Front Page Titles (by Subject) Section Two: Arguments Against the Protecting Duty Summarized Through an Analysis of Its Major Consequences - Tyranny Unmasked
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Section Two: Arguments Against the Protecting Duty Summarized Through an Analysis of Its Major Consequences - John Taylor, Tyranny Unmasked 
Tyranny Unmasked, ed. F.Thornton Miller (Indianapolis: Liberty Fund, 1992).
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Arguments Against the Protecting Duty Summarized Through an Analysis of Its Major Consequences
Protecting Duties Are Unconstitutional
To make them constitutional, the Committee have adopted the present fashionable mode of construction, which considers the constitution as a lump of fine gold, a small portion of which is so malleable, as to cover the whole mass. By this golden rule for manufacturing the constitution, a particular power given to the Federal Government, may be made to cover all the rights reserved to the people and the States; a limited jurisdiction given to the Federal Courts, is made to cover all the State Courts; and a legislative power over ten miles square, is malleated over the whole of the United States, as a single guinea may be beaten out, so as to cover a whole house. Unfortunately, this political manufacture being encouraged by allowing bounties paid in power and money, these bounties have engaged successive factories in the occupation; and, from the sedition law, for controlling the use of our tongues, down to the protecting-duty law for controlling the use of our hands, it has been cultivated with successful pertinacity. Why should some tongues and hands be oiled with power and money, and others rusted with penalties and taxes?
The protestation of the Committee against constructive limitations of power, applies with equal force against its constructive extension. No, says the new system of construction. Power has the double privilege of being exempted from any constructive limitation, and also of extending itself by construction. If an article in the constitution does not verbally reach the end in view, it may be wire drawn up to it by construction; but if it does verbally reach it, then it is to be construed as if the constitution had contained no other words, and is by no means to be explained or controlled by other articles, or by the primary principles of the instrument. Accordingly, the Committee pin the question on the power of Congress to regulate commerce as if it was isolated; and exclude the consideration of all the limitations in the same instrument, intended to prevent Congress from exercising an unlimited power of transferring property from State to State, from the nation to exclusive privileges, from class to class, and from individuals to individuals. And what has been done, without regarding what ought to have been done, is considered as affording precedents sufficient to confer these unconstitutional powers.
Thus they render several particular articles, and the true intention of the constitution inefficacious and nugatory. Of what value is the prohibition to impose a tax or duty on articles to be exported from any State, if Congress can impair or destroy this right of exportation, for the sake of enriching a local class of capitalists; of what value is the prohibition to bestow preferences and implicit partialities by a regulation of commerce or by modes of revenue, if Congress can establish preferences which shall make States tributary to States, the whole nation to capitalists, classes to classes, and individuals to individuals? Waving a verbalizing mode of discussion—the resource of imposition, and the detestation of common sense, we need only recollect that the intention and end of the constitution was to “secure the blessings of liberty to ourselves and our posterity.” Can any construction, by which Congress may destroy the liberty of ourselves and our posterity, be true? Yes, say the Committee, it may be true, because “it is extremely difficult to point out the rate of duty when revenue ceases, and protection becomes to be the ruling object; to define the line which shall limit the constitutional powers of Congress.” Does it follow that these powers have no limits? Yes, say the Committee: and to prove it, they echo the following terrifying words of the supreme court. “A power to tax, involves a power to destroy.” And thus these echoes between Congress and the court are considered as the only constitutional limitations. This repercussion is the only security against Federal usurpations. “A power to tax, involves a power to destroy.” This echo has destroyed the right of taxation reserved to the States, and extended ten miles square to the size of the United States. “Congress has a right to regulate the conduct and interest of individuals,” because it is necessary for the sake of political economy. An echo from the court, can also establish this boundless power, and complete the catastrophe of the drama. Here, then, a combination of powers is asserted by these self-created guardians of the constitution, which expunges all the limitations thought by its framers necessary to preserve a free form of government. “The only security against this combination of limitation-destroying powers,” say the Committee, still echoing the supreme court, “is the structure of the Federal Government.” But neither the court nor the Committee have ventured openly to inform us, whether it lies in the whole structure, or only in some portion of it. Do they consider the State Governments as component parts of this structure, enabled to resist its threatened destruction; or do they believe the Federal Government to be compounded only of Congress and the supreme court. Whether they admit or reject the State Governments as balancing or checking portions of the structure, they allow that a security against destruction is deposited somewhere; and if the destroyer himself is tacitly meant, it may still be useful to entreat this angel of death not to destroy the securities for a free government, because it is extremely difficult to define his powers. The difficulty may place the honorable men and real patriots in Congress, in a nice and delicate situation; but, however hard it may be to split straws for the purpose of defining the exact line which limits their powers, it does not follow that they ought to demolish pillars. Some lines are so very visible, that they may be clearly seen. That of changing the principles of the constitutional structure, by a legislative reconstruction of a society by monopolies and exclusive privileges, is one of these. Will this reconstruction “secure the blessings of liberty to ourselves and our posterity?” Will it be the same structure created for this primary end? If not, how can it be constitutional to hammer it out of any particular article?
Another of these destroying powers, when construed without any regard to the real design of the constitution, may be found in the right of borrowing and appropriating money. If Congress should borrow and give to capitalists, its might be verbally constitutional, but substantially it would be taxing the nation for their benefit, and not for the general welfare. Commercial restrictions which beget the necessity of borrowing, for the purpose of giving them bounties, amount to the same thing. If Congress cannot find a line which prohibits it from borrowing and appropriating money to monopolies and exclusive privileges, I do not see why they may not create a king, since the maintenance of one man at the public expense will undoubtedly accord better with the principles of political economy, than the maintenance of such combinations.
The Committee have borrowed, from mere declaimers, an argument, which, if reiteration could make truth, would be forcible indeed. They say “that manufactures which, in all other countries are cherished as the most valuable offspring of human industry, have become with us a spurious progeny, born with a constitutional malediction, to struggle under legal disabilities. The constitution designates no national interest in preference to another, but throws all alike on the discretion of Congress.” How are such assertions to be treated? Must I take off my hat, make a bow, and say “all this is very true?” Or ought I honestly to reply, “not a word of all this is true, except that the constitution designates no national interest in preference to another?” Had they substituted agriculture for manufactures, their assertions would have been diametrically different. Had they called that the most valuable offspring of human industry; had they asserted that it was treated as if it was under a constitutional malediction, and that it had to struggle with legal disabilities, they could not have been contradicted. To struggle with foreign industry is common to both occupations, and no legal disability to either. But the capitalists add insult to injury to roar out, whilst they are lashing agriculture and commerce with legal restrictions, like Sancho lashing the trees, that they are themselves receiving the blows they inflict. As the constitution designates no national interest in preference to another, it could not have designed that such preferences should be established by legislation, and a species of despotism created which it has carefully avoided and utterly neglected to provide for. But lest the forbearance of the constitution to recognise preferences of some national interests, should be considered as a constitutional rejection of that tyrannical policy, the Committee have supplied the omission, by gratuitously allowing it to have invested Congress with a power, which it forbears to exercise. “It throws,” say the Committee, “all national interests, on the discretion of Congress.” Thus undefined legal preferences of national interests rejected by the constitution, are entrusted to Congress; that body may legislate without limitation, their own discretion excepted, in creating them; and, by extending its power of legislation to objects excluded from the constitution as inconsistent with the principles of liberty and justice, the Committee have proved that the laws for bestowing lucrative preferences upon a capitalist interest to a great amount, are constitutional, however unjust or tyrannical. But under the sweeping doctrine “that the constitution throws all national interests on the discretion of Congress,” what becomes of the interests reserved to the States or the people? Are not these national interests? What becomes of all the interests intended to be secured beyond the reach of Congress by limitations and restrictions? What becomes of the declared intention of securing liberty by these precautions? What becomes of the security of property? What a foolish and useless labour does this doctrine charge the convention with undergoing? According to it, all that was necessary was to form a Congress, and to add one line, saying “that all national interests should depend on the discretion of that body.” As this assertion is thought necessary by the Committee to prove the constitutionality of the protecting-duty monopoly, its constitutionality and the assertion must stand or fall together. It places the question on its true ground. Will a power in Congress to manage all national interests and distribute preferences among them according to its discretion, preserve the Union, or secure liberty? Is it constitutional because the supreme court declares it to be so? Was Algernon Sydney constitutionally put to death, because it was done by a supreme court? Is the constitution subject to a similar jurisdiction, without the chance for reprieve, except from the prosecuting power? Whether it can be fairly so construed as to lay its limitations, its design and its life, at the feet of “a discretion in Congress,” is the ground upon which this point is to be decided.
Manufactures Are Injurious to Morals, and Produce Pauperism
This the Committee deny: and, to sustain their denial, reject the evidence of the great foreign factories, and rely on that of the Waltham factory, consisting of two hundred and sixty persons. I shall not attempt to prove that this little experiment is less to be relied on, than those made on a great scale, nor to overhaul the fact and opinions coinciding in the conclusion, that these factories degrade human nature. But leaving to the Committee all their arithmetick for estimating the thefts of the poor, it is yet necessary to remind them, that in wandering through its mazes, they have entirely overlooked political immorality, by which vices more pernicious to society are produced, and which also causes many of those peccadillos, admitted by them, and allowed by me to be bad enough. Laws for creating exclusive privileges and monopolies corrupt governments, interests, and individuals; and substitute patronage, adulation, and favour, for industry, as the road to wealth. If it be true, as the Committee believe, that the preferences and partialities of such laws, will not produce a correspondent impoverishment, which will reach the poor and deteriorate their morals; yet it cannot be denied that they will reach the rich, and corrupt the morals of the best informed, and of the officers of the government; in which three classes reside, the power and the influence, by which the morality and the liberty of nations are sustained or destroyed.
As to pauperism, the Committee quaintly contend, that it is not produced by hard labour. Daily wages earned by hard labour, do not prevent it. One of these general assertions balances the other, and they unite in showing how little is proved by either; and neither can diminish the force of the fact, that pauperism and crimes are more frequently produced by hard labour for daily wages, than from any other source; because it usually expends the wages of today in the subsistence of today, and is too improvident to lay up a defence against the occurrence of disability, or the temptations of necessity.
In a pamphlet lately published at Philadelphia, in defence of the system proposed by the Committee, we are informed that the poor list of the city of New-York has risen to fifteen thousand persons; being about an eighth of the whole population. We have also learned from State documents, that its prisons are crowded with felons and debtors. We have seen it too published in the newspapers, that one hundred and eleven persons were last year sentenced to death in four counties of England. In England the gallows groans, or ships are laden with convicts. In New-York the penitentiary overflows with them. In both, the prisons abound with debtors. And in both the proportion of paupers is about one person in eight. In England, fictitious capital, legal privileges, factories, and monopolies are abundant. At New-York they are probably more abundant, than in any other part of the United States. I have said that a partial accumulation of fictitious or legal capital in any one State, at the national expense, would not promote the general happiness or wealth of the people, even of that State. If the proofs of the assertion in England lie too far off to be seen, that at home is visible. If a local and individual accumulation of capital united with factories, will diffuse honesty and wealth within the sphere of its influence, why do we see most crimes, most debtors, and most pauperism, wherever this policy is most prevalent? May it not therefore be possible that this policy itself generates the crimes and pauperism by which it is attended? At least we must discern, that by whatever names exclusive privileges call themselves; however earnestly they assert that they are not monopolies, and only honest encouragers of industry, that they are not chafferers for selfish acquisitions, but pleaders for general good; that far from causing crimes, they are political moralists; and that far, also, from causing pauperism, they make people work harder than they could otherwise be made to do; that yet they are constantly attended by phenomena, which very plainly contradict all these professions. Bonaparte as devoutly declared, that he was not a military despot, but a patriotick consul.
Political economists in Europe, and especially in England, have forborne to consider the effect of political immorality upon national prosperity, or its influence in begetting both individual pauperism and crimes, because they could only build their systems upon the foundation of governments so thoroughly corrupted, that they despaired of producing a reformation by a true system of political economy and could only seek for inadequate alleviations of evils, necessarily caused by the firm establishment of the system of patronage, monopoly, and exclusive privileges. Compelled into a reverence for these abuses, they have kept at an awful distance from adversaries so dangerous and unconquerable, and contented themselves with attempting only to soften their baleful influence upon human happiness by temporary expedients. In these endeavors, though they have exhibited great ingenuity, they have been unsuccessful; and, as the causes remain, the effects follow in spite of their wisdom and philanthropy. Here, we are yet able to apply the axe to the causes themselves, which in other countries have generated bad morals and grinding poverty, in spite of fine soils and good climates.
No Further Protection Necessary
If the proposition had been differently stated, it would have exhibited the question in plainer language. Suppose it had been objected, that further protection was not wanted. The Committee might have replied with truth, that the capitalists did want more money. The objection means that the capitalists do not need more money, and the Committee state that they already have more than they know what to do with, but that they want more still. From these facts, the plain question is, whether the nation, though reduced itself to pecuniary distress, ought to give more money to the capitalists because they want it, although they have already more than they can use.
The first reason for doing so urged by the Committee is,
that if a factory occupied in a single manufacture, should ask Congress for further protection, or a further bounty, it would be a partial monopoly, and justify the objection, that protecting duties tend to create a privileged order of great capitalists, supported at the expense of the nation; but that if Congress grant to all factories the same favour, that it will not be a monopoly, nor tend to create a privileged order of great capitalists, but only be a general and equal protection of national industry.
Thus they have reduced the point to a plain matter of fact. They say that a bounty to one factory would be a partial monopoly, and would create a privileged order of great capitalists, which would be unjustifiable; but that a bounty to all the factories is not a monopoly and will not create such an objectionable order. One bishop would be a hierarchy, but an hundred bishops would be religious freedom. I had thought that separate social interests, like separate nations, were individual with respect to each other. It would seem to common sense, if one privileged factory would suffice to create a dangerous exclusive interest, that a hundred factories combined by a common bounty, would create an exclusive interest an hundred-fold more dangerous. If each received its bounty by separate laws, each law would create an unjustifiable monopoly say the Committee, because they would be uncombined by law, however they might be united by interest; but if all these factories are combined both by one law, and a common interest, then the combination changes the whole mass from a monopoly into a protector of national industry, and will not produce a privileged order of great capitalists. Whether there are more or fewer factories than one hundred in the United States, it is excessively wide of truth, and excessively humiliating to all occupations, to apply to them exclusively the phrase “national industry.” By doing so, the Committee have taken a substratum for their system, to be found in no other treatise which has ever appeared, and which is crushed by the weight of the plainest fact imaginable. In the old systems of political economy, land, labour and corn, have been considered as comprising the chief sources or items of national industry, and have been selected as the measures of national prosperity. But the Committee, in the face of every body's knowledge to the contrary, assert that the whole mass of national industry, is concentrated in a few factories, and that of course a bounty to them is a general and equal protection to national industry. If the fact was so, the bounty would be inert. Paid by national industry to national industry, it would only be the case of a man's giving money to himself.
Their idea, however, is, that these factories, though by no means constituting national industry, will afford general and equal protection to national industry. It is borrowed from the old idea of protection for allegiance, being only protection for bounties. One man pretended to protect a nation, if that nation would bountifully make over to him its liberty and property. One hundred factories offer to protect all the numerous branches of national industry, if the nation will be equally bountiful to them. I know not which is most to be coveted, the protection of a monarch, or of a pecuniary aristocracy. Writers upon political economy, as far as I recollect, have wholly neglected to recommend either. All of them consider branches of industry as separate and distinct; and allow, that some may be oppressed by exclusive privileges or bounties to others, because they must pay whatever these others receive from partial laws; and none assert that factories and agriculture are one and indivisible. The Committee subscribe to the same opinion in admitting that one factory endowed with a bounty would operate unjustly upon other national interests. In England, agriculture and factories are considered as interests so clearly distinct, that two violent and contending parties have been created and kept alive by bounties and monopolies occasionally given to each. Neither of these contending interests have ever asserted, that bounties to one, were bounties to the other; and the difficulty has been, to adjust the compensation for the injury sustained by one, from partialities to the other. At this very time the manufacturers are complaining of the corn monopoly, which, though created to encourage the most important branch of industry among men, and in England particularly, is fraudulent and oppressive upon all other branches of national industry, and protects them, just as they are protected here by our factory monopoly; by enriching itself at their expense. The English landlords have never had the assurance to assert, that their corn monopoly made bread cheaper to consumers. It has been tried much longer than our factory monopoly, and instead of making bread cheaper, has increased rents and enriched landlords at the expense of bread consumers. Our factories have asserted, that their monopoly would make manufactures cheaper. But after a considerable trial, its effects are found to correspond with those of other monopolies. It has only enriched capitalists and impoverished other occupations. The Committee admit that our moneyed capitals have increased even more rapidly than English rents; that they have grown up to an exuberance which cannot find employment. The English landlords do not complain of an exuberance of rents, nor crave an extension of their monopoly for its employment. The enormous growth of individual capitals, and the pecuniary depression of all other interests do not sustain the hope of the Committee, that a factory monopoly will be “a general and equal protection of national industry.”
Whence came the redundant capitals allowed by the Committee to exist? If from commerce, it must have been highly lucrative; if from a system of internal legislation, that must have been excessively partial. Had commerce begotten this redundant capital, a correspondent prosperity of agriculture or other occupations must have been visible, unless it can be proved that a lucrative commerce will impoverish a nation. The Committee, by urging a balance of trade as the cause of national prosperity, have admitted that commerce is the instrument by which it is to be obtained; and by admitting the existence of redundant capitals in the hands of individuals with a concurrent national distress, it follows, either that these redundant capitals have been brought in by a favorable commerce, or bestowed by partial laws. Under the first supposition, there exists no reason for endeavoring to make so lucrative a commerce better by home monopoly, under the second, there is still less reason for increasing the national distress, to add to the accumulations of individual capitals.
But the Committee have endeavored to blend the mercantile and capitalist occupations, so as to conceal the distinctions by which their very different effects are produced. They assert, that the protection afforded to commerce has enabled merchants to acquire princely fortunes, and leaving us to imagine that this protection is a bounty to merchants, infer that they are uncharitable in opposing bounties to factory owners, since they receive them. It is strange that the heat of controversy should have elicited an assertion, that protection to commerce was a bounty to merchants, when the benefits arising from it must so evidently be reaped chiefly by the owners and consumers of the commodities which it is the occupation of merchants to exchange. But the Committee had forgotten that the commercial and capitalist occupations are essentially different. The business of one is to exchange property, of the other to transfer it. One coincides with the good soul of money, in regulating these exchanges by free will; the other combines with its bad soul, by using it to promote transfers without equivalents. If the legislature should lay a duty upon imported commodities to be paid to merchants, then, and then only, would the two occupations produce the same effects, because it would be similar to the excise paid to capitalists, collected for them by restrictions and prohibitions. There are no such bounties given to merchants, and therefore the mercantile occupation, instead of inflicting general penury to promote partial wealth, has the effect of diffusing general prosperity by cheapening human comforts. It is in fact one of those occupations by which nations are enabled to exist under the property-transferring policy in its several forms. Had the capitalists requested Congress to increase the extravagance of government, in order to extend and protect the system of borrowing, for the purpose of giving employment to their exuberant wealth, they might as justly have charged the mercantile body with injustice for opposing the application, as in the present case. The same charge has been frequently urged against the farmers, and admits of the same answer. In both cases it results in the following doctrine, considered in its favorable aspect. Merchants and agriculturists are made rich by free industry and fair exchanges, but this operation is too slow for capitalists, and therefore it is ungenerous in the two first classes to oppose the enrichment of the third by monopolies, without exposing it to the toils which the two must undergo or remain poor.
