Front Page Titles (by Subject) Albert Gallatin, Memorial of the Committee of the Free Trade Convention (January, 1832), Held at Philadelphia in September and October, 1831, remonstrating against the existing Tariff of Duties. - State Papers and Speeches on the Tariff
The Online Library of Liberty
A project of Liberty Fund, Inc.
Albert Gallatin, Memorial of the Committee of the Free Trade Convention (January, 1832), Held at Philadelphia in September and October, 1831, remonstrating against the existing Tariff of Duties. - Frank William Taussig, State Papers and Speeches on the Tariff 
State Papers and Speeches on the Tariff, with an Introduction by F.W. Taussig (Cambridge, Mass.: Harvard University, 1892).
About Liberty Fund:
Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.
The text is in the public domain.
Fair use statement:
This material is put online to further the educational goals of Liberty Fund, Inc. Unless otherwise stated in the Copyright Information section above, this material may be used freely for educational and academic purposes. It may not be used in any way for profit.
Albert Gallatin, Memorial of the Committee of the Free Trade Convention (January, 1832),
Average for the eleven years, $5.49. If it is due to the protecting system that the average of the last three years, as compared with the three immediately preceding, rose from 5% to 5.64%, to what cause must be ascribed the still higher average of 6.34% for the years 1822 to 1824, immediately following the depressed price of 4.75% of the years 1820 to 1821, and before the country was under the magic influence of the tariffs of 1824 and 1828? Was the depression to the average price of $5, during the years 1825 to 1827, the result of the tariff of 1824, or that to the same price, in 1830, of the tariff of 1828?
The enlightened advocates of the protecting system need not be informed that all those fluctuations are exclusively due to the foreign demand; that in a country which always raises what is the equivalent of fifteen hundred thousand barrels of breadstuffs beyond its own consumption, the price depends on the proportion between that supply and the foreign demand; and that that demand will continue to govern the price of the home market, whatever may be the increase of the domestic consumption, so long as such an excess beyond that consumption shall continue to be raised. If there was no foreign demand for that surplus (or for any other article which is now extensively exported), either the quantity raised must be diminished in that proportion, or the price would fall to the very lowest rate at which the produce can be cultivated. Such has been the invariable result in every part of the country too distant from the seaports to participate in the benefit of the foreign market. The enhanced price of breadstuffs and other exportable articles, beyond that minimum, is almost exclusively due to the foreign demand, and not in any perceptible degree to the increase of manufactures. The statement of prices exhibits no other than those ordinary fluctuations in the foreign demand which have at all times occurred, and does not afford the slightest proof of that permanent improvement in the value of agricultural labor ascribed to the protecting system. For the enhanced price which the farmer obtains for any of his products which continue to be extensively exported, he continues to be solely indebted to the foreign market and to commerce.
Not only has not the price been affected, but the absolute quantity of breadstuffs raised in the United States has not been increased one single bushel by the restrictive system, otherwise than by the inducement it may have offered to some skillful artists arid operatives to emigrate. The whole quantity raised is that wanted for home consumption and exportation; that wanted for home consumption is regulated by the amount of population j and to this the protecting system, saving a few more immigrants, has not added a single individual. The uniform rate of increase, demonstrated by the several enumerations, proves, beyond controversy, that no general sensible change has been produced by the increase of manufactures, and that we are indebted to a far more powerful cause for our prosperity.
The answer of one of the advocates of protecting duties to the Committee on Manufactures, respecting the moral and pecuniary condition of laborers, is equally applicable to the unparalleled growth of the population of the United States: “This will continue to be the case so long as this country offers to labor a certain employment, in the purchase of unimproved lands, at a low price, and so long as the constitution of the government remains free as it is.” These are the bases of the true American system; of that system, free of restrictions, which, permitting every man to pursue those occupations for which he was best fitted, had in less than two centuries converted the wilderness into an earthly paradise; and out of a few persecuted emigrants, had created a prosperous, happy, and powerful nation. Under the auspices of that system of freedom, the American people, amidst all the fluctuations and vicissitudes incident to human affairs, had never ceased to make the most rapid progress in agriculture, arts, and commerce. To ascribe that unexampled and uninterrupted prosperity, which even legislative errors cannot arrest, to a tariff is one of the most strange delusions by which intelligent men have ever suffered themselves to be deceived.
But if a sober investigation of facts is substituted to those exaggerated and untenable assertions, all the benefit conferred by manufactures on the agricultural interest at large will be found to consist in having probably lessened, to some extent, the number of those who would otherwise have followed agricultural pursuits, and thereby prevented the production of a greater quantity of breadstuffs and other provisions than might be actually wanted for home consumption and profitable exportation. The effect cannot have been considerable. In many districts there is a sensible diminution of household manufactures, which lessen the apparent advantage derived from the employment, in manufacturing establishments, of female labor. And your memorialists have no doubt that the greater number of the men engaged in the unprofitable branches which have been artificially fostered would have followed some of the other mechanical pursuits which require no special protection.
Supposing, however, that all those employed in the manufacturing establishments have given a new market to the wheat-growing States; what does this amount to, and what is the benefit to the agricultural interest?
Those States have always supplied the eastern States with wheat, flour, and some other provisions; and the question is not, what is the amount now, but what has been the increase? The home consumers of the flour not used by the farmers themselves consist of the inhabitants of all the cities, towns, and villages in the United States, whether commercial, manufacturing, or of any other description. The population of the three great manufacturing eastern States — Massachusetts, Rhode Island, and Connecticut — amounted, in 1790, to 679,968; in 1800, to 743,365; in 1810, to 811,113; in 1820, to 882,110; and in 1830,1,004,935 souls. The rate of increase during the three first periods was uniform, not varying more than from 8.7% to 9.3% for each ten years. The increase from 1820 to 1830 has been at the rate of 13.9%, or 5% more than the average rate of increase of the three preceding periods. This excess, which amounts to 50,000 souls, is all that can possibly be ascribed to manufactures. Taking even the whole increase during the last ten years, it amounts for the three States to less than 123,000 souls, not one half of whom are consumers of flour, or of any other imported provisions, to any extent; and from those consumers, the increase of Boston, amounting almost to 18,000 souls, and of several other commercial and not manufacturing seaports, should be deducted. Now the increase of population of New York, the inhabitants of which are all consumers of flour, for the last ten years exceeds (including Brooklyn) 84,000 souls. There cannot be the least doubt that the market afforded to the agricultural interest, by the increased population during that period, of the commercial and other non-manufacturing towns and villages of the United States, is far more extensive than that derived from all the manufacturing establishments.
But there is a still more precise mode of ascertaining the extent to which they have promoted the agricultural interest at large. Pursuing the process adopted in estimating the value of female labor, we find that, in the flourishing Lowell cotton manufactory, already alluded to, the board of all the persons employed, at the rate of $1.75 a week for the men, and of $1.25 for the women, amounts to the annual sum of $13,500, or less than 6$% on $210,000, the annual amount of sales. Mr. Pierce states the amount consumed by persons employed in his woollen factory, and their families, exclusive of $7,000 in domestic cotton goods, as followeth: —
|Corn, floor, rice, angar, tobacco, and fish,..||$7,500|
|Other domestic provisions and fuel, ...||5,000|
In all $12,500, or about 10% on his annual sales. The average ratio of the board of all the persons employed in the Taft, Shepherd, and Wolcott factories to the annual sales is 11¼%. The average of the whole does not exceed 9%, of which only about one half consists of articles imported from other States. But the benefit to the farmers and to the carriers of that produce cannot certainly amount to 20% upon it The profit of the agricultural interest derived from the cotton and woollen manufacturing establishments cannot therefore exceed, at most, 2% on the annual sales, of which at least one half must be allotted to the farmers in the immediate vicinity; and the residue to the agricultural interest at large of the United States. The manufacture of cast and bar employs, in proportion to the value of the product, a greater number of persons. Admitting, in this view of the subject, the statement of the manufactures to be correct, the gross amount of the articles purchased from farmers is about 30% of the whole value of the product: 20% profit on those articles by the farmer would give him 6% on the annual amount of American iron. In exchange, he pays from 40% to 100% more for that than he would for foreign iron, and, in this case, the benefit derived is confined to the immediate vicinity of the manufacture.
Allowance has been made in this estimate for the profit on the carriage of the provisions consumed by the manufacturing establishments. That on the freight of cotton from the places of exportation to other parts of the United States is not greater than if it had been exported to Europe. That on the carriage of the other raw materials forms but a small item. The profit on the coasting or inland carriage of manufactured articles is the same, whether they are of domestic or foreign origin. A decrease of the tonnage employed in the foreign trade must have taken place, proportionate to that of the imports excluded by the tariff, and of the exports with which those would have been paid for. Any increase which may have taken place in the coasting trade is due to the generally increased intercourse and commerce between the several parts of the United States, to which the increased amount of protected articles, with the exception of sugar, can have contributed but a very small portion, and no greater than would have been gained on the transportation of the same amount which otherwise would have been imported from abroad. There are no data from which the increase of the coasting trade of the three or four last, as compared with that of the preceding, years can be estimated. The total amount of enrolled and licensed tonnage of the United States on the 31st of December, 1828, was stated by the Treasury at 928,772 tons. But this was corrected during the year 1829 by striking out not less than 358,136 tons for vessels lost or condemned in previous years, and not before entered in the treasury books. The true amount at the end of the year 1828 was therefore only 570,636 tons, including about 24,000 tons of steamboats employed on the lakes and inland rivers. But as this enormous difference is the result of omissions accumulated during a series of years, and it is not stated whether a similar correction ever was made before, it only shows that the statements for the preceding years are all erroneous, and that there are no returns published by which to ascertain the annual progressive increase of that tonnage. The return for the year 1789 is incomplete, but that for 1790 is for the whole year, and could not be liable to any accumulated errors. The only fact, therefore, to be relied upon is, that the enrolled and licensed tonnage which at the end of the year 1790 amounted to 132,000 tons had at the end of 1828 increased to 571,000, and at the end of 1829 to 610,000 tons. This increase is by about one third greater than that of the population, and is accounted for, partly by the acquisition of Louisiana and Florida, partly by the vastly increased wealth and intercourse between the several States.
It must be recollected that in this estimate of the advantages arising from the protecting system, those only are now taken into consideration which accrue to the community considered as a whole, and that such as are exclusively enjoyed by any distinct class of society or section of the country must, in this view of the subject, be excluded. The bounty which that system gives to the growers of wool, hemp, and flax is certainly beneficial to them; but this benefit is paid for and falls on the community at large, since that bounty is founded on the admitted or presumed fact, that without it those commodities would not afford a reasonable profit to the grower.
Your memorialists have endeavored to enumerate, and from the materials accessible to them to estimate, as far as practicable those general advantages. They are aware that they have included some which may not be thought of that character, in accordance to the most approved principles of political economy. But they must repeat, that since the necessity of an average duty of 20% to 25% on imports is admitted, it is not necessary for them to discuss abstract questions, but only to show that that duty is amply sufficient to cover all the general advantages which may possibly be ascribed to the restrictive system; and admitting all those of a debatable nature, they have rejected only those which are altogether founded on error and delusion.
It has, it is believed, been satisfactorily shown that the difference between the price at which the domestic commodity protected by a restrictive duty can be afforded and that at which the similar foreign article might have been previously purchased is a national loss, and that the general advantages resulting from the system which may in part compensate for that loss are to be found in the increased productiveness of the female labor employed in some manufactures; in the nearer and perhaps more extensive market opened to the cotton grower, and substituted for one fifth part, as it is asserted, of his crop to the foreign market; and in the very inconsiderable additional home market afforded to the agricultural interest at large.
Those advantages have in every instance been estimated at a higher rate than what your memorialists consider as their real value. They are not found united in any one branch. The advantage derived from a new or better market for any unprotected raw material applies only to the cotton manufacture; that ascribed to the employment of female labor is confined to the cotton and woollen; the iron has none but a greater comparative consumption of agricultural products. They do not in any branch, the cotton perhaps exoepted, amount to 10% of the value of the annual product of the manufacture. But making the most ample allowance for errors or omissions, it is utterly impossible, on any rational and candid calculation, to swell their aggregate value to an amount approaching the national loss, arising from a difference of 20% between the respective prices of the domestic and similar foreign commodity. The duty to that amount is, therefore, more than amply sufficient to cover all those presumed advantages; any higher rate in favor of any favored commodity is, independent of every other consideration, a certain national loss so long as the difference of price corresponds with the rate of duty.
The next question to be examined is, therefore, the effect which the domestic competition arising from the tariff is said to have on prices. But your memorialists must first take notice of a general assertion which, from its nature, cannot fail to have made an erroneous impression on those who may have taken only a superficial view of the subiect.
Every nation takes a laudable pride in all that contributes to elevate its character; in every progress made in science, letters, arts, wealth, and power; in all that constitutes an advanced state of civilization. To substitute American for foreign industry whenever the substitution is advantageous is an object in which all cordially unite. But whether taking advantage of that general and patriotic feeling, or carried away by it, the advocates of restriction contend that a trade in foreign commodities which, without regard to price, might be produced by domestic industry always interferes with that industry. They denounce and would proscribe that trade altogether, and thus in reality inflict the most serious injury on that object which they pretend to protect. Laws which do not trust the common sense of the citizen, which do not permit him to seek what he thinks the best market for the products of his industry, or which compel him to receive in exchange for these a less quantity of the objects he wants than without those laws he might have obtained, are evidently destructive of domestic industry. By free trade we mean that trade which we may carry free of any restrictions imposed by our own government. It is synonymous with free industry, and it is only because, and as far as, it promotes domestic industry that we object to those restrictions. When, in order to justify that system, it is said that nations are adversary to each other, and that a free trade between them would contravene the arrangements of Providence; when it seems to be forgotten that it is commerce which unites the several nations of the civilized world, and that next to Christianity it is principally to commerce that we are indebted for modern civilization, we can but lament the extremes to which enlightened, patriotic, and philanthropic men may be carried by adhering to a favorite theory and losing sight of every other consideration.
