Chapter 54: The Great Global Shake-Up
In an age of expanding railroads, steam-driven ocean liners, transnational telegraphs, and more, the world experienced its “First Wave of Modern Globalization.” In this episode, we discuss the ways it played out in the mid-19th Century, including massive waves of migrations, gold rushes, remittances, trade, foreign investment, international cooperation efforts, missionaries, the new tourism industry, world’s fairs, and more.
Sources for this episode include:
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Full Transcript
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In 1865, a British merchant made his way to South America. His name was Charles Ledger and, over the past several years, his work largely consisted of smuggling alpacas out of Peru on behalf of the British Empire.
Born in London in 1818, Ledger had started out his career as a clerk for an English trading firm in Peru, exporting alpaca wool and skins, as well as bark and copper. By 1848, he was breeding alpacas as well.
Then in 1852, British consular officials approached Ledger to try to bring some alpacas to Australia. The problem was that Peru had passed strict laws prohibiting the export of alpacas. So, Ledger and a team of South American shepherds had to secretly move their flock, by foot, across the border into Bolivia, then Argentina, and finally across the Andes into Chile, where they disembarked for Sydney in 1858. Over the next three years, he continued to run this operation, but he was running out of money doing it. Ledger attempted to resign on three different occasions, but the British government made small concessions to keep him on – that is, until they fired him in 1862 for misappropriating funds.
Ledger maintained his innocence and tried making it as a freelance smuggler – shipping Peruvian animals across the world in steamers – but he continued to struggle. When he returned to the continent this time (in 1865) though, he had a new venture in mind.
Over the past four years, his Incan servant – Manuel Incra Mamani – had been collecting seeds of the cinchona tree. Much like the alpacas, these seeds were illegal to export. The bark of the trees was just far too valuable, thanks to the fact that it contained quinine – a cure for malaria.
Human beings have been struggling with malaria since long before the homo sapien species came into existence. It has been a scourge to ancient, Medieval, and modern civilizations alike. Carried by mosquitos and parasites, humans are much more susceptible to contract malaria when in swampy or tropical environments.
All humans are at risk of contracting, suffering, and dying from the disease. However, peoples who are native to regions where malaria is more prevalent tend to have a higher resistance to the disease, most likely due to the evolutionary pressures of their genetic history. As mentioned way back in Chapter 3, this was a major reason why the transatlantic slave trade came to be. White Europeans were especially susceptible to malaria in the Americas, while Black Africans were less susceptible. The 16th, 17th, and 18th centuries saw settler-colonial societies take root all over the world – but there were few European efforts to settle places like the interiors of the Amazon River basin or sub-Saharan Africa. When malaria ruined a Scottish colony in modern-day Panama in the 1690s, it left the kingdom in such financial disarray that they ended up forming a union with England.
During the 1500s, Spanish explorers in Peru found indigenous people treating fevers with a substance derived from the bark of cinchona trees. When a Jesuit missionary named Bernabe Cobo brought samples of the bark back to Spain in 1632, Spanish botanists and pharmacologists were able to refine the substance into quinine.
Quinine soon became the white man’s best remedy for malaria. When the Second Continental Congress formed an army behind General George Washington in 1775, the first military expenditure they approved was $300 worth of quinine to ward off malaria in the ranks. Demand for the bark grew as Europe’s empires spread their navies, missionaries, and trade missions across the globe.
But the big breakthrough came in 1820, when French chemists Pierre-Joseph Pelletier and Joseph Caventou managed to isolate the compounds in cinchona bark. The Pelletier-Caventou team had developed a study of alkaloids in the years leading up to it, which allowed them to extract key components of plants to produce in pure, chemical form. In addition to quinine, they also managed to isolate strychnine and caffeine in their research, allowing for major advancements in chemicals and food products down the road.
With quinine isolated from cinchona bark, pharmacists would have a practical way of producing a much more effective cure for malaria. All they needed was a steady supply of bark.
But Peru saw what an opportunity they had. They passed that law forbidding the export of cinchona seeds and bark in an attempt to monopolize the global market for quinine. And it might have worked, had it not been for the British.
In 1859, a former Royal Navy officer named Clements Markham – the future Sir Clements Markham, president of the Royal Geographic Society – traveled to collect and smuggle out some of the lucrative seeds. From there he sailed to India, where he worked to set up cinchona plantations. But Markham had not procured the best seeds and India was not the ideal location for this crop, as insect infestations cut down the yields.
But the seeds gathered by Mamani for Ledger were excellent. Found far to the southeast in Bolivia, they would produce tree bark with high quinine contents. Mamani compiled 14 pounds of these seeds, which Ledger gave to his brother back in England to try to sell. They shopped the seeds around to British and Dutch planters for their colonies around the Indian Ocean, but for the most part, nothing came of them.
Except, that is, for one pound of the seeds, which arrived in Java later in 1865.