All advertisements for recommending quack physick either to the body natural or body politick, are exposed to detection, because they are suggested by the same design. The Committee have represented the mercantile occupation as creating princely fortunes, but they have not said that these fortunes have been obtained by means of legal transfers of property, nor informed us by what operation so lucrative a commerce can impoverish the rest of the community. Other capitalist writers have filled pamphlets with computations to magnify agricultural wealth; but none have attributed this supposed wealth to a property-transferring monopoly. What an enigma is here exhibited. Merchants and agriculturists are wonderfully rich, yet a country in which these classes constitute a great majority is in terrible distress. At one time these doctors say that the superabundant blood of agriculture and commerce ought to be drawn off; at another, that they are expiring for want of blood, but that bleeding is still necessary. We are assured as usual by these doctors, that the same physick will cure both emptiness and repletion; that it is equally good for the most opposite complaints, and equally beneficial whether merchants and farmers are rich or poor. They were indeed pretty well and tolerably rich, whilst they forbore to swallow bolus after bolus compounded of commercial restrictions, prohibitions, embargoes, exclusive privileges, and monopolies; and have become sicker or poorer the more these drugs have been administered to them. But what of that? The Committee say, “we risk much by acting on the belief that the English nation does not understand its interest; and protection should end then, only after securing employment for all.” These declarations are appalling. The drug recommended is that which the people of England are forced to swallow by a corrupt government, and we are desired to take it until employment is secured for all, which has never been effected by it. The reason given for it is curious. Commerce and agriculture are informed that they are sick, to induce them to take the physick; and that they are rich, to induce them to pay the doctors. If they should agree to pay a vast annual tax to the capitalists, until their prescriptions shall secure employment for all, especially for growing capitals, there are two tolerably strong reasons that the tax will last for ever. One, that the proposed object is an impossibility; the other, that the capitalists would never effect it by their prescriptions if they could, because they would thereby lose their fees. Employment must be nurtured by free exchanges, like commerce, or it flags. Commercial action and reaction constitute its food. Take away one and the other languishes. A nation deprived of the excitements arising from commercial reverberations, loses the creator of employment, as well as of civilization, knowledge, and comforts; and recedes towards savageness. Even with the aid of these excitements, employment for all can never be established. The fluctuations caused by war, seasons, fashions, and the wonderful catalogue of human passions, will reach employment and prevent that permanency no where to be found; but these fluctuations left to be met by free industry, are themselves excitements of genius and talents, and awaken exertions into life. Which generate most employment, all the inducements which propel the mind and body to make the utmost efforts they can, or the protecting-duty system which destroys most of them?
The Increase of Duties Will Lead to Smuggling
And it might have been added, that it will inculcate an opinion, that smuggling is a virtue; and that the smuggler, if not an actual, is at least a comparative patriot. How an impartial casuist might determine the degrees of immorality between the two cases of pilfering industry, to enrich capitalists, or of supplying it by pilfering the pilferers, with necessaries and comforts at a cheaper rate than it could otherwise procure them, I shall not enquire; and only suggest that the parties interested will never believe themselves to be less moral than the capitalists, in uniting to defeat a monopoly operating upon themselves. The smuggler does not pilfer industry, but buys and sells under the check of free will, and the consumer only retains his own property by buying cheaper than the monopoly will sell to him; yet they both commit the crime of evading an oppressive and fraudulent law. If the enhancement of price is moderate, and is only produced by the fair object of revenue, both the parties will view it in a different light; nor will the temptation be of the same extent, as when it is magnified by the avarice of exclusive privileges. We need not go with the Committee in search of affidavits, to determine whether smuggling and high duties are allied; we need not call upon the casuist to decide whether the tempter or the tempted is most wicked; and we need not look for truth either in a cup of tea, or in the Isle of Man, though it is somewhat larger than the teacup; when it has been ascertained by unchangeable principles. Some people will for ever believe that there is no immorality in eluding oppression; others will for ever be tempted by pecuniary acquisition to pardon their consciences, especially if they can get a law to sear them; and commercial restrictions will for ever multiply smugglers and watchers of smugglers. I know not which of these occupations will do most harm. It often happens that not a single case of smuggling can be proved, whilst a country abounds with interpolated commodities, and the treasury announces its extent, by an enormous defalcation. What but intemperate zeal could deny the inseparable association of smuggling with the system advocated by the Committee; and who can consider it as at all important, whether the tax imposed upon his industry goes into the pockets of the smuggler, the capitalist, or the watchers of smugglers?
A Tax on the Many, a Bounty to the Few
This objection, the Committee admits “would be conclusive if true; that a permanent tax to encourage manufactures would be radically wrong; but that disclaiming the word bounties, as wholly inapplicable to any part of the bill, they are willing to test it by the principles of its active and intelligent opponents.” On the next page, however, they observe “if there were no manufactories, and government could build them up by imposing duties on foreign fabricks, such duties would not be a tax on the farmer, but an efficient bounty, by giving a value to his otherwise useless products.” The first suggestion they use in support of these assertions, is exactly of that character employed in pleading a cause. It is an extract from the report of a Boston Committee, admitting that in some cases, an argument may be found in favour of encouraging particular employments by bounties and taxes. Upon this admission the Committee have seized, as an acknowledgment that bounties to exclusive privileges, constitute a wise and just policy. But it may have happened that the admission itself came from an exclusive privilege. Some capitalists, contented with the existing protecting-duty monopoly, or fearful of pushing it further lest it should burst, are opposed to its augmentation. When the policy of bounties, monopolies, and exclusive privileges is introduced, those deriving emolument from any item of it, may find an interest in opposing another, but they will never contend that the policy itself is bad, and ought to be abandoned. Neither the landlord nor capitalist-interest in England, will admit that the system of bounties and exclusive privileges is radically vicious, though each will contend that its antagonist gets too much, and itself too little by it. Of what value can the authority of either, asserting that a system is good by which both get money, be to an enquirer who is considering whether it is also good for a nation? Such admissions are a vice in the system itself, because they are purchased concessions, not for disclosing truth to advance the public good, but for concealing it to enrich combinations. However the family of exclusive interests may quarrel among themselves, yet they will unite when the whole craft is in danger; and even when at variance, they will be careful to advance arguments in favour of the principle which sustains their common interest. Leaving, therefore, this extract from the report of the Boston Committee, as proving nothing, let us proceed to the words of the Congressional Committee, and consider what they prove.
The frequent occurrence of contradictions in their report, bewilders the understanding and perplexes the subject. They say “bounties are wholly foreign to their bill, and yet to build up manufactories by duties on foreign fabricks, would be an efficient bounty to the farmer.” To build up these factories, by such duties, is the avowed object of the bill; and, when thus created, they will be bounties to farmers, the very fact upon which the Committee and its other advocates have rested its defence. And the same Committee deny “that the word bounty is applicable to any part of the bill; contend that the bill bestows an efficient bounty on farmers; and admit that a permanent tax to encourage manufactures, would be radically wrong.” An advocate for the freedom and happiness of a nation, will not become the partisan of a particular interest. Why are the Committee, after having candidly admitted that a permanent tax for the protection of manufactures must be radically wrong, instantly converted into advocates for an efficient bounty to farmers? Having disclaimed the hateful term bounty, they instantly resume it in favour of farmers, whilst they renounce the propriety of thus endowing manufactures, although equally meritorious. If duties paid by the consumers of foreign fabricks to build factories would be no tax on the farmer, yet the efficient bounty thence accruing to him must be a tax on somebody; unless indeed the new discovery of the Committee, that such duties paid to support government are not taxes, which must be the case if they are not taxes when imposed to build factories; can obliterate all the received ideas of taxation. Bounty certainly implies a payer as well as a receiver, and when it is bestowed by a government, it implies taxation on the people, considerably exceeding its amount, on account of the misfortunes to which public money is exposed, and the expenses of collection. As the proposed bounty to farmers could only be paid by some kind of tax, and the Committee assert that it would be wrong also thus to encourage manufactures, it follows that it would be wrong also thus to encourage farmers. If a permanent bounty could not exist without its accomplice, a permanent tax, then the bounty promised to farmers, as resulting from building factories, distant as it is, must vanish the instant it arrives, or inflict on some interest the reprobated permanent tax. With the factories the case is very different. These are to be built by taxes on foreign fabricks, which must, inevitably, fall on consumers of the substituted domestick fabricks; but the farmers, far from paying any portion of them, are to be reimbursed by an efficient bounty. If so, the tax paid for building the factories, would be more glaringly unequal and oppressive, as other occupations and professions will pay all the tax, whilst the farmers will receive all the efficient bounty. But this whimsical mode of reasoning is gotten over, and the admission of the Committee, that the protection of manufactures by a tax on the community, is wrong, virtually retracted by the magical influence of the word “permanent.” A tax on the many to raise a bounty for the few, is allowed by the Committee to be radically wrong, if the tax is permanent. It is impossible to find a better argument in favour of abuses, because it will fit all. The conciliating candour of acknowledging a policy to be bad if permanent, is a solicitation of confidence in the assurance that it is good, if temporary. Few things in this fluctuating world are less permanent than the promises of statesmen and the calculations of financiers; and the nation which submits to exclusive privileges, bounties, monopolies, and other abuses, because they are told they will not be permanent, instead of obtaining felicity like ancient wiseacres, by bestowing their temporary property on priests, will obtain the most permanent political machine we know of; a machine invariably constructed by temporary abuses, namely, a bad government.
“A permanent tax to encourage manufactures would be radically wrong, but the word bounties is inapplicable to any part of their bill, and to build up factories by duties on foreign fabricks, is good policy.” There is some difficulty in simplifying this confusion of ideas. Would a permanent tax be radically wrong only because it was permanent, and a temporary tax be right only because it was temporary? A radical imposition must be made so by some principle, and not by the duration of the imposition. If a permanent tax to encourage manufactures would be radically wrong, it can only arise from the injustice inflicted on other occupations, by conferring an exclusive benefit on one at their expense. But whatever may be the principle which convinced the Committee that such a permanent tax would be radically wrong, the same principle must pronounce a temporary tax for the same partial purpose, to be also radically wrong. The temporary tax for the encouragement of manufactures is denied to be a bounty, by the assertion that the word bounties is inapplicable to any part of the bill. Why would the tax be radically wrong if permanent? Undoubtedly because it would be a permanent bounty. If the tax, being permanent, would be a permanent bounty and radically wrong, the same tax, though temporary, must be a temporary bounty, and equally wrong. A tax may be imposed for two objects; one to sustain a government, the other to enrich individuals. The idea of a bounty cannot be severed from the latter object, and the Committee labour against language and an indissoluble affinity, to prove that a tax not imposed for the use of government, but to encourage manufactures, does not imply a bounty. A feeble attempt, if such was the design, is made to find a subterfuge from conclusions so inevitable, by speaking of building factories with duties on foreign fabricks. Not a cent of such duties has gone or can go towards their fabrication. All the duties received on foreign importations go into the treasury, and are applicable to public uses, and the enhanced prices obtained on domestick fabricks from domestick consumers, by diminishing the amount of duties produced from foreign fabricks, are the architects of factories, and constitute the bounties to capitalists.
A great curiosity of the discrimination between good and evil, attempted by the words permanent and temporary, consists in its being addressed to temporary beings. Build factories for capitalists, because it is only a temporary radical wrong, and you will be reimbursed by what man can never get in this world; a permanent good. Why not build houses for farmers and professional men, because it may permanently foster agriculture and science? The consolation, that abuses may be only temporary, is ingeniously used to inflict them; and the sound principle, that temporary abuses are an introduction of durable evils, is to be abandoned. Factories are now to be built by bounties to capitalists, in order by and by to bestow efficient bounties on farmers. One abuse is proposed as a remedy for another, and these two occupations are to be provided for by successive bounties, radically wrong if permanent, but right if temporary. No compensation is even suggested for the others which share in the taxes to raise these bounties. Indeed this omission is of no consequence, for if these factories should deliver manufactures from the grasp of their own monopoly, the farmers could never obtain the alluring bait of an efficient bounty in their turn, unless corn and their other products had ceased to be exported; and could only hope to be reinstated upon the ground of free and fair exchanges.
The promise of future compensation for present wealth is the cunning offer made by the capitalists to the farmers. Build factories and give bounties to us now, and we will restore to you the blessing of free exchanges the moment we can no longer extort from you an enhanced price for our fabricks. Such is the basis of their arguments, and such the boon by which they are endeavouring to bribe the farmers, without paying any respect to other occupations. Is there any man in his senses who would make such a bargain with another man? No day of payment is prescribed. No security for performance is proposed. After all other interests have enriched the capitalist interest, it may break its promise, cease even to manufacture, and retain the wealth acquired by its bounties. Suppose lawyers and doctors could persuade the nation to build palaces for them, and buy their law and physick at double prices, under a promise that when these employments were overdone, it should get their physick and law cheap. What speculations can be equal to these? Vast estates are purchased by a promise, and no obligation to pay any thing for them is incurred. Indeed no payment can ever be made for them, except a restoration of free exchanges and fair competition, suspended to bestow them. The utmost compensation to be expected is that of taking off the suspension. Why then put it on? To take away a social right, in order to restore the same social right, is worse than nothing, by the amount of the intermediate loss incurred by the suspension. Whilst the business of building factories is made lucrative by bounties, the capitalists will pursue it; when it ceases to be so, they will give it up. If other occupations should escape from their toils and become profitable, by receiving either patronage or justice, the capitalists will transfer their wealth from the worn out, to the new patronage, or at worst, employ it in free and fair exchanges upon equal ground with other wealth. Money emigrates without difficulty from one exclusive privilege, or from one occupation to another; it is neither nailed to the soil, nor to a factory; it follows the scent of profit; and the cry of capitalists upon the track of exclusive privileges, like hounds in pursuit of game, grows louder as the scent grows stronger. A nation when caught does not indeed lose its life, but it loses the precious castor which is the object of the chase. The policy of transferring property by law, is only a series of speculations, like a series of monarchical successions, inflicting, it is true, temporary evils only, but which always last as long as we live. It is the system for keeping the birds in its hand, and sending the mass of a nation to look for them in the bush. The Committee, however, deny that it is a tax on the many or bounty to the few, and admit that if it was, it would be radically wrong. They only defend this denial, and elude the admission, by the use of the words permanent and temporary. The objection does not assert that which could not be foreseen, namely, that protecting duties were a permanent tax on the many and a permanent bounty to the few, and the Committee feebly deny, that which is quite visible, namely, that they are a temporary tax on the many and a temporary bounty to the few. They admit the truth of the objection by seeking for a refuge from it under the word permanent; and if all monopolies, exclusive privileges, bounties, and political abuses, are by nature temporary; if they beget successors, like other tyrants; if the bad principles, by which they are defended, are permanent; this vail is too thin to hide the fact stated in the objection, or to make that conceded to be radically wrong, according to permanent principles, radically right, because of a hopeless possibility that it may be only temporary.
The Committee have asserted “that there is no instance of an increase in the price of any articles, the high duties on which have secured our market to our own manufactures.” Nothing is more easy than for the capitalists to make out accounts favorable to themselves. Who would lose a cause, if he could garble the evidence, much less if he could fabricate it? Nails and a few other articles are selected to prove the assertion. But how could its truth be established, except by the expelled test, competition? Prices may have fallen in other countries below those paid here, but it cannot be ascertained, except by the rejected test. It is therefore quite safe to make the assertion, when the means of detection are excluded. Yet for still greater safety it is equivocal. The price of articles secured against competition has not risen. This may be nominally true, and substantially false. The value of money has doubled, and if the prices of the selected articles remain undiminished, they are substantially doubled also, so as to acquire a great enhancement from being protected against foreign competition, if the same foreign articles have been reduced in price by the appreciation of money. If, however, protection against competition does not enhance domestick prices, then there is no reason for protecting duties. To establish the fact that it does not, the Committee have selected two or three articles, and left us to infer a general rule, generally false, from these meagre exceptions. Our situation would have been unexampled, if we had not possessed some internal manufactures, the prices of which would not be enhanced by protecting duties, or the exclusion of competition; but these furnish no evidence applicable to manufactures, the prices of which will be enhanced by this exclusion. To blend them, in order to misapply evidence furnished by the class of manufacturers, placed by domestick facilities beyond the influence of competition, to that class exposed to it for want of these facilities, is evidently incorrect. I could furnish the Committee with many articles, more conclusively establishing the fact they assert, than those they have selected. The price of flour has not been increased by a monopoly of that manufacture and the absence of competition. But would the low price of that article prove, that a monopoly would not enhance the prices of other articles? In like manner a selection of any other articles, the prices of which have not risen, from causes distinct from protecting duties, is insufficient to prove that such duties do not enhance prices, and a mode of reasoning entirely delusive. It is quite the case of one party making up the evidence for both.
The Committee observe that “it is not easily conceived, that duties, short of prohibitory, can easily operate as a bounty to manufactures.” Having previously asserted that duties amounting to a prohibition do not enhance prices, and now that duties short of a prohibition do not operate as a bounty, they come to the conclusion, necessary, as they imagine, to sustain their policy, that no duties whatsoever will have any such effect. If their assertions are true, then these duties will be wholly inoperative, except for producing expense, and extending patronage; if false, it follows that they are taxes on the many for the benefit of a few, and whether true or false, the assertions suggest the conclusion, either that there is no reason for commercial restrictions or prohibitions, or that they are founded in a principle allowed to be radically wrong.
“Our best statesmen,” say the Committee, “have laid it down as a maxim, that domestick competition will always tend to the reduction of price. It is not, therefore, without some surprise, that it should be so generally alleged by opponents of protecting duties, that they are a tax on the many, to enrich a few. If the price of the article advances with the duty, it still leaves the same profit to the importer.” It is with no less surprise that I see a principle, directly adverse to monopoly, applied to its justification by the following mode of reasoning. All wise men agree, that competition will reduce prices, and therefore an exclusion of competition will reduce prices. As the Committee had previously endeavored to make temporary evils good, by the instrumentality of the word permanent, they now endeavour to make competition a bad thing for the reduction of prices, by the instrumentality of the word domestick. But is not the competition between foreign and domestick commodities, wholly domestick? Will not the reduction of prices by competition be graduated by the extent of competition? How an enormous diminution of domestick competition can reduce prices, is inconceivable to me. The Committee, to prove that such will be the case, have imagined that the effect of protecting duties to capitalists, is the same as the effect of revenue duties to importers. Whatever are the revenue duties, the profit of the importers remains the same. I do not understand the observations they have deduced from this fact, but the difference between the cases is not so abstruse. In one case there is no monopoly; of the other, it is the basis. In one case the increased price occasioned by revenue duties goes to the support of government; in the other, the increased price produced by expelling competition, goes to enrich capitalists; one is a tax on the many for public benefit; the other a tax on the many for private emolument; one case is a transfer of property necessary for maintaining society; the other a transfer of property contrary to one of the ends of society. As to competition between importers, it is not affected by duties, because they all pay the same; but competition between commodities is destroyed, if so many of them are driven out of the market, as to enable the holders of the residue to enhance their prices by taking advantage of a scarcity. I cannot discern how two cases so clearly distinct, can be confounded, to make an exclusive privilege or a partial monopoly, bear the least resemblance to duties paid by importers. Confining the idea of competition to a rivalry between domestick factories, its great benefit, a reduction of prices is not to be expected. We cannot get manufactures cheaper by bribing capitalists, because these bribes are themselves an enhancement of price paid by the nation. If the factories should foolishly lose the bribes by a competition among themselves, yet a cheapness beyond that to be derived from keeping the whole field of competition open, could not be produced, because they would export their wares, if they should sell higher in foreign countries than at home. Thus the proposed policy consists of a tedious, heavy tax, to be paid to capitalists by excluding the domestick competition, begotten by the admission of foreign commodities, to enable them to carry on a war against natural laws, the utmost success of which cannot produce a degree of cheapness beyond that which would have existed, if competition had not been suspended, and no such tax had been paid.
Let us even imagine with the Committee, that these factories will be so many little nations, as incapable of being combined into one interest by an Amphictyonic council, as the little nations of Greece; and that they will be inspired with a spirit of rivalship, instead of combination, by the view of getting money and also with a disinterested spirit of patriotism which scorns money, and intends only to make us independent of any nations but themselves. Yet even this wild supposition, could not enable these very small nations to create a competition among themselves, as operative in reducing prices, as a competition among all the trading nations of the world, added to their own, in supplying our wants. Independent of local and natural advantages possessed by the great nations, the vast difference in the number of competitors, would have an influence in the reduction of prices, exactly similar to the constant effect of plenty and scarcity; and carry the benefit of cheapness in articles of consumption, as far as possible, because the great disunited nations could not mould themselves into one combination, and carry on their operations against our pockets in concert, as may possibly be done by our little factory nations. If, then, it is the opinion of our best and greatest statesmen, that competition will reduce prices (to discern which common sense is as competent as these sages) the same sagacity will also discern, that the effect must depend on the plenty or scarcity of this competition. How, then, can an unprejudiced understanding, which admits that cheapness is a benefit only to be obtained by competition, contend also, that by contracting or destroying the remedy against the evil of dearness, and creating an artificial scarcity of competition, that it will not be melted down into a settled domestick monopoly, and produce effects exactly the reverse of those contemplated by able statesmen.
