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Subject Area: Economics
Topic: Free Trade

ESSAY No. CXIV. - 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. CXIV.

august 10, 1831.

Imports and Exports inseparably connected; one cannot exist without the other. Commerce an exchange of equivalents.

ONE of the points most essential to be clearly understood, in Political Economy, is, the absolute inseparableness of imports and exports; and if we look at the arguments of that portion of the tariff party who pretend to reason upon the subject, we shall discover that a want of knowledge of this important truth lies at the bottom of their whole fallacious theory. They seem to suppose that a country can carry on an export trade, without at the same time carrying on an import trade, and hence they are constantly at work to try to find out how they can increase the export of domestic products, and at the same time diminish the import of foreign products. Like the disciples of the old commercial school, who maintained that a country was enriched, not in proportion to the aggregate extent of its trade, but in proportion to the quantity of the precious metals which were brought into it, they seem to regard as the very apostles of wisdom those who are seeking after the philosopher’s stone in the form of an excess of exports over imports. A little reflection upon this subject will, we think, satisfy any one, that this search will be nothing different from a wild-goose chase. Like an ignis fatuus, it is ever dancing before the eyes of the bewildered pursuer, and like it, must forever elude his grasp.

Commerce is nothing in the world but an exchange of commodities for commodities of equal value at the place where the exchange is made. Nations never give commodities to other nations for nothing. Even individuals rarely do it; for, although a Chinese hong-merchant may sometimes make a cumshaw or present to an American supercargo, yet he probably gets, in exchange for it, its full value, in ginseng, opium, or extra commissions. If, however, nations were to be so foolish as voluntarily to give their commodities away for nothing, the nations to whom they were given would be gainers to the full value of the gift, and would certainly not be guilty of the folly of refusing to receive them, upon the ground that the balance of trade was against them, as proved from their importing more than they exported. Now if other nations will not give us their products for nothing, we think it may very safely be assumed, that we will not give them our products for nothing; and it must therefore be manifest to any man, who does not regard the people of the United States as a nation of boobies, that, for every dollar we export, we import a dollar’s worth in return.

From this it will be evident, that imports and exports go together hand in hand. It is no doubt sometimes the case, that in one particular year, imports may exceed exports, and vice versa; but there is a perpetual tendency to equalization, and upon an average of five or ten years it can hardly fail that the amount of one is exactly counterbalanced by the amount of the other. Is it not therefore self-evident, that whatever measures have a tendency to prohibit imports, must of necessity at the same time prohibit exports, to an equal extent? We do not see how this can be doubted, and, according to our custom, we cheerfully offer the columns of this paper to any writer who will undertake to refute this position.

Every nation has it in its power to diminish the actual amount of its exports, by two processes, equally efficacious. One is by positively prohibiting exports; the other is by prohibiting imports. It matters not, as to the final result, which one be resorted to. Prohibitory duties on foreign commodities, as far as they operate, are just as effectual in preventing exports, as an embargo operating upon the same value of goods. We cannot say that ten millions of dollars’ worth of foreign products shall be excluded, without saying, at the same time, that ten millions of dollars worth of domestic products shall be cut off from our exports; cause and effect are not more inseparably united; and it is because the Tariff party will not give themselves the trouble of thinking upon this point, nor of listening to the arguments which so conclusively establish the fallacy of their reasoning, that the Southern people have so strong grounds for dissatisfaction. The Southern people say, and they say very correctly too, that if duties are imposed upon foreign products which exclude ten millions of dollars worth of goods, this prohibition is attended by a diminution of ten millions of dollars in the exports of domestic products, and that, as the article of cotton is the one which would undoubtedly be the preferred commodity for a great part of this sum, the operation of the duty is more oppressive on the cotton-planters than on any other class. Of this fact, no one who understands the subject entertains any doubt; and even supposing that the Constitution authorises protecting duties, which we wholly deny, the inequality of their operation ought to be an objection to their adoption under a government founded upon a supposed conciliation of interests.

If then these positions be true—if imports and exports are inseparably connected, and if a nation can at its pleasure equally diminish its exports, by prohibiting the one or the other—it is equally clear that a nation may augment its exports, either by reducing the actual rate of duties on foreign commodities, or by removing the obstructions placed upon those exports. This is what we have always contended for in this journal. The restrictionists do not understand this principle, and on that account, when they cut off exports by the refusal to take foreign goods, they fall into the error of supposing that it is the fault of foreign nations that we do not sell more domestic productions. They delight in having discovered, as they suppose, that foreigners will not buy of us—when it is in fact we, who will not permit them to buy. We do really believe, that there are amongst them some prominent men so ignorant on this point, that if their system was carried out to its full extent, so as to exclude all foreign imports, and consequently to cut off all domestic exports, they would maintain that our commerce had ceased because foreigners would not buy our productions.