ited by his income." It diminishes his exports "in consequence of depri ving foreign nations of the power to pay for them. If a man who has an article for sale refuses to take in exchange for it the only commodity which others have to offer, he cannot possibly sell. The same is the case with a nation. If a nation imports foreign articles to the extent of fifty millions of dollars, can she do this but in consequence of selling fifty millions worth of her produce? The answer must be in the negative. And if the proposition be true in whole, must it not be true in part? If, for example, she refuses to purchase beyond the extent of twenty-five millions of dollars, must not her exports be at the same time reduced to twenty-five millions?" President Wayland is, if possible, still more clear on this point. "I think," says he, "it is too obvious to need remark that duties on imports can have no favorable effect on exchange. Their only effect must be to raise the price of products, and of course to diminish the ability in both parties to exchange. Every one knows that the exchanges between two places are diminished by any natural obstacle to the communication. If a road were so bad that it cost five dollars per hundred weight to transport merchandise between two places, every one knows that exchanges between these places would be fewer than they would be if the road were improved so that transportation could be effected for twenty-five cents per hundred weight. Now it makes no difference whether this additional four dollars and seventy-five cents be the result of the badness of the road, or of a transit duty between the two places. The diminution of exchange which it causes will be precisely the same." And in conclusion he adds, "I therefore think it evident that government can do nothing to facilitate exchanges by means of discriminating duties."

3. Protection is injurious to national wealth. If what we have said under the two preceding heads be true, this is a postulate which scarcely requires proof. National wealth is the aggregate of the individual wealth of a nation. And although it may be true that certain classes of individuals are benefited for a season by protective laws, yet the aggregate wealth of the nation is diminished.

If an article requires protection in order to defend it against foreign competition, that circumstance alone is sufficient proof that it cannot be produced as cheaply as it can be imported. The object of the protective duty is to raise the price in order that the production may become profitable; and if it does not accomplish this, it affords no protection. But the protective duty and consequent increase of price do not diminish the cost of production. The article can therefore be produced no cheaper now than before: it must consequently still be produced at a loss, but the loss is borne by the whole community, who are taxed to the amount of the increased price for that purpose. Hence it is clear that the whole community, that is, the nation, sustains a loss at least equal to the additional price caused by the protective duty, and that therefore protection is injurious to national wealth.

But we are told that, by producing articles at home, we shall save to the country a large amount of money which would otherwise go abroad; and which, if retained at home, would greatly add to the wealth of the nation. Thus, a few years ago, our minister at Constantinople, in recommending a new mode for the production of silk, expressed a hope, "by a gradual introduction of its culture among us, to save, in the end, millions of money which finds its way to this side of the Atlantic."

This doctrine of saving money is one of those popular fallacies which are but too prevalent on the subject of national wealth. It should be remembered that commerce is an exchange of equivalents; an exchange which is equally beneficial to both parties. Now it makes no sort of dif ference whether this exchange is effected by means of money or of goods, as in either it is made value for value. If a man wants a hat more than he wants five dollars, he is none the poorer for parting with his money. The loss or gain, therefore, which would attend the home production of silk, must depend on something else besides the mere passage of money across the Atlantic.

The hatter who should undertake to save money by making his own boots, would be regarded as a very poor economist; as everybody knows that he could procure more boots by giving his undivided attention to his own business, and exchanging products with the bootmaker, than he could by dividing his time between boots and hats. So, as it regards the culture of silk-the saving to the country will depend on the fact whether more silk can be obtained by raising cotton, or wheat, or tobacco, than by cultivating mulberries and propagating silkworms. If it costs more to produce the silk than to procure it by exchange, it is clearly no saving to the country. Another fallacy, quite as common as the last, is, that protection is necessary to encourage domestic industry. Thus we often hear it asked, when articles of luxury are brought into the country for the rich, "Why such men do not encourage home manufacture, and give encouragement to domestic industry?" At first view, this position may appear quite natural. But let us examine it a little more closely. These articles have been procured abroad in exchange for American products, and are therefore just as much the result of American industry as if they had been produced at home. Who will say that the laborer, who, at the end of the week, exchanges his wages for a coat, has not procured it by his own industry just as much as if he had fabricated it with his own hand?