A Restrictive System
The Committee, as usual, make new data for new doctrines. They say,
the same measures may acquire a good or bad character, as they may be called a system of revenue or restriction. Impost, as a means of taxing the consumption of the country, for the support of government; prohibition, for the purpose of creating and maturing the subjects of an excise, are fiscal measures. Taking England as an example, and asking ourselves by what other means she could, from a small population, extract as large a revenue as would keep in operation the immense machinery of her mighty empire, we must admire it as a masterly effort of human policy. With less than double our number, she meets an expenditure 50,000,000£ by the receipts of her treasury. Her corn-laws revenue, and commercial systems, tend to the same great object. The former is the basis of the land and income tax; the latter of excise and customs.
That is, the English policy throughout, is contrived for effecting only the end of taxation. I have met with many persons as wise, honourable, and worthy, as the gentlemen who composed the Committee probably are (for I have not the pleasure of an acquaintance with them) who have eulogized the English system almost as highly as the Committee have repeatedly done, but yet much as I admired the men, I could not concur with them. Our opinions are moulded by so many different circumstances, not to be traced even by the party himself, that it is impossible for one individual, to carry back those of another up to their sources. Favourite projects, local views, popular temptations, or a love of distinction, may sometimes mould even the opinions delivered in grave and patriotick legislative bodies; but the Committee have vindicated themselves against the suspicion of any such inferiour motives, by avowing their affection for those charming features of the English policy, which have enabled the government to expend fifty millions of sterling pounds annually. An enormous revenue extracted from a small population, by means of corn laws, commercial restrictions, land tax, income tax, excise and customs, is the mistress whom they adore, as a masterly effort of human policy. In my eyes, this beauty of theirs, appears to be a painted courtezan, who corrupts and plunders her admirers; and though we cannot account for different tastes, that especially called love, it seems impossible to discern even a probability that the United States will gain an addition of present or future happiness, by divorcing the healthy and chaste country girl whom they first espoused, and of whose integrity and frugal management they boasted for thirty years, to marry a second-hand town lady, so diseased and ulcerated, that the English people are heartily willing to part with her. The Committee, indeed, blinded by love, like a zealous and deluded cully, have selected a feature of their mistress, so beautiful as in their opinion to hide all her sores; and are transported by her enormous extravagance and taxation, as a masterly effort of human policy. One man often loathes what another loves. In my view, this is the most hateful feature of her whole countenance. Yet the taste of the Committee is not original. It is that of all the European and oppressive governments in the world. Taxation is, they believe, the end of government; and they concur with a distinguished American statesman in believing, that governments have occasion for all the people can pay. Hence, the system of the Committee is, to discipline the people of the United States into a patient sufferance of this doctrine.
The Committee have not only suppressed the disgust of the European people, for the mistress adored by their governments, but, in the phrenzy of their adoration, they have lavished upon her contradictory eulogies. To amaze us the more with the masterly policy of enormous expenditure and taxation, they tell us that the latter is extracted from a small population, not double of our own. Yet they tell us also, that the British empire is a mighty one. Is it true that this mighty empire contains only the population described? I had thought that the British Asiatic possessions alone, contained more than double our population, independent of other populous dependencies. Or is it true that these provinces contribute nothing towards British revenue? I had thought that Britain considered them as her best cows, and milked them with care and skill. If a man worshipped the devil, in commenting on his religion, I would give the devil his due, but not more than his due. I would not flatter him because he was powerful. Do not the Committee flatter the British government by attributing to it the masterly policy of drawing fifty millions sterling from a population not double of ours? Or was the compliment exaggerated to increase the censure upon our own, for being so unskillful in expenditure and taxation. I shall hereafter endeavor to show, that it does not deserve the reproach, and that it has been no mean adept in this masterly policy. However this may be, the parallel plainly proposes an object of emulation. If to draw two hundred millions of dollars annually from a population not twice as numerous as ours, is a masterly policy, the Committee insinuate that our governments are dishonoured, unless they draw above one hundred millions from a population more than half as numerous, by adopting the same policy. But in borrowing the English exclusive-privileges, bounties, monopolies and extravagance, to rival them in taxation, we must borrow also their provinces, or fail in the competition. These are made to feed their exclusive-privilege bounties and extravagance, but the same devourers here, must be fed by domestick labour only. Reforming the comparison by these considerations, our governments in a combined view, can hardly be convicted of less sagacity than the British, in the masterly policy of transferring property from productive to unproductive labour.
Is it benevolence or tyranny to fleece the people of all they can pay? If it may be called a masterly policy, who are entitled to the compliment, the payers or receivers; the ingenious inventors, or the foolish sufferers? Caesar, Cromwell, and Bonaparte may also be called masterly politicians, but the eulogy to them, is a censure upon the nations they enslaved. What can be more disgraceful to the understanding of a nation, than a recommendation to submit to an oppressive system, that it may compliment its oppressors with the epithet masterly? Let exclusive privileges and governmental extravagance take your property by a masterly policy, as conquerors do by a masterly army, and it will make you a great nation, and turn you into a mighty empire. The term is an unlucky one, and the Committee, conscious that the people were not quite ripe for creating these rich British masters, have formally renounced a predilection for foreign opinions. They only recommend the essential principles of foreign tyrannies in the strongest terms, and propose their adoption for domestick use because they constitute a masterly policy.
National defence is the usual pretext for the policy of fleecing the people. Even contiguous governments might maintain a comparative degree of strength as well by frugality, as by extravagance and oppressive taxation. These are so far from being suggested by national defence, that taxation, however enormous, is uniformly swallowed by individual avarice, and nothing is laid by, even in times of peace, to meet the dangers, as a precaution against which it is pretended to be inflicted. The treasure extorted beyond the line of honest frugality, is uniformly diverted from the end of defending, to that of transferring property. What is still worse, the pretext of defending nations by oppressive taxation, defeats its object by its means. It weakens nations by indisposing the inhabitants of a country to defend it. And why should they, if this masterly policy already takes from them as much as they can pay? No conqueror or tyrant can take more. Common sense sees no difference between tyrants; and patriotism is neutralized and torpid, when victory promises no good. In our case, nature having exploded the usual pretext for oppressive taxation, drawn from the contiguity of tyrannies, a new one is ingeniously invented. It is said that though we have no neighbors to conquer us, yet we ought to subject ourselves to this masterly policy of extravagance, exclusive privileges, and excessive taxation, to preserve our independence against the dismal aggression of selling us comforts cheap, and the pernicious abuse of buying or not, according to our own judgments.
I have overlooked the first answer given by the Committee to the objection. They have endeavored to make it a mere question of terms. Protecting duties, they say, are not restrictive; they are only a system of revenue. “As an impost, they are a tax for the support of the government; as prohibitory, they are only a fiscal measure for the purpose of creating and maturing the subjects of an excise.” The conclusion is, that no commercial restrictions at all can exist, provided they are called a system of revenue; and having obtained this conclusion by a change of words which cannot change the nature of things, they instantly contend that such restrictions are necessary for creating and maturing the subjects of an excise, preparatory to the introduction of the English masterly system of human policy. A very few definitions would settle the whole debate. If we could only ascertain what monopolies, exclusive privileges, commercial restrictions, and protecting duties were, it would be easy to understand the subject. If they are shadows, or if each is a Proteus, they cannot be seized by any argument. A scarcity, for instance, artificially produced, by which people are enabled to obtain higher prices than they could otherwise have done, has hitherto been considered as a monopoly. Those to whom this monopoly is given, have hitherto been considered as receiving an exclusive privilege. And protecting duties have hitherto been thought clearly distinct from an impost for the support of government; because, if the government receives an impost, domestick manufactures are not protected against the competition of foreign, however their price maybe enhanced by it. For want of definitions the Committee seem to me to have made a hot-bed, by mingling up a confusion of terms, and sown in it the seeds of oppression and tyranny.
This objection, like several others, is mis-stated. It means that protecting duties impair the productiveness of revenue duties, and not that they will destroy other sources of revenue; and that the very consequence will ensue which the Committee think so desirable, namely, a resort to unlimited excises and other internal taxes, in order to supply the deficiency. This consequence is the evil deprecated by the objection, and the Committee admit that it will ensue, and justify it as a blessing, because it will enable us to rival the masterly policy, by which Britain is enabled to extract an enormous revenue from a few people.
They rest their preference of excises over duties upon a single comparison, from which they deduce an equality between them in that one respect, and exclude from their consideration every sound argument disclosing the disparities between the two modes of taxation. They suppose that the preference of duties to excises, rests solely on the notion, that one mode is less compulsive and more avoidable than the other; and contend, because both are avoidable by submitting to privations, that the two modes are perfectly equal in this problematical or humble merit. It might be contended that even this imperfect test chosen by the Committee, is insufficient to establish an equality so destitute of importance, because it is evidently easier to forbear the use of foreign luxuries than domestick necessaries; but waving this undoubted fact, it is sufficient to recollect that the comparison is wholly delusive. Neither duties nor excises are avoidable; if they were, they could not be relied upon for revenue. Both will operate as a general tax, and if some evasions by particular subterfuges may be practised under both modes of taxation, these confer no benefit upon those who pay the tax. The Committee admit that excises, at least, are a compulsory mode of taxation, by contending that they may be relied upon for a revenue. But let us enquire if other comparisons, more substantial, between the two modes of taxation, do not exist. The collection of duties is less expensive than the collection of excises; therefore the people must pay a larger sum by one mode than the other, to place the same amount in the treasury. To provide objects for excises to operate upon, bounties to an enormous extent must be paid to capitalists; thus the amount paid by the people, compared with what the treasury will receive, may possibly be doubled. Excises are keys to every lock, and penetrate like foul air into every recess; duties leave our homes unviolated, and our quiet undisturbed by the eternal intrusions of vulgar officers hunting for penalties or bribes. Duties are liable to the limitations of the importation, which cannot long exceed the demand; of an ability to pay which is the only lasting source of demand; and of the check arising from a certain degree of moderation to make them productive; excises are liable to no such limitations, and may be pushed to any extent. Duties fall chiefly on the rich, and on those who are most able to pay, because these classes are the chief purchasers of imported commodities, and the poor chiefly subsist on home products; excises will reach the poor in a multitude of consumption beyond the reach of duties, and increase pauperism. Duties preserve a rule of taxation, between the States, fair and just, corresponding with the inhibition to tax exports, and unlikely to generate local dissatisfactions; by excises, irregularities may be created by a majority in Congress sufficient to shake or dissolve the Union. Yet the Committee say, “had the word impost been applied to domestick articles, and excise to foreign, the popularity of the two modes of taxation would have been transposed, for their operation on the people is the same.” Transpose the names horse and rat, and their qualities would also be transposed. The rat, when called a horse, would become a useful labourer to supply the family with necessaries; and the horse, when called a rat, would gnaw our clothes, steal our food, infest our houses, and produce a great expense in cats, not to prevent, but to assist his depredations. In this, and many other instances throughout the report, the Committee have reasoned upon the ground that words make or change the qualities of things; and, having previously gotten rid of monopolies, and exclusive privileges by calling them regulations of commerce, they now propose in the same way to convert excises into imposts. Is it possible that the universal opinion of mankind, that excises are the most troublesome and oppressive mode of taxation, has been imbibed, not from an experience of their qualities, but from the sound of their names? There was a dog once in this State, famous for following and taking thieves. Upon one occasion, a thief and an innocent person were made to change clothes, and mingle with the crowd, into which the dog was sent to search for the thief. When he came to the clothes on the innocent man, he growled, but discovering his mistake, left him, continued his search, found, and seized the thief, though concealed in the borrowed dress. Do the Committee think that men are less sagacious than this dog?
The impolicy of borrowing, and the inability of the land owners to pay taxes, are two other arguments urged by the Committee in favour of excises, if not more profound, at least more conciliating. The national aversion to borrowing is courted by one, and its aversion to a land tax, by the other. Our system of revenue, they truly say, is at present composed of duties and loans, and they propose to exchange it for a system of excises. They ought in justice to have said for one of excises and loans; for two bad modes of providing revenue, instead of the best which can probably be devised. I summon all experience to testify, whether the mode of obtaining revenue by excises, has diminished or extended the mode of obtaining it by loans. Has the masterly effort of human policy in England had this effect? The reason why it has not, is plain. That policy is a system for transferring property, in which borrowing is an efficacious item; and an increase of taxes by excises is a mode of making it more productive to the gainers, and oppressive to the losers of the property transferred. By adopting it, we shall also adopt its effects, among which the additional funds it furnishes for borrowing, is most prominent.
Land holders must not be taxed, say the Committee, because the depression of agricultural produce forbids it; and it would be equally repugnant to the wishes of the legislature and the interest of the nation. They are too poor to pay a land tax, and yet rich enough to pay excises, sufficient to maintain and increase our present system of extravagance. How are they to pay these excises? With money. How are they to get this money? By the same depressed prices. These are not only to pay more than they now do to government, in order to prevent a recurrence to loans, but also more than they now do to capitalists, in order to create objects for excises to operate upon. Excises, like all other taxes, must chiefly fall on land and labour in the United States for some centuries; I might say for ever; and a suggestion to land owners that this mode of taxation will be a favour to them, is therefore evidently only soothing or cajoling. Whiskey itself, the example exhibited by the Committee, does not prove that excises will relieve the poor land owners from taxation. A tax upon it, reaches the grain of which it is made, the land which produces the grain, and the labour which cultivates the land. The example, however, affords other testimony. Let those who remember how many officers were necessary to enforce this small excise, compute the number which will be necessary to enforce a general excise; and let the land owners recollect that they must chiefly pay this expense, in addition to the excises upon their consumption; and then determine, whether the sympathy for their inability to pay taxes, expressed by the Committee, is genuine or delusive.
“The important question,” say the Committee, “presents itself. Will the proposed changes be beneficial to the revenue, or is it necessary for its preservation and increase? The revenue from the customs has rapidly decreased. Consumption diminishes with the increase of population. A reduction of duties will not increase the revenue. When the expenses of a government exceed its income, there must be a responsibility somewhere.” Loss to the revenue is, throughout the report, the great evil to be deprecated, and gain to the revenue, the great good coveted. Far from apprehending that the treasury will be starved by an excise, I agree that it must be fattened because it can feed upon every thing; and that the patronage of the Federal government will be vastly increased also, by the multiplication of tax gatherers, and the bounties to capitalists. But ought the liberty and happiness of the people to be overlooked, in the ardent pursuit of these jewels, however brilliant they may appear to those eyes fixed upon the object of getting money for themselves; and ought we not to pause upon being told, that the agriculturists are too poor to bear a land tax, and yet that their taxes ought to be increased to enrich the treasury, extend patronage, and pay bounties? This is said to be necessary, because consumption, and consequently the customs, have diminished as population has increased. Are there no artificial causes for this phenomenon? Must not our ill-judged tariff, and other commercial restrictions be among them? The responsibility must lie somewhere. Can it be found anywhere but in bad laws? New laws must be the true causes of new effects. But the Committee, overlooking this truth, have ascribed our past prosperity solely to wars between foreign nations. If we could compare the losses we sustained from armed robbers, with the profits we reaped from these wars, it might be problematical on which side the balance would lie; but these enormous losses are suppressed to deprive our former republican policy of all its laurels, and to hide the visage of that which scowls more and more upon our prosperity, as it gradually supplants its rival. During the long experience which the United States had of the policy decried by the Committee, they found it good in periods of peace, as well as in those of foreign wars, and that it should now fail, must be owing to causes which did not then exist. Foreign commercial restrictions and prohibitions existed during these periods to a greater extent than now, but they could not prevent our prosperity and therefore no causes, but those of a domestick nature, can account for the gradual disappearance of the national prosperity then our elevation, now our regret. Do not the facts stated by the Committee, point directly to these causes? Why have consumptions diminished? Because the protecting-duty tariff has increased. Why have duties diminished? Because this tariff and other property-transferring measures, have diverted the profits of labour from being expended in consumption, by which the public treasury would have been supplied, to enrich the treasuries of capitalists. Why are agricultural products so excessively depressed? Because of the expulsion of foreign commodities by the existing tariff, which would have enhanced the value of domestick products by multiplying exchanges. To these internal regulations, add our imitations of English extravagance, in the expenses of government, and both the causes and the remedies we are in search of must be very easily discovered. Restore our renowned republican frugality, reform our tariff for the object of revenue only, and suppress exclusive privileges; and our treasuries will no longer be empty, government will not be obliged to plunge the nation deeper and deeper into debt, taxation will be light, and the national happiness, gradually lost, will be recovered by a reoccupation of the principles gradually deserted.
The Committee have disclosed one great cause of the decrease of consumption in proportion to population, by reminding us of the fact, that capital has increased in a few hands up to a redundancy. The same policy which begets this enormous transfer of profits or property, must beget a correspondent diminution of consumption, by depriving labour of that portion of its income applicable to consumption, and transferring it to the employment of accumulating capitals in other hands. Reversing the principle of a fertilizing irrigation, it collects the streamlets into a few lakes, and drowns many a fertile vale. These reservoirs of capital, drawn from the small profits of labour, and unfruitful to the treasury, can only have been created by legal mechanism. If the system for transferring property by banking, protecting duties, bounties, and political extravagance, has not done the deed, what has? Have foreign commercial restrictions, always existing, suddenly bethought themselves of inflicting upon us the two evils of exuberant, and empty purses? Why should they have operated so partially as to have enriched a sect of capitalists, and impoverished the rest of the nation? Why should this sect be encumbered with wealth by peace, and the people be reduced to poverty? Can the cessation of foreign wars have been the cause of both these effects? But if the accumulation of wealth in a few hands was not caused by foreign wars, it clearly follows that it is caused by domestick regulations; that this accumulation, and not peace, is the cause of that distress in which the capitalists do not participate, though exposed equally with other people to the cessation of foreign wars; and that it is this artificial accumulation which has diminished consumption, impoverished both the treasury and the people, and suspended the improvements of agriculture. Can it be denied, that the more of their profits are expended by the great body of the nation which subsists by agriculture, the more of them will be employed in obtaining the comforts of consumption, and in aiding the revenue; and that the more of these profits are taken from this great body of consumers, and taxpayers, and applied to the interest, bounties, and dividends which have created our exuberant capitals, the less can be applied to the other objects.
But instead of removing the causes of the disease, the Committee propose to increase them. The impost being crippled, by diverting the profits of labour from procuring the comforts of consumption, to the accumulation of artificial capitals, they propose to bestow more bounties upon this accumulation. The tariff having produced less and less in proportion to population, as it has been raised and raised, the Committee assert that it would not again become productive, by being lowered, and that it ought to be raised yet higher. If they had asserted that the same productiveness of the customs, experienced when the duties were low, could not be expected so long as an infinitely greater amount of the profits of labour, were diverted from consumption to accumulations, they would have been right. It would then follow that a diminution of the duties and a restoration of profits to the object of consumptions, united, would certainly increase the revenue; and on the other hand, that both an increase of duties, and also an increase of the policy of transferring profits to pecuniary accumulations, will diminish it. The Committee, therefore, had no design to assist the revenue, by increasing the rates of the tariff; and indeed they fairly acknowledge, that their object is still further to diminish the profits of labour, applicable to consumption, by transferring more of them to capitalists, that they may be able to prepare objects for an excise.
The Committee have justly observed, that taxation, either by excises or imposts, must fall on consumptions. To consider them with an eye to this equality only, is a concession which grants all that could be asked, and more than the excise system can reasonably expect. From this position it is obvious, that the system of augmenting capital, by diminishing the portion of income applicable to consumption, will cripple an excise, just as it has crippled the impost mode of taxation. Now as the policy of transferring property, coupled with imposts, has almost famished both the treasury and the nation, whilst it has created an exuberant capital in a few hands; it is but a dreary kind of comfort to be told, that the same policy, coupled with excises, also a tax upon consumptions, will fatten both. But the Committee go further, and say, that the transition to excises must cost us anew augmentation of capital, by monopolies of indefinite duration, to enable these monopolies to fabricate commodities for excises to operate upon; and as the bounties paid under these monopolies will still further reduce the profits of labour applicable to consumption, these excises must be applied to articles of the first necessity, and must be made more oppressive, in order to extort from necessaries, what could not be gotten from superfluities by the impost mode of taxation, when coupled with a monopoly, diminishing consumptions.
Upon this ground, the project of the Committee promises less than nothing. A change in the mere name of a tax, which is still collected through the medium of consumption, would leave us substantially where we were; but the payment of a great and indefinite bounty to capitalists, for this difference between names, and the additional expenses of collection, would make the remedy worse than the disease. One plan to relieve both the nation and the treasury, consists of frugality, free exchanges, free trade, and an abandonment of the policy of creating capitalists by exclusive privileges, bounties, and monopolies; general excises, and an increase of public expenditure, united with these universal instruments of tyranny, constitute the other. We have only to ask ourselves two questions. Which of these plans would be preferred by a patriot, and which by a capitalist? Am I a patriot, or capitalist?
