which of them applies to a given article, yet the distinctions themselves exist, and in most cases will be sufficiently clear to indicate the true course of policy; and, unless I have greatly mistaken the prevailing sentiment in the councils of England, it grows every day more and more favorable to the diminution of restrictions, and to the wisdom of leaving much (I do not say every thing, for that would not be true) to the enterprise and the discretion of individuals. I should certainly not have taken up the time of the committee to state at any length the opinions of other governments, or of the public men of other countries, upon a subject like this; but an occasional remark made by me the other day, having been so directly controverted, especially by Mr. Speaker, in his observations yesterday, I must take occasion to refer to some proofs of what I have stated.
What, then, is the state of English opinion? Everybody knows that, after the termination of the late European war, there came a time of great pressure in England. Since her example has been quoted, let it be asked in what mode her government sought relief. Did it aim to maintain artificial and unnatural prices? Did it maintain a swollen and extravagant paper circulation? Did it carry further the laws of prohibition and exclusion? Did it draw closer the cords of colonial restraint? No, Sir, but precisely the reverse. Instead of relying on legislative contrivances and artificial devices, it trusted to the enterprise and industry of the people, which it sedulously sought to excite, not by imposing restraint, but by removing it, wherever its removal was practicable. In May, 1820, the attention of the government having been much turned to the state of foreign trade, a distinguished member[2] of the House of Peers brought forward a Parliamentary motion upon that subject, followed by an ample discussion and a full statement of his own opinions. In the course of his remarks, he observed, “that there ought to be no prohibitory duties as such; for that it was evident, that, where a manufacture could not be carried on, or a production raised, but under the protection of a prohibitory duty, that manufacture, or that produce, could not be brought to market but at a loss. In his opinion, the name of strict prohibition might, therefore, in commerce, be got rid of altogether; but he did not see the same objection to protecting duties, which, while they admitted of the introduction of commodities from abroad similar to those which we ourselves manufactured, placed them so much on a level as to allow a competition between them.” “No axiom,” he added, “was more true than this: that it was by growing what the territory of a country could grow most cheaply, and by receiving from other countries what it could not produce except at too great an expense, that the greatest degree of happiness was to be communicated to the greatest extent of population.”
In assenting to the motion, the first minister[3] of the crown expressed his own opinion of the great advantage resulting from unrestricted freedom of trade. “Of the soundness of that general principle,” he observed, “I can entertain no doubt. I can entertain no doubt of what would have been the great advantages to the civilized world, if the system of unrestricted trade had been acted upon by every nation from the earliest period of its commercial intercourse with its neighbors. If to those advantages there could have been any exceptions, I am persuaded that they would have been but few; and I am also persuaded that the cases to which they would have referred would not have been, in themselves, connected with the trade and commerce of England. But we are now in a situation in which, I will not say that a reference to the principle of unrestricted trade can be of no use, because such a reference may correct erroneous reasoning, but in which it is impossible for us, or for any country in the world but the United States of America, to act unreservedly on that principle. The commercial regulations of the European world have been long established, and cannot suddenly be departed from.” Having supposed a proposition to be made to England by a foreign state for free commerce and intercourse, and an unrestricted exchange of agricultural products and of manufactures, he proceeds to observe: “It would be impossible to accede to such a proposition. We have risen to our present greatness under a different system. Some suppose that we have risen in consequence of that system; _others, of whom I am one, believe that we have risen in spite of that system_. But, whichever of these hypotheses be true, certain it is that we have risen under a very different system than that of free and unrestricted trade. It is utterly impossible, with our debt and taxation, even if they were but half their existing amount, that we can suddenly adopt the system of free trade.”
Lord Ellenborough, in the same debate, said, “that he attributed the general distress then existing in Europe to the regulations that had taken place since the destruction of the French power. Most of the states on the Continent had surrounded themselves as with walls of brass, to inhibit intercourse with other states. Intercourse was prohibited, even in districts of the same state, as was the case in Austria and Sardinia. Thus, though the taxes on the people had been lightened, the severity of their condition had been increased. He believed that the discontent which pervaded most parts of Europe, and especially Germany, was more owing to commercial restrictions than to any theoretical doctrines on government; and that a free communication among them would do more to restore tranquillity, than any other step that could be adopted. He objected to all attempts to frustrate the benevolent intentions of Providence, which had given to various countries various wants, in order to bring them together. He objected to it as anti-social; he objected to it as making commerce the means of barbarizing instead of enlightening nations. The state of the trade with France was most disgraceful to both countries; the two greatest civilized nations of the world, placed at a distance of scarcely twenty miles from each other, had contrived, by their artificial regulations, to reduce their commerce with each other to a mere nullity.” Every member speaking on this occasion agreed in the general sentiments favorable to unrestricted intercourse, which had thus been advanced; one of them remarking, at the conclusion of the debate, that “the principles of free trade, which he was happy to see so fully recognized, were of the utmost consequence; for, though, in the present circumstances of the country, a free trade was unattainable, yet their task hereafter was to approximate to it. Considering the prejudices and interests which were opposed to the recognition of that principle, it was no small indication of the firmness and liberality of government to have so fully conceded it.”
Sir, we have seen, in the course of this discussion, that several gentlemen have expressed their high admiration of the _silk manufacture_ of England. Its commendation was begun, I think, by the honorable member from Vermont, who sits near me, who thinks that that alone gives conclusive evidence of the benefits produced by attention to manufactures, inasmuch as it is a great source of wealth to the nation, and has amply repaid all the cost of its protection. Mr. Speaker’s approbation of this part of the English example was still warmer. Now, Sir, it does so happen, that both these gentlemen differ very widely on this point from the opinions entertained in England, by persons of the first rank, both as to knowledge and power. In the debate to which I have already referred, the proposer of the motion urged the expediency of providing for the admission of the silks of France into England. “He was aware,” he said, “that there was a poor and industrious body of manufacturers, whose interests must suffer by such an arrangement; and therefore he felt that it would be the duty of Parliament to provide for the present generation by a large Parliamentary grant. It was conformable to every principle of sound justice to do so, when the interests of a particular class were sacrificed to the good of the whole.” In answer to these observations, Lord Liverpool said that, with reference to several branches of manufactures, time, and the change of circumstances, had rendered the system of protecting duties merely nominal; and that, in his opinion, if all the protecting laws which regarded both the woollen and cotton manufactures were to be repealed, no injurious effects would thereby be occasioned. “But,” he observes, “with respect to silk, that manufacture in this kingdom is so completely artificial, that any attempt to introduce the principles of free trade with reference to it might put an end to it altogether. I allow that the silk manufacture is not natural to this country. _I wish we had never had a silk manufactory._ I allow that it is natural to France; I allow that it might have been better, had each country adhered exclusively to that manufacture in which each is superior; and had the silks of France been exchanged for British cottons. But I must look at things as they are; and when I consider the extent of capital, and the immense population, consisting, I believe, of about fifty thousand persons, engaged in our silk manufacture, I can only say, that one of the few points in which I totally disagree with the proposer of the motion is the expediency, under existing circumstances, of holding out any idea that it would be possible to relinquish the silk manufacture, and to provide for those who live by it, by Parliamentary enactment. Whatever objections there may be to the continuance of the protecting system, I repeat, that it is impossible altogether to relinquish it. I may regret that the system was ever commenced; but as I cannot recall that act, I must submit to the inconvenience by which it is attended, rather than expose the country to evils of greater magnitude.” Let it be remembered, Sir, that these are not the sentiments of a theorist, nor the fancies of speculation; but the operative opinions of the first minister of England, acknowledged to be one of the ablest and most practical statesmen of his country.
Gentlemen could have hardly been more unfortunate than in the selection of the silk manufacture in England as an example of the beneficial effects of that system which they would recommend. It is, in the language which I have quoted, completely artificial. It has been sustained by I know not how many laws, breaking in upon the plainest principles of general expediency. At the last session of Parliament, the manufacturers petitioned for the repeal of three or four of these statutes, complaining of the vexatious restrictions which they impose on the wages of labor; setting forth, that a great variety of orders has from time to time been issued by magistrates under the authority of these laws, interfering in an oppressive manner with the minutest details of the manufacture,–such as limiting the number of threads to an inch, restricting the widths of many sorts of work, and determining the quantity of labor not to be exceeded without extra wages; that by the operation of these laws, the rate of wages, instead of being left to the recognized principles of regulation, has been arbitrarily fixed by persons whose ignorance renders them incompetent to a just decision; that masters are compelled by law to pay an equal price for all work, whether well or ill performed; and that they are wholly prevented from using improved machinery, it being ordered, that work, in the weaving of which machinery is employed, shall be paid precisely at the same rate as if done by hand; that these acts have frequently given rise to the most vexatious regulations, the unintentional breach of which has subjected manufacturers to ruinous penalties; and that the introduction of all machinery being prevented, by which labor might be cheapened, and the manufacturers being compelled to pay at a fixed price, under all circumstances, they are unable to afford employment to their workmen, in times of stagnation of trade, and are compelled to stop their looms. And finally, they complain that, notwithstanding these grievances under which they labor, while carrying on their manufacture in London, the law still prohibits them, while they continue to reside there, from employing any portion of their capital in the same business in any other part of the kingdom, where it might be more beneficially conducted. Now, Sir, absurd as these laws must appear to be to every man, the attempt to repeal them did not, as far as I recollect, altogether succeed. The weavers were too numerous, their interests too great, or their prejudices too strong; and this notable instance of protection and monopoly still exists, to be lamented in England with as much sincerity as it seems to be admired here.
In order further to show the prevailing sentiment of the English government, I would refer to a report of a select committee of the House of Commons, at the head of which was the Vice-President of the Board of Trade (Mr. Wallace), in July, 1820. “The time,” say that committee, “when monopolies could be successfully supported, or would be patiently endured, either in respect to subjects against subjects, or particular countries against the rest of the world, seems to have passed away. Commerce, to continue undisturbed and secure, must be, as it was intended to be, a source of reciprocal amity between nations, and an interchange of productions to promote the industry, the wealth, and the happiness of mankind.” In moving for the re-appointment of the committee in February, 1823, the same gentleman said: “We must also get rid of that feeling of appropriation which exhibited itself in a disposition to produce every thing necessary for our own consumption, and to render ourselves independent of the world. No notion could be more absurd or mischievous; it led, even in peace, to an animosity and rancor greater than existed in time of war. Undoubtedly there would be great prejudices to combat, both in this country and elsewhere, in the attempt to remove the difficulties which are most obnoxious. It would be impossible to forget the attention which was in some respects due to the present system of protections, although that attention ought certainly not to be carried beyond the absolute necessity of the case.” And in a second report of the committee, drawn by the same gentleman, in that part of it which proposes a diminution of duties on timber from the North of Europe, and the policy of giving a legislative preference to the importation of such timber in the log, and a discouragement of the importation of deals, it is stated that the committee reject this policy, because, among other reasons, “it is founded on a principle of exclusion, which they are most averse to see brought into operation, in any _new instance_, without the warrant of some evident and great political expediency.” And on many subsequent occasions the same gentleman has taken occasion to observe, that he differed from those who thought that manufactures could not nourish without restrictions on trade; that old prejudices of that sort were dying away, and that more liberal and just sentiments were taking their place.
