Front Page Titles (by Subject) ESSAY No. CVI. - The Principles of Free Trade
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ESSAY No. CVI. - Condy Raguet, The Principles of Free Trade 
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. CVI.
june 1, 1831.
Letter from Mr. Clay to some manufacturers in Pittsburg, in answer to one, accompanied by a present of some articles of domestic manufacture. Doctrines of, examined. Amount of revenue collected for 1815 to 1829. Imports and exports of certain years. Tonnage from 1815 to 1829.
We have met with the following article in the “National Gazette:”
“The American System.—Some enterprising manufacturers of Pittsburgh, (Penn.) lately addressed a note to Mr. Clay, accompanied by several articles and implements from their own workshops, as a just tribute of respect for his exertions in the great cause of American Manufactures and Home Industry. These gentlemen state, in their letter, that ‘every particle in the composition of these utensils, from the ore to the finished instrument, is the produce of American soil, skill, and labour. The iron was made under our personal inspection, and the steel in our convertory, under the direction and according to the improved process of an American gentleman, E. L. Losey. We therefore take a pride and pleasure in warranting these articles to you as good.”
“The Editor of the ‘Pittsburg Gazette’ with some difficulty obtained from the gentlemen who sent these articles a copy of their letter, and of Mr. Clay’s friendly reply, for publication. This last we subjoin:
“Ashland, 3d May, 1831.
I postponed answering your obliging letter of the 22d of March last, borne by Mr. Stephens, until the fate of the articles, also committed to his care, for my use, was certainly ascertained. After various narrow escapes, from accidents unfortunately occurring, I believe, to several steamboats, I have the pleasure to inform you that I yesterday safely received them, consisting of a spade, shovel, axe, hoe, and carving knife and fork. They are all excellent of their kinds, and do great credit to the artizans by whom they were made. I beg your acceptance of my grateful thanks for them, for the friendly spirit which prompted you to tender them, and for the flattering terms in which they are conveyed. Their value is much enhanced in my view, as you justly anticipated, by the fact that every particle of the utensils, from the ore to the last finish, is the produce of American soil, skill, and labour. The successful manufacture of steel at Pittsburg was a desideratum, and I am happy to perceive, from the specimen in these articles, that the quality of it, as far as I can judge, realizes every wish.
“You are right in supposing that I derive very great satisfaction from witnessing the prosperity of Pittsburg, and the complete success of our American System. Never had the friends of any great measure of National policy more cause to rejoice—never were the predictions of the foes of any such measure more refuted, than in the instance of the triumph of that system. It was objected to it, that it would dry up the sources of the public revenue. The revenue has been increased. It was said that our foreign commerce would be destroyed. Our foreign commerce has been greatly nourished and extended by its operation, changing only some of its subjects. It was urged that it would impair our marine. Our navigation, and especially the most valuable part of it, has been rapidly extended. It was reproached with comprehending enormous burdens to consumers, by obliging them to purchase worse, and at dearer prices, articles of American origin, than similar articles of foreign manufacture. Almost every protected article has been greatly reduced in price, and, in some instances, so much that the cost of the article scarcely equals the duty of protection. It is in vain that the opponents of the system seek, by subtle and ingenious solutions, to account for this gratifying fact—the fact itself falsifies their predictions—and it is worth a thousand hairsplitting theories. Finally, it was urged that the system would be a fruitful source of vice, and immorality, and depravity. It has rescued from impending ruin thousands, who, for the want of employment, would have been lost to society, and has filled their abodes with comfort, abundance, and happiness. It has saved, and made virtuous members of the community, thousands, of both sexes, who, but for its existence, would have become victims to vice, indolence, and dissipation: and I sincerely believe that every part of our common country has been benefited by it.
