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latter are under our feet; yet, our people have gone across the continent, to become barbarians on the coast of the Pacific, that they may obtain a metal which, after crossing the continent, is to go over the Atlantic in search of iron.

In treating of supply and demand, no reference has been madeto the notion, by which some writers have been bewildered, of a general over-production of commodities. The proposition that any good thing has ever been produced in excess of the wants of humanity, will not bear a moment's examination; nor is there the slightest reason to apprehend that such an event is likely to occur. The truth of the matter may be quite as correctly rendered by the statement, that the supply of other commodities is deficient, as that any particular one is redundant. Where has it been, in any community sufficiently numerous to permit the application of the general considerations in which Political Economy deals, that any product of industry has been offered in such a quantity as to surpass what the comfort of all its members would require? The trouble is, that many of those who would gladly be consumers, have not produced enough to enable them to be. The true remedy for what is called over-production, in any article, is an increased production of other things. This is consistent with all interests; for every one is the producer of but few kinds of commodities and the consumer of many: a consumer, directly or indirectly, to the full extent of his production. He either exchanges all that he produces, for commodities actually used by himself and his dependants in contributing to their personal enjoyment, or he converts the excess into machinery for further production, which, at the next remove, must enter into the round of exchange; or, he lends it, in whole or in part, to some third person, who must employ it in one of these modes. Production and consumption are equal, and the latter can be increased no otherwise than by enlarging the former.

The surplus which any nation produces beyond the ability of its own people to consume, must evidently seek foreign markets, and in doing so must be burdened with the cost of transportation, and whatever toll may be required at the port of entry. The price at which it leaves the country of its production, must be less, by the full amount of these charges, than the price of similar wares, pro

duced in the market which it seeks. If we suppose the case, that wheat is produced in England at the same cost at which it can be delivered upon the seaboard of the United States, then, if a surplus be brought to the Atlantic ports, which must go to England, the holders of that surplus must content themselves with a price, as much below that of the English markets, as the cost of shipment and of any duty which may be laid upon its importation by Great Britain. The owners will obviously be ready to sell it in New York for the same net price as they could realize, after paying charges and duties, by its exportation to Liverpool. It will stand in the domestic markets bidding for purchasers, at the price thus reduced, and, therefore, tend to reduce the price of the whole crop to the same level.

Such is the case of the Canadians with regard to wheat. They have the liberty of sending it through the New York canals, for the purpose of exportation to Europe, upon executing a bond for the duty of 20 per cent., ad valorem, which is cancelled upon its shipment at New York for England. For this trade they have the same advantages as American citizens. They find it necessary, however, to sell a portion of their annual crop in our markets paying the duty. The result is, that the price of wheat at Toronto ranges at a price lower than that of the same quality on this side the Lake, by the entire amount of the duty and the cost of transportation.* They have, accordingly, for years been seeking the remission of the American duty, by the passage of an act which is facetiously called a Reciprocity Bill, because it gives our people the

* Abundant evidence of this fact might be adduced. It will suffice, however, to cite the statement of the Hon. William Hamilton Merritt, who was despatched to Washington by the Governor-General of Canada, for the purpose of urging the passage of the so-called Reciprocity Bill. That gentleman drew up a memorandum, which was transmitted by the British Minister to the Secretary of State, in which he says, in regard to Canadian wheat:

"The imports from Canada since 1847 have in no instance affected the market in New York. The consumer does not obtain a reduction of prices; the duty is paid by the grower, as shown by the comparative prices on each side of the boundary, which have averaged in proportion to the amount of the duty exacted."

liberty of exporting wheat to Canada—that is, of carrying coals to Newcastle and other privileges of equal value.

What is true of a nation is true of an individual farmer. He may sell a part of his wheat to feed weavers and miners in his immediate vicinity, at sixty cents a bushel, and send the surplus to New York, where he sells it at a dollar, which, after deducting the cost of transportation, nets the same price as that sold at his door. The New York merchant pays more than the neighbours of the farmer, by the cost of transportation, and may thereby be led to think that its burthen falls on him and not on the producer. But the reason why the farmer sells grain to his neighbour at sixty cents is, that unless he did so he would be obliged to send it to New York. However small the surplus that must be sent to a distant market, its net price regulates the gross price of all that remains. It is for this reason, among others, that the producer can afford to tempt consumers to his side, and thus make a home market, by paying them higher prices for their labour, embodied in commodities, than would suffice to obtain the same from abroad.

