either received or discharged at intermediate points between Albany and Buffalo; and that, although there is a new world open at the west since that time, and the amount of intercourse and business has become immense with the seaboard, yet, it is true at this moment, that the local business is still superior to the through business on that canal." The same, or like, is alleged of the passenger trade on the Hudson. From every point of the United States, where there are people, more start on business for five miles than for ten; more for ten than for twenty; more for twenty than fifty; and so on. This shows, that the great amount of home trade is imperceptible and incalculable.

It can not but be seen, that this internal and coasting trade-of which the facts cited in the note are only very limited and restricted examples-running on lines which cross each other at all points, making a complete network of the whole land, to facilitate exchanges, must be vastly comprehensive, and not less important.*

It will be observed, that we have said little of our sea-coasting trade, except in the case of Massachusetts. We have not the sources of information at hand. But it is a great trade-many times to one of all our foreign commerce, as evinced by the daily arrivals and departures of coasting craft in our ports. They come and go in clouds.

Adam Smith has well said on this subject: "An inland country, naturally fertile and easily cultivated, produces a great surplus of provisions beyond what is necessary to maintain the cultivators. Abundance renders provisions cheap, and encourages a great number of workmen [artisans] to settle in the neighborhood, who find that their industry can there procure them more of the necessaries and conveniences of life than in other places. They work up the materials of manufacture which the land produces, and exchange their finished work, or what is the same thing, the price of it, for more materials and provisions. They give a new value to the surplus part of the rude produce, by saving the expense of carrying it to the water side, or to some distant market; and they furnish the cultivators with something in exchange for it, that is either useful or agreeable to them, upon easier terms than they could have obtained before. The cultivators get a better price for their surplus produce, and can purchase cheaper other conveniences which they have occasion for. They are thus both encouraged and enabled to increase this surplus produce, by a better improvement and better cultivation of the land; and as the fertility of the land had given birth to the manufacture, so the progress of the manufacture reacts upon the land, and increases still further its fertility. The manufacturers first supply the neighborhood, and afterward, as their work improves and refines, more distant markets." In this way he goes on to account for the growth of all the manufacturing towns of England. Is not this remarkable doctrine for one who is relied upon for a system of economy directly the opposite of this?

But again he says: "The inland, or home trade, the most important of all— the trade in which an equal capital affords the greatest revenue, and creates the greatest employment to the people of the country," &c.—“A capital employed in the home trade, will sometimes make twelve operations, before a capital employed in the foreign trade has made one. If the capitals are equal, therefore, the one

The Hon. Abbott Lawrence, in a letter to the Hon. William C. Rives, of Virginia, dated Boston, January 16, 1846, says: “We [of Massachusetts], previous to the war of 1812, were an agricultural and navigating people. The American system [the protective policy] was forced upon us, and was adopted for the purpose of creating a home market for the products of the soil of the south and west. We resisted the adoption of a system, which, we honestly believed, would greatly injure our navigation, and drive us from our accustomed employments, into a business we did not understand. We came into it, however, reluctantly, and soon learned, that, with the transfer of our capital, we acquired skill and knowledge in the use of it; and that, so far from our foreign commerce being diminished, it was increased; and that our domestic tonnage and commerce were very soon more than QUADRupled."

will give four-and-twenty times more encouragement and support to the industry of the country than the other."

And yet again: "The greatest and most important branch of the commerce of every nation, it has already been observed [this is a great point in his work], is that which is carried on between the inhabitants of the town and those of the country. The inhabitants of the town draw from the country the rude produce which constitutes both the materials of their work and the fund of their subsistence; and they pay for this produce by sending back to the country a certain portion of it manufactured and prepared for immediate use. The trade which is carried on between these two sets of people, consists ultimately in a certain quantity of rude produce exchanged for a certain quantity of manufactured prodúce. . . Whatever tends to diminish, in ANY country, the number of artificers and manufacturers, TENDS TO DIMINISH THE HOME MARKET, THE MOST IMPORTANT OF ALL MARKETS, for the rude produce of the land, and thereby still further to discourage agriculture. Those systems, therefore, which, preferring agriculture to all other employments, in order to promote it, impose restraints upon manufactures, and foreign trade, act contrary to the very end which they propose, and indirectly discourage that very species of industry which they mean to produce."

This, as can not be denied, is pretty strong and decided. It is always safe to leave the argument for Protection in Adam Smith's hands, when he is going on in his natural way. He can not help speaking the truth, and the whole truth; though he does not seem to have felt himself in court, and under oath, to speak nothing but the truth. He had masters to serve, who fed and clothed him, as shown in another chapter, and for their great political designs, he was occasionally compelled, as may be believed, to violate his conscience, not less than his principles.

CHAPTER XXX.

THE EFFECTS OF A PROTECTIVE SYSTEM ON THE COTTON

GROWING INTEREST.

The Reasoning of a Secretary of the Treasury, on the Cotton-Growing Interest, considered. The Importance of this Interest as compared with others.-The "Forty-Bale Theory."-A Variety of instructive Statistics on the Cotton and other Interests of the Country. The Claims of the Cotton Interest, as being one of superior Political importance, examined.-The Profits of Cotton Growers and Manufacturers compared.-The Evidence of Mr. Clay and the "Southern Planter" on this Point.-Table of Prices of Cotton from 1790 to 1844.-A Protective System more important to the Cotton-Growing Interest than to any other.-A remarkable and decisive Mode of Proof.-Action of a Convention of Mississippi Cotton Planters on the Subject.

