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Subject Area: Economics
Topic: Free Trade

ESSAY No. XLII. - Condy Raguet, The Principles of Free Trade [1835]

Edition used:

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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Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.


ESSAY No. XLII.

may 22, 1830.

A reduction of the duties on foreign liquors would promote the cause of agriculture. This proved, by reference to our trade with the West Indies, France and Holland.

IN our last paper we promised to shew to the Temperance Societies, that a reduction of the duty on West India spirits, French brandy, and Holland gin, so as to enable the importer to sell those articles at 60 cents a gallon instead of a dollar, (the present wholesale price,) besides encouraging temperance, would promote, instead of injure, the interests of agriculture; and we think if we can make out our case, that we have a right to claim their adhesion to the cause of free trade.

West India spirits is an article imported from Jamaica, St. Croix, Antigua, or the other islands, where it costs about 40 cents a gallon, a little more or less. The people who make it, have a queer notion that those who want it ought to pay for it; and although we have often heard arguments in support of the American System, which supposed that the British were a generous people, who would send their cotton and woollen goods to the United States and give them to us for nothing, yet we have never heard of any West India planter being so liberal. In fine, the producers of rum insist upon it that commerce is an exchange of equivalents, and that for every gallon of rum they sell, they must have forty cents worth of some other thing. Indeed their stubbornness upon this point is so well known, that the American merchants, when they send a vessel to the West Indies to get a cargo of rum, never think of asking for it for nothing, but always take with them something to swop for the rum. The articles generally taken for this purpose, are those which the planter stands more in need of than he does of liquor, and these articles consist mostly of the products of agriculture, such as staves and heading, shingles, boards and planks, timber, lumber, masts, spars, tar, pitch, rosin, turpentine, skins, furs, beef, tallow, horned cattle, butter, lard, pork, cheese, hams, bacon, hogs, horses, mules, sheep, flour, Indian corn, corn meal, rye meal, rye, oats and other small grain, biscuit, ship-bread, potatoes, apples, rice, tobacco, beer, porter, leather, candles, soap, hops, linseed oil, vinegar, and some other articles. Now any man who has ever looked over an invoice of a cargo destined for the West Indies, will have discovered that nine-tenths of it invariably consist of the products of agriculture, and chiefly of flour, corn meal, pork, lard, hams, bacon, and lumber; and as in our trade with the West Indies our vessels bring back in rum, sugar, coffee, &c., no more than the quantity purchased with the proceeds of the sales of the outward cargo, it follows that, for every gallon of spirits we import, a sale has been effected of agricultural produce, worth in the West Indies, after the addition of freight, insurance, commissions, &c., forty cents, and which had cost at home, before shipment, we will suppose, thirty cents. In other words, for every 100 gallons of rum we import, our farmers sell thirty dollars worth of produce, and whether that produce be in one form or the other, is of no sort of consequence to their interests.

The question now presents itself, if, instead of selling this produce to the West India planters, for rum, the farmer sells it to the domestic distiller for whiskey, what demand will be made upon agriculture to supply the demand for 100 gallons of whiskey? This question is very easy of solution. It is known to every one, who has made inquiries of distillers on the subject, that one bushel of corn, out of which all the cheap rye whiskey is made, will produce two gallons and a half of whiskey, and consequently forty bushels will produce a hundred gallons. The next question is, what is the value at the still-house of a bushel of corn? In some places, as in Ohio, it is as low as 25 cents, and even lower, and in no place where distilleries are established, is it higher than 50 cents, the average of which is 37½ cents. It follows, therefore, that for every gallon of whiskey consumed in the country, there is a demand upon agriculture for only fifteen cents worth of produce, which is precisely one-half the quantity which would be required to meet the demand for one gallon of West India rum. If this reasoning can be controverted, we should like to see it done. We have never yet found a reasoner who could advance even a plausible argument in opposition to it, and we now challenge the whole school of American System philosophers to meet us upon this point, and we will cheerfully publish their communications.

It may indeed be urged, that by the present cheapness of whiskey, a greater quantity is consumed than would be consumed of foreign spirits at double the price. That is no doubt true; but although that would be an argument for the distillers of Lancaster county, and for the American System politicians, it is not such a one as the Temperance Societies should employ. It is indeed a lamentable truth, that the American System has not only struck a deadly blow at the physical prosperity of the people, but has done more to sap and undermine the morals of the nation, by converting honest and sober people into smugglers and drunkards, than can be easily remedied, and those who have been instrumental in its establishment, will some day, we trust, feel the responsibility they have incurred.

Having thus, as we conceive, settled one branch of the subject, we shall now take up the case of French brandy. We export to France, annually, eight or nine millions of dollars worth of agricultural produce, consisting chiefly of rice, cotton, and tobacco. Although these articles grow south of Mason and Dixon’s line, they are not the less, on that account, the products of agriculture. Every pipe of 100 gallons of French brandy, therefore, shut out of the country by high duties, occasions a diminished demand upon the products of the planting states, for thirty dollars worth of cotton, rice and tobacco, whereas a hundred gallons of whiskey creates a demand, as in the above case, for only fifteen dollars worth.

The case is the same in regard to Holland gin. We export to Holland, annually, about two millions of dollars value of domestic products, chiefly consisting of pot and pearl ashes, rice, cotton, and tobacco, and the same result takes place as has been described in relation to brandy. If Wiesp anchor gin were drank instead of whiskey, each gallon would occasion a demand upon agriculture for double the amount created by a demand for a gallon of whiskey.

Perhaps it will be said that these nations would not purchase of us more largely than they now do, if the duty on their liquors were reduced. If that should be the case, then it would be very clear that we could not buy any more of their liquors. A country which possesses no mines of gold and silver, can only pay for what it purchases abroad, with agricultural productions or manufactures, and if she has none that will suit the countries of which she wishes to purchase, she cannot buy their commodities. Neither the Frenchman nor the Dutchman will give us his liquor for nothing, and there need therefore be no fears that the country would be inundated with brandy and gin. At all events we should lose nothing by trying the experiment, and as the agriculturists are the people mainly interested in this question, we can assure them, that if they wish to consult their own true interest, they will give it a trial, for if it fails, the domestic distillation is always at hand to place matters in statu quo, and as for the duty, the government no longer needs it for revenue.

But even supposing, what we are sure would take place, that there would not be as many gallons of foreign liquor drank at 60 cents, as there now is of whiskey, the reduction would have to be very great indeed to reduce the demand for the productions of agriculture below what it now is, for we have shewn that one-half of the whole number of gallons might be curtailed without diminishing the value of the productions necessary to procure them with. But even if the reduction were to be much greater than one-half, still agriculture would not suffer. The sobriety of the people, consequent upon drinking only a gill, where they used to drink a pint, would promote industry, decency, education and improved manners; and the inevitable effect of this would be to increase the demand upon agriculture for those other productions, belonging to the comforts and luxuries of the table, which whiskey-topers never aspire to. In these opinions we are strongly confirmed; and if the Temperance Societies will only examine the subject, they will find that the remedy for inebriety, which we have suggested, will be a powerful coadjutor to their other exertions.