Essays on political economy; or, The most certain means of promoting the wealth, power, resources, and happiness of nations: applied particularly to the United States

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Extract from the American Farmer.

Preface

THIS collection of Essays is liable to one very strong objection, which I state in the foreground, as a sort of caveat emptor^ that the purchaser may be early aware of what he has to expect, and form his determination accordingly.

Many of the facts and arguments are repeated twice and thrice, and some few even four times. This circumstance, which arises out of the nature of the case, can be easily accounted for. The arguments opposed to the doctrines herein advocated, are few in number ; but have been, for above thirty years, unceasingly repeated by almost every writer who has discussed the subject, and often in the same words. It is evident, that an objection once fully answered, if twenty or fifty times repeated, must be twenty or fifty times refuted by nearly the same arguments. The reasonings against, and the dissuasives from, vice and guilt, as well as the arguments in favour of virtue, used by the earliest moralists, have been repeated from age to age ever since, with mere variations of style and manner, by their successors in the same useful and honourable career.

The principal objections alleged in 1789 against interposing the powerful segis of governmental protection in favour of that important portion of the national industry devoted to convert the rude produce of the earth into such shapes and forms as are demanded by the necessities, the comfort, or the luxury of mankind, were — that we had not capital to spare for manufactures on an extensive scale — that it would divert capital from more to less useful objects — that our labour was too dear to allow us to compete with European or Asiatic industry — that while we had so much vacant lands, it was our duty to direct our industry to the cultivation of the soil — that manufacturing establishments tended to demoralize those occupied in them — that agriculture was the most useful and most innocent employment of mankind — that protecting or prohibitory duties would destroy commerce, afford a monopoly to one class of our own citizens, and thus tax the many for the benefit of the few, &c. To these objections was added, after the late war, the danger of a repetition of the extortion, confidently asserted to have been perpetrated by the manufacturers during its continuance.

Now, every one of these objections, except the last, which of course did not exist in his time, was discussed and triumphantly refuted by Alexander Hamilton in 1791. They

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have been, nevertheless, throughout the whole period that has since intervened, as flippantly advanced, and as pertinaciously insisted on, not only as if they had never been refuted, but as if they were so thoroughly and completely established as to bid defiance to argument. What can be done in such a case, but repeat the refutation as often as the objection is repeated ?

The various essays contained in this work were written at different periods, during the last three years, to meet and refute some of the great number of essays and memorials against the protection of manufactures, in which the old arguments were repeated — and of course it was indispensable to pursue the course above traced out. And as truth travels slowly, it is probable, that whoever takes up the subject ten or twenty years hence, may have to adduce many of the same arguments as I have done.

I will exemplify this reasoning by the case of the accusation of extortion, of which such use was made in 1816, to defeat the hopes of the manufacturers, and consign so many of them to destruction. This accusation has been times without number in newspaper essays, paragraphs, petitions and memorials, and was advanced in conversation almost hourly in 1816 in every company. The proper answer to it is, that the cotton planter who raised the price of his cotton from thirteen cents per pound to twenty-seven, between 1814 and 1816 — the tobacco planter, who in 1816 raised the price of tobacco from g96 to ^185 — the farmer who raised that of wheat from one dollar per bushel to three dollars during the wars of the French revolution — and the merchants, who availed themselves of every opportunity of scarcity, to lay enormous advances on their goods, often ten, twenty, and thirty per cent, in a month — could not, without the most manifest disregard of justice and propriety, charge their fellow-citizens with extortion, for an increase of prices, which arose chiefly out of the increase of the price of raw materials, labour, and sites for establishments. This answer was repeatedly and fully made in 1816, and ought to foreclose the objection for ever. But it is still adduced with undiminished confidence, and by men, against whom the accusation would lie with infinitely more propriety. So little attention is paid to the scriptural admonition : " First take the beam out of thine own eye, " and then thou shalt see clearly to cast out the mote out of *' thy brother'^s eye.''''

It may be said, that in the republication, the repetitions might have been avoided, and the matter condensed. This arrangement I contemplated, and had determined on — but on trial, I found it would so totally derange the different essays.

PREFACE. IX

that the whole work would require to be moulded anew, which would consume nearly as much time as the original composition. I could not reconcile myself to encounter this labour — and was therefore under the necessity of either abandoning the whole, or republishing in the present form.

