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Subject Area: Economics
Topic: Free Trade

ESSAY No. XCIV. - 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. XCIV.

march 30, 1831.

The city of Pittsburg. Causes of its growth and prosperity as a manufacturing town. Shewn not to be due to restrictive laws.

THE city of Pittsburg is one of the strong holds of the American System. It is quite probable that there is not, in the whole population, a single individual who ever opens his lips on the subject of free trade, unless it be to denounce it, whatever he may think in relation to it. To attempt, therefore, to convert such a community to the true faith, would be almost as vain as to attempt to convert the Turks to Christianity. It is impossible to change the opinions of those who are determined to listen to no arguments but those which favour their existing notions, and we suppose that it would be just as impracticable to find readers who would pay for this journal, in that city, as it would be to find readers to pay for Scott’s Commentaries in that part of Constantinople from which the Franks are excluded. The people of Pittsburg would no doubt be as much astonished to hear it asserted that the restrictive policy was injurious to their prosperity, as the people of Brazil are when foreigners tell them that the use of carts for heavy burdens, which are in general use there, having the axletree to turn round with the wheels, is not an advantageous custom. It is nevertheless true—and, if we cannot demonstrate it to the satisfaction of any intelligent man, we should like to see any such point out the defect of our reasoning, and we will cheerfully publish it.

Pittsburg is a city containing, with its suburbs, upwards of twenty thousand inhabitants. It is extensively engaged in manufactures, but chiefly in the manufacture of steamboats, steam engines, and various other branches in which iron constitutes the chief material. This iron is not produced in Pittsburg, nor even in its vicinity, but is transported from a distance of at least one hundred miles, and, until within a year past, during which a canal for part of the way has been in operation, this transportation has been performed by land, at an average expense of at least $20 per ton. From this it will be seen that the interest of Pittsburg is not at all identified with the interests of the owners of the iron-mines, who are the only class of people in this country benefited by the high duty on iron. So far from it, her interests are directly opposed to theirs. Her interest is to get iron cheap; their interest is to sell it dear. They stand in relation to each other as buyer and seller, and the Juniata iron masters are as much foreigners to the Pittsburg iron manufacturers, as are those of England. To identify their interests is impossible. They never have been the same—they are not now the same—and they never can be the same, unless it can be shown that the interests of the man whose trade flourishes most when he buys raw materials cheap, are the same with those of the man whose trade flourishes most when he sells those raw materials dear. We are almost ashamed to be so particular in elucidating a self-evident proposition, but, as we like to clear the road thoroughly as we proceed in an argument, we think it best to stop by the way and pick up even the smallest pebbles that lie in the path.

Upon the cheapness of raw materials, other circumstances being equal, must depend the greater or less extent of any manufacture. If iron was cheaper, at Pittsburg, than it now is, the greater would be the number of steamboats, of steam engines, of machines, of cut nails, of castings, of chains, of spades, shovels, hoes, axes, crowbars, ploughs, harrows, carts, wagons, carriages, horse shoes, scythes, hatchets, hammers, cutlery, and the various other articles of manufacture which are there carried on. Of this position there can be no denial. There is not, in the whole American “Birmingham,” a common labourer who would not see its truth, if presented to him; and the only question, therefore, for us now to consider, is, whether iron is as cheap at Pittsburg, under the present high duty, as it would be under a low duty of fifteen per centum. But first we will advert to the past history of this iron manufacture.

The manufacture of iron for the use of ships, river craft, and for all the various purposes of agriculture, has been carried on at all times since the settlement of Pittsburg, but has become much more extended since the introduction, on the Western waters, within the last twenty years, of steamboats and steam-engines. Owing to the great expense of transportation by land, from the Atlantic cities, in former years, foreign iron was a prohibited article. For several years after the last war, the freight of goods to Pittsburg from Baltimore, the nearest Atlantic port, was never below $5 per 100 lbs., and was sometimes as high as $8. This charge, upon iron, would have amounted to $112 to $179.20 per ton. But, as the iron mines on the head waters of the Juniata could furnish it at a much less price, on account of the diminished distance, supplies from that source were procured, upon the natural principles of free trade, as being the cheapest that could possibly be got. The position, too, of the Juniata mines, conferred upon their owners the monopoly of the Western supply, a monopoly of which no one had a right to complain, because it arose from the natural operation of things.

