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 1 2 3 
 
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 4 5 6 
 
TH 
 
 [Repr 
 
 The hiffhest rigli 
 tern of laws which 
 ests, reaffirms in ej 
 of commodities or . 
 abundance, and err. 
 other hand restrict 
 of had roads, hiyh 
 create scarcity, am 
 
^/ 
 
 THE CREED OF FEEE TRADE. 
 
 By DAVID A. WELLS. 
 
 [Rephinted from the Atlantic Monthly for August, 1875.] 
 
 The highest right of property is the right to freely exchange it for other property. Any sys- 
 tem iiflaws which denies or restricts this right for the purpose of suhsermng private or class inter- 
 ests, reaffirms in effect the principle of slavery. Whatever facilitates or cheapens the interchange 
 iif commodities or sovices — good oads, the locomotive, the steavuhip or the telegraph — promotes 
 abundance, and consequently the aggregate of human comfort and happiness. Whatever on the 
 other hand restricts or makes costly the exchange of commodities or services — be it in the natwe 
 of bad roads, high mountains, tempestuous oceans, swamjjs, deserts, or restrictive laws — tends to 
 create scarcity, and consequently the aggregate of human poverty and discomfort. 
 
 
 
 I 
 
 'II 
 
That the que 
 
 cnibmlic'd in vpi 
 
 of taxes for any 
 
 eiiiie purposes, i 
 
 Aiiicrican people 
 
 isfiues of the next 
 
 cannot be doubtt 
 
 crablc proportioi 
 
 factin-ors, as the 
 
 cxpfru;nce, are fi 
 
 distant (lay to u 
 
 abaiiilonnient in i 
 
 k'v of ultni protc 
 
 structive of all p 
 
 rcLiarded as a mat 
 
 Under such eirci 
 
 a view of aiding tl 
 
 h;i5 not n;iven spec 
 
 and political econc 
 
 to these cjuestions 
 
 may soon have to 
 
 is pi'iiposcd here 
 
 chdndng originali 
 
 or illustration — ; 
 
 tlie creed of free t 
 
 an American stai 
 
 reasons for which 
 
 i'ecoi;nition as a ca 
 
 future national lis 
 
 fi{i:k tra 
 
 Free trade in it 
 as recently define 
 the free exercise of 
 allies in all conmei 
 W'e ; it is the liber I ij 
 ent proportions." 
 and jirescnt politic. 
 
THE CREED OF FREE TRADE. 
 
 That the question of free trade, as 
 otnbodied in o])position to tlie levying 
 of taxes for any other than strictly rev- 
 enue purposes, is to come before the 
 Aiiieriean people as one of the political 
 issues of the next presidential campaign, 
 cannot \fa doubted. That no inconsid- 
 erable proportion of American manu- 
 facturers, as tlie result of recent hard 
 experience, are furthermore likely at no 
 distant day to unite in demanding an 
 abandonment in our national fiscal pol- 
 icy (if til/rn protection as in itself de- 
 struetive of all protection, may also be 
 rciranled as a matter reasonably certain. 
 Under sueh circumstances, then, with 
 a view of aiding the average citizen, who 
 li;is not given special attention to finance 
 anil ]iolitical economy, to form in respect 
 to these questions an opinion which he 
 may soon have to express at the polls, it 
 is pniposcd here to present — without 
 claiming originality for either language 
 or illustration — a simjile statement of 
 the cieed of free trade, as viewed from 
 1111 American stand-point, and of the 
 rcasiiiis for which its advocates seek its 
 ivcouiiiiion as a cardinal feature of our 
 t'utnie national fiscal legislation. 
 
 I'UKK TRADE DEFIXED. 
 
 Free trade in its fullest acceptation, 
 as recently defined by Chevalier, " is 
 the free exercise of human power and fac- 
 ulties in all commercial and professional 
 life ; it is the liberty of labor in its (jrand- 
 ext prniiorlions." In its more technical 
 and i>resent political sense, it means the 
 
 freeing of the exchange of all commodi- 
 ties and services, between man and man, 
 irrespective of residence or nationality, 
 from ail arbitrary, artificial obstructions 
 and interferences resulting from legisla- 
 tion or prejudice. 
 
 RELATION OF FREE TRADE AS AN 
 ECOXOMIC SYSTEM TO TAXATION 
 AND REVENUE. 
 
 On this jioint there is no little popti- 
 lar nnsconception. which has, doubtless, 
 been often intentionally eneouraged by 
 a common assertion of the advocates of 
 protection, that " the adoption of free 
 trade as a national fiscal policy neces- 
 sarily involves a resort on the part of 
 the state to direct taxation as a means 
 of obtaining revenue." Tlie truth, 
 however, in resjieet to this matter is as 
 follows: The command of revenue being 
 absolutely essential to the existence of 
 organized government, the jiower to 
 compel contributions from the people 
 governed, or, as we term it, " to tax,^'' is 
 inherent in every sovereignty, and is 
 essential to ils existence. So far, the 
 advocates of free trade and protection 
 fully aLiree. The former, however, main- 
 tain that ill the exercise of this power 
 the object of the tax should be rigidly 
 restricted to the defraying of legitimate 
 jmblie expc'nditures, — or, in other words, 
 that taxes should be levied for revenue 
 purposes exclusively, — and that, sub- 
 ject to sueh limitations, the question as 
 to what forms taxation would best as- 
 sume becomes one of mere experience 
 
 
 -1 .-»4 
 
 ■ii:>Jii«! 
 
The Creed of Free Trade. 
 
 and expediency; preference being al- 
 ways given to those forms which in- 
 volve the least waste, cost, and personal 
 annoyance in collection, which are most 
 productive of revenue, and interpose 
 the minimum of inteiference and restric- 
 tion on conniiercial intercourse. Free 
 trade as an economic j)rinci^)]e is not, 
 therefore, as is often assumed and sup- 
 posed, ni'cessarily antagonistic to the 
 imposition of duties on imports, pro- 
 vided the en<l sought to be attained is 
 simply revenue and the circumstances 
 of the state. render such form of taxa- 
 tion expedient. Protection, on the other 
 hand, on the ground of advantages ac- 
 cruing directly or incidentally, advocates 
 and defends the imposition of taxes on 
 imports for piu'poses other than those of 
 revenue. Protection, therefore, to the 
 exact extent to which it attains its object, 
 is obviously antagonistic to revenue, in- 
 asmuch as reveitiue is received only on 
 those conunodities which coihe in, while 
 protection is secured only when the im- 
 portation of commodities is restricted or 
 made dillicult. 
 
 INCIDENTAL PROTECTION. 
 
 The adjustment of a tariff for revenue 
 in such a way as to afford what is termed 
 " incidental protection " — an idea much 
 favored by American politicians — is 
 based on the supposition that by arrang- 
 ing a scale of duties so moderate as only 
 to restrict and not prevent importations 
 it is possible to secure a sufficiency of 
 revenue for the state, and at the same 
 time stimulate domestic manufactures by 
 increasing the price of competitive for- 
 eign products. That the double object 
 thus aimed at is cajjable of attainment 
 cannot be doubted, but that the project 
 is also one of the most costly of all meth- 
 ods of raising revenue will become evi- 
 dent if it is remembered that, while 
 revenue to the state accrues only from 
 the tax levied on what is imported, an- 
 other tax, arising from the increase of 
 price, is also paid by the nation upon all 
 that is sold and consumed in competition 
 with the foreign article. A tariff for 
 revenue so adjusted as to afford inci- 
 
 dental protection is therefore a system 
 which requires the consumers, who are 
 the people, to pay much in order that 
 the state may receive little. With thusi; 
 preliminary statements, the essential 
 points of the argument in favor of free 
 trade, as contradistinguisluul from pro- 
 tection, may be stated as follows: — 
 
 THE niGUEST UIGIIT OF PUOPEnTY. 
 
 The highest right of property is tlio 
 right to exchange it for other property. 
 'J'hat this must be so will at once appear 
 if it is remembered that, if all exchani;o 
 of property were forbidden, each indi- 
 vidual would be assimilated in coiulition 
 to Robinson Crusoe on his uninhabiteil 
 island; that is, he would be restricted to 
 subsisting on what he individually pro- 
 duced or collected, be deprived of all 
 benefits of cooperation with his fellow- 
 men, and of all advantages of produc- 
 tion derived from diversity of skill or di- 
 versity of natural circumstances. In the 
 absence of all freedom of exchange be- 
 tween man and man, civilization would 
 obviously be impossible; and it would 
 also seem to stand to reason that to the 
 degree in which we impede or obstruct 
 the freedom of exchange, — or, what is 
 the same thing, commercial intercourse, 
 — to that same degree we oppose the 
 development of civilization. 
 
 TO RES; 'CT EXCHANGES REAFFIRMS 
 THE 1 iINCIPLE OF SLAVERY. 
 
 Any system of law which denies to an 
 individual the right freely to exchange 
 the products of his labor, by declaring 
 that A, a citizen, may trade on e({ual 
 terms with B, another citizen, but shall 
 not under equally favorable circum- 
 stances trade with C, who lives in an- 
 other country, reaffirms in effect the 
 principle of slavery; for both slavery 
 and the artificial restriction or prohibi- 
 tion of exchanges deny to the individual 
 the right to use the products of his labor 
 according to his own pleasure, or what 
 may seem to him the best advantiige; or, 
 in other words, the practical working of 
 both the system of human slavery and 
 
27te Creed of Free Trade. 
 
 the system of protection is to dcprivo 
 the individual of a portion of the fruits 
 iif liis labor, without making in return 
 imy direct compensation. The arfj;u- 
 mcnt that is generally put forth by pro- 
 tectionists in justification of Icfiislation 
 n'>!ricting freedom of exehange, or in 
 (lifensc of the pithily expressed propo- 
 sition that "it is better to compel an 
 iiiiltvidual to buy a hat for five dollars, 
 riilluM' than to allow him to purchase it 
 for three," is that any present loss or 
 injury resulting from such restriction to 
 the individual will be more than com- 
 pensated to him imUrectlij, as a citizen 
 of the state. But this plea is the same 
 in character, and just as legitimate, as 
 that wliich was foi'merly put forth in de- 
 fense of the system of negro slavery, 
 namely, that the systern was really for 
 the good of the jiersons enslaved, and 
 that any deprivii.tion endured by the 
 slave for the good, of society — meaning 
 thereby the masters — would be fully 
 compensated to him, through moral dis- 
 cipline, in the world to come. It is also 
 to be noted that this same species of ar- 
 gument — i. €., indirect or future indi- 
 vidual or social benefit as a justification 
 for present personal restriction or injury 
 — has always been made use of in past 
 ajrcs as a vindication and in warrant of 
 persecution on the part of the state for 
 lieri'sy or unbelief, and also of the estab- 
 lishment of state religions and enforced 
 conformity thereto. 
 