By this point in colonial history, Java had become one of the most productive cash-crop sites in the world. The Indonesian island was under Dutch control, and the Dutch government had a policy requiring at least 20% of the cultivated land be dedicated to growing cash-crops for export, including coffee, indigo, tobacco, and sugar. The Netherlands did quite well for themselves at the Javanese peoples’ expense.
Anyway, the Dutch government had set up a cinchona plantation on Java. When they received Ledger’s seeds, they planted them and watched the trees grow. From there, another 20,000 seeds germinated, leading to a massive new industry on Java: the production of quinine. By the time of the Second World War, nearly all the world’s quinine supply came from trees descended from that one pound of seeds sold by the Ledgers.
As quinine production continued to grow in the mid-to-late 19th Century, malaria became a more manageable risk. And as a result, Europeans were able to further expand their empires into places where they never before ventured. For the first time, sub-Saharan Africa was opened to the European powers, who frantically scrambled to colonize it.
Now every corner of the globe was being touched by industrialization. The world was becoming a smaller, more interconnected place. And for all the good that came with it, and for all the bad that came with it, this process of globalization was now and forever an unalterable reality.
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This is the Industrial Revolutions
Chapter 54: The Great Global Shake-Up
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In 1855, a German immigrant living in New York City decided to relocate. He had arrived from the Old World just the year before, finding sanctuary from the political turmoil that had rocked his homeland in recent times. Now he made his way by steamship to New Orleans, Louisiana, before heading up the mighty Mississippi on a steam-driven river boat. He got off in the town of Prairie-du-Chien, Wisconsin, then made his way east across the new state, finally arriving in Milwaukee. His name was Frederick Miller.
Born in Württemberg in 1824, Miller came from a prominent old-school bourgeois family that was able to send him to France for his education. After completing his studies, he travelled around Europe and even to Algiers. And before returning to Württemberg, he visited an uncle in France – a brewer. Miller decided to learn the craft too and, within four years, was a master brewer. Back in Germany, he served as the royal brewer in Sigmaringen Castle before emigrating with his young family.
They brought about $9,000 worth of gold with them – likely a combination of savings, family gifts, and his wife’s dowry. Shortly after arriving in Milwaukee, he used most of it to purchase the abandoned Plank-Road Brewery in the area’s Menominee River Valley.
Milwaukee’s population had swelled from about 1,700 in 1840 to probably about 30,000 by the time of Miller’s arrival 15 years later. And many of these new residents were fellow German immigrants who came to escape persecution in the aftermath of 1848. Approximately 26 breweries were now in operation across the city, producing pilsners and other German-style lagers.
But Miller chose his site far out from the rest of the city, close to fresher water and the farms of western Milwaukee County, which supplied the grains for his beer. It also had access to the caves dug out by the brewery’s original owner, which provided a naturally cold environment for the beer in these days before artificial refrigeration. Miller improved and expanded the caves to hold as many as 12,000 barrels. Of course, he needed to convince a labor force to come out to this far-away brewery, so he built a boarding house for them.
As the years went on, he retooled the operation and added more buildings for milling, brewing, and storing, allowing him to increase production from about 300 barrels per year to about 80,000. His descendants would continue industrializing in the decades to come, adding massive new buildings for fermentation, refrigeration, and a new process of mass-bottling, which also allowed them to introduce pasteurization to the process. This, of course, became the Miller Brewing Company we know today.
And to drive sales, Miller established beer halls and a nearby beer garden, providing spaces for all these German immigrants to socialize the way they did in the Old World.
Of course, he was hardly alone. Other German-American “beer barons” flourished in Milwaukee, including Joseph Schlitz, Franz Falk, Jacob Best, Valentin Blatz, and Frederick Pabst.
And as millions and millions of Germans settled across the United States, many set up successful beer operations elsewhere, including Adolph Coors in Golden, Colorado, David Gottlieb Yuengling in Pottsville, Pennsylvania, and the soap-manufacturer-turned-brewer Eberhard Anheuser – along with his son-in-law, Adolphus Busch – in St. Louis, Missouri.
They were part of a much-larger trend across the world, being driven by forces that, by this point, are well familiar to us.
As new tools and machines increased agricultural productivity (shout out Chapter 5!), more food and better nutrition helped grow the global population. New medicines, especially the smallpox vaccine (shout out Chapter 16!), also reduced mortality. Plus, with the growth of urbanization, the average age of first marriages fell (shout out Chapter 44!), meaning married couples had more years to procreate together, meaning more children were being born.
Nowhere was this happening more than in Europe, which made up about 20% of the world’s population at the start of the 19th Century and about 30% of the world’s population by that century’s end. The population of Europe doubled between the years 1800 and 1850, then tripled between 1850 and 1910.
But as we’ve discussed in the past, the traditional agricultural life that most Europeans knew prior to the Industrial Revolution would simply not be possible for all these new people. So massive migrations became necessary. Many moved from the countryside into the growing cities. But many others left their home countries altogether. Some settled elsewhere in Europe. Many Italians made new lives in the UK, while some 4 million Germans settled in Russian Siberia where they could claim free land.
