University of California. FROM rUK I.IBKAKY ')F D R . F R A N C I S LI E li E R , rrofof=so.- of History and Law in Columbia College, New York. iHi. (ill 1 or MICHAEL REESE, Of San FraiiLi'st'o. 1873. ^.3a«fflto«ima>M-ia«K'«»iB«iM»-mi^ .>!. . -a^ . -^ fi^'-^ t^T / y / ^.'V PUBLIC ECONOMY. PUBLIC ECONOMY FOR THE UNITED STATES. BY CALVIN COLTON. NEW YORK: PUBLISHED BY A. S. BARNES & CO. NO. 51 JOHN STREET. CINCINNATI: H W. DERBY & GO. 18 48. p^ Ijl V^-C.(^1 Entered, according to Act of Congress, in the year 1848, By CALVIN COLTON, in the Clerk's Office of the District Court of the United States, in and for the Southern District of New York. STEREOTYPED BY KKDFIEI.D & SAVAGE, 13 Chambere Street, N. Y. NOTE. All the reasonings of this work on European society, are based on the statu quo of its condition before the convulsions of 1848. It must be seen that these recent and current events are not sufficiently ripe to be used as materials in a work of this kind. CONTENTS. CHAPTER I. — Preliminary Remarks page 17 The Task attempted in this Work — Tlie Doctrine of Free-Trade Economists not a Sci- ence. — This false Pretension a stulen Shield. — On common Ground. Free-Trade Econ- omists have done some Good. — This Work a System for the United States — The New Features of this W(3rk not Novelties — The proper Functions of Hypoibesis. — Free- Trade Economists have made an unju.-^tifiable Use of Hypothesis. — It leads to no Result. — Mill's, Compte's, Newton's, and Reid's Views of Hypothesis — Rea.sons for the lim- ited Scope of this Work. — Reasons for changing the Name of the General Subject. — Politics and Political Economy. — The Comprehensiveness of this Work, and the Unity of its Plan. CHAPTER II. — The New Points of this Work page 26 What is meant by these New Points. — The First: Definition of the General Subject. — Importance and Influence of Definitions. — Public Economy not heretofore reduced to a Science. — The Definition here given of the Subject is consistent with a Science. — It res- cues the Subject from an embarrassed Condition — The Free-Trade Theory composed of uniform Propositions. — The Exact Sciences — All Sciences, when fully constructed, are necessarily exact. — Science appertains to all Subjects — The Science of Sociology, as announced by M. Compte, in an imperfect State. — John Stuart Mill's Definition of Sci- ence. — Why the Science of Sociology is Imperfect. — Mr. Mill, a Free-Trader by Sym- pathy, has demolished the Theory by Logic. — Citations of a remarkable Character from Mr. Mill. — What they prove. — Private and Public Economy compared. — Napoleon on this Subject. — Common Principles in Systems fundamentally different. — How our Defi- nition affects the General Argument. — Empirical Laws defined — Public Economy, down to this Time, lies scattered over the Field of Empirical Laws, and has not been reduced to a Science. — The Free Trade Hypothesis belongs to a Category of Empirical Laws incapable of being reduced to a Science — The recognised Canons of Experimental In- duction, as laid down by Logicians, fully sustain the Claims of Protection against those of Free Trade — The Forn'.alion of the Science of Public Economy is j-et in Aieyance to some .skilful and competent Hand. — A Science can not be made out of the Laws of Public Economy, except for one Nation, each by Itself — The true Position of Labor — Labor robbed of its Rights by a False Position in Public Econon)y. — Protective Duties not Taxes in the United States, but a Rescue from Foreign Taxation.— How Public Economy is affected by different States of Society. — New Points in regard to Money and a Monetary System. — The Reasons for Free Trade, with the People, are Reasons for Protection — All desire the same Thing. — The Destiny of Freedom not yet achieved. — The Protective Principle identical with that of the American Revolution. — Free Trade in Great Britain not based on Science, but on Public Policy. — Rise and Progress of the Free Trade Theory — Definition of Freedom. — An American System of a Peculiar Char- acter. — Free Trade identical with Anarchy. — Protection can never be dispensed with, in any 8uppo.sable Perfection of American Arts — Agricultural Labor and Products in the Guise of Manufactures. — Not two Kinds of Economy. 8 CONTENTS. CHAPTER III.— Meaning of Frke Trade page 60 The domestic Orif^in of the popular Application of the Terms, Free Trade. — Their Ad- Captandum Features.-^The Unfairness of taking Advantage of these Features. — The true Moaning of Free Trade, directly the Opposite of what is commonly suppo.9cd. — Jus- tice on the Side of Protection. — Free Trade, to be Just, requires that all Nations should be one Family. — Universal Free Trade would create one great Central Power, at the Expense of all the Rest. — Weak Powers can only be defended against the Strong by a Protective System. — The Free-Trade Millennium an Absurdity. — Expensive and Cheap Organizations of Society, as they affect this Q,ue.«tion. — American Instincts on the Rights of Labor. — The Objections to Protection are the Reasons for It. — The Free Trade of Adam Smith not the Free Trade of the Present Time. CHAPTER IV. — Free Trade a License for Depredation on the Rights of Others page 69 This a New Position. — It is based on the Principle of Anarchy. — The Es-sence of Free Trade is a Plea for no Law over an important and wide Domain of Interests. — Defini- tion of this Domain. — Nations are Commonwealths, and may be vulnerable or injurious, in their Relations to each other, the same as Private Individuals in each. — The Defensive of Man's Position, in all Circumstances, requires most Care, and costs Most. — Time only, and protracted Experiment, will determine the relative Merits of Free Trade and a Pro- tective System. — The Point of Vulnerability in the United States, opened by Free Trade. — The great Problem one of Figures and Cluantiiies, that can be worked out. — The Negative Losses occasioned to Individuals and to the Country, by Free Trade, though Real and Serious, not easily ascertained. — More and greater Interests at Stake, on the Ground proposed to be given up to Anarchy by Free Trade, than anywhere else. — The Hen and Chickens and Hawk, are like Nations and Free Trade. — How this Anarchy of Free Trade operates. — It is real Anarchy 97^0 ad hoc, opening a vast Field for Depre- dation. — Free Trade is the Sway of the Will of the Individual, as opposed to that of Society. — The Principle of Free Trade everywhere at Work for Depredation. — Free Trade not equally Fair for both Sides. — Great Britain not for Free Trade. — An important Confession of a Member of Sir Robert Peel's Government. — The Absurdity of making Laws for the less important Sphere, and doing without Law in the most important — The Charge of Free Trade against Protection, falls back on Itself, in precisely the same Form. — Under Free Trade we are forced to buy, in the Form of Manufactures, the same Things which we produce, while our Products perish on Hand. — Answer to Objections to the Theory of this Chapter. — Free Trade operates, through a second Party, to injure a third Party, and the Scope of this Influence takes in whole Nations, as Subjects of its Depredations. CHAPTER V. — Reasons of the Rise and Progress of the Theory of Free Trade page 87 The Prevalence of Free Trade makes a Problem. — The Rules by which it is to be solved. — British Writers and Literature on this Subject. — The Free-Trade Epoch. — British Legislation for Protection, and the Effect of this Policy for a Century previous to Adam Smith. — Treatment of the American Colonies under the Crown. — Its Inconsistency witli Free Trade. — Free Trade in Great Britain a State Policy, not a General Principle. — Adam Smith employed by the British Government to write his Book. — His Inconsistency and Self Contradiction. — Examples. — The chief Aim of Adam Smitli, was to reconcile the American Colonies to Injustice. — Free Trade a British Instinct and Selfi.sh. — MCul- loch's Betrayal of British Policy. — The Authority of British Writers on Free Trade. — Their Authority in our Schools, and in forming the Minds of our Statesmen. — Ob.sequious- ness and Sorviliiy of American Free-Trade Economi.'its — Free Trade a one-legged Science. — Bom in the Closet. — British Free Trade Writers Employees of the British Government. — History of Free Trade as a Party Question in the United States.— Its Prevalence here owing to Social Position and Obsequiousness. — Instincts of the Ameri- can People in Favor of Protection. — Free Trade can not be the permanent Policy of tlie United States. CONTENTS. » CHAPTER VI. — Great Britain the only Nation that is prepared for Free Trade, and the United States the last that can afford it . page 100 The Importance of Position, in all Competition, illustrated by familiar Examples. — Adam Smith's Illustration. — The Tribe or Nation that is ahead in Manufactures, can keep ahead, by Free Trade. — The first Lessons on Protection to Great Britain. — The Way of her Beginning, and its Re.'^ults. — It was by this System that she was able to triumph over Napoleon. — Great Britain was Poor when she began her Protective System. — Behold the Consequences. — Great Britain always consults the Parties interested in Protection, and complies with their Wishes. — Not so the United States. — A remarkable Example of taming Witnesses out of Court. — British Manufacturers, from the Strength of their Posi- tion, have consented to dispense with Protection. — M'Gregor's Evidence and Advice to the British Government. — MCulloch's Confession. — Action of the States of Europe, after the Overthrow of Napoleon, in Favor of Free Trade.— Their Repentance. — Repent- ance of Ru.ssia. — Manifesto of Count Nesselrode. — The Zoll Vereiii Treaty. — Napoleon's Policy. — The Policy of the European Continental Nations against Great Britain, defen- Bive. — The greater Cost of Money and Labor in the United States an insuperable Bar to Free Trade. — The Weak, not the Strong, require Protection. — British Free Trade, not Free Trade. — British Differential Duties retained. — Effect of Commercial Treaties. —The Whole Truth in few Words. CHAPTER VII. — Freedom consists in the Enjoyment of Commercial Rights, and in the Independent Control of Commercial Values fairly Acquired page 114 The Novelty and Importance of this Proposition, a Reason for giving it an early Place in this Work. — What is Meant by it. — Definition of Commercial Rights and Values. — Liberty not synonymous with Freedom. — Rights as distinguished from Liberty. — Free- dom, not an Abstraction, but a Reality. — Is a definable Substance. — The Objects of Despotism of every kind, even Spiritual, are Commercial Values. — All Religious Privi- leges are Secured and Fortified by Commercial Values. — Freedom requires, that all Taxes should be Voluntaiy, by a Representative Voice.— Otherwise they are an Ex- tortion, and not Freedom. — "Voting Supplies."— The British Government more imme- diately under the Control of Popular Freedom than that of the United States. — The Mexican War an Example. — Manj^ things are called Freedom which are only its Acci- dents and Results. — A reasonable Man will be contented with Freedom as here de- fined. — A Man's Commercial Rights includes his Chances in the Future. — The Blood of Martyrs shed on Account of Commercial Values. — The Test of the Principle con- tended for. CHAPTER VIII. — What caused the American Revolution. — History or THE Protective Policy in the United States page 126 A Restatement of the Object of this Work, and of the great Error of the Economists. — The Theme of this Chapter important as a Starting Point in the General Argument. — The Instinctive Policy of a Parent State toward Remote Dependencies, fatal to the End in View. — Such was the Policy of Great Britain toward her North American Colonies. — A Review of that Policy. — The Doctrines of Joshua Gee. — Their Influence on Parliament and the Board of Trade. — Acts of Opposition and Wrong Provoked the Revolution. — Di'claration of Independence. — Commercial Values, as the Fruits of Labor, the Occasion of the Contest. — The Position of the Free-Trade Economists as to the Elements of this Controversy. — They v^'ere forced to justify Wrong. — The Wrong a Commercial one. — The Aim of the Revolution was to break down the Old, and to establish a New System of Public Economy, that is, a Protective System. — The Struggle was based on the Prin- ciple of Mine and Thine, as it determines Commercial Rights. — A Protective System of Society the great Object in this Country from the First. — The great Movement from Europe to America was and is for this. — The Confederation a Rope of Sand. — A Pro- tective System the great Object of the Federal Constitution. — One of the first Acts of the new Congress was to establish a Protective System. — Documentary Evidence for Fifty Year.'5. that Protection was the Uniform Policy of the Country. — The Cause of Apostacy from this Ancient Faith. 10 CONTENTS. CHAPTER IX. — The Destiny of American Freedom not yet Achiev ED PAGE 142 The general Desire for Freedom, before and after the Discovery and Settlement of Amer- ica. — American Independence an Epoch of Freedom. — "An American System" means much. — It is a "Commercial System." — "Political" the Shadow, "Commercial" the Substance. — The ReBpon.sibility of a Nation that ha.s Freedom in Trust for Posterity and for Mankind. — Faith as a Power in Man for the Attainment of Freedom — The Advo- cates of Freedom are in general practically Right, though often theoretically Wrong. — Freedom yet in its Cradle. — The vacillating Policy of the Country in regard to the Means of Freedom. — Seventy Years of the Era of American Freedom gone, and yet Freedom was to be Defined. — The People have much to Learn on this Subject. — What Great Britain and Europe Desire. — The Jeopardy of American Freedom. — Free Trade would throw it away — would Sell It. CHAPTER X. — The Different States of Society in Europe and America require Different Systems of Public Economy page 151 The three fundamental Elements of European Economists. — Adam Smith's and Ricardo's Statement of them. — These Elements do not exist in the United States as a Rule, but only as Exceptions. — The Ancient System of European Society gives Character to the Modern. — The economical Position of the Laborer there, the same as that of the Ox or the Slave. — This Position assigned to Labor by European Economists, as proved by their own Statements. — The Theory of Malthus justifies this Position. — This Doctrine pervades the European, and has been transferred into American Systems of Economy. — The prevalent Principle of Land Tenures in Europe fundamentally different from that which prevails in the United States. — " Rent" the lord of all in Europe — The Prin- ciple of Serfdom and Villanage, nnder other names, still prevails in that quarter of the World. — Labor doomed there. — American Society fundamentally different. — The same System of Public Economy can not apply to each. — Reform in America, slow, but sure. — Can only be effected by Public Economy. — Free-Trade Economy hostile to Popular Rights. CHAPTER XI. — Education as an Element of Public Economy in the Uni- ted States page 169 Education a Thing of Commercial Value. — The American People the Oriijinal Statesmen of the Country. — The American Republic an Experiment for the World — Difference between the European and American Theory of Society. — Knowledge makes the Dis- tinction between Freemen and Slaves — Character of the First Settlers of this Country. — They were Men of high Culture. — General Education made the Basis of their New State of Society. — Education the Power that achieved American Independence. — It is the most Important of all the Elements of an American System of Public Economy. — A System of Universal Education may not at fir.st Produce Examples of the highest Culture. — The American Sy.stem gives Equal Chances to All — System of Americaa Schools and Colleges. — A Protective System of Public Economy indispensable to the American System of Education. — Education and Virtue Concomitant-* in a Nation. — Comparative Condition of European and American Population. — Physical and Moral Education makes the Difference. CHAPTER Xn. — Protection not Restriction, but Emancipation, .page 180 What is meant by a Restrictive System. — It is a Misnomer as applied to Protection. — Free Traders and Protectionists in the United States are both after the same thing. — The true Relation between Capital and Labor. — The most perfect Slate of Society — Capital is Labor in Repose. — Protection of Capital is the Protection of Labor. — An American Protective System a Rescue from a Foreign Restrictive System. — American Labor can not be free, without Protection. — The Protection of one American Interest can never injure another American Interest, but benefits all. — Examples and Proofs. — The Position of American Capital and Labor in Relalion to Foreign Capital and Labor. Consideration of the Maxim that a Nation must buy in Order to sell. — The Prosperous and Rich buy and trade most — Protection makes us rich ; the want of it makes us poor. A Rule for one Nation may be bad for another. — Why does Great Britain preach Free Trade ? — Adam Smith began right, and ended wrong. — He leaped to his Conclu- Bion from False Premises. CONTENTS. 11 CHAPTER XIII.— MoNEV pagf 189 Barter, its Nature — Oripiii of the Name. " Precious Metals." — How Gold and Silver came to be used as Moicejv — Go'd not u.'-ed as Money in all Piiris of the VVorld. — Relntive Proportions of the Precious Metals en)ployed as Money and for other Purposes. — Foun- dation of the Value of Gold and Silver, when used as Money. — Turgot, Say. M'Culloch, and others, on this Point — The Foundation of the Value of Money lies in the Demand of the Precious Metals for other Uses. — It is a Foundation in Nature, not the Result of Convention. — Definition and Functions of Money. CHAPTER XIV.— Money page 203 The Di-^tinction between Money as a Subject and as the Instrument of Trade — Review of the Doctrine of Adam Smith and others on the Relative Position of Money and of the Commodities given for it. — Adam Smith versus Adam Smith. — Price the Attribute of Commodities, not of the Money given for them. — Smith and Others on this Point — Error and Confusion of their Doctrine. — VVeighl the Measure of Money, and not the Commod- ities for which it is exchanged. — Professor Twiss' "View of the Progress of Political Economy, since the Ifith Century.'' — Mr. Twiss meets the Point, and puts all at Stake. — Examination of his Position. CHAPTER XV.— Money AS THE "Tools OF Tbade" page 223 An Illustration of this Truth. — The Condit'on of a Nation, after selling its " TooN of Trade," the Same as that of a Mecharjic who does ihe same TliinL'. — Moniesqnieu's Doctrine on this Point. — The Emperor of Russia inve.«ting in French Stocks — Money but an incon- siderable Fraction of a Nation's Wealth. — To answer its Purposes, Money should be to a Nation as a fixed Capital — It is " Tools " — Haifa Set of " Tools" not as good as a per- fect Set. — Money the necessary Means of a Nation's VVenlih — The Amount requiied by a Nati(m. depends on its Resources and Capabilities. — The Charge of a Miser Spirit on Protectionists considered. — Bad Economy to hoard up Money — The Commercial Revul- sions in the United States always owing to the VV'ant of Money as " Tools of Trade." A Protective System necessary to keep on hand '• Tools" enough — There has never yet been Money enouizh in the United States for the Busines.-^ of the People — Money makes the Mare go. — To have Money enoufih, as " Tools of Trade,'' is Evidence of Private and Public Economy. — Ignorance the Parent of Free Trade in the United States. The PreciMus Metals are to Society equivalent to a Law of Nature — Mr Jacobs on the Uses of ihe Precious Metals — The Quantity of the Piecious Metals required fur the Trade of the United States — The Commercial Tronhlfs of tins Country owing to unfortunate and fitful Changes in the Policy of the Government. CHAPTER XVI.— Paper-Money and BANiaNG page 2^0 The Principle of Credit. — The United States built up by Credit — Gold and Silver a Credit Currency. — Is Bank-paper Money? — The Invention of P.iper-Money a great Advance in Civilization. — Facts to illustrate its Economy and Necessity — It greatly ausnients the Facilities, Scope, and Powers of Commerce. — Facts and Authorities to this Point — Bankintr the In.strument of Paper-Money — The American System of Banking — Prin- ciples and Benefits of Bankine:. — Adam Smith's Doctrine that Paper-Money banishes Specie, not applicable to the United States — The Precious Metals the only .>-ound Basis of Banking — The visionary and unsettled Opinions of Emopean, particularly Biitish Economists, as to the Basis of Banking.— Sir Robert Peel right at last in his Bill of 1844. — A Government Bank necessarily in a false Position. — The Subtreasury a Government Bank— Treasury-Notes are Post-Notes— All the Functions of the Treasury by making it a Government Bank, merged in that Bank — The Effecta Danger, and Power of this Institution — It subverts the Banking System of the Country. — The In.stincts and Propen- sity of the Federal Government for Banking, as illustrated in the Subtreasury. CHAPTER XVII. — The Gain of Individuals not always the Gain of the CoMiwuNiTY page 260 Views of Free Trade Economi.ots on this Point — M'Ciilloch's View of Capital as formed out of Profits. — MCnlloch's Hobby. — The Doctrine of Equivalents in Trade considered: — Equivalents in Kind. — Money, as •' Tools of Trade," not an Equivalent in Kind —How this affects the Doctrine of Free Trade. — DifTerence, economically, between Importations 12 CONTENTS. for Consumption of Vnlue, and Tiiiportations to be improved in Value or otherwise used for Increase of Wealth. — The Values added to the raw Material by mannfaclurins'. — Every Commercial Transaction independent. — Answer to ^ome Points made by M Saj'. CHAPTER XVIII.— Labor page 274 Definition. — Who ate Laborers. — Labor is Capital. — The Effect of not recognisinf» this Fact in Public Economy. — The False Position awarded to Labor by the Economi.^ts. — The Position vvliich they themselves occupy False. — Labor Capital vested in Man him- self and estimated by his Life and Powers. — Labor-Capital reproduces itself indefinitely. — It is the Parent of all other Capital — It is more Profitable than any other — It is the Gift of God, and Inalienable. — The Machinery of Society is its Product, which reacts to give it Value. — Labor-Capital may be under Restraint, in Certain Circum.stances. — La- bor the Source of all Wealth, by creating all Commercial Values. — Labor bound to share in the Burdens of Society and entitled to Protection. — Labor in its True Position, defines Human Eights. — The Perversion and Abuse of tho.se Rights, owing to its False Position in Public Economy. — The Results of the American Revolution put it in the light Place — Labor Man's Honor, not Disgrace. — It is the great Political Element. — Labor Discovered and made America. — American Independence, Labor's Jubilee. — Its Conse- quences. — " Kent," as practised in Europe, created Cla.sses. — Labor considered as the Agent of Power, and as an Independent Agent. — The former Slavery, the latter Free- dom — The First the State of Labor in Europe, the second its Condition in the United States. — The Malthusian Theory, as it justified European Economists and European Society, in enslaving Labor. — The Theory a Blasphemy —This Problem solved in America. — Origin of the term Landlord, with its Lesson — Labor, to be Free, must have an Alternative in another Chance besides the Wages offered. — Europe does not afford that Cliance. America does — Political Chances of American Citizens. — Causes and Ef- fects of the Difference in the Value of Labor and Money, in Europe and America. — The Power and Aims of Governments which oppress Labor. — T'he Interests of Civi- lization vested in Labor. — The Rights of Labor, Political. — The Rights of Labor the Strife of the Age — The Pivot on which it turns. CHAPTER XIX. — The Difference between the Cost of Money and Labor IN Europe and their Cost in the United States, as it affects Public Economy for the United States page 295 The comparative Prices of Labor in Europe and tlie United States — These Prices deter- mine the Value of Money and other Capital in thewe two Quarters — Money worth more than other Capital. — Its Value in any Country, and at any given Time, determined by the Rate of Interest. — Some Account of the Hates of Interest in different Countries, and at different Times. — The Average Interest of Money in the United States, as com- pared with the Average in Europe. — Difference in the joint Co.st of Money and Labor in these two Cluarters — Different States of Society the Causes of this Difference. — The Greatness of the Power acquired in Europe, by the W^rongs to Labor. — The practical Importance, in forming a System of Public Economy for the United States, of consid- ering the Difference in the Cost of Money and Labor in Europe and America. — A Commercial Principle lies at the Bottom of this Difference, and controls Results. CHAPTER XX. — The Claims of American Labor for Protection. page 302 Difference in the social Position of Labor in Europe and America, — It is a Commercial Principle, that requires the Protection of American Labor, and therefore imperative. — The Rule of graduating Protection. — How Foreign Policies bear on the vulnerable Points of the United States. — British Free Trade a Protective Policy. — The Abatement of Duties in Great Britain requires Increase, rather than Diminution, in the United States, because it is made for Protection. — Importance of Skill in Public Economy, to Amer- ican Statesmen. — The Advantages of Free Labor over Slave Labor. — European Labor in a like Position with Slave Labor, — The best Rule for Protection is. that they who ask for it, should have it. — Adam Smith's Argument for Free Trade, is One for Protec- tion. — He concedes and begs the Question, — Adam Smith and Daniel Webster, as to the Effect of increased Investments of Capital in producing Establishments, on Labor, and on the Profits of Capital. — The United States can never dispense with Protection, so long as Money and Labor here cost more than elsewhere. — The Cry of " Monopoly." — Dem- agogues. CONTENTS. 13 CHAPTER XXI.— BALA^CE of Trade page 322 The Balance of Trade a well known Principle in common Life. — The Efforts made to mystify the Subject. — Adam Smith and liis School admit the Principle unawares. — The only Difficulty is an imperfect \ iew of the Facts that belong to the GLuestion. — The Difficulty in England not found in the United States, and is now removed there. — Prac- tical Men always Riaht on this Subject — Instance the London Times. — Adam Smith's " Wherewithal.'' — The Free-Trade Economists fail to distinguish between Money as a Subject and as the In.strument of Trade, in all their Reasonings on this Question — Adam Smith lets the Cat out of the Bag, by an Hypothesis. — The Key of this Hypothesis. — Ad- am Smith makes Loss Evidence of Gain. — Joshua Gee's Position and Reasoning as a British Economist. — He the BriiLsh Oracle. — Hia Policy for America — The Coinage of a Nation Evidence of its Profitable or Unprofitable Trade. — M. Say's Reasoning on the Balance of Trade. — Its Absurdity — Adam Smith the original Author of this Fallacy — How One rides a Hobby. — A Citizen may be enriched by the same Act that subtracts from the Wealth of the Nation. — So of a Class of Citizens. CHAPTER XXH. — The Mutual Dependence of Agriculture, Manufac- tures, AND Commerce page 342 These three are a natural Family of Interests in the United States — Agriculture ainne subjects a Nation to Dependence. — Adam Smith on this Point. — Adam Smith and hia School have furnished the best Refutation of their own Errors. — An Argument on the indissoluble Connexion between these three great Interests. — The " Mercantile and Agricultural Systems," as defined by Adam Smith and others, consiiiered. — There is no Foundation for this Array of these two Systems, as opposed to each other, and made so much of by some of the Economists. — The Importing Merchants favor Free Trade. — Smith's and Gee's Description of this Class of Traders. — The Independent Position of every Commercial Transaction. CHAPTER XXIII.— Protective Duties not Taxes page 351 The Gain of Assumptions, without Proof, to one Party, and the Loss to the other by con- ceding them. — The whole Controversy tnnis on the Proposiiiou of this Chapter. — Popu- lar Instincts on this Subject. — Duties not the Cause or Measure of a Change in Prices. — The vast and comprehensive Spheres of Influence which bear on this Q,uestion — How they all tend to prove that Protective Duties are not Taxes. — The Causes Abroad and at Home, which produce the Effect. — A Protective System adequate for all Purposes of Public Revenue in the United States. — The Commercial Position of the United States will, for an indefinite Period, require Protection — An Arrny of Facts to establish the Proposition of this Chapter, with Comments. — Reasons of the Facts. — The great Misfor- tune of conceding,' in the Technical Use of Language, that Protective Duties are Taxes. CHAPTER XXIV. — An American Protective System a Rescue from For- eign Taxation page 381 The Method and Rule of this Argument, as laid down by a Public Document and Jo.shua Gee. — A Showing, from the Principles of this Rule, and by Public Documents, of the Foreign Taxation which the People of the United States have been and are still sub- jected to. — Adam Smith's and M Cnlloch's Evidence on this Point — Taxes of Foreign Nations, of whom we purchase, enter into the Prices of their Products to us. — The Prin- ciples of the Tariff of 1846, as they bear on this Point. — Returns of British Commerce as compared with those of the United States. — The Aggregate of Foreign Taxes paid by the United States since 1791. — A Protective System the sure and only Way of Rescue from Foreign Taxation. CHAPTER XXV. — Gains of Protection and Losses by Free Trade, .page 397 The everlasting Objection. — The Charm of Hypothesis, as compared with the Inductive Mode of Reasoning — How things look at a Distance. — Supplication of Europe to America. — St. George's Spear in the Throat of the Dragon. — The Aggregate Loss to the United States, since 1791, for Want of a Protective System. — The Loss comprehends the Use of the Capital in all Time. — The EflTects of new Arts and new Pursuits under a Protective System. — A Variety of Facts on this Point. 14 CONTENTS. CHAPTER XXVI. — The Effects op a Protective System on the Prices of American Labor page 410 Consideration of the contradictory Averments on this Point. — The Facts of the Case — Statistics bearing on the Question. — The Effect of Low Wages on the Character of the People. CHAPTER XXVn. — The Effects of a Protective System on the Interests of Agriculture page 418 Not true that Agriculture has no Share in the Benefits of a Protective System. — Facts and Stali.-tical Evidence on this Point. — Breadstuff^, in ordinary Seasons, cheaper in Europe than in the United States. — The Effect of Indirect Protection of Agriculture. — Protec- tion of Slave grown Staples — Slave Labor in the United States needs Protection more than Free Labor. — All Nations can and intend to supply their own Mouths. — Great Britain the greatest Exporter of Agricultural Products, of any Nation in the world. — Evidence of William Brown, Esq., on this Point. — The Importance of this Fact in a System of Public Economy. — Statistics showing that Europe is Independent of the Uni- ted States for Breadstuffs. — The Problem as to whether An)erican Indian Corn will find a permanent Market in Europe. — European Agricultural Labor will always beat Amer- ican Agricultural Labor in Market, because of its Low Price — The Effect of a Protec- tive System in sustaining and raising Prices of Agricultural Labor and Products. — Showing of the Effects of certain Items of the Tariff of 1846 on the Interests of Amer- ican Agriculture. CHAPTER XXVIII. — The Effects of a Protective System on the Inter- ests of Commerce and Navigation page 441 Departments of Labor interested in Navigation. — Ship Builders, Mechanics, and Bailors, all require Protection. — Sliip-Owners require it — What would be the Effects of abol- ishing our Navigation Laws — Navigation and Commerce two Interests. — Siatisiical Proofs of the different Effects of Fvee Trade and Protection on these two Interests. — The Position and Interests of Importing Merchants hostile to the Interests of the Coun- try — Statistics continued, with a Variety of Fact.s, mixed with Doctrine. — Commercial and Reciprority Treaties all bad, as proved by Experience. — Reciprocity necessarily em- bodies the Principles of Free Trade — Foreign Commerce, under a Protective System, may be made to supply all the Wants of Government, without taxing the People. CHAPTER XXIX. — The Effects of a Protective System on the Home Trade page 467 The Home Trade the Basis of the Fortunes of the Country — '• Agriculture, Manufactures, and Commerce." the American Coat of Arms — Home Trade has always made the For- tunes of all great Continental Nations — Insular Nations an Exception. — The Domestic Re.sources of the United States incalculable. — We have all Climates deemed good, and all Physical Elements of Wealth — The Country and the People fitted for each other. — The Country a World irultself — Care. Work, and Frugality, at Home, the same for a Nation as for a Private Individual. — " Far-Fetched, dear Bought." — Home Trade does not diminish, but enlarges the Amount of Commerce, as ten Miles is only Half of Twenty, and can be gone over twice for once of the latter. — The thriving Man works on his own Estate. — Difference in Results of Trade between Parties to a Nation and Nations as Parties. — The Comparative Amount of Home and Foreign Trade — Statistics. — Amount of the Products of Labor in the Country. — Amoant of Internal and Coasting Trade. — Statistics. — Adam Smith on Home Trade. CHAPTER XXX. — The Effects of a Protective System on the Cotton- Growing Interest page 481 The Reasoning of a Secretary of the Treasury, on the Cotton-Growing Interest, consid- ered. — The Importance of this Interest as compared with others. — The " Forty-Bale Theory " — A Variety of instructive Statistics on the Cotton and other Interests of the Country. — The Claims of the Cotton Interest, as being one of superior Political impor- tance, examined. — The Profits of Cotton Growers and Manufacturers compared — The Evidence of Mr. Clay and the " Southern Planter" on this Point. — Table of Prices of CONTENTS. 15 Cotton from 1790 to 1844. — A Protective System more important to the Cotton-Growing Interest than to any other. — A remarkable and decisive Mode of Proof. — Action of a Convention of Mississippi Cotton Planters on the Subject CHAPTER XXXI. — The Principles of a Tariff as they respect the Ob- jects OF Duties and the Modes of Collecting them .... I. page 502 An American Economist of the present Time exposed to the Charge of Political Partisan- ship. — He is obliged to examine public Measures as Facts. — Tlie Principles of the " Revenue Standard" examined. — A Tariff not a Revenue Measure, except inciden- tally. — The Customhouse System inconsistent with Free Trade. — Direct Taxation and Free Trade go together. — No such Thing as Incidental Protection. — Minimum Duties and their Eft'eots.— Specific Duties. — Ad Valorem Duties. — History and ES'ects of these Different Modes of Duties. — Proofs in Point. CHAPTER XXXII.— The Tariff of 1846 page 516 The Tariff of 1846 a Surrender and Abandonment of the Principles of Protection. — Popular Instincts on this Subject. — It takes Years for the Proof of a new Tariff Policy. — Probable Result of the Tariff of 1846.— A Table showing the Effects of the Tariff of 1846 on American Labor and Arts. — Remarks upon this Table. — The Effect of Auction- Sales of Imports on American Labor and Trade. — Importance of harmonious Legisla- tion between Federal and State Authorities for Auction of Imports. — The Discrimina- tions of the Tariff of 1846 against American Industry and Labor. — Tables in Proof. — Object of the Anti-ComLaw League of England — False Reasoning of Free Trade on the Effects of the Famine in Ireland and of the short Crops of Europe. CHAPTER XXXIII.— The Contingent Destiny of the United States. .530 The Contingencies of Free Trade. — Review of our Commercial History, as it discloses Contingencies. — What makes a Sound Currency. — As a Man that fails frequently in Business can not get rich, so neither can a Nation. — The possible Destiny of the Country, under a Protective System, grand and glorious. — Free Trade devours All, and then eats up Itself. PUBLIC ECONOMY, FOR THE UNITED STATES. CHAPTER I. PRELIMINARY REMARKS. The Task attempted in this Work — The Doctrine of Free Trade Economists not a Science. — Ti)is false Pietension a Stolen Shield — On common Ground, Free-Trade Economists bave done some Good. — This Work a System for the United States. — The New Features of thisW'oik not Novelties. — The proper Functions of Hypothesis. — Free Trade Econ- omists have made an unjustifiable Use of Hypothesis — It leads to no Re.iult. — Mill's, Compte's. Newton's, and Reid's Views of Hypothesis — Reasons for the limited Scope of tins Work. — Reasons for changing the name of the General Subject. — Politics and Political Economy. — The Comprehensiveness of this Work, and the Unity of its Plan. It will be seen that the author of this work has had to confront authorities of no mean consideration — authorities which, strange as it may seem, have occupied the theatre of debate on the leading topic of these pages, for nearly a century, without ever having been encountered, face to face, in their main positions. It has been claimed for them, that they could not be answered ; that they had settled the question ; and that, henceforth, time only was required to establish the universal triumph of Free Trade. Though facts, in abundance, had been arrayed against these pre- tensions, nevertheless they seemed still to command attention and respect. The doctrine of Free Trade had taken up the position, and asserted the prerogatives, of a science, composed, in all that be- longed to it properly, of uniform propositions in all places, and in all time; from the deductions of which, conceding the claim, there was no appeal. But its claim to be ranked among the sciences, was a stolen shield. So long as such a weapon of defence was PRELIMINARY REMARKS. awarded to it by consent, it was impossible to reason with or against it, inasmuch as a deduction of science is justly regarded as too for- midable for oppugnation. No other answer was required from them, except this : It is contrunj to the theory. The theory, averred to be a science, was the charm that dissolved all arguments — the stronghold within which a retreat could always be covered. But this claim will be found to be untenable ; and divested of this, there is nothing left to it but certain loose reasonings, in the shape of em- pirical laws — nothing but the ingenious fabrications of great abili- ties, based on hypotheses, and forced into currency by the authority of great names. The audior of this work has no objection to the use of the term science in this application ; nor does he deny, but on the contrary maintains, that the elements of public economy embody the mate- rials of a science of a very high order and of great importance. But - t it is one thing to have the elements of a science in hand, and an- -4^' other to have constructed the science. Nor do we mean by this to admit, that the Free-Trade economists have the elements ; it will ap- pear in the next chapter that they have not. We have there marked ' A ^- ^. the distinction between empirical laws and those of a science, and ^ ' '■ shown that the doctrines of Free Trade are composed entirely of the v- former. By arrogating the name and authority of a science for >/\~ '•' ' ' their dogmas, the Free-Trade economists had interposed an effectual bar to investigation by scientific rules, and covered themselves with an impenetrable shield, in the presence of all who conceded the claim. It will be found, that the ejection of these pretenders from this stronghold, opens the whole field anew to fresh explorations, and that the old charts, proved to be erroneous in very important particulars, must be used with extreme circumspection. It is not denied, that the European economists of the Free-Trade school have done some service, where they were at home, in a field directly under their eye ; or that they have recognised and settled princi- ples which are common to all parts of the world, and to every state of society. But it is not allowed, that they were competent to lay down rules for countries and states of society with which they had no acquaintance, and of the peculiarities of which they had not the faintest conception. With these views of the standard lights of a science, "falsely so called," the author has endeavored to construct a svstem of econo- my for the United States, and to show wherein the principles of European economists are entirely inapplicable here. He has not A ' ' • , /^ en- f-^x,A^ o I u., ■ . '■^- n /■. /< A 1. ^i ^ ^ a" \tf ^ f PRELIMI.VARY iliJIVIAUKS. * taken up new positions, or started from new points, or said new things, merely for the sake of noveUy. He has availed himself of helps, where he could find them ; but he has been forced to exe- \ cute his own conceptions, and to carry out his plan, independent t^ ** of all authority. Yet scarcely a thought will be found within these pages which has not been common property with many minds, and ^ which the intelligent reader will not probably recognise, though it ^ J should be the first time he ever saw it reduced to form, and ad- '.', justed in a satisfactory place. So far is the author from being am- ^ ^ bitious to produce surprise, that he would think his labor lost, if he ^ 3 T" had done so. He that advances things entirely new, and before * C J unthought of, on a great theme, though they be true, is probably ''"■ ^ doomed to pass from the stage before they will be appreciated. Feeling the present importance of his subject, the author has de- sired to be understood and appreciated now — at first sight; and he has, therefore, studied not to make statements which would re- 3 ^ quire study in others. He does not believe in the usefulness of , j anything on this subject, which is not, to a very great extent, com- " ' A mon property, as the result of unavoidable experience and observa- ^ ** tion. He does not consider, that what he has done that may appear '^ *" to be new, is really new in most men's minds ; but only in works "^ of this kind. The very ground of his rejection of all models and . authorities coming in the way of his convictions, is that of his con- fidence in the common sense of mankind, above which he would _ not willingly soar, and beyond the range of which he would not venture, so long as he desires to be useful. The author has been forced to observe, that hyporhcsis is the beginning, the middle, and the end of the reasoning of Free-Trade economists ; that is to say, they have no other proof of the truth of their doctrine, than its assumption. This being a very im- rhl^yf,_ / portant point, it is proper here to say a few words on the nature and functions of hypothesis, in scientific investigations. "An hypothesis," says John Stuart Mill, in his system of logic, " is any supposition which we make, in order to deduce from it con- clusions in accordance with facts which are known to be real. . . There are no other limits to hypothesis, than those of the human imagination. . . Hypotheses are invented to enable the deduc- tive method [of reasoning] to be earlier applied to phenomena. In order to discover the cause of any phenomena, by the deductive method, the process must consist of three parts : induction, ratio- cination, and verification. . . Now, the hypothetical method ^fuL.' Oyy,e^\^ ^^M^VVs^'^ ^^"f^' ' -t^--^-rtc-v 20 * PRELIMINARY REMARKS. />>-!' suppresses the first of these three steps, to wit, induction, and contents itself with the other two operations, ratiocination and ver- ification ; the law which is reasoned fronn being assiimcd, instead of proved.^^ Doubtless, the hypothesis of Free Trade would beentidedto the position of a theory or science, if, by the force of its ratiocination, it had ever arrived at the end in view, or at the third step above stated by Mr. Mill, to wit, verification. But here is the point where it always fails, and, therefore, remains in statu quo, an hypothesis still ; or, rather, is actually disproved by a counter verification, in the same manner as the earlier hypotheses of the laws of the solar system, and of the material universe, have been disproved, by the verification of other and more correct hypotheses. Hypothesis is worthy of no respect, except as it is verified by facts. It may be admitted, transiently, for a purpose; but when the purpose fails of verification, it falls to the ground; and when a counter verification is made out, it is disproved. Such has been the result in the trial of the hypothesis of Free Trade. " It appears," says Mr. Mill, above cited as the latest and best logical authority, " to be a condition of a genuinely scientific hy- pothesis, that it be not destined always to remain an hypothesis; but be certain to be either proved or disproved by that comparison with observed facts, which is termed verification. ... If the supposition accords with the phenomena, there needs no other evidence." The substance of M. Comte's reasoning on this point — and he is allowed to be one of the greatest philosophers of the age — is, that " we arrive, by means of hypothesis, to conclusions not hypothetical." This is the true and only legitimate function of hypothesis in scientific investigations, and when the third step of the deductive method fails, to wit, verification, which is the only object, and the only justification of assuming the first, in the shape of hypothesis, then the hypothesis falls to the ground. " It is not destined," as Mr. Mill says above, "always to remain an hy- pothesis ;" but must either be verified, which transforms it into a science, or part of a science ; or be rejected, for want of verifica- tion, as worthy of no respect. This is precisely the fate of the Free-Trade hypothesis, which, though it has never yet got any farther than the original assump- tion, to irrove itself bu itself, has been dignified with the name of a science. It dispenses with the syllogism altogether, without which (X. J*/ r ^ the dignity of our theme, as it did generally throughout the world, when first employed in this application. It is, therefore, in part, a _ matter of taste, that has led us to this partial change of name for such a work and subject; though, we think, it will be found to be a felicitous change in other respects than that of being a rescue from associations not always pleasant. The word, " public," is the exact counterpart of the word, " private;" and, it is believed, that one can not have proceeded far in this work, without feeling, that there is a much greater fitness in the use of the former term, than '■^ jmlitical,''^ in such an application, because, in no case, will , f there be a sense of incongruity, when the former is thus employed ; ^W ^^ *"' whereas, this feeling will frequently arise in such an application of ■ the latter. It is chiefly " yublic^'' economy with which we have to do, in a work of this kind ; and if it is also "political," in some — " — respects, it is not, perhaps, unqualifiedly so ; or allowing even that '^^^^5^,!^ it is, still objections lie against the latter, on account of its frequent prostitution to violent debates and low controversies, which can never lie against the former. M. Say protests seriously and ear- nestly against a necessary connexion of " politics" with " political economy ;" and gives for reason, that " wealth is independent of poUtical organization." We think, however, his protest is without foundation, and his objection without force. The economist is the school-master, and the statesman is the practical operator. These terms are correlatives, — and the latter, properly qualified, as much supposes a pupilage under the former, as engineering supposes an acquaintance with the science. 84 PRELIMINARY REMARKS. But the term " public," all things considered, is exactly the word for this place, always expressing and comprehending all that is wanted, and never suggesting an irrelevant idea. It has, more- over, the advantage of always expressing a relation to "private" economy, which, as will be found, the case requires, and which the term " political," does not necessarily denote, nor very naturally suggest. It is agreed by all economists, that the wealth of a nation is chiefly composed of the aggregate wealth of all its individuals ; and by some, this is affirmed, though we think incorrectly, without qualification. For example, all public property is an exception ; so also the means of wealth, which a nation possesses, as a political corporation, which, in some cases, are great and comprehensive, and may be justly styled the capital of its position. It is true, that all these ought to minister to private wealth, and if properly hus- banded, will do so. Nevertheless, they do not fall within the aggregate of private inventories. There is, however, always, an appropriate relation expressed in the apposite terms of " public" and " private" economy, which would not be so uniformly con- veyed by the substitution of the word "political," for that of " public ;" and the best of it is, that the term " public," in such a use, always conveys the idea required, as it is invariably, in every practical view, the counterpart of " private." But there is yet a much more important and vital reason for using the term " public," instead of " political," in this application — a reason which involves a fundamental principle in the general argument, viz., that there can not be two kinds of economy, and that the principle is the same in public as in private economy, the former differing from the latter only in the comprehensiveness of its interests. The absurdity of applying one set of rules of economy to a given number and amount of given interests, having the same relations, while they are called private, because they belong to one person, and of applying a different set of rules, because the same interests belong to many persons, and are therefore called public, must be apparent to all. The man who, under a good system of economy, and beginning with one interest, has grown ricli, and brought under his charge many interests, managing them all with skill, and by rules which he has found profitable by experience, would be very unwise, probably would be ruined, by changing his system. That which he has found to be economy, is economy, and nothing else. He can no more alter the principle, than he can make right wrong, and wrong right. He is as much compelled, in ■P1 C Pi'iE LI MI.\ A HiT KEMARKS. 25 his commercial relations, to one uniform course, under the same circumstances, in order to prosper, as in his social relations in order to be happy. The multii)lication and diversity of his interests do not, in the least degree, affect his principles of economy. Besides, it may easily be conceived, that a single person may have even a greater diversity and a greater amount of interests than a state. Whatever is economy to him is economy to the state, and what- ever is economy to the state is economy to him, for given interests in given circumstances. And yet it will be found, that Free Trade 7 prescribes a veiy different species of economy for the state, from J that which all experience has prescribed to private persons. Some persons, probably, will think this work a very incomplete system, as no notice is taken of numerous topics, naturally falling within the range of public economy, and which are usually consid- ered in such works. In answer to this, the author, after pleading guilty to this sin of omission, would say, that he had a single aim- in the conception and execution of his task, the accomplishment of which, he found, would swell it to as large a volume as might be expedient for such a publication, and that another of equal ex-^ tent would be required to do justice to all the topics which might be considered as belonging to the general subject. That aim was^ to show, as well as he could, the merits of the Protective and Free- j Trade systems, respectively, as they apply to the United States. It will be found, that the author has never deviated from this line of argument. Adhering to this purpose, it will also be seen, that the work has a unity of plan, whi( h is usually regarded as one of the most important attributes of design in all productions of art, of which literary composition must be allowed to be one, and not the least in general consideration. The author is of opinion, that the setdement, for the United States, of the question debated in these pages, is one of the most desirable, and will be one of the most important events, which remain to be achieved in the progress of the country ; and that all minor questions of public economy, arising out of our do- mestic condition and interests, can hardly fail to go right, if thig goes right. He has, therefore, devoted himself to the prosecution of this great argument, and kept within its limits. As the title of his work proclaims, it is for the United States, considered chiefly in their foreign commercial relations and interests, as they are connected with and bear upon domestic interests. 26 THE NEW POINTS OF THIS WORK. , ^ CHAPTER II. THE NEW POINTS OF THIS WORK. What is meant by these New Points. — The Firet: Definition of the General Subject — Importance and Influence of Definitions. — Public Economy not heretofore reduced to a Science — The Definition here given of the Subject is consistent with a Science. — It res- cues the Subject from an embarrassed Condition. — The Free-Trade Theory composed of uniform Propositions. — The Exact Sciences. — All Sciences, when fully constructed, are necessarily exact — Science appertains to all Subjects — The Science of Socinlo^y, as announced by M. Compte, in an imperfect State. — John Stuart Mill's Definition of Sci- ence. — Why the Science of Sociology is Imperfect. — Mr. Mill, a Free Trader by Sym- pathy, has demolished the Theory by Logic. — Citations of a remarkable Character from Mr. Mill — What they prove. — Private and Public Economy compared. — Napoleon on this Subject. — Common Principles in Systems fundamentally different. — How our Defi- nition affects the General Argument. — Empirical Laws defined — Public Economy, down to this Time, lies scattered over the Field of Empirical Laws, and has not been reduced to a Science. — ^The Free Trade Hypothesis belongs to a Category of Empirical Law8 incapable of being reduced to a Science — The recognised Canons of Experimental In- duction, as laid down by Logicians, fully sustain the Claims of Protection against those of Free-Trade, and install the Former in the Position of a Science. — How to apply these Canons to this Subject. — A Science can not be made out of the Laws of Public Economy, except for one Nation, each by It.self — The True Position of Labor. — Labor robbed of its Rights by a False Po.sition in Public Economy. — Protective Duties not Taxes in the United States, and a Rescue from Foreign Taxation — How Public Economy is affected by different States of Society. — New Points in regard to Money and a Monetar}- System. — The Reasons for Free Trade, with the People, are Reasons for Protection. — The In-^ stitution of Properly. — The Destiny of Fieedom not yet achieved — The Protective Prin- ciple identical with that of the American Revolution. — Free Trade in Great Britain notv'^ based on Science, but on Public Policy. — Rise and Progress of the Free Trade Theory. — Definition of Freedom — An Ameiican System of a Peculiar Character. — Free Trade identical with Anarchy. — Protection can never be dispensed with, in any siipposable Perfection of American Arts. — Agricultural Labor and Products in the Guise of Manu- factures. — Not two Kinds of Economy. By the new points of this work, it is not "meant, that all specified as such are entirely so, though many of ihein are ; but, on account of the importance given to their position, as compared with the slight notice taken of them in other works of this kind, it is tiunight proper to present them as new. Many of them, as will be seen, involve fundamental and all-pervading principles, such as have not, heretofore, been incorporated in works of public economy. The announcement of a few of the most prominent of these points, in this place, may, perhaps, serve the purpose of suggesting what in- fluence and effect they are entitled to have on the general argu- ment. 1. The first we would notice is our definition of the subject : Public economy is the application of knowledge derived from exjieri- i-/ '^.-., ,, < ^ ' ' ^^' ^ ^^k/7(lAy/-^ .^^"-^^^ -^ / HE NEW POINTJ(g^OF THIS WflHRK. ,^/^ ^^ 27 c;2ce ^0 rt gwen posi/ion, to given interesis, and to given imtitutions £^0 of an independent state or nation, for the increase of yublic and pri- >^V vate wealth. " In all scientific investigations, definitions discharge the functions of a finger-post, of a door of access to the field, of marking the boundaries of that field, and of a glance view of the whole ground. The definition is the controlling law of the debate or of the scru- tiny. Tiiere are no essential attributes of the argument, which are not comprehended in it, or suggested by it. With the definition as a guide, if it be a correct one, it is impossible to get out of the field. On the contrary, if it be incorrect, it is impossible certainly to know when one is in the field. It is the text of the subject and the rule of the argument. To err In a definition is a necessary doom to perpetual and endless error in all that grows out of it ; to be right in this start, is the only sure guide to a right end. The above definition is the fruit of the study of years ; and for the present we do not know how to improve it. We have tried our best to tolerate the introduction of the term, science, into this definition, as the substantive part of it, in accordance with general usage, such as the science of national wealth, &c. ; and we do not repudiate the idea that science is implied in it, or that it is a proper subject of science. But we are forced to deny, that, as yet, the subject has ever been reduced to a science, and that, down to this /, J /f > time, it has any other form of a system than a collection of what the logicians call empirical laws, the character of which will be noticed by-and-by. If it sl)all be admitted, that we have contributed, in any degree, so to sift these empirical laws, and so to adjust them in a scientific form, as to subject them to recognised canons of ex- perimental induction, as we propose to attempt to do, still our defi- nition stands in a form not inconsistent with the definition of a science ; and though we fail in our proposed task, the purpose of our definition is not impaired. Its terms indicate sufficiently the class of sciences among which it must take rank, if it Is deemed worthy to be called a science. It is a science composed oi contin- gent propositions — contingent on the peculiar position, the peculiar interests, and the peculiar institutions of the country to which its rules are applied at any given time, and contingent on the changes, In these particulars, to which that country may be subject in the succession of events. It will be seen, therefore, that our definition is a new point, and that it rescues the whole subject, entirely, from t'^^^ — -:•* / 28 ^ r * THE NEW POINTS OF THIS WORK. ^ %' . has been claimed for it by the Free-Trade economists, as a science , i^ of uniform propositions — uniform for all countries and for all time. ^ ^' f Every person must see, that one of the essential attributes of Free Trade is the uniformity of its propositions for all nations, and that • any departure in a system of public economy from such uniformity, is not Free Trade, but a violation of its principles. The poles of a planet, therefore, can not be wider apart, nor the heavens farther from the earth, than the main positions of these two antagoni.stical ■systems. The propositions of the one are the same for all nations, in all time, while those of the other are contingent on the position, interests, and institutions of the country to which they are applied, for the time being. 7 We assume that we do no injustice in ascribing this position to the Free-Trade economists, though they have not expressed them- selves precisely in these terms. If they give up this, they give up all. Their argument avails nothing except upon this ground. If their science is not one of uniform propositions, in application to all countries, in all times, they have not only abused the public, but made dolts of themselves. For so the public have thought, and their argument is at an end if they deny it. Possibly they have not considered how many categories of science there are, or how dif- ferent some of them are from some others, and that none of them are exactly alike. There is a class of sciences called exact, of which, doubtless, the Free-Trade economists suppose theirs is one, or one equally reliable in its results. And if it be a science, they are right ; for, strictly speaking, no science can be more exact, or more certain in its final conclusions, than another, when all its elements are brought together, understood, and properly adjusted. But the perfection of every science is a work marked by stages, by degrees. That of astronomy was once very imperfect, very in- exact ; but it has now attained to a high degree of perfection, as demonstrated in the precision of its predictions. " Geometry," Mr. Mill says, " is a science of coexistent facts, altogether inde- pendent of the laws of the succession of phenomena ;" but it is a very exact science. The science of mechanics Is exact ; for though the relations of forces, in all experiments, are constantly shifting, their results are equally measurable, the forces and relations being given. The mathematics are reckoned among the exact sciences, so far as they have advanced, and from the nature of the subject could not be otherwise. A vast many branches of knowledge, capable of being reduced to the strictest laws of science, are yet in THE NEW POINTS OF THIS WORK. 29 the chaotic field of empirical laws. Science, no doubt, appertains to everything in nature, in man, in society, in morals, to everything in which man has or takes an interest; but how much of it is yet in the dark? It is probably nothing but our ignorance that makes the Saws of one branch of knowledge less exact, and less reliable to us than those of another. Science appertains to tendencies, to analogies, to chances, to the very contingencies by which man retains his hold on life. Life insurance, lotteries, games of chance, and many other classes of facts, and combinations of facts, the issues of which are commonly regarded as most uncertain and fortuitous, are, nevertheless, based upon elements not less susceptible of scientific adjustment, for the attainment of the most infallible results, than those of any science that now boasts of the greatest conceivabJe exactitude in its predictions. There is the science of the social state, or of sociology, as M. Comte calls it, which approximates to, more properly, perhaps, lies behind, the science of public economy ; for it is presumed they will not be pronounced identical, though there is an affinity and a sympathy. But this science of sociology is very difficult to master, in order to predict results with any tolerable success, not- withstanding that all Its elements are vested in the individual man. It is because the combinations and relations of these elements, wherever found, are so infinitely diversified, and for ever shifting. Make a case — which, however, is impossible — suppose a case, then, where their position, combinations, and relations, are precisely the same as in another given case, and the results will be uniform; which, if true, demonstrates that society, in its organization, move- ments, changes, and destiny, is governed by scientific laws, of which, indeed, there can be no doubt. " Any facts," says Mr. Mill, " are fitted in themselves to be a subject of science, which follow one another according to constant laws, although those laws may not have been discovered, nor even be discoverable by our existing resources." Meteorology and tidology are among these imperfect sciences. The science of human nature is of this description, as also, of man in society, or sociology. " If our science of human nature," says Mr. Mill, " were theoretically perfect, that is, if we could calculate any char- acter, as we can calculate the orbit of any planet, //om given data^ still as the data are never all given [in the case of man], nor ever precisely alike in different cases, we could neither make infallible predictions, nor lay down universal propositions." Nor can we 30 THE NKW POI.VTS OF THIS WORK. make artificial experiments, in the case of man and society, as in the mathematical, mechanical, and physical sciences; but we are always compelled to take man and society, just as we find him. As we are now approaching the main point on which our defini- tion of public economy is based, in confirmation of the correctness of our position, we would here cite a little from Mr. Mill, who, sympatinzing with the state of society in Great Britain, is himself a Free-Trader. We wish to show from Mr. Mill's own words, that, as in sociology, so also in public economy, and precisely for the same reasons, no science has ever yet been constructed. Mr. Mill says : " There is, indeed, no hope that these laws [)aws of sociology], though our knowledge of them were as certain and as complete as it is of astronomy, would enable us to produce the history of society, like that of the celestial appearances for thousands of }'^ar3 to come. But the difference of certainty is not in the laws themselves ; it is in the data to which those laws are to be applied. In astronomy the causes influencing the result, are i'd'^, and change little, and that little according to known laws ; we can ascertain what they are now, and thence determine what they will be at any epoch of a distant future. The data, therefore, in astronomy, are as certain as the laws themselves. The circumstances, on the con- trary, which influence the condition and progress of society, are innumerable, and perpetually changing; and though they all change in obedience to causes, and therefore to laws, the multitude of the causes is so great as to defy our limited powers of calcula- tion." So far on sociology. Next Mr. Mill adduces the very case of the general inquiry of this work, to wit, " The great topic of debate in the present day, the operation of restrictive and pro- hibitory commercial legislation on national wealth. Let this, then,'* he says, "be the scientific question to be investigated by specific experience. If two nations can be found which are alike in all natural advantages and disadvantages ; whose people resemble each other in every quality, physical and moral, innate and ac- quired ; whose habits, usages, opinions, laws, and institutions are the same in all respects, except that one of them has a more pro- tective tariff; and if one of these nations is found to be rich and the other poor, or one richer than the other, this will be an rxperl- mcntum crucis ; a real proof by experience, which of the two sys- tems is most favorable to national riches. But the sii-pjxjs'ition, that tivo such Instances can be met with, is absurd on the face of it. Nor WORK. is such an occurrence ever abstractedly possible. Two nations /^'-ff which agreCvd in everything except their commercial policy, would /^ agree also in that. Differences of legislation are not inherent and ^—^^^<^/ ultimate diversities ; are not properties of kinds. They are effects P^Zt^t^ ^ of preexisting causes. If the two nations differ in this portion of their institutions, it is from some difference in their ]}osition, and thence in their (tpparmt interests, or in some portion or other of their opinions, habits, and tendencies ; which opens a view of further differences, without any assignable limit, caj)able of opera- -^^ ting on their industrial prosperity, as well as on every other feature of their condition, in more ways than can be enumerated or ima- gined. There is thus a demonstrated impossibility of obtaining, /Ti/ty^/^' in the investigations of the social science, the conditions required for the most conclusive form of inquiry by specific experience." ^-"-^x-^*-^/ This is enough. We have here a full confession, from a be- {^y^^O^^/A> liever in Free Trade, a severe and logical argument, itself com- y l^_x posing a pa;t of a system of logic, that even two -nations can not be t5^\l^^^ found enough alike to justify general deductions equally applicable to both in public economy ; a for/ tori, that no such rules can safely be applied to all nations, as is claimed by Free Trade. Science. XL here, is proved to be utterly at fault for general rules. The only defect of this argument is the last sentence of the above citation, where Mr. Mill would seem to make his " demonstrated impossi- bility" apply also to the experience of one nation. It clearly ap- plies to two, and much more to an increased number; but there is nothing in this reasoning to show, that a nation may not find rules in its own experience for itself, and rules based on scientific and experimental induction. Mr. Mill has not only demolished the so- called science of Free Trade, which assumes to give rules for all nations, but he has fully vindicated our definition, and shown that it was impossible, with propriety, to give any other. It is even possible that our definition should fall within the scope of a well- built science ; and we intend yet to show that it has some strong claims to that position ; while it is clearly impossible that the gen- eral propositions of Free Trade should have that advantage. A few more brief remarks of Mr. Mill will be perdnent here : " The aim of practical politics is to surround the society which is (Z*C~l\. --^ under our superintendence with the greatest possible number of x/Q.^UjtJjt, circumstances of which the tendencies are beneficial, and to remove . \p ^\y or counteract, as far as practicable, those of which the tendencies are '^^'*-^ "^ injurious.'" Any one can see how directly this looks to the ex- 32 THE NEW POINTS OF THIS WORK.» V . ♦ perience of one society only for rules of its policy, and how directly opposed it is to general rules having no respect to such experience. In other words, it falls directly within the line of our definition. Again : " It would be an error to suppose we could arrive at any great number of propositions, which will be true in all societies without exception. Such a supposition would be inconsistent with the eminently modifiable nature of the social phenomena, and the multitude and variety of the circumstances by which they are modified — circunntanccs never (he same, or even nearly the same., in two dijfrrrnt socic/ies, or in two different periods of the some so- ciety. . . We can never either understand in theory, or command in practice, the condition of a society in any one respect, without taking into consideration its condition in all other respects. . . Unless two societies could be alike in all the circumstances which surround and influence them (which would imply their being alike in their previous history), no portion whatever of their phenomena will, unless by accident, precisely correspond ; 7io one cause will -produce exactly the same iffcct in both. . . We can never affirm with certainty that a cause which has a particular tendency in one people or in one age, will have exactly the same tendency in another, without referring back to our premises, and performing over again for the second age or nation, that analysis of the whole of its influencing circumstances, which we had already performed for the first. The deductive science of society [here, observe, is the very hypothesis of Free Trade repudiated] does not lay down a theorem, assertin THE NEW POINTS OF THIS WORK. 33 the rmmed'tnte influence, principally at least, of a ^e\\ only. . . In order to verify a theory by an experiment, the circumstances of the experiment must be exactly the same as those contemplated in the theory. But in social phenomena the circumstances of no two experiments are exactly alike." This, we confess, is one of the most remarkable confutations of the theory of Free Trade we have ever seen ; and the more re- markable as coming from one who believes in the doctrine. Thanks to his fidelity as a logician, he would not, and could not, sacrifice logic to a fancy of this kind. Without dreaming of this incidental result of such a discharge of his professional functions, he has swept Free Trade clean into an irrecoverable abyss. This point is so important in the general argument, that we are tempted, notwithstanding the fulness and sufficiency of Mr. Mill's reasonings, to add a little of our own. There is usually no more similarity or equality in the condition and interests of nations, than in those of private persons ; and the very necessity of a system of public economy, for any one nation, in its relations to others, is based upon the fact of such dissimilarity and inequality. If there were no diversity of interests in different nations, and no dissimilarity in their condition, physical or social, a common system of public econoAiy might, perhaps, be equally adapted to all. It is the exigency, or permanent fact, of these dif- ferences, numerous, essential, and important, which renders systems of public economy — diversified as the circumstances to which they are applied — indispensable to all nations; and if they are not, in each case, adapted to these differences, and made expressly for them, they will not only fail of their end, but will probably be injurious. A system made for one nation, and adapted to its con- dition and interests, may be ruinous to another — will certainly be more or less hurtful. IJicardo has very well said : " That which is wise in an individ- ual, is wise also in a nation." We know that no two persons can be found, whose condition and interests are precisely similar, and that each must have his own rules for the management of his own affairs. It would be mischievous, possibly ruinous, for any two persons to interchange rules of private life and economy, and for each to work by those of the other. Nor could both work by the same rules. Just in proportion as the difference in the condition, pursuits, and interests of any such two persons, is increased, in the same proportion must there be a difference in their respective sys- 3 34 THE NEW POINTS OF THIS WORK. terns of private economy, or rules of business. The farmer can not work by the rules of a meclianic ; or of a merchant ; or of an artist ; or of a lawyer ; or of a doctor ; or of a soldier ; nor can either of these work by the rules of either of the others ; and so on, through all the diversified pursuits of life, each one's system of economy, or rules of business, must be adapted to his pursuit and peculiar position and interests. Even those in the same calling require rules, or a sys- tem, adapted to the peculiarities of their respective positions and circumstances. The same system can not be equally beneficial to any two parties, whose position and interests are in any respect diverse. It must be seen, therefore, that, although there may be prinriples of conduct common to all persons, there can not be a common economical system for any two. In the same manner, it is impossible that a given system of pub- lic economy should be equally well adapted even to two nations ; and much more impossible, that it should be adapted to all nations. Adam Smith's pretension, therefore, in giving to the world his "In- quiry," &c., is a manifest absurdity, if the title of "the Wealth of Nations" be regarded as involving a proposition descriptive of the work, which may, no doubt, with fairness, be accepted as the inten- tion. It is believed, that he wrote for all nations, Great Britain, perhaps, excepted. It is certain that his system has been received by the world, as carrying with it this pretension. Adam Smith doubtless supposed, that he was laying the foundations of a science ; and those of his school, such as Say, Ricardo, and M'Culloch, have been more open and more emphatic in their claims, and have not hesitated, as before observed, to rank the Free-Trade hypoth- esis among the sciences. M'Culloch says: "Political economy may be defined to be the science of the laws which regulate," &c. He also says : " Political econonly is of very recent origin," that is, as a science ; and that " it was not treated in a scientific man- ner, till about the middle of the last century." Of M. Quesney, a physician, attached to the court of Louis XV., he says, that " he gave to political economy a systematic form, and reduced it to the rank of a science." Also : " We are justified in considering Dr. [Adam] Smith the real founder of the modern system [science] of political economy." In the same manner, all the economists of the Free-Trade school have imbibed the notion, and started on the principle, maintaining that position throughout, that their theory is a science, composed of uniform propositions, all the world over, and in all time. M. / y yf. > >^ /^THE ^^W rOI-XTS OF THIS^ORK. ^ 35 ^ .* ^ >^ /^^Sf^-"^/ ^ f^^-^LH^^r^t.<>^ /^C^t:^>^-^^ ^:l^i4yi,^^^ Say declares, in the most unqualifieuann emphatic terms : " The /^J>^*^y>-, * As there can be no doubt of the character of this claim, it is un- r^ ^^v^ necessary to go into minute proof of the fact; or, if it is allowed to ^/yLA^"*^ be too absurd to be credited, the pretension itself is disposed of. <%tj^__^ All must see, that it has not a shadow of just pretence to occupy this position. And yet it will be found, that it was solely by its assumption, without warrant, and without reason, that the most stu- pendous errors have been palmed upon the world, under the sto- ^.^%/t^fje/W len shield of sciknce, simply because the claim being conceded, t/J*'^ or not challenged, it was vain to oppose deductions put forward f J J{ ifnder such authority. They claimed that the theory was scie^i- ^^/TjCf/i^ tJJic ; nobody challenged the claim; and who would dare to oppose ^ ^^ ^ science'? Thus, for the greater part of a century, the Free-Trade ^^ j^ economists have had no inconsiderable sway, it might, perhaps, /'^-^•^^ be said, a full sweep of influence, by the authority of a false pre- ^-^ ^^^!^*^ ^^"'^°"- . . . . ^'%^^^ Observe the following remarks on this point by Napoleon, in ^,-S^ licatiorr. The political constitution of differ- y^-'^'^^*^^ he, " must render these principles defective ; his exile, as reported by Las Cases : " He opposed the principles \C^ 4^,/i. of the economists, which he said were correct in theory, though • cJL^ erroneous in their app ent states," continued h local circumstances continually call for deviation from their unifor- mity. Duties," he said, " which were so severely condemned by political economists, should not, it is true, be an object to the treas- ury ; they should be the guaranty and protection of a nation, and should correspond with the nature and the objects of its trade. Hol- land, which is destitute of productions and manufactures, and which has a trade only of transit and commission, should be free of all fetters and barriers. France, on the contrary, which is rich in every sort of production and manufactures, should incessantly guard against the importations of a rival, who might still continue supe- rior to her, and also against the cupidity, egotism, and indifference of mere brokers. I have not fallen into the error of modern sys- tematizers," said the emperor, " who imagine that all the wisdom of nations is centred in themselves. Experience is the true wis- dom of nations. And what does all the reasoning of the econo- mists amount to ?" No one, probably, has lived, since public economy became a subject of debate, who understood it better, for practical purposes, than this extraordinary man. V . 36 » THE NEW POINTS OF THIS WORK. , • It will be seen, that our definition, including a given position, given interests, and given institutions of a state, as elements of public economy, is fully justified by what Napoleon calls " the po- »\- litical constitutions of different states," and "local circumstances." ♦ •* ■ In denying the claim of Free Trade to a science, we do not mean, that there can not be common principles, which, in abstract forms and isolated positions, are equally true all the world over, %^^v any more than that we mean to arraign the religious and moral '*'J i , principles of the decalogue, which, by all Christians and Jews, are * allowed to be eternal and immutable ; or any more than we would 1. question the verities of figures and mathematical demonstrations. But the question is, as to the application of the same principles, in combination or in separate form, to things, or to states of things, which are different from each other. There is not a principle in the , decalogue which may not be perverted, and which, if perverted, •► .♦* *f ♦ * 1^ will not lead to an unfortunate or criminal result. Figures them- selves, which are commonly said not to lie, may be employed to verify the most absurd and stupendous errors, by mistakes in the premises, or by perversity of application. ^j It will be observed, that we have not only departed from usage, in our definition of public economy, by denominating it the appli- cation of knowledge derived from experience, instead of calling it a science ; but that we require a given position, given interests, and given institutions of a state or nation, in order to know how to make the application. The very terms of our definition, therefore, take the whole subject from the determinate and immutable laws of Free Trade, and place it on what may be called a contingent basis, it- self subject to a variety of contingences. In Free Trade, we have only to understand its propositions, and then we know what they prove, or pretend to prove. But in our theory of public economy, we consult facts, experience, under a given state of things, in order to form the right propositions. In Free Trade, the propositions lead ; in our system, they follow. In the former, the propositions determine results, or affect to do so ; in the latter, facts, by their practical operation, determine the propositions, because they deter- mine results. In the former case, the theory, or, rather, the hy- pothesis, is first, and the results are hypothetical ; in the latter, the theory is last, and is made to depend on the facts. Our theory, therefore, is not one of propositions, formed irrespective of facts ; but a theory growing out of facts. Our theory, instead of being a preconceived hypothesis, like that THE NEW POINTS OF THIS WORK. 37 of Free Trade, is in fact a theory, and involves an established con- nexion between facts that have been and facts which, in Uke cir- cumstances, must necessarily follow, but which are not always found to be the sarne, in all circumstances, but often greatly di- verse. The doctrines resulting from our theory, are subject to such modification as facts and circumstances require, in the place where they are applied, being sometimes, in some particulars, in direct opposition in one place to those of another. It is not setting up an hypothesis to beget an entity ; but it assigns an adequate cause for the entity itself. The propositions of a sound system of public economy, therefore, are entirely contingent on the experi- ence of the past and a given state of things, and not determinate, absolute, and immutable, like those of Free Trade. We have included in our definition given institutions, as well as a given position and given interests of a state or nation, notwith- standing that M. Say has said, that " wealth is essentially inde- pendent of political organization," or of the structure of society. We shall have abundant occasion to show that " political organ- ization," or the structure of society, is an " ^sential" elem ent of public economy. This untenable position of M. Say, originated in a forced effort to divorce what he called " political economy," from " politics," and to maintain it in the rank of the sciences, as if a statesman had nothing to do with the elements of legislation. The very purpose of public economy is for the guidance of legis- lators. It vi'as quite unnecessary to take up this false position, to keep the teachings of public economy apart from the agitations of *' politics." There is no necessary connexion between these two spheres of action or of duty ; though it is impossible to destroy the connexion between the things taught and their practical use. The doctrines are promulgated from the closet; they are I'educed to practice in the high places of the nation. The teachers are neces- sarily recluses, buried in the profound retreats of philosophy, as an indispensable incident of their vocation. Although they may desire that what they regard as truth may prevail, it is not their business to give it currency. But the main object of M. Say in asserting that " wealth* is essentially independent of political organ- ization," or of the structure of society, was to guard his system as a science, and to put forward its prerogatives. We trust, therefore, it will be seen, that the new point wj made, in our definition of the general subject, is one of fundamental, pervading, supreme importance. Its very terms, once made out as •. 3S THE NEW POINTS OF THIS WORK. correct, are a complete refutation of the pretensions of Free Trade. If the public economy of a country is to be based upon its own experience, and if all the propositions constituting the system, are to arise out of the peculiar position, interestij, and institutions of that country, it is not possible that Free Trade should have any- thing to do with it. It will also be seen, that, from our definition, as a starting point, the field of public economy opened by it, is entirely new. It is not tlie world, it is not all nations, it is not any two nations ; but it is one nation in particular. The law of the definition necessarily brings the subject within these limits. This imparts an entirely new character to the argument. With general propositions we have nothing to do; it is a particular case. It is a system of pub- lic economy for the United States alone, which we are required to frame. It has been shown above, that it is not possible to con- struct one for all nations, nor even for two. All pretensions of this kind are utterly baseless, and can do nothing but evil, so far as they are influential. 2. The next new point of this work we propose to consider, is, that public economy has never yet been reduced to a science, and that all the propositions of which it is composed, down to this time, are empirical laws. That it has not been reduced to a science, has already been shown. That all its propositions are properly subjects f science, we do not deny; on the contrary, we maintain it; but fvhat we aver is, they have never yet been adjusted in a scientific and reliable form. Many of them are true and many are false ; but *it is impossible to know which are true and which false, until they are brought under the severe test of scientific induction. We have done enough already to bring under suspicion, and in some cases, to falsify, all general propositions on this subject, such as those of Free Trade. The invincible rules of logic, such as we have cited above from Mr. Mill, put this question out of debate. We have yet to show that it is possible to reduce public economy to a science, by confining its propositions to a single case, or a single nation, and only in that way ; and also, that this work, by adhering to that rule, is constructed on the most rigid principles of scientific induction. But what is meant by empirical Jmvs ? We do not mean by ,. this, imputation what is commonly understood by empiricism or quackery; but we refer to a class of propositions, so denominated by loo-icians, to distinjcuish them from those which have not found their I THE NEW POINTS OF THIS WORK. 39 place in science. " Experimental philosophers," says Mr. Mill, " usually give the name of empirical laws to those uniformities which observation or experiment has shown to exist, but upon which they hesitate to rely in cases varying much from those which have been actually observed, for want of seeing any reason why such a law should exist. It is implied, therefore, in the notion of an empirical law, that it is not an ultimate law ; that if true at all, its truth is capable of being, or requires to be accounted for. It is a derivative law, the derivation of which is not yet known. To state the explanation, the why of the empirical law, would be to state the laws from which it is derived, the ultimate causes upon which it is contingent. And if we knew these, we should also know what are its limits, under what conditions it would cease to be fulfilled. . . Now it is the very nature of a derivative law, which has not yet been resolved into its elements, in other words, an empirical law, that we do not know whether it results from the different effects of one cause, or from effects of different causes. We can not tell whether it depends wholly upon laws, or partly upon laws and partly upon collocation. . . Empirical laws, until explained, and connected with the ultimate laws from which they result, have not attained the highest degree of certainty of which laws are susceptible." But the following is, as we think, what more particularly applies to the present subject : " The property which philosophers usually consider as characteristic of empirical laws, is that of being unfit to be relied on beyo7id (he Umils of tune ^ flace, tiiid circuiii stances, in ichich the obscrvatiovs have been made. These are empirical laws in a more emphatic sense. . . Until a uniformity can be taken out of the class of empirical laws, and brought either into that of causation, or of the demonstrated [sci- entific] results of the laws of causation, it can not with any assu- rance be pronounced true beyond the local and otiicr limits within ifhnh it. has bco) found so by actual observation.^^ Both the novelty and importance of the position here taken, de- mand some exposition. If it be well authorized, true in fact, for the purpose we have in view, it can not be too well understood. When Free-Trade economists have arrogated the high and dig- nified tide of a science for their theme, one naturally asks, what sort of a science is if? In what is its artificial structure apparent? Where are the principles and rules by which we arrive at infallible conclusions ? A science, well and truly formed, can predict results with certainty ; it is the very nature of science to do this, and any \i »\ 40 THE NEW POINTS OF THIS WORK. pretension of this kind that fails in its predictions, is thereby proved false. Have the laws of public economy ever yet been so adjusted as to produce this result? — Manifestly not. If they had, all the world would have known it, and there would be no controversy. The truth is, the whole subject still remains a wide field of empirical laws, not entirely useless, but yet unadjusted as to scientific order and relations, having not the slightest claim to the dignity of a science. If any should think we have failed in our classification of the laws of public economy, in their historical condition down to this time, as being em-jmical, let them tell us under what category of dogmas they should be ranked ; or let them say, if they choose, that they do not all belong to this class. We are not tenacious on that point. We only say, they have never yet been reduced to a science. That is evident, because there is no certainty of science in them. There is no uncertainty in figures, in mathematics, in geometry, in astronomy, or in the physical sciences generally, so far as their respective domains have been explored ; nor is there uncertainty in any science, the elements of which have been ascer- tained and adjusted in scientific order and relations. There can be none. It is the very nature of science to realize its predictions. We do not affirm confidently, that all the dogmas which ever have been uttered on public economy, will fill within the logician's defi- nition of empirical laws ; but we think they will generally be found there,; nor can we conceive how a more respectable rank could fairly be assigned to them. It is not simply for the convenience of classification, that we have put them there ; but because we could not find a more legitimate place. Now, let us consider what the characteristic of an empirical law is, as presented in the above citation: "The property of being . unfit to be relied on beyond the limits of time, place, and circuni- 1^ stance, in which the observations have been made." It may not always be so good as this ; but it can not be better. It must be seen, therefore, that it entirely cuts off the generalizations of Free Trade, and falls directly in the line of our definition. No law of public economy can be safely trusted except for " the time, place, and circumstance, in which the observations have been made ;'' that is, the observations which have established the law. The principle necessarily restricts every system of public economy to one nation — to that nation where the observations that have dic- tated its laws, have been made. Within these limits empirical laws may be serviceable, and by proper attention may be reduced to / THE NEW POINTS OF THIS WORK. 41 a science. For a wider range, it is not possible that a science should be made of them on this subject. In the language of Mr. Mill, in a citation under the former head, it is not simply " absurd, but abstractedly impossible." The effect of this new position, if it shall be allowed to be well sustained, is obvious. Dislodged from the platform of the sciences, on which they have always claimed to stand, and which was their sole authority, the Free-Trade economists are utterly discomfited. None, we think, can fail to see, after what has been proved above, that the pretensions of Free Trade to the rights and authority of a science, are perfectly absurd. 3. We now propose to notice, as another new feature of this work, that we have endeavored to subject its propositions, so far as they relate to the main question in debate, to the most rigid test of the recognised canons of experimental induction, as laid down by logicians ; and consequently, that, in this particular, and so far as we may be allowed to have succeeded, the subject will, perhaps, have some claim to be regarded as rescued from the field of empir- ical laws, and installed in the position of a science. We cite the canons, thus employed, from Mr. Mill, as follow : — 1. " If two or more instances of the phenomenon under inves- tigation have only one circumstance in common, the circumstance in which alone all the instances agree is the cause or effect of the given plienomenon. 