The phraseology adopted by the Committee in stating objections to the protecting-duty policy, is that resorted to at the bar, in stating the objections of an adversary. They are put in a hyperbolical dress, to exaggerate them into an aspect of absurdity. Comparative injury, and not absolute ruin or destruction, constitutes the true question as to the impression likely to be made, on revenue, commerce, and agriculture, by the policy of the Committee or its adversary. To understand the objection, we must consider what commerce is. Avoiding as much as possible the previous remarks applicable to its definition, it is necessary to remind the reader, that whether foreign or domestick, it ought to be an instrument for facilitating exchanges, and not for accumulating redundant capitals in a few hands by arbitrary and partial laws. Commercial accumulations flowing from extraordinary skill or industry, are merely means used by commerce, for effecting its beneficial intention; but using it as an instrument for transferring property, without suffering free will to compute compensations, destroys this essential principle for exciting its efforts, and extending its benefits.
One item of the policy of the Committee, is to destroy the end of commerce, for facilitating foreign exchanges, by exporting without importing; another, to substitute for this destruction a domestick commerce, not for promoting fair exchanges, but for effecting a great and lasting transfer of property. They imagine that foreign commerce will not be injured, by restricting it in an extensive degree, to exportation; and that domestick commerce will be encouraged by disemboweling it of its essential principle, and converting it into an instrument for effecting unequal exchanges, to enrich monopolists. Whether this novel system of political economy, will impair or nourish commerce, either foreign or domestick, or whether it has been the true cause of the evil days upon which we are fallen, may be illustrated by a further consideration of the nature of money. Currency, however fabricated, regulates value; and value, if left free, regulates currency, when it is used to facilitate exchanges; but when it is used to transfer property without compensation, it becomes an instrument in the hands of legislation, for fostering local and personal avarice. Domestick commerce, carried on by the instrumentality of currency, presents itself in two characters; that consisting of exchanges of value for value, settled by the medium of money with the consent of the exchangers; and that consisting of exchanging a less value for a greater, enforced by legal compulsion. The intrinsic value of the same commodities, never alters, but their prices are liable to fluctuations from their scarcity or plenty, whether occasioned by casualties, by the laws of nature, by improvements in fabrication, or by laws for transferring property. The value is of course liable to the same fluctuations. But if demand and supply are left free, these fluctuations, except the last, are encouragers of commerce, and money is a medium by which they are moderated, and reduced to an equilibrium, if not with exactness, at least with the fidelity of competition. In cases, however, of a legal enhancement of price, money is deprived of its equalizing utility, and is prohibited from diffusing this equilibrium of values, so evidently just, and so highly beneficial to mankind, both by invigorating their exertions, and extending their comforts. When wheat sold at six pence a bushel, both the raiser and consumer were in the same relative situation as when it sold at two dollars, if the fair equalizer of values was unbiassed by legal privileges; but if these were used, either to raise or lower the price of wheat, one of the exchangers of property was defrauded. Hence it appears, that relative, and not actual prices, constitute justice between occupations, and that the honest office of money is to adjust these relative prices. Whether the actual prices are high or low, the equalizing power of money, if exercised upon free exchanges, prevents any general calamity, and moderates to a great extent individual inconveniences. But laws for depriving money of its equalizing power, establish permanent inequalities of value between occupations, and create those very calamities; to prevent or moderate which, is the most valuable quality of money. The capacity of money to produce an equilibrium of values, operates between nations as well as occupations. The existing peace has diminished prices throughout the commercial world; but as money and commerce will equalize values, neither nations nor individuals sustain any injury from that circumstance. But if a nation shall prohibit itself from sharing in this universal diminution of prices, by crippling its own commerce; and shall moreover enhance by law the commodities for one occupation, whilst the prices of others remain depressed, all the individuals deprived of the compensation to be derived only from the capacity of commerce and money to equalize values, must be considerably impoverished. The government then undertakes to settle prices between occupations and individuals, and it loses sight of relative values, to destroy which is the only design of its interposition. By expelling foreign commodities, the United States are prevented from reaping any benefit from the universal fall of prices; and also deprived of the advantages of exchanging their own by the scale of relative values, which money soon establishes between nations; and by enhancing the prices of domestick manufactures, the relative values of domestick products are also destroyed, and the equilibrium which prevents a general fall of prices from producing any general or partial distress, is overturned; so that they cannot derive any compensations from the principle of relative values, or from commerce, either foreign or domestick. On the contrary, if these relative values were suffered to have an unobstructed operation, individuals would have the means of compensation in their own hands, and self-interest invariably finds it in some part of the commercial world, when not prohibited by governments from exercising its acuteness and industry.
If pecuniary income remains as high as it was when prices were double to what they now are, its real value is doubled, and a double portion of the profits or property of productive labour, absorbed by unproductive. It is by the branch of domestick commerce (if it can be called commerce) for the purpose of transferring property from productive to unproductive employments, that nations are oppressed and enslaved; and I do not recollect a single instance in the whole history of mankind, of a nation oppressed or enslaved, by leaving relative values to be settled by money and commerce. It is said to be necessary to establish this enslaving branch of domestick commerce, to counteract the teasings of foreign restrictions, which cannot enslave us. So far as these foreign restrictions counteract the power of money and commerce to equalize values, they resemble our domestick restrictions for the same purpose; except that the latter are infinitely more effectual, because the former are dissimilar, and the number of disunited nations enables a free commerce to shun, and often to benefit by them. But the relative capacities of foreign and domestick commercial restrictions to enslave nations, by means of a power in the government to regulate values, usurped from commerce and money, is very different.
The nature of a domestick commerce for transferring property, may be demonstrated by a few facts. In the time of Washington, wheat was worth two dollars, and the prices of labour and other property were equivalent. Then the Federal Government received three millions annually. For the sake of round numbers, let us suppose the price of wheat to be now one dollar, and the receipt of the Federal Government twenty-five millions. It is obvious that one dollar represents as much property as two did then, and that though the same equilibrium of value may remain in free exchanges; yet that the equilibrium in the commerce between productive and unproductive employment, or between industry and income, is excessively altered. Tyranny or oppressive taxation, is graduated by this equilibrium. For the same services, or nearly so, rendered by an indispensable species of unproductive labour, which then cost us three millions worth of property, we are now paying fifty millions worth of property. If we come nearer the fact by supposing the average price of wheat to be now seventy-five cents, and other property to be reduced to a relative value, productive labour is paying seventy-two and a half millions annually, for the same government which then cost it only three, estimated in property. The increased expenses of the State governments, have also contributed considerably towards augmenting the oppression arising from the property-transferring branch of domestick commerce. The difference between the amount of contributions to unnecessary, unproductive employments, in the time of Washington, and the existing amount, is still greater. If labour then paid to the infant policy of exclusive privileges even as much as three millions annually, and is now paying more than ten to banking alone, these ten by the same scale are now transferring twenty or twenty-five millions worth of its property instead of three. In the time of Washington, duties were chiefly confined to the object of revenue; now, they are extended to that of enriching capitalists. If these capitalists gain ten millions by this branch of property-transferring domestick commerce, labour is losing twenty or twenty-five millions more beyond what it then lost. It results from the estimate, especially if we include the State governments, that above twenty times more property is transferred annually from industry to unproductive occupations, than was transferred thirty years ago, being the difference between its losing six, or an hundred and twenty-five millions annually. The Committee say that foreign commerce ought to be diminished, in order to encourage and extend this property-transferring domestick commerce. If a European government, between one and two centuries past, when wheat was at one third of its present price, had in thirty years increased the contributions of labour to unproductive employments, twenty-fold, the effect would have been such as is felt here, from our excessive cultivation of the same kind of domestick commerce, and the appreciation of money. If the contributions of industry to unproductive occupations happen to be doubled or trebled by the appreciation of money, I see no remedy for the unforeseen calamity, but a reduction of these contributions to what they substantially were when imposed. What legislature would propose a great and sudden augmentation of taxation, when the value of money was uncommonly high, and the price of products uncommonly low? There is some strange defect in the structure of society, if such an augmentation can be made without any legislative act at all. It is still stranger that the Committee should think of legislating exactly like this invisible tyrant; of whose pernicious laws they are complaining; by proposing to augment the contributions of industry to unproductive occupations, further than his unconscionable conscience has gone. Some irresistible power has substantially doubled or trebled our taxes and contributions to exclusive privileges, without the consent, and contrary to the wishes of our representatives; and instead of advising them to resist this evil spirit, the Committee propose that they should become his accomplice by increasing taxes and bounties, because the means of paying them have greatly diminished. It is this policy only which causes peace to aggravate the distresses of nations, by making the domestick commerce for transferring property, infinitely more lucrative to unproductive occupations, and more oppressive to industry. The extravagances of war and the appreciation of currency, created capitals, bearing with less weight upon industry, whilst the prices of property were high; and the appreciation of currency, by depressing the prices of commodities, has correspondendy increased the value of income. The Committee propose to increase capital and income like war, and to enhance their value like peace, by restrictions on foreign commerce, and domestick exclusive privileges.
To justify this scheme for a domestick commerce, they have repeatedly urged the argument uniformly resorted to by every contrivance for transferring property. Whatever local or individual injuries it may produce, they contend that it will beget national prosperity. For this doctrine, they might have referred to English authorities and examples, more conclusively applicable than any they have quoted.
Many English writers, and among others the venerable Adam Smith6 himself, justify the enrichment of Britain by the wealth drawn from her provinces, by the assertion, that the provinces are integral portions of the British empire; and that the trade between them and the mother country, is therefore to be considered as of a domestick character, and ought to be managed so as to promote the prosperity of the empire. Whether this doctrine is to be ascribed to the partiality of British writers for Britain, or to the design of deluding the provinces into an opinion, that the British monopoly of their commerce was no local injury; whether it was suggested by an ardour for local popularity, conviction, or avarice, it furnishes a parallel of the question we are considering. Admitting it to be true that the commerce between Britain and her provinces ought to be considered as domestick, because they constitute a portion of the British empire, it does not follow that these provinces sustain no injury from the domestick restrictions and monopolies to which their commerce is exposed. These regulations make use of the transferring capacity of money, by inflicting on the provinces a legal necessity of selling cheaper to Britain, and buying dearer of her, than they would do if she was checked by competitors. This double compulsion to buy of Britain and to sell to Britain, creates a domestick commerce, governed partly by the good, and partly by the bad soul of money. So far as the relative value of commodities prevails, its good soul predominates; but whatever is gained by Britain from the provinces beyond this relative value, by means of her monopoly, is bestowed by the bad soul of money, and is an acquisition of property without compensation. The United States, whilst portions of the British empire, constantly felt, and often urged, the great losses they sustained from the restrictions and monopolies of domestick commerce; and Britain as constantly felt the wealth she gained by them, and justified her acquisitions by the same argument now used by the Committee, namely, that these restrictions and monopolies contributed to the national prosperity. Neither side could convince the other, although the colonies, awed by power, would have made considerable sacrifices of their opinion, to obtain only partial alleviations of an oppression, of which they were quite sensible. For the sake of peace, they only contended that Britain ought not to compel them by law to buy, nor to collect in the colonies a tax for nurturing the property-transferring policy, which she had established between them and herself. But Britain, enamoured with this property-transferring domestick commerce, as our capitalists now are; and protesting that she was wholly uninfluenced by avarice, and only influenced by the national prosperity, as the capitalists now protest; continued to increase her restrictions and monopolies, as the capitalists have done, and are still striving to do. The parties therefore went to war to settle a question, which we are trying to settle by reason, as the colonies attempted to do, before that war commenced.
Let the capitalists or factories stand for Britain, and all the other occupations for the colonies, and very little difference between the two cases will appear. If domestick commercial restrictions could transfer property from the colonies to Britain, they may transfer it from these occupations to capitalists. If they were fraudulent and oppressive, though inflicted by the British Parliament, either as a regulation of domestick commerce, or a system of revenue, they may be also fraudulent and oppressive, though inflicted by an American Congress, also as a regulation of domestick commerce, or as a system of revenue. If such relations transferred great wealth from British colonies to British capitalists, they will also transfer great wealth from American States to American capitalists, wherever they may be located. If a compulsion upon the colonies to purchase necessaries of Britain, was impoverishing to the purchasers; a compulsion upon States and occupations to purchase necessaries of capitalists, must be equally impoverishing on the purchasers. Are not cargoes of internal manufactures, attended by a prohibition against competition, equivalent to cargoes of tea and British commodities, forced upon the colonies without being attended by competition? Will strong and free States be insensible to the oppression of this property-transferring policy, which was seen and resisted by weak and dependent provinces?
The similitude of these cases cannot be evaded by the subterfuge of a difference between foreign and domestick commerce. They are both domestick, subject to the same principles, and made to transfer property by the same regulations. Domestick restrictions and monopolies, more effectually transfer property than foreign, because they can be more effectually enforced; and therefore these instruments are more extensively fraudulent and oppressive in domestick than in foreign commerce, and are infinitely more able to establish domestick tyranny, whilst it is quite uncertain whether they can obtain any species of profitable trade. There is no difference between a contiguity by land or by water, sufficient to make the policy of transferring property foul and oppressive upon British colonies, but fair and beneficial when applied to free States. Britain may, indeed, plead as she feels, that the oceans which separate her from her provinces, render them only half social; and that therefore she is justifiable in using restrictions and monopolies to cheat them of half their property in exchanging hers for it; but the capitalists cannot contend for an addition of fifty per centum to the price of their wares, because the imposition operates upon a sort of half-breed or mongrel citizenship, having only a right to half justice. The moral difference of representation, far from justifying the fraud, is the strongest argument against it. These States, when colonies, possessed a representation for internal purposes, and strenuously contended, that this representation was a provision against colonial oppression by commercial regulations, made by the British Parliament. Can it be possible, that this moral plea, deduced from colonial representation, could have been sounder than the same plea deduced from State representation, even if the latter had no auxiliaries? But are not the original sovereignties of the States, the reservation of internal rights of sovereignty, and limitations of the federal constitution, to prevent Congress from making some States tributary to others, powerful auxiliaries to the argument deduced from representation? Was not representation both State and Federal, instituted to prevent fraudulent transfers of property from State to State, and from the people, to exclusive privileges and legal combinations? If representation does wrong, the possibility of which is contemplated by every free government, some mode of correction is necessary. We have provided two; election, and a division of representation between the Federal and State governments, assigned to each distinct and independent powers, and divided the moral rights of representation, that one species may check the wrongs of the other. Had an accommodation with Britain taken place upon the ground of a representation in her parliament, and conferring upon it the same rights conferred on Congress, reserving to the colonies their local representations for internal purposes, could it have been fairly so construed, as to have rendered these local representations perfectly inefficient, and to have empowered the parliament, in virtue of a right to regulate the commerce between the colonies, to make one tributary to another, or the colonists generally, tributary to a sect of capitalists?
An argument applicable to the point of constitutionality, has been postponed to this place, because it is also applicable to the point of representation. The constitution empowers Congress “to regulate commerce with foreign nations, and among the several States, and with the Indian tribes.” Under this authority it has undertaken to regulate internal exchanges between individuals, and to destroy the freedom of exchanges, by conferring monopolies upon some individuals operating upon other individuals. Foreign nations, States, and Indian tribes, are united in one article, and intended to be affected in one mode. Did this article empower Congress to make one Indian tribe tributary to another to build factories in one tribe, in order to provide objects for an excise, and to destroy the freedom of exchanges between the individuals composing the tribes? Did it give to Congress the same power as to foreign nations? If foreign and internal exchanges, were not intended by the article to be regulated by Congress, neither were State internal exchanges between individuals intended to be regulated by Congress, because the power being equivalent as to each, the construction must also be equivalent and the absurdity of a construction as to two of the cases placed on the same ground, demonstrates the character of the same construction as to the third. National and not individual regulations of commerce, between States as expressed, and not between individuals, were therefore meant; and the representation in Congress, is only a national representation of this national object, and not a representation of the freedom of internal exchanges between State individuals, any more than the British Parliament was, or would have been, had the proposed accommodation taken place.
The monopoly of domestick commerce outstrips that established by the British Parliament. The colonies were left at liberty to trade with Britain and her dependencies. This created a competition infinitely more extensive and effectual than that confined to our few factories. If the inferior British restrictions crippled our commerce, will not restrictions more general, cripple it also? The British restrictions left the British portion of the world open to colonial commerce; the protecting-duty policy prohibits or restricts our commerce with the whole world, and opens it with a few monopolies.
The Committee do not deny that foreign commerce will be wounded by this policy. On the contrary, they admit that such has been, and will be, the case, by urging its decay as an argument in favour of a monopolized domestick commerce. From the numberless intimate connections between foreign and domestic commerce, one is selected as a proof that the wounds inflicted on the former, will reach the latter. Our coasting trade is greatly fostered, if not sustained, by foreign commerce. Heavy products are carried to a few large cities, from whence they are exported, and the returns pursue the same route. If foreign importations are prohibited or diminished, and factories scattered sufficiently through the States to become markets for culinary goods, it must diminish or render unnecessary this coasting trade. But if this should not happen, and these factories should be so partially located, as to make some coasting trade necessary, yet the insufficiency of their manufactures to meet the demand, and the diminution of exchanges, must greatly impair it. Either the vaunted coasting trade, or the vaunted neighborhood markets, or both, must therefore be a delusion.
The case of tonnage duties, selected by the Committee to prove the wholesomeness of protecting duties, illustrates the confidence to which such selections are entitled. These duties are rather fiscal than prohibitory and if they were prohibitory, our abundance of tonnage would render the monopoly as nominal as the monopoly of manufacturing flour. The protecting duties are prohibitory and not fiscal, except to capitalists, and create an operating monopoly. Tonnage duties do not foster a dangerous and oppressive moneyed aristocracy; bounties to factories, levied upon consumptions, do. Tonnage duties fall on consumptions and go into the Treasury factory duties fall on consumptions, go into the pockets of capitalists; and, by expelling foreign ships, destroy or diminish the revenue drawn from them by tonnage duties. The design that foreign shipping should come here empty and pay a heavy tonnage, and that our shipping should return empty from foreign countries, having paid them a retaliating tonnage, is no bad epitome of the whole project. Have the Committee considered whether other nations will permit our ships to go to them loaded, if we force theirs to come to us empty? If we expel foreign ships, would not foreign nations expel ours? If we expel foreign commodities, will they not retaliate? Will these mutual expulsions foster commerce? We have been long engaged in what is called a war of reciprocity, and by the Committee a free commerce. Blow begets blow, and wound follows wound, and commerce is gasping in the battle. Now, say the committee, let us try “whether the transportation from one part of the country to another, of materials to supply our manufactories, and of manufactures back to the raiser of materials, and the export of manufactures, might not employ as much shipping and as many seamen, as the importation of foreign supply.” It is thus admitted, that the policy of the Committee is to give a settling blow to foreign commerce, from a hope that an equivalent domestick commerce will grow upon its grave. To effect this, our factories and raisers of materials must live a great way asunder, to give employment to shipping and seamen in plying between them; and this ferry is to raise sailors and keep up a navy, until we can export manufactures. Foreign nations are of course to admit our ships and these manufactures, when we have gotten them to export, because we have expelled theirs. The fewer have been our expedients of this character, the more has our commerce flourished; and hence it is highly probable, that the most efficacious mode of defeating foreign restrictions to which we can resort, would be to establish a really free commerce, which would enlist the merchants of all nations to evade and counteract them. We have not gained a single victory in a twenty years' war of restriction against restriction, and the harder we strike the enemy, the more severely the blow recoils upon ourselves. Unless we assail him with a new weapon, success seems hopeless. The Committee propose to surrender our foreign commerce, and thus put an end to the contest. Suppose, instead of retiring within our shell from the combat, we should oppose free trade to foreign restrictions. We once tried it, and found ourselves fighting with swords against daggers. I know of no nation which has entered into a commercial warfare in this armour, that has not been victorious.