“With my best wishes for your prosperity
|1815||$36,306,022.||Free Trade after the war.|
|1817||17,524,775.||Tariff of 1816 in operation.|
|1820||12,449,556.||Same—predictions fully verified.|
|1821||15,898,434.||Country began to recover, the natural causes of prosperity, overpowering the retarding operation of the Tariff.|
|1825||24,358,202.||Tariff of 1824 not yet in full operation.|
|1826||20,248,054.||It operated this year.|
|1829||22,192,879.||Thrown back by Tariff of 1828.|
It thus appears, that, in every instance, the new Tariff diminished the revenue; but as the credits given on the duties threw the payments to a later period, and as it took time for the merchants to find out, by dear-bought experience, that the increased duties diminished the consumption of goods, the effects were not visible until a year or two after the respective laws were passed.
By the different Census’ of the United States, it appears that the population stood as follows:
Now if we take the first two years in the above table of revenue, which probably exhibit something near what would have been the revenue of the country had the restrictive system not been adopted, we shall have an average revenue of $31,895,061. But we are willing to make a large allowance for the fact, that, after the war, an unusual extent of imports was called for by the wants of the country; and we will therefore be content to fix the amount of revenue at $25,500,000, which is an abatement of upwards of six millions per annum. Estimating, then, the population at 8,500,000, we have a revenue equal to $3 per head on the whole population. Taking the last two years in the table, including even one during which the fresh restrictions had not yet operated, and calling the population only twelve millions, we have but $1.96 per head as the revenue collected. But if these periods appear too short to cast an average upon, let us take the first five years, and we shall find an average revenue of $24,052,010, and, if we assume 9,000,000 as the average population, we shall have an average revenue equal to $2.67 per head. The last five years, on the other hand, give an average revenue of $22,848,206—[less, in absolute amount, than that given from 1815 to 1820!]—and, taking the population at 12,000,000, present the result of only $1.90 per head. We now ask the intelligent and honest reader whether he thinks Mr. Clay has made out his case?—and, if not, whether it is a proof of wisdom for a man, who seeks the confidence of the nation, to advance such random positions as the one we have examined?
We shall now examine the second position of Mr. Clay, in which he asserts that the predictions of the Free Trade party have not been verified in regard to the diminution of commerce. And here we claim the same right to insist that the diminution predicted could only be construed to have reference to population. For example, suppose it had been predicted, when the population was five millions, and the production of wheat fifty millions of bushels per annum, that certain measures sures would diminish the quantity of wheat, and produce distress; and suppose the population should afterwards increase to ten millions, and the production of wheat should be seventy-five millions of bushels, instead of a hundred millions, would not the prediction have been verified? We think that those who were half starved, if not the whole of the population, would answer in the affirmative.
The Exports of the United States, for the last fifteen years, of which the official statements have been published, were as follows:
We have not inserted the Table of Imports here, lest we might confuse the reader with too many figures, but it will be found in a note below.* Now from the foregoing it will appear, that, during the five years, from 1816 to 1820, both inclusive, the average of exports was $80,541,469 per annum, being equal to $8.95 per head of the population, which did not exceed 9,000,000. And it will also appear, that, for the five years, from 1826 to 1830, both inclusive, the average was only $75,678,603, being less in aggregate amount, and only equal to $6.30 per head, estimating the population at 12,000,000. Had the ratio of exports kept up in proportion to the population, the average would have been $107,388,625—that is thirty-one millions more than the actual amount.
But we are not content to let the matter rest here. We shall call the attention of the reader to the foreign commerce of the country before free trade was interrupted by the restrictions which commenced in 1808, with the embargo. Our exports during the ten years preceding that measure were as follows:
The average of the above ten years is $81,670,872. Now as the population in 1800 was 5,319,762, and in 1810 was 7,230,903, it will be fair to estimate the average population during those ten years at 6,000,000, which would show an export equal to $13.61 per head of the population, which is more than double the amount exported at this day. And, taking these ten years as a basis of calculation of what the commerce of the country would have been, had it not been interrupted by restrictions, we may fairly conclude that, at this day, our exports would have been $176,953,556, the proportion which would correspond to the increase of population from six to thirteen millions, instead of a hundred millions per annum less.