To the former alternative I had strong objections. Many of the facts, (of these, I presume, I may speak freely,) collected with considerable research, are immensely important, and shed great light on the subject. They deserve to be put into permanent form, for the use of those who may hereafter devote themselves to this most important study — otherwise many of them, derived from scarce works, not easily procured, might be sought for in vain, or require trouble in the research, which few persons would be willing to undertake.

But let it be observed, that the whole amount of the repeated matter would not probably extend to fifty pages — and the volume contains about that quantity beyond the size I proposed to give.

To conclude this point, I wish it distinctly understood, that this volume is presented to the public merely as a collection of pamphlets, written at different times on one subject, and of course containing many repetitions — and not by any means as one continued work, in which the topics are discussed in regular order, and then dismissed. Should the latter estimate be formed of it, it would be found greatly deficient. It is to be regarded merely as a work of occasional reference, in which I hope it will be found useful.

Throughout these essays, there are various assumptions made, two of which I have already discovered to be erroneous — and others may probably be in the same situation. I therefore wish the reader to subject them universally to a severe scrutiny — and to admit none until they have undergone that ordeal. The proper data, on which to predicate assumptions in political economy, are difficult of attainment, even in countries where much greater facilities are afforded than are accessible by writers here. This circumstance pleads powerfully in extenuation of errors.

The recent census proves, that in pages 331 and 479 I have greatly erred in fixing the proportions of the different classes of society — having rated the agricultural class too low, and the other classes too high. I have, moreover, elsewhere, in , two instances, estimated very differently the consumption of food and drink by each member of society. I regret this discrepancy, and other errors, " quos incuria fudW'' — and throw myself on the indulgence of a public, .a sincere desire to promote whose welfare and happiness has given birth to

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this work, which is published with a full conviction of its manifold imperfections. Let me be permitted to add, in the words of the great Chaptal — ^" I have neglected nothing to *' procure correct information. I do not, however, pretend *' to publish a perfect work. All that I can pledge myself " for, is, that it emanates from honest intentions."* Such is the language of the Minister of the Interior of France, respecting his admirable work on " French Industry." If, with the immense advantages he possessed through his official station, and his unlimited command of the national statistics — he found it necessary to propitiate public opinion for the indulgence of his errors — how incomparably more necessary is such propitiation for this work, labouring as I have done, under almost every kind of disadvantage to which a writer is liable. f Let me observe, as an additional reason for critical indulgence, that before I began to write the Addresses of the Philadelphia Society for the Promotion of National Industry in 1819, I had never devoted three days to the study of political economy.

As some of the articles contained in this volume, viz. the Addresses of the Philadelphia Society for the promotion of National Industry — the Memorial to Congress — the Report of a Committee of the Citizens of Philadelphia — ^^and the Circular Letter of the same committee, were issued in the names of public bodies, it may be proper to state how far the authorship has been correctly appropriated. They were all written by the same hand as the rest of the contents of the volume — put into type — carefully corrected — and then read to the bodies respectively, in whose name they were published. Emendations were occasionally suggested by the members, and were generally adopted by the writer. No. 12 and 13 of the first-mentioned set of papers, were written by Dr. Samuel Jackson.

f The pains I have taken to procure correct information are scarcely credible — as are the difficulties I have experienced, where none were to have been expected. Numbers of persons, deeply interested in the result of these discussions, iiave not condescended to reply to civil letters requesting information fully within their power.

It is an extraordinary fact, that there were 4750 copies of the circular letter, page 229, distributed throughout the United States, one to every post-office, of which the number was about 3600 — the i-emainder in different directions — and that not more than ten or a dozen answers were received.

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THE PHILADELPHIA SOCIETY

FOR

THE PROMOTION

NATIONAL INDUSTRY.

" A trade is disadvantageous to a nation which brings in things of mere luxury or pleasure, which are entirely or for the most part consumed among us.

" Much worse is that trade which brings in a commodity that is not only consumed among us, but hinders the consumption of the like quantity of ours.

" That trade is eminently bad, which supplies the same articles as -we manufacinre ourselves, especially if we can make enough for our consumption." — British Merchant, vol. i. p. 4.

" Foreign luxuries, and needless manufactures, imported and used in a nation, increase the people of the nation that furnislies them, aiid diminish the people of the nation that uses them.

" Laws, therefore, that prevent such importations, and, on the contrary, promote the exportation of manufactures, to be consumed in foreign countries, may be called, (with respect to the people that make them,) generative laws .■ as, by increasing subsisteiice, they encourage mai~riage.

