a diminution, and not in an increase, of prices, and it was in this interest that they petitioned. They knew, that, if this competition were destroyed, prices would again rise exorbitantly. The request was granted, though only to the extent of about four per cent, but enough to secure the American enterprise from being overborne. Under the stimulus of this action, there has been an extraordinary development of the manufacture; and the prices have constantly tended downward, till now steel rails are sold for about thirty-five dollars a ton.

If it be said that much of this diminution comes from the improvements in methods of manufacture, this may be freely admitted; and yet it is tolerably evident that a very large proportion of these improvements came from the establishment of the manufacture in America, and the sharp competion occasioned thereby. It is also clearly evident that no such improvements took place, within two or three years, as to reduce the price from a hundred and sixty-two dollars to a hundred and five dollars.

The same phenomena, though less marked, are found in connection with the protected manufactures of silk, of worsted, and many others, where prices have steadily declined, and almost in a ratio with the increase of the industry here. It is useless to say, that, in so many cases, this diminution is owing wholly to other causes. So many instances, and under such varied circumstances, would seem positively to indicate

some common cause.

7. The objection that protection causes a decrease of exports is largely insisted on by many writers; but there are many others who deny that it has any force. In the first place, it is said, if it were true that the protected country had no need of the goods from abroad, by reason of manufacturing them at home, it would also have no need to send

its own products abroad; since there would be, by the very fact before mentioned, all the larger demand for them at home. It is not necessary to import simply for the sake of importing, nor to export for the sake of exporting. But in the second place it must be admitted, that, after each nation has exhausted all its own facilities of production, there will still be many desirable things, which, if had at all, must be imported. It is also true again, that those communities which most largely and judiciously multiply their own industries, and thereby cultivate societary completeness, are the communities which have the largest variety of productions peculiar to themselves, and liable to be wanted by other communities. Hence it is that those nations which have the greatest diversity of industries are those whose foreign trade is also the largest. It is in accordance with this principle, that we find, that, in the nations in which the protective policy prevails, the foreign trade, instead of diminishing as the objection assumes, increases more than in the unprotected, or slightly protected, countries. Take the United States as an example. In the decade from 1870 to 1880, under a tariff exceptionally high, and having many other exceptional features, a tariff under which, if under any that was possible, the unfavorable effect under consideration should have been conspicuous, we find that the exports increased from $420,500,275 in value, to $841,501,388, or a little more than a hundred per cent; and the imports, from $376,616,473 in value, to $741,501,725, or a little less than a hundred per cent.

Take the case of France. More than fifty years ago, the "Edinburgh Review," in an article on French industry and commerce, predicted, that, under the protective system then in operation there, the foreign trade of that country would be nearly ruined. During the decade in the middle of

which this prediction was made, the exports of France averaged but little more than 500,000,000 francs. In 1854, about twenty-five years later, they amounted to 1,400,000,000 francs, having nearly trebled. In 1874, France having then recently greatly increased her protective duties after a period of relaxation, her exports to Great Britain and Ireland alone amounted to 1,907,212,655 francs; being nearly three times the value of the British exports to France.

8. It is undoubtedly the fact, that the protective system has been often perverted from its legitimate purposes, and that any tariff arranged with reference to this principle will operate with great inequality. This is also the case with every system of taxation. Still, in view of the arguments on both sides briefly presented, it seems apparent, that, to such a nation as our own especially, far more good than evil would come from a judicious application of the principle of restriction. That our present system is greatly imperfect, and that in many instances it is excessive, is not at all unlikely. But that the country would find advantage in the entire abandonment of the system, is vastly improbable.

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CHAPTER VI.

THE INSTRUMENT OF EXCHANGE.

1. WHATEVER aids in increasing the facilities of association enhances the power of man over nature. The necessity of money as such a means is easily made manifest. The design of commerce is, that each person, while producing but a single commodity, or, at most, but a very few commodities, may equitably avail himself of the many commodities that he needs. We have seen, that, though one man may produce but one thing, he may produce enough of this to supply a thousand persons. At the same time he may need a thousand things which he does not produce. Hence a thousand men find opportunity to minister to his support.

2. The first exchanges in primitive times would naturally be by barter, each one exchanging the surplus of his own products for such surplus of others as he himself might desire. But the necessity of some other method would early evince itself. It would be found to be inconvenient and expensive for the shoemaker who has made a dozen pair of shoes, to go with them to all the other producers whose wares he may just at that time particularly want. Even if the expense could be in some way mitigated, there would be still other serious embarrassments. He might want a hat, but perhaps the hatter does not at that time want any shoes. He desires a coat; but the tailor may only want a single pair of

shoes, while an equal exchange would require six or seven pairs. Thus, to find purchasers of his own commodity among those whose commodities he desires in quantities corresponding to those of his desired by them, would be a protracted and tedious business.

A partial remedy for this inconvenience would be found in the agency of trade, — the establishment of places where all kinds of commodities would be taken by the merchant, and where within certain limits one would be reasonably sure to find whatever was desirable in return for products brought in. This might be further supplemented by bookaccount. But, greatly as these devices would abridge and expedite the business of exchange, it would be found that not only an agency is necessary, but also an instrument, medium readily receivable for all commodities, and in exchange for which all desirable commodities would be readily taken.

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