THE CREED OF FREE TRADE. BY DAVID A. WELLS. [REPRINTED FROM THE ATLANTIC MONTHLY FOR AUGUST, 1875.] The highest right of propeety is the right to fi.eely exchange it for other property. Any system of lawcs which delnies or restricts this right for the purpose of subserving private or class interests, reaffirms in effect the principle of slavery. Whatever jfucilitates or cheapens the interchange of commodities or services - good roads, the locomotive, the steamship or the telegraph — promotes abundance, and consequently the aggregate of human comfort and happiness. Whlatever on the other hand restricts or mcakes costly the exchange qf commodities or services - be it in the nature of bad roads, high mosuntains, tempestuous oceans, swamaps, deserts, or restrictive laws —tends to create scarcity, and consequently the aggregate of humanpoverty and discomfort. THE CREED OF FREE TRADE. THAT the question of free trade, as freeing of the exchange of all commodiembodied in opposition to the levying ties and services, between man and man, of taxes for any other than strictly rev- irrespective of residence or nationality, enue purposes, is to come before the from all arbitrary, artificial obstructions American people as one of the political and interferences resulting from legislaissues of the next presidential campaign, tion or prejudice. cannot be doubted. That no inconsiderable proportion of American manu- RELATION OF FREE TRADE AS AN facturers, as the result of recent hard ECONOMIC SYSTEM TO TAXATION experience, are furthermore likely at no AND REVENUE. distant day to unite in demanding an abandonment in our national fiscal pol- On this point there is no little popuicy of ultra protection as in itself de- lar misconception, which has, doubtless, structive of all protection, may also be been often intentionally encouraged by regarded as a matter reasonably certain.' a common assertion of the advocates of Under such circumstances, then, with protection, that " the adoption of free a view of aiding the average citizen, who trade as a national fiscal policy neceshas not given special attention to finance sarily involves a resort on the part of and political economy, to form in respect the state to direct taxation as a means to these questions an opinion which he of obtaining revenue." The truth, may soon have to express at the polls, it however, in respect to this matter is as is proposed here to present - without follows: The command of revenue being claiming originality for either language absolutely essential to the existence of or illustration - a simple statement of organized government, the power to the creed of free trade, as viewed from compel contributions from the people an American stand-point, and of the governed, or, as we term it, " to tax," is reasons for which its advocates seek its inherent in every sovereignty, and is recognition as a cardinal feature of our essential to its existence. So far, the future national fiscal legislation. advocates of free trade and protection fully agree. The former, however, mainFREE TRADE DEFINED. tain that in the exercise of this power the object of the tax should be rigidly Free trade in its fullest acceptation, restricted to the defraying of legitimate as recently defined by Chevalier, " is public expenditures, - or, in other words, the free exercise of human power and fac- that taxes should be levied for revenue utties in all commercial and professional purposes exclusively, - and that, sublife; it is the liberty of labor in its grand- ject to such limitations, the question as est proportions." In its more technical to what forms taxation would best asand present political sense, it means the sume becomes one of mere experience 4 The Creed of _Free Trade. and expediency; preference being al- dental protection is therefore a system ways given to those forms which in- which requires the consumers, who are volve the least waste, cost, and personal the people, to pay much in order that annoyance in collection, which are most the state may receive little. With these productive of revenue, and interpose preliminary statements, the essential the minimum of interference and restric- points of the aroument in favor of free tion on commercial intercourse. Free trade, as contradistinguished from protrade as an economic principle is not, tection, may be stated as follows:therefore, as is often assumed and supposed, necessarily antagonistic to the THE HIGHEST RIGHT OF PROPERTY. imposition of duties on imports, provided the end sought to be attained is The highest right of property is the simply revenue and the circumstances right to exchange it for other property. of the state render such form of taxa- That this must be so will at once appear tion expedient. Protection, on the other if it is remembered that, if all exchange hand, on the ground of advantages ac- of property were forbidden, each indicruing directly or incidentally, advocates vidual would be assimilated in condition and defends the imposition of taxes on to Robinson Crusoe on his uninhabited imports for purposes other than those of island; that is, he would be restricted to revenue. Protection, therefore, to the subsisting on what lhe individually proexact extent to which it attains its object, duced or collected, be deprived of all is obviously antagonistic to revenue, in- benefits of cooperation with his fellowasmuch as revenue is received only on men, and of all advantages of producthose commodities which come in, while tion derived from diversity of skill or diprotection is secured only when the irn- versity of natural circumstances. In the portation of commodities is restricted or absence of all freedom of exchange bemade difficult. tween man and man, civilization would obviously be impossible; and it would INCIDENTAL PROTECTION. also seem to stand to reason that to the degree in which we impede or obstruct The adjustment of a tariff for revenue the freedom of exchange, - or, what is in such a way as to afford what is termed the same thing, commercial intercourse, "incidental protection" - an idea much - to that same degree we oppose the favored by American politicians - is development of civilization. based on the supposition that by arranging a scale of duties so moderate as only TO RESTRICT EXCHANGES REAFFIRMS to restrict and, not prevent importations THE PRINCIPLE OF SLAVERY. it is possible to secure a sufficiency of revenue for the state, and at the same Any system of law which denies to an time stimulate domestic manufactures by individual the right freely to exchange increasing the price of competitive for- the products of his labor, by declaring eign products. That the double object that A, a citizen, may trade on equal thus aimed at is capable of attainment terms with B, another citizen, but shall cannot be doubted, but that the project not under equally favorable circumis also one of the most costly of all meth- stances trade with C, who lives in anods of raising revenue will become evi- other country, reaffirms in effect the dent if it is remembered that, while principle of slavery; for both slavery revenue to the state accrues only from and the artificial restriction or prohibithe tax levied on what is imported, an- tion of exchanges deny to the individual other tax, arising from the increase of the right to use the products of his labor price, is also paid by the nation upon all according to his own pleasure, or what that is sold and consumed in competition may seem to him the best advantage; or, with the foreign article. A tariff for in other words, the practical working of revenue so adjusted as to afford inci- both the system of human slavery and The Creed of Free Trade. 5 the system of protection is to deprive tries of the earth likewise exhibit great the individual of a portion of the fruits diversity as respects soil, climate, natuof his labor, without making in return ral products, and opportunity. It would any direct compensation. The argu- seem clear, therefore, in order that there ment that is generally put forth by pro- may be the greatest material abundance, tectionists in justification of legislation that each individual must follow that restricting freedom of exchange, or in line of production for which he is best defense of the pithily expressed propo- fitted by natural capacity or circumsition that " it is better to compel an stances; and that, for the determination individual to buy a hat for five dollars, of what that line shall be, the promptings rather than to allow him to purchase it of individual self-interest and experience for three," is that any present loss or are a far better guide than any enactinjury resulting from such restriction to ments of legislatures and rulers possibly the individual will be more than comrn- can be; and, finally, that the greatest pospensated to him indirectly, as a citizen sible facility should be afforded to proof the state. But this plea is the same ducers for the interchange of their several in character', and just as legitimate, as products and services. So true, indeed, that which was formerly put forth in de- are these propositions, that mankind in fense of the system of negro slavery, their progress from the rudest and most namely, that the system was really for incipient social organizations to higher the good of the persons enslaved, and decrees of civilization invariably act in that any deprivation endured by the accordance with them, and, as it were, slave for the good of society - meaning instinctively. Robinson Crusoe upon his thereby the masters — would be fully uninhabited island and the solitary setcompensated to him, through moral dis- tler in the remote wilderness follow of cipline, in the world to come. It is also necessity a great variety of occupations, to be noted that this same species of ar- as those of the farmer, hunter, builder, gument —.; e., indirect or future indi- blacksmith, fisherman, tailor, and the vidual or social benefit as a justification like. But as rapidly as the association for present personal restriction or injury of others in the same neighborhood ad-has always been made use of in past mits, the solitary man abandons his forages as a vindication and in warrant of mer diversity of employment, and depersecution on the part of the state for votes himself more or less exclusively to heresy or unbelief, and also of the estab- a single department of industry, supplylishment of state religions and enforced ing his want of those things which he conformity thereto. does not himself produce by exchanging tie surplus product of his own labor for THE ARGUMENT FOR FREE TRADE AN the surplus product of others' labor, who ARGUMENT FOR ABUNDANCE. follow different industries. It is to be further observed that settlements in all The general result for which all men new countries commence, if possible, in labor is to increase the abundance or di- close proximity to navigable waters, so minish the scarcity of those things which as to take advantage of natural faciliare essential to their subsistence, corn- ties for intercommunication between man fort, and happiness. Different individ- and man for the purpose of exchanguals are endowed with different natural ing services or commodities; and that capacities for making the various forces if commenced inland, one of the first of nature and varieties of matter avail- efforts of the new society is the conable for production.. One'man is nat- struction of a path or road which will urally fitted to excel as a farmer, an- enable its members to hold communicaother as a mechanic, a third as a navi- tion with some other settlements or sogator, a fourth as a miner, engineer, cieties. Next, as population and probuilder, or organizer and director of so- duction increase, the rude path or trail ciety, and the like. The different coun- gives way to a well- defined road, the 6 The Creed of PEree Trade. ford to a bridge, the swamp to a cause- gards the consumer, to the substitution way, the pack carried upon the backs of slow-sailing vessels of small tonnage of men and animals to the wagon drawn in the place of ocean steamers, or to by horses, the wagon to the railway-car, so widening the expanse of ocean to be the boat propelled by oars and sails to traversed that the time employed in the boat propelled by steam, and finally transportation (and the consequent inthe telegraph, annihilating space and creased cost of freight and risk) shall time; all efforts and achievements having be expressed by months rather than by the single object of facilitating inter- days. A few illustrations derived from communication between man and man, the actual experience of the United and removing obstructions in the way States are here pertinent to the arguof interchanging human services and ment. commodities. Free exchange between Upon the coast of Nova Scotia, within man and man -or, what is the same a short distance of the United States, thing, free trade — is therefore action there are coal- mines of great value, in accordance with the teachings of nat- which, unlike any others in the whole ure. Protection, on the other hand, is world, are located so advantageously in an attempt to make things better than respect to ocean navigation that almost nature made them. Free trade, or the by the action of gravity alone the coal interchange of commodities and services may be delivered from the mouth of the with the minimum of obstruction, by pit upon the deck of the vessel. Now, rendering commodities cheap tends to for years the government of the United promote abundance. Protection, by in- States imposed a tax on the landing of terference or placing obstructions'in the this coal within its territory, of one dolway of exchanges, tends to increas4 the lar and twenty-five cents per ton. But cost of commodities to the consumer, if we assume that coal upon a well-manand thereby promotes scarcity. Protec- aged railroad can be transported for one tion, effected by legislative restriction on cent per ton per mile, the effect of this exchanges, acts, therefore, in the same tax upon the people of New York and manner as all other things which ren- New England is precisely equivalent to der transportation onerous; or, in other a removal of these coal-mines of Nova words, it is an obstacle in the same Scotia from a point on the seaboard to sense as a bad road, a precipitous range a location one hundred and twenty-five of mountains, an intervening desert, or miles inland. But it would also seem a wide expanse of ocean abounding in to stand to reason that if the removal of risks to navigation; the general effect of these mines one hundred and twentyall which is to augment in various de- five miles into the interior was a benefit grees to consumers the difference be- to the people of the United States, a tween the producer's and the vendor's further augmentation of their distance prices of commodities. All the people from the seaboard to five hundred or a of the United States instinctively re- thousand miles would be a still greater joice at the announcement of every new blessing, and that their absolute annihidiscovery in the construction or propul- lation would be the superlative good of sion of vessels, whereby the time and all. cost of transporting commodities across Again, some years since an English the Atlantic from Liverpool to New engineer, Mr. Bessemer, devised a new York, or across the Pacific from China process for the manufacture of steel. and Japan to San Francisco, are dimin- He did not claim to make anything new; ished; and yet they do not revolt at the he did not claim to make steel of a qualinconsistency of imposing taxes, for pur- ity superior to what was made before; poses other than to meet the necessities but he did succeed in showing mankind of the state, on the landing of the com- how to make an article indispensable in modities thus transported; which taxes the work of production cheap, which are precisely equivalent in effect, as re- was before dear. Immediately on the The Creed of Free Trade. 7 assured success of the invention, the of similar American products The imadvocates of protection in the United mediate result of this will be that an States asked Congress to impose such a additional opportunity nmust in, conseduty on the import of this steel as would, quence be afforded to American citizens through a consequent increase of its desirous of following the occupations price to Americatn consumers, almost of coal-miners or transporters or steelcompletely neutralize the only benefit makers; and, the results of their labor accruing from the knowledge and use of and expenditure remaining in the counthe new process, namely, its cheapness, try, the national wealth will be thereby and they succeeded in obtaining, and augmented, whereas if the same amount still (1875) retain, a duty that in a great of labor and expenditure is diverted to, degree accomplishes such a result.'and takes place in, a foreign country, What this result practically has been the result will be exactly opposite. may be illustrated by stating that in In answer, now, to this, it may be 1872 the Michigan Central Railroad re- said, First, That the amount of conlaid its track at Detroit with steel rails sumption in the two instances, and concosting ninety-seven dollars (cold) per sequently the results of consumption, ton, while at a distance of half a mile will not be the same; for whatever in(across the Detroit River) the Canada creases the price of a useful commodSouthern Railroad was laying down the ity diminishes its consumption, and, vice same kind of rails at a cost of seventy versd, whatever diminishes the price indollars (gold) per ton. Will the reader creases consumption. Second, To adhere ask himself, who pays the tax thus mit the desirability of creating an opporlevied in perpetuity on this road, or, tunity of employing labor, through the what is the same thing, on the privilege agency of a tax on all consumers of coal of using it; and whether any correspond- and steel, to do work that would yield to ing benefit in perpetuity accFues from the same consumers agreater product of the tax? the same articles if performed elsewhere, From the above propositions and ex- or an equal product at less cost, is to amples it would seem evident that the admit that the natural resources of a direct effect of a protective duty, when country are so far exhausted that there'it is really operative, is to compel, on is no opportunity for the truly producthe part of the community employing tive employment of labor - an argument such an agency, a resort to more dif- which, however effective in overpopficult and costly conditions of produc- ulated countries, can have no possible tion for the protected article; and also application in a new country like the that when a community adopts the pro- United States, whose natural resources, tective policy it commits itself to the so far from being exhausted, are yet, as indorsement of the principle that the it were, unappropriated and unexplored. development and propagation of obsta- Again, a tax levied in pursuance of legcles is equivalent to, or the surest meth- islative enactment for the maintenance od of, developing or propagating riches of such labor is clearly in the nature of — a policy and a principle which, if log- a forced charity, while the petitioners ically and practically carried out, would for its enactment answer in every parlead to disuse of all labor-saving ma- ticular to the definition of the term chinery. "pauper" - namely, one who publicly The advocate of protection, however, confesses that he cannot earn a living meets this averment, as well as the ar- by his own exertions, and therefore asks gument embodied in the coal and Bes- the community