tries." At the first session of the first congress under the new constitution, a law was passed, one of the declared objects of which was, "the encouragement and protection of domestic manufactures, by duties on goods, wares, and merchandise imported."

848. The opinions of the framers of the government respecting the expediency of encouraging domestic industry by protective duties, were the same as are held by the advocates of protection at the present day. It was the opinion of Washington, that "our country ought not to remain dependent on foreign supply, always precarious, because liable to be interrupted."

§ 849. It was remarked by Mr. Jefferson, that," when a nation imposes high duties on our productions, or prohibits them altogether, it may be proper for us to do the same by theirs." In relation to the protection of manufactures, he observed: "The oppressions on our agriculture, in foreign ports, would thus be made the occasion of relieving it from a dependence on the councils and conduct of others, and of promoting arts, manufactures, and population at home." At a later period, he remarked that "the history of the last twenty years had been a sufficient lesson for us to depend

for necessaries on ourselves alone."

the

§850. In recommending to congress some action upon subject of protection, Mr. Madison, after expressing the belief that manufacturing industry, by a proper encouragement," will become, at an early day, not only safe against competitions from abroad, but a source of domestic wealth, and even of external commerce," continues as follows: "In selecting the branches more especially entitled to the public patronage, a preference is obviously claimed by such as will relieve the United States from a dependence on foreign supplies, ever subject to casual failures, for articles necessary for the public defence, or connected with the primary wants of individuals."

§ 851. Respecting the effect of protection upon price,

was the opinion of Washington on the propriety of protection? § 849. State the reasons of Jefferson in favor of the same principle. § 850. For what reasons did Madison recommend the subject to the action of Congress? § 851. What was the opinion of Hamilton as to the

Mr. Hamilton observed: "When a domestic manufacture has attained to perfection, and has engaged in the prosecution of it a competent number of persons, it invariably be. comes cheaper." "The internal competition which takes place, soon does away every thing like monopoly, and, by degrees, reduces the price of the article to the minimum of a reasonable profit on capital employed. This accords with the reason of the thing and with experience.' "In a national point of view, a temporary enhancement of price must always be compensated by a permanent reduction of it."

§ 852. The opinions above cited accord with those of our statesmen in later times, in the following particulars: (1.) The superiority of a home market, on account of its greater steadiness and certainty; (2.) the inexpediency of being dependent for necessaries on foreign nations; (3.) the ultimate reduction of price as the effect of the protection of domestic industry. And the encouragement of domestic manufactures was recommended by every administration, (unless the second be an exception,) for more than thirty years, under the present constitution, before any general system of protection was established; the demand for our agricultural products, caused by the wars in foreign countries and in our own, during a great part of that period, rendering it less necessary.

§ 853. But the causes which had kept up this demand for American produce having ceased to exist, a law was enacted in 1816, having in view the encouragement of domestic industry by protective duties. Among the principal articles of manufacture protected by this act, were coarse cotton goods. In 1824, a general act was passed, amending all former acts, greatly extending the tariff, and giving more effectual encouragement, by increased duties, to such manufactures as were supposed not to be adequately protected by the laws then existing.

854. This act, however, did not pass without strong

effect of protection on the price of protected products? § 852. What are the principal advantages which were then considered to attend the encouragement of domestic industry? § 853. What was the object of the law of 1816? When was the general tariff act passed? § 854.

opposition. It was said, that the protection of manufac tures would ruin the agricultural and commercial interests. The contemplated duties would be taxes to their full amount upon the consumers of all articles protected. The laboring classes of the community would be depressed for the exclusive benefit of the manufacturers, who would reap excessive profits from their business. Monopolies would be established; and the few would be enriched at the expense of the

many.

A

§ 855. On the other hand, it was contended, that, instead of being interrupted, agricultural prosperity would be promoted by the proposed protection of manufactures. larger portion of the population would be dependent on the farmer for subsistence; the division of labor would be carried more nearly to a state of perfection; and labor, consequently, would be rendered more productive and profitable.

