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Subject Area: Economics
Topic: Free Trade

ESSAY No. LXIX. - 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. LXIX.

november 24, 1830.

Fallacy of supposing that the mere exportation of cotton fabrics, is proof that we can undersell the British in foreign markets, proved by the fact that we export foreign goods burthened with all the expenses of importation into the United States.

THE tariff party assert, that the fact of our exporting cotton fabrics, is conclusive proof that we can undersell the British in foreign markets. In refutation of this doctrine, we have shown, that the same argument might be applied with equal force to our exportation of foreign goods imported into this country saddled with freight, insurance, commissions, and profits; and yet no one would believe that we could meet the producers of those articles in foreign markets upon equal terms. Who would say, that because we export British manufactures to the West Indies and South America, we can undersell the British themselves in the same articles, who have but one set of expenses to encounter? No one, certainly, who would examine the subject.

But we have a stronger argument still than this. We can shew, that the amount of foreign goods exported from this country, upon which not only the expenses of freight, insurance, and commissions have been incurred, but even the charge of our own import duty besides, has been annually greater than the value of all the domestic cotton goods exported.

By Waterson & Vanzandt’s Statistical Tables, it appears that the value of the foreign goods imported into this country, which paid duties, and were exported during the seven years ending with 1827, without any drawback, was as follows:

In 1821,$0,981,723
1822,1,104,710
1823,1,287,571
1824,1,348,147
1825,1,309,590
1826,1,168,496
1827,881,271
$8,081,508

It thus appears, that during those seven years, there was an average exportation to the amount of $1,154,501, of foreign goods, burthened with all the charges of import and our duties besides. Now, would any man argue, that the mere fact of this exportation was proof that we could undersell in foreign markets the very producers themselves of these commodities? If not, there is an end of the other position as an argument. That cottons may sometimes be sold in South America to a profit, is not denied; but that is not owing to our meeting the British in competition, but to our not meeting them. It is because we happen to pop upon a scanty market, where goods have risen in consequence of a scarcity; and as our geographical position gives us an advantage in this respect over the Europeans, we turn it to account, precisely as we do with the foreign goods which we export. But although we sometimes hit it, we oftener miss it, except with those articles in which we have an advantage over other nations, which we certainly have not with cotton goods, or with any article that has paid a duty at our custom-house that is not refunded. Our geographical position, in reference to the West Indies and South America, is of incalculable value to the United States. It gives us exactly the same sort of advantage that a tradesman possesses, whose customers are near him, over one whose customers are at a distance. Half the world live so much from hand to mouth, that when they want a thing, they cannot wait a long time for it, and would rather pay more than send a great distance for it. Instead of making the most of this position, our law makers are absolutely counteracting the beneficient designs of nature, by the adoption of laws which put it out of our power to have on hand in this country large stocks of foreign goods, waiting ready for the first chance of an opening in the neighbouring markets.