to tax themselves or disemer steel illustrations above given, by minish their abundance for his support. saying that by prohibiting or restrict- Third, The only true test of the increase ing the importation and use of foreign of national wealth is the possession of coal and steel a demand will be created an increased quantity of useful things in for a corresponding additional quantity the agoregate, and not in the amount of 8 The Creed of _Free Trade. labor performed or the number of labor- had been imposed solely with a view to ers employed, irrespective of results. A obtaining revenue, and the farmer had tariff, from its very nature, cannot create bought imported salt, the extra bushel anything; it only affects the distribu- given by him would have accrued to the tion of what already exists. If the im- benefit of the state; and if the circumposition of restrictions by means of taxes stances of the government required the on imports enables a producer to em- tax, and its imposition was expedient ploy a larger number of workmen and and equitable, the act was not one to to give them better wages than before, which any advocate of free trade could it can be accomplished only at the ex- object. But in the case in question the pense of the domestic consumers, who tax was not imposed primarily for revpay increased prices. Capital thus trans- enue, as was shown by the circumstance ferred is no more increased than is money that imports and revenue greatly deby transference from one pocket to an- creased under its influence; and the salt other, but on the contrary it is dimin- purchased by the farmer in Chicago was ished to just the extent that it is diverted domestic salt, which had paid no direct from employing labor that is naturally or corresponding tax to the government. profitable to that which is naturally un- The extra bushel of wheat, therefore, profitable. which the farmer was compelled to give for his salt accrued wholly to the benPROTECTION IN REALITY DOES NOT efit of the American salt- boiler, and PROTECT. the act was justified on the ground that American industry, as exemplified in Herein, then, is exposed the fallacy of salt-making, was protected. And yet it the averment that duties levied on the must be clear to every mind that if the importation of foreign commodities pro- farmer had not given the extra bushel tect home industry. It may be conceded of wheat to the salt-boiler, he would that certain industries may be tempora- have had it to use for some other purrily stimulated, as the result of such du- pose advantageous to himself - to give ties, and that the producers may obtain to the shoemaker, for example, in exlarge profits by a consequent increase in change for a pair of brogans. By so the price of their products; but then, it much, therefore, as the industry of the is at the expense of those who pay the salt-boiler was encouraged, that of the increased price, who are always the do- farmer and the shoemaker was discourmestic consumers. aged; and, putting the whole matter in To further make clear this position, the form of a commercial statement, we the following illustration, drawn from have the following result: under the soactual American experience, is sub- called "protective system" a barrel of mitted: For a number of years subse- salt and two bushels of wheat were passed quent to 1860, Congress, with a view of to the credit of what is called " home protecting the American producer, im- industry," while under a free system posed such a duty on foreign salt as to there were a barrel of salt, tiwo bushels restrict the import and at least double of wheat, and a pair qf shoes. Protecthe price of this commodity, whether of tion, therefore, seeks to promote indusforeign or domestic production,'to the try at the expense of the products of American consumer. The result was, industry; and its favorite proposition, taking the average price of No. 1 spring that though under a system of restricwheat for the same period in Chicago, tion a higher price may be given for an that a farmer of the West, desirous of article, yet all that is paid by one is buying salt in that market, would have given to some other person in increased been obliged to give two bushels of employment and wages, has this fallacy wheat for a barrel of salt, which, without - namely, that it conceals the fact that the tariff,,he would have readily ob- the entire amount paid by the consumer tained.for one bushel. If, now, the tax would " in the long run " have been The Creed of Free Trade. 9 equally expended upon something and abandonment of protection, or even its somebody if the consumer had been al- abatement, would be ruinous; and in lowed to buy the cheap article instead all history not one case can be cited of the dear one; and consequently the where the representatives of an indusloss to the consumer is balanced by no try once protected have ever come foradvantage in the aggregate to any one. ward and asked for an abatement of "When a highwayman takes a purse taxation on the ground that protection from a traveler, he expends it, it may had done its work. Under this head the be, at a drinking-saloon, and the travel- recent experience of the United States er would have expended it somewhere affords a most curious and convincing else. But in this there is no loss in the illustration. Thus, in 1862-63, in order aggregate; the vice of the transaction is to meet the expenses of a great war, the that the enjoyment goes to the wrong government imposed internal taxes on man. But if the same money is taken every variety of domestic manufactures, from the travdlcr by forcing him to pay and in accordance with the principles of for a dear article instead of a cheap one, equity imposed what were claimed to he is not only despoiled of his just enjoy- be corresponding taxes on the imports of ment as before, but there is a destructive all competing foreign products. Soon process besides, in the same manner as after the close of the war, however, if the loss had been caused by making when the cessation of hostilities diminhim work with a blunt axe instead of a ished the necessity for such large revesharp one. Whenever, therefore, any- nues, the internal taxes were repealed, thing is taken from one man and given but in no one instance was there a proto another under the pretense of protec- tected manufacturer found who took any tion to trade, an equal amount is virtu- other position than that a repeal of the ally thrown into the sea, in addition to corresponding tariff would be most disthe robbery of the individual." astrous to his business. The tariff, as originally raised to compensate for the INFLUENCE OF PROTECTION NOT PER- new internal taxes, was therefore left MANENT BUT TEMPORARY. in a great degree unchanged. That the principle here laid down, of want of A further conclusion, alike deducible permanency in protective agencies, is from theory and proved by all experi- furthermore admitted by the protected ence, is that not only does protection to (American) manufacturers themselves a special industry not result in any benie- as a result of their own experience, is fit to the general industry of a country, also proved by the following striking but also that its beneficial influence on testimony, forced out under oath beany special industry is not permanent, fore a government commission from one but temporary. Thus, the price of no of the foremost of their number in 1868 article can be permanently advanced by - the late Oakes Ames, of Massachuartificial agencies, without an effort on setts:the part of every person directly or indi- Question. - What, according to your rectly concerned in its consumption to experience, was the effect of the inprotect and compensate himself by ad- crease of the tariff in 1864 on the invancing the price of the labor or prod- dustries with which you are specially ucts he gives in exchange. If sufficient acquainted? time is afforded, and local exchanges are Answer. - The first effect was to not unduly restricted, this effort of corn- stimulate nearly every branch, to give pensation is always successful. Hence, an impulse and activity to business; but from the very necessity of the case, in a few months the increased cost of no protective duty can be permanently production and the advance in the price effective. Hence, also, it is that pro- of labor and the products of labor were tected manufacturers always proclaim, greater than the increase of the tariff, and no doubt honestly feel, that the so that the business of production was 10 The Creed of Free Trade. no better, even if in so good a condition, which case domestic industry would be as it was previous to the advance of the stimulated and not diminished; or, not tariff referred to. producing more, we must obtain more in return, or, what is the same thing, a WILL FREE TRADE TEND TO DIMIN- higher price for what we already proISH THE OPPORTUNITIES AND RE- duce- a result manifestly conducive to WARDS OF DOMESTIC INDUSTRY? national prosperity. It would also seem to be in the nature of a self - evident Upon no one argument have the ad- proposition, that nothino under any cirvocates of protection relied more, in sup- cumstance can or will be imported unport of their system, than the assumption less that in which it is paid for can be that, if there were no restrictions on produced at home with greater final adtrade, the opportunity to labor created vantage. by protection and the results of the ex- Again, the favorite protectionist arpenditure of the earnings of such labor gument that, if trade is unrestricted would be diverted to other countries and the people of a country, under the to their benefit, and to the correspond- inducement of greater cheapness, are ing detriment of that country which, allowed to supply themselves with forneeding protection by'reason of a ne- eign commodities, the