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Maps, plates, charts, etc., mey Im filmed Bt different reduction retios. Those too large to be entirely included in one exposure are films d beginning in the upper hit hand corner, left to right and top to bottom, as many frames as required. The following diagrams illustrate the method: Les cartes, planches, tabieaux, etc., peuvent Atre filmAs A des taux de rAduction diff Arents. Lorsque to document est trop grand pour Atre Mprodult en un seul ciichA, 11 est filmA A pertir de I'engto supArieur gauche, de geuche A droite, et de haut en has, an prenant to nombre d'imeges nAcesselre. Les diagrammes suivsnts illustrent to mAthode. 1 2 3 1 2 3 4 5 6 riNANCIAL CRISES: THEIR CAUSES AND EFFECTS. BY IlilNKY C. CAREY. '■«■■«»- W' PHILADELPHIA ; HENRY CAREY BAIRD, INDUSTRIAL PUBLISHER, No. 40 6 WALNUT STREET. 1864. ^. FINANCIAL CRISES: THEIR CAUSES AND EFFECTS. LETTER FIRST. T>FATl S|[»,. — Til your recent and highly interesting volume, which 1 havt) jijHt iiitw rend, tlmro is ii [)a8sage to which, on account of it.s great iiuportiuico rw m^iU'dM the jirogroj^s ol' man towards an ultiniato state of perfect friMidniu ov iil»Molute slavery, I feel disposed to invite your atten- tion. It Ih liH fulloWM! " I am pained to hear such bad news from the United Hlti'eH — hucIi accounts of cinbarrassments and failures, of eud- den poverty liiHinw on the opulent, and thousands left destitute of cm- ployuienl, tmd pci'liiipH of bread. This is one of the epidemic visitations ugaiiiHt which, I i'vnv, no human prudence can provide, so far, at least, as to prevent their recurrence at longer or shorter intervals, any more tlian it Clin prevent the ncnrlet fever or the cholera. A money market alwayH in perfect health und soundness would imply infallible wisdom in tlioso wlio (.'oiiduct itH operations. I hope to hear news of a better state of thingH befui'o 1 write again." Is thi«* really m)'( Can it be, that the frequent recurrence of such calamities is boyond iho reach of man's prevention? To admit that so it certainly wiw, would be, as it seems to me, to admit that Providence had so udjuHted the hiws under which we exist, as to produce those "epi- demic vlsittttioiiH" of which you speak, and of which the direct effect, as all must hoo, in tJiut of placing those who need to sell their labor at the mercy of thoHO who have food and clothing with which to purchase it — iiicreiiMJng Mteadily tlie wealth, strength, and power of these latter, while making tho former poorer and more enslaved. Look around you, in New York, at tho present moment, and study the effects, in this re- Bpeet, of tho Htill-oiiduring crisis of 1857. Turn back to those of 1822 and 181!^, and Hou how strong has been their tendency to compel the transfer of jirojarly from the hands of persons of moderate means to those of men who were already rich — reducing the former, with their wives and ehlldr»tti, in tl.ousands, if not even hundreds of thousands of cases, to tho condition of mere laborers, while largely augmenting the number and tho fortunes of "merchant princes" who have no need to live by labor. Look around yon and study the growth in the number of your inlllioiiaircH, side by side with a pauperism now exceeding in its proportions that of Ilritain, or even that of Ireland. Look next to the condition of tho men who labor throughout the country, deprived as they have been, and ytft are, of anytliing approaching to steadiness of demand for their HorviooM, in default of Avhich they have been, for two years past, unable suitably to provide for their wives, their children, or themselves. Study then tho condition uf the rich mone^'-lenders throughout the coun- (3) FINANCIAL crises; try, ctiiililod, as tlioy havo been, to domnnd one, two, three, and even four ami five per cent per niontli, from tlie miners, nianiifaetnrers, and little f'iirniers ot' the Union, tintil these latter have been entirely eaten out of house and lionjc. Having done all this, you can scarcely fail to arrive at the conclusion, that unsteadiness in the socictary movement tends towards shivery — that steadiness therein, on the contrary, tends towards the. enianeipation of those who have labor to sell from the domi- nation of those who require to buy it — and that, therefore, the question referred to in the passage I have quoted, is one of the highest interest to all of those who, like yourself, are placed in a position to guide their fellow-men in their search for prosperity, happiness, and freedom. The larger the diversity in the demand for human powers, the more perfect becomes the division of employments, the larger is the produc- tion, the greater the power of accumulation, the more rapid the in- crease of competition for the purchixe of the laborer's services, and the greater the tendency towards the establishment of human freedom. The greater that tendency, the more ra])id becomes the societary action — its regularity increasing with every stage of progress. In proof of this, look to that world in miniature, your own printing-office, studying its movements, as compared with those of little country offices, in Avhich a single pcsrson not unfrequcntly combines in himself all the employments that with you are divided among a hundred, from editor-in-chief to news- boy. The less the division of employments, the slower and more unsteady becomes the motion, the less is the power of production and accumu- lation, the greater is the competition for the sah of labor, and the greater is the tendency towards the enslavement of the laborer, be he black or white. The nearer the consumer to the producer, the more instant and the more regular become the exchanges of service, whether in the shape of labor for money, or food for cloth. The more distant the producer and consumer, the slower and more irregular do exchanges become, and the greater is the tendency to have the laborer suffer in the absence of the power to obtain wages, and the producer of wool perish of cold in the absence of the power to obtain cloth. That this is so, is pro\cd by an examination of the movements of the various nations of the world, at the present moment. IJeing so, it is clear, that if we would avoid those crises of which you have spoken — if we would have regularity of the socictary movement — and if we would promote the growth of free- dom — we must adopt the measures needed for bringing together the pro- ducers and consumers of food and wool, and thus augmenting their power to have commerce among tL :mselves. The essential characteristic of barbarism is found in instability and irregularity of the societary action — evidence of growing civilization being, on the contrary, found in a constantly augmenting growth of that regularity which tends to produce equality, and to promote the growth of freedom. Turn, if you please, to the Wealth of Nations, and mark the extraordinary variations in the prices of wheat in the days of the I'lan- tagenets, from kIx shillings, in money of the present time, in 1243, to fiirttj-eUjht in 124G, srvcnti/-two in 1257, three hundred and thirty-six in 1270, and twcntii-eljlit in 12H6. That done, see how trivial have been the changes of Friuico and England, from the close of the war in 1815, THEIR CAUSES AND EFFECTS. to tlic present tunc. Next, turn to llnssia, and mark the fact, given to us by u recent Uritish traveller, that, in those parts of tlic country that have no manufactures, the farmer is everywhere '* the victim of circum- stuncos" over which lie has no control whatsoever — the prices of liis jiro- (lucts heinj( dopendcnt entirely upon the greater or smaller size of tlio croj)8 of other land-s, and ho being ruined at the very moment when the return to his labor has been the most abundant. Look then to the changes throughout our own great West in the present year — wheat having fallen from iS1.30 in May to 50 cts. in July — and you w'll sec how nearly the htate of things with us approximates to that of Russia. Compare all this with the movements of England, France, and Germany, and yiu will, most assuredly, be led to arrive at the conclusion, that the stability whoso absence you deplore, is to bo sought by means of measures looking to tho close aitproximation of the producer und the consume/, and to the ex- tension of domestic commerce. Five years since, IJritish journals nearly all united in predicting tho advent of a great financial crisis, tho seat of which would be found in France and (jiermany. More careful observation might have satisfied them that the tendency towards such crises was always in the direct ratia of the distance of consumers from producers, ajid that the real places in which to look for that which was then predicted, were those coun- tries which most seemed bent on separating tiic producers and consu- mers of the world, Britain and America — the one seeking to drive all its people into the workshops, and the other laboring to compel them all to bcek the fields, and both thus acting in direct defiance of the advice of Adam Smith. The crisis came, spending its force upon those two coun- trk's — France, Belgium, and Germany escaping almost entirely unharmed, und for the reason, that in all these latter tlio farm and the work.-^hop were coming daily more near together, and commerce was becoming more ra])id, free, and regular. llussia and Sweden have, however, suiTered much — the crisis having become, apparently, as p'^rmanent as it is among ourselves. Why should this be so i* Why should they be paralyzed, while France and Germany escape uninjured ? Because, while these latter have persisted in main- taining that protection which is needed for promoting the approximation of producers and consumers, the former have, within the last three years, departed essentially from the system under which they had been so rapidly advancing towards wealth and freedom — adopting the policy advocated by those writers who sec in the cheai)ening of the lal)or and of the raw materials of other countries, the real British road to wealth and power. Throughout Northern and Central Europe, there has been, in the last half century, a rapid increase in tho steadiness of the societary move- ment, and in tho freedom of man — that increase being the natural con- sequence of increased rapidity of motion resulting fiom a growing diver- sification in the demand for human services, and growing competition for the jjurt/tase of labor. In Ireland, India, Spanish America, and Turkey, the reverse of this is seen — producers and consumers beco- ming more widely separated, and exchanges becoming more fitful and irregular, with growing competition for the :<(dc of labor. Why thi.s diflerence? Because the policy of the foimer has been directed towards protecting the farmer in his efforts to draw the market nearer to him, 6 FINANCIAL CRISES : and thus (liiii'inish tlic wnstinij; tiix of tniiisportiition, wliilc flio latfor have bc'on steadily hocoiiiin^ more and iiioro Huhji'ctcd to tlic system wliich y-'vkn to locate in the little iilaiul of IJritaiii the single woikship of the world. How it ha.s boon nniont? oursolvc?, is shown in the following l)rief Rtateniont of the facts of the last half century. From the date of tho passage of the act of ISIO, by whidi tho axe was laid to tho root of our then-rapidly-growing nianufacturcs, our foreign trade steadily declined, until, ill lS2l, the value of our imptn'ts was loss than luilf of what it had been ,six years before. Thenceforward, there was little change until the higlily-i»rotocl' act of 1H2S came fairly into operation — the ave- rage amount of ou. importations, from 1S22 to 18.*]0, having been but 80 millions — and the variations having been between t)G millions in one year and 70 in niiother. Under that tariff", the domestic commerce grew with great rapidity — enabling our people promptly to sell their labor, and to become better customers to the people of other lands, as is shown by the following figures, represeuting tho value of goods imported : I8;;n-8i $103,000,000 is.Ti-.'ia 101,000.000 I8;?'j-;r, , 108,000,000 1833-;i4 120,000,000 ITero, my dear sir, is a nearly regular growth — the last of these years being by far the liighest, aiul exceeding, by more than 50 per cent, the average of the eight years from 18l!2 to 1880, In this period, not only did we contract no foreign debt, but we paid off" the whole of that which previously had existed, the legacy of tho war of independence; and it is with nations us with individuals, that " out of debt is out of danger." The compromise tariif began now to exert its deleterious influence — stopping the building of mills and the opening of mines, and thus lessening the power to nuiintain domestic commerce. How it operated on that with foreign nations, is shown in the facts, that tho imports of 1887 went up to 8180,000,000, and those of 1888 down to §118,000,000 — those of 1839 up to 3102,000,000, and those of 1840 down to $107,000,000; while those of 18-12 were kss than they had been ten years le/ore. In this period, we ran in debt to foreigners to the extent of hundreds of millions, and closed with a bankruptcy so universal, as to have embraced individuals, banks, towns, cities, ^States, and the national treasury itself That instability is the essential characteristic of the system called free- trade, will be obvious to you on the most cursory examination of the facts presented by the several periods of that system through which we have thus far passed. From more than §100,000,000, in 1817, our im- ports fell, in 1821, to $02,000,000, In 1825, they rose to $96,000,000, and then, two years later, they were but $79,000,000. From 1829 to 1834, they grew almost regularly, but no sooner had protection been abandoned, than instability, with its attendant speculation, reappeared — tho imports of 1836 having been greater, by 45 per cent, than those of 1834, and those of 1840 little more than half as great as those of 1830, Once again, in 1842, protection was restored ; and once again do we I THEIR CAUSES AND EFFECTS. hit tor ikwliip hriof •r tho of our dined, vhut it :o until lie nvo- H'U liufc in one ) ;:re\v labor, shown lied frcc- in of the (vhich we ', our ini- find a steady and rojjular f,'rowth in tlio pov r to niuintain iiitcrcoiirHO with tlu! oiittT world, conscriuciil upon tho yruwth of doiniistit; euuaucrco, aa is .shown in the following ligurcs : iKt^-44 , $io«,ono,o<>o lH(l-4') n7,0(K/,0(M) lM.')