These sentiments appear to have been followed by important legal provisions, calculated to remove restrictions and prohibitions where they were most severely felt; that is to say, in several branches of navigation and trade. They have relaxed their colonial system, they have opened the ports of their islands, and have done away the restriction which limited the trade of the colony to the mother country. Colonial products can now be carried directly from the islands to any part of Europe; and it may not be improbable, considering our own high duties on spirits, that that article may be exchanged hereafter by the English West India colonies directly for the timber and deals of the Baltic. It may be added, that Mr. Lowe, whom the gentleman has cited, says, that nobody supposes that the three great staples of English manufactures, cotton, woollen, and hardware, are benefited by any existing protecting duties; and that one object of all these protecting laws is usually overlooked, and that is, that they have been intended to reconcile the various interests to taxation; the corn law, for example, being designed as some equivalent to the agricultural interest for the burden of tithes and of poor-rates.
In fine, Sir, I think it is clear, that, if we now embrace the system of prohibitions and restrictions, we shall show an affection for what others have discarded, and be attempting to ornament ourselves with cast-off apparel.
Sir, I should not have gone into this prolix detail of opinions from any consideration of their special importance on the present occasion; but having happened to state that such was the actual opinion of the government of England at the present time, and the accuracy of this representation having been so confidently denied, I have chosen to put the matter beyond doubt or cavil, although at the expense of these tedious citations. I shall have occasion hereafter to refer more particularly to sundry recent British enactments, by way of showing the diligence and spirit with which that government strives to sustain its navigating interest, by opening the widest possible range to the enterprise of individual adventurers. I repeat, that I have not alluded to these examples of a foreign state as being fit to control our own policy. In the general principle, I acquiesce. Protection, when carried to the point which is now recommended, that is, to entire prohibition, seems to me destructive of all commercial intercourse between nations. We are urged to adopt the system upon general principles; and what would be the consequence of the universal application of such a general principle, but that nations would abstain entirely from all intercourse with one another? I do not admit the general principle; on the contrary, I think freedom of trade to be the general principle, and restriction the exception. And it is for every state, taking into view its own condition, to judge of the propriety, in any case, of making an exception, constantly preferring, as I think all wise governments will, not to depart without urgent reason from the general rule.
There is another point in the existing policy of England to which I would most earnestly invite the attention of the committee; I mean the warehouse system, or what we usually call the system of drawback. Very great prejudices appear to me to exist with us on that subject. We seem averse to the extension of the principle. The English government, on the contrary, appear to have carried it to the extreme of liberality. They have arrived, however, at their present opinions and present practice by slow degrees. The transit system was commenced about the year 1803, but the first law was partial and limited. It admitted the importation of raw materials for exportation, but it excluded almost every sort of manufactured goods. This was done for the same reason that we propose to prevent the transit of Canadian wheat through the United States, the fear of aiding the competition of the foreign article with our own in foreign markets. Better reflection or more experience has induced them to abandon that mode of reasoning, and to consider all such means of influencing foreign markets as nugatory; since, in the present active and enlightened state of the world, nations will supply themselves from the best sources, and the true policy of all producers, whether of raw materials or of manufactured articles, is, not vainly to endeavor to keep other vendors out of the market, but to conquer them in it by the quality and the cheapness of their articles. The present policy of England, therefore, is to allure the importation of commodities into England, there to be deposited in English warehouses, thence to be exported in assorted cargoes, and thus enabling her to carry on a general export trade to all quarters of the globe. Articles of all kinds, with the single exception of tea, may be brought into England, from any part of the world, in foreign as well as British ships, there warehoused, and again exported, at the pleasure of the owner, without the payment of any duty or government charge whatever.
While I am upon this subject, I would take notice also of the recent proposition in the English Parliament to abolish the tax on imported wool; and it is observable that those who support this proposition give the same reasons that have been offered here, within the last week, against the duty which we propose on the same article. They say that their manufacturers require a cheap and coarse wool, for the supply of the Mediterranean and Levant trade, and that, without a more free admission of the wool of the Continent, that trade will all fall into the hands of the Germans and Italians, who will carry it on through Leghorn and Trieste. While there is this duty on foreign wool to protect the wool-growers of England, there is, on the other hand, a prohibition on the exportation of the native article in aid of the manufacturers. The opinion seems to be gaining strength, that the true policy is to abolish both.
Laws have long existed in England preventing the emigration of artisans and the exportation of machinery; but the policy of these, also, has become doubted, and an inquiry has been instituted in Parliament into the expediency of repealing them. As to the emigration of artisans, say those who disapprove the laws, if that were desirable, no law could effect it; and as to the exportation of machinery, let us make it and export it as we would any other commodity. If France is determined to spin and weave her own cotton, let us, if we may, still have the benefit of furnishing the machinery.
I have stated these things, Sir, to show what seems to be the general tone of thinking and reasoning on these subjects in that country, the example of which has been so much pressed upon us. Whether the present policy of England be right or wrong, wise or unwise, it cannot, as it seems clearly to me, be quoted as an authority for carrying further the restrictive and exclusive system, either in regard to manufactures or trade. To re-establish a sound currency, to meet at once the shock, tremendous as it was, of the fall of prices, to enlarge her capacity for foreign trade, to open wide the field of individual enterprise and competition, and to say plainly and distinctly that the country must relieve itself from the embarrassments which it felt, by economy, frugality, and renewed efforts of enterprise,–these appear to be the general outline of the policy which England has pursued.
Mr. Chairman, I will now proceed to say a few words upon a topic, but for the introduction of which into this debate I should not have given the committee on this occasion the trouble of hearing me. Some days ago, I believe it was when we were settling the controversy between the oil-merchants and the tallow-chandlers, the _balance of trade_ made its appearance in debate, and I must confess, Sir, that I spoke of it, or rather spoke to it, somewhat freely and irreverently. I believe I used the hard names which have been imputed to me, and I did it simply for the purpose of laying the spectre, and driving it back to its tomb. Certainly, Sir, when I called the old notion on this subject nonsense, I did not suppose that I should offend any one, unless the dead should happen to hear me. All the living generation, I took it for granted, would think the term very properly applied. In this, however, I was mistaken. The dead and the living rise up together to call me to account, and I must defend myself as well as I am able.
Let us inquire, then, Sir, what is meant by an unfavorable balance of trade, and what the argument is, drawn from that source. By an unfavorable balance of trade, I understand, is meant that state of things in which importation exceeds exportation. To apply it to our own case, if the value of goods imported exceed the value of those exported, then the balance of trade is said to be against us, inasmuch as we have run in debt to the amount of this difference. Therefore it is said, that, if a nation continue long in a commerce like this, it must be rendered absolutely bankrupt. It is in the condition of a man that buys more than he sells; and how can such a traffic be maintained without ruin? Now, Sir, the whole fallacy of this argument consists in supposing, that, whenever the value of imports exceeds that of exports, a debt is necessarily created to the extent of the difference, whereas, ordinarily, the import is no more than the result of the export, augmented in value by the labor of transportation. The excess of imports over exports, in truth, usually shows the gains, not the losses, of trade; or, in a country that not only buys and sells goods, but employs ships in carrying goods also, it shows the profits of commerce, and the earnings of navigation. Nothing is more certain than that, in the usual course of things, and taking a series of years together, the value of our imports is the aggregate of our exports and our freights. If the value of commodities imported in a given instance did not exceed the value of the outward cargo, with which they were purchased, then it would be clear to every man’s common sense, that the voyage had not been profitable. If such commodities fell far short in value of the cost of the outward cargo, then the voyage would be a very losing one; and yet it would present exactly that state of things, which, according to the notion of a balance of trade, can alone indicate a prosperous commerce. On the other hand, if the return cargo were found to be worth much more than the outward cargo, while the merchant, having paid for the goods exported, and all the expenses of the voyage, finds a handsome sum yet in his hands, which he calls profits, the balance of trade is still against him, and, whatever he may think of it, he is in a very bad way. Although one individual or all individuals gain, the nation loses; while all its citizens grow rich, the country grows poor. This is the doctrine of the balance of trade.
Allow me, Sir, to give an instance tending to show how unaccountably individuals deceive themselves, and imagine themselves to be somewhat rapidly mending their condition, while they ought to be persuaded that, by that infallible standard, the balance of trade, they are on the high road to ruin. Some years ago, in better times than the present, a ship left one of the towns of New England with 70,000 specie dollars. She proceeded to Mocha, on the Red Sea, and there laid out these dollars in coffee, drugs, spices, and other articles procured in that market. With this new cargo she proceeded to Europe; two thirds of it were sold in Holland for $130,000, which the ship brought back, and placed in the same bank from the vaults of which she had taken her original outfit. The other third was sent to the ports of the Mediterranean, and produced a return of $25,000 in specie, and $15,000 in Italian merchandise. These sums together make $170,000 imported, which is $100,000 more than was exported, and is therefore proof of an unfavorable balance of trade, to that amount, in this adventure. We should find no great difficulty, Sir, in paying off our balances, if this were the nature of them all.
The truth is, Mr. Chairman, that all these obsolete and exploded notions had their origin in very mistaken ideas of the true nature of commerce. Commerce is not a gambling among nations for a stake, to be won by some and lost by others. It has not the tendency necessarily to impoverish one of the parties to it, while it enriches the other; all parties gain, all parties make profits, all parties grow rich, by the operations of just and liberal commerce. If the world had but one clime and but one soil; if all men had the same wants and the same means, on the spot of their existence, to gratify those wants,–then, indeed, what one obtained from the other by exchange would injure one party in the same degree that it benefited the other; then, indeed, there would be some foundation for the balance of trade. But Providence has disposed our lot much more kindly. We inhabit a various earth. We have reciprocal wants, and reciprocal means for gratifying one another’s wants. This is the true origin of commerce, which is nothing more than an exchange of equivalents, and, from the rude barter of its primitive state, to the refined and complex condition in which we see it, its principle is uniformly the same, its only object being, in every stage, to produce that exchange of commodities between individuals and between nations which shall conduce to the advantage and to the happiness of both. Commerce between nations has the same essential character as commerce between individuals, or between parts of the same nation. Cannot two individuals make an interchange of commodities which shall prove beneficial to both, or in which the balance of trade shall be in favor of both? If not, the tailor and the shoemaker, the farmer and the smith, have hitherto very much misunderstood their own interests. And with regard to the internal trade of a country, in which the same rule would apply as between nations, do we ever speak of such an intercourse as prejudicial to one side because it is useful to the other? Do we ever hear that, because the intercourse between New York and Albany is advantageous to one of those places, it must therefore be ruinous to the other?
May I be allowed, Sir, to read a passage on this subject from the observations of a gentleman, in my opinion one of the most clear and sensible writers and speakers of the age upon subjects of this sort?[4] “There is no political question on which the prevalence of false principles is so general, as in what relates to the nature of commerce and to the pretended balance of trade; and there are few which have led to a greater number of practical mistakes, attended with consequences extensively prejudicial to the happiness of mankind. In this country, our Parliamentary proceedings, our public documents, and the works of several able and popular writers, have combined to propagate the impression, that we are indebted for much of our riches to what is called the balance of trade.” “Our true policy would surely be to profess, as the object and guide of our commercial system, that which every man who has studied the subject must know to be the true principle of commerce, the interchange of reciprocal and equivalent benefit. We may rest assured that it is not in the nature of commerce to enrich one party at the expense of the other. This is a purpose at which, if it were practicable, we ought not to aim; and which, if we aimed at, we could not accomplish.” These remarks, I believe, Sir, were written some ten or twelve years ago. They are in perfect accordance with the opinions, advanced in more elaborate treatises, and now that the world has returned to a state of peace, and commerce has resumed its natural channels, and different nations are enjoying, or seeking to enjoy, their respective portions of it, all see the justness of these ideas,–all see, that, in this day of knowledge and of peace, there can be no commerce between nations but that which shall benefit all who are parties to it.
