Ideas for a Science of Good Government
FROM my earliest manhood I ever thought, that a good Government should encourage and protect its subjects as parents do their children. Inventors and manufacturers, in a new country, have to train themselves and then teach and educate their workmen and women, before they can succeed in turning raw materials into articles, which can compare with those of older countries. Moreover, workshops and factories should start and grow in order to develop home markets, so that the tiller of the soil and mechanic can benefit each other. The mason, carpenter, blacksmith, etc., are as indispensable to the farmer, as the farmer is to them. They create markets for each others products, and become mutual consumers.
As early as 1846, I wrote the following letter to Hon. Robert J. Walker, political economist and free-trader, and since that date I have devoted much thought and time to Finance and Tariff, as may be noticed from what precedes and follows :
THE TARIFF BILL.
NEW YORK, June 15, 1846.
TO THE HON. ROBERT J. WALKER,
Secretary of the Treasury.
Sir : On the 6th of September last, I received from the Hon. C.W. Lawrence, Collector of the Port of New York, a letter, enclosing from your honorable self certain interrogatories, and requesting any information, which I might be able to afford the Government in relation to my particular branch of business. My works were at that time just on the point of starting, and of course, I could not furnish any statistics, which would have been of a reliable nature. I thought it better, therefore, not to communicate with you, although I had for many years been led to look closely into our monetary and commercial regulations, and to arrive at certain definite conclusions in regard to the true commercial policy of our Government. At the earnest solicitation, however, of many persons, to whom my views were known, and who believe, that the present moment demands a public expression of opinion on the part of those, whose business has led them to pay especial attention to these matters, I am induced to request your attention to the following outline of the true principles, which, in my humble opinion, should guide the action of the Government in the present position of our commercial relations.
The true policy of every Government looks to national wealth and independence ; in other words, the security of the rewards of honest industry to individual enterprise, and the production within its own limits, as far as practicable, of whatever is necessary for the support and happiness of its constituent members. The earth is the sole source of wealth1st, by the mineral treasures, contained within its bosom ; 2d, by the vegetable productions, which it furnishes upon its surface. To obtain either, two things are necessaryphysical labor and human ingenuity ; and to apply these two agents most perfectly and successfully, mankind must not endeavor to labor in both fields ; but one portion must devote itself to agricultural pursuits, while the other must be employed in developing and giving a useful form to the crude masses, in which Nature has seen fit to place her treasures. The value of a days labor will be that amount, which furnishes a comfortable subsistence to the laborer and his family, and enables him to lay by sufficient to meet the wants of sickness and old age ; and the natural standard of value will be some article, whose bulk is small in comparison with the cost of producing it, and which, for a long period of time, is least subject to wear and variation. Just in proportion, then, as a nation so distributes its labor, that there is a mutual dependence between its members, and the results of its industry are so varied, as to meet the wants of the whole community, and its standard of value is uniform, just in that proportion does it approximate to the perfection of political organization ; just in proportion, on the other hand, as it confines itself to one particular channel of industry, and is dependent on foreign nations for everything else, and its standard of value is ever wavering and uncertain, in that same proportion is it ill-governed and certain to entail ruin and misery upon its members. The practical bearing of these cardinal principles, obvious enough in themselves, will perhaps be shown in a more striking and forcible light by a practical illustration, in itself an argument, and leading to certain conclusions, which I cannot help thinking, will leave no doubt as to the course of policy, which the Government of the United States should pursue in the present crisis, as its action at this time must determine the destinies of the country, for good or for evil, for many years to come.
Let us suppose two separate and independent Governments to exist in the same country, separated from each other only by a narrow stream ; possessing the same natural advantages, the same energy of character, and adopting as the measure of the value of property, one uniform currency. For the sake of convenience let its distinguish these Governments as the upper and lower. After many years of uniform progress, during which time their only circulating medium was composed of gold and silver, or for the sake of transportation, of certificates of the actual possession of gold and silver, let us suppose, that the upper Government fancied that its condition could be bettered by pouring paper money, not representing the actual possession of gold and silver, into the volume of its circulating medium. The effect is obvious, and is set forth in the language of Washington, when he declares, That in exact proportion as you pour paper money into the volume of circulating medium, in that proportion will every thing in a country rise in price. A bushel of corn, although it will feed no more ; a days labor, although it will produce no more, will be increased in price. Is it not clear, then, that the lower Government, adhering to its old, unadulterated standard of value, will continue to produce the bushel of corn at the old cost, carry it across the river and sell it for the advanced price ? And so long as the old or upper Government continues to redeem its bills with silver or gold, just so long will the lower Government continue to send over the river every article, that it can possibly spare, and will find it to its interest to take nothing in return but silver and gold, as everything else it can obtain at home at a cheaper rate. This traffic will continue, until the upper Government finds, that the operation of its internal trade becomes so embarrassed by the absolute want of silver and gold, that some remedy must be devised. It must stop this continual drain of specie, and therefore it attempts to fence out its neighbors by a tariff of heavy duties, the immediate operation of which is, if paper money is allowed to increase, to add the amount of the duty to the previous price of every imported article then in the country ; and this advance in price would straightway be seized upon, by those immediately interested, for pouring another issue of paper money into the volume of circulation. The immediate effect of this increase of paper money would be an advance in price ; importations would again commence, the tariff must again be raised, and high prices and high tariffs would go hand in hand, until by such a course of policy expensive, idle and luxurious habits would be diffused among the people to such an extent, that in accordance with the immutable laws of trade, where there is consumption without production, they would become involved in one general ruin, opening wide the chances for a few to amass huge fortunes, that they had never earned, out of the general wreck of the many. An attentive consideration of these principles will lead to three natural conclusions :—
First, That it is the duty of every Government to secure to itself the most uniform and intrinsically valuable standard of value possible ; a standard, which the experience of all time has proved to he gold and silver ; in other words, that the circulating medium of a country should be composed of gold and silver coins, or paper representative of the actual existence of gold and silver, dollar for dollar, or representative of property, the actual accumulation of labor done.