But most left for other continents. Some 60 million immigrants vacated Europe between 1815 and 1914.
About 23 million of them came from the United Kingdom. Now, remember that in the 19th Century this included Ireland, where at least a million fled during the potato famine, and additional millions in the years before and after it. Many left Scotland and Wales too. Even the English would emigrate, settling British-controlled territories like Canada, Australia, New Zealand, and South Africa.
Many more came out of Germany and Scandinavia, seeking land and opportunities that simply weren’t available to them in their home countries. And these countries benefited from shedding their surplus labor. It has been estimated that wages in Norway were almost 10% higher than they would have been, had it not been for roughly 600,000 people leaving. By the end of the 19th Century, these emigrants would be followed by Italians, Jews, Poles, and others.
The majority of these Europeans – about 35 million total – settled in the United States, where there was a rapidly growing economy as well as a flourishing democracy. Another 15 million or so went to Brazil and Argentina.
Even outside Europe, people were moving. In China and India, many left their homes for the new cities in Asia established by the British and other imperial powers. Other Chinese left for prospects in Cuba, Australia, and the U.S.A. Other Indians made their way to Guyana and Trinidad.
In all, perhaps as many as 100 million people migrated throughout the 19th Century. Now, there had been global shake-ups before, sure – the Mongol Empire and the Columbian Exchange spring to mind. But never before had such a massive number of people left their homes for far away resettlement.
And like the German-American beer barons, who were soon selling their product to a broader market, these immigrants brought traditions with them that soon mixed in with and changed the cultural courses of their adopted countries.
By 1840, the Irish had already made their mark on the United States, digging coal mines, constructing the Erie Canal, and more. But with the potato famine, the numbers of Irish newcomers exploded, making up half of all immigration during those years. Even then, a great many who set sail for America never made it, due to the crowded, disease-ridden conditions of the so-called “coffin ships” they came on.
For those who did make it, they were often met with hostility from the mostly-Protestant Americans upon arrival. Anti-Catholic riots broke out. The words “No Irish Need Apply” became a well-known mantra of job discrimination, and thus the Irish were forced to accept especially low-paying and especially dangerous work. What’s more, it was industrial-era work for a population coming from an almost totally agrarian background. And the men would get drunk, gamble, fight, and it was an absolute culture shock to the American-born population.
But still, Irish immigration continued. By the start of the Civil War, nearly 2 million had arrived from the Emerald Isle. New York City would soon have more Irish people than Dublin.
The United States effectively had an open borders policy. And so long as you were white and didn’t commit any crimes, you could earn American citizenship in just a handful of years. But even then, you didn’t need to be a citizen to enjoy American rights and privileges – even voting. If you got off the boat on Election Day, you could head straight to the polls and cast a ballot.
When non-white immigrants started coming, though, that’s when things started to change.
On the morning of January 24th, 1848, a man named James Wilson Marshall noticed something in the waters of the American River in the territory of California. Just eight days later, California would be ceded by Mexico to the United States, a result of the treaty to end the Mexican-American War. Born in New Jersey, Marshall had gradually made his way west over the previous 14 years. In California, he joined Swiss settler John Sutter’s Nueva Helvetia rancho. There, Sutter had recruited a mix of immigrant and indigenous laborers – the latter of whom he trapped in what amounted to chattel slavery – to harvest wheat and other crops, as well as produce goods in a cottage industry setting at his fort in present-day Sacramento.
Marshall had proposed a new project to Sutter – building a lumber mill upstream from the fort. And as construction was underway, Marshall spotted it in the tailrace of the mill – two small but shiny pieces of gold. He returned to Sutter’s Fort and informed the boss. Sutter knew right away the gold was to be the ruin of him, as his workers would leave him to pan for riches. And, thanks to new technologies moving news faster than ever, word of the discovery instantly spread far and wide.
Within a year, the so-called “Forty-Niners” descended on California from across the globe. In the four years following Marshall’s discovery, the non-indigenous population of California grew from about 7,000 to a quarter million. And they slaughtered and drove away the indigenous population, attacking Native American settlements in ad hoc militia strikes.
The sea-faring Forty-Niners mostly arrived in a small town called Yerba Buena, because there was a natural harbor there. Due to the overnight growth the town experienced, it was soon incorporated into a city and given a new name: San Francisco. With so little development there so far, the ships bringing the Forty-Niners were then converted into hotels and shops for the new population. In fact, many of the ships were then abandoned or sunk, providing foundation for new land to be added. Much of the area around the Embarcadero today is on top of these ships.
Among the newcomers, approximately 25,000 arrived from southern China. Frustrated by the high taxes levied against them to pay the indemnities for losing the First Opium War – and soon enough facing crop failures and the tumult of the Taiping Rebellion – the Chinese learned about a “mountain of gold” from the foreign merchants in Guangzhou and Hong Kong. And so, they packed onto what vessels they could and made the journey to seek riches across the Pacific. They soon made up about 25% of California’s non-indigenous population.