The Committee observe, “that nature has not denied to the immense region watered by the Mississippi, the Ohio and the Lakes, the means of ship-building, or the supply of cargoes. Man refuses them a market, because he looks only abroad. Foreign commerce can present no preference over domestic.” This immense region must, for ages, probably for ever, be agricultural. No equally interiour country has ever yet been a considerable exporter of manufactures. If this is susceptible of success in such an adventure, that success must be at the distance of some centuries. It cannot even enter into a competition with maritime countries, until its deficiency in populousness is removed. In the mean time, ship-building will make its interest more thoroughly agricultural, than that of the Atlantick region. Ships, the product of the forest, freighted with the products of the land, are themselves and their cargoes, only rendered valuable by foreign commerce. But the committee say what I cannot understand, “man refuses them a market, because he looks only abroad.” Do they mean that our merchants look abroad for agricultural ships and cargoes, rather than purchase them at home? As such is not the case, and as I cannot discern any meaning in the expression, I am forced to consider it as an empty barrel, thrown out to draw off the attention of the western whale. Is it not obvious that this very branch of western commerce, destined soon to become highly valuable on account of the cheapness of timber, and its dearness in foreign countries, depends for prosperity on foreign commerce? Would these ships and their cargoes be purchased and eaten by domestick factories, Western or Atlantick? Why do the Committee endeavour to inspire a hope so absurd, by adding, “that foreign commerce can present no preference over domestic?” Will an undeniable truth establish an undeniable error? If horses are preferable to oxen, ought we therefore to destroy or hamstring our oxen? Far from inferring from the fact, that foreign commerce is not preferable to domestick; that therefore the destruction of the former will advance the western interest, there seems to be no stronger case than this ship-building and loading which they have selected, to prove the close connection between foreign and domestick commerce; and to show how necessary the one is to the prosperity of the other. Without foreign commerce, it is perfectly plain that the domestick commerce in western ships and their cargoes will dwindle and perish, even sooner than any other item of agricultural interest.
The objection is, that the protecting-duty policy will injure or destroy commerce, meaning foreign commerce, and the Committee justify this consequence by asserting that a domestick commerce between factories and raisers of raw materials will compensate us for the loss, because foreign commerce can present no preference over domestick. Foreign commerce is then condemned to death by this policy, leaving its partner, agriculture, as a legacy to capitalists.
Neither ambition nor avarice could ever succeed in depriving nations of their liberty and property, if they did not by some artifice enlist the services of a body of men, numerically powerful. The general promises the plunder of a town to his soldiers; they take it; and he keeps most of it for himself and his officers. These are enriched, and the soldiers remain poor. A demagogue promises liberty to a rabble, and by their help makes himself their tyrant. And capitalists, by promising wealth to mechanicks, accumulate it for themselves, and become their masters. The Committee disclaim a predilection for factory capitalists, and an enmity towards agriculture. I balance this argument by disclaiming also a predilection for agriculturists, and an enmity towards mechanicks; but I avow an enmity against all modes for transferring property by excessive privileges. As no man, however, can find the seeds from which his opinions have germinated, such protestations are frivolous, and they are also unworthy of weight; because the consequences, and not the origin of opinions, constitute their materiality. If it was important to decide, whether the policy proposed by the Committee or its competitor, could be convicted of foreign origin, the difficulty of the subject would not be increased; but I wave the unedifying enquiry, and proceed to the substantial part of the question, whether it will be most injurious to agriculturists or mechanicks. At the threshold of this enquiry, I have changed a term, by substituting mechanicks for manufacturers, to display truth more clearly. The term agriculture needs no such correction, because we have not the two conflicting classes of landlords and tenants, as we have of capitalists and mechanicks. Where the land of a country is owned by landlords, and worked by tenants, the phrase “landed interest” refers to the landlords, who may enjoy exclusive privileges of which the tenants do not partake; and the impoverishment of one interest may contribute to the enrichment of the other. In like manner, where the factories belong to capitalists, and are worked by mechanicks, the phrase “manufacturing interest” refers to the capitalists, who may enjoy exclusive privileges of which the workmen do not partake; and their impoverishment may contribute to the enrichment of the capitalists, as the impoverishment of tenants may enrich landlords. In deciding the questions, therefore, by the test of friendship or enmity, we ought to exhibit persons, and not confound distinct interests, as the objects of these passions. A cold calculation of the profit to be made by factories, may be a vice of avarice, but a friendly sympathy for the calamities of workmen, arising from the policy of making laws to accumulate this profit, can only flow from good will towards them.
The interest of mechanicks against the factory policy, advocated by the Committee, is infinitely stronger than that of farmers, because, they may more easily be swept into factories, and the profits of their labour more completely carried into the pockets of the capitalists, than can be effected in the case of land owners. These are so powerful as to be able, when they feel a loss, to give themselves a compensation, as the English landlords have done by the corn laws; and between the capitalists and landlords in that country, the mechanicks find poverty. A keen sense of misery fraudulently inflicted, is the cause of their frequent insurrections, and fixed hatred of the government. Why are soldiers necessary to protect their masters, their work-houses and their looms, against the mechanicks themselves? The great lexicographer Johnson, in defining the condition and character of an English mechanick, has called him “mean and servile.” The definition is justified by the fact, that his best resource against ending his days in a hospital or poor house, is the shortness of his life. A mechanick employed in a factory rarely acquires a competence; opulence is out of the question; and he is completely excluded from public employments, by being doomed to a situation in which he can never acquire a capacity for them. He can hardly be considered as a citizen. A code of laws draws around him a magick circle, by making mechanical combinations punishable, lest they should check capitalist combinations; and he is reimbursed by penalties for the loss of hope.
The condition of the mechanick in the United States has hitherto been extremely different. It neither excites insurrections, nor inculcates a hatred of the government. It does not require a regular army to cure the agonies of misery. It neither shortens life, nor devotes old age to an hospital. It never fails to acquire a competency by industry and good conduct; sometimes rises to opulence; and receives its due share of public employments. Instead of being deemed mean and servile, it is capable of respectability, and the whole magistracy is open to it. I have heard that the son of a mechanick has been a President and I know that a weaver, a carpenter, and a carriage-maker (the two first from Pennsylvania, and the last from Virginia) were at one time for a long period, worthy members of Congress. Probably there have been many other similar instances. In State legislatures mechanicks are often seen, and as magistrates and militia officers, they abound. They are real, and not nominal citizens. How often do the hirelings of a factory in England, become members of Parliament, magistrates, or militia officers?
For these enormous differences between the condition of the mechanicks in England and the United States, there must be some cause. What can it be, except that the factory and capitalist policy, deprives them of the erect attitude in society inspired by the freedom of industry, and bears hardest upon them, as the chief objects of its gripe? Has this policy bettered the condition of mechanicks, even whilst it was creating enormous fortunes for their masters? If not, the strongest motive for resisting it, is the happiness and prosperity of the mechanicks themselves; though the success of this resistance will also contribute towards the happiness and prosperity of all other useful occupations, because the freedom of talents and industry, and the absence of a system for making both subservient to the interest of avarice, is the principle which must operate beneficially to all, though most so to that occupation most immediately assailed.
To counteract facts established by a double example, the same bribe is offered to land-owners here, which has created in England, a conspiracy between landlords and capitalists against mechanicks, by which they have been reduced to perpetual labour and perpetual poverty. The land-owners are told, that by coercing mechanicks into factories, the prices of their manufactures will be reduced, and that the land-owners will then be reimbursed for the bounties now paid to capitalists, by a future cheapness to be effected at the expense of mechanicks, thus coerced into factories. I do not deny that such would be the case, if the factory scheme could be carried to the same extent here as in England. This could not be effected, even if our populousness could furnish the materials, except by the English system of legislation to prevent mechanicks from breaking their factory chains, and compelling them to labour hard for low wages to supply the conspirators cheaply. But is not this coerced cheapness evidently imposed upon the mechanical occupation? If it could be effected in the United States, the first class of valuable and respectable citizens which would be ruined by it, would be the great body of mechanicks scattered throughout the country, who would be undersold by the factory capitalists, and compelled to relinquish their free occupations, and become hirelings at the factories. The promised consummation of the factory project, therefore, however tempting to farmers, would be a complete degradation of mechanicks from the equal and comfortable station they hold in society, to one much less desirable. Every present fraud offers a future bribe. The future cheapness offered to land-holders is too distant and uncertain, to induce them to enter into this conspiracy with the capitalists against the mechanicks; and besides, why should they get less than the English landlords for doing so? These have had their rents, and of course the value of their lands doubled or trebled into the bargain, and if without this additional bribe, cheapness would have been insufficient to compensate them for the evils of the capitalist-policy, the land-owners here may safely conclude that they will not be compensated by this promise alone, for co-operating in the conspiracy and that to make a good bargain, they ought to have the price of their lands doubled or trebled, like the English landlords.
The solitary promise of future cheapness to farmers, to arise from the factory policy, is met by many formidable considerations: If it could be fulfilled at some distant period, the great injury to society from reducing the respectable and numerous class of mechanicks down to Johnson's definition of them; from creating a moneyed aristocrat, and from establishing the policy of exclusive privileges, in which few or no farmers can ever share, would alone suffice to prove that the bribe, if received, would bring along with it a far greater cargo of evils than of benefits.
The prices paid by farmers to the great number of free mechanicks, scattered throughout the country, and by these mechanicks to farmers, promote neighborhood consumption; create much domestick commerce regulated by free exchanges, and not by a fraudulent monopoly; stimulate mutual industry, and increase the value of property but the prices paid to factory capitalists, so long as their monopoly operates, will to a great extent be employed in transferring and accumulating capital. A transfer of profit from industry to the accumulation of capital whether the profit is agricultural or mechanical, is a mutual diminution of the fund, acting and re-acting between industrious occupations, and begetting mutual prosperity. The more of his profits the agriculturist can save from the capitalist, the more employment he will give to his friend and neighbour, the mechanick; and the more of his are retained by the mechanick, the more he will consume of agricultural products, or enhance by his savings, the value of land. In either case would domestick commerce be rendered more beneficial to the society, by diverting these funds from this intercourse, to the accumulation of pecuniary capitals?
Monopoly is a word sufficiently indefinite, to enable ingenuity to obscure its malignity, by extending it to property acquired by industry and free exchanges; and though private property begets civilization, society, and happiness, it is made, by calling it monopoly, to supply arguments for its own invasion. If monopoly, like money, does really reach every species of acquisition, yet it may also possess good and evil qualities; and a discrimination between them is necessary, to reap the good and avoid the evil. The monopolies obtained by industry, admitting the phrase to be correct, are, like earning money, beneficial to society; those obtained by exclusive privileges, like stealing money, are pernicious. These qualities of monopoly are hostile to each other. The latter species of monopoly takes away the acquisitions of the former. The most enormous monopoly is that of monarchs of all the land within their territories, once established in Europe by the feudal system, and still subsisting in Turkey and some Asiatic countries. This deprives industry of its power to acquire, to a great extent. Of the same nature is the protecting-duty monopoly. A monopoly of land, enables the monopolist to extract wealth from the produce of land; and a monopoly of mechanicks, enables the monopolist to extract wealth from the produce of mechanicks. The monopolist in both cases is able to enhance the price of land or its produce, or the produce of his mechanicks, at the expense of buyers. Land was monopolized by the feudal system, incidentally to monopolize labour; by the factory system, the labour itself is directly monopolized. Next to that of land, a monopoly of manufacturing is the most extensive and oppressive of which we can have a conception. It even appears to operate more widely than a monopoly of land, because all are consumers of manufactures. It does not indeed take away the land itself of agriculturists, but it effects the same end which the feudal monopoly effected; it obtains a portion of its profits. If a law was made to bestow all the lands of the United States upon a few persons, it would be equivalent to a policy for enabling capitalists to build factories, and monopolize mechanicks. We should then have the English policy complete; landlords and tenants, capitalists and mechanicks. I know but of two modes of ascertaining whether a monopoly exists. One consists of appropriation without compensation, the other of an appropriation obtained by compensation. The latter is only called a monopoly, in attempting to confound it with the former. Loss and gain without an equivalent determined by free commerce, is established between farmers and capitalists by legal coercion, and if this does not constitute the former species of monopoly, the Committee may be right in denying its existence.
But it is urged that manufactures are in their infancy, and require monopolies or bounties to make them grow. When is this allegation of the imperfection of arts and sciences to cease, as a justification of bounties and monopolies? How long will the world be persuaded that it is an infant, and ought to be scourged into knowledge? Europe is told that she is not fit for liberty, because political science is yet so imperfect, that she cannot bear it. Asia has been lashed from a considerable proficiency in arts and sciences, to a renovation of extreme ignorance. And the United States, as if they had blundered immaturely upon a free form of government, are retracing their foot-steps towards the alleged European unfitness for it. When will a maturity of arts and sciences arrive, to enable mankind to reject bad, and adhere to good principles, if they should have adopted them by chance? We are told, that many centuries past, when the mechanical arts were extremely simple and rude, bounties and privileges were expended for the sake of their introduction and improvement. We might also be told, that once upon a time mankind were so savage, that the feudal system was necessary for their civilization. Neither fact proves the propriety of bounties and exclusive privileges, or of the feudal system at present. The advancement of mankind in political science, and mechanical arts, has entirely changed their character in several countries, and a great proficiency as to both has certainly appeared in the United States. Our mechanical knowledge is so considerable in the opinion of the Committee, that they propose to create capitalists to monopolize it. Our political knowledge has even soared too high, and ought therefore to be reduced to the European standard. Will the time never arrive, at which arts and sciences can be entrusted with freedom, and left to their own unrestricted exertions? We have probably fewer eminent scientific people than skillful mechanicks, compared with some European nations; would it therefore be wise to prohibit ourselves from a participation of foreign knowledge, and bestow a monopoly of the sciences upon a combination of learned men, as we propose to bestow a monopoly of the mechanical arts, upon a combination of capitalists? Are not such monopolies of an equivalent character? No, say the Committee, we will import from Europe its system of exclusive privileges, monopoly, and extravagance: this is a blessing but we will exclude her manufactures; these are a curse.
Circumstances must be the same, to make examples worthy of imitation. When the Committee go back to distant times in search of examples, and overlook existing circumstances, they suppress the facts which ought to govern the conclusion. When England was ignorant of the art of manufacturing, it was wise to purchase information of foreign mechanicks, and obtain their instruction; but after she acquired the art, the end was obtained, and the only good reason for the purchase, ceased. The distinction between bounties for introducing the arts of manufacturing, and bounties for enriching a class of capitalists, after they are introduced, is manifest. The bounties in one case go to the mechanicks themselves; in the other, to masters set over them by laws. In one case the mechanicks are enriched; in the other, they are impoverished. One offers them a reward for their skill; the other, its degradation. The policy of rewarding mechanicks for introducing and protecting manufactures, bears no resemblance to the policy of enabling a combination of capitalists to monopolize mechanicks. The suggestion of the latter policy, admits that our circumstances do not require the former. It is founded on the fact, that we have a sufficient number of mechanicks for the capitalist-monopoly to act upon, so as to make it highly lucrative. Our abundance of mechanicks, and not their scarcity, has suggested the speculation; and the same abundance refutes the application to us, of the ancient policy of purchasing mechanicks from other countries, and also the modern policy of purchasing a moneyed aristocracy at the public expense, composed, not of foreign artisans, but of native capitalists. It has been asserted, and perhaps truly, that the number of the mechanicks, and their families, amount to half a million. Whatever may be their number, it is sufficient to detect the misapplication of precedents for alluring mechanicks from foreign countries, to us; and also the pretence, that this important class of our citizens receive the bounties, bestowed on factories. Rewards to a few artisan emigrants are practicable; but bounties to one in about eight of our white population, of a sufficient amount to wed it to a particular occupation, are impracticable. A tithe is a heavy tax, but it is nothing compared with a bounty to half a million of people. The clerical class in England does not amount to one hundred thousand persons, and about one hundred and twenty people, support one person of that class. The project of the Committee is, to make about eight people here pay a bounty sufficient to weld one person to the manufacturing employment. This estimate cannot be so inaccurate, as to weaken the argument deducible from it. A bounty to a class so numerous, must either be an intolerable tax upon the rest of the nation, if it is large enough to effect its object; or if the bounty is so small, as to be a light tax to the rest of the nation, it must be insufficient to have any influence upon a class so numerous. Our protecting-duty bounty must be of one or the other character. Its insufficiency hitherto for the purpose of influencing our great artisan class, is admitted by the Committee. At each increase it has promised to do so, and all its promises have failed, as to its effects upon this numerous class, although a few factories have been created by it. Whence arises these disappointments? Either from the great number of the artisan class, which causes the bounties to be insufficient to influence it, or because mechanicks do not receive them. The fact is, that although our class of mechanicks is too numerous to be purchased like a few foreign emigrants, yet that the bounties insufficient to enrich half a million, are an enormous acquisition to two or three hundred capitalists, and awakens their activity, whilst it has no perceivable effect upon the mechanical class.
In order to keep up a resemblance between the old authorities quoted, and the policy of protecting duties, the encouragement of artisan emigrants, is, however, frequently urged. And yet we are told, that the few who have accepted the invitation, proclaimed by this policy, reject its blessings upon their arrival, and pass on into the western country, to exercise or renounce their trades. And how can it be otherwise? Will mechanicks flee from factories and capitalists in England to be monopolized by factories and capitalists here? Mark this argument of the Committee and their admirers. It is necessary, by a bounty, to induce mechanicks to exchange the English regimen for the American. The news of a bounty brings them here, and they find the same English regimen. It is that which the Committee profess to imitate, and propose to introduce. The disposition of he English mechanicks to fly from it; to abandon country and connections to get rid of it; and to shrink into the western country from its resurrection in this country, where there are no parish nor penal laws to nail them to the loom, explodes the expectation, that the policy abhorred by mechanicks there, will be adored by them here. On the contrary, a horrour of factories and capitalists, carries emigrants as far from them as they can get, and also keeps native mechanicks at a distance from them. If our factories were as well filled as the English, cross desertions might take place, as men are prone to fly from one evil to another; but the deserters must still remain in the ranks, and be subject to the same oppressive discipline, whatever might be the bounties or pay of their officers, the capitalists, unless they could flee further, as they do here. Can such emigrations ever bear the minutest resemblance to the rewards and honours bestowed by wise kings, upon ingenious mechanical emigrants, when they were scarce; and their trades mysteries? Must not the emigrant mechanick fall into the ranks of the five hundred thousand, and can his pittance of the bounty, even if he could wrest it from the capitalist, have any influence over him? The factory servility will be as much hated here as in England; and the facility with which it may be avoided, unites with this hatred, to disclose the reasons why neither emigrants nor natives perceive the advantage of earning bounties for capitalists, and degradation for themselves. The difference between exporting slaves to Africa to make them free, and importing mechanicks to make them slaves to capitalists, is nearly the same, as that between purchasing ingenious artisans by great rewards to teach unknown trades, and tempting emigrants by promising to them the English inflictions. Would slaves wish to go to Africa to be again enslaved? Why not tempt emigrants by bounties, to work on our farms, as well as in our factories? New-York has swallowed more of the emigration quackery than any other portion of the Union. I know not whether it has filled her factories, her poor houses, or her jails; or whether the recruits raised by bounties to capitalists, prefer running away, to running after these intercepted bounties.
Having examined the effects of the protecting-duty monopoly to the mechanical class, to test its professions of friendship for that class, let us proceed to enquire how it will promote the interest of the agricultural class, for which its friendship is equally sincere—indeed it professes to be a general friend. We have seen that its effect in establishing a perfect monopoly of mechanicks by capitalists, does not promote the wealth or respectability of these mechanicks; and it is now to be considered, whether an imperfect monopoly of agricultural profits, though it does not enslave the persons of the farmers, differs from a complete monopoly of mechanicks, and the profits of their labour, except as partial pilferings differ from a total robbery. By supposing that the farmers were reduced to the situation designed for mechanicks, that is, to work for daily wages, we shall get a clear view of the nature of the protecting-duty policy. When a combination of capitalists can both coerce persons and reap the profit of their labour, we have seen that this perfect operation of their monopoly, does not promote either the wealth or respectability of these persons. Such a system, rendered perfect as to farmers, must of course operate upon them as it does upon the mechanicks. But it only operates upon farmers imperfectly, by transferring a portion of their profits to capitalists, by the simple but effectual mode of creating an artificial scarcity of necessaries and comforts, to be supplied by capitalists at enhanced prices. If, however, we include every description of income-men without labour, we may very safely conclude, that all the profits of farmers, like those of factory mechanicks, are now reaped by capitalists of some kind or other. The farmers then are already invested with half the situation of factory mechanicks; their persons are freer, but the profits of their labour go to capitalists. In fact the whole United States are, by the protecting-duty laws, turned into one great factory, and all the people are placed upon the factory regimen as to profits. These are transferred by laws to a vast pecuniary aristocracy, just as the profits earned by factory labourers go to an owner. If we admit that it is as hard to get out of our country as out of a factory, our persons also are under restraint like mechanicks in a factory and the similitude between the mechanicks in a factory, and the farmers in their own country, under the protecting-duty policy, becomes complete. Both are sufficiently incarcerated to be under a necessity of yielding up the profits of their labours to a combination of legal capitalists.
