Trade & Commerce Effects on US Economy

By: Luke Sloma

In the nineteenth century the economy of many countries was based on trade and commerce. This was so because international and even local trading of goods and material was very profitable and useful. Not every country had access to the same resources. Different regions had different resources and were useful for cultivating different kinds of crops and plants. This is mainly why trading was overwhelmingly important. United Sates was one of the nations that was big on commerce. US was transformed because of it. It developed and improved transportation methods. Also Laissez-Faire was an issue during the nineteenth century that was going on between the government and industries. Trade and commerce as well affected the international relations of US with other countries. Urbanization that occurred during this time was had a significant impact on society commerce. In the nineteenth century trade and commerce were two crucial parts of the United States economy that helped shape the nation.
In order to trade within the US there was need for transportation by land. There were canals built and some already existing waterways that allowed trading by water. This was not enough. A connection needed to be established between the West and the East. “…to the necessity of another railroad connection with the West”[i] This connection was necessary because the west was industrialized and it had many factories and mills . Things like cotton, natural resources and live stock from east needed to be send to the west to make products. Later the products had to be send out across the country. This was made possible by the development of railroads. Railroads started to develop in the 1860s. “By the 1860s, however, it had become clear that the railroad offered a much superior form of transportation…”[ii]…the development and building railroads was a great business itself. Railroads were much better than waterways. In winter the waterways froze up which was the end of it, but the railroads could have been used all year round. With the new technology which were the railroads cargo could be shipped to any part of the country very efficiently and easily. There were no more problems with trade within the US.
When dealing with economy an important issue comes to mind called Laissez-faire. Laissez-faire means that the economy should be independent. “It means that government, the state, the people in their collective capacity, ought not to interfere in industrial life…”[iii] That’s what mostly the industry owner and other people that worked in the economy wanted. They did not want the government to control them. This also affected trade and commerce. The government wanted to get involved because it thought that the economy was still developing so it needed some help. The economists thought otherwise. They say that there is no real meaning for Laissez-faire and that it is unsafe. “It is difficult to define laissez faire categorically, because it is so absurd that its defenders can never be induced to say precisely what they mean…laissez faire is unsafe in politics and unsound in morals; and that it suggests an inadequate explanation of the relations between the state and the citizens.”[iv] The economists believe that the government just wanted to have some control over economy. The government believed that no person lives for himself and that people have mutual relations. “We do not believe that any man lives for himself alone…”[v]
Urbanization had a tremendous impact on trade and commerce in the nineteenth century. The last half of the nineteenth century faced great increase in population in the cities. “The closing decades of this century are witnessing no more remarkable phenomenon than that shown in the migration of population…”[vi] This was because of the industries and factories that were opening to which people moved to find work. “…the people not actually needed to cultivate the soil are being drawn into the towns, while the productive industries of the towns, together with those identified with them, are being transferred to the largest cities”.[vii] People could barely maintain their farms so they thought that with all the new factories made it would be easier to make money and have a chance of better life. When people moved to cities they faced reality. The cities were polluted, overcrowded and the living conditions were just horrible. They had to work long hours in unsafe conditions and were paid almost nothing. In the factories all kinds of goods and products were made. The assembly line enabled for large quantities of goods to be made very quickly and cheaply. These goods and products were than traded and sold within US and with other countries as well. In conclusion the more people that worked in factories the more goods were made. More workers available allowed for more factories to open up, also there was always someone found to work the machines. Which than gave more goods to trade and sell.
International relations of United States with other countries were greatly affected by trade and commerce. US relations with some countries were good because of the exchange of certain goods. Countries like France and England were greatly dependent on the cotton trade with US, England also was a great customer for US wheat.[viii] Countries in Europe were in good relations with United States because of the goods they needed. European countries as well as US profited from the international trade between each other. This was the reason to remain in peace. Other nations that could benefit from US goods had a different approach. They would seize US merchant ships and steal the goods. The people that did this were called pirates. This was the reason US imposed the Embargo Act of 1807.[ix] The act stopped trade with countries oversees. No exports and imports caused for US to loose money and people at home had to suffer of starvation. This resulted in unfriendly relations and conflicts.
Trade and commerce were two important aspects of US economy in the nineteenth century. Economy was crucial to a country’s development. Trade and commerce improved US transportation methods by developing railroads. The disagreement on Laissez-faire government and economists was debated. International relations of US changed because of trading with European countries. Trade and commerce were positively affected by the Urbanization that occurred at the end of the Nineteenth century. The great development of United States economy in the nineteenth century was by trade and commerce.



[i]Anonymous, “Canals and Railroads”, Merchants' Magazine and Commercial Review, August 1863.


[ii]Anonymous, “Canals and Railroads”, Merchants' Magazine and Commercial Review, August 1863.


[iii]Anonymous, “A Practical Program for Economists”, Publications of the American Economic Association, 1885

[iv]Anonymous, “A Practical Program for Economists”, Publications of the American Economic Association, 1885.


[v]Anonymous, “A Practical Program for Economists”, Publications of the American Economic Association, 1885.


[vi]Henry J. Fletcher, “Migration to the Cities”, The Drift of Population to Cities: Remedies, 1895.

[vii]Henry J. Fletcher, “Migration to the Cities”, The Drift of Population to Cities: Remedies, 1895.


[viii]Edward McPherson, “Resolutions Against Foreign Mediation”, The Political History of the United States of America, 1863: 346–347.