By the time they (and most other fortune seekers) made it to California, the gold to be found was mostly claimed. They’d also be subject to special taxes levied against immigrant miners.
Very, very few people actually got rich from the gold. But as the Forty-Niners came in, they spent what money they had on food and supplies, injecting significant capital into California, which was then quickly admitted as the 31st American state. Among those who prospered from this business were Collins Huntington and his partner, Mark Hopkins, who set up a hardware store for the miners, as well as a general store manager named Leland Stanford.
With gold mining a bust, Chinese immigrants instead found work on the new railroads being built in California, including the western portion of the coming transcontinental railroad, finally completed in 1869 and funded with the capital invested by Huntington, Hopkins, Stanford, and their partner, Charles Crocker. Like the Irish (who built the eastern portion of that transcontinental railroad), the Chinese were forced to accept lower wages and the more dangerous jobs – tunneling through hard rock with hammers and gunpowder. And because of this, the railroad companies came to depend on them for their cheap, brave labor, and they recruited more Chinese workers to make the voyage on their own overcrowded ships. Eventually, as much as 90% of the railroad workers had come from China.
But the culture shock that accompanied Irish immigration was nothing compared to the culture shock of Chinese immigration. Chinese immigrants dressed differently, with shirts and cone hats the white Americans had never seen before. The men wore long pigtails, a hairstyle required under the Qing laws of the time. Their tastes in food were different. They prayed very differently, in ways the Americans and European immigrants couldn’t understand. And they struggled with the English language, which was understandably harder to master for a native Chinese speaker than for, say, a native German speaker. As a result, the Chinese workers largely kept to themselves, as they found it difficult to assimilate with the white Californians. This, in turn, made the white Californians suspicious of and hostile toward them. Soon there were signs reading “No Chinese Need Apply.” White gangs carried out attacks on Chinatown in San Francisco and lynched Chinese workers.
Heeding the calls for action from white Californians, the U.S. Congress passed the Chinese Exclusion Act of 1882, prohibiting further immigration from China. For the first time, America began closing its borders. Among those it affected was our old friend, Yung Wing – the Yale graduate who saw the horrors of the Taiping Rebellion before returning to the United States. A naturalized American since 1852, Yung would later have his citizenship revoked thanks to the Chinese Exclusion Act.
Similar events played out in Australia, where the British-born Edward Hargraves returned after failing to find gold in California. Hargraves – who had had a rather haphazard career in Australia – learned about a gold deposit from a 12-year-old boy in Bathurst, New South Wales. On February 12, 1851, he followed the boy to the spot and, sure enough, they struck gold.
As Hargraves told the boy:
“This is a memorable day in the history of New South Wales, I shall be a baronet, you will be knighted, and my old horse will be stuffed, put in a glass case, and sent to the British Museum!”
Instead, the government awarded Hargraves £10,000, which he refused to share with the boy.
The government offered further incentives for gold prospectors to make discoveries and, over the course of the next two decades, additional gold deposits were found across the country. During those two decades, the population in Australia quadrupled, reaching 1.7 million by 1871, as fortune seekers arrived on steamers from all over the world.
Some of the newcomers brought European Radicalism with them.
In 1854, disgruntled miners in Ballarat, Victoria, protested the fees they owed goldfield operators. Some even burned down a local hotel in protest. As police ramped-up the enforcement of the fees, 10,000 miners marched to a nearby hill with timber from the mineshafts and built a stockade. A charismatic Irishman named Peter Lalor then led them in an oath to a new flag of the Southern Cross: “We swear by the Southern Cross, to stand truly by each other, and fight to defend our rights and liberties.” Days later, the police attacked the stockade, killing 22 of the miners and taking 113 of them prisoner.
But the attack was deeply unpopular. The government gradually freed the prisoners and met many of the miners’ demands. Lalor was even elected to the Victoria legislature, and all male British subjects in the state were given the right to vote just a few years later.
Like with the Native American tribes in California, Aboriginal Australians were further displaced from their ancestral lands to make way for gold mines. Also like in California, Chinese immigrants arrived in the tens of thousands, seeking riches from this “New Gold Mountain”.
To afford the journey down under, the Chinese indentured themselves or indebted themselves to European merchants. They also faced discrimination – both from the government and from their white miner counterparts.
And to justify the move to their families, they sent much of their earnings back home. This was the case in California as well as in Australia. Using a type of business known as Qiaopiju – meaning “overseas letter office” – the immigrants were able to securely send correspondences and transfers of money to their friends and families in China. In fact, Qiaopiju owners would become some of China’s first true capitalists, using the profits to invest in new ventures like commercial shipping, securities trading, and more. Structured as diffuse, transnational networks, though, they often confounded the colonial powers, thus limiting their growth in the increasingly Western-dominated global economy.
Chinese workers in Australia faced heavy criticism for doing this, but sending money home was by no means unique to the Chinese during this period. Immigrant workers from many national origins, living in many different countries, made similar transfers – remittances, as they’re called.
