THE PAPER QUESTION.
LETTERS
TO THE
HON. SCHUYLER COLFAX,
Speaker of the House of Representatives.
PHILADELPHIA:
COLLINS, PRINTER, 705 JAYNE STREET.
1865.








THE PAPER QUESTION
LETTER FIRST.
DEAR SIR:The gentlemen connected with the press, publishers of books
and newspapers, have been for two years past, and are yet, engaged
in the performance of an act that, as it seems to me, closely resembles suicide; and it is because of my desire to open their eyes to the
fact that it really is suicidal in its tendencies, that I venture to
trouble you with the perusal of this letter.  Throughout by far the
larger portion of my life I was one among them, and although
many years have elapsed since I ceased to be connected with the
business of publication, the feeling of interest in those concerned in
it has remained wholly unimpaired.  It is, therefore, as an old
friend, late a co-laborer with themselves-a fellow-citizen having no
interest in the question except in common with all who are around
him-that to you, and through you to them, I propose to speak,
hoping that they may be disposed to reflect carefully on the views
that will be presented, and confidently believing that they may be
satisfied that their recent course of proceeding, however injurious it
may be to' the makers of paper, tends to the production of results
utterly destructive to themselves.
Most naturally they are anxious that paper shall be cheap, and
that their business may be large and profitable.  So am I, well
knowing, as I do, that it is to the universal development of intellect
among our people that we now stand indebted for the fact that this
Union has been maintained; and, that if we are to prosper in the
future it is in the direction of a further and more complete development of the national mind that prosperity must be sought.  To
that end, books and newspapers must be placed within the reach of
all, old and young, poor and rich, black and white.




4
Thus fully agreeing with them in the result at which we should
desire to arrive, I propose now to ask both you and them to look
with me to the measures by which it may be attained. To that end,
allow me now to ask the question-What are the circumstances
under which commodities of all kinds tend to become cheaper? Is
it not when and where there is competition for their sale?  What,
on the contrary, are those in which they tend to become dearer?
Is it not when and where there is competition for their purchase?
To these questions there can be but one reply, and that in the
affirmative.
What, now,.I would ask, has been the tendency of the action of
our publishing friends throughout the last two years? Has it tended
to promote the building of mills and the increase of competition for
the sale of paper?  As it seems to me, it has not.  On the contrary, as I propose to show, it has been in a direction exactly the
reverse of this.  If so, are not, then, they themselves the authors
of the grievances of which they now so much complain?  That
they are, I firmly believe, and equally firm is my belief that they
may be satisfied that such has been the case.  Should they be so,
then  may we once again see harmony established between two
great interests, each of which is so directly interested in the prosperity of the other that it is, as I am very certain, entirely impossible to injure either one without at the same time inflicting serious
injury on the other.  Break down the cotton-spinners, and the
weavers will soon cease to prosper. Break down the paper-makers,
and the printers will soon see their hands deprived of employment,
and their offices closed.
By the free-trade tariff of 1846, that tariff to which we are mainly
indebted for all our present troubles, the duty on paper was fixed at
30 per cent. By the ultra free-trade tariff of 1857 it was reduced
to 24 per cent.; but as the duties on all the raw materials of the
manufacture-soda ash, bleaching powders, rosin, felting, wirecloths, &c. &c.-were correspondingly reduced, the change was
really unimportant.
By the Act of 1861 paper was restored to the place assigned to
it by the free-traders of 1846, being subjected to a duty of 30 per
cent. The duties on raw materials were, however, largely increased,
and in some cases more than trebled.  Alum was carried up from
15 to 50 cents per 100 pounds, while bleaching powders were raised
from 4 cents to 30, and soda ash from 4 to 50. Such having been




5
the case, it may be regarded as certain that this most important
manufacture had not been allowed to profit in even the slightest
degree of the adoption by the Chicago Convention of Protection to
Domestic Industry as a part of the platform of principles upon
which the party was to stand for all the future. Of all the various
industries of the country, it was, as I believe, the only one that was
thus excluded, and yet, in all my intercourse since that date with
gentlemen interested therein, I have never heard the exclusion made
the subject of complaint. It was wrong, nevertheless.
At the date of the passage of that act the country had for several
months been so greatly agitated by the secession movement that
trade of all kinds was nearly at a stand. Competition for the purchase of paper had no existence; but the competition for its sale
had so greatly grown that the market price was below its actual
cost, while every foreign product used in the manufacture came to
the manufacturer burthened with the increase of duty to which I
have referred. This state of things continued throughout the whole
of the year 1861, and the change was afterwards but very slight
until towards the close of the summer of 1862. As a consequence
of this long-continued pressure upon their resources many papermakers became bankrupt, while throughout the country mills were
everywhere idle and unproductive.
Such was the state of things when, on the first of July, 1862,
Congress passed a law imposing a tax of 3 per cent. upon all the
paper made in the country, and a further tax of 3 per cent. upon
the incomes of all concerned in the making of it. A fortnight
later, with a view to retaining for the domestic manufacturer the
place, in reference to the foreign one, he previously had occupied,
the duties on imports were increased, and paper was raised from 30
to 35 per cent.  Thus far, therefore, the paper-maker continued
to be excluded from all share in the advantages derived by other
branches of manufacture from the great change of public opinion
that had been manifested by the most enthusiastic adoption of the
protectionist plank of the Chicago Platform.
Shortly after this the commerce of the country began most rapidly
to revive, and with that revival came a great increase in the demand
for paper. Then, and not until then, the paper consuming world
began to appreciate the effect on the supply of rags resulting from
the closing of Southern ports against the export of cotton. Cotton
goods were scarce and dear, and all were endeavoring to avoid their




6
purchase.  The old shirt continued to be used when, under other
circumstances, it would have gone to the paper-mill.  Cotton waste
was no longer to be obtained. Linens, too, had greatly risen. The
domestic supply of raw material was wholly insufficient for meeting
the now rapidly increasing demand, and prices rose with a rapidity
proportionate to the alarm excited among the paper-makers in reference to the power to keep their mills at work, and among the consumers in reference to obtaining at any price a full supply of paper.
Abroad, and for the same reason, prices had advanced, and to the
augmentation thus produced was here to be added the premium on
the gold with which to pay for the rags that might be thence obtained. To all this was further to be added the premium on the
gold required to pay for the alum, the bleaching powder, the felting, the wire-cloth, and other commodities needed in the manufacture.  Coal, of which there is required, as I am assured, pound for
pound of paper, and even more, had much increased in price, while
labor also had much advanced.
As a consequence of all these things the price of paper went
rapidly up, and to those manufacturers who had succeeded in stemming the tide in the past two years there opened up a prospect
of obtaining profits that might perhaps indemnify them for the
losses that had been sustained.  This was precisely the state of
things that should have been desired by the paper consumers, being
that which was needed for reopening mills that had been closed, for
promoting the building of new ones, for utilizing new materials,
and for thus stimulating all to increased competition for the sale
of paper. Instead of looking at it in this light, they at once raised
a cry of monopoly which was persevered in throughout the whole of
the ensuing session of Congress, until, just at its close, the duty on
paper was, most unfortunately for those who asked it, reduced to
20 per cent.  More unfortunate by far would they have been had
they fully succeeded, as they had asked an entire repeal of the duty,
the effect of which must have been that of closing nearly every
printing paper-mill in the country, and placing them entirely at the
mercy of European manufacturers.  Had they then succeeded, they
would this day be as clamorous for the re-establishment of protection as they now are for an extension of the free trade system.
The duty on printing paper had now been reduced to one-sixth less
than that at which it had been fixed by the ultra free trade tariff of
1857.  In the mean time raw materials of every kind had been




heavily taxed-paper itself had been taxed three per cent.-and the
incomes of the unfortunate people who had thus been placed under
the ban had been subjected to a tax of the same amount. Making
allowance for all these things the real duty, to which they could at
all look for protection, was not even one-half as great as it had
been under that ultra free trade tariff to which we had been so
largely indebted for the crisis of 1857 and for the ruin of so large a
proportion of the most useful portion of our people.
Why, however, it may be asked, should any protection yet be
needed? For an answer to this question I would beg, my dear sir,
to refer you to the following passage from a Report made but a few
years since to the British Parliament, every word of which is as
fully applicable to the trades in paper, glass, cloth, and chemicals,
as it is to that in iron:
"The laboring classes generally, in the manufacturing districts of
this country and especially in the iron and coal districts, are very
little aware of the extent to which they are often indebted for their
being employed at all to the immense losses which their employers
voluntarily incur in bad times, in order to destroy foreign competition, and to gain and keep possession offoreign markets.  Authentic instances are well known of employers having in such times
carried on their works at a loss amounting in the aggregate to
three or four hundred thousand pounds in the course of three or
four years. If the efforts of those who encourage the combinations
to restrict the amount of labor and to produce strikes were to be
successful for any length of time, the great accumulations of capital
could no longer be made which enable a few of the most,.wealthy
capitalists to overwhelm all foreign competition in times of great
depression, and thus to clear the way for the whole trade to step
in when prices revive, and to carry on a great business before foreign
capital can again accumulate to such an extent as to be able to
establish a competition in prices with any chance of success.  The
large capitals of this country are the great instruments of warfare
against the competing capital of foreign countries, and are the most
essential instruments now remaining by which our manufacturing
supremacy can be maintained; the other elements-cheap labor,
abundance of raw material, means of communication, and skilled
labor-being rapidly in process of being equalized."
The "great capitalists" here referred to are steadily creating
monopolies for themselves in Great Britain herself as well as in
foreign countries. When they supply foreign markets at less than
cost they do the same at home, and thus ruin the small capitalists




8
around them.  Therefore is it that the iron manufacture and the
ownership of mines are becoming from year to year more and more
concentrated in the hands of a few wealthy men, who hold quarterly meetings at which they decide how much coal shall be mined,
how much iron is to be made, and at what prices the two may be
sold. It is in the hands of just such men, immediate neighbors of
those above described, that the consumers of paper are now laboring to place the control of the supply of the commodity they so
much need. Whether or not it is in that direction they are to look
for that increase in the competition for its sale without which there
can be no reduction of prices, I leave it to you and them to judge.
Notwithstanding the reduction of duty that had taken place,
some few mills, as I am informed, were built in 1863. Others that
had been closed were once again opened, and had the paper consumers been willing to let the matter rest where it had been placed
by the act of March of that year, it is quite certain that the number
of new ones would by this time have been so largely increased as to
set at rest for all future time the question of supply. Had they
so acquiesced, the competition at the present moment would, as I
am well satisfied, be for the sale, and not for the purchase of paper.
The tendency of prices would have then been downwards.
That, however, they did not do. On the contrary, agitation for
the total repeal of the duty was kept steadily up, with no effect so
far as regarded the action of Congress, but with, to themselves, the
most injurious effect upon the public mind. Up to that time there
had still existed a strong belief that the necessity for revenue, and
the growing conviction that it had been to protection we had been
indebted for the power to pass through the great crisis of the rebellion, must suffice for making permanent the system that had been so
well established. Now, however, it came to be seen that there was
really no security, and that any one who should build a paper-mill
would do it with the sword of Damocles always suspended over his
head, and ever ready to fall.  How this has probably affected the
minds of hundreds of persons may be judged from a fact that is of
my own knowledge.  A  year since, one of my friends, a man of
large means, was preparing to make a great addition to the paperproducing power of the country, but of this idea he was entirely
cured by the action of the paper consumers during the late session
of Congress, and his works remain unbuilt. What is true of him




9
cannot fail to have been equally so of very many others similarly
situated. Capital has been abundant, but it has not gone in the
direction of mills for making printing-paper, nor will it do so while
the agitation shall be continued.  Capitalists are timid people.
They see that the paper consumers seem resolved upon killing the
paper producers, and are not yet quite ready to bow their heads to
the axe.
The agitation has now recommenced, and with redoubled force.
It may be that our friends who are so anxious for cheap paper will
this time succeed. If they shall do so, it is my prediction, and I
pray you to note it, that, ere long, they will regret it far more bitterly than will the men whose mills will then have been closed, and
who will then have been ruined. For a very brief period they may
have paper cheaper from abroad; but as by degrees the weaker
manufacturers are driven out of the business, the demand on Europe
will steadily grow, and with that growth there will be an increase
of the European prices that will make their paper cost them more
than now, and that increase will be a permanent one. Those
few among ourselves who can afford to stand aloof undil the work of
destruction shall have been accomplished will then step in and divide
with the European manufacturers the profits of the market. Quarterly meetings will then probably be held, at which it will be decided
what is the price at which the consumers of paper will be permitted
to obtain the supplies they need, and the latter will then discover
that they have exchanged the rule of the quiet king Log for that
of the active and energetic Stork, so well described by our old friend
2Esop. Few of them will now, probably, be disposed to believe
this, but they will realize its absolute truth should they this time be
so unfortunate as to succeed in the work in which they are engaged.
Unhappily for them, the damage will then have become irremediable.
To those who may doubt the correctness of the views thus
presented, I beg to recommend a consideration of the following
facts:Rags can be more cheaply brought to England, France, and Belgium than to these United States:
Labor is there abundant and cheap, while here it is scarce and
dear:
The field for the employment of labor throughout the South and




10
West is likely to enlarge with such rapidity as to cause that scarcity
and that dearness to continue for a long period of time:
Iron is cheaper abroad, and machinery may there be obtained at
greatly lower cost:
Felting, bleaching powders, alum, and all other of the commodities used in making paper, can be obtained free of the duty they
must pay on entering here:
Coal is cheaper, and steam is less costly:
Interest is there little more than half of what is paid by the
American manufacturer; andThere is there no excise duty of three per cent.
Such being a part only of the great differences between the two
sides of the Atlantic, can any reasonable man, proprietor of a newspaper, doubt that the "great capitals" of Europe will at once be
set to work to crush out American competition for the sale of this
great commodity, an abundant and cheap supply of which is now
more important than it has been at any period of our history?  If
any such there should prove to be, he would, as I think, only furnish
new evidence of the perfect truth of the idea, that "whom the gods
would destroy, they first make mad."
Were I owner of the Tribune, Post, or Ledger, and in that
capacity invested with full power to act for our friends of the Associated Press, the change that is now asked for should not be made
were the foreign manufacturers ready to pay into the treasury of that
association, to be distributed pro rata, according to their interests,
among the book and newspaper publishers of the country, thirty
millions of dollars.  Large as is this sum, I would reject it, and
for the reason, that it would be no compensation for the damage to
be done to the private interests of my associates, leaving wholly out
of view those of the country at large.
In regard to these latter, I will only call your attention to the
fact, that the day is close at hand when we shall have to provide
literary food for sixty millions of people, and that if they are to be
at all supplied it must be by means of measures that shall tend to
enable small manufacturers to accumulate capital and enlarge their
operations so as to increase the competition for the sale of paper;
and not by means of a present agitation which alarms the great
capitalist and prevents him from investing his means in this department of manufacture, to be followed by a British free-trade policy




11
that cannot fail to bring with it utter ruin to all the smaller capitalists already engaged in it.
Ten years since there was a similar agitation for the abolition of
duties on railroad iron.  It lasted several years, and, as I believe,
until the revulsion of 1857 had taught us the advantages of the
British free-trade system.  During all that time no one could be
found hardy enough to build either a mill or a furnace. After the
revulsion there was great depression, as a consequence of which the
consumption of iron in 1860 was scarcely, if at all, greater than it
had been a dozen years before, and yet the population had increased
more than forty per cent. But for that agitation, we should to-day
be producing thrice the quantity of iron that is now being consumed; we should be exporting instead of importing it; the demand
for gold would be less; and our people would be saving annually on
their purchases of that one commodity fifteen or twenty millions of
dollars. Just so will it be with our publishing friends. Their
agitation of the past three years has already thrown us back at
least one year. Let them now succeed, and they will throw themselves back twenty years, for then no one can ever again have the
smallest confidence in any change of system that may be made.
If paper-making is really very profitable, let them build mills and
thus promote competition for the supply of the market.  In this
way they will serve themselves and their country too. The introduction of new materials to take the place of the now deficient
cotton demands large investments of capital, but will in the end
greatly lessen the cost of paper.  Let them  supply that capital.
Pending the existing agitation others will certainly not do so.
Having thus shown what, as I think, they owe to themselves, I
propose in another letter to show what are the privileges they enjoy,
and what are the duties they owe to the community of which they
are a part. In the mean time, allow me, my dear sir, to ask you to
reflect for a moment on the moral of another well-known fable of./Esop, entitled "The Wind and the Sun."  The more the former
raged the more the traveller clung to his cloak, and the more
closely he wrapped it around his limbs. Seeing this, Mr. Wind
abandoned the effort, and made way for Mr. Sun, under the powerful
influence of whose beams the cloak was quickly laid aside. Our
friends have played the part of Wind for two years past, and with no
other effect than that of raising the price of paper. Let them now
take that of Sun-let them declare for a permanent peace-and




12
there will be more mills built in the next twelve months than have
been built in the past three years, or will be so in the next half
century if the war is to be maintained.
Begging you now to excuse this trespass on your attention, and
hoping that you may find in what I have written evidence of my
sincere anxiety for the prosperity of the great publishing interests,
I remain, my dear sir, with great regard and respect,
Yours, faithfully,
HENRY C. CAREY.
Hon. SCHUYLER COLFAX.
PHILADELPHIA, Dec. 24, 1864.




THE PAPER QUESTION.
LETTER SECOND.
DEAR SIR:
Hitherto, agitation in reference to the proposed repeal of the
paper duty has been carried on through the public prints. Now,
however, the course of operation seems to be entirely different, not
an editorial line in reference to it having yet met my eyes, with the
single exception of a brief article from the Evening Post, here
given for the reason that always in the past it has been, and now
is, my wish that our people should have the opportunity afforded
them of seeing all that could be said on both sides of the great
question of bringing the consumer to the side of the producer, and
thus relieving the farmer from the oppressive tax of transportation
to which he has so long been subjected.  Had the Post, and its
free trade brethren, followed the example, we might have been saved
much of the loss and trouble of the past four years.  The article
referred to is as follows:THE PAPER DUTY.-" The duty on printing paper was, we suppose, intended by those who laid it to produce revenue to the treasury.  Its only effect, however, is to put money into the pockets of
the American manufacturers.  The duty is twenty per cent., ad valorem; this is payable in gold, and it has made importation impossible.  It does this in the following way:"The manufacturers of printing paper here set their prices so as
to leave no margin of certain profit to the importer who must pay
a duty of twenty per cent., in gold, at the same time their profits
enable them, if necessary, to undersell and drive out of the market
with loss any one who should attempt to import.
" Printing paper sold for from nine to ten cents per pound before
the war. It is sold for eight cents per pound in Europe at this
time.  But in this country publishers are forced to pay for newspaper from twenty-four to thirty cents.  Take off the duty and it
can be imported for from seventeen to eighteen cents per pound,
currency; and at that price American manufacturers can still make
and sell at a fair profit.




14
"A duty which yields no revenue is an absurdity.  The present
twenty per cent. duty upon paper is prohibitory, its only use is to
take money out of the pockets of the public and put it into the
pockets of a few already wealthy manufacturers. Even the government pays tribute, under present arrangements, to these capitalists
for the immense quantity of paper it uses.  The present Congress
ought to remedy this wrong by repealing the duty on paper."
That what is here given as fact in regard to the cost of paper,
and the profits of paper-making, is wholly incorrect might readily
be shown, but I have no desire to annoy you with the examination
of little figures. It is greatly to the interest of the publishers of
both books and newspapers that the makers of paper should be so
well paid as to enable those who are in the business to extend their
works, while stimulating outside capitalists to employ their means
in erecting new ones; and if I could be assured that all were really
as herein stated, I should most heartily rejoice at it in the interest of
the paper consumers.  Let it be clearly shown that paper-mills
can be securely relied upon to yield ten, twelve, or fifteen per cent.
per annum, and we shall see more new ones commenced in the next
twelve months than have been started in the last decade. Let the
work of agitation be continued and there will not be even a single
one; and that, too, even if it prove, session after session for the
next ten years, to be wholly fruitless.  The capitalist will not,
with his eyes now fully opened, engage in a war with the Press.
If, then, the'monopoly here complained of be continued, our publishing friends will have only themselves to thank for it.
It is complained that the duty is prohibitory, and yet, making
allowances for taxes imposed since 1860, the protection afforded
is less than ten per cent.  If, at such a moderate rate, the foreign
traders of New York, admirable as they have always been in the
manufacture of false invoices, cannot import paper, there can exist
no shadow even of cause for complaint.  As it seems to me the
Post has proved rather too much.
What, however, are the privileges now enjoyed by that and other
journals? Do they at all savor of prohibition? Let us inquire.
Five years since there were two branches of industry that were
protected by means of absolute prohibition of foreign interference,
the production of negro slaves, and that of newspapers. The Virginia planter, anxious as he might be for free trade in iron, could
manufacture his corn into chattels for which he could obtain eight,




15
or even ten times the price at which similar machines could be imported from abroad.  Why was this?  Because Congress had prohibited foreign competition, and thus preserved to him the control
of the domestic market.  That branch of manufacture having,
however, been since abolished, there now remains but a single one
that profits by prohibition, and must, in all future times, continue
so to do-that one being the newspaper.
The Post, the Tribune, the Ledger, the North American, the
Transcript, and the Daily Advertiser, cannot be produced abroad.
Come what may-let us have war or peace, prosperity or adversity,
free trade or protection-they must still be manufactured in New
York, Philadelphia, and Boston.  The control of the domestic
market is thus secured to the domestic manufacturer, and by a law
that can never be repealed; and therefore is it that the consumer is
supplied with information at less cost than in any country of the
world. So will it be with paper whenever the consumers shall have
arrived at the conclusion that the law which has proved in their
own cases so very true cannot fail to prove equally so in regard to
the commodities in whose cheap production they are so deeply interested.
Not only have the proprietors of these and other journals a
monopoly of the general market of the country, as against foreigners,
but they have, each and all, their shares in a monopoly that is not
to be interfered with even by the domestic capitalist. To start a
new paper in New York, and to continue it long enough to secure
the circulation without which advertising cannot be obtained, is a
work that certainly cannot to-day be accomplished at a cost of
$250,000.  It might cost much more than this, and even then it
might prove a failure.  So clearly is this understood that the proprietors of existing journals now laugh to scorn the idea of danger
from future interference.
Perfectly secure, then, against both foreign and domestic competition, those gentlemen are enabled to throw upon the public all
of the burthen of which they now so much complain, the former
one cent paper being now sold for two, and the two cent one for
four-the difference being nearly the whole cost of the paper that is
used. A pound will give 18 sheets for the first and 10 or 12 for the
second, and thus the additional charge is little less than twenty cents
per pound.  In many cases it exceeds 25 cents per pound.  Such




16
paper may now, as I am informed, readily be bought for from  20
to 23 cents.
Turning next to advertising, we find New York journalists profiting of their absolute monopoly by charging nearly as much for the
insertion of a single line as formerly would have been charged for
that of a whole square. Forty cents per line is, as I am told, the
present charge of the Herald. In several of the weekly papers it is
from  $1 to $1.50 per line.  Surely the persons who make such
charges have little reason to complain of the present trivial duty
upon the one great commodity they so much need.
Secured thus, now and forever, in the enjoyment of one of the
greatest monopolies of the world, the selling price of interests in
these journals is wonderfully great.' Shares in several of them can
be sold, as I understand, at the rate of from three to five hundred
thousand dollars for the whole, the purchaser paying in addition as
much as may be considered the fair value of an equivalent share of
the machinery in use. Elsewhere larger sums would, as I understand, be demanded, and when we should reach the highest figure it
would probably prove to be little short of $800,000.
Let this now be compared with the value of the property that is
devoted to the production of printing paper, and then determine
which of the parties to this suit it is that has most reason for
complaint. There is not, as I am assured, and as I believe, a printing paper-mill in any of the Atlantic States that would sell for
more than the actual cost of the buildings and machinery, while
some, and even the best of them, may be had this day at much less
than the actual cost. If the profits of such concerns are really as
large as they are described by the Post to be, why do not the complainants purchase them and manufacture on their'own account?
For the simple reason that the making of printing paper, on an
average of the last half century, has been one of the worst paid pursuits in which a man could be engaged. It would be difficult, as I
believe, to find any one requiring as much intelligence and as much
capital in which so few have acquired fortunes.
On some recent occasion I have seen a statement of the wonderful
growth in prosperity of the Post itself, and unless I am greatly in
error in regard to the figures therein given, the mere good-will of
that paper, which has cost no man even a single shilling, would
sell for more than all the buildings and machinery of the largest
printing paper mill in the Union.