 THE ARGUMENT FOB FKEE TRADE AN 
 ARGUMENT FOB ABUNDANCE. 
 
 The general result for which all men 
 labor is to increase the abundance or di- 
 minish the scarcity of those things which 
 are essential to theif subsistence, com- 
 fort, and happiness. Different individ- 
 uals are endowed with different natural 
 capacities for making the various forces 
 of nature and varieties of matter avail- 
 able for production. One man is nat- 
 urally fitted to excel as a farmer, an- 
 other as a mechanic, a third as a navi- 
 gator, a fourth as a miner, engineer, 
 builder, or organizer and director of so- 
 ciety, and the like. The different coun- 
 
 tries of the earth likewise exhibit great 
 diversity as resjiects soil, climate, natu- 
 ral |troducts, and opportunity. It would 
 seem dear, therefore, in order that there 
 may be the greatest material abimdnnce, 
 that each individual must follow that 
 line of production for which he is best 
 fitted by natural capacity or circum- 
 stances; and that, for the determination 
 of what that line shall be, the promptings 
 of individual self-interest and experience 
 are a far better guide than any enact- 
 ments of legislatures and rulers possibly 
 can be; and, finally, that tire greatest pos- 
 sible facility should be afforded to pro- 
 ducers for the interchange of their several 
 products and services. So true, indeed, 
 are these propositions, that mankind in 
 their progress from the rudest and most 
 incipient social organizations to higher 
 degrees of civilization invariably act in 
 accordance with them, and, as it were, 
 instinctively. Robinson Crusoe upon his 
 uninhabited island and the solitary set- 
 tler in the remote wilderness follow of 
 necessity a great variety of occui)ations, 
 as those of the farmer, hunter, builder, 
 blacksmith, fisherman, tailor, and the 
 like. But as rapidly as the association 
 of others in the same neighborhood ad- 
 mits, the solitary man abandons his for- 
 mer diversity of employment, and de- 
 votes Inmseif more or less exclusively to 
 a single department of industry, fupply- 
 ing his want of those things "-:''jh he 
 does not himself produce by excli,.nging 
 the surplus product of his own labor for 
 the surplus product of others' labor, who 
 follow different industries. It is to be 
 further observed that settlements in all 
 new countries commence, if possible, in 
 close proximity to navigable waters, so 
 as to take advantage of natural facili- 
 ties for intercommunication between man 
 and man for the purpose of exchang- 
 ing services or conunodities; and that 
 if commenced inland, one of the first 
 efforts of the new society is the con- 
 struction of a path or road which will 
 enable its members to hold connnunica- 
 tion with some other settlements or so- 
 cieties. Next, as population and pro- 
 duction increase, the rude path or trail 
 gives way to a well-defined road, the 
 
The Crcrd of Free Trade. 
 
 ford to a bridge, the swamp to a cause- 
 way, the pack carried upon the backs 
 of men and animals to the wii'^oii drawn 
 by horses, the wa;^on to the railway-ear, 
 the boat propelled by oars and sails to 
 the bout propelled by sti'am, and finally 
 the teU'itrapli, anniliilatin;; spiice and 
 time; all cllorts and achievements liaviti'^ 
 the siiifrle object of fiuilifiitin'^ infer- 
 commnnication butween mitn and man, 
 and removini; obstructions in ilie way 
 of interehanij;in;^ hnman services and 
 commodities. Free exchan'j;e between 
 m:in atid man — or, wdiat is the same 
 thing, free trade — is therefore action 
 in accordance with the teachinj^s of nat- 
 ure. Protection, on the other hand, is 
 an attempt to make things better tlian 
 nature made them. Free trade, or tlio 
 intercliaiifre of commodities and services 
 with tlie mininnim of obstruction, by 
 rendering; connnoditics cheap tends to 
 promote abundance. Protection, by in- 
 terference or placing obstructions in the 
 way of exchanges, tends to increase the 
 cost of commodiiies to tlie consumer, 
 and thereby promotes scarcity. Protec- 
 tion, eft'ected by legislative restriction on 
 exchanges, acts, tlierefore, in the same 
 manner as all otlier things which ren- 
 der transportation onerous; or, in oilier 
 words, it is an obstacle in the same 
 sense as a bad road, a precipitous range 
 of mountains, an intervening desert, or 
 a wide expanse of ocean aboim<ling in 
 risks to navigation; the general efl'ect of 
 all which is to augment in various de- 
 grees to consumers tlie difTereiiee be- 
 tween the producer's and the vendor's 
 prices of commodities. All the jieople 
 of the United States instinctively re- 
 joice at the announcement of every new 
 discovery in the construction or propul- 
 sion of vessels, whereby the time and 
 cost of transporting commodities across 
 the Atlantic from Liverjiool to New 
 York, or across the Pacific from China 
 and Japan to San Francisco, are dimin- 
 ished ; and yet they do not revolt at the 
 inconsistency of imposing taxes, for pur- 
 poses other than to meet the necessities 
 of the state, on the landing of the com- 
 modities thus transported; which taxes 
 are precisely equivalent in effect, as re- 
 
 gards the consumer, to the substitution 
 of slow-sailing vessels of small tonnage 
 in the place of ocean steamers, or to 
 so widening the expanse of ocean to he 
 traversed that the time eni|)l()yed in 
 tr'insportation (and tiie conse([uent in- 
 creased cost of frei^^ht and risk) shall 
 be expressed by nionllis rather than liy 
 days. A few illustrations derived from 
 the actual experience of tiie United 
 Stales are here pertinent to the argu- 
 ment. 
 
 Upon the const of Nova Scotia, within 
 a short distance of the United Stales, 
 there are coal - mines of great value, 
 which, unlike any others in tlie whole 
 world, are located so ailvantageoiisiy in 
 respect to ocean navigation that almost 
 by the action of gravity alone the coal 
 may be delivered from the mouth of the 
 jiit upon the deck of the vessel. Now, 
 for years the government of the United 
 States imjxiseil a tax on the landing of 
 this coal within its territory, of one dol- 
 lar and twenty-live cents ])er ton. But 
 if we assume that coal tipon a well-man- 
 aged railroad can be transported for one 
 cent per ton per mile, the effect of this 
 tax upon the people of New York and 
 New Kii'^land is precisely equivalent to 
 a removal of these coal-mines of Nova 
 Scotia from a point on the seaboard to 
 a location one hundred and twenty-live 
 miles inland. But it would also seem 
 to stand to reason that if the removal of 
 these mines one hundred and twenty- 
 five miles into the interior was a benelit 
 to the people of the United States, a 
 further augmentation of their distance 
 from the seaboard to five hundred or a 
 thousand miles would be a still greater 
 blessing, and that their absolute annihi- 
 lation would be the superlative good of 
 all. 
 
 Again, some years since an Englisli 
 engineer, Mr. Bessemer, devised a new 
 process for the manufacture of steel. 
 He did not claim to make anything new; 
 he did not claim to make steel of a (jual- 
 ity superior to what was made before; 
 but he did succeed in showing mankind 
 how to make an article indisjiensable in 
 the work of production cheap, which 
 was before dear. Immediately on the 
 
 assured succci 
 
 advocates of | 
 
 Slates asked C( 
 
 duly on the imp 
 
 llirough a con 
 
 price to Amer 
 
 coiiijiletely neii 
 
 accruing from t 
 
 I lie new procca 
 
 and they siicccc 
 
 siill(I«75)relai 
 
 degree accoinjili) 
 
 What this res 
 
 may be illusiral 
 
 1X72 I he iMichig; 
 
 laid its track at 
 
 costing ninety-se 
 
 ton, wliile at a ( 
 
 '^across tli{> Detr 
 
 Soiilhern Railroa 
 
 same kind of rail 
 
 dollars (gold) per 
 
 here ask himself, 
 
 levied in perpeti 
 
 what is the same 
 
 of using it; and w] 
 
 ing benefit in pe 
 
 the tax ? 
 
 From the abov( 
 
 amples it would s 
 
 ilirect effect of a 
 
 it is really operat 
 
 the part of the ( 
 
 such an agency, j 
 
 ficMilt and costly c 
 
 tion for the protec 
 
 diat \\hi:n a comnr 
 
 tW'tivo p(diey it c 
 
 indorsement of th 
 
 development and j 
 
 cles is cfiuivalent U 
 
 od of, developino- c 
 
 ;-a policy and a pi 
 
 ically and practical 
 
 lead to disuse of s 
 
 t-'hiiicry. 
 
 The advocate of 
 mecfs this avermei 
 giinieiit embodied i 
 ^«nier steel illustrat 
 filing that by pro 
 "ig li'i!- importation 
 coal and steel a den 
 for a corresponding 
 
The Creed of Free Trade. 
 
 iiHsurcfl success of the invt-ntion, tlio 
 ailvocatcs of protection in th« United 
 Slates asked Con^n'css to impose siicli a 
 duty oil tlie import of this steel as would, 
 iliiouj^h a coIl^e(luent increase of its 
 prici) to American consumers, almost 
 ciiiiiplctely neutralize the only benefit 
 iii'cruin;^ from the knowledjjo and use of 
 tiie new process, namely, its cheapness, 
 and tiiey succeeded in obtaining, and 
 still (1H75) retain, a duty that in a great 
 di;:rei! accoiniilishes such a result. 
 
 What this result practically has been 
 may bo ilhistrated by stafinj^ that in 
 1H72 the Michigan Central Railroad re- 
 laid its track at Detroit with steel rails 
 costing ninety-seven dollars (gold) per 
 ton, while at a distance 9f lialf a mile 
 (^across tlu> Detroit River) the Canada 
 Southern Railroad was laying down the 
 same kind of rails at a cost of seventy 
 dollars (gold) per ton. Will Ihe reader 
 here ask himself, who pays the tax thus 
 levied in perpetuity on this road, or, 
 what is the same thing, on the jirivilege 
 of using it; and whether any correspond- 
 ing benefit in perpetuity accrues from 
 the tax? 
 
 From the above propositions and ex- 
 amples it would seem evident that the 
 direct effect of a protective duty, when 
 it is really operative, is to compel, on 
 the part of the community employing 
 such an agency, a resort to more dif- 
 ficult and costly conditions of protluc- 
 tion for the protected article; and also 
 that when a comnTiuiity adopts the pro- 
 tective policy it commits itself to the 
 indorsement of the principle that tlie 
 development and propagation of obsta- 
 cles is equivalent to, or the surest meth- 
 od of, developing or propagating riches 
 — a [)olicy and a principle which, if log- 
 ically and practically carried out, would 
 lead to disuse of all labor-saving ma- 
 ehint'ry. 
 
