want of these, though less serious at such a crisis, would be attended with great inconvenience and difficulty.

§ 843. The second case in which the propriety of a tax upon foreign industry is admitted, is, when a commodity of home production is already subject to duty abroad. It may then be proper to impose a duty on a like article of the foreign country. Suppose that the United States were at present dependent for manufactured goods on Great Britain; and that the latter should exclude our agricultural productions from her markets by prohibitory duties, choosing to supply her own population. It is evident that we could gain nothing by imposing a like duty upon her grain, because she produces none for exportation. Would it not be necessary to tax her manufactures ?

§ 844. But it is said, that two countries seldom excel in the production of the same kind of commodities; and that it is for their mutual interest to confine their industry to the production of those commodities in which they respectively excel, and to procure, by exchange, what they do not themselves produce. But nations may mistake their true interests; and, therefore, whether a nation injure or benefit itself by a restrictive policy, other nations can gain the advantages of equal trade, only by the adoption of a similar policy.

CHAPTER X.

The Encouragement of Domestic Industry, continued.-Origin of the Protective System in this country.

§845. In the last two chapters have been presented, briefly, the opinions of political economists, concerning the policy of encouraging domestic industry by protective duties. As

couraged for the same reason? § 843. In what other cases is the propriety of a tax on foreign industry admitted? § 844. In what case does the adoption of a restrictive policy become necessary?

the protective principle constitutes one of the most prominent features in the policy of the principal commercial nations; and as it is deemed important that every citizen understand the measures of the government under which he lives; it is proposed, for the benefit of the American student, to pursue the subject in the present chapter, by exhibiting the authority and reasons for the adoption of the protective system of the United States; together with its origin, progress, and supposed practical operations.

846. The inefficiency of the former government of the United States, has frequently been alluded to in the progress of this work. One of the material defects of the confed. eration, was considered to be the want of provision for countervailing the restrictions imposed upon our trade and commerce by foreign nations. Soon after the peace of 1783, and the restoration of commerce between this country and Great Britain, the disadvantages of the restrictive measures of the latter began to be again realized. Complaints became general; and attempts were made by the states, separately, to counteract the unequal laws of Great Britain. But owing to the weakness of the federal government, and the want of concurrence among the state governments, in any system of measures, she was enabled to avail herself of the benefits of the freedom of trade allowed by our laws, and the monopolies secured to her by her own.

§ 847. A convention of commissioners from the several states was at length proposed, for the purpose of providing some remedy for the evils complained of. Commissioners from some of the states assembled; but finding their powers inadequate, they proposed a convention on a more enlarged plan, for a general revision of the federal government. "From this convention," says one of its members, (Mr. Madison,)" proceeded the present federal constitution, which gives to the general will the means of providing, in the several necessary cases, for the general welfare; and par. ticularly in the case of regulating our commerce in such manner as may be required by the regulation of other coun

§ 846. What was the condition of this country after the peace of 1783, in respect to its trade with Great Britain? § 847. What measares were taken to remedy the evils complained of? § 848. What

tries." At the first session of the first congress under the new constitution, a law was passed, one of the declared objects of which was, "the encouragement and protection of domestic manufactures, by duties on goods, wares, and merchandise imported."

§ 848. The opinions of the framers of the government respecting the expediency of encouraging domestic industry by protective duties, were the same as are held by the advocates of protection at the present day. It was the opinion of Washington, that "our country ought not to remain dependent on foreign supply, always precarious, because liable to be interrupted."

§ 849. It was remarked by Mr. Jefferson, that, "when a nation imposes high duties on our productions, or prohibits them altogether, it may be proper for us to do the same by theirs." In relation to the protection of manufactures, he observed: "The oppressions on our agriculture, in foreign ports, would thus be made the occasion of relieving it from a dependence on the councils and conduct of others, and of promoting arts, manufactures, and population at home." At a later period, he remarked that "the history of the last twenty years had been a sufficient lesson for us to depend for necessaries on ourselves alone."

