West Indies, smuggling is carried on upon a most extensive scale, and it is known to everybody, is practised by almost everybody, and excites no compunctions, except those which arise from fear of detection." Such, then, is the inevitable effect of a long perseverance in the policy of high and tempting duties. They invite a disregard of the laws, offer an indirect bounty to deceit and fraud, lower the standard of public morals, and decoy men unwittingly into the paths of dishonor and crime.

III. It is injurious to production, commerce, and national wealth.

1st. To production. We have seen, elsewhere, that the aggregate production of the earth would be greatest if the people of each country would create only those products to which their location, soil, and climate, are most favorable; that is, which yield them the greatest amount of profit; and this, we suppose, will not be denied. The question then arises, whether a system of free trade or protection is best calculated to forward this result.

It is contended by the advocates of restriction that protection is the most powerful stimulus which can be applied to the production of a country. Mr. Greely, a writer of acknowledged ability, and possessing a remarkable command of facts, in an article which appeared in one of the early numbers of the Merchants' Magazine, (vol. 1, page 53,) takes this view of the matter: "Is it," he asks, "commercially expedient that the great produ cing interests of the country be fostered and stimulated to their highest possible activity and force, or that they be left entirely to take care of themselves, and in each department to encounter the depressing and disastrous rivalry of whatever portion of the globe may be able to undersell our productions in its particular staple ?"

He

Here Mr. Greely evidently regards protection as the agent which is to stimulate to the "highest possible activity" the producing interests of the country; and in a subsequent article (Merchants' Magazine, vol. 1, page 413,) he explains the manner in which this is to be accomplished. says, "Let me now adduce some illustrative examples; we all know that certain bounties are paid by our government to our citizens engaged in the cod and mackerel fisheries; will my opponent contend that no more fish are caught than there would be if no bounties were given? Again: until very recently, Maine was a timber-cutting and commercial state, her breadstuffs being in great part purchased from abroad. In 1836, (I believe,) her legislature enacted that a bounty should be paid thereafter to the producers of wheat within her territory. Under the operation of that act, in the course of two or three years, the annual production of wheat in Maine has been quadrupled. Now, my opponent will not deny that this act is clearly a protective one, and directly in the teeth of the "free trade" principles which Maine has ever professed to cherish."

Certainly no one can doubt that this is a protective measure, nor that it has had the effect to increase the production of wheat in Maine. But it by no means proves that the aggregate productions of Maine have been benefited. Men cannot work in the field and on the fishing banks at the same time; they cannot raise potatoes and wheat at once on the same field, Consequently they are obliged to choose between employments. The bounties on fish and wheat made these branches of business more profitable than some others, and men who understood this, left the less profitable for that which paid them better. But there is no evidence here that the entire amount of productions in Maine was increased by its bounty to the wheat

growers." Mr. Greely seems to have been aware that this objection would be urged against his argument, and he therefore guards it as follows:

"My opponent, then, has no chance of escape from the natural conclusion, but through the presumption that the skill and labor employed in the production of wheat has been diverted from some other equally profitable employment; that therefore Maine has gained nothing by her protective policy. But is this presumption justified by fact? Will any man seriously contend that if Maine had not raised the two millions of bushels extra of wheat, during the last three years, she would necessarily have produced something in its stead of equal or greater value? I trust not."

We could have wished that Mr. Greely had drawn from his inexhaustible store of facts something a little more satisfactory than is contained in his last three words, as without them we must still come to the conclusion that Maine has, in fact, been the loser by her "protective policy." The reason why wheat was not raised before the bestowment of this bounty, was because the wheat culture was less profitable than some other modes of industry. The bounty had the effect to raise it to the general average, and consequently to invite the culture. Had the bounty been paid by the king of France, it is possible that Maine might not have been the loser. It was, however, taxed in some way on her own citizens, and was therefore merely taken from the pockets of one class to be put into those of another; and if, after all, wheat cannot be raised in Maine cheaper than it can be procured by exchange, she has, clearly, been the loser by her "protective policy."

To illustrate this position. A farmer in Maine can raise on a certain piece of land $25 worth of potatoes, and only $20 worth of wheat. It is consequently to his interest to raise potatoes. But if the wheat bounty was sufficient to raise the value of his crop from $20 to $25, it would then be indifferent to him whether he raised wheat or potatoes, inasmuch as his profits would be the same in either case. But although he is, individually, just as well off by turning his attention to the culture of wheat, yet it is evident that his ground has produced less value. His wheat is, after all, worth only $20. He is a loser to the amount of $5 on his crop, but the state has kindly come forward to make up his loss. The wheat-growers of Maine, then, are not, as a class, losers by their change of occupation; but the state, that is, the tax-payers, are losers to the full amount of the bounty.

