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Subject Area: Economics
Topic: Free Trade

ESSAY No. LVI. - 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. LVI.

september 8, 1830.

Mr. Clay’s Speech at Cincinnati. Quotations from, and remarks upon.

A FULL report of the speech delivered by Mr. Clay, on the 3d of August last, at Cincinnati, has been published, containing in detail his views upon the several prominent questions which now divide public opinion. It occupies seven columns and a half of the National Journal, and may be looked upon as a confession of the political faith of one of the candidates for the Presidency.

The only portion of it which we propose to examine at this time, is a part of what relates to the tariff question; and as the doctrines advanced by Mr. Clay may be considered as supported by the strongest reasoning of the strongest man whom the American System can bring into the field, we think that if they can be shown not to be sustained, the laws of honourable warfare require that the contest should be abandoned, and that the peace and harmony of the country should no longer be jeopardized, by a vain and futile attempt to adhere to a system which is altogether founded on fallacies. In discussing topics of such a complex nature as those which are connected with the restrictive policy, we are aware of the great labour which is inseparable from an analytical exposition. A single fallacy, uttered in a dozen words, may require whole pages to refute, inasmuch as such a fallacy may be the conclusion to which a person has arrived, after a long process of reasoning, the unsoundness of which can only be shown by travelling over the whole ground, and pointing out, step by step, the errors assumed as truths. The radical difference between the reasoners on the free trade side, and those on the restrictive side, consists in this, and it is observable to any one who will take the trouble to examine it, that the former assume no position which they do not support by logical proof: the latter assume as truths, the very points in dispute, and then draw conclusions from them, plausible in appearance, and true enough, if the premises from which they flowed were true.

Thus, for example, in the speech before us, Mr. Clay lays down as axioms, the following positions:

1. That the great object of the American System is, “to secure the independence of our country, to augment its wealth, and to diffuse the comforts of civilization throughout society.”

We, on the other hand, deny that the means pursued can accomplish either one of these ends, for the simple reason, that the American System restricts the productive power of the community, and where there is any restriction upon industry, such as must exist where any one man is compelled by law to follow a business, which his interest would not lead him to follow without such compulsion, the total quantity of things produced must be less. The independence here spoken of, is that which is enjoyed by a labouring man, who is obliged to work ten days, to pay for an American made coat, when he could purchase a foreign one of as good quality, by working five days for it. The augmented wealth, is that which a family would enjoy, who had to pay double price for all their clothing and groceries; and the comforts of civilization, would resemble those experienced by the twelve thousand females in Philadelphia, New York, and Baltimore, described by Mr. Carey as not being able to earn twelve and a half cents a day.

2. That the American System “may be called a system of real reciprocity, under the operation of which one citizen, or one part of the country, can exchange one description of the produce of labour, with another citizen, or another part of the country, for a different description of the produce of labour.”

And pray, would not the free trade system, be as much a system of reciprocity as this? Would it prevent any individual from trading with another, if it was his interest to do so? Would it throw any obstacles in the way of an interchange of commodities between different sections of the country? On the contrary would it not enlarge the sphere of reciprocity, by throwing it open to the competition of the world? But perhaps Mr. Clay means, that if duties of a hundred per cent. were not imposed upon cotton fabrics, the people of the manufacturing states would have nothing to exchange with the people of the planting states. That might possibly be, but in the name of common justice, if a Carolina planter is compelled by law to give a Rhode Island weaver a bale of cotton for 300 yards of cloth, when a foreigner would give him for it 600 yards, call this any thing but reciprocity, if a reciprocity of benefits is intended. The term is a gross misnomer, and is not at all adapted to express the operation of the system, which is neither more nor less than authorizing Peter to rob Paul of fifty cents, and Paul to rob Peter of a dollar, which the latter would think no reciprocity at all.

3. That “it is a system which develops, improves, and perfects, the capabilities of our common country, and enables us to avail ourselves of all the resources with which Providence has blessed us.”

So far from this being the case, it produces the opposite effects. It may indeed turn a farmer into a spinner, and take him from the field, where he breathes an atmosphere of purity, freedom, and independence, and coop him up in a workshop, to inhale stagnant air, and to vote the ticket put into his hand by his employer. It may convert a sailor into a weaver, and thus deprive the nation of one of the main pillars of its defence and glory, and civilization of one of the great instruments of its conveyance from the more enlightened to the less enlightened portions of the human family. But what development of capabilities would this display? The business of a farmer and a mariner requires quite as much mental capacity as that of a spinner or weaver, and so far from the moral power of the country being advanced, by the conversion into manufacturers of those who would otherwise embrace agriculture and commerce, we should consider it decidedly as a retrograde movement. As to the resources with which Providence has blessed us, some of the principal ones are these: more than a hundred millions of acres of land, now unoccupied, (and capable of sustaining as many people,) which can be bought at a dollar and a quarter an acre; unbounded forests of ship timber; a locality on the globe which gives us advantages in carrying on commerce with the West Indies, with Mexico, and the whole of South America, which Europe does not enjoy; and, above all, an enterprising, venturesome, industrious, and liberty-loving people, whose faculties would have a much fairer chance of development, by traversing the remotest regions of the earth, whitening every sea with their canvass, and bringing home in exchange for the products of agriculture and of the natural manufactures of the country, of which there are many that need not the aid of taxation to support them, the productions and fabrics of foreign climes, in far greater abundance than they could have been produced at home by the application of the same quantity of labour.