 The advocate of protection, however, 
 meets this averment, as well as the ar- 
 gunii'iit embodied in the coal and Bes- 
 semer steel illustrations above given, by 
 saying that by prohibiting or restrict- 
 ing the. importation and use of foreign 
 coal and steel a demand will be created 
 for a corresponding additional quantity 
 
 of similar American products The Im- 
 mediate result of this will be that an 
 additional opportunity must in conse- 
 quence bt! afforded to American citizens 
 desirous of following the occupations 
 of coal-miners or transjiorters or steel- 
 makers; and, the results of their labor 
 and expenditure remaining in the coun- 
 try, the national wealth will be thereby 
 augmented, whereas if the same amount 
 of labor and expenditure is diverted to, 
 and takes place in, a foreign country, 
 the result will be exactly op|iosite. 
 
 In answer, now, to this, it may be 
 said. First, That the amount of con- 
 sumption in the two instances, and con- 
 sequently the results of consumption, 
 will not be the same; for whatever in- 
 (•reases the price of a useful commod- 
 ity diminishes its consumption, and, vice 
 rer.'tt, whatever diminishes the price in- 
 creases consumption. Second, To ad- 
 mit the desirability of creating an oppor- 
 tunity of employing labor, through the 
 agency of a tax on all consumers of coal 
 and steel, to do work that would yield to 
 the same consumers a greater ])roduct of 
 the same articles if performed elsewhere, 
 or an equal product at less cost, is to 
 admit that the natural resources of a 
 country are so far exhausteil that there 
 is no opportunity for the truly produc- 
 tive employment of labor — an argument 
 which, however effective in overpop- 
 ulated countries, can have no possible 
 application in a new country like the 
 United States, whose natural resources, 
 so far from being exhausted, are yet, as 
 it were, unappropriated and unexplored. 
 Again, a tax levied in pursuance of leg- 
 islative enactment for the maintenance 
 of such labor is clearly in the nature of 
 a forceil charity, wliile the i)etitioners 
 for its enactment answer in every par- 
 ticular to the definition of the term 
 "pauper" — namely, one who publicly 
 confesses that he cannot earn a living 
 by his own exertions, and therefore asks 
 the community to tJix themselves or di- 
 minish their abundance for his support. 
 Third, The only true test of the increase 
 of national wealth is the possession of 
 an increased quantity of useful things in 
 the aggregate, and not in the amount of 
 
 
 !>> «K 
 
8 
 
 « The Creed of Free Trade. 
 
 labor perforuied or the niiinbcr of labor- 
 ers empioyt'd, irn^spectivo of ri'siiits. A 
 tariff, from Its very imtiire, cannot create 
 anytliing; It only affects the (li.Htrlbii- 
 tlun of what already exists. If the ini- 
 po.xition of restrictions by means of taxes 
 on imports enables a producer to eni- 
 I)Ioy a larger number of workmen and 
 to give them better wages than before, 
 it can be accomplishetl only at the ex- 
 pense of the domestic consumers, who 
 pay increased prices. Capital thus trans- 
 ferred is no more increased than is money 
 by transference from one pocket to an- 
 other, but on the contrary it is dimin- 
 ished to just the extent that it is diverted 
 from employing labor that is naturally 
 profitable to that which is naturally un- 
 profitable. 
 
 PROTECTION IN HKALITY D0E8 NOT 
 rHOTECT. 
 
 I 
 
 Herein, then, is exposed the fallacy of 
 the averment that duties levied on the 
 importation of foreign commodities pro- 
 tect home industry. It may be conceded 
 that certain industries may bo tem])ora- 
 rily stimulated, as the result of such <lu- 
 ties, and that the producers may obtain 
 large profits by a consequent increase in 
 the price of their products; but then, it 
 is at the expense of those who pay the 
 increased price, who are always the do- 
 mestic consumers. 
 
 To further make clear this position, 
 the following illustration, drawn from 
 actual American experience, is sub- 
 mitted: For a number of years subse- 
 quent to 1860, Congress, with a view of 
 protecting the American producer, im- 
 posed such a duty on foreign salt as to 
 restrict the import and at least double 
 the price of this commodity, whether of 
 foniign or domestic production, to the 
 American consumer. The result was, 
 taking the average price of No. 1 spring 
 ■wheat for the same period in Chicago, 
 that a farmer of the West, desirous of 
 buying salt in that market, would have 
 been obliged to give two bushels of 
 wheat for a barrel of salt, which, without 
 the tariff, he would have readily ob- 
 tained for one bushel. If, now, the tax 
 
 had been imposed solely with a view to 
 obtaining revenue, and the farmer h;til 
 bought im|)orted salt, the extra buslu'l 
 given by him would have accrued to the 
 benefit of the state; and if the circum- 
 stances of the government retjuired tin- 
 tax, and its imposition was expedient 
 and e(iuital)le, the act was not one to 
 wliich any advocatt! of fi-t^e trade could 
 object. Hut in tlu; case in (picstion the 
 tax was not imposed |)rimarily for rev- 
 enue, as was shown by the circumstance 
 that imports and revenue greatly de- 
 creased under its intluenec; and the salt 
 purchased by the farmer in Chii'ago was 
 domestic salt, which had paid no direct 
 or corresponding tux to the government. 
 The extra bushel of wheat, therefore, 
 which the farmer was compelled to give 
 for his salt accrued wholly to the i)fn- 
 efit of the American salt- boiler, and 
 the act was justified on the ground that 
 American industry, as exemplified in 
 salt-making, was protected. And yet it 
 must be clear to every mind that if the 
 farmer had not given the extra bushel 
 of wheat to the salt -boiler, he would 
 have had it to use for some other ])ur- 
 pose advantageous to himself — to give 
 to the shoemaker, for exami)Ie, in ex- 
 change for a pair of brogans. By so 
 much, therefore, as the industry of the 
 salt-boiler was encouraged, that of the 
 farmer and the shoemaker was discour- 
 aged; and, putting the whole matter in 
 the form of a commercial statement, we 
 have the following result : under the so- 
 called "protective system " a barrel of 
 sail and two bunhela of wheat were passed 
 to the credit of what is called ' ' home 
 industry," while under a free system 
 there were a barrel of salt, two bushels 
 of wheat, and a pair of shoes. Protec- 
 tion, therefore, seeks to promote indus- 
 try at the expense of the products of 
 industry; and its favorite proposition, 
 that though under a system of restric- 
 tion a higher price may be given for an 
 article, yet all that is paid by one is 
 given to some other person in increased 
 employment and wages, has this fallacy 
 — namely, that it conceals the fact that 
 the entire amount paid by the consumer 
 would " in the long run " have been 
 
 I'lpially cxpom 
 
 HOMiebody if ill 
 
 lowed to buy t 
 
 of the dear on 
 
 lu>s to the coi; 
 
 advantage i'/» /// 
 
 "When a ]ii 
 
 from a fravelci 
 
 lie, at a drinkin 
 
 er would liavo 
 
 else. But in tl 
 
 Ji'.'gregate ; the ^ 
 
 tli;it the enjoyr 
 
 man. But if tl 
 
 from the travele 
 
 for a dear articit 
 
 lit' is not only dc: 
 
 mciit as before, L 
 
 process besides, 
 
 if the loss liad 1 
 
 liitn work with a 
 
 sliarp one. Wli 
 
 tiling is taken fr 
 
 to another under 
 
 tion to trade, an 
 
 ally thrown into 
 
 the robbery of th 
 
 IN'KI.UKN'CE or I 
 MAXENT II 
 
 A further cone 
 
 fi'dUi theory and 
 
 iiice, is timt not i 
 
 a special industry 
 
 fit to the general 
 
 but also that its 
 
 any special Indus 
 
 but tem|)orary. ' 
 
 article can be pen 
 
 ai'tidcial agencies, 
 
 du' part of every | 
 
 ifitly concerned 
 
 pro (ict and compi 
 
 van ing the price 
 
 ui'ts he gives in ex 
 
 time is all'orded, ai 
 
 not iniduly restrict 
 
 peusation is alway 
 
 from the very nc 
 
 no protective duty 
 
 effective. Hence, 
 
 teeted nianufactur 
 
 and no doubt ho 
 
The Creed of Free Trade. 
 
 9 
 
 iMjiiftlly cxppniloil upon doinetliing and 
 »o!iu'l)(»(ly if tho conHuincr had hii-n al- 
 low('<l t(i liiiy tlu! t'lifni) iirticlo insti-ad 
 of ilie dfar ono; and consccjiu'iilly tlit; 
 lij-s to tlu! c'Oiismiicr la Imlnnccd Uy no 
 U(lvantii<;(! in l/ie (tf/'/rer/nle to any one. 
 
 "When a liii^hwayman takes a piirno 
 from a travcIiT, lie expends it, it may 
 he, at a drinking-iiidoon, and the travel- 
 er wonlil have expended it pomewhero 
 cl-e. But in this there is no loss in tho 
 ■icrjrieirule ; the vice of the transaction is 
 that the enjoyment goes to the wrong 
 man. But if the same money is taken 
 from the traveler hy foreing liim to pay 
 for a dear article instead of a cheap one, 
 he is not only despoiled of his just enjoy- 
 ment as before, but there ij a destructive 
 process besides, in the same manner as 
 if the loss had been caused by making 
 liiin work with a blunt axe instead of a 
 ^iKlrp one. Whenever, therefore, any- 
 liiiiig is taken from one man and given 
 to another under the pretense of protec- 
 tion to trade, an e<iual amount is virtu- 
 ally thrown into the sea, in addition to 
 the robbery of the individual." 
 
 IXFLUEXCE OF PROTKCTION NOT PEH- 
 MANENT BUT TEMPORARY. 
 