Second, That a tariff, based upon a currency, which is uncertain and fluctuating in its nature, will in itself be utterly inefficient to produce the effects for which it was designed, and will be but the first act in the great drama of expansion, convulsion and general bankruptcy.
Third, That between countries, starting in the race of political existence at the same time, with the same energy and the same natural advantages, and adopting one uniform standard of value, no tariff of protective duties would be necessary or ought to be adopted.
How then does the past policy of our country square with the principles, stated in these three conclusions ?And first as to its standard of value. From the earliest history of this country, as an independent Government, instead of confining our currency to gold and silver and to paper representative of labor actually performed, as has been mainly the policy for many years of those countries, from which we import most, we have allowed paper to be issued, which has its value foundednot upon the accumulations of honest industrybut upon the confiding faith of an unsuspecting public, and the desire of many men to do business beyond their means.
The result has already been shown ; and while at first all were ready to admit, that a protective tariff was necessary to develop these mineral treasures, that Nature has showered upon us in such abundance, and to mingle with the music of her waterfalls the busy hum of machinery, and, to afford a ready, convenient and certain market for our agricultural produce ; men, finding that the tariff did not produce the effects anticipated, have been induced to attribute its failure to its own inherent weakness, rather than the true cause, namely, an ever expanding and contracting currency. We have already seen, that a tariff, founded on such a basis, must from the nature of things be inefficient, deceptive and futile.
But does it hence follow, that a protective tariff is not necessary for this country to induce the manufacture of those articles, the raw material for which is found here in as great perfection, and can be wrought into useful and necessary articles, with as little expense of human labor as in any other country in the world ? In our original parallel we started the two Governments in the race of political existence at the same time, and hence we reached the third conclusion above stated ; but in order to understand the true position of this country in regard to other producing countries, we must vary the parallel in this wise. We must suppose the upper Government had been in existence for a thousand years, continually advancing in science, knowledge of the arts, the development of its internal resources, the experience of its producing classes and in population, till at length a large number of its inhabitants concluded to emigrate into a new land, possessing advantages and resources superior even to those of the mother country, but which required industry, ingenuity, capital and time to develop. The raw material, from the fertility and adaptation of the soil, they could produce, with much greater facility than the mother country ; but from the unfortunate adoption of a paper currency, the want of capital to start a manufacturing system successfully, and the great demand for labor consequent upon a new settlement, the cost of producing the finished article would be considerably greater than in the mother country, even with the difference of freight in their favor.
The result is, that to the extent, which the mother country absolutely requires the natural produce of its offspring, the latter will be supplied with the manufactured article. Any surplus of agricultural produce, which they may have beyond that limit, will first tend to lower the price of the whole raw material of the country, and must finally be left to decay.
What, then, are the remedies, that should be applied ? In the first place, the standard of currency must be at least as valuable and uniform as in the mother country. It will then, and not till then, become apparent what amount of tariff must be imposed to offer a sufficient bounty to capitalists to invest their property in manufacturing establishments. It is plain, that the amount of bounty required would be just enough to counterbalance the advantages, which the mother country possesses, in having had her manufacturing system in operation for a series of years. With our currency, regulated in this way, and with the natural and political advantages, which we possess, freed as we are from standing armies and the load of taxation, which weighs the nations of Europe down to the earth, our countrymen would be astonished at the small amount of uniform bounty, which would be required to open a thousand channels of domestic industry, and afford a home market for almost every article of domestic growth. And the competition, which would be the necessary result of an extended manufacturing system, would soon bring the article to the lowest price, at which it could be afforded.
In this country millions are already invested, and thousands of operatives are usefully and successfully employed in the various manufacturing pursuits. By well directed efforts of capital and skill, the country has been furnished with almost every species of manufactured articles of better quality and mainly at cheaper rates, than has ever before been the case on the average of any ten previous years ; and our farmers have had a sure and steady market at home for every variety of agricultural produce to the extent of the wants of all the persons, employed in manufacturing pursuits. Will it stimulate the industry of our country, or secure the rewards of labor to the hands, that earn them, by adopting such a course of legislation, as will sacrifice these millions, and turn these thousands out of employment ? Certainly not ; for in exact proportion as men are made sure in the rewards of honest and useful labor, they become prosperous, virtuous and happy ; and in the same proportion as men are deceived and deprived of their just rewards, they become discouraged, vicious and desperate. A course of policy, that will give the greatest stability to the operations of trade, and excite the fewest apprehensions of coming distress and pressure, will best promote the substantial interests of the country. I would, therefore, venture to suggest the only means, that seem practicable to effect this object.
FirstI would recommend the immediate adoption of the Sub-Treasury, and that its action upon the currency should be made gradual, by the collection of twenty per cent. of the revenue in specie every year, until the whole amount should be collected in gold and silver.
SecondlyI would recommend, that the changes in the tariff should also be made, to take effect gradually, and that the duties should be of a specific nature, and not on the ad valorem basis ; because the latter allows persons devoid of honesty to resort to fraud, and break down every merchant, who may pursue an honorable business ; because it subjects the revenue to constant change in amount, just as the prices of imported articles rise and fall, the revenue being least, when the Government needs it most. And, finally, because, when the prices are high and the manufacturer needs no protection, it affords him protection of the amplest kind ; but when prices are low, and the manufacturer must, if ever, shield himself under the tariff, but very slight protection is afforded. This will be made apparent by referring to a list of prices of any one leading article for some years back. The price of iron, for example, as shown by the books of Messrs. Jevon, Banks & Co., of Liverpool, has fluctuated from £15 in 1825, to £4 10 in 1843, per ton, and within the past eighteen months, from £7 to £11. What protection would an ad valorem duty have afforded in 1843, when the English were seeking a market at any price ? It must have produced the immediate stoppage of every rolling mill in this country. The same facts would be shown by referring to any other leading article. I would suggest, therefore, as the proper course, that the Government should ascertain as soon as may be practicable, and as accurately as possible, what articles are paying a duty injurious to the best interests of our country, and that the excess of duties, now imposed in a specific form on those articles be gradually reduced, say twenty per cent. per annum, until the whole amount, collected by the operation of the tariff, be barely sufficient to meet the wants of an economical administration of the Government. We should thus gradually arrive at a tariff, based upon a revenue standard, and at the same time afford protection to the manufacturer in such a way, that he could be ready for each change in the tariff, until it reaches the revenue basis.