-}ti llJl.d'IO.OOO 18 jij-17 1 i';,(X)o,(juu We have hero a constant increase of power to go to foroiifn markets, aeconipaniod by a constant docroase in the iimrssi/^ for resorting' to tlicni — the domestic prodiu-tioii of cotton and woollen goids havini; doubled in this brief period, while the domestic production of iron had more tlian trebled. ' Twelve years havini; elapsed since the tariff of 1840 boeanie fiilrly operative, Ave have m)W another opportunity for contrasting the operation of that policy under which I'ussia and Sweden arc now sufferini;, witli that of the one under whieh they liad made such rapid proi^ress — that one which is still maintained by (jiermany and by France. Doinp; this, we find the same instability which characterized the periods whieh pre- ceded the passage of the protective tariff acts of 1^24, 18-8, and ISIIJ, and on a larger scale — the imports having been 817S,00(i,(j(J0 in 1850, «;{04,()00,000 in 1851, S'liW), {){)(), 000 in 1855, 8;500,000,000 in 1857, ,S2S2,000,000 in 1858, and 8;J38,U00,000 iu 1850 — and our foreign debt, with all its tendency towards producing those crises which you so much deplore, having been uuguieutcd probably not Ian than three hun- dred miflluHH of dollars. Ten years since, there was made the great discovery of the Califor- niau gold deposits — a discovery whose effect, we were then assured, was to be that of greatly reducing the rate of interest paid by those who labored to those others who wore already rich. Have such results been thus far realized ? Are not, on the contrary, our workingmen — our miners and manufacturers, our laborers and our settlers of the West — now paying tlirlee tho price for the use of money that was paid at tho date of the passage of the tariff act of 1840 ? Are not these latter, at this moment, paying three, four, five, and even as high as six per cent p(!r month? Are tliey not paying mova i^c.r month, thau is imA per t/eur by the farmers of the protected countries of the European world 'i That they are so, is beyond a doubt. Why it is so is, that although we liavo received from California five huiulred millions of gold, we have been compelled to export, in payment for foreign food in the form of iron and lead, cloths and silks, more than four hundred millions — leaving behind little more than has been required for consumption in tho arts. Had we made our own iron and our own cloth, thus making a domestic market for the products of our farms, would not much of this gold have remained at home ? Had it so remained, would not our little farmers find it easier to obtain the aid of capital at the rate of six per cent per annum, than they now do at three, four, or five per cent per month? Would not their power of self government be far greater than it is now, under a system that, as we see, makes the poor poorer, while tho very rich grow richer every day ? lleflect, I pray you, upon these questions aad these facts, and then answer to yourself if the crises of which you r; FINANCIAL crises: Fpoak arc not tho necessary results of an crronooutt policy of which, durinj; ho long a period, you have been the Htemly udvoeuto, The history of the Union for tho past hulf century umy now lirlcfly thus bo stated : Wc have liad three periods of protection, chminu in 1M17, 1S34, and lH-17, each and all of thcni having tho (Mjuiitry in n state of the highest prosperity — competition for tho purthdmi of labor then growing daily and rapidly, with constant tendency towardH Incicuso in the amount of commerce, in tho stiadinesa of tho sociutury uctlun, ond in the freedom of the men who needed to sell thoir labor. Wc have had three periods of that systutn which lookH to tho dustruo- tion of domestic commere ;, and is called /mt tiiufr. — that Hysteni which prevails in Ireland and India, Portugal and Turkey, and is advocated by IJritish journalists — each and all of them having led to crlscH HUch um you have so well described, to wit, in 1822, 1842, and 1807. In each and ov( ry case, they have left tho country in a state of paralysln, Miniitar to that which now exists. In all (»f them, tho cxchangcH liavo bcconio more and more languiy, you will find in its every page new evidence of the soundness of the views of Washington, Jefieri-oii, and Hamilton, Adams, Madison, and Monroe, each and all of whom had full 'jelief in the accuracy of the ideas so well enunciated by General Jackson, when ho declared that we " had been too lonf,' subject to the policy of IJritish merchants" — that it was " time wo should become a little more Ann ri- canizccl" — and that, if wc continued l(m<,^er the policy of feeding " the paupers and laborers of England" in preference to our own, wo should " all be rendered paupers ourselves." Why is all thisl' Why must it be so? Why must, and that incvi- tally, speculation, to bo followed by crises, paralyses, and daily-growing pauperism, be the invariable attendant upon the policy which looks to the separation of the producer of raw products from the consumer of the finished commodities into which nxde materials are converted? T(j obtain an answer to all these questions, let us look again, for a moment, to the proceedings connected with tho printing and publication of the Evcniuij I'oftt. Dealing directly with your paper-maker, you pay him cash, or give him notes, in exchange for which he readily obtains tho money — no artificial credit having been created. Place yourself now, if you please, at a disUmco '^f several thousand miles from tho manufacturer, and count tho many hands through which your paper would have to pass — each and every change giving occasion to the creation of notes and bills, and to the charge of commissions and storage j and you will, as 1 think, be disposed to arrive with me at the conclusion, that the tendency towards tho creation of artificial credits, and towards speculation, grows with the growth of tho power of the middleman to tax the producers and consumers of the world. Seeking further evidence of this, let me ask you to look at the cir- cumstances which attend tho sale of your products. Now, your custo- mers being close at hand, you are paid in cash — ^your whole year's busi- ness not giving, as I suppose, occasion for the creation of a single note. Change your position, putting yourself in that of the 3Ianchester manu- facturers, at a distance of thousands of miles from your customers, com- pelled to deal with traders and transporters, and study the (quantity of f I 10 FINANCIAL crises; f < ; li it (: 1 1- ; li, notes and bills, with their attendant charges, that would be created — the augmentation of price and diminution of consumption that would be the consequence — the power that would be accumulated in the hands of those who had money to invest, and desired to produce such crises as those which you have so well depicted — and you will, most assuredly, arrive at the conclusion that there is but one road towards steadiness and free- dom, and that that road is to be found in the direction of measures having for their object the more close approximation of the producers svnd con- sumers of the products of the earth. Studying next the great facts of our financial history, with a view to ascertain how far they arc in accordance with the theory you may thus have formed, you will see that, in thos^e prosperous years of the tariff of 1828, from 1880 to 1838, the quantity of bank notes in circulation was but 80 millions. No sooner, however, had wc entered upon the free trade policy, providing for the gradual diminution and ultimate aboli- tion of protection, than we find a rapid growth of speculation, conse- quent upon the growing power for the creation of artificial credits — the average circulation of the years from 1884 to 1887 having been no less than i49 millions, or nearly twice what it before had been. Under the protective tariff of 1842, the average was but 76 millions ; but no sooner had protection been abandoned, than we find an increase so rapid as to have carried up the average from 184G to 1849, to 118, and that of 1850 and 1851, to 148 millions. In that period speculation had largely grown, but prosperity had as much declined. "When the circulation was small, domestic commerce was great — mines having been opened, fur- naces and factories having been built, and labor having found its full reward. When, on the contrary, the circulation had become so great, mines were being closed and miners were being vuincd — furnaces and factories were being sold by the sheriff, and our people were unemployed. In the one case, men were becoming more free, while in the olhc: they were gradually losing the power to determine for themselves to whom they would sell their labor, or what should be its reward. In the one, there was a growing competition for the ^mrchasc of the laborer's ser- vices. In the other, there was increasing competition for their .sv^/e. Such having invariably been the case, can you, my dear sir, hesitate to bcb'eve, that the question t6 whose discussion I have invited you, is not one of the prices of cotton or woollen cloths, but is, really, that of man's pro- gress towards that perfect freedom of action which wo should all desire for ourselves and those around us, on the one hand, or his decline towards slavery, and its attendant barbarism, on the other i* That, as it seems to me, you can scarcely do. At no period in the history of the Union has competition for the pur- chase of labor, accompanied by growing tendency towards improvement in the condition of the laborer, been so universal or so great as in 1815, 1834, and 1847, the closing years of the several periods in which the policy of the country was directed towards the approximation of the producers and consumers of the country, by means of measures of pro- tection. At none, ha.s tlie competition for its sale, with corresponding decline in the laborer's condition, been so great as in the closing years of the free trade periods, to wit, from 1822 to 1824, and from 1840 to 1842. M f THEIR CAUSES AND E'.FECTS. 11 Great as was the pro.spcrity with whif a wc closed the period wliicli had coimiiciiccd in tliis hitter your, three short years of the tariff of 1846 sufficed for reproducing tluit competition for the auk of hibor, relief from wliich hud been the object of the men whu made the tariff of 1842. From the decline with which we then were menaced, we were relieved by the discovery of the Californian mines, and by that alone. Since then, we have thence received more than five hundred millions of gold, and yet at no period has there existed a greater tendency to increase of competition for the mlc of labor than at present — the two cities of New York and I'hiladelphia, alone, presenting to our vic^ hundreds of thousands of persons who are totaVj unahh to cxdutnge their services /or the money icilh which to purchase food and clothing. Is it not clear, from all these facts, that — First, the nearer the place of consumption to the place of production, tlie smaller must be the power of transporters and other middlemen to ta.\ consunicrs and producers, and the greater must be the power of the men who labor to profit by the things produced ? Second, that the more close the approximati(^n of consumers and pro- ducers, the smaller must be the power of middlemen to create fictitious credits, to be used in furtherance of their speculations ? Third, that the greater the power of the men who labor, and the larger their reward, the greater must be the tendency towards that steadiness in the societary action, in the perfection of which you yourself would find the proof of " infallible wisdom in those who conduct its operations" ? Fourth, that all the experiences of continental Europe, and all our own, tend to prove that steadiness is most found in those countries, and at those periods, in which the policy pursued la that protective one ad- vocated in France by the great Co'bert, and among ourselves by "Wash- ington, Franklin, Hamilton, Adams, Jefferson, and their successors, dowu to Jackson ; and least in all of those in which the policy pursued is that advocated by the British school, which sees in cheap labor and cheap raw materials the surest road to wealth and power for the British trader ? Renewing my proposition to cause your answers to these questions to be republished to the extent of not less than 300,000 copies, I remain, my dear sir, with grcrt respect, Your obedient servant, IIenuy C. Carey. W. C. Bryant, Esq. FuiLADELFQlA, Jmuary 3, 1860. t pro- nding 12 FINANCIAL crises: ♦ f I n LETTER THIRD. Dear Sir. — In one of his Mount Vernon Fujpcrs, Mr. Everett in- forms his readers, that — " The distress of the year 1857 was produced by an enemy more "ormidable than hostile armies ; by a pestilence more deadly than fever or plague ; by a. visi- tation more destructive thaxi the frosts of Spring or the blights of Summer. I believe that it was caused by a mountain load of Dedt. The whole country, in- dividuals and communities, trading-Louses, corporations, towns, cities. States, were laboring under a weight of debt, beneath which the ordinary business rela- tions of the country were at length arrested, and the great instrument usually employed for carrying them on, Credit, broken down." This is all very true — a crisis consisting in the existence of heavy debts requiring to be paid by individuals, banks, and governments, at a time when oil desire to be paid, and few or none arc able to make the payments. That admitted, however, we are not, so far as I can see, much nearer than we were before to such explanation of the cauifcs of crises, as is required for enabling us to determine upon the mode of preventing the recurrence of evils so frightful as are tiiuse you have so well dcscri})ed. Why is it, that our people are so much more burthencd with debt than are their competitors in Europe ? Why is it, that it so frequently occurs among ourselves that all need to be paid, and so few are able to pay ? Why is it, that crises alwaijs occur in free-trade times ? Wliy is it, that they never occur in protective times ? Why is it, that it so frequently occurs that those who are rich are enabled to demand from the poor settlers of the West, as much per month, in the form of interest, as is ya\(\. per year, by the farmers of England, France, and Ger- many? These are great questions, to which Mr, Everett has furnished no reply. Let us have them answered, and we shall have made at least one step toward the removal of the evils under which our people so greatly suffer. Let us try, my dear sir, if you and I cannot do that which Mr. Eve- rett has failed to do — ascertaining the cause of the existence of so much debt, the constant preliminary to that absence of confidence which impels all to seek payment, while depriving so nearly all of the power to pay. The commodity that you and I, and all of us, have to sell, is labor — human effort, physical or mental. It is the only one that perishes at the moment of production, and that, if not then put to use, is lost forever. The man who does put it to use, need not go in debt for the food and clothing required by his family; but he who docs not, must cither con- tract debt, or his family must suffer from want of nourishment. Such being the case, the necessity for the creation of debt should diminish with every increase in that competition for the purchase of labor, which tends to produce n instant demand for the forces, physical or mental, of each and every man in the community — such competition resulting from the existence of a power on the part of each and every other man to offer something valuable in exchange for it. On the contrary, it (li THEIR CAUSKS AND EFFECTS. 18 srctt ia- rmidable hy a visi- nmer. I lutry, in- states, ncHS rcla- usually )f heavy mts, at a nake the can see, ■auscs of mode of have so urthcncd hat it so id so few ic times? is it, that demand e form of and Ger- furnished Ic at least people so Mr. Eve- P so much ch impels r to pay. s labor — lies at the it forever. ) food and ither con- it. Such diminish jor, which or mental, resulting other man )utrary, it should Increase with every increase In the competition for the sale of labor, resulting from the absence of demand for the human forces that are produced. In the one case, men are tending towards ireedom, whereas, in the other, they arc tending in the direction of slavery — the existence of almost universal debt being ♦ j be regarded as evidence of growing power, on the part of those who arc already rich, to control the ruovements of those who need to live by the sale of labor. Where, now, is debt most univt'rsal and most oppressive? For an answer to this question, let mc beg that you will look to India, where, .