Now, what is true of protection in Maine, is true of protection anywhere else. The article protected can be procured by exchange cheaper than it can be produced, and the protective duty is laid to make it so dear as to give the advantage to the home producer. It was not produced before because some other mode of industry was more profitable. The duty raises it to the general average, and consequently the producer suffers no loss, although really engaged in a losing business, the community having agreed to sustain him, that is, to pay his losses.

To illustrate this point still further, we will suppose that a certain kind of cloth which can be obtained of the New York importer under a system of free trade at $3 per yard, cannot be produced by the manufacturer, with fair profits, for less than $4. In order to protect him against this foreign competition, a duty is laid of one dollar per yard, and now the cloth can be profitably made. We will suppose that under this artificial stimulant the goods are produced to the amount of 100,000 yards per annum; is the general production of the country increased—that is, is the country made richer by this result? Most clearly not. But, on the other hand, pro

duction is less; that is, the country is poorer by at least the additional price of the cloth; that is, by $100,000. The manufacturer was all the time doing a losing business. He made cloth which, with fair profits, cost him $4 per yard, but which was really worth but $3. The loss on the whole was therefore $100,000, which was made up to him by the consumers, who paid the dollar per yard extra, and were therefore made just so much poorer by the protective duty.

But this is by no means the extent of the mischief. The increase of price caused by the protective duty has diminished its consumption, and still further affected production by injuring our foreign market.

To illustrate

this position, let it be supposed that under a system of free trade, and before the price of this cloth was increased by the policy of protection, the consumption amounted to 300,000 yards. Of course a great many persons who can afford to buy cloth at $3 cannot afford to buy it at $4, and we will therefore suppose that the consumption has diminished from 300,000 to 200,000, and that now 100,000 yards are imported and 100,000 manufactured. Here, then, we have at once a falling off in our imports of 200,000 yards of cloth. Now this 200,000 yards was procured of Great Britain in exchange for 16,000 bales of cotton produced in one of our southern states. What becomes of the market for this cotton? We refuse to take cloth for it as formerly, and our cotton market is consequently injured, and its price reduced. Hence our policy is suicidal. We stimulate the production of articles which we cannot produce to advantage, and injure the production of others to which our soil and climate are particularly adapted.

Again: protection is further injurious to production by increasing the cost of the articles produced. In order to compete successfully with other nations, we must be able to exchange with them on as favorable terms as others; that is, we must sell as low. If we can sell lower, so much the greater is our advantage. Thus, if it costs nine cents to raise a pound of cotton, and we can, at that price, compete with other nations, we should at eight cents be able to undersell them and supply the market; whereas, at ten cents, we should be driven out of the market. The cost of production is, therefore, a matter of great importance. Now it is clear that if the price of goods consumed be very much increased, the effect must be to increase the cost of production. A duty on iron adds to the cost of machinery made of iron-on wool and cloth, to the cost of wearing apparel— on the supplies of the table, to the daily expense of living. It follows, therefore, that to the whole extent which protection increases the cost of production is the country the loser and production injured.

2d. Protection is injurious to commerce. This position follows so naturally from the last, that we should hardly have given it a distinct place had it not been so stoutly denied by the advocates of protection. "The direct object of commerce," says Mr. Barnard, (Merchants' Magazine, vol. 1, page 12,)" is the exchange of commodities. Of course there must be commodities to be exchanged; and the more of them there may be, the more considerable will be the business and the profits of exchange." If this be true, whatever favors production advances the prosperity of commerce; and, on the other hand, whatever injures production retards its prosperity. It is contended, however, by the advocates of restriction, that the protective policy is beneficial to commerce. Mr. Greely, in one of the articles already alluded to, (vol. 1, page 58,) in speaking of the free trade school

of politicians, says: "Their fears of a destruction or signal decline of commerce under the influence of the protective policy have been shown to be utterly delusive. Take the ten years when that policy was predominant-from 1824 to 1834-and its friends may safely defy its opponents to show any ten successive years when commerce was so uniformly, generally, and onwardly prosperous."

Of course we do not know on what information Mr. Greely has based this conclusion. But we have carefully examined the official tables of exports and imports, tonnage, &c., and do not find that they sustain his view of the case. The average of our exports, for instance, for the ten years preceding 1808, at which time the embargo was laid, was $81,670,872, which is something more than $13 50 per head for the whole population. The average from 1817 to 1823 inclusive, under the operation of the tariff of 1816, was $76,088,798, or about $8 per head for the population. The average for the period mentioned by Mr. Greely, viz., from 1824 to 1833 inclusive, was $81,254,302, or about $6 50 per head for the population. The average from 1834 to 1839 inclusive, under the gradual reduction of the compromise act, and still burdened in part by the restrictive policy, is $116,494,722, or about $7 per head for the population.