4. That “to the labouring classes it is invaluable, since it increases and multiplies the demands for their industry, and gives them an option of employments.”

Here we have a specimen of the poisoned honey. A position is assumed as granted, which, if true, would terminate the whole discussion. It is upon this grand delusion that the whole question turns. It is to prove, that the doctrine here laid down, with all the authority of a dogma, is the very reverse of true, and to save nations and individuals from the ruin and mischief of embracing it, that Adam Smith, Say, Ricardo, McCulloch, and a dozen others, have written their able and irrefutable treatises. And yet, with all the lights of the present age, with the testimony against this doctrine of the most eminent statesmen of this and other countries, it is now gravely put forth, as a principle which ought not to be disputed, that the imposing of restrictions upon agriculture and commerce, increases the demand for the industry of the labouring classes. Now, we will venture to assert, that there was not amongst the hearers of Mr. Clay, a single working man or farmer, who, if the following questions had been presented to him, would not have given answers directly subversive of Mr. Clay’s position.

Is it an advantage to you to pay a tax of three cents a pound on all the sugar you use in your family, merely that a few sugar planters in Louisiana may be enabled to ride in coaches?

Is it an advantage to you that you should have to pay a tax of 22½ cents on every square yard of flannel or green baize you may require for the clothing of yourself, wife, and children, in order that a few stockholders in manufacturing establishments may declare large dividends?

Is it an advantage to you, that you should have to pay a tax of five dollars upon every ten dollars you expend in the purchase of woollen clothes, merely for the sake of enabling others to grow rich, or even of saving them from loss?

Is it an advantage to you, to pay a tax of $37 per ton, upon all the bar iron used in building houses and steam-boats, and in agricultural and mechanics’ implements?

Is it an advantage to you, to pay, as you do, the wholesale merchant’s profit of ten per cent. and the retail merchants’ profit of ten or twenty per cent., more, upon these very taxes, they being obliged, when they purchase the goods, to pay the tax, which is always included in the price?

If your answer to these questions be in the negative, that is, if it be no advantage for you to be thus heavily taxed, must it not be a disadvantage to you?

Would you have as much money to expend in other objects, as if you had not been thus taxed? and if not, could you afford to employ the industry of as many other people, as if the tax had remained in your pocket?

Now, what is true in your case, is true in every body else’s. Taxation takes away from people the power to consume the products of the industry of others, and if you have to pay fifty dollars a year more for things, than you would have to pay for them if you were not taxed, you will have precisely fifty dollars less to expend upon your own comfort. Away then with the absurdity of representing taxation as a blessing.

5. That “it adds power and strength to our Union by new ties of interest, blending and connecting together all its parts, and creating an interest with each in the prosperity of the other.”

We think this position completely overturned, by the facts of the case. The American System, so far from adding power and strength to our Union, is the very thing that is at this moment threatening its dissolution. A greater unanimity of sentiment has never prevailed upon any one question in this country, than that which now exists in six or seven states, in regard to this matter. There is indeed a wide difference of opinion, as to the mode of displaying hostility against it, but we apprehend that the number of individuals who are prepared to submit to it as the settled policy of the country, is a mere handful. To speak of it, therefore, as a bond of strength and power, is a capital error; and to suppose that it ever can become so, is, we apprehend, a fatal delusion, and such as no one who aspires to be at the head of this government ought to indulge in.

6. That “it secures to our own country, whose skill and enterprise, properly fostered and sustained, cannot be surpassed, those vast profits which are made in other countries, by the operation of converting the raw material into manufactured articles.”

Had we been complimenting the skill and enterprise of our country, we should have represented them as not being surpassed by those of any other nation, and as being capable of the fullest development, without the aid of the miserable crutch called protection. A free people are most skilful and enterprising, when their industry is left unshackled, and although, even with the cords and bandages of restrictions about them, they will still be prosperous, in the same manner that a man, after the loss of one of his fingers, may still get his living at manual labour, yet their prosperity cannot be as great as it would have been, had perfect liberty of employment been guarantied by the laws, as it was by the constitution. To suppose, therefore, that we can, by restrictive laws, secure the profits of manufactures, that result in other countries from local advantages which do not exist here, such as cheapness of labour, the low price of iron for machinery, and the superabundance of capital, is not less chimerical, than to suppose that we could, by raising tea in hothouses, obtain the profits which the Chinese enjoy. If Mr. Clay attaches any advantage to the possessing of the raw material, we can assure him, that bar iron is in England less than $30 per ton; that wool is cheaper than it is in this country, where high duties are imposed on purpose to make it dear; and that, with respect to the article of cotton, the Liverpool price is very seldom more than one cent per pound higher than the Boston and Philadelphia price, which, upon a yard of muslin, containing one-fifth of a pound, is an almost imperceptible advantage.