«iiice the annihilation of her manufactures, the little proprietor has almost disappeared, to be replaced by the wretched tenant, who borrows at tifty, sixty, or a hundred per cent, j)r?' annum, the little seed he can afford to use, and finds himself at last driven to rebellion by the continued exac- tions of the money-lenders and the government. Turn, next, to those parts of llussia whero there are no manufoctures, and find in the freo- trr.de book of ]M. Tegoborski his stateuient of the fact, that where there is no diversification of pursuits the condition of the slave is preferable to that of the free laborer. Pass thence to Turkey — finding there an universality of debt that is nowhere else exceeded. Look, next, to Mexico, and find the poor laborer, overwhelmed with debt, passing into servitude. Pass on to Ireland, and study the circumstances which pre- ceded the expulsion, or starvation, in ten short years, of a million and a half of free white people — that expulsion having been followed by the passage of an Act of Parliament for expelling, in their turn, the owners of the land from which those laborers had gone. Look where you may, you will see that it is in those eomnumitics of the world which are most limited to the labors of the field, that debt is most universal, and that the condition of the people is most akin to slavery — and for the reason that there it is, that there is least competition for the purchase of labor. There, consequently, there is the greatest waste of the great commodity which all of us must sell, if we would have the means of purchase. Turn, now, if you please, to Central and Northern Europe, and there, you will find a wliolly different picture — competition for the purchase of labor being there Gt«adily on the increase, with constant augmenta- tion of the rapidity of commcirco — constant increase in the power to economize the great commodity of which I have spoken — and, as a ne- cessary consequence, constant diminution in the necessity for the con- traction of debt. Why should such remarkable differences exist ? Be- cause, in all of these latter countries, the whole policy of the country tends tctwards emancipation from the British free-trade system, whereas India, Ireland, Turkey, and Mexico, are becoming from day to day more subject to it. Looking homeward, we may now, my dear sir, inquire when it has been, that the complaint of debt has been most severe. Has it not been in those awful years which followed the free-trade speculations of 1816-17? Has it not been in that terrific period which followed the free-trade speculations of 37 to '40 — that period in which a bankrupt law was forced from Congress, as the only means of enabling tens of thousands of industrious men to enter anew upon the business of life .' Has it not been in the years of the present free-trade crisis, which pre- sent to view private failures of almost five hundred millions in amount? i ^ 14 FINANCIAL CRISES ; ■When, on the other hand, has there been least complaint? Has it not been in tlioHc tranquil years which followed the passage of the protective tariffs of '2H and '42 ? That it has been so, is certain. Why should it 80 have been ? Because in j)rotective times every man has found a pur- chaser for his labor, and has been thereby relieved from all necessity for contracting- debt; whereas, in free-trade times, a large portion of the labor power produced has remained unemployed, and its owners, unable to sell their one commodity, have been forced to choose between the contraction of debt on the one hand, or famine and death on the other. Look next, my dear sir, to our public debt, and mark its extinction under the tariff of '28 — its revival under the compromise tariff — its reduction under that of '42 — and then study the present situation of a national treasury that, in time of perfect peace, is running in debt at the rate of little less than ^20,000,000 a-ycar ! Turn then, if you please, to our debt to foreigners, which was anmhi- Intal under the tariff of '28 — swelled to hundreds of millions under the tariff of 'o3 — and since so much enlarged, under the tariffs of '46 and '57, that the enormous sum of ^30,000,000 is now required for the pay- ment of its annual interest. France, with a population little larger than our own, and one far less instructed, maintains an army of 000,000 men — carries on distant wars — builds magniiicent roads — enlarges her marine and fortifies her ports — and docs all these things with so much ease, that when the govern- ment has suddenly occasion for $100,000,000, the whole is supplied at home, and without an effort. Belgium and Germany follow in the same direction — not only making all their own roads, but contributing largely to the construction of those which are used for carrying out the rude products of our land, and bringing back the cloth, the paper, and the iron, that our own people, now unemployed, would gladly make at home. They are rapidly becoming the bankers of the world, for they live under systems even more protective than were those of our tariffs of '28 and '42. We, on the contrary, are rapidly becoming the great paupers of the world — creating seven, eight, and ten per cent bonds, and then selling them at enormous discounts, to pay for iron so poor in quality that our rails depreciate at the rate of five, six, and even ten per cent a-year. Looking at all these facts, is it not clear, my dear sir — That the necessity for the contraction of debt exists, throughout the world, in tlie ratio of the adoption of the free-trade system of which you are the earnest advocate 'i That the greater the necessity for the contraction of debt, the greater is the liability to the recurrence »if commercial crises such as you have 80 well described 't That the more frequent the crises, the greatei is the tendency toward.* the subjection of the laborer to the will of his employer, and towards the creation of slavery even where it has at present no existence ? And, therefore — That it is the bounden duty of every real lover of freedom to labor for the re-estabiishmcnt of the protective system among ourselves? TIIEIR CAUSES AND EFFECTS. 15 At font* Ih (fivon, nn you hoo, your notice of refusal to enter upon the dlHcuHMion to which yun have been invited. For a reply thereto, permit iiif, my (Icur nir, to refer you to the followin<^ exposition of your own viewM in reflation to I'ree discussion, given by yourself, a few days since, ill the J'Jviiuii;/ J'oHt, : "TiioMK I'oi.rriOAi, hv.v.rvHKf*. — As our readers know, a project has been under cnnsiileriitliin to filvo n course nC political lectures in this city during the present wiutor, ttiiU ill wliicli our prominent politicians of all parties were to be invited to tako a ptirt. Wo now tin(lerfe u few llepublicau speakers in an independent comso?" Obviounly, tlieno Democrats fear discussion. For years, they have been odvociitiiig doctrines that will not bear examination before the people. Wliat, liowever, shall we say to the froc-trade advocates? Is there any oiks of thnn that would accept a proposition like to the one to which you huvo here referred? Would they even accept an offer that was HO much hiitter than this, that it would give them, of cool and reflect- ing renders, jUii; huntlrrd times an many as you could give to any Demo- crat, of men) auditors ? Would Mr. Ilallock, of the Journal of Com- meire, u(!eept tlio niagnificent oft'er I have made to you, which, thus far, you liavo not iiecepted? Would it be accepted by Mr. Greene, of the liohton Mornlnii Punt? W^ill you accept it? If you will not, can you object to the eour»o of the Democratic leaders to whom you have here referred '( Scarcely so, as I think. Hoping to hear tliat you have renonsidorcd the question, and have decifled to aectMle to a proposition which will enable you to address to a mlllldii. mill a haff of rvailvrs, all the arguments that can be adduced in supjiort of I'rcc-tradc doctrines, I remain, my dear sir. Very truly aud respectfully yours, Henry C. Carey, w. c. duyant, e«q. PHiijADELniiA, January 17, 1860. * "Mil, Cauuv'h rilAT,i,F,N(iK. — ^Ir. Henry C. Carey, of Philadelphia, known by varloMH wofkn on political economy, has challenged Mr. Bryant, one of the editors of thiN paper, to a dic^cussion, in tlie newspapers, of the question of cus- tom-liouMO tivxatloti. In behalf of Mr. Bryant, we would state that challenges of this kind iio iicltiior gives nor accepts. It would almost seem like affectation on hiB part to Hay tliat ho has not read the letters — two in number, he is told — in whicli thiH deflanco Ih given on the part of Mr. Carey, having, unfortunately, too little cnrioHity to kpg In what terms it is expressed ; but as such is the fact, it is well perhftpH to mention it. His duties as a journalist, and a commentator on the eveutu olf the duy uud the various interesting questions which they suggest, leave »t| 16 FINANCIAL crises: him no time for a sparrinK-mntch with Mr. Carey, to which l#io public, after a little while, woulii pay no attention ; and if he hail over ho much time, and the public were ever so mucli interested in wliat lie had to Hay, ho has no ambition to diatin- guish himself IIS a public dlHputant. His business is to enforce what he considers important politii'al truths, and refute what seem to him errors, just as the occa- sions arise, and to puch extent as he imiigines himself able to secure the attention of those who read this journal, and ho will not turn aside from this course to tie himself down to a tedious dispute concerning the tariff question at any man's invitation . «' The question of the tariff is not the principal controversy of the day. It may seem so to Mr. Carey, who is suffering under a sort of monomania, but the public mind is occupied just now with matters of graver import. To them it is proper that a journalist should principally address himself, until they are disposed of. He may make occasional skirmis'hcH in other ftelds of controversy, but hero is the main battle. When the tariff question comes up again, it will bo early enough to meet it ; and even then, a journalist who understands his vocation would keep himself free to meet it in his own way. " If Mr. Carey is anxious to call out seme antagonist with whom to measure weapons in a formal combat, and can find nobody who has an equal desire with himself to shine in controversy, we can recommend to him a person with whom he can tilt to his heart's content. One Henry C. Carey, of Philadelphia, published, some twenty years since, a work in three volumes, entitled ' Principles of Political Economy,' in which ho showed, from the experience of all the world, that the welfare of a country is dependent on its freedom of trade, and that, in proportion as its commerce is emancipated from the shackles of protection, and approaches absolute freedom, its people are active, thriving, and prosperous. We will put forward Henry C. Carey as the champion to do battle with Henry C. Carey. This gentleman, who is now 8( full of fight, will have ample work on his hands in de- molishing tho positions of his adveraary, with which ho has the great advantage of being already perfectly familiar. When that is done, which will take three or four years at the least, inosmuch as both the disputants are voluminous writers, we would suggest that he give immediate notice to his associates, the owners of tho Pennsylvania iron-mills, who will doubtless lose no time in erecting a cast-iron statue in houoi of tho victor." Tllf.Itl CAtlHES AND EFFECTS. vr LETTER FOURTH. Dkar 8iR,— 111 th« notice of your refusal to enter upon the discua- sion to which you hiivo huon invited, it is suid that you "hud not read the letters " thiit hnd boon nddresHcd to you. That such had been the case, is not nt till improbable j but how far a great public teacher, as you undoubtedly arc, can bo held justified in closing his eyes when invited to u calm exiimiiiatioii of the <|uestion whether his teachings tend in the direction of pro«perity and freedom for the laborer, on the one hand, or toward ptuiperi»u» and slavery on the other, seems to me to be far less certain. J'lactid myself in his situation, I should regard it as one of groat roHpoiiHibllity — one in which erroneous action, resulting from failure to givo to the subject the iullest and fairest examination, would bo little Hliort of tho wilful nnd deliberate commission of crime. That you agroo with itio in this, I cannot, even for a moment, doubt. That you had not read the notice served upon me, I regard as abso- lutely certain, and for tho renoon, that its tone and manner are entirely unworthy of yoii, and you would not, I am sure, permit anything to be said by others fop you, that you would not spy yourself. Further, you are there placed in tlio false position of doing what 1 know you would not do — shrinking fVoin responsibility, by permitting yourself to be pre- sented to tho world UN being only " one of the editors" of the Post, in- stead of tJie editor, us you uro so well known to be. Mr. Greeley is the editor of hin paper, and, us such, endorses the opinions, given editorially, of tho many geiitluiiion by whom he is aided. So, too, is it with your- self; and tho rule uf looking to the endorser when the drawer cannot be found, aprdicH in this case as fully as it can do in that of a promis- sory note, bo far an 1 can recollect, the editor of the Tribune has never shrunk from any Huoh responsibility — having repeatedly replied, oyer his own signaturu, to papers addressed to himself in reference to editorials that ho had publiHliou. Quito sure I am, that were you now to cite him before tho world, m I have cited you, demanding an examination of the principles upon whioh ho had based his advocacy of protection, he would most gladly meet yuu — giving to all you had to say the benefit of his enormous circulation, atnf leaving his readers to decide for themselves, after calm porunal of your-arguments. Like you, he might find it quite impossible to glvo to the question all the attention it might demand, but, in that ciiso, hu would, most assuredly, find some one to take his place — becoming respoiislblo, us editor, as fully as if he alone had written. Like him, you are surroundod by persons who have treated this subject on hun- dreds, if not even thousands, of occasions — you making yourself respon- sible for all they havo thus far said; and I am, therefore, at a loss to un- derstand why you should now fail to profit by the admiralile opportunity offered you, for CMtablishing the truth of free-trade doctrines. Can it be, that their advocates dufv nut meet the question ? If so, are they not now placing thoinNolvoH in a situation precisely similar to that so recently described by you, in Hpeakiiig of your Democratic opponents '! m 18 FINANCIAL crises: 10 1 am told, however, that this \n not the principal question of the day. It niaj not bo so with the {leople of your city, but you would greatly err, were you to siippose that such was the case with those of the States south and west of you, and north of Mason and Dixon's line. In this State and Jersey, it is the one, and almost the onli/ quostion. In Ohio, a large majority of the Republican senators are stated to have announced their distinct intention to make it the question. In Illinois, the most influential of all the Republican journals of the State has entirely aban- doned the free-trade doctrines — giving itself now to the advocacy of pro- tection. Throughout the West, the question of the adoption of measures required for the creation of domestic markets, and for the emancipation of the country from the control of British manufacturers, is rapidly taking the place heretofore so exclusively occupied by the anti-slavery one. All of these people may be Avrong, and, if so, they should be set right. That they may be so, I have offered you the use of the columns of protectionist journals, circulating, to the extent of hundreds of thou- sands of copies, among the very persons who are thus in error. That great offer it is that, thus far, you have not accepted. The great question of the day, in your estimation is that of slavery and freedom, and in this we arc entirely agreed. How is it that men may be made more free? That is the question, and it must be answered before we can venture upon action, unless we arc willing to incur the risk of promoting the growth of slavery, while really desiring to advance the cause of freedom. All experience shows, that men have become more free as they have been more and more enabled to work in combina- tion with each other, and that the power of combination grows as em- ployments become more diversified — slavery, on the other hand, growing in all those countries in vvhich men arc becoming more and more limited to the labors of the field. Such being the case, that policy which tends to produce diversification and combination should be the one which would lead to freedom. Which of the two is it, protection or free trade, which tends in that direction ? For an answer to this (juestion, we need but look to Northern and Central Europe — finding there the protective sys- tem in full vigor, and the people rapidly advancing in wealth, strength, freedom, and power. The opposite, or free-trade system, has been in active operation in India, Ireland, Turkey, and other countries, whose people are as rapidly declining towards poverty, slavery, and general demoralization. How, my dear sir, has it been among ourselves ? Turn to the years which followed the abandonment of the protective policy in 181G, and study the rapid growth of pauperism and wretchedness that was then ob- served. Pass on to those which followed the passage of the protec- tive tariffs of 1824 and 1828, and remark the wonderful change towards wealth and freedom that was at once produced. Study next the growth of pauperism and destitution under the compromise tariff", closing with the almost entire paralysis of 1840—42. Pass onward, and examine the action of the tiiriff" of 1842 — remarking the constant increase in the demand for labor — in the production and consumption of iron, and of cotton and woollen goods — and in the strength and power of a community which had so recently been obliged to apply, and that in vain, at all the bank- ing houses of Europe, for the small amount of money that then was TDETR CAUSES AND EFFECTS. 