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Subject Area: Economics
Topic: Free Trade

ESSAY No. CXXIX. - 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. CXXIX.

september 12, 1832.

The duty on Bar Iron. No one gains by it but the owners of iron mines.

IN a former article we showed that none of the persons who are concerned in the fabrication of iron, from the time that the ore is dug from the mines or the bogs, until it appears in the form of a finished article, is interested in the duty on pig iron, except the owners of iron mines; and for the plain reason, that it is the interest of these last that pig iron should be dear, because it is the produce of their land—whilst it is the interest of all the others that it should be cheap, because it is the raw material of their business. We shall now examine and see who are interested in the duty on bar iron.

And, first, it will be evident, that the owners of the iron mines which are situated within the reach of the competition of foreign bar iron, are interested; for, if no duty were imposed upon bar iron, it could be imported and sold cheaper than domestic bar iron could be produced. This fact is too manifest to need illustration; and it is equally manifest, that those mines which are situated at a considerable distance from the seaboard, would not be affected if bar iron were admitted duty free.

Secondly. The owners of forges which are situated within the reach of foreign competition, are benefited by the duty on bar iron, but only because there is a duty upon pig iron. Let the duty on pig iron be taken off, and the forge owners could well afford to have the duty reduced. The protection which they now enjoy, by a duty of $22.40 upon hammered iron, is only necessary to them because, by the duty upon pig iron, of $12.50 per ton, they are compelled to pay, for a ton and a half of that article, which is the raw material of their fabric, $18.75 more than they would otherwise have to pay, it requiring that quantity of pigs to make one ton of bar iron. The real advantage in their favour, now enjoyed by the forge owners, over what they would possess if there was no duty on pig iron, is but $3.65 per ton; and they are now positively no better off than they would be if the duty on pig iron was entirely repealed, and a duty on foreign bar iron, of $3.65 per ton, were imposed. Their position, as relates to this question, is precisely the same as that of the tailors, who are protected, by a duty of 50 per centum upon ready-made clothing, merely because there is a heavy duty on cloth, the raw material of their labour; which duty, it could easily be shown, the tailors would not need if there was no duty on cloth. The forge owners could, therefore, well afford a reduction of the duty to a revenue scale, without being affected by it in the slightest degree; and if this is the case with those whose works are within the reach of foreign competition, how evident is it that none of the rest could be affected by it. Indeed the clamour which is made about the iron duty is all occasioned by the ignorance of those who have not examined the subject; and, as the matter comes to be better understood, people will see that the owners of the mines are at the bottom of the whole imposition.

Having thus shown the operation of this duty upon the owners of the iron mines and forges, let us now see whether the blacksmiths are benefited by the duty on bar iron. Bar iron is to them the raw material of their business. The cheaper the price of bar iron, the more articles they are called upon to make. Any one, who cannot see that they are injured by this duty, we refer to the petition of the Philadelphia blacksmiths, presented to the last Congress, where the subject is handled in a masterly manner, and is placed on such grounds as to be altogether irrefutable.

From these considerations it is evident, that the only persons who are benefited by the duty on bar iron are the owners of the iron mines; and even of them, a small portion only, living on the sea-board, are deeply interested. The question then comes to this; are all the improvements in agriculture, commerce, and manufactures, to which iron is an indespensable material, to be kept back, in order that a few owners of iron mines shall be enabled to carry on a profitable business, at the expense of the public?