17
While presenting these facts I beg not to be regarded as at all
complaining of the prosperity of journalists. The more they prosper the more shall I rejoice, but not the less shall I object to their
complaining of a miserable little item of protection, while they are
becoming rich by help of AN ABSOLUTE PROHIBITION established by
nature herself, and not in any manner dependent on the caprices of
Congress.  The eagle suffers little birds to sing, and they, as I
think, may well afford to permit the poor paper-makers to live and
educate their children, even if they be not allowed to leave behind
them any fortune.
What is true of journalists is almost equally so in regard to the
publishers of books.  In former times Worcester, Albany, Poughkeepsie, Baltimore, Washington, and Richmond, competed with
Boston, New York, and Philadelphia, in this department of manufacture. Within these latter, too, there was a competition that
made it very dangerous to fix a book at too high a price. Gradually, machinery took the place of the human hand, and with every
such improvement the business of publication more and more centered itself in the three great cities, the reading public profiting,
by means of cheap books, of all the changes that were made. The
business grew, and with that growth came a division of employments; the various departments of literature obtaining each their
special representatives. With every step in this direction there
came a diminution of competition accompanied by a rise of price, the
result now exhibiting itself in this fact, that books are rapidly attaining the enormous English prices. At no time, as I am informed, and
as I believe, have profits been so large. If this is so, as it probably
is, surely the men who make them may permit their slaves to live.
They mast do so if they would continue to live themselves.  Close
the American paper mills, and most of them  will be closed if
Congress shall sanction the commission of the suicidal act that is
now proposed, and we shall not long continue to hear of 15, 20, 50,
and even as high as 100,000 dollars a year as the profit realized by
the publishers of a single magazine or a single newspaper.
The word slave has been used above, and most advisedly. Our
people are divided into two great classes, those who can, and those
who cannot, maintain direct commerce with the consumers of their
products.  The first constitute the privileged class vested with
power to control at their discretion the movements of the second,
these last "living, moving, and having their being" at the plea2




18
sure of their masters. The owner of the railroad fixes for himself
the terms on which he will permit the coal producer, or the traveller,
to use his road; and he adheres to his contract just so long as it
suits him, and not an hour longer. He interprets the words of his
charter to suit himself, well knowing that he is in the full enjoyment
of a monopoly, and that he can set at defiance all efforts at resistance.  It is through him, and him  alone, that the railroad iron
manufacturer draws his support from  the public at large.  He,
therefore, may meet his fellow managers for the purpose of determining in secret conclave exactly to what extent it may be safe to
grind the poor producers of wheat, cotton, coal, and iron; but let
the iron producers hold a meeting and at once a cry is raised of
combination to keep up prices and thus to rob the public, the aid
of Congress being then at once invoked for the punishment of men
who manifest such determination " to grind the faces of the poor."
The book publisher deals directly with the public, and he arranges
his prices to suit himself. Through him it is that the printer and
the binder deal with the world at large.  As a necessary consequence of this, the middleman builds a palace in which to transact
his business, and another in which to live; while the poor printer,
or the yet poorer binder, is forced to rejoice in the fact that he yet
obtains the means with which to educate his children and to clothe
himself.
The maker of writing paper deals, if he pleases, directly with the
outside world.  He may open a shop when and where it suits him,
as a consequence of which the stationer respects his rights.  He,
therefore, has been permitted to retain all the protection granted to
him by the tariffs of'61 and'62.
Widely different is the condition of the maker of printing paper,
for to enable him  to maintain commerce with the world, he must
have the aid of the publishers of books and newspapers. They are,
therefore, his masters. If he and his fellow-slaves meet together
to talk of their general interests, there is charge of "combination."
The book is doubled in price, its publisher thus forcing the consumer to pay all his taxes, with the usual profits thereon to himself, he himself, meanwhile, denying the right of the paper-makers
even to consult together on the propriety of adding to their prices
the simple amount of their contributions for the support of Government.
The publisher of newspapers, secure in the enjoyment of his




19
monopoly, cares nothing about tariffs.  The world may complain
as it likes when he doubles, trebles, or even quadruples the charge
for advertising, he well knowing that, like the collector of railroad
tolls, or steamboat fares, he has but to ring his bell to have them
all " step up to the captain's office and settle." Of all the privileged classes of the country he is the man who is most secure. If
his hands turn out he calls on the public for aid in his contests with
them, and forthwith, as has recently been seen in Boston, men of
all classes come to his assistance. If, however, the poor papermaker be found seeking to obtain some small compensation for a
year or two of loss, he flies to Congress, talks of "combination
prices," and insists that, while he himself enjoys entire and absolute protection in the domestic market, his unhappy dependent
shall be at once deprived of the little that has yet been left. Fully
secured in the enjoyment of his privileges, he rejoices when the world
is told that the value of the mere good-will of his establishment
counts by hundreds of thousands of dollars, while denouncing as a
monopolist the poor serf who furnishes him with paper, and who
would gladly sell to him at cost, the mill in which it is accustomed
to be made. He is, however, quite too wise to purchase.
A story is told of an old contraband that may be worth repeating here, as it tolerably well illustrates the positions of the parties.
Corn being scarce while he had a large litter of pigs to feed, he was
heard calling on Heaven to send the time when corn should be at a
shilling a bushel and pork at two shillings a pound. The governing
class having now put up their own pork to two shillings, are most
anxious to reduce the price of their neighbor's corn. The road,
however, in which they are travelling leads in another direction, as
they will be sure to find if they shall continue on it until they reach
its end.
Throughout the whole range of this highly privileged order of
beings there is none that has more steadily than the Post talked of
freedom; none that has more persistently cracked the whip over
the dependent class to which I have referred, producers of fuel, machinery, and paper-hewers of its wood and drawers of its waterthe men without whose services it could not live itself for even
another hour.  That such should continue to be the case now that
the Government has become dependent for its existence on the internal revenue is greatly to be regretted, and I cannot but hope
that at no distant time the editors of this journal may come to see




20
that it is in efficient protection we are to find the true and only road
towards freedom of trade and freedom for man.
Before closing this letter allow me to ask your attention to the
following paragraph telegraphed last week, by the Associated Press
as I suppose, to numerous Northern journals:"COST OF PAPER.-The Superintendent of Public Printing reports to the Ways and Means Committee a deficit of five hundred
thousand dollars in the appropriation for the purchase of paper.
When the last appropriation was made, the contract price for book
paper was eighteen cents a pound. Mr. Defrees's estimate was upon
that basis. Congress subsequently imposed a heavy tariff on paper.
Paper-makers rushed into a combination and raised the price of
paper to the amount of the duty. The Government is now paying
from thirty-one to thirty-seven cents per pound for what previously
cost eighteen to twenty-one cents. The Treasury is receiving no
revenue from paper, because none is importid, the duty being prohibitory."
Allow me now, my dear sir, to ask you to answer to yourself if
the manufacture of statements such as these does not furnish evidence of conscious weakness on the part of those by whom they
have been written.  The man who made this paragraph well knew
that the rise of which he spoke had been mainly due to the fact
that a severe drought had, during several months, diminished by
one-half the producing power of a large portion of the Northern
paper-mills, but of this he has said not even a single word. He
knew, too, that so far from  Congress having "imposed a heavy
tariff on paper," the last Acts of that body relating to this branch
of manufacture had been the increase of taxes on domestic products,
and the reduction, by nearly one-half, of the duties on foreign ones.
The article is throughout utterly inaccurate, yet is it given to the
world in the columns of journals edited and published by gentlemen
who would feel themselves much aggrieved were we, in regard to
private matters, to question their character for strict veracity.  It
is, however, but a repetition of the story of The Wolf and the Lamb,
so well presented to us by our old friend.Esop. Determined to
crush out his poor slave the master holds him responsible for all
the accidents that have, in the last few months, diminished the supply, while adding to his own charge as much as covers nearly the
whole cost of the paper that is used.
In presenting these views of a great question that has now, as I
think, to be definitively settled, I am animated by no feeling of un



21
kindness towards any of the interests to which reference ias been
made.  What I do desire is to awaken all to a clear conception of
their mutual dependence.  When that conception shall have been
fully reached, but not till then, a settlement of all the difficulties
may be made on terms that should be satisfactory to all, and certainly
would be advantageous to both the people and the government.
The proclamation of emancipation did much towards bringing about
the entire extinction of negro slavery throughout the continent, but
it was not until the 8th of November last that the people affixed to
it the Great Seal of the Republic. The Chicago proclamation of
emancipation for the white slaves of the North by means of efficient protection was but the preparation for that great measure.
The Great Seal had yet to be affixed, and the time has now arrived
for doing it.
What is the manner in which this vitally important result is to
be attained I propose to show in another letter, first, however,
noticing the suggestions of the Post in reference to the very important question of revenue.
Meanwhile, I pray you, my dear sir, to accept the assurance of
the sincere regard and respect with which I remain,
Yours, faithfully,
HENRY C. CAREY.
Hon. SCHUYLER COLFAX.
PHILADELPHIA, Dec. 26, 1864.




THE PAPER QUESTION.
LETTER THIRD.
DEAR SIR:Among the characters personated by the elder Matthews, in his
admirable monologues, was one of an old angler who was bitterly hostile to the introduction of steam navigation on the ground
that steamers "frightened the fish."  Nearly akin to this, in its
philosophy, was the idea of Mr. Walker, suggested in one of his
Reports, that protection was injurious to the nation, and for the
reason, that as domestic competition grew, prices declined with
corresponding decrease of importation and of customs revenue.
In his eyes the real saving of millions by the people was no sufficient offset to the apparent loss of thousands by the Federal Government.  The loss had no real existence, the demand for sugar, tea,
coffee, and a thousand other articles having always grown with a
rapidity proportioned to that of the decline in the price of pins,
needles, knives, and cotton. Following in the same direction the
Post, participant in one of the most profitable monopolies of the
world, assures its readers that "a duty which yields no revenue is
an absurdity"-that it is " prohibitory"-that "it takes money out
of the pockets of the public and puts it into the pockets of a few
wealthy manufacturers," and that " Congress ought to remedy the
wrong by repealing the duty on paper."  Not a word, however,
does it say about that natural prohibition which secures to its own
proprietors the control'of the domestic market for news, and gives
to the mere good-will attached to its name a money value greater,
probably, than that of any paper-mill in the Union, with all the
land, the buildings, and the machinery of which it is composed.
Nominally, the duty on printing paper is 20 per cent.; really, it
may perhaps be 15, but is more likely to be only 12-. Admitting,
however, that the foreigner pays into the treasury 15 per cent., let
us now compare that with what we know to be contributed for the




23
support of Government by the domestic manufacturer, and thus
enable ourselves to judge of the expediency of moving in the direction indicated by the Post.
The latter pays, in direct tax, three per cent. of the market value
of his products. This was paid, in the last fiscal year, upon more
than $22,000,000, and the amount received by the treasury, from
all descriptions of paper, was $663,447. All experience shows that
taxes become more productive as assessors come more and more
to understand their duties, and there is therefore good reason for
supposing that the yield will, in the present fiscal year, be much increased.  To this let us now add the tax on incomes, late three
per cent., but now five, to be paid by "already wealthy manufacturers," who would gladly accept, at the hands of the certainly wealthy proprietors of the Post, cost for all their works.
Next, add the taxes on all the steam, bricks, lumber, and iron required for the erection of buildings, or for keeping them in repair.
Further, add the amount paid as duties on soda ash, bleaching
powders, alum, felting, and other commodities used in the manufacture. Again, let us add the tax on coal, of which it requires,
even where water-power is used, more than pound for pound of
paper, and much more when steam-power is required. Putting all
these now together we shall probably reach ten per cent., giving a
sum exceeding two millions of dollars as the direct contribution of
this single branch of manufacture towards the payment of our
troops, and the discharge of interest on our debt. This large sum
it is that the treasury is required to relinquish in order that the
Post may, free of all such charges, buy its paper in Belgium,
France, or England.
The sacrifice thus far demanded by our publishing friends would
appear to be quite large, and yet it is but a portion of that which
really is required. The number of persons employed in the paper
manufacture is stated at not less than 50,000. Putting their wages
at an average of only $5 a week, we have $13,000,000. Of this, in
the form of taxes on tea, coffee, sugar, &c. &c., there goes into the
treasury probably $1,000,000, and thus do we obtain a total of
$3,000,000 that we must relinquish in order that the British and
Belgium manufacturer may be enabled to expel from our mills this
large and interesting portion of our population.
We may be told, however, that these poor people, if driven from
the mills, will find other employment. What is likely to be the




24
nature of that employment may perhaps be inferred from the following extract from a circular issued by one of the charitable associations of New York, bearing date a year and a half previous to the
occurrence of the great free-trade crisis of 1857:"Up to the present, the Association has relieved 6,922 families, containing 26,896 persons, many of whom are families of unemployed mechanics and
widows with dependent children, who cannot subsist without aid. As the
season advances the destitution will increase. Last winter it was thrice
as great in January as in December, and did not reach its height until the
close of February."
It is in this state of things that immigration tends to die away,
and here we find another of those sacrifices that we must make in
order that our publishing friends may be enabled to buy their neighbor's corn cheap while selling their own pork at monopoly prices.
What are the circumstances under which immigration grows, and
what those under which it declines, I propose now to show, believing a full understanding of them to be essential to a proper
understanding of the tendencies of the movements now in progress.
The first tariff really protective of the farmer in his efforts for drawing the consumer to his side, thereby relieving him from the oppressive
tax of transportation, and from the slavery incident to a dependence
on foreign markets, was enacted in the year 1828, and began, as we
may reasonably suppose, to make itself in some degree effective in
1 830. In the decade prior to this latter year the total immigration
had amounted to 120,000, giving an annual average of but 12,000.
Protection making demand for labor with large increase of wages,
the effect soon exhibited itself in a larger import of persons who
had that commodity to sell, and the immigration of 1830 amounted
to 27,000. In the four following years it went steadily up until,
in 1834, it had reached 65,000.
By the Compromise tariff of 1833 it was provided that protection
should be gradually diminished until, in 1842, the country should
be replaced under a free trade despotism more complete by far than
that which had existed prior to 1828. As a consequence of this,
factories and furnaces ceased to be built, and the whole energies of
the country were given to the construction of roads and canals, by
means of which its products were to be enabled to reach the distant
market.  Its credit stood very high, the few years of the protective
policy that had just then closed having enabled the government, in
1835, to pay off the last remaining portion of the public debt.




25
Loans were therefore readily negotiated in Europe, and for a brief
period there existed a glare of prosperity well calculated to deceive
those who could not appreciate the great fact, that the raising of
raw products for distant markets tended to exhaustion of the soil,
and was the proper work of the barbarian and the slave, and of those
alone.
Three years only of the free trade system were required for producing the crisis of 1837, to be followed by the crash of 1839, and
the almost universal bankruptcy of 1841 and 1842.  During all
this period immigration was of the most fitful kind, rising as moneys
were borrowed abroad and roads were commenced at home, and falling as bankruptcies grew in number and half finished roads were
left to go to ruin; but its annual average, notwithstanding the large
extension of internal communications, scarcely exceeded the figure
it had so rapidly attained in 1834, having been only 67,500.
The two first years of the highly protective tariff of 1842, gave
an average of 81,000.  Thenceforward immigration grew steadily
until, in 1847 and 1848, it reached an average of 234,000, having
thus almost trebled in that brief period.  The effects of the free
trade tariff of 1846 were just then beginning to be felt. Mines
thenceforward ceased to be opened, and mills and furnaces ceased to
be built. Labor was everywhere in excess of the demand, and immigration must rapidly have declined had not the discovery of Californian gold opened up a new branch of industry, calculated to
operate largely on the minds of the miners and laborers of the
world at large.
The gold received at the United States Mint for coinage, in 1849,
amounted to $9,000,000, or more than had been received from  all
the world in the six years from  1837-42.  In 1850 it reached
$32,000,000, and in the following year it rose to $62,000,000. Immigration grew therefore rapidly, giving for the four years succeeding 1850 the following figures:1851...  408,000             1853... 401,000
1852...  397,000             1854...  460,000
Up to that time gold washing had been very profitable, but thenceforward it became from year to year more clearly obvious that a
continuance of the gold supply was to be obtained only by means
tending to render the laborer a mere machine to be used by the
capitalist.  The demand for men for California was therefore at an




26
end, while that for the Atlantic States and the Mississippi Valley
tended steadily to decline, because of the constantly growing excess
in the supply of labor consequent upon the closing of mills, furnaces,
factories, and machine shops. Hence it is that the succeeding years
furnish us with the following diminished quantities:1855... 230,000            1858..... 149,000
1856... 224,000             1859.... 155,000
1857... 271,000            1860.... 179,000
Small as are these figures, they would probably be diminished not
less than 25 per cent. were we furnished with those that would be
required for enabling us to ascertain the numbers of the disappointed
who returned to Europe, or who left California to seek fortune in
the more attractive gold deposits of Australia. At no period in the
history of the country, as I believe, had the average rate of interest
been so high as in the four years above referred to. At none had
there been so great a tendency to decline in the reward of the laborer,
and hence it was that immigration so rapidly declined.
The Southern rebellion having at length emancipated the North,
protection was re-established by means of that Morrill tariff, so much
denounced by the Post; that tariff to which we are indebted for
the fact that all Europe is now so largely engaged in manufacturing
machines of the most valuable kind, to be presented to us, in free
gift, by those who make them. While compelling us to give gold
for silks and cottons, the nations beyond the Atlantic are willing to
give us men and women who can not only spin and weave, but who
can make the machinery by means of which spinning and weaving
may be done, and at the same time reproduce themselves.  Of all
foreign products, they are the most costly and most valuable, and
they are to be obtained at the cheap price of the steady pursuit of a
policy that will make a market close to the farmer's door, and thus
treble the price of his land.
Under the Morrill tariff system, immigration in the last year, as
shown in the records of the State Department, rose to 200,000, but
to this must be added at least 50,000 who had been attracted from
the British provinces, and of whom no record had been kept. In
the present year there has been a large increase, and from both
those sources; but we are not yet in possession of all the figures required for enabling us to give them with any approach to accuracy.
Let us, however, go ahead with the protective system; let us mani



27
fest a fixed determination to bring the consumer close to the producer's door; and the day will not then be far distant when the
numbers of foreigners seeking to take their place among us will be
as much in excess of those of present years as were those of 1847
in excess of 1842.
Protection looks to producing competition for the purchase of
labor, and for that of the rude products of the farm, and therefore
does it tend in the direction of freedom.  British free trade seeks to
produce competition for the sale of both, and therefore is it that,
throughout the present war, it has shown itself the faithful ally of
the men who teach that slavery is the natural condition of the
laboring man, whether black or white.
The more numerous the mills and furnaces the greater is the
competition for the sale of paper, cloth, and iron, the greater is
the tendency towards reduction of their prices, the greater is the
competition for the purchase of labor, and the larger, as has here
been shown, is the number of persons who come here to aid, by the
consumption of sugar, tea, coffee, paper, cloth, and other commodities, in the maintenance of that great domestic revenue to which the
Government must in future look for payment of its annual expenses,
and for the ultimate redemption of its bonds.  Half a million of
such persons coming here, and earning on an average but five dollars a week, would receive an aggregate of wages amounting to
$130,000,000. Ten per cent. paid on this to the Government would
be $13,000,000. The Post would shut them out, it being an "absurdity" to maintain on the statute book a law imposing a duty
whose only effect was that of causing foreign workmen to come
here and labor in our mills, eating our own food and wearing our
own cloth, when men could be found abroad who might, perhaps,
supply paper, iron, and cloth more cheaply, but certainly would
apply their wages to the purchase of the food of Germany, France,
or England, while contributing annually more than a tithe of their
earnings to the support of foreign governments.  The more such
people came here, the smaller would be the tax of transportation
paid by the farmer, the greater would be the value of his land, and
the larger would be the amount of his contributions for the support
of both the State and Federal Governments.  How many would
come under the system now advocated by the Post?
But a few years since that journal told its readers that "it would
be better for all of them [the sewing women] in the long run, to




28
reduce wages to the famine point, so as to force all who had sufficient strength into other employments." Now, it would close the
door to them in reference to that "other" one which makes demand
for so much female labor, the manufacture of paper.  Seeking
some new "employment" they might, perhaps, find it in bleaching
shops, where they would be required to compete, wholly unprotected,
with British men, women, and children, who are, as shown in Parliament, obliged to work 16 to 20 hours per day, and under a temperature so high that not unfrequently "the nails in the floors become heated and blister the feet of those employed in the rooms,
usually called wasting shops, because of the extraordinary cost of
life of which they are the cause." How much could our people,
subjected to competition with such as here described, contribute
towards the hundreds of millions of internal revenue of which we
now stand so much in need?  Not very much, as I think.
It is time that those gentlemen should awaken to the fact that
there is a harmony in all the real and permanent interests of the
various portions of society —the paper maker and the publisherthe farmer and his customers-the people and their government.
When they shall do so they will, as I think, arrive at a proper
comprehension of the present "absurdity" of admitting foreign
paper at a duty of less, probably, than a sixth of its real value, and
the still greater one of freeing the foreign manufacturer from all
contributions for the support of government, while taxing our own
to the extent of probably ten per cent.
At the moment of writing this I find in one of our city journals
a paragraph; copied from the Post, denouncing in regard to matches
the precise policy it has itself so steadily advocated as that required
to be pursued in reference to paper.  It is as follows:
"Those (matches) made in the country are taxed, by stamps, over
two hundred per cent. on the cost of manufacture. But at the same
session a tariff act has been passed imposing a duty, quite nominal
in comparison, on foreign matches. Now, Mr. Stevens's act expressly provides, that (section 169) when any imported articles
requiring stamps shall be sold'in the original and unbroken packages' in which they were packed by the manufacturer, no penalty
whatever shall be incurred by selling them without stamps! Of
course, manufacturers in Canada and Europe have only to pack
their goods in one or a few boxes, for family use, and they save the
tax. Match factories were at once removed into Canada, and fortunes have been made in five months' recess of Congress by simply




29
adopting the means which our law took pains to provide for defeating its own objects and ruining our own manufacturers."
If it is wrong to "ruin our own manufacturers" by taxing their
matches while admitting those of Canada duty free, can it be right
to tax home-made paper while admitting free that furnished by the
great capitalists of Europe? It seems to me that it cannot, but I
shall be glad to hear the argument of the Post in its defence. There
will, as I think, be more consistency in the movements of that journal
when it shall have arrived at the conclusion that protection is the
true and only road towards perfect freedom of trade.
In my next I propose to show what are, as they appear to me,
the duties of all of us who desire to see the Government sustained
not only throughout the war, but after peace shall again have
visited our land, meanwhile remaining, my dear sir,
Most respectfully yours,
HENRY C. CAREY.
Hon. SCHIUYLER COLFAX.
PHILADELPHIA, December 29, 1864.




