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the giver, will in some future season / acquired skill and experience. A be the receiver, and the one that is country which has this skill and exbenefited by the freedom, I cannot but perience yet to acquire, may in other think that even to the apprehension of respects be better adapted to the profood-rioters it might be made apparent, duction than those which were earlier that in such cases they should do to in the field: and besides, it is a just others what they would wish done to remark of Mr. Rae, that nothing has a themselves.

greater tendency to promote improveIn countries in which the system of ments in any branch of production, than Protection is declining, but not yet its trial under a new set of conditions. wholly given up, such as the United But it cannot be expected that indiStates, a doctrine has come into notice viduals should, at their own risk, or which is a sort of compromise between rather to their certain loss, introduce free trade and restriction, namely, that a new manufacture, and bear the protection for protection's sake is im- burthen of carrying it on until the proper, but that there is nothing ob- producers have been educated up to jectionable in having as much protec- the level of those with whom the protion as may incidentally result from a cesses are traditional. A protecting tariff framed solely for revenue. Even duty, continued for a reasonable time, in England, regret is sometimes ex - will sometimes be the least inconvepressed that a "moderate fixed duty'' nient mode in which the nation can was not preserved on corn, on account tax itself for the support of such an of the revenue it would yield. Inde experiment. But the protection should pendently, however, of the general be confined to cases in wbich there is impolicy of taxes on the necessaries of good ground of assurance that the inlife, this doctrine overlooks the fact, dustry which it fosters will after a that revenue is received only on the time be able to dispense with it; nor quantity imported, but that the tax is should the domestic producers ever be paid on the entire quantity consumed. | allowed to expect that it will be conTo make the public pay much that the tinued to them beyond the time necestreasury may receive a little, is not an sary for a fair trial of what they are eligible mode of obtaining á revenue. capable of accomplishing. In the case of manufactured articles The only writer of any reputation as the doctrine involves a palpable incon- a political economist, who now adheres sistency. The object of the duty as a to the Protectionist doctrine, Mr. H. means of revenue, is inconsistent with C. Carey, rests its defence, in an its affording, even incidentally, any economic point of view, principally on protection. It can only operate as two reasons. One is, the great saving protection in so far as it prevents im- in cost of carriage, consequent on proportation; and to whatever degree it ducing commodities at or very near to prevents importation, it affords no the place where they are to be conrevenue.

sumed. The whole of the cost of car. The only case in which, on mere riage, both on the commodities im. principles of political economy, pro ported and on those exported in extecting duties can be defensible, is change for them, he regards as a when they are imposed temporarily direct burthen on the producers, and (especially in a young and rising na- not, as is obviously the truth, on the tion) in hopes of naturalizing a foreign consumers. On whomsoever it falls, industry, in itself perfectly suitable to it is, without doubt, a burthen on the the circumstances of the country. The industry of the world. But it is obsuperiority of one country over another vious (and that Mr. Carey does not in a branch of production, often arises see it, is one of the many surprising only from having begun it sooner. things in his book) that the burthen There may be no inherent advantage is only borne for a more than equion one part, or disadvantage on the valent advantage. If the commodity other, but ouly a present superiority of is bought in a foreign country with domestic produce in spite of the double it is founded; a truth which has only cost of carriage, the fact proves that, lately coine to be understood, but heavy as that cost may be, the saving which is henceforth destined to be a in cost of production ontweighs it, and permanent element in the thoughts of the collective labour of the country is statesmen, as it must always have on the whole better remunerated than been in the destinies of nations. To if the article were produced at home. the question of Protectionism, howCost of carriage is a natural protecting ever, it is irrelevant. That the imduty, which free trade has no power mense growth of raw produce in Ameto abrogate: and unless America | rica to be consumed in Europe, is progained more by obtaining her manu gressively exbausting the soil of the factures through the medium of her | Eastern, and even of the older Western corn and cotton, than she loses in cost States, and that both are already far of carriage, the capital employed in less productive than formerly, is creproducing corn and cotton in annually dible in itself, even if no one bore witincreased quantities for the foreign ness to it. But what I have already market, would turn to manufactures said respecting cost of carriage, is true instead. The natural advantage at also of the cost of manuring. Free tending a mode of industry in which trade does not compel America to exthere is less cost of carriage to pay, port corn; she would cease to do so, if can at most be only a justification for it ceased to be to her advantage. As, a temporary and merely tentative pro then, she would not persist in exporttection. The expenses of production ing raw produce and importing manubeing always greatest at first, it may factures, any longer than the labour happen that the home production, she saved by doing so, exceeded what though really the most advantageous, the carriage cost her; so, when it bemay not become so until after a certain came necessary for her to replace in duration of pecuniary loss, which it is the soil the elements of fertility which not to be expected that private specu she had sent away, if the saving in lators should incur in order that their cost of production were more than successors may be benefited by their equivalent to the cost of carriage and ruin. I have therefore conceded that of manure together, manure would be in a new country, a temporary pro- | imported, and if not, the export of corn tecting duty may sometimes be econo- would cease. It is evident that one of mically defensible ; on condition, how these two things would already have ever, that it be strictly limited in taken place, if there had not been near point of time, and provision be made at hand a constant succession of new that during the latter part of its soils, not yet exhausted of their ferexistence it be on a gradually de tility, the cultivation of which enables creasing scale. Such temporary pro her, whether judiciously or not, to tection is of the same nature as a postpone the question of manure. As patent, and should be governed by soon as it no longer answers better to similar conditions.

