade of Argentina. (_c_) Describe (1) the
resources, and (2) the export and import trade, of Brazil.

4. CANADA. (_a_) Describe Canada's resources (1) in forest wealth, (2)
in minerals, (3) in fisheries. (_b_) Describe Canada's agricultural
trade. (_c_) Describe Canada's trade with the United States.

5. THE UNITED STATES. (_a_) Describe the export trade of the United
States. (_b_) Compare our export trade with that of Great Britain.
(_c_) Compare our import trade with that of Great Britain.

6. THE UNITED STATES. (_a_) Describe our cotton production and our
cotton export trade. (_b_) Describe briefly our export trade in
"breadstuffs." (_c_) Describe briefly our export trade in "provisions"
and "animals."

FINANCE, TRADE, AND TRANSPORTATION[8]

I. NATIONAL AND STATE BANKS

ORIGIN OF BANKING INSTITUTIONS

[Illustration: The Bank of England, showing the Threadneedle Street
entrance.]

The world has had its bankers and money-changers for thousands of
years. Babylonian tablets have been found which record banking
transactions which took place in the reign of Nebuchadnezzar. Modern
banking institutions, however, had their origin in the twelfth
century. The first institution of this character in Europe was the
Bank of Venice, founded A. D. 1171. It was based upon a forced loan of
the republic. Funds deposited in it could not be withdrawn, but were
transferable on the books at the pleasure of the owners. The Bank of
Genoa was founded in 1407, and for many years was one of the
principal banks of Europe. It was the first to issue circulating
notes; these were negotiable only by indorsement--that is to say, they
were not made payable to bearer. This was a long step in advance of
the earlier system of deposit transfers which was also employed by
this bank. The Bank of Amsterdam, established in 1607, was the
earliest considerable institution of the kind which looked to the
promotion of commerce. The Bank of Hamburg, established in 1619, was a
bank of deposit and circulation based upon fine silver bars. The
deposits were confined to silver. The Bank of England is more than 200
years old and is to-day acknowledged to be the greatest financial
institution in the world. Nearly all the paper money of England is
issued by this bank. This currency is based partly upon securities
and partly upon deposits of coin. There are three or four banks in the
United States more than one hundred years old. In 1781 Robert Morris,
then superintendent of finance, submitted to Congress a plan for the
establishment of the Bank of North America at Philadelphia. In 1784
the State of Massachusetts incorporated the Massachusetts Bank. The
Bank of New York was chartered in 1791.

FOOTNOTE:

[8] SUGGESTIONS AS TO METHOD OF STUDY

1. Read the lessons as printed very carefully. The aim will be to give
fundamental knowledge as to the organisation and conduct of modern
business.

2. Books will not be necessary. The student, however, who wishes to
make a more thorough study of the national banking system will find
excellent chapters on the subject in "Carroll's Principles and
Practice of Finance" (New York: Putnams) and "White's Money and
Banking" (Boston: Ginn & Co.).

3. Take up the papers of the course paragraph by paragraph and ask
yourself the reason why each is introduced. Discuss with your friends
the advantages or disadvantages of particular requirements.

OUR NATIONAL BANKING SYSTEM

The national banking system of the United States was established by an
act of Congress in 1863, revised in 1864, and amended by later
legislation. The great advantage of the system, it is said, is the
feature of uniformity, the fact that it brings the banking business of
the whole United States under one authority and under the supervision
of one set of administrative officers. The note-issuing department is
subordinate in its public usefulness to the facilities afforded by
banks and clearing-houses for the interchange of credits. The
essential features of national banks are briefly set forth as follows:

1. There is a bureau of the Treasury Department having charge of all
matters relating to national banks, the chief officer of which is the
comptroller of the currency.

2. Any number of persons, not less than five, may form an association
for banking purposes, to continue not more than twenty years, but
renewable for twenty years with the approval of the comptroller.

3. The powers of the bank are limited to the discounting of promissory
notes, drafts, bills of exchange, and other evidences of debt;
receiving deposits, dealing in exchange, coin, and bullion, loaning
money on personal security, and issuing circulating notes. It cannot
hold real estate except such as may be necessary for the transaction
of its business, or such as may have been taken as security for debts
previously contracted in good faith.

4. There can be no national banks anywhere of less capital than
$50,000, and these small ones are restricted to places of not
more than 6000 inhabitants. In cities of more than 6000 and less
than 50,000 inhabitants there can be no bank of less than
$100,000 capital, and in cities of 50,000 inhabitants or more
none of less than $200,000. One half of the capital must be paid
in before the bank can begin business and the remainder must be
paid in monthly instalments of at least ten per cent. each.

5. Shareholders are liable for the debts of the bank to an amount
equal to the par value of their shares in addition to the amount
invested therein.

6. Each bank having a capital exceeding $150,000 must deposit in the
treasury of the United States registered interest-bearing bonds
to an amount not less than $50,000. Those having a capital of
$150,000 or less must deposit bonds equal to one fourth of their
capital stock. Each bank may issue circulating notes to the
amount of ninety per cent. of the market value of the bonds
deposited by it, but not exceeding ninety per cent. of the par
value of the same, and not exceeding ninety per cent. of the
paid-in capital of the bank; but no bank is compelled to issue
circulating notes. No bank-notes shall be issued smaller than $5.
The notes are receivable at par for all dues to the United States
except duties on imports, and are payable for all debts owing by
the United States within the United States except interest on the
public debt and in redemption of the national currency.

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