" Such laws, likewise, streiigthen a nation doubly, by increasing its own people, and diminishing its neighbours." — Franklin's Works, vol. iv. pp. 188, 189.

SIXTH EDITION.

PHILADELPHIA.

ERRATA.

The reader is requested to correct with his pen the following and some minor errors which have escaped attention.

Page 9, line 22, dele Holland.

26, line 19, for conferences read consequences. 225, line 36, dele and the JVetherlands. 294, line 25, for fojir read three.

471, line 4, for fifty-seven read sixty. 540, line 3, for onii/ read duty.

Preface To The Addresses

IN presenting our fellow citizens with these addresses, collected together, we cannot refrain from expressing our high sense of the very favourable reception they have experienced. The various defects of style and arrangement which pervade them, have been overlooked, in consideration of the magnitude of the subject they embrace.

We feel persuaded that the cause we advocate yields to none in importance. It is a great error to suppose, as unhappily is too frequently done, that it is the cause of the manufacturers alone. Nothing can be more foreign from the real fact. It is the cause of the nation. It is the mighty question, whether we shall be really or nominally independent — whether we shall persevere in a policy, which, in four or five years, has done more to prostrate our strength and resources, than a fierce war of equal duration could have done — a policy similar to that which has sunk and degraded Spain for centuries, notwithstanding her immense internal and colonial resources — a policy which has never failed, and never can fail, to debilitate and impoverish every country where it has prevailed or may prevail — a policy discarded by every wise nation in Europe — a policy in direct hostility with that of England, Russia, Austria, France, Holtend, and Denmark — a policy, in a word, that fosters and promotes the wealth, power, resources, industry, and manufactures ol foreign nations, and represses and paralizes those of our own country.

If there be any one truth in political economy more sacred and irrefragable than another, it is, that the prosperity of nations bears an exact proportion to the encouragement of their domestic industry — and that their decay and decrepitude commence and proceed pari passu with their neglect of it. The wonderful resources of England, so far beyond her intrinsic ad-

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vantages, and the prostrate state of Spain and Portugal, notwithstanding the numberless blessings bestowed on them by nature, place these great truths on the most impregnable ground.

The United States pursue a wayward and short-sighted policy, of which the world affords few examples, and which evinces how little we have profited by the experience of other nations — and how much we neglect the maxims of the wise statesmen of Europe, as well as of our own country. •— With a capacity to raise cotton to supply the whole world, our treasures are lavished in Hindostan to purchase cotton of inferior quality, which is now manufactured in the United States,* to the injury of our cotton planters. And with skill, talents, water-power, capital, and machinery to supply our utmost demand for cambrics and muslins, millions of money are in a similar manner lavished in Hindostan and England, to procure those articles ; while tens of thousands of our own citizens, capable of furnishing them, are pining in indigence ; their employers ruined ; and machinery, which cost millions of dollars, rusting and rotting ; and while hundreds of manufacturers, invited to our shores by the excellence of our form of government, are unable to earn a subsistence at their usual trades, and are forced to go to Canada or Nova Scotia, or to return to Europe.f About fifty sailed from hence in one vessel, a few days since.

Under the influence of such a mistaken system, is it wonderful, that distress and embarrassment pervade the nation — that the enlivening sound of the spindle, the loom, and the hammer, has in many places almost ceased to be heard — that our merchants and traders are daily swept away by bankruptcy, one after another — that our banks are drained of their specie — that our cities exhibit an unvarying scene of gloom and despair — that confidence between man and man is almost extinct — that debts cannot in general be collected — that property cannot be sold but at enormous sacrifices — that capitalists have thus an opportunity of aggrandizing themselves at the expense of the middle class of society, to an incalculable extent — that money cannot be borrowed, but at an extravagant interest — in a word, that with advantages equal to any that Heaven has ever bestowed on any nation, we exhibit a state of things at which our enemies must rejoice — and our friends put on sackcloth and ashes ?:j; We trust the day is not far distant, when we shall cast a retrospective eye on this lamentable folly, with as much as-

* [At the time this was written, there were large quantities of East India Cottoij. used by the manufacturers of the U. S.]