7. That “it naturalizes and creates within the bosom of our country, all the arts: and mixing the farmer, manufacturer, mechanic, artist, and those engaged in other vocations, together, admits of those mutual exchanges so conducive to the prosperity of all and every one, free from the perils of the sea and war.”

Every person who will reflect upon the subject, will perceive that, in every country where the soil is capable of sustaining the population by moderate industry, the great mass of products consumed, must, from the nature of things, be produced at home. The existence, therefore, of farmers, mechanics, manufacturers, artists, and those who are engaged in other pursuits, is the natural state of society, and is no more brought about by the protecting system than the existence of lawyers, physicians, and clergymen. Wherever there is land occupied, there must be farmers; wherever there are farmers, there must be mechanics, manufacturers, artists, merchants, &c.; and whether there are high duties, or low duties, or no duties at all, this must always be the case; with this difference, however, that there would be more of them, if the taxation was low, than if it was high. Did Mr. Clay, by employing this language to “the working men” of Cincinnati, intend to inculcate the idea, that, if the prices of foreign goods were to be reduced by the lowering of the duties to half their present prices, the carpenters, bricklayers, masons, plasterers, painters, glaziers, lime-burners, stone-quarriers, brick-makers, lumber merchants, paper hangers, cellar diggers, carters, and others employed in building houses would be injured in their business? Or, that the steam-boat builders, steam engine makers, boat men, canal men, wagoners, dray men, and other; concerned in preparing the means of transporting the increased quantities of flour, pork, beef, lard, hams, butter, whiskey, and other productions of agriculture, which would be called for by foreign countries if we would admit their productions at low rates of duty, would be losers by the reduction of prices? Or, that the manufacturers and tradesmen of that thriving and beautiful city, emphatically styled the Queen of the West, the brewers, bakers, book-binders, blacksmiths, barbers, coopers, confectioners, curriers, cabinet makers, chairmakers, coppersmiths, coach makers, coach painters, coach trimmers, dyers, distillers, gunsmiths, grave-diggers, harness makers, hatters, innkeepers, joiners, livery stable keepers, labourers, milkmen, milliners, mantua-makers, mill-wrights, printers, pavers, pump-makers, paper-carriers, potters, shoemakers, soap-boilers, saddlers, stage-drivers, tailors, tobacconists, tallow chandlers, tinmen, tanners, upholsterers, wheelrights, wood-sawyers, watchmakers, &c., would be injured in their occupations? Or, that any of these people, or that any of the farmers of Ohio, or the owners of property in Cincinnati, would be injured by the adoption of a policy, the tendency of which would inevitably be, to encourage emigration to the West? If so, we apprehend his hearers must have thought their understandings greatly undervalued. The people of Cincinnati are too shrewd not to be able to perceive, that emigration to the West is the great source of prosperity to that city, and that, consequently, any policy which has a tendency to keep population in the Eastern States, is a positive injury to them. But Mr. Clay caps the climax of his long string of fallacies with the following one, which is not less palpable than the rest.

“All this it effects whilst it nourishes and leaves a fair scope to foreign trade.”

Who can read this without perceiving that it assumes as granted the whole point in dispute? It is impossible that any one branch of industry can be supported by a tax upon the other branches, without depressing the latter to an extent equal at least to the support given to the former. It is impossible to sustain manufactures by a tax upon agriculture and commerce, and leave either of the latter as prosperous as it would otherwise be; and no “fair scope” can be predicated of any pursuit, unless under a state of perfect freedom.

But although we cannot compliment Mr. Clay for expressing the views of an enlightened statesmen upon these points, we will give him credit for consistency. He does not, like many of the tariff party, indulge in acrimonious language against the British for their corn laws. He is an advocate of that system, and if he were a member of the British Parliament, he would advocate as strenuously the soundness of the policy of compelling an Englishman to pay double price for a loaf of bread, as he does that of making one of his own countrymen pay double price for a coat or a pound of sugar. This is his language:

“Suppose we were a nation that clad ourselves, and made all the implements necessary to civilization, but did not produce our own bread, which we bought from foreign countries, although our own was capable of producing it, under the influence of suitable laws of protection, ought not such laws to be enacted? The case supposed is not essentially different from the real state of things which led to the adoption of the American System.”

At present we shall content ourselves with a single further quotation, which immediately followed the above:

“That system has had a wonderful success. It has completely falsified all the predictions of its opponents. It has increased the wealth, and power, and population, of the nation. It has diminished the price of articles of consumption, and has placed them within the reach of a far greater number of people than could have found means to command them, if they had been manufactured abroad instead of at home”!!!

Mr. Niles insists upon it that castor oil has fallen in price in consequence of the protecting duty imposed upon the foreign article, and as proof incontestible of this assertion, he shows that the price in 1819 was $5 per gallon, and that it is now $1.25. He does not, however, show, which is quite essential to his argument, that if the present duty of forty cents per gallon were taken off, castor oil would not be lower than it is. Cotton goods, woollen goods, sugar, coffee, tea, hardware, iron, and almost every thing else, are cheaper now than they were in 1816, and if the American System did not stand in the way, they would be much cheaper still.