THE PAPER QUESTION.
LETTER FOURTH.
DEAR SIR:A few months since a bank of the New York Canal was swept
away for an extent of many miles, as a consequence of which navigation upon that work was suspended, as I think, during several
weeks. The disaster was at the time attributed to the operations of
an active and industrious rat who had burrowed into the canal,
thus making way for a column of water to pass in the direction
from which he had come.  At first very small, it rapidly increased
in size and force, and finally produced the disaster to which I have
referred.
Precisely such an operation as this it is that is now going on in
reference to the question of protection to the farmer in his efforts
for drawing the consumer to his side, and thus relieving him from
the present terrific tax of transportation.  The first rat-hole was
made in March,'63, when the paper-makers, after having been subjected to an infinity of taxes, were deprived of all the protection,
little as it was, that had been granted to them by the tariff of'61.
The second was made at the last session of Congress, when the
taxes on home-made iron were almost doubled, while the duty on
railroad iron was largely diminished.  The hole made in'63 is
now to be widened by means of the total repeal of the duty on
paper. That accomplished, the opponents of the Government will
find themselves emboldened to new efforts, and day by day we shall
see the rat-holes increase in number and in size, until at length the
whole work will be swept away, and with it all chance of any permanent maintenance of the Union, or of any future payment of its
debts.
The managers of the great combination that is now engaged in
the performance of a work regarded by the British people as so




31
essential to their future greatness-the making of the rat-holes to
which I have referred-are to be found among the men who have
furnished the ships and men by which the blockade of Southern
ports has been evaded; those who have fitted out the pirate ships
by means of which the flag of the Union has been almost entirely
driven from the ocean; those who have, in and out of Parliament,
systematically endeavored to destroy the credit of our Government
while vilifying our people; and those who see in the continued
maintenance of the Union the writing on the wall which warns
them that the day is close at hand when the people of Europe will
demand for themselves that exercise of the privilege of self-government of which they have been so long deprived. They themselves,
as well as their mode of operation, are so well described in the
passage from a recent Parliamentary Report already cited, that I
cannot refrain from reproducing it on this occasion, believing, as I
do, that it should be read day by day, night by night, month by
month, and year by year, until all our people, male and female,
young and old, had become thoroughly penetrated with the conviction, that the British proceedings of the past four years had been in
perfect harmony with all those of the previous half century, and
that if they would not be made mere " hewers of wood and drawers
of water" for British capitalists, they must learn to combine among
themselves for the adoption of measures of resistance. It is as
follows:"The laboring classes generally, in the manufacturing districts of
this country, and especially in the iron and coal districts, are very
little aware of the extent to which they are often indebted for their
being employed at all to the immense losses which their employers
voluntarily incur in bad times in order to destroy foreign competition,
and to gain and keep possession of foreign markets.  Authentic
instances are well known of employers having in such times carried
on their works at a loss amounting in the aggregate to three or four
hundred thousand pounds in the course of three or four years. If
the efforts of those who encourage the combinations to restrict the
amount of labor and to produce strikes were to be successful for any
length of time, the great accumulations of capital could no longer
be made which enable a few of the most wealthy capitalists to
overwhelm all foreign competition in times of great depression,
and thus to clear the way for the whole trade to step in when prices
revive, and to carry on a great business beforeforeign capital can
again accumulate to such an extent as to be able to establish a competition in prices with any chance of success.  The large'capitals
of this country are the great instruments of warfare against the




32
competing capital of foreign countries, and are the most essential
instruments now remaining by which our manufacturing supremacy
can be maintained; the other elements-cheap labor, abundance of
raw material, means of communication, and skilled labor-being
rapidly in process of being equalized."
Two centuries since, England sent her wool and her corn to the
people of the countries on the Rhine, and took her pay for them in
cloth and iron. To her it was a most unprofitable trade. To the
Germans it was a most profitable one; so profitable that all Germany wondered at the stolidity of a people who could tolerate its
continuance.  " The stupid Englishman," as then was said, " sells
the skin of a rabbit for a sixpence, and buys back the tail for a
shilling." That, my dear sir, is precisely what we have so long
been doing-selling cotton at three pence a pound, and buying it
back at a shilling an ounce; and giving a bushel of corn for half a
dozen pence, the pence themselves to be paid in the form of ounces
of corn combined with pennyweights of the three-penny cotton.
That sort of taxation it is that " the great capitalists" of England
-the men to whom we are indebted for the prolongation of the
war, for the expenditure of hundreds of millions of treasure, and
the destruction of hundreds of thousands of lives-are determined
shall be maintained in all the future.
What are the measures by the aid of which it is that they propose
to compel us to its maintenance?  To obtain an answer to this
question, it is needed that we study a little of the history of the
past.  British free trade had, in 1842, so far impoverished our
people that they were wholly unable to contribute to the support
of Government, as a consequence of which many of the States had
been driven to repudiation, and the National Treasury had become
utterly bankrupt. That state of things it was which gave us, in
the passage of the Protective Tariff act of 1842, a new Declaration
of Independence.  Under it, in less than half a dozen years, there
was produced a change such as, to that date, had had no parallel in
the history of the world. In that brief period the consumption
of coal, iron, and lead was trebled, while that of wool and cotton
was doubled. Furnaces and mills were built, labor was everywhere
in demand, immigration grew with great rapidity, the public revenue
became larger than was needed for meeting all the wants of Government, repudiation passed away, and prosperity once more reigned
throughout the land.  That, however, not suiting the "great capi



33
talists" above referred to, proprietors of British furnaces and British
mills, large sums were raised in 1846, to be so used here as to
bring about a change.  That they were so used in the Senate of
the United States, there is no reason for the smallest doubt. By
their aid the free-trade tariff of 1846 was made the law of the land,
and from the date of its enactment mills and furnaces ceased to be
built until California came with its golden treasures to stimulate
our people temporarily into action. That tariff lasted eleven years,
its existence having been terminated by the still more free-trade
tariff of 1857, whose passage proved to be the signal for the crisis
of that year which swept away, by thousands, the makers of paper,
of cloth, of iron, and of a great variety of commodities for which
we became thereafter dependent upon the "great capitalists" of
Britain.
In carrying on this British "warfare" against "the competing
industry of other countries," the means used are very various, the
object to be accomplished being, however, always that of carrying
into full effect Lord Brougham's great idea of "destroying," at whatsoever loss, "foreign manufactures in the cradle."  The commencement of any new branch of industry has proved to be, and that, I
believe, invariably, the signal for an inundation of our markets by
goods to be sold at any price until the danger of American competition should have been dispelled. A single case of this, the evidence
of which is now before me, may here be mentioned.  Ten years
since, the price of rough plate glass being then $2 25 per foot,
several factories were started, and with the fairest prospects of the
most complete success.  Forthwith vast quantities were sent here,
and the price was reduced to 75 cents. As a necessary consequence
our factories ceased to work, their owners were ruined, the " great
capitalists," owners of millions, kept "possession of the foreign
market," and prices returned again to the point at which it suited
the millionaires to hold them. Cases of a similar kind might readily
be produced in reference to numerous branches of manufacture.
The grand secret, however, that one which can at will be made
available in reference to every branch, is that which manifests itself
in the production of AGITATION.  These men know well that capitalists are timid, and that past American experience is such as
to warrant the extremest cantion.  When, then, at a commission
of five per cent., they employed Messrs. Ashmun, Vinton & Co.,
during a period of several years, to agitate for the abolition of all
3




34
duty on railroad iron, they knew that their objects would be fully
attained even without the aid of legislation. They knew full well
that while that agitation should be continued no man would be so
insane as to risk his fortune in a furnace or a rolling-mill. When,
now, they use the publishers of books and newspapers for the production of agitation in regard to paper, they have in view that they
thereby not only stop the building of paper-mills, but also excite in
the minds of our people the strongest doubts in reference to the
maintenance of protection in regard to cottons, woollens, and every
other department of manufactures.  As the battle-cry of Danton
was found in the words, de l'audace, de l'audace, et toujours de
l'audace, so is theirs found in those of agitation, agitation, and
always and evermore agitation, for the accomplishment of the great
purpose of crushing out all foreign competition for the purchase of
the fruits of the earth, and thus compelling all the farmers and
planters of the earth to sell their products in Great Britain, and
there to make their purchases.  To that unceasing agitation it is
that we stand indebted for the waste of life and treasure that has
been caused by the present great rebellion. To that it is that we
are indebted for the fact, that we have been so long and so steadily
engaged in selling to our British friends, those friends who have
so consistently aided in the maintenance of the rebellion, rabbit
skins for six pence apiece, and taking our pay in rabbit tails at a
shilling.
If we are ever to do otherwise; if we are to pay the interest of
our debt; if we are at any future time to provide for payment of
the debt itself; if we are ever again to witness a resumption of
specie payments; if we are to have any permanent maintenance
of the Union; if we are ever to attain that position among the
nations of the world to which our vast natural resources and the
extraordinary development of mind among our people so well entitle
us; if we are to do our duty to ourselves, to the world at large,
and to the Great Being from whom we hold a power for the advancement of the whole human race that is great almost beyond
conception; we must put a stop to this agitation. We must do that
which will inspire in the minds of timid capitalists, both home and
foreign, that confidence which will lead them to apply their means
to the development of the wonderful wealth of fuel and of ores of
every kind which now lies hidden beneath the soil of almost every
State of this great Union. The more that this shall be done, the




35
greater will be the demand for labor; the stronger will be the tendency towards emigration from the shores of Europe; the greater will
be the demand for the cotton of the South and the cotton goods of
the East, for the fish of the Atlantic coast and the pork of the
Mississippi valley; the more rapid will be the growth of that internal commerce so much required for binding together the different
portions of the Union; and the more perfect will be the power of
our people to furnish the contributions required for the maintenance
of the Government to which they will then be indebted for the
blessings that have here been named.
The amount required for the support of city, county, State, and
Federal governments, and payment of interest on their various debts,
cannot be estimated at less than $500,000,000.  Of this perhaps
$70,000,000 may be obtained at the Custom House. That amount
can scarcely be very much exceeded, as it requires an import of little
less than....... $200,000,000
To this addFor payment of interest on our foreign debt, and
dividends on stocks held abroad-...   30,000,000
For expenses of absentees, temporary or permanent-  40,000,000
And we obtain a total of... $270,000,000
This is more than we shall be able to pay until cotton, rice, tobacco,
and naval stores shall once again take their places in our list of
exports. Until now, the earnings of our ships aided in paying for
foreign merchandise, but now the balance is against us, and to such
an extent as must make a considerable addition to the above amount.
To the Internal Revenue, therefore, must we look for little, if any,
less than $450,000,000. To the enforcement of protection we must
look for its enlargement, and thus it is that now, more than ever,
we are to look to the tariff as the means of raising revenue. The
more mills we build, the more mines we sink, the more water-powers
we improve, the larger will be the value of land, and the larger will
be the revenues of counties and of States.  The greater the variety
and extent of our manufactures the more numerous will be the
exchanges, the greater will be the value of shops and warehouses,
and the larger will be the revenues of towns and cities. The greater
the quantity of commodities produced the larger will be the contributions of manufacturers towards the Federal revenue. The greater
the demand for labor the higher will be wages, and the greater the




36
consumption of tea and coffee, rice and sugar, to the great advantage of that revenue.  The larger the reward of labor the greater
will be the immigration of laborers, to the great advantage of the
owners of the land, and of the men by whom it is tilled.  The
nearer the market to the farmer the richer will he grow, and the
greater will be his power to make, without inconvenience to himself,
contributions for the support of the governments of the State and
of the Union.
It is the reverse of all this, however, that is desired by the
"wealthy capitalists" of Europe.  They wish to separate the producer and the consumer, and thus to increase to the utmost the tax
of transportation.  They desire that mills and furnaces shall not be
built.  They would have our vast mineral wealth remain undeveloped. They would compel us to carry rags and corn to England,
to be returned in the form of paper. They would have the price of
labor kept down to the "famine price," and thus destroy the existing inducements to immigration.  They would, if they could, drive
the government into bankruptcy, and thus forever destroy all hope
for any permanent maintenance of the Union.
To that end, they would give us just such agitation as is needed
for alarming the great and little capitalists, and preventing the
extension of manufactures of any and every kind. The instruments
of whose services they avail themselves areI. Their own agents, the men in whose hands has now centred
nearly the whole business of importation, and who generally succeed
in passing their goods through the Custom House at far lower rates
of duty than would be paid by our own citizens:
II. Consumers who allow themselves to be dazzled by the idea of
obtaining, for the moment, goods at low prices, and do not see that
low prices abroad are a consequence of that American competition
for the sale of similar commodities, in the destruction of which they
allow themselves to be engaged:
III. Politicians covetous of the spoils of office, and ready,
Samson-like, to pull down the pillars of the temple, if by so doing
they can secure the attainment of their ends.
In the hands of men like these-honest men who suffer themselves to be deceived, and dishonest men who desire to deceive
others-it is, that "the wealthy capitalists" of England place "the
great instruments of warfare against the competing capital of other
countries," to be used in the West and the East, in the South and




3T
the North, for the maintenance of that agitation which they see to
be so much needed.  So long as it is kept without the walls of
Congress, it does but little harm. When, however, it reaches that
body, and when it is thus made necessary for the makers of paper
and cloth, iron and steel, to dance attendance, year after year, upon
Congressional committees-seeing the sword always suspended over
their heads by a single hair, and witnessing always how slight is
the perception of many of their members of the importance of the
questions to be decided, how trivial the arguments that are brought
to bear upon their decisions-it becomes a great national grievance,
demanding a remedy that shall likewise be national, and that shall
interest the whole of the right-minded and honest people of the
country in its application.
In no other country can such difficulties exist. Throughout Europe, and especially in England, the arrangement of revenue laws
is the business of specially constituted bodies, with which the legislature readily concurs. With us it is wholly different, each particular
portion of a bill having to be examined by men under the influence
of local ideas of interest, themselves the result of foreign agitation,
and conclusions being arrived at on one day of the discussion that
are in direct hostility with those which had been adopted on the
preceding one. As a consequence of this, the Executive is frequently
compelled to affix his signature to bills of the highest importance,
much of which he regards as wholly at war with the national
interests.  For this no Administration can provide a remedy, and
this foreign agitation, with all its tendency towards destruction of
confidence in the future, must be continued until the people themselves shall furnish one. From what portion of the people, however, can it come? The poor women now employed in paper-mills,
and likely to see themselves sent abroad to seek "other employment"
in cities in which the remedy for their distresses is, according to the
Post, to be found in the reduction of wages to "the famine point,"
can do nothing towards it.  The workmen employed about mills
and furnaces that are likely to be closed are equally powerless.
The farmers, seeing themselves about to be deprived of the market
hitherto furnished by the mill or furnace, are helpless, for resistance;
while "the wealthy English capitalist," as we have seen, is allpowerful for assault.  Whence, then, can resistance come?  To
what quarter may we look for quieting this unceasing agitation, and
for restoring confidence?  To the men through whom the war upon




38
our people is made.  They, and they alone, have power that, if
properly directed, will enable the Government to put down agitation, and.to establish and maintain such a revenue system as is
now so much required.
The daily production of paper is equal to the consumption, and
nothing more.  The withdrawal of the producers from the market
would have the effect of teaching consumers to respect their neighbors' rights. Would such withdrawal be justified? Not only so,
but it would be difficult, in my opinion, to justify the former if they
failed to address the latter in something like the following terms:" Gentlemen: Nearly four years have now elapsed since the abdication of Southern Senators and Representatives gave once more to
the people of the North the power to assert their rights. Among
the earliest measures consequent upon that abdication was a reduction into law of the great idea of the approximation of consumer
and producer, so enthusiastically adopted by the Convention which
made the Chicago Platform.  On that occasion the paper producer
was restored to the position he had occupied under the British freetrade tariff of 1846, and nothing more.  Shortly after, the closing
of Southern ports so far cut off the supply of paper material as to
make it doubtful if the needed supply of paper itself could at all
be furnished.  Since then, our best efforts have been given to the
utilizing of other materials, and much, if not even all, of our profits
has gone in that direction.  So untiring have been our exertions,
and so successful have they been, that now, notwithstanding a rise
of wages that is wholly without a parallel-notwithstanding a
duplication, even where not a triplication, of the cost of every
article we use-and notwithstanding the imposition of taxes, direct
and indirect, but little short of the duty on the foreign productwe are still enabled to supply you at such prices as wholly forbid
the importation of paper from abroad.
" While doing this, we have given support to 50,000 people who
might otherwise have been unemployed. We have paid such wages
as have efnabled them to contribute largely to the support of Govern;
ment. We have made a market for many millions of dollars' worth
of rags, coal, iron, and other commodities, the producers of which
have also made large contributions in the same direction. By furnishing a market for labor, we have contributed our full share
towards making the country attractive to the millions of Europeans




39
who desire a change of homes; and have in this manner aided in
bringing many hundreds of thousands of foreigners to consume the
produce of our fields, while engaged in opening mines, building
houses, or clearing and making farms for their children and themselves to cultivate.
"Feeling that we have done our duty, both to you and the
Government, we regret now to have to say, that the treatment we
have received at your hands has scarcely been worthy of your general
reputation as men of business, and as Americans. Prompted by'the wealthy capitalists' of Europe, you have been engaged in an
agitation for the destruction of a manufacture that gives large support to the Government, and have thus caused heavy loss to us,
while involving in utter ruin' some of the largest and most respectable of the producers of the commodity you so much need. You
have thus made of yourselves allies of the men who have furnished
the means, the money, and the ships that have driven American
commerce from the ocean.  Like them, you are making war on the
public revenue of the country, and should it prove that agitation
had in our case been followed by success, further agitation in reference to other branches of industry must be looked for, each in succession resulting in greater loss of revenue, until at length the
Government must become bankrupt, and the Union must present to
the world a scene of utter chaos, farmers, manufacturers, and traders
becoming involved in one common ruin.
"Your power to make this war on the general industry of the
country is wholly derived from us. Without our aid it cannot longer
be prosecuted. Such being the case, we should deem ourselves guilty
of positive crime were we to grant you further aid. So believing,
we desire now to notify you, that at the close of a month from this
date our mills will stop, and you will then be entirely at liberty to
obtain, discharged of any duty, and at a cost to the public revenue
of many millions annually, the cheap paper you so much desire.
"Should you think it desirable to engage in the manufacture of
an article that is to pay ten or twelve per cent. to the Government
if made at home, while coming from abroad free of all such charge,
we shall be ready to sell to you our mills, and think you can be
assured that they may be purchased at what can be shown to have
been their actual cost.  Should you fail to accept this proposition
you will probably find yourselves, and that at an early day, enabled
to judge of the extent to which American competition for the sup



40
ply of paper has tended to reduce its price generally, and thus to
further the cause of civilization throughout the world.
Yours respectfully,
A. B.
C. D.
E. F."
The view above presented is, as I fully believe, a perfectly accurate one, and I cannot but hope that the men who are now being
persecuted may manifest the possession of both the patriotism and
the resolution required for adopting the course of operation that
there is indicated. If the country is to prosper-if the Government
is to be sustained-if the Union is to be maintained-it is by means
of a policy tending to the approximation of the producer and the
consumer, and to the relief of the farmer from the oppressive tax
of transportation, and by that alone, that those great and essential
ends are to be attained.
The real payers of English taxes are the people of the countries
that supply the raw materials of manufactures, and buy them back
again in a finished form-those who sell the rabbit skin for a sixpence and then repurchase the tail for a shilling. The consequences
of this are seen in the fact, that all such countries, poor, weak
and despised, are compelled to submit to the dictation of the very
people whom  they are thus compelled to'support.  Protection
against this tyranny we have  at length obtained, and the result is
seen in the fact, that our people are now enabled to contribute to the
support of Government, and to do so with ease, tens of millions,
when before they could with difficulty contribute the millions that
were required. This, however, does not suit "the wealthy capitalists" of Britain, and therefore do we find them  tempting the consumers of paper and of iron to the work of opening holes in the
tariff, well knowing that one which in the outset was large enough
to pass only the body of a rat will very speedily become sufficiently
large to pass that of an elephant.  This must be resisted, and if the
paper-makers shall now employ to its full extent the power that is
in their hands, they will thereby earn for themselves the thanks of
every patriot in the nation; and of all who with me believe that
there is a way to outdo England without fighting her-a peaceful, pleasant road towards that thorough independence which shall
enable us to respect ourselves while commanding the respect of the
other nations of the world.




41
In another letter I propose to ask your attention to some facts
concerning the iron manufacture, and meantime remain, my dear
sir, with great regard,
Yours respectfully,
HENRY C. CAREY.
Hon. SCHUYLER COLFAX.
PHILADELPHIA, Jan. 2, 1865.
NOTE.-Just as this letter is going through the press I find in the New
York Herald an article on the subject, from which the following is an
extract:"There is a movement on foot to induce Congress to repeal the duty on
paper.  This movement originates out West, and with the editors of
republican papers.  Some time ago a number of these editors-principally of Chicago and St. Louis papers-met and made their arrangements
in the usual way to influence Congress on this subject. They adopted
resolutions, appointed committees, delegates, and so on. Their resolutions
denounced the duty as onerous to publishers and not beneficial to the
Treasury; and their committee, and delegates were sent around to influence the press at large, to buttonhole Congressmen and other influential
persons, and in all ways to make as much outside pressure as possible.
We have been visited on the subject, and were at first glance disposed to
aid in the movement, but on a little reflection we are opposed to the whole
thing. We are in favor of the duty, and if Congress is disposed to increase it to one hundred or even five hundred per cent. it will be quite
agreeable to us.
"In our opinion the Western editors look at this subject through a pinhole, and, consequently, only see a very small part of it. They never
consider the subject in any light save that of their own particular interest,
and, consequently, they do not understand it at all. They see that the
price of paper is high, and they put down their heads and rush at the duty,
which they suppose to be the cause; but they rush in the wrong direction.
The high price of paper is not in consequence of the duty, and an import
duty cannot have any but the most temporary influence on that price.
Import duties cannot have any permanent effect on articles that can be
produced here of a satisfactory quality. If an article can be made here
as well as in foreign countries heavy import duties will only affect the
place where it is made. Import duties on such articles merely stimulate
domestic manufacture.  But, says the man who looks through the pinhole,
import duties also protect domestic manufacture, and the high duty that
makes the imported article dearer also makes the domestic article bring
a higher price. This is not true. Import duties give the market to the
domestic product, and the price of the domestic product is regulated not
by that fact, but by demand and competition.. If the price of paper is
very high, and the demand is great, paper manufactories will spring
abundantly into existence wherever capital seeks investment, and prices
will find their natural level."
4








THE IRON  QUESTION.
LETTERS
TO THE
HON. SCHUYLER COLFAX,
Speaker of the House of Representatives.
BY
H. C. CAREY.
PHILADELPHIA:
COLLINS, PRINTER, 705 JAYNE STREET.
1865.