It has been thus demonstrated, as we think, that Mr. Clay’s declaration, that “our foreign commerce has been greatly nourished and extended by its operation, (viz., the operation of the American System,) “changing only some of its subjects,” is not established; and we challenge him, or any of his friends, by any process of reasoning, to make out his case.
Let us now see what he says about our Navigation: “Our navigation, and especially the most valuable part of it, has been rapidly extended.” In showing that this position is as erroneous as the rest, we shall rely upon the official documents. The following is a comparative view of the registered and enrolled and licensed Tonnage of the United States, from 1815 to 1829, inclusive, expressed in tons and 95ths of a ton:
|Registered.||Enrolled & Licensed.||Total.|
|1815||854,294 74||513,833 04||1,368,127 78|
|1816||800,759 63||571,458 85||1,372,218 53|
|1817||809,724 70||590,186 66||1,399,911 41|
|1818||606,088 64||609,095 51||1,225,184 20|
|1819||612,930 44||647,821 17||1,260,751 61|
|1820||619,047 53||661,118 66||1,280,166 24|
|1821||619,096 40||679,062 30||1,298,958 70|
|1822||628,150 41||696,548 71||1,324,699 17|
|1823||639,920 76||696,644 87||1,336,565 68|
|1824||669,972 60||719,190 37||1,389,163 02|
|1825||700,787 08||722,323 69||1,423,111 77|
|1826||737,978 15||796,212 68||1,534,190 83|
|1827||747,170 44||873,437 34||1,620,607 78|
|1828||812,619 37||928,772 50||1,741,391 87|
|1829||650,142 88||610,654 88||1,260,797 81|
The reader will be surprised to observe in the foregoing table, so great a falling off in the tonnage, from 1828 to 1829, as nearly half a million of tons; and it will be but fair to inform him, that for many years prior to 1829 the custom-house returns had not been corrected by deducting the tonnage lost, worn out, and sold abroad. The correction has now been made, but owing to the impossibility of correcting the error of any previous year, the real state of the case can perhaps never be known. We think, however, that no candid man who would cast his eye over the preceding table, would aver that any evidence was there afforded of an increase of tonnage since the year 1816, when the American System was commenced. To reason from erroneous figures, is throwing away time, and we shall not, therefore, attempt to do it. But we will maintain, that even if it could be shown, that our navigation has been increased in absolute amount of tonnage, it would afford no evidence whatever of the prosperity of commerce, as an insulated fact. For instance, we maintain that, if the tonnage in 1815 had been only 1,000,000, and in 1829 was 1,260,797, it would afford no evidence of increased commerce. And why? Because, since the former period the prices of all commodities, foreign and domestic, have been so greatly reduced that the same value of articles require more tonnage to transport them. When coffee was at twenty cents a pound in the West Indies, one vessel could bring a value which it would now require three to carry. The same may be said of most other articles. Fifty millions of dollars, exported and imported, will probably employ half as many vessels again as they used to do, and the reason why the tonnage has not increased with the fall of goods, is owing to the improved skill in shipbuilding and increased science in navigation, by which a given number of vessels will make half as many voyages again in a year as they used to do. Thus it appears, that not only has Mr. Clay staked his reputation upon the denial of a proposition which is not only a correct one when examined with the liberality due to honest reasoning, but is even true to the very letter. Our navigation has been diminished by the Tariff policy; and, in reference to our registered tonnage, no perverse imagination, with the foregoing table before it, could undertake to maintain that the registered tonnage of 1829 was greater than that of 1815.
As to the increase of the coasting trade, which Mr. Clay, contrary to the sound rules of political economy, which teach that no one branch of navigation can long remain more profitable than another, where capital and labour are left free to flow into it, it is quite probable that there may have been some increase to it—which is not to be wondered at, when we recollect the great number of steamboats built since 1815, and which are all included amongst the enrolled and licensed tonnage. This increase, however, is not an overbalance for the diminution of the registered tonnage, as may readily be seen from a reference to the table, and, to speak of it as a gain, is perfectly idle.