If it were necessary, Mr. Chairman, I might ask the attention of the committee to refer to a document before us, on this subject of the balance of trade. It will be seen by reference to the accounts, that, in the course of the last year, our total export to Holland exceeded two millions and a half; our total import from the same country was but seven hundred thousand dollars. Now, can any man be wild enough to make any inference from this as to the gain or loss of our trade with Holland for that year? Our trade with Russia for the same year produced a balance the other way, our import being two millions, and our export but half a million. But this has no more tendency to show the Russian trade a losing trade, than the other statement has to show that the Dutch trade has been a gainful one. Neither of them, by itself, proves any thing.
Springing out of this notion of a balance of trade, there is another idea, which has been much dwelt upon in the course of this debate; that is, that we ought not to buy of nations who do not buy of us; for example, that the Russian trade is a trade disadvantageous to the country, and ought to be discouraged, because, in the ports of Russia, we buy more than we sell. Now allow me to observe, in the first place, Sir, that we have no account showing how much we do sell in the ports of Russia. Our official returns show us only what is the amount of our direct trade with her ports. But then we all know that the proceeds of another portion of our exports go to the same market, though indirectly. We send our own products, for example, to Cuba, or to Brazil; we there exchange them for the sugar and the coffee of those countries, and these articles we carry to St. Petersburg, and there sell them. Again; our exports to Holland and Hamburg are connected directly or indirectly with our imports from Russia. What difference does it make, in sense or reason, whether a cargo of iron be bought at St. Petersburg, by the exchange of a cargo of tobacco, or whether the tobacco has been sold on the way, in a better market, in a port of Holland, the money remitted to England, and the iron paid for by a bill on London? There might indeed have been an augmented freight, there might have been some saving of commissions, if tobacco had been in brisk demand in the Russian market. But still there is nothing to show that the whole voyage may not have been highly profitable. That depends upon the original cost of the article here, the amount of freight and insurance to Holland, the price obtained there, the rate of exchange between Holland and England, the expense, then, of proceeding to St. Petersburg, the price of iron there, the rate of exchange between that place and England, the amount of freight and insurance at home, and, finally, the value of the iron when brought to our own market. These are the calculations which determine the fortune of the adventure; and nothing can be judged of it, one way or the other, by the relative state of our imports or exports with Holland, England, or Russia.
I would not be understood to deny, that it may often be our interest to cultivate a trade with countries that require most of such commodities as we can furnish, and which are capable also of directly supplying our own wants. This is the original and the simplest form of all commerce, and is no doubt highly beneficial. Some countries are so situated, that commerce, in this original form, or something near it, may be all that they can, without considerable inconvenience, carry on. Our trade, for example, with Madeira and the Western Islands has been useful to the country, as furnishing a demand for some portion of our agricultural products, which probably could not have been bought had we not received their products in return. Countries situated still farther from the great marts and highways of the commercial world may afford still stronger instances of the necessity and utility of conducting commerce on the original principle of barter, without much assistance from the operations of credit and exchange. All I would be understood to say is, that it by no means follows that we can carry on nothing but a losing trade with a country from which we receive more of her products than she receives of ours. Since I was supposed, the other day, in speaking upon this subject, to advance opinions which not only this country ought to reject, but which also other countries, and those the most distinguished for skill and success in commercial intercourse, do reject, I will ask leave to refer again to the discussion which I first mentioned in the English Parliament, relative to the foreign trade of that country. “With regard,” says the mover[5] of the proposition, “to the argument employed against renewing our intercourse with the North of Europe, namely, that those who supplied us with timber from that quarter would not receive British manufactures in return, it appeared to him futile and ungrounded. If they did not send direct for our manufactures at home, they would send for them to Leipsic and other fairs of Germany. Were not the Russian and Polish merchants purchasers there to a great amount? But he would never admit the principle, that a trade was not profitable because we were obliged to carry it on with the precious metals, or that we ought to renounce it, because our manufactures were not received by the foreign nation in return for its produce. Whatever we received must be paid for in the produce of our land and labor, directly or circuitously, and he was glad to have the noble Earl’s[6] marked concurrence in this principle.”
Referring ourselves again, Sir, to the analogies of common life, no one would say that a farmer or a mechanic should buy _only_ where he can do so by the exchange of his own produce, or of his own manufacture. Such exchange may be often convenient; and, on the other hand, the cash purchase may be often more convenient. It is the same in the intercourse of nations. Indeed, Mr. Speaker has placed this argument on very clear grounds. It was said, in the early part of the debate, that, if we cease to import English cotton fabrics, England will no longer continue to purchase our cotton. To this Mr. Speaker replied, with great force and justice, that, as she must have cotton in large quantities, she will buy the article where she can find it best and cheapest; and that it would be quite ridiculous in her, manufacturing as she still would be, for her own vast consumption and the consumption of millions in other countries, to reject our uplands because we had learned to manufacture a part of them for ourselves. Would it not be equally ridiculous in us, if the commodities of Russia were both cheaper and better suited to our wants than could be found elsewhere, to abstain from commerce with her, because she will not receive in return other commodities which we have to sell, but which she has no occasion to buy?
Intimately connected, Sir, with this topic, is another which has been brought into the debate; I mean the evil so much complained of, the exportation of specie. We hear gentlemen imputing the loss of market at home to a want of money, and this want of money to the exportation of the precious metals. We hear the India and China trade denounced, as a commerce conducted on our side, in a great measure, with gold and silver. These opinions, Sir, are clearly void of all just foundation, and we cannot too soon get rid of them. There are no shallower reasoners than those political and commercial writers who would represent it to be the only true and gainful end of commerce, to accumulate the precious metals. These are articles of use, and articles of merchandise, with this additional circumstance belonging to them, that they are made, by the general consent of nations, the standard by which the value of all other merchandise is to be estimated. In regard to weights and measures, something drawn from external nature is made a common standard, for the purposes of general convenience: and this is precisely the office performed by the precious metals, in addition to those uses to which, as metals, they are capable of being applied. There may be of these too much or too little in a country at a particular time, as there may be of any other articles. When the market is overstocked with them, as it often is, their exportation becomes as proper and as useful as that of other commodities, under similar circumstances. We need no more repine, when the dollars which have been brought here from South America are despatched to other countries, than when coffee and sugar take the same direction. We often deceive ourselves, by attributing to a scarcity of money that which is the result of other causes. In the course of this debate, the honorable member from Pennsylvania[7] has represented the country as full of every thing but money. But this I take to be a mistake. The agricultural products, so abundant in Pennsylvania, will not, he says, sell for money; but they will sell for money as quick as for any other article which happens to be in demand. They will sell for money, for example, as easily as for coffee or for tea, at the prices which properly belong to those articles. The mistake lies in imputing that to want of money which arises from want of demand. Men do not buy wheat because they have money, but because they want wheat. To decide whether money be plenty or not, that is, whether there be a large portion of capital unemployed or not, when the currency of a country is metallic, we must look, not only to the prices of commodities, but also to the rate of interest. A low rate of interest, a facility of obtaining money on loans, a disposition to invest in permanent stocks, all of which are proofs that money is plenty, may nevertheless often denote a state not of the highest prosperity. They may, and often do, show a want of employment for capital; and the accumulation of specie shows the same thing. We have no occasion for the precious metals as money, except for the purposes of circulation, or rather of sustaining a safe paper circulation. And whenever there is a prospect of a profitable investment abroad, all the gold and silver, except what these purposes require, will be exported. For the same reason, if a demand exist abroad for sugar and coffee, whatever amount of those articles might exist in the country, beyond the wants of its own consumption, would be sent abroad to meet that demand.
Besides, Sir, how should it ever occur to anybody, that we should continue to export gold and silver, if we did not continue to import them also? If a vessel take our own products to the Havana, or elsewhere, exchange them for dollars, proceed to China, exchange them for silks and teas, bring these last to the ports of the Mediterranean, sell them there for dollars, and return to the United States,–this would be a voyage resulting in the importation of the precious metals. But if she had returned from Cuba, and the dollars obtained there had been shipped direct from the United States to China, the China goods sold in Holland, and the proceeds brought home in the hemp and iron of Russia, this would be a voyage in which they were exported. Yet everybody sees that both might be equally beneficial to the individual and to the public. I believe, Sir, that, in point of fact, we have enjoyed great benefit in our trade with India and China, from the liberty of going from place to place all over the world, without being obliged in the mean time to return home, a liberty not heretofore enjoyed by the private traders of England, in regard to India and China. Suppose the American ship to be at Brazil, for example; she could proceed with her dollars direct to India, and, in return, could distribute her cargo in all the various ports of Europe or America; while an English ship, if a private trader, being at Brazil, must first return to England, and then could only proceed in the direct line from England to India. This advantage our countrymen have not been backward to improve; and in the debate to which I have already so often referred, it was stated, not without some complaint of the inconvenience of exclusion, and the natural sluggishness of monopoly, that American ships were at that moment fitting out in the Thames, to supply France, Holland, and other countries on the Continent, with tea; while the East India Company would not do this of themselves, nor allow any of their fellow-countrymen to do it for them.
There is yet another subject, Mr. Chairman, upon which I would wish to say something, if I might presume upon the continued patience of the committee. We hear sometimes in the House, and continually out of it, of the rate of exchange, as being one proof that we are on the downward road to ruin. Mr. Speaker himself has adverted to that topic, and I am afraid that his authority may give credit to opinions clearly unfounded, and which lead to very false and erroneous conclusions. Sir, let us see what the facts are. Exchange on England has recently risen one or one and a half per cent, partly owing, perhaps, to the introduction of this bill into Congress. Before this recent rise, and for the last six months, I understand its average may have been about seven and a half per cent advance. Now, supposing this to be the _real_, and not merely, as it is, the nominal, par of exchange between us and England, what would it prove? Nothing, except that funds were wanted by American citizens in England for commercial operations, to be carried on either in England or elsewhere. It would not necessarily show that we were indebted to England; for, if we had occasion to pay debts in Russia or Holland, funds in England would naturally enough be required for such a purpose. Even if it did prove that a balance was due England at the moment, it would have no tendency to explain to us whether our commerce with England had been profitable or unprofitable.
But it is not true, in point of fact, that the _real_ price of exchange is seven and a half per cent advance, nor, indeed, that there is at the present moment any advance at all. That is to say, it is not true that merchants will give such an advance, or any advance, for _money_ in England, beyond what they would give for the same amount, in the same currency, here. It will strike every one who reflects upon it, that, if there were a real difference of seven and a half per cent, money would be immediately shipped to England; because the expense of transportation would be far less than that difference. Or commodities of trade would be shipped to Europe, and the proceeds remitted to England. If it could so happen, that American merchants should be willing to pay ten per cent premium for money in England, or, in other words, that a real difference to that amount in the exchange should exist, its effects would be immediately seen in new shipments of our own commodities to Europe, because this state of things would create new motives. A cargo of tobacco, for example, might sell at Amsterdam for the same price as before; but if its proceeds, when remitted to London, were advanced, as they would be in such case, ten per cent by the state of exchange, this would be so much added to the price, and would operate therefore as a motive for the exportation; and in this way national balances are, and always will be, adjusted.