THE IRON QUESTION.
LETTER FIFTH.
DEAR SIR:OF all the metals there is none that, in its character of an instrument to be used for facilitating exchanges, does so much as is
done by gold in promoting that combination of effort which is the
essential characteristic of civilization. It is in that capacity only,
however, that it performs such service.  Coming to the hands of
men ready for use, it makes little demand for combination in its
preparation, the golden particles found in the miner's pan being
almost as fully fitted for man's service as are the large pieces sent
abroad from the mints of this city or of London.
Widely different is it with regard to that greatest of all metals
by help of which we cultivate our fields, mine our coal, build our
houses, and plate our ships. Coming to us in combination, with an
almost infinite variety of other materials, it requires all the aid that
science can afford to make it fully available for human purposes.
Century follows century, each in succession casting new light on its
various properties, and with each of them is produced a power for
greater combinations of effort, and a necessity for their existence.
Thus promoting association it is the great civilize?, and therefore is
it that in the extent and growth of its use we find the truest standard
by which to test the existence and the growth of civilization. That
admitted, and it cannot be denied, we may now proceed to inquire
what has been the extent of its use among ourselves, and how far
its several stages of growth and decline have been attended, on the
one hand by peace and harmony at home, accompanied by growing
steadiness of the societary movement; and, on the other, by those
frightful crises by which that movement has so often been arrested,
and which can be regarded only as the evidences of growing barbarism.
Forty years since, our annual product of this greatest of all




4
metals did not exceed 50,000 tons. Under the semi-protective tariff
of 1824 there was a steady increase, but it was not until after the
establishment of the thoroughly protective tariff of 1828 that the
manufacture attained any large development.  By 1832 the product had reached 210,000 tons, and there was then every reason to
believe that in a brief period the whole demand would be supplied
at home.  Prosperity then reigned throughout the land.  Public
and private revenues were large, and the national debt was in course
of rapid annihilation. That, however, not being the state of things
desired by "the wealthy capitalists" of England, railroad managers
were set to work in and out of Congress, and railroad bars were
made wholly free, while the duties on other commodities were
left in a great degree unchanged.  Shortly after this, however,
agitation succeeded in producing a total change of system, the tariff
of 1833 having provided for a gradual diminution of all duties,
those on iron included, until, in 1842, they should stand at a dead
level of 20 per cent. Thenceforward the building of furnaces and
mills almost wholly ceased, the " wealthy English capitalists" having
thus'succeeded in regaining the desired control of the great American market for cloth and iron that had been so nearly lost to them.
As a consequence of their triumph there ensued a succession of
crises of barbaric tendency, the whole terminating, in 1842, in a
scene of ruin such as had never before been known, bankruptcy
among the people being almost universal, the banks throughout a
large portion of the country being in a state of suspension, States
being in a condition of repudiation, and the national treasury being
wholly unable to meet its small engagements.  Only seven years
before, under protection, it had paid off, to the last dollar, the debt
of the Revolution.
In 1832, as has been shown, the domestic production of iron
having risen to 210,000 tons, civilization was rapidly advancing,
with growing power among the people to contribute to the support of Government.  Ten years later, with a population onethird greater, the total production of iron being but 230,000 tons,
we find a growing barbarism, attended with corresponding decline
in the power of the people to pay for maintenance of the trivial
fleets and armies that then were needed for self-defence.  Such was
the result of the employment by Britislh capitalists of that "great
instrument of warfare against the competing capital of other countries," by means of which they have thus far succeeded in rendering




5
the Declaration of Independence, issued in 1776, a mere form of
words, and so destined to remain until our people shall fully learn
that combination for our subjugation needs to be met by combination for self-defence.
Universal distress producing a universal demand for remedy, it
was furnished by the establishment of that highly protective tariff
of 1842, under the influence of which, in less than half a dozen
years, the production of iron was carried up to 800,000 tons, and
the total consumption of foreign and domestic to 900,000.  Six
years previously, under British free trade, it had been only 300,000.
Here was evidence of advancing civilization, and it was accompanied
by that higher evidence which was furnished by the facts that individuals, banks, and States resumed payment of their debts, while
the treasury was enabled not only to meet the usual demands upon
it, but also to provide, and that without the slightest difficulty, for
the expenses of the war with Mexico.  Throughout this period
there was no excitement, nor was there any crisis. All was peace
and harmony, and everywhere in the land there was evidence of
rapidly advancing civilization.
The proverb says most truly that "you may bray a fool in a
mortar, yet will his foolishness not depart from him." Never, however, has its truth been more fully proved than in these United States.
Their people had been "brayed" in the British free trade "mortar"
in the terrible period from 1815 to 1825. They had been restored
to perfect health in the protectionist period from 1825 to 1835.
They had again been "brayed," and to an extent that till then
had not been paralleled, in the years from 1835 to 1842. Protection had again restored them in the brief period from 1842 to
1846; yet did they remain so "foolish" as to prove themselves once
again open to the blandishments of their excellent friends beyond
the ocean, "the wealthy capitalists" of Britain, who had been enriched by means of buying their rabbit skins at sixpence each and
then reselling to them the tails at a shilling, and who now found
themselves in danger of wholly losing the "foreign markets" they
had so long labored to secure.  As usual, agitation was recommenced.  British agents, with stocks of cheap British goods, were
sent to Washington, and the halls of the Capitol were granted to
them for the exhibition of their wares. Large sums were raised in
England, and politicians here were subsidized.  Estimates were
furnished to the Senate, in which it was shown that the taxation




6
imposed by the tariff was so oppressive that a ton of nails which
could be bought for $90, really cost the purchaser $105 more than
it would have done under a free trade system; and that a pound
of Missouri lead, that could then be bought in New Orleans for
23 cents, actually cost the consumer three cents more than he would
have had to pay had he been permitted to get his lead free of duty
from Spain or England.  Such were the "instruments of warfare"
used on that occasion for beating down the system under which the
country had so rapidly recovered from the effects of the free trade
tariff of 1833. Such were the frauds by means of which the tariff
of 1846 was forced upon a country that had already, in the short
period of thirty years, twice been "brayed" in the free trade "mortar," and twice had found the effects thereof in an almost entire
stoppage of the societary circulation, and an almost absolute bankruptcy of the farmers, traders, bankers, and manufacturers of the
country.
Nominally, that tariff came into operation at the end of 1846.
Really, it became operative in the summer of 1848, the Irish famine
of 1847 having produced a state of things, both abroad and at
home, that much delayed its destructive action. From that moment
furnaces and rolling mills went gradually out of action until, in 1850,
the quantity of iron produced had fallen to less than 500,000 tons.
Was the deficiency made up by importation? It was not, the import of that year having exceeded that of 1846 by only 270,000.
The whole consumption was, therefore, little more than previously
had been the domestic product alone. Nevertheless, our population had then increased but little less than ten per cent. We
see thus, that while consumption advances under protection at a
rate five times more rapid than that of population, it declines whenever the "wealthy capitalists" obtain the control of the "foreign
markets" to which they look with such great anxiety, and for which
they are always ready to use that great "instrument of warfare"
that we, in our marvellous folly, have placed in their hands, by
means of selling skins for sixpence and taking our pay in tails at
a shilling.
The duty under the tariff of 1842 being specific, it underwent no
change when prices fell in England. To its full amount, therefore,
it constituted an obstacle to importation that it was for the
British iron master to remove, paying the cost of removal out of
his own pocket and into the Treasury of the Union. As a conse



quence of this the import of rails in the fiscal year 1846-7, when
the country was so highly prosperous, was but one-half as great as
the average of the two years preceding the passage of the act of
1842; whereas, the domestic production had risen to 41,000 tons,
or little less than double the number imported in those thoroughly
free trade years. The total consumption had more than doubled in
the short period which had then elapsed, and had thus given evidence that thorough protection and civilization were marching hand
in hand together.
The tariff of 1846, with its ad valorem duties, came into operation on the first of December of that year, the rate payable by iron
being 30 per cent. Fraudulent invoices reduced it, probably, to little
more than 20 per cent. American competition had greatly lowered
the real British prices, as a consequence of which the amount paid
into the treasury by foreign iron and the freight from England
combined, during a period of several years, were less than the mere
cost of transportation from the furnaces of Pennsylvania to the city
of Boston.  The "wealthy English capitalists" now profited, and
to the fullest extent, of the opportunity thus afforded them "to destroy foreign competition and to gain and keep possession of foreign
markets."  In 1849 and 1850 the quantity of foreign rails forced
on the American market amounted to more than 200,000 tons,
while the domestic production of those years averaged but 16,500,
although there then existed American mills capable of producing
nearly 70,000, and those in a country in which eight years before
not a single rail had yet been made.
The furnace master found his market destroyed by the closing of
the rolling mill, and the owner of the latter found himself being
ruined by the liberal use that then was being made of those "great
instruments of warfare," by means of which the "wealthy capitalists" of England had so long been accustomed to annihilate "the
competing capital of other countries." In their distress they called
on Congress for help, but their cries were totally unheeded. British
iron, at the then freights, and almost free of duty, could be delivered
here, as then was shown, at $40 per ton; and railroad makers preferred to pay that price for the miserable products of British furnaces, to giving a sliding scale that would secure to the American
producer, for sound and excellent iron, the small price of $50, which
was all that then was asked.  Closing their eyes to the fact that it
was to American competition for the sale of iron they had been




8
indebted for the low prices of the British markets, tney permitted
that competition to be almost annihilated, and the competitors to
be ruined.  The fall of the domestic production from 800,000 tons
to less than half a million, produced a necessity for dispensing with
its use, or going abroad to purchase all the difference. Competition
for purchase in the British market grew as this necessity increased,
and therewith came the precise state of things so well described in
the Report to which I have so frequently referred-the whole British
iron trade having been "enabled to step in when prices revived, And
to carry on a great business" before their American competitors could
"establish a competition in prices with any chances of success."
With the discovery of California gold there arose a great demand
for railroad iron, and that demand was, for the first few years, supplied almost entirely from British rolling mills, the railroad makers
paying $80 per ton, if not even more, when but a little before
they had refused to the domestic producer a sliding scale that would
have secured him in the receipt of $50. At enormous prices Britain
supplied us, in the four years 1851-54, with no less than a million
tons of railroad bars.  The additional price paid in those years by
American road-makers, as penalty for permitting American competition to be crushed out, could not have been less than $30,000,000,
all of which went into British pockets, and thus helped to prepare
the way for that new evidence of growing barbarism which was
furnished by the terrific crisis of 1857.
In that crisis very many of our iron producers were totally ruined,
and the ruin extended itself to all departments of industry connected
with this branch of manufacture. The demand for coal diminished,
and labor ceased to be required; as a necessary consequence of which
immigration rapidly declined, while emigration to Australia, combined with return of the many disappointed, withdrew from us probably one-fourth of all who then were led to seek our shores.
At the breaking out of the rebellion we had been for a whole
decade in the ownership of mines that had yielded gold to the extent
of more than $500,000,000, and yet we had not been able even to
pay our way with Europe.  Our foreign debts were probably equal
to that sum in their amount. Our credit was so very low that there
existed little disposition to purchase further supplies of bonds. As
a consequence of this, the importation of railroad iron in the three
years 1858-60 averaged but 88,000 tons, and the total consumption
of iron, foreign and domestic, but little exceeded that of the closing




9
year of that prosperous protective period which terminated in
1847-8.  There is good reason for believing that it did not exceed
a million of tons, and yet in the period which had since elapsed our
population must have increased more than 40 per cent.  Taking
then the consumption of iron as the test of civilization, we are presented with the following facts:In the six years which followed the passage of the protective act
of 1842 the consumption of iron trebled, while the population increased but 20 per cent.
At the end of twelve years from the re-establishment of British
free trade, there was but a slight increase, although the numbers of
our people had grown 40 per cent.
Bad as was all this, it was but the preparation for those further
acts of barbarism which distinguished the close of 1860, and resulted
in a civil war that has cost the country hundreds of thousands of
lives, and thousands of millions of dollars. Seeking now to find
the real cause of that war, and of the destruction of life and property of which it has been the cause, I would ask of you, my dear
sir, to read again the Parliamentary Report of the British policy,
and then to study carefully the following exhibit of the natural
advantages of an important portion of the country that now presents such a scene of devastation.
The great backbone of the Union is found in the ridge of mountains which commences in Alabama but little distant from the Gulf
of Mexico, and extends northward, wholly separating the people
who inhabit the low lands of the Atlantic slope from those who
occupy such lands in the Mississippi valley, and itself constituting
a great free soil wedge, with its attendant free atmosphere, created
by nature herself in the very heart of slavery, and requiring but a
slight increase of size and strength to have enabled its people to
control the southern policy, and thus to have brought the entire
South into perfect harmony with the North and West, and with
the world at large.  That you may fully satisfy yourself on this
head, I will now ask you to take the map and pass your eye down
the Alleghany ridge, flanked as it is by the Cumberland range on
the west, and by that of the Blue Mountain on the east, giving, in
the very heart of the South itself, a country larger than all Great
Britain, in which the finest of climates is found in connection with
land abounding in coal, salt, limestone, iron ore, gold, and almost




10
every other material required for the development of a varied industry, and for securing the attainment of the highest degree of
agricultural wealth; and then to reflect that it is a region which
must necessarily be occupied by men who with their own hands till
their own lands, and one in which slavery can never by any possibility have more than a slight and transitory existence. That done,
I will ask of you here to reflect what would be now the condition
of the Union had its policy for the last twenty years been such as
would have tended towards filling this great free soil wedge with
free white northern men-miners, smelters, founders, machinistsworkmen of all descriptions —who should have been making a market
for every product of the farm, with constant increase in the value
of land and labor, and as constantly growing tendency towards increase of freedom for all men, whether black or white? Would not,
under such circumstances, power have made its way to the hills, and
would not iron, coal, limestone, and copper have been enabled to
dictate law to the cotton kings-to the men who occupied on the
river bottoms, and lived at ease at the cost of those of their fellowmen whom they bought and sold in the open market? Could we, by
any possibility, have witnessed the present extraordinary state of
things, had the policy of the country in reference to domestic and
foreign commerce not been directed by the "wealthy capitalists"
who are now so busily engaged in making rat-holes through the
existing tariff, very moderately protective as it is? Most assuredly
we,should not.  To them it is that we are indebted for our present
troubles and our debt, and of them it is we should exact the payment
of it. That, however, we shall never do if we shall continue to sell
rabbit skins for sixpence and take our pay in rabbit tails for a
shilling.
Why have we so long continued so to do? Because, although
Independence was declared in 1776, we have never pursued the
policy required for making the declaration any more than a mere
word of small significance. With slight exception we have been
governed by the great capitalists of Britain, and have pursued the
precise system that was advocated in England before the Revolution
as the one required for retaining the Colonies in a state of vassalage,
and thus compelling them to so make the unprofitable exchanges to
which I have referred.  What was that system is fully shown in an
English work of much ability, published in London at the time
when Franklin was urging upon his countrymen the diversification




11
of their pursuits, as the only road towards real independence, and
from which the following is an extract:"The population, from being spread round a great extent of frontier, would increase without giving the least cause of jealousy to
Britain; land would not only be plentiful, but plentiful where our
people wanted it, whereas, at present, the population of our colonies, especially the central ones, is confined; they have spread over
all the space between the sea and the mountains, the consequence of
which is, that land is becoming scarce, that which is good having
all been planted.  The people, therefore, find themselves too numerous for the agriculture, which is the first step to becoming manufacturers, that step which Britain has so much reason to dread."
Why, my dear sir, should Britain have so much dreaded combination among her colonial subjects?  Why should she so sedulously
have sought to disperse them  over the extensive tracts of land
beyond the mountains? Because, the more they scattered the more
dependent they could be kept, and the more readily they could be
compelled to carry all their rude products to a distant market, there
to sell them so cheaply, as we are told by another distinguished
British writer, "that not one-fourth of the product redounded to
their own profit," as a consequence of which plantation mortgages
were most abundant, and the rate of interest charged upon them so
very high as generally to eat the mortgagor out of house and home.
In a word, the system of that day, as described by those writers,
was almost precisely that of the present hour. For its maintenance,
dispersion of the population was regarded as indispensable, and that
it might be attained, the course of action here described was recommended:
"Nothing can therefore be more politic than to provide a superabundance of colonies to take off all those people that find a want
of land in our old settlements; and it may not be one or two tracts
of country that will answer this purpose: provision should be made
for the convenience of some, the inclination of others, and every
measure taken to inform the people of the colonies that were growing too populous, that land was plentiful in other places, and granted
on the easiest terms; and if such inducements were not found sufficient for thinning the country considerably, government should by
all means be at the expense of transporting them. Notice should
be given that sloops would be always ready at Fort Pitt, or as much
higher on the Ohio as is navigable, for carrying all furniture without
expense, to whatever settlement they chose, on the Ohio or Mississippi.  Such measures, or similar ones, would carry off the surplus
of population in the central and southern colonies, which have been




12
and will every day be more and more the foundation of manufactures. "
Having studied these recommendations in regard to the maintenance of colonial dependence, I will ask you now to study the working of the British free trade system, and satisfy yourself that its
advocates, the agitators of whom I have spoken, have been mere
instruments of our foreign masters-closing our mills, furnaces, and
factories, retarding the development of our great mineral treasures,
preventing the utilization of our vast water powers, and in this
manner scattering our people, in strict accordance with the orders
of those British traders against whom  our predecessors made the
Revolution.
Having now brought up this review of the iron trade to the
period of the great rebellion, I propose in another letter to bring
it down to the present time, and then to show what are the measures by which we may be enabled to outdo England without fighting
her, and thus establish a real independence.
Yours, very truly,
HENRY C. CAREY.
Hon. SCHUYLER COLFAX.
PHILADELPHIA, Jan. 6, 1865.




THE IRON QUESTION.
LETTER SIXTH.
DEAR SIR:THE preparation seems to have now been made for boring
another hole through the protective system that has recently been
so well established.  This time it takes the form of a protest, of
course in favor of the public revenue, against duties on spool cotton, under which, as we are told, "foreign spinners are now suffering in their attempts to contend against these heavy odds whereby
importation is now stopped." Large exhibits are made therein of
the quantity of gold that is thus prevented from passing into the
treasury, but not a word is said in reference to the important fact,
that, under the system which has thus far made us dependent on
Britain for that important commodity, we have never yet been able
to carry up our consumption even to the amount of six cents per
head of our population.  Selling cotton at three or four pence
per pound we have been required to pay in gold, to the extent of
millions of dollars per annum, for pennyweights of it combined with
Russian and Egyptian corn, while the farmer of Iowa, unable to
find a market for his grain, has found it expedient to convert it into
fuel, and thus prevent its total waste. Here, as everywhere, we
have been favoring the policy of slavery and barbarism, limiting our
people to the raising of raw produce for the supply of distant
masters, by whom they have been required to give the whole skin
for a sixpence, receiving their pay in tails at a shilling.   The
answer to all that is now said in regard to the opening of the new
rat-hole which is now proposed, is found in the words of the excellent article from the Herald, a part of which was appended to a
former letter: " If the price is very large and the demand is great,
manufactories will spring abundantly into existence and prices
will find their natural level."  If the British manufacturers are
really suffering in the manner above described, let them transfer




14
themselves and their machinery here; let them bring their people
with them to eat the food of Illinois and Iowa in place of that of
Egypt: let them do this and the price of their commodity will soon
be so far lessened that our consumption will rise to 20 cents per
head; the Government will then receive, in the form of internal
revenue, an amount far greater than these foreign agitators ever
yet have paid at the custom-house; and we shall then have made a
further step towards enabling ourselves to retain at home the gold
that we ourselves shall so much need when the time shall have
arrived for using the precious metals in the place of paper.
Having thus disposed of this new subject of agitation, the further
examination of the great Iron Question comes now next in order.
To British free trade it is, as I have shown, that we stand indebted
for the present civil war. Had our legislation been of the kind
which was needed for giving effect to the Declaration of Independence, that great hill region of the South, one of the richest, if not
absolutely the richest in the world, would long since have been filled
with furnaces and factories, the laborers in which would have been
free men, women, and children, white and black, and the several
portions of the Union would have been linked together by hooks of
steel that would have set at defiance every effort of the " wealthy
capitalists" of England for bringing about a separation. Such,
however, and most unhappily, was not our course of operation.
Rebellion, therefore, came, bringing with it an almost entire stoppage of the societary movement, with ruin to a large proportion of
those of the men engaged in producing coal and iron who had still
continued to exist notwithstanding the heavy losses inflicted upon
them in the sad five years which had just then elapsed. More than
at any previous period the Government stood then in need of iron
in all its shapes, from the needle with which the poor sewing woman makes the shirt, to the great sheet required for plating the
enormous ship of war; and yet, such had been the extraordinary
policy of the country that, while fuel abounded rolling mills were
idle and furnaces were out of blast, and the machinery for the needle
and the plate had not as yet been permitted to take its place at any
single point over our extensive surface. As a consequence, poor as
was then our Government, and unemployed as were then so large a
portion of our people, we were compelled to send abroad for millions
upon millions of dollars worth of the machinery of war, and there
to encounter all the obstacles that could decently be thrown in our




15
way by men who prayed openly for the success of the rebellion, and
who, almost at the instant of its first occurrence, had, by royal proclamation, placed the rebel Government on a level with that which
their predecessors had, in 1783, so unwillingly recognized. This
great adversity had, however, brought with it a remedy that, if now
properly applied, will cause our children and our children's children
to look back to the period of its occurrence as that in which there
had been an act of Providential interference in favor of a community such as had had no precedent in the history of the world,
prompting, as it had done, men who for seventy years had wholly
controlled the action of the Government, to abdicate their seats and
leave the direction of affairs to those who represented the poor and
despised "mud-sills" of northern States.  So great an act of insanity had never before been perpetrated by any body of intelligent
men, and, most fortunately, its perpetration occurred at the moment
when the public opinion of the.North had been prepared to profit
of it.
That preparation had come as a natural consequence of the terrific
free trade crisis of 1857. Assembling in 1860, the politicians at
Chicago accepted most unwillingly that new plank of the platform
by which "protection to the farmer in his efforts for bringing the
consumer to his side" was incorporated into the Republican creed;
and great was their surprise when they found that public opinion,
and especially the opinion of the great Mississippi Valley, had left
them far behind.  "We might have made it stronger,' was the
exclamation of one of its chief opponents after he had witnessed
the enthusiastic applause with which it had been greeted. As yet,
however, it could be nothing more than a declaration of good intentions to be carried into effect at some future time, the senatorial
power appearing then likely long to remain in the hands of men
who believed in human slavery as the corner-stone of all free government; in British free trade as the means by which slavery was to
be perpetuated and extended throughout this continent; and in the
"wealthy capitalists" of England, as the firm allies by whose aid
their ambitious hopes were to be fully realized. To give practical effect to the new Declaration of Independence, it was necessary that those men should abdicate, and happily for the North,
and for the world, abdication was not long delayed. Protection
then at once became the law of the land, and under circumstances
that should have tended to free forever the country from that agita



16
tion by means of which the British trader had so long controlled
the societary movement, and had, with so much profit to himself,
been enabled to fill the British treasury by means of taxes, direct
and indirect, upon nearly all the foreign exchanges that our poverty
had permitted us to make. Between skins at sixpence and tails at
a shilling-cotton at cents per pound and cotton goods at shillings
per ounce-corn at cents per bushel and wool and corn at dollars
per pound-there was a large margin for the British trader and his
superiors, and out of the taxes thus extorted have, to a large
extent, the British nation and its government been supported by
the people of these United States. Protection looked to the abolition of this taxation. That it has done much in that direction is
proved by the great fact, that it has enabled us to contribute thousands of millions of dollars towards the suppression of the rebellion;
that it has in so short a period given us a navy such as had been
so long required for setting at naught the declaration that " not a
flag but by permission spreads;" and that, notwithstanding all our
vast expenditures, the productive power of the loyal States is greater
at this moment than was that of the whole Union on the day on
which, less than four years since, President Lincoln assumed the
reins of government.
The need for iron soon became very great. Great, too, was the
disposition of iron men to exert themselves for the supply of the
wants the rebellion had now created. The Government had just then
pledged itself to stand by them in their contest for the market of
the world, at home and abroad, with the men who had so long controlled " that great instrument of warfare" by whose judicious use
their predecessors had so generally been ruined. The pledge was
accepted, and the results exhibit themselves in the facts:I. That the production of pig-iron has already been carried up
to more than 1,300,000 tons, and that it has been made certain that
large as is the quantity, it can with ease, provided that the labor
can be obtained, be trebled in the next seven years:
II. That the rolling-mills of the country have now a capacity of
nearly 100,000 tons, and that the only difficulty now standing in
the way of the production of that quantity of sheet and bars is the
one resulting from the scarcity of labor:
ItI. That the supply of railroad iron is now fully equal to the
demand, and can be increased to any extent that may be required:
IV. That the conversion of iron into steel has been so much ex



17
tended as to free us entirely from  any further dependence on the
" wealthy capitalists" of Britain:
V. That works required for the conversion of steel and iron into
the various other machinery required for both public and private
uses have been so extended as to enable their proprietors to meet
the whole demand.
The industrial history of the world exhibits nothing at all comparable with what has here been done in regard to this great branch
of manufacture.  That it might be done every man who previously
had been interested therein has been required to apply to the enlargemenlt and improvement of his machinery not only every dollar
that he could make, but, in very many cases, all that he could borrow; and this they have done in the false confidence that consumers
of iron had at last so far profited of past experience as to have
become convinced that the way to have good and cheap iron was
to be found in the direction of stimulating competition for its
manufacture; and not in that of ainnihilating American competition for its sale, while promoting competition for its purchase from
the very men who had always used their power in the direction of
promoting agitation for the destruction of "foreign competition,"
and for enabling themselves to "gain and keep possession of foreign
markets."
That it was a false confidence you will, my dear sir, see, after you
shall have accompanied me in a brief review of the proceedings of
iron consumers which it is proposed now to make. When you shall
so have done, you will, as I think, agree with me that it would be
difficult to find in the history of the world a case in which the proverb given in my last had been more thoroughly applicable than
it now is in reference to the iron consumers of these United States.
Often as they had been "brayed" in the British free trade "mortar,"
their "foolishness" had not departed from them.
By the tariff of 1861 the duty on railroad iron was fixed at
$12 per ton of 2,240 pounds, being less than one-half of the
charge upon it as established  by the tariff of 1842-that one
under which iron generally was so cheaply furnished that the
total consumption of the country was in four years carried up
from  300,000 to 900,000 tons.  It should have been placed at a
higher rate than this, and so it would have been but for the exceedingly absurd and stupid jealousy which prompts so many persons
to consider the iron manufacture the special property of Pennsyl2