10 needed for carrying on the governnuMit. Look, next, to the repeated crises we have had under the tariffs of 1X4(> and 1S57 — each and all of them tending toward strengthening the rich, while weakening the poor, and promoting a growth of jiauporisin siieh as has never, 1 helieve, been known, in any country of the civilized world, to be aeconiplislied in so brief a period. Such having been the result, the questions now arise, — Whither aro wc tending? Is it not toward slavery for the white laborer '( Those are the questions I have desired to have di,scu.sscd, and whatever you, my dear sir, may think of it, they must be always in order. These, however, as may bo snid, arc mere facts — a sort t}^ politico t arithmetic. Trade should be free, and any facts that may be produced in opposition to that theory, must be such as cannot be relied on That wc should be always going in the direction of freedom of commerce, and freedom of man, 1 fully and freely admit ; but what is the road which leads in that direction? Certainly, not the one on which wc recently have travelle, any previous involveim>nts, on either side, would shrink into utter insignilieanee. NeitluT of us, as it seemed to inc, need he so anxious tt> shim> in (he peet, Yours, very truly, Henry C. Carey. >V. t\ 1'>U\ ANV, V.*\t. ruii..Mn.irHi V. January 24, 1S59. r^ (3) r! TIIKIR .'AI'SHS AM) KI IHTS. 21 LETTER FIFTH. Dear, Sih. — A Inrtni^iht hIiico, you stated, on tlid autliority of Dr. Wynne, that imiiptrisni in the Htato ot' Now York hiul iissiinu'd ))i(t|)ur- tionH relatively 3 families, or about 05 persons each; l!);J with 111 each; 71 others, with 140 each; and, finally, 20, that, as we are told, are the most pi'ofitablc, and that have a total population of no les-s than 5449 souls, or 1S7 to each. AV'hat are the accommodations therein pro- vided for the wretched occupants, is shown in the following picture : "One of the largest nnd most recently built of the New York 'barracks' has apartments for 12() families. It was built especial'y for this use. It stands on a lot 50 by 250 feet, is cntereJ at the sides from alloys eight feet wide, and, liy reason of the vicinity of another barrack of equal height, the rooms are so dark- ened that on a cloudy day it is impossible to read or sew in thorn without artificitil light. It has not one room which can in any way be thoroughly ventilated. The vaults and sewers which are to carry off the filth of the 12G families have prated openings in the alleys, and doorways in the cellars, through which the noisome and deadly miasmata penetrate and poison the dank air of the house and tlio courts. The water-closets for the whole vast establishment are a range of stalls 83 riNANtlAL CIUPEH: witlinnt (loom, mi'l (\ccp?HiMo nnt only fidin tin- Imilillnjr, biitcTon from tlio «(rr«l, Conit'ort is lirn' out of thn rinc-tion : foiiiiin'ii (h-eency Iiiib hpin n'iiil.T«i| itiipiM- Bible ; anil thu lioi riblo bnHiilitios of tlii' |iiii'>'PM)roi-y'hi|) ure duy iiCtrr ilny i<'|iciili'i|, but on a lurn;i'r hciiU". Ami yt, this in a fiiir spfcinieii. Ami lor kiicIi hiijitoim nnil n(ci':^»arily (U'moiali/.inn liuliitaiinnn,— tor two vimuh, Munuh, imU'Ci'Muy, niitl gloom, till) jionr family jmyn- and tim riuh builder rcceivun — •Ihirty-jivi pir eint aummlhj on the cost nf tht apartmnili ." " W'o hiivc licro tho t}po of the systoin tliat is now more niid mom oli. taitiirif^ tbrotifrhoul tho country. Ono fiiiiiiiciul convulsion follow* uii< other, cnch in its turn dosing mills, mines, and furniiccs, iind thilH dcstroyihi,' intcnml commerce. With every step in that direction, our people lire more compelled to seek the cities, and thereby uu^'menlinj; tho power of the rich to dem:ind enormous rents, usurious inl crest, uiid enormous prices for lots — tlieir fortunes growing rapidly, wliile reducfin^ thousands, and tens of thousands, to u state of pauperism and destitution, Is it, however, among the occupants of tenement houses, alone, tliiit wc are to find the fiicts wliich indicate the decline to which I havi) re ferred — a decline which viiiHt ho arrested, if we desire not io find tho end of our great republic is anarchy and despotism? Look around you, and you will see that while our poi»ulation is growing at the rate of u million a-year, there is a daily diminution in the deiiumd for skilhMl labor to be applied to tho conversion of raw materials into finished cominodi« tics — a daily diminution of that citnfidenco in the future w)ii(di In w- quired f»)r producing applications of capital to the developuKtut of our groat natural resources — a daily increase in the necessity for h)uking to trade as tho oidy means of obtaining a support — and a conseijuiiiit inoreaso in tlie pri>ii(irliuHS borne by mero middlemen to produeurH, causing increased dcuutnd for sliops, and stores, and uAices, in grotit cities, and enabling landlords to demand the enormous rents wliieh now are paid. Tho poor tenant slaves and starves, and finds himself at length driven to bankruptcy because liis profits, after liis rent \n itaid, arc not enough to enable him to feed and clothe his wife and (diihhcn — he and they being then driven to peek refuge in a " tenement house," there to pay a rent that enables its rich owner to double liis capital iti almost every other year. The rich arc thus made richer, while pauper- isni and crime advance with the gigantic strides you have des(!ribed, Is it, however, in your city alone that facts like these present thoni* selves to view ? That such is not the case, is shown in the following accurate sketch of tlie Philadelphia movement in the same dlrucUuil; given- a few days siuce, by your neighbors of the Tribune: '•P ertyhas reached bip;ber places in society than the habitually dontltutP, Want of employment with many, and reduceil wajtes with others, all Riowiiiij; oiit of the warfare of the government on the industry of the country, havo madu lli« present season ono of peculiar h.ardship and sufl'erin^. Honest labor goon willuuit its loaf, because no one can afford to employ it. 1'er.sons formerly able to KU|ip(n't themselves decently, are now crowding for relief to our benevolent inNlitiHIniiH, The visitors of the latter say there is more suffering now than ever before known. Clothing, food, and fuel are dui'y given in large amounts, and yet the cry of din- tress continues. The soup-houses have been compelled to reopen, and tliu «li«» ritable are taxed to the utmost. These suffering thousands are the viuliiiiH of (ho Bcandulous misgovernment which bus palsied the energies of so many braauho* of industry. They would gladly earu their bread, if permitted to do no," TIIF.IR rAUSEM AND EKFECTM. 2.1 All th'iH iH Htrictly fruo, iirid It woiiM, jim 1 Miik, hv. (••nially ho if nnid of any other city of tlu! I'liioii — tlic wli<)l(! incxciniiif.' a picture of en- forced idloiiosH hiioIi iin in not, at this inonu'ut, to lie parallclt'd in uviy country cluiining to rank as civilizt'd. I'ass next, if you jpjca.xc, outward from our cities, and look to the towuH and villages of your own and Other States — marking the fact, that the {)ow(!r of local eouihination in fitcadily diminishing, am\ that u majority of them have eitlu-r bceoniu Btationary, or liavo retrograded. Clo almost where you may, you will find that tho internal commerce of the country is gradually dolining — that tho 8ervice8 of mechanics are meeting less and less demand — that the dcpcndonco on great cities is increasing in the same proportion that thoso cities aro themselves heeoming more dependent upon Liverpool and Manchester— and that, as u necessary consecpienec, paup<'rism and crime are everywhere assuming ]»roportions so gigantic us well to warrant you in tho assertion that their growth is now so vigorous as to hid delianee to "all half measures of eradication." How may they bo eradicated 1' This is a great (juestiun ; but to find the answer to it, wo must first incjulrc to what it is that surh a growth in due. ])oing this, we find that the I'acts of the pre.^ent day are in strict accordance with those ob.served in the years which iollowed the terrible free-trade crises of 181.S-20 and 18;]7— 10, as \vell as with tliose observed in Ireland, India, and all other countries subjeet to the liritish free-trade system. Jjooking nisxt to the periods which Iollowed the pas- sage of the protective acts of l!^2S and 1H42, we find directly the reverse of this — pauperism then steadily declining, and the morals of the com- munity improving as the societary movement became more regular. Turn- ing thence toward Northern and Central Europe — toward that portion of tho Kastern world which steadily resists the exhaustive British sys- tem — we find phenomena corresponding precisely with tluLSC ob.served in our own protective periods — the demand for human service becoming more and more regular in France and (lermany, and the reward of labor growing with a steadiness that has rarely, if ever, been exceeded. — Such being tho facts, Is it not clear, my dear sir, that it is to the readoption of the protective policy we must look for effectual '' measures of eradi- cation." Believe me, nothing short of this will do. The readers of the Journal of Cummrrcc have lately been assured " that our institutions nurture the evils in question." Were that really the case, the evil would be so radical in charaeter, that nothing short of revolution could produce the change desired. That, happily, it is not 80, you will, I think, be well assured, when you shall have refiected that all our institutions find their foundation in local dcvclopinoiit, tending to the creation of thrivii.g towns and villages in the neighborhood of our vast deposits of coal and lead, copper, zinc, and iron — there making u market for the products of agriculture, and giving occasion to the improvement of our great water powers, to bo used in the conversion of food and wool into cloth, and food, coal, and ore, into knives and axes, steam-engines and railroad bars. — What now is the object for whose attainment our people seek protection ? Is it nut this very local- ization in which alone our institutions find their base 'f That such is the case is beyond all question, and therefore is it, that confidence in those 24 FINANCIAL crises; i institutions grows in every period of protection — pauperism and crime then declininnd of freedom should aid in the effort to rescue his countrymen from the grasp of foreign traders in which they are now held ? That every movement in that direction must tend toward diminution in the quantity of wretchedness and crime ? And, therefore, That all who oppose such action — teaching British free-trade doc- trines arc thereby making themselves responsible, before God and man, for the demoralization above described ? Repeating, once again, my offer to place jour replies to these ques- tions within the reach oi' a million and a half of protectionist readers, I remain, my dear sir, YcYj respectfully, your obedient servant, Henry 0. Carey. W. C. Bryant, Esq. rniLADKUUiiA, January 31, 18G0. THEIR CAUSES AND EFFECTS. 20 LETTER SIXTH. Dear Sir. — Pauperism, slavery, and crime, as you have seen, fol- low everywhere in the train of the British free-trade system, of wliioh you have been so long the earnest advocate. On the contrary, tin y diminish everywhere, and at all periods, when, in accordance with the advice of the most eminent European economists, that system is cftbct- ually resisted. We, ourselves, are now in the fourteenth year of a troo- trade period — the result exhibiting; itself, as you yourself so recently have shown, in a growth of all that has at length most seriously alarmed the very men to whose unceasing efforts that growth is due. That they should be so is not extraordinary, but their alarm would be much increased were they now to study carefully the condition of affairs at the end of the peaceful and quiet period of protection which closed with 1847, and then contrast with it the state at which we have arrived — following up the examination by asking themselves the question — Whither are we tending? — and seeking to find an answer to it. The picture that would then present itself to view, would so much shock them, that they would shrink back horrified at the idea of the fearful amount of responsibility they, thus far, had incurred. That the facts are such as yon have described them, cannot be denied. Do they, however, flow necessarily from submission to the British sys- tem, miscalled by its advocates the free-trade one — that one which seeks to limit all the nations of the world, outside of England, to the use of the plough and the harrow, and to a single market, that of England, for an outlet for their products ? That they do so, you will, I am sure, be ready to admit, after having reflected that men become rich, free, strong, and moral, in the ratio of their power to associate and combine together, and that the object of the British system, for more than a century past, has been that of preventing combination, by frustrating every attempt at the production of that diversification of pursuits, wiihout which the power of association can have little or no existence. What was the system before the Revolution, and what wore the mea- Bures recommended as being those most likely to promote the retention of the colonists in thoir then existing state of dependence, are fully shown in an English work on the then American Colonies, of much ability, published in London at the time when Franklin was urging upon his countrymen the diversification of their pursuits, as the only road towards real independence, and from which the following is an extract : "The population, from being spread round a grcnt extent of frdnticr, would increase without giving; the least cause of jealousy to Britain ; land would not only be plentiful, but plentiful where our people wanted it, whereas, at present, the population of our colonies, especially the centr; '. ones, is coniineil ; they have spread over all the space between the sea and the mountains, the consoquonce of whici .8, that land is becoming scarce, that which is good having all hvon planted. The people, therefore, find themselves too numerous for the ngricultiire, wliich is the first step to becoming manufacturers, that step Avhich Ihitiiin has so much reason to dread " 26 nNANCIAL CniSES : Why, my dear sir, sliould Britain have so much dreaded combination among her colonial subjects? Why should she so sedulously have sought to disperse thorn over the extensive tracts of land beyond the mountains? Because, the more they scattered the more dependent *hey could be kept, and the more readily they could bo compelled to carry all their rude products to a distant market, tliere to sell them so cheaply, v.s we are told by another distinguished British writer, " that not cue-fourth of the product redounded to their own profit," as a consequence of which plantation mortgages wore most abundant, and the rate of interest charged upon them so very high, as generally to eat the mortgagor out of house and home. In a word, the system of that day, as described by those writers, was almost precisely that of the present hour. For its mainte- nance, dispersion of the population was regarded as indispensable, and that it iiii"^^ht be attained, the course of action here described was re- couiniended : «« Nothing can therefore be more politic than to provide a superabundance of colonics, . take ofl' all those people that find a want of land in our old settle- ments • and it may not be one or two tracts of country that will answer this pur- pose ; provision should be made for the convenience of some, tlie inclination of others, and every measure taken to inform the people of the colonies tliat were growing too populous, that land was plentiful in otlier places, and granted on the easiest terms; and if such inducements were not found sufficient for thinning the country considerably, government should by all means be at the expense of trans- porting them. Notice should be given that sloops would be always ready at Fort Pitt, or as much higher on the Ohio as is navigable, for carrying all furniture without expense, to whatever settlement they chose, on the Ohio or Mississippi. Such measures, or similar ones, would carry off the surplus of population in the central and southern colonies, which have been and will every day be more and more the foundation of manufactures." Having studieJ. ihese recommendations in regard to the maintenance of colonial dependence, I will ask you next to look with me into the working of the British free-trade system, and satisfy yourself that its advocates have been mere instruments of our fouign masters — closing our mills, furnaces, and factories, retarding the development of our great mineral treasures, preventing the utilization of our vast water powers, and in this manner driving our people to the West, in strict accordance with the orders of those British traders against whom our predecessors made the Revolution. In 1815, the receipts from sales of public lands amounted to $1,287,000 This gives a measure of the then existing tendency toward dispersion. Five years later, when the free-trade system had paralyzed the industry of the country, they had risen to $3,274,000 — the customs revenue of the same year yielding more than $20,000,000. The government had seemed to be rich, and for the reason that it was "burning the candle at both ends" — paralyzing domestic commerce, and driving into the wil- derness the people to whose eflForts it had been used to look for its sup- port. Free trade, excitement having been followed by paralysis, we find the customs revenue to have fallen, in 1821, to $13,000,000 — the land revenue at the same time gradually declining until, in 1823, it stood at less than a single million. As a conse(|uencc, we see the treasury to have been so much embarrassed as to be under the necessity of con- tracting loans, in the period from 1819 to 1824, to the extent of no THEIR CAUSES AND EFFECTS. 