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The Contingencies of Free Trade.-Review of our Commercial History, as it discloses Contingencies. What makes a Sound Currency.-As a Man that fails frequently in Business can not get rich, so neither can a Nation.-The possible Destiny of the Country, under a Protective System, grand and glorious.-Free Trade devours all, and then eats up itself.

THAT the destiny of the United States is contingent, is evident enough contingent as to whether the nation will adhere to its original principles; contingent as to whether it will continue for ever a republican empire, or degenerate into monarchy; and contingent as to whether it will maintain a protective system, or abandon it for Free Trade. It is this last-named contingency only which we propose to consider. It is believed that the preceding chapters afford sufficient data to run out the line which this contingency indicates.

As to the alternative of adopting the policy of Free Trade, one would suppose that we have had experience enough to render that morally impossible. But no one can tell beforehand what folly a nation will be guilty of, nor predict the misfortunes into which, by such means, it may be plunged. Since the federal administration has so recently, and for the first time in the history of the country, abandoned the policy of Protection, declared itself for Free Trade, and caused to be adopted corresponding measures, it must be confessed that such facts are not ominous of good. But as the bitter experience of past measures of the same kind can not but be again renewed ere long by the operation of these, there are many chances that the lessons of this schoolmaster, which, as one has said, "charges high wages," will avail much to rectify the views of the public mind, and bring back the nation to its senses. If the history of the past is reliable evidence of the future, that like causes will continue to produce like effects, it is not difficult to determine the destiny of the United States, under a Free-Trade policy. The commercial embarrassments of the country from 1783 to 1790, under the confederation, for want of power in the states to unite in a system of protection, constitute a formidable class of facts, shedding light on this point. The period of some five to seven years

antecedent to the tariff of 1824, is another melancholy cycle of our commercial history, replete with general distress and ruin, all for want of a protective system. And is it necessary to bring to view again the facts of like character, several times presented in this work, which so disastrously signalized the period of some halfdozen years antecedent to the tariff of 1842, and which brought the country to the brink of commercial ruin, all for want of a protective system? Can the future fail to justify the past? Is there not light enough in this history?—We have before us, then, the certain destiny of the United States, under a system of Free Trade.

Of all reasons that can be urged in favor of a protective policy, no one perhaps can be named of greater cogency than its necessity for a good and adequate currency. The currency of the country -a sound currency-does not depend on banking, or the modes of banking, or whether banking be done by a national institution, or by state corporations, or by both, or by neither, though doubtless there is a choice in modes-A BETTER WAY. There can be no sound currency where there is no money; and there never can by money enough for the currency of a country which is constantly sending off more than it brings back-unless one of its products be money, as has been the case with Mexico and some of the South American states. In that case, money is not the medium, but an article, of trade. But the United States do not produce money in any quantity sufficient to rely upon, either as an article, or basis, or medium of trade. We are obliged, therefore, to depend on getting and keeping money enough by trade to answer the purposes of a currency.

A man may have a very large estate, well stocked, well worked, and be making extensive improvements; but if he buys more than he sells, his money, or active capital, is all the while growing less; and unless he has a great deal of it, he will soon find himself embarrassed. When this state of things arrives, he is precisely in the condition of a nation that has been guilty of the same improvidence. Without money, neither he nor a nation can do business to advantage. AN INCOME is as necessary to a nation as to a private individual; and the income of a nation is the money it gets by selling more than it buys. While this is the case, it is impossible that the currency of a nation should be bad or inadequate. A bank here and a bank there may fail, as private individuals do, and for like reasons of mismanagement or misfortune; but there can

be no such thing as a general bank suspension when the public policy is such as to secure the coming in of more money than goes out, or when there is enough in to prevent more going out than comes in. These results, in one case or the other, are always contingent on the sufficiency or insufficiency of the protective policy.

The intimate and indissoluble relation of the protective policy to the currency of the country, commends it, therefore, as a point for consideration too important to be overlooked. No man can trade safely, and with a warrant of prosperity, except on the basis of a credit which solid capital affords, and with such means as that credit will constantly supply him. The moment his means, and with his means, his credit, fail, he is stopped. There is no use in his trying to go on; it is impossible, except by a transient career of fraud, which only makes it worse when he is found out.

