Econlib

The Library

Other Sites

 Front Page arrow Titles (by Subject) arrow ESSAY No. LXXVII. - The Principles of Free Trade

Return to Title Page for The Principles of Free Trade

Search this Title:

Also in the Library:

Subject Area: Economics
Topic: Free Trade

ESSAY No. LXXVII. - 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).

About Liberty Fund:

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. LXXVII.

january 12, 1831.

Enumeration of articles that have fallen in price. True causes of that fall.

THE New England Farmer, an agricultural paper, it seems, has taken up the cause of the manufacturing corporations of Boston, and has come out with a list of benefits resulting from the high duty system. The following is an extract.

From the National Journal of 1st January.

“A few such facts as we find thrown together in the New England Farmer—a work of increasing merit and reputation—speak an intelligible language as to the “effects of the tariff,” and we readily quote them.

‘Flannels have been reduced in price from 23 cents to 17 cents per yard.

‘Cotton manufactures have fallen fifty per cent. A man can buy a shirt for half what it used to cost.

‘Chemical preparations have fallen fifty per cent.

‘Window glass, in 1816 worth $15 per 100 square feet, now sells for $7.50. As many tumblers can be bought now for 50 cents as used to cost us $1.

‘Lead and all its manufactures are reduced in cost.

‘The duty on pig lead is 3 cents per lb. and its price 3 cents per lb.

‘Gunpowder has fallen from 45 cents to 22, and even 10 or 12 cents per lb.

‘Spirits of Turpentine 50 cents in 1823, now 30 cents per gallon.

‘Cyphering slates are 33 and one-third per cent. cheaper, in consequence of a duty of 33 and one-third per cent.

‘Castor oil in 1824 was $3 per gallon; in consequence of a duty of 40 per cent. it fell to $1.50 per gallon.

‘Before we made fire brick we paid England $70 per 1000. Now they are made as good by ourselves for $30 per 1000, in consequence of a protecting tariff.

‘This list might be extended to fifty other articles.

‘Notwithstanding the tariff, the tonnage, foreign and coasting, of the United States, has been steadily and rapidly increasing for the last fifteen years.

‘The revenue from imposts has steadily increased—not so much from the increase of duties, as from the obvious reason, that the more we have to sell, the more we can buy.’

“Let the people examine into these facts, and since the presidential contest is placed by the friends of the administration on that footing, let them decide which they will have—General Jackson, or the tariff system.”

This list will probably have a wide circulation through the tariff papers, and will no doubt carry conviction to the minds of all who have not sense enough to discriminate between a cause which is capable of producing, and one which is not capable of producing, a given effect, or, who have not honesty enough to listen to arguments that militate against their pockets. It may even stagger some who have sense and honesty both, but that can only be for a short season, for, as soon as the fallacy in which these assertions are enveloped is stripped off, they will abandon the delusion.

The foregoing list is nothing but a short abridgment of Mr. Niles’ “Politics for Farmers,” published last autumn, and is one of the many evidences afforded of the facility with which error can be circulated, when the press is under the control of those whose interests or political aggrandisement are to be promoted by it. Now, the fallacy in this article consists in two particulars:

First. In ascribing to our tariff the fall in prices referred to; and,

Secondly. In concealing the fact, that, if the tariff were out of the way, all these articles, except lead and spirits of turpentine, would be still cheaper than they now are.

The fact is, that owing to general causes, which have been in operation for centuries, throughout the industrious world, and more especially since the last general pacification of Europe, the powers of human labour have been greatly multiplied in all the departments of industry, whether connected with agriculture, commerce, or manufactures. In every branch, almost, labour-saving machines have been introduced, and in every trade and occupation that can be named, have improved skill, ingenuity, and dexterity, added to the productive powers of the hand. Improvements in agricultural implements, new discoveries in modes of tillage, and of preparing composts and manures, have greatly increased the productive powers of land and labour. Improvements in ship-building, and in the rigging and sails of vessels, and in the science of navigation, have added vastly to the productive power of the labour of merchants and seamen. Improvements in machinery and mechanics’ instruments, have, in the same manner, abridged the process and labour by which manufactures are produced. All the elements have been placed in requisition, and earth, and water, and air, and fire itself, have all been forced, by the mighty powers of the mind of man, to render far greater services to the human family, than they were formerly supposed capable of doing. Is it then any wonder, that articles, destined to supply the wants of society, should fall in price, seeing that they can be produced with so much less human labour than before? Unquestionably not—and hence we find that there is not a single article, of any description, which is not now cheaper than it was in 1816, unless it be some few productions of agriculture, of which, from natural causes, the supply cannot be increased.

