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 INTRODUCTION. 
 
 THE following chapters upon such economic and social 
 principles as affect the interests of the time, are mainly 
 devoted to a view of free trade and protection in their 
 economic and social aspects ; but such currency, govern- 
 mental, and social principles as naturally presented them- 
 selves to the author's mind as they will to the reader's 
 while holding the subject under consideration have to a 
 certain extent entered into the composition of the work. 
 
 Political Economy as a science has not yet attained to 
 perfection. As regards the principles of that science 
 most prominently treated here, who can say that they are 
 settled questions ? The nations of the world are divided 
 in their practice, and where the truth of the theory of 
 free trade is admitted, its adoption is opposed on the 
 ground of inexpediency. Looking at the subject from a 
 point of view that takes in the world and the nations 
 thereof, regarding the question of free exchange in its 
 international as well as its national bearings, and viewing 
 its effects upon humanity at large in its character of a 
 remedial agent, the author of this work would see it 
 
 1 
 
2 INTRODUCTION. 
 
 raised if possible above the arena, where circumstances 
 have for the time cast the question of its merits. He 
 would wish to see it considered by the candid and intelli- 
 gent of this country, and of the world, in a light stronger 
 and purer than that which burns dimly amid the smoke 
 and din of political strife. Believing that with the 
 progress of intelligence and humanity, it has yet to 
 reach a point elevated above 'the field of combat it has 
 heretofore to some extent occupied, and that its merits 
 will be judged irrespective of party, as they are herein 
 considered, the author has ventured to devote the evenings 
 of a winter month to recording his convictions upon the 
 subject. A belief in the truth of the principles is the 
 sufficient excuse for presenting them to the public. 
 
 If the savans of political economy say there is nothing 
 new advanced here Very well ! this is not professedly 
 an elaborate treatise upon political economy ; it takes but 
 a few steps within the broad circle of that science which 
 embraces all forms of wealth-producing industry, and all 
 shades of value. If those who have not penetrated to 
 the centre of that circle find something new, or a familiar 
 truth put into a shape that seizes their understanding with 
 a noticeable grasp Better. If the young, and those 
 who have not before considered the subject, are taught 
 some of the truths they ought to know, and catch the 
 spirit of the truth that lies in Free Exchange Excel- 
 lently well ! 
 
INTRODUCTION. 3 
 
 This is not designed to be entirely an abstract theore- 
 tical essay ; the principles are combined with their appli- 
 cations, and the effects experience has evolved are re- 
 ferred to as far as the plan of the work will admit ; 
 and, only in their relations and analogies with free trade, 
 are the various branches of the economical science treated. 
 The object has been to popularize the subject, therefore 
 various illustrations have been introduced, and in a dis- 
 cursive style the language has frequently sought to depart 
 from that of dry scientific reasoning. 
 
 Viewed in the lights imparted by economical and social 
 science, and the spirit of humanity, free trade is seen to 
 be true economical policy and an efficient ameliorative 
 agent. 
 
 Believing its power, if universally adopted, more effec- 
 tive as a sound remedy than has been generally supposed, 
 and that many of the theories afloat upon the subject are 
 false in principle, a few pages have been devoted to the 
 consideration of free trade as a remedial agent, and its 
 comparison with other theories. 
 
 It is the custom in many places to listen periodically 
 to certain addresses, and to read certain lengthy brochures 
 treating of the beauties of protection. In these it is the 
 fashion to decry free trade as the especial enemy of the 
 country, and to stigmatize its advocates as demagogues, 
 venal traitors bought up by the loose change of Europe, 
 as hybrids all of knave and fool. From the point of view 
 
4 INTRODUCTION. 
 
 in which he regards the subject the author has felt no 
 bitterness, and found no difficulty in cultivating a more 
 charitable disposition towards the advocates of protection. 
 He believes the great majority of them to be sincere in 
 their opinions. There are two kinds of protectionists. A 
 few there are who hug it for its profits, at the same time 
 believing their interests and the public's to be identical 
 a not uncommon weakness. Besides these, there are a 
 large number who love it solely for the benefits they think 
 it must confer upon their country. 
 
 It has been difficult to prevent this work growing under 
 the writer's hand to a size far beyond the limits originally 
 prescribed for it. But, replete as the subject is with 
 matter for investigation, and notwithstanding the tendency 
 to lead the inquirer into the several branches of the econo- 
 mical and social sciences, he has resisted the temptation 
 in order to keep the matter within a compass that may be 
 reached by all ; knowing that the multiplication of small 
 books throws the subject into the hands of a greater 
 number of readers for consideration ; and that, thanks to 
 the genius of our institutions, the readers are now the 
 masses. 
 
 If there be found repetitions, the author considers him- 
 self absolved from blame for their appearance. So many 
 forms of reasoning in favor of protection, and of objections 
 to free trade, have been advanced, many of them tending 
 to the same end, that in their treatment it has been ne- 
 
INTRODUCTION. 5 
 
 cessary to repeat processes of reasoning which were to 
 determine similar conclusions, though starting from posi- 
 tions apparently different. 
 
 And, as all who are familiar with the subject will 
 understand, the effects wrought by free trade upon all the 
 elements of production ramify so generally throughout the 
 field of political economy as to embrace most of the prin- 
 ciples that constitute the science. Hence, the repetitions 
 attendant upon the tracing of a variety of causes and 
 effects to the fundamental principles, few in number, which 
 govern them, must involve repetitions always accompany- 
 ing the treatment, upon a scale sufficiently large, of 
 economical questions. All the topics broached, directly 
 and incidentally, are not presumed to be exhausted. If 
 what is said prove to be suggestive, a sufficiently extended 
 aim will have been achieved, and the author will be satis- 
 fied, knowing that a few little seeds scattered with the wind 
 often produce much and good fruit. 
 
 The subject of free trade as a social remedial, especial- 
 ly calls for general consideration and agitation at this stage 
 of the progress of humanity this era, that signally 
 seeks to honor the squalid, poverty-stricken laborer, and 
 upon which coming ages will look back as the second 
 manger that cradled the genius of that Humanity born 
 child of the Christianity which eighteen centuries ago 
 drew its first breath among the manger straw of Bethle- 
 hem ! 
 
6 INTRODUCTION. 
 
 In view of a source whence he has derived information 
 embraced herein, it is proper that the author here ac- 
 knowledge, with thanks, his indebtedness to the members 
 of the first Congrds des Economistes of Nations, assembled 
 at Brussels, in 1847, for the pleasure and instruction de- 
 rived from their able discussions during the several sit- 
 tings in which he had the honor of participating in their 
 deliberations. 
 
 NEW YOBK, December , 1848. 
 
I. 
 
 THE QUESTIONS STATED. 
 
 IF we were to inquire what is the great problem of this 
 age, the solving of which is occupying the ablest heads 
 and warmest hearts of Christendom, the ready answer 
 would doubtless be, that it is the improvement of the con- 
 dition of the poorer classes ; that is to say, the more general 
 distribution among them of the products of industry. It 
 would be understood that with this material benefit is con- 
 joined the moral one of a diffused light of intelligence, an 
 element springing from that Sun of Christianity whose 
 rays illume the moral world. Many measures are doubt- 
 less necessary to the realization of so glorious a result. 
 
 Upon application of the principles of the economic 
 science, and by reference to the experience of nations as 
 developed in their practice, it is to be seen if freedom of 
 exchange is adapted to the promotion of the great result, 
 and if restriction operates against its attainment. 
 
 What we first require is abundance of production. That 
 without abundant products the poor must be deprived of 
 any very considerable proportion for their consumption, is 
 evident. It is then necessary to consider first, if unre- 
 stricted exchange promotes abundant production. The 
 advocates of free exchange say it does. But it may be 
 
8 INDUSTRIAL EXCHANGES. 
 
 said that abundant production is not sufficient ; that im- 
 proved distribution of the reward of industry is also 
 necessary. It will be seen that improved distribution is a 
 natural consequence of abundance, and, provided restriction 
 in its various forms of injustice does not interpose, is inevi- 
 table. Here we have the logical statement of the question 
 of amelioration the social view. The error of many, 
 perhaps less true economists than ardent reformers, is that 
 they place abundant production and improved distribution 
 as separate corollaries, distinct results ; and think they 
 must build up the latter system by some theory of social 
 bearing that is miraculously to solve the great problem of 
 the division of labor's reward, the problem to which these 
 theories owe their existence. 
 
 In connexion with the foregoing, it naturally and 
 necessarily falls in the inquirer's way to consider the 
 subject of free exchange in its general effect upon the 
 international relations of all nations ; and in its national 
 effects upon each country distinctly. Both of these ques- 
 tions are inseparably connected and interwoven with the 
 nature of the question, as to the bearing of free exchange 
 socially upon the industrial population of a country in 
 ameliorating their condition ; the loftiest, the noblest end 
 towards which freedom in trade addresses itself. 
 
 Free exchange is freedom of international commerce ; 
 the liberty for an individual of any nation to purchase or 
 sell of or to any individual of any other nation, without the 
 governments of those nations interfering in the exchange. 
 The question is not merely to learn if an import duty of 
 thirty per cent, will augment the price of an article thirty 
 per cent. It is to learn if free trade between two nations 
 is always advantageous to the two. The advocates of 
 
THE QUESTIONS STATED. 9 
 
 free trade say it is so. It is also to know if free trade can 
 be advantageous to one nation and injurious to the other. 
 The opponents of free exchange say it can be. This 
 presents the logical statement of the economic question of 
 the national and international relations of unrestricted 
 exchanges. 
 
 In urging the affirmative to the latter question, op- 
 position is principally kept up on the ground of necessity 
 for protection to home industry, that a nation may produce 
 certain articles within itself instead of purchasing them of 
 foreign nations, and retain the purchase money at home to 
 put into the pockets of its own people, who are thus by 
 the labor that creates all wealth to enrich themselves, in- 
 stead of permitting other countries to grow wealthy by 
 producing those articles the purchasing people must needs 
 consume. To aid their efforts and emphasize their watch- 
 word of encouragement to home industry, those advocates 
 of such protection, thence called protectionists, have an 
 ally in the national amour propre which patriotically 
 jumps in unison with the sound. This specious reasoning, 
 false as it is, deceives even in this enlightened age thou- 
 sands of the patriotic and talented of this and other 
 countries. Therefore tariffs with so high a rate of duties 
 as to protect the home producer, are still maintained. 
 Protect, maintained ! when some one, or some class is 
 protected, it is at a cost, and some one, or some class, 
 maintains the cost. Who is protected, and who pays the 
 cost ? Pertinent questions, which it behoves every man 
 to ask, and of which he should seek the solution in sober 
 earnestness and with candid zeal. 
 
 It will be demonstrated that the protected are a few 
 individual producing capitalists, and that the expense is 
 
 1* 
 
10 INDUSTRIAL EXCHANGES. 
 
 borne by millions of consumers. The abolishing of 
 protection is then the adoption of freedom in trade ; and 
 the abundance which freedom of exchange promotes is 
 advancing the interests of all consumers of commodities, 
 every individual that eats of food and wears of garments ; 
 the few producing capitalists only in accumulated fortunes 
 gaining more by protection than they would by freedom of 
 exchange. Protection displaces wealth, it does not expand 
 and multiply it. Producers not specially protected lose by 
 protection. 
 
 There is a natural value for all products, which is 
 determined by the cost of production, as made up of the 
 profits of capital and the wages of labor, and, to a certain 
 extent, of the rent of land. Any legal impositions which 
 effect an increase of value above this make so much of 
 the value artificial. A rise in the value of certain pro- 
 ducts is always in a ratio with a corresponding depreciation 
 in the value of some other products, because value is a 
 relative thing, and the value of one article is determined 
 by the relative quantity of other articles it will procure. 
 There cannot be a general rise in the value of all com- 
 modities at once, although there may be in the money 
 price. As an offset to the benefit accruing to the pro- 
 ducers of the protected articles, there must be a damage 
 to the producers of all others. 
 
 Restrictive laws, limiting quantity, operate immediately 
 through demand and supply to raise the value. Also, 
 ultimately through enhanced cost of production, the effect 
 of the increased value, they operate to raise the value of 
 the subsequently produced articles. And this ultimate 
 effect, like the immediate, operates inversely upon the 
 producers of all non-protected articles to their injury. 
 
THE QUESTIONS STATED. 11 
 
 The fallacy that has blinded men is the apparently 
 simple truth contained in a theory, that directly to foster 
 special production must promote general abundance, and 
 assist labor. This is plausible, for it seems, at first view, 
 as if abundance being an immediate effect of production, 
 the true principle must be to encourage that cause, to pro- 
 tect the producer, and the result of abundance would be 
 directly and simply attained. 
 
 The advocates of protection have here had a great ad- 
 vantage, as the immediate effect is much more palpable 
 than the ultimate. And all persons would not go beyond 
 the forms and phrases, and seek the elementary facts ; 
 trace back the question upon the path of inquiry, go be- 
 hind this theory of directly fostering the production im- 
 mediately around them, and inquire what policy is truly 
 calculated to promote the general production the world is 
 capable of affording ; and thence seek to know whose be- 
 nefit is to be sought and is achieved by the abundance 
 following upon improved quantity being produced. 
 
 The mass of those favoring protection have been de- 
 ceived by the plausible theory, and it is only necessary 
 that they be made to understand how fallacious is this ap- 
 parently simple truth, in order to effect a change of sen- 
 timent and action. 
 
 Yet so impossible is it to carry out a wrong principle in 
 practice without its contradicting itself, that protectionists, 
 with the inconsistent blindness that pertains to error, 
 have denied themselves in practice, and shifted ground en- 
 tirely by assuming the position, that protection does not 
 increase supply. This they do when they say, remove 
 protection, and we shall be inundated with the foreign 
 
12 INDUSTRIAL EXCHANGES. 
 
 article, and our manufacturers, unable to compete on 
 equal terms with foreign labor, will be prostrated. 
 
 Grant this, and the effect would simply be, that a cer- 
 tain quantity of labor would become free from the channel 
 into which it had been artificially forced, and return to 
 its original natural bias, in which direction it would be 
 employed most profitably. If labor be left to its natural 
 operation, without the imposition of unnatural restrictions, 
 the natural course of production will yield abundance, 
 when cheapness will ensue. But if protected, in accord- 
 ance with the wishes of each of the various producers of 
 iron, cotton, woollen, and other manufactures around the 
 circle of production, the supply is diminished and prices 
 raised. 
 
 Cuba has a hot climate, a necessary element to the 
 growth of pineapples, and produces them, with the aid of 
 this natural advantage, so that they are imported and pro- 
 fitably sold in the New York market for one dollar the 
 dozen. A company of individuals here conceive the idea of 
 entering into the business of producing pineapples. They 
 build extensive hothouses, with a large outlay of capital, 
 in order artificially to obtain from the rays of our northern 
 sun that heat which he furnishes gratuitously in Cuba. Of 
 course the capital invested must yield an interest, or the 
 company cannot sustain itself. In order to make the bu- 
 siness pay, the producers must get five dollars per dozen 
 for their pineapples, and they ask the government to levy 
 a duty of four dollars per dozen on imported pineapples, 
 to protect them in their production. It is done; and pine- 
 apples, that before were to be bought for one dollar per 
 dozen, are not now to be had for less than five. Thou- 
 
THE QUESTIONS STATED. 13 
 
 sands who had previously indulged in the luxury of this 
 delicious fruit are now unable to afford its use. The con- 
 sumption is reduced to a mere fraction of its former 
 amount, and scarcity of the article prevails where before 
 was abundance. 
 
 This is the precise operation of the protective tariff upon 
 all commodities. Substitute coffee and tea for the sup- 
 posed pineapples, and the effect is the same. But how 
 much more painfully would a people feel the effect of the 
 deprivation of these, as they 'have become, necessaries of 
 life ! Such is its daily operation upon the various neces- 
 saries of cloths, hardware, and a thousand articles of daily 
 consumption, imported from abroad and made at home, 
 and sold to the population of consumers at a price en- 
 hanced, though not fourfold as in the supposed case of 
 the pineapples, yet to a greatly advanced cost to them, in 
 proportion as they are now even under a low tariff pro- 
 tected by our 25, 30, 40, and 100 per cent, duties. 
 
 Protection is the hothouse growth freedom of exchange 
 the natural production. 
 
 Both systems have their supporters. 
 
 What is the key to unlock the truth that lies within the 
 science of industry ? Consumption ! 
 
 I B R A K i 
 
II. 
 
 CONSUMPTION. 
 
 THERE are given to man three agents, from the com- 
 bined action of which, all of man's production has birth. 
 These are Land, Capital, and Labor. Land, the natural 
 agent, yields rent; Capital, the acquired agent, yields 
 profit ; and Labor, the active agent, yields wages. 
 
 These three agents of Land, Capital, and Labor, 
 operate in producing three results. These are Produc- 
 tion, Exchange, and Consumption. 
 
 These three, then, are the elements of man's action, 
 and it is always in the medium of these elements 
 that he must develope himself. Of these, one is original, 
 one intermediary, and the third final. There must 
 be cause, action, and result. These three are all ; 
 no other elements exist in keeping up the physical life 
 of man. 
 
 Production is the cause, exchange the action, and 
 consumption the effect, the end, and the object it is what 
 sustains the life of man; and as every effect assumes the 
 nature of a cause, this repropels new effort. 
 
 Man therefore produces in order to consume ; and 
 consumes to his enjoyment and development in due 
 proportion to the extent of the exchanges ; because the 
 
CONSUMPTION. 15 
 
 world has varied natural advantages for furnishing 
 variety of production, ministering to a variety of wants. 
 
 Production, Exchange, Consumption, is the industrial 
 formula. 
 
 Man labors in order to consume. Consumption being 
 the object, it is the interest of the consumer that the 
 economist should study to promote. Production is the 
 means ; if he limits his view to the means, his exertions 
 to its promotion, without looking forward to the end, he 
 may come very far short of a wise action. 
 
 Looking then to the interest of the consumer, what 
 enhances prices to him ? The labor of production, the 
 carriage, the profits of the capital employed, and the duty 
 or tax. These are all equally his antagonists, they all 
 stand in the way of his attaining wealth, education, all 
 enjoyments physical and mental. In proportion as he 
 succeeds in overcoming them, his enjoyments are mul- 
 tiplied ; and therefore man is ever striving against them. 
 
 He strives successfully against the labor of production, 
 the first antagonist named, and he is benefited by his 
 success. Suppose the agriculturists of a country have as 
 yet no other means of tilling the soil than by the spade. 
 After a time, however, the instrument called a plough 
 is invented. With this machine and a horse one man can 
 perform as much labor of cultivation as was before done 
 by four men with the spade. Then the production is more 
 than doubled in proportion to the labor. This antagonist 
 is so far overcome, and whereas before he could only 
 during the season of growing vegetation cultivate the 
 potatoes necessary to his consumption, he can now add a 
 field of corn, and thence he rejoices in the addition of 
 
16 INDUSTRIAL EXCHANGES. 
 
 another dish to his table, an additional necessary of life 
 is brought within his reach. 
 
 The next antagonist to vanquish is the carriage, or 
 transportation. The plough has benefited others as 
 well as himself. A surplus of corn can be spared to be 
 exchanged with an individual of a neighboring country 
 for a coat. This neighbor enjoys advantages peculiar to 
 this fabrication for making coats that our man who enjoys 
 his plough does not, and vice versa of his corn. 
 
 A third individual plies with help of another a two- 
 oared boat that navigates a stream, upon whose banks, 
 though at a distance, both the man of corn and the man of 
 coats live. He goes back and forth, and carries their 
 commodities for each, charging them a certain sum 
 therefor. Soon he invents a sail, and then finds he can 
 perform his voyages without the assistant, the wind doing 
 the propelling, for which he depended previously upon the 
 oars. The cost of carriage, therefore, is reduced to him, 
 and thence after a short time to the men of coats and corn, 
 for if he does not lower his price the owner of another 
 boat, having assumed the sail, enters into competition with 
 him and forces him to the reduction. The man of corn, 
 getting his coats cheaper, can now afford to add a vest. 
 And again he rejoices in the consumer's victory over his 
 natural antagonist. 
 
 The next with which he contends is the profits of the 
 man of coats and the man of boats. With the latter he 
 has already succeeded to the extent of the gain of the 
 sail, and conquered monopoly. His trade with them has 
 increased so largely, with his growing family, that he 
 believes they can afford to labor for smaller profits, and 
 
CONSUMPTION. 17 
 
 will make up in quantity what is reduced in rate. He is 
 convinced of it when others are ready to enter into 
 competition with these, and if it can be done by any one 
 for less, he effects the gain of a reduction, and again 
 rejoices in a victory. 
 
 But another enemy appears upon the field, and he must 
 still contend with opposition. A power holds sovereign 
 sway over the country, and wants a revenue to enable it 
 to protect its subjects. Upon the line of division between 
 the countries of the men of coats and corn, and on the 
 bank of the stream, it builds a fort and plants a battery ; 
 and whenever the man of boats passes with his freight, 
 under penalty of a destructive broadside, he must deposit 
 a sum of money equivalent to one-tenth the value of the 
 commodities. It is added of course to their cost to the 
 man of corn. He likes not taxes, but as he loves his 
 country and is conscious of the protection afforded him by 
 her laws, he pays. But a neighbor has a fancy to make 
 coats, and being unable to do so as cheaply as the original 
 man of coats, he comes to the conclusion that if he can get 
 the sovereign power to force the man of corn to pay one- 
 fourth more than heretofore for his coats, he will then be 
 able to sell of his, as at that enhanced price or one a little 
 lower he can make and sell for a large profit, and thus 
 grow rich off the necessities of the man of corn, who must 
 consume more or less of clothing annually. The sovereign 
 power grants his request, arbitrarily unjust as it may seem 
 and is, and effects the purpose by adding to the duty and 
 exacting a tariff tax more than doubled. The sovereign 
 power is no gainer, however, for the quantity that comes 
 in is much less, and the revenue is perhaps even reduced 
 
18 INDUSTRIAL EXCHANGES. 
 
 in total amount. Commodities diminish instead of growing 
 more abundant, as they had been previously. 
 
 Will the man of corn, the consumer, now cut off from 
 enjoying his full amount of raiment, and obliged to pay an 
 enhanced price for what he uses, succeed in defeating this 
 new and formidable antagonist ? We know not, but we 
 pray for his success, and ask it in the name of Justice. 
 
 The same proceedings in all their steps, all these con- 
 tests, have transpired with the man of coats as well as 
 with the man of corn. A double victory, or a double 
 defeat, is therefore to be achieved. And these men of corn 
 and coats represent each the millions of their kind with 
 which each country is teeming the consuming millions 
 represent consumption. 
 
 We may readily see that it is not the producer, but the 
 consumer, nature seeks to benefit : that upon the latter 
 determine all the beneficial effects of all nature's gifts and 
 of man's labor. We may trace the operation of this law 
 in the illustration furnished by the invention of the sail by 
 the man of boats, who was at first enabled to make greater 
 profits, because of the reduction of labor it effected. This 
 continued so long as he could get the same high price for 
 his transportation. So long he, the producer, was the pro- 
 fited ; but soon competition stepped in to play its part, and he 
 must reduce his prices, and receive payment for his labor 
 only ; from that moment the benefit of the invention began 
 to enure to the men of corn and of coats the consumers. 
 This gift of providence, the river, this result of man's labor 
 and skill, the sail, have subserved their purpose decreed 
 by the Divine Wisdom, and, through the agency of com- 
 petition, they have become the gratuitous enjoyments of 
 
CONSUMPTION. 19 
 
 the consuming numbers, and are not retained for the 
 benefit of a producing class. They have effected cheapness, 
 the certain result of labor and competition. 
 
 But if the agency of competition is excluded from the 
 field of man's action, the result of his labor would not be 
 cheapness, that dissemination of enjoyments among the 
 consuming numbers. 
 
 Ah I this fourth antagonist, what is the part he plays in 
 the great game of labor striving to achieve cheapness ? 
 
 Had the man of boats sought and gained protection in 
 the enactment of a law by the sovereign- power that should 
 lay a heavy tax on all the labor of navigation, attempted 
 to be performed by others who would fain enter into com- 
 petition with him, like to the tax imposed upon the 
 products of the labor of the foreign man of coats to 
 protect the domestic man of coats, there would have been 
 no competition in the transportation, and no consequent 
 gain of cheapness to the men of coats and corn. The 
 rejoicings over that third victory would never have 
 transpired. 
 
 We now see that the business of this fourth antagonist 
 is to keep off competition, and to withhold it from stepping 
 in between production and consumption to benefit the 
 latter. This dire antagonist operates always against the 
 law of Divine Wisdom, counteracting the operation of the 
 law establishing the tendency of all the results of labor to 
 percolate throughout the entire domain of consumption. 
 
 Again we will pray for success, and this time in the 
 name of the Divine Law ! 
 
 All of the antagonists stand in the way of abundance, 
 which, if encouraged, as we have seen, by their defeat, 
 promotes an exchange between countries of their increased 
 
20 INDUSTRIAL EXCHANGES. 
 
 productions, adding new comforts and luxuries. Each 
 country acquires, assumes, with the victory over these 
 antagonists, the advantages the other enjoys through its 
 peculiarity of climate, population, soil, &c., diminished 
 only by the cost of transportation. There is a distribu- 
 tion of the natural advantages possessed by all, and a 
 general equalization, provided always that the last 
 antagonist be subdued as completely as the others ; and to 
 the advantages and disadvantages, the benefits and evils of 
 victory or defeat, in the contest with this enemy of con- 
 sumption, we shall address ourselves. Victory is Free 
 Trade, defeat is Protection. 
 
 What are the gains of victory ? and what the losses of 
 defeat ! 
 
 Meantime we will transport ourselves ta the sandy 
 plains of Egypt. Seeking to behold its mighty works of 
 art, we find the lofty pyramid of Gizeh submerged, its 
 apex only visible above the dark and slimy waters of the 
 overflowing Nile. Soon the receding waters leave exposed 
 to view a constantly enlarging base, receiving their depo- 
 sits, and upon which we see increasing numbers of 
 minute and active insects that thickly people its sides, 
 expanding with each recession of the waters towards the 
 pyramid's broad base. Society is like this pyramid ; the 
 reduction of a tariff brings the commodities on which it 
 has been levied within the^reach of greater numbers of 
 those occupying lower positions on the pyramid, whose 
 numbers, increasing rapidly with the descent, augment 
 consumption in a ratio with the receding waters of the 
 commodity-laden tariff. 
 
III. 
 
 CAPITAL. 
 
 IN order to understand more clearly the value of the 
 objections urged against free trade, it is necessary to 
 review the economical principles immediately governing 
 the action of the three agents of production, so far as they 
 are connected with the operations of free trade. 
 
 The agent Capital induces the production of commodi- 
 ties. It is falsely supposed that to protect a country's 
 manufactures is a means of increasing its capital, of 
 strengthening the productive power of its labor. Capital 
 regulates the amount of labor; there will be no more 
 labor than there is capital to employ, since labor subsists 
 on the capital already produced and accumulated. There- 
 fore there can be no more industrial effort engaged in 
 production than there is capital to supply it with materials, 
 instruments, and support. Yet in disregard of a fact so 
 evident, says Mr. Mill, " it long continued to be believed 
 that laws and governments, without creating capital, 
 could create industry. Not by making the people more 
 laborious, or increasing the efficiency of their labor ; these 
 are objects to which the government can in some degree 
 contribute. But when the people already worked as hard 
 and as skilfully as they could be made to do, it was still 
 
22 INDUSTRIAL EXCHANGES. 
 
 thought that the government, without providing additional 
 funds, could create additional employment. A govern- 
 ment would, by prohibitory laws, put a stop to the im- 
 portation of some commodity, and when by this it had 
 caused the commodity to be produced at home, it would 
 plume itself upon having enriched the country with a new 
 branch of industry, would parade in statistical tables the 
 amount of produce yielded and labor employed in the 
 production, and take credit for the whole of this as a gain 
 to the country, obtained through the prohibitory law. 
 Although this sort of political arithmetic has fallen a 
 little into discredit in England, it still flourishes in the 
 nations of continental Europe!" And I regret to say is 
 a cherished object of governmental policy with a large 
 number of American economists. 
 
 The enlarged product of the joint exertions of labor and 
 capital is devoted to two purposes. A portion, consisting 
 of the accumulations, being added to capital, and the 
 remainder, save what goes to account of rent and taxes, 
 consumed in feeding and clothing labor, providing instru- 
 ments and supplying their wear and tear, furnishing 
 labor with the fuel after Lieber, who considers the food 
 sustaining the body as fuel consumed in keeping up the 
 principle of life which feeds new production. As far 
 as abstinence is practised and the product left uncon- 
 sumed, capital accrues, and though to abstain from the 
 enjoyment is contrary to instinct, yet, being necessary to 
 existence, it will be practised, and capital will continue 
 generally to increase without limitation, the rate of 
 increase being governed by facilities and intellectual 
 progress. 
 
 Perhaps it would be more strictly correct to say that 
 
CONSUMPTION. 
 
 23 
 
 capital is devoted to one sole purpose, consumption. This 
 consumption is of two kinds, productive and unproductive. 
 The first is the food-fuel, that feeds reproduced life ; the 
 last the fuel which is consumed in the flame that leaves 
 naught but smoke and ashes. The first, the accumulated 
 surplusage over the consumption that transpired in the pro- 
 duction obtained, must in turn be consumed next season or 
 soon thereafter, if it is not this ; and therefore these gains 
 of abstinence are short lived, but they leave a progeny en- 
 larged in progressive proportion to their own bulk. Capi- 
 tal, then, is produce devoted, when properly appropriated, 
 to reproducing itself. 
 
 It consists of both the consumable commodities com- 
 posing circulating capital, and of the more permanent 
 improvements, such as railways, canals, fences, machinery, 
 buildings, &c., constituting fixed capital. The employ- 
 ment of industry in production is more especially ad- 
 vanced by the increase of the circulating than of the fixed 
 capital ; nevertheless, the latter does finally add to, and 
 greatly augment industrial action, through enhanced cheap- 
 ness effected by the use of the machinery, improved trans- 
 portation, &c., increasing consumption, and calling for 
 additional industrial effort to meet the growing demands of 
 enlarged consumption. 
 
 In calling for new industrial effort capital is the imme- 
 diate antecedent of industry, but the direction of the effort 
 indicating what shall be produced is determined by the 
 demand of consumption, for whose sake all the joint 
 action of capital and effort is undertaken ; and in turn the 
 existence of this capital is consequent upon that demand 
 opening markets, and thereby inciting production and a 
 saving between the amount of products and of cohsump- 
 
24 INDUSTRIAL EXCHANGES. 
 
 tipn, in order to gain more capital for further profitable 
 employment of labor in producing for the enlarged mar- 
 kets of increasing consumption. 
 
 The employment of industry, therefore, being imme- 
 diately and effectively advanced by the increase of circu- 
 lating capital, it is apparent that whatever facilitates such 
 circulation, and adds to the sum of such capital, is advan- 
 tageous. If there was no exchange of commodities, nor 
 any money, the value of labor would be the same, capital 
 being equal in both cases. But exchange operates to 
 increase capital through the opening of markets stimulating 
 industry to production, and enabling it to act most effectu- 
 ally in consequence of each country producing that it is 
 qualified to produce cheapest, and the increase is a sound 
 and permanent production. The cost of subsistence is 
 lessened, a wider margin is left for accumulation, and 
 capital augments. 
 
 The introduction of a facility of production, a cheapen- 
 ing agent, increases the sum of capital and the sum of 
 profits, the rate remaining as before. The gross sum of 
 wages is increased, which prevents the rate of profits from 
 rising. Labor gains through the sum of exertion it ex- 
 pends bringing an. enlarged sum of wages. Hence the 
 consequence of the increased production afforded by a 
 facility is improved distribution. Certainly all consumers 
 profit, but it seems to be necessary that the rich be per- 
 mitted to add to their luxuries if an equivalent addition of 
 necessaries falls to the lot of the poor. The inducement to 
 accumulate, which increase of means generates, will 
 cause wealth to add to its capital in order to work new 
 mines of production, and this increase of employing capi- 
 tal is for labor's benefit. Consequently the profitable use 
 
CAPITAL. 25 
 
 will tend to add more largely to the necessaries of poverty 
 than the luxuries of wealth. This inducement is also 
 natural to the poorer classes, and when the most urgent 
 wants are supplied there is a certain point beyond which 
 they will begin to accumulate and form capital of their 
 own. 
 
 Consumption produces. It does not follow, therefore, 
 because capital is the immediate cause of production, that 
 it is not consumption to which we should look in seeking 
 for a cause operating to effect increase of wealth and en- 
 joyments for mankind. It is still consumption that holds 
 in its grasp the motive power to industry, and whatever 
 measures of governmental policy, whatever improvements 
 of machinery tend to bring within the reach of larger 
 consuming numbers additional quantities of commodities, 
 are increasing capital and its power to employ industry. 
 The additional commodities are themselves additional 
 wealth for the time, in the hands of the people ; of each 
 article some will consume all, some save a portion, or its 
 equivalent, in some form ; some consume unproductively, 
 and some productively. The greater the- quantity of 
 consumable commodities in their possession, the more of 
 saving must ensue, as well as more of enjoyments in con- 
 suming. 
 
 In the United States, although the spirit of accumulation 
 is active, and capital is increasing, the counter agency of 
 abundant fertile land, relatively large in proportion to the 
 population, furnishing increasing supply of food, without 
 the necessity of employing additional labor upon a given 
 amount of land, keeps nearly even pace with them, and 
 prevents profits and interest from falling to a very low 
 rate. Yet there is a constant approximation towards the 
 
26 INDUSTRIAL EXCHANGES. 
 
 point when excessive population and occupied lands fit for 
 cultivation shall meet, when increased labor must be 
 employed to the acre in order to produce additional returns 
 beyond those obtained at present, which will then be 
 insufficient. The space between the counteracting agencies 
 is narrowing, even in this country, although the great 
 amount of unoccupied land renders the movement imper- 
 ceptible. Whether the point of meeting ever be reached 
 or not, improvements in production, including all natural 
 facilities, should be permitted to lend all their aid to the 
 cause of profits and wages, to keep up the producing and 
 remunerating power of capital relatively to its amount, 
 and in order that the foundations already laid for a high 
 standard of habits and acquirements in the people, may 
 not be impaired. If these be cultivated in equal progres- 
 sion with the approach of the future time of land's absorp- 
 tion by excessive population covering its quantity and 
 capacity, they check its advance to prevent the stationary 
 state not only from being reached, but being neared, until 
 the requirements of all the people shall have become per- 
 manently habituated to a high degree of physical, intel- 
 lectual, and moral acquisition or attainments. 
 
 It appears that capital and labor (which is the growth 
 of population) are, under the progressive operation of the 
 production and consumption which are so materially 
 assisted by improvements in physics, subject in themselves 
 to no limitation ; but so long as land will yield sufficient 
 produce for constantly increasing consumption, these two 
 agents of production will never cease augmenting their 
 forces. 
 

 LIBRARY 
 
 rNlVERSITY OF 
 
 CALIFORNIA., 
 
 IV. 
 
 LAND. 
 
 How does free trade affect land, the natural agent of 
 production ? 
 
 The limit of production falling finally only upon land 
 capital and labor being capable of indefinite extension it 
 is essential that the capacity of land should be assisted in 
 its development, in order that supplies for sustaining in- 
 creasing population may increase in a ratio sufficiently 
 great to advance further, and still further forward, the time 
 when population may have so far attained to a numerical 
 force as to excel the capacity of land for producing food ; 
 in which event a necessary reduction of mouths would 
 ensue through the agency of famine. 
 
 Free trade would assist such development in bringing 
 together the nations, through the incitement of the markets 
 afforded by each to each ; and causing the effectual deve- 
 lopment by each of its own most hidden and distant re- 
 sources, in reclaiming wastes, and improving its methods of 
 cultivation. And not alone, each nation within its own 
 borders ; through the probing effected by commerce, regions 
 remaining otherwise unexplored and undeveloped, would, 
 by other nations, be colonized, reclaimed, and improved. 
 These effects of free trade would operate until, like the 
 
28 INDUSTRIAL EXCHANGES. 
 
 Pays de Waes in Flanders, an originally barren soil, they 
 would become the most productive. 
 
 A gain is achieved in the free introduction of articles of food 
 into other countries than those in which they can be pro- 
 duced, and which can be produced from land in one coun- 
 try and transported to another, cheaper than the articles of 
 food previously cultivated and consumed in the importing 
 country. The demand for the foreign consumption, added 
 to that for domestic, stimulates to enlarged production call- 
 ing for improved cultivation ; and the cheaper article of 
 food soon supplies the place in several countries of a pre- 
 viously used dearer one. In this case land has received 
 a new development, and the period of conjunction between 
 consumption of food and land's capacity for production, 
 supposing it to have been approached, is postponed. We 
 are now witnessing the working of this process in the in- 
 troduction of our Indian corn into Great Britain, where it 
 cannot be grown, and is supplanting, to a certain extent, 
 the use of wheat. 
 
 The improvements in preparing soils, in instruments of 
 husbandry, all of which are advanced by the cheapening 
 of commodities, and of the cost of these implements, &c., 
 effect an increase of development from the land. These, 
 and the improvements in roads and means of getting agri- 
 cultural produce to market, are cheapening processes to 
 which free trade is analogous ; and it is therefore directly 
 instrumental in increasing the production from a given 
 amount of land. A single reference to the chapter on con- 
 sumption, and to the contrary effects of the imposition of 
 the protective duty, and the application of the sail experi- 
 enced by the men of corn and coats, will suffice. 
 
 In effecting a more general division of property, an 
 
LAND. 29 
 
 equalization that cuts down, or rather prevents the growth 
 of the large fortunes and estates that protection fosters, 
 free trade assists in bringing the cultivation of land under 
 the dominion of smaller proprietorships, which effects a 
 greater proportion of production to the labor expended, 
 than is achieved under the larger. 
 
 By the increase, through the introduction of a new 
 facility of production, of the sum of consumable com- 
 modities distributed throughout the community, increasing 
 the totals of capital, profits (though not the rate of profits), 
 and wages, land, capital, and labor all are benefited. But 
 the improvements, so far as they facilitate the production 
 of food, effect a reduction of rent. Upon the whole, the 
 gain lies with only capital and labor, in their capacity of 
 producers with capital in gross, and not in rate, and with 
 labor in both gross sum and rate but all, including land, 
 gain as consumers. Here we have the economical theorem, 
 which is at the root of the confusion of ideas prevalent in 
 this country, upon the subject of free trade. In the 
 United States, the facility of abundant fertile lands 
 operates economically in the same manner as a reduction 
 of the tariff. Both lower rent, the gain of the monopoly 
 of land ownership in the previously cultivated sections. 
 It is probably an apprehension, more or less distinct, of the 
 fact that these are co-operating facilities, leading to the 
 conclusion that the abundance of land (upon which the 
 producing laborer is usually settled as landlord, relieving 
 productions of a call for rent) is sufficient for the food pro- 
 ducing branch of our economical policy, without the addi- 
 tion of the profit of another facility, that causes many, 
 looking around upon our bounteous harvests, to seize upon 
 an assertion that we already produce more food than we 
 
30 INDUSTRIAL EXCHANGES. 
 
 can consume or sell, and use it as an argument against 
 free trade. It is true that we produce more than we can 
 consume ; but the premiss, as far as it denies our ability 
 to sell all we produce, can be disproved. In England, 
 the population increases at the rate of a thousand per day. 
 The production of food progresses very slowly, the in- 
 dustrial development being principally in manufactures. 
 There are no statistics of the amount of food produced, 
 and, therefore, in order to determine what is the increase 
 of the consumption over production, it is necessary to 
 compare the quantities imported with the range of har- 
 vests for series of years, from which may be drawn con- 
 clusions respecting the probable future demand. 
 
 The year 1841 had been immediately preceded in 
 Great Britain by three years of short, and one of barely 
 average crops. In that year the imports of grain were 
 3,258,698 qrs., and 1,275,656 cwt. of flour. The year 
 1848 was preceded by the good crops of 1847, and the 
 imports for the eight months to Sept. 5th, were 3,193,928 
 qrs. of grain, and 643,192 cwt. of flour. As much, and 
 50 per cent, more, is now required for consumption be- 
 yond the production than was required seven years ago, as 
 the difference between the production in a season of short, 
 and in one of abundant crops. In a season of short crops, 
 the demand for consumption was over three millions of 
 quarters more than the production of the country ; now 
 the excess is over four millions. Three millions having 
 been then, in 1841, all that a short crop lacked of meet- 
 ing the demand of consumption, a full crop would have 
 about met the demand, as appears by the fact that the last 
 preceding abundant year of 1836, the importation was 
 about 800,000 qrs. The increase of the demand for con- 
 
LAMD. 31 
 
 sumption over the production for seven years past has 
 therefore been the full amount, less 800,000 qrs., of the 
 importation in 1848, which is about three and a half mil- 
 lions of quarters. This is equal to an average increase 
 of consumption over production of half a million quarters 
 of grain per annum. Upon the past gain of consumption 
 outstripping her production, may be predicated calcula- 
 tions of a future progression of gain, growing out of the 
 increase of population, and the free trade measures, which 
 turn the industry of Great Britain into manufacturing 
 channels much of it in working our raw cotton where 
 there is a wider field for expansion than in agriculture, her 
 limited acres and dense population allowing but little or no 
 margin for additional employment of her abundant capital, 
 and for increased production in that branch of industry. 
 
 The loss of the potatoe as an article of food, which appears 
 to be the probable ultimate result, and the substitution of 
 our corn is to increase the demand upon this country. The 
 price of wheat in 1828 was sixty shillings, with a scarce 
 crop ; in 1847, eighty-three shillings ; the rise following 
 two successive years of failure in the potatoe crop. Indeed, 
 upon the whole, it appears that Great Britain is much 
 further behind the point of feeding her population, by the 
 production of her agriculture, than she was twenty years 
 since ; and that the annually increasing population of 
 England, as it has done for a series of years, will continue 
 to demand an annually increasing supply of imported food. 
 The ignorance, the inefficiency of their labor, and the non- 
 existence of the most superior agricultural improvements, 
 and the incompetency to gain or apply them, must keep the 
 corn exporting countries of Poland, Russia, and Hungary, 
 for centuries to come behind this country, where the pro- 
 
32 INDUSTRIAL EXCHANGES. 
 
 ducers are exempt from rent and taxes, have superior 
 facilities and intelligence, in the ability to furnish the 
 supplies demanded. Our population increases rapidly, 
 as much so as our capital ; and the margin is scarcely wide 
 enough between the growth of capital and that of a con- 
 suming population treading upon its heels, to allow of this 
 country so far developing the resources of its almost 
 boundless fields, as to furnish the supply of food called for 
 by existing demand from abroad, and by the growth of 
 demand ready to respond in terms of acceptance to a 
 vastly enlarging supply. Capital may be aided to keep in 
 advance of population, by the reinforcement of capital from 
 abroad, where, profits tending fast to a minimum interest 
 being, where no risk exists, but three to two per cent. it 
 is ready to emigrate to regions more favorable to its 
 employment. Under no policy can this immigration of 
 the capital necessary to accomplish the development, be 
 favored so properly as under a system of free exchange, 
 which enables both to furnish that which they can produce 
 cheapest, and directly furnishes the exportable article 
 desired abroad, and brings in return the capital, there 
 overflowing the channels of production, to effect the pro- 
 duction of the article here. The importation of such 
 capital is needed here where land is abundant and industry 
 active, and both are calling for the introduction and accu- 
 mulation of capital to develope immense resources. If we 
 do not restrict our importations, and do thereby enlarge our 
 exportations, Great Britain will be forced to send her 
 capital here in order to assist us in growing food for her 
 increasing population, now outstripping each succeeding 
 year by a greater advance, the food producing power of 
 her soil. 
 