Intricate as the science of political economy has been rendered, by the artifices of exclusive privileges, it yet contains some principles so undeniable, as to explode the whole mass of partial and perplexing calculations, used to conceal or evade them. Among these principles the most important is, that land is the only, or at least the most permanent source of profit; and its successful cultivation the best encourager of all other occupations, and the best security for national prosperity. If this principle can maintain itself against the sophistry of exclusive privileges in any country, it must be in the United States. If the cultivation of land flourishes, all other occupations prosper; if it languishes, they decay. Malthus in his late able treatise upon political economy7 observes, “that the causes which lead to a fill of rents are, as may be expected, exactly opposite to those which lead to their rise; namely, a diminished capital, diminished population, a bad system of cultivation, and the low market-price of raw produce. They are all indications of poverty and decline, and are necessarily connected with throwing inferior land out of cultivation, and the continual deterioration of land of a superior quality.” To prevent this general national decline, agricultural capital (the capital he means) is indispensable. If that is deficient, the most efficacious security against national poverty, and the most efficacious excitement of talents and industry, are lost. Profits are the rents of land-owners in the United States. The policy of diminishing these profits to increase the wealth of exclusive privileges, has already produced those indications which Malthus foretels. The cultivation of inferior lands has been thus rendered wholly unprofitable. The lands of the United States are chiefly of this quality. Good land is continually impoverished. Both effects proceed from the property or profit-transferring machines, called exclusive privileges, and government extravagance. It is admitted by the Committee, that exuberant capitals have been accumulated in a few hands, but that agriculture wants them. What can have produced the want, but the accumulation? Then this very accumulation has produced our national decline, by robbing agriculture of the capital by which only this decline can be prevented. Why has the accumulated capital been unable to find employment in our spacious country, where capital has been so successfully employed for two centuries, under provincial disadvantages, and all the sufferings from foreign restrictions? It is because exclusive privileges, which bestow the capital, are too wise to invest it in an occupation, the profits of which are tapped perpetually by their various gimlets. Capital, like rats, deserts a filling house; and who can so well discover that the dwelling is ruinous, as those who are gnawing it down. Capitalists will no longer invest their money in agriculture, because that very money demonstrates to them, that agriculture can no longer be profitable. Is it not highly unreasonable that the capitalists should be continually pressing for augmentations of income, when the agricultural occupation is already reduced by the transfers of its profits, to such a state, that they will not in this wide country, abounding in a choice of climates, soils, and products, venture their money in so hopeless a business? And are they not perfectly right? Who in his senses would place his money where it would certainly be taken away by a combination of which he is himself a party?
Not pretending to any authority myself, it may be excusable to insert several other quotations from Malthus, the latest, and perhaps the ablest of the English economists. He vindicates to a great extent the doctrines of Adam Smith. But what is authority? Fashion only. A great man, discerning that the doctrines of Adam Smith or Malthus are hostile to his views, has only to say that they are calculated to do much mischief, and the watch-word is caught and disseminated by his admirers, his flatterers and accomplices. Avaricious or ambitious authority, purchased by bribes or patronage, is opposed to honest authority, only sustained by truth. The inquisition itself was defended by this species of authority, because it was a mode of getting power and money. Thus, the authority of all writers on the side of justice, liberty, and good government, is invariably undermined. It is perpetually assailed by exclusive privileges, monopolies, frauds, ambition, and avarice, to deprive mankind of the only beacons which can warn them of the approach of those enemies, by which their prosperity and happiness are destroyed. The following quotations from Malthus are therefore offered, not as authority, but as appeals to the understanding of the reader.
that the fertility of land, either natural or acquired, may be said to be the only source of permanently high returns of capital. In the earlier periods of history, monopolies of commerce and manufactures produced brilliant effects, but in modern Europe there is no possibility of large permanent returns being received from any other capitals, than those employed on land. But that capitals employed on land, may sometimes yield twenty, thirty, forty, fifty, or even sixty per cent. A striking illustration of the effects of capitals employed on land, compared with others, appeared in the returns of the property tax in England, which yielded six and a half millions from their income, whereas those employed in commerce and manufactures, only yielded two millions.
Another most desirable benefit belonging to a fertile soil is, that states so endowed, are not obliged to pay much attention to that most distressing and disheartening of all cries to every man of humanity; the cry of the master-manufacturers and merchants for low wages, to enable them to find a market for their exports. If a country can only be rich by running a successful race for low wages, I should be disposed to say at once—perish such riches. The peculiar products of a country, will generally be sufficient to give full spirit and energy to all its commercial dealings, both at home and abroad; while a small sacrifice of produce, that is, the not pushing cultivation too far would, with prudential habits among the poor, enable it to maintain the whole of a large population in wealth and plenty.
It will readily be allowed that an increase in the quantity of commodities, is one of the most desirable effects of foreign commerce; but I wish particularly to press on the attention of the reader, that, in almost all cases, another most important effect accompanies it, namely, an increase in the amount of exchangeable value. And that this latter effect is so necessary, in order to create a continued stimulus to productive industry, and keep up an abundant supply of commodities, that in the cases in which it does not take place, a stagnation in the demand for labour is immediately perceptible, and the progress of wealth is checked.
It cannot for a moment be doubted, that the annual increase of the produce of the United States of America, estimated either in bullion or in domestick and foreign labour, has been greater than that of any country we are acquainted with, and that this has been greatly owing to their foreign commerce, which, notwithstanding their facility of production, has given a value to their corn and raw produce, equal to what they bear in many countries of Europe, and has consequently given to them a power in commanding the produce and labour of other countries quite extraordinary, when compared with the quantity of labour which they have employed.
What I wish specifically to state is, that the natural tendency of foreign trade, as of all sorts of exchanges by which a distribution is effected, better suited to the wants of society, is immediately to increase the value of that part of the national revenue which consists of profits, without any proportionate diminution elsewhere, and that it is precisely this immediate increase of national income, arising from the exchange of what is of less value in the country, for what is of more value, that furnishes both the power and will to employ more labour, and occasions the animated demand for labour, produce and capital, which is a striking and almost universal accompaniment of successful foreign commerce.
It is unquestionably true that wealth produces wants; but it is a still more important truth, that wants produce wealth. One of the greatest benefits which foreign commerce confers, and the reason why it has always appeared an almost necessary ingredient in the progress of wealth, is, its tendency to inspire new wants, to form new tastes, and to furnish fresh motives for industry. Even civilized and improved countries cannot afford to lose any of these motives.
To interfere generally with persons who are arrived at years of discretion, in the command of the main property which they possess, namely, their labour, would be an act of gross injustice; and the attempt to legislate directly in the teeth of one of the most general principles by which the business of society is carried on, namely, the principle of competition, must inevitably and necessarily fail.
The natural and permanent tendency of all extension of trade, both domestic and foreign, is to increase the exchangeable value of the whole produce.
In leaving the whole question of saving to the uninfluenced operation of individual interest and individual feelings, we shall best conform to that principle of political economy laid down by Adam Smith, which teaches us a general maxim, liable to very few exceptions, that the wealth of nations is best secured by allowing every person, as long as he adheres to the rules of justice, to pursue his own interest in his own way.
These quotations have not been applied severally in the course of this treatise, because I had proceeded to the page where they commence, before I saw Malthus; and therefore the memory of the reader must be chiefly taxed with their applications. The unforeseen coincidences are remarkable, and they might have been greatly extended by other quotations, had not a fear of prolixity forbidden it. The leading principles; that land only can yield permanent and sometimes great profits, in the United States especially; that manufacturing in the present state of the world must yield lower profits; that arbitrary depressions of wages are necessary to obtain these low profits; that the products of good land, well cultivated, will bestow spirit and energy both on domestick and foreign commerce; that an increase of foreign commodities will both augment and enhance the price of domestick productions; that the freer are exchanges the more industry is encouraged; that restrictions upon this freedom produce stagnations of labour and check the progress of wealth; that the wonderful prosperity of the United States for two centuries has been owing to foreign trade; that this consists in exchanges of what they did not want for what they did want; that wants produce wealth; that laws against competition must fail, or cannot produce good effects, as we have experienced; that an extension of trade increases the exchangeable value of produce; and that the great principle of political economy is to leave to individuals the right of pursuing their interest in their own way are all clearly asserted.
The fact, that the general diffusion of manufactures throughout the commercial world, both by home fabricks, and the competition of many nations, ought to be maturely considered, before we cripple agricultural profit, from a hope of reaping more profit by becoming adventurers in this overstocked market. A forbidding and permanent competition every where stares us in the face. If the competition in agricultural products was equally universal and permanent, yet the agricultural occupation would stand on the same ground with the manufacturing but with us it possesses the exclusive advantages arising from the cheapness, freshness, and goodness of our land; from always having a surplus to be enhanced by occasional fluctuations of seasons; and from often having the value of its products increased by foreign wars, against being engaged in which our situation shields us.
But a comparison between fostering agriculture or manufactures, does not exhibit the true question in debate. The policy we have been pursuing for some years, is that of surrendering our agricultural advantages, and driving our best customers into other markets, for the sake of fostering the unproductive capitalist employment; and it must be confessed that we have succeeded in both objects to a great extent. I am not satisfied with the usual division of productive and unproductive labour. It comprises in one class all bodily, and in the other, all mental labours; and seems eminently defective as to the latter class, for want of a discrimination between such mental labours as are good, and such as are bad. By confounding both under the general term, unproductive, they are artfully rested upon the same principles, however different in their effects. There may be more perspicuity by dividing labour, first, into physical and mental, and then dividing mental, into moral and immoral labour. Mental labours cannot be correctly called unproductive, because they are certainly productive of good and evil to a great extent. Government has been assigned to the class of unproductive labour, but it produces much good by frugality and justice, or much harm by extravagance and exclusive privileges. Philosophers, authors, lawyers, physicians, and tutors, are assigned to the same class; but they produce knowledge, justice, health, and instruction, and like governments, render compensations for the money they receive. Merchants excite and satisfy wants, encourage industry, and enrich nations. Exclusive privileges, monopolies, oppressions, and even thefts are also worked by mental labours; but instead of compensations, they render injuries for the money they obtain. The powers of physical labour suffice to produce a surplus of subsistence beyond its own necessities, and this surplus is apparently the provision made by the laws of nature, for the maintenance of the mental labourers, necessary to the existence of society. But a correspondence between natural and social laws, does not justify the establishment of that class of mental labourers, which produces social mischief. To distinguish true from fake political economy, we ought to distinguish beneficial from pernicious mental labours; and not comprise both under the common appellation, unproductive, both because their effects are different, and also because neither, strictly, deserve that character. But foreign economists have very ingeniously used the fact “that consumption bestows value on production,” not only to justify the policy of sustaining by social institutions a class of useful mental labourers, but also to justify all the modes for transferring property or profit from useful labour, whether physical or moral, to useless and pernicious immoral labour, upon the ground, that it is beneficial in society that it should contain a class of consumers to bestow value on consumptions. The force of the argument applied to the bad class of mental labourers, is condensed in the assertion, that it would be thrifty for a man to give two dollars of his money to another, that this other might give him two dollars for a bushel of his wheat. The doctrine of purchasing consumers is adopted by the Committee; the object of which is to prove, that oppressive taxation and exclusive privileges will add to this class, and that it is of no consequence whether it is created perfa aut nefas, because it is a market for productions. It is a doctrine as applicable to highwaymen as to any other immoral capitalists; they are also consumers. But is it not better to get consumers by natural and voluntary modes, than by artificial and coercive modes; such as render compensations for their maintenance, than such as do not? If the individuals who compose a society, are left to arrange themselves into the two classes of physical and moral labourers, the supply of both will adjust itself to the demand; but if the supply of consumers is furnished by the Government, an overstock has never failed to appear highly oppressive to producers, who are forced by laws to maintain them. A sufficient stock of consumers will never be wanting, if men are left free, because the motive for acquiring wealth being to get into the class of consumers, or to get thereby moral accomplishments, it is a class into which all are pressing as fast as they can, and more likely to be sufficiently filled without the help of laws, than any other in society. The pasture for consumers will be filled naturally up to the food; but when people are turned into it by laws, without the passport of talents, industry is used like a common, and grazed as close as possible. Out of these observations arises a very important distinction as to capitalists. Those who acquire capitals by material productions or moral services, are the really useful capitalist class, as consumers, as giving value to productions, as encouraging industry, and as extending comforts. If they use their capitals in improving the face of the earth, for which there is always ample room, they are most eminently beneficial to mankind. And if they give them to their children, they rarely fail, in a generation or two, to breed consumers sufficient to keep a supply of consumption equal to production, without manufacturing them by arbitrary laws, and without subjecting the public to any expense; on the contrary, capitalists or consumers created by exclusive privileges or fraudulent laws of any kind, are, unexceptionably, drones with stings.
Highly valuable as manufactures undoubtedly are, yet all writers upon political economy agree that they are secondary, and unite in allowing the first place to agriculture. Capital is essential to both occupations. If they were of equal value, nothing would be gained by transferring the capital of either to the other, and much would be lost by transferring the capital of either to the class of capitalists I have just attempted to describe. But if mechanicks are reduced to a state of vassalage, and both their profits and the profits of farmers are transferred to such a class of capitalists, according to our existing protecting-duty and factory policy, we have already obtained an enormous overstock of consumers of the profits of labour, as always happens when this family is created by laws, and not by free industry and fair social intercourse; and we are feeling that it grazes too close. Taxes are not burdens but blessings to this whole family, because they contribute less than they receive, and an increase of taxation is a new acquisition to them. Is it this fact which has influenced the United States to submit to the policy of a capitalist aristocracy? Neither bankers, nor pensioners, nor lenders to the public, nor receivers of factory bounties, pay any thing to the treasury as such, for their personal consumption would exist if they were neither bankers, nor pensioners, nor lenders, nor receivers, of factory bounties. As capital is created by profit, and as the useful occupations cannot flourish without capital, each transfer of their profits, whether to the government by unnecessary taxation, or to exclusive privileges, diminishes their ability to promote consumption, and the national prosperity; and establishes a domestick commerce by which the majority pays all, and receives nothing, and the minority receives all, and pays nothing. The rapidity with which such a domestick commerce impoverishes one party and enriches the other, is demonstrated by the present situation of the capitalists and the rest of the community. This, and not foreign commercial restrictions, is the cause of the public distress. Though prices have fallen, commerce, if undisturbed by domestick restrictions, would soon establish an equilibrium in the commercial world, leaving a profit less as efficacious in fostering individual internal improvements, as one nominally greater; if this inferiour profit is not taken away by the really unproductive families; but if these families continue to extract from the productive classes of both material and moral comforts, the same sum of money as when profits were higher, they are deprived of the only means by which they can advance the national prosperity, and as the classes producing neither material nor moral benefits, do not advance it at all, indications, of national poverty and decline, are the unavoidable consequence. This observation is sustained by the distinction between the capitalists and mechanicks, and between the capitalists and agriculturists, and is equally applicable to both the productive classes. Agriculture cannot be destroyed (the question as skilfully stated by the Committee) but it cannot flourish, by being deprived of its profits or capital. If profit is necessary (as the Committee insist) to make capitalists flourish, it must also be necessary to make farmers and mechanicks flourish.
But we are again met by the English example. Both agriculture and manufactures flourish in that country, and therefore it is inferred, that, by adopting the English policy, they may both be made to do so here. If the physical and moral circumstances of the two countries were the same, the argument would prove the practicability of the imitation proposed, and the inquiry would then turn upon its justice, and whether it was calculated to increase or diminish the happiness of mankind. But because a system is practicable in England, it does not follow that it is practicable here. That which is allowable for the ends of sustaining a monarchy or an aristocracy, may be tyrannical in a republic. Her populousness, the scarcity of land, and the difficulty of subsistence, are remorseless goads for driving industry to its utmost stretch, solely applied by landlords and capitalists to tenants and mechanicks, because they have been inured to them by the help of a standing army, and cannot flee from their inflictions. But here neither of these goads exist; and, instead of these resources for stimulating industry, we can only excite her by leaving her profits in her own hands, and suffering her spontaneously to create capitals for improvement, consumption, and reproduction. Whether this end is obtained by free-will or legal coercion, the effect in advancing national prosperity, might in some degree be the same; but the attempt here to obtain it by the impracticable legal coercive mode, has paralyzed the practicable free will mode, without deriving any advantage from its substitute, consisting of a monopoly by landlords, capitalists, officers of government, and pensioners, of nearly all the profits made by tenants and mechanicks; and of a considerable portion of those derived from extraordinary mental talents. Our land-owners being the tenants of their own lands, far from having an interest to join in this conspiracy against productive labour, are its chief victims. An imitation of the English policy for transferring property from productive to unproductive classes, has taken away the profits and capital able to excite free industry, without being able to make any amends for its discouragement, because it has not the English scourges for lashing enslaved industry up to its utmost exertion.
The English coercive system being impracticable in this country, a substitute for it became necessary, which is attempted to be found by cutting commerce in two, for the end of establishing a compulsory mode of transferring property—oiling the wound with two promises; one, that the way to keep it alive is to kill one half of the other, that the reserved half will bring us more money than the whole. Suppose that these promises should bring us in ship loads of money instead of ballast. Whilst the depreciation produced by this expected influx of money, should travel faster than taxation and exclusive privileges, less property would be transferred; but the managers of the transferring policy, would very soon take care to make themselves amends for it, and when the ebb happened (for money cannot be converted into an inland sea without tides) they would find their incomes so much improved by its appreciation, that they would not love them less, nor be more willing to diminish them. We have had some experience of the effects of this money-importing project, supposing it should succeed, in a moneymaking project, which did succeed. A plenty of currency induced legislative bodies to increase their wages; governments to increase their expenses, extend their patronage, and bestow pensions; and capitalists to increase protecting duties; and has taught us, by woful experience, the effects of a redundancy of money. It is used by the property-transferring policy to augment its incomes, and ultimately to punish the credulity which believes that a plethora of money will advance the wealth or happiness of majorities. Our protecting-duty capitalists have had their appetites so whetted by the augmentation of their bounties arising from the appreciation of money, that they are craving still more. The English system for transferring property, works by compulsion; ours by promises; but their effects are the same; they both transfer property from useful and productive, to immoral and unproductive occupations. Banking promised to foster commerce, and make us rich by a plenty of money—the money came, and made us poor. Protecting duties promised to bring us plenty of money by half-killing commerce, and patching a domestick monopoly to the other half—they have brought distress. What good could the promise of a second plethora do us, without an importing commerce? Both these promises have been substitutes for the English coercive mode of transferring property and they operate upon farmers in this country, exactly as rents do in England upon tenants, except that they transfer the profits of the cultivators of land to pecuniary capitalists, instead of landlords. But the difference between the land-owners in the two countries is greatly in favour of the English. There they take care to benefit themselves by the property-transferring policy, make corn laws to increase their rents by enhancing the price of bread, and chiefly confine the factory capitalists to what they can make by their monopoly of mechanicks, and exporting their commodities. But here the factory capitalists have managed far more skilfully, by transferring to themselves the profits of agriculture in addition to those they may obtain from a monopoly of mechanicks; and the land-owners have discovered nothing of the dexterity, or self-defense, exhibited by the English land-owners. Hence the agricultural employment has become so unprofitable, that Hope, though an enthusiast, shrinks from it as forlorn, and the capitalists, as their object is profit, flee from it as desperate.
To this cause, in a great degree, must be ascribed the chief indication, according to Malthus, of the national decline which we regret. The translation of the profits of agriculture, which it ought to retain to prevent this decline, to the hands of unproductive capitalists, is effected by one of the plainest principles of political economy. Scarcity enhances, and plenty diminishes, prices. The scarcity of manufactures, produced by the protecting-duty policy, must of course enhance their prices; and the plenty of agricultural products, produced by shutting them out from foreign markets and prohibiting to them sundry foreign exchanges, must also diminish the prices of these products; and thus two screws are at work to diminish agricultural profit and capital. A legal, has the same effect as a natural, scarcity, and there is no difference to the sufferer, whether the loss inflicted on him proceeds from one or the other mode of effecting it. If a famine or a monopoly of grain, produces the same degree of scarcity, and the same enhancement of price, the purchaser would sustain the same deduction by either from his capital or the profits of his labour. What would the purchaser of grain think of a proposal to keep up an artificial famine of it for an indefinite period to enrich its monopolies, because they promised to make it cheap at some future day? That which a purchaser of manufactures ought to think of our policy for creating an artificial famines of these articles, almost as necessary as grain, because they also promise a future cheapness. Is it difficult to discern that artificial and natural famines operate in the same way, and that neither can be blessings to those who pay the enhanced prices, which both produce?