§ 856. Commerce, too, it was believed, would be increased rather than diminished. Those foreign manufactures which were to be affected by the proposed duties, were chiefly from countries which would still be dependent on us for the few articles which their selfish policy had not prohibited. The trade, therefore, with these countries could not be greatly diminished; whereas the stimulus which would be given to the industry of the nation in the several branches of manufacture, would increase the amount and variety of domestic products, which would find a market in other countries; and the increased trade with these would more than compensate for the loss of trade with the former.

§857. With regard to the accumulation of wealth in the hands of the few, and the reduction of the wages of labor, it was observed, that fortunes were not more likely to be acquired by manufacturing, than by foreign commerce, or planting. Labor dependent upon manufacturing wealth, would be no more depressed than labor dependent upon agricultural or commercial wealth. The low prices of lands

On what grounds was this act opposed? § 855. How were these ob. jections answered? § 856. What different opinions were entertained as to the effects of protection upon commerce? § 857. What reasons were there for supposing that protection would not cause the depres

in this country would furnish adequate security against the oppression of the laboring portion of the community by capitalists.

858. Another objection, the most plausible, perhaps, if not the most weighty, that was urged against the protective system, was, that it would force capital and labor into new and unnatural employments, for which the country was not prepared, in consequence of the present high price of wages. Manufactures could not be successfully established, it was said, until the laboring population should become so numerous as to be compelled to work for the mere necessa. ries of life, as in the manufacturing nations of Europe, a condition to which it was not desirable to see the laboring classes of this country reduced. But while labor continued to receive a fair compensation, higher prices must be paid for the home manufacture.

§ 859. To this objection it was replied, that there was already a want of employment in existing occupations, which were overflowing with competition. Some new field of business ought to be opened for the relief of the laboring classes. This relief would be afforded by the system proposed. The wages of laborers would be raised; and still the measure would ultimately effect a reduction of prices. For it must be remembered, that in manufactures the princi pal labor was artificial, not natural labor; and that the great improvements in machinery, and the possession of the raw materials in vast abundance, or the capacity to produce them, would, more than low wages, reduce the price of manufactures. The advocates of protection prevailed. The system was adopted: and, in order to judge of the correctness of the theory on which it was based, it will be neces sary to see what have been its practical operations.

sion of the poor and laboring classes? § 858. What effect upon cap. ital and labor was apprehended from protection? Why was it sup. posed that this country could not compete with others in manufactur. ing? $859. What answer was given to these objections?

CHAPTER XI.

Effects of the Protective System of this Country.

§860. PRIOR to the late war, (1812,) the coarse cotton goods consumed in this country, were imported from India, and cost the consumers about 25 cents a yard. During the war, our supplies being cut off, cotton factories were to some extent put into operation, and a partial supply was furnished. But after the close of the war, the India goods being again imported, most of these establishments were ruined. By the tariff of 1816, the home market was secured to the domestic manufacturer; and such were the combined effects of competition, and the improvements in skill, labor, and machinery, as to enable the consumer, a few years afterwards, to purchase a superior article of domestic manufacture, for 8 cents a yard, being less than one third of the former price.

§ 861. The duty on a square yard of cotton imported, if estimated by the ad valorem duty to which it is subject, would be about 8 cents. Since the passage of the act imposing this duty, cloth of the above description has been purchased for less than 8 cents a square yard, being less than the duty by which its manufacture is protected. The low price is the natural effect of the competition among manufacturers, and the superabundance of the quantity manufactured. Thus, instead of being taxed with the amount of duty imposed, in the increased price of the protected product, the consumer has been enabled to purchase such product at a price less than the duty by which it is protected; a price which subjected the manufacturer to a loss, instead of affording him an excessive profit. Prices, however, soon advanced, until they found their natural level; and cotton cloths may be bought of the manufacturer at prices little higher than the amount of the protecting duty.

§860. What is the result of the protection of the cotton manufacture in this country? § 861. What is the duty on a square yard of cotton cloth? Does the consumer pay a tax of this amount on a yard of cloth? How are we to account for the present low price