direction, not only will there not be room for all, but the room
that is will become less and less; and when the moment of the

maximum is at hand, there will be no room at all. Capitalistic
production will have overreached itself, and a change of direction

will then be inevitable.
Divers queries arise: What is the maximum of commercial development

the world can sustain? How far can it be exploited? How much
capital is necessary? Can sufficient capital be accumulated? A

brief resume of the industrial history of the last one hundred years
or so will be relevant at this stage of the discussion.

Capitalistic production, in its modern significance, was born of the
industrial revolution in England in the latter half of the

eighteenth century. The great inventions of that period were both
its father and its mother, while, as Mr. Brooks Adams has shown, the

looted treasure of India was the potent midwife. Had there not been
an unwonted increase of capital, the impetus would not have been

given to invention, while even steam might have languished for
generations instead of at once becoming, as it did, the most

prominent factor in the new method of production. The improved
application of these inventions in the first decades of the

nineteenth century mark the transition from the domestic to the
factory system of manufacture and inaugurated the era of capitalism.

The magnitude of this revolution is manifested by the fact that
England alone had invented the means and equipped herself with the

machinery whereby she could overstock the world's markets. The home
market could not consume a tithe of the home product. To

manufacture this home product she had sacrificed her agriculture.
She must buy her food from abroad, and to do so she must sell her

goods abroad.
But the struggle for commercialsupremacy had not yet really begun.

England was without a rival. Her navies controlled the sea. Her
armies and her insular position gave her peace at home. The world

was hers to exploit. For nearly fifty years she dominated the
European, American, and Indian trade, while the great wars then

convulsing society were destroying possible competitive capital and
straining consumption to its utmost. The pioneer of the industrial

nations, she thus received such a start in the new race for wealth
that it is only today the other nations have succeeded in overtaking

her. In 1820 the volume of her trade (imports and exports) was
68,000,000 pounds. In 1899 it had increased to 815,000,000 pounds,-

-an increase of 1200 per cent in the volume of trade.
For nearly one hundred years England has been producing surplus

value. She has been producing far more than she consumes, and this
excess has swelled the volume of her capital. This capital has been

invested in her enterprises at home and abroad, and in her shipping.
In 1898 the Stock Exchange estimated British capital invested abroad

at 1,900,000,000 pounds. But hand in hand with her foreign
investments have grown her adverse balances of trade. For the ten

years ending with 1868, her average yearlyadverse balance was
52,000,000 pounds; ending with 1878, 81,000,000 pounds; ending with

1888, 101,000,000 pounds; and ending with 1898, 133,000,000 pounds.
In the single year of 1897 it reached the portentous sum of

157,000,000 pounds.
But England's adverse balances of trade in themselves are nothing at

which to be frightened. Hitherto they have been paid from out the
earnings of her shipping and the interest on her foreign

investments. But what does cause anxiety, however, is that,
relative to the trade development of other countries, her export

trade is falling off, without a corresponding diminution of her
imports, and that her securities and foreign holdings do not seem

able to stand the added strain. These she is being forced to sell
in order to pull even. As the London Times gloomily remarks, "We

are entering the twentieth century on the down grade, after a
prolonged period of business activity, high wages, high profits, and

overflowing revenue." In other words, the mighty grasp England held
over the resources and capital of the world is being relaxed. The

control of its commerce and banking is slipping through her fingers.
The sale of her foreign holdings advertises the fact that other

nations are capable of buying them, and, further, that these other
nations are busily producing surplus value.

The movement has become general. Today, passing from country to
country, an ever-increasing tide of capital is welling up.

Production is doubling and quadrupling upon itself. It used to be
that the impoverished or undeveloped nations turned to England when

it came to borrowing, but now Germany is competing keenly with her
in this matter. France is not averse to lending great sums to

Russia, and Austria-Hungary has capital and to spare for foreign
holdings.

Nor has the United States failed to pass from the side of the debtor
to that of the creditor nations. She, too, has become wise in the

way of producing surplus value. She has been successful in her
efforts to secure economic emancipation. Possessing but 5 per cent

of the world's population and producing 32 per cent of the world's
food supply, she has been looked upon as the world's farmer; but

now, amidst general consternation, she comes forward as the world's
manufacturer. In 1888 her manufactured exports amounted to

$130,300,087; in 1896, to $253,681,541; in 1897, to $279,652,721; in
1898, to $307,924,994; in 1899, to $338,667,794; and in 1900, to

$432,000,000. Regarding her growing favorable balances of trade, it
may be noted that not only are her imports not increasing, but they

are actually falling off, while her exports in the last decade have
increased 72.4 per cent. In ten years her imports from Europe have

been reduced from $474,000,000 to $439,000,000; while in the same
time her exports have increased from $682,000,000 to $1,111,000,000.

Her balance of trade in her favor in 1895 was $75,000,000; in 1896,
over $100,000,000; in 1897, nearly $300,000,000; in 1898,

$615,000,000; in 1899, $530,000,000; and in 1900, $648,000,000.
In the matter of iron, the United States, which in 1840 had not

dreamed of entering the field of internationalcompetition, in 1897,
as much to her own surprise as any one else's, undersold the English

in their own London market. In 1899 there was but one American
locomotive in Great Britain; but, of the five hundred locomotives

sold abroad by the United States in 1902, England bought more than
any other country. Russia is operating a thousand of them on her

own roads today. In one instance the American manufacturers
contracted to deliver a locomotive in four and one-half months for

$9250, the English manufacturers requiring twenty-four months for
delivery at $14,000. The Clyde shipbuilders recently placed orders

for 150,000 tons of plates at a saving of $250,000, and the American
steel going into the making of the new London subway is taken as a

matter of course. American tools stand above competition the world
over. Ready-made boots and shoes are beginning to flood Europe,--

the same with machinery, bicycles, agricultural implements, and all
kinds of manufactured goods. A correspondent from Hamburg, speaking

of the invasion of American trade, says: "Incidentally, it may be
remarked that the typewriting machine with which this article is

written, as well as the thousands--nay, hundreds of thousands--of
others that are in use throughout the world, were made in America;

that it stands on an American table, in an office furnished with
American desks, bookcases, and chairs, which cannot be made in

Europe of equal quality, so practical and convenient, for a similar
price."

In 1893 and 1894, because of the distrust of foreign capital, the
United States was forced to buy back American securities held

abroad; but in 1897 and 1898 she bought back American securities
held abroad, not because she had to, but because she chose to. And

not only has she bought back her own securities, but in the last
eight years she has become a buyer of the securities of other

countries. In the money markets of London, Paris, and Berlin she is
a lender of money. Carrying the largest stock of gold in the world,

the world, in moments of danger, when crises of international
finance loom large, looks to her vast lendingability for safety.

Thus, in a few swift years, has the United States drawn up to the
van where the great industrial nations are fighting for commercial

and financial empire. The figures of the race, in which she passed