LAND. 38 
 
 We may here remark that it is the wrong policy pro- 
 tectionists would adopt ; they seek the inefficient means to 
 keep out the influx of the (by them) much dreaded 
 European pauper population : It is not her people that 
 Great Britain must send us under free trade, but her 
 capital. It is under the restrictive regime that she must 
 export her paupers in order that they may be fed here. 
 Under free trade they will be fed at home by the produce 
 of capital sent here in exchange for our products. 
 
 In the preceding chapter it was said that capital and 
 land, which last agent is here analogous to improvements 
 in production and increased supplies, are in this country 
 approximating to the point of meeting when interest shall 
 be at a minimum, and we recommended the adoption of 
 facilities that have a tendency to postpone the junction 
 with its consequent reduction of profits. Yet in this 
 chapter the introduction of foreign capital is favored, 
 although the effect of an increase of capital is to lower 
 profits. Is there inconsistency in this ? No ; because 
 the capital thus introduced through free trade operates as 
 a facility, as would a discovery in agricultural chemistry 
 that enabled a given amount of land to produce a larger 
 crop. Without increasing population and narrowing the 
 space between food-production and consumption, between 
 population and land, any more rapidly than it would be 
 narrowed without such introduction, it effects more 
 thorough cultivation of occupied lands and profitably 
 occupies new or waste lands, enabling the same popula- 
 tion that would have peopled the country had the capital 
 not been introduced to gather larger profits and live up to 
 an improved standard of comfort. The increase of capital 
 being in a greater ratio than that of population the reduc- 
 
 2* 
 
34 INDUSTRIAL EXCHANGES. 
 
 tion of capital's profits is transferred to account of labor's 
 wages, increasing them as much as profits are lowered. 
 This is the grand desideratum in economic science and in 
 statesmanship. Under these circumstances there is a 
 counteracting force of physical and intellectual improve- 
 ment in operation to prevent the point being attained of, 
 not absorption of all the land by capital and labor em- 
 ployed in making it productive for that is desirable and 
 must for a long time to come be the policy of this country 
 to encourage but of an excess of population demanding 
 subsistence beyond the productive power of the land to 
 support in affluence every member of the community ; or 
 to a point beyond that where increased labor may effect a 
 proportionate increase of production, the proportion that 
 result bears to effort beginning to diminish. The increase 
 of capital is not to be prevented, but encouraged to keep 
 up its growth at a rate relatively faster than the growth of 
 population. It is capital this country wants for develop- 
 ing its resources. It is a population it wants for the same 
 purpose, but composed of a people accustomed through 
 generations to consumption of all necessaries and comforts 
 obtained through the high wages that their relative propor- 
 tion to capital and land has enabled them to exact, and 
 which wages capital has been enabled to pay through the 
 operation of combined natural advantages of fertile lands 
 in abundance and other facilities conjoined to free trade 
 and its markets. 
 
 I said it was desirable that the absorption and cultivation 
 of unoccupied lands should be effected. They should be 
 so, embracing all the varieties of cultivation, including 
 ample reservations for the beautiful as well as what is 
 commonly known as the useful. This does not involve the 
 
LAND. 35 
 
 theory that every foot of land must be brought into corn 
 growing for an overcrowded population to procreate, eat, 
 and die upon. The absorption of all the land by capital 
 and labor, in the sense I use it, does not preclude the 
 existence of forests and parks. It embraces these, to be 
 enjoyed in connexion with the producing fields by a popu- 
 lation not so dense as to require that the lawns be turned 
 into potatoe hills, in order to supply food to prevent the 
 superabundant population dying from starvation. It is not 
 too much to assume that the capabilities of man's enjoy- 
 ment embrace a wider field than is comprised in the animal 
 gratification of his appetites. This earth is not to be 
 devoted solely to the production of men and women, and of 
 food for them to eat. 
 
 Admit that the time is far distant in this country, farther 
 adown the dim vista of futurity than our calculations can 
 penetrate, when the excess of population can exhaust the 
 productive power of the land. And this admission appears 
 consistent with reason, even though we extend it so far as 
 to say that time can never come, inasmuch as the increase 
 of education, and the high standard of comfort always 
 effected by removal of the pressure of poverty, will (the 
 foundation being already laid in our institutions and abun- 
 dant land) prevent that effect, and postpone it indefinitely. 
 Then the measures of free exchange, et id genus omne, will 
 here effect and keep up present processes of the more equal 
 distribution of property and the levelling of classes, the 
 absence of which, with inequality in their stead, is now, 
 probably, rather than any excess of population, the cause 
 of the distress in Great Britain. Whichever theory may 
 be recognised as the true necessity there, that of the Mai- 
 thusian check upon population, or the equal distribution 
 
36 INDUSTRIAL EXCHANGES. 
 
 among classes, the facility of free exchange equally operates 
 to remedy or mitigate existing misery there, and to defer 
 and annihilate approaching misery here. 
 
 The increase of population is at present in the United 
 States a benefit, not an evil. The true economical policy 
 for this country is to keep up the process of distribution 
 that prevents excessive accumulations in few hands ; and 
 to keep the proportion of agricultural population to other 
 from falling below that now existing. 
 
 The inequality just referred to as existing in Great 
 Britain, and which free exchange and kindred measures 
 are to assist our institutions in keeping far distant from 
 this country, is to be estimated from these data. The 
 population increases in England sixteen per cent, in ten 
 years ; eight millions of the people are without any pro- 
 perty, of whom three millions are paupers ; and four-fifths 
 of the property, real and personal, are owned by less than 
 two hundred thousand persons ! 
 
 The two agencies of abundant land and free exchange 
 combine to increase capital, the immediate agent employ- 
 ing labor to minister to consumption, and whose increase, 
 like a high standard of comfort, is a necessary . means of 
 keeping up wages. Free exchange adds to the aggregate 
 amount of capital, and increases the productiveness of 
 land ; what does it do for labor ? 
 
SIT,:: 
 V. 
 
 LABOR'S LOSS AND GAIN. 
 
 FROM what has preceded respecting consumption, capi- 
 tal, and land, it must be understood that the amount of the 
 fund which is to reward labor, depends upon two condi- 
 tions : the proportion that the production of commodities 
 consumed by laborers, directly or indirectly through ex- 
 change, bears to the effort of labor expended in the pro- 
 duction ; and upon the proportion borne by the production 
 to the consuming population of laborers. 
 
 Protectionists dwell continually upon the specific amount 
 of labor and the nominal price of products, without notic- 
 ing the proportional results of labor and the abundance 
 necessary to supply the wants of man. 
 
 The demand for labor we have seen is increased, and 
 likewise the amount of its remuneration, by freedom of 
 exchange, because in adding to the riches, individual and 
 aggregate, of a nation, it increases the disposable capital ; 
 and this seeking avenues for investment, new methods of 
 employment start up, and improvements are effected that 
 would not otherwise be attempted. All branches of indus- 
 try are enlarged and active, and laborers are in demand 
 and better remunerated. 
 
 Restriction, limiting the quantity of commodities, en- 
 
38 INDUSTRIAL EXCHANGES. 
 
 larges the prices. But these greater prices for the articles 
 produced by the labor of the country though at a superfi- 
 cial view they may seem to do so do not benefit the labor 
 of the country. The community has to pay the amount, 
 and without possessing increased means with which to do 
 so, for there is no more capital in the country ; on the 
 contrary, there is less than there would have been had no 
 restriction existed. Some other branches of labor in the 
 country have to pay the amount going to the protected 
 branches. It is like a man taking a sum of money from 
 one pocket, and putting into another, leaving the individual 
 no richer ; he has not stooped and dug out of the ground a 
 valuable ore, and placed it in both pockets to add to his 
 wealth. 
 
 Protective laws, therefore, create crises, and, instead of 
 increasing the amount of labor, diminish, and, restricting 
 its freedom of directing its exertions, displace it. 
 
 Is it said, that, with less production, the greater the 
 amount of labor required to effect the result, and therefore 
 increased demand for it, and better remuneration to the 
 laboring classes ? This is said ! It is precisely the 
 theory upon which protectionists ground their arguments 
 to foster, as they say, home industry. But how dangerous 
 a reality ! Increasing labor and diminishing result 
 carried out in practice, what would it effect ? The exter- 
 mination of the printing press, that tongue of Progress ; 
 of the use of steam power ; of the electric telegraph, the 
 magician that leads the red levin, once hurled destroyingly 
 to earth, around the globe, the swift trained messenger of 
 man, obedient to his will, to breathe in antipodal ears, 
 while yet the lips that syllabled the sounds are trembling 
 with the emotion that prompts their utterance, the harmonious 
 
LABOR'S LOSS AND GAIN. 39 
 
 music of affection's greetings. Carried to the extremity of 
 practice, where would it end ? In the result of total non- 
 production ! It is the practical business of life to remove 
 difficulties, not to raise up windmills for Quixotic combat 
 to waste labor upon. This theory supposes labor to be 
 the end of human effort, whereas it is only the means. 
 The end is property, riches, an improved condition of 
 existence. As the eye is kept steadily fixed upon the end 
 of a bettered condition, in the daily toil of life, it is neces- 
 sary to keep it there in the theoretical speculations, or 
 rather the scientific researches after a system that is 
 wanted for the sole purpose of attaining that end. 
 
 We will apply the economic formula to the effects of 
 free trade and protection upon labor. 
 
 Land, capital, and labor are permanently associated for 
 attaining the result, and for dividing between themselves 
 the profits of their joint employment. Finally, we must 
 come to this settling of the account. There is no fourth 
 estate to share a profit or suffer a loss. 
 
 How does protection affect these agents of production ? 
 
 Population is increasing, causing an increased consump- 
 tion of food. An increased demand for agricultural pro- 
 ducts inevitably causes a rise of rent, supposing no 
 increased facilities for production whether the facilities 
 be improved implements, roads, or free exchange. To 
 substantiate the above position, here is the rationale : New 
 land, either of an inferior quality, or at a greater distance, 
 must be brought under cultivation to furnish the required 
 supply. It costs more to produce and supply a given 
 amount of food from this new, than it did from the old, 
 land. Agricultural products will take the price that 
 it costs to produce them under the least advantageous 
 
40 INDUSTRIAL EXCHANGES. 
 
 circumstances, on the poorer or more distant land. The 
 old land has the gain of the difference in cost of produc- 
 tion, and this difference goes to increase its value, and is 
 the rent of the old land. 
 
 Therefore, as to the land, protection, in increasing the 
 price of the commodities imported and home produced, 
 raises rents in favor of those who have appropriated this 
 agent of production; rent being the effect of a monopoly. 
 Adam Smith says, " high or low rent is the effect of high 
 or low price." 
 
 As to capital, it is cosmopolitan ; and, if its rate of 
 profits is forced towards a minimum by the operation of 
 the laws of one country, it has a tendency to seek another 
 where the rate is higher. Its rate of profit is measured by 
 its relative abundance, and its sum is less under the 
 regime of protection ; facilities increase its amount, but not 
 the per centage of its profits. Our manufacturing capi- 
 talists are well acquainted with this principle, and hence 
 they seek protection for the particular branch of industry 
 in which they have invested their capital. 
 
 When population and capital are, on the whole, increas- 
 ing, as they are known to be, if the facilities of production 
 are at a stand, or diminishing, rent, we have seen, is bene- 
 fited. The cost of production is increased. It must fall 
 upon either capital or labor ; which will succumb ?, We 
 must now consider, that though capital is generally 
 increasing with population, yet whatever tends to diminish 
 facilities for .production checks the growth of capital in a 
 direct ratio with the increased cost of production. As 
 between capital and labor, the condition of affairs, caused 
 by removal of a facility, then is capital diminishing in 
 quantity, and labor increasing in quantity, with growth of 
 
LABOR'S LOSS AND GAIN. 41 
 
 popujation. By the law of supply and demand, capital^ 
 rate of profits must increase, and labor's diminish. Labor 
 seeks capital, asking for employment ; capital is not 
 seeking labor to offer it employment. Labor must suc- 
 cumb. Capital sustains its profits by diminishing wages ; 
 and thus the increase in the cost of production is cast upon 
 labor. The facility-destroying protection has a double 
 action. In diminishing capital, and thereby lessening the 
 demand for labor, it reduces the amount of employment ; 
 and, in raising the cost of production, it diminishes the 
 quantity of commodities, and raises prices. Labor has to 
 consume less and pay more for what it does consume, 
 suffering a double loss. 
 
 Whatever proposition we assume, its demonstration 
 shows us that labor suffers the loss in the result of pro- 
 duction. The increase in the cost of labor is borne by 
 labor itself. It can only be labor, since the rate of 
 profits of capital and rent of land are determined by the 
 proportion between the result of labor's efforts, production, 
 and the amount it subtracts therefrom for its subsistence ; 
 and this amount, under restricted facilities, must diminish 
 per caput in an inverse ratio with the increase of popula- 
 tion, and the debasement of ignorance. Rent rises with 
 the price of food, and profits with the demand of labor for 
 employment, corresponding to an equivalent reduction of 
 wages. The condition of the densely-populated countries 
 of Europe attests the fact. 
 
 The gain of land in rent, nor the gain of capital in an 
 increased rate of profits, is not what consumption requires ; 
 but the gain of labor in increased wages. 
 
 Labor, the sole loser, cannot be protected directly. 
 Foreign workmen cannot be excluded from the country. 
 
42 INDUSTRIAL EXCHANGES. 
 
 Hands, as the contractors of labor technically call work- 
 ing men, will be manufactured abroad, and will be im- 
 ported on living bodies. The importation of laborers must 
 lower the wages of the workmen, and the manufacturers 
 will profit by the partial operation of tariffs. The product 
 only of the home labor is then protected, and not the pro- 
 ducer, the laborer. Is not the protective system charge- 
 able with materialism ? 
 
 Protection is indeed unequal in its effects, and will con- 
 tinue to be until it excludes all things living and dead, 
 organic and inorganic, and protects alike the professions, 
 the trades, &c., &c. Until, in short, it does what provi- 
 dence has designed never shall be done shuts up each 
 people within a triple Chinese wall, to suffer a living 
 death. 
 
 It is to be observed, that protective tariffs are formed to 
 operate against the working man, and in favor of ma- 
 chinery. In tariffs generally, the protective duty is rela- 
 tively heaviest upon those articles manufactured by ma- 
 chinery, whilst on those made by manual labor it is com- 
 paratively light. 
 
 Even though labor's hard fortune reduces its fate to 
 coming off third best in the industrial contest, a discrimi- 
 nation is thus brought to bear, as if to prove that beneath 
 the " lowest deep" there lies a " lower still," into which 
 all-grasping Capital would thrust, for greater security 
 against its uprising to assert its rights, this much oppressed 
 third element of labor. 
 
 In deranging the distribution of the products of industry, 
 protection causes injurious effects, where benefits would 
 otherwise occur. The two divisions of labor, manual and 
 machine, are prevented producing the results of which 
 
LABOR'S LOSS AND GAIN. 43 
 
 they are capable. An ingenious fable of Goethe runs in 
 this wise : that a poor workman, obliged incessantly to 
 carry the water he used in his occupation of whitener 
 from a brook at some distance, becoming impatient of the 
 labor, one day suddenly threw away the wooden yoke 
 which sustained suspended from his shoulders the buckets 
 with which he drew the water, at the same time exclaim- 
 ing, " Miserable that I am, not to be able to make others 
 work for me, while I take my ease !" 
 
 The yoke in falling broke into two pieces, and each, 
 seizing a bucket, ran with it to the stream. The buckets 
 filled of themselves, and thence running to the cottage of 
 the workman, emptied their contents therein. At first the 
 man was very happy thus to be spared his labor. But the 
 two buckets continued to go and come without ceasing, 
 and ran thus to the stream and back emptying the water 
 into his abode until it was nearly submerged. Why 1 
 Because the man did not know the magical word which 
 could arrest the enchanted buckets in their career, and 
 would enable him to derive from their labor all the advan- 
 tages of its production without being subjected 'to the at- 
 tendant disadvantages. 
 
 The two buckets have been likened to manual labor and 
 machinery ; the powerful word which can conjure the 
 danger, and which assures to the world the benefits of the 
 action of both, is free exchange between all countries, 
 enabling these agents to operate as freely as they do in the 
 exchange of labor and products between the several indi- 
 viduals of a community, and assisting them to equalize the 
 distribution of the results of labor. 
 
 In considering the effect of restriction upon labor it falls 
 in our way to notice a cause which produces like effects. 
 
44 INDUSTRIAL EXCHANGES. 
 
 They are analogous, because both waste labor unpro- 
 ductively ; favoring only partial consumption they diminish 
 the quantity of those commodities entering into general 
 consumption ; both effect rarity, scarcity, dearness, in 
 opposition to common abundance and cheapness. A false 
 view of political economy has supposed that the extrava- 
 gant luxury of the rich benefits labor so far, that without 
 such expenditure it would not find the employment it re- 
 ceives in ministering to the luxury. This should be taken 
 with qualifications. The investment it furnishes for capital 
 and the consequent employment does doubtless benefit 
 labor. When an individual invests a thousand dollars in a 
 brooch or bracelet, not for personal use and ornament, that 
 sum is not locked up from productive employment, and is 
 not unproductive capital, so long as it represents a value, 
 and like coin is employed by the owner in purchasing 
 labor or commodities that are put to productive use. But 
 when it is held as a permanent investment, or for wear, the 
 thousand dollars are sunk from profitable and productive 
 use. The benefit derived from employing capital in pro- 
 ducing what is consumed in unproductive uses is limited, 
 and another kind of employment might extend and make it 
 general. The capital so employed must be withdrawn 
 from occupation in those channels that would furnish matter 
 for labor's consumption. This portion of capital is devoted 
 solely to gratifying the tastes of a few in the possession of 
 those things the many cannot procure. If withdrawn from 
 the purpose to which it is applied it would needs be em- 
 ployed in the other, and with the ministration to the 
 wants of labor the effectiveness of labor would be enhanced. 
 At this stage of the argument we may have cast in our 
 teeth all the quackery afloat concerning the fine arts, the 
 
LABOR'S LOSS AND GAIN. 45 
 
 cultivation of a refined taste, &c. It may be alleged 
 that the theory acknowledging only the existence of the 
 vulgar useful as above presented tends to destroy all of this 
 that should be cherished as consistent with and inseparable 
 from the progress of intelligence. But it should be re- 
 membered, that there is a wide difference between the 
 love of the truly beautiful, between an appreciation of the 
 moral beauty springing from the Divine aesthetics and that 
 love of splendor which joys in the possession of an object 
 of show because it marks a distinction between the 
 possessor and those who cannot possess it. This is a sen- 
 timent that appropriates to itself the proceeds of labor, 
 giving through its limited and partial consumption a direc- 
 tion to the employment of capital that ensures the produc- 
 tion of such commodities as the labor which by its hard 
 exertions actually produces them cannot afford to enjoy. 
 In the satin and velvet manufactories of France the artisan, 
 whose sweat and skill turn out to view the gay and costly 
 article, cannot wear it, nor can he even wear shoes, nor 
 eat of meat. 
 
 Supposing a community of one hundred persons to re- 
 present a country, and that twenty hold the capital of the 
 community in their possession. Ten of them hold half of 
 it in land, and ten in money, devoting it to the production 
 of articles of luxury and necessity in the proportion of ten 
 dollars value of the former to one of the latter. The latter 
 go principally to the consumption of the eighty, without 
 capital, who labor in the production ; the former are 
 in part sold to the wealthy, who pay in their rental, and 
 are consumed among the twenty land and money capital- 
 ists. This is in general terms much the present condition 
 of society. If the wealthy were to diminish their consump- 
 
46 INDUSTRIAL EXCHANGES. 
 
 tion of luxuries, capital would still retain its ever-urging 
 necessity for employment, and. the proportion of necessaries 
 produced would be increased. Capital would transubstan- 
 tiate itself from commodities unproductively to those pro- 
 ductively consumable. Although, in consequence of the 
 twenty consuming less of luxuries, the manufacturing tea 
 would not supply themselves and the other ten with so 
 many of these, capital would not diminish, as it would pro- 
 duce for the consumption of the eighty at a rate that 
 eventually, gorging the capacity of all for consuming arti- 
 cles of necessity and convenience, would furnish the entire 
 hundred with luxuries. The eighty would pay at first 
 with their labor commanding increasing wages ; and after- 
 wards, as with the progress of cheapness they accumulated 
 capital, would pay with their incomes of joint wages and 
 profits. The incomes of the landed ten not expended as at 
 first, in luxuries, would in the meantime have contributed 
 to swell the productive investments, and hasten the progress 
 of the rise from general consumption of necessaries, to a 
 general consumption of luxuries. 
 
 Extending the hypothesis over the broad field of the 
 world's production, suppose in consequence of an entire 
 resignation of demand on the part of the rich, all the capital 
 now invested in producing velvets, satins, champagne, and 
 jewelry, were diverted from those purposes to the produc- 
 tion of breadstufFs, and of such clothing material as would 
 be adapted to use rather than ornament. The wealthy 
 would not enjoy their satins, champagne, and jewels, but 
 bread, cottons, woollens, &c., would cheapen until they were 
 brought within the reach of all who needed them. And 
 then what would occur ? If no restrictive laws existed, 
 the capital that could not find use in producing these, 
 
LABOR'S LOSS AND GAIN. 47 
 
 would flow into other channels, and from these necessaries 
 extend to comforts, and thence to luxuries, as stated in the 
 supposed case of the hundred. 
 
 It is unsound political economy, because it is not econo- 
 my either collective or individual, but extravagant waste- 
 fulness for capital to employ itself in producing for the un- 
 productive consumption of wealth, the costly and the rare, 
 that are not consumed in a process of reproduction for the 
 general use. And it continues to be wasteful as long as 
 the condition of labor is one wanting the necessaries of life, 
 in consequence of there being not enough of cheapness 
 wrought by capital's employment. Yet mankind will 
 always covet and enjoy luxuries, as under proper circum- 
 stances of general participation they should do. Practi- 
 cally it only remains by those equalizing measures that 
 entrench not upon individual right to acquire and enjoy ; 
 and by promoting education, freedom of exchange, and all 
 the cheapening processes whose tendency is to bring first 
 the necessaries, and finally the luxuries, to be shared by 
 greater numbers of consumers, to promote general distribu- 
 tion, and thus improve the direction and effect of produc- 
 tion. An attention that is never directed from the end ot 
 general consumption will prove to be the clue wherewith 
 successfully to thread the labyrinth of economic policy. 
 
VI. 
 
 WAGES NOT DIMINISHED WITH PRICES. 
 
 IT is said, that if free exchange should achieve the end of 
 increased supplies for subsistence, wages would diminish 
 correlatively, because wages regulate themselves by the 
 cost of subsistence. 
 
 This is an error. In the absence of all restriction, if 
 commodities are produced they will not be destroyed, but 
 consumed. They cannot be retained in the possession of 
 capitalists ; these must pass them along to the poorer con- 
 sumers, who will have more to consume. I once heard it 
 stated by a French gentleman, whose ability and veracity 
 are alike indisputable, that " there occurred not long since 
 in France an enormous rise in breadstuff's, and a depression 
 of wages. A large manufacturer said he had been obliged 
 to lower the wages of his workmen because the manufac- 
 tures could not find a market; that the production not 
 meeting with consumption, he preferred diminishing wages 
 to stopping the works entirely, and casting the operatives 
 out of employment." Not meeting with consumption ; 
 because the cost of living was so much enhanced, the 
 consumers generally could not afford to indulge to the 
 same extent as before in the manufactured articles. Here 
 the application of the key of consumption solves the prob- 
 
WAGES NOT DIMINISHED WITH PRICES. 49 
 
 lem of the correlative effects of subsistence and wages upon 
 each other. 
 
 Wages are determined by the proportion of production, 
 i. e. of capital, to the population of laborers. They are 
 high, if the capital to be employed in contracting for labor 
 is great in proportion to the population ; for capital is ever 
 seeking to be used, and in its use employs labor. Under 
 the dominion of favoring circumstances enlarging the pro- 
 portion of production to the effort expended, this capital is 
 greater in due proportion to the increased variety and quan- 
 tity of commodities brought within the general consuming 
 power of the population ; increases with the enjoyments 
 and savings. Therefore, under a natural condition of things, 
 the more capital the greater will be the amount of wages. 
 It is true that we see the highest wages in new countries, 
 and lowest in those older, where the sum of capital is much 
 larger than in the new. This is because the new regions 
 possess those advantages of abundant land and sparse 
 population that are natural to them, and which cannot be 
 wrenched from their labor by political or capital power, 
 and produce from the land an amount of the necessaries of 
 life larger in proportion to the population. On the other hand, 
 in older countries, those two advantages being absent, the 
 two powers named have usually profited by it, and worked 
 their unrestrained will. The economic principle that the 
 greater the capital, the higher the wages, would always be 
 seen to hold its legitimate dominion, did not antagonistic 
 causes of ignorance, excessive population, and practical 
 inequalities, both industrial and social, operate to coun- 
 teract the proper action of the law of economic science, 
 that the greater the capital consumable by labor^at large, 
 the greater the fund from which to remunerate labor, 
 
 3 
 
50 INDUSTRIAL EXCHANGES. 
 
 The fund exists, and it is that from which wages should 
 be paid, and from which they would be, did not the cause 
 named operate to divert the appropriation of much of the 
 fund from the channel of wages, from labor consuming 
 production. 
 
 When the advocates of protection shall convince me 
 that the economic principle just stated is not scientific but 
 false, and that freedom of exchange is not a cheapening 
 facility and an advantage analogous to those named, I will 
 heartily concur with them in their efforts to put down free 
 trade. The remuneration of producers depends not upon 
 how much money, but upon how much of consuma- 
 ble articles they obtain ; because labor, in produc- 
 ing, consumes the accumulations of savings from 
 previous production. If the cost of these has been 
 low, the expense of maintaining labor borne by its employ- 
 er, capital, is low. (I leave aside the question of rent as 
 unnecessary, and not affecting the argument.) Also if 
 the production effected is large, the cost to capital is low. 
 There remains besides these only the share of the produc- 
 tion going to labor, the wages, to complete the cost of labor 
 to capital. The two first being low, it is apparent that 
 the latter, wages, may be high, and still capital obtain a 
 fair profit. Abundance of commodities, of production, is, 
 therefore, not inconsistent with high wages. In other 
 words, wages will not fall because the cost of living is 
 cheapened. The reverse may be the case, as we see in 
 England wages low and subsistence high. In this country 
 we see wages high and living cheap. The cost of labor is 
 less, as is proved by the higher profits and rate of interest. 
 
 Under an enlarging field of consumption and production 
 spreading over the ground of labor's action ; under the 
 
WAGES NOT DIMINISHED WITH PRICES. 51 
 
 habit of greater consumption and with the wider demand 
 for labor, wages will be retained at a height that will meet 
 a raised standard of their necessities. When all shall 
 have obtained employment, the competition between labor- 
 ers will cease, and the wages will cease to fall. For an 
 indefinite length of time thereafter, however, employing 
 capital, aided by and acting through the development of 
 the useful arts, and the improving agricultural and manu- 
 facturing processes in following up its course of cheapen- 
 ing production may continue to increase the quantities of 
 commodities, and bring ever more of these within the 
 consuming power of the masses, their wages and their 
 consumption augmenting together in a double amelioration. 
 
 Thus wages do not fall with the cost of subsistence, as 
 pretended ; nor do they rise with it. They are regulated 
 by the call of capital, which is, in turn, greater or less in 
 amount with the increase or diminution of commodities ; 
 these are regulated by the demands of consumption, which 
 increase with their gratification because man's wants, by a 
 law of Providence, ever increase with his possessions. 
 Under these circumstances, wages rise. Protection granted 
 to all the various branches of industry around the circle 
 of production would circumscribe it within constantly 
 narrowing limits, would stultify it, and defeat the object of 
 the protection. Therefore, when on the other hand, under 
 the protective regime, the demands of consumption dimi- 
 nish, through diminished power of gratification caused by 
 lessened quantities of commodities produced, there is a 
 less amount of capital seeking use, the field of labor is 
 circumscribed, workmen are forced to seek employment, 
 and wages fall. It is the retrogressive system. 
 
 We have thus again described the industrial circle, and 
 
52 INDUSTRIAL EXCHANGES. 
 
 observed that the ameliorations effected by free exchange 
 are *t\ot transient, but are durable. They are not retro- 
 gressive, nor stationary, but progressive, under the effect 
 of the law above named. 
 
 When protection builds up an interest the compensation 
 of labor is not increased ; existing capital pockets the rise. 
 In reference to the relative positions of labor and capi- 
 tal, and the effect of protection on wages, Mr. Secretary 
 Walker, in his comprehensive language, speaking of the 
 results of investigations made by an expansive genius 
 combined with an indefatigable industry seldom brought to 
 bear upon the science of industry, says : " The wages of 
 labor have not augmented (as claimed then in 1845 by 
 the friends of protection) since the tariff of 1842, and in 
 some cases they have diminished. When the number of 
 factories is not great, the power of the system to regulate 
 the wages of labor is inconsiderable ; but as the profit of 
 capital invested in manufactures is augmented by the pro- 
 tective tariff, there is a corresponding increase of power, 
 until the control of such capital over the wages of labor 
 becomes irresistible. As this power is exercised from 
 time to time, we find it resisted by combinations among 
 the working classes, by turning out for higher wages or 
 for shorter time, by trades-unions, and in some countries, 
 unfortunately, by violence and bloodshed. But the govern- 
 ment, by protective duties, arrays itself on the side of the 
 manufacturing system, and, by thus augmenting its 
 wealth and power, soon terminates in its favor the struggle 
 between man and money between capital and labor. 
 When the tariff of 1842 was enacted, the maximum duty 
 was 20 per cent. By that act the average of duties on 
 the protected articles was more than double. But the 
 
WAGES NOT DIMINISHED WITH PRICES. 53 
 
 wages of labor did not increase in a corresponding ratio, 
 or in any ratio whatever. On the contrary, ^whilst wages 
 in some cases have diminished, the prices of many articles 
 used by the working classes have greatly appreciated." 
 
 Two years elapsed : and in the meantime the high 
 tariff of 1842 was greatly reduced, and, after a year's 
 experience of the effects of the reduction, in December, 
 1847, the same able statesman in his report thus furnishes 
 us with the result : " Whilst all have derived great 
 benefits from the new tariff, it is labor that has realized 
 the largest reward. It was contended by the advocates of 
 protection, that it enhanced the wages of labor, and that 
 low duties would reduce wages here to the rate allowed 
 for what they call the pauper labor of Europe. On the 
 contrary, the opponents of high tariffs insisted that labor, 
 left to seek freely the markets of the world, would find for 
 its products the best prices, and, as a consequence, the 
 highest reward for the labor by which they were produced. 
 The duties have been reduced ; and yet wages have 
 advanced, and are higher now than under any protective 
 tariff. There are many more working men concerned in 
 other pursuits than in manufactures, and with much less 
 of machinery as a substitute for labor ; and by depressing 
 agriculture, commerce, and navigation by restricting 
 their business and the markets for their products the 
 wages of those engaged in such pursuits are reduced ; 
 many workmen also lose employment ; and, competing for 
 work in manufactures, the wages of all are diminished." 
 
VII. 
 
 EDUCATION. 
 
 THOUGH it be at the risk of repetition, we must devote 
 to the subject of education a distinct heading. 
 
 From the principles and deductions that have preceded, 
 it seems that where Population and Capital are advancing 
 more rapidly than agricultural skill and inventions, there 
 rents are rising and profits and wages lowering. In the 
 United States this condition of things is modified by the ex- 
 istence of a superabundance of fertile land, and the enter- 
 prising energy of our people ; these coming to the aid of 
 skill and inventions, counterbalance the force of population 
 and capital, and rents are kept down, whilst profits and 
 wages are sustained at par. The free exchange of indus- 
 try has the same tendency with skill and inventions, and, 
 in the older and more densely populated countries of 
 Europe, would come to their aid as the abundance of land 
 and enterprise do here. Its adoption in these countries may 
 therefore be properly and with scientific correctness 
 regarded as a desideratum beyond all cavil and exceeding 
 our power of valuation ; while in this favored land it must 
 be hailed as the great good to assist materially in raising 
 us to a still more lofty position in the gradation of blessings. 
 
 The effective force of this American enterprise lies not 
 
EDUCATION. 55 
 
 only in the morale, but additional weight is lent to it by 
 the greater proportion of population applying itself to pro- 
 duction. The total population of Europe is estimated at 
 250 millions; of the United States, 23 millions. The 
 standing army, 2,800,000 ; employees of government, 
 2,000,000 ; and idlers, 20,000,000, of Europe, amount to 
 24,800,000 ; and in the United States the army, 13,000 ; 
 employees, 150,000 ; and idlers, 300,000 ; amount in the 
 aggregate to 463,000. One-tenth, therefore, of the 
 European population are idle non-producers, against a 
 proportion of only one forty-fifth in the United States. 
 
 When we look upon this country and those of Europe 
 in the true light that penetrates the sophisms and phrases 
 woven around the subject of free international exchanges, 
 by its opponents, the alarms lest our industry be crushed 
 in a free contest with theirs, are exposed in all their weak- 
 ness to excite our wonder that they are so fondly cherished 
 by those who utter them. The danger seems altogether 
 to lie in the rejection of free trade and kindred measures, 
 not in their adoption. This will be the inevitable de- 
 duction when treating of free trade in connexion with 
 education, which is another ally, more powerful with us 
 than in Europe, co-operating with our broad lands and 
 active enterprise. 
 
 The improvements effected by the industrial arts and all 
 the cheapening processes, furnishing an increased con- 
 sumption for the poorer classes, they become habituated to 
 a degree of intellectual and physical enjoyments above that 
 they before enjoyed, unless where the population is dense 
 and fast encroaching upon the productive capacity of the 
 land ; and those classes, instead of adding to their enjoy- 
 ments, simply increase their families to be fed and clothed 
 
56 INDUSTRIAL EXCHANGES. 
 
 by the old standard. In order, therefore, that a diminution 
 of the cost of living may be permanently beneficial to the 
 people at large, it is essential that the*ir tastes and habits be 
 improved by the process of education developing the 
 intellectual and moral, and increasing the proportion borne 
 by their action in the human being to the corporeal. 
 
 Such increase promoted by education, effects in its pas- 
 sage a succession of triumphs over the instincts of mankind, 
 as the brutal propensities are weakened, and the intellectual 
 strengthened. The instinct of reproduction of the species 
 will with others be brought more under control, and where 
 population is encroaching upon production so far as to 
 reduce wages and the general remuneration of labor, the 
 control that educated mind will exercise over the instinct 
 referred to, like that it exercises over intemperance, acting 
 to check the growth of population, will arrest the downward 
 tendency of labor's condition. 
 
 If education be not conferred, then the improvement 
 afforded by the facility would be temporary or trifling ; the 
 proportion of population to production increasing, the price 
 of food would be higher, that is to say, the cost of its pro- 
 duction would be raised. Wages would in effect be 
 brought back to the old rate ; labor would sustain the rise 
 in the cost of production, where it would be thrown by 
 capital, which would profit in proportion. Causes are 
 then to be seen producing their legitimate effects, as they 
 may be observed in many European countries, where a 
 dense laboring population, poorly fed and clad, and steeped 
 in ignorance, are seen on the one hand, and domineering 
 capital upon the other. 
 
 We see that Free Exchange and Education are 
 measures of a kindred nature, and that a co-operation is. 
 
EDUCATION. 57 
 
 necessary in order to ensure permanence to the beneficial 
 results. Free Exchange is an effective initiatory step, as 
 it gives first to the poorer classes the opportunity to raise 
 their standard of comfort, and the means with which to 
 act, and prepares the way for education to step in and 
 keep it there. 
 
 These are the principles and their tendencies taken in 
 the abstract. Of course it is not assumed that in this 
 country we could not practically enjoy the blessing of 
 general education without first adopting entire free trade. 
 Experience has taught us that we can ; because kindred 
 institutions have given us an impetus upon the right path, 
 yielding great results. But the principles are not the less 
 valuable. Under the most favorable circumstances, their 
 adoption heightens beneficial effects, whilst, on the other 
 hand, to neglect them diminishes the force of those effects. 
 And there is for this country a future for which the 
 present is but a preparation. The governmental and 
 economic sciences have yet to reveal many principles and 
 much practice. Were it not the case that our territory is 
 so extensive in proportion to our population that the 
 poorest land brought into cultivation and determining the 
 rate of rent is very productive, causing low rents, so low 
 as to be merely nominal, and high wages of labor ; while 
 the cost of labor under large and facile production, being 
 low, capital gathers good profits without the necessity of 
 bearing hard upon labor through a reduction of wages ; 
 were not such the condition of things in this country, the 
 favored recipient of blessings, a few years of high 
 protective and restrictive regime would tell weightily 
 even upon education. Under all the favorable circum- 
 stances above enumerated such a regime could not fail to 
 
 3* 
 
58 INDUSTRIAL EXCHANGES. 
 
 have its effect, that would doubtless be perceptible were 
 there a proper statistical society, so much needed, organ- 
 ized in this country, to show us, among other things, the 
 necessary educational facts. 
 
 If any country can sustain itself under this sapping 
 regime of protection, unquestionably it is this. But it is 
 not for us, tempting Providence to play lightly with our 
 blessings. Theories may be put in practice and principles 
 may be applied, whose effects will neutralize much that is 
 of inestimable value in our institutions. Measures in 
 strict accordance with the scientific principles of a true 
 political economy are necessary to the retention of those 
 blessings. 
 
 Independent of the danger from over population, the 
 legitimate effect of education is such as to hold the 
 standard of requirements at a height that will insure an 
 adequate reward of compensation to labor ; one that will 
 place it in a position to make favorable terms with capital 
 for a rate of remuneration above what would be claimed, 
 and therefore, securing higher wages than would be 
 demanded by a labor steeped in squalid poverty and 
 ignorance. Then if the Malthusian theory of the evils 
 resulting from over population be set aside as inapplicable 
 to the circumstances present and prospective of the United 
 States, if there will be no population pressing upon land 
 and its capacity of production, there will be no excess of 
 population to interfere, and prevent labor from reaping its 
 full benefit of the improving processes of education, free 
 trade, and kindred agencies. 
 
 . When we consider the agencies borne by labor and 
 land in production, in providing for the increasing wants 
 of increasing numbers placed upon the earth to improve 
 
EDUCATION. 59 
 
 it and themselves we are struck with the importance of 
 education and agriculture. Whatever enables the laborer 
 to produce more from the land, and whatever promotes his 
 power for a rational enjoyment of the product, present 
 themselves as desiderata, that claim our most strenuous 
 efforts. Every thinking being must feel sensible of the 
 nobleness of a pursuit which tends in any degree, however 
 small, to advance education, the mental and moral 
 improvement of the laborer; or to promote the increase 
 in quantity and quality of agricultural productions, the 
 basis of all enjoyments. 
 
 The efficiency imparted to the humblest departments of 
 industry by educated intelligence is apparent to every 
 observer. The emigrant who lands upon our shores and 
 enters the family of a citizen in the capacity of maid of 
 all work, rich in brawn, brogue, and blunders, but poor in 
 education or mental development, furnishes a common 
 illustration of the gain labor would derive from education. 
 The careful, educated housewife, who has occasion a 
 dozen times a day to deplore the neglect of Biddy's not 
 having employed a little, but a little, exercise of brain, to 
 the saving of a deal of exercise of heels, exhibits in her 
 own methodizing, systematic course the advantages of 
 combining thought, educated and improved, with the 
 manual labors of the day. She is always ready to affirm 
 and able to prove that, if the help's mind had co-operated 
 promptly with her hands, one half her own labor would 
 be spared which she could then devote to the making of 
 the children's dresses, that she now must send out to the 
 sempstress ; in short, the labor could be done by two that 
 occupied nearly all the time of three, effecting a desirable 
 economy of labor and money. 
 
60 INDUSTRIAL EXCHANGES. 
 
 Statistics show us that but forty out of every hundred 
 persons in England can write their names ; also, that one 
 hundred and ninety-nine of every two hundred in 
 Massachusetts can write. 
 
 We here see the comparative results of free education, 
 as it prevails in New, and restricted education, as it has 
 existed in Old England. 
 
UNIVERSITY OF 
 
 <; \UFORS1- 
 
 VIII. 
 
 PAUPER LABOR TRIBUTE INDUSTRIAL 
 PROFICIENCY. 
 
 HYPOTHETICAL examples, involving definite applications 
 of the principles premised in the preceding chapters, to the 
 circumstances of the country, will best serve to test the 
 truth of those principles, while the several objections urged 
 here and abroad, against freedom of international exchan- 
 ges, are being considered. 
 
 Advocates of protection assert that the United States 
 cannot successfully practise unrestricted international ex- 
 changes, because it is younger and has less capital and 
 force of labor wherewith to contend against the industrial 
 efforts of the old world, and express alarm lest our manu- 
 factures be prostrated by the influx of cheaper productions 
 of foreign pauper labor : as many nations produce the 
 same articles, free exchange would strengthen those older 
 and more proficient, and prevent the growth of our indus- 
 try. Hence, it is claimed that protection is necessary to 
 keep up existing manufactures, and to effect the industrial 
 education of this tyro nation, in order to raise it to an 
 equality with European countries. 
 
 As paupers never labor, the catchword form of expres- 
 sion is too palpable to be overlooked. 
 
62 INDUSTRIAL EXCHANGES. 
 
 Let us see how much of this threatened ruin to existing 
 manufactures would be realized, and in what manner it 
 would operate upon our interests. 
 
 Suppose foreign nations should take off the duty on our 
 tobacco in England, imposed at the enormous rate of 
 about two dollars per pound by a reduction of twenty-five 
 per cent, of the amount per annum, and we should do the 
 same on certain of their productions. I always use the 
 term productions in the generic sense of the result of labor, 
 whether manufacturing or agricultural. The consequen- 
 ces of such a reduction would be a large increase of our 
 tobacco exports, and an enlarged increase of corresponding 
 value in imports of their productions. 
 
 Where would the increase of importation fall ? 
 
 Not upon those articles in which we can now nearly 
 compete with them on equal terms, for the competition 
 would have the effect of perfecting our production of those 
 articles to a point of quality and cheapness equal with 
 theirs. 
 
 The increase would attach itself to those articles in 
 which we are greatly inferior, and cultivate or manufac- 
 ture under disadvantages that render their production a 
 waste, to a certain extent, of our labor, when they can be 
 procured much cheaper and better from abroad. 
 
 It would also attach itself to those articles which we do 
 not produce at all, and of which we would then receive en- 
 larged supplies, to our own greatly increased enjoyment. 
 
 The labor, which with us had been dis advantageously 
 employed in the production of those articles, in producing 
 which we are inferior, would be called to employ itself in 
 the production of tobacco, in which we enjoy superior 
 advantages ; and this labor would, in consequence of those 
 
PAUPER LABOR. 63 
 
 superior advantages, yield an enlarged result, greater in 
 proportion to its expenditure of force and capital than it 
 had previously yielded. Therefore, the gain to the coun- 
 try would be large on the score of a proper em- 
 ployment of its own labor, while it would be, on the 
 other hand, great from the receipt of products of foreign 
 labor, which before had been shut out from our general 
 consumption. Every country gets its imports at less cost 
 in proportion to the efficiency of its labor. 
 
 Thus it is that a double gain results from free trade. If 
 such advantages are derived from a partial application of 
 its principles, they would be greater in due proportion, if 
 mutually adopted between countries, in relation to all 
 commodities. We would see in the increased quantities at 
 cheapened prices of the articles required for consumption, 
 and in the increasing product of our own labor, furnishing 
 means with which to purchase those articles, a double 
 stream pouring its wealth from two exhaustless and ever 
 augmenting sources, into the lap of labor, to enrich the 
 poor. 
 