18
vania.  Iron ore abounds in more than two-thirds of the States of
the Union; fuel, too, almost as much abounding as the ore demanding to be smelted; and it is to the great credit of Pennsylvania that
her ironmasters have never in a single instance allowed themselves
to be influenced by the narrow idea, elsewhere openly expressed in
regard to other branches of manufacture, that it was needed to
"keep protection down, lest it might stimulate domestic competition."  If there are any ironmasters in the country who can live
without protection, they are those of that State.  They are the
men who have paid most dearly for their experience.  To them the
country is indebted for the fact that this great branch of manufacture, in nearly all its processes, is now ahead of Britain.  They,
however, know that Tennessee and Alabama, Missouri and Michigan, Virginia, Maryland, and Ohio, need protection; and they desire
that they shall have it, quite assured that in the wide extension and
general prosperity of the manufacture in which they are so well
engaged will be found the key to that universal prosperity which
enables men to extend their roads, to increase and improve their
machinery, and to do all those things that make demand for
iron and thus furnish proof conclusive of advancing civilization.
Least in need of it, they stand foremost in the demand for efficient
protection, asking it in the interest of the country at large, and not,
as is in so many other cases done, exclusively in their own.
Accepting the rate of duty that had been fixed, they went
promptly to work, and with the results that have been shown.
The time came, however, when it became necessary to establish a
system of Internal Revenue, and railroad iron was then subjected
to a direct tax of $1 50 per ton, while upon coal and other commodities used in its production heavy duties were imposed. Incomes,
too, were required to contribute, the general rate of contribution,
by both the manufacturer and the receiver of income, being fixed at
three per cent.
The war having thus produced a necessity for taxing both the
materials of manufacture and its products, it was deemed proper to
subject the foreign manufacturer to the payment of a like contribution, and duties generally were raised to the extent of five per
cent.  To this, however, railroad iron was made an exception, the
addition having been limited to the precise amount of the direct tax,
$1 50 per ton, and no allowance whatever having been made for the
taxes on coal, lime, machinery, or incomes. Such, my dear sir, was




19
the paltry spirit in which were met the men who were at that moment, in their efforts to meet the wants of the Government, manifesting a larger liberality than any other body of men that could
have been produced in the whole extent of the Union.
The necessity for further revenue becoming obvious, the last
session of Congress gave us a new excise law by means of which
pig metal was for the first time subjected to a tax, and that to the
extent of two dollars per ton, the tax on coal being at the same
time largely increased, and that on rails more than doubled, the
general effect being that of giving a tax on the rail itself amounting
to seven dollars per ton.
To this must now be added taxes on lime and other raw materials-taxes on machinery to a large amount-income taxes-taxes
on licenses-taxes on sales-taxes on freights-taxes on leasestaxes on salaries-taxes on charters, notes of hand, and articles of
agreement —the whole of which, when added to the $7 already obtained, will give at least $8 50 as the contribution in these several
form~ to be paid by each ton of railroad bars.-Adding now to this
the large increase,, consequent upon the existence of the war, of
state, county, township, and borough taxes-the contributions for
obtaining volunteers and for maintaining their families, it will be
found that the amount, under this new law, furnished by each ton
of bars, for the maintenance of the contest, cannot be estimated at
less than $10.
Having thus shown what was the pressure brought by the
Government to bear upon the men who were giving all their time,
mind, and means to building up that great manufacture on which
now rests the whole of our great societary machine, and upon whose
success or failure is dependent the whole future of this Union, I
propose in my next to show what were the measures at the same
time adopted by the Government for enabling them successfully to
compete with those "wealthy English capitalists" who were then
giving all their time, mind, and means to the work of vilifying our
people, destroying our credit, breaking our blockades, destroying
our ships, and in every other way aiding a rebellion whose success,
as they saw, could have no other result than that of reducing the
country to a state of complete dependence.
It is with great regret, my dear sir, that I make so many demands
upon your time and attention, but the question now to be settled is
one of so great importance that you will, I am sure, excuse me.




20
When the present war shall have been closed there will be another
to be fought, and that one will be with England.  By many it is
desired that it may be a war of cannon balls; but it is not now with
such machinery that she chiefly seeks to fight us.  It is in the Halls
of Congress she is to be met, and the machinery with which we
have successfully to meet her is to be found in the adoption of those
measures which shall enable us most speedily to profit of that inexhaustible store of fuel and of ores that nature has placed at our
command.  So believing, and hoping that all my countrymen may
soon be led to the conclusion that there really is a way to outdo
England without fighting her, I am, with great regard and respect,
Yours, very truly,
HENRY C. CAREY.
Hon. SCHUYLER COLFAX.
PHILADELPHIA, Jan. 9, 1865.




THE IRON QUESTION.
LETTER SEVENTH.
DEAR SIR:That the power to prosecute the war in which we are engaged
has been derived mainly from the Mining States, must be obvious
to all who take the trouble to reflect that for the force by which
our mills have been driven and our blockade maintained, and the
iron by means of which that force has been applied, the Union has
had to look almost entirely to the mountains of Pennsylvania. But
for the energy with which the mineral resources of that State have
been developed the war could not have been maintained for even a
single year. To their further development, and to that of her sister
Mining States, the Union has now to stand indebted for its power
to collect the revenue by means of which its credit is to be maintained, its wars, present and future, to be carried on, and its debt
ultimately discharged.  Failing to secure that development it must
itself prove a failure, absolute and complete.
Seeing this, and it is so clearly obvious that it would appear difficult that any should fail to do so, it might be supposed that coal
and iron, as the foundation upon which now rests, and must in all
the future rest, our whole societary movement, would, in these trying
times, and after the sad experience of the blessings of British free
trade, have been regarded as entitled to peculiar care. That prior
to the last Session of Congress they had not been so regarded, and
that, on the contrary, of the little that had been given by one hand
much had been taken away by the other, has been already shown.
That the movement since that time has been in the same unfortunate direction, it is proposed now to show.
The total taxation of a ton of railroad bars, for the maintenance
of the war, cannot be taken at less than $10.  Before the passage
of any tax law the duty had been fixed at $12, that having been the
smallest sum to which it had been possible to obtain the assent of




22
the Mining States.  Under the first tax law the charges of the
Government to the domestic producer may be taken as having been
not less than $3, while the additional payment required of the foreign
producer was limited to $1 50.  Since then the former have been
more than trebled, and it would have been but just to carry up the
latter to the same extent, thereby compelling the British iron
master to pay $20.  Instead of that, his contribution was reduced
to the point at which it had stood on the day on which Fort Sumter
fell. Such was the manner in which the decision of the Chicago
Convention was carried into effect in regard to a manufacture upon
the success or failure of which was wholly dependent the answer to
be given to the questions as to whether or not the Government was
to be sustained; whether or not the interest on the debt was to be
paid; whether or not specie payments should ever be resumed;
whether or not the national debt should ever be discharged?
It may, however,'be said that the duty of $12 is payable in gold,
while the $10 of taxes are payable in paper, and such is certainly
the case.  That difference now constitutes the sole protection to
this great branch of manufacture.  When, however, is it to cease?
Who can tell what time is to elapse before some.enterprising
financier shall succeed in persuading the Government to the adoption
of measures tending to the sudden reduction, at any cost to the
people, of gold to par?  Such measures are, as we all know, now
advocated in some of the most influential Republican journals, and
they have, as I have good reason to believe, received the approbation of men of the highest standing connected with the Administration.  That they would be suicidal in their tendency cannot be received as furnishing even the slightest evidence that they will not be
adopted, seeing that we have now before us evidence that gentlemen
connected with railroads have so entirely failed to profit by experience which should have taught them that the cheap British iron
of 1864 was but the trap by help of which they were to be made to
pay probably twice the price for just such iron, poor as it generally
is, in 1866.  Time and again have they and their predecessors been
brayed in the British " mortar," yet has their " foolishness" not yet
departed from them.
The direct contribution of pig and bar iron to the revenue can
scarcely this year be taken, as I think, at less than $5,000,000. Add
to this the taxes on coal, lime, transportation, incomes, &c. &c. &c.,
and we shall obtain probably double that amount.  This woud




23
seem to he a large sum to put at risk, and yet it is as nothing compared with the extent of risk that is to be incurred, the coal and iron
trades of the country constituting the foundation upon which this
day rests our whole system of internal revenue. Break them down,
as they will be broken if the system be not promptly changed,
and the Government will, before the lapse of even a single year,
become so utterly bankrupt that its certificates of indebtedness will
have little more value in the public eye than have this day those
of the so-called Confederacy of the Southern States.
To those who may entertain any doubts on this subject I would
recommend reflection on the following facts:I. The consumption of iron is the test of growing civilization,
strength, and power.
II. That consumption doubled in the protective period from 1828
to 1834, our numbers meanwhile increasing but 20 per cent.
III. Eight years later, in 1842, with British free trade and an
increase of numbers amounting to 30 per cent., the quantity consumed had made scarcely any progress whatsoever.
III. Thence to 1848, under protection, with a growth of population of but 20 per cent., it trebled-having already reached the
large amount of 900,000 tons.
IV. Twelve years now follow, spent under the British free trade
system, giving us-an increase of population to the extent of nearly
40 per cent.-the great discovery of California gold with corresponding increase in the necessity for internal intercourse-and an increase
in the consumption scarcely, if at all, exceeding 12 per cent.
V. In the three years that have now elapsed since the Morrill
tariff became fairly operative, the population subject to it has been
less by a third than that of 1860, and yet the consumption now
exceeds 1,300,000 tons, having increased more than 30 per cent.
In the first and third of these periods every branch of manufacture
was prosperous, and thepower of the people, at their close, to contribute to the support of Government was thrice greater than it had
been at their commencement.
In the second and fourth every branch of manufacture was prostrate, and the power at their close to contribute to the support of
Government had been almost entirely annihilated.
In the fifth there has been an activity of commerce that before
had not been paralleled, as a consequence of which our people have
been enabled to contribute to the support of Government hundreds




24
of millions, and with far more ease than in 1860 they could have
furnished tens of millions.  Our whole experience proves, then, that
power for maintaining the Government grows or declines almost
geometrically as the consumption of iron increases or decreases
arithmetically.
Having reflected on the facts thus presented, I would now, my
dear sir, beg you to answer to yourself if our iron consumers, in
the course they have recently adopted, have not furnished proof
conclusive that they are of the same race precisely with the Bourbons, of whom it was said on their return to France on the downfall of Napoleon, that they had not profited by their long experience
of the troubles of exile to learn anything they had not previously
known, or to forget any of the prejudices with which they had
started. Both alike had been " brayed in the mortar" of experience,
yet had they remained as " foolish"'as at first.
Such having been the course pursued in regard to this great
fundamental branch of manufacture, let us now look to that presented in reference to another and very subordinate branch that has
just now been brought into discussion-that of spool cotton.  By
the tariff of 1861, the duty thereon was fixed at 24 per cent. By
that of 1862 it was raised to 30 per cent.  That of 1863 made it
40.  Again raised in 1864, we find it to be a combination of specific and ad-valorem duties that compels the foreign producer to pay
more than four times as much in gold as is paid by the domestic
one in paper.  The domestic iron producer, on the contrary, pays
nearly as much in paper as the foreign one pays in gold.  The
domestic paper producer pays more than half as much in paper as
the foreign manufacturer pays in gold, the great fundamental industries being thus almost entirely abandoned to the "tender mercies"
of "wealthy English capitalists," while the minor ones are placed
in a condition to feel themselves entirely secure.
The "absurdity" of all this is most remarkable, the market for
thread, cloth, books, and all other commodities being almost wholly
dependent upon the prosperity of the great coal, iron, and paper
producing interests. Such legislation would find its fittest legislator
in the man who should spend his mornings in carefully trimming
the branches of his trees while his evenings were as assiduously
employed in cutting away their roots.
To what cause is such " absurdity" to be attributed? In great
part to the existence of that powerful British combination so well
described in the Report to Parliament heretofore given, and in no




25
inconsiderable part to a necessity that was, at the date of the Congressional action above described, supposed to exist for "punishing
Pennsylvania."  Almost inconceivable as it may seem  that such
should be the grounds on which was based the decision of one of
the greatest of national questions, that it was so based there is not,
as I believe, the smallest reason to doubt.  Assuming it so to have
been, it may not be, my dear sir, improper here to ask your attention to a few facts in relation to the past and present of the great
State which then was held to stand so much in need of punishment.
As New England furnishes us the type of that portion of our
population which has occupied New York, the northern edge of
Pennsylvania, northern Ohio, Indiana, and Illinois, Michigan, and
other Northwestern States, so do Pennsylvania and New Jersey
give us the type of the population of a great belt of territory, 120
miles in breadth, and ten times that in length, now containing more
than 10,000,000 of as industrious and active people as can be found
elsewhere throughout the world.  When, therefore, Pennsylvania
speaks, she does so as the representative of the opinion of all those
millions, and therefore is it-and not because of her own particular
strength-that it has grown into a proverb, that as Pennsylvania
goes, so goes the Union.
How has she gone in those two great crises which, since the peace
of 1783, most have "tried men's souls"-those of the institution in
1788 of the present government, and at later ones of the past four
years?  Let us see.
The Constitution, as adopted by the Convention of 1788, placed
the smaller States, as regarded Senatorial representation, on an
equal footing with the larger ones, and hence gave great offence to
nearly all of these latter.  The single exception to this was found
in Pennsylvania, which, first of all to consider that great instrument,
was first of all, with the single exception of the little State of Delaware, to ratify it. Months elapsed before her example was followed
by Massachusetts and Virginia, while something closely resembling
compulsion was required before it was accepted by New York.
In that great crisis Pennsylvania, by her remarkable magnanimity,
earned the title of the Keystone State, but whether or not it was
then that it was given to her, Ihave no means of knowing.  Certain it is, that but for her prompt and decided action the Union, as
it since has been, would never have been accomplished.
Coming now to the second great crisis, that in which we are now




26
involved, let us see how she has gone, and how far her action has
tended to maintain that Union which had been indebted to her for
all its previous existence.
I. Scarcely had the first call of the President been fully met before
she applied herself diligently to the creation of a large and fully
appointed army, whose acceptance was urged upon the Government.
Had it been accepted, the Bull Run battle would probably have had
a very different termination.  Had it not existed, the war might,
and probably would, then have ended in the capture of Washington.
II. In three years and a half she has furnished to the army,
exclusive of militia and ninety days volunteers, above 300,000 men,
or more than a tithe of her whole population. Had all the loyal
States done as much, the whole number supplied by them would
have exceeded 2,000,000.  Always among the first, even when not
actually first in point of time, she has never been behind any in
point of numbers.
III. Always ready in the field, she has been equally so at the
polls.  When New York had abandoned the national cause, and
when the whole future of the country had become dependent upon
the question whether she would, or would not, place herself side by
side with that State and New Jersey and thus cripple the Federal
Government, she gave in her adhesion to the great cause, and by a
majority that, allowing for the absent troops, was greater than it
had been at the first.  Had she acted differently on that occasion,
the war must have come to an end, and the Union must have ceased
to exist.  From first to last, therefore, she has proved herself to be
the Keystone State.
IV. In her Commercial Capital, she has given the most loyal
city of the Union; the one that has, in proportion to its means,
furnished the largest contributions; that one which alone has fed
the tired and hungry soldier, from whatsoever State he has hailed;
and that one towards which the cold shoulder of the Government
has invariably been turned.
Such having been the course which has so recently subjected her
to "punishment," we may now, my dear sir, without impropriety,
look for a moment to the machinery by means of which it has been
administered. As it was at the, time explained to me, it was as
follows: Leader in the action was a British agent, representative
of those "wealthy English capitalists," who furnish "great instruments of warfare against the competing capital of other countries,"




27
bv means of which they "gain and keep possession of foreign
markets."  Iron being abundant and cheap in England, a considerable quantity had been shipped to him, and he was naturally anxious
to economize the contribution to be paid thereon to the Federal
Government-that one for whose destruction his masters were then
so anxiously laboring. As it chanced, some little Western roads
stood in pressing need of iron, and money was then so scarce with
them that the saving of a few thousand dollars thereon was deemed
a matter of much importance.  For accomplishing that saving it
was needed that they should obtain a change in the tariff law.
Forthwith, they and their English friends set themselves to prove
that the wear and tear of roads was twice as great as it really had
been, the producing power of American mills being at the same time
proved to be less than half of what we know to be its actual amount.
Other roads, the managers of which were thus deceived, were led to
lend their aid. To these were now to be added all of the men in
Congress who desired to see the Government reduced to bankruptcy,
and thus was formed a " ring" of size sufficient to "punish Pennsylvania."  The deed was done, and thus was at once destroyed
all confidence in the permanence of a system that had been received
by the world as confirmation by Congress of that remarkable expression of the public will given at the Convention held in Chicago five years since.  For its destruction there was given, as I
believe, the vote of nearly every man who has on all occasions
opposed the Government in its efforts to maintain the national
credit, they well knowing, as I doubt not, that in crippling the iron
manufacture, and in punishing its chief representative, they were
rendering the largest service in their power to the rebellious States.
That this is a correct statement of the means by which that discreditable action was brought about, I entertain no doubt. Admitting for the moment that it is so, does it not present a state of
things of which we have reason to feel much ashamed? In what
other nation, making any claim to civilization, are miserable foreign
emissaries permitted thus to prowl through the halls of legislation?
ere, such things tolerated in England or in France, should we
hold those nations in much respect?  Could they respect themselves?  Can we claim  the existence of anything like self-respect
while such profligate and impertinent meddling with our affairs shall
continue to be tolerated? As it appears to me, we certainly cannot.
Having shown the past of the great State which has thus, and at




28
the hands of a wretched foreign broker, received the "punishment"
she had so well earned, I desire now to ask you to look for a
moment at her present, with a view to the determination of the
question what should be her action in the future.
Four years since, she and Virginia presented the types of two
great sections of the Union, the one north, and the other south,
of Mason and Dixon's line, the Ohio and the Missouri.  On one
side was the freedom which always accompanies the connection of
agriculture with manufactures. On the other was the slavery which
always accompanies that exclusive devotion of labor to the work
of supplying distant markets which Britain and Carolina have
always sought to perpetuate.  On both sides there existed a belief
in the necessity for measures of protection, except in the single, and
then dominant, State of Virginia.  Since then, however, she has
abdicated, and freedom has taken, or is now rapidly taking, the
place of slavery throughout the whole of that region of country, the
richest in the world in regard to metals of almost every kind.  Her
abdication has placed the punished Pennsylvania now in the lead of
all the Mining States, embracing a territory of 600,000 square miles,
throughout which coal, iron, lead, copper, gold, and other metals so
much abound that labor alone is needed for carrying up, within the
next twenty years, their production to an extent far greater than
the present consumption of the entire world.  To the development
of that wealth we have to look if we would sustain the Government
and maintain the Union. To it must we look if we would maintain
our credit and pay our debts. To it alone can we look if we would
sink so deeply the foundations of our great public edifice as to secure
for it that stability of action which is needed to give it permanence.
Upon this, however, through one of her little deputies, Britain
has put her veto, thereby punishing Pennsylvania for making the
attempt.
What now should the latter do?  Should she sit still while the
foundations of our system  are being undermined?   Should she
tolerate a policy thus forced upon the nation by foreign agents, that
must end in her own ruin, and that of her sister States?  Should
she longer tolerate the impertinent interference of British brokers in
affairs of such high importance?  That she should not, I feel well
assured.  What then should she do?
She ought to invite a Convention, representing the people of all
the Mining States, in population comprising probably three-fifths of




29
the whole Union, and in national resources, three-fourths, with a view
to that combination of effort which is needed for enabling us to free
the country from this foreign dictation.  She should proclaim her
intention to seek, by all constitutional means, to make of the Declaration of Independence something of more value than would be
an equal quantity of mere blank paper.  She should say to the
people of the whole of those States, that she desired to secure for
herself and them that protection which would enable them to unite
in supplying the world, both abroad and ar home, with iron, confidently relying upon a growth of demand that would keep pace with
growth of supply, and thus furnish evidence of increasing strength
and advancing civilization. To the people outside of the Mining
States she should say, that the more iron made at home the greater
would be the demand for cotton and sugar, and for cotton and
woollen goods; that among the various portions of the country
there was a perfect harmony of interests; that in her efforts at
stimulating into activity the great resources of the centre, she was
giving her energies towards securing happiness and prosperity to
the people of the north, south, east, and west; and, that in thus
presenting a mode of outdoing England without fighting her, she
was doing that which was required for enabling all to enjoy in
peace the grand results which must be obtained from the suppression
of the great rebellion.
Twice already in great crises has she proved her claim to her
title of Keystone State. Let her do so once again; let her now
do what it is clearly in her power to do, for giving practical effect
to the Declaration of Independence; let her show to the world that
power, wealth, credit, prosperity, and happiness, may be procured
by means of peaceful measures that shall at the same time give us
satisfaction for all past injuries received from abroad; and she
will thereby earn the thanks of every American, every friend of peace,
every lover of his kind, every Christian throughout the world.
Having thus shown what is, as I think, the duty of what is now
the leading iron-producing State, I propose, in another letter, to
show what it is that I deem to be the duty of the iron producers,
and meanwhile remain, with great regard and respect,
Yours, very truly,
HENRY  C. CAREY.
Hon. SCHUYLER COLFAX.
PHILADELPHIA, January 11, 1865.




TIHE IRON QUESTION.
LETTER EIGHTH.
DEAR SIR:
For every ton of railroad bars now made here, the maker is required to contribute for the support of the war and for maintenance
of the public credit, at least ten dollars.  For every ton of British
bars imported the manufacturer is required to contribute for the
same purposes, the sum  of twelve dollars.  For every ton of the
first transported, the producer is required to pay into the treasuries
of American railroad companies, and to the owners of American
vessels-both large contributors to the Public Revenue-a sum
that is, probably, on an average, little less than twice as great as
are the freights from abroad of that British iron which comes in
British ships, owned by the men who are now using their best efforts
in the advocacy, and in the material support, of the rebellion.* Their
vessels pay nothing in the shape of tonnage duties, nothing for the
use of lights that are maintained by us at heavy cost.  Their
owners pay no excise duties on their iron.  They have their coal free
of duty, and at a third of the cost of that used by our ships.  They
are free from the thousand claims upon their means which now compel our people to such high charges as have almost driven from the
ocean the Stars and Stripes.  Those charges must continue if we
would maintain the Public Revenue, and they must become from
year to year more burthensome if we shall, by any error of legislation, diminish the power of any great branch, of manufacture to
contribute to that revenue.
Taking into view, then, the direct and indirect contributions of a
ton of American bars, and placing them side by side with a ton of
those made in Britain, the producer of the former has not alone been
* I have now before me the transportation account of an establishment
within thirty miles of tide-water, and otherwise favorably situated, from
which it appears that the actual railroad charge for carriage of materials
and iron was, last year, $13 40 per ton.