Foreign commerce or the exchange of domestic for foreign commodities is of the same nature, and founded on the same principle, as commerce between different parts of the same country or that between individuals of the same district of country. Every individual, district of country, and country acquires wealth in proportion as, with the same capital and labor, the greatest quantity or exchangeable value of commodities is produced. Whence inevitably follows, in every case, the mutual advantage of exchanging articles produced cheaper by one individual for such as are produced cheaper by another, or of exchanging articles produced cheaper at home than abroad for those which may be produced cheaper abroad than at home. The division of labor which increases the skill of every individual in his particular branch is the foundation of the commerce or mutual exchange of commodities between individuals living in the same vicinity. That between different parts of an extensive country or between different countries has its origin in the difference of climate, of capital, of the density or nature of the population, and of long-acquired habits and corresponding skill in particular branches of industry. The causes which give rise to commerce, as well as its advantages or presumed inconveniences, are precisely the same, whether that commerce is carried between different nations or between different parts of the same country. The misapplication of capital and labor has the same effect, whatever may be the cause which enables an individual or a nation to produce a certain commodity with less capital and labor, and to sell it at a lower price than another individual or another nation.
Those truths are too obvious to be denied in direct terms, but they are disregarded; and several allegations are made, tending to show that an unrestricted intercourse between two nations is fatal to one or ruinous to both. 1. We have not been fortunate enough to discover on what principle or by what fact it can be proved that such intercourse “reduces the labor of one to the same scale of compensation with the labor of the other, to the great injury of that nation whose labor stood highest on the scale.”
Wages are one of the elements of the price of commodities; and if higher in a country which nevertheless affords certain commodities at a less price than the country where the wages are lower, there must be a difference in climate, soil, skill, or some other circumstance which produces that result. But in each country the price of labor is determined either by its productiveness or by the proportion between demand and supply in that country, and in no manner whatever by what may be that productiveness or that proportion in any other country, whether there is or is not an intercourse between the two countries. We have heard that Irish laborers, flocking in great numbers to England and Scotland, have by deranging the existing proportion between demand and supply, and by the low rate of wages to which they were used, lowered in certain seasons the price of labor in those two countries; but so long as they remained at home and did not, by transferring their labor to the spot, interfere with that of England, the long-continued intercourse between the two countries never had the slightest effect on the price of English labor, which, varying according to circumstances exclusively belonging to England, has never been reduced to the miserable pittance that hardly sustains, without remunerating, the Irish laborer. This is universally true with respect to every country; the price of labor is in each regulated exclusively by the respective proportion of supply and demand and the state of society. After two centuries of free commerce with Great Britain, and fifty years of a similar intercourse with the rest of the world, the price of labor continues without alteration to be higher in the United States than in England or any other country.
2. The circumstances which may tend to bring forth more labor in the application of capital to certain domestic manufactures than in that of the same capital to other pursuits have already been adverted to; at the same time that it has been shown that the labor employed in highly protected manufactures was nevertheless less productive than if applied to other branches of industry. But it is asserted, and the general impression intended to be made is, that because foreign trade puts in motion foreign, this is done at the expense of American industry, and that, therefore, by prescribing the first this is necessarily encouraged. This would be true if foreign merchandise or any part of the foreign imports was bestowed gratuitously on the United States, in which case the Americans might enjoy the gift without giving any labor in return; but as every article imported must be purchased and cannot be paid for by any possible means other than the product of American industry, it necessarily follows that, whatever may be the amount of imports and of foreign industry by which they may have been produced, an equal value of American products and an equal amount of corresponding American industry is employed by the foreign trade. When a domestic manufacture equally productive as any other pursuit is substituted to the foreign articles, it puts in motion precisely the same quantity of labor, the same amount of American industry, neither more nor less than that which was employed in producing the articles with which the foreign article was previously purchased; the difference consists only in the respective degree of productiveness. The change is advantageous or injurious to the country, as the domestic manufacture may be more or less productive than other pursuits to which the same capital and labor might have been applied. The error of the restrietion-ists consists in not perceiving that the foreign trade promotes two equal amounts of foreign and domestic industry, and in supposing that the American industry, which in the establishment of a new manufacture is substituted to the foreign industry, is an addition to, instead of being a deduction from, the American industry which was or might have been otherwise employed. It is obvious that a certain amount of American industry which was or might have been employed in producing $1,000,000 worth of articles intended for exportation and to be exchanged for an equal value of foreign goods, cannot, if employed in a domestic manufacture of goods of similar nature, be any longer employed in producing the exportable articles; and the only question is, whether that amount of industry is more or less profitably employed in its new than in its former employment.
3. Since the foreign imports must always be paid for with the products of American industry, there must always be a tendency in foreign trade to equalize the respective value of the imports and exports. Though varying from year to year, any debt incurred must ultimately be paid out of the same fund. The imports of the United States during the ten years, 1821 to 1830, have amounted according to the official accounts to $798,630,000, and the exports to $764,803,000. If the amount of bullion and specie imported and exported is deducted, the annual average of imports was $72,948,000, and that of exports $69,327,000. The annual average of exports of domestic produce was $63,221,000. If the re-exportations of foreign merchandise, valued at the same price as that of importation, are deducted from the imports, and about $20,000,000 added to these, on account of the difference between the rate at which British goods are valued by law and that of the exchange between the two countries, the annual average of the foreign articles consumed in the United States will be found to be about $60,000,000, which is an excess of near $7,000,000 beyond the exports of domestic produce. According to the official returns the difference is less than $3,500,000, but the corrections are obviously necessary. The amount of the earnings of American industry by sea, which cannot appear in the statement of exports, must be added to these, since they equally contribute to the payment of the imports. Those arising from the fish which from the banks is carried directly to foreign ports; of the whale and spermaceti oil, sold by the fishing vessels in South America; of the furs collected on the northwest coast and sold in China; and of the freights on the carrying trade, that is to say, on voyages from a foreign to another foreign port, cannot be estimated. But the freight on the $68,000,000 of domestic and foreign articles annually exported from the United States, calculated on the average rates according to the nature of the merchandise and to the ports of destination, exceeds $11,000,000, of which about $9,000,000 are earned by the American navigation. This result, whilst it illustrates the invariable correspondence between the value of the imports and that of the exports, shows also that so far from having been inundated during that period with foreign merchandise beyond the means of payment, the amount of exports, including freight and those items which cannot be ascertained, has certainly exceeded that of the imports. The difference has either been received in precious metals or applied to the payment of a debt previously due abroad, and it is probable that both have taken place. Independent of private remittances on foreign account, the amount of the public debt reimbursed to foreigners appears to have exceeded their investments in other American stocks; and although, according to the official returns, which in that respect are necessarily defective, the amount of precious metals exported would appear to have exceeded by near $2,400,000 that imported during those ten years, it is ascertained that the amount of specie in the banks alone on the 1st of October, 1830, exceeded by more than $7,000,000 the amount at the end of the year 1819.
But though equal or nearly equal to each other during a period of several years, the respective amounts of imports and exports vary considerably from year to year. Imports of any commodity which greatly exceed the ordinary consumption, though affording a temporary advantage to the consumer, are equally injurious to the American manufacturer and regular importer. The example of England shows that manufactures are not exempt from similar fluctuations, and are exposed to the evils of over-production, as foreign trade to that of excessive importation. This partial and occasional evil is inseparable from foreign commerce, and cannot be prevented unless that commerce be altogether proscribed. So long as the protecting duty is not prohibitory, and the corresponding foreign article is not entirely excluded, it may occasionally be imported to excess. It matters not whether the imports amount to $60,000,000, or are reduced by the restrictive system to $40,000,000. The same excess beyond the actual wants of the country will iii either case occasionally take place with respect to any commodity, the whole stock of which on hand happens to be much greater than the existing demand. But much more has been ascribed to that cause than can be sustained by the facts. Whatever may have been the cause of the fall of price of woollen goods in the years 1826 to 1827, as compared with preceding years; whatever may have been the reason why the domestic manufacture was more profitable before than after the tariff of 1824, it appears impossible that either result can have been due to excessive importations. The average annual amount of foreign woollen goods of every description consumed in the United States, amounted for the years 1822, 1823 and 1824, to $9,233,000, and for the three following years, 1825, 1826 and 1827, to $9,045,000. The principal branch of the American manufacture consisted of cloths and cassi-meres. The value of the corresponding foreign goods consumed in the United States during the nine years, 1822 to 1830, was: —
It is therefore clear that even the somewhat greater importation of 1825 could not have a greater effect on the prices of 1826 and 1827 than that of 1823 on the prices of 1824 and 1825. Yet to the representations made at the time on that subject we are indebted for the outrageous woollen tariff of 1828. As the real evil complained of arises from over-trading, and may ultimately be traced to abuse of credit, it would seem that the most natural, and the only remedy which the parties interested may have a right to claim, is that the legislature should cease to stimulate the importations at least of the articles most generally imported on foreign account by the credit now allowed for the payment of duties. The foreign manufacturer who sends goods on his own account not in proportion to the wants of the country but to his own, who is willing to run the risk of selling at a loss and on credit the merchandise with which he is encumbered, would be deterred from sending it to America if he was compelled, before he made any sale, to advance in money 25% on the value of that merchandise. According to the present system, if he sells woollen goods for cash, he receives as a loan for ten months without interest a sum equal to at least one half of their prime cost, which enables him to continue to undersell the manufacturer.
4. The laws of foreign nations which prohibit or restrain the sale of the products of American industry operate precisely in the same manner as any natural cause which confines the market of those products within certain limits. By lessening the amount of the exports or of the means of paying for foreign products, the restrictive laws enacted by any foreign nation lessen in the same proportion, not necessarily the imports from that nation, but the gross amount of the imports of the United States. No legislative measure is requisite on their part in order to avert the imaginary evil of an excess of imports over exports. The diminution of the imports is a natural and necessary consequence of the diminution of exports. Unless foreign commerce be considered as a positive evil, which must at all events be annihilated, there is no occasion for passing retaliatory laws which, by still more diminishing the imports, would necessarily have the same effect on the exports. Eetaliatory laws that had that effect would only aggravate the evil, if the restrictions imposed by the foreign laws on American products are admitted to be an eviL They would also be injurious if, by being applied particularly to those nations which had imposed the restrictions, they compelled Americans to purchase elsewhere the commodities which they want, and might have purchased cheaper from those nations. The whole amount of imports equalizes itself with the whole amount of exports. It is not at all necessary that this equality should exist; it never does exist in the trade of any country with every other country. Every one purchases what it does want from that country which affords it on the cheapest terms, and sells its products to those countries by which they are wanted and which give the highest price.
The most zealous advocates of the protecting system do not pretend that their object is to lessen the amount of the American products which, notwithstanding the restrictive laws of other nations, still find a market abroad. They do not say that the cotton of the South, and the surplus of the wheat and other provisions of the middle States beyond what is wanted for home consumption shall not be exported. They intend to give an additional and nearer market to the cotton and wheat grower, but not to deprive them of the foreign market which is still open to them; to supply growing wants for which the lessened exports can no longer pay, and not to increase those wants by preventing foreign nations from paying for the American products which they still wish to purchase. The restrictions imposed by foreign nations do not afford a single reason, though they may serve as a pretense for the adoption of restrictive measures on the part of the United States, which would not equally apply if the exports were reduced by a natural cause. The question still resolves itself into that of public utility, and whether measures intended to promote American industry fulfill that object. If, on the contrary, it is made less productive by the artificial direction given to it than if left to itself, the fact that foreign nations have imposed restrictions injurious to the foreign trade of the United States does not in the slightest degree change the state of the question, and is no reason whatever why a policy injurious to America should be adopted.
This is so true that, whatever their language may have been, the restrictionists have acted on that principle. The regulations of France respecting breadstuffs and tobacco are similar to those of England, and affect the interests of America in the same manner. In selecting for protection cotton and woollen manufactures and iron, and favoring wines and foreign silk manufactures, the sole motive was the belief that the application of American industry to the first objects would be a public benefit, and that it was not at this time adapted to the cultivation of wine and the manufacture of silk stuffs. The protecting duty has always been laid in reference to those branches of industry which were deemed advantageous and not at all to the restrictive measures of any particular foreign nation.
It may also be observed that the State which probably suffers most from the restrictions of foreign nations on its products asks for no special protection. Virginia, is a great wheat-growing and the first tobacco-growing State. The foreign restrictions operate in a far greater degree on tobacco than on any other article, without excepting breadstuffs. There can be no doubt that the consumption of tobacco in Prance and England would be double or treble of what it now is were a free trade in that article, with moderate duties, consistent with their policy. The change in that of France has been peculiarly injurious to the American product. That country before its revolution consumed annually 24,000,000 of pounds of American tobacco instead of 6,000,000, the amount of its present consumption. On the other hand, the effect of the corn laws is much less than seems to be generally apprehended. America has always supplied Great Britain with corn in years of great scarcity, and rarely at other times. Canada does it now at all times, on account of its exemption from laws which operate on the corn of every other country. When the price of wheat in England is 60s. sterling per quarter, and it is supposed that the duty of 20s. is a restriction on the sale of American breadstuffs, it is forgotten that the duty is the very reason which makes the price so high, and that if there was none, the deficiency in quantity would in common years be supplied by the countries on the Baltic, where it is one third cheaper than in the United States, and that the London market would not be much better than that of Amsterdam now is.
There is an exception to the general principle. Retaliatory measures may be resorted to with more or less success, according to circumstances, and as they may be more or less adapted to the object in view, for the purpose of inducing a nation to alter her policy and conduct. In that case such measures are of a temporary nature, and a discussion of their propriety is foreign to the question now under consideration. Had this been the motive the course pursued would have been very different. The commercial conventions would, according to the right reserved, have been abrogated, and the manufactures of the countries in question exclusively taxed or prohibited. But it is believed that the advocates of the protecting system would not hesitate to declare that it is in itself highly advantageous, and to avow that unless convinced of the utility of a modification, they will persevere in the same policy even if all the restrictions of foreign nations on the American trade were revoked.