 A further conclusion, alike dedueible 
 from theory and proved by all expcri- 
 inec, is that not only docs protection to 
 a s|iecial industry not result in any bene- 
 fit to the general industry of a country, 
 but also that its beneficial influence on 
 any sjiecial industry is not permanent, 
 but temporary. Thus, the price of no 
 article can be permanently advanced by 
 artificial agencies, without an effort on 
 the part of every person directly or indi- 
 rectly concerned in its consumption to 
 proect and compensate himself by ad- 
 van ing the price of tho labor or prod- 
 ucts he gives in exchange. If suflicient 
 time is alTorded, and local exchanges are 
 not unduly restricted, this effort of com- 
 jicnsation is always successful. Hence, 
 from the very necessity of the case, 
 no protective duty can be permanently 
 cfl'ective. Hence, also, it is that pro- 
 tected manufacturers always proclaim, 
 and no doubt honestly feel, that the 
 
 abandonment of protection, or even itf 
 abatement, would be ruinous; nnd in 
 all lustory not one case can be cited 
 where tin; representatives of an indus- 
 try once protected have ever come for- 
 ward and asked for an abatement of 
 taxation on the groun<l that protection 
 had done its work. Under this head \he 
 recent exj)crii'n('e of the Uidted States 
 affords a most curious and convincing 
 illustration. Thus, in 18G2-C;), in order 
 to meet the expenses of a great war, tho 
 government imposed internal taxes on 
 every variety of domestic manufactures, 
 and in accordance; with the principles of 
 e<puty imposed what were claimed to 
 he correspomling taxes on the imports of 
 all eonipeting foreign products. Soon 
 after the close of the war, however, 
 when the cessation of hostilities dimin- 
 ished the necessity for such large reve- 
 nues, the internal taxes were repealed, 
 but in no one instance was there n pro- 
 tected manufacttn'cr found who took any 
 other position than thai a repeal of the 
 corresponding tariff wouhl be most dis- 
 astrous to his business. The tariff, as 
 originally raised to compensate for the 
 new internal taxes, was therefore left 
 in a great degree unchanged. That the 
 principle here laid down, of want of 
 permanency in protective agencies, is 
 furthermore admitted by the jjrotected 
 (American) manufactui'crs themselves 
 as a result of their own experience, ia 
 also proved by the following striking 
 testimony, forced out under oath be- 
 fore a government conuuission from one 
 of the foremost of their number in 1868 
 — the late Oakes Ames, of Massachu- 
 setts: — 
 
 Question, — What, according to your 
 experience, was the effect of the in- 
 crease of the tariff in 18G4 on the in- 
 dustries with which you are specially 
 acquainted? 
 
 Answer, — The first etleet was to 
 stimulate nearly every branch, to give 
 an impulse and activity to business; but 
 in a few months the increased cost of 
 production and the advance in the price 
 of labor and the products of labor were 
 greater than tlie increase of the tariff, 
 so that the business of production was 
 
 ^^^i 
 
10 
 
 I The Creed of Free Trade. 
 
 no better, even if in so good acondilion, 
 as it was previous to the .advance of the 
 tariff referred to. 
 
 WILL KKKE TRADE TEND TO DIMIN- 
 ISH THE OPrORTUMTIKS AND RE- 
 WARDS OF DOMEbriC INDUSTRY? 
 
 Upon no one argument liave the ad- 
 vocates of ])rotccti()n relied more, in sup- 
 port of their system, llian the assumption 
 that, if tliere were no restrictions on 
 trade, the opportunity to labor created 
 by protection and the results of the ex- 
 penditure of the earnings of such labor 
 would be diverted to other countries 
 to their benefit, and to the correspond- 
 ing detriment of that country which, 
 needing protection l)y reason of a ne- 
 cessity for paying higher wages or other 
 industrial inecjualities, abandons it; or, 
 to speak more specifically, it is assumed 
 that if the United States weve to adopt 
 a policy of free trade, England would 
 supply us with cotton and metal fab- 
 rications, Germany witli wooli'n good% 
 Nova Scotia with coal, the West In- 
 dies exclusively with sugar, Russia with 
 hemp and tallow, Canada with lumber, 
 and Australia with wool; that thereby 
 opportunity to our own people to labor 
 would be greatly restricted, and the 
 wages of labor be reduced to a level 
 with the wage! of foreigners. Specious 
 as is this argument, tliere could not 
 be a greater error of fact or a worse 
 sophism of renson. None of the com- 
 modities mentioned will be given by the 
 producers resident in foreign countries 
 for nothing. Product for product is the 
 invariable law of exchange, and we can- 
 not buy a single article abroad, save 
 through the medium of something that 
 must be produced at home. Hence the 
 utter absurdity of that assertion which 
 to protectionists seems pregnant with 
 such dreadful meaning, namely, " that 
 under free trade we should be deluged 
 with foreign goods; " for if more should 
 be really imj)orted under a free trade 
 than under a protective jrolicy, then one 
 of two things would take place: either 
 we nuist produce more at home in order 
 to pay for the new excess of imports, in 
 
 which case domestic industry would be 
 stinmlated and not diminished; or, not 
 proilucing more, we must obtain more 
 in return, or, what is the same thing, a 
 higher price for what we already \n'o- 
 duce — a result manifestly conducive to 
 national prosperity. It would also seem 
 to be in tlie nature of a self - evident 
 pro|)osition, that nothing under any cir- 
 cumstance can or will bo imported un- 
 less that in which it is jjaid for can be 
 produced at home with greater final ad- 
 vantage. 
 
 Again, the favorite protectionist ar- 
 gument that, if trade is unrestricted 
 and the peo{)le of a coimtry, under the 
 inducement of greater cheapness, are 
 allowed to supply themselves with for- 
 eign conimodities, the opportunities for 
 the employment of domestic labor will 
 be correspondingly diminished, is an 
 argument identical in character with 
 that which has in past times often led 
 individuals and whole communities to 
 oppose the invention and introduction 
 of labor-savins; or " labor-disnensini; " 
 machinery. But, to sift thoroughly this 
 sophism, it is sufTicient to remember 
 that labor is not exerted for the sake of 
 labor, but for what labor brings, and 
 that human wants expand just in pro- 
 portion to the multiplication of the nieaiis 
 and opportunity of gratifying human 
 desires. If the wages of a day's labor 
 would purchase in the market one hun- 
 dred times as nuich as at present, can 
 any one doubt that the demand for the 
 necessaries and luxiu'ies of life would be 
 increased a hundred-fold? If the peo- 
 ple of this country could obtain the 
 products of the labor of other countries 
 for nothing, coidd the labor of the whole 
 world supply the quantity of things we 
 should want? In short, the demand for 
 the results of labor can never be satis- 
 fied, and is never lindted exctept by its 
 ability to buy; and the cheaper things 
 are, the more things will l)e purchased 
 and consumed. Nothing, therefore, can 
 be more irrational than the supno.-ition 
 that increased cheapness, or increased 
 ability to buy and consume, diminishes or 
 restricts the ojjportunity to labor. If by 
 the invention of machinery or the (lis- 
 
37ij Creed of Free Trade. 
 
 11 
 
 I'overy of cheaper sources of supply the 
 labor of a certain number of individuals 
 in a department of industry becomes 
 pupurlinous or unnecessary, such labor 
 iiiiist take a new directiiin, and it is not 
 to be denied that in the process of re- 
 ailjiislnient temporary individual incon- 
 venience, and perhaps sulferinij:, may 
 nsiilf. But any teniporajy loss thus sus- 
 tained by individuals is more than made 
 up to soci(!ty, rejjarded from the stand- 
 pdiiit of either ])roducers or consumers, 
 by the increased demand consequent on 
 increased cheapness through greater ma- 
 terial abundance, and therefore great- 
 er comfort ^d happiness. About the 
 time of the invention and introduction 
 of the sewing-machine into Europe the 
 benevolent people of a city in Germany, 
 wlieie the industiy of needlewomen was 
 a marked specialty, formed an organi- 
 zation to lessen in a degree the injury 
 which it was believed the use of the 
 niacliine would inevitably occasion to 
 the poor by supplanting the necessity 
 for their employment. After the lapse 
 of a few years, however, when society, 
 as rejiresented by the whole people of 
 the city, obeying their natural instincts, 
 had determined to have, and had ob- 
 tained, a cheaper source of supply for 
 ihoir needle-])roducts than hefore, the 
 ori::ini;;ation referred to found that their 
 funiur existence was wholly unneces- 
 sary, inasnuich as the results of their 
 investigations showed that by reason of 
 a [iicater consiunption of sewed goods, 
 conse([uent on their cheaper supply, a 
 nnuh larger number of persons were 
 t'n'jaicMl in the operating of sewing-ma- 
 rliinrs than formerly found employment 
 hy the needle, and that wages had iu- 
 (.reased rather than diminished. 
 
 I'l'oni these j)remises, therefore, the 
 following deductions may be regarded 
 as in the nattne of economic axioms: 
 /''"■^Z. A nation or community can attain 
 the 'greatest prosperity, and secure to its 
 IK'oplc the greatest degree of material 
 ahimdance, only when it utilizes its nat- 
 ural resources and labor to the best ad- 
 vanta;j:e and with the least waste and loss, 
 whatever may be the nominal rate of 
 
 wages paid to its laborers. The reali- 
 zation of such a result is hastened or re- 
 tarded by whatever removes or creates 
 obstructions or interferences in the way 
 of production and exchanges. Second. 
 Tlie exports, on the whole, of any coun- 
 try must and always do balance its im- 
 ports; which is equivalent to saying that 
 if we do not buy we cannot sell, while 
 neither buying nor selling will take place 
 unless there is a real or supposed advan- 
 tage to both parties to the transaction. 
 Third. As a nation exports only those 
 things for which it possesses decided ad- 
 vantages relatively to other nations in 
 producing, it follows that what a nation 
 purchases by its exports it purchases by 
 its most efTicient labor, and consequently 
 at the cheapest possible rate to itself. 
 Hence, the price paid for every foreign 
 manufa(!tured article, instead of being 
 so much given for tlie encouragement 
 of foreign labor to the prejudice of our 
 own, is as truly the product of our own 
 labor as though we had directly manu- 
 factured it ourselves. Free trade, there- 
 fore, can by no j)ossibility discourage 
 home-labor or diminish tlie real wages 
 of laborers. 
 
 DOES PROTECTION ENCOURAGE DIVER- 
 SITY OF INDUSTRY? 
 
 Tlie averment that prohibition or re- 
 striction of foreign imports encourages 
 diversity of domestic industry is an- 
 swered by saying that when any trade 
 can be introduced or undertaken for fis- 
 cal or public advantage, private enter- 
 ])rise is competent to its accompl., lament. 
 " To ask for more is only to ask to have 
 a finger in the public purse." It may 
 be ])ossible to conceive of specific cases 
 in which it might be politic for a govern- 
 ment to give an advantage for a limited 
 time and for a definite object. But \^vo- 
 tection, as an economic system, cannot 
 rightfully claim any support from such 
 an admission, inasmuch as its demand is 
 that the public shall be obliged to sup- 
 port all manufacturing enterprises upon 
 no other ground than that they cannot 
 support themselves. 
 
 
 r. ^ > *i (A *" 
 
 
 ^ li 
 
 •-•^? 
 
