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Subject Area: Economics
Topic: Free Trade

ESSAY No. LV. - 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. LV.

september 1, 1830.

Niles’ Register. Fallacious reasoning of, in reference to the tariff upon the price of certain manufactures of iron and steel.

THE following article, from a recent number of Niles’ Register, has been copied into several tariff papers:

“The question—again—‘Are protected articles any cheaper than the British would have sold them to us, if we had not protected them?

“A pratical man, a machine-maker, informs us, that cast steel is higher than it was twelve years ago, and blacksmiths’ anvils at about the same price that they were then, because the manufacture has not been sufficiently protected. That cast steel was 470 dollars a ton, and now is 490: that, as a maker of spindles, he probably uses more cast steel than any other person in the United States, but would be exceedingly glad if a duty of 100 dollars per ton were laid upon the material, being certain that its domestic manufacture would then be extensively carried on, and the price lessened. He says, further, that many spindles are smuggled, and mentions a case in which a hogshead, invoiced as horse combs, or curry-combs, was valued at sixty dollars for duty, and contained one thousand dollars worth of spindles.”

This article is one of those matter of fact productions, supported on the authority of what are called practical men, by which it is expected to cajole the American people, and to make them sit easy under a weight of taxation, which no free nation on earth, having in their own hands the legislative power, would knowingly submit to. The matters set forth, are of such a nature, that none but practical men, who are familiar with prices current, can disprove. They are beyond the reach of persons who reside in the country, and are therefore calculated to make false impressions, for the want of other evidence. Situated here at Washington, without that access to a hundred importing merchants which we could have in a few minutes if our location were at Philadelphia or New York, it is somewhat difficult to meet such statements, with the proper sort of testimony. We have found from experience, that letters cannot supply the place of verbal communications. Merchants have their own affairs to attend to, and although they would willingly give any information that was asked, if sought for in person, they have a prodigious aversion to write letters, unless it be to a correspondent with whom they expect the balance of trade will be in their favour, which is not the case in dealing with us. To supply this deficiency, however, in some sort, we shall have recourse to such means as are within our reach.

The article in question asserts, that cast steel is higher than it was twelve years ago; that it was then 470 dollars per ton, and that it is now 490. Upon looking over “Canfield’s American Argus” of July 19, 1830, published at New York, which is the latest number of that price current we have seen, we find the following quotations of the price of English cast steel in the principal cities, viz:

New York,17½ to 19 cents per lb.
Philadelphia,17 to 20 cents per lb.
Baltimore,17 to 18¾ cents per lb.
Boston,17 to 18¾ cents per lb.

Taking 18½ cents as the average price per pound, the cost of a ton containing 2240 lbs. would be $414 40, and therefore, if the price twelve years ago was $470, a fact of which we have no knowledge, it is evident that cast steel has fallen, instead of risen.

That steel has fallen in Europe within the last twelve years, cannot be doubted by any one, who has observed the almost universal decline in prices which has taken place in other articles. It has not, it is true, fallen as much in proportion to its price as iron, but it must have fallen at least as much per ton as the iron of which it is made has fallen, for there is not the slightest ground for supposing that the art of making steel has gone backward instead of forward, and that it is now more expensive to convert a ton of iron into steel, than it formerly was. If, however, the fact were, in reality, that steel is now higher in this country than it was twelve years ago, a part of the increased price might be accounted for, by the increased duty of ten dollars per ton imposed by the tariff of 1828; the effect of which must unquestionably be, to make steel ten dollars per ton dearer than it would have been if that increase of duty had not been imposed. As to the wish of this practical man, that a duty of $100 per ton should be laid on this article, instead of the present duty of $30, we can assure him that, if such duty were to be imposed, it would increase the price of steel to the spindle maker 80 or 90 dollars per ton, (for the importing merchant would have his profit on the increased duty, and so would the retailer,) and that where one dollar’s worth of spindles are now smuggled, ten would be smuggled. If the competition of all the steel makers in Europe combined, where iron is from 27 to $40 per ton, and wages half the price they are in this country, has not been able to bring down the price of steel in twelve years, to pretend that the additional competition of the United States could effect it, would be just as rational as to suppose that tea could be grown in hot-houses sufficient to bring down the price in China.

The next proposition is, that blacksmiths’ anvils are about the same price in this country that they were twelve years ago, and that the reason why there has not been a fall in their price, is, according to the evidence of this practical man, that they have not been sufficiently protected.

The first part of this proposition is, for aught we know, true enough. We presume the art of making anvils has not, in twelve years, advanced so greatly as to abridge the manual labour requisite for their manufacture. The common business of a blacksmith, or an anvil-maker, like the business of digging a garden, requires perhaps as much hard work as it did twelve years ago, but it certainly cannot require any more. Now, as iron has fallen in price within twelve years, nothing can be clearer, than that the price of anvils must have fallen at the place where they are made. The fact of their not having fallen in this country, if such really be the case, can be accounted for by the increase of the duty which has taken place within twelve years, and which has been 22 per cent. ad valorem. But upon what authority, it may be asked, do we assert that such increase of duty has taken place? We reply, upon the best authority in the world—upon official documents. By the tariff law of 1816, the duty on anvils was 15 per cent. By the law of 1824 it was raised to 2 cents per lb. and so continues. By the last report of the Secretary of the Treasury, it appears that, in the year ending on the 30th of September, 1829, there were imported 699,836 pounds of anvils, the value of which was $37,873, equal to 5 cents 4 mills per lb. Now, a duty of 2 cents upon what cost 5 cents 4 mills, is 37 per cent., which is an advance upon the old duty of the amount we have expressed; and, consequently, if the duty had remained as it was twelve years ago, anvils would have been 22 per cent. cheaper than they were then, from this one cause alone.