ThirdlyThe Sub-Treasury should be made to take effect at least one year, before any change of the tariff should go into operation, in order to give it time to bring the currency under its influence, and prevent the banks and enemies of the present administration from producing a panic, by operating on the fears and affecting the interests of the community to such an extent, that it might result in a change of administration, and bring again into power those, whose favorite idols are a national bank, a high tariff, and inflated currency, with all their terrific power for mischief, fertilizing the rich mans field with the sweat of the poor mans brow.
I should hardly have ventured to obtrude my views on these subjects upon your attention, although they are the results of the experience of more than forty years, incessantly devoted to mechanical and mercantile pursuits, were I not deeply impressed with the conviction, that the masterly policy, sketched out by the Government of Great Britain, will render the action of the present Congress, upon the great questions of the currency and the tariff, more deeply fraught with good or evil to the best interests of the country, than at any period within my recollection.
In all the changes, which the wisdom of our Congress shall see fit to adopt, the proposed changes in the commercial policy of Great Britain should be kept strictly in view. That Government finds, that by reason of past restraints on its own commerce, it has eaten its bread for thirty years at $9 per barrel, and that by a radical change of its own policy the price may be reduced to $6 per barrel, thereby widening its own market, already nearly co-extensive with the world, and becoming in our own market a more formidable competitor, in the same proportion as its bread is made cheaper. Will it answer then for this Government, at this moment, to aid the already overgrown capital of Great Britain, to break down the manufactures of our country, that are just struggling into existence, and force these operatives, at present engaged in manufactures, into competition with the agricultural producers, instead of being the consumers of the results of the labor of the latter ?
No one more ardently desires a free and unrestricted interchange of commodities between the two countries than myself, and no one more firmly and hopefully believes, that the day will come, when the ports of both nations will be thrown wide open to every flag, that waves upon the oceana consummation, which the recent auspicious action of the Senate on the Oregon question is well calculated to forward ; but in endeavoring to effect this desirable object, we should not blindly and hastily uproot the very system, which we have for years been endeavoring to encourage ; but the change should be made gradual, so as to allow time for the full development of our internal resources, the application of our water powers to the purposes, for which Nature prepared them, the acquirement of the requisite skill and the investment of the necessary capital to carry on our manufactures successfully. Our fellow citizens would then feel certain of a permanent system, and a sure guarantee, that the just rewards of ingenuity and skill would be secured to individual enterprise ; and the good and great of every land, who have their eyes fixed upon this country, as the precursor and harbinger of a better humanity throughout the world, would be cheered and encouraged with the conviction, that after seventy years of independence, both the people of the United States and their Representatives are still looking to the only objects, worthy of a liberal Governmentthe best interests of all classes in our common country, and the onward progress of free principles.
I have the honor to be,
Your obedient servant,
LETTER TO HON. H.J. REDFIELD.
NEW YORK, January 17, 1868.
SIR : Your letter, dated December 24, 1867, addressed to me, in the Batavia Spirit of the Times, and republished in the EVENING POST of the 6th instant, has, within the past few days, been called to my attention, and I now take the earliest opportunity of replying to it.
I am pleased to receive the views of an old and respected citizen on the subjects on which it treats ; and, although we have arrived at different conclusions on these subjects, yet the discussion of them in a frank and kindly manner cannot be otherwise than useful.
For myself, I am indeed conscious, as you remind me, that I am an old man, liable to error and frailty, as we all are, but yet I trust, not so warped either by my prejudices or my interest as to be incapable of the honest investigation of arguments, presented for my consideration, even though in opposition to long cherished convictions. And I will as frankly say, my dear Sir, that the record of your long and useful life gives assurance, that no unworthy influence will be permitted by you to sway your judgment or influence your conduct in this matter.
I have at the outset to complain of the manner of your reference to the tariff legislation of the country, as calculated to convey very incorrect impressions upon that subject, and mislead those, who are uninformed respecting it.
The inference, naturally to be drawn from your letter, would be, that the effort to stimulate domestic manufactures, which you illustrate by the figure of the people carrying an infant in their arms, was something strange and exceptional in the policy of civilized nations, and contrary to the genius of American institutions. You forgot, that the system of protection to home labor, which you so earnestly condemn, is to-day acted on by every civilized nation on the Earth, and has the sanction of the statesmen and rulers, not only in Europe, but our own country, whose wisdom mankind has acknowledged and universally respects. The principles, Sir, which you denounce with such severity, have been held from the beginning by the founders and great political teachers of the nation, men whom we are accustomed to honor, and whose opinions have just weight with us on other subjects. Among these I might name Franklin, Jefferson, Madison, Jackson and many others, whose recorded words defend and maintain the doctrine you decry. Of these I shall only quote the words of Jackson, whose advocacy of the principles of protection you seem to doubt.
ANDREW JACKSON ON THE TARIFF.