break up new soils than to manure The remaining argument of Mr. the old, America will either become a Carey in support of the economic | regular importer of manure, or will benefits of Protectionism, applies only without protecting duties grow corn to countries whose exports consist for herself only, and manufacturing for of agricultural produce. He argues, herself, will make her manure, as that by a trade of this description they | Mr. Carey desires, at home.* actually send away their soil; the dis- | tant consumers not giving back to the

To this Mr. Carey would reply (indeed,

he has already so replied in advance), that land of the country, as home consumers of all commodities, manure is the least suswould do, the fertilizing elements | ceptible of being conveyed to a distance. which they abstract from it. This This is true of sewage, and of stable manure,

but not true of the ingredients to which those argument deserves attention, on ac- 1;

manures owe their efficiency. These, on the count of the physical truth on wbich I contrary, are chiefly substances containing

For these obvious reasons, I hold modify the existing method of dige Mr. Carey's economic arguments for posing of the unoccupied lands, by Protectionism to be totally invalid. The raising their price ; instead of lowereconomic, however, is far from being ing it, or giving away the land gratuithe strongest point of his case. Ame- tously, as is largely done since the rican Protectionists often reason ex- | passing of the Homestead Act. To tremely ill, but it is an injustice to cut the knot in Mr. Carey's fashion, by them to suppose that their Protec- Protectionism, it would be necessary tionist creed rests upon nothing su that Ohio and Michigan should be perior to an economic blunder: many protected against Massachusetts as of them have been led to it much more well as against England : for the by consideration for the higher inte- manufactories of New England, no rests of humanity, than by purely eco more than those of the old country, nomic reasons. They, and Mr. Carey accomplish his desideratum of bring. at their head, deem it a necessary ing a manufacturing population to the condition of human improvement that doors of the Western farmer. Boston towns should abound; that men should and New York do not supply the want combine their labour, by means of in- of local towns to the Western Prairies, terchange, with near neighbours—with any better than Manchester; and it is people of pursuits, capacities, and as difficult to get back the manure mental cultivation different from their from the one place as from the other. own, sufficiently close at hand for mu- There is only one part of the Protual sharpening of wits and enlarging tectionist scheme which requires any of ideas-rather than with people on further notice: its policy towards colothe opposite side of the globe. They nies, and foreign dependencies; that believe that a nation all engaged in of compelling them to trade exclusively the same, or nearly the same, pursuit with the dominant country. A country -a nation all agricultural-cannot at which thus secures to itself an extra tain a high state of civilization and foreign demand for its commodities, culture. And for this there is a great undoubtedly gives itself some advanfoundation of reason. If the difficulty tage in the distribution of the general can be overcome, the United States, gains of the commercial world. Since, with their free institutions, their uni- | however, it causes the industry and versal schooling, and their omnipresent capital of the colony to be diverted press, are the people to do it ; but from channels, which are proved to be whether this is possible or not, is still the most productive, inasmuch as they à problem. So far, however, as it is are those into which industry and caan object to check the excessive dis- pital spontaneously tend to flow; there persion of the population, Mr. Wake- is a loss, on the whole, to the producfield has pointed out a better way: to tive powers of the world, and the