To leave no doubt upon this subject, it is our intention, in a short time, to bring into the view of the readers of this journal a list of articles with which our protective system has had nothing to do, showing their prices, at New York, in the year 1816, and at this day, and we will then leave it to any candid man to judge whether there is any foundation for ascribing the fall of the protected to the tariff. If articles not protected have fallen as much as those which have been protected, all will allow that it at least renders questionable the assumption of the advocates of high duties, that our tariff has exclusively occasioned the fall. At present, we shall content ourselves with showing, that, whilst we admit that such a fall in prices has taken place as is contended for, yet, that, were it not for our high duties, all the articles enumerated would be cheaper still. This is the true question to be submitted to the people, and this is the question that every editor, who believes in the truth of the free trade doctrines, is bound to present to his readers. But, let us examine these statements separately.

“Flannels have been reduced in price from 23 cents to 17 cents per yard.”

The Farmer has not here faithfully copied his original. Mr. Niles did not quote flannels as an article that had fallen, but one that had not risen in consequence of the tax imposed upon them in 1824 and 1828. Both, however, have greatly erred. The real fact is, that flannels, owing to the existing duty of 22½ cts. per square yard, do now sell for forty cents per square yard—which, were it not for the duty, would be sold at 17½ cents.

“Cotton manufactures have fallen 50 per centum: a man can buy a shirt for half what it used to cost.”

This is perfectly true, but it is also true, that, were it not for the prohibitory duty, a man could buy three shirts for the same sum he now has to pay for two. Else, why adhere to a prohibitory duty of 50 to 175 per cent. upon coarse cottons?

“Chemical preparations have fallen 50 per cent.”

True again, but, were it not for the existing duty, a still greater fall would take place, as is manifest from the high duties kept on, to exclude the foreign article.

“Window glass, in 1816, worth $15 per 100 square feet, now sells at $7.50. As many tumblers can be bought now for 50 cents, as used to cost us $1.”

All true enough—but, notwithstanding this, English glass continues to be imported, although subject to a duty of $3 to $5 per one hundred feet, and could be sold below $7.50 were it not for the duty. And, were it not for the duty, as many tumblers could be had for 33 cents, as are now bought with 50 cents.

“Lead and all its manufactures are reduced in cost. The duty on pig lead is three cents per lb., and its price is three cents per lb.”

The duty on pig lead is prohibitory. Its present low price arises from the great fertility of the American lead mines, which have, within a few years, come into our possession, by Indian treaties. As to the manufactures of lead, were it not for the duty, low as they are, they would be sold as follows:

White lead, dry, 5 cts. per lb. cheaper than now;

“NA ground in oil, 5 cts. per lb. cheaper than now;

Sheet lead, 3 cts. per lb. cheaper than now; for all these articles are still imported, subject to those rates of duty.

And, that the reader may see the operation of this system upon the painting of houses and barns, to protect them from the weather, we will quote the actual prices in New York, at which, this day, the above articles can be purchased for exportation:

White lead, English dry, $4 per cwt.;

“NA English ground in oil, $5 per cwt.;

Sheet lead, 2½ cents per lb.

Let any man compare these prices, which are those at which a foreigner can get supplied in our market, with those that a resident citizen has to pay, and the fallacy of his being benefited by high duties will very soon be apparent.

“Gunpowder has fallen from 45 cents to 22, and even 10 or 12 cents per pound.”

English gunpowder can now be bought in the New York market for exportation at from 17 cents per pound, down to six cents per pound. The lowest quotation for American, is 13 cents per pound. Let the friends of Internal Improvements, by states and corporations, who want to blow rocks, look at this. Let the sharp-shooters of the West, and the farmers who are digging wells, look also at this. If it were not for the high duties, they would be able to buy a pound and a half of powder for the price they now have to pay for one.

“Spirits of turpentine, 50 cents in 1823, now 30 cents per gallon.”

