pidity, since the adoption of the protective system. We conclude, therefore, from what has been said on this subject, that, although free trade between nations is desirable, and might be most equally advantageous to all; the prohibitory policy of some nations, may impose on others the necessity of protecting their own industry, by counter restrictions and prohibitions.

CHAPTER XII.

Effects of Internal Improvements on Productive Industry.

§ 872. THE influence of protection upon the productive industry of a nation, has been considered in preceding chapters and it has been seen, that one of the most important results of the measure, is the increased demand for domestic products. But a market may be so distant from the place of production, or so difficult of access, as to render it of little value to the producer. Not many years ago, grain produced in the western part of the state of New York, did not find a market where it now does, in the towns and cities on or near the Atlantic coast. Nearly the whole value of a bushel of wheat would have been consumed in the expense of its transportation thither. Not enough would have been saved to compensate the cost of its production.

§ 873. Hence we perceive the utility of canals, railroads, and other channels of communication, to facilitate internal commerce. The productive energies of a nation are thus powerfully increased. By means of internal improvements, the products of the most distant parts of the country may be brought into market at a small expense. Since the completion of the Erie canal, a bushel of wheat

§ 872. What is the effect of the distance of market upon the price of a product? § 873. Why does a bushel of wheat command a higher price now in the western part of New York and Ohio, than prior to 1825? What are the general effects of the construction of

commands nearly as high a price in the western, as in the eastern part of the state, because the cost of transportation has been reduced to a very inconsiderable amount. Formerly, there was little to encourage production, farther than was necessary to supply the wants of the producers. But by the cheapness of transportation, the amount and prices of products, the value of land, and, consequently, the wealth of the inhabitants of these remote parts of the country, have been greatly increased.

§ 874. Internal improvements also cheapen the necessarics of life. By the diminished cost of transportation, most articles of merchandise, either of foreign or domestic production, may be afforded in the interior and more distant parts of the country, at a small advance from the cost at the place of manufacture or importation. In some parts of the United States, before the present advantages of internal intercourse were enjoyed, a bushel of wheat could be obtained in exchange for a yard of cotton cloth. In the same places, a bushel of wheat has, since that time, purchased eight or ten yards of similar cloth.

$875. It seems, then, to be the duty of the government to encourage production by authorizing the making of internal improvements. But objections are sometimes made to the application of the public money to the construction of works, the benefits of which are to be enjoyed only by a small part of the nation. But if it be the duty of a government to promote the general welfare, it cannot with justice withhold relief from that part of the population which does not enjoy the advantages of commercial intercourse. It is one of the cardinal principles of the social compact, that mutual sacrifices, (if indeed they may be so called,) are to be submitted to for the general good.

876. But it is an error to suppose, that the benefits of these improvements are limited to those for whose relief they are primarily intended. Suppose that certain of the Western states had no other than the ordinary means of

this work 1 8 P74. What has been the effect of internal improveMirnte on the price of merchandise in distant parts of the country? AA Te it the duty of government to make internal improvements? 970. Phow how the whole country is benefited by improvements

communication, by land, with the Atlantic cities: these fertile lands, owing to their remoteness from the great markets of the nation, would possess little value. Would not policy, as well as justice to this sequestered portion of the union, dictate the construction of canals and rail-roads, as mediums through which vent might be given to its abundant products? And would not the trade thus opened be beneficial to the country at large? A powerful impulse would be given to industry in these western states. Both the quantity and prices of their products would be increased; and every article of eastern merchandise consumed in those states would be cheapened; and the manufacturing and commercial towns would be profited by this extension of their trade.

§ 877. Hence we are not to judge of the economy of a government, by the amount of money in its treasury. A person who hoards the yearly income of his industry, may have the merit of being frugal; but he is much the better economist, who employs the annual increase of his capital and labor in improving and extending his business; and, by the additional employment thus given to industry, he contributes essentially to the wealth and happiness of the community. So a nation or a state may wisely expend a part of its surplus revenue in the construction of works of public utility. By this means commercial intercourse will be facilitated; industry will be stimulated; the wealth of the country will be augmented; and, in due time, the money expended will be reimbursed.