opportunities for cessity for paying higher wages or other the employment of domestic labor will industrial inequalities, abandons it; or, be correspondingly diminished, is an to speak more specifically, it is assumed argument identical in character with that if the United States were to adopt that which has in past times often led a policy of free trade, England would individuals and whole communities to supply us with cotton and metal fab- oppose the invention and introduction rications, Germany with woolen goods, of labor-saving or " labor-dispensing " Nova Scotia with coal, the West In- machinery. But, to sift thoroughly this dies exclusively with sugar, Russia with sophism, it is sufficient to remember hemp arid tallow, Canada with lumber, that labor is not exerted for the sake of and Australia with wool; that thereby labor, but for what labor brings, and opportunity to our own people to labor that human wants expand just in prowould be greatly restricted, and the portion to the multiplication of the means wages of labor be reduced to a level and opportunity of gratifying human with the wages of foreigners. Specious desires. If the wages of a day's labor as is this argument, there could not would purchase in the market one hunbe a greater error of fact or a worse dred times as much as at present, can sophism of reason. None of the com- any one doubt that the demand for the modities mentioned will be given by the necessaries and luxuries of life would be producers resident in foreign countries increased a hundred-fold? If the peofor nothing. Productfor product is the ple of this country could obtain the invariable law of exchange, and we can- products of the labor of other countries not buy a single article abroad, save for nothing, could the labor of the whole through the medium of something that world supply the quantity of things we must be produced at home. Hence the should want? In short, the demand for utter absurdity of that assertion which the results of labor can never be satisto protectionists seems pregnant with fled, and is never limited except by its such dreadful meaning, namely, " that ability to buy; and the cheaper things under free trade we should be deluged are, the more things will be purchased with foreign goods; " for if more should and consumed. Nothing, therefore, can be really imported under a free trade be more irrational than the supposition than under a protective policy, then one that increased cheapness, or increased of two things would take place: either ability to buy and consume, diminishes or we must produce more at home in order restricts the opportunity to labor. If by to pay for the new excess of imports, in the invention of machinery or the dis The C'reed of Free Trade. 11 covery of cheaper sources of supply the wages paid to its laborers. The realilabor of a certain number of individuals zation of such a result is hastened or rein a department of industry becomes tarded by whatever removes or creates superfluous or unnecessary, such labor obstructions or interferences in the way must take a new direction, and it is not of production and exchanges. Second. to be denied that in the process of re- The exports, on the whole, of any counadjustment temporary individual incon- try must and always do balance its imvenience, and perhaps suffering, may ports; which is equivalent to saying that result. But any temporary loss thus sus- if we do not buy we cannot sell, while tained by individuals is more than made neither buying nor selling will take place up to society, regarded from the stand- unless there is a real or supposed advanpoint of either producers or consumers, tage to both parties to the transaction. by the increased demand consequent on'Third. As a nation exports only those increased cheapness through greater ma- things for which it possesses decided adterial abundance, and therefore great- vantages relatively to other nations in er comfort and happiness. About the producing, it follows that what a nation time of the invention and introduction purchases by its exports it purchases by of the sewing-machine into Europe the its most efficient labor, and consequently benevolent people of a city in Germany, at the cheapest possible rate to itself. where the industry of needlewomen was Hence, the price paid for every foreign a marked specialty, formed an organi- manufactured article, instead of being zation to lessen in a degree the injury so much given for the encouragement which it was believed the use of the of foreign labor to the prejudice of our machine would inevitably occasion to own, is as truly the product of our own the poor by supplanting the necessity labor as though we had directly manufor their employment. After the lapse factured it ourselves. Free trade, thereof a few years, however, when society, fore, can' by no possibility discourage as represented by the whole people of home-labor or diminish the real wages the city, obeying their natural instincts, of laborers. had determined to have, and had obtained, a cheaper source of supply for DOES PROTECTION ENCOURAGE DIVERtheir needle-products than before, the SITY OF INDUSTRY? organization referred to found that their further existence was wholly unneces- The averment that prohibition or resary, inasmuch as the results of their striction of foreign imports encourages investigations showed that by reason of diversity of domestic industry is ana greater consumption of sewed goods, swered by saying that when any trade consequent on their cheaper supply, a can be introduced or undertaken for fismuch larger number of persons were cal or public advantage, private enterengaged in the operating of sewing-uma- prise is competent to its accomplishment. chines than formerly found employment " To ask for more is only to ask to have by the needle, and that wages had in- a finger in the public purse." It may creased rather than diminished. be possible to conceive of specific cases From these premises, therefore, the in which it might be politic for a governfollowing deductions may be regarded ment to give an advantage for a limited as in the nature of economic axioms: time and for a definite object. But proFirst. A nation or community can attain tection, as an economic system, cannot the greatest prosperity, and secure to its rightfully claim any support from such people the greatest degree of -material an admission, inasmuch as its demand is abundance, only when it utilizes its nat- that the public shall be obliged to supural resources and labor to the best ad- port all manufacturing enterprises upon vantage and with the least waste and loss, no other ground than that they cannot whatever may be the nominal rate of support themselves. 12 The Creed of Free Trade. spect either to construction, manageDOES PROTECTION TEND TO CHEAPEN ment, or product, and that "there is MANUFACTURED PRODUCTS? scarce any art practiced by our people so eminently progressive," which is " so Protection, it is alleged, has a tend- far fromn having reached perfection as ency to make what are termed manu- this one" of simple iron-smelting. factured products cheaper. A very fit and cogent answer which has been made DOES IT PAY TO EFFECT A REDUCTION to this assertion of the opponents of free OF PRICES BY ARTIFICIALLY STIMUtrade is, that if protection is to be rec- LATING PRODUCTION? ommended because it leads ultimately to cheapness, it were best to begin with It is here pertinent to notice an idea cheapness. Another answer is to be adopted by a school of American econofound in the circumstance that not a sin- mists or politicians, that it is for the gle instance can be adduced to show that advantage of a country to endeavor to any reduction has ever taken place in effect a reduction of prices by the creathe cost of production under a system of tion, through legislation or otherwise, protection, through the agencies of new of an excessive or artificial stimulus to inventions, discoveries, and economies, production. That the creation of an which would not have taken place equal- artificial stimulus to domestic production ly soon under a system of free trade; - such as is almost always temporarily while, on the contrary, many instances afforded by an increase of the tariff or can be referred to which prove that pro- by war, which necessitates extraordinary tection, by removing the dread of foreign supplies -does have the effect in the first competition, has retarded not only inven- instance to quicken certain branches of tion, but also the application and use of production, and subsequently to reduco improvements and inventions elsewhere prices through the competition engendevised and introduced. Thus, refer- dered, cannot be doubted; but experience ring to the experience of the United shows that in almost every such instance States, where the system of protection the reduction of prices is effected at the has in general prevailed for many years, expense or waste of capital, and that the it is a well-known fact that the depart- general result, in place of being a gain, ment of industry which has been distin- is one of the worst events that can hapguished more than any other by the in- pen to a community. Thus, the first vention and application of labor-saving effect of creatino an extraordinary domachinery is that of agriculture, which mestic demand is to increase prices, has never been protected to any extent; which in turn affords large profits to and for the reason that in a country those in possession of stock on hand or which raises a surplus of nearly all its of the machinery of production ready agricultural products for sale in foreign for immediate service. The prospect of countries it never can be. On the other the realization of large profits next imhand, in that department of industry mediately tempts others to engage in the engaged in the primary manufacture of same branch of production - in many iron, which has always been especially cases with insufficient capital, and withshielded by high restrictive duties, not out that practical knowledge of the deonly from foreign competition, but also tails of the undertaking essential to sefrom the necessity of the exercise of cure success. As production goes on, economy and skill, the progress in the supply gradually becomes equal to, and direction of improvement has been so finally in excess of, demand. The proslow that according to the report of the ducers working on insufficient capital or geological survey of Ohio (1871) there with insufficient skill are soon obliged, is hardly a furnace in that great iron- in order to meet impending obligations producing State that can be compared or dispose of inferior products, to force with the best English furnaces, in re- sales through a reduction of prices, and The Creed of Free Trade. 