I [It is ]n-obable, that above one thousand emigrants retvimedfrom the U. S. to their native countries in 1819.]

t [For a statement of the distress of this period, see the New Olive Branch, Chapter VD.] '^

Preface To T»e Addresses. 11

tonishment, as we now do at the folly and wickedness of our ancestors in hanging and burning witches. The folly in both cases is about equal. Theirs, however, was limited to a narrow sphere, out of which it was perfectly innocuous. But ours extends its baneful influence to the remotest extremities of the nation.

We are gravely told, by writers on whom, unfortunately, great reliance is placed, that our circumstances as a nation being materially different from those of other nations, we require a totally different policy — and that, however proper or necessary it maybe for England or France, to encourage manufactures, sound policy dictates a different course for the United States.

These maxims are the reverse of truth ; and having had great influence on the operations of our government, have proved highly pernicious. We are, on the contrary, more imperiously called on to encourage manufactures than most other nations, unless we be disposed wantonly to sacrifice the interests of a most important and numerous portion of our population, those farmers and planters who are remote from the seaboard. We request a patient hearing while we offer our reasons.

In a compact country, like England, where inland navigation is carried to such a wonderful extent, there are few parts of the kingdom that are not within one or two days' carriage of the seaboard — and consequently their productions can be transported to foreign markets at a moderate expense. Whereas a large portion of our agricultural citizens are from three hundred to a thousand miles distant from any seaport, and therefore almost wholly debarred from all foreign markets, especially at the present and all probable future prices.

Flour has been forwarded to the Philadelphia market from Pittsburg, at a freight of four dollars per barrel. Some of it was probably brought to Pittsburg, from fifty to a hundred and fifty miles, at considerable expense. Deduct the expenses and profits of the Pittsburg merchants, from six or seven dollars, and in what a lamentable situation it places the farmer — how miserable a remuneration he has for his labour — and how " dear he pays for the xvhhtle^'' in buying his goods cheap in Hindostan, and depending on European markets for the sale of his productions !

The consequences of this system are so pernicious, that it requires a little further notice. A farmer in the neighbourhood of Pittsburg, sends his produce to that city, whence it is conveyed to Philadelphia, three hundred miles by land — or to New Orleans, two thousand by water. It is thence conveyed toui thousand to Liverpool, from whence he receives his china, his delftware, and his pottery. From the amount of his flour as sold in England, all the expenses of transportation are to be de»-

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ducted — and to the price of his china and other articles, the expenses of the return voyage are to be added. What a frightful view of the situation of a large portion of the people of the western country does this sketch exhibit ? Is it difficult to account for the prostrate state of affairs in that part of the union^ and under a government, which, emanating more completely from the mass of the people than any other that ever existed, might have been expected to have extended a more paternal care over its citizens than the world ever witnessed !

It is therefore indubitable, that to the reasons for encouraging manufactures, existing in England and France, all of which apply here, is to be added a powerful one peculiar to the United States, arising from the distance between so large a portion of our territory and any seaport towns, as well as the immense distance from those towns to the countries from whence we draw our supplies.

Let us suppose for a moment, that the western farmer, instead of purchasing his pottery and delftware in England, had, in his own neighbourhood, manufactories of those articles, whence he could procure them free of the enormous expenses of sea and land carriages, amounting in many instances to treble the first cost — and that in return, he supplied the manufacturer, of whom he purchased them, with his wheat and corn and other articles ! —What a different face that country would wear ! — What rapid Strides it would then make in the career of prosperity ! — What additional allurements it would hold out to immigrants !

We offer for reflection, fellow-citizens, an important fact, that sheds the strongest light on this theory. The settlement of Harmony in the western country, was conducted on this plan. This little commonwealth depended wholly on itself for supplies. It had, to use the cogent language of Mr. Jefferson, '■'■ placed the manufacturer beside the agriculturist y What was the consequence ? The settlement made more rapid advances in wealth and -prosperity, than any equal body of men in the world at any period of time — more, in one year, than other parts of the United States, which depend on foreign markets for the sale of their produce and the supply of their wants, have done in ten.

It is frequently stated, that as some of the cotton manufacturers in the eastern states have prospered, the protection to the manufacture is abundantly adequate. If this argument warranted the inference drawn from it, it would prove that the policy of Spain is sound, and fraught with wisdom ; for notwithstanding the decay of that nation, there are in it many prosperous manufactures, which, from particular circumstances, are, like some of those in the eastern states, enabled to struggle against foreign competition. — But the decay of so large a portion of the manufacturing establishments in the middle and

Preface To The Addresses. 13

eastern states, notwithstanding the enterprise, large capital, and industry of the proprietors, is a full proof that there is not sufficient protection to this important branch.