mother country does not gain so much great fertilizing power in small bulk; sub as she makes the colony lose. If, stances of which the human body requires but

therefore, the mother country refuses a small quantity, and hence peculiarly suscep. tible of being imported; the mineral alkalies

to acknowledge any reciprocity of obliand the phosphates. The question, indeed. I gation, she imposes a tribute on the mainly concerns the phosphates ; for of the colony in an indirect mode, greatly alkalies, soda is procurable everywhere,

more oppressive and iniurious than the while potass, being one of the constituents of granite and the other feldspathic rocks, direct. But if, with a more equitable exists in many subsoils, by whose progressive spirit, she submits herself to corredecomposition it is renewed; a large quan sponding restrictions for the benefit of tity also being brought down in the deposits of rivers. As for the phosphates, they, in the

the colony, the result of the whole very convenient form of pulverised bones, are transaction is the ridiculous one, that a regular article of commerce, largely im- each party loses much, in order that ported into England, as they are sure to be

little. into any country where the conditions of industry make it worth while to pay the price.

8 2. Next to the system of Protece

tion, among mischievous interferences tract; in this case, of one party only, with the spontaneous course of indus the borrower. As a matter of policy, trial transactions, may be noticed cer the notion may possibly be, that it is tain interferences with contracts. One for the general good that interest instance is that of the Usury Laws. should be low. It is however a misThese originated in a religious preju- | apprehension of the causes which indice against receiving interest on fluence commercial transactions, to supmoney, derived from that fruitful source pose that the rate of interest is really of mischief in modern Europe, the ato made lower by law, than it would be tempted adaptation to Christianity of made by the spontaneous play of supply doctrines and precepts drawn from the and demand. If the competition of Jewish law. In Mahomedan nations | borrowers, left unrestrained, would the receiving of interest is formally in- raise the rate of interest to six per terdicted, and rigidiy abstained from; cent, this proves that at five there and Sismondi has noticed, as one would be a greater demand for loans, among the causes of the industriał in than there is capital in the market to feriority of the Catholic, compared with supply. If the law in these circumthe Protestant parts of Europe, that stances permits no interest beyond five the Catholic church in the Middle per cent, there will be some lenders, Ages gave its sanction to the same pre who not choosing to disobey the law, judice; which subsists, impaired but and not being in a condition to employ not destroyed, wherever that religion is their capital otherwise, will content acknowledged. Where law or con- | themselves with the legal rate : but scientious scruples prevent lending at others, finding that in a season of pressinterest, the capital which belongs to ing demand, more may be made of persons not in business is lost to pro- their capital by other means than they ductive purposes, or can be applied to are permitted to make by lending it, them only in peculiar circumstances of will not lend it at all; and the loanpersonal connexion, or by a subterfuge. able capital, already too small for the Industry is thus limited to the capital demand, will be still further dimiof the undertakers, and to what they nished. Of the disappointed candican borrow from persons not bound by dates there will be many at such the same laws or religion as them- periods, who must have their necesselves. In Mussulman countries the sities supplied at any price, and these bankers and money dealers are either will readily find a third section of Hindoos, Armenians, or Jews. lenders, who will not be averse to join

