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International Trade and United States Economic Development: 1827–1843*

Published online by Cambridge University Press:  03 February 2011

J. G. Williamson
J. G. Williamson
Affiliation:
Stanford University
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Extract

The decades of the 1820's, 1830's and early 1840's form a fascinating period i n the process of American nineteenth-century development. In many ways that era represents a classic case of interdependence between developed and underdeveloped economies through the movements of factors, goods and specie. During these formative years in American development, the United States was predominantly a single primary product exporter, her rate of economic expansion very much a function of the state of the external market for cotton. The flow of capital moves in the classic fashion, from capital-rich Great Britain to capital-scarce America, but varying with relative degrees of expected returns; that is, varying with the relative rate of development between the two countries. But the period from the 1820's to 1840's exhibits another interesting aspect as well: it reveals the first substantial evidence of a long swing in the rate of American economic development.

Type
Review Articles and Notes
Information
The Journal of Economic History , Volume 21 , Issue 3 , September 1961 , pp. 372 - 383
Copyright
Copyright © The Economic History Association 1961

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References

1 I do not wish to imply that the American long swing mechanism began during this period, but only that the evidence of such a mechanism prior to the mid-1820's is much more difficult to find.

2 Macesich, George, “Sources of Monetary Disturbances in the United States, 1834-1845,” The Journal of Economic History, XX, No. 3 (09. 1960), 407–34CrossRefGoogle Scholar.

3 North, Douglass C., “The United States Balance of Payments, 1790-1860,” Trends in the American Economy in the Nineteenth Century. Vol. 24, Studies in Income and Wealth, National Bureau of Economic Research (Princeton: Princeton University Press, 1960), pp. 573–627Google Scholar.

4 Macesich, p. 419, note 29.

5 Ibid., p. 420.

6 Ibid., p. 413.

7 Incidentally, when Macesich does suggest an explanation for those variations in capital flows, at only one point in his paper, he appeals to supply conditions in Great Britain. Prior to the Civil War, however, there is little correlation between British capital exports and American capital imports over long periods of twenty years, suggesting that it is demand conditions in the American states which are the important causative variable. Ibid., p. 414.

8 Abramovitz, Moses, “Resources and Output Trends in the United States Since 1870,” Am. Ec. Rev., XLVI, No. 2Google Scholar, Papers and Proceedings (05 1956), 5–23Google Scholar; “The Nature and Significance of Kuznets Cycles,” Economic Development and Cultural Change, IX, No. 3 (04 1961), 225–49Google Scholar; and “Long Swings in United States Growth,” 38th Annual Report of the National Bureau of Economic Research (New York: National Bureau of Economic Research, 1958). Pp. 47–56.Google ScholarKuznets, Simon, Secular Movements in Production Prices (New York: Houghton-Mifflin, 1930)Google Scholar. Lewis, W. A. and O'Leary, P. J., “Secular Swings in Production and Trade, 1870-1913” The Manchester School of Economic and Social Studies, XIII (05 1955), 113–52Google Scholar. Thomas, Brinley, Migration and Economic Growth (Cambridge: Cambridge University Press, 1961)Google Scholar. Burns, Arthur F., Production Trends in the United States Since 1870 (New York: National Bureau of Economic Research, 1934).Google Scholar Pertaining to this period in particular (1830's and 1840's): North, Douglass C., “International Capital Flows and the Development of the American West,” The Journal of Economic History, XVI, No. 4 (12 1956), 493–505CrossRefGoogle Scholar; more recently, see his The Economic Growth of the United States, 1790-1860 (Englewood Cliffs, N. J.: Prentice-Hall, Inc., 1961)Google Scholar. Berry, T. S., Western Prices Before 1861: A Study of the Cincinnati Market (Cambridge: Harvard University Press, 1943)Google Scholar.

9 K. W. Deutsch and A. Eckstein estimate that American external trade, exports and imports of goods, was 15-20 per cent of national income from 1819 to 1839. “National Industrialization and the Declining Share of the International Economic Sector, 1890-1959,” World Politics, XIII (01 1961), 267–99Google Scholar.

10 Although I argue throughout this note that the period from the 1820's to the 1840's was only part of a recurring long swing mechanism which pervades all of American nineteenth-century development, it is not indispensable to the general criticism of Macesich's article. The prejudiced reader may consider it an episodic variation in growth rates.

11 Albert, H. Imlah, “British Balance of Payments and Exports of Capital, 1816-1913,” Ec. Hist. Rev., Series 2, V (1952-1953), 204–39Google Scholar, and more recently, Economic Elements in the Pax Britannica (Cambridge: Harvard University Press, 1958)Google Scholar. Perhaps the best-known investigations of the interaction of the Adantic economy are in Brinley Thomas’ Migration and Economic Growth, and in Cairncross', A. K.Home and Foreign Investment, 1870-1913 (Cambridge: Cambridge University Press, 1953)Google Scholar.

12 In the long-run context of growth, it is not true that “commodity imports and exports are the flexible items in the balance of payments.” Macesich, p. 420.

13 “The United States Balance of Payments, 1790-1860,” p. 585.

14 , North, “International Capital Flows and the Development of the American West,” p. 498Google Scholar.

15 Lewis, Cleona, America's Stake in International Investment (Washington: The Brookings Institution, 1938), pp. 521–22Google Scholar.

16 Ibid., p. 17.

17 Jenks, Leland H., The Migration of British Capital to 1875 (New York: A. A. Knopf, 1927). P. 74Google Scholar.

18 Ibid., p. 75.

19 Ibid., pp. 75-76.

20 Heath, Milton S., “Public Railroad Construction and the Development of Private Enterprise in the South Before 1861,” The Journal of Economic History, Supplement IX (1949), 48Google Scholar.

21 Berry, pp. 410-11.

22 Callender, G. S., “The Early Transportation and Banking Enterprises of the States in Relation to the Growth of Corporations,” Q.J.E., XVII (1903), 125Google Scholar.

23 Matthews, R. C. O., A Study in Trade Cycle History: 1833-1842 (Cambridge: Cambridge University Press, 1961), p. 51Google Scholar.

24 Lewis, p. 25.

25 , North, “International Capital Flows and the Development of the American West,” p. 494Google Scholar.

26 , North, The Economic Growth of the United States, 1790–1860Google Scholar.