Now here we admit there has been a considerable fall, and we are not aware that the removal of the duty upon this article, would make it come any lower. But why do these bunglers furnish their opponents with a stick to break their own heads? The duty on spirits of turpentine, since the institution of the government, was never more than fifteen per cent., and the success of its manufacture is to be ascribed to the protection which the raw material has received from the hardy sons of the forests of North Carolina, who need no taxes upon their fellow-citizens to enable them to prosper. We wonder these humourists did not bring in tar, pitch, and rosin, for they have also fallen greatly too, under a similar duty of 15 per cent.

“Cyphering slates are 33 and one-third per cent. cheaper in consequence of a duty of 33 and one-third per cent.

Now, if it be true, that cyphering slates are 33 and one-third per cent. cheaper than they used to be, we affirm, without fear of contradiction, that if it were not for the duty, they would be 33 and one-third per cent. cheaper still, because they continue to be imported under that duty, and sold to the retail merchants and stationers. Nothing can be clearer than this, that, so long as an article continues to be regularly imported under the high duties, so long is it incontrovertibly proved, that, were it not for the duty, the price would be just so much less.

“Castor oil, in 1824, was $3 per gallon; in consequence of a duty of 40 per cent., it fell to $1.50 per gallon.”

The duty imposed in 1824 was not, as here stated, 40 per cent., but 40 cents per gallon, which was not equal to 15 per ct.; but, if it were not for the duty, it would be still forty cents cheaper. As proof of this, we refer to the last Treasury Statement of Imports that has been published, where it appears that six hundred and eleven gallons of castor oil were imported, in the year 1829, from the Dutch West Indies, the cost of which was $231; that is, something less than 38 cents per gallon. Its present price, in New York, is 100 cents.

“Before we made fire-bricks, we paid England $70 per 1000. Now they are made as good, by ourselves, for $30 per 1000, in consequence of a protecting tariff.”

The bungle committed here is precisely the same as that in relation to the spirits of turpentine, and it was pointed out in a communication from our shrewd correspondent “An Operative Manufacturer,” in our paper of the 22d ult., who showed that, not only was the duty on bricks but 15 per cent., but that English ones had been imported and sold in Philadelphia, last year, at $21 per 1000.

“This list might be extended to fifty articles.”

Aye—and every one of them could be disposed of in the same way.

“Notwithstanding the tariff, the tonnage, foreign and coasting, of the United States, has been steadily and rapidly increasing for the last fifteen years.”

The Secretary of the Treasury, in his late report, asserts that our tonnage has fallen off in the aggregate, and his authority upon that point we hold to be much better than that of the New England Farmer. If the coasting tonnage has increased, it is owing wholly to the principles of free trade between the different states being thus far suffered to remain without violation—and, great as this trade now is, it would have been far greater had the same principles been allowed to operate in our intercourse with foreign nations.

“The revenue from imposts has steadily increased—not so much from the increase of the duties, as from the obvious reason, that, the more we have to sell, the more we can buy.”

Now, although the latter branch of this sentence is perfectly true, yet the reasoning in relation to it is droll enough: The revenue has increased, because “The more we have to sell, the more we can buy.” But did we sell more, and did we buy more? Facts, stubborn facts, stare this Farmer in the face, and disprove his loose allegations. In an article in our last paper, we showed that the falling off in our imports, upon an average of the five years which have elapsed since 1825, has been upwards of sixteen millions of dollars per annum—a fact to which our attention had been drawn by the Treasury Report. It is, therefore, not a fact that the increase of revenue has arisen from increased importations, which is the position intended to be laid down; and in reality it is not even a fact that the revenue from imposts has increased at all, for since the year 1825 the annual average has been less than the amount of that year, and during the last three years it has been nearly stationary. The reason, however, why it has not fallen off is, because the duties have been increased—for otherwise there would have been a falling off in the revenue, exactly proportionate to the falling off in the imports, had the imports fallen off, which is not probable.

If this is the sort of political arithmetic by which candidates are to be advanced to high political stations, we hope that every honest citizen who has any regard for the reputation and interests of the country, will well reflect upon it. When we meet with a man who really does not understand the subject, we can pity the vanity which leads him to expose his ignorance. But when we see assertions ushered forth as facts, which must be known to many who circulate them as wholly destitute of foundation, we are not able to reconcile such conduct with the faithful discharge of editorial duties.