Sadly, there isn’t really comprehensive data available on global remittances during this period, but we have some noteworthy estimates. Irish immigrants in the United States, for example, sent home an average of $5 million per year between 1848 and 1900. Many did so through a new financial institution in New York called the Emigrant Industrial Savings Bank, established in 1850. And during the Second Industrial Revolution, an estimated £200 million of remittances were sent to the UK from her overseas territories.
As the Forty-Niners flocked to California, a pair of East Coast entrepreneurs – Henry Wells and William Fargo – set up a new company to help prospectors send money home. Starting with steamers and stagecoaches, WellsFargo would soon turn to rail and money orders. Even more innovative in this regard was Western Union, which, in 1871, introduced wire money transfers, allowing customers to send remittances by telegraph.
After all, this was a period in which economic globalization was picking up steam.
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On November 17, 1869, Egyptian Khedive Ismail Pasha – the grandson and heir of our old friend, Muhammad Ali Pasha – officially opened a massive new canal from the Red Sea to the Mediterranean.
As I briefly mentioned in Chapter 11, there had been an Ancient Suez Canal here up until the 700s, but it was a pretty indirect route. Talk of a new Suez Canal had been around for a few centuries and, after the Industrial Revolution, the world finally had the means to construct it.
Beginning in the 1830s, the followers of our old friend, the socialist Henri de Saint-Simone, made a new push for building the canal, though Muhammad Ali was concerned it would cut down the revenues he collected from overland trade.
In 1854, his successor at last agreed to let the project move forward, under the leadership of a Frenchman.
Ferdinand Marie, Comte de Lesseps, was born in Versailles in 1805. He came from a long line of French diplomats and his father was one of those new men ennobled under Emperor Napoleon I. Ferdinand followed this family tradition, serving that great variety of 19th Century French regimes in diplomatic roles in Europe and North Africa, including Egypt.
Lesseps was also a Saint-Simonian, and so when an old acquaintance of his – Muhammad Ali’s son, Sa’id – took the throne, he convinced the new Khedive to let him start the Suez Canal Company. It would build the canal from Port Sa’id on the Mediterranean to Suez on the Red Sea, then it operate the canal for a period of 99 years. The canal would be open to ships of all nations, allowing speedier trade between Europe and its ports in China and the Indian Ocean.
Construction of the Suez Canal took ten years to complete, with the labor of an estimated 1.5 million workers – many of whom were slaves provided to the company by the khedives. It is believed that tens of thousands died in the process, the biggest killer being cholera. When he nationalized the canal for Egypt in the 1950s, General Nasser claimed the figure was as high as 120,000 deaths. Lesseps oversaw construction, dismissing engineering criticisms of his work, as costs grew to a whopping $100 million – twice the original estimate.
But when it was completed, Lesseps was hailed as a hero in France. The L’Aigle, a yacht owned by French Empress Eugenie, was the first vessel to navigate through the Suez Canal, followed by the Delta, a British ocean liner. Nearly half a million ships passed through in its first year alone – a number that grew to over 1.25 million by 1874, with the vast majority of the ships being British.
It was an age in which global commerce saw exponential growth. By 1840, international trade was nearly twice what it was in 1800. But between 1850 and 1870, it grew 260%. In the 1870s, about 88 million tons of merchandise were shipped between the industrializing nations of the world every year – 3.4 times what it had been thirty years before. At the same time, trade between the industrializing world and the not-yet-industrializing world increased about sixfold.
Once again, Great Britain was to be the biggest winner in this trade surge. Total tonnage of machinery they sold abroad was about 10 times greater in 1870 as it had been in 1845. British exports of rail iron and steel nearly quadrupled during that same period.
And while they saw growing trade deficits with the UK, the other nations of Europe saw economic benefit in this trade nonetheless. Switzerland, for example, had only 34 steam engines as late as 1850. Twenty years later, they had almost a thousand. The Netherlands saw more than a thirteenfold increase in steam power; in Austria, fifteenfold.
Foreign investment was also spreading the Industrial Revolution far and wide. The British invested about a billion pounds sterling abroad by 1875. Between 1850 and 1880, French foreign investments multiplied more than tenfold.
Helping the process along were the gold rushes in California and Australia. It’s important to remember that, in the wake of the Industrial Revolution, prices of food and goods fell as new technologies were introduced and mass production increased. It created some deflationary pressure, which ultimately would have limited economic expansion. But then came all this new gold from the Pacific rim, increasing the global money supply by maybe a factor of seven. That, in turn, relieved some of the deflationary pressure, helped lower interest rates, and expanded credit. And this is at the same time as new joint-stock investment banks are entering onto the stage, like the Société Générale du Crédit Mobilier – founded by our old friends, the brothers Émile and Isaac Péreire – which could lend large amounts of capital to industrial start-ups, thanks in part to the increased bullion supply.
And as the global market took shape, the free trade movement picked up across Europe.