In writing to Dr. Coleman, in 1824, Andrew Jackson thus fully and unequivocally expressed himself on the tariff question :
You ask my opinion on the tariff. I answer, that I am in favor of a judicious examination and revision of it ; and so far as the tariff bill before us embraces the design of fostering and protecting, preserving within ourselves the means of national defence and independence, particularly in a state of war, I would advocate and support it. The experience of the late war ought to teach us a lesson, and one never to be forgotten. If our liberty and Republican form of government, procured for us by our Revolutionary Fathers, are worth the blood and treasure, at which they were obtained, it is surely our duty to protect and defend them. This tariffI mean a judicious onepossesses more fanciful than real danger. I will ask : What is the real situation of the agriculturist ? Where has the American farmer a market for his surplus products ? Except for cotton, he has neither a foreign nor a home market. Does not this clearly prove, when there is no market either at home or abroad, that there is too much labor employed in agriculture, and that the channels for labor should be multiplied ? Common sense points out the remedy. Draw from agriculture the superabundant labor ; employ it in mechanism and manufactures ; thereby creating a home market for your breadstuffs and distributing labor to the most profitable account and benefit to the country. Take from agriculture in the United States six hundred thousand men, women and children, and you will at once give a home market for more breadstuffs, than all Europe now furnishes us. In short, Sir, we have been too long subject to the policy of British merchants. It is time, that we should become a little more Americanized, and instead of feeding the paupers and laborers of England, feed our own, or else, in a short time, by continuing our present policy, we should be rendered paupers ourselves.
And in his second annual message to Congress, December 7, 1830, he closes an argument in favor of the Constitutional right to adjust the custom duties, as to encourage domestic industry with these words :
In this conclusion I am confirmed as well by the opinions of Presidents Washington, Jefferson, Madison, and Monroe, who have each repeatedly recommended the exercise of this right under the Constitution, as by the uniform practice of Congress, the continual acquiescence of the States, and the general understanding of the people.
But, not only has this principle of protection to domestic industry been advocated by the most illustrious of our American statesmen, but it has been received and acted on by every civilized nation on the Earth. It has been the steady policy of France since the days of Colbert, enforced more strongly and consistently by the first Napoleon, and (notwithstanding all that has been said about the French treaty ) steadily maintained by the present Emperor. In England for five centuries the policy has prevailed since the days of Edward the Third, and if twenty-five years ago she thought it practicable to relax the restrictions she had placed upon the importation of foreign manufactures, she is now aware of the mistake, and awaking to a sense of the fatal danger she incurred, and already her discontented operatives are demanding the restoration of protection against the cheaper labor of their continental rivals, and her farmers are claiming a prohibitory duty on foreign cattle, imported into the country. In Russia, that land so like our own in the magnitude of its undeveloped resources, the wisdom and necessity of fostering domestic production is understood and acted on. And in the history of the German Zolverein for the past five and thirty years is found at once the evidence and illustration of the wisdom of protection to home industry among a people, where all property is measured by a uniform standard.
THE TARIFF LEGISLATION OF THE UNITED STATES.
You give, Sir, in a condensed form, what you design as a history of the tariff legislation of the United States for the last fifty years. I do not regard it either as accurate or specific, as such a statement would need be for any safe purpose of argument, and as I think, that exact information on this subject is of great importance, I take the liberty of quoting a passage from a letter of Mr. Henry C. Carey, which is valuable for the historical evidence it affords, that Governmental interference, on behalf of manufactures, has always produced general national prosperity, and that the withdrawal of that interference has as invariably resulted in industrial distress and commercial disaster :
Fifty years since, the second war with Great Britain came to a close, leaving our people well provided with mills and furnaces, all of which were actively engaged in making demand for labor and for raw materials of every kind. Money was then abundant, and the public debt was trivial in amount.
Two years later we entered upon the British free trade system, and at once all was changed. Mills and furnaces were closed ; labor ceased to be in demand ; and our poorhouses were everywhere filled. Money becoming scarce and interest high, land declined to a third of its previous price. Banks stopped payment. The sheriff everywhere found full demand for all his time, and mortgagees entered everywhere into possession. The rich were made richer, but the farmer and mechanic, and all but the very rich, were ruined. Trivial as were then the expenses of the Government, the Treasury could not meet them. Such was the state of things, that induced General Jackson to ask the question, Where has the American farmer a market for his surplus produce ?
To the state of things here described were we, in 1828, indebted for the first thoroughly national tariff. Almost from the moment of its passage, activity and life took the place of the palsy, that previously existed. Furnaces and mills were built ; labor came into demand ; immigration increased, and so large became, the demand, for the products of the farm, that our markets scarcely felt the effect of changes in that of England ; the public revenues so rapidly increased, that it became necessary to exempt from duty tea, coffee, and many other articles ; and the public debt was finally extinguished.
The history of the world to that hour presents no case of prosperity so universal as that, which here existed at the date of the repeal of the great national tariff of 1828. Had it been maintained in existence, we should have had no secession war, and at this hour the South would exhibit a state of society, in which the land owners had become rich, while their slaves had been gradually becoming free, with profit to themselves, to their owners and the nation at large. It was, however, repealed in 1833, and the repeal was followed by a succession of British free-trade crises, the whole ending in 1842 in a state of things directly the reverse of that above described. Mills and furnaces were closed ; mechanics were starving ; money was scarce and dear ; land had fallen to half its previous prices ; the sheriff was everywhere at work ; banks were in a state of suspension ; states repudiated payment of their debts ; the Treasury was unable to borrow a dollar, except at a high rate of interest : and bankruptcy among merchants and traders was so universal, that Congress found itself compelled to pass a bankrupt act.
Again, and for the third time, protection was restored by the passage of the Tariff Act of 1842. Under it, in less than five years, the production of iron rose from two hundred and twenty thousand tons to eight hundred thousand tons ; and so universal was the prosperity that, large as was the increase, it was wholly insufficient to meet the great demand. Mines were everywhere being sunk. Labor was in great demand, and wages were high, as a consequence of which immigration speedily trebled in its amount. Money was abundant and cheap, and the sheriff found but little to do. Public and private revenues were great beyond all previous precedents, and throughout the land there reigned a prosperity more universal than had, in the whole history of the world, ever before been known.
