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Subject Area: Economics
Topic: Free Trade

ESSAY No. XLIX. - 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. XLIX.

august 4, 1830.

Influence of the tariff upon the Southern states. Total possible consumption in the United States of cotton fabrics.

SOME of the Pennsylvania editors have the most summary mode of putting an end to an argument that can well be devised. Some time ago the Village Record disposed of the Internal Improvement question in the following droll manner, and pretty much in the same words: “After all, the best mode will be, to consider the question as settled, and to go on with the works.” The President, however, has thought differently on the subject, and, so far from the question being settled, we are quite sure that it never will be settled upon the plan of the Village Record.

Precisely in the same short-metre style has the Pennsylvania Inquirer lately handled the Tariff question. In making some remarks upon Mr. Cheves’ speech, at the State Rights’ Celebration at Charleston, it says:

“Mr. Cheves declares, in reference to the tariff laws, that the Southern states are ‘bowed down and humbled,’ by the rest of the Union, ‘to colonial suffering, dependence, and degradation.’ He attempts to sustain this position by the argument, that there are no fewer than seven sovereign states, whose agricultural staples require a foreign market, to be of any value; that they have been deprived of this market without their own concurrence, not one of their representatives having voted for the tariff, and that their money is taken from their pockets without their consent and against their will. This is the substance of the argument.

“In reply, we contend, that the home market for the Southern staples, at least for the great staple of cotton, the only one materially affected by the tariff, has extended more rapidly than the foreign market has contracted; that the home market is more certain, safe, and settled, than the foreign market, and that South Carolina has sold her cottons to as great a profit, and to as great an extent, as if the tariff laws had never been passed. These are facts which no theoretical speculation on the part of Southern statesmen can refute.”

It will be here observed, that the Inquirer arrives at his conclusion, not by argument, nor by any process of reasoning, but by assuming as admitted the chief point in dispute. The Southern statesmen assert, that, by the exclusion of foreign goods, which, if admitted, would be paid for with cotton, they lose the sale of that staple to an amount at least equal to the value of the articles excluded, and that this loss cannot possibly be counterbalanced by the increased demand of the home market. One reason for this is, and it ought to be conclusive with any man who can understand a simple proposition, that if cotton fabrics were imported, they would be so much cheaper than those made at home that more of them would be consumed than can now be consumed. That they would be cheaper, is proved by the necessity of the existence of the high duty of from 35 to 100 per cent. to shut them out; so that, even upon this simple view of the case, there would even be, under low duties, a greater demand for cotton to be exported to Europe and brought back in a manufactured state for our use, than the domestic factories can afford. Another and more important reason, however, consists in this, that high duties, on iron, hardware, woollen goods, and the various other articles that are partly or wholly excluded by the tariff system, diminish the European demand for cotton, without increasing the domestic demand, which is only affected by the exclusion of cotton or linen goods. Every duty, therefore, which prevents the importation of three millions of dollars worth of such goods, destroys the sale of 100,000 bales of cotton, estimating each bale to contain 300 pounds, at 10 cents per pound.

But we have still another position to advance, which we challenge the Inquirer, or any paper north of the Potomac, to refute. It is this—Admitting (for the sake of discussion) that the increased home demand, up to this time, has been equal to the diminished foreign demand, the argument can have no force whatever in future; and for this simple reason, that 200,000 bales of cotton, which is now the estimated quantity manufactured at home, is the greatest possible quantity that can be consumed by the present population, even if there were a total prohibition of every species of cotton fabric. This can easily be proved, by a statement which, we flatter ourselves, will not be rejected by any one on account of its too narrow limits.

One pound of cotton, manufactured into what are commonly called domestics, will make about five yards. Of finer and lighter goods, it will make more; of coarser and heavier ones, it will make less. One-fifth of a pound may perhaps be assumed as the average; and if this be admitted, it will follow that 200,000 bales of cotton, weighing each 300 lbs., will make 300,000,000 yards, which is equal to 25 yards for each man, woman, and child, rich and poor, bond and free, in the whole, estimating the population at 12,000,000. Now, we would like to know whether the consumption of cotton goods, in all their forms, is likely ever to be pushed, by the present population, beyond this enormous quantity, and if not, there can arise no home demand to compensate for the loss of the foreign demand, now bearing its weight upon the Southern states. But it may be said, the population will increase. Granted; but producers will also increase in the same ratio with consumers, and the relative position of the two classes will be the same as before. It will also be said, that we shall manufacture for exportation. Granted; but, whatever wiseacres and conjures may say to the contrary, no nation can compete to advantage with another in a foreign market, when she cannot do it in her own. To pretend that our manufacturers of cotton can send their goods to South America, and after paying freight, insurance, commissions, duties, and other charges, can undersell the British, when, without incurring these expenses, they cannot do it at home without a duty of from 35 to 100 per cent., is just as absurd as to suppose that Mr. Henry Pratt could export coffee, raised in his hot-house, to Europe, to undersell the Brazilians. An occasional lucky voyage may be made to some of the unsettled countries of the South, where the markets are sometimes understocked, in the same manner that European goods imported into this country, are sometimes advantageously exported, even though burthened with the charges of import, from which articles direct from Europe are exempt; but any man who suffers himself to believe that his once drawing a prize in a lottery, is any proof that lotteries are a profitable concern, for all who adventure, must be under a high degree of delusion, and if he gets ruined by his folly, he will have nobody to blame but himself.