To form any accurate idea of the true state of exchange between two countries, we must look at their currencies, and compare the quantities of gold and silver which they may respectively represent. This usually explains the state of the exchanges; and this will satisfactorily account for the apparent advance now existing on bills drawn on England. The English standard of value is gold; with us that office is performed by gold, and by silver also, at a fixed relation to each other. But our estimate of silver is rather higher, in proportion to gold, than most nations give it; it is higher, especially, than in England, at the present moment. The consequence is, that silver, which remains a legal currency with us, stays here, while the gold has gone abroad; verifying the universal truth, that, if _two_ currencies be allowed to exist, of different values, that which is cheapest will fill up the whole circulation. For as much gold as will suffice to pay here a debt of a given amount, we can buy in England more silver than would be necessary to pay the same debt here; and from this difference in the value of silver arises wholly or in a great measure the present apparent difference in exchange. Spanish dollars sell now in England for four shillings and nine pence sterling per ounce, equal to one dollar and six cents. By our standard the same ounce is worth one dollar and sixteen cents, being a difference of about nine per cent. The true par of exchange, therefore, is nine per cent. If a merchant here pay one hundred Spanish dollars for a bill on England, at nominal par, in sterling money, that is for a bill of L22 10s., the proceeds of this bill, when paid in England in the legal currency, will there purchase, at the present price of silver, one hundred and nine Spanish dollars. Therefore, if the nominal advance on English bills do not exceed nine per cent, the real exchange is not against this country; in other words, it does not show that there is any pressing or particular occasion for the remittance of funds to England.
As little can be inferred from the occasional transfer of United States stock to England. Considering the interest paid on our stocks, the entire stability of our credit, and the accumulation of capital in England, it is not at all wonderful that investments should occasionally be made in our funds. As a sort of countervailing fact, it may be stated that English stocks are now actually held in this country, though probably not to any considerable amount.
I will now proceed, Sir, to state some objections of a more general nature to the course of Mr. Speaker’s observations.
He seems to me to argue the question as if all domestic industry were confined to the production of manufactured articles; as if the employment of our own capital and our own labor, in the occupations of commerce and navigation, were not as emphatically domestic industry as any other occupation. Some other gentlemen, in the course of the debate, have spoken of the price paid for every foreign manufactured article as so much given for the encouragement of foreign labor, to the prejudice of our own. But is not every such article the product of our own labor as truly as if we had manufactured it ourselves? Our labor has earned it, and paid the price for it. It is so much added to the stock of national wealth. If the commodity were dollars, nobody would doubt the truth of this remark; and it is precisely as correct in its application to any other commodity as to silver. One man makes a yard of cloth at home; another raises agricultural products and buys a yard of imported cloth. Both these are equally the earnings of domestic industry, and the only questions that arise in the case are two: the first is, which is the best mode, under all the circumstances, of obtaining the article; the second is, how far this first question is proper to be decided by government, and how far it is proper to be left to individual discretion. There is no foundation for the distinction which attributes to certain employments the peculiar appellation of American industry; and it is, in my judgment, extremely unwise to attempt such discriminations.
We are asked, What nations have ever attained eminent prosperity without encouraging manufactures? I may ask, What nation ever reached the like prosperity without promoting foreign trade? I regard these interests as closely connected, and am of opinion that it should be our aim to cause them to flourish together. I know it would be very easy to promote manufactures, at least for a time, but probably for a short time only, if we might act in disregard of other interests. We could cause a sudden transfer of capital, and a violent change in the pursuits of men. We could exceedingly benefit some classes by these means. But what, then, becomes of the interests of others? The power of collecting revenue by duties on imports, and the habit of the government of collecting almost its whole revenue in that mode, will enable us, without exceeding the bounds of moderation, to give great advantages to those classes of manufactures which we may think most useful to promote at home. What I object to is the immoderate use of the power,–exclusions and prohibitions; all of which, as I think, not only interrupt the pursuits of individuals, with great injury to themselves and little or no benefit to the country, but also often divert our own labor, or, as it may very properly be called, our own domestic industry, from those occupations in which it is well employed and well paid, to others in which it will be worse employed and worse paid. For my part, I see very little relief to those who are likely to be deprived of their employments, or who find the prices of the commodities which they need raised, in any of the alternatives which Mr. Speaker has presented. It is nothing to say that they may, if they choose, continue to buy the foreign article; the answer is, the price is augmented: nor that they may use the domestic article; the price of that also is increased. Nor can they supply themselves by the substitution of their own fabric. How can the agriculturist make his own iron? How can the ship-owner grow his own hemp?
But I have a yet stronger objection to the course of Mr. Speaker’s reasoning; which is, that he leaves out of the case all that has been already done for the protection of manufactures, and argues the question as if those interests were now for the first time to receive aid from duties on imports. I can hardly express the surprise I feel that Mr. Speaker should fall into the common mode of expression used elsewhere, and ask if we will give our manufacturers no protection. Sir, look to the history of our laws; look to the present state of our laws. Consider that our whole revenue, with a trifling exception, is collected at the custom-house, and always has been; and then say what propriety there is in calling on the government for protection, as if no protection had heretofore been afforded. The real question before us, in regard to all the important clauses of the bill, is not whether we will _lay_ duties, but whether we will _augment_ duties. The demand is for something more than exists, and yet it is pressed as if nothing existed. It is wholly forgotten that iron and hemp, for example, already pay a very heavy and burdensome duty; and, in short, from the general tenor of Mr. Speaker’s observations, one would infer that, hitherto, we had rather taxed our own manufactures than fostered them by taxes on those of other countries. We hear of the fatal policy of the tariff of 1816; and yet the law of 1816 was passed avowedly for the benefit of manufacturers, and, with very few exceptions, imposed on imported articles very great additions of tax; in some important instances, indeed, amounting to a prohibition.
Sir, on this subject, it becomes us at least to understand the real posture of the question. Let us not suppose that we are _beginning_ the protection of manufactures, by duties on imports. What we are asked to do is, to render those duties much higher, and therefore, instead of dealing in general commendations of the benefits of protection, the friends of the bill, I think, are bound to make out a fair case for each of the manufactures which they propose to benefit. The government has already done much for their protection, and it ought to be presumed to have done enough, unless it be shown, by the facts and considerations applicable to each, that there is a necessity for doing more.
On the general question, Sir, allow me to ask if the doctrine of prohibition, as a general doctrine, be not preposterous. Suppose all nations to act upon it; they would be prosperous, then, according to the argument, precisely in the proportion in which they abolished intercourse with one another. The less of mutual commerce the better, upon this hypothesis. Protection and encouragement may be, and doubtless are, sometimes, wise and beneficial, if kept within proper limits; but when carried to an extravagant height, or the point of prohibition, the absurd character of the system manifests itself. Mr. Speaker has referred to the late Emperor Napoleon, as having attempted to naturalize the manufacture of cotton in France. He did not cite a more extravagant part of the projects of that ruler, that is, his attempt to naturalize the growth of that plant itself, in France; whereas, we have understood that considerable districts in the South of France, and in Italy, of rich and productive lands, were at one time withdrawn from profitable uses, and devoted to raising, at great expense, a little bad cotton. Nor have we been referred to the attempts, under the same system, to make sugar and coffee from common culinary vegetables; attempts which served to fill the print-shops of Europe, and to show us how easy is the transition from what some think sublime to that which all admit to be ridiculous. The folly of some of these projects has not been surpassed, nor hardly equalled, unless it be by the philosopher in one of the satires of Swift, who so long labored to extract sunbeams from cucumbers.
The poverty and unhappiness of Spain have been attributed to the want of protection to her own industry. If by this it be meant that the poverty of Spain is owing to bad government and bad laws, the remark is, in a great measure, just. But these very laws are bad because they are restrictive, partial, and prohibitory. If prohibition were protection, Spain would seem to have had enough of it. Nothing can exceed the barbarous rigidity of her colonial system, or the folly of her early commercial regulations. Unenlightened and bigoted legislation, the multitude of holidays, miserable roads, monopolies on the part of government, restrictive laws, that ought long since to have been abrogated, are generally, and I believe truly, reckoned the principal causes of the bad state of the productive industry of Spain. Any partial improvement in her condition, or increase of her prosperity, has been, in all cases, the result of relaxation, and the abolition of what was intended for favor and protection.
In short, Sir, the general sense of this age sets, with a strong current, in favor of freedom of commercial intercourse, and unrestrained individual action. Men yield up their notions of monopoly and restriction, as they yield up other prejudices, slowly and reluctantly; but they cannot withstand the general tide of opinion.
Let me now ask, Sir, what relief this bill proposes to some of those great and essential interests of the country, the condition of which has been referred to as proof of national distress; and which condition, although I do not think it makes out a case of _distress_, yet does indicate depression.
And first, Sir, as to our foreign trade. Mr. Speaker has stated that there has been a considerable falling off in the tonnage employed in that trade. This is true, lamentably true. In my opinion, it is one of those occurrences which ought to arrest our immediate, our deep, our most earnest attention. What does this bill propose for its relief? It proposes nothing but new burdens. It proposes to diminish its employment, and it proposes, at the same time, to augment its expense, by subjecting it to heavier taxation. Sir, there is no interest, in regard to which a stronger case for protection can be made out, than the navigating interest. Whether we look at its present condition, which is admitted to be depressed, the number of persons connected with it, and dependent upon it for their daily bread, or its importance to the country in a political point of view, it has claims upon our attention which cannot be surpassed. But what do we propose to do for it? I repeat, Sir, simply to burden and to tax it. By a statement which I have already submitted to the committee, it appears that the shipping interest pays, annually, more than half a million of dollars in duties on articles used in the construction of ships. We propose to add nearly, or quite, fifty per cent to this amount, at the very moment that we appeal to the languishing state of this interest as a proof of national distress. Let it be remembered that our shipping employed in foreign commerce has, at this moment, not the shadow of government protection. It goes abroad upon the wide sea to make its own way, and earn its own bread, in a professed competition with the whole world. Its resources are its own frugality, its own skill, its own enterprise. It hopes to succeed, if it shall succeed at all, not by extraordinary aid of government, but by patience, vigilance, and toil. This right arm of the nation’s safety strengthens its own muscle by its own efforts, and by unwearied exertion in its own defence becomes strong for the defence of the country.
No one acquainted with this interest can deny that its situation, at this moment, is extremely critical. We have left it hitherto to maintain itself or perish; to swim if it can, and to sink if it must. But at this moment of its apparent struggle, can we as men, can we as patriots, add another stone to the weight that threatens to carry it down? Sir, there is a limit to human power, and to human effort. I know the commercial marine of this country can do almost every thing, and bear almost every thing. Yet some things are impossible to be done, and some burdens may be impossible to be borne; and as it was the last ounce that broke the back of the camel, so the last tax, although it were even a small one, may be decisive as to the power of our marine to sustain the conflict in which it is now engaged with all the commercial nations on the globe.
Again, Mr. Chairman, the failures and the bankruptcies which have taken place in our large cities have been mentioned as proving the little success attending _commerce_, and its general decline. But this bill has no balm for those wounds. It is very remarkable, that when the losses and disasters of certain manufacturers, those of iron, for instance, are mentioned, it is done for the purpose of invoking aid for the distressed. Not so with the losses and disasters of commerce; these last are narrated, and not unfrequently much exaggerated, to prove the ruinous nature of the employment, and to show that it ought to be abandoned, and the capital engaged in it turned to other objects.
It has been often said, Sir, that our manufacturers have to contend, not only against the natural advantages of those who produce similar articles in foreign countries, but also against the action of foreign governments, who have great political interest in aiding their own manufactures to suppress ours. But have not these governments as great an interest to cripple our marine, by preventing the growth of our commerce and navigation? What is it that makes us the object of the highest respect, or the most suspicious jealousy, to foreign states? What is it that most enables us to take high relative rank among the nations? I need not say that this results, more than from any thing else, from that quantity of military power which we can cause to be water-borne, and from that extent of commerce which we are able to maintain throughout the world.