2. " If an instance in which the phenomenon under investiga- tion occurs, and an instance in which it does not occur, have every circumstance save one in common, that one occurring only in the former; the circumstance in which alone tlie two instances differ, is the effect or cause, or a necessary part of the cause, of the phe- nomenon. 3. " If two or more instances in which the phenomenon occurs have only one circumstance in common, while two or more instan- ces in which it does not occur have nothing in common save the absence of that circumstance ; the circumstance in which alone the two sets of instances differ, is the effect or cause, or a necessary part of the cause, of the phenomenon. 4. " Subduct from any phenomenon such part as is knovA'n, by previous inductions, to be the effect of certain antecedents, and the residue of the phenomenon is the effect of the remaining antece- dents. 5. " Whatever phenomenon varies in any manner whenever an- i 0^^^ ^ \4^ ^ j^,^^^t.^^^^>^^-^-^^^^-^ •^^ -lO^ /THE NEW POINTS OF THIS WORK. y / other phenomenon varies in sontie particular nnanner, is either a cause or an effect of that phenomenon, or is connected with it through some fact of causation." " These methods," says Mr. Mill, " are the only possible modes of experimental inquiry, of direct induction a posteriori, as distin- guished from deduction. At least, I know not, nor am I able to conceiv^e, any others. These, then, with such assistance as can be obtained from deduction, compose the available lesources of the human mind for ascertaining the laws of the succession of phe- nomena." Mr. Mill has demonstrated at large the truth of these canons. Any one who chooses to refer to the demonstration, will find it complete and satisfactory, beyond the possibility of error. >^ We have not introduced these canons here because we expect to find room to make and explain their application along with the current of the argument where they apply ; but merely to suggest a recognised test, the authority of which will not be questioned, and wliieh can be employed as such by those who are already versed in these rules, or who will take the trouble to make them- selves acquainted with their application. Having already shown that public economy has never yet been reduced to a science, and as that object would turn us entirely aside from the specific design of this work, except as an incidental effect which may possibly in some de/ others. Nothing can be more contingent than the propositions of public economy. If it should be said that a science must be of universal use, to establish its claim as such, it will be observed that we do not insist on the admission of this branch of knowledsfc to that rank, if it can not fairly be established in that place. We do, however, main- tain, that it has never yet arrived at that position. We also think / / that it may be brought there ; and we beg leave to suggest, in an- • • swer to the requirement of the attribute of universal application in a science, that it is not yet concluded to be wanting in this case. One of the conditions of this science, as already demonstrated, is, . , that every nation wishing to avail itself of its benefits, must look for / ' its elements in the facts of its own history, and nowhere else. In that way it becomes of universal use, when every nation, for itself, shall have constructed its own system of public economy on the basis of its own experience. So far, therefore, is the abovenamed objection from proving that public economy can not be a science, as a contingent structure, or as a system composed of contingent propositions, it may be seen, that its very nature is of this precise description ; in other words, it is a science adapted to the nature of the subject. It would be absurd to require that one science should prove another. It is sufficient if each one proves itself, and vindicates its own position. It must be admitted, that nothing is more desirable, in public economy, than that the certainties of science should be brought to bear upon it ; and nothing is more evident than that, hitherto, they have never been so directed. The reasons are obvious, as shown in our citations, here and there, from Mr. Mill. It was impossible i^Ut^ €<^^ i^ (^2^ 4tJi^U^^ 2^ ^^ ^^^_ that a science on tliis subject should be constructed out of the com- mon experience of nations for common use, or out of the experi- - ence of one nation for the use of another. It is a subject on which gener;ihzations are, as Mr. Mill justly observes, even " abstractedly impossible." It is only in the line of the experience of one nation that the rigid principles of such a science can be applied, and for that nation only. All beyond this field is a region of empirical laws, as before shown ; and of that precise category of empirical laws, which are utterly incapable of being reduced to a science. While, therefore, we do not claim to have formed a science on this subject, having had other work to do, we trust it will be al- lowed, that we have demonstrated the want of it, in establishing the fact that all pretensions of this kind hitherto put forward, are without foundation. If we have been so fortunate as to indicate the path, and open the door to the field where alone can be found the elements of this science, it will, perhaps, be of some account iri the future efforts of those jvlio may find it convenient to under- take the task of reducinij it to form. It can not be denied, that some study and close thinking are re- quired for the use and application of the canons of induction, above • cited, to so intricate and complicated a subject as that of public economy. Fortunately, this is not necessary to be able to appre- ciate the argument ti)at is based upon them. The facts and rea- soning may be perfectly apprehended by one who may never have ^ heard of these rules, and who may have but little or no acquaint- ance with the processes of scientific induction. He who is in- structed by experience and observation, is capable of reasoning as correctly as he who is instructed by science, and often does so with more unerring certainty of a tiue result. Ex|)erience never leads to error, and science itself is verified by experience. The canons cited above grow out of experience, and enforce respect and credit only as they are conformed to it. A man may be totally ignorant of the canons, when his experience, or the experience of others verified by facts, leads him to the same result. When science ac- cords with experience, it settles all controversy. Science is for those who occupy the higher, and who are capable of penetrating into the more profound, regions of human scrutiny, while experi- ence is for the common walks of life. As there is in fact but one great argument in this work, com- posed of various branches of what is commonly called argumenta- tion, each one of which in itself is an argument on some one point, / tK^vU ^^'^IJl-^f-^t ^^A^^^H . \P^/ J fwVs- ^\^ Lx^0U\. THE NEW POINTS OF THIS WORK. 45 or in some one line, to its own restricted purpose, it will be obvi- ^ ous that the canons above cited are intended chiefly to verify the , results of the reasoning on the main question between Free Trade and Protection. Though common judgment is for the most part appealed to, and it is hoped may be relied on, to produce convic- tion, in view of the facts presented, and of the reasoning built upon them, there is always a class of minds whose habits are addicted to scientific investigation, and which may be gratified in finding that an effort of this kind has not been made without regard to what are deemed scientific principles. It is fair to conclude, that they who are capable of appreciating these principles, will also be sensible '»' that, as the science applies to a great field and vast amount of facts, and to a protracted period of history, the great question presented is not a sim|)le problem, nor extremely easy of solution. It is in fact a system in the highest and most comprehensive sense of the term. No one ever became master of geometry, chemistry, as- • tronomy, or of any of the established sciences, witliout some pains, without application, hardly without vigorous and protracted, effort. But the absolute sciences, if such a distinction may be made, are incomparably more easy than a contingent one, such as that of public economy. Every stage of reasoning in the former is under the gui- dance of immutable laws, and it is not easy to get out of the way ; whereas, the pro[)Ositions of public economy which may be most important and vital to any and whatever nation, are undoubtedly contingent on a variety of facts, the bearings and relations of which may require the profoundest attention and the severest scrutiny, to be well understood for practical purposes. 4. Another of the new points made in this work, or of the new * positions taken — we are not particular to mention them in the ^r^ order in wliich they may be found — is, that labor is capital, and the parent of all other capital. We do not mean that this is a new idea, or that it is a proposition that requires proof. But it has never before been introduced into a system of public economy as an essential element. We put it first of all ; we make it funda- mental. As such, it pervades the entire system, without which, established in its own proper position, any system of public econ- omy, as will be found, would be radically, fundamentally defective. We profess, that we could not begin to write on this subject, in any hope of doing justice to it, and of corning out right, without Grst determining the true position of labor in public economy, not only as capital, but as the parent of all other capital. It may, in- 1/ Kf M- ^ ♦^^^ «^ ''"^^ f^^ • K 's^ /yy^./siyi^* J^c^U^U^ ^M^i• the jreneral argument, in a consideration of the different states of society in the United States and in Europe, which, so far as we know, has never been duly weighed as an element of public econ- omy. Conjoined with this, is the subject of education, as a point which, in the peculiar aspects of American society, is deemed of great importance, and an element that has never had its proper position in the consideration of this subject. 7. Another of the new points made in this work, is the founda- « ^^ »■ •*- ^jjj2 NEW POINTS OF THIS WORK. 47 tion of the value of money. Every theory of a monetary system is almost necessarily a castle in tlie air, independent of this discovery, and of the knowledge that flows from it, as a guide, as a principle. It is true, indeed, that practical men, who take experience and ob- servation as their guide, may be right on this subject, for legislation or for financial and commercial purposes, as is often the case on other subjects, without knowing why they are so. But, in the construction of the theory of a monetary system, and in the eluci- dation of its parts, it is scarcely possible to avoid errors, which may be very serious in their consequences, so long as the true and only secure foundation of such a system, is not understood, nor even discovered. In all the isolated and empirical propositions, as to ^ which the Free-Trade economists are right on this subject, they are so by the accidental sway of their good sense, in spite of the difficulties in which they are involved for want of a foundation to stand upon, and in spite of the defects and baseless condition of their theory, on which they are perpetually falling back, to float at random in the clouds, a prey to every wind. Practical men are generally right, though they do not know why. When a founda- tion is laid in nature for man to stand upon, they often go to work there without understanding the reasons of its firmness. That is a good bridge that carries people safely over. Accordingly, it has long been seen, by practical men, that no currency can be secure and permanent, which is not based on the precious metals; but it was not necessary, for practical purposes, since they w^xq right so far, on this stage of causes, really but an effect of antecedent causes, that they should know what those antecedents were; that they should understand the real foundation of the value of gold and silver, in the form of money. To them, practically, it was no matter. But for a theorist, essaying to construct a monetary sys- tem, to be incorporated in a system of public economy, as one of its fundamental and most important branches, on which the most momentous results in the legislation of a state, of a nation, depend ; for such a pretender to sit down to this task, without knowing any- thing of the real foundation of the value of money, is not simply • presumptuous, audacious ; but alas for the nation that is doomed to follow in the path of his precepts ! Such, precisely, and no better, on this point, have been the qualifications of the Free-Trade economists. Not one of them has ever understood the foundation of the value of money. If they did, they would certainly have stated it ; and if they had seen and stated it, they must have fol- « (1 48 THE NEW POINTS OF THIS WORK. lowed its leadings, and would have spared the world, not only the errors they have promulgated, but their consequences. 8. Akin to this new point, or new position, as to the foundation of the value of money, is another we have made and urged, in regard to the distinction between money as a subject and as the instrument of trade. This naturally grows out of the foundation of its value, and would scarcely be discerned, except in that con- nexion ; though it is not impossible that it should be. This, too, for all practical purposes of the commercial world, has been acted upon, ever since a common currency was established. Nobody can find a time when it was not acted upon. It is, therefore, re- markable, even marvellous, that a truth so simple, so plain, so prac- tical, and therefore so important, should never have been recog- nised by the economists, as a distinct and vital element in a mone- tary system, and consequently in a system of public economy. It was the more important, that it should be recognised, because, for lack of it, a most momentous error has been introduced into all the systems of the Free-Trade economists, beginning with Adam Smith, and running down tlirough the entire school. It is ap- parently the principal hinge, certainly one of the chief, on which their doctrine of Free Trade is made to turn. Not making this distinction, they assume that money is only a commodity in trade, and that it occupies the same position with all other commodities for which it is exchanged ; and consequently, that, for the greatest wealth of parties and nations, engaged in trade, the more they trade the better, whatever commodity they part with, be it money or anything else. This doctrine is even pushed, or naturally runs, to the extreme, that the more a party buys the better, as buying is only one side of trading, and necessarily implies that of selling. They aver, that selling money is precisely the same, in public economy, as selling corn, calico, or any other commodity, that is not money — money, according to them, being only a commodity, rankin"- in the same class theoretically and commercially, and occupying the same position. According to this doctrine, when a > party, being a nation or o_tlier , has parted in trade with all its cash, it is so much richer" andlill "tfie better for it; as it retains an equiv- alent. It will be seen, that this distinction is vital to a system of public economy; and that the doctrine above indicated, which fails to recognise it, and which confounds the two things put asunder by it, forcing them, or one of them, into a false position. % * THE NEW POINTS OF THIS WORK. 49 must necessarily be 'fatal to any party, a nation or other, that under- * *^ ^ takes to reduce it to practice. 9. Another of the new points of this work, next to the above- noticed distinction between money as a subject and as the instru- ment of trade, and growing out of it, is the doctrine, that money, as tlie instrument of trade, occupies, in every commercial com- munity, and with every party engaged in commerce, on a larger or smaller scale, comprehending merchants and every private citizen, precisely the same position as do what are commonly and tech- nically called " tools of trade," in any specific vocation, such as a shoemaker's kit ; such as a tailor's, or carpenter's, or mason's instruments ; or those of any other of the mechanic arts ; such as the implements of agriculture, and of the fisheries; such as all the craft engaged in the various modes of navigation ; such as a lawyer's or physician's library, and a surgeon's instruments ; or any others that might be named as necessary to any vocation what- ever, under the name of "tools of trade." It is never pretended, that any business of life can be carried on, without its appropriate "tools ;" or that it can be as well done with an imperfect as with a complete, an ample set. The gold and silver, separated from the great mass of these metals, to be used as money, are placed in this position solely to act as " tools ;" this is the beginning and end of their functions as money. When not so employed, they are of no manner of use, and of no value whatever, in the forms of money, except that for their intrinsic qualities, they are convertible to some of the other uses, in which their value chiefly consists. But while occupying the position and discharging the functions of money, they are mere " tools." Tools of what ? Of trade, of commerce. And there are no other tools for this purpose, since they have been adopted as the common medium. What, then, can a man or a nation do, in the way of trade, without them, except to fall back on barter ? If it be said, that the trade of the world, and between nations, is mere barter after all, still it is no less true, that <^Pi^ gold and silver are the " tools" for negotiating these exchanges, and they can not now be accomplished in any other mode. Every merchant's books are kept solely in the denominations of money ; and there is not at any time a commercial exchange negotiated, in ^ the civilized world, large or small in amount, in which the values jA^ // are not expressed, and the balances adjusted, by the established ^^Ji,^L_— denominations of this common medium. Gold and silver, or their £^€f9^ — /:Hv-(r->t_ ^^^H"^"^ .^A^^^^r^ ACik^ •^^i4.'^«-^^:jUpp4^ C^O . THE NEW POTN-TfTOF THIS WORK. ,^ , "^ C-^ yy^/*''''^^^ representatives, are the " tools of trade," all the world over, in commercial transactions. And yet the Free-Trade economists tell us, that it is no matter if these " tools" be sold ; that it is just the same to the party, as if anything else were sold ; that they are only commodities, and occupy the same position as all other commodities, in trade ; that he who sells his money, gets an equivalent, and therefore can not be injured ; and that it is a positive benefit to both parties. 10. The appropriate functions of money, in defining and making them palpable, whereby it may clearly be seen when money is a subject or the instrument of trade, constitute another point of this work, not before made sufficiently clear, if made at all, for the practical purposes required. We have defined them as constitu- ting the faculties of expressing commercial values and of negotiating exchanges, and we have not been able to find any others. When money is bought and sold, as a subject of trade, it occupies a dis- tinct field, and the same position as other commodities in trade. It is this position of money that has led the Free-Trade economists astray ; or it is this, in the use of which, by their mode of reason- ing, they have led others astray. They have not passed from this field, as they should have done, where money, as a subject, is merely on its march to the field for which it is destined as the in- strument of trade, and for which only it has any value at all as money ; they have not, we say, passed to consider its position and functions in this latter field, where it acts as money, and constitutes the great moving power of the commercial world; but they have only speculated on money, while in its passive condition, before it has begun to do its work — the very work for which it is invoked from the great mass of the precious metals. They have considered it only while on its way to this destination. In all these stages, it is merely a subject of trade. But, when it comes to discharge the appropriate functions of money, it occupies a very different posi- tion, to wit, that of the "tools" of trade. 11. Akin to this, also, is another new point we have been obliged to make, viz., that price is not an attribute of money, does not be- long to it, while employed as the instrument of trade; but that its appropriate functions, as money, are to prize everything else that has a commercial value, or to express that value, and to move such values, or the things in which they are inherent, forward, in the field of trade, to their destinations. We have found it abso- ^"^ » .lately necessary to make this point, in order to rescue that part of r. * THE NEW POINTS OF THIS WORK. 51 the argument on which it bears, from the profound and interminable confusion, into which it has been thrown by the Free-Trade econo- mists, by ringing the changes for ever on the price of money, as high or low, dear or cheap, when, as the instrument of trade, it has no price, and no measure but that of the scales, or of coins, which is the same thing. The world, by irrevocable law, and for suf- ficient reasons, has agreed to gold and silver as the common me- ^€"^^^-6^'^ dium of trade, and in all commercial transactions, when it is em- ^ ployed as such, the question is, how much money shall be given for such or such a thing? And when the trade is concluded, that is the price. Of what? Of the thing. Price belongs to the things for which money is given in exchange ; and not to money, while in the discharge of this office. The confusion is endless, and with- ^ ' f out hope of relief, when price is made the attribute of both, as the ' 3»** *- Free-Trade economists do ; and they do it, apparently, evidently, y t^UW ** indeed, for not having made the distinction between money as a f Li C\ ~ subject and as the instrument of trade. That this practice is an / * i artifice, to make the mind contented, after having been foiced over 7-^1-^ • a sea of doubt and darkness, to land anywhere, we do not pretend to say. But such is the natural effect. 12. We have endeavored to show in this work that an American protective system is identical with Free Trade in its operation and f results, as the latter is generally understood by the people who go for it. This is a point of supreme importance. It is impossible that the masses of the people should understand this subject theo- retically ; they can only understand it as they feel it in experience. They know when they are blessed with prosperity, and when they are oppressed for the want of it, or by positive commercial evils, which cluster around them, and bear heavily upon them. But they can never understand, scientifically, how these different states of things are brought about, and they are governed chiefly in their opinion, as to the causes, by the authority of their party leaders. All they want is, their rights ; and under the captivating name of Free Trade, they are often led astray. They think that in this, as the name seems to import, they have a greater amount of freedom; ( whereas, as shown in this work, the reverse of this is the rule. Protection is the very thing they are after under the name of Free Trade. They want their own rights, and it is impossible they should enjoy them, except as they are protected from the injurious and calamitous effects of foreign cheap labor and foreign cheap capital, which, under a system of Free Trade, are constantly pour- r •i/^f 52 THE NEW POINTS OF THIS "WORK. ing in their products, to throw American labor and American cap- ital out of employment. As to the alleged advantage to consumers, we have sliown, too, that even they are sufferers. We say, then, that. the very objects which most people are in pursuit of by Free Trade, are only attainable by Protection. ^ 13. We have endeavored to show in this work that the destiny "^-^ V' of Freedom generally, and particularly of American Freedom, is yet in the earlier stages of its career, and that, for the people of the Unhed States, it turns chiefly, if not entirely, on the Protection of American interests against the effects of Free Trade. This is a position which, with the light that is capable of being thrown upon it, makes a point of great interest, and can hardly fail to ar rest the attention of profound thinkers and enlightened statesmen, who love their country, and who appreciate the means by which its - rJ^'i • Freedom has been acquired, and by which alone it can be retained and perpetuated. 14. We have, also, endeavored to show that the entire struggle of the American revolution was based on the same principles as, and that the controversy between the British crown and the colo- nies was identical with, that which is now carried on between Free Trade and Protection. This is a point which, we think, can not but be appreciated ; and if so, it is of itself a decisive argument. If the objects contended for in the American revolution are indeed the same as those contended for by Protection, and if Free Trade is but another name, under which the claims of the British crown are revived, it ought to be enough. 15. We think we have seen good reasons for the suggestion made in this work of a state policy existing in Great Britain for nearly a century past, the object of which has been to sow the seeds of Free Trade over the world, that Great Britain might reap the harvest. The history on this point is curious, and full of in- struction. The case supposes, that British statesmen, having observed the benefits of Protection, after they had adopted that policy, and foreseen the rapid relative advancement of their own manufacturing arts to a position that might bid defiance to the rest of the world under a system of universal Free Trade, did conceive and put in execution the far-reaching purpose of employing tiie most eminent talents of that empire, beginning with Adam Smith, and continuing it from age to age in the hands of different persons, making the duty imperative on the Universities, and bringing about a general sympathetic action among their own writers of ability, to THE NEW POINTS OF THIS WORK. 53 propagate this faith, and to impose it upon other nations for the benefit of Great Britain. The point is this : That the British gov- ernment, through agents presenting themselves to the world, in the garb of scientific men, the better to command respect and attention, has, for nearly a century, preached Free Trade, not from a convic- tion of its truth, but as a state policy. So far as the evidence of probabilities can go, the sum of which, when they are chiefly moral, is often the strongest and most conclusive possible, amounting to what is called a moral certainty, this case is one which, when the facts are considered, can hardly fail to make an impression, and peradventure command belief; more especially as, on any other supposition, the facts could not be accounted for, and as, with this interpretation, they stand in the clearest light. It has, without doubt, been one of the best cards of statesmanship ever played in the councils of a nation. If the world had not been duped, the conception would have been stultified. That it has commanded so much attention, is credit enouo;h for its authors and agents, how- y v^ , ever it may not be a very great compliment to those who have sur- rendered themselves to this influence. 16. Akin to this, and involving this, w^e have also made a dis- tinct point of the reasons of the rise and progress of the theory of Free Trade, which is the leading topic of the chapter which treats of the abovenamed point. These reasons, as they have presented themselves to us, and as we have endeavored to present them to others, are not more curious than instructive. The transient prev- alence of this false theory, is no more wonderful, than that false theories of astronomy should have prevailed for ages, for centuries even. The history of error is often as necessary to truth, as that of truth itself. 17. Another new point in this work is, that freedom consists in the enjoyment of commercial rights, and in the independent control of commercial values fairly acquired. The public mind, for cen- turies, has been rife with the vaguest notions of freedom, and was, yT * perhaps, never more so, than at this moment. Under its sacred /^ •g—^ and attractive name, men, to a great extent, have been chasing a %^4JtkA4 phantom — an impalpable abstraction. We do not mean, that none ,t4AJt^^i'%^ of them have had any just notions of it. In that case, we should jfmjLj ^ despair. We only tell what they themselves do know ; we give a /^^\ copy of their experience ; we define the thing, that they may not 't^^'t>4^V4 err in the pursuit. Is it not singular, that freedom has never been Ls-'C^CcMm defined, so as to be palpable, that one could lay his hand upon it? ^^ 54 ' THE NEW POINTS OF THIS WuRK. Nevertheless, we have shown, that the American fathers had just notions of it, as a practical affair, and that the controversy between them and the British crown, was about commercial rights and com- mercial values, exclusively ; that no people, in modern times, have ever complained of their government, or risen up against it, except on these grounds, as will be found when the reasons are sifted to the bottom ; that the object of every s})ecies of despotism, even spiritual, in all times, has been to rob the people of their commer- cial rights and values ; and consequently, that freedom must con- sist in the enjoyment and independent control of them, hy those to whom they fairly belong, who, each one for himself, can say to all parties, to all :he world, to unjust claimants especially, they are rnijie, and not yours. We have endeavored to show, that this is the great question at issue between Free Trade and Protection ; that the former is identical with the claims of the British crown against the American colonies, and that the latter occupies the 'same position with the Declaration of American Independence, as made on the fourth of July, 1776; that Free Trade proposes to revive and continue the same old system, and that Protection as- serts and vindicates the rights of the new ; that these rights were the objects of pursuit by those who aspired to Freedom, for centu- ries before they were gained ; that the epoch of American inde- pendence was the opening of a new and important era as it relates to freedom ; that more than seventy years of that era have elapsed, and the question supposed to have been setded at the beginning, is still in debate, and unsettled ; that the freedom since enjoyed, is rather one of form, than of reality ; that the agitation can only re- sult in its final and complete establishment ; that experience alone, long protracted and disastrous, can settle the question ; that it is not, properly, and can not be, except unnaturally, a question be- tween domestic pardes of this country, but that it is an American question ; that it is purely a question of freedom ; and that every k •» » approximation toward Free Trade, in the United States, is a breach » • in the ramparts of freedom. • "•*•'*. 18. Akin to this definidon of freedom, is the necessity of an • ♦N ^>'' American system to protect it, as another new point in this work. ■* *Vt^ \ ^® ^" ^^°'- """^a" an American system, in the common sense, com- • ^ prehending a policy for domestic purposes ; nor do we pretend, that an American commercial system for foreign purposes, is a new ^i-> T '^ * idea : for that is the necessary character of any protective system ; but we mean a system adapted to the position of those things in THE NEW POINTS OF THIS WORK. 56 which freedom consists ; an American system, properly and dis- tinctively such, to save and protect what has been acquired of free- dom, and to carry out its designs indefinitely, for the future. In all history, freedom has never been established on so broad a plat- form, and has never before had a chance to take up so favorable a position for the consummation of its destiny, as in the United States. But it would be a great mistake to suppose that that destiny is al- ready accomplished. Freedom here is vulnerable and exposed all round, and requires the shield of a truly American system, which is directly opposed to that of Free Trade. As we have determined that freedom — in these modern times at least, which is enough for our purpose — consists in the enjoyment of conmiercial rights, and in the independent control of commercial values fairly acquired ; and it being assumed, that freedom has, apparently, for the first time, in the history of the world, gained a position in the United States, where it can assert these rights and shield these values with effect, it follows, that this position alone is but a stage in the prog- ress of freedom, and that the formation, adjustment, and use of the shield, is quite another affair. This shield we hold to be an Amer- ican commercial system, formed in relation to the foreign world, and adapted to the position of the commercial rights and commer- cial values of this country, in which freedom consists, so that they shall receive no damage from the action of foreign commercial in- terests and agencies. 19. Another new point, which has seemed to us of no, inconsid- erable importance, will be found in the argument we have made, to fj ^ 1 show, that Free Trade is a license for depredation, because it is ^V^JLK^^ based on the principle of anarchy. It inhibits law on a field where -^ more and greater interests are at stake than on any and all others, //>/•<*« and puts the weaker party in the power of the stronger all the world ^*^ ^ over, so far as this domain extends over the rights of parties, which 'TM^ ^* is very comprehensive. By the mere absence of law, it creates a /ItsAJ^ power of wrong, which, for its comprehensiveness, energy, and for g g the remoteness of its influence, is unrivalled among all the known ^""^"^ devices of injustice. On this system, a strong man — strong in his C^'l^'CA^ commercial position — living under one national jurisdiction, may crush hundreds and thousands of weak men, living under another jurisdiction ; and the operation of the principle is without limit over the face of the earth, till the rights of individuals, in countless groups, and those of whole nations, are devastated by it. 20. It has been thought and inconsiderately confessed, by some 56 THE NEW POINTS OF THIS WORK. of the advocates of Protection, tliat the United States can afford Free Trade, in proportion as their manufacturing arts and other improvements shall approach that degree of perfection attained by- rival nations, and that we can ultimately afford entire Free Trade. This confession overlooks the difference in the cost of money and labor between us and rival parties. No matter, though we come fully up to our rivals, in the perfection of our arts and other im- provements, yet, so long as the cost of money and labor here is one hundred per cent, more than in other quarters, so long, indeed, as there is any excess of such cost among us, it must be seen, on a commercial principle which never errs in its results, that Protec- tion may still be required to equalize this difference. It is this difference chiefly, much more, certainly, than any imperfection of skill, that makes Protection necessary in the United States. Some allowances ought doubtless to be made here for the superior advan- tage of our position and state of society ; but these are our own property, and we are under no obligation to give them to others. 21. We do not claim, that the prominence we have given, and the importance we have attached, to the importation of agricultural products and labor, in the form and under the disguise of manu- factures, is a new idea, as we have acknowledged our obligations to others for its elucidation, and cited their reasonings. Neverthe- less, it has never, so far as we have observed, been incorporated with any system of public economy, as a distinct element. It is yet to be seen and felt, in this country, that it is one of the most comprehensive and most important facts to be considered, in the ^ "' debate between Free Trade and Protection. They who advocate Free Trade among us, dwell with much emphasis on the preten- j*^^ sion, that this is an agricultural country, though it might be difficult to see how it is more so than most other parts of the w^orld, Europe ■ **J''«^ especially. They say, agriculture is our interest and our destiny; \ \ I v,\ and yet they advocate the importation of some fifty millions of dollars * ^ a-year of agricultural jjroducts and labor, more or less, in the forms »■ of manufactures, not thinkino- that the agricultural interests of the United States are thereby robbed, we do not say to the full amount of this, but certainly to a very large part of it. Nature, it is said, has indicated the natural occupation of man in North America, to be the culture of the soil. As if nature had not given the same hints in other quarters of the world ; as if the count- less rivers, streams, and waterfalls, in the United States, had given no advice on this point ; as if the lakes, bays, and other inland THE NEW POINTS OF THIS WORK. 57 water channels, did not invite trade, which would have but a slen- der occupation without the arts; as if this great continent, abound- in <*» '^ 66 MEANING OF FREE TRADE. « they being incompatible with such experiments, and incapable of enduring them without instinctive alarm and sensible effect, as if tending to dissolution. The objections to the protective principle are the reasons for it, in the United States. One objection is, that it is unjust. One of its best reasons is, that it is the only way to secure the ends of jus- tice in the case. What could be more unjust, than to reduce Amer- ican labor, in its reward and condition, to that of Europe? It has been averred, indeed, but without evidence, and with the sanction of a mere hypothesis, that it operates unjustly on the consumers of protected articles. It will be shown, in a future chapter, that Pro- tection, in the United States, is no tax; so that the only objection that can be raised, on the score of justice, falls to the ground. It is also alleged, that a protective system — M. Say stigmatizes it as "the exclusive system" — is unfraternal in one nation toward another. How can justice be unfraternal? It is inequality and dissimilarity of condition and circumstance, which render such measures necessary to prevent injustice. Can fraternity either de- mand or impose anything but what is right? Suppose it has been found necessary to protect American labor. The foreign millionaire, who has robbed the labor of his own country of two thirds of its fair compensation, and who by that means can afford to undersell American labor in its own market, complains of a want of fraternity, because the American government will not let him do it ! Frater- nity, in such a case, demands loo much. It is moreover alleged, that so long as nations continue their tar- iffs of Protection, they put off the grand commercial millennium of the world, universal freedom of commerce. This, manifestly, is in some sort begging the question, as if such a millennium were of course really desirable. So long as universal freedom of com- merce would operate unjustly, on account of the relative inequality of like commercial interests in different nations, or on account of dissimilarity in their respective social organizations, there does not appear to be any sound argument in favor of it. A millennium of this kind may be a very fine theme for declamation, when it would be very bad in practice. We could but smile, when, in our hear- ing, one of these declaimers concluded every part of his debate with an opponent, with the assumed triumphant refutation : " But, sir, what you say is contrary to the theory ;" that is, contrary to the Free-Trade hypothesis ! His respect for this assumed dogma, '^yUC^J ^C^V-^^ i- *^ MEAMXG OF FREE TRADE. 67 was greater than his respect for fact ; nor could he give weight to a fact that was contrary to his dogma. Ahhough Adam Smith is called the father of Free Trade, it will be found, that he did not advocate the doctrine in the sense in which it is now used. Indeed, it was not till after the batde of Waterloo and the general pacification of Europe, that this Uto- *y- pian theory was attempted to be put in practice, under the influence of Great Britain, whose counsels were at that moment predomi- nant. Europe was intoxicated with her triumph over Napoleon, by whose sway all her commerce had been deranged, and she run wild in the hopes of a new era. It was a fine chance for British policy to operate, and open the world to her manufactures. The states of the continent, emerging from the chaos and disorder into which trade had so long been plunged, or from the unnatural condidon into which it had been forced by the will of one man, run wild with a feeling of emancipation, and were just in the mood to be caught by the fancies of the Free-Trade theory. They appeared to con- sent to it en masse. But it was not long before sad experience brought them to their senses. Russia came back to the protective system first, under a most able report from the hand of Count Nes- selrode ; the same disappointment and reaction brought into exist- ence the German Zoll-Verein ; until, finally, every state in Europe pracdcally rebelled and broke loose from the fatal charm by which they had been caught. In proof that Adam Smith never thought of Free Trade as now taught, observe the following facts : The first thing which he as- sails, in his work, as opposed to the notions of Free Trade which •then had existence in his mind, is the incorporation of trades or crafts in England, as practised at that time, and as has been con- tinued, to some extent, down to the present period. Most, if not all trades or crafts, of any considerable importance, were incorpo- rated, such as goldsmiths, saddlers, tailors, cabinet-makers, fish- mongers, &c., &c., with certain privileges, such as the right of making their own by-laws, and governing the body in their own way, so that they could limit their numbers, and control the prices of their products and wares. Under this system, great abuses of privilege were imposed upon the public. This, as every one will see, is what we know nothing about in this country, no such thing having ever existed here. It must also be seen, that it involves a principle endrely different from that of duties laid on imports, for the protection of domestic against foreign trades. We have shown, S ■ i ». .. * 68 MEANING OF FREE TRADE. in a subsequent chapter, that such duties in the United States cheapen the prices of articles protected, instead of raising them, and in a thousand ways benefit all classes of the community, not excepting the consumers of the protected articles. And yet it was ao-ainst this incorporation of trades, a thing so entirely different, a ^^ mere municipal regulation, bad enough certainly, that Adam Smith broke his first lance, in the cause of Free Trade. That this was always in his mind, as a starting point, and as a general basis, ap- pears from the facts, that he begun with it in Book I. Chapter X. Part 2, and is still using it, in Book IV. Chapter III. Part 2, to enforce his Free Trade doctrine, in such terms as the following : " As it is the interest of the freemen of a corporation," such as the goldsmiths of London, " to hinder the rest of the inhabitants from employing any workmen but themselves, so is it the interest of the merchants and manufacturers of every country to secure to them- selves the monopoly of the home market," &c. Having started with this original idea, it ever after seemed impossible for him to distinguish between the principle of these municipal corporations, and that of a corporation embracing a whole nation, where the latter chooses to take care of itself in regulating its foreign commerce. The cases are totally different, and yet Adam Smith always reasons as if there were no difference. Next we find him very justly declaiming against companies in- corporated for foreign commerce, with exclusive privileges, such as the Hudson Bay company, the South Sea company, the Royal African company, the East India company, &c., «&c. All these, clearly, were monopolies, and well worthy of being denounced ; and it must also be seen, that there is no likeness, in fact or princi- ple, between such examples of restriction and the protective policy of a nation. At another time, we find him railing against laws pro- hibiting the export of domestic coin, though the export of foreign coin and bullion was allowed. Here he lighted on something which was not so easy to manage ; and like an excited person, findino- it in his path, be resolves to put it out of his way. It is true, the law was a foolish one, and so far as it was intended to prevent the payment of balances against the country, it was unjust. No nation should allow itself to be caught under the necessity of such a law, or of bank suspension. It was because there had been too much Free Trade, that Adam Smith took occasion 10 make an argument in favor of it.^ FREE X«.ADE A LICENSE FOR DEPREDATION. 69 0^ /^^"^&^ (C^!^'^>^'t^^^^t^^^--Pt^ CHAPTER IV. FREE TRADE A LICENSE FOR DEPREDATION ON THE RIGHTS OF OTHERS. This a New Position. — It is based on the Principle of Anarchy. — The Essence of Free Trade is a Plea for no Law over an important and wide Domain of Interests. — Defini- tion of this Domain. — Nations are Commonwealths, and may be vulnerable or injurious, in their Relations to each other, the same as Private Individuals in each. — The Defensive of Man's Position, in all Circumstances, requires most Care, and costs Most. — Time only, and protracted Experiment, will determine the relative Merits of Free Trade and a Pro- tective System. — The Point of Vulnerability in the United States, opened by Free Trade. — The great Problem one of Fig^ures and Q,iiantiiies, that can be worked out. — The Negative Losses occasione >* * * ■^. 94 REASONS OF THE RISE AND PROGRESS ments can not, at first, be sufficiently large to enable the div^ision of employments to be carried to any considerable extent; at the same time that expertness in manipulation, and in the details of the various processes, can only be attained by slow degrees. It ap- pears, therefore, reasonable to conclude, that such new beginners, having to withstand the competition of those who have already arrived at a very high degree of perfection in the art, must be im- mediately driven out of every market equally accessible to both parties ; and that nothing hut. the aid derived from restrictive regu- lations and irrohibitions, will be effectual to prevent the total de- struction of their establishments,^'' &c. The passage in italics tells the story, and discloses the doom assigned to us, and to all nations, which adopt the Free Trade commended to them by ihe iiensioned economists of Great Britain. And this the man, now extant, and rightful successor of the same class, in the line from Adam Smith, who, from his pulpit in Lon- don, preaches Free Trade to all the world, as the gospel of the Gentiles, but designed only to save the Jews. He testifies to his brethren, sub rosa, as above, that it will save no others, and that all nations, except the British empire, will be lost by it. The motive of the British government, for such a systematic and stupendous fraud, as is here supposed, was a potent one : It was to become the richest nation in the world — in that way, the most powerful — and to maintain that ascendency. It may be true, that the argument of this chapter impeaches the discernment of some portion of the American mind, of which one could wish to think better. That so many learned doctors and statesmen could have fallen so easily into this snare, may, at first sight, seem strange. But a moment's reflection will show, that it is not at all strantre. The stratajrem would never have succeeded, if it had not been planned to catch them. Public economy, as all must feel, who shall have attentively followed us through this vol- ume, is one of the profoundest subjects, of an earthly origin, that^ ever engaged the human mind. It is but recently, compared with the history of most of the sciences, that it has set up a claim to be one of them. It can scarcely be said, indeed, that this claim was urgently insisted upon, till the hatching of the British state policy which is alleged above. It was meet, for the purpose in view, that it should assume this elevated and commanding position, to excite deference and respect, as a mere pretension. Such claims as these are not usually scrutinized at once, when they make a descent upon *. ^ «■ OF THE THEORY OF FREE TRADE. 95 the human mind in such an imposing shape — especially if they come from respectable authority. It is natural to receive them in faith for a season, when they are accompanied with the sanction of great names. It is the habit of the American mind — too much so, perhaps — to defer to European, especially to British, authority, in matters of science. Is it strange, tlien, that this pretension, so cunningly devised, and backed with names of such repute, should have been transiently entertained among us, by the mere force of authority? Certainly it is much more reasonable to suppose this, than now, in all the light on this subject, to retain this species of faith. A word is due to the influence of the pride of science on this subject. We have already given reasons to show why public econ- omy, hitherto, has had no claim to be dignified with the name of a science, and particularly that the Free-Trade hypothesis can not possibly be a science, first, because it is a mere hypothesis still ; next, because all its propositions are empirical laws ; and thirdly, because they fall under that category of empirical laws which for ever precludes them from being reduced to a science. But, in every department of inventive research, will be found men of intellectual obliquity, and of loud pretensions, who some- times get a theory in their heads, which they baptize with the name of a science, as in the case of Free Trade, then mount the hobby, and drive it with furious intent. True science, though always modest, is undoubtedly a thing of very just pride. As public economy has been installed ampng the sciences by British economists, the more extravagant the pretension, as to form and substance, so much the more captivating is its influence over that class of persons to which we have alluded above. Sobriety would as little suit their taste, as the labors of a genuine science would suit their habits. They want something that will strike the fancy, something that will prove itself; they want the philosopher's stone that will turn everything into gold ; and this they find in Free Trade. It is a beautiful theory to such minds ; what could be more charming? Besides, it costs nothing in the way of verifica- tion ; for it has but one proposition. It is a science that stands on one leg. It never budged an inch, and never can, as such. Never- theless, it is very captivating to those who think it is a science, and they dance around it, chanting their hymns of satisfaction, and do- ing homage as to a symbol of mystic import. Did ye never witness the exceeding delight, the ecstacy of these savans, and with what 96 REASONS OF THE RISE AND PROGRESS airs of tnuini)li they put to you their one-legged concern? They evidently think it a perfect beauty ; it is a science, they say. Born in the closet, these notions have been transferred from one closet to another, and re-elaborated there, by the brains of every succeed- ing theorist, with all the fervor and satisfaction of scholastic pride, without the slightest knowledge of the practical operation of these principles in the common affairs of life. Like greenhouse plants, which perish before the rude action of the changing seasons, when exposed, so these Free-Trade principles, applied to the practical concerns of the commercial world, bring forth nothing but unripe or blasted fruit. Men are sometimes found in eminent positions, even in connex- ion with our colleges and universities, who are compelled to borrow the caj^ital of ideas in which they trade, in the way of teaching and writing. This capital, so Air as this subject is concerned, as before shown, is furnished to their hands, in the greatest abundance, by British authorities. We have seen how it began to be formed, nearly a century ago, under the auspices of Adam Smith ; what state reasons existed for laying this foundation ; how it has been carefully husbanded, from that time to this, as a British state poli- cy ; how the greatest talent of the British empire has been seduced into this service, and kept industriously employed ; and how this feeling — a mere feeling — has become an instinct of the British nation, that Free Trade in all the world is necessary to their pre- eminence. Nor do they preach this doctrine insincerely, though as yet they have never practised it ; but they are prepared for it, as shown in the extract from Mr. M'Culloch above, and as we have shown in a subsequent chapter, as soon as a general consent can be obtained. They have gained a position which enables them to afford it, and which will insure their advantage, their ascendency, over all other nations, on a Free Trade platform. This vantage- ground has been the constant aim of British statesmen for seventy- five years. Their writers, and their press in all its forms, during this period, have made the best argument that could be made ; and their example has seduced many continental waiters, and some por- tions of the continental periodical press, into their footsteps. There is no nation, whose authority in learning and science, is more com- manding than that of Great Britain — none, certainly, more impo- sing in relation to us, who are of the same family, and who speak the same language. When we borrow ideas from any quarter, we more naturally borrow from that. All the most eminent British OF THE THEORY OF FREE TRADE. 97 authorities on public economy, are no sooner out of the press in London, than they appear here. Thence our economists, for the most part, borrow their capital on this subject ; and our schools and colleges are greatly influenced and swayed by these two com- bined agencies, foreign and domestic. Here is to be observed the action of the simple, but potent principle of subservience to author- ity, laid down as one of the rules at the beginning of this chapter, to determine the reasons of the rise and progress of Free Trade. Ignorant of that great state policy which brought these works into existence in Great Britain, Americans become its victims, where they think they are getting a science all made at their hands. We will not say the subserviency, but the servility with which these notions of Free Trade have been copied in this country from Brit- ish authorities, by Americans occupying eminent places in our seminaries of learning, and who have propagated them to the ex- tent of their abilities and influence, is not simply a subject of regret for the evil which it does to the country, but of humiliation at the sight of such obsequiousness. From this higher department of the American mind, as it has been brought into action on this subject, we are forced to descend for a moment, though with regret, into the arena of party politics, to see, if the prevalence of Free-Trade principles in that quarter, can be accounted for by one or more of the rules laid down at the beginning of this chapter. We believe, that the instincts of the American people, left to themselves, are necessarily on the side of Protection, and that nothing but some special and unnatural cause, some violent shock, could have carried them over, even for a tran- sient period, to the other side. The entire mass of the free labor of this country feels, and has ever felt, that it can not and will not be placed side by side with the pauper labor of Europe, to be fed and clothed as that is fed and clothed, to be housed as that is housed, and starved as that is often starved. Yet Free Trade pro- poses this — we say, proposes it — because, if figures do not lie, it must necessarily lead to that result. How, then, has it happened, that a great and for a long time dominant party of this country should have adopted, and put into operation, by their chiefs and leaders, the doctrines of Free Trade as a public policy ? We propose to answer this question, under the guidance of the rules we have laid down. A mere accident in our political history, but a very comprehen- sive and momentous one, has contributed more, perhaps, than any 7 98 REASONS OF THE RISE AND PROGRESS or all things else, to propagate among the people of this country, for a season, the influences of the Free-Trade theory. We mean the accidental position of the chief magistrate of the United States, arising, in 1831, out of a personal feud between him and the vice- president. The president, in vindicating the, executive authority, in the critical emergency of the country that followed, went so far as to render it convenient to himself, as a candidate for re-election, to appear afterward to recede somewhat, till he was supposed, ap- parently with justice, to have taken ground for Free Trade ; and his unbounded popularity carried his party with him in that direc- tion. For the first time, in the history of the country — it may be hoped for the last — this great American question, which ought for ever to unite all Americans, became, most unnaturally, a party question, and has been maintained as such, from that time to this, though with a manifest decreasing zeal for the Free-Trade cause among the people. To prove that this revolution in popular opin- ion was caused, first, by the social position of the president, and next by his authority over the party, it is only necessary to observe, that, down to that time, both he and they were among the soundest and strongest protectionists which the country has ever had in its bosom. The causes of the change, therefore, were undoubtedly purely moral, being a change of social position with the president, and subservience to his authority in his party. It is altogether unnatural, that any portion of the people of the United States should be the advocates of Free Trade, as all their instincts must necessarily be against it, when the subject is understood by them. It is not only the great question of the age, but it is emphatically an American question. It is the position and interests of the Uni- ted States which have made it the question of the age, more than all other causes. European, especially British statesmen, know well, and have long foreseen, that, if freedom is not suppressed here, it will grow up there, and that freedom consists, as we have maintained in a subsequent chapter, in the great strife of the world for the rights of labor, for commercial rights, for the enjoyment and independent control of commercial values by those who create them. The great aim of British statesmen is to bring American labor down to the same level with European, which can only be accomplished by a system of Free Trade. But this accidental and relative position of the two great political parties in the United States, on this question, induced as above stated, and which can hardly, in the nature of thirjgs, endure long, * OF THE THEORY OF FREE TRADE. 99 has forced the people to act upon it, in the great pohtical contests of the country, before they understood it. It is a question, in the consideration of which, if the people generally are forced to go farther than its simplest forms, where their instincts will decide for them, and decide most safely, infallibly, their minds will be embar- rassed,' and they will be compelled to rely on one of two modes of decision : — either to trust to their party leaders, or to wait till ex- periment shall prove in which of the two courses of public policy their true interests lie. This is precisely the position, unfortu- nately, in which the people of the United States have been placed, by making this question a party one. Neither the people, nor their party leaders, as a body, have understood the subject. That was impossible. And nothing of the merits of the question was ever decided, in the result of popular elections, so far as it was in- influenced by it, except as the people were instructed by experi- ence, as for example in 1840. All other influences have been those of authority only. Without having the remotest idea of the real character of Free Trade, in its practical operations, the people, very extensively, have been made to believe, that it means to buy where you can the cheapest, and sell where you can the dearest, which is very natur- ally thought to be right; and that protection is a tax, which every one naturally objects to. In this view of the subject, which we have elsewhere proved to be incorrect, it is not strange that dema- gogues, and a party press devoted to Free Trade, under the aus- pices of one of the most popular chieftains that ever swayed the sceptre of chief magistracy in the United States, should have led off" a majority of the people, for a season, to believe in this doctrine, till convinced of their error by sad experience ; nor is it strange, that the same mode of reasoning should still continue to have its influence, so long, unfortunately, as this is made a party question. But, as it is, in fact and properly, an American question, in relation to the foreign world, and has unnaturally been forced into the posi- tion of a domestic controversy, it can not always be held there. Sooner or later, the people are doomed to learn by experience, that the protection of American labor and arts, against foreign labor and arts, is indispensably necessary to their true interests. 100 GREAT BRITAIN ALONE PREPARED FOR FREE TRADE CHAPTER VI. GREAT BRITAIN THE ONLY NATION THAT IS PREPARED FOR FREE TRADE, AND THE UNITED STATES THE LAST THAT CAN AF- FORD IT. The Importance of Position, in all Competition, illustrated by familiar Examples. — Adam Smitli's Illustration. — The Tribe or Nation that is ahead in Manufactures, can keep ahead, by Free Trade. — The first Lessons on Protection to Great Britain. — The Way of her Beginning, and its Results. — It was by this System that she was able to triumph over Napoleon. — Great Britain was Poor when she began her Protective System. — Behold the Consequences. — Great Britain always consults the Parties interested in Protection, and complies with their Wishes. — Not so the United States. — A remarkable Example of turning Witnesses out of Court. — Briti.sh Manufacturers, from the Strength of their Posi- tion, have consented to dispense with Protection. — M'Gregoi-'s Evidence and Advice to the Biitish Government. — M Culloch's Confession. — Action of the States of Europe, after the Overthrow of Napoleon, in Favor of Free Trade.- — Their Repentance. — Repent- ance of Russia. — Manifesto of Count Nesselrode. — The Zoll Verein Treaty. — Napoleon's Policy. — The Policy of the European Continental Nations against Great Britain, defen- sive -—The greater Cost of Money and Labor in the United States an insuperable Bar to Free Trade. — The Weak, not the Strong, require Protection. — British Free Trade, not Free Trade. — British Differential Duties retained. — Effect of Commercial Treaties. —The Whole Truth in few Words. As great things are illustrated by small, aad things remote by those which are near and more familiar, we shall probably approach the main points of the subject of this chapter, with more advantage, and in clearer light, through examples with which most persons are familiar, and which all will be able to appreciate. A man who has acquired a standing in any trade or commercial business, has an advantage over one who is just setting up. Who does not see that? An apprentice, who has worked but a little while at his craft, can not do so well as an accomplished journey- man. One mechanic is often preferred to another, because he is more skilful, and turns off better work ; and one of two, equally skilful, will outdo the other, and get more custom, because he has more capital, and can make more display, and more noise, to at- tract attention. Fositiori, in every trade and business, relative to others in the same pursuit, is much — is often everything for rela- tive advantage, in the way of competition ; and skill and capital are always of great account. By time, application, skill, capital, and iws'ition, one is constantly taking lead of another, in a kindred, or in the same pursuit. Who does not know the position of Stew- M* UNITED STATES LEAST PREPARED OF ALL NATIONS.. 101 art, in New York, as an importer, jobber, and retailer of fancy fC^^ and other dry goods? It has taken him a long time to acquire ^T'T^^ that position. He has worked for it, taken great pains, acquired ^t^^C* great skill and taste, and from a small beginning, has grown rich ; C ^A has erected a magnificent marble edifice, with sumptuous fittings ; *y , employs a hundred clerks; has reduced everything to system, to y"^*'^^ go like a clock ; and he is able, by all his experience, with his f''€i04^ capital, and by blending importing with jobbing and retailing, to M/t/t't sell a litde cheaper, and a little better. So, at least, it is believed ; ^^ J and that is enough. His i)os\Uon is without a rival. Nobody can ^*4r%' compete with him. Stewart, among the New York merchants of the same class, is like Great Britain among nations. He necessarily keeps in check others, who, but for him, would rise. It is admitted that it is hard for others, in the same line of business, to stand up against him, and that they suffer great disadvantage from the superiority of his 'position. It is singular, though characteristic, that Adam Smith, in arguing against a protective system — he is at one time on one side, and at another on the other side — should have advanced the very princi- ple we are now endeavoring to elucidate as constituting the neces- sity of such a system. He says : " A rich man, who is himself a manufacturer, is a very dangerous neighbor to all those who deal in the same way." We not only grant Adam Smith his principle, here laid down, but we claim and appropriate it. Great Britain occupies, in relation to her neighbors, to all other nations, precisely the position of Adam Smith's " rich manufacturer." She " is a very dangerous neighbor to all those who deal in the same way." It is never true, that the strong want protection against the weak ; but it is always true, that the weak want protection against the strong, whoever may be the parties, or whatever the particulars in which one is strong and the other weak. In the present case, the parties are nations, and the subject of comparison is the state of their manufactures. That nation which is most advanced, and oc- cupies the strongest position, in this respect, has the advantage over all others, and will certainly beat them, unless they protect them- selves, in proportion as they are behind and weaker. This is the case from the first remove from a state of barbarism, to the highest attainments of civilization. The tribe that starts first in any manu- facturing art, will have the advantage over the neighboring tribes which have done nothing in this way, and will desire that the latter 102 .GREAT BRITAIN ALONE PREPARED FOR FREE TRADE : r^-v should remain where they are as producers of the raw materials. ^^ - The manufacturing tribe will be in favor of Free Trade, because, ' ^^ '^i in that way, it can make the other tribes dependent for those fine p. JJi things, which will be wanted as soon as they are seen, but which *^* can not be produced at home, because they do not know how to •• <■ do it. They must, therefore, work, and pay with much labor for ^ V*; "^^ that which costs the manufacturing tribe but little ; nor can the '»^ ;V other tribes ever come into competition, under a system of Free "■^^ Trade. They will require a protective system, not only to start, • * * but as long as they are behind their more skilful neighbor. Supe- ►* ^ • rior skill, in this particular, is superior strength, which nothing can balance but the protection of the weaker party. Great Britain began a new career, some two hundred years ago, or more, then a poor nation — at least not rich — with her protec- tive system, under the teachings of Sir Josiah Child, Joshua Gee, * and others of their school. She found, as these men taught her, that for want of a protective system, other nations were drawing away her cash. The doctrine on which she then began to act, will be understood by the two propositions, on which Joshua Gee, who wrote, as he said, " by order of the lords of trade," founded his work. They are as follows : " 1. That the surest way for a nation to increase in riches, is to prevent the importation of such foreign commodities as may be raised at home. 2. That this kingdom is capable of raising within itself, and its colonies, materials for em- ploying all our poor in those manufactories, which we now import from such of our neighbors as refuse the admission of ours." This author gave an account of the trade of Great Britain with all parts of the world, and showed where protection was demanded, and should be applied, to check unfavorable, and bring favorable bal- ances. The protective system of Great Britain, appears to have been begun in earnest about this time, not far from the middle of the first half of the seventeenth century. Previous to that time, some of the continental nations were much ahead of her in man- ufactures ; such as France, some parts of Italy, and particularly Flanders, directly opposite, on the other side of the channel — all which drained her of cash, to a most inconvenient extent. One of the first steps of reform was to import sheep from Flanders, and to persuade Flemish manufacturers to come along with them ; after which, when wool was grown at home, and manufactures of wool- len were set up, under protective laws, severe penalties were enacted against the export of sheep or wool, for the second offence cutting UNITED STATES LEAST PREPARED OF ALL >:ATT0NS. 103 off the hand, and for the third death, which are still on the statute- book, though not in force. Joshua Gee's doctrine was no sooner reduced to practice, than its charm and power were profoundly and comprehensively felt, in the increase of private and public wealth. The protective policy then began to be applied in all directions, and soon grew up into a system, till Great Britain finally became, in the eighteenth century, a great manufacturing nation. She had emerged, by the influence of this system, from a state of depend- ence on other nations, to independence, and in turn, began to make other nations tributary to her, as she had been to them. It was the vitality and power of this system, which sustained her under all the burdens of Her expensive wars, in the eighteenth century, still rising, and still expanding her strength and power by the same cause. Her power was in her arts, and by her machinery one man did the work of two hundred, so that a nation of twenty-five millions of people, was equal to one of hundreds of millions. It was by her protective system, that she was enabled to sustain herself and her continental allies, for so many years, and with such un- shaken firmness, against the gigantic power of Napoleon ; and it was by this that she finally triumphed. It need not be said, that Great Britain is now the richest and most powerful nation in the world, and she probably commands more active capital than all the rest of Europe. No matter for her \ ) national debt, as it is all owned by her own subjects. She is none ^ , the poorer for that; but the fact, that her credit has never failed, and still continues firm, under the burden, makes of it an additional evidence of her immense and untold wealth. She commenced her protective system, in the seventeendi century, if not a second rate nation, as to wealth and commercial greatness, at most on a par with many other nations. In less than a century, she began to display her superior strength ; and in one hundred and fifty years, her commercial credit was a match for the whole world. During all this time, her protective policy was never relaxed, but was steadily improved and extended, till it embraced every commercial interest of her subjects, in relation to foreign parts. Her board of trade has always been the medium of communication between the interests of her people and public legislation regarding those in- terests ; and no manufacturing art or enterprise ever asked protec- tion at her hands, without receiving it ; nor was protection ever taken away from any, without the consent of those engaged in it, the case of the corn laws excepted. She has ever been wise 104 GREAT BRITAIN ALONE PREPARED FOR FREE TRADE : enough to consult, through her board of trade, the wishes of the parties concerned, as being the best and most competent judges of the amount of protection wanted, or whether any was wanted — a remarkable contrast to a fact that occurred in the history of the twenty-seventh congress of the United States, when, on motion of the Hon, J. P. Kennedy, that a committee be appointed to take evidence for the adjustment of the subjects and rates of duty in the tariff of 1S42, a member from Tennessee moved an amendment, that no evidence should be received from manufacturers ! Thai is, that the only witnesses acquainted with the facts, should be ex- cluded from court ! By means of this system of protection in Great Britain, opera- ting for two centuries, with constant improvements and addi- tions, as occasions required, the British manufacturing arts have acquired a perfection of skill, and a strength of position, which those of no other nation can rival, and before which the latter must fall, on a basis of Free Trade. The British government have long been aware of this ; and as shown in the preceding chapter, have been aiming at this, for more than half a century, by the employ- ment of a pensioned corps of Free-Trade writers of consummate abilities, whose doctrines, like British manufactures, are fabricated, not for home consumption, but for foreign use, and for foreign markets. As above remarked, the British government has always imposed duties on manufactured goods competing with their own, at the request of the manufacturers, and has never reduced or removed them, without consent of the interested parties. It was not till wuthin a (ew years that the British manufacturers have felt their position to be strong enough to do without protection. In 1839 and 1840, the deputations of the manufacturers who annually ap- pear before the board of trade, to represent their respective in- terests, and as witnesses of fact on this great question, expressed to the board their willingness to give up the protection that had been afforded them, the manufacturers of glass and silk only de- clining to concur. Precisely in accordance with this representation, the protective duties have since been abolished, except in the cases of glass and silk, which are retained. It is easy to see — it is, indeed, a simple matter of recorded fact — that there has been an understanding between the British man- ufacturers and their government, on die subject of the abolition of protective duties, as much as before, in their enactment, measure. UNITED STATES LEAST PREPARED OF ALL NATIONS. 105 and continuance. Both parties had come to the knowledge, that, on account of the perfection of the British manufacturing arts, of their superiority in skill over those of other nations, and on account of the position which they occupied in the hands of great capitalists, there was no risk in this abolition of protective duties. They had, indeed, an exact measure of the risk in the gauge of duties realized from this source, Avhich had come to be trifling, and were the re- sult of accident, or of any other cause than that of competition in trade. It was also well understood, what would be the moral effect on the world, by this course of procedure ; that, on this basis, they could set up a challenge for Free Trade to all nations, with the show of an example ; that they could say, we have be- come converts to our own writers (pensioned for that very purpose) on public economy ; and above all, it was well understood, that the acceptance of this challenge by other nations, would result in the sole advantage of the party which threw down the glove, and the overthrow and ruin of those who should take it up. The position of the challenging party, was one of conscious strength and superiority. Both the government and the- manufacturers knew, that no nation could compete with them, on a platform of Free Trade, because all other nations were, some an age, and some a century, behind them, in skill, and in strength of position ; and they knew, that such opponents would require, at least equal time and equal chances as had been enjoyed in Great Britain, under a system of protection, to be prepared for such a strife. There was another great and important understanding between British manufacturers and the British government, in the adoption of this measure, viz., the abolition of the corn laws. These laws were the only obstacle in the way of the complete triumph of British manufactures over all the world, on the basis of Free Trade. It had been seen, that British arts and British capital were going abroad, to set up where food was cheaper, and vie with the home arts and home capital. M'Gregor, one of their highest authorities, and who had been made a principal witness before the committees of parliament on this subject, had told them, that, "from $20,000,000 to $25,000,000 were annually drawn from the kingdom, by persons of fortune, who go to France, Italy, Switzer- land, and other parts of the continent, where they can live better, at less expense than at home. Now," said M'Gregor, " provided our commercial system were of a more enlightened character, [free trade in corn], measures would speedily be adopted, which lOG GREAT BRITAIN ALONE PREPARED FOR FREE TRADE: would have the effect of assimilating the prices of necessaries In England and on the continent. There is at present nothin- to stop the progress of manufacturing industry on the continent of Europe; and time only is required to enable foreign manufac- turers to produce a sufficient supply of goods to supplant us. We might, in every manufacture we now possess, meet forei-n coun- tries m every market of the world, and in most instances, mider.ell them." Another writer «dds: "We allow the resources which would enable us to accomplish this, to be counterbalanced by pro- tecting duties on the importation of food." And th'eir present <.reat pensioner, M'Culloch, who preaches one doctrine for home,\nd another for foreign parts, says in his commercial Dictionary : " Our establishments for spinning, weaving, printing, bleaching, etc., are infinitely more complete and perfect than any that exist elsewhere, etc. See pp. 93 and 94 for this important extract. Here, as need not be said, the plan is fully disclosed, confessed, promulgated-not, indeed, for the advice of foreign nations, though It transpires mcidentally-but as an incitement to domestic le^isfa- tion. M'Culloch, who knew, has told the exact truth, which brinc^s us to one of the main points of this chapter, viz., that Great Britain IS the only nation prepared for Free Trade. To install her man- ufacturing arts in this impregnable position, she has made one great sacrihce, that of her corn laws. It will be seen, therefore, that this abolition of duties on man- ufactures, and on bread-stuffs, vaunted forth as Free Trade to all the world, IS in the direct line of her policy of protection, sustained for two hundred years, by which she has become the richest and most powerful nation in the world, and that it is all done on the principle of protection ; that is, to protect and further her own interests, and the interests of her manufacturers and artisans, against all the world. Great Britain had arrived at the point, in her com- mercial history, when Free Trade, in these particulars, was her true policy, as much so as protective duties had formerly been Protective duties once, and the abolition of them now, .o far as carried out, are both based on the same principle, viz., interest, policy, demonstrated by taking up a position adapted to a chano-e of circumstances, in relation to the rest of the world Grelit Britain was not only prepared for this modification of her policy by having shot far ahead of all other nations in her manufacturing arts ; but with this advantage, on the basis of Free Trade as a general rule among all commercial states, she could distance them UNITED STATES LEAST PREPARED OF ALL NATIONS. 107 yet farther and more rapidly than before, as they would have no Protection against lier, when she no longer needed it for herself ao-ainst them. It would be the skilful contending against those who are less skilful ; the strong against the weak ; the well-fortified in their position, against those who have yet to gain a position ; the issue of which could not be doubtful. It remains to show, that Great Britain is the only nation prepared for Free Trade — or rather to show it more clearly, as it can not but be in part manifest already. It is remarkable, though not gen- erally known, that, although Great Britain had been preparing the way for more than half a century, by her pensioned writers on pub- lic economy, for the proposal of Free Trade to the world, it was never whispered from her public functionaries and statesmen, till within a few years. The thorough doctrine of Free Trade, in- deed, was never promulgated to the world, till after the battle of Waterloo ; which event is not mentioned as having any con- nexion with this full disclosure, but as an epoch of European history, subsequent to which, some efforts were made, by the states of Europe, for a more liberal commercial intercourse with each other, secretly instigated by the British cabinet. Russia plunged into it headlong, in 1818, and was obliged to tread back, in a great effort for her own rescue, in less than four years. In a public document, of 1822, from Count Nesselrode, Russian prime minister, we find the following graphic description of the state of things in that empire, produced by the relaxation of their protective policy: "Agriculture without a market, industry without protection, languish and decline. Specie is exported, and the most solid com- mercial houses are shaken. The public prosperity would soon feel the wound inflicted on private fortunes, if new regulations did not promptly change the actual state of affairs. Events have proved, that our ao-riculture and our commerce, as well as our manufac- turing industry, are not only paralyzed, but brought to the brink of ruin." The remedy was promptly applied, the protective policy was re-established, and now reigns, in that empire, more firmly than ever. The Zoll-Verein treaty of the German states, formed for mutual protection against Great Britain in particular, and against the world generally, is the result of the same necessity. They have found it necessary to have systematic, as well as permanent protection. The following citation from a speech in the British parliament, delivered some ten years after the peace of Europe, is instructive here ; and certainly it is frank : " It was idle for us to 108 GREAT BRITAIN ALONE PREPARED FOR FREE TRADE: endeavor to persuade other nations to join with us in adopting the principles of what was called ' Free Trade.' Other nations knew, as well as the noble lord opposite, and those who acted with him, that what we meant by ' Free Trade,' was nothing more nor less than, by means of the great advantages we enjoyed, to get a monop- oly of all their markets for our manufactures, and to prevent them, one and all, from ever becoming manufacturing nations. When the system of reciprocity and Free Trade had been proposed to a French embassador, his remark was, that the plan was excellent in theory, but, to make it fair in practice, it would be necessary to defer the attempt to put it in execution for half a century, until France should be on the same footing with Great Britain, in ma- rine, in manufactures, in capital, and the many other peculiar ad- vantages which she now enjoyed. The policy that France acted on, was that of encouraging her native manufactures; and it was a wise policy ; because, if it were freely to admit our manufactures, it would speedily be reduced to the rank of an agricrdtural nation ; and therefore a poor nation, as all must be that depend exclusively upon agriculture. America acted, too, upon the same principle with France. America legislated for futurity, and was prospering under this system. In twenty years America would be independent of England for manufactures altogether. . . Since the peace, France, Germany, America, and all other countries, had proceeded upon the principle of encouraging and protecting native manufactures." Napoleon established manufactures in France as they had never before existed there, and it is still found necessary to protect them. The more that Great Britain makes her demonstrations of Free Trade, so much the more does every nation in Europe find it necessary to protect itself — to stand on the defensive — as she occupies a position from which she can beat them all. Neverthe- less, there is a substantial equality among all European nations, as to the joint cost of money and labor, which are the two comprehen- sive elements of every commercial system, and the two powers em- ployed in the commercial strifes of nations. On this account, if Free Trade would do anywhere, it would do among and between European nations. But it will not do even there. Much less will it do between Europe and the United States, when the joint cost of money and labor in this country, is more than a hundred per cent, greater than their cost in Europe, being so much against us ; and for which there could be no possible compensation, under a system of Free Trade, not to speak of the imperfect state of our UNITED STATES LEAST PREPARED OF ALL NATIONS. 109 manufacturing arts, as compared with those of Europe, and more especially of Great Britain. It is this difference of cost of money and labor in the United States, as compared with their cost in Europe — the necessary- consequences of which are abundantly considered in subsequent chapters of this work — it is this, we say, which establishes the sec- ond proposition at the head of this chapter, to wit, that the United States are the last nation that can afford Free Trade. As long as this difference exists, that is, as long as the states of society in these two quarters are so different — which is the same thinir, or rather the cause of the difference in the cost of money and labor — the United States can never afford Free Trade. Free Trade must necessarily annihilate this difference in the states of society, not by bringing up European society to the American standard, but by- reducing the latter to the level of the former, by the annihilation of the difference in the cost of money and labor. It is elsewhere shown, that the great thing to be maintained by a protective system in the United States, is American freedom, which consists in main- taining the rights of labor ; that this was the great and sole object of the American revolution, and all that was acquired in the estab- lishment of American independence. Grant that the United States can afford to lose all this, then it is conceded, that we can afford Free Trade. Some further light may be thrown on this subject, by consider- ing the position into which American manufactures, as a whole, would be thrust, on a basis of Free Trade, and the position into which the separate establishments would be thrust, under the influ- ence of the same cause. As a whole, they would be positively injured, crippled, by the superior, more advantageous, and more commanding position of British and other foreign manufacturing arts, not to speak of the difference in the cost of money and labor, which is the most potent cause of all. They would be curtailed, restricted, and impaired. The home demand for the aCTicultural products of the country — which, as shown in another chapter, is by far the best market in every respect, but more especially in the amount of consumption — would be instantly and greatly curtailed, continually diminishing ; the great cause of private and public wealth, arising from multiplying arts and kinds of labor, would cease to operate; and investments of capital in home manufactures, would be checked, abridged, and greatly diminished, by the ne- cessity of diverting it to other channels. But the most calamitous 110 GREAT DKITAIX ALONE PREPARED FOR FREE TRADE : effect would fall on the weaker manufacturing establishments. Low- ell, and some other manufacturing towns, equally strong in their position, might, and probably would stand, and be able to breast the storm, })ositively weaker, but relatively stronger, in conse- quence of the overthrow of innumerable infant establishments, which a protective system had started, and which nothing but a protective system can sustain. The general prosperity and wealth of the country depend more on these small and weak establish- ments, than on the great and strong ones, because as a whole, they have more capital in them, employ more labor, and give a greater amount of activity to the industry of the whole people. The weak are naturally allied to the weak, and they stand or fall together ; while the strong are comparatively independent, and can stand of themselves. That public policy which protects the weak, protects all, and is the best possible policy. Is it to be supposed, that the almost innumerable small and weak manufacturing crafts of this country, in the infancy of their existence, and with all the imperfec- tions of their arts, can maintain their position, against the superior and more perfect arts of Great Britain, on a basis of Free Trade, when, besides this disadvantage, itself enough to crush them, Amer- ican manufacturers have to pay twice as much for money and la- bor ? It is preposterous to suppose it can be done. While, therefore, the strong manufactures of the United States^ might possibly be able to stand, even on a basis of Free Trade, it could not fail to happen that the weaker would fall before the crush- ing influence of foreign skill and power of capital, the general effect on all the great and minor interests of the country, would be most disastrous, as is abundantly shown in other chapters. The strong would become relatively stronger, and the weak weaker ; the rich richer, and the poor poorer ; while the nation, as a whole, would be impoverished. Every separate manufacturing enterprise occu- pies, commercially, an isolated position, and can lean only on itself, when the policy of protection is withdrawn. It, therefore, becomes the victim of the whole power of this foreign influence, as much as if there were no other manuficturing establishment in the country. If, therefore, it is weak, can it stand ? Its fall is inevitable. But, in order to have a just view of the Free Trade alleged to have been granted by Great Britain, under the administration of Sir Robert Peel, it is equally important as pertinent here, to observe, first, that the Free Trade granted, is no sacrifice to the parly grant- ing it ; next, that the grant is limited and small ; thirdly, that it is UNITED STATES LEAST PREPARED OF ALL NATIONS. Ill a discriminating Free Trade, granted only where it would operate as protection ; and therefore, fourthly, that it is no Free Trade at all, but a mere matter of public policy, to operate in favor of the interests of Great Britain, and against the interests of other nations. The condensed view of facts, in the note below, collated by the careful hand of Mr. Edwin Williams, in Fisher's National Maga- zine, September, 1S4G, fully sustains and verifies the four proposi- tions above asserted.* • The appointment of a select committee of the house of commons in 18-10, on import duties, was the commencement of a new era in commercial legislation. The severe scrutiny to which the principles of the tariff' were exposed by this committee was followed in two or three successiv'e years, includins; 1845, by some very useful amendments, to which may be added the additional amendments adopted by the bill introduced the present year by Sir Robert Peel, and now passed into a law. An abstract of the report of the Import Duties committee, in 1840, showed that while 94^ per cent, (or £21,700,630) of the total revenue from customs (£22,962,610) was obtained from seventeen articles, there were above eleven hundred articles subject to different rates of duty, which, in the language of Mr. M'Gregor, of the board of trade, were "burdens, restrictions, and delays, upon the industry and prosperity of the country." " The following is a list of the seventeen articles referred to, each producing more than £100,000 to the revenue : — Am'l Duties. 1. Sugar and molasses £4, 827 .018 2. Tea 3,6.58,800 3. Tobacco 3 495.686 4. Rum, brandy, &c 2,615.443 5. Wine 1.849.700 6. Timber 1.60:i.l94 7. Corn (grain, flour, &c.) 1,098.779 Am't Duties. 1 0. Silk manufactures ic24 7,362 11. Butter 213,077 12. Currants 189,291 13. Tallow 183,000 14. Seed.s 145,323 15. .'^beep's wool 139.770 16. Rnisins 134,589 8. Coffee 779.114 I 17. Cheese 100,521 9. Cottonwool 416.2.5"! Seventeen articles producing duties 21,700,630 "In 1842, Sir Robert Peel reduced the duty on about seven hundred and fifty diff"erent articles, whicli had yielded only £270,000 to the revenue. At the same time he totally abolished the duty on other articles, and he removed the prohibition on the importation of foreign horned cattle, sheep, goats, swine, sal- mon, soles, and some other fish, and beef and pork. The general principle of the tariff" of 1842 was to reduce the duty on raw materials to about 5 per cent., to limit the highest duty on partially manufactured materials to 12 per cent., and on complete manufactures to about 20 per cent. In 1842, also, the sliding-scale of duty on the importation of foreign corn or strain was altered. In 1844, the duty on foreisn wool was repealed. In 1845, further alterations were made in the tariff': the duty on cotton wool, which produced a revenue of about £680,000, was repealed (for the benefit of the cotton manufacture), and the duties on four hundred and thirty other articles, which yielded about £320,000 to the revenue, were totally abolished. By this important improvement, the expenses of ware- housing are saved, and a great number of troublesome accounts and vexatious impediments to business are done away with; but for statistical purposes, the customs department retains the power of examining articles which do not pay duties. "The following statements show the net annual produce of the duties of cus- toms on all articles imported into the United Kingdom in the two years which 112 GREAT BRITAIN ALONE PREPARED FOR FREE TRADE : Thus it is seen, that, ahhough here is a showing of a large num- ber of articles on which protective duties are abolished, both parties were ready for it, the manufacturers, because it did them no harm, but was rather beneficial ; and the government, because they lost nothing, but gained in revenue. It was simply a question of pub- preceded the alterations ia the tariff made in 1842, and in the two years after these changes were effected : — * Articles on wliicli tlie Jiities Artk-tt* s on whirL no altera were reduced in 18'J2-'3-'4. ti(jn was made in 184-2-'3-*-J. Two yeara Two years Two years Two years be(i)re. after. before. after. Raw materials for mariufachire £1,347.599 ... iE5l7,243. . . . £847,481 £897,.598 Articles partially inamitiK'tiired 1,048,343 648,105 2,886 3,883 Articles wholly maiiulVictured 159,298 141,184 320.272 .334,.341 Articles of food (e.xchisive of corn or irrain) . . 