27 less than $16,000,000. tVs usual, liere and everywhere, poverty, dis- tress, and ('"ibt, to both the people and the government, had followed in the train of the teachings of the men who had desired a readoption of that dispersive policy recommended by British writers, as a means of prolonging colonial dependence. Turn now, if you please, my dear sir, to the picture presented by the protective tariff of 1828, and mark the steadiness of customs receipts, and the gentle and quiet growth of the receipts from lauds, as follows : Customs. Land Sales. Total. 1829 $22,681,000 $1,517,000 $24,198,000 18S0 21,920,000 2,329,000 24,249,000 1831 21,204,000 3,210,000 27,414,000 1832 28,405,000 2.fi23,000 81,068,000 1833 29,032,000 3,967,000 32,999,000 In this period, every man could sell his labor, and could therefore purchase the products yielded to the labor of others. Every one being thus enabled to contribute his^ehare to the support of the government, the revenue bad become so large and steady that the national debt was then extinguished. Pass on now, if you please, to the time when the approaching annihi- lation of protection had stopped the building of mills and the opening of mines, and had recommenced to compel our people to scatter them- selves over the great West, and find the following figures : Customs. Land. Total. 1835 $19,391,000 $14,767,000 $34,148,000 1836 23,409,000 24,877,000 49,286,000 Once again, the government was "burning the candle at both ends" —annihilating the power of combination, and thus diminishing the pro- ductive forces of the country. As before, it fancied itself rich, and acted accordingly — the expenditure of this period almost trebling that of Mr. Adams's administration, then but a few years past. As a consequence, bankruptcy of the people and of the banks was followed by disappear- ance of the power to contribute to the support of government, the cus- toms duties of 1841 having but little exceeded $14,000,000, and the land sales having fallen to $1,300,000 — giving a total of less than $16,000,000, not even one-third of that of 1836, Such having been the case, need we wonder that the poverty of the government should have exhibited itself in the form of irredeemable notes, and in vain efforts to effect a loan in any part of Europe. Having destroyed our domestic commerce, and thus greatly diminished the productive power of the country, our foreign free-trade friends now turned their bucks upon us — denouncing our whole people as rogues and swindlers. Once again, in 1842, we find the readoption of the policy of resistance to British domination, and once again we meet the tranquillity and peace of the period which found its close in 1834, as is shown in the following figures : Customs. Land. Total. 1843-4 $26,183,000 $2,059,000 $28,242,000 1844-5 27,508.000 2,077,000 20,585,000 1845-6 26,712,000 2,694,000 29,406,000 1840-7 23,747,000 2,498,000 20,245,000 28 FINANCIAL crises; i-i m- I' Again, as always under protection, there was economy in the adminis< tration of the government. Again, the necessity for contracting loans had passed away. Again, too, the foreign debt of the free-trade period was being diminished; and why? Because, once again, that colonial policy which looked to the dispersion of our people had been rejected. Not content with the lesson that had thus been taught, the protective policy was again abandoned, and once again we find the colonial system re-established, the results exhibiting themselves in the following remark- able figures, indicating the extent to which the government has recently been repeating the experiment of " burning the candle at both ends " : Customs. Land Sales. Total. 18.53-4 $04,224,000 $8,470,000 $72,004,000 18.54-5 J^:^ ,02.5,000 11,497,000 64,522,000 1855-6 64,; "^000 8,917,009 72,939,000 As before, in every free-trade period, the government wad becoming daily richer, while the productive power^iras declining from day to day. Expenditures, of course, increased — having reached, for those three years, exclusive of interest upon a large public debt, an average of $56,000,000, or nearly five times more than they had been thirty years before. Having thus laid the foundation for a crisis, need we wonder that that crisis came, leaving the government, but recently so rich, in a state of actual bankruptcy, and wholly unable to meet the demands upon it? Certainly not. It was precisely what has happened in every British free- trade country of the world, aud in every free-trade period of our own. In each and every one, our people had been driven out from the older States, and the government had been enabled to take from them, in pay- ment for public lands, the mass of their little capitals, leaving them to borrow at three, four, or five per cent, j7e>' month, of the wealthy capi- talist, all that had been required to pay for their impi-ovements — and finally leaving them in the hands of the sheriff", under whose hammer their property had sold so cheaply as almost to forbid the purchase of lands that were as yet public and unimproved. The receipts from that source are now estimated at $2,000,000, and thus have we returned to a point that is really lower — our numbers being considered — than that at which we arrived at the close of the British free-trade speculations of 1817-lS and 1836-39. Looking at all these facta, my dear sir, is it not clear — That the system which you advocato, ar i which has usurped the free- trade name, is but a return to that colonial one described in the passages above submitted for your perusal ? That it has for its object the destruction of the power of combination, and consequent diminution of the ability to produce commodities in which to trade ? That, as a necessary consequence, it tends to produce a growing de- pendence of both the people and the State upon foreign traders and foreign bankers? That to its present long continuance is due the fact, that British jour- nalists now speculate upon " the recovery of that influcnc ^ which eighty years ago England was supposed to have lost" ? TIIETtt CAUSES AND EFFECTS. $$ That tlio tiimU-noy toward recolonization is growing with every hour, and that with mah Hiicoessive one, we are more and more becoming more toolH in tho hntuU of British traders? ** That, tljordlon!, it in the duty of every friend of freedom and inde- pondoiico to lend IiIh aid to the re-establishment of that protective sys- tem under which tlio country so much advanced in prosperity and power, in the poriodH which closed in 181G, 1834, and 1847? llcpctttinj; tlu! ]ir()poMitiijn, already so often made, to have your answers to these (jucHtidiiH pliieed before a million and a half of protectionist readers, 1 rcniuin, my dear sir, with great respect, Your obedient servant, Henuy C. Carey. W. C. lijlVANT, Khq. PHiLADELrniA, February 7, 186flt 80 FINANCIAL crises: LETTER SEVENTH. Dear Sir. — The ossontial ohjoct of the British system, as you have already soon, is the suppression, in every country of the world, outside of Britain, of thiit diversity of human emjdoyments, without which there can be made no single step toward freedom. The more that objcict can be achieved, the more must other nations be compelled to export their products, and in their rudest shape, to Britain — doing go in direct opposition to tlie advice of Adam Smith. — This is what is called British free trade, the base of which is found in that annihilation of domestic commerce, whose effects exhibit themselves in the poverty, wretchedness, and crime of India, Ireland, Turkey, and other countries subjected to the system, all of which are so well reproduced among our- selves in every British free trade period. Ileal freedom of commerce consists in going where you will — exporting finished commodities to every portion of the world. Seeking that freedom, the most eminent French economists, as you have already seen, have held that it waa "only the accomplishment of a posit'. e duty" for governments "so to act as to favor the taking possession of all the branches of industry whose acquisition is favored by the nature of things," and that when they failed to do so, they made " a great mistake." In full accordance with the idea thus expressed, the French Govern- ment has adhered to the policy of protection with a steadiness without example — the groat result exhibiting itself in an export of the products of agriculture, in a finished form, such as can nowhere else be found. Thus protecting domestic commerce, the government finds itself repaid in the power to obtain revenue from a foreign conmierce that has quad- rupled in the short space of thirty years — the $100,000,000 of 1830 having been re))laced by the almost $100,000,000 of each of the last three years — the population meantime having remained almost station- ary. As a conso([uence of ihis the rewai'd of labor has much increased, the people have become more free, and the State has grown in influence with a rapidity unknown elsewhere. That it is to industrial dovelo})ment we are to look for the creation of a real agriculture, can now be no longer doubted — the Emperor having, in his rocont letter, told his finance minister, tliat " witliout a prosperous industry agriculture itself remains in its infancy;" that "it is necessary to liberate industry I'njin all internal impedinicnts," and thereby " im- prove our agrioulturo;" and that in so doing the govornmcnt will be " creating a national wealth " and diftusiii"; " comforts anion"; the workin":- classes. Nothing more accurate than this could have been said by the great Colbert himsoli^ — the man to whose labors Franco was first indebted for the relief of her (lomostie coinmorce from the pressure of internal restric- tions and external warfare. Compare it, however, 1 pray you, with our policy, errunouusly styled the free trade one, every portion of which 1 Til Kin CAUSES AND EFFECTS. 31 BCcmH to havo liinl Cor itM objoot the croatinn of iinpodimcnts to domestic coininereo, nnd tlin Miilijii^ntion reat mineral treasures, and those engaged in introducing, extending, and per- i'eeting works of CDUversion, and thereby giving the farmer a market ibr his products, have been regarded as enemies, deserving only of the hatred of the government; as men for the accomplishment of whose ruin I'raud and falsehood might justly be resorted to — the holiness of the end sanctifying the employment of any means that might be used. Adopting these ideas, the Kmperor assures his minister that he will find in them the road toward real freedom of trade — the great exten- sion of commerce producing a necessity for " successive reductions of the duty on articles of great consumption, as also the substitution of pro- tecting duties ibr the prohibitive system which limits our commercial relations." — Having read this, do me the favor to turn to the period of the jtrotcetive tariff' of ISliS, and find there precisely the state of things here described — the great increase of revenue having then produced a necessity for abo]isliii;g the duties that had always thus far been paid })y tea and cttff'ee. Look, next, to the working of that dispersive system, which scatters our population over the continent, and destroys the power of combination — at one moment filling the treasury to repletion by means of custom-house receipts and sales of public lands, and then leaving it bankrupt, to seek, as was done in 1842, and is now being done, for loans abroad, to keep the wacels of government in motion until the tariff" can be raised. The policy of the French Government was accurately defined, some three or four years since, by the President of the Council, and there is nothing in the Emperor's letter that is not in strict accordance with the determination then expressed, as follows : " The Government formnlly rejects tlic principle of free trade, as incompatible with tlie inilepcnJenco and sccmity of a great nation, and as destructive of her noblest manufactures. No doubt, our customs-tariffs contain useless and anti- quated prohibitions, and wo thinli tliey must bo removed. Protection, however, is necessary to our manufactures. This protection must not be blind, unchange- able, or excessive ; but the principle of it must be firmly maintaiucd." We are told, however, that a treaty has been signed, in which there are great advances toward freedom of trade. If so, it does but prove the perfect accuracy of M. Chevalier, who is said to have been the French negociator, in regarding protection of the domestic commerce as the real and certain mode of reaching freedom of intercourse with foreign nations. " In every country," as he has told his readers, " there arises a necessity for acclimating among its people the principal branches of industry" — agriculture alone becoming insufficient. "Every commu- nity, considerable in numbers, and occupying an extensive territory," is therefore, as he thinks, " v.ell insjiired, when seeing to the establish- THKia CAUSES AND EFFECTS. 83 ment, among its members, of diversity in tlie modes of cniploymoiit. From the moment that it approaches maturity, it should seek to prepare itsolf therefor, and when it fails to do so, it makes a great mistake." This " combination of varied effort," as ho continues, " is not only pro- motive of general prosperity, but it is the condition of national proj^ress." Elsewhere, ho says, that " governments arc, in effect, the personification of nations, and it is required that they should exercise their influence in the direction indicated by tho general interest, properly studied and carefully appreciated." Therefore docs he "regard a.s excellent, tho desire of some of the most eminent men of the principal nations of Europe to establish around them tho various branches of manufactures." Such being the latest views of tho present leading free-trade writer of France, we may, I think, feel quite assured that what ho may now liave done, is only what he has regarded as warranted by the advanced position occupied by French manufactures — that position having been attained by means of a steady pursuit of the protective policy. It in the point at which we have ourselves arrived in reference to every branch of manufacture that has found itself efficiently protected in tlic domestic market, whether by the particular circumstances of the case, or by aid of revenue laws. More steadily than to any other, was protec- tion given to the production of coarse cottons, and hence it is, that we now export them. Tho newspaper is protected by locality, and that protection is absolute and complete ; and hence it i ., that we have now the cheapest journals in the world. The piano manufacture is protected by climate; and therefore it is, that it has attained a development ex- ceeding that of any other country. Had iron been as well protected, our annual product would count by millions of tons, and we should be now exporting, in tl'o forms of iron, and manufactures of iron, a quan- tity of food twico greater than that we send to Europe. All our expe- rience shows, that tho more perfect the security of the manufacturer in the domestic market, the greater is the tendency to that increase of competition needed for enabling us soon to commence the work of sup- plying the exterior world. In your notice of the changes now proposed in the French commercial system, you speak in terms of high approval of Mons. Chevalier, as a " zealous adversary of commercial restrictions," but have you ever, my dear sir, taught the doctrines of the teacher of whom you now so much approve ? Have you ever told your readers, — That "every community is well-inspired when seeing to the establi.