878. But how ought the expenses of internal improve. ments to be defrayed? Most of the canals and rail-roads in this country do not pass from one state into another; but are confined within the limits of a single state. They are therefore more properly made by the authority of the state governments, than by that of the general government. Either companies, incorporated by a law of the state, construct these works at their own expense; or they are exe

which facilitate transportation. § 877. Is it good economy for a state to expend money in the construction of canals and rail-roads? What is the effect of such a policy? § 878. At whose expense ought these works to be made? What objection is there to raising the

cuted by the state itself. And to provide funds for the purpose, it may lay a direct tax upon the property of the citizens. But though this is the most equal mode of taxation for the support of government, it is otherwise in making internal improvements, as large portions of the state derive much less benefit from them than others.

§ 879. When a canal or rail-road is to be made by the state, the state borrows the money required to accomplish the undertaking, and relies for the means of its repayment on the revenue to be derived from the work. Thus direct taxation is avoided, and the expense of the work is ultimately paid by those who are benefited by the use of it.

CHAPTER XIII.

Exchange.-The Advantages of a Division of Labor in Exchange, and of the Frequency of Exchanges.

§880. In considering the causes of the productiveness of human industry, we have seen that one of the principal of these causes is the division of labor, by which every man is confined to one occupation, and, generally, to the creation of a single product, or even to the performance of a single operation in the manufacture of a product. And we have seen, also, that an individual or a nation increases in wealth, in proportion as labor is rendered more productive.

881. But as wealth consists essentially in the means of gratifying the desires, or of satisfying the wants of mankind, the most abundant production of any one commodity, unaccompanied by any farther exertion or act of labor, cannot make a man wealthy. Whatever quantity of any single product a man may acquire by his industry, such pro

money exhibited in their construction by the direct taxation of all the people? 879. How may direct taxation be avoided? Can you tell how the revenue from a canal is produced?

§ 880. What has been shown to be a principal cause of the productiveness of industry? § 881. What are the benefits derived from

duct is capable of supplying but one of his numerous wants. A part only of what he produces is of any value to him, while he keeps it in his possession. If a farmer produce annually two hundred bushels of wheat, and his family consume but fifty bushels, the remainder would be of no great value, if he could not procure for it other necessaries. Hence we see, that, after production, the act or labor of exchange is necessary, before we can avail ourselves, to any considerable extent, of the objects of our industry.

§882. If every person should produce for himself all things essential to his existence and comfort, there would be no need of exchanges. But this, as we have seen, would be bad economy. Almost every person is better fitted for some particular kind of employment than for any other; and every man does best when he pursues a single occupation, and procures, by exchange, such of the products of other men's labor as he needs. Every laborer consumes a greater variety, and many a greater value of the products of the labor of others, than of those which he produces himself. Exchange, then, becomes an important business in economy, and next demands our attention.

§ 883. It is obvious, that, if a person, whenever he finds himself in want of any thing which he does not produce, were under the necessity of procuring such article for himself by a specific act of barter or exchange, much time would be spent in making exchanges. Many articles necessary to man's convenience, come from distant parts of the country, and from foreign countries. These could not be procured without still greater expense of time and labor, if they could be gotten at all. So that a person might about as well work at the different trades and occupations, and supply himself with such things as he could produce by his own labor, and dispense with those which it required so great a sacrifice to obtain.

§ 884. Thus we see that a division of labor is no less

the exchange of products? § 882. Why is it best for every person to pursue a single occupation? § 883. If every producer were compelled to make an exchange directly with every other producer for what he wants, what would be the consequence? § 884. Wherein consists the benefit of a division of labor in the business of exchange?