In October 1859, a former Member of Parliament named Richard Cobden left his home in London for a family trip to France. But shortly before his departure, he received a letter that would change the nature of the trip.
Cobden came from rural Sussex, but made a name for himself in the Manchester area at the height of the Industrial Revolution, as a textile manufacture and Radical pamphleteer. He was elected as an alderman when Manchester won incorporation and made a few runs for Parliament, briefly serving while Sir Robert Peel was Prime Minister. With his friend, the middle-class MP John Bright, he founded the Anti-Corn Law League and he decried the conditions facing the working classes under Peel’s government. Cobden was fiercely opposed to Britain’s colonial adventures in places like China and Burma, and he participated in anti-war conferences in Europe.
Way too far-left for his time, Cobden was not re-elected to Parliament, and then he turned down an invitation to lead the Board of Trade.
Now, in the late 1850s, the British government started preparing for the possibility of war with Napoleon III due to his intervention in Italy. (Shout out Chapter 53!) Bright made a speech in Parliament arguing that, rather than fight the French, Britain should trade with them. That got the attention of one of Cobden’s French acquaintances – the economist and senator, Michel Chevalier.
Born in Limoges in 1806, Chevalier had studied engineering in Paris and graduated shortly before the July Revolution. He became a Saint-Simonian and even went to prison for a time for his beliefs. During the July Monarchy he served as a professor and newspaper editor before being elected to the Chamber of Deputies. Now Chevalier was perhaps France’s foremost promoter of free trade and economic liberalism. And when he read Bright’s speech in 1859, he wrote to their mutual friend, Cobden, offering to come to London and discuss a new trade agreement.
Since Cobden was already planning to go to Paris, he reached out to the Liberal government and got tacit approval to discuss such a treaty there. By this point, Britain had repealed the Corn Laws and the Navigation Acts, but didn’t really have any free trade partnerships. When Cobden arrived, he met with the emperor, discussing at length the ways they could improve commerce between their countries. Napoleon III wanted to improve Anglo-French relations generally, and for years he had been reading reports arguing for trade liberalization (including a recent memo sent to him by Émile Péreire) so the pump was primed. By January, they signed a new agreement – the Cobden–Chevalier Treaty. It reduced French duties on British coal, iron, and manufactured goods, as well as British duties on French wine, brandy, and silks. British duties on all other French goods were dropped.
While not a complete repeal on tariffs between the two countries, it was a major step in that direction. Britain and France gave each other what’s known as “most favored nation” status, meaning the British couldn’t give any other trading partners an advantage over France, while the French couldn’t give any of their trading partners an advantage over Britain.
And while it was a simple bilateral agreement, it set off a domino effect across Europe. Over the next ten-or-so years, more than 50 similar agreements were signed by various European nations, from Russia to Spain. Additionally, trade restrictions on the Danube River were repealed, as were the so-called “Sound Tolls” between Denmark and her neighbors on the Baltic Sea. France, Belgium, Switzerland, and Italy even went so far as creating the Latin Monetary Union in 1865. It adopted a combined gold and silver standard for coinage, so that a Franc and a Lira (for example) could be exchanged at a consistent rate. Effectively, it served as a single currency – a sort-of precursor to the Euro. Additional countries joined the LMU to varying degrees in the years to come.
As free trade expanded, so too did market competition, which gradually forced less-productive enterprises to either call it quits or to modernize with advanced divisions of labor and new machines.
It’s important to note, though, that few of these developments stood the test of time. By the early 1870s, a series of financial crises around the world rocked the industrializing nations, who all looked around and determined free trade was the culprit. The Cobden–Chevalier Treaty was finally killed off when France passed the so-called Méline tariff of 1892. The Latin Monetary Union disbanded in 1927.
What had a much more lasting impact was the elimination of internal barriers to market entry in many European countries throughout the 1850s and 60s. The prohibitions against usury (long ignored in practice by this point) were finally dropped in Britain, the Netherlands, Belgium, and Germany. Several governments denationalized their mines. Commercial law on the continent was reformed, making it easier for joint-stock corporations to form with limited liability. And guild monopolies (and in many cases, the guilds themselves) were abolished in Sweden, Denmark, Austria, Germany, and elsewhere.
As the world economy became more interconnected, international cooperation became increasingly necessary. An International Telegraph Union formed in 1865. It was followed by a standardized International Signals Code, as well as a Universal Postal Union. Scientific standardization picked up as well. An International Meteorological Organization was established by 1878. Guys like Lord Kelvin worked to standardize electrical and thermodynamic measurements.
And as economic liberalism, global commerce, free trade, industrialization, communications, transportation, and financial modernization spread, so too did economic growth… aaaaand so too did the flip-side to all that growth. Because with the bigger, wider-spread booms came bigger, wider-spread busts.
The most famous of these two decades came in 1857, when a bubble of American railroad stocks burst. Several railroads defaulted and went out of business. New York banks, overextended with their speculative ventures around the railroads, experienced a credit crunch. The Ohio Life Insurance and Trust Company – a bank whose executives engaged in some fraudulent practices – went under that August, creating panic throughout the rest of the U.S. economy. Bank runs followed, as well as a contraction in spending and investments. As the recession snowballed, mortgage foreclosures became rampant and land values plummeted.
