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Subject Area: Economics
Topic: Free Trade

ESSAY No. CXXVIII. - 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. CXXVIII.

august 22, 1832.

A few Short Answers to Tariff Arguments.

1. IF a tariff man says it is advantageous for a country to protect its domestic industry, tell him so it is, and that it is for that reason you advocate Free Trade, for that, as there are three sorts of industry, agricultural, commercial and manufacturing, you are opposed to any system which grants any especial favour to one branch at the expense of the rest.

2. If he says that manufacturing industry, which clothes the people, is alone entitled to the appellation of domestic industry, tell him that the industry of the farmers, which feeds the people, and gives them the raw materials for their clothes, is also domestic industry, and entitled to as much consideration from government as any other.

3. If he says that manufacturing industry can be protected by high duties, without injuring agricultural and commercial industry, tell him he has not examined the subject.

4. If he says he has read Niles’ Register and the Address of the Tariff Convention, tell him he must read Adam Smith and the Free Trade Memorial.

5. If he says he has read them, ask him if he has any manufacturing stock, or is concerned in iron mines or sugar plantations, or is determined to have Henry Clay for President, nolens volens.

6. If he says that Political Economy is a theory, tell him the most mischievous theory in the world is the one which supposes that Congress can regulate the trades and occupations of the people better than they can do it themselves.

7. If he says that a tariff is not designed to compel people to follow particular trades, tell him that, whatever it may be designed for, it has the effect of driving people out of commerce and agriculture into manufactures, and that in no other way can the forced manufactures be supplied with labour and capital.

8. If he says that the labour and capital employed by manufactures is not withdrawn from agriculture or commerce, but constitute a dormant stock, which would, without the stimulus of the tariff, have been idle and unproductive, tell him there is no dormant capital or labour in this country.

9. If he demands of you to prove this, tell him that banks have no where at any time had any difficulty in lending their capitals at six per centum—that, if a city capitalist has more than he can lend at home, let him send it into the Western and Southwestern country, where the demand for capital is so great that all the merchants purchase their supplies of foreign and domestic store goods in our cities upon credit, thereby demonstrating that there is full employment for tens of millions of dollars at a higher rate of interest than six per centum: for, if this were not the case, the merchants would pay cash for their goods, and avail themselves of the discount allowed by the merchants for prompt payment, which is never less than 6 per centum per annum. In relation to dormant labour, tell him that you can prove there is no such thing, except when labourers are asleep, by the simple fact that there are, no where in this country, except occasionally in a few overgrown cities, any able-bodied persons who have not at all times supported themselves by labour of some kind or other. The very limited lists of able-bodied paupers in our different poor-houses, exhibit the true extent of dormant labour; and, in nine cases out of ten, as regards these, no stimulus would set their American industry in motion but that of the tread-mill.

10. If he says that foreign commerce encourages foreign industry, tell him that it cannot possibly do this without affording an equal encouragement to domestic industry, and for the very simple reason, that we cannot import a foreign article without paying for it with a domestic article.

11. If he says we may pay for the foreign article with specie, tell him that we could not get that specie but in exchange for some domestic article, and that, although the exchange of flour for broadcloths may not be a direct one, it is, nevertheless, as real an exchange as takes place in nine out of ten transactions which every day occur in individual life. Who doubts, when he sees a farmer sell his grain for money to the miller, and sees him give that money for store goods, that the store goods are in reality received in exchange for his grain? So unquestionably is this transaction one of exchange, that, had it not been for the knowledge of the merchant that this farmer would have grain to sell, and would want store goods, he would not have laid in a stock.

12. If he admits it to be true, that for every dollar’s worth of foreign goods brought into the country, there must be sent out an equal value of domestic goods, but insists that this operation only gives employment to one domestic capital, whereas, had domestic articles been produced, in the place of the foreign ones, every exchange would give employment to two domestic capitals, tell him that a man cannot have any more than a cat and her skin—that a child cannot eat its cake and have it too—that the same capital and labour which furnish seventy millions of exports, cannot furnish seventy millions of domestic manufactures besides, to be exchanged for them—that seventy millions of exports represent the quantity of products left after feeding and clothing thirteen millions of people—and that another surplus of seventy millions, to be exchanged for them, would require another population of thirteen millions of people.