13 the others, in order to retain their mar- something which no man can estimate; kets and customers, are soon compelled but to which, more than to any other to follow their example. This in turn is one agency, the present remarkable infollowed by new concessions alternately dustrial depression of the country must by both parties, which are accompanied be attributed. The illustrations under by the usual resort of turning out articles this head afforded by the recent indusor products of inferior quality, but with trial experience of the United States are an external good appearance - slate be- very numerous, and are not surpassed ing substituted in the place of coal; cin- in curious interest by anything on record der in the place of iron; shoddy in the in the whole range of economic history. place of wool; starch and sizing in the The following will serve as examples:place of cotton; pasteboard in the manu- In 1864-65 it was found that the supfacture of boots and shoes in the place ply of paper of domestic manufacture of leather; and clay in the manufacture was insufficient to meet the consumption of paper in the place of fibre. And so of the country, and that the supply from the work of. production goes on, until abroad was greatly impeded by an ungradually the whole industry becomes usually heavy duty imposed in time of depressed and demoralized, and the weak- war on its import. The price of paper in er producers succumb, with a greater or the country accordingly rose with great less destruction of capital and waste of rapidity, and the profits of the paperproduct.. Affairs having now reached manufacturers who were then in postheir minimum of depression, recovery session of the machinery of production slowly commences. The increase of the became something extraordinary. The country causes consumption gradually to usual effect followed. A host of new gain on production, and finally the com- men rushed into the business and old munity suddenly becomes aware of the manufactories were enlarged, so that fact that supply has all at once become during the years 1864-66 it was estiunequal to the demand. Then those mated that more paper-mills were built of the producers who have been able to in the United States than during the maintain their existence enter upon an- whole of the twelve years previous. As other period of business prosperity; oth- a matter of course, the market became ers again rush into the business, and the overstocked with paper, prices fell with old experience is again and again repeat- great rapidity, many abandoned the ed. Such has been the history of the business through inclination or necessity, industry of the United States under the and many mills and much machinery attempt to restrict the freedom of trade were sold for less than the cost of conby high duties on imports, frequently struction; while in the spring of 1869 modified; and such also was the effect the paper-makers met in convention to of the war of 1861-65. To use a fa- consider the desirability of decreasing miliar expression, it has always been the production of paper — or, what is either " high water" or " low water " the same thing, of allowing their capital in the manufacturing industry of the and their labor to remain unemployed - country - no middle course, no stability. on account of the unprofitableness of the What the people have gained at one business. In October of the same year time from low prices as consumers they a storm of great violence swept over the have more than lost at another by the northern portion of the country, and in recurrence of extra rates, and they have the flood which followed, many mills enalso lost, as producers, by periodical gaged in the manufacture of paper were suspensions of industry, spasmodic re- so injured as to be temporarily incapable duction of wages, and depression of busi- of working. A leading journal in one ness. of the paper-manufacturing districts, deMeantime, the loss to the country from voted to the advocacy of protection, in the destruction of capital and the waste commenting on the effects of the storm, and misapplication of labor has been used this language: "There seems to 14 The Creed of Free Trade. have been unusual fatality among paper- based on insufficient capital were soon mills, but this disaster will work to the crushed out of existence; while life was advantage of those who escaped the preserved to the remainder only by the flood, and we doubt not that those that formation of a manufacturers' associadid stand will do a better business in tion for permanently limitinug producconsequence of the lessened supply;" tion; and in order that such limitation or, in other words, the condition of this of production and consequent breaking particular industry had become so bad down of prices might not be interfered through the influence of a fiscal policy with, the Kanawha wells (thb propriebased on the theory of protection that tors of which were not in the associathe occurrence of a great public calam- tion), with all their advantages, were ity, with a vast attendant destruction of leased for a term of years at a large property, had come to be regarded in annual rental, called " dead rent," and the lioght of a public blessing. all utilization of them suspended and Again, at Kanawha, Virginia, there forbidden. "Now had the duty on are remarkable salt-springs, some of salt," writes one of the leading memwhich furnish conjointly with the brine bers of the association, under date of an inflammable gas, which flows with December, 1874, " never been raised such force and quantity that it has been above the present rate, I have no doubt used not only to lift the salt-water into that the capital invested in the business tanks at a considerable elevation above would have been more profitable, and the evaporating pans, but also to sub- that the waste of the large amount that sequently evaporate the, brine by igni- has been uselessly invested would have tion under the furnaces; thus obviat- been prevented." ing the expense both of pumping and of fuel. During the war, in order to de- LAWS ESTABLISHING PROTECTION NECprive the army and the people of the ESSARILY UNJUST AND UNSTABLE. Southern Confederacy of a supply of salt, the springs in question, at Kana- One of the essential attributes of a wha, were rendered useless by the Fed- just law is that it bears equally upon all eral forces; which fact, coupled also subjected to its influence; and it would with the imposition of excessively high also seem clear that the general effect duties (over one hundred per cent.) on of an unjust law must be injurious. Now the import of foreign salt, gave to the a system of law imposing protective dumanufacturers of salt on the Ohio River ties must, in order to be effective, be such a market, that although the cost of partial and discriminating, and therefore manufacturing was nearly doubled, their unequal and unjust; for if a law could profits for a time were enormous; salt be devised which would afford equal that cost in 1868, at points on the Ohio protection to all the industrial interests River, twenty-three cents per bushel, in of a nation, it would benefit in fact no barrel, selling readily in Cincinnati for interest by leaving everything relatively forty-eight cents per bushel. The re- as before; or, in other words, the atsult was such an increase in the number tempt to protect everything would result of salt wells and furnaces on the Ohio in protecting nothing. River, and such an increase in the power Any system of laws founded on injusof production, that the available mar- tice and inequality cannot, furthermore, ket, deprived of the stimulus of the war, be permanent. The possibility that it was soon unable to take but little more may be further changed to meet the inthan one half of the salt that could be creased demands of special interests, and produced. As was natural, the price the instinctive revolt of human nature of salt under such circumstances rapid- against legal wrong and partiality, conly declined; and a struggle for existence tinually threaten its stability. Hence, among the manufacturers commenced. a system of industry built upon laws esThe furnaces built at war prices and tablishing protection through discrimi-' The Creed of PFree Trade. 