Mrs. Vatter has covered three major points in her comment on my article. She has suggested the need for further research; she has questioned the completeness of my analysis of interest rate determination; and she has suggested an alternative explanation of the apparent ceiling on interest charges. I am in complete agreement with Mrs. Vatter on the first of her points. On the second, I apologize for any lack of clarity that may have led her to misinterpret my intent. On the third, I feel that, despite her evidence, her conclusion remains, at best, unproved.

The decades of the 1820's, 1830's and early 1840's form a fascinating period i n the process of American nineteenth-century development. In many ways that era represents a classic case of interdependence between developed and underdeveloped economies through the movements of factors, goods and specie. During these formative years in American development, the United States was predominantly a single primary product exporter, her rate of economic expansion very much a function of the state of the external market for cotton. The flow of capital moves in the classic fashion, from capital-rich Great Britain to capital-scarce America, but varying with relative degrees of expected returns; that is, varying with the relative rate of development between the two countries. But the period from the 1820's to 1840's exhibits another interesting aspect as well: it reveals the first substantial evidence of a long swing in the rate of American economic development.

Professor Bolino makes a number of comments on our article, “Sequential Growth, the Labor Safety-Valve Doctrine and the Development of American Unionism,” in this journal, September 1959, which certainly call for some rejoinder on our part.

In 1948, in an address before this association, the late J. B. Brebner spoke of laissez-faire as a “myth,” describing it as a battle cry of the middle classes in their struggle with the landed aristocracy, and noting particularly that the philosophic Radicals—the Benthamites—were proponents not of laissez-faire, as they had been represented to be, but of a new bureaucratic collectivism. It is becoming clear that the reputed mid-Victorian policy of “anti-colonialism” is likewise a myth, as two Cambridge dons argued in an article in 1953, for England continued to extend her empire—both “formal” and “informal”—during the middle years of the nineteenth century. Was the policy which led to the extension of the empire in direct contradiction to the ideas of the men who had revealed the absurdities of the “Old Colonial System” in the bright beam of the new science of political economy and had brought about the repeal of the Corn Laws in 1846 and of the Navigation Acts in 1849? Or is the “anti-colonialism” of Radical doctrine also a myth? I hope to show that Benthamite Radicals, far from being ideological opponents of colonialism, as they are usually depicted, were advocates of positive programs of empire, and, grounding their argument upon the new economic science, constructed and maintained a set of doctrines of which the keystone was the necessity of empire to an industrial England.

Any discussion of the United States Congress and imperialism must admit at the outset a basic handicap—neither Congress nor imperialism lends itself to precise definition. As regards Congress, that part of it which between 1861 and 1897 was most influential in foreign affairs—the Senate—has been best defined by two solons who served there several decades apiece—John Sherman of Ohio and John Tyler Morgan of Alabama. They arrived at a bipartisan definition one warm afternoon of 1890, when Morgan was objecting because Sherman, as chairman of a conference committee, declined to divulge conferee secrets. Sherman, indifferent to the needs of future economists and historians, said it would be a “departure” from “gentlemanly propriety” to discuss private conversation indicating “the means by which we got together.” This aggravated Morgan, who tartly reminded Sherman, “Oh, Senators are not in that sense gentlemen in the conference-room. They are Senators.” Sherman insisted, “but they are expected to be gentlemen.”

Mr. Williamson's comments on my article leave the issue between us ambiguous. I welcome this opportunity further to develop my own views regarding the turbulent period of the 1830's and early 1840's.

First of all, I believe that Williamson has overstated his case in attributing to me disregard of the importance of internal events in the United States. I advanced the hypothesis that the primary disturbing factor in the period 1834–1845 was an increase, and then a decrease, in the flow of funds into the United States, and the problem I wished to examine was the response in the American economy to this initial disturbance. As indicated in my article, the emphasis placed on external factors does not mean that internal events in the United States were negligible.

The West India sugar crisis of 1830–1832 dealt a shattering blow to an economy that was already in the grip of secular decline. Contributing to die decline were certain changes of a structural nature. In its heyday in the mid-eighteenth century, the British Caribbean economy was an important part of an international economy organized on the basis of imperial complementarity; it consisted of a base—the sugar colonies themselves—which was supported by three legs—the North American trade, the African trade and the British Isles trade. The base expanded geographically, largely as a consequence of military conquest, until fourteen Caribbean sugar colonies or groups of colonies were possessed by Great Britain in 1815. Moreover, the slave-plantation regime spread from colony to colony under a system of near-monoculture in the production of cane sugar.

Ghana is very small, in size, population, and economic and strategic significance. In the history of colonialism the Gold Coast was never remarkable for violent conflict, for spectacular instances of exploitation, for conflict over land or labor, or even as the subject of acute controversy there, in Britain, or elsewhere. Its independence was achieved relatively early, peacefully, over no vigorous opposition. The independence movement was markedly free of violence, extremism, or even sharp ideological conflict. Economically the peoples of the Gold Coast had a higher real income than in comparable areas of the colonial and tropical world and a greater degree of economic security. There were no giant plantation or mining activities which elsewhere have served as a focus of infection for rebellion. Its lands were not alienated; its people were not violently disrupted (at least since the end of the slave trade); and its education and civil and social services were generally superior to those in other parts of Africa. There were problems of political unification facing the new independent government, but the transition to independence was, again in relative terms, orderly, smooth, and well-prepared. There was practically no specifically racial or religious animosity or conflict. The mass bases for radical political movements—an uprooted wage-earning proletariat and/or a land-hungry or rack-rented peasantry did not exist. There was no feudal aristocracy, warrior caste, compradore or white settler group. The Convention People's Party had no political obligations abroad. By African standards, forced labor, the pass system, the color bar, and arbitrary military rule were conspicuously absent.

In the half-century before 1914 international capital movements Played a significant role in the development of the world economy. This paper—which is a prelude to a more comprehensive study—focuses upon the British experience. We will first present new annual series on British foreign capital issues for the period 1865–1894. Our analysis of their behavior is centered about the following questions. First, how did the volume of British foreign investment fluctuate during the latter part of the nineteenth century? Were there long swings in these capital movements? Second, how did the geographic distribution of British foreign investment change over time? Was there an increasing tendency to invest within the British Empire? How was the total volume of investment apportioned between the tropics and the temperate regions of recent settlement? Third, how was British foreign investment allocated among economic sectors? Did the industrial composition vary significantly among countries, continents, and climatic-ethnic regions? Finally, what types of enterprises were nourished by British capital? How did the shares vary among government, private and mixed—government and private—undertakings? We believe that our time series provide more reliable answers to these questions than do previously available data.