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Subject Area: Economics
Topic: Free Trade

ESSAY No. LXII. - 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. LXII.

october 20, 1830.

The West India trade. Benefits resulting from its being opened with the United States.

ONE of the most unhappy results flowing from the extent to which party and personal politics have been carried in this country, for several years past, is that of wholly destroying the nationality of our public acts, and of making them all subservient to party ends. There is now in the United States no conceivable measure, which the present or any other administration could adopt, which would not be liable to be made the theme of party abuse and misrepresentation, and which would not be viewed as praiseworthy or otherwise, according as it happened to militate against, or favour, the elevation of particular men. To this shrine of personal politics all other considerations are sacrificed, and matters which concern the interests and prosperity, nay, the very honour of the country, are held as nothing in comparison with the advancement to power of particular individuals.

In nothing has the truth of these remarks been more fully confirmed, than in the many editorial comments which have recently appeared throughout the country, in reference to the late negotiations concerning the British colonial trade. One set of papers cry it up, as if it was to eventuate in the aggrandizement of the whole community; whilst another set cry it down, as not worth possessing. Both are in error, because each has formed its opinion by looking at it through the medium of party prejudice, and a proper view of the case would probably show that the truth lies between. Now, whether the restoration of this branch of commerce be due to one administration or another, the character of the benefits, whatever they may be, which the nation is to enjoy, is precisely the same; and we have not been a little surprised to observe, in some commercial newspapers, how possible it is for editors to become so absorbed in personal politics, as to lose sight of the ordinary and well established principles of trade, and to endeavour to destroy the merit of an act, merely because accomplished by an administration to which they are opposed.

The question whether the restoration of our trade with the British colonies will be advantageous or not, is a simple one of political economy. It depends altogether upon the fact, whether by enjoying the direct trade we can or cannot export to those colonies more of the articles which they derive from the United States than we now export; and whether we can or cannot export other articles which are now excluded on account of the expenses and difficulties attendant upon a circuitous voyage. To determine the first point, we think, will not be difficult. The freight, insurance, commissions, and other charges incident to a shipment of flour from the United States direct to Jamaica, for example, will not be as great as if the shipment was made indirectly, through the island of St. Thomas or St. Bartholomew, or even the neighbouring island of Hayti or Cuba. This position cannot be disputed. Nor can it be disputed that this reduction of the expenses of shipment will enable the inhabitants of Jamaica to get their flour cheaper than if the indirect channel alone was accessible to them. Now, as it is a principle supported as well by the lights of experience as the lights of science, that the consumption of commodities increases when the price declines, and we challenge any one to produce a single exception to the principle, it follows as a necessary consequence, all other circumstances equal, that our exports to the British colonies must increase, by the opening of the direct trade.

In regard to the second point, there exists no more difficulty than in the former. A great portion of the commerce which has always existed between this country and the West Indies, is in the exportation of live stock and lumber. These commodities will not bear the expenses of trans-shipment. Live stock requires large supplies of hay and other provisions to be carried with them, and as they cannot be stowed away in bulk, but take up a great deal of room, the freight upon them, or rather their passage money, is very heavy. Besides this, the exporters of horses, mules, oxen, sheep, and hogs, oftentimes meet with difficulties against which they cannot protect themselves by insurance. Sometimes they fall in with calms, which last so long as to starve out their passengers, and so frequent have been these calamities, that they have been of sufficient notoriety to give the name of the horse latitudes to that region which is located between the variable and trade winds. As to lumber, any one who has ever had to pay the expense of hauling a load of boards or scantling for twenty miles, can easily perceive how prohibitory a double freight would be.

During the six years preceding the 30th September, 1826 (the ports were closed on 1st of December of that year) the exports from the United States to the British West Indies, were as follows, viz:

1821$264,632
1822449,601
18231,617,845
18241,750,703
18251,635,574
18262,078,871
$7,797,226

Of these exports, the following articles, viz., staves, and heading, shingles, boards, plank, hewn timber, lumber, masts and spars, naval stores, horned cattle, hogs, horses, mules, and sheep, constituted near a fourth, and in the year 1826, amounted to more than half a million of dollars in value, having gradually increased to that extent, from $66,135, the value exported in 1822.

To ascertain the precise value of such a trade, is not, it is true, a very easy matter. No doubt a great portion of the articles which, prior to 1827, were exported directly to the British West Indies, have since reached them indirectly, through other channels, but nothing can be clearer than that the quantity thus circuitously shipped must have been less than the quantity which would have gone, had a direct intercourse existed. No man who reflects a moment on the subject can fail seeing that this is so; and it is therefore folly for people to try to deceive themselves by delusive theories. Every direct trade by which the expenses of shipment are diminished, enables the consumers of our agricultural products to buy more than they would buy, if no such diminution had taken place, and no pretended set of facts can controvert this theory. The question, as it affects navigation, may be somewhat different, but the principle upon which we reason is equally applicable to that branch of industry. To convey directly the articles which are now conveyed indirectly, will require an equal extent of tonnage, and there will then be a gain of the tonnage required for the conveyance of the articles which are now excluded, and all the additional products which will be brought into demand by the fall in the price, owing to the diminished freight.

But it is said that British vessels will interfere with American vessels. If the former can be navigated cheaper than the latter, this will undoubtedly be the case. And suppose it were so. Are agriculture and commerce to be sacrificed to the tonnage interest? As the consistent and uncompromising opponents of all legalized monopolies—whether manufacturing, agricultural, commercial or navigating—we should hope not. But, upon this score, we have little to dread. We can underwork the British, and need not fear their competition. Our trade with their European dominions establishes fully this fact. British and American vessels are admitted upon the same terms into the ports of the United States, and Great Britain, and yet we hear no complaints from our merchants that the British ships have a preference. At all events, if they were to come in for a share, it is not likely that that share would be equal to the increased demand for tonnage arising from the increased exports.

Before leaving this subject, there is one circumstance to which we wish to call the reader’s attention. It is the gradual increase in the annual amount of our exports to the British West Indies, exhibited by the above statement. It shows that commerce is cautious in its movements, and, like a river, can only work its way into a new channel by degrees. Had the trade not been interrupted, it is possible that it might have been carried, during the present year, to the extent of three millions of dollars.