Further let us suppose that a wealthy farmer of New York chooses to clothe his family in the richest kind of silk. He could do it in two ways. He might, 1st, employ a dozen men to plant mulberries, and carry on the manufacture on his own farm; or, 2d, he might set these men to ploughing his fields and producing a crop of wheat. The wheat thus raised, he would exchange with a southern planter for cotton, and this cotton he would exchange with the French merchant for silk. Who will say that the foreign silk is not just as much the product of American industry as though it had been made directly by the laborers of the New York farmer?

But it is said, again, that although under a protective policy, we may be obliged at first to ask a higher price for our productions; yet having once introduced them, they will, in the end, become cheaper by competition. than before, and that we shall finally reap a benefit from protection. To this we answer, 1st, that if the soil, climate, &c., present natural obstacles to the production of any article, no competition can ever make it profitable; and, 2d, that all things being as favorable as in other countries, except labor and capital, still, as no competition can ever reduce prices below the cost of production, and as these circumstances must continue to influence the cost of production while they remain, the protective policy can have no favorable effect in lowering prices.

In a country like ours, where every thing is progressive, an article which may not be profitably produced now, may be profitably produced at some

future time, when capital shall have become more abundant, and labor less productive. To attempt to anticipate that time by means of the forcing system of protection can never prove advantageous to a country, as it must inevitably be attended with public loss, and by injuring the accumulating capital of the nation have a direct tendency to put off that time to a more distant day.

Besides, it must not be forgotten that our situation, located, as we are, some thousands of miles from the most producing nations, is itself a natural protection, and that this protection is still further increased by the duties which are required for the support of government. These give us an advantage without the special interposition of the state, which is quite sufficient to stimulate our enterprising citizens to the pursuit of wealth in every mode of industry which offers the least prospect of success.

In short, we are fully satisfied that the only sure guide to wealth and prosperity is FREEDOM, entire and unrestricted FREEDOM. It is, we think, a great mistake for governments to compel men into this or that mode of production. We believe it to be no part of their duty; and it seldom fails of leading, in the end, to disaster and ruin. Under a system of free trade, men are guided by the instinct of their own interests, and the cotton planter, the wheat-grower, the manufacturer, the blacksmith, hatter, shoemaker, tanner, &c., all fix themselves in such situations as they believe will be most profitable to themselves; and unless they greatly mistake their own interests, their choice will be best calculated to produce the greatest amount of products to the country.

The best protection, then, is the protection of all men in their persons and property-the protection of society by means of general educationand the protection of our flag wherever it shall be unfurled to the four winds of heaven. It is such protection which gives nerve to enterprise, spirit to industry, and wing to commerce; and which is destined to carry forward our country in that mighty and glorious progress which she has commenced with such Herculean and lofty strides.

ART. III.-ORIGIN AND NATURE OF FIRE INSURANCE.
CHAPTER IV.*

In case of a loss, duty of the insured to save the property-how proofs of
loss are to be made-give notice of loss-render a sworn account, with
particulars-notary's certificate-books of account may be demanded-
forfeiture of claim by fraud-form of affidavit-of notary's certificate.
"In case of fire, or loss or damage thereby, or of exposure to loss or
damage thereby, it shall be the duty of the insured to use their best endea-
vors for saving and preserving the property. And it is mutually understood
that there can be no abandonment to the insurers of the subject insured."

The above is extracted from the sixth article of the notice usually attached to policies of insurance issued by fire companies of this city. Some persons have been found foolish enough to suppose that when a fire occurs, they cease to have any control over the property insured, and must not make any effort to secure it, but abandon it altogether to the insurer; lest, • Chapters 1, 2, and 3, will be found in the February number of this magazine.

by saving property, or otherwise interfering, they would prejudice their

interests.

How any can hold such an opinion we cannot conceive, unless it be be cause they have a wrong idea of the nature of the contract. The insurer agrees to indemnify them against any loss, in consideration of the premium, but there is an implied contract or understanding that all reasonable care and diligence shall be used to prevent the occurrence of fire. Any neglect of this would imply a criminal intention on the part of the party insured; and if this is the case before a fire occurs, why should not the same principle be in active operation after the occurrence of a fire? It would seem to be presumptive proof, if the insured did not make all the effort in his power to prevent loss or damage, or render it as light as possible, that there was a fraudulent intention.