What was amazing about the Panic of 1857 was just how fast the crisis spread. The telegraph allowed bankers, stock-jobbers, industrialists, politicians, and consumers to follow it – and react to it – in real time. In the old days, it probably would have spread slowly enough to be contained to the United States. Instead, it mushroomed into a liquidity crisis that soon hit those European banks invested in American land and railroads. So, British and French foreign investments took a hit, meaning a decline in foreign investments elsewhere, like in South America.
It was one of the first-ever worldwide economic crises not caused by something like an agrarian catastrophe. And it opened up eyes to just how interconnected the world was becoming.
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In the late 19th Century, a Tory-turned-Marxist businessman named Henry Hyndman looked back on the years between 1847 and 1857. Despite the fact that there were few new landmasses discovered and few formal military conquests, Hyndman concluded that those years were of global significance similar to the 1490s, when Columbus and da Gama first opened Europe up to the world.
Steamers, railroads, telegraphs, etc. made it easier to move people, products, news, money, and ideas across the planet. People could move away from their families and even their home countries and still be connected to the folks they left behind. Sometimes this was in the form of permanent migration. Other times it was in service of their empires, or for trade, or for missionary work. In the process they came into greater contact with foreign cultures. Often times this led to unfortunate cultural clashes; but sometimes, to positive cultural exchange.
By 1870, the world had five times as many railway miles as it had 20 years earlier. In 1875, there were some 62,000 locomotives in operation on Planet Earth, moving an estimated 715 million tons of goods and allowing for perhaps 1.4 billion passenger trips – again, just in 1875. An estimated 10 million miles of international telegraph lines nearly circumnavigated the globe. By 1870, such cables were being laid from Indonesia to Singapore, Singapore to India, India to Yemen, Yemen to Egypt, Egypt to Malta, Malta to Gibraltar, Gibraltar to Portugal, Portugal to Britain. Soon there were lines from France to Algeria, Cuba to Jamaica, Germany to Iran.
It was the beginning of what came to be known as “the First Wave of Modern Globalization.”
Driven by the competition between different European nation states – especially the British, French, and Germans – this process took the form of imperialism, and typically it was violent imperialism (with aspects like coerced labor), at that. To these ends, the European empires sought to impress upon their colonies what they considered their cultural superiority. But it also fostered new, trans-national worldviews to emerge, which celebrated the cosmopolitan experience and challenged existing xenophobia.
By the end of the 19th Century, nearly the entire world had been at least partially colonized by Europe at some point. The Third Republican French Empire included huge swaths of land in north and west Africa, Madagascar, Vietnam, Polynesia, and more. The German Empire had several African colonies, as well as one on New Guinea. The Russian Empire had extended itself across Central Asia to the Pacific. The Netherlands controlled Indonesia. Belgium controlled the Congo. Spain, Portugal, and Denmark still had several colonies from their heydays. Even the United States and Japan were growing empires.
But none really compared to the British, who had a presence on every continent. Between the end of the Napoleonic Wars and the start of the First World War, the British Empire gained some 10 million square miles of territory and roughly 400 million subject people.
And while the Europeans exerted their cultures on their empires, they also imported a lot from their empires back to their home countries. Colonial agents brought back artifacts from their travels – tiger pelts, exotic plants, foreign tools and instruments. Partially this was genuine appreciation of the foreign lands and peoples. Partially this was cultural theft. Many amazing ancient artifacts wound up at the British Museum, for example, including significant pieces from Nigeria, Polynesia, and most especially Egypt. Huge chunks of Athens’ Parthenon are on display in the London institution. And to this day, the countries of origin are trying to get those “spoils of empire” back.
One of the most important elements of empire building during this period was the dispatching of missionaries.
With so much growing power – economic power, military power, etc. – many in the West earnestly believed that they had been chosen by God to spread the benefits of their civilization to the “uncivilized” world. (God was English, America had a “Manifest Destiny”, and so on.) And this, they believed, would justify their encroachment into these far away lands and their exploitation of far away peoples and economic resources. As they saw it, they were introducing God’s children to God Himself, and the heavenly salvation that came with Him. What greater cause could there be than that?
Throughout the 19th Century, thousands of missionaries left Europe and the United States every year to convert non-Christian peoples. An estimated 60% of them were women. They were sent by societies associated with their denominations – mostly Protestant denominations by this point – and as time went on, they became more sophisticated in their approach, documenting best practices and so forth.
In addition to trying to save souls, they also sought to improve the living conditions of the people they were trying to reach, believing such material benefits would earn them trust for their spiritual mission. And to these ends, they sought to impose the norms of Western civilization on non-westerners – as though human beings all landed on a linear spectrum of uncivilized to civilized, with Westerners being at the height of what’s civilized. The thinking was, you take these primitive people, have them dress correctly, farm correctly, and so on, they will become more refined individuals and thus more receptive to things like economic progress and the Christian faith.
