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Depressed condition of Woollen Manufactures-Tariff of 1824-Alteration of British Tariff-Frauds upon the Revenue-Mr. Mallory's Report and Bill-Discussion in House-Proceedings in Senate-Harrisburg Convention-Division of Opinion.
AMONG the leading measures which occupied the attention of congress, at this session, was that for the encouragement of the growth and manufacture of wool. The principles on which this bill was discussed, differing somewhat from those on which, in general, propositions for protecting duties are supported or opposed, it may be necessary to enter somewhat into detail upon the subject.
There is undoubtedly a school of political economists, who maintain, that the policy of promoting manufactures at home, by duties laid on the importation of foreign articles, is, without exception, a mistaken and false policy, leading, among other evils, to an absolute waste of property to the amount of the protecting duty. There is an opposite class, who, without regard to the condition of the country, and its aptitude for particular branches of industry, is disposed to force the
domestic production of every spe. cies of fabric, by prohibitory duties on the rival fabric, as imported from abroad. In the popular discussions of the subject, the first class of economists is apt to enforce its doctrines, by showing the oppressiveness of the burdens laid upon consumption, by carrying into operation the views of the second class: while the patrons of an indiscriminate system of prohibitory duties, give a plausibility to their scheme, by dwelling on the salutary effects which have resulted from protecting duties, judiciously laid on the importation of articles either essential to the national wel. fare and strength, or for the manufacture of which the country is fully ripe.
The truth evidently here lies partly with each, and wholly with neither. It is not true, that the policy of protecting domestic industry, by duties on the product of fo
reign industry, is, without exception, try in the community; and the
a false or mistaken policy. Instances can be shown, (and the navigation laws of England and America are satisfactory ones,) in which protecting and even prohibitory duties, have not only been most signally productive of beneficial effects, but have been approved by the standard authorities of what is called the liberal school. Adam Smith pronounces the navigation law of England one of the wisest and best in the statute book. On the other hand, nothing is more certain, than that to attempt to force the indus. try of the country into a direction for which it is not mature, or which is not sufficiently favoured by external physical circumstances, would be followed by a corresponding waste of the public wealth. The so often quoted example of Adam Smith, in reference to the growth of wine in Scotland, is a sufficient illustration of this proposition. Although the arguments often heard in support of domestic manufac. tures, would seem to go the length of that example; yet, we presume no statesman or legislature would ever be found willing to follow up such an argument, by positive
The question, then, is one of time and measure, considered even in its principles. It is still more so, when we take into view the distributive justice, which is due alike to the several branches of indus.
protection which the state owes to the industry of its citizens, against the effect of measures of foreign governments, expressly aimed at its subversion. Under a government, when the policy of protecting duties has already been adopted, from whatever consideration, and extensively applied to some branches of industry, the other great interests of the country have a right to expect an equal favour. And under whatever state of things specific foreign legislation is so applied, as to disturb and neutralize the operation of the laws, passed for the proportionate encourage. ment of the various pursuits of the citizens of the country, it be. comes the duty of the government, on principles paramount to those of any school of political economy, to counteract the interference.
Most of the principles here stated, with the exception perhaps of the last, were brought into review, when the tariff of duties on imports underwent its last general revision in 1824. On that occasion, some of the members of congress, who took the lead in enforcing the sound doc. trines of the liberal school, against what they thought an extravagant extension of the protective policy, admitted the expediency, and recommended the provision of some further encouragement of the woollen manufacture, on the ground
that this was an article too essential, to be derived solely from a foreign source of supply; that it was one for which the country was not merely mature, but possessed peculiar capacity; and that it was entitled to a greater share of favour than it had yet received, when compared with the manufactures of cotton, iron, and some other articles. It is true, however, that opinions on these points were not unanimous, even among the parties interested. The manufacturers feared that an increased duty on foreign cloth would be accompanied (and its beneficial effects to them counterbalanced) by an increased duty on wool. The capitalists, who had embarked in the business, with extensive resources and improved machinery, were inclined to ascribe the languishing condition of the manufacture to the imperfect manner in which it had been hitherto attempted; and feared that the effect of an increased protection would be a destructive domestic competition. From these and other causes, the efforts of those engaged in this manufacture to obtain a substantial increase of protecting duties were less united and earnest, than might otherwise have been expected; and in the final passage of the bill, a smaller increase of duty on foreign cloth was provided for, than was thought requisite by the zealous friends of the measure; and the effect of this
was seriously counterbalanced by the increase of the duty on imported wool. The duty on imported woollens, the cost of which exceeded 33 cents per yard, was raised from 25 to 331 per cent. ; while the duty on imported wool was increased from 15 per cent. to a progressively increasing duty of 30 per cent. on all wool costing over 10 cents per pound. On wool under that price, the old duty of 15 per cent. remained.
It will be immediately seen, that this increase in the duty on wool, caused in effect a reduction of at least five per cent. in the new duty on cloth, which could not inthe united effect of the two duties be regarded as amounting to more than 281 per cent. So that the utmost advantage gained by the woollen manufacturer, in the revision of the tariff was an increase of 3 per cent. in the duty on the rival foreign article.
But in addition to this circumstance, there were several ways, in which the American manufacturer lost the advantage of any increased protection, which he might have enjoyed, in the undisturbed operation of the new law.
Contemporaneously with the revision of the American tariff in 1824, a revision took place of the English tariff, avowedly with the object of enabling the British manufacturers to command the foreign, and specifically the American market of low priced cloths. In this
revision a reduction was effected in the articles of foreign wool, dye stuffs, oil, &c. amounting, at the lowest computation to 163 per cent. on the value of the article manufactured, accompanied with a remark on the part of Mr. Huskisson, while proposing the last reduction of a half penny per pound in the duty on low priced wool, that even this reduction would be a "considerable relief" to the manufacturers against "foreign competition." Applying the effect of this reduction to the duty laid by congress in 1824, on foreign woollens, it effected, of course