It is precisely the same with a nation in its trade with the rest of the world. When, for the lack of an adequate protective policy -which is the same thing as the improvidence of a spendthriftit is habitually buying more than it sells, and its money goes off to settle balances, its means of trade, domestic as well as foreign, are all the while growing less and less; and without a change, a reform, that nation must fail. Its insolvency is as inevitable as that of an improvident individual who conducts business on the same principles. The way in which the insolvency of a commercial nation shows itself is, first, by a scarcity of money, which everybody feels: as a consequence, a general contraction in all monetary operations, by which business is carried on, necessarily drawing along with it commercial inactivity, dulness; diffidence in all credit transactions; and at last, if no relief comes, the banks suspend. This last act is the consummation of a nation's commercial insolvency. The banks, at the moment, and during the whole time of suspension, may be sound, as the specie in their vaults is not the exponent of their capital. Being allowed by their charters to issue more paper than they have specie, the heavy commercial exchanges against the country operate directly on their vaults, to draw off the specie into foreign parts, and they are compelled to suspend, or part with the last cent. Even then they must suspend, so long as they have more paper out than specie in. It is the unfavorable state of foreign exchanges, the large commercial balances against the country, which occasion a general bank suspension. It is because there is not money enough in the country to pay its debts; and like a merchant, who finds himself in a like condition, to avoid complete and

irretrievable ruin, that would incapacitate the country for all trade, the banks stop payment, to the injury of their own credit and the credit of the country. They can not help it. They are forced into it by the effect of the policy of the governinent, which tempts the people to buy more than they sell, and the nation to do the same, till, after repeated and long-continued drafts on the money of the country, the pressure begins to be felt; and before the remedy can be applied for it is too late when the effects of such improvidence have already come-the whole community is involved in the general calamity. It is only for the want of an adequate protective system. So long as an industrious and producing nation does not buy more than it sells, it is impossible it should be involved in general commercial distress-absolutely impossible in the nature of things. A nation of such resources and wealth as the United States, with such an enterprising population, can bear a great deal of loss in its foreign trade, and yet prosper. Think of seven hundred millions of loss in a half-century, as appears from the facts exhibited in chapters xxiv. and xxv. (see p. 402). This has been more than the nation could bear; and hence its frequent calamitous vicissitudes. Under an adequate and uniform protective policy, such disasters could never come. There can not be an effect without a cause. Such a country as the United States, which is a world in itself, and capable of producing everything essential to the complete and perfect independence of a nation, in articles of luxury as well as necessity, ought never, by the improvidence of legislation, to be in debt to other nations. There is no apology for it. It has sometimes been said that such a state of things comes from the fault of the people. But this will not answer, so long as the government permits the foreign factor-who is not a citizen, and who has no other interest than to make his fortune, and then carry the money away-to bring his goods and merchandise, without paying for the privilege; or, if he pays, pays nothing adequate to protect American citizens in the same business; and thus tempts jobbers, and jobbers tempt retailers, and retailers tempt the people, till the latter are in debt, which can only be discharged by a remittance through the same channels backward; and the foreign factor departs with the money of the people in his pocket. The parties concerned in all the stages of the trade, have doubtless profited by it; but the people are ruined, because their money has gone out of the country, and they have little or nothing left to pay other debts, and do business with.

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It is remarkable that all the commercial troubles of the United States have occurred under a system of low, anti-protective duties, as has been several times proved in the progress of this work; that the country has never prospered, except under a protective system; and that it has uniformly been most prosperous under the highest protective duties. These are historical FACTS. These fluctuations, from prosperity to adversity, and from adversity to prosperity, sometimes greater and sometimes less, in the history of the country, have been fully explained on the principles of the opposing systems of a protective and anti-protective policy, as having been graduated precisely as the one or the other of these has prevailed, the facts always harmonizing with the theory, that protection is favorable to prosperity, and the want of it unfavorable.

It follows, therefore, that nothing was necessary from the beginning of our history as a nation, to have secured uninterrupted commercial prosperity, and an uninterrupted sound currency, but a uniform and adequate protective system. The state of the currency, as has been seen, always agrees with the presence or absence of protection, and the reasons have been explained. What, then, would have been the state of the country at this moment, comparatively, in wealth, greatness, and power, if it had not been so repeatedly broken down for want of protection? The answer will be found in the history of any two men engaged in business, one of whom never failed, and the other of whom has failed many times. Look at the fortunes accumulated by Stephen Girard, of Philadelphia, by John Jacob Astor, of New York, and by many other men of the same class, who never failed. If any of them had broken down a plural number of times, as the United States have, by an impolitic change in their habits, by an experiment, as enterprising men they might still have mended their fortunes by correcting their habits, after each disaster; but they would never have attained to great wealth. Thus might the United States have become, even by this time, the richest, greatest, most powerful nation on earth, if it had established at the beginning, and maintained throughout, an adequate and uniform protective system. That it would, at least, have become greatly rich and greatly powerful, compared with its present condition, is as certain as that John Jacob Astor was a rich man. How can a man, or a nation, always engaged in a large and prosperous business, and never coming to bankruptcy, but ever going farther from it, fail to be rich? How can a man, or a nation, whose annual income is greater than the

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