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Subject Area: Economics
Topic: Free Trade

ESSAY No. LXXII. - 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. LXXII.

december 8, 1830.

Remarks upon an article in the Encyclopœdia Americana, on the cotton manufacture of the United States. Reasons why we cannot manufacture as cheap as the British.

IN our paper of to-day will be found a history of the Cotton Manufacture, copied from the “Encyclopœdia Americana.” This article, although evidently drawn up by one who does not understand the principles of political economy, and who, in consequence thereof, asserts, as admitted, some positions not at all supported by the facts of the case, is, nevertheless, valuable as a statistical document. It shows—

1st. That the great improvements in machinery, which have reduced the expenses of manufacturing cotton, in Europe and in this country, have principally been introduced since the year 1815.

2nd. That the fall which took place in England, between 1814 and 1826, was about 55 per cent.

3rd. That the price of cotton fabrics in 1829, was less than one-third of the price in 1815.

4th. That Great Britain exported, in 1828, cotton yarns, and other manufactures, to the value of £17,045,638 sterling; and that the total annual value of the cotton manufactured by her has been estimated by some at £36,000,000 sterling, equal to $170,000,000, estimating exchange at 6½ per cent advance.

5th. That the price of raw cotton is now only about one-third of what it was in 1815.

6th. That one person can attend two or three machines, which will produce, each, from thirty to forty yards of cloth per day.

There is, however, one manifest error in the statement, which is, in estimating the consumption of cotton, in the United States, at 85,000,000 pounds, and supposing that quantity capable only of producing 140,000,000 yards of cloth. The common estimates have carried the consumption beyond 200,000 bales of 300 pounds—that is 60,000,000 lbs.—and any person who will take the trouble of weighing a yard of domestic muslin, will ascertain that it does not exceed one-fifth of a pound. Even sheetings would not come up to the requirements of this writer, and canvass would not much, if any, exceed them.—The quantity of 140,000,000 yards is probably underrated, but even supposing it to be 300,000,000, equal, upon an average, to 25 yards per head of the whole population, the quantity of raw cotton requisite to manufacture that number of yards would not equal the quantity stated.

As to the idea of America “pouring back upon Asia” her original manufacture, it is altogether groundless. In our paper of the 3d ultimo we showed, from official documents, that the total value of cotton fabrics exported to all countries east of the Cape of Good Hope, during the four years commencing with 1826 and ending with 1829, was but $93,159, not enough to make a cargo for a schooner. In estimating the annual export, to all parts of the world, at 10,000,000 yards, (which are worth about $1,000,000,) the writer is correct enough, but, as to the idea of a successful competition being carried on with Great Britain, in foreign countries, it is wholly fallacious.—This fallacy is even deducible from this article itself; for, if it be true, as asserted, that “neither capital nor labour, employed” in the cotton manufacture, in England, receive a fair remuneration, it is clear that they can undersell us, owing to the superior cheapness of capital and labour enjoyed by them. Besides, an export of one million of dollars does not look much like a successful competition with a nation which exports annually, cotton fabrics to eighty times the amount.

It is a pity that the statistical collectors would not confine themselves to their proper vocation, and avoid meddling with political economy, which they do not understand. By so doing, they would be useful in their employments, and would not be instrumental, as they are, in leading people into error, by their false assumptions and deductions. The writer of this article, in the Encyclopœdia, is particularly obnoxious to the imputation of not having stuck to his last—and, as he has undertaken to philosophize, and as his piece has been pretty extensively circulated, we shall devote a little further time to the examination of his doctrines.

He says: “It is thought that the possession of the raw material on the spot, and the use of the comparatively cheap moving power of water, instead of steam, with the proximity of the great markets of South America, are advantages in favour of the United States, more than sufficient to counterbalance some disadvantage in the higher cost of machinery, and, as is commonly supposed, in the higher wages of labour; but, the labour in the cotton mills, producing these goods, being wholly performed by females, has been ascertained not to be dearer than the same description of work, in England; and, as it is not easily applicable to any other branch of industry, it would seem not improbable that this country will be the future source of supply, in coarse cottons, for foreign markets.” Now, if there be any truth in the account current here drawn between the advantages enjoyed in this country, and those enjoyed in England, showing a balance in our favour, we should like to be told why it is, that the manufacturers of cotton goods do not come forward, honestly confess that they can underwork the British, and propose a reduction of the duty. Would not such a course go far to allay the excitement which exists against this branch of business, and which is founded in a belief that the nation pays a tax of ten millions of dollars for the benefit of the master-manufacturers, equal to two hundred dollars a head upon the whole number of men, women, and children, employed in manufacturing 200,000 bales?