 Under the operation of free trade, we observe the labor 
 of all countries working to produce enlarged quantities, 
 each of their natural products, and casting all not consumed 
 at home, as it were, into the general reservoir of all the 
 world's property in commodities. Each nation is then seen 
 to draw therefrom that which it wants and wants because 
 it is not produced as cheap at home and drawing freely, 
 without other expense than transportation, whilst it pays 
 with what it leaves for others' uses. Each is getting cheap- 
 ly, because the others produce abundantly, with all of 
 nature's favoring force to aid them. 
 
 Shall a people refuse to enjoy the light of the sun, because 
 
64 INDUSTRIAL EXCHANGES. 
 
 it shines as well on other nations ? Shall they dam up the 
 waters of the stream that meanders through their fields and 
 meadows, distributing its fertilizing force, because it takes 
 its rise in the territory of a neighboring people ? Or, les- 
 sening the prohibition, shall they admit a partial flow to 
 fertilize a portion only of their soil, because an individual, 
 one SIR CHARTER MONOPOLY, has dug a well, and fain 
 would distribute its waters through his aqueducts to irri- 
 gate the lands of those who will pay him toll therefor, but 
 would not need his water, did the entire stream pour on its 
 natural and fertilizing flow ? This protection is but modi- 
 fied prohibition. 
 
 It is laughable, and yet one needs must weep instead, 
 its effects are so deplorable, to see nations studiously avoid 
 receiving a benefit, refusing to enjoy the free reception of 
 foreign manufactures, that, without a protective tariff, 
 might be enjoyed at a rate so much cheaper than is paid 
 for them. 
 
 The weakest nations are those who will derive the 
 largest amount of benefit from free trade. 
 
 The question has been incorrectly stated by protection- 
 ists. It is not a state of destructive contention, but one of 
 profitable amicable exchange that nations should relatively 
 occupy. The relations countries should bear towards 
 each other are peaceful, not warlike. 
 
 If A has most of commodities, and B fewest, and requires 
 more of A's than A does of his, it is clear that, if freely 
 exchanged, B is proportionally the greater gainer, and that 
 he must be the least able to sustain the burden in its 
 immediate and ultimate effects of any imposition. 
 
 Weaker, it is said, in capital and labor, we permit 
 ourselves to pay tribute to England whenever withholding 
 
TRIBUTE. 65 
 
 protection from our manufactures. To show how fallacious 
 is this charge of tribute, and how impossible that it can exist 
 as an effect of commerce, we will suppose that from some 
 cause we come under an obligation to pay that country 
 fifty millions of tribute, in annual instalments of ten 
 millions of specie ; and assume, what is near the fact, that 
 the United States have an annual trade with England of 
 60 millions of her productions exchanged for the same 
 value of English products. Next year the first instalment 
 of ten millions has to be paid. We send her the 60 
 millions of commodities as heretofore, but 50 millions is in 
 the commodity of produce, and ten millions in the commo- 
 dity of specie. We receive from her 60 millions in the 
 commodity of her products. What is the effect ? Specie, 
 becoming scarcer, rises in value here, and England's 
 products, becoming plentiful here, fall in value. Our 
 products, getting scarcer in England, rise there, and 
 specie, becoming plentiful, falls in value there. The 
 following year this condition of the international exchanges 
 augments. What results ? The productions of England's 
 industry soon become so low in value here, and ours so 
 high there, that she is obliged to send back the specie, in 
 order to pay for the amount of our products she finds it 
 necessary to consume, they being insufficient for the pur- 
 pose of exchange, as our market is glutted with them for 
 the time. 
 
 It will not be long before she will be returning to us the 
 specie, in which our payment of tribute was made, through 
 the transactions of commerce, as the exports and imports, 
 both of that country and this, specie included, must become 
 equalized. This would occur before the expiration of five 
 years of instalments ; and until it did occur, we should be 
 
66 INDUSTRIAL EXCHANGES. 
 
 receiving a larger proportion of the result of English labor 
 in exchange for the result of our labor than we sent, be- 
 cause her products would be at a less money value than 
 ours. There is a constant tendency in international ex- 
 changes to equalize, and no difference can be lasting. 
 There can be no tribute effected by free trade. 
 
 This law of the regulation of international exchanges 
 will be made more clear in the chapter upon drain of capi- 
 tal, where it will be seen that if this country purchases of 
 another, it sells something as an equivalent, and we are 
 the sellers of an amount of our produce, for which we are 
 fortunate to find a purchaser able and willing to pay, on 
 delivery, in articles we want, and at a cost much lower 
 than we could manufacture them at home. And all of that 
 difference in cost of her producing the articles, and our 
 doing so, is our clear gain ; so much of her natural ad- 
 vantages of labor and aptitude is appropriated by us to our 
 profit. 
 
 A farmer finds it more to his interest to have wealthy 
 neighbors than poor. If he can reach a rich city with the 
 produce of his farm, he finds it more profitable than to gain 
 no such market. 
 
 But it is only in a very restricted sense of the term that 
 this country can be styled weak. The jealousy of more 
 advanced nations is baseless, and a policy acting upon its 
 dictates is suicidal. 
 
 Mirabeau, in his Monarchic Prussienne, has carried the 
 principle so far as to doubt whether the trade of France 
 was injured by the edict of Nantz, which drove so many 
 skilful artificers out of the country. He says : " It is 
 in general a sure principle in commerce, the richer your 
 buyers, the more you will sell them ; thus the causes that 
 

 INDUSTRIAL PROFICIENCY. 67 
 
 enrich a people always augment the industry of those who 
 have business with them. Without doubt it was a fanatic 
 folly to drive 200,000 individuals from their country, to 
 enrich another; but nature, who wishes to preserve her 
 work, is incessantly repairing, by insensible compensations, 
 the errors of men, and the most disastrous faults are not 
 without remedy. The great truth offered by this memora- 
 ble example, is, that it is foolish to destroy the industry and 
 commerce of our neighbors, since it can instead draw to 
 itself their treasures. If such efforts could ever produce 
 their natural effect, they would depeople the world, and 
 would render that nation very unfortunate which had had 
 the misfortune to engulf all the industry, all the com- 
 merce of the globe, and be ajwztys selling without ever buy- 
 ing. Happily, Providence has disposed of things in such 
 a manner that the frenzy of sovereigns will not be able en- 
 tirely to arrest its good intentions towards our species." 
 
 If political convulsions, revolution, and war, are expect- 
 ed to occur in Europe to derange the action of their indus- 
 try and the operations of trade, we hear expressed much 
 regret and fear of injury to our agricultural and commer- 
 cial interests. These forebodings grow out of anticipated 
 contraction of the mutual exchange of our commodities and 
 theirs. Yet, with characteristic inconsistency, the same 
 individuals will endeavor to entail upon this country a 
 policy of non-intercourse, partial or total, by tariffs re- 
 stricting our importation of European productions, and in- 
 volving a corresponding diminution of the exportation of 
 our productions. 
 
 These inconsistencies appear because protectionists oc- 
 cupy the ground of restriction, and hence, standing upon 
 a wrong principle, if it were carried out to the extreme 
 
68 INDUSTRIAL EXCHANGES. 
 
 results in practice, the consequences would be disastrous 
 and destructive of all production and enjoyment. There- 
 fore, it is necessary to check the operation of the principle 
 at some stage of its action, and measures are advocated or 
 adopted, which, if carried to their extremes, would effect 
 results directly the reverse of the original principle. The 
 two principles avowed are necessarily contradictory, 
 and the contradiction is apparent to impartial observers. 
 
 The objection that many nations produce the same arti- 
 cles, to retain any force, requires an exactly permanent 
 state of such production. It also requires that every na- 
 tion should manufacture all things. This cannot be. In 
 the great diversity we see in population and natural fea- 
 tures of countries, there is an inexorable prohibition of 
 any such contingency. 
 
 As to effecting the industrial education of a tyro nation 
 by protection, it may be said that competition is the true 
 lever of improvement, and will keep up certain branches 
 of production. Guaranteeing them the certainty of high 
 prices, will leave no room for the incentive of necessity to 
 operate. The unfilial conduct that contemns the " mother 
 of invention," causing improvement to lag behind, will not 
 wake the genius of industry in a people. The best way to 
 do this, is to permit direct competition with other people 
 proficient in the arts you would instruct them in. 
 
 I heard a distinguished member of the French Chamber 
 of Deputies, whose views of protection were sound and 
 clearly expressed, relate the following, the truth of which 
 he could vouch for. An iron manufacturer of France, 
 not long since, was asked by a member of the government, 
 " Do you think that a protective duty of 15, 10, and 5 per 
 cent., successively decreasing during fifteen years, would 
 

 INDUSTRIAL PROFICIENCY. 69 
 
 enable you to dispense with protection at the end of that 
 period ?" Without doubt," he replied. The official then 
 said, "if it was put at once down to five per cent., how 
 then ?" "I would prefer to live fifteen years, to being 
 killed off at once," replied the manufacturer. The official 
 then remarked, " There are perfected improvements well 
 known to the English, you could examine and introduce 
 them into your establishments." The reply was, " what 
 need have I to go to England ? we are protected." This 
 reply, so potent with meaning, was delivered with the most 
 perfect naivete, with a matter-of-course simplicity. It was 
 in effect saying, we receive from our fellow-citizens a per- 
 mission for making articles inferior to what they would be 
 if protection was withdrawn. 
 
 " It is a well known fact," says Mr. Mill, " that the 
 branches of production in which are fewest improvements, 
 are those with which the revenue officer interferes, and 
 that nothing, in general, gives a greater impulse to improve- 
 ments in the production of a commodity, than taking off a 
 tax which narrowed the market for it." 
 
 To say, give us protection for a time, until we have 
 attained proficiency, is deceptive, for while we are advanc- 
 ing, other nations are improving also. 
 
IX. 
 
 A HOME MARKET FOR OUR COTTON. 
 
 IT has been urged in this country as a reason for 
 protection, that we require a home market for our cotton ; 
 because if we manufactured all produced, we should be 
 independent of the fluctuations in European markets, 
 where, it is said, a rise in our breadstuffs cannot be 
 considered a fortunate event, because the scarcity that 
 produces their demand abroad, increasing the cost of 
 production there, causes a proportionate reduction of the 
 value of the raw material upon which English labor is 
 principally expended. That, exporting more cotton than 
 corn, we lose more on the former than we gain on the 
 latter. 
 
 The elements of the position here assumed refute of 
 themselves the conclusion drawn. To take this argument 
 as it is presented to us. It is admitted more, it is made 
 the groundwork of the whole argument that scarcity 
 abroad injures more than it benefits us. It is in effect 
 stated that the injury is the exact residue, after deducting 
 from the loss on cptton the gain on corn. 
 
 Then if the gain on corn was greater to a certain 
 sufficient extent, we should suffer no loss. This being the 
 case, our policy clearly is to increase that gain. Forcing 
 
A HOME MARKET FOR OUR COTTON. 71 
 
 labor into the channel of manufactures will not do this, 
 because it will draw off from agriculture all it turns upon 
 manufactures, and thus reduce the quantity of breadstuffs 
 produced, and raise their price, diminishing the amount 
 exported and the profits thereon. 
 
 Further, the effect of greater scarcity and enhanced 
 prices of breadstuffs abroad will be to increase still more 
 the cost of production, and proportionally reduce the value 
 there of the raw material, cotton. 
 
 The evil complained of is thus aggravated by the 
 proposed remedy of the protectionists. 
 
 That scarcity abroad injures, and plenty benefits us, the 
 advocate of protection admits. It does so ; scarcity 
 anywhere injures us; and plenty in like manner benefits 
 us and all others. This is the free trader's theory, and 
 because those effects proceed from those causes, he would 
 promote abundance. But the protectionist, looking through 
 his distorted medium, arrives at erroneous conclusions even 
 when he starts with a correct principle. 
 
 What is the tendency of his theory ? He would 
 diminish supplies, and promote that scarcity ; and wrap- 
 ping himself in his selfish exclusiveness, says, "I will be 
 sufficient unto myself, raising my own cotton and making 
 my own clothes from it, and selling the foreigner my 
 surplus corn at a good price, will pocket the money; 
 independent, I will, scorn the world.' 7 
 
 But Providence never designed this state of things, and 
 soon abases his pride and dissipates his selfish dream. 
 The foreigner, not being able to send his manufactures, 
 cannot take the corn, for, as with all nations, he has not an 
 unlimited supply of gold at home to draw upon, and, sooner 
 or later, must exchange his labor for what he wants. 
 
72 INDUSTRIAL EXCHANGES. 
 
 Hunger and suffering are with the foreigner for a time, 
 the protectionist heeds it not, but Providence not permitting 
 this inequality to last, the operation of natural laws will 
 regulate the balance. 
 
 The protectionist has his corn on hand unsold, he has 
 in addition merely his cotton and cloths. But he wants a 
 thousand other things, and he must live on deprived of all 
 these, poor in his wealth, unless he opens his door to admit 
 the foreigner's products. Rather than continue to exist 
 like the miser, on dry bread, with his wealth hoarded up, 
 he yields to the demands of his nature and the knock of 
 Providence, and opens his door, when the respective pro- 
 ducts of other nations, in all their rich variety, come pour- 
 ing in upon him in exchange for his cotton and corn. 
 
 With nations as with individuals, nature has ordered 
 mutual dependence one upon the other, if each would en- 
 joy the goods a teeming world will yield to labor. With 
 nations as with individuals, a shutting up within the nar- 
 row limits of selfish exclusiveness, brings a deprivation of 
 many of those goods their wants demand, and a final 
 merging into a state of barbarism. 
 
 Labor is not a defined, limited quantity, to be divided 
 between the different nations, making it the interest of 
 each to draw to itself the greatest share, and its consequent 
 production. The field of labor, of production, is unlimited. 
 The elements are placed at the disposition of man, created 
 in the image of God, to continue the work of creation, to 
 achieve new creations. 
 
 But the protectionist, semi-conscious of the injury to be 
 effected by the full operation of his principles, may say 
 that we will prohibit no foreign manufactured articles but 
 those of cotton, which we especially desire to encourage, 
 
JL HOME MARKET FOR OUR COTTON. 73 
 
 and will admit all others ; exchanging for these our corn 
 and cotton manufactures, thus supplying all our necessities. 
 Deceptive reasoning ! that will not succeed in practice, nor 
 enable us to escape the penalty of practising protection. 
 We will trace the course of such a policy to its effects. 
 
 In proportion to the amount of labor thus concentrated 
 on cotton manufactures, will be the decrease, as we have 
 seen, in the production of breadstuffs. They will rise in 
 price, and with the rise, will be enhanced the cost of our 
 own cotton manufactures. We must then sell these abroad 
 at a high price, or if sold low, our manufacturers will not 
 be able to pay any but a low price for our material. The 
 exports of breadstuffs have meantime diminished with their 
 lessened production. The exportation of cotton manufac- 
 tures now diminishes with their rise in price our exporta- 
 tions become altogether limited, and our importations of 
 varieties in foreign manufactured commodities diminished 
 in proportion. 
 
 What have the foreigners been doing meanwhile ? Cut 
 off from manufacturing our raw cotton, and enabled to 
 procure but limited quantities of our breadstuffs, they seek 
 from necessity, improved methods of agriculture, and di- 
 recting into that channel much of the capital before em- 
 ployed in cotton manufacture, produce their own bread- 
 stuffs in enlarged quantities ; with the increase of supply, 
 prices diminish, and the cost of subsistence lowers ; the 
 cost of manufacturing is with them diminished, and they 
 can afford to pay an advanced price for the raw material. 
 They are able to overbid our manufacturers for the raw 
 cotton, and the planter, willing and anxious to sell where 
 he can sell dearest, supplies them. 
 
 Where are we then ? With diminished breadstuff pro- 
 4 
 
74 INDUSTRIAL EXCHANGES. 
 
 duction, and broken down cotton manufactures, we are 
 poor, when we might have been rich. 
 
 It is thus that labor, meandering through a thousand 
 channels, over the entire globe, and not confined to a dis- 
 trict, finds its level ; thus, that the balance of production is 
 adjusted. No weight of selfish exclusiveness is allowed 
 by Eternal justice, to be cast by one of the nations into 
 her scales, to weigh down the rights of other nations. 
 Providence has ordained that the effect of a nation's at- 
 tempting to deprive another of the enjoyment of its produc- 
 tions, determines ultimately and disastrously upon the 
 consumers of the nation making the attempt. 
 
 Aside from the foregoing hypotheses, which, however 
 much they may be said to define an extremity that would 
 not be reached in practice, are not the less true, as illus- 
 trating the effects of the theory the short-sighted, crip- 
 pling policy of any attempt to circumscribe our production 
 of raw cotton, by squaring it with our manufacturing of 
 the article, is more than objectionable, it is ridiculous. To 
 be sensible of this, it is only necessary to reflect that " if 
 France and Germany (I quote from Hunt's Magazine) 
 should consume cotton goods at the same annual average 
 as in England and the United States, viz. 25 yards per 
 head, the increased consumption will be equal to the whole 
 quantity at present spun in Great Britain." We see here 
 a boundless field for expanding markets for the produced 
 raw staple, when we consider that the approximation to- 
 wards this rate of consumption is taking place not only in 
 France and Germany, but throughout the civilized world. 
 To meet this demand for the raw material, we may with 
 great reason aspire, for we shall have no important compe- 
 titor. But to hope to supply it manufactured, would be 
 
A HOME MARKET FOR OUR COTTON. 75 
 
 the height of folly, as these countries must all do largely 
 of manufacturing from the raw material. 
 
 Such is the extent to which the production of raw cotton 
 may be and will be carried in the United States, that no 
 extent of manufacturing the material to which we can pro- 
 fitably attain will consume it all. That this manufactur- 
 ing consumption cannot keep pace with the increase of 
 production, is evident from the fact that whenever duties 
 have been most highly protective, there has still been an 
 increase of the surplus production of raw material over 
 such consumption. I refer the reader to the official statis- 
 tics for the facts. 
 
 This policy of manufacturing our own raw material of 
 cotton necessarily involves, to a certain extent, the contin- 
 gency of finding a home market for our breadstufFs also. 
 We have not got this market. With a surplus production 
 of breadstufFs, and, under a policy favoring international 
 exchanges, to bring capital into the country, with the 
 ability to defy competition,* it must be seen that the 
 desideratum is markets ; and these we will always have if 
 we do not, by restrictive laws, refuse to receive the com- 
 modities of other nations in exchange for our own. 
 
 * It is stated by a farmer in Western New York, that his corn crop 
 of 1848 cost him but 9| cents per bushel, including interest on the 
 cost of the land. 
 
X . 
 
 THE FARMER'S PROTECTION. 
 
 THERE is no necessity for forcing the practice considered 
 in the preceding chapter, of excluding foreign cotton 
 manufactures, in order to build up a home market for our 
 raw cotton, and diminish its exported sum as compared 
 with that of breadstuffs. Our corn and wheat growing 
 region is much more extensive than the cotton. It is 
 intimately and widely connected with the physical and 
 moral well-being of a larger number of the people. If 
 other branches are not artificially excited, more room will 
 be left for the expansion of breadstuff production, which, 
 with increased exportation, would attain a degree of 
 importance sufficient in some seasons to balance the deficit 
 between it and cotton, and cure the evil (supposing it to be 
 one) complained of. In 1847 the breadstuffs exportation 
 exceeded the cotton ; yet without doubt the greatest 
 expansion of foreign markets will be for our cotton over 
 other exports. Yielding, as we do already, a large surplus 
 of breadstuffs and provisions beyond the power of home 
 consumption, for which foreign markets are yearly ex- 
 panding, to check their enlarged disposition in the open 
 markets of the world, is one of those measures curtailing 
 
77 
 
 our agricultural production which must produce the effect 
 of casting a mass of rock upon the young sapling, that 
 distorts the fair proportions of the growing tree, and stints 
 its otherwise majestic growth. 
 
 Four-fifths, eighteen millions of the population of this 
 country, are directly interested in agriculture. The 
 manufacturing population is only one-seventeenth of the 
 whole ; about fourteen are engaged in agriculture, to each 
 one employed in manufactures. Two centuries and a half 
 ago, three-fourths of the English population were agricul- 
 tural ; now the proportion is one-fourth. Then lived the 
 independent English yeoman, and that comfortable inde- 
 pendence existed which now forms the theme of romance 
 and of ballad. And now, alas ! May the proportion of 
 four-fifths, engaged in developing the, mother of the arts, 
 never be lessened ! 
 
 It is assumed by the friends of protection who would 
 build up factories because they believe the degree of 
 intelligence among a manufacturing population would be 
 higher than that of an agricultural ! that with the increase 
 of manufactures, nuclei of factories and manufacturing 
 towns would be formed throughout the country, whereat 
 neighboring farmers would find markets for their products, 
 and receive commodities in exchange, with a saving to both 
 parties of transportation. In order that the advantages 
 assumed as contingent upon this state of things, supposing 
 it to be attained, should be reaped, it would be necessary 
 that the farms should remain as before, of small size and 
 disposed among a great number of proprietors. Such 
 would not be the case. With the growth of the manu- 
 facturing towns, the numerous small farms about them 
 would consolidate into a few large ones. The small tracts 
 
78 INDUSTRIAL EXCHANGES. 
 
 of land would be gradually thrown up by their occupants, 
 who would seek in the promising business of the towns 
 those pursuits that would at first offer better apparent 
 opportunities for improving their fortunes. As they were 
 thrown up, they would be gathered into the hands of a 
 fewer number of proprietors. No moral improvement 
 would be experienced by those who changed country for 
 town ; and certainly no physical, in exchanging free play 
 of muscle, with sunlight and pure air playing about them, 
 for toiling within brick walls, imprisoned in cramped 
 positions, to grow old in their early years. The change 
 from small to large proprietorships in turning several small 
 farms into a large one, would diminish the effective 
 production in proportion to labor, which in agriculture is 
 greatest when the* proprietor says to his workmen, 
 " come to the field," and smallest when he says " go to the 
 fields." Personal superintendence and the sense of 
 ownership cannot be sacrificed without loss. In England, 
 the proportion of small farms is much less than it was two 
 and a half and three centuries ago, while her large manu- 
 facturing towns have absorbed the population. The 
 example of that country is before us to avoid, not to 
 imitate in any of its forms of protection and monopoly. 
 
 If protective restriction and not free exchange is the 
 facility, if lines must be drawn and restrictive barriers 
 interposed, why not place them between states and 
 counties as well as between nations? 
 
 Only such manufacturing as is so unprofitable as to re- 
 quire protection is referred to here. Europe has most 
 capital, we have more land. To employ our labor and 
 capital upon the land, is to derive therefrom larger 
 results than if we neglect land, and employ the labor upon 
 
THE FARMER'S PROTECTION. 79 
 
 our capital in manufacturing. If we seek to raise the 
 result of the labor diverted into manufacturing channels to 
 an amount equivalent to what it would be were our labor 
 and capital employed upon the land, we must increase 
 capital ; and an infinitely great increase will be necessary 
 to furnish a force sufficient to compete with the heavy 
 capital of Europe. We may effect this increase by bor- 
 rowing from her. 
 
 If we choose the former course, it is trade, the mutually 
 independent exchange of products ; if the latter, it is bor- 
 rowing, indebtedness. One is the frugality that expends 
 only its income, the other the part of a spendthrift who 
 pledges his estate to the usurer. 
 
 Whenever the loan is repaid, it is in the accumulated 
 profits of the manufacturing interests, made off from the 
 consumers. For importations made under free trade, there 
 exist means of payment as imported, in the enlarged pro 
 ducts of consumers, under the operation of labor and capital 
 jointly upon land. 
 
 Protectionists would thus strive, by hothouse growth, 
 fictitiously to increase our capital ; yet they say that 
 wealth has often destroyed, never created a country. But 
 this is only another of the manifold inconsistencies to 
 which a false system necessarily gives birth. 
 
 On occasions of scarcity and high prices in Europe, our 
 agriculturists are benefited, not only to the extent of the 
 profits made on the amount of provisions exported, but, in 
 addition, they profit by the enhanced prices of that con- 
 sumed at home, which are augmented in due proportion 
 with the rise on the article shipped abroad. The tendency 
 of capital is towards accumulation with the manufacturing 
 interest. While the agricultural population exceeds the 
 
80 INDUSTRIAL EXCHANGES. 
 
 manufacturing fourteen-fold, the value of agricultural pro- 
 ducts is only three-fold the manufacturing. The principle 
 of free exchange, which opens a wide channel for the ex- 
 portations of our agricultural, therefore tends to divert 
 from the manufacturing interest a portion of the capital, 
 which, under protective tariffs, rapidly tends to excessive 
 agglomeration upon that interest. And, in effecting this 
 diversion, free trade measures turn a portion of the capital 
 so diverted into the agricultural channel, preventing that 
 enormous inequality which is an unavoidable consequence 
 of the operation of protective measures. 
 
 That, after this diversion, the manufacturers do not suf- 
 fer, but are only relieved of a plethora, is evident, when 
 we consider that this branch of industry exhibits an 
 abundantly large increase, to say the least, under the 
 operation of the present revenue tariff. We see this in- 
 crease in cotton manufactures, when we compare the home 
 consumption of raw cotton in 1843, which was 325,000 
 bales, with that of 1848, which has been 531,000 bales. 
 In the meantime the exports have diminished 142,000 
 bales. 
 
 These things show that free exchange is required, that 
 the agricultural interest, distributed upon small farms, may 
 receive its due proportion of investment of increasing 
 capital and return of profits ; and show also that our cot- 
 ton manufactures do not need the bolstering of protection, 
 in order to retain a firm footing in the secondary position, 
 which naturally they should occupy in our industrial cata- 
 logue, agriculture being entitled to the first. 
 
 Quoting from the Democratic Review of October, 1848, 
 the words of an able writer " the great free trade prin- 
 ciple, as applied to the business of this country, has come 
 
THE FARMER'S PROTECTION. 81 
 
 to be well understood by shrewd and practical merchants, 
 viz. that how much soever arbitrary tariff laws circum- 
 scribe the supply of goods, and confer monopoly upon cer- 
 tain classes of domestic industry, there can be no active or 
 lucrative business without a favorable state of the export 
 trade, such as will raise prices of those agricultural pro- 
 ducts that result from the industry of three-fourths (he 
 might, without exaggeration, have said four-fifths) of the 
 consumers of goods, and therefore, according as the agri- 
 cultural products are bright or otherwise, is the faith of 
 both importers and factory agents in the healthiness of 
 trade." 
 
 These are the results of a tariff much freer than its pre- 
 decessor, and so far well for the time. But many protec- 
 tive features exist, which are, with each year that brings 
 improvements in the industrial arts, aggravating in cha- 
 racter, and the time is rapidly approaching when another 
 reduction will be required to meet the just demands of that 
 spirit of free exchange which abhors protection. 
 
 Open markets and no restriction make the true farmer's 
 protection. 
 
 Four-fifths of our population being agricultural, and 
 their products not imported, the injustice of the protection 
 that taxes them to support a fraction of 1-17 whose capital 
 is invested in manufactures, against the importing com- 
 petition in articles of their peculiar production, is manifest. 
 And of the one-fifth, the remainder of mechanics and 
 professional men, like the farmers, being left without 
 protection. 
 
 Why do not the medical faculty, profiting by the 
 example set them, pray for a tax upon all those laud- 
 
 4* 
 
82 INDUSTRIAL EXCHANGES. 
 
 ably ambitious students, who, after a few years' absence, 
 import scientific knowledge gathered in the hospitals of 
 Paris ? Are they not afraid that more lives will be saved 
 by this imported knowledge, as the manufacturers fear 
 more bodies will be clothed and made comfortable by 
 imported necessaries ? 
 
 Our agricultural production is susceptible of indefinite 
 improvement and enlargement. Under the encourage- 
 ment derived from the markets that free trade would open 
 to us, our hemp and wool would soon add their powerful 
 weight to that of cotton, tobacco, and breadstuffs, in yield- 
 ing ample returns of wealth through profitable exchange. 
 
 Farmers, do you want protection ? Then seek it in 
 removing an antagonist, not in maintaining its existence. 
 From Buffalo to New York the transportation of a bushel 
 of wheat costs 20 cents. One-half this amount is paid for 
 the canal toll. You pay this tax willingly. Right ! it is 
 a just one. It is paid to facilitate transportation and 
 exchange. The law, however, is the agent for collecting 
 from you another tax, not less in amount, but an unjust 
 one. It is paid to restrict exchange. So dexterously 
 is this extracted from your pockets, that you are perhaps 
 unconscious of your paying it. Turn to Chapter second, 
 and you will learn how it is done. 
 
 Abolish this sleight-of-hand system, and you will gain 
 a natural and healthy protection of ten cents a bushel. 
 Probably you would be grateful for a repeal that would 
 relieve you of the other ten cents, paid for canal toll. 
 Nevertheless you are willing to continue paying the just 
 tax. Are you willing to keep up the payment of this 
 unjust one ? 
 
THE FARMER'S PROTECTION. 83 
 
 This tax has a double effect ; enhancing the cost to you 
 of the necessary articles you consume, and in keeping 
 closed a number of markets against you, of keeping down 
 the prices you receive for your produce. 
 
 Is it suicide you would seek ? The thrust of the steel 
 alone would produce death why envenom its point ? 
 
XI. 
 
 PRINCIPLES GOVERN. 
 
 IN falling back, as stated in Chapter 9, to occupy the 
 ground of special encouragement to certain branches of 
 industry, protectionists assume that absolute principles do 
 not govern, but that mankind regulate their transactions 
 by the expediency applicable to the act of the time. The 
 theory of free trade is very fine, say they, but in practice 
 it proves to be a bubble that bursts. It is beautiful, but 
 entirely poetical. 
 
 Principles are universal ; if protection is good for one 
 nation, it is good for all the world. Restriction, being 
 injurious to one, is so to all, and in proportion to the extent 
 to which it is carried. 
 
 As the sole object of the protective policy is to turn the 
 balance of trade (we will see in a succeeding chapter how 
 difficult it is for a nation to gain and retain this balance 
 of trade) in favor of the country applying it, all countries 
 would seek to turn the balance in their favor, which would 
 be impossible. The protective is a false principle, since 
 it cannot be applied at the same time to all nations for the 
 advantage of all. 
 
 What is true as respects individuals, is true as to com- 
 munities, in all matters connected with production, 
 
PRINCIPLES GOVERN. 85 
 
 exchange, and consumption. It is equally to their 
 interest, to buy where they can buy cheapest, and to sell 
 where they can sell dearest. 
 
 Principles are universal. Every step in advance made 
 in the sciences by the astronomer, mathematician, chemist ; 
 every glance that penetrates the arcana of nature, confirms 
 the stability, the invariability, the unerring certainty of 
 some great, yet most simple law, that governs. 
 
 Principles are absolute. If the political economy that 
 requires protection, denies this, then that theory is no 
 science, but a falsity. That it does deny it, has been 
 shown by protectionists accepting and applying the prin- 
 ciple *in adopting improvements in machinery, that enable 
 one man to do the work of many, and refusing to apply 
 it when rejecting the removal of protective duties, whose 
 effect is the same. 
 
 We witnessed, in a previous chapter, the acceptance of 
 the principle, the law of Divine Wisdom, which declares 
 that all gifts of Providence, and all results of labor, shall 
 be distributed among all consumers, when we saw them 
 benefited by adopting the sail. We there observed, also, 
 its rejection, the violation of the principle, the law, by the 
 sovereign power, and all who upheld it in the act, when 
 the sum of the protection was added to the original tax. 
 
 The absolute law condemns all violation of its principles. 
 
 " The wealth of the world is but one, the exchanges 
 which negotiate that wealth are but one, the merchants of- 
 the world are in one partnership, they divide but one pro- 
 fit and one loss." A great truth, and well stated by the 
 London Times. 
 
 The nations of the world are in one partnership, a great 
 principle forms the bond of union, adherence to its require- 
 
86 INDUSTRIAL EXCHANGES. 
 
 ments is profit, their violation is loss. Unwise that policy 
 which trammels their trade, restricts the free exchange of 
 their commodities, loads them with taxes, checks the buy- 
 ing and selling of their stock in trade, curtails their busi- 
 ness, diminishes their profits, and, crippling their freedom 
 of action, estranges from each other these naturally asso- 
 ciated members of the great firm. 
 
 "If protection was the high road to national prosperity 
 its advocates would have us believe, how is it that, after 
 generations of trial, it has not succeeded in gaining an 
 established footing in the hearts of this people nor in the 
 councils of the nation ? So far from that, it has been con- 
 stantly combated, and throughout the civilized world 
 is fast growing weaker in its hold upon men's minds. 
 There must be some defect in its principles, or it would 
 not be retrogradatory. 
 
 The practicability of free trade, besides the favorable 
 though partial experience here, has been tested and 
 proven beyond a doubt, in many instances, in other 
 countries, some of which will be noticed hereafter. 
 
 It is true that free trade is poetical. Is there a great 
 truth that is not ? Is the false poetical ? No ! but the 
 poetical is ever true. The great truths of the Bible, are 
 they not and have they not ever been esteemed poetical ? 
 Whatever is holy, whatever is beautiful, whatever is 
 pure, is fraught with poetry. The birth, the life, the 
 death, the teachings of the Saviour of the world, are they 
 not all the several parts of a great poem ? 
 
 If it is poetry, and poetry it is, we must indeed acknow- 
 ledge the great worth that dwells in liberty to exchange, 
 and bow to the force of its truth. 
 
 And knowing well that free trade is of the true, we may 
 
PRINCIPLES GOVERN. 87 
 
 sing with a firm advocate of free exchange, America's 
 immortal bard a poet whose verse seems not like the 
 flowerets dancing to the music of the zephyrs, nor like the 
 soft whisperings of sentiment breathed in the ear of 
 kindred feeling ; but may be likened to the mass of ever- 
 living granite, that, enthroned for ages on the mountain 
 top, stands forth clearly defined against the heavens, 
 majestic in severe and lofty grandeur : 
 
 " Truth crushed to earth will rise again, 
 The eternal years of God are her*s ; 
 But Error, wounded, writhes in pain, 
 And dies amid her worshippers." 
 
XII. 
 
 SPECIE DRAIN. 
 
 PROTECTIONISTS say that the products of those nations pro- 
 ducing the cheapest will be preferred to those of other 
 nations producing the same articles, who, not being able 
 to exchange, will suffer a drain of specie, an exhaustion of 
 their capital, unless they restrict importations by protective 
 tariffs, and thus prevent the balance of trade turning 
 against them. 
 
 Why is it that the complaint of excessive importations 
 that cannot readily find a market is often made ? Why 
 do not the imported products immediately find consumers ? 
 Because other producers have not made a sufficient quan- 
 tity of other products to exchange for them. This great 
 fact is lost sight of by those who urge the complaint 
 against importations. Were importations and exportations 
 limited to purchases with and sales for money, small indeed 
 would be the aggregate trade of the world. When other 
 producers have not made what would exchange for pro- 
 ducts, restriction has in many cases previously operated 
 to diminish the power of production through its lessening 
 of the power of consumption. 
 
 Those who urge the objection of a specie drain lose sight 
 of the important fact that importation and consumption are 
 
SPECIE DRAIN. 89 
 
 individual acts, a great number of which go to make up 
 the national operations as we look at them in the aggregate. 
 The increased importations that keep up the revenue 
 under a reduced tariff are made in consequence of the 
 enhanced cheapness and augmented consumption increas- 
 ing products, which, as the goddess Minerva sprang into 
 life from the head of Jove, are coming ever forth into full 
 life out of consumption. Or, rather like the ephemera 
 that dies in the act of reproduction, leaving a brood to sup- 
 ply its place, consumption is destroying the major portion 
 of the produce, the existing capital of a country, in the act 
 of reproducing new results from the industrial effort. 
 While the laborer is working to-day in producing the value 
 (or a little more) of a day's food and clothing, he is con- 
 suming and destroying the equivalent food and clothing 
 (wear of instruments, &c.) which had been produced, by 
 his labor, yesterday. The existing productions disappear 
 under the action of consuming industry, which is at the same 
 time achieving new products in greater quantities to supply 
 their place. The more there is consumed and consumable 
 in existence from which to accumulate, the more can be 
 produced, the more capital there is to exchange, and the 
 imports increase. The great business of buying and sell- ' 
 ing carried on throughout the world is by the exchange of 
 products for other products ; not by selling commodities for 
 money, and buying again with money. Importations will 
 not be made faster than they can be paid for. The merchan- 
 dise is brought into the country by importers who pay for it 
 with their capital, which returns to them on the sale of the 
 importations to the consuming purchasers. Each of these 
 consumers purchases according to his ability, and they 
 pay with their products, and those products are the reve- 
 
90 INDUSTRIAL EXCHANGES. 
 
 nues of their several capitals, or rather their reproduced 
 capitals, which are not diminished, nor lost. The import- 
 ers derive a profit from the .business on their capital 
 invested, or they would not continue the trade. They 
 consume part of their profits in living, their capitals in- 
 creasing, not only by the profits made off from the con- 
 sumers at home, but also by those made off the foreigners, 
 which, in returning, effect enlarged importations. These 
 augmented importations are what the protectionists con- 
 sider so grievous an evil, but which those not blinded by 
 a fallacy regard as an addition to the wealth of the country, 
 a clear gain of commerce in profits made upon our trade 
 with foreigners. There cannot be loss to the community 
 when each individual engaged is profiting. In practice 
 there can be no such disastrous results as the protective 
 theory alleges ; and the country's capital is in no danger 
 of being exhausted. 
 
 The capital of the country in this manner induces the 
 purchase as it does the production of commodities. As 
 new production is limited by the capital calling upon labor 
 to undertake new works, the new purchases likewise wait 
 for capital to call for investment. Although without en- 
 larged consumption production and capital cannot increase, 
 purchases are not directly undertaken in consequence of 
 the demand for consumption, anv more than the demand 
 for labor is constituted by that which may exist for those 
 commodities resulting from the production. There might 
 be much demand for an article, but if there was no capital 
 accumulated it would not be produced nor purchased. 
 The direction that purchase, as well as production takes, 
 is given by the demand for consumable commodities which 
 turns into its channels the existing capital's demand for 
 
SPECIE DRAIN. 91 
 
 labor, likewise already in existence. Wealth, capital, in- 
 stead of consisting of specie, being made up of the consu- 
 mable commodities which are the produce of industry, the 
 -money that facilitates distribution of these products is 
 valuable only for its purchasing power, and only so far as 
 it represents the products ; and then this representative is, 
 in effect, the commodity itself. This specie has been re- 
 ceived from some source, in exchange for a nation's pro- 
 ducts, and the country is fortunate in being able to ex- 
 change again this mineral, which has in itself no virtue, 
 and cannot either feed or clothe its people, for those pro- 
 ducts which they need for their enjoyment. Then we are, 
 in fact, still exchanging products for products. This, as I 
 heard M. Horace Say express it, from the tribune of the 
 Congrds des Economistes, is the " corner stone of the edi- 
 fice of political economy." 
 
 Our trade is with many nations ; if the balance with 
 one is against us, it is in our favor with another, and when 
 we come to balance accounts with all, aside from the 
 profits made on our products, we will have exported as 
 much as we have received ; no one of them will consent 
 to supply us with her products gratuitously And if she 
 did, would it not be a gain ? 
 
 " Gold and silver," says the profound Ricardo, "having 
 been chosen for the medium of circulation, they are, by 
 the competition of commerce, distributed in such proportions 
 among the different countries of the world, as to accom- 
 modate themselves to the natural traffic which would take 
 place if no such metals existed, and the trade between 
 countries were purely a trade of barter." 
 
 Notwithstanding what has just been stated, the balance 
 of trade objection will perhaps be pertinaciously adhered 
 
92 INDUSTRIAL EXCHANGES. 
 
 to. It is proper, therefore, to present the true theory 
 more in detail. Supposing an excess of importations we 
 have already seen that the existence of a surplus is 
 evidence of insufficient capital-employing production at 
 home, whose products would have furnished exportable 
 commodities, that, in being exported, would have prevented 
 the excess of importations ; or it is evidence of excessive 
 exportations, in other words, previous insufficient importa- 
 tions of commodities exclusive of specie, this last com- 
 modity preponderating. As we have before seen, coming 
 in as a commodity it is proper it should go out as the 
 same, and no loss is thereby sustained. Upon occasion of 
 the excess of importations, the exportation of specie will 
 continue until the surplus is withdrawn, when the export- 
 able commodities will become cheaper, money having 
 risen on the other side of the scale causing prices to fall, 
 and the demand for them will in consequence rise abroad. 
 Then if the country could not export when prices were 
 high, it will be able to do so when they are low, and the 
 balance will be restored. What Mr. Mill happily calls 
 the equation of international demand will be established. 
 
 There will be an auxiliary power at work aiding in 
 establishing the equilibrium, which will be of itself suffi- 
 cient to effect it in all save rare instances like the preced- 
 ing supposition. In the ordinary disturbances of trade, 
 such as might occur under the pure unadulterated regime 
 of an unrestricted traffic temporary and to be readily 
 equalized by the laws of trade the premium of exchange 
 would adjust the balance. Imports exceeding exports in 
 value, exchange is against the country ; but, selling for a 
 premium, it is so far a gain to the exporter, an addition to 
 the sum he receives for his merchandise, and encourages 
 
SPECIE DRAIN. 93 
 
 his exportations. Being transferred to him from the 
 pockets of the importer, who must feel this tax upon his 
 importations, it operates as a check upon them. Gradu- 
 ally the exportations proportionally increase, exchange 
 lowers, and thus temporary balances are adjusted without 
 specie being transmitted at all. 
 
 Soon, perhaps, this side of the scale rises in its turn, 
 and exchange settles past the central point of par, until 
 getting in favor of the country, it can afford to export at 
 reduced prices, because what is lost in depreciation of 
 commodities' prices, it gains in the rise of exchange, now 
 in its favor, again to return, like the needle that is tem- 
 porarily turned from the polar point, and settle about the 
 magnetic centre of par. 
 
 Ports being open, and exchanges of commodities active, 
 there is no obstruction, as under the restrictive regime, to 
 the operation of these and all other processes of equaliza- 
 tion. Whichever way we turn, we find channels open, 
 through which the waters of trade are seen rushing to 
 distribute themselves equally in all the regions of produc- 
 tion and consumption, leaving their fertilizing deposits 
 of profits with all. 
 
 This balance of trade alarm is in truth mere fallacy. 
 It adjusts itself between nations. Each can take no more 
 than it can pay for, and each will send no more than it 
 receives payment for. Then there is no such thing as 
 balance between the amount of a nation's exports and its 
 imports, save the literal balance that makes both equal. 
 
 Does the balance lie then between the amount of our 
 productions and the amount of our consumption ? No ; 
 the amount of these productions, whatever they may be, 
 are consumed immediately at home, or mediately through 
 
94 INDUSTRIAL EXCHANGES. 
 
 what we receive in exchange from other nations ; and 
 this is likewise made the literal equal balance. Then 
 there is no such thing as a balance of trade it is a chimera. 
 
 But there is one thing that is tangible, and will satisfy 
 our inquisitive search, if we do not neglect it. In seeking 
 for the non est " balance of^trade," we were brought to a 
 stand at the point of consumption. We find every problem 
 terminate upon that point. The consumption was found 
 to be just equal to the production. To enrich a country, 
 then, is to facilitate the greatest amount of production in 
 proportion to its labor. We have already seen how well 
 free trade is entitled to be considered a facility. 
 
 If protectionists must need still insist upon having a 
 " balance " of specie, they will learn by reference to the 
 statistical facts, that for the last year of the high tariff of 
 1842, the balance was $8,203,281 against us ; and for the 
 year 1847, the first year of the reduced tariff, it was $12,- 
 103,984 in our favor. But transient must be the balance, 
 as it should be. In the year 1848 a large exportation of 
 specie reduced the excess. 
 