 'yr 
 
 ^1 jt 
 
 '■• ' ' ^v^% 
 
 ^ imJ^^ 
 
 '.' t||ii 
 
 t.,^Lji it? 
 
 
 L'lM 
 
12 
 
 The Creed of Free Trade. 
 
 DOES PROTECTION TEND TO CHEAPEN 
 MANUFACTUUED PRODUCTS? 
 
 Protection, it is filleged, has a tend- 
 ency to maiie what are termed manu- 
 factured products cheaper. A very fit 
 and cogent answer whicli h.as been made 
 to this assertion of the opponents of free 
 trade is, tliat if protection is to be rec- 
 ommended because it leads ultimately 
 to cheapness, it were best to begin with 
 cheapness. Another answer is to be 
 found in the circumstance that not a sin- 
 gle instance can be adduced to show that 
 any reduction has ever taken place in 
 the cost of production under a system of 
 protection, through the agencies of new 
 inventions, discoveries, and economies, 
 whicli would not have taken place equal- 
 ly soon under a system of free trade; 
 while, on the contrary, many instances 
 can be referred to wliich prove that pro- 
 tection, by removing the dread of foreign 
 competition, has rctsirded not only inven- 
 tion, but also the application and use of 
 improvements and inventions elsewhere 
 devised and introduced. Thus, refer- 
 ring to the experience of the United 
 States, where the system of protection 
 has in general prevailed for many years, 
 it is a well-known fact that the depart- 
 ment of industry which has been distin- 
 guished more than any other by the in- 
 vention and application of labor-saving 
 machinery is that of agriculture, which 
 has never been protected to any extent; 
 and for the reason that in a country 
 which raises a surplus of nearly all its 
 .agricultural proilucts for sale in foreign 
 countries it never can be. On the other 
 hand, in that department of industry 
 engaged in the primary manufacture of 
 iron, which has always been especially 
 shielded by high restrictive duties, not 
 only from foreign competition, but also 
 from the necessity of the exercise of 
 economy and skill, the progress in the 
 direction of improvement has been so 
 slow that according to tlie report of the 
 geological survey of Ohio (1871) there 
 is hardly a furnace in that great iron- 
 producing State that can be compared 
 with the best English furnaces, in re- 
 
 spect either to construction, manage- 
 ment, or product, and that "there is 
 scarce any art practiced by our jieople 
 so eminently progressive," which is " so 
 far from having reached perfection as 
 tliis one" of simple iron-smelting. 
 
 DOES IT PAY TO EFFECT A REDUCTION 
 OF PRICES BY ARTIFICIALLY 6TLMU- 
 LATIXG PRODUCTION? 
 
 It is here pertinent to notice an idea 
 adopted by a school of American econo- 
 mists or politicians, tliat it is for the 
 advantage of a country to endeavor to 
 effect a reduction of prices by the crea- 
 tion, through legislation or otherwise, 
 of an excessive or artificial stimulus to 
 production. That the creation of an 
 artificial stimulus to domestic production 
 — such as is almost always temporarily 
 afforded by an increase of the tariff or 
 by war, which necessitates extraordinary 
 supplies — does have the effect in the first 
 instance to quicken certain branches of 
 production, and subsequently to reduce 
 j)rices through the competition engen- 
 dered, cannot be doubted ; but experience 
 shows that in almost every such instance 
 the reduction of prices is effected at the 
 expense or waste of capital, and that the 
 general result, in place of being a gain, 
 is one of the worst events tliat can hap- 
 pen to a community. Thus, the first 
 effect of creating an extraordinary do- 
 mestic demand is to increase prices, 
 which in turn affords large iiroilts to 
 those in possession of stock on hand or 
 of the machinery of production ready 
 for innnediate service. The prospect of 
 the realization of large profits next im- 
 mediately tempts others to engage in the 
 same branch of production — in nianv 
 cases with insufficient capital, and with- 
 out that practical knowledge of the de- 
 tails of the undertaking essential to se- 
 cure success. As production goes on, 
 supply gradually becomes equal to, and 
 finally in excess of, demand. The pro- 
 ducers working on insufficient capital or 
 with insufficient skill are soon obliged, 
 in order to meet impending obligations 
 or dispose of inferior products, to force 
 sales through a reduction of prices, and 
 
The Creed of Free Trade. 
 
 13 
 
 tlic othors, in order to retain their mar- 
 kets and custouiers, are soon compelled 
 to follow their example. This in turn is 
 followed by new concessions alternately 
 by both parties, which are accompanied 
 by the usual resort of turning out articles 
 or products of inferior quality, but with 
 an external good appearance — slate be- 
 ing substituted in the place of coal; cin- 
 der in the place of iron; shoddy in the 
 place of wool; starch and sizing in the 
 ])liice of cotton; pasteboard in the manu- 
 facture of boots and shoes in the place 
 of leather; and clay in the manufacture 
 of j)aper in the place of fibre. And so 
 the work of production goes on, until 
 gradually the whole industry becomes 
 depressed and demoralized, and the weak- 
 er producers succumb, with a greater or 
 less destruction of capital and waste of 
 product. Affairs having now reached 
 their minimum of depression, recovery 
 slowly commences. The increase of the 
 country causes consumption gradually to 
 gain on production, and finally the com- 
 munity suddenly becomes aware of the 
 fact that supply has all at once become 
 unequal to the demand. Then those 
 of the producers who have been able to 
 maintain their existence enter upon an- 
 other periotl of business prosperity ; oth- 
 ers again rush into the business, and the 
 old experience is again and again repeat- 
 ed. Such has been the history of the 
 industry of the United States under the 
 iittenq)t to restrict the freedom of trade 
 by high duties on imports, frequently 
 modilied; and such also was the effect 
 of tlR, war of 1861-65. To use a fa- 
 miliar expression, it has always been 
 either " higii water" or " low water " 
 ill the manufacturing industry of the 
 country — no middle course, no stability. 
 What the peojjle have gained at one 
 time from low prices as consumers they 
 have more than lost at another by the 
 recurrence of extra rates, and they hiive 
 also lost, as producers, by periodical 
 suspensions of industry, spasmodic re- 
 duction of wages, and depression of busi- 
 ness. 
 
 Meantime, the loss to the counti'y from 
 the destruction of capital and the waste 
 and nusapplication of labor has been 
 
 something which no man can estimate ; 
 but to -whieh, more than to any other 
 one agency, the present remarkable in- 
 dustrial depression of the country must 
 be attributed. The illustrations under 
 this head afforded by the recent indus- 
 trial experience of the United States are 
 very numerous, and are not surpassed 
 in curious interest by anything on record 
 in the whole range of economic history. 
 The following will serve as examples : — 
 In 1864-65 it was found that the sup- 
 ply of paper of domestic manufacture 
 was insufficient to meet the consumption 
 of the country, and that the supply from 
 abroad was greatly impeded by an un- 
 usually heavy duty imposed in time of 
 war on its import. The price of paper in 
 the country accordingly rose with great 
 rapidity, and the profits of the paper- 
 manufacturers who were then in pos- 
 session of the machinery of production 
 became something extraordinary. The 
 usual effect followed. A host of new 
 men rushed into the business and old 
 manufactories were enlarged, so that 
 during the years 1864-66 it was esti- 
 mated that more paper-mills were built 
 in the United States than during the 
 whole of the twelve years previous. As 
 a matter of course, the market became 
 overstocked with paper, prices fell with 
 great rapidity, many abandoned the 
 business through inclination or necessity, 
 and many mills and much machinery 
 were sold for less than the cost of con- 
 struction; while in the spring of 1869 
 the paper-makers met in convention to 
 consider the desirability of decreasing 
 the production of paper — or, what is 
 the same thing, of allowing their capital 
 and their labor to remain unemployed — 
 on account of the unprofitableness of the 
 business. In October of the same year 
 a storm of great violence swept over the 
 northern portion of the country, and in 
 the flood which followed, many mills en- 
 gaged in the manufacture of paper were 
 60 injured as to be temporarily incapable 
 of working. A leading journal in one 
 of the paper-manufacturing districts, de- 
 voted to the advocacy of protection, in 
 commenting on the effects of the storm, 
 used this language: "There seems to 
 
 
 
14 
 
 The Creed of Free Trade. 
 
 have been unusual fatality among paper- 
 mills, but this disaster will work to the 
 advantajre of those who escaped the 
 flood, and we doubt not that those that 
 did stand will do a better business in 
 consequence of the lessened supply;" 
 or, in other words, the condition of this 
 particular industry had become so bad 
 through the influence of a fiscal policy 
 based on the theory of protection that 
 the occurrence of a great public calam- 
 ity, with a vast attendant destruction of 
 property, had come to be regarded in 
 the light of a public blessing. 
 
 Again, at Kanawha, Virginia, there 
 are remarkable salt - springs, some of 
 which furnish conjointly with the brine 
 an inflammable gas, which flows with 
 such force and quantity that it has been 
 used not only to lift the salt-water into 
 tanks at a considerable elevation above 
 the evaporating pans, but also to sub- 
 sequently evaporate the brine by igni- 
 tion under tlie furnaces; thus obviat- 
 ing the expense both of pumping and of 
 fuel. During the war, in order to de- 
 prive the army and the people of the 
 Southern Confederacy of a supply of 
 salt, the springs in question, at Kana- 
 wha, were rendered useless by the Fed- 
 eral forces ; which fact, coupled also 
 with the imposition of excessively high 
 duties (over one hundred per cent.) on 
 the import of foreign salt, gave to the 
 manufacturers of salt on the Ohio River 
 such a market, that although the cost of 
 manufacturing was nearly doubled, their 
 profits for a time were enormous; salt 
 that cost in 1868, at points on the Ohio 
 River, twenty-three cents per bushel, in 
 barrel, selling readily in Cincinnati for 
 forty-eight cents per bushel. The re- 
 sult was such an increase in the number 
 of salt wells and furnaces on the Ohio 
 River, and such an increase in the power 
 of production, that the available mar- 
 ket, deprived of the stimulus of the war, 
 was soon unable to take but little more 
 than one half of the salt that could be 
 produced. As was natural, the price 
 of salt under such circumstances rapid- 
 ly declined ; and a struggle for existence 
 among the manufacturers commenced. 
 The furnaces built at war prices and 
 
 based on insufficient capital were soon 
 crushed out of existence; while life was 
 preserved to the remainder only by the 
 formation of a manufacturers' associa- 
 tion for permanently limiting produc- 
 tion; and in order that such limitation 
 of production and consequent breaking 
 down of prices might not be interfered 
 with, the Kanawha wells (the proprie- 
 tors of which were not in the associa- 
 tion), with all their advantages, were 
 leased for a term of years at a large 
 annual rental, called " dead rent," and 
 all utilization of them suspended and 
 forbidden. " Now had the duty on 
 salt," writes one of the leading mem- 
 bers of the association, under date of 
 December, 1874, " never been raised 
 above the present rate, I have no doubt 
 that the capital invested in the business 
 would have been more profitable, and 
 that the waste of the large amount that 
 has been uselessly invested would have 
 been prevented." 
 