5. When the general prevalence of the restrictive system and the experience of other nations are appealed to, the appeal is in fact only made to the result of that policy in England. For it is in England alone that the prohibitory system, and a complete success in establishing manufactures generally superior in cheapness or quality, are found united. The only legitimate inference.that can be drawn from her example is that both may subsist together. It would require a much more minute knowledge of the origin and gradual progress of the manufactures in that country than any man does possess to ascertain whether, in what branches, and how far the prohibitive system has promoted or impeded that progress. But if that system was the principal cause which has made Great Britain the first manufacturing country of the world it would have produced similar effects in all the countries where it was adopted, as well as in all the parts of the same country, whilst those which had rejected it would be found destitute of manufactures.
It is quite true that the restrictive or prohibitive system, as a branch of that of monopolies, is of ancient origin, and has been adopted and persevered in for centuries, by most European nations. The only exceptions are perhaps to be found in Holland, which, from her situation and exclusive attention to commerce, followed the opposite course, and in those countries subdivided into states or communities which, like the United States before the adoption of the present Government, could not unite in a general system. The first obvious reflection is, why the result has been so different in different countries? The system appears to have been early adopted in Spain. There is hardly a treaty concluded during the seventeenth century between that country and England, in which there is not a clause for the reduction in her favor of the exorbitant duties laid by Spain on certain manufactures. We need not state what is the situation of that country in that respect. Though of much more ancient origin, it is admitted that the system has rigorously been adhered to in France, from the time of Colbert to this moment, with the single exception of the few years which intervened between the treaty of commerce of 1786 with England, and the wars of the French revolution. France continues to enjoy the same superiority, even over England, in the silk manufacture, which she already had in the time of Colbert; but she is yet unable to compete with her in most other branches. This is evident from the statements of importations into the United States, which afford the best criterion of the manufactures in which each nation may have a real superiority. From France we import silks, objects of taste, and fancy articles, but few or no woollens, cottons, linens, cutlery, or manufactures of leather. And, as pointing out the true cause of success, it may be observed that a country may excel in certain particular branches of the same species of manufacture in which it is in general inferior to its neighbors. Thus, England, inferior to France in every other branch of the silk manufacture, maintains her superiority in that of silk stockings.
Again, the system has not produced the same effect in the different parts of the same country. Manufactures flourish in Scotland as well as in England, whilst those of Ireland continue in a still more depressed state than her agriculture. The central parts of France exhibit a nearly similar inferiority to the northern section of that country; and our southern and even western States, to New England.
Switzerland is one of the few European countries to which the restrictive system has not extended; and is, nevertheless, that which, in proportion to her population is, next to England, the first manufacturing country of Europe. Exposed, like her, to the same revulsions, and to periods of distress, when the channels of superabundant manufactured products are obstructed, Switzerland, unprotected by any duties whatever on foreign merchandise, beside certain branches belonging particularly to her, rivals England in the cotton, and France in the silk manufacture.
If these observations do not prove that the restrictive system may not, in some instances, accelerate the establishment of manufactures, they show conclusively that a tariff acts, at best, but a very secondary part, and that there are some other causes far more efficient in promoting domestic industry. A sufficient capital and a certain density of population are necessary requisites; and agriculture will, in preference to manufactures, attract labor in countries or districts where virgin land is abundant and within the reach of all. But a single glance at the map of Europe will satisfy every intelligent observer that the great superiority of some over other countries, in other respects equally fitted for manufactures, is due to the nature of the government, to. laws which at least secure to men the proceeds of their industry, to liberty, or at least comparative liberty, and to the diffusion of knowledge, and superior intelligence, skill, and activity, the infallible offspring of unrestrained industry, and of political, religious, and civil liberty.
We may also, before we dismiss this branch of the subject, and in order to rebut those general assertions of the ruin that attends all nations which rely, in any considerable degree, on foreign trade for a market, appeal to that which we know best, which we have seen and enjoyed, — to the experience of North America. Assisted only by the ordinary mechanical arts, and with hardly any manufacturing establishments, America, during two centuries, relied almost exclusively on the cultivation of her soil, and on the exportation of its products to foreign ports; and her progress during that period, in population, wealth, and all the arts of civilization, as well as in the general diffusion of knowledge and happiness through all the classes of society, stands unparalleled in the annals of mankind. A change of circumstances may induce a partial and gradual alteration in the pursuits of her citizens, and we may rest assured that, if not diverted by legislative interference, they will, as heretofore, embrace those best adapted to their situation.
Since the national loss, produced by high duties on importations, consists of the difference between the former and the new artificial price, the evil will cease whenever the product of the protected domestic manufacture can be afforded, and is sold at the same price as the similar foreign article, free of the protecting duty. The advocates of the restrictive system insist that this is the natural and necessary consequence of the protecting duty, and is produced by the domestic competition.
It must be observed, in the first place, that domestic competition can have no effect either on the wages, the price of the raw materials, or that of provisions, of machinery, or of any other article necessary for the manufacturing process. It can operate, immediately, only on the rate of profits; and, since their insufficiency is the reason for granting the protecting duty, its first effect is to raise them. Domestic competition may afterwards reduce them to a rate corresponding with those of other pursuits, but after they have been reduced to the lowest possible rate, the price of the protected commodity cannot be lessened, otherwise than by a corresponding diminution in the cost of producing it. A reduction of the price of labor, or of the raw material, are circumstances independent of the tariff, and over which the manufacturer has no control. Towards reducing the cost of producing the commodity, competition can have no effect, but in as far as it may stimulate improvements in the manufacturing process; and for this there must be a sufficient motive.
Secondly, competition does not even reduce profits to their lowest rate, unless the supply of the domestic commodity is equal to the wants of the country. Whenever, and so long as, this is not the case, a monopoly is created, which will be attended with all its usual consequences. If, instead of an elevated rate of duty, the similar foreign article is altogether prohibited, the exorbitant price of the domestic commodity is checked only by the lessened demand for it. That price is limited by that at which the foreign article can still be purchased, and by that alone, when the importation is not prohibited, but only charged with a heavy duty. Improvements, tending to lessen the cost of production, may, in that case, still be introduced by the manufacturer for his own benefit; but the price of the domestic commodity will, nevertheless, be exclusively regulated by that at which the similar foreign article may be obtained.
It is, therefore, only when the supply of the domestic manufacture is, or may within a very short time be made, equal to the full demand of the country, that domestic competition may reduce the rate of profits, and ultimately the cost of production. It cannot be doubted that, when the competition is with foreign articles, the necessity of introducing the improvements requisite for that purpose is much greater than when it is only between the American manufacturers. When the manufacture is already established at the time of laying the protecting duty, the improvements which may afterwards take place would have been introduced at least as early, if the restrictive system had not existed; and there may be instances where the duty prevents or retards the adoption of such improvements.
But a reduction of price is, in no case whatever, due to the tariff, so long as the similar foreign article can still be imported, and the price of the domestic commodity is not reduced below that at which the foreign is sold. Under those circumstances, the reduction is clearly due to a fall in the price of the foreign article, and is altogether independent of the tariff. If, in any instance, the price of the domestic article has, immediately after the tariff, fallen below the price at which the foreign article could, thenceforth, be imported, it only proves that the duty was higher than was necessary for the ostensible object in view. The price must fall as law as that at which the foreign article might have been purchased prior to the protecting duly, before the national loss caused by it ceases. It is only then that the domestic manufacture proves successful and beneficial to the consumer, and to the community at large.
Coarse cotton goods are the only protected branch which comes within that description, and the causes of the fall of price, which operated almost simultaneously in England and America, are notorious and acknowledged. They cannot be better expressed than in the words of one of the manufacturers (Mr. Dexter) examined before the Committee on Manufactures in 1828. “It is owing to the improvement in machinery, the reduced price of raw cotton, and the increased skill in the manufacture.” The reduction in the price of the raw material was solely due to the increased supply compared with the demand. The manufacture was already firmly established before the year 1816. As early as the year 1810, there were north of the Potomac fifty mills for spinning cotton in operation, and twenty-five more that went into operation the ensuing year. The weaving business had commenced, but was not so far advanced. Under those circumstances, the improvements in machinery and the gradual acquisition of skill would have infallibly taken place with the common average duty, which was, at that time, about 33% on the value. It is at least doubtful whether the favorable result was hastened by the tariff of 1816, which gave a protecting duty of six cents and a quarter per yard, amounting to 62½% actual, and equivalent to 52% nominal duty ad valorem on the prime cost of the cheapest India cotton goods at that time imported.
A similar fall of price, and owing to the same causes, took place in England notwithstanding the partial competition of East India goods. It is well known that the returns of the official value of British exports, having been fixed long ago, and never been changed, represent the quantities, as the returns of the declared show the actual value of each species of merchandise. The official value of cotton goods exported amounted, in 1814, to £16,535,528, and in 1827 to £21,445,565 ttg. The declared value for those two years, was £17,241,884, and £10,522,357, respectively; but the true value for the year 1814 was, on account of the depreciated currency, only £14,655,601. Whilst the quantity had, during that period of thirteen years, increased near 30%, the value had decreased more than 28%, or, in other words, the price of cotton goods had fallen near one half.
The suggestion that this fall in Great Britain was in any degree due to the competition with the American article, is quite groundless, since it was the result, partly, of the fall in the price of the raw material which operated at the same time on both countries, principally to improvements which originated in England, and were subsequently adopted in America. It would be still more preposterous to ascribe the fall of price in the foreign article to American competition, with respect to such as to iron and sugar, of which we export none, and import greater quantities than heretofore. Omitting the years 1813 to 1816, during which the annual average consumption of imported sugar was, by reason of the war, reduced to little more than forty millions of pounds, the annual average quantities on which the duty was actually collected appear, by the Treasury returns, to have been: —
|For the seven years, 1799–1805, . . .||52,730,000|
|For the seven years, 1806–1812, . . .||54,450,000|
|For the seven years, 1817–1823, . . .||57,630,000|
|For the seven years, 1824–1830, . . .||64,440,000|
We have imported less than if we had not had the Louisiana sugar, but actually more since than before. Louisiana has only supplied our growing wants, and has left the foreign market, so far as the United States were concerned, in the same situation as heretofore. It is the same with respect to iron, to which we will soon advert.
We will only observe here, that the decline of price in the Pittsburg iron, which cannot be ascribed to that of the foreign article, is also independent of the tariff. The iron works of west Pennsylvania were, and still continue to be, protected against foreign iron; and that made within one hundred miles of the seashore, by the expense of transportation, which is still $40, and prior to the last war amounted to $80 a ton. Considerable fortunes were made by the owners of the establishments which were directed with skill, frugality, and a sufficient capital; but there being no competition, the iron was dear, and of inferior quality. The price of transportation was greatly diminished some time after the peace, and the Juniata iron, of a superior quality, was brought to Pittsburg, at the expense of $30, and sold for $100 to $120 a ton. This, united with unfavorable circumstances under which the western country then labored, prostrated the iron works for a while. But there was no intrinsic impediment; and with more experience, by the partial application of coal and various other improvements, the iron business has been revived, and the price of iron, of much better quality than formerly, reduced to about ninety dollars. The competition of the Juniata iron operated, in this instance, in the same manner as if it had been of foreign origin. Had it not been for it, the iron of west Pennsylvania would neither have been improved in quality, or have declined in price. And this effect has been produced without the slightest assistance from the tariff, or any other cause, with the same competition to encounter, and through no other means but a judicious application of skill and enterprise.
The only effect that can possibly be ascribed to a protecting duty is that of encouraging the establishment of manufactures which would not otherwise have existed, or of inducing a greater number of persons to embark in those already existing. The propriety of the duty depends altogether on the probability of speedy success, that is to say, of the manufacture being so far adapted to the circumstances of the country that, after having been assisted by the duty in surmounting the first difficulties incident to every new undertaking, it will be able to sustain itself, and without such assistance to compete with the foreign article. It has been clearly shown that the manufacture is otherwise a losing concern, productive of national loss.
This leads to the important distinction between a permanent and a temporary protecting duty; the first imposing a perpetual tax for the purpose of perpetuating a continued public loss, the other proper only when the prospect of speedy success is nearly certain. For if necessary to be continued for a long while, the loss continued for a period of years may be greater than the object is worth; and it would have been much wiser to wait till the country was better prepared for commencing the manufacture. The question is, how the Legislature, on subjects so complex, is to decide whether there is a probability that the result will in a short time be favorable? We answer, first, that whenever the application is for a gradually increasing instead of a decreasing rate of duties, it is a complete proof that the applicants wish a permanent and not a temporary duty; secondly, that whenever the protecting duty required is exorbitant, this likewise clearly proves that there is not any expectation of a speedy favorable result. It is clear that the protection required must be proportionate to the difficulty of establishing the manufacture, and that the country is better prepared for those which require the least protection. A moderate and uniform duty will naturally encourage these, without the necessity of any special legislative interference, whilst those alone will be postponed which, for the very reason that they require a higher protection, ought not yet to be attempted. Instead of an artificial and precarious system, the progress will be natural, steady, and permanent. The charges on imported articles vary according to their nature, are seldom if ever less than 10%, and sometimes amount to 20%. A general duty of 20% added to those charges would give an actual protection of 30%, much greater than that under which all the usual mechanical arts have been firmly established in the United States; greater than is asked by several branches now suffering under the present partial system, and amply sufficient for the encouragement of any manufacture which there is any probability of establishing successfully within a reasonable time. The duty of 30% substituted in England to the entire prohibition of foreign silk stuffs has, notwithstanding the clamors of those interested, promoted, instead of injuring the British manufacture; and Mr. Hamilton, so often quoted, never proposed a protecting duty of 15% ad valorem.