 With further reference to statistics it will be ascertained 
 whether the drainage of specie from this country in past 
 years, has actually been greatest under high or low 
 tariffs. I quote from the report of the Secretary of the 
 Treasury for 1847, the evidence being substantiated by 
 tables compiled from the records of the department, and 
 appended to the report. 
 
 " The four protective tariffs were enacted in 1816, 1824, 
 1828, and 1842. The compromise act intervened from 
 March, 1833, until after the 30th of August, 1842; and 
 the revenue tariff of 1846 went into operation last year. 
 Let us now look at the effect of high and low tariffs upon 
 
SPECIE DRAIN. 95 
 
 the gain of specie during these periods, from 1821, being 
 the earliest date to which the records of the Treasury go 
 back on this subject. From the beginning of 1821 until 
 the commencement of 1833, and from 30th September, 
 1842, until 1st July, 1846, our excess of the imports of 
 specie over the exports was $12,660,312, being an average 
 annual gain of $791,216 in specie during these sixteen 
 years of high tariffs ; whilst the excess of specie during 
 the eleven years of the compromise act of 1833, and low 
 tariff of 1846, was $68,507,630 ; and the average annual 
 gain of specie was $6,227,967. Omitting the tariffs of 
 1842 and 1846, and comparing the ten years of com para- 
 tively low duties from 1833 to 1842 with the twelve years 
 under protective tariffs from 1821 to 1832, we find under 
 the latter an actual loss of specie to the country by the 
 excess of the exports of specie over the imports, of $3,851,- 
 652, as the result of protection, and a gain during the 
 succeeding ten years of comparatively low duties of $46,- 
 294,090, or at the rate per annum of $4,629,409, and in 
 the single year under the new tariff a gain of $22,213,550 ; 
 thus exhibiting a uniform gain of specie in the years of 
 low, as compared with high duties. The protective theory, 
 founded upon this assumed balance of trade and gain of 
 specie under high tariffs, is disproved by the results ; and 
 it is shown, by the experience here of more than a fourth 
 of a century, even as to specie, that it accumulates most 
 rapidly by the gains of trade under a liberal commercial 
 policy." 
 
 There is nothing more ridiculous than the oft repeated 
 objection to free trade that low tariffs encourage importa- 
 tions to excess until we become largely indebted to foreign 
 countries, and have to pay in specie, followed by over 
 
96 INDUSTRIAL EXCHANGES. 
 
 trading, derangement of currency, and all the stereotyped 
 bugbears that furnish excuses for the loud calls made for 
 restriction, wherewith to confine trade within the limits of 
 good behavior. To " restrict importations by special 
 acts of Congress ! !" As if trade was a madman, that 
 must be put into a strait jacket to force submission to cer- 
 tain conventional rules and regulations. Supposing that 
 for a long term of years no such thing as a tariff existed, 
 no person can possibly believe that trade would not regu- 
 late itself by the law of supply and demand ; and that, 
 because a tax did not exist to enhance the values of certain 
 commodities, therefore, heedless of the limit of demand, 
 individuals would be found so insane as periodically to 
 ruin themselves, by furnishing to the community uncalled 
 for supplies. On the contrary, it must be evident that the 
 values and prices being less, more would be consumed ; 
 and that, as when prices were higher, the supply would 
 be furnished to meet the demands of consumption, and no 
 further. 
 
 It has been, during the year 1848, alleged that the low 
 rate of duty permitted too much importation, causing a 
 drain of specie, and that the exceedingly low prices at 
 which goods were invoiced were breaking down our 
 manufactures. Much that is here assumed of large im- 
 ports as attributable to the low tariff, was caused by the 
 unsettled state of Europe, destroying confidence there, and 
 inducing people to hurry their commodities out of the 
 country, thrusting them upon the American market, in 
 order to realize something from what, if retained at home, 
 they were apprehensive would be totally wrecked. Under 
 a much higher tariff, the same cause would have produced 
 the same effect, though to a less extent. But the effect, 
 
SPECIE DRAIN. 97 
 
 caused, as it has been, principally by the low tariff, and 
 partially by the disturbances abroad, has not been injurious 
 to the interests of this country, inasmuch as the facts go to 
 prove the truth of the position assumed herein, that the 
 amount of imports must call forth an equivalent amount of 
 exports in exchange, and if we have got a large supply of 
 foreign products at low prices, we have paid for them in 
 the products of home industry, and simply made what we 
 should rejoice at a good trade. We learn, by reference to 
 the report of the Secretary of the Treasury for 1848, that 
 during the fiscal year, excluding specie, foreign imports 
 were consumed to the value of $127,490,012, and that the 
 domestic exports, exclusive of specie, exceeded that sum 
 by $2,713,697. With reference to the charge of break- 
 ing down our manufactures, their flourishing condition 
 belies the assertion. Under the actual circumstances, we 
 see that no " ruin" has been wrought, no injurious drain 
 of specie has occurred. Evidence of the truth of this 
 proposition exists in the fact that on the first of January, 
 1848, the price of United States Treasury Notes in the 
 New York market was 99, and at this present writing, on 
 the first of December, of the same year, they are sell- 
 ing for 108. Balances have simply been adjusted, and a 
 profitable trade has flourished under the auspices of an ap- 
 proximation to free exchange. 
 
XIII. 
 
 CURRENCY DERANGEMENT. 
 
 RETREATING from the positions of necessity for pro- 
 tection, on the score of sustaining manufacturing inte- 
 rests, to secure the independence of national labor against 
 the influx of foreign pauper labor, and prevent the indus- 
 trial death to ensue from the producing competition of 
 more advanced nations : on the ground of saving the 
 tribute to foreign countries, paid when a balance of trade 
 lies against the country, and drains its specie protection 
 seeks an argument in the alleged evils resulting from a 
 deranged currency. 
 
 A protective tariff is required, it is said, to restrict 
 importations to an amount not exceeding the exports, lest 
 the drain causes a contraction of the currency, the effects 
 of which bring ruin to the commercial interests. Protec- 
 tionists know that commerce would derive untold benefits 
 from the universal adoption of free trade, therefore cannot 
 be candid when urging the commercial interest to oppose 
 it. They are, then, placing themselves in a position where 
 they are liable to the accusation of adroitly seeking an 
 argument that may enlist this class against free trade, 
 before it shall have fully tasted of its benefits. It is under 
 the protective regime that crises are produced. With the 
 
CURRENCY DERANGEMENT. 99 
 
 foreign markets shut against our products, every slight 
 excess of a forced home production depresses prices and 
 disturbs the currency. With our markets closed against 
 foreign products, every decrease of our own from any of 
 the many causes that effect such a result likewise produces 
 its revulsion. There, then, exist no outlets and inlets 
 through which the troubled waters of trade may seek their 
 level. 
 
 Generally, those who advocate protection as better 
 economic policy than its opposite, also approve of a system 
 of currency that, overstepping the limits of the universally 
 acknowledged representative of value, specie, adds to it 
 and substitutes a circulating medium of merely local 
 value ; and which creates a widely diffused system of 
 credit. This engenders losses, and aggravates whatever 
 evil direction the course of trade may take. Though 
 speculation may originate in the relative proportions borne, 
 or expected to be borne, towards each other, by supply and 
 demand, we always see in times of immoderate specula- 
 tion a large increase of bank issues. 
 
 And though the call for credit may originate in the 
 growth of business, or in the spring, to compass the stretch 
 of an opening trade, the expansive currency and its conse- 
 quent extended credit operate upon production and mar- 
 kets in subsequent stages, by catching up the speculative 
 spirit, and carrying it along with new vigor that heightens 
 results, prolonging and extending the movements until 
 contractions must necessarily be more violent when they 
 do come. With this condition of its effects in view, I will 
 enter into a limited analysis of the character and effects of 
 an expansive currency ; sensible that, of all the problems 
 
100 INDUSTRIAL EXCHANGES. 
 
 contained in the economic science, it is perhaps the furthest 
 from solution. 
 
 Money, we have seen, is valuable only so far as it 
 represents the consumable products of industry ; therefore, 
 to increase the circulating medium is not increasing the 
 wealth of a people. The law of demand and supply 
 determines value, controlled by the law of cost of pro- 
 duction, in the case of money, as of most other things. It 
 is not, strictly speaking, the abundance of money, but of 
 credit, that raises prices. Credit, however, is employed to 
 a much greater extent as a means of purchase, when bank 
 notes are used, than when the individual seeks it directly, 
 as they are credited out to individuals on discount notes, 
 and thence the credit is repeated with each transmission of 
 the paper currency from one individual to another. Each 
 of these has obtained a credit for the amount, when he 
 could not, perhaps, have obtained it directly upon his own 
 responsibility ; and if he had credit of his own, it is not 
 impaired, but can be used in addition to the use he has of 
 the bank's, which is thus multiplied to an almost indefinite 
 extent. Money, specie, has the same power of multiply- 
 ing purchases, but costing more to produce, and existing 
 in smaller supply, its value is greater than that of bits 
 of paper, and the value of commodities is proportionally 
 lower. Banks, when they issue three representations of a 
 dollar for one of money deposits, produce the effect of 
 quadrupling the purchasing power, which consists then of 
 one of money and three of credit. In addition, the credit 
 exists which is independent of that attaching to the bank 
 notes. 
 
 When the bank notes are added to the currency, all the 
 
CURRENCY DERANGEMENT. 
 
 101 
 
 subsequent holders of the notes suffer a loss equivalent 
 to what is gained by the issue. This is by the deprecia- 
 tion of the value of the currency. There is an off-setting 
 rise in the value of commodities. The gains made by 
 operators, who obtain from the banks the loans for enlarg- 
 ing their business, are a portion of the banks' gain ; and 
 these thus divide the profit made by them off from the 
 community at large the consumers the loss of the many 
 balancing the gain of the few. 
 
 The analogy between the effects of protection and bank 
 issues, in the rise in value in commodities caused by each, 
 explains the affinity between these schemes of national 
 tinkering. It is said that, from the banks, producers get 
 loans whereby to effect increased production and employ- 
 ment for labor ; but, as when on one side of the scale the 
 increased sum of money depreciates, and, on the other, 
 the prices of productions go up ; and as, when the imme- 
 diate producers and circulators of the enlarged amount of 
 money profit, it is at the expense of the community at 
 large, to whom the money is depreciated and commodities 
 made dearer ; as these are the facts, it is clear that the 
 paper currency effects the same forcing of production, for 
 the benefit of a limited number of producers, that is 
 effected by high tariffs; and, in* like manner, at the 
 expense of consumption. High tariffs raise the value of 
 certain commodities, and lower others proportionally. A 
 paper, when added to a specie currency, similarly raises 
 the value of certain commodities, and lowers another 
 money proportionally. 
 
 With the increase of paper money in a country, the 
 specie circulation will diminish. All the saving and 
 hoarding will be of the specie, as most persons prefer 
 
102 INDUSTRIAL EXCHANGES. 
 
 keeping the hard to the paper money, to which more or 
 less of suspicion always attaches in the minds of the 
 people, who will use it as currency in all their necessary 
 payments. With the increase of paper money, the amount 
 of specie contained in a country will be diminished. The 
 addition it makes to the currency, raising prices and 
 causing enlarged importations, will carry off the specie as 
 a paying commodity. This inequality of imports and 
 exports will soon, however, become equalized under the 
 equilibrating laws of trade ; but, in consequence of the 
 introduction of this third element of paper money, it will 
 not be until the specie shall have been exported to an 
 extent that will reduce the sum of money that created the 
 high prices by as much as the amount of excess which 
 caused the rise, leaving the same amount of money in the 
 country that there was before the creation of the paper 
 money. The difference will then be, that the money will 
 not, as before, be all specie, but one half specie and one 
 half paper, supposing that to have been the proportion 
 originally borne by the paper creation to existing specie. 
 Just to the amount of the paper issue, the specie that before 
 was held in the country as a circulating medium will 
 have been exported as a commodity in exchange for other 
 commodities, and paper will be retained as currency in its 
 place. The production of the paper leaves so much of 
 specie to go out as a product, while it glides into the place 
 before occupied by the specie as currency. 
 
 And hence it is that much reason may appear to exist 
 for the creation of a widely-diffused paper currency, that 
 through the creation of a fabric of credit, which, in turn, 
 is used as capital, shall effect production. This has been 
 already answered ; but again inquire if the process does 
 
CURRENCY DERANGEMENT. 103 
 
 so securely, permanently, and progressively ! I have 
 supposed it to extend to one-half the original sum of cur- 
 rency, which was presumed to have been entirely of 
 specie. If it stops there, the creation of paper leaves an 
 equivalent sum of specie as a redeeming basis, and, 
 admitting the improbable supposition of no failure or fraud 
 in producers, there is security. But there is, at the same 
 time, no permanence or progression, for it must cease 
 when half the specie is exported ; and the volume of 
 currency not being increased, to obtain progressive 
 improvement requires an amount of paper currency 
 exceeding the sum of specie retained, and one, too, that 
 shall be equal in actual value to the nominal value it 
 expresses. 
 
 When the issue of paper money, in order, by credit, to 
 increase capital, does not stop at an equal amount, but 
 exceeds the sum of specie retained, security is endangered 
 in a ratio with the excess of paper currency. When it 
 equals or exceeds the entire sum of gold originally used as 
 currency, only the value of the specie actually exported is 
 supplied by the paper creation, not a specie value equal to 
 the nominal amount of paper issued ; and all of the issue 
 over and above the value of the specie exported, merely sup- 
 plies the place of the depreciation. Thus, if, 80,000,000 
 of gold existed in the country as currency, and 50,000,000 
 is exported, in consequence of the creation of 40,000,000 
 of paper money, supposing security and no depreciation, 
 the first proposition is exhibited, and no gain is perceptible 
 in amount of money or production. Then, if an increase 
 of eighty swells the paper creation to 120,000,000, the 
 whole of the nominal 120 millions, and whatever fraction 
 of the previous 40,000,000 of gold remains as its basis, 
 
104 INDUSTRIAL EXCHANGES. 
 
 are together of no more value than the original 80 mil- 
 lions of gold currency were before any issue of paper was 
 made. 
 
 Then, there being no additional actual value, will there 
 be, in fact, any permanent and progressive improvement 
 effected by this substitution of a large sum of paper for a 
 smaller one of specie currency ? It is not probable that, 
 after the first moment, when the markets, taken by surprise, 
 as it were, will not have lifted prices, the increase of cur- 
 rency will stimulate industry to the accomplishment of 
 any effective enlarged production. With the increase of 
 money comes, it is true, a rise of prices. But the rise is 
 general ; and all the outgoes for material, labor, &c. &c., 
 of all producers rise with their incomings, and they re- 
 ceive no more remuneration than before. They soon un- 
 derstand this, and then there will be no more enterprise 
 awakened, and capital called into action than previously, 
 under a smaller volume of currency. 
 
 We may learn, by past experience, that, on the other 
 hand, a cessation in the increase of the paper currency of 
 corporate bodies, even a degree of diminution, does not 
 effect a diminution of production. In 1837, the bank cir- 
 culation of the State of New York was $24,198,000 ; in 
 1848 it was $23,047,826. Yet New York has not stood 
 still during that period of eleven years ; industrially she 
 has progressed with a sufficient degree of rapidity to 
 satisfy the desires of any reasonable amount of enterprise. 
 The theory of increased production being set aside, 
 there may be another reason advanced for the existence of 
 paper currency. The creation of a value for commodi- 
 ties, or rather the regulation of value by government, may 
 be said to be desirable, provided enough specie be retained 
 
CURRENCY DERANGEMENT. 105 
 
 for foreign balances. Besides the absolute value of specie 
 created by its cost of production, is the relative value of 
 supply and demand. And this variable of demand in money 
 is effecting a constant change in the value of commodities, 
 or rather is the effect of variations in the supply of and de- 
 mand for money and commodities ; therefore, if the cur- 
 rency possesses no other value but the relative, it will be 
 better adapted to sliding backward and forward upon the 
 scale, with the supply and demand of commodities repre- 
 sented by it, than if incumbered with the absolute, which 
 imparts to specie the fixidity of value that prevents such 
 accommodation to circumstances of trade or speculation. 
 Hence, if the banks were so organized and conducted that 
 their issues would be safe, and would, when specie is 
 scarce and high in the country, emit a sound circulation, 
 that should supply just enough currency to counteract the 
 deficiency of specie, and prevent the value of money from 
 rising ; and, on the other hand, when specie was pouring 
 into the country, and money plenty, should contract their 
 issues, to prevent money from cheapening, thus, by their 
 double action, preventing the rise and fall of prices, the 
 fixidity of specie as a currency might be advantageously 
 accommodated to the variations in demand and supply of 
 commodities. Likewise when money is plenty, from the 
 prevalence of credit, under the speculative spirit of enter- 
 prise, when, to a great extent, individual credit supersedes 
 the place of money, bank paper issues might prevent the 
 undue rise of property, and fall of money ; and the ex- 
 pansion, on the other hand, might ease the market, when a 
 wish to realize, and the necessity for means to meet en- 
 gagements, had produced a diminution of individual credit. 
 Those who believed such to be the true theory, would 
 5* 
 
106 INDUSTRIAL EXCHANGES. 
 
 perhaps qualify their assent to it by urging the necessity 
 for retaining a sufficiency of specie, to secure the stability 
 of the currency ; and further urge the imposition of 
 guards and checks innumerable, to prevent, if possible, 
 the recurrence of the scenes of fraud, of mismanagement, 
 and consequent losses, . destruction, and attendant evils, 
 which have indelibly stained the pages of banking history, 
 with the sanguinary and dismally infamous marks of rouge 
 et noir. 
 
 Or, discarding the general banking by issue, they 
 would needs refer the creating and administration of such 
 a paper currency, entirely to the government, federal or 
 imperial, and seek some method of National banking, that 
 should escape the fate of the French assignats. When 
 some such method shall have been prepared and practised 
 successfully in some quarter where trade and speculation 
 abound, or when an unobjectionable plan may be presented, 
 we will consider it more fully than we shall do here. 
 Reference will be again made to it, however, in this 
 chapter. 
 
 What are the facts of the past that indicate the part 
 taken by currency in the inflations and contractions of 
 markets ? Has the quantity of paper currency slidden back- 
 ward and forward with the supply and demand of com- 
 modities ? In other words, has the currency expanded 
 and contracted inversely with credit ? The complaints 
 frequently heard from those men of business, who at- 
 tribute their failures to a contrary course having been 
 pursued by the late United States' Bank, furnish a negative 
 reply so emphatic, that a National Bank has been almost 
 universally denominated an exploded idea. Banks in 
 general seem heretofore to have glided with the current 
 
CURRENCY DERANGEMENT. 107 
 
 rather than stemmed it. As well as one can see, experi- 
 ence has taught that all the theories heretofore practised 
 have been wrong, and we feel cautious about casting away 
 the absolute value, when, in all the mischief wrought by 
 relative value, it appears as though, had it not been for the 
 leaven of absolute, the evil might have been greater. 
 
 It is capital that causes production it is the opera- 
 tion of buying and selling that creates demand for money 
 it is profits that cause interest. The buying and selling 
 call capital into use, a necessity for which use on capital's 
 part urges it to the buying and selling either in trade, that 
 exchanges commodities, or in production, that buys labor 
 and sells the product. The profits yielded, call for more 
 money, and pay interest. Interest, therefore, is secondary 
 to profits. The original movement is that of buying and 
 selling ; the bank loans upon interest succeed upon this. 
 Therefore it is that the past has furthermore taught us, 
 that although much mischief is owing to the character of 
 the currency though its inflations aid in keeping up a 
 spirit of speculation and although, under the cramping 
 effects of restriction upon trade, any currency is more 
 sensitive than under freedom of exchange ; the broad fact 
 is, that it is not to currency we are to attribute the origin of 
 those trading, railway, and other speculations, that result 
 in crises. They probably originate, in most cases, in the 
 accumulations of capital, that have succeeded upon a term 
 of good production, causing capitalists to become dissatis- 
 fied with the comparatively low rate of interest, ruling 
 under a plethoric, easy, jog-trot state of business. Enter- 
 prise seeks to invest in new sources of production, in trad- 
 ing operations, or in large and costly improvements, that 
 shall become fixed capital, and pay a higher rate of inter 
 
108 INDUSTRIAL EXCHANGES. 
 
 est upon the investment. The propensity to follow where 
 others lead, then comes into exercise. Lured by the pros- 
 pect of new avenues for investment, opening to view and 
 promising rich returns of profits, the circulating capital is, 
 much of it, drawn from the channels of business, and fixed 
 with the surplus capital, in an inconvertible form (some- 
 times the growing demands of business call for improve- 
 ments, like railways that sink much capital) ; the capital 
 getting short, credit is resorted to for fuel to feed the fire 
 of speculative fever. 
 
 It is at this stage that paper currency inflations, caused 
 by acquiescing in the demand for money and credit, step 
 in and place the capital of credit in a form accessible by 
 all, divisible to any extent, and representing all species of 
 property, in all men's hands, to aggravate the mischief. 
 Even more, not waiting for a demand, banks offer their 
 currency for use. It is well known that in times of 
 speculation bank directors have gone round with the 
 question and offer, " Have you no notes to throw in 
 to-day ? We are ready to discount." In a country like 
 this, where almost every man has some property, and 
 therefore credit, such a state of things causes the specula- 
 tive mania to spread like a conflagration in a wooden city, 
 reaching and engulphing all far and near. Much is 
 invested in the newly promising branches of trade and 
 production ; and credit is added here too, until it becomes 
 exhausted in all directions, because capitalists have begun 
 to think it time to realize. Then people begin to look 
 about them for means with which to meet obligations 
 swelled to an enormous extent, because people would be 
 as enterprising as their neighbors. But there is not 
 money enough. A distrust of the value of every kind of 
 
CURRENCY DERANGEMENT. 109 
 
 property, but money, causes every one to seek to obtain it. 
 The causes named are sometimes aided by large invest- 
 ments in imaginary cities, parcelled out upon paper to 
 eager speculators. All combined, and sometimes either 
 of them, are sufficient to absorb the circulating capital 
 previously employed in business, and run everybody into 
 debt beyond their capital to the extent of their credit. 
 Capital has been much of it spent in unproductive invest- 
 ments. During the rise of speculation the rapidity with 
 which money changed hands made a given amount much 
 more effective ; then, also, with money easy, credit was 
 admitted to be used as capital ; but now, during the fall, 
 the suspended circulation caused by panics makes a given 
 amount do but little service ; and when money is felt to be 
 scarce, credit is thrown out. Interest is high enough now 
 for capitalists, but there are fewer of them, and those who 
 have money are cautious when everybody's credit is 
 gone. There is no money to be had by those who are 
 looking about them for means to meet the excessive 
 liabilities incurred in speculating, and but little for those 
 who wish to continue the productive investments even in 
 old jog-trot avenues of business ; and production is, for a 
 time, much diminished from the standard in existence 
 before the speculation commenced. People will follow 
 their neighbors ; the imitativeness is now carrying 
 thousands to California to dig gold. These fits always 
 take the name of fevers, because of their contagious 
 nature. 
 
 Such is a brief history of the rise, progress, and fall of 
 the speculative mania, as it has exhibited itself at different 
 times. But the rains descend to distribute their fertilizing 
 effects, and the earth yields of its produce, and capital 
 
110 INDUSTRIAL EXCHANGES. 
 
 again accumulates, slowly at first, then more rapidly. 
 We must believe that while man accumulates capital and 
 continues to possess the quality of enterprise, speculative 
 fluctuations in business, and their effects of gains and 
 losses, will not cease to afflict him. All the governmental 
 tinkering will be, as it has heretofore proved to be, mere 
 vagaries of quack politicians that leave but one result 
 the old condition of things joined to a universal sentiment 
 that that plan was not the right one. Is it not better to 
 leave all the movements of trade and currency to them- 
 selves ; to leave all fortune making, all accumulations of 
 capital, whether of property or credit, to the exertions of 
 individual members of the state, gentlemen tinkers of the 
 Legislature ? By protecting in various ways you only 
 promote those inequalities of accumulation that make two 
 classes, one eager to lend and the other anxious to borrow. 
 Let individuals furnish credit to others if they please, it is 
 their own business ; there will be none the less failures 
 because government so far endorses their notes as to 
 charter their issue. The earth is productive, and real 
 capital and private credit are rapidly increasing without 
 your assistance. It is the negative assistance of laissez 
 faire, not the active, that is efficient. Two causes of 
 fluctuations already exist ; you only add other causes to 
 them. A high tariff to prevent importations, forsooth ! 
 
 I have said that the equilibrating laws of trade will 
 equalize the imports and exports ; but the continuation of 
 paper issues will retard, even until the period of collapse 
 and general bankruptcy, the regulation of international 
 exchanges, which is to be accomplished by a fall in prices 
 of imported commodities, because, as long as banks 
 continue to issue, money will be plenty and prices high 
 
CALIFORNIA GOLD. Ill 
 
 in the country where paper is produced. If interest 
 would rise, gold might be retained in the country for 
 investment at the high rates ; but interest will be low as 
 long as the issues continue. The low interest and high 
 prices combine to accelerate the progress of the excessive 
 action in all departments of business, and the realization of 
 a commercial crisis. 
 
 The recent development of an apparently inexhaustible 
 quantity of gold in California has been compared to a 
 large issue of paper money. The supply is expected to 
 cheapen money and inflate prices here until overwhelming 
 quantities of foreign commodities shall crush our industrial 
 enterprises, when a reaction will find us deprived of the 
 ability to produce, and leave trade the prey of bankruptcy. 
 Such reasoning is entirely chimerical, and the cases will 
 not be found analogous in their effects. The gold, unlike 
 a home-produced paper currency, possessing a universal 
 value, governed by cost of production, will flow oat of the 
 country as it is produced, and distribute itself among all 
 nations, occupying universally the same relative value to 
 commodities that it does now, subject to such general 
 depreciation in its value as may be effected by the amount 
 of addition to supply. Distributed as the gold will be 
 throughout the world, such additional supply must be 
 immense in order to effect even a small general depre- 
 ciation of the value of gold currency and counter appre- 
 ciation in prices of commodities. 
 
 The value of gold and silver now in the world is 
 estimated by Mr. Senior at 2,000 millions of pounds 
 sterling. What was added to it from all sources previous 
 to the California development, including the $15,000,000 
 annually produced by the rich mines of the Ural (esti- 
 
112 INDUSTRIAL EXCHANGES. 
 
 mated at the extremely large production of 1846, but 
 which for 27 years had been only $125,000,000), has 
 been only sufficient to supply the deficit the precious 
 metals are continually undergoing from loss, wear, and 
 use in the arts. The per centage of increase in these 
 three influences would increase with the addition to the 
 amount of the gold produced ; and whenever a sensible 
 depreciation in its value as coin began to be felt, the per 
 centage of increase in that portion used in manufacturing 
 articles for luxury and use would greatly enlarge itself, 
 keeping the value of coin at a high standard, but little, if 
 any, below the present point. 
 
 The annual loss referred to has been estimated at one- 
 half of one per cent., which, upon the gross amount of the 
 precious metals in possession, amounts to $50,000,000. 
 If the labor of 16,000 men was employed in procuring afti 
 average amount to each man of ten dollars each per day 
 in perpetuity, the produce would only add as much to the 
 quantity as the annual loss now sustained. Such a pro- 
 duct is altogether improbable, rich as the deposits promise 
 to be ; and if it were realized, the fact of their great pro- 
 ductiveness would draw off from other regions less produc- 
 tive the labor now expended there, in this manner, aided 
 by the per centage of increase in manufactures, still sub- 
 tracting from the general increase ; also changing the 
 locality of production. In view of the principles and 
 circumstances named, the realized addition of what is 
 probably to be less than one-half of one per cent., will be 
 too insignificant to affect materially the value of the pre- 
 cious metals. We must also recollect that a stimulus to 
 productive industry will be called forth by this specie 
 product in its demand for exchangeables ; and the general 
 
CURRENCY DERANGEMENT. 113 
 
 development and increase of production, population, and 
 trade throughout the world will eventuate the absorption 
 of the added amount of coin in the enlarging trade. 
 
 From what has preceded, we determine that the currency 
 problem resolves itself into the complex question of kind 
 and volume. Of the kind, specie only appears to be secure. 
 Supposing that kind adopted, the proposition presents itself 
 to increase credit by enlarging the volume of currency. 
 Also the volume must possess expansile and contractile 
 powers, to meet the corresponding movement in demand. 
 These advantages in posse are a strong temptation, but 
 they involve a change of kind. Specie and volume are 
 incompatible. On one hand security must be sacrificed ; 
 on the other, expansion of credit. The incompatibility of 
 maintaining the exclusive specie currency with the ex- 
 panded credit, has brought about the mixed currency, 
 involving a condition of partial security through the 
 retention of a portion of specie, and of partial expansion 
 through the adoption of a limited volume. 
 
 Is the trans-specie volume indispensable ? A volume 
 loaded with the three conditions of an injuriously exercised 
 expansile and contractile power; with a depreciation 
 progressing with its increase that causes reduced value to 
 neutralize additional nominal amount ; and with its fearful 
 insecurity. 
 
 If the condition of a large proportion of banking institu- 
 tions be regarded at any given point of time, it is certain 
 to excite a sense of insecurity. Four hundred millions of 
 dollars is the estimated amount of loss sustained by the 
 people of the United States within the last twenty years, 
 caused by the explosions of paper-issuing banks. Could 
 the balance be fairly struck between the gains and losses 
 
114 INDUSTRIAL EXCHANGES. 
 
 from the use of paper money, it is probable the latter 
 would preponderate. 
 
 For the purpose of holding the proper progress of credit 
 at a pace in keeping with the permanent advance of the 
 credit basis, in other words, with the growth of production 
 and accumulation of property, a successful conservation 
 has not been and could not be uniformly practised under 
 existing systems of banking. 
 
 The credits that have been called into action in effecting 
 the great canal, railway, and other improvements that 
 become fixed capital, are not bank credits. 
 
 Applying the test of consumption to the past, we are 
 forcibly reminded of the fable of the tortoise and the hare, 
 and it suggests caution for the future, whilst forcing a 
 conviction that security and permanence are of more 
 importance than expanded volume ; for whatever the 
 volume, society will adapt itself to it. 
 
 For the future, probably it would be a work of super- 
 erogation to hope that the march of knowledge may render 
 the existence of a limited amount of chartered paper 
 money compatible with gain to the community. The pro- 
 gress of economic intelligence will probably dispense with 
 its use. 
 
 The sanguine may anticipate a future improvement by 
 so far prohibiting the production of paper money as to 
 confine the issue to notes of large denominations. This 
 change would be so far beneficial as it prevented the 
 circulation of anything but specie among the poorer class 
 of the community, who have heretofore been so largely the 
 losers by small notes ; but the ultimate loss would as usual 
 fall upon labor, and it would not prevent the speculative 
 effects, depreciation of money, and the general insecurity 
 
CURRENCY DERANGEMENT. 115 
 
 of banking, by issue and deposit. When by issue, there 
 is still the fraud of a note professing to represent a value 
 that does not in fact exist. 
 
 This factitious representation being always committed 
 when more bills are issued as representing specie than 
 there is actually specie in deposit, the mere nominal con- 
 vertibility is fraudulent. 
 
 Even supposing the banks not to possess the issue, but 
 only the deposit power, there is danger of their loaning 
 deposits to the extent of an undue expansion of credit, 
 and thereby affording an encouragement to speculation 
 productive of the usual deplorable effects. 
 
 With these evils is involved a sacrifice of the interests 
 of depositors, through the subsequent inability of the banks 
 to refund the deposits unduly loaned under strong temp- 
 tations of a high rate of interest, of personal influences, or 
 from other causes. 
 
 In respect of this discount and deposit department of 
 banking institutions, regarding banks as reservoirs for 
 receiving and distributing money ; although sound credit 
 is a substitute between individuals for capital as a producing 
 agent, the statistical facts teach us that the exchange of 
 products has been greatest when bank credits were least. 
 Individual credit subserves the purposes of a healthy 
 business, without calling to its aid that of chartered 
 companies. In 1842 while the bank loans at New Orleans 
 were in round numbers 48,000,000, the value of produce 
 received at, and the value exported abroad from that city, 
 were together 73,000,000 ; a proportion of less than two 
 of business exchanges to one of banking facility in a year 
 of large loans. In 1848, when the loans were 6,000,000, 
 the value of produce was 119,000,000; a proportion of 
 
116 INDUSTRIAL EXCHANGES. 
 
 nearly twenty to one in a year of small loans. In four of 
 the States whence the produce was sent to New Orleans, 
 the bank loans in 1842 amounted to 111,000,000, and in 
 1848 to 8,000,000. As exchange is the effect of demand 
 and supply operating mutually by markets calling for 
 products, and products seeking markets, it is just to 
 conclude that there has been an inordinate degree of 
 importance attached to the credits furnished by banks, 
 and that these credits are a less efficient agent of traffic 
 than is generally supposed. 
 
 We may extend the subject for the purpose of con- 
 sidering its connexion with state and government banking, 
 and finding a more complete answer to the indispensability 
 of volume. 
 
 This is an era when the feudality of arms has sub- 
 mitted to the feudality of capital, and, therefore, in a 
 Republican government it is most in ^consonance with the 
 spirit of its institutions, and safest, to place checks upon 
 that domination of capital over labor which a paper money 
 creating power is so well calculated to effect. A means 
 consistent with the governing principle of not over-govern- 
 ing, is, for the government to collect and disburse its own 
 revenues in specie, leaving the credit-creating power of 
 paper issues upon specie basis, to the democracies of the 
 several states, whose action in the premises is safest when 
 it measures the issue by the limit of convertibility ; and 
 this is equivalent to a negation upon all issues, inasmuch 
 as it is better to circulate the specie than to substilute for it 
 an equal amount of paper, losing security and gaining 
 nothing. The conclusion is, therefore, against the State 
 democracies, as well as the Federal government, in any- 
 wise lending their assistance to the production of paper 
 
CURRENCY DERANGEMENT. 117 
 
 money. Not even so far as, in seeking a system that may 
 admit of volume, of credit capital, without sacrificing 
 security, they permit to be used, as a basis for an issue of 
 dollar for dollar, property other than specie, as under the 
 general banking law of the State of New York. By the 
 provisions of this law, state stocks and mortgages are per- 
 mitted to be deposited by any person with the Comptroller, 
 who issues the bills. 
 
 Under this system abuses have been practised, by means 
 of purchasing with the bills additional stock, and upon the 
 addition getting a new issue of bills ; in this manner, 
 making credit to reproduce itself in arithmetical pro- 
 gression, instead of effecting a production of real capital ; 
 meanwhile enriching the money producer by means of a 
 broad series of issues with only a small basis of real value. 
 Of course the result is a breaking down, and a widely spread 
 loss to the consumers, the bill holders. 
 
 The issue of paper money upon a specie, or property 
 basis, subject to partial, or entire redemption, furnishes of 
 itself a large increase of credit. When another revolution 
 of the wheel brings a further issue of paper money based 
 solely upon credit, and a more widely spread series of 
 credit is begotten of the first, the interests of the com- 
 munity are seriously jeopardized. Of this nature are the 
 fiscal schemes which are occasionally put forward for the 
 consideration of the general government, as panaceas for 
 all the ills of trade, and which have a tendency to the 
 centralization that is effected by a union of capital and 
 state, wherein the feudality of capital is prone to dominate 
 over all other interests of the community. 
 
 The creation of money upon a credit basis is no new 
 device. But the bits of paper being dependent upon the 
 
118 INDUSTRIAL EXCHANGES. 
 
 ipse dixit of government for their value, are deprived of the 
 advantage of the governing value of all, cost of production. 
 The production of paper money upon the basis of state 
 credit, or debt which has a basis of fixed capital in 
 the internal improvements by individuals or companies 
 authorized to do so, has been found to work badly. It has 
 been infinitely more dangerous when governments have 
 directly issued a currency based upon their own credit, 
 either through the agency of 'their executive officers, or 
 conjoined with a banking association. The history of the 
 French Assignats, of the Austrian issues in 1812, and of 
 the United States Bank, furnish testimony upon these 
 points. It is known that the British government counter- 
 fited the assignats in great quantities, and caused them to 
 be put into circulation in France during the first 'revolution 
 in that country, effecting a destruction of confidence, and 
 accelerating the depreciation by which tens of thousands 
 were robbed of their possessions. 
 
 I have referred to the system of government, collecting 
 and disbursing its revenues in specie. Much complaint 
 has been made of the stringent effects, and it may be con- 
 sidered a beneficial provision to modify its action by the 
 admission of a few millions of Treasury Notes, now out- 
 standing as part of the existing national debt, into perma- 
 nent circulation through the receipts and disbursements of 
 government dues and payments, as a means of preventing 
 the unwieldy transmission of specie in exchanges, and the 
 accumulation of large sums in the treasury of the general 
 government, thereby affording relief to the money market 
 by permitting its flow in the channels of business. The 
 stringency has been beneficial, and whatever advantages 
 such permission might confer, there would be great proba- 
 
CURRENCY DERANGEMENT. 119 
 
 bility of their being neutralized by the letting up of that 
 check upon bank expansion, which is the effect of govern- 
 ment holding the specie. Also, the principle once admit- 
 ted, the original sum might take the form of a nucleus, and 
 such " amendments" and changes effected as would gra- 
 dually run it into an engine potent for evil. With a public 
 debt existing, such modification of the specie principle 
 would doubtless be less dangerous than the practice of the 
 general receipt and disbursement by government, of bank 
 issues. But the public debt must, in time, be extinguished, 
 and there is something ridiculous in a debt being kept up for 
 furnishing a representative in which government may col- 
 lect its dues. There is reason to doubt the necessity of 
 such a treasury note addition to the money of the coun- 
 try for the purposes of business relief. On a proper ex- 
 amination of the subject, it will be seen, that on a much more 
 extended scale than the previously cited case of the busi- 
 ness at New Orleans, the specie retained in this and other 
 countries has been greater, that is to say, the amount cir- 
 culated for purposes of trade, has been less in years of 
 large exchange, than in years of small.* Hence it would 
 
 * "England. France. N.York. Total specie in banks. 
 
 "Jan. 1842 26,010,000 41,230,000 4,074,601 71,314,601 
 
 1843 54,665,000 43.182,000 6,174,317 104,021,317 
 
 1844 81,610,000 52,600,220 10,206,542 144,416,762 
 
 1845 70,920,000 48,965,048 6,893,236 126,778,284 
 
 1846 65,172,200 47,250,100 8,361,383 120,783,683 
 
 1847 72,130,240 14,913,967 9,191,254 96,235,461 
 
 1848 65,371,820 36,182,734 6,751,338 108,305,892 
 
 " The largest amount held by all the banks was in 1844, and that was 
 a year of general prosperity. The amount of specie then in the insti- 
 tutions being large, a less quantity was of course in circulation. In 
 October, 1847, however, after the disastrous failures and loss of confi- 
 dence in England, specie became in demand for use, and it left the 
 bank vaults." DeBow's Commercial Review. 
 
120 INDUSTRIAL EXCHANGES. 
 
 appear, that there is much specie lying out of use, in sea- 
 sons of large business, and that enough is in existence for 
 the necessary purposes of settling balances of trade. And, 
 for 'the purpose of facilitating the transmission of funds, 
 it appears that the use of individual credits and means is 
 sufficient. 
 
 In fact, it is by means of individual credits that business 
 is principally carried on, the proportion of not only specie 
 but of any money in use being small compared with the 
 money of account, promissory notes, and bills of exchange, 
 that enter into the transactions of trade, besides the large 
 proportion of barter that enters into the trade of individuals 
 as it constitutes that of nations. When the individual 
 credit diminishes and exchanges are smaller, the specie is 
 drawn out into action, and, as real money, takes the place, 
 as far as it goes, of the money of account, supplying the 
 place of the diminution. This it goes far enough to do 
 if business has been sound and credit is not much im- 
 paired ; but if it has been speculative and enlarged by 
 banking credits, the amount of specie has been found to 
 be insufficient to fill the vacuum created by the withdrawal 
 of a large amount of credit. Under these circumstances 
 an amount of paper money to act in conjunction with the 
 specie as real money is wanted to fill up the vacuum. 
 But how to get it ? Unfortunately banks, at such times, 
 when interest is high, contract instead of expanding their 
 issues ; they must also be cautious, then, when general 
 credit is low, how they expend their capital, lest they be 
 shipwrecked ! Would a national bank, so strong as to be 
 able to lend, at such times, on property security, at a low 
 rate of interest, and meet the exigencies of the case, be 
 desirable ? This country will never invest the control of 
 
FREE BANKING. 121 
 
 its capital in the State. The resource seems to be to 
 keep up the stringent specie checks upon expansions, in 
 the hope that the knowledge of how small is the volume in 
 existence for filling a vacuum will prevent the conduct 
 that leads to the creation of a great one. How far it will 
 do so is to be estimated from what has been previously 
 stated as the result of past experience. It limits the 
 extent of the vacuum, though it will not set aside the 
 causes which originally operate in its creation. 
 
 But the present mixed currency could not be rapidly 
 reduced to one solely of specie without loss. The appre- 
 ciation in the value of money would involve the stoppage 
 of industrial enterprises in progress, raise the cost of all 
 production, and in all respects operate in like manner as 
 does the contraction following a speculative inflation, 
 which is no more or less than the effect of an appreciation 
 of money. Depreciation of money, on the other hand, 
 involves a loss in the returns coming to creditors for all 
 debts due to them, also in all coming or to come to fund- 
 holders for previous investments, to all dependent upon 
 fixed incomes and not upon profits. In the appreciation 
 and depreciation of money lies the problem of the cur- 
 rency. Is anything left for us to do but this ? leaving 
 existing charters alone to die out gradually, to allow the 
 standard of legal tender to remain as it is in gold and 
 silver, and permit individual credit to oscillate about that 
 centre under the influence of the opposing forces of con- 
 fidence and distrust acting between individuals, who will 
 be abundantly able to protect themselves, the non-inter- 
 ference of legislation not guaranteeing monopolies, and 
 permitting/ree trade in banking. 
 
 When the reduction, supposing it to be made had, 
 6 
 
122 INDUSTRIAL EXCHANGES. 
 
 come to an end, and no money existed in the country but 
 gold and silver, then, if all credit was abolished (the 
 hypothesis is admissible), and the value of all property 
 was reduced to the sum of specie, appreciation would con- 
 tinue. With the increase of property by production the 
 value of money would rise, whilst that of commodities and 
 property would cheapen. There would not necessarily 
 be any check to production ; the money, when business 
 required, would rapidly change hands, and would tell 
 largely in proportion to its amount, the receipts at any 
 given time of the same amount of gold or silver being 
 equivalent to what would have been the receipt of a 
 greater amount antecedently, and it purchasing more 
 commodities, all the incentives to its acquisition would 
 exist, and the enlarged return to it ofcommodities and property 
 would furnish means for renewed increase of production. 
 There would be no necessity for the currency to expand 
 with the increase of production or of business. Once 
 settled upon the basis of specie with no expansive currency 
 nor credit, and from that point onward the appreciation in 
 the value of the currency would not cause any losses nor 
 diminish production. Even then, credit, so far as indi- 
 viduals chose to accord it to each other, would needs 
 exist to oscillate as before said, and we arrive again at the 
 free trade conclusion announced at the close of the last 
 paragraph. The currency being of specie, and assuming 
 the amount of paper to be less under the free than the 
 monopoly system, prices would be low, and gold and silver 
 would flow into the country from all others with which it 
 traded, and who substituted a paper currency valuable 
 only at home for one of specie. 
 
