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Subject Area: Economics
Topic: Free Trade

ESSAY No. XLIII. - 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. XLIII.

may 29, 1830.

American industry promoted as much by the consumption of foreign commodities, as by that of domestic productions.

IT is truly extraordinary to see the pertinacity with which the American System philosophers hold on to the doctrine that agriculture is not American industry. Now if the planting and harrowing of land, the sowing of seed, the gathering of the crop, and the hauling of it to market, all performed on American soil, under the jurisdiction of American laws, under the protection of the American government, and by American citizens, is not American industry—we should like to know what right spinning and weaving, and especially when they are performed, as they are to a great extent, by foreigners, have to the appellation? But who says that the labour of the husbandman or the planter is not American industry? We answer, all the restrictive writers who touch the subject. They do not, it is true, make the assertion in direct terms, for that would injure their cause with the farmers, who, forming a majority of the nation, can control its political course. But they constantly do it indirectly, when they boast that a piece of home-made cloth is the product of domestic industry, and deny that a piece of foreign cloth is. For how can a piece of foreign cloth be brought into the country, except in exchange for some product of agriculture? And how can a product of agriculture be brought into existence except by the exercise of American industry? If a Pennsylvania farmer raises five bushels of wheat, converts it into flour, and sells that flour abroad for a yard of cloth, has not as much American industry been employed in procuring that yard of cloth as if it was the produce of one of our own factories? How any one can deny a truth so self-evident, it is not easy to perceive, and yet it is, as we have said, denied every day, and even by many who should know better. For those, however, who are innocently in error on the subject, we will offer a few illustrations:

“Louisiana sugar,” say the restrictionists, “is the product of domestic industry—West India sugar is not.” But West India sugar is altogether purchased with flour, corn meal, lard, butter, beef, pork, and other productions of agriculture. Is not therefore the labour of the Pennsylvania or Ohio farmer as much instrumental in producing the foreign sugar, as the labour of the Louisiana planter, in producing the domestic?

Again, the same reasoners say, that the iron produced by the iron masters of Pennsylvania, Maryland, &c., is the product of American industry, but that English, Russian and Swedish iron is not. And yet English, Russian and Swedish iron could not possibly be procured but in exchange for agricultural productions. Sometimes, indeed, this exchange is not a direct one. Very often we send a cargo of flour to the West Indies or Brazil, exchange it there for sugar or coffee, and with that sugar or coffee go to Europe and purchase the iron. When, however, such circuitous voyages are undertaken, it is because more iron can be procured for the flour, even after paying the double freight and expenses, than could be procured by a direct barter, or otherwise it would not be done, and it can be of no sort of consequence to us whether the voyage be direct or indirect, provided we obtain the most profitable result. Now, if ten barrels of flour can be sent to the Havana, and be there converted into as much sugar as will procure a ton of iron in St. Petersburgh, we should wish to know whether American industry has not been applied to the procuring of it, as much as if a ton of iron had been smelted and hammered from ore dug up in Lancaster county?

Again we are told, that salt, manufactured at Salina in New York, at Conemaugh in Pennsylvania, and Kenhawa in Virginia, is the product of American industry; but that salt imported from Lisbon, Cadiz, and Turks Island, is not. Now is it supposed that the salt makers of those places give us their salt for nothing? We hardly think that any one will advance such an absurd position. We must therefore pay for it. And how can a nation, which has no gold and silver mines, pay for foreign products but by domestic products? And if we pay for salt with flour, and other similar productions, or, what is the same thing, with commodities purchased abroad in exchange for those productions, why is not foreign salt as much the product of American industry as domestic-made salt?

The same reasoning applies to all articles of foreign production. They are all the productions of domestic labour, and are as much entitled to the rank of American industry as any species of labour performed with the spindle or loom. It is true, that foreign products are not always procured by an immediate exchange for domestic products. Wherever this, however, is not the case, as we have already remarked, it is always because, by pursuing an indirect exchange through the intervention of a third party, a more profitable barter can be made. And surely no individual would condemn another for making a circuitous bargain, by which he could put more into his pocket than by making a direct one. Who would say that the farmer was unwise, who, having wool for sale, and wishing a pair of boots, should prefer giving it to the hatter for an order upon the boot-maker for a pair of boots, rather than insisting upon a direct exchange with the boot-maker, who, not being in want of wool, should refuse to give him for it, more than a pair of shoes? And how then can it be maintained, as some of our politicians do, that, unless we can make a direct exchange with a foreign nation, it is unprofitable to trade with her? If, say they, Great Britain will not give us as much for our flour as the West Indians and South Americans will give, our true policy is not to exchange cotton with her for her manufactures, although she is willing to give us for it more than any other nation, and to take from us as much as we can raise and are willing to let her have, for its proper equivalent in her productions. This is precisely the same thing as if the farmer we have just referred to, should say that, because the boot-maker would not give him as much as the hatter for his wool, he would not sell him wheat for a pair of boots, when nobody else would give him for it more than a pair of shoes. It is really time that our soi-disant statesmen should abandon such childish arguments, and look at things as they really are. The true state of the case is this: Pennsylvania raises wheat, and wants woollen cloths. She says to Great Britain, I will give you flour for manufactured goods. Great Britain says, Agreed—I consent to the exchange. But Pennsylvania says, You will not give me as much for my flour as I can get from others. That may be, replies Great Britain, and therefore your best policy will be, to let your neighbours, Carolina, Georgia, &c., have your flour in exchange for their cotton, and I will let you have for the cotton more manufactured goods than you can get from any other European nation, and twice as much as you can make at home, with the same number of hands now employed in raising the flour with which they will be paid for. Pennsylvania consents, and it is by this roundabout process that she does actually at this time pay for nearly all the British goods she receives, amounting to several millions of dollars annually. And now, we would ask, is not this circuitous mode of dealing with Great Britain more advantageous to Pennsylvania than a direct exchange of flour for manufactures would be? And is not as much American industry employed by that mode of procuring cloths as would be set in motion by taking the labouring man from the tail of the plough and putting him to work in a factory?