Now it will be seen at a glance, that so far from exhibiting the greatest commercial prosperity, the ten years spoken of by Mr. Greely were really the most depressed of any since the adoption of the federal constitution, unless it may be those which followed the restrictions of 1808, and those which are included in the war of 1812, which we have not taken the trouble to calculate. It will also be seen that the ten years of free trade prior to 1808 were those of the greatest commercial activity, the exports, as compared with the population, being just about twice as great as they were in the period specified by Mr. Greely. It is worthy of observation, too, that since the passage of the compromise act, notwithstanding the depressing state of the times, our foreign commerce has felt the stimulus of free trade and experienced a gradually progressive increase.

If we turn our attention to the statistics of tonnage, we shall meet with precisely the same result. During the two active years immediately suceeeding the peace of 1814, under the operations of free trade, our tonnage amounted to about 1 ton for 63 persons. In 1820 it had decreased to 1 ton for 7 persons. In 1830 it had further decreased to 1 ton for 103 persons. Whereas, in 1838, it had again increased to 1 ton for about 8 persons. There are, however, defects in the tables of tonnage which in some measure impair their usefulness. They are, nevertheless, good collateral testimony, and in conjunction with the tables of export and import, seem to show that Mr. Greely has, by some means, been led into error.

But all statistics aside, it is, we think, quite evident that protective duties can render no aid to commerce. We have seen that commerce subsists upon production. A large crop of cotton, or wheat, or rice, or tobacco, must necessarily give rise to more commercial transaction than a small one; and if it be true, as we think we have conclusively shown, that the protective policy diminishes production, then it follows that it is also injurious to commerce. Dr. Raguet justly observes that the high duty system diminishes both exports and imports. "It diminishes imports by raising the price of the imported commodity to the consumer. No nation can afford to consume as many foreign goods at high prices as at low prices, since every man's income is limited, and the extent to which he can buy is lim

ited by his income." It diminishes his exports "in consequence of depri ving foreign nations of the power to pay for them. If a man who has an article for sale refuses to take in exchange for it the only commodity which others have to offer, he cannot possibly sell. The same is the case with a nation. If a nation imports foreign articles to the extent of fifty millions of dollars, can she do this but in consequence of selling fifty millions worth of her produce? The answer must be in the negative. And if the proposition be true in whole, must it not be true in part? If, for example, she refuses to purchase beyond the extent of twenty-five millions of dollars, must not her exports be at the same time reduced to twenty-five millions ?" President Wayland is, if possible, still more clear on this point. “I think," says he, "it is too obvious to need remark that duties on imports can have no favorable effect on exchange. Their only effect must be to raise the price of products, and of course to diminish the ability in both parties to exchange. Every one knows that the exchanges between two places are diminished by any natural obstacle to the communication. road were so bad that it cost five dollars per hundred weight to transport merchandise between two places, every one knows that exchanges between these places would be fewer than they would be if the road were improved so that transportation could be effected for twenty-five cents per hundred weight. Now it makes no difference whether this additional four dollars and seventy-five cents be the result of the badness of the road, or of a transit duty between the two places. The diminution of exchange which it causes will be precisely the same." And in conclusion he adds, "I therefore think it evident that government can do nothing to facilitate exchanges by means of discriminating duties.”

If a

3. Protection is injurious to national wealth. If what we have said under the two preceding heads be true, this is a postulate which scarcely requires proof. National wealth is the aggregate of the individual wealth of a nation. And although it may be true that certain classes of individuals are benefited for a season by protective laws, yet the aggregate wealth of the nation is diminished.

If an article requires protection in order to defend it against foreign competition, that circumstance alone is sufficient proof that it cannot be produced as cheaply as it can be imported. The object of the protective duty is to raise the price in order that the production may become profitable; and if it does not accomplish this, it affords no protection. But the protective duty and consequent increase of price do not diminish the cost of production. The article can therefore be produced no cheaper now than before it must consequently still be produced at a loss, but the loss is borne by the whole community, who are taxed to the amount of the increased price for that purpose. Hence it is clear that the whole community, that is, the nation, sustains a loss at least equal to the additional price caused by the protective duty, and that therefore protection is injurious to national wealth.

But we are told that, by producing articles at home, we shall save to the country a large amount of money which would otherwise go abroad; and which, if retained at home, would greatly add to the wealth of the nation. Thus, a few years ago, our minister at Constantinople, in recommending a new mode for the production of silk, expressed a hope, "by a gradual introduction of its culture among us, to save, in the end, millions of money which finds its way to this side of the Atlantic."