THE secretary of the treasury, in his annual report of December, 1845, said, "The cotton-planting interest suffers from the tariff [of 1842] in the double capacity of consumer and exporter." This theory will be easily apprehended by a perusal of the following extracts from a speech of Mr. CLAY, in the senate, February, 1832:

"It is alleged that the import duty is equivalent to an export duty, and falls on cotton. The framers of our constitution, by granting the power to Congress to lay imposts, and prohibiting that of laying an export duty, manifested that they did not regard them as equivalent. Nor does the common sense of mankind. An export duty fastens upon, and incorporates itself with, the article on which it is laid. But an import duty on a foreign article leaves the exporter of the domestic article free-first, to import specie ; secondly, goods which are free from the protecting duty; or thirdly, such goods as, being chargeable with the protecting duty, he can sell at home."

Again: "The case has been put in debate, and again and again in conversation, of the South-Carolina planter, who exports one hundred bales of cotton to Liverpool, exchanges them for one hundred bales of merchandise, and when he brings them home, being compelled to leave at the customhouse forty bales in the form of duties. The arrangement is founded on the assumption that a duty of 40 per centum amounts to a subtraction of forty from the one hundred bales of merchandise. The first answer to it is, that it supposes a case of barter, which never occurs. If it be replied,

that it nevertheless occurs in the operations of commerce, the answer would be, that, since the export of Carolina cotton is chiefly made by New York or foreign merchants, the loss stated, if it really occurred, would fall upon them, and not upon the planters.

"But, to test the correctness of the hypothetical case, let us suppose that the duty, instead of 40 per centum, should be 150, which is asserted to be the duty in some cases. Then, the planter would not only lose the whole hundred bales of merchandise, which he had gotten for his hundred bales of cotton, but he would have to purchase, with other means, an additional fifty bales, in order to enable him to pay the duty accruing on the proceeds of the cotton! Another answer is, that if the producer of cotton in America exchanged against English fabrics, pays the duty, the producer of the fabrics also pays it, and then it is twice paid. Such must be the consequence, unless the principle is true on one side of the Atlantic, and false on the other. The true answer is, that the exporter of an article, if he invests his proceeds in a foreign market, takes care to make the investment in such merchandise as, when brought home, he can sell with a fair profit."

When a doctrine or theory-for this is nothing but a theoryis proved absurd, as above, that is enough. No reasoning can stand before a plain, palpable absurdity, like this. The cottonplanter usually sells his cotton, out and out, to a New-York broker, or to a merchant somewhere, at the market price, puts the money in his pocket, and there it is. But this theory supposes it is not there. Or, that, by some unaccountable process, 40 per cent. of it is afterward abstracted. If the planter, having the money for his cotton once in his own desk, lets a part of it go, it must be his own fault. There is no such thing as barter in these transactions. The exporter of cotton pays the cotton-grower cash, and if he imports merchandise with its proceeds, instead of cash, it is because he expects more cash in the end, by profits on his imports, duties or no duties.

But admitting the truth and validity of the "forty-bale theory," or of what the secretary of the treasury calls "cotton suffering in the double capacity of consumer and exporter"—it would be hard to believe it—but admitting it, it has been demonstrated in another part of this work that protective duties in this country are not taxes, in the operation of the system, to any party or person; that protected articles of manufacture are generally cheaper in the aggregate always cheaper; and that the system relieves the people

from a heavy burden of foreign taxation. Then where is this "suffering," this loss to be found? It has vanished; it is turned into a positive gain, in all cases, and with all parties in the country-producers, consumers, buyers, sellers, exporters, and importers. And thus the whole theory falls to the ground.

It was on the basis of this theory that nullification rose in 1832 -disturbed the repose, and menaced the integrity of the Union. The South-Carolinians were made to believe that they were taxed millions a year, "in the double capacity of consumers and exporters." Mr. Clay, in his reply to General Hayne, in February, 1832, proved very satisfactorily, that, on their own principle, their tax, as a state, could not exceed $333,000, which was only about one third of their fair proportion of the public burden, when the revenue from customs was twenty-five millions. But even this burden is removed by the proof that protective duties are not taxes.

That the cotton-growing interest is one of great importance, both to the country and to the world, is evident enough; and those things which make it important to the world, all contribute to make it valuable to those concerned in it. But the following statement of the secretary of the treasury on this point, in his annual report for December, 1845, deserves a qualification and some abatement, in several particulars :

"Cotton is the great basis of our foreign exchange, furnishing most of the means to purchase imports and supply the revenue. It is thus the source of two thirds of the revenue, and of our foreign freight and commerce, upholding our commercial marine and maritime power. It is also a bond of peace with foreign nations, constituting a stronger preventive of war than armies or navies, forts or armaments. At present prices, our cotton-crop will yield an annual product of $72,000,000, and the manufactured fabric $504,000,000, furnishing profits abroad to thousands of capitalists, and wages to hundreds of thousands of the working classes, all of whom would be deeply injured by any disturbance, growing out of a war, to the direct and adequate supply of the raw material. If our manufacturers consume 400,000 bales, it would cost them $12,000,000, while selling the manufactured fabric for $84,000,000; and they should be the last to unite in imposing heavy taxes on that great interest, which supplies them with the raw material, out of which they realize such large profits."

The most impressive feature of the above passage, from the report of the secretary of the treasury, is the sympathy and concern