 LAWS ESTABLISHING PROTECTION NEC- 
 ESSARILY UNJUST AND UNSTABLE. 
 
 One of the essential attributes of a 
 just law is that it bears equally upon all 
 subjected to its influence; and it would 
 also seem clear that the general effect 
 of an unjust law must be injurious. Now 
 a system of law imposing protective du- 
 ties must, in order to be effective, be 
 partial and discriminating, and therefore 
 unequal and unjust; for if a law could 
 be devised which would afford etjual 
 protection ito all the industrial interests 
 of a nation, it would benefit in fact no 
 interest by leaving everythin'j; relatively 
 as before; or, in other words, the at- 
 tempt to protect everything would result 
 in protecting nothing. 
 
 Any system of laws founded on injus- 
 tice and inequality cannot, furthermore, 
 be permanent. The possibility tliat it 
 may be further changed to meet the in- 
 creased demands of special interests, and 
 the instinctive revolt of human nature 
 against legal wrong and partiality, con- 
 tinually threaten its stability. Hence, 
 a system of industry built upon laws es- 
 tablishing protection through discrimi- 
 
The Creed of Free Trade. 
 
 15 
 
 iiating taxes can never have stability of 
 condition; and without such stability 
 there can be no continued industrial 
 prosperity. 
 
 On the other hand, one of the strong- 
 est arguments in behalf of freedom of 
 trade is, tliat it makes every branch of 
 tiuliistry independent of legislation, and 
 ciiiancii)ates it from all conditions affect- 
 ing its stability other than what are 
 natural and which can in a great degree 
 be anticipated and provided against. 
 
 DO FORKIGNERS PAY A PORTION OF 
 OUR TAXES ON IMPORTS? 
 
 It is often asserted, by the advocates 
 of protection, tliat a tariff on imports 
 " obliges a foreigner to pay a part of our 
 taxes." To this it may be replied that 
 if there were any plan or device by 
 wliicli one nation could thus throw off 
 its burden of taxation in any degree 
 iipun anotlier nation, it would long ago 
 liave been universally found out and rec- 
 ognized, and would have been adopted 
 by all nations to at least the extent of 
 making the burden of taxation thus 
 transferred in all cases reciprocal. If 
 the principle involved in the proposition 
 in question, therefore, could possibly be 
 truo, no advantage whatever could ac- 
 crue from its application. But tlie point 
 itsi'lf involves an absurdity. Taxes on 
 imports are paid by the persons who 
 consume tliem; and tliese are not for- 
 eigners, but residents of the country 
 into which the commodities are import- 
 ed. A duty on imports may injure for- 
 eigners by depriving them of an oppor- 
 tunity of exchanging their products for 
 tlie products of the country imposing tlie 
 •liitv, but no import-taxes will for any 
 length of time compel foreigners to sell 
 their products at a loss, or to accept less 
 than the average rate of profit on tlicir 
 transactions; for no business can per- 
 manLiitly maintain itself under such 
 conditions. Wliere a nation jwssessesa 
 complete monopoly of an article, as is 
 the case of Peru in respect to guano, 
 and to a great extent with China in the 
 ease of tea, the monopoly always obtains 
 the lii;,diest practicable price for its com- 
 
 modity, and the persons who find its 
 use indispensable are obliged to pay the 
 prescribed prices. The imposition of a 
 tax on the importation of such a com- 
 modity into a country may compel the 
 monopoly, for the Siike of retaining a 
 market, to reduce its prices proportion- 
 ally; and in such cases tlio nation im- 
 I)osing the impost may to a degree share 
 the profit of the monopoly. But the 
 price to the consumers is not diminished 
 by reason of the import-duty, and the 
 cases in wliieh any interest has such a 
 complete control over the supply of a 
 product as to enable it arbitrarily to dic- 
 tate prices are so rare as hardly to ren- 
 der them worthy of serious consideration 
 in an economic argument. 
 
 THE PEACE AND WAR ARGUMENT. 
 
 Another powerful argument in favor 
 of free trade between nations is, that of 
 all agencies it is the one most conducive 
 to the maintenance of international peace 
 and to the prevention of wars. The 
 restriction of commercial intercourse 
 among nations tends to make men stran- 
 gers to each other, and prevents the 
 formation of that union of material inter- 
 ests which creates and encourages in 
 men a disposition to adjust their differ- 
 ences by peaceful methods rather than 
 by physical force. On the other hand, 
 it requires no argument to prove that free 
 trade in its fullest development tends to 
 make men friends rather than strangers, 
 for the more tliey exchange commodities 
 and services the more tliey become ac- 
 quainted with and assimilated to each 
 other; whereby a feeling of interdepend- 
 ence and mutuality of interest sjjrings 
 up, which, it may be safely assumed, 
 does more to maintain amicable relations 
 between them than all the ships of war 
 that ever were built or all the armies 
 that ever were organized. Of tlie truth 
 of this the experience of England and 
 the United States in respect to the 
 Alabama claims is a striking example. 
 The moral an<l religious sentiments of 
 the people of the two countries undoubt- 
 edly contributed much to restrain the 
 belligerent feelings that existed previ- 
 
 P <r 
 
 T.!-' 
 
10 
 
 The Creed of Free Trade. 
 
 
 
 0U8 to tlic reference of the claims to 
 arbitration; but a stronger restraining 
 element than all, and one underlying 
 and supporting the moral and religious 
 influences, was a feeling among the great 
 body of the people of the two nations 
 that war, as a mere business transaction, 
 "would not pay;" and that the com- 
 merce and trade of the United States 
 and Great Britain are so interlinked and 
 interwoven that a resort to arms would 
 result in permanent and incalculable im- 
 poverishment to both countries. 
 
 One argument, however, in favor of 
 protection, which is said to take stronger 
 hold on the popular mind than almost 
 any other, is the asserted necessity of 
 artificially stimulating by legislation all 
 manner of domestic industries, in order 
 that the country may not be dependent 
 on other nations for martial requisites 
 in case of possible foreign war. The 
 first answer to this averniQut is, that 
 whatever may have been our condition 
 heretofore, the power of production at 
 present in the United States is so great, 
 so varied, and so permanently estab- 
 lished, that it is hardly possible to con- 
 ceive of a contingency in which the 
 nation could be inconvenienced by a 
 deficiency of any material i-equisite for 
 the cfirrying on of war, with the excep- 
 tion of the two commodities, gold and 
 saltpetre; and it will not be pretended 
 by any one that the domestic supply of 
 either of these articles can be advan- 
 tageously increased by restricting their 
 importation. Second, with a vigorous, 
 patriotic population, especially if the 
 same be supplementeil, as in the case of 
 England and the United States, with 
 favorable natural conditions for defense, 
 that nation, under our present civiliza- 
 tion, will be most invulnerable in war 
 which can incur and sustain the great- 
 est and longest-continued expenditure, 
 or which, in other words, is possessed of 
 the greatest national wealth. But na- 
 tional wealth increases in a ratio propor- 
 tioned to the removal of obstacles in the 
 «vay of the development of trade, com- 
 merce, and all productive industries, 
 whether such obstacles be in the nature 
 of an imperfect education of the people, 
 
 or in the nature of bad roads, high 
 mountains, impenetrable forests, track- 
 less deserts, popular prejudices, or legal 
 conunercial restrictions, which impede 
 a free interchange of commodities and 
 services. In support of these positions 
 two historical illustrations may be cited 
 as evidence. 
 
 During the late civil war, the Conftd- 
 erate States, although deficient in almost 
 all the so-called manufacturing indus- 
 tries, with a population trained almost 
 exclusively to agriculture, and with all 
 their nmin lines of intercommunication 
 with the external world blockaded, nev- 
 ertheless managed to obtain at all times 
 adequate military supplies for conduct- 
 ing great campaigns so long as they 
 were able to pay for them, and finally 
 succumbed to the financial rather than to 
 the ])hysical power of their antagonists. 
 
 Upon this same point the examjile of 
 Plolland is also most instructive. From 
 the commencement of their existence as 
 a nation, the Dutch not only made their 
 country an asylum for the oppressed of 
 all nations, but they took especial i;are 
 that their trade, industries, and all 
 commercial exchanges should be "un- 
 fettered, unimpeded, and unlegislatcd 
 upon," and this too while all the rest of 
 the civilized world adopted a diamet- 
 rically opposite policy. The result was 
 that, though possessing a most restricted 
 territory (about four hundred thousand 
 acres of arable land) and a limited pop- 
 ulation (loss than two millions), they 
 not only maintained their independence 
 against the combined hosts of Spain, 
 France, and Germany, but for a time 
 became the dominant naval power of the 
 world. Though not raising a bushel of 
 wheat, Holland became the best placu 
 for Europe to buy grain; though she did 
 not possess an acre of forests, there was 
 always more and better timber to be ob- 
 tained in her ports than elsewhere; and 
 though she smelted no iron, and did not 
 raise a "sheaf of hemp," her fleets be- 
 came the best that sailed the seas; and 
 all because, to use the words of one of 
 her statesmen (Cornelius UeWitt, 1745), 
 " she had the wealth to pay for these 
 commodities," and possessed this wealth 
 
 because tra 
 left unimj)e( 
 
 WHY FREE 
 LY AND I 
 
 But the qi 
 
 If the above 
 
 trade are cor 
 
 protection is 
 
 is re])resente( 
 
 free trade di 
 
 uidversal ace 
 
 adherence of 
 
 and practical 
 
 doctrine to b 
 
 tlie best answ 
 
 given by the 
 
 mist Bastiat, i 
 
 years ago, enl 
 
 i'lid That whi 
 
 lie showed tha 
 
 mainly by a vi 
 
 gains and a t 
 
 consumer loses 
 
 the million wei 
 
 its the profits of 
 
 tolerate the sys 
 
 Action accumu 
 
 I he good which 
 
 which it inflicts 
 
 •-•oninuinity as i 
 
 sti'ikcs the eye 
 
 •luiressonjeinvc 
 
 ly perceptible 
 
 Mankind als 
 i«i) classes — n 
 buyers and sell 
 •liiccrs and sel 
 '"gi», or that tl 
 interest of const 
 !"ices shall be 
 be abundance, 
 iit once admit 
 interest that th 
 '•'iber than scar 
 'mlividiialscont 
 I'i'odiiction, tiie 
 iiiid sellers of 
 |"oiiities may be 
 '"terest as con 
 li'tii.-iation the j 
 •luce can be ra 
 laws, disproporti 
 
The Creed of Free Trade. 
 