1,082.442 1,080.992 16,933.4fi5 17,848,160 Articlesnot belonging to the precedinij heads. 213.577 90,872 10,421 11,408 Totals 3,851,259 2,478,396 18,114,525 19,994,890 "It will be observed that the annual reduction of duties on raw materials for manufacture amounted to Jt830,356, and on articles partially manufactured to jE400,238; making the annual boon to the manufacturers £1,230,594 — equal to $5,906,8.51; while the reduction of duties on manufactured articles imported was only £18,114, and on all other articles the reduction was only £124,155. At the same time the amount of revenue on articles in which no alteration was made in the tariff in l842-'3-'4, was actually increased Xl, 880,365, while the total amount of reductions on articles on which the tariff was altered, was £;i, 372,863. This shows that the increase of the revenue on the nnchanged arti- cles exceeds the reductions on other articles by the sum of £507,502, or a back- ward advance from ' Free Trade' of $2,436,000. " By the new British tariff adopted at the present sessions of parliament (1846), further reductions and repeal of duties on articles imported have been made ; the government still pursuing the policy which has guided them in all the changes in the tariff referred to, namely, piomoting the interests of the manufacturing classes. Thus, raw hides, mahogany, and other woods for manufacture, vegetables, and a few other articles, are now added to the free list, while animals, beef, pork, and some other articles of food, being also admitted free of duty, the expenses of liv- ing are of course reduced to the manufacturer; add to this the reduction of duties on bread-stuffs, by the change in the corn-laws, and we can estimate in some de- gree tlie amount of benefits wliich are expected to be derived by the British man- ufacturer by the recent legislation of parliament, and the increased advantages those manufacturers will have in contending with foreign rivals for the markets of the world. " It is true that the new British tariff has reduced the rates of duties levied on the manufactures of other nations when imported into the United Kingdom. British statesmen know that they may safely rely on the capital and skill acquired during long periods of protection, against any attempts that may be made by their manufacturing rivals of other countries, to introduce the products of their industry into Great Britain. In 18.'<9, the duties received on manufactured articles im- ported into the United Kingdom amounted to only £443,355, of which silk goods imported contributed more than one half. Two years after the alteration of the tariff in l842-'3-'4, the annual amount of duties on manufactures imported was j£475,525 ; which shows but a small increase of imports in consequence of the reduction of duties. The duties on silic inanufactures, in 1839, amounted to £247,361, and, in 1844, to £286,535," being about two thirds of all the duties collected from manufactured articles from foreign parts. UNITED STATES LEAST PREPARED OF ALL NATIONS. 113 lie policy. That Free Trade ha'd nothing to do with it, although vaunted as such, is evident from the facts, that this abolition of du- ties was discriminating, being confined to a limit which would oper- ate for the benefit of all parties concerned, in Great Britain, public and private. The differential duties for the colonies and remote dependencies of the empire, giving a monopoly of the trade of those parts to British manufacturers, were still retained. Not a word is said about them. What was granted to other nations, by this meas- ure, was worth nothing to them, and operated for the benefit of the grantors ; while a Free Trade with the colonies and dependencies of Great Britain, would have been a substantial boon, especially to the United States. These differential duties, indeed, were, as we believe, enacted expressly to shut out the trade of the United States, and to monopolize it for British commerce. The privileges secured to British bottoms, by commercial treaties and domestic legislation, on condition of touching at a colonial port, in returning with cargoes from foreign ports, are another species of , differential law, of immense consequence to the parties concerned, all in favor of British and against foreign bottoms. We began, in 1817, to try, by countervailing legislation, to recover a commerce then worth six millions annually, lost by this species of legerdemain, and which has been growing more -valuable ever since, and we have gained nothing of our rights, but rather lost, by the commer- cial treaty of 1830. The effect of this treaty has been, that, in fif- teen years, from 1830 to 1844, the British commerce with, the United States gained 300 per cent., while our commerce with Great Britain, for the same time, gained only 50 per cent. Great Britain raises a revenue, by duties on American tobacco, of some eighteen to twenty millions of dollars a year. Look at her exac- tions for revenue in other items, given in the note on pages 111 and 112, in which we and other nations are profoundly interested, and see what a mockery is that which she has given up, calling it Free Trade — all for her benefit — as compared with that which she re- tains, also for her benefit alone. Why talk of Free Trade, with such facts, and such unsettled accounts as these, staring the world in the face ? It is a perversion of language, and a shame to decency. Two remarks will comprehend and show all the Free Trade which Great Britain has conceded : First, she has never granted Free Trade on any article of her own production, which was a sacri- fice to herself; secondly, nor on any article, in the production of.i which she was not prepared to beat all the world. 8 V, ^'•^Y^ '^"^ *"^' DEFINITION OF FREEDOM. / •^»»'^ CHAPTER VII. FREEDOM CONSISTS IN THE ENJOYMENT OF COMMERCIAL RIGHTS, AND IN THE INDEPENDENT CONTROL OF COMMER- CIAL VALUES FAIRLY ACQUIRED. The Novelty and Importance of this Proposition, a Reason for giving it an early Place in this Work. — What is Meant hy it. — Definition of Commercial Rights and Values. — Liberty not synonymous with Freedom. — Rights as di.wtinguished from Liberty. — Free- dom, not an Abstraction, but a Reality. — Is a definable Substance. — The Objects of Despotism of every kind, even Spiritual, are Commercial Values. — All Religious Privi- leges are Secured and Fortified by Commercial Values. — Freedom requires, that all Taxes should be Voluntary, by a Representative Voice. — Otherwi.se they are an Ex- tortion, and not Freedom. — ■' Voting Supplies." — The British Government more imme- diately under the Control of Popular Freedom than that of the United States. — The Mexican War an Example — Many things arc called Freedom which are only its Acci- dents and Results. — A reasonable Man will be contented with Freedom as here defined. — A Man's Commercial Rights includes bis Chances in the Future. — The Blood of Mar- tyrs shed on Account of Commercial Values. — The Te.=t of the Principle contended for. "^ ; ^^^*^ As the proposition at the head of this chapter is a new one, and ^/IAC*^ as it defines a fundamental, most important, and most vital element /• C*^ of a system of public economy adapted to the United States, per- ^"JlJl^ vading the whole, we have thought proper to give it an early place in this work, in connexion with the subjects of several chapters immediately succeeding this, which naturally grow out of it. The novelty of this position may, perhaps, be an apology for a somewhat elaborate argument on the point. Having been persuaded, that what men call freedom, and profess to value so highly, must be a reality of a tangible shape and substance, definable as any other reality is, we have studied to find it out, and to give it a definite form, and the result is the definition above offered. By cominercial rights, we mean those claims to property which men, by general consent, are allowed to assert — of property, which, by the same consent, they may rightfully call their own, having in it what the economists usually call exchangeable value ; but which we prefer to call commercial value, as we think the substitute being less technical, is quicker and better apprehended. j«J^/\ By commercial values, we mean the things themselves, to which ' \ff^ these rights appertain. . af^^ Air and water are neither bought nor sold, and are, therefore, I' I ^not ranked among commercial values. They are not produced by I M not rai DEFINITION OF FREEDOM. 115 human labor ; and therefore, in a commercial view, cost nothing. Instruments which supply us with water, such as wells and aque- ducts, or any other facility in bringing this element to our use, and adapting it to our purposes by heating it, or by converting it into steam, are works of art, and products of labor; and, therefore, are properly ranked among commercial values. But the element itself is a product of nature — a bounty of Providence. No man sells water, though he may sell the labor which brings it to our use. In the same manner air is free to all, though the means of enjoying it to our highest satisfaction and greatest benefit, such as windows, fans, public squares, and favorable grounds, may cost something; and are, therefore, commercial values. In the same manner also, all the provisions, offices, and agencies of nature, such as the sun, and rain, to produce and fructify; winds, rivers, and oceans, to facilitate navigation and transport ; the earth and all its wealth, superficial, subterranean, and submarine ; every product and arrangement of the Creator, properly called Providence ; all these supplies and agencies, ministering to the wants, and gratify- ing the desires of man, cost him nothing before they have been ap- propriated by regulations of the social compact. They are not, therefore, reckoned among commercial values ; but are rather a basis on which, and instruments by which, the labor of man pro- duces such values. When any portions of them are appropriated, such as land, water power, mineral regions, etc., it is done under the social compact, and the principle of a quid pro quo is recog- nised, by right either of discovery, or of possession, or of purchase. The law supposes, that all such rights have cost something, that the cares, labor, and industry of man have created these values, over and above the provisions of nature. We prefer the term freedom to that of liberty, not only as being the substantive of free, and therefore most proper ; but because there is in fact an important difference in the scope and spirit of ^/^AfMf\ the words. Liberty is often used in the sense of licentiousness ; ^ freedom never. The former is not unfrequently employed to de- *^'^E/yy note a state of things, under which a man may do as he pleases, O * without regard to social rights ; whereas, freedom is rarely, if ever, used in a sense inconsistent with social rio;hts. Riffhts are the things which we want, and not liberty in the latitudinarian sense of the term. It will be found that, as rights are multiplied, liberty is abridged. For example, the law directs to take the right on a bridge. Therefore a man is not at liberty to take the left. Public 116 DEFINITION OF FREEDOM. convenience requires the establishment of this right, and the abridg- ment of this liberty. So of all rights established by common and statute law. Not one of them is created without the abridfrment of liberty. It is to be feared, that the lack of making this distinc- tion between liberty and rights, has produced, and is perpetually producing, a great deal of mischief in society, and that many of the cries for liberty are no other than claims to do as one pleases, in violation of rights ; whereas, the only freedom that is desirable and worth contending for, is that state of things which secures rights, and suppresses that liberty, or which is the same thing, that licen- tiousness, which would violate them. Freedom, with most people, is an abstract and vague notion, supposed to be valuable, and even worth fighting and dying for. But ask people what freedom is, and there is, perhaps, not one in a thousand that can tell. It is not an abstraction, but a practical good. It is a palpable thing, a tangible blessing. But what is it? In what does it consist? Our definition answers, that it consists in the enjoyment of commercial rights, and in the independent con- trol of commercial values, fairly acquired. Oppressors do not rob men of water, or of air, except in extra- ordinary cases of a cruel despotism, for punishment or vengeance. Such deprivations are wanton acts of inhumanity, of barbarity. Such are not the things which oppressors usually want; but they want that which costs labor ; they want commercial values. On this single and simple principle, as upon a pivot, turns the entire system of social wrongs and social rights, comprehending all that ever were, or ever can be. It is the principle of mevm et tuum, mine and {h'me — a principle recognised from the origin of the social state, and which is not peculiar to man, but is constantly seen developed among all the animal tribes. Disturb the den of a wild beast, or the nest of a bird, and you will see it quickly man- ifested. It will, perhaps, be thought by some, that our definition of free- '^ ' dom is not sufficiently comprehensive ; especially, that it does not reach the case of exemption from spiritual despotism. We sub- mit, however, that the object of every system of spiritual despotism, as a system, is to get possession and control of commercial values, which constitute the arm of physical power. Without these, this species of sway would be of no avail, and there would be no motive for the attempt to gain and hold it. While the subjects of this influence remain in the unimpaired possession of their commercial DEFINITION OF FREEDOM. 117 rights, they are not and can not be subdued ; foi they have the power in their own hands. All history pertaining to this point — and history must decide the question — evinces, that spiritual des- potisms are always erected for temporal sway as an end.* It is sufficiently obvious that temporal power, for the oppression of the human race, can only be established and maintained, by physical means — means derived from the commercial values of society. Despotism can not exist permanently, except at the ex- pense of its victims, in a commercial point of view. To make the arm of despotism strong, its victims must be made commercially weak, by depriving them of such a portion of their commercial values, as to create a formidable and irresistible physical power over them, and by keeping them in a position of relative impotence as to the means of asserting and vindicating their rights. They must first be robbed, before they can be oppressed. Let, there- fore, the commercial rights of the people be secured and maintained, and there is no danger of spiritual or any other despotism, first, because there is no adequate motive ; next, because it has nothing to feed upon ; and thirdly, because it has nothing wherewithal to maintain its power. The strength^ the might of the nation, in such a case, is Avith the people. All the ability of a despotism to hold and defend its position, is composed of commercial values wrong- fully acquired. Give back the rights, and the power is restored with them ; or if the people have not parted with their rights, the power could not be easily usurped. It is true, indeed, that the government of a country always has the advantage of the people, in proportion to the commercial values, or means of power, in the hands of each party, because it is one of the duties of a govern- * Directly in point, as to ihe aims of spiritual despotism, above asserted, is the following extract from an able article in the Courier Des Etats Unis, New York, September 9, 1847, on the spiritual and temporal power of the bishop of Rome : — " Du jour oil le pape s'est trouve revctu de ces deux caractcres, 11 a du con- siderer I'un comme un but, I'aulre comme im moyen. Or, de la souverainete spirituelle ou de la souverainete temporelle, laquelle est le but, laqnelle est le moyen ? Lorsque nous jctons les yeux sur I'histoire et que nous voyons les papes devenir les arbitrcs de l"Europe, les mediateurs des querelles de prince a prince et de prince a peuple, les dispensateurs des trones ; quand nous sondons les celobres questions des investitures, des Guelfes et des Gibelins ; quand nous examinons I'echec prepare a Wiclef, a Jean Huss, a Jerome de Prague, les luttes engagees centre les conquetes de Luther, de Zuingle et de Calvin; quand nous suivons Borgia et Paul Farncse guerroyant pour la destinee princiure des produits males de leur cclibat fecond, nous sommes forcement conduits a dire que le but papal a ete la souverainete temporelle et non point la souverainete spirituelle ; cette der- niere reste done a I'etat de moyen." 118 DEFINITION OF FREEDOM. merit to be always prepared for the exigencies of war ; in other words, to be armed, and ready for arming more effectually, on short notice. It must be obvious, therefore, that, in case of a con- troversy between the government and people, it is as easy for the former to turn its arms against the latter, as against a foreign foe, while the people are unprepared for the contest. Hence the security of freedom requires, first, that no more of the commercial values of a people should be absorbed by the government, than is neces- sary for the safety of the commonwealth against foreign machina- tions; and next, that popular influence should be sufficiently ele- vated and strong, to control executive power. But some, perhaps, will say, there is a subtlety In spiritual despotism, that is independent of physical power. A system- atized spiritual despotism is undoubtedly dangerous to freedom ; and all such systems have the end of physical power in view. So long as spiritual influence, in its isolated positions, has no such aims, and stops short of such an end, it can hardly be seen why it should be a subject of any great concern. But when it emanates from an established polity, existing for ages, ever assert- ing imperious pretensions, and never failing to avail itself of physical power, when it can, it is safer to be vigilant of its operations, than indifferent to them. And it wil! be found, that the principle of the doctrine asserted at the head of this chapter, applies to such a case. Every religious privilege, in its social character, comprehends a commercial right. A man's domicil, and everything pertaining thereunto, is a commercial right. No spiritual power can lawfully invade that sanctuary. It is sacred to man and to God. In that retreat is or should be the tenant's domestic altar; and, in relation to society, it is a commercial right. There he may worship his God, without question from any other authority than that of the object of his devotions. It is a high and sacred privilege ; but, in relation to man, it is no less a commercial right. His closet, his bible, if he is a Christian, and his aids to devotion, are there. Be- tween him and his God, they are sacred privileges; between him and society, they are commercial rights. They have cost him care and labor, and they are his. He has the same commercial rights in the place of public worship, if, in one way or another, he contributes of his earthly substance to its support. It must, we think, be seen, tiiat the range of these rights, as con- nected with religion, is sufficiently comprehensive, when vindicated, to bar the encroachments of spiritual despotism. Let these rights DEFINITION OF FREEDOM. 119 remain unimpaired, and be fidly enjoyed, and it is all the religious freedom that any man could desire. And it will be observed, that they are commercial rights. Our object is to show, that the bul- warks of freedom are composed of rights of this kind, and of this kind only. And if this be true of religious freedom, it is much more so of civil. Religious and civil freedom are indeed identical, in their relations to the state. But there is a quantum of every man's commercial values due to the state, as a consideration for his benefit in the commonwealth. How much ? By what rule of measurement shall it be graduated? It will be observed, that we are speaking of freedom. It would be a solecism to suppose, that any man's commercial values can be taken without his consent, and he, be free. Force of this kind is the essence of despotism. Possibly it may not' be felt as such, when exerted only to a small extent ; but this does not alter the principle. An improper act is not characterized by degrees; but by the principle on which it is based. Extortion in a trifle may not be grievous; but multiply and extend it, and it becomes an aggravated evil. Even the brute creation know what is their own — are conscious of their ri<;;hts in relation to each other. Much less does man need to be told what is his property, or that it can not lawfully be taken from him without his consent, without a quid 2>ro quo. On this principle is based his right of voice in his con- tributions to the state — a right which, of course, can be exercised only mediately, or in a representative capacity. It is essential to freedom, that government should be the creation, and under the control, of those vvho contribute of their commercial values to sus- tain it. In this way, their taxes to the public are graduated by their own sovereign will. They pay them as they pay any other de- mand, for which, as parties to an agreement, they receive a valu- able consideration. There is no more force in their taxes, than in what they |iay for the necessaries and comforts of life. This is freedom, and no other state of things can be freedom. It should be observed, that this principle is not only comprehen- sive, but fundamental and vital to the subject. There is nothing that men have ever been dissatisfied with, as the opposite of free- dom, in the various forms of slavery or despotism, which is not reached by this as a radical cure. We have already seen, that it is a remedy for, or a preventive of, spiritual despotism. In the same manner, it is so in application to every other species of op- pression. It occupies precisely the position of what is commonly 120 DEFINITION OF FREEDOM. called " voting supplies" in the popular branch of a legislative body, only that it goes farther back, is fundamental, and begins at the be- ginning. It is well known, that, under a constitutional government, as in the United States and Great Britain, the executive arm can be crippled at any moment, and in that way controlled, by the re- fusal of supplies on the part of an independent legislative body, and that this power is commonly and justly regarded as one of the most efficient bulwarks of freedom. The powerful government of Great Britain is brought instantly to a stand, when the house of commons, the popular branch of the legislature, votes against it, and it can not go forward without a change of ministry, alias of the govern- ment, in conformity to the intimations of that vote. This power is based on the principle now under consideration, that is, the power of withholding those commercial values, commonly called supplies, which are necessary to the executive, and without which it can do nothing constitutionally. In this particular, the British government is more subject to the popular will, so far as the franchise extends, than that of the United States, and may be forced to reconstitute the administration, and change the public policy, at any time, in a single day ; whereas, the government of the United States, or its administration, can not be changed but once in four years, however the people may be dissatisfied with the policy and measures adopt- ed. In this particular, therefore, popular freedom has gained more, for its prompt and instantaneous influence, under the government of Great Britain, than under that of the United States ; but this ad- vantage suffers a large abatement in the comparative extent of the franchise in these two quarters, it being very limited in the former, .and nearly or quite universal in the latter. Although freedom can not act in the United States, on the most comprehensive scale, but once in four years, for any change in public policy that may be de- sired ; yet, on account of the extent of the franchise here, when it does act, it is capable of exerting a sweeping and powerful influ- ence. Nevertheless, it would apparently have been better — cer- tainly more favorable to freedom — if, in addition to the extended right of suffrage, the government of the United States had been so constituted, as not to allow an administration, once installed in the place of power, to govern the nation badly, if so disposed, for the full term of four years, in spite of the will of the people. Four years of power, in such a country, badly used, is enough to inflict upon it calamities which would require many years to remedy — possibly such as could never be repaired. Take, for example, the DEFINITION OF FREEDOM. 121 Mexican war. Would it not have been well, if there had been a power in the people to arrest, or to have prevented it? Consider the amount of commercial values, the costs, that have been and must be wrested from them, before it will be paid for ! As a free people, would they ever, with their eyes open, have voted such costs, and such public disasters ? Kings make war, and the peo- ple pay the cost with their blood and treasure. If the people were consulted, there would be few, if any wars, except for defence of popular prerogatives. The war of the American revolution, as will be found upon examination, was waged solely for the vindica- tion of commercial rights — the rights of every man in his own po- sition, and in that way the rights of the community. In this great fact we have a most impressive verification of the doctrine main- tained in this chapter. The revolutionary struggle of our forefathers, was not for an im- palpable phantom called liberty, which millions have chased, and (ew ever caught to hold except to their own disappointment. The wrongs which they complained of, under a tyrannical British sway, were a deprivation of commercial rights ; what they contended for and ultimately gained, was the restoration and re-establishment of those rights. It was a palpable benefit — an instrument where- withal to purchase and secure other benefits. It was that without which man can not have the desirable things of life. It was sub- stantial wealth, of which they had been deprived by unjust legisla- tion, and a despotic government. It was the sweat of the people's brow that was drawn away by taxes without representation, by ex- pensive civil and military establishments maintained at the expense of the people to keep them in subjection. In this way they were deprived of their commercial rights, and kept poor, without a voice. It was to have, to hold, to control, and to enjoy ilteir own, that our forefathers went through the revolutionary contest. This is free- dom ; and nothing else is freedom. Life, liberty of opinion, of speech, and of the press, are the accidents of freedom — the results, though often, but erroneously, taken for freedom itself. It is only by the usurpation of the commercial values of a people, whereby a physical power over them, to hold them in bondage, is maintained, that life and its blessings can be put in jeopardy. Besides these cursory views which go to the establishment of the proposition at the head of this chapter, a close scrutiny of every one's own experience will lead to the same result. Give a man the use, enjoyment, and control of that which he calls his own — all 122 DEFINITION Of FREEDOM. ^/„^/j of which consists in comnnercial values, or that which such values ' only can secure to him — and he will ask for nothing more. He does not want any other freedom on earth, as a reasonable man. No man ever complained of oppression or of wrong from govern- ment, who had all this ; certainly no insurrection was ever known in such a state of things. It would be morally impossible to disturb such a state of society, with a view to revolutionize it. This con- sideration alone might satisfy every reflecting mind, that this is freedom, when it is seen, that man can reasonably desire nothing more in the social state. And it must be considered, that a man's commercial rights com- prehend, not only what he may already have fairly acquired of this kind, but all his fair chances of future like acquisitions, by his own capital, labor, skill, or talents. Capital, labor, skill, and talent, not yet exerted or put to use, are as much commercial values as their products already in possession, and are equally in the market for sale or employment. It would be but a small part of freedom, for a government to allow a man the possession, use, and control of that which he has acquired, if it deprives him of that which he is capable of acquiring, or of his chances. It is, perhaps, the chan- ces of the future which men prize most. Cut those off, bar them, and the most tender point of human expectations, of men's claimed rights, is assailed. Men, in the vigor of life, who are objects of fear to tyrants, and who alone can revolutionize a state, do not lean • so much on the past, as they press forward to the future. Deprive such men of their chances, destroy their hopes, and they will feel it more than any other deprivation of which they could be made the subjects. Men will even forgive past injuries inflicted by a government, will at least forget them, if they can have security for their rights in the future. It is for the future chiefly that men love freedom, and will contend for it ; and what they love and contend for, is commercial values, because, it is by these only that they can supply their wants, and gratify their desires. There is no earthly good, be it substance or privilege, which is not purchasable by these ; and no privilege that is not surrounded and fortified by these. It is true, indeed, that religion and the grace of God are independent of such aids, and come down a munificence from on high, to console the poor and the afflicted — to indemnify even the persecuted and the oppressed. But no thanks to man for this. This bounty of Heaven does not at all affect the claims of every man for his commercial values, as between him and his fellows, DEFINITION OF FREEDOM. 123 and which, though also bounties of Heaven, constitute a basis of social rights between man and man, as spiritual benefits descending direcdy from Heaven can not, on account of their impalpable nature as subjects of human regulation and control. These latter benefits are above the jurisdiction of society, and independent of it, except so far as the means of obtaining and enjoying them are concerned, which, as before shown, are also properly ranked among commer- cial riuhts. . \ It is for this reason that men will fight and die for their religion, \yCr/ that is, for the means of religion, which are necessarily of a com- mercial character. They do not fight and die for the grace of God, in the highest sense of the term ; for man can not deprive them of that, and none have ever enjoyed it, in so large and rich a measure, as Christian martyrs. It was for social rights, alias for freedom, which always involves commercial rights, that the blood of martyrs has flowed so profusely. Persecuting and murderous tyrants have never been able to take anything from their vicdms, who have suf- fered for the faith of Christ, but their commercial values, of which life itself was one. At the same time that the martyrs were stripped of every earthly good, and were sacrificed at the stake, or on the rack, or in the flames, or by the ferocity of wild beasts, or by any other instruments of cruelty, not less various than the prolific inge- nuity of fiendly malice could supply, they were infinitely more than indemnified by the presence and the grace of God, and the crown that awaited their emancipation. They suffered for what? For the cause, for social rights, for freedom, for commercial values, not only on their own account, but on that of their brethren, of the church, of society. As the patriot dies for his country, so the Christian martyr gives himself up for the Christian commonwealth, both of which sacrifices are made for the future good of the socie- ties for which they shed their blood. If it be said, that the Chris- tian martyr dies for his faith, because he will not renounce his Lord I and Master, it is true. But this condition is imposed merely as a pretext for a deprivation of commercial rights. It was not for the mere love of cruelty and death, that Christian martyrs have been sacrificed ; but it was for commercial benefits which their execu- tioners hoped to obtain, directly or indirectly. Commercial vahies have always been at the foundation, and constituted the cause, of such murderous despotism. What immense confiscations of prop- erty, and how many other commercial advantages, have been gained by tyrants, in the persecution of Christians ! It may be that this 124 DEFINITION OF FREEDOM. eqd has not always been obtained ; but that such were the aims, there can be no more doubt, than of the fact. Other motives may have been, were of course, assigned. There is nothing more hypo- critical and false than injustice. The strength of despotism always lies in commercial values ; and the object of tyrants is to fortify their power by an accumulation of such means. They do not prac- tise injustice and oppression wantonly, though they may show mal- ice, and display the most diabolical passions, in the execution of vengeance on those who stand in their path, or who refuse to yield to their claims. All the vices inherent in the nature of man, or of which he is susceptible by temptation, and all the worst passions that ever urged him on to crime, have not unlikely, have doubtless, mixed themselves up with diese atrocities. There is a natural affinity between vice, and crime, and murder, in all the forms of each. They are all parts of the same character, constituting only different stages of progress in one career. But it is only by the acquisition and perverted use of commercial values, that depraved passions are gratified. These are the means of their sustenance, the elements on which they feed. The atrocities and inhumanities that were practised on Christians, in the early ages, under the pre- text of purging society of bad members, would never have stained the pages of history, but for the commercial advantages that were expected from them, and too often realized. Even under the mis- takes that were made, in this particular, as proved by the apologists of Christians to the Roman emperors, the very argument shows that the object of those persecutions was commercial benefit. In the same manner, when the church herself became corrupt, and turned persecutor, her inquisition, her dungeons, her racks, her auto-de-fes — all her instruments for the punishment of heresy, in- volving the use of physical power — were for the defence and for the acquisition of commercial values, and by means of them. This was the power employed, and it was employed to strengthen and fortify itself, by depriving its victims of the possession and enjoy- ment of these rights. Like all false pretexts, the defence and propa- gation of the true faith was the alleged motive ; the real aim was that power which is founded on conmiercialvalues. "Life, liberty, and the pursuit of hajipiness," in one's own chosen way, are them- selves commercial values and commercial rights. The church, as a persecutor, was not content with taking these, but the goods of heretics, before acquired, were first forfeited. Despotism, in whatever form, when analyzed, will be found to DEFINITION OF FREEDOM. 125 aim at these objects, and only at these, as a power to maintain its authority and sway, inasmuch as nothing else will answer its pur- poses. As a consequence, it will follow, that freedom consists in keeping all commercial values in the hands and under the control of those to whom they rightfully belong. The truth of a principle, and the perfection of a definition, are alike demonstrated by their application to all conditions and phases of the subject. Herein is proved the truth of the prin- ciple which lies at the foundation of the argument of this chapter. It is not denied, that there are various attributes of freedom, passing under denominations, which do not direcdy suggest this principle, and which may even apparently lead to the conclusion, that freedom consists in something else ; but it will be found that this something else, in all its parts and ramifications, is redu- cible to this basis, and rests upon it. A people never did, and never would complain of despotism, and a political revolution can not be found in all history, except for an unjust deprivation of com- mercial rights. There are, indeed, numerous other forms, in which, as results, despotism is made manifest ; and these are not unnatu- rally taken as the fundamental evils, whereas they are only conse- quences. The first abatements of an absolute despotism, such as may be found in history, and which has extended to power over life, without responsibility, have been the lopping off of its branches ; and the reformation has gradually continued, till, in modern times, both in Europe and America — especially, as we think, in the lat- ter — an approximation has been made to tli€ root of the difficulty, to the very foundation. Scarcely in any part of the civilized world, are men now familiar with the cutting off of heads, at the arbitrary nod of a despot. Constitutional governments, and laws enacted by Shem, prevail extensively, and are constantly gaining ground. In die United States, in Great Britain, in France, and in other parts of Europe, the cause of freedom has made such progress, that the care of men is not for their heads, but for their purses, for their commercial values ; and what now remains, in some of these coun- tries, is a proper adjustment of a system of taxation, and a security of the chances of commercial acquisitions. This is the great ques- tion of the age, and demonstrates, that it is tJie last, as well as the fundamental question, in the progress of freedom. The inequali- ties in the burdens of society, as they bear on commercial rights, are yet vast, and vastly complicated ; and they are too often vastlj greater than thej ought to be — than is consistent with freedom. ( 126 WHAT CAUSED THE AMERICAN REVJLUTIO.V. CHAPTER VIII. WHAT CAUSED THE AMERICAN REVOI.UTION. HISTORY OF THE PilOTECTIVE POLICY IN THE UNITED STATES. A Restatement of the Object of ihis Worlt,.and of the great Error of the Economists. — The Theme of this Chapter important as a Startinc; Point in the General Argument — The Instinctive Po ky i)f a Purenl Stale toward Remoto Dependencies, fatal to the End in "View. — Such was the Policy of Great Britain towarl her North American Colonies. — A Heview of that Policy. — The Doctrines of Jo&hua Gee. — Their Influence on Parliament and the Board of Trade. — Acts of Opposition and Wrong Provoked the Revolution. — Declaration of Independence — Commercial Values, as the Fruits of Labor, the Occasiott of the Contest — The Position of the FreeTiade Economists as to the Elements of this Controver.Ky. — They were forced to jostrfy Wrong. — The Wrong a Commercial one. — The Aim of the MevoluJion was to break down the Old, and to e.stabli.sh a New System of Public Economy, that is, a Protective Sy.stem — The Struggle was based on the Prin- ciple of Mine and Thine, as it determines Commercial Riglus. — A Protective System of Society the great Object in this Country from the Frr.st. — The great Movement frona Europe to America was and is for this. — The Confederation a Rope of Sand. — A Pro- tective System the great Object of the Federal Constitution. — One of the first Acts of the new Congress v/as to establish a Protective System — Documentary Evidence for Fifty Years, that Protection was llie Uniform Policy of tlie Country. — The Cause of Apostacy from this Ancient Faith. We wish it to be observed, throughout this work, that we are writing on public economy for the United States, and not for the family of nations, nor for any other nation. We have, in the fore- going pages, particularly in the second chapter, distinctly and em- phatically repudiated the idea, that it is possible to adapt a system of public economy to all nations, or even to any two, and we have endeavored to show, that the errors of Free-Trade economists have necessarily been fatal, by attempting to form a general system. By over-grasping ambition, or some other kindred propensity, in I putting their screws on all the world, they have broken their ma- \ chinery, and done injury to the subject ; in essaying to do too much, they have spoiled the whole. Had they been content to study and lay down rules for their respective commonwealths, they would have found enough to do, and might have done it well ; but, in reaching out their arms, to take in all the world, they seem to us to have fallen into the sea, for lack of ability for so great an enterprise ; or rather, to have failed, because it was impossible in the nature of the subject, and in the nature of things, to execute such a plan. Though there are common principles, there can not be a common system, in its great, essential, and most important ^ WI^\T CAUSED THE AMERICAN REVOLUTION. 127 parts; ana the parts which can not be made common, are those which are most vital to each of the great parties concerned. ^ A more minute review of the occasion of the American revolu- ^"'^-^"^■^^ tion, and of the aims of American independence, which are neces- /^*"^t_-^_ sarily and frequently alluded to, in the progress of this work, and ^y'^i'^Sf!*^ which have been somewhat dwelt upon already, is fundamental J^ .y to the great inquiry in which we are engaged, and will cast more v^^ light on the general subject, than any other things in history, to which we could direct our attention, as starting points. It is hardly necessary to say, that the occasion of the American revolution, was a denial and deprivation of rights, and the impo- sition and infliction of wrongs. It seems to be a natural, if not a necessary policy of a home government, to increase the dependence of remote and colonial branches of itself, in proportion to the in- crease of their importance, and of their ability to gain independence; and in that way uldmately to precipitate the event apprehended. It was soon discovered by British statesmen, that their American colonies had all the elements of gigantic power, and that to be re- tained, they must be ruled with a discipline corresponding with the danger of losing them. Accordingly, this policy is found to date back to the earliest history of the colonies, and consisted chiefly in ' the plan to confine the colonists to agriculture-^ to the production of raw materials — to prohibit them from engaging in commerce, and to force them to purchase of the mother-country such articles of manufacture and of the mechanic arts as they might want. Joshua Gee seems to have been one of the oracles most relied upon for political doctrines, in the treatment of the American colonies, of which the following extracts from him are specimens: "That manufactures in American colonies should be discouraged or pro- hibited." — " We ought always to keep a watchful eye over our colonies, to restrain them from setting up any of the manufactures that are carried on in Great Britain ; and any such attempts should be crushed in the beginnin:;. For if they are suffered to grow up to maturity, it will be difficult to suppress them. Our colonies are much in the same stale Ireland was in, when they began the woollen manufactory ; and as their numbers increase, will foil upon man- ufactures for clothing themselves, if due care be not taken." — "If we examine into the circumstances of the inhabitants of our plan- tations, and our own, it will appear, that not one fourth part of their own products redounds to their own profit ; for out of all that comes here, they only carry back clothing, and other accommoda- 128 WHAT CAUSED THE AMERICAN REVOLU.'ON. tions for their families, all of which is of the merchandise and man- ufacture of this kingdom." — " New England, and the northern colonies have not commodities and products enough to send us in return for purchasing their necessary clothing, but are under very- great difficulties ; and therefore any ordinary sort sells with them. And when they have grown out of fashion with us, they are new- fashioned enough there." This corresponds with the following facts collected from Pitkin's Statistical View : In 1 099, the British parliament prohibited the colonies from exporting wool, yarn, or woollen fabrics, and from carrying them coastwise from one colony or place to another. In 1719, parliament declared, that the erection of manufactories in the colonies, tended to lessen their dependence on the mother-country. This declaration, and subsequent legislation on the subject, were in consequence of memorials from British merchants and man- ufacturers, who complained that the colonies were cariying on trade, and erecting manufactories. The subject continued to be agitated, and, in 1731, the board of trade were instructed to inquire as to the colonial laws made to encourage manufactures; as to manufactures set up ; and as to the trade carried on in the colonies; and to report thereon. Accordingly, in 1732, the board reported, that Massachusetts had passed a law to encourage manufactures; that the people of New York, Connecticut, Rhode Island, and Maryland, had fallen into the manufacture of woollen and linen for the use of tlieir own families ; and of flax and hemp in coarse bags and halters — all which, they said, interfered with the rights and profits of British manufacturers and merchants. The board of trade, therefore, recommended, that the minds of the people of those colonies should be immediately diverted, and a stop be put to these practices, or they would be extended. The same year parliament prohibited the exportation of hats from the colonies, and tra- ding in them from one colony to another, by ships, carts, or horses. No hatter was allowed to set up business, who had not served seven years; nor to have more than two apprentices; and no black person w^as allowed to work at the trade. Iron mills for slitting and roll- ing, and plating-forges, were prohibited, under a penalty of five hundred pounds. This system of prohibition and restriction con- tinued to increase, against both manufactures and commerce, and in proportion as the people manifested a disposition to supply their own wants, new and more vexatious modes were invented, and ap- plied with increased rigor, and under heavier penalties, to prevent WHAT CAUSED THE AMERICAN REVOLUTION. 129 them, till finally, as the colonies waxed great and strong, and serious appreliensions began to be felt that they would outgrow the ability of the mother-country to keep them in subjection, the right of tax- ation to furnish the means of maintaining this power over them, was asserted, without allowing the correlative right of representation. Hence the rising of the people, and the declaration of independence which was followed, after a seven years' war, with its acknowledg- ment. During the debates in parliament, on the rights of the colonies, Lord Chatham said, " he would not have the Americans make a hob-nail." Another noble lord added, " nor a razor to shave their beards." By these and similar facts, with which the history of that period abounds, it is easy to see what was the occasion of the American revolution. It will, perhaps, be more fully illustrated by the fol- lowing extracts from the Declaration of Independence: — " He [the king] has refused his assent to laws the most whole- some and necessary for the public good" [particularly laws for the encouragement of home manufactures, etc.] ; . . " he has refused to pass other laws, unless the people would relinquish the right of representation ; he has dissolved representative houses, repeatedly, for opposing, with manly firmness, his invasions on the rights of the people ;" . . " he has endeavored to prevent the population of these states;" . . "he has made judges dependent on his will;" . . "he has erected a multitude of new offices, and sent hither swarms of officers, to harass our people, and eat out their substance ; he has kept among us, in times of peace, standing armies, without the consent of our legislatures; he has afTected to render the military independent of, and superior to, the civil power ;" . . "he has cut off our trade with all parts of the world ; he has imposed taxes on us, without our consent ;" etc. . . " In every stage of these oppressions, we have petitioned for re(h'ess, in the most humble terms. Our repeated petitions have been answered only by repeated injury ;" etc. As all rights, in a system of civil polity, established on a |)olit- cal platform, which are of importance to claim, are of a com- mercial nature, positively or constructively, directly or imlirectly, as shown in the preceding chapter; that is, the right to he oxw own, to have our own, and to use our own, without abatement, re-traint, or control, except by laws equally important to all the menibers of the commonwealth, in which all have a voice ; it will follow, from a consideration of the subjects of grievance, as above briefly and coin- 9 130 WHAT CAUSED THE AMERICAN REVOLUTION. prehensively represented, which led to the independence of these United States, that they were all of a commercial character, and had respect to the rights of property which every man has in him- self, and to the avails of his own exertions in a state of freedom, bating only his fair tax to the public, in which, also, he is entitled to a voice. It is not pretended that there are no other rights ; but that all others follow. The security of all commercial rights, is a security of all others, which men, in their relations to each other, on the platform of a free commonwealth, are likely to claim. It should not be forgotten, then, as it is an important point, that the rights which the American fathers asserted in opposition to tyranny, and which they vindicated with their fortunes and their blood, were of a commercial nature. As elements of a civil polity, they are also political rights. And this, too, is an important con- sideration. Labor was the vital ingredient; and the shield thrown over it by the success of the revolution, rescued it from its former exposed condition. It was a political instrument, a structure, an edifice, that rose out of that struggle, to secure, what strife and blood had vindicated, viz., the rights of labor, which thus became — or rather were thus demonstrated to be — political rights; and which were thus reinstated in their true position. The aim of the British crown was to draw to itself the fruits of American labor ; it wanted nothina; else. The aim of the American fathers was to retain those fruits in their own possession, as their own right ; and this was the occasion of the struggle. It is manifest enough, now that these rights are seen to be of a commercial nature, that they fall within the range of public econ- omy. And they are not only of a commercial nature, as well as social and political, but it will be seen, that they are radical sources and fundamental causes of commercial prosperity. These rights have been entirely overlooked by European economists, and others on this side of the Atlantic, who have been servile and weak enough to borrow their opinions, and to adopt systems made to their hands. In overlooking this element, it was impossible to build up a system of public economy, that would not be erroneous. This element, in such a system, would necessarily be wanting as an anchor to the ship, while at rest; and it would be wanting also, when most needed, as a compass, and as a fixed celestial sign, while on a voyage over the trackless deep of inquiry on the subject. All human society, as shown in another chapter, is built up by labor, and moored to its hand. The better, therefore, the condition, and WHAT CAUSED THE AMERICAN REVOLUTION. 131 the more healthful the cause, so much better and more vigorous the product. But, from a sickly parent, a promising offspring has been pledged ; from a degraded and servile operator, the finest speci- mens of human ingenuity and art, are alleged to come ; and from an oppressed and manacled agent, it is proposed to erect the most worthy monuments of human greatness! Such as these are the fundamental elements of the systems of the leading Free-Trade economists. They have rejected the sound, and adopted and cherished the rotten. As the rights of labor ever have been, so will they ever remain, in accordance with the beneficent orders of the Creator, the truest sources, and the most exact exponents of public and private wealth. There may doubtless be unnatural accumulations of wealth, by the suppression of these rights ; but it can not be so great in the aggre- gate ; and the misfortune of beginning wrong, is always to end wrong, as well as to be in peril on the way. Everything built on the sacrifice of these rights, topples on its foundation, and will fall at last. There is no true economy in such a policy, either at the beginning, or at any stage thereof, or at the end ; nor can any human ingenuity make an argument on that side, that will bear scrutiny. It is, perhaps, because of this radical, fundamental de- fect, that we find so many contradictions and absurdities in the Eu- ropean economists — we mean those of the Free-Trade school. Each of them, especially Adam Smith, has abstract propositions enough to build up any system ; plenty for an American system, and all right ; but when he comes to put the parts of his system together, the faults of the whole are apparent. It was necessary in their case, having a vicious state of society for a foundation, to justify the greatest wrongs done to man, and to show how profit to the race, to nations, could come out of such treatment. American independence established an American system of public economy. If it did not, independence must necessarily have been a total failure. The declaration was based on the prin- ciple, "To THE Rescue." Rescue from what? From injus- tice, oppression, tyranny. And in what did the injustice, the op- pression, the tyranny, complained of, consist ? The British crown, as shown above, undertook to draw all the fruits or profit of Amer- ican labor to itself, in the same manner as European governments, for the most part, still absorb the profits of European labor. The wrong was not only political, social, and moral, but commercial 132 WHAT CAUSED THE AMEUICAN REVOLUTION. and it was all three of the former only as and because it was espe- cially the latter. All the substance of the wrong was of a com- mercial nature. It receives these other denominations or epithets, merely to describe its character in a social point of view. They are no description of the substance. The point and essence of the wrong consisted in the fact, that one party took away the property of oiher parties, which was the right of the latter, because they had created it by their own exertions, and because it was necessary to their comfort and happiness. And it was a wrong, which not only made the suffering parties poor, but which took away their chances of growing rich — even of bettering their condition. It was a sys- tem of economy well enough calculated to promote the wealth and augment the power of Great Britain at home ; but it was the ruin of the American colonies. At best, it was a vast injury to them, and an insuperable obstacle to their greatest possible prosperity. The object of the revolution was to change the system — to change it entirely, fundamentally — to secure to the people the benefits of the right of property in themselves. When a man is forced to work for the benefit of others, it is a mockery to say he is his own man. Such was the condition of the colonists before the revolution. They were forced to work for the benefit of foreigners. As Joshua Gee says, in the extract above made, " if we examine into the cir- cumstances of the inhabitants of our plantations, and our own, it will appear, that not one fourth ^w rt o^ i\^Q\T own products redounds to their own profit;" and the professed object of his plan, which was adopted and acted upon, by the British government, was to perpetuate this system. The American fathers went into the struggle against the British crown, to break it up. They went for a rescue, and to establish an order of things that should secure to them their own commercial rights, and retain among themselves the fruits of their own industry and enterprise. They went for a sys- tem to encourage home manufactures, which had been forbidden ; to leave every man free to follow his own chosen pursuit, make hats or anything else, and to secure to him the enjoyment of his own earnings — of that cumulative wealth which always results from systematic industry, when not absorbed by oppressors. The change which they sought for and effected, was a revolution in public economy, and these two words comprehend the whole. The nominal change from the relations of a colony, to the position of an independent state, was of no consequence without this ; and if the British crown had granted this, or never taken it away, the WHAT CAUSED THE AMERICAN REVOLUTION. 133 American fathers would never have desired a separation. There would have been no motive — no object. It was purely and exclusively to establish a new and American system of public economy. Most people are accustomed to think, that all rights passing under the denomination of political, are certain abstractions sup- posed to be of importance, though perhaps undefinable. They may be tried by following out the inquiry carefully — in what does their importance consist? Take for example, the rights claimed of the British crown by the American fathers, and the correlative wrongs. It will be found that every one of them was of a com- mercial character, and exclusively so. When scrutinized, they resolve themselves into meum-et-tuum^ mine-and-thine questions, involving valuable commercial considerations. Nor can it be al- leged, that they are, on that account, more sordid, or less worthy of respect, than has commonly been supposed. For after all, the principle of mine and ihine is the nicest and the most important rule of society ; it is the ground of all controversy ; the end of all debate ; the cause of all wars ; and the authority that establishes peace and quietness. It may excite to action the purest and most ennobling virtues ; or it may rouse the fiercest and most destruc- tive passions. Armies and navies may rush to combat by its instigations ; thrones may be shaken and nations revolutionized by its power. It is not, therefore, of course and in itself, a mean consideration, though in the controversy between the Amer- ican fathers and the British crown, it was purely a commercial one. It was important to have this point distinctly settled and properly elucidated, that every one may see clearly, and feel forcibly, that an American system of public economy must ne- cessarily grow out of it. The history of the protective policy in the United States, will be found, as we think, to comprise the essence of all that is peculiar and distinctive in the political history of this country, from its foun- dation to the present time, running back through our colonial his- tory — not, indeed, as a thing that was through all this period, but as an object for ever aimed at and contended for, as vital to all the great and minor interests of the country and of the people. It may be said to have been the grand object of the pouring forth of Euro- pean emigrants on these western shores, since Columbus announced their existence to the world. It was a sense of oppression, of grievances, oi a deprivation of rights, which produced that inqui- 134 HISTORV OF THE PROTECTIVE POLICY" etude in Europe, creating a wide-spread willingness and desire to sacrifice native-born comforts and innumerable precious ties, for "a lodge in some vast wilderness," remote tbough it were, but beaming with the charms of distance as the abode of freedom. Though political designs, commercial enterprise, and speculation, had their share of influence in the settlement of this continent, it is unneces- sary to say, that the ruling passion of European emigration this way, for ages, was an indomitable aspiration after freedom — a free- dom which could not be enjoyed in the old world ; and it is equally true, as all know, that the same feelings still continue to prompt this great movement from East to West. Westward the star of empire moves ; but it is all for freedom. It is to purchase, to se- cure, and to protect the rights of man — the very rights which have been under consideration in the preceding chapter. It is to be re- lieved from that incubus of European despotism, which robs man of the reward of his exertions, and to enjoy that reward. But unfortunately for freedom, that same watchful power, the cruelties of which had forced this great movement, guided and prompted by the instincts of its own voracious and insatiable appe- tite for oppression and wrong, followed its victims in the pathway of their escape, and spread, and continued to hold, over them, the claims of its unjust pretensions. It is enough for our purpose here, to abridge this great chapter of American history, and point only to that of the North American colonies, till it ended in the estab- lishment of American independence. The whole of that history wa& a struggle for freedom, without gaining it; for it will be found, that the commercial troubles of tlie confederated states, till the adoption of the constitution in 1789, were greater than they had ever been, and that the independence acquired was merely nominal — all and solely for want of a protective system, which, under such a rope of sand as the articles of confederation, could not be put in force. The evils of this specific character — there were no other — were seen, felt, and deplored ; the states, in their isolated positions, tried to protect themselves, and only made the matter worse, aggravated the difficulties, by interferences ; till at last, the states being on the verge of dissolution, as an independent nation, on account of this great defect, the federal constitution was adopted as a remedy. The history of those times shows, that the grand object, the impel- ling necessity, of the formation of the federal government, in 1789, was to obtain a power for the protection of the commercial rights of the nation and of the people ; and in accordance with this de- IN THE UNITED STATES. 135 sign, the earliest action of the new government, was on the question of forming and estabUshing a protective system. The bill, or act, which was the great object of the federal constitution, on motion of Mr. Madison, the father of that instrument, was brought for- ward, with the least possible delay, under the following preamble: *' Whereas, it is necessary for the support of government, for the discharge of the debts of the United States, andyor the encourage- ment and PROTECTION of manvfacturcs, that duties be laid on goods, wares, and merchandise, inqiorted — Be it enacted," &c.; and after having been passed, was signed by President Washington, the Fourth of July, 17S9 — a signal coincidence, as being the birth- day of American freedom, not an accident, manifesUy, but ex- pressly designed, no doubt, as a profound and emphatic historical expression of the president's and of the public sense of the affinity and identical purpose of these two great events, and that the first could not be complete, nor consummated, without the second. The same necessity which begat the revolution, was the parent of the federal constitution, and of this law — this law, or its policy, established and secured, being the end of all. A few extracts from presidential messages and other documents, from Washington's administration down to the time when this policy was doomed to encounter an unnatural and suicidal opposition, will exhibit the prominency which this great principle has held in the counsels and legislation of the government, during the progress of our history.* • From Washington'' s Messages to Congress. " The advancement of aijriculture, commerce, and manufactures, by all proper weans, will not, I tryst, need recommendation ; but I can not forbear intimating to you the expediency of givins effectual encourasement, as well to the introduction of new and useful inventions from abroad, as to the exertions of skill and genius in producing them at home." " Congress has repeatedly, and not veithout success, directed their attention to the encouragement of manufactures. The object is of too much consequence not to insure a continuance of their efforts in every way which shall appear eligible." From Jefferson's Messages. "To cultivate peace, and maintain commerce and navigation, in all their lawful enterprises; to foster our fisheries, as nurseries of navigation and for the nurture of man, and to protect the manufactures adapted to our circumstances — these, fel- low-citizens, are the landmarks by which we are to guide ourselves in all our pro- ceedings." — Second jlmiual Message. " The situation into which we have been forced, has impelled us to apply a por- tion of our industry and capital to national manufactures and improvements. The extent of conversion is daily increasing, and little doubt remains, that the estab- lishments formed and forming will, under the auspices of cheaper materials and 136 HISTORY OF THE PROTECTIVE POLICY These extracts, in the note below, from state-papers and other documents, might be greatly extended, if it were necessary, to show, subsistence, the freedom of labor from taxation with us, and of protecting duties and ■prohibitions, become permanent." — Eighth Jnnual Message. From JcJf'crson''s Letter to Benjumin Jlustin, 1816. "We have experienced what we did not then believe, that there exist both p-ofligacy and power enoui^h to exclude us from the field of interchanges with other nations ; that to be independent for the comforts of life, we must fabricate them ourselves. We must now place our manufacturers by the side of the agricul- turist. The former question is now suppressed, or rather assumes a new form. The grand inquiry now is, shall we make our own comforts, or go without them at the will of a foreign nation. He, therefore, who is now against domestic manufac- tures, must be for reducing us either to a dependence upon that nation, or be clothed in skins, and live like beasts in dens and caverns. I am proud to say, that I am not one of these. Experience has taught me, that manufactures are now as necessary io our independence as to our comfort." From Madison's Messages. " The revision of our commercial laws, proper to adapt them to the arrangement which hns taken place with Great Britain, will doubtless engage the early atten- tion of Congress. It will be worthy at the same time of their just and provident care, to make such further alterations in the laws as will more especially protect and foster the several branches of manufacture which have been recently instituted or extended by the laudable exertion of our citizens." — 1809. "I recommend also, as a more effectual safeguard, and as an encouragement to our growing manufactures, that the additional duties on imports which are to ex- pire at the end of one year after a peace with Great Britain, be prolonged to the end of two years after that event.'' — 18I4. " But there is no subject which can enter with greater force and merit into the deliberations of Congress, than a consideration of the means to preserve and pro- mote the manufactures which have sprung into existence, and attained unparalleled maturity throughout the United States durin? the period of the European wars. This source of national independence and wealth I anxiously recommend to the prompt and constant guardianship of Congress." — 1815. " In adjusting the duties on imports to the object of revenue, the influence of the tariff on manufactures will necessarily present itself for consideration. However wise the theory may be, which leaves to the sagacity and interest of individuals the application of their industry and resources, there are in this, as in other cases, exceptions to the general rule. Besides the consideration which the theory itself implies of a reciprocal adoption by other nations, experience teaches that so many circumstances must occur in introducinu: and maturing roanufacturin? establish- ments, especially of a more complicated kind, that a country may remain long with- out them, although sufficienily advanced, and in some respects peculiarly fitted for carrying them on with success. Under circumstances giving a powerful impulse to manufacturing industry, it has made among us a progress, and exhibited an effi- . ciency, which justify the belief that, with a protection not more than is due to the enterprising citizens whose interests are now at stake, it will become, at an early day, not only safe against occasional competition from abroad, but a source of do- mestic wealth and external commerce. In selectin? the branches more especially entitled to public patronage, a preference is obviously claimed by such as will re- lease the United States from a dependence on foreign supplies, ever subject to casual failures, for articles necessary for the public defence, or connected with the IN THE UNITED STATES. 137 that the protective policy had always been a special and prominent object of the government, from the adoption of the constitution down primary wants of individuals. It will be an additional recommendation of particu- lar manufactures, where the materials for them are extensively drawn from our agriculture, and consequently impart and insure to that great fund of national prosperity and independence, an encouragement which can not fail to be reward- ed." — Senenik Annual Message. From Monroe's Messages. "Our manufactures will likewise require the systematic and fostering care of the government. Possessing, as we do, all the raw materials, the fruit of our own soil, and industry, we ought not to depend, in the degree we have done, on sup- plies from other countries. While we are thus dependent, the sudden event of war, unsought and unexpected, can not fail to plun?':' us into the most serious difficul- ties. It is important, too, lluit the capital which nourishes our manufactures should be domestic, as its influence in that case, instead of exhaustins', as it must do in foreign hands, would be felt advantageously on agriculture, and every other branch of industry. Equally important is it to provide at home a market for our raw materials; as, by exiendin? the comi)etition, it will enhance the price, and protect the cultivator against the casualties incident to foreign markets." — hiau- gural Address. "Uniformity in the demand and price of an article, is highly desirable to the domestic manufacturer. It is deemed of great importance to give encouragement to our domestic manufactures." — Third Annual Message. "It can not be doubted, that the more complete our interna] resources, and the less dependent we are on foreign powers for every national as well as domestic purpose, the greater and more stable will be the public felicity. By the increase of domestic manufactures, will the demand for the rude materials at home be in- creased ; and thus will the dependence of the several parts of the Union on each other, and the strength of the Union itself, be proportionably augmented." — Fifth Annual Message. " Satisfied am I, whatever may be the abstract doctrine in favor of unrestricted commerce, provided all nations would concur in it, and it was not liable to be in- terrupted by war, which has never occurred, and can not be expected, that there are other strong reasons applicable to our situation and relations with other countries, which impose on us the obligation to cherish and sustain our manufactures. Sat- isfied I am, however, likewise, that the interest of every part of our Union, even those benefited by manufactures, require that this subject should be touched with the greatest caution, and a critical knowledge of the effects to be produced by the slightest changes." — Sixth Annual Message. From J. Q. Adams's Messages. "The great interest of an agricultural, commercial, and manufacturing nation, are so linked in union together, that no permanent cause of prosperity to one of them can operate without extending its influence to the other. All these are alike under the protecting power of legislative authority, and the duties of the representa- tive bodies are to conciliate them in harmony together. " Is the self-protecting energy of this nation so helpless, that there exists in the political institutions of our country no power to counteract the bias of foreign legis- lation ; that the growers of grain must submit to the exclusion from the foreign markets of their produce; that the shippers must dismantle their ships, the trade of the north stagnate at the wharves, and the manufacturers starve at their looms, while the whole people shall pay tribute to foreign industry to be clad in foreign 138 HISTORY OF THE PROTECTIVE POLICY to 1830, being a period of fifty years. That it was also sustained by popular opinion, in a quarter where it has since been repudi- garbs ; that the Congress of the Union are impotent to restore the balance in favor of native industry destroyed by the statutes of any realm?" — Fourth Annual Message. Extract of a Letter from Jndrew Jackson, 1824, to Dr. L. H. Culeman, N. C. "Heaven smiled upon and gave us liberty and independence. That same Provi- dence has blessed us with the means of national independence. . . He has filled our mountains and plains with minerals — with lead, iron, and copper — and given us a climate and soil for the growing of hemp and wool. These being the great materials of our national defence, they ought to have extended to them adequate and fair protection, that our manufacturers and laborers may be placed in a fair competition with those of Europe. . . I will ask, what is the real situation of the agriculturist ? Where has the American farmer a market for his surplus produce ? Except for cotton, he has neither a foreign, nor a liome market. Does not this clearly prove, when there is no market at home or abroad, that there is too much labor employed in agriculture, and that the channels for labor should be multi- plied ? Common sense at once points out the remedy : Draw from agriculture this superabundant labor; employ it in mechanism and manufactures, thereby creating a home market for your breadstuffs — distributing labor to the most prof- itable account; and benefits to the country will result. Take from agriculture, in the United States, 600,000 men, women, and children, and you will nt once give a market for more breadstuffs than all Europe now furnishes us with. In short, sir, we have been too long subject to the policy of British merchants. It is time we should become a little more Jlmericanized, and instead of feeding paupers and laborers of England, feed our own ; or else, in a short time, by continuing our present policy, we shall be paupers ourselves. . • The experience of the late war ought to teach us a lesson, and one never to be forgotten. If our liberty, and re- publican form of government, procured lor us by our Revolutionary fathers, are worth the blood and treasure by which they were obtained, it is surely our duty to protect and defend them. . . It is, therefore, my opinion, that a careiul and judi- cious tariff is much wanted, to pay our national debt, and afl'ord us the means of that defence within ourselves on which the safety of our country and liberty de- pends ; and last, though not least, give a proper distribution to our labor, which must prove beneficial to the happiness, independence, and wealth of the com- munity." Froin Jackson's Second Annual Message. "The power to impose duties upon imports originally belonged to the several states. The right to adjust these duties, with a view to the encouragement of do- mestic branches of industry, is so completely identical with that power, that it is difficult to suppose the existence of the one without the other. The states have delegated their whole authority over imports to the general government, without limitation or restriction, snving the very inconsiderable reservation relating to the inspection laws. This authority having thus entirely passed from the states, the right to exercise it for the purpose of protection does not exist in them ; and, con- .sequently, if it be not possessed by the general government, it must be extinct. Our political system would thus present the anomaly of a people stripped of the right to foster their own industry, and to counteract the most selfish and destruc- tive policy which misht be adopted by foreign nations. This surely can not be the case: this indispensable power, thus surrendered by the states, must be within the scope of authority on the subject expressly delegated to Congress. In this IN THE UNITED STATES. 139 ated, the remarkable conclusion of the ^^ Address of the Society of Tammany, or Columbian Order, to its absent Members, and the Members of its several Branches throughout the United States, New YorJc, 1819," found in the note below,* will sufficiently evince. The address itself is one of great interest, force, and eloquence. The cause of Protection was never advocated more earnestly, or with more lucid and effective arguments. It is also to be observed, that the letter to Dr. Coleman, cited in the other note, written by the great chief of the " Tammany Society" party, and dated five years after this address, is sufficiently clear and decided in its ad- vocacy of a protective system, as also the extract from his message to congress, in 1830. There are no facts of history better certified, than, that the necessity of a protective system for the states, was the main subject of deliberation at the first convention of delegates at Annapolis, in 1786, assembled to consider the question of a constitution ; and at the second, in 1787, when the constitution was framed ; and that, to obtain the power to establish such a system, was a leading purpose of that instrument. General Washington, the president, conclusion I am confirmed, as well by the opinions of Presidents Washington, Jef- ferson, Madison, and Monroe, who have each repeatedly recommended this right under the constitution, as by the uniform practice of Congress, the continued acqui- escence of the states, and the general understanding of the people." — 1830. • « \\rp recommend to you, brethren, to be examples of moderation and firmness to your fellow-citizens, and to hold fast of those stern Revolutionary principles which gave, and which alone can preserve your independence. " Clarkson Crolius, Grand Sachem. " James S. Martin, Secretary. " Countersigned by John Woodward, Clarkson Crolius, Joseph P. Simpson, James S. Martin, Benjamin Romaine, Matthew L. Davis, William Mooney, Committee of Correspondence. New York, October 4, 1819. " Resolutions of the Society of Tammany, or Columbian Order, passed October 11, 1819. "Resolved, That as friends to our country, we recommend to our brethren of the different societies of Tammany, or Columbian Order, the necessity as well as moral duty, to our country, ourselves, and posterity, of refraining from every spe- cies of useless extravagance in our mode of living ; especially in furniture, dress, the table, ostentatious equipa2;e, and expensive amusements. "Resolved, That we will discmmienance the importation and use in our families of every species of foreign manufacture or production, which can or may be reasona- bly substituted by the fabrics or productions of the United States. " Resolved, That as ' economy is wealth,' we seriously recommend to our breth- ren throughout the United States a strict and rigid observance of this great moral duty in their families and social intercourse." 140 HISTORY OF THE PROTECTIVE POLICY appeared in a domestic suit before the first congress, under the new constitution; their second act, as stated above, was a law " for the encouragement and protection of domestic manufactures ;" and fifteen members of that body, with James Madison at their head, were also members of the convention that framed the con- stitution, who could not be ignorant of its great purpose, when they assisted in passing this law. The continued action of the gov- ernment, therefore, upon this subject, for fifty years, as shown without any apparent diversity of opinion — certainly with great unanimity — was a natural consequence of such a beginning, stim- ulated by such powerful causes, derived from the experience of the people. But the personal strifes of aspirants for the presidency, who have been more concerned for their own success than for the public weal, have, within twenty years, introduced a new era in the polit- ical character and tendencies of the country, and put in peril the grand purpose of the American revolution and of American inde- pendence. We have witnessed the strange spectacle of public men, occupying the position of leaders, wheeling to the right and' to the left, and right about face, and turning somersets, on the most grave and momentous questions of public policy, drawing their devoted followers in their train, without any reason to be accounted for, except that of personal ambition ; because such a total change of opinion, so suddenly transpiring, on questions the aspects of which have not changed, may be set down as a moral impossibility with sagacious and far-seeing minds, except in cases where " the wish is father to the thought." Public and ambitious men, seeing that they could not accomplish their ends in one way and by one set of means, would seem to have come to the conclusion to try another way and another set of means, without regard to the good of the country. The government and institutions of the United States, as we have seen, started into being on the basis of the protective policy — were begotten by it. This policy was the native genius of the people ; it was the natural growth of their position, of their struggles, and of their original and subsequent relations. It was a necessity imposed upon them by Providence, from which they could not escape with impunity. It was the natural suggestion of their instincts, as impressed upon them by their history and experience. They were forced into it, and they never could get out of it, ex- cept by violence and sacrifice. Everything in nature, everything IN THE UNITED STATES. 141 in morals, and everything in human prudence and foresight, pointed that >vay. F^or this, they were forced into the revolution ; for this, they were forced out of the confederation ; to secure this, they adopted the federal constitution ; for this, they continued to legis- late on that platform for fifty years ; and behold, in ten years, from ^ 1S30 to 1840, this mighty fabric, which had cost rivers of blood, and mountains of wealth, after having occupied more than two centuries in building — for it dates back to the first setdements of the country — was all leveled with the ground ! It was rebuilt in 1842, and in 1846 is again overthrown ! Such is the history of the protective policy in the United States. i * >% ^ . 142 THE DESTINY OF AMERICAN FREEDOM - ^ /chapter IX. X THE DESTINY OF AMERICAN FREEDOM NOT YET ACHIEVED. The general Desire for Freedom, before and after the Discovery and Settlement of Amer- ica. — American Independence an Epocii of Freedom. — "An American System" means much. — It is a " Commercial System '' — " Pdliticul'' the Shadow, " Commercial'' the Substance. — The Responsibility of a Nation that has Freedom in Trust for Posterity and for Mankind. — Faith as a Power in Man for the Attainment of Freedom. — The Advo- cates of Freedom are in general practically Rii-'ht, though often theoretically Wrong. — Freedom yet in it.s Cradle. — The vacillating Policy of the Country in regard to the Means of Freedom — Seventy Years of the Era of American Freedom gone, and yet Freedom was to be Defined. — The People have much to Learn on this Subject. — What Great Biitain and Europe Desire. — The Jeopardy of American Freedom. — Free Trade would throw it away — would Sell It. Having shown, in Chapter VH., that freedom consists in the enjoyment of commercial rights, and in the independent control of commercial values fairly acquired, we propose, in this chapter, to call to mind the historical facts, that society in Europe, had been tendins: for centuries toward freedom, before an outlet of its un- satisfied population was opened in the discovery of the New World ; that hopes and designs of political emancipation, for the most part, lay at the foundation of the movements of immigrants to this quarter; and that the American colonic^, especially in the north, were founded in this spirit. And we refer to these facts for the purpose of showing, that freedom is progressive, and is never gained fully at a single leap. The royal charters, so far as the influence of those who obtained them could effect it, were studiously framed for the security of rights held dear by the colonists ; and the political history of the early settlements is one of perpetual struggle between royal pre- rogatives and popular claims. The cause of freedom continued to advance, in the minds and hearts of the people of this new world. Events were constantly ripening in North America for an epoch, which ultimately found its date in the establishment of American independence. It was literally, and in the most emphatic sense of the term, an epoch of freedom. It was not an accident of the day ; but it was the event of centuries of preparation. All its seeds were transplanted from Europe. Society there had long been laboring for this birth. There was no safety, in that quarter, for the cradle of freedom, in such an enlarged sense ; nor could its "t-^'-'*^ fc-'l-^ ^/^ ^ ^A^iAi.^i-'^yf^^ ^ %L>C<^- y^-^^-t^ /^'*T_^-- ^^^A*-' ^^ '^^Ay^<^ ..^^e^-t^ /•''^^.-•-w^ ^-^^-i- ^-ii^^cJ^ 2SI ^/ NOT YET ACHIEVED. ^ 143 swaddling clothes be prepared here, till ages had rolled away. Nevertheless, they were being made all the while by careful hands, from the time when Jamestown, Plymouth, and New Amsterdam, obtained a place in history, till the first blood of the American revolution stained this virgin field. From that hour is dated a new epoch in the history of freedom. From that hour commenced a new modification of society, under a new system. System is the word which denotes this new state of things — the American SYSTEM. Will any American deny, that there is, and that there ought to be an American System ? System of what ? Of what principles? What is its foundation, its parts, its structure? Wherein is it peculiar? Does it differ from European systems? And if so, in what ? It is called freedom;^ — was, in fact, a great advance in freedom. In what, then, does this freedom, this system, consist? The answer to this question is found in the argument of Chapter VII. — in commercial rights. It comes, then, to this, that the whole of the American system, so far as it is a peculiar one, is a commercial system, for the establishment and defence of commercial rights. It is commonly called political. But political is the shadow; commercial, the substance. The former characterizes the thing socially ; the latter denotes the thing itself. Hence the name most commonly employed to denote the subject in its social aspects — '■'■ 'poliiical economy;" but we have preferred that of public economy, for reasons specified in the first chapter. The system is political, as being expedient, best, in its relations, or designed to be so ; but its positive character is entirely a commercial one. An American system supposes relations to something foreign ; and it hardly need be said, that these relations, for the most part, have respect to a state or to states of things, in those quarters whence these new and independent legislators came ; that is, from the European world. And as a new and peculiar system, it also supposes a new and peculiar state of society — commercial society, be it observed, not meaning, however, anything other thereby than political ; for it is both, and in both identical. But having ex- plained the sense in which we use the term, commercial, in this connexion, it is expedient to adhere to it, in the present train of reasonin"-, that we lose not siijht of the fundamental doctrine estab- lished in Chapter VII., to wit, that freedom consists in the enjoy- ment of commercial ris-hts. It is the substance, and not the shadow, which we wish to follow up. 144 THE DESTINY OF AMERICAN FREEDOM It is the interest of labor alone that claims to be considered in the formation of an American commercial system. Labor, in every part of the world, is the primary and fundamental power of states ; and the question, in public economy, is, whether its benefits shall accrue to the laborer himself, in the shape of compensation, or to other parties that absorb it to themselves by oppression and wrong, in allowing labor only a bare subsistence. The latter alternative is the European system; the former is intended to be the Amer- ican ; and whether it shall be maintained, depends entirely on the maintenance of the difference in the price of labor, by an American commercial system, in relation to foreign parts. It is exclusively a commercial question, determined by a commercial principle, which ffoverns the whole commercial world, and is defined with all the accuracy of figures. It is simply, whether the power of one, in trade, is equal to the power of three ; in other words, whether American labor, which costs three, can stand, in the same market, against European labor, which costs one ; for that is about the average difference. It is not pretended, as stated elsewhere, that it is necessary for an American system to afford an average protection to American labor, equal to this difference, because it is understood and known, that the very design of the European system, in depriving labor of its fair reward, is to appropriate the wages kept back to aggrandize the usurpers, and that the aims of such usurpation would be dis- appointed, if the wide margin of this difference were all absorbed in a commercial competition. A very small fraction of it will ordinarily answer the purpose of such a strife ; and the smallest possible fraction by which one producer can undersell another, will always secure the market. It is the fact of this difference, and the immense power which it gives to European labor over Amer- ican, which claims the consideration of American statesmen, that their eyes shoidd ever be open to the points on which this power may be brought to bear, and to the amount of it that may be employed in any given direction. For American statesmen to forget, to deny, or not to see, that this adverse power exists, and that, in the hands of those who wield it, it is ever on the alert to embrace its opportunities to assail the vulnerable points of the American sys- tem, is one and the same thing as to withdraw the shield of Amer- ican freedom, and leave it entirely at the mercy of those from whom it was purchased with so much blood and treasure, and by ages of strife and agony. The vulnerability will be found at pvprv NOT YET ACHIEVED. 145 point where foreign cheap labor comes into competition, in our own market, with American labor, whether it be labor already in action, or labor ready to go into action, under adequate encourage- ment. The right of chances, as remarked in another place, is as sacred as the right of possession. „^ Jt is entirely false to say, as Free Trade avers, that an American system controls labor, and forces it into unnatural channels, oper- ating unequally and unjustly on different departments, encouraging one kind, and discouraging another. Such is neither the design, nor practical operation of the system. It is based on the principle of encouragement, not of control; of protection, not of injustice; of invitation to, not of prohibition of, home labor. It is to call out the dormant energies of the people, by opening the door to new enterprises, which can not, by any possibility, operate to the dis- advantage of any other ; bnt, on the contrary, must necessarily benefit all others, by diminishing the number engaged in each, and affording them abetter chance, at the same time that it increases the demand for their products, by raising up new customers. We do not mean, that the multiplication of pursuits, under such a sys- tem, as a matter of course, diminishes the number engaged in each, positively, but relatively. It prevents them from being over- crowded, to make them unprofitable, and makes each more prof- itable, as elsewhere shown. The great error, therefore, in this branch of the general argument, as committed by the Free-Trade economists, is one of principle. They assume, that a commercial system, enacted for the protection of home industry, controls labor, and thereby operates to the disad- vantage of other branches not comprehended in any specific acts of protection ; whereas, the practical operation of such a system, in the United States, is a mere invitation to labor and capital, that lie dormant, or which are not so profitably employed as they might be under these new encouragements. It neither controls the labor or capital so invited into a new field, nor any other branches of them. It injures no other, but benefits all. There may, indeed, be a negative injustice done to some branches of industry, by a partial distribution of protection, which ought to be avoided ; but it is impossible there should be any positive injustice in any quarter ; it is impossible, indeed, that there should not be a universal benefit, by every new pursuit that is called into being, under such a sys- tem, unless it can be shown, that some parties are positively taxed by protection extended to others. But it is abundantly proved, 10 * 146 THE DESTINY OF AMERICAN FREEDOM elsewhere in this work, that such is not the fact in the operation of an American system of Protection ; but, on the contrary, with no exception that is permanently injurious to any party whatever, that the protected articles which we wish to be cheapened, such as those of manufacture, are cheapened by protection ; and that those, the prices of which we wish to sustain, and if possible, to raise, such as those of agriculture, and such as labor itself, are sustained and raised by the same means. Freedom, in the social state, is a thing of great price, because it is of great cost. Centuries rolled away, in that great strife, which terminated in the birth of American freedom. Empires were shaken and revolutionized, and thrones tottered and fell, in the long agony. And what was this for ? That the rightful owners of all commercial values might hold their own, and control it. Analyze the things wiiich men hold dear on earth, sift them to their foundation, enter the magazines of all terrestrial good, and the wheat will be found to consist in commercial values. There is a great responsibility resting on the nation that has attained to the greatest degree of freedom, and secured to every citizen the undisturbed possession and independent control of his own — a responsibility, not only as a spectacle, an example for mankind, but as involving a trust for posterity. To throw it away, is not simply a folly, but it is a crime against the human race. The people of the United States occupy precisely this position. Their forefathers gained for them a priceless boon, in one great struggle, and by hazards and costs not to be estimated, handed it down as a charge to keep and bequeath to endless generations, or till human society should be dissolved by the fiat of Heaven, and till all its members shall come to judgment. And what is that boon? Simply, as before shown, that every man may enjoy his own commercial rights, without disturbance, and without liability to depredation ; and these rights are not less, but more, in the chances of the future, than in the present. 