Once more, in 1846, however, did the Serpentproperly represented on this occasion by British free-tradersmake his way into Paradise, and now a dozen years elapsed, in the course of which, notwithstanding the discovery of California mines money commanded a rate of interest higher, as I believe, than had ever been known in the country for so long a period of time. British iron and cloth came in and gold went out, and with each successive day the dependence of our farmers on foreign markets became more complete. With 1857 came the culmination of the system, merchants and manufacturers being ruined, banks being compelled to suspend payment, and the Treasury being reduced to a condition of bankruptcy, nearly approaching that, which had existed at the close of the free trade periods, commencing in 1817 and 1834. In the three years that followed, labor was everywhere in excess ; wages were low ; immigration fell below the point, at which it had stood twenty years before ; the home market for food diminished, and the foreign one proved so utterly worthless, that the whole export to all the manufacturing nations of Europe, as I have already stated, amounted to but little more than $10,000,000.
The losses, brought on our country by a failure on the part of the Government to steadily protect the great industries of the nation, ever strikingly manifest by the loss to the whole country of a steam marine, which was won for us by men, who deserved a better fate than they received. It was for the want of a few paltry millions to protect a steam marine, so nobly won and of such inestimable value to our countryit was because of the failure of our Government to protect its childthat England was permitted, by her protective policy to her own steamships (at but a small cost) to distance us in a race for supremacy in ocean steam navigation, and take from us a steam marine, that would have been worth thousands of millions to our country, and would possibly have saved us from the terrible war through which we have passed.
You refer, Sir, with some sarcasm, to the infant manufactures, which you think have been so long carried in the arms of the people, to their wrong and cost, as you suppose, and assume the superiority of European productiveness, and suggest, that our incapacity to manufacture being thus established, we should abandon our effort at deliverance from our industrial bondage to the Old World. To this, Sir, I reply that while, as I have stated, the countries of Western Europe have for centuries enjoyed constant, persistent and adequate protection, never relaxed, never abated, until it was rendered unnecessary by the natural growth of their infant, our manufacturing system has not had either constant or adequate protection for more than four years at a time, and that only twice before the Rebellion. The compromise tariff of 1833, being avowedly designed as a measure, calculated and intended to lead toward free-trade, as the writer can personally testify from his conversations had with Mr. Calhoun at the time.
You speak of the larcenous provisions of tariff acts to which you allude, as though a great wrong had been inflicted on the masses of the people for the benefit of the class of manufacturers. You forget or you ignore the fact, that the time, when these manufacturers thus prospered, labor was in demand and wages high, immigration increased, farm products found a large and profitable home market, the revenue was abundant, merchants and farmers were alike successful, and general prosperity prevailed. You forget or you ignore the fact, that in stimulating domestic manufactures we but increase the demand for agricultural produce, and bring to the farmers door a market more certain and more profitable, than he can possibly find abroad.
You speak of twenty-five years (!) of high protection, as though the manufacturers of the country alone were interested, putting aside entirely the consideration of the fact, that all the taxation, needed for the nations wants, was supplied from this source ; that thus the visits of the tax-gatherer to the farmer were entirely dispensed with, and most articles in general consumption among our people, such as tea and coffee, were rendered exempt from duty.
PROFITS OF MANUFACTURERS.
You indict the manufacturers of the United States for their selfishness and want of patriotism, in securing the enactment of protective laws, and contrast with it the course, which you allege to have been pursued by the farmers. Sir, I do not care to enter on the ungracious task of comparing one class of my fellow-citizens with another, the more so, as during the late fearful trial, through which our country has passed, the magnanimous and self-sacrificing patriotism of them both has been so conspicuously vindicated ; but, as one of those implicated in the charge you make, I may, perhaps, be permitted to state one fact from my own personal experience as a manufacturer, calculated to show, that, if we had been grasping, as you represent, our object of making large gains has, at least, not been accomplished. During a period of over thirty years, engaged in the manufacture of iron, the capital invested by one has not on the average yielded me four per cent. per annum, and this with all the skill, energy and perseverance, which I was able to command in promoting its profitable employment ; and that my own case was not exceptional may be gathered from the fact, that during the same period nearly, if not quite all my brother manufacturers, who were engaged largely in the same industry, were compelled to succumb to the pressure of adverse circumstances, caused by the fluctuating policy of the general Government, and to pass into bankruptcy.
Such has been the experience, through which the men of enterprise, genius and capital have passed, who were induced to volunteer at the time of the countrys greatest need as pioneers in the great work of establishing our manufacturing independence, and at the sacrifice, in most cases, of their own fortunes, laid the foundation of that noble fabric of industrial independence, which we rejoice to see now rising solid and symmetrical in this great land.
THE TARIFF AND THE WOOL-GROWERS.
That the farmers sought, and rightfully sought, protection, when their interests demanded it, the experience of the sugar-planters of the South and the wool-growers of the North abundantly testifies ; and I must confess my surprise at the representation you make of the recent legislation in favor of the growers of wool. You say, it is believed by many, that the wool-grower is at length, under recent acts of Congress, equally protected with the manufacturer. It may be so. The stable door may be locked after the horse is stolen. But in the meantime the manufacturer has been made richhas doubled and quadrupled his capital, while the wool-grower has grown poor, and in many cases lost his capital.
You remember, Sir, that at the close of the last session of Congress, after a bill, designed to amend the present tariff law, had been rejected in the Senate, chiefly through the influence of the Western States, a wool tariff was suddenly enacted, having for its special object the interest of the wool-growers of the country. For this tariff, I rejoice to know, the true friends of domestic industry in Congress, with a noble consistency, voted, albeit their own plan of legislation had but just been defeated by the Representatives in the Senate of these very wool-growers. I regret, Sir, that you do not appreciate the benefits, thus accorded to this branch of agricultural industrythat you do not, I think, is attributable to your failure to examine the factsfor the very objection you make, that the recent law has not benefited wool production, has been thus well answered in the monthly report for December, 1867, at the Department of Agriculture, in which, on this subject, are the following words :
The close of the war found full supplies of woollen goods, and immense stores of unused army clothing ; and in anticipation of legislation, affecting importation nearly as many woollens were introduced in a single year as were imported during the entire period of the war. In this state of facts, utter annihilation of wool-growing and manufacturing was only prevented by the operation of the law in repressing further importation, and inspiring confidence in the future, when the immense surplus should be exhausted. It has produced all the advantages, that its most sanguine friends could claim for it, in preventing, in a large degree, ruinous depression and the sacrifice of flocks, and in paving the way for entire success for the future, which shall benefit every interest of agriculture and every branch of industry.