 17 
 
 becuuijc trade and ull uxchunges were 
 luft uniiiipuded. 
 
 WHY FKEE TKADE IS NOT IMMEDIATE- 
 LY AND UNIVERSALLY ACCEl'TED. 
 
 But the question here naturally arises, 
 If the above propositions in favor of free 
 trade are correct, and if the doctrine of 
 protection is as false and injurious as it 
 is represented to be, how happens it that 
 free trade does not at once meet with 
 universal aci:eptance? and how is the 
 adherence of many men of clear intellect 
 and practical experience to the opposiite 
 doctrine to be accounted forV One of 
 the best answers to these questions was 
 ^iven by the celebrated French econo- 
 mist Bastiat, in an article written many 
 year.s ago, entitled That which is Seen 
 and That which is not Seen, in which 
 he showed that protection is maintained 
 mainly by a view of what the producer 
 gains and a concealment of what the 
 consumer loses; and that if the losses of 
 the million were as patent and palpable 
 as the profits of the few, no nation would 
 tolerate the system for a single day. Pro- 
 tiution accumulates upon a single jjoint 
 the good which it effects, while the evil 
 which it inflicts is infused throughout the 
 community as a whole. The first result 
 strikes the eye at once; the latter re- 
 (luires some investigation to become clear- 
 ly perceptible. 
 
 Mankind also divide themselves into 
 two classes — producers and consumers, 
 Inivers and sellers. The interest of pro- 
 (liuers and sellers is that prices shall be 
 high, or that there shall be scarcity; the 
 interest of consumers and buyers is that 
 Iirices shall be low, or that there shall 
 be abundance. Every person will also 
 lit once admit that it is for the general 
 interest that there shall be abundance, 
 lather than scarcity. But in the case of 
 iiiiiividiials coiitrolliii'i laryie ajrencies for 
 production, their interest as producers 
 and sellers of large quantities of com- 
 modities may be made gi-eater than their 
 interest as consumers, if by the aid of 
 legislation the price of what they pro- 
 duce can be raised, by discriminating 
 laws, disproportionately over what they 
 
 consume, or to the cost of production. 
 Men of this class are generally rich be- 
 yond the average of the eonununitj , and 
 therefore influential in controlling legis- 
 lation and in determining fiscal policies; 
 and it is but natural that in so doing 
 they should consult their own interests 
 rather than the interests of the masse o. 
 The time, however, is soon coming, when 
 the people of the United States " will 
 wake as it were from a dream, and ask 
 who it was that persuaded them that the 
 way to be rich was for everybody to give 
 as much as possible for everything." 
 
 CONCLUSION. 
 
 It only remains briefly to notice the 
 testimony of history in respect to the in- 
 fluence of free trade as an econondc prin- 
 ciple upon the development of nations 
 and the progress of civilization. 
 
 In the earlier ages in Europe the prin- 
 ciple that trade or commerce is mutually 
 advantageous, and that after every fair 
 mercantile transaction both parties are 
 richer than before, was not understood. 
 On the contrary, the generally accepted 
 theory among both nations and individu- 
 als in respect to trade was pithily em- 
 bodied by an old proverb, " What is one 
 man's gain must be another man's loss." 
 Commerce, therefore, it was assumed, 
 could benefit one country only as it in- 
 jured some other. In accordance, there- 
 fore, with this principle, every state in 
 Christendom, in place of rendering trade 
 and conunerce free, exerted itself to im- 
 pose the most harassing restrictions on 
 commercial intercourse, not only as be- 
 tween different countries, but also as be- 
 tween districts of the same country, and 
 even as between man and man. " Coun- 
 try was accordingly separate<l from coun- 
 try and town from town as if seas ran 
 l)etween them. If a man of Liege came 
 to Ghent with his wares, he was obliged 
 first to pay toll at the city's gate; then 
 when witliin the city he was embarrassed 
 at every step with what were termed 
 'the jirivileges of companies;' and if 
 the citizen of Ghent desired to trade at 
 Liege, he exjjcrieneed the same diffi- 
 culties, which were effectual to prevent 
 
 %^ 
 
 
 -■Ml 
 
 
18 
 
 The Creed of Free Trade. 
 
 either from tniding to the best adviintage. 
 The revL'nues of most cities were also 
 in great part derived from the fines and 
 forfeitures of trades, almost all of which 
 were established on the principle that 
 if one trade became too industrious or 
 too clever, it would be the ruin of an- 
 other trade. Every trade was accord- 
 ingly fenced round with secrets, and the 
 commonest trade was termed, in the lan- 
 guage of the indentures of apprentices, 
 'an art or mystery.'" If one nation 
 saw profit in any one manufacture, all 
 her efforts were at once directed to frus- 
 trate tlie attempts of other nations to 
 engage in the same industry. She must 
 encourage the importation of all the raw 
 materials that entered into its production, 
 and adopt an opposite rule as respected 
 the finished article. At the close of the 
 sixteenth century England undertook 
 the woolen manufacture. By the 8th of 
 Elizabeth the exporter of sheep was for 
 the first offense to forfeit his goods for- 
 ever, to suffer a year's imprisonment, 
 and then have his left hand cut off in 
 a market-town on market-day, there to 
 be nailed up to the pillory. For the 
 second offense he should be adjudged a 
 felon, and suffer death. At a later pe- 
 riod, in the reign of Charles II., it was 
 enacted th.at no person within fifteen 
 miles of the sea should buy wool with- 
 out the permission of the king; nor could 
 it be loaded in any vehicle, or carried, 
 except between sunrisingand sunsotting, 
 within five miles of the sea, on pain of 
 forfeiture. An act of Parliament in 
 1G78, for the encouragement of woolen 
 manufactures, ordered that every corpse 
 should be buried in a woolen shroud. 
 In 1672 the lord chancellor of England 
 announced the necessity of going to war 
 with the Dutch and destroying their com- 
 merce, because it was surpassing that of 
 Great Britain; and even as late as 1743 
 one of England's greatest statesmen de- 
 clared in the House of Lords that " if 
 our wealth is diminishing, it is time to 
 ruin the commerce of that nation which 
 nas driven us fiom the markets of the 
 Continent, by sweeping the seas of their 
 ships and blockading their ports." By 
 tlie treaty of Utrecht, which concluded 
 
 the great war of England and Spain 
 against Louis XIV. and his allies, En- 
 gland, being able to dictate the terms, 
 secured the adoption of a section by 
 which the citizens of Antwerp were for- 
 bidden to use the deep water that fiowed 
 close by their walls; and it wjis further 
 expressly stipulated that the capacious 
 harbor of Dunkirk, in the north of France, 
 should be filled up and forever ruined, 
 so that French commerce might not be- 
 come too successful. 
 
 With the progress of civilization, and 
 the consequent diffusion of information, 
 the arbitrary restrictions on trade abovij 
 noticed, which were formerly so common 
 in Europe, have almost entirely disap- 
 peared, and men now wonder that anv 
 benefit could ever have been supposed 
 to accrue from such absurd and mon- 
 strous regulations. But the change to a 
 more liberal state of things, though con- 
 stant, has been slow, and the policy of the 
 Middle Ages, in the process of modifica- 
 tion and extinction, gave place to the 
 so-called and more modern policy of 
 "protection," which, while clearly rec- 
 ognizing the impolicy of interfe-ing with 
 domestic exchanges, regards foreign trade 
 as something different from any other 
 trade, which it is for the interest of the 
 state to interfere with and regulate. But 
 under the same influences of a progress- 
 ive civilization this system too, in like 
 manner, is disappearing. 
 
 In this work of progress Great Britain 
 took the lead in 1841; not fromachan"e 
 in popular sentiment due to better ac- 
 quaintance with theoretical principles, 
 but from a realization, on the part of all 
 classes of the people, of the results which 
 the recognition and practice of the policy 
 of protection during a period of many 
 yeiirs had entailed upon the country. 
 These results Mr. Noble, in his work, 
 Fiscal Legislation of Great Britain, thus 
 describes: "It is utterly impossible," 
 he says, " to convey by mere statistics 
 of our exports any adetpiate picture of 
 the condition of the nation when Sir 
 Robert Peel took office in 1841. Every 
 interest in the country was alike de- 
 pressed: in the manufacturing districts 
 mills and workshops were closed and prop- 
 
 erty deprc 
 
 ports shipi 
 
 harbor; an 
 
 out a mise 
 
 lion waii'os 
 
 enue was in 
 
 expenditure 
 
 the verge of 
 
 ruptcy." J 
 
 under comp 
 
 <loubts on tl 
 
 financiers an 
 
 of Sir Kober 
 
 ns the nati( 
 
 adopted the 
 
 trade with ; 
 
 iiiithor above 
 
 I.SG.5, draws 
 
 results of th 
 
 I'll the experi 
 
 a century: " 
 
 pi'ospcroMs, la 
 
 ly extended n 
 
 iiient, incrciuic 
 
 while .securing 
 
 creased reven 
 
 value of prope 
 
 taxation. It ] 
 
 each suecessiv 
 
 neficent legisli 
 
 results." 
 
 Tlie experi( 
 more instruct 
 occuj)atioii of 
 First N.ipoleo: 
 was carried oi 
 military rule, . 
 equaled. Not 
 of all foreign 
 strictly forbhh 
 eiirn j)ro(luctioT 
 Were seized anc 
 '•ijiicerned in 
 iiiarily and sev( 
 ^"It of such a 
 1 1"' Dutch rea; 
 "1 1814, the wli 
 •h'solated and 
 ''t'Jiopulated. 
 '"■ought in a ne' 
 policy, one car 
 w;is a limitation 
 Ih-ee per cent, 
 per cent, on mar 
 
The Creed of Free Trade. 
 
 19 
 
 erty depreciated in value; in the sea- 
 ports shipping; was laid up useless in the 
 harbor; agricultural laborers were ekini^ 
 out a iniseralde existence upon starva- 
 tion wages and parochial relief; the rev- 
 enue was insuflicicnt to meet the national 
 expenditure; the country was l)ruught to 
 the verge of national and universal bank- 
 ruptcy." England, therefore, as it were 
 under compulsion, and with very grave 
 doubts on the part of many of her ablest 
 financiers and econondsts, under the lead 
 of Sir Robert I'eel abandoned protection 
 as the national policy, and gradually 
 adopted the opposite principle of free 
 trade with all the world. The same 
 author above referred to, writing in 
 18G5, draws the following picture of the 
 results of this change of policy based 
 ou the experience of near a quarter of 
 a century: " It has rendered agriculture 
 prosperous, largely augmented rent, vast- 
 ly extended manufactures and employ- 
 ment, increased the wages of labor, and, 
 wliile securing the collection of an in- 
 creased revenue, has by improving the 
 value of property lessened the burden of 
 taxation. It has been shown, also, that 
 each successive development of this be- 
 neficent legislation has extended these 
 results." 
 
