LETTERS
THE PRESIDENT,
FOREIGN AND DOMESTIC POLICY
THE UNION,
ITS EFFECTS,
AS EXHIBITED IN THE
CONDITION OF THE PEOPLE AND THE STATE.
BY
H. C. CAREY.
PHILADELPHIA:
J. B. LIPPINCOTT & GO.
LONDON: TRUBNER & CO.
PARIS: GUILLAUMIN & CO.
1858.
.
F
CONTENTS.
PAGE
LETTER I. Historical sketch of the Union, from the peace of 1783, to
the present time 3
II. Of banking, in the Union, for the half century which fol-
lowed the peace of 1783 8
III. Of banking, in the last five-and-twenty years 13
IV. Phenomena offered for consideration, by the Union, at the
present time , 18
V. Evidences of material, moral, and political deterioration.. 24
VI. Phenomena of advancing and declining civilization 81
VII. Growing dependence of the American farmer on the dis-
tant market its effects 35
VIII. Growing dependence of the planter 40
IX. Decline in the power of the products of the earth, to com-
mand finished commodities in exchange 45
X. Waste of power, throughout the Union, and consequent
exhaustion of the soil 50
XI. Decline in the power to maintain commerce 67
XII. The sort of free trade that is really required 63
XIII. Policy of the Federal government in reference to the cur-
rency 69
XIV. The precious metals the great instruments of association, 74
XV. Those metals go from the countries that have little com-
merce, to those, in which employments are diversi-
fied, and in which commerce is great 79
iv CONTENTS.
LETTER XVI. Influence of banks, and bank notes, on the supply of
the precious metals 87
XVII. How the policy of the Union affects the shipping in-
terest 94
XVIII. Increasing difficulty of obtaining efficient means of
transportation 99
XIX. Increasing charge for the use of money 105
XX. Causes of the growing difficulty of accumulation 113
XXI. Why it is, that protection is required 120
XXII. Of the British system, and its effects upon the planters
and farmers of the world 126
XXIII. Of the policy of France, and its effects, at home and
abroad 131
XXIV. Commerce grows by aid of the French system, and de-
clines under the British one 189
XXV. Power to maintain commerce with foreign nations grows
with the growth of domestic commerce 144
XXVI. Harmony of all real and permanent international in-
terests 148
XXVII. Decline, throughout the Union, in the power to main-
tain the local institutions 153
XXVIII. Declining power to contribute to the revenue of the
State 159
XXIX. Conclusion .. 166
L E T T E ES
TO THE
PEESIDENT OF THE UNITED STATES.
LETTER FIRST.
SIR : In common with a large portion of our fellow-citizens,
I have looked with much anxiety for the appearance of your
Message hoping for some suggestions tending towards the
relief of the community, from the accumulated evils under which it
now so severely suffers. In this, however, I have been disappointed,
having found therein, only the assurance, that, while the govern-
ment "cannot fail deeply to sympathize" with the people in their
distresses, it is wholly "without the power to extend relief"
the cause of difficulty being to be found in the vicious action of the
local institutions, which are beyond the reach of any action
of the central government. For more than forty years, as we are
here assured, the history of the country has been one of ' ' extra-
vagant expansions in the business of the country, followed by
ruinous contractions. At successive intervals," as you continue to
say, " the best and most enterprising men have been tempted to
their ruin by excessive bank loans of mere paper credit, exciting
them to extravagant importations of foreign goods, wild specula-
tions, and ruinous and demoralizing stock-gambling. When the
crisis arrives, as arrive it must, the banks can extend no relief to
the people. In a vain struggle to redeem their liabilities in
specie, they are compelled to contract their loans and their issues ;
and, at last, in the hour of distress, when their assistance is most
needed, they and their debtors together sink into insolvency."
For all these difficulties, we are, as you have here informed
your constituents, indebted to the excess of power in the States.
" The framers of the Constitution," in your opinion, having given
(3)
4 LETTERS TO THE
" to Congress the power ' to coin money and to regulate the value
thereof,' and prohibited the States from coining money, emitting
bills of credit, or making anything but gold and silver coin a
tender in payment of debts, supposed they had protected the
people against the evils of an excessive and irredeemable paper
currency. They are not," in your opinion, to be held "responsible
for the existing anomaly, that a government endowed with the
sovereign attribute of coining money and regulating the value
thereof, should have no power to prevent others from driving this
coin out of the country, and filling up the channels of circulation
with paper which does not represent gold and silver."
The Constitution having, in this respect, as you suppose, proved
a total failure, the remedy is, as you seem to think, to be found
in increasing the power of the Federal government, at the expense
of those of the States. Admitting the facts to be precisely as you
appear to think them, you are certainly right, and the sooner we
make the change, the better will it be, not only for ourselves,
but for the world at large so frequently disturbed by re-
vulsions consequent, as it would seem, upon the existence of our
Federal system. Before, however, deciding, that the fault does
really lie with the States and, still more, before deciding to
make a change in that direction, it would, as it seems to me, be
well, calmly to review the past giving the facts in the precise
order of their occurrence, and thus enabling our fellow-citizens to
determine for themselves, whether the difficulties you have so well
described, have had their origin in the excess of central, or of
local, action. Such an examination might prove, that the cause
of those revulsions lay with the central government; and, if so,
then, any motion in the direction you have indicated, would but
augment the evils under which we suffer. Firmly believing that
such would be its result, I am induced to address to you this
letter doing so, in the full confidence, that you would much
rejoice in having it demonstrated, that, the cause of error not
being found in the local action, we might safely permit the
Constitution to remain untouched leaving the local authorities
to continue in the exercise of all the powers not expressly parted
with, when the sovereign States united in the formation of our
present Union. It being the tendency of power to steal from the
hands of the many to those of the few, "liberty," as has so well
been said by one of your illustrious predecessors, " can be main-
tained, only at the price of eternal vigilance ; " and if, by reason
of failure in its exercise, we should, under your guidance,, make
any step in a direction adverse to freedom, it would to you, I am
well assured, be cause of great and permanent regret. Without
apology, therefore, it is, that I ask your attention to the following
brief summary of our history, in the past half century.
From 1807 to 1815, we were, in a great degree, driven from
the ocean, and forced to look homeward for our commerce
PRESIDENT OF THE UNITED STATES. 5
non-intercourse laws having followed closely on the heels of an
embargo, and that, in its turn, having been succeeded by a war
with England. Manufactures had, of course, grown rapidly
making a market at home for all the products of the earth,
and enabling the consumers and the producers to take their places
by each other's side. As a consequence of this it was, that after the
close of the war, there existed, throughout the country, a degree
of prosperity such as had never before been known. Farmers
and planters were rich, for the prices they obtained were great.
Mechanics were prosperous their services being everywhere in
demand. The revenue was large, for the people could afford to
pay for the products of foreign lands. The government was
strong, for it was rapidly diminishing the public debt.
Less than two years later, however, the whole was changed
the duties on imports having then been much reduced, and ad
valorem duties, to a considerable extent, substituted for those-
which had been specific. The consequences of this speedily exhi-
bited themselves, in the extensive closing of manufacturing esta-
blishments in the creation and failure of numerous banks in
the decline in price, of all the products of the farm and the planta-
tion, and the ruin of farmers and planters in the diminished
demand for labor in the growth of pauperism in the export
of specie and in a growing public debt. Free trade had found
the country, in 1816, in a state of high prosperity, but it left it
almost ruined. x
With the year 1824, there came a partial change, followed, in
1828, by a more extensive one the central government then
changing its policy from a free trade to a protective one. Here,
again, the effects were speedily seen, in the revival of manufac-
tures in the demand for the products of the earth in the
import of specie in an increase of the public revenue, so great
as to require the emancipation of tea, coffee, and other com-
modities, from all contribution to the public revenue in the final
extinction of the public debt in a general prosperity, public and
private and in a feeling, throughout the community, of strength
and power, far exceeding even that which followed the return of
peace, in 1815. That prosperity, however, was a quiet and
tranquil one there having been but little speculation, and,
therefore, little tendency towards the creation of unnecessary
banks. The few that had been created, had found their places in
the Eastern States. The total number in 1830, was but 321,
against 307 that had existed ten years previously ; and the increase
in the amount of capital, was but $3,000,000 the $107,000,000
of 1820, being represented in 1830, by $110,000,000.
Again, however, in 1834, the system of the central government
was changed provision having been made in 1833 for the gradual
passage fron^a protective to a merely revenue tariff, the last stage
of which was to be reached in 1842. Numerous banks were now
6 LETTERS TO THE
again created ; enormous foreign debts were incurred ; and the
result was seen, in the insolvency of the banks the ruin of the
merchants the prostration of the farmers and planters the
drain of specie the repudiation of States and the bankruptcy
of the treasury the government itself being reduced to the use
of inconvertible paper money, as the only means by which the
machine of state could be kept in motion.
Once again, in 1842, the system of the central government wns
changed a highly protective tariff having been substituted for
the revenue one of 1841-2. Few, if any, banks were now created ;
foreign debts were now paid off; banks now resumed payment;
merchants became, once again, prosperous ; specie flowed in ; States
became again able to collect their taxes, and thereby redeem them-
selves from the disgrace of repudiation ; and the revenue increased
rapidly, while the peaceful policy of the country greatly facilitated
1 reduction in the sums demanded from the treasury. Peaceful and
quiet prosperity was the characteristic of this period there
having been no speculative movement whatsoever, and, therefore,
no inducement for any extension of the number of institutions em-
ployed in money operations. At no period in the history of any
country, had there existed so high a degree of confidence in the
future, as was found here existing, in the year which preceded the
enactment of the revenue act of August, 1846.
By that act, the system of. the central government wns once
more changed protection having been abandoned, and the tariff
having been adjusted with reference to revenue alone. It has
now been in existence eleven years years characterized by an
amount of instability and uncertainty in all commercial affairs,
almost equal to that which existed in the period which embraced
the embargo and non-intercourse acts, and the war which fol-
lowed. Banks innumerable have been created. Prices have
risen and fallen repeatedly the changes having been great,
almost beyond all previous precedent. Flour and cotton have,
at times, been lower in price than had ever before been known ;
while, at others, they have exhibited a tendency towards rising to
the point at which they had stood at the passage of the free trade
act of 1816. The result is seen irt the fact, that the manufacturers
and the merchants are ruined that the number of persons unem-
ployed is great, beyond all former precedent that the prices of
all our staples are falling with great rapidity that our ships are
unemployed that our banks have again been driven to suspen-
sion that the revenue has failed and that, notwithstanding the
receipt of hundreds of millions of Californian gold, the government
is reduced again to the necessity of using an inconvertible paper
money, as the only means of keeping itself afloat.
In a state of barbarism, theories abound, and they do so, because,
in default of knowledge, almost every occurrence is regarded as
accidental, or is attributed to the direct interposition of some
PRESIDENT OF THE UNITED STATES. 7
imaginary being, good or evil, as the chance may be. With time,
however the regular succession of cause and effect coming
to be understood men, by degrees, arrive at the knowledge
of the existence of laws, by which the movements of both men
and matter are governed. What, then, is the law, that may be
deduced from the above brief history ? In reply, it may be said,
that in every case in which the central government has moved in
one direction, few banks have been created speculation has
been trivial specie has flowed in the credit of the banks has
been maintained manufacturers, merchants, farmers, and planters,
have been prosperous States have paid their interest the
revenue has been abundant, and the public debt has been dimin-
ished leaving, to the succeeding policy, a people in a state of
high prosperity a community 'growing in power, and in the
respect with which they have been regarded and a government
becoming, from day to day, more independent in its action.
On the other hand, we see that in every case in which it has
moved in an opposite direction, the reverse effects have been pro-
duced many banks having been created speculation having
been carried to the pitch, almost, of frenzy specie having flowed
out the monetary institutions of the country having been, on
both the last occasions, driven to suspension manufacturers and
merchants, farmers and planters, having been ruined stay-laws
having been enacted States having repudiated their debts
revenue having declined until it has almost ceased, and the
public debt having increased leaving to the succeeding policy, a
people in a state of ruin, a community declining in power and in
the respect of the world, and a treasury almost bankrupt.
Such being the facts presented for consideration, on a survey
of the policy of the country, for the long period of fifty years, the
law to be deduced therefrom, would seem to be as follows :
Under the system which looks to bringing together the producer
and the consumer, the community increases in strength, wealth,
and power; whereas, under that, which looks to separating the
consumer and producer, and is known as "free trade, 1 ' it
declines in all becoming daily poorer, weaker, and more
dependent.
That being the law, it would seem to follow that the cause of
ruin is to be found in the central government ; and that it is to a
modification of its action, and not to that of the local govern-
ments, we should look for remedies for existing evils. That such
is certainly the case, I propose to offer further evidence in another
letter remaining meanwhile, with great respect,
Your obed't servant,
HENRY C. CAREY.
Philadelphia, December 21st, 185T.
LETTERS TO THE
LETTER SECOND.
To insure to the people a sound circulation, appears to you,
Mr. President, to be "one of the highest and most responsible dutifes
of government" the one, too, requiring "the utmost possible
wisdom and skill," so to adapt it to "the wants of internal trade
and foreign exchanges," as to prevent fluctuations in the value
of property, such as the American historian is so frequently called
upon to record. "Unfortunately," however, in your estimation,
"under the construction of the Federal Constitution, which has
now prevailed too long to be changed, this important and deli-
cate duty has been dissevered from the coining power, and virtually
transferred to more than fourteen hundred State banks, acting
independently of each other, and regulating their paper issues
almost exclusively by a regard to the present interest of their
stockholders."
Such being the unhappy results of our Federal system, the
central government cannot, as yon say, "do much to provide
against a recurrence of existing evils." Utterly powerless itself
for good, while surrounded by local governments all-powerful for
evil, all that it can do, is, to " rely upon the patriotism and wis-
dom of the States for the prevention and redress of the evil. If
they," as you continue, "will afford us a real specie basis for our
paper circulation by increasing the denomination of bank notes,
first to twenty, and afterward to fifty dollars ; if they will require
that the banks shall, at all times, keep on hand at least one dollar
in gold and silver for every three dollars of their circulation and
deposits ; and if they will provide by a self-executing enactment,
which nothing can arrest, that the moment they suspend they
shall go into liquidation, I believe that such provisions, with a
weekly publication by each bank of a statement of its condition,
would go far to secure us against future suspensions of specie
payments."
That efforts will be made to do these things is highly probable,
but to what purpose ? None, whatsoever ! The records of our
State legislatures, for the last twenty years, present to view a host
of laws, having for their object the production of a state of things
such as you here desire ; and yet, on the first occasion, they are
set aside, and as unhesitatingly, by the same legislative bodies,
as has been the famous provision in the Charter Act of the Bank of
England. Why is this ? Because the regulation of the currency,
on this side of the Atlantic, has been in the hands of men, as
little capable of executing that "highest and most responsible of
the duties of government," as Messrs. Overton and Peel are proved
to have been on the other. The provision of the English law being
PRESIDENT OF THE UNITED STATES. 9
like those in our own charters based upon a fallacy, has now been
twice suspended ; and suspended it must again be, whenever the
time shall arrive, that its services will again be needed. So is it,
and so must it continue to be, with all similar provisions in the
charters of this country as long as the action of the central
government shall continue to be hostile to the establishment of a
perfect currency ; for there, and not with the local institutions,
lies the difficulty, as you may rest assured.
Let it be supposed, however, that the States continue to pursue
their own course doing, in the future, precisely as they have done
in the past creating banks ad libitum, and not providing,
effectively, for carrying out the plan that is here suggested. That
they will not so provide, seems very evident. More than twenty
years since, one of your predecessors denounced banks and bank
notes, in terms as strong as those now used by you ; and since that
time, their denunciation has constituted an essential portion of the
creed of the great democratic party that party of which you,
sir, are the representative ; but, with no other effect, as yet, than
that of more than quadrupling the number of banking institutions
the 328 banks of 1830 being now represented by more than
1400. This being progress backward, with what reason can we
look for such a change in the modes of thought, as would produce
a movement in the direction you desire ? As I think, with
none. If then, the facts be as you hold them to be if the
difficulty does really rest with the local governments and if our
only chance of remedy is to be sought in State discretion then
are we truly helpless ; and then is our Federal system a total
failure. Fortunately, such is not the case. Fortunately, the
difficulty does not lie with the States, as you, I am sure, will
gladly be convinced, after reading the brief sketch of our banking
history, that will now be made.
American banking had its origin in New England the good
sense of its people having early taught them the advantages that
must result, from having places at which those who had money to
lend, could readily meet those who desired to borrow both par-
ties being thus relieved of all necessity for the employment of
middlemen, in the arrangement of their exchanges. From the close
of the war, in 1783, to 1811, the average number of banks in
existence, throughout the New England States, was 16; while
the number of failures in all that period embracing, as it did,
the years in which, under French decrees, and British Orders in
Council, the seas were swept of American ships was only four.
Taking now a longer period, the half century from 1785 to
1835 embracing not alone the times of piracy on the ocean, above
referred to of embargoes and non-intercourse laws but, also,
those of the war of 1812 of the disturbed period that followed
close upon the peace and of the celebrated crisis of 1825 we
find the number of banking institutions to have averaged no less
10 LETTERS TO THE
than sixty; while the total number of failures, in the whole half
century, was only twenty, or two in every five years, of a period
of greater commercial disturbance than had ever before been
known. Of these failures, five took place in Massachusetts; but
by these the public suffered little, if any, loss. One paid all its
debts. A second, it is believed, did the same. Of the third, the
bills outstanding, at the date of its stoppage, were but $21,000.
The remaining two certainly paid every outstanding claim, except
$19,878 ; and it is not now certain, that even that small sum was
not subsequently paid. Admitting, however, that it remained
unpaid, the total loss to the people of Massachusetts, in a period
of fifty years, from dealing with banks, was less than $1000 per an-
num, and not more than one dollar in every million, or the
ten -thousandth part of one per cent. of the transactions whose
performance had been facilitated by the existence of such institu-
tions, and by the substitution of bank notes for a metallic cur-
rency. Small, even, as is that proportion, it might, as I think,
be much reduced it being based upon the idea, that the opera-
tions facilitated were but forty times the amount of the capital ;
whereas, it might be almost safe to place them at four hundred
times that amount in which case, the proportion of loss sus-
tained, would be only the hundred-thousandth part of one per cent.
I pray you now, Mr. President, to reflect upon the quantity of
service rendered by banks, in collecting, guarding, and transfer-
ring property all of this work being done, without charge of any
kind ; and to determine for yourself if, in any other case, so large
an amount of service is rendered at so small a cost. The broker
charges an eighth, or a quarter per cent., when he arranges a
transfer of stocks. The wholesale dealer charges 2^, or 5 per
cent. The retailer takes 10, 15, or 20 per cent. ; but the bank
performs an amount of service whose sum is equal to the total
amount of the exchanges of society, in which money is used
charging nothing whatsoever. Sometimes, a banking institution,
badly managed, falls into difficulty. So, however, is it with
brokers and commission merchants. In the case of these latter,
however, the loss is generally almost total ; whereas, in that of
the banks, the loss falls almost exclusively upon those who had
done the work the stockholders.
Seeing the facts to be as I state, I would frsk you, Mr. Presi-
dent, to say, if you had been a resident of Massachusetts and
what is said of that State is almost equally true of all New Eng-
land, in the period above referred to would you have been
pleased, whenever you had a large amount of money to receive,
to .find yourself compelled to carry your silver on your back, or in
a wheelbarrow ; or to pay a commission to have it converted into
gold, in order that you might be enabled to transfer it from place
to place ; and to do all this, too, because it had been determined
that it was the duty of "the government" to furnish a currency
PRESIDENT OF THE UNITED STATES. 11
that that doty required great " wisdom and skill" by the appli-
cation of which, it had arrived at the conclusion, that shopping
with bags full of dollars was far more convenient and agreeable
than the performance of the same operation, with the aid of
pocket-books filled with pieces of paper, by means of which this
property in money could be transferred without the necessity for
hauling the silver, or the gold ? That you would have preferred
the notes, I feel assured.
In New York, the banks, in the thirty years prior to 1837, had
averaged 26 in number ; and the total number of failures had
been 16 ; or about one-half of one per cent., per annum. The
losses, however, fell so almost exclusively upon the stockholders,
that if we here estimate the risk of loss to the community, by
reason of dealing with banks, or of using bank notes, at a single
dollar in a million, it is much beyond the truth.
In Pennsylvania, the average number of banks in existence, in
the same period, had been 29, and the total number of failures
had been 19 nearly all of them, in the calamitous period that
followed the adoption, by the central government, of the free
trade policy of 1816-18. Being an agricultural state, Pennsyl-
vania suffered heavily from the great depression in the prices of
all her products, when she lost the domestic market that had been
supplied by mines and furnaces at home, and factories and fur-
naces in other States. From 1820 to 1837, there were but three
failures, all of them trivial in amount. In that period, all the
loss to the people of the State, from trading with banks, or
from the use of bank notes, was not even a single dollar in a
million that having been all the price they had paid, for the
vast amount of services performed by their banking institutions.
Passing thence south and west, we find, at every stage, a
diminishing density of population, attended with increase of risk.
South of Pennsylvania and of the Ohio river, there were, in the
period ending in 1836, no less than 84 failures, while, west of
that State, the number was 27. Nearly the whole of them had
resulted, as had those of Pennsylvania herself, from the premature
attempt to establish shops for the purchase and sale of money, in
regions where all desired to buy, and none had that commodity
to sell. The consequences were such as might well have been
anticipated. After fruitless attempts to establish themselves in
business, they stopped payment doing thus, as would be done
by an individual who had engaged in a pursuit for which the
community was not prepared.
North and east of the Ohio river, the total number of failures,
from the first institution of a bank, to the year 1836, was precisely
b'5 ; or, less than one-half of the failures of private bankers,
in England, in the years 1821-26 a period in which there was
no extraordinary occurrence no change from war to peace, or
12 LETTERS TO THE
from peace to war to produce a feeling of insecurity, or to be
the cause of loss.
Including all the States, north, south, east and west, the num-
ber of failures, from the date of the first bank, had been, in 1836,
less by one-fourth than those of England, in the three years,
1814-16; and the amount of loss sustained by the American
public in a century, had not, as I. believe, been one-twentieth
as great, as that of the people of England, in three short
years.
Since 1836, there has been a change, the causes of which will
be shown in another letter.
Yours, very respectfully,
HENRY C. CAREY.
Philadelphia, December 23d, 1857.
PRESIDENT OF THE UNITED STATES. 13
LETTER THIRD.
HAVING small respect for authority, General Jackson attached
little value to the labors of Hamilton and Madison, commentators
on the Constitution ; or to those of Jay, Ellsworth, and Marshall
the men, Mr. President, to whom we owe those early decisions,
which laid the foundation of our constitutional law decisions
fully acquiesced in, by all the distinguished men who had pre-
ceded him in the Presidential chair, from Washington to the
younger Adams. Preferring his own construction of that instru-
ment, he was little more than seated in the high position to which
he had been called, than he commenced suggesting doubts, as to the
power of the government to delegate to individuals, the power to
exercise, throughout the Union, the banking privilege. In his
view, a State bank, based upon the public revenues, and managed
of course, by officers of the general government, would have been
greatly to be preferred.
Centralization being now the order of the day, and Congress
failing to obey his orders, we find him next, on his own motion,
withdrawing the public moneys from where they had been placed
by Congress and, at his sovereign will and pleasure, dividing
them among the local institutions. Next, he is found, urging the
States to the creation of local banks, to replace the great institu-
tion with which he was now at war. That done, we see him
next, declaring war against all banks and notes the whole
power of the central authorities being now exerted, for the coer-
cion of the States into the prohibition of bills of the smaller
denominations. Gold being now regarded as the one thing need-
ful, it was, as we were told, to be made to "run up the Missis-
sippi ;" and, that it might do so, the standard was changed the ex-
changeable value of gold, as compared with silver, having been raised
to 16 to 1. Following on this, we have an order to the receivers
of the revenue, to accept of nothing but the precious metals
notes of all denominations being thus discredited, that the people
might be induced to make a run upon the banks. Now, for the
first time in the history of the world, do we find a regularly organ-
ized government engaged in a war to the knife against credit, in
all its forms ; and now, for the first time in a period of peace,
were the banks of the Union compelled to close their doors,
against those who desired payment of their notes. Next, we
find the Treasury demanding additional powers, and gently inti-
mating that by aid of the public revenues, the domestic exchanges
might be much facilitated. On one side, the Postmaster-General
desires that his agents may be employed in the transmission of
private funds ; while, on another, the attention of Congress is spe-
14 LETTERS TO THE
oially invited to the advantage that would result from the insti-
tution of a government office, charged with the issue of paper
money thereby superseding the local institutions altogether.
The war thus commenced, has since been followed up the use
of circulating paper having been repudiated by the government
vaults having been constructed, in which to store the public trea-
sures and the standing topic of denunciation, at conventions of
towns and cities, counties and States, and of the Union itself,
having been banks and paper money. The result is seen, in the
fact, that gold has ceased to circulate, and that the treasury is
driven to the use of inconvertible notes.
Such is the history of banking in the United States, since the
peace of 1783 a period of seventy-five years, during the first
fifty of which, the power reserved by the States had been respected
and that, too, most scrupulously by Washington, Adams, Jef-
ferson, Madison, Monroe, and the younger Adams; whereas,
since that time, there has been an unceasing effort to weaken the
States, while strengthening the central power. How far the one,
or the other, of the systems thus described, has tended to increase
the security of persons and of property, by giving to the people
that which you, Mr. President, so much desire, "a sound circu-
lating medium," the amount of which "has been adapted with
the utmost wisdom and skill " to the needs of commerce thereby
insuring that "the market value of every man's property" shall
not, by reason of its fluctuation, "be increased or diminished"
and thus preventing " the incalculable evil" that might otherwise
be produced is shown in the following brief resumd of the above
short history.
For nearly half a century during which, banks, and their circu-
lation, had been left, in accordance with the Constitution, under
the control of the local legislatures, their number was so pru-
dently increased, that, at its close, it was only 328. In half that
time, during which the central government has undertaken to su-
persede the State authorities, it has grown to more than 1400.
For half a century, during which the State authorities remained
undisturbed, neither the people nor the government ever failed,
in time of peace, to be supplied with coin for circulation. In
half that time, under the direction of the central government, both
government and people have twice been driven to the use of an
irredeemable paper circulation.
For half a century, the State authorities so managed the bank-
ing system, that no general suspension ever occurred, except
when at the instance of the general government, and after
having largely aided that government, in the then existing war
against Great Britain they stopped in the autumn of 1814, and
remained suspended, until the return of peace enabled them once
again to resume their operations. In half that time, since the
central government has assumed to supersede the local ones,
PRESIDENT OF THE UNITED STATES. 15
there have been two suspensions that have been general ; and a
third, in which were embraced, all the States that had followed
the lead of the central power, in prohibiting the use of the smaller
notes the only States that did not then suspend, having been
those which had persisted in the determination to regulate their
currency for themselves. Once again, the suspension has ceased
to be general ; and I would now, Mr. President, ask your particular
attention to the fact, that all the States, with, I believe, but one
exception, that use small notes, have now resumed, while all of
those, with one exception, that have prohibited the smaller notes,
remain suspended.
Such, Mr. President, are the facts, and being such, they fur-
nish, as I think, a reply that is most conclusive to the argument
you have just presented, in favor of an extension of the central
power. All of them having passed before your own eyes, all of
them have been known to yon, but, by reason of the unceasing
demands upon your time, in the various honorable offices you have
been called to fill, many of them had, doubtless, escaped your
recollection. Had it been otherwise, you certainly would have
hesitated, before recommending any enlargement of a central
power, whose injurious influences had been so fully demonstrated.
While recognizing the authority of the States, as being beyond
the reach of any direct assault, you suggest a mode, by means of
which, power may now be centralized in the hands of Federal
agents ; and yet, the mere fact of the necessity for resorting to
means so indirect, would seem to me to furnish proof conclusive
of your error. It is within the power of Congress to establish
" uniform laws on the subject of bankruptcies throughout the
United States;" but, it being not within it to enact any law,
that shall not be of general application to all the people of the
Union, the enactment of such an one as that you now suggest,
would certainly seem to be a direct violation of the Constitution.
How far it is within the power of Congress, to pass a law that
shall embrace both individuals and corporations, it is not for me
to say ; but, certain it is, that eminent jurists have held, and do
still hold, that the States did not, when accepting the Constitu-
tion, grant to Congress any control, whatsoever, over corporations
holding their existence under the local laws. That, however,
Mr. President, will be a question of small importance, if I shall
have succeeded in satisfying you, that all the monetary diffi-
culties we have experienced, and which you so well describe, have
had their origin in the attempt to withdraw from the States, the
power reserved to them by the Constitution in an excess of cen-
tralization, and not in any excess of localization.
We are told, however, that the quantity of gold now in the
country, amounts to no less than $260,000,000 ; and are, there-
fore, urged to force it into use. It may be so, that there is that
16 LETTERS TO THE
quantity ; but, if so, where is it ? A year since, the banks had
$50,000,000; and'they have no more now. A year since, the
sub-treasuries held $20,000,000; now, they have $6,000,000.
Adding together these two sums, we have $56,000,000 leaving
$204,000,000 yet to be accounted for. Where may they be found ?
lu use among the people they certainly are not, for the largest
calculation of gold and silver in use, cannot exceed one dollar
per head giving $30,000,000 as the quantity usefully employed,
and. leaving $174,000,000 yet to be discovered. Where must
they be sought ? If anywhere, they are hoarded. Why are they
hoarded ? Because the government sets the example of hoard-
ing the precious metals, and thus teaches the people what it is,
that they themselves should do. Because, for twenty years past,
the government, and its friends, have denounced banks as being
insecure, and bank notes as being worthless rags. Because, in
opposition to the practice of all really enlightened governments,
our own has been, for the last five and twenty years, engaged in
an almost unceasing war upon private credit. For these reasons
it is, that the precious metals are now so extensively hoarded, and
while so hoarded, as useful as an equal weight of pebble-stones
would be.
How can all this gold be brought into active circulation ? An
answer to this question, Mr. President, may be found in one of
those delightful fables, that you, in early life, must have often
read. The wind and the sun differed, one day, as to which could
most readily compel a traveller to lay aside his cloak. The wind
commenced blowing with all his might ; but the harder he blew,
the tighter the cloak was held. The sun next tried his hand
darting his warmest beams upon the traveller's head. Forthwith
the hold upon the cloak was loosened, and before the lapse of
many moments, it was thrown aside. Here, Mr. President, is a
great lesson, by the study of which the government might largely
profit. For more than twenty years, your predecessors have been
endeavoring to force the people to the use of gold seeking to
accomplish that object, by means of the annihilation of the credit
of banks and individuals ; but the effect, as yet, has been only
that of driving it out of circulation, and into private hoards, the
amount of which is, probably, immensely great. Having played
the part of the wind, and failed, let it now, Mr. President, under-
take that of the sun seeking to increase the confidence of the
people in one another; and the effect will speedily be seen, in the
re-appearance of the gold that is now so useless. Let this be
done let the treasury smile upon the people, instead of frowning
upon them let it make common cause with the producing classes,
and not with the merely consuming ones let it cease to make
war upon the powers of the States and you will have, in your
next message, the gratification of offering to your fellow-citizens
a picture directly the reverse of that which you have now presented.
PRESIDENT OF THE UNITED STATES. 17
Oar system finds its base in local, and not in central, action.
The tendency of almost all the acts of the Federal government,
for the last five and twenty years, having been towards the aug-
mentation of the central power at the expense of that which is
local, the injurious effects become more visible, from day to day
human progress, in whatsoever direction, being always one of con-
stant acceleration. That such is the case, is clearly shown in the
recommendations of the document now before me leading, as
they inevitably must, to the entire suppression of the power of
the States, in reference to that which you, yourself, regard as one
of the most important of governmental duties. A closer exami-
nation, and more careful study of the facts here given, would, as
I think, have satisfied you, that it is to the centralizing tendencies
of recent years, we owe the extraordinary demoralization to which
your attention will next be called, by
Yours, with great respect,
HENRY C. CAREY.
Philadelphia, December %5th, 185T.
18 LETTERS TO THE
LETTER FOURTH.
STEADINESS and regularity, Mr. President, are the character-
istics of advancing civilization. Instability and irregularity,
those of advancing barbarism. The first are found, as you have
seen, and in a degree that is quite remarkable, in the half century
during which the local authorities controlled our banking opera-
tions there having been, as has been shown, no instance of
general suspension, in that long period, except in 1814, and then,
at the instance of the central government ; whereas, in the five
and twenty years, in which the local authorities have been, to
so great an extent, superseded, the suspensions have been three
in number. Need we wonder, then, that " a state of crisis
may now," in the opinion of foreign journalists, be regarded
as "the normal condition of the great republic of the West?"
Assuredly not ! It is the natural result of a centralizing policy,
that at one time, urges upon the people the creation of banks, and
at another, denounces such institutions as wholly unworthy of
credit of a policy that, at one moment, squanders the public
property with a view to the extension of railroads, and at
another, urges the passage of a special bankrupt law, with a view
to secure to the central government, the exclusive control of both
banks and roads.
Instability tends to increase the wealth of the few who are rich
while impoverishing the many who look to the sale of labor
for the means of obtaining food for their wives, their children,
and themselves. It impoverishes the active and useful members
of society ; but it enables the idle and the useless to accumu-
late fortunes, at the expense of those who make roads, build mills,
and open mines, and thus increase the productive powers of labor-
ing men. Instability has been, since the central government
undertook the regulation of the currency, the essential character-
istic of our policy, and hence it is :
That, notwithstanding grants of land by millions, and tens of
millions, of acres, for the construction of railroads, and notwith-
standing an unceasing effort to promote the carrying interest, at
the expense of the producing one railroads and canals, that
have cost $1,000,000,000, have fallen to less than $400,000,000,
and their proprietors are ruined.
That, the factories of the country, too, are in a state of ruin.
For years, they have struggled against the tide, but now, the
tide has overwhelmed them reducing to a state of poverty,
thousands of the men to whose unceasing efforts, we have owed
the introduction and perfection of the most useful manufactures.
Hundreds of millions have been expended upon the creation of
PRESIDENT OF THE UNITED STATES. 19
magnificent works, whose value might now be counted by little
more than tens of millions.
That, the machine shops, too, are closed machines not being
required, when mills have ceased to work.
That, the mechanic is now, everywhere, turned adrift, to seek
in scratching the soil, the means of support that his trade will not
afford him he, and his country, thus losing the use of the
capital, of knowledge, he had obtained by means of a long
apprenticeship.
That his daughters, too, are deprived of work, and not unfre-
quently, forced to make their election between starvation on the
one hand, and prostitution on the other.
That, mines are closed, and miners are driven to seek employ-
ment as common laborers leaving their wives and children to
suffer for want of food.
That, hundreds of little capitalists, who had invested their all
in the creation of machinery, for facilitating increase in the supply
of fuel, are now in a state of ruin the sheriff selling out their
little properties, which are being purchased by the men who are
already rich.
That, furnaces capable of yielding hundreds of thousands of
tons of iron, are closed, and their proprietors ruined.
That, mines of ore, endless in quantity, and capable of supply-
ing lead, iron, and copper, to the world, mines, too, that have
required vast amounts of capital for their development are idle ;
while the men by whom they had been developed, are reduced to
poverty.
That, rolling mills, capable of supplying half the iron required
for the Union, are closed to the utter ruin of those who own them.
That, ships, wholly unemployed, are rapidly accumulating in
our ports, while the ships themselves as rapidly decline in value.
That, while the commerce of the world tends, everywhere, to
seek the aid of steam, and while steamers are fast superseding
sailing ships, the people of the Union find themselves obliged to
depend, almost exclusively, upon the ships of other nations ; and
are likely, before the close of your administration, Mr. President,
to find themselves without a single ocean steamer, engaged in any
trade, in which foreign competition is not, by law, prohibited.
That, the trade with California, upon which we have hereto-
fore relied for supplies of gold, has so far passed away, as to
require from us little more than supplies of butter, shoes, boots,
and agricultural machines that being all the commerce now
resulting, from an expenditure of labor and capital that, had they
been applied at home, would have yielded at least a thousand mil-
lions a year.
That railroads and ships, mills and factories, mines and fur-
naces, are, thus, involved in one common ruin the depreciation
in the value of all this property, being, at the smallest calculation,
$1,000,000,000.
20 LETTERS TO THE
That, the trading interest so long: the almost exclusive object
of governmental favor participates in the general ruin.
That, the owners of houses are unable to collect their rents ;
and that, their property declines in value, while the taxes are
increased.
That the farmer finds his consumers declining in number, while
his competitors are as rapidly increasing the system of the
country tending, as it long has tended, towards forcing into the
work of cultivation all who thus far have found, or should have
found, employment in mills, machine shops, mines, and furnaces ;
and that, he has now before him, should Providence favor him
with liberal crops, the prospect of seeing flour at a lower price
than has ever yet been known.
That the planter has before him a reduction in the home de-
mand for his commodity, to the extent of 250,000 bales; that,
almost simultaneously with this decreased demand, his crop is
likely to be four times as much increased : and that, therefore,
should he be favored in the seasons, he, too, is likely to see his
staple reduced to a price lower than he has ever seen.*
Taking the probable reduction in the value of land, and
in that of slaves, at only $1,000,000,000, and adding it to that
in railroads, mills, mines, and furnaces, we obtain the sum of
$2,000,000,000. Adding now, thereto, the reduction in the
value of real estate, other than farming and planting land, we
shall obtain a sum of not less than $2,500,000,000, as the total
amount reduced ; and it may be almost twice as much.
Somebody profits by all this loss. Who is it ? The mortgagee,
who enters upon possession first selling out his poor debtor,
whether the little farm'er of the West, or the great proprietor of
mills, mines, or furnaces in the East. The usurer, who obtains
one, two, three, or even five per cent, per month, until the poor
borrower is ruined. The government official, whose salaries and
perquisites have been already doubled, trebled, and quadrupled,
and will be now increased in value, while the working men around
him suffer, if even they do not perish, for want of food. The
member of Congress, whose salary has been doubled, because of
the rise in the price of food, and will so remain, now that its
price has fallen. The non-producers are thus enriched, while
the men of enterprise, and the laborers, are despoiled.
* In the four years which followed the bankruptcy of 1841, when specu-
lation had ceased, and when all were required to work, the cotton crop was
greater by a total of 2,000,000 bales, than in the four previous ones. Nine
years since, the crop had reached 2,800,000 bales; and now, with favorable
seasons, there exists no reason why it should not attain the quantity of
4,000,000 bales. The land is prepared for it, and the people are there to
work it. The crop must largely increase, and the European demand must
lessen, because, with the decline in the price of food, of which our policy will
be the cause, the ability of European farmers to purchase cloth must decline.
PRESIDENT OF THE UNITED STATES. 21
Turning now to the Treasury, we find it already bankrupt, even
at the commencement of this downward movement. Irredeemable
paper being now to be substituted for gold and silver, the influx
of foreign merchandise, and the efflux of the precious metals, will
be much promoted ; and thus will the way be smoothed, towards
total bankruptcy, such as was witnessed in 1841 and 1842.
Such, Mr. President, being the material condition, present and
prospective, of your fellow-citizens, we may now, for a moment,
turn to their moral one.
Commencing with the central government and its capital, we
find an amount of official corruption not exceeded in the world,
outside of the Turkish Empire the affairs of the Union, for
the past few years, having been administered with a single eye to
the profit of official persons and their friends, and not with refe-
rence to the interests of the people. Passing thence, to town,
city, and county administrations, we find a continually growing
power, on the part of the central government, to control and
direct their elections, with correspondent growth of fraud and
peculation.
Turning now to the commercial capital, I find its situation
thus described in a journal of the day ; and unfavorable as is the
description, none, as I think, can deny its truth :
" There is no town in Christendom where, in proportion to the
population, an equal amount of crime is annually committed. We
do not go much beyond the letter of the fact, when we say that
murder is a thing here of daily occurrence. Yillanous and das-
tardly outrages are nightly perpetrated in the streets, and some-
times in the open light of day. The city is the head-quarters of
the rogues, thieves and pickpockets that are scattered throughout
the country, and is the main theatre of their operations. Nowhere
else in this country does vice plant itself so openly, and with such
impunity. Nowhere is so much countenance given to rowdy
gangs, that keep quiet people in terror. Nowhere have things
gone on from bad to worse so rapidly, until it is at length appa-
rent that unless some speedy change comes over the police
management in New York, and the administration of the criminal
courts, a state of anarchy will ensue, or honest citizens will be
driven to organize, and take the law in their own hands."
Passing outward from New York, we find a rapid growth of
rowdyism and intemperance, with corresponding decline in the
security of person and of property frauds, peculations, seduc-
tions, murders, and crimes of every kind, increasing with such
rapidity, as fairly to warrant the assertion in a recent Southern
journal, that "the United States are fast becoming a very stench
in the nostrils of mankind. ' ' *
* It is useless to wink at the fact. Villany, in every shape, is celebrating
its horrid gala-day throughout the United States. Details of murders in our
22 LETTERS TO THE
Such, Mr. President is the material and moral condition of the
people, to the administration of whose affairs you have recently
been called. Desiring to find its parallel, you will be led, most
naturally, to look to the closing years of the free trade period,
which preceded the passage of the protective tariff of 1842. Seek-
ing its opposite, you will be led, as naturally, to look to the
closing years of the protective periods, established by the tariffs
of 1828 and 1842 years, in which the country presented to view
a picture of peaceful and quiet progress, such as the world had,
theretofore, never seen.
The tendency towards the establishment of a sound morality,
Mr. President, in every country of the world, has been in the direct
ratio of the steadiness and regularity of the societary movement
the gambling tendencies of the barbaric ages then tending to
disappear. That principle being admitted, I would ask you to
study the action of the central government, from the day on which
it assumed to control the monetary movement of the country, and
satisfy yourself, as you readily may, that to its vicious course of
action, and not to error in the local governments, we owe the de-
moralization that now exists. As a member of the old Federal
party, you will, I am sure, rejoice to find this fact established.
That you may do so, I would beg you to look to the urgent
recommendations of 1835, for the establishment of State banks,
cities fill the columns of the journals. One reads of butchery until the very
letters in the printed columns appear bloody; of arsons, until the light of con-
flagration seems to throw its lurid glare throughout the apartment ; of fraud,
until a line of sleek, hypocritical, would-be-respectable men range them-
selves before us ; and of crimes yet fouler and more bestial, until we tremble
lest the lightnings of offended Heaven should descend from a cloudless sky,
and overwhelm the earth in ruin." Miner's Journal.
" Official roguery has been rampant. There are customs prevalent, esta-
blished by precedent, and endorsed by long usage, which, if now done for
the first time, would be deemed larceny. The eagles are gathering together
to-day at the Federal capital, and the jobbing, peculation, vote-yourself-a-
prize system, will soon be in full operation. Common usage has given to
certain doubtful practices the stamp of legality. He would be regarded as
very verdant, and exceedingly unsophisticated, who should presume to call
things by their right names in Washington, or to hint that the private gen-
tleman who had so wasteful an array of servants, as the servants of the
people at Washington, would forthwith discharge the whole set without a
character. The treasury, one might think, is replenished annually for the
benefit of these gentlemen. That they themselves think so, is palpable.
From this centre, the idea of official honesty, in States and municipalities,
seems to have taken a like latitudinarian range. The finances of some of
our cities are managed in a most unaccountable manner literally unac-
countable, for no accounts are rendered. Immense sums disappear, taxation
annually increases, and the deficit keeps pace with the sums assessed. The
public credit is shaken, municipal evidences of debt are dishonored, neces-
sary public works stand still, repudiation is practically attempted, and all
this time enough is squandered, and disappears by peculation, to keep
the treasury more than ready for the lawful demands upon it." North
American.
PRESIDENT OF THE UNITED STATES. 23
followed by indignant denunciation of both banks and notes, and
by the establishment of a department in the national treasury, for
the supervision of local banks, from which is issued, annually, an
enormous mass of figures, arranged with the intent to deceive their
readers into the belief, that those who place confidence in banks
will be defrauded. Look, next, to the speculations in public
lands, which always follow the adoption of a policy tending
towards the closing of our factories and furnaces, and thus
enable gamblers and speculators to accumulate fortunes, at the
expense of the poor emigrants who are driven from the older
States. Look, again, to the enormous changes in the value of
property of every description, resulting from the three suspen-
sions, in time of peace, that have followed the centralization
of the monetary power in the hands of the Federal executive.
Look, then, to the facts, that "free trade," the control of the
central government over the currency, and the doctrine that "to
the victors belong the spoils," had their origin at the self-same
period. Further, look to the fact, that an ad valorem system,
offering, as it does, a bounty upon the perpetration of fraud,
drives the honest merchant from the business of importation.
Look, I pray you, to the great fact, that, since the day on which
the centralized system was adopted, the expenditures of the
government have been quintupled and that nearly seventy mil-
lions of dollars, per annum, are now, at every election, put up
to the highest bidder. Look at the enormous changes in the
prices of all our staples, consequent upon that exclusive depend-
ence upon foreign markets, which it is the object of the centralized
system to establish. Look at the gambling spirit, and the reck-
lessness thereby engendered, and you will be at no loss to account
for the demoralization that is in progress a demoralization
whose growth has, in the last few years, been more rapid, than in
that of any country recorded in the history of the world. Having
studied these things, Mr. President, you will, I think, be disposed
to agree with me in opinion, that while the central government
shall continue to pursue a course that, in effect, offers boun-
ties for the perpetration of frauds and villanies, there can be no
hope of change ; and that, unless there be a change, the day must
speedily arrive, when the people, in their distress, will be found
calling upon Providence, in its mercy, to send them a dictator,
and thus relieve them from the oppression of that worst of all
despotisms, a centralized democracy.