THE MORRILL TARIFF.
You speak with vehement execration of the Morrill tariff of 1861, as capping the climax in the history of this iniquitous legislation ; but entirely overlook the circumstances, under which that measure was passed. The free-trade tariff of 1857 has just produced the effects, which were expected from it by the wisest thinkers in the land, and the condition of things, then existing, was well described in the following extract from Mr. Carey : With 1857 came the culmination of the system. Merchants and manufacturers became ruined, banks being compelled to suspend payment, and the Treasury being reduced to a condition of bankruptcy. In the three years that followed, labor was everywhere in excess. Wages were low, immigration below the point, at which it had stood for twenty years before, the home market for food diminished, and the foreign one proved so utterly worthless, that the whole export to all the manufacturing nations of Europe amounted to little more than $10,000,000. Such was the condition of things, that suggested the necessity of the Morrill tariff, which was a change in the policy of the country, the necessity of which had been made palpable by the undeniable failures of the free-trade policy of 1857. But never was a law so misrepresented as this has been. Forgive me, Sir, if I express a doubt as to your having yourself accurate information on the subject.
THE PROTECTIVE POLICY OF FRANCE.
To illustrate, I shall compare it in those branches, with which I am myself most familiar (connected with the iron industry) with the celebrated Anglo-French treaty, adopted a few months previously between the French and English Governments, and the praises of which have been so widely sung as a glorious triumph of free-trade principles. It was declared to be an abandonment by France of her protective system.
Its general character maybe learned from the above table, exhibiting the duties on English goods, imported into France, and the duties levied on the same kind of goods under the Morrill tariff.
From an examination of these figures it will be seen, that the actual duties on these goods were nearly, if not quite, as heavy (on the average) in the Free Trade treaty, as in the iniquitous Morrill tariff, and if the difference between the price of labor in France and the United States be taken into account, more strictly protective. And this, Sir, is the climax of iniquitous legislation, which you regard with such abhorrence !
HENRY C. CAREY.
You mistake in supposing, that I quoted from the works of that worthy and able man, Matthew Carey. I did not, but I did from his illustrious son, Henry C. Carey, who is the author of that system of social science, which, rising above, although never going contrary to, the objects of mere economy, seeks to harmonize and advance the social and moral, as well as the material interests of mankind ; which expounds and maintains the true and harmonious interests of industry, and seeks by the elevation of the individual man to promote the happiness and prosperity of the nation. This prophet may not as yet have accorded to him in his own country the honor, which is his due, but already do the principles of his benign philosophy begin to prevail. His works have been translated into six of the Continental languages, his teachings are studied by the statesmen and savants of Europe, and the people of Russia, Germany and Hungary, as well as of Italy and France, have to appreciate his wisdom.
Here the shallow sophisms of the teachers of a foreign school, to whom you refer, have gained a temporary popularity, but the light of truth is now penetrating our schools and colleges, as well as our farms and workshops ; and the American mind is being imbued with the necessity of establishing a great system of national industrial independence, whatever the philosophers of Manchester, or Birmingham, or Paris may say.
THE NATIONAL POLICY.
I uphold, on the very ground that you oppose, a protective tariffits bearing on the great body of consumers, especially the poorer classes, for the reason that nothing can be purchased cheap of foreigners, that must be purchased at the cost of leaving our own labor unemployed and our own good raw materials unused.
It is because all experience has demonstrated, that the surest and shortest way to cheapen the cost of goods to the consumer is to foster their home production, that I am an advocate for protection.
It is because good wages are necessary to the comfort, the independence and the elevation of the workingman, that I protest against bringing his labor into competition with that of the workmen of Europe.
It is because I desire the farmer to have a near, constant and profitable market for his meats, grain, fruit and vegetables, and manure to refresh his land, that I desire the industry of the country to be diversified and the cost of transportation diminished.
It is because I desire the manufacturer to have security in the investment of his capital and the employment of his energy in manufacturing enterprise, that I desire a fixed and stable tariff policy.
It is because I desire such a development of the resources of the country, as will render labor profitable and capital remunerative, and so induce the immigration of men, of money and laborer from Europe, that I advocate this great national policy. Not because I wish the enrichment or elevation of one class at the cost of another, but because I long for the prosperity of the entire people, whose interest in this question of national production is one.
It is because I desire the political power and the financial honor of this nation to be established and vindicated before the world, that I seek to maintain the tax-paying power of the people by promoting, by wise and salutary legislation, the general prosperity.
With regard to the question of indirect taxation, on which you speak so strongly, the length to which this letter has extended prohibits any protracted comment ; but I may say, that the experience of all commercial countries from time immemorial, has approved such taxation. England, so well versed in the art of tax-levying, has found custom duties her most effective and convenient method. By the same means and with a facility perhaps more remarkable, the United States have from the beginning mainly supplied the wants of her Treasury.
On this subject I will only further add the warning voice of Chancellor Kent against a reliance on direct taxation to maintain the Government and pay the national debt. He assures us that as soon as the old confederacy of States was ratified, the States began to fail in a prompt and faithful obedience to the laws ; and, as danger receded, instances of neglect became more frequent, and by the time of the peace of 1783, the delinquencies of one State became the apology for another, until the idea of supplying the pecuniary wants of the nation from requisitions on the State was found to be a phantom.
With sincere personal regard, I am, dear Sir, yours very faithfully,
Hon. Heman J. Redfield, Batavia, N.Y.
PETER COOPERS ADDRESS BEFORE THE AMERICAN INDUSTRIAL LEAGUE,
GENTLEMEN.I have taken the liberty to invite you to this Conference, as the friend of American industry. The object, as expressed in the letter of invitation, is to take counsel as to the present condition of our industrial and financial interests, and to enforce the necessity of increased efforts to awaken and instruct public sentiment on those subjects ; and also, I may add, to encourage the adoption of those measures, that will most effectually promote all the substantial interests of our common country.