31
reduced to an equality with the latter, but to even a worse position,
the British producer being now, in effect, protected against the
American one, whereas, even under the British free trade tariff of
1846, the mere revenue duty gave the latter some slight protection
against the former.
In opposition to this it will, however, be said, that British rails
cannot now be imported without loss. That is true to-day, because
the premium on gold still remains as a slight protection.  To whom,
however, are the iron producers indebted for it?  Is it to the iron
consumers?  Is it to that greatest of all consumers, the Government
-that one which has just decided that to that premium alone the
producer shall look in all the future for protection against those
" wealthy English capitalists," by whom they have so frequently been
crushed?  It is not; so directly the reverse of this is it, that every
branch of that Government is now striving to put down the price
of gold, and thus to deprive that greatest of all our manufactures
of the little protection that has been left.  But recently, as there
is the best reason for believing, a proposition has been made to it
on the part of these " wealthy capitalists," having specially in view
a great reduction in the price of gold; such a reduction as will, if
it shall be carried into effect, place the whole iron manufacture, and
many other departments of our now so greatly varied industry, entirely at the mercy of the men who "voluntarily incur immense
losses in order to destroy foreign competition, and to gain and keep
possession of foreign markets."  Whether or not that particular
proposition, or any other looking in that direction, will be accepted,
no one can now venture to predict; but it requires little of the spirit
of prophecy to venture on the prediction that if, in the present state
of our tariff legislation, any one at all like it shall be accepted, it
will bring with it such reduction of the Internal Revenue as must
result in bankruptcy of the Government, to be followed by Revolution.
From that Government the iron producer has now, practically,
no protection whatsoever.  Does he, then, owe to it, in its character
of iron consumer, the performance of any act of duty?  As it seems
to me, he does not.  Even in feudal times protection and service
went hand in hand together, the right to demand the latter ceasing
with the power to afford the former. Admitting, then, the facts to
be as I have stated them, are not the iron producers now free for
the adoption of whatsoever measures they may see to be required




32
for self-protection?  That they are so, I fully believe.  Still further
do I believe, that as men who desire to protect the public revenue,
maintain the public credit, and restore the country to a condition of
peace and union, and as citizens anxious to free it from the control
of foreign agitators who are in every manner seeking the accomplishment of disunion, it is their duty to combine together in opposition to the present combination for our subjection, and for the
re-establishment of a state of colonial dependence that, should the
present effort prove successful, will be more complete than it has
been at any period since the Peace of 1783.
So regarding the question that is now to be settled, it is my belief
that a sense of duty should prompt the iron producers to address its
consumers in the following terms:GENTLEMEN:
Forty years since, notwithstanding our wonderful superabundance
of fuel and of ore, the iron manufacture had among us scarcely an
existence.  The largest furnace in the Union could not produce 1500
tons a year, and the total product of pig metal was under 50,000.
In 1828, now but 36 years since, there was passed the first Tariff
Act based on the idea that the producers and consumers of food,
cloth, and iron constituted one great family, all of whose interests were
in perfect harmony, each with every other. To enable the food producer readily to obtain iron, he must have the miner brought near
to him, thus to give value to the coal and the iron lying beneath
his land.  To enable the producer of iron to obtain cloth, it was
deemed necessary that the spinner and the weaver should be brought
from abroad to eat the food while spinning and weaving the wool.
To enable the ship owner to obtain large return freights, it was
deemed necessary to secure to the immigrant certain and well-rewarded employment.  To enable the proprietor to sell his land, it
was deemed necessary to bring the market to his door, and thus
relieve him from the oppressive tax of transportation to which he
had been so long subjected by the British system.  By that tariff
all those things were provided for, the entire harmony of all real
and permanent interests being thus established.   The result exhibited itself in the facts, that before the lapse of a time equal to
that of a single presidential term the consumption of cotton and
woollen goods had nearly doubled, that of iron nearly trebled, while
that of coal had almost tenfold increased.  As a consequence of




33
this there was large consumption of tea, coffee, sugar, and other
foreign commodities, the public revenue was great, the national
treasury was full, and the public debt was in rapid progress towards that entire extinction which occurred in the following presidential term.
The great improvement in the condition of our people which thus
was proved, found its base in the great development of the mineral
resources of the country. Without power machinery could not be
driven, nor without machinery could cloth be made. As a means
of securing that development, the consumers of iron had pledged
themselves to protect its producers against a foreign combination
whose modes of operation are well described in a Report to Parliament, made but a few years since, from which the following is an
extract:"The laboring classes generally, in the manufacturing districts of
this country and especially in the iron and coal districts; are very
little aware of the extent to which they are often indebted for their
being employed at all to the immense losses which their employers
voluntarily incur in bad times, in order to destroy foreign competition, and to gain and keep possession of foreign markets. Authentic instances are well known of employers having in such times
carried on their works at a loss amounting in the aggregate to
three or four hundred thousand pounds in the course of three or
four years. If the efforts of those who encourage the combinations
to restrict the amount of labor and to produce strikes were to be
successful for any length of time, the great accumulations of capital
could no longer be made which enable a few of the most wealthy
capitalists to overwhelm all foreign competition in times of great
depression, and thus to clear the way for the whole trade to step
in when prices revive, and to carry on a great business before foreign
capital can again accumulate to such an extent as to be able to
establish a competition in prices with any chance of success.  The
large capitals of this country are the great instruments of warfare
against the competing capital offoreign countries, and are the most
essential instruments now remaining by which our manufacturing
supremacy can be maintained; the other elements-cheap labor,
abundance of raw material, means of communication, and skilled
labor-being rapidly in process of being equalized."
That pledge having been accepted, large amounts of capital had
been applied to the opening of mines, the building of furnaces and
mills, and the construction of the roads and canals required for
carrying their products to market, thereby laying the foundation of
a coal and iron trade that, had it been permitted to obtain develop3




34
ment, would long since have placed the country in a position to
become the great exporter of iron and of machinery, and thus to
take the place that till then had been occupied by England. That
pledge however, unfortunately for the country, was not redeemed.
Then, as always before, agitation in and out of Congress was
resorted to for the purpose of striking down this great and fundamental industry, and thus relieving the " wealthy English capitalists" from all danger of future interference. As a consequence
of this railroad bars were made free of duty in 1832, and thus were
furnaces deprived of the great market opening in that direction for
their products. Next, and in the following year, the whole tariff
was subjected to a process by means of which iron and all the
manufactures in which it was required were speedily to be deprived
of all protection.   Confidence in the future now wholly passed
away.  Mills and furnaces ceased to be built.  Financial crises followed closely one upon another, with the necessary result of almost
annihilating the value of the vast capital, counting by tens of millions, that had been applied to the development of the two great
industries upon which then depended the whole future of the Union.
It was a destruction of property till then without a parallel in
history, to have been accomplished by the act of the very people
who were destined most to suffer under it-the producers of food and
the consumers of iron.  The one lost his market among the men
who mined the coal and ore and made the iron, and the other found
that the impoverished farmer was unable to buy cloth. In crushing
out these two great industries the iron consumers, your predecessors,
had, Samson like, torn down the pillars of the Temple, and had
involved themselves and their Governments, Municipal, State, and
Federal, in one common ruin.  Railroads, constructed by aid of
eheap and worthless British iron made from a long accumulation
of cinder, fell so much in value that their proprietors were unable to
sell their shares at any price. Workshops were closed, and workmen were everywhere reduced to ask for alms. Spinners and weavers
shared the same sad fate with the miner and the founder.  The
trader, unable to collect the moneys due him, was unable to pay the
bank, and the banker followed him in stopping payment of his debts.
The National Treasury, reduced to bankruptcy, was unable to borrow,
on any terms, the amount required to make amends for the deficiency
thus produced in its then trivial revenue. Chaos had come againthe same chaotic state of things that had preceded the passage of




35
the Protective Act of 1824. It had come, too, as a consequence of
the inauguration of a government of foreign traders who sought
monopoly, and talked of freedom of trade.  How free it was, has
been shown in the passage from the Parliamentary Report we have
above submitted to your consideration. How profitable it had been,
was proved by the fact, that, notwithstanding an increase of onefourth in population, the consumption of iron had scarcely at all
increased.
For all this a remedy needed to be found. It came in the form
of the tariff of 1842, by which the American people once again
pledged themselves to the capitalist, that if he would apply his
means to the development of those great mineral resources of the
country which constituted the foundation upon which, alone, could
rest securely our social edifice, he should be protected against those
" wealthy capitalists" who had so long been accustomed to regard
temporary losses as merely a mode of employing their great "instrument of warfare" in the manner most efficient for the accomplishing of the one great purpose, that of " destroying foreign competition and gaining and keeping possession of foreign markets."
The pledge thus tendered was accepted, and in a period brief almost
beyond belief mines were opened, roads were constructed, and furnaces and mills were built, capable of supplying a consumption
thrice as great as had been that of 1842. With that increase in
quantity came such improvements and economies in the mode of
manufacture as rendered it absolutely certain that, if faith should
be kept with the men who had thus given time, mind, and means
to the most important of all manufactures, but a brief period
would be required to elapse before they should be enabled to supply
the outside world with iron, and thus to furnish new evidence that
protection was the road that led most certainly in the direction of
perfect freedom of trade. At no period in our history had the demand for labor been so great.  At none had there been even an approach to the number of immigrants who then sought our shores.
At none had property commanded so large a price.  At none had
public and private credit been so complete; and yet, but five years
previously, labor had been everywhere in excess; immigration had
tended to die away; property had been wholly unsaleable;' bankruptcy had been almost universal; and the public treasury had
found itself wholly unable to command the means required for compliance with its engagements.




36
As before, however, the public faith was violated, and because of
agitation caused by British agents. Almost without notice the pledge
given in 1842 was withdrawn in 1846, and the men who in full
reliance upon it had applied their millions and tens of millions to
carrying in effect the public will in reference to the great work of
internal development, were once more delivered over, bound hand
and foot, to the " tender mercies of the wealthy capitalists" of England; the men who, while engaged in the work of "overwhelming
all foreign competition," could afford to dispense with interest on
their capital, their competitors meanwhile paying 10, 15, or 20 per
cent. per annum for the use of the money required for carrying
stocks constantly accumulating on their hands while engaged in the
effort at maintaining the unequal contest.
Further even than all this, the Government undertook to furnish
to the foreign producer storage, and under such circumstances as
rendered an iron certificate of deposit equally transferable with a
money one; whereas, the domestic producer was by law deprived
of all modes of transfer not accompanied by an actual delivery of
the property itself. The great iron consumer of the country had
thus, after having pledged itself to the men who had built the furnaces and rolling mills, opened the mines, and constructed the roads,
to protect them in their efforts for the establishment of competition for the sale of iron, entered into an alliance, offensive and
defensive, with parties whose essential object was that of destroying
all that competition, thereby increasing competition for the purchase
of British iron.
Such a course of policy could have but one result. One by one
iron masters succumbed to the pressure. One by one the miners of
coal found themselves obliged to abandon their works. Seeing ruin
ahead they begged of Congress to give them such a sliding scale as
should secure them $50 a ton for sound American iron, twice more
useful than the worthless trash that was then being forced upon the
markets at $40 by their British competitors. Trifling as was this
request it was refused, although but four years before Mr. Calhoun
had said, that if he could be assured that American iron masters
could supply the market at $80 they should have any amount of
protection they saw fit to ask.
American production had now fallen to little more than one-half
the amount at which it had stood on the day in which the British
iron masters' tariff, that of 1846, had gone into practical effect.




37
Soon, however, came the influx of California gold, bringing with
it a large demand for iron, to be supplied, to a great extent, by
foreigners, at whose instance that tariff had been made, and now
arose a competition' for the purchase of their products by which
they largely profited, charging double price for all they furnished.
In three years they sold in the American market a million of tons
of iron in its various forms, and at prices that must have paid
twenty times over for the losses "voluntarily incurred" in the years
from  1848 to 1850.  A  hundred millions of dollars of American
property had been thrown idle, even where not destroyed, to enable
foreign iron masters to tax our people, in increased prices alone,
a sum little short of that amount. In the decade ending June,
1857, there were imported into the country hundreds of millions of
dollars' worth that would have been made at home but for the gross
violation, at its outset, of pledges voluntarily given by the ruined
and broken-down iron consumers of 1842. In that decade there had
been forced upon the English market millions upon millions of dollars' worth of food that ought to have been consumed at home, each
successive increase of export tending to lessen the prices of the great
regulating market of the world, and thus reducing, to the extent of
thousands of millions of dollars, the amount yielded to our farmers
by their crops.*  In this manner was built up the great foreign
debt that paved the way for that terrific crisis of 1857, which resulted in the stoppage of merchants, the ruin of manufacturers, the
closing of mills, furnaces, and mines, and the depletion of the National Treasury, and thus furnished new and more convincing proof
that in the coal and iron of the country were to be found THE PILLARS OF OUR NATIONAL TEMPLE, and that when they are being
torn away the destruction of the entire edifice is close at hand.
To those two great interests the whole period from 1856 to 1860that which succeeded the first excitement consequent upon the dis* Every additional bushel of wheat thrown on the British market tends
to lower the prices there. Every reduction there is followed by a similar
reduction here, as Liverpool prices regulate those of New York, which
regulates Chicago. The reduction, therefore, is felt on the whole crop. It
would be a very small allowance for the reduction of British prices consequent upon American supplies to put it at a shilling-24 cents-per bushel.
This upon 1250 millions of bushels would give a loss to American farmers
of $300,000,000 a year. This is a large sum, and yet it is short of the
truth.




38
covery of California gold-had been one of constantly recurring
crises, ending in the ruin of a large proportion of the people who
had given time, mind, and means to their development.  To the
country at large it had given prostration so complete that, notwithstanding an increase of population to the extent of full two-fifths,
the power of our people at its close to make demand for iron was
scarcely greater than it had been when the British iron master's
tariff of 1846 first became instinct with life and prepared to exert
its powver for mischief. What was its extent shall now be shown.
Fifteen years before, the power of the Alliance between British free
trade and slavery which was now seeking the perpetuation of the
Colonial System, had exhibited itself in an attempt at Nullification.
Ten years later it had presented itself in the form of an almost
entire annihilation of our domestic commerce, and in bankruptcy so
general that it included individuals and banks, State and Federal
Governments.  This time it exhibited itself in a deliberate attempt
at destruction of the Union. Throughout the whole of the period
that had then elapsed since Carolina had abandoned protection and
readopted that system which looked to the confinement of our people
to the raising of raw products for distant markets-the system of
slavery and barbarism-Liverpool had been becoming daily more
and more the centre round which revolved our whole societary
system.  The men of the West exchanged with those of the East,
and those of the South with those of the North, through British
traders —through those very men now who since have been devoting all their means and all their influence to the final achievement
of the one great end they so long had had in view, the dissolution
of the Union.  The more they could destroy the domestic commerce
the smaller must become the threads by means of which its several
sections still continued to be held together. By shutting up the
mines, furnaces, and mills of the North they compelled the South
to look to them  for iron, and the greater the dependence thus
produced the higher was necessarily the cost of machinery, and
the rate of interest, at the North, with constant increase in Southern dependence on Britain for a market for its cotton. British free
trade was thus but the necessary preparation for that movement of
1860 which gave us a war in the course of which rebellion has had
all the aid, material and moral, that British traders could give to it.
Fomnenters of discord during the whole period to which we have
referred, they have now labored for its perpetuation.




39
That war had, however, brought with it a remedy for our evils,
for it had, by reason of the secession of Southern Senators, given
to the people of the loyal States a power for self-protection of
which they had been long denied. The necessity for a re-invigoration of the domestic commerce had now become so very evident
that once more there was given to the men of capital a pledge that
if they would apply their resources to the development of the great
mineral resources of the country they should now be certainly protected against the foreigners by whom American competition for the
sale of iron has been so often and so almost thoroughly destroyed.
Past experience was adverse to the acceptance of such a pledge, faith
having been so often broken that confidence in the national honor
had well nigh disappeared. Nevertheless, it was accepted, and
forthwith commenced a forward movement the rapidity of which
can find no parallel in the whole history of national development
here or elsewhere.  But three years have now elapsed since the
country first began to recover from the first great shock of civil
war, and yet brief as has been the period we are already enabled to
showI. That the production of pig metal has now attained an amount
exceeding 1,300,000 tons; and with so great a development of
resources in regard to both fuel and ores that we are warranted in
saying, that large as is that quantity, it can be thrice increased in
the next four years:
II. That there now exists machinery for the conversion of iron
into bars, and into steel, fully capable of supplying the whole
present demand, accompanied with a power of increase to an extent
equal to any future demand that you, consumers of iron, can, by
any possibility, make:
III. That the value of the product of the mines, furnaces, and
mills engaged in furnishing coal' and iron now exceeds two hundred
and fifty millions of dollars, nearly all of which is given to the
payment of labor employed in the extraction of coal and ore, in
the conversion of the,two into the iron that you so greatly need, or
in the extension of preparations for the supply of both:
IV. That by thus making demand for labor they are offering
large bounties for the importation of men who come here to eat
American food while mining coal or ore, building houses or ships,
constructing machinery of transportation  and  manufacture by
means of which value is given to land, or farms on which they




40
and their children may raise the food required by other immigrants
who follow in their footsteps:
V. That the market for food that, directly or indirectly, is thus
annually made for the produce of the farm, by these two great
branches of industry, is therefore greater in amount than was the
total export thereof to Europe in the whole fourteen years from
the commencement of vitality in the British Iron Masters' Tariff of
1846 to the breaking out of the rebellion of which that tariff has
proved to be the cause:
VI. That, at the lowest estimate, the contributions to the internal revenue, State and national, consequent upon the creation of
this immense market for food and labor, and the increased value
given to labor, land, and their products, must be taken at eighty
millions of dollars; andVII. That, notwithstanding the heavy burthens that have been
laid on this great industry, notwithstanding the extraordinary increase in the price of labor of all descriptions, and notwithstanding
the reduction of the American producer to a level, so far as protection goes, with his British competitor, the latter is even now so far
undersold in our own market that American furnaces and rollingmills supply the whole American demand.
That our duty has been performed, and that all the pledges which
may have been given for us have been redeemed, are facts of which
we thus furnish evidence that cannot be questioned. Has that of
the nation been performed?  Has it kept faith with us?  Has it
redeemed the pledge of protection given at the time when, in the
day of its distress, it invited us to devote our lives, and give our
time, our mind, and our means towards the re-establishment of
that competition with British iron masters for the sale of iron
which, under the blighting influence of the British free trade tariffs
of 1846 and 1857, had so nearly disappeared?  Let us inquire.
In March, 1861, before the imposition of any internal tax whatsoever, the protection to be given to railroad bars was fixed at $12
per ton, and it was then well understood to be the very least that
could with propriety be accepted by the parties who were thus to
be invited to engage in that important and expensive work.
A year later, heavy taxes having been imposed on many articles
used in manufactures generally, there was granted to all of them,
with the single exception of railroad bars, an additional five per
cent.  On that one excepted commodity, which now makes demand




41
for nearly 500,000 tons of pig metal, the increase was limited to
the exact amount of the direct tax, $1 50 per ton, no allowance
having been made, as in other cases, for the taxes on coal, lime,
or other materials, nor for many others, including that on incomes.
We have here the first violation of the pledge given in 1861.
At the last session of Congress, pig-iron was taxed $2 per ton,
equivalent to nearly $3 on a ton of bars.  The taxes on coal and
other materials were largely increased. That on railroad iron itself
was more than doubled.  Others were imposed too numerous here
to recapitulate-the general result being, that our various contributions, consequent upon the existence of the war, have now been
carried up to $10 per ton. Was the duty on foreign iron correspondingly increased?  Was the pledge given in 1861 now redeemed?  On the contrary, such was the agitation on the part of
many of you, gentlemen, consumers of iron, urged thereto by
British emissaries, that the duty on foreign iron was reduced to
exactly the point at which it had stood when domestic iron had
been free from all such charges. Thus for the second time was
the national faith violated, and this time on so grand a scale that
we find ourselves now placed in a position, as compared with the
foreigner, worse than was that we occupied under the ultra free
trade tariff of 1857.  Then, we had some slight protection.  Now,
the foreigner, as we shall show, is protected against us.
Before doing this we must, however, consider the present transient
protection resulting from the fact that the cost of British iron,
and the duties on it, must be paid in gold, the premium thereon
being all that now remains to us as offset against a duplication,
even where not a triplication, of the cost of labor and its products.
No part of that, however, do we hold because of any exercise of
power by Government, from which we yet hold the pledge given in
1861, now waiting to be redeemed.  So far the reverse of this is it,
that time and again has its Finance Minister given his best efforts
for the removal of the only protection thus left to us. Time and
again has it listened to proposals for its removal coming from
foreigners who see therein the only remaining bar to the flooding
of our markets with the produce of foreign mines, mills, and
furnaces. Time and again have there been, on the part of Congress,
efforts at movement in that direction. Time and again have we
been assured by leading Republican journals that with any increase
in the prospect of peace there must be a growing tendency towards




42
the breaking down of that only barrier which stands between the
great fundamental industries of the country and utter ruin.  The
great iron consumer spares no effort for the accomplishment of that
object, and therein all the lesser consumers unite with it heart and
hand.  Busily as the paper consumers are employed in striking
from  under their feet that great branch of manufacture which
furnishes the foundation on which they stand, even more so are you,
gentlemen, iron consumers, engaged in undermining the foundations
on which now stand the paper-maker and the printer, the spinner
and the weaver, the ship-owner and the railroad proprietor, the
machinist and the architect, the city and the county revenues, the
State and Federal Governments. All of these, large consumers of
iron, are now anxiously awaiting the time when, to the already
violated faith of the Union there shall be added that conversion
into gold of the taxes that have been so heaped'up on us-graduated
as they had been by a paper standard-which shall, when connected
with public storage, place the foreign producer in the enviable position of being PROTECTED BY THE AMERICAN GOVERNMENT AGAINST
THE AMERICAN IRON MASTER. All of them seem to be of the belief
that by thus annihilating American competition for the sale of iron
and increasing American competition for the purchase of British
iron their demands must be more cheaply supplied. All of them
have forgotten the lesson taught by the repeated crises of the British
free trade tariffs of 1816, 1833, 1846, and 1857. All of them,
finally, seem to be of the opinion that when the foundation upon
which'now rests our whole social system  shall have been removed,
the edifice will yet remain unharmed.  It is a sad delusion, but as
it exists we find ourselves required to look it fully in the face and
determine what it is that our duty to our country and to ourselves requires us to do in the state of things that has been produced.
With the restoration of peace there will arise a demand for labor
throughout the South that must tend greatly to prevent any material decrease in its price throughout the North.  Tobacco and
cotton fields will thus become competitors with the furnaces, mills,
factories, and other establishments now in existence, and these latter
must for a considerable period of time be compelled to choose between paying high wages, on the one hand, and closing their works
on the other. The present rate of wages in the coal and iron trades
is little less than treble that of England, and how little the latter




43
can be expected to rise is shown by the facts, that the Scottish
miners, at the close of a turn out, on which they expended all their
means to the extent of $7,500,000, have recently been obliged to
give in and return to work under the wages against which they had
rebelled; and, that the very latest Iron Trade Circular (Birmingham) advises its readers, that "the present state of the iron trade
in all parts of the country, both in North and South Staffordshire,
South Wales, and the Cleveland districts, justifies, or rather we
should say, forces their masters to call upon the men for a reduction
of wages."  Such being the case, it is clear that it is not in that
direction we can look for any change by which we might hope to
profit. Further even than this, British wages must rise so soon as
the "wealthy English capitalists" shall have had the way opened
to them for crushing out American competition, and then immigration must, as we feel assured, fall to a point lower than any it has
touched since the terrific crisis of 1842.  In that direction, then, we
cannot look for help.
Taxes must be maintained at the present standard should that
continue practicable. Further, indeed, than this, they must, wherever
possible, be increased, as the nominal amount of business declines
with the decline of prices. Incomes will count far less in gold than
they now do in paper. Sales will do the same, and the gold received,
admitting the quantity of goods sold even to remain the same, will
be one-half less than that now received in paper. The interest on
the debt will remain undiminished. So, too, must it be with soldiers'
and sailors' wages, and the salaries of officers, civil, military, and
naval-all of whom  will then be enabled to purchase twice the
quantity of commodities they can now command.  Looking at all
these facts, it seems to us to be quite clear that to meet the demands
of the Government it will be needed that, wherever possible, the
taxes shall be raised.  That they cannot be reduced is absolutely
certain.
Labor, for a time at least, remaining unchanged, and taxes continuing to be collected on coal, oil, &c. &c., the cost of all the
materials of iron must continue to be so high as to afford to the
iron master only the choice between closing his works, on- the one
hand, and ruin on the other. Transportation, the charge for which
has now been carried up to a point so terrific, will remain for a time
unchanged.  Railroad companies, having tasted the sweets of such




