this may be the natural result of competition. But, in any case, the protective policy is favorable to prices. The more the United difference between selling and investing in England, and selling here, would be but $31,885,272, or about 85 per cent. more, by selling in the United States. "Let us contrast the effect of this foreign plan, as presented in the foregoing table, with the result of the American system of trade and commerce upon the same crop of cotton :— "Of a crop of 2,000,000 bales, say one fourth is consumed in this country, and three fourths in foreign countries: 500,000 bales, 210,000,000 pounds, worth in the northern markets February 1, 1844, at 10 cents....... $22,375,000 Expenses -- freights and shipments, coastwise, secured by law to Americans, and labor, &c., at 1 cent per pound......... 2,100,000 In southern ports for planters.. 20,275,000 1,500,000 bales sent to foreign countries, and sold at the same prices $69,690,000 Paid American shipowners, merchants, &c., for freight Paid foreign duties, dock dues, &c....................... .5,243,100-15,357,900 54,332,100 Net amount to planters for crop..... 71,607,100 Deduct amount of same crop received when disposed of upon foreign system. 37,474,728 Difference in favor of planters of the American over the foreign system 37,132,372 "Let us present the effect upon the whole country:"The 1,500,000 bales sold in Europe, including freight, &c., paid to Americans (if invested) in such merchandise as is required in the United States, will sell for enough to pay cost and charges, as follows: Sales of cotton abroad.. Less amount paid foreigners, duties, dock dues, &c..... $69,690,000 $64,446,900 Add charges abroad for purchasing, 2 per cent.. 1,288,936 65,735,836 Add freight and charges to United States, 7 per cent..... 4,930,187 70,666,623 Of this amount, say two thirds are dutiable goods, at 30 per cent. on Of which there would be to pay planters for net sales abroad.. 54,332,100 38,956,841 Deduct for charges in England..... 1,288,936 Leaving to distribute between the government, shipowners, laborers, merchants, &c..... 37,767,905 States go into the manufacture of cotton, so much more will it be necessary for the British manufacturers to push their work, and ply their commerce, to hold their own markets, and gain others. Their salvation and that of the British empire, depend on this. The competition between the British and American manufacturers, under a good system of Protection for the latter, can not be worth less, as shown by the "Southern Planter," than one to two cents a pound to cotton; and the quantity in demand will be constantly increased and increasing, on account of this competition. It is amazing that the cotton-growers should not have discovered this The 500,000 bales, manufactured in this country, would produce three times the value of the raw cotton. To pay planters in southern shipping ports... ..... $67,125,000 20,275,000 Leaving to distribute among laborers, mechanics, manufacturers, merchants, shipowners, and farmers... 46,850,000 "The entire value of the cotton crop, according to the American system, to wit: 500,000 bales manufactured...... $67,125,000 system, to planters.......... 37,123,672 To other Americans.. 83,053,742 By American system-Planters and other Americans receive, in total, $159,116,005 By foreign system-Planters and other Americans receive, in total, 38,937,591 Total difference in favor of American system to planters and others, $120,178,414 "If business had been encouraged, so that the increase of manufactures had kept pace with the production of cotton, we would now manufacture nearly or quite the whole crop, and produce an annual amount of $268,500,000 of these manufactures. "This business would not only have secured a certain market for our crop of raw cotton, but would have created a demand for agricultural productions for double the amount of all which we now export to all nations." before; but the following facts will show that they are beginning to see it now. A convention of one hundred and four cotton-planters in Mississippi, in 1845, passed a series of resolutions in favor of the protective policy, of which the following are extracts: "That they are in favor of the tariff of 1842, because it affords, as they believe, adequate protection to all kinds of domestic labor, and renders it independent, not only in name, but in fact; because it will induce, at the north, large investments of capital, and the employment of a large number of laborers, in the manufacture of cotton goods; that it will extend the consumption of manufactured articles, and thereby increase the demand for the raw material; that it will give the growers of cotton two markets, instead of one, and one of these a home market; because it protects indirectly the growers of small grain, and gives then a home market; because it protects indirectly the hemp-growers, and keeps the large amount of capital now invested in that business from being employed in the culture of cotton; because it protects indirectly the breeders of hogs, horses, and mules, and gives them a home market; because it protects the producer of sugar, gives him a home market, and prevents the vast amount of capital and labor invested in the culture of cane from being directed to the already redundant production of cotton; because all experience proves that its ultimate tendency is to reduce the price of manufactured goods, and thereby benefit consumers of all classes; because no one great interest of the country can be adequately protected, without in some degree extending protection to all other interests, and that none derive more essential benefit from the general prosperity of other pursuits than the cottongrower; because the interests of the manufacturers of cotton goods at the north are