But, no. We see not the slightest indication of a conciliatory spirit on this point. The receivers of ten millions of dollars annually, from the consumers of cotton goods, without an equivalent, are not so generous as some folks are, with other people’s money. They will never voluntarily consent to give up one dime of it, even for the sake of restoring harmony to the country; and, when the duty is reduced, as assuredly it will be, before the lapse of many years, it will be altogether owing to the perseverance of their adversaries, who are now struggling to regain their lost property. But let us briefly weigh the items of this account current.

The American manufacturer has the advantage of the raw material. And what is the value of this advantage? The difference in freight from Charleston, Savannah, or New Orleans, to Liverpool, and from the same places to Baltimore, Philadelphia, New York, Providence, or Boston, does not exceed one cent per pound, and is very often not more than half a cent; and any one who will examine the prices current of all the places named, will see, that two cents per pound will cover the average difference of prices quoted in our Northern cities and at Liverpool. Now, as one pound of cotton will make five yards of the common coarse shirtings, and perhaps more of the finer class of fabrics, it is clear that the advantage of possessing the raw material is not equal to one half of a cent per yard.

The American manufacturer has also the advantage of cheap water power, whilst the British uses steam power. Of the importance of this advantage, we have no practical information, to enable us to judge; but, taking the estimate of our writer as the basis of a calculation, and supposing that one person can tend machines that will produce, say eighty to one hundred yards of cloth in a day, the difference on each yard, resulting from the employment of water power instead of steam power, can be but a small fraction. But we doubt altogether the assumption of the superior cheapness of the water power of this country, over the steam power of England. Water power is not procurable for nothing. It is attended with the expenses of constructing and repairing dams, races, and flood-gates, and with obstructions arising from ice and freshets. Steam engines in England, can be made with comparatively little expense, owing to the cheapness of iron, which is one-third the price it is here, and fuel is less than the price we are accustomed to pay for it in our Atlantic manufacturing cities, as is shown by the importations of coal from England, under a duty of six cents per bushel, in addition to the charges of freight, insurance, &c. Upon this point, however, we shall seek for some practical information, and would be glad if any of our correspondents, who are acquainted with the subject, would give us a comparative view of the economical advantages of water power and steam power.

The American manufacturer has also the advantage of the proximity of the South American market. This is undoubtedly true, but it produces no sort of effect whatever, upon his power to make the fabric cheaper. It might, with as much propriety, be urged, that the proximity of Canada was a great benefit to the sugar planters of Louisiana, in enabling them to raise sugar cheaper; but any one can see, that, unless a domestic article can compete with a foreign one, on the spot where it is produced, it is impossible that it can do it in any foreign market, however near. The proximity of South America to the United States is undoubtedly a great advantage to the latter, not in enabling us to manufacture cheaper, but in offering a steady market for those commodities in which we have an advantage over other nations, and temporary markets for those foreign commodities of which we may happen to be apprised of a scarcity, before a knowledge of it can reach our rivals in Europe. To enjoy, however, this advantage, so as to make it really worth possessing, a system of low duties on foreign goods is necessary. If duties were reduced to an average of about fifteen per centum, which would give us as much revenue as such a government as ours would need for its support, the stores of our commercial cities would be filled with the productions and manufactures of Europe, waiting ready for the freshest advices from Mexico, Central America, Colombia, and the West Indies. As it now stands, we are denied, by the American System, this benefit, conferred upon us by our natural position. Our high duties prevent the importation of large surplus stocks; for, although the duty may be drawn back upon exportation, yet it often happens that no opportunity for a profitable shipment may be afforded, until the bonds are payable, or the terms limiting the benefit of drawback expire, and this operates as a discouragement to importations.

The American manufacturer has also the advantage of female labour. And why cannot the manufacturer of England have the same advantage? If the labour of men is cheaper there than here, we know not why that of females and children is not so too. The fact is, that all these assumptions of the writer in question, are adopted, not as a well-authenticated basis of any reasoning, to show that we do really manufacture cotton goods cheaper than they do in England, but as matters which ought to be true, in case it were true, as taken for granted, that we do so manufacture. In other words, this writer, as all the others have done who have preceded him on the same side, takes for granted the very matter in dispute, and then spins out a theory adapted to sustain a baseless fabric. This conduct has been so uniform, that we have often been reminded by it of the puzzling question once propounded to a number of wise-acres, “what is the reason why a living fish, placed in a bucket of water, will not increase the weight of the bucket?” Amongst the reasons assigned, one supposed that it was owing to the effort made by the fish to swim, which kept its weight suspended. After several equally philosophical replies, one of the company, more philosophical than the rest, said, that, before he answered the question, he would like to know what the fact was, and, having procured a pair of scales, a bucket of water, and a living fish, he found that, after the fish was put into the bucket, the weight was increased precisely equal to the weight of the fish. Now, we think it would be a good plan for the political arithmeticians to imitate the example of this sensible man, and not to trouble themselves with hunting up reasons to sustain a position, unless they know, beforehand, that the position is true. They will, by pursuing such a course, save themselves much trouble, and the public from much mischief.