Hoping, Mr. President, that, under reforms that you may insti-
tute, the State authorities may become re-instated in the posses-
sion of the powers of which they have been deprived, and that we
may thus be enabled to retrieve our reputation,
I remain, very respectfully, your obed't servant,
HENRY C. CAREY.
Philadelphia, December 28th, 1857.
24 LETTERS TO THE
LETTER FIFTH.
JUNIUS tells us, Mr. President, that ' ' the ruin or prosperity
of a state depends so much upon the administration of its govern-
ment, that to be acquainted with the merit of a ministry we need
only observe the condition of the people. If," as he continues,
"we see them obedient to the laws, prosperous in their industry,
united at home and respected abroad, we may reasonably pre-
sume that their affairs are conducted by men of experience, abili-
ties, and virtue. If, on the contrary, we see a universal spirit
of distrust and dissatisfaction, a rapid decay of trade, dissensions
in all parts of the empire, and a total loss of respect in the eyes
of foreign powers, we may pronounce, without hesitation, that
the government of that country is weak, distracted, and corrupt."
The first of the pictures here presented exhibits the state of the
American Union at the close of the war in 1815 ; again in 1834,
at the date of the repeal of the protective tariff of 1828 ; and
again in 1847, when the act of 1842 ceased to be the law of the
land. The second is found on an examination of the condition
of the country, in the period from 1818 to 1824, when protection
had ceased, and when the legislatures of numerous States had
found themselves compelled to stay the action of the laws for the
collection of debts; again in 1841-2, when " stay laws " were
again resorted to, and when the Federal goverrnment was nearly
bankrupt ; and, lastly, at the present period, when there reigns
"a universal spirit of distrust and dissatisfaction " when there
are "dissensions in every part of the empire" and when the
' ' respect of other powers ' ' has so nearly ceased to have exist-
ence.
In proof that such is the case, and, that the Union is rapidly
declining in the estimation of the people of other nations, I beg
to offer you the following extract from a work just published, the
author of which is not to be suspected of any disposition to mag-
nify the changes he discovered :
"It is very evident, as I converse with people here, and in
other parts of Northern Europe, that a great change has come
over the popular feeling towards America, since I was last on the
Continent, five years ago. Then America was the ideal every-
where to free-thinking and aspiring men. The oppressed looked
hopefully to it ; the philosopher found the confirmation of his
theories of human liberty there ; the hard-working, the politically
degraded, the idealists, the struggling masses, felt that the West-
ern Republic was especially for them, and even if they could never
share its privileges, they were happy that humanity had at length
looked on such a glorious effort. The reports of the common
PRESIDENT OF THE UNITED STATES. 25
freedom, of the education of the masses, of the high morality pre-
vailing, came over even exaggerated, and silenced the enemies
of popular rights, and converted many doubtful. One felt the
effect of all this, as a traveller. You were not alone ; you were
the representative of the best thoughts and aspirations of man-
kind. The warm hand grasping yours, welcomed not you, but a
nation of freemen. The rich did not condemn, because property
and person had been better shielded under the Republic, than
under European monarchies. The poor, the laborers, were espe-
cially your friends, for was not your land the very land which
elevated labor ?
"All this is quite different now. Yon are treated politely, as
a stranger ; or you are welcomed more or less for what you per-
sonally are, but for your country, among the populace you get no
welcome. The glory has departed.
"Within five years, various circumstances have opened the
eyes of Europe to our real situation, and, as often happens, the
people see nothing but our sins. We are simply now a tricky,
jobbing, half-barbaric people, where the worst political corrup-
tion of the Old World extsts without its refinement ; and where
brutality, rowdyism, and unlimited despotism have in certain
quarters free play. Our politicians and diplomats are despised ;
our Constitution is sneered at, as inflicting upon us the most dis-
graceful legislators ; and the laboring class and the democrats
know that within our limits, a more abominable tyranny over
labor and free speech and thought exists, than the worst despot-
isms of the Continent ever exhibited. There is nothing now in
our situation to dazzle the world. They see with clear eye our
blackest sins and our miserable political jobbing." *
Such being the state of things in Northern, we may now look
to Central Europe, in regard to which, I, myself, Mr. President,
can speak. Go where the traveller may, he finds, among thought-
ful men among those who had hoped to find, in this western
world, the realization of their brightest hopes, in regard to man's
onward progress a growing doubt in reference to our future.
Anxiously do they look across the ocean dreading to hear of
new, and more alarming, riots new civil wars new violations
of local rights new marauding expeditions new aggressive
wars. Ten years since, all was different. They would, then,
have regarded as a false prophet, the man who had predicted :
That, at the close of a single decade, the regular expenditures
of the Federal government, in a time of peace, would reach seventy
millions of dollars being five times more than they had been, but
thirty years before :
That the recipients of this large amount, whether contractors,
clerks, or postmasters, would be held liable for the payment of a
* Brace." The Norse Folk," page 24.
26 LETTERS TO THE
formal and regular assessment, to be applied to the maintenance
in office, of the men by whom they had been appointed, or those
by whom the contracts had been made :
That payment of these assessments, would be made the condi-
tion upon which their own continuance in office should depend :
That, coincident with these demands upon the employes of the
government, all salaries would be largely raised ; and that, thus,
the treasury should be heavily taxed for purely party purposes,
and for the promotion of private interests :
That centralization would be so far perfected, as to enable the
Executive to dictate to a body of officials, sixty or eighty thousand
in number, all their modes of thought, in reference to questions
of public interest :
That a constantly growing difficulty of obtaining independent
of the government the means of support, and constant increase
in the rewards of public service, would be attended with corre-
sponding increase in the number of claimants for office, and in
their subservience to the men at whose pleasure offices were held :
That the Executive would dictate to members of Congress
what should be their course, and publicly advertise the offices that
were to be given, to those whose votes should be in accordance
with his desires :
That the growing mental slavery thus indicated, would be at-
tended by corresponding growth in the belief, that "one of the
chief bulwarks of our institutions," was to be found in the physical
enslavement of the laborer :
That the extension of the area of human slavery would have
become the primary object of the government ; and that, with that
view, the great Ordinance of 1787, as carried out in the Missouri
Compromise, would be repealed : -
That, for the promotion of this object, the treaties with the poor
remnants of the native tribes would all be violated :
That, with the same end in view, wars would be made, piracy
encouraged, and territories purchased :
That the Executive power would so far have grown, as to enable
it to adopt measures provocative of war, with a view to the spoli-
ation of the weaker neighbors of the Union :
That it would be officially declared that might makes right,
and that, if a neighboring power refused to sell the territory
whose possession was desired, the Union would then be justified
in seizing it :
That the reopening of the slave trade would be publicly advo-
cated, and that the first step towards its accomplishment would
be taken by a citizen of the United States in rescinding all the
prohibitions of the Central American governments :
That the prohibition of slavery in a Central American State,
would be considered sufficient reason for the rejection of a treaty :
That the substitution, throughout all the minor employments
PRESIDENT OF THE UNITED STATES. 27
of society, of slave labor for that of the freeman, would be publicly
recommended by the Executive of a leading State :
That, while always seeking territory in the South, the rights
and interests of the people would be bartered away, for the sole
and exclusive purpose, of preventing annexation in the North :
That it would be declared, that the free navigation of Brazilian
rivers was to be obtained, ' ' amicably, if it could, forcibly, if it
must":
That the effect would now be seen, in the entire alienation of
the other communities of the Western world :
That the legislation of the country, would have fallen almost
entirely under the control of navigation, railroad, and other
transportation companies ; and that legislators would largely par-
ticipate with their managers, in the profits of enormous grants of
money, and of public lands :
That there would have arisen a "third house of Congress "
composed of lobby members, and embracing men who had filled
almost the highest legislative and executive offices abundantly
supplied, to use the words of Colonel Benton, "with the means
required for conciliating members, and combining interests," and
thus securing the passage of almost any bill, the applicants for
which were willing, sufficiently liberally, to pay :
That centralization would so far have grown, as to have caused
the expenditures of a single city, to almost equal those of the
Federal government, but thirty years ago :
That the expenditure of city revenues, and the maintenance of
public order, would be in the hands of magistrates, many of whom
would be regarded as worthy only of the penitentiary :
That the contest for the distribution of those revenues, would
become so fierce, as to cause the purchase of votes to an extent,
and at a price, before unknown ; and that elections would be car-
ried on by means of bowie-knives, pistols, and even by aid of
cannon :
That Lynch law would have found its way into the Senate
chamber : that it would have superseded the provisions of the
Constitution, throughout the Southern States : that it would have
superseded the civil authority, in one of the States of the Union :
that the right of the States to prohibit slavery within their limits,
would be so seriously questioned as to warrant the belief, that
the day was near at hand, when it would be totally denied : that
all the decisions of the Supreme Court, for sixty years, favorable
to freedom, would, by this time, have been reversed : that the doc-
trine of constructive treason would be adopted in Federal courts :
and that the rights of the citizen would be thus in equal peril, from
the extension of legal authority on one hand, and the substitution
of the law of force on the other :
That polygamy and slavery would go hand in hand with each
other ; and that the doctrine of a plurality of wives, would be pub-
28 LETTERS TO THE
licly proclaimed by men holding highly important offices under
the Federal government :
That manners, morals, or intellect, would cease to be deemed
essential to the representation of the Union, at foreign courts :
That religious discord would so far have grown, that the ques-
tion of the private opinions of a candidate for the presidency, in
regard to matters of religious faith, would be discussed through-
out the Union :
That the discord between the Northern and Southern portions
of the Union would have reached the point of civil war, attended
with a growing disposition, in its various portions, to look com-
placently upon the idea of dissolution : and, finally,
That Germany, divided and distracted as it was, before the
formation of the Zoll-Verein, was likely to be reproduced in this
Western world the Union tending steadily towards a dissolution,
the result of which would be, that the several fragments would
become mere tools in the hands of other powers.
This is a gloomy picture, and yet it is a true one. Not one of
these things would, a few years since, have been believed to be of
possible occurrence ; and yet, with the exception of this last, they
are, one and all, now matters of history.
How they have tended to the production of changes in the
modes of European thought, is exhibited, Mr. President, in a recent
British journal, in which, after showing, that the idea of the vote
by ballot, of " manhood suffrage," and of "household suffrage,"
had nearly passed away, the writer proceeds to say that
" This revulsion of sentiment and opinion is in a great measure
traceable to the spectacle of the American democracy. We owe
a deep debt of gratitude to the United States for the pregnant les-
sons they have taught us, and the timely warnings they have
given. * * * A few years ago the substantial, deep-seated,
long-descended fabric of English liberty was in danger from the
blind but honest enthusiasm of the sincere friends of popular insti-
tutions : now, if we succumb to that peril, we shall be wrecked
with our eyes open. The tide has somewhat ebbed, and the rock
is above water. Let us inquire a little more in detail what the
warnings that have come to us across the Atlantic are."
The time has been, Mr. President, when you and I, and all of
us, were accustomed to believe, that the great republic of the
West was to be the pillar of light, guiding the oppressed of the
world in their search for freedom. Widely different from this, it
has, as here is shown, become the beacon light, whose only use is
that of warning the world, against the shoals and sands, among
which our ship is likely to be wrecked. Turn back, Mr. Presi-
dent, a little in our history finding the pages in which are
recorded the early efforts of the central power to obtain direction
of the currency, and you will, as I think, find the origin of all
these changes. From that day to the present one, with slight
PRESIDENT OF THE UNITED STATES. 29
exceptions, centralization has grown steadily; and yet, strange
as it may appear in a patriot like yourself, the whole tendency of
your message, is in the direction of further centralization.
The more perfect the form of the ship, the more rapid will be
her passage through the water, and the more certainly and
speedily will she, under proper guidance, reach her destined port.
The more rapid and complete, however, will be her destruction,
should her pilot run her upon the rocks that lie in her course
the reaction then produced, being in the direct ratio of her pre-
vious action. So is it with nations. The higher their organiza-
tion, the more rapid is the movement of society, and the more
instant is the shock that attends a stoppage in the circulation.
The passage of an invading army through Peru, or Mexico, pro-
duces little effect, beyond a small destruction of life and property ;
but a similar event in England, would cause the closing of fac-
tories, the stoppage of mills and furnaces, the abandonment of
mines, the dispersion of the people, and the suspension of all the
machinery of local government. The power of recuperation
exists, however, in the same degree the recovery from the
effects of war, in countries like France or England, being much
more rapid than it can be, where the societary circulation is lan-
guid, and where the waste of property, or of population, can
slowly, if even at all, be repaired.
In no country of the world, do the effects of change become
so promptly obvious, as among ourselves ; and for the reason,
that the political organization being here more natural than in
any other the tendency to rapidity of circulation is so very great.
Universal instruction throughout the northern portion of the Union,
tends to the production of great mental activity ; and, whatever
may be the direction in which the ship of State is guided, the
movement towards the rocks on the one hand, or the haven on
the other, is here most rapid. Such being the case, it is easy to
account for the sudden and extraordinary changes, that are here
exhibited, and, that so much surprise the people of other lands.
In the decade that followed the passage of the tariff of 1824,
there was effected a greater improvement than had ever before
been witnessed in any country the people having passed from a
state of poverty to one of wealth the country having become so
attractive, as to cause, in the following years, a vast increase of
immigration and the government having passed from a condi-
tion in which it required, for its support, to borow money, to
one in which the public debt having been extinguished it
became necessary to emancipate from duty all the commodities
that did not enter into competition with those produced at home.
Nevertheless, but seven years later, the people and the govern-
ment, both, were bankrupt ; the circulation of society had almost
stopped ; and pauperism, to an extent that was alarming, pre-
vailed throughout the country. The cause of this was to be
30 LETTERS TO THE
found in the fact that protection had been abandoned. Again,
in 1842, the system was changed; and, before the close of the
first five years, the whole appearance of the country was changed
the circulation of society having become rapid, the credit of
the people and the government having been restored, and the
country having once more been rendered so attractive as to cause
a large increase of immigration. Again, at the close of 1846,
was the system changed protection having been then aban-
doned, and free trade then again inaugurated into power ; and
now, at the close of the first decade, we witness a decline more
rapid, and more pervading, than is recorded in the history of any
country of the world.
Why it is, that such are the effects produced, will be shown in
another letter, from
Yours, very respectfully,
HENRY C. CAREY.
Philadelphia, December 30th, 1857.
PRESIDENT OF THE UNITED STATES.
31
LETTER SIXTH.
BEFORE proceeding, Mr. President, to an examination of the
manner in which the policy of the central government has tended
towards producing the demoralization, that has now become so
clearly manifest, I would beg to call your attention to a simple,
but highly important, principle of social science, which may thus
be stated :
A thousand tons of rags, at the Rocky Mountains, would not
exchange for a piece of silver of the smallest conceivable size ;
whereas, a quire of paper would command a piece so large, that
it would weigh an ounce. Passing thence eastward, and arriving
in the plains of Kansas, their relative values, measured in silver,
would be found to have changed so much, that the price of the
rags would pay for many reams of paper. Coming to St. Louis,
a further change would be experienced rags having again risen,
and paper having again fallen. Such, too, would prove to be
the case, at every stage of the progress eastward the raw ma-
terial steadily gaining, and the finished commodity losing, in price,
until, at length, in the heart of Massachusetts, three pounds of
rags would be found to command more silver than would be
needed for the purchase of a pound of paper. The changes of
relation thus observed, are exhibited in the following diagram :
Paper.
Cloth. "
Rags
Cotton.
Paper.
Cloth.
Massachusetts.
Hags.
Cotton.
The price of raw materials tends, thus, to rise, as we approach
those places in which wealth most exists those in which man is
most enabled to associate with his fellow-man, for obtaining
power to direct the forces of nature to his service. The prices of
finished commodities, move in a direction exactly opposite
tending, always, to decline as those of raw materials advance.
Both tend, thus, to approximate the highest prices of the one,
being always found in connection with the lowest of the other ;
and, in the strength of the movement in that direction, is
found the most conclusive evidence of advancing civilization,
and growing commerce.
The tendency towards advance in civilization being thus, Mr.
32
LETTERS TO THE
President, everywhere, in the direct ratio of the approximation
of the prices of the rude products of the earth, and those of the
commodities into which they are converted, the test of the value
of every measure, is to be found in its tendency to produce, or to
prevent, that approximation. So examined, the protection ex-
tended to shipping, would appear to have been productive of un-
mixed good ships having steadily become cheaper, while ship-
limber has as steadily become dearer ; and the farmer having
found freights declining from year to year, while a market was
being made for portions of his trees, that, otherwise, would have
been wholly valueless.
With regard to the products of the labor given to cultivation
that labor which, when properly directed, tends most to expand
the mind and improve the heart it has been otherwise ; and be-
cause, the policy of the country has looked almost entirely to
foreign trade, to the exclusion of all measures tending to the pro-
motion of internal commerce. The prices of raw material have
steadily declined ; and, for the reason, that the obstacles to com-
merce have increased, when they should have diminished.
The average export price of flour, since the commencement of
the present century, has been as follows :
Five years ending in
1805
1810
1815
1820
1825
1830
1835....
Dollars.
.. 9.05
. 7.50
,.11.60
,. 9.15
.. 6.20
.. 6.20
,. 5.70
Five years ending in Dollars.
1840 7.87
1845 5.00
1850 5.54
Year 1850 5.00
1851 4.77
" 1852 4.24
The facts here presented, being most remarkable, are worthy,
Mr. President, of your most serious attention. The highest
average is found in the period from 1810 to 1815 ; that one, in
which there was, almost literally, no intercourse with foreign
countries ; and that, in which the energies of the country were,
more than they ever before had been, directed towards the estab-
lishment of internal commerce.* A domestic market was then
rapidly being created, the extent of which may be judged from
the fact, that the cotton manufacture, which, in 1805, had required
but a single thousand bales, absorbed, in 1815, no less than
90,000.t
* In the last of these years, only, it was, that gold and silver coin had
ceased to circulate, because of difficulties resulting from the events of the
war. The stoppage took place in the autumn of 1814, and the Treasury
year closes with the autumn of 1815. That, however, was one of the
lowest years of the period.
( Report of the Committee of Commerce and Manufactures, February 13, 1816.
The effect of this large domestic demand, upon the price of cotton, is shown
PRESIDENT OF THE UNITED STATES. 33
With the return of peace, however, the policy of the country
was changed, and from the date of that change, we have an
almost unbroken descent, until, in 1852, just prior to the opening
of the Crimean war, it had reached the lowest point of the cen-
tury ; and probably the lowest recorded in the country's history
thus proving a constant increase in the obstacles standing be-
tween the man who raised the wheat, and him who had money
with which to purchase it. Directly the reverse of this, is what
\ve see to have occurred in France, where the average price of
wheat for thirty-five years, ending with 1848, remained almost
stationary, although somewhat higher in the closing period than
in the earlier ones. So, too, with both Russia and Northern
Germany, in the first of which, the price of corn, in the decade
ending in 1852, was one-half higher than it had been, in that
ending in 1825 ; while in the last, we find the average maintained
with a steadiness contrasting strikingly, with the extraordinary
changes occurring among ourselves, as here is shown :
Average of wheat Average of flour
in Prussia, per scheffel.* exported from U. S.
1816-25 66{| groschen = $1.48 $7.57
1826-35 55^ " = 1.23 5.95
1836-45 62^ " = 1.39 6.43
1845-51 78 T 9 T " = 1.63 5.41
1852 ' 68/5 ' = L51 4 - 24
In the one, the price, towards the close, is higher than in the
preceding periods ; while in the other, it has fallen to little more
than half.
The course of events in the advancing countries of Europe
those which are following in the lead of Colbert, and of France
is, therefore, exactly the opposite of what is here observed ;
but if we seek a case that is exactly parallel, it will be found in
studying the operations of Ireland or India, Portugal or Turkey
countries which follow in the lead of England. In all of these,
the prices of raw products, and those of finished commodities,
are steadily receding from each other, with constant decline in the
value of land ^and man, and constantly augmenting difficulty in
obtaining the food and clothing required for man's support.
Like these United States, they are becoming from year to year
more dependent upon foreign trade, and less able to maintain
commerce among themselves.
Turning now, Mr. President, to the England of a century
since, we find a precisely similar state of facts, and resulting, too,
by the fact, that the average value of the cotton exports of 1815 and 1816
exceeded $24,000,000; whereas, three years later, when the domestic manu-
facture had almost disappeared, it sunk to $20,000,000. Treasury Report,
February 20, 1836.
* A scheffel is 1 y 5 ^ bushels,
o
34 LETTERS TO THE
from causes precisely similar a growing dependence on distant
markets, attended with increased necessity for the use of machi-
nery of transportation ships and wagons, sailors and wagon-
drivers. The price of wheat fell there, regularly, until, at length,
it reached the very low point of 21s. od. per quarter, or little
more than half a dollar a bushel manufactures remaining high
in price. So soon, however, as a market had been made at home,
the price rose nearly doubling in the very first decade, and fur-
ther advancing to an average of 51s. 3d. ; at or near which point,
it remained for fivc-and-twenty years. Cloth and iron, during all
that time, were becoming cheaper thus presenting, in the con-
stant approximation of prices, the most unquestionable of all the
evidences of advancing civilization.
The whole quantity of food for which Great Britain then needed
a foreign market was trivial to a degree the average export in
the decade ending in 1755, when the price was lowest, having
been only 4,000,000 of bushels; and yet, small as it was, the
necessity for going abroad to sell it, produced the whole of the
effect above described. The regulating market of that day, having
been the country on the Rhine then the great seat of manufac-
tures the more that was sent to it, the lower was there the price,
and the lower that which could be obtained at the place of pro-
duction. The 4,000,000 of bushels thrown upon that market
must have caused a reduction there, of not less than 10, and more
probably 15, per cent. ; and that reduction extended itself to the
whole British crop, whatever was its size. So soon, however,
as a market had been made at home, British corn ceasing to go
abroad ceased to affect the prices of foreign markets ; and then
British prices rose to the extent we see them to have done, because
of the double saving to the farmer from the diminution in the cost
of transportation, and from the increase of prices in all the mar-
kets of Continental Europe, from which supplies might otherwise
have been drawn. The amount of that saving, probably, was
$100,000,000 ; and it was the effect of an increase in the rapidity
of the societary circulation effected, in the short space of twenty
years, by the very simple process of bringing the consumer to the
side of the producer.
Look where we may, Mr. President, we find, that men become
more civilized, as the prices of raw materials tend to rise, and to
approximate more nearly to those of the finished commodities
required for man's consumption. Such being the fact, and our
policy tending steadily in the reverse direction, you can readily
account for the daily growing tendency, among ourselves, towards
centralization and slavery, with their attendant demoralization.
For further facts in reference to this great question, I must, how-
ever, refer you to another letter.
Yours, with great respect,
HENRY C. CAREY.
Philadelphia, January 1st, 1858.
PRESIDENT OF THE UNITED STATES. 35
LETTER SEVENTH.
No truth in science, Mr. President, is more readily susceptible
of demonstration, than that of the liability of the man who must
go to market, for the payment of the cost of getting there. It is
one, which sad experience teaches every farmer; and one, too,
that the student may find demonstrated by Adam Smith. The
corn that is twenty or thirty miles distant from market, sells for
as many cents less, per bushel, than that which is close to mar-
ket ; and the potatoes that are a hundred miles from market, are
almost worthless ; while those raised near it, sell for thirty or forty
cents a bushel the difference between the two, being the tax of
transportation.
Another and equally important truth is, that the price of the
whole crop is dependent upon that which can be obtained for the
little surplus that must go abroad ; or paid, for the small quantity
that must be brought from a distance. Give to any certain dis-
trict 10,000 bushels of wheat, more than is there required, and
the crop will fall to the level of the price that can be obtained
abroad, for those few bushels although constituting, perhaps,
but 3 per cent, of the whole. Let the same district, in the fol-
lowing year, require 10,000 additional bushels, and the whole will
rise to the level of the price at which they can be obtained the
difference between the two being, perhaps, as follows :
Admitting the crop to be 300,000 bushels, and that the price, -when
there is neither surplus nor deficiency, is $1 the product is. $300,000
The crop being larger, and a surplus requiring to be sent to a dis-
tance, the price will fall to 75 cents giving for 310,000
bushels 232,500
The crop being small, and 10,000 bushels being required from a
distance, the price will be $1.25 giving for 290,000 bushels. 362,500
The question here, between a high and a low price differing
to the extent of 66f per cent. is dependent, altogether, upon the
existence of a demand slightly below, or above, the quantity pro-
duced. The former was the condition of the people of Great
Britain, at the period referred to the supply having been
slightly in excess of the demand, and that excess compelling them
to go to a distant market, with some 2 or 3 per cent, of the crop,
the price received for which, fixed the price of all. They, them-
selves, too, were constantly aiding in the depression of prices in
that market, and the more they sent the less they obtained for it.
So long as the prices in the home market were regulated by
36 LETTERS TO THE
those in the foreign one, it would have been more profitable to
them, to have thrown the surplus into the oceaii than to have
sold it.
Identical with this, is now the condition of the American
farmer; and therefore it is, that while the price of food the
raw material of labor is steadily rising in France, Denmark,
Germany, Spain, and Russia, it here as steadily declines. Simi-
lar, too, is their condition in this, that the whole quantity for
which a foreign market must be found, is so small that, were it
altogether wasted, the loss would be unfelt. Its waste, indeed, would
be productive of great advantage to the farmer ; for, so long as
all domestic prices are fixed by foreign markets, the effect of this
trivial export, in crushing the foreign farmers, by a reduction of
their prices, is accompanied by corresponding reduction of the
domestic ones the loss thence arising, extending itself to the
whole of the food produced.
The total amount of food of all descriptions, exported from the
United States, and the prices of flour at the corresponding dates,
have been as follows :
Period. Ayerage export. Price of flour.
1821-15 $13,000.000 $6.20
1826-30 12,000,000 6.20
1831-35 14.000,000 5.95
1830-40 12,500,000 8.00*
1841-45 16,000.000 5.16
1846-50 39,000,000 (Irish famine) 5.44
1850 26,000,000 5.00
1851 22,000.000 4.73
26,000,000 4.24
We have, here, a constantly growing necessity for resorting to a
distant market, accompanied by a decline of prices amounting to
35 per cent. ; but, if we compare 1850-52 with the period from
1810 to 1815, when the home consumption was equal to the whole
supply, the reduction is no less than 63 per cent. Admitting, how-
* The facts of the last three years correspond precisely with those which
occurred in the period from 1836 to 1840, when the price of flour, for the
moment, ranged so high, preparatory to the great fall that was so soon after
to take place. Then, as now, mills and furnaces had ceased to be built.
Then, as now, emigration to the West was immense, and the combined force
of the nation was being given to the creation of new machinery for pro-
ducing food. Then, as now, production diminished, while consumption was
maintained the deficiency being made up by the contraction of debts to
Europe, for an immense amount of cloths and silks, the power to pay for
which had no existence. Then, as recently, there was great apparent pros-
perity, as preparation for the universal bankruptcy of 1841-2. The prepa-
ration now being made is similar in all its parts ; and as the causes are the
same, we may be assured that the effects will not be different.
PRESIDENT OF THE UNITED STATES. 37
ever, that the prices of 1821-25 would be the standard, in the
event of the creation of a domestic market, that would relieve the
farmer from the necessity for going abroad, we obtain the result,
that the same crops which now sell for $1,500,000,000 would then
command $2,200,000,000 making a difference of $700,000,000,
which may be regarded as the actual price paid by the agricul-
tural body, for the privilege of almost giving away food, to the
extent of $26,000,000.
The prices above given, are those of the ports of shipment,
always greatly higher than those of the places of production.
Were we now to add the saving of inland transportation, that
would be consequent upon the creation of local markets, the dif-
ference would reach $1,000,000,000 ; and this, too, when taking
as the standard the prices of 1821-25, embracing years of almost
universal distress throughout America and Europe. Were we
to take the average of 1816-25 $7.67 it would reach
$1,500,000,000. The average of all France for every decade
of the last forty years, has exceeded 18 francs for the hectolitre of
wheat being the equivalent of $1.25 per bushel; and the later
periods are the highest of all ; whereas, they are here the lowest.
The French average of the six years ending in 1852, for all
France, must have been 50 per cent, greater than the average of
those years for the whole of this country ; and yet, all that was
required for bringing prices here to a level with those abroad, was
the creation of a market for food to the extent of $26,000,000
being less than 2 per cent, of the total product. To those who
doubt this, it can be necessary only to say, that the differences
here stated as likely to occur, correspond exactly with those
that did occur in England, in the period between 1750 and 1770.
Commerce then growing, and the circulation becoming rapid, the
dependence on the trader diminished every stage of that dimi-
nution being marked by an increase in the value of labor and
land. Here, on the contrary, the dependence on ,the trader
steadily increases ^ every stage of its increase being marked by
a decline in the price of food, by which the price of land and labor
must ultimately be regulated.
It may, however, Mr. President, be said, that the food con-
sumers would suffer by such a course of operation. Directly the
reverse of this, however, has been the case in all other countries ;
and so would it be with us. At no period of England's history,
have the evidences of growing civilization, as furnished by the
approximation of the prices of raw materials and finished pro-
ducts, been so great, as in the five-and-thirty years preceding the
opening of the wars of the French Revolution ; and at none, has
the condition of the people so much improved. Circulation
became from year to year more rapid. Labor was from year to
year more economized ; and as the power of accumulation is
38 LETTERS TO THE
wholly dependent upon such economy, it followed, necessarily,
that wealth most rapily augmented. Land and man, in that
period, almost doubled in value ; and all because of the relief
from the tax of transportation, resulting from the growth of com-
merce. So, too, in France. At no period in the last two cen-
turies, has corn been so low in price as in the days of Louis XV. ;
and yet, at none, have the people so much suffered from the want
of food. Commerce then had scarcely an existence. Since then,
the price has rapidly increased enabling the farmer to gain on
both hands : first, by obtaining more money for his corn ; and,
second, by obtaining more cloth for his money. Farm wages
rise ; and with that rise, there is, necessarily, a constant augmen-
tation of wages in every other pursuit it being only by tempt-
ing the people of the. country, to come to the towns, that factories
can obtain supplies of labor. Desiring, then, to ameliorate the
condition of man, we must begin with the laborer on the land
his wages being the standard by which all others are to be com-
pared ; and that by which they are regulated. The more close
the approximation of the prices of raw materials and finished
commodities, the higher will be the wages, and the greater the
tendency towards civilization.
As it was in England, and as it is now in France, so would it
be among ourselves. The work of making a market for the food
that is now exported, would make a demand for muscular and
mental force enabling each and every man to sell his services,
and to purchase those of the people around him. Labor being
in demand, its price would rise ; and the more rapid the rise, the
more it would be economized ; the greater would be the power
of accumulation ; the more abundant would become the machinery
required for enabling him to call the forces of nature to his aid ;
the larger would be the proportion of the mental and physical
force of the community given to developing the treasures of the
earth ; and the larger would be the reward of labor, in food and
clothing. Commerce would then grow rapidly, but the power
of the foreign trader would, then, as much decline precisely as
we see to have been the case in both France and England, at the
periods above referred to.
The proposition, that civilization grows in the direct ratio of
the removal of obstacles standing between the producer and the
consumer, and the consequent approximation of the prices of the
products of the earth in their rude and finished forms, is a great
and universal law, to which no exception can be found. Being
so, it follows, necessarily, that raw materials should rise in price
as finished commodities are cheapened; that civilization should
advance with the advance in the price of those materials ; and
that that civilization should exhibit itself in the form of increased
power of combination, increased development of individuality, in-
PRESIDENT OF THE UNITED STATES. 39
creased sense of responsibility, and increased power of progress.
Thus far, the policy of the Union, as we have seen, has tended
in an opposite direction towards lessening steadily the price of
food ; and as such progress tends inevitably towards barbarism,
it is here we find the fundamental cause of the extraordinary
demoralization, now so rapidly in progress. In another letter,
Mr. President, I propose to show, that the facts in regard to
the great staple of the South are precisely the same as those
above described.
Yours, very respectfully,
HENRY C. CAREY.
Philadelphia, January th, 1858.
40 LETTERS TO THE
LETTER EIGHTH.
TURNING now southward, Mr. President, we may look to our
other great staple, COTTON, with a view to see if the course of
operation has been the same. That it has been so, you may
readily be satisfied.
The crop of 1814 was estimated at 70,000,000 of pounds, of
which more than 8,000,000 were converted into cloth in the coun-
try within thirty miles of Providence the total domestic con-
sumption having amounted to 90,000 bales, or nearly 30,000,000
of pounds. In the seven years following, the crop rose succes-
sively to 106,000,000, 124,000,000, 130,000,000, 125,000,000,
167,000,000, and 160,000,000; but the home manufacture as
steadily declined producing a constantly increasing necessity for
pressing upon the foreign market, with results such as are here
exhibited :
Export 1815 and 1816 average 80,000,000 total price $20,500.000
" 1821 and 1822 134,000,000 " 21,500,000
" 1827 to 1829 " 256,000,000 " " 26,000,000
The quantity, as we see, had more than trebled, while the
receipt therefor, had increased but little more than 25 per cent.
The prices here given, being those of the shipping ports, and the
quantity to be transported having so much increased, and having
required so great an extension of cultivation, it is, I think, rea-
sonable to assume, that the planter in those years gave 256,000,000
of pounds receiving, in exchange, no larger amount of money
than, six years previously, he had received for less than a third
of that quantity.
1830 to 1832 average, pounds, 280,000,000 $28,000,000
1840 to 1842 " 619,000,000 55,000,000
1843 to 1845 " 719,000,000 51,000,000
We have, here, an addition to the quantity of 1815-16, amount-
ing to no less than 630,000,000 of pounds, and requiring nine
times the amount of inland transportation even admitting that
the area of cultivation had remained the same. We know, how-
ever, that, in that period, it had quadrupled, and must have re-
quired fifteen, if not even twenty times as large a force of men,
horses, and wagons, to do the work. Allowing for this, Mr.
President, you will readily see that the planter must, in these
years, have been giving 700,000,000 of pounds, for less than
twice the quantity of money that, thirty years before, he had
received for 80,000,000.
1849 pounds, 1,026,000,000 $66,000,000.
Here we have nearly 940,000,000 to be transported, additional
PRESIDENT OF THE UNITED STATES. 4l
to those of 1815-16 ; and from an area of cultivation that, because
of the unceasing exhaustion of the soil, had been again enormously
extended.* Such being the case, it may well be doubted, if the
actual quantity of money, or money's worth, that reached the
planter, in exchange for these 1,034,000,000, was much more than
twice as great as that his predecessors had received for 80,000,000.
Making the smallest allowance for additional transportation, he
was here giving three pounds, for the same money that before
had been received for one.
1850-1851 average, pounds, 781,000,000 $92,000,000
The great fact is here presented, that the less cotton the
planter sends to the foreign market, the more money he re-
ceives. In this case, there is a saving of internal transportation,
as compared with 1849, upon 245,000,000 pounds, and an in-
crease of gross receipt, amounting to $26,000,000. Allowing
for the additional freight, as compared with 1821, the producer
was now not giving more than two pounds, for the price received
before for one.
1852 pounds, 1,093,000,000 $88,000,000.
* The following paragraph is from a speech of a distinguished citizen of
Alabama, and exhibits the action of the system in a State that but forty
years since had no existence :
"I can show you, with sorrow, in the older portions of Alabama, and in
my native county of Madison, the sad memorials of the artless and exhaust-
ing culture of cotton. Our small planters, after taking the cream off their
lands, unable tp restore them by rest, manures, or otherwise, are going fur-
ther West and South in search of other virgin lands, which they may and
will despoil and impoverish in like jnanner. Our wealthier planters, with
greater means, and no more skill, are buying out their poorer neighbors, ex-
tending their plantations, and adding to their slave force. The wealthy few,
who are able to live on smaller profits, and to give their blasted fields some
rest, are thus pushing off the many who are merely independent. Of the
twenty millions of dollars annually realized from the sales of the cotton crop
of Alabama, nearly all, not expended in supporting the producers, is re-in-
vested in land and negroes. Thus, the white population has decreased, and
the slave increased almost pari passu, in several counties of our State. In
1825, Madison County cast about 3000 votes ; now, she cannot cast exceed-
ing 2300. In traversing that county, one will discover numerous farm-
houses, once the abode of industrious and intelligent freemen, now occupied
by slaves or tenantless, deserted, and dilapidated ; he will observe fields,
once fertile, now unfenced, abandoned, and covered with those evil harbin-
gers, foxtail and broomsedge ; he will see the moss growing on the moulder-
ing walls of once thrifty villages, and will find ' one only master grasps the
whole domain" that once furnished happy homes for a dozen white families.
Indeed, a country in its infancy, where, fifty years ago, scarce a forest tree
had been felled by the axe of the pioneer, is already exhibiting the painful
signs of senility and decay apparent in Virginia and the Carolinas." C. C.
Clay.
42 LETTERS TO THE
Here is an increase, in the quantity requiring to be transported,
amounting to more than 300,000,000 pounds, accompanied by a
diminution of gross receipt, amounting to $4,000,000; and a
diminution of net receipt, that cannot be estimated at less than
$10,000,000. As compared with 1815-16, the planter must, here,
have been giving five pounds, for the price he before had received
for one.
The course of things, above described, is without a parallel in
the history of the world. In the natural order of affairs, the cul-
tivator profits by improvements in the machinery of conversion,
his products rising in their prices, as the finished commodities fall
rags becoming dearer, as paper becomes cheaper and wool
going up, as cloth goes down. Here, however, all is different. In
the forty years above referred to, each and every one has brought
with it some improvement in the modes of converting cotton into
cloth, until at length the labor of a single person is more pro-
ductive than that of four or five had been before ; and yet, so far
are those improvements from having been attended with any in-
crease of price, that we find the planters giving steadily more and
more cotton for less money and thus affording the most conclu-
sive proof of a tendency towards barbarism.
The cause of all this being, as we are told, that too much cot-
ton is produced, the planters hold meetings with a view to reduc-
tion in the quantity ; and yet, from year to year, the crop grows
larger; the area, over which it requires to be grown, becomes
more and more extended ; and the net proceeds decline in the
proportion they bear to the population of the States in which it
is produced. In 1815, that population amounted to 2,250,000,
whereas, in 1850, it exceeded 6,000,000. In the first, the gross
proceeds of 80,000,000 pounds were $20,500,000; whereas, in
1849, 1,026,000,000, with all the vast increase of freight, were
given for $66,000,000 ; and the total gross proceeds of the crop
could but little have exceeded $80,000,000. Struggle as the
planters may, the case is still the same they being required to
give, from year to year, more cotton for less money ; and that, too
in defiance of a great natural law, in virtue of which, they should
have more money for less cotton.
We are thus, Mr. President, presented with the remarkable
fact, that the two chief products of the Union are steadily decli-
ning in their power to command money in exchange ; and that,
so far are the farmer and planter from dividing with the consumer
of their products, the advantages resulting from improved machi-
nery of transportation and conversion, that the latter gets it all,
and more the former obtaining less money, the more produce
he has to sell.
It is asserted, however, that all this is in strict accordance with
some great law, in virtue of which every thing tends to become
cheaper; but a brief examination of the general movement of
PRESIDENT OF THE UNITED STATES. 43
prices will probably satisfy you that the only law with which it is
in accordance, is that human one, denounced by Adam Smith
having for its object the cheapening of the raw products of the
earth, the establishment of the supremacy of trade, and the reduc-
tion of man to the condition of a mere instrument to be used by
the trader ; or, in other words, to that of a slave.
In England, the price of sheep's wool has doubled in the last
eighty years ; and that, too, notwithstanding the extraordinary
extent to which cotton, in that period, has been substituted for
wool. Had there been any commodity whatsoever, by which the
theory of reduction of prices could have been supported, this
would certainly have been the one ; and yet, the facts are directly
opposed thereto. In France, too, wool has greatly risen. In
Germany, it is now so much higher than it was thirty years since,
that that country has become a great importer, where, formerly, it
was a large exporter of this commodity. Looking next tp silk,
we find the following remarkable illustration of the great law
that lies at the foundation of all human progress. In the Re-
port on the Commerce and Navigation of France, we have the
official value, established about thirty years since, of all the com-
modities exported and imported, side by side with their actual
value, and are thus enabled to study the changes that are now
going on, and measure their extent. How great they are,
and how precisely they move in the direction that has been
indicated, is shown in the fact, that while sewing -silks have
fallen from 95 to 53 francs per pound, cocoons have risen from
3 to 14 francs.
Turning now to Mr. Tooke's valuable table of prices, in the
period from 1782 to 1838, and taking the first and last decades
thereof, we obtain the following results :
1782 to 1701. 1829 to 1838.
Bristles percwt. Q Us. OOrf. 15 12. 0<W.
Flax per 9 head 1 7 00 2 3 10
Oil per ton 40 00 00 48 00 00
Butter percwt. 2 10 10 3 16 00
Irish mess-beef ...per tierce 3 10 10 4 18 00
Tallow percwt. 2 1 00 1 19 6
Timber, fir per load 2 4 00 2 8 00
Whalebone per ton 150 00 90 215 00 00
In all these cases, the producer was profiting by the increased
facilities of transportation and conversion obtaining larger prices
lor all he had to sell, with constant increase in his power to im-
prove his own machinery, and thus augment the quantity pro-
duced; whereas, in those of flour and cotton, he is seen to have
been receiving smaller prices, with constant diminution of quan-
tity, resulting, as will be shown, from the constant exportation
of the elements of which flour and cotton are composed.
44 LETTERS TO THE
We are told, however, that in the case of cotton, decline of
price is the necessary consequence of a growth in the supply
exceeding the wants of the world ; and therefore it is, that the
planters hold meetings, for the purpose of devising measures tend-
ing to the limitation of the quantity to be grown. In so doing,
however, they are only repeating the operation performed at an
earlier period in Virginia, in reference to tobacco ; and thus it is,
that like causes produce like effects. The real difficulty, Mr. Pre-
sident, is now, as it then was, to be found in the total absence of
diversification of employments producing a necessity for un-
ceasing waste of labor, and unceasing exhaustion of the soil,
accompanied by a destruction of the value of the land, and of the
man by whom it is cultivated. That such is certainly the case,
Mr. President, I propose to furnish further evidence, in another
letter, remaining meanwhile,
Yery respectfully,
Yours,
HENRY C. CAREY.
Philadelphia, January 6th, 1858.
PRESIDENT OF THE UNITED STATES. 45
LETTER NINTH.
THE reduction in the price of flour, and of cotton, is not, as
you, Mr. President, have seen, in accordance with any general
law. On the contrary, it is in direct opposition to a great law
whose existence is everywhere manifest. Neither is the reduction
in the price of cotton a consequence of any excess in the quantity
produced, as you will be satisfied when you reflect, that the total
quantity produced in the world does not equal two pounds per
head ; whereas, the quantity that should be used, cannot be
limited to ten, or even twenty, pounds per head. Such being the
case, the difficulty, it is clear, does not lie in the excess of pro-
duction, but in the deficiency of consumption. Could thexcause
of this deficiency be discovered, and a remedy be applied, the
planter might go on increasing his quantity from year to year
the price of his cotton steadily rising, and that of cloth as steadily
falling, precisely as we see to be the case with rags and paper,
cocoons and silks, sheep's wool and cloth, flax and linen.
The larger the price of corn, the greater must be the power of
the farmer to purchase cloth, and the greater the quantity of
money obtainable by the planter in return for any given quantity
of cotton. The tendency of American policy, however, is towards
reducing the price of corn throughout the world ; and, as a neces-
sary consequence, towards destroying the power of the people of
France and Germany, Russia and Austria, England and Ireland,
to purchase cloth. That such is the case, will be obvious to you,
Mr. President, when you shall have reflected, for a moment, upon
the effect that is now so obviously produced, by an increase in
our export ; and upon that which would be produced, were it
possible at once to say, that no more food would go from America
to any country of the world we having followed the advice of
Adam Smith, when he advised that tons of food should be com-
bined with wool, so as to enable both to travel cheaply to distant
lands. Such a measure would, at once, relieve the European
market from the pressure by which it is now kept down, and the
price of English and Irish food would rapidly advance afford-
ing inducement to the extension of cultivation, and making demand
for labor, with large increase of wages, and consequent increase in
the power to purchase cloth. German food and German land
would rise, and so would those of France and Russia, Austria
and Spain. Agriculture thus receiving a new impetus, agricul-
tural labor would rise in price rendering indispensable an in-
crease in the wages of factory labor. What is needed throughout
the world is, rapidity of circulation, making demand for labor
and its products. Centralization is opposed to this producing
46 LETTERS TO THE
stagnation everywhere, and compelling the planters of the world
to give n constantly increasing quantity of their commodities
Miir'ur and cotton for a constantly diminishing quantity of
money. Nearly all the countries of Europe having followed in
the lead of France, in the effort to produce decentralization, the
effect is seen, in the rise that has there taken place, in the prices
of food and wool.
Such would be the effect, among ourselves, of the adoption of
the policy that, there, has been productive of such results. The
measures required for making a domestic market for food thus
relieving the farmers of Europe from American competition
would produce rapid circulation of labor and commodities, and the
American farmer would soon obtain as much for his corn, as is paid
in France or England. The rise in the price of agricultural labor
would be followed by rise in that which was otherwise employed.
Labor becoming from day to day more productive, at the close of a
few brief years, the domestic consumption of cotton would be thrice
as great as now, with corresponding diminution in the quantity
pressing on the market of Europe enabling the planter to obtain
for large crops a higher price, per pound, than he now receives
for small ones.