 The experience of Belgium is even 
 more instructive. During the French 
 occupation of this country under tlie 
 First Napoleon, the ])rotective system 
 was carried out, practically and under 
 military rule, to a degree rarely if ever 
 ctpialed. Not only was the introduction 
 of all foreign goods into the country 
 strictlv forbidden, but all goods of for- 
 ci'iu i)roiluclion found within the state 
 were seized and burned, and the persons 
 Concerned in their importation sum- 
 marily and severely punished. The re- 
 sult of such a system was that when 
 tlir Dutch reassumed the sovereignty, 
 in 1814, the wliole country had become 
 desolated and to a considerable extent 
 ili'lHjpulated. The Dutdi, however, 
 brought in a new fiscal and commercial 
 jiolicy, one cardinal feature of which 
 was a limitation of duties on imports to 
 tfiree per cent, on raw materials and six 
 pi;r cent, on manufactured articles. Un- 
 
 der this liberal legislation the principal 
 manufactures of Helifiinn anain snranir 
 into existence. But a deep-rooted an- 
 tagonism between tin; Dutch and the 
 Belgiiins led to a scpiiralion of the two 
 eoiinlries in 1830, when, mainly through 
 a hatred of the old government anil its 
 policy, the pn^vinus fre(!-traile legisla- 
 tion was repe.aled, and from 1830 to 
 1855 high protective and discriminating 
 dutitis were imposed on imports. But 
 in 1851 the finance miiuster in his place 
 in Farliament declared that if this policy 
 was continued it would prove the ruin 
 of the whole system of domestic indus- 
 try; and in 1855 the Parliament and the 
 people so fully ac({uiesced in his opinion 
 that protection in Belgiiun was swept 
 away at once and forever, and the du- 
 ties on imports were arranged purely 
 with a view to revenue. 
 
 The examples thus set by Great Brit- 
 ain and Belgium have in turn been fol- 
 lowed in a greater or less degree by 
 most of the other states of Europe, and 
 in no one instance where a relaxation 
 of previously existing commercial re- 
 strictions has once been made, and fairly 
 tried, has there been any serious retro- 
 gression. 
 
 In the United States, on the contrary, 
 the principles of the protective system 
 have since 18C0 been reapplied, and are 
 still maintained, with a degree of rigid- 
 ity and on a scale of magnitude which 
 have no precedents in recent commercial 
 history. The general result has been 
 (1875) to assimilate the industrial con- 
 dition of tlie country to the condition 
 of Great Britain in 1841 (before de- 
 scribed), when the protective system 
 was from necessity abandoned. In 
 place of effecting national industrial in- 
 dependence, or emancipation from na- 
 tional dependence on foreign skilled 
 labor, as it was confidently claimed that 
 the system would do, it has in fact pro- 
 duced the exact contrary result; the 
 import of the products of foreign skilled 
 labor having greatly increased, while the 
 export of similar products has compara- 
 tively and absolutely diminished. The 
 inability to export such products, more- 
 over, has practically limited the growth 
 
 
 r ■:';■ ■ ^m 
 
 i ■-••■. •■♦--is 
 
 \ .l'^■^.'.tW 
 
 i 
 
 ■7& 
 
 
20 
 
 The Creed of Free Trade. 
 
 of the Ro-callcil niannfaf'tiifiM<; industries 
 of tlii> country to tlic ilciiiiiiid for <loiiii>8- 
 tic ('i)nsuiiiiition, .'iiul furliiildeii any en- 
 largement of them eonnequent upon the 
 increasing ai)ilily and <lesire of other 
 nations to consume, anil tlie increased 
 facilities for efl'eelinj; international e.\- 
 (diani^es. As a furtiier Icjiitimate se- 
 quence, the commercial marine of the 
 United Stales lias lieen ail hut annihi- 
 lated, as is shown by the fact that while 
 in lH(iO seventy -one per cent, of the 
 total foreiirn trade of the United States 
 was carried in American bottoms, in 
 187.1 the proportion was less than thirty 
 percent. One of the most striking; il- 
 lusl rat ions that could jxissibly be pre- 
 sented of the evil effect of commercial 
 restrictions in limit iu',' trade and indus- 
 try, and consequently national develop- 
 ment, is to be found in the history of 
 the commercial relations between the 
 United States and the IJritiijh North 
 American provinces. 'J'hiis, in 185'2-.'),'?, 
 in the absence of anything like connner- 
 cial freedom, the a}f|j;i'ejj;ate e.xchanjfes 
 between the two countries amounted to 
 only $20,01)1,000. The subsequent year 
 a treaty of reciprocity went into oiTect, 
 whereby the ])co])le of the two countries 
 were enabled to trade and e.\chau<i;e 
 their products with little or no obstruc- 
 tion in the form of import duties. The 
 result was that the a<iifri''rate of e.x- 
 changes ro.se the very first year of the 
 operation of the treaty from $20,691,000 
 to $33,494,000, wliich subsequently in- 
 creased, year by year, until it reached 
 the figure of $55,000,000 in 18C2-63, 
 and $84,000,000 in 1805-00. In this 
 latter year the treaty of reciprocity was 
 repealed, and restrictive duties again 
 became operative. The result was that 
 the annual aggregate of exchanges im- 
 mediately fell to $57,000,000, and in 
 1873, seven full years after the expira- 
 tion of the treaty, when both nations 
 had largely increased in wealth and 
 pojjulation, the decrease of trade con- 
 sequent on the abrogation of the treaty 
 had not been made good. Again, in 
 1873 the freight — meaning thereby com- 
 modities — transported on the railroads 
 of the United States was probably in 
 
 excess of 200,000,000 tons. Tf wo as- 
 sume each ton to be worth, on the aver- 
 age, but lil'ty dollars, the vidiie of the 
 excdianges etfeeted through the agency 
 of the railroads of the United Slates in 
 1873 was in excess of $10,000,000,00'); 
 or, in other words, the ])opulation of 
 the country being 40,000,000, every 
 4,000,000 of the people exchanged <oiii- 
 modilies among tluunselves, through the 
 agency of railroa<ls, to the extent of 
 $1,000,000,000. It is true that much 
 of this freight was transported back- 
 ward and forward in dilferent forms 
 over the same routes, and did not all 
 re]>resent a direct movement between 
 the producers and consumers; but it is 
 safe to assume that not a ton was trans- 
 ported a single mile except for tin; real 
 or supposeil advantage of the owner. 
 Now, on the North American continent 
 there are about 4,000,000 of peo])l(' 
 inhabiting the Ih'itish provinces, and 
 40,000,000 inhabiting the territory of 
 the United States. The line which sep- 
 arates them is an imaginary or geo- 
 graphical one, anil not a ])hysical one, 
 and were it not for conuuercial restric- 
 tions arbitrarily inq)osed by the legisla- 
 tors of the two countries, men and com- 
 modities could pass as freely as they 
 now do between ditTercnt sections of 
 the provinces or different States of tlie 
 American Union; and yet these same 
 restrictions were sufficient in 1873 to 
 reduce the aggregate value of the com- 
 mercial exchanges between the 4,000,000 
 of people in Canada and the 40,000,000 
 of people in the United States, through 
 every variety of instrumentality, to the 
 sum of $82,000,000; while, as befon^ 
 shown, every 4,000,000 of people on the 
 United States side of the line, under 
 the condition of perfect internal free 
 trade, ett'ected exchanges between them- 
 selves through the agency of railroads 
 alone, to the extent of $1,000,000,000, 
 Suppose, now, these barriers to trade 
 between the United States .and Canada 
 had been taken down. How many 
 wheels, si)indles, hammers, cars, boats, 
 engines, and strong human arms woulil 
 in consecjuence have been put in mo- 
 tion y and how much of the present in- 
 
The Creed of Free Trade. 
 
 21 
 
 (luRtrial and ronimorciiil doprcssion in 
 th(! United States woiiM have been o1)- 
 viafl'd? 
 
 It in also curious to note concerning the 
 pcopii! of the United States, tliat so well 
 satii^fied are they of tlic principles of free 
 trade when applied to donu^stiu transac- 
 tions, that tlniy will not allow the crea- 
 tion orinaiiitenancc tliroii;;hoiit the wliole 
 of the hroad territory they inhaliitof the 
 slijrhtestartilicial ohstruclion to the freest 
 exclianj^c of products or to the freest 
 coniinercial or personal movement; and 
 this, too, notwilhstandin^L; that the dilTer- 
 ent States and Ten-itories into wliich the 
 country is divided differ amoni^ tlieni- 
 selves in resptn-tto way;esof lahor, prices 
 of commodities, climate, soil, and other 
 natural conditions, as widely iis the 
 United States as a whole dilTers from any 
 otlier foreign country with which it is 
 engaged in extensive commen-ial inter- 
 course. And yet we liave tlie striking 
 ami anomalous circumstance that a very 
 l;ir;^e number — perhaps a majority — of 
 the American people regard trade with 
 
 foreign nations as sonietliing very differ- 
 ent from trade among themselves, whicli 
 stiould, therefore, be sul>j(M'l(-d to t'Utire- 
 ly dilYerent laws and conditions. Hut a 
 slight exaiidnation ought, it would seem, 
 to j)rove that foreign trade presents no 
 element |)e<'idiar to it>elf, but only the 
 same elements whi<di dcuneslie trade pre- 
 sents, and that, conseipiently, the same 
 laws and conditions that are applicable 
 to domestic excdianges art^ etpially appli- 
 eal)le to foreign exchanges. Men, more- 
 over, do not engage in any trade, for- 
 eign or (h)mestic, for liiere enjoyment or 
 pleasure, but for the material gain wliicli 
 accrues to l)Oth parties. They desist 
 from it also as soon as the mutual ad- 
 vantage ceases. The relation, then, 
 which government ouglit to sustain to 
 the whole (piestion of exchanges is well 
 expresse<l in tlie answer winch the mer- 
 chants of France gave to Colbert niorti 
 than a century and a half ago, wlien he 
 asked their advice and opinion " liow lie 
 coidd best jjromote commerce: " " Lnk- 
 scz nous /aire " (" Let us alone "). 
 
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