It has been correctly observed that with the exception of the silk and some thread manufactures, the boasted departure by Great Britain from the restrictive system is nominal, since the former high duties on articles which she affords cheaper than any other country were entirely useless. The reduction of a prohibitory to a duty of 15% proves at least that the price of the domestic article was actually reduced to a rate that did not fear foreign competition. But there is a glaring contradiction between the assertion “that nine tenths of the American people who do not affect foreign luxuries and fashions may be clothed with woollen, cotton, fur, and leather fabrics of their own country better and cheaper than either could have been obtained abroad if the tariff had never been enacted,” and the pertinacity with which the restrictionists oppose the repeal or modification of the high duties imposed precisely on the coarsest woollen and cotton fabrics which are worn by nine tenths of th.e people.
Having examined the restrictive system in reference to the country at large, and considered as a whole, your memorialists will now call the attention of your honorable body to its effects on the various classes of society and different parts of the Union. But they will confine themselves to its most prominent features, and to the most important of the protected branches of industry; and for further details, they beg leave respectfully to refer to the expositions now prepared, or being prepared, by some amongst themselves who have undertaken to collect the facts, and will lay them before Congress.
It is not our intention to discuss the effect produced on the persons employed in large manufacturing establishments. The owners are entitled to much credit for their attention to the comfort, morals, and education of those who are placed under their care. We only contend that there is nothing in that respect which should induce the Legislature to divert the people in general from other pursuits to that of being employed in a manufacture. Operatives in America stand in the same relation towards their employers as those of similar establishments in other countries. The only difference consists in the higher rate of wages they receive; and for that they are not indebted to the manufactures, but to that great cause already often alluded to, and the effect of which is acknowledged by the advocates of the protecting system when they say “that the peculiar advantage of the United States consists in the abundance and cheapness of fertile lands, affording an easy subsistence and high remuneration to labor.” And they might have added that this is the circumstance which keeps up that high remuneration even in those parts of the Union where lands have acquired the highest value. Industry should be perfectly free and every one left at liberty to select that pursuit which in his opinion will most contribute to his happiness. A comparison might nevertheless be drawn between the respective situations, at the end of thirty years, of the working men who have availed themselves of the natural advantages offered by the facility with which the rich unimproved lands of America may be acquired, and of those who have attached themselves to a manufacturing establishment.
But the restrictive system is in every instance injurious to those branches of industry which do not want special protection, and often operates even against the protected manufactures. That system, when artificially enhancing the price of those commodities which are the product of such manufactures, necessarily enhances also the price of the products of every other branch of industry or depresses that of labor. It is clear that the mechanic who pays $20 more for the implements of his trade, the necessary clothing of his family, and the sugar it consumes, must either enhance the price of the products of his industry in the same proportion, or receive so much less for his labor. The nominal wages of the journeyman and of the laborer do now remain the same; whilst the true price of their labor, the compensation they actually receive, has been lessened to an amount precisely equal to the enhanced price of the necessary articles they must purchase. The evil increases as, in order to remove complaints and render the system popular, it is extended to a greater number of branches, and affects in the same manner the protected manufactures by either increasing the cost of production or lessening the real wages of the workmen.
This substitution of nominal for real wages is proved by the evidence taken in 1828 by the Committee of Manufactures. Several of these, and particularly the woollen manufacture of Steubenville, appear to have been sustained by the retail sales of foreign goods connected with the establishment; and the principal profit of the owners to have consisted in that which they made on the goods with which they paid their workmen, and the provisions and other supplies purchased from the farmers. This was a very natural and legitimate process; but it is remarkable that the means used to substitute, as is said, domestic for foreign industry, should have been a much more extensive sale of foreign commodities than would otherwise have taken place.
In trying to reconcile a majority of the people to the system, and for the purpose of obtaining still greater protection, the advocates of restrictions have altogether departed from a principle, the soundness of which is admitted by all, and by none more than by those who would sacrifice every other interest to that of certain favored manufactures. In the face of the example and of the experience of other nations, so strenuously appealed to, they have attempted to promote manufactures, by laying high and sometimes prohibitory duties on the raw materials, — in one instance on that of the very manufacture which was the particular object of their solicitude, in others with a total disregard for the branches which depended on the taxed material.
By the tariff of 1816, a duty of 6¼cents was laid on every square yard of cotton goods, the prime cost of which did not exceed 25 cents; and as the average rate of duties was then about 35%, it was only on goods under 18½cents that the average rate was exceeded. But the law at the same time recognized the principle, that a protecting duty should be temporary; and it was accordingly provided that the minimum should at the end of three years be reduced from 25 to 20 cents, or, in other words, that the duty per square yard should then be reduced to 5 cents on all goods the prime cost of which was less than 20 cents. As if to show that the object is to lay perpetual protecting duties, or a perpetual tax on the community, without any expectation that the price of the protected commodity will be reduced, the provision has in several instances been reversed, and an increasing instead of decreasing scale of duties been adopted. If a duty of $35 per ton was sufficient in order, for instance, that American might compete with foreign flax, no provision should have been made for gradually raising the duty to $60. If a duty of $60 was requisite for that purpose, there could be no expectation that the flax-grower would gratuitously lose money by raising the commodity before that duty was in force. If there was an avowed want of information on the subject, it would have been a wiser course to wait till it had been obtained.
In regard to the manufactures of cotton, it has already been observed that the minimum now raised to 35 cents, instead of being reduced to 20, according to the act of 1816, is the only objectionable provision. This is a duty of 8¾ cents on every square yard, when the prime cost is less than 35 cents. The duly is nominal in reference to most of the goods under 15 cents, which not only are afforded as cheap by the American manufacturer as the foreign article, but compete with this in foreign markets. Reduced to a duty ad valorem, it decreases on goods costing more than 15, and under 35 cents, from about 60% to 25%. We are not informed that any progress has been made since 1828, when this protecting duty was raised from 7½to 8¾cents a yard in the domestic manufacture of unmixed cotton goods within those prices. The mixed stuff called sattinett appears from its price to be protected only by the general duty of 25%, and yet no foreign article is imported that competes with it. The manufacture owes less to protection, and nourishes more than any other favored branch; and it does not affect injuriously any other manufacture, otherwise than by the beneficial substitution, in many instances, of cheaper for dearer articles. We do sincerely believe that the repeal of the minimum would not affect it, and that the average duty of 25% added to the charges on the importation would give it all the protection which the manufacturers ought to desire.
The important objects more particularly objectionable, are: —
Hemp, flax, and some of the manufactures of hemp and flax.
Iron, particularly rolled iron, and a few branches of the manufactures of iron.
Wool, particularly of species coarser than any native wool of the United States, and the woollen manufactures embraced by the system of minimums.
Sugar, salt, and coal.
The small quantities of American hemp which are brought to the Atlantic seaports are now sold at about $150 per ton. The prime cost of the best Russia hemp, delivered on board, is about $130. The subsequent charges amount to at least 18%, and it cannot be delivered in America, free of duty, under $154; the duty is now $60 per ton, or more than 46% on the value. It sells for about $220. The American hemp is fit for the manufactures of common rope and cotton bagging; but, either from the effect of climate, or rather, as is generally believed, from its being dew-rotted, it is totally unfit and is never used for cables or any species of cordage which may come in contact with sea-water. Notwithstanding the heavy duties, equivalent to more than 80% on tarred and 95% on untarred cordage, about 800 tons of that foreign article are still imported. The duty on the raw material has deeply affected the domestic manufacture, and operates as a heavy tax on the shipping interest, without affording, in that respect, any benefit to the American hemp grower.
The duty of 5 cents a yard, equivalent to 50% on the value of cotton bagging, is of the same character. Near 700,000 yards of the foreign article are still imported; substitutes made of cotton or tow have been introduced, and the domestic manufacture is seldom if ever used in the Atlantic States. Cotton bagging is exclusively used, and is absolutely necessary for the purpose of packing cotton for exportation. With respect to that which is shipped to foreign ports, the duty operates precisely as a tax on exports.
Your memorialists are averse to any duty on the importation of raw materials; but if continued, the average duty of 25% ad valorem, or the equivalent specific duty of about $32 a ton on hemp, giving, together with the charges on importation, a protection of near 45%, to the hemp grower, would enable him to compete with the foreign article in every manufacture for which it is fitted, and continue to secure to him the market for cotton bagging, in the district of cotton country adjacent to those where hemp is raised. As a matter of course, the duty on cordage should be reduced to the same rate.
The duty on flax is a still more gratuitous and unnecessary tax. That of American growth is well fitted for all the common fabrics and uses to which it has heretofore been applied; and its comparative cheapness had always prevented any foreign competition in that respect. But it is totally unfit for the manufacture of sail duck; and it was for this purpose that Russian or other foreign flax was imported. The prime cost of that of Eussia generally exceeds $133 a ton, and the charges are the same as on hemp. The duty is now $50 a ton, equivalent to 37½% ad valorem, and it is to be raised to $60, or 45% on the prime cost. The existing duty has been sufficient to reduce the importation to less than three hundred tons. Its only effect has been to affect most injuriously, the domestic manufacture of sail duck, and the shipping interest. Notwithstanding the corresponding duty of about 40% ad valorem, the value of the sail duck imported during the year 1830 amounted to near $320,000, and that of the flax to less than $40,000; and all the ships trading to foreign ports use, as far as practicable, the foreign article. The attempt to apply to that purpose the American flax has been a complete failure, and the duty confers no benefit on the grower.
The manufacture of cast and bar iron was one of the few which had been established in America, under the colonial Government. It owed its origin to the destruction of the English forests, and the abundance of wood in America. The price of bar iron is stated to have been at that time $64 a ton, and to have risen to about $80 in the year 1790. The application of bituminous coal, and other improvements in the manufacture, have produced a revolution, which has increased the annual quantity of malleable iron made in England from seventy to more than six hundred thousand tons, and has enabled her to sell the various descriptions of the species called “rolled iron” at a lower price than that at which any species whatever can be afforded anywhere else. Notwithstanding the acknowledged superiority of that of Eussia and Sweden for certain purposes, the cheapness of the British manufacture has lessened the demand for that of every other country, and seems ultimately to have affected the price of every species. Although it had not, in 1816, been yet reduced to its present rate, Congress was induced to raise, by the tariff of that year, the duty on rolled iron from 15% ad valorem, to a specific duty of $30 a ton, equivalent at that time to about 67% on the value. This was again, in 1828, raised to f 37 a ton, which on account of the progressive fall in the price of that article, is now equivalent, according to the official statement of imposts for 1830, to an average duty of 113½% on the value of the whole amount of the different qualities of that species which are imported into the United States. The specific duty of $9 a ton, laid in 1816, on hammered or Swedish and Russian iron, did not exceed the former rate of 15% ad valorem. It was raised in 1818 to $15, in 1824 to $18, and in 1828 to $22.40, which is equivalent to a duty of 40% ad valorem.
It appears that, notwithstanding those high duties, the importations either of bar iron, or of the total amount of the manufactures of which it is the principal material, instead of being lessened, have gradually increased. The imported quantity of some of the protected branches of those manufactures has diminished; but the whole quantity imported has increased in a still greater ratio than appears by the Treasury statements. These, for the articles paying duties ad valorem, and which constitute nine tenths of the whole, give only the value, which has decreased in a ratio in some degree corresponding with the fall of the price of British iron. The annexed table shows the annual average of the quantities of bar iron, and of the value of hardware, and other manufactures of iron, respectively, consumed in the United States (deducting the exportations from the importations), for each of the periods therein mentioned.
|Years.||Rolled Iron.||Hammered Iron.||Manufactures of Iron.|
|1The quantities for 1817–1820 are those on which the duties were paid, deducting: drawbacks. The value of the manufactures of iron for those years is not distinguished.|
It is difficult to estimate the progress made in the domestic manufacture, during those fourteen years, and the quantity of cast and bar iron now annually made in the United States. In a statement lately made by persons interested in the manufacture, the whole amount of bar is calculated at 112,000 tons, and the aggregate value of both cast and bar at more than $13,000,000; but the quantity of bar iron, taken from actual returns, is less than 50,000 tons, and the residue is an estimate derived from the number of furnaces of which no returns had been obtained. Taking as a basis the returns of the marshals in the year 1810, by which it appears that the quantity of bar iron then made in the United States did not exceed 27,000 tons, and admitting that the increase must have been in the compound ratio of the increase of population, and of the diminution of price, the amount now made should be from 60,000 to 70,000 tons. This is, however, a question, which, from want of authentic materials, we shall not pretend to discuss. But supposing the quantity to be such as has been represented, the estimated value is too high. At the rate of $85 for the bar iron, and of $50 for the castings, the aggregate value would not exceed $11,275,000. Those who ascribe to the tariff the fall of price ought to calculate the value according to that fall, and not according to the price of iron before it took place.
Iron is a commodity too heavy to be transported-beyond a certain distance. It has already been observed that the transportation from the seaports to Pittsburg costs f>40 a ton. The country west of the Alleghany mountains is not supplied with foreign iron; and, with the exception of the small quantities brought from the nearest works on the east side, must, for that article, depend on its own resources. In examining the effect of those duties, either on the home manufacture, or on the consumer, the quantity of iron made in that section of the country, and in several other remote districts, which simply supply themselves, must be deducted. The quantity and price of the imported iron can have no effect but on those districts along the sea border, and within a certain distance from it, where it can be carried, and comes in competition with the domestic manufacture.