The results of this program were definitely mixed. In order to communicate their ideas with and influence the people the encountered, the missionaries needed to learn from them about their languages and customs. The missionaries provided them with some Western-style education in return. The power dynamics were mixed as well – sometimes they were doing this in their home country’s colonies, sometimes they were doing this in places with independent local leaders who they needed to keep amenable to them. Sometimes they acted as agents of empire, convincing the native people to submit to the imperial project. Other times they stood up for the native peoples, becoming folk heroes of future nationalist movements.
Advancements like railroads and steamships made missionary travel easier. They also made other travel purposes easier – including fun travel purposes. It was in the 1850s and 60s that tourism, as we know it, begins to emerge.
Now, we get the words “tourist” and “tourism” from the Grand Tours that young aristocrats had been taking since pre-industrial times. They would travel around Europe for sightseeing, making contacts, and some general education about foreign countries. But in the mid-19th Century, such opportunities were starting to open up to the middle-class as well. By rail, they could safely travel to picturesque destinations, cultural Meccas, and stylish resorts.
In the 1860s, British coastal towns saw a boom in visitors from distant cities, coming to enjoy the cliffs and beaches which had never been economically valuable before. Seafront promenades and piers were added, as were seaside resorts and cottages. The summer holiday became a fashionable way for middle-class families to escape work, spend time together, soak in the sun, breath in the fresh air, and maybe eat and drink a little too much. Among those who set the example for this kind of travel was the royal family. Victoria, Albert, and their children made frequent trips to the Isle of Wight (where they built their Osborne House) and Scotland, where they turned Balmoral Castle into an expansive hunting estate.
On the Continent, travelers would visit restorative spas, mountain resorts, grand hotels, and even luxurious casinos and brothels, all of which attracted a more affluent market segment. New athletic activities like mountain hiking and downhill skiing came onto the scene. Places like Monte Carlo and the Swiss Alps became tourist destinations for generations to come, right up to the present day.
This kind of tourism was incredibly expensive – a typical trip would have cost about three-quarters of an average worker’s annual wages. So obviously this wasn’t an option for everybody. But for the working classes, day trips were an affordable option. They could take the train to cities like London for a Sunday of sightseeing.
In fact, an entire tourism industry began to emerge – from the manufacture of souvenirs to the introduction of travel agents, who could arrange your vacation for you.
And if there’s a particular event that launched this tourism thing, well, it was the Great Exhibition of 1851. It was really the first time so many people had travelled such long distances to do something fun. And in the years to come, many more cities would hold their own such exhibitions to attract visitors and show off their accomplishments. Over the next half-century or so, such World’s Fairs were held in New York City, Paris, Philadelphia, Barcelona, Prague, Chicago, Brussels, and St. Louis. They were attended by massive numbers and helped reshape the cities. It’s how Paris got the Eiffel Tower. It’s how Chicago got its Jackson Park neighborhood and the first ever Ferris Wheel. It’s how St. Louis hosted the third ever modern Olympic games.
People could get around so much easier than they used to, and it inspired one of the most popular books of the 19th Century: the 1872 novel Around the World in Eighty Days by French author Jules Verne.
It tells the story of Phileas Fogg, an English gentleman who gets in an argument with his friends about whether it would be possible to circumnavigate the globe in eighty days. They put a wager on it, and Fogg departs London with his French valet.
They make their way to the continent and travel by rail to the Italian coast, then take a steamer across the Mediterranean and through the recently completed Suez Canal. Continuing over the Arabian Sea, they arrive in Mumbai and traverse the Indian subcontinent by rail. They get to Kolkata, where they depart on another steamer, which takes them through the Strait of Malacca and onto Hong Kong. There they transfer onto a third steamer to Yokohama in recently opened Japan, where they do yet another transfer onto a transpacific steamer, taking them to San Francisco. From San Francisco, they make their way to the transcontinental railroad, which allows them to travel all the way to New York City. From there they get on a steamer which takes them back to the UK.
Despite a myriad of fun hiccups along the way – a bank robbery investigation, stops in Singapore and Shanghai, bison getting on the tracks in the American Great Plains, and a mutiny which forces them to get off in Ireland, rather than Liverpool – Fogg manages to complete the journey in exactly eighty days, by the skin of his teeth.
Just a quarter century earlier, such a trip would have taken nearly a year to complete – roughly 4 times as long. In pre-industrial times, it took well-over two years. Such was the advancement of the era.
They were advancements being driven by the forces of capital and labor…and science. And the mid-19th Century would also see some massively important scientific breakthroughs we need to talk about – next time on the Industrial Revolutions.
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Special shout outs to Karl Larson, Derek Powell, and my mom, Peg Broker, who all helped me access various research materials for this episode. Don’t forget, you too can support the Industrial Revolutions by becoming a Patreon supporter – just go to Patreon.com/indrevpod. Thanks again!