In more improved countries, legisla in a violation of the law, either by cirtion no longer discountenances the re cuitous transactions partaking of the ceipt of an equivalent for money lent; nature of fraud, or by relying on the but it has everywhere interfered with honour of the borrower. The extra the free agency of the lender and bor- expense of the roundabout mode of prorower, by fixing a legal limit to the ceeding, and an equivalent for the risk rate of interest, and making the re- of non-payment and of legal penalties, ceipt of more than the appointed maxi- must be paid by the borrower, over mum a penal offence. This restriction, and above the extra interest which though approved by Adam Smith, has would have been required of him by been condemned by all enlightened the general state of the market. The persons since the triumphant onslaught laws which were intended to lower the made upon it by Bentham in his price paid by him for pecuniary accom“Letters on Usury," which may still modation, end thus in greatlyincreasing be referred to as the best extant writing it. These laws have also a directly on the subject.

demoralizing tendency. Knowing the Legislators may enact and maintain difficulty of detecting an illegal pecuUsury Laws from one of two motives: niary transaction between two persons, ideas of public policy, or concern for in which no third person is involved, so the interest of the parties in the con- | long as it is the interest of both to keep the secret, legislators have adopted competition will limit the extra dethe expedient of tempting the borrower mand to a fair equivalent for the risk to become the informer, by making the of his proving insolvent. Though the annulment of the debt a part of the law intends favour to the borrower, it penalty for the offence ; thus rewarding is to him above all that injustice is, men for obtaining the property of in this case, done by it. What can be others by false promises, and then not more unjust than that a person who only refusing payment, but invoking cannot give perfectly good security, legal penalties on those who have should be prevented from borrowing of helped them in their need. The moral persons who are willing to lend money sense of mankind very rightly in to him, by their not being permitted to famizes those who resist an otherwise receive the rate of interest which just claim on the ground of usury, and would be a just equivalent for their tolerates such a plea only when re risk ? Through the mistaken kindness 3orted to as the best legal defence of the law, he must either go without available against an attempt really the money which is perhaps necessary considered as partaking of fraud or to save him from much greater losses, extortion. But this very severity of or be driven to expedients of a far public opinion renders the enforce more ruinous description, which the ment of the laws so difficult, and the law either has not found it possible, or infliction of the penalties so rare, that has not happened, to interdict. when it does occur it merely victimizes Adam Smith rather hastily exan individual, and has no effect on pressed the opinion, that only two general practice.

kinds of persons, "prodigals and proIn so far as the motive of the re jectors," could require to borrow money striction may be supposed to be, not at more than the market rate of inpublic policy, but regard for the in terest. He should have included all terest of the borrower, it would be diffi persons who are in any pecuniary difficult to point out any case in which culties, however temporary their nesuch tenderness on the legislator's part cessities may be. It may happen to is more misplaced. A person of sane any person in business, to be disapmind, and of the age at which persons pointed of the resources on which he are legally competent to conduct their had calculated for meeting some enown concerns, must be presumed to be gagement, the non-fulfilment of which a sufficient guardian of his pecuniary on a fixed day would be bankruptcy. interests. If he may sell an estate, or In periods of commercial difficulty, this grant a release, or assign away all his is the condition of many prosperous property, without control from the law, mercantile firms, who become compeit seems very unnecessary that the titors for the small amount of disposonly bargain which he cannot make able capital which, in a time of general without its intermeddling, should be a distrust, the owners are willing to part loan of money. The law seems to with. Under the English usury laws, presume that the money-lender, dealing now happily abolished, the limitations with necessitous persons, can take ad. imposed by those laws were felt as a vantage of their necessities, and exact most serious aggravation of every comconditions limited only by his own plea mercial crisis. Merchants who could sure. It might be so if there were have obtained the aid they required at only one money-lender within reach. an interest of seven or eight per cent But when there is the whole monied for short periods, were obliged to give capital of a wealthy community to re 20 or 30 per cent, or to resort to forced sort to, no borrower is placed under sales of goods at a still greater loss. any disadvantage in the market merely Experience having obtruded these evils by the urgency of his need. If he can- on the notice of Parliament, the sort not borrow at the interest paid by of compromise took place, of which other people, it must be because he English legislation affords so many incannot give such good security : and I stances, and which helps to make our

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