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Mathew Carey.

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

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those enjoyed by Great Britain.

Under these circumstances, I trust it will be admitted by eve-
ry man of candour that it would be a mere mockery and insult
to common sense, to pretend that live per cent., which, as ap-
pears above, was the duty on seven-eighths of all the manufac-
tured articles imported into this country, was imposed with a
view to protection. Revenue alone was the object.

Having to struggle with such a lamentably impolitic system,
it is wonderful that our manufactures made any progress. It re-
flects great credit on our citizens, that they were able to emerge
from such an overwhelming mass of difficulties, as they had to
encounter.

While the grand leading manufactures of cotton, wool, iron,
steel, lead, flax, and pottery, were thus subject to only five per
cent, duty, lest smuggling should be encouraged, it may afford
some gratification to curiosity to exhibit a statement of the very
high duties on tea, coffee, rum. Sec. which were wholly unres-
trained by any fear of smuggling.



280



THE NEW OLIVE BRANCH.



1789.

Souchong, per lb. -
Hyson, do. - -

Bohea, do. - -

Madeira, per gallon, -
Jamaica rum, do. -
Coffee, per lb. - - -
Sugar, do. - - -
Salt, per bushel, - -



Price.


Duty.


Per cent.




39


10


25


49


20


40




15


6


40




100


18


18




40


10


25




12*


n


20




5


H


30




12


6


50





Thus a yard of broad cloth or muslin, value four dollars, paid
no more duty than a pound of hyson tea, value 49 cents !

The amount of goods subject to ad valorem duties, imported
in 1789, 1790, and 1791, was as follows —



Per cent.


1789.


1790.


1791.


5

n

10
15


§7,136,578

520,182

305,248

5

2,700


§14,605,713

1,067,143

699,14?

4,876


§11,036,477

7,708,337

1,114,463

314,206

5,654




§7,969,731


§16,376,881


§19,179,137*



The duties on the above were about 2,600,000 dollars : and the
whole amount of the impost for those three years, was 6,494,225
dollars. f

The residue, about 3,900,000 dollars, was collected principal-
ly from teas, wines, sugar, salt, spirits, spices, and coffee ! This
completely justifies the character of the tariff, that as large a por-
tion as possible of the impost was levied on articles not interfer-
ing with national industry ; and that the duties on manufactur-
ed merchandize were as light as the exigencies of the govern-
ment would admit.

The manufacturers at this period, as they have done so often
since, besought the protection and threw themselves on the lib-
erality of congress. On the eleventh of April, 1789, Samuel
Smith, Esq. of Maryland, presented to congress a memorial
from the manufacturers of Baltimore, stating —

" That since the close of the late war, and the completion of
" the revolution, they have observed with serious regret theman-
*' ulacturing and trading interest of the country rapidly declining,
" and the attempts of the state legislatures to remedy the evil,
" failing of their object ; that in the present melancholy state of
" our country, the number of poor increasing for want of em-
" ployment, foreign debts accumulating, houses and lands depre-
" dating in value, and trade and manufactures languishing and



■ Seybert, 158.



t Idem, 395-



THE NEW OLIVE BRANCH, 281

'* expiring ; they look up to the supreme legislature of the united
" states, as the guardians of the whole empire, and from their
" united wisdom and patriotism, and ardent love of their country,
" expect to derive that aid and assistance, which alone can dissi-
" pate their just apprehensions and animate them with hopes of
*' success in future ; by imposing on all Joretgn articles which can
**■ be made in America^ such duties as will give a just and decided
*'^ preference to their labours ; discountenancing that trade which
*' tends so materially to injure them and impoverish their coun-
" try : measures which in their consequences may contribute to
" the discharge of the national debt, and the due support of gov-
*' ernment; that they have annexed a list of such articles as are,
*' or can be manufactured amongst them, and humbly trust in the
" wisdom of the legislature to grant them, in common with oth-
" er mechanics and manufacturers of the united states, that relief
*' that may appear proper.''*

This application met with the same fate, as more recent ones
have experienced from the successors of that congress.

It would require a long chapter to develope the utter impolicy
of this tariff, and its inauspicious effects on the industry and hap-
piness of a large portion of our citizens, and on the national
prosperity. My limits forbid me to display the whole of its de-
formity. I annex one further view of it :

In 1793, the amount of merchandize imported at

1h and 8 per cent, was about - - Sl5,328,000f

On which the net duty was about - - gl, 200,000



This included all articles of clothing, whether cotton, woollen,
or silk, (except India goods, subject to twelve and a half per
cent.)
The net duty on coffee for the same year was - Sl,226,724|



Being more than on the whole of the clothing of the nation.