If, on the contrary, a nation is compelled by the insufficiency of internal production to import a portion of its supply from abroad, it is plain that the demand for this supplementary quantity pushes up the price of all that is made in the country; and the price at which it is sold must determine the price at which the native product is also sold. We are under a present necessity of procuring railroad bars from Wales, and must therefore pay for rails made in Pennsylvania, a price which is enhanced by the duty on those imported. As the internal production approximates to the wants of the country, the price must fall; and when the supply from our mines is adequate, those who import rails from abroad must do so at the expense of paying the duty themselves, without enhancing the price to the purchaser. Lead is now imported under an ad valorem duty of twenty per cent. When the duty was three cents a pound, the price upon the Mississippi was generally less than the duty, and lower than it now is; it being then exported at as low a price as it is now imported. The effect of a duty in respect to price depends upon the question, whether it increases or diminishes competition. The reduction of a duty may so diminish domestic com

petition as to increase price; the imposition of a duty not sufficiently high to stimulate domestic production, must infallibly tend to enhance price, for it puts the duty upon the purchaser, while a higher rate might extort it from the foreign producer. In support of the general doctrine of this and the preceding paragraph, Mr. M’Culloch, commenting on the modifications of our Tariff, proposed by Mr. Meredith in his first Treasury Report, gives his opinion as follows: "Freedom of importation is, speaking generally, the best rule to follow; but there are no absolute rules in politics, or, indeed, in most other things. The Americans formerly compelled us, by their retaliatory proceedings, to make, greatly against our will, though greatly for our advantage, important changes in our navigation laws. And are they quite sure, since they will not follow our example, that we may not diverge a little from the course on which we have entered, to profit by their example? Suppose we laid a discriminating duty of 3s. or 4s. a quarter on corn and flour from America, to continue as long as the proposed new duties (if passed) on cotton goods, iron, &c., imported into the Union are to continue, what could the Americans say against such a duty? To be consistent, Mr. Meredith should write a report in its favour. And yet it would be far more severely felt in the States, than the duties they propose to lay on imports will be felt here. The Americans must come to us for iron and cottons, and must, therefore, themselves pay the duties imposed on them. But we may supply ourselves with corn in fifty other places besides the Union; and hence the duty on it would fall entirely on the United States' grower and exporter, and not on the English consumer."*

Mr. M'Culloch fails to remark, that when our necessity for importing iron and cottons disappears, it will relieve us from the necessity of exporting corn and flour. It will then be a matter of supreme indifference to us, what duty England may impose upon breadstuffs which we do not send her. Her power to fix the prices at which we shall sell, and at which we shall buy, will then have gone. The producers of American corn and flour will exchange with the producers of iron and cotton, at prices fixed by themselves, and will thus have won freedom of trade.

* Supplement to Commercial Dictionary for 1850.

CHAPTER IX.

GOVERNMENT.

THE widest form of association known among men, is the political. Families grow into tribes, the tribes combine into nations; sometimes, as in the case of the United States, nations are confederated for so many purposes, that they are spoken of collectively as one nation, instead of thirty-one. In all the forms, a body of agents, denominated in the aggregate the government, is charged by the society with certain duties, and necessarily entrusted with powers adequate to their performance. The general limitations of those powers are established in some instances by written constitutions, in others by prescription; while there are still others, in which, while scarcely any limit is recognized in theory, to the powers of the government, their practical exercise is restricted within narrow bounds, and the individual members of society, though nominally the subjects of a despot, enjoy as much freedom, and exercise selfgovernment in a greater degree, than the citizens of what have been called Republics. The Danes are in this situation, compared with the people of France under the Republican administration.

It is only the Economical functions of government with which we are concerned. In considering them, we have a great advantage over the writers of the Old World. They cannot help regarding the government as something distinct from the people, upon whom and among whom it operates as imposing regulations upon the latter without consulting its will-as controlling affairs by an inhe rent force. Even where representative institutions exist, as in Great Britain, the elective franchise is restricted to a portion of the population, and its members are denominated "the governing classes." We, however, have before our eyes the working of things under a system, in which the whole people appoint the administrators of government, portioning out to them such powers as they deem expedient; restricting their exercise, or resuming them at will; holding the public servants to strict responsibility for their conduct, and

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