Front Page Titles (by Subject) ESSAY No. XI. - The Principles of Free Trade
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ESSAY No. XI. - Condy Raguet, The Principles of Free Trade 
The Principles of Free Trade illustrated in a series of short and familiar Essays originally published in the Banner of the Constitution, 2nd ed. (Philadelphia, 1840).
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ESSAY No. XI.
february 3, 1830.
Trade between the United States and Madeira. Influence of high duties upon wine, in diminishing exports, as well as imports. Effects upon consumption of a small increase in price.
THE commerce between the United States and the island of Madeira, affords one of the most fatal examples of the folly of tampering with trade, and of the ruinous consequences of high duties, which is afforded by our custom-house returns. Our exports, which were once two millions three hundred and thirty-six thousand six hundred and fifty six dollars in a year, have dwindled away to one hundred and eleven thousand nine hundred and thirty three dollars, as will appear from the following statement, which shews the amount exported in the following years:—
The above table commences with the first year in which an account was kept of the exports to Madeira, separate from those to the other Portuguese dominions, and up to 1802, inclusive, comprises the articles of foreign as well as of domestic growth. Since that year the exports include none but domestic productions, of which the principal were flour, corn, corn meal, ship bread, lumber, fish, oil, spermaceti candles, beef, pork, butter, lard, hams, bacon, rice, bees’ wax, tallow, candles and soap. Now if we can perceive a great falling off in the amount of these exports, since the increase of the duties upon Madeira wine, it is very fair to conclude, that a great part, if not the whole of it, has resulted from that increase. By the act of 1794, the duty on London Particular was fifty-six cents, and upon other Madeira, 40 cents per gallon. By the act of 1816, the duty, which had been raised by the war act, was retained at one hundred cents upon all kinds of Madeira, and continued at that rate until 1828, when it was reduced to fifty cents, to take effect from the 1st of January, 1829.
To those who have not been accustomed to reflect upon the great influence upon consumption, of a small change in the price of a commodity, the foregoing revolution in our commerce with Madeira will hardly appear to have been brought about by so slight an increase of duty. To such we would remark, that in some articles of luxury, a resort to a diminished quantity is had upon the most moderate rise in price, or the use of it is abandoned altogether. An increase of sixty cents in the duty on one gallon of Madeira wine, would occasion an increase of price, by the time it reached the hand of the consumer, of seventy-five cents, inasmuch as each vender charges a profit upon his advance of the amount of the duty. Wine, which used to be three dollars, must be sold at three dollars and seventy-five cents; and our wine merchants know, that the great mass of persons who used to purchase common Madeira wine, regarded three dollars as the maximum price which they would consent to give. We understand that, in Philadelphia, there is not now a gallon of Madeira wine drunk, where formerly there was a demi-jean, and we have the authority of an extensive dealer in wine for asserting, that many, who were formerly liberal consumers of wine, are now drinkers of brandy. The misfortune of this too is, that after new habits are formed, it is no easy matter to change them, and one of the lamentable effects flowing from the American System is, that it has converted drinkers of wine into drinkers of spirits. If any one doubts our position, as to the influence of a small rise of price upon consumption, let him inquire of his next door neighbour, whether he does not, in marketing for his family, establish in his own mind a limit for articles of luxury, such as butter, eggs, lamb, asparagus, cream cheese, lobsters, young chickens, strawberries and other delicate fruits, beyond which he will not purchase, and he will soon ascertain, that there is not an individual whose consumption of luxuries is not regulated by very arbitrary laws.
That we should import more wine from Maderia than we pay for with our exports, which is the case at present, is one of the consequences of our own acts. Madeira, at one time, took from us forty thousand barrels of flour per annum, besides large quantities of corn. She paid us in wine, of which we took from her, at that time, about five thousand pipes. We then resolved, by increasing the duty on wine, to diminish the extent of our trade, and we now import only two thousand five hundred pipes, for a population nearly double. This step drove Madeira to find out another market for bread. She found it in Sardinia, from which country she now derives the supply which she formerly drew from the United States, and at a much cheaper rate; and as Sardinia takes no wine from her, she pays for her bread with the funds which we pay her for wine. This roundabout commerce is now the most profitable for Madeira. How soon our reduction of duties will bring back trade into its old channels, time will determine. The taste and fashion for wine, will gradually return with its cheapness, and as the vessels which bring it to this country will be able to carry outward cargoes at a very low freight, there cannot but be a revival, to some extent, of the export trade. The nation, however, has lost by its folly millions which can never be regained, and has driven thousands from the consumption of a wholesome and innocent liquor, to inebriating substitutes, which they can never be induced to abandon.*
[* ] Since the reduction of the duty on the wine of Madeira, the exports to that island have been as follows—
This statement shews an increase, but one so small, as to prove, incontestibly, the difficulty of restoring a commerce once lost.