 With free trade in banking the amount of paper would 
 
FREE BANKING. 123 
 
 be less, inasmuch as in the absence of any chartered 
 guarantee, individuals being watchful to protect them- 
 selves, their doubts would come into play where evidence 
 of tangible value did not exist. There would at least be 
 no charter to lull their watchfulness into security under 
 the false impression that the State was taking care of their 
 interests ; and that, therefore, the institution's promises 
 must be good, else it would not have been chartered to 
 make the money, and could not have a show of responsible 
 names figuring at the tail of a million of nominal capital. 
 Less paper would be circulated, as " shinplasters" would 
 fall into general- disrepute, and their gradual disappear- 
 ance followed by a circulation entirely of specie, 
 individual credit, then as now furnishing its bills of 
 exchange, &c., would probably be the result of free 
 banking. 
 
 The recent development of gold in California furnishes a 
 prospect for the supply necessary to cover the subtraction 
 from circulation of much of the paper now in use throughout 
 the United States ; provided the establishment of a mint for 
 drawing the metal into our coinage secures the gold to 
 the home circulation, that is to say, so far as the existing 
 custom of trade regulating the quantum of circulating 
 medium, would require its appropriation to domestic use. 
 If paper money is retained as such quantum, of course the 
 gold will flow out to distribute itself among the nations of 
 the world. Of about $200,000,000 currency employed 
 in the United States, probably $125,000,000 is composed 
 of paper, and $75,000,000 of specie. The requisite 
 supply for taking the place of the paper may be obtained 
 from present appearances during the next decade, and its 
 substitution through the joint action of coinage by our 
 
 : 
 
124 INDUSTRIAL EXCHANGES. 
 
 mints, and the extinguishment of paper, is desirable, so far 
 at least as the expiration of bank charters and the 
 withholding from granting new ones render it practicable. 
 The new-born States upon the Pacific will scarcely 
 practise the gratuitous folly of getting up a paper currency 
 when exporting the precious metals. 
 
 The free system appears to be the only alternative, 
 unless a currency be adopted that shall be preferred, 
 because it does not possess the fixed character of gold, the 
 additions to which in long terms of years about equal 
 the reduction from quantity by wear, loss, and manu- 
 factured consumption. Such a currency, sought for its 
 singleness of quality, the relative value, must not be based 
 upon specie, lest the influx and efflux of the basis to meet 
 the requirements of trade in adjusting temporary balances 
 affect its security, value, and action. The domestic 
 money would need to be severed entirely from the 
 exportable commodity of money, no connexion existing 
 between them, and the principle of Lycurgus put in 
 practice which prohibited the use of gold and silver as 
 money, substituting leather and iron, which had no 
 intrinsic value, compared with that they represented : 
 a principle recognised by Plato, who would have the coin 
 of " value among the members of the state, but no value 
 to the rest of the world." The quantity must needs be 
 immense, as a grand object of such a system is the 
 mobilization of all the property in a country ; it would be 
 capable of extension to represent, not only the annual 
 productions, say 2000 millions of dollars value ; but 
 also the fixed capital of land, dec., which bears a value 
 proportioned to the production, as principal does to 
 interest, extending the valuation to not less than ten fold, 
 
FREE BANKING. 125 
 
 say $20,000,000^00, now represented by one-hundredth 
 part that sum. 
 
 Not possessing the specie fixidity, it must increase in 
 quantity with the increase of production, with the capital 
 it represents. It must expand with the dulness, and con- 
 tract with the briskness of trade, because, when business 
 is slow, a large sum of money represents less than when 
 it changes hands frequently, in a lively traffic. It must 
 also paradoxically with the necessity for increased quan- 
 tity keeping pace with the production it represents ex- 
 pand with diminished, and contract with increased supply 
 of commodities ; for this currency is to be wealth that is 
 expected to supply the shortcomings of real wealth, and 
 keep all industrial enterprises of production, exchange, and 
 consumption at a regular pace, drilled by the strictest 
 financial tactics. Unless the money does these completely, 
 there is no gain to compensate for the change from the in- 
 deciduous and fixed character of specie, to and from which 
 values may advance and recede, as supplies of commodi- 
 ties increase or diminish, and which always possesses a 
 reliable and universally acknowledged value. No merely 
 human prescience or power could so manage a paper cur- 
 rency that it should exercise the necessary elastic functions 
 at all times, in exact pace with the movements of supply, 
 demand, and production. If such currency be furnished 
 by a number of chartered producers, it must be remem- 
 bered that fraud and insecurity have heretofore eluded all 
 efforts to bind them. If it be supplied by the government 
 from a national institution, the dangerous power placed in 
 the hands of government is entirely at variance with re- 
 publican principles, which would leave to the people the 
 control of the elements of production as well as the vital 
 
120 INDUSTRIAL EXCHANGES. 
 
 fluid whose circulation keeps these elements active. Yet by 
 the state only could such a system be originated and con- 
 trolled. 
 
 Recurring to the objection that free trade operates in- 
 juriously upon the currency, it has probably been made 
 sufficiently clear to the reader who has traced the subject 
 thus far, that free trade is international in its effects as 
 well as national, while currency is, in its operations, not 
 exclusively a national affair. The received dogma is that 
 the foreign trade is, to a certain extent, carried on inde- 
 pendently of the internal currency, provided there be a 
 sufficiency of specie always in the country to meet the re- 
 quirements of trade for its exportation as a commodity, to 
 supply the deficiency in other commodities. The cur- 
 rency at home being secure, and of such a character as to 
 involve the retention of a sufficiency of the representative 
 of value universally acknowledged as such throughout the 
 world, and not subject to the enlarged contractions con- 
 tingent upon a small diminution of the basis, the fluctuations 
 of trade will only slightly and temporarily derange it. 
 
 And in the above proviso lies the difficulty. Can the 
 currency be other than a commodity ? When the powers 
 of nature are daily developing themselves to break down 
 the barriers between nations, and the restrictions upon 
 trade are dissolving before the light of a brightening intel- 
 ligence, as the sun that climbs above the mountain tops 
 dissolves the fog of the valley, can a medium of circulation 
 that represents commodities in one country, that buys and 
 sells at home, be entirely severed from connexion with, 
 be distinct in character from that which will as a commo- 
 dity buy and sell of another country ? These requisites, 
 can they be dispensed with anywhere save in Plato's 
 
CURRENCY DERANGEMENT. 127 
 
 model republic, or More's Utopia ? True, I have said 
 that the balance of trade was non est, and that the traffic 
 of the world was products for products, not a buying with 
 and selling for specie ; but balances are speedily adjusted 
 by the equation of international exchanges, and specie is 
 a product ; hence the propositions do not conflict ; nor do 
 the conclusions. 
 
 The requisites appear to be embodied in specie only, 
 which, distributed by the movements of trade throughout 
 the world, accommodates itself to the natural wants of 
 traffic, as if it were purely a trade of barter.; and, as the 
 currency permeates all the avenues of the social system, 
 and is the medium of all transactions, small and great 
 alike, therefore, the internal currency is so far allied with 
 the external, that an unity of character appears to be 
 requisite in order to prevent derangement of its action 
 from the fluctuations of trade. 
 
 Hence we understand, that if the currency is properly 
 constituted, the fluctuations of international exchanges 
 will prove comparatively innoxious ; and that free trade 
 could co-operate injuriously with the currency beyond the 
 first effects, which would be limited, only when the latter 
 was in fault, a condition from which restricted trade 
 would not be exempt. So far from being exempt, a re- 
 stricted trade is fraught with injurious effects whether 
 the currency be sound or expansive. Currency being the 
 same under both the regimes of free trade and protection, 
 the fluctuations will be most frequent and injurious under 
 the latter. 
 
 Under the combined action of a high tariff, and of an 
 expansive paper currency, both raising the prices of com- 
 
128 INDUSTRIAL EXCHANGES. 
 
 modities in the country, the foreign manufacturer can 
 profitably bring in his productions, which low prices here 
 Would have kept out. Our productions being high, he 
 will not take them, but withdraws the specie from the 
 country. A diminution of the basis of the paper money 
 causes a contraction of the currency, wa^es fall, and 
 general distress prevails. 
 
 High tariffs and a paper currency have proved to be 
 alike anti-cheapening processes. 
 
 Effects have been confusedly charged upon free trade, 
 which were properly attributable to enterprise, accumula- 
 tion of capital, and an unsound currency ; and this allega- 
 tion has called forth what has here been advanced upon 
 the theory and practice of currency. 
 
 Restricted importations and checked exportations cripple 
 trade and reduce nations to a weakened condition, where 
 they are sensitive to a degree that excites every symptom 
 to a crisis. The advocates of protection favor its existence 
 in order to avoid the possible contingency of a currency 
 derangement, from a possible excess of importations over 
 exportations. At least with a sound currency and free 
 exchange there are no contractions and expansions, as a 
 result of a diminution of specie in a country, succeeding 
 such diminution, and creating the evil supposed to be the 
 immediate effect of the diminution of specie. 
 
 The immediate effects of the rising and falling in the 
 waves of trade are not prolonged with additions, as by an 
 expansive paper currency. These risings and fallings are 
 of themselves but as the first ripples that immediately sur- 
 round the spot where the stone is cast into the ocean ; but 
 the peculiar nature of this elastic currency carries the 
 
CURRENCY DERANGEMENT. 129 
 
 movement onward, spreading like the outermost far reach- 
 ing circles whose effects have been said by natural philo- 
 sophers to extend to the remotest depths and the most 
 distant margins of the invaded sea. 
 
 L.I B K A !< v 
 
 UNI V'KKS ITV OK 
 
 r.VIJFORNIA. 
 
XIV. 
 
 LABOR AND MATERIAL. 
 
 FAILING to establish other objections, Protection seeks to 
 resolve itself into this theory. That all commodities are 
 composed of labor and material, and in an article received, 
 if labor predominates, material must be small, and vice 
 versa : That the larger the proportion of labor to material, 
 the more profitable the exportation, whilst the greater the 
 proportion of material to labor, the more profitable the 
 importation. That wealth being the result of labor, it is 
 thence the interest of a nation to export of those com- 
 modities which are manufactured, and of small bulk in 
 proportion to the value, and import those which are the 
 reverse, containing much material. They would, there- 
 fore, place a high duty on manufactured articles, and a 
 low one on raw material. The conclusion to be drawn 
 from this is, that if a nation pursue a contrary course of 
 policy, it will soon have unemployed population, and 
 become poor in articles for consumption. 
 
 This is certainly, in appearance, very alarming, and, 
 
 provided the theory be correct, if we inhabitants of Young 
 
 America continue to send to England and France, heavy 
 
 . bales of cotton and barrels of flour, in exchange for their 
 
LABOR AND MATERIAL. 131 
 
 cloths, silks, and cutlery, we must soon be reduced to 
 starvation ! 
 
 But we will hope that the theory is entirely unfounded, 
 and a protective delusion. I do not believe that the 
 difference, as here assumed, between material and labor 
 exists. All things adapted to human wants, are impreg- 
 nated with human labor. In the bale of cotton of 500 
 pounds weight, sent to France in exchange for a pound of 
 lace, few would probably pretend that the labor expended 
 upon its planting, hoeing, picking, ginning, and com- 
 pressing, was less than that expended afterwards in 
 spinning, weaving, and making it into lace. So with 
 other articles of breadstufFs and tobacco ; and their veiy 
 bulk involves a large item of human labor in handling and 
 transportation. In the pound of lace, an amount of labor 
 probably not less great was expended in the production, 
 when we consider the shops, fuel, artisans, their feeding, 
 clothing, art-education, &c. 
 
 Commodities are not exchanged pound for pound, but 
 value for equal value, and as value is the product of labor, 
 there must be, in the articles exchanged, an equal amount 
 of labor invested. If the labor be equal, the remainder of 
 material must be equal, each to each, in the two articles 
 exchanged. Of a whole of 10 parts, if the labor in the 
 cotton bale be 6 parts, and in the cotton lace 6 parts, the 
 balance must be material, and be 4 parts in each. 
 
 And what is the material ? The gift of Providence to 
 the soil and climate of the country. Now apply the 
 touchstone of Free Trade, and what is the result ? That 
 each nation gives to all the others the natural gifts placed 
 at its disposition ; in exchanging gratuitously their natural 
 products, each pays for nothing but the labor. If there is 
 
132 INDUSTRIAL EXCHANGES. 
 
 less labor, as there must be, when, under the regime of free 
 exchange, all production finds its natural bias, there will be 
 less to pay, and all the world will be the gainers, and be 
 able to enjoy of all things a greater measure. 
 
 Agricultural production is capable in this country of a 
 wide expansion ; and the labor expended upon it need not 
 be less diligent, nor less fruitful of its own reward, than 
 that employed in manufactures. It has its own peculiar 
 advantages also. The same principle that would exclude 
 the importation of foreign manufactures, for which we ex- 
 change home agricultural products, would, if extended, for- 
 bid exportation of the agricultural products. Its advocates 
 might say, and have said, that such prohibition of the 
 exportation of home produced breadstufts and provisions, 
 would diminish the price, and make these prime neces- 
 saries plenty at home. But other commodities necessary 
 to consumption would rise in turn one set of values going 
 up, and another going down ; and this vicious policy would 
 have the effect of discouraging production,- as we have be- 
 fore seen. It is the increase of production we require. 
 Free trade firmly opposes all those absurd and suici- 
 dal measures that would diminish quantity and promote 
 scarcity. 
 
 For a moment suppose that an exchange of much 
 material against little labor could be made. Man labors 
 for the result of production in order to consume, and not 
 for love of labor in the abstract. The greater the result in 
 proportion to his labor, the more completely his require- 
 ments are met. If he give much labor in exchange for 
 few products, it would seem to be more consistent with the 
 loss claimed to be sustained, than when little labor is 
 given in exchange for a large product. 
 
XV 
 
 COMMERCE. 
 
 WHAT docs free trade effect ? It opens additional 
 markets for the disposition of the produce of man's labor. 
 And what stimulant to man's industry is more powerful 
 than the presentation of a market for the product of his 
 industry ? Whatever his occupation, his energies start 
 into effective exertion whenever a customer, an employer, 
 a client, or a patient, presents himself to take the product 
 of his labor and give return therefor. 
 
 Furnish a market, and labor and capital will make the 
 earth to yield up her riches ; bring forward competition, 
 and what she yields will be cheapened and the quality 
 improved. All this is simple as truth ever is, and would 
 be operating always for the benefit of humanity, if man 
 did not attempt and succeed but too well in governing too 
 much. 
 
 To supply those markets, to develope herself in this 
 medium of exchange, is the part of commerce. In all 
 ages it is Commerce who has gathered into her embrace 
 the riches of the world. All those nations who have 
 become the eminently great of their time, otherwise than 
 by barbarous force of arms, Tyre, Sidon, Corinth, Carthage, 
 
134 INDUSTRIAL EXCHANGES. 
 
 Venice, and Great Britain, have risen upon the pinions of 
 the white- winged bark of trade. 
 
 Trading with other countries under the system of free 
 trade that exists between a nation and its colonies, her 
 commerce enriched Tyre, the great city of the Phoenicians, 
 the merchant people of the ancient time. In the language 
 of the historian Heeren, " the ports of their colonies were 
 open to them, and they enjoyed for centuries all the valu- 
 able blessings which a peaceable and undisturbed com- 
 merce is wont to bestow." When " their numerous 
 fleets were scattered over the Indian and Atlantic Ocean, 
 and the Tyrean pennant waved at the same time on the 
 coasts of Britain and on the shores of Ceylon." In the 
 words of the inspired Hebrew, it is handed down to us 
 respecting the greatness and the wealth of Tyre : " By 
 thy great wisdom and by thy traffic, hast thou increased 
 thy riches. Thou hast been in Eden, the garden of God ; 
 every precious stone was thy covering, the sardius, topaz, 
 and the diamond, the beryl, the onyx, and the jasper, the 
 
 sapphire, the emerald, and the carbuncle, and gold." 
 
 Ezekiel xxviii. 5, 13. 
 
 By making themselves merely the carriers for effecting 
 exchanges between producing countries, nations have 
 become eminently great. How brilliant the prospects of 
 the United States appear when we reflect that she not only 
 commands a great and growing carrying trade, but is also 
 the producer of the great staples for the markets of the 
 world ! " Every precious stone" will yet be her " cover- 
 ing." And, what is of greater value, every intellectual 
 and moral blessing will be the light of her candle. May 
 it not be hidden beneath the bushel of Restriction ! 
 
 The people of a country may be unconscious of the 
 
COMMERCE. 135 
 
 existence or indifferent to the development of their capa- 
 cities and that of the country, when the opening of trade 
 with another country and its extension, through the with- 
 drawal of restriction, will rouse them to productive action, 
 that gives to the world an addition of wealth. Doctor 
 Franklin relates the circumstance of an importation from 
 Philadelphia into a country place of a new species of head- 
 dress ; that, upon its appearance one Sunday in church, 
 the admiration of the girls was so excited that they set to 
 work knitting stockings, which they sent to Philadelphia 
 for sale, and thereby supplied themselves with the desired 
 article. The world was doubtless the gainer to the 
 extent of those stockings, which would not otherwise have 
 been produced. 
 
 Says Mr. Mill, " Much as the collective industry of the 
 earth is likely to be increased in efficiency by the exten- 
 sion of science and of the industrial arts, a still more 
 active source of increased cheapness of production will be 
 found, probably, for some time to come, in the gradually 
 ^unfolding consequences of Free Trade, and in the increas- 
 ing scale on which emigration and colonization will be 
 carried on." 
 
 The saving to consumers, by importing what could be 
 produced cheaper elsewhere, is the gain effected by com- 
 merce. If existing protection be removed, the capital 
 before unprofitably invested in hothouses and other forcing 
 apparatus, will be withdrawn, and invested in shipping and 
 commerce. It then induces a migration of labor and 
 capital to regions adapted to the production of varieties 
 not so advantageously produced where they sojourned 
 before. 
 
 Commerce and its effects must improve the physique of 
 
136 INDUSTRIAL EXCHANGES. 
 
 the globe, drain waste lands and disease-engendering 
 marshes, and reclaim for smiling fields and health-breath- 
 ing meadows, whereon to produce new abundance, vast 
 regions, before exhaling poisonous miasmata. Abundance 
 will thus distribute labor, and labor distributed, effects ad- 
 ditional conquests of antagonists, creates abundance in new 
 directions, and, in distributing this new abundance, im- 
 proves anew the condition of mankind. 
 
 Isolated as our continent is, to restrict exchange is truly 
 to invade the sea, for it is the domain of our commerce. 
 The richly freighted vessel, under the triumphant reign 
 of protection, would be swept, as by a tornado, from the 
 surface of the ocean ; and sailless masts, rising from decay- 
 ing hulks, would give to our harbors the aspect of the 
 scathed forest that the destroying element had robbed of 
 all its green and vigorous life. Without commerce, 
 would the city itself have existed ? Would anything be- 
 yond a small town have stood where broad avenues, lined 
 with palatial edifices, are annually stretching their 
 lengthened miles deeper into the recesses of once primi- 
 tive Manhattan ? 
 
 Commerce, under free exchange, is to humanity what 
 the gospel, with its ever-gushing well-spring of eternal life, 
 is to the dark heathen and to the suffering Christian. One 
 sheds light upon and enriches the material existence, as 
 the other illumes the spiritual life of man. Cherish Com- 
 merce ! Art and Science are as the print of her footsteps ; 
 and civilization as the breath of her nostrils ! 
 
 Man, if left to himself, is prone to run his better as well 
 as his worse qualities, into excess, that converts the good 
 into faults, not less injurious than those that were originally 
 evil. The comparison of opinions and customs, and of the 
 
COMMERCE* 137 
 
 results of experience, with those of others placed in dif- 
 ferent circumstances, is necessary to his improvement. 
 Every nation may gain something in point of arts, cus- 
 toms, morals, or characteristics, from others. With the 
 more intimate knitting of commercial relations, political 
 sympathies will be diffused to strengthen the bonds of 
 amity and concord ; for the community of interest which 
 operates under the regime of trade, infuses the fraternal 
 spirit that moral influences alone would not suffice to 
 establish. 
 
 It is asserted by protectionists, that foreign pauper labor 
 is overcrowding the labor of the United States, and that 
 the ignorance of those uneducated masses is likely to drag 
 down American intelligence to its own level, " whole 
 armies of vagabonds and felons palsying our hands and 
 chaining our intellects." Where does this theory lead 
 to ? this theory that renounces the common sentiment of 
 humanity, whilst it despairs of hope in our institutions and 
 in our people ! It proclaims that evil is more powerful 
 than good, that the world is retrograding, fast travelling 
 backward on the way to barbarism in the moral, and a 
 desert in the physical organism. Instead of retrograding, 
 the world is advancing. The immigration to this country 
 is improving the race. The energy, the activity, the 
 physical and mental power of the people, derive new 
 nourishment from the amalgamation of those varieties of 
 the Caucasian race the old world is pouring upon our 
 shores. Under the dominion of universal free exchange, 
 the increase of an -effective population, acquainted with the 
 arts, will see every country provided with railways, and 
 the means of communication multiplied to an indefinite 
 extent. All of these causes and their effects will increase. 
 
138 INDUSTRIAL EXCHANGES. 
 
 Instead of being confined to a few channels, there will he 
 a thousand streams between all countries composed of the 
 races crossing each other, mingling and commingling in 
 commercial intercourse, to the constant improvement, phy- 
 sical and mental, of mankind. 
 
 Have we looked very far into the future ? We have 
 permitted ourselves to idealize. The ultimate of every 
 act of man is the ideal. From the smallest to the great- 
 est, the ideal is the object sought ; the means alone are of 
 the practical. Whether he labors to acquire material 
 wealth, or seeks alone for those riches that " neither moth 
 nor rust doth corrupt," or strives after the " bubble repu- 
 tation," the goal is the ideal. Those who would scorn the 
 ideal that enters into the subject under treatment of the 
 essayist, would prove themselves but shallow reasoners, 
 who reject, or see but half the object brought before 
 them. So the means be practicable, it need not damp the 
 zeal of any lover of humanity, if there be an ideal at the 
 end of his work. 
 
 As, under all the varieties of development, their psychi- 
 cal character is identical, and the ethnological facts furnish 
 testimony for the reasonable deduction that, under those 
 more refined influences surrounding the superior type of 
 the elliptic craniological development, the inferior gene- 
 rally tend more or less towards assumption of the superior 
 form, it is no impracticable theory that free exchange will 
 labor in commercial intercourse to realize. As an efficient 
 agent, its effects will bear upon that tendency as far as its 
 realization may be achieved in the improvement of the 
 races ; and thus by means of commerce will be promoted 
 the civilization that paves the way for and co-operates with 
 Christianity in redeeming mankind from whatever of the 
 
COMMERCE. 139 
 
 brutal clings to human nature. Individuals are distinct, 
 but humanity is one. 
 
 The restrictions, all the artificial impediments interposed 
 by misgoverning governments, will fail to interfere perma- 
 nently between the nations at a time when immortal mind 
 is bringing forth the subtle and powerful elements that 
 generate in nature's laboratory ; and, by applying them to 
 their uses, the nations are being brought together as if side 
 by side ; when space has been swept away, as it were, 
 from off the face of earth, and time has been annihilated, 
 as though to teach mankind the lesson that eternity alone 
 endures ! 
 
 At a time when the universe and its great mysteries are 
 becoming easy lessons in the hand of science ; when, 
 sitting in the deep recesses of his study, the astronomer 
 calculates with mathematical correctness the causes and 
 effects attaching to systems of created worlds ; emerg- 
 ing, he waves aloft the wand of science ; and, wizard- 
 like, proclaims to an astonished world the sublime decree 
 at yonder point in space, never yet seen by earthly eyes, 
 3,000,000,000 of miles distant, to-day a globe is moving in 
 its orbit ; and, as though called into being by his mighty 
 fiat, lo, it is ! He has declared its superficies and its 
 weight, the length of its years and its days, its condition 
 and its purposes ; and behold in his decrees the laws 
 Omniscience has established ! With a glance he spans the 
 roll of ages, the work and fate of worlds ! He backward 
 casts his gaze, and declares that the ray of light now shed 
 upon us by a distant planet, though travelling with the 
 inconceivable velocity of 213,000 miles in a second, has 
 been journeying on its way 60,000 years ere it reached 
 us ! 'Tis thus he seems to take the measure of infinity. 
 
140 INDUSTRIAL EXCHANGES. 
 
 Such are the facts of the practical that guarantee what- 
 ever of idealization we may indulge in. 
 
 To be sufficient unto ourselves, to sow for the uses of 
 manufacturing operatives, to spin for the uses of the sow- 
 ers, to confine ourselves within the narrow round of a per- 
 petually contracting circle, to find ourselves, as it were, 
 writhing within the contracting folds of the huge serpent, 
 protection, is the way to stifle our commerce, and foolishly 
 cast away the proffered aid of this wealth-dispensing agent 
 of exchange. 
 
 Facts of our own experience have, in " figures" that 
 " never lie," already taught whosoever is not wilfully ob- 
 tuse, the effect of free trade upon commerce. Official 
 statistics show the increase of tonnage of the United States, 
 from 1842 to 1846, a period of high tariff dominion, to 
 have been 5.61 per cent, per annum ; and that from 1846 
 to 1847, one year of reduced tariff, it was 10.81 per cent. ; 
 and from 1847 to 1848, it was 10.97 per cent. They also 
 show that the imports and exports for the fiscal year 1846, 
 that is to say, the sum total of our foreign exchanges, was 
 in value $235,179,613. The same for 1847, was $305,- 
 194,260. Increase $70,014,647. The increase of our 
 population is 3 per cent, per annum. We find the tonnage 
 to have increased nearly 100 per cent., and the exchanges 
 of commodities with foreign countries at the rate of 30 per 
 cent. This increase of 97 per cent, of shipping trade over 
 and above the regular increase of this trade that would 
 grow out of the increase of population, and this increase of 
 27 per cent, in the exchange of commodities over and above 
 the increase of our consuming population, are principally 
 attributable to the enhanced cheapness of the commodities 
 enabling the population to consume greater quantities. 
 
COMMERCE. 141 
 
 This cheapness is, in this instance, an effect of the reduc- 
 tion of duties which took place at the beginning of the 
 fiscal year 1847, and marks decisively the favorable influ- 
 ence of free trade upon a country. It cannot be alleged 
 that it is the effect of the cheapening agents of improved 
 machinery, &c., as, if so, the manufacturers would find 
 these agencies sufficient assistance in furthering their 
 measures of competition against foreign production, and 
 surely they would not call for protective tariffs to aid them. 
 
 There was no increase of coastwise tonnage by which to 
 prove that, while our foreign exchanges were diminished 
 under high tariffs, the domestic were increased ; but on the 
 contrary there was a diminution, which proves that the 
 domestic trade suffered from the oppression of a high tariff 
 as well as the foreign. The increase of coastwise tonnage 
 from 1842 to 1846 was 6. 45 per cent, per annum, and from 
 1846 to 1847, it was 13.15 per cent. Statistics prove that 
 these results of tonnage and exchanges are not singular 
 with the periods named, but have invariably risen and 
 fallen in the like manner with the several cycles of high 
 and low duties that have prevailed in this country. The 
 ship building was larger in 1847 than in any previous 
 year, and wages rose twenty per cent. 
 
 It is repeatedly urged by protectionists, that free trade 
 should not be practised by the U. States with Great Britain, 
 because, by her navigation laws, she draws to herself all 
 the carrying trade, and the effect of free exchanges is, to 
 build up her shipping and destroy ours. The experience 
 of the past two years has established the reverse of this to 
 be true. Our tonnage has increased, as stated, and Great 
 Britain's has fallen off. In 1847, her total tonnage employed 
 
142 INDUSTRIAL EXCHANGES. 
 
 in foreign trade, inward and outward, was 7,100,786 tons. 
 In 1848, the amount was 6,675,381 tons. 
 
 Under the freest of systems that could be practised, 
 American shipping would have no more to fear than many 
 other branches of American industry. The Liverpool 
 Times notes the fact, that we have over 600 ships engaged 
 in whaling, while England has but 17. Under the opera- 
 tion of that antidote for some of the evils wrought by high 
 tariffs, the warehousing system, British colonial produce 
 passes through our territory for transhipment from our 
 ports, principally in American vessels, instead of taking 
 British shipping from Canadian ports. Whether or not 
 this fact will have any weight in hastening an alteration or 
 further modification of England's navigation laws, is yet 
 to be determined. 
 
 However it may be alleged that peculiar circumstances 
 created an unusual demand for our products, it is evident 
 to the most casual observer, that under a high restrictive 
 regime the exchanges for 1847 would have been far less in 
 amount. But the allegation falls to the ground, and fails 
 in its object of proving that famine abroad, and not the 
 diminished restriction upon international exchanges, caused 
 the increase in exportation in our products, when the com- 
 parison is extended to include the year 1848, a year suc- 
 ceeding a large crop in Great Britain, and embracing a 
 period to which could not possibly attach the assumption 
 of the famine cause. The Treasury report shows the ex- 
 ports of our products during the first two years of the low 
 tariff of 1846, to have exceeded those of the two preced- 
 ing years under the high tariff of 1842, 80,605,181 dollars. 
 
 The falsity of the assumption by protectionists, that the 
 
COMMERCE. 143 
 
 large increase of our exchanges of commodities in 1847,' 
 was solely the effect of an extraordinary demand for our 
 breadstuffs, caused by the famine prevailing that year in 
 Ireland, is thus exposed by the report of the Secretary of 
 the Treasury for 1847, and its accompanying tables. 
 
 " It is said that the famine in Ireland was the sole cause 
 of our late large export of breadstuffs and provisions. 
 Now, from 1790 the values are not given so as to be stated 
 in amounts, but the quantities are ; and these prove that, 
 even omitting the last year altogether, and comparing the 
 low duty periods from 1790 to 1807, and from 1833 to 
 1842, with the years of protection from 1817 to 1832, and 
 from 1842 to 1846, the average export of breadstuffs and 
 provisions was much larger in the years of low as com- 
 pared with high duties, especially considering the differ- 
 ence of population." 
 
 It is interesting in this connexion, to glance at what 
 would be the effect upon the commerce of this country if it 
 should adopt entire free trade, reciprocated by all the world. 
 This cannot be better done than by quoting from the 
 report. " We see then here, under the system of free 
 trade among the States of the Union, an interchange of 
 products of the annual value of at least $500,000,000 
 among our 21 millions of people ; whilst our total exchang- 
 es, including imports and exports, with all the world 
 besides, containing a population of a thousand millions, 
 was last year $305,194,260, yet the exchanges between 
 our States, consisting of a population of 21 millions, being 
 of the yearly value of $500,000,000 exchanged, make 
 such exchange in our own country equal to $23.81 per 
 individual annually of our own products, and reduce the 
 exchange of our own foreign products (our imports and 
 
INDUSTRIAL EXCHANGES. 
 
 exports), considered as $300,000,000 with all the rest of 
 the world, to the annual value of thirty cents to each 
 individual. That is, one person of the Union receives 
 and exchanges annually of our own products as much as 
 79 persons of other countries." 
 
 We here see " ample room and verge enough " for an 
 almost infinite expansion, should no other restrictions exist, 
 to check the growth of mutual exchange. 
 
 When transportation is the only antagonist to overcome, 
 how great the trade compared with that which has to 
 combat restriction also : 
 
 " The average freight from the Ohio river to Baltimore 
 is greater than from the same place to Liverpool ; yet the 
 annual exchanges of products between the Ohio and Bal- 
 timore exceed by many millions that between Baltimore 
 and Liverpool. The Canadas and adjacent provinces 
 upon our borders, with a population less than two millions, 
 exchange imports and exports with us less in amount than 
 the State of Connecticut, with a population of 300,000 ; 
 showing that, if these provinces were united with us by 
 free trade, our annual exchanges with them would rise to 
 $40,000,000. It is riot the freight, then, that creates the 
 chief obstacle to interchanges of products between our- 
 selves and foreign countries, but the duties." 
 
 It is the mighty gulf which protection has digged broad 
 and deep with the implements of wrong between a market 
 with twenty-three millions of customers, and one that is 
 swarming with a thousand millions, that free trade would 
 span with a bridge of wealth for the progressive travel of 
 our country. 
 
XVI. 
 
 PROTECTION NEUTRALIZES GIFTS OF 
 PROVIDENCE. 
 
 THAT protection neutralizes the benefits that might be 
 derived from a country's natural advantages may be seen 
 by the following illustration. It is well known that the 
 United States abounds in fertile sugar lands. The sugar 
 of Cuba comes in largely to compete with the production 
 from these lands. Assume, that instead of seeking, by 
 improved processes and economy, to maintain a successful 
 competition, our sugar makers procure the imposition of a 
 highly protective tariff. It results that for a short time 
 the business yields large profits. But with profits rises 
 the value of the land especially adapted to sugar making. 
 The enhanced cost of this natural agent of production, the 
 rise in rent where hired, or the rise in amount of interest 
 where it is owned as an investment of capital, reduces the 
 profit yielded by the sugar ; that is, the rate of profit on 
 the capital (and the wages of labor, if it be free, by which 
 means capital saves itself at labor's expense) is lowered. 
 Then the sugar producers, instead of being ready to dispense 
 with protection, are preparing to ask for more, in order to 
 effect a rise in the price of sugar equivalent to that in the 
 value of land. The protection accorded to them has thus 
 
 7 
 
146 INDUSTRIAL EXCHANGES. 
 
 defeated its own object, and neutralized the natural ad- 
 vantage of land specially adapted to the sugar culture, that 
 had originally been furnished to the planter gratuitously 
 by a kind providence. The sum of rise in value of the 
 land is contributed by the consumers of sugar, who are 
 thus far losers, whilst the sugar producer is not benefited 
 by their contributions, except it be in the capacity of land 
 monopolist. 
 
 But the protectionist, true to a narrowed instinct, may 
 say that protection exists and cannot be removed ; that 
 these improved processes are not already in possession of 
 the sugar maker; and, upon protection being taken off, 
 foreign sugar would pour into the country, and he, unable 
 to compete, would meantime be ruined, and his property 
 brought to the hammer. Nothing so shocking would 
 ensue as is presented to us by the pictures opponents of 
 free trade conjure up. Free trade would not prove to be 
 an earthquake, opening wide the earth to swallow up land, 
 houses, and all possessions, and leave the quondam pro- 
 ducer a ruined wretch, alone in all the world upon the 
 brink of the vast chasm, standing in unutterable desola- 
 tion and despair, to mourn an irrecoverable loss. No, the 
 consuming millions are around him ; land, capital, labor, 
 all exist to minister with profit to their wants. 
 
 The propriety of removing chronic diseases by gradual 
 processes is well understood. Gradual reduction is a 
 means of avoiding reactions. In some instances, where 
 extensive establishments and the habit of large expendi- 
 tures prevented prompt retrenching to a safe business, the 
 gradual removal of protection would give time for these 
 improvements, and the turning of capital into more pro- 
 e^ channels. If under a too rapid reduction they 
 
PROTECTION NEUTRALIZES GIFTS OF PROVIDENCE. 147 
 
 were sold, the lands would be purchased at reduced rates, 
 that would be fixed with reference to the amount of profit 
 to be yielded by the sugar produced from them. In short, 
 because an attempt to force natural laws out of their 
 proper bias operates nationally, as it does internationally, 
 under our hypothesis a depreciation of the capital in lands 
 would ensue, to meet the smaller profit its use would yield, 
 and it would fall back from the unnatural height* to 
 which it had been forced by protection to its original true 
 and healthy value. We are probably to witness this pro- 
 cess operating with the property of the English landed 
 aristocracy, under the influence of the corn law abolition. 
 
 The same effect is produced as if a reduction in the 
 hours of labor were to diminish the planter's profits, from 
 whence a like depreciation would ensue. The reduction 
 is certain to produce this effect with free labor also, unless 
 the pressure of growing population, ignorance, and protec- " 
 tion in- its several forms, are in force, to operate against 
 labor and filch from it the natural reward. In both cases, 
 then, of reduced protection and reduced hours, the loss 
 falls upon capital, and the gain accrues to the benefit of 
 labor, lightening the toil of the slave, and raising the 
 remuneration of the hired laborer. And has not capital, 
 so long protected, had long enough the lion's share ? And 
 whence should be drawn the supplies to fill up the shallows 
 of unequal distribution, but from the gorged reservoirs 
 protection has created ? 
 
 The new purchasers, and also those who had continued 
 in the business, do an uninflated, healthy business. The 
 former proprietors would in these cases of retirement from 
 sugar growing, invest their reduced capitals in other 
 forms ; many probably seeking the cotton culture, the 
 
148 INDUSTRIAL EXCHANGES. 
 
 great staple of the world, in which no nation will ever 
 compete with us to our detriment. Large capitals would 
 be cut down, and a greater number of smaller capitalists 
 be engaged in the various branches of industry. The effect 
 is an equalization of fortunes, more consistent certainly 
 with the spirit of democratic institutions, than the gigantic 
 monopolies of agricultural and manufacturing interests 
 that protection builds up. Admit there is a loss one suf- 
 fered by comparatively a few individuals but there are, 
 also, two gains ; the immediate gain to the millions of con- 
 sumers in the reduced cost to them of sugar; and the 
 ultimate gain in the cheapening of the articles effected 
 by the cheapness of sugar. Extend the application to 
 include all commodities, and these effects of immediate 
 and ultimate gain will be estimated by hundreds of 
 millions. This is not the question of a class we would 
 resolve, but a problem for the masses. 
 
 We have had some experience under an approximation 
 to free trade. It shows that the sugar culture is one of 
 our natural industrial adaptations, and would not be 
 diminished by free trade. The effect of a recent ap- 
 proximation to free trade upon the sugar culture is thus 
 explained by the official statistics. In 1846, the last 
 fiscal year of the high tariff, we exported of brown sugar, 
 109,295 pounds. In 1847, the first fiscal year of the low 
 tariff, the exportation was 388,057 pounds. St. Croix 
 furnishes a superior quality of sugar, Porto Rico one 
 somewhat inferior, the Southern United States a third, 
 inferior to the Porto Rico. These various qualities all 
 find purchasers and consumers in our own and other 
 markets. We export of our coarser product to the West 
 Indies, while we draw thence in return finer qualities. 
 
PROTECTION NEUTRALIZES GIFTS OF PROVIDENCE. 149 
 
 We refine coarser sugars, and export greatly enlarged 
 quantities. 
 
 A branch of agricultural industry is beginning to 
 develope itself in this country, which promises to grow 
 into importance and value. I allude to the grape culture. 
 It appears, by reference to the report of the Patent Office 
 for 1847, that an acre of land in a certain region may 
 yield a profit of six thousand dollars upon sale of the wine 
 produced. Assuming this to be the fact, it promises well ; 
 but, supposing that attempts be made to monopolize a 
 natural facility, and, by protection, to force it into an 
 extensive business, under the usual pretext that we must 
 protect home productions against invasion, and foster each 
 youthful branch of industry into mature strength, lo ! it 
 vanishes. The acre that will now yield a large profit, 
 protected against foreign competition, rises to a correspond- 
 ing value, its rent goes up ; prices of the wine are kept 
 proportionably high, consumption diminishes, and a stinted 
 growth without any larger profits resulting from the high 
 prices, is the fate of the new branch of agricultural indus- 
 try upon which large anticipations had been built. 
 
 Unprotected, the competition of the foreign article 
 brings down profits to a healthy level, keeps alive the 
 energies of those engaged, prevents inordinate rise in the 
 value of the land, rendering moderate profits ample interest 
 on the capital, sufficient to pay a moderate rent ; and, so 
 far as this branch of industry is to be really profitably 
 adapted to our country and people, admits of its growth, 
 and no further. The maturity attained is the healthy 
 strength of the child, that in the open air, and in rude 
 contention with the elements, and with labor, grows into 
 the man of iron muscle and of mental vigor, whose ener- 
 
150 INDUSTRIAL EXCHANGES. 
 
 gies achieve the victories of a freeman's life. Not that 
 maturity so immature, which so often yields the child of 
 ease and luxury for all the dainty nursing that waited on 
 its growth, a sad return of softened muscles, and the 
 pitiable effeminacy that live alone by others' help. 
 
 Results as unprofitable would follow upon a similar 
 improvement of another opportunity which offers for put- 
 ting in practice the protective theory. It is recorded in 
 the New York Journal of Commerce, that recently an 
 importation has been made of a quantity of tea plants, for 
 the purpose of attempting the cultivation of tea in the 
 Southern States of the Union. Perhaps there is no one 
 article that enters more largely into the consumption of 
 the people of this country than tea, and in accordance 
 with the doctrines of protection, its cultivation at home 
 would be a desideratum unsurpassed by any other. Tea 
 is now free, and it would be necessary to impose a revenue 
 duty, say of 20, and an addition for protection of at least 
 50 per cent. The cost of tea would be raised to consumers 
 from 37J and 50 cents per pound to one dollar and up- 
 wards ; but home production, furnishing business and 
 fortunes for a few capitalists, would be fostered. The 
 extensive trade with China that takes of our cottons, lead, 
 ginseng, provisions, candles, &c., large amounts annually, 
 would be destroyed, and the production of these articles 
 diminish in a ratio with the increase of tea growing. 
 Peter would be robbed to pay Paul, and consumption be 
 robbed for the purpose of waste ; but still protectionists, in 
 the face of fact, would persist that home production was 
 fostered and labor was encouraged. The commerce and 
 shipping now in the China trade would receive a mortal 
 wound, and ruin be widely spread among those extended 
 
PROTECTION NEUTRALIZES GIFTS OF PROVIDENCE. 151 
 
 interests ; but home labor is benefited, repeat the protec- 
 tionists, and the transportation outward of our cotton, lead, 
 &c., and inward of the tea, would be saved. .The trades- 
 men, shippers, and sailors, could leave their productive 
 operations and go upon the tea plantations. True, their 
 labor would not be half so effective as before, in the pro- 
 portion of result to effort ; but tea would be protected. 
 
 Under free trade this, as well as other nations, will enjoy 
 and profit by its peculiar advantages ; they will not be 
 neutralized. Fears have been expressed of danger to our 
 cotton-producing interests, from the successful appropria- 
 tion by England of her East Indian possessions to the pro- 
 duction of cotton for her own manufacturing purposes. 
 Protectionists have thence reasoned, that we need a home 
 manufacturing interest sufficiently large to work up all 
 of our raw cotton, that we may suffer nothing by being 
 shut out from its sale in the English market. This fear 
 is illusory. Great Britain now sends five million pounds 
 of cotton in the form of goods to that quarter more than 
 she receives thence. I last year was shown, in the Man- 
 chester market, a specimen of the best article of Indian 
 cotton yet furnished, and, after a careful examination, my 
 own conclusion, drawn from a six years' acquaintance with 
 the production of cotton, was substantiated by that of two 
 eminent English manufacturers, one of them a member of 
 the British parliament. It was evidently inferior in qua- 
 lity, particularly in point of staple, to the American ; so 
 much so, as to make it apparent that our product would 
 always occupy a position far in advance of the Indian in 
 the world's markets, even should the doubtful experiment 
 of its extensive production in India succeed in accordance 
 with the expectation of the most sanguine. For all the 
 
152 INDUSTRIAL EXCHANGES. 
 
 finer manufactures ours would be preferred. With our 
 improved means of transportation, we possess advantages 
 which we must hold over India ; and England will be 
 sensible of the good policy of holding to that American 
 market for her manufactures, which she would be forced 
 to relinquish to a great extent whenever she should dis- 
 continue taking our raw cotton. It is idle to fear that we 
 can ever be supplanted in the production of the great 
 staple. 
 
 It is melancholy to hear those economic oracles who, 
 despising the gifts of a bountiful providence, declare in a 
 year of large production that the supply of the necessaries 
 of life must be checked, in order that prices may recover 
 an antecedent higher rate. It is false theory, that it is 
 necessary to check production in order to find markets. 
 If the product is increased, all markets being open, con- 
 sumption will increase with it, because the purchasing 
 power will increase in a direct ratio with the production. 
 