Mr. Chairman, I am conscious of having detained the committee much too long with these observations. My apology for now proceeding to some remarks upon the particular clauses of the bill is, that, representing a district at once commercial and highly manufacturing, and being called upon to vote upon a bill containing provisions so numerous and so various, I am naturally desirous to state as well what I approve, as what I would reject.
The first section proposes an augmented duty upon woollen manufactures. This, if it were unqualified, would no doubt be desirable to those who are engaged in that business. I have myself presented a petition from the woollen manufacturers of Massachusetts, praying an augmented _ad valorem_ duty upon imported woollen cloths; and I am prepared to accede to that proposition, to a reasonable extent. But then this bill proposes, also, a very high duty upon imported wool; and, as far as I can learn, a majority of the manufacturers are at least extremely doubtful whether, taking these two provisions together, the state of the law is not better for them now than it would be if this bill should pass. It is said, this tax on raw wool will benefit the agriculturist; but I know it to be the opinion of some of the best informed of that class, that it will do them more hurt than good. They fear it will check the manufacturer, and consequently check his demand for their article. The argument is, that a certain quantity of coarse wool, cheaper than we can possibly furnish, is necessary to enable the manufacturer to carry on the general business, and that if this cannot be had, the consequence will be, not a greater, but a less, manufacture of our own wool. I am aware that very intelligent persons differ upon this point; but if we may safely infer from that difference of opinion, that the proposed benefit is at least doubtful, it would be prudent perhaps to abstain from the experiment. Certain it is, that the same reasoning has been employed, as I have before stated, on the same subject, when a renewed application was made to the English Parliament to repeal the duty on imported wool, I believe scarcely two months ago; those who supported the application pressing urgently the necessity of an unrestricted use of the cheap, imported raw material, with a view to supply with coarse cloths the markets of warm climates, such as those of Egypt and Turkey, and especially a vast newly created demand in the South American states.
As to the manufactures of cotton, it is agreed, I believe, that they are generally successful. It is understood that the present existing duty operates pretty much as a prohibition over those descriptions of fabrics to which it applies. The proposed alteration would probably enable the American manufacturer to commence competition with higher-priced fabrics; and so, perhaps, would an augmentation less than is here proposed. I consider the cotton manufactures not only to have reached, but to have passed, the point of competition. I regard their success as certain, and their growth as rapid as the most impatient could well expect. If, however, a provision of the nature of that recommended here were thought necessary, to commence new operations in the same line of manufacture, I should cheerfully agree to it, if it were not at the cost of sacrificing other great interests of the country. I need hardly say, that whatever promotes the cotton and woollen manufactures promotes most important interests of my constituents. They have a great stake in the success of those establishments, and, as far as those manufactures are concerned, would be as much benefited by the provisions of this bill as any part of the community. It is obvious, too, I should think, that, for some considerable time, manufactures of this sort, to whatever magnitude they may rise, will be principally established in those parts of the country where population is most dense, capital most abundant, and where the most successful beginnings have already been made.
But if these be thought to be advantages, they are greatly counterbalanced by other advantages enjoyed by other portions of the country. I cannot but regard the situation of the West as highly favorable to human happiness. It offers, in the abundance of its new and fertile lands, such assurances of permanent property and respectability to the industrious, it enables them to lay such sure foundations for a competent provision for their families, it makes such a nation of freeholders, that it need not envy the happiest and most prosperous of the manufacturing communities. We may talk as we will of well-fed and well-clothed day-laborers or journeymen; they are not, after all, to be compared, either for happiness or respectability, with him who sleeps under his own roof and cultivates his own fee-simple inheritance.
With respect to the proposed duty on glass, I would observe, that, upon the best means of judging which I possess, I am of opinion that the chairman of the committee is right in stating that there is in effect a bounty upon the exportation of the British article. I think it entirely proper, therefore, to raise our own duty by such an amount as shall be equivalent to that bounty.
And here, Mr. Chairman, before proceeding to those parts of the bill to which I most strenuously object, I will be so presumptuous as to take up a challenge which Mr. Speaker has thrown down. He has asked us, in a tone of interrogatory indicative of the feeling of anticipated triumph, to mention any country in which manufactures have flourished without the aid of prohibitory laws. He has demanded if it be not policy, protection, ay, and prohibition, that have carried other states to the height of their prosperity, and whether any one has succeeded with such tame and inert legislation as ours. Sir, I am ready to answer this inquiry.
There is a country, not undistinguished among the nations, in which the progress of manufactures has been far more rapid than in any other, and yet unaided by prohibitions or unnatural restrictions. That country, the happiest which the sun shines on, is our own.
The woollen manufactures of England have existed from the early ages of the monarchy. Provisions designed to aid and foster them are in the black-letter statutes of the Edwards and the Henrys. Ours, on the contrary, are but of yesterday; and yet, with no more than the protection of existing laws, they are already at the point of close and promising competition. Sir, nothing is more unphilosophical than to refer us, on these subjects, to the policy adopted by other nations in a very different state of society, or to infer that what was judged expedient by them, in their early history, must also be expedient for us, in this early part of our own. This would be reckoning our age chronologically, and estimating our advance by our number of years; when, in truth, we should regard only the state of society, the knowledge, the skill, the capital, and the enterprise which belong to our times. We have been transferred from the stock of Europe, in a comparatively enlightened age, and our civilization and improvement date as far back as her own. Her original history is also our original history; and if, since the moment of separation, she has gone ahead of us in some respects, it may be said, without violating truth, that we have kept up in others, and, in others again, are ahead ourselves. We are to legislate, then, with regard to the present actual state of society; and our own experience shows us, that, commencing manufactures at the present highly enlightened and emulous moment, we need not resort to the clumsy helps with which, in less auspicious times, governments have sought to enable the ingenuity and industry of their people to hobble along.
The English cotton manufactures began about the commencement of the last reign. Ours can hardly be said to have commenced with any earnestness, until the application of the power-loom, in 1814, not more than ten years ago. Now, Sir, I hardly need again speak of its progress, its present extent, or its assurance of future enlargement. In some sorts of fabrics we are already exporters, and the products of our factories are, at this moment, in the South American markets. We see, then, what _can_ be done without prohibition or extraordinary protection, because we see what _has_ been done; and I venture to predict, that, in a few years, it will be thought wonderful that these branches of manufactures, at least, should have been thought to require additional aid from government.
Mr. Chairman, the best apology for laws of prohibition and laws of monopoly will be found in that state of society, not only unenlightened but sluggish, in which they are most generally established. Private industry, in those days, required strong provocatives, which governments were seeking to administer by these means. Something was wanted to actuate and stimulate men, and the prospects of such profits as would, in our times, excite unbounded competition, would hardly move the sloth of former ages. In some instances, no doubt, these laws produced an effect, which, in that period, would not have taken place without them. But our age is of a wholly different character, and its legislation takes another turn. Society is full of excitement; competition comes in place of monopoly; and intelligence and industry ask only for fair play and an open field. Profits, indeed, in such a state of things, will be small, but they will be extensively diffused; prices will be low, and the great body of the people prosperous and happy. It is worthy of remark, that, from the operation of these causes, commercial wealth, while it is increased beyond calculation in its general aggregate, is, at the same time, broken and diminished in its subdivisions. Commercial prosperity should be judged of, therefore, rather from the extent of trade, than from the magnitude of its apparent profits. It has been remarked, that Spain, certainly one of the poorest nations, made very great profits on the amount of her trade; but with little other benefit than the enriching of a few individuals and companies. Profits to the English merchants engaged in the Levant and Turkey trade were formerly very great, and there were richer merchants in England some centuries ago, considering the comparative value of money, than at the present highly commercial period. When the diminution of profits arises from the extent of competition, it indicates rather a salutary than an injurious change.[8]
The true course then, Sir, for us to pursue, is, in my opinion, to consider what our situation is; what our means are; and how they can be best applied. What amount of population have we in comparison with our extent of soil, what amount of capital, and labor at what price? As to skill, knowledge, and enterprise, we may safely take it for granted that in these particulars we are on an equality with others. Keeping these considerations in view, allow me to examine two or three of those provisions of the bill to which I feel the strongest objections.
To begin with the article of iron. Our whole annual consumption of this article is supposed by the chairman of the committee to be forty-eight or fifty thousand tons. Let us suppose the latter. The amount of our own manufacture he estimates, I think, at seventeen thousand tons. The present duty on the imported article is $15 per ton, and as this duty causes, of course, an equivalent augmentation of the price of the home manufacture, the whole increase of price is equal to $750,000 annually. This sum we pay on a raw material, and on an absolute necessary of life. The bill proposes to raise the duty from $15 to $22.50 per ton, which would be equal to $1,125,000 on the whole annual consumption. So that, suppose the point of prohibition which is aimed at by some gentlemen to be attained, the consumers of the article would pay this last-mentioned sum every year to the producers of it, over and above the price at which they could supply themselves with the same article from other sources. There would be no mitigation of this burden, except from the prospect, whatever that might be, that iron would fall in value, by domestic competition, after the importation should be prohibited. It will be easy, I think, to show that it cannot fall; and supposing for the present that it shall not, the result will be, that we shall pay annually the sum of $1,125,000, constantly augmented, too, by increased consumption of the article, _to support a business that cannot support itself_.
It is of no consequence to the argument, that this sum is expended at home; so it would be if we taxed the people to support any other useless and expensive establishment, to build another Capitol, for example, or incur an unnecessary expense of any sort. The question still is, Are the money, time, and labor well laid out in these cases? The present price of iron at Stockholm, I am assured by importers, is $53 per ton on board, $48 in the yard before loading, and probably not far from $40 at the mines. Freight, insurance, &c. may be fairly estimated at $15, to which add our present duty of $15 more, and these two last sums, together with the cost on board at Stockholm, give $83 as the cost of Swedes iron in our market. In fact, it is said to have been sold last year at $81.50 to $82 per ton. We perceive, by this statement, that the cost of the iron is doubled in reaching us from the mine in which it is produced. In other words, our present duty, with the expense of transportation, gives an advantage to the American over the foreign manufacturer of one hundred per cent. Why, then, cannot the iron be manufactured at home? Our ore is said to be as good, and some of it better. It is under our feet, and the chairman of the committee tells us that it might be wrought by persons who otherwise will not be employed. Why, then, is it not wrought? Nothing could be more sure of constant sale. It is not an article of changeable fashion, but of absolute, permanent necessity, and such, therefore, as would always meet a steady demand. Sir, I think it would be well for the chairman of the committee to revise his premises, for I am persuaded that there is an ingredient properly belonging to the calculation which he has misstated or omitted. Swedes iron in England pays a duty, I think, of about $27 per ton; yet it is imported in considerable quantities, notwithstanding the vast capital, the excellent coal, and, more important than all perhaps, the highly improved state of inland navigation in England; although I am aware that the English use of Swedes iron may be thought to be owing in some degree to its superior quality.