The present time, Gentlemen, is peculiarly appropriate for such a conference. We are on the eve of a new administration, which, we have reason to believe, will be characterized by a marked and peculiar anxiety to restore public confidence and credit, as the best means to invigorate all the varied industries of a nation. We believe, that the man, who, we hope, will soon stand at the head of that administration, will surround himself with men in full sympathy with every industrial interest. Let us then give a word, not only of counsel but encouragement, to the man, to whose hands may so soon be confided the guidance of the ship of state.
More than three years, Gentlemen, have elapsed since Lees surrender and the final suppression of the Rebellion, and yet, although financiers, economists in the Cabinet and in Congress, have during all that time been exercising their science and their skill to bring about specie payment, the premium on gold is nearly as high as it was on that sad day, on which the martyred Lincoln found his death ; and to all external appearance we are as far from that result now as we were at that time. This fact may be humiliating and discouraging to us as Americans, who know the wealth and capacity of our country, who know, too, the unalterable purpose of our people to maintain at all cost the nations credit, and to secure the national solvency, against all the plots of repudiators or rebels, whether at the North or at the South. But it is surely suggestive of the necessity of adopting, without a days delay, a change in the financial policy of the country, which has thus worked so badly.
The three years, which have thus passed, have been marked by enormous, unprecedented importations of goods, the products of foreign labor. We have thus (to employ the language of a Gentleman, to whom the producers of this country owe a debt of lasting gratitude for his indomitable and useful efforts in behalf of the industry of the country, I mean Mr. E.B. Ward, of Detroit), paid to foreign countries all our cotton, corn and other of our products, that they would purchase ; we have paid them all the accumulated gold and silver we had before the war ; we have paid them twelve hundred millions of dollars worth of our State, railroad and national securities, which Europe now holds and upon which she receives annual interest ; and we are still paying her all the precious metals we obtain from our mines.
What we require for a healthy resumption of specie payment, is a relief from all excessive internal taxation, with such an adjustment of duties on foreign imports, as will bring the balance of trade in favor of the United States.
We find, in the face of these facts, that eminent American citizens, and eminent American journals, have lent and are lending their powerful, but ill-directed influence, to the furtherance of this fatal policy.
Perhaps, it should not be thought strange or wonderful, if great and good men should imperceptibly run into errors, in an effort to reduce so complicated and difficult a subject, as that of free trade and protection to a positive science.
Science, although it may be represented by a line of no variation, will, nevertheless, be better understood by calling science, knowledge demonstrated by facts, wrought out in the actual experience of mankind. Experience teaches, as the poet says, that with man a thousand movements scarce one purpose gain, while with God, one single can its end produce, and serve to second to some other use.
In our efforts to carry out this beautiful theory of free trade, we find ourselves compelled, by circumstances beyond our control, to meet and overcome difficulties, like the mariner, who desires to go to a distant part of the world.
The mariner has the north star, his chronometer and compass, to guide him by nighthe has the sun, his compass, quadrant and chart to aid him in his course by day, which enable him to pass through winding channels and around islands and shoals, that are directly between him and the object of his desire. So it is with us ; we are compelled to find our way by the light of experience, out of the artificial windings, and around the islands and shoals, that ignorance and avarice have placed in the path of a worlds progress.
The true object of all government is to prevent the strong from oppressing the weak, and to obtain for a whole people that security and those comforts, which the same people could not obtain for themselves by acting in their individual capacity.
The very idea of a government carries with it the idea of the embodied power and wisdom of a people. A power to be used to establish justice, and promote the general welfare.
A wise government, acting for the good of all, would carefully examine so important a subject, as that of free trade or protection, before adopting either, as a matter, or system of state policy.
The subject of free trade and protection is one, about which a constant conflict has been going on for ages, and about which volumes have been written without coming near to a settlement of public opinion on what is, or would be, the wisest policy for a nation to adopt.
What renders the subject of free trade or protection so difficult to be understood and applied as a positive science, is the fact, that what would be wise and best for one state and condition of society, would be altogether unwise and inapplicable, when the wants of the same people and the means of supplying them, had changed with their condition. This we have verified in our own experience, in our own struggles for the nations life.
A wise government, in our altered condition, would endeavor to ascertain how far free trade or protection, as a system of national policy, would affect the industry of a country under the circumstances, in which the country is then placed. A wise government should strengthen its own independence, by encouraging the manufacture of every article of necessity, where the raw material is in as high a degree of perfection, as it can be found in any other country, and where the material can be wrought into useful forms, with as small an expense of human labor as in other countries. None will contend, that we, as individuals, or as a nation, should depend upon others for those things, that we can manufacture for ourselves cheaper and better than we can buy them from foreign nations.
It may often happen with a young nation, where there is a want of capital, machinery and experience, that it will require, for a short time, some governmental encouragement to enable capital to combine and operate successfully, so as to encourage the industry of a country to put its raw materials into useful forms for its own consumption. Such governmental protection may be given by bounties, or by incidental protection in the form of duties on similar articles, imported from foreign countries.
The advocates of free trade attempt to show the fallacy of protecting American industry, by the errors and mistakes, that the government has been drawn into by designing politicians, who have persuaded the government to establish custom houses, where there was literally nothing to collect, so that in some instances to collect a dollar, it may have cost one hundred dollars. With this species of argument the advocates of free trade are trying to demolish all protection to home manufactures. They do not tell us, as they should do, that after all the mistakes the government has made, that the actual cost of collecting the revenue is but three per cent., which is cheaper than it could be collected in any other way. That system, which will most effectually promote the industry of a nation, and secure the rewards of labor to the hands that earn it, may at all times be relied on as the best system, a government can adopt. I believe, that it will not be difficult to show, that there are conditions in a nations life, when the extremes of free trade, or extreme laws for protection, would either of them derange the industry of a country, and thereby work great national ruin. To show this clearly in a few words we need only call to mind the fact, that all nations pass through changes, which are entirely beyond their control. All nations commence in weakness, wanting all that is needed to maintain a comfortable existence. Such is the dependence of one man upon another, that the farmer requires the help of the blacksmith, the wheelwright, the carpenter and mason, who are indispensable to his comfort and success. These and a variety of other branches of manufacturing industries, form a valuable home market for the farmers products, and at the same time leave the refuse to enrich the land, that-feeds them.