'Faith, as an attribute of man, for a better state on earth and hereafter, considered as a general sentiment, is providential. Men can not always tell why or how it comes ; but they have it ; and this faith is itself the parent of the thing which they desire. It is evident enough, that there was a strong faith in general society, that the discovery of America would open a new era in the history of the world. What specific forms these expected events would assume, was of course a secret to those who confided in their NOT YET ACHIEVED. 147 future development. Nevertheless, such a faith existed, and had a potent influence on the minds of men — especially of those who embarked in the various enterprises of settling the new continent. This undefined expectation at last took shape and a palpable form in the achievement of American independence, which we have marked as an Epoch, in the highest and most enlarged sense of the term — a point in the progress of society, to be followed by new scenes, in a new drama, of an indefinite and inconceivable extent, as to the future, but all deriving a character from this grand event. We call it an Epoch in the progress of freedom. It will be observed, that we have devoted a chapter expressly to illustrate and establish the proposition, that freedom, consists in the enjoyment and independent control of commercial values by and among those who create them, or who, by the usages of society, rightfully come into their possession as heirs. We mean chiefly those who create them ; but the rights of heritage can not be denied, and in all ages, and in all states of society, have been held sacred. We are not aware, that there can be any objection to such a state of society, where all rights of primogeniture and of entail are nullified by fundamental law. By the creators of commercial values, it will of course be understood, that we mean all those, who fairly acquire property, or a valuable position, in any way, directly or indirectly, by their labor, industry, or skill, in any pur- suit of life. Our object in this definition of freedom, has been to erect a wall between the rightful owners of commercial values, and the usurpers of them ; and the design of our argument on this point has been to show, that freedom is not an abstraction, but the enjoyment of a valid commercial consideration. As much as free- dom is supposed to be worth, there is scarcely any subject on which its advocates have more indistinct, vague, and indefinite notions, as one of speculation. Practically they are pretty sure to be right ; theoretically not so much so. What we have proposed to show in this chapter, in connexion with the numerous propositions allied to this, which we have en- deavored to establish in other parts of this work — and which, therefore, we here assume as established — is, that the destiny of American freedom is not yet achieved. We might, indeed, say, with much appearance of reason, that it is scarcely begun to be achieved. As before remarked, it took centuries to establish the epoch. The era commencing with that date will extend, as we trust, into a long and indefinite future. It may, perhaps, be as- 148 THE DESTINY OF AMERICAN FREEDOM sumed, that it has scarcely begun to develop itself. That three score and ten years of this era should have passed away, the peo- ple in the meantime boasting of freedom, and yet, that we should have occasion to attempt to define what freedom consists in, at this day, is a curious fact; and that that definition should be entirely new, is a very instructive fact, if it be also true. That the people of this country, under their new organization of society, with every possible chance to establish freedom on a permanent and immova- ble basis, should have made such mistakes as are proved in other parts of this work, in regard to the protection of their own commer- cial rights, which, in the present day, comprehend all rights of any consequence ; that they should have gone on for seventy years, blundering, so to speak, in bhnd and dark ways, often overwhelmed witli public and private misfortune, without having been able to determine on any system of public economy, as a permanent one, but for ever vacillating from one extreme to another ; that Free Trade should be the dominant principle of one time, and that of Protection soon after, alternating as regularly as the pendulum of a clock ; that opinion on this great question, on which so much de- pends, should still be divided, and doubtful with many what will be the end of it all ; if, indeed, freedom be involved in this ques- tion, as we sincerely and profoundly believe it is, such a history goes far to prove, that the foundation on which it rests, and the pivot on which it turns, are yet but poorly apprehended. Nevertheless, this slow progress of freedom — we assume to call it so, from what we have proved — is not so discouraging as might at first sight be supposed. It does not show, that the people of this country do not understand what freedom is practically; but only, that they have yet much to learn as to the theory of best securing its ends. It proves, too, that freedom, like all good things, on earth and in heaven, is a costly blessing, hard of attainment. The Amer- ican fathers, who wasted their treasures and shed their blood for it, were, without doubt, in the right path. So were the founders and framers of our government and its institutions. So, generally, has been the march of our history ; and so, above all things, are the instincts of the people. Let the people once understand, that free- dom is not a vague abstraction, floating high above their heads, but a palpable thing, like cash in hand ; that it consists in the enjoy- ment of their own commercial rights, and in the independent con- trol of their own commercial values, such as they have fairly earned by their own hard toil, or by their skill and enterprise, or such as NOT YET ACHIEVED. 3 49 they have received from their fathers, or their fathers' fathers, who obtained them in the same honest way ; let them understand, that the original controversy with the British crown, on this very soil, was about these very things, and nothing else ; that the occasion of that controversy was the degradation of labor in Europe, and the at- tempt to keep it down here ; that it was the robbery of labor of its fair reward, of its rights ; and that the Free-Trade system operates precisely in the same manner, and to the same effect, on the com- mercial rights of the American people, to rob them of their com- mercial values, as did that system of oppression and wrong ao-ainst which the American fathers rebelled ; and it will not take long, after that, for the American people to understand what freedom is. We have shown, elsewhere, that the claim of Free Trade, among us, to buy cheaper of foreigners than we can buy at home, and to sell to them on better terms, amounts to nothing ; that, indeed, the argument on this point is reversed ; that a protective system is more economical, to all parties, in all these respects; and that, under it, we can go forth into the market of the world, and rival those very foreigners, who, it is averred, would sell to us cheaper. How could they sell to us cheaper, if we could rival them in the foreign mar- ket? The absurdity is manifest, and the argument conclusive. Turn which way we will, in the consideration of this subject, its aspects strike us everywhere the same. The establishment of American independence was, beyond all question, an epoch of freedom; that freedom consisted in the enjoyment of commercial rights, and in the independent control of commercial values by and among those to whom they belonged ; the very fact that these rights were redeemed, proves, that, having been once usurped by wrong, and subsequently rescued, they may be again usurped, and that they require protection ; and yet Free Trade has the audacity to propose, that this protection should be withdrawn. The question, -^ ^ therefore, between Protection and Free Trade, in the United States, is for ever and necessarily a question of freedom — a freedom ac- quired by force of arms, at great expense of blood and treasure, requiring to be defended by a public policy ; a freedom which Peee Trade offers for sale ! Or, if it can not sell it, to throw it to the winds of heaven, as if it cost nothing, and were worth nothing! > Ifik American freedom does not consist in these things, then it is nothing ; then the strifes of the American revolution, and the cost of American independence, were without excuse, and a waste; then there was no good reason for that contest, and the result is a- 150 DESTINY OF AMERICAN FREEDOM NOT YET ACHIEVED. failure. Who will say this? Doubtless something was acquired ; and doubtless there remains something to defend, besides an empty- name. What is it? Where is it? In what does it consist? Whose property is it? If we have not already answered these questions, we know not how it is to be done. If it is not in every man's own position, as it is precious to himself; as it enables him to live more to his satisfaction, than he could otherwise do ; as it gives him a house and home, food and raiment, education for himself and chil- dren, comfort, happiness — all without fear of deprivation ; in a word, if it does not consist in the use, enjoyment, and independent control of those commercial values, which he can call his own, and which he knows are his own, because he created them, or received them from his father, then, we confess, we do not know where to find the thing called freedom. It can not be denied, that this controversy has opened up to us at last some very grave features. On the one hand, we behold the suffering and the virtuous of mankind, for centuries, carefully watch- ing the ripening of the fruit of the tree of liberty, gathering it as it falls into their lap, and garnering it up for use, till a concentrated family of its devotees have proclaimed their rights, and sworn to defend them. They have sown their seed, and awaited their time in patience. But, on the other hand, while these newly-planted fields were ripening to the harvest, the sickle in the hands of the reapers, and every prospect full of hope, a cry is raised, that this harvest is common property, and the whole world rush in, each one to snatch what he can in the melee. This is Free Trade. y. THE DIFFERENT STATES OF SOCIETY. 151 CHAPTER X. THE DIFFERENT STATES OF SOCIETY IN EUROPE AND AMERICA REQUIRE DIFFERENT SYSTEMS OF PUBLIC ECONOMY. The three fundamental Elements of European Economists. — Adam Smith's and Ricardo's Statement of them. — These Elements do not exist in the United States as a Rule, but only as Exceptions. — The Ancient System of European Society gives Character to the Modern. — The economical Position of the Laborer there, the same as that of the Ox or the Slave. — This Position assigned to Labor by European Economists, as proved by their own Statements. — The Theory of Malthas justifies this Position. — This Doctrine pervades the European, and has been transferred into American Systems of Economy. — The prevalent Principle of Land Tenures in Europe fundamentally different from that which prevails in the United States. — "Rent" the lord of all in Europe — The Prin- ciple of Serfdom and V'illanage, under other names, still prevails in that quarter of the World. — Labor doomed there. — American Society fundamentally different. — The same System of Public Economy can not apply to each. — Reform in America, slow, but sure. — Can only be effected by Public Economy. — Free-Trade Economy hostile to Popular Rights. Having disclosed, in Chapter II., the contingent basis on which a system of public economy must rest, and the contingent ground on which alone its propositions can be established, to wit, the application of experience to a given state of things, it may be useful, in this stage of the inquiry, to exhibit some of the points of difference in the states of European and American society, to both of which, it is preposterously claimed by the advocates of Free Trade, that a common system of economy is equally applicable. The British economists of the Free-Trade school, have agreed on the fundamental elements of public economy, which, they aver, comprehend the entire basis of the superstructure, on which, and on the ramifications growing out of ihem, are based all the propo- sitions of their system. The importance of the position of these fundamental elements in their system, arises from the fact that all their reasonings are, directly or indirectly, founded upon them. We propose to show that two of these three distinct supports of their system, are wanting in American .society, and consequently, that any superstructure built upon them, for application in the Uni- ted States, must fall to the ground. Set up a house on three abut- ments, and take away two, what will be the result ? It is down, a heap of ruins. It will be sufficient to cite Adam Smith's and Ricardo's description and adjustment of these three fundamental 152 THE DIFFERENT STATES OF SOCIETY elements, to indicate what they are. Smith says: "The whole annual produce of the land and labor of every country naturally divides itself into three parts — the rent of land, the wages of labor, and the profits of stock ; and constitutes a revenue to three different sorts of people — to those who live by rent, to those who live by wao-es, and to those who live by profit- These are the three great, original, and constituent orders of every civilized society, from whose revenue that of every other order is ultimately derived." Ricardo represents them thus : " The produce of the earth, all that is derived from its surface by the united application of labor, machinery, and capital, is divided among three classes of the com- munity, viz., the proprietor of the land, the owner of the stock or capital necessary for its cultivation, and the laborers by whose industry it is cultivated. . . The proportions of the whole produce of the earth w^hich will be allotted to each of these classes, under the names of rent, profit, and wages, will be essentially different. . . To determine the laws which regulate this distribution, is the principal problem in political economy." It will be observed, first, that these views are limited — not pro- found — taking their own programme as a rule. "The principal problem in public economy," is here announced, as growing out of afrriculture, as if the arts in all their branches, as if commerce and trade, as if the fisheries, &c., had nothing to do with it ; or as if the subject had nothing to do with them. The leading topics of Ricardo's work, as enumerated in his table of contents, will show that he surveyed but a limited field ; and it will also be seen that most of those topics grew out of a state of society which, if not entirely unknown in the United States, exists only in small frag- ments, coming down from what is here regarded as a vicious state of society, and which is alike repugnant to the genius of the American people and of American institutions. Take for example the topics of "Rent;" "Taxes on Rent;" "Tithes;" "Land Tax ;" " Taxes on Gold ;" " Taxes on Houses ;" " Taxes on Wages and Profits;" "Poor Rates;" "Taxes on Producers;" &c. These, making more than a third of the chapters of this work, are great practical subjects in Europe. They enter into all the forms of society there, and pervade its entire structure. But not so in the United States. They are, for the most part, contrary to the genius of the American people, and too obnoxious to be intro- duced among them to any considerable extent. The ambition of every American citizen is to be an independent proprietor of a free- IN EUROPE AND AMERICA. 153 hold estate, or to acquire an independence of some kind that is tan- tamount; and the American people have the greatest repugnance to direct taxation. Perhaps not more than a moiety of the subjects of legislation in Europe, are subjects of legislation in the United States, and the other moiety present themselves in forms so diverse in each quarter, that it is not possible to treat them in the same way for both hemispheres. How, then, is it possible that a system of public economy which is adapted to the former sphere, and which grows out of it, should be adapted to the latter, when the very de- sign of such a system is to give advice on the subjects of legisla- tion, and to suggest forms ? But It will be found, on an examination of these three capital elements, " rent, pro6t, and wages," as presented in the above extracts, when their meaning is considered, that the British Free- Trade economists occupy a field entirely different from that of the United States, and that not one of these three comprehensive ele- ments can be found among us, to any considerable extent, in the forms in which they stood up before them, as an actual state of so- ciety for them to treat of, and write for. They divide society into "three classes, the proprietor of the land, the owner of the stock or capital necessary to its cultivation, and the laborers by whose industry it is cultivated ;" and in correspondence with this classifi- cation, they appropriate to the first class " rent," to the second " profit," and to the third " wages." Ricardo's programme con- cludes by saying : " To determine the laws which regulate this distribution, is the principal problem in political economy.' This, no doubt, is a fair description of the fundamental elements of their theory, as regards both the premises and the conclusion. Such was and is still the state of society there. The exceptions they did not deem worthy of consideration, and must take care of themselves, or be left to the discretion of legislators. Now, it hap- pens, that the things which constitute the rule in that state of so- ciety, are the exception in the United States; and, vice verso, the things which constitute the rule in the United States, or which ought to do so, are the exception in Great Britain and in Europe. For the most part, American citizens are independent proprietors of the soil, or of some equivalent ; they all aim at this ; and there is not a man among them who will submit to the abject and depend- ent condition of the third class of European economists. Ameri- can society does not exist in such forms. Mr. Mill, the logician, before cited, remarks very pertinently on 154 THE DIFFERENT STATES OF SOCIETY this point : *' It has been greatly the custom of English political economists to discuss the natural laws of the distribution of the produce of industry, on a supposition which is scarcely realized anywhere out of England and Scotland, viz., that the produce i? shared among three classes, altogether distinct from one anothe', laborers, capitalists, and landlords; and that all these are free agents, permitted in law and in fact to set upon their labor, their capital, and their land, whatever price they are able to get for it. The cion- clusions of the science, being all adapted to a state of society thus constituted, require to be revised when they are applied to any other. They are inapplicable where the only capitalists are the landlords, and the laborers are their property, as in slave countries. They are inapplicable where the universal landlord is the state, as in India. They are inapplicable where the agricultural laborer is generally the owner both, of the land itself and of the capital, as in France [also in the United States], or of the capital only, as in Ireland. It may be objected to the existing race of economists, that they attempt to construct a permanent fabric out of transitory materials; that they take for granted the immutability of arrange- ments of society, many of which are in their nature fluctuating and progressive, and enunciate with as little qualification as if they were universal and absolute truths, propositions which are perhaps ap- plicable to no state of society except the particular one in which the writer happened to live." Adam Smith saw and recognised the difference of land tenures in Europe and America; but still attempted to force his principles on these different states of things. He says : " A gentleman who farms his own estate, after paying the expense of cultivation, should gain both the rent of the landlord and the profit of the farmer. He is apt, however, to denominate his whole gain profit, and thus con- founds rent with profit. The greater part of our North American and West India planters are in this situation. They farm their own estates, and accordingly we seldom hear of the rent of a plantation, but frequently of its profit." Adam Smith, like all of his school, insists that everything in civilization originates in and is based upon "rent, profit, and wages ;" and where he can not find rent, he says it must be there notwithstanding. The rent of a farmer, who owns the land he cultivates, he says, is that part of his profit which would answer to the interest of the cost or present value of his plantation. But why insist on calling this rent ? In the United States, where people, for the most part, work their own plantations and farms, it IN EUROPE AND AMERICA. 155 is only an imaginary distinction. In our state of society, two of the three great and fundamental elements of public econon)y in Great Britain and Europe, or which Adam Smith and his school have installed in this position, to wit, rent and profit, disappear, can not be found, as a general rule, clothed with the attributes with which they have invested them ; and even the third, wages, is a very different thing here. The whole three, indeed, are here con- founded, and merged in one ; and where any things are found to answer to the theory of those economists, they are the exceptions, not the rule. Why, then, render confusion worse confounded, by attempting to force on us a nomenclature of public economy, when we can find nothing to answer to these names, bating only excep- tions to general rules ? For the most part, ours is a different world from theirs. Things here started different, have grown up differ- ent, and are different. Even the things among us, which they tried to make like unto theirs, while they governed us, we have greatly modified since we became independent. It is impossible for an American even to understand European economists, while writing and expounding their theory of *' rent, profit, and wages," unless he puts himself to the trouble of becoming familiar with their social and political history, running back for centuries. Their nomen- clature is unintelligible here, simply because it does not apply to things with which Americans are acquainted. How absurd, then, to force it on things which do not exist in any forms to be recog- nised under such names? We have, indeed, things called rent, profit, and wages ; but we have no such system, as European econ- omists apply these terms to ; and it is impossible they should be ap- plied here, in the same sense in which they apply there, without leading to error. M. Say has, also, very naturally recognised the absence, in America, of one of the three great elements of public economy in Europe, in the following passage: " Families, transplanted from a civilized, to an entirely new country, carry with them theoretical and practical knowledge, which is one of the chief elements of pro- ductive industry. They carry, likewise, habits of industry, cal- culated to set these elements in activity, as well as the habit of subordination, so essential to the preservation of social order. They commonly take with them some little capital, also, not in money, but in tools and stock of different kinds. Moreover," he says, " they have no landlord to share the produce of a virgin soil, far exceeding in extent what they are able to bring into cultivation 156 THE DIFFERENT STATES OF SOCIETY for years to come." Along with tliis absence of land-lordism, or rent, comes also, and necessarily, the absence of another of the three great elements of the European system, which they call profit, and which refers exclusively to the position and interest of the capitalist, or farmer, who stands between the landlord and the laborers. It must be seen, therefore, that the second of these elements supposes the first, and that, without the first, the second can not exist. Consequently, two of the three great elements of public economy in Europe, particularly as laid down by British Free- Trade writers, are wanting here. It would, therefore, be absurd to suppose, that a system founded upon and growing out of these three elements, could be adapted to a state of society, where two of the three are wanting, and where the three are merged in one. The result is simply this : That a superstructure built on three supports, can not stand, if two be taken away. In the United States, these three, as a general rule, are merged in one, and the plan of the architect must be formed anew, and adapted to his foundation. Though the ancient system of European society is commonly supposed to have been broken up, it is only a change of form. It may, indeed, have been alleviated. But the image of it remains distinctly traced in the theory of society presented by British and other European economists, as composed, fundamentally, of land- lords, farmers, and laborers, or " rent, profit, and wages." They suppose that the land is owned by one class, who receive " rent" for it; that it is cultivated by another class, called farmers under their system, who have capital enough to stock it, provide imple- ments, and hire laborers, and whose business is that of super- intendence ; and that it is worked by a third class, formerly called " villains," now designated by the name of laborers, but whose wages are only enough for bare subsistence, such as is provided for the ox or the horse. Such are their fundamental elements for a system of public economy. They provide nothing for labor but subsistence, and the least possible that will answer that end. They do not consider that labor is entitled to anything more. It never entered their heads, that labor might aspire to independence, to proprietorship, even to affluence. They consider that God, or society, has given the land to one class ; that an intermediate class are to take care of it, and support the first class ; and that a third and abject class, born to toil, and nothing else, are to do all the work, and support the other two classes, receiving just enough to IN EUROPE AND AMERICA. 157 give them strength to do the greatest service, in the same manner as a man feeds his ox or his horse, and for the same object. Such was the old system of Europe ; such, virtually, is its system at this day, particularly in Great Britain. Such is the system of Adam Smith, Ricardo, Say, M'Culloch, and others. Hear Adam Smith on this point: " A man must always live by his work, and his wages must, at least, be sufficient to maintain him. They must even, upon some occasions, be somewhat more; otherwise, it would be impossible for him to bring up a family, and the race of such workmen would not last beyond the first genera- tion. Mr. Cantillon [one of the British economists] seems, upon this account, to suppose that the lowest species of common laborers must everywhere earn at least double their own maintenance, in order that, one with another, they may be enabled to bring up two children ; the labor of the wife, on account of her necessary attendance on the children, being supposed no more than sufficient to provide for herself. But one half the children born, it is com- puted, die before the age of manhood. The poorest laborers, therefore, according to this account, must, one with another, at- tempt to raise at least four children, in order that two may have an equal chance of living to that age. But the necessary mainten- ance of four children, it is supposed, may be nearly equal to that of one man. The labor of an able-bodied slave, the same author [Cantillon] adds, is computed to be worth double his maintenance; and that of the meanest laborer, he thinks, can not be worth less than that of an able-bodied slave. Thus far, at least, seems cer- tain, that, in order to bring up a family, the labor of the husband and wife together must, even in the lowest species of common labor, be able to earn something more than what is precisely neces- sary for their own maintenance; but in what proportion, whether in that above mentioned, or in any other, I shall not take upon me to determine." Thus Adam Smith. It can not be denied, that this is a very nice, close calculation ; and it will be observed, that the case of the slave is brought in as the measure of economy in the case ! All that is proposed, thought of, is, that the race of laborers shall have enough to perpetuate themselves, '* lest they should not last beyond the first generation." Is it possible, that these givers-out of law for the social state could enter into such a conspiracy against the rights o( mankind ? Such, undoubtedly, is the fact. Hear, also, M. Say on this point : '* Simple or rough labor may 158 THE DIFFERENT STATES OF SOCIETY be executed by any man possessed of life and health. Wherefore^ bare existence is all that is requisite to insure a supply of that class of industry. Consequently, its wages seldom rise, in any country, much above what is absolutely necessary to subsistence ; and the quantum of supply always remains on a level with the demand ; nay, often goes beyond it. Wherever the mere circumstance of existence is sufficient for the execution of any kind of work, and that work affords the means of supporting existence, the vacuum is speedily filled up. . . In this class of life, the wages are some- what more than is necessary for bare personal existence ; they must be sufficient to maintain the children of the laborer also. If the wages of the lowest class of labor were insufficient to maintain a family, and bring up children, its supply would never be kept up to the complement. . . A full-grown man [a rough laborer] is an accumulated capital ; the sum spent in rearing him, is indeed con- sumed ; but consumed in a reproductive way, calculated to yield the product man. . . To those whose whole income is a bare sub- sistence, a fall of wages is an absolute death-warrant, if not to the laborer himself, to a part of liis family at least." It is, then, confessedly, an element of their system, that " a fall of wages is an absolute death-warrant, either to the laborer, or a part of his family !" Hear, also, M'Culloch : " There does not seem to be any good reason why man himself should not, and very many why he should, be considered as forming a part of the national capital." That is, the bones and sinews of the laboring classes, in the same manner as slaves, are always classed with chattel property. It is obvious, that M'Culloch could not mean anything else. For they who do not work, who are not producers, are consumers, and could not be viewed in the light of capital, in the eyes of an economist. We have, then, in the above-cited passages from Smith, Say, and M'Culloch, an explanation of what Ricardo means by the fol- lowing part of the citation already made from him : " The propor- tions of the whole produce of the earth, which will be allotted to each of these classes, under the names of rent, profit, and wages, will be essentially different." How and for what reason different? Which of these classes is to be the favored one? Or which two of them? Which is to be the most, and which the least, favored? An " essential difference" is announced. This is a strong, an emphatic expression, composing a part, an element, o{ a plan of society, of a system of public economy, unblusbingly proposed to IN EUROPE AND AMERICA. 159 the world, not only as a real state of things, existing from time immemorial, and then existing, but to exist for ever, without remedy, or the hope of it ! The landlord is to get the principal part ; his farmer, or the capitalist who hires the farm, and pays the rent, is to come next for his share, in the shape of profit ; and what is the portion of the laborer, under this system"? The same as that of the ox or horse that drags the plough or the harrow — just enough to keep him in the most fit state to work. That is all this system has ever yet done ; it is all it ever intended to do ; it is all it ever will do, till Europe is reyolutionized ; it is all that these economists have ever thought of — all they have provided for in their systems. Mr. Malthus's theory of population, which is generally respected in Europe, particularly in Great Britain, explains all this. He thinks men multiply faster than there is room, work, and food, for them ; that the masses will fight against each other for employment to support life ; that landlords, and all capitalists, may rely on this natural strife, among laborers, in bidding for the lowest wages that will support existence; and as a consequence, resulting from this theory, it may be assumed, that the natural increase of the human family is not a blessing, but a curse, to the majority of the race ; and that the masses are doomed by Providence, to degradation, to a state of serfdom or slavery, to want and wretchedness, whhout hope or possibility of relief. Ratiier than be guilty of this libel on Providence — it is indeed a very grave and impious one — it would have been much more consistent with Christian piety, and with the Christian doctrine of morals, it may be said more philosophical, to assume a defect in society. It is shocking to ascribe such a want of wisdom and goodness to the Creator ! Mr. Malthus supplies in theory what was wanted to sustain the practice of the European world, to wit, the hopeless degradation and misery of the masses ; and the Eu- ropean economists of the Free-Trade school assume the fact as a postulate, putting it in the place of one of the foundation-stones of their edifice! They are not ashamed to do this openly — to make it visible, prominent, staring out in the face of man and of heaven. This theory, recognised and reduced to practice in society, is an insuperable bar, a yoke that can not be broken, an iron despotism over the masses of mankind. This extreme necessity of man, resulting from Malthus's theory, which dooms the masses to work for bare subsistence, the Hon. Mr. Appleton (Nathan) says, is taken by the modern school of 160 THE DIFFERENT STATES OF SOCIETY economists, " sucli as M'CuUoch, Ricardo, and others, as the natural rate of wages. This low and abject state of labor," he says, " is the original principle from which they have drawn most important conclusions as to the foundation of their system, it being admitted [by them] that profits go wholly to the owners of capital employing labor, and no part of the accumulation to the laborers themselves." It may, therefore, be assumed as a fact, involving a fundamental element in the system of the Free-Trade economists, and pervading every part of it, that the masses of mankind are to be regarded as mere working machines for the benefit of the few, with no other cost than to be kept in the best working order. Such an element of public economy, lying at the foundation of a system, being as one to three of the capital parts, stops nowhere in its influence and control over the various subdivisions and ramifications of that sys- tem. The only thing that remains the same, is, the position, the necessity, the hopeless doom of this working machine. If it should be said that some measure of political freedom has been granted to the working classes in Great Britain, and in some other states of Europe, it amounts to very little upon examination, and is rather a mockery of their condition, than a ground of hope for future emancipation, under such a recognised system of public economy, as above described, in perpetual and full operation. The number of freemen entitled to the elective franchise among the laborers of Great Britain, is very small, even under their boasted reform bill ; and their position, as electoi-s, is not, to any considerable extent, independent. They are for the most part under the influence of their employers, in the use of this privilege, which renders it of little avail to them as a political right. But the entire disqualification of the great masses of the toiling millions of Great Britain, which is generally allowed to have more freedom than any other country in Europe, is an insuperable obstacle to their emancipation. Some of the smaller European states have, indeed, a semblance of freedom ; but even that amounts to but little in the general reckoning, and the cases are so isolated and walled in by opposing barriers, as to amount to much less in their influence. No promise has ever yet dawned on that vast domain of the civil- ized world, that is likely to disturb the doctrine of the economists in that quarter, or to require a new classification of the human race in their system. The landlord and his rent, the capitalist and his profit, the laborer and his food, seem likely to continue for ages in IN EUROPE AND AMERICA. 161 the same relations to each other, with the same apportionment of the goods of this hfe, " essentially different," the third having no political influence, and few of them any poUtical rights what- ever. The prevalent principle of land tenures in Europe, together with the principle on which land was originally distributed, in con- stituting the foundation of the present state of society there, seems to lie at the foundation of the Free-Trade system of public econ- omy. Look at the three great parts of that system, " rent, profit, and wages." The original and fundamental principle of land tenures in Great Britain, seems to be that they are held of the crown ; that in look- ing backward, the crown is a ve yJus ultra seignory, as a sovereio^n corporation of and by itself; that, except crown-lands reserved, the territory was distributed among and bestowed upon the nobles by the sovereign, under royal patents, or some appropriate instru- ments of conveyance ; that most of the lands have so descended ; and that the changes of modern times have not essentially dis- turbed this state of things. The principal land-owners of Great Britain, even now, do not exceed some thirty odd thousand, in a population of twenty-eight millions. In the monarchical countries of Europe, which comprehend most of its territories, the principle of land tenures is substantially the same as in Great Britain, how- § ever it may run into difi'erent forms of application. Hence a sys- "v tem of public economy growing out of such a state of things, and ^ adapted to it, begins with this first principle, and is controlled by its influence throughout. The following definition of "rent," by Adam Smith, is a very instructive comment on the bearings of British and other European land tenures : — " Rent, considered as the price paid for the use of land, is natu- rally the highest which the tenant can afford to pay, in the actual circumstances of the land. In adjusting the terms of the lease, the landlord endeavors to leave him no greater share of the produce than what is sufficient to keep up the stock [capital] from which he furnishes the seed, pj>ys the labor, and purchases and maintains the cattle and other instruments of husbandry, together with the ordinary profits of farming stock [capital] in the neighborhood. This is evidently the smallest share with which the tenant can pos- sibly content himself, without being a loser; and the landlord sel- dom means to leave him any more." 11 162 THE DIFFERENT STATES OF SOCIETY It will be seen, again, that this is a pretty close calculation, as it bears on the tenant, or the farmer as he is called in England, which does not mean exactly the same as in the United States. In every new lease, the English landlord is as much in the market with his land, to get the most he can for it, according to the principles laid down in the above definition of Adam Smith, as his tenant is with his produce; and he will take advantage of every new adventitious value. He may sometimes lose by this principle; but in a thriving country, he generally gains. When a landlord finds seaweed thrown up by the tides on the shore that borders his land, though furnished by Providence, and falling not within his patent, he nev- ertheless taxes his tenant for its value as a raw material for purposes of manure. The barren rocks of the Shetland Islands are taxed with rent for every fisherman's hut — not for the value of that which is above the tide, but according to the value of that which the hardy fishermen, in their perilous expeditions, draw up from the deep blue sea. They must live, and bring their produce on shore. But they must pay the landlord's rent, which is graduated by the excess of the productive wealth of the sea, above the fisherman's necessities ! Large parts of the British metropolis are now stand- ing on the estates of British noblemen, and yield a rent corre- sponding with their value at the time of the latest lease. The annual income of the duke of Sutherland is ,£360,000, or $1,742,240; that of the duke of Northumberland, £300,000, or $1,452,000; that of the marquis of Westminster, £230,000, or $1,355,200 ; that of the duke of Buccleugh, £250,000, or $1,210,000. The English nobility alone, numbering about 400 peers, not including Irish and Scotch, receive an annual income of £5,400,000, or $26,026,000. The annual income of the English gentry, not reckoning Irish and Scotch, including baronets, knights, country and other gentlemen, is £53,000,000, or $256,250,000, or more than one sixth of the aggregate income of all classes of the British empire, England, Ireland, and Scodand, which is about £300,000,000, or $14,520,000,000. The civil list or annual appropriations for the royal household, fixed on William IV., was £510,000, or $2,468,400. This grant to William IV., was a reform ; as it appears that the annual average of the civil list, from 1760, the accession of George III., to the demise of George IV., was £1,315,000, or $6,364,600. The annual income of persons employed under the British government is £6,830,000, or $34,673,200. IN EUROPE AND AMERICA. 163 The above examples of income are sufficient to show how the wealth of Great Britain is chiefly absorbed by royalty, government, the nobility, and the higher classes. The fact that the common measure of private wealth in England, is a reference to the " rent roll," is sufficient evidence of the relative and comparative im- portance that has ever been attached to it, in that state of society. When it is considered that this principle of rent pervades the entire system of British civil polity, under which the superior classes live on their incomes from land and other properties, while a second and intermediate class, with a capital of their own, super- intend and husband these properties of whatever description, land or other, to make all they can out of them, after paying their rent, or its equivalent under some other name, it may easily be conceived how this superincumbent weight of society, with all the power in its hands, bears down on the substratum of the laboring classes. The first two classes leave nothing for the third, as has been seen, but that which is necessary to support existence, and continue the race of laborers. It is not considered that anything more is suitable — certainly not required. The laboring classes are not only consid- ered as born to that portion, but they consider themselves as born to it. They do not aspire, they have not the moral courage to attempt to burst the chains that bind them. From generation to generation, for centuries, it has been so, and it is — no doubt with a moral certainty — regarded as a reliable element of public econ- omy. Every British Free-Trade economist speaks of it as such, assumes the fact, incorporates it in his system in one uniform shape, and it does not seem to be regarded as susceptible of any essential modification. Not even a contingency is attached to it; but it is put down as a fixed and permanent fact, that the masses are born to serve the few, and to serve them as masters, in whose power they are, and from which they can never escape. It has already been suggested, that this state of things is the re- sult of an original, primary principle — "rent." Modern changes in society have indeed imparted to it some new modifications, as to the mode of its operation, and as to the hands in which the power is vested. In Great Britain especially, what are commonly called " the middle classes," have for a long time been creeping upward by the augmentation of wealth among those engaged in commerce, in the trades, and in manufactures. Wealth gives power and con- sequence ; it becomes possessed of lands and fixed estates ; it as- pires to recognition in the higher circles of society ; ultimately it 164 THE DIFFERENT STATES OF SOCIETY • gains a standing, in the case of men of acknowledged worth and talents ; it steps into the condition of gentlemen, which is a class ; and at last some arrive at the highest honors of the state, and are perhaps installed among the peers of the realm. But as they rise in the world, they imbibe the spirit of every superior station to which they may have attained, and are more jealous of the prerog- atives of class than those who are born to them. The substratum from which they have emerged gains nothing by their ascent, but rather loses. They do not lift others up, but seek to keep them down ; and still the old principles of proprietorship, tenancy, and villanage, prevail. The working classes are doomed. It is quite unnecessary to say, on American soil, and under the shadow of x\merican institutions, that American society is directly opposed to this. With few exceptions, and those very limited in extent, the occupancy and use of the soil of the country are not under the tenure of rent ; and the troubles that have risen in the state of New York, on account of it, are sufficient evidence of the innate opposition that exists to this system in the feelings of the people. And yet, as practised here, in the cases above alluded to, it is a very different thing from the tenure of rent as it is made to operate in Great Britain and in Europe. We are not aware, that the obnoxious principles recognised in Smith's definition of rent, above cited, have been attempted to be put in force, in this coun- try, by landlords. On the contrary, the terms of rent remain the same as originally stipulated ; whereas Adam Smith says, that "the rent of an estate [in Great Britain] commonly amounts to what is supposed to be a third of its gross produce." He, moreover, has occasion to represent very frequently, on this topic, that all the in- creased values of an estate, by time, culture, and any adventitious cause whatever, go to the landlord — are appropriated by him. Neither the tenant, nor the laborer, gets any benefit. In the United States, the people hold land and other property, not of the seignory of a crown, but of themselves, as a voluntary corporation existing in the form of a commonwealth, and the indi- vidual rights of soil generally vest in the proper persons of individ- uals, without any superior. The aim, ambition, pride of the Amer- ican people, tends toward proprietorship, be it of a larger or smaller domain ; be it of a great or little amount of property ; be it of a costly mansion or an humble cabin ; be it a fisherman's boat, or a horse, or a cow, or a dog and rifle. In other words, it is the spirit of independence, which they cherish. This is the genius of the IN EUROPE AND AMERICA. 165 people, of their institutions, of the government ; and from the foun- dation to the top stone of the social edifice, it is a perfect contrast to the state of society in Europe. And Americans can afford it; it is in their power to be independent. Ages, all time may roll away, before it is likely that one American will be able to force an- other into his service, from the necessity of the latter, and dictate his wages. It must be obvious, that such a state of society can not be thrown out of consideration, in the construction of a system of public econ- omy for it, if it is to be adapted to it ; nor can it be said, that these are not elements. They are fundamental elements. All the Brit- ish and other European economists begin with these very things, in forming the foundations of their respective systems ; or rather with the things which occupy these places — different, indeed, from those found in the United States, as can well be imagined. Here, laboring men work for themselves in all cases, and for wages in which they have an equal voice, and can refuse without starving, or being reduced to want ; for there is always some alternative open before them. They can always retire on the unoccupied lands of the West, and be independent. This chance for ever secures their independence. But, for the most part, in the United States, the working men are found cultivating their own lands ; or working in ^1/ their own shops; or husbanding pursuits, in which they are masters and proprietors ; and most of those who work on hire, for wages, do it not only to acquire capital to set up for themselves, and on such terms as will enable them to do it. Whether working on wa- ges, or on their own estates, they are independent. They are lords of their own position and destiny. It is this independent position of the American people which constitutes one of the most important elements of a system of public economy adapted to them, in the same manner as European economists have deemed it pertinent and imperative to go back to the foundation of society, and take things as they find them in their origin and history. It would appear that Adam Smith himself recognised, at least in principle and in some degree, this fundamental difference of soci- ety in Europe and America, when he speaks of " planters in Amer- ica as being generally both farmers and landlords, where rent is consequently confounded with profit." No such state of society as that for which Adam Smith, Ricardo, and Say wrote, is found in the United States, and it would not be tolerated here for a moment. It is, indeed, that very state of thmgs 166 THE DIFFERENT STATES OF SOCIETY that was forsworn in the American revolution, and against which the new government, institutions, and laws, set up at that epoch, and afterward matured and permanently established, were expressly framed to guard, and guard for ever, with jealous care, that they should never obtain footing again on American soil. This new and reformed state of society, commonly and not inaptly called re- publicanism, rejects with indignation and scorn the idea of those relations which constitute the basis of the system of Smith, Ricardo, Say, M'Culloch, and others of that school. It was natural enough, it may be said it was necessary, at least apparently unavoidable, that they should take such premises as they were furnished with, on which to erect their edifice. It is evident what those premises were, because they are distinctly laid down, as observed in the foregoing citations frora them ; and it is also evident that a system built upon such premises, must also correspond with them. But the American system is directly the opposite of this. Tliere is no resemblance in the premises, and none in the structure raised upon them, if it be properly built. Nor does it avail to say, that we make more, in our argument, of the social state, than we are entitled to make, on such a subject as that of public economy, which it will, perhaps, be said, is of a commercial rather than of a social character. For it may be ob- served in reply, that these Free-Trade economists do themselves start on the social relations as a basis, and very properly so, because out of these relations come these commercial results, the causes, combinations, and couree of which, it is the main design of public economy to expound. On this great theme, it is in vain to attempt to separate the moral from the physical, and the social from the commercial. Certainly there is no demand for it, since no party in this debate has ever set the example. It is the original frame, and the subsequent legislation of a comm^onwealth, that make it pros- perous or otherwise ; and prosperity, used in such a connexion, it is not denied, is a commercial term. What we have to say, then, in elucidation of the American sys- tem, as it appertains to this point, and in contradistinction from the system of the economists above cited, is, that the former is opposed to the latter : opposed in the original elements of the social state ; opposed in the organization of those elements ; opposed in the main objects of such organization ; and opposed in its grand results, moral, political, and commercial. As it can not be denied, that the com- mercial results are the ultimate objects which most concern all par- IN EUROPE AND AMERICA. 167 ties, as well as that they are the great aims of public economy, so neither can it be denied, that they are influenced and controlled by social organization ; and it is this controlling power which renders it necessary to erect an American system of public economy on the American basis. After the descent of the barbarians of the north, on the west and south of Europe, the old state of society was broken up, and re- mained in confusion for several centuries ; but finally settled down into the feudal system under the usurpation of chiefs or leaders, as lords of the territory, marked out by consent, or determined by strife. Out of this state of things grew up a more audacious usur- pation, in the shape of the present comprehensive estates of Europe, called monarchies, kingdoms, and empires — most of which, in- deed, existed contemporaneously with feudalism, though not with so absorbing an influence as subsequently. " This original engrossing of uncultivated lands," says Adam Smith, " though a great, might have been a transitory, evil. They might soon have been divided again, and broken into small parcels, either by succession, or by alienation. The law of primogeniture hindered them from being divided by succession ; and the intro- duction of entails prevented their being broken into small parcels by alienation. . . In those disorderly times, every great landlord was a sort of petty prince. His tenants were his subjects. He was their legislator and judge in peace, and their leader in war. . . The right of primogeniture still continues to be respected, and as of all other institutions it is the fittest to support the pride of family distinctions, it is still likely to endure for many centuries. In every other respect, nothing can be more contrary to the real interest of a numerous family, than a right which, in order to enrich one, beg- gars all the rest of the children. Entails are the natural conse- quence of the law of primogeniture. They were altogether unknown to the Romans. . . In the present state of Europe, when small as well as great estates derive their security from the laws of their country, nothing can be more completely absurd. They are founded upon the niost absurd of all suppositions, viz., that every successive generation of men have not an equal right to the earth, and to all that it possesses; but that the property of the present generation should be restrained and regulated according to the fancy of those who died, perhaps, five hundred years ago. * * * " In the ancient state of Europe, the occupiers of the land were all tenants at will. They were all, or nearly all, slaves. They were 168 THE DIFFERENT STATES OF SOCIETY. supposed to belong more directly to the land, than to their master. They could, therefore, be sold with it, but not separately. They could marry, provided it was with the consent of their master. If he maimed or murdered any of them, he was liable to some pen- alty, though generally but to a small one. They were incapable of acquiring property. Whatever they acquired, was acquired to their master, and he could take it from them at pleasure. They could acquire nothing but their daily maintenance. This species of slavery still subsists in Russia, Poland, Hungary, Bohemia, Moravia, and in other parts of Germany." It is easy enough to see, that this kind of slavery, though changed in form, and in many particulars mitigated, still subsists in western, southwestern, and southern Europe, as well as in the parts above mentioned by Adam Smith. The spirit and practical operation of society do not change with the change of forms, till ages, sometimes centuries, have rolled away. It is from such a state of things that European society, as a whole, has come down, and it still exhibits almost everywhere like elements, often the same in substance. How happens it that in Europe, they who have done all the work, have little or no property, external to their own persons, not always that ; and that they who have done little or no work, have nearly all the property — nearly all the wealth of society? The inference is natural, that there is something wrong in this. Pro- prietorship seems to have passed from the natural proprietor to the unnatural one, and the order of nature and of Providence — for how can they disagree? — seems to be reversed. This perversion, this violence that has crept into and incorporated itself with the social fabric of the old world — which has been one of the great perversions of the social state from time immemorial — is being rectified in the constitution and career of American society, and they who work can not only call themselves but all their fair earnings, their own. It is well that this reform should be gradual ; that this renovation of society should be effected by a new con- struction on a more just basis ; that this violence should be removed without violence. Restore to man his rights, and he will make his own way to the rectification of the errors of the species. But how can he have his rights, except under a just and equitable sys- tem of public economy ? EDUCATION IN THE UNITED STATES. 169 CHAPTER XL EDUCATION AS AN ELEMENT OF PUBLIC ECONOMY IN THE UNITED STATES. Edacation a Thing of Commercial Value. — The American People the Original Statesmen of the Country. — The American Republic an Experiment for the World — Difference between the European and American Theory of Society. — Knowledge makes the Dis- tinction between Freemen and Slaves — Character of the First Settler.s of this Country. — They were Men of high Culture. — General Education made the Ba.sis of their New State of Society. — Education the Power that achieved American Independence. — It is the mo.st Important of all the Elements of an American System of Public Economy. — A System of Universal Education may not at first Produce Examples of the highest Culture. — The American System gives Equal Chance.s to All. — System of American Schools and Colleges. — A Protective System of Public Economy indispensable to the American System of Education. — Education and Virtue Concomitants in a Nation. — Comparative Condition of European a^d American Population, Physical and Moral. — Edacation makes the Difference. It has already been shown that the rights of the people fall within the range of public economy, because there is a commercial value in them; that it is on account of this value that they become important and worthy of being asserted and maintained ; that it was commercial value alone that constituted the ground of controversy between the American fathers and the British crown ; and that, but for this species of value, wrested from the colonists and ajipro- priated by the crown, there would never have been any controversy. It has also been shown, that these rights are not sordid or less worthy of respect on that account ; but, on the contrary, that no rights in political society, which are of any consequence, can be shown to have any intrinsic or palpable value which is not of this kind. Even the honorary rights of monarchical and aristocratical forms of society, such as tho.se of Great Britain, lose all their im- portance, and become contemptible, when stripped of the com- mercial values which sustain them in their position, such as the estates of the nobility. It is for the same reason that education becomes one of the most important elements of public economy in the United States — of so great importance as to make it worthy of a separate and special consideration. It is an old and well-recognised maxim, running back to the earliest date of our history, that a republican or democratic state 170 EDUCATION AS AN ELEMENT OF PUBLIC ECONOMY of society — we use these terms as synonymous and interchangeable — must rest on the intelligence and virtue of the people. The reasons are obvious. The peopje being, direcdy or indirecdy, immediately or mediately, the source of power, the originators of the government, and the electors of rulers, legislators, judges, and magistrates — of all branches of the supervising power — must be qualified by their intelligence to discern the fitness of those in whose hands they commit these important trusts, and have need also of a corresponding amount of virtue to discharge these duties with fidelity to that state of society which is, by such means, en- tirely in their hands. In a democratic community, the people are the original and fundamental statesmen. It is impossible that the government should be better, or in any essential degree more in- telligent than they are. The ancient and inspired maxim, " like people, like priest," can not be more true in church than in state. In a republic, the character of the government uniformly exhibits a reflex image of the character of its electors, and vice versa. It is admitted on all hands, and all the world over, that the North American republic is a grand experiment to determine whether a people can have intelligence and virtue enough to govern them- selves, and that the final solution of this problem will decide the fate of the world, for or against a democratic state of society, for centuries to come, if not for ever. It need not be said, that the intelligence and virtue of the people depend upon education. It remains to show, in what respects, and how far, education becomes an element of public economy in the United States. We are not prescribing rules for European or other foreign nations. The withholding or lack of popular educa- tion among them — for it is the education of the people generally of which we speak — may be as necessary to their theory of society, as the enjoyment of it is to ours. It has already and frequently been stated, and should be constantly borne in mind, that Adam Smith and his school have adapted their system of public economy to the state of society with which they were surrounded, and not to that which exists among us. It is impossible, under their system, that general education should prevail — as much so as that it should prevail among slaves. There is no provision for it. It is the bare subsistence only of those who do the labor of society which they have provided for. In the first place, they have not a democratic state of society ; next, they do not propose to have it; thirdly, they make no calculation for it; and lasdy, as the working classes, under IN THE UNITED STATES. 171 their system, have little or nothing to do with government, their education is not deemed important. On the contrary it is system- atically suppressed, because it is reckoned dangerous. It must be seen, therefore, that the condition of society in the United States, in these particulars, is diametrically opposite.* But how is education here an element of public economy? How does it appear, that it has a commercial value in it ? First, because it costs something. Next, because it is really worth some- thing. It is capital, and capital of the most productive^kind. But thirdly, and above all, because, in the United States, the education of the people is the only secure guardian of all their other rights, which, so far as they are worth maintaining, are so only because they have a commercial value in them, as before shown. Knowledge is power. There is little difficulty in holding the ignorant and debased slave fast in his chains. He does not know how to gain his rights — how to devise ways and means ; and being depressed, dejected, demoralized, he has not the courage to assert them. The fact that one master, as is often the case, knows how and is able to hold ten, or twenty, or fifty, or a hundred slaves in subjection, and to keep them in fear of himself, so that they dare not disobey him, is the simplest and most forcible illustration of the power of knowledge, in the application now under consideration. The difference is chiefly in knowledge ; though it is not to be de- nied that some of it is to be ascribed to the moral force of the machinery of society. If every one of these slaves were equal to his master in knowledge, and in the growth and vigor of the social qualities, it is not to be supposed they could long be held in bond- age, without other and foreign forces not required in their present condition. The original setders of this country from Europe — especially those from Great Britain — were men of intellig-ence and strong virtue. Many of them were persons of as high culture, and of as much chivalry of character, as any that were left behind them. It may be said, that they were men of the strongest character of the times that produced them; and those who followed in their train, were men of the same stamp. The motives of emigration then were of a high and social character, and not such as now pour • Notwithstanding the changes which are taking place in Europe, since the French revolution of 1848, with an apparent approximation toward a democratic state of society, our argument with the European economists generally, of the Free-Trade school, in particular, remains in full force. 172 EDUCATION AS AN ELEMENT OF PUBLIC ECONOMY upon this continent the floods of European paupers and culprits. It was mind of the highest order, which could not endure the chains of European despotism, and which came here for freedom. The object of their coming, and the qualifications which fitted them for the enterprise, are directly in point of the argument in which we are now engaged. It was their high culture and eminent virtues which enabled them to lay the foundation of that stupendous sys- tem of political society and of public economy, which has sub- sequently and gradually grown up on their endeavors and their plan. Freedom was their end, and the means which they ordained to secure it, were schools and religion, education and the virtues of Christianity. The history of the colonies, from the earliest settlements, down to the revolution and establishment of American independence, is replete with proof of this assertion. There arose, therefore, from the first, a state of society not before known in Eu- rope or elsewhere — a republican or democratic society in which there were no uneducated classes, and no laboring classes which did not comprehend the whole community. All went to school, and all worked when old enough ; and on no point were the people more thoroughly educated than on the principles of free govern- ment. The oppressions of the old world drove out its own sons from its own bosom, and under its own charters, to set up a school, which must necessarily, in a course of time, subvert its authority, and become independent, because the emigrants brought away all that was good, and left behind all that was bad. The elements of this new state of society were all healthy, and full of infant purity. While the old world, from a vitiated and decrepit constitution, tended to decay, the new, purged of parental diseases, sprang up, with giant strides, to giant vigor. Instead of the old leaven of Eu- ropean economists, that intellectual and moral culture belongs only to the higher classes, and that the working classes require nothing but bare subsistence like cattle, schools were provided for all — all were educated — trained to knowledge and virtue as a preparation for the working time of life. It was a republican or demociatic state of society from the first, and continued to be such, till the struggle arose between the colonies and the mother-country, which resulted in American independence. It is to this point of American history that attention is especially challenged to elucidate our argument. And in answer to the question, what was it that prompted, sustained, and finally achieved American independence? — we say, it was the diffusion of general IN THE UNITED STATES. 173 education among the people, and nothing else. Suppose the people had been as ignorant and debased as the working classes of Europe, what could they have done? Besides the moral impotency of such a condition of society, poverty is an invariable concomitant. The people generally could not have been as ignorant without being as poor ; and along with this poverty of the mass of the people, would have existed rich and dominant masters, allied by interest to the British crown, in the same manner as they are now in Great Britain and other European nations. Nothing could have been hoped for, and nothing achieved, in such a state of things, by declaring independence ; but the result would have been an easy and speedy victory on the part of the crown, and a tighter riveting of the chains of slavery. Such invariably, in all history, has been the end of all such struggles between such parties. But the American people were educated ; they were men of full stature, intellectual and moral ; they were for the most part men of substantial, though of moderate independence ; they had imbibed the principles of freedom, and understood them ; and when the British crown asserted its oppressive, tyrannical claims, and began to put them in force, it was soon found that the colonists were not of that mean and debased class who know not how to assert and maintain their rights. It was their intellectual and moral training — a training of more than a century — which qualified them to rise at once from the condition of dependent colonies, to that of an independent nation, and which enabled them to sustain a contest for seven long years against the most powerful nation of the world, to be acknowledged in the end as an equal and a rival. There is a great principle arising out of this history, which ap- plies to the subject now under consideration. This was not a chance triumph of the American arms — of the weak against the strong; but it was the result of the operation of a potent element inherent in American society, viz., the intellectual and moral culture of the people. The physical odds against them was im- mense ; but having to contend against this moral power, it was shivered and subdued. Nor does it detract at all from the force of this reasoning to say, that the warlike barbarians of the north of Europe once overran and reduced the cultivated and refined nations of the southf for the latter, as admitted by all, were ready to perish through their own debauchery and effeminacy. Besides that general education did not prevail among them, the seeds of decay had been sown for many centuries, and the final dissolution 174 EDUCATION AS AN ELEMENT OF PUBLfC ECONOMY only awaited an adequate shock. The descent of the northern barbarians was one of those retributions of Providence, which sometimes sweep over the earth Hke a tornado, when vice and crime have nearly dissolved the long standing fabrics of the social state. But the contest of the American colonies with the British crown, was as the strife of young and vigorous manhood against decrepit age, prompted and sustained rather by the morale of youthfulness, than by the skill and preparations of experience ; but the efficacy of that morale consisted in the great elements of which we are now speaking. Slaves rarely rise against their masters with success ; and success may prove their greatest misfortune. The toiling millions of Europe may toil on for ages and for centuries, as they have done, to minister to the power of European govern- ments, to the splendor of its nobiUty, and to the luxury of its superior classes, without the slightest hope of emancipation from their debased condition, till the blessings of education are diffused among them.* It was intellectual and moral culture alone that reared this republican empire, and gave it a permanent rank among the nations of the earth. These views eventually lead us to the consideration of that state of public or national economy, in that particular which is ne- cessary to secure and sustain in perpetuity a sufficient amount of intellectual and moral culture among the people, to warrant the continuance of a free government, and of free institutions. How- ever important the numerous ramifications of public economy which are discussed in this work, may seem t© be, all of them to- gether are less important, dwindle into insignificance compared with this. This, indeed, lies at the foundation, constitutes the platform of the whole system. Without education, without morals, without reli"-ion — and education is the instrument of morals and reli"-ion — what is civilization? Or, rather, without these, how can there be civilization ? These and their appurtenances consti- tute civilization, and in proportion as they are advanced, civiliza- tion advances. It is not denied that there may be high and even superlative degrees of intellectual and moral culture, specimens of the purest morals, and examples of religion worthy of imitation and of all * We should be extremely £;lad, if the success of the present endeavors, 1848, to establish republican institutions in Europe, should prove that we have made too strong a statement here; but even that would not detract from the principle of our argument. IN THE UNITED STATES. 17-5 respect, around the thrones and under the shades of the most absolute despotisms. It may even be true, that these examples of the highest culture, owe their excellence to the patronage of princes, and to the influence of a.concentrated power, the means of which were wrung by the few from the hard and servile toil of the mil- lions. It may also be true, that the refinements of civilization, in such circumstances, and under these concentrated influences, shall be in excess of what they would otherwise have been, in a given time, if education had been more general and comprehensive, and if the chances of high culture had been open to all. Great bodies can not move with so much rapidity in a given direction, as small ones, when the same amount of force is applied to each. But it need not be said that this is not the intended economy, the plan of American society. It was not devised for the kw, but for the many ; not for a select and privileged corps, but for the millions. General, popular education, is the great scheme laid out for this republican empire. If there be any feature more distinct, more prominent, and more observable, in the social structure of this great commonwealth, than any oiher, it is that of equal chances in life to all ; that a child shall not be born to ignorance, for want of opportunities to acquire knowledge ; that he shall not be doomed to a low condition because such was the lot of his parents ; and that there shall be no insuperable impediments of a social and moral nature to his advancement in the social state, to any eleva- tion, not excepting the highest within the scope of a just and laud- able ambition. The system of common schools, early set up in this country, coeval indeed with American civilization, handed down from gen- eration to generation, provided for as the first care of the state, watched over with paternal solicitude, nurtured, endowed, edified, and never suffered to decline, but always put forward with vigor and efiiciency, is the cradle of those chances of which we speak. On this broad foundation, common to all, has been erected a sys- tem of select and higher schools, up to the college and university, which are also within the reach of all, by reason of a system of public economy, which it is our special purpose in this chapter to notice ; not, indeed, so much whhin the reach of all, as the com- mon schools, but yet not excluding any, nor presenting insuperable obstacles to any. The poorest and meanest born of the land, prompted by innate ambition, and developing hopeful talent, can, and do often, pass through all the stages of education, from the 176 EDUCATION AS AN ELEMENT OF PUBLIC ECONOMY common school till they have graduated with honor at the highest seminaries, and entered upon the graver responsibilities of life, to contend, in open and fair field, with the best born, for the highest prizes of the social state, whether of wealth or of influence. And it is an attribute of American society and institutiotiS, to favor and help forward merit that emerges from obscurity and strives to rise. The common school is the basis of all ; the genius of the gov- ernment is the parent of all ; and the joint operation of the two crowns all. We come, then, to the main point which now claims to be con- sidered, viz., that a protective system, as expounded and illustrated in other parts of this work, in its indissoluble connexion with the ability of the people, imparting and securing that ability, to avail themselves of all these advantages, is the only means by which this great end of American society can be realized. It has been seen, that, as a general truth, the American people WORK for their living; that they depend on labor, in one form or another ; and that their fortune is vested in the rewards of their own personal exertions. The difference between the condition of American and that of European labor, the former as an indejmid- ent agent, and the latter as an agent of jiower, is elsewhere pointed out. It will be seen, that the only provision made for labor by European society, and by the Adam Smith school of economists, is that of a mere physical existence, as in the case of a slave, which dooms the laborers, as a class, to live and die, like slaves, in the condition in which they are born, or in which they begin to work. Without education themselves, they are unable to educate their children, except for their tasks. Whereas the condition of American labor is that of independence. If American free laborers are uneducated, it is not because they have had no opportunity to improve themselves ; and if they do not educate their children, it is not because they are unable. Indeed, in the common school, which most of the states provide, especially in New England, it costs them nothing, except their rate of assessment as to property, which throws the burden on the rich, and exempts the poor ; or if the schools are endowed, as well as free, as in some places they are, they are a tax to nobody ; or partly endowed, as in Connecti- cut, Massachusetts, New York, and we believe some other states, the tax is so much lighter to those who have to pay. But the sys- tem is designed to provide education for all, the poorest as well IN THE UNITED STATES. 177 as those who are better off in life. It is a part of the economy of American society. The proposition, therefore, which we here assert and propose to maintain, is, that a protective system is the great power that sus- tains, and the only cause that can secure, general and popular education in the United States; and consequently, that it is the only power that is capable of preserving the liberties of the coun- try. The second part of this proposition has been before consid- ered, under its commercial aspects. Its moral features also claim attention, although both views of the subject are so intimately blended, that it is not easy to separate them even in discussion ; much less in their practical operation. A cursory glance at the physical, moral, and social condition of the laboring classes of Europe, will cast the light of a strong con- trast on the condition of American free laborers, in the same as- pects ; and it need not be said, that these classes here, include nearly all — are the people. First, the laboring classes of Europe are abject in their social position. Few of them have any political rights, even nominal ; none, to speak of, more than this, which is of no account in its beneficial results to themselves. And they feel their abject condition ; and along with this feeling, as a fruit, comes an abject, hopeless state of their minds. This oppressive sense of social degradation, is that which unmans man — divests him of pride, of ambition, of aspiring views, of self-respect, of all great and noble purposes, and makes him a slave — a mere tool of those for whom he lives and toils. Along with this social degradation, comes moral debasement — abandonment to vice and crime. Where there is no reward of virtue, man will not be virtuous ; and with the blight of his prospects, his passions are corrupted. Hence the low tone of moral feeling, and the increase of crime, among the degraded classes of Europe. Uninstructed, and unambitious of moral and social elevation, man is as much more brutal than the brutes, as his faculties are more inventive ; and out of his prolific nature, thus perverted and abused, grow savage propensities, and diabolical deeds. The apology for forcing and keeping him down, springs from the wrong of having deprived him of the means of education, and of incentives to better conduct. How could he do better, in the physical condition of a slave, and forced, for want of time and means of improvement, to grow up and live in ignorance? Two thirds of the fair reward of his labor, being that which was 12 178 EDUCATION AS AN ELEMENT OF PUBLIC ECONOMY necessary to make a man of him, to raise and put him forward in moral and social existence, has been, as shown in this work, usurped and absorbed by his oppressors, to create that great chasm, that impassable gulf, that lies between him and them. Turn now to the condition of the American people, who, as the people, are also the laborers of the country. In the first place, their physical condition is one of comfort, of independence, and of thrift, because they work for themselves, and have the reward of their own labor. In the nex,t place, being in such a condition, they have time to think ; and their fathers having been in a like condi- tion, they were sent to school, and qualified to think. Seeing the worth of knowledge, and enjoying its satisfactions, they, in turn, send their children to school, because they love them. All — one generation after another — are educated. They are brought up in comfort, taste and realize the blessings of intellectual and moral culture which they have enjoyed, and are not only constantly im- proving in knowledge by books, that captivating employment of leisure and independence, and by the periodical emanations of the press, but they are able to educate and prepare their children for any position in life which they choose to assign to them, as none are barred to any class. By industry and economy, they can not only live in this way, and in this way bring up their families, but they can acquire wealth, enlarge their estates, and extend their in- fluence by a career of exemplary morals and conduct. Every stage of life is one of increasing interest to them, presenting more powerful incentives to virtue, to moral and social eminence, and to leave behind them an independence for their children, and a good name for themselves. All along, in the progress of their lives, they find themselves free and independent members of a political com- monwealth, in the government of which they share, and which se- cures to them all these blessings. Withal — not the least, but the greatest — they are not only educated for time, but for eternity. What is it, that has given to the American people a position, and secured to them a condition and destiny, so widely different from the same things with the toiling millions of the European world? The answer to this great question, is simply this : The former en- joy the reward of their labor, while the latter are robbed of it. The whole truth of this subject is embraced in this single and brief sen- tence. It is impossible to find anything appertaining to the ques- tion, which is not comprehended in this answer. It is seen, and abundantly proved, in the progress of this work, IN THE UNITED STATES. 179 that a protective system is the only shield of this position and con- dition of the American people ; and that the direct and inevitable tendency of Free Trade, is to put American and European labor to work on the same platform, in the same field, for the same mar- ket, on the same terms, with a like result in the physical, intel- lectual, moral, and social condition of both. This result is inev- itable, because it comes from the operation of a great commercial principle, which governs the whole commercial world ; and about which there can be no uncertainly, beaause it is a result told by figures, in connexion with the moral certainty, that buyers will al- ways trade as cheap as they can, and sellers as dear as they can. Universal Free Trade makes one market of the wide world, and no laborers for that market can have better chances than others ; but all will be on the same level. But it would be impossible, by such a concession, to elevate the condition of the laboring classes of Europe. Their oppressors would still have the same hold upon thera ; and with that grasp, on a basis of Free Trade, they would draw into their power, and un- der their hand, the whole American people, to the loss of all the treasure, agony, and blood, that have been spent for a rescue. 180 PROTECTlOjr NOT RESTRICTION, BUT EMANCIPATION. CHAPTER XII. PROTECTION NOT RESTRICTION, BUT EMANCIPATION. What is meant by a Restrictive System? — It is a Misnomer as applied to Protection. — Free Traders and Protectionists in tlie United States are both after the same thing. — The true Relation between Capital and Labor. — The most perfect State of Society — Capital is Labor in Repose. — Protection of Capital is the Protection of Labor. — An American Protective System a Rescue from a Foreign Restrictive System. — American Labor can not be free, without Piotection. — The Protection of one American Interest can never injure another American Interest, but benefits all. — Examples and Pi oofs. — The Piisitioii of American Capital and Labor in Rela ion to Foreign Capital and Labor. Consideration of the Maxim that a Nation must buy in Order to sell. — The Prosperous and Rich buy and trade mo.*t — Protection makes us rich ; the want of it makes us poor. A Rule for one Nation may be bad for another — Why does Great Britain preach Free Trade ? — Adam Smith began right, and ended wrong, — He leaped to his Conclu- sion from False Premides. Much of the force of the argument of Free-Trade economists, rests on the assumption of what they call a restrictive system, to which they are opposed. Now, if we are able to show that an American protective system, so far from being restrictive on American industry, American labor, and American interests, oper- ates, on the contrary, to set them free ; to leave them untram- melled ; to give them full scope for action and profit ; to rescue them from disadvantages and hinderances placed in the way of their objects ; to secure their natural, social, and political rights ; to exemj)t them from restriction, the very thing complained of as the effect of a protective system — in other words, to accomplish the very end of Free Trade, as averred by its advocates, and as un- derstood by nearly or quite all those Americans who are in favor of it ; then, clearly, it will result, that Protectionists and Free- Traders in the United States, are both after the same thing, and differ only in the way of obtaining it. It is the object of this chap- ter to show that such is really the fact. We have proved abundantly, in other parts of this work, that the chief disadvantage under which American industrial efforts labor, is the greater cost of money and labor, in other words of labor itself, in this quarter, as compared with its price in foreign parts. It is the difference between the freedom and the bondage price of labor. This difference affects capital as well as labor, in the same manner and degree ; for we have elsewhere shown that all capital is the product of labor, the cost of which must necessarily PROTECTION NOT RESTRICTION, BUT EMANCIPATION. 181 be graduated by the price of labor. By the rights or institution of property, as secured by every civilized society, capital or prop- erty when acquired by industry and prudence, comes to occupy the position of the employer of labor, in order that labor, in its turn, enjoying a freedom price under adequate protection, may rise to the same condition, by the same means. This is the American wheel of fortune, where the rights of primogeniture and of entail have been abolished by fundamental law. Human sagacity, after having removed all exclusive prerogatives of birih, and all rifht in the owners of properly to entail its descent, has not been able to invent a better or more equal state of society than for men on such a basis, to rise in the world by their own industry and econ- omy. In this way, labor capital, which is the parent of all other capital, holds its chances in reversion, to become the possessor and controller of other capital, and itself, in turn, the employer of labor. These are the rights of labor. It would be hard, indeed, that the power to labor, which, when applied, is the producer of all the means of enjoyment in civilized society, should never itself be able to come to such enjoyment. The very design of American society, is to keep open these chances, which European society for ever bars, as a general rule. Exceptions to a rule only demonstrate its existence and sway. Now it is evident, since capital, the product of labor, when acquired as above described, in any considerable amount, occupies the position of the employer of labor ; and since capital, so acquired, is nothing more or less than labor in another form or state, that is, in a condition of productive repose ; and since this capital must have cost in proportion to the price of the labor that produced it; — it is evident, we say, first, that this capital can not be employed in the same ways with foreign capital, which has costs only half as much, without protection ; and, secondly, it is evident that the pro- tection of this capital is the protection of labor itself, not only be- cause it is labor in another form, as being its product, but because it can not employ labor, in these ways, without protection. When- •ever, therefore, American capital asks for protection, in this, that, or the other pursuit, no matter what, it is labor, and nothing else, that asks for it. And what for? To rescue it from the restriction, or the restrictive system, under which it lies and labors, by the ex- istence and operation of cheap foreign capital and cheap foreign labor ; in other words, to give and secure freedom to American labor. It can not be free unless it is protected ; but the tendency 162 PROTECTION NOT RESTRICTION, BUT EMANCIPATION. and effect of this foreign system, operating on American labor restrict'tvely, is to keep it under and keep it down. It can not rise, it can not enjoy its rights, because it is under the operation of a foreign restrictive system ; that is, restrictive relative to itself. It will be seen, therefore, that the professed objects of the advo- cates of Free Trade and of Protection, in the United States, are identical. Both aim at a rescue from a restrictive system. It must also be seen that Protection is the only way to gain that end. But it is said that a protection of one or more interests, is a re- striction on, and a disadvantage to, one or more other interests. We have proved, in other chapters, that an American protective system can not injure, but must necessarily benefit, all interests of 4ie country ; that protective duties are not taxes (which is the only cbjection that ever was or can be made against them) ; and that they are a rescue from an enormous system of foreign taxation. We need not, therefore, undertake to prove here what is proved elsewhere ; but we are entitled to assume it, so far as the present argument may require. We grant there may be inequalities in a protective S} stem, so far as that one interest may have a better protection than another. This may be owing, either to the fault of those who suffer this inequality, or to that of the legislators in not properly adjusting the system. But, though this may be a just ground of complaint as a partiality, it is not a positive injustice. The principle on which a protective system is required in the United States is such, that it can not but be beneficial to all, though it be partial in its application. Though it begin with a single in- terest, and afford protection to no other, all that that interest gains by it, is so much gain to the country, and an injury to no party, even though the protective duties be prohibitory. We have else- where cited the highest Free-Trade authorities to establish this point, though it were superfluous. But when Ricardo and Say admit that prohibitory duties can not in the end raise prices, as domestic competition will soon bring them to their natural level. Free Trade answers itself But we have shown that Protection not only does not raise prices of manufactured articles, but that it actually reduces them, as a general rule, very essentially. It mat- ters not, therefore, so far as the interest of the country, or of any parties in it, is concerned, whether Protection be partial or general. All are benefited, and none are positively injured. Suppose, then, that some one interest, such as the fabrication of cotton goods, in their various forms, has received such an PROTECTION NOT RESTRICTION, BUT EMANCIPATION. 