Public attention has unfortunately been diverted from the real sources of our prostrate state, by certain trite common places, re-echoed throughout the union, — that it is a time of general suffering — that distress and embarrassment pervade the whole civilized world — that we are no worse than other nations — and that we cannot hope for an exemption from the common lot of mankind.

This appears plausible — but will not stand the test of examination. It is not wonderful, that the nations of Europe, exhausted by a twenty years war — pillaged and plundered by hostile armies — with expensive governments and immense armies to support in time of peace — and groaning under the weight of enormous debts, and grinding tithes and taxes, should be in a state of suffering. But there is no parallel between their situation and ours. Our short war, far from exhausting our resources, developed them. We retired from it, prosperous and glorious. Our fields are as fertile— our citizens as industrious and ingenious — our capacity for manufacturing as great as ever — and our taxes are comparatively insignificant. Our distresses cannot therefore be traced to the same source as theirs. They flow wholly from our own mistaken policy, Avhich leads us to pur chase abroad what we could produce at home — and, like thoughtless prodigals and spendthrifts, to incur debts beyond our utmost means of payment.

The restoration of peace, however, as might have been naturally expected, greatly affected our commerce, particularly the carrying trade, of which the war had given us an inordinate share. An immense capital, invested in commerce, was thus rendered wholly unproductive ; and, had manufactures been encouraged, as sound policy dictated, hundreds of our merchants, whose property has since wasted away, and who have been swallowed up in the vortex of bankruptcy, would, as was the case during the war, have transferred their talents, their industry, and their capital to that department, to the advancement of their own interest and the general welfare ; instead of a vain struggle in a branch which was so overstocked, that it could not afford support to more than half the persons engaged in it. — Those that remained in the mercantile profession, after such a transfer of a portion of its members to profitable employment of another description, might and probably would have prospered. And thus it is as clear as the noon-da}'^ sun, that an efficient protection of manufactures would have been highly advantageous to the merchants ; although many of them, from taking a super-

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ficial view of the subject, have been under an opposite impres* sion, and have, unfortunately, been hostile to such protection.

The advocates of the system of Adam Smith ought to be satisfied with the fatal experiment we have made of it. It is true, the demands of the treasury have not allowed us to proceed its full length, and to discard import duties altogether. But as our manufactures are paralized, so large a portion of our manufacturers ruined, and our country almost wholly drained of its metallic medium, to pay for foreign merchandize, notwithstanding the duties imposed Jor the purpose of revenuCy it is perfectly reasonable to conclude, that the destruction would have been more rapid and complete, had those duties not existed. This, we hope will be regarded as decisive ; for, if our woolen manufacture, for instance, protected, as it is termed, by a duty of 27 1-2 per cent., has been more than one half destroyed, so that it was no longer an object to preserve the invaluable breed of Merino sheep, in which millions of dollars were invested, and of which the greater part have been consigned to the shambles, to the great and manifest injury of the proprietors, it cannot be doubted, that, without such duty, it would have been at once wholly annihilated, as our citizens would, in that event, have been utterly unable to maintain a struggle against foreign rivals. If argument were of avail against the dazzling authority of great names, and against ingrained, inveterate prejudice, this case would settle this question forever. Where are now, we asky the " collateral branchefi^'' to which the thousands of our artists, mechanics, and manufacturers, " thrown out of their ordinary employment^ and common method of subsistence^'' can *' easily transfer their industry y^"*^ as Dr. Smith asserts ?

Another part of Dr. Smith's theory, is, that when a particular branch of industry is destroyed by " the home market being suddenly laid open to the competition of foreigners'^ " the stock will still remain in the country^ to employ an equal number of people in some other xvay.^^ And, therefore, '■'• the capital of the country remaining the same^ the demand for labour zvill still be the same^ though it may be exerted in different places^ and Jor different occupations ?''\ These maxims are now fairly tested in the United States, as they have been for centuries in Spain. The cotton, woollen, pottery, glass, and various other manufactures, have been in a great measure suspended in the middle states, by " the home market being suddenly laid open to the competition of foreigners'''' at the close of the war. Is there a man who will venture to assert, that " the demand for labour is the same?^^ that " the stock remains the sameP^ or that it " employs an equal number of people in some other zuayP'^ We flatter ourselves that the

* Wealth of JSTations, Hartford Edition, I. 329—30, f Ibid.