An Overview of British Trade Statistics, 1700-1899 David S. Jacks (Simon Fraser University and NBER) March 2011
In effect, this talk serves as a progress report for the NSF- funded project: “Globalization and Growth: Lessons from British Trade Statistics”. The most straightforward way to proceed is to first follow Guillaume’s questionnaire as a guide. From there, I will highlight the questions we hope to answer in this project and suggest extensions to a potential pan-European project. So wi thout further ado…
1) What institution registered the flow of goods across British borders? The primary source is the Great Britain Customs and Excise Department’s ledgers of imports and exports , published under various titles from 1697 to 1899. Same data underlying Schlote (1938) and Schumpeter (1960), but they were mostly concerned with compiling aggregate trade statistics. Closest (published) analog: Davis (1979) which provides 15 geographic designations for 20 commodity groups from 1785 to 1855.
Our goal is to fully replicate the structure of the ledgers by recording (and analyzing) the commodity-level trade of Britain with all of its trading partners. Our focus is on 1700-1899 with initial sampling at every 20 years (and hopes of at every decade); thus, our sample encompasses: 1.) the last decades of the pre-industrial revolution mercantilist era (1700-1780) 2.) the industrial revolution, the French War, and Britain’s movement towards freer trade (1780-1850) 3.) the first wave of globalization, British imperialism, and non-British industrialization (1850-1899)
2) Was a “ balance of trade ” produced? And if so, by whom? On a fairly consistent basis, the ledgers provide annual summaries of exports and imports (as well as the balance of trade) on a country-by-country basis. And up to 1780, they are also reporting the annual out flows of gold and silver on a bilateral basis. However, it is not clear to what extent policymakers used this disaggregated information.
3) What was the motivation behind the data collection? The first objective was likely in the accurate determination of flows for revenue purposes. Naturally by 1697, there was already an extensive set of excises and tariffs in place. There was also a fairly wide appreciation of the role of the external economy in influencing the course of the domestic economy. Thus, a secondary objective was in determining the gross balance of trade as a vital sign for the English economy.
4) What kind of data was registered? In particular, was the flow measured in quantity, in value or both? The ledgers contain a line-by-line account of the commodity-level bilateral trade flows of Britain with the rest of the world. The data is further disaggregated by distinguishing between trade with London versus the “outports” and trade carried out on English versus foreign ships. The data is reported in both quantity and value terms.
4a) If it was in value, how was the price fixed, by whom and in which currency? The underlying prices used to value imports and exports were fixed from 1702 to 1813 in the case of exports and from 1702 to 1853 in the case of imports. These seem to be based on declared prices prevailing in or around 1700. The prices were determined by the Customs and Excise Department and were stated in Great British Pounds. Attempt to minimize bargaining?
4b) When there was no value info, what kind of method can you suggest to compute the value of trade flows? The chief problem with the data, of course, is not the lack of valuation of the trade flows, but the lack of an accurate valuation of the trade flows. Some have disparaged the use of the ledgers as accurate guides to the commercial life of Britain (Clark 1938). Apart from some obvious — but likely small — concerns about smuggling and the underreporting of imports, the chief objection to their use has been the fact that the underlying prices were fixed as mentioned before.
On the other hand, they constitute a fairly consistent measure of physical quantities imported and exported (e.g., Deane and Cole, 1962). Davis (1979) suggests that carefully combining the physical trade volumes with price information could lead to reliable measures of the value of British trade. At the time, Davis could only rely upon the price data underlying Gayer et al. (1953), which limited his focus to the years from 1785.
Happily, there have been a number of advances in the 30 intervening years, especially the collection of previously published and newly discovered price data for Britain. One obvious starting point is the Global Price and Income History Group at UC Davis. Another innovation in this respect is the work of Clark (2005) which documents trends in prices and wages for the English economy from 1209 to 2004. A large part of our contribution is in not only the mere collection of the data, but also in matching the trade data with corresponding price data.
5) Was there a coherent list of categories of goods used to register the flows? To all appearances, there is complete coherence across the geographic areas reporting the trade flows. 6) Was there any indication about the origin and/or destination of the goods? Were these indications systematic/reliable? Again, the trade flows are reported on a bilateral basis, so the stated origin/destination is always known.
However, some over/under-reporting is inevitable due to the nature of British data collection. Before 1904, exports were reported as such for those countries to which they were directly shipped while imports were reported as such for those countries from which there were directly shipped. Thus, transshipment trade is unreported and land-locked nations are absent in the data. It is only after 1904 that the British began to collect information on the country of original dispatch or ultimate destination.
6a) In case there was no such indication, will it be possible to reconstruct at least partially this information from other available sources? In theory, it may be possible to reconstruct such missing trade by comparing British records with those of other exporting or importing nations. In practice, however, the error associated with such a reconstruction will necessarily be large. Furthermore, this is an issue of decidedly second-order importance in the British case.
6b) Are the data reported by port of loading/landing? Until the late eighteenth century, the ledgers distinguish between London and the “outports”. There is no furthe r information on foreign ports. 7) Do you think the data registered and presented in the balance of trade provides a good representation of the actual flow of goods and prices that existed? Yes, the British data is clearly privileged with respect to the administrative capacity of the state at this time and Britain’s unique geographic circumstances of being an island nation.
At the same time, there is a large historical literature on the prevalence of smuggling and under-reporting. This concern while valid is likely a small one. The scale of this type of activity was almost certainly dominated by the volume of trade legitimately recorded. More importantly, nothing in the historical record suggests that any related bias is systematic across nations . (Still, commodity composition might matter…)
A straightforward means of assessing the quality of bilateral trade data at the commodity-level would come from comparing across national accounts on a good-by- good basis. Following Javier, this has been attempted for English trade with the colonies of North America reported by Rosenbloom and Weiss. Although this avenue needs to be more systematically explored, the initial comparisons are very encouraging with high levels of Pearson and rank correlations.
An indirect means of assessing the reliability of aggregated bilateral trade flows would be use them in order to estimate a standard gravity equation. The main purpose of this exercise is to simply detect any gross outliers. Again, much more work needs to be done in this regard, but the preliminary results for the eighteenth century are reassuring. Output/population enters positively and distance enters negatively with no clear outliers evident.
8) For what period are the data available? The data are available from 1697 to 1899. It is unknown if the British archives would allow for even earlier returns, perhaps published under a different form, e.g. London portbooks. However, it is clearly possible to push the data collection effort forward in time and link our historical data to existing databases. This would allow for a complete trading history of England over the past 300 years.
8a) Were the data coherent overtime or did they change significantly during the collection period? The data collection effort was fairly coherent over time. We lose the distinction between trade conducted in London and the “outports” in the late 18 th century. We lose the distinction between trade conducted in British versus foreign bottoms in the late 19 th century. Further change comes in the unit of observation: England up to 1780, Great Britain up to 1840, the United Kingdom up to 1899.
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