15 nating taxes can never have stability of modity, and the persons who find its condition; and without such stability use indispensable are obliged to pay the there can be no continued industrial prescribed prices. The imposition of a prosperity. tax on the importation of such a comOn the other hand, one of the strong- modity into a country may compel the est arguments in behalf of freedom of monopoly, for the sake of retaining a trade is, that it makes every branch of market, to reduce its prices proportiontndustry independent of legislation, and ally; and in such cases the nation imemancipates it from all conditions affect- posing the impost may to a degree share ing its stability other than what are the profit of the monopoly.'But the natural and which can in a great degree price to the consumers is not diminished be anticipated and provided against. by reason of the import-duty, and the cases in which any interest has such a DO FOREIGNERS PAY A PORTION OF complete' control over the supply of a OUR TAXES ON IMPORTS? product as to enable it arbitrarily to dictate prices are so rare as hardly to renIt is often asserted, by the advocates der them worthy of serious consideration of protection, that a tariff on imports in an economic argument. " obliges a foreigner to pay a part of our taxes." To this it may be replied that THE PEACE AND WAR ARGUMENT. if there were any plan or device by which one nation could thus throw off Another powerful argument in favor its burden of taxation in any degree of free trade between nations is, that of upon another nation, it would long ago all agencies it is the one most conducive have been universally found out and rec- to the maintenance of international peace ognized, and would have been adopted and to the prevention of wars. The by all nations to at least the extent of restriction of commercial intercourse making the burden of taxation thus among nations tends to make men strantransferred in all cases reciprocal. If gers to each other, and prevents the the principle involved in the proposition formation of that union of material interin question, therefore, could possibly be ests which creates and encourages in true, no advantage whatever could ac- men a disposition to adjust their differcrue from its application. But the point ences by peaceful methods rather than itself involves an absurdity. Taxes on by physical force. On the other hand, imports are paid by the persons who it requires no argument to prove that free consume them; and these are not for- trade in its fullest development tends to eigners, but residents of the country make men friends rather than strangers, into which the commodities are import- for the more they exchange commodities ed. A duty on imports may injure for- and services the more they become aceigners by depriving them of an oppor- quainted with and assimilated to each tunity of exchanging their products for other; whereby a feeling of interdependthe products of the country imposing the ence and mutuality of interest springs duty, but no import-taxes will for any up, which, it may be safely assumed, length of time compel foreigners to sell does more to maintain amicable relations their products at a loss, or to accept less between them than all the ships of war than the average rate of profit on their that ever were built or all the armies transactions; for no business can per- that ever were organized. Of the truth manently maintain itself under such of this the experience of England and conditions. Where a nation possesses a the United States in respect to the complete monopoly of an article, as is Alabama claims is a striking example. the case of Peru in respect to guano, The moral and religious sentiments of and to a great extent with China in the the people of the two countries undoubtcase of tea, the monopoly always obtains edly contributed much to restrain the the highest practicable price for its com- belligerent feelings that existed previ 16 The Creed of Free Trade. ous to the reference of the claims to or in the nature of bad roads, high arbitration; but a stronger restraining mountains, impenetrable forests, trackelement than all, and one underlying less deserts, popular prejudices, or legal and supporting the moral and religious commercial restrictions, which impede influences, was a feeling among the great a free interchange of commodities and body of the people of the two nations services. In support of these positions that war, as a mere business transaction, two historical illustrations may be cited "would not pay; " and that the com- as evidence. merce and trade of the United States During the late civil war, the Confedand Great Britain are so interlinked and erate States, although deficient in almost interwoven that a resort to arms would all the so-called manufacturing indusresult in permanent and incalculable im- tries, with a population trained almost poverishment to both countries. exclusively to agriculture, and with all One argument, however, in favor of their main lines of intercommunication protection, which is said to take stronger with the external world blockaded, nerhold on the popular mind than almost ertheless managed to obtain at all times any other, is the asserted necessity of adequate military supplies for conductartificially stimulating by legislation all ing great campaigns so long as they manner of domestic industries, in order were able to pay for them, and finally that the country may not be dependent succumbed to the financial rather than to on other nations for martial requisites the physical power of their antagonists. in case of possible foreign war. The Upon this same point the example of first answer to this averment is, that Holland is also most instructive. From whatever may have been our condition the commencement of their existence as heretofore, the power of production at a nation, the Dutch not only made their present in the United States is so great, country an asylum for the oppressed of so varied,. and so permanently estab- all nations, but they took especial care lished, that it is hardly possible to con- that their trade, industries, and all ceive of a contingency in which the commercial exchanges should be " unnation could be inconvenienced by a fettered, unimpeded, and unlegislated deficiency of any material requisite for upon," and this too while all the rest of the carrying on of war, with the excep- the civilized world adopted a diamettion of the two commodities, gold and rically opposite policy. The result was saltpetre; and it will not be pretended that, though possessing a most restricted by any one that the domestic supply of *territory (about four hundred thousand either of. these articles can be advan- acres of arable land) and a limited poptageously increased by restricting their ulation (less than two millions), they importation. Second, with a vigorous, not only maintained their independence patriotic population, especially if the against the combined hosts of Spain, same be supplemented, as in the case of France, and Germany, but for a time England and the United States, with became the dominant naval power of the favorable natural conditions for defense, world. Though not raising a bushel of that nation, under our present civiliza- wheat, Holland became the best place tion, will be most invulnerable in war for Europe to buy grain; though she did which can incur and sustain the great- not possess an acre of forests, there was est and longest-continued expenditure, always more and better timber to be obor which, in other words, is possessed of tained in her ports than elsewhere; andthe greatest national wealth. But na- though she smelted no iron, and did not tional wealth increases in a ratio propor- raise a " sheaf of hemp," her fleets betioned to the removal of obstacles in the came the best that sailed the seas; and way of the development of trade, com- all because, to use the words of one of merce,. and all productive industries, her statesmen (Cornelius DeWitt, 1745), whether such obstacles be in the nature " she had the wealth to pay for these of an imperfect education of the people, commodities," and possessed this wealth The Creed of Free Trade. 17 because trade and all exchanges were consume, or to the cost of production. left unimpeded. Men of this class are generally rich beyond the average of the community, and WHY FREE TRADE IS NOT IMMEDIATE- therefore influential in controlling legisLY AND UNIVERSALLY ACCEPTED. lation and in determining fiscal policies; and it is but natural that in so doing But the question here naturally arises, they should consult their own interests If the above propositions in favor of free rather than the interests of the masses. trade are correct, and if the doctrine of The time, however, is soon coming, when protection is as false and injurious as it the people of the United States "will is represented to be, how happens it that wake as it were from a dream, and ask free trade does not at once meet with who it was that persuaded them that the universal acceptance? and how is the way to be rich was for everybody to give adherence of many men of clear intellect as much as possible for everything." and practical experience to the opposite doctrine to be accounted for? One of CONCLUSION. the best answers to these questions was given by the celebrated French econo- It only remains briefly to notice the mist Bastiat, in an article written many testimony of history in respect to the inyears ago, entitled That which is Seen fluence of free trade as an economic prinand That which is not Seen, in which ciple upon the development of nations he showed that protection is maintained and the progress of civilization. mainly by a view of what the producer In the earlier ages in Europe the pringains and a concealment of what the ciple that trade or commerce is mutually consumer loses; and that if the losses of advantageous, and that after every fair the million were as patent and palpable mercantile transaction both parties are as the profits of the few, no nation would richer than before, was not understood. tolerate the system for a single day. Pro- On the contrary, the generally accepted tection accumulates upon a single point theory among both nations and individuthe good which it effects, while the evil als in respect to trade was pithily emwhich it inflicts is infused throughout the bodied by an old proverb, " What is one community as a whole. The first result man's gain must be another man's loss." strikes the eye at