COMMERCE, History of.— Commerce is a division of labor among the people of the world. By it man assigns, unconsciously per haps, the production of certain articles to cer tain areas in which they can be most conven iently produced, and other articles to other areas or groups of people. Some of these articles may be food, others manufacturing material, the others manufactures, but they are in each case the class most natural to the cir cumstances surrounding the groups of people who respectively produce them. Manufactures are the natural product of certain areas and peoples, while foodstuffs or manufacturing material are natural to others. The community whose population is greater than is required to cultivate the soil and work the mines . and fisheries of the area which it occupies naturally develops a manufacturing industry, and the sur plus of its manufactures are gladly exchanged for the food and manufacturing material of other communities. The inhabitants of the less densely populated areas naturally give their attention to the production of those articles of food or manufacturing material which the con ditions of their soil and climate most readily supply and gladly exchange their surplus for the manufactures of the more densely populated areas. Thus commerce is the exchange of the products most natural to the conditions sur rounding the various peoples and climatic areas of the world, and is thus a division of labor among men. These exchanges of the products of different people and climatic areas have be come more general with the cheapening of transportation and enlargement of the facili ties for distribution of natural as well as manufactured products. The exchange of the products of the respective areas and groups of people has become a convenient division of labor, the principle which underlies all success ful business and industrial activities of civili zation.
The history of commerce divides itself into three great periods. The first is that in which merchandise was transported by men and animals on land and in vessels sailing along the coasts and seldom venturing out of sight of land; the second began when man learned the use of the compass and traversed the great ocean, but by sailing vessels only. The
third began- when he applied steam power to the movement of vessels on the ocean and vehicles on land, and this period was simul taneous with that of the establishment of in stantaneous communication by the use of elec tricity.
These three periods vary greatly in length. The first period, that of the sailing vessel creeping along the shores or crossing narrow seas by the observation of the heavens, extends from the earliest period of history down to about the year 1300. The second, that of the sailing vessel guided by the compass, extends from about 1300 to 1819, when the first steam vessel crossed the ocean. The third, that of the steam vessel on the ocean, steam transportation on land and instantaneous intercommunication by electricity are all included within the last 100 years. These three periods, of course, greatly overlap one another. The period of the sailing vessel, guided by the observation of the shores or the sun and stars, merged almost insensibly into that in which vessels were guided by the use of the compass, and no exact date can be named as that of the transfer. The compass was kpown as early as the year 1300, but it took more than a century to so develop its practical use as to lead man to the explora tion of the great oceans which he had always looked upon as a barrier to travel or explora tion; nor can it be said that the transition from the sailing to the steam vessel occurred at a fixed date, for it took 20 years after the first steam vessel crossed the ocean to establish even a limited trans-Atlantic service, and for many years thereafter a large part of the commerce was carried by sailing vessels. The construc tion of railways, a part of the third period, oc cupied many years of time and experimental work. The telegraph and ocean cable, the tele phone and wireless telegraphy, which are im portant factors in the third period, were a gradual development but multiplied enormously the commerce demanding the services of the steamship and railways.