Adam Smith denounced the British system of his time, because
of its being based upon the idea of cheapening all the raw mate-
rials of manufacture labor and the products of the land. The
system of the present day looks to the production of the same
results ; and therefore is it, that, in accordance with the ideas of
Dr. Smith, it has been resisted by all the civilized nations of the
world America alone excepted. In all of them, consequently,
raw produce is rising in price, while here, alone, is found a civi-
lized community, in which the produce of the land has steadily,
during half a century, declined in price the farming and plant-
ing interests having been most consistent, in the pursuit of a policy
tending to diminish the quantity of money to be received, in ex-
change for a bale of cotton, or a barrel of flour.
The evidences of growing civilization, Mr. President, are to be
sought in two directions : first, in the rise in the prices of the raw
products of the earth ; and, second, in the decline in those of the
manufactured commodities required for human purposes. So far
as regards the first, that evidence has not been here obtained
both flour and cotton having steadily fallen in price, to the great
disadvantage of those by whom they are produced. The manu-
factured commodity that, more than any other, is required by the
farmer and the planter, is IRON, and we may now turn to it, with
a view to ascertain if we can find in that direction, the evidence of
growing civilization with which, thus far, we have failed to meet.
Doing so, we ascertain that, in 1821 and 1822, the average price
of bars at Glasgow, was 10 14s., or $51.36, a ton, at which rate
the 100,000,000 of pounds of cotton then shipped would have
PRESIDENT OF THE UNITED STATES. 47
paid for, at that port, about 450,000 tons leaving $3,500,000
to defray the inland expenses of sending the cotton to the port of
shipment. Turning now to the four years ending in 1855, we find
that the average price of bars has been $38.50 per ton, and- that
the quantity of cotton that has been shipped, has averaged
1,050,000,000 pounds, producing at the port of shipment an ave-
rage of $94,500,000 deducting from which, the inland expenses,
the planters might have received, probably, $80,000,000, with which
they could have purchased about 2,100,000 tons thus giving ten
pounds for a smaller quantity of iron, than, before, they could have
had for five.
The price of flour, prior to the opening of the Crimean war, was
lower, as, Mr. President, you have seen, than it had been for half a
century ; and less, by nearly one-half, than it had been in the period
from 1815 to 1825. In that period, the price of bar iron in Liver-
pool averaged about 10 ; or but little more than that of the past
four years the fluctuations in these latter having been between
7 10s. and 9 12s. Qd. The raw materials of labor food and
cotton not only do not approximate towards iron, but become
more widely separated from year to year.
Still more strongly is this the case, when we compare the prices
of food and cotton, with those of other metals. The raw mate-
rials, iron and lead, have fallen in actual price, but copper and tin
have both advanced, as will be seen by the following figures, de-
rived from the work of Mr. Tooke, before referred to :
1782 to 1791. 1829 to 1838.
Copper per cwt. 4 la. 2d 4 8s. Id.
Tin per cwt. 413 4 4 10
Lead per 19 cwt. 19 3 18 300
Turning next to the year 1852, at which time flour had fallen
to little more than a third of the price at which it sold in the
period from 1810 to 1815, we find that the average prices had still
further advanced copper having been 4 18s. tin, 4 fs.
and lead, 11.
The whole value of these metals, is in the labor given to their
extraction. That labor is the product of food and clothing
of corn and wool. The foreign raw materials, of which British
labor is composed, are perpetually falling in price, while highly
important commodities, received by the foreign producers in ex-
change, as regularly rise ; and that being the direct road to-
wards centralization, barbarism, and slavery, we may now readily
understand the causes of the existence of the extraordinary demo-
ralization now in progress among ourselves. The road to free-
dom and civilization, lies in a direction precisely the opposite
of that which, thus far, has been pursued. That road is, under
the lead of France, being travelled by all the advancing nations
of Europe, and hence the improvement that becomes from day to
48 LETTERS TO THE
day more manifest in the growing harmony of all the various
interests of which society is composed. The contrary road is,
under the guidance of England, travelled by Ireland and India,
Portugal and Turkey, as well as these United States ; and hence
it is, that in all of them we see an increasing centralization and a
constantly growing discord. Hence, too, it is, that in the land
whence issued the Declaration that all men were born equal, it is
now openly declared that "free society has proved an utter failure,"
and that bondage is the natural condition of the man who labors,
be he white or black.
The history of the Union, Mr. President, is an enigma our
words having been those of civilization and freedom, while our
tendencies, with only occasional intervals, have been in the di-
rection of slavery and barbarism. That such has been the case,
was obvious to yourself, when you told your fellow-citizens, in
your recent message, that, "for more than forty years, the history
of the country has been one of extravagant expansions in the
business of the country, followed by ruinous contractions. At
successive intervals," as you continued, "the best and most enter-
prising men have been tempted to their ruin by excessive bank
loans of mere paper credit, exciting them to extravagant importa-
tions of foreign goods, wild speculations, and ruinous and demo-
ralizing stock-gambling."
That such, Mr. President, have been the facts, cannot well be
questioned. "At successive intervals," we have abandoned the
policy whose admirable effects in reducing the cost of transporta-
tion, and thus diminishing the taxation of the farmer and the
planter, were so well illustrated by Adam Smith, when he showed
how cheaply the cotton and the wool could be carried to the re-
motest parts of the earth, after having been combined in the form
of a piece of cloth; and, in each and every one of those periods,
we have seen precisely the phenomena you so well describe.
Numerous banks having, then, been created, we have had "extra-
vagant expansions," followed by "ruinous contractions." Enor-
mous importations of foreign goods have been followed by the
wildest speculations, and by the most "ruinous and demoralizing"
gambling in stocks and public lands. At other intervals, ajl this
has disappeared the societary movement having become so quiet
and tranquil, that successive years have passed without the
slightest speculation. Inquiring, now, what have been those
years, we find them to have been those in which the policy of the
country being in accordance with the ideas of Adam Smith
tended towards relieving the planter and the farmer from the
tax of transportation.
Such, Mr. President, having been the uniform results of change
in the policy of the central government, the solution of the enigma
may, as it- appears to me, be found by any one who will carefully
study the following simple proposition : Barbarism grows in the
PRESIDENT OF THE UNITED STATES. 49
ratio of the export of the rude products of the land, and conse-
quent exhaustion of the soil. Civilization grows in the ratio of
the ability to diminish the bulk of the products of the plantation
and of the farm, and to restore to the soil the refuse of its pro-
ducts thus augmenting the productive power of the land, and
enabling more and more people to live together. In which of
these directions we are to move, is dependent, Mr. President, upon
the central government, and not upon the local ones, as you have
seemed to think. Such being the case, it must be to modification
in the action of the former, we must look for a diminution of these
barbaric tendencies, to whose existence you have so properly
called the attention of your constituents. That modification
once obtained, each successive day will tend to add to our admi-
ration of the men who, when employed in making the Constitution,
so wisely left to the States the regulation of their local institu-
tions, whether engaged in converting wool and food into cloth,
or in aiding the exchanges of those who desired to borrow money,
with those who had money to lend.
Trusting that you will become convinced of this, I remain,
Mr. President,
Yours, very respectfully,
HENRY C. CAREY.
Philadelphia, January Sth, 1858.
50 LETTERS TO THE
LETTER TENTH.
CIVILIZATION, Mr. President growing with the growth of
wealth is indicated by improvement in the condition of man.
Our condition, natural, moral, and political, having much dete-
riorated within the last few years, it is needed that we seek the
causes of the change, which must be found in diminution of our
wealth.
Wealth, Mr. President, consists in the power to control and
direct the forces of nature resulting, first, from the possession of
the necessary machinery, and next, from the possession of the
knowledge how to guide it. The coal that is mined by a single
man, is capable of doing as much work, as could be done by
thousands of human arms. The power of steam employed in
Great Britain, is estimated as being equal to the united forces
of 600,000,000 of men; and yet, the total number of persons
employed in the coal-mines of that country, is but 120,000,
two-thirds of whom must be engaged in furnishing fuel for the
smelting' of ore, for the rolling of iron, and for household and
other purposes. The entire population of the island, in 1851, was
under 21,000,000, each one of whom, were the power thus acquired
equally divided, would have the equivalent of nearly thirty willing
slaves employed in doing his work slaves, too, requiring neither
food, clothing, nor lodging, in return for the service thus performed.
Admitting that even so large a number as 60,000, were employed
in the extraction of the fuel by which this power is supplied, it
would give but 1 in 350 of the population, and less than 1 in 200
of those who are capable of doing a full day's work. Such being
the case, we obtain the remarkable result that, by means of com-
bination of action, less than one-half of one per cent, of the adult
population, is enabled to furnish fifty times more power than
could be supplied by the whole number, were each man laboring
by himself.
To enable this fuel to do the work, it is, however, required, that
man should play the part of engineer substituting mental power
for the physical force, that would otherwise be required. The engi-
neer must have his engine, and for the production of engines there is
needed a portion of the labor that, by their use, is to be economized.
How small, however, is the proportion thus required, is seen from
the fact, that the whole number of steam-boiler makers in Great
Britain, in 1841, was but 3479 ; and, as the total number of per-
sons engaged in making steam-engines cannot be ten times greater,
we thus obtain less than 35,000 as being so employed. Adding
now together the miners and engine-makers, we obtain less than
100,000 as the total human force given to the development of a
PRESIDENT OF THE UNITED STATES. 51
natural one equal to 600,000,000 the physical force of each
being, thus, by means of association and combination, multiplied
no less than six thousand times.
Of all the communities of the world, there is none, Mr. President,
at whose command has been placed an amount of power, at all to
be compared with that of our Union the quantity of fuel within
their reach being, practically, as unlimited as is the air we breathe.
It underlies a large portion of Pennsylvania, Maryland, Virginia,
and North Carolina, while, throughout the regions of the West,
it so much abounds as, in a great majority of cases, to be wholly
valueless. So, too, with the material of which steam-engines are
composed iron ore the supplies of which are boundless in
extent, and waiting only for the moment when we shall deter-
mine to appropriate them to our use, and thus acquire wealth.
To what extent it might be so acquired, is shown by the fact, that
a single hundred thousand men, in Britain, furnish power, equal
to more than sixty times the mere muscular force of the whole
adult male population of the Union.*
To produce, among ourselves, the same effect, it is required,
only, that we adopt the same measures that have there resulted
in such a wonderful increase of force ; and thus do we arrive at
the great fact, that by means of the proper direction of the labors
of the one-hundredth part of the adult population of the Union,
the power, or wealth, of the whole, might, in a brief period, be
twenty times increased each and every person, were the whole
equally divided, being thus supplied with twenty slaves employed
in furnishing fuel and food, clothing and lodging, while consuming
no part, whatsoever, of the products of their labor.
The treasures of nature are boundless in extent, the earth being
a great reservoir of wealth and power requiring for their full
development only the carrying into full effect the idea expressed
by the magic word, ASSOCIATION. That such is the fact, is seen
in every case in which, because of local circumstances, our
people find themselves enabled to combine their efforts for the
* The question may, with great propriety, be asked "If power really is
wealth, why is it that the people of England, with such a wonderful amount
of wealth at command, are so poor as to have given rise to the idea of over-
population ? " The answer is, that all this power is being wasted in the
effort to prevent the other communities of the world, from acquiring similar
power, or wealth. While laboring to cheapen the labor and raw materials
of the exterior world, she is enslaving the people of all countries subject to
her influence, and thus producing the enslavement of her own. The harmony
of interests being everywhere perfect, therefore it is, that every measure
tending to deprive the Hindoo of the power to sell his labor, tends equally
to lessen the ability of the British laborer to obtain food for his family and
himself. Action and re-action are equal and opposite the ball which stops
the motion of another ball, being stopped itself. This is a great physical
law, whose truth is obvious throughout the whole range of social science.
Common sense, common honesty, and sound policy, look always in the same
direction.
52 LETTERS TO THE
accomplishment of some common object. Combination of action
furnishes to every resident of New York, Philadelphia, or Boston,
a slave employed in supplying him with water, or with light, at a
cost so trivial as to be utterly insignificant, when compared with
what it would be, were he obliged to live and labor alone, as did
the emigrants of the days of William Penn. Combined effort
enables us to pass from the shores of the Atlantic, to the banks
of the Mississippi, in fewer hours, and at less expense, than
but a few years since, were required for going from New York to
Washington. To such effort it is due, that every child is supplied
with instruction, such as would be wholly unattainable by the soli-
tary settler. Combination of effort furnishes Bibles at a price so
small, as to place them within the reach of the poorest person in
the Union ; and it supplies, for two cents, a better newspaper than
could, but a few years since, have been purchased at any price.
To combination it is due, that the man of New Orleans can com-
municate on the instant with his friend in Philadelphia thus
annihilating both time and space.
Look where we may, Mr. President, we find new proofs of the
advantage to be derived from association ; and yet men are every-
where seen flying from their homes, and leaving behind them wives
and children, parents and relatives each one seeming desirous, as
far as possible, to be compelled to roll his own log, build his own
house, and cultivate his lonely field ; and thus deprive himself of all
the benefit necessarily resulting from combination with his fellow-
men. In the passage to his solitude, he traverses immense plains
abounding in the fuel by whose consumption he would so much
increase his wealth and power preferring, apparently, to continue
to confine himself to the use of his arm, when, by calling nature to
his aid, he might be enabled to substitute the qualities of his head
for those of his arm, and pass from the labors of the ox to those
Of THE MAN.
In no country of the world, is there so great a voluntary waste of
power as in these United States. In Ireland and India, in Turkey
and Portugal, a similar waste takes place, but in none of these,
is there even a pretence that the people direct their own course of
action. Here, the reverse is the case, every man being supposed
to constitute a portion of the government, and to aid in so directing
its action as to enable him and his neighbors most to profit by the
gifts of Providence ; yet, here it is, that men are most disposed
to separate themselves, each and every one from each and every
other thus forfeiting all the advantages, that are elsewhere
seen to result from the substitution of the natural forces, for those
of the human arm. The waters of Niagara, capable of doing the
work of millions of men, are allowed to run to waste ; and the
coal-fields of Illinois, that, with the slightest effort, might be made
to perform a hundred times more labor than is now performed by
PRESIDENT OF THE UNITED STATES. 53
all the people of the Union, are held in almost as light esteem as
would be a similar quantity of gravel, or of sand.
Domestic commerce tends to the development of the treasures
of the earth to the utilization of every particle of the matter of
which our planet is composed to the development of human
power to diminution in the value of the commodities required
for the support of man and to augmentation in his own value,
and in that of the land upon which he is placed. At every stage
of its progress, local centres acquire a larger attractive power
the mill, the mine, the furnace, the rolling-mill, and the grist and
cotton mills, becoming the places of exchange, and thus diminish-
ing the necessity for resorting to the trading cities of the world.
The man whose labors have been given to the production of wheat,
is thus enabled to exchange directly with one neighbor who con-
verts wheat into flour, and another who has changed coal and
ore into iron ; with one who has converted wool into cloth, and
another who has made rags into paper at once economizing the
cost of transportation, and obtaining the intellectual commerce
required for enabling him to pass from the cultivation of the poor,
to that of the richer soils.
The desires of the trader look in an opposite direction tend-
ing, everywhere, to prevent the creation of local centres, and thus
to increase the necessity for resorting to the great central cities
of the world. Every stage of his progress towards power is,
therefore, attended by an increase in the tax of transportation,
and a diminution in the power of man with constantly increasing
exhaustion of the soil, requiring resort to new lands, to be in their
turn exhausted.
According to an eminent French economist, this country is,
like Poland, specially dedicated to agriculture, to the exclusion
of manufactures. Such, too, having been the opinion of some
of those persons who most have influenced the action of the cen-
tral government, the result is seen in an universal impoverishment
of the soil, and of its owners, because of the enormous tax of trans-
portation to which they have been subjected. According to these
gentlemen, the raising of raw produce is the chief pursuit of man,
and yet, small reflection could be required for satisfying them,
that the raising of wheat was but one of the steps towards the
making of bread ; and that the raising of cotton was but a stage
in the process of producing cloth cloth and bread, and not wheat
or wool, being the commodities required for his use. Men perish
of cold where trees most abound, because of the absence of the
saw, or the axe ; and other men go naked, though surrounded by
plants yielding cotton, because of their distance from the spinning-
jenny and the loom. Man is placed on this earth to subject the
forces of nature to his service compelling her to yield the com-
modities required for his use, and in exchange for the smallest
54 LETTERS TO THE
possible amount of human effort. That that otject may be accom-
plished, he is required to combine his efforts with those of his
fellow-men the farmer, the miller, and the baker, uniting for the
production of bread ; the shepherd, the spinner, and the weaver,
uniting for the production of cloth. The more perfect that
union, the less is the waste of labor in transportation and in effect-
ing exchanges, and the greater the power to improve the land
already occupied, while extending the work of cultivation over the
richer soils as is now being done in France, Denmark, Germany,
and other of the advancing countries of Europe. The less the
power of combination, the greater is the tendency to exhaustion
of the soil, as is seen to be the case in Poland and Ireland,
Turkey and Portugal, Jamaica and India, and every other country
that, like the United States, gives itself, almost exclusively, to the
work of scratching the earth. Of all the raw material required
for the purposes of man, manure is the most important, and the
least susceptible of transportation to a distance ; and therefore is
it, that poverty, depopulation, and slavery, are the necessary
consequences of the reduction of a community to dependence on
the single species of effort required for compelling the earth to
yield the raw material of clothing, or of food. Throughout the
larger portion of the Union, the market is distant hundreds and
thousands of miles, and the consequences are seen in the fact, that
the soil is becoming almost everywhere exhausted wealth thus
diminishing, when it should increase.
How it diminishes, has recently been shown by an eminent agri-
culturist, from whom we learn :
That, the potash and phosphoric acid annually taken from the
land, is worth, at the usual market price of these commodities,
nearly $20,000,000 scarcely any of which is ever returned :
That, the ashes of 600,000,000 of bushels of corn are annually
taken from the soil scarcely any of which are ever returned :
That, the total annual waste of the mineral constituents of food,
is "equal to 1,500,000,000 bushels of corn."
" To suppose," says the author of these estimates "to sup-
pose that this state of things can continue, and we, as a nation,
remain prosperous, is simply ridiculous. We have as yet much
virgin soil, and it will be long ere we reap the reward of our
present improvidence. It is merely a question of time, and time
will solve the problem, in a most unmistakable manner. What
with our earth-butchery and prodigality, we are each year losing
the intrinsic essence of our vitality.
" Our country has not yet grown feeble from this loss of its
life-blood, but the hour is fixed when, if our present system con-
tinue, the last throb of the nation's heart will have ceased, and
when America, Greece, and Home, will stand together among the
ruins of the past.
PRESIDENT OF THE UNITED STATES. 55
"The question of economy should be, not how much do we
annually produce, but how much of our annual productions is
saved to the soil. Labor employed in robbing the earth of its
capital stock of fertilizing matter, is worse than labor thrown
away. In the latter case, it is a loss to the present generation
in the former, it becomes an inheritance of poverty for our suc-
cessors. Man is but a tenant of the soil, and he is guilty of a
crime when he reduces its value for other tenants who are to come
after him."
Waste, such as is here described, Mr. President, is a crime, and
it finds its punishment in the natural, moral, and political decline,
to which your attention has now been called. Look, almost,
where the traveller may, he is struck with the wretched condition
of that which, in this country, is called agriculture but which,
in the civilized countries of Europe, would be denominated pure
and simple robbery of the great bank, given by the Creator for
the use of man. Its effects are shown in the facts, that, in New
York, where, eighty years since, 25 to 30 bushels of wheat wer* 1
an ordinary crop, the average is now only 14, while that of Indian
corn is but 25. In Ohio, a State that, but half a century since,
was a wilderness, the average of wheat is less than 12 ; and it dimi-
nishes, when it should increase. Throughout the West, the pro-
cess of exhaustion is everywhere going on the large crops of the
early period of a settlement, being followed, invariably, by smaller
ones in later years. In Virginia, throughout a large district of
country once considered the richest in the State, the average of
wheat is less than seven bushels ; while in North Carolina, men cul-
tivate land yielding little more than that quantity of Indian corn.
Tobacco has been raised in Virginia and Kentucky, until the
land has been utterly exhausted and abandoned ; while through-
out the whole cotton-growing country, we meet with a scene of
exhaustion unparalleled in the world, to have been accomplished
in so brief a period. The people who raise cotton and tobacco
are living upon capital selling their soil' at prices so low, that
they do not obtain one dollar for every five destroyed ; and as
man is* always a progressive animal, whether his course be up-
ward or downward, we may now readily understand the cause
of the steady and regular growth of that feeling which leads to
regarding bondage as being the natural condition of those who
need to sell their labor. The supremacy of trade leads necessa-
rily to such results ; and, as the whole energies of the country are
given to the enlargement of the trader's power, and to the aug-
mentation of the tax of transportation, it is no matter of sur-
prise that its people are everywhere seen to be employed in
" robbing the earth of its capital stock." Let the existing system
be continued, and "the hour is surely fixed," when, in the words
of the writer quoted above, "America, Greece, and Rome, will
stand together among the ruins of the past."
56 LETTERS TO THE
Allow me now, Mr. President, to call yonr attention, once again,
to the diagram given in a former letter. Looking at it, you find,
at the left, production small, and the prices of the ruder products
of the earth, very low indeed. Passing towards the right, you
find, in Massachusetts, production larger, and prices higher the
farmer obtaining a greater number of bushels, and, for each bushel,
a larger quantity of money. That is the road towards the im-
provement in manners and morals, to which we attach the idea
of civilization. The contrary road from the right to the left
is the one which leads to that state of demoralization, to which
we attach the idea of barbarism the products of the earth then
diminishing in quantity, with steady decline of prices. This last,
Mr. President, is the road which, under the guidance of the cen-
tral government, we are travelling ; and therefore it is, that each
successive year brings with it new attacks upon the local powers,
and new increase of the central power, with constant decline in
the respect for the Constitution, and in the regard for individual
rights. Men, Mr. President, become free, and communities rise
in the estimation of the world, in the ratio of their development
of a real agriculture. Both deteriorate in the ratio in which
they find themselves driven to the work of robbing the soil.
This I propose to show in another letter remaining, meanwhile,
Yours, very respectfully,
HENRY C. CAREY.
Philadelphia, January \lth, 1858.
PRESIDENT OF THE UNITED STATES. 57
LETTER ELEVENTH.
.
ALL raen, Mr. President, desire to maintain commerce with
each other exchanging ideas and services, or commodities, in
which those services are embodied. Some men desire to be
employed in effecting exchanges for other men standing be-
tween them, in the various capacities of sailor and wagoner,
trader and transporter, all of whom are merely instruments to be
used by commerce.
The greater the diversity in the employments of society, the
greater is the power to maintain commerce, and the less is the
necessity for the use of the instruments above referred to the
greater is the tendency towards increase in the productiveness of
the soil the larger is the return to agricultural labor the higher
are the prices of the rude products of the land the cheaper
become those finished commodities required for the use of the
farmer and the greater is the tendency towards that improve-
ment of human condition, to which we are accustomed to attach
the idea of civilization.
The less, Mr. President, the diversity of employments, the
greater is the necessity for the services of the ship and the wagon,
the trader and transporter the less is the commerce the
greater is the tendency towards exhaustion of the soil the
smaller is the return to agricultural labor the lower are the
prices of the rude products of the land the dearer are clothing,
knives, axes, and other finished products and the greater is the
tendency towards that deterioration of man's condition to which
we are accustomed to attach the idea of barbarism.
The great fact is thus presented to us, that where the land
yields most largely, there the prices of the products of the farm
are highest ; whereas, where it yields 'least in quantity, there the
prices are lowest. In Germany and Prance, the yield of the
land is steadily increasing, while prices regularly advance. In
this country, the yield decreases, while prices as steadily decline.
Hence it is, Mr. President, that the phenomena presented to view
by French and German society, are those of growing civilization ;
while those we meet among ourselves, are those of advancing
barbarism.
Approximation in the prices of the rude products of the earth,
and of the finished commodities required for human purposes, is,
Mr. President, the most conclusive proof of growth in civilization.
The more nearly they come together, the more does society
tend to assume its natural form the greater is the tendency
towards steadiness and regularity of movement and the more
rapid is the advance in wealth, and power. The more they recede
58 LETTERS TO THE
from each other, the more does society tend to take the form of
an inverted pyramid, the less is the regularity of movement, the
greater is the tendency towards barbarism, and the more rapid is
the decline in wealth and power. With us, as you have seen, those
prices do recede more cotton and more flour being, as a rule,
required to pay for any given quantity of iron, copper, tin, or
lead the most essential of the commodities required for advance
in civilization than was needed, for that purpose, half a cen-
tury since.
The closer that approximation, the greater is everywhere the
tendency to increase in the productiveness of the soil with
growing power of association and combination. The more re-
mote they are, the greater is the tendency towards exhaustion of
the soil, with declining power of combination. Throughout the
Union, that power is declining ; and thus are we presented with
another of the phenomena which, everywhere else, have attended
declining civilization.
The more the soil becomes enriched, the greater is its power
of attraction, the more rapid is the growth of commerce, and the
more civilizing are the tendencies of the time. The more it is
impoverished, the greater is its repulsive power, the slower be-
comes the movement of society, and the more rapid is the decline
of civilization. With us, Mr. President, as you have seen, the
attractive power of the soil diminishes, and men are almost every-
where flying from each other, as if from pestilence the enormous
emigrations of the barbarous ages of Europe being here repro-
duced, and affording conclusive evidence of decline in wealth,
strength, and power. What are the lesser phenomena by which
decay is manifested, and how they influence the various portions
of society, we may now inquire.
At the return of peace in 1815, land was high in price a
market having been already made at home, for the most important
of its products. Protection being discontinued, that market dis-
appeared, and the result was seen, six years later, in the almost
universal ruin of the farmers judgments being everywhere en-
tered up mortgages being foreclosed sheriffs' sales abound-
ing to such an extent as, at length, to force the people of the
agricultural States to the adoption of laws for staying the execu-
tion of the judgments of their courts and land falling to a fourth
of the price at which it had sold, but seven years before. The
sales of public land, and the revenue therefrom, had trebled in
the period from 1814 to 1818-19 thus increasing the number
of farmers, at the moment when the market for their products was
gradually disappearing and thus preparing the way for that
decline in the price of the products of the farm, whose steady
progress is exhibited in the figures already, Mr. President, laid
before you.
By 1824, the land revenue had fallen to less than a third of the
PRESIDENT OF THE UNITED STATES. 59
amount at which it had stood in 1819. Thenceforward protec-
tion having been re-established it went gently up, until, in 1832
and 1833, it averaged $3,295,000 ; or, almost precisely the amount
it had so suddenly attained thirteen years before. In the mean
time, the population had increased about two-thirds ; and so
regular had been the increase in the home demand for food, that
now, for the first time in the country's history, its price was
wholly uninfluenced by the fall of foreign markets. From 1828
to 1831, wheat, in England, had been high averaging 3 4s. 3d.
per quarter, or $1.72 per bushel. From that period, it fell regu-
larly, until, four years later, it was but 1 19s. 4rf. , or $1.05 per
bushel ; and yet, the price of flour in the American ports remained
entirely unaffected ; as is shown by the following figures, derived
from a recent Treasury Report :
Average of 1828 to 1831 $5.84
1832 $5.87 1834 $5.50 \ K 79
1833 5.50 1835 6.00 /
The Compromise tariff having now, however, begun to operate,
mills ceased to be built, and importations rapidly increased. The
mechanic arts no longer affording an outlet for the growing popu-
lation, emigration to the West grew rapidly, accompanied by
enormous speculations in the public lands the speculator always
desiring to go in advance of the poor settler, and to profit at his
expense. The land revenue rose from $4,000,000 to $14,000,000,
and $24,000,000; after which, for four succeeding years, it ave-
raged $5,000,000 ; and thus, in six years, was more land disposed
of, than had been sold in the forty preceding ones. The conse-
quences were such as might have been expected. While the new
farms were being created, by help of labor diverted from the old
ones, food was scarce and high ; but by the time they were ready
to furnish supplies, their owners found their market had dis-
appeared. Land again falling in price, mortgages were fore-
closed ; and once again, were farmers, by tens of thousands, turned
adrift upon the world, to recommence their labors as they might.
We have here the second great stage of preparation, for the extra-
ordinary fall in the price of food that has been exhibited.
The land revenue now (1842) fell to little more than a single
million, from which point, under the protective tariff of that year
it rose gradually until, five years later, it stood again at $3, 000, 000.
Soon after, the discovery of the treasures of California came in to
make demand for manufactures, and to give activity to commerce.
So long as that activity continued, the sales of public lands
continued small, but now the building of mills and furnaces
having ceased the revenue from that source, in the three years
ending with 1856, had attained an average of nearly $10,000,000.
If to this, be added, the sales of land granted to railroad com-
panies, we obtain a total for those years of at least $50 000,000 ;
60 LETTERS TO THE
or twice the amount of the twelve years from 1840 to 1852.
Those sales are an index to the exhaustion of the soil, the dis-
persion of the people, the decline of commerce, and the growth
of the power of the trader ; and as those of 1818 were followed
by the agricultural ruin of 1821, and those of 1836 by the ruin
of 1841, so must those of 1854-56 be followed by similar effects,
at a period that is now but little distant. As a rule, the highest
prices have always been followed by the lowest ones those of
the free trade period of 1822 having followed those of the protec-
tive one of 1816 the ruinous prices of 1842 and 1843 having
followed those of 1837 and 1838 and the exceedingly low one
of 1852 having followed closely upon the elevated ones of 1847
and 1848. With each successive crisis, too, the price established
at its close, has been lower than that of previous periods. As yet,
1852 occupies the lowest place; but the day is fast approaching,
Mr. President, when, should Heaven smile upon the labors of our
farmers, they will look with regret, even to the low prices of the
years from 1850 to 1852. The more they exhaust the soil, the
greater will be the tendency towards decline of price.
Instability and irregularity being the essential characteristics
of barbarism, there can be no real agriculture where they are
found. The farmer, more than any other member of the community,
requires stability his investments being generally made a year,
or more, in advance. The trader buys flour one day, and sells it
on the next ; but the farmer needs to determine in the autumn,
in what manner he will appropriate his land, for the year to come.
The price of wheat falling and that of tobacco rising, he can
make no change ; but the trader can selling the one at the first
appearance of a downward movement, and buying the other at
the first appearance of an upward one. The skilful trader desires
change, and the more frequent its recurrence, the more numerous
are his chances for accumulating fortune ; but instability is ruinous
to the farmer and the planter. The objects of the farmer and
trader are, thus, widely different ; and yet the former appears most
generally before the world as the advocate of his own subjection
to the dominion of trade, and as the opponent of the policy that
is based upon the idea of the extension of domestic commerce, and
consequent emancipation of his land from the oppressive tax of
transportation. Hence it is, that we meet with those conclusive
evidences of declining civilization which are, in one part of the
Union, supplied by the growing belief in the divine origin of
slavery, and in the necessity for its continuance ; and in the other,
by the facts, that in the older States, property in land becomes
more consolidated ; that in all of them, the poor rent-paying
tenant is taking the place of the small proprietor ; that, almost
everywhere, exhaustion of the soil is proceeding with accelerated
rapidity ; and that men are, everywhere, more and more com-
pelled to relinquish the advantages of that combination with their
PRESIDENT OF THE UNITED STATES. 61
fellow-men, to which, alone, they can look for the power to call
the great forces of nature to their aid.
The coal-miner, the smelter of ores, the cotton and woollen
manufacturer, and all others engaged in the work of production,
are, Mr. President, like the farmer in the fact that they need
stability and regularity giving a steady circulation of labor and
its products, and increasing their ability to add to the machinery
required for their operations. That having been obtained, they
are enabled, in each successive year, to profit by the experience
of the past, and to give to the farmer a constantly increasing
quantity of cloth, in exchange for a constantly diminishing quan-
tity of food and wool the prices of the two tending steadily and
regularly to approach each other. That stability, and that regu-
larity of circulation, have, however, been to the people of the
United States, things entirely unknown. At times, as in the two
periods ending in 1835 and 1847, it has been approached, but,
in every case, it has proved but a mere lure, for inducing men
of skill and enterprise to waste their fortunes, and their time, in
the effort to advance the interests of the community, with ruin to
themselves.
From 1810 to 1815, mills and furnaces were built, but with
the return of peace, their owners embracing large and small
capitalists, working-men and others, the most useful portions of
the community were everywhere ruined, and the people who
had been employed were turned adrift, to seek in the West the sup-
port they could no longer find at home. Land sales then, as we
have seen, became large, and, next, the farmer suffered as the
manufacturer had done before. From 1828 to 1834, such esta-
blishments were again erected, and the metallic treasures of the
earth were being everywhere developed ; but, as before, the pro-
tective system was again abandoned, with ruin to the manufac-
turer, accompanied by enormous sales of public land, and fol-
lowed by ruin to the farmer. From 1842 to 1847, mills and
furnaces were again constructed ; and then, from 1848 to 1850,
they were again closed; the effect being seen, in 1850-52, in
the fall of flour to a price lower than had ever before been known.
The perfect harmony of all true interests, and the absolute neces-
sity for protection to the farmer, in his efforts to bring the artisan
to his side, and thus relieve himself from the heavy taxation to
which he is now subjected, are here exhibited in the strongest
light. No one, who studies the regular sequence of these facts,
can hesitate as to full belief in that portion of the doctrine of
The Wealth of Nations, which teaches, that the English system,
based as it is upon the idea of cheapening all the raw materials
of manufacture, " is a manifest violation of the most sacred rights
of mankind."
In the last ten years, few mills or furnaces have been erected
the yalue of those iu existence having been, in general, so far
62 LETTERS TO THE
below the cost of production, as to have afforded no reason for
making any addition to their number.
The history of industry in no civilized country of the world
presents such a scene of destruction as is found in the manu-
facturing, mining, and railroad operations of the Union. Of
all the persons concerned in making those great improvements
required for diminishing the distance between the consumer and
the producer for enabling the producers of wool, flax, and food
readily to exchange for cloth and iron and for reducing the
prices of manufactured commodities, while raising those of the
raw products of the earth a large majority have been ruined;
and the result is seen in the facts, that the various metals are
rising in price, as compared with flour and cotton that our
farmers, as a rule, are poor that, with each successive year, the
land is being more rapidly exhausted and, that the country
exhibits so many other evidences of declining civilization.
Careful study of these facts, Mr. President, will enable you,
readily, to understand the causes of the demoralization now
making such rapid progress. The policy of the country be-
ing wholly adverse to the growth of manufactures, agriculture
remains, and necessarily, in its rudest state offering no attrac-
tion for men of any cultivation. Seeking a pursuit, our young
men shrink from one that involves so large an amount of labor,
and is so badly paid. Looking, next, to the production of iron,
or the manufacture of cloth, they see that most of the men who
have been so engaged, have reaped but ruin as the result. Thus
limited in their choice of employments, they find themselves driven
to becoming clerks, traders, lawyers, or doctors ; and the conse-
quences are seen in the fact, that we have five times more traders,
lawyers, and doctors, than can obtain a living by any honest
means. All, however, must live honestly if they can, but dis-
honestly if they must ; and hence it is, that the race of sharpers
and blacklegs, speculators and swindlers, slave traders and filli-
busters, counterfeiters and peculator's, increases with such rapidity.
It is safe, Mr. President, to say, that with the present policy of the
central government is inseparably connected, a greater develop-
ment of the merely appropriative powers, and a greater tendency
towards decline in the security of person and property, than can
be found in any country of the world, claiming to be held as
civilized.
This is a sad picture, Mr. President, but that it is a true one,
you have abundant evidence in the proceedings of the world
around you.
Yours, very respectfully,
HENRY C. CAREY.
Philadelphia, January 13th, 1858.
I
PRESIDENT OF THE UNITED STATES. 63
LETTER TWELFTH.
" THIRTY-ONE independent States, enjoying a thousand advan-
tages, are mutually engaged in a free trade with each other.
That, is the free trade we want!" Such, Mr. President, was
the most accurate view of the great and pressing ' ' want " of
your countrymen, presented by yourself, but a few years since.
Seeing most clearly, as you then did, the enormous amount of
taxes paid by our farmers, in the form of transportation, commis-
sions, and other charges the necessary consequence of depend-
ence upon distant markets it was to you most obvious, that
what they really needed was, commerce among the States com-
merce within the States commerce in towns and villages that
commerce which, in other countries, enables men to exchange
with each other, ideas, services, and products, with little charge for
intermediate agency ; and thus to emancipate themselves, almost
entirely, from the grinding taxes of trade and transportation.
What, however, is it, that has given to those thirty-one States
the power to maintain any commerce whatsoever ? Is it not,
Mr. President, a consequence of diversity in their modes of
employment, resulting from the fact, that, while one portion of
the country is fitted for raising cotton or sugar, others are better
suited to raising wheat, rice, corn, barley, or grass that while
the soil of one is underlaid with coal, that of others is underlaid
with lead or copper, marl or lime ? That such is the case, is
beyond all doubt. That without difference there can be no
commerce, is shown by the facts, that the cotton planter of Caro-
lina maintains no commerce with his fellow planter of Georgia,
and that the farmer of Illinois makes no exchanges with his
fellow farmer of Indiana.
What, however, is the actual amount of commerce among the
States ? How much does Kentucky exchange with Missouri ?
What is the annual value of the commerce of Ohio with Indiana
of Virginia with Kentucky ? Scarcely more, as I imagine, than
that of a single day's labor of their respective populations; and,
perhaps, not even half so much. Why, Mr. President, is this
the case ? Is it not a necessary consequence of the absence of
that diversity of employments within the States, which we see,
everywhere, to be so indispensable to the maintenance of com-
merce ? Assuredly it is. Ohio and Indiana have little more
than one pursuit that of scratching out the soil, and exporting
it in the form of food. Virginia and Kentucky have the same
pursuits selling their soil in the forms of tobacco and of corn.
Carolina and Alabama have the same pursuits ; and so it is
throughout by far the larger portion of the Union millions of
64 LETTERS TO THE
people being employed in one part of it, in robbing the earth of
the constituents of cotton, while in others, other millions are em-
ployed in plundering the great treasury of nature, of the constitu-
ents of wheat and rice, corn and tobacco, and thus destroying,
for themselves and their successors, the power to maintain commerce.
The commerce of State with State is, thus, Mr. President, but
small ; and the reason why it is so, is, that the commerce of man
with his fellow man, within the States, as a general rule, is so
exceedingly diminutive. Were the people of Illinois enabled to
develope their almost boundless deposits of coal and iron ore,
and thus to call to their aid the wonderful power of steam, the
internal commerce of the State would grow rapidly making a
market at home for the food produced, and enabling its producer
to become a large consumer of cotton. Cotton mills then grow-
ing up, bales of cotton wool would travel up the Mississippi, to
be given in exchange for the iron required for the roads of
Arkansas and Alabama, and for the machinery demanded for the
construction of cotton and sugar mills, in Texas and Louisiana.
That, Mr. President, as you so well have said, is the sort of
free trade that we really require. It grew with great rapidity, in
the period ending in 1816 that period in which the domestic
market absorbed so large a proportion of cotton that was pro-
duced. It died away, in the years that followed, from 1817
to 1824, when mills and furnaces were closed, and mechanics
were, everywhere throughout the country, suffering for want of
food. It grew again, in the period from 1824 to 1834, when
the product of iron rose to 200,000 tons, and thus enabled the
farmers of the country to double their demands for the products
of the plantation. It declined from 1834 to 1842 the period,
during which, the domestic production of iron, and the domestic
consumption of cotton, remained almost unchanged in quantity,
notwithstanding an addition of 25 per cent, to our population
It grew again, from 1842 to 1848 the domestic production
of iron having in that brief period almost quadrupled, while the
domestic demand for cotton doubled. It has now declined
the production of iron being less than it was five years since, and
the demand for cotton being, at this moment, not greater, prob-
ably, than it was in 1842, when our numbers were little more
than half as great as they are at the present hour.
We have now, probably, thirty millions of people, occupying
the thirty-one States, of which, Mr. President, you spoke ; and
yet, among them all, there is, at the present time, almost literally,
no commerce. The planter stores his cotton waiting for better
prices. For the same reason, the farmer houses his wheat and
his corn. Neither of them, therefore, is able to purchase cloth
or iron. The iron master, as a consequence, is forced to close
his furnace, and the maker of cloth closes his mill. Wages
ceasing to be paid, the owner of houses receives no rent. Houses
PRESIDENT OP THE UNITED STATES. 65
ceasing to be built, the unemployed mason and carpenter take
their places by the side of the already discharged workers in wool
and cotton, in coal and iron. Commerce thus perishes ; and this
it does, because our rulers, Mr. President, have been led to believe
that national wealth and power were to be obtained, as the results
of measures directly the reverse of those so plainly indicated by
yourself, at the opening of the Central railroad, but a few years
since. You, then, most clearly saw, that what we needed was, the
establishment of that entire freedom of commerce among ourselves,
that would enable each and every man to find, at the instant, a
purchaser for all his powers of body, or of mind ; and that, so far
as the system commonly called " free trade," tended to prevent
the growth of that commerce, it was precisely the sort of free-
dom that we did NOT want. A disciple in the school of Adam
Smith, you could not fail to agree with him in his estimate of the
vast advantage to be derived by the farmer from condensing
thousands of pounds of food and wool into a piece of cloth, and
thus diminishing the tax of transportation every step in that
direction tending towards diversifying employments, and thus ex-
tending domestic commerce, while greatly facilitating intercourse
with the distant nations of the world.
The greater the number of differences among men the
greater the diversity of demands for their various faculties the
greater, Mr. President, is the power to maintain commerce among
themselves. The greater the domestic commerce, the greater is,
always, the power to maintain commerce with distant people, and
the greater the tendency towards the growth of wealth and power.
For proof of this, we need only look to France that country of
Europe whose policy has most consistently been directed towards
the diversification of employments, and the extension of internal
commerce. Seeking, however, further evidence of this, you may
look to Belgium, Sweden, Denmark; and Northern Germany,
in all of which you will find a rapid extension of intercourse
with the world, as a necessary consequence of increasing power
for the maintenance of that domestic commerce, so well described
by you, Mr. President, as the sort of "free trade" that we really
need among ourselves. Looking, next, homeward, you at once
are struck with the great power of Massachusetts to maintain
commerce with New York and Pennsylvania, when compared
with the commercial relations of Virginia with Kentucky, or of
Carolina with Tennessee.
Look, however, where you may, you will nowhere find facts
more fully confirmatory of the accuracy of your views, than in the
commercial history of England, now the great apostle of the sort
of free trade that we do not require. A century since, she was
busily engaged in robbing her soil, and exporting it in the form
of raw materials, to be sold, and at the lowest prices, to the
manufacturing communities of the lower Rhine. The more the
5
66 LETTERS TO THE
soil became impoverished, and the less its yield, the lower, as,
Mr. President, you have seen, became the prices ; and hence arose
the boast among the German cities, that they bought from the
Englishman the skin of the fox for a groat, and then re-sold him
the tail for a shilling. Ridiculous as this may now seem, it is
precisely what we ourselves are doing selling flour by the ton,
and then buying it back again, in the form of cloth and iron, by
the pound selling cotton by the bale, and then buying it back
by the pennyweight and exhausting the soil in the effort, in this
manner, to obtain the little cloth and iron, we are able to consume.
Even then, however, a change of the English system was near at
hand. Efficient protection developing the cloth and iron manu-
factures soon gave the English farmer a market at home, and
thus created domestic commerce, the only solid foundation for a
great external one. Raw materials rose in price, while machines
and cloths were cheapened ; and thus was furnished the most
conclusive evidence, that the nation which would advance in wealth
and power, must adopt a policy looking to the emancipation of the
farmer from the tax of transportation, and to the approximation
of the prices of his rude products, and those of the finished com-
modities required for his use.
Turning now homewards, Mr. President, we find abundant evi-
dence of your perfect accuracy in looking to the extension of
domestic commerce, as furnishing the only sure foundation for
an extended intercourse with foreign countries, and as being,
therefore, the sort of free trade that we really need. From the
date of the passage of the act of 1816, by which the axe was laid
to the root of our then-rapidly-growing manufactures, the foreign
trade steadily declined, until, in 1821, the value of our imports
was less than half of what it had been six years before. Thence-
forward, there was little change until the highly protective act of
1828 came fairly into operation the average amount of our im-
ports, from 1822 to 1830, having been but 80 millions and the
variations having been between 96 millions in one year and 70 in
another. Under that tariff, domestic commerce grew with great
rapidity enabling our people promptly to sell their labor, and
thus to become large customers to the people of other lands, as
is shown by the following figures, representing the value of goods
imported :
1830-31 $103,000,000
1831-32 101,000,000
1832-33 108,000,000
1833-34 126,000,000
Here, Mr. President, is a steady and regular growth the last
of these years being, by far the highest, and exceeding, by more
than 50 per cent., the average of the eight years from 1822 to
1830. In this period, not only did we contract no foreign debt,
but we paid off the whole of that which previously had existed
Ihe legacy of the war of independence.
PRESIDENT OF THE UNITED STATES. 67
The Compromise tariff began now to exert its influence on the
societary movement stopping the building of mills and the open-
ing of mines, and thus lessening the power to maintain domestic
commerce. How it operated on that with foreign nations, is
shown in the facts, that the imports of 1837 went up to
$189,000,000, and those of 1838 down to $113,000,000 those
of 1839 up to $162,000,000, and those of 1840 down to
$107,000,000 ; while those of 1842 were less than they had been
ten years before. In this period, we ran in debt to foreigners, to
the extent of hundreds of millions, and closed with a bankruptcy
so universal, as to have embraced, individuals, banks, towns, cities,
States, and the national treasury itself.