Let us examine how this might have been arranged for the
promotion of the prosperity of the country.

Suppose that the duty on coffee had been reduced

so as to raise only v - - ^700,000

* Debates of Congress, I. 29. f Seybert, 158. % Idem 438.

36



'ZB^- THE NEW OLIVE BRANCH,

And that the duty on cotton and woollen goods
had been raised to 20 per cent,, which might
have reduced the importation to ^^8,500,000, and
produced ^ , - - - 1,700,000

S2,4OO,0OO



which is nearly the aggregate of the duties stated.

Or, suppose that the duty on coffee had remained unaltered,
and on cottons and woollens been increased to 25 per cent. — and
that the importations had been diminished to 5,000,000 of dol-
lars, the revenue would have been unimpaired.

What an immense difference ! In one case, nearly 7,000,000
and in the other 10,000,000 of dollars saved to the country ! —
Three or four hundred thousand people rendered happy ! A
market for the farmers for probably 6,000,000 lbs. of wool ! and
for the whole of the cotton then raised by our planters.

But it is a humiliating truth, that very few of our statesmen
have ever predicated their measures on national views. They
are almost all sectional. They do not fall within Rousseau's
description : — -

^' Jl belongs to the real statesman to elevate his views in the im-
^'- position of taxes ^ above the mere object of Ji nance ^ and to trans-
'■^form them into useful regulations. '''*

It is a melancholy operation for a real friend to the honour,
power, resources, and happiness of the united states, to compare
the tariff of 1789, and the principles on which it is predicated,
with the preamble to a law of the state of Pennsylvania, passed
anno 1785, four years before. The sound policy, the fostering
care of its citizens, and of the resources of the state displayed in
the latter, form a strong and decisive contrast with the utter im-
policy of the tariff.

Sect. i. ^' Whereas divers useful and beneficial arts and manufac-
" tures h ive been gradually introduced into Pennsylvania, and the
" same have at len£>;th risen to a very considerable extent and perfec-
" tion, insomuch that during the late war between the united states of
s' America and Great Britain^ when the imfiortation of Eurofiean guods
*' was much interrufited, and often very difficult and ujicertain^ the ar-
" tisans and mechanics of this scctte^ were able to supply in the hours
." of need, not only large quantities of weapons and other implements^
" but also ammu7iition and ctjthing, without which the war could not
*•« have been carried on, whereby their oppressed country was greatly
'< assisted a?2d relieved.

Sect. ii. " And whereas, although the fabrics and manufactures
" of Europe and other foreign parts, imported into thii. country in
" times of peace, may be afforded at cheaper rates than they can be
" made here^ yet good policy and a regard to the well being of divert



THE NEW OLIVE BRANCH. S&S

^^ useful and industrious citizens, nvko are employed in the making of
" like goodK in t/iis /itate, demand of un that modefatr duties be laid on
" certain fahricfi and manufactures imported., which do most interfere
'^^ nvith^and ivhich (if tio relief be giT en) will undermine and destroy
" the useful manufactures of the like kind in this country : For this
*' purpose," &c. &c.

In December, 1791, Alexander Hamilton, who saw the errors
of the tariff of the two preceding years, presented congress with
his celebrated Report on Manufactures, the most perfect and lu-
minous work ever published on the subject. It embraces all the
great principles of the science of political economy, respecting
that portion of the national industry, applied to manufactures,
and is admirably calculated to advance the happiness of the peo-
ple, and the wealth, power, and resources of nations. It more
richly deserves the title of " The Wealth of Nations," than the
celebrated work that bears the name.

Tb.e Report swept away, by the strongest arguments, all the
plausible objections on which the paralizing influence of the ta-^'
riff rested for support. The lucid reasoning, as level to the
most common capacity, as to the most profound statesman, is
not enveloped in those abstractions and metaphysical subtleties
which abound in most of the books on this subject, and which,-
like the airy spectres of the dreamer, elude the grasp of the
mind.

I annex a few of those grand and sublime truths, with whicT>
this work abounds, and which bear the strongest testimony
against, and condemnation of, the course which this country has
pursued.