We have not been supplied with sufficient data to form an estimate of the quantity of American which thus competes with foreign iron. But we know with precision the amount imported; and so far as relates to quantity, the only fact fully established is, that, notwithstanding the exaggerated protecting duties which they have obtained, the Atlantic iron masters have not been able to supply the wants of the country, and that, so far from effecting this object, there has been a progressive increase in the importation of both bar iron and manufactures of iron. Whether the quantity which they do supply is equal to double or treble of that which is imported does not materially affect the result, in reference either to agriculture, commerce, or the various and important manufactures of which iron is the material. So long as large quantities of foreign iron are imported, the price of the domestic manufacture has not fallen lower than the amount of the protecting duty, added to the price at which the foreign article might be obtained if that duty had not been laid; and the difference in price, which constitutes a national loss and is paid by the consumer or manufacturer, is precisely equal to the amount of that duty. If that duty was reduced $10 per ton, the foreign iron would most undoubtedly be purchased $10 cheaper than it now is.
In order to repel that obvious fact, the parties interested have been compelled to assert that the fall of price which has taken place in foreign iron is due to the tariff. They insist that the effect of that measure was to cause a decline in the price of American iron, and that the foreign iron masters were thereby compelled to reduce the rate of their previous enormous profits, in order to be able to sell their iron in America. They go still farther, and assert that no sooner had the tidings of the tariff of 1828 reached England, than the owners of forges and furnaces determined, rather than lose the American market, to lower the price of their iron, at first $4 and then $8 per ton. The annual quantity of British bar iron imported into America during the six preceding years did not amount to 6,000 tons, worth at that time $260,000. The total amount made in Great Britain exceeded, at that time, 600,000 tons; so that the British iron masters, rather than lose the profit they might make on a sale of $260,000, must have determined, by a general reduction of $8 a ton, to incur at once a loss of near $5,000,000 a year. It is hardly necessary to argue this point. If even the decline of price had commenced in America, it is impossible that any differences affecting the sale of 6,000 tons could have any effect on the price of a mass of iron amounting to 600,000, and annually increasing. But no fact is better ascertained than that of the gradual — and, with the ordinary fluctuations incident to trade, continued — fall of the price of British iron. It must be remembered that the tariff of 1828 made no change in the rate of duty on the Swedish and Russian. We are less acquainted with the causes of the fall in their price. The most obvious is the great supply furnished by England to those nations that have not, like France and the United States, prohibited or heavily charged her iron, and which must have necessarily lessened the demand for the dearer article imported from the Baltic.
The supposition, that the decline of the price of American, instead of being the necessary result, was the cause of the fall of the price of Baltic, and even British iron, rests, besides, on another supposition, to wit, that the tariff did, immediately, and even before any new works had been erected, produce the fall in the price of American iron. This needs no elaborate refutation; but we may be permitted to ask an explanation.
In the beginning of the. year 1828, when American iron sold at $100 in our seaports, the American owners of forges and furnaces declared themselves unable to compete at least with British iron. Now the importation of neither that or any other of foreign origin had lowered for a number of years the sale of theirs below that rate; and it is evident that, in asking for further protection, their object was not to cause a fall in the price of their commodity, which, according to all their statements, they could hardly afford at that rate. It was on that account that the additional protecting duty of $7 on rolled iron was granted, although at the then existing rate of duty, the interference of that species did not amount to 6,000 tons a year. The price of the same American iron has now sunk, for near two years, in our seaports, to $85 a ton. With this diminution the iron masters are satisfied; the business, as they say, has increased 25%, and new works are being created everywhere. During that time, neither the price of labor, charcoal, provisions, or other supplies, has been diminished. To what cause, then, is the fall of price to be ascribed? We have heard of no improvement made in the manufacturing process in the charcoal country; but whether this has taken place or the profits have been reduced, it is equally clear that this might have been voluntarily done without the additional tariff, and has been done because the tariff had no effect on the importation, and was forced on the iron masters by the unexpected fall of price in the British and other foreign iron.
We need not dwell on the injustice and mischievous effects of an exaggerated duty on an article of such general use as iron. It falls upon the farmer, the mechanic, the shipping interest, and on every branch of the iron manufacture, those few excepted which have been embraced by the partial protecting system; and it operates, in the most unequal and unjust manner, on those parts of the country which have no iron of their own, and might be supplied on cheaper terms under a rational system of moderate duties. The only reason why the extravagant duty is not universally opposed is because the tax thus laid on the agriculturist and the mechanic is spread over such an extent of country, and falls upon so many, that the amount paid by each, levied as it is indirectly and in small portions at a time, is not generally understood. Those who do understand and feel it have not individually a sufficient interest in the result to induce a general and efficient combination. The law has created a monopoly in favor of the owners of beds of ore, who, unable to supply the wants of the country, will not permit it to be supplied from other quarters. They may easily combine, and their interest, when compared with that of the mechanics and scattered agriculturists, has, here as elsewhere, been found too powerful. This is so true that when an equally or more powerful interest was opposed to theirs they were obliged to yield, and the importation of iron intended for railroads was permitted under the moderate duty of 15%. We approve this measure as being founded on the best interests of the country. We only ask that the same principle be applied to the community at large. There is no other difference between this case and that of agriculture, or any other important branch of industry, than that, in one case, the amount of the tax, presented as a whole, made its pernicious effects at once visible, whilst divided, in the other, amongst 50,000 individuals, the aggregate, though equal in amount, does not attract notice.
The injurious effect which the duty has on the numerous mechanics employed in the various manufactures of iron has been so ably and forcibly exposed in their representations to your honorable body, that we have nothing to add on that subject; but, as we beg leave respectfully to refer to their memorials, we must do it with one exception. So far as we are informed, we are induced to believe that they have overrated the quantity of iron contained in the hardware imported into this country, — an error which, if it is one, does not weaken their arguments respecting the main question at issue. The leading facts are, that amongst the foreign manufactures imported into the United States, hardware, cutlery, and all others of which iron is the material, are exceeded only by those of cotton, woollen, and silk stuffs; and that the prime cost of the quantity annually consumed amounts to $3,500,000, whilst that of the bar iron imported from England, whence the manufactures of that metal are almost exclusively imported, does not amount to $240,000. Whatever may be the quantity of bar iron used in the manufacture of the hardware and other articles thus imported, it interferes equally with American bar iron, whether imported as a raw material or in its manufactured state. If the quantity thus used does not, as is asserted, exceed 9,000 tons, the prime cost of which is less than $350,000, the duty which prevents its importation arrests the progress of those branches of industry which would otherwise convert that raw material into manufactured articles, worth $3,500,000. The working men, who are able and willing to apply their labor to this highly desirable and truly profitable object, do not ask your honorable body for any extraordinary protection, but only that the impediments arising from an extravagant protecting duty on the raw material may be removed. There cannot be a stronger illustration of the effect produced by the restrictive system in arresting the natural progress of American industry, and diverting it from profitable to unprofitable pursuits. The remedy proposed by the restrictionists, like that of those legislators who never can find any other for the prevention of crimes than to multiply the number of offenses for which capital punishments shall be inflicted, is to extend what they call protection to those who suffer under the pernicious effects of their system. They simply propose to aggravate the evil and to increase the amount of the national loss, and of the tax paid by the consumers, by converting that branch of industry which can sustain itself and would prosper, were it not for their interference, into another privileged manufacture, which must be supported at the public expense, and could not then supply the wants of the country.
The average prime cost of the hammered iron imported during the year 1830 was, according to the treasury statements, $57 a ton, or $7 less than the average price of the five preceding years. The charges amount to $10, and, with a duty of 25%, it could not, at that rate, be delivered in our seaports for less than $82. Its average price in New York during that year was $91, varying from $85 to $100.
The average prime cost of the various descriptions of rolled iron imported during the same year was $32.50; the charges may not amount to more than $3.50. Its average price in New York during that year was $74.50. Under a duty of 25%, it might, at the same prime cost, be delivered in our seaports at $45 a ton, and the inferior qualities at a lower price. The principal, and, as it appears, a permanent cause of that reduced price is well known to consist in the comparative price of fuel.
In Staffordshire, seven tons and three quarters of bituminous coal, costing $8 to $9, are necessary to convert the sufficient quantity of ore into a ton of bar iron. It appears by the evidence taken by the Committee on Manufactures in 1818, that about five hundred bushels of good charcoal, costing $27, were necessary to make a ton of Juniata bar iron. The expense in New Jersey for the same object is stated at $42. The average difference of cost between charcoal and bituminous coal iron appears on that single item to amount to $24 a ton. It seems impracticable that iron made with charcoal can ever compete in cheapness with that made with bituminous coal. To persevere, therefore, in the attempt, through the means of a duty which exceeds 100% on the value, is to impose a perpetual tax on the community for that purpose. It is not a temporary duty imposed under an expectation that competition will ultimately reduce the price. After every possible improvement shall have been introduced, the utmost skill applied, and the profits been reduced to the lowest rate, the difference of price arising from that in the price of fuel will still remain. A happy application of anthracite coal to the manufacture of iron, the discovery of new beds of bituminous coal, the erection of ironworks in the vicinity of the most easterly beds now existing, and the improved means of transportation which may bring this at a reasonable rate to the sea border, may hereafter enable the American iron master to compete in cheapness with foreign rolled iron in the Atlantic districts. On those contingencies the tariff can have no effect. To persist, in the present state of the manufacture, in that particular competition, and for that purpose to proscribe the foreign rolled iron, is to compel the people to substitute for an indefinite time a dear to a cheap article.
It is said that the British imported iron is generally of an inferior quality; this is equally true of a portion of that which is made in America. In both cases, the consumer is the best judge, has an undoubted right to judge for himself, and should not be prevented by any artificial means from selecting the species he prefers. Domestic charcoal iron should confine itself to a competition with the foreign iron made with the same fuel. Since this is of a superior quality, the object here should be to improve the quality. There is no reason why, by using the proper means, American iron made with the same materials may not, for most purposes, compete with that imported from the Baltic, with a protection which, including charges, would not fall short of f 24 a ton. In order, however, to lessen the immediate effect of too great a reduction of the duties on rolled iron, your memorialists would respectfully suggest that the distinction now made, and exceptionable in other respects, between rolled and hammered iron, should be abrogated; and that an equal duty of about $14 a ton, corresponding with a duty of 25% on the value of the whole amount of both species now imported, should indiscriminately be laid on every species. This is one of the cases in which the duties may be arranged with propriety and convenience, without varying materially from the principle of a uniform duty.
Your memorialists believe that the ultimate reduction of the price of American to that of the British rolled iron can duly, and ultimately will be accomplished in that western region, which abounds with ore, and in which is found the most extensive formation of bituminous coal that has yet been discovered in any part of the globe; and this also lying so near the surface of the earth, as to render the extraction of the mineral less expensive than anywhere else. But a considerable period of time must elapse before the wants of a population that increases with such unparalleled rapidity can be fully supplied; and, in the mean while, the western country is not, in any degree, affected by the duties on that article.
The duties on hemp, flax, and iron, are all injurious to the shipping interest. Those paid on a ship of five hundred and seventy five tons, built in the city of New York in the spring of 1831, were as follows: —
|Hemp, 29,288 Ibs. of tarred and untarred cordage||$1,199 98|
|Flax, 3,337 square yards of canvas..||333 70|
|Iron, 22,612 Ibs. cables...||678 36|
|6,121 Ibs. anchors...||122 42|
|Tons, 17 18 2 5 in hull and spars, near ⅓ Russian,⅔ English....||576 77|
The same duties on a ship of 518 tons built in Boston are rated at $2,653; adding those on bolts, spikesj lead, paint, oil, etc., which on a vessel of that class amount to about $600, the total amount is near $6.25 a ton. Reduced to a duty of $14 a ton on the iron, and of 25% on the other articles, they would amount to less than $2.25. The extra or protecting duties impose a tax of $4 a ton on all the ships intended for the foreign trade that are built in the United States. Those ships may be computed to last ten years; and the tax on the construction, with interest and insurance, is equivalent to an annual tax of forty-two cents a ton. An equal sum must be added for the extra duties paid on the purchase of new sails, and that portion of the annual expense that consists of dutied articles. This annual tax of eighty-four cents is equivalent to a tonnage duty of more than fifty-six cents a ton on each voyage, since the whole registered tonnage amounted, at the end of the year 1829, to 650,000, and the whole that entered the ports of the United States during the year 1830, to 967,000 tons. From that indirect tonnage duty, foreign vessels entering the ports of the United States are exempt in whole or in part, according to the system of duties adopted in the countries to which they belong. Those duties are much lower in England, and the vessels of the Hanse towns are not subject to any. It is only by the greatest application of skill and intelligence, as well to all the various branches of industry employed in shipbuilding as to the art of navigation, that the United States vessels are able to compete with those of every other nation. The symptoms of an unfavorable change in the proportion between American and foreign tonnage employed in the American trade, and of an actual diminution in that of America, deserve serious attention, and may be fairly ascribed to the pretended protecting system which imposes on it an annual tax of $540,000. The same protecting duties impose a similar tax on the coasting tonnage, though less in proportion, the vessels in that branch using a less quantity of taxed articles; it falls on the consumer, but does not materially interfere with the American navigation.
The laws which regulate the coasting trade have, in imitation of those of all other nations, given its monopoly to the American ship owners, without accelerating the increase of its amount. Such is the situation of the United States, in relation to all other countries, that the effect of this monopoly has ever been, and continues to be, almost nominal. It is believed that the coasting trade of the United States might be opened to all nations without sensibly affecting the American shipping interest; and it will be admitted that a protection against foreign interference not greater than that which is extended to every other branch of American industry, or a duty of 20% on the freight, would in this instance be prohibitory. But the American navigation employed in the foreign trade does not require or ask any special protection, and complains only of that inequality which is produced by the laws of the United States.
It has been asserted that the growth and prosperity of that navigation were due to the protection afforded by the former discriminating duties on foreign vessels. That protection did not exceed that which by the then existing duties had been given to every other branch of American industry; and it is notorious that its rapid increase between the years 1793 and 1811 was due much more to the general European war and to the neutrality of America than to the discriminating duties.
