CHAPTER I. BACKGROUNDS
In 1783 America won her independence in government from a colonial status. But commercially she remained a British colony - yet with a difference. She had formed a part of the British colonial system. All her normal trade was with the mother country or with other British colonies. Now her privileges in such trade were at an end, and she must seek as a favour that which had formerly been hers as a member of the British Empire. The direct trade between England and America was easily and quickly resumed, for the commercial classes of both nations desired it and profited by it. But the British colonial system prohibited trade between a foreign state and British colonies and there was one channel of trade, to and from the British West Indies, long very profitable to both sides, during colonial times, but now legally hampered by American independence. The New England States had lumber, fish, and farm products desired by the West Indian planters, and these in turn offered needed sugar, molasses, and rum. Both parties desired to restore the trade, and in spite of the legal restrictions of the colonial system, the trade was in fact resumed in part and either permitted or winked at by the British Government, but never to the advantageous exchange of former times.
The acute stage of controversy over West Indian trade was not reached until some thirty years after American Independence, but the uncertainty of such trade during a long period in which a portion of it consisted in unauthorized and unregulated exchange was a constant irritant to all parties concerned. Meanwhile there came the War of 1812 with its preliminary check upon direct trade to and from Great Britain, and its final total prohibition of intercourse during the war itself. In 1800 the bulk of American importation of manufactures still came from Great Britain. In the contest over neutral rights and theories, Jefferson attempted to bring pressure on the belligerents, and especially on England, by restriction of imports. First came a non-importation Act, 1806, followed by an embargo on exports, 1807, but these were so unpopular in the commercial states of New England that they were withdrawn in 1810, yet for a short time only, for Napoleon tricked the United States into believing that France had yielded to American contentions on neutral rights, and in 1811 non-intercourse was proclaimed again with England alone. On June 18, 1812, America finally declared war and trade stopped save in a few New England ports where rebellious citizens continued to sell provisions to a blockading British naval squadron.
For eight years after 1806, then, trade with Great Britain had steadily decreased, finally almost to extinction during the war. But America required certain articles customarily imported and necessity now forced her to develop her own manufactures. New England had been the centre of American foreign commerce, but now there began a trend toward manufacturing enterprise. Even in 1814, however, at the end of the war, it was still thought in the United States that under normal conditions manufactured goods would again be imported and the general cry of "protection for home industries" was as yet unvoiced. Nevertheless, a group of infant industries had in fact been started and clamoured for defence now that peace was restored. This situation was not unnoticed in Great Britain where merchants, piling up goods in anticipation of peace on the continent of Europe and a restored market, suddenly discovered that the poverty of Europe denied them that market. Looking with apprehension toward the new industries of America, British merchants, following the advice of Lord Brougham in a parliamentary speech, dumped great quantities of their surplus goods on the American market, selling them far below cost, or even on extravagant credit terms. One object was to smash the budding American manufactures.
This action of British merchants naturally stirred some angry patriotic emotions in the circles where American business suffered and a demand began to be heard for protection. But the Government of the United States was still representative of agriculture, in the main, and while a Tariff Bill was enacted in 1816 that Bill was regarded as a temporary measure required by the necessity of paying the costs of the recent war. Just at this juncture, however, British policy, now looking again toward a great colonial empire, sought advantages for the hitherto neglected maritime provinces of British North America, and thought that it had found them by encouragement of their trade with the British West Indies. The legal status of American trade with the West Indies was now enforced and for a time intercourse was practically suspended.