" The substitution of foreign for domestic manufactures, is a
'-'■ transfer to foreign nations of the advantages of machinery in
*' the modes in xvhich it is capable of being employed xvith most
*' utility, and to the greatest extent ^^

How many millions of the wealth of this country have been
thus " transferred to foreign nations" during the thirty years o^
our career ! How much of this wealth was used to scourge us
at Washington, on the frontiers of Canada, and in the Chesa-'
peake ! What a lamentable use we have made of the advantages
which heaven has lavished on us !

" The establishment of manufactures is calculated not only to
" increase the general stock of useful and produc'iive labour, buij
" even to i>7iprove the state of agriculture in particidary^

What a lesson is here for the farmers and planters, who have'
been unhappily excited to view with jealousy and hostility thos*:
citizens who contribute so largely to their prosperity '

* Hamilton's Works, vol. I.-



284 THE NEW OLIVE BRANCH.

" It is the interest of the community, rvtth a view to eventual
"^ and permanent ecoiiomy^ to encourage the growth of manufac-
" tures. In a national view, a temporary enhancement of price
"must be always well compensated by a permanent reduction
"of it."*

" The trade of a country, which is both manufacturing and
"agricultural, will be more lucrative and prosperous than that of
" a country -which is merely agricultural.''''^

" The uniform appearance of an abundance of specie^ as the
" concomitant of a flourishing state of mamfuctures^ and of the
" reverse where they do not prevail, afford a strong presumption
" of their favourable operation upon the wealth of a country."*

*■*■ Not only the zvealth^ but the indepew.ence and security of a
" country^ appear to be materially connected -with the prosperity
" of manufactures. Every nation, with a view to these great
" objects, ought to endeavour to possess within itself all the es-
" sentials of national supply. These comprise the means of sub-
" sistence, habitation, clothing, and defence."*

" Considering a monopoly of the domestic market to its own
" manufactures as the reigning policy of manufacturing nations,
<' a similar policy on the part of the united states., in every proper
" instance, is dictated, it might almost be said by the principles
" of distributive justice — certainly by the duty of securing to their
'■^ own citizens a reciprocity of advantages.''''*

Mr. Hamilton, however, displayed an extreme degree of in-
consistency. Notwithstanding the conclusive and irresistible
arguments of his report, in favour of a decided protection of
manufactures, and notwithstanding the failure of many promis-
ing efforts at their establishment, in consequence of the deluge
of goods poured into the market, instead of recommending an
adequate enhancement of duties to supply some deficiency of
revenue in 1790, he submitted a plan for an excise on spirituous
liquors, which was one of the most universally odious and un-
popular measures that could be devised. It excited the western
insurrection ; thereby tarnished the character of the country ;
and jeopardized the government in its infancy.

However strong the arguments may be in favour of an excise
on spirits, in a moral point of view, it was, under existing cir-
cumstances, extremely impolitic. For the paltry amount raised
from it for a considerable time after its adoption, it was not
worth while to incur the disaffection of the citizens. The re-
ceipts for the first four years were —

* Hamilton's Works, Vol. I.



THE NEW OLIVE BRANCH^. 285

In 1792 - - - - . _ S 208,942

1793 337,705

1794 274,089

1795 337,755



Four years S 1,158,491*



Average S289,622



What a miserable sum as a set-ofF against the oppression and
vexation of an excise — and the insurrection it excited ! How
incalculably sounder policy it would have been, to have increas-
ed the duties on manufactured articles, which would not only
have answered the purpose of meeting the additional demands
of the treasury, and given a spring to the industry of our citi-
zens ; but made an important addition to the wealth, power and
resources of the nation !

The importations subject to five and seven and a half per
cent, duty —

In 1792 amounted to ... - g 16,22 l,000f

1793, at 72 and 8 14,966,000

1794, at 7i and 10 17,700,000

1795, at 10 16,447,000



Four years, $ 65,334,000



Two per cent, on this sum would have been $ 1,306,620

Annual average - - _ . _ g 326,655



which exceeds the net revenue arising from the excise, and with
scarcely a dollar additional expense in the collection.

A variety of circumstances combined to rescue the united
states from the ruinous consequences that would otherwise have
naturally flowed from the impolicy of the tarifFs-of 1789,1790
and 1804 ; of which, as I have already stated, the obvious ten-
dency was to afford the manufacturing nations of Europe, nearly
all the advantages they could have derived from this countiy in
its colonial state.