The first complete return of the registered tonnage is that for the year 1790, when it amounted to 346,000 tons. Those returns are generally liable to the same objection as those for the coasting tonnage. The amount of registered tonnage for the year 1828 was stated at 812,000 tons, when, in reality, according to the correction since made at the treasury, it was but 656,000 tons; and there was an actual decrease of 6,000 tons during the year 1829. In a period of thirty-nine years, while the population has more than trebled, the American navigation employed in the foreign trade has only increased 88%. If we could be tempted to argue in the same manner as some of the advocates of restrictions, we might recur to the official returns and assert that in the year 1801 the registered tonnage amounted to 718,000, and, on account of the treaties of Amiens and Luneville, fell at once, in the year 1802, to 560,000 tons; but we happen to know that the amount was corrected, and is truly stated for 1802, whilst that stated for 1801 and the immediately preceding years was erroneous and exaggerated. We have also been informed that the great apparent diminution, from the amount stated for the year 1817, at 809,000, to 606,000 tons in 1818, is owing to a similar correction, which took place in the last-mentioned year. We then find that, from 1790 to 1793, when the general European war commenced, the registered tonnage had increased from 346,000 to 367,000 tons, or at the rate of 7,000 tons a year; between 1793 and 1802, from 367,000 to 560,000 tons, or at the rate of more than 21,000 a year; and between 1818 and 1828, from 606,000 to 656,000 tons, or at the rate of 5,000 a year. The comparative rate of increase during the second of those periods sufficiently shows the much greater effect produced by the neutrality of America during a general war, than by any other cause whatever. No comparative inference can be drawn from the period extending from 1802 to 1818, as it embraces years of neutrality, of war with England and of general peace. The increase for those fourteen years was only 40,000 tons; but, notwithstanding the general incorrectness of the intermediate returns, they show, at least, that there had been a continued and great increase as late as the year 1811, the return for which was, it is believed, also corrected. A still more forcible view of the subject is exhibited in the comparative amount of American and foreign tonnage annually entered into the ports of the United States, from the year 1790 to this day, respecting which reference is made to the returns and reports already before Congress.
But the discriminating duties were not at all intended for the purpose of excluding foreign navigation from a fair and equal competition with that of the United States, in the transportation of the objects of commerce between them and foreign countries. Those duties were avowedly retaliatory, and intended for the purpose of inducing those nations to repeal the duties of a similar nature, which they had imposed on the American navigation. Their sole object was “free trade;” and the object has been attained, because, in that case, the means are adapted to the purpose, inasmuch as the retaliation operates directly on the subject of contention. Treaties or arrangements, founded on reciprocity, and establishing a perfect equality, have been substituted to the discriminating duties, by which that object was but imperfectly obtained. When the complaint is made that this happy state of things is disturbed, and that an inequality injurious to American industry is the result of the acts of our own Legislature, the restrictionists, who consider their panacea as a universal remedy, coolly answer that further protection shall, if desired, be extended to the American navigation; that is to say, that, still leaving the evil now complained of to operate, the discriminating duties which cannot remove it shall again be reinstated, and the convenient existing compacts shall be abrogated.
The duties on woollen manufactures in general, were, by the tariff of 1816, fixed at the rate of 25% for the term of three years, after which they were to be reduced to 20%; but this last limitation was, in 1818, postponed till the year 1826. Blankets, worsted or stuff goods, and unmanufactured wool, remained subject to the duty of 15% ad valorem.
By the tariff of 1824, the duty was raised to 25% on worsted stuff goods and blankets; and to 33⅓% on flannels and baizes of any price, and on all other manufactures of wool, the prime cost of which exceeded cents per square yard; those not exceeding that price remained charged with the duty of 25%. By the same law, the duty on wool, unmanufactured, was raised to 20%, increasing after two years to 30% ad valorem, but that, the prime cost of which did not exceed ten cents per pound, remained charged with the duty of 15%.
Wool had never been imported free of duty; and when that on woollen manufactures was being increased by the tariff of 1824, it was natural for the agriculturists, whose interest has, in every country, so often been sacrificed to the combinations of manufacturers, to seek an indemnity in a protecting duty on the corresponding agricultural product. That fixed by the tariff of 1824 was also below the average rate of duties, and no otherwise objectionable than as a tax on a raw material. Experience, however, soon proved that this measure was founded in error, and had depressed instead of promoting the manufacture intended to be protected.
The manufacturers, examined by the Committee on Manufactures in 1828, generally agreed in stating that their business was in a more flourishing state before than since the tariff of 1824; and that the unfavorable change was in a great degree due to the increased duty on wool. Some of them asserted that they could manufacture cloth as cheap as in England, provided they could obtain the raw material on the same terms. This should, it seems, have pointed out the true remedy. That adopted by the restrictionists was, first, to impose on the lower-priced coarse wool, which this country does not produce, and had been excepted from the provisions of the tariff of 1824, a duty varying, in inverse ratio of the prime cost, from 90% to 150%, and, of all the other species, a duty varying, in the same inverse ratio, from more than 50% to 90%; and, secondly, to raise the duties, particularly on flannels, baizes, and cloth of every description, to a rate corresponding with that on the wool, in some instances exceeding 200%, and on the uniform principle that the coarsest and cheapest articles should be charged with the highest duty in proportion to their value. It does not appear that a true and efficacious remedy can be found against that intolerable grievance, without either modifying and considerably lessening the duty on wool, or abandoning altogether the woollen manufacture.
The profit on raising sheep must depend on the cost of winter feeding, the price of the meat, and the quality of the wooL The severity of our winters gives an advantage, in the first respect, to many countries, and particularly in England. As mutton can be used only as fresh meat, its consumption and price uniformly depend on the vicinity, the number and the population of towns and villages; and that item forms, accordingly, a much less portion of the profit in the greater part of the United States than in most parts of Europe. It will, it is believed, be universally admitted that sheep cannot be profitably raised in the United States, unless the price of the most common, or what is called native wool, be at least twenty to twenty-five cents the pound. Flannels, therefore, and the coarser kinds of cloth, never can be afforded at a reasonable price by the American manufacturer, unless the low-priced wool with which those articles are made everywhere else, and which cannot be profitably raised in America, shall be imported free of, or under a very moderate duty. These are the species which now pay from 90% to 150% on the value. The prime cost of Smyrna wool is less than ten, and that of Buenos Ayres less than four cents a pound. They now pay, at those rates, nine cents and six cents, respectively.
It is evident that the only means by which the raising of sheep can be rendered truly profitable is by improving the breed, and the quality of the wool. This is what has been done in Prussia, several parts of Germany, and particularly Saxony, under a climate as severe as that of the Middle States; and, in many instances, in districts where nearly the whole profit arises from the sale of the wool. This has also been done without any special protection, and with such complete success as to rival, and in the finest kinds to supersede in foreign markets, the first-rate wools of every other country. There is no reason why the same result may not be obtained in the United States by the same means. There is no reason why the American farmers, decidedly superior in intelligence and activity, should not succeed as well as the inhabitants of a country which enjoys no superior advantage in any other respect. All that is requisite is that they should apply their skill to objects within their reach, and attend to quality rather than to quantity. When, through the artificial aid of a duty which, including the charges on importation, amounts in every instance to more than 60%, sheep are suddenly multiplied, without much regard to the quality of the wool, the superabundant quantity soon gluts the home market; and as, so long as no improvement has been made tending to reduce the cost of production, it cannot be exported with profit, a great and ruinous depression of price necessarily follows. We find, accordingly, that notwithstanding the exorbitant duty on importation, the price of American wool, as taken from the New York prices current, was lower in the years 1828 and 1829, and during the first part of the year 1830, than it had been during the preceding years.
|1826||33 to 62½ aver. 48||28 to38 aver. 30|
|1827. . . .||30 – 45 – 40||20 – 30 – 25|
|1828. . . .||30 – 45 – 41||18 – 30 – 24|
|1829. . . .||32 – 38 – 34||18 – 25 – 21½|
|1830, Jan. to June||30 – 40 – 34½||16 – 25 – 19½|
|— July to Dec.||35 – 60 – 46||20 – 30 – 25|
|1831 . . . .||35 – 70 – 54½||20 – 35 – 27½|
The late rise will not, from present appearances, last long; and frequent depressions are the necessary consequences of an illusory encouragement, and a single and limited market.
When we are told of the consumption of woollen goods in the United States amounting annually to $60,000,000 or $70,000,000, this includes not only all that is imported, but that large quantity of household manufactures with which five-sixths of the population of the United States, at least north of the Potomac and Ohio, have always been clothed. These, made of the native wool, within the families of the farmers, are in fact “so much saved,” and far more important, useful, and profitable, than all the recent factories; but they are neither affected by the price of wool, nor form any part of the home market for it. The following table shows the average annual value of the imported woollen goods, of every description, which have been consumed in the United States during the last ten years, viz.: —
|Years.||Flannel∗.||Clothiand Cutaurei.||All other.||Total.|
The manufacturing establishments cannot, at most, have increased their supply beyond the void occasioned by the decrease of foreign imports, or about $3,000,000 a year, and probably much less; as it is very improbable that, under highly increased prices, and with substitutes at hand, the consumption of woollen goods should not have been considerably diminished. If they have superseded any portion of the household manufactures, this has not increased the quantity of wool required! That wanted for the increased supply of $3,000,000 worth of imported goods, chiefly broadcloths and casimeres, and which the manufacturers probably sell for $1,000,000 more than the imported articles would have been sold for under the former 25% duty, cannot exceed 6,000,000 pounds; of which 1,000,000 pounds a year was still imported in the years 1829–1830; 5,000,000 pounds is, therefore, the utmost amount of the increased supply of domestic wool for which the manufacturing establishments have given a market since the year 1824.
The object of the wool-growers is, that that market should be enlarged; but this cannot be done effectually, unless the domestic manufacture is firmly established; and, for that purpose, it is necessary that the raw material should be obtained on reasonable terms. To enhance its price by persevering in the existing exorbitant duties, is not less inconsistent with sound policy than with justice. It is impossible that the present system of minimums can be sustained; and it is the true interest of all the parties concerned that the duties on wool, as well as on the manufactures of wool, should be considerably reduced. A domestic manufacture may often be advantageously prosecuted, though the raw material should at first be procured from abroad. Throstling mills are already established, which are employed on foreign silk. It is not perceived that there is any more difficulty in establishing silk than woollen manufactures; and if this was successfully attempted, it would be a most wretched policy to lay a duty on foreign, in order to encourage the cultivation of domestic silk, although every one acknowledges the practicability and high importance of adding this to our agricultural products. The value of the hides and raw skinS imported free of duty, and consumed in the United States, has for the last nine years exceeded $1,800,000 a year. It is evident that if, in order to protect the raising of American cattle by giving an additional value to the hide, a high duty had been laid on those imported, the domestic manufacture of leather in all its branches, instead of being in its present flourishing state, would have been most materially injured, and we should have been obliged either to import from Europe, or to purchase at exorbitant prices, all those articles which it now supplies at a moderate rate. The reduction in England of the duty on foreign wool to four cents a pound has caused a fall in the price of woollen goods, without injuring the wool-grower at home. The free introduction of the species not raised here would, by encouraging the manufacture generally, ultimately enlarge the market for the domestic wool. It is the only way to introduce the manufacture of blankets, and to reduce the price of home-made flannels and of the coarser species of cloth.
The manufacturers asserted, in 1828, that they were materially injured by an extraordinary influx of foreign goods, which has been shown not to have taken place, and by presumed frauds on the revenue, of the existence of which at that time no evidence has ever been given; and they declared that the domestic manufacture could not be efficiently protected unless the imported woollen goods were charged with a specific duty. The extraordinary system of minimums grew out of that suggestion. By the tariff of 1828, the duty on blankets and hosiery was raised to 35% ad valorem; worsted goods remained at 25%; a specific duty was laid on carpets, equivalent to an ad valorem duty of about 60%; and that on ready-made clothing, and on the other woollen manufactures, the prime cost of which exceeds $4 the square yard, was increased to 50% on the value. All the other manufactures of wool, or of which wool is a component part, were divided into five classes, on which, although the name of a duty of 45% ad valorem was preserved, the following specific duties per square yard were respectively laid: —
- 1. On those, except flannels and baizes, the prime cost of which does not exceed 33⅓ cents the square yard, 14 cents.
- 2. On all flannels and baizes, the prime cost of which does not exceed 50 cents, and on all other goods the prime cost of which is from 33£ to 50 cents the square yard, 22½ cents.
- 3. On all those, the prime cost of which is from 50 cents to $1 the square yard, 45 cents.
- 4. On all those, the prime cost of which is from $1 to $2.50 the square yard, $1.12½.
- 5. On all those the prime cost of which is. from $2.50 to $4 the square yard, $1.80.
Those several rates are equivalent to ad valorem duties, varying, in the first class, from about 80 to 42%, in the second, including baizes and flannels, from 200, in the third from 90, in the fourth from 112£, and in the fifth from 72 to 45%. The duty is, in each class, invariably laid in inverse ratio of the prime cost, that is to say, that, in each class respectively, the lowest priced cloth is charged with the highest duty. Flannels and baizes were excepted from the first class, in consequence of which the cheapest sorts are charged with a duty equivalent on the low priced flannels to 100, and on the cheapest baizes to more than 200%.
It is easily perceived that the true object of that outrageous system was not, as was alleged, to prevent frauds, but to give to the manufacturer the exclusive monopoly of the lower priced woollen goods in each class respectively. So far from preventing frauds on the revenue, the temptation to commit them has evidently been greatly increased by that system; and there is the same difficulty in determining by an appraisement the class to which the imported article belongs, as there was before in ascertaining the value. Specific duties can be laid only on commodities which are nearly of the same value, or between the several species of which there is an obvious and distinct difference.