The position asserted by Mr. Clay, that the Tariff has made the protected articles cheap, has been too often refuted, in this journal, to need any further exposure of its utter destitution of facts to support it. It is the story of the little boy and the tide, and argues, on the part of any one who employs it as an argument, either a culpable neglect to seek for the truth, or a wilful perversion of it after it has been acquired. We have published in this paper a list of two hundred and fifty articles with their prices in 1816 and 1831, and have shown most conclusively that every one of them had fallen in price, excepting only the following twelve, viz: pig-copper, opium, beaver skins, hoop-iron, under leather, pine scantling, wooden hoops, dry yellow ocre, Bordeaux brandy, tortoise shell, English whiting, and claret bottles. This list included every commodity which was quoted in the two prices current from which we made up the comparative statement, and consequently embraced articles which were subject to high duties, to low duties, and to no duties at all, and afforded evidence, which no honest man could reject, that our high duties were not the cause of the decline in price.
As to the last charge of false prediction, made by Mr. Clay, namely, that “the system would be a fruitful source of vice and immorality and depravity,” we think it disproved by the late assemblage of a Convention at New York of the Manufacturers, for the purpose of endeavouring to prevent frauds on the revenue. We published, not long since, the proceedings of a meeting at Providence, at which it was admitted that smuggling and perjury to a great extent were now carried on; and, if this be not vice, and immorality, and depravity, we know not what may be so called. In regard to the morals of the people employed in factories, a prophecy of injurious results can hardly be pronounced to have failed at so early a day as the present. The system has not yet had time to work, and, even if it has, the immorality to which it has given rise is not of that sort which reaches the knowledge of the public. We have, nevertheless, been told, that at a village in the neighbourhood of this city, where a number of manufactures are carried on, nocturnal revellings and tavern dances are not unfrequent, such as certainly would not take place if the young people there employed were scattered through the country upon the farms from which they have been withdrawn, to the great inconvenience and injury of the families who are thus deprived of their labour. That the factories do not afford the wide relief which was promised by the friends of the system, is proved from the fact, so often repeated by Mr. Matthew Carey, that there are in the Northern cities many thousands of women who are destitute of employment.
But we entirely deny the possibility of any improved condition of the labouring people, as a body, by any system, the tendency and design of which is to diminish the total mass of products. It is impossible that a people can fare so well under laws which prohibit them from buying cheap clothing and cheap groceries, as they would, were there no such laws; and, consequently, to attempt to cure distress arising from the want of articles of necessity, by insisting that there shall be fewer of them than there otherwise would be, is just as absurd as it would be for a physician to attempt to cure the debility brought on by a copious effusion of blood by a further resort to the lancet. This is common sense. Any man that wishes to see it, can see it, and we are of late very much inclined to the opinion that there are in our community more knaves than fools.
To conclude, Mr. Clay thinks “it is vain that the opponents of the system seek, by subtle and ingenious solutions, to account for the gratifying fact—the fact itself falsifies their predictions, and it is worth a thousand hair-splitting theories.” Now this quotation shows that Mr. Clay has never read any of the arguments of the opponents of his system, for they certainly advance no hair-splitting theories. Where is the hair-splitting, when we say that if there was no duty on sugar it would be three cents per pound cheaper than it is?—if there was none upon iron it would be $37 per ton cheaper than it is?—that if there were none upon cotton and woollen goods they would be 30 to 50 per centum cheaper than they are? It is a hair-splitting theory which denies these facts, not which asserts and proves them. Let these facts be disproved, and then Mr. Clay may talk of theories. A system must be a feeble one, that can only be supported by postulates—by bare assertion, without proof. Such a system is Mr. Clay’s system—and, whatever may be his opinion on the subject, we feel quite assured that it has seen its best days.
[* ] Imports from 1821, when the value was first shown by the custom-house returns