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Subject Area: Economics
Topic: Free Trade

ESSAY No. XCIII. - 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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ESSAY No. XCIII.

march 23, 1831.

The Coasting trade. Causes of its great increase. Shewn not to arise from the restrictive system.

MUCH reliance is placed, by the political arithmeticians, upon the fact, that the coasting trade of the United States has greatly increased since the year 1816, and they bring this forward as proof of the wisdom of the restrictive policy. This, however, is only another instance of that confusion of intellect that occasions effects to be ascribed to wrong and inadequate causes, which is observable in the whole course of their reasoning when they undertake to travel out of their vocation, and meddle with political economy.

The increase of the coasting trade is due to the following causes:

First. To the increase of population, and of course to the increase of demand in each state for the particular products of the others, in the cultivation or manufacture of which they possess some peculiar natural or artificial advantage.

Secondly. To the absolute increase of productions, arising from the improvements which have taken place in every branch of industry, of late years, and which enable the same number of labourers to produce a greater quantity of commodities than before; which increase would have taken place, and have called for an increase of the coasting tonnage, even though the population had not been increased.

Thirdly. To the extensive settlement of the Western country, which has multiplied the rude products of agriculture, having their outlet through the Mississippi, and their market in the Atlantic states.

Fourthly. To the improvements in steam navigation, which now render it possible for the Western country, as high up the Ohio river as Pittsburg, to get from New York, Philadelphia, and Baltimore, via New Orleans, many foreign commodities, which were formerly transported by land.

Fifthly. To the gradual tendency of New York to draw to herself a disproportionate share of the foreign commerce of the country, owing to her great commercial advantages—which tendency diminishes the direct trade between various ports of the United States and foreign countries, and leads them to carry on their foreign exports and imports, by coasting tonnage, through New York.

These causes are amply sufficient to account for the chief part of the increase of the coasting trade which has taken place since 1816; but,

Sixthly. A further increase, to a limited extent, is to be ascribed to the transportation of commodities to and from the states where the manufactures of cotton, wool, iron, and sugar, have been forced. The precise extent of this increase cannot be ascertained, but a little reflection will show that it cannot amount to much. By way of illustration, let us take, for example, the boasted article of cotton. The consumption of this article, by the manufacturers in the United States, is estimated at 200,000 bales. A ship of five hundred tons burthen will carry 1500 bales. From Charleston or Savannah, to the Northern ports, eight voyages can be made in a year, and from New Orleans four, making an average of six voyages—and, consequently, twenty-three ships, of the size we have mentioned, are sufficient to transport the whole 200,000 bales from the states where they are produced, to the states where they are manufactured. The same vessels can also, on their return voyages, transport all the fabrics which can be made out of that quantity of cotton; and it will thus appear, that twenty-three ships, or an equal tonnage in vessels of other sizes, are sufficient to do all the coastwise carrying which is required by the cotton manufacture. Now, although the establishment of the cotton manufacture in this country may afford employment through the year for twenty-three ships, yet, it will hardly be pretended that this benefits the general navigating interest of the country as a whole; for, were it not for that manufacture, this same identical cotton would be transported to Europe, and would give employment to more vessels, inasmuch as the voyage could not be performed in the same time.

As to the transportation of wool coastwise, we presume it does not give employment for a single ship. And, as to iron, the quantity exported coastwise, from the middle states, where it is produced, over and above what used to be so exported prior to the high duties, would certainly not occupy more space than would be left by the manufactured cottons shipped in return for the raw cotton.

But the article of sugar, produced in Louisiana, calls for increased tonnage. This is true—but let us see how much it will be. A ship from New Orleans, of five hundred tons, will carry 1000 hogsheads at a voyage, and make four voyages in a year. The quantity transported coastwise we will suppose to be 80,000 hogsheads, the whole quantity produced. It will therefore require twenty ships of that size to do all the carrying that the sugar interest calls for. But is this a benefit to the navigating interest? Would not the importation of an equal quantity of sugar, from the West Indies and Brazil, call for a greater amount of tonnage than is now employed in the Louisiana trade? Nobody can doubt it; and thus it will appear, that the great increase given to the coasting trade, by affording employment for twenty ships, in carrying sugar, is at most a mere substitution of enrolled and licensed tonnage for registered tonnage.

We have, however, one more fallacy to overturn. It is said that the manufacturers of New England consume a great quantity of bread-stuffs raised in the middle states. Now, let us suppose that this quantity is equal to 100,000 barrels, which would afford a barrel a-piece to all the persons concerned in the manufacture of cotton and wool in the whole United States, and then let us see how many ships would be required to transport this quantity. A ship of five hundred tons will carry 5000 barrels, and will make eight voyages in a year, so that, to transport this mighty quantity, which is a great deal more than really goes, in consequence of the restrictive policy, would require two ships and a half.

These, then, are all the benefits which the coasting trade has derived from the forced manufacturing policy. More than nine-tenths of its increase are owing to the unrestricted intercourse which is maintained between the different states—in other words, to the principles of free trade existing between them; and this great prosperity is nothing but an epitome of the still greater prosperity which it would enjoy, if its twin-sister, foreign trade, were rescued from her shackels. If foreign commerce were entirely unrestricted, we have no doubt that the coasting trade would be vastly more extensive; for, as the prosperity of the whole people would be increased, their power to extend exchanges of the productions of the different states would be also increased.