-^h- ment among its membcns, of diversity in the modes of employment '":' That " combination of varied effort is the condition of national pro- " 9 gress That " every nation, therefore, owes it to itself to seek the establish- ment i>f diversification in the pursuits of its people, as (jlermany and England have already done in regard to cottons and wt)ollens, and as France has done in reference to so many, and so widely-different kinds of manufacturing industry"? That "governments are in effect, the personification of nations, and should exercise their influence in the direction of the general interest, properly studied and fully appreciated"!'' And, therefore That " it is only the accompli.^bmcnt of a positive duty so to act, at 3 34 FINANCIAL crises: each epoch In the pro^jross of a niition, as to favor the takiii*^ posscHsion of all the branches of industry wliosc accjuiwitiou is authorized by the nature of things"? Unhappily, such have not been the teachings of the Poxt. Had they been yuch — had your journal sustained the pulicy advocated by JMoiis. (Jhevalier, as hero established at the date of the fearful tinancial crisis of 1842, should wc not, even at this time, have been far advanced toward that position in which wc could feel tliat protection would cease to bo required ? Unfortunately, it has taught the reverse of this — the results exhibiting themselves in a constant succession of financial crises, iind paralyses of the most fearful kind — in repeated bankruptcies of tho treasury, of banks, railroad companies, and merchants — in an almost entire destruction of confidence — in the subjugation of tho poor bor- rower to the rich money-lender, to an extent unparalleled in any civi- lized country of the world — and in a growth of pauperism, slavery, and crime, that must be arrested if wc would not see a perfection of anarchy established as being the condition of our national existence. Had you and others taught the doctrines of M. Chevalier, would such be now the state of things in a country so richly cndowd by nature as our own ? Not having taught them, and sucli having been the results of your past teachings, is it not now your duty, as a man, as a lover of liberty, and as a Christian, to study anew the doctrines of tho economist you have so much commended, and satisfy yourself that you have been steadily advocating the extension of slavery while desiring to be tho advocate of freedom? Hoping that you may conclude to furnisl answers to these questions, and reiterating the assurance that they shall have the largest circulation aiMong the advocates of protection, 1 remain, my dear sir, Yours, very truly, Henry C. Carey. W. C. Bbyant, Esq. PiiiLADELrniA, February 14, 1860. ,ri TIIKIK CALbt!" AM> I-IHICTS. 35 LETTER EIGHTH. Pkar Sin, — Fur (Ik^ tnaititciianco of {'(ilniuMl (](>pon(l(iioo, nnd for the periK'tuatioii ol" puwor to coiufn!! tlio CDlcmists to nmko fluir rxcliaiiui'rt in a fovi'ijin iiinrkct f'nmi wliich tlicy wurc allowed to ciirry away I'Ut oiu'- Iburth (if tlu! ival ymIuo of their jirodiiets, it vas, as yuu have already focn, held that they .should ho led to disperse themselves tliroiiuhout tho "West — thereby aliiinst aniiihilatiiiL' that power of assoeiatioii wliieli, as then was feared, nii^lit leat' to such increase of wealth and streiij^th n.s would forward tho cause of indopcndenco. For the acconipll-lmient of that groat object, the aid of <;overnnient was then invoked — its help being needed lor providing lands and means of transjiortation. Since then, the British free trade system lias been cmjiloyed to do tin; work, its mode of action being that one so well described in a Parliamentary document now but a few years old, the Jbllowing extract from which is here submitted for your perusal : " The laboring classes generally, in tlie manufacturing districts of this country, iinil especially in tlio iron and comI districts, are vciy little aw.nro of the cNtont to which they are often iiulebtcd for their l)f;iiig eaiiiloycil at all to tlie iimiienso losses which tlieir cniiiloycrs voltiiitarily incur in hml times, in order to thslroy foreign conipeliti"n, and to ijain ami keep posnes/iion of forfiyn markets. Aallieiitio instances are well known of employers iinviiig in siioh times carried on their works at a loss amounting in the aggregiite to three or four hundred thousand jionnds in the course of three or four years. If tho efforts of those who oiicournge the com- binations to restrict tho amoinit of labor and to produce strikes were to bo suc- cessful for any length of time, the great accumulations of capital could no longer bo made which enable a few of the iiKml n-falthy capitalists to overwhelm all foreign competiiion in times of great depression, and thus to clear the way for tho ivhule trade to Step in when prices revive, nnd to carry on a great business before foreign capital ■ in again accumulate to such an extent as to bo able to establish a com- petition in prices with any chance of success. The large capitals of this country are the great instruments of tvarfure against the compciing capital of foreign cotintries, and are the most essential instruments now remaining by which our manufaeturuig supremacy can be niaintaineil ; the other elements — cheap lalior, abundance of raw materials, means of communication, and skilled labor — being rapidly iu p\'Q. cess of being eijuclized." Tho system here so admirably described, is very properly charactonzed as being a " warfare ;" and it nniy now be proper to inquire- for what purposes, and against wdiom, it is wagcHl. It is a war, as you see, my dear sir, for cheapening all the cominodities we have to sell, labor and raw materials — being precisely the object sought to be accomplished by that "Mercantile System," whose error was so well exposed in tlio Wealth of JVatiuiix. It is a war for compelling tho people of all other lands to confine themselves to agriculture — for preventing the divcrsilieation of employments in other countries — for retarding tho development f>f intellect — for palsying every movement, elsewhere, looking to the utili- zation of the metallic treasures of the earth — for increasing the dithculty of obtaining iron — for diiuiniiihiug the dcnumd for labor — for doing all fiO riNANTUT, cnisEH: tlioso thing's at. homo and al>roa«l — and for, in tliis manner, Hiilijrcliii;^ all the tnrMicrs and {dantiMS ol' the wurld tu the dumiiiation nl' ihii iiiiMinractun'rH of Britain. How «nir govtrnuii'nt co-oju'ratci^ in this watTaro upiin its iicoph*, iinrl in tlio jiniinntion ui' tlic great work of reeolnni/atinn, will readily', my dear sir, l)i> undersludd hy all who .shall study the British [jreseriptioii given in a former letter, and shall then eom[»arc it with the t'oin>i) i)f aetion here, under your advice, so steadily jiursued — exiiemling, an wo have done, and now are seekin;;' to do, enormous sums, and even carrying on distant wars, for the ae(|ui>ition of further territory — making largti grants of land for facilitating the construction of roatls and the iiiH|)i'i'. sioii of our peo)ili' — forcing millions of acres ujion lln; markt't, and then rejoicing over the receipts, as if they furnislu'd evidence ul' increuhing Rtrength, and not of growing weakness — wasting the jiroceeds in polill- cal johs of the most disgraceful kind, and in this manner produeing financial crises that close our mines, furnaces, and mills, and drivti our people to seek a refuge in the wilderness, there to ])ay the speenlalor trehio price for land — and thus enahling liim to demand three, lour, or five ]ier cent /nr mimth, for tlie use of Honie small amount of ca])ital to aid in clearing the land thus purchased, and in erecting thn little dwelling. — The house huilt, and the fiirm commeneifd, next eonicH the sheriff, aiul hy his aid the poor colonist is now driven to seiik ii ru'W refuge in some yet mure distant territory — in full neeordaneu with tho desires of those of our free trade friends abroad, who Heu in tivery attempt at combination a stc}» toward manufactures — " that «tep whieli Britain has so mueli cause to dread." That such are the facts presented by our records cannot ho denied. Having .studied them with the attention tlicy demand, you will, my dear sir, bo in a position to answer to yourself, even if not to me, tho (jmiHtioii — Poos the history of tho world, in any of its pages, exhibit wvidencu of tlic existence elsewhere of .so powerful a combination I'or tho pro- motion of that pauperism and crime, whose cxtraordimiry growtji you have so well described? So far as my knowledge of liistory cxtendn, it warrants me in saying, that no such evidence can be presented. Tho poor colonist, thus driven out, .suffers under a tax for tranHporlii- tion that, if continued, must for ever keep him poor. His need fop better roads is great, but of power to assist himself ho has nontt what- ever. His distant masters may, perhaps, be induced to grant him help — knowing, as they ilo, that each new road will act as a feeder of their coffers, while aiding in the destruction of tho powers >i.' the soil, in llin further scattering of their subjects, and in rnorc firmly establishing their own security against the adoption of any measures tending to I he pro- motion of industrial indeiicndeiice. liands are now mortgaged, and nl enormous rates of interest, as the only mode of obtaining tho nieaiirt with which to commence the road. The work half made, it becomes next needful to raise the means with which to finish it, and bonds urn ntiw created, bearing six, eight, or ten per cent interest, to bo given at) enormous discounts, in exchange for iron so poor in ouality that it. would find a market nowhere else — its wear and tear being such uh must prove destructive to its unhappy purcha.scr. Under such eirciim- stanccs the road fails to pay, and it passes into the hands of mortj^ayueM, TIIKia I'AUSKM AND EFFECTS. 31 loavlii;: tluwo liy whom tlio work was HtarN-il, poonT tlitui iHsfore — tlicir lands bfiii^ ht-avily inortiramMl, and tlicy thciiisclvt's btinjr at last driven out of hoiisj> and lioinc. Smli is (lie hi^tury ol" most of tlic |>itsui)s win) have t'oiitrihuti'd toward tho oonimcnci'mcntH of the road and ciinal improvements of wliieli we so niiieh boust, and such the liistory ol' the roads themselves — '"leli and every financial crisis caiisini,' riiilhcr iilisiirption of American .ailroad property hy Knj^lish b(»ndhi>lders, as has been already done iti reference to the Keading, Krie, und so many other roatls. Must this cojitinuo to bo so? Tt must, and for thn reason, that our whole policy teiwls toward the annihilation of local action and domestic! coiiimerce — that commerce in the abst;ncc cd" which railroads can never be made to pay interest on the debts to tho contraction of which their owners have been driven. The f^reatt'r their dependence ujioii distant trade, the more imj)erativo becomes, from day to day, the necessity for fi^htinj; for it — for adopting measures tendinis' to the further destruc- tion of local traihc — and i'or thus rciideriiii; more and mere certain tho ultimate ruin of nearly every railroad company of tho I'nion. How is it with yourselves — with the people of yuur Slate? ]5ut u short time eince, wo were assured that a barrel cd' flour could bo transported to ynur city from Kuchestcr at less cost than from I'tica — from Huflalo more cheaply than from l{ochcster — from Cleveland for less than from Uufl'ulo — and from Chicago more cheaply than from Cleveland — your railroad cimipanies thus ottering large bounties on the abandonment of tho soil of tho State, and thereby aiding our foreign masters in the ac- complishment of tho dispersion of our people. So is it in this State of 1*0* isylvania — through freight being carried at less than cost, while don.ostie comnuTce is taxed for the payment of losses, interest, salaries, mid dividentls. — In all this there is a tyranny of trade that has at length become so entirely insupportable, that the farmers of tho older States are now clamorous for measures of relief — urging upon their rc- ppective legislatures the adoption of laws in virtue of which they shall be relieved from a tax of transportation that is destroying the value ol' their land and labor, and that must result in the cripi)ling ol' all tho Atlantic States, as well as of some of tho older of their Western neighbors. To such demand on tho part of yfuir farmers, you, however, re)i1y, that it would be " legislation against trade" — that '• nothing could Le more impolitic than this process" — that "The citizen'^ of T^ultiniore nml rhiln>lclpliia, if llioy . system is one of universal discord is proved by the commerce of India, Ireland, Turkey, and all other countries subject to it, and by our own, in every period of its existence. That opposition to it is productive of liarniony, force, and strength, is shown in the movements of Germany, France, and every other country that looks to the development of internal commerce as furnishing the real base of an extended intercourse with other nations. Turn, if you please, to the recent letter of the French Emperor, and find him telling his finance minister that— - "One of the greatest services to be rendered to the country is to facilitate the transport of articles of first necessity to agriculture and industry. With this object, the Minister of I'liblic Works will cause to be executed as promptly as possible the means of communication, canals, roads, and railways, whose main object will be to convey coal and manure to the districts where the wants of pro- duction require them, and will endeavor to reduce the tariffs by establishing an equitable competition between the canals and railways." Compare with this the teachings of the Post, and j'ou will find the latter saying directly the reverse — txhibiting the advantage of sendino- to England all our products in their rudest forms, thus losing the THEIR CAUSES AND EFFECTS. 80 manure, and dilvinj!; our people to the West, there to find a constant increase in the ncce.ssity for roads, accompanied by as constant decrease in the power to make tlicni. — That done, allow me to as^k your attention to the steady growth of harmony in the interests of railroad owners, farmers, and niaiiufacturers, exhibited in the following figu' es repre- senting the receipts of Trench railroads in recent years : Total Receipts. Beceipks per Kilometer. Friiuca. 1857 1858 311,608,012 45,259 335,230,015 41,398 The year following the great financial crisis exhibits, thus, a larger receipt than that by which it had been proceeded. — Look now to the receipts of the first half of the two past years, as follows, and mark the great increase that has since been made — Totftl Receipts. Francs. Receipts per Kilometer. Francs. 