That instability is the essential characteristic of the system
called free trade that one which, as you, Mr. President, have
so clearly seen, we do not want will be obvious on the most
cursory examination of the facts presented by the two -periods of
that system, through which we have thus far passed. From more
than $100,000,000, in 1817, our imports fell, in 1821, to
$62,000,000. In 1825, they rose to $96,000,000, and then, two
years later, they were but $79,000,000. From 1829 to 1834,
they grew steadily and regularly, but, no sooner had protection
been abandoned, than instability, with its attendant speculation,
re-appeared the imports of 1836 having been greater by 45 per
cent, than those of 1834, and those of 1840 little more than half
as great as those of 1836. Careful study of these facts, Mr. Pre-
sident, can scarcely fail to satisfy you, that the cause of all the
difficulties you have so well described, is to be found in the action
of the central government ; and that, it is in that direction, and
not to modification of the local action, we must look for remedy.
Once again, in 1842, protection was restored ; and once again,
do we find a steady and regular growth in the power to maintain
intercourse with the outer world, consequent upon the growth of
domestic commerce, as is shown in the following figures :
1843-44 $108,000,000
1844-45 117,000,000
1846-46 121,000,000
1816-47 146,000,000
Here, Mr. President, we find a constant increase of power to go
to foreign markets, accompanied by a constant decrease in the
necessity for resorting to them the domestic production of cot-
ton and woollen goods having doubled in this brief period, while
the domestic production of iron had more than trebled.
Ten years having elapsed since the tariff of 1846 became
fairly operative, we have now another opportunity for contrasting
the operation of the free trade that we do not want, with that
which we so much require. Doing so, we find the same instability
by which were characterised the periods which preceded the act
of 1824 that of 1828, and that of 1842 and on a larger scale.
68 LETTERS TO THE
In 1840-50, out imports were $178,000,000. In 1854, they were
$304,000,000. In 1855, 8200,000,000. In 1857, $360,000,000
and now, they are about to fall to $180,000,000, if not, even, to a
figure greatly lower.
That this must be so, will be obvious to those who study the
history of the past few years, and contrast the hundreds of mil-
lions of debt we' have created making an annual demand for
$30,000,000 for the payment of interest with the entire discredit
into which we have now so justly fallen. That it must be so, will
be clear to those who look to the facts, that, prior to the opening
of the Crimean war, the price of flour had fallen to a lower point
than had ever before been known that since that period, we
have driven millions of men to the creation of farms, that are now
about to deluge us with food that the number of persons en-
gaged in any department of manufacture, is less now, than it was
five years since that the power to purchase food is as steadily
declining, as the power to furnish it increases and that, with
favorable seasons, its future price must, certainly, be lower than
has ever yet been known. That it must be so, will be apparent
to those who look to the facts, that the cotton crop, in 1849, ex-
ceeded 2,800,000 bales that, since that time, the population of
the cotton-growing States has been almost a third increased
that the new lands are now becoming productive that the aug-
mentation of the crop is likely to be as great as it was, after
the last bankruptcy, in 1841, when the average was, suddenly,
forty per cent, increased that it is likely soon to reach
4,000,000 bales that the domestic market will now be 250,000
bales less than it has been in the past two years that the foreign
market will, therefore, be required to absorb at least a million of
extra bales that the farmers of Europe will find a reduction in
their power to purchase clothing, consequent upon the reduction
in the prices of our food that the demand tends thus to decline
as the supply tends to increase and, that all past experience
goes to show, that after each successive crisis, the permanent
average of prices has fallen below that which had been fixed by
its predecessor. The seasons may prove unfavorable, and crops
may prove small, but should Providence favor the planter with
liberal returns, he is likely to be more nearly ruined, than in any
period he yet has seen. Such being the facts in reference to the
future of our great staples, it is fair, Mr. President, to assume,
that the quantity of foreign merchandise we shall now import
will scarcely go beyond, even if it equal, $180,000,000.
How the facts above described have tended to affect the cur-
rency, I propose to show in another letter, remaining, meanwhile,
Yours, very respectfully,
HENKY C. CAREY.
Philadelphia, January 19th, 1858.
PRESIDENT OF THE UNITED STATES. 69
LETTER THIRTEENTH.
THE single commodity, Mr. President, that is of universal
request, is MONEY. Go where we may, we meet persons seeking
commodities required for the satisfaction of their wants yet
widely differing in their demands. One needs corn ; a second,
clothing; a third, books, newspapers, horses, or ships. Many
desire food, yet while one would have fish, another rejects the fish
and seeks for meat. Offer clothing to him who sought for ships,
and he would prove to have been supplied. Place before the
seeker after silks, the finest lot of cattle, and he will not purchase.
The woman of fashion rejects the pantaloons ; while the porter
regards her slipper as wholly worthless. Of all these people,
nevertheless, there would not be found a single one, unwilling to
give labor, attention, skill, houses, bonds, lands, horses, or what-
ever else might be within his reach, in exchange for money pro-
vided, only, that the quantity offered were deemed sufficient.
Were a hundred ships to arrive at our several ports to-morrow,
a single one of which was freighted with gold, she alone would
find a place in the editorial columns of our journals leaving
wholly out of view the remaining ninety-nine, freighted with silks
and teas, cloth and sugar. The news, too, would find a similar
place in almost all the journals of the Union, and for the reason,
that all their readers, the bears excepted, so much rejoice when
money comes in, and so much regret when it goes abroad. Of
all the materials of which the earth is composed, there are none
so universally acceptable as gold and silver none, in whose
movements so large a portion of every community feels an
interest.
Why, Mr. President, is this the case ? Because of their having
distinctive qualities that bring them into direct connection with
the distinctive qualities of man facilitating the growth of asso-
ciation, and promoting the development of human powers. They
are the indispensable instruments of society, or commerce!
That they are so, would seem to be admitted by those journal-
ists when giving to their movements so much publicity ; and yet,
on turning to another column, you would probably find it there
asserted, that all this anxiety in regard to money was evidence
of ignorance man's condition being improved, by parting with
gold that he can neither eat, drink, nor wear, in exchange for
sugar that he can eat, and cloth that he can wear. Such may be
the case, says one reader, but, for my part, I prefer to see money
come in, because when it does so, I can borrow at six per cent. ;
whereas, when it is going out, I have to pay ten, twelve, or
twenty. This is doubtless true, says another, but I prefer to see
70 LETTERS TO THE
money arrive being then able to sell my hats and shoes, and to
pay the people who make them. It may be evidence of ignorance,
says a third, but I always rejoice when money flows inwards, for
then I can always sell my labor ; whereas, when it flows outwards,
I am unemployed, and my wife and children suffer for want of
food and clothing. Men's natural instincts look, thus, in one
direction, while mock science points in another. The first, Mr.
President, should be right, because they are given of God. The
last may be wrong being one among the weak inventions of
man. Which is right, we may now inquire.
Of all the commodities in use among men, there is none the
control of which gives to its possessor so large an amount of
power, as that of money. Sovereigns in the East heap up gold
as provision against future accidents ; and finance ministers in
the West, rejoice when their accounts enable them to exhibit a
full supply of the precious metals. When it is otherwise, the
highest dignitaries are seen paying obsequious court to the Roth-
schild and the Baring, controllers of the money market. So, too,
when railroads are to be made, or steamers to be built. Farmers
and contractors, land-owners and stockholders, then go, cap in
hand, to the Croesuses of Paris and London, anxious to obtain a
hearing and desiring to propitiate the man of power by making
whatsoever sacrifice may seem to be required.
Of all the questions, Mr. President, that are now before us,
there is none that so much occupies the public mind, as that of
the establishment of the currency on such a basis, as will secure
us against future repetition of the "extravagant expansions" and
"ruinous contractions, " that have, in each and every case, attended
the departure of the central government from the course of policy
you so much admire the course which looks to giving us that
freedom of domestic intercourse, from which we have been so much
debarred. How great, in your opinion, is the importance of this
question, is clearly indicated, as well by the fulness with which
you have treated it in your Message, as by your suggestions in
reference to the remedies that, as you seem to think, may be
required for the correction of the evils under which we suffer.
Prior to the formation of the Constitution, the power to
create banks, and to define the powers of such institutions,
rested, unquestionably, with the States ; and as, when they ac-
cepted that instrument, they certainly retained all the powers not
expressly parted with, not a doubt can now exist of their having,
in the time that has since elapsed, acted in full accordance with
both its letter and its spirit. Nevertheless, so great in your
opinion, Mr. President, are the evils now resulting from the exer-
cise of the power thus retained, that, "after long and much reflec-
tion," you have arrived at the conclusion, that, "if experience
shall prove it to be impossible to enjoy the facilities which well-
regulated banks might afford, without at the same time suffering
PRESIDENT OF THE UNITED STATES. 71
the calamities which the excesses of the banks have hitherto
inflicted upon the country, it would then be far the lesser evil to
deprive them altogether of the power to issue a paper currency,
and confine them to the functions of banks of deposit and
discount." The measures thus suggested involving, of course,
the entire annihilation of the rights of the States, in reference to
this important question rights, that, during half a century from
the peace of 1183, had remained entirely unquestioned it is no
matter for surprise, that it should have required the most serious
reflection, before you should have satisfied yourself of the necessity
for suggesting a remedy so entirely opposed to the views you pre-
viously had entertained ; and so much opposed, too, to all the
ideas of the founders of the Constitution, in reference to the beau-
tiful system of local self-government they had found established.
Where, however, Mr. President, exists the power to deprive the
States of the exercise of rights with which they have never parted ?
In the central government ? Assuredly not that government
having no power not expressly granted to it by the Constitution.
It is asserted, nevertheless, that the Supreme Court stands now
ready to reverse all the action of the past seventy years at this
late period deciding, that Washington and Adams, Hamilton and
Franklin, Jefferson and Madison, had been altogether wrong in
their estimate of the powers of the States that, according to the
true intent and meaning of the Constitution, the regulation of all
the banks of the Union belonged to the central authorities and
that, it needs but the passage of an act of Congress, for the
reduction of all the banks of the Union to a condition nearly akin
to that of saving-funds, authorised to receive the deposits of indi-
viduals, and to lend them out ; but deprived of all power in any
other manner to aid the operations of the communities in which
they are placed.
It is but the first step, Mr. President, that is difficult. That
once taken, each successive one becomes more easy the course
of man, in whatever direction, whether towards barbarism or
civilization, centralization or localization, being one of constant
acceleration. The removal of the deposits, in defiance of law, by
General Jackson, was a great step towards centralization ; and
yet, it was but trivial, compared with that you have now sug-
gested leading, as it inevitably does, to the entire subjection
of the currency to the central government. Look almost where
we may, Mr. President, throughout the European history of the
middle ages, we see the exclusive control of the indispensable
instrument of society, to have been regarded as furnishing the
most important of all the machinery of taxation. So was it,
with our Continental money the amount of taxes collected by
its aid, having been immeasurably greater than could have been
collected as a consequence of any direct appeal to the people.
So has it been, too, throughout this century, with the Austrian
72 LETTERS TO THE
government paper money having been issued until it had be-
come greatly depreciated, and then having been replaced by other
paper money, whose value was, as the taxpayers were assured, to
be maintained. That, in turn, becoming depreciated, it was called
in, to be again and again replaced, until nearly the whole original
amount had disappeared. To relieve themselves from such
oppression it was, that the people of European cities established
banks ; and it was by means of those institutions, that the con-
trol of the currency was finally wrested from the various sovereigns,
and vested in their subjects' hands leaving to the government
no power, but that of coinage.
That, Mr. President, having been one of the most important
steps in the road towards the improvement of man's condition,
the money-shop, or bank, has obtained, in all communities, au
importance increasing in the direct ratio of their growth in civili-
zation, and in freedom. Among ourselves, alone, are they the
subjects of unceasing denunciation and persecution. Having be-
come "identified with the habits of our people," they cannot, as
you say, be "suddenly abolished"; but their further existence
can, as you add, be tolerated, only on the condition of their
limiting themselves "to their appropriate sphere" abstaining
from " administering to the spirit of wild and reckless speculation,
by extravagant loans and issues," and thus rendering themselves
of " advantage to the public."
It is quite impossible, Mr. President, to close our eyes to the
fact, that all our tendencies, for the last few years, have been
towards the absorption of all power by the central authorities ;
but, great as have been the previous steps in that direction, the
one now proposed goes so far beyond them all, as to leave them
out of sight. Let the measures thus suggested be carried into
effect let the control of the currency pass into the hands of
Federal agents and all the expansions and contractions you
have so well described, will be far exceeded. "Deplorable," as
you truly say, is " our present financial condition." The cup of
misery will, however, then be full the pages of history furnishing
abundant evidence, that of all the tyrannies yet known to man,
that of a centralized democracy is the most oppressive.
That there is great error somewhere, there is no doubt. Does
it result from the existence of banks ? Scarcely, as it would
seem their growth, throughout Europe, having been in the direct
ratio of the advance in civilization. That of France, with its
numerous branches, is the creation of the present century. Those
of Germany tend rapidly to increase in number. Turkey makes
no banks. Does it lie with bank notes ? It would seem not
Great Britain, whose advance in civilization was so rapid, having
been, at all times, the leader in the use of a paper circulation.
The use of such notes steadily increases in France and Belgium ;
and yet, of all the countries of Europe, there are none that have
PRESIDENT OP THE UNITED STATES. 73
passed so nearly uninjured, through the present crisis. Their use
is greater in New England than in Illinois ; and yet, the changes
in the value of property have been far greater in the latter, than
in the former.
Of all the countries of the world, claiming to rank among those
most civilized, the only two whose governments are now engaged
in a crusade against bank notes, are the United States and Eng-
land the two, whose policy is wholly directed to the extension
of foreign trade ; the two, that now control the chief gold deposits
of the world ; the two, which regard an increase in the necessity
for ships and wagons as evidence of growing wealth and power ;
the two, whose every step is towards increase of centralization ;
the two, whose policy tends towards diminution in the prices of
raw materials, and the subjection of the farmer to the trader;
the two, whose crises are most frequent and most severe ; and
the two, that are now most nearly bankrupt.
The phenomena thus presented for consideration, are, certainly,
evidences of declining civilization. Such being the case, further
progress in that direction must tend towards barbarism. What,
however, is the real route towards civilization ? That, Mr. Presi-
dent, is a question that can be answered, only after a brief inquiry
into the effects resulting from the possession of money, and into
the circumstances which influence its supply, which it is proposed
now to make. Should that result in satisfying you, that the
cause of all our difficulties is to be found in the failure of the
central government to carry into effect your views in regard to
that commerce which we really want, and not in the local action ;
and should you, thereby, be relieved of all necessity for departing
from the construction given to the Constitution by your most
distinguished predecessors, it will, I am well assured, be cause of
unmixed satisfaction.
Yours, very respectfully,
HENRY C. CAREY.
Philadelphia, January 2%d, 1858.
74 LETTERS TO THE
LETTER FOURTEENTH.
" MONEY being a mere commodity is subject to the same
laws that govern wool and cloth, coal and iron. Why, then,
should our legislators trouble themselves about its movements,
any more than about those of turnips, or potatoes ? If we need
it, and are ready to pay for it, it will come. If we do not need
it, or have nothing with which to pay for it, it will not come ;
and we shall, perhaps, be better off without than with it." Such,
Mr. President, is the sort of argument that, year after year, is
used by gentlemen who hold to the idea that countries are to be
enriched by increasing trade with distant people, and sacrificing
that commerce among ourselves which, as you have so clearly
seen, is the sort of " free trade " we really need ; by financiers
who tell us, that gold being one of our products, its export
is as natural and necessary as is that of cotton, and who look,
with perfect calmness, at an outward current of the precious
metals greatly exceeding the inward one ; by Secretaries of the
Treasury, who close their eyes to the clouds that are gathering
round, and then, when overtaken by the storm, gravely tell the
suffering millions, that "it was impossible to foresee the present
revulsion in trade and commerce"; and generally, by all that
class of middlemen, now so rapidly increasing among ourselves,
which lives by preying upon the useful portions of society, and
seeks, as far as possible, to widen the distance between the men
who labor to produce, and depend upon the sale of their labor
and its products, for the ability to feed their wives, their children,
and themselves.
Such persons, Mr. President, have, as it would seem, yet to
learn, that, in addition to the qualities common to themselves and
other commodities, the precious metals possess that other most
important one, of being the great instruments, provided by the
Creator, for facilitating those exchanges of society which consti-
tute that commerce between man and his fellow man, by the
growth of which we are furnished with the highest of all the
evidences of advancing civilization. By their help it is, that the
farmer, the miller, the clothier, and all other members of
society, are enabled to purchase for a single cent, a portion of
the labors of thousands, and tens of thousands, of men employed
in making railroads, engines, and cars, and transporting upon
them, annually, hundreds of millions of letters ; or, for another
cent, their share of the labor of the hundreds, if not thousands, of
men who have contributed to the production of a penny news-
paper. The mass of small coin is thus a saving fund for labor,
because it facilitates association and combination giving utility
PRESIDENT OF THE UNITED STATES. 75
to billions of millions of minutes that would be wasted, did not a
demand exist for them at the moment the power to labor had been
produced. Labor being the first price given for everything we
value, and being the commodity that all can offer in exchange,
the progress of communities in wealth and influence, is in the
direct ratio of the presence, or absence, of an instant demand for
the forces, physical and mental, of each and every man in the
community resulting from the existence of a power on the part
of each and every other man, to offer something valuable in
exchange for it. It is the only commodity that perishes at the
instant of production, and that, if not then put to use, is lost
forever.
We are all, Mr. President, momently producing labor-power,
and daily taking in the fuel by whose consumption it is produced ;
and that fuel is wasted, unless its product be on the instant use-
fully employed. The most delicate fruits, or flowers, may be kept
for hours or days ; but the force resulting from the consumption
of food, cannot be kept, even for a second. That the instant
power of profitable consumption may be coincident with the in-
stant production of this universal commodity, there must be inces-
sant combination, followed by incessant division and subdivision ;
and that, in turn, followed by as incessant recomposition. This
is seen in the case above referred to, where miners, furnace-men,
machine-makers, rag-gatherers, carters, bleachers, paper-makers,
railroad and canal men, type-makers, compositors, pressmen, au-
thors, editors, publishers, newsboys, and hosts of others, combine
their efforts for the production in market of a heap of newspapers
that has, at the instant of production, to be divided off into por-
tions suited to the wants of hundreds of thousands of consumers.
Each of these latter pays a single cent then perhaps subdividing
it among half a dozen others, so that the cost is perhaps no more
than a cent per week ; and yet, each obtains his share of the labors
of all the persons by whom it had been produced.
Of all the phenomena of society, this process of division, sub-
division, composition, and recomposition, is the most remarkable ;
and yet, Mr. President being a thing of such common occur-
rence it scarcely attracts the slightest notice. Were the news-
paper above referred to, partitioned off into squares, each repre-
senting its portion of the labor of one of the persons who had
contributed to the work, it would be found to be resolved into six,
eight, or perhaps even ten thousand pieces, of various sizes, small
and great the former representing the men who had mined and
smelted the ores of which the types and presses had been com-
posed, and the latter the men and boys by whom the distribution
had been made. Numerous as are these little scraps of human
effort, they are, nevertheless, all combined in every sheet, and
every member of the community may for the trivial sum of fifty
cents per annum enjoy the advantage of the information therein
76 LETTERS TO THE
contained ; and as fully as he could do, had it been collected for
himself alone.
Improvements in the modes of transportation are advantageous
to man, but the service thereby rendered, when compared with
the cost, is very small. A ship worth $50,000 cannot effect
exchanges between men at opposite sides of the Atlantic, to an
extent exceeding five or six thousand tons per annum ; whereas,
a furnace of similar cost will effect the transmutation of thirty
thousand tons' weight of coal, ore, limestone, food, and clothing,
into iron. Compared with either of these, however, the commerce
effected by the help of $50,000 worth of little white pieces, repre-
senting labor to the extent of three or five cents labor which,
by their help, is gathered up into a heap, and then divided and
subdivided day after day throughout the year and it will be
found that the service rendered to society, in economizing force,
by each dollar's worth of money, is greater than is rendered by
hundreds, if not thousands, employed in manufactures, or tens of
thousands in ships or railroads ; and yet there are able writers,
Mr. President, who tell us, that money is so much " dead
capital," being "an important portion of the capital of a
country that produces nothing for the country."
" Money, as money," says an eminent economist, "satisfies no
want, answers no purpose. * * The difference between a
country with money, and a country altogether without it, would,"
as he thinks, " be only one of convenience, like grinding by water
instead of by hand." A ship, as a ship a road, as a road a
cotton-mill, as a cotton-mill in like manner, however, "satisfies
no want, answers no purpose." They can be neither eaten, drunk,
nor worn. All, however, are instruments for facilitating the work
of association, and the growth of man in wealth and power is in
the direct ratio of the facility of combination with his fellow-men.
To what extent they do so, when compared with money, we may
now inquire. To that end, let us suppose, Mr. President, that
by some sudden convulsion of nature all the ships of the world
were at once annihilated, and remark the effect produced. The
ship-owners would lose heavily ; the sailors and the porters would
have less employment ; and the price of wheat would temporarily
fall ; while that of cloth would, for the moment, rise. At the
close of a single year, by far the larger portion of the operations
of society would be found moving precisely as they had done be-
fore commerce at home having taken the place of that abroad.
Cotton and tropical fruits would be less easily obtained in Northern
climes, and ice would be more scarce in Southern ones ; but, in
regard to the chief exchanges of a society like our own, there
would be no suspension, even for a single instant. So far, indeed,
would it be to the contrary, that, in many countries, commerce
would be far more active than it had been before the loss of
ships producing a demand for the opening of mines, for the con-
PRESIDENT OF THE UNITED STATES. 77
struction of furnaces and engines, and for the building of mills,
that would make a market for labor, mental and physical, such as
had never before been known.
Let us next suppose that the ships had been spared, and that
all the gold and silver, coined and not coined, mined and not
mined, had been annihilated, and study the effect that would be
produced. The reader of newspapers finding himself unable
to pay for them in beef or butter, cloth or iron would be com-
pelled to dispense with his usual supply of intelligence, and the
journal would be no longer printed. , Omnibuses would cease to
run, for want of sixpences ; and places of amusement would be
closed, for want of shillings. Commerce among men would be at
an end, except so far as it might be found possible to effect direct
exchanges food being given for labor, or wool for cloth. Such
exchanges could, however, be few in number, and men, women,
and children, would perish by millions, because of inability to
obtain food and clothing in exchange for service. Cities whose
population now counts by hundreds of thousands would, before
the close of a single year, exhibit hundreds of blocks of unoccupied
buildings, and the grass would grow in their streets. A substi-
tute might, it is true, be found men returning to the usages of
those primitive times when wheat or iron, tobacco or copper, con-
stituted the medium of exchange ; but under such circumstances,
society, as at present constituted, could have no existence. A
pound of iron would be required to pay for a Tribune or a Ledger,
and hundreds of tons of any of the commodities above referred to,
would be needed for the purchase of the weekly emissions of either.
Tons of them would be needed to pay for the food consumed in
a single eating-house, or the amusement furnished in a single the-
atre ; and how the wheat, the iron, the corn, or the copper, could be
fairly divided among the people who had contributed to the pro-
duction of the journal, the food, or the amusement, would be a
problem entirely incapable of solution.
The precious metals, Mr. President, are to the social body what
atmospheric air is to the physical one. Both supplying the ma-
chinery of circulation, the resolution of the physical body into its
elements when deprived of the one, is not more certain than is
that of the social body when deprived of the other. In both
these bodies, the amount of force is dependent upon the rapidity
of circulation. That it may be rapid, there must be a full supply
of the machinery by means of which it is to be effected ; and yet
there are distinguished writers who mourn over the cost of main-
taining the currency, as if it were altogether lost, while expatiating
on the advantages of canals and railroads not perceiving, appa-
rently, that the money that can be carried in a bag, and that
scarcely loses in weight with a service of half a dozen years, effects
more exchanges than could be effected by a fleet of ships, many
of which would, at the close of such a period of service, be rotting
78 LETTERS TO THE
on the shores on which they had been stranded, while the remain-
der would already have lost half of their original value.
Of all the labor-saving machinery in use, there is none that so
much economizes human power, and so much facilitates combina-
tion, as that known by the name of money. Wealth, or the power
of man to command the services of nature, grows with every in-
crease in the facility of combination this latter growing with
the growth of the ability to command the aid of the precious
metals. Wealth, then, should increase most rapidly where that
ability is most complete.
Nevertheless, Mr. President, a study of our Treasury Reports
of the last few y.ears., would lead to the conclusion, that of all the
machinery used by man, the ship was the most important, and
the precious metals those that demanded least attention. Year
after year, we are told of the wonderful growth of our tonnage ;
and that, too, by gentlemen who seem never to advert to the fact,
that a single ship would carry more tons of food and wool, in the
shape of cloth, than it can carry of hundred-weights, in their original
form. The great object to be accomplished being, that of in-
creasing the quantity of shipping, it seems almost surprising that
we should not, as yet, have had a proposition to require the cotton
to be exported in the seed, and the corn in the husk, as a means
of increasing the bulk of the things to be transported, and thus
augmenting the demand for ships. Our whole policy looking to
the export of our products in their rudest states and thus main-
taining, at its highest, the tax of transportation and that being
the road towards barbarism it affords no cause for surprise,
that our people are so frequently compelled to resort to the use
of worthless rags, as furnishing the only means of circulation that
are within their reach. What are the circumstances which tend
to increase the supply of money, and how we may be enabled to
carry into effect your idea of a real specie circulation, I propose
to show in another letter, remaining meanwhile, Mr. President,
Yours, very respectfully,
HENRY C. CAREY.
Philadelphia, January 25th, 1858.
PKESIDENT OF THE UNITED STATES. 79
LETTER FIFTEENTH.
more than twenty years, Mr. President, the Federal govern-
ment has been engaged in an almost unceasing effort to secure to
itself the control of that great instrument of association known as
money the professed object of all its labors in that direction,
having been, the establishment of what has been termed ' ' a hard
money currency," to the entire exclusion of the paper circulation.
The more it has labored, however, the less has been the stability
of the currency the periods distinguished by its most earnest
efforts, having been those in which we have been most compelled
to dispense with the use of the precious metals. But recently,
money, as we were told, abounded the channels of circulation
having been, everywhere, filled with gold. Now, money of every
kind, has almost altogether disappeared. "There is scarcely,"
says a recent traveller, " an Eastern bank-note to be found west
of Cleveland, and any few dollars that may straggle this way
are eagerly snapped up and sent East as a remittance. Gold is
hidden, where it still lingers ; but very much not only of this, but
of silver change, has been gathered up and sent East. Nebraska
bank-notes, generally of dubious solvency, and uniformly convert-
ible into specie, or Eastern paper, only at a ruinous discount, cor-
poration shinplasters, and even individual shinplasters none of
them regarded as of any value far outside of the shadow of the
tall ' Banks ' whence they are issued are the accepted substitutes
for money in most localities upon, and west of, the Mississippi.
One of the Hutchinson brothers who are now here, singing their
way Eastward, from their new home in Minnesota informed me,
that he has been singing along four hundred miles, through Min-
nesota and Iowa taking grain for music, wherever cash was un-
attainable, and has done very well by it. In one instance, a
farmer drove up with eight bushels of corn in his sleigh, and his
wife and six children seated thereon, saying, ' We have no money,
but we all want to hear you, and corn is the best we can give you. '
He accepted the corn very gladly, gave eight twenty-five-cent
tickets in exchange for it, and sung it out. "
Similar to this, Mr. President, was the state of things at the
close of the first trial of that " free trade " system, which, as you
have so clearly seen, we do not, at present, require. So was it,
too, in 1840-41, at the close of the second experiment the only
difference between it and its predecessor, having been, that the
second crisis was far more fearful than the first. So is it, now,
when we are fast approaching the close of the third experiment
80 LETTERS TO THE
each and every trial of the favorite policy of the central govern-
ment, thus ending in the total disappearance of that " metallic
basis " which it has so much desired to increase.
Why is this so ? Because, Mr. President, your predecessors
seem ever to have reflected, that, to be enabled to use any com-
modity, or thing, we must first enable ourselves to get it ; and
that, a regular influx of the precious metals is quite as necessary
to the maintenance of a hard money circulation, as is an influx
of hides and cotton, to enable us to wear shoes and shirts. While
asserting that money is a mere commodity, they do not admit that
it is subject to the same laws which govern other commodities.
Had our policy tended to produce so great an export of cotton
as to compel our people to go in rags, no one would have thought
of charging the dealers in cotton with crime ; and yet, while pur-
suing a policy that has, whenever tried, resulted in the disappear-
ance of the precious metals, the fact of inability to produce them
when demanded, has always been regarded as evidence of crimi-
nality in the banks warranting new additions to the pains and
penalties provided by existing laws. Year after year, since the
central government undertook the regulation of the currency, have
they been increased ; and yet, despite the penalties, suspensions
have occurred. They must continue to occur, until the central
government shall come to appreciate the value of that very homely
proverb, which teaches, that a boy cannot eat a cake and yet
have it thence learning, that a community cannot, more than
an individual, pursue a course tending to promote the expulsion
of the precious metals, and yet enjoy all the advantages attendant
upon the maintenance of a specie circulation.
All commodities, Mr. President, go from those places at which
their utility is small, to those at which it is great. Therefore it is,
that cotton, wool, and other raw materials, tend towards those
places at which employments are most diversified it being there
that the products of the farm command the largest quantity of
money. Gold and silver follow in the train of raw materials ; and
for the reason, tha.t where the farmer and the artisan are most
enabled to combine, finished commodities are always cheapest.
When Germany exported corn and wool, they were cheap, and
she was required to export gold, to aid in paying for the cloth and
paper she imported the latter being very dear. Now she im-
ports both wool and rags ; her farmers obtain high prices for their
products, and are enriched ; and the gold comes to her, because
cloth and paper are so cheap, that she sends them to the most dis-
tant quarters of the world. So is it with France, Belgium, Swe-
den, and Denmark all of which are large importers of raw ma-
terials, and of gold. In all those countries, raw materials rise in
price ; and the greater the tendency to rise, the more rapidly must
the current of the precious metals set in that direction. The
PRESIDENT OF THE UNITED STATES. 81
country that desires to increase its supplies of gold, and thus
lower the price of money, is, therefore, required to pursue the
course of policy tending most to raise the prices of raw material,
and lower those of manufactures. This, however, is directly the
opposite of the policy advocated by the British school, which
seeks, in the cheapening of all the raw material of manufactures,
the means of advancing civilization.
The proposition, Mr. President, above submitted for your con-
sideration, is a very simple one, and yet, it is by its aid, if at all,
that we shall arrive at a correct understanding of the cause of the
difficulties under which we labor. The precious metals go from
those countries in which employments are least diversified from
those, in which agriculture is least a science from those, in which
the yield of the land is least from those, in which the land is
becoming more and more exhausted from those, in which the
prices of the rude products of the 'earth are the lowest from
those, that are becoming more and more dependent upon trade
from those, in which domestic commerce declines from those,
in which men are becoming less free from all those, therefore,
which decline in civilization. They go to those countries in which
employments are becoming more diversified to those, in which
agriculture is becoming more and more a science to those, in
which the yield of the land is largest to those, in which the
powers of the land increase to those, in which the farmer's pro-
ducts command the highest prices to those, which are becoming
less dependent upon foreign trade to those, in which there is a
steady growth of the domestic commerce to those, in which men
are becoming less and less enslaved to all those, therefore, in
which, with each successive year, we are more and more presented
with those phenomena which indicate advance in civilization.
Of the machinery in use by man, it is the most serviceable
that is last obtained the cart following the camel and the mule
the wagon following the cart and the railroad car, with its lo-
comotive, following the wagon. Of all the instruments given by
the Creator for man's use, money is the one which performs the
largest amount of service, in proportion to its cost ; and therefore
it is, that it is always the last to be obtained. Countries whose
people are limited to the single pursuit of scratching the earth,
can neither afford to buy nor keep it. Therefore it is, that the
precious metals go from Portugal and Turkey, Brazil and Chili,
California and Australia, in both of which latter, the price of
money, as indicated by the rate of interest, is higher than in
almost any other portion of the world. Countries in which the
pursuits of man are diversified those, therefore, in which the
prices of agricultural products tend to rise can afford to buy
and keep them ; and that such diversification is essential to the
existence of the power so to do, is proved by every fact in the
82 LETTERS TO THE
history of English commerce in the last century, and in those of
all the advancing countries of Europe in the present one. That
power grows with the growth of domestic commerce, the only
sure foundation, as you, Mr. President, have so clearly seen, of a
great foreign one. In its existence, therefore, may be found the
most conclusive proof of advancing civilization. Which have
been the periods at which it has existed among ourselves, and how
it has affected the supplies of gold, we may now inquire.
What was the commerce in the precious metals in the thirty years
preceding the discovery of California, is shown by the following
figures :
Excess exports. Excess imports.
1821-1825 $12,,500,000
1826-1829 $4,000,000
1830-1834 20,000,000
1835-1838 (a period of extensive foreign loans) 34,000,000
1839-1842 9,000,000
1843-1847 (foreign debt largely reduced) 39,000,000
1848-1850 14,000,000
IntheclosingyearsofthefreetradesystemoflSlf, Mr. President,
the average excess of specie export was about $2,500,000 a year.
Adding to this a similar amount, only, for the annual consump-
tion, we obtain an absolute diminution of five-and-twenty millions
the population having, meantime, increased about ten per cent.
Under such circumstances, it is no matter of surprise that those
years are conspicuous among the most calamitous ones in all our
history. At Pittsburg, flour then sold at $1.25 per barrel ; wheat,
throughout Ohio, would command but 20 cents a bushel ; while
a ton of bar iron required a little short of eighty barrels of flour
to pay for it. Such was the state of affairs that produced the
tariff of 1824 a very imperfect measure of protection, but one
that, imperfect as it was, changed the course of the current, and
caused a net import, in the four years that followed, of $4,000,000
of the precious metals. In 1828, there was enacted the first
tariff tending directly to the promotion of association throughout
the country ; and its effects exhibit themselves in an excess import
of the precious metals averaging $4, 000, 000 a year notwith-
standing the discharge, in that period, of the whole of the national
debt that had been held in Europe, amounting to many millions.
Putting together the discharge of debt and the import of coin, the
balance of trade in that period must have been in our favour to
the extent of nearly $50,000,000 ; or an average of about
$10,000,000 a year. As a consequence, prosperity existed to an
extent never before known the power to purchase foreign com-
modities having grown with such rapidity as to render it neces-
sary greatly to enlarge the free list ; and then it was, that coffee,
tea, and many other raw commodities, were emancipated from
PRESIDENT OF THE UNITED STATES. 83
the payment of any impost. Thus did efficient protection lead to
a freedom of commerce, abroad and at home, such as had never
before existed.
The first few years of the compromise tariff of 1833, profited
largely by the prosperity caused by the act of 1828, and the re-
ductions under it, were then so small, that its operation was but
slightly felt. In those years, too, there was contracted an enor-
mous foreign debt stopping the export of specie, and producing
an excess import averaging more than $8,000,000 a year. Pros-
perity seemed to exist, but it was of the same description that has
marked the last few years, during which the value of all property
has depended entirely upon the power to contract debts abroad
thus placing the nation more completely under the control of its
distant creditors.
In the succeeding years, the compromise became more fully
operative.* Furnaces and factories were closed, with constantly
increasing necessity for looking abroad for the performance of all
exchanges, and corresponding necessity for remitting money to
pay the balance due on the purchases of previous years. Never-
theless, the annual specie export averaged little more than
$2,000,000; but if to this be added, a consumption of only
$3,000,000 a year, we have a reduction of $20,000,000 ; the con-
sequences of which were seen, in an almost total suspension of
domestic commerce. The whole country was in a state of ruin.
Laborers were everywhere out of employment, and being still con-
sumers, while producing nothing, the power of accumulation ceased,
almost, to exist. Debtors being every where at the mercy of creditors,
sales of real estate were chiefly accomplished by help of the sheriff,
whose perquisites were then larger than they had been at any time
from the date of the Constitution.
The change in the value of labor, consequent upon the stoppage
of the circulation that followed this trivial export of the precious
metals, cannot, Mr. President, be placed at less than $500,000,000
a year. Wages were low, even where employment could be ob-
tained ; but a large portion of the labor-power of the country was
totally wasted, and the demand for mental power diminished even
more rapidly than that for physical exertion. In the prices of
land, houses, machinery of all kinds, and other similar property,
the reduction counted by thousands of millions of dollars ; and
yet, the difference between the two periods ending in 1833 and
1842, in regard to the monetary movement, was only that between
an excess import of $5,000,000, and an excess export of
$2,500,000, or a total of $T, 500,000 a year. No one who
* One-tenth of the excess over 20 per cent, was reduced in December,
1833; another tenth in 1835; a third in 1837; a fourth in 1839; the re-
maining excess of duties being then equally divided into two parts, to be
reduced in 1841 and 1842.
84 LETTERS TO THE
studies these facts, can fail to be struck with the wonderful power
over the fortunes and conditions of men, exerted by the metals
provided by the Creator, for furthering the work of association
among mankind. With the small excess of import in the first
period, there was a steady tendency towards equality of condition
among the poor and the rich, the debtor and the creditor ; where-
as, with the slight excess of export in the second one, there was a
daily increasing tendency towards inequality the poor laborer
and the debtor, passing steadily more under the control of the rich
employer, and the wealthy creditor.
Of all the machinery furnished for the use of man, there is none,
Mr. President, so equalizing in its tendency as that known by the
name of money ; and yet economists would have the world believe
that the agreeable feeling which, everywhere, attends a knowledge
that it is flowing in, is evidence of ignorance any reference to
the question of the favorable or unfavorable balance of trade, be-
ing beneath the dignity of men who fancy they are following in
the footsteps of Hume and Smith. It would, however, be as
difficult to find a single prosperous community that is not, from
year to year, making itself a better customer to the gold-producing
countries, as it would be to find one that is not becoming a better
customer to those which produce silk, or cotton. To be an im-
proving customer, there must be in its favor a steadily increasing
balance of trade, to be settled by payment in the commodity for
whose production the country is fitted, whether that be cloth, or
tobacco, silver or gold.
The condition of the nation at the date of the passage of the
act of 1842, was, Mr. President, humiliating in the extreme. The
Treasury unable to obtain at home the means required for ad-
ministering the government, even on the most economical scale
had failed in all its efforts to negotiate a loan at six per cent.,
even in the same foreign markets in which it had but recently paid
off, at par, a debt bearing an interest of only three per cent.
Many of the States, and some even of the oldest of them, had
been forced to suspend the payment of interest on their debts.
The banks, to a great extent, being in a state of suspension, those
which professed to redeem their notes, found their business greatly
restricted by the increasing demand for coin to go abroad. The
use of either gold or silver as currency had almost altogether
ceased. The Federal government, but recently so rich, was driven
to the use of inconvertible paper money, in all its transactions
with the people. Of the merchants, a large portion had become
bankrupt. Factories and furnaces being closed, hundreds of
thousands of persons were totally unemployed. Commerce had
scarcely an existence those who could not sell their own labor,
being unable to purchase that of others.
Nevertheless, deep as was the abyss into which the nation had
PEESIDENT OF THE UNITED STATES. 85
been plunged, so magical was the effect of the adoption of a sys-
tem tending to the creation of a favorable balance of trade, that
scarcely had the act of August, 1842, become a law, when the
government found that it could have all its wants supplied at
home. Mills, factories, and furnaces, long closed, were again
opened ; labor came again into demand ; and, before the close
of its third year, prosperity almost universal reigned. States
recommenced the payment of interest on their debts. Railroads
and canals again paid dividends. Real estate had doubled in
value, and mortgages had been everywhere lightened ; and yet
the total net import of specie in the first four years, was but
$17,000,000, or $4,250,000 per annum ! In the last year occurred
the Irish famine, creating a great demand for food ; the conse-
quence of which was, an import of no less than $22,000,000 of
gold making a total import, in five years, of $39,000,000.
Deducting from this but $4,000,000 per annum for consumption,
it leaves an annual increase, for the purposes of circulation, of
less than $5,000,000 ; and yet the difference in the prices of labor
and land in 1847, as compared with 1842, would be lowly esti-
mated, if placed at only $2,000,000,000.
With 1847, however, there came another change of policy
the nation being again called upon to try the system under which
it had been prostrated in 1840-'42. The doctrines of Hume and
Smith, in reference to the balance of trade, were again adopted
as those by which a government was to be directed in its move-
ments. Protection being then repudiated, the consequences were
speedily seen in the fact, that within three years, factories and fur-
naces were again closed, labor was seeking demand, and gold was
flowing out even more rapidly than it had come in, under the
tariff of 1842. The excess export of those three years amounted
to $14,000,000 ; and if to this be added $15,000,000 for con-
sumption, it follows that the reduction was equal to the total
increase under the previous system. Circulation was rapidly
diminishing, and a crisis was close at hand, when, fortunately
for the advocates of the existing system, the gold deposits of Cali-
fornia were brought to light. Since that time, we have exported
some hundreds of millions of dollars of gold, and have contracted
some hundreds of millions of foreign debt ; and the result is seen,
in the facts, that money has ceased to circulate that the primi-
tive form of barter is taking the place of the more civilized form
of purchase and sale that merchants, by thousands, are utterly
bankrupt that counties, towns, and cities, are unable to pay the
interest on their debts that commerce scarcely exists and that,
the Federal treasury is forced to the use of treasury notes, which
are already at a discount, when compared, even, with irredeem-
able bank notes.
Such, Mr. President, is the result, as thus far reached, of the
86 LETTERS TO THE
regulation of the currency by the central government. Such most
it continue to be, and for the reason that, while the government
is unceasing in its efforts to compel the people to forego the use
of bank notes, it is equally unceasing in its efforts to reduce the
prices of all the products of the soil, and thus compel the export of
the precious metals. Under a different policy, gold and silver
flowing steadily in would gradually take the place of paper ;
but, under the existing one, if fully carried out, we must be reduced
to barter bank notes not being permitted to circulate, and the
precious metals not being permitted to remain amongst us. Look
in what direction we may, Mr. President, we meet, at home, with
evidences of declining civilization ; but nowhere can higher proof
be found, than in the history of the crusade of the central govern-
ment against the local banks and their circulation.
Yours, very respectfully,
HENRY C. CAREY.
Philadelphia, January 29th, 1858.
PRESIDENT OF THE UNITED STATES. 87
LETTER SIXTEENTH.
" IN every kingdom into which money begins to flow in greater
abundance than formerly, everything," says Mr. Hume, in his
well-known Essay on Money, "takes a new face : labor and in-
dustry gain life ; the merchant becomes more enterprising, the
manufacturer more diligent and skilful ; and even the farmer fol-
lows his plough with more alacrity and attention."
That this is so, Mr. President, is well known to all. Why
should it be so ? Because the circulation of society then increases,
and all power whether in the physical or social world results
from motion. When money is flowing in, every man is enabled
to find a purchaser for his labor, and to become a purchaser of
that of others. Therefore has it been, that commerce has so
steadily increased in those countries in which the Californian and
Australian products have so rapidly accumulated France, Ger-
many, and Northern and Western Europe generally. When, on
the contrary, money flows out, the circulation diminishes, and
labor is everywhere wasted. That labor-power being capital, the
result of the consumption of other capital in the form of food,
all the difference between an advancing and a declining state of
society, is found in the fact, that in the one, there is a constant
increase in the rapidity with which the demand for muscular or
mental power follows its production, while in the other, there is
a daily diminution therein. The more instantly the demand fol-
lows the supply, the more is the force economized, and the larger
is the power of accumulation. The longer the interval between
production and consumption, the greater is the waste offeree, and
the less is the power of accumulation.
Of all the machinery in use among men, there is none that exer-
cises upon their actions so great an influence, as that which gathers
up and divides and subdivides, and then gathers up again, to be
on the instant divided and subdivided again, the minutes and
quarter-hours of a community. It is the machinery of association,
and the indispensable machinery of progress ; and therefore it is,
that we see in all new, or poor, communities so constant an effort
to obtain something to be used in its stead ; as is shown in various
countries in which an irredeemable paper constitutes the medium
of exchange. Throughout the West, a currency of some descrip-
tion is felt to be among the prime necessities of life. So well is
this want understood, that many Eastern banks supply notes ex-
pressly for Western circulation the people there passing them
from hand to hand, because any money is better than none, and
good they cannot get, for the reason that metallic money always
flows from the place where the charge for its use is high, to that
88 LETTERS TO THE
at which it is low. The rate of interest in the West is now enor-
mous, but each successive day witnesses the export of gold to the
East,'whcre it is somewhat less ; and yet, even our high interest
ranging, as it has done for years, between ten and thirty per cent.
per annum cannot prevent it from going to France and Ger-
many, where it commands but five or six per cent. Money thus
obeys the same law as water seeking always the lowest level.
The latter falls upon the hills, but, from the moment of its fall, it
never stops until it reaches the ocean ; nor does the gold of Cali-
fornia, or the silver of Mexico, stop until it reaches that point at
which money most abounds, and at which, for that reason, the
price paid for its use is lowest.
Of all the commodities in. use by man, the precious metals are
those, Mr. President, whose movements furnish the most perfect
test of the soundness, or unsoundness, of its commercial system.
They go from those countries whose people are engaged in ex-
hausting the soil, to those in which they renovate and improve it.
