nations. In this stage, a protective tariff will be a mere dead letter. There will be but little importation of what the nation can produce, and there can be no importation that will lower the price of commodities, whether we regard those imported, or those of domestic production. In the first stage, therefore, protection is unavailing, and a damage. In the second, it is effective and beneficial. But in the third, it is unavailing and useless, a mere dead letter on the statute books.

The fact, however, that a protective tariff raises the money price of the protected article at first, and for a time is only a prima facie objection to such a tariff, at most.

PROTECTION AND NATIONAL INDEPENDENCE.

The general reasons for protection may be arranged under three heads.

1. No nation can be independent of another that does not produce all that it needs for consumption. Give any nation, however small, the exclusive power to manufacture gun-powder, and you will make that nation the mistress of the world. The same is true, though to a less extent, of every other article, that is, as is felt to be a necessity of life.

It is sometimes said that this would be a means of keeping nations at peace. And doubtless so it would, to some extent. It would not, however, be the peace of equality and right; but the peace rather that comes from the uncom plaining, unresisting submission of the weaker to the stronger.

DIVERSIFICATION OF INDUSTRY.

2. The second fact is, that no community can be thrifty without a diversification of labor; and, as a general rule, the greater the diversification of labor, the greater the number of productive employments, the more nearly do we reach the condition of the greatest thrift, namely, the greatest industry of the greatest number.

Thus, if all the people of a country are agriculturists,

agricultural labor and agricultural products will be very cheap in their money value, and all other things will be very dear in their labor value, however cheap in their money value. Hence the laborers will be able to buy but little, however much they may have to sell.

If then a nation be so situated, that a protective tariff is necessary as a means of introducing manufactures, or any new form of productive labor which it is desirable to have, there can be no doubt of the wisdom of such a measure, provided, the new form of industry is one that is so well adapted to the people and the country, that when once introduced, it can be carried on with profit, and without continued protection.

FREE TRADE REDUCES THE WAGES OF THE LABORERS.

3. The other is the fact that free trade between nations will sooner or later bring the price of labor-wages-to the same level the world over, and that level will be the lowest figure to which tyranny and misgovernment can reduce the laborers anywhere.

Equality in skill, machinery, and other facilities for manufacture, are so nearly within the reach of all nations, that we may consider them equal everywhere. The facilities for transportation are so great, that the cost of transportation has become an exceedingly small per cent. in the cost of all the most valuable articles we produce.

Hence with free trade we bring all the most valuable articles into competition in the one great commercial center of the world. The producers of the raw materials, wherever they are, must bear the cost of transportation thither, and if they are consumers too, they must bear the cost of transportation of whatever they consume, back from the place of manufacture to themselves. And he who can hire labor the cheapest, can of course, other things being equal, make himself the commercial centre and drive all other competitors out of the market, and thus control the market of the world.

CHAPTER XVII.

SPEECH OF HON. GEORGE MCDUFFIE,

OF SOUTH CAROLINA,

In the Senate, January 29, 1844.

HE senator from Maine [Evans], by a course of reasoning which, if it can be comprehended at all, is certainly not inductive, holds the reverse of all these doctrines. In one part of his argument, he maintains that it is better to pay a high price for manufactures made at home than a low price for those made abroad, though these latter are necessarily obtained in exchange for productions made at home. In another part, he maintains the yet bolder position, that a high rate of duties upon imports diminishes their prices, and a low rate enhances them! These are certainly most admirable illustrations of Lord Bacon's method of investigating the great truths of philosophy!

I propose now, sir, to analyze the arguments by which the Senator reaches these wonderful results in political economy. In the first place, he says that when we impose a duty upon foreign imports,-of cotton manufactures for example-the effect of that duty is to reduce the price of the foreign manufacture abroad, thus throwing back the burdens of our taxation upon the people of foreign countries! Indeed, sir, if this theory can be made good by the inductive or any other process of reasoning, it will be one of the greatest discoveries ever made by any financier, ancient or modern.

What a comfortable thing it would be to make other nations supply our Treasury! But there is one consideration calculated to diminish the value of this discovery, which I would suggest to the honorable senator. This, unfortunately, is a game at which two can play, and in which the motto of both parties would be, "the hardest fend off." And we should find, in the end, as they say somewhere, that "the longest pole would knock down the persimmon."

But to speak gravely, Mr. President, if nations really possessed this power of mutually taxing each other, it would prove to be the greatest curse ever inflicted upon mankind. It would totally overthrow that system of responsibility so wisely ordained by a wise Providence for preserving the harmony of nations. It would revive, in another form, the financial system of barbarous and conquering nations, who supplied their exchequers by rapine and plunder; and nations would sink (like the Roman empire) under the weight of their own corruptions. But, sir, I think I can relieve the Senate from all apprehension of these terrible disasters, by exposing the fallacy of this new theory of taxation. And the senator from Maine has, himself, furnished me with the means of doing it. For, by another of those strange coincidences for which his speech is remarkable, immediately after stating that a duty imposed upon imported cotton manufactures would reduce the price in England and throw the burden upon the foreign producers, he held up a compendium of British statistics, showing that the whole amount of cotton manufactures annually made in that kingdom was, in value, $260,000,000 of which only $10,000,000 are exported to the United States, while the remaining $250,000,000 are consumed in Great Britain and other foreign countries. Now, is it not apparent that the price of cotton manufactures in Great Britain is regulated and fixed by the aggregate demand of the whole world, including the home demand, and that the miserable bagatelle of $10,000,000,

exported to this country, could not reduce their price in that country more than one or two per cent. if it were entirely cut off? Sir, there never was a more baseless vision than this theory of the Senator from Maine; and I thank God that nations do not possess this power of mutual taxation. If they did, it would speedily end in the utter destruction of all foreign commerce, and a fearful retrograde in the march of civilization. It being obvious, then, that the burden of taxes imposed by this government must fall upon our own people, let us trace the operation of an import duty through its several transitions, and see where it ultimately rests. It is paid, in the first instance, by the importing merchant; but, as he is free to import or not, as his interest dictates, he would instantly cease to import if he could not indemnify himself for the duty he pays by a corresponding increase in the price of the articles on which it is paid. After resting upon him for a time, the duty advanced with its accumulated interest, are transferred to the retail merchant, who in like manner transfers them to the consumer, or domestic purchaser, where they finally rest. Now, sir, I care not whether you consider the consumer or the domestic producer as bearing the burden of protective duties. In either case, the result is substantially the same. The class of imports upon which these duties are imposed, are exclusively paid for by the productions of the exporting States, and must, therefore, be regarded as the annual income of those States. And although they do not consume the whole of these precise imports, they consume an aggregate amount of imports and protected manufactures equally enhanced in price by the import duties, considerably larger than the whole amount of these imports. For besides our exports, we sell to the manufacturers cotton to the annual amount of eight or ten millions of dollars, for which they pay us almost exclusively in protected manufactures.

But the Senator asks, with apparent anxiety, if you add