Sir, the true explanation of this appears to me to lie in the different prices _of labor_; and here I apprehend is the grand mistake in the argument of the chairman of the committee. He says it would cost the nation, as a nation, nothing, to make our ore into iron. Now, I think it would cost us precisely that which we can worst afford; that is, great _labor_. Although bar-iron is very properly considered a raw material in respect to its various future uses, yet, as bar-iron, the principal ingredient in its cost is labor. Of manual labor, no nation has more than a certain quantity, nor can it be increased at will. As to some operations, indeed, its place may be supplied by machinery; but there are other services which machinery cannot perform for it, and which it must perform for itself. A most important question for every nation, as well as for every individual, to propose to itself, is, how it can best apply that quantity of labor which it is able to perform. Labor is the great producer of wealth; it moves all other causes. If it call machinery to its aid, it is still employed, not only in using the machinery, but in making it. Now, with respect to the quantity of labor, as we all know, different nations are differently circumstanced. Some need, more than any thing, work for hands, others require hands for work; and if we ourselves are not absolutely in the latter class, we are still most fortunately very near it. I cannot find that we have those idle hands, of which the chairman of the committee speaks. The price of labor is a conclusive and unanswerable refutation of that idea; it is known to be higher with us than in any other civilized state, and this is the greatest of all proofs of general happiness. Labor in this country is independent and proud. It has not to ask the patronage of capital, but capital solicits the aid of labor. This is the general truth in regard to the condition of our whole population, although in the large cities there are doubtless many exceptions. The mere capacity to labor in common agricultural employments, gives to our young men the assurance of independence. We have been asked, Sir, by the chairman of the committee, in a tone of some pathos, whether we will allow to the serfs of Russia and Sweden the benefit of making iron for us. Let me inform the gentleman, Sir, that those same serfs do not earn more than seven cents a day, and that they work in these mines for that compensation because they are serfs. And let me ask the gentleman further, whether we have any labor in this country that cannot be better employed than in a business which does not yield the laborer more than seven cents a day? This, it appears to me, is the true question for our consideration. There is no reason for saying that we will work iron because we have mountains that contain the ore. We might for the same reason dig among our rocks for the scattered grains of gold and silver which might be found there. The true inquiry is, Can we produce the article in a useful state at the same cost, or nearly at the same cost, or at any reasonable approximation towards the same cost, at which we can import it?
Some general estimates of the price and profits of labor, in those countries from which we import our iron, might be formed by comparing the reputed products of different mines, and their prices, with the number of hands employed. The mines of Danemora are said to yield about 4,000 tons, and to employ in the mines twelve hundred workmen. Suppose this to be worth $50 per ton; any one will find by computation, that the whole product would not pay, in this country, for one quarter part of the necessary labor. The whole export of Sweden was estimated, a few years ago, at 400,000 ship pounds, or about 54,000 tons. Comparing this product with the number of workmen usually supposed to be employed in the mines which produce iron for exportation, the result will not greatly differ from the foregoing. These estimates are general, and might not conduct us to a precise result; but we know, from intelligent travellers, and eye-witnesses, that the price of labor in the Swedish mines does not exceed seven cents a day.[9]
The true reason, Sir, why it is not our policy to compel our citizens to manufacture our own iron, is that they are far better employed. It is an unproductive business, and they are not poor enough to be obliged to follow it. If we had more of poverty, more of misery, and something of servitude, if we had an ignorant, idle, starving population, we might set up for iron makers against the world.
The committee will take notice, Mr. Chairman, that, under our present duty, together with the expense of transportation, our manufacturers are able to supply their own immediate neighborhood; and this proves the magnitude of that substantial encouragement which these two causes concur to give. There is little or no foreign iron, I presume, used in the county of Lancaster. This is owing to the heavy expense of land carriage; and as we recede farther from the coast, the manufacturers are still more completely secured, as to their own immediate market, against the competition of the imported article. But what they ask is to be allowed to supply the sea-coast, at such a price as shall be formed by adding to the cost at the mines the expense of land carriage to the sea; and this appears to me most unreasonable. The effect of it would be to compel the consumer to pay the cost of two land transportations; for, in the first place, the price of iron at the inland furnaces will always be found to be at, or not much below, the price of the imported article in the seaport, and the cost of transportation to the neighborhood of the furnace; and to enable the home product to hold a competition with the imported in the seaport, the cost of another transportation downward, from the furnace to the coast, must be added. Until our means of inland commerce be improved, and the charges of transportation by that means lessened, it appears to me wholly impracticable, with such duties as any one would think of proposing, to meet the wishes of the manufacturers of this article. Suppose we were to add the duty proposed by this bill, although it would benefit the capital invested in works near the sea and the navigable rivers, yet the benefit would not extend far in the interior. Where, then, are we to stop, or what limit is proposed to us?
The freight of iron has been afforded from Sweden to the United States as low as eight dollars per ton. This is not more than the price of fifty miles of land carriage. Stockholm, therefore, for the purpose of this argument, may be considered as within fifty miles of Philadelphia. Now, it is at once a just and a strong view of this case, to consider, that there are, within fifty miles of our market, vast multitudes of persons who are willing to labor in the production of this article for us, at the rate of seven cents per day, while we have no labor which will not command, upon the average, at least five or six times that amount. The question is, then, shall we buy this article of these manufacturers, and suffer our own labor to earn its greater reward, or shall we employ our own labor in a similar manufacture, and make up to it, by a tax on consumers, the loss which it must necessarily sustain.
I proceed, Sir, to the article of hemp. Of this we imported last year, in round numbers, 6,000 tons, paying a duty of $30 a ton, or $180,000 on the whole amount; and this article, it is to be remembered, is consumed almost entirely in the uses of navigation. The whole burden may be said to fall on one interest. It is said we can produce this article if we will raise the duties. But why is it not produced now? or why, at least, have we not seen some specimens? for the present is a very high duty, when expenses of importation are added. Hemp was purchased at St. Petersburg, last year, at $101.67 per ton. Charges attending shipment, &c., $14.25. Freight may be stated at $30 per ton, and our existing duty $30 more. These three last sums, being the charges of transportation, amount to a protection of near seventy-five per cent in favor of the home manufacturer, if there be any such. And we ought to consider, also, that the price of hemp at St. Petersburg is increased by all the expense of transportation from the place of growth to that port; so that probably the whole cost of transportation, from the place of growth to our market, including our duty, is equal to the first cost of the article; or, in other words, is a protection in favor of our own product of one hundred per cent.
And since it is stated that we have great quantities of fine land for the production of hemp, of which I have no doubt, the question recurs, Why is it not produced? I speak of the water-rotted hemp, for it is admitted that that which is dew-rotted is not sufficiently good for the requisite purposes. I cannot say whether the cause be in climate, in the process of rotting, or what else, but the fact is certain, that there is no American water-rotted hemp in the market. We are acting, therefore, upon an hypothesis. Is it not reasonable that those who say that they _can_ produce the article shall at least prove the truth of that allegation, before new taxes are laid on those who use the foreign commodity? Suppose this bill passes; the price of hemp is immediately raised $14.80 per ton, and this burden falls immediately on the ship-builder; and no part of it, for the present, will go for the benefit of the American grower, because he has none of the article than can be used, nor is it expected that much of it will be produced for a considerable time. Still the tax takes effect upon the imported article; and the ship-owners, to enable the Kentucky farmer to receive an additional $14 on his ton of hemp, whenever he may be able to raise and manufacture it, pay, in the mean time, an equal sum per ton into the treasury on all the imported hemp which they are still obliged to use; and this is called “protection”! Is this just or fair? A particular interest is here burdened, not only for the benefit of another particular interest, but burdened also beyond that, for the benefit of the treasury. It is said to be important for the country that this article should be raised in it; then let the country bear the expense, and pay the bounty. If it be for the good of the whole, let the sacrifice be made by the whole, and not by a part. If it be thought useful and necessary, from political considerations, to encourage the growth and manufacture of hemp, government has abundant means of doing it. It might give a direct bounty, and such a measure would, at least, distribute the burden equally; or, as government itself is a great consumer of this article, it might stipulate to confine its own purchases to the home product, so soon as it should be shown to be of the proper quality. I see no objection to this proceeding, if it be thought to be an object to encourage the production. It might easily, and perhaps properly, be provided by law, that the navy should be supplied with American hemp, the quality being good, at any price not exceeding, by more than a given amount, the current price of foreign hemp in our market. Every thing conspires to render some such course preferable to the one now proposed. The encouragement in that way would be ample, and, if the experiment should succeed, the whole object would be gained; and, if it should fail, no considerable loss or evil would be felt by any one.
I stated, some days ago, and I wish to renew the statement, what was the amount of the proposed augmentation of the duties on iron and hemp, in the cost of a vessel. Take the case of a common ship of three hundred tons, not coppered, nor copper-fastened. It would stand thus, by the present duties:–
14-1/2 tons of iron, for hull, rigging, and and anchors, at $15 per ton, $217.50 10 tons of hemp, at $30, 300.00 40 bolts Russia duck, at $2, 80.00 20 bolts Ravens duck, at $1.25, 25.00 On articles of ship-chandlery, cabin
furniture, hard-ware, &c., 40.00 _______
$662.50
——-
The bill proposes to add,–
$7.40 per ton on iron, which will be $107.30 $14.80 per ton on hemp, equal to 148.00 And on duck, by the late amendment
of the bill, say 25 per cent, 25.00 _______
$280.30
_______
But to the duties on iron and hemp should be added those paid on copper, whenever that article is used. By the statement which I furnished the other day, it appeared that the duties received by government on articles used in the construction of a vessel of three hundred and fifty-nine tons, with copper fastenings, amounted to $1,056. With the augmentations of this bill, they would be equal to $1,400.
Now I cannot but flatter myself, Mr. Chairman, that, before the committee will consent to this new burden upon the shipping interest, it will very deliberately weigh the probable consequences. I would again urgently solicit its attention to the condition of that interest. We are told that government has protected it, by discriminating duties, and by an exclusive right to the coasting trade. But it would retain the coasting trade by its own natural efforts, in like manner, and with more certainty, than it now retains any portion of foreign trade. The discriminating duties are now abolished, and while they existed, they were nothing more than countervailing measures; not so much designed to give our navigation an advantage over that of other nations, as to put it upon an equality; and we have, accordingly, abolished ours, when they have been willing to abolish theirs. Look to the rate of freights. Were they ever lower, or even so low? I ask gentlemen who know, whether the harbor of Charleston, and the river of Savannah, be not crowded with ships seeking employment, and finding none? I would ask the gentlemen from New Orleans, if their magnificent Mississippi does not exhibit, for furlongs, a forest of masts? The condition, Sir, of the shipping interest is not that of those who are insisting on high profits, or struggling for monopoly; but it is the condition of men content with the smallest earnings, and anxious for their bread. The freight of cotton has formerly been three pence sterling, from Charleston to Liverpool, in time of peace. It is now I know not what, or how many fractions of a penny; I think, however, it is stated at five eighths. The producers, then, of this great staple, are able, by means of this navigation, to send it, for a cent a pound, from their own doors to the best market in the world.
Mr. Chairman, I will now only remind the committee that, while we are proposing to add new burdens to the shipping interest, a very different line of policy is followed by our great commercial and maritime rival. It seems to be announced as the sentiment of the government of England, and undoubtedly it is its real sentiment, that the first of all manufactures is the manufacture of ships. A constant and wakeful attention is paid to this interest, and very important regulations, favorable to it, have been adopted within the last year, some of which I will beg leave to refer to, with the hope of exciting the notice, not only of the committee, but of all others who may feel, as I do, a deep interest in this subject. In the first place, a general amendment has taken place in the register acts, introducing many new provisions, and, among others, the following:–
A direct mortgage of the interest of a ship is allowed, without subjecting the mortgagee to the responsibility of an owner.
The proportion of interest held by each owner is exhibited in the register, thereby facilitating both sales and mortgages, and giving a new value to shipping among the moneyed classes.
Shares, in the ships of copartnerships, may be registered as joint property, and subject to the same rules as other partnership effects.
Ships may be registered in the name of trustees, for the benefit of joint-stock companies.