 In order to build up their manufacture at home, for- 
 merly the importation of silks was prohibited by England. 
 In 1825 Huskisson got the prohibition taken off from fo- 
 reign fabrics. In 1832 the manufacturers demanded an 
 increase of duty on French silks ; other parties called for 
 a diminution. The latter prevailed. The cry of ruin 
 was raised by manufacturers, that they could not compete 
 with the superior and cheaper French article. They 
 were told to study, to revise their designs, to strive in all 
 ways to improve the quality of their fabrics. They did 
 so. What is the result? England takes, it is true, 
 twenty or thirty millions value in francs of silks from 
 France, but she also exports about twenty millions, and 
 France herself takes of English silks. 
 
PROTECTION NEUTRALIZES GIFTS OF PROVIDENCE. 153 
 
 The truth is, that in the various countries and the 
 several sections of countries, diverse aptitudes and circum- 
 stances of the people, soil, climate, &c., fit them each for 
 the production of some of the many kinds, quantities, and 
 styles of wares that are adapted to the varied necessities, 
 tastes, and abilities of the various consuming sections of 
 society. This great diversity in the industrial population 
 will always exist ; some being more skilful, and attaining 
 greater perfection in one branch than another, and so 
 around the circle of the arts. And the varieties in climate, 
 and soil, and facilities for production, will in like manner 
 favor the prosecution of one branch of industry in one, and 
 of another branch in some other country. 
 
 " The superiority of the woven fabrics of Southern 
 Europe over those of England, in the richness and clear- 
 ness of many of their colors," says an English economist, 
 " is ascribed to the superior quality of the atmosphere, for 
 which neither the knowledge of chemists, nor the skill of 
 dyers, has been able to provide, in our hazy and damp 
 climate, a complete equivalent." And so it is around the 
 circle of production, throughout the globe. In some 
 regions, men require less aliment than in others, and pro- 
 duction is thereby sustained at less cost. Under the incite- 
 ment of the markets supplied by free exchange, each will 
 be active in finding its own peculiar aptitudes, and will 
 excel in those. 
 
 Providence has thus created the various facilities of 
 time, place, aptitude, &c., in production, to match the 
 same variety in consumption. If left to their own natural 
 sagacity, each will find his vis a vis, to their own mutual 
 advantage. These aptitudes, adaptations, and facilities, 
 are all equally valuable gifts of Providence, with the im- 
 
 7* 
 
154 INDUSTRIAL EXCHANGES. 
 
 provements in the useful arts. The citizens of New York 
 would not now scorn the use of the steamer that floats 
 them up to A.lbany in 9 hours, and revert to the Dutch 
 sloop that, under favorable circumstances, formerly made 
 the voyage in 9 days. In 1824 or '25, it was proposed to 
 construct the Liverpool and Manchester railway, that 
 should convey passengers at the rate of eight miles an 
 hour. A tempest of opposition was aroused, got up on 
 all sides by canal owners, towns that supposed their exist- 
 ence depended on the patronage of stage-coaching, inn- 
 keepers, coach owners, carriers, and fox hunters. It was 
 declared that the country would be deserted by all but 
 radicals, engineers, and manufacturers. The road was 
 completed in 1830, and instead of eight miles, the speed 
 was twenty. But no destruction followed. Money was 
 plentiful, interest low ; and before 1835, nearly a dozen 
 other lines of railways had sprung into existence. Some 
 20 years since, when it was proposed to establish a printing 
 press in Madrid, for multiplying, at a cheapened rate, 
 copies of music, the copyists, whose business it was to 
 write the sheets, raised so great an uproar, that govern- 
 ment abandoned the project. Even Spain would not 
 hearken to that complaint of a contracted monopoly at this 
 day ; and at some future day she will mount another step 
 on the ladder of improvement, and adopt free trade. 
 
 Perhaps certain of those English silk manufacturers 
 were ruined ; also, those North River sloop owners, 
 captains, and sailors ; yes, even before this, those Spanish 
 copyists may have been crushed beneath the tread of Pro- 
 gressive Improvement ; but, if so, each and all of them 
 have since risen from the earth, with new strength, sown 
 with the blow that momentarily prostrated them, where- 
 
PROTECTION NEUTRALIZES GIFTS OF PROVIDENCE. 155 
 
 with they have wrought with fourfold power and effect, for 
 their own and the general gain. They have not suffered 
 irretrievably, for the improvements in machinery are 
 gradual in their introduction, and effect the changes of 
 increased production, and the casting out of employment, 
 in a gradation of ratio, that brings about, through increased 
 cheapness augmenting consumption, the end of increased 
 demand for labor, without the serious injury being felt by 
 those copyists, &c., of being entirely and suddenly thrown 
 out of employment. The increased productions soon swell 
 into a sum beyond the amount of fixed capital invested in 
 the machinery, and create a circulating capital, that 
 employs a progressively increasing amount of labor in 
 production. The machinery is then seen to be operating 
 in increasing capital to induce production, as we have 
 seen free importations do it. 
 
XVII. 
 
 RECIPROCITY. 
 
 MANY who admit the truth of the free trade principle 
 doubt the expediency of adopting its practice without re- 
 ciprocal action on the part of other nations. The objec- 
 tions to free trade lie against the influx of foreign pro- 
 ducts ; our democracy permits the influx and attainment 
 to citizenship of foreign population. In all the kindred 
 movements should this country have awaited the action of 
 others ? The fathers of the revolution should not aside 
 from the resistance to oppression surely have deferred 
 the establishment of the democracy, and awaited the simul- 
 taneous action of other nations, through fear of their popu- 
 lation flowing in upon us, and assuming a portion of the 
 administration of the government. 
 
 If all wait for others to take the initiatory, free exchange 
 will never begin. Should we wait for other nations to 
 abolish protective duties before we do so ? Suppose the 
 United States can raise corn so readily as to be able to 
 afford it in the markets of Great Britain, our best custo- 
 mer, for 50 cents a bushel, the annual exportation amount- 
 ing to 20,000,000 bushels. Also, that England can 
 manufacture cloth for 50 cents a yard, of which we im- 
 port 20,000,000 yards. We will impose no protective, 
 
RECIPROCITY. 157 
 
 but only a revenue duty of 10 per cent. The 20,000,000 
 yards are then imported, at a cost to our consumers of 
 $11,000,000. Great Britain, however, imposes a duty of 
 20 per cent., 10 of it being protective. The 20,000,000 
 bushels of breadstuff's will cost the English consumers 
 $12,000,000. We are then the gainers over them by 
 one million dollars, not a few manufacturers but the mass 
 of our consumers. 
 
 Is it objected that, no competition being maintained 
 against them here by the protection of a tariff, the English 
 manufacturers will charge their own high prices for the 
 cloths ? This will rectify itself by the operation of the 
 simplest law of trade demand regulates supply, capital 
 existing to produce ; competition regulates prices. Good 
 prices procured thereupon, our demands will create 
 enough competition to reduce prices to living profits ; and 
 the rate of these profits will be still further reduced, by 
 the increased cheapness of living there effected by the 
 abundance of corn sent. Food enters into the cost of pro- 
 duction of all commodities and it is, of all things, most 
 essential, that food be abundant and cheap in a country, as 
 then all its own productions of other kinds, and all the im- 
 ports in exchange for its products, will be cheapened. 
 
 Will the protectionists say that Great Britain, keeping the 
 protective duty on our corn, thus raising its cost and that 
 of living, cannot afford us the cloth as cheaply as if she 
 imposed no protective duty, and we are then paying a high 
 price for her commodity, whilst receiving only a low one 
 for our own ? This is at once an admission of the free 
 trade doctrine, that protection enhances the cost of all 
 things to consumers, and produces a loss. Great Britain, 
 by imposing a protective duty, increases the cost of food 
 
158 INDUSTRIAL EXCHANGES. 
 
 and clothing to her own people, and the same to us, the loss 
 to herself being much greater than ours. An evil exists, 
 and it is created by protection. Would it improve mat- 
 ters to extend that evil by our adopting protection also ? 
 It would sound extremely illogical to say yes ; and 
 it would be a false reply as well. Yet this is the exact 
 position in which those place themselves who call for 
 protection, that we may not pay tribute to foreign na- 
 tions, giving them high prices for what we might pro- 
 duce at home with protection. Who pays the high prices ? 
 The consuming masses. The only object sought is to di- 
 vert their payment from the English to the American 
 manufacturer. Here lies the deplorable error, in looking 
 ever after the interest of producers, instead of consumers. 
 The prices are not to be lowered. That is not by any 
 means the intention. 
 
 To show the process by which matters would be made 
 worse by our adoption of protection as a retaliatory mea- 
 sure, suppose we impose a protective duty of 10 per cent, 
 on the cloths. The 20,000,000 yards used by the families 
 of laborers, farmers, mechanics, &c., then cost $12,000,000 
 instead of $11,000,000. This is the immediate loss. The 
 $1,000,000 protective duty, with the rise in price of all 
 the home manufactured and consumed of the cloths added, 
 amounting probably to tenfold, has gone into the pockets of 
 some few hundred, or mayhap few score, manufacturing 
 capitalists. That they employ labor to make the cloths is 
 no argument in favor of the system, because these laborers 
 amount in all to only a few thousands, and without the pro- 
 tected cloth manufacture they would find employment in 
 other pursuits. 
 
 The expenses of living being increased to consumers 
 
RECIPROCITY* 159 
 
 here, they must have higher prices for their several pro- 
 ducts, their quotas of labor. The corn we send to England 
 for the cloths is higher, and costing them more, their ex* 
 penses of living are increased, and the cloths they make 
 cost more to manufacture. We then have to pay more in 
 turn for those cloths than we did before. Each consumer 
 here pays another advance on the cloth he consumes* 
 This is the ultimate loss. The duty imposed on their 
 cloths has reacted upon us, and for one gain going into the 
 pockets of a few our millions suffer two losses. 
 
 Thus is illustrated the theory of consumption, a science 
 which is too little studied, and should be regarded with 
 that rtverence borne towards the sacred and inalienable 
 rights of man, as represented by the eternally-worshipped 
 justice. 
 
 The effects of production determine ultimately upon the 
 consumer. 
 
 Under the opposite process of reduction extending to all 
 commodities, leaving them free to enter, Would ^ those na- 
 tions of whom we took them not receive ours in exchange ? 
 They could not avoid it, inasmuch as the discontinuance or 
 refusal to do so would necessarily involve a cessation of 
 their sales to us ; and thus the protectionist's aim would be 
 attained we would be forced into home production for our 
 consumption. And would we not produce the wherewithal 
 to exchange for the enlarged quantity of their commodities 
 consumed by us ? We could not fail to do so, inasmuch 
 as consumption is the procreating principle of production. 
 
 We may now observe some of the visible effects of free 
 trade independent of reciprocity. 
 
 Our tariff of 1846 created comparative free trade, that 
 is, it largely diminished protection, when it reduced the 
 
160 INDUSTRIAL EXCHANGES. 
 
 duty on woollen cloths to three-fourths of what it had been 
 under the previous tariff of 1842 ; on sugar to less than 
 one-half; and on cotton manufactures to one-third. There 
 was a loud cry of ruin from these and other interests, 
 that rang dolefully through the land. These prophecies 
 have not been realized. So with other interests thus 
 affected by the tariff of 1846. A further reduction would 
 raise the same cry, and with the same result of non-reali- 
 zation. In some cases there was reciprocity on the part of 
 the countries, but in other cases there was not, as in sugars, 
 any reciprocal action on the part of the nation exchanging 
 products with us ; and yet those sugar and other producing 
 interests are still flourishing. 
 
 That these statements of protectionists are, many of 
 them, eminently false, and sometimes uttered from purely 
 selfish motives, is evident from the fact that since 1846 a 
 town built with manufacturing capital, devoted to manu- 
 facturing purposes, and filled with a manufacturing popu- 
 lation, has risen up in Massachusetts, and grown into 
 importance. Another similar city is growing up on the 
 Connecticut River, with capital engaged, and water power 
 being developed for sixty first class factories, to support a 
 population of 100,000. A thousand laborers are employed 
 in constructing gigantic works, and making hills of solid 
 rock to disappear as by magic. This is the ruin caused by 
 abolishing a portion of the protective imports existing three 
 years since. 
 
 In Switzerland, Tuscany, and the Hanse towns, where 
 free trade exists, there is exhibited a remarkable contrast 
 between the laboring population, and that of those countries 
 where it does not exist. 
 
 Degraded, yet still beautiful Spain, what would not free 
 
RECIPROCITY. 161 
 
 institutions, with free trade, do for her ? What has prohibi- 
 tion done for her while it has been exacted to the death, 
 and the exportation of specie has been forbidden by a 
 Draconian code ? Where are her manufactures ? They 
 began to fall with the commencement of their protection 
 under the tyrant Philip II., and now, alas ! But, even in 
 Spain may be found evidence of the beneficial effects of 
 free trade where reciprocity was not established. 
 
 In the Basque provinces, where commerce, until recently, 
 was free, there is a profitable production of iron, grains, 
 &c., and a degree of prosperity that contrasts favorably 
 with the misery of Old Castile, where the protective system 
 holds sway. Also, in Estremadura, under the same 
 sway, the poverty and misery are deplorable. 
 
 Much complaint has been made by protectionists, at the 
 policy of the United States admitting Cuba coffee free, 
 and their sugars, &c., at low duties, whilst it does not 
 reciprocate, and even prohibits some of our staple products. 
 If they look at the condition of Spain they will see a 
 melancholy picture of the deplorable effects of a stringent 
 protective policy. As to Cuba, it is, 1 believe, the univer- 
 sal sentiment, that her admission into the Union, and 
 adoption of our free policy, would raise that lovely island 
 to a pitch of prosperity she is yet far from reaching. 
 
 If Cuba charges ten dollars duty per barrel upon our 
 flour, bringing the cost of the necessary article for the 
 sustenance of her people up to triple or quadruple, what it 
 costs our consumers, who but Cuba is the principal loser ? 
 What is Cuba ? Is she not the food eating and apparel 
 wearing inhabitants of the island ? It is time it was 
 everywhere understood that a country is composed of the 
 consuming population thereof, and is not a myth, an ideal 
 
162 INDUSTRIAL EXCHANGES. 
 
 something to labor for, and starve for, while human beings 
 are writhing in the grasp of want. 
 
 In France are two departments, of the North and of the 
 Gironde. The products of the latter, of which wine is the 
 principal, are not protected ; so far from it, that foreign 
 duties and internal octroi bear heavily upon their exporta- 
 tion from the locality of manufacture. The department of 
 the North is webbed with roads, railways, and canals, and 
 its products, cloths, fabrics, oleaginous seeds, castings, &c., 
 enjoy an exorbitant protection. If the doctrine of protec- 
 tionists is true, the people of the North should be happy, 
 whilst in the Gironde they should be in a miserable 
 condition. It is the reverse; at Lille, of 70,000 inhabit- 
 ants, 22,000 indigent paupers were succored ; in the 
 department of the North 163,000 out of 960,000 inhabit- 
 ants are in the same situation. Nothing of this exists in 
 the Gironde ; and in place of one-fifth of the population, as 
 at the North, and one-third as at Lille, one twentieth at 
 the most have recourse to public charity. The evidence 
 of a commission despatched a few years since, thus repre- 
 sents the condition of the laborers of Lille. " It is 
 impossible to imagine the appearance of the habitations of 
 the poor we have visited. Their improvident, careless 
 manner of living, draws upon them evils which render 
 their misery frightful, intolerable, murderous. Their 
 poverty becomes fatal by the abandonment and demoraliza- 
 tion it produces In their obscure caves, in their 
 
 chambers which one would take for caves, the air is 
 never renewed, and becomes infectious ; the walls are 
 plastered with filth of a thousand kinds. If a bed exists, 
 it is a plank covered with dirt and grease, humid and 
 putrescent straw, and with a cloth, the texture and color of 
 
RECIPROCITY. 163 
 
 which are hidden under layers of dirt, and so ragged as to 
 make such a cover as would a sieve. The furniture is 
 broken, worm-eaten, and filthy. The utensils are thrown 
 without order about the habitation. The windows, always 
 closed, are filled with paper and glass, but so black, so 
 smeared, that the light cannot enter. There are proprie- 
 tors who fasten the shutters so that the tenants may not 
 break the glass in opening and shutting. The floors are 
 covered with cinders, filth, rotten straw, debris of vegeta- 
 bles brought in from the street, with holes for animals of 
 all kinds. With the foul odors of men, beasts, filth, &c., 
 the air is not respirable. And the poor man himself, his 
 clothes are rags, and his hair does not know the comb. 
 His skin can be seen upon his face, but upon his body it is 
 hidden by the insensible deposits of divers exudations. 
 Nothing can be more filthy than the condition of these 
 poor demoralized creatures. As to their children, they 
 are discolored, lean, puny, old, yes, old and wrinkled ; 
 their stomachs swollen, and their limbs emaciated, with 
 crooked spines and bowed legs ; fingers ulcerated, and 
 bones puffed and soft ; in fine, these little unfortunates are 
 tormented and devoured by insects." 
 
 The Gironde is agricultural ; the North, manufacturing ; 
 yet it is said by the opponents of free trade in the United 
 States that " the morals and intelligence of the artisan 
 class are in advance of the agricultural," and hence it 
 is in effect argued that the standard of American intelli- 
 gence must be raised by effecting a transfer of labor from 
 the agricultural to the manufacturing department of 
 industry ! 
 
 At the close of the war, in 1814, the Swiss, shut up in 
 the heart of Europe, walled in by the protective policy of 
 
164 INDUSTRIAL EXCHANGES. 
 
 surrounding nations, opened their frontiers to all the 
 products of Europe. Consequently, placed in an unfa- 
 vorable condition, and with no contingent of an improved 
 shipping trade to grow out of it, as with other nations, 
 they have largely developed within themselves the indus- 
 trial pursuits which have been cultivated with the aid of 
 protection by the t\vo great nations of Europe. This has 
 been the effect of admitting free of all duty those articles 
 necessary to their consumption. Their workmen have 
 found more steady employment than those of protected 
 rivals, and there has been none of the loss from unoccupied 
 time. 
 
 A writer upon the subject, in this country, whose pro- 
 duction occupies a prominent place in the literature of our 
 legislation, thus expressed himself in 1845. " What 
 would become of England, if, now that by the loss of ten 
 days' food, perturbation is seen throughout her social 
 order, she were by a free importation of grain to debase 
 her agriculture fifty per cent. ? Why, she would be 
 transferring the power of feeding her own people to the 
 Crimea, to the United States, or any other large grain 
 country !" Doubtless the reader will smile with me as 
 he reads this protective fulmination, prophetic of the dread 
 results of free trade. He will recall the fact of the actual 
 repeal of England's corn laws the very next year, and 
 trace the effects up to this day. Two short years only 
 have elapsed, and the effects of the awful " transferring 
 the power of feeding her own people ," have told weightily 
 into the treasuries of both countries, and made the big 
 heart of humanity to beat with a throb whose sound has 
 swept the broad Atlantic like a mighty paean, and soared 
 to heaven in a Te Deum of joy ! 
 
XVIII. 
 
 COST OF PROTECTION WAR VIOLATED 
 LAWS DESTRUCTION. 
 
 THE enhanced prices on 16 articles, of $331,000,000 
 value, paid by consumers to the protected classes in 1845, 
 as appears by the Treasury Report of July, 1846, was 
 $94,000,000. Add to this for increased consumption the 
 proportion of excess of consumed imports in 1848, which 
 were $134,000,000, over those of 1845, which were 
 $102,000,000, and the amount that would have been paid 
 for protection on these articles, in 1848, by consumers in 
 the United States, may be stated at $123,000,000. How 
 much the tariff of 1846 has diminished this sum cannot be 
 stated, perhaps to half the amount ; and it is not probable 
 the amount paid is less than that sum, when we add to the 
 sixteen included in the above estimate all those other arti- 
 cles which are more or less protected. 
 
 The abstraction from the consumer's pockets is effected 
 in this manner. The protected articles can be produced 
 abroad for certain prices, just as far below what they can 
 be here as the amount of protective duty. They sell in 
 our markets at the high prices made up of the foreign 
 value and the duty. These importations and sales amount 
 to several millions upon which the duty is collected. But 
 
166 INDUSTRIAL EXCHANGES. 
 
 the consumption is much more ; it includes with the im- 
 ported articles all those produced here and not exported, 
 double, treble, and quadruple the amount of the importa- 
 tions. The price of those produced here being raised by 
 the producers to a level with what the foreign articles bear 
 with duty added, consumers pay the 'per cent, of protective 
 duty on all consumed. 
 
 In the same report the amount of annual products is 
 estimated, with great show of truth, confirmed by statisti- 
 cal tables of returns from several of the states, at 2,000,- 
 000,000 dollars value. The protected portion of these is 
 stated to be $500,000,000. The annual home production 
 of such articles being by estimate 500 millions, and the 
 importations being 134 millions, the quantity consumed is 
 634 millions. The duty of 30 millions collected raises 
 the 134 millions 24 per cent. Estimating 10 of the 24 
 per cent, to be protective raises the price of the entire 
 consumption the same rate, and consumers pay $63,400,000 
 to the producers of the dutiable articles. In this estimate 
 is omitted the ultimate loss from checked importation, the 
 effect of partial prohibition. 
 
 If all the worst and most dismal alarm cries uttered, 
 whenever a reduction of the tariff is threatened, by those 
 interested in keeping up protection, were to be realized in 
 consequence of a reduction taking off all protection, the 
 people might pay the entire losses of all concerned, and 
 still be largely the gainers by the operation. Truly pro- 
 tection is an expensive pet to foster, and were it productive 
 of none of the evil which the previous pages of this work 
 have proved against it, but, on the contrary, were it the 
 agent for all the good protectionists claim for it, would it 
 not still be a question if our hard-handed republicans were 
 
COST OF PROTECTION. 167 
 
 not violating the maxim of the sage Franklin, and paying 
 " too dear for the whistle ?" 
 
 The sum exacted by protection from consumption is, 
 though disguised, nevertheless paid to the full. Whoever 
 is passing along our great mart of fashion, and Rialto of 
 retail trade, Broadway, may frequently observe, conspi- 
 cuously arranged within the immense plate glass windows 
 of the shops, articles ticketed as great bargains in this 
 wise " only !|Q. " At first the passer by fancies he sees 
 a great bargain offered in the great one, not observing the 
 little nine ingeniously added ; and, not until he purchases 
 and receives the change from a bill tendered in payment, 
 is the fact revealed, that 22 cents instead of 12, has 
 brought the commodity to the purchaser at anything but 
 a bargain. I have sometimes thought I saw here the 
 great 1 put forward by protectionists, as the great bless- 
 ing to national industry, while the little crooked 9, lurking 
 behind, seemed to be the personification of that protection 
 which, under the shadow of the great 1, is filched from the 
 pockets of the unsuspecting purchasing consumers. 
 
 Well meaning persons sometimes urge as a reason for 
 protection, that, enabling a country to supply all the 
 demands for home consumption, it would, in the event of 
 war, diminish the evils that, under opposite circumstances 
 of procuring supplies of certain articles from abroad, would 
 be effected by a cessation of peaceful intercourse. The 
 national honor and dignity require, they say, that we should 
 be sufficient unto ourselves. 
 
 A blind policy that, for what would be at best a doubt- 
 ful good, sacrifices a substantial benefit ; a policy by which 
 we would deny ourselves the benefits of participation in all 
 the distinct, local, and valuable natural advantages that are 
 
168 INDUSTRIAL EXCHANGES. 
 
 peculiar to each different region of the globe, enjoyed by 
 us through the long terms of peace, by means of mutual 
 exchange of these goods. Deny ourselves these, that we 
 might war more readily. Acting upon the principle that 
 war is to come war the rule, peace the exception. Placing 
 ourselves in non-intercourse, in a self-reliant, and defiant 
 position ; declaring our expectation of, and readiness for 
 war ; cultivating the jealousies and the antagonistic feel- 
 ings that naturally must develope themselves under such 
 circumstances. Is this Christianity ? is it civilization ? 
 is it, this system at once absurd and barbarous, true politi- 
 cal economy ? Is this the policy that should characterize 
 the age we live in, and the principles that should govern 
 this nation, the Republic of the 19th century, and par 
 excellence, the humanity ameliorating exemplar of the 
 world ? Is it not rather a sacrifice of national indepen- 
 dence and dignity ? Rather let us cherish the principles 
 of free trade, whose tendency is to promote intercourse, to 
 cause each nation to feel how necessary the benefits that 
 can be conferred by the others are to its happiness, to 
 its advancement, that shall cause each people to benefit 
 morally by the enlightenment of the other. 
 
 Is each man, each family sufficient of itself, independent 
 of others ? Did nature intend this ? The shoemaker needs 
 the hatter the tailor the weaver, &c. 
 
 It is soon enough to put the protective policy into 
 operation when war comes. It has been an effect of the 
 necessities created by war, not of the sober judgment that 
 dictates the policy of peace. During the war of 1812-15, 
 the wants of government forced up the United States tariff 
 to a rate so high that various producing interests sprang 
 into a precocious existence, which, upon the return of 
 
WAR. 169 
 
 peace, required, asked, and obtained a protection that 
 enabled them to sustain themselves during the long period 
 of 34 years of peace that has followed. A period when no 
 belligerent obstacle has interposed to prevent the purchase 
 by consumers, from foreign producers, of all those produc- 
 tions at a much lower rate than the protection-created 
 prices that have prevailed for the greater portion of the 
 time. 
 
 Now, as we have seen that with the continuance of pro- 
 tection, the necessity for its support is, as a general rule, 
 becoming more and more felt ; and that the absence of 
 the assistance afforded by protection is the best guarantee 
 for the healthy growth of those branches of production in- 
 digenous to the country, it is apparent that the imposition, 
 besides being laid on antecedently, must be imposed not 
 only during the war, but for an indefinite period after its 
 termination. Evidently it is a poor preparation for war, 
 to commence levying the war tax for an indefinite term of 
 years previous to the commencement of hostilities. A 
 tax that, under the tariff system of taxation, no amount of 
 previously sustained home producing industry will super- 
 sede the necessity for imposing when war comes. Me- 
 thinks it were wiser policy to prepare for war by amassing 
 a store of wealth from the anticipated enemies for some 
 time previous to the war, by means of a profitable com- 
 merce and exchange of products; and, when war* is de- 
 clared, to impose the tax not sooner. " In time of peace, 
 prepare for war," by such a policy as will have the three- 
 fold effect of rendering war least likely to occur, acquiring 
 the " sinews," and at the same time, through extension of 
 commercial relations, strengthening the maritime power, 
 that if war should come, it may be met with fair assurance of 
 8 
 
170 INDUSTRIAL EXCHANGES. 
 
 success. It must be other preparation than that which 
 cramps the resources of the country, wastes labor, and 
 weakens the power of consumption and protection. It is 
 said of the French Admiral Duperre, that, when he was 
 asked to increase the National marine, he answered: 
 " Apply to my colleague, the minister of Commerce ; it 
 comes within his jurisdiction." 
 
 Free exchange is the pacific strife in which all men will 
 contend for the benefit of society, contributing each their 
 quota, and forced by competition to be equally vigilant, 
 skilful, and progressive. 
 
 Protection induces the violation of law and engenders im- 
 morality. Whoever has travelled in Europe must have felt 
 that custom-houses encircle a country with a girdle of vices. 
 In England, where the duty laid on tobacco is enormous, it 
 was proved before a committee, that there are schools in 
 London, managed by women, where is taught the most 
 skilful manner of smuggling tobacco. Before the same 
 committee it was also proved, that in three years there had 
 been 1500 individuals punished for smuggling that article. 
 
 Indian handkerchiefs were formerly prohibited by the 
 English tariff. Joseph Hume once in the House of Com- 
 mons, called upon each member to draw his handkerchief 
 from his pocket and every honorable member drew forth 
 an Indian handkerchief. The prohibition is now abolished. 
 The higher the duties, the more they are defrauded. In 
 Spain, regular contralando establishments are organized for 
 the business of smuggling. There are those that deliver 
 10,000 dollars worth of merchandise at a time, imported in 
 every conceivable manner. The contrabandista makes his 
 occupation a science, an art, a profession, practised on a 
 grand scale, and occupying all ages and sexes. It be- 
 
VIOLATED LAWS. 171 
 
 comes a widely practised profession to teach violation of 
 the laws. 
 
 Protection destroys what free trade would save. In Eng- 
 land, large quantities of merchandise have been annually 
 thrown into the Thames, in consequence of being prohi- 
 bited from importation, and of the heavy duty weighing 
 upon them. One million pounds, in round numbers, of 
 foreign butter are said to have been destroyed, because 
 the duty precluded its entrance into the country. Is this 
 law justifiable, is it right, this law that causes destruction, 
 nay requires it ? As well might we justify a law that 
 would authorize the incendiary to apply the torch to a 
 neighbor's dwelling, and wantonly destroy his property. 
 
 I have seen the vandalism practised by English cus- 
 toms' officers destroying, in obedience to law, such im- 
 ported books as were reprints of British works. It is na- 
 tural that ignorance and depravity should abound where 
 such acts are legally sanctioned, in order that a produc- 
 tion of literature may be maintained at a high price, that 
 keeps it out of the reach of all but the few ; prohibiting 
 the introduction and distribution among the people of the 
 cheaper editions of intellectual aliment, from out of the 
 consumption of which they would in turn become produ- 
 cers of the mind's food a production more likely to be 
 varied and valuable because of the greater number and 
 variety of educated intellects brought to the work. 
 
 It has been estimated at what an enormous cost protec- 
 tion is sustained in this country, even under the compara- 
 tively free trade tariff of 1846. After deducting from the 
 amount annually paid by the people, the revenue that goes 
 into the federal treasury, a sum is left that would enable 
 the government to pay the wages at one dollar per day of 
 
172 INDUSTRIAL EXCHANGES. 
 
 200,000 workmen, supposing so many were thrown out 
 of employment by the abolition of protection. Sup- 
 pose that government were to employ these workmen, 
 instead of supporting them in idleness. Their labor would 
 build yearly a large and handsome city, capable of containing 
 a population of 50,000 people. Is it not a destructive sys- 
 tem that in effect destroys such a city per annum, the loss 
 devolving upon the consuming masses ? Protection destroys 
 secretly, incendiarism openly. If the effects of the protec- 
 tion exhibited themselves in the glare of the terrible de- 
 struction that marks the progress of the conflagration, 
 would it be submitted to ? 
 
 The Dutch East India Company formerly, having a 
 monopoly of the Spice Islands, in order to keep up the de- 
 mand at high prices, used to limit the supply. But how ? 
 Not literally, as protection limits supply of certain commo- 
 dities in many countries, by imposing a prohibitory duty 
 the circumstances of the case prevented that form of 
 keeping up demand and value by limiting supply ; they 
 accomplished the same end by destroying a portion of the 
 crop whenever a good season increased the quantity be- 
 yond what the world would consume at their high prices. 
 
 In both cases an artificial value above what would have 
 been the natural is created ; the value of the commodities 
 exchanged for those artificially raised being depressed 
 in a ratio with the rise, to the loss of all furnishing those 
 commodities so exchanged and depressed. 
 
 There are various forms of protection, but there is none 
 the less a wilful casting away of gifts bestowed by a boun- 
 tiful providence. Whether it be by murder in the first 
 degree, or by manslaughter, a life is neverthelessj sa- 
 crificed. 
 
AU V 
 
 -. 
 
 XIX. 
 
 DEMOCRACY. 
 
 BROAD as the entire universe, high as man's loftiest 
 aspiration, deep as the profoundest mystery of nature's 
 arcana, democracy is not an affair of mere partisanship 
 " No pent up Utica confines its powers." Democracy is 
 universalization ; democracy is progress, is CHRISTIANITY. 
 
 The social element is entering as it never has done 
 before into all the theories and practices of man. Political 
 science is more deeply imbued with it ; in the recesses of 
 men's hearts political measures are canvassed with refer- 
 ence to their social influences ; they are being regarded 
 less as questions of party or expediency, of dollars and 
 cents, than as affairs of socially democratic tendencies. 
 Old systems of feudality and restriction are being changed 
 for new, feature by feature. 
 
 Whatever has a tendency to encourage a class at the 
 expense of the people at large, is well known to be at 
 variance with the spirit of democratic institutions. In the 
 science of political government, this country has put in 
 practice what we believe to be the ne plus ultra of govern- 
 mental formula democracy. It is consistent for it to adopt, 
 in the economic science of industry, the formula of con- 
 sumption. The principle of " the greatest good to the 
 
174 SOCIAL REMEDIES. 
 
 greatest number" prevails here in the universal suffrage, 
 freedom of conscience, and other features of our demo- 
 cratic institutions. To extend the principle, so acknow- 
 ledged to be just, is, in securing the interest of consumers, 
 to substitute for the aristocracy of production the democracy 
 of consumption. It is cheapness the people require, it is 
 cheapness humanity demands. 
 
 The principle which has taken firm root, and is spread- 
 ing itself, even to teaching the world that the dispensation 
 of political rights among the whole people is more just, 
 than confining them absolutely to a few, is going further, 
 and convincing the world that those industrial regulations 
 cherishing a limited number of producers at the expense 
 of the masses of consumers, are likewise unjust and untrue. 
 Political economy is being democratized with the other 
 sciences. Since the adoption of the free trade principle, 
 to the extent of abolishing the corn laws in England, we 
 see it is the people who have been benefited. It is not the 
 nobility who have eaten all the provisions. 
 
 The law of Providence has made the strong and the 
 weak, the young and the old, the rich and the poor ; has 
 spread over the globe a variety, giving to each region its 
 peculiar advantage. All evidently for the purpose of 
 effecting exchange, intercommunication, and by a simple 
 law accomplishing this for a wise purpose, for the benefits 
 to grow out of the intercourse, the equalization that follows 
 upon the mutual dependence, as it exists individually in 
 society between the several trades and professions. Free 
 international intercourse will level the aristocracy of 
 nations, as the press, steam, and other facilities are 
 levelling that of classes. The towering height upon 
 which the nobility sat in august dignity? dispensing grace 
 
DEMOCRACY. 175 
 
 and patronage to the peasantry of the fields below them, 
 began to totter when the railway first gave laborers power 
 to change from place to place, and shift employers at will, 
 and when the press placed newspapers in the hands of all 
 men. 
 
 England has been often referred to as an evidence of 
 the prosperity effected by the protective system ; but these 
 fail to glance at the reverse of the medal, where the horri- 
 ble suffering, pauperism, and misery show at what a cost 
 this partial prosperity has been purchased. There, where 
 under an undue appropriation of the natural agent of pro- 
 duction, the division of labor's product is unjust, immense 
 fortunes rise up in the midst of great destitution. The 
 pi under of her own people is a kindred source of wealth to 
 that derived by nations from foreign conquest, and the 
 rapine of war. To her may be applied the language of 
 Macpherson, used with reference to the Romans : " Their 
 luxuries cannot be considered as the summit of a general 
 scale of prosperity ; it was a scale graduated but by one 
 division, which separated immense wealth and power from 
 abject slavery, wretchedness, and want." Statistics have 
 shown us what has there been gained for labor by protec- 
 tion, and particularly in the acquisition of articles of neces- 
 sity. Prices have risen, whilst the people's wages have 
 diminished. This state of things untaxed exchanges will 
 go far to terminate in England, and would have already, 
 if that country had not merited the accusation of manufac- 
 turing the doctrines of free trade, like other products, for 
 exportation, without applying them at home. Unfortu- 
 nately for them, her productions and her doctrines have 
 been alike withheld from the common use of her oppressed 
 people. 
 
176 SOCIAL REMEDIES. 
 
 How will free trade specially operate to reduce the 
 landed aristocracy to a level with other interests in 
 England ? The land proprietors produce the grain, which 
 now sells, after several short and one good harvest, and 
 under a duty, at high prices. The taxes and charges 
 upon their estates and means of production, are equal to 
 nearly a moiety of these prices. Free trade in corn is 
 about to pour breadstuffs into the country, at a rate that 
 only requires the collateral aid of plentiful harvests there, 
 to reduce prices to a figure that will not stand so much 
 above the amount of taxes and charges as to cover their 
 expenses, except upon a diminished scale, much below the 
 extravagant expenditures it has been their wont to indulge 
 in. Then the proud castles must topple upon their feudal 
 foundations, until, yielding to the force of circumstances, 
 the falling fragments will ere long be seen scattered about 
 the plain, each reaching no higher than the modest villas 
 of the middle classes* that dot the green vales of old 
 England. The immense estates of the aristocracy will, 
 to a greater or less extent, undergo a process of subdivision 
 and distribution among a greater number of holders. 
 Free trade equalizes out of the abundance it produces 
 the consuming millions profit freedom of exchange is 
 democratic. 
 
 It is destined in another manner to promote the freedom 
 of the English people. Prices of agricultural produce 
 coming down under the effect of foreign competition, the 
 landlords will be desirous of retaining tenants who pay 
 their rents : so much so as to preclude the exercise of 
 that coercion that may have heretofore been practised in 
 directing the course taken by the tenant's suffrage. 
 
 In England, where various sorts of protection have 
 
DEMOCRACY. 177 
 
 combined to furnish an aristocracy with luxuries while 
 a people want necessaries, land and capital have combined 
 to maintain a supremacy over nations, to monopolize 
 all trade, at the expense of labor. And labor, writhing 
 in its own sweat and blood, has consented to exhaust itself 
 in agonizing efforts, because capital and land have ever 
 held up to its contemplation the pretext that it was 
 necessary to manufacture cheaper than all other nations 
 for the world's consumption. And the slaves of labor 
 have called for protection, even while it was drawing 
 them on to famine, unconscious that it was at their cost 
 England has maintained for generations the feudality 
 of capital, and has for years poured its fabrics into Brazil 
 at a loss of thirty per cent. 
 
 With Americans, by God's grace, nothing but the 
 laissez faire, as yet, is needed. But in the old world, 
 where ages of protection for court, for feudal lord, for 
 tythe-fed prelate, and for capitalist, have done their evil 
 work, I would not say too hastily, that laissez faire will 
 do. There labor, third element, long borne down beneath 
 the weight of capital and land, sore, bruised, and crushed 
 in body and in spirit, is sick, and it is a serious, and as 
 yet, an unresolved question if it possesses recuperative 
 force sufficient to enable it to rise for healthy action 
 without a medicine to cure its ills. There excessive 
 population creating much competition in labor, with a 
 product from the soil appropriated most unequally through 
 the operation of radical wrong existing at the foundations 
 of society, serious measures earnestly adopted, will pro- 
 bably be necessary ; stern, economical principles must 
 be unflinchingly applied in accordance with the dictates 
 
 8* 
 
178 SOCIAL REMEDIES. 
 
 of an enlightened humanity, before improvement will 
 have begun its efficient action. 
 
 The people of the United States, under existing institu- 
 tions, enjoy the two grand features of educational facilities 
 and social position. These, combined with abundant pro- 
 duction, constitute the three elementary wants of man 
 necessary to his progressive development, moral and phy- 
 sical. Whatever tends to entrench upon either of these 
 inflicts a wound upon the vitality of the social system. 
 
 As the principle of free but unprotected action works 
 with individuals, so does it with communities. How has 
 this principle been found to operate with us ? Under our 
 institutions, whose character is of this sort, we will find 
 that most of our greatest, ablest, most efficient men our 
 intellectual luminaries have been the poor boys, whose 
 own unrestricted exertions were their sole protection against 
 the competition they encountered ; not nursed by fortune 
 nor the privilege of class, they have achieved those ex- 
 cellences that have commanded the admiration of man- 
 kind. Then is it not a false theory, that the enterprise of 
 the nation needs that protection which its sons as indi- 
 viduals have scorned to ask. and felt no need of ? Labor 
 is holy. Degrade not the American working man by the 
 charge of dependence upon the tariff impositions levied 
 upon his fellow citizens to sustain him in his labor. It is 
 not the alms of protection the laborer wants, but justice ; a 
 system that tends to pauperism is not the one to benefit 
 him. It has been admitted by those who advocate protec- 
 tion, that the machinery of Europe has scarcely ever been 
 sent to us without American ingenuity returning it to her 
 with improvements. 
 
DEMOCRACY. 179 
 
 What has the laissez faire done for us politically ? In 
 the words of that arch-organ of aristocracy, the London 
 Times, speaking of our constitution : " It has accomplished 
 its principal objects, and fostered the growth of a powerful 
 and prosperous nation." The world presents no such 
 spectacle of national advance in all branches of improve- 
 ment ; and this example of the capacity of man for self- 
 government, when the antecedents have partaken of the 
 necessarily preparatory character, is of inestimable value 
 to mankind, and clearly indicates the mission of this 
 nation. It is evidently to furnish the world with a pre- 
 cedent for political and social institutions ; and, through 
 mutual intercourse, to impart of her own character to 
 others now holding a position less advanced in these re- 
 spects. To restrict commercial intercourse is to retard 
 the progress of what is designed. 
 
 Free institutions aid each other, all conducing to en- 
 hance cheapness. Free trade, hand to hand with the 
 others, has nothing to fear for itself. It has been stated, 
 that some 5000 watchmakers were emigrating from Neuf- 
 chatel to this country. They are led hither by a desire to 
 share in the benefits of our institutions, in so many respects 
 free. These institutions thus call in the aptitudes, the fa- 
 cilities of other regions to range themselves alongside, and 
 increase the number of those channels in which produc- 
 tion may labor efficiently and successfully against the 
 competition of the world. CAt^&Wjfa) ~ 
 
 In the general revulsion which in Elad is breaking 
 up old political and financial systems, and forming new, it 
 is to be hoped that the element of free exchange may be 
 infused universally into the new systems. The new spirit 
 abroad, or rather its advanced manifestation, may consist- 
 
180 SOCIAL REMEDIES. 
 
 ently adopt the principle of free exchange. Washington, 
 Hamilton, and Napoleon, are said to have opposed it. Yet, 
 while these men were the embodiments of free republican 
 principles, they more or less unconsciously represented the 
 conservative spirit that had for ages been paramount. In 
 the latter it lifted him upon the imperial throne, as a con- 
 sequence, or by means of the unpreparedness of the gene- 
 ral mind for the full practice of that republicanism, he 
 doubtless appreciated and loved as the destiny of France. 
 Napoleon's republican sentiments were of the practical for 
 the Europe of that day his empire the reaction of excess, 
 the oscillation of the pendulum. And the new Napoleon, 
 is not his the republicanism of this day ? It is hitherward 
 those countries, now in the throes of regeneration, look for 
 observatidn of the excellences democracy can yield. 
 
 In this age, when force is circumscribed, despotism has 
 instinctively appropriated to its use the instrument of 
 tariffs, as well calculated unperceived to further unjust 
 designs. It is not so strange that protection should have 
 existed in Europe, where the power of making laws has 
 been in the hands of a few who were profited ; when the 
 laboring masses, who were the sufferers by protection, have 
 had no voice in framing the laws. But in this country, 
 where, comparatively, every man is a constituent of the 
 government and the laws, it is passing strange that it should 
 be advocated. It is only to be accounted for on the 
 ground of ignorance of effects, and is another evidence of 
 thejforce of example, and of the obstinacy with which error, 
 inherited and bearing long prescriptive sway, clings to the 
 human mind. 
 
 I have said that laissezfaire is sufficient for us. As yet 
 it is. But if we permit a cessation of the effort at stran- 
 
DEMOCRACY. 181 
 
 gling the young worm protection, that, dropped from the 
 spawn of the old world, had begun to grow and gain a 
 prideful strength wherewith to gnaw the bud of our fair 
 promise and spread disease throughout our healthy vitals, 
 we may get past the virtue of this healthy remedy. Under 
 the genial warmth of the sun of Christianity we have cul- 
 tivated the Tree of Liberty to a spreading growth. May 
 it not be deprived of that comely branch just sprouting from 
 its ample trunk free trade. It grows, that noble branch, 
 and yields of its fruit for the profitable gathering of the 
 several intercommunicating states ; but if the worm of pro- 
 tection be permitted to eat its way, much that would other- 
 wise come to fair and nutritious perfection will fall to 
 earth in foul decay. 
 
