a marvellously cheap price, a price much below their natural cost of production, if English labor were remunerated at a fair rate. But it is not thus remunerated; the wages of English operatives have, of late years, been reduced to the point where starvation is ever imminent; and bewildered by the lamentable consequences of this state of things, astonished to find general misery where their theory of free trade led them to expect general prosperity, the English economists have had recourse to such doctrines as those of Malthus and Ricardo to explain away the failure of their prognostications, and have actually discovered that all the evil must be attributed to an inevitable cause, to the over-population of the earth. What has been the fate of England in regard to manufactures, may be our own condition in respect to agriculture, if we do not become wise in time.

That I am not here advocating a protective policy to an extent which will impeach the truth of all the leading doctrines of Political Economy, as that science is usually taught, must appear from the limitations of the theory which have been already laid down, and from the fact that this theory is frankly accepted even by those English economists who are the stoutest advocates of the general doctrine of free trade. For proof, I quote from John Stuart Mill.

"If it be asked," he says, "what country draws to itself the greatest share of the advantages of any trade it carries on, the answer is, the country for whose productions there is in other countries the greatest demand, and a demand the most susceptible of increase from additional cheapness. In so far as the productions of any country possess this property, the country obtains all foreign commodities at less cost. It gets its imports cheaper, the greater the intensity of the demand in foreign countries for its exports. It also gets its imports cheaper, the less the extent and intensity of its own demand for them. The market is cheapest to those whose demand is small. A country which desires few foreign productions, and only a limited quantity, while its own commodities are in great request in foreign countries, will obtain its limited imports at extremely small cost, that is, in exchange for the produce of a very small quantity of its labor and capital."

*Mill's Political Economy, Vol. II. p. 131.

Consequently, he argues, "the opening of a new branch of export trade; or an increase in the foreign demand for our products, either by the natural course of events, or by an abrogation of duties; or a check to our demand for foreign commodities by the laying on of import duties at home, or of export duties elsewhere; - these, and all other events of similar tendency, would make our imports no longer a balance for our exports; and the countries which take our exports would be obliged to offer their commodities (specie among the rest) on cheaper terms, in order to reëstablish the equation of demand; and thus we should obtain money cheaper, and acquire a generally higher rate of prices. Incidents the reverse of these would produce effects the reverse, would reduce prices."*

It appears, then, that it is even more for the interest of American planters and agriculturists, than of the manufacturers themselves, that duties should be laid on the importation of foreign manufactured goods, so as to restrict the amount of such importation. We thus purchase our imports more cheaply, or, what is the same thing, as commodities are actually bartered for commodities, we sell our exports at a higher price. The effect of the duty is, not to raise the price of the imported articles, but to cheapen them, the duty actually falling in great part upon the foreign manufacturer. During the year ending June 30, 1854, for instance, we sold to other nations, cotton to the amount of 93 millions of dollars, tobacco to the amount of 10 millions, and vegetable food nearly equalling 66 millions; the total exports of the produce of the United States that year, excluding gold and silver coin, were about 215 millions. Our total imports retained for consumption during the same period (deducting what was reëxported) amounted almost exactly to 276 millions. The difference between these two sums, 61 millions, being evidently too much to be attributed to the profits of trade and costs of transportation, we ran in debt for a considerable portion of the balance, and had to pay the debt by exporting over 38 millions of California gold. The average duty imposed on all the articles that pay any duty is about 25 per cent.

Now let us see what would have been the probable effect of

* Ibid., p. 145.

doubling the duty upon all the imported articles which come in competition with American manufactures. The value of such articles probably did not exceed 100 millions; the other imports, amounting to 176 millions, are of such commodities tea, coffee, drugs, raw materials, and the like that we should be obliged, under any circumstances, to purchase them of foreigners. To double the duty on the former articles would probably reduce the amount imported from 100 millions to 50 millions, so that the revenue of our own government would not be affected by the alteration. But England, from whom we obtain most of the goods which come in competition with our home manufactures, would still need to obtain from us as much vegetable food, meat, and tobacco, and nearly as much cotton and California gold,* as ever; and her sale of her own manufactures to the United States being diminished to the extent of 50 millions, she would be obliged to offer to all nations, the United States included, these manufactures, and other commodities also, at lower prices. Compelled to seek an extension of the foreign market, or, in other words, to create an increased demand in other countries, for whatever she has to sell, to the extent of over ten millions sterling, she must submit to a reduction of price, which will bring her commodities within the reach of a larger class of consumers. American consumers, for instance, would not take even half as much as before, if the price in this country were enhanced to the full extent of the additional duty, that is, 25 per cent. England would have to bear probably 15 per cent of this duty, or to reduce her prices in this proportion, leaving the American price to be enhanced 10 per cent, which would be encouragement enough to set additional manufactories in motion in the United States, so as to produce at home the 50 millions' worth cut off from our imports.

