the commerce of
California with the rest of the country, aside from the sheep trade
with New Mexico, being carried on around Cape Horn or across Central
America. Within California itself there was an extensive trade between
San Francisco and the agricultural, lumbering and mining districts of
the surrounding regions.

4. CONCLUSION

The expansion of the volume of the internal trade of the United States
during this epoch more than justified the expectations existing at
1830. The improvement of the facilities for communication and
transportation, permitted a continually increasing accentuation of a
territorial division of labor which fostered the growth of mutual
dependence between regions where geographic, social or other conditions
led naturally to the predominance of a special type of industry. The
manufacturing and commercial population of the Northeast was fed by the
farm products of the Central States and the inhabitants of the Central
States drew their imported supplies, their clothing, shoes and large
quantities of other manufactured goods and general merchandise from the
Eastern markets. The South relied upon the North for food, manufactures
and imports. The North in turn bought from the South raw materials for
its cotton and sugar industries, and the Northern shipping interests
carried to European markets the heavy exports of Southern cotton, the
proceeds from which paid the Southern debts in Northern States and
settled the large unfavorable balance of the Northern foreign trade.

The multiplication of factories in the North together with the spread
of cotton culture in the South and the opening of foreign markets to
American grain brought about the demand for cereal products, which the
agricultural interests had been so anxious to create. When the market
problem was solved, the tariff duties were reduced to a revenue basis.

In the solution of the transportation problem the people freely used
their political institutions. Nearly all the numerous canals built
after 1825 and several of the early railroads were public enterprises,
undertaken by state governments. However, the states proved unable to
cope with the problem of administering their railways and canals, and
surrendered the field of transportation to private corporations, which
were helped to carry out the work by generous and munificent gifts of
land and money from federal, state and local governments.

Unfortunately the federal government did n