In process of time, as foreign iron became cheaper, (for it has been falling in price, in England, ever since the year 1814,) as the price of land-carriage declined, and as water communications were getting pushed up from Philadelphia towards Pittsburg, through the region of the Juniata mines, Pittsburg would have felt the influence of these blessings, had it suited the interests of the iron masters; but they, having long enjoyed the fruits of a natural monopoly, were determined, since that was lost to them forever, to secure to themselves an artificial monopoly, which would put an equal profit into their pockets. Accordingly they have so contrived it, that a high duty is now made to perform the function which mountains and bad roads used to perform before. The iron aristocracy have decreed, that the manufacturers of Pittsburg shall not have the benefit of cheap iron, and thus far they have been enabled to gull them into the belief, that the more they pay for iron the better. We think, however, that this delusion cannot last much longer. After the completion of the Pennsylvania canal, within a year or two, it will be possible to transport iron to Pittsburg, from Philadelphia, at about $10 per ton; and, consequently, it would be possible for the manufacturers there, if it were not for the duty, to procure foreign iron at $60 or $70 per ton, instead of $100. The land-carriage has of late years been as low as $3 to $2 per 100 pounds; but although much lower than before, it has still amounted to prohibition. Now, cannot any body see, who can command the half of an idea, that Pittsburg would be as much benefited, after the Pennsylvania canal is finished, by free trade in iron, as any part of the country? Nay, would she not be more so in proportion to her size? Nothing is clearer—and how she can longer remain under such delusion, it will be difficult to conceive.

But it may be asked, how has it happened that Pittsburg has thrived under the restrictive system? We answer:

First. That the restrictive system, as far as it relates to iron, which constitutes the great bulk of her manufactures, has never yet reached her. She has procured her supplies of iron from a quarter from which she would have drawn them whether the duty had been one dollar, ten dollars, or fifty dollars, a ton; and,

Secondly. That her natural advantages for carrying on the manufacture of iron are so great, that she would prosper in spite of any restrictive system.

These advantages are, a position at the confluence of two mighty rivers, which flow through a fertile country—a productive soil in her neighbourhood, owing to which provisions are brought to market at a very low price, and enable workmen to live better, upon low money wages, than they can, in some other places, upon high wages—and, lastly, inexhaustible beds of bituminous coal, which enable the manufacturers to supply themselves at the very low price of four cents a bushel, or $1.44 cents per chaldron of 36 bushels, delivered. The advantages of cheap fuel, in reference to all the manufactures of iron, are too apparent to need illustration, and we shall only, therefore, say, that, in this particular, the Pittsburg manufacturers have a decided advantage, not only over other towns of the United States, but even over the manufacturers of Great Britain. An excise or coastwise duty keeps up the price of it there, and we have now before us a London Price Current, of the 30th of November last, with the following quotations, per chaldron:

Coals, Newcastle, best,30s.6d.to 35s.
seconds,290to 30
Sunderland,343to 37
Scotch, Welsh, and York,270to 31

The lowest price here named is equal to $6, and the highest to $8.21, per chaldron.

That the difference, too, in the comfort of living, as regards fuel, between a manufacturer at Pittsburg and one at N. York may be apparent, we state that the price of a chaldron of Liverpool coal, in this city, has, for the last six weeks, been at $12, and is seldom below $9.

In reference to other manufactures which require cheap fuel, Pittsburg enjoys natural advantages which few other places possess, and the immense extent of country to which she can have access by water, must forever secure her a great and growing prosperity. In order that the advantages which she already enjoys, in regard to the manufacture of machinery, may be made apparent, we can assert, as a fact, that steam engines have been made, within two years, at Pittsburg, upon orders from the eastward, and transported by land all the way to Philadelphia, a distance of three hundred miles. And yet this is a place, the inhabitants of which cry out that they would not be benefited by cheap iron. Why, if they possessed common sense, and would exercise it, they would perceive, that, if the duty was taken off from iron, so as to reduce its price $30 a ton, that sum would, after the completion of the Pennsylvania canal, pay the whole freight of foreign iron from Philadelphia to Pittsburg, and of steam engines back again, which would enable them greatly to extend the advantages they now enjoy, and which are to be ascribed to cheap fuel, cheap living, and cheap rents. A family in Pittsburg can be supported upon half the sum that one can be in any of the Atlantic cities—and if Pittsburg would rely upon her natural advantages for her prosperity, instead of upon the nonsense called the American System, she would prosper far more rapidly than she has heretofore done. By low duties, her population would procure their foreign supplies of raw materials and other commodities at much less than their present prices, and at the same time the demand for her iron manufactures would be increased.