Already, then, we see the fallacy of the oft-repeated assertion by the advocates of free trade, that a protective duty raises the price both of the home commodity, and of the foreign one which continues to be imported, to the full extent of that duty.

* I say, nearly as much gold as ever, because the United States, having become perhaps the greatest gold-producing country on earth, must continue to export that metal, and other countries must continue to receive it from her, till money and prices are equalized all over the commercial world.

If the impost be not so great as to be virtually prohibitive, in which case we admit it would be impolitic, the home price cannot be increased to the extent of more than one half, seldom more than two fifths, of the duty. Everywhere the inequality in the distribution of wealth is such, that the class of persons having an income, for instance, of $2,500 a year, is not, as we might be tempted by a superficial glance at the subject to believe, only 25 per cent less numerous than the class having $2,000 a year, but is probably not more than half as great. If, then, the price should rise to the full extent of the duty, say 25 per cent, the total consumption would not be more than half as great, as only those would buy who have an income at least one fourth larger than the smallest income possessed by any of the former purchasers; but a portion of what is consumed being now of home production, the importation of the foreign article would fall off considerably more than 50 per cent.

This reasoning, it is true, applies only to the somewhat finer and more costly articles of manufacture, for which alone a protective duty is needed. In respect to breadstuffs and other articles of prime necessity, we have already seen that a very considerable enhancement of price is needed in order materially to lessen the consumption. The sale of the cheaper and more common products of manufacturing industry, also, may not be much checked by an addition of 20 or 30 per cent to their price, as their cost forms but a small part of the total expenditure of any class of persons. But the principle holds true in the only cases in which we need to apply it.

Thus far, however, it would seem that the American consumer is injured to a certain extent, being compelled to pay at least 10 per cent more for the article, whether of home or foreign manufacture, than he paid before the additional duty of 25 per cent was imposed. But the principles now established prove, that he is compensated for the increase of price in this instance, by a necessary reduction of the price of other commodities. In order to pay for the American products which she must obtain, England must be able to make up, in other commodities, for the 10 millions sterling worth of her manufactures which we will no longer take. But our market being already fully supplied with these articles at their present prices,

she must tempt us to take more of them by reducing their price. She must sell her manufactures cheaper, not only to the United States, but to China, Java, Brazil, and Cuba, and thus obtain more tea, coffee, and sugar, which she can offer to us at rates so low as to increase our consumption of them to the required extent. These articles being in universal use, the reduction in their cost to us will be more than a compensation for the additional 10 per cent which we must pay for cotton, wool, and iron manufactures. Our domestic manufactures being thus restored to a prosperous condition, and many additional hands being required, as well as more capital, to prosecute them, the competition in agriculture will be slackened, and the price of our agricultural exports will naturally rise. Our sale of raw cotton will not be diminished, because the reduced price of cotton manufactures in Europe will increase the consumption of that article there more than enough to make up for a slight reduction of the quantity sold in the United States.

The statement of these principles may seem novel; but a little reflection will satisfy us, that we have long been familiar with the operation of them on a large scale. How is it that England has been able to extend her manufacturing enterprise to its present vast dimensions, except by reducing the price of its products so low as to cut off by competition the rival manufactures of every country in Europe, Asia, and America, that has not been wise enough to foster its domestic industry by a protective tariff? While her own industry and skill were not developed enough to enable her to defy rivalry, she maintained as rigid a system of protective and prohibitive duties as was established in any country on earth. One of the just complaints which ultimately produced the American Revolution, was, to adopt the language of Lord Chatham, that "England should not suffer her colonies to manufacture even a horseshoe for themselves." She then obtained the raw products of her own colonies on easy terms, by prohibiting them from selling to any other customer than herself; and those of other countries she bought at prices almost as low, by carefully keeping her purchases from them within the narrowest possible limits, so that they were compelled to sell cheap in order to sell enough to pay for their imports. Afterwards, when so much