1858 1859 148,955,578 19,.S05 181,095,004 20,G99 Compare, I pray you, my dear sir, the movement thus indicated with that exhibited among ourselves in the past three years, and you will have little difficulty in comprehending why it is, that our railroad cnr^ ■ panics, like our farmers and manufacturers, our miners and our ship- owners, are now being ruined — the 81200,000,000 expended in their construction havini; at this moment a market value that can scarcely ex- ceed, even if it equal, $400,000,000. Looking at all these facts, is it not certain, my dear sir, — That the free trade system of which you are the advocate is one of universal discord ? That it tends to the involvement of men of all pursuits in life, and of the Union itself, in one great and universal ruin ? And, therefore, That it is to the intcest of the railroad proprie' )r to unite with the farmer in promoting the adoption of measures having for their object the development of our mineral wealth, the creation of a real agricul- ture, and the extension of domestic commerce ? Hoping for replies to these questions, and ready to give them cir- culation among millioiis of protectionist readers, I remain, with much respect, Yours, very truly, Heniiy C. Carey. W. C. Bryant, Esq. PuiLADEtPniA, February 20, 1860. I 40 FINANCIAL crises: hi LETTER NINTH. From (he Evening Post, Tuesday, February 2\st. "An ATTEMrT to Revive an Old AnrsE. — It is intimated, we know not on what authority, that the Cumiuittec of Ways and Means are about to report a bill to the House of Rcpresentntivcs, with tlie view of carrying into eifcct Mr. Bucha- nan's reconmieiidation to return to the old system of specific duties, " If this be so, our aged President, who has been worrying about specific duties ever since he took the Executive chair, will undoubtedly enjoy a slight sense of relief. For our part, we should be perfectly willing to sec him gratified in this respect, if the measure suggested did not imply an impeachment of the good sense of tlie committee by whom the bill is said to be preparing, and if the return to specific duties were not simply a device to increase the burdens of the people. The mill-owners are not satisfied with their profits; they do not make money enough by selling their merchandize, and they call for specific duties to enable them to extract a more liberal revenue from those with whom they deal. »' This is the plain English of the clamor for specific duties. The consumers do not w t them, do not ask for them, are satisfied with the present method of col- lecting the duties by a percentage on the value of the goods imported; the only change they wish for is that the duties should be made lighter. Only the frater- nity of mill-owners, shareholders in manufacturing corporations, capitalists who are anxious, as all capitalists naturally arc, to make what they possess more pro- ductive than it noAV is, ask for the imposition of specific duties. They have not the face to ask for a direct increase of the duties as they now stand ; they are afraid to demand that a tax of fifteen per cent on imported merchandize shall be raised to twenty per cent, or a duty of twenty to one of twenty-five or thirty. The country would cry shame on any such change. They, therefore, get at the same thing indirectly; they wrap up the increase of taxation in the disguise of specific duties ; the consumer is made to pay more, but being made to pay it under the name of specific duties, the increase is of such a nature that it will be apparent only to an expert mercantile calculator. The consumer finds that the commodity he needs bears a higher price, but he is mystified by the system of specific duties, and does not know that the increase of price is a tribute which he is forced to pay to the mill-owners. " That class of men who own our manufacturing establishments have had pos- session of the legislative power of the country long enough. It is quite time that the committees of Congress, and those who vote on the schemes laid before them by those committees, should begin to consult the wishes of the people. It is high time that they should begin to ask, not what will satisfy the owners of forges, and foundries, and coal-mines, and cotton-mills, and woollen-mills, but what is just and fair to those who use the iron, and warm their habitations with the coal, and wear the woollens and the cottons. This is not done; the lords of the mills speak through tt)e mouth of the President of the Republic and call for specific duties, and now we are told that they are dictating a bill to the Committee of Ways and Means. " Great apprehensions have been entertained by many persons, both here and abroad, lest minorities should be oppressed in our country by unjust laws passed in obedience to the demand of the mass of the people. We received, not long since, a letter from England, rn which great anxiety was expressed lest this should lead to the downfall of our government. Hitherto, however, the people in this country have been oppressed by powerful and compact minorities. Laying aside the fact that small classes of men, united by a very perfect mutual understanding, and wielding large capitals, too often domineer in our State legislatures, it is 1 TIIKIR CAUSES AND EFFECTS. 41 certain that the revenue laws of this country hnvo, for mnr\y vonrs pnpt, been frnmed by a minority. The mill-owners liiive ilictiitpd tlio wliole systciu of indi- rect taxation, ever since the last war with (Jreat IJritain, and tlie utmost we have been able to obtain in the struggle agaiti^it tlieir supremacy has been some miti- gation, some relaxation of the protective system — never a comjilete release from it. The oligarchy of slaveholders, scarcely more numerous than that of the mill- owners, and 'equally bound together by a common interest and concei'tod plans of action, have held the principal public offices, interpreted the laws, and swayed the domestic policy of the country with a more and more rigorous control for many years past. AVe are engaged in a struggle with that oligarcliy now; but we have no idea of allowing the other oligarcliy of mill-owners, while we are thus engaged, to step in and raise the tribute-money we pay them to tlic old rates. What we have wrested from their tenacious grasp we shall keep, if possible. ♦' Other governments are breaking the fetters which have restrained their peaceful intercourse with each other, and adopting a more enlightened system — a system which is the best and surest pledge of enduring amity and peace between nations. England and France are engaged in putting an end to the illiberal and mutually mischievous prohibitive system in their commerce with each other. It will dishonor us in the eyes of the civilized world if we, who boast of the freedom of our institutions and the wisdom of our legislation, should in the meantime be seen picking up the broken fetters of that system, and putting them into the hands of artisans at Washington to forge them again into handcutfs for our wrists. If any such bill as is threatened should be introduced into Congvp^s by the Com- mittee of Ways and Means, we trust that the Republicans of the Western States will be ready to assist in giving it its death-blow. If it do not meet its quietus from them, it will probably be rejected, as it will richly deserve, in the Senate, and Mr. Buchanan will never have the satisfaction of giving it his signature." Dear Sir : — You have been invited to lay before your readers the arguments in favor of such a change in our counuercial policy as should tend to produce diversification in the demand for human service, thereby increasing the power of association and the productiveness of labor, while relieving our farmers from a tax of transportation ten times more oppressive than all the taxes required for the support of European fleets and armies — that invitation having been given in the hope that by its acceptance you would make manifest your willingness to permit your readers to sec both sides — your entire confidence in the accuracy of the economical doctrines of which you have been so long the earnest advocate — and your disposition to espouse th(> cause of truth, on what- Boever side she might be found. That you should have failed to do this has boon to me a cause of much regret, having hoped better things of a lo'Tv of freedom like yourself Resolved, however, that vij/ readers shall ii.vo full opportunity to judge for theniseives, I now, as you see, place V, 'Oiin the reach of the great mass of the protectionists of the Union, tl reply that you have just now published, sincerely hoping that they may give to it the most careful study, and thus enable them- selves to form a correct estimate of the sort of arguments usually adduced in support of that British free trade policy which has for its object tlie limitation of our farmers to a single and distant market for their products — the maintenance of the existing terrific tax of transportation — and the ultimate reduction of our whole people to that state of colonial dependence from which we were rescued by the men who made the revolution. As presented by me, the question we are discussing is not of the prices of cotton goods, but of human freedom, and in that light it 42 FINANCIAL crises: 1-1' I''' W W I I; i t' t is that T liavi' Itoutrcd you should eoiisidor it. In support of that view, I liavo urm'd upon your consideration the facts, tliat every Britisli ^ree trade period has closed with one of those fearful crises whose sad ellects you have so well depicted; that crises have been followed by paralyses of the domestic coiunierce, destroyinjr the demand for labor ; atid that, as a necessary consequence, each such period has been marked, on oiu? side, by a great increase in the number of millionaires, and on the other, by such a growth of pauperisTu that that terrible dis- ease ajtpears now, to use your own words, " like the Canadian thistle, to have settled on our soil, and to have germinated with such vigor, as to defy all half measures to eradicate it." Further, you have been asked to look to the faots, that the reverse of all this has been experienced in every period of the protective system — domestic commerce having then grown rapidly, with constant increase in the demand for labor, and as constant augmentation in the regularity of the socictary action, in the freedom and hap])iness of our people, in the strength of the government, and in the contidence of the world, both at home and abroad, in the stability of our institutions. Such is the view that luxs been presented to you, in the hope and belief that to a lover of freedom like yourself it would be one of the highest interest, and that it would be met and considered in a manner worthy of a statesman and a Christian. Has it been so considered i' To an examination of that question I shall now ask your attention, reserving for a future letter the consideration of the effects of the advalorem system in producing those financial crises whose terrible effects you have so well depicted, and that pauperism and crime ■whose growth you have so much deplored. The experience of the outer world is in full accordance with our own, the whole proving that the tendency toward harmony, peace, and freedom, exists in the direct ratio of the diversity in the demand for human force, and consequent power of combination among the men of whom society is composed. Therefore is it, that the most distinguished economists are found uniting in the idea expressed by T^. Chevalier, the free trader whom you so much admire, that it is only " the accomplislmient of a, positive duty" on the part of governments, so to direct their measures as to facilitate the taking possession of all the various branches of indus- try for which the country has been by nature suited. Such must be the view of every real statesman — recognizing, as such men must, the existence of a perfect harmony in the great and permanent interests of all the various portions of society, laborers and capitalists, producers and consumers, farmers and manufacturers. Of such harmony, however, you give your readers none — consumers of cloth and iron here being told that capitalists "not satisfied with their profits" are anxious to " increase the burdens of the peojjlc ;" that " the fraternity of mill-owners," and they alone, are anxious for a change of system, with increase of taxes ; that " the lords of the mills" are dictating to the Committee of Ways and Means; that "mill-owners have dictated the whole system of indirect taxation ;" and that it is high time fur them now to protest against the further maintenance or extension of the system. Here, as everywhere, you are found in alliance with that British free trade system which . seeks the production of discord, and discord and slavery march always band in hand together through the world. Til Kin CAUSKS AND EFFECTS. 43 ■f )i:. Allow nio now, my aiH past, the wealthy mill owners of New Eiifihmd liuvn hceii o|i|i(i>t:(| to any ehan<;o of system that eonld, by givin;^' inerenHeiJ jiroteetion, tend to augment donu'stie eomjietiiion for the sale of clotli, knowing, ns thciy did, tlmf si'ch comprtltlon muat dc- rrrdnf f/ir I'oHt, iif vhith In llir cmisvinrr. 80 is it now, with tlie wealthy iron master, lie can live, thouj^h all around him may Ite erushed by liritish eomjii'tilioM ; and then, in common with his wealthy IJritish rivals, he ninst. jirolit hy the destruction they have made. iSueh being the facts, ii"d ijnit they are so I can positively assert, are y(ju not, by opiiosini^' proleetivo measures, aidin^;' in the creation among ourselves of a lilthi " o|i;.'ai'idiy of mill owners," whose power to increase the " tribute money" (d' which you no much complain, results directly from the failure of Conjjrertrt H(t to net as to increase domestic competition for the sale of cloth and iron '( The less that competition, the less must bu the re- ward of labor, and the, lar;:,er the proiits of the capitalist, but the greater mrtst 111' the tendency towards jiauperisui and crim», and the less the power to tfonsiimc either cloth or iron. " llithorlo," as you here tell your readers, our people "have been oppressed by powerful ami compact minorities." In this jni are right — a snndl minority of voters in the Southern States having dictated the repeal of the protective tariffs of lSl'8 and ISdli, and having now, with a single and briej' exce]ption, dictated for thirty years both the foreign and donu'htie policy of this country. In 1S40, iiowever, the free peo]dc of our NorthiTii Stat"s, liirmers, mechanics, laborers, and miners — the men who had labor to sell and knew that it commanded better prices in pDtoctive lliaii in i'ree trade times — rose in their mi^dit and hurled from power (his little " oligarchy" of slave owners, then taking for thcm- BclvcH the ])roleelioii which they felt they so greatly needed. That it is, whioli they now seek again to do — desiring once again to free them- selves IVom llio control of that "powerful and compact minority" of Blavcdiohh'rs, under whose iron rule they so long have suifered. Periiiit me imw, mv dear sir, to ask on what side it was you stood, in the great (tontest of l^l'Jl* AVas it with the poor farmer of the North who sought emancipation from the tax of transportation, by the creation of a domcMtie market litr his products ? Was it with the mechanic who pctught the re-opening of the shop in which ho so long had wrought 1* Was it with the laborer whose wife and children were perishing for want of food 'f Was it with the little shopkeeper who found his little capital disappearing nndrr demands for the payment of usurixjus interest ? Was if tint, on the contrary, with that "little oligarchy" of men who owned the laborers they emjiloyed, and opposed the protective policy, because it looked to giving the laborer increased control over the products of his labor':* Wax it vnt with the rich capitalist who desired that labor might be cheap, ami nmney dear? ll'^.s it not witli those foreign ct.pitalists who tlesired that raw materials nught be low in price, and cloth and linen highl' Wim it not with those Uritish statesmen who find in the enormoiiK capitals of Knglish iron masters "the most potent in- BtrunuMits of warfare against tin; competing industry of other countries" 'I To all timsc (jueslions the answers must be in the allirmative, your mmm 44 FINANCIAL crises: m journal liaviiig then stood couspiouous nmong the aJvocatoa of pro- sluvory (loiiiiiiatiori over tho {'vw. laboivrs of the Northern State •' — Wo have now aiiotlicr froo trach; period, when crisis has been foHowed by paralysis, and it may, my dear sir, bo not improper to inquire on what hide it is that you now are placed. Is it by the side of the free laborer who is perishin;^ because of inability to sell his labor ? Is it by that of the pooi" farmer of the West, who tinds himself compelled to pay five per cent, j)er mouth, to the rich ca])ifalist? Is it by -that of the unem- ployed mechanic of the Middle and Northern States? Is it by that of the farmer whose land diminishes in value because of the enormous tax of transportation to which ho is subjected 'Z Is it not, on the contrary, by the side of that " little oligarchy" which holds to the belief that the laborer is " the mud-sill" of society, that slavery for the white man and the bhi'k is the natural order of thinj^s, and that "free society has proved a failure "? For an answer to these (juestions, allow me now to point you to the fact that you have here invoked the aid of a Senate, the control of which is entirely in the hands of that same " oligarchy," for resisting any and every change in our commercial policy asked for by the farmers and laborers of the Northern States. Now, as for thirty years past, your opponents are found among the men who sell their own labor, while your chief allies are tijund in the ranks of those by whom such men are classed as sevl's. Need we wonder, then, that your journal should be always advocating the cause of the millionaires, and thus helping to augment the pauperism and crime whose rapid growth you 60 much lament? The facts being thus so entirely the reverse of what you have stated them to be, is it not, my dear sir, most remarkable — That, after aiding, durii.g so long a period, in the establishment of pro-slavery domination over our domestic and foreign commerce, you should now venture to assert, that " the mill owners have dictated the whole system of indirect taxation, ever since the late war with Great Britain " ? That, the necessity for resort4ng to such mis-statements does not furnish you with proof conclusive of the exceediug weakness of the cause in support of which you are engaged ? 