 Advanced in physical and moral power as she is, it de- 
 volves upon the United States, in establishing the true 
 " American system," to realize the happiest effort of the 
 genius of commerce, by throwing open her ports to univer- 
 sal free trade : in return to gather unto herself the fruits 
 of every clime, the profits of every nation's labor, whilst 
 paying them in kind. It is fitting that it should be the 
 glory of this country to be the first among the great nations 
 to achieve to the full this step towards the consummation 
 of democracy. 
 
 Here, in the broad valley of the " Father of Waters," 
 should rise that universal shout of triumphant humanity, 
 which, echoing and re-echoing along the ragged peaks of 
 Jura, and the lofty heights of the Ural, will yet awaken the 
 millions of China from their dream of celestial exclusive- 
 ness, and arouse the men of Japan to burst their self-im- 
 posed bonds, as they throw wide open their ports to the 
 free entry of all the world ! 
 
XX. 
 
 OVER. GOVERNING. 
 
 WHAT, besides freedom of exchange, is embraced in the 
 laissez faire, so desirable and sufficient for the people of 
 this country ? It is not fitting here to do more than 
 enumerate some of the analogies and antagonists contrast- 
 ed with free exchange. Were the author competent to the 
 task, there is not space within the prescribed limits of this 
 volume, for the full consideration of a question that, in its 
 details, involves all the subjects coming within the pro- 
 vince of government, and embraces various shades of ex- 
 pediency. Thence comes the call for a degree of intelli- 
 gence in the people, whose business it is to define the 
 metes and bounds of government, and in those who legis- 
 late under and administer its functions, that embraces a 
 wide field of acquirement, unhappily not always com- 
 passed. 
 
 Hopefully we look for the time when an enlightened 
 statesmanship throughout the Christian world shall assume 
 and practise to the full the theory of humanity, so far 
 as demanded by the intelligent call of the people, avoiding 
 the ultraisms decked with its name. Heretofore, such has 
 been much of the action, that the term politician is, even 
 in this country, a synonyme for the contracted cunning of 
 
OVER-GOVERNING. 13 
 
 an intriguing selfishness, that talks of public welfare while 
 thinking only of individual advantage. And this is not all 
 undeserved. Without an idea beyond self and party, 
 whose rewards shall pamper self, politicians, like the 
 ^Eolian harp, that gives forth its musical tones, all uncon- 
 scious of their nature and effects, mounted upon their 
 stump pedestals, discourse in soft and sounding strains the 
 notes of patriotism, of love of labor, and of glory, as the 
 wind of popular sentiment bloweth high or low upon their 
 own insensate selves. Catching the tones with which the 
 breeze is laden, as they are wafted towards them, these in- 
 struments of sound are without conception of the spirit of 
 the music that dwells within the great heart of humanity, 
 and is breathing its tones in a spontaneous education in 
 and around the minds and hearts of the masses. 
 
 The Press is not free from this condition. It is the 
 tongue of progress, but not the brain. It is the great car- 
 rier of ideas and sentiments which, in the minds and 
 hearts of the people, have gone out, and are still advancing 
 before it in the great march of human progress. Public 
 sentiment leads and directs the press, which, in general, 
 forms it so far as in operating as a medium of communica- 
 tion between individual minds, embodying and giving ex- 
 pression to the prevailing sentiments, and bringing them 
 directly under the notice of each and all, what is indi- 
 vidual becomes, through its agency, general. This is no 
 unimportant part, but one as weighty as is the difference 
 between promulgating the good and circulating the bad. 
 As the distributing agent, for promoting spontaneous educa- 
 tion going on among the masses, it is a powerful instru- 
 ment for good or evil ; an agent with sublime capacities 
 for educating, under the dominion of the Great Master, 
 Liberty, taught by which most efficient of teachers, the 
 
184 SOCIAL REMEDIES. 
 
 duty that waits upon every right is understood by citizens ; 
 and with the acquisition of each right, the corresponding 
 duty is not likely to be violated. 
 
 Freedom of exchange, it cannot, with truth, be denied, 
 is one of those rights for which civilized man is prepared, 
 and therefore it is ultra-conservatism to withhold, and is 
 not ultra-radicalism to grant it. Disturbing by arbitrary 
 equal distributions the right to acquisition of property, 
 through useful competition, is ultra- radicalism. Free ex- 
 change, on the contrary, excites an universal competition, 
 a cheering rivalry, reducing prices, facilitating invention, 
 promoting the useful arts, and scattering abroad, within 
 reach of all, the gratification of all wants. The right to 
 have a voice in making the laws, the right of every citizen 
 to enter into free and open competition for the highest 
 offices that administer those laws, and other rights, are with- 
 held, in many countries, by the force of this ultra-conser- 
 vatism, which denies the right to free exchange. Ultra- 
 conservatism and protection are synonymous. True 
 liberty, the elements of which, both social and political, 
 Americans enjoy, lies in neither of these ultras, radical or 
 conservative ; either of which governs too much. The 
 radical system of the Right to Labor, now agitating in 
 France, authorizing any person to demand work, and re- 
 quiring the state to give it, or payment instead, may be 
 instanced as an ultraism that has no analogy with freedom 
 of exchange. It would be an extension of the poor-house 
 system, beyond its legitimate scope, to a degree that would 
 effect a serious wound upon individual energy and self- 
 reliance, upon industrial and social progression ; and in- 
 creasing the non-producing drones in the social hive, 
 would aggravate the evil sought to be remedied. 
 
 For the state to guarantee the right to labor, the securing 
 
OVER-GOVERNING. 185 
 
 of physical aliment, is of that governing too much, which 
 violates liberty. It is as much so as is the establishment by 
 the state of church revenues and government for securing 
 the spiritual aliment of its people; and more so than the 
 establishing, endowing, and sustaining of great universities 
 for supplying the more refined intellectual aliment of its 
 youth, and keeping up the sacred- fire of a high degree of 
 knowledge. It is analogous to the overgoverning of fixing 
 by law a maximum rate of wages, forbidding combinations 
 of laborers to obtain higher rates, which in turn is kindred 
 to that of establishing a maximum rate of interest, declar- 
 ing that the profit on money shall be limited to a certain 
 rate, whilst all other commodities are justly allowed, sans 
 protection, to rise and fall with the natural operation of the 
 laws of trade. And to these is analogous that much 
 abused power of governments a power which all people 
 in amended constitutions will probably yet wrest from the 
 grasp of legislative prerogative to manufacture a repre- 
 sentative of value for general use that bears none of the 
 value imparted by cost of production and a supply regu- 
 lated by a natural demand. Conferring upon such indi- 
 viduals as may be employed by the people to administer 
 the public business privileges not enjoyed by their fellow 
 citizens, especially when liable to abuse like the franking 
 privilege, is also inconsistent with the laissez faire which 
 acknowledges freedom of exchange. 
 
 In the United States, where the public have the resour- 
 ces, possess the intelligence to appreciate the objects, and 
 are capable from practice of originating and conducting 
 such great enterprises as are required by the general 
 interest, the people would be shocked atr the proposition of 
 government to assume, by a stretch of over-governing, the 
 
186 SOCIAL REMEDIES. 
 
 ownership and management of all the railways, or of the 
 great farms or manufactories ; in short, any of the great 
 direct agencies of production not too large to be contracted 
 or worked by the capital of companies or individuals. 
 
 Opposition would also be excited at witnessing the 
 government undertake that governing too much which 
 would be practised in limiting by law the amount an 
 individual might acquire by inheritance a measure 
 which has been approved by high foreign economical 
 authority. How little any such law is necessary under 
 our free system of laissez faire is attested by the following 
 from LyelUs Travels in America : " Munificent bequests 
 and donations for public purposes, whether charitable or 
 educational, form a striking feature in the modern history 
 of the United States, and especially of New England. 
 Not only is it common for rich capitalists to leave by will 
 a portion of their fortunes towards the endowment of 
 national institutions, but individuals during their life-time 
 make magnificent grants of money for the same objects. 
 There is here no compulsory law for the equal partition of 
 property among children, as in France, and, on the other 
 hand, no custom of entail or primogeniture, as in England, 
 so that the affluent feel themselves at liberty to share their 
 wealth between their kindred and the public, it being 
 impossible to found a family ; and parents having fre- 
 quently the happiness of seeing all their children well 
 provided for and independent long before their death. I 
 have seen a list of. bequests and donations made during the 
 last thirty years for the benefit of religious, charitable, and 
 literary institutions in the State of Massachusetts alone, 
 and they amounted to no less than six millions of dollars." 
 The extension of the principle leads to the total abolition 
 

 OVER-GOVERNING. 187 
 
 of the right of inheritance, which is in fact, like the right 
 to labor, one of the theories of the socialism of the day, 
 that would extend the principle to an extreme, and invest 
 all the sources of wealth in the state a dangerous cen- 
 tralization of a mighty, of all power, and destructive of all 
 individual independence, sacrificed to the worst of des- 
 potisms. 
 
 Consumption and Labor are one all over-governing 
 is one in opposition and oppression. 
 
 Gradually, step by step, we are witnessing the with- 
 drawal from the hands of the state, to be distributed among 
 the people, and conducted by private enterprise, not only 
 the political action, but the various institutions and enter- 
 prises, whose object and effect has been the improvement 
 or convenience of the people. We now see a leading 
 postal agency, the magnetic telegraph, conducted by indi- 
 vidual enterprise. It is a popular maxim that it costs the 
 government more to do anything than it does individuals. 
 It is generally believed, with much truth, that enterprises 
 are conducted more expeditiously, with less expense, and 
 with less annoyance to the public, by individuals than by 
 the government. The variety of methods, and the various 
 capabilities brought to the task of accomplishing an enter- 
 prise by individuals, afford probabilities for its being much 
 better done .than when the government method, and the 
 administration of its set of officials, only are employed. 
 The absence of a personal interest in those administering, 
 operates against successful performance. 
 
 The subject of governmental reform, which embraces 
 with free exchange those kindred and those antagonistic 
 principles and measures just glanced at, resolves itself 
 into the compound proposition of what properly enters into 
 
188 SOCIAL REMEDIES. 
 
 the province of government, and how much of that admit- 
 ted properly belongs to the people, unreleased to the action 
 of their delegated representatives, in the several branches 
 of government. Therefore, under this latter proposition, 
 another and deeper consideration of the subject should not 
 be overlooked. This is respecting the individuation of the 
 independent human being. Each possesses an inward 
 consciousness, there is a certain extent of domain in the 
 life of each person, a sacred temple, embracing himself, 
 his family, and property, upon which no power, whether 
 of one or of the public, should be permitted to encroach 
 intrusively. The action or influence of government should 
 not be brought to bear upon this private life, to control it. 
 The truth of the principle was acknowledged by this coun- 
 try in the early severance of church from state. But there 
 are other avenues through which the abuse may find ad- 
 mission. The tendency of public opinion is to invest all 
 power in the masses. With the abundant good effects of 
 this democratizing principle, there is the attendant danger 
 of a suppression of that originality of mind and individu- 
 ality of character so necessary to progressive improvement, 
 inasmuch as the public are ready to impose their opinions 
 and tastes upon individuals, coercing them to their views, 
 through the tyranny of the majority, exercised by dele- 
 gates quite ready to commit acts of injustice, in order to 
 gain popularity with those they represent. The effect is 
 to bind and sacrifice what it should be the aim of purely 
 democratic institutions to cherish individual independence 
 of thought and speech (a sacrifice sometimes exhibited in 
 the slavery of party) ; and therefore in a democracy it is 
 safest to limit, as far as possible, the functions of govern- 
 ment, leaving to individual enterprise whatever can, be 
 
OVER-GOVERNING. 189 
 
 administered without the agency of the representatives of 
 the people collectively. In other words, it is vitally essen- 
 tial to the liberty of the human being in this country, that 
 the legislative and administrative action should be consti- 
 tutionally confined to the smallest possible extent. 
 
 A happy power of neutralizing excessive action, when 
 it may have been committed by the legislative branch, 
 exists in the veto power. As long as the constitutional 
 imperfections that exist are in force, enabling government 
 to act where they should have no power to act at all in 
 the premises, the beneficial effects of such checks and 
 counter checks in the neutralization they effect, will re- 
 duce largely the field of over-governing motion. 
 
 The right of individuals to express their opinions of 
 what is right and wrong is one thing ; the investiture of 
 government with power of coercion in the premises is 
 another, even though that government be the embodiment 
 of a majority. 
 
 In short, all acts of a federal government having a cen- 
 tralizing tendency, that prevent or obstruct the diffusion 
 among the people of the controlling power over the agents 
 of production, land, capital, and labor, and their results ; 
 for, as is the principle between individuals and state, so in 
 a confederated system of states, whatever may be done by 
 these separately, should not be assumed by the general 
 government ; and, in the morale as well as the physique, 
 that withdraw their control over the political, religious, 
 educational, and judicial departments, and consolidate it 
 in a central power ; and all conferred or assumed * func- 
 tions that, intermeddling with individuals, go further than 
 to prevent the entrenchment by one citizen, through force, 
 fraud, or negligence, upon the rights of another to his in- 
 
190 SOCIAL REMEDIES. 
 
 jury, are, as a general rule, the action of excessive govern- 
 ment. 
 
 Government should leave to a people the instrument of 
 liberty ; and, under the local governments, they should be 
 instructed through the education afforded to all by com- 
 mon schools leaving it optional with parents, no expense 
 existing, to send their children or not how to wield the 
 instrument. Beyond this all interference is dangerous, 
 and, with limited exceptions, liable to encroach upon the 
 domain of freedom. The practical education, a most ne- 
 cessary feature, that results from the direct individual par- 
 ticipation in the affairs of government by each constituent 
 of the democracy thinking and acting for himself in his 
 own local as well as in the general administration, will do 
 the rest in developing the freeman. 
 
 Freedom is incomplete without education. Whatever 
 the laws may prescribe or forbid, if it does not meet with 
 response in the moral consciousness of the individual, if 
 what the law expresses is not confirmed ^understandingly 
 by the intelligent conscience of the subject, the law is 
 occupying the position of tyrant master, the subject citizen 
 fills that of slave. It is important to humanity that the in- 
 crease of education should everywhere be co-extensive 
 with the growth and spread of the democratic principle. 
 To its being so here may be attributed the progress re- 
 vealed in the history of this country. As long as it shall 
 be so, the day will not arrive when he that cannot write 
 shall ostracize an Aristides because he may be just. 
 
XXI. 
 
 SOCIALISMS FREE L A BOR PROGRE SS. 
 
 THE attempts to reconstruct society exhibit, many of 
 them, scenes of energies wasted upon impracticable 
 theories. Instead of taking man in his individuality, they 
 first require that he should sink his natural love of per- 
 sonal independence, forget jealousy and distrust, be unsel- 
 fish, in short, become other than man, before he can occupy 
 the field of action prepared for him. Some would burst 
 the bonds of that organization supreme wisdom has formed, 
 for binding together, by the tie of natural affections, the 
 families, as integral parts of the public body, through 
 them securing its moral integrity ; and for holding the in- 
 dividual to the service of all through his labors for particu- 
 lar self, thus preserving the social integrity of the whole. 
 
 The improvements to be sought are those which are 
 being wrought by the increasing intelligence of free men, 
 and which, in extending and perfecting the forms of their 
 business relations in the various departments of production, 
 exchange, consumption, and insurance, thrill along the elec- 
 tric cord of interest, and are felt at the hearth-stones of all 
 conditions, from the millionaire to the humblest artisan. The 
 various relations of man with man where services, values, 
 and equivalents are involved; these relations, as estab- 
 
19iJ SOCIAL REMEDIES. 
 
 lished and fostered by unrestricted commerce and its ad- 
 juncts in all branches, in all the forms of mutual inter- 
 course, where profit and security for families and indi- 
 viduals are sought, and losses avoided, these will thrive. 
 They are practicable, are consistent with the nature of 
 things, and they will flourish and spread while men pos- 
 sess the power of calculation and love of acquisition. 
 Their variety will increase, and their character im- 
 prove, with the increase of that intelligence ever following 
 in the footsteps of Christianity and free government. 
 
 None of those chimerical schemes of association, that 
 call for the change of existing relations, and an entire 
 subversion of the institutions which constitute the corner 
 stones of society, can exist, save in the speculations of the 
 dreamer. No ism seeking to fuse into an ill-assorted 
 mass the portions designed to remain inviolate, each within 
 its sacred boundary, will serve any other purpose than to 
 aiford vent for working off the froth of zealous eccentricity, 
 or to furnish material for the schemes of politicians. 
 
 If we would accomplish aught in the cause of humanity, 
 we must gain man to our cause through his interest that 
 principle stronger than all others. That, only, can prove 
 to be the true social science, which, while it invites man 
 to the extremity of individual action voluntarily laboring 
 for his special ends, at the same time leaving each to find 
 the pursuit congenial to his tastes, habits, capacity, or 
 condition, accomplishes the collective improvement of the 
 species. Is it said that this theory of laboring only for self, 
 involves a denial of the practicability of Christianity, which 
 requires man to become unselfish, in order to practise its 
 requirements, to turn the other when smitten upon one 
 cheek, and do unto others as he would they should do urto 
 
SOCIALISMS. 193 
 
 him ? I reply, in requiring these, Christianity exacts no 
 sacrifice of individuality, no merging of identity in a 
 physical and moral agglomeration. It is self practising 
 obedience to a divine law for the saving of self; it is a 
 spiritual effort where mind triumphs over matter, because 
 of a conviction that self is to be spiritually benefited. 
 But, in a material capacity, there is no total abnegation ; 
 man will labor only for an immediate interest, because his 
 individuality of self is composed of his property and 
 family, as well as the more intimate immaterial mind and 
 material body, and the moment he ceases to exert his 
 faculties for these, there is no longer provision for their 
 sustenance, and he ceases to exist. This alternative, the 
 first law of nature, the divine institution of marriage, con- 
 secrated by practice of the mother of Christ himself, and 
 the force of the natural affections, all alike forbid. 
 
 Man should be taken as he is, taken with the ties of 
 family upon him, spurring him on to individual competi- 
 tion. His improvement must be worked out by himself; 
 no power is great enough, save Divine, and that power has 
 ordained that he shall do his own work, to do it for him. 
 There will be no new creations ; with the elements that 
 exist, with the qualities that belong to his nature, man 
 must work improvement of those elements arid qualities, 
 and develope himself. Give him equal chances with his 
 fellows, but no protection that shall offer a premium to 
 inferiority of production, to indifferent action. Do not at- 
 tempt to make him equal in all social points with his 
 fellows ; but give him the atmosphere of liberty in which 
 to breathe, remove all barriers between him and his right- 
 ful customer, the world's consumption, and he will find 
 his point d'appui, and make himself an equal in all enjoy. 
 
 9 
 
194 SOCIAL REMEDIES. 
 
 ments his labor may achieve. The uncertainties, the 
 necessities calling upon him to act, the incentives identify- 
 ing him with to, from all these is evolved that sense of 
 enjoyment, and is wrought that varied improvement for 
 which man is placed upon earth to labor. 
 
 All men have been created equal, but they have been 
 invested with gifts (as the excellent and wise Leather- 
 stocking styles them) so different, that though all should 
 set out from the same point, no two would arrive at the 
 same end. All those systems, or theories, which would 
 compress them into one uniform social equality of receipts 
 or expenditures, of habits, tastes, affections, or acquire- 
 ments, will be found to be as impracticable as it would be 
 to force all men to grow to an uniform height by compress- 
 ing their frames into boxes of an equal length. The 
 physical deformities of such an effort would be rivalled by 
 the moral ones. The equality of men is that of rights, but 
 while seeking to raise those now oppressed avoid protecting 
 them in turn : 
 
 For ev'ry right mankind may claim 
 A duty waits to give a name. 
 
 It is the fashion of the day to attach much importance 
 to associative effort. And much is indeed due to it. In 
 certain cases of industrial effort it produces great results. 
 But to what extent it may be profitably adopted socially, 
 is a question yet to be resolved. Individual effort, with 
 the way left open for the free interchange of the results 
 of effort, is calculated to develope truth. Where mind 
 has delved in the mine of science, single-handed exertion 
 has always effected the greatest result in proportion to the 
 labor expended. Experience has shown, that in the 
 
SOCIALISMS. 195 
 
 weighty undertakings of manufacturing, larger production 
 in proportion to the effort of industry has been realized 
 where the operations have been conducted upon a large 
 scale, by machinery, involving the investment of much 
 capital. On the other hand it has been found in agricul- 
 ture, that the most profitable effects have resulted from the 
 system of small farms, where the labor was narrowed 
 down to individual effort, and the limit of co-operation was 
 confined to a single family, owning the land it cultivated. 
 It is " the magic of property which turns sand into gold," 
 says Arthur Young " give a man the secure possession of 
 a bleak rock, and he will turn it into a garden." 
 
 The corporate principle is in operation in this country, 
 and yielding beneficial results where insurance, factories, 
 and fishing voyages are conducted under its action. How 
 far, beyond its present extent, association may be adopted 
 through the contractors of industry admitting laborers to 
 partnerships of a mixed character of wages and profits, is 
 a question between them, is a matter for private contract, 
 not for legislative action, beyond a liberal law of partner- 
 ship. It may doubtless be so adopted to a very considera- 
 ble extent with great success in both points of improving 
 the condition of the laborer, and of achieving a larger 
 production. And mechanics and tradesmen may associate 
 for corporative action so far as their occupations are con- 
 cerned, and conducting the business in squads not too 
 extended, the combinations may successfully divide among 
 themselves the labor and proceeds. It is desirable that 
 such attempts should be made and encouraged, in order 
 that labor may as far as possible attain to its third and 
 rightful position. In early days it occupied the place of 
 slave to capital or power, which in exchange for its efforts 
 
196 SOCIAL REMEDIES. 
 
 accorded food and clothing ; next the place of servant, 
 where wages rewards its services ; it remains for it to 
 attain to the position of partner, receiving the reward of 
 profits. It is true the laborer receives a portion of the 
 profits now, in the form of wages. In order to promote 
 his further advance, it is necessary to increase the demand 
 for his services, and improve his condition ; then his wages 
 rise, his reward is increased. The wages cannot be 
 raised perforce by the social theories, any more than the 
 mercury indicating improved temperature can be properly 
 raised in the thermometer by other means than the exist- 
 ence of greater heat in the surrounding atmosphere. The 
 terms of wages and services are rightful, and this condition 
 must continue until, under the regime of free institutions 
 and general education, the ameliorations and intellectual 
 improvements are effected, that, raising the character of 
 the laborer, his privileges, and his standard of requirements, 
 will gradually, and as it were imperceptibly, enlarge the 
 domain of partnership and ownership, while that of servi- 
 tude recedes in the commercial, mechanical, and agricul- 
 tural departments of productive industry. 
 
 In all the economical achievements necessary to social 
 amelioration, whether it be where the collective action of 
 co-operative association in large manufacturing establish- 
 ments using costly machinery, in the construction of 
 railways and in organizations for insurance, are the effect- 
 ive agencies ; or whether it be in the scientific, agricultural, 
 mechanical, commercial, or other departments where 
 individual enterprise labors most effectively single handed, 
 all are left in principle and fact to competitive individual 
 action, and all the personal incentives have full play. 
 
 The associative theories deprecated in this chapter, are 
 
SOCIALISMS. 197 
 
 of a different character from these. They call for a 
 more extended association. The industrial forms of 
 association just noticed, are liable to be broken up when 
 the reverses of business shall reduce to bankruptcy the 
 particular body, as individuals are affected by like causes. 
 This induces theorists to seek for a form of association 
 going beyond these that simply effect greater production 
 in consequence of their united action, and are liable to 
 dissolution through the ordinary casualties, leaving the 
 individual members cast upon society seeking subsistence. 
 The association sought, in order to be independent of the 
 external world, is required to embrace within itself the 
 production of all the means of subsistence ; it must be an 
 intricate machine with all the processes of production and 
 consumption in operation, and, therefore, complete in all 
 the elements, and their action, constituting society ; must 
 be governed by an organization that shall admit of no 
 departure from the workings of the machine by which it 
 effects all processes of the complicated social organization 
 in the present form. The experiment, when undertaken, 
 soon developes the existence of natural causes that threaten 
 its dissolution. The various qualifications, aptitudes, 
 tastes, &c., of the individual members, early produce 
 their natural fruit of inequalities of acquisition, and the 
 individual particles fly off from the common centre, some 
 rising, and others falling far below the medium. To 
 remedy the difficulty, and keep the erratic particles within 
 the common round of industrial and social action, the 
 abolition of private property is decreed. 
 
 Then is required from every member an equal amount 
 of labor, with the contingent equality in the division of 
 labor's production. Thus stand the theories. But how 
 
198 SOCIAL REMEDIES. 
 
 must they work in practice ? The produce of the industry 
 of the community being divided would not insure any 
 certainty that the labor had been, which indeed it never 
 could be when we consider the diversity in aptitudes, 
 physical and mental power, and the difficulty of deciding 
 how much of a certain kind of labor is equivalent to 
 another. The labor not being divided, would be a promi- 
 nent fact that would stand out so conspicuously as to 
 come in contact with the mental sensibilities of every 
 member, and create irreconcilable differences. The call 
 of justice for remedying these inequalities of imposition 
 would never find a response save in dissolution. Com- 
 munism would provide a remedy for this difficulty by 
 requiring each individual to work by turns at every 
 occupation. This arrangement would involve a sacrifice 
 of all the advantages attendant upon " every one to his 
 trade," as the popular adage expresses a truth ; and, all 
 the gain experienced by the division of labor being lost, 
 production would be materially diminished. One horn of 
 the dilemma is a dissolution, the other diminished produc- 
 tion. The disadvantage sought to be avoided that attends 
 upon the reverses of trade, affecting the practical industrial 
 organizations before noticed, is not escaped ; while the 
 advantages of the enlarged production which they effect, 
 are lost in the effort to construct the social machine. 
 Its effects are a sacrifice of individual independence, 
 the compression of intellect into a fixed mould, the reduc- 
 tion of each member of the unnatural association into a 
 machine moved, like the automaton by the hand of the 
 master, by external power, instead of the mainspring 
 within the individual self. 
 
 One of the leading elders of the Shaker community at 
 
SOCIALISMS. 199 
 
 New Lebanon, distinguished for his intelligence and 
 honesty, had adopted the correct view of the operation of 
 Socialism, when he said, that he had always frankly told 
 the several delegations of Socialists who had visited New 
 Lebanon to inquire into the Shaker system, that theirs 
 would not work, wanting the vital element of religious 
 motive and spirit. That celibacy also would be essential, 
 as a man with a wife and children could never renounce 
 that selfishness, that preference for his own, which would be 
 fatal to any living in common.* The Shaker elder is right 
 in his understanding of the inevitable tendency of human 
 nature to individuality when in families ; but wrong in 
 endeavoring to run counter in his own practice to the 
 natural current, by setting aside the institution of family. 
 He should rather fall into the order of nature, and seek, 
 by giving a proper direction to the natural and inevitable, 
 to improve the condition of his kind. 
 
 When association degenerates into the worse forms of 
 Socialism, when it requires a fixed equal distribution of 
 property, the investment of all the agents of wealth in the 
 state or community, denies the right of every person 
 with freedom of competition open to all to attain of the 
 world's goods to the extent of his ability, usefully employ- 
 ed, adopts and exercises the mental and social compression 
 before deprecated, it not only requires what is as imprac- 
 ticable as undesirable, but the theories, subversive of all 
 that the human soul holds sacred, go further, and question 
 the propriety of continuing any of the existing social 
 institutions, condemn that of marriage and religion, and in 
 the words of a leading socialist, " the immortality of the 
 
 * New York Herald, Sept. 1848. 
 
200 SOCIAL REMEDIES. 
 
 soul, even, is generally rejected, and absolute atheism is 
 not uncommon." Surely insanity could no further go.* 
 
 In abolishing the various sorts of protection for lordling, 
 prelate, and capital, it were well for all nations carefully 
 to avoid oscillation of the pendulum to the opposite side, 
 and by establishing the protection in another form, as was 
 recently attempted in the proposed system of the national 
 workshops in France, under the claim to the Right to 
 Labor, before noticed, perpetuate its existence, instead of 
 strangling the serpent that with all its wily strength seizes 
 upon some new member of the body politic whenever it is 
 dislodged from its previous hold. 
 
 Physics are being turned by physical power to practical 
 uses, with a rapidity of invention and promptitude of 
 application that excite the universal wonder of mankind, 
 
 * While these pages were going through the press, a letter was 
 received by the author from a gentleman who was well acquainted 
 with the " Brook Farm" experimental association, near Boston, and 
 had been a talented and zealous projector of the " Skeneatlas com- 
 munity" in Western New York, respecting which he says: "The 
 cause of the failure was undoubtedly a combination of knaves and 
 fools. The former desiring man-worship, and the latter thinking it 
 necessary and proper to worship some great man. Worship, and 
 the desire to be worshipped, seemed to be the leading elements of 
 disturbance. Those who thought it unbecoming a reformer to worship 
 a Deity, were the most devout worshippers of the tallest man in 
 their company, and therein exhibited more bigotry, blindness, into- 
 lerance, and persecution towards dissenters, than any heathen or 
 Christian I have ever seen or read of. My opinion is, that we have 
 not arrived at such a point of intellectual advancement generally, 
 as to render the prospects of success in any kind of association very 
 flattering. In fact, I do not think the present order and arrange- 
 ments of society can be much improved with any combination of 
 the elements we now have." 
 
SOCIALISMS. 201 
 
 for the mighty results accomplished in proportion to effort. 
 These results, in their turn, assuming the attitude of 
 causes, are all effecting those physical and moral ame- 
 liorations that constitute what is termed the progress of 
 the age. Of these, increasing security for persons and 
 property is in turn promoting production, the increase of 
 capital and well-being of consumers. The assurance 
 principle, not the least effective of the improving agencies, 
 is being more extensively developed, and furnishes the 
 thermometrical indication of a more widely diffused and 
 permanent security, evidences of the moral progress of 
 mankind. Insurance encourages the employment in pro- 
 ductive industry of capital that would otherwise lie idle in 
 hoarded security. The principle is fraught with benefit, 
 beyond the power of human calculation, to all industry 
 and its results. Man will be industrious and endure any 
 degree of privation, if he but have assurance that the 
 result of his efforts will, beyond the risks of chance, enure 
 to his own enjoyment. But, leave him in uncertainty as 
 to his retention of such result, and his energies slacken, 
 his love of ease predominates, and he catches at the gilded 
 toy of the moment, unmindful of the future, and heedless 
 of improvement. 
 
 It is by competition that all those improvements in 
 physics are made serviceable to mankind. The true 
 social formula is Freedom, Competition, Property. 
 
 There are great minds, and humanity-loving hearts, 
 who style themselves Associationists, and hope to redress the 
 evils now oppressing mankind. In free trade is projected 
 an association of the nations, a world wide association 
 wherein each contributes of its own resources to the 
 general wealth, each imparts of its own peculiar blessings 
 9* 
 
202 SOCIAL REMEDIES. 
 
 for the benefit of the others ; wherein man imbued with a 
 sentiment that sleeplessly urges him to unremitting action, 
 prompting him to compete, produce, exchange, acquire, 
 enjoy, is seen to be operating under that law whereby the 
 producer, laboring for self against competition, benefits the 
 consuming numbers by the operation, never wavering, of 
 the natural laws of Providence, unrestricted by the un- 
 natural regulations conceived by men, abundance of non- 
 restricted production as opposed to protection-created 
 scarcity, affording much of the general amelioration 
 humanity demands. 
 
 I would not assert that this one of the progressive ideas 
 of the age will solve the entire problem of humanity. 
 As a variety of causes contribute to mixed motives, 
 from which in turn originate the actions of man, so, 
 many measures, operating diversely, yet with a ten- 
 dency towards analogous ends, are necessary to ac- 
 complish a great work of progressive amelioration. 
 But some of the theories that have been evolved in the old 
 world seem to promise no better results than the sufferings 
 under the present state of protected inequality. They 
 appear to be but an extension of the protective system. 
 Free trade presents itself free from these objections, a true 
 engine of liberty. Whatever other measures may be 
 necessary, without free trade, they will in great measure 
 fail of their object. It is necessary, first of all, to procure 
 men necessaries, and they cannot be found in restriction. 
 Education is incompatible with indigence. Man is not in a 
 condition to listen appreciatively to doctrines of morality, 
 nor to cherish the disposition to practise religious precepts, 
 until his more material wants are satisfied. Demoraliza- 
 tion, the filth of the mind, accompanies always the filthy 
 
SOCIALISBIS. 203 
 
 habits of living generated by extreme want. Good is 
 more powerful than evil : Providence has evidently 
 designed by the exchange of products to promote union 
 among men ; and it is the mission of commercial freedom 
 to aid in diffusing these principles of liberty, fraternity, 
 equality, which Christianity has developed. 
 
 After a careful examination of the prohibitory, protec- 
 tive system, looking upon it with the eye of reason, unbi- 
 assed by interest or the influence of partisan sentiment, its 
 horrors are fully comprehended, and, as it rises up in all 
 its forms, reeking with the blood of labor, for ages sweated 
 forth at every pore, we shun it, as the baleful evil of the 
 world's happiness. We see that prohibition violates the 
 legitimate order of society ; that it encroaches upon man's 
 freedom, in preventing him from choosing his channel of 
 labor, whilst it constrains him to give a false direction to 
 his efforts ; that it injures the public prosperity, in forcing 
 the industrial efforts least productive, to the prejudice of 
 those more fruitful ; that it encroaches upon political and 
 civil equality, in subjecting all to a tax for the benefit of 
 a few ; that it compromises peaceful relations between 
 countries, and misdirects the intentions of providence, who, 
 in furnishing an infinite variety of climates and ap- 
 titudes, has indicated the necessity for intercommuni- 
 cation, and the cultivation of universal brotherhood. 
 That its results arrive at the reverse of that progressive 
 excellence which the improvements in the natural sciences, 
 the intellectual developments, the spread of Christianity, 
 the defiant earnestness with which men are seeking after 
 social ameliorations, all prove to be the general tenor of 
 the age. 
 
 It has been demonstrated, that it is impossible for na- 
 
204 SOCIAL REMEDIES. 
 
 tions to practise the protective system with utility : Free 
 trade is, then, a consequence of this impossibility. This 
 age is characterized by an earnest seeking after utility, a 
 zealous laboring to find the truth, that must eventually 
 succeed in bringing it into practice. A Cobden, a Bow- 
 ring, a Bright in England ; a De Brouckere, a Lehardy de 
 Beaulieu, a Wolowski on the continent of Europe ; and a 
 host of other able spirits, are laboring with a determined 
 zeal, that is generating a world-pervading sentiment, 
 which must sooner or later achieve a cosmopolitan result. 
 In the old world, sick even unto death with the opera- 
 tion of measures directly opposite in their effects from free 
 trade, society will find it an efficient remedial agent ; 
 while here, in America, it is certainly one thing necessary 
 to the completeness of the political and social fabric. 
 
 Cheapness, cheap food, cheap clothing, cheap travelling, 
 cheap postage, all forms of cheapness, constituting the 
 path of progress along which the world must travel, are 
 considered agencies in ameliorating the condition of man- 
 kind, and are earnestly sought after in every variety of 
 form and manner the ingenuity of man can devise. Ne- 
 vertheless, a conservative influence, which has its uses and 
 abuses, often operates to delay the adoption of measures 
 adapted to the end of cheapness long after the knowledge 
 of their tendency has been very generally diffused. Fi- 
 nally, this influence retires before the force of truth, ope- 
 rating slowly but certainly upon public sentiment. Free 
 trade is one of those agencies, and is therefore, like free 
 labor, though long in making its way, inevitable. It is a 
 true instrument of progress. 
 
 Progress is the amelioration of our social existence in its 
 combined organisms of the intellectual, naoral, and phy- 
 
FREE LABOR. 205 
 
 sical. These ameliorations have ever been alike gradual 
 and inevitable. Upon this subject of progress and the ame- 
 lioration of the poorer classes, there is far too much of 
 vapid sentimentalism and fanatic demagogueism lisped and 
 ranted forth by hosts of self-styled reformers of all dyes. 
 It is the dogday mania of the time, though the natural ex- 
 cess to which, in some organisms, the humanizing spirit 
 extends itself; and were but the tithe of all their schemes 
 for social reform put in practice, the world would be re- 
 formed past reformation. A reform that would reverse 
 the order that prevails for such confusion as would reign 
 where anarchy had sway, and rights, unchained from 
 duties, were living in unnatural excess. Poor progress, 
 perched upon the wild steed's crest, sent forth upon a 
 steeple chase, would soon achieve a sad break-neck ca- 
 tastrophe. 
 
 The subject of ameliorating the condition of the poor 
 whites is not the only one upon which unreasoning senti- 
 ment and a blind zeal expend themselves. The negro race 
 is dwelling among us in bondage, and " lo the poor Indian" 
 is being slowly and surely exterminated. The existence 
 of the former on terms of social equality and of physical 
 and moral amalgamation with the Caucasian race, is as 
 impossible under the present organization of the negro race 
 as is that of the latter. Ethnology teaches us to hope for 
 an improved craniological and epidermic organization of 
 the inferior races. Until that far distant time, whosoever 
 of them shall not be dwelling in the regions and under in- 
 stitutions adapted to their organism, will be occupying an 
 inferior social position, or will have disappeared from ex- 
 istence. The extermination of inferior and substitution in 
 their places of superior races, is but a step in the march of 
 
206 SOCIAL REMEDIES. 
 
 progress, in whose calendar the ages count but as days, and 
 with whom the races are but as types of a degree in the 
 condition of mankind. The sentimentality that mourns 
 over the disappearance of an inferior race, omitting to re- 
 joice that its place is supplied by a superior, would forget 
 one of the means by which Providence works improve- 
 ment in mankind. The advance in the condition of man 
 has been heretofore effected, by both this method and that 
 of sustaining the existence of the race, and effecting its 
 improvement. If the education and amalgamation of the 
 inferior race is practicable, and it can, in the progress of 
 civilization, by these means, be raised to a level with the 
 superior, it will be effected when the races have dwelt a 
 sufficiently long time in contact. If impracticable, the 
 inferior race will have sought other regions, or will have 
 been exterminated, having occupied, while in contact, a 
 position of savage independence, or, while the social con- 
 nexion endured, lived in the condition of servitude, volun- 
 tary or involuntary. 
 
 The involuntary servitude is the evil so much lamented, 
 and with reason. Being inconsistent with the genius of 
 humanity, and with the spirit of that liberty of which 
 Christianity is the pabulum, it should, whenever practica- 
 ble, be abrogated. Then the field will be properly open 
 for the race to struggle after equality with the superior, a 
 struggle that will end either in its attainment, after a pro- 
 tracted term of that normal state where improvidence re- 
 quires the constant superintendence of the teachers, or in 
 peaceful disappearance as a numerous race from the soil 
 occupied by the Caucasian. The last result would proba- 
 bly follow fast upon, or occur simultaneously with the 
 abrogation. The very fact of their normal condition of 
 
FREE LABOR. 207 
 
 improvidence is to delay the movements until they can be 
 undertaken jointly. 
 
 Hence there are considerations that mitigate our horror 
 of the protraction of this system. The race will be bet- 
 ter fitted to work their own improvement, after a long term 
 of servitude here, and of being subjected to the influence 
 of our institutions, working their way, as it were, along 
 an under current of progress, that is keeping its certain way 
 with our own, than they would have been had no other than 
 African suns ever shone upon them, no other than native 
 African influences ever surrounded them. There they 
 were and are, in the savage state, not having attained to 
 the secondary stage, the pastoral. Transplanted hence, 
 they land upon the shores of Africa, fitted for the third 
 condition of man, tillers of the soil ; ready to labor in the 
 development and improvement of the African continent. 
 The republic of Liberia will doubtless prove a more effi- 
 cient germ of civilization than the jungles of the Bush- 
 men. 
 
 Above all things the change of servitude should be 
 gradual. There are those who would ask, is it practica- 
 ble and desirable ? After emancipation their position 
 would still be that of servitude if of any service at all 
 and then their services would be less efficiently rendered 
 than before. Production of those staples their labor cul- 
 tivates could not be effected as cheaply as before ; and 
 whatever is detrimental to the interest of employers, is 
 equally injurious to the employed. Would not their moral 
 progress be as great under the present relation of master 
 and slave (planters now pay clergymen to preach the 
 gospel to their slaves, and exhort them themselves), as in 
 one of voluntary servitude, where their efforts would not be 
 
208 SOCIAL REMEDIES. 
 
 as indispensable as now to the producers, and when, un- 
 educated, and with improvident habits, they would fall into 
 a state of extreme poverty, of non-producing want and 
 moral degradation ; a population of paupers wanting caste 
 in every sense of the word, festering in the midst of the 
 social body ? 
 
 These would be no unmeaning questions, and involve a 
 social problem replete with difficulties if too hastily 
 tampered with. Notwithstanding the fact that they are 
 not by any means so incontrovertible as to require our 
 assent to the permanency of their action, in view of a 
 practicable system, before referred to, of combined com- 
 pensation and colonization co-operating under the influ- 
 ence of those natural, physical, and moral causes that 
 will gradually and progressively develope themselves, and 
 which have already changed slave to free states, and will 
 repeat the process in regions further south.* Notwith- 
 standing all this, those who would ask these questions 
 would have with them more than a show of reason ; and 
 they would be those who have a weight of rights to cast 
 into the scale, requiring that the initiatory should be taken 
 by themselves. These opinions and rights are held by 
 persons who by education and custom regard the matter 
 in a different light from that in which the ready aggressors 
 view it ; and the leaven of moral progression whose 
 advance is accomplishing all meliorations must unfold 
 itself in their consciousness, prompting the necessary 
 action on the part of those holding such opinions and 
 
 * Already a movement is making in Kentucky to effect the introduc- 
 tion of a clause into the Constitution of that State, providing for gradual 
 emancipation. 
 
FREE LABOR. 209 
 
 rights, which should not be outraged ; to their having 
 been so, is owing the retardation of the emancipation that 
 will yet come. I cannot help indulging with the reviewer 
 in the cynical belief that " pure, unadulterated benevo- 
 lence is almost as dangerous an agent to tamper with as 
 gun-cotton, unless it be freely diluted with the less tran- 
 scendent qualities of practical knowledge and common 
 sense." I should regret to see slavery suddenly abolished. 
 It would be still more painful to believe that it is never to 
 be. But reformers make two mistakes ; they insist upon 
 only one method of progress being recognised, and they 
 wish the work of generations to be accomplished in a day, 
 leaving nothing to the providence of God, and the labors 
 of that efficient worker, father Time. 
 
 Notwithstanding what Burke in his Reflections calls 
 mind conspiring with mind, is, under our institutions and 
 at the advanced intellectual and moral position attained to, 
 effectively favoring improvements, the importance of the 
 social and political changes agitating the minds of men 
 demands a careful discrimination between measures of 
 reform, and the cautious avoidance of hastily making 
 innovations in existing political institutions that was 
 appreciated as long ago as the time of Aristotle. In 
 noticing the analogical reasoning that improvements in 
 government can be introduced as readily as those in the 
 arts, he says : " the example drawn from the arts is a 
 fallacy ; for there is no analogy between innovating in an 
 art, and innovating in a law : inasmuch as a law has no 
 power of inducing obedience unless by habit ; and this 
 can only be effected by lapse of time ; so that lightly to 
 exchange the existing laws for other and new ones is to 
 enfeeble the force of the law." To the important changes 
 
210 SOCIAL REMEDIES. 
 
 proposed by enthusiasts and reformers, is referable all of 
 the caution inculcated by the philosopher of ancient Greece. 
 The agitations are calculated to promote disunion, which 
 is dishonor, destruction, and defeat ; whereas union is 
 greatness, and glory, and all good. 
 