44
high charges, will certainly try the experiment of breaking their
customers before they abandon them.
Interest must rise as bank loans decline in their amount. In all
past crises it has been from three to six times higher than has been
paid by " wealthy English capitalists" when they have been compelled to carry heavy stocks of iron.
Taking all these things together we think it quite safe to say
that, for the first year at least, the cost to the American iron master
of producing and transporting a ton of bars will be greater by
twenty dollars than will be that of a ton produced in England
at the present low rate of wages. Against this there will be a
difference of two dollars in the taxes.  The protection of the
" wealthy English capitalist" will be complete, but where then will
stand those American rivals who have now so completely occupied
the domestic market as to have greatly reduced English wages,
and thus paved the way for immigration from  the British soil
of tens of thousands of her workers in coal and iron, whose services
have so much been needed?  Once here, they and their children
would forever be customers to the farmers of the Mississippi Valley.
Forced to remain where they are they will, as heretofore, eat the
food of Russia or of Egypt.  That they will not come under a
system that protects the British capitalist against his American
competitor is very certain. The importation of such machinery,
capable of making engines, while reproducing themselves, of the
past year, is worth more to the country than all the iron that has
ever come to it from British furnaces since the unfortunate repeal,
under Carolinian threats of secession, of the protective tariff of
1828.
Such being the existing state of facts, and such the prospects, we
have now to determine what we ourselves should do.  To attempt,
under such circumstances, to maintain a competition for the sale of
iron, could result only in a gradual depletion of every ironmaster in
the country, and in the abandonment of his works after he should
himself have been ruined. The day of high prices would then come
round again, but there would exist no person to profit of it. By
withdrawing at once, before the day of exhaustion had commenced,
we should, on the contrary, retain ourselves in a position to resume
work when the day should have arrived for giving a new pledge of
the faith that has been so often, and, as we think, so discreditably
violated. By adopting this latter course, we should retain the




45
power to aid in the re-establishment of that internal commerce upon
which the country is now so entirely dependent for the power to
maintain the Government.  By pursuing the former, we should
speedily place ourselves in a condition to require aid, instead of
granting it. After full consideration, therefore, we have arrived at
the conclusion that we should best perform our duty, both public
and private, by withdrawing from competition with those "wealthy
English capitalists" who are now so anxious to sell cheap iron, and
who have always doubled their prices so soon as they had annihilated their American competitors. You will, therefore, please to
receive this as a notice that from and after the first of March next
our works will be closed, and- you will be free to make such arrangements in regard to the supply of iron as best may suit your convenience.
Should, in the mean time, any of you be disposed to commence
the work of producing iron that is to pay nearly as much in taxes
as the foreign product pays in the form of duties, you can, as we
think, be supplied with any number of furnaces and mills at their
actual cost, and in very many cases at less than cost.
Yours, respectfully,         A. B.
C. D.
E. F.
Such, as it appears to me, is the course that duty requires of the
ironmasters of the country to pursue. Past experience proves that
there can be no reliance on the pledges given to them when the
country needs their aid. Foreign emissaries haunt the halls of
Congress, and their presence there is not alone tolerated, but actually courted, by gentlemen who can see advantage in enabling a
constituent to save a dollar or two upon a few thousand tons of
iron, and who cannot see that the power to buy iron at any price
has resulted from American competition for the purchase of the
products of the farm, and for the sale of those yielded by the mine,
the furnace, and the rolling-mill. It is time, therefore, that they
should now abandon the position they so long have occupied, that
of supplicants for mercy,'and, as the best mode of serving the
country, maintaining its revenue, and thus enabling its Government
to live, take at once the true ground that, in ceasing to grant protection, the iron consumers have lost all claim upon them for the
performance of duties.




46
It may perhaps be charged that this would be combination. It
would be so, and the time has come for it. The country has now
to carry on a war with foreign capitalists and their agents, for the
maintenance of its credit, for the perpetuation of the Union, and for
the conversion of the Declaration of Independence into something
more than a mere form of words, and it will be worsted if the honest
people of the country do not combine for its support. By so doing,
they will speedily be enabled to obtain from foreign nations indemnity for the past and security for the future, for in that combination they will be sure to find the way to outdo England withoutfighting her.
To enable ourselves to succeed we need only that stability of
action which shall give to the capitalists security against foreign
agitation. But a few days since one of the largest importers of
British iron expressed to one of my friends a wish that Congress
should take such decided action as would warrant him in turning
his capital from the importation to the production of this most
important commodity, the materials of which so much abound
throughout the Union.  Let it buf do this and the day will then
be close at hand when the annual production will count by millions of tons, and when our farmers will be relieved of all necessity
for crushing down, in the regulating market of the world, the
prices of all their products. The annual saving thereby produced
would be greater in its amount than the value of all the iron imported into the country since the Peace of Ghent.
In my next I shall ask your attention to the Farmer's Question;
meanwhile, my dear sir, remaining,
Yours, very truly,
HENRY C. CAREY.
Hon. SCHUYLER COLFAX.
PHILADELPHIA, January 16, 1865.












THE FARMER'S QUESTION.
LETTERS
TO THE
HON. SCHUYLER COLFAX,
Speaker of the House of Representatives.
BY
H. C. CAREY.
PHILADELPHIA:
COLLINS, PRINTER, 705 JAYNE STREET.
1865.








THE FARMER'S QUESTION
LETTER FIRST.
DEAR SIR:
IN a former letter the money value of the products of our coal
and iron mines, our furnaces and rolling-mills, was stated as being
little less than two hundred and fifty millions. Following that iron
through the foundries and machine shops we shall find that those
industries are this day yielding to the nation commodities whose
market value certainly exceeds four hundred millions; and then
following their proceeds we find that nearly the whole is distributed
among the men who own the land and those who cultivate it.
Hence it is, that whenever those two great industries prosper the
farmer prospers; and that when they suffer he too becomes a heavy
sufferer.
Are the facts so? it may here be asked.  Are their proceeds so
applied? Let us see.
0  tis Nast sm W   ey arge pyropo ox  is di tributd  aaong
the men who mine our coal and ore-men who aid in transporting
them-men who aid in converting the two into iron-men who
puddle the iron and roll the bar-and other men who convert the
bar into hoes, spades, axes, knives, and engines. /hat becomes
of it then?  They buy food for their families and themselves, all
of which comes from American farmers.  They purchase clothing
made of Western wool or Southern cotton, and converted by means
of men and women who tend the spindle and the loom while eating
the food of Iowa and Minnesota.  They buy houses composed of
bricks and lumber, the one made, and the other cut and brought to
market, by men who eat the pork of Ohio and the corn of Indiana
or of Illinois. They buy newspapers whose types and paper represent the hams of Kentucky, the wheat of Pennsylvania, and the
butter and cheese of New York, while its press represents the food
consumed in workshops which, in the wonderful character of the
1




2
machines turned out, furnish to the world such conclusive proof that
were American farmers but true to themselves American ingenuity would speedily relieve them from the necessity for employing
themselves in raising food for distant markets, the proper work of
the barbarian and the slave, and of them alone.
A part of this vast sum goes, however, to the owners of land
that yields coal, ore, or lime  another, to those who own furnaces,
in which the three are converted into iron, or shops in which
iron is converted into machinery to be used by the farmer, the
weaver, the locomotive builder, and the builder of ships; and we
may now inquire what becomes of them.  These men have families,
and those families likewise need food that comes from American
farms; clothing all of which, were our farmers true to themselves,
would represent the products of American agriculture; houses
which represent the labors of brickmakers and bricklayers, lumbermen, carpenters, masons, workers in coal, and workers in iron, all
of them  men who help to make the great market in which exchanges of food to the annual extent of thousands of millions of
dollars are now made.  The profits of some of the owners of the
great works from  which are now annually turned out so many
millions of tons of coal, so many hundreds of thousands of tons of
iron, and so many engines, are, however, as we know, greatly in
excess of their expenditure.  What becomes of the surplus?  A
part of it is applied to the extension of their works, and thus is
created demand for labor, enabling many to obtain food and clothing who otherwise might be unemployed and therefore unable to
purchase either. Another part goes to the making of railroads,
thus creating a further demand for labor, and giving the farmer a
purchaser for his pork and his corn while at the same time increasing his facilities for reaching the distant markets. Another part,
perhaps, is lent to the Government, and thus aids it in paying the
farmer for the food, the clothing, and the machinery required by
our armies in the field.  Thus, of the whole five hundred millions,
large as is the sum, it may, as I believe, be safely assumed that more
than ninety per cent., and perhaps even ninety-five, goes directly,
or indirectly, to the payment of labor that is employed in clearing
and cultivating the land.
Turning now back to the period of the British free trade tariffs
of 1846 and 1857, we see that hundreds of millions worth of
foreign iron had been imported-part of it in the form of knives




3
and razors, very much of it in that of mere pig metal, and hundreds of thousands of tons in that of rails to be laid on lands the
larger part of which abounded in fiel and in ore waiting alone the
application of labor.to their extraction and conversion. Why was
this? Because the system of that day had been framed in obedience
to orders issued by the men who since have been employed in building pirate ships to be used in driving from the ocean the stars and
stripes; in fitting out other ships for running our blockade; and
generally in giving to the rebellion that aid, material and moral, by
help of which a war that should have been finished in a year has
been prolonged throughout a whole Presidential term, and at a cost
of hundreds of lives and hundreds of millions of property that might
otherwise have been saved.
For the iron thus imported we have paid hundreds of millions
of dollars.  What became of them?  Did the people who mined
the coal and the ore employed in making that iron eat American
wheat? Did they wear clothing composed of corn raised in Iowa
and wool sheared in Ohio? Did they occupy houses built with
lumber representing the food of Michigan or Minnesota?  Did
the workmen who built the houses they occupied consume potatoes
raised in Maine, or cabbages raised in Pennsylvania? For an
answer to these questions I give you the following figures representing the wheat, the wool, the flour, the pork, and the lumber
exported-not alone to the country from which we had the iron,
but to France, Belgium, and Great Britain, the countries which have
deluged us with the silks, the woollens, the cottons, and the iron
by means of the purchase of which we have been involved in a
foreign debt of $500,000,000 that now makes upon us, for the mere
payment of interest, a demand to meet which requires not less than
$30,000,000, a sum more than half the product of California. The
years I have taken are the three which immediately preceded the
breaking out of the great rebellion. The country had then for more
than a decade enjoyed the blessings of that British free trade
which, as we were assured in 1847, was destined, before the lapse
of twenty years, to make a demand for American food whose annual
amount would count by hundreds of millions of. dollars. To what
extent those predictions have been realized will be seen by the
following figures:



4
Total Export.   To Great Britain, France,
and Belgium.
1858.
Pork.  $2,852,492                         $360,000
Indian corn...  3,259,039          2,163,000
Lumber...  1,240,000            215,000
Wheat..9,061,000                        6,436,000
Wheat flour... 19,328,884             5,006,000
Wool.    389,512             15,000
1859.
Pork....  3,355,746            563,000
Indian corn...  1,323,103            281,000
Lumber...1,001,216              247,000
Wheat..2,849,192                   1,402,000
Wheat flour... 14,493,591            1,147,000
Wool.    355,563            129,000
1860.
Pork.                  2,852,942           371,000
Indian corn...  3,259,039          1,894,000
Lumber...  1,240,425            475,000
Wheat..9,061,504                        6,389,000
Wheat flour..  19,328,880               5,133,000
Wool.    211,861           141,000
Total.. $95,463,989       $32,367,000
Annual average. 31,821,330          10,789,000
The annual average, as here is shown, of the demand for these important commodities by the three great manufacturing countries
of Europe, was less than $11,000,000, or little more than 16 cents
per head of their total population. A single hundred thousand of
their people attracted here by large demand for labor and liberal
wages, would furnish a market for the various products of the land
much greater in its amount.
The great European market for food that had been promised to
our farmers had, as we see, totally failed.  Had the deficiency of
demand thus produced been in any manner made up by immigration?
On the contrary, the number of foreigners coming here to sell their
labor was less in those years, as has been shown in a former letter
-less, too, by thirty per cent.-than it had been in the year in
which the British iron master's tariff of 1846 first became endued
with power for mischief.
Under the free trade tariff of 1841-2 the markets furnished by
the coal and iron industries of the country could but little have ex



ceeded $50,000,000.  Under the protective tariff act of 1842, that
market thrice increased in size, having, in less than half a dozen
years, grown to $150,000,000. In the same time immigration had
also thrice increased, and as every immigrant became a consumer on
the moment of his arrival, whereas one year at least must elapse
before any one of them could make the slightest addition to the
quantity of food produced, it followed that to the whole extent of
their consumption offood, of wool, of cotton, of lumber, and of all
other of the products of the land, they constituted an addition to
the farmer's market. Admitting that their average power to earn
wages amounted to but $150 a year, the.addition amounted to
$25,000,000.  The movement had, however, then only just commenced.  The more iron made in 1846 the greater was the quantity
required in 1847; and the more made in this latter year the greater
would have been the quantity required in 1848,'49, and'50; and
the greater the immigration of 1847 the more would have been its
tendency to increase in each and every of the succeeding years, had
protection been maintained.  Had it been so, our coal and iron industries would this day amount to more than $1,000,000,000, making
demand to nearly the whole of that vast amount for the fruits of
the earth, while immigration would by this time have been giving
us a million per annum of European workmen, consumers, from the
moment of their arrival, of the products of American farms, and
busily engaged in the work of further increasing by procreation the
number of mouths requiring further supplies of food and wool.
We were told, however, that iron masters were too rapidly growing rich; that the taxes imposed for their benefit on iron consumers were so great that they amounted to more than the whole
price at which their finished products could be bought; that the
farmers were thus made mere "hewers of wood and drawers of
water" for great monopolists; that protection closed the markets
of Europe against their "breadstuffs;" that we were essentially an
agricultural people, and so likely to remain; that we therefore
needed free trade; and that, for all these reasons, the protection
should be abandoned.  It was abandoned, and we have now the
result in the facts, that we had given up a domestic market among
the producers of coal, iron, copper, lead, and cloth, which then
amounted to hundreds of millions, and would since then have
arrived at thousands of millions, and had, at the close of the system




6
inaugurated in its stead, obtained in exchange a market which took
from us of pork, corn, wheat, flour, wool, and lumber, less than
$11,000,000 a year, or one-third of a dollar per head of our then
population.  Such had been the results obtained in 1860 by means
of agitation on the part of those British agents by whom had
been represented in 1846, in the Halls of the Capitol, those wealthy
capitalists of England whose first desire was that food might be
obtained more cheaply while iron should command a higher price.
Did they obtain their end? To obtain an answer to this question
we may here compare the prices in the New York market at the
commencement and the close of that period of the British free trade
system  which dates from December, 1846.  As given in a table
now before me, they are as follows:1817.    1858.    1859.    1860.
Wheat flour...  7 68       4 25     5 50     5 50
Ryeflour...  5 06          3 40     3 75     3 50
Corn meal...  4 62        3 50     3 90     3 80
Pork....14 93    18 35    16 35    17 75
Mess Beef...12 00    11 50         8 25     5 25
Butter....    25              25       221      18
In the period intervening between the first and last of these
dates, California and Australia had given to the world probably
$800,000,000 in gold, and yet, instead of increasing as it should
have done, the power of the farmer to obtain money in exchange for
his products had largely diminished.
The reason for this was to be found in the fact, that determining
to go abroad to get his iron and his cloth he had destroyed his
great market.  To what extent this had been done you may, my
dear sir, judge for yourself after referring to an extract from an
Address of one of the Charitable Societies of New York, given in
a former letter, but here reproduced because of its important bearing
on the question now before us:" Up to the present the Association has relieved 6,922 families, containing 26,896 persons, many of whom are families of unemployed mechanics and
widows with dependent children, who cannot subsist without aid. As the
season advances the destitution will increase. Last winter it was thrice
as great in January as in December, and did not reach its height until the
close of February."
This paper bears date more than a year previous to the great
crisis of 1857.  Subsequently thereto the state of things was very




far worse than that above described. Our public warehouses were
filled with foreign merchandise, always ready to supply the material
of auction sales. Our auctioneers, constantly at work, supplied
wholesale and retail dealers, at prices fixed by themselves.  Our
shops were gorged so thoroughly with foreign food and labor in
every form, from the coarsest woollens to the finest silks, as to leave
no place for the domestic food and labor that sought a market.
Such was the mode of "warfare," by means of which "the most
wealthy capitalists" of Britain had been enabled to "overwhelm all
foreign competition in times of great depression, and thus to clear
the way for the whole trade to step in, when prices revived, and to
carry on a great business, before foreign capital could accumulate to such an extent as to be able to establish a competition in
prices with any chance of success."  Such, my dear sir, was the
sort of warfare, by means of which Ireland and India had been
ruined, without the necessity for firing a gun, or drawing a sword.
Such was the warfare against which your fellow-citizens, for ten
years previously, had sought, but vainly sought, to be protectedthe only answer to the petitions having been, that the duties of the
government were limited to the task of protecting itself, leaving the
people to protect themselves as best they could.
As a consequence of this it was: that after a growth of pauperism steadily continued during all those years, it suddenly so much
expanded that hundreds of thousands of our people were wholly
unable to sell their labor, or to purchase food and clothing:
The factories, mills, mines, and furnaces, the cost of which had
counted by hundreds of millions of dollars, were then closed, and
likely so to remain:
That the power to diversify the employments of society was then
declining from day to day:
That, simultaneously therewith, we were adding to our population
a million of persons annually:
That the necessity for resorting to the labors of the field, as
affording the only means of support, was steadily increasing:
That the supply of food tended, therefore, to augment, as the
domestic consumption declined: and
That its price tended, therefore, steadily to fall, and was, at the
outset of the war, likely to be lower than had ever yet been known.
The production of iron had largely decreased, as under such




8
circumstances might readily be supposed. What, however, was its
import?  Did the figures there presented furnish any evidence of
increase of power on the part of the farmer to purchase hoes or
ploughs, or on that of the miner to purchase engines? Let us see.
In the three years above referred to there was imported of iron
and manufactures of iron, to the extent of $45,000,000, giving an
annual average of $15,000,000, or less than fifty cents per head of
our population.  In the hope to secure some trifling reduction in
its price our farmer had been persuaded to throw away a market
that then amounted to hundreds of millions, and that would, before
1860, have reached thousands of millions, and now  the whole
amount taken  from  him  of his chief products, by the three
principal manufacturing nations of Europe, was barely sufficient to
pay for the little iron tiOat he cIuld a:%ord t2 o pwxyase  ani the
freight upon it; that freight, too, paid chiefly for the use of British
ships.  As a necessary consequence, the country was running in
debt from  day to day more deeply, and the interest on that debt
was even then absorbing more than  half the gold yielded by
California.  Hence it had been that the prices of the farmer's
products had fallen in price as the supplies of the precious metals
had so rapidly increased. Busily engaged in selling skins at sixpence each, and taking pay therefor in tails at a shilling, he had
been giving all his efforts at increasing the power of that great
combination of "wealthy English capitalists," the primary object
of all whose operations had been that of depressing the prices of
food and raising the price of iron-diminishing still further that
of the skins and raising still higher that of the tails.
The most useful to the British traders of all the British colonies
is that one which embraces these United States.  Content with the
word''independence," Americans take no care to make themselves
or their country independent. So far the reverse is it,'indeed, that,
while talking largely of the Monroe Doctrine, they permit their
laws to be dictated to them by British agents, representing " wealthy
capitalists," who now seek to perpetuate throughout this Western
Continent the system so well described in the following passage
by one of their predecessors of the last century:"Manufactures in our American colonies should-be discouraged,
prohibited"   *   *   "We ought always to keep a watchful eye
over our colonies, to restrain them from setting up any of the manu



9
factures which are carried on in Great Britain; and any such
attempts should be crushed in the beginning."  *  *  "Our colonies are much in the same state as Ireland was in, when they-began
the woollen manufactory, and as their numbers increase, will fall
upon manufacturesfor clothing themselves, if due care be not taken
to find employment for them, in raising such productions as may
enable them to furnish themselves with all the necessaries from us."
*  *  "As they will have the providing rough materials to themselves, so shall we have the manufacturing of them.  If encouragement be given for raising hemp, flax, &c., doubtless they will soon
begin to manufacture, f not prevented.  Therefore, to stop the progress of any such manufacture, it is proposed that no weaver have
liberty to set up any looms, without first registering at an office,
kept for that purpose."   *   *   "That all slitting-mills, and
engines for drawing wire or weaving stockings, be put down."  *  *
"That all negroes be prohibited from  weaving either linen or
woollen, or spinning or combing wool, or working at any manufacture of iron, further than making it into pig or bar iron. That
they also be prohibited from manufacturing hats, stockings, or
leather of any kind.  This limitation will not abridge the planters
of any liberty they now enjoy-on the contrary, it will then turn
their industry to promoting and raising those rough materials."
*  *  "If we examine into the circumstances of the inhabitants
of our plantations, and our own, it will appear that not one-fourth
of their product redounds to their own profit, for, out of all that
comes here, they only carry back clothing and other accommodations for their families, all of which is of the merchandise and
manufacture of this kingdom."  *  *  "All these advantages we
receive by the plantations, besides the mortgages on the planters'
estates and the high interest they pay us, which is very considerable."-(GEE on Trade, London, 1750.)
A century earlier the Germans had ridiculed the people of England as men who sold skins for sixpence and bought back the tails
at a shilling. Protection had changed all this. It had brought the
English artisan to take his place by the side of the English farmer,
and now the English trader desired to do by the American colonist
what the German had previously done by him-giving his whole
efforts to the work of compelling the sale to him of skins at sixpence and the purchasefrom him of tails at a shilling.  Thus far
they had, with us, most thoroughly succeeded, and had done so
by help of the very farmers by means of whose plunder they had
obtained the power which recently has been so much increased, and
of the exercise of which we have now so much reason to complain.
To that great error on the part of American farmers we have




10
been indebted for the present war. What are the facts bearing on
their present condition and future prospects, that have been developed in its course, and what the measures required for enabling
us to outdo England without fighting her, and thus achieve an independence that shall be something more than a mere form of words,
I propose to show in another letter, meanwhile remaining,
Yours, very truly,
HENRY C. CAREY.
Hon. S. COLFAX.
PHILADELPHIA, January 20, 1865.