'That, regard for truth does not prompt you to a re-examination of the question, with a view to satisfying yourself that of all tlu; pro-slavery advocates, the Journal of Commrrcc. not excepted, there is not even a single one that has proved more efficient than yourself? Hoping that you may follow my example by giving this letter a place in your columns, and ready to place within the reach of millions of protectionist readers, whatever answer you may sett fit to make, I remain. Yours, very respectfully, IIemiy C. Carey. W. C. Dryant, Esq. ruiLAUELPiiiA, February 28, 1800. TIIEItl CAUSES AND EFFECTS. 45 [LETTER TENTH. Drar Hill, — Allow liic io bog that, you now review with me sonic of the facts thiit tliiiM fur Imvc been presented for your coiuslderation, havintr 5<),0()0 paid to him by the Manchester manufacturers, as com])ensation for his successful efforts at bringing about a repeal of the British corn laws, and of our protective tariff oi" 1842. Why is this ? Why is it, that the proprietors of so many millions of acres, and of a road crossing so many beds of coal and ores of various kinds, are ruined men ? Because the road runs from north to south, and not from east to west, and cannot, therefore, be made a part of any line leading through New York to Liverpool. Because, the value of the land depended upon the development of domestic conmierce — that commerce which " Britain has so much cause to dread." Had the tariff of 1842 continued in existence, the coal of Illinois would long since have been brought into connection with the lead, iron, and copper ores of Missouri, and the country of the lakes, and wjiii the cotton of the South ; and then, all the promises of IMr. Walker, and all the hopes of Mr. Cobden, would have been fully realized. Had, however, that tariff been maintained, the people of Illinois would have made their own roads, and the country would have been spared the disgrace of having ex-Cabinet ministers engaged in the effort to persuade English bankers to lend the money required for their construction. They would have been spared, too, a succession of financial crises, bringing ruin to themselves, while enabling their British free trade friends to denounce them, in conmioji with all their countrymen, as little better than thieves and vagabonds. The less our domestic commerce, the greater is our dependence upon Liverpool and Manchester, and the less our power to construct any road that does not lead in that direction — the general rule being, that north and south roads can never be made to pay. Look to your fiwn State, crossed by two railroads, leading through your city to Liverpool, while your people are being heavily taxed for an enlargement of your canals, which hns for its only object an increase of competition on the part of Western farmers; that increase, too, established at the wry moment when your railroad owners are compelling your farmers to pay all the 48 FINANCIAL GUISES ; losses tlicy im'ur in currying Western pnrluee at less than the more cost of tiaiisjMirtiitioii. J'as.siiig soiitli, )ou find a reniisylvanla road, runni g east and west, to compete with joins, Maryland and Virginia roads to compete with all, and South Carolina and Georgiu roads in- tended to do the same J hut of local roads you find almost none whatever. Why is this ? IJeeause Liverpool is hecomiug more and more the centre of our system, with New York for its jtlace of distribution. Because wo arc fast relapsing into a state of colonization even mure complete than that which existed before the llevolution. For the moment, your city profits by this British free trade policy, the prices of lots rising as the taxation of farming lands augments, but, is it quite certain that her services will always bo re((uired, as dis- tributer of the produce of British looms? May it not be, and that, too, at no distant period, that Manchester and Cincinnati will find it better to dispense with services that recjuire the payment of such ouor- mous sums as arc now rc(iuired for the maintenance of so many thousands of expensive families, the use of so many costly warehouses, and the 1)aynient of such enormous rates of interest? The Grand Trunk Road las already, as we arc told by the Daili/ Times, " RrizeJ upon our Western carrying trade, and linked Chicago and Cincinnati to Portland and Boston by the way of Canada, and on terms which almost defy competition from the trunk lines of Maryland, Pennsylvania, and New York. They are delivering flour and grain in New England, and both domestio and forei;:;n merchandize in Ohio and Illinois, Aeaper than they can be profitably transported via Philadelphia, or New York, or Albany. Not content with this, they have entered into competition with our coasting-trade from the Gulf to the East, and, using that other Anglo-American enterprise just alluded to, the Illinois Central, are delivering cotton from Memphis to the Now England factories chcipur find with more expedition than it can be forwarded by the Mississippi River to New Orleans, and thence by sea to New Y'ork and Boston. Nor have they boon unmindful of their own direct steam communication with England from Quebec and Portland — the last-named point being converted into a mart of British- American commerce by reason of the perpetual lease or virtual ownership by the Grand Trunk Company of the Atlantic and St. Lawrence Railway from Portland to the Victoria Bridge. Th^m are now using the Quebec line of screw 8teamer.s, already one of the most successful between England and this continent, for de- livci'in?; produce from Cincinnati and Chicago at Li\Grfoo\ m twenty days ! — to which end they issue their own responsible bills of lading in the West through to Liverpool. A sample of this operation may be seen in Wall Street almost any day attached to sterling bills of exchange made against breadstuffs and meat and provisions from the West on England. And it is by no means certain that in another year the cotton of Tennessee and North Mississippi will not be made to take the same extraordinary direction, say from the planting States to Manchester through Canada." Such being the case now, at the end of fourteen years of British free trade, what will it be ten or twenty years hence ? Arrangements are already on foot for connecting Southern cities with Liverpool by means of Portland, while, throughout the West, the managers of the road '• have not," as we are farther told, " Fai'cd to effect the needful alliances in the West, to make the connexions at least temporarily complete. The Illinois Central, from Cairo to Chicago, is their natural ally by reason of its English proprietary, and they bridge the peninsula of Michigan by another English work, the Detroit and Milwaukee Railway. As this last connection will not fully answer the designs of the company on '.a 1 TIIKIU CAUSKS AND EFIKCTS. 49 winter and curly spriiiR triulo of tlio Wost, wliilc tlio luki'S arc doBed, it is not iruroHHibJL' tliat nm: ol' tlio oMit Micliinaii roals nmy lie U'lisni, liko ♦ho Atlantic niid St, Lnwrfiico, or iv ciintrolliiiji iiitci'i'st imri'liacuil in it«i .xhiiri'M and niorttfijjps. The Micliif;iiii Southern hu.s hcon niuiiod in this ct>nnci:tinn. bi-caiiHO of its infncnl linunciiil einliarrawNnicnts, which hiivo cheiiin'iifd ulniii>t to a nominal viiluo its stock and bonds, and liccaiisc, too, id' its tcraiinits at Toledo us well as Detroit; tlio former puiut being usHunliul to tho Ciuuiuuati coiuieutiouii uf the tiraud Trunk." The more fr(M(uont and sovcro our finaiieial crises, tlio more iicrfetf, luuHt become tlio control of IJritish tnulora over all our roads, and tho greater the tendency towards diniinution in the necessity lor profiting of tho services of Mew York stores and New York merchants. So, at least, it seems to mo. For seven years past we have talked of the construction of a road to California, but, in tlie present state of our atl'airs, becoming poorer and more embarrassed from year to year, it is nuite impossible that we should ever enter upon such a work. 'J'ho wealth and ])t)wer of ]?ritain, on the contrary, become greater from day to day — all her colonies, ourselves ineliided, being compelled to add to the value of her land and labor, while their own soils become more and more impoverished, and their own laborers are less and less employ(!d. Let our existing commercial policy be maintained, and we shall see the Grand Trunk Koad exlonded to the Pacific — Portland and tjuebec becoming the agents of Liverpool and Manchester, and taking the place now occupied by New York. Looking at all these facts, is it not clear — That all our tendencies arc now in the direction of colonial vassalage ? That, as youi- city has grown at the expense of others, because of its proximity to Liverpool, so other places, furnishing means of communica- tion that are more direct, may profit thereby at its expense ? That as Liverpool has taken the place of New York iu regard to ships, it may soon do so in regard to trade ? And thereibre, That the real and permanent interests of your city are to be promoted by an union of all our people for the re-establishment of that industrial independence which grew so rapidly under the protective tariffs of 1828 and 1842 ?— Begging you to be assured of my continued determination to give to the answers you may make to these questions, the widest circulation among protectionist readers, I remain, my dear sir, Yours, very truly, IIemiy C. Carey. W. C. Bryant, Esq. PiiiLADELPniA, 3farch 6, 1860. w IPINANCUL GRIBES: LETTER ELEVENTH. From the Evening Post, Tuesday, Feb. '2B, •'An F.xampi,b of the Kffect of PnoTKcrioN. — Amonf? the comtnndltlcH wliidh have hitherti) not been pt-rniittiMl to bo brouRht into Franco from Inn-inn couiilrli"H it* cutlery. It is now incliidod in tho list of mcrchaudizo to which tho lutu truiily with Ofciit Hritiiin opens tho ports of Franco. " Those who have miido a comparison of French cutlery with tho cutlery of tho British islands must have been at first surprised at the diflerenco in thH i|iiallty, Nothing can exceed the perfection of workmanship in tho articles turned out from the workshops of SheHield. Tho symmetry ond perfect adaptation of tiiu form, tho oxcellenco of tho material, tlio freedom from flaws, and tho mirror-liko poliNh which distinguish them, have for years past been tho admiration of tlm worhl. French cutlery, placed by its side, has a ruder, rougher appearance, an unlliiJMht'J look, as if the proper tools were wanting to the artisan, or as if it wuh tliu product of a race among whom the useful arts had made less progress. " This is not owing to any parsimony of nature, either in supplying tho mato* rial to be wrought or tho faculties of tho artisan who brings it to a UHufiil Hliiipe. The ores of the French mines yield metal of an excellent quality, and tlm French race is one of the most ingenious and dexterous in tho world. In all manitfau- tures requiring tho nicest precision and the greatest delicacy of workmanslilp tha French may bo said to excel the rest of mankind. Out of tho most unpromihlii({ and apparently intractable materials their skilful hands fabricate artlulen of unu or ornament of the most pleasing and becoming forms. What, then, is tho rouNoii that their cutlery is so much inferior to that of Great Britain? " In all probability the reason is that which at one time caused tho silk tradu to languish in Great Britain, which at one time made tho people of tho muiiiu country complain that their glass was both bad in quality and high in prico. In both these instances tho competition of foreign artisans was excluded; tho BrltlNh manufacturer having the monopoly of the market, there was notliing to stiiiiiih(tO his ingenuity; he produced articles of inferior quality, his vocation did not tloii- rish, and both he and tho community were dissatisfied. So with regard to Iho cutlery of France, tho difficulty has been tho prohibition of tho foreign arllulu, Let the foreign and the French commodity be looked at side by side for n fnw years in the shop-windows of Paris, if the duty to "^hicli cutlery is still to b« subject will permit it, and wo think we may venture to pledge ourselves that thA French workmen will show themselves in duo time no way behind their FnKllNh rivals. We may expect the sanio result to take place which has so mueli union* ished and puzzled tho friends of protection in Sardinia, where tho removal of prohibitions and protective duties has caused a hundred different branoliu» of manufacturing industry to spring to suddeu and prosperous activity," Dear Sir: — Anxious that all tho protectionists of tho Tfnion should, as fiir as possible, have it within their power to study bolli MiditM of this question, I here, as you see, lay before my readers your latiwt argument against protection, thereby affording them that opportunity of judging ibr themselves which you so systematically deny to the roadnrH of the Post. Why is it that it is so denied? Is it that tho liritiMh eystem can be maintained in no other manner than by such concoalmorit TIIKIR TAl^KS AND ErFKCTS. 51 of prrnt riirts iim i> Ik n« mi clviirl) oltviuuH? Mliilc i iilarfiiiif; upon tlie Hoficiciicics of Krcmli cutlery, as iVHultiiiH ('nun {.loticlioii, was if iu'cch- iiiry to shut out fVum view (lie iiii|Hirt,iiit lart, lliai uiiilcr a iirntcctiNo nyHtciii more (((nnilrtc, and liniic steadily uialiilaiiieil, than any olliir in tho world, I'ranco lian jnado fuch cxlraordinaiy prD^-rosM in all tcxtilo nianui'actiires. tliaf slu^ imw ixjini't.s ul'tlu'ni tn tin! extent (d"alnin.st Inin- tlreds (.;■ niillinns «il' dollars aiiiiually — mijiJiI^Imlc tin in at liunie and abroad so clieaidy, that slic finds lu^rseU" now ready t(! sul-^titute ]>nt- tnrtivo duties (nr the iiVnliiMtiims \vlii(li liavo so lun^ existed!:' Wnuld it not be far more fair and linne.-t Uere you to ^ivo ^our readers all tlio fucts, instead of limiting yoursell' to the lew that can be mado to Hconi tofurni>(» much attached, and to whieli we an; indibted lor the linantial eri,>c."i whoso ruinous effects ynu bavc so well described ? Why is it that tin; i'reneli |ieci])!e, while so successful wilb rejiard to silks ami cottons, are so delicient in respect to the pruiluetidu and manu- fueturo of the various metals ? Q'hc cause of this is not, ns you tell your readers, to be found in " the parsimony of nature," ami yi t, it is a well- known fact, that while the supply of coal ami iron ore is very limited, others of the most useful uietals are not to bo found in France. Thin, howev(T, is not all, the "parsimony of nature" whi(di, notwithstamlinj; your denial of it, so certainly exists, bein^j;- liere aeiompanied by restric- tions on domestic C(unmercc of the uiotit injurious kiiul, an account of which, from a work of the bighcst character, will bo f"uud in the fol- lowing paragraph : '• Py the French law, all minerals of evmi hind helovfi tn the rrr> •/, ami the only advanliif/c the proprktur of the toil enjoys, is, to have the refusal <■! the mine at the rent fi-ccil ripim it hy the crown surveyors. There is pront ditliculty somotinics in even olitiiiniiig tlio leave of the uiown to t-iiik a shaft ujmii tlie jiroperty of the in- (iividuiil wlio is anxious to iiii(h'rtal;o tlie speculiUloii, uinl to imy the rent usuiiUy demniiileil, n certain portion of the gross pnuluct. The Cointe Alexamier tie 15 has hcen vainly scekin;i; this pcrniisbiou for a lead-iuiue on his estate in Drittaiiy for upwards of ten years." Ilavincij read this, j-on cannot but be satisfied that it accounts most fully for French deficiencies in the mining and metallurgic arts. That such was the case, you knew at the time you wrote your article, or you did not know it. If you did, woidd it not have been far more fair and honest to have given all the facts? If you did not, is it not evident that you have need to study further, before uudertuking to lecture upon questions of such high importance ? Turning now from French cutlery to T^vltish glass, I find you telling your readers that the deficiency in this latter had been " in all proba- bility" due to the fact, that "the competition of i'oreign artisans" had been so entirely excluded. On tne contrary, my dear :-ir. it was duo to restrictions on internal commerce, glass having been, until within a few years past, subjected to an excise duty, yielding an annual revenue of more than 8<5,O00,0OO. To secure the collection of tl:..t revenue, it had been found necessary to subject the manufacturer to such regulations in reference to his modes of operation as rendered improvement quito impossible. From the moment that domestic commerce became free, 52 FINANCIAL CRISES : donipstic cniiipctitinn j