That may be true, the Committee might reply, but we propose to bring about a famine of agricultural products to increase their prices, and an abundance of manufactures to diminish theirs. These two cards are all they propose to deal out, and they suppose that those who hold them, will play very lovingly into each other's hands. The Committee do not observe that they calculate in the two cases upon contradictory principles. If the consequence of making manufactures scarce and dear, should terminate in their plenty and cheapness, an encouragement to agriculture which would increase its products, would not have the effect of increasing their prices or value. It is therefore a fallacy to suppose that agriculture can ever be compensated by future high prices, for those now extorted from it by capitalists, because if it derives encouragement from the protecting-duty project, that encouragement would have the same effect in diminishing its prices, as it is supposed it will have in the encouragement of manufactures. The modes resorted to for the encouragement of the two occupations are exactly opposed. One is to be encouraged by increasing prices, the other by diminishing them. If both should have the effect of producing plenty, cheapness ensues in both cases, and a compensation to agriculture for its temporary disbursements can never happen. In fact, however, the plenty and cheapness of land must, for many centuries, cause a plenty of agricultural products; and, as the principles of commerce will for ever annex cheapness to plenty, agriculture can derive no augmentation of its prices from the bounties it is now paying to capitalists. The project is therefore only a temporary transfer of property, which proposes, by giving high prices to manufactures and low prices to agricultural products, to produce a plenty of both, and then to leave this plenty to regulate future prices by the commercial principles of free exchanges, without even disclosing a possibility of reimbursement.
The spice-burning policy of the Dutch, if it ever existed, has been quoted to prove the wisdom of the destroying portion of the protecting-duty policy; and the manufacturing policy of England is relied upon, to prove the wisdom of its creating portion. Protecting duties will diminish the products of agriculture, and enhance their price by their scarcity; and they will increase manufactures, so as to make them cheap by plenty, to bear exportation. Now, it seems to me that by increasing the exportable surplus of agricultural products, we shall with more certainty increase their prices, than by diminishing them, provided we invite commodities from all parts of the world to exchange for them. The greater this surplus, the more it will be depended upon by foreigners, and this dependence will extend competition. If the surplus is small, its influence is trifling, and it may be abandoned by foreigners without difficulty. We have suffered by no error more severely, than by that of assigning too great an importance to our surplus of bread stuff, which has induced us to imagine that we could starve nations, and tempted us to contract markets which ought to have been extended, for the purpose of coercing them by a necessity which we supposed would be imperative, but which was hardly felt even as an inconvenience. Our soils and climates have not invested us with any article resembling spices, and as all our commodities meet with competition, plenty and cheapness, and not scarcity and dearness, must be our reliance for a profitable commerce. The Chinese tea-policy would be better for us, than the Dutch spice-burning policy. Instead of diminishing the quantity of this agricultural product, they increase it; and retain the trade by its plenty. If they should produce a scarcity by burning or by any other artifice, and enhance the price, they would induce other nations to cultivate it, and drive their customers to other markets, as we have done in the case of bread stuffs. All our agricultural productions are rivalled, and the competition can only be met by industry, plenty, cheapness, and a frugal government. Thus only can we avail ourselves of the plainest principles of political economy. Plenty begets cheapness, cheapness invites customers, customers produce competition, and competition enhances prices. Plenty is also ready for emergencies or casualties, caused by fluctuations of seasons or foreign wars, so frequently occurring in some country or other; and would undoubtedly, in union with a commerce freed from our own restrictions, constitute the best basis for political economy, of which the United States are susceptible. By diminishing agricultural products, to increase manufactures, we only surrender our best commodities for the sake of trying others, which others must be subject to the same commercial principles; and it is easier for us to rival other nations in agricultural than in mechanical commodities. The latter could only force their way by superior plenty and cheapness, and could never derive any assistance from an abundance of fresh land, foreign wars, or bad seasons, in other countries. As success in both cases depends on the same principles, economical, political, or commercial, we have only to compare the probabilities with each other, to determine our choice.
The English precedent, relied upon by the Committee to justify their project, defeats it. Manufactures constitute the occupation most able to produce exportable commodities, in their circumstances; agriculture is that most able to produce exportable commodities in ours. The English, far from endeavoring to diminish the mechanical productions, to enhance their price by a scarcity, endeavour to increase them, for the purposes of extending their commerce by plenty, and meeting competition with cheapness. This plenty and cheapness, by multiplying customers, procures for their manufactures more markets and better prices than could otherwise be obtained. Such is the English political economy as to their kind of exportable commodities. That of our restrictive policy, advocated by the Committee, is to burden agricultural products, constituting our species of exportable commodities, with bounties to factory capitalists; to diminish their quantity to cut off their markets; and to disable them from meeting competition by plenty and cheapness; so as to extend our commerce and create new customers, as the best mode of keeping up their value. And it is very remarkable that the object of this project deduced from transitory circumstances, is to terminate in the very same political economy subservient to the laws of commerce, applicable to agricultural exportable commodities, namely, that of entering into a manufacturing competition with all the world, founded upon plenty and cheapness. The principles which must govern our competition, either in agricultural or manufactured exportable commodities, with commercial nations, being the same, the question is reduced to the plain computation, as to which class our means for success are most extensive. Had the English destroyed their manufacturing competition with the rest of the world, in order to create an agricultural competition, the precedent would have been exactly in favour of the political and commercial economy, advocated by the Committee; as they pursued a different policy, it is exactly against them.
But whether the prices of agricultural products are high or low, it equally furnishes arguments for exclusive privileges and unproductive classes. If they are high, farmers are able to pay high taxes and bounties to self-enriching projects; if they are low, it is for want of more of these projects to raise them. But political economists have never been able to discover any mode for securing high prices, or even a measure by which they can be regulated. Both money and corn are imperfect measures. It has been impossible to count the circumstances, or unravel the complexity, affecting the commercial intercourse among mankind. Climates, soils, population, wars, industry, fashions, discoveries, stratagems, and the whole mass of human passions, enter into the computation. Yet the Committee propose to govern this ungovernable complexity by local laws, and promise to farmers a compensation dependent upon a hopeless success. They have discovered that the existing low prices of agricultural products proceeds from the want of a sufficient number of endowed factory capitalists. But a fall in these prices is common to all commercial nations. England has experienced it. Was her decline of agricultural prices also occasioned by a want of such factories? If not, they are no remedy against it. Land has also fallen in price. Has this also been occasioned by the want of factories drawing bounties from land? Had prices been left to the umpirage of commerce and self interest (arbitrators so powerful as to prevent the fraudulent attempts to regulate prices by local laws, from being quite ruinous to nations and individuals, though they have uniformly suffered severely from them) we should have avoided the evils which these attempts never fail to produce. To conciliate the farmers towards their attempt to regulate prices, the Committee tell them that it will violate justice in their favour, by having the effect both of raising the prices of their products, and diminishing those of manufactures; but ought not a good government to protect the factory owners against their fatuitous ardour to obtain this double misfortune? The Committee have celebrated the acuteness of the Americans in discerning their interest, but instead of leaving this acuteness to take care of itself, they propose to render it inoperative, for the sake of showing their own acuteness in surmounting the impossibility of regulating prices. They will not suffer our “eagle-eyed” acuteness to discern which employment is the best, agriculture or manufacturing, whilst they leave it a competence to discover what species of manufacturing will be most profitable, trusting that the capitalists will pounce upon the richest prey, and not forget their interest in their eagerness. But the agricultural eagles are supposed to be too dim-sighted to see their interest. Local laws have never been able to regulate domestick prices, even by the aid of local currencies; how then can they regulate both domestick and foreign prices, by the universal medium of exchanges?
To subvert the unalterable laws of commerce, upon which political economy is founded, the Committee have selected several particular articles, the prices of which they say are reduced by the protecting-duty policy such as manufactured cottons. The prices of these they assert are below what they could be imported at. If so, it is obvious that the reduction is owing, not to this policy, but to the primary and invariable cause of cheapness, namely, our plenty of the raw material. Cheapness being the natural consequence of plenty, could not have been caused by laws, which neither increased nor diminished the plenty of the material which caused the cheapness. Thus, our plenty of wood enables us to build ships cheaper than some nations can, and our plenty of wheat and tobacco, enables us to sell those articles in a manufactured form, cheaper also than they can be imported. The cheapness in all these cases results from the local plenty of the raw materials, and can by no means be ascribed to cunning laws. To impair the value of the surpluses remaining after supplying our own factories, by restricting the freedom of exchanges, and by prohibiting the acquisition on the best attainable terms of things which we want, in exchange for those surpluses which we do not want, causes a useless loss to the agriculturist, and a general loss to the nation. This exhibition of particular articles therefore, to prove the goodness of the whole cargo of the protecting policy, is that of a shop-keeper who puffs off two or three articles in his store; but credulity only believes that these two or three articles suffice to establish the goodness and cheapness of his whole stock. With people of understanding the artifice rather excites a suspicion that the rest are bad and dear. Of the same complexion is the artifice of selecting and retailing in debate a few articles, as a proof that an immense system, compounded of innumerable items, pecuniary and political, is good throughout. No project was ever so poor and dark, as to afford no glittering specks—no glimmering delusions. As the isinglass sometimes found in gypsum does not constitute its character, so a few glossy particles sprinkled in a widely-operating system, are no proofs that it will advance the national prosperity but when these particles are stolen from the principle of plenty and cheapness, as in the cases of cotton, wheat, and tobacco, it is on the contrary a proof that the system does not even contain any glittering specks at all, but is opaque throughout.
Several of these retail cases are urged as if each was a new argument, though they all admit of the same answer. They seem however to be comprised in the assertions, “that it now takes as much wheat to buy one yard of linen, as would formerly buy four, and that foreign manufacturers and domestick importers will take nothing but our money for their goods.” The Committee might have added, that in the spring of 1821, it took as much wheat to buy a yard of domestick cotton shirting, as would at one time have bought three or even four also. Such fortuitous occurrences are frequently arrayed against unchangeable principles, and if they could be thus destroyed, mankind would soon have none left to steer by. If these assertions are true, what further coercion can be necessary to drive people from the plough into the loom? Is not the price of shirting sufficiently high without enhancing it to enrich capitalists? If money only will be received for foreign goods, must not the trade end soon enough of itself, without hastening its death by restrictions, and infallibly effect one object of the protecting-duty policy—that of compelling us to manufacture. We have not exportable money enough to pay for one year's importation, and when our money is out importations must cease, if our agricultural products will not be received in payment; and when importations cease, manufactures will be in sufficient demand. But the fact is, that as commerce cannot exist without exchanges, so no nations which trade with us, will conceive the contrary and though they will get our commodities as cheap as they can, yet this very cheapness will bring to us frequent opportunities of retaliation.
To get over so plain an argument, and to provide against inferences from their own assertion, the Committee suggest that we are indebted to some other markets, to enable us to buy English manufactures with money, and then they endeavour to prove that a circuitous commerce, by which we make one nation pay for what we buy from another, is of no importance, by presenting us with an Utopian picture as the model of their commercial and political economy. A nation, they say, “differs only from a village in extent,” and that “the model of a society composed of an hundred men, following an hundred different occupations, dealing with each other,” is a good commercial example for a great nation. This village policy overlooks all differences of climates and soils, and seems only designed for one of those fortunate islands when found, which contains every thing which man can want; but being apparently antediluvian, or at least aboriginal, the Committee have thought proper to defend it by an encomium on household manufactures; observing also, that the greatest means of exchange, is said to be the most prosperous situation. This confusion of ideas is not to be reconciled. Why should factory owners receive bounties from farmers, if household manufactures are the best security for the prosperity of farmers? Why should the means of exchange be diminished, if the greatest means of exchange constitute the most prosperous situation? How can a mighty nation be compressed, morally speaking, into an insignificant village, if an insignificant village cannot be dilated into a great nation? But the merchant's ledger is the Pythian oracle ready to supply the Committee with the responses they suggest, in order to demonstrate that the policy of promoting exchanges, so good between one hundred villagers, will be bad between one hundred nations, or at least much worse than household manufactures. That manufactures promote exchanges; that the greatest means of exchanges constitutes the most prosperous situation; that household manufactures to diminish exchanges are still better, and that the means of exchange should be narrowed and compressed in a great nation until it resembles a village of an hundred men, are positions making, when combined, a very good oracle. It is true, that farmers, aided by commerce and exchanges, have frequently thrived by the additional assistance of household manufactures, but in no instance that I know of have they been able to thrive by household manufactures, without the aid of these two auxiliaries. These are the means by which industrious farmers certainly gain a considerable balance of trade from other countries for their own, by supplying many of their wants within themselves; and by prohibiting foreign commerce and free exchanges, these household manufactures have no longer the important effect of causing a multitude of surpluses beyond expense, silently to unite in procuring the envied balance of trade, and promoting to a great extent, the national prosperity. The experience of five or six revolutions between the liberty of free exchanges, and the coercions, accidental or legal, creating a necessity for household manufactures, have convinced me of their inefficacy for producing wealth, when uncombined with foreign commerce. We are not obliged to elect between foreign manufactures and household manufactures. Let all be free to individual preference; let our eagle-eyed people choose and abstain for themselves. They generally strive to make some surplus annually, and know how to effect it better than the government can inform them. Their surpluses constitute the only solid national profit, and therefore whatever defeats their efforts causes a national misfortune. With this freedom of commerce the ledgers of the farmers will be hard enough for the ledgers of the merchants. So far as my experience has extended in Virginia, I believe that a balance is always due by the mercantile to the agricultural class; and that the latter class suffer more from the bankruptcies of the former, than the former class does from those of the latter.
But however this may be, even our household manufactures, eulogized to curry favour with the agriculturists, will be cut up by the policy of excises; proposed as a substitute for the loss of duties. They must operate entirely in favour of the factory monopoly, and deprive the agriculturalists and many other people, of the comforting household manufacturing resource, against fortuitous misfortunes, and premeditated legal contrivances to foster an oppressive aristocracy. Excises are quite convenient to factory, and excessively teasing to household, manufactures. An excise is reimbursed to the factory owners by the consumers, whereas it falls upon household manufactures as a direct tax, without any reimbursement. In England, an excise is a bonum to capitalists, and a malum to farmers. In the United States, it will be particularly oppressive upon the whole inland district; the few villages excepted where factories are established; and equivalent to a tax upon the land itself, imposed by the acre, and not according to its value. Under the excise system of raising a revenue, a man who cultivates poor land, pays as much for the same article taxed, as he who cultivates rich: it is therefore a tax by the acre, if the article taxed is produced by land. If an excise is laid upon corn, wheat, rye, hops, and many other articles, it must be by a measure common to every quarter of the Union, because the constitution requires uniformity and this uniformity would compel the raiser of corn, and most other agricultural articles, to pay twice as much tax, in those districts where a barrel of corn is worth only one dollar, as in those where it is worth two. Such would be also the case in an excise upon many other domestick manufactures or products. The tax upon them when they are consumed in the family, is completely a direct one, except that it cannot be regulated by the rules applicable to a land tax, and must therefore be excessively unequal, locally and individually. If factories are dispersed throughout the inland district, it will not alter these effects, because excises must either extend to a great number of household manufactures, or these factories could not furnish objects for an excise to act upon. If farmers consume the factory manufactures, they must pay the excises laid upon them, which would be equivalent to the payment of the same taxes upon household manufactures. If they do not consume them, but fly from these excises to household manufactures, the excises must follow them, or more unavoidable modes of taxation must be resorted to. Either way the inland districts will be the chief sufferers. Direct taxes upon land are paid by the census of a State, and not by the profitableness of geographical situation; whereas the mode of raising revenue by duties, is apportioned by the relative ability to pay between maritime and inland districts. Nor is there any injustice in this, because, if household and factory manufactures were both free, the maritime districts can avail themselves of either, or do better. Taxes on foreign commodities, such especially as are most costly, when their consumption is not prohibited, fall on opulent cities or wealthy individuals; but excises on home manufactures, fall chiefly on the labouring classes. Duties for revenue only, are subject to a wholesome limitation, because, if they are pushed too far, their end is defeated. But excises on domestick necessaries, seconded by commercial restrictions, may be made exorbitant; whilst duties to a great extent are the voluntary contributions of wealth and luxury, if they are not excluded from gratifications by unjust and impolitic restrictions. But these arguments, it must be confessed, admit of an answer; the protecting-duty policy will make the whole of the United States an inland country, and then excises and other direct taxes will fall with equal severity upon every portion of it, as geographical advantages will no longer exist.
Household manufactures are complimented by the Committee, to insinuate that their encouragement was one design of the protecting-duty policy but the very reverse is intended and must happen, or their eulogy upon factory manufactures and excises cannot be realized. Manufactures made for sale only, receive the bounties bestowed by protecting duties, and those made and consumed in the family do not receive a cent of it. Could the amounts of household and factory manufactures be ascertained, it would probably appear, that the former exceed the latter an hundred fold; at least the difference would be very considerable. And yet it is proposed to inflict an excise upon household manufactures, to foster the factory manufacturers, though of so much less value. Does not this demonstrate, that the prosperity of capitalists, and not of manufactures, is the object in contemplation? The more valuable household manufactures are, as an appendage to agriculture, the deeper will agriculture be wounded by transferring taxation from duties to excises.
The Committee have repeatedly urged the effects of the late war, and the war duties, as proofs that it will be wise to nurture factories by prohibitions upon commerce, because, during that period they flourished exceedingly, by deriving excessive prices from a casual prohibition, producing a temporary famine or scarcity of manufactures; by which a few capitalists who made them for sale, and not those who made them for family consumption, were enriched. This accidental discovery has suggested the idea of a permanent famine or scarcity, as a substitute for the war which has ceased; and equally beneficial to capitalists. The new war ought to be estimated by others as well as by the capitalists, according to their experience. Those who gained wealth by the old war, undoubtedly loved it, but those who only got poverty from it, must as certainly be glad that it is over. It is easy for those who felt the calamities of the old war, to determine whether their revival by a new war against their property, ought to be coveted. War is the casualty which most extensively transfers property, and by that effect most sorely oppresses nations. It invariably generates a class of men, who wish for its continuance, however injurious it is to the people generally. The very plain language put into the mouths of the capitalists by the Committee, was never surpassed, nor perhaps equalled in point of candour. “We were wonderfully enriched by a temporary manufacturing war monopoly, therefore secure to us the same income by a permanent legal monopoly.” Commissaries and contractors might petition Congress for bounties on the same ground. The claim of the gallant officers, soldiers, and seamen who fought our battles, is ten-fold stronger. They lost more blood, and got less money than the capitalists. Which of these two classes, if we were obliged to keep one, ought to have been disbanded? The Committee state so very fairly, the nature of the war which has been substituted for that we were glad to get rid of, that it cannot even be called a war in disguise. This new war is to be carried on by foreign and native capitalists. The foreign combatants for capital or wealth, receive great bounties or high pay from their governments; therefore, say the Committee, we ought to give great bounties, or high pay to our domestick combatants, for capital or wealth, “or they will not have fair play.” As the victory consists in getting most money from the people, whether the play is fair or foul, it will undoubtedly be a very pleasant war to the two armies of capitalists. Instead of losing blood, they are to get money. These foreign and domestick armies are perpetually exclaiming to their governments, “more pay, more pay!” As pay only can win the victory, we must lose it, say our capitalists, unless our government augments our pay as fast, or faster, than the British do that of their army of capitalists. Can there be a finer war for the two armies? The effort is, which government can give its army most wages, or open most purses to their chaste and patriotic fingers. And this kind of war is called by the Committee, “protection to agriculture, which the people have a right to ask of the government.” Let us exhibit the nature of this protection in figures. The English give a bounty or wages to their capitalist army of more than one hundred millions of dollars annually, therefore this species of protection requires our government to give as much to our capitalist army. If they increase their bounty, we must increase ours. The number of people in England and the United States is nearly equal, therefore their bounties to the respective capitalist armies, must be nearly equal also. But who pays these merry pipers—the people or their governments? Let us shrink from the idea, that our government can protect or enrich us, by transferring our property to capitalists, with a siren song. When nations depend on themselves for protection and wealth, it is a proof that they are free; and when governments claim a power to give them either, it is a proof that they are not free. They become the slaves of an army of soldiers, or an army of capitalists, commanded by the government. But what is the protection afforded by the protecting-duty policy? Simply to transfer some millions from the people to capitalists, for which, if not transferred, they would have received an equivalent from foreign nations. The reason alleged for this protection of our property by transferring it to capitalists, is, that the bounties paid by foreign governments to their capitalists, enable them to sell manufactures cheap to us; if so, we get the bounty. In this view, it would be beneficial to us that England should increase her bounties, until their capitalists could sell us manufactures at half their value, or even give them to us. But the Committee, with great magnanimity (and this seems to me the best argument in favour of their policy) propose fairly to reciprocate the kindness by giving bounties to our capitalists, that they may also sell cheap manufactures to foreign nations. No, says this policy, the domestick bounties are given to enable our domestick capitalists to sell cheap to ourselves, and also to prevent foreign cheapness from acquiring a monopoly among us.
