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Subject Area: Economics
Topic: Free Trade

ESSAY No. LXXI. - 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. LXXI.

december 1, 1830.

The cotton manufacture of Rhode Island. Tax paid by the consumers of cotton fabrics for the support of. Probable number of operatives employed in the cotton manufacture of the United States.

The following article is copied from the Providence Daily Advertiser:

“Importation of Cotton into Providence.—We have been favoured with facts upon which are predicated the following accurate statements, worthy the attention of our friends at the South. The amount of Cotton imported into Providence, the year ending the 30th Sep. 1830, was 42,612 bales.

“Stock on hand the same day, [being unusually small for the season] as follows:

New Orleans,929 bales
Alabama,145
Uplands,464
Sea Island,117
Total,1,655

“The consumption of cotton from this market, has been fully 42,000 bales, within the past year, worth, upon an average, $40 per bale, amounting to a total of about $1,700,000.

“This cotton has been manufactured into about 70,500,000 yards of cloth, which was sold at about nine cents per yard, averaging the different qualities and prices, thus producing a gross sale of $6,450,000.

“Of this sum a very great proportion has been returned to the South, in payment for cotton and provisions, leaving to the manufacturer a reasonable profit, if an opinion may be formed from the cheerful activity which now prevails in this neighbourhood.”

It appears, from the foregoing statement, that the price which the manufacturers of Providence pay for cotton is very little less than the price it sells for at Liverpool. Bales of cotton usually weigh, upon an average, about 300 pounds, and at $40 per bale, the price is about 13 cents per pound. The price at Liverpool was not long since quoted, in the papers, as follows: “Upland, 6¾ to 7¾d.—Orleans, 7 to 7¾d.—Alabama, 6¾ to 7d.” Taking the average at 7¼d., and allowing 6 per cent. for the exchange, we have fourteen cents and a small fraction. One fact is therefore conclusively established, by this statement, and it is a very important one, viz., that our possessing the raw material gives an advantage to the American manufacturer, not exceeding one cent per pound—which is equal to less than one-fifth of a cent on every yard manufactured, seeing that, according to the Providence statement, one bale of cotton will make 1678 yards of cloth, which, estimating 300 pounds to the bale, is a little more than 5½ yards to every pound.

But the most important fact established by this statement, is, that when these 42,000 bales of cotton leave the hands of the Rhode Island manufacturers, they are charged with the expenses and profits of manufacturing, amounting to 4,750,000 dollars; and, if any merit is taken to the manufacturers, for sending a portion of their cloth to the South, it ought to be shown that the South gets as many yards of cloth, for a bale of cotton, as she could get for it in other places; or otherwise she might consider it no great favour to be compelled to deal with the domestic manufacturer, and submit to his terms. Let us therefore see how the case would stand.

A bale of cotton is worth $40, and, at Providence, can be exchanged for 444 yards of cloth, being at the rate of nine cents per yard. But the same bale of cotton can be exchanged, at Liverpool, for a greater number of yards, and for the simple reason, that cotton cloth is cheaper at Liverpool than at Providence. That it is cheaper at the former, than at the latter place, is proved conclusively, by the pertinacity with which the manufacturers adhere to the prohibitory duty, the design of which is to stop the importation of the low priced cloths, which prevents the people from knowing how much cheaper they can be made abroad than at home. It is also demonstrable from another well known fact, that manufacturing labour, even when aided by machinery, is cheaper in England than in this country: for, as iron, of which machinery is made, is there about one-third the price it is here, and as the labour of mechanics, to build machinery, is cheaper there than here, it follows that spinning and weaving, by machinery, can both be performed cheaper there than here, to say nothing of the superior abundance of capital, which reduces the interest of money and the rates of profits.

But perhaps it may still be urged that this is not conclusive—the absolute fact of the superior cheapness must be demonstrated by producing the article itself, with a well-authenticated invoice. It is not easy to find prohibited goods in a market, but we have no doubt that the same quality of goods, which are stated above to have cost upon an average, nine cents per yard, could be imported and sold, after paying a moderate revenue duty, at seven or eight cents. Taking the latter price, however, and estimating the saving at only one cent per yard, let us see how much it will amount to. Only 705,000 dollars of a tax laid upon the consumers of cotton cloth in the United States, for the benefit of a few capitalists in Rhode-Island, which is at the rate of $70.50 per head of the whole cotton manufacturing population of that State, estimating them at ten thousand. Why, it would be better to give them all a bounty, men, women, and children, of forty dollars a piece, the sum allowed to the Pennsylvania revolutionary soldiers, than to submit to so enormous a tax. It is truly laughable to see what a racket can be made by some editors, about paltry sums of $1940, and such like, while the people are getting their pockets picked of millions, without being told of it.—Truly we are a nation that strain at gnats and swallow camels. Why, if the whole 200,000 bales of cotton, supposed to be consumed in the United States, were worked up into cloth, as the 42,000 bales were in Rhode-Island, and sold at a single cent per yard more than it could be imported for, the total tax would be $3,333,333. But we are quite sure that neither one cent, nor two cents per yard, would cover the increased price which is paid by the consumers of cotton, for the support of the cotton manufacturers. In other words, ten millions of dollars do not cover the tax paid upon this single item of protected commodities: and can we wonder, therefore, that those who pocket the bonus, which is equal to $200 per annum, per head, of fifty thousand operatives—which is more than the number employed in spinning and weaving 200,000 bales of cotton—should cry out most lustily against those who are trying to deprive them of it?

That we do not make these calculations at random, we can convince our readers, from the following exposition. A very frank and intelligent gentleman, engaged in the manufacture of cotton, gave us, some time last year, the following information: By the most improved spinning machinery then in use, one person could spin, in a day, ten pounds of cotton, into yarn of the size called No. 15, which is that used in the fabrication of what are called domestics. These ten pounds of yarn will make fifty yards of such cloth, of the width of thirty inches, each pound being sufficient to make five yards. By the most improved power-loom machinery, also at that time in use, one person can weave fifty yards of such domestics in a day; so that the united labour of two persons can produce, in a day, from the raw material, fifty yards of cloth—or, in other words, the labour of one person can produce twenty-five yards in a day, or seven thousand five hundred yards in a year, estimating three hundred working days in that term. Upon these estimates, it will therefore appear, that forty thousand persons could manufacture the whole 200,000 bales, if made into domestics; but, as other qualities are also made, which require more labour, we have taken 50,000 as the number to whom it would be better to grant a bounty, rather than continue the tax. Should, however, this number be deemed too small, we have no objections to doubling it; and it would even then appear, that the nation pays a tax, for the support of the cotton manufacturers, of 100 dollars per head, of all who are concerned in it.