183 amount of protection from the government of the United States, that they could be manufactured in this country, against the supe- • rior skill and cheaper labor- of Great Britain. Time was, when such protection was absolutely necessary to begin. Behold the result. American capital, itself the product of American labor, has, to a vast amount, been invested in cotton manufactures, under a system of Protection, to employ a vast amount of American labor, and to consume a vast amount of American agricultural and other products. And consider, that this could never have been done, without protection, which is undoubtedly true. But for this protection, all this American capital and labor would have been shut up under a foreign restrictive system; and it was only by such protection, that they have been emancipated from these re- strictions, and been productive of such immense saving, and such immense wealth to the country, and of such great benefit to all the parties concerned. We have shown elsewhere, how greatly cotton goods of every description have been cheapened by this system. Protection, therefore, so far as this great interest is concerned, and so far as all other interests of the country with which it is connected, and to which its success and prosperity have brought like results, are concerned, has been the means of emancipation to both it and them, on an immense scale. Emancipation from what? From a foreign restrictive system ; from that system of foreign society, and of the bondage of foreign labor, against which it would have been impossible to contend, without Protection. We see, therefore, that such is the position of American capital and American labor, in these particulars, in relation to foreign capital and labor, that they could not be free without Protection. That this protective system has operated as a restriction on foreign injustice, which before held American capital and labor in bondage, is not denied. So far an American protective system is restrictive ; and so far as this is what the Free-Trade economists complain of, their complaint is well founded. But to say, that an American protective system is restrictive upon and in relation to American interests, when the very design, and not less, as above seen, the operation, of that system, is to set American interests free, and give them a chance to live and prosper, against the oppressive power of foreign interests, is absurd. Thus an emancipafmg, is, by a misnomer, called a restrictive system; and this is one of the great objections alleged against it. What we have said above of the cotton manufacturing interest, 184 PROTECTION NOT RESTRICTION, BUT EMANCIPATION. is equally applicable to every other American interest, no matter what, so far as Protection has been, or may yet be, necessary, to give it a start, and to sustain it, against the rival and oppressing power of foreign capital and labor, engaged in the same pursuits. Protection, in such cases, does not operate as a restriction on home interests, nor as a disadvantage to any ; but it is a benefit to all ; it encourages all ; draws thetn out, and gives them a wider and more comprehensive scope of operation and of profit. Not a single new American interest can be set up by Protection, that is not beneficial to some, often to many other interests ; and not one that is injurious to any other. The amount of emancipation of capital and labor, bears more directly on the interest protected ; but it is not confined to that. In helping that, it helps others ; and the entire effect, in all its scope, instead of being restrictive, is liberative, in relation to home interests, and especially to the capital and labor which are vested in them. Such is the position of American capital and labor, in relation to forei'i-n capital and labor, that it is impossible to protect the former, in any particular, or for any object, or in any degree, short of positive bounty, so as to be injurious to any other branches of the same, or so as not to be in some degree beneficial to all, directly or indirectly, by proximate or by remote influences. There is no fear, therefore, of extending Protection to too many objects. As to the amount, in any given case, and in every case, as it may happen to require it, a regard may safely be had to the objects of revenue, as well as to those of Protection, so long as it is thought best to depend on this mode of raising revenue. The rule of graduating Protection is considered in a subsequent chapter. So that it BE Protection, it is enough. It is said, that a nation must buy, in order to sell, and that this multiplication of home interests by Protection, will restrict and diminish foreign commerce ; which seems plausible at first sight, in the same manner as it is commonly or extensively thought, that the protection of one or more of the domestic interests of the country, will operate as a restriction on others. But we have proved, in another chapter, by a statistical array of well authen- ticated facts and tables, running back through our commercial history, that, whenever and in proportion as our public policy has approximated toward Free Trade, our carrying trade and foreign commerce have declined ; and that, whenever and in proportion as we have gone back to a protective system, our carrying trade PROTECTION NOT RESTRICTION, BUT EMANCIPATION. 185 ioid foreign commerce have been augmented. And these different retuhs are clearly proved to have been the legitimate effects of these different measures. The answer, therefore, is complete, not only as regards domestic interests, which seem more especially to occupy a domestic position ; but also as regards the interests of foreign commerce. While considering this last point, in its place, we have found, that, as a private individual, who, by his industry and frugality prospers and grows rich, usually trades more, and buys more, so a nation, by like habits, and in a like career, trades more and buys more, because it has the means, and can afford it. Wants always multiply with growing wealth ; and those wants must be satisfied. We have elsewhere shown, that the United States uniformly grow rich under a protective system, and poor for the want of it ; and this, on the principle above recognised, accounts for our having a greater amount of foreign commerce under the former, than under the latter system of public policy. In no sense whatever, therefore, and in regard to no interests whatever, does a protective operate as a restrictive system, in the United States; but, on the contrary, it contributes effectively, and on an immense scale, to the emancipation of American capital and labor from a foreign restrictive system, which has so long held, and which will for ever hold, them in bondage, without Protection. It neither binds, nor restricts, nor injures any domestic interests; but is a help to all. It is entirely a misnomer, a perversion of terms, to call it a restrictive system, as applied to the United States. We do not pretend to give law to other nations, nor to say, that it does not operate so in other quarters ; nor can we consent that foreign economists, British or others, should give laws to us, in this particular. We have set out, in this work, on the fundamental principle, that a system of public economy can not be found, equally applicable, even to any two nations ; much less to all; and that it is not a science, composed of the same propositions, every- where and in all time, as the Free-Trade economists claim for it. We find American capital and labor occupying a very different position from that of the same things in Europe, and that the same treatment applied to both, would not be beneficial to both. A system which is good for Great Britain, may be ruinous to the United States. We have endeavored to show, in another chapter, that Great Britain is the only nation, that is prepared for Free Trade, and the United States the last that can afford it ; and the reason why we can not afford it, is because of the high price of 186 PROTKCTION NOT RESTRICTIOX, BUT EMANCIPATION. our labor. On a platform of universal Free Trade, the advanced position of Great Britain — far advanced of all other nations — in her skill, machinery, capital, and means of commerce, would make all the world tributary to her ; and on the same platform, this dis- tance between her and other nations, in these particulars, instead of diminishing, would be for ever increasing, till, as she is now the o-reat centre of civilization, she would become the focus of the wealth, grandeur, and power of the world. Such a result would be inevitable, on these conditions, from the comparative strength of her position in these particulars. Nothing but a system of Pro- tection can defend us, or any other nation, from her grasping am- bition and power. Well may she plead the cause of Free Trade. Foreseeing this state of things, she has endowed her writers, and instructed the professors of her universities, for a century past, as shown in another chapter, to preach Free Trade to the world, that she might reap the benefit. It will be found, on an examination of Adam Smith's reasoning on "freedom of commerce," or Free Trade, that the premises on which he started in this argument, and which prompted it, were entirely of a different class from those on which the theory of Free Trade now usually rests, and on which has finally been erected the system which is now adopted by those of his school. Adam Smith was right in the ground be originally took ; but, like all bold theo- rists, he jumped to general conclusions from isolated facts. Hav- in"- first begun to sail his bark in a mill-pond, England, he leaped the dam, followed the stream to the ocean, and was soon lost in the wide sea. It was against the unjust monopolies of certain mu- nicipal corporations, known as " the trades" in English law, but entirely unknown in the United States, that Adam Smith began to plead for Free Trade. These corporations were almost without number in Great Britain, counting at one time more than a hundred in the city of London, such as the company of goldsmiths, saddlers, fishmono-ers, &c., &c., comprehending all the principal trades, in town and country. None could engage in these pursuits, who were not members of the companies ; and each of these corporations took care not to fill the trade, so that the market should be beyond their control. The community were forced to buy of them, at their own price. Hence the grievance of these monopolies, and the crusade of Adam Smith against them. He also extended his ar- gument against the monopolies of foreign commerce, in the hands of companies, such as the East India company, the Hudson Bay PKOTECTION NOT RESTRICTION, BUT EMANCIPATION. 187 company, the African conipany, &c. In both these lines of argu- ment, his premises justified his conclusion, and he was right. But neither he, apparently, nor any of his school, have allowed themselves to see the difference between these cases and those made by a general protective system of one nation against others, in the latter of which there is no monopoly of one citizen or sub- ject against others, but where all are permitted, under a common law made for all, to engage In what trade or business they please, and where competition can enter without limits. To say, that Pro- tection Is sometimes prohibitory of foreign products, does not make out the case of a monopoly, except such, the undoubted right of which all nations claim, and are constantly In the habit of exer- cising ; and then the monopoly is national, not private. This was not the ground of objection with Adam Smith. He never once made it, nor will it be made by any advocate of Free Trade, un- derstandingly. But the objection was and Is, that protection of domestic industry, arts, and labor, against foreign arts and labor, imposed and imposes restrictions on fellow-subjects and fellow-citi- zens, when in fact, as every one must see, there was and is no such thing, and can not be, so long as there are no corporate privileges to exclude others from engaging In the same pursuits at pleasure. There can not be a monopoly, where the trade, or pursuit. Is equally open to all. If a man is excluded for want of capital or skill, or for want of both, this may occur under any system, and is the very reason why one nation may require protection against another of more abundant capital and of superior skill, and why it can not engage In certain pursuits, essential to Its welfare, without protec- tion. But both Ricardo and Say have admitted and maintained, that even prohibitory duties can not raise prices, because, where there is no domestic monopoly, domestic competition will reduce prices to their natural level. We say, therefore, that Adam Smith, beginning right, ended wrong, by leaping to conclusions, which his premises would not justify ; and that all his followers have plunged into the same mis- take. They have assumed monopoly, where there is none; and restriction where there Is none, except as the undoubted right of one nation against another. But they assert a domestic restriction, which can not be found, and a hardship in the raising of prices to consumers, when. In the case of the United States, as we have proved elsewhere, the prices are reduced. It does not belong to 188 PROTECTION NOT RESTRICTION, BUT EMANCIPATION. US to prove, that this is the fact in other quarters ; though we think, as a general rule, it may be. It must be evident to those who are competent to consider the case, that restrictions in international commerce, do not of course create restrictions in domestic trade. On the contrary, as shown above, in the case of the United States, the former are absolutely necessary to rescue domestic trade, that is, capital and labor, in all their functions, from foreign restrictions of a very grave and serious character. What, then, do the advocates of Free Trade, in the United States, ask for ? Precisely the same thing which Protectionists demand, to wit, the free and unrestrained use of American capital and labor. The only difference is about the mode of attaining to that end. We have shown here, and in other parts of this work, that the only way is by a protective system. It is a misnomer, therefore, to call it a restrictive system, when there is no such thing in it. The design and tendency of an American protective system, is not to embarrass, but to disembarrass, American capital and la- bor; to rescue and shield them from foreign oppression ; to encour- age them ; to bring them out ; to open the way for their most profit- able employment ; and to make them entirely free. MONEY. 189 CHAPTER XIII. MONEY. Barter, its Nature — Origin of the Phrase, '■ Precious Metals." — How Gold and Silver eame to be used hs Money. — Gold not u.^ed as Money in all Paris of the World. — Reljitive Proportions of the Precious Metals employed as Money and for other Piirpo.«es. — Foun- dation of the Value of Gold and Silver, when used as Money. — Turgot, Say. MCulIoch, and others, on this Point — The Foundation of the Value of Money lies in the Demand of the Precious Metals for other Uses. — It is a Foundation in Nature, not tlie Result of Convention. — Defiuition and Functions of Money. Barter, or the exchange of one commodity, unrepresented, for ^--^-^J^ another, is the natural, and was the original mode of trade. That •. ..^^ is, one man, being in possession of a thing, no matter what, which another wants more than he does ; and the other being in posses- sion of a thing, no matter what, which the first wants more than the -^ second does ; they agree to exchange, and do exchange, on such terms as may be arranged between them. This is barter. It is true, that this definition includes money, or its material, as a com- modity. It is impossible to give a definition of barter, without a comprehension of this, as a possible result. But money, with its present attributes and functions, was not originally in use, and is the result of social improvement, or of the convenience and neces- sities of society. In process of time, of which the memory of man and history give no advice, certain metals, commonly called gold and silver, having been discovered, and found to possess excellent and unrivalled qualities for certain uses, and for ornament, became "precious." This may be supposed to be the origin of the name, ^^prrcious metals." For certain purposes of use and ornament, other things have been held much more valuable even than gold and silver, and for which ten, twenty, a hundred, and even a thousand to one, in weight, of the " precious metals" have been and are given, as an equivalent. Nevertheless, partly on account of their scarcity, and especially on account of their adaptation to so many useful and or- namental purposes, no other substances, original, or however formed, have ever acquired the position of being held so universally "pre- cious," as gold and silver. And it is to be observed, that this view does not bring us to their 190 MONEY. position and use as money. Gold and silver are not valuable, sim- ply because they are money. This was not the original ground of their being held in such high esteem ; but they have been adopted, and have obtained universal consent, to be used as money, or a common medium of exchange, because of their value for other uses, and because they are always in demand for such a vast vari- ety of appropriations, other than money. Money is but one of their uses, later in the order of things ; and it is only a fraction of their value that is created by their use as money, in the same manner as anything else is increased in value, in proportion as its uses are multiplied. The real foundation of the value of gold and silver, may be said to be, was in fact, prior to their having been viewed in tlie light of money, and appropriated to that use ; and the cause of their being thus appropriated, was doubtless the discovery, by experience and observation, of their unrivalled qualities for other uses and in other applications. Time and immemorial usage, there- fore, have assigned to them the functions of money, apparently for ever, without the remotest probability of change. Nevertheless, this was not an accident, was not arbitrary ; but there were sub- stantial, fundamental reasons, of the nature of value, lying some- where back, beyond. Gold and silver could not even now retain their value as money, but for the foundation on which they fall back and rest, as being greatly valuable for an almost infinite variety of other purposes, which are always ready to take up and absorb them, whenever they can be spared from trade, and which, as a part of trade, is constantly being done ; and as a part of trade also, they are as constantly going back into the forms or into the uses of money, though not in so great amount. The natural current from the bowels of the earth, is to the other uses of gold and sil- ver ; and only so much of them is arrested, on the passage, for money, as the necessities of trade require. It is only in distress, that people will surrender their plate, trinkets, or any other " pre- cious" things, composed of gold or silver, for money. Although the high value of gold and silver appears to have been appreciated, in the earliest stages of society of which we have any account, the world was slow in adopting them to discharge the functions of money, or of a common currency, as they now do, throughout the civilized world ; and even down to this day, Jacobs* says: "Gold has been rarely used in Asia, as money, either • William Jacobs, Esq., F.R.S., " An Inquiry into the Production and Con- sumption of the Precious Metals," 2 vols., London, 1831. MONEY. 191 coined or uncoined." He also says : " Silver is said to have been first coined in Rome, in the year of its building 485, or 2GG years before our era [Christian"]. The first gold coin of Rome followed that of silver, after an interval of 62 years." When the Hebrew nation became rich, they displayed, under Solomon, great accumulations of gold and silver. But silver only was used in commercial exchanges ; gold for ornamental purposes, as also silver. Solomon used gold profusely in decorating the royal residence, and the temple. In the empire of Japan, to this day, gold is apparently used as plentifully as in the days of Solomon, according to Jacobs, for the decoration of public and other buildings, and is prodigally laid on their furniture; but it is not used as money, either there, or in China, comprehending, in this particular, other parts of the East. All parts of the world have produced the precious metals, more or less ; and when the richest sources have been discovered, they seem always to have been worked, till so much exhausted as not to pay cost. They once abounded in different parts of the Roman empire. All know somewhat of the mines of Mexico and South America. At the present time, Russia is producing gold in con- siderable abundance, reported at an average of $12,000,000 an- nually for six years previous to 1846, and $17,000,000 for that year. It would be impossible even to conjecture, with any tolerable reliance, the number of uses to which gold and silver are applied, other than of money. Jacobs says: "One of the greatest causes of the consumption of gold, is the use of it in smaller personal ornaments, and in the variety of trinkets, whose basis is gold. It is supposed that, in both England and France, the quantity of the precious metals applied to these minor purposes, by far exceed that which is converted into larger objects. Silver teaspoons in England, may be counted by millions, perhaps by hundreds of millions." Jacobs estimates that fths of the silver, brought to Europe from 1700 to 1810, was manufactured in similar articles of household furniture. Who can count the gold in watches, finffer-rinss, bracelets, and other ornaments of the head, neck, bosom, and person. In the courts of Europe, some men might be said to be encumbered whh the mere weight of gold displayed on their persons. The gold and silver absorbed by churches, found upon and around the altars, have not been small in amount, and are always deemed the richest prey of spoilers. 192 MOxNEY. Adam Smith seems to have thought, that the gold and silver, used up by manufacturers, in his time, were equal to the whole annual product. He rates the gold and silver plating and gilding at Birmingham, in that time, at <£50,()00 a year. Jacobs says: *' A degree of destruction of gold and silver, which was scarcely felt in the ancient world, has, in modern times, been steadily and rapidly advancing, and must at length produce a sensible effect on the value of all commodities." He also says, that, when America was discovered, Europe produced the precious metals as fast as it consumed them; that, in 63 years after that event, 50 per cent, was added to the general stock ; and 150 per cent, from 1599 to 1699. The amount he allows for Europe, at the discovery of America, is ^35,000,000; and in 1599, ^155,000,000. One hundred and fifty per cent, on this, for the next hundred years, would raise the stock in Europe, for 1699, to .£487,500,000, which has been increasing ever since, though not very sensibly for the last half century, till the gold of Russia seems to have revived the impetus. The highest amount of gold and silver coin which Jacobs allows for Europe and America, is =£380,000,000, for 1809, since which it has declined, at the rate of £40,000,000 in twenty years, which is doubtless owing, partly to the decreased product of the mines, partly to the use of paper-money, and partly to the great demand for these metals in other applications, and to the multiplication of those uses. The increasing product of the Russian gold may be regarded as opportune for the commercial world, to sustain the body of the currency in that material, which is most convenient of the two. Some economists pretend, that the amount of currency is not of material importance, as the prices of commodities are regulated accordingly. It is at least desirable that there should not be sudden and great fluctuations in this amount, as such changes affect the value of the income of different classes of society very unequally. For example, when the great abundance of the pre- cious metals derived from the American mines had raised the general price of the necessaries and comforts of life as 4 to 1 of what they were before, it was a hard case for nonproducers of such commodities, whose position, though occupied in other industrial and useful pursuits, obliged them to live on the same amount of money as before. The relative proportion of the precious metals converted into money, as compared with that absorbed by all other uses, seems to THE FOUNDATION OF THE VALUE OF MONEY. 193 have increased, from the early ages, with the growing demands of commerce. Jacobs says: " Taking the amount of coined money at thirty millions [sterling], we should calculate the remainder of the two metals [in England] at sixty millions," or two of llie latter to one of the former. He also applies this rule to France. M'Cul- loch, in an article in Brande's Dictionary, says the coin of Great Britain "is at least sixty millions." But for Europe and America together, Jacobs makes the proportion three for money to four for other uses. In another place, however, he allows that the value of "three or four" is found in England, in other forms, to one of money ; and that, from 1810 to 1830, the other uses, throughout the world, absorbed more than what came from the mines. He also says: "Current coin in Europe and America diminished, be- tween 1S09 and 1829, from ^-380,000,000 to ^320,000,000." It may, perhaps, be concluded, that the proportion now existing in other forms, in Europe and America, is as three to one of money. But the comparative amount of the precious metals employed in the world as money, is an accident of history, arising from the ex- tent and demands of commerce, since they have been so appropri- ated ; and does not at all affect the question of the foundation of their value in the form of money. Assuming that nothing is money but gold and silver, or that which will command them at the will of the holder, it may be re- marked, that the universal credit of these substances, when used as money, must have a foundation. That foundation is usually called intrinsic value. But a little reflection will show that the value, thus asserted, lies farther back than the use of these metals as money, not denying that this use is a fraction of their value. But how came they to be used as money? Davanzati, an Italian economist of high repute, says : " Gold and silver, being found to be of no use in supporting human life, have been adopted," &c., that is, appropriated to the use of money. This, we should think too puerile to be noticed, except for the gravity with which it has been cited by others. M. Turgot answers this question : " By the nature and force of things." But this answer, as must be seen, has no more point in it than the surface and materials of cre- ation, inasmuch as it has all this range. Others answer : By rea- son of their qualities. This is not denied, so far as those qualities determine their intrinsic value, which brings us back to where we started from. But it is said, they mean the adaptation of their qualities to this specific use ; which has some reason in it, but 13 194 THE FOUNDATION OF THE VALUE OF MONEY. more a^-alnst it. Tlie very authorities who give this reason, be- cause, forsooth, they must give some reason, such as M'Culloch, overturn it by starting objections, and proving the great incon- venience and expense of these quaHties, in such an appropriation of these substances. The truth is, gold and silver were proved to be valuable, highly so, and always in demand, before they were used as money. They were found to be remarkable for their beauty and utility, and to excel all other substances for the number of uses in which they were held in high esteem, no matter whether for utility or fancy, as both these ends impart value or command price ; and the longer and better that they have been known, tried, and compared, so much more stern and abiding has been the proof of their excellence, and so much greater the number of uses to which they have been appropriated, and for which they have been in request. These are facts which run back through all history, and are without contra- diction ; and the growth of history on this point, as to both materials and time, only tends to verify them. Gradually, in the course of time, and by the exigencies of society, they came to be appropri- ated, by general consent, to the uses of money, till at last that con- sent became universal in the civilized world. This appropriation, therefore, was ulterior and consequent to the ascertainment of the many useful and admirable qualities of these metals for other pur- poses ; without which, there is no probability that they would have been employed as money. Turgot says, " The precious metals became universally money, not in consequence of any arbitrary agreement among men, or of the intervention of any law, hut by the nature and force of things.'''' That it was "not in consequence of any arbitrary agreement," is well said, though M. Say seems to think otherwise. It is no less true that law can not make money, or force credit into anything, to make it pass for money. Our continental money, the French assignats, and other attempts of the kind, with which history abounds, are in point. But Turgot, like every thinking man, felt the necessity of finding, at least of asserting, the foundation of the value of money. And what is it ? " The nature and force of things !" But " the nature and force of things" is so indefinite, so obscure, and so mystical, that one is so far from being enlightened by such a definition, as to be thrust into greater darkness. Instead of having the foundation pointed out, one is introduced into the THE FOUNDATION OF THE VALUE OF MONEY. 195 wide creation, to find it as he can. No doubt it is somewhere in this field. M. Say says: "Money is indebted for its currency, not to the authority of government, but to its being a commodity bearing a peculiar and intrinsic value." The use of the word " peculiar" here, is a sufficient indication that M. Say was not prepared to go any farther ; that it was a mere refuge ; for, in such a con- nexion, on such a topic, it is obscure and mysterious, scarcely, if at all, more explicit and definite than Turgot's " nature and force of things." And yet it is a subject, a point, on which we can not afford to be left in the dark. It is the foundation of a monetary system that we are now in search of; which is one of the most important branches of public economy. M. Say also observes: "If they [gold and silver] were never used in plate or jewellery, money would grow cheaper." By " plate and jewellery" here, he evidently intends to comprehend all the uses of these metals, other than that of money ; for he adds : " The employment of the precious metals in manufactures, makes them scarcer and dearer as money ;" M. Say actually stood here, with his foot on the very foundation of the value of money, recognised it in terms, and yet he did not seem to know he was there. For he does not even raise the question whether, but takes for granted that gold and sil- ver would have been used as money, if they had not been appro- priated to these other objects. It is marvellous that he should say, " their employment in manufactures makes them scarcer and dearer as money," when in fact these other uses constitute the only foun- dation of their value and use as money. It is true, indeed, that these other uses make them " scarcer," and " dearer." But M. Say takes for granted they would have been used as money, independent of these other uses. M'Culloch says : " The union of the different qualities of the comparative steadiness of value, divisibility, durability, facihty of transportation, and perfect sameness, in the precious metals, doubt- less formed the irresistible reason that has induced every civilized community to employ them as money." Here, again, is not the least approximation to the true question, except as it is assumed. What is required is, to have it solved. No doubt " steadiness of value" was a reason, and the reason. But how came it with that " steadiness of value" ? The other four consecutive reasons are comprehended in the first, and compose it, as to the money charac- ter of gold and silver. These qualities, however, can be found in 196 THE FOUNDATION OF THE VALUE OF MONEY. many other things. The qualities of gold and silver, such as they are, are veiy serious objections to their use as nnoney, so much so that they are kept in deposite, as much as possible, and the great bulk of trade and conrjmerce is carried on by a substitute, to wit, paper. So far from having a " facility of transportation," it is very inconvenient and expensive. M'Culloch himself says, on the third page following the above-cited passage, "it occasions a very heavy expense." Think of the expense of bringing twenty-five millions of dollars of specie from Europe to the United States, in 1846 and 1847, as a balance for breadstuffs required in Europe by famine. The costs of insurance, brokerage, freight, loss of interest in the meantime, &c., could not be covered for less than 3^ per cent., which, as will be seen, amounts to $875,000. And as this impor- tation of specie into the United States was forced by an extraordi- nary and providential event, it is, perhaps, safe to consider it as out of place, and it may have to go back again. A boldness of impor- tation, based on this, will naturally force it back, to cost $875,000 more; or in all, by these two moves, $1,750,000. Such, also, is the effect of removing specie, in large amounts, from one part of the country to another. Any one can see, that paper is a much more convenient, and much less expensive medium, which is always resorted to, when it has specie as a basis ; but for want of it, specie itself must travel. The transactions of six of the New York banks, amounting to $60,000,000, in ten days, without employing over $200,000 of specie, noticed in Chapter XVL, show how utterly impossible it would have been to do more than a small fraction of that business, in the same time, with specie. The qualities of gold and silver, therefore, instead of being a reason for their use as money, is one of their greatest objections — certainly a great one, and a very expensive inconvenience. Besides the inconvenience and cost of large transfers of specie, from one nation to another, and from one point of the same country to another, it would be next to impossible to transact the ordinary small trade of a country with specie, between points requiring remittances ; and while bank paper is convertible, almost everybody prefers it to specie, and employs it, except for small change. Gold and silver are burdensome in the purse, in the portmanteau, and in the trunk, besides being a subject of anxiety, when one has charge of them, at home, or trav- elling. It would be absurd to say, that people object to have them, as owners, for they are of recognised value ; but most people do not like to have them, as keepers, on account of the inconvenience, THE FOUNDATION OF THE VALUE OF MONEY. 197 risk, and cost of removal. Their qualities are a serious evil for the purposes of money. How absurd, then, to assume, that they are devoted to this use, on account of their qualities, except so far as they are adapted to other uses, which, as a foundation, constitute their adaptation to this, and thus overcome the objections to their inconvenience. Their adaptation to other uses, and their values in those uses, are undoubtedly the true secret of the founda- tion of their value as money. They began to be used, and can only continue to be used, as money, on that account. The evils of their qualities as money, could not be tolerated, would cause them to be repudiated, but for this ; but on account of this, these evils are submitted to ; they are not a recommendation. The rec- ommendation is farther back, lies deeper, and overcomes these ob- jections ; and not only overcomes them, but makes them light and preferable. The very name, distinctive, of these metals, " precious," comes not from their use as money; but from their other numerous and important uses, constituting the foundation of their value. This designation of ^'■'precious metals," is very significant. It did not come by chance; but is founded on a substantial aggregate value, which never has failed, and never can fail, in any probability; be- cause the uses of gold and silver are constantly multiplying. While one is superseded, many are added. Nobody apprehends the fail- ure of their value. The experience of all nations, in all time, has established their character as "precious," and there never has been manifested a symptom of the giving way of this faith. It is only confirmed by time and events. Notwithstanding, therefore, all the inconveniences of these metals, on account of their qualities, when employed as money, they will no doubt continue to fulfil this des- tiny, on account o^ihe foundation of their value in other uses. They who possess them, will ever know, can never doubt, tliat they hold in their hands the best possible pledge of value. It is proper, here, to rejnark, that the inconveniences of gold and silver, as a currency, are increased by time, as civilization advances, as commerce is extended and increased, and as, by this means, the necessity of effecting commercial exchanges with the greatest pos- sible expedition, and in great amounts, is augmented. For this and other reasons, many eminent economists and statesmen have ex- hausted their wits to find a substitute. Even Ricardo appears seriously to have believed, that the British government might found a currency on its credit. He advocated it, if we are rightly in- formed, in the very face of the depreciation of the bank of England 198 THE FOUNDATION OF THE VALUE OF MONEY. paper, during its suspension of cash payments, from 1797 to 1822. He appears to have based his theory on the fact, that the deprecia- tion was no more ; whereas, we think, he should have come to the opposite conclusion, from the fact that it depreciated so much. That credit is itself a currency, in one sense, and to a great extent, is undoubtedly true; but it must have a foundation. It is this very foundation which we are now inquiring for, to wit, the foundation of the value or credit of gold and silver, as money, as the medium of trade. All seem to admit, that it is not in its character as mon- ey ; for who of the econon)ists, it may be asked, has ever yet got farther than Turgot in this investigation, who laid this foundation *' in the nature and force of things" ? Clearly that can not be sat- isfactory. And yet a knowledge of the foundation of the value of money is not less important for an inteMigeni view of the whole subject, thare is a knowledge of the foundation of anything else that can be named, to a right view of it. Branches of truth, in such a practical mat- ter, may, doubtless, be seen, and correctly stated, without this knowl- edge ; but no philosopher should be satisfied, till he has got to the bottom of his subject ; and he is liable to- error, if he does no6 find it. " The sole reason," says M. Say, "why a man elects to receive the coin, in preference to every other article, is, because he has learnt from experience, that it is preferred by those, whose products he has occasion to purchase. Crown-pieces derive their circulation! as money from no other authority than this spontaneous preference. Custom, therefore, [originating in an accident,] designates the spe- cific product that shall pass exclusively as money. The choice of the material is of no great importance, whethei" it be gold or silver, leather or paper. . . The value of gold and silver is arbitrary, and is established by a kind of mutual accord in every act of trade." Is not this very astonishing? It will be observed, that we do not arraign the alleged force of custom in the case which is always a blind leader; but the question is, what was the original foundation of this custom? Custom, certainly, is a better reason for an ignorant man, than for a philosopher, who professes to give, not only the reason why money has credit, but why it originally obtained credit, as a common medium, and why- it has maintained it, from time immemorial, with all the world, without experiencing the least possible diminution or disturbance? There must have been a time when this use of gold and silver, as THE FOUNDATION OF THE VALUE OF MONEY. 199 money, had not so much the power of custom ; and there never was a time, when, as a mere custom, it would not have been dis- turbed, if it had not a more substantial basis ; if, indeed, it had not a foundation in reason, in philosophy, in every consideration, that would stand the scrutiny of all men and all minds addicted to in- quiry, so as to baffle every possible effort to impair that credit. Custom is not, can not be, a reason for such a fact. There is not, perhaps, a subject within the scope of human investigation, the true basis of which, for the practical purposes of life, is more important to be understood, than that of money, or the knowledge of which is more essential to a true theory of public economy, so far as it relates to the currency. Most truly did M. Say remark : " The first principles of political economy are as yet but little known. Ingenious systems and reasonings have been built upon hollow foundations." Here is nt)t only a " first," but a fundamental *' principle," entirely unknown to himself; and his own "ingenious reasoning," on this vital and fundamental question, is not " built upon a hollow foundation ;" but it has no foundation at all. M. Say observes truly : " To enable it [money] to execute its functions, it must, of necessity, be possessed of inherent and pos- itive value." But, surely, its value must lie somewhere else than in its character as money ; or, in other words, something else must have made this gold eagle, and this silver dollar valuable. Time was, when they were not money ; now they are ; there must have been some other reason for their adoption, than that money was wanted. Say, these metals are scarce ; there are many things more so. Say, they are convenient for this use, on account of their qualities ; there are other substances not ill and some much better adapted, in these attributes, for such an appropriation; and allow- ing, that these useful qualities, added to their scarcity, impart a substantial value to gold and silver as money ; which is not denied ; still the value for which they are credited, relative to that of other commodities most necessary to man, is in great, prodigious dispro- portion, independent of other considerations. Say, that this dis- proportion is convenient to all parties, to all the world. That may be, doubtless is, true. It is, then, an arbitrary value — a fraud ! The world has cheated itself, and reckons it a good bargain ! It is evident, self-evident, that gold and silver, as money, must have had a value to start with, and as a reason for being able to start. This is the point, and all that is claimed. To suppose that the world has been swindled, or swindled itself, into the belief, 200 THE FOUNDATION OF THE VALUE OF MONEY. that money has a value, which, after all, is factitious; and that it should be satisfied with tliis persuasion, on the principle that it is a convenient delusion, is not more absurd than contrary to M. Say's own doctrine, when he says, " a system of swindling can never be long lived, and must infallibly in the end produce much more loss than profit." It is not easy to believe, that the world has been thus cheated, and that the credit of its circulating medium does not rest on a ba'sis entirely independent of itself. It is the very nature of credit to have a basis. To say that intrinsic value is the basis, is precisely what we maintain. Intrinsic value for what? It is not the idea or function of money, that constitutes intrinsic value ; but it is that which qualifies for the function ; and the qualifying power lies back of money itself, is underneath it, is its foundation. But why adopt an absurdity without cause ? Why hold debate here, when the numerous and important values of gold and silver, for other uses, are so palpable, quite enough to recommend them for the offices of money, and quite sufficient to sustain them in the discharge of these functions? In this light, society is safe, and the good sense of mankind is vindicated, in adopting the "precious metals" as a common currency. It would be most unpleasant to be obliged to believe that money is a fraud — or even that the use of it is a self-imposed deception. But it is not, perhaps, very strange that an economist, who, like M. Say, holds that the value of paper money does not depend upon its being convertible into specie on demand, should also maintain that the esteem in which gold and silver are held, as money, is arbitrary — the effect of custom. Without doubt, gold and silver employed as money, constitute one of the values of these metals, and that not unimportant ; but the foundation on which they started as money, the causes which summoned them to this position, to these important functions of society, and of the commercial world, will be found only in values of an older date ; and the causes which still sustain their credit as money, will also be found in the same old values, and in a multi- tude of others since added, and continually augmenting, as the uses to which these metals are applied, other than that of money, are multiplied in the progress of time, and in the advances of civilization. It was never an accident, nor a sura or concatenation of accidents ; it was never an arbitrary fit, nor an arbitrary law of society, that lifted gold and silver into the position, and installed them in the functions of money ; it was not custom ; it was not THE FOUNDATION OF THE VALUE OF MONEY. 201 even the necessity of a common medium of trade that selected them for this duty, though that necessity was urgent ; but it was a sub- stantial value imparted to them by time and events, destined never to be diminished, but always to increase; it was "the nature and force," not "of things" in general, as Turgot taught, but of these very things in particular; it was their own position, their own force and nature, their own value, independent of and prior to that of money, that made them money. As a law of society, which grew up with society, it could no more be resisted than a law of nature. It was not a choice which men made ; but a necessity into which they were forced ; and not a necessity to have this or an alternative at their own will ; but to have this, and nothing else. There was no more uncertainty hanging over the predestined use of gold and silver as money, than over the course of the heavenly bodies. The law in one case is as forcible as that in the other ; and both are ascertainable and definite. One is the attraction of gravitation ; the other the intrinsic value of gold and silver for other uses. If we wish to ascertain the additional value which gold and silver have acquired in their use as money, we know of but one rule, which, though it may not be accurate, is worth something. In China, Japan, and some other portions of the Eastern world, gold is not used as a currency, but silver only. Take, then, the relative value of these metals in Europe and America, where both are used as money, and in those quarters where silver only is thus employed, and the difference may perhaps, be assumed as the pro- portion of value which they have acquired by their use as money. In Europe and America, the value of gold is to that of silver as 15 to 1, with a small additional fraction in favor of the former. In China, the value of gold is quoted, by some authorities, as 12 to 1 of silver ; by others as low as 10 of the former to 1 of the latter. In .Japan, the value of gold is cited by some as 9 to 1, by others as 8 to 1 of silver. If the medium difference in these quarters be assumed as 10 to 1, then the value added to these metals by their use as money, is equal to one half of their value for all other uses. It ought to be by much the greatest value, as compared with that imparted to gold and silver by any other single use, because it is by far the most important. Money may be defined as the commo7i medium of trade, or of commercial exchanges. Or it may be called the standard medium of trade. 202 DEFINITION AND FUNCTIONS OF MONEY. We have purposely and scrupulously excluded from this def- inition all other ideas, which, by various authorities, have been put into the definition of money, particularly such as its being a measure of value, which, at first sight, would be received by almost all persons as a correct and necessary part of the definition. A man on 'change buys stock of one person, at 95 per cent., and turnin<>- on his heel, sells it to another at 95 L Which is the measure of value, since both can not be? The buyer who buys to sell, for the sake of profit, always buys at one price, and sells at another and higher if he can. In all exchanges, prices are con- tinually fluctuating. Which is the measure of value? These examples are perhaps enough to show, that the definition of money as being the measure of value, or when this is made a part of the definition, leads to an absurdity. We think M. Say has clearly proved that money is not the measure of value, by the simple suggestion, that measure supposes an invariable rule, as for example, in measures of capacity, of superficies, of length, and of weight. Invariability is so important, that the law makes it a fraud and criminal offence to use false measures in trade. But prices are constantly fluctuating. Money exj^resscs prices, and eff"ectuates exchanges; but it does not meas- ure prices. Its functions cease, when it has expressed them, and effectuated the trade. It can go no farther. The measure of value is the agreement of parties as to price, in any particular transaction ; and for public purposes of the market, the prices current are the nearest measures that can be found. If persons would learn to distinguish between the expression and the measiire of values, they would find themselves at the end of this question. The agreement of parties determines, and money expresses values. The agreement is the measure of value, as between them, and it is expressed in the established denominations of money. So in all cases of actual exchanges. So in prices current of the market. The sole functions of money, as such, are to express values, and to effectuate exchanges as a quid py-o quo. We define money, therefore, as the common medium of trade, and find in it two simple, but important functions, one to express values, and the other to consummate commercial exchanges, by being given on one side, and accepted on the other, as the consideration thus agreed upon. It is a medium as the instrument ; it is common^ because the world has so ordained. MONEY. 203 CHAPTER XIV. MONEY. The Distinction between Money as a Subject and as the Instrnment of Trade. — Review of the Doctrine of Adam Smith and others on the Relative Position of Money and of the Commodities given for it. — Adam Smith versus Adam Smith. — Price the Attribute of Commodities, not of the Money given for them. — Smith and Others on this Point — Error and Confusion of their Doctrine. — Weight the Measure of Money. — Effect of the Dis- covery of America on Prices. — Professor Twiss' " View of the Progress of Political Economy, since the 16th Century." — Mr. Twiss meets the Point, and puts all at Stake. — Examiuation of his Position. Having defined money, determined what is the foundation of its value, and ascertained its functions, it is now proposed to mark the distinction between money as a subject, and money as the in- strument of trade, then to follow out its results. This distinction is one of great importance, not simply because it is a fact, connected with a very important subject, but more especially because the fact itself is entitled to more influence on the question between Free Trade and Protection than any other, perhaps, that could be named. It is, indeed, in our opinion, of itself alone fully adequate to decide that question. Whether this be a reason that has induced the Free-Trade economists to keep this distinction out of view, or whether they have fallen into their great error because they did not discern it, we do not undertake to decide. It is true that it has been recognised, incidentally, by Adam Smith, and by others of his school, as it was impossible, certainly not easy, to avoid it ; but, whenever the proper place for its influence turns up, it is carefully kept out of sight, all is silence, except, in one recent and notable instance, Mr. Twiss, who faces the principle, and denies its ap- plication, by forcing upon it a misnomer, as we shall presently see. We proceed to the distinction. The Free-Trade economists, Adam Smith and his school, say, that money is a commodity, and that it occupies the same position in trade as other commodities. We grant, that it is a commodity, and that as a subject of trade, it occupies, as they say, the same position as other commodities. But we deny, that it discharges the functions of money, and hold that it is merely passive, when it is the subject of trade. Gold and silver, in passing from the mines to market, buUion in the 204 DIFFERENCE BETWEEN MONEY AS THE SUBJECT, market, and all manufactured articles which are composed in whole or in part of the precious metals, are subjects of trade. The same may be said of coin, bank-notes, and negotiable paper of every kind, when bought and sold. Bankers and money-brokers trade exclusively in money, and money in their hands, and in whatever form, coming or going, is always a subject of trade. The precious metals, in bullion or in coin, passing through the hands of brokers, from one country to another, are subjects of trade, while in the hands of those dealers, though they may be at the same time discharging the functions of money between debtor and creditor, who employ bankers and brokers as agents of remit- tance. All notes discounted at bank, are subjects of trade, in the transaction, both to the lender and to the borrower. Bills of ex- change, bonds and mortgages transferred, and many other descrip- tions of credit, for which a consideration is paid, are subjects of trade. All who borrow credit for a consideration, buy it. It is a subject of trade in the transaction. Gold and silver, in all other forms than that of money, are subjects of trade. So far as these and many other forms and conditions of money and of credit go, and so far as the precious metals are devoted to other objects than money, as subjects of trade, we agree with the Free-Trade econ- omists, that they occupy the same position as other and all other commodities exchanged in trade. But, it must be observed, that money, in its own proper func- tions, as such, has had nothing to do with all this, except so far as the considerations rendered in these transactions are concerned, as for example, the discount and interest of a note. They are merely the preparatory stages, through which money passes, the platform on which it is tossed about, in a merely passive state, as a subject of trade, till it reaches the great field of the commercial world, where it is destined and designed actively to discharge the appropriate functions of money. This is a field, before which the Free-Trade economists have held up a screen. Let us go behind it, and see how money operates there, in distinction from the man- ner in which it is operated upon as a subject of trade, before it gets there. A consideration of the difference of destination of money, and of the thino-s for which it is exchanged, as the medium of trade in this field, will cast light on this point. The destination of money here, is for an endless round of duty, in the discharge of the same func- tions ; whereas the destination of the subjects of its agency in trade, AND AS THE INSTRUMENT OF TRADE. 205 is either for consumption, or for a fixture in the disposition of per- manent capital, so called, but yet often perishable. Money is employed as the instrument to carry them on to their respective destinations, where they must soon arrive, perhaps by the first transaction ; but whether by one or more, money is the agent, and they are the passive subjects. But the functions of money in this field, never cease ; it will never have done its work ; its destina- tion is perpetual employment in the same offices ; and while the things on which it operates, are constantly passing away by con- sumption, or arriving at their final destination as fixtures, by the agency of money, money itself is constantly returning to its duty in moving on other commodities, in endless succession, to their destinations. Money, in this field, is the moving power, without which nothing else would move, so far as trade is concerned, except in the way of barter, which, properly does not belong to civilization. And yet Adam Smith, Say, Ricardo, M'Culloch, and others of that ilk, tell us, that money and a piece of calico are, commercially considered, the same thing, and occupy the same position, in a commercial transaction, when one is exchanged for the other; and they tell us, that it is no matter, whether a nation parts with one or the other, so that trade goes on. Unfortunately for a nation, and fortunately for the truth, the absurdity comes to light, when the money is all gone and trade will no longer go. We submit, then, whether the distinction between money as a subject and as the instrument of trade, is not clearly made out, as definite, substantial, and necessarily influential as to the matters in question. When and wherever there is a want of money, trade comes to a halt. The interest of every party, therefore, a man or a nation, concerned in trade, is to take care not to be out of money, for it is his "tools of trade." And how does such a party get out of money, if it had any ? It can only be by buying more than is sold of other commodities, which are prized and moved by money, and by being obliged to setde balances with cash. When the trade of a party comes to this, and the store of cash is exhausted, trade must slop, barter only excepted, which is the same as stop- ping, because it is a mode of trade which can not be revived, and which, if it could, can not now be employed to any profitable extent. It is by entirely overlooking this distinction, that the advocates of Free Trade commit their fatal error. They hold that money is 206 DIFFERENCE BETWEEN MONEY AS THE SUBJECT, a commodity, and that it is exchanged in trade as such ; and that consequently, the more of trade, the better, whether money goes or comes ; or whether all goes, and none comes. But, as above shown, it is not true, when gold and silver are parted with, in discharge of the functions of money, that they occupy the same position, as the commodities for which they are given; much less do they discharge the same functions. Strictly speaking, the commodities thus operated upon by money, discharge no functions at all, in the transaction that is going on, but are merely passive. Neither the world, or any part of it, has ever con- sented to take these other, or any other commodities, as a currency, as money, as a legal tender. The consequence is, that, when a foolish and unwise nation has parted with all its cash, on the theory of Free Trade, though it be ever so rich in other commodities, it can trade no more ; or if it has only parted with enough to cripple its commercial position, it is a bad business. It is, therefore, haz- ardous for a nation to part with its money, in foreign trade, on the principle, that it can be bought back again with other com- modities, as certainly and as easily as money itself can buy that which is in market. In the meantime, when there has been an inconvenient drain of money to foreign parts, how is the nation to carry on its home trade? Doubdess, by waiting long enough, and with great sacrifices, the money will come back, by reversing the mode of business, in selling more of other commodities than is bought ; which again demonstrates the fallacy of the doctrine, the practical operation of which brought the nation into this trouble. The following is one form of Adam Smith's argument on this point : " A country that has wherewithal to buy wine, will always get the wine which it has occasion for; and a country which has wherewithal to buy gold and silver, will never be in want of these metals. They are to be bought for a certain price, like all other commodities ; and as they are the price of all other commodities, so are all other commodities the price of these metals. We trust with perfect security that the freedom of trade, without any atten- tion of government, will always supply us with the wine which we want ; and we may trust with equal security, that it will always supply us with all the gold and silver which we can afford to pur- chase or to employ, either in circulating our commodities, or in other uses." It can not but be seen, that the great error of Adam Smith and his school, on this point, is, that they not only call money a com- AND AS THE INSTRUMENT OF TRADE. 207 modlty in trade, which is true when it is bought and sold, and is not employed as money ; but that they fail to consider its peculiar and appropriate functions in trade, when discharging the offices of money. They do not, so far as this point of their argument is con- cerned, allow it to have any functions at all ; but represent it as passive, like the commodity for which it is exchanged, in any par- ticular transaction. But gold and silver, when employed as money, are taken out of their position as commodities in trade, and used as an agent or instrument to carry on trade. They are technically, " tools of trade." In this capacity or function, they are the motive power of the commercial world. They do not, as before shown, in the discharge of this office, occupy the same position as the com- modities which they move, in the act of being exchanged for them. The commodities are passive, in relation to this act ; and money is the agent. When money has moved one, it moves another, and so on, without any definite limit ; and the same act may be per- formed an indefinite number of times every day, by precisely the same sum of money, in application to as many different com- modities. Adam Smith himself was aware of all this, as he could not but be, and as the following citations from him'will show: "The great wheel of circulation is altogether different from the goods which are circulated by means of it." — "Money, the great wheel of cir- culation, the great insfrumerit of commerce, like all other instru- ments of trade, though it makes a part, and a very valuable part of the capital, makes no part of the revenue of the society to which it belongs ; and though the metal pieces of which it is composed, in the course of their annual circulation, distribute to every man the revenue which properly belongs to him, they make themselves no part of that revenue ;" that is, no part of the commodities purchased by them, to be consumed or used. — "When we compute the quan- tity of industry which the circulating capital of any society can em- ploy, we must always have regard to those parts of it only, which consist in materials, provisions, and finished work. The other, which consists in money, and which serves only to circulate these three, must always be deducted. In order to put industry into motion, three things are requisite : materials to work upon, tools to work with, and the wages or recompense for the sake of which the work is done. Money is neither a material to work upon, nor a tool to work with ; and though the wages of the workmen are commonly paid to him in money, his real revenue, like that of all 208 DIFFERENCE BETWEEN MONEY AS THE SUBJECT, Other men, consists, not in the money, but in the money's worth ;. not in the metal pieces, but in what he can get for them," to wit, the commodities wanted. It will be observed, that Adam Smith, here, not only ascribes a peculiar function to money, but places it in a peculiar position, as is right. lie does not rank it among the things, or commodities, exchanged, but endows it with the faculty of niaking those ex- changes, as " the instrument, as the great wheel of circulation ;" and although he says truly, that it is a part, and a very important part, of the capital of society ; nevertheless, the function he ascribes to it is so peculiar, that it is not to be computed with, but " to be always JeJi/cfcd'''' from, those parts of "the circulating capital of society," which put and keep industry in motion, because " money serves only to circulate" those other parts. This is its function. Surely, then, Adam Smith himself has put it quite far asunder, in its position and functions, from the things which it "circulates," or acts upon — quite far enough for our present purpose. Let us, then, return, and try Adam Smith by Adam Smith. He says : " A country which has wherewithal to buy wine, will always get the wine which it has occasion for." Very good. He adds : "And the country which has wherewithal to buy gold and silver, will never be in want of these metals." No one can fail to see, that he has here begged the question, as a step-stone to his conclu- sion; in other words, has asserted an identical proposition — a mere truism. The " wherewithal" is the thing required, and having, by hi/jiothesis, put the country in possession of that, to start with, of course it ought' to do well enough. If the country has money, or anything else which' the wine-makers want, or which a third party will take for the wine, it can get it ; but if the wine can only be had with money, then money is the only " wherewithal" to buy it. Parties in trade are not to be forced. Commercial transactions have always to do with two wills and two interests, at least. Money is the only thing that will buy everything else. A man may have plenty of substantial capital, and yet not find it easy to buy money with it, if he has been so unwise as to get out of money. He is in absolute peril of bankruptcy, if his position requires money ; at best, he is embarrassed. But this is not the end. He says: "They," gold and silver, " are to be bought for a certain price, like all other commodities." This seems very plausible, and in one sense, is true. But it will be observed, that he does not use the term money here, but gold AND AS THE INSTRUMENT OF TRADE. 209 and silver; and that, instead of inve^iting them with the peculiar attributes he has ascribed to money, in the passatres above cited, he puts them in the same class and position with all other commodi- ties, not as agents, but as subjects of trade ; not to l)uy and sell with, but as things to be bought and sold ; and it is true, that gold and silver, when not used as money, occupy that position. Rich men and rich nations, in a prudent way of living, can. easily buy gold and silver, as subjects of trade, and are accustomed to do it ; but tho-e men and tho:^e nations, who, by mismanagement, have got embarrassed, though they may have other capital in abundance, can not do it so easily. Here is the distressing point of Adam Smith's hypothesis. If his reasoning avails anything in the case, it is intended to represent, that a man or a nation that has traded so freely as to get out of money, is just as well off as the man or the nation that has taken care to keep enough money in bank to do business with ! Is it not so? But he is involved in a still greater absurdity. He adds: "And as they," gold and silver, " are the price of all other commodities, so all other commodities are the price of these metals." Let us put this proposition in another form, and see how it will look : "And as they," gold and silver, "will purchase all other commodi- ties, so will all other commodities purchase gold and silver." No one will deny, that this is a fair statement of the case ; for it is the very case ; nor will any deny, that it is untrue ; absolutely untrue, as a reliable condition, in the experience of life. It is because money is the only common currency of the world. What, then, is a nation to do, that has traded so freely as to get rid of all its money ? Why, simply, take a new start, trad€ more prudently in future, and under great inconveniences and with immense sacri- fices, get up again, as every man is obliged to do, who, by trading in the same loose way, has got into the same trouble. This is only one of a multitude of instances, in which Adam Smith and his school reason precisely in the same way, whenever they approach the doctrine of Free Trade. Adam Smith could not but be right, as seen above, when he was talking about the po- sition and functions of money, in negotiating exchanges ; and he could not but be wrong, when he turned his back on that reasoning, and undertook to show, that it was just as well for a nation, or a man of business, to be without money, as to have it at command. But let Adam Smith answer Adam Smith yet farther on this point : " The merchant generally finds it more easy to buy goods with 14 210 DIFFERENCE BETWEEN MONEY AS THE SUBJECT, money, than to buy money with goods. . . Money is the known and estabHshed instrument of commerce, for which everything is readily given in exchange; but which is not always witb equal readiness to be got in exchange for everything. . . When the mer- chant's goods are upon hand, he is more liable for such demands for money as he may not be able to answer, than when be has got their price in his coffers. He is more anxious to exchange his goods for money, than his money for goods. A merchant, with abundance of goods in his warehouse, may be ruined by not being able to sell them in time." It is true, foreseeing the application of this reasoning, he adds : " A nation or a country is not liable to the same accident." A nation is, nevertheless, liable to precisely the same accident, as our own experience proves, in the examples hereafter cited in this work. But Adam Smith confesses that " the nation in such a case might suffer some loss and inconvenience, and be forced upon some of those expedients which are necessary for supplying the place of money." This, surely, is enough from him, to answer himself. He was right in saying that " the quantity of coin in every country is [should be] regulated by the value of the commodities to be circulated by it ;" but he was wrong when he said it was just as well to have less than enough, as enough for this object ; and he was right again when he confessed that for want of enough, " a nation might suffer inconvenience and loss, and be forced upon some of those expedients which are necessary for supplying the place of money." So generally, when Adam Smith is wrong in one place, he sets Adam Smith right in another; but the misfortune is, that many take his wrong for right. M. Say observes : " If the merchant finds the precious metals a more profitable foreign remittance than another commodity, it is likewise the interest of the state to remit in that form ; for the state can only gain and lose in the persons of its individual subjects ; and in the matter of foreign commerce, whatever is best for the individual is best for the state also." One is astonished to find him saying in a note to this averment, that " this position applies to foreign commerce only. The mo- nopoly profits of individuals, in the home market, are not entirely national gains." Smith and all the economists — not excepting Say himself, when he is himself — admit, that, in the home trade, the nation retains both the values exchanged, as well as the profits on both sides; whereas, in the foreign trade, it realizes only one side of the double benefit. Observing the word " monopoly" AND AS THE INSTRUMENT OF "TRADE. 211 here lugged in by force, as it evidently is, we have been forcibly struck with the suspicion that M. Say had some special, personal reasons for such a violation of sound reasoning. To maintain that the nation is a gainer, when the merchants are enriched by such excessive importations as to drain the country of its specie, and as a consequence to paralyze all branches of business, and at the same time to say tliat " the profits of individuals in the home mar- ket are not entirely national gains," when both values exchanged are retained, with the profits, "monopoly" or not, is somewhat more than an absurdity. The sly use of the cant word " monopoly" here, was unbecoming the dignity of a philosophical debate. A man in a passion may, perhaps, be excused for not pi-otecting him- self in argument, as well as for want of reason in his protestations. The fallacy of the main proposition above cited, may be thus shown. A man owes a debt, and is obliged to pay it, or be dis- honest, or turn bankrupt. In this sense, it is his interest to pay ; at the same time, it may be very inconvenient. A nation, by over- trading with foreign parts, in buying more than it sells, through its merchants, owes a debt to foreign parts, at one or more points ; and that debt is obliged to be paid. The merchants who created this debt, and who make the remittances, have, w^e will suppose, made their fortunes. And the doctrine of Say is, that the nation can not be benefited less than the amount of benefit to these mer- chants. These merchants have got rich by selHng their goods to the people ; the people, having paid for the goods, and consumed them, are minus both the money and the goods ; the merchants have got a part of this money, and are rich ; foreign parts have got the other portion, being the major part of it, and the nation is minus that major part, and the goods, too, which are consumed in food, drink, clothing, and in other ways. M. Say holds that the nation is richer ; and as much richer as the profits of these mer- chants. Can anybody see how that is? If the imports had been permanent capital, and gone into the improvements of the country, and if the nation, after paying the balance, had money enough left for its trade, one can see a national benefit. But this is not the case. M. Say, and all of his school, hold, that, in all cases, ab- solutely and unconditionally, the nation is benefited, enriched, by exchanges abroad, though the buying exceeds the selling, and though the balances are settled by cash ; or rather, to present the theory in their own form, they aver that the buying can not exceed the selling ; and that it makes no difference whether a nation parts 212 DIFFERENCE BETWEEN MONEY AS THE SUBJECT, with cash in trade, or with other commodities ; nor what proportion the cash parted with, may bear to that received. If money is given, they say, it is only a commodity, and that really, there is no balance in the case ; but accounts are even, and all parties are ben- efited. Here, as will be seen, is the great error we have been endeav- oring, among others, to expose, viz., overlooking the peculiar po- sition and functions of money in trade, and ranking it with all other commodities, in every particular, as a subject of trade. In that view, M. Say's conclusion is correct ; but the doctrine, reduced to practice, can not but be fatally erroneous, with nations as well as with individuals. Unless a nation has mines, like the states of Mexico and South x\merica, and trades in the precious metals as indigenous products, it can not generally afford to buy of other commodities than money, more tiian it sells, and pay the balance in money. Our own commercial history, as exhibited in subse- quent parts of this work, is all the argument that need be offered here, if an appeal to common sense were insufficient. " A View of the Progrcsn of Political Ecovnmy in Europe, since the I6th Centnry,^'' by Travers Twiss, London, 1847, lately pub- lished, as a course of lectures at the university of Oxford, is wor- thy of some notice. Like the British economists generally. Pro- fessor Twiss is of the school of Adam Smith. It may, however, be observed, that this "View," &c., taking the confession of the author in his preface — the truth of which is sufficiently demon- strated by the production itself — is entirely a one-sided view. He candidly says: "I have attempted to assign to the chief writers their due shares, respectively, in furthering the progress of sound opinions ; but I have purposely omitted the names of many authors of eminence who have struggled to retard that progress," &c. One can not, therefore, after such a confession, expect a very fair " view" of this department of history, from such a hand. Having repeatedly recognised the distinction which we have made in this chapter, between money as a subject and as the in- strument of trade — though not in the same terms which we em- ploy to designate it, nor for the same purpose — unlike his brethren of the same school, Mr. Twiss has presumed to face this principle, while on the subject of what is commonly called the balance of trade, and flady denies that it has any application here. He ob- serves : " If it be said, foreign commodities will be paid for with money [so far as the imports exceed the exports], let it not be over- AND AS THE INSTRUMENT OF TRADE. 213 looked that the gold or silver which is given in exchange for for- eign commodities, is exchanged away as a commodity, and not as money. . . It is in the character of a commodity, that gold or sil- ver becomes an article of foreign commerce." Here, as will be seen, is the same old song. We are heartily glad, that any member of the Adam Smith school has at last dared to face this point of the main question ; for there are many points, any one of which, properly concluded, is decisive of the whole ; and this is one of them. Professor Twiss has, man- ifestly, put all at stake here, on the tenableness of his assumption. If money remitted from a nation, to setde balances run up by an excess of imports over exports, taken as a whole, is, in that trans- action, discharging the functions of money, and is not a mere sub- ject of trade, as averred by JMr. Twiss, all other arguments for Free Trade are of no avail. It is lost on the cast of this single die. Let us see. First, as to what we concede. We concede, that money, in passing from one nation to another, is weighed in the scales, as the common currency of the world. But this, in effect, is also true of every coin, in its domestic round, as a legal tender. The mint as- says determine its weight and degree of purity, and it is legalized only on that assumption. The law weighs, and the mint declares the weight, to save the public the trouble ; and the currency of any coin whatever, in a given state, is authorized precisely on the same principle, which regulates the currency of gold and silver between nations. Next, we concede, that, generally — we have no objec- tion to admit, that, universally — there is a commercial agency em- ployed in the remittance of money from one nation to another ; that that agency is paid for this service ; and that the money, in the hands of this agency, from the time it is received at home and paid abroad, is, so far as the agency is concerned, a subject of trade. But, observe, that precisely the same is true of a remittance from New York to New Orleans ; or from the latter to the former city ; or from any one city or place in the Union, to any other place or city, when it is made by a commercial agency, or by a bill of ex- change. In the hands of this agency, and so far as it has to do with it, the money is a subject of trade, because the agent is paid for doing the service. We think Professor Twiss must have a very bold front, to Bay, that the employment of this intermediate agency, in whose hands the money is a subject of trade, as in the case of every broker's or banker's business, at all affects the position or 214 DIFFERENCE BETWEEN MONEY AS THE SUBJECT, relations of the debtor and creditor, at the two opposite end:5 of this transaction, or tends, in any degree, to transform the creditor into a buyer of money, when he receives his pay, or the debtor into a seller of money, when be remits it. And yet, this transformation is necessary, to justify Mr. Twiss's assumption. But we are willing to rest this question on a rule laid down by Mr. Twiss himself, in the following words: "We must never lose sight of the fact, that gold or silver, strictly speaking, is never pro- ductive, when discharging the functions of money, Ibut only when it is exchanged as a con>modity."^ We are satisfied with this rule^ and onJy regret, that the economists of Mr. Twiss^s schooJ had not laid it down fiom the beginnit7g, as it wouM have saved a world of debate. It marks the distinction precisely between nf>oney as a sub- ject and as the instrument of trade. >Surely, Mr. Twiss would not pretend, that the profits of brokers and bankers, as agents in settling^ the accounts betv/een debtors and creditors, force this settlement, as a transaction between the two latter parties, into an act oC produc- tiveness. What is the reward of the debtor for paying, or of the creditor for receiving, the amount of the debt ? Does the former give less, or the latter receive more, than the debt? If Mr. Twiss should insist, that the profits of brokers, bankers, and other agents^ in settling foreiga accounts, annihilate the functions of money in the gold and silver, so remitted, then the principle applies to all domes- tic settlements, under the same national jurisdiction, and neither he, nor anybody else, wiH ever be able to fi'nd what he himself acknowl- edges to be the proper functions of money ; for v^^e wil} venture to say, that no account was ever settled, and no money ever paid, without expense to at least one party, and consequendy not without a con'esponding benefit to some other party. Sucb, as every one will see, is eqnal'ly the fict in negotiating^ domestic as foreign bills of exchange. Men, in paying debts, will always take the cheapest way, and will employ secondary or intermediate agencies, as little as possible ; but it is not often that they can do altogether without them, and never without some expense of time, or in some other way. They may be obliged to trade off money under par, or they may have money worth a premium. Does the sacrifice in the for- mer case, or the profit in the latter, both of which involve trading in money, annihilate the functions of money, when tbe considera- tion is rendered to satisfy the debt? It may be observed, as a general rule, that money, that is to say, gold and silver, in any considerable quantities, never move from AND AS THE INSTRUMENT OF TRADE. 215 one remote point to another, as between New York and New Or- leans, or between Europe and America, till the rates of exchange are so high at one point as to pay the agencies of remittance, in- cluding insurance, to the other. Until the rates of exchanire will defray this expense, accounts between debtors and creditors in such remote points, are adjusted by bills of exchange. Whether this adjustment or settlement is effected by bills or by the transfer of bullion or specie, the transaction between the debtor and creditor is precisely of the same nature, as when a citizen of New York, with basket in hand, pays cash for the materials of his dinner wiiich he buys in the market. The cash, in both cases, equally and alike (discharges the functions of money. If the keeper of an hotel em- ploys a caterer to go to market, instead of going himself, the wages of this agent occupy precisely the same position as the premiums on exchange, or as ilie pay for the transfer of specie, between New York and New Orleans, or between New York and London. None will deny, that the cash used in the former case, discharges the functions oi^ money ; but it is not without expense, whether the keeper of the hotel goes himself to market, or employs an agent. All these intermediate commercial agents are parts of the economy of the commercial world; and the reason why they are employed, 8s because it is economy. If the debts from New York to New Orleans are so much greater than those from the latter to the former city, as to pay for the transfer of specie, then specie travels instead of bills of exchange ; and in this transfer, it discharges the func- tions of money, notwithstanding that the transaction is productive to the agents. The same is the case in the transfer of specie from one nation to another. Who can find or fairly make a difference ? Will Mr. Twiss say, that the twenty or twenty-five millions of dollars, remitted from Europe to the United States, in 1846 and 1S47, for breadstufTs, did not perform the functions of money, be- cause it was productive to the agents of the transfer ; or that it was no disadvantage to Great Britain to have parted with so much specie, because she received a quid pro quo in return ? And will he say this, in the face of one of the most overwhelming instances of the poverty of the precious metals, with which the British empire was ever visited? Yet, according to his doctrine, and that of the Adam Smith school, this twenty-five millions of dollars did not come from Europe to the United States as money ; but only as a commodity, in exchange for other commodities. Nay, more: according to this doctrine, both parties were benefited by the 216 DIFFERENCE BETWEEN MONEY AS THE SUBJECT trade. The famine in Ireland, and the general short crops of Eu- rope, were not a calamity to those parts, since they had all the profit of trading away the commodities of gold and silver for the commodities of breadstufFs. Such, legitimately, are the conclu- sions of the Adam Smith school. But, while we are writing this page, October, lS47,the great commercial houses of Great Britain, one after another, in rapid succession, are tumbling to ruin in lieaps, like as a circle of bricks set on end, near enough for contact, when one falls, the whole line goes down in succession ; and with this ruin comes universal distress. And yet Mr. Twiss says. Great Britain has parted with no money ; she has only parted with a commodity ! We agree with IMr. Twiss, that " it must never be forgotten, that the capital of a country, which is employed as money, is not employed as an instrument of production ; but simply as an instru- ment to facilitate the exchange of other capital." But when he says : " let it not be overlooked, that the gold or silver, which is given in exchange for foreign commodities, is exchanged away as a commodity, and not as money," he is in direct contradiction with the above-cited proposition from his own hand, and evinces, that a professor of Oxford university must not only sympathize with the policy of the British government, but tiiat he is forced to ex- / ecute its behests, in violation of his reasoning powers, peradven- ture, of his conscience ; unless, forsooth, charity should allow, that a man's social connexions may exercise dominion over his judg- ment, as is, no doubt, sometimes the case. But Mr. Twiss him- self, against himself, as almost every other member of his school has done, in one form or another, has confessed the true doctrine, in the following words : " When gold or silver is employed as an hxstnimnil of exchange, it is employed in a different way from that in which it is generally employed as a commoditijy Is not this surprising? We have endeavored to show, in another chapter, that, from the , time of Adam Smith, including him, there has been an understand- \ ing between the British government and British writers on public economy, as to the doctrine of freedom of commerce, which is not very consistent with freedom of opinion ; and it was not to be ex- pected, that a British university would go against British policy. Granting, however, for tlie sake of argument, that gold and silver, remitted to settle commercial balances against a nation, does not go as money, but only as a commodity ; still, it can not be denied, / AND AS THE INSTRUMENT OF TRADE. 217 that the money is gone. What, then, would this assumption of Professor Twiss, or our concession of the point, avail him? "A rose, by any other name, would smell as sweet ;" and the money of a nation, remitted to foreign parts, to pay debts, would still be a calamity, if enough should not be left for the trade of the country ; and we do not understand these gentlemen as making any pro- vision for such a coruingency, or for any contingency whatever. Their doctrine is absolute. There is an habitual mode of reasoning with Adam Smith, Ri- cardo, and others of their faith, in ascribing to gold and silver, when discharging the appropriate functions of money, the attribute of pricr, which, we conceive, leads to obscurity, even to error. The world has agreed upon gold and silver, not only as the common medium of trade, but as the common instrument to ex- press the values of all other things that are worth money, and to purchase them ; but it has not agreed on anything to express the value of gold and silver, when discharging the functions of money ; and there is no such thing. How, then, can gold and silver, in this office, be valued ? How can they be worth more or less, than themselves, weighed in the scales ? We know, indeed, that gold and silver vessels, or any works of art composed of these sub- stances, are prized by gold and silver coin. And why? Be- cause there are two principles in their value: one their weight, and the other their workmanship. Leave out their workmanship, and gold is gold, and silver is silver, of equal value, if equally pure, according to their weight, whether in coin, or bullion, or works of art. It would be absurd to suppose, that gold and silver, the instruments of expressing values, should express their own value, each for each. There they are, no n)atter how much in the world ; no matter how little ; the world has agreed that they shall express all other exchangeable values ; but never, that anything else shall express their value. How, then, can they be cheap or dear, cheaper or dearer, while acting in the capacity of money? Mr. Huskisson, one of the greatest of British statesmen, said, in 1816, " Gold, in this country, as silver in Hamburg, is really and exclusively the fixed measure of the rising and falling value of all other things, in reference to each other. The article itself, which forms this standing measure, never can rise and fall in value, with reference to this measure ; that is, with reference to itself A pound weight of gold can never be worth \\ pounds of gold. The 218 PRICE NOT AN ATTRIBUTE OF MONEY AS SUCH. truth of this, which can not, I conceive, be called in question, would not be affected by any imaginable increase or diminution in the quantity of gold in the country. . . Gold [in England] is the fixed measure of the rising and falling value of all other com- modities, in reference to each other." Again he says : " A bank- note is not a commodity ; it is only an engagement for the payment of a certain specific quantity of money.'''' Lord King said : " It may be assumed, on probable grounds, that the bullion has not become dear, but that the paper for which it is exchanged has been rendered cheap, because every commodity is cheap or dear, in proportion to the abundance or scarcity of the supply." — "We are in error," said Sir Robert Peel, 1847, " when we talk about the price of gold. The promissory note is a promise to pay a definite weight of gold, and nothing else." Even M. Say comes to our aid here as follows: "In treating of the elevation and depression of the price of commodities, although value has been expressed in money, no notice has been taken of the value of money itself; which, to say the truth, plays no part in real, or even in relative, variations of the price of other commodities." He also says : " The price of an article is the quantity of money it may be worth ; current price, the quantity it may be sure of obtaining at the particular place." ' " AVhat is worth in anj'thing, But so much money as t'will bring ?" — Hudibras. The British mind seems never to have disembarrassed itself from the effects of the controversy on this point, during the legal- ized suspension of cash payments in the bank of England, from 1797 to 1822, when it was so vital to the empire to support the credit of the paper of that bank. Will it be believed, that the British house of commons, in 1812, on motion of Mr. Vansittart, resolved, by a large majority, that "bank-notes were not depreci- ated, but gold enhanced in value?" — "Mr. Chambers," says Professor Twiss, " one of the witnesses examined before the bul- lion committee, whose reputation for intelligence and information stood very high in the commercial world, declared, that he did not conceive gold to be a fairer standard for bank of England notes, than indigo or broadcloth." It is true, that the bullion com- mittee, of which Mr. Huskisson, cited above, was one, came to a different and the true conclusion. But the majority of the house, either believed in their doctrine, or thought it an expedient measure PRICE NOT AN ATTRIBUTE OF MONEY AS SUCH. 219 of State policy to keep up this popular delusion, till the contest with Napoleon should be over. The notes of the bank were then at a discount of <£13 9s. 6d. per .