This argument deserves some attention, in order to detect some share of plausibility. We must recollect the existing circumstances of the manufacturing world to estimate its force, because, though it might have been sound under some circumstances, it may be weak under others. It might have been wise to purchase arts, sciences, philosophers, and artisans, by temporary rewards, when a nation was without them; and unwise to convert them into permanent exclusive privileges or a pecuniary aristocracy, after they were acquired. By suppressing this distinction, a superficial force is bestowed on the argument which it does not deserve. A knowledge of commerce, arts, and sciences, is now so generally diffused among a certain number of nations, that ignorance does not subject any one of them to the necessity of obtaining information at the expense of great sacrifices, either political or pecuniary; nor is any member of this informed catalogue of nations so exclusively wise or skilful, as to be able to establish a monopoly upon another. The United States undoubtedly belong to the commercial, manufacturing, and enlightened catalogue of nations; and therefore they are neither under the necessity of purchasing any branch of knowledge, nor exposed to the danger of being monopolized on account of their ignorance. With respect to the mechanical arts, they are admitted by the protecting-duty project to be so well informed, as to be even able to expel foreign competition; and the art of agriculture is supposed to be so far advanced, as to enable us to exercise a coercion on our part over foreign nations, by withholding from them its products.
Under these circumstances, it is said, that sound policy dictates to us the establishment of a manufacturing monopoly at home, lest we should be exposed to a manufacturing monopoly from abroad, to be obtained in future by bounties giving us cheap manufactures at present. Much has been said by the Committee to strip the subject of the two ugly words “bounty and monopoly,” respecting our native capitalists or factories, whilst they apply them to foreign capitalists or factories. They contend that foreign monopolies are created by bounties, enabling factory owners to undersell competitors at present, and to obtain an exclusive market in future. They also contend that domestick bounties ought to be given to domestick capitalists or factories by protecting-duties, that they may also undersell competitors at present. But they deny that the domestick pensioned factories will obtain an exclusive market or monopoly, by the very same means which they suppose will bestow it on foreign pensioned factories. Yet it is evident that they will be more able to do so, assisted by law, and unexposed to any competition except among themselves, than any foreign nation without legal assistance, and kept in check by all other foreign nations. However this may be, it is evident that success in either the foreign or domestick project must produce the same consequences to consumers. If one case constitutes both a bounty and a monopoly, the other must also constitute them. The cases being the same, the terms applicable to one are applicable to the other; and a disavowal of this mutual application, is merely an endeavour to alter the nature of things, by altering the words used for defining them. The true question is, whether the fear of an English monopoly should drive us into a domestick monopoly. The Indians, towards the north-west, have, it is said, an ingenious mode of taking deer: by frightful but harmless appearances they drive them into real toils and certain destruction. Our mechanical skill, and the competition between foreign nations, will secure us against the ugly English monopoly, and also save us from the destructive toils of a domestick monopoly and permanent excises, if laws did not force us into them.
Let us compare the evils resulting from foreign and domestick restrictions, bounties, and monopolies, to discern which are the worst; for both are undoubtedly bad. By foreign bounties, consumers are enabled, for a period, often a long one, to buy cheaper; by domestick they are compelled to buy dearer. Foreign monopoly, the design of foreign bounties, is certainly diminished or defeated by the competition of independent nations; by our power of transferring our commerce from a nation attempting it, to those nations which do not; and by the progress of our internal mechanical skill. Domestick monopoly, the design also of domestick bounties, cannot be defeated by the competition of all manufacturing foreign nations, because this competition is expelled by protecting-duties; nor by a power of transferring our dealings from the monopoly to free exchanges, wherever to be found, because this power is taken from us by law; nor by our internal mechanical skill, because that skill is to be monopolized by the capitalists, who will very easily effect it, by the help of a general excise. Our mechanical skill, if not monopolized, would itself be a full match for foreign competitions, when aided by freights, revenue duties, and the cheapness of materials; and to force it into undertakings where these advantages will not suffice, can only produce a loss or a fraud. Foreign bounties and monopolies cannot create a moneyed aristocracy here, able and willing to corrupt the principles of our government—domestick can. Foreign regulations of commerce cannot be uniform among all nations, and however restrictive, their dissimilarity will always afford us a better market, than can possibly be afforded by a single capitalist combination at home. But the Committee contend that all these foreign nations will receive money only, and that the domestick monopoly will receive our agricultural products. This is the great argument by which the protecting-duty policy is defended, and if it is unfounded in fact, the error of that policy becomes apparent.
Where are our capitalists to get money to purchase the flour, grain, cotton, tobacco, fish, and all our exportable articles, exclusive of those they manufacture? The idea of their being a competent, or even a tolerable market for all these articles, is either a very high computation of their present wealth, or an appalling intimation of that which they expect to get by their monopoly. If they have not the money with which to buy all these exportable articles, it is obvious that their monopoly will not yield us money; if they have, it is as obvious that they have no occasion for the monopoly. It is possible for us to get money of those that have it, for our commodities, but not from those who have it not. The fact is, that these capitalists will themselves be extractors of money from the people, and mere compilers of unproductive capital, because they will require but a very inconsiderable portion of agricultural products, for manufacturing or consumption, and beyond that portion must be paid in money only for their wares. Thus, the trade to be introduced for the sake of enriching the capitalists, is coerced by the protecting-duty policy, into the following course: The surplus of all our commodities, beyond the inconsiderable portion of them which the factories can consume, is to be exported to bring back money only, and this money is to be paid to the capitalists for the surplus of their wares, exceeding the value of their inconsiderable consumptions. Its effects are, first, to diminish excessively the value of agricultural products, by depriving them of the enhancement produced by a freedom of exchanging them for foreign commodities; by doubling the price of factory commodities, or increasing it far beyond what the foreign would cost under a freedom of exchange; and by doubling the expense of freight upon our exported commodities, for want of the return cargoes which would have divided it. Secondly, to increase enormously capitals in a few hands, by a constant current of the money thus to be procured, into the pockets of capitalists, and cause pecuniary accumulations which will not be employed in reproduction, because they will not be invested in agricultural improvements, since profit from them will, by the system, be made more and more hopeless. Thirdly, to continue the destruction of the impost mode of obtaining revenue, so as to enforce a resort to more oppressive modes of taxation, and to loans, which will be successfully advocated by the great moneyed influence thus to be created, for the two purposes of increasing the profit of its monopoly, and finding employment for the capital it brings, by lending it to the government. Fourthly, of increasing the expenses of government by new and internal taxes, and by the facility with which loans will be obtained from the capitalists. And lastly, by throwing this whole accumulation of expenses on all other occupations which have least money, and absolving the capitalist occupation which has most money, from bearing any share of them.
Such is the course of the proposed trade, supposing that foreign nations both can and will give us their money for our commodities, though they are said to be giving bounties to their capitalists, in order to come at our money, by enabling them to sell cheaply to us. If the money they thus get of us, does not exceed in amount the bounties they pay to get it, the speculation is so absurd as not even to deserve the lowest of all compliments; that of being fallacious. The same compliment is due to our speculation for getting their money, if we fail to get enough to reimburse us for the money we pay to our capitalists to come at it. But as it is impossible that the greediness of all commercial nations should be levelled at our little stock of specie, and not at our great stock of commodities, our commercial policy would stand upon safer ground, if it was modeled upon a supposition of the latter greediness, than modeled as it is upon a supposition of the former. In that case, there would be no occasion for a domestick sect of capitalists, to save our specie, and subject our commodities to depreciation. Let us, say the Committee, turn the tables upon these foreign speculators, and aim only at their specie, as they aim at ours. If their speculation will diminish the value of their exportable commodities, by depriving them of their exchangeable value in our markets, the same speculation will, in the same way, diminish the value of our exportable commodities. In this project for overturning the only principle by which commerce can subsist or be useful, the Committee propose, first, to be as cunning as foreign nations, by refusing to admit their commodities, lest they should take away our money; and then to outwit them, by sending our commodities to take away theirs; never recollecting, that as we have discovered this profound stratagem of theirs, they may possibly discover it when turned upon themselves. Should they do so, and imitate the Committee, as the Committee propose to imitate them, our commercial surgery will be like that of a British soldier captured by the Indians, who induced them to cut off his head, as the means of procuring his liberty. The project is internally inconsistent, by supposing that commercial nations will combine to get our money, and reject our products which they want, and can use; but that our domestick factory owners will not combine to get our money, but will buy our products which they neither want nor can use, except to an inconsiderable extent; so that the mass of these products must remain on the same ground, as if the domestick monopoly had never existed. We cannot turn the tables on these factories, by forcing them to give us money; on the contrary, their owners are empowered by law to force us to give them money. Our exportable commodities, which serve without pay, will be better soldiers abroad, in carrying on a commercial war with dissimilar foreign restrictions, if they retain a freedom of exchange, than an army of capitalists at home, created and paid for carrying on the same war. The surplus of these is the whole fund for acquiring of foreign nations what we want, but the surplus of capitalists which we have created, acquires nothing. Commerce subsists by exchanges of indigenous for foreign surpluses, and though our surpluses of commodities may sell low, our surplus of capitalists will sell for nothing. By whatever regulation the exchange of our surplus for a foreign surplus is obstructed, national wealth is diminished, because it consists of things which we want, and not of things which we do not want.
The fallacy of the notion, that foreign nations will regulate their commerce for the purpose only of getting the specie in the United States, is demonstrated by the maxim advanced by the Committee. “That foreign nations will buy what they want, and will not buy what they do not want.” Is not this concession sufficient to show, that our commodities stand on the only firm commercial ground; that foreign wants are the true pledges for our commerce, and that to surrender those pledges for an exclusive privilege at home, is a wild and unnecessary speculation. Do we mean by it to force them to buy what they do not want? That they will buy what they do want, is acknowledged. Money, intrinsically, is not a want, considered as currency; but the representative of wants. If a foreign nation does not want any of our commodities, and we cannot supply it with money to satisfy their wants by resorting to other countries, no commerce can exist between that nation and ourselves. If it does want any portion of the surplus useless to us, we must elect between the policy of encouraging its wants by exchanges which will supply our own, or discouraging a direct commerce by demanding money, which is of no use except to send to other countries to procure, indirectly, things to satisfy our wants. If we will not exchange the surplus of our industry for the surplus of their industry, we render it as impossible for foreign nations to take our surplus, as it would be for us to take theirs, without such an exchange. Money alone cannot sustain a commerce between two nations, even if both had gold and silver mines. To give money for money would be no commerce at all. Mechanical and agricultural commodities constitute the basis of exchanges, and these exchanges constitute the essence of commerce. As they are the means by which alone commerce can exercise its comfort-distributing office, to deprive it of these means, is evidently to stab commerce precisely in its vital part. Both are produced by people, both are manufactures, and exchanges of one for a surplus of the other, will equally reflect an additional value on both, as on any other exchanges of useless surpluses. Indeed, between them they comprise all things which can be exchanged, and therefore, a policy which asserts that it is wise to destroy exchanges of agricultural products for manufactures, asserts also that it is wise to have no exchanges at all. If it is the interest of any foreign nation to take an agricultural surplus of us, because they want it, we must also pursue our interest in taking of any foreign nation its manufactured surplus, should we want it. Neither surplus would be of any value except for such exchanges. The enquiry, which species of surplus may be most valuable to a nation, is worse than hypothetical, where one does not exist. It tempts a nation to lose an existing, in pursuit of an imaginary, surplus. Further, if we consider the skilfulness of all occupations in computing profit and loss, we may safely conclude that it has been applied to these two, so as to have produced an equilibrium of value between them. Suppose, however, we should obtain a mechanical in lieu of our agricultural surplus; would it promote or wound the interest of the mechanicks, still to adhere to the policy of discouraging exchanges? If this policy would discourage the production of a mechanical surplus, and render it less valuable, it must have the same effect upon the existing agricultural surplus. Even this hypothetical enquiry, would not result in the conclusion, that a mechanical surplus would have more effect in advancing the prosperity of a nation, than an agricultural surplus. Adam Smith observes, “that the interest of the land-holder is closely connected with that of the state, and that the prosperity or adversity of the one, involves the prosperity or adversity of the other.” Malthus agrees with him, adding “that as the increase of the land-holder's capital increases population, improvements in agriculture, and the demand for raw materials by commerce, it seems scarcely possible to consider his interests as separated from those of the state and the people.” It is therefore impossible that a mechanical surplus, should contribute more to the prosperity of a nation, than an agricultural surplus, even where they are equally attainable; but where they are not equally attainable, no policy can be worse than to break the right, and drive the wrong nail. If the English should by compulsory laws diminish their mechanical surplus, they would imitate our policy in diminishing our agricultural surplus; nor would their mechanical surplus be of any value, should they refuse to exchange it for such foreign surpluses as they want.
A single consideration will suffice to assuage our apprehension of a conspiracy among foreign nations, not to take our agricultural surplus in exchanges. Foreign commercial regulations are all made by governments for the purpose of getting money, and this end is a full security that none will be made, which by destroying commerce, would defeat it. They will never destroy their best instrument for fleecing industry, by an entire prohibition of exchanges; for though they will use it as far as possible for effecting transfers of property, yet they will never forget that actual commodities only, and not prohibitions, will bear shearing. Even those governments which manage commerce for the end of transferring property, will not kill it to effect that object, like our protecting-duty policy. If left free, it brings most comforts, but creates fewer exuberant capitals. Under the guardianship of domestick exclusive privileges, it transfers more property from the people, than it could do to foreign nations, if it was made free at home, to take every advantage of their conflicting and countervailing stratagems. Why should we buy the cunning of exclusive privileges to defend us against the cunning of foreign restrictions, when the domestick cunning will cost us more than the foreign cunning; like a man who spends his estate in learning of lawyers how to keep it? To make productive labour pay as much as possible to unproductive, is the European policy; that one should pay to the other only so much as is necessary to sustain a free government must be ours, or we must exchange those political principles which we have hitherto called free, for those which we have hitherto called tyrannical. If the two combatants were left to grapple upon these terms, victory would not be doubted; but productive labour having surrendered the armour of free exchanges, and her unproductive adversary having acquired that of exclusive privileges, she is easily chained to the property-transferring policy, like Hercules to the distaff of Omphale. His submission to the degradation cost him his life.
Exchanges of necessaries, conveniences, and especially luxuries, and not mere acquisitions of money, constitute the great impulse, which has caused human nature to make those exertions by which civilization has been extended, knowledge produced, refinements discovered, wealth obtained, and a love of liberty inspired. Leave this impulse undiminished; this moral steam-engine to operate; and its force will be sufficient to drive our commerce, our wealth, and prosperity along, in spite of all the little foreign currents setting in many different directions, which may endeavour to impede them. But take away from us this moral discovery, destined to be our glory or our shame, and we sink back into the mob of tyrannies, and lose at once these features of distinction, to which we have been hitherto indebted for our progress in arts and sciences, and for the share of reputation we enjoy amongst men.
The Committee conclude with a mental reservation, “out of deference to the opinions of those who differ from them,” by observing that their bill is only “a foundation to be built on hereafter.” If it would have been disrespectful to shock their opponents by a full display of their project, yet the concealment is not calculated to suppress apprehension or obtain confidence. How can the nation judge of an entire system, by inspecting an acknowledged fragment, better than they could of the size of a pyramid, by seeing one of its stones? How can taciturnity be examined? If the partial disclosure is awful and alarming, what must be the reservation? It would certainly have been divulged, had the Committee thought that it was calculated to win the favour of the public. Ought a nation to risk its own fate, by deciding without having the whole truth before it, and under the acknowledgement of a suppression, likely to be offensive? Our progress in imitating European governments, is sufficient to exhibit this something behind to our imaginations, as a dismal gulf, in which we can see no bottom; especially as the Committee allege that they are only driving on a wedge already entered. Is it not time that the United States should be informed how far the wedge is intended to be driven? Does not common prudence dictate the precaution of knowing how far it is intended to plunge us into the European policy, or ought we to plunge into it blindfold?
I have not left the report where the Committee have left their project, in the middle; but persevered to its end, endeavouring to select and examine its essential principles; and to anticipate some consequences, which the Committee have prudently concealed.
One paragraph, in reference to the cloud of pamphlets and essays, which have from the motives of love, pity, and friendship, been launched at the mechanicks and agriculturists. They so nearly resemble the eloquence in the Vicar of Wakefield, of Lady Blarney and Miss Carolina Wilhelmina Skeggs, from London city, that the intelligent and uncorrupted readers of these classes must very often have borrowed the exclamation of honest Burchell upon that occasion. Are these classes such children as to be seduced by promises and flatteries, like poor Olivia? A sample of this city reasoning, will suffice to show at what rate our rural understandings are estimated. Capital invested in factories, is liable to more risks, than that invested in agriculture, and therefore agricultural capital ought to pay bounties to factory capital. Old nations require a different regimen from young nations, and therefore, as we grow older, we ought to revive old abuses. The lands of Europe are exhausted by age, and therefore the inhabitants of our new and fresh country are able to bear heavier burdens than the Europeans. Agriculture is rich, because she is skimming the cream of a rich country, and she is poor for want of factories. As she is rich, she ought to pay bounties to the owners of factories; and as she is poor, the factories are necessary to make her rich. I will only confront these assertions by a few facts. Capital invested in agriculture, is exposed to equal risks, from fire and fluctuations in price, as that invested in factories. It is moreover exposed to numberless exclusive risks from bad seasons. Invested in either, it is equally exposed to want of industry or extravagance. It is better that each occupation should be its own insurer, than that either should be bribed by the other to become idle or wasteful. All occupations, calculate their risks, in fixing their prices, and this calculation is the only fair, honest, useful, and impartial underwriter of the risk attending each. All nations, at all times are composed of people of correspondent ages, equally young and equally old; and as one generation passes away, another succeeds, having the same wants, and the same capabilities. There are some principles always good, and others always bad. Time improves arts and sciences; it cannot therefore be made a good reason for reviving frauds and abuses. Time improves agriculture; therefore what are called old countries are more able to bear burdens, than those called new. The whole earth is of the same age. The soil of the United States being poorer and worse cultivated than that of many other countries, and of England in particular, the people are less able to bear taxes, and farmers have the more need for their small profit to improve it. Is it not therefore better for them to consider themselves as the Switzerland of the world, and to flourish by the principles objected to, because adopted in their supposed minority, than to ape the expensive policy of old England? If principles and the earth are deteriorated; if an existing generation must be pilfered and enslaved, because other generations have preceded it on the same surface; if improvements are to be abandoned because they are new, and errors revived because they are old; and if the people of a newly settled country ought to be grievously taxed, and subjected to exclusive privileges, because they are skimming its surface, because they are rich, and because they are poor; there remains no situation fit for liberty, and no age fit for political morality. When God gave a land to the Israelites flowing with milk and honey, he did not defeat his beneficence, by a revelation, that this milk and honey ought to be transferred from the nation to a few individuals, by heavy taxes and exclusive privileges.
[6.]Adam Smith (1723-1790), Scottish political economist, was “venerable” for AnInquiryinto the Nature and Causes of the Wealth of Nations (2 vols., 1776). He also wrote Theory of Moral Sentiments (1759). See Foreword, p. xx.
[7.]Thomas Robert Malthus (1766-1834), British political economist, wrote Principles of Political Economy (1820). He also wrote Observations on the Effects of the Corn Laws (1814) and Inquiry into the Nature and Progress of Rent (1815), and is best known for his Essay on the Principle of Population (1798).