The provision in 1 790, for funding the debt of the united
states, threw into circulation an immense capital, which gave life
and activity to business. The establishment, about the same

* Seybert, 477. f Idem 159,



286 THfi NEW OLIVE BRANCH.

time, of the bank of the united states, afforded additional facili-
ties to trade and commerce. And the wars of the French re-
volution opened a market for the productions of our agriculture,
in many instances at most exorbitant prices ; for instance, occa-
sionally from fifteen to twenty dollars per barrel for flour in thc
West Indies, Spain and Portugal, and other articles in propor-
tion. We were thus enabled to pay for the extravagant quanti-
ties of manufactures which we consumed, and with which we
could and ought to have supplied ourselves.

The dreadful scenes in St. Domingo brought immense wealth
into this country with the emigrants who purchased safety by
flight from their paternal estates and their native land.

For a considerable time, moreover, we were almost the sole
carriers of the colonial produce of the enemies of Great Britain,
as her fleets were in full possession of the seas, and there was no
safety for the vessels of those powers in hostility with her.

But it was obvious that this system rested the prosperity of the
nation on the sandy foundation of the wars, desolation and mise-
ry of our fellow men. And as it was not probable that they
would continue to cut each other's throats to promotes our wel-
fare, a close of this dazzling scene was to be expected, for which
sound policy required provision to be made. But this duty was
totally neglected. We proceeded as if this state of aflPairs were
to last for ever. At length we were abruptly cut off from the
markets of Europe, and then a new order of things arose, to dis-
pel the lamentable delusion.



CHAPTER IV.

Memorials to congress. Deceptions report. List of Ex port fi.
Tariff f i%04>. Wonderful omission. Immense importations of
cotton and Tvoollen goods. Exportations of cotton.

In the years 1802, 3, and 4, memorials were presented to con-
gress from almost every description of manufacturers, praying
for further protection. In the two first years they were treated
with utter slight, and nothing was done whatever.

In 1 804, the committee on commerce and manufactures made
a very superficial report, from which I submit the following ex-
tract, as a specimen of the sagacity of its authors.

" There may be some danger in refusing to admit the manu-
*' factures of foreign countries ; for by the adoption of such a
" measure, we should have no market abroad, and industry
'^ would lose one of its chief incentives at home."



THE NEW OLIVE BRANCH.



287



This paragraph is superlatively absurd, and indeed more than
absurd : it is wicked. In order to defeat the object of the me-
morialists, it assumes for them requisitions which they did not
contemplate, and which of course their memorials did not war-
rant. No sound man in the united states ever contemplated the
total " exclusion of foreign mauiifitctu7-esy It was merely re-
quested that the memorialists should not themselves be " exclu-
ded'''' from the domestic market bv foreign rivals — and that the
industry of our citizens should be so far protected, that they
might be enabled to supply a portion of the thirty millions of
dollars, principally of clothing, imported that year.

But admitting for a moment, for the sake of argument, that
foreign manufactures had been excluded, who could persuade
himself, that we should therefore " have no market abroad for
our produce V War at that time raged in almost every part of
Europe, and the West Indies : and those who purchased our pro-
duce, had at least as powerful reasons to purchase as we had to
sell. The inhabitants of an island in danger of starvation would
suffer more from being deprived of supplies, than the producers
by the privation of a market.

To evince the futility of the ground assumed in the report, I
annex a list of some of the great leading articles exported in that
year : —



Flour

Indian corn

Beef

Indian meal

Hams

Butter - - -

Cheese

Lard - . -

Candles

Cotton

Tar - . -

Turpentine

Staves and heading

Boards, plank and scantling-



barrels 810,000
bushels 1,944,873
barrels 134,896
barrels 111,327
pounds 1,904,284
pounds 2,476,550
pounds 1,299,872
pounds 2,565,719
pounds 2,239,356
pounds 35,034,175
barrels 58,181

barrels 77,827

feet 34,614,000
feet 76,000,rX)0*



These, gentle reader, are the kinds of produce, which the fra-
mers of this very profound report were fearful "• would not have a
market," if " foreign merchandize was excluded." Such are the
displays of wisdom and political economy made to the legislature
of " the most enlightened nation in the world."

This subject deserves to be further analyzed. To reduce it



* Seybert, 110.



288



THE NEW OLIVE BRANCH.



to plain English, it means, that, if the united states laid heavy
duties, say 10, 15, 20 or 25 per cent, on silks, sattins, shawls,
broadcloths, linens, &c. or prohibited East India cotton goods,
the people of the West Indies would refuse to purchase oar lum-
ber — the Manchester manufacturers our cotton — and the gov-
ernments of Spain and Portugal, our flour, Indian meal, &c. &c.
Such views of political economy cannot fail to excite a high de-
gree of astonishment at their absurdity.