£100, for gold. It was then sixteen years after the bank suspended, and no one could see the end of it. The empire, with this dubious and expensive war upon its hands, was compelled to subsist, so far as its currency was concerned — a vital matter — on the credit of this irredeemable paper. It was, perhaps, a patriotic virtue in the house of com- mons to decree and announce a stupendous untruth. It was an atrocious fraud in legislation, to make the bank-notes a legal tender; the cheat was immense, and extended to a quarter of a century. No one, of course, will imagine, that we mean to call in ques- tion the propriety of speaking of money as dear or cheap, as of high or low price, as a subject of trade. It is only when employed as the instrument of trade, that we maintain it can have no price in relation to the commodities for which it is exchanged. In this transaction, price can not belong to both the agent and the sub- ject ; but only to the latter. It is the very function of the agent to prize the subject. M. Say is, in our opinion, right in his advice, that money should pass by its weight. But he does not seem to have seen, that, in advocating this principle,- he has admitted, that money, as the in- strument of trade, occupies a position outside of valuation, or which is inconsistent with it. Neither does he seem to have recognised the fact that his advice has been complied with, in all coins, not as coming from him, but before his time, from necessity. All denomi- nations of coin, are rated at the mint, according to their weight ; and it is known, to all those who trade in them, precisely what their legal weight is, and what fractions of them are composed of pure meial and alloy. Every coin, therefore, whatever be its denomi- nation, always passes, in a common currency, for a specific weight of pure metal, though not named to the parties on the face of the coin, which is the principle that M. Say contends for. But he seems to think that it would have been better, if there had never been any other denomination than those of weight, which have gone into disuetude, except when the precious metals are subjects of trade, as in the practice of bankers and brokers, who use the scales for considerable and often for small amounts. M. Say moreover says : " If a house be valued at 20,000 francs, it is reck- oned to be equivalent to so many pieces of silver coin, of the weight of 5 grammes, with a mixture of i^^th alloy." Again : " The de- 220 PRICE NOT AN ATTRIBUTE OF MONEY AS SUCH. nomination of coin is useful only inasmucli as it designates the quantity of pure metal contained in the sum specified." M. Say was right, in the principle, that weight is the proper denomination of money; and in advocating it, he surrendered his other principle, that money, as such, can be high or low, dear or cheap. He doubtless asserted this other principle, on the assump- tion, that there is no difference between gold and silver as subjects and instruments of trade — an attainment which he seems never to have made, and the importance of which has been shown. Money is virtually — we might, perhaps, say absolutely — an inappreciable thing. It is unnecessary to know the worth of it, since all the world have agreed to use it as the medium of trade. When employed, the only question between the parties is — how much? what quantity? what weight? And when the parties have agreed, that is the price — of what? Of the thing exchanged for it — the agreement of the parties being the measure of value, and the quantity of money the expression of it, as well as the agent to consummate the arrangement, or the instrument of purchase. But the money has no price. There is not a thing on earth that can prize it ; much less can it prize itself, except in the exchange of its own varieties ; for that would be an absurdity. But the moment gold and silver, or paper representing them, come to be bought and sold, as subjects of trade, they occupy a different position, and are prized, like every other commodity, one kind with another. A note discounted at the bank, is bought as a subject of trade; while the discount is the price, the instrument, discharging the functions of money. The principal sum received by the drawer of the note, is also a subject of trade, in this transaction. But he goes away and buys corn with it, and then it is the instrument — money. He bought it to use as money ; but it did not come into his hands as money, but as a commodity in trade. The same is the case with all notes of hand, with use. They are sold, and the interest is the price. Bonds and mortgages, with use, occupy the same position. Bank-notes, above and below par, are bought and sold, and the broker's profit is the price. So the profit on bills of exchange is their price. The principal sums, or rates of valuation, in all these cases, are negotiated as commodities in trade ; and the premiums, or discounts, or the interest or profits, are the considera- tions asked and received, discharging the functions of money. It is the different forms and different values of money, and its value in use, which create a demand for it, and bring it into market as a PRICE NOT AN ATTRIBUTE OF MONEY AS SUCH. 221 subject of trade. If depreciated or above-par money is employed in trade, so as on that account to affect the prices of the commodi- ties for which it is exciianged, it is then itself a commodity in trade. Money, even as a subject of trade, has no price but that of its use, and that of differences of value, in different forms, or in other accidents of its existence. The first is always reckoned so much per centum, as 2, or -3, or 4, or G, or 10 per cent. This per-cent- age is the price, reckoned on the standard of weight, and not the sum total, as when it performs the offices of the instrument of trade. Then the whole sum is the price of the thing for which it is given in exchange. It is on this point that Professor Twiss is right in avowing that " money is not productive as an instrument of ex- change," or of trade. But when its use is sold, it is productive. Money, however, in different forms, and the same forms in dif- ferent places or circumstances, has different prices, on the common standard of weight. Legislation makes one of these differences, as, for example, the EngHsh sovereign is declared legal lender in the United States, at $4.84 ; but its statute valuation in England is only S4.44, which makes them subjects of trade in these two quar- ters, and tlie prices are based on the standard of weight, being not the principal sums, but arising out of these accidental differences. So of all moneys, metallic or other, being in market as subjects, to be bought and sold for use as instruments of trade, either their use on time, or their variations from a common standard, and not the principal sum, determine their prices. Whereas, when money is employed as the instrument of trade, in exchange for other com- modities, the entire sum given is the price, not of itself, but of the commodity. The price of all moneys bought for use, on time, commonly called borrowing, is its per-centage. We never find the price of money, as a subject of trade, to be the principal sum, in any case whatever; but it is either a consideration for its use on time, or a consideration growing out of some one or other of the varying accidents of its existence ; and all its prices are based on the standard of the scales, directly or indirectly, medi- ately or immediately. But money, as the instrument of trade, never has a price, its functions being to declare the prices of the things on which it acts, and to move them forward to their destina- tions — this declaration and this moving power being its proper and only functions. The only fundamental measure of money is the scales ; though, in the superstructure of a monetary system, many 222 PRICE NOT AN ATTRIBUTE OF MONEY AS SUCH. Other accidental measures are employed, for convenience, all hav- ing reference to this, and b6ing based upon it. To show that money, as a subject of trade, has no price, other than as above defined, observe, that a man, with one bar of gold or silver bullion, does not propose to exchange it for another bar of the same weight and purity. There is no motive. Nor does a person propose to exchange coins for others of the same denomi- nation and weight ; nor bank-notes for others of the same denom- inations and of the same bank ; nor any kind of money for another, where there is no foundation or reason for difference in value, and of consequent advantage to one of the parties, which advantage would be a foundation of price, or a motive for exchange. There is no motive to exchange an equal for an equal. It must be a dif- ference of some kind, to constitute the foundation of price in money. In purchasing the use of money on time, the principle of price is doubtless too obvious to require farther illustration ; and enough has already been said to show the different posi- tion and proper functions of money, as the instrument of trade, and that price, or what Mr. Twiss calls productiveness, does not belong to it in that case. Convenience requires a uniform rule, either that cheapness or dearness should be applied to money alone, or to the things of which it is the medium of exchange. Custom has applied them to the latter, and ordained money to express all their values. This office of money is a law made and obeyed by all the world, and there is no antagonist law. There is nothing else by consent or practice, that expresses the value of money as such. Ricardo, Smith, and others, by violating custom and the ordinances of uni- versal consent in this matter, have, we think, introduced confusion and darkness where order and light are needed, and plunged into an inextricable labyrinth. MONEY AS THE "TOOLS OF TRADE." 223 CHAPTER XV. MONEY AS THE "TOOLS OF TRADE." An Illustration of this Truth. — The Condit'on of a Nat'on. after selling its " Tools of Trade," the Same as that of a Mechatiic who does ihe same Thins. — Montesquieu's Doctrine on this Point. — The Emperor of Rn.^sia investing in French Stocks — Money but an incon- siderable Fraction of a Nation's Wealth. — To answer its Purposes, Money should be to a Nation as a fixed Capital — It is " Tools." — Haifa Set of " Tools" not as good a-s a per- fect Set — Money the necessary Means of a Nation's Wealth — The Amount requited by a Nation, depends on its Re.«ources and Capabilities. — The Charge of a Miser Spirit on Proiectionists consiilered. — Bad Economy to hoard up Money — The Commercial Revul- sions in the United States alwa_\e owing to the Want of Money as '■ Tools of Trade.'" — A Protective System necessary to lieep on hand " Tools" enough. — There has nevtr yet been Money enough in the United States for the Business of the People — Monej- makes the Mare go. — To have Money enouf=h. as '■ Tools of Trade," is Evidence of Private and Public Economy. — Ignorance the Parent of Free Trade in the United Slates. — The Precii'us Metals are to Society equivalent to a Law of Nature — Mr. Jaiobs on tleUses of the Precious Metals. — The Quantity of the Piecious Metals required fir the Trade of the United States. — The Commercial Troubles of this Country owing to unfortunate and fitful Changes in the Policy of the Government. Can a farmer till his grounds without a plough? Can a tailor make up his garments, without his shears and needle ? Can a waterman put forward his boat, without a paddle ; or a ship navi- gate the seas, without sails or steam ? Can any work, of any sort, be done, without the appropriate instruments? Money is as much the instrument of trade, as the plough is of agriculture, the tailor's needle of making garments, the oar of speeding the boat, or the sails or steam of navigation. But Smith, Say, Ricardo, M'Culloch, Tvviss, and their colaborers, tell us, in effect, that the plough is only a commodity, and the farmer may as well sell that as his corn ; that the needle is only a commodity, and the tailor may give his whole stock of tools for his dinner, without inconvenience ; that the waterman may barter his paddle for a fish, or the fisherman give his hook and line for bait, and both do as well without their tools as with ; that the weaver will suffer nothing in selling his loom and shuttle ; that the woodman may exchange his axe for a shirt, with- out harm to his occupation ; that the smith may part with his ham- mer for a saw, in an exchange with the carpenter, and both go on with their work ; that the shoemaker may exchange his kit of tools for a coat, and still work on with profit; in short, that all these things are mere commodities, and provided the parties have made a good 224 MONEY AS THE "TOOLS OF TRADE." speculation, as a trade, they have done well ; or if they have merely got an equivalent, in market values, they can not be losers. Such is the doctrine of Free Trade. But, money is a nation's '■'■Jc'u of tools ;'''' nothing more; nothing less. And yet these gentlemen say, it is no matter ; it is just as well ; the nation will not suffer the least inconvenience, if it parts with its " kit of tools,'''' and obtains, by the exchange, equivalent values. They say, in effect, that a shoemaker can still go on making shoes, and do as well as ever, if, by exchanging his kit, he gets other commodities of equivalent value. It is impossible to escape from this issue, on the premises of these gendemen. No one can deny that this is precisely the case which they have made. If it be said that a man ought to part with his " tools of trade," rather than not pay his debts, it is raising a new question, which is one of morality. We go farther back, and anticipate this question, in the position, that a man should be more prudent than to allow his " tools of trade" to become liable for his debts. This is pre- cisely the position we occupy on public economy. We hold, that money, enough for the demands of trade, is the " /oo/a' of trade" to a nation, and that its system of economy should be so adjusted and managed, as not to put its " tools" in the condition of liability for its debts. A nation can not hold on to its "tools," after they have become thus liable ; but they must go, till there is no more to go ; and then the efflux is barred by exhaustion. The doctrine of our opponents is, that a nation is none the worse off, is put to no incon- venience, by the loss of its "tools of trade." Is not this the case which they have made? If it be not, we know not what is. Montesquieu says: "A country which always exports less than it receives, maintains an equilibrium by impoverishing itself. It will continue to receive less, until it will have reached a state of extreme poverty, when it will cease to receive anything." Exactly in point comes the news, while we are writing this page, of the transaction of the emperor of Russia with the bank of France, in the purchase of 50,000,000 francs of its stocks, or nearly $10,000,000. It is understood — we believe it was openly avowed on the bourse at Paris — that the object of the French gov- ernment, in lending its intermediate offices, to obtain these stocks for the emperor, at the middle price, was to bring fifty millions of specie into France, which was pressingly required — France hav- ing parted with too much of her " tools of trade," and being threat- ened with commercial bankruptcy and financial ruin. It was to MONEY AS THE "TOOLS OF TRADE." 225 bring back these " tools ;" and the necessity of France, in this case, subjected her to some peril, as it will at any time be in the power of the emperor of Russia, by a coi/p-dr-mnin operation, sud- denly to throw these stocks into market, and create a panic, to the great injury of France. But "necessity knows no law." PVance wanted more "tools of trade," and must have them. If these stocks had heen sold in Paris, to Frenchmen, the price would not have come from abroad, to meet the exigency ; but, in selling them to the emperor of Russia, it brought 50,000,000 of francs directly into France, as so much addition to its "numeraire," or cash. But, according to Adam Smith and company, it was no misfortune to France to have wanted this amount of specie, nor any benefit to get it.* Because money will supply wants and gratify desires, by pro- curing the means, it is thence too naturally conchaded, that weakh consists in money ; it is true, that a given amount of money, in any one's possession, makes him a rich or wealthy man, according to the standard of wealth assumed. Nevertheless, money, though it may be the fortune of an individual, because it will supply his wants and gratify his desires, is not, in itself, any considerable part of the wealth of a community or of a state. If the annual product of the industry and labor of the people of the United States, be $2,000,000,000, as is supposed, that product is an exponent of their wealth ; and it is supposed, that not a penny of it consists in money. We do not produce money, to any extent worth naming. If it requires fifty millions of money to move such portions of diis product to their various destinations, as are not consumed on the premises where they are created, say a moiety of them, then the amount of money employed in moving these products to their des- tination, is as one fortieth of their amount. And if this product be to its sources and means, or to the capital of the country, as 6 to 100, the rate of interest, then the money of the country is only as -jLth of Tooths of the national capital — a fraction of the general wealth hardly worth naming. The position and functions of money, in this movement, are to the people, as the " tools of trade" to a man in any pursuit. As a man can not do his business without his tools, so neither can a peo- ple trade without money. Money, with a nation, is permanent, and • Since writing the above, the French revolution of February, 1848, has occur- red; but that inalves no difference with the areumenf. France was in want of specie at that time, under Louis Philippe, and this transaction was negotiated to obtain it. 15 226 MONEY AS THE "TOOLS OF TRADE." ought to be fixed capital, as the tools of a mechanic are. It occu- pies the same position in trade. If a mechanic has but half a set of tools, he can not work, except under great disadvantage. It is the same with a people, in regard to money : they want a complete set of tools, and will work very badly with half a set. And yet Free Trade says, it is no matter, whether you sell your tools, or your other commodities. That money is a fraction of the public wealth, a=i permanent cap- ital, occupying the position, and discharging the functions of tools, in creating and promoting general wealth, can not be denied ; but it is a small fraction ; in the strict sense, it can hardly be called wealth ; but is more properly the means of it. But, as it is the most essential element of wealth, in public economy, as a means, there is no harm in calling it by that name, so far as it goes, if its proper position and functions are understood. It is certain, there can be no wealth, in the sense of prosperity, without it. If fifty millions of active money capital are necessary to move all the sur- plus products of every point of the United States, to their destina- tion, anything less than that would be a check to the movement ; half of it would be a very serious ca'amity, and occasion universal distress. And yet Free Trade says, it is no matter : half is as good as the whole. Adam Smith, as shown in another place, undertook to prove, that the American colonies were very well off, when they had no money at all. Money itself is no farther wealth than as the means of producing it, and for the amount of the precious metals which it comprehends, they being in demand for other uses; and the money of a country, and of the world, as shown above, is but a small fraction of its wealth. It may happen that all of an individual's wealth is vested in money; but that of a nation can never be ; nor more than a small fraction. The amount of money which a nation requires, to effectuate the greatest amount of production in exchangeable values, and to cir- culate them so as to produce the greatest income, in other words, to move all surpluses to the best market, is a question of considera- ble importance. The European economists seem to agree, so far as we have observed, that a nation requires only money enough to circulate its exchangeable values which require movetnent in trade, to and fro, outward and inward. This doctrine is doubtless cor- rect; but their idea of the application of it, would not exactly suit us. They appear to assume a we plus ultra of demand, an ascer- MONEY AS THE "TOOLS OF TRADE." 227 tainable limit, from an existing state of tilings ; that is, that this state of things has nearly or quite exhausted its requirements or uses of money. This does not apply to the United vStates. We have never yet come in sight of the end to which an increase of money might not be profitably applied for the production of wealth', so inexhaustible are our resources ; nor has there ever been a time when it could be said there was too much money, or even enough, in. the country, so as to want use. The extravagant speculations of IS'^G— '7, are not in point; because they were not based on money ; but were mere bubbles, doomed to burst, for want of money as a foundation. A system of public economy, therefore, adapted to the state of things found in Europe, limiting the uses of money, and thus limiting the amount required, maybe very ill adapted to the United States, where the uses for money are comparatively without limit. The " kit of tools*' for the trade and commerce of Europe, might be very complete, under a system, which would leave ours very incomplete. It is for us to judge what we want, and for them to judge what they want. It is evident that European economists had no idea of the state of things here, in this particular. When was there a time, that this nation, or any part of it, or any party or person in it, could not have done more in the production of wealth, if they had had more money to do it with ? We want, then, a sys- tem of public economy, which shall not only tend to keep in the country what is commonly reckoned enough of money, to carry on its trade and commerce ; but we want a system that shall tend to increase that amount, as far as may be, in a degree, commensurate with the development of the means for its profitable use. As yet, it has never been so. It is unfair, and shows a want of candor, when Smith, Say, Ri- cardo, M'Culloch, and others of that school, while enercial nation to part with all its cash, when Free Trade draws it away. They do not consider that money is the moving pov/CF ; but seetft to take pleas- ure in behoving a bard thing, holding it for true, not because the truth is apparent, but occult- — taking pride in a doctrine because a miracle only could verify h. Their own importance is magnified (m\y by their extrava;ga»ce, a-nd by the extent to- which it is carried- Still, every sober man UMSt see that oioney is power — pov/er with a man and i>ovver with a nation — and that every man and every nation, without money, and being unable to command it, is power- less. This truth is directly opposed to a fundamental proposition of the Free-Trade doctors, Smiih and others, that money occupies- the same position in trade with that of the commodities for which it is exchanged — is itself no raore than a commodity in trade — and that, therefore, it is no n>atfer in trade, which goes and which comes, that or any other commodity. When a doctrine like this, is permitted to enter practically into a system of private- or public economy, as an element, a leaven, pervading the whole, it is surely no wonder if the affairs of such a system, private or public, come to a very bad resuh. Nothing but extraordinary good luck could prevent it, and that onJy for a lucky seasoa. The doctrine, "j;er se," is ruinous. The pecuHar and exclusive position which gold and silver, as money, occupy in the worid — a very important and potent one — is that they are universally recognised as a common currency in MONEY AS THE "TOOLS OF TRADE." 231 trade or commercial exchanges, and are therefore indispensable as far as those exchanges may require. No other commodity of the world occupies this position, or discharges these functions ; and consequently, whenever money is wanting, in a greater or less degree, trade must be embarrassed. The doctrine of the Free- Trade theorists, therefore, is utterly false — false in principle, and ruinous in its application. Here is the origin of the difficulty which has led to so many calamitous results in the United States. The superficial thifikers among us, statesmen and others, who have adopted and advocated this doctrine, have never gone down to the bottom, nor back to its origin ; but they have received the dogma ex aslJiedra, and propagated it, without understanding it. There are certain clap-trap bubbles, floating on the surface, which reflect beautiful colors, and seem very captivating ; and these are the only objects which the common teachers of Free Trade see, and to which they direct the attention of the public ; but they never dive down, nor take the trouble of angJing, to fish up that which swims in the deep sea. It is not too much to aver, that they neither know what they say, nor whereof they affirm; and that their triumph — «o far as they have had any — is the triumph of ignorance. They have yet to learn, scientifically, the first principles of economy; for it is nothing more nor less tlian a question of economy. If they had understood the fundamental doctrine of their masters, why did they not begin there ? They have never mentioned it, and probably never thought of it. It is the doctrine that money and a piece of cloth are the same thing ; that they occupy the same position, and that there is no difference between them, in their influence on the operation of commercial exchanges; and that it is of no consequence, whether we have one and none of the other, or much of one and little of the other. Had our own Free-Trade statesmen, and other of our teachers of this school, begun here, and thought upon it as much as the importance of the subject demands, it is possible they might have been startled. But they have adopted a faith without scrutiny, and attempted to propagate it without knowing what it is ; and we can hardly expect the com- pliment of an acknowledgment from them, if their eyes should chance to fail upon these pages, that we have told them what they never knew before, though, peradventure, it might be true. We will, however, venture to say, that they will agree with us so far, that money is the great power o^ the world, and that the party which has none of it is weak. They will, moreover, admit that 232 MONEY AS THE "TOOLS OF TRADE." there is such a practical virtue as economy, in contriving to have money for necessary uses. We do not wish thera to admit any more ; for in this admission, they have abandoned both the ground and the principle of Free Trade. A system of public economy, contrived to retain in the United States money enough for its neces- sary purposes, would be a protective system. And no one, surely, will pretend that our trade can go on well, when there is not money enough in the country to keep it a going. We do not want a better rule of public economy on this point, than M. Say himself has given against himself, that is, against his leading doctrine, in the following words: " The use of gold and silver in the peculiar character of money is proportionate to the quantity of moveable and immoveable objects of property that there may be to be circulated ;" that is, transferred in sale, as *' immoveable objects" can not be " circulated." In this proposition is recognised, first, money as the instrument of trade, in its " pe- culiar character," M. Say's j>eci/li(rr mode of expression ; and next, that the " proportion" required, in any nation, must be suf- ficient to accomplish the exchanges, without embarrassment for want of it. This is precisely the doctrine we hold to. M. Say also admits that "money is the vehicle of value. Its only use is to convey into your hands the value of the produce, which the purchaser of your goods has sold in order to purchase them ; and to convey, in return, into his hands, the value of the produce, which you have already sold to others." Again : " The com- modity employed as the material of money, is the agent of ex- chanti^e." Could anything be more explicit, more clear, or more to the point of our argument, that money is the " tools" of trade ? It is not less remarkable that we find even Professor Twiss just where he should be on this point : " The money of a country," he says, " will be that part of its capital which is exclusively em- ployed in facilitating the exchange of other portions of its capital, just as the loom of the weaver, or the saw of the carpenter, are portions of the capital of a nation, employed in facilitating tne production of clothes and dwellings;" and yet Professor Twiss maintains that it is no harm to sell these tools. M. De Boisguillebert, a French economist under Louis XIV., proscribed by that prince for his opinions, said : " Wealth consists in the continual exchange of the surplus which one individual possesses, for the surplus which another possesses ; and the moment the means [money] of effecting this exchange are wanting, a conn- MONEY AS THE "TOOLS OF TRADE." 233 try becomes distressed in the midst of abundance." And Profes- sor Twiss says of this very writer, that "De Boisguillebert had a clear appreciation of the distinction in the separate employment of silver, as money, and as a commodity, and that, when it was em- ployed as money, it was not employed productively, and the reverse when employed as a commodity." Again says Mr. Twiss: " The money of an individual is part of his circulating capital, and he can only derive a revenue from it by parting with it ; but the money of a society has more the char- acter of a fixed capital, as a greater revenue accrues to a society from its use as an instrument for facilitating exchanges at home, than from exchanging it as an article of commerce with foreign countries. For instance, the first division of articles in which capital is fixed, according to Adam Smith, consists of 'all useful machines and instruments of trade, which facilitate and abridge labor.' Now money is most useful lo a nation as an instrument for facilitating exchanges, and abridging the tedious operations of barter ; and as, by such exchanges, the production of national revenue is indirectly stimulated, and the result is an augmentation of produce, it seems, in its character of money, to be rather a por- tion of the fixed capital of a country ; more particularly as the waste of it requires to be made good from the circulating capital." It is admitted, that money is not wanted for any other purpose but trade, and that it would be a waste to have more than this ob- ject requires; but this is a very important object. It is vital to a system of public economy, and depends on measures of public pol- icy. As every private person, engaged in trade, is obliged to take care that he has money enough in hand or at command, for his pur- poses, so is it equally necessary that a nation should use this care. Neither can afford Free Trade. The farmer must keep up his fences; and every person must defend the rights of his position, commercially, in relation to all the world around him, or he will be defrauded and cheated at all points. No one should spend more than he can afford. It is equally necessary for nations to guard their commercial rights, and be economical, as for individuals. Every nation stands in similar relations to other nations, commer- cially, as do individuals to those about them. If either should cease to exercise, or relax their care, in these respects, their rights would instantly be invaded, and they would suffer injury. Free Trade is preposterous. Mr. .Jacobs says : " It may be observed, that the world is very 234 MONEY AS THE "TOOLS OF TRADE." little really richer or poorer, from the portion of metallic wealth that may be distributed over its surface. . . The only benefit to the world in general, from the increase of these metals, is, that it acts as a stimulus to industry." The first of these remarks is very sensible, natural, and in one sense true, though it needs explanation; but, as much as we respect Mr. Jacobs, and feel obliged to him, for his incomparable work on the history of the precious metals, we must say, that the second is somewhat in the dark, though we acknowledge there was a founda- tion even for that. What he doubtless means by the first remark, is true, viz., that the wealth of society does not so much consist in the precious metals, and in money, reckoning their actual amount, as is commonly supposed. He says elsewhere, that " the gold and silver of a country can scarcely amount to one hundredth part of its wealth." We go even farther than that. But though money is but a small fraction of the wealth of a country, so small that it is hardly worth counting, for its comparative amount, yet it occupies a very important position as the "tools" of its trade; and those portions of the precious metals which are appropriated to other pur- poses, being generally three or four to one of the money, occupy a still more important position as thefovndation of the value of money. These two considerations impart to the precious metals, in all their forms, a high, even a momentous importance. They seem to be as much a Providential provision for man, and for the necessities of society, as the laws of nature, and it is hardly too much to say, that they do in fact constitute one of those laws. They certainly grow out of them, and their uses have that foundation. Gravitation has no more power over its own sphere, than the precious metals have in theirs, and is scarcely more beneficent in its domain, than the latter. Man can no more dispense with the precious metals, than creation can with one of its great laws. We hold, therefore, that the second remark above cited from Mr. Jacobs, is derogatory to the precious metals, and detracts not less from their importance, than from the dignity of their position in the social state. We think we clearly see the light, or rather the darkness, in which he stood, when he made it. It is no dero- gation from his merit as an indefatigable and successful investigator in the line of his pursuit, to suppose, that he could not make every acquisition possible to man, and that he had not well considered the ground he occupied in this remark, or the things which it com- prehended. If, by " a stimulus to industry," he meant only the art MONEY AS THE "TOOLS OF TRADE." 235 and labor bestowed on those portions of the precious metals which are appropriated to other uses than that of money, as is quite prob- able he did, judging from his Free-Trade views, he has certainly circumscribed himself to a very narrow field — not narrow in itself, for it is a broad one — but narrow as compared with that which he did not survey, and which is by far the richest and most important, yiz., the sway which gold and silver wield over human affairs, and over the destiny of man, as the instrument or "tools of trade." If he had seen and appreciated this, it is not conceivable, that he could have made so derogatory a remark, "The only benefit," &c. Like all the Free-Trade economists, Mr. Jacobs says: "Gold and silver" — we cite his own words — " are merely commodities;" and like them, we understand him as holding to the doctrine of equivalents in exchanges. And yet he says : " During the whole of this reign, [of Henry VII.,] trade had increased both in imports and exports ; and as the latter regularly exceeded the former, a great increase in the deposite of the precious metals, either in the form of coin or of bullion, must have taken place in this kingdom." Here, in the first place, he has granted all we ask, on the question of the balance of trade, in recording an historical fact ; but how, as a Free-Trade economist, asserting that money occupies the same position as other commodities in trade, is "merely a commodity," and that in all trade the exchanges are equivalents, he could make the exports exceed the imports, is more than we can see. It has already been seen, in the current of our argument, that, in consideration of the undeveloped resources of this country, of the enterprise of its population, and of the high value which money has always sustained here, as compared with its value in Europe and other foreign parts, it is scarcely possible for us to have too much of it. It is generally supposed, that eighty millions of cash, or specie, is necessary for our domestic exchanges and common busi- ness purposes. This is used many times over, and some portions of it may pass through hundreds of hands, in the course of a year.* It has been estimated that more than four hundred millions of dol- lars are annually required for the movements of the domestic trade of the country alone. Eighty millions of specie, therefore, * Since writing this chapter, we have been told of a case of fact, well certified, in which a man, with $1,000 capital, traded to the amount of $100,000 in twelve months. Is not money the " tools" of trade ? Without this cash, none of this business could have been done. How emphatically does this fact illustrate the im- portance of cash to a nation, and the misfortune, the incalculable disadvantage, of having too little — of having it drawn away by Free Trade to foreign parts. 230 MONEY AS THE "TOOLS OF TRADE. as the basis of a currency required by all the business and trade of the country — more especially as a large fraction of this, perhaps nearly a moiety, is itself a part of the currency — may be consid- ered a sniall enough supply for all demands. Prooably one hun- dred millions, for present population and business, in an ordinary state of things, would be more convenient. There is no use in having more cash in the country than its business or trade requires, as more would be idle. But that amount is important — is indis- pensable for the convenience and prosperity of the people. Its chief function is to constitute the basis of the currency, the bulk of which is always paper in a civilized, active, commercial commu- nity. But the cash, or specie, must be in the country, in abeyance to demand ; else the currency is unsound, being irredeemable. Nothing but the protective policy can keep the necessary amount of specie in the country. This is evident from what is elsewhere proved. " History is prophecy." The past proves what the future will be. There never was a time of no duties, as under the confederation ; or of low duties, as for the few years previous to the tariff of 1S24, and previous to that of 1842 ; when the specie did not leave the country, and the currency break down. The reason is, that low or anti-protective duties always run the country in debt to foreign parts, by buying more than is sold ; and no for- eign balances against the country can be settled, except by cash, weighed in the scales. Consequently, the specie is required, and must go ; and unless the banks suspend, to stop it, it must continue to go, till these balances are setded. One hundred millions of bal- ances of this kind against us, would at any time drain the country of a sufficient amount of specie, to distress and embarrass it ; and without an extension of credit, it would probably take all the specie. But the commercial history of the country demonstrates, that a short period of low, anti-protective duties, will run up more than a hun- dred millions of balances against us. That is the reason, and the sole reason, of all the currency troubles of the country, in times past.* • Such was the distressing eflfeet of the absence of specie from the country, or of the want of "tools'' of trade, in consequence of low duties, just before the tariff of 1842 came to the rescue, that in some parts of the interior of Pennsyl- vania, the people were obliged to divide bank-notes into halves, quarters, eighths, and so on, and agree, from necessity, lo use them as money. In Ohio, with all her abundance, it was hard to get money to pay taxes. The sheriff of Muskingum county, as stated by the Guernsey Times, sold at auction one fonr-horse wagon, at $5.50; 10 hogs, at 6| cents each ; 2 horses (said to be worth from $50 to $75 each), at $2 each ; two cows, at $1 each ; a barrel of sugar, for $1.50 ; and a " Store of goods" at that rate. In Pike county, Missouri, as stated by the Hannibal Journal, MONEY AS THE "TOOLS OF TRADE." 237 A man of business, in a sound state, as to his own private finan- ces, can not fail, if he should try, so long as lie does not buy more than he sells. It is the same with a nation. Having once in its bosom cash enough for its business, or trade, domestic and foreign, it will always have enough, till it begins to buy of foreign parts more than it sells to them, take the foreign trade as a whole. Then the cash must go, to settle balances, whatever be the amount. If they be equal to half of the specie in the country, then half of it must go ; if equal to the whole, the whole must go ; or the debts must be protested, or be arranged ; in any case, if the whole does not go, the debts must remain unpaid. The foreign debts of the United States are probably at this mo- ment more than three times as much as the amount of specie in the whole country ; and they were all created in limes of low duties, and by reason of them. But those which were not settled by pri- vate bankruptcy and state repudiation, thus returning home from inability or bad faith, have been arranged, and the nation pays, through the debtors, from twelve to fifteen millions annually, in the shape of interest, with the principal hanging over its head. It is so much foreign debt against the country; and if justice be done, the interest must always be paid.* the sheriff sold 3 horses, at $1.50 each; 1 lars:e ox, at 12| cents; 5 cows, 2 steers, and 1 calf, the lot, at $3.25; 20 sheep, at 13| cents each ; 24 hogs, the lot, at 25 cents ; 1 ei2;ht-day clock, at $2.50 ; a lot of tobacco, 7 or 8 hogsheads, at $5 ; 3 •stacks of hay, at 25 cents each ; and 1 stack of fodder, at 25 cents. This is but an epitome of the general state of the country at that time, arising from this cause, though some parts suffered more than others, as those above named. •After the bank of the United States was wound up, as a national institution, by the refusal of a new charter, the slates were stimulated, by the action of the federal executive, to the creation of a host of banks without a specie basis, and to extravagant expenditures for internal improvements. From 1820 to 1830, during the existence and action of the national bank, only 22 state banks were erected, with an aggregate capital of only $8,000,000; whereas, between 1830 and 1840, 392 banks, or 571, including branches, sprang into existence, with a nominal cap- ital of $213,000,000. (See House Document lll,2dSess. 26th Consress.) Alarge portion of these banks, being unnaturally forced into being, without any solid foun- dation, failed of course, in the commercial revulsion that followed. The history of the state debts shows, that from 1820 to 1825, the increase of state bonds was $12,000,000; from 1825 to ]830, the increase was $13,000,000; from 1830 to 1835, when this unnatural stimulant began to operate, the increase sud- denly rose to $40,000,000; and from 1835 to 1840, it was $109,000,000, nearly the whole of which was issued in 1835 and 1836, before the destruction of general credit. The imports of 1836, tempted by the same seductive influences, under a system of low and falling duties, were $61,000,000 in excess of the exports; and the home speculations and adventures, prompted by this cause, were on the same scale of extrnvagance. All these state debts, or nearly all, went abroad to satisfy the commercial balances, which were heaping up against the country. 238 MONEY AS THE "TOOLS OF TRADE." But the nation has never run in debt to foreign parts, under the existence and action of a protective policy ; and it has never paid any foreign debts except by that policy. Such are the facts. It is not intended to say, that no foreign engagements have ever been met, under a system of low, anti-protective duties ; but only, that foreign engagements, in the aggregate, have never been liquidated, but always increased, under that system ; and that the aggregate has only been lessened, and credit revived only, under the action of a system of protective duties. Moreover, the currency can never fail, will always be sufficient,\ and can never be unsound, under an adequate system of protective/ duties. Nothing more is meant here by the term, (ideqiiate, than that the system shall be strong enough to prevent foreign commer- cial balances accumulating against the country ; and it is supposed, that a tariff based on the principles of that of 1842, and as a whole equally protective, will be sufficient. It is also supposed, that the le^nslation for the reo;ulation of the currency, shall be ordinarily prudent and effective. A bank, here and there, might fail, from mismanai,rement, or other cause ; but such an event, rarely occur- ring, coidd no more disturb or impair the general system, than the failure of a merchant, in the city of New York, could shake the commercial fabric of this great emporium. So long as no foreign commercial balances are accumulating against the country, the spe- cie in it would remain as the basis of the circulating medium, and a part of it. And the small balances in favor of the country, annu- ally accruing, as under the tariff of 1842, showing that the country is selling more than it buys, would gradually enlarge and fortify the basis and body of the currency. It could neither (tiil, nor be insufficient, nor unsound, any more than a private individual could fail, who has once started strong, and never buys more than he sells, but always sells more than he buys. All the money, and more too, would be in the country — would always be here; and therefore the currency would always be sound, and must remain so. All the talk about overtrading, and about the alternate inflations and con- , tractions of the currency, has arisen entirely from, and only applies to, a state of things, which the want of a protective system brings about. As to inflations and contractions of the currency, they are all produced by changes in the policy of government. Banking is tradinsr in money, and the same principle of self-preservation con- trols this branch of trade, as all others. It will not commit suicide. MONEY AS THE " TOOLS OF TRADE." 239 as would be the case, by a voluntary sacrifice of the confidence of the public. Nor will it voluntarily do an injury to that public, on whose prosperity it depends for all its profits of business. It would be absurd to suppose it, because it is a moral impossibility. It is only the irresistible pressure of a superior power, that of govern- ment, which leads to such results as sudden and violent contractions and expansions of bank issues. It is true, indeed, that this view of this subject, presents quite a different aspect to that portion of our history, from 1830 to 1S40, when compared with that which was forced upon the public at the time, by men in power, who charged all the fault of those expan- sions and sudden contractions of the currency to the banks. It was the fault of the government exclusively, consisting in the fitful fluctuations of its policy, and in having adopted a plan of Free Trade. The banks accommodated the people when and as far as they could. That was called an inflation or expansion of the cur- rency ; but when the government, by its policy, forced them to diminish their discounts and issues, which crippled business and trade, that was called contraction. All the currency troubles of the country, all bank suspensions,^"^ all bank troubles of a serious nature to the wide community, all / insufficiency and unsoundness of the circulating medium, and such V like, have occurred only in the absence of a protective policy of ) the government over the commercial interests of the people. Such I is hisfonj. It is, therefore, fair to say, that these troubles come m \ consrfjiteiice of such defect. If it had been only once, or twice, or three times, the evidence would be less strong. But it has been maiiy times, without a single excejitioti to the rule. k 240 PAPER-MONEY AND BANKING. CHAPTER XVI. PAPER-MONEY AND BANKING. Tlie Principle of Credit — The United States built ap by Credit. — Gold and Silver a Credit Currency. — la Bank-paper Money? — The Invention of Paper-Money a great Advance in Civilization — Facts to illustrate its Economy and NerCf^sity — It greatly augments the Facilities, Scope, and Powers of Commerce. — Facts and Authorities to this Point. — Banking the Instrument of Papor-Moiiey — The American System of Banking — Pria- ciples and Benefits of Banking. — Adam Smith's Doctiiiie that Paper-Money banishes Specie, not applicable to the United States — The Piecious Metals the only found Basis of Banking — Tl)e visionaiy and unsettled 0[)inioi.8 of European, paiticularly Biiti.sh Economists, as to the Basis of Banking.— Sir Robert Peel right at last in his Bill of 1844. A Government Bank necessarily in a false Position. — The Subtreasury a Government gank. Treasury-Notes are Post-Notes. — All the Functions of the Treasury, by making it a Government Bank, merged in that Bank — The Eifecta Danger, and Power of this Institution — It subverts the Banking System of the Country — The Instincts and Propen- sity of the Federal Government for Banking, as illustrated in the Subireasury. As we are now approaching that department of the monetary- system, which has much to do with the principle of credit or faith, it may be well to say a few words on this great bond of the social state. Endeavors have been made to scandalize credit, by represent- ing it as synonymous with failh reposed in false pretences ; and on the basis of this assumption, a theory has been set up, that credit is a vice, and ought not to be tolerated. This doctrine was first promulgated from the most eminent civil position in the land ; and the unearthly scream, the barbarian whoop of a servile minion, to the great affright of men less mad, sitting in grave assembly in the halls of legislation, gave out the word, " Perish credit !" This is a libel on humanity, and on virtue. The great benefit and blessing of Christian civilization, is the increase and strengthening of faith amono- men ; and not the least important ramification of this virtue, is commercial credit. Tiiere may be too little ; it is impossible there should be too much of it. Its prevalence and growth are proof of a sound state of public morality. It was by credit, or a sound state of public morality — which is the same thing — that the United States rose from their small be- ginning to their present magnitude. Commercial credit was one of the most important elements of society during our colonial his- tory ; for there was very little money. Public faith of this very kind, was the great secret of our success in the revolutionary war ; PAPER-MONEY AND BANKING. 241 for money which we had not, or credit which h the same thin<^, is the sinews of war. It was commercial integrity which carried the nation through ihe years of the confederation ; for there was no money to begin with, and we were constantly running in debt. On the verge of dissolution as a political body, on account of commer- cial embarrassments, it was credit that saved -us at the time of the adoption of the federal constitution. It was the revival of credit by the establishtuent of a national bank in 1791 , that gave us a new start ; but there was very little money in the country. It was the vital power of the credit of that institution, which carried the nation onward in a career of prosperity for twenty years; and in the mean- time, state banks arose in various parts of the country, apparently diffusino: a beneficent influence. But the war of 1812, and the non-existence of a national bank for four or five years, brought us into commercial troubles again. But credit came to our aid, a new national bank was chartered in 1816 for twenty years more, and but for the want of an adequate protective system for a few years previous to the tariff of 1824, which sent the specie out of the country, there would have been uninterrupted prosperity. It was credit that carried the nation throut>h that trial, and raised it ao;ain to unexampled commercial vigor, under the tariff of 1824, and on- ward, till the low duties of the last years of the compromise tariff of 1833, again drew off the precious metals, and doomed the nation to start again on credit. From the beginning of our history, down to this time, credit has been the soul, and the great power of the nation ; and no people on earth are more indebted to this virtue. There must always be a substantial ground for credit; or else it ^ can not flourish. Thal_grojiiid is public virtue — moral integrity.!^ It hardly need be said, that all public measures which nourish credit, secure its foundations, surround it with safeguards, and build it up a glorious temple, in any community, constitute one of the most important and effective elements of public economy. We proceed to observe, that gold and silver, used as money, officiate in two representative capacities, one representing the joint values of these metals in all the uses to which they are applied ; and the other representing every species of property of a commer- cial value, in its character as the recognised currency of the world, in the way of expressing that value, and in consummating commer- cial exchanges. It is the first of these representative functions which we have occasion now to notice, for the purpose of reviving a statement before made, viz., that gold and silver, used as money, 10 242 PAPER-MONEY AND BANKING. are a mere credit currency, representing all the values arising from the great variety of their uses ; and their credit is based upon these values, their value as money being but a fraction of the whole, itself borrowed from these other values. It is certain, as before shown, that they never would have been used as money, but for their other values; and therefore, as money, their credit may be said to be based entirely upon them. Our object in making this idea prominent here, is to show, that money, in all forms and substances, is a credit currency, and de- rives its credit from considerations extraneous to itself. There is, however, a substantial advantage in favor of gold and silver, as money, arif; /mmlnd jx-r ant. in favor of Europe against the United States, in these two things as produ- cing powers in both quarters. It is convenient to represent these two agents as the common producing powers in combination all the world over, inasmuch as money is the representative of every other species of capital as a common currency for them all; and inasmuch as money and labor are the agents usually brought together for purposes of production. It will be seen, therefore, on these premises, as before shown, that the producing powers of Europe are at least two to one in force — they are in fact greater — against the producing powers of the Uni- ted States, because they cost only half as much. Suppose two merchants side by side in New York, or in any other city or place, trading in the same articles, and that these arti- cles cost one of them twice as much as they cost the other. Which has the best chance in open and free competition ? Which will beat? Which will fall before t!ie other? It is plain enough, that the one whose articles cost twice as much as those of the other, must shut up shop. He could not stand, even though the differ- ence in the cost of his articles be less than 100 per cent. ; though it be 50 ; though it be 25 ; though it be 10 ; though it be 5 per cent. If there be a vigorous and determined competition, he might fall, and be driven out of the market, with a difference of 2 or 1 per cent. ; or even of one half-cent per cent. Such is the force and effect of competition between private persons in the same mar- ket ; and such precisely is the force and effect of competition be- tween commercial nations, the aggregate of whose trade with each other is always made up of private and independent transactions, THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 305 as in the case above supposed. That party will always beat, which can afford to sell cheapest, by reason of a less cost of the articles broufrht into market. Thus, from the operation of an infallible commercial principle, which never varies in its results, and which can not lead to error, the producing powers of Europe, which cost one, must inevitably, on a platform of Free Trade, overwhelm the producing powers of the United Stales, which cost two, and drive the latter from the market that is open to both on the same terms, except as the latter should consent to trade at ruinous prices. In either case it would be ruinous. The importance of anticipating our opponents, whenever this point is presented, must be our apology for repeating here, as we not unfrequently have occasion to do, that we are aware this argu- ment may be seized upon as an admission, that Free Trade would cheapen articles to consumers, and that Protection enhances prices. But we have shown elsewhere, as often remarked, that, while the above argument is sound and irrefragable, this conclusion does not follow; and that European and other foreign factors, once admitted to our market on ihe principles of Free Trade, always raise prices above what they are under a system of Protection, as soon as they get possession of the market by driving Americans out. Wliile it is true, that without Protection, they are able to break Americans down, it is not true, that having broken them down, they will con- tinue to sell cheaper; but they invariably demand and realize higher prices than those which prevail under a protective system ; so that t4ie evils of Free Trade to this country are threefold: First, by destroying a part of the business of the people and preventing its increase ; next, by raising the prices of the articles, the domestic production of which has been suppressed or prevented ; and third- ly, by banishing specie, to the amount paid for them, from the country, which would otherwise be retained as a part of our do- mestic wealth, to be used as "tools of trade" for the augmentation of wealth. This last evil may be greater or less. It may be suffi- cient to bankrupt the whole country, and has several times done so, as is shown elsewhere in this work. We proceed to consider how the rule of protection is to be ascertained, and on what principle it should be graduated. At first sight, it might perhaps seem that it should be graduated by the difference in the cost of money and of labor in the United States 20 306 THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. and other parts, that is, one hundred per cent, or more. But when it is considered that the chief aim of European and other forei"-n o-overnments, in robbing their laboring classes of an average of two thirds of the wages which they are justly entitled to receive, as a freedom value, is to appropriate it to their own use and bene- fit ; or rather, that society in those quarters is constituted with the desi"-n of having this two thirds of the fair wages of labor absorbed by the government and higher classes; it will then be seen that the object of this deprivation of the rights of labor would be subverted, and that these unjust governments would gain no advantage to them- selves, if they were to employ all this power, that is all the differ- ence in the cost of money and labor between them and such a coun- try as the United States, in the struggles of commercial competi- tion. They can not afford it in their state of society. But hav- ing the power always in their hands, to use such a portion of this difference as may be necessary to bear most effectually on the weak and vulnerable points of free states, that is, such points as are not protected, and on those interests which are of most impor- tance to themselves, they will of course select those points of at- tack on which to make, in the way of competition, such sacrifices as policy may dictate, and by which they can accomplish the most with a given amount of this species of negative expenditure, in the expectation of being indemnified by profits accruing from high prices, after competition may have been subdued for want of ade- quate protection in the country or countries with which they are carrying on this commercial warfare. They know too well how to economize such transient sacrifices, in order to attain their objects. For example: Tt need not be said, that the manufacture of cot- ton in Great Britain, is to her a thing of vital and supreme impor- tance. Before she had a rival in us, she taxed the raw material heavily. From 1S09 to 1814, her duty on the imports of raw cotton was 255. Gd. per cwt., or 5^ cents a pound, almost equal to its present price. But from 1815 to 1819, after we began to man- ufacture cotton, down came the duty to 85. 6(L per cwt., or nearly 2 cents a pound. At last it got down to /g of a penny ; and in 1845 it was found necessary to remove it altogether. This was a sacrifice to her revenue; but it was necessary to retain her ascen- dency against the competition in the manufacture of this article in the United States and elsewhere. She let in raw cotton free in order to protect herself and her manufacturers — which has been mis- THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 307 named Free Trade. In the same manner, all the abatements in her tariff of duties on imports, under the administration of Sir Rob- ert Peel, as shown in note, pp. 11], 112, without a single exception, together with the abolition of the corn-laws, were made on the principle of protection, and for purposes of protection ; and tiiey are called Free Trade. It was to maintain her commercial posi- tion in relation to competitors in other countries, that she made these sacrifices of revenue — which, however, were very trivial, and were more than made up in the increase of revenue from du- ties on other articles. (See note above referred to.) All other applications of this principle may easily be understood by the above illustrations, as these are directly in point. Those governments which oppress labor by depriving it of reward, and by merely granting it subsistence, do not expend all the power they acquire by this means in commercial competition with free states for the purpose of gaining the same advantage over labor in such fcii-eign parts. A small fraction of this power skilfully applied, will answer all their purposes, as the examples above referred to, in the action of the British government, will show. But it may be observed that the amount or measure of protec- tion required in a stale or nation that is acting on the defensive, in order to secure the rights of its laboring classes against such at- tacks, must exceed very much the amount or measure of sacrifice that is made by the assailing party, inasmuch as it may be pre- sumed that the first sacrifices made by such a party, are but a small part of that which it can afford to make, and will make, since it has begun the contest, if necessary to success. In the United States, it is absolutely necessary that our public men, our states- men, who legislate on these and other matters, should thoroughly understand this subject, and that they should be able to see, with unerring certainty, what measure of protection may be required for any particular article, and for all articles, against these attacks; and they ought to know — they will be liable to the greatest mistakes if they do not know — that the abolition of a duty in a foreign state may be as much a measure of protection as is the imposition of duties for that express object, as in the case of all the abate- ments and abolition of duties which have recently taken place in the tariff of Great Britain. The sacrifices made in such cases, are not positive, but negative, for a reversion of benefits. It is merely a transient reduction of the taxes on labor at home, for the sake of obtaining a stronger hold on labor abroad, in the expectation of 308 THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. a return, not only of the principal, but of compound interest, or it may be interest equal to a geometrical ratio. The ignorance of these facts and principles, which, for some twenty years past, with little interruption, lias been demonstrated by those who have chiefly controlled the legislation of the United States on this point of public policy, is not more amazing than alarming. To call it ignorance, is niost charitable. Otherwise, their influence and acts would be in the highest degree criminal. They evince that they have borrowed their theory of public econ- omy from foreign parts and foreign schools ; that they have re- ceived their lessons from the enemies of the country ; and that they are utterly incapable of understanding the subject. This is not saying too much, for their reasonings and arguments prove it. Presidential messages, United States treasury reports, such as those of December, 1845, '6, and '7, and other public documents, have been constructed on these borrowed and fallacious arguments, and legislation, the most momentous and most unfortunate, has been made to conform to this false theory, so fatal to the interests of American labor and of the i\merican people. But there are domestic considerations in the United States which should enter into the graduat'on of the rule of protection, in addition to those arisino^ out of the difference between the cost of money and labor in this country, and their cost in those countries with which we trade. A country where labor is free and inde- pendent, and realizes a fair compensation as a consequence of its independence, possesses inherent advantages over countries where labor is not free, other things being equal. Take for example the free and slave states of this Union. The great secret of the differ- ence in prosperity in the free and slave states, consists more in the fact that labor is free in one and not in the other, than in any or all other causes ; and the slave states would probably soon be driven to universal emancipation, from interest, but for the monopoly of southern staples, in the raising of which northern free labor can never come in competition. Men who are their own property, who work for themselves, and whose fortunes are of their own creation, with the exisdng chances before them of rising in the world, and becoming men of estate, of wealth, and of influence, are a very diflferent sort of moral and physical machine, from men who know they are not their own, and who always feel that they are working: for masters, and not for themselves. With the former, labor is a pleasure ; with the latter, it is a task. The freeman THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 309 works for reward ; the slave because he is driven to it ; and the difference in the results, as to their commercial values, is as great as in their feelings and motives. There is very little difference in the position and character of the labor of European nations, as to its pliysical effectiveness resulting from moral incentives, and that of slave labor in the United States. Both are forced, and both are about equally well provided for, that is, furnished with a subsistence designed to keep them in the best working order. All slave labor in the United States, which is not applied to the production of what are commonly called slave-grown staples, stands more in need of the protection of a national policy, so far as the interest of masters is concerned, than free labor, because slave la- bor is more costly than either its foreign or domestic competitor, when regarded in connexion with the comparative amount of its product The foreign competitor, called free, has to raise itself till fit to work ; gets only a bare subsistence while it can work; and when it can work no longer, it is cast off to perish ; whereas, slave labor is always a cost : a cost in raising, a cost in sickness, a cost after it has done working ; and its product, while working, is greatly less, because it wants the motive of working for itself. And it has already been proved by experience that slave labor is generally obliged to retire before American free labor, when both are en- gaged in producing tlie same things. If, therefore, American free labor requires protection against foreign pauper labor, much more does Atnerican slave labor require it, for the interest of its owners. The labof of the ox and that of a slave occupy the same position in public economy ; but the latter is less able to stand against competition. Adam Smith says : " The experience of all ages and nations, I Relieve, demonstrates that work done by slaves, though it appears to cost only their maintenance, is in the end the dearest of any." — ■** The planting of sugar and tobacco [that of cotton in America was not then known] ean afford the expense of slave cultivation." — *'■ The profits of a sugar plantation in any of our West India colo- saies, are generally much greater than any that is known in either Euro^^e or America; and the profits of a tobacco plantation, though Kiferior to tiiose of sugar, are superior to those of corn. Both can afford the expense of slave cultivation." This was written anterior to 1775. The cultivation of cotton in the United States was com- srnenced in 1790, and has grown up to a stupendous interest for the jprofitaWe empioyraent of slave labor, without anj rivals'hip in free labor. 310 THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. But it is free labor, chiefly, tl)at has created all the superioritj' of the United States over other countries, ia its general capacities of wealth. There are, indeed, vast resources and treasures of na- ture here. But it is the free labor and free spirit of the country ■which have turned them to profitable account. It is free labor which, while unembarrassed with vicious and favored with wise leo-islation, rolls up wealth in heaps. But for this, and but for the fact, that European and other foreign powers, which wrest fronj labor so large a portion of its reward, can not afford to employ all ihe power thus wrongfully acquired in commercial conn petition with us ; but for these facis, we saj, the measure of protection for American labor, naturally required, would be the difference in the cost of money and labor in tbese two quarters, not less than an averao-e of one hundred per cent. But the average protectiore which experience has dictated as n-ecessary, as for example in the tariff of 1842, is about 40 fer cent. The reasons why protection is required to be distributed so variously in its degrees, on different articles of domestic production, are, first, because the power of for- eign competition, as seen above, is brought to bear more on some articles than on others ; and next, because some domestic produc- tions have acquired a stronger position than others, and do no6 need so much help. Hence, in a well-digested tariff, we find Pro- tection varying from a very low up to a very high rate; and noth- ing could be a stronger evidence of the correctness- of the principle involved in the rule laid down, to wit, that the necessity of Protec- tion arises from the difference in the cost of money and labor in this country and others, than the facts above noticed. Although, therefore, as above recognised, this difference between the cost of money and labor in Europe and their cost in the United States, can not be laid down as an exact rule by which protection is, in all cases, to be graduated, it is, nevertheless, the foundation of the rule. It is remarkable, that a principle, like this, so potent and overruling, should not have been more influential with Amer- ican statesmen, as one from which there'is no escape in the current of public affairs. There is no law in the everlasting code of nature, that is more certain than this, and none the penalty of which must more certainly be paid, if violated. It is due, however, to the instincts of the common mind, to ob- serve, that the people of this covmtry have not been altogether insensible of a natural hostility between their labor and what is commonly called "the pauper labor of Europe.'* The whole of THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 311 the truth lies in this instinctive apprehension. It has been in their mouths as long as the oldest man can remember. It was in the minds and hearts of the revolutionary fathers, and stimulated them to all their mighty etforts, to their stupendous sacrifices, and to those strifes of arms which achieved so great a victory. The American people have generally felt, that Europe is a great prison- house of labor, the products of which, if brought in direct and open competition with their own, would drag them down to the same level, and subject them to the same disadvantages — ultimately to the same poverty, wretchedness, and slavery. Nor can it be said, that some of the public men of this country, poUtieians, statesmen, and others, have not apprehended this great truth, preached it eloquently, set forth its operations and results, and warned the people. But hitherto the field of debate has been wide, the materials of argument disjunct and scattered, and foreign authorities, based on fallacious and unsound principles, have been forced upon public attention, to distract, divide, and conquer. American schools and colleges, having nothing else to lay before their pupils — the tutors of which may without offence be supposed better skilled in teach- ing boys than statesmen, and not perhaps thinking that they were educating statesmen — have been forced to rely on Adam Smith, David Ricardo, Jean Baptiste Say, and such like, for lessons on public economy ! It would be strange, however, after so much debate, and where such vast interests are at stake, if the argument could never be brought to a point, on which all could see that the truth of the matter hinges. That point, it is believed, is indicated by the differ- ence in the cost of money and labor in the United States and in foreign parts. It is a commercial principle, determined with all the certainty of arithmetical results, about which, therefore, there can be no ground of controversy among reasonable minds. The rule is derived from the fact, that the producing powers of Europe and other foreign parts, that is, money and labor, cost only half as much as in the United States — in truth less than half as much. It will follow, therefore, that American labor, which in fact is the chief thing concerned, can never stand against such odds without protection. But a better rule than all, perhaps, for the graduation of duties for Protection, is the application and advice of parties who desire it. It is the experience of the people that teaches what they want, 312 THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. and they are the best judges. They never ask for protection, un- less they want it. Why should they ? It would be absurd. And the fact that they ask, is proof that they want. The following argument of Adam Smith, made for Free Trade, is so pertinent and forcible here, that we can not resist the tempta- tion of using it for our own purpose : " The annual revenue of every society is always precisely equal to the exchangeable value of the whole annual produce of its industry, or rather, is precisely the same thing with that exchangeable value. As every individual, therefore, endeavors, as much as he can, both to employ his capi- tal in the support of domestic industry, and so to direct that indus- try, that its produce may be of the greatest value; every individual necessarily labors to render the annual revenue of the society as great as be can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security ; and by directing that industry in such a manner that its produce may be of the greatest value, he in- tends only his own gain ; and he is in that, as in many other cases, led by an invisible hand, to promote an end which was no part of his intention. Nor is it always worse for the society, that it was no part of it. By pursuing his own interest, he frequently promotes that of the society more effectually than when he intends to promote it. I have never known much good done by those who affect to trade for the public good. It is an affectation, indeed, not very com- mon an)ong merchants, and very few words need be employed in dissuading them from it. What is the species of industry which his capital can best employ, and of which the produce is likely to be of the greatest value, every individual, it is evident, can, in his local situation, judge much better than any statesman or lawgiver can do for him. The statesman who should attempt to direct private peo- ple in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single per- son, but to no council or senate whatever, and which would no- where be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it." Nothing, surely, could be more delightful than this to those Americans who only ask to be protected in their own chosen ways — a protection to which they are justly entitled. Adam Smith en- tirely misrepresents the case, when he assumes, that Protection is THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. 313 an " attempt to direct private people in what way tiiey ought to employ their capital." It only encourages and s/iir/ds them from harm, in ways in which they themselves choose to " employ their capital." In no case does Protection conlroL the direction and em- ployment of capital ; it on\y invites it into a field where it could not otherwise go, and defends its position there. Its function is to do that which is solicited, not to impose that which is not desired ; and when it is shown, as we have done, that no parties can possibly be injured by the protection of others — except by a partiality in the distribution of its benefits, in helping one more than another, since all are benefited in some degree by protection afforded in any cases whatever — this reasoning of Adam Smith all goes for a protective system. When the people desire and obtain protection in this, that, or the other pursuit, for their " own gain," they are, as Adam Smith justly says, "led by an invisible hand, to promote an end which was no part of their intention," to wit, the common good of " the society." Nothing is more true, than that " every individual can, in his local situation, judge much better than any statesman or lawgiver can for him, what is the species of industry which his cap- ital can best employ, and of which the produce is likely to be of the greatest value ;" and therefore he asks protection in it, if he needs it. This is the opposite of directing and controUing his capital. The objection, that it indirectly controls other parties, to their injury, we have answered in another place, by showing that it controls only the importing merchant, to prevent his trading at the expense of the country, the very thing which ought to be done. It is only when the government interferes with and dictates to the pursuits of the people, as, for example, forcing them back to agriculture, by refusing to protect manufactures, that mischief, and untold mischief, is done. Let the people choose their own pur- suits, and protect them when they ask it, and they will be sure to promote the public, by securing their own private wealth. Adam Smith still farther concedes all that can be asked : " What is prudent in every private family, can scarcely be folly in that of a great kingdom." And what does the prudence of a private family require ? To take care of its own interests, to be sure — to pro- tect them. If this be not done, things will surely come to bad ; and it must take care of those interests, too, in relation to the con- flicting agencies with which it is for ever invested and assailed. This is precisely the doctrine of Protection. It is singular that, in addition to all this, Adam Smith, while 014 THE CLAIMS OF AMERICAN LABOR FOR PROTECTION. pleading the cause of Free Trade, not only concedes, but justifies, the [)rinciple of Protection in all its length and breadth of applica- tion, as follows : " There seem, however, to be two cases, in which it will generally be advantageous to lay some burden upon foreign, for the encouragement of domestic industry. Tlie first is, when some particular sort of industry is necessary for the defence of the country.' The defence of Great Britain, for example, depends very much upon its sailors and shipping. The act of navigation, therefore very properly, endeavors to give the sailors and shipping of Great Britain the monojioly of the trade of their own country, in some cases by absolute prohibitions, and in'others by heavy bur- dens upon the shippping of foreign countries." Let any one judge whether the principle here conceded can have any stopping-place, so long as, in the judgment of any people or government, "any particular sort of industry," as Adam Smith calls it, requires protection for the defence of the country, etition with Europe and other parts, so as to re- duce the prices of protected articles lower than European produ- cers under their system of taxation can afford, will be ample, and must necessarily be so employed by the force of competition, so long as competition can be sustained ; and when that ceases from abroad, it will only be because American power has won the day in the market of the world, when it will still go on reducing prices of the same articles at home, by domestic competition, as is ac- knowledged by M. Say, in the following words : "A government can not, by prohibition, elevate a product above the natural rate of price ; for, in that case, the home producers would betake themselves, in greater numbers, to its production, and by competi- tion, reduce the profits upon it to the general level." Ricardo also confesses the same. We have said, in substance, that American power — ability we mean, all things considered — under a properly-adjusted system, is amply sufficient to reduce, and to go on reducing, the prices of protected articles, till there shall be no foreign competition, in the existing state of the world, adequate to withstand or check it. 358 PROTECTIVE DUTIES NOT TAXES. One fraction of the power, not inconsiderable, which abides with the American people, under proper protection, to oppose that power which European states have usurped from labor, will be absorbed at home in the proper compensation of American labor. This is the first and grand object, and is indispensable to the per- petuity of our social organization. But beyond and behind that, are vast and inexhaustible faculties, which may be appropriated to the same great end, to wit, to fortify American labor in its riglits, and to goon cheapening the products of art and manufacture, as would naturally and necessarily be the result of domestic competition, and of the wide market of the world which would open before such a system and such enterprise. When once the arts shall have attained to a measure of improve- ment in the United Stales, equal to that of Europe, and labor at the same time being adequately protected, the power of the coun- try will be vastly superior to that of Europe, or of any other parts, to cheapen protected articles. An established and reliable system of protection, recognised as the permanent policy of the govern- ment, not again to be disturbed or impaired, would invoke and draw abundant capital into every branch of manufacture, call into existence new arts, put all the energies of the people into active exertion, extend competition in every enterprise, till every city and villao-e would be filled with artists and mechanics, and the whole country crowded with workshops and manufactories, to pour plenty into the lap of industry, and to give profitable employment to every laborer. The farmer would feed the mechanic, the planter supply raw materials for the manufacturer, and every occupation of life would open a market for other occupations. All the prod- ucts of art would grow cheaper and cheaper by competition, and still each of those pursuits would be a good business, by increased demand at home and abroad, till every nation on earth would be rivalled in the market of the world, in every product of the man- ufactures and the arts, simply because no other nation has so much inherent power to cheapen such products as the United States. Tlie nations of Europe can not give back to labor what they have robbed it of, or use all this power in commercial competition, and maintain their existence. They may use a part of it successfully against the United States, so long as we are not adequately pro- tected ; but after that, all their efforts and sacrifices will be in vain till they abandon their system of usurping the rights of labor, which would of course be their destruction, as to the existing forms of society. PROTECTIVE DUTIES NOT TAXES. 359 The cheapness of the American government, and the economy ©f its institutions, as contrasted with tiie prodigal expenditures of European governments and society, exhibit one vast item of the power of which we are now speaking ; and it is shown in another place, that the very revenues of the American government, raised by a properly-adjusted system of protection, not being taxes, may be made one of the most effective means of national wealth, of which it is possible to conceive. Such is the position of this coun- try, such her power, such her capabilities, moral and physical, and such her social organization as intended and accomplished, if not perverted, if faithfully carried out, and if sustained in her career to the consummation of her jiossibie destiny, that all the expenses ©f government, and all war-debts not swelling beyond any probable amount now in prospect, may be defrayed, and a sound credit maintained, without taxing the people a penny ; that is, by a sys- tem of protection, the avails of which shall be equal to al! these purposes, at the same time that it promotes and secures the inter- ests o[ all and of each, without being a burden or tax to any ; at die same time tJiat national weahh shall go on augmenting, with- out interruption, without measure, and without end. The influences of an American protective system all tend to the reduction of the prices of protected articles, and not, as Free Trade asserts, to their augmentation. This appears, first, from the fact that an earnest show of establishing and maintaining a protec- tive policy in the United States, produces instantaneous alarm in Europe, on account of the importance of our commercial position, and impairs their pow€r to maintain the prices of their products in our market; secondly, because it is manifest from the reason of the case, that such a collision of great commercial interests, in the way of competition, by extending the scale and multiplying the (Competitors, must necessarily reduce prices; thirdly, because the collision isaetually a shock of two vast commercial spheres, coming athwart each other in hostile encounter, in which a nice adjustment of small things is not to be thought of; and fourthly, because the actual and uniform operation of protection in the United States, is to reduce the prices of protected articles, as shown farther on in this chapter. No man has ever yet been able to point to a single article, the price of which has been permanently raised by a protective system; whereas the proofs on the other side are overwhelming. No reasonable mind can resist them. It is true, indeed, that we have the utterances of Free-Trade theorists, 360 PROTECTIVE DUTIES NOT TAXES. concocted in the closet, and thrust upon the public with a boldness in the inverse ratio of tlie reasons and facts. Next, we find them incorporated in presidential messages, and treasury reports, sent forth with such a sanction, wifhout shame or compunction, showing that men occupying the position and burdened with the responsi- bilities of statesmen, ran be as innocent, because they are as igno- rant, as the schoolboy who rejoices in the first achievements he imacines he has made in figures, when tlie master comes along and boxes his ears for his blunders. The advocates of Free Trade have too much complacency in their theory, and are too much sub- limated thereby, to be disturbed by facts. They are like the Mis- sissippi steamboat, which the Yankee in London boasted could jump the snags and sand-banks, and could hardly be held up at watering-places. We are aware it may be said that such disre- spectful treatment of opponents is rather a falling down from the dignity of grave argument. But it is written by high authority, " answer a fool according to his folly." How is it possible to rea- son with those who contemn the facts of all history, and require faith in their dogmas, against all experience? And when a presi- dent of the United States and his secretary of the treasury, have both flown off into the clouds, American citizens who are obliged to stay behind, in the vulgar walks of life, may be excused for thinking it meet to look after their own affairs. It is strange — the wonder of the age — that the people of the United States could have been so profoundly, so fatally duped, as of late, on this great and momentous subject ; and not less strange, that the highest pub- lic functionaries of the land should have ministered to the imposi- tion. The first class of facts which we propose to notice, to show that protective duties tend to reduce prices, and actually reduce them, instead of raising them, as the advocates of Free Trade allege, will be found in the history of the manufacture of cotton in the United States, so far as it relates to this question. Cotton goods which cost 85 cents a yard before the tariff of 1816, have been reduced to 7 cents. Cotton shirtings have fallen, under the system of protection, from 25 cents a yard to 5 ; sheet- ings, from 32 to 7 ; checks, from 32 to 8 ; striped and plain ging- hams, from 26 to 8; printed calicoes, from 20 in 1826, to 9 in 1844 ; — each of the above being supposed to be of the same'qual- ity at the high and reduced prices. The fact that the British gov- ernment have been obliged to enact differential duties for their PROTECTIVE DUTIES NOT TAXES. 361 eastern dependencies, first of 5 per cent., then of 8^, next of 10^, and finally of 15, to exclude American cotton goods, is co)»clusive evidence that the American manufacturers can and do sell cheaper than the British. This is a great, a stupendous result. From 1S09 to 1814, before cotton was manufactured in the Uni- ted States, the British duty on the raw material was 2-5s. 6cl. per cwt., or nearly 5^ cents a pound. From 1815 to 1819, it was 85. 6d. per cwt., or nearly 2 cents a pound. At last it got down to 2 farthings a pound, and that was taken off, as before shown Jor jjro- tection against American competition. But for American cotton manufactures, the American cotton-grower would have been in the power of the British government at this moment, with a duty against him in England of 5^ cents a pound on cotton, more or less. There is no doubt, if this domestic and world-wide competition had not been brought into the field by the American protective sys- tem, the prices of cotton goods would yet have been kept up much above what they are at present. This is a moral certainty, than which nothing can be more certain. Although the reduction of prices by such a cause, can not be measured with precision, yet no one, looking at the causes, as they operate in all such cases, would deem it extravagant to conclude, that, if the monopoly of cotton manufactures had been retained by Great Britain, and consequently the control of prices, we and all the world should have been pay- ing at this moment, at least an average of one hundred per cent, more for this species of goods, than the present prices. There are the facts on the one side, in the history of the reduction of prices; and there are the known principles of human nature on the other, establishing the moral certainty as to how men will act in given circumstances ; that is to say, monopoly is not addicted to cry out against its own prices, or to reduce them, except by the fear or by the fact of competition. But the British differential duties, above cited, enacted expressly and solely to protect their own manufactures, in their own remote or proximate dependencies, against Ainerican competition in those quarters — enactments still continued for the same purpose, at the highest rate of duties above named, the lower having proved insuffi- cient — are evidence which no man can gainsay, incontrovertibly conclusive, if it had been possible to entertain a doubt as to what is proved on this point, in the history of the reduction of prices, as above narrated. Each of these two kinds of evidence sustains 362 PROTECTIVE DUTIES NOT TAXES. the other, and the second, being a demonstration, imparts the same character to the first. It is the general influence of a protective system which affects details. It is seen in its results. Jn the setting-up of cotton man- ufactures in the United Stales, under legislative encouragement, this country started up a great commercial rival to a great commer- cial nation, in this particular — to a nation with which this s|)ecies of production was of vital importance — to a nation which had not only been accustomed to supply us, but the world, with these prod- ucts, with little opposition. The effect of this competition on so large, so vast a scale — in a sphere which in prospect embraced all nations — was, as might have been expected, and as accords with the experience of the whole commercial world at all times, soon very perceptible in the reduction of prices. The influence was even more comprehensive than that on the articles protected. It affected trade generally in the same way, as is always the case. Every ar- ticle within the range of protection went down, and was kept down by protection, whether the duties were prohibitory or not. It is the general influence, and the influence in the long run, for a course of years, which tells most emphatically on this question, as the history of reduction of the prices of cotton goods, since the Ameri- can protective system was spread over this species of merchandise, will show. — And t[)is general influence comprehends all particular cases — not one of them escapes. They who refuse to give up to such facts as these, defend them- selves by pointing to tiie prices current of the protected articles in for- eio-n markets, and in the American market, by which they think they have a show of vindication, inasmuch as, in some cases, they can, by this means, prove lower prices abroad than at home. This, however, is a very narrow, altogether too restricted a view of the facts that be- long to the question. In the first place, they leave out of the ac- count the general reduction of prices that has already been produced by the protective system, which Is the principal item that claims to be considered. Next, they do not consider that these foreign pro- ducers, especially in articles prohibited from the American market, have been restricted to a narrower sphere of trade, and conse- quendy to one of a more active competition between themselves, which of course reduces prices In those quarters lower than they would otherwise be. Thirdly, they do not consider the accidental surpluses which are accumulated in Europe, by bankruptcies and over-production, which. If the American market were open, would PROTECTIVE DUTIES NOT TAXES. 