 Not only in view of the principle of constitutional 
 rights is the conservative caution felt to be especially ne- 
 cessary, but also when it is remembered, that the produc- 
 tion of our great exporting staples is wound up in the ex- 
 isting institution ; and the importance of a caution against 
 the premature tampering of legislation is seen in its full 
 force when regarding the effects of emancipation in the 
 British West Indies, where it has resulted in the wreck of 
 capital, in the withering of resources, natural and ac- 
 quired, and the subversion of social order. England 
 offers, in the sermonizing of her journalists, reviewers, and 
 bookmakers, a stringent conservatism, when considering 
 the political movements upon the European continent, a 
 sensible view of some of the social theories agitated there, 
 but fails altogether in the consistent application of the 
 same conservatism, and rushes wildly into ultra gun- 
 cotton radicalism, when her critical eyes are turned 
 towards the " peculiar institution" of this continent. So 
 madly that, leaping the continental shores, it sweeps ad- 
 jacent islands, to her own injury and the especial ruin of 
 those unfortunates, her island subjects, white and black. 
 
 When we extend our view it will be observed, that all 
 necessary conservatism exists at large, and because it does 
 there will not be the abrupt action, by those within whose 
 province it lies, affecting the peculiar institution ; nor, on 
 the other hand, because the conservatism does exist, will 
 there be a withholding generally of the improvements de- 
 
PROGRESS. 211 
 
 manded by humanity when the season of fitness shall 
 arrive. 
 
 Such is the march of social progress humanity ward, that 
 no territory contiguous to the United States, not already 
 impregnated with the " evil," will voluntarily assume it, 
 to be incorporated into the institutions, under which ad- 
 mission is to be sought into the federal union. If impreg- 
 nated territory knock at the door of the Union should it 
 not be so admitted, and so continue until, at some subse- 
 quent period, the new state shall voluntarily follow the ex- 
 ample set it by the previous action of others lying in 
 higher latitudes ? Should it not, when we consider that 
 under no institutions will a fitting emancipation, one that 
 shall have prepared the subject for the advance, and all 
 blessings, be sooner wrought than under the moral pro- 
 gression born of our own ? 
 
 The enthusiasts and reformers alluded to would fail to 
 preserve the consecutive links by which progress, the edu- 
 cation of humanity, advances ; an omission as detrimental 
 as would be that in the education of the individual man, 
 which would overlook either of the rudiments necessary 
 to making a sure improvement in knowledge. In pro- 
 gress the necessity is a natural and certain advance ; one 
 unlike the sudden leap with which socialism would re- 
 cently have cleared, not only the restraining bounds of 
 monarchy, but would have leaped the barriers that divine 
 law and Christian precept have prescribed to anarchy, and 
 spread confusion and disorder throughout society. For- 
 getting that there is an interval between seed-time and 
 harvest, they would put in the sickle before the grain is 
 ripe. 
 
 To be lasting, all changes in society must be gradual. 
 
212 SOCIAL REMEDIES. 
 
 The general mind must, by many stages, be educated to 
 the degree of intelligence necessary for acting in the im- 
 proved condition, and then the change will inevitably 
 come. Progress walks, it never leaps. Poor put-upon 
 and patient Progress ! with thy name so often called upon 
 to sanctify the follies fain would jump towards a lofty end. 
 What wonder though that jerks and leaps are forced upon 
 thy steady gait, when we consider that thy latest lengthen- 
 ed stride was made by the remorseless application of gal- 
 vanic batteries ! 
 
 Progress is evidently not over hasty to hurry on its 
 way, when we see the progressive action of the Sultan, in 
 seeing an ambassador to the Pope, counterbalanced by 
 the conservative movement of the petitioners of Exeter, 
 England, who beg that Parliament will not receive an 
 ambassador from the papal power. The day that wit- 
 nesses an advance made by Islamism in extending its hand 
 in amicable greeting to Christianity, sees also the retro- 
 gressive movement of Christianity, which, in the one 
 church, is opposing the adoption of friendly relations with 
 its sister church. The chronology of progress also re- 
 cords, on the part of the present year, 1848, that Islamism 
 and Christianity, mutually inspired by the progressive 
 spirit of humanity, have jointly extended the hand of 
 tolerance to a third member of the human family. Tho 
 Sultan of Turkey grants permission to the Jews to rebuild 
 the Temple of Jerusalem, and the Papal government 
 emancipates the Jews of Rome from the civil disabilities 
 that for centuries have bound them. But in a scale oppo- 
 site to these progressive movements is also cast a weight of 
 conservation. This is to be observed in the action of the 
 Puseyite members of a clerical club at Oxford, England, 
 
PROGRESS. 213 . 
 
 learned divines all, who have recently issued a document 
 setting forth the rules by which their principles shall be 
 regulated. In this document is declared the divine right 
 of kings ; indissoluble union between church and state ; 
 that no right exists of private judgment in matters of re- 
 ligion ; that the education of the lower classes is a public 
 evil ; that they should exercise no voice in the choice of 
 representatives ; and that those upon whom they are de- 
 pendent are justified in exercising their influence over 
 them in matters of church and state ! ! 
 
 Again, while Europe is moving a step in advance, that 
 promises to merge the kingdoms into republics, cheering 
 us with bright hopes for the future condition of man as the 
 constituent of democratized institutions, what reactionary 
 steps are witnessed ! What cloud is that which darkens 
 the light of Christianity, and, raven-like, descends to over- 
 canopy the form of Liberty ? What is that like a dark 
 pall seen settling down to wrap its mournful folds about 
 the bright genius of humanity, and shroud it from the 
 sight. Behold it pouring forth torrents of blood, to over- 
 whelm, with black destruction, the fabric of Christianity 
 and Freedom, which has been the proud boast of the 
 nineteenth century. The troops of Austria's Emperor, 
 like famished wolves upon the scent, are hunting down the 
 herds of Austria's people. Throughout Vienna, fair 
 city of the Danube, in all her streets and homes, the 
 horrid butchery has left its mark in heaped up tracks of 
 slaughter, encumbered with the mutilated forms of men, 
 women, and children, flayed, dismembered, their eyes 
 burned in the sockets, and flesh cut piecemeal from the 
 living bodies ! Hundreds of burning houses illuminate the 
 scene, their flames replenished with the dead and living ! 
 
214 SOCIAL REMEDIES. 
 
 Humanity sickens at the sight, and disowns the civiliza- 
 tion that marks the epoch. 
 
 Who will say that Progress leaps ? Yet Progress does 
 advance along its steady way, and the bloody deluge 
 which flooded the human shambles of Vienna, has watered 
 a soil whence shall spring a plentiful harvest of free insti- 
 tutions. Also, enlightened, Christian, pattern England 
 will yet come up with benighted, barbarous, Mahommedan 
 Turkey, in liberality of religious toleration, in the ameli- 
 orative spirit for which humanity and Christianity are 
 piteously beseeching with tremulous knockings at the 
 portals of her proud and hard heart. I believe it, for I 
 have faith in the general march of Progress, the England 
 and Austria of yesterday and to-day to the contrary not- 
 withstanding. 
 
 Looking back upon the moral events of the past, we are 
 sensible of a guarantee for a continued advance. We see 
 behind us the attainment of universal suffrage, the organi- 
 zation of popular education, the abolition of imprisonment 
 for debt, of slavery, and of capital punishment. From 
 the time when the Norman, looking upon arms and robbery 
 as the only test of respectability and ground of right, 
 regarded with supreme contempt the sturdy Saxon who 
 toiled for bread, to this day, when the year 1848 is closing 
 upon us, long to be remembered as the year of revolutions 
 and of gold, political and moral progress has made its 
 certain way. Although, like that of the hand of the time- 
 recording clock, its movements may be imperceptible, 
 whenever we look at the hours the ages have marked upon 
 the dial of humanity we may note the advance achieved 
 by progress. 
 
 Meek, unpretending Progress ! whose loved and most 
 
PROGRESS. 215 
 
 successful action is in the daily performance and practice 
 of the simplest duties ; those that, not stretching far away 
 in zealous interference with another's rights, lie nearest, 
 and are all embraced within the few recorded words the 
 Saviour left us. Not in Icarien impracticabilities ; not in 
 theories most intricate of brain-racked birth, each grasping 
 with strained effort after metaphisms of clairvoyant or the 
 spiritual school, but in the simple practice of the best 
 known duties, under nature's plainest laws, that govern 
 not too much in earnest, steady labor in such duty- 
 practice of uprightness and industry, lies the travel on the 
 path of Progress. 
 
 What in the language of political economy is called the 
 stationary state, is ever like to-morrow, apparently attaina- 
 ble, yet ever in advance ; and as the enjoyments, the 
 physical and moral wealth of the collective world, are 
 greater to-day than yesterday, so do the discoveries and 
 developments constantly taking place in the arcana of 
 physics, together with the spread of education and all free 
 facilities, seem constantly to remove to a greater distance 
 the limit of Industrial Progress. 
 
 And in such wise of moral and industrial action, in the 
 meek and industrial progression, we will indulge the hope 
 of a healthful progress through the throwing open of all 
 the avenues of industry, not in a partial, but in a general 
 and comprehensive sense that shall embrace the entire 
 world with all its capacities, physical and moral, both 
 national and individual ; in short, the free acceptance of 
 God's gifts by all the nations of democracies through free 
 exchange. This is a communism we should seek ; where 
 enterprise and industry are untrammelled in the midst of 
 abundant production, and none are paupers who will work 
 in the free and spreading fields of labor for the gaping 
 
216 SOCIAL REMEDIES. 
 
 markets of the world. This is liberty. This is justice to 
 all ; and justice is an element of Christianity that must 
 play its part in the development of the science of industry, 
 before the rules of that science can work out results that 
 will yield assurance of correctness, on application of the 
 proof of universal brotherhood. 
 
 There can never be too much of cheapness for man. 
 His wants grow with that supplies them. As long as men 
 live on earth they will call for more, still more of nourish- 
 ment from the bosom of the common mother. Transport- 
 ing ourselves to some far distant period in coming time 
 Then, with a world sufficiently peopled to develope its 
 varied resources, yet not too densely crowded, when all 
 organisms shall be improved far beyond their present con- 
 dition ; when each family shall enjoy the various comforts 
 of the table, the elegant garments, the bath, and all the 
 appliances of the wealthy few of this age ; when each 
 individual may exercise a refined taste in daily enjoy- 
 ment of the concert, and all the works of highest art, and 
 educated mind extends further and wider its dominion 
 over sense and matter, who shall say the end is yet ? 
 Labor, the industrial arts its right hand, and freedom the 
 vital element it breathes, in the plenitude of its power 
 striking out new fields of action, calling to its aid now un- 
 discovered and yet subtler elements, will then develope of 
 earth's known and yet unknown treasures, richer stores : 
 then mould them all to newer forms, more elegant, until 
 the refined and more refined material combines in all its 
 intimate connexion with the immaterial of man's nature, 
 to elevate the human being to a loftier state, where, looking 
 back on this, he will regard it as he views the barbarism 
 of yore. 
 
 And this more immaterial part, will it not, with all the 
 
PROGRESS. 217 
 
 march of intelligence, of science, letters, morals, CHRIS- 
 TIANITY, have learned to joy in high appreciation of the 
 moral beautify!, and have kept its even pace in the pro- 
 gressive order of the world ? It will when labor walks 
 the earth, a God in dignity and power ; and every man 
 shall be a sovereign truly in his power and wealth, and one 
 of God's own chosen in knowledge and all moral excel- 
 lence. Christ furnished us the type of poverty rising to 
 the God in heavenward Ascension ; and we will cherish 
 faith in man, created image of Divinity, advancing ever 
 with the stride of Progress upon this teeming, fruitful 
 footstool ! 
 
 Is not this meanwhile a pleasant ideal ? And is it not 
 instructive as well ? 
 
 1 .1 t. ; .v ;: 
 MVEKSITY OK 
 
 CALIFORNIA 
 
XXII. 
 
 WHAT DUTY PROTE CTIVE? INDIRECT 
 AND DIRECT TAXATION CONCLUSION. 
 
 THE nature of protection, the evil effects attendant upon 
 its adoption or continuance, and the benefits to be derived 
 from its abolition having been developed, we will now in- 
 quire what rates of duty operate practically as protective. 
 As protection and prohibition curtail importations, it fol- 
 lows that the converse of the proposition is true ; that, if 
 the duty curtails importation, it is protective or prohibi- 
 tive. All duties that are protective are prohibitive, but 
 all that are prohibitive are not protective only such of 
 them as are laid upon articles that are or can be produced 
 in the country. Importations are regulated by the values 
 abroad and at home. If the cost of the article is less than 
 it will bring in our market, it is imported, because it 
 then pays a profit on the capital employed. The difference, 
 then, between the wholesale market value of an article in 
 the foreign market, with freight added, and its value in 
 ours, is the amount of protection our producers of the 
 same article derive from the duty. It follows from this 
 that, the cost here being enhanced by just the amount of 
 duty, all tariffs are prohibitive, in so far as they raise the 
 cost to consumers, and thus keep commodities above the 
 
INDIRECT TAXATION. 219 
 
 reach of numbers, who, at a lower price, would be able to 
 indulge in their use. In so far as those articles were 
 home produced, the duty would be protective, and, on all, 
 more or less prohibitory. 
 
 But government must raise a revenue by taxation, either 
 direct or indirect, and hence we come to consider the pro- 
 priety of collecting it by a discriminative tariff, that shall 
 avoid all prohibition that keeps out whatever articles con- 
 sumers would take, had they to pay no larger addition to 
 the cost of production or importation than the amount 
 necessary to furnish the revenue. This is what is known 
 as a revenue tariff. As to incidental protection, if protec- 
 tion is an evil to be shunned, it must be discarded in all its 
 forms. And if a revenue tariff only is "proper, it admits 
 of no incidental effect, as that would just so far diminish 
 its revenue effect. 
 
 The other method of raising the revenue, by direct 
 taxation, will likewise prohibit consumers from the enjoy- 
 ment of all such quantities and qualities of articles as the 
 lessening of their means, by the amount of tax they pay, 
 will keep beyond their reach. In one method they pay 
 the tax by the enhanced price of the article ; in the other, 
 getting the commodity lower, they pay the tax in money 
 saved by purchasing the article at the reduced prices. 
 Which of these two modes of taxation is best ? 
 
 In favor of INDIRECT TAXATION It may be said that 
 imposts may be so graduated, as not to cast the burden so 
 unequally as has been alleged by the opponents of indirect 
 taxation. Observing the distinction between articles of 
 luxury, convenience, and necessity, rates might be ar- 
 ranged in a geometrical gradation of perhaps five, fifteen, 
 
220 TAXATION. 
 
 and forty-five per cent. ; always with a view to charging 
 a high rate of duty upon all articles used by the rich for 
 mere show, and not necessary to their comfort. The ad 
 valorem principle now practised in the United States aids 
 greatly in making such an apportionment justly graduated 
 to the abilities of the classes consuming the commodities. 
 As certain articles of necessity and comfort, as cottons and 
 sugar, are consumed nearly or quite as largely by the 
 poor and those in moderate circumstances as by the rich, 
 it is necessary to discriminate in quality in order to appor- 
 tion the tax properly. As those with more ability would 
 consume finer qualities of greater value, they would, by 
 paying ad valorem rates, contribute in proportion to their 
 ability a larger amount to the revenue. Should it be said 
 that the rich would restrict their consumption of luxuries, 
 and thus escape their portion of contribution to the trea- 
 sury, it may be answered, that such will not be the case 
 until men and women cease to possess a taste for luxuries, 
 and the emulation shall no longer exist that incessantly 
 urges man to vie with his neighbor in the fineness and 
 splendor of his appointments, personal, household, and 
 other; not until the imitativeness inherent in his nature 
 shall cease prompting man to gain possession of the same 
 his neighbor enjoys. Those articles whose use is the gra- 
 tification of vanity will always bear a high tax. 
 
 A tax on imports, where, because the duty may be laid 
 on some articles not produced here, or may be less than 
 the difference between the producing cost here and that 
 abroad, there is no total prohibition, nor any protection 
 if there be protection, the people pay more through the 
 gency of indirect taxation than they can gain off the fo- 
 reigners falls partly upon the foreign consumers of our 
 
INDIREC^ TAXATION. 221 
 
 goods taken in exchange. The diminution in amount of 
 foreign products consumed results in our taking less, and, 
 while the foreigners continue to consume the full amount 
 of ours, in their sending us specie, deranging exchanges. 
 Their products become low there, and ours high here. 
 What they consume of ours is at greater cost. But it is 
 well to remark, that these are temporary and not perma- 
 nent conditions, as the foreign nations will soon take no 
 more than they can return their products for in exchange, 
 or will impose a retaliatory duty on our products; unless 
 ours were of vital necessity to some one nation, and it kept 
 up the paying to us of a sum of specie drawn from other 
 nations, by a process similar to that by which we drew 
 from it. 
 
 It is no inconsiderable objection to direct taxation, that 
 it would involve the necessity for those domiciliary visits 
 of the functionary which are so repugnant to the citizen, 
 who is prone to regard the investigation as an impertinent 
 scrutiny into his private affairs, and which he is likely to 
 consider as scarcely less burdensome than the tax itself. 
 
 By a tariff tax the amount is generally paid at the time 
 and in the manner most convenient to the contributor. " It 
 is paid," says Mr. Mill, " at a time when he has, at any 
 rate, a payment to make ; it causes, therefore, no additional 
 trouble, nor any inconvenience but what is inseparable 
 from the payment of the amount. He can also, except in 
 the case of very perishable articles, select his own time 
 for laying in a stock of the commodity, and consequently 
 for payment of the tax. The producer or dealer who ad- 
 vances these taxes is, indeed, sometimes subjected to incon- 
 venience : but in the case of imported goods, this inconve- 
 nience is reduced to a minimum by what is called the 
 warehousing system. 3 ' This system is now in successful 
 
222 TAXATION. 
 
 operation in this country, and by leaving the duty uncalled 
 for until the period of consumption arrives, it materially 
 mitigates the effect of the tax, and operates to favor the 
 impost form by destroying the obnoxious feature of injury 
 to the commercial community, through the loss of interest 
 on the amount of duty advanced by them to government, 
 formerly, often far in advance of the reimbursement made 
 to them by consumers. 
 
 It has been said in favor of indirect taxation, that the 
 people would so sensibly feel the burden when directly 
 imposed as to engender dissatisfaction, that would endanger 
 the stability of the government, operating perhaps in this 
 manner, if the system required the States to furnish their 
 several quotas, it might have the disadvantage of causing 
 them to feel so sensibly the payment, that whenever any 
 cause should originate, having a tendency towards nullifica- 
 tion, the palpable payment of this contribution for the 
 maintenance of an union, such State might be already 
 dissatisfied with, would be magnified into a grievous burden 
 that under such circumstances would fcfe felt to be too one- 
 rous to be borne ; a feeling that would give an impetus to 
 the existing dissatisfaction. Also, if the quota was exacted, 
 or if the direct tax was collected by officers of the general 
 government in the ordinary method of collecting direct 
 taxes, it would be called for at a certain time, and the drain 
 of so large an amount from the people's pockets, to effect 
 at once an engorgement of the federal treasury, would de- 
 range the finances of the country. Under impost taxation, 
 on the contrary, the receipts being gradual, no such enor- 
 mous excesses occur. 
 
 For DIRECT TAXATION, in objecting to a tariff it may 
 be said that taxes being imposed for the support of go- 
 
DIRECT TAXATION. 223 
 
 rernment, they should, as the only just method, be distinctly 
 and directly levied upon individuals in proportion to their 
 ability to pay, and nothing but the tax be exacted. The 
 assessment of indirect taxes being made upon the importer 
 instead of the consumer, the latter is made to pay a much 
 larger amount than the sum accruing to the revenue. A 
 yard of imported cloth, costing the importer at foreign 
 prices, with freight and charges added, 100 cents, the duty 
 of 30 per cent., paid by him, raises the cost to 130. He 
 sells to the retailer at a profit of 15 per cent. ; and the lat- 
 ter, it having cost him $1,50, sells it to the consumer at an 
 advance of 25 per cent. The latter, there fore,- pays $1,87 
 for the article. Supposing no duty, the importer selling at 
 15 per cent, profit, would have received from the retailer 
 81,15, who, adding 25 per cent., would have sold to the 
 consumer for $1,44. By this process the cost of the con- 
 sumer is increased to 87 cents beyond that to the importer, 
 or 43 cents more than it would be if no duty was imposed, 
 paid by him that government may collect 30 cents of 
 revenue. The forty-three cents is here prohibitory, and, on 
 home produced articles, protective. Hence it is impossible 
 to avoid these contingencies under a tariff taxation, and, the 
 portion of the tax, which, under supposed non-protection, 
 was seen, on a preceding page, to fall upon foreign consu- 
 mers, is offset by that borne by the home consumers, and 
 the effect of that vengeful wounding of the nose, is injury 
 to the face. 
 
 With regard to taxing articles of mere show extremely 
 high, here the direct possesses an advantage as compared 
 with the indirect ; as a large variety of the articles of 
 show, such as jewelry, are of small bulk, and easily 
 smuggled, forcing government, in order to collect any 
 revenue at all from them, to impose a very low rate of 
 
224 TAXATION. 
 
 duty, much lower than that laid upon many articles neces- 
 sary to the comfort of the poorer classes. If imposed 
 directly, a much higher rate, productive of more revenue, 
 and one more consistent with justice and good economy- 
 promoting policy, could be successfully collected. Another 
 objection to the indirect imposition would be the difficulty 
 of avoiding running into protection of the articles, a result 
 which should always be avoided, though less objectionable 
 when only favoring the producers of articles of mere show 
 at the cost of the richer class : cheapness being undesirable 
 when articles are bought with superfluous wealth for the 
 sake of their costliness and variety, as these would 
 cease to be purchased by the rich when they became 
 common, and some other newly rare would be substituted 
 for them. 
 
 That the people would be so unwilling to pay a direct 
 tax as to endanger the stability of the government, is an 
 idle fear. Thanks to the nature of our institutions, their 
 effects are such as to do away with the probability of such 
 a result. The effect also of the abolition of tariffs, the free 
 trade effects of increased enjoyments, education, and en- 
 lightenment, would be safeguards for the continuance of the 
 system that promoted them. Whenever the States become 
 unwilling to pay openly and honestly for the maintenance 
 of the Union ; when it shall be demonstrated by their acts 
 that they are only to be made to suffer its continuance by 
 being led blindfold into making the necessary contributions, 
 unconscious of the cost, then the time will have arrived 
 for a dissolution of the onerous bond ; its continuance 
 would be anti-republican. 
 
 The expenses attending the collection of a given amount 
 of revenue are very great. The large establishments of 
 custom houses, hosts of officials, revenue service, dec. 
 
DIRECT TAXATION. 225 
 
 swell the expenses to a large amount. From 1789 to 1847 
 inclusive, the net amount of duties collected in the United 
 States was $908,997,223. The expenses of collecting 
 the same at the several collection districts, amounted to 
 $48,615,965. When to this is added the expense of 
 maintaining the revenue service, an amount that would 
 doubtless be found to be enormous, could we penetrate a 
 certain haziness enveloping the records that should exhibit 
 the cost, it will be concluded that a more economical 
 system of collection could without doubt be devised. Col- 
 laterally, the direct system would cause economy in 
 national expenditures, by preventing those measures involv- 
 ing large and unnecessary expenditures, for the means of 
 prosecuting which, when the people felt the application 
 palpably upon their pockets, they would refuse to be taxed. 
 It would thus lessen the probability of a national debt 
 accumulating. In a country possessing a superabundance 
 of capital, a national debt contracted for war or other un- 
 productive expenditures, by borrowing from the capital of 
 the country, withdraws so much of the national means for 
 furnishing employment to productive labor ; takes away 
 so much of the fuel that is to feed the current year's pro- 
 duction. Government enters the market and gets posses- 
 sion of capital for unproductive use, by outbidding those 
 who would have secured it for productive uses. The rise 
 of interest is a test that the loan was no absorption of an 
 excess of capital that could not have found productive 
 employment. That this effect was not more severely felt, 
 and government was enabled to borrow at a moderate rate 
 of interest in this country when contracting the debt 
 growing out of the recent war with Mexico, is attributable 
 to the fact, that, in consequence of the free trade policy 
 
 10* 
 
226 TAXATION. 
 
 which went into operation soon after the commencement 
 of the war, and co-operative causes, there was a rapid accu- 
 mulation and a large influx of capital from abroad. This 
 furnished the supply absorbed by the loan, without en- 
 croaching so largely upon the demand for productive 
 investment as to raise the rate of interest. 
 
 Nevertheless, the plan adopted of meeting the war 
 expenses by a loan has entailed upon the people of this 
 country an expenditure equal to quadruple the amount of 
 the loan. The act of borrowing, which withdrew the sum 
 from the productive channels of investment, into which it 
 would, under all the favoring circumstances above named 
 as augmenting capital, have sought and found employment 
 at a lower rate of interest, cost labor the amount of such 
 sum, under the process just before stated. The loss was 
 then sustained by the labor of those years in which the 
 expenditure was incurred, and the money borrowed. The 
 conditions of the loan, as of all loans, requiring future 
 payment of the sum, whenever pay day comes, that 
 amount will have to be abstracted from the earnings of the 
 current labor of the year of payment. It is then drawn 
 from labor by taxes, going into the general treasury. 
 Labor thus sustains double the expenditure, and, in addi- 
 tion, pays in taxes the annually compounding interest ; and 
 also bears the loss growing out of the non-existence of 
 accumulating capital of savings which would have pro- 
 ductively employed labor; and this may be estimated 
 at as much as the interest. Thus if $66,000,000 
 of debt be contracted for twenty years, the annual 
 interest paid in the form of taxes by labor is at six 
 per cent. $3,960,000 ; in twenty years at the simple 
 rate the interest amounts to $79,200,000, but at the 
 compounded rate which labor sustains it amounts to 
 
DIRECT TAXATION. 227 
 
 $145,670,868. As to the further loss : The sixty-six 
 millions, had it not been originally sunk in unproductive 
 wars, not been borrowed by government, but employed 
 productively by the people, would have begotten a con- 
 tinually reproduced capital of progressively enlarging 
 accumulations, which would have obtained from the 
 original action of productive labor, and would have been, 
 annually compounding like the interest, employed each 
 year in new production. Thus, if $66,000,000 effect 
 annually 10 per cent, of accumulated addition to their 
 amount through the medium of the production of a much 
 greater amount of commodities, the addition to labor 
 employing capital is $6,600,000 a year, or $132,000,000 
 in twenty years ; or, compounded annually, it is $444,- 
 014,926. The gain effected by the employment in 
 productive uses of the annually disbursed and distributed 
 sums of interest, may be said to be a counter-process 
 going on to counterbalance this in part, and perhaps 
 entirely ; the rate of 10 per cent, above estimated being 
 merely assumed. Were this the case, the two costs, 
 original and ultimate, of sixty-six millions each, and the 
 much larger one of interest amounting to $145,670,868 
 still stand as borne by labor. 
 
 The future payment of the original loan when disbursed 
 to capitalists from the public treasury, is redistributed, 
 much of it probably, like the payments of interest, going 
 into channels of productive investment. But so far as it 
 does, there is no counterbalancing of the effect, as felt by 
 labor, of the original extraction of capital from protective 
 labor-employing investment that took place when the 
 capital was borrowed by government. The capital of a 
 country being annually consumed and renewed, every 
 abstraction of a portion which would, during that year, 
 
228 4 TAXATION. 
 
 have been consumed by labor, is a hardship sensibly felt 
 by such labor as for the time is employed in consuming 
 and producing. A subsequent distribution of capital, 
 supposing all of it to be turned into productive channels, 
 is but a restoring of the original abstraction, and does not 
 prevent the effects of the intermediate blows that have 
 been dealt upon labor from having been felt as they in- 
 flicted their proper wounds. The cost to labor, occasioned 
 by borrowing, instead of meeting the expenditure by a tax 
 imposed at the time of incurring the expense, leaving out 
 the ten per cent, loss from non-continuances, is still equal 
 to twice the full amount of the loan, and the sum total of 
 compounded interest. That is to say, if paid at the time 
 of incurring the expense, the cost to labor would have 
 been $66,000,000 ; but in consequence of the postponement 
 it will be $277,670,868. Therefore, we learn that it is 
 better for labor that war expenditures be met by a tax 
 levied at the time they are incurred, as by this method 
 the cost of the war is paid but once, and not quadruplicated, 
 as under the borrowing system. 
 
 No objection grounded upon an assumed inability of the 
 country to pay the expenses at the time of their being in- 
 curred, could lie against the method. The bulk of a 
 country's means are reproduced annually, and consumed 
 the succeeding year in turn. Of the 2000 millions value 
 of products annually produced in the United States, the 
 whole is consumed the following year in reproduction. 
 The^more durable productions, taking the form of fixed 
 capital in buildings, bridges, roads, &c., only are to be 
 excepted from the general rule ; and most of these wear 
 out in a few years. It would not be difficult for 23 mil- 
 lions'of people, from their consumption of nearly or quite 
 
DIRECT TAXATION. 229 
 
 2000 millions, or eighty-seven dollars a head, to deduct, in 
 the year of incurring an expenditure of 66 millions, the 
 amount of such expenditure, at the average rate of three 
 dollars per head. A modicum of abstinence from con- 
 sumption would effect it ; the rate being but a fraction 
 over 3 per cent, of a year's production, and expiring with 
 the year. As much as this sum is annually paid by con- 
 sumption for protection. It is just that the generation 
 which incurs expenses should pay the cost. We may 
 choose to consider that they were incurred in acquiring 
 that which is to benefit succeeding generations, and there- 
 fore the successors should pay a portion of the cost. But it 
 does not follow that the unnecessary extravagance should 
 be practised, by which both the present and future gene- 
 rations should pay each of them double the total cost. If 
 the present does not, the expense, as has been seen, must 
 devolve upon both. Those incurring the expenditure can- 
 not avoid the cost, and, by not paying, it is repeated to 
 their successors, with the weighty addition of interest. 
 
 What has been stated is based upon the supposition that 
 in both cases of immediate and future payment, the 
 amount is paid by labor. In the case of deferred pay- 
 ment, the quadrupled amount must be, with the exception 
 of a deduction from the first sixty-six millions paid, of so 
 much of it as was taken by foreign capital. As this was 
 not drawn from the capital at home, which was re- 
 quired for productive investment, so far labor escapes the 
 burden. But this portion of the loan was only a small 
 part of the entire amount, and therefore the cost to labor 
 is not materially lessened. Immediate payment not only 
 eventuates diminution in the sum paid, but there is a me- 
 thod of relieving labor almost entirely from the payment 
 
230 TAXATION. 
 
 of the sixty-six millions, and casting it upon unproductive 
 capital. A direct tax imposed, during the years of ex- 
 penditure, upon articles of mere luxury and show, leaving 
 untouched the productive capital that employs labor, could 
 have judiciously effected the object. Labor will now 
 have to sustain, as the effect of the deferred payment, a 
 loss ; of $277,670,868 ; and, in addition, as an effect of 
 collecting the principal and simple interest of the loan, 
 amounting to $145,200,000, by indirect taxation, by 
 which means of collection every 30 cents collected by 
 government costs the consumer, by estimate, 43 cents 
 the sum of $62,920 2 000. Deferred payment and indi- 
 rect taxation, combined, cast upon labor a burden of 
 $340,590,868. This is subject to a reduction for the 
 amount of impost collected on articles of show and luxury ; 
 but this reduction is more than counterbalanced by the 
 amount paid for protection under the impost system. 
 
 With such ease and at a stealthy pace, scarcely per- 
 ceptible to the most careful watcher, may a national debt 
 accumulate and cast its heavy weight upon the bent back 
 of toiling labor. Each year of its existence increases at 
 a compound rate the amount of the tax. When such an 
 enormous result of injustice may grow out of the tempo- 
 rary contraction, during two years' expenditure, of the 
 moderate debt of 66 millions, what would be the effect of 
 contracting a permanent debt of 200 to 500 millions ? Its 
 prophetic history is written in the past of England's 
 misery, and France's destitution. Economy for this coun- 
 try, that shall prevent the necessity for extending the field 
 of taxation till it reaches the consumption of labor, lies in 
 open and direct taxation, behind which no protection and no 
 indebtedness may lurk. 
 
DIRECT TAXATION. 231 
 
 It is to be remarked in this place, that, under the 
 institutions and the democratized educational influences 
 prevailing and progressively improving in this country 
 with the march of political and economic science, the 
 bulk of capital must continue to be employed in product- 
 ive channels for a longer period than the simple facts of 
 undeveloped natural advantages and scarcity of capital 
 would of themselves warrant. 
 
 With reference to the diminished probability of directly 
 collecting money for war measures, there is a countervail- 
 ing argument that, although increased taxation is necessary 
 for war expenditures, yet for all the great measures of 
 public reform designed to improve the condition of the 
 people, whether educational or sanitary, whether they 
 embrace improvements in prison discipline, or the eman- 
 cipation of slaves, an increase of taxation is likewise 
 necessary, and hence the tax should be imposed in the 
 indirect form, in which it is most extractable, for the 
 accomplishment of these improvements. This reasoning, 
 however, has no force when applied to this country, where 
 all these measures are, or should be, undertaken and 
 performed by the local governments of the states, wherein 
 the system of taxation is already direct. 
 
 It may be adduced as not unwoHhy of consideration in 
 favor of direct taxation, that, if adopted, an annoying 
 bone of contention that, as long as tariffs exist, will agitate 
 and excite the legislative councils,- may be finally buried, 
 and cease to divert congressional deliberations from topics 
 necessary to the welfare of the country at large. Not 
 until then will special interests cease their persevering 
 efforts to mould the political action of the country into 
 measures designed to build up the fortunes of a class at 
 the expense of consumers at large. 
 
232 TAXATION. 
 
 It may be said that the establishment of exactly discri- 
 minating duties is impossible. The cost of imports de- 
 pends upon two variables, the quantity of commodities 
 exchanged for them, and the cost of producing those com- 
 modities. The cost of production varying constantly with 
 the enhanced or diminished value of capital in the several 
 producing countries in different years, with the cost of 
 living, with the various and frequent improvements in ma- 
 chinery, with the experience of producers ; and quantities, 
 prices, and demand being affected by currency derange- 
 ments, political disturbances, &c., variations will frequent- 
 ly take place in the line of demarcation between the protec- 
 tion and revenue effects of tariffs. Repeated investigations 
 would be necessary as to the relative cost of production 
 abroad and at home, and a constant chase would needs be 
 kept up after the mercury rising and falling in the indus- 
 trial barometer. A variety of causes would complicate the 
 embarrassments, and render it difficult to dodge the protec- 
 tion. A moment's reflection shows the difficulty lawgivers 
 must encounter in regulating tariffs. Satisfied with the 
 result of one inquiry, they would scarcely have congratu- 
 lated themselves upon the discovery of a rate which pro- 
 duced the necessary revenue without protecting than, 
 presto ! Yankee ingenuity outstrips John Bull's sturdy 
 stride, and lo ! they find the tariff planted on the platform 
 of protection ; importations fall off, and the revenue dimi- 
 nishes. Striving to retrieve this backward step (of tariff 
 taxation, not labor, that has taken a mighty stride forward), 
 they lower the duty to take off the protection, when, with 
 the increased importations caused by this comparative free 
 trade, all goes well for a time, until the capital and labor 
 that have again returned to their natural channels under 
 this beneficial absence of protection advance beyond the 
 
SUMMING UP. 233 
 
 line in company with what had continued in the previously 
 protected channels, and a new revision of the tariff is ren- 
 dered necessary. The truth is, this country progresses too 
 rapidly for tariffs naught but entire free trade leaves suf- 
 ficient scope for its mighty energies. How little do we 
 need protection ! 
 
 IN SUMMING UP, we observe, that it is to consumption we 
 must always resort. Whatever its form, the tax must al- 
 ways fall upon the consumers, upon productive or unpro- 
 ductive consumption. If it be levied directly upon real 
 property, the man of wealth owning houses raises their 
 rents ; the butcher, who must be a tenant if not a landlord, 
 charges the shoemaker more, by the amount of the tax, for 
 the meat he eats, who, in turn, must get more for his 
 shoes, and so around the circle of consumption. The ob- 
 ject to be sought then is, so to simplify the method of col- 
 lection, as to reduce its incidental expenses to the lowest pos- 
 sible amount consistent with security ; so to impose it as not 
 to impede production ; and to avoid all collateral payment of 
 bonuses to producers in order to secure their success over 
 competition; and also, to avoid the collateral payment of pro- 
 fits upon the original tax collected for government. This 
 last must ever be the case under indirect taxation, as we 
 have seen it is in the illustration of the enhanced cost of 
 the consumer's cloth, by addition of the per centage of profit 
 to the importer on the amount of duty he pays. The bonus 
 is paid under the form of protection ; the expense of collect- 
 ing an indirect tax we know to be greater than that of a 
 direct tax need be ; and when imposed upon the articles 
 consumed by laborers it checks production many articles 
 of mere show and luxury consumed unproductively, are 
 more easily reached by a direct than by an indirect tax. 
 
234 TAXATION. 
 
 The tariff system now exists as our fiscal lever, and 
 will for some time longer ; it is, therefore, for those who 
 are not disposed to favor an entire change from this system 
 to one of direct taxation, to exert themselves, and lop off 
 its hideous excrescences, a work which has been efficiently 
 and well begun by the tariff of 1846, and leave it in a state 
 as perfect as it is capable of assuming. Granted ! It is 
 evident that the duty imposed on many articles by our 
 tariff is too high. Take off a certain amount of rate, and 
 if the importations increase sufficiently to make up the 
 same amount of revenue as was collected under the higher 
 rate of duties, this much of the rate, if they are home pro- 
 duced, was protective. Therefore, if the protection is 
 taken off, the revenue will not be diminished, and, as we 
 have before seen, increased quantities of commodities are 
 brought within reach of consumers. 
 
 If, upon the rate being lowered, importations are not 
 increased, the previous rate was not protective nor prohibi- 
 tive. But this is never the case, because the lower the 
 rate, the less the cost, the greater the consumption, until 
 reaching that point where we would cease to have com- 
 modities to exchange for the foreign. In other words, 
 when each individual of the consumers is not able to buy 
 more of the articles. And this point under diminishing 
 duties is not reached, because with increase of abundance 
 comes ever increase of production and riches, and ability 
 to buy for consumption. 
 
 The dilemma then constantly presents itself of the im- 
 possibility of keeping in advance of protection and prohibi- 
 tion, they following close upon the heels of consumption 
 and production. Prohibition cannot be avoided ; and, 
 under the variables affecting production, how much of it 
 may be protective is a nice question, one impossible to 
 
SUMMING UP. 235 
 
 determine with accuracy. The old difficulty of finding 
 that time of demarcation at which to stop, attaches itself 
 inseparably to the tariff. Rather than endanger the con- 
 suming interests, by accidentally keeping out of their reach 
 any commodities that might otherwise fall within it, is it 
 not better to avoid a system of taxation that is so fraught 
 with the danger of these accidents ? 
 
 Is not the system of a revenue tariff, with incidental or 
 accidental protection, delusive and dangerous ? A revenue 
 tariff is the Scylla and Charybdis system of taxation. 
 
 A just taxation is one that shall take nothing from the 
 people (except the necessary expense of economical collec- 
 tion) but what goes into the treasury for the expenses of 
 that government which guards them ; and is one that debars 
 them from no enjoyment that they might possess, did they 
 simply pay directly to government the net amount of its 
 just demand. Is it not then a rational conclusion that a 
 just apportionment of taxation and a tariff tax are incompa- 
 tible ? 
 
 The direct system is most in accordance with the spirit 
 of our institutions. It has been said that "the best 
 government is that which governs the least ;" it may be 
 added that the best protection is that which restricts the least. 
 Upon this subject Dr. Franklin says : " Perhaps in gene- 
 ral it would be better if government meddled no further 
 with trade than to protect it, and let it take its course. 
 Most of the statutes, acts, edicts, arrets, and placards of 
 parliaments, princes, and states, for regulating, directing, 
 or restraining of trade, have, we think, been either politi- 
 cal blunders, or jobs obtained by artful men for private 
 advantage, under pretence of public good. When Colbert 
 assembled some wise old merchants of France, and desired 
 
236 TAXATION. 
 
 their advice and opinion how he could serve and promote 
 commerce ; their answer, after consultation, was in three 
 words only, ' Laissez nous faire.' It is said by a very 
 solid writer of the same nation, that he is well advanced 
 in the science of politics who knows the full force of that 
 maxim, pas trop gouverner, which perhaps would be of 
 more use when applied to trade than in any other public 
 concern. It were, therefore, to be wished that commerce 
 were as free between all the nations of the world as 
 between the several counties of England. So would all, 
 by mutual communication, obtain more enjoyment. Those 
 counties do not ruin each other by trade, neither would 
 the nations." When at this day we look at the operation 
 of free trade between the several states of our Union, so 
 happy in its effects, we are disposed to extend and apply 
 the remark of Dr. Franklin, and wish that the taxation for 
 the support of the confederation were levied like that for 
 sustaining the governments of the several states ; and that 
 we realized the consequent result of a commerce as free 
 between the confederated Union and the nations of the 
 world as that between the several states ; and no indirect 
 system of taxation existed, indirectly to impose sumptuary 
 laws upon the masses, in opposition to the just method of 
 taxation. 
 
 In this case, however, though in a minor degree, as in 
 that of slavery which could not be suddenly rent away, 
 and slaves be raised into a condition of self- relying liberty, 
 without injustice, nor without injuring those it was de- 
 signed to benefit changes should be gradual, lest the 
 bouleversement alarm the timid and injure vested interests. 
 Therefore, a change securing the abolition of the most 
 salient protective features of the present tariff, as this has 
 
SUMMING UP. 237 
 
 done of the preceding, is all it is proper to accomplish at 
 the next effort. There are possibly a limited number of 
 interests adapted by nature to the circumstances of the 
 country, yet so accustomed to past protection that the 
 sudden and entire removal of that now existing would 
 cause bankruptcies ; and this requires that the process be 
 one, extending over a period of perhaps twenty years, that 
 enables them to gather strength and hardihood under 
 gradually falling tariffs. 
 
 A kindred measure with free exchange, and directly 
 promoting equalization and independence ; that of govern- 
 ment bestowing quarter sections of its land upon actual 
 cultivators " without money and without price," furnishing 
 every citizen with what is then permitted to be an exempted 
 homestead, and refraining from sale and patent of more 
 than one section to an individual, is not subject to this 
 necessity for delay, but calls for instant adoption. 
 
 Protection removed, and the tariff changed to direct 
 taxation, the day could not be far distant when consump- 
 tion's gain would have amounted to a sufficiency for pay- 
 ing the cost of removing existing restriction upon the 
 freedom of the negro. Then, whenever the change being 
 felt by them to be compatible with their interests, and 
 called for by the state of local public sentiment the 
 slave states should respectively or collectively express 
 their voluntary determination to begin the work of emanci- 
 pation and colonization, those, whose radical views would 
 now urge from pulpit and from stump immediate loosening 
 of the hold a healthful conservatism maintains, or their sue- 
 cessors, would have an opportunity of responding to the 
 direct call of taxation for the means wherewith the free 
 states, through their separate independent action, should 
 
238 TAXATION. 
 
 aid in a great work that is to redound to the glory of the 
 nation at large. Then, if their precept endured the cost 
 of practice, and they failed not in the work, the much 
 desired end would be rightfully and cheaply attained ; and 
 the twentieth century, dawning upon the well established 
 practice of FREE EXCHANGE enjoyed by a population of 
 100,000,000, spreading from Canada to Cuba, before the 
 close, may signalize its fitting union with FREE LABOR 
 and FREE SOIL. 
 
 THE END. 
 
\ 
 

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