And many other regulations are adopted, with the same general view of rendering the mode of holding the property as convenient and as favorable as possible.
By another act, British registered vessels, of every description, are allowed to enter into the general and the coasting trade in the India seas, and may now trade to and from India, with any part of the world except China.
By a third, all limitations and restrictions, as to latitude and longitude, are removed from ships engaged in the Southern whale-fishery. These regulations, I presume, have not been made without first obtaining the consent of the East India Company; so true is it found, that real encouragement of enterprise oftener consists, in our days, in restraining or buying off monopolies and prohibitions, than in imposing or extending them.
The trade with Ireland is turned into a free coasting trade; light duties have been reduced, and various other beneficial arrangements made, and still others proposed. I might add, that, in favor of general commerce, and as showing their confidence in the principles of liberal intercourse, the British government has perfected the warehouse system, and authorized a reciprocity of duties with foreign states, at the discretion of the Privy Council.
This, Sir, is the attention which our great rival is paying to these important subjects, and we may assure ourselves that, if we do not cherish a proper sense of our own interests, she will not only beat us, but will deserve to beat us.
Sir, I will detain you no longer. There are some parts of this bill which I highly approve; there are others in which I should acquiesce; but those to which I have now stated my objections appear to me so destitute of all justice, so burdensome and so dangerous to that interest which has steadily enriched, gallantly defended, and proudly distinguished us, that nothing can prevail upon me to give it my support.[10]
* * * * *
NOTE.
This is commonly called Mr. Webster’s “Free Trade” speech. It has been found difficult to select one among his many speeches in support of the policy of Protection which would fully represent his views on the subject; but the reasons for his change of opinion, and for his advocacy of Protection, are fully stated in many of the speeches printed in this volume, delivered after the year 1830. Perhaps as good a statement as can be selected from his many speeches on the Tariff, in explanation of his change of position as to the need, policy, and duty of protection to American manufactures, may be found in his speech delivered in the Senate of the United States, on the 25th and 26th of July, 1846, on the Bill “To reduce the Duties on Imports, and for other Purposes.” In this speech, he made the following frank avowal of the reasons which induced him to reconsider and reverse his original opinions on the subject:–
“But, Sir, before I proceed further with this part of the case, I will take notice of what appears, latterly, to be an attempt, by the republication of opinions and expressions, arguments and speeches of mine, at an earlier and later period of life, to found against me a charge of inconsistency, on this subject of the protective policy of the country. Mr. President, if it be an inconsistency to hold an opinion upon a subject at one time and in one state of circumstances, and to hold a different opinion upon the same subject at another time and in a different state of circumstances, I admit the charge. Nay, Sir, I will go further; and in regard to questions which, from their nature, do not depend upon circumstances for their true and just solution, I mean constitutional questions, if it be an inconsistency to hold an opinion to-day, even upon such a question, and on that same question to hold a different opinion a quarter of a century afterwards, upon a more comprehensive view of the whole subject, with a more thorough investigation into the original purposes and objects of that Constitution, and especially after a more thorough exposition of those objects and purposes by those who framed it, and have been trusted to administer it, I should not shrink even from that imputation. I hope I know more of the Constitution of my country than I did when I was twenty years old. I hope I have contemplated its great objects more broadly. I hope I have read with deeper interest the sentiments of the great men who framed it. I hope I have studied with more care the condition of the country when the convention assembled to form it. And yet I do not know that I have much to retract or to change on these points.
“But, Sir, I am of the opinion of a very eminent person, who had occasion, not long since, to speak of this topic in another place. Inconsistencies of opinion, arising from changes of circumstances, are often justifiable. But there is one sort of inconsistency which is culpable. It is the inconsistency between a man’s conviction and his vote; between his conscience and his conduct. No man shall ever charge me with an inconsistency like that. And now, Sir, allow me to say, that I am quite indifferent, or rather thankful, to those conductors of the public press who think they cannot do better than now and then to spread my poor opinions before the public.
“I have said many times, and it is true, that, up to the year 1824, the people of that part of the country to which I belong, being addicted to commerce, having been successful in commerce, their capital being very much engaged in commerce, were averse to entering upon a system of manufacturing operations. Every member in Congress from the State of Massachusetts, with the exception, I think, of one, voted against the act of 1824. But what were we to do? Were we not bound, after 1817 and 1824, to consider that the policy of the country was settled, had become settled, as a policy, to protect the domestic industry of the country by solemn laws? The leading speech[11] which ushered in the act of 1824 was called a speech for the ‘American System.’ The bill was carried principally by the Middle States. Pennsylvania and New York would have it so; and what were we to do? Were we to stand aloof from the occupations which others were pursuing around us? Were we to pick clean teeth on a constitutional doubt which a majority in the councils of the nation had overruled? No, Sir; we had no option. All that was left us was to fall in with the settled policy of the country; because, if any thing can ever settle the policy of the country, or if any thing can ever settle the practical construction of the Constitution of the country, it must be these repeated decisions of Congress, and enactments of successive laws conformable to these decisions. New England, then, did fall in. She went into manufacturing operations, not from original choice, but from the necessity of the circumstances in which the legislation of the country had placed her. And, for one, I resolved then, and have acted upon the resolution ever since, that, having compelled the Eastern States to go into these pursuits for a livelihood, the country was bound to fulfil the just expectations which it had inspired.”
[Footnote 1: Mr. Clay.]
[Footnote 2: Lord Lansdowne.]
[Footnote 3: Lord Liverpool.]
[Footnote 4: Mr. Huskisson, President of the English Board of Trade.]
[Footnote 5: The Marquess of Lansdowne.]
[Footnote 6: Lord Liverpool.]
[Footnote 7: Mr. Tod.]
[Footnote 8: “The present equable diffusion of moderate wealth cannot be better illustrated, than by remarking that in this age many palaces and superb mansions have been pulled down, or converted to other purposes, while none have been erected on a like scale. The numberless baronial castles and mansions, in all parts of England, now in ruins, may all be adduced as examples of the decrease of inordinate wealth. On the other hand, the multiplication of commodious dwellings for the upper and middle classes of society, and the increased comforts of all ranks, exhibit a picture of individual happiness, unknown in any other age.”–_Sir G. Blane’s Letter to Lord Spencer, in_ 1800.]
[Footnote 9: The price of labor in Russia may be pretty well collected from Tooke’s “View of the Russian Empire.” “The workmen in the mines and the founderies are, indeed, all called master-people; but they distinguish themselves into masters, under-masters, apprentices, delvers, servants, carriers, washers, and separators. In proportion to their ability their wages are regulated, which proceed from fifteen to upwards of thirty roubles per annum. The provisions which they receive from the magazines are deducted from this pay.” The value of the rouble at that time (1799) was about twenty-four pence sterling, or forty-five cents of our money.
“By the edict of 1799,” it is added, “a laborer with a horse shall receive, daily, in summer, twenty, and in winter, twelve copecks; a laborer without a horse, in summer, ten, in winter, eight copecks.”
A copeck is the hundredth part of a rouble, or about half a cent of our money. The price of labor may have risen, in some degree, since that period, but probably not much.]
[Footnote 10: Since the delivery of this speech, an arrival has brought London papers containing the speech of the English Chancellor of the Exchequer (Mr. Robinson), on the 23d of February last, in submitting to Parliament the annual financial statement. Abundant confirmation will be found in that statement of the remarks made in the preceding speech, as to the prevailing sentiment, in the English government, on the general subject of prohibitory laws, and on the silk manufacture and the wool tax particularly.]
[Footnote 11: That of Mr. Clay.]
THE CASE OF GIBBONS AND OGDEN.
AN ARGUMENT MADE IN THE CASE OF GIBBONS AND OGDEN IN THE SUPREME COURT OF THE UNITED STATES, FEBRUARY TERM, 1824.
[This was an appeal from the Court for the Trial of Impeachments and Correction of Errors of the State of New York. Aaron Ogden filed his bill in the Court of Chancery of that State, against Thomas Gibbons, setting forth the several acts of the legislature thereof, enacted for the purpose of securing to Robert R. Livingston and Robert Fulton the exclusive navigation of all the waters within the jurisdiction of that State, with boats moved by fire or steam, for a term of years which had not then expired; and authorizing the Chancellor to award an injunction, restraining any person whatever from navigating those waters with boats of that description. The bill stated an assignment from Livingston and Fulton to one John R. Livingston, and from him to the complainant, Ogden, of the right to navigate the waters between Elizabethtown, and other places in New Jersey, and the city of New York; and that Gibbons, the defendant below, was in possession of two steamboats, called the Stoudinger and the Bellona, which were actually employed in running between New York and Elizabethtown, in violation of the exclusive privilege conferred on the complainant, and praying an injunction to restrain the said Gibbons from using the said boats, or any other propelled by fire or steam, in navigating the waters within the territory of New York.
The injunction having been awarded, the answer of Gibbons was filed, in which he stated, that the boats employed by him were duly enrolled and licensed to be employed in carrying on the coasting trade, under the act of Congress, passed the 18th of February, 1793, ch. 8, entitled, “An Act for enrolling and licensing ships and vessels to be employed in the coasting trade and fisheries, and for regulating the same.” And the defendant insisted on his right, in virtue of such licenses, to navigate the waters between Elizabethtown and the city of New York, the said acts of the legislature of the State of New York to the contrary notwithstanding. At the hearing, the Chancellor perpetuated the injunction, being of the opinion that the said acts were not repugnant to the Constitution and laws of the United States, and were valid. This decree was affirmed in the Court for the Trial of Impeachments and Correction of Errors, which is the highest court of law and equity in the State of New York before which the cause could be carried, and it was thereupon carried up to the Supreme Court of the United States by appeal.
The following argument was made by Mr. Webster, for the plaintiff in error.]
It is admitted, that there is a very respectable weight of authority in favor of the decision which is sought to be reversed. The laws in question, I am aware, have been deliberately re-enacted by the legislature of New York; and they have also received the sanction, at different times, of all her judicial tribunals, than which there are few, if any, in the country, more justly entitled to respect and deference. The disposition of the court will be, undoubtedly, to support, if it can, laws so passed and so sanctioned. I admit, therefore, that it is justly expected of us that we should make out a clear case; and unless we do so, we cannot hope for a reversal. It should be remembered, however, that the whole of this branch of power, as exercised by this court, is a power of revision. The question must be decided by the State courts, and decided in a particular manner, before it can be brought here at all. Such decisions alone give this court jurisdiction; and therefore, while they are to be respected as the judgments of learned judges, they are yet in the condition of all decisions from which the law allows an appeal.
It will not be a waste of time to advert to the existing state of the facts connected with the subject of this litigation. The use of steamboats on the coasts and in the bays and rivers of the country, has become very general. The intercourse of its different parts essentially depends upon this mode of conveyance and transportation. Rivers and bays, in many cases, form the divisions between States; and thence it is obvious, that, if the States should make regulations for the navigation of these waters, and such regulations should be repugnant and hostile, embarrassment would necessarily be caused to the general intercourse of the community. Such events have actually occurred, and have created the existing state of things.
By the law of New York, no one can navigate the bay of New York, the North River, the Sound, the lakes, or any of the waters of that State, by steam-vessels, without a license from the grantees of New York, under penalty of forfeiture of the vessel.
By the law of the neighboring State of Connecticut, no one can enter her waters with a steam-vessel having such license.
By the law of New Jersey, if any citizen of that State shall be restrained, under the New York law, from using steamboats between the ancient shores of New Jersey and New York, he shall be entitled to an action for damages, in New Jersey, with treble costs against the party who thus restrains or impedes him under the law of New York! This act of New Jersey is called an act of retortion against the illegal and oppressive legislation of New York; and seems to be defended on those grounds of public law which justify reprisals between independent States.