363 be floated off this way, to keep up prices ; and which, Indeed, even under the most restrictive system, will, in large amounts, make their way here, and be sold at a sacrifice on the cost. And fourthly, they do not consider, that, as soon as these restrictions are removed, the contest between the competitors, and the fact of cheap goods, will both be of short duration, and when Europe shall have beat America, goods will be higher than they were before — as is uni- versally found to be the fact. At this moment, three months after the commencement of the operation of the tariff of 1846, while we are writing this page, European goods are imported at prices cheaper than they can be afforded here. The reason is twofold : first, to dispose of the surpluses in foreign markets ; and next, on the principle disclosed by Lord Brougham, in the following words of a speech fuade by him in the house of commons, after the close of the war of JS12 : " It is well worth while by this glut [excessive exports to America] to stifle in the cradle those rising manufactories in the United States." As soon as they are stifled, or in any de- gree checked, by such means, prices will rise. Tlie fall is no per- manent good, but an evil, because prices will in the end be higher than they ought to be — all for the benefit of foreign producers. Such is the natural operation of a protective system in the Uni- ted Slates, and such is the natural result of disturbing it. The system reduces prices generally and greatly; the removal of it re- duces prices only slightly and transiently, soon to rise again, higher than they were before. Very little was done in the manufacture of woollen goods in the United States, on a large scale, till after the enactment of the tariff of 1S24. This species of manufacture had been carried on, more or less, in families, from as far back as in the early history of the colonies, by the hands of the wives and daughters of the yeomanry of the land, whose husbands and fathers kept a small flock of sheep for the supply of the raw material. This home-made cloth, accord- ing to the doctrine of the Free-Trade economists, was a very ex- pensive way of supplying wants, inasmuch as the labor expended in producing them, could have produced many times the value in agriculture and other ways ; which may be beautifully true in theory, if these economists could as easily find a market for those other things. But it was necessary that the people shouldhave clothing ; they had not, and could not get money, to buy it from abroad ; and' they therefore went to work and made it in their own houses, as the Free-Trade economists say, at vast expense. How was it 364 PROTECTIVE DUTIES NOT TAXES. a great expense ? — Thoy employed the surplus labor of their own hands, for which they could get nothing, in any other way ; or so economized their time and affairs, and so interchanged labor, neigh- bor with neighbor, for the different parts of the work, that they pro- duced home-made cloth, without costing them a penny out of porket. Was not that economy, in spite of the doctrine of the Free-Trade school? — Or rather, did not their necessities in- vent and reduce to practice the most salutary principles of public economy? — This way of supplying home-made clothing of all kinds — or nearly all that necessity requires — is within the recol- lection of mariy persons now living ; and it is still practised exten- sively by farmers, who consider it good economy, when they think of what their means of buying such things are, and how much more profitably such means can be appropriated to other purposes ; an(J all this when these products, made in this way, cost ten, or twenty, or in some cases perhaps fifty times as much labor, as the same imported articles do. This, the Free-Trade economists say, is a waste — a tax. But the farmers who still wear home-made cloih, are of a different opinion. They know thut they are saving money, and growing rich faster, by it ; and they will leave it off just so soon as, and no sooner than, they discover, by experience, that they can supply these wants with less labor applied to other objects. But the tariff of 1S24 gave a new and vigorous impulse to the manufacture of American woollen goods, on a large scale ; and the tariffs of '28 and '32 increased the impetus of the movement. Laro-e investments were made in woollen manufactories in various parts of the country, and they have continued to increase, from that time to this, under somewhat various and fluctuating encour- agement. But being begun, even under less and insufficient pro- tection, they could not be closed, without a sacrifice of capital. They have struggled on, sometimes doing a profitable business, and sometimes losing money. On the whole, the profits of this business have been so small, that, if the unstable policy of the gov- ernment had been foreseen, it is more than probable that most of these establishments would never have been set up. They have, however, produced all kinds of cloth, from the lowest prices up to the highest ; but those of the highest have generally proved un- profitable, on account of the comparative imperfection of the arts required for producing them. Bui the prices of woollen fabrics of the more common sort have PROTECTIVE DUTIES NOT TAXES. 365 fallen immensely since they began to be produced in the United States, under a system of protection, in the same manner as in the case of cotton fabrics; though not by so large a per c^ent. as in the latter, inasmuch as competition in cotton manufactures, between this country and Europe, has been in existence nearly or quite twice as long as the competition in the production of woollens, as stimulated by protection. So far as we have been able to learn, we should not hesitate to hazard the statement, that the average reduction of prices of woollen goods, in common use, in twenty years is now fifty per cent, on tlie average cost that time ago ; and the low-priced woollens, in which American competition could be better sustained, have fallen in price more rapidly and more con- siderably — especially under the tariff of 1842. Woollen jeans, of the same quality which sold in 1840 at 65 cents a yard, sold in 1S4G for 35 cents. A correspondent of the Journal of Commerce, understood to be one of the editors, found a Yankee trader, at Cleveland, Ohio, in the summer of J 846, who had settled in Can- ada, buying satinets and other low-priced woollen goods, who said he could pay the duties, on entering Canada, and make more on them, than to get British goods at Montreal. In this case of the Yankee from Canada, it is seen, that the American prices, subject to the Britisli duty on entering Canada, were more favorable to the trader than the same kind of British goods without duty. It is a very strong case of fact, and as far as it goes — and it seems to comprehend the entire range of low-priced woollen goods — it is conclusive. But the experience of the whole country — of all the people — will answer for itself. It is sufficiently well known, that the above statements are in harmony with the facts which constitute that ex- perience. Woollen goods have been constantly cheapening, under a system of protection, and of a more widely-extended competition ; and there is no reasonable mode of accounting for the facts, con- sidering how rapid and great has been the reduction of prices, ex- cept that it is occasioned by the operation of protective measures. It is the natural result of bringing into a commercial rivalship the interests of two grand commercial spheres, each of which aims, not only to supply its own market, but to put in for the market of the world, against the other. Each is aware how much is at stake, and each is resolved not to be beaten, but if possible to beat. It has been seen by the facts and reasonings of the preceding pages, that neither the arts nor labor of the United States can compete 366 PROTECTIVE DUTIES NOT TAXES. with tliose of Europe, without protection, because the arts here are comparatively iiDperfect, and the labor costs three times as much. It has also been shown, that, with adequate protection, any article that can be produced at all in this country, can be produced at a lower price than in any other ; and that the power of the couutry is ample for that purpose, under, and only under, a protective sys- tem. This explains all the facts of our history now under consid- eration, and there is no other ex|ilanation. The Aicts are indispu- table, and these results have been repeatedly broufjht foiwiird in evidence. And why do they not avail to establish the doctrine of reduction of prices by protection? Simply and only because they do not accord with the theory of a "science falsely so called." Stdl the facts abide ; the results are uniform ; and they can not be otherwise explained. It is said, indeed, that if you abate or abol- ish the duties, the prices will be reduced ; and it is admitted, tiiat, in most cases, it will be so in some degree, and for a transient pe- riod. Biit this is answered above. It is simply the effect of the struggles of an adversary that has been woisted, who, seeing his hopes revived by the imprudence of the other party, makes a new effort, and risks new sacrifices, to recover his former advantageous position ; and who will show little favor, when once lie has gained it. Iron, if not the greatest interest of the country, all things con- sidered, is the most important. It enters into every person's wants, and into his constant use, and no one can do without it-in a variety of forms. It constitutes the most prominent necessity of war, of peace, of agriculture, of manufactures, of commerce, and it maybe said, of every pursuit of life. It enters even into the finest embellish- ments of the arts. Time, that most momentous of all movements, carrying with it the destinies of all nations, and of all men, can not be accurately measured in its progress, without it. By the wise arrangements of Providence, the necessities of man and of society are abundantly provided for, in this particular, in the mineral wealth of the United Slates. 'I'he iron-beds of this country have already been ascertained to be inexhaustible ; and what is not of less importance — greater, indeed — the qualities of iron produced from the ores found here are the best in the world. The question is, wheiher this immense and boundless field of American wealth shall be protected and husbanded ; or whether it shall be abandoned to everlasting repose, for the sake of giving profit to British producers and manufacturers of this article, and PROTECTIVE DUTIES NOT TAXES. 367 income to the British exchequer? It is alleged that fvee trade in this article will bring it cheaper to the people of ihe United States. Siippo-e it should, that which is nominally cheaper is not always the ciieapest. The main proposition, however, is flatly and con- fidently denied, with the additional averment, that adequate and permanent protection of the home product and manufactures of this article will afford it, in all forms, at lower prices to the people than could be obtained from any other quarter, besides the advantages to the country of the home trade. The prices of the British mar- ket to-day, or this year, are no rule for to-morrow, or next year. They are as variable as the winds, and as fickle in their disposition — governed chiefly by their chances of obtaining the American market, or for want of it. When it is gained, and the American product is rt-pressed, their prices are sure to be high ; and when it is wanted, they are low. The protective system over iron and its manufactures began in the United States when prices were very high, and the consequence has been a uniform and gradual reduction of prices. Take, for example, the extracts, in the note below, from the report on iron of the convention of the friends of domestic industry, held in the city of New York, November, 1S31, signed "B B. Howell, Sec- retary."* " " Statemknt B. — Showing the effects of a tariff of protection on the article of iron at Pitlsbiir? and Cincinnati : In the years l8l8-'l9-'20, bar iron in Pitt.'^burg sold at from $190 to $200 per ton. — Now the price is $100 per ton. In the same year boiler-iron was $350 per ton. — Now at $1 -10 per ton. Sheet-iron was but lit- tle m:t\ cents. Again, in ]S44-'5, with a large home crop, prices were from 3f to 4f cents. It should be remarked, that all this while, nearly twenty years, a part of the supply was from abroad, and the foreign and domestic products were brought into com])etition, the consequence of which was the reduction of prices. But tiie moment tlie competition was diminished, by the falling off of the home crop, up went prices. Mr. Calhoun proved by figures — or claimed to have proved — when the tariff of 1842 was under debate, that the duties of that bill on hemp and its manufactures would be a tax on the cotton interest of SI, 422,222 a year. Mr. Toombs, of Georgia, of the 29th Congress, who, as a southern man, would naturally sympa- thize with Mr. Calhoun on this subject, in view of the facts, also j)roved hij Jjguren, while the tariff of 1846 was under debate, that Mr. Calhoun had been entirely wrong in his calculations and pre- dictions, and that the protection given to hemp and coiton-bagging, by the tariff of 1842, had not only lowered p,rices, but lowered them more even than Mr. Calhoun predicted it would raise them. •'Since the introduction of the business of making coiton-bagging 24 370 PROTECTIVE DUTIES NOT TAXES. in Kentucky," said Mr. Toombs — "since our own countrymen have come into competition in producing it — the price of bagging has fallen to less than ove third of its average price before that period. . . We now make good bagging in Kentucky more than 5 cents per yard less than it cost in Dundee, in 1S42, and for 3 or 4 cents a yard less than the present price in Scotland" — (See Na- tional Intelligencer, August 29, 1846). The price of cotton-bag- ging, in 1838, ranged from 18 to 20 cents per yard ; in 1841, from 25 to 27 ; in 1846, from 8^ to 9^. Bale rope, in 1838, from 7 to 8 cents per pound ; in 184J, from 11 to 12 ; in 1846, from 3 to 4. And yet the secretary of the treasury, in his report of December, 1846, in the face of these facts, being guided by his theory, repre- sents the duties of the tariff of 1842 on these articles, as ";in enor- mous tax that inures to the benefit of about thirty manufacturers". He is forced, however, to call the facts "a mystery." — " We are unable," he says, " to get any key to this mystery, from the "ys the duty. It was the duty that cheapened it; and if he were to believe, that he is taxed with the duty, he must believe, that, with- out the tax, he should have got his shirt for as much less than noth- ing as the difference between the duty and price ; and that the tradesman who sold him the goods, should not only not have sold them, but gicen them to him, and the difference between the duty and price (o hoof. In that way the tradesman, at least, would pay the duty. But the truth is, nobody pays it, if it is a domestic product, as in such a case it must be. Facts enough have been exhibited, and argument enough made, as is hoped, to show, that the general influence of a protective sys- tem, in reducing prices of manufactured products, is so entirely comprehensive, that no article can escape its beneficent effect, in the loni^ run. Attempts have been made by demagogues — we are sorry to say that presidents and secretaries of the treasury have been found in this category — to make the poor believe, that they are wronged by protective measures, as well in their rights of labor, as in the enhanced cost of manufactured products most necessary to them. PROTECTIVE DUTIES NOT TAXES. 373 Some of the most reckless and groundless statements on tl)is point, totally unsupported by facts or reason, were made in the presi- dent's annual messages, and in the annual reports of his secretary of the treasury, for 1845 and 184G. The very argument on mini- mums, considered above, and others of the kind, equally false and deceptive, were made by both of diese high functionaries. One is at a loss whether such attempts proceed from a defect of under- standing or vice of heart. The truth is, that no class of society is so much benefited by protection as the poor; first, because all low- priced products of manufacture, most necessary to them, such as cottons, woollens, &c., are cheapened by this policy in a greater proportion than any other ; and next, because no interest is benefited so much as that of labor, by a protective system, as shown in other parts of this work. It is on all low-priced articles of manufacture, used by the poor, that American arts and labor can compete most successfully with foreign arts and labor, and it is the prices of these articles which are first and most considerably reduced under an American protective system. Nothing is more evident than this, as shown by the facts displayed above, and as brought within the reach of common observation.* * The secretary of the treasury, in his annual report of December, 1845, which announced the project of the tariff of 1846, laid down this doctrine, that " the duty must be added to the price, and paid by the consumer — the duty constituting as much a part of the price as the cost of the production." Also, that prices would fall hy the amount of duties taken off. But immediately on the passage of the tariff of 1846, which reduced the duties on salt, the price of Turk's Island salt rose, in the place of its production, fifty per cent. Liverpool salt and low-priced cotton goods also rose in England, by the same cause, viz., the news of the reduc- tion of the American tariff. So also the prices of sugar and molasses, in the for- eign places of their production, rose by an amount equal to the reduction of the American duties. These facts show, first, that the foreign producer, and not the American consumer, is benefited by the reduction of our protective duties; next, that the foreign producer, and n;it of the Dragon — The aggrcgiite Los.-* lo tl^e United Slates, since 1791, for Want of a Protective System. — The Lo.ss comprehends the U-e of ihe Capital in all Time — Tiie Effects of new Arts and new Puisuits under a Protective Sy.steiii — A variety of Facts on this Point. It is well known that the only objection to protective duties ever urged, has been the assumption — proved in the foreijoing pages to be false and groundless — that they are taxes, and taxes to the full amount of the duties which are imposed on the protected articles. There never was an argument made against Protection which did not assume this, or which alleged any other objection that did not resolve itself into this. The Free- Trade argument is universally constructed on the principle of an hypothesis. It is singular that a maiter-of-fact age, which has long since loaned its almost unqualified sanction to the inductive mode of reasoning, that is, reasoning and forming conclusions from facts, shoidd have yielded so much to this strange delusion, and that whole states and nations should have almost gone mad with it. It demonstrates the sluggishness of the human mind in reducins: to CO O practice its own professed faith, and its propensity to romance in the affairs of life, rather than dig among facts, and search tliem out for doctrine and use. Of all modes of reasoning, theorizing, with- out a basis, is most captivating to the intellectual sluggard. He is neither obliged to find, nor disposed to consider, facts. If they come in his way, he always has a theory to oppose to them, and if they do not accord with bis preconceived opinions, they are inad- missible. He worships theory built on hypothesis. Did it not, he asks, teach us how the universe is kept in order, by the principle of gravitation? But he forgets that the fact of the falling of an ap[)le led to this discovery ; nor does he seem to be aware that there is no conclusion in the theory of the heavenly bodies, which is not deduced from ascertained facts. Of all sciences, if this de- serves the name of one, public economy, to be safe and useful, claims, more, if possible, than any other, to be based on facts ; all AND LOSSES BY FREE TRADE. 399 its deductions should be founded on facts, and facts alone ; and any theory, passing under this name, which has not such a basis, is worthy of no respect. Free Trade is this baseless theory, with the facts of all history and thf experience of all mankind against it. A single sentence from the London Times of January 1, 1S47, uttered afttT it had copiously poured the unction of its flattery on the heads of the American president and his secretary of the treas- ury, for their able vindication of the principles of Free Trade, will illustrate the relative position of this country to forei2:n parts, in a commercial point of view, better, perhaps, than anything el.~e: "Almost every nation in the world," says that join-nal, "isdirectly interested in the degree of liberality and friendliness with which the L^nited States may open their resources to the wants of other more-crowded and less-favored realms." This is supplication, entreaty — for what? To allow Europe to live at our expense. An appeal is made to our "liberality," "friendliness." We are implored to be charitable. This only to show the importance that is attached to the controversy. It bodes a great strife when tiie United States undertake to protect their own interests — to defend their own rights. Europe is convulsed. " Almost every nation in the world," says the London Times, "is directly interested." A plainer truth was never uttered. The European world observes that labor has gained an independent position in the United States; and it sees, that, if that position be maintained, by protecting itself, all other nations must be revolutionized. Either American labor or foreign despotisms must fall. The instincts of unjust power cause it to quake on its precarious throne, and what sacrifices will it not make to defend its unrighteous su|)remacy, and absurd pre- tensions? If, in apprehension of evil to itself, it will stoop to sup- plication, to entreaty, by all the ties of a pretended brotherhood, it is not because it will not put on different airs, when once it may have recovered its position, and is exeinpt from such fears. Such symptoms demonstrate a conscious weakness, not of misfortune, but of crime — the crime of doing wrong to humanity, by depri- ving it of its rights. All we intended by drawing aside the curtain to exhibit this spectacle, or rather by employing the hand of the culprit behind, to lift the screen that hides his own shame, was to show what potent principles of self-preservation are invoked, on the side of European powers, when once they see that American labor is rising to pro- tect itself; how they will crouch to supplication, and how they 400 GAINS OF PROTECTION will yield anytliing for a season in the prices of their own products, if they can have a chance of raising them thereafter, or if they can only preserve their markets at smaller profits. It is this great bat- tle which reduces the prices of manufactured articles in tiie United States, under a protective system ; and this is one of its benefits. It reduces them generally, particularly and essentially, as evinced by an exhibition of facts, in a former chapter — reduces them so much, that the whole country, and every party and person in it, are sensible of the benefit, the theory of Free Trade to the con- trary notwithstanding. As to the fact that a protective system rescues us from an enor- mous amount of foreign taxation, it is undoubtedly the greatest and most important one that can be named. It is the real remedy — the effective and commanding influence. It is St. George's spear in the throat of the dragon. This country has yet to learn bow it is taxed, and how it has ever been taxed, to support the Euro- pean system of society. It will hereafter be a subject of astonish- ment, that this momentous element of public economy for the United States, was not more fully developed, and brought to bear upon the public mind, at an earlier date. Certainly, this has not been a defect in the instincts of the people, but only in the rulers, politicians, and statesmen of the country. Did not the American fathers feel it before the great political rupture between themselves and the mother-country ; and was it not the cause of that rupture? It was taxation, such as is described in the preceding chapter — taxation comprehensive, heavy, intolerable — taxation in the very mode now under consideration, by forbidding American manufac- tures, and forcing the colonists to supply their wants of this kind throuo"h British merchants ; it was such a systeui of taxation, which brought about the American revolution, and resulted in the estab- lishment of American independence. Nor was the country relieved very essentially from this system of foreign taxation by the establishment of independence, till nearly half a century had elapsed. From the peace of 1783 to the adop- tion of the constitution in 1789, the confederated states were under a system of perfect Free Trade, and Great Britain and Europe drew away the money and wealth of the country as effectually as before the war of the revolution. We learn from Pitkin's Statis- tical View, that our imports from Great Britain, for the first year after the peace of '83, were six in mic of our exports to that em- pire ; and that the annual average proportion of our imports from, AND LOSSES BY FREE TRADE. 401 over our exports to, Great Britain, from 1783 to 1790, was as tJine of the former to nne of the latter. Hence we find, by the treasury documents, which give us no light beyond that year, that the excess of our imports over exports, in 1791, was $32,000,000. Nor did this country ever enjoy an effective protective system till the enactment of the tariff of 1824. Accordingly, we are not sur- prised — however much we may be mortified — to read from Lowe, as cited by Mr. Clay, in one of his speeches, that " it is now above forty years since the United States of America were definitively separated fiom us ; and since [that time], their situation has afforded a proof, that ihe benefit of mercantile intercourse may be retained, in all its extent, without the care of governing, or the expense of defending, these once-regretted colonies." How was " the benefit of mercantile intercourse retained, in all its extent" ? Simply, for want of an adequate system of protection in the United States, down to that time. It was for this reason, that, according to this authority, and giving the true version of his language. Great Britain continued for nearly half a century, to tax the people of this coun- try as effectively as she did before the revolution, and in addition to this, was saved "the care and expense" of government. There is no other intelligible explanation of this remarkable statement. The American revolution and its results, according to Lowe, were at first regretted by British statesmen ; but it was aftervi^ard found, that they could still tax the United States as easily and as effectually as before, without expense and without responsibility. Such is the teaching of Lowe, and it was undoubtedly true. Our foreign com- mercial history, as presented in the preceding chapter, from our own public documents, proves it. It is from this enormous system of foreign taxation that the protective poRcy rescues the country. It was on the basis of the principle which lies at the foundation of this system, that Henry, now Lord Brougham, said in the house of commons, as elsewhere cited, that " it was well worth while to stifle in the cradle the rising manufactures of the United States ;" and that another member said, very frankly, which is equally worthy of citing a second time, as here done : " It was idle for us to endeavor to persuade other nations to join with us in adopting the principles of what was called Free Trade. Other nations knew, as well as the noble lord opposite, and those who acted with him, what we meant by Free Trade was nothing more nor less than, by means of the great advantages we enjoyed, to get a monopoly of all their mar- kets for our manufactures, and to prevent them, one and all, from 26 402 GAINS OF PROTECTION ever becoming manufacturing nations. When the system of reciprocity and Free-Trade had been proposed to a French am- bassador, his remark was, that the plan was excellent in theory, but to make it fair in practice, it would be necessary to defer the at- tempt to put it in execution for half a century, until France should be on the same footing with Great Britain, in marine, in manufac- tures, in capital, and the many other peculiar advantages which it now enjoyed." The Edinburgh Review, in speaking of the reduction of duties by the Compromise act of 1 S33, said : " We have no doubt that it has given the death-blow to the American system."* The London Spectator, in 1833, said : " More general considerations tend to show, that the trade between the two countries [the United States and Great Britain] most beneficial to both, must be what is com- monly called a ' colonial trade,' the new-settled country importing the manufactures of the old, in exchange for its own raw produce. In all economical relations, the United States still stand to Eng- land in the relation of colony to mother-country." These citations, certainly, may be regarded as sufficiently intel- ligible, and quite to the point aimed at. They are not ignorant of the nature and results of the colonial relation between themselves and the United States, and may well be excused for advocating that state of thino;s which is tantamount, the benefits of which are all theirs, and all the disadvantages ours. The saving and increase of national capital effected by a protec- tive system, as before shown, are considerations of no mean impor- tance. Take, for example, the aggregate balance of imports over exports, from 1791 to 1845, inclusive, fifty-five years, namely, $718,959,486, as exhibited in the preceding chapter; or in round numbers, $719,000,000 ; all which might and should have been saved to the country by a protective system. Add to this an av- erage gain of seven millions a year, in the excess of exports over • The merits of the Coini)romise act, as the best possible measure for the time and circumstances, to rescue the American manufactures from the mortal blow thea aimed at them by the administration, through Mr. Verplanck's bill, at that mo- ment pendin?, and certain to become a law, except as the Compromise headed and subverted the plan, are not at all disparaged by this very natural remnrk of a foreigner. The plan of the Compromise act was to save the manuf ictures then from the doom pronounced, and to give time for reflection and for a re-edifi- cation of the American manufacturing system. That the Compromise ran out, and the duties and revenue ran down, was no fault of the plan, but the misfortune of the country to have remained so long in such hands. At last, however, the tariff of 1842 came to the rescue, a tardy, but exact fulfilment of the plan of the Compromise. AND LOSSES BY FREE TRADE. 403 imports for this period, which was the average under the tariff of 1842, and which would fall much short of a reasonable gain for the United States in its foreign trade, as compared with the gains of Great Britain, before shown (the average of which, from 1700 to 1787, was upward of sixteen millions of dollars a year, rapidly increasing from this last date) ; and with this addition of seven millions a year, for fifty-five years, the sum of our minus quantity for this period, as compared with what we were justly entitled to, will be $1,104,000,000. This, it will be observed, does not in- clude the losses we sustained under the confederation, which were greatly in excess of any time since ; but wanting authentic docu- ments, they can not be reckoned, and we are confined, in this cal- culation, within the limit of 1791. Here, then, is a positive loss to the country, in fifty-five years, of $1,104,000,000, a principal sum, without reckoning the interest on it as capital — all for want of a protective system. Consider, then, that an adequate protective system in existence all this while, after having saved this capital of $1,104,000,000 to the country, as it was due and lost from time to time in parts, would have put it to use, so as to have produced at least the usual rate of interest, six per cent. In running the eye over the tables, any one will see that, if we reckon the interest of the entire sum for one third of this period of fifty-five years, it will without doubt be less than the result that would be obtained from an accurate calculation on each sum from the time it became due, or was lost, to 1845. Or, instead of one third, say seventeen years, which is the nearest integral number at which interest at six per cent, doubles the principal sum. By this rule, the actual loss to the country, as will be seen, for want of an ad- equate protective system, from 1791 to 184-5, was $2,208,000,000. The principal sum of $1,104,000,000, was a loss of so much mon- ey ; and the proof that six per cent, is not too high a rate of inter- est, is found in the facts, first, that it is the lowest rate which has usually been paid in this country ; and next, that more than that could be made in the use of it, or it never would or could be paid. It would probably be nearer the truth to say, that, for the last fifty years, or even from the date of American independence, under a steady and adequate protective system, money, in the hands of the enterprising population of this country, would have been worth ten or twelve per cent. The elements of this calculation, as will be seen, are drawn from authentic documents; and the reasoning, leading to the result, is 404 GAINS OF PROTECTION AND LOSSES BY FREE TRADE. based on facts and principles, which, it is believed, can not be easily disturbed. It may be surprising to those who have not reflected upon the subject; but, it may be asked, in view of the premises, how can the result be otherwise? It will also be seen, that the reckoning does not stop at this point; and that, to be fully appre- ciated, it must be carried on, from age to age, by the same ride, swelling and rolling up the national losses, or the alternative con- tingent accumulations of wealth, that belong to the subject, till the powers of calculation are literally burdened with the task. There is no remedy for the past. This $2,208,000,000, and all its con- tingent beneficial results, by being put and kept in use, doubling itself in every seventeen years, are lost for ever. The only remedy that can be applied, is for the future. But this calculation, based on the ordinary six per cent, for the use of money, does not by any means, nor by far, comprehend the case. The enterprise of the people of this country, under any tol- erable system of protection — take, for example, the seven years subsequent to the enactment of the tariff of 1824, and the shorter period of the influence of the tariff of 1842 — has never failed to do much better, on the average, with every species of capital, tlian an increase of six per cent. In the first place, the average interest of money has never been less than that, to which must be added the profits of those who could afford to pay such interest, two, five, ten, and sometimes fifteen or twenty per cent., to arrive at the true re- sult. In the next place — and by no means the least important item — the steady and firm rise in the value of every species of property, under a system of adequate protection, claims to come into this reckoning, and necessarily belongs to it. Land rises ; im- provements of every description, private and public, on a small or large scale, rise ; stocks rise ; farms in the vicinity of manufactu- ring villages and towns, rise ; and by the increase and multiplica- tion of these establishments, the influence extends over the whole country, to affect every farm and every farmer, every bit of prop- erty and everj^ owner thereof, in the same way. The Hon. Mr. Ramsey, of Pennsylvania, stated on the floor of Congress, in 1846, that, since the enactment of the tariff of 1842, farms in Schuylkill county, in consequence of the encouragement given by Protection to the coal business, had doubled in value, and that farms in the adjoining counties, in proportion to their proximity to the mines and the business created by them, felt the same influence. So in the iron regions of Pennsylvania and elsewhere. So in the case BENEFITS OF NEW ARTS AND OF NEW PURSUITS. 405 of all great and important articles, the home production of which has been encouraged by Protection. Every species of property around their centres of industry and activity, comprehending wide regions, and extending, more or less, to the farthest bounds of the Union, has risen in value. All the minor manufacturing establish- ments, and all the mechanic arts, in the aggregate, exert an im- mense influence of the same kind, under a system of Protection. Labor rises ; the products of agriculture rise ; everything rises, but the prices of the protected articles of manufacture, which are always reduced, under such a system, as before shown. It must be seen, therefore, that the usual rate of interest for money, scarcely begins to measure the increase of value in the capital of the country, as the result of a protective system. Consequently it will be seen, that the estimate above made of an aggregate loss to the country, of $2,208,000,000, from 1791 to 1845, for want of Protection, does not even approximate toward the reality. It must be obvious to every reflecting mind, that, whenever a new productive art, or a new productive pursuit, is started in the community, and sustained, it is a benefit to every other productive art and pursuit, directly or indirectly, proximately or remotely, be- cause it takes one or more persons — in some cases many, even , thousands — from some other pursuit or pursuits, and constitntes them customers to other vocations, as consumers of their products, instead of being themselves producers of the things which they now have occasion to consume. They give to those engaged in the pursuits which they left, or would otherwise have been engaged in themselves, more and a better business ; these latter, in conse- quence, become Letter custon)ers to others ; and these others to others still, until the entire round of the productive arts, and the productive and useful pursuits of life, is reached and benefited by additional demands on the industry of all. Besides this, every new art or pursuit, the products of which are essential and impor- tant to the community, almost necessarily calls into existence other new arts and pursuits, to supply its demands; and these latter, the offspring of the former, themselves become parents of other arts and pursuits, in their turn ; and so on, in almost endless progres- sion. It diversifies labor, and makes every species more valuable to itself, because it has less competition, and there is more demand for it. Nor is it to be forgotten, that every product of every new art or pursuit, and the effect of every new application of skill and labor, is a new and substantial element of the commonwealth, 406 BENEFITS OF NEW ARTS AND OF NEW PURSUITS. which did not exist before, difFusing its benefits all around. It 13 so much addition to the common stock of valuables — to the gen- eral, to national wealth. It is no answer to this, to say, that these several or many parties could or would have done as much in old arts and pursuits ; for those engaged in the old will always pro- duce as much as the wants of the community require. The effect of the multiplication of productive arts and pursuits under a pro- tective system, is to make all arts and pursuits, old and new, more active, and more profitable to the parties, as well as more produc- tive of national wealth.* Suppose these new arts and new call- ings, each occupying a like position of importance in its relations, are multiplied indefinitely in a great comnmnity — that they go on in endless progression of increase as to number — and that each becomes a nucleus of indefinite, ceaseless aggregation. Their power of augmenting national wealth, then, becomes equally indefi- nite, boundless, interminable, immeasurable. The new arts and new callings that have grown up in the Uni- ted States, under the protective policy, can scarcely be counted, and the growth of some of them has become gigantic in their in- terests, and in the ramifications of their influence on other pre- existing interests, to put them forward with equal strides, and to raise them to a corresponding importance. It has been ascertained and well certified, that the Glenham woollen factory, at Fishkill, New York, with a capital of $140,000, gives profitable employment to $1,422,000 worth of other Ameri- can capital, chiefly agricultural, in items as follows : 66,000 sheep, S2 a head, $132,000 ; 22,000 acres of pasture land, to feed the sheep, supposed to be worth in that county, $50 an acre, $1,100,000 ; farms employed to the extent of 2,600 acres, worth $70 an acre, $182,000 ; other capital, to furnish teazles, firewood, coal, provender, &c., &c., $8,000. Total, $1,422,000. To this should be added the sum of the wages paid to the operatives and agents of the factory, which would considerably increase the amount of capital employed. Nor is this the end of the calcula- tion. All the persons employed in and about this establishment, " The manufacture of gold pens is a remarkable instance of the introduction and growth of a new art. It is not ten years since they were first made, and it is es- timated that one million a yrar are now manufactured in New York, using up 800 pounds' weight of gold. The reduction of price by competition is no less remark- able. They were at first sold for $5, and may now be had for $1 50 cts. and $1. A single manufacturer employs in this business a capital of $80,000, and expends $1,000 a week for labor. BENEFITS OF NEW ARTS AND OF NEW PURSUITS. 407 all employed to tend the sheep and cultivate the farms, to furnish teazles, fuel, and provender, and to supply any and all other de- mands, are withdrawn from other pursuits, to afford them a better chance of profit, and become customers to a variety of callings, and to a great extent, where they would otherwise have been them- selves employed. The city of Lowell, Mass., is the sole creation of the protective policy. In 1821, the ground on which it stands was used for or- dinary agricultural purposes, and was then bought by the Merri- mack company. In 1S45 it had a population of 30,000, of which nearly one third were operatives in the mills, consisting of 6,320 females, and 2,915 males. The capital invested in manufacturing and mechanical enterprises, was $12,000,000. The annual con- sumption of cotton, 61,100 bales; (wool not given, but great;) of coal, 12,500 tons; of wood, 3,270 cords; of oil, 67,842 gal- lons ; of charcoal, 600,000 bushels ; of starch, 800,000 pounds. Of course, these are only the leading and principal articles of con- sumption. More than a million and a half of dollars a year are paid for labor, and the profits are about the same. Here, tiien, are 30,000 persons withdrawn from other occupa- tions of the country by means of these establishments, and concen- trated on this single point, all living by them, and giving so much better chances for those occupying the places which they would otherwise have filled, both parties becoming customers of each other, directly or indirectly. To this population must be added that employed to supply the raw cotton, the wool, the coal, the wood, the oil, the starch, the food and clothing for 30,000 persons, the building materials, the erection of the buildings, the furnishing of the houses, and the thousand articles of consumption that can not be named. If it be supposed that the capital of $12,000,000 invested at Lowell employs other capital of the country, in propor- tion to that invested at Fishkill, New York, as above noticed, that other capital thus employed would amount to $121,885,714. Nor does the vast benefit to other pursuits of the country, in preventing over-production, and in supporting the prices of their products, by withdrawing from them these 30,000 persons at Lowell, and the very great additional population occupied in charge of the one hun- dred and twenty millions of other capital employed by Lowell, come into tills reckoning. There are invested in the iron-works of the United States, ex- clusive of iron manufactories, upward of $20,000,000. (See Fish- 408 BENEFITS OF NEW ARTS AND OF NEW PURSUITS. er's National Magazine, June, 1 S46.) Say $20,000,000. At the same rate of calculation, demonstrating the result in the case of the Glenham factory, at Fishkill, this $20,000,000 invested in the iron- works of the United States employs other capital, of all kinds, to the amount of $203,142,857, not reckoning the capital of labor employed in these works, and the beneficial effects on other spe- cies of labor from which this is withdrawn. The Hon. Mr. Ramsay, of Pennsylvania, gave to the house of representatives some instructive statistics on the coal-trade. (See National Intelligencer, September 1, 1 846.) A part of them, bear- ing on the point now under consideration, lead to the following re- sult : that the investment of capital for the coal business, in the single county of Schuylkill, in canals, boats, horses, railroads, cars, locomotives, collieries, landings, working caj)ital, coal-land, &c., &c., amounted to $26,856,000 ; that $9,330,000 of this was added under the tariff of 1842; that the agricultural products consumed in 1845 by those engaged in the coal business of that county, such as wheat, flour, corn, rye, buckwheat, oats, hay, straw, beef, pork, potatoes, poultry, butter, lard, milk, eggs, fruit, vegetables, &c., &c., amounted to $965,000 ; that tlie amount of the same products consumed in 1841 was only $588,000; showing an increase, in four years, of $377,000 ; that the merchandise of various kinds consumed, same year (1845), amounted to $1,758,000 — increase on 1841 of $840,000 ; that many articles of considerable amount were omitted in this reckoning ; that the farms in the county had doubled in value, and the value of those in adjoining counties was much increased by the same cause ; that the amount of anthracite coal taken to market had risen from 360 tons in 1820, to 2,000,000 in 1845 ; to all which should be added the navigation interest to be found in the coal-fleet, engaged in this trade, a part of which, some scores of vessels, is constantly seen waiting for and taking in car- goes, at the depot on the Delaware, above Philadelphia. The em- ployment which this trade gives to labor, the increased value which it imparts to both labor and property, and the wide-spread commer- cial activity which it creates, bringing profit to all parties, are but one instance of the power and benefits of aggregatio?i, which a single great interest, like this, carries along with it. The whole manufacturing capital of the United States was esti- mated some years ago at $300,000,000. The Hon. Charles H. Carroll, of New York, in a speech in Congress, 1846 (see National Intelligencer, August 7, 1846), puts the minimum estimate, for the BENEFITS OF NfeW ARTS AND OF NEW PURSUITS. 409 present time, at $500,000,000. It will be sufficient for the present purpose, however, to take the first-named estimate of $300,000,000. If this aggregate be supposed to employ other capital of the coun- try, ill the same proportion as the Clenhatn factory, without count- ing itself, or the wages of labor em|)loyed in the establishments, it puts in active operation, and |)rofital)ly sustains, other property to the amount of $3,047,143,857. This, as must be admitted, is an astonisliing result. Some manufactories may employ less, some more, of other capi- tal, in pioportion to their own investments, than that at Fishkill, New York. No accuracy, however, derivable from the minutest infoiination of facts, could vary this general result, so as to affect the lesson which it teaches, in showing Iidw new arts and new cal- lings, in the aggregate, under a protective system, promote private, general, and national wealth. Manufacturing and other arts create the only market on which American agicultural labor can rely. Does not every one see this in the experience of the past? Look at a manufacturing village. How quick it raises the prices of land in the vicinity, and turns farms into gardens, which are the most profitable species of agri- culture. And not only is there this near benefit, but it branches out, and connects itself with the agriculture of the whole Union. Every new manufactory, of whatever kind, and in whatever place, gives life, activity, and profit, to agriculture, on a large scale. By these establishments, the workshops of Europe are brought to the door of American farmers — are planted alongside of their fields — and the two parties supply each other's wants without the costs of transportation over seas, the farmer getting as much, or nearly as much, at home, as his products would command abroad, thus saving the costs of transport, and the parties retain among themselves all the profits of manufacturing skill and labor, and all the additional values which are imparted by art and labor to the raw material. 410 THE EFFECTS OF A PROTECTIVE SYSTEM CHAPTER XXVI. THE EFFECTS OF A PROTECTIVE SYSTEM ON THE PRICES OF AMERICAN LABOR. Consideration of the contradictory Averments on this Point. — The Facts of the Case. — Statistics bearing on the (Question. — The Effect of Low Wages on the Character of the People. A PROTECTIVE SYSTEM raises the prices of American labor. As this has been drawn in question, and even denied, not alone by men upon the common level of society, but by high and influential func- tionaries of the government of the United States, in their official documents, it becomes necessary to subject the question to the proof of facts. The president of the United States, in his annual message of 1845, said : " It," the tariff of 1842, " does not benefit the laborers, whose wages are not increased by it." His secretary of the treasury, in his annual report, accompanying that message, said : " The wages of labor have not augmented since the tariff of 1842, and in some cases they have diminished." — "The wages of labor did not increase in any corresponding ratio — or in any ratio whatever." In their annual documents of the same kind, for 1846, they reiterate the same things in substance — the secretary more emphatically than before. He labors away with assertion, by a frequent and long-continued' repetition of identical ideas. These, it will be observed, are assertions oi fact. If it were proper to introduce such a topic in such documents, one might say with at least equal propriety, that it was imperatively incumbent on the authors to substantiate their assertions of fact with facts. This, however, was not attempted, and the documents were sent forth upon the community, with all the weight and influence of their high official character, as if there were no question of the facts asserted ; and it is the more to be regretted, as the facts asserted were not true, and could not be substantiated, as the evidence about to be exhibited will show. " The ratio" above referred to by the secretary, was the average increase of duties on [)rotected articles, from 20 per cent, as they existed before the tariff of 1842, to upward of 40 per cent, by that ON THE PRICES OF AMERICAN LABOR. 411 act, as he says, though in fact it did not exceed 37 per cent. But that is no matter in this place. The secretary asserts, that, ahhough *' the average of duties was more than doubled," the wages of labor were not more than doubled, or " did not increase in a correspond- ing ratio." Resting the matter here, it would be hard to say what is proved. For who ever pretended, that the wages of labor rise, "in a ratio corresponding" with the average increase of duties? If they rise at all, it is a manifest benefit. But the secretary adds, " or in any ratio whatever." This latter is an important point. But it is singular, that, in the first member of the sentence, he should admit that they did rise, though " not in a corresponding ratio," and in the last member, deny it. He may be safely left in his own dilemma. But in another place he asserts positively, "that the wages of labor have not augmented since the tariff of 1S42, and that in some cases they have diminished." This manifestly brings us to the question. The president, as will be observed, stops a little short of the secretary, and only says, that "the wages of labor were not increased by the tariff of 1842," which also brings us to the question — a question of/act. It might be asked with great force, did neither of these gentle- men ever think, that it is a blessing to labor, to have work ? Sup- pose its wages are not increased, if they are sufficient and satisfactory ; will these gentlemen find fault with this, if the laborer himself does not? If they had dared to say, that there was no employment for labor, under the tariff of 1842, they would have made a decided case. But one says, wages did not increase ; and the other ven- tures to say, that in some cases they diminished. Did not increase from what standard ? That before the period of the tariff of 1842 ; or that which this period established ? This is a point of at least some, not inconsiderable, importance. If it could be known where these gentlemen mean to take up their position, one could not re- fuse a fair challenge on this question. Everybody knows that, in 1840, labor went begging for bread, and could not always get it. The Hon. Simon Cameron, in the words cited from him below, tells us, and calls the president of the senate, Mr. Dallas, to wit- ness, that, in 1840, " there were over five hundred applicants — healthy, vigorous men — for the place of ^/p-s/ai'e," in a court of Philadelphia, " to get bread for their families". It is also a fact, that an ex-governor of Pennsylvania wept, when General Harrison was obliged to refuse him an office in that commonwealth, because, he said, " he was poor and needed it". 412 THE EFFECTS OF A PROTECTIVE SYSTEM If the president and his secretary mean to say, that the wages of labor, under the tariff of 1842, did not rise above the level of wages in 1840, one would be very much surprised ; and if they mean to say, that they did not rise above the standard of the period of the tariff of 1842, it is a simple truism; it is saying that a thing is equal to itself. Since, however, they have raised the question about wages of labor, they must meet the facts. First, then, they do not pre- tend, that labor could not find employment under the tariff of 1842. This point, settled, is a very important one. The following is an extract, in point, from a speech of the Hon. Simon Cameron, United States senator from Pennsylvania, deliv- ered July 22, 1846, on the reduction of the tariff of 1842, while that of 1846 was under debate; and it is not the less valuable as coming from one of the same political party with the president and secretary, who have expressed themselves as above cited : — " The individual cases of distress, which pervaded the country for a period preceding the law of 1842, were absolutely heartrend- ing. Rich men not only lost their fortunes, but poor men lost their means of living. Our furnaces, and our forges, and our work- shops, were emptied ; our merchants were ruined ; and our far- mers, our substantial yeomanry, many of them with abundance of products, for want of a market, found themselves in the hands of the sheriff. Not a section of the whole country but afforded abun- dant evidence of the truth of this picture. . . I remember, and you, Mr. President [Dallas], doubtless know, that, in the organization of a new court in Philadelphia, there were over 500 apf)licants for the place of a (ip-stave ! Healthy, vigorous men sought this station, to get bread for their families! . . Do gentlemen desire these scenes renewed ? Will men never learn wisdom by experience ? How is it now [under the tariff of 1842] ? How changed the scene ! If a magician's wand had been waved over our country, the result would hardly have appeared more like enchantment, than the reality now before us. No man is idle who is willing to work. Contented, smiling faces are everywhere to be seen. The busy hum of indus- try gladdens the ear in all directions. Everybody is prosperous, and everybody ha|)py." It was not necessary, then, under the tariff of 1842, for " five hundred healthy and vigorous men," to go begging for the office of "tip-stave" in a court of Philadelphia, "to get bread for their families," and for 499 of them to return to their families disap- ON THE PRinES OF AMERICAN LABOR. 413 pointed ; nor is it likely that an ex-governor of any state will shed unavailing tears, because he was impoverished by the hard times of that era. 'J'he president and his secretary, apparently, did not think of tliis; they do not seem to have well considered, how much it is worth to labor, to be secure of employment ; nor weie they well advised about the wages of labor, under the tariff of 1842, as the following facts will show : — For some two or three years before the tariff of 1842, most of the manufocturers of the country were obliged to compound with labor, at low wages, in hope of better times, or suspend operations. The Hon. Abbott Lawrence, in his second letter to ihe Hon. William C. Rives, of Virginia, dated Boston, January IG, 1846, says: " I will give you an example of the rate of wages under low duties, and under the tariff of 1842. In 1841-'2, the depression in all kinds of business became so oppressive, that many of the manufacturing establishments in New England were closed, and the operatives dismissed, the mechanical trades were still, and ev- ery resource for the laboring man seemed dried up. In the city of Lowell, where there are more than thirty large cotton-mills, with from six to sixteen thousand spindles each, it was gravely consid- ered by the proprietors, whether the mills should be stopped. It was concluded to reduce the wages. This was done several times, until the reduction brought down the wages from about $2 to SI. 50 per week, exclusive of board. This operation took place upon be- tween 7,000 and 8,000 females ; the mills ran on ; no sales were made of the goods ; the south and west had neither money, nor credit; and finally, it was determined to hold out, till Congress should act upon the tariff. The bill [tariff of 1842] passed, and of course the mills were kept running, which would not have been the case if the act had been rejected ; and now the average wages paid at Lowell — taking the same number of females for the same service — is $2 per week, exclusive of board. Yet, Mr. Walker says, labor has fallen. Where are wages of labor, I ask, lower than they were in 1842 ? Who is to be benefited by the adoption of a system that gives up everything, and gives no reasonable promise of anything?" The same is true of the larjje manufacturing towns of Manchester and Nashua, New Hampshire. The Hon. Mr. Ramsey, of Penn- sylvania, in his speech on the tariff, house of representatives (see National Intelligencer, September 1, 1846), represents, that, from 1837 to 1842, a large portion of the miners and laborers in the 414 THE EFFECTS OF A PROTECTIVE SYSTEM minino- reo-ions of that state, were out of employment ; that the la- borers who got work, received only from S3.50 to $4 a week — and miners only from $5 to $6 — generally paid in goods, equal to 15 or 20 per cent, discount ; and that in lS45-'6, laborers got from $5 to $6, and miners from $8 to $10, cash — average increase, 30 per cent. This, in amount, was generally, if not universally, true of the manufacturing establishments of the country, of every description ; and it was equally true in every department of life, that em])loys labor. Employinent was never wanting under tiie tariff of 1S42, and wages did increase — an average of full 25 per cent, higher than they were before. For further statistics on this subject, see note below.* The wages of labor in the mechanical trades, on railroads and canals, in agriculture, in common job-work of cities and towns, and * Everybody knows what savings-banks are instituted for, viz., to afford to labor a secure deposite for its savings. They now exist in many parts of the coun- try, and are a great blessing to the laboring poor. There are two items in the history of these institutions which are probably better evidence of the employment and prosperity of labor, than any or all other that could be given, viz., the com- parative numberof depositors and the comparative amount of deposites in a course of years. In the state of Massachusetts, the banks of savings are obliged by law to make annual returns to the legislature, of which the following are quotations for three years : In 1841, the number of depositors was 39,832 ; the amount of de- posites, $6,485,424. In 1842, depositors 41,102; deposites $6,675,878. In 1845, depositors 54,256; deposites $9,214,954. The first two years were under the dis- astrous period that preceded the tariff of "42; the last was the third year of the operation of that tariff. The comparison is instructive, and to the point. The increase from J841 to 1842, was about 3 per cent, on depositors, and about 3j per cent, on amount deposited. The difference between 1842 and 1845, was about 32 per cent, on depositors, or nearly II per cent, per annum; and about 38 per cent, on amount deposited, or nearly 13 per cent, per annum. The amount of deposites in the savings-bank at Lowell, was, in 1841, $448,190; in 1842, $478,365; in 1843, $462,650; in 1844, $591,910; in 1845, $730,890. At Portsmouth, New Hampshire, in 1842, $220,636; in 1846, $336,960. At Saeo, Maine, in 1842, $29,667; in 1846, $48,157. It is believed that ihe>e facts require no comment, as it is well known for whom these institutions were established, and what classes of persons use them. The details of ihese statistics for about thirty banks of savings, will be found in Fisher's National Magazine, for March and June, 1846, proving the same thins, viz., that bibor was never so prosperous, and never laid up so much, in a given time, as under the tariff of '42. The following is from the same masazine, for March, 1846 : — " Within the past year 200 houses have been built in Pawtucket, and the ad- joinins villase of Central Falls, all by the hands employed in the manufactories of the two places, some of which have cost upward of $2,000. ''The deposites in the Pawtucket savings-bank, amount, on an average, to $70,000. "The following are the prices paid for waxes, in the years 1842 and 1845. They all relate to the same hands who were employed in both years :— ON THE PRICES OF AMERICAN LABOR. 415 in every pursuit throughout the land, in the two periods under con- sideration — the former universally known as disastrous, and the latter as prosperous — are too well known to those concerned, to require certificates from other authorities ; and there can be but one voice from all these quarters, which, for one reason, we are sorry to say, is most remote from verifying the statements of the president and his secretary, above cited, on this subject. All the world know it is not so, and it ought not to have been necessary to adduce evidence on the point. But such are the facts, whereas not a single fact was cited by these public functionaries, to substan- tiate their assertions. The secretary also says: "When the number of manufactories is not great, the power of the system to regulate the wages of labor, is inconsiderable ; but as the profit of capital invested in manufac- tures is augmented by the protective tariff, there is a corresponding increase of power, until the control of such capital over the wages of labor becomes irresistible." Wages for Dec. 1842. Dec. 184.5. "V\''ages for Dec. 1842. Dec. 1845. Female Weavers $1112 $17 03 Female Weavers $11.30 $18 64 " " 1116 18 80 Engineer, per day... 133 175 « " 10 76 17 80 Machinist 133 175 « « 12 60 2185 Firemen 75 100 « " 13 32 17 27 Sparegirls,perweek..l8to2Is. 4 00 " Before the protective duty was enacted, the best workmen could only obtain one dollar per day ; the same men now receive one dollar and a half per day." Another important item of evidence on this subject will be found in the same magazine for May, 1846 : — " Mr. R. Fisher : Sir — In answer to your queries on the subject of labor in the following years, we state as follows : — The Price of Wages per Day, for Masons and. Laborers, in the Month of May, in the fall on- in g Years : — 1832. .Masons, 13 shillings. Laborers, 7 shillings. 1835.. « 14 " " 8 " 1836.. « 17 " " 10 " After the great fire in New York. 1837.. " 15 " " 8 « 1838.. " 13 " « 7 " 1839.. " 13 " « 8 " Great expansion of the currency. 1840.. " 12 « « 6 " 1841.. " 12 " " 7 " 1842.. « 11 " "7 " 1843.. " 12 " " 7 « 1844.. " 13 « " 8 « 1845.. *< 14 " « 8 « "In addition to the rise in the wages, from 1842 to 1845, there have been em- ployed from 50 to 75 per cent, more men than there were from 1838 to 1842. "Joseph Tucker, Amos Woodruff,. ,, , . . , „. « Wm. Tucker, James w..« C Mechanics in the City "James Harriot, Samuei 'IteiC Wtlt IIV/LIJ * K^JKjyj i%J A VJT-fc., Woodruff, i „ , . . , , „, r Mechanics in the C ZL Oliver, ) "f ^'"^ Y'^^' 41G THE EFFECTS OF A PROTECTIVE SYSTEM Here is a double assumption, involving two untruths. Tf man- ufactures were movopolies, as they are sometimes falsely called, that is, if they had exclusive privileges — for nothing else can be a monoj)oly — then there might possibly be some foundation for such a statement. But the more manufactories are encouraged, multi- plied, and extended, under a protective tariff, and the more capital there is vested in them, so much greater are the chances of labor, and so much greater is its relative power. When the manufactories are few, and the competition between them small, their power rela- tive to labor is greater ; but when they become numerous as com- petitors, and rich in capital, their rivalship with each other is all for the advantage of labor. In the former case, labor pays court to them, and is obliged to receive terms: in the latter, labor dictates terms, and becomes the object of courtship. The effect of low wages is to demoralize, to debase, to de- grade man, and render him unfit to aspire to freedom, and unfit to enjoy it. Working ever for a bare subsistence, and hardly that, without hope of a better condition, leaves no place for pride, self-respect, and ambition. That debasement of mind, which is everywhere observable among the laboring classes of Europe, whose task is hard, and whose prospect of an im- provement in their condition is hopeless, is the necessary effect and uniform concomitant of such a doom. Reduce those de- pendent on labor in the United States — which comprehends a ma- jority of the people — to such low wages, by the establishment of Free Trade, which would be the inevitable result, and the moral effect would be the same. The character of the people would be entirely changed. The goverimient would be changed — all would be changed. Labor would then be the agent of j'oicer, and not an indi pnident agent. The power of foreign pauper labor over the labor of American freemen, is not vested in itself, but in the arm of its oppressors. It is a mere agent of the latter. Nor can that power be abated, except by a change of political society in those quarters, for the emancipation of labor. So long as political society is the same there, and the same here, there can never be a time when " the protected arts" in the United States, "shall have acquired such strength and perfection as will enable them subsequently, unaided, to stand up against foreign competition." No matter what strength, no matter what perfection tliey may acquire, they will never be strong enough, never perfect enough, to employ free labor at a fair ON THE PRICES OF AMERICAN LABOR. 417 price, in a field of competition with tlie same arts worked by forced labor at a price which barely supports existence. The question, then — the great, practical, momentous question — is, shall European capital and labor, in a field of open and Free Trade, be permitted to bring American capital and labor, that is, American society, down to the same level ? Or shall American society, by the American government, •jirotrct American capital and labor, and maintain the position to which the cost of American freedom has elevated them? The great batde of the world is between freedom and despotism; and more than in anything, or all things else, the yjyrwz under which that contest is now carried on, is between European capital and labor on one side, and American capital and labor on tiie other. On this pivot turns the destiny of nations. Sustain the position of American capital and labor, that every man may be secure of the fair reward of his exertions, however humble his birth and calling, and freedom will prevail all the world over. The American peo- ple, V7iifrd and resolved in this great emprise, can beat the world — the wlivh world — and crumble into dust the bulwarks of despotic sway. But, let European capital and labor, in the hands of Eu- ropean despots, PREVAIL against American capital and labor, for want of protection to the latter, and there is an end of freedom, till another cycle of ages, with its sad round of experience, shall burst the chains again, and they who succeed shall better appreciate their duty and their chances. The batde for American freedom was only begun in the estab- lishment of American independence. The commercial systems of Europe are more to be feared than all the power of European arms. It is much to say, yet it may be true, that a perpetual war would be less expensive and less perilous than the effects of this occult, silent, insinuating, all-pervading power, if unresisted. 27 418 THE EFFECTS OF A PROTECTIVE SYSTEM CHAPTER XXVII. THE EFFECTS OF A PROTECTIVE SYSTEM ON THE INTERESTS OF AGRICULTURE. Not true that Agriculture lias no Share in the Benefits of a Protective System. — Facts and Statistical Evidence on this Point. — Breadstuff^, in ordinary Seasons, cheaper in Europe than in the United States. — The Effect of Indirect Protection of Agriculture — Protec- tion of Slave grown Staples — Slave Labor in the United States needs Protection more than Free Labor. — All Nations can and intend to supply their own Mouths. — Great Britain the greatest Exporter of Agricultural Products, of any Nation in the world. — Evidence of William Brown, Esq., on this Point. — The Importance of this Fact in a System of Public Economy. — Statistics showing that Europe is Independent of the Uni- ted States for Breadstuffs. — The Problem as to whether American Indian Corn will find a permanent Market in Europe. — European Agricultural Labor will always beat Amer- ican Agricultural Labor in Market, because of its Low Price — The Effect of a Protec- tive System in sustaining and raising Prices of Agricultural Labor and Products. — Showing of the Effects of certain Items of the Tariff of 1846 on the Interests of Amer- ican Agriculture. The influence of a protective system on agriculture, has been, in no small degree, already set forth in these pages. Nevertheless, it is a point of too much importance to be passed over, so long as other evidence, of an equally impressive character, remains to be considered. It is sometimes erroneously supposed and maintained, that far- mers and agriculturists have no share in the benefits of a protective system. If, indeed, what is thus falsely asserted, were so far true, as that they should receive no direct protection, it will yet appear, that the protection they receive indirectly, under such a system, is not only most important to them, but would in itself be an abun- dant compensation for the sacrifices which, it is alleged, are im- posed upon them, but which, however, as will be seen, are no sac- rifices at all. But it will appear that the direct protection provided for agriculturists, under the system, is on an average as great, or greater, than that which is afforded to manufacturers and mechan- ics. For example, the direct protection granted by the tariff of 1842, to the following articles, wool, hemp, beef, pork, hams, bacon, cheese, butter, lard, potatoes, flour, wheat, and raw cotton, was an average of about fifty per cent., which is at least equal to, and some- what above, the average protection granted to any other class, man- ufacturers, mechanics, or whatever; and protection to most of these products of agriculture is very important, when the crops are good ON THE INTERESTS OF AGRICULTURE. 419 and other of these articles are abundant in all parts of the world. Before the potato-rot fell upon Ireland, an impost of ten cents a bushel could not keep this vegetable from being imported into the United States in considerable quantities ; and the secretary of the treasury estimated an increase of its importation, by the reduction of the duty in the tariff of 1842, by that of 1846, from 36 to 20 per cent., so as to add to the revenue $150,000. The annual average of our imports of wheat, from 1S31 to 1844, inclusive, was 425,442 bushels; and in 1837, we imported 4,000,000 of bushels, and 2,389,102 bushels in excess of our exports. And the aggregate excess of exports of wheat over imports, for these fourteen years, was only 5,065,390 bushels. \_Sce Fishe/s Sa- tioiial Magazine, for April, 1846.] The importance of direct protection for wheat and other grains, will appear from the facts that, in years of ordinary plenty, they are cheaper in Europe than in the United States, and that the cost of transportation from Europe to our ports, is less than from the west of our country to the east. The average price of wheat per bushel, at the following places in Europe, from 1830 to 1843, in- clusive, viz., at Dantzic, was 91 cents; at Hamburg, 90 cents; at Amsterdam, 99 cents ; at Antwerp, 98 cents ; and at Odessa, 64 cents. The average price at the seaports of the United States, for the same years, was $1.25. The cost of transportation from Michigan to New York, is 30 cents per bushel ; and from Europe, not over ten, sometimes down to six cents. From the Mediter- ranean, it costs from 12 to 16 cents per bushel. The average cost of transportation of wheat from the western country to New York, may be put down at 3 to 1 of the cosl from Bremen to the same point. In 1836 and '37, years of short crops in the United States, large quantities of barley were imported on commission for brew- ers in New York, Albany, and other towns on the Hudson, at a cost, including all expenses, of 55 cents per bushel, when the mar- ket price here was about one dollar; and large quantities of rye were imported for the same object, at a cost of 63 cents, when the price here was $1.25. [hel. The difference in the freight and first cost would make a balance against us of 41 cents per bushel. But as the year 1837 was one of uncommonly high prices in this country, I will omit that year in my estimate, which will reduce this balance down to about 36 cents; and from this I will deduct, for the diflerence of exchange, 10 cents, which will bring the difference down to 26 cents per bushel. "The English consul, writing from Odessa, at the close of 1842, says: Under present circumstance.", extraordinary low freight and favorable. exchange, a ship- ment of the best wheat could now be made and delivered in England on the fol- lowing terms, viz. : — First Cost 22s. 6d. per quarter Charge of loading 2 5 " Freight 6 7 " Insurance and Factorage in England 4 " Total 35 6 " "This reduced to our currency would amount to 97 cents per bu.shel delivered in England. And in 1843 there was a still further reduction : so that wheat from the Baltic could be delivered in England without duty at 87 cents, and from the Black sea at 78 or 80 cents per bushel; a price much less than our wheat could be purchased at in our own ports." 428 THE EFFECTS OF A PROTECTIVE SYSTEM of the United States, exclusive of Texas and Oregon, is adapted to the cuhure of wheat; fourthly, that the wages of agricultural labor in Europe are not over one fourth of the wages of the same kind of labor in the United States ; fifthly, that the average price of wheat in Europe, for a course of years, and with ordinary crops, sufficient to establish a general rule, is but a little in excess of two thirds of the average price in the United States, under like circum- stances ; sixthly, that the cost of transportation from the wheat- growing countries of Europe to those parts where their surpluses are in request, is, by a very large fraction, less than the cost of carrying from the United States to the same markets ; and seventhly, that the exports of wheat from the United States have not mate- rially increased for the last fifty years. We are aware it is thought by many that Indian corn will here- after be the great export of bread-stuffs from the United States to Europe. That, however, is yet not only an unsolved problem, but one at least of a dubious result. Mr. Brown, cited above, says: •* I am afraid we could not get a very large supply of Indian corn, as the bulk, compared with the value, would make it a very ex- pensive article of import." The demand for it, in 1847, by starv- ing millions, is no guide for the future. It is the interest and policy of all nations to supply themselves with bread-stuffs from their own domains as far as possible ; atid there is no part of the world better fitted, or better able to do it, than Europe. It n)ay therefore be predicted that this expectation of finding a market in Europe for our Indian corn, to any great extent, will be turned into disap- pointment. The question is simply, whether Europe will supply its own mouths, as it ever has done; and there is little doubt that it will, in years of good crops. But, however well pleased the starving people of Great Britain and Europe may be with our In- dian corn, when Providence has cut off" their crops, it is morally certain, when they are blessed with good crops again, that they will not be customers to American labor to fill the mouths which can be fed for one half or one fourth the cost by European labor. It is the comparative cheapness of European labor that will necessa- rily and for ever, in ordinary times, exclude American bread-stuffs and other esculents, for the most part, from the European market. Even if the wages of American labor should be brought down to the same level with those of Europe, still the difficulties of obtain- ing the European market, to any considerable extent, for the prod- ON THE INTERESTS OF AGRICULTURE. 429 ucts of American agriculture, which are common to both parts, would be insuperable. It can never be relied upon. The question, then, arises, where is American agricultural labor to look for an adequate and secure reward ; and where are Ameri- can agricultural products, common to Europe and other countries, to find a permanent and reliable market, that will be remunerative to the parties concerned? This is the question, and the great question, which can be answered only by a consideration of the effects of a protective system on these interests. The effects of direct protection, in these particulars, have already been consid- ered. It remains to notice its indirect effects, which are more comprehensive and more important. To avoid repetition, as far as possible, we must take leave to refer to chapter xxv., for a con- densed view of cumulative evidence on this point. All that is there said of the reciprocal influence and benefits of new arts and new pursuits, which a protective system calls into being; of their influ- ence and benefits on all pre-existing arts and pursuits; and of the aggregate influence and benefits of all arts and all pursuits on each and every other under such a system, belongs to this branch of the suhject. Much is there exhibited of the benefits accruing to agri- culture from this system, which it is unnecessary to repeat here. But still, little more than glimpses of these benefits are there pre- sented. They consist of two principal classes : first, in a protec- tion of American agricultural labor from being forced into a com- petition with the low-priced labor of the same kind in Europe and other foreign parts ; and next, in creating a home market for Amer- ican agricultural products, and in securing for them better, firmer, and more reliable prices : thereby sustaining and enhancing the value of American agricultural labor and capital. It is manifest, that when the products of American agricultural labor are brought into a free and open market with the products of European and other foreign labor of the same kind, the labor itself is in the same market; and that the tendency is to reduce the price of American labor to that of foreign labor. We say the tendency, and that tendency will be instantly felt on the side of American labor. We have before indicated the reason why Amer- ican labor, in such a case, will not come entirely down to the old level of Euroj)ean labor. The water of one cistern which is higher than that of another, will raise the other, by being let off into it, before both come to a common level. If the capacity of the two cisterns were equal, the common level would be found midway of 430 THE EFFECTS OF A PROTECTIVE SYSTEM the difFerence. But the American cistern is a very snnal] one com- pared with all the rest of tiie world, and being let off, would fall immensely, while the other would scarcely seem to rise. American labor can not tell why, for it does not understand the subject, except instinctively ; but it is distressed the moment it is forced into any degree of competition with European and other foreio-n labor, for want of adequate protection. First, there is a less active demand for American labor in such a case ; and next, its prices begin to fall. It is embarrassed to tell why, unless it be well instructed on the subject, and has thought of it much. But it feels it, knows it, is distressed by it. The effect is as certain to follow the cause, as the sun is to rise at his time and place. It is a com- mercial result, enforced by the operation of a well-known commer- cial principle, to wit, competition in trade. But, as the interests of American agricultural labor can not be separated from those of American agricultural capital, and as the value of each is determined by the prices which their joint products are able to command in the market, it matters little which of these three things, the labor, or the capital, or their products, is under consideration, for the purpose now in view. The inquiry regard- ino- each leads to the same end. Everybody knows how quick the farming interests feel the benefits of a new manufactory, or a new manufacturing village or town, that has sprung up in the midst of them, under a protective system. The farms instantly rise in value ; some of them, in the neighborhood, are turned into gardens, the most profitable species of husbandry ; a new and lively market is opened for agricultural products ; agricultural labor is in greater demand, and better paid ; its products command a higher price ; and in this way, the increase of manufacturing establishments over the face of the country, under the fostering care of the same sys- tem, diffuses the same benefits over the agricultural interests of the whole land. The operation is simple, and may easily be explained. In the first place, the market is brought home to the door of agri- culture, instead of being remote in a foreign land. Next, the wants supplied, and the profits made, by the sale of agricultural products, are supplied and made at home, and the capital, on both sides, is in the country, stays here, is used here, and by being turned over and over again, in different hands, to different productive ends, is the cause of ceaseless and cumulative wealth among all parties ; whereas, if the same wants had been supj)lied from abroad, this capital would have gone abroad, and been lost to the country for ON THE INTERESTS OF AGRICULTURE. 431 ever. In all these transactions, and as a consequence, be-fides the benefits to the agricuhural interests, and besides the activity and profit which they afford to every species of business connected with them — and it extends to all kinds of business — there are constantly growing up in the country, those great interests, with increasing amounts of capital, which, having been first the cause of these wide- spread and universal benefits, are the perpetual nurturers of the same, imparting benefits to all, and receiving benefits from all. It is the creation of a new and countless family of interests, allied to each other, and all profiting by the active operations of which they, in such connexion, and by such reciprocal influences, are the cause. The country and all parties are enriched. Thirdly, it increases the diversity of labor, brings new customers to every vocation, and makes each more profitable by diminishing relatively the number engaged in it. Fourthly, one of the chief benefits of such a system to agriculture, is, that it appropi'iates to itself thereby, what would otherwise be expended in the cost of transportation of its products to a foreign market, by having a home market. The practical oper- ation o[ a protective system, for the increase of prices of agricultural products, may be thus explained : All agricultural products are comparatively gross and heavy, and consequently more expensive in being carried to a remote market. Suppose the cost of trans- portation from the remote west to the eastern market be 100 per cent. In other words, that the products are only worth Iia/f as much in the place where they are grown, as in the place where they are consumed. Add as much more for the expense of deliv- ery in a foreign market, and the price to the producer is reduced to one third of the price at the place of destination. But bring the market half way toward the producer, and the price is raised one third. . Bring it to his door, and his price is tripled. This is the principle of Protection, though these may not be the exact measures of its operation in the supposed case. By encouraging and protecting domestic manufactures, the market is brought home, and the expense of transportation both ways is saved. Farther : All who work at manufactures and trades established by a protective policy, are withdrawn from agricultural pursuits, and give to the residue em- ployed in agriculture better chances for a ready market and high prices. The umltiplication of useful crafts and vocations contrib- utes to the profit of each, as well as to national wealth. A home market is more steady and more secure, as well as better for prices. And the money paid for products of domestic manufacture, instead 432 THE EFFECTS OF A PROTECTIVE SYSTEM of going abroad, and thus impoverishing the nation, stays at home and enriches it. But the following story, alleged as veritable fact, is yet more pertinent, and more forcible, in the instruction it affords, on this point : A farmer in Illinois wrote a letter to his friend in the east, in 1842, complaining that he could get only 31 cents a bushel for his wheat, 25 cents for beans, 10 cents for corn, 1^ cents a pound for beef and pork, 2^ cents a pound for tobacco, &c., stating that he had to fiay Jive dollars, or which is the same thing, 16 bushels of wheat, or 20 bushels of beans, or 26 bushels of corn, or 300 pounds of pork or beef, or 200 pounds of tobacco, ])er yard for British broadcloth to make him a coat. The cost of this yard of cloth at the manufactories in England, was probably about three dollars, or three bushels of wheat, as usually sold in the market there. That is, the producer in England received for the cloth o/ieji/fh of what was charged to the farmer in Illinois. Who got the difference? If the manufacturer had been in Illinois, or anywhere in this coun- try, tlie farmer might have got his yard of cloth by a greatly less quantity of his own products, and the manufacturer would have made a market for the farmer's beans, corn, pork, beef, &c., at a good price. This is the true operation of the protective system on agri- culture and other interests of the country — especially on those of agriculture. No others are benefited so much by it ; and no others are so much injured for want of it. It was proved by a report made to the 28th Congress, house document No. 420, 1st session, that, while the prices of a few agricultural products were slightly depressed, under the first two years' operation of the tariff of 1842, by those accidents to which such products are ever liable from va- riations in the seasons and other transient causes, there was a gen- eral rise of prices, the average of which, in a majority of -all the cases, was 25 per cent. Not to overlook or depreciate the benefit of a protective system in raising the prices of agricultural products and labor, in the long run, nevertheless, its effect in sustaining such prices against the de- pressing influence of the low-priced labor of foreign parts, is alto- gether the most important. The people of the United States should not be deceived by the transient effect in raising the prices of Amer- ican breadstuffs, in consequence of the short crops in Europe, in 1845 and 1846. This state of things was extraordinary, and the moment crops are abundant again in that quarter of the world, or even tolerable, the reaction in reducing the prices of American ON THE INTERESTS OF AGRICULTURE. 433 breadstiifFs, will be beyond all precedent, if the seasons should be equally favorable here, inasmuch as American farmers will naturally be tempted, under this encouragement of hiirh prices of breadstuffs, to turn their attention more to their production, the result of which, in the case supposed, will be large surpluses without demand. Neither American agricultural labor, nor labor of any other kind, can stand up against the low-priced labor of Europe, on a Free- Trade basis, all other things being equal. According to the annual report of the secretary of the treasury for 1845, our average annual imports of woollen fabrics, for the twenty-six previous years, were upward of ten millions of dollars in value, half of which was an agricultural product — wool. The secretary estimated, that, by reducing the duty from 40 per cent., as it stood in the tariff of 1842, to 30 per cejit, for the tariff of 1846, the importations of this species of merchandise would be increased two millions of dollars a year. It is evident, however, that the secretary's estimate of the increase of imports was by far too low for an augmentation of the revenue, which was his declared object. The reduction of duty is 25 per cent. To make up, therefore, for the abatement of 25 per cent, of the duties on ten millions of imports and upward, there must be an increase of im- ports of at least five millions, instead of two. Not knowing what amount of increase of revenue was aimed at, it is impossible to say what other increase of imports would be required. Say, however, two millions and a half; which would make the entire increase of imports seven millions and a half. Half of this, or three millions- and three quarters, would be an import of wool ; in other words, it would involve the transfer of the raising of, and the market for, $3,750,000 worth of wool from American farmers to British and other foreign producers of this article — not to speak of the wrong done to other kinds of American labor that is entitled to be em- ployed in the manufacture of this seven and a half millions worth of goods ; and not to speak of the general depression of prices in this and other American agricultural products, by reason of this increase of imports. The same with iron. For the fiscal year of 1845, the aggregate value of the imports of this article and its manufactures, as stated in the report of the secretary of the treasury, was $9,043,396. He proposed to reduce the duty from 75 per cent, under the tariff of 1842, to 30 per cent., as it was fixed in the tariff of 1846 ; and thereby to obtain an additional importation of $1,185,000, as he 28 434 TIIK KFFECTS OF A PROTECTIVE SYSTEM estimated. But here, again, is the same mistake in the estimate, as in the case of the woollen goods, the ohject of the reduction of duties beinf to increase the revenue. The reduction is from 75 per cent, to 30 ; that is, more than 50 per cent, abatement of duties on a given amount of imports ; and the imports of the previous year having been $9,043,396, therefore, to obtain an equal amount of revenue by such a reduction of duties, there would be required an import of at least $20,000,000. To increase the revenue, the im- portations must be more than doubled. But it has been proved, that at least four fifths of the value of iron and its manufactured products, consist in products of agriculture which enter into them. Consequently, if the design of this measure should be realized, the farmers of the United States would be deprived of a market for their produce, to the amount at least of eight millions of dollars, in the case of this single article. To say nothing of the effect of such a cause on the prices of agricultural products, to depress ihem — which would be the natural and unavoidable consequence — this positive loss of market is no trifle. By reducing the duties on coal from 67 per cent., as it was un- der the act of 1842, to 30 under the act of 1846, the secretary estimated an increase of imports of this article in the sum of $5, 1 50,000. All this, of course, is a transfer of so much business, and of so much labor of one kind or another, from Americans to foreigners ; and one of the worst features of it is the draught which it must make on the money of the country. To show how farmers are interested in this large and important item of the secretary's public economy, and how they must be affected in its practical op- eration, it is only necessary to refer to, and unnecessary to repeat here, the statistics on this subject before cited from the Hon. Mr. Ramsey, of Pennsylvania. It is evident enough, that such an ad- ditional importation of foreign coal, could not fail to produce the most disastrous effects on all Americans — and they are scores of thousands — engaged in this business; and the farmers would not be the smallest class of sufferers. These three items of wool, iron, and coal, though relatively of greater importance than most others, are but the beginning of the long list of articles on which this new policy — not, indeed, for the first time heard of, but for the first time reduced to experiment in the United States — is brought to bear with the same effect and result, and in which, of course, all the agricultural interests of the country are deeply concerned. There is not a class of man- ON THE INTEaESTS OF AGRICULTURE. 