Nothing can be more clear and certain than the fact, that, and our own good raw materials unused. A well-directed system of diversified industry will always be found to be the surest source of national wealth and individual welfare.
The time has come, when every interest of our country requires, that the laxity, which has marked the expenditures of the peoples money, since the opening of the war, must be summarily stopped. All unnecessary expenses of every kind must be cut off, the most rigid economy in our necessary expenses must be enforcedthe frauds and peculations of office holders, which have grown to such frightful magnitude, must be exposed and prevented ; and I am glad to say, that I have reason to know that, if Mr. Wade is called upon to assume the Presidency, the force of his administration will be directed to this object of enforcing frugality in our expenditures and integrity in our officers.
Our Industrial League, Gentlemen, has labored now for nearly twelve months in the promotion of the objects I have here adverted to. It has labored, not ostentatiously, or with much parade before the public, but yet assiduously and effectively. Its object has been to disseminate widely through the country the knowledge of facts and arguments, bearing on this question, and it has honestly sought the enlightenment of the people, in regard to it. In pursuance of this object, it has established as its organ The National American, which is recognized as an able and instructive exponent of our policy, and has been the means of circulating a vast amount of valuable information on the question, of which it treats, through Leagues formed in different States.
It has inaugurated the issue of a series of brief popular tracts (of which you see specimens before you) calculated, in an attractive and graphic manner, to present the leading arguments for protection, and to refute the impolicy of free trade in the present condition of our country. It has caused the delivery through the North and West of a number of speeches and addresses by gifted and trusted men, which have already produced a deep effect upon the Western mind ; and it has been useful in furnishing to friendly journals in all sections of the country original and early information on industrial and economical subjects, which is of value to our friends of the Press and the people, among whom they circulate.
It has labored earnestly, and not without advantage, in the effort to secure the abolition of the manufacturers tax. The League is thus engaged in a good and useful work, and it only needs enlarged pecuniary support, in order greatly to increase the value of its labor.
We should not forget, that English merchants once petitioned their Government to discourage the woollen manufacture in Ireland, in order to force all Irish wool to pass through English looms, before being converted into cloth for their own consumption. To accomplish this, according to Adam Smith, the government of England made war to obtain colonies for customers.
In 1710, the House of Commons declared that the erection of manufactories in the colonies lessened their dependence on Great Britain. In 1750, the erection of any mill for rolling or slitting iron was prohibited by law. In 1765, it was made a heavy penalty to export artisans or machinery of any kind to the colonies.
I thank, you, gentlemen, for the patience, with which you have listened to these remarks.
LETTER OF HON. JOHN COVODE, M.C., TO PETER COOPER.
House of Representatives, April 24, 1868.
MY DEAR SIR : The pressure of public duties will deny me the pleasure of participating in person at the Conference of the American Industrial League on the 28th instant, but my most earnest sympathies will be present and active on an occasion of such interest and importance.
There never was a period in the history of the country, when the wisdom, if not the necessity, of protecting our domestic industry, was more apparent than at the present time, when an unaccustomed national debt and taxation rest so heavily upon every branch of enterprise, and burden so seriously the labor of those, who earn their bread by the sweat of their brow.
The fact is painfully true, that more labor is now unemployed throughout the country than was ever before known, in comparison to the actual population, and experience demonstrates, that crime increases in proportion to the extent of idleness. The primary cause for this state of things is to be found in the excessive importations, which, not only enter into competition with and destroy our infant manufactures, but work a double injury by the drain of our precious metals and equally precious Government Securities. Under this ruinous system, the American people are sustaining the cheap and pauper labor of Europe, and through it the despotism of the old world, at the expense of our own free, intelligent and honest industry. With a soil teeming with mineral and agricultural wealth of every description, we are annually importing three or four hundred millions of the products of European agriculture and mines in the form of manufactured fabrics, thus augmenting the burdens, that already sufficiently oppress American labor, and stifling its prosperous development.
Protection is a natural law, by which every country seeks to promote the welfare of its own industry, and which those practise most thoroughly, who, like England, shout the loudest for so-called Free Trade. The nation, which neglects this duty, must expect to pay a severe penalty of privation and poverty. Its broad and generous principle is to bring the consumers and producers near together, to diversify the pursuits of labor, to establish harmony and unity among them all and, by well recompensed employment, to instruct, elevate and dignify the working man, so as to fit him for all the duties, and to entitle him to enjoy all the responsibilities of an American citizen.
Aside from this economic view, protection is the most patent and practical element of reconstruction, that can be applied to the Southern communities, because it is that which, with wise legislation, will be most permanent, and which addresses itself directly to the reparation of that ruin and prostration, which are the natural consequences of an unprovoked Rebellion. When the interests of a people are harmonious and work together by a common impulse, political discontent must cease to exist. If the Tariff of 1842, modified by experience, had been permitted to stand, secession would have never raised its parricidal arm in the South, and slavery would have been extinguished by natural causes, without commotion or bloodshed. Let us not forget that instruction in the future, or fail to remember, that the influence of British Free Traders and their allies, who overthrew that beneficent policy in 1847, and thus planted the seeds, which expanded into civil war, in 1861, is again at work and seeking a new field for its pernicious designs. Protection is a bond of union for the whole country, North and South. East and West. With it, all sectional jealousies will disappear, and therefore its encouragement becomes a patriotic duty.
With high respect,
HON. PETER COOPER.