The woollen tariff of 1828 is the masterpiece of the ultra restrictionists, and exhibits all the worst features of the system. The most conspicuous is the total and blind disregard for every other consideration, for any other interest but that of the privileged manufacture. After having made certain classes at random, without the least inquiry whether the manufacturer was able or prepared to supply the species in each class of which that arrangement gave him the monopoly; after having sacrificed, without mercy, the poorer classes of society, and compelled the less wealthy in each class to purchase the more expensive kinds of cloth, which, coming nearer the minimum, could alone be imported; after having blindly neutralized, by the exorbitant duty on wools, the benefits intended to be conferred on the American manufacturer, it is not astonishing that no attention should have been paid to the vexations and losses imposed on the American importer, to the comparative advantages resulting to the foreign importing manufacturer, and to the demoralizing effect of the law.
The return of a general peace necessarily gave to the subjects of foreign nations a share in the importing commerce of the United States. The British manufacturer, particularly, is anxious to send abroad, without calculating or regarding the wants of the country to which he exports, all the goods for which his home market and the regular foreign demands do not afford a vent, and which he cannot, without great injury to himself, keep beyond a certain time. This irregular trade promoted, and in its turn has been greatly encouraged by the general system of public auctions. The importations from England were, before the tariff of 1828, about equally divided between the American importer and the British manufacturer, who, though the whole amount of the woollen branch is curtailed, engrosses now more than two thirds of what is still imported. This was an unavoidable consequence, both because he pays less regard to the loss arising from an improvident importation, and on account of the strong temptation under the system of minimums to undervalue the merchandise. Under moderate duties ad valorem, frauds on the revenue of that description are rare, because a great alteration is easily detected, and the illegitimate profit made by one that may escape detection is inconsiderable. But, when by such as the most vigilant and skillful appraisers or other officers find it extremely difficult to ascertain, and respecting which they often differ, the goods are thrown into the next inferior class, and a profit of $1 made on the running yard of broadcloth, those over whom we have no control, and who may be destitute of principle, will make the attempt.
With the most earnest desire that frauds should be prevented, your memorialists will however observe, that the effect of those which have been committed, and which they have no wish to disguise, has not been to reduce the price of the goods, and in that respect to lessen the protection given by the tariff to the manufacturers. The amount ascertained is comparatively small, and the cloths fraudulently underrated have been sold at the same rate as those of similar qualities which were fairly imported. These have been sold with some profit in spite of the high duty; and no other general reduction in the price of woollen goods has taken place in the United States, than that which has been the consequence of the fall, during the two last years, in the price of the British manufacture, — a fall due to the combined effect of a lessened demand, and of the free importation of foreign wool in that country. But the existing laws are, under the protecting system, equally vexatious to the fair importer, and inefficient for the prevention of frauds.
The great revenue derived from duties on importations, had heretofore been collected with facility and the utmost fidelity. This result, almost exclusively due to the probity of the American merchants, to the sanctity of oaths, and to the moral feeling of the country, does not seem to have been sufficiently appreciated. The new regulations are general: each package must contain none but goods of the same value; but passing over this, and others of a similar nature, which can hardly be carried strictly into effect, the American importer, of the most unblemished character, is liable to the insufferable grievance of having his goods subjected to a critical and very uncertain appraisement of their presumed value abroad, after having been required to declare, under the solemnity of an oath, the price at which they were actually purchased. On the other hand, merchandise is imported on foreign account, to order as it is called, when the nominal consignee can only certify that he has no other invoice than that produced at the custom-house; and nothing is required from the owner or his real agent. It is impossible to place reliance on the valuation given by parties interested, over whom, personally, neither the laws or public opinion have any control, and who are not bound to the country by any tie of patriotism or common interest. The requirement of oaths and the system of appraisements are irreconcilable. If no other remedy can be devised, it would be preferable either to have all the imported merchandise appraised according to its value in the port of importation, provided uniformity of valuation in the several seaports can be secured; or, as is said to answer the purpose in other countries, to let the importer declare the value, with the reserved right to government to take the goods at a small advance upon it.
These difficulties might all be avoided by an abandonment of the system of high duties. Yet, frauds may be prevented by a rigorous inspection, and provision may be made against mere evasions. There can be no difficulty in preventing the importation by a merchant, of bar iron under some disguised name or form, or by a manufacturer, of ready dyed woollen yarn, which happens to pay a less duty than wool. What is only an imperfection in the system may be corrected. But there are certain limits in the rate of duties which no government ever can exceed with impunity. If fraud has been suppressed, smuggling invariably takes place, whenever the risk of seizure, added to the ordinary charges of importation, is less than the difference between the respective prices at the place whence imported and that at which the smuggled article is delivered. That risk is calculated in the same manner and with more certainty than that of capture in time of war. In all countries where the prohibitory system prevails, the business is properly subdivided and carried on as regularly as any other; and the advance paid by the importing merchant on the prime cost is known to everybody, and designated by the name of “premium on contraband.” The insular situation of Great Britain, and the “preventive service” in which a portion of her naval force is employed, have not protected her against that evil, to which no efficient remedy can be found but a reduction of the duty. We may affirm from an authentic source, that, according to the calculation of those who have the best means of information, not more than one half of the French brandy consumed in England pays the duty.
In France, the number of persons employed in the collection of the customs, consisting principally of inspectors or tide waiters, or those who perform the same duties on the land frontier, has been officially stated to amount (deducting 3,000 employed on the salt excise) to more than 23,000. The premium on smuggling generally varies according to the value of the article, from 5 to 25%. It has been repeatedly acknowledged, and its amount stated by the organs of the government, in their official communications to the legislative body. More than four fifths of the finer sorts of spun cotton used by the French fabrics of muslin are smuggled from abroad; and government, as a proof of its vigilance, asserted that the premium paid by the manufacturer had been raised on that article from 25 to 40%. It may be added that fifty years ago the number of persons employed in suppressing contraband in France amounted, as now, to 23,000; and that a minister who, so far from belonging to what is called the modern school of theorists was desirous to prevent, as far as practicable, the introduction of foreign manufactures, considered a duty of 15% ad valorem as the limit beyond which illicit importations could not be prevented. The facts are notorious, denied by no one, and occur whenever the duties are too high. If inquiry is made, why then a duty equal to the premium is not substituted, the uniform answer is, that the combination of the persons interested is too powerful: in England, the West India interest, and the Scotch distilleries; in France, the union of the various manufacturers, and sometimes of certain descriptions of landholders. Thus, when it was lately suggested by the iron-masters of the northern departments that the prohibitory duty on iron might be reduced, provided that on the coal of Belgium was repealed, this was successfully opposed by the owners of forests in the vicinity, and of distant coal mines, who declared that no measure could be more ruinous to France; whence it may be concluded that the acquisition of Belgium would have been a great misfortune to her. But if it is asked, why the manufacturers prefer the prohibition to a duty equal to the premium on smuggling, it is because they know that the amount fairly imported is, on payment of the same duty or premium, always greater than that which is smuggled; and that, callous to any other consideration than their own interest, they are careless of the effect produced on the habits of those actually employed in smuggling, and on the moral feeling of the community. Those habits may engender as many crimes as the game laws; custom-house oaths may be daily violated, and become a by-word; still the protecting system must be preserved.
The extensive land and sea frontier of the United States offers more facilities for smuggling than are found in almost any other country; and unless sustained by the community, government will find itself unable to prevent it. Public opinion and reverence for the law may, for a short time, prevent the evil from reaching its full extent; most American merchants would rather withdraw from business than receive goods on which the duties had not been paid. But their place will be filled by others less scrupulous. If cupidity could induce even Americans to engage in that most nefarious of all pursuits, the slave trade, adventurers will never be wanting to carry on an illegal trade whenever it ceases to be disgraceful in public opinion. It affords no apology to the offender; but government is responsible for the offenses which are the necessary consequences of its legislation, and that system cannot be too much reprobated which has an unavoidable tendency to corrupt the moral feeling of the community.
The cultivation of sugar in Louisiana was not due to any special protection, but grew out of that which was incidentally given by the revenue duty of two cents and a half per pound. An additional encouragement was unfortunately given in 1816 by raising it to three cents. Whatever may be the difference of opinion on that subject, the statements given by the planters and laid before Congress are perfectly fair, and give all the necessary information. It appears clearly that, with the exception perhaps of the most southerly part of the State, the climate renders that cultivation so precarious that without the assistance of a protecting duty it cannot be carried on profitably. The expenses even in seasons that were not unfavorable, are stated at three cents and a half a pound. The great value assigned to the capital laid out, and which consists almost exclusively of land and slaves, is clearly due to that particular cultivation and to the duty in which it originated. But if that value was even reduced to one half of the estimate; if the slaves, instead of $600, were only valued at $300, which was probably the price actually paid by Louisiana, it appears quite improbable that, with the exceptions already made, the profits should be sufficient to enable the planter to persevere, without the assistance of some duty, in raising sugar, during the general depression in the price of that commodity.
The annual average quantity of imported brown and clayed sugar, on which the duty was collected during the years 1826–1830, amounts, after deducting the drawbacks, to 65,000,000 pounds. The average crop of Louisiana during the same period of years, does not appear to have amounted to 60,000,000. There is not the slightest probability that the quantity wanted for the consumption of the growing population of the United States can at any time be supplied by Louisiana, and the other districts where the cultivation of the sugar cane may be forced. Should it reach that point by a temporary increase, much more rapid than that of the population, it would be but for a short period. But not even during such period, or at any other time, would the price paid by the community be reduced, since this could only be effected by a reduction in the cost of production, which is impracticable.
The question therefore is, whether, when this high duty is no longer wanted for the purpose of revenue, a tax amounting now to 100% on the value, and in the whole to more than $2,000,000 on an article of food, which as a necessary of life stands next to bread and meat, shall be laid in perpetuity on the people of the United States, in order to render the labor of twenty thousand slaves more profitable to their owners than if applied to some other species of cultivation, or than slave labor is in any other State. It must be admitted that the repeal of the duty would be ruinous to those who have made investments in lands and slaves, since the artificial rise in their value has taken place; but that is the whole extent of the evil. It bears no comparison with the national loss paid by the consumer, which a continuation of the duty would perpetuate. It would in this, as in many other cases, be much cheaper to indemnify the parties interested, than to persevere in fostering a branch of industry, in the prosecution of which, to use the expression of the planters, they are “warring against nature.” It is not, however, proposed to repeal, but to reduce the duty to a rate nearly approaching that of a general uniform duty ad valorem; and in doing this we would not take as a criterion the present depressed price of sugar, — a price which appears to be, even in the West Indies, below the cost of production.
According to the Treasury statements of commerce, the average price of imported brown sugar, at the places whence imported, was: —
|In 1830 . . . . . . . . . . . . . .||5 cents.|
|In 1829 . . . . . . . . . . . . . .||5½ cents.|
|In 1828 . . . . . . . . . . . . . .||6 cents.|
Assuming six cents as the medium and remunerating price in the West Indies, an ultimate but gradual reduction to one cent and a half per pound would considerably lessen the injury to those who, relying on a continuance of the duty, have made investments at the elevated artificial prices due to it; and might probably permit the owners of the plantations most favored by soil and climate to continue the cultivation of that product.
The prime cost of both salt and coal is, according to the official statements for the year 1830, 12J cents a bushel. The duty is, therefore, for the first 160%; and for the last, near 50% on the value. Both are necessaries of life, and used in quantities nearly equal, by the poor and by the rich. Salt is essential to agriculture; the duty falls almost exclusively on the greater portion of the inhabitants of the Atlantic States, and its repeal would affect no other interest, but that of some inconsiderable establishments in a few places on the seashore. The imported bituminous coal may be applied to uses for which anthracite has been found unfit, such as several manufactures, the steamboat navigation, and iron works on or near tidewater. The duty now falls exclusively on the northern seaports, particularly New York, and is most oppressive on the most indigent class of society. The only objection to a reduction of the duty to a rate corresponding with the value of the article arises from its effect on the proprietors of the mines of anthracite coal, and on the companies which have invested large capitals in the completion of roads and canals for its transportation. A duty of 25% and the freight, which, if the importations are from Nova Scotia, or in large quantities from England, cannot be less than ten cents a bushel, would give them all the protection to which they are fairly entitled. We wish every possible success to the laudable spirit of enterprise by which they have been animated; but, $o prevent the reduction of the price of fuel to the poor in our large cities, because extensive beds of coal have been happily discovered at home, appears to us a most strange and unjust extension even of the restrictive system.
The principal commodities which have been selected for special protection, iron and all the coarser woollen articles of clothing, are, as well as salt, coal, and sugar, essentially necessary to all classes of society. The duties laid on such commodities fall therefore much more heavily, in proportion to their means, on the less wealthy classes; and it has been already seen with what singular ingenuity that on woollens has been so arranged as to make the poor pay, in every instance, considerably more than the rich, on the value of their necessary clothing. This your memorialists consider to be, in its practical application, one of the most obnoxious features of the restrictive system. And it is principally for the same reason that they pray that the duties on wines, teas, coffee, fruits, spices, silks, and other articles, not being raw materials, which it is presumed cannot, at least at this time, be produced in the United States, may be subject in proportion to their respective value to the same rate of duties as other foreign commodities.