They go from those at which the price of raw products, and the
land itself, is low from those at which money is scarce, and
interest is high. The country that desires to attract them, and
thus to lower the charge for the use of money, has, then, only to
adopt the measures required for raising the price of land and
labor. In all countries, the value of land grows with that de-
velopment of the human faculties which results from diversity in
the modes of employment, and consequent growth of the power
of combination. That power grows in all the countries of North-
ern Europe ; and for the reason, as has been shown, that all those
countries have adopted the course of policy recommended by Col-
bert, and carried out by France. It declines in Great Britain, in
Ireland, in Portugal, in Turkey, in the Eastern and Western In-
dies, and in all countries that follow the teachings of the British
school. It has grown among ourselves in every period of protec-
tion ; and then money having flowed in land and labor have
risen in value. It has diminished in every period in which foreign
trade has obtained the mastery over domestic commerce. Land
and labor have always declined in value as soon as our people
had eaten, drunk, and worn foreign merchandise to the extent
of hundreds of millions of dollars, beyond the value of their ex-
ports of the rude products of the soil, and have thus compelled
the withdrawal of the " metallic basis " of their paper circulation.
We are told, however, by the same writer Mr. Hume and
in that he is followed by the modern economists that the only
effect of an increase of the supply of gold and silver is that of
"heightening the price of commodities, and obliging every one to
pay more of those little yellow or white pieces for everything he
purchases." Were such really the case, it would be little short of a
miracle, that we should see money always, century after century,
passing in the same direction to the countries that are rich
PRESIDENT OF THE UNITED STATES. 89
from those that are poor ; so poor, too, that they cannot afford
to keep as much of it as is required for their own exchanges..
The gold of Siberia leaves a land in which so little circulates, that
labor and its products are at the lowest prices, to find its way to
St. Petersburg, where it will purchase less labor, and less of either
wheat or hemp, than it would do at home ; and that of Carolina
and Virginia goes steadily and regularly, year after year, to the
countries to which the people of those States send their cotton
and their wheat, because of the higher prices at which they sell.
The silver of Mexico, and its cochineal, travel together to the
same market ; and the gold of Australia passes to Britain by the
ship which carries the wool yielded by the flocks.
Every addition to the stock of money, as we are assured by the
ingenious men of modern days, engaged in compiling treasury tables
and finance reports, renders a country a good place to sell in, but
a bad one in which to purchase. To what countries, however, is
it, that men have most resorted when they desired to purchase ?
Have they not, until recently, gone, almost exclusively, to Britain ?
It has been so, assuredly ; and for the reason, that there it has
been, that finished commodities were cheaply furnished. Where
have they gone to sell ? Has it not been to Britain ? It certainly
has been so ; and for the reason, that there it was?, that gold, cot-
ton, wheat, and all other of the rude products of the earth, were
dear. Where do they now most tend to go when they desire to
purchase cloths or silks ? Is it not to France and Germany ? So
it certainly is ; and for the reason, that there it is that raw mate-
rials are highest, and finished ones are cheapest. Gold follows in
the train of raw materials generally these last being found, in-
variably, travelling to those places at which the rude products of
the earth command the highest prices, while cloth, iron, and manu-
factures of iron and other metals, maybe purchased at the lowest;
and the greater the flow in that direction, the greater is the ten-
dency to further enhancing the prices of the former, and reducing
those of the latter. From this it would seem, Mr. President, that
increase in the supply of money, so far from having the effect of
causing men to give two pieces for an article that could before
have been had for one, has, on the contrary, that of enabling
them to obtain for one piece the commodity that before had cost
them two; and that such is the fact, can readily be shown.
The stock of gold among ourselves, has, within the last few
years, been much increased ; and yet, so far is it, from producing
the effects above described, that the prices of wheat, cotton, to-
bacco, and all our other products, now steadily decline, and the
farmer and planter have in prospect, lower prices than they have
ever seen. Why, Mr. President, is this the case ? Because, for
more than twenty years, the central government has been engaged
in an almost unceasing effort to promote the habit of hoarding
the precious metals, and thus by lessening their power of circu-
90 LETTERS TO THE
lation has almost annihilated their utility. Because, in the
vain hope of establishing, by means of such measures, " a hard
money currency," it has waged an almost unceasing war upon
public and private credit prohibiting the use of circulating
notes in all transactions in which it is itself concerned, and urging
upon the local authorities, the necessity for following its example.
With it, freedom of trade in reference to the most important of
all the commodities in use by man, has not consisted in letting
the people think and act for themselves, but in compelling them
to act in obedience to its mandates.
The use of circulating notes tends, however, as we are assured,
to promote the expulsion of gold. Were it to do so, Mr. Presi-
dent, it would be in opposition to the great general law, in virtue
of which all commodities tend to, and not from., the places at
which their utility is greatest. Cotton-wool tends to go from
the plantation, and to the mill. Hides tend to go from the farm,
and to the tanner's yard. Gold and silver tend to go from Peru
and California, and to those places at which such metals are most
required in the arts, and at which industry is most diversified
the same laws thus governing all commodities, be they what
they may.
A bank, Mr. President, is a machine for utilizing money, by
enabling A, B, and C, to obtain the use of it at the time when
D, E, and F, its owners, do not need its services. The direct
effect of the establishment of such institutions in European cities
has always been to cause money to flow towards those cities ; and
for the reason, that there its utility stood at the highest point.
Even then, however, there were difficulties attendant upon the
change of property in the money deposited with the bank the
owner having been required to go to the banking-house, and write
it off to other parties. To obviate this difficulty, and thus increase
the utility of money, its owners were at length authorized to draw
checks, by means of which they were enabled to transfer their
property without stirring from their houses.
The difficulty still, however, existed, that private individuals
not being generally known such checks could, in general, effect
but a single transfer ; and thus, the recipient of money found
himself obliged to go through the operation of taking possession
of that which had been transferred to him, after which he had, in
his turn, to draw a check, when he himself desired to effect an-
other change of property. To obviate this, circulating notes were
invented, by help of which the ownership of money is now trans-
ferred with such rapidity, that a single hundred dollars passes
from hand to hand fifty times a day effecting exchanges, per-
haps, to the extent of many thousand dollars, and without the
parties being at any time required to devote even a single instant
to the work of counting coin. This was a great invention, by
aid of which the utility of money was so much increased, that a
PEESIDENT OF THE UNITED STATES. 91
single thousand pieces could be made to do more work than, with-
out it, could be done by hundreds of thousands.
This, of course, as we are told, supersedes gold and silver, and
causes them to be exported. So we are certainly assured, by those
economists who regard man as an animal that must be fed, and
will procreate as a slave, who can be made to work only under
the pressure of a strong necessity. Were they, however, to look,
for once, at the real MAN the being made in the image of his
Creator, and capable of almost infinite elevation they would,
perhaps, arrive at a conclusion widely different. The desires of
that man being infinite, the more they are gratified, the more
rapidly do they increase in number. The miserable Hottentot
dispenses with a road of any kind, but the enlightened and intel-
ligent people of other countries, are seen passing in succession
from the ordinary village road to the turnpike, and thence to the
railroad ; and the better the existing communications, the greater
is the thirst for further improvement. The better the schools
and houses, the greater is the desire for superior teachers, and for
further additions to the comforts of the dwelling. The more per-
fect the circulation of society, the larger is the reward of labor,
and the greater is the power to purchase gold and silver, to be
used for the various purposes for which they are so admirably
fitted ; and the greater is the tendency to have them flow to the
places at which that circulation is established. Money promotes
the circulation of society. The check and the bank note stimu-
late that circulation giving thereby value to labor and land;
and wherever checks and notes are most in use, there, Mr. Presi-
dent, should the inward current of the precious metals be most
fully and firmly established.
That such is the case, is proved by the facts, that, for a century
past, the precious metals have tended most to Britain, where such
notes were most in use. Their use increases rapidly in France,
with constant increase in the inward flow of gold. So, too, does
it in Germany, towards which the auriferous current now sets so
steadily, that notes which are the representatives of money, are
rapidly taking the place of those irredeemable pieces of paper, by
which the use of coin has so long been superseded.
Whence flows all this gold ? From the countries in which em-
ployments are not diversified ; from those, in which there is little
power of association and combination ; from those, in which, there-
fore, credit has no existence ; from those, finally, which do not
use that machinery which so much increases the utility of the pre-
cious metals, and which we are accustomed to designate by the
term bank-note. The precious metals go from California from
Mexico from Peru from Brazil from Turkey and/rom
Portugal the lands in which property in money is transferred
only by means of actual delivery of the coin itself to those, in
which it is transferred by means of a check, or note. They go from
92 LETTERS TO TUB
the plains of Kansas, where notes are not in use, to New York
and New England, where they are from Siberia to St. Peters-
burg from the banks of African rivers to London and Liver-
pool and from the "diggings " of Australia to the towns and
cities of Germany, where wool is dear and cloth is cheap.
All the facts exhibited throughout the world tend, Mr. Presi-
dent, to prove that every commodity seeks that place at which it
has the highest utility ; and -all those connected with the move-
ment of the precious metals prove that they constitute no excep-
tion to the rule. Bank notes increasing the utility of those
metals should, therefore, attract, and not repel, them. Never-
theless, the two nations of the world which claim best to under-
stand the principles of commerce, are now engaged in a crusade
against such notes ; and in the vain hope of thereby rendering
their several countries more attractive of the produce of the mines
of Peru and Mexico, Australia and California. The result is
seen in the fact, that both are nearly bankrupt.
It is a great mistake ; and its existence here is due to the fact,
that our system of policy tends to that expulsion of the precious
metals, which always must result from the long-continued export
of the raw products of the earth. The administration that
adopted what is called free trade, was the same that commenced
the system of compelling the community to use gold instead of
notes ; and the result was found in the total disappearance of
coin from circulation. From that time to the present, the
motto of the generally dominant party of the Union has been
"War to the death against bank notes"; and, with a view to
promote their expulsion, laws have been passed in various States,
forbidding their use, except when of too great size to enter freely
into the transactions of the community. As must, however, in-
evitably be the case, the tendency to the loss of the precious
metals has always been in the direct ratio of the diminution in
their utility thus produced. At one time only, in almost twenty
years, has there been an excess import of those metals, and that
was under the tariff of 1842. Then, money became abundant
and cheap ; because the policy of the country looked to the pro-
motion of association and the extension of domestic commerce.
Now, it is scarce and dear ; because that policy limits the power
of association, and establishes the supremacy of trade.
Careful study of these facts, can scarcely, Mr. President, fail to
satisfy you, that the cause of difficulty lies wholly in the central
government ; and that, to that government it is, we are to look
for change. The expansions and contractions of which you
so much, and so justly too, complain, having all occurred in those
periods in which the policy of the Union has tended towards the
sacrifice of domestic commerce towards the exhaustion of the
soil towards the depression of the prices of the farm and the
plantation and towards the expulsion of our people from the
PRESIDENT OP THE UNITED STATES. 93
older States, the remedy is to be found in the adoption of one
which shall look to the extension of domestic commerce to the
creation of a real agriculture to the elevation of the rewards
of labor employed upon the land and to the concentration of
our population. That policy, Mr. President giving us that
real free trade which you so much admire would enable us to
import, and to retain, abundant supplies of the precious metals,
and thus to establish, upon a sure foundation, the hard money
currency you so anxiously desire.
" No other nation," as you most truly say, "has ever existed,
which could have endured such violent expansions and contrac-
tions of paper credits, without lasting injury." No other nation
has been so unfortunate as to have a government always at war
with public and private credit ; and none other, after so long a
period of 'intestine war, could have retained so much vitality.
Let the central government, Mr. President, review its action
during the last twenty years let it see that its policy has looked
to the destruction of that internal commerce upon which, alone,
a prosperous foreign one can be built let it follow in the foot-
steps of the patriots of the Revolution and your hopes in the
future will all be realized "the buoyancy of youth, the energies
of our population, and the spirit which never quails before diffi-
culties, " then, but not otherwise, enabling us "to recover from
our financial embarrassments, " and " even occasioning us speedily
to forget the lessons they have taught." Each and every period
of what is called free trade, having ended in bankruptcy, on each
and every occasion, general wealth, peace, happiness, and con-
stantly increasing power, have resulted from the adoption of pro-
tection. So, Mr. President, must it ever be the depression and
ruin of the agricultural interest being the necessary consequences
of the former of these systems, and its elevation having always
resulted from the adoption of the latter.
With great respect,
Your obed't servant,
HENRY C. CAREY.
Philadelphia, February 2d, 1858.
94 LETTERS TO THE
LETTER SEVENTEENTH.
CIVILIZKD communities those communities, Mr. President,
which have obtained that freedom of domestic intercourse which,
as you have seen, we so sorely need follow the advice of Adam
Smith, in exporting their wool, and their corn, in the form of
cloth, at little cost for transportation. Thus, France, in 1856,
exported silks and cloths, clothing, paper, and articles of furni-
ture, to the extent of $300,000,000 ; and yet the total weight was
short of 40,000 tons requiring for its transport but forty ships
of very moderate size.
Barbarous, and semi-barbarous countries, on the contrary', ex-
port their commodities in their rudest state, at heavy cost for trans-
portation. India sends the constituents of cloth cotton, rice,
and indigo to exchange, in distant markets, for the cloth itself.
Brazil sends raw sugar across the ocean, to exchange for that
which has been refined. We send wheat and Indian corn, pork
and flour, cotton and rice, fish, lumber, and naval stores, to be
exchanged for knives and forks, silks and cottons, paper and
China-ware. The total value of these commodities exported in
1856 high as were then the prices was only $230,000, 000 ; and
yet, the American and foreign ships engaged in the work of trans-
port, were of the capacity of 6,872,253 tons requiring for their
management no less than 269,000 persons.*
In the movement of all this property, Mr. President, there is
great expense for transportation. Who pays it ? Ask the farmer
of Iowa, and he will tell you, that he sells for 15 cents and that,
too, payable in the most worthless kind of paper a bushel of
corn that, when received in Manchester, commands a dollar ; and
that he, in this manner, gives to the support of railroads and
canals, ships and sailors, brokers and traders, no less than eighty-
Jive per cent, of the intrinsic value of his products. Ask him
once again, and he will tell you, that while his bushel of corn
will command, in Manchester, 18 or 20 yards of cotton cloth, he
is obliged to content himself with little more than a single yard
eighty-Jive per cent, of the clothing power of his corn having
been taken, on the road, as his contribution towards the tax im-
posed upon the country, for the maintenance of the machinery of
that "free trade" which, as you, Mr. President, have so clearly
seen, is the sort of freedom we do not, at present, need.
The country that exports the commodity of smallest bulk, is
* This is the total tonnage that arrived from foreign countries, in that
year. A small portion was required for the transport of manufactured com-
modities, but it was so small as scarcely to require notice.
PRESIDENT OF THE UNITED STATES. 95
almost wholly freed from the exhausting tax of transportation.
At Havre ships being little needed for the outward voyage,
while ships abound the outward freights must be always very low.
The community that exports the commodities of greatest bulk,
must pay nearly all the cost of transportation. A score of ships
being required to carry, from our ports, the lumber, wheat, or
naval stores, the tobacco, or the cotton, required to pay for a
single cargo of cloth, the outward freights must always be at, or
near, that point which is required to pay for the double voyage
and every planter knows, to his cost, how much the price of his
cotton is dependent upon the rate of freight.
In the first of these, Mr. President, employments become, from
day to day, more thoroughly diversified the various human
faculties become more and more developed the power of com-
bination tends steadily to increase agriculture becomes more
and more a science the land becomes more productive the
societary movement becomes more stable and regular and the
power to purchase machinery of every kind, whether ships, mills,
or the precious metals, tends steadily to augment.
In the last, the reverse of this is found the pursuits of men
becoming less diversified the demand for human faculty becom-
ing more and more limited to that for mere brute force, or for the
craft by which the savage is so much distinguished the power
of association tending to decline agriculture becoming less and
less a science, and the land becoming more and more exhausted
the societary movement acquiring, more and more, the fitfulness
and irregularity of movement you have so well described, as exist-
ing among ourselves and the power to obtain machinery of any
kind tending steadily to diminish.
The first of these, Mr. President, may be found in the countries
of Central and Northern Europe those which follow in the lead
of Colbert and of France. All of these, are gradually emancipating
themselves from the most oppressive of all taxes, the tax of trans-
portation. All of them, therefore, are moving in the direction of
growing wealth and power, with correspondent advance in civiliza-
tion, and in freedom.
The last may be found in Ireland, India, Jamaica, Portugal,
Turkey, and these United States the countries which follow in
the lead of England. All of these, are becoming more and more
subjected to the tax of transportation. All of them, therefore,
are declining in wealth and power, in civilization, and in freedom.
In the first, the land yields more and more with each successive
vear w jth constant increase in the power of a bushel of wheat,
or a pound of wool, to purchase money. In the last, the land
yields less from year to year, with constant tendency to decline in
the price of food and cotton. The first, import the precious metals.
The last, export them. The first, find daily increase of power to
maintain a specie circulation, as the basis of the higher and better
96 LETTERS TO THE
currency supplied by banks. The last, are gradually losing the
power to command a circulation of any kind, and tending, more
and more, towards that barbaric system of commerce which con-
sists in exchanging labor against food, or wool and corn against
cloth.
We may be told, however, Mr. President, that in return for
the eighty-five per cent, of his products that, as we see, is
paid by the farmer of Iowa, and by the Texan planter, we are
obtaining a magnificent system of railroads that our mercantile
marine is rapidly increasing that, by its means, we are to secure
the command of the commerce of the world, &c. , &c. How far
all this is so, we may now inquire. To me, it certainly appears,
that if this be, really, the road to wealth and power it would
be well to require the exportation of wheat instead of flour, paddy
in place of rice, cotton in the seed, corn in the ear, and lumber in
the shape of logs, rather than in that of planks.
Looking, first, to our internal commerce, we find a mass of
roads, most of which have been constructed, by help of bonds,
bearing interest at the rate of 6, 8, or 10 per cent. bonds that
have been disposed of, in the market, at 60, 70, or 80 per cent.
of their nominal value, and could not now, probably, be re-sold
at more than half the price at which they were originally bought.
Half made, and little likely ever to be completed, these roads are
worked at great expense while requiring constant and great
repairs. As a consequence of this it is, that the original pro-
prietors have almost wholly disappeared the stock being of little
worth. The total amount applied to the creation of railroads hav-
ing been about $1000,000,000, and the average present value
scarcely exceeding 40, if even 30, per cent., it follows that
$600,000,000 have been sunk,. and with them, all power to make
new roads. Never, -at any period of our history, have we been,
in this respect, so utterly helpless as at present. Nevertheless,
the policy of the central government looks steadily to the disper-
sion of our people, to the occupation of new territories, to the
creation of new States, and to the production of a necessity for
further roads. That, Mr. President, is the road to physical and
moral decline, and political death, as will soon be proved, unless
we change our course.
The railroad interest being in a state of utter ruin, we may now
turn to the shipping one, with a view to see how far we are likely,
by its aid, to obtain that command of the commerce of the world,
so surely promised to us, by the author of the tariff of '46.
Should that prove to be moving in the same direction, the fact
will certainly afford new and stronger proof of the perfect accu-
racy of your own views, Mr. President, as to the sort of freedom
we so much require.
In a state of barbarism person and property being insecure
the rate of insurance is high. Passing thence towards civiliza-
PRESIDENT OF THE UNITED STATES. 97
tion, security increases, and the rate of insurance declines, as we
see it to be so rapidly doing, in reference to fire, in all the ad-
vancing countries of Europe. Our course, in reference to ship-
ping, being in the opposite direction security diminishing, when
it should increase the rate of insurance steadily advances, as
here is shown :
Bates of Insurance upon American Ships.
1846. 1858.
To Cuba 1J percent 1J to 2 percent.
"Liverpool ij " l| to 2 "
" India and China If " 2 "
To and from Liverpool, on packet-
ships, annual rates 5 " 8 "
To what causes, Mr. President, are we to attribute this extra-
ordinary change ? May it not be found in the fact, that the more
we abandon domestic commerce, and the larger the amount of
taxation imposed upon our farmers for the maintenance of trans-
portation, the greater becomes the recklessness of those who gain
their living out of that taxation ? Look back to the last free trade
period that from 1837 to 1841 and you will find phenomena
corresponding precisely with those which are now exhibited,
although not so great in magnitude. At present, the utter reck-
lessness the total absence of conscientious feeling .here exhi-
bited, is such as to astonish the thinking men of Europe.
Railroad accidents have become so numerous as scarcely to attract
even the momentary attention of the reader, and the loss of life
becomes greater from year to year. Steamers are exposed to the
storms of the lakes, that are scarcely fit to navigate our rivers.
Ships that are unfit for carrying insurable merchandise, are em-
ployed in the carriage of unfortunate passengers they being the
only commodity, for whose safe delivery the ship-owner cannot be
made responsible. Week after week, the records of our own and
foreign courts, furnish new evidence of decline in the feeling of re-
sponsibility which, thirty years since, characterized the owners of
American ships, and the men therein employed.
Look where we may, Mr. President, on the sea, or on the land,
evidences of demoralization must meet our view. " Stores and
dwellings " and here I give the words of a New York journal
" are constructed of such wretched materials as scarcely to be able
to sustain their own weight, and with apologies for walls which
tumble to the ground, after being exposed to a rain of a few hours'
duration, or to a wind which possesses sufficient force to set the
dust on the highways in motion. Entire blocks of edifices are
put up, with the joists of all so connected with each other, as to
form a complete train for the speedy communication of fire from
one to another. Joists are built into flues, so that the ends are
exposed to becoming first heated, and then ignited by a flying spark.
7
98 LETTERS TO THE
Rows of dwellings and warehouses are frequently covered with a
single roof, which has not, in its whole extent of combustible ma-
terial, a parapet wall, or other contrivance, to prevent the spread
of the flames in the event of a conflagration."
The feeling of responsibility, Mr. President, grows with the
growth of real civilization. It declines with the growth of that
mock civilization, but real barbarism, which has its origin in the
growing necessity for ships, wagons, and other machinery of trans-
portation. The policy of the central government tends steadily
towards its augmentation, and hence it is, that American shipping
so steadily declines in character, and in the proportions which it
bears to that of the foreigners with whom we are required to
compete.
Two years since, we were told, that our shipping already ex-
ceeded 5,000,000 tons that we had become the great maritime
power of the world and, of course, that this great fact was to
be received as evidence of growing wealth and power. Last year,
however, exhibited it as standing at only 4,871,000 tons, and
future years are likely to show a large decrease ships having
become most unprofitable. More than four-fifths of the products
of Western farms, and South-western plantations, are, as we have
seen, taken for the support of railroads and ships ; and yet, the
roads are bankrupt, while the ships have done little more, for some
years past, than ruin the men who owned them. Such being the
case, it seems little likely, that it is by means of sailing ships we
are to acquire that control of the commerce of the world, so con-
fidently promised when, in 1846, we were led to abandon the
policy which looked to the creation of a domestic commerce, as
the true foundation of a great foreign one. What are the pros-
pects in regard to that higher description of navigation, which
invokes the aid of steam, I propose to show in another letter
remaining, meanwhile, Mr. President,
Yours, very respectfully,
HENRY C. CAREY.
Philadelphia, February 6th, 1858.
PRESIDENT OF THE UNITED STATES.
LETTER EIGHTEENTH.
EVERY improvement in the construction of the ship tends to
lessen the proportion borne by her tonnage, to the weight of the
commodities to be moved. Every improvement in the quality of
the commodities moved, tends to augment* the proportions borne
by the value transported, to the tonnage of the ships required for
its transportation. Here, Mr. President, is a simple principle,
by aid of which we may, perhaps, be enabled to arrive at some
conclusion in reference to the tendency of our present policy
progress towards civilization having, everywhere, manifested itself
in a diminutio'n in the proportions borne by the machinery of
transportation, to the value of the things transported.
In the first year which followed the adoption of the Compromise
tariff, that of 1834-5, we sent abroad, cotton and tobacco, food
and lumber, to the amount of $92,000,000 ; and in that year, the
shipping, domestic and foreign, that cleared for foreign ports,
amounted to 2,030,000 tons. Six years later, in 1840-41, when
that tariff had but begun to operate, we exported, of the
same rude products, $98,000,000 the quantity of shipping
clearing from our ports having, in the same period, risen to
2,353,000 tons. Two years since, as has been shown, the total
value of these exports was $230,000,000, while the quantity of
shipping leaving our ports amounted to little less than seven mil-
lions of tons the increase in the former, in twenty years, having
been but 150 percent., while that of the latter had been little short
of 350 per cent.
If there is, Mr. President, any single proposition in social
science, that cannot be disputed, it is, that wealth, civilization,
and power, increase in the ratio of the diminution of the machinery
required for performing the work of transportation. On the turn-
pike, a single horse performs the work, that before had been done
by two ; and, on the railroad, a single car transports as great a
weight as, at first, had been done by hundreds of horses and men,
carts and wagons. With every movement in that direction, land
becomes more valuable, and man becomes more free. With each
and every one in the opposite direction, the value of land declines,
and man becomes more and more enslaved.
The first and heaviest tax, Mr. President, to be paid by land
and labor is that of transportation ; and it is the only one, to
which the claims of the State itself are forced to yield precedence.
Increasing in geometrical proportion, as the distance from market
increases arithmetically, therefore it is, that agreeably to tables
100 LETTERS TO THE
recently published, corn that would produce at market $24.75 per
ton, is worth nothing, at a distance of only a hundred and sixty
miles, when the communication is by means of the ordinary wagon
road the cost of transportation being equal to the selling price.
By railroad, under ordinary circumstances, that cost is but $2.40 .
leaving to the farmer $22.35, as the amount of tax saved to him
by the construction of the road ; and if we now take the product
of an acre of land, as averaging a ton, the saving is equal to inte-
rest, at six per cent., on $370 an acre. Assuming the product
of an acre of wheat to be twenty bushels, the saving is equal to
the interest on $200 ; but, if we take the more bulky products
hay, potatoes, and turnips it will be found to amount to thrice
that sum. Hence it is, that an acre of land, near London, sells
for thousands of dollars, while one of exactly equal quality may
be purchased in Iowa, or Wisconsin, for little more than a single
dollar. The owner of the first enjoys the vast advantage of the
endless motion of its products taking from it several crops in
the year, and returning to it, at once, a quantity of manure equal
to all he had abstracted ; and thus improving his land from year
to year. He is making a machine ; whereas, his western compe-
titor, forced to lose the manure, is destroying one. Having no
transportation to pay, the former can raise those things of which
the earth yields largely as potatoes, carrots, or turnips; or
those whose delicate character forbids that they should be carried
to distant markets ; and thus does he obtain a large reward for
that continuous application of his faculties, and of his land, which
results from the power of combination with his fellow-men.
In the case of the latter, all is widely different. Having heavy
transportation to pay, he cannot raise potatoes, turnips, or hay,
because of them, the earth yields by tons ; as a consequence of
which, they would be almost, even when not wholly, absorbed on
the road to market. He may raise wheat, of which the earth
yields by bushels ; or cotton, of which it yields by pounds ; but if
he raise even Indian corn, he must manufacture it into pork, before
the cost of transportation can be so far diminished, as to enable
him to obtain a proper reward for labor. Rotation of crops being,
therefore, a thing unknown to him, there can be no continuity of
action, in either himself or his land. His corn occupies the latter
but a part of the year, while the necessity for renovating the soil,
by means of fallows, causes a large portion of his farm to remain
altogether idle although the cost of maintaining roads and fences
is precisely the same, as if every acre were fully occupied.
His time, too, being required only for certain portions of the
year, much of it is altogether lost as is that of his wagon and
horses the consumption of which latter is just as great as if they
were always at work. He, and they, are in the condition of
steam-engines, constantly fed with fuel, while the engineer as
PRESIDENT OF THE UNITED STATES. 101
regularly wastes the steam that is produced a proceeding in-
volving heavy loss of capital. Further stoppages of employment
both for his land and for himself resulting from changes in
the weather, are consequent upon this limitation in the variety of
things that may be cultivated. His crop, perhaps, requires rain
that does not come, and his corn, or cotton, perishes of drought.
Once grown, it requires light and heat, but in their place come
clouds and rain ; and it and he are nearly ruined. The farmer
near London, or Paris, is in the condition of an underwriter, who
has a thousand risks, some of which are maturing every day ;
whereas, the distant one is in that of a man who has risked his
whole fortune, on a single ship. Having made the voyage, she
arrives at the entrance of her destined port, when, striking on a
rock, she is lost, and her owner is ruined. Precisely such is the
condition of the farmer who having his all at risk on his single
crop sees it destroyed by blight, or mildew, almost at the mo-
ment when he had expected to make his harvest. With isolated
men, all pursuits are extra-hazardous ; but as they are enabled
to approach each other, and combine their efforts, the risks dimin-
ish, until they almost altogether disappear. Combination of ac-
tion thus makes of society, a general insurance office, by help of
which, each and all of its members are enabled to secure them-
selves, against almost every imaginable risk.
Great, however, Mr. President, as- are these differences, they
sink almost into insignificance, compared with that which exists,
in reference to the maintenance of the powers of the land. The
farmer distant from market is always selling the soil, which con-
stitutes his capital ; whereas, the one near London, not only re-
turns to his land, the refuse of its products, but adds thereto, the
manure resulting from the consumption of the vast amount of
wheat brought from Russia and America of cotton brought
from Carolina and India of sugar, coffee, rice, and other com-
modities, yielded by the tropics of lumber and of wool, the pro-
ducts of Canada and Australia not only maintaining the powers
of his land, but increasing them from year to year.
The more perfect the power of combination, the greater is the
yield of the land ; the higher are the prices of the rude products
of the soil ; the smaller is the bulk of the commodities to be trans-
ported ; and the larger are the proportions borne by their value
to the machinery required for their transportation. That, Mr.
President, is the road towards civilization, but it is, also, the very
opposite of the road that we ourselves are travelling the quan-
tity of machinery required for the work of transportation, increas-
ing with a rapidity far greater than that which marks the growth
of values. This latter being the certain road towards barbarism,
we need look but little further for the causes of the decline in
morals, wealth, and power, now so rapidly in progress throughout
the Union.
102 LETTERS TO THE
The power to command the use of improved machinery, grows
with the growth in value of the things requiring to be transported
the farmer whose proximity to the mill enables him to send his
grain to market in the form of flour, being far more able to con-
tribute to the improvement of roads, than his fellow-farmer who
is forced to send it in that of wheat. It diminishes as the things
to be transported decline in value, and hence the weakness of
countries like Portugal, Turkey, and India, that are becoming
more and more dependent on distant markets. It diminishes
with us, and hence it is that our dependence on foreign
countries, even for efficient means of transportation, so rapidly
increases.
More than twenty years have now elapsed, since the arrival of
the Great Western steamer, and the establishment of the fact, that
we could avail ourselves of the power of steam, for the passage
of the broad Atlantic. For nearly all that time, we have been
struggling to obtain steam communication, by means of American
ships, with Europe the government aiding in the effort, to the
extent of many millions. What, however, has been the result of
all our efforts ? Ship after ship has been lost, until confidence in
American steamers has almost disappeared, and with it, the lines
of steamers. The Collins line, as it still is called, now dispatches
a single ship per month, and that, too, chiefly owned in Europe.
The Havre line dispatches a monthly ship. The Bremen line has
wholly disappeared. Mr. Yanderbilt has yet three ships engaged
in the European trade, but the recent accident to one of them can
scarcely fail to be felt injuriously by all annihilating the little
confidence that previously had existed. The day is fast approach-
ing, Mr. President, when no single steamer carrying the American
flag, will float upon the ocean, except government ships, and the
very few private ones engaged in the coasting trade, in which
foreign competition is wholly interdicted. Such being the facts,
and such the prospects, is it probable, that we shall long main-
tain that superiority on the ocean, which so certainly existed at
the time when the general government entered upon the career
of centralization ? It would seem not. Beaten in agriculture,
and beaten in manufactures, we are likely to be even yet more
thoroughly distanced in regard to ships ; and for the reason, that
our policy tends steadily towards lessening the value of the com-
modities seeking to be transported.
The French policy looking, as it does, to the emancipation
of land and labor from the tax of transportation is directly the
reverse of ours. We tax ourselves for the maintenance of millions
of tons of shipping, required for the transport of merchandise to
be given to France, in exchange for millions upon millions of tons
of food and other commodities, so reduced in bulk, that their
weight, in tons, is counted by thousands. JFreed, by that reduc-
PRESIDENT OF THE UNITED STATES. 103
tion, from all the cost of transportation, France is enabled to in-
voke the aid of steam, and to such extent, too, that the arrivals
of her own steamers, in her own ports, amounted, in 1856, to no
less than 8,000 tons per week; and more than four hundred thou-
sand, in the year.
France, Mr. President, is carrying out your own most excel-
lent views in regard to commercial policy laying a broad foun-
dation of domestic commerce, as a means of obtaining the largest
power of intercourse with the outer world. We, on the contrary,
are destroying the domestic commerce, in the vain hope of thereby
building up a great foreign one. Why have we no steamers run-
ning to Rio, to Buenos Ayres, to Montevideo, to Valparaiso, to
Lima, or Australia ? Because we have little to sell, except those
rude products of the earth, which the people of Brazil, or Chili, do
not need to buy. Before they can do so, those commodities must
pass through the looms of Manchester and Lyons, and hence it
is, that nearly all our intercourse with the world is burthened
with costs of transportation so enormous, that our farmers are
generally poor, although themselves the owners of the land. In
search of trade, we fit out expeditions against Japan involve
ourselves in disputes with Paraguay and Buenos Ayres explore
African and South American rivers and maintain an enormous
diplomatic establishment throughout this continent; and yet, have
scarcely any thing to sell, except to the people of France and
England.
What we need, Mr. President, is that real free trade, which
consists in maintaining direct intercourse with the world at large ;
but that we cannot have, so long as we shall continue to export
our commodities in their rudest state. The farmer who has but
one mill at which to grind his grain, has no freedom of trade.
The miller and the baker have it they being free to sell to whom
they please. Our farmers and planters have none of it being
compelled to send their products to the distant mills, before they
and their neighbors can make exchanges, even among themselves.
They need, as you so well have seen, that real free trade which
would enable the planter of Mississippi to exchange with the
farmer of Illinois receiving cloth, lead, and iron, in exchange
for sugar and cotton. "That," as you have said, "is the free
trade we want." That we may have it, we must diversify the
employments of our people ; .we must enable them to combine
their efforts; we must relieve our farmers from a tax of trans-
portation, greater than is required for maintaining, ten times
over, all the armies of Europe ; we must enable ourselves to
pay our debts to the land, and thus obtain a real agriculture, in
place of the system of spoliation that now exists ; we must
establish a balance of trade in our favor, payable in the precious
metals, and thus enable ourselves to maintain the real specie cur-
104 LETTERS TO THE
rency, that you so much desire to see established. Those things
done, we shall be able to command the use of machinery of
exchange of the highest order fleets of steamers taking the place
of sailing ships, and the use of money becoming obtainable, with-
out the payment of a higher interest than is paid in any other
country of the world, claiming to be held as civilized. Such,
Mr. President, is the real road to wealth and power ; but, as you
have seen, all our movements are in the reverse direction.
Yours, very respectfully,
HENRY C. CAREY.
Philadelphia, February $th, 1858.
PRESIDENT OF THE UNITED STATES. 105
LETTER NINETEENTH.
"NOTHING," says Hume, " is esteemed a more certain sign of
the flourishing condition of any nation, than the lowness of inte-
rest" or, in other words, the moderation of the charge for the
use of that greatest of all the instruments used by man, called
money. It is, Mr. President, an evidence of the existence of that
feeling of security, which always attends advance of civilization
the rate of interest being very high in all countries in which pro-
perty is insecure, and declining steadily as we pass outward, to-
wards those in which men are more and more enabled to combine
their efforts for the promotion of the common good in which
population and wealth increase in which the land becomes more
productive in which the prices of raw materials tend to rise, and
those of finished commodities to fall and in which, consequently,
the power to purchase the precious metals augments from year to
year.
That power, and the tendency to decline in the rate of interest,
exist in every community, in the precise ratio of the activity of the
circulation of labor and its products. The more perfect the ex-
isting supply of money, and the more it is utilized, the more rapid
is the circulation, and the greater the tendency to increase in the
ability for further purchases. The less the supply, and the less it
is utilized, the slower is the societary circulation, and the greater
is the tendency to lose the money that had before been purchased.
In the one case, labor obtains power over capital, and the rate of
interest falls. In the other capital obtaining increased control
over labor the rate of interest rises. The first of these classes
of phenomena obtains in all those countries, that follow in the lead
of France importing raw materials, and exporting the products
of their soil in the most perfect form. The second is found in all
of those, that follow in the direction now indicated by England
exporting the rude products of the soil, and re-importing them
again in a finished state ; as is the case with Ireland, India, Ja-
maica, Portugal, Turkey, Mexico, and all the States of Southern
America.
In further proof of this, we may take the various phenomena
presented by ourselves, as our policy has changed from time
to time, within the last half century. In the period of free
trade that followed the close of the great European war, circula-
tion almost ceased labor was everywhere wasted production
was small and money was scarce and high. In that which fol-
lowed the passage of the highly protective act of 1828, everything
was different the circulation having then been rapid, labor in
demand, production great, and money low in price. The scene
106 LETTERS TO THE
being once more changed, production declined, while money rose
with great rapidity becoming, at length, so entirely unattain-
able, that banks suspended, States defaulted, and the Federal
government was wholly bankrupt. The protective policy being
again adopted, production increased with great rapidity, while
the rate of interest fell. It has now been high for years, and for
the reason, that production has been steadily and regularly de-
clining in its ratio to the population. In proof of this, we have,
Mr. President, the fact, that the consumption of food, cloth,
and iron, bears now a smaller proportion to the numbers of the
people, than it did ten years since. The facts of the past three
years thus correspond, exactly, with those observed in those
that followed 1836. Interest was then high foreign loans were
large and emigration to the West was great. Speculation was
then rife, as it so recently has been ; but daily diminution of pro-
duction laid the foundation of the distress and ruin, that became
so universal in 1842.
That real prosperity is totally inconsistent with an advancing
rate of interest, is a fact whose truth is proved by every chapter
in the world's history. In that direction, lie centralization and
slavery increase in the charge for the use of money being evi-
dence of growth in the power of the accumulations of the past,
over the labor of the present of capital over labor. In proof
of this, we have the fact, that throughout an important portion
of the Union, the pro-slavery feeling keeps steady pace with the
exhaustion of the land, consequent upon the export of its products
in their rudest shapes with the export of the precious metals
and with the increase in the price of money.
Money is often spoken of as capital ; and thus we are told,
that interest is high, because " capital is scarce." There would,
however, be as much propriety in saying, that rents, tolls, or
freights, were high, because capital was scarce. Interest is always
high, when money, from whatsoever cause, is scarce ; and the high
price then paid for its use, causes a deduction from the profits of
the trader, from the. rents of houses, and from the freights of
ships. The owner of money then profits at the expense of all
other capitalists. Interest is the compensation paid for the use
of the instrument called money, and for that alone. In countries
in which it is high, the rate of profit is necessarily so, because
the charge for the use of money enters so largely into the trader's
calculations.
The high profits of our Western States are said to be the cause
of the high interest that is paid ; but here, as everywhere, modern
political economy substitutes effect for cause. Interest there is
high, because money the thing for which, alone, interest is paid
is scarce ; and because its scarcity enables the men who can com-
mand the use of machinery of exchange, to obtain large profits,
by means of standing between the producer who needs advances
PRESIDENT OF THE UNITED STATES. 107
on his corn, and the consumer who requires credit on his cloth
and iron. Wherever it is scarce, circulation is sluggish ; the
waste of the physical and mental power is great ; and the man
who can then command the use of that indispensable machinery,
becomes even more the master of him who desires to use it, than
the transporter does, when crops are large, and ships are scarce.
Daily experience, Mr. President, teaches the farmer, that when
money the machine by means of which exchanges are made
from hand to hand circulates freely, he becomes more prosper-
ous from day to day ; whereas, when it is scarce, and circulates
slowly, his prosperity disappears. It is not capital that is needed,
but money the machine by help of which the products of labor
and capital are kept in motion, and without which they can move
only in the fashion of primitive times, when skins were traded for
knives and cloth. Our actual capital, hhouses, lands, factories,
furnaces, mines, ships, roads, canals, and other similar property,
has, in the last ten years, been increased by the application of
labor to the extent of thousands of millions of dollars ; , and yet,
we everywhere see roads half finished, and unlikely soon to be
completed, although laborers are seeking employment ; mills
stopped for want of demand for their products ; laborers unable
to sell their labor ; and men of business compelled to curtail their
operations, because of the difficulty experienced, in obtaining the
means with which to pay their debts. Why is this so ? Not,
certainly, because of any diminution of capital, for that is greater
than it has ever been.
Were it possible now to announce, that, by reason of any change
of policy, the export of gold would be stopped, and that the quan-
tity in the country would steadily be increased, by retaining here the
produce of California, money would forthwith become abundant and
cheap circulation would recommence and prosperity would reign
throughout the land ; and yet, the difference in the ensuing year,
would not amount to a quarter of one per cent, of the value of
the land and labor of the country. Capital would be increased
by a portion so minute as scarcely to be discernible, and yet the
money value the value at which it would be exchanged would
be augmented by thousands of millions. At present, all is stag-
nant, and there is little force. Then all becoming life and mo-
tion the force exerted would be great.
It is not, however, Mr. President, in the quantity of money
held by a community, that we are to find the test of its prosperity,
or the index to the rate of interest ; but in the rapidity with which
it circulates. Steadiness and regularity in the motion of society
are requisite for the production of confidence, and increase of mo-
tion and force results from confidence. The gold held by the
banks, the people, and the government, is said to exceed by more
than $150,000,000 what was held but a few years since; but
there being no regularity in the societary movement credit is
108 LETTERS TO THE
ranch impaired. As a consequence of this it is, that the circula-
tion is sluggish, and that the rate of interest has, for years, been
so very high, as greatly to limit the disposition to engage in any
operations requiring time for their completion. The moneyed
capitalist profits by this obtaining treble or quadruple the usual
rate of interest ; but the miner, the founder, the cotton-spinner,
and the cloth-maker, have been, and are being, ruined by it.
The existence of credit is an evidence of the existence of that
confidence of man in his fellow-man, which always attends the
growth of real civilization. How it tends to stimulate the socie-
tary motion, and thus to augment the productive power, is so well
exhibited by a recent French economist, that I am induced, Mr.
President, to present for your consideration, the following extract
from his work :
"On one side," say M. Coquelin, "we see a machinist, a
blacksmith, and a wheelwright, whose shops are closed, not per-
haps because of any want of raw materials, but because of absence
of demand for their products. Elsewhere, are manufacturers in
want of machinery, and farmers in need of agricultural implements.
Why, now, is it that these latter do not give to the former, the
orders for want of which they continue idle ? Because these latter
must be paid in money, which money the others cannot at the
moment pay ; and yet they have, in shops or barns, abundance
of commodities that they desire to sell, and by the possession of
which many of the neighboring people would be greatly served.
Why do they not exchange? Because direct exchange being
impossible they must commence by selling ; and, as they, in
their-turn, must demand money, they can find no purchasers.
Here we have a suspension of labor on both sides, and it is in
cases like this, that production is languid and society vegetates,
although surrounded by all the elements of life, motion, and
prosperity.
"Means might, however, be found for removing the difficulty
that thus exists. If the machinist, the blacksmith, and the wheel-
wright, refuse to deliver their products, except for ready money,
it is not because of any doubt they entertain of the future solvency
of the farmer, or the manufacturer ; but because it is inconvenient
to them to make credit sales that would diminish their active
capital, and perhaps disable them from continuing their opera-
tions. Let each one, then, in delivering his articles, as he has
confidence in the future ability of those who now demand them,
require only, in place of money, a note that, in his turn, he can
use, with those who furnish him. On this condition, circulation
will be re-established, and labor will be resumed. True, but we
must first be sure that these notes, when accepted, will be received
elsewhere, as, otherwise, it becomes at once a simple sale on credit.
This certainty, however, cannot be obtained, and therefore they
refuse the notes ; not because of any suspicion of their ultimate
PRESIDENT OF THE UNITED STATES. 109
value, but because of doubts of the possibility of disposing of
them. At this moment a bank intervenes, and says : 'You,
machinist, deliver your machinery ; you, blacksmith, your instru-
ments ; you, ploughman, your raw materials ; you, manufacturer,
your manufactures : accept, with confidence, notes payable at a
future time, provided you have full belief in the goodness of
those who will thus become your debtors. I will take charge of
all those notes, and hold them until they shall become due giv-
ing you in exchange other notes, issued by me, that you will be
certain to find of universal acceptation.' Forthwith, all difficulty
is at an end sales being made, goods circulating, and produc-
tion becoming animated. There are no longer raw materials, in-
struments, nor products of any description, remaining, even for a
moment, unemployed."
There is, here, Mr. President, no change in the quantity of capital
owned by the community, and yet, its members are seen passing
from a state of apathy and idleness to one of activity and produc-
tiveness enabling every one to sell his labor receiving in ex-
change the commodities required for the consumption of wives and
families, who before were like to suffer for want of the common
necessaries of life. What, however, is it that gives value to these
notes, and why is it that they circulate so much more freely than
those of the blacksmith and the farmer ? Because there exists in
the community, a confidence that behind them stands a pile of
money sufficient to redeem each and every one of them, when-
ever, and however, presented. Without the existence of that be-
lief, they would not circulate, as would soon be seen, were there
established a drain of gold producing a steady diminution of
the quantity in the possession of the bank, until at length even a
single note failed to be paid on presentation. From that moment
their circulation would be stopped ; the suspension of movement
would again take place the blacksmith, the machinist, and the
wheelwright, again mourning over instruments that they would
gladly exchange for food and cloth ; and the farmer and the manu-
facturer suffering from the difficulty of obtaining machinery, for the
better production of food and clothing. Money is to society what
fuel is to the locomotive, and food to the man the cause of
motion, whence results power. Withdraw the fuel, and the ele-
ments of which water is composed cease to move, and the machine
becomes stationary. Withdrawal of the food from man, is followed
by paralysis and death ; and such, precisely, is the effect of failure
of the necessary supply of money the producer of motion, among
the elements of which society is composed.