identified with the interest of the grower of cotton at the south, and that, as strength is added to these two great interests, the one at the north and the other at the south, so will strength be added to the bands which bind this glorious Union together." It is not to be supposed, with all the natural advantages for manufacturing which the south possesses, especially Georgia, that she will be long without being prepared to manufacture her own great staple, cotton, in the regions of its growth. She has already begun the work, and is advancing. Such a system will be an incalculable saving and gain to the south. But whether manufacturing is done there, or at the north, the south is benefited; but she will be more benefited when it is done at home, for the same reason that it is better to do it in the United States than to have it done abroad. CHAPTER XXXI. THE PRINCIPLES OF A TARIFF AS THEY RESPECT THE OBJECTS OF DUTIES AND THE MODES OF COLLECTING THEM. An American Economist of the present Time exposed to the Charge of Political Partisanship. He is obliged to examine public Measures as Facts-The Principles of the "Revenue Standard" examined-A Tariff not a Revenue Measure, except incidentally. The Customhouse System inconsistent with Free Trade-Direct Taxation and Free Trade go together-No such Thing as Incidental Protection.- Minimum Duties and their Effects-Specific Duties-Ad Valorem Duties.-History and Effects of these Different Modes of Duties.-Proofs in Point. WE are compelled, in many parts of our argument, to run the risk of being called a political partisan, though we have no interest in anything but truth. It is evident enough that public economy can not be separated from politics, when its very purpose is to establish a creed for statesmen. There is not a question that falls within its range that is not a question of state. It is also more pertinent to our argument, and more forcible, to notice things done, than to suppose things done; and the more recent they are, so much better are they known to all. The reader of the Free-Trade economists will always find hypotheses of facts as the instrument and ground of reasoning, which are framed to suit their purposes; but rarely does he meet with facts in those authorities as the basis of a theory. On the contrary, we resort to facts as the only ground of reliable deduction. Hence we are often forced into the midst of political events and agitations. Some of the more recent parts of the political history of the United States furnish facts for the economist, which it is impossible to overlook; or which, being overlooked, would be a great defect in his work. The questions which we have in hand imperatively demand, among other things, that we should review the measures and examine the doctrines of the administration which commenced its career on the 4th of March, 1845, so far as they relate to a protective system. In doing this, it becomes necessary to notice their official documents, and some of the acts passed at their recommendation, as we have several times done, but which we are obliged to do more at large in this chapter and the next following. The tangible points which they present, and the facts with which they are connected, antecedent and sub sequent, relating to a protective system, which, as opposed to Free Trade, is the leading and main topic of this work, present themselves in the foreground of that wide field which is the subject of our investigation. And here it is pertinent to remark, that, as matters go on, in the administration of the government of the United States, the utterances of the secretary of the treasury, in his report on the finances, are of course to be regarded as the echoes of the mind and will of the president; though, by the constitution and laws, the secretary is an agent of Congress, accountable to that body alone, should act in harmony with his legitimate masters, and in obedience to their instructions. This incongruity was established in 1833, when the president took charge of the treasury. As the report of the secretary of the treasury, of December 3, 1845, was made the basis of the tariff of 1846, in accordance with the views of the president (it is an echo of the message), an examination of the principles of the report will determine those of the new law. We proceed to consider what is called the "revenue standard," in the formation of a tariff. The secretary of the treasury of the United States, in his annual communication to Congress, December 3, 1845, seems to have made a discovery, to wit, that imposts laid for any other purpose than revenue are unconstitutional. He says: "The whole power to collect taxes, whether direct or indirect, is conferred by the same clause of the constitution. The words are The Congress shall have power to lay and collect taxes, duties, imposts, and excises."" Assuming, first, that "taxes" are identical with "duties and imposts;" next, that all duties are taxes; thirdly, that protective duties are either partially or entirely prohibitory; fourthly, that power is identical with duty, that is, a "power to collect" means shall collect; and fifthly, that a tariff of duties on imports is a mode of taxation for revenue prescribed by the constitution;-with such a string of assumptions, the secretary arrives, with self-plumed honors on, to the logical achievement that protective duties are unconstitutional. First, because protection is not authorized by that instrument. Next, because, if it were, when the duty amounts to prohibition, as it sometimes does, the duty can not be collected; or to a partial prohibition, as at least it must, a part of it can not be collected. Hence, none but duties imposed expressly and only for revenue can be constitutional. Unfortunately for the secretary, the first of the above-named as |