once; the latter re- Commerce, therefore, it was assumed, quires some investigation to become clear- could benefit one country only as it inly perceptible. jured some other. In accordance, thereMankind also divide themselves into fore, with this principle, every state in two classes- producers and consumers, Christendom, in place of rendering trade buyers and sellers. The interest of pro- and commerce free, exerted itself to imducers and sellers is that prices shall be pose the most harassing restrictions on high, or that there shall be scarcity; the commercial intercourse, not only as beinterest of consumers and buyers is that tween different countries, but also as beprices shall be low, or that there shall tween districts of the same country, and be abundance. Every person will also even as between man and man. " Counat once admit that it is for the general try was accordingly separated from couninterest that there shall be abundance, try and town from town as if seas ran rather than scarcity. But in the case of between them. If a man of Liege came individuals controlling large agencies for to Ghent with his wares, he was obliged production, their interest as producers first to pay toll at the city's gate; then and sellers of large quantities of ca&m- when within the city he was embarrassed modities may be made greaterthan their at every step with what were termed interest as consumers, if by the aid of'the privileges of companies;' and if legislation the price of what they pro- the citizen of Ghent desired to trade at duce can be raised, by discriminating Liege, he experienced the same diffilaws, disproportionately over what they culties, which were effectual to prevent 18 The Creed of Ffree Trade. either from trading to the best advantage. the great war of England and Spain The revenues of most cities were also against Louis XIV. and his allies, Enin great part derived from the fines and gland, being able to dictate the terms, forfeitures of trades, almost all of which secured the adoption of a section by were established on the principle that which the citizens of Antwerp were forif one trade became too industrious or bidden to usetlhe deep water that flowed too clever, it would be the ruin of an- close by their walls; and it was further other trade. Every trade was accord- expressly stipulated that the capacious ingly fenced round with secrets, and the harbor of Dunkirk, in the north of France, commonest trade was termed, in the lan- should be filled up and forever ruined, guage of the indentures of apprentices, so that French commerce might not be-'an art or mystery.' " If one nation come too successful. saw profit in any one manufacture, all With the progress of civilization, and her efforts were at once directed to frus- the consequent diffusion of information, trate the attempts of other nations to the arbitrary restrictions on trade above engage in the same industry. She must noticed, which were formerly so common encourage the importation of all the raw in Europe, have almost entirely disapmaterials that entered into its production, peared, and men now wonder that any and adopt an opposite rule as respected benefit could ever have been supposed the finished article. At the close of the to accrue from such absurd and monsixteenth century England undertook strous regulations. But the change to a the woolen manufacture. By the 8th of more liberal state of things, thourgh conElizabeth the exporter of sheep was for stant, has been slow, and the policy of the the first offense to forfeit his goods for- Middle Ages, in the process of mlodificaever, to suffer a year's imprisonment, tion and extinction, gave place to the and then have his left hand cut off in so-called and more modern policy of a market-town on market-day, there to "protection," which, while clearly recbe nailed up to the pillory. For the ognizing the impolicy of interfering with second offense he should be adjudged a domestic exchanges, regards foreign trade felon, and suffer death. At a later pe- as something different from any other riod, in the reign of Charles II., it was trade, which it is for the interest of the enacted that no person within fifteen state to interfere with and regulate. But miles of the sea should buy wool with- under the same influences of a progressout the permission of the king; nor could ive civilization this system too, in like it be loaded in any vehicle, or carried, manner, is disappearing. except between sunrisino and sunsetting, In this work of progress Great Britain within five miles of the sea, on pain of took the lead in 1841; not from a change forfeiture. An act of Parliament in in popular sentiment due to better ac1678, for the encouragement of woolen quaintance with theoretical principles, manufactures, ordered that every corpse but from a realization, on the part of all should be buried in a woolen shroud. classes of the people, of the results which In 1672 the lord chancellor of England the recognition and practice of the policy announced the necessity of going to war of protection during a period of many with the Dutch and destroying their com- years had entailed upon the country. merce, because it was surpassing that of These results Mr. Noble, in his work, Great Britain; and even as late as 1743 Fiscal Legislation of Great Britain, thus one of England's greatest statesmen de- describes. "It is utterly impossible," dared in the House of Lords that "if he says, "to convey by mere statistics our wealth is diminishing, it is time to of our exports any adequate picture of ruin the commerce of that nation which the condition of the nation when Sir has driven us from the markets of the Robert Peel took office in 1841. Every Continent, by sweeping the seas of their interest in the country was alike deships and blockading their ports." By pressed: in the manufacturing districts the treaty of Utrecht, which concluded mills and workshops were closed and prop The Creed of _Free Trade. 19 erty depreciated in value; in the sea- der this liberal legislation the principal ports shipping was laid up useless in the manufactures of Belgium again sprang harbor; agricultural laborers were eking into existence. But a deep-rooted anout a miserable existence upon starva- tagonism between the Dutch and the tion wages and parochial relief; the rev- Belgians led to a separation of the two enue was insufficient to meet the national countries in 1830, when, mainly through expenditure; the country was brought to a hatred of the old government and its the verge of national and universal bank- policy, the previous free -trade legislaruptcy." England, therefore, as it were tion was repealed, and from 1830 to under compulsion, and with very grave 1855 high protective and discriminating doubts on the part- of many of her ablest duties were imposed on imports. But financiers and economists, under the lead in 1851 the finance minister in his place of Sir Robert Peel abandoned protection in Parliament declared that if this policy as the national policy, and gradually was continued it would prove the ruin adopted the opposite principle of free of the whole system of domestic industrade with all the world. The same try; and in 1855 the Parliament and the author above referred to, writing in people so fully acquiesced in his opinion 1865, draws the following picture of the that protection in Belgium was swept results of this change of policy based away at once and forever, and the duon the experience of near a quarter of ties on imports were arranged purely a century: "' It has rendered agriculture with a view to revenue. prosperous, largely augmented rent, vast- The examples thus set by Great Britly extended manufactures and employ- ain and Belgium have in turn been folment, increased the wages of labor, and, lowed in a greater or less degree by while securing the collection of an in- most of the other states of Europe, and creased revenue, has by improving the in no one instance where a relaxation value of property lessened the burden of of previously existing commercial retaxation. It has been shown, also, that strictions has once been made, and fairly each successive development of this be- tried, has there been any serious retroneficent legislation has extended these gression. results." In the United States, on the contrary, The experience of Belgium is even the principles of the protective system more instructive. During the French have since 1860 been reapplied, and are occupation of this country under the still maintained, with a deCree of rigidFirst Napoleon, the protective system ity and on a scale of magnitude which was carried out, practically and under have no precedents in recent commercial military rule, to a degree rarely if ever history. The general result has been equaled. Not only was the introduction (1875) to assimilate the industrial conof all foreign goods into the country dition of the country to the condition strictly forbidden, but all goods of for- of Great Britain in 1841 (before deeign production found within the state scribed), when the protective system were seized and burned, and the persons was from necessity abandoned. In concerned in their importation sum- place of effecting national industrial inmarily and severely punished. The re- dependence, or emancipation from nasult of such a system was that when tional dependence on foreign skilled the Dutch reassumed the sovereignty, labor, as it was confidently claimed that in 1814, the whole country had become the system would do, it has in fact prodesolated and to a considerable extent duced the exact contrary result; the depopulated. The Dutch, however, import of the products of foreign skilled brought in a new fiscal and commercial labor having greatly increased, while the policy, one cardinal feature of which export of similar products has comparawas a limitation of duties on