When, therefore, the farmer complains that money is scarce,
and the laborer, mechanic, and manufacturer, repeat the complaint,
they are right. It is money that is needed, and their common
sense does not in any manner deceive them. In every country of
the world, pleasant feelings are excited by hearing of the incom-
110 LETTERS TO THE
ing of gold and silver, because therewith are associated ideas
of activity and energy ; while, on the contrary, fear and sorrow
are excited by their outgoing there being therewith associated
ideas of dnlness, inactivity, suffering, and death. The former,
Mr. President, have been the feelings prevalent throughout this
country in the closing years of the several trials we have made of
the protective policy to wit, in 1816, 1834, and 1846 the
precious metals having then flowed in, confidence having been
mutual, and money having been readily obtainable at the legal
rate of interest. The latter feelings have prevailed in the closing
years of every trial of the free-trade system those metals having
then flowed out confidence having disappeared and the charge
for the use of money having ranged from 12 to 50 per cent.
The cause of all the differences then observed, is to be found
in the fact, that in the first, the policy of the central government
has tended to promote the growth of combination among our peo-
ple to increase the facilities of exchange and to augment pro-
duction ; whereas, in the other, it has tended to destroy the power
of association to lessen the facilities of intercourse and to
diminish the productive power. In the one, we have been enabled
to obtain improved machinery passing from the turnpike to the
railroad from the sailing ship to the steamer from the hand-
loom to the power-loom and from irredeemable paper-money to
a real specie circulation. In the other, our machinery has steadily
deteriorated railroads going to ruin steamers diminishing in
number the spindle and the loom giving place to the wagon
and specie disappearing, to be replaced by the inconvertible notes
of cities, counties, and banks, and of the national treasury itself.
Diminution in the rate of interest, Mr. President, is an evidence
of advancing civilization. With us, the rate increases, and there-
fore it is, that each successive year brings with it new combinations
for procuring a repeal of the laws limiting the rate at which
money may be lent. The cause of all this, is to be found in the
fact, that the policy of the central government looks steadily to-
wards an increase in the power of the trader, and in the tax of
transportation augmenting, as it does, the quantity of shipping
required for transporting any given value of our products, and
thus diminishing the power to purchase that highest and best of
all the machinery of exchange, called money. Under a different
system, that power would steadily increase, and usury laws would
gradually die out the standard rate of interest falling below the
legal one. All the efforts for the repeal of those laws, are to be
regarded only as furnishing additional evidence of the growing
power of capital over labor always a characteristic of declining
civilization.
Our present position, Mr. President, is precisely similar to that
described in the above extract from M. Goquelin's excellent little
book. With a large supply of lands, houses, corn, cotton, and
PRESIDENT OF THE UNITED STATES. Ill
other commodities and things, we have little commerce among
ourselves. Corn abounds, but the laborer perishes for want of
food. Houses abound, but wives and children wander through
our streets for want of shelter. Ships abound, but their owners are
mined for want of freights. Coal abounds, and yet men, women,
and children perish of cpld. Commerce, so far as regards the
sale of labor, has almost ceased to exist. Why is it so ? Because
money has ceased to circulate, and in the absence of that circula-
tion, the societary movement, called commerce, can have no exist-
ence. Why has it ceased to circulate ? Because confidence has
wholly disappeared. Why has it disappeared ? Let us inquire.
History, as we are told, is philosophy teaching by example.
What, then, does history tell us ? When has confidence most
prevailed ? Has it not been in the closing years of the three pro-
tective periods those periods in which there was an inward flow
of the precious metals ? When has it most entirely disappeared ?
Has it not been in the closing years of the three free-trade periods
those periods in which gold and silver flowed outwards?
When has the price of money been most regular ? Has it not
been in the protective periods ? When has it been most irregular ?
Has it not been in the free-trade ones ? When have we become
rich and strong ? Has it not been in the protective periods ?
When have we become gradually poorer and weaker ending
with general bankruptcy ? Has it not been in the free-trade pe-
riods ? When has labor acquired power over capital ? Has it
not been in the protective periods ? When has capital acquired
power over labor ? Has it not been in the free-trade periods ?
To these questions, the answer must be in the affirmative our
tendency in the one having, always, been towards localization and
freedom, and in the other, as regularly, towards centralization and
slavery.
Such, Mr. President, having been the law of the past, what is
to be that of the future? If protection has given us wealth,
strength, credit, and power, in the past, must it not do the
same in the future ? If the system called free trade has given us
poverty, distrust, and weakness, in the past, can it do otherwise in
the future ? Assuredly not, and for the reason, that it looks to
the exhaustion of the soil, the impoverishment of the farmer, the
increase of the power of the trader in goods and money, the
annihilation of the power to obtain the machinery required for
reducing the labors of production, and the destruction of confi-
dence of man in his fellow-men. So long as that system shall
be continued, there can be no general revival of confidence, be-
cause property must, and will, become less and less secure. That
it may be revived, it is needed that the central government change
its system abandoning at once, and for ever, the idea of main-
taining a hard money currency while pursuing a policy tending to
the expulsion of the precious metals, and, that of building up a
112 LETTERS TO THE
great foreign commerce, by aid of measures tending to destroy
the domestic one.
That further progress, in its present direction, must be produc-
tive of effects the most disastrous, will be obvious to you, Mr.
President, on a careful study of the facts presented for considera-
tion by the last few years. With a larger supply of the precious
metals than we ever before possessed, but without the smallest
confidence in the duration of the apparent prosperity, gold has
been secreted to such extent, that the price of money has been so
high as to have proved utterly destructive to the really working-
men of the community all their apparent profits having been
absorbed by the payment of usurious interest. Mills, factories,
mines, and furnaces, as a consequence, have been closed, to the
utter ruin of their owners. Workmen, of all descriptions, have
been obliged to seek in the West the food denied to them at home.
There arrived, they have found the public lands monopolized by
speculators, to whom they have been obliged to pay double, treble,
or quadruple prices, for the little land they needed. Thus plun-
dered at the outset of their operations, they have been compelled
to borrow money, paying for its use, at every rate from 20 to 70
per cent, a year. The bubble having burst, they find themselves
in the hands of their usurious creditors, and now the sheriff will
complete the work.
The whole policy of the central government tends, thus, to the
annihilation of the really useful portion of society, and to the ag-
grandizement of traders in money, in land, in cloth and cotton, in
principles, and in men ; and, as a necessary consequence, the de-
moralization of society becomes more complete with each succes-
sive year. The range of honest employment becoming daily more
and more restricted, men are driven, by sheer necessity, to engage
in schemes of public and private plunder, from which, under other
circumstances, they would shrink back, shuddering at their very
thought. How long, Mr. President, can such a state of things
endure ? Is it possible, under such a course of operation, to
build up a stable system ? That it is not, is proved by all the
facts of history. A change must come in the policy of the govern-
ment, or the government itself will undergo a change.
The commerce that you, Mr. President, have so well described,
as being the sort of free trade that we really need, is all that is
required to render money abundant and easily obtainable at a
moderate interest, with larger power to obtain mills, steamers,
money, and all other machinery, than is now possessed by any
other community of the world. Give the people but thai com-
merce, and confidence will be at once restored.
Yours, very respectfully,
HENRY C. CAREY.
Philadelphia, February 12th, 1858.
PRESIDENT OF THE UNITED STATES. 113
LETTER TWENTIETH.
I
THAT the rate of interest, throughout the Union, is very high,
and that it constitutes a serious obstacle to the extension of manu-
factures, to the development of our vast treasures of coal, iron,
and other metals, and to the creation of a domestic market for
the produce of the soil, are facts, Mr. President, that cannot be
denied. We are, however, assured, that their existence is conse-
quent upon the deficiency of a certain something, called capital
that time, alone, is required for obtaining the necessary supply
and that, then, money will be cheap, and manufactures will be
established. What, however, has been the direction in which we
have moved, in the last few years ? Have we advanced, or retro-
graded ? Has the price of money fallen since 1846 ? Has it not,
on the contrary, greatly risen ? Is capital more easily obtainable,
for mining, or for manufactures, than it was, ten years since ?
Has not, on the contrary, the capital that then was so engaged,
almost entirely disappeared ? Are our farmers less dependent on
the distant market, than they were in 1846 ? Have they not, on
the contrary, become greatly more dependent? If, then, for the
last twelve years, our movement has been retrograde, is it pro-
bable, Mr. President, that further continuance in the line of
policy to which that effect is due, will change the movement to
a forward one ? Scarcely so, as it would seem.
Capital abounds, and the price paid for the use of the instru-
ment called money, is low, in all those communities, in which em-
ployments have been diversified ; those, in which the consumer
and the producer have taken their places by each other's side ;
those, in which the tax of transportation is small ; those, in which
agriculture is becoming a science ; those, in which the yield of
the land steadily increases ; those, whose raw materials steadily
rise in price ; those, consequently, whose growing wealth enables
them to increase their supplies of the precious metals, as is the
case with the countries of Central and Western Europe those
which follow in the lead of France.
Capital is scarce, and interest is high, in all those countries
which are dependent upon a nearly exclusive agriculture ; those
whose markets are distant ; those which are subject to heavy tax
for transportation; those whose agriculture consists in robbing
the earth, and selling the soil ; those, the yield of whose land de-
creases ; those, whose raw materials fall in price ; those, conse-
quently, whose poverty forbids increase in the supply of the pre-
cious metals, as is the case with Ireland, India, Portugal, Turkey,
and all other countries which follow in the lead of England.
114 LETTERS TO THIi
Capital being scarce among these latter, they are constantly
assured that, under existing circumstances, it is absurd for them
to attempt to convert their corn and their wool into cloth, or their
coal and ore into iron. It is, however, manufactures that cause
the growth of capital facilitating, as they do, the development
of the powers of THE MAN, and thus enabling him to combine
with his fellow-men, for economizing the power resulting from the
consumption of capital in the form of food.
Every act of combined action, Mr. President, has for its object,
and its effect, a saving of human effort, which, itself, is capital.
Sometimes, a few individuals combine to drain a piece of land ;
at others, to dig a well, to construct a mill, or to open a mine ;
all of which require capital ; that is to say, the investment of a
certain amount of labor, upon the same principle, identically,
that the farmer ploughs his land, and sows his seed calculating
upon having it returned, with interest for its use. When Crusoe
made his rope-ladder, he did so for the reason, that it was better
for him at once to expend a few hours, or, in other words, a little
capital, than to waste, throughout the year, an hour a day, in
climbing the rock under which he had taken up his abode. All
the labor thus economized, was capital.
"What," says a recent French economist "What is the ob-
ject, what the result, sought to be obtained by every advance of
capital, for whatsoever purpose ? It is, everywhere and always,
that of suppressing, by means of a certain quantity of labor once
performed, a certain portion of current labor and annual ex-
pense that would otherwise re-appear periodically, and for an
indefinite period of time ; it is to exonerate, at the cost of a
momentary sacrifice, the whole future of production.
" Every intervention of capital has the effect of diminishing
daily labor, resulting from the constantly recurring difficulty of
an operation : thus, we have here a village situated at the dis-
tance of a mile from a river each of its people, when he has
occasion for water, being required to walk that distance. No
capital is expended, but there is a periodical demand for labor,
carried to its highest point. The inhabitants, at length, conceive
the idea of making some earthen vessels, having done which, they
go once a day returning with the day's supply of water. Capital
now making its appearance in the once-performed labor of making
the vessels, the daily expenditure of human effort is diminished,
in the proportion that the one walk to the river, bears to the five,
or six, that would, otherwise, have been required.
" Next, some one constructs a cask, and a wagon attaching to
the latter an ass, or an ox, and carrying water about the village.
Here is a new expenditure of capital, but, in return, there is eco-
nomy in the daily labor proved by the fact, that the people now
buy their water, in place of going to get it. At length, however,
.an aqueduct is built requiring an enormous expenditure of
PRESIDENT OF THE UNITED STATES. 115
capital ; but the daily effort that had been needed for obtaining a
supply of water is from this time at an end capital having, so to
speak, altogether superseded labor.
"The proof that all these successive interventions of capital
have been economies of force, time, and money, is, that all these
expenditures have been' returned in the value of the water ob-
tained ; and that, while casks, wagons, and buildings, have been
paid for and maintained, the price of water has steadily fallen ;"
and, as the author might well have added, the consumption has
so much increased, that a single family now consumes more than
would, at first, have supplied the village.
In writing this passage, M. de Fontenay had no reference, what-
soever, to the question of protection of the claims of commerce
on the one side, or of those of trade on the other ; but, it is the
characteristic of propositions that are true, that they, at all times,
and everywhere, prove themselves true. The great object of man,
Mr. President, being that of acquiring power over nature, the
more he does so, the less is the value of the commodities he re-
quires, the greater is his own, and the larger becomes his con-
sumption. To attain power, there must be combination of effort.
The obstacle to association being found in the, necessity for trans-
portation, the more it can be removed, the greater is not only the
present power of man, but the greater his capacity for new and
more important efforts. The spring beingi distant, he calls to his
aid, in regular succession, various natural forces passing from
the mere hand to the jug, the cask, and the wagon, with constant
decline in the cost and value of water. When, however, he con-
structs an aqueduct, and is thus enabled to avail himself of the
power of gravitation, value ceases water becoming cheap as air.
The Indian path being bad, he determines, once for all, to
make a road, the effect of which is soon exhibited in the fact,
that he is enabled, once again for all, to make a turnpike ; and
yet, so much are his powers thereby augmented, that we find him
again, once for all, investing millions of present labor in construct-
ing a canal then regarded as the neplus ultra of improvement.
Here again, however, Mr. President, we find it to be only the
first step that costs the economy of labor effected by the canal
proving so great, that but a trivial portion is required for the
construction of a railroad, that transports himself and his mer-
chandise at a cost so small, as to treble the reward of labor.
The school-house being distant, his children are obliged either
to dispense altogether with education, or to waste most of their
time on the road thereto. Seeing himself surrounded by the ma-
terials of which houses are composed, he proposes to his neigh-
bors that they shall, once for all, give their labor to the construc-
tion of a house thereby enabling themselves to economize the
labor of placing their children on the spot at which they are to be
116 LKTTERS TO THE
instructed ; and now instruction so much declines in cost, that
ten times as many children are enabled to profit by it.
The market being distant, he is obliged to incur, daily, the cost
of transferring his wool and his corn, to be exchanged for cloth.
Looking around, he sees that nature has furnished him with the
same forces, precisely, with those in use among the distant millers.
The fuel will give as much heat; and the ore will make iron of equal
strength. He therefore proposes to his neighbors, that they shall,
once for all, unite together for building a stack through which to
pass the ore and the coal, the laborers in which will eat the corn
that now they are obliged to carry to the distant market thus
terminating, at once and for ever, the necessity for so much trans-
portation.
, The iron now obtained, he next, Mr. President, suggests, that
steam can as well be made to spin and weave cotton in their own
neighborhood, as in any other ; that stone, lumber, and lime, are
abundant all that is required, for economizing the daily labor
of transportation, being, that they should, once for all, club to-
gether for putting up a house, and for bringing from abroad a
little machinery, and the skill required for working it. Further,
he says to them : " We are, ourselves, unemployed for more than
half our time, and, as regards our children, they are almost wholly
so. Though unfit for the labors of the field, they yet could well
perform the lighter work of tending the operations of a mill.
Again, the minds of our people are undeveloped. Let us have
them taught, and in a brief time obtaining machinists of our
own it may be. that we shall be enabled to teach those among
whom we now must seek for knowledge. We waste, daily, the
powers of earth and air, for want of little machines, that would
enable us to use them ; we waste the faculties of our people, be-
cause there is no demand for them ; we waste their time and our
own, for want of combination ; we waste the major part of the
products of our land in feeding the horses and men who carry the
rest to market exhausting the soil, because the market for its
products is so very distant. Let us, then, once for all, combine
for the purpose of putting a stop to all this waste. With every
step we make in that direction, we shall offer new inducements
for carpenters and masons, printers and teachers, to come among
us eating the food, that now we are forced to carry to the dis-
tant market ; with each, the faculties of our people will become
more and more developed enabling us more and more to perfect
the various processes by means of which to obtain command over
steam and other natural forces. With each, there will be an in-
crease of commerce among ourselves, attended by diminution of
our dependence on the trader, and an increase of power to com-
mand his services in case of need. The more numerous the
differences among ourselves, the more rapid will be the motion of
the societary machine, the greater will be the economy of labor,
PRESIDENT OF THE UNITED STATES. 117
the smaller will be the value of commodities, and the greater that
of man.- 7 '
Such, Mr. President, were the objects sought to be attained by
Colbert, to whom France was indebted for the system since so
steadily carried out ; that, to which she owes it, that she has
"covered herself with machinery and mills" that "her collieries,
her furnaces, and her workshops of every description, have grown
to an enormous extent, and out of all proportion to what existed
eighty years since " that the value of her land has so immensely
increased that the power of the laborer to command supplies
of food has doubled, where, even, it has not trebled and that
she herself is now so powerful.
Directly the reverse of this, is the doctrine lying at the founda-
tion of the system that would make of Britain the workshop of the
world ; that, for the maintenance of which, we are taught that
man begins everywhere with the richest soils all old communi-
ties being required to resort to poorer ones, with daily diminution
in the demand for labor. To our farmers and planters, and to
those of Brazil and Cuba, it says "Cultivate your rich soils,
and leave us to our poor ones. Labor being cheap with us, we
can manufacture more cheaply than you can do. Do not, there-
fore, once for all, build mills or furnaces ; continue year after
year to expend your labors in carrying produce back and forth ;
continue to exhaust your land ; continue to have no combination
of effort among yourselves ; and you will grow rich. The time,
however, will arrive, when you will be forced to cultivate the poor
soils, and then you will be troubled with over-population. Wages
falling, you may then be enabled to accumulate the capital required
for entering into competition with us ; that is to say, the poorer
you become, the greater will be your power."
Such, Mr. President, is the doctrine of the school that is based
upon the idea of trade being the first pursuit of man ; that, by
help of which the system has, thus far, been carried out. It is
one which cannot stand against the facts everywhere established,
that man always commences with the poorer soils ; that it is only
with the growth of the power of association and combination that
the richer ones are brought into activity ; that, to have combina-
tion, there must be differences of employment, tending to the de-
velopment of the individual faculties ; and that, where such differ-
ences are not found, the whole course of man is towards the ex-
haustion of the land first cultivated towards diminution in its
value, and increase in that of all the commodities required for
his use and towards his enslavement, both by nature and by his
fellow-man. Under that system it is, that Ireland wastes, weekly,
more labor than would, if applied once for all, give her the ma-
chinery required for enabling her to make a domestic market for
all her food, and all her labor ; that Portugal and Turkey waste,
daily, more muscular and intellectual power than would, if applied
118 LETTERS TO THE
once for all, give them machinery for making all the cloth they
now consume ; that Jamaica has been exhausted ; and that the
people of India have been condemned to remain idle, when they
would desire to be employed ; to relinquish rich soils, and retire to
poor ones ; to abandon cities iu which once lived hundreds of
thousands of poor, but industrious and happy, men foregoing
all the advantages of commerce, and becoming dependent, alto-
gether, on the chances of trade.
Following in the lead of France, the people of Northern Eu-
rope, generally, have protected themselves against this system
the result being seen in the facts, that the prices of raw materials
and finished commodities are there steadily approximating ; that
gold flows rapidly in ; that the rate of interest is moderate ; that the
circulation of society becomes from day to day more rapid ; that
the proportion borne by fixed to floating capital is a constantly
increasing one ; and that the power of the trader and transporter
rapidly declines all of these phenomena being evidences of ad-
vancing civilization, consequent upon the determination, once for
all, to make the investments required for bringing the consumer
to the side of the producer, and thus relieving the former from
the wasting tax of transportation.
Guided, or governed, by England, Ireland, Turkey, Portugal,
and the United States, have refused to make the effort, once for
all, to relieve themselves from that oppressive and daily recurring
tax the result being seen in the facts, that the prices of raw ma-
terials and finished products steadily recede from each other;
that gold flows regularly abroad; that the rate of interest is
high ; that circulation becomes more languid ; that the proportion
borne by floating capital to that which is fixed is a constantly in-
creasing one ; and that the power of the trader and transporter
steadily increases all of these phenomena being evidences of de-
clining civilization.
Food, Mr. President, is capital. Having been consumed, it is
still capital, in the form of the power to labor, with the body, or
the mind, or both. That power being exerted, it re-appears in
the form of food or cloth books or newspapers. Not exerted,
it is altogether lost labor-power being, as you have seen, the
only commodity, that cannot be kept, even for a second.
The power to accumulate capital exists in the direct ratio of
the power of combination, and that itself exists in the ratio of the
diversity of employments. That understood, there can be little
difficulty in arriving at a proper understanding of the causes, why
it accumulates so rapidly in Central and Northern Europe, and
why it disappears so rapidly from Turkey and Portugal, Ireland
and India.
Careful study of these simple principles, Mr. President, will
enable us readily to understand why it has been, that capital has
always so much abounded, when we have had protection, and why
PRESIDENT OF THE UNITED STATES. 119
it has so entirely disappeared, when we have had the system known
by the title of "free trade." The one looked to economizing
labor, which itself is, as you have seen, capital. The other looks
to wasting labor, or capital. Under the one, as in 1833 and 1846,
capital was readily obtainable, at moderate rates of interest, for
any useful purpose. Under the other, as in 1822 and 1842, and
as at the present time, it has become so scarce, as to be unattain-
able for the construction of roads, for the building of mills, or for
the opening of mines, at any rate of interest, however high.
Were the tariff of 1842 this day re-enacted into law, the face
of affairs throughout the country would be wholly changed
capital becoming at once abundant the rate of interest falling
and labor coming into demand to such extent, that men, women,
ami children, would find all the employment they could desire ;
and that, too, before the lapse of thirty days from the present
hour. Why, Mr. President, would it be productive of such re-
sults ? Because, there would at once arise, throughout the coun-
try, a confidence, that labor was again to be economized that
that internal intercourse which, as you, Mr. President, have seen,
we so greatly need, was to be obtained that the great domestic
market for food and labor was to be extended and that we were
again to become rich and strong enough to be enabled to purchase
full supplies of the precious metals, as was the case in the protec-
tive periods which closed in 1835 and 1847.
What we need is confidence in the future. Let that be ob-
tained, and capital will, from the instant, become as abundant as
we have ever known it. Give us that, and there will exist no
barrier to the maintenance of a specie circulation. Give us that,
and the occasion for extending the central powers at the expense
of the local ones, will pass away. Give us that, and our every
future step will be towards happiness, wealth, and power, and
towards domestic and foreign peace. Refuse that, and each suc-
cessive step will be attended by growing misery among the peo-
ple, and discord among the States.
The strength of every nation, as compared with other nations,
grows in the ratio of the growth of the power of combination
among the people of whom it is composed. That power grows
with the growing diversity of employments. With us, that diver-
sity diminishes, and hence the steady decline in the respect iu
which we are held, and in the power we exercise.
With great respect,
Your obed't servant,
HENRY C. CAREY.
Philadelphia, February 16th, 1858.
120 LETTERS TO THE
LETTER TWENTY-FIRST.
How is it, that protection can be needed ? Why is it, that each
and every man is not to be free to use his products as he pleases
exchanging, equally freely, abroad and at home? How is it
possible, that our people have been, or can ever be, more pros-
perous under a protective system, than under what is called a
"free trade" one? These, Mr. President, are important ques-
tions seeking replies to which, we must now turn to some of the
pages of our Colonial history.
In one respect, the Colonial system of England has differed from
all others that have existed the moving principle of its founders,
as well as of all those who since have followed in its direction,
having been, that of prohibiting every attempt, on the part of the
colonists, at attaining that diversity of employments which is re-
quired for securing competition for the purchase of their own rude
products, or for the sale of finished commodities required in ex-
change and thus maintaining, at its highest point, the tax of
transportation. Without such diversity, the power of association
and combination could have no existence. Without it, the colo-
nists were bound to remain, for ever, mere instruments in the
hands of the traders and transporters of the mother-country.
That such were really the objects sought to be accomplished, is
shown in the following passage from the work of an influential
writer of the last century, to which I desire now, Mr. President,
to invite your attention :
" Manufactures in our American colonies should be discouraged,
prohibited." * * "We ought always to keep a watchful eye
over our colonies, to restrain them from setting up any of the
manufactures which are carried on in Great Britain ; and any
such attempts should be crushed in the beginning. " * * " Our
colonies are much in the same state as Ireland was in, when they
began the woollen manufactory, and as their numbers increase,
will fall upon manufactures for clothing themselves, if due care
be not taken to find employment for them, in raising such pro-
ductions as may enable them to furnish themselves with all the
necessaries from us." * * "As they will have the providing
rough materials to themselves, so shall we have the manufacturing
of them. If encouragement be given for raising hemp, flax, &c.,
doubtless they will soon begin to manufacture, if not prevented.
Therefore, to stop the progress of any such manufacture, it is
proposed that no weaver have liberty to set up any looms, with-
out first registering at an office, kept for that purpose." * *
" That all slitting-mills, and engines for drawing wire or weaving
stockings, be put down." * * " That all negroes be jwohi-
PRESIDENT OF THE UNITED STATES. 121
bited from weaving either linen or woollen, or spinning or
combing of wool, or working at any manufacture of iron, further
than making it into pig or bar iron. That they also be prohibited
from manufacturing hats, stockings, or leather of any kind. This
limitation will not abridge the planters of any liberty they now
enjoy on the contrary, it will then turn their industry to pro-
moting and raising those rough materials." * * " If we
examine into the circumstances of the inhabitants of our planta-
tions, and our own, it will appear that not one-fourth of their
product redounds to their own profit, for, out of all that comes
here, they only carry back clothing ana" other accommodations
for their families, all of which is of the merchandise and manu-
facture of this kingdom." * * "All these advantages we re-
ceive by the plantations, besides the mortgages on the planters'
estates and the high interest they pay us, which is very consider-
able.'" (GEE on Trade, London, 1750.)
Turning now, Mr. President, to the statute-book, you will find
a continued series of laws, each and every one of which had for
its object, that of carrying out the system above described pro-
hibitions of manufactures, on one hand, and bounties on the im-
port of raw materials, on the other, having been resorted to, for
preventing the colonists from making those changes in their
rude products, that were required for fitting them for consump-
tion among themselves. The one great object of the system,
was that of maintaining in its most bulky form, the commodity
requiring to be transported, while contracting, as far as
possible, the machinery by which the work of transportation
and conversion was to be effected thereby enriching the trader
and transporter at the cost of both consumer and producer. The
more perfectly it could be carried out, the greater would be the
difference between the prices of raw materials and finished com-
modities the greater would be the tendency towards exhaustion
of the soil and ruin of its cultivators the more would the people
become dispersed the heavier would become the tax of trans-
portation, and the more entirely would it be thrown upon the
colonists, who were thus to be impoverished, for the benefit of
those by whom the laws were made.
To the grinding taxation of a system which, thus, looked to the
establishment of a monopoly of the power to purchase the rude
products of the earth, and to sell the commodities into which they
became converted, and not to a paltry tax on tea, Mr. President,
are we indebted for the Declaration of our Independence, and the
war which followed it. To a desire for rendering that declaration
effective, by protecting our farmers and planters against the sys-
tem, was largely due the calling of the Convention which gave us
our Constitution a very brief experience having sufficed to satisfy
the various States, and Virginia most especially, that concert of
action for resistance to it, was essential to the advance of the
122 LETTERS TO THE
Union in wealth aud power. To the knowledge of its action
acquired in, or derived from, colonial times, it was due, that each
and every of our Presidents, from Washington to Jackson, held,
that it was not only the right, but the duty, of Congress, so to
direct the power with which it was clothed, as to promote the
approximation of the producer and the consumer, aud thus to
diminish the enormous taxes of trade and transportation, by means
of which, the'farmers aud planters had been so much impoverished
to produce competition for the purchase of raw produce, and
for the sale of finished commodities, and thus secure to the agri-
cultural interest that freedom of commerce which is denied to him
who must make his exchanges at the single mill ; and in this
manner, to carry into practical effect, that independence whose
existence had been declared in 1776.
Such, Mr. President, were the general tendencies of the country,
during the half century which followed the peace of 1783 a pe-
riod remarkable beyond any other recorded in the history of
modern Europe, for commercial disturbance ; one, in which piracy
on the ocean sanctioned by French decrees and British Orders in
Council embargoes, non-intercourse acts, and wars with both
France and England, combined for the production of financial
derangement ; and yet, that one in our history which stands dis-
tinguished by the fact, that poor as we then were, our banks were
never, in time of peace, driven to suspension ; nor were either the
people, or the government, driven to the disgraceful necessity of
resorting to the use of irredeemable paper, as the only means of
maintaining the societary circulation.
Five-and-twenty years have since elapsed, and during nearly all
that period, the doctrines of our revolutionary fathers, as regarded
commercial policy, have been repudiated the essential duty of
the central government having been held to be, that of providing
for itself, careless of the effect of its measures upon the condition
of the people. So far as was required for their taxation, tariffs
might, as we have been assured, be tolerated ; but so far as re-
quired for their protection, they could not free trade, as it has
been called, having been the order of the day.
In what, however, Mr. President, does our present freedom of
trade consist? Is the planter free to exchange his cotton, abroad
or at home, at his pleasure ? Is there that growing competition
for his products, which tends to raise their prices ? That, there
certainly is not nearly all our mills being closed, aud he being
reduced to dependence on distant markets, such as he has not
known since the disastrous times of 1842. Are our farmers free
to exchange their food, abroad or at home, for iron with which
to make their roads ? Is there a growing competition for the
purchase of food, and the sale of iron ? Certainly not our fur-
naces and rolling-mills being closed the men who wrought in
them, turned adrift and the necessity for going to the distant
PRESIDENT OF THE UNITED STATES. 123
markets with wheat and corn, being greater now, than it has been
since 1842. Are our workingmen free to sell their labor when
and where they please ? Do they find increase of competition for
the purchase of the single commodity they have to sell ? Assuredly
not there being ten who have labor for sale, to every one who
is seeking to purchase it. Look where you may, Mr. President,
you will find a diminution of competition for the purchase of labor
and the rude products of the land, the commodities we have to
sell the laborer, the farmer, and the planter, becoming, from
hour to hour, more and more, mere instruments to be used by the
trader and transporter ; and, for the simple reason, that it has been
held by your recent predecessors in the Presidential chair, that the
central government had only itself, and not the people, to protect.
Widely different from this, Mr. President, were the ideas of Wash-
ington and Hamilton, Adams and Jefferson, as to the rights and
duties of that government.
Freedom of commerce among ourselves the commerce between
our towns, cities, and States, which, as you have so ably shown,
is the sort of free trade we need has no existence. The farmers
of Illinois exchange between themselves, by means of the furnaces
of Wales and Scotland. The Iowa farmer can make no exchange
with the Mississippi planter, until after the corn and cotton have
travelled to Manchester, there to be converted into cloth to be
returned to Iowa and Mississippi eighty-five per cent, of the
corn and cotton being taken on the road, for the support of the
people by whom the exchanges are effected. Why this is so
why our farmers and planters are thus subjected to a tax of trans-
portation, compared with which, that of France and Germany is
as nothing you will, Mr. President, readily understand, after hav-
ing read the following passage, extracted from a document pub-
lished but four years since, by order of the British House of Com-
mons :
" The laboring classes generally, in the manufacturing districts
of this country, and especially in the iron and coal districts, are
very little aware of the extent to which they are often indebted
for their being employed at all to the immense losses which their
employers voluntarily incur in bad times, in order to destroy
foreign competition, and to gain and keep possession of foreign
markets. Authentic instances are well known of employers hav-
ing in such times carried on their works at a loss amounting in
the aggregate to three or four hundred thousand pounds in the
course of three or four years. If the efforts of those who encou-
rage the combinations to restrict the amount of labor and to pro-
duce strikes were to be successful for any length of time, the great
accumulations of capital could no longer be made which enable a
few of the most wealthy capitalists to overwhelm all foreign
competition in times of great depression, and thus to clear the
way for the whole trade to step in when prices revive, and to
124 LETTERS TO THE
carrj on a great business before foreign capital can again accu-
mulate to such an extent as to be able to establish a competition
iu prices with any chance of success. The large capitals of this
country are the great instruments of warfare against the com-
peting capital of foreign countries, and are the most essential
instruments now remaining by which our manufacturing supremacy
can be maintained; the other elements cheap labor, abundance
of raw materials, means of communication, and skilled labor
being rapidly in process of being equalized."
The system here described is very properly characterized as
"warfare;" and we may properly inquire for what purposes, and
against whom, it is waged. It is a war, as you see, Mr. President,
for cheapening all the commodities we have to sell, labor and raw
materials being precisely the objects sought to be accomplished
by the " Mercantile System," whose error was so well exposed in
the Wealth of Nations. It is a war for compelling the people of
other lands to confine themselves to agriculture for preventing
the diversification of employments in other countries for retard-
ing the development of intellect for palsying every movement,
elsewhere, looking to the utilization of the metallic treasures of the
earth for increasing the difficulty of obtaining iron for dimin-
ishing the demand for labor for doing all these things at home
and abroad and for thus subjecting the farmers and planters of
the world to the domination of the manufacturers of Britain.
To measures such as here described, was due the closing of all
the factories of India, followed by the exportation of cotton to
England, there to compete with the products of Carolina and Ala-
bama. The more perfectly the system can be carried out the
more the manufacture can be restricted to England the cheaper
must be raw materials ; but the greater must be the export of
cheap labor to Texas and to the Mauritius, there to raise more
cotton, sugar, and other rude products ; and thence to compete
with each other for the reduction of prices, and for the more com-
plete enslavement of the laborers of all those countries.
In the case of a war like this, what, Mr. President, does a
government owe to its people and itself? The answer to this
question is furnished by one of the most distinguished of your pre-
decessors, Mr. Madison, in the following words :
" Should it happen, as has been suspected, to be an object,
though not of a foreign government itself, of its great manufac-
turing capitalists, to strangle in the cradle the infant manufactures
of an extensive customer, or an anticipated rival, it would surely,
in such a case, be incumbent on the suffering party so far to make
an exception to the ' let-alone ' policy as to parry the evil by op-
posite regulations of its foreign commerce."
That such is the duty of a government, no one can seriously
doubt ; and yet, that duty has remained unperformed. Time
after time, for the last half century, have the iron, the cotton, and
PRESIDENT OF THE UNITED STATES. 125
the woollen manufactures, been stricken down by means of mea-
sures such as here are indicated, without the slightest attempts at
interference on the part of the central government. Crisis has
succeeded crisis, and with each successive one, the necessity for
the export of raw materials has increased, with steady decline of
prices, and as steadily increasing necessity for the export of the
precious metals to discharge the balance of trade, thus forced
upon our people. Hence, Mr. President, the difficulty of main-
taining a stable currency. Hence the ruinous rate of interest.
Hence the disasters among our merchants and our banks. Hence
the decline in the character of our ships. Hence our inability to
compete with the world in the use of steam for ocean-navigation.
Hence the decline of morals ; and, hence the discord now prevail-
ing between the different sections of the Union.
Allow me now, Mr. President, to ask you to read, once more,
the extract with which this letter was commenced, and study care-
fully what were the objects sought to be accomplished by the dis-
tant masters by whom the provinces then wei'e ruled. Doing this,
you will see, that they were those of limiting the colonists to the
single pursuit of scratching the soil, and thus destroying competi-
tion for the purchase of their products. Turning, next, to the ac-
tion of the Federal government, you can scarcely fail to remark,
how identical with the views of the British traders of colonial
times, have been its acts.
There, be assured, lies all the difficulty, and not with the local
governments. Clothed with the power to protect our people, it
has failed in the performance of its duties leaving them exposed
to a warfare of the most destructive kind, and to a taxation for
the support of foreign governments and peoples, compared with
which, the amount that would be required for the support of the
largest fleets and armies, sinks into insignificance. As a conse-
quence of this, we are rapidly passing into a state of dependence
more complete than that which existed in 1776. Further proof
of this, I propose to furnish in another letter, remaining mean-
while,
Yours, very respectfully,
HENRY C. CAREY.
Philadelphia, February Wth, 1858.
126 LETTERS TO THE
LETTER TWENTY-SECOND.
THE system described in my last letter, Mr. President, is, as you
have seen, a war upon the agricultural communities of the world,
for the reduction of the prices of their rude products. To what
extent, it has resulted in reducing the prices of our staples, you
have already seen, How it taxes the planters and farmers every-
where, I propose now to show, and with that view, will commence
by asking your attention to the following comparative view of the
exports from Great Britain at the close of the great European
war, and at the opening of the gold-trade of California :
1815. 1851.
Export of woollens 9,381,426 10,314,000
" cottons 20,620,000 30,078,000
silks 622,118 1,329,000
linens 1,777,663 5,048,000
And of other commodities 19,231,684 21,723,569
Total 51,632,791 68,492,569
Nearly the whole increase that had taken place, in the long
period of thirty-six years, was thus found in four branches of
manufacture, the materials of which were wholly drawn from
abroad, as is shown in the following statement of imports for
that year :
Wool 83,000,000 Ibs.
Cotton 700,000,000 "
Silk 5,020,000 "
Flax 135,000,000
Eggs 116,000,000 No.
Oxen, cows, calves, sheep, hogs, &c 300,000 "
Corn 8,147,675 qrs.
Flour 5,384,752 cwt.
Potatoes 635,000 "
Provisions 450,000 "
Butter 354,000 "
Cheese 338,000 "
Hams and lard 130,000
Rice 450,000 "
Spirits , 2,000,000 galls.
Before proceeding to examine the figures above presented, I
desire, Mr. President, to invite your attention to the idea, that
those who furnish the food, clothing, and lodging, do, in fact,
furnish the power. A locomotive engine is merely the instrument
by means of which, the force yielded by the consumption of fuel is
made to serve the purposes of man. So it is with men. Their
PRESIDENT OF THE UNITED STATES. 127
daily power to labor results from their daily consumption of food ;
and therefore is it, that those who supply the food and clothing,
are really the parties who supply the power that is used. That
understood, we may now inquire how many of the people of Eng-
land are fed by the agricultural nations of the world, preparatory
to an inquiry into the number there employed, in doing their work.
Divided among four millions of persons, the articles of food
included in the above, would give to each about
1100 pounds of corn,
150
12
16
18
20
12
flour,
fresh meat,
salted "
potatoes,
butter and cheese
rice,
28 eggs, and half a gallon of spirits.
This being much more than the average consumption of the
men, women, and children, employed in the workshops of Great
Britain, it may fairly be assumed, that the world furnishes four
millions of laborers with food and clothing, and with shelter,
too the chief part of the timber there consumed, being drawn
from abroad.
To the stock of food above given, we have now to add, the
total quantity of coffee and tea, of cocoa and sugar, of lemons
and oranges, of figs and raisins, of spices and tobacco, consumed
by the whole eight-and-twenty millions of the population of the
United Kingdom.
Of raw materials, foreign nations supply all the cotton and silk,
all the oil, all the saltpetre, and all the dye-stuffs; of hides, wool,
flax, hemp, and various other articles, they not only furnish all
that is re-exported in the shape of manufactures, but as much
more as is adequate to meet the demands of a large portion, if
not even of the whole, of the four millions above referred to
who may, therefore, be considered as being fed, clothed, lodged,
and supplied to the English people, by the other communities of
the world.
The whole number of persons, old and young, male and female,
employed, in 1841, in the
Cotton, hose, lace, wool, worsted, silk, flax, and linen manufac-
tures of Great Britain, was .'. 800,246
In the mines 193,825
In the working of metals, as smelters, founders, blacksmiths,
nail-makers, brass-founders, cutlers, pin and needle makers,
file and lock makers thus embracing all the persons con-
nected with the conversion of ores into metals, and metals
into instruments, whether for the use of the farmer or the
manufacturer, the builder of houses or the maker of cloth
was 803,368
Making a grand total of 1,297,439
128 LETTERS TO THE
The number so employed in 1851 must have been greater, and
may perhaps be properly estimated at 1,500,000. If so, it fol-
lows, that the people of the world feed, clothe, and shelter, and
thus furnish the labor of, nearly three times as many persons as
are, in England, employed in mining her coal and her iron ; in
smelting her ores, and making her pig, bar, and railroad iron ; in
constructing her machinery of every description ; and in convert-
ing iron, copper, brass, cotton, wool, silk, hemp, and flax, into the
commodities required for consumption. Thus, in addition to
furnishing nearly all the raw materials, they supply all the labor ;
and, further, they supply food, cloth, and lodging, for two and
a half millions of persons otherwise employed.
Of the million and a half, there is, however, but a small pro-
portion that is employed in working for the foreigners who sup-
ply this food, and these raw materials. Of the commodities
exported, nearly all are of the coarser kinds, requiring very little
of either skill or taste for their preparation. Thus, for instance,
out of an export of 87,000,000 sterling in 1854, nearly
15,000,000 consisted of metals in almost their rudest state
having given occasion to the exertion of very little more than brute
force. Coals constituted 1,500,000 ; while mere yarns amounted
to 10,000,000. Cotton cloths, averaging only 3^7., or f cents,
per yard, were nearly 24,000,000. Linens, averaging 8d. a
yard, made more than 4,000,000 ; while earthenware, alkali,
beer and ale, butter, candles, cordage, fish, salt, and wool, con-
tributed 5, 000, 000 towards the mass. The difference between
the pictures presented by the French and English exports is most
remarkable the former exhibiting scarcely anything that has
not been very highly elaborated and the latter furnishing
evidence, that, of all the vast quantity of commodities received
from the world, those returned have undergone that lowest amount
of preparation required for their reception among an inferior po-
pulation. With the exception of machinery and millwork to an
amount less than 2,000,000, and hardware and cutlery to about
double that sum, there is scarcely any thing in the list of English
exports requiring either taste or skill. Seeing that such is the
fact, it may well be doubted if more than one-fourth of the labor
given to manufactures or that of four hundred thousand hands
is applied to the conversion of the raw materials exported;
but, to avoid the possibility of error, we may assume it to be even
as high as one-third = five hundred thousand persons being
one for every eight whose labor is, as has above been shown, fur-
nished by the agricultural nations which find themselves compelled
to look to Britain for a market.
The account between that country and the world at large would
now appear to stand as follows :
PRESIDENT OF THE UNITED STATES.
129
GREAT BRITAIN.
DR.
OR.
By the labor of half a million of per-
sons men, women, and children
employed in the lowest order of the
labors of conversion.
By a small portion of the raw mate-
rials supplied.
To the labor of four millions of per-
sons there employed, while fed,
clothed, and lodged, by other na-
tions.
To the sugar, tea, coffee, tobacco,
fruit, and other commodities, re-
quired for the consumption of
twenty-eight millions of persons.
To the cotton, flax, silk, hemp, lum-
ber, and other raw materials, re-
quired for domestic consumption,
and for exportation.
Having studied the extraordinary picture that is here presented,
I will now beg of you, Mr. President, to look once more to
Mr. Gee's sketch of the Colonial system, given in my last, there
to find the assertion that "not one-fourth part" of the products
of the laborers of British colonies "redounds to their own profit"
they obtaining in return, nothing but "clothing and accommo-
dation for their families," and being brought, thereby, so much in
debt, as to be compelled to mortgage their estates, and to pay
high interest to the mortgagees. That done, I have next to re-
quest, that you will look to the following sketch of the movement
of the cotton trade, with a view to the determination of the ques-
tion, whether, under the existing policy of the country', we are,
or are not, with each successive year, becoming more completely
subject to the Colonial system :
Forty years since, the cotton imported into England amounted
to 96,000,000 of pounds ; and it commanded then 20^d. per pound
equal to 8,200,000.*
About thirty years later, the movement of the trade, according
to the same authority, was as follows :
Raw material, 500,000,000 pounds, at 5d. per pound 10,000,000
Wages of 542,000 spinners, weavers, bleachers, &c., at 24 a
year each f. 13,000,000
Wages of 80,000 engineers, machine-makers, smiths, masons,
joiners, &c., at 50 a year each 4,000,000
Profits of the manufacturers, wages of superintendents, sums to
purchase the materials of machinery, coals, &c. 9,000,000
36,000,000
We see, here, that while the raw material consumed was more
than five times as great, the selling price in England was less
than 25 per cent, greater. When, however, we reflect that with
every stage of this increase, it had been necessary, because of the
unceasing exhaustion of the land in cultivation, to resort to new
* McCuLLOCH : Commercial Dictionary ; article, Cotton.
130 LETTERS TO THE
and more distant lands, with constant increase in the cost of trans-
portation and when we deduct the domestic charge thus created,
together with the freights, storages, brokerages, and other claims,
upon this immense quantity we find that these 500,000,000
pounds could have yielded their producers, of the various parts
of the world, not more than 5,000,000; or less than, thirty years
before, had been received by the producers of 96,000,000; and
less, too, than was required to pay for the damage done to the
land leaving altogether out of view the cost of cultivation.*
The 5,000,000 thus paid for the use of so many millions of
acres, became 36,000,000 before they left the factory ; and yet,
as we have seen, the changes effected in them were such as re-
quired only the lowest species of skill. Thence, they passed out
to Turkey and India, Ireland and Portugal, Jamaica and Spain,
the United States and Canada ; and before they reached the con-
sumers they had become not less than 60,000,000 ; about one-
twelfth of which went to the cotton-grower, while the other eleven-
twelfths were absorbed on the road between those who raised the
wool, and those who wore the cloth giving support to thousands,
and tens of thousands, of men employed in blocking the wheels of
commerce. The consequences of this are seen, Mr. 'President, in
the facts, that the planter important as is his commodity can
nowhere obtain proper machinery of cultivation ; that his lands
are everywhere being exhausted ; and that slavery becomes from
* "Few crops," says a Southern journal, "are more exhausting to the
Boil than is the cotton crop. An immense amount of manure, usually con-
sisting, for the most part, of decayed leaves, limbs, and forest mould, is
required to keep the land of a cotton plantation in good condition. Another
difficulty is, that cotton requires later cultivation than any other crop, leav-
ing the planter but little time to enrich or improve his farm as he may
desire. An Alabama planter says, that cotton has destroyed more than
earthquakes, or volcanic eruptions. Witness the red hills of Georgia and
South Carolina, which have produced cotton till the last dying gasp of the
soil forbade any further attempt at cultivation; and the land, turned out to
nature, reminds the traveller, as he views the dilapidated condition of the
country, of the ruins of ancient Greece."
