ONE of the remarkable phenomena of the world's economic life in the past few decades has been the way in which international commerce has grown by leaps and bounds. A hundred years ago the aggregate value of world trade was less than $2,000,000,000 or only $2.34 per capita; by 1900 it had increased tenfold, to over $20,000,000,000, or $13.00 per capita. With the dawn of the twentieth century, however, the rate of increase became even more rapid, and in the interval between 1900 and the outbreak of the World War it doubled, reaching a value of $40,000,000,000 or $24.50 per capita.[i] By 1929 the value of world trade had reached a total of over 67 billion dollars -- more than $35.00 for every person on the face of the globe.[ii]
This rapid increase in international commerce was, of course, a corollary of the industrial revolution. The increase in factory production in favored industrial sections, at first predominantly in Great Britain, created a demand for materials far beyond the ability of the local region to supply; and at the same time the magnitude of machine output required a market much larger than the local area had capacity to consume. This meant that to the trade in articles of skill and refinement, in goods of high value and small bulk, which for centuries had dominated international exchange, there was added the enormous volume of bulky foods and raw materials characteristic of present-day trade. The limited local economy of days before the industrial revolution was transformed with startling rapidity into a world economy in which the economic machine of each country was dependent more and more upon the smooth operation of the economic organization of every other country. The industrial countries grew and prospered under this division of economic activity, as did also the countries producing the foods and raw materials which were exchanged for the factory-made goods. Standards of living increased along with rapid increases in populations.
In the United States, the growth of foreign trade has followed in general the trend of the
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