It will hardly be contended, that all these acts are consistent with the laws and Constitution of the United States. If there is no power in the general government to control this extreme belligerent legislation of the States, the powers of the government are essentially deficient in a most important and interesting particular. The present controversy respects the earliest of these State laws, those of New York. On these, this court is now to pronounce; and if they should be declared to be valid and operative, I hope somebody will point out where the State right stops, and on what grounds the acts of other States are to be held inoperative and void.
It will be necessary to advert more particularly to the laws of New York, as they are stated in the record. The first was passed March 19th, 1787. By this act, a sole and exclusive right was granted to John Fitch, of making and using every kind of boat or vessel impelled by steam, in all creeks, rivers, bays, and waters within the territory and jurisdiction of New York for fourteen years.
On the 27th of March, 1798, an act was passed, on the suggestion that Fitch was dead, or had withdrawn from the State without having made any attempt to use his privilege, repealing the grant to him, and conferring similar privileges on Robert R. Livingston, for the term of twenty years, on a suggestion, made by him, that he was possessor of a mode of applying the steam-engine to propel a boat, on new and advantageous principles. On the 5th of April, 1803, another act was passed, by which it was declared, that the rights and privileges granted to Robert R. Livingston by the last act should be extended to him and Robert Fulton, for twenty years from the passing of the act. Then there is the act of April 11, 1808, purporting to extend the monopoly, in point of time, five years for every additional boat, the whole duration, however, not to exceed thirty years; and forbidding any and all persons to navigate the waters of the State with any steam boat or vessel, without the license of Livingston and Fulton, under penalty of forfeiture of the boat or vessel. And lastly comes the act of April 9, 1811, for enforcing the provisions of the last-mentioned act, and declaring, that the forfeiture of the boat or vessel found navigating against the provisions of the previous acts shall be deemed to accrue on the day on which such boat or vessel should navigate the waters of the State; and that Livingston and Fulton might immediately have an action for such boat or vessel, in like manner as if they themselves had been dispossessed thereof by force; and that, on bringing any such suit, the defendant therein should be prohibited, by injunction, from removing the boat or vessel out of the State, or using it within the State. There are one or two other acts mentioned in the pleadings, which principally respect the time allowed for complying with the condition of the grant, and are not material to the discussion of the case.
By these acts, then, an exclusive right is given to Livingston and Fulton to use steam navigation on all the waters of New York, for thirty years from 1808.
It is not necessary to recite the several conveyances and agreements, stated in the record, by which Ogden, the plaintiff below, derives title under Livingston and Fulton to the exclusive use of part of these waters for steam navigation.
The appellant being owner of a steamboat, and being found navigating the waters between New Jersey and the city of New York, over which waters Ogden, the plaintiff below, claims an exclusive right, under Livingston and Fulton, this bill was filed against him by Ogden, in October, 1818, and an injunction granted, restraining him from such use of his boat. This injunction was made perpetual, on the final hearing of the cause, in the Court of Chancery; and the decree of the Chancellor has been duly affirmed in the Court of Errors. The right, therefore, which the plaintiff below asserts, to have and maintain his injunction, depends obviously on the general validity of the New York laws, and especially on their force and operation as against the right set up by the defendant. This right he states in his answer to be, that he is a citizen of New Jersey, and owner of the steamboat in question; that the boat is a vessel of more than twenty tons burden, duly enrolled and licensed for carrying on the coasting trade, and intended to be employed by him in that trade, between Elizabethtown, in New Jersey, and the city of New York; and that it was actually employed in navigating between those places at the time of, and until notice of, the injunction from the Court of Chancery was served on him.
On these pleadings the substantial question is raised, Are these laws such as the legislature of New York has a right to pass? If so, do they, secondly, in their operation, interfere with any right enjoyed under the Constitution and laws of the United States, and are they therefore void, as far as such interference extends?
It may be well to state again their general purport and effect, and the purport and effect of the other State laws which have been enacted by way of retaliation.
A steam-vessel, of any description, going to New York, is forfeited to the representatives of Livingston and Fulton, unless she have their license. Going from New York or elsewhere to Connecticut, she is prohibited from entering the waters of that State if she have such license.
If the representatives of Livingston and Fulton in New York carry into effect, by judicial process, the provision of the New York laws, against any citizen of New Jersey, they expose themselves to a statute action in New Jersey for all damages, and treble costs.
The New York laws extend to all steam-vessels; to steam frigates, steam ferry-boats, and all intermediate classes. They extend to public as well as private ships; and to vessels employed in foreign commerce, as well as to those employed in the coasting trade.
The remedy is as summary as the grant itself is ample; for immediate confiscation, without seizure, trial, or judgment, is the penalty of infringement.
In regard to these acts, I shall contend, in the first place, that they exceed the power of the legislature; and, secondly, that, if they could be considered valid for any purpose, they are void still, as against any right enjoyed under the laws of the United States with which they come in collision; and that in this case they are found interfering with such rights.
I shall contend that the power of Congress to regulate commerce is complete and entire, and, to a certain extent, necessarily exclusive; that the acts in question are regulations of commerce, in a most important particular, affecting it in those respects in which it is under the exclusive authority of Congress. I state this first proposition guardedly. I do not mean to say, that all regulations which may, in their operation, affect commerce, are exclusively in the power of Congress; but that such power as has been exercised in this case does not remain with the States. Nothing is more complex than commerce; and in such an age as this, no words embrace a wider field than _commercial regulation_. Almost all the business and intercourse of life may be connected incidentally, more or less, with commercial regulations. But it is only necessary to apply to this part of the Constitution the well-settled rules of construction. Some powers are held to be exclusive in Congress, from the use of exclusive words in the grant; others, from the prohibitions on the States to exercise similar powers; and others, again, from the nature of the powers themselves. It has been by this mode of reasoning that the court has adjudicated many important questions; and the same mode is proper here. And, as some powers have been held to be exclusive, and others not so, under the same form of expression, from the nature of the different powers respectively; so where the power, on any one subject, is given in general words, like the power to regulate commerce, the true method of construction will be to consider of what parts the grant is composed, and which of those, from the nature of the thing, ought to be considered exclusive. The right set up in this case, under the laws of New York, is a monopoly. Now I think it very reasonable to say, that the Constitution never intended to leave with the States the power of granting monopolies either of trade or of navigation; and therefore, that, as to this, the commercial power is exclusive in Congress.
It is in vain to look for a precise and exact _definition_ of the powers of Congress on several subjects. The Constitution does not undertake the task of making such exact definitions. In conferring powers, it proceeds by the way of _enumeration_, stating the powers conferred, one after another, in few words and where the power is general or complex in its nature, the extent of the grant must necessarily be judged of, and limited, by its object, and by the nature of the power.
Few things are better known than the immediate causes which led to the adoption of the present Constitution; and there is nothing, as I think, clearer, than that the prevailing motive was _to regulate commerce_; to rescue it from the embarrassing and destructive consequences resulting from the legislation of so many different States, and to place it under the protection of a uniform law. The great objects were commerce and revenue; and they were objects indissolubly connected. By the Confederation, divers restrictions had been imposed on the States; but these had not been found sufficient. No State, it is true, could send or receive an embassy; nor make any treaty; nor enter into any compact with another State, or with a foreign power; nor lay duties interfering with treaties which had been entered into by Congress. But all these were found to be far short of what the actual condition of the country required. The States could still, each for itself, regulate commerce, and the consequence was a perpetual jarring and hostility of commercial regulation.
In the history of the times, it is accordingly found, that the great topic, urged on all occasions, as showing the necessity of a new and different government, was the state of trade and commerce. To benefit and improve these was a great object in itself; and it became greater when it was regarded as the only means of enabling the country to pay the public debt, and to do justice to those who had most effectually labored for its independence. The leading state papers of the time are full of this topic. The New Jersey resolutions[1] complain that the regulation of trade was in the power of the several States, within their separate jurisdiction, to such a degree as to involve many difficulties and embarrassments; and they express an earnest opinion, that the sole and exclusive power of regulating trade with foreign states ought to be in Congress. Mr. Witherspoon’s motion in Congress, in 1781, is of the same general character; and the report of a committee of that body, in 1785, is still more emphatic. It declares that Congress ought to possess the sole and exclusive power of regulating trade, as well with foreign nations as between the States.[2] The resolutions of Virginia, in January, 1786, which were the immediate cause of the Convention, put forth this same great object. Indeed, it is the only object stated in those resolutions. There is not another idea in the whole document. The sole purpose for which the delegates assembled at Annapolis was to devise means for the uniform regulation of trade. They found no means but in a general government; and they recommended a convention to accomplish that purpose. Over whatever other interests of the country this government may diffuse its benefits and its blessings, it will always be true, as matter of historical fact, that it had its immediate origin in the necessities of commerce; and for its immediate object, the relief of those necessities, by removing their causes, and by establishing a uniform and steady system. It will be easy to show, by reference to the discussions in the several State conventions, the prevalence of the same general topics; and if any one would look to the proceedings of several of the States, especially to those of Massachusetts and New York, he would see very plainly, by the recorded lists of votes, that wherever this commercial necessity was most strongly felt, there the proposed new Constitution had most friends. In the New York convention, the argument arising from this consideration was strongly pressed, by the distinguished person[3] whose name is connected with the present question.
We do not find, in the history of the formation and adoption of the Constitution, that any man speaks of a general concurrent power, in the regulation of foreign and domestic trade, as still residing in the States. The very object intended, more than any other, was to take away such power. If it had not so provided, the Constitution would not have been worth accepting.
I contend, therefore, that the people intended, in establishing the Constitution, to transfer from the several States to a general government those high and important powers over commerce, which, in their exercise, were to maintain a uniform and general system. From the very nature of the case, these powers must be exclusive; that is, the higher branches of commercial regulation must be exclusively committed to a single hand. What is it that is to be regulated? Not the commerce of the several States, respectively, but the commerce of the United States. Henceforth, the commerce of the States was to be a _unit_, and the system by which it was to exist and be governed must necessarily be complete, entire, and uniform. Its character was to be described in the flag which waved over it, E PLURIBUS UNUM. Now, how could individual States assert a right of concurrent legislation, in a case of this sort, without manifest encroachment and confusion? It should be repeated, that the words used in the Constitution, “to regulate commerce,” are so very general and extensive, that they may be construed to cover a vast field of legislation, part of which has always been occupied by State laws; and therefore the words must have a reasonable construction, and the power should be considered as exclusively vested in Congress so far, and so far only, as the nature of the power requires. And I insist, that the nature of the case, and of the power, did imperiously require, that such important authority as that of granting monopolies of trade and navigation should not be considered as still retained by the States.
It is apparent from the prohibitions on the power of the States, that the general concurrent power was not supposed to be left with them. And the exception out of these prohibitions of the inspection laws proves this still more clearly. Which most concerns the commerce of this country, that New York and Virginia should have an uncontrolled power to establish their inspection of flour and tobacco, or that they should have an uncontrolled power of granting either a monopoly of trade in their own ports, or a monopoly of navigation over all the waters leading to those ports? Yet the argument on the other side must be, that, although the Constitution has sedulously guarded and limited the first of these powers, it has left the last wholly unlimited and uncontrolled.
But although much has been said, in the discussion on former occasions, about this supposed concurrent power in the States, I find great difficulty in understanding what is meant by it. It is generally qualified by saying, that it is a power by which the States could pass laws on subjects of commercial regulation, which would be valid until