imports to tively and absolutely diminished. The three per cent. on raw materials and six inability to export such products, moreper cent. on manufactured articles. Un- over, has practically limited the growth 20 The c(reed of Free Trade. of the so-called manufacturing industries excess of 200,000,000 tons. If we asof the country to the demand for domes- sutne each ton to be worth, on the avertic consumption, and forbidden any en- age, but fifty dollars, the value of the largement of them consequent upon the exchanges effected through the agency increasing ability and desire of other of the railroads of the United States in nations to consume, and the increased 1873 was in excess of $10,000,000,000; facilities for effecting international ex- or, in other words, the population of changes. As a further legitimate se- the country being 40,000,000, every quence, the commercial marine of the 4,000,000 of the people exchanged comUnited States has been all but annihi- modities among themselves, through the lated, as is shown by the fact that while agency of railroads, to the extent of in 1860 seventy-one per cent. of the $1,000,000,000. It is true that much total foreign trade of the United States of this freight was transported backwas carried in American bottoms, in ward and forward in different forms 1873 the proportion was less than thirty over the same routes, and did not all per cent. One of the most striking il- represent a direct movement between lustrations that could possibly be pre- the producers and consumers; but it is sented of the evil effect of commercial safe to assume that not a ton was transrestrictions in limiting trade and indus- ported a single mile except for the real try, and consequently national develop- or supposed advantage of the owner. ment, is to be found in the history of Now, on the North American continent the commercial relations between the there are about 4,000,000 of people United States and the British North inhabiting the British provinces, and American provinces. Thus, in 1852-53, 40,000,000 inhabiting the territory of in the absence of anything like commer- the United States. The line which sepcial freedom, the aggregate exchanges arates them is an imaginary or geobetween the two countries amounted to graphical one, and not a physical one, only $20,691,000. The subsequent year and were it not for commercial restrica treaty of reciprocity went into effect, tions arbitrarily imposed by the legislawhereby the people of the two countries tors of the two countries, men and comwere enabled to trade and exchange modities could pass as freely as they their products with little or no obstruc- now do between different sections of tion in the form of import duties. The the provinces or different States of the result was that the aggregate of ex- American Union; and yet these same changes rose the very'first year of the restrictions were sufficient in 1873 to operation of the treaty from $20,691,000 reduce the aggregate value of the comto $33,494,000, which subsequently in- mercial exchanges between the 4,000,000 creased, year by year, until it reached of people in Canada and the 40,000,000 the figure of $55,000,000 in 1862-63, of people in the United States, through and $84,000,000 in 1865-66. In this every variety of instrumentality, to the latter year the treaty of reciprocity was sum of $82,000,000; while, as before repealed, and restrictive duties again shown, every 4,000,000 of people on the became operative. The result was that United States side of the line, under the annual aggregate of exchanges im- the condition of perfect internal free mediately fell to $57,000,000, and in trade, effected exchanges between them1873, seven full years after the expira- selves through the agency of railroads tion of the treaty, when both nations alone, to the extent of $1,000,000,000. had largely increased in wealth and Suppose, now, these barriers to trade population, the decrease of trade con- between the United States and Canada sequent on the abrogation of the treaty had been taken down. How many had not been made good. Again, in wheels, spindles, hammers, cars, boats, 1873 the freight-meanino thereby com- engines, and strong human arms would modities - transported on the railroads in consequence have been put in moof the United States was probably in tion? and how much of the present in The Creed of _Free Trade. 21 dustrial and commercial depression in foreign nations as something very differthe United States would have been ob- ent from trade among themselves, which viated? should, therefore, be subjected to entireIt is also curious to note concerning the ly different laws and conditions. But a people of the United States, that so well slight examination ought, it would seem, satisfied are they of the principles of free to prove that foreign trade presents no trade when applied to domestic transac- element peculiar to itself, but only the tions, that they will not allow the crea- same elements which domestic trade pretion or maintenance throughout the whole sents, and that, consequently, the same of the broad territory they inhabit of the laws and conditions that are applicable slightest artificial obstruction to the freest to domestic exchanges are equally appliexchange of products or to thp freest cable to foreign exchanges. Men, morecommercial or personal movement; and over, do not engage in any trade, forthis, too, notwithstanding that the differ- eign or domestic, for mere enjoyment or ent States and Territories into which the pleasure, but for the material gain which country is divided differ among them- accrues to both parties. They desist selves in respect to wages of labor, prices from it also as soon as the mutual adof commodities, climate, soil, and other vantage ceases. The relation, then, natural conditions, as widely as the which government ought to sustain to United States as a whole differs from any the whole question of exchanges is well other foreign country with which it is expressed in the answer which the merengaged in extensive commercial inter- chants of France gave to Colbert more course. And yet we have the striking than a century and a half ago, when he and anomalous circumstance that a very asked their advice and opinion "how he large number - perhaps a majority - of could best promote commerce: " Laisthe American people regard trade with sez nous faire " (" Let us alone "). THIE ZEADING ITERAR Y MA GAZINE OF A MERICA. THE ATLANTIC MIONTHLY. Devoted lo Literature, Science, Art, and Politics. ESTABLISHED 1857. EVER since its foundation, in I857, the ATLANTIC MONTHLY has been the medium through which the ablest and best writers — the recognized leaders of American literature-have first offered their productions to the public; and many of the brilliant names which gave lustre to its earlier years are still associated and identified with it. The numbers for the present year have already contained poems by WILLIAM CULLEN BRYANT, HENRY WADSWORTH LONGFELLOW, JAMES RUSSELL LOWELL, JOHN GREENLEAF WHITTIER, The four greatest American poets, some of which rank among their finest efforts. Notably such are Mr. Longfellow's tribute to Charles Sumner, his charming poem on "Amalfi," and Mr. Lowell's grand odes read at the Concord and Cambridge Centennials. DR. OLIVER WENDELL HOLMES, whose "Autocrat of the Breakfast Table " graced the first numbers of the magazine, and helped to give it the reputation and popularity which it has ever since retained, has furnished several articles in his happiest vein, and contributions have also appeared from BAYARD TAYLOR, E. C. STEDMAN, C. P. CRANCH, T. B. ALDRICH, J. T. TROWBRIDGE, CELIA THAXTER, W. D. HOWELLS, R. H. STODDARD, ELIZABETH STUART PHELPS, And other favorite writers. MR. SAMUEL L. CLEMENS (" Mark Twain ") has contributed a series of felicitous sketches of " Old Times on the Mississippi," which have attracted great attention, and the novel of "Roderick Hudson," by HENRY JAMES, JR., which is running through the year, is pronounced the best production yet of that graceful writer. CHARLES DUDLEY WARNER has written characteristically of Travel on the Nile, and will publish other papers upon his Eastern experiences; while the important questions of Free Trade and Protection have been difcussed from opposite stand-points by DAVID A. WELLS and JOSEPH WHARTON. The list of attractions for I875 does not end here. In the August number was commenced a series of charming Autobiographical Papers by MRS. FRANCES ANNE KEMBLE, which are sure to have a wide popularity. COL. GEORGE E. WARING, JR., contributes to the September number the first of three papers on the " Sanitary Drainage of Houses and Towns," which are of great practical value. CHARLES FRANCIS ADAMS, JR., has prepared several important articles on Railroad matters, in which he is authority, and the first of these will appear in the November number. The same number will also contain the first chapter of a new American Novel by W. D. HOWELLS, whose previous stories ("Their Wedding Journey," "A Chance Acquaintance," "A Foregone Conclusion," etc.) have delighted such a wide circle of readers. Other contributions are expected from the writers first named, who have so long been identified with the ATLANTIC, and the four departments of Literature, Music, Art, and Education will be filled monthly, as heretofore, with vigorous editorial articles and reviews. The Publishers will spare no pains or expense to keep the magazine, where' it has always stood, AT THE HEAD OF AMERICAN LITERATURE. TERMS: Single or specimen numbers, 35 cents. Yearly subscription, $4.00,postagefree. Remittances by mail should be sent by a money-order, draft, or registered letter, to H. O. HOUGHTON & CO., Riverside Press, Cambridge, Mass. H. O. HOUGHTON AND COMPANY, cor. Beacon & Somerset sts., Boston. HURD AND HOUGHTON, I3 Astor Place, New York.