The effects of this, as exhibited in South Carolina, are thus stated in a
recent address issued by the Agricultural Convention recently held in that
State :
"Your committee would earnestly bring to the attention of this convention
the mournful fact, that the interest heretofore taken by our citizens in agri-
cultural improvement has become stationary; that our old fields are enlarg-
ing; our homesteads have been decreasing fearfully in number; and our
energetic sons are annually seeking the rich and fertile lands of the South-
west, upon which they imagine that treble the amount of profits can be
made upon capital than upon our own soils. Nor is this all. We are not
only losing some of our most energetic and useful citizens, to supply the
bone and sinew of other States, but we are losing our slave population, which
is the true wealth of the State. Our stocks of hogs, horses, mules, and
cattle, are diminishing in size and decreasing in number, and our purses are
being strained for their last cent to supply their places from the Northwest-
ern States."
PRESIDENT OP THE UNITED STATES. 131
year to year more and more the lot of the laborers of all cotton-
producing countries. Such are the necessary results of the system
that looks to cheapening the raw materials of manufacture, and to
increasing the difference between their price and that of the fin-
ished commodities into which they are converted.
Eleven-twelfths, or fifty-five millions of pounds, are divided
among middlemen and of this enormous sum four-fifths, pro-
bably, centre in the owners of English ships, mills, and other
machinery of exchange and transportation. To pay this, it is
required, that the agricultural nations send to England enormous
quantities of tea, coffee, sugar, indigo, and other commodities
while themselves wasting, daily, more labor than is employed,
monthly, in all the mines and factories of the United Kingdom.
Hence their inability to obtain improved machinery ; and hence
the necessity they are everywhere under, of confining themselves
to the work of scratching out, and selling, the soil.
The direct effect of the reduction in the price of cotton has
been, and is, that of forcing labor into the production of sugar,
with similar effect enabling the people of England to obtain
three pounds for the price they before had paid for one, but ruin-
ing the people of Jamaica. The decline in the price of sugar
forced labor into the production of coffee, and that, in its turn,
fell in price there being a solidarity of interest of prosperity ,
or of adversity among all the agriculturists of the world. Our
farmers and those of Russia and Germany were injured by the
stoppage of manufactures in Ireland, because it had the effect of
diminishing the Irish consumption of food, and forcing large quan-
tities on the English market. The planters were injured by it,
because it not only stopped the consumption of cotton among the
Irish people themselves, but by forcing large quantities of labor
upon England it lessened the power of the English laborer to
consume either food or cotton. That all communities prosper by
the prosperity of all others, and that all suffer from injury received
by others, is a truth that will, Mr. President, at some day, come
to be admitted ; and when it shall be so, the farmers and planters
of the world will be found combining together to compel the
maintenance, in the conduct of public affairs, of a sound morality
looking to the advancement of the interests of commerce, and
to their own emancipation from the tyranny of trade.
So, too, is it with the laborers of the world. Whatever tends
to impair the condition of those of India is injurious to those of
France and England ; and therefore it is, that those nations would
find it profitable to carry out in their international relations the
same morality that is required between man and his fellow-man.
The low prices of sugar and cotton, and consequent slavery of
the producers of those commodities, are but consequences of the
system that has so much tended towards the. enslavement of the
workers in iron and cotton that one which has sought the anni-
132 LETTERS TO THE
hilation of the power of association and combination everyvhere
outside of Britain.
What, Mr. President, is it, that the British manufacturers de-
sire ? What is the object of the "warfare" that, as we are told
by the highest British authorities, is now carried on against the
agricultural nations of the world ? Is it not, that of cheapening
raw materials, while maintaining at their highest, the prices of fin-
ished commodities ? That such is the case, cannot be denied.
What is it, on the other hand, that our farmers and planters
desire ? Is it not the reverse of this ? Do they not wish to have
raw products dear, and finished commodities cheap ? That they
do so, is certainly true.
What is the policy, Mr. President, advocated by the foreign
manufacturer ? Is it not that one, which is commonly called free
trade ? It is so, certainly. In advocating it, does he desire to
carry out his own views, or those of the planter ? Does he desire
to raise the price of food and cotton ? Does he not, on the con-
trary, desire to cheapen both ? Does he desire to tax himself, for
maintaining the millions of tons of shipping required for carrying
enormous masses of raw products to the ports of Britain ? Does
he not, on the contrary, wish to throw upon the producers all the
cost of transportation ? Does he not know, and feel too, that,
under that system, they receive the most trivial share of their pro-
ducts the remainder being absorbed by traders, transporters,
brokers, and middlemen of all descriptions ; and is it not for these
reasons, that he urges upon the world the adoption of the free-trade
system ? That it is so, is unquestionably true.
The objects of the two parties being thus so widely different, is
it possible that both can be attained by the pursuit of any one set
of measures ? Can the system invented for the purpose of depress-
ing the prices of raw products raise them ? Can that which looks
to maintaining the prices of finished products, lower them ? It
cannot ; and yet, every measure of our central government, in re-
gard to trade, for the last twelve years, has had the fullest appro-
bation of the advocates of that system. Could we desire better
evidence, that those measures are hostile to the interests of both
farmer and planter ?
The more, Mr. President, that you shall study the subject, the
more will you be satisfied, that to the policy of that government
is due the depression in the prices of all our products, to which
your attention has been called ; and that, it is to its errors, and
not to excess in the amount of power retained by the States, when
they adopted the Constitution, we owe the monetary difficulties
you have so well described.
Yours, very respectfully,
HENRY C. CAREY.
Philadelphia, February 23d, 1858.
PKESIDENT OF THE UNITED STATES. 133
LETTER TWENTY-THIRD.
Two systems, Mr. President, are before the world one, whose
objects are to be promoted by increasing the competition for
the sale of all the raw materials of manufacture, labor included ;
another, which looks to increasing the competition for their pur-
chase.
The first, tends towards maintaining, and even augmenting, the
necessity for machinery for transportation thus increasing the
influence of the trader. The second, would promote the growth
of the power of combination, and thus diminish the necessity for
such machinery while enlarging the field of commerce.
The first, looks to widening the space by which the producer
and the consumer are separated ; the second, to its contraction.
The one, would increase the difference between the prices of
raw materials and finished commodities ; the other, would secure
their more close approximation.
The one, looks to increasing the proportion of mental and phy-
sical power given to trade and transportation, and thus diminish-
ing that which might be applied to production ; the other, to an
increase in the proportion given to production, and a diminution
in that applied to effecting changes in the places of the things
produced.
The one, was reprobated by Adam Smith ; the other, is in full
accordance with his doctrines, as well as with those of Colbert,
the most distinguished of all the sons of France.
Leader in the advocacy of the first has been, and is, Great Bri-
tain. Leader in the establishment of the second, and most con-
sistent in its maintenance, is France ; and thus, after so many
ages of almost ceaseless efforts to do each other injury, by means
of warlike operations, are these two nations now engaged in a
peaceful contest for the leadership of the world ; but, peaceful as
it is, it is destined to exert an amount of influence, compared
with which that resulting from the movements of fleets and armies
in the past, will prove to have been entirely insignificant.
For centuries, both have been almost unceasingly engaged in
war, but widely different have been the objects sought to be at-
tained France having fought for glory and dominion, while
England has looked with a single eye to the establishment of the
supremacy of trade. Equally different have been their respective
policies France having imitated Rome, who, universal plun-
derer as she was, left the local arrangements of her provinces un-
touched ; while Great Britain has imitated Holland, in seeking to
monopolize the machinery of trade and transportation, and thereby
compelling strangers to make their exchanges in her single market.
134 LETTERS TO THE
The policy of the one has been that of the soldier ; that of the
other has had for its foundation, the single idea of "buying in the
cheapest, and selling in the dearest market."
Colbert wished that French colonists should refine their own
sugar and make their own cloth. England, on the contrary
desiring that the " mischievous practice " might be prevented
inserted in her grants of land, clauses " declaring the same to be
void," should the grantee "apply himself to the making of wool-
len, or such like, manufactures. " Seeking the enlargement of
commerce, France, under the lead of Turgot, abolished the mono-
polies of earlier times; while, at the same moment, the Parliament
of England looking always towards trade was adding, year
after year, to the restrictions upon the movements of her artisans,
and thus creating a monopoly to be held against the world.
The system of the one, is based upon the idea of cheapening the
raw produce of the earth, and the labor of him by whom it is tilled.
The other, seeks to protect the laborer, by bringing the market to
his door, and thus giving value to his land.
The closer the approximation of the price of the raw material
and the manufactured commodity, the smaller, necessarily, is the
proportion of the product of labor appropriated to the payment
of the transporter, the trader, the soldier, and all others of those
classes standing between the men who labor to produce, and those
who need to consume the things produced. The closer that ap-
proximation, the more rapid will be the circulation, the more
instant the demand for labor and its products, and the greater the
power to apply the faculties of mind and body to the work of con-
version while giving a constantly increasing proportion to the
labor of developing the riches of the earth, and thus augmenting
the quantity of things susceptible of being converted. In France,
the quantity of food has increased twice more rapidly than the
population ; and yet, her manufacturing industry has attained such
large dimensions, that its product is given at 4,000,000,000 of
francs, or nearly $800,000,000* being, probably, twice the
anjount of the total yield of land and labor, a century since. The
movement, too, is a constantly accelerated one. Forty years since,
France absorbed but 60,000 bales of cotton ; now, she requires
400,000. Then, the whole value of the silks manufactured, but
little exceeded 100,000,000 of francs ; now, it exceeds 400,000,000.
Then, she made but little iron ; now, she makes more than 500,000
tons being as much as was produced in Britain, thirty years since.
Then, her mines yielded but 800,000 tons of coal ; now, the quan-
tity exceeds 5,000,000 having sextupled in that brief period.
* This sum has reference to the additional value given to raw products by
the processes of manufacture, and is not to be understood as including that
of the materials themselves. The total amount of commodities manufactured
is given at 8,000,000,000 of francs.
PRESIDENT OF THE UNITED STATES. 135
These are great changes ; and yet, so far are they from having
oeen attended with diminution in the proportion of physical and
mental faculty given to agriculture, that they are the cause of a
constant increase therein.
A century since, France could have fed with wheat seven mil-
lions of people. Now, she could feed more than twenty millions.*
Then, the corn, potatoes, and other vegetables, if equally divided
among the population, would have given about 800 pints per head.
Now, it would give more than twice that quantity ; and of the
change thus manifested, by far the larger portion has occurred in
the forty years through which we last have passed. This, Mr.
President, is a great change, and yet it is but a part of what has
been effected. The policy of Colbert, in seeking to diversify the
modes of agricultural employment, having been carried out in
reference to sugar, the result is seen in the fact, that France has
now more than a hundred thousand acres devoted to the culture
of the beet-root producing sugar to the amount of sixty or
seventy millions of francs, equal to twelve or fourteen millions of
dollars ; and so cheaply is it supplied, that the sugar of the colo-
nies finds itself forced to implore protection against the domestic
manufacture.
In 1812, the total amount of silk cocoons produced but little
exceeded 5,000,000 kilogrammes ; now, it exceeds 15,000,000,
with a value of more than sixty millions of francs, or twelve mil-
lions of dollars.
France has now 32,000,000 of sheep, against 27,000,000 in
1813, and 20,000,000 in 1789; but the improvement in quality
has been far greater than that in quantity the demand from the
constantly growing woollen manufacture, having offered a large
bounty upon the devotion of time, mind, and means, to the im-
provement of the race.
Cloth has steadily declined in price, while wool has much
advanced ; and the corn that, a century since, would command but
twelve and a half francs, was worth nineteen francs in the deceminal
period ending in 1840. The prices of the raw material and of
the finished commodity are steadily approximating each other
thus affording the strongest evidence of advance in civilization.
The consequences of the increase of quantity, and of price, are
seen in the fact that whereas, eighty years since, the average
money-value of the produce of an acre of land was 87 francs, it
has since risen to no less than 237 having almost trebled.
We see, thus, Mr. President, that much of the augmented
money-value results from increase in quantity, and most especially
from increase in those bulky products of the earth, that will not
* That the change here indicated is still in rapid progress, is shown bj
the fact that while the average product of wheat in the years 1842-1848 was
only 72,000,000 hectolitres, that of 1847-1851 was no less than 86,000,000.
136 LETTERS TO THE
,bear transportation to distant markets. A further portion of it
is consequent upon the increased utility of many portions of the
produce, resulting from the existence of a market near at hand.
Thus, the wheat-straw, alone, is valued at 393,000,000 of francs,
or nearly $80,000,000 ; and the total value of the straw of France
at 761,000,000 of francs = $150,000,000 being more than the
total value of the cotton crop of the United States, which occu-
pies so nearly exclusively the land of no less than ten of our
States, and furnishes almost the whole employment of so many
millions of people.
As a general rule, France feeds herself. In thirty-three years
it occurred once in 1847 that her imports of food were ade-
quate to the supply of 2,700,000 persons. Twice in 1832 and
1846 she imported half that quantity. Six times, her imports
sufficed for the feeding of from three to four hundred thousand
persons ; but in nineteen of the thirty-three years her imports were
insignificant.
The annual average of her exports, in the ten years ending
1836, but little exceeded 500,000,000 of francs. In 1852, the
amount was 1,250,000,000 being an augmentation of 150 per
cent. ; while the average of the previous five years, including
those disastrous ones of 1848 and '49, exceeded 1,000,000,000;
and yet, large as was the increase, nearly the whole amount of
labor thus exported, directly represented food produced on the
soil of France. How small is the quantity of foreign raw mate-
rial that goes to the production of the goods exported, is shown
by the fact, that while the value of cotton fabrics exported in 1854
was 60,000,000 of francs, the weight was only 7,300,000 kilo-
grammes, or 16,000,000 of pounds giving an average of seventy-
five cents for the raw cotton that had passed into the hands of
the manufacturer at an average price, not exceeding ten. The
total weight of clothing and furniture exported in 1856 was under
40,000 tons a quantity that, as you have seen, Mr. President,
could be carried in forty ships of very moderate size ; and yet, in
that small bulk was contained little less than two hundred millions
of dollars' worth of French food, so condensed, in accordance with
the ideas of Adam Smith, as to enable it freely to travel to .the
remotest corners of the world.
The tendency of French policy is that of making manufactures
subsidiary to agriculture combining a small amount of foreign
raw materials with a large quantity of domestic ones, and thus
enabling her farmers cheaply to maintain commerce with distant
countries. Scarcely any thing passes out until it has attained a
form so high, as to cause the skill and taste, which represent her
food, to bear a very large proportion to the value of the raw
material that is used. Her exports of raw produce are insignifi-
cant in amount ; and even of wine, the amount exported but little
exceeds that of the years immediately preceding the Revolution
PKESIDENT OF THE UNITED STATES. 137
the average from 1844 to 1846 having been only 1,401,800 hecto-
litres, against 1,247,700 tons from 1787 to 1789.
The total value of French produce and manufactures exported
in 1856 was 1,893,000,000 francs, or $370,000,000; and of this
large sum, the foreign raw materials could scarcely much have ex-
ceeded, even if they equalled, a fifth leaving 1,500,000,000
of francs as the actual value of food and other domestic products
furnished to the world, after having been reduced in bulk, so as to
economize to the utmost extent, the cost of transportation. Land
and labor rise in value precisely as they are emancipated from
that first and most oppressive of taxes ; and therefore it is, that
we witness so large an increase in the price of those of France.
In 1821, her real estate was valued, and the amount re-
turned to the government was 39,514,000,000 francs, or nearly
$8,000,000,000. A similar valuation having been made in 1851,
and before the California gold deposits had begun to affect the
movements of the world, the amount was found to have risen to
no less than 83,744,000,000 francs, or $16,000,000,000 having
more than doubled in the short period of thirty years. In the
same year, the total value of the real estate of the Union was re-
turned at $3,889,000,000; but, as subsequently corrected at the
Census bureau, it was increased to nearly $5,000,000,000 that
having been given, as the true value of all the land and buildings
of the country. Were we now to add to this, even sixty per cent.,
we should obtain a sum no greater than that which represents the
addition made to the value of the real estate of France, in thirty
years. It follows thence, Mr. President, that the fixed property
here created, in the whole period that has elapsed since the land-
ing of the Pilgrims, is far less in value than that created by the
French people, in the brief period you have so well described, of
constantly repeated financial convulsions among ourselves.
This is, certainly, a most extraordinary fact, and it behoves us,
Mr. President, to inquire into the causes of its existence. In
that period, France has maintained armies that have counted by
hundreds of thousands, while ours have counted by thousands.
She has made wars in Europe and Africa ; while, with the excep-
tion of our discreditable attack on Mexico, we have enjoyed a
peace that has been undisturbed. She has undergone a succes-
sion of violent revolutions ; we have had none but those resulting
from the operation of the ballot-box. Her land has been oppres-
sively taxed for the maintenance of fleets and armies, admirals
and generals, kings and emperors ; whereas, ours has not been
taxed for a single dollar, to be applied to the purposes of the cen-
tral government. Nevertheless, the land of France so steadily
rises in value, that it would now command thrice as large an
amount of money as could be obtained for all the real estate of
our Union.
Why, Mr. President, is it so ? Because, French policy looks
138 LETTERS TO THE
to relieving the farmer from the tax of transportation, and thus
giving value to the land, and the man by whom it is cultivated ;
while ours looks to increasing that tax, and destroying the value
of laud. Because, the one looks to increasing the power of asso-
ciation and combination ; while the other looks to its destruction.
Because, the one looks to diversifying the pursuits of the people ;
while the other seeks, as far as possible, to limit the whole community
to the pursuits of scratching the earth, on one side, and trade and
transportation, on the other. Because, the one would tend to create
a scientific agriculture, and to promote demand for all the powers
of THE MAN ; while the other seeks to limit the demands upon its
people, to brute force, on one side, and craft on the other. Be-
cause, the one looks to increasing the products of the land, while
augmenting their prices ; and the other, to diminishing the yield,
while lessening the prices of the things produced. Because, the
one enables the people subject to it, to import the precious metals ;
while, the other compels their exportation. Because, the one
looks towards raising the value of the laborer, and making him
more free ; while, the other tends towards diminishing his value,
and thus making the slavery of the white man and the black, the
law of the land. Because, the one seeks to establish the indepen-
dence of both the people and the state ; while under the other,
colonial dependence grows from year to year. Because, finally,
the one looks to the extension of that domestic commerce which,
as you have so distinctly seen, is the only sure foundation of a
great foreign one ; while those to whom we owe the other, have
dreamed of the erection of a great foreign commerce, upon the
ruins of a domestic one.
The more, Mr. President, you study the commercial movement
of France, the more you will be satisfied of the accuracy of your
views as to the sort of free trade that is really needed by your
countrymen ; that sort which is required for giving wealth to the
people, and strength to the government.
With great respect,
Your obed't servant,
HENRY C. CAREY.
Philadelphia, February 26th, 1858.
PRESIDENT OF THE UNITED STATES. 139
LETTER TWENTY-FOURTH.
THAT men, Mr. President, become more independent in their
actions, and more free to combine their efforts with their fellow-
men, as their faculties become more and more developed, is a
truth, whose evidence may everywhere be found. So, too, is it
with communities their independence of external action grow-
ing in the direct ratio of the variety in the demand for human
faculty among themselves. Tor proof that such is the case, we
may now, for a moment, look to the working of the English and
French systems the one based upon the idea of extending foreign
trade, at every cost to domestic commerce ; and the other, upon
that of creating a great internal commerce, as the sure foundation
of a profitable intercourse with other nations.
That the total number of persons of all descriptions, employed
in Great Britain in converting cotton into yarn, and in making
the inferior cloths, the pig iron, the earthenware, and other similar
commodities, by means of which that country not only pays for
all the supplies required for her numerous population, but is ena-
bled also to bring their producers so much in debt, does not
exceed half a million, is quite certain. That large quantities
of produce are there received, and that very little is given in
. return, is a fact that does not admit of doubt ; and one, too, the
conviction of whose existence must, sooner or later, force itself
upon the agricultural communities of the world. Were it now
fully understood, and were those communities to arrive at the
conclusion, that they might as well mine and smelt their own ores,
twist and weave their own cotton, and make their own earthen-
ware, at the same time saying to those few people "Come
among us and mine ore, make iron, spin thread, and weave cloth ;"
and that having been done were they to have the work per-
formed at home, that they now have done in England, the effect
would be, that instead of feeding four millions of people, they
would have but half a million to feed ; and instead of giving such
prodigious masses of cotton, sugar, coffee, lumber, dye-stuffs,
and other raw products, in exchange for a little cloth, and very
little iron, they would have the whole of that immense quantity
to apply to the purchase of improved machinery, or to that of
the comforts and luxuries of life. Such an operation would
require but few years for its accomplishment, and for the rea-
son, that the British system, based as it is upon the idea of
cheapening labor, has little tendency to create demand for any-
thing beyond mere muscular force. Dreading a competition that
could so readily be established, Great Britain is entirely de-
140
LETTERS TO THE
pendent, for the maintenance of her power, upon the peaceful
submission of the agricultural communities, to the system of
trading: warfare, that, as you have seen, Mr. President, has beea
established ; established, too, in full accordance with the decla-
rations of some of the most eminent statesmen of England, in
reference to "the necessity for strangling in their infancy" all
attempts at competition with British makers of cloth and iron.
What, however, would be the effect upon France of a change
of policy, looking to full protection, on the part of Ireland, Tur-
key, Portugal, Brazil, India, the United States, and other coun-
tries ? Would she be placed in a similar position ? She would
not, because her policy is that of thoroughly elaborating and per-
fecting her own rude products, and those of other lands received
in exchange. With her, the value of the raw material bears but
a small proportion to that of the finished commodity ; and while
she sends to the world the finest silks and cloths, wines and por-
celain, her rival exports cotton-twist, blankets, coal, pig and bar
iron, beer, and earthenware. The one aspires to lead the world,
while the other seeks to underwork it. In the one, artistic taste
is being from day to day more fully stimulated into activity ;
whereas, in the other, the tendency towards making of man a
mere machine, increases from year to year. The one looks to the
cheapening of labor and land ; whereas, the policy of the other
tends towards raising the price of both.
Those who desired to supersede the one, would require only the
lowest description of manufacturing skill to be acquired in the
briefest period ; whereas, those who sought to supplant the other,
would need a skill to be acquired only at the cost of very many
years of application ; and a taste, for the development of which
would be required a ready access to works of art ; and, whatever
might be their progress, France would still continue in advance.
In proof that such would be the case, we need only take the
tables of exports doing which, we find that France finds her
customers chiefly in those countries that are already largely manu-
facturing, and that are, themselves, anxious to compete with her,
to wit :
England 250,000,000 francs.
United States.... 162,000,000 "
Belgium 121,000,000 "
Sardinia 72,000,000 "
Spain 65,000,000 "
Switzerland 58,000,000 francs.
Zoll-Verein 42,000,000
Russia 14,000,000 "
Hanseatic Cities. 13,000,000 "
Holland 15,000,000 "
Adding to these the colony of Algeria, 103,000,000, we have
905,000,000 exported in 1852 leaving 345,000,000 for the rest
of the world ; and nearly all that balance is so divided, as to show
that France is, everywhere, ministering to the tastes of the more
refined portions of the various communities of the world. So far,
therefore, is she from fearing competition, that she has reason to
PRESIDENT OF THE UNITED STATES. 141
desire it knowing that with every increase in the power, any-
where, to make cotton and woollen cloths, and iron, there arises
an increased demand upon her workshops, for commodities re-
quiring that high development of the artistic faculty, which she
alone can furnish.
Turning to England, we find that her exports, in the same year,
to the advancing portions of Europe, that is to say
To Europe, exclusive of Turkey, Italy, and Portugal amount
to only 19,000,000
While the raw material that has undergone the single process
of twisting, and that goes only to manufacturing countries
amounts, alone, to 10,000,000
Adding to this, the unmanufactured metals, and the coal, sent to
those countries, we shall obtain almost all the balance England
having, in fact, but little to send to any country that is itself
advancing in civilization.
To this country, the exports were more than 16,000,000 ; but
of this, nearly the whole amount consisted in common cottons and
woollens, iron, and other articles requiring little skill or taste ;
while from France were imported nearly all of those in the pre-
paration of which artistic skill was manifested. Deducting the
two quantities above referred to, there now remain no less than
38,000,000, or more than half of the whole, for India, Australia,
Portugal, Turkey, Buenos Ayrcs, Mexico, and other countries,
in which there exist few manufactures ; and in which, consequently,
are found the evidences of barbarism raw materials being cheap,
while finished commodities are dear.
The French system is based upon the idea of the enlargement
of commerce resulting fromHhe compression of raw commodities
into their smallest form ; and from the^ emancipation of the farmer
from the tax of transportation. Commerce grows with the growth
of the powers of man ; and therefore would France profit by the
adoption in other countries, of the system that has so well been
carried out at home.
The English system is based on the idea of the supremacy of
trade, and the augmentation of the tax of transportation. Trade
grows with the growth of man's necessities; and therefore would
England suffer under any system leading, in other countries, to
development of the faculties, and increase in the powers, of man.
Such being the case, we can now readily account for the steadi-
ness of the commercial policy of the one, notwithstanding the
shocks of repeated revolutions ; and for the exceeding unsteadi-
ness of the trading policy of the other, although political revolu-
tions are there unknown. The one, after long experience, has
recently announced to the world, through the President of the
Council, M. Baroche, its determination "formally" to "reject
the principle of free trade, as incompatible with the independence
142 LETTERS TO THE
and security of a great nation, and as destructive of her noblest
manufactures. No doubt," as he continued, "our customs tariffs
contain useless and antiquated prohibitions, and we think they
must be removed. But protection is necessary to our manufac-
tures. This protection must not be blind, unchangeable, or ex-
cessive ; but the principle of it must be firmly maintained."
The other, on the contrary, has changed its system repeatedly,
and especially within the last five-and-thirty years. Until 1825,
it had gone on heaping protection upon protection ; but since
that time, its policy has been altered and re-altered, until the
form of the existing one, bears hardly the slightest resemblance
to that of the days of George III., although the spirit remains
the same.
The one is quiet, tranquil, and confident, in its forward move-
ment ; whereas, the other, restless and doubtful, is unceasingly
engaged in wars for the extension of trade ; military wars, carried
on by soldiers and sailors, admirals and generals ; and trading
wars carried on by means of "large capitals" so directed as to
crush but competition, abroad or at home.
The one is rapidly becoming the leader of the advancing nations
of Europe ; whereas, the other is gradually surrounding itself with
the ruins of once-important nations, that have been its friends.
The policy of the one is in accordance with the views of its own
illustrious Colbert; and with those of Adam Smith, when teach-
ing that " that country in whpse cargoes there is the greatest pro-
portion of native, and the least of foreign, goods, will always be
the principal gainer." The other is in harmony with the doc-
trines of Sir Robert Peel, who taught that England's governing
principle should be found, in the single determination to " buy in
the cheapest market, and sell in the dearest one " buying labor,
at home and abroad, at a low price, and selling it, both at home
and abroad, at a high one. The one looks to the elevation and
enfranchisement of man ; the other, to the subjection of the laborer
to the trader, and to his ultimate enslavement.
What, now, Mr. President, is our condition, as compared with
that of France ? Can we maintain commerce where we will ?
Are we not, on the contrary, forced to go where we must ? Can
we send wheat, or corn, to the people of California, or Australia ?
Do those of Brazil, or India, desire to purchase rice or cotton ?
Assuredly not their demands upon the outer world being for
finished commodities, and not for the rude products of the soil.
How, then, do we maintain commerce with Brazil and California ?
Is it not by the circuitous route of Manchester and Lyons the
whole of the tax of transportation being paid by the farmers and
planters of the Union? That it is so, cannot be questioned.
France, on the contrary, sends the rude products of her soil to
every country of the world having first combined tons of corn
and potatoes with pounds tof silk and cotton, clay and gold, in
PRESIDENT OF THE UNITED STATES. 143
accordance with the advice of Adam Smith. Sending hundreds
of millions, in value, compressed into tens of thousands of tons, in
bulk, she is enabled to throw upon those who send her raw mate-
rials, all the cost of transportation, while establishing, from year
to year, an independence more complete. We, on the contrary,
forced to maintain commerce with the world, through the medium
of foreign ships and mills, become daily more and more dependent.
Why, Mr. President, is it so ? Because the central government
refusing to perform the duties devolved upon it by the States
limits its views to its own protection, and neglects the protection
of the people.
As a consequence of this unhappy state of things it is, that the
planter is compelled to pray for short crops instead of large ones.
With the one freights being low, while prices are high he is
enriched. With the other freights being high, and prices low
he is impoverished. So, too, with our farmers, dependent, as
they everywhere are, upon the trivial demand of Europe, conse-
quent upon short crops in England, France, or Germany. Give
them that great domestic commerce, the need of which is to your-
self, Mr. President, so very evident that commerce which France
so rapidly obtains and they will, then, be enabled to rejoice in
the prosperity of the agricultural interest everywhere.
Hoping that by aid of reforms to be initiated by yourself, our
farmers and planters may be enabled to obtain that free inter-
course among themselves, and with the outside world, of which
they have been so long deprived, I remain, Mr. President,
With great respect,
Your obed't servant,
HENRY C. CAREY.
Philadelphia, March 3rd, 1858.
144 LETTEKS TO THE
LETTER TWENTY-FIFTH.
WE are constantly assured, Mr. President, that the protective
system, favorable as it may be to commerce at home, tends to the
annihilation of foreign commerce. All the facts of history tend,
however, to prove the reverse of this the power to maintain
intercourse with foreign nations having always grown with the
growth of domestic commerce, and it having been by the latter's
help, alone, that the former has been maintained. The great de-
velopment of British external commerce followed that of the inter-
nal one, which owed its existence to a protective system of the
most stringent character. So, too, has it been, with all the pro-
tected countries of Europe the power to maintain exterior com-
merce having, everywhere, followed the adoption of measures
looking to the development of an internal one, as is shown by the
following facts :
From 1826 to 1835, as we have seen, the domestic exports of
France averaged only 500,000,000 francs; from 1845 to 1849,
they averaged 1,000,000,000 ; and in 1856, they had attained the
enormous amount of 1,893,000,000 having almost quadrupled
in the five-and-twenty years, during which we have been subjected
to such repeated crises, consequent upon the determination of the
Federal government to secure to itself the control of the local
banks and their circulation.
In the free-trade period of Russia, from 1814 to 1824, the quan-
tity of foreign merchandise consumed averaged only $32,000,000
a year. Growing gradually, by aid of highly protective measures,
the power of that country to be a customer to foreign nations, had
risen, at the opening of the Crimean war, to $75,000,000.
The domestic exports of Belgium, in 1828, amounted to only
156,000,000 francs. By 1850, they had become 263,000,000.
In 1856, they were 375,000,000 the exports of food from that
little country, with its four and a half millions of people, having,
thus, been greater than our own average, in the decade ending in
1855 embracing, as it did, the periods of the Irish famine, and
the short crops of Germany and France. Belgium follows the
advice of Adam Smith, in combining her food and wool in the
form of cloth, and thus enabling it to travel cheaply to the most
distant countries. We repudiate it, and hence the inability of our
farmers to maintain commerce with the world.
Spain, impoverished as she has been, by the ' ' warfare ' ' of the
smugglers of Gibraltar, and by repeated revolutions, increased
her exports from 71,000,000 reals, in 1827, to 166,000,000, in
1852
PRESIDENT OF THE UNITED STATES. 145
Why it is, Mr. President, that such have been the uniform
effects of the adoption of a system looking to the protection of the
farmer in his efforts to bring the consumer to his side, and thus
relieve himself from the tax of transportation, will readily be un-
derstood by all who study the following facts, in reference to the
highly protected country of the Zoll- Verein :
Forty years since, Great Britain received from Germany only
3,000,000 of pounds of wool; but, with the decline of German
manufactures, the export of raw materials so largely increased,
that, in 1825, the receipts in England, from that source alone,
amounted to no less than 28,000,000 a large portion of which
was paid for in English cloth. Such having been the state of the
trade, it follows, necessarily, that wool in Germany must have been
cheaper than in England, while cloth must have been dearer the
prices of the two having been widely distant from each other.
In 1851, the quantity of wool, and woollen yarn, imported into
Germany, amounted to 34,000,000 of pounds, and the quantity
exported to 9,000,000 leaving not less than 25,000,000 as the
net import, and proving that wool in Germany must have been
higher than in other countries. In the same year, the quantity
of woollen cloth exported, amounted to 12,000,000 of pounds
proving that it must have become cheaper than in other countries.
The prices of raw material and finished articles had steadily ap-
proximated to each other, and thus was furnished the most con-
clusive evidence of advancing civilization.
Two-and-twenty years since, the import of cotton, and yarn, into
Prussia, amounted to 16,000,000 of pounds having increased,
in the twelve years that had then elapsed, but 6,000,000. The
movement in the Zoll- Verein, in the period that has since elapsed,
is thus given :
1836. f 1845. 1851.
Cotton 152,364 cwts 443,847 cwts 691,796 cwts.
Cotton twist 244.869 " .. 574.303 " .. 676.000 "
397,233 cwts. 1,018,150 cwts. 1,362,796 cwts.
The export of yarn and cloth, in this latter year, amounted to
159,241 hundredweights, leaving for domestic consumption more
than 1,200,000 hundredweights, or 130,000,000 of pounds this
proving, first, that cotton cloth had become very cheap ; second,
that the power of consumption, among the agricultural population,
had largely increased. That increase was a necessary consequence
of the enlargement of the market for labor, and for the products
of land, resulting from the extension of this manufacture. The
weight of cotton goods exported, was, as we see, less than an
eighth of that of the wool and yarn imported ; and yet, the value
of that small quantity, was 20,000,000 of thalers = $15,000,000
being almost enough to pay for the whole import. At least
10
146 LETTERS TO THE
three-fourths of this large sum consisted of labor representing
German food, thus enabled readily to go to distant countries.
Thirty years since, Germany supplied the world with rags, and
imported paper, of which her consumption was then but small.
In 1851, all had changed ; the net import of the first having been
37,000,000 of pounds, while the net export of paper had risen
to 3,500,000. In the first period, rags were cheaper than in other
countries, while paper was dearer. In the second, rags were
dearer, while paper was cheaper. The prices of the two had
greatly approximated ; and therefore had the consumption of
paper so much increased as to absorb not only the whole quantity
produced at home, but, in addition thereto, more than 30,000,000
pounds produced abroad. You will, Mr. President, more fully
appreciate the value of these facts, when you reflect how large
must have been the domestic production of rags, resulting from an
addition to the consumption of cotton amounting to more than
100,000,000 of pounds weight.
In 1830, the quantity of coal that was mined was but 7,000,000
tonnes and adding thereto 1,200,000 of brown coal, we have
a total of 8,200,000. In 1854, the first had increased to
34,000,000, and the last to 12,000.000 making a total of
46,000,000.
In 1834, there were made 76,000 tons of bar iron. In 1850,
the quantity had risen to 200,000 ; and the pig iron that was
made amounted to 600,000 tons. The present consumption of
the Zoll- Verein is given at fifty pounds per head, per annum
being more than in any country of Europe except France and
Belgium ; and more than in any country of the world, except the
two already named, Great Britain, and the United States. It is,
however, the first step that is always the most costly, and the
least productive. Every furnace that is built, and every mine
that is opened, tends to promote further progress in the same
direction each and every of them tending to promote association
and combination. In 1849, not a furnace was to be seen in the
neighborhood of Minden, in Westphalia, but "now," says a re-
cent traveller, "they stand like towers about the broad plain"
making a vast demand for food, clothing, and labor. Of the 80
copper-mines of Prussia, no less than 24 have been opened within
the last few years. Every mine, every furnace, and every mill,
aids in the creation of new roads, and the improvement of old
ones -facilitating the opening of new mines, the utilization of the
powers of nature, and the development of mind ; and thus in-
creasing the value of man, while diminishing that of all the com-
modities required for his use.
The value of cotton and woollen goods exported in 1851, was
30,000,000 of thalers = $25,000,000 the chief part of which
large sum, consisted of the food that had been combined with the
labor, in the process of converting it into cloth. As a consequence
PRESIDENT OF THE UNITED STATES. 147
of this, the necessity for going abroad to find a market for food
had so greatly decreased, that the net export from the country
that only thirty years since was the granary of Europe, was but
10, 000,000 bushels.
Look where we may, Mr. President, we meet with evidence of
the fact, that the power to maintain a profitable foreign commerce
grows with the growth of the domestic market for food, wool, and
laborers, and the consequent diminution of the exhausting taxes
of trade and transportation. Look, too, where we may, we meet
with evidence of the necessity for protection, as the only means
by which a great domestic commerce can be created ; and of your
own perfect accuracy in regarding that commerce as the thing we
really need it being the only sure foundation of an extended
intercourse with other countries. Commerce grows with every
diminution in the necessity for machinery of transportation as
is shown in all the countries which follow in the lead of Colbert,
and of France. It declines, with every increase of this necessity,
as is shown in Ireland, Portugal, Turkey, the United States, and
all others, which follow in the direction indicated by England.
That commerce may grow, and that nations may acquire that
real independence which exhibits itself in the power to maintain
direct intercourse with the world, there must be steadiness and
regularity of the societary action. Growing always with the
growth of domestic commerce, stability is found, in all countries,
existing in the direct ratio of the diminution of dependence on
foreign trade ; and therefore is it, that France, Belgium, Germany,
and Russia, have passed through the recent crisis, almost un-
harmed ; while in Britain, and among ourselves the two commu-
nities whose policy looks to the sacrifice of domestic commerce at the
shrine of trade the societary movement would have been almost
at an end, had not the banks of both suspended payment.
The more you reflect upon these facts, the more, Mr. President,
it will, as I think, be obvious to you, that all our difficulties have
their origin in excess of centralization, and not of localization ;
and that it is to change in the action of the central government,
and not to interference with the local ones, we must look for
remedy.
With great respect,
Your obed't servant,
HENRY C. CAREY.
Philadelphia, March Sth, 1858.
LETTERS TO THE
LETTER TWENTY-SIXTH.
THE real and permanent interests of all the members of a com-
munity, Mr. President, are in perfect harmony with each other
each and every man profiting by whatever tends to increase the
productive power of his neighbors. So, too, is it with the com-
munities themselves each profiting by the increase in the pro-
ductive power of each and all. That it may increase, there must
be, in each, a growing power of association and combination, re-
sulting from increase in the diversity of employments the con-
sumer and the producer taking their places by each other's side.
To prevent such approximation is the object of the "warfare"
waged by the British manufacturer, as described in a former letter ;
and hence it is, that discord grows so steadily in all the coun-
tries subject to the British system Ireland and India, Turkey
and Portugal, Jamaica, and these United States. Seeking evi-
dence of the existence of a perfect harmony of international inte-
rests, and of the necessity for measures tending to a reduction of
the power to carry on that war, we may look to the statistics
of the cotton trade for the past few years, to some few figures in
regard to which, I desire now, Mr. President, to invite your
attention.
Twenty years since, France consumed 200,000 bales of cotton.
She now requires 400,000. Twenty years since, Germany re-
quired 100,000. She now requires 400,000. Twenty years
since, Sweden took 6000 bales. She now takes 60,000. We
have, thus, an increase in three highly protected countries,
amounting to 550,000. Adding to this, the additional demand
of Belgium and Denmark, Russia, Austria, and Spain, we obtain
about 700,000, as the quantity added to the consumption, in the
protected countries of Europe. Turning now homeward, we find
the addition in our own consumption, in the six years that followed
the passage of the protective act of 1842, to have been about
300,000 bales; and thus do we obtain, as the total additional
consumption of the protected countries, the quantity of a million
of bales.
In four years, ending with 1838, the quantity taken by the mills
of Great Britain averaged 1,100,000 bales. In the four, ending
with 1854, the average was 1,750,000 the difference having been
650,000. In the same period, however, there had been an in-
crease in the export of mere yarn, to be woven abroad, amounting
to 30,000,000 pounds ; and an increase in the imports from India,
to the extent of nearly twice that quantity, as I have reason to
believe, although unable to obtain the precise figures. This last
constitutes no addition to the supply of the world, there being no
reason for believing that more cotton is raised in India now, than
PRESIDENT OF THE UNITED STATES. 149
was raised there twenty years since. The excess import into
England, is a consequence of decline of the domestic manufac-
ture, and of the growing necessity, throughout India, for making
exchanges among themselves, through the medium of distant
lands precisely as the people of Illinois and Mississippi are now
compelled to do. The additional yarn being included in the con-
sumption of the countries to which it goes, and the additional
India cotton giving no increase of supply, the two quantities are
to be deducted from the apparent increase of British consumption.
That done, we have little more than 400,000 bales, as the growth
of consumption outside of the protected countries, against a mil-
lion within them. Such being the case, the real interests of the
planter would certainly be promoted, by the adoption in Ireland,
India, Brazil, Turkey, Portugal, and other unprotected countries,
of the system under which the consumption of Central and North-
ern Europe has so rapidly and wonderfully increased.
How is it possible, Mr. President, that these various commu-
nities could accomplish the work suggested ? All of them are
poor, and so, it will be said, they are likely to remain. So must
they do, while they shall continue the work of destroying capital,
as they are now doing ; but, so they will not do, whenever they
shall begin to establish that circulation of service which consti-
tutes society, and economizes labor. Ireland feeds daily more
than seven millions of people all of them consumers of capi-
tal, while but few of them produce anything to represent the
things consumed. More than three-fourths of the mental and
physical power of that country goes to waste ; but that waste
would cease, so soon as A and B were enabled to exchange ser-
vices with C and D ; and they, each and all, were enabled to
exchange with others. Estimating the loss as being equivalent
to the labor of only two millions of men and women, and the
value of the things they might produce, at only half a dollar per
day, we obtain a daily amount of a million of dollars; and an
annual one of $300,000,000. The effect of this labor in utilizing
the coal, the ore, and the thousand other things, now useless, by
which those idle millions are surrounded, would be, to add almost
as much, yearly, to the value of the land in cultivation ; and
here we have an annual amount, far exceeding the total value of
the machinery for mining coal and smelting iron ore, and for
spinning and weaving cotton, wool, flax, and silk, now in use in
England. Turning to India, we see a hundred millions of people,
nine-tenths of whose powers are wasted for want of domestic com-
merce. Give them that, and capital will at once exist, to an
amount far greater than that of the machinery of Britain and
France combined. Looking next to Turkey and Portugal, we
see millions of people in a situation precisely similar ; and yet,
they must all be fed, clothed, lodged, and kept in order for daily
work. The daily loss, there, is greater than the annual amount
of skill and labor given by England to the conversion of the cot-
150 LETTERS TO THE
ton and the wool, the iron, the copper, and the tin, they can
afford to purchase. Let employments be diversified, and that loss
will cease ; and then, capital will be found to exist in vast abun-
dance. So is it everywhere. Mexico and Peru would have an
abundant supply of capital, were they enabled so to modify their
policy as to produce that circulation which is required for se-
curing, that, each and every man be enabled to sell his own
powers, and to become a competitor for the purchase of those of
others. All force results from motion, and it is only because
there is no motion in the society of Ireland, India, and Turkey,
that those communities continue poor.
Looking now homewards, Mr. President, we find a waste of
capital, in the form of physical and mental power, not exceeded
by any country of the world, with the slightest claim to be held
as civilized. Farm after farm is cleared, and State after State
occupied, to be then in part abandoned, because of the growing
necessity for robbing the earth of its soil, to be sold in distant
markets. Mills follow mills, and furnaces follow furnaces ruin-
ing, in quick succession, all who undertake such works. Em-
ployers and workmen spend years in acquiring skill to be then
turned adrift, to seek, in the wilds of the West, the food and
clothing that the policy of the central government denies to them
at home.
With every step in this direction, the tax of transportation
grows the necessity for new roads increasing, as the power to
make such roads declines. The proportion of the population
engaged in the work of transportation, and in political and tra-
ding speculation the class of middlemen that class which lives
at the cost of the producers is, therefore, a continually increasing
one. Hence, Mr. President, it is, that we so steadily decline in
both morals and manners that being the road/rom civilization,
and not the one leading towards it.
Look where we may, we witness a waste of labor, consequent
upon the absence of that diversification in the demand for human
effort, which is needed for giving us that freedom of domestic
commerce, regarded by yourself as being so essential to the crea-
tion of an extended intercourse with foreign countries. Millions
of human engines are constantly burning the fuel required for the
production of the power to labor, and as constantly blowing off
the steam that is produced. Look where we may, we see mills
and furnaces, mines and roads, scarcely, even when at all, em-
ployed all the power they are prepared to furnish, thus going to
waste. Why is it wasted ? Because, unable to find a market for
his grain, the farmer is forced to store it. Why can he not sell
it ? Because the miller, the weaver, the carpenter, the miner,
the mason, and the laborer, are unable to sell the force resulting
from the consumption of food.