It is truly remarkable that it should in the United States be necessary to pray, that whenever the public exigencies permit it, luxuries should be subject to duties at least as high as articles of general and equal consumption. A temporary departure from that principle can only be ascribed to that zeal which, with a single eye to a favorite object, loses sight of every other consideration. The annual average value of the wines and silks consumed in the United States amounts to about $7,000,000, or one eighth part of their whole consumption of foreign articles. It will not be denied that both are, strictly speaking, luxuries, and in this country used exclusively by the rich. Teas and coffee are, indeed, used by all classes, but as luxuries by the poor, and in very small quantities by them, or out of the towns, if compared with the consumption by the wealthier classes. Of 5,700,000 pounds of tea, the annual consumption of the years 1827–1830, less than 80,000 pounds consist of bohea and less than one fourth of the part of the whole of bohea and souchong. The whole annual consumption is little more than half a pound for each individual. Every man in easy circumstances may calculate how much greater than that proportion is the consumption of his family, and who would be relieved by taking away the duty altogether. In this view of the subject, the question is not simply whether the duties on those articles shall be repealed or reduced, but whether the reduction shall apply exclusively to them, whilst those on articles of equal consumption shall be preserved; instead of making a general reduction which shall render the duty uniform on all. If the duties on wines, silks, tea, and coffee were repealed or reduced below the common average, whilst those of 50% to 100% on iron, salt, coal, sugar, and coarse clothing were preserved, every substantial farmer or mechanic would pay more annually than men who have an income of $5,000 a year; and with respect to the poorer classes, the tax levied on each individual would increase in proportion tn his want of means. Your memorialists are a ware th.it this is not the object of the friends of the restrictive system, but the unavoidable consequence of the system itself. It is because the present tariff gives a special protection to some particular favorite branches of industry, that it is necessarily unequal in its operation, imposes burdens on the many for the benefit of the few, and is more oppressive upon the poor than upon the rich.
It is well known to your honorable body that the tariff system is believed to be unconstitutional by a numerous and respectable portion of the American people, including probably a majority of the citizens of the southern States. Your memorialists may not all unite in that opinion; but they assert that the system is at variance with that spirit of justice and mutual concession in which the Constitution was conceived and adopted, and that it operates unequally and unjustly upon those parts of the United States which supply the greater portion of the national exports, and are less adapted to the introduction of manufacturing establishments.
The restrictive system lessens the amount of the foreign products which would otherwise be imported.
It has, therefore, an immediate tendency to lessen the ever corresponding amount of exports. The avowed declaration of those who are benefited by it, and their general proscription of the trade with foreign nations, announce that such is their object. Retaliations, however unwise, may be provoked by a hostile course of legislation. It cannot be doubted that a great diminution of the exportations will be the necessary consequence of persevering in that system, to the manifest and great injury of those States which export most, and have no other resources than those exports.
The inhabited part of the United States embraces a territory more extensive and differing more in climate than the whole of western Europe. A necessary and great difference must arise between the branches of industry to which the several portions of that territory are respectively best adapted. This difference is still more increased by that in the nature of the population. The southern States have always confined themselves almost exclusively to the cultivation of the rich products of their climate. This is the only advantage they enjoy, and they owe it to nature. As they make but few, they consume a much greater proportion of manufactured articles imported from other States or other countries. That system, therefore, that enhances beyond measure the price of those objects of necessary consumption operates most unequally and unjustly upon them. They are forbidden to supply themselves on the cheapest terms consistent with the revenue necessary for the exigencies of Government. As the greatest consumers they must not only pay a greater share of the duties requisite to defray the necessary national expenditure, but they are compelled to pay the enhanced price occasioned by the protecting system. That system cannot be extended to them. They find in it no indemnity, no compensation for the injury which it inflicts upon them. They have not, they cannot in self-defense erect manufacturing establishments. The nature of their population forbids it. Whether from color or situation is immaterial; the great mass of the working population of the southern States is inferior in activity, skill, and intelligence to that of the other sections of the Union. Where such important and indelible differences do exist, each part should be permitted to enjoy its natural advantages; and that legislation is unjust, unequal, and oppressive which attempts to confer doubtful benefits on the one at the expense of the other.
It is idle to say that the southern States find a compensation in the general advantages in the increased wealth resulting to the Union from the protecting system. The fallacy of those pretended advantages has been sufficiently exposed. But, admitting their reality, they are, according to the doctrines even of the restric-tionists, derived from the losses sustained by the consumers of the South. The duties on the iron, the woollen manufactures, the sugar, the salt, and all the other privileged articles which they consume, give no additional activity or employment to their labor. The amount of their products remains the same, and their value may be lessened; they pay more and receive nothing. In order that they might be placed on an equal footing with their fellow - citizens, in order to enable them to erect manufactures, they stand in more need of a tariff against those of the eastern States than the eastern States against those of England. From that weapon of self-defense they deprived themselves in adopting the Constitution of the United States.
It cannot be deemed consistent with justice and that spirit of mutual concession in which the Constitution was conceived and adopted, to convert that complete freedom of internal trade secured by it to the several States into a weapon of oppression upon those which from uncontrollable circumstances cannot compete with others in particular branches of industry. Is there any substantial difference between the British Government forbidding its American colonies to trade with other nations, and to purchase any but British manufactures, and the adoption of that pretended American system which compels one section of the Union to resort exclusively to another section for its necessary supply of manufactured articles?
Your memorialists are aware that it may be urged that whilst the exports of the southern States have been increasing without interruption, those of the middle and northern States, though fluctuating in value, have for forty years been nearly stationary as to quantity. Whenever the demand for the articles of food which constitute by far the greater part of those exports ceased to increase in the same ratio as the population, it became not only useful but absolutely necessary to apply to new objects a portion of the industry of those States. They must otherwise have grown daily poorer, and been deprived of the comforts which they had till then enjoyed. The southern States might be asked, in that spirit of concession and compromise to which they appeal, not to oppose a course of legislation intended to encourage the establishment of manufactures, which has become a matter of necessity in the parts of the Union less favored by nature than themselves.
The facts are admitted, and the southern States did not wait for that appeal. The compromise took place, the concession was made from the time they consented that the whole, or nearly the whole amount of the public revenue should be raised by duties on importation. Unable to compete with others in manufactures, it was clearly their interest to purchase those they wanted wherever they might be obtained on the cheapest terms, and that a part at least of the revenue should be derived from other sources. They voluntarily yielded the point and submitted cheerfully to duties amounting on an average to 40% whilst they were wanted to discharge the public debt. That object could not have been effected without resorting to direct taxation, had not the foreign trade supplied the means. The taxed imports which have paid the debt have been purchased with the national exports; and of these the oppressed States have supplied two thirds. Now that the object has been accomplished, after the manufacturing districts have, during forty years, enjoyed the incidental but not less efficient benefit of that mode of taxation; when the southern States acquiesce in the continuance of the same system on a scale proportionate to the exigencies of Government, is it just, is it equitable, to aggravate instead of lightening the burden? And can this additional sacrifice be expected from them?
But no special protection beyond the ordinary revenue duties has been, or is, necessary for the introduction of the manufactures required by the wants of the country. The annual average value of the imported merchandise paying duties ad valorem in the years 1798–1801 amounted, after deducting those exported with the benefit of drawback, to $33,747,000. Deducting about $950,000 on account of articles exported that were not entitled to drawback, and of the fruits, spices, and some other minor items not then charged with specific duties, the residue, amounting to $32,000,000, is the value of the foreign manufactured commodities annually consumed at that time. The annual average value of the imported goods paying duties ad valorem during the years 1821–1824, taken from the annual statements of commerce, amounted, after deducting the reexportations, to $32,910,000. To this must be added, first, $2,700,000, being the value of the iron and manufactured articles which now pay specific duties. Secondly, $7,000,000, being the difference between the present value of the cotton goods now imported and that of the same quantity in the years 1799–1801; the increase, therefore, during that period of twenty-three years, amounts to about $10,600,000, or to about 33%; and that of the domestic exports will be found to have been 35J%. During the same period the population of the United States has more than doubled.
It will not be denied that the people of the United States were at least as well supplied in the year 1824 as in the year 1801 with clothing, furniture, and every species of manufactured commodities. A population twice as great, in order to be equally well supplied, required twice the amount of such articles. And since the value of foreign goods of that description consumed in the United States in 1824 amounted only to $42,600,000, instead of $64,000,000, the difference must necessarily have been supplied by domestic manufactures. Not only those which were established in 1801 must have increased in a ratio equal to the increase of population, but by a further quantity, amounting to $21,400,000. The annual amount of foreign manufactures had, during that period, and prior to the tariffs of 1824 and 1828, been lessened more than one third in proportion to the population.
The actual increase of domestic manufactures cannot be precisely ascertained, since the actual amount in 1801 is not known; but the limits of that increase may be correctly estimated. From the imperfect data obtained in the year 1810, it appears certain that the amount in the year 1801 did not exceed $100,000,000, or fall short of $60,000,000. The domestic manufactures formed, therefore, from two thirds to three fourths of the total amount of the manufactured commodities consumed. The total amount consumed in the years 1821–1824 amounted to $264,000,000, according to the first supposition, and to $184,000,000, according to the second. Deducting, in both cases, the amount of foreign goods annually consumed in those years, and amounting to $42,600,000, the increase of domestic manufactures would have been, in twenty-three years, 12l£% in the first case, and 136% in the second. We have a moral certainty that it was within those limits; and that the amount of foreign manufactures was in 1824 from one fifth to one sixth, while it was in 1801 from one third to one fourth, of the whole amount of manufactured commodities consumed.
Proceeding in the same manner, it will appear that, without any such special protection as that of the tariffs of 1824 and 1828, the total value of the manufactures consumed in the United States in the year 1847 will probably be $450,000,000, of which the domestic manufactures will form seven eighths, and foreign merchandise no more than one eighth part. In all probability the increase of domestic manufactures will be greater, in proportion, during that period of twenty-three years, than during the next preceding; since there will be more skill and experience, a more dense population, and a greater proportionate capital.
The principle is indisputable; and if there is some error in the numbers, it will no otherwise affect the result, than that it may take place a few years sooner or later. But that result with a population so active and intelligent is certain. The question is only one of time; and admitting, for the sake of argument, that the protecting system has a tendency to accelerate the establishment of manufactures in general, all that can be gained by it is, that the same necessary result may be obtained a few years earlier.
A uniform and moderate duty does not derange the natural order of things; and instead of sustaining, by artificial means, certain manufactures for which the country may not be prepared, at the expense of the community, and particularly of the poorer classes, to the detriment of other manufactures, and to the great injury of some parts of the country, it will encourage and successively promote the various branches of industry best adapted to the state of society, and to the circumstances of the different parts of the Union. A maximum duty of 25%, added to the charges on importation, will give to the manufactures that may require it an annual protection of 35%. An efficient system that will prevent frauds, and, as far as practicable, check irregular importations on foreign account, will insure to the manufacturer the legal protection to its full extent; and, given in a true spirit of compromise and conciliation, it will have that stability indispensable to him, and on which he never can rely under the present system.
Your memorialists beg leave here to observe, that, whilst they have considered a duty of 25% as the highest that should, in any case, be allowed, they have not pretended to assert that the average duty required for the exigencies of Government should be 20% on the value. If they have adopted that rate in their calculations, it has been only in order to meet any determination that may be taken by your honorable body, on the amount of the revenue which should be provided for, and any difference of opinion respecting the probable amount of importations, and the consequent productiveness of any given percentage. In their own opinion, the average duty actually required would fall far short of 20%.
After having given the fullest consideration to this important subject, your memorialists have not been able to perceive any other objection to the immediate adoption of the plan which they have respectfully suggested, than that which arises from vested interests. These are entitled to respect only because they do exist, and not on account of any presumed legislative pledge which no legislature could give; and which, if so intended, your memorialists altogether deny to be in any degree binding upon subsequent legislatures. Your memorialists have, accordingly, been instructed to express the willingness of those in whose behalf they address your honorable body to acquiesce in such an interposition of the legislative power as shall be prospective in its operation, thereby avoiding any sudden revulsion which might operate with undue severity on the manufacturing interest, but leading to the desired result, with the least possible injury to the interests which have grown up under the existing system of protective duties.
Your memorialists trust that the temporary and doubtful advantages ascribed to the tariff system, and which may, perhaps, accrue to some particular districts, will not be permitted to outweigh considerations of a far more important character. It may justly be expected, from the patriotism of those who calculate upon such local advantages, that they will not insist on what ii manifestly unjust, and persevere in a course which disturbs the peace of the country and alienates the affections of a numerous portion of their fellow-citizens.
Let it be recollected that the system is, in itself, an infraction of an essential part of the liberty of the citizen. The necessity must be urgent and palpable, which authorizes any government to interfere in the private pursuits of individuals, to forbid them to do that which, in itself, is not criminal, and which every one would most certainly do, if not forbidden. Every individual, in every community without exception, will purchase whatever he may want, on the cheapest terms within his reach. The most enthusiastic restrictionist, the manufacturer most clamorous for special protection, will each individually pursue the same course, and prefer any foreign commodity, or material, to that of domestic origin, if the first is cheaper, and the law does not forbid him. All men ever have acted, and continue, under any system, to act on the same principle. It is impossible that they should universally act in that manner, unless it was evidently their interest so to do. The tariff system is founded upon the principle, that what is true of all men, individually, is untrue when applied to them collectively. We cannot consider the adherence of enlightened nations to regulations of that description, but as the last relic of that system of general restrictions and monopolies, which had its origin in barbarous times. If the corn laws are the most odious of those protecting monopolies, it is because they enhance the price of that which is still more essentially necessary than sugar, salt, clothing, or fuel; and we may safely predict that their repeal will be the first result of an improved representation of the people.
Your memorialists are fully aware that acquiescence in the will of the majority is the indispensable condition of a representative government. The true problem to be solved in the United States is not whether the people can govern themselves, of which not the slightest doubt can be entertained, but whether that government can be successfully applied to an extensive territory, embracing interests which must occasionally be in collision with each other; whether majorities formed by combinations of sectional interests will be so governed by a sense of justice and a spirit of conciliation as not to oppress those parts of the country, whose rights, though they may be a minority, ought, nevertheless, to be respected. The permanence of the Union and the destinies of this great and happy nation have been intrusted to your honorable body; and, with an humble hope that your deliberations may be enlightened by Him to whom the United States are indebted for all the blessings they enjoy, your memorialists, as in duty bound, will ever pray, etc.
In behalf of the Committee,
ALBERT GALLATIN, Chairman.
New York,January 23, 1832.