435 ufacturers, or of mechanics, or of tradesmen, or of artists, or of any of the persons engaged in the ahnost countless pursuits of Hfe, other than that of agriculture, which the faimers of the country do not or ought not chiefly to supply with food ; and none of all these which they do not or ought not, to a very great extent, to supply with clothing. It is their natural, social, political right, in prefer- ence to the claims of foreigners to do the same things. It is their natural right, because they are in places contiguous ; it is their social right, because they are neighbors; and it is their political right, because they and all these parties are members of the same political commonwealth. And yet, it was openly proposed by the secretary of the treasury of the United States, in his project of a public policy, established by the tariff of 1846, in addition to what is noticed above, to increase the imports of boots and shoes, $45,000 ; of ready-made clothing, S200,000 ; of blacksmith's work, $200,000; of hats, $110,000; of leather, $100,000; of glass, $100,000; of paper, $150,000; of hemp, cordage, &c., $275,000; of pins, $50,000; of salt, $1,000,000; of sugar, $630,000; of wool, unmanufactured, $200,000; of potatoes, $150,000, &c., &c. And many of these estimates are as much below what would be required for the necessary revenue, under the reduction of duties fixed by the tariff of 1846, as those given for woollen goods, iron, and coal, as above noticed. So much business, and all the profits thereof, it is proposed, by an American government, to take out of the hands of the American people, and give to foreigners. And Americans, by being thus forced to buy what they could produce, and wish to produce, and the production of which is necessary to their welfare and happiness, are forced to bear the immense system of foreign taxation on all these imports, at the same time that they are impoverished for want of the work. But to show yet farther how farmers are affected by this policy, we shall avail ourselves of the following extract from a speech of the Hon. Andrew Stewart, of Pennsylvania, delivered in Congress, May 27, 1846, in part a repetition of what we have already given, but in a different form, and well put: — " With all the protection we now enjoy" [under the tariff of 1842], said Mr. Stewart, "Great Britain sends into this country eight dollars' icorth of her agricultural productions to 07i(' Jol/ur^s worth of all our agricultural productions, save cotton and tobacco, that she takes from us. I assert, and can prove, that more than half the value of all the British merchandise imported into this 436 THE EFFECTS OF A PROTECTIVE SYSTEM country, consists of agricultural iiroclucts, changed in form, con- verted and mannfactured into goods. Take down all the articles in a store, one after another ; estimate the value of the raw material, the bread and meat, and other agricultural products which have entered into their fabrication ; and it will be found, that one half and more of their value consists of the productions of the soil — agricultural produce in its strictest sense. By reference to Mr. Walk- er's report, it will be seen, that, for twelve years back, we have im- ported from Great Britain and her dependencies annually, fifty-nine and a halfmillions of dollars worth of goods — call it fifty millions — while she took of all our agricultural products, save cotton and to- bacco, less than tivo and a /rtini» Meichants hostile to the Interests of the Coun- try — Statistics continued, w ith a Variety of Facts, mixed with Doctrine. — Commercial and Reciprociiy Treaties all bad, as proved hy Experience. — Recip'-ocily necessarily em- bodies the Principles of Free Trade — Fnrei^'n Commerce, under a Protective System, may be made to supply all the Wants of Government, without taxing the People. The interests of navigation proper, as the instrument of conn- merce, comprehend a very large department of labor — the labor of constructing the craft, of producing, collecting, and forming the materials, ;md the adventurous tasks of those who use and guide these instruments of commerce on the bosom of the deep. These are distinct branches of labor, employing a large portion of every commercial community. The materials of ship-building nearly all come originally, either from the forest, or from the culture of the soil, or from the mines, and consist chiefly of timber, hemp, iron, copper, &c. Sundry manufactures and a variety of the mechanic arts enter into the formation of these materials, and are required to adapt them to their ultimate design and use. It will be found that all these materials, and all the manufacturing and mechanic arts thus employed, as much require protection in their progress, from beginning to end, as anything else; inasmuch as there is no kind of labor put in requisition in preparing the materials for ship-build- ing, and in the construction of ships, which does not have to en- counter the antagonism of low-priced foreign labor, which would impair its rights, and drive it from the field, without the shield of protection. Nor does this prove, as Free Trade continually a.s- serts, that ships would cost less without a protective system. For the same great principle applies here as to all other branches of American labor, viz., protect it, and although its own prices, as labor, are higher, yet its products of manufacture and art will be cheaper than the imported products of foreign low-priced labor, if we are dependent upon them. This has been abundantly proved 442 THE EFFECTS OF A PROTECTIVE SYSTEM in another chapter, and in application to the most important mate- rials and parts of ship-building, timber, iron, hemp, cordage, cop- per, &c. It is true, indeed, that ships can be and are built on the shores of the Baltic at a cost very much less than in the United States, and it might seem, at a first view, to be for the interest of Ameri- can ship-owners and merchants engaged in navigation to order and import their ships already built and equipped. So it might seem to be for their interest to man them from abroad, inasmuch as for- eign sailors do not get but about half the wages of American sailors. We say it might seem to be for their interest. But the advocates of Free Trade always fall into a fatal error, and others are in dan- ger of being drawn along with them, by assuming that American consumers of the products of foreign low-priced labor can profit by it; whereas, the moment we allow ourselves to be dependent, we find everything costs more than when we are independent under a protective system. This has been proved in a former part of this work. In the same manner, if American ship-owners and mer- chants were permitted to buy and man their ships from abroad, and to trade in foreign bottoms, till American shipyards should be closed for want of work, as they doubtless would be, the same consequen- ces would naturally, not to say necessarily, follow, as in all other cases to which P^ree Trade leads: first, the employment of Amer- ican labor, and the use of American arts, are suppressed ; next, these being suppressed, and foreign labor and arts having ti)e mo- nopoly, and being in great demand, they could command their own prices ; thirdly, and consequently, it would instantly be found, in all such cases, as always before in all other similar cases, that prices would rise, and the same things would. cost more than at home un- der a system of protection. But the navigation-laws of the United States very properly for- bid such a course to American ship-owners and merchants, and it is therefore out of the question. They are forced to build and buy at home ; and it was for purposes of protection that these laws were enacted. They are among the strongest statutes ever foisted into a protective code, and are universally conceded to be impor- tant and indispensable. But for these laws, there would scarcely be an American bottom entering our ports from foreign parts, and our coasting-trade itself would be monopolized by foreign craft. For how could our own craft, which costs so much more, and our own sailors whose wages are so much higher than those of foreign ON THE INTERESTS OF COMMERCE AND NAVIGATION. 443 sailors, compete with such an opposition, on the basis of Free Trade ? It would be impossible. And it is seldom considered that Free Trade strikes at the root, at the foundation, of our entire system of navigation, and that it would be totally destructive of all its interests — of all the interests of ship-builders, of all the provi- ders of n)aterials for ship-building, of all the manufacturers, me- chanics, and artists, engaged in the various parts of work required for building and equipping ships, and of all the American sailors and navigators employed in our commercial marine. Not one of them could subsist in the reign of Free Trade applied to naviga- tion and to the building of navigating craft, except as their wages should be reduced to the level of the wages of foreigners engaged in the same employments ; which, indeed, would be the unavoida- ble result. In other words, foreigners having once monopolized the business, in all its branches, would keep it at their own prices. That those engaged in the pursuits connected with navigation, and in navigation itself, should expect to escape these consequences of Free Trade, as they bear on themselves, is a delusive hope, if Free Trade is to have full scope : and why should it not, if the doctrine be sound ? Such immunity would be a partiality which other classes of the community would hardly tolerate. All must stand under Protection, or fall under Free Trade, together. The theory of Free Trade knows no distinction or exception of pur- suits. The interests of navigation, as must be seen, are distinct from those of commerce, though both are often combined in the same parties. Navigation is the instrument or agent of commerce, and the carrying-trade is the source of its profits. Apart from the in- fluence of extraordinary events, such as the scarcity of provisions in Europe and other foreign parts, as in 1846 and 1847,* one of the surest rules of determining the effects of a protective system or the want of it, on the interests of navigation, is the comparative amount of tonnage employed in the carrying-trade, under these two states of things, respectively. It may, indeed, be called an infallible rule. Look, then, at the following facts : — It appears, by the United States treasury documents, that, in 1840, when Free Trade had brought down the country to the low- • The secretary of the treasury, in his annual report of December 9, 1847, has made an unjustifiable use of the increase of tonnage required to transport Ameri- can bread-stuffs to Europe, in consequence of short crops in that quarter in 1846-'?. He has also forced results on this point from other assumed data, which are incon- sistent with his own official tables. 444 THE EFFECTS OF A PROTECTIVE SVSTEM est depths of commercial ruin, still running down, the total tonnage of the United Slates amounted to 2,180,764 tons; in 1841, to 2,130,744 ; and in 1842, to 2,092,300 : showing a falling ofF in three years, before the passage of the tariff of 1842, of 88,464 tons, instead of a gradual increase, as it ought to have been. Af- ter the enactment of the tariff of 1842, the tonnage rose, in 1843, to 2,158,601 tons; in 1844, to 2,280,095; and in 1845, to 2,417,002 : being a gain in three years, under the tariff of 1842, of 258,401 tons. The tonnage built in the United States, in 1845, was greater by 28,000 tons than the average of the three prece- ding years, showing an increasing demand. From the same official records it appears that the tonnage which entered the ports of the United States, and cleared, in 1841, was 4,639,458 tons ; and in 1842, when the duties were down to the lowest ebb, 4,519,841 tons. But in 1844, two years after the passage of the tariff of 1842, it had risen to 5,812,168 ; and in 1845, to 5,930,303. These figures show a falling off from 1841 to 1842, when duties were lowest, of 219,617 tons ; and an in- crease in one year, from 1844 to 1845, under what are called high duties, of 118,135 tons. The tonnage which entered and cleared in 1845, was 1,410,462 tons more than in 1842, before the tariff of that year, dated August 30, had begun to take effect. These, as can not be denied, are strong facts, and directly to the point. They are, indeed, conclusive. The explanation of this result is, that a Free-Trade system in- creases the amount of manufactured imports, which are not only of great and ruinous cost to the country, by depriving home labor of employment, and drawing away money, but which employ the least amount of tonnage, and thus injure the interests of navigation. Free Trade also diminishes those imports — such as raw materials for home manufacture — which employ the greatest amount of ton- nage, and benefit navigation ; whereas, a protective system pro- duces a directly contrary effect in all these particulars, viz. : dimin- ishes imports of manufactured products, which are of little benefit to navigation ; increases those imports which make the profit of navigation, and give employment and profit to home labor ; and farther employs and encourages home labor, by securing to it the manufacture of those articles the import of which is discouraged by protection. There was perhaps never presented a more condensed, and at the same time full, view of this argument, than that which was ex- 0:\ THE INTERESTS OP COMMERCE AND NAVIGATION. 445 hibited by tlie Hon. Daniel Webster, In his speech delivered in the senate of the United States, July 2oth and 27th, 1S4G, when the tariff of 184G was under debate ; nor can we do better than copy his remarks and tables as a part of our own argument on this point. They will be found in the note below.* In further execution of the plan of this chapter, it is proposed here to consider only that portion of our commerce which is car- ried on between the United States and foreign parts, and to leave ♦ " Now, sir, 1 proceed to say something upon the influence, the necessary influ- ence, which this proposed change in our system will exercise, upon the commerce and navigation of the country. I shall do that by exhibitin? a series of tables which will speak for themselves ; which I know have been drawn up with great accuracy, founded on the last official communication of the secretary of the treasury, so far as revenue is concerned, and estimates regarding the value of freights, collected from the first mercantile sources in the country. Now, as a general remark on these various papers, and, which they fully confirm, I wish to say, what would naturally be expected to be true, that for some years past, since the favor and pro- tection of the government were given to the internal manufactures of the country, the foreign trade of the country has conformed to that state of things; and a change in the business of navigation, and commerce, and freight, consequent upon these internal changes, is quite as striking as these internal changes then)selves; and the great element of that change consists in a change in the nnture of the main articles of import, showinir a diminution of articles of manufactured charac- ter, and a vast augmentation of articles of the character of raw material, or bulky articles. The consequence of which, as will be seen by the tables I am about to exhibit, is a large actual increase of the earnings of the shipping interest on im- ports. Because all know that freight is proportioned to the bulk of the article, and not to its cost. It is the space that the commodity fills in the ship, and not its value, which regulates the rate of freight. Therefore it is, that though the im- portations may be greatly augmented in value, from being composed of manufac- tured articles chiefly, yet the freight is not increased in the same ratio, but may be diminished. That fact is notorious to all those acquainted with the commerce of the country. It is perfectly understood by all the ship-owners of the United States; and that fact is of itself sufficient to account for the great and important truth, that the navigation interest of the United States, the ship-owners, to a man, oppose this change of system ; because the existing system gives more employment to this navisation, than the system now attempted to be substituted for it. " Now, sir, a heavy mass or amount, in value, of manufactured articles, as is well known, comes from France and England. Our more various commodi- ties and our importations of heavy articles, come from round the capes, and from Brazil, and the north of Europe. The tables which I propose to exhibit to the senate, will show the amount of these, respectively, and the change produced in them within the last five years. Now, sir, let me premise, that articles of im- port into the United States are properly divisible into three classes. First, those articles which come here manufactured, and fit for use or for sale; secondly, arti- cles not manufactured, brought here for consumption as imported, without any manufacture after they arrive; thirdly, those articles which are in the nature of raw materials, and are brought here to undergo a process of manufacture. Let us, then, see the amount of freight derived from these three respective classes of im- ports : — 4-16 THE EFFECTS OF A PROTECTIVE SYSTEM the coastinii business to be noticed with the home trade, of which it is a part. It might seem at first sigbt, that a pubhc pohcy which Net Imports, m 1845, of Foreign Manufactured Articles. Articles. Value in Dolls. Duties in Dolls. freights in Dolls. Silk 10,840,000 2,968,000 3(5,100 Wool •• 10,750,000 3,755,000 80,625 Cotton 13,360,000 4,908,000 133,360 Flax "... 4,893,000 1,263,000 48,930 Iron 4,022,000 1,607,000 120,360 Railroadlron 1,000,000 600,000 96,000 Cigars 1,086,000 30.5,000 25,000 Brass and other Metals 3,690,000 688,000 55,500 Earthern and Glass Ware... 3,122.000 2,087,000 218,540 Clothing, ready made 1,108,000 449,000 11,0S0 Hats and Bonnets 732,000 256,000 10,980 Leather, Boots, and Shoes.... 848,000 242,000 12,720 Paper 276,000 60,000 4,140 Cotton Ba-sing 102,000 56,000 1,530 Other unenumerated Articles 3,000,000 2.50,000 75,000 Total 58,829,000 18,494,000 929,865 Foreign Articles for Consumption as Imported. Articles. Value in Dolls. Dutis in Dolls. Freights in Dnlla. Coffee 5,380,000 Free. 943,580 Tea 4,809,000 Free. 343,000 Sugar [proportion of] 2,024,000 1,067,000 375,000 Wines 1,493,000 1,292,000 111,925 Spirits 1,09.5,000 1,554,000 109,.500 Fruits and Spices 1,480,000 560,000 124,000 Molasses [proportion of]... 1,000,000 300,000 280,000 Salt 883,000 678,000 247,000 Coal 188,000 130,000 188,000 Fish 300,000 50,000 30.(100 Beer, Ale, and Porter 90,000 19,000 8,000 Other unenumerated Articles 1,500,000 89,000 225,000 Total 20,242,000 5,735,000 2,985,005 Foreign .Articles for Manufacture in the United States. Articles. Value ii D'llis. Duties n Dolls. Freights in Dolls. Sugar [proportion of] 2,02.5,000 1,510,000 562,500 Molas.'jes [proportion of].... 2.072,000 591,000 450,000 Iron [proportion of] 2,966.000 1,401,000 415,000 Steel 750,000 97,000 25,000 Hides and Furs 4,706,000 332,000 610,000 Copper and Brass 1,951,000 Free. 140,000 Mahogany 248,000 40,000 49,600 Wool.". 1,667,000 123,000 330,0.50 Rags 416,000 27,000 75,000 SaUpetre 486.000 . Free. 245,000 Hemp 483.000 173,000 78,000 Indieo 768,000 53,000 15,000 Dye-stuffs, &c 294,000 Free. 190,000 ON THE INTERESTS OF COMMERCE AND NAVIGATION. 447 is beneficial to navigation is so to commerce; and for the most part, and in the long run, it is, though the evidence is not all of the Articles. Value in Dolls. Duties in Dnlls. Freiglits in Dolls, Bristles 178,000 3,000 4,000 Camphor 143,000 35,000 3,000 Dye-Woods 337,000 Free. 50,000 Linseed 369,000 19,000 205.000 Raw Silk 710,000 173,000 12,000 Other unenumerated Articles. 2,000,000 100,000 295,000 Total 22,569,000 4,677,000 3,754,150 Recapitulation. Valiip ill Diilla. Duties ill DnIIg. Freights in Dnlls. Foreign Manufactured Articles... 58,829,000 18,494,000 £29,865 Foreign Articles ibr Consumption. 20,242,000 5,735,000 2,985,005 Foreign Articles for Manufacture in this Country 22,569,000 4,677,000 3,754,150 Aggregate 101,640,000 28,906,000 7,669,020 "Now, sir, I have said that changes have taken place in the foreign trade of the country since the enlargement of the manufacturing s5'stem of the United States, which were naturally to be expected. And I think it was suggested the other day, by my friend from Vermont, near me (Mr. Phelps), that a common and great mis- take is, that we do not accommodate our legislation to the changing circumstances of the country; and that we think that we can go back to where we were years ago, without disturbing any interests, except those immediately affected ; whereas, such is the connexion and cohesion, and so closely are all these interests united, that there comes to be a complexity and mutual dependence, and there is no dis- turbing one great branch of the system without injury to all the rest. Here is a table of our trade with South America, and beyond the capes, with a comparison of that trade, in the year 1828 and the present year : — Comparison of our Trade with Places beyond the Cape of Good Hope, and South America. Imports value Domestic Exports, Tons of ship- In 1828. in Dolls. value in Dolls, ping employ'd. Dutch East Indies 113,000 83,000 1,454 British East Indies 1,543,000 55,000 2,589. Manilla 60.000 20,000 829 China 5.340.000 230,000 9,900 Buenos Ayres and Montevideo 317,000 94,000 1,363 Brazils 3,009,000 1,505,000 24,482 Other South American Ports 1,904,000 1,776,000 8,672 Total 12,286,000 3,763,000 49,291 In 1845. Duteh East Indies 935,000 98,000 4,900 British East Indies 1,650,000 338,000 10,479 Manilla 725,000 92,000 6,636 China 4,931,000 1,110,000 15,035 Buenos Ayres and Montevideo ],.56l,000 6tO,000 17,300 Brazils 6,883,000 2,409,000 48,550 Other South American Ports 8,434,000 2,574,000 19,747 Total 21,519,000 7,257,000 122,647 Increase 75 per cent. 90 per cent. 150 per cent. 448 THE EFFECTS OF A PROTECTIVE SYSTEM same class. Nor is the benefit of a foreign commerce to the coun- try to be determined by the gross amount of imports and exports, "This double increase of tonnage employed over the increase in the value of imports, is owing to the present importation of the* coarse and bulky articles for manufacture, instead of manufactured silk and cotton goods of China, Manilla, and Calcutta. " To be more particular, we now give a general description of the goods im- ported from those places in the year 1828, viz. : — Manufactured Cotton Goods . .$ 1,04 1,000 Teas $1,800,000 Manufactured Silk Goods. . . . 2,627,000 Wool 18,000 Indigo [which was imported Coffee 1,700,000 for export] 1,030,000 Specie. ' • • • 1,000.000 Hides 1,040,000 Unenumerated Articles 1,096,000 Sugar 284,000 Copper, in Pigs and bars 650,000 Total 12,286,000 In 1845, viz. :— Linseed $300,000 Manufactured Cotton Goods. $1,500 Gunny Bags 110,000 Manufactured Silk Goods 150,000 Drugs and Dye-Stuffs 150,000 Indigo 660,000 Ginger 40,000 Hides 3,600,000 Cocoa 170,000 Sugar 419,000 Spices 15,000 Copper, Pigs and Bars 365,000 Hemp 248,000 Teas 4,075.000 Specie 1,200,000 Wool 563,000 Unenumerated Articles 2,381,000 Coffee 6,600,000 Saltpetre 500,000 Total 21,519,000 " It is thus apparent that the increased employment of our tonnage of one hun- dred and fifty per cent, in this distant transport, has been from the importation of the raw materials for manufacture in our country, and of the increased quantities of coffee and teas, and no doubt increased exportation of our domestic products to those distant places has been promoted by this increase in imports. Those domes- tic products were manufactured cotton and woollen goods, lumber, and articles of furniture, provisions of all kinds, naval stores, cotton, tobacco, ice, candles, &c., &,c. "I have another table, Mr, President, exhibiting our trade with the north of Europe, presenting the same general result, and as we have ceased to import hemp to a great extent from Russia, the increase in the tonnage is principally from ex- portations : — "Comparison of our Trade with the North of Europe, viz. : Russia, Sweden, Ger- many, and Holland, showing a falling off in the Imports. In the year 1828 $11,214,000 In the year 1845 4,059,000 Decrease of 7,155,000 And an increase in our Domestic Exports of — In the year 1828 $5,085,000 In the year 1845 6,346,000 Increase of 1,261,000 And an increase in the Tonnage employed of — In the year 1828 136,100 tons. In the year 1845 197,000 tons. Increase 60,900 tons. OS THE. INTERESTS OF COMMERCE AND NAVIGATION. 449 any more than the gross amount of a spendthrift's costs of living and income will prove his prosperity, so long as his expenditures " This increase is from the transport of our domestic exports to those places. " It will be interesting to note some of the articles of import from those places, in which that reduction strikingly appears. In 1828. In 1845. Manufactures of Cotton and Flax $2,190,000 $165,500 Manufactures of Iron and Steel 2,204,000 677,000 Manufactures of Glass 458,000 128.000 Manufactures of Leather 330,000 2.100 Manufactures of Sail Cloth. 345,000 186,000 Manufactures of Linseed Oil 130,000 13,000 Manufactures of Cordage 145,000 54,000 Unmanufactured Hemp 990,000 21 1,000 Unmanufictured Flax 37,000 31,000 Unmanufactured Wool 97,000 31,000 Unmanufactured Rags None. 12,000 Total 6,926,000 1,510,000 "Thus showin? a reduction in the manufactured goods, hemp, &c., imported from those countries, of more than three fourths of the whole amount. "These facts are certainly of importance in considering the employment of our shipping in the transport of raw material, such as cotton, flax, hemp, iron, coal, &c., coastwise in our own country, for the manufacture, in our country, of good? which have taken the place of the foreign manufactured goods, imported and consumed by us, 16 years ago. " A very important fact in connexion with this part of the subject is, that this distant trade is in our own vessels. It is divided by none. We know tliat in the trade between us and England, about a third of the navigation is in the hands of Eng- land. But in the trade with the north of Europe, &c., the trade ie on American account, and to our advantage; and to a great extent, also, we pay for the impor- tations by domestic products. We do not now hear of any extraordinary- amounts of specie to meet the demands of thi~: trade, because the productsof our own indus- try and our own people, in a manufactured state, are carried out. " It is obvious, sir, that for the same reason that the raw material imported for the manufacturer pays a large proportion of freight, articles of export of like na- ture from our side for the same purpose pay also a large proportion, as everybody knows is the case with cotton. And this proves that, in every measure concern- ing the interests of navigation, we should consult rather the great and bulky arti- cles, than the small, where the value is sreat and the bulk diminished. " Now, be pleased to notice these results. Fifiy-eight millions of dollars of man- ufactured goods imported, yield less than one million for freight. Twenty-two millions of dollars brought in articles to be manufactured here, yield three millions and three quarters; being, very nearly, one half of all the freight earned on all our imports. Certainly, this is a most important fact, and worthy of all attention. "We propose, then. Mr. President, in the first place, to diminish and discourage labor and industry at home, by taxing the raw materials which are brought into the country for manufacture. We propose, in the second place, to diminish the earnings of freight very materially, by diminishing the importation of bulky arti- cles, always brought in our own ships. We propose, in the third place, to diminish the amount of exports of our own domestic manufactured goods, by refusing to lake in exchange for them raw materials, the products of other countries. This is our 29 450 THE EFFECTS OF A PROTECTIVE SYSTEM are 'ireater than his receipts. The Free-Trade doctrine is, that the spendthrift is growing rich. But it is no matter to navigation, as a distinct interest, what work it is en"-a"-ed in, so it has work ; or what it carries, if it has enough "0"i=) to carry. It might also he said, with a qualification, that it is no matter to importing merchants, for the time being, how much more they bring into the country than is carried out, of other commodi- ties than money, if they, personally, have time to wind up, and get out of harm's way, before the country, as a whole, is compelled to settle the balances against it in cash. They may even get rich, and retire on princely fortunes, if they retire soon enough, while the country is plunged into general bankruptcy, and the masses of present policy ! This is our notion of Free Trade ! Surely, surely, Mr. President, this enlightened system can not fail to attract the admiration of the world ! " Now, sir, one can not say to what extent this change of system may affect the navisation of the country, but its tendency is, unquestionably, to cripple and cramp the navigating interest. Its tendency is to diminish the demand for tonnage, for naviiration, for the carrying trade. And I think I might on this occasion, with- out iitipropriety, call the attention of the senator from Maine, farthest from me [Mr. Fairfield], a gentleman who here represents a state, if not first, at least among the very first, in regard to the amount of its navigation. The ships of Maine are found in every quarter. They are round the capes, and in the north sea. They bring home these raw materials ; and everything that diminishes the consumption of these raw materials in our own country, diminishes the chances of employment to every ship-owner in the state of Maine. I will read an extract or two, from a letter which I have received on this subject : — Baltimoke, 2()th July, 1846. '"Sir: I notice that the new tariflT bill has, in its schedule, silk, mahogany, hides, brazette wood, logwood, fustic, Rio Hache wood, Lima wood. Sandal wood, red cedar, pig copper, nitrate of soda, or tiie sal soda of Peru, saltpetre, block, and all sorts of crude woods, and many drugs of bulk, all more or less dutiable, and tea and coffee left free. " ' This is curious Free Trade. "'These are the articles that give our vessels homeward freights, and being chiefly gross articles of great bulk, they appeal most strongly to be phiced in the free list. You know very well that our outward-bound vessels to the English islands can get no sort of return cargo unless they go to Cuba or Porto Rico for sugar or molasses, or else to some salt port, or bring home some sort of wood or hides from St. Thomas, or the Main. I speak of small vessels that trade to the West Indies and the Spanish Main. " ' Gross, crude articles, of this sort, aid shipping interests, and assist making up cargoes to Europe of various such articles if free, such as logwood particularly, and Brazillelto and Rio Hache wood in cotto^i-ships even for dunnage. "'I call Free Trade tlie policy that lets crude articles in free as in "old times." " ' As far as I can judge, and being myself engaged in shipping interests, I think this bill very unfriendly to such interests; and as to being a Free-Trade bill, it is anything else, as I understand Free-Trade, as to the articles named. " ' I am, dear sir, your friend and fellow-citizen, William Miles.' " Comment on such facts and such an argument is entirely superfluous. ON THE INTERESTS OF COMMERCE AND NAVIGATION. 451 the community are involved in the deepest commercial distress induced by them. Hence importing merchants are generally in favor of Free Trade, with a few honorable exceptions. They care nothing about the country, if they can only gain a position that shall fortify them against the common calamities which they them- selves, by their cupidity, have brought upon the masses of the peo- ple, and whicb the people must bear. But it need not be said that a public policy, regulating foreign commerce, well devised and properly adjusted, is not designed to give a few importing merchants — more than half of them foreign factors, who pay no taxes, and carry away the money of the country — a control over the fortunes of millions of the American people, and to enrich such cormorants, while it impoverishes the nation. Mr. Clay said well and truly, as long ago as 1810, in his first speech in the senate of the United States on the protective policy, " Dame Commerce," meaning, doubtless, these importing merchants, " is a flirting, flippant, noisy jade, like the wife who wished her husband to supply his table from the cook over the way, rather than have the cooking done at home in the kitchen." She did not like the trouble, nor the clatter, nor the smell. It was for her benefit, and not for that of the family, that she argued. So with importing merchants. They want Free Trade to enrich them- selves, though it makes the nation poor.* There is no doubt that Free Trade, or an approximation to it, between the United States and foreign parts, by an abandonment of the protective policy on our part, will, for a short season, increase the gross amount of imports and exports, or enlarge the gross • Apart from return cargoes, in a regular exchange of commodities, our import- ing business is chiefly done by foreigners. They send their agents here, who, by their intimate relations and a secret understanding at home, are able to supplant American merchants, to defraud our revenue by false invoices, and thus to crush those very American interests which were designed to be protected by the laws they violate. See Senate Doc, No. 83, 2d session, 27th Congress, for proof of fraud in the agents of mie English house, to the amount of some hundreds of thousands of dollars. Also a voluntary fine of eighty-six thousand dollars, paid by seven agents of British houses, to Mr. Hoyt, collector of New York, to compromise, and purchase exemption from the course of justice — and a variety of other evidence of the same kind — a mere index to the vast frauds that have been practised upon upon us with impunity. In 1842, and before the tariff of that year went into effect, 74 per cent, of the imports into the city of New York, and 19 per cent, of those into Boston, were on foreign account; and foreigners, of course, had all the profits; whereas, in 184.5, it appears that by the operation of the tariff of 1842, the importing business in New York, on foreign account, had been reduced to 44 per cent, of the whole, and in Boston to 9 per cent. It is now again, under the tariff of J 846, rapidly reverting to foreigners. 452 THE EFFECTS OF A PROTECTIVE SYSTEM amount of commerce, when reckoned in dollars and cents, though not in the employment of a greater amount of shipping. The great demand for shipping in the winter of 1846-'47, was owing entirely to the extraordinary scarcity of food in Europe, and can not safely be set down as a permanent rule. It would have been the same under any tariff, and under any policy, as a providential and unusual effect. The ordinary effect of the abatement or abandonment of the protective policy, as proved in the tables and other facts exhibited in our citations from Mr. Webster, is to di- minish the demand and use for shipping, and to lay it up; while the continuance of that policy increas.es both. Such has always been the case in our commercial history. In farther confirmation of the above alternative, take the following additional f\icts : Under the tariff of 1842, American boot and shoe makers were protected, giving rise to large importations of hides — a heavy article — which, in 1845, amounted to near four millions of (lolUirH, giving employ- ment to American shipping, as well as to American boot and shoe makers. This one fact will illustrate scores of other like cases, which operated in the same way under the tariff of 1842, giving, at the same time, employment to American shipping, and to Amer- ican labor. It is the raw material that makes freight. Manufac- tured goods make little. It may be well to remark, however, in this place, that our exports of boots and shoes, under the tariff of 1842, had risen, in 1845, to the amount of S330,000, and the ex- ports of articles of American manufactures, of the same year, to about $12,000,000, being more than one tenth of all our exports, also augmenting foreign trade in the best way possible, by substi- tuting exports of our own products for imports of foreign and for re-exportations of foreign. ^ But it is alleged that the protective policy diminishes foreign commerce. Though there may have been, for a time, larger im- portations in periods of low duties, or no duties in this country, there was not really more foreign trade, nor in fact so much, by a great deal, as during the periods of protective duties, take those periods, respectively, through and through. Like the well-to-do farmer, who begins to buy more than he sells, and soon gets out of money and out of credit — who does indeed for a little while trade largely, to his own ruin — so has it always been with this country in times of Free Trade. The moment duties were relaxed, importations increased, and there seemed to be a more active for- eign trade. Really, however, there was no more request for navi- ON THE INTERESTS OF COMMERCE AND NAVIGATION. 453 gating craft — nor so much — inasnnuch as the additional importa- tions were costly manufactured goods, of little weight. As soon as the country got in debt, lost credit, and was forced to buy less, the navigating craft had less employment, and was much of it hauled off, and laid up. The foreign commerce of the country was injured and diminished. Whereas, under the protective sys- tem, in all cases, foreign commerce has been more uniform and uniformly increasing; shipping has had better and more employ- ment, and navigation has rejoiced in its business and profits — never more than for a few years after the tariff of 1S24; and never more than under the tariff of 1842. All the boasted increase of foreign trade, under low duties and no duties, has been the ruinous increase of a spendthrift, that brings debt, loss of credit, poverty, want, distress, in its train — beginning with flushed hope, and end- ing in disappointment. The most important view of foreign commerce, under the two systems, respectively, of low anti-protective and protective duties, may be stated thus : that the former system leads directly and uni- formly to excessive importations, or excessive buying, leaving a balance against the country, to be settled by drawing away its money, and leaving the people without a currency ; and in this way embarrassins: and diminishinsj commerce. It was so under the colonial system ; the money all went to England. It was so under the confederation ; the money all went abroad, chiefly to England, to settle balances, because we bought more than we sold. The states, severally, then, possessed the only power to establish a protective policy, each for itself; and being unable to do it, with- out collision of interests, it resulted in a system of ■perfect Free Trade, and of complete commercial ruin. It appears by Mr. Sec- retary Woodbury's annual report to Congress, of 1S40, that the imports into the country, for the first two years after the peace of 1814, exceeded the exports by $126,466,0-59. How could the country pay such a balance, already deeply in debt as it was, when, in its best estate, there was not half so much money in the country? The tariff of 1816, in its most important protective provisions, defective at best, and of a brief term, did but little toward the set- tlement of the immense balance that had previously accumulated against the country; and by the failure of the tariff bill of 1820, the country was doomed to run on again, under a system of low anti-protective duties, till the tariff of 1824 arrested it. According to Mr. Secretary Woodbury's report to Congress, in 1840, the 454 THE EFFECTS OF A PROTECTIVE SYSTEM balance of foreign trade against the country for 1815, was sixty-one millions of dollars; in ISIG, it was sixty-five millions; in 1817, twelve millions : in 1818, more than twenty-eight millions ; in 1819, seventeen millions; in 1820, about five millions; in 1821, two millions in our favor ; in 1822, eleven millions against us ; in 1823, about three millions against us ; and in 1824, nearly five mil- lions. What country could stand up against such odds ? And all this in uninterrupted succession, without any chance to pay. The na- tion writhed and groaned under it. Its money gone abroad to pay debts; banks suspended; the circulating medium become scarce, nobody knowing what it was worth, for it was irredeemable; business of all kinds in trouble ; property of every description depreciated ; and labor unemployed and starving. Who that is old enough to remember those years, will not certify to Mr. Clay's picture of them, in his answer to General Hayne, in 1832, as " ex- hibiting a scene of the most widespread dismay and devastation" ? But, from the date of the tariff of 1824, when the protective policy was for the first time, in the history of the country, well established — and from which time it continued till the duties went down again under the Compromise act of 1833 — the prosperity of the country was restored; labor found employment and reward; private and public wealth increased ; the entire national debt of one hundred and sixty millions of dollars, left at the end of the war of 1812, was at last paid off in 1836, and thirty-seven millions of surplus funds in the national treasury were distributed among the states. In those years commerce spread its wings over all seas, was widely extended, greatly enlarged, and prosperous. But, behold the contrast, as the duties under the Compromise act descended below the protective standard, and approximated toward a system of Free Trade, till finally they came down to a maximum of 20 per cent. The excessive importations commenced as soon as President Jackson began to show his hostility to the protective policy, and continued down through the administration of Mr. Van Buren, who "followed in the footsteps of his illustrious predecessor." The balance accumulated against the country in its foreign trade, in nine successive years under General Jackson and Mr. Van Buren — including three of the latter's administration — according to the records of the treasury department, was more than two himdred and fifty millions of dollars. The largest balance was in 1836, being sixty-one millions. The next largest was fifty- ON THE INTERESTS OF COMMERCE AND NAVIGATION. 455 nine millions, in 1S39 ; the next in comparative magnitude, was twenty-eight millions, in 1835 ; twenty-tliree millions in 1837 ; twenty-two in 1834 ; and so on. Nor is this all. It appears, by Fisher's National Magazine, for August, 1845, p. 279, that, for fifteen years, from 1830 to 1844, inclusive, the unenumerated arti- cles of imports amounted to one hundred and fj'tij milUons of dol- lars, being an average often millions a year, which, fairly, should be added to the above balances. That these balances were real, and not fictitious, is proved from the fact, that, at the end of this tlisastrous period, the foreign debts of the country, actually ascer- tained, were found to be upward of two hundred millions of dollars, most of them public. The state debts — most of them abroad — were reported to Congress by the secretary of the treasury, in 1842, as $200,855,793. A vast amount of other foreign debts, no small fraction of them private, and paid by bankruptcy, were unascertainabie, swelling the aggregate much above the common estimate. "A Southern Planter," in his " Notes on Political Econ- omy," estimates the foreign debt of the people and states, in 1844, diijour Imndrcd and Jiff )j mlUions., viz., two hundred millions of state debts; two hundred millions of bank, and corporation, and national stocks; and fifty millions of private debts — all owned abroad — drawing the interest annually from the country, for all that bankruptcy and repudiation had not kept back. He says, *'it is enough to weigh down our industry for the next fifty years." Here, then, is another result of a protracted period of low, anti- protective duties — a result of stupendous magnitude, impoverish- ing the people, the country, and the government, till neither had credit abroad, or at home, and till all were plunged in one common ruin. Commerce, domestic and foreign, withered under it, and was blighted. Who does not know this ? Who could ever forget it? And will any one arraign the assigned cause as questionable, when he always finds the same results after the same antecedents? And behold the effects of tlie protective duties of the tariff of 1842. The balance of trade instantly whirls about, and is in favor of the country ; twenty millions of specie return in one year in excess of the exports of it ; commerce spreads its wings again, and flourishes to an unexampled extent; navigation finds full employ- ment; private and public prosperity is revived ; business and credit revive; labor everywhere finds work and meets with a satisfactory compensation ; the ruin of many years is rej)aired in four : all are prosperous, all happy, all satisfied, and the nation is advancing with 456 THE EFFECTS OF A PROTECTIVE SYSTEM rapid strides, in wealth, greatness, and strength. Will any one doubt what is the cause? The following mode of proof on this point, though little required after the above, is well worth presenting as another species of de- monstration — for it is nothing less: — It appears by the treasury documents, that the aggregate of dutia- 61e im[)orts from 1821 to 1S24, inclusive, four years of low duties, were S264, 900,000, an average of sixty-six millions annually. The average rate of duty on these articles was about 34 per cent. ; and the aggregate revenue for this term of four years, was over ninety millions. By the tariff of 1824, the average duty was raised to 38 percent.; the aggregate imports of dutiable articles for the first four years, were $301,550,000, being an annual average of about seventy-five millions. It will be seen by these facts, that, with in- creased duties, there were increased importations of dutiable articles. By the tariff of 1828, the average duty was raised to about 41 per cent., and the amount of dutiable imports for the next four years was $297,330,000, with an annual average of $74,330,000 — scarcely varying from the preceding four years. As both periods were under a protective policy, the results ought to be similar. The next nine years, from 1833 to 1841, inclusive, under the compromise tariff, was a very remarkable period of bold and excessive importations, exceeding the exports for that time by about two hundred and thirty-one millions. The population of the country, too, had increased ; and it was natural enough thai foreign trade, as a whole, should have been augmented during this period, when the average duty, from beginning to end, was about 31 per cent., being 3 per cent, lower than the first, 7 lower than the second, 10 lower than the third, of the abovenamed periods. But what were the facts? The aggregate of dutiable imports for this period of nine years was six hundred and thirty-one millions, giving an annual average of seventy millions against seventy-four millions, when duties were 10 per cent, higher. But this does not fully exliibit the difference in the effects of high and low duties on foreign commerce, without considering, that the exports of this pe- riod were two hundred and thirty-one millions less than the imports. That makes the difference in the comparative results startling. Under the tariff of 1842, it is sufficient to say, that the im- ports, free of duty, fell off from thirty millions in 1842, to twenty- two millions in 1845 — the fall having been gradual — and those paying duty (commonly stated at an average of 40 per cent., whereas ON THE INTERESTS OF COMMERCE AND NAVIGATION. 457 the average duty of the tariff of 1S42 was only 34.64 per cent.), rose from sixty-nine millions in 1842, to ninety-five millions in 1845 ; and that the revenue from duties, which had descended to less than thirteen millions in the last year of the com])roinise tariff, rose to an annual average of over twenty-six millions, under the tariff of 1842. The facts, that during this period, the amount of imports free of duty decreased, and those paying duty under a well-adjusted sys- tem of Protection, continued to increase in amount, relatively and positively, take the period as a whole, and doubling the revenue, are conclusive as to the effects of protective and anti-protective du- ties on commerce and revenue. Tlie inference is fair, that Pro- tection gave the people the ability to purchase the protected articles, which they got cheaper in consequence of competition between home and foreign producers, benefiting themselves as consumers, benefiting labor by giving it employment and good wages, benefit- ing commerce and navigation, benefiting the country, on the largest and most comprehensive scale, and benefiting the government, by paying its debts, restoring its credit, and filling its treasury. The farmer who keeps up good fences, pastures only his own cattle, and keeps his crops from cattle that run at large, so that they can not break in, will be likely to have not only enougli for home consumption, but something for market. And if he takes care to sell more than he buys, he will grow rich. If, by such economy, his annual income is greater than his expenses, it is impossible he should fall into bankruptcy ; it is impossible he should not increase in wealth. He has then a substantial capital on which to trade, and if he follows up the same principles of economy, in all his business, he will be able to do more and more business, and will become richer and richer. As he grows rich, his wants increase. He will buy more, because he is able to buy, pardy for taste, partly for com- fort, and pardy to augment the value of what he has. It was the tariff of duties which he imposed on himself and his neighbors — with no wrong to tliem, and certainly with great benefit to himself — it was this tariff, with which he started in life, that has made him a rich man, and able to trade largely with others; and it is the same tariff continued, that fortifies his position, still increases his wealth, and still extends his business. Such a man can never fail. It is impossible. But let him lay aside these habits of self-protection and economy ; let him throw away this tariff; let him begin to buy more than he sells; let his fences go down, and all cattle running 45S THE EFFECTS OF A PROTECTIVE SYSTEM at large feed in his pastures and on his crops — does it need a prophet to tell what will become of him ? It is precisely the same with a nation, as reason and all experi- ence teach. If it watches over and protects its own interests, it will "TOW rich, and be able to buy ; and having the means, with the multiplication of its wants, it will enlarge its commerce with for- eign parts. As a man of small means will not buy the same things, nor so much, as a man of large means, so is it with a nation. A protective system will give, not only a better, but a more extended, more comprehensive, larger, and more diversified foreign com- merce, than a Free-Trade system. Look to the case of the farmer, above, who takes care of his home interests. Is he not able to buy and trade more, than if he had neglected his system of economy ? Free Trade makes a nation poor — especially the United Stales — as has been shown. How can a poor man, or a poor nation, buy? The protective system makes a nation rich — none more than the United States. It makes the people rich. It gives to every man the ability to purchase foreign luxuries. When a man grows rich, he has new wants, and those wants must be satisfied. When a na- tion grows rich, its wants will comprehend the productions of all parts of the globe, will increase in number, and in the aggregate, and in the same proportion will enlarge its foreign commerce. Go to Lowell, Massachusetts, and see wi)at ranges, what whole streets of stores, full of foreign luxuries, and foreign products, are required to satisfy the wants of the ten thousand operatives in the manufac- tories of that city, and of the other population connected with them ; and let it be remembered, that they are not only able to buy them, but to grow rich on their wages. From this cause, the importations of cotton goods, of the finer sorts, paying the highest duties, were augmented, under the tariff of 1842, and for three years ranged from tc7i to thirteen millions. The operatives of Lowell support a savings-bank in that city by their deposites, and many of them be- come stockholders, and even corporators, in the establishments where they work. In one company, $100,000 of the stock is owned by operatives ; in another, $60,000 ; and so on. Lowell, in these particulars, is but a picture of the whole coun- try under the protective system. The people were all well off, and were able to indulge in foreign luxuries, and to gratify a thousand wants, which could only be supplied by foreign commerce. The position of American labor relative to foreign labor, and of American interests relative to the interests of foreign nations, would ON THE INTERESTS OF COMMERCE AND NAVIGATION. 459 seem to have been entirely overlooked in those important and event- ful transactions called commercial and reciprocity treaties with for- eign powers ; and it is the more to be regretted, as they can not, like acts of domestic legislation, be at any time repealed, when found to operate badly ; but they must run on for the term of their stipulation, be it a greater or less number of years, till custom grows into the right of prescription, and the great interests involved become almost invincibly inclined to specific and accustomed chan- nels. Ultimately, the claim on the part of the United States to revert to a more just state of things, when the great injustice of these arrangements shall be discovered, may be the occasion of international controversies of a serious character — perhaps of war. Foreign powers, which enjoy these immunities, will not desire to tread back ; for they are too well aware that all the benefit of such treaties is generally theirs, and all the loss ours. They will claim what they have gained as a prescriptive right, and want more. It is not denied that a commercial treaty might be made, that would be just and beneficial to both parlies, when the United States is one of them ; but we are not aware that such a treaty ever has been made. It is doubtless because the parties in negotiation assumed the principle of reciprocity as a basis, which necessarily involves the principle of Free Trade, and which is an unjust prin- ciple in its operation on the United States, for the reasons which have been before elaborated in this work. No matter in what mould Free Trade be cast, it will never answer for this country, but will always be injurious. It is equally bad to have it go into a commercial treaty, based on the principle of reciprocity, as to open our ports directly and at once to the extent of the stipulations of such a treaty ; which, as will be seen, is a mere truism, and is in fact Free Trade to the same extent. It is singular that Amer- ican statesmen and diplomatists generally, if not without exception, who have hitherto been concerned in these transactions, should have been so blinded to the great principle of protection, which, in such matters, it was their duty to vindicate and maintain, but which they have sacrificed, apparently as if they did not understand its application in the premises. " Reciprocity" seems like a very fair word, a very just thing ; but, when it means nothing more nor less than Free Trade, as it does in all commercial treaties be- tween the United States and other countries, it is very unfair, very unjust ; because, so far as these treaties go, in their practical opera- tion on us as a party, it brings American labor and capital, which 460 THE EFFECTS OF A PROTECTIVE SYSTEM together cost more tlian double, into a direct and open competition with foreign labor and capital. It has been seen and felt that it . operated unequally, even calamitously, to the United States; the story has been often eloquently told, and the facts cited, showing how unfortunately it works ; but still American statesmen and di- plomatists go on, making new treaties on the basis of the same principle. And it would not perhaps be strange if, in this way, we should by-and-by find ourselves bound hand and foot to the car of Free Trade, by the irrevocable seal of commercial treaties, with all nations.* And all this for being ignorant of the fact that a reciprocify treaty is a Free-Trade treaty. Or did these agents of the country know it was Free Trade, and intend it as such ? " What, then, shall we do?" it will perhaps be asked. The an swer is as short as the question : Fall back on the platform of the law of nations, which is broad enough and strong enough for all our purposes, so long as other commercial nations refuse to enter into treaty stipulations that will vindicate and defend the rights of American labor and capital. After the peace of Ghent, Great Britain adopted measures to exclude the navigation of the United States from her colonies, com- prehending a trade estimated at six millions of dollars ; but by a clause in the second article of the convention of London, the right of a countervailing policy was left open to the United States. On the basis of this right, an effort was made in Congress, in 1S16 and 1817, to exclude from the ports of the United States all foreign vessels, British or other, trading with those British possessions from which American vessels were excluded, with a view to force Great Britain to a reciprocity, and to recover those rights of navi- gation for American shipping. It was partially successful. In 1818, a like attempt was more successful; in 1820, the act of 1818 was superseded by a new one; and so again in 1823 — the design of each of which was to bring Great Britain to terms. At- tempts at negotiation were made under the administration of Mr. * A very grave constitutional question seems to be involved in tiiese transac- tions, viz., whether the treaty-making power can lawfully be so far extended as to anticipate and bar the action of Congress in " the resulation of commerce be- tween nations," and in the enactment of revenue-laws. The first of these powers is clearly wrested from the legislative department of the government by commer- cial treaties, and the effect of such treaties may seriously interfere with a revenue system, the origination of all the measures of which is committed to the house of representatives alone. It may even deprive that body of its most important ground of revenue. In this way foreign powers are constituted parties to American rev- enue legislation. ON THE INTERESTS OF COMMERCE AND NAVIGATION. 461 John Q. Adams, but the death of the British prime minister, Mr, Canning, put tlie question into new hands, and deferred a settle- ment. In 1829, Mr. Louis M'Lane was sent to London by Presi- dent Jackson, with instructions on this subject; the question was claimed to have been advantageously settled, and the transaction much lauded ; the practical operation of which, however, made it worse than it was before, and it has never yet been satisfactorily arranged. It was under this recijyrocify treaty, so called, negotiated by Mr. M'Lane, that events have transpired, and a course of trade and navigation has been established, between the United States and Great Britain, narrated and described in the note below, being an extract from the National Magazine, January, 1846, con)municated by the Hon. James Tallmadge.* * " All these great questions of commerce, in all their consequences, are so im- mediately connected with agriculture and a market, I can not forbear to mention one other subject of great and commanding importance to the nation — I mean our numerous reciprocity treaties, so called. It is the misuse of the term, and the permilted abuse of those treaties, which calls for remark and public consideration. The injuries arising from those treaties are very great, as they are expounded and carried into effect, on us. Most of the nations of Europe have colonies in differ- ent parts of the ocean — the East or West Indies. But, to be brief, I must illus- trate by a single case. Great Britain readily makes a reciprocity treaty with the United States. It bespeaks great equality and mutual kindness. The flags and ships of each other are put upon the same footing in each other's ports, and to be received without distinction or discrimination. It looks all well. In practice, un- der the treaty, an American and an English vessel load at Lcmdon with the same goods, and come in together at one of our ports. The duties collected must be upon the goods, and no difference in which ship the goods come. This country has the right, and so has England, to lay whatever duties she thinks proper on the itn- portation of the goods into their respective ports. England, accordingly, imposed a rate of duties on produce from the United States, so high as to be a prohibition and a rate of duties on like articles from her own colonies, so low as to be nominal. The effect of this is, that the American and the English ships, which come out to- gether, can neither of them take a return cargo of such articles from the United States to London, or any port, on account of the high duties. But the British ship can take the same articles from our ports, and sail to the nearest British colcmy, touch, and then proceed on to London, or any port. Her voyage is now from the colony, and she pays only the colonial duty on the very articles she took from our port. Thus she sails around the reciprocity treaty. The American vessel is not allowed to go from the colony to England ; can make no voyage ; has no market ; and is left in our docks. The British vessel soon again returns with another cargo of British manufactures. Thus, in the circle of her voyages around the reciprocity treaty, she is in the sole possession of her own and our carrying trade; encouraging their ship-building and shipping interest, and employing and training their seamen and vessels in the very trade sacrificed to this country by our American nego- tiators. "We have heard, to use a modern and homely phrase, of 'going the whole hog.' But what farmer's boy ever supposed, because he had bargained for the old sow, that he had bought the whole litter, not mentioned in his agreement ? It is the 462 THE KFFKCTS OF A PROTECTIVE SYSTEM It can not be denied that the account given in the extract below is enough, and it would hardly be believed that we are now living taunt of Europe, that none but American diplomatists could ever have supposed a treaty with any nation embraced their colonies, not mentioned in it. "RECIPROCITY. "These few articles will serve to illustrate the whole: — Dulles From U. States. From British Colonies. On boards or other limber, per load of 50 cubic feet $7 68 $0 48 On oars, per 120 36 00 90 On handspikes, per 140 9 60 24 On spokes for wheels, per 1,000 19 20 48 On firewood, per load of 216 cubic feet 2 40 free. On bacon, 112 lbs 175 84 Beans, bushel 2 26 75 Beef, bbl 3 58 87 Butter, 112 lbs 5 00 1 12 Cheese, do 2 37 58 Feathers, do 5 00 2 25 Flour, bbl. 1 44 34 Pork, 112 lbs 1 87 44 Rice, 112 lbs 1 37 12 Spirits from grain, gallons 5 62 2 00 Oil, linseed, tun 30 00 5 00 Tallow, 1 12 lbs 79 06 Wheat, per bushel, on a sliding scale, prohibited unless almost famine 06 " The course of this trade is, for British vessels to come into our ports and take a cargo of American produce, and sail, if at the east, for Halifax or an eastern province; if at a southern port, for a West India island; and having touched thus at a British colony, the voyage is then homeward from such colony. This avoids the reciprocity treaty — secures the carrying trade of our grain, timber, &c., as also the benefit of the discriminating duties in favor of the colonies. "The extent of the perversion and abuse, under the reciprocity treaties, will ap- pear in part from a recent treasury document, statin? ' the Commerce and Naviga- tion of the United States.' It states the ' clearances' to the province of New Bruns- wick to be : 154 American, and 1,267 British vessels (for nine months), from 1st of October, 1842, to 1st of June, 1843. The Americans were mostly in pursuit of pJasler for the New England states. The British vessels were in the carryinsr trade of our timber, lumber, and fish, and to tonch only at New Brunswick, and thence home, payin? only their colonial duties on our timber, &c., and which is prohibited to American vessels. The table of entrances' will illustrate : — American. British. Passamaquoddy 63 431 Portland 42 62 Portsmouth 8 50 Gloucester 2 31 &c., &c. These facts sufficiently show the destructive course of this business. The trade on our lakes is equally bad : — American. British. Niasara 24 224 G<-nesee 38 88 Oswegatchie. 95 212 &c., &,c. ox THE INTERESTS OF COMMERCE AND NAVIGATION. 463 under such a state of things, or that it has existed for nearly twenty years without redress. It is further stated in the same Magazine, "In March, 1841, I came up the Savannah river, and there saw 11 lar£;e British vessels loading with Georgia timber — no American vessels there! This course of trade is not allowed to an American vessel. Reriprocity in British trape, means — our ports open to her commerce — her ports shut to our commerce. It is much better for her than Free Trade. In that, we should be in competition with her; in the reciprocity trade, we are shut out. " But this reciprocity trade is not restricted to our country, or to our productions. The treaty extends to Brazil, to Hayti, or any part of the world where the enter- prise and the voyage of an American vessel can be defeated. "BRITISH FREE TRADE. " ' Foreign coffees are charged Is. 3d. per pound duty, colonial coffees only 6d., while coffees imported from the Cujie of Good Hope pay 9d. Now, as the cost of sending, in an unusual and indirect way, cotl'ees from a foreign country to the Cape of Good Hope, is only from ^d. to \d. per pound ; very large quantities are shipped from Brazil to the Cape, and thence reshipped to England.' — Report of a Commit- tee to Parliament, 1840. " ' Have cargoes of coffee been sent from the United Kingdom, and from ports of the continent of Europe, to be landed at the Cape of Good Hope, and thence to be brought back to the United Kingdom, for the purpose of supplying the necessary consumption here ? "'Yes : from 26th April, 1838, to 24th March, 1840, it appears by the returns, that 81 cargoes, importing more than 21,000,000 lbs. of foreign coffee, had arrived in the United Kingdom, from the Cape of Good Hope. The duty on that mode of carrying coffee is 9d. per pound. If entered from a foreign country, Is. 3^. The duty saved by the indirect importation would be 750,000 pounds sterling (about $3,7.50,000).' — Examination of McGregor, annexed to Report. "The intent and meaning of this is, that the American vessel can not take the coffees, to pay Is. and 3d. sterling per pound in England. She is not allowed to go with a cargo from the English settlements at the Cape of Good Hope to an Eng- lish port. The British vessel takes the coffee, touches at the Cape, and thence her voyage is home, where she pays 9d. per pound duty — with only ^d. or ]d. per pound for incieased cost of her indirect way. Should the American vessel take a cargo, and conclude to bear the difference of duty, the English vessel would soon arrive, and with its difference of duty in her favor (being twelve cents per pound) would undersell and ruin the American voyage. Thus the American shipowner, with blighted hopes, learns that his own government has not only negotiated him out of the carrying trade of his own country, but has also turned him out of the carrying trade between all other nations and England. It is apparent that the English gov- ernment negotiated for its subjects; but it is very difficult to say for whom the American government negotiated. " Our neighbors, the Spaniards, have also learned something of this mode of com- merce, and of the kindness of our government, under any outrage, in its commer- cial arrangements. She, too, has provided a duty on cotton, so high as to prohibit its importation in American vessels; while it is brought from her colonies in her own vessels at a nominal duty. Some few years ago, I went from New Orleans to Havana, in an American vessel, laden in part with cotton. I noticed the course of the trade. On arrival at Havana, the cotton became the produce of Cuba, and was then shipped, as such (with the New Orleans bags and marks upon it), in a Spanish vessel for old Spain, and paying only the colonial duty. " These measures show the devices to gain our trade, to exclude American ves- 464 THE EFFECTS OF A PKjOTECTIVE SYSTEM May, ]^i6, that while, in 1830, the year of the ratification of this treaty, American bottoms carried exports from tliis country to Great Britain, to the value of $19,876,000, and British bottoms to the value of $5,897,000, the British carrying-trade had increased in 1844 to $18,716,000, against $29,078,000 in American bottoms, shovvino- an increase in fifteen years, in favor of British bottoms, of over 300 per cent., against an increase in American bottoms of Jess tlian 50 per cent. On the authority of the secretary of state, house document No. 163, second session, twenty-seventh Congress, it appears that the result of our treaty of 1828 willi the Hanseaiic towns is, that before that ireaty, Jive sevenths of the vessels entering those ports from the United States were American ; and that, in 184:0, four Jift.hs were Bremen, and only one fifth American. We sels, to injure their carrying trade, to lessen their shipping interest and ship-build- ing, to depress their commerce and navigation, and all in violation of the faith of a treaty professing to be reciprocal. " Among the many fruits of these measures, is the growing increase, within the last few years, of foreign tonnage in the American commerce. The entries and clearances (not coasting) at some of our ports are more than three quarters for- eign." Mr. Webster, as above, puts one third of our foreign trade in foreign bot- toms. We are indebted to the same authority as above, Mr. Tallmadge, for the follow- ing table, which, though not exactly in point to the subject of this chapter, is in- structive, and worth citing : — Total export of articles, tJxe grou-th or produce of tlie United Stales, to England, Scot- land, and Ireland, with the duties paid thereon, during the years 1838, 1839, 1840. 1838 Value. .$50,481,624 Duties. .$23,621,160 46 7-10 per cent. 1839 " ..50,791,981 " ..26,849,477 52 8-10 per cent. 1840 " .. 54,005,790 " .. 28,360,153 52 5-10 per cent. Total... " ..155,279,395 " .. 78,830,790 Av. 50 5-10 per cent. Of the above, the value of cotton and tobacco, and the duties paid thereon, were as follows : — ,„oo ^ Cotton Value. .$45,789,687 Duties. .$2,761,612 ( Tobacco 1839 i Cotton.. ^^"^^ I Tobacco iR4n^ Cotton.. ^^^^ i Tobacco . . 2,939,706 .. 46,074,579 . . 3,523,225 .. 41,945,334 . . 3,380,809 (e . . 19,8(;0,898 .. 1,942.337 ..23,288,396 .. 3,247,880 ..22,537,205 it ..143,653,340 ..73,638,328 Total All articles other than cotton and tobacco, the growth or produce of the United States, exported to England, Scotland, and Ireland, durins the same three years, amounted to $11,626,055, or $3,875,351 annually. Omiltin? cotton, Great Britain has levied an average duty of 330 per cent, on all articles the growth or produce of the United States. The duty on raw cotton was repealed in l84o, and other duties on some of our exports to Great Britain, have been somewhat modified and relaxed ; but not enough essentially to vary the result, as above stated. ON THE INTERESTS OF COMMERCE AND NAVIGATION. 465 have a similar arrangement with Sweden, in consequence of which, as stated by the same document, she had entered on our China trade, in the case of the Swedish ship Albion, and was hkely to trespass further on American navigation. Nothing has proved more deceptive, or more injurious to the navigating interests and commerce of the United States, than these commercial treaties, professedly based on principles of reciprocity — a mock reciprocity. The great commercial nations, such as England, France, Russia, Sweden, Portugal, Holland, and Belgium, have loaned their craft to the flags of the small states, such as Denmark, Hamburg, Bre- men, Prussia, Brazil, Tuscany, Rome, and Greece, which had nothing to lose, and everything to gain, by arrangements of this kind with the United States. Thus the larger commercial powers have stolen the benefit, and escaped from the obligation of reci- procity. 'I'he importance of protecting American navigation and com- merce does not end with the interests of the parties engaged in these pursuits, nor with its influence on the general wealth of the country. The commercial marine of a great maritime nation is the great and only school of training for its public marine — for its navy. For this sole purpose, it has been thought best to enact bounties for our fisheries, which are still continued. Is it consist ent to tax the people for such bounties with one hand, while the other is stretched forth, in the form of commercial and reciprocity treaties, not only to rob the nation of ten, or fifty, or a hundred times of the same kind of benefit purchased by these taxes for bounties, but to tax the people indirectly, by robbing them of a navigation and commerce worth millions ? That item of six mil- lions of dollars' worth of commerce lost to our navigation by British legislation after the convention of London, in 1S15, can not have been diminished, but must have greatly augmented, under the re- ciprocity treaty of 1830. But setting aside these interests of navi- gation and commerce, thus sacrificed, the consequent sacrifice to the public marine of the nation, in such a large abridgment of the only school of preparation, is no trifling consideration as it relates to public economy. In whatever point of view, therefore, these commercial and reciprocity treaties are regarded, and in all their bearings on private and public interests, they seem to have nothing in them but elements of great injury to the nation, as they have hitherto been constructed. Foreign commerce, under a protective system, may be made to 30 {/■ 466 THE EFFECTS OF A TROTECTIVE SYSTEM supply all the wants of the government, in a time of peace, without taxing the people. That it may be made to supply all the wants of the government, in a time of peace, is proved by the tariff of 1824, 1828, 1832, and 1842 ; and that it will not tax the people, is proved from the fact, already established in this work, that pro- / tective duties are not only not taxes at home, but that they are a rescue from an enormous system of foreign taxation. These points being established — as they are beyond controversy — it is clear that a protective systen), properly adjusted, without imposing du- <^'^' ' ties on foreign articles that can not be produced at home, might be ^ (TtiJL- r. made to supply all the wants of government, in a time of peace ; and therefore without taxation, since protective duties are not taxes. Much more than this is probably true — though it can not be asserted with so niuch confidence — viz., that a protective system, without imposing duties on articles which can not be produced at home — except, perhaps, some luxuries, and other articles not in- dispensable to the poorer classes — might be so adjusted as to liqui- date a very heavy national debt, in addition to defraying the ordi- nary expenses of government — all, of course, without a tax upon the masses, since protective duties are not taxes. Such are the resources of the country, such the amount of its home products and home trade, and such the ingenuity, skill, industry, enterprise, and physical ability, of the people, that, under an adequate system of protection, there are no assignable limits to the possible increase of the general wealth, or to the ability of the people to consume foreign products, subject to protective duties. Protect the people, let them grow rich, and they will buy largely from abroad, to raise an indefinite amount of revenue — enough, probably, to meet any future contingent wants of the government, even though a war debt should be run up to one or two hundred millions — all, of course, for the reasons before stated, without a tax in any form, direct or indirect, since protective duties are not taxes. ON THE HOME TRADE. 467 CHAPTER XXIX. THE EFFECTS OF A PROTECTIVE SYSTEM ON THE HOME TRADE. The Home Trade the Basis of the Fortunes of the Country — " Agriculture, Manufactures, and Commerce." the American Coat of Arms — Home Trade has always made the For- tunes of all great Continental Nations — Insular Nations an Exception. — The Domestic Rp.sources of the United States incalculable. — We have all Climates deemed good, and all Physical Elements of Wealth — The Country and the People fitted for each other — The Country a World in It.'^elf — Care. Work, and Frugality, at Home the same for a Nation as for a Private Individual. — " Far Fetched, dear Bought." — Home Trade does not diminish, but enlarges the Amount of Commerce, as ten Miles is only Half of Twenty, and can be pone over twice for once of the latter. — The thriving Man works on his own Estate. — Difference in Results of Trade between Parties to a Nation and Nations aa Parties. — The comparative Amount of Home and Foreign Trade — Statistics. — Amount of the Products of Labor in the Country. — Amount of Internal and Coasting Trade. — Statistics. — Adam Smith on Home Trade. Our home trade is, and must for ever be, the basis of our for- tunes. In foreign trade, we have almost always been losers, and the loss, as before seen, has been immense. Individuals have profited, at the expense of the public. Hence the seductions of foreign traffic, and the necessity of taking care of it, that the state receive no damage. The branches of foreign commerce are like the tenders of a fleet, the scouting-parties of an army, the roving agents of a great commercial house. If licensed with privileges, care should be taken that they serve, not injure, the main bodies. Every merchant in the foreign trade sails under the flag of his country. It is loaned to him, protects him, secures to him all his benefits. Besides being a merchant, wherever he goes beyond the bounds of his country, he is a public political agent.* • Mr. Laing, an eminent British authority, says : " In every country, the home market is the great and steady basis of its prosperity. Commerce itself, if it be not Ibunded on home consumption — if it be merely a carrying-trade between dis- tant producers and distant consumers, has proved itself, as in the Hanse-Towns, in Genoa, Venice, and Holland, to be unstable, evanescent, and unattended with any well-being and improvement in the condition of the mass of the people. The export trade is but the overflowings of the cup of our industrial production. Its fulness is all within its own rim." The " Southern Planter" says : " Commerce has as deep an interest in securing the home market and supply as manufacturers can have. Commerce has no pa- triotism in it, when based upon foreign supplies. All its profits are incidental, and have reference to its basis and support. Like the light of a satellite, the profits of commerce are borrowed and reflected, not inherent as the centre sun of business — not creative, as the producers are." 4GS THE EFFECTS OF A PROTECTIVE SYSTEM Having descended from a great commercial nation, the people of the United vStates very naturally imbibed the spirit of their an- cestry ; and being favorably situated for external and foreign com- merce, it has always been one of their favorite and great pursuits. " Ao'riculture, manufactures, and commerce," have ever been the three comprehensive words which represent the interests of this country. It is too late, therefore, to raise any abstract question about the utility of foreign commerce, although much might be said of a country that is a world in itself, and that has no disjunct and remote dependencies, in favor of a policy chiefly domestic. In the history of the past, it will be found that nations which have flourished the longest, and attained to the greatest wealth and to the most impO'^'ing grandeur, eschewed foreign commerce, and chiefly devoted themselves to domestic arts and trade ; and that as soon as they changed this policy, tliey began to decline, steadily going downward as they multiplied their commercial connexions abroad. Cliina, Hindostan, and ancient Egypt, are of this class. The exceptions to this rule, apparently, are cities and states in an insular and confined condition, as Tyre, Venice, and Great Britain. There would at least seem to be enough in history and reason to show that t!ie interest, or estate, or commonwealth, which is not sound and strong at home, will only be weakened and dissolved the sooner by stretching out its arms abroad. Foreign and remote connexions of a state, either commercial or political, are always in- terests of great delicacy and precariousness in the hands of states- men, and require consummate wisdom and great practical tact for a care and management which shall bring profit to home interests, and equal advantages to all parties. It can not but be seen, from the ground already gone over in this work, that the United States, from the beginning down to this time, have blundered and stumbled along, at great hazard and im- mense loss, and with innumerable bruises, in the management of our foreign policy and commerce. And what is our foreign com- merce worth, as compared with our home interest and trade? — A due consideration of the facts to be presented in this chapter, will answer this question. The resources of the United States are literally beyond estimate, speaking only of what they are, independent of the capabilities of the people, to which they lie in abeyance, and by which they have been in part, and are to be more fully, developed. There is no necessity of man or of society that is not to be found, or which can ON THE HOME TRADE. 469 not be produced, here. Tlie United States and territories com- prehend the finest belt of tliis western continent, stretching from ocean to ocean, and from the icy north to torrid chmes. The country has all the climates that could be desired by man, and is capable of all productions of the soil necessary to man. There is scarcely a plant, or vegetable, or shrub, or tree, on the habitable earth, which is not either indigenous or capable of being cultivated here. It is not within the memory of man, nor in the records of known history, wlien, if, by unpropitious seasons, there was a scarcity of the necessaries of life in one or more parts of this wide domain, there was not a plenty in others, sufficient for all demands. Nature, in this field, is everywhere bounteous in her gifts, and abundantly rewards the labors of man. Tlie bordering seas, the lakes, and rivers, teem with supplies of every fish known to the waters, and good for food. As the forests disappear before the advancing strides of civilization, the mineral world unfolds the exhaustless wealth of its bosom. The leaping streams and plun- ging rivers, found in every quarter, supply a power of motion that could never be used up, even if coal and steam were not likely to supersede a moiety of their purposes. The great natural bosoms, arteries, and veins, of inland trade, aided by a network of artificial communications, easijy cut or built, have brought and are bringing the remotest parts of the land into one neighborhood. The soils are indefinitely capable of all imaginable productions, and the founda- tions of the hills and mountains are not laid deeper or broader than the mines of wealth which they contain. Much as has been al- ready developed of the resources of this vast field of nature, by the enterprise, labor, and arts, of the people, in the brief term of their history as a nation, and much as has been realized of its pro- lific and deep beds of wealth, all this presents only the superfices of the profound and exhaustless treasures that lie undiscovered be- neath. The United States and territories under its jurisdiction are a world which the labor and industry of a thousand generations could not fully explore, or begin to exhaust of its capabilities — a world that challenges cultivation and research, with a promise of reward not elsewhere to be found — a world wiiich, the more it is used, the more it presents that is profitable for use, developing new sources of wealth with every stage of improvement. In a word, there is nothing wanting here to make those now tenants of these territories, and those that may come after them, independent of all the Ivor Id — nothing but the purpose to make it so ; and besides 470 THE EFFECTS OF A PROTECTIVE SYSTEM the blessing of independence, they would gain more wealth, become more happy, and be vastly more powerful, in the execution of that purpose, than by roaming abroad to get what costs more than it comes to, and what hitherto has impeded the growth of this coun- try more than all other causes, and neutralized the gains of domes- tic industry and home labor. God made the country, and God made the people, the one fitted to the other. It is true that all things naturally adapt themselves to the influences of their position, and it matters little whether the country was made for the people, or the people for the country ; or whether both were providentially designed for each other ; or whether neither of these propositions were exactly true when con- sidered apart : it is Providence at last that brings about these mu- tual adaptations where the two are brought together. It is true any how that the Anglo-Saxon race are not behind any other race in enterprise and in all the capabilities of making the most of their circumstances, and in putting forward society and civilization, wherever they are. They have done a great work since they made a home on this continent, and the only obstacle to their career is a looking back and hankering after " the leeks and onions of Egypt," and holding on to the apron-strings of a parent-race. This country has come to be a world in itself; and if all the rest of the world were sunk to-day, never to be found, we might feel the want of tea and coffee, and a few foreign luxuries, for a season, till substitutes should be found, or the same things be produced among ourselves; but the skill, science, art, industry, labor, enter- prise, civilization, resources, and capabilities, still left behind, would amply supply the loss, and it would scarcely be felt. It would be far better than a system of Free Trade, as the world now is, holding us for ever in bondage. Let this country be put on its own resources and capabilities, and it would rise and march, with giant strides, to its own proper and legitimate destiny of un- exampled wealth, greatness, and power. It requires nothing to accomplish this but an adequate system of protection. Home trade is always best, and most productive of wealth. It is no matter in what sphere the operation of this principle be con- sidered, the result will be the same. It will behest appreciated by viewino- it on a small scale. Take any man, of any calling, in his own narrow circle. If he keeps within his owmi limits, is industri- ous and frugal (frugality is self-protection, or a tariff of duties which every man of good economy imposes on himself and his ON THE HOME TRADE. 471 neighbors), he is sure to prosper. It is husbanding his own affairs well at home, that makes him rich. If a farmer wants any addi- tion to or change in his stock ; or any of the products of the man- ufacturer or the mechanic ; or groceries or cloths of a tradesman ; or whatev^er be his wants, or the wants of any other member of the community, no such person makes a long journey, or sends an agent abroad, at an unnecessary cost, if he be a man of economy. But he accommodates himself as near home as possible. Every one finds, by experience, that a home trade is the best and most profitable, and that " far-fetched" is always " dear bought." The economy of home trade is all comprehended in this simple view. Examples of this kind illustrate all others, between persons of the same pursuits, and persons of different pursuits, running through all classes of society. The farmer wants the mechanic's products, and the mechanic wants the farmer's ; the tradesman supplies the people in his neighborhood with articles which they want, and can not get at home, and takes their surplus products to trade in where they can not trade ; and both parties are accommodated, with profit to both. The nearer home a trade is made, is both private and public economy ; and a trade made at home, is better and more economical, than that made anywhere else. Transportation, and the pay of intermediate agents, are always a tax and a loss, which a home trade saves to one parly or the other, and always to the public. If it be said that these intermediate agents need employment, it can be obtained without living on others ; and the principle of such a reason, carried out, as will be seen, is, that men should live on each other, till nothing remains among them all. But the very object of giving employment to these agents, and multiplying other employments, is best secured on the principle of protecting and augmenting home trade ; for that is the best way to extend, enlarge, and diversify commerce. It is not proposed by advocating home trade, to restrict commerce. On the contrary, it is maintained, that, by keeping things well at home, on a small or large scale, with individual persons or communities, is the safest and surest way to branch out. But that person or that community that branches out without a good foundation at home, will be likely to get into trouble. It is by keeping everything tight and secure at home, that the extension and ramifications of trade are carried on with profit; and the greatest part of the trade of society, of the world, is transacted in a small way, and in very limited spheres. It is these 472 THE EFFECTS OF A PROTECTIVE SYSTEM small and limited operalions of commerce which sustain large and extended transactions; whereas probably not a thousandth part of the minor operations ever reach the larger, though they always con- stitute the basis. All the little trade of society, which, after all, makes its great bulk, is noiseless, everyday, commonplace, between neii'-hbors, in the never-ceasing exchanges which they carry on with one another, for mutual advantage and profit. The thriving man is he who is always found working at home, and the nearer his customers are, so much the better for him ; and the nearer he is to those with whom he trades, so much the better for them. Their business is compact, firm, prosperous. This is the way a man, a community, a nation gets rich ; and being rich, becomes a belter customer, the man to his neighbors, the community to adjoining communities, and the nation to other nations ; and under such a system, all these parties are mutual helps to each other. It is be- cause there is a home foundation, created at home, to trade upon. Without this, they could not trade at all, honestly, and with profit. It is not good economy to employ intermediate agents in trade, for the sake of employing them. In that way men become a burden to each other. But the better way is, to work and thrive at home, and thereby create occasions for a trade that shall set these agents in motion, and make them necessary ; and the greater the home thrift, so much more numerous and extensive will be the ramifica- tions of trade which it calls into action, beginning at home, and branchino- out over the nation, and over the world. All engaged in home trade, are parties to the nation ; but in the case of imports and exports, the nation is a party. It must be seen that a home trade can not but be beneficial to the nation ; and the more of it, the better. All engaged in it are parlies to the same commonwealth. Some lose, and some gain ; but the com- monwealth is always a gainer in domestic trade. In the commerce of the world, the world is the commonwealth, and as a whole is made richer. In the same manner as individual persons are parties to the nation, in a home trade, nations are parties to the world's commonwealth, in the world's trade; and in the same manner as some of the parties to a nation become rich, and others poor, in a home trade, one gaining and another losing, according to their re- spective systems of private economy, so in the world's trade, between nations as parties, one is benefited and another injured, one gains and another loses, according to their respective systems of public economy. In all foreign commerce, the nation is a party, and the ^' ON THE HOME TRADE. 473 negotiator the agent. If all the agents together sell more than they buy, the nation, so far as these transactions are concerned, is a gainer, and adds to its capital. But if the agents buy more than they sell, the nation, on the same conditions, is a loser, and parts with capital. Although these two propositions are incontrovertible, in the form in which they are stated, yet, many things are to be considered, to determine, whether, in the case of the first, it would not have been still better for the nation, if a part of this trade had been done at home ; while it is manifest, in the case of the second, that it would have been better for the nation, if so much of this trade had been done at home, as to have prevented the balance against it. In order to determine on what conditions, in the case of the first proposition, it would have been better for the nation, if a part of this trade had been done at home, and what part of it, it may be observed, it would be precisely that portion of the im- ports which could have been produced at home, under a system of protection, and in their production made to consume what was sent abroad to buy them. In that case, all the profits of these transac- tions, in consumption of raw materials, in production, and in the home trade concerned in it, in all its stages, would have become a part of the permanent capital of the nation, besides the additional employment for subsistence which it would have given to the par- ties engaged in it. As the Southern Planter, cited elsewhere, says, "Figures can't calculate the difference. It outstrips every- thing but the human imagination" in its results. This position of a nation, as a party, in all its foreign commerce, seems to have been entirely overlooked by the Free-Trade econo- mists. Yet, who can deny that it is so, for all the purposes of pub- lic economy ? We do not say that the nation, as such, does the business ; nor, that the agents are not parties, to the extent of their own transactions, as much and as truly as if they were engaged in the home trade. But we do say, that, for all purposes of public economy, the nation is not only a party, but the party, when the entire amount of these transactions of its foreign commerce is con- sidered ; and the nation may be a loser, when the merchants, who have occasioned this loss, have made their fortunes, as shown in a former chapter. Nor can the nation lose without dividing the loss among the people. The principle that the nation is a party in its forei""n commerce, considered as a whole, is that which controls this question, and determines when, and how far it has need of a protective system. 474 THE EFFECTS OF A PROTECTIVE SYSTEM As remarked in the opening of this chapter, the branches of for- eign commerce are like the tenders of a fleet, the scouting parties of an arniy, the roving agents of a great commercial house. They are not the fleet, nor the army, nor ti)e trading company. They are mere sprigs of a tree, offslioots of a trunk, accidents of a sys- tem ; and if the nation be a great and powerful one, of abundant territories and resources, and without foreign dependencies, these sprigs may be cut off, and these accidents dropped, without any very sensible effect, possibly with benefit to the main body. This latter contingency, to wit, a possible benefit, depends on others, which it is unnecessary here to consider, inasmuch as it is not pro- posed to abandon the foreign commerce of the United States, and inasmuch as it is granted, that, under proper regulations, it may be beneficial. But, it. is one of the greatest imaginable mistakes, to assume, that it is beneficial, in any case, and without a well-con- sidered and discreet regulation. A world of facts has been pre- sented, in the progress of this work, to show, and which conclu- sively prove, that the foreign commerce of this country has hitherto, for want of proper regulation, been one of the most formidable obstacles to the general prosperity, and an insuperable impediment to the march of this great commonwealth in that career of imj)rove- ment, greatness, and power, the elements of which have been planted in its bosom by Providence, and which are inherent parts of the republic. It is also a very common and great mistake to put our foreign commerce before our home trade, in the estimate of its comparative importance ; nor is it less common to overesti- mate its comparative amount. The average annual aggregate of our imports and exports, in a healthful state of foreign trade, does not ordinarily much exceed two hundred millions of dollars, or one hundred millions of each. But what is this, compared with the aggregate amount of our home trade? It is a very inconsiderable fraction, as the facts stated in the note below will show.* * By the " statistics of products and condition of certain branches nf industry of Massachusetts, for the year endins; April, 1845"' — official documents — it ap- pears, that the products of the industry and labor of that state, for the nforesaid year, amounted to $124,735,264; that the capital invested, as the basis of this pro- ducins; power, was $59,145,767; and the hands or persons employed in these pro- ductions, were 152,766. The avera