In the year 1 804, the demands of the treasury had greatly in-
creased by an augmentation of expenditure, and by the S> 5,000,-
000 of debt funded for the purchase of Louisiana. This requir-
ed an incrr-ase of duties. But the same impolicy and neglect of
affording adequate protection to the productive industry of the
country that prevailed in the former tariffs, appear in that of
this vear.

The old system was continued, of raising as large a portion as
possible of the impost on articles not interfering with our man-
ufactures, and laying duties comparatively light on manufac-
tures. Accordingly the duties on teas, wines, coffee, sugar, &c.
were raised with an intrepidity that bid defiance to the fear of
smuggling*



1804.


Cost.
Cents.


Duty.
Cents.


Per cent.


Bohea tea, perlb. ...


14


12


85


Souchong' do. - - -


41


18


44


Hyson do. ...


56


32


57


Hvsonskin do. ...


24


20


83


Imperial do. ...


75


32


40


Lisbon wine per gallon -


80


30


37^


London market Madeira, do.


160


58


36


Cofiee, per lb, ...


15


5


33



While these articles were dutied thus high, cotton and wool-
len goods, which formed the great mass of the clothing of the
country, were subject to only fifteen per cent., which in the im-
proved state of the machinery of Great Britain, and, so far as
respects cotton, the low price of labour in the East Indies, was
so wholly inadequate for protection, that very few attempts
were made to establish them on an extensive scale, and thus the
nation was drained of immense sums, for articles of which it
could have supplied a superabundance.

It is a remarkable and most extraordinary fact, and scarce-
Iv credible, that wooiltn goods were never mentioned in the ta-
rj/, before 1816, when the government had been in opera-
tion 27 years ! They were passed over, and fell within the
class of non-enumerated articles. It is impossible to reflect or



THE NEW OLIVE BRANCH. 289

this fact, without astonishment, and a conviction that there ne-
ver was adequate attention bestowed on the concoction of the ta-
riff, which, while it was silent respecting those important articles,
descended to the enumeration of artificial flowers, cosmetics,
bricks and tiles, dentifrice, dates, dolls, essences, fans, fringes,
glue, tassels and trimmings, limes and lemons, mittens, gloves,
powders, pastes, washes, tinctures, plums, prunes, toys, wafers,
&c. &c.

As few persons are aware of the extravagant extent of the im-
portations of clothing, I annex the amount for five years, of ar-
ticles subject to 15 per cent, duty, of which about nine-tenths
were cotton and woollen goods.

1804 . . . . . ^30,285,267

1805 ..... 37,137,598

1806 • . . . . 43,115,367

1807 . . . . . 46,031,742

1808 ..... 23,780,758



Sl80,350,732*



The re-exportation of articles of the same
description for these years, was —

1804 . . . . S 000,000

1805 . . . 1,587,801

1806 .... 2,075.601

1807 . . . 2,iy7,.383

1808 . . . . 755,085



6,615,8701

Balance .... 173,737,862

Deduct for sundries, say ten per cent. . 17,373,786



Cotton and woollen goods consumed in five

years, . . . , gl 56,364,076

Had the duty been twenty-five per cent., and the imports
100,000,000, the revenue would have gained, and there would
have been an immense saving to the nation of above 50,000,000
of dollars in four years ! When will statesmen learn the
grand secret of " transforming taxes into useful regulations?'''^

* Seybert, 164, f Idem, page 222.

37



2§0 "THE NEW OLIVE BRANCH.

During these five years, we exported of raw cotton—

1804 lbs. 35,034,175

1805 - 38,390,087

1806 35,657,465

1807 - - - - . - . 63,944,459

1808 - - 10,630,445



lbs. 183,656,631



Although we supplied Great Britain with more than a third
of the cotton she used, so little protection was afforded to the
manufacture of the article here, that in the year 1805, our con-
sumption was only 1000 bags ; whereas, had the fostering care
of the government been extended to it, we might have used
100,000. And this all-important manufacture, for which this
country is so peculiarly fitted by its capacity of producing the
raw material to any extent ; its boundless water power ; its ad-
mirable machinery ; and the skill of its citizens, never took root



Online LibraryMathew CareyEssays on political economy; or, The most certain means of promoting the wealth, power, resources, and happiness of nations: applied particularly to the United States → online text (page 31 of 57)