THE FARMER'S QUESTION.
LETTER SECOND.
DEAR SIR:THE period, 1858-60, embraced in the returns given in my last,
was one of peace, and much of the food of the West yet continued
to pass southward on its way to European markets.  Wheat took
the form of flour, and corn became pork, for the supply of men engaged in raising and forwarding cotton.  The latter went abroad,
there to be combined with Polish and Russian wheat, to be thence
returned to the poor farmer of Wisconsin who was glad to obtain
even a single yard of indifferent cotton cloth in pay for a bushel of
corn that had been exchanged in the market of Manchester for fifteen or twenty yards. He was thus giving whole skins for sixpence
and taking his pay in tails at a shilling; as a consequence of which
he was always in debt, and always glad to borrow a little money,
even when obliged to pay for the use of it at the extraordinary rates
of 20, 30, 40, 50, and even, as I have understood, 60 per cent. per
annum.  Why was this?  Not certainly because of any absence
of fertility in the soil, that of the Mississippi Valley being equal in
all natural powers to any other in the world. Not because, as in
Europe, of any necessity for paying rent to a greedy landlord, for
he had already attained to the position so much coveted by the
working class of Europe, that of landed proprietor. Why then was
it?  Because he had, of his own motion, made himself the mere
serf of the class whose operations were so well described in the passage given at the close of my last; of that class which desires that
food may be cheap and cloth and iron dear; of that one which
seeks to compel all the farmers of the world to bring their products to
a single diminutive market, there to sell what they have and to buy
what they need; of that one which talks of free trade while seeking
to create for itself an absolute monopoly of machinery of conversiou
and exchange; of that one, in fine, which now stands indebted to him




12
and others like him for all the power which has, in the past four
years, been used for the destruction of our commerce on the seas,
for the maintenance of the rebellion, and for the annihilation of that
Union upon whose prolonged existence is now dependent the whole
future of the laboring classes not of America alone, but of the world
at large.
The war having closed the South against the products of the
West, there arose a necessity for seeking a market somewhere in
the East. Where, however, could they have even looked for it, had
we continued to maintain that British free trade system under which
we had been made so almost entirely dependent upon distant nations
for supplies of cloth and iron?  Look as they might it could
nowhere have been found.  Happily, secession brought with it, and
on the instant, a power on the part of the North which speedily exhibited itself in the re-adoption of that protective system by means
of which the value of the products of our coal and iron mines, our
furnaces and rolling mills, has been carried up to two hundred and
fifty millions of dollars, making demand, in a thousand ways, for the
fruits of the earth to little short of that vast amount.  The effect
of the creation of this great market exhibits itself in the Message
of Governor Yates, of Illinois, just now delivered, the following
extract from which is recommended to the careful consideration of
the farmers of the country:"As a State, notwithstanding the war, we have prospered beyond all
former precedents. Notwithstanding nearly two hundred thousand of the
most athletic and vigorous of our population have been withdrawn from the
field of production, the area of land now under cultivation is greater than
at any former period, and the census of 1865 will exhibit an astonishing
increase in every department of material industry and advancement; in
a great increase of agricultural, manufacturing, and mechanical wealth;
in new and improved modes for production of every kind; in the substitution of machinery for' the manual labor withdrawn by the war; in the
triumphs of invention; in the wonderful increase of railroad enterprise 
in the universal activity of business, in all its branches; in the rapid
growth of our cities and villages; in the bountiful harvests, and in an
unexampled material prosperity, prevailing on every hand; while, at the
same time, the educational institutions of the people have in no way declined. Our colleges and schools, of every class and grade, are in the most
flourishing condition; our benevolent institutions, State and private, are
kept up and maintained; and, in a word, our prosperity is as complete
and ample as though no tread of armies or beat of drum had been heard
in all our borders."




13
It may be said, however, that the Government demand for food
has had much to do with the change for the better that is here exhibited.  Whence, however, has the National Treasury obtained the
means by which it has been enabled to pay its troops and buy their
food?  Whence have come the vast sums required for fitting out
our present enormous fleets? Whence have come those required for
constructing roads in Illinois dnd other Western States?  Why is
it that the people have been, in time of war, enabled to do so much
when in the previous time of peace they could do so very little?
For an answer to all these questions, my dear sir, allow me to ask
you to look to the following exhibit of the movements of the New
York savings banks in the last seven years:No. of Banks. Amt. of Deposits.   No. of Depositors.
Jan. 1, 1858... 54         $41,422,672        203,804
"   1859... 56          48,194,847         230,074
"   1860... 64          58,178,160         273,697
"   1861... 71          67,440,397         300,693
"   1862...74           64,083,119         300,511
"   1863... 71           76,538,183         3'47,184
"   1864...71           93,786,384         400,194
We have here 400,000 little  capitalists, the average of whose
savings is but $235, giving us a total of little less than a hundred
millions of dollars.  Two of those banks are specially devoted to
the care of the funds of immigrants, and the following figures exhibit the extent of their operations:Resources.     No. of Depositors.
Jan. 1, 1860...  2,442,048           10,360
"   1861....  3,420,321           14,838
1862...  3,471,777            14,365
"   1863....  4,475,291           18,621
"   1864...     6,056,600        24,151
Turning now to Massachusetts, we find the increase of deposits
in the four years, 1860-63, to have been more than a third of the
total amount deposited in all the long period that previously had
elapsed. The actual increase was $17,503,000, of which no less
than $12,150,000 took place in'62 and'63. The mere savings of
two States, in two years, thus present us with an increase of capital
exceeding $40,000,000, a sum  that is one-half as great as that of
the whole British capital that, twenty-five years since, had been
applied to the building of the mills, workshops, and warehouses,




14
and to the creation of the machinery, required for the then gigantic
cotton manufacture.
When furnaces and factories are being increased in number labor
is in demand, wages rise, immigration grows, and the power of accumulation increases; and hence it is, that with every step in that
direction we witness a manifestation of greater power for further
progress. From'58 to'61, notwithstanding a large increase in the
number of New York banks, and consequent wide extension of their
field of operations, the increase of deposits was but $26,000,000.
The first year of the war brought with it a shock that caused suspension of business, accompanied by great decline of wages, and the
result, as we see, exhibited itself in a large diminution of deposits.
The second year of war brought with it that revival of demand for
labor which had always previously attended the re-establishment of
protection, and with it came an increase of deposits amounting, in
the two succeeding years, to little less than $30,000,000.  That
increase, too, was obtained without any extension of the field of
operations, the number of banks in the last year having been actually less than it had been two years before.
With the increased demand for labor consequent upon the creation
of a great domestic market for food the whole country has become
one great savings' bank, as'a consequence of which the State and
Federal Governments have been enabled to collect thousands of
millions where before they could scarcely obtain hundreds, the people meanwhile creating for themselves machinery of production and
transportation to an extent greater than ever before had been created
in the same period of time in any country of the world.*
It may be said, however, that there has been a European demand
for our provisions and our bread-stuffs, and such has certainly been
the case.  Just at the moment when the Southern demand ceased
Providence was pleased, in mercy to us, to affiict the people beyond
the Atlantic with two successive crops both of which were much
below the average, and thus was created one of those unexpected
demands for which, under the British free trade system, our far* In 1857, there were in operation 26,210 miles of railroad. In 1861,
31,800, giving an average increase of 1,120 miles per annum. Last year
there were 35,000, giving an annual increase of 1,067 per annum-that
obtained, too, at a time when the demand for services in the mills, mines,
and factories of the country, and in the field, had doubled, even where it
had not trebled the price of labor.




15
mers are compelled so fervently and so frequently to pray, though
knowing well that short crops abroad must bring famine, distress,
and ruin to thousands and tens of thousands of men who, like themselves, have wives and children  to support.   The momentary
effect exhibits itself in the fact that in the three years ending June
30, 1863, our exports of the principal articles of food were as
follows:1860-61        1861-62        1862-63
Wheat..$38,313,624      $42,573,295     $31,430,270
Flour...  24,645,289       27,534,677      25,458,989
Corn...   6,890,865        10,387,383       3,321,526
Pork...   2,609,818         3,980,153       4,334,775
Hams and bacon      4,729,297     10,004,521      15,775,570
$77,188,893    $94,480,029     $80,321,130
What, however, were the prices at which these commodities were
given to the European world?  What was the great bonus that
even then, in times of scarcity, was paid to American farmers in
return for closing up in 1846 a market among our miners of coal
and iron, lead and copper, that would before that day have amounted
to thousands of millions of dollars?  Let us see.
As given in the Reports of Commerce and Navigation, the export
prices, reckoned for the first year in gold, and for the subsequent
ones in paper, were as follows:S160-61     1861-62     1862-63
Wheat, per bushel..$1 22           $1 29       $1 33
Flour, per barrel...  5 00         5 70        6 40
Corn, per bushel...    62            55          66
Pork, per barrel...17 00          13 00       13 00
Hams, &c., per pound..    10             8~         101
Deducting from these prices the heavy charges of transportation
and converting the balance into gold it must be clearly seen that it
is not in that direction we are to seek the cause of the improvement
now observed in the condition of the agricultural population of
Illinois and other loyal States. Where then shall it be sought?
In the direction of the production of commodities that do not bear
transportation, and that are dependent for a market upon the
domestic demand alone. Read over, my dear sir, the passage above
given as descriptive of the condition of Illinois, and you will see
that it indicates demand for commodities whose bulk, or whose de1 icacy, forbids transportation.  Potatoes and turnips, of which the




16
earth yields by hundreds of bushels to the acre, cannot be raised
where the domestic market has no existence.  When, however, the
coal mine, the lead mine, or the iron ore mine, comes to be opened,
the market is at once created, and it extends itself with every new
furnace, every new factory, every new rolling mill, until at length
the farmer everywhere obtains the power to determine for himself
whether to raise thousands of bushels of potatoes, or hundreds of
bushels of wheat; and then it is that the Declaration of Independence becomes to him something more than a mere form of words;
then it is that it becomes a reality and a blessing.
That independence, however, is precisely what the ".wealthy.English capitalist" does not desire that he shall obtain. What he
desires is, that the distant farmer shall have no market near
him; that he shall be compelled to limit himself to the production of commodities of which the earth yields little, and that can,
therefore, go to that distant market in which Russian, Polish,
German, Egyptian, and American food producers are to contend
with each other as to which shall sell most cheaply-then again
competing with each other for raising the prices of all the commodities they need to purchase.  In this manner it is that he buys
skins at sixpence while selling tails at a shilling.  By this it is
that he is enabled to put into his own pocket three-fourths of the
produce of the labor of those poor and distant serfs to whom occasionally, and as a great favor, he lends a little of his surplus profits
to be applied to the making of new roads by means of which population may be more widely scattered, while he himself is thereby
relieved from the danger of any increase in the competition for the
purchase of wool, rags, or corn, or for the sale of cloth and iron,
the commodities of which he is the owner.
The market whose prices for food regulate those of all the world
is that of Great Britain. Whatever raises prices there raises those
of New York and Boston, Chicago and St. Louis.  How trivial
was the quantity that in the first three years of the war was absorbed
by that market, and how low were the prices obtained, have above
been shown.  Why were prices, at a time of real scarcity, so very
low?  Because we had so much to sell.  Had only one-fourth of
what we sent been retained at home for the consumption of men
engaged in mining coal and ore and making iron, while another
fourth had been retained for the supply of men, women, and children
coming from abroad to work in our mines, our factories, and our




17
fields, we should have obtained almost as much for the remaining
half as we did obtain for the whole.  That, however, is not all.
Had we sent but one-half the quantity, and had the difference of
price thus produced been but a single shilling sterling per bushel,
that difference would have been felt by every bushel of the whole
thousand millions produced in the loyal States, giving to be divided
among their producers an additional two hundred and fifty millions
of dollars, and enabling them to buy more cloth and more iron,
and thus to live better, while so improving their machinery of production as to give them greatly more to sell in succeeding years.
Had it made, as it certainly would have done, a difference of
eighteen pence a bushel, the difference to our farmers-leaving
altogether out of view corresponding differences in the prices of
all their other products-would have been little less than four
hundred millions.  That amount, at the least, is it that they have
paid in each of the last three years, for having, during a long period
of years, so repeatedly crushed out the cotton and woollen manufactures, the coal, iron, and other important branches of industry;
and in that way it has been that they have built up, at their own
cost, "the large capitals" which have so systematically been used
by our British friends as "the great instruments of warfare against
the competing capital of other countries." They, themselves, make
the whip whose lash they so severely feel. They, themselves, fashion
the club by means of which they are struck down at the feet of their
foreign masters. They, themselves, by tolerating among their Representatives a perpetual agitation of the British free trade question, are now paving the way for a return to a state ot colonial
subjection greater than has existed at any period since the peace of
1783.
For proof of this allow me now to request you to look at the
consequences that must inevitably follow from the recent action of
your House in regard to the paper manufacture.  Under that
action printing paper can no longer be made in this country, and
we have now to choose between going abroad for $25,000,000 of
paper, or dispensing with our usual supplies of journals and of
books.
Under the action of the last session we shall, whenever the price
of gold falls, be obliged to go abroad for, as I believe, the whole of
the iron now produced, and the whole of the coal now employed in
making iron.  Taking these two items together, and placing them
2




iv
at a gold value of only $150,000,000, the question now arises as to
how we are to pay for them?  Seeking an answer to this question
we are led naturally to look to the state, in regard to prices and
demand, of the great regulating market of the world, and, fortuinately, one of the New York journals of the day furnishes, in an
extract from a Liverpool letter, all the information that we need,
as follows:"The wheat market continues without a symptom of revival. If your
supplies were to fall off Germany would at once begin to increase her consignments to us.  The possibility of a rally in our home prices is thus effectually prevented, and the year closes with the price of bread at a point lower
than has been lknown within modern experience."
Germany and America thus contending for the supply of a diminutive market, prices are "lower than have been known within all
modern experience," and the market presents no "symptom of revival."  In this state of things it is, that we are arranging for
drawing from  Europe hundreds of millions of dollars worth of
paper, coal, and iron, to be paid for by crowding on the British
market all the flour and all the pork and beef now employed in
fabricating the first, and in mining and converting the others!
Such being the tendency of all our present legislation, am I, my
dear sir, much in error in asserting that, often as our farmers have
been "brayed" in the British free trade "mortar" their "foolishness" has not yet "departed from them?"
All that has thus far been done towards increasing our dependence on the diminutive British market constitutes, however, but one
of the steps in that direction.  The repeal of the paper duty has
rendered necessary a movement towards the abolition of all duties
affecting the materials required for the paper manufacture.  Of
these soda ash, of which our consumption is probably 40,000 tons,
is one of the most important.  Why have we not made it?  Why
do we not now make it?  Why is it that the Iowa farmer has been
using his corn as fuel when there were thousands and tens of thousands of European  wme  who would gladly have come avud eaten it
while engaged in converting into soda ash the coal, the lime,
and the salt that underlie so much of the land of the Mississippi
Valley? Because the country gives to the capitalist no security
that he shall not be crushed out of existence after having expended
hundreds of thousands of dollars in the erection of works required
for the conversion of raw  materials into the commodity we so




19
greatly need! In the absence of such security, and in the presence
of agitation such as has now succeeded, so far as your House, my
dear sir, is concerned, in crushing out one of the greatest and most
fundamental of our industries, we shall be required to continue year
after year to give to our masters, the "wealthy capitalists" of England, corn in its natural state at a few cents per bushel, buying it
then back again in the form of bleaching powders at pence per
pound-thus giving the skin for sixpence, and repurchasing the
tail for a shilling.
It being required of us that we now abandon the protective
system, and look once more to Europe for that great market which,
as we were assured in 1847, was before this time to take from us
"breadstuffs" to the annual amount of hundreds of millions, it may
be well here to inquire what it is that that system has done for our
farmers in the short period that has elapsed since the abdication of
*Southern masters gave to the North once more the power of selfprotection.
The total export from the port of New York, exclusive of specie,
in the week ending January 24, is given by the Evening Post at
$6,33,663.  Of this there appears to have been of breadstuffs and
provisions going to those European markets from which we are
likely henceforth to be obliged to draw our paper and our iron, as
follows:Beef...   500 tierces.
Flour........ 110 barrels.
Bacon.. 49,228 pounds.
In the same week the exports from Boston amounted to $481,447,
in which were included 151 tubs of butter for Liverpool.  Of an
export, from those two ports, of nearly seven millions, the whole
amount of breadstuffs and provisions for Europe did not exceed
$30,000, or less than one-half of one per cent. How the remainder
of the vast sum was made up will be seen on an examination of the
following list of exports to the Argentine Republic, which presents
a very fair specimen of the whole, as given in the Shipping List:



20
Sewing Machines.    cases   142 Drugs..  pkgs.  185
Hoop Skirts....   21 Glassware..  cases    81
Furniture...  280 Hardware..  pkgs.  438
Clocks....  182 Petroleum..  galls. 3,158
Manufactured Tobacco. lbs. 17,975 Wax...  bbls.   10
Oars..pcs.  500 Naval Stores..  pkgs.   20
Oak..                     235 Hops...  bales    38
Varnish..    bbls.   26 Woodenware..  pkgs.  126
Spirits Tar..    galls.   50 Pepper...   bags   496
Shoe Pegs..    bbls.   55 Cloves...  bales   100
Nails...      kegs   306 Lumber...  feet 470,896
Perfumery..    cases    75
These articles, my dear sir, are merely the food of the laborer in
another and higher form; and thus itjis that, to the weekly extent of
millions of dollars, our farmers are enabled, by means of a diversified
industry, to relieve themselves from the necessity for forcing their
products on the already glutted market of England.  The total
export of breadstuffs to Great Britain and Ireland, in the last five
months, as given in a table now before me, has been as follows:
Flour.......             59,998 barrels.
Wheat...                                   1,305,183 bushels.
Corn..                                  56,933 bushels.
To the Continent there have gone 2,669 barrels of flour, and 68,521
bushels of wheat.  Such is the great European market to which
we are now advised to look for all our supplies of cloth, paper, and
iron! Such is the market in whose favor we are now required to
sacrifice coal and iron industries whose total products, in their various forms, now exceed four hundred millions of dollars, nearly the
whole of which vast sum  goes, directly or indirectly, to the men
who are employed in clearing the land or cultivating it!
Why, however, is it that so little food can be spared for Europe?
Because the domestic market has already become so large that
prices are above the exportation standard.  Let us go ahead in
the direction in which for three years past we have been movinglet us give to the makers of paper and the smelters of iron ore that
security without which they dare not enlarge their works or increase
their number-and the day will not then be far distant when we
shall be importers of wheat, instead of exporters of it, making a
market for all the products of Canada and enabling our own farmers
and landholders to become rich and independent, instead of being,
as in all time past they have been, the mere serfs of those "wealthy




21
capitalists" whose first wish is that food may become cheaper, and
cl.oth and iron dearer.
Forty years since, General Jackson asked of his countrymen the
important question, " Where has the American farmer a market
for his surplus products?" In answer thereto he spoke as follows,
and nothing more accurate was ever written:"Except for cotton, he has neither a foreign nor a home market.
Does not this clearly prove, when there is no market either at home
or abroad, that there is too much labor employed in agriculture,
and that the channels of labor should be multiplied?  Common
sense points out at once the remedy.  Draw from agriculture the
superabundant labor, employ it in mechanism and manufactures,
thereby creating a home market for your breadstuffs, and distributing
labor to a most profitable account, and benefits to the country will
result.  TAKE FROM AGRICULTURE IN THE UNITED STATES SIX
HUNDRED THOUSAND MEN, WOMEN, AND CHILDREN, AND YOU AT
ONCE GIVE A HOME MARKET FOR MORE BREADSTUFFS THAN ALL
EUROPE NOW FURNISHES US. In short, sir, we have been too long
subject to the policy of the British merchants. It is time we should
become a little more Americanized, and, instead of feeding the
paupers and laborers of Europe, feed our own, or else in a short
time, by continuing our present policy, we shall all be paupers ourselves."
France and England have pursued the policy here recommended,
and they are now the greatest exporters of food in the world, the
annual amount, with each, counting by hundreds of millions of dollars. They, however, combine hundred-weights of food with pounds
of wool, silk, and cotton, and thus enable the former readily to
make its way throughout the outside world.  We are now, in proportion to our numbers and resources, the smallest food exporters
of the world, because we insist on sending the raw materials of
cloth to be combined together in other and wiser countries.
The policy recommended by General Jackson was that of the
protective period from 1828 to 1834, at the close of which we paid
off the last remnant of our national debt. It was that of the
period from 1842 to 1847, which commenced with a scene of almost
universal ruin, and closed with an exhibit of prosperity such as the
world had never before seen. It is the policy by means of which
our farmers are now relieved from all necessity for forcing their
products on foreign markets, to be there taken, at prices to be fixed
by themselves, by "wealthy capitalists," who pay for them in cloth
and iron, at prices also fixed by themselves.




22
For a portion of this relief they have been indebted to the demand
created by large bodies of men employed in carrying muskets, but
this is so far from being opposed to the view above presented that it
furnishes proof conclusive of its truth.  Change those men into
miners and puddlers, producers of silks and cottons, watches and
locomotives, and their demands for the various products of the earth
will be greater than now they are. As it is, the farmer profits only
by an increase in the prices of what he has to sell. As it then
would be, he would add thereto a decrease of price in regard to all
that he required to purchase. The truth of the Jacksonian doctrine
is, thus, thoroughly demonstrated by the facts now presented in the
consumption of our fleets and armies. As human pursuits become
diversified land acquires value and the farmer becomes rich and independent.
Who, now, are the men who have combined together for the
destruction of the great paper, coal, and iron industries, and for the
reduction of the farmer to his former dependence on British markets?  Let us see.  They areI. Railroad owners, who, in the last three years, have taxed the
farmer to the utmost of their ability by increasing the charge for
transportation:
II. British agents who look to reduction in the price of food and
augmentation in the price of iron for increase of their commissions:
III. Secessionists at home and abroad, in and out of Congressmen who look to bankruptcy of the National Treasury as the most
certain means of obtaining elevation for themselves.
Against these should now be banded together1. Every farmer who desires to see the tax of transportation
diminished and the value of his land increased:
II. Every laborer who desires to find himself in the condition of
one of the owners of the land:
III. Every landholder who sees in liberal reward of labor a
stimulus to that immigration by means of which the number of purchasers of land must be increased:
IV. Every man who sees that land increases rapidly in value as industry becomes more and more diversified, while declining as rapidly
when furnaces and mills are closed and diversification dies away:
V. Every holder of a Government note, or bond, who sees that
it is the Internal Revenue alone to which he and others like himself
must in future look for payment of their interest:




23
VI. Every lover of his country who sees that with every increase
in the domestic commerce there is an increase in the number of the
threads by means of which the Union is to be held together:
VII. Every man who appreciates the fact that it is to that British
free trade by means of which we have been compelled to look to a
distant market as the one in which to make all our exchanges, that
we have been indebted for the loss of property and of life that has
resulted from the great rebellion; and,
VIII. Every man who feels as an American should feel in reference to the conduct, throughout the past four years, of that British
people which teaches everywhere "free trade"' as the most efficient
means of securing a monopoly of the machinery of transportation
and conversion for the world at large.
If this nation is ever to become really independent; if it is ever
to become Americanized; if it is ever to occupy that position in
the world to which the vast amount of mineral wealth placed at its
command so well entitles it; if it is ever to cease to be a mere puppet
in the hands of foreign agents; if it is ever to be placed in a position to perform the duties of its great mission to the poor and
oppressed throughout the earth; its people must learn that in the
real and permanent interests of all the portions of society there is
a perfect harmony, and that of all who should desire the establishment of that certain protection which shall authorize the capitalist
to open mines, build furnaces, improve water-powers, and erect mills,
there are none whose interests look so much in that direction as do
those of the landowner and the farmer.  All, however, are greatly
interested; all should learn to appreciate the advantages that must
result from combination for relief from that foreign domination
under which we have so long and so severely suffered; and all
should study the admirable lesson taught in the following fable by
our old friend /Esop:"An old man had many sons, who were often falling out with
one another. When the father had exerted his authority, and used
other means in order to reconcile them, and all to no purpose, at
last he had recourse to this expedient: he ordered his sons to be
called before him, and a short bundle of sticks to be brought; and
then commanded them, one by one, to try if, with all their might
and strength, they could any of them break it.  They all tried, but
to no purpose; for the sticks being closely and compactly bound up
together, it was impossible for the force of man to do it.  After
this, the father ordered the bundle to be pntied, and gave a single




24
stick to each of his sons, at the same time bidding him try to break it;
which, when each did with all imaginable ease, the father addressed
himself to them to this effect:'O my sons, behold the power of
unity! for if you, in like manner, would but keep yourselves strictly
conjoined in the bonds of friendship, it would not be in the power
of any mortal to hurt you; but when once the ties of brotherly
affection are dissolved, how soon do you fall to pieces, and are liable
to be violated by every injurious hand that assaults you V"'
The men of the North have shown their appreciation of this
lesson by the determination they have manifested to maintain the
Union of the States. Let the people of all those States show their
appreciation of it by combining together for securing permanently
to the farmer such a market for his products as shall free him wholly
from the tyranny of the "wealthy capitalists" abroad; let them
determine that American food shall go to the production of all the
cloth, all the paper, and all the iron they need to use, and we shall
then have discovered the true and certain mode of outdoing England
without fighting her.
In another letter I propose to examine the railroad question,
remaining meanwhile, with great regard and respect,
Yours, very truly,
HENRY C. CAREY.
Hon. SCHUYLER COLFAX.
PHILADILPIIIA, Jan. 30, 1865.