The course of our inquiry now naturally leads us to the subject of how proofs of loss are to be made. We cannot better dispose of this subject than by introducing the ninth article of that notice annexed to policies which has been referred to several times before. It is composed of legal decisions and equitable rules, all drawn up and compressed in a short space, by a legal gentleman of great talent. "Persons sustaining loss or damage by fire, shall forthwith give notice thereof in writing, to the company. And as soon after as possible, they shall deliver as particular an account of their loss and damage as the nature of the case will admit, signed with their own hands. And they shall accompany the same with their oath or affirmation, declaring the said account to be true and just; showing also, whether any and what other insurances have been made on the same property; what was the whole value of the subject insured; in what general manner, (as to trade, manufactory, merchandise, or otherwise,) the building insured and the several parts thereof were occupied at the time of the loss, and who were the occupants of such building: and when and how the fire originated, so far as they know or believe. They shall also produce a certificate, under the hand and seal of a magistrate or notary public, most contiguous to the place of the fire, and not concerned in the loss, stating that he has examined the circumstances attending the fire, loss, or damage alleged; and that he is acquainted with the character and circumstances of the insured or claimant, and that he verily believes, that he, she, or they, have, by misfortune, and without fraud or evil practice, sustained loss or damage on the subject insured, to the amount which the magistrate or notary shall certify. And until such proofs, declarations, and certificates are produced, the loss shall not be payable.

"And whenever required in writing, the insured, or person claiming, shall produce and exhibit his books of account, and other vouchers, to the insurers or their agent, in support of his claims, and permit extracts and copies thereof to be made.

"All fraud or false swearing shall cause a forfeiture of all claims on the insurers, and shall be a full bar to al. remedies against the insurer, on the policy."

The above ninth article is one of the greatest importance to the person insured, because in his acceptance of the policy to which it is attached, he binds himself to perform the things therein required, and so of the other eleven articles of the notice. The words of the policy are these: "And that this policy is made and accepted in reference to the terms and conditions hereto annexed, which are to be used and resorted to, in order to

explain the rights and obligations of the parties hereto, in all cases not herein specially provided for." It is therefore seen how highly important a right understanding of the above notice is, which contains a summary of the duties of the insured in case of loss or damage.

The non-compliance of the requirements respecting the magistrate or notary, has given rise to difficulty in the settlement of losses more frequently, perhaps, than any other cause. This custom is, we presume, borrowed from the practice of the English companies, who require a like certificate from the ministers and churchwardens, and other reputable inhabitants of the parish, not concerned in the loss. The magistrate or notary must be a person living nearest the place of the fire, and the one best acquainted with the character of the insured; but we presume that know. ledge of the insured's character is of most importance, therefore the near. est should not be employed, if another, possessing the other and more important qualification, could be obtained within reasonable distance.

It is to be lamented that the duty of the notary has not, in all cases hitherto, been performed with that scrupulous fidelity and exactitude which its importance demands; and no doubt, through the loose and careless manner in which this duty has been usually performed, many frauds upon the companies have arisen, many exorbitant demands been paid, and many cases of arson been undiscovered.

A notary called in to examine the circumstances attending a fire, if the claim is settled without litigation, acts in a judicial capacity; or in the other case, from being disinterested, and possessing a knowledge of the facts which no other stranger can hardly ever possess, is a most important witness. It is his duty to consult books of account and papers, and examine under oath all persons from whom he can obtain any information respecting the origin of the fire, the amount of loss or damage, &c., and in no case should he certify to the amount of the claimant's loss upon his oath alone, unsupported by other evidence.

The following is the usual form of the affidavit proper to be made by the claimant, and of the notary's certificate:

the

"State, City, and County

of New York,

SS.

being duly sworn, deposes and says, that on or about day of 1840, he caused to be insured against loss or damage by fire to the amount of dollars, the following described property, viz:-(here describe it,) by the Columbian Insurance Company, of the city of New York, under policy number

ofdollars.

to wit, from the

for the period of

day of —, 1840, to the 1841, and paid the premium thereon, amounting to

day

"And this deponent further says, that no insurance was by him effected on said property, nor by any other person for his benefit, except as afore. said, and that he was the owner of the above described property at the time of its destruction by fire.

"And this deponent further says, that by the fire which destroyed the property, (here give an account of the property,) on the - day of 1840, the above property, insured under said policy, was destroyed and damaged, whereby this deponent sustained loss and damage thereon to the amount of dollars, which will more particularly appear by reference to the schedule hereto annexed.