§ 850. In recommending to congress some action upon the subject of protection, Mr. Madison, after expressing the belief that manufacturing industry, by a proper encourage. ment," will become, at an early day, not only safe against competitions from abroad, but a source of domestic wealth, and even of external commerce," continues as follows: "In selecting the branches more especially entitled to the public patronage, a preference is obviously claimed by such as will relieve the United States from a dependence on foreign supplies, ever subject to casual failures, for articles necessary for the public defence, or connected with the primary wants of individuals."

§851. Respecting the effect of protection upon price,

was the opinion of Washington on the propriety of protection? § 849. State the reasons of Jefferson in favor of the same principle. § 850. For what reasons did Madison recommend the subject to the action of Congress? 851. What was the opinion of Hamilton as to the

Mr. Hamilton observed: "When a domestic manufacture has attained to perfection, and has engaged in the prosecution of it a competent number of persons, it invariably becomes cheaper.' "The internal competition which takes place, soon does away every thing like monopoly, and, by degrees, reduces the price of the article to the minimum of a reasonable profit on capital employed. This accords with the reason of the thing and with experience." "In a national point of view, a temporary enhancement of price must always be compensated by a permanent reduction of it."

§ 852. The opinions above cited accord with those of our statesmen in later times, in the following particulars: (1.) The superiority of a home market, on account of its greater steadiness and certainty; (2.) the inexpediency of being dependent for necessaries on foreign nations; (3.) the ultimate reduction of price as the effect of the protection of domestic industry. And the encouragement of domestic manufactures was recommended by every administration, (unless the second be an exception,) for more than thirty years, under the present constitution, before any general system of protection was established; the demand for our agricultural products, caused by the wars in foreign countries and in our own, during a great part of that period, rendering it less necessary.

§ 853. But the causes which had kept up this demand for American produce having ceased to exist, a law was enacted in 1816, having in view the encouragement of domestic industry by protective duties. Among the principal articles of manufacture protected by this act, were coarse cotton goods. In 1824, a general act was passed, amending all former acts, greatly extending the tariff, and giving more effectual encouragement, by increased duties, to such manufactures as were supposed not to be adequately protected by the laws then existing.

§ 854. This act, however, did not pass without strong

effect of protection on the price of protected products? § 852. What are the principal advantages which were then considered to attend the encouragement of domestic industry? § 853. What was the object of the law of 1816? When was the general tariff act passed? § 854.

opposition. It was said, that the protection of manufac tures would ruin the agricultural and commercial interests. The contemplated duties would be taxes to their full amount upon the consumers of all articles protected. The laboring classes of the community would be depressed for the exclusive benefit of the manufacturers, who would reap excessive profits from their business. Monopolies would be estab lished; and the few would be enriched at the expense of the many.

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§ 855. On the other hand, it was contended, that, instead of being interrupted, agricultural prosperity would be promoted by the proposed protection of manufactures. larger portion of the population would be dependent on the farmer for subsistence; the division of labor would be carried more nearly to a state of perfection; and labor, consequently, would be rendered more productive and profitable.

§856. Commerce, too, it was believed, would be increas. ed rather than diminished. Those foreign manufactures which were to be affected by the proposed duties, were chiefly from countries which would still be dependent on us for the few articles which their selfish policy had not prohibited. The trade, therefore, with these countries could not be greatly diminished; whereas the stimulus which would be given to the industry of the nation in the several branches of manufacture, would increase the amount and variety of domestic products, which would find a market in other countries; and the increased trade with these would more than compensate for the loss of trade with the former.

§857. With regard to the accumulation of wealth in the hands of the few, and the reduction of the wages of labor, it was observed, that fortunes were not more likely to be acquired by manufacturing, than by foreign commerce, or planting. Labor dependent upon manufacturing wealth, would be no more depressed than labor dependent upon agricultural or commercial wealth. The low prices of lands

On what grounds was this act opposed? § 855. How were these objections answered? § 856. What different opinions were entertained as to the effects of protection upon commerce? § 857. What reasons were there for supposing that protection would not cause the depres