Look, I pray you, Mr. President, to the extraordinary waste
of capital, consequent upon the necessity for using the most perish-
PRESIDENT OF THE UNITED STATES. 151
able materials in our houses, ships, roads, bridges, and other con-
structions, of every kind. This, too, is a growing waste, as is
proved by the fact, that the rate of insurance against fire has
doubled in the last few years. In countries that are advancing in
civilization, security increases, and the rate declines. With us,
security steadily diminishes, and the rate increases thus furnish-
ing further evidence that our tendencies are from, and not to-
wards, civilization. Why is it, that we use so little iron ? Is
it because of any deficiency of coal and ore? Certainly not.
Why, then, do we not profit by them ? The country abounds in
laborers, who would gladly employ themselves in the development
of the treasures of the earth, could they obtain food in exchange
for labor. Why is it so ? Because the central government leaves
the people entrusted to its care, exposed to a "warfare" having
for its object, the prevention of the mining of coal, or the making
of iron, in any country, except the single one of Britain. Because
it holds, that while bound to protect itself, it is under no obliga-
tion to protect its constituents.
Look next, I pray you, Mr. President, to the taxation of our
farmers, for the maintenance of the 7, 000,000 tons of shipping,
that carries our products to the distant markets, and reflect,
that the cost of maintaining this great fleet, is paid by the
people who have rude products to sell, and not by those who
buy them. The man who must go to market, must pay the cost
of going to it, let it take what form it may. The corn and the
cotton pay for the maintenance of the ships leaving to the cloth
all the profits resulting from their contributions.
Look further, to the fact, that the loss of shipping, in a single
year, by age and accident, is no less than 93,000 tons, as shown
in the last Treasury Report. At $40 a ton, we have, here, no
less than $37,000,000. Add to this, for the cargoes of these
vessels, only a similar amount, and you have $74,000,000 ; all of
which falls upon the people who furnish the machinery of trans-
portation it being the community whose products are most bulky,
that pays the cost of going to, and returning from, the market.
Throughout the Union, Mr. President, there is a waste of power
unparalleled in the world. That power is capital. At how much
might it be valued, were it fully applied? At more than the
whole of our present product the quantity wasted being greatly
more than that employed. Our present production has been
estimated at $3,500,000,000 a year being nearly $10,000,000
a day. Estimating the daily waste at no more than that sum,
we should have for the weekly one, a sum equal to the capital
that has been required for the creation of all the cotton-mills of
England. Why do we not economize this capital, and let it ap-
pear in the form of mill's ? Why do we not bring the spindle to
the plantation ? Why do we not make a market at the mines
and furnaces, for the produce of the farm ? Because the central
government refuses to permit the people to make the effort, once
152 LETTERS TO THE
for all, to free themselves from the tax of transportation. Be-
cause, in opposition to the views so well expressed by yourself,
your immediate predecessors have held, that it was better for each
man to go daily to the spring in search of water, than that all the
men should unite in the effort to construct an aqueduct, by means
of which the water should be enabled to come daily to their doors.
That, Mr. President, is precisely what we are doing each man
sending his little products to the distant market, at daily cost for
transportation, when only the slightest effort would be required
for bringing the market to their land, and thus annihilating, at
once and for ever, the tax of transportation.
In all countries, capital accumulates in the precise ratio of the
economy of human power. That it may be economized, there
must be differences in society, resulting from the development of
the various faculties of men. The commercial policy of France
tends in that direction, and therefore does she grow rich ; while,
for want of that policy, Turkey and Portugal, Ireland and India,
and our Union, decline from day to day doing this for the plain
and simple reason, that in each and every of them there is an en-
forced waste of capital, amounting, weekly, to more than the
annual value of the foreign manufactures they consume. Let them
be emancipated from the dominion of trade let them have com-
merce at home and they will soon have more to sell, and will be
enabled to buy far more than they now do becoming larger cus-
tomers to the producers of cotton and sugar on the one hand, and
to the makers of silks and ribbons on the other ; and adding, too,
to the market of these latter, by increasing the demand for the
products of the former.
The farmers of the world, Mr. President, are natural allies, as
against the trader he seeking to have their products at low
prices, and they desiring to sell at high ones. In the natural
order of things, then, the agricultural nations should be found
united in their resistance to a warfare against themselves, having
for its object, the cheapening of their products. In Europe, they
are so found all the advancing countries having adopted mea-
sures of protection. As a consequence, their demands upon our
planters are steadily increasing ; and yet, strangely enough, our
planting interest is the steady opponent of protection, here and
everywhere ! Constantly profiting, as they do, by the increased
demands of France and Germany, they appear before the world
as advocates of the system, under which the Irish and Portuguese
demand for cotton, has almost disappeared. Hence it is, that,
instead of placing ourselves, as we might do, in the lead of the
world, we are rapidly declining towards that condition of colonial
dependence, from which we were rescued, by the war of 17 7 6.
With great respect,
Your obed't servant,
HENRY C. CAREY.
Philadelphia, March IQih, 1858.
PRESIDENT OF THE UNITED STATES. 153
LETTER TWENTY-SEVENTH.
THE first of all the taxes to be paid by land and labor being
that of transportation, it follows, Mr. President, that it takes pre-
cedence of contributions required for the maintenance of the State.
All that Iowa can claim of her citizens, is a share of the few
cents there received for a bushel of corn, and not a share of the
many cents paid for it in Manchester.
The tax of transportation diminishing with every increase in
the power of combination, consequent upon increase in the diver-
sity of employments, it follows, necessarily, that the power of
the State grows with the growth of the power of combination
among its people. The farmer close to New York, who sells his
corn at a dollar a bushel, is more able to contribute to the sup-
port of government, than his competitor of Iowa, who gives four,
five, or six bushels, for a similar quantity of money.
The greater the diversity of employments, the more is the ten-
dency towards development of the various powers of the earth,
and towards the creation of manufacturing and mining towns and
villages each constituting a local centre of attraction, capable
of counteracting the centralizing tendencies of the State at large.
That these propositions are true, cannot, Mr. President, be
questioned. Being so, the general laws deducible from them
would seem to be as follows : The more numerous the demands
for human faculty, and the greater their variety, the greater is
the power of combination among men the more productive must
be their labor the greater must be the tendency towards the
creation and extension of local institutions and the greater must
be the power of the State of which they are a part.
Such being the law, it follows, necessarily, that the less the
variety in the demand for human powers, the greater must be the
tendency towards exhaustion of the soil, and dispersion of its
people every step in that direction being accompanied by dimi-
nution of local power, and growing weakness of the State.
That such is the law, we have proof in the enormous revenue
of England of the present, as compared with the England of the
Plantagenets ; and in those of France, and all the countries that
follow in the lead of Colbert, as compared with Ireland, India,
Portugal, Turkey, and all other countries that follow in the direc-
tion now indicated by the economists of England.
How, Mr. President, is it with ourselves ? The answer to this
question would seem to be found in the single statement, that em-
ployments become less diversified from year to year. With each
successive year, for ten years past, our people have been more
154 LETTERS TO THE
and more compelled to make their election between the work of
robbing the soil, on the one hand, and plundering their fellow
men, on the other the proportion borne by traders and trans-
porters, speculators and peculators, lawyers and politicians, office-
hunters and office-holders, and middlemen of all descriptions,
to the whole mass of society, having been a constantly increasing
one. Great as, in those years, has been the tendency in that direc-
tion, it has increased tenfold, in the brief period in which you have
occupied the presidential chair mills, furnaces, mines, and ma-
chine shops having, everywhere, been closed, and hundreds of
thousands of people having been reduced to choose between
crime, on the one hand, and destitution, if not even death, on the
other.
Such, Mr. President, being the state of things among the peo-
ple, what should it be, in the relation of the people to the State ?
If increasing diversity of employments among the one, gives
strength for the maintenance of the other, should not decline in
that diversity be attended with growing weakness in the State ?
Assuredly it should, and that it really is so, we shall obtain abun-
dant evidence, turn to what portion of the Union we may.
Looking first to New England, we witness an emigration of the
most remarkable kind each and every stage thereof being accom-
panied by consolidation of the land, diminution of cultivation,
and decline of power to maintain schools, churches, roads, and go-
vernment. From one quarter, we hear that it has become "evi-
dent that the number of families in quite a number of our agri-
cultural towns is growing less. The old homesteads," as we are
further told, "become the property of the adjacent husbandman,
or go to ruin under the proprietorship of some far-off owner."
From another, we learn, that "many of the churches are reduced
to the last extremity," and that, "but for the missionary society;
by which not a few of them are supplied, would yield at once to
utter discouragement." Such being the general tendency through-
out New England, the "wonder is not, that so many Eastern
churches are drooping, but that they have so long borne up
against the constant and copious depletion of their vigor and
their piety. ' '
Turning now to New York, we find a State in which the average
yield of wheat, has fallen to little more than a dozen bushels
one, in which the diminution of the rural population, and the con-
solidation of the land, become more rapid with each successive
year. Taking next, the Western portion of the State, one of the
finest wheat-growing countries of the world, so recently a wilder-
ness, we find its farmers already engaged in discussing the neces-
sity of abandoning the wheat culture, as the only means of freeing
themselves from the ravages of insects, provided by the Creator
for the removal of diseased and decaying vegetable matter. Com-
pelled to the exhaustion of their soil, and unable to vary their
PRESIDENT OF THE UNITED STATES. 155
cultivation, their plants become weaker from year to year, and
more and more fitted to become the prey of the fly, and other
enemies. As a consequence of this it is, that emigration steadily
increases, and that the power to maintain the local institutions as
steadily declines.
The young Ohio, now but little more than half a century old,
has already become, and for similar reasons, the great emigrating
State of the Union the diminution in the yield of her land,
having kept equal pace with augmentation of the pressure of
taxation for local purposes. Passing thence, to the yet younger
Indiana, we find the same great fact local institutions that had
been self-supporting, having been compelled to look abroad for
the means of continuing their existence.
Turning now South, we see, in Virginia, a .community occu-
pying a land, that has been blessed by nature to an extent not
exceeded in the world, and yet her government finds itself com-
pelled to tax tradesmen and tavern-keepers, attorneys and den-
tists, clocks, harps, pianos, carriages, slaves, and numerous other
commodities and things, for the purpose of obtaining the means
required for its support. Quite recently, it has been proposed
to lay an export duty upon oysters, as a means of maintaining the
declining credit of the State ! Having torn out and sold her
soil, she has little now to sell, but slaves ; and, as a necessary
consequence, the burthen of the local institutions becomes greater
from year to year. How it is with South Carolina, you have
seen, Mr. President, in an extract from a Report made to the
Agricultural Society of that State, given in a former letter.*
Georgia has almost ceased to increase in population, although
her territory, properly cultivated, would support half the people
of the Union. Alabama, a State that, but forty years since, was
almost entirely unoccupied, is following rapidly in the train of
Carolina and Georgia the yield of her soil decreasing land
becoming consolidated and the power of extending, or even
maintaining, churches, schools, or State, declining with each
successive year.
The policy of the central government, Mr. President, tends to
the subjection of the farmer, and the planter, to the trader, and
to the building up of great cities, to be supported at the cost of
those who produce corn and cotton, and need to consume cloth
and iron. Look, I pray you, to the fact, that the city govern-
ment of New York alone, expends, this year, more than $8,000,000.
Who are the payers of these millions ? The trader ? The specu-
lator ? The property-holder ? The ship-owner ? It is none of
these all of them exercising the power to tax the unfortunate
producers who find themselves compelled to depend upon distant
markets, and to accept a single yard of cloth in exchange for the
* See note to Letter XXII.
156 LETTERS TO THE
corn that commands, in Manchester, ten or a dozen yards. The
man who must go to market, must pay the cost of getting there,
let it take what form it may; and among the items of cost, that of
maintaining the traders, brokers, and speculators, of a city like
New York, stands forth most conspicuously. The necessity for
going to a single and distant market, increases with every year
every step in that direction being attended by an augmentation
of the power of the trader and transporter, accompanied by de-
cline in the powers of the land, and in the prices of its products.
These, Mr. President, being evidences of declining civilization,
we need be at little loss to account for the fact, that it has been
here declared, that "free society has proved a failure," and that
bondage is the natural condition of the laboring-man, be he white
or black.
How is it, with our central government the only one, claim-
ing to be regarded as civilized, by which it is held, that the duties
of government are limited to the protection of itself, and the com-
pensation of its members and its servants leaving wholly out of
view the protection of the people, for the promotion of whose in-
terests it was established ? Do its demands upon the people
diminish with the decline in the powers of the laud, and in the
prices of its products ? Does the farmer who takes 12 bushels
where his predecessor had obtained 24, pay less to the support
of the Federal government ? Docs the flour which now sells for
$4, contribute less to the support of Federal officers, than that
which, forty years since, was sold at $10 ? Does the cotton which
sells at 8 cents, contribute less for the support of ships of war,
than that which sold, in 1816, at 25 ? Is the tobacco which com-
mands $50 or $60, less taxed for the payment of senators and
representatives, than that which sold, forty years since, for $100
or $120 ? Let us, Mr. President, inquire.
In the half century which followed the close of the war of 1783,
the highest expenditure of the Federal government, in time of
peace, was $14,000,000 ; and even that amount had been reached
only in the first term of General Jackson's administration
the average expenditure of his immediate predecessor, Mr. Adams,
having been only $12,500,000, while that of Mr. Monroe's two
terms, had been $13,000,000.
The average contribution, in the times of Messrs. Adams and
Monroe, may be taken at about $1.70 per head. In General
Jackson's first term, it was less the population of 1830 having
been nearly 13,000,000, and the amount of contribution only
$14,000,000 ; or little more than a dollar per head. The reduc-
tion thus exhibited, was evidence of growing strength of the local
powers proving advance in civilization.
Five-and-twenty years have since elapsed, during the whole of
which time, as you, Mr. President, have seen, the central govern-
ment has been engaged in almost ceaseless efforts to extend its
PRESIDENT OF THE UNITED STATES. 157
powers, at the cost of the local authorities. Daring nearly all
that period, its policy has tended to diminish the number of em-
ployments open to our people to lessen the power of combina-
tion for any useful purpose to increase the cost of transporta-
tion to make the farmer and planter more dependent on the
distant market and thus to re-introduce the colonial system, so
well described by Mr. Gee, from which we were emancipated by the
war of 1776. The result is seen in the facts, that, while the popu-
lation has increased but about 130 per cent., the expenditure has
quintupled in amount, and more than doubled in its ratio to the
number of persons by whom the contributions were paid.
Why is this so ? Because, in opposition to the practice of the
enlightened and civilized countries of the world, it is held by our
central government, that the larger the space occupied by any
given number of people, and the less, consequently, the power of
association and combination, the greater must be the power of
the state. Always on the watch for the acquisition of land,
however poor, we have gone on, adding Florida to Lousiana,
Texas to Florida, California to Texas, and New Mexico to Cali-
fornia ; and now hold ourselves ready, at almost any cost of
honor, or of treasure, to become proprietors of Cuba, or Sonora.
With every step in that direction, there arises a necessity for in-
crease of fleets and armies, and increase in the number of public
officers with corresponding decrease iu the power of the people
to provide the means required for their support. In all advancing
countries of the world, the proportion of the proceeds of labor
required for the purposes of government, is a decreasing one. In
all declining countries, it is an increasing one. With us, it steadily
increases the amount demanded, per head, being now twice as
great as it was, when the selling prices of our raw products were
more than twice as high as they are now.
That the progress of men, whether towards centralization or
localization, slavery or freedom, barbarism or civilization, is one
of constant acceleration, is a truth, the evidence of which is found
in every page of history ; but nowhere, Mr. President, can stronger
proof be found, than in the records of our Treasury. Fifteen
years since, under the administration of Mr. Tyler, the expenditure
of the Federal government was $23,500,000. It is now $70,000,000,
and there is every reason to believe, that before the end of your
administration it will reach $100,000,000 the necessity for ships
of war, and soldiers, increasing with the decline in value of all
the commodities we have to sell. Five years since, the expendi-
tures of New York city were under $3,000,000. They are now
$8,500,000 ; and there is every reason to believe, that before the
close of another decade, they will have largely grown the power
ty) tax the farmers and planters of the country, growing with every
step in the progress towards reduction of the population to de-
158 LETTERS TO THE
pendence on the sale of the soil, in the form of wheat and cotton,
for the means of present support.
For half a century, during which the Federal government was
administered by Washington and his successors, down to Jack-
son, the general tendency of its action was towards carrying into
practical effect the Declaration of our Independence. During
nearly all that time, there was a general tendency towards increase
in the diversity of employments, with constant increase in the
power of association, in the strength of local action, and in the
steadiness of the currency no general suspension, in time of
peace, having occurred in all that time. In the period that has
since elapsed, the policy of the revolution has been abandoned,
with constant increase in the dependence of the planter and farmer
upon the distant trader. The power of local action, therefore,
steadily declines, with constant diminution in the respect of the
central government for local rights, and growing instability of the
currency the suspensions of payment, in that brief period, having
been no less than three in number.
In the half century from Washington to Jackson the policy
of the country having been that of peace, and of the extension of
that domestic commerce you have so well described the Federal
government was economically administered, and the power to con-
tribute to its support was a steadily augmenting one. Since then
the policy having become that of free trade, annexation, and
war the expenses of the central government have greatly in-
creased, while the power to contribute to its support, or to that
of local institutions, has tended to diminish. In the first, Mr.
President, all the phenomena we meet are those of an advancing
civilization. In the other, they are those of a declining one.
How far the one, or the other, has tended to the production of
strength in the State, I propose to examine in another letter
remaining meanwhile,
With great respect,
Your obed't servant,
HENRY C. CAREY.
Philadelphia, March I2th, 1858.
PRESIDENT OF THE UNITED STATES. 159
LETTER TWENTY-EIGHTH.
STEADINESS and regularity of movement, in machinery of any
kind, is necessary to the maintenance of motion, and the develop-
ment of power. A steam-engine subjected to sudden and repeated
shocks, could have but a brief existence. So, too, Mr. President,
is it with individuals and societies regularity of action being
indispensable to the development of their powers, to durability,
and to increase of their influence on the movements of the world
at large. How far such regularity has been attained among our-
selves, and how far our various systems of policy have tended to
augment, or lessen, the ability to control our own movements, and
to influence the action of the world, it is proposed now to show.
Peace was restored to the world in 1815. We had passed,
almost unharmed, through a war with Great Britain, and had
come out of it rich and strong. The tariff being a highly protec-
tive one, the customs-revenue was large exceeding $36,000,000.
One year later, the system was changed all the changes being
in the direction of present, or ultimate, abandonment of the idea
of protecting the farmer in his efforts to bring the consumer to
his side, and thus relieve himself from the wasting tax of trans-
portation. Factories and furnaces being, therefore, closed,
mechanics and laborers were compelled to seek the West, and
sales of public land rapidly increased. Large receipts from both
land and customs gave us, of course, a prosperous treasury the
total receipts of 1819 having been $24,000,000; collected, too,
at a time when, as now, the number of unemployed workmen in
each of our principal cities, counted by tens of thousands.
Suddenly, however, the scene changed poverty of the people
producing inability to continue the payment of contributions to the
public treasury. The total revenue fell, in 1821, to $14,000,000,
or little more than a third of what it had been, but five years pre-
viously ; and the Treasury, but recently so rich, was reduced to the
necessity of resorting to loans ; and that, too, in a time of pro-
found peace ! Such, Mr. President, was the result, so far as the
Treasury was concerned, of the first free-trade experiment.
The year 1828 having given us a really protective tariff, the
following were the receipts of the Treasury, in the brief period of
its existence :
Customs. Land. Total.
1829 $22,681,000 , $1,517,000 $21,198,000
1830 21,922,000 2,329,000 24,251,000
1831 24,224,000 3,210,000 27,434,000
1832 28,465,000 2,623,000 31,088,000
1833 29,033,000 8,967,000' 83,000,000
160 LETTERS TO THE
Here, Mr. President, we have a steadiness, and regularity of
movement, worthy of all admiration each successive year gain-
ing: slightly upon its predecessor, and enabling the Treasury to
command the respect and confidence of the world by the gradual
discharge of debts contracted in time of war, and in the dis-
astrous free-trade period, which had so closely followed the return
of peace.
The Compromise Act of 1833 repudiated the idea of protec-
tion the point provided to be reached by it, in 1842, having
l>een that of a strictly revenue tariff, with a rate of duty limited to
20 per cent. As before, land sales became large, and the total
revenue of 1836 exceeded $48,000,000. As before, however, the
apparent prosperity was followed by real adversity the total
receipts of the following years having been as follows :
1837 $18,000,000 1839 $30,000,000
1838 19,000,000 1840 16,000,000
The instability and irregularity exhibited in the period from
1817 to 1822, are here, Mr. President, reproduced the revenue
mounting to 48, and then falling to 18 millions then, again,
going up to 30, to fall to 16; and all this, too, in the short period
of five years 1 Need we be surprised at seeing that, under such a
course of action, the machine was shattered ? Is it wonderful,
that the Treasury so entirely lost the confidence of those who had
money to lend, as to have failed in all its efforts to negotiate a
loan, either abroad or at home, and to have been compelled to
resort to the use of irredeemable paper, as affording the only
means at its command, for maintaining the government in exist-
ence ? To all intents and purposes, it was bankrupt such hav-
ing been the result of the second free-trade experiment.
The bankruptcy of the Treasury having produced another change
of policy, and protection having been re-adopted, we find a resto-
ration of order and regularity in the financial movement, as is
shown in the following figures :
Customs. Land. Total.
1843-4 $26,183,000 $2,059,000 $28,242,000
1844-5 27,528,000 2,077,900 / 29,605,000
1845-6 26,712,000 2,699,090 29,406,000
1846-7 23,747,000 3,328,000 27,075,000
The ^policy being once more changed, and the free -trade
policy re-adopted, we find a repetition of the irregularity ob-
served in both of the former free-trade periods the total revenue
having varied between 30 and 72 millions, and having fallen to a
point so low, as to compel the government, one year since so rich,
to solicit purchasers for the irredeemable paper, to the use of
which it has now been driven. In the absence of demand for its
commodity, it has been compelled to forfeit its engagements for
the payment of money thus committing what, in the case of iudi-
PRESIDENT OF THE UNITED STATES. 161
viduals, would be held to be acts of bankruptcy. Such is the
point, Mr. President, at which we have now arrived, in the third
experiment of a policy based upon the idea that governments are
instituted for the purpose of protecting themselves, and not the
people for whose use they have been created.
What, Mr. President, are the prospects of the Treasury for the
remaining years of this experiment ? That we may be enabled to
answer this question, we must first inquire into the prospects of
the farmers and planters the power to contribute to the public
revenue, being wholly dependent upon the prices obtainable for
the masses of raw produce, that the policy of the central govern-
ment compels us to throw upon foreign markets.
To enable us to predict the future, it is required, that we study
the past. Doing this, we find, that each successive crisis has
established a lower standard of prices for all our products flour
having declined steadily, until from $14, in 1816, it had, at the
opening of the Crimean war, reached the point of $4.24; and
cotton having declined from 25 cents, in 1816, to little more than
6, in the period that followed the crash of 1842. As regards the
first, we have already evidence of the existence of a state of things
nearly correspondent with that of 1852; and yet, the hundreds
of thousands of farms that have recently been created, throughout
the West, have scarcely begun to supply the market. Let them
begin, and let the seasons be propitious, and the prices of their
products are likely to find a point lower than has ever yet been
touched. As regards the second, we have, already, the following
facts : first, the average export-price from 1852 to 1856, was only
9 cents having been lower than that of any free-trade period we
ever yet have known ; second, the present price, with a crop no
larger than that of 1849, is nearly as low as that average ; and,
third, the power to produce cotton, with fair seasons, is now fully
equal to a crop of 4,000,000 bales; or more, by 1,200,000, than
the one that is now in market. Let that power be exercised, as
we see it to have been, in the years that followed the last great
crash, and we shall probably obtain a further confirmation of the
general principle, that each successive financial crisis, conse-
quent upon the adoption of the policy recommended by Brit-
ish economists and manufacturers, establishes an average price,
lower than that which had preceded it. That proving to be
the case, as now appears very probable, it would seem quite
clear, that our power to pay for foreign commodities, with the
proceeds of either food or cotton, must be very small indeed.
As regards the existence of any such power, resulting from the
exports of manufactures, it is needed only that we remark the
facts, that most of our mills are closed that the proprietors are
ruined and that, there is little probability of their soon being
opened. Gold travelling, as it always does, in company with
other raw materials we shall, of course, export ; provided we can
11
162 LETTERS TO THE
find the means to purchase it from Californian owners. Against
that, however, there is a demand, for the payment of interest on
debts contracted in the two free-trade periods, amounting to little
less than $30,000,000 constituting the first mortgage on our
exports.
Our credit having disappeared, we can obtain no more goods
than we can pay for, and that is little likely to equal $200,000,000,
even if it exceed the $180,000,000 of 1850, when the customs
revenue was $46,000,000. Since then, however, all duties having
been reduced, while the free list has been much enlarged, the same
amount of imports would, now, yield little more than $28,000,000.*
Add to this a land revenue of $2,000,000, and we obtain a total
of $30,000,000, as the probable receipts of a government, whoso
expenditures have already reached $70,000,000; and whose ten-
dencies in the direction of increased expenditure are so very
great, as to warrant the assumption, that they will speedily reach
$100,000,000.
These estimates of the amount of imports, and of revenue, differ
widely, Mr. President, from those of the Secretary of the Treasury,
who tells us, that "looking to our probable exports, the great
resources of our country, its unexampled prosperity in many
branches of industry, its capacity to recover from temporary pres-
sure in its trade and business, the opinion is expressed, with some
confidence, that the reduction from this cause will not exceed
twenty-five per centum;" and, that the customs-revenue upon
which we may securely calculate, wUl be $69,500,000.
He who would predict the future, should be able to show that
he had been able to anticipate the past. This, the honorable
Secretary does not undertake to do. On the contrary, he admits,
that the crisis had been "unforeseen;" and all his acts, as legis-
lator, and as executive officer, from the opening of the session of
1856-7, prove that he did not, in the slightest degree, anticipate
the recent changes. Had he done so, he would, certainly, have
opposed the passage of the tariff act of 1857. Had he done so,
he would not, so recently as September last, have purchased at a
large advance, certificates of public debt, the payment for which
so completely exhausted the funds at his command, as to render
it necessary to withdraw from the Mint, all the funds appropri-
ated to its use. Neither would he have had to call upou Con-
gress to give its instant attention to the work of authorizing an
issue of irredeemable paper, as the only means of keeping the
government afloat. All the facts tending, thus, to prove, that
the Secretary could not, in the spring and summer of 1857, predict
* The Secretary of the Treasury estimates the reduction of rates, effected
by the recent tariff law, at 25 per cent. Adding to this the quantity of
goods now freed from the payment of any duty whatsoever, we shall obtain
a reduction of, more than a third.
PRESIDENT OF THE UNITED STATES. 163
the occurrences of the the autumn and winter that were to fol-
low, I beg, Mr. President, to ask desiring, at the same time,
to disclaim the slightest feeling of disrespect for your Cabinet
Minister what reason have we for believing, that the predictions
of December, '57, are to be realized In '58, '59, or '60 ? There
is, as it appears to me, none whatever. They cannot be realized.
The crisis of '57 ought not to have been "unforeseen" its ap-
proach having been heralded by the same phenomena, that had
been observed in 1836. It was not "unforeseen" by those who
had taken the trouble to study these phenomena, and to satisfy
themselves, that like causes always produce like effects. Not only
was it foreseen, but its arrival was publicly predicted ; and in a
manner, too, that should have induced such a study of the facts,
on the part of a finance minister, as would have resulted in satis-
fying himself that the prediction could not fail, and that, too,
speedily, to form a chapter in our financial history.
There being, at present, no reason for believing that our power
to pay for foreign merchandize will be greater than it was some
years since, and our credit having wholly disappeared, there is no
warrant for supposing that the revenue, for the next three years,
can exceed $100,000,000 ; but, there is abundant cause for the
belief, that the expenditures of those years will exceed $250,000,000.
Under such circumstances, there would seem little reason for
doubting that the scenes of 1842 exhibiting a total failure of
confidence in the ability of the Treasury to meet its engagements,
accompanied by an almost exclusive dependence upon the use of
irredeemable government paper are likely soon to be repeated.
How long, Mr. President, can such a system be maintained ?
How long can the government continue to expend eighty millions,
while collecting only thirty ? Is it not clear, that the road we
are now travelling must end in bankruptcy the most complete ?
Will not the conviction that such must inevitably be the case,
force itself upon the money-lenders of Europe, as well as upon
our own ?
We are, however, assured by you, that, the national credit
being high, loans can be effected on "advantageous terms." To
me, the reverse of this would seem to be the case the rate of
interest paid by our Treasury being higher than that paid by any
other community, claiming to be in possession of a regularly or-
ganized and stable government. That rate is the true index to
the confidence existing the man of sober, industrious, and regu-
lar habits, always obtaining the use of money at rates far lower
than those paid by gamblers and speculators, whose treasuriea at
one moment are overflowing, while at the next, they find them-
selves in the usurer's hands. Judging from the fact, that the tri-
vial amount of money which constitutes our present debt, was
obtained only on the condition of paying interest at the rate of
six per cent., our credit cannot be regarded as being very good.
164 LETTERS TO THE
Should it be so, in face of the fact, that we are now again, and
in a time of profound peace, compelled to resort to loans ?
We pay higher interest than any community in the world, claiming
to be held as civilized ; and this we do, in common with all the
countries that follow in the direction indicated by England ex-
porting rude products, and taking pay therefor, in trivial quanti-
ties of the same, returned in the form of finished commodities.
Contrast, I pray you, Mr. President, our financial movements
with those of France, and of all the countries that have followed
her, in adopting the policy indicated by Colbert. Less than six-
teen years since, the representatives of our Treasury were seen,
and that, too, in a time of profound peace, knocking at the doors
of all the bankers of Europe seeking, in vain, to borrow a single
dollar. Now, again, in time of peace, we find ourselves com-
pelled to create a debt, the amount of which is likely, before the
close of your administration, to exceed a hundred millions ; pro-
vided, always, that it should prove possible to borrow that
amount. France and Russia, on the contrary, have just passed
through a war that has required enormous sacrifices of both men
and money ; and yet, neither the one, nor the other, has had
occasion to go beyond its own territory to obtain the supplies
it needed. Shut out, by order of the Allied Powers, from all
the principal money-marts of Europe, Russia maintained her
credit so perfectly, that her five per cent, stocks never, even for a
single moment, fell below the par.
How would it be with us, Mr. President, in case of war,
cut off, as we should be, from all our accustomed sources
for revenue ; with our ports blockaded, and our customs officers
unemployed ; with no demand for the rude products of the soil,
and no demand for land ; with a frontier accessible to the enemy,
almost twice as great as it was, before the government entered
upon its career of centralization, now five-and-twenty years since ?
Could we maintain our stocks at par ? Certainly not ! Abun-
dant evidence would then be furnished of the accuracy of Johnson,
when he declared that "extended empire, like extended gold, ex-
changed solid strength for feeble splendor." Never, at any
period of our national existence, has the central government been
so entirely incapable, as now, of guaranteeing to the people of the
various States, of the Atlantic and the Pacific, the secure enjoy-
ment of the rights of person and property ; and yet, the expen-
ditures of that government are five times greater than they were,
when it first undertook to supersede the local authorities in the
management of the currency.
France, Germany, Sweden, and Russia, and all other countries
that have adopted the protective policy, grow daily stronger,
while we grow daily weaker. Why is it so ? Because, Mr.
President, they appreciate the facts, that the first of all taxes is
that paid to the trader and the transporter ; that those taxes
PRESIDENT OF THE UNITED STATES. 165
take, therefore, precedence of the demands of government ; and
that the power of the latter to obtain revenue grows as the tax
of transportation declines, and declines as that tax grows. Oar
government, on the contrary, closes its eyes to the existence of
those facts.
Consequent upon this, it is, that those governments seek to
promote the power of combination, while ours is incessantly la-
boring to destroy it ; that the one seeks to give value to land, by
facilitating the transfer of its products, while the other rejoices
in the abandonment of land, and the emigration of its people ;
that the one seeks to create demand for all the powers of man,
while the other limits the demand to that brute faculty required
for the rudest cultivation on the one hand, and trade on the
other; that the one would create a rich agriculture, while the
other limits the business of its farmers and planters to the work
of tearing out and selling the soil, and thus robbing the great
treasury of nature ; and, that the one seeks to supersede the trader
and transporter in the government of its people, while the other
labors to enable the trader and transporter to supersede itself.
The strength of all communities, Mr. President, increases in
the ratio of the approximation of the prices of rude produce and
finished products, In France, Germany, Russia, and throughout
Northern and Central Europe, that approximation becomes, from
year to year, more close ; and therefore is it, that serfdom is gra-
dually disappearing, and that those communities grow in strength,
wealth and power. In Turkey, Portugal, India, and Mexico,
those prices are steadily receding, and hence it is, that they all
decline in wealth and strength that so little confidence is felt in
their future that men become less free, from year to year and
that they find it necessary to pay so large an interest, when they
need to borrow money. So, too, is it with ourselves, and hence
it is, that our Treasury pays always so high a rate of interest ;
and, that among those by whom it has been directed, the belief in
the necessity of man's enslavement has been a constantly growing
one. Russia emancipates her serfs, at the moment when we are
agitating the re-opening of the African slave trade !
The more the subject is studied, the more, as I think, must it
become apparent to you, that what we need is, not a reduction
of the local powers, but such a reformation of the action of the
central power, as shall make it harmonize with the ideas of your
most distinguished predecessors.
With great respect,
Your obed't servant,
HKNBT C. CARKT.
Philadelphia, March Ibth, 1858.
166 LETTERS TO THE
LETTER TWENTY-NINTH.
(CONCLUSION.)
OUR public warehouses, Mr. President, are filled with foreign
merchandise, always ready to supply the material of auction sales.
Our auctioneers are constantly at work, supplying the wholesale
and retail dealers, at- prices fixed by themselves. Our shops are
gorged so thoroughly, with foreign food and labor in every form,
from the coarsest woollens to the finest silks, as to leave no place
for the domestic food and labor that seek a market. Such is the
mode of "warfare," by means of which "the most wealthy capi-
talists" of Britain "are enabled to overwhelm all foreign compe-
tition in times of great depression, and thus to clear the way for
the whole trade to step in, when prices revive, and to carry on
a great business, before foreign capital can again accumulate to
such an extent, as to be able to establish a competition in prices
with any chance of success." Such, Mr. President, is the sort
of warfare, by means of which Ireland and India have been ruined,
without the necessity for firing a gun, or drawing a sword. Such
is the warfare against which your fellow-citizens, for ten years
past, have sought, but vainly sought, to be protected the only
answer to their petitions having been, that the duties of the govern-
ment were limited to the task of protecting itself, leaving the peo-
ple to protect themselves as they could.
As a consequence of this it is : that after a growth of pauper-
ism, steadily continued during the last ten years, we find it sud-
denly so much expanded, that hundreds of thousands of our peo-
ple are wholly unable to sell their labor, or to purchase food and
clothing :
That factories, mills, mines, and furnaces, the cost of which has
counted by hundreds of millions of dollars, are now closed, and
likely so to remain :
That the power to diversify the employments of society declines
from day to day :
That, simultaneously therewith, we add to our population a
million of persons annually :
That, the necessity for resorting to the labors of the field, as
affording the only means of support, steadily increases :
That the supply of food tends, therefore, to augment, as the
domestic consumption declines :
That its price tends, therefore, steadily to fall, and is likely now
to be lower than has ever yet been known :
That the farmer, thus deprived of the ability to develop the
powers of his land, is more and more forced to limit himself to
PRESIDENT OF THE UNITED STATES. 167
the work of robbing the earth of its soil, to be sold in distant
markets :
That the competition thus produced, for the sale of food, is
most injurious to the farmers of Continental Europe :
That the latter are thus deprived of the power to purchase cotton,
the price of which, with favorable seasons, is likely to fall to a
lower point than has ever yet been reached :
That the rewards of agricultural labor must, therefore, steadily
decrease, as the necessity -for resorting to the labors of the field
increases :
That with every step in this direction, both farmer and planter
become more entirely dependent upon the mysterious changes of
foreign markets prices rising, or falling, as consequences of acts
over which they can have no control whatsoever :
That under such circumstances, agriculture must become, with
each successive year, more gambling in its character :
That the rewards of productive industry must diminish, as the
temptation to engage in gambling and speculation becomes greater,
from year to year.
That the proportion of the population acting as middlemen, in
the various capacities of trader and transporter, lawyer and poll
tician, office-hunter and office-holder, must continue to increase:
That the taxes of the trader and transporter must steadily aug-
ment, as the powers of the land decline :
That as that taxation grows, the necessity for further dispersion
of the population, with growing necessity for further roads, must
steadily increase :
That, the greater the dependence on roads and ships, the less
must be the power to command the use of efficient ships and roads :
That the dependence of the farmer and the planter upon the
city trader, and that of the country at large upon the bankers of
Europe, must become greater from year to year :
That the power of commanding the services of the precious
metals must steadily diminish : ,
That commerce at home must decline, as the dependence on
foreign markets increases :
That growing dependence upon the trader, and constantly in-
creasing instability in the societary action, must be attended by
constant diminution in the feeling of responsibility, and as con-
stant increase in the (demoralization that, with each successive day,
becomes more clearly manifest :
That the waste of power, now so great, must steadily increase,
with constant decline in the ability to produce the commodities
required for consumption :
That the ability to maintain the local institutions must continue
to diminish, and the necessity for further additions to our terri-
tory must as regularly increase :
That the expenditure of the Federal government must be a con-
168 LETTERS TO THE
stantly augmenting quantity the needs of the Treasury growing
as the powers of the people decline :
That bankruptcy of the state must follow, as a necessary con-
sequence :
That constantly growing discord among the States must ulti-
mately annihilate all confidence in, and all desire for, the main-
tenance of the Union : and
That, with each successive year, it must become more obvious,
that the day is fast approaching, when " the republics of Greece,
Rome, and America, are to stand together among the ruins of the
past."
Such, Mr. President, has been the tendency of affairs, for the
quarter- century that has elapsed, since the Federal government
undertook the management of the currency the only difference
between the picture here presented, and that required for presen-
tation of the period from '3*7 to '42, being, that the shades de-
manded by the present, are far deeper than those needed for the
past. Then, centralization had but just begun to show itself. Now,
it is fast becoming universal. Till then, the right of the States
to control their local institutions, had scarcely at all been ques-
tioned. Now, the central power controls the municipal elections,
and menaces with extinction, the local rights. More progress
having been made, in this direction, under your immediate pre-
decessor, than had been made in the preceding five-and-twenty
years, that of each successive year is likely, should our present
policy be maintained, to be greater than that of the five years
through which we last have passed the progress of man, in
whatsoever direction, good or bad, being one of constant acce-
leration.
Why, Mr. President, should such things be ? Why is it, that
when, as you have told us, "the earth has yielded her fruits abun-
dantly, and has bountifully rewarded the labors of the husbandman"
when "our great staples have commanded high prices," and
when we "have possessed all the elements of material wealth in
rich abundance" that our "monetary interests" are in the
"deplorable condition" you have so well described ? "Why is it,
that "in the midst of unsurpassed plenty in all the productions
of agriculture and in all the elements of national wealth, we find
our manufactures suspended, our public works retarded, our
private enterprises of different kinds abandoned, and thousands
of useful laborers thrown out of employment, and reduced to want ?"
Why is it, that "the revenue of the government, which is chiefly
derived from duties on imports from abroad, has been greatly
reduced, whilst the appropriations made by Congress at its last
session for the current fiscal year are very large in amount ?"
Seeking a reply to these questions, we are met, at once, by the
fact, that they are precisely those which were asked in '22 and '42,
,he former free-trade periods ; but directly the reverse of those which
PRESIDENT OF THE UNITED STATES. 169
might have been asked in 1817, in 1835, and in 184T, the closing
years of the three periods in which it had been held, that it was
among the duties of a government to protect its people, and that
when it failed to do so, they would be governed from abroad
the home government being superseded by a foreign one, as is now
so much the case.
Seeking abroad a further answer, we find the people of France
profiting largely by increase in the value of the products of the
land, and of the land itself. Turning towards Denmark and Ger-
many, we find the serfs of the last century to have been replaced
by hundreds of thousands of small proprietors. Looking to
Russia, we are met by decrees, in virtue of which, serfdom has
already ceased throughout a large portion of the empire, and
must speedily cease in all. In all of these, the State becomes
stronger and more self-dependent, from year to year; whereas,
with us, it becomes weaker and more dependent.
Why should there be such differences ? Because, the policy of
all those countries tends towards the promotion of domestic com-
merce, and towards the substitution of the power of the govern-
ment for that of the traders and transporters the former find-
ing its strength increase with the growing wealth and power of
the people, and the latter rejoicing in their poverty and weakness.
We, on the contrary, are gradually, but certainly, transferring the
powers of the government to the hands of those who profit by
trade and transportation, and who, therefore, rejoice in destroying
the power of association and combination. Hence it is, Mr. Pre-
sident, that we, who claim to be the especial friends of freedom,
are constantly seeking the extension of slavery, while the despots
of Europe are as constantly engaged in striking the chains from
their subjects' limbs.
What we need is, the adoption of measures tending towards
limitation of the power of taxation exercised by foreign and
domestic traders and transporters, by which the value of land and
labor is now destroyed. Such was the tendency of the act of
August, 1842, which came into existence when commerce had
almost ceased, when bankruptcy was almost universal, and when
confidence in man, in banks, in States, and in the Federal Treasury,
had nearly perished. Scarcely had it become a law, when com-
merce once more started into life, confidence was restored, and
hope in the future was found taking the place of the despair, that
previously had been so nearly universal. Why was this ? Because
it had for its objects, the diversification of the demands for labor,
the facilitation of combination, the extension of commerce, and
the economizing of human power. It gave us, Mr. President,
that sort of free trade, that, as you have clearly seen, we so greatly
need freedom of intercourse between man and man, town and
town, county and city, State and State. That commerce we now
have not, nor can we have it, while the policy of the Federal
170 LKTTKRS TO THE
government shall continue to be in accordance with the desires of
the people who seek to have raw materials cheap, and finished
commodities dear, and find, in enormous capitals, the most useful
of all the instruments of warfare required for depriving the nations
of the world, of all power for maintaining direct intercourse with
each other.
Restore the act of 1842, Mr. President, and a demand for
labor will arise relieving us of all further necessity for perusing
the shocking accounts of poverty, despair, crime, and death, with
which our journals are now filled. Let it be restored, and mills
and furnaces will at once be re-opened making demand for
labor, food, and raw materials, and checking decline in the prices
of corn and cotton. Let it be restored, and your second Message
will present a picture of prosperity among the people, and strength
in the State, directly the reverse of the exhibit of poverty in the
one, and weakness in the other, offered by your first.
Why can it not be restored ? Because the generally dominant
party failing to see that the sort of free trade we really needed,
was the one you have yourself so well described has, for more
than twenty years, repudiated the ideas of our revolutionary fathers,
and of all our presidents from Washington to Jackson ; and,
having done so, must now repudiate all change. That it may
maintain its consistency, it is required that we continue to pursue
a policy that has been repudiated by all the advancing nations of
Europe, and that has, wherever tried, here or elsewhere, resulted
in bankruptcy and ruin. That it may be maintained, we must
continue to exhaust our land ; we must continue to pay a tax of
transportation, greater than would be required for maintaining
millions of men in arms ; we must continue to waste capital capa-
ble, if properly applied, of more than doubling our productive
power ; we must continue to see our people perish, in default of
power to find purchasers for their labor ; we must continue to see
capital acquire power at the cost of labor; we must continue
and extend, the necessity for seeking public employments ; we must
continue to enlarge our territory, and with it, the necessity for
fleets and armies ; we must continue to augment the power of the
central authorities, at the cost of the local ones ; and finally, we
must proceed onward in a course leading, and that inevitably, to
the downfall of the system established by the men who achieved the
Revolution, and who made the Constitution of 1789.
Those, Mr. President, who advocate further progress in that
direction, can have little idea of the terrific responsibility that
attaches itself to the administration of the affairs of nations.
If it is a crime to take the life of a single man, what must it
be, to subject millions of people to a policy leading inevitably to
poverty, despair, and death? If seduction is a crime, what, Mr.
President, is the criminality of those who, for party purposes, ad-
rocate the maintenance of a system which, by destroying the
PRESIDENT OF THE UNITED STATES. 171
demand for female labor, leaves to tens, even if not hundreds, of
thousands of our women, no choice but that between prostitution
on the one hand, and starvation on the other ?
It is time, that those charged with the administration of our
affairs, should waken to the knowledge, that protection to the people
is, in fact, protection to the government itself. The policy which
transfers to foreign merchants and foreign States, the power of
taxation, must result in bankruptcy of the treasury, ruin of the
people, and downfall of the government. So it has always been,
and so must it ever be.
The rock upon which our ship is likely, Mr. President, to be
wrecked, is that of trading and political centralization the last
a necessary consequence of the first. The more the policy of the
country tends towards augmentation of the tax of transportation,
the more rapid becomes the motion of our ship in the wrong
direction, and the nearer approaches the day of wreck. You, Mr.
President, are our pilot, and if we are to avoid the rocks, it is
for you to change the direction of the helm. If that be not done,
the story of our Union will stand before posterity, as presenting
the most remarkable case of shipwreck recorded in the annals of
the world.
Hoping, that under your pilotage, the course may be changed,
and that the period of your administration may stand upon the
record, as the one in which the policy of fostering domestic com-
merce as the true foundation of an extended intercourse with
foreign nations, had been definitively adopted, I remain, Mr. Pre-
sident, with many apologies for my repeated trespasses upon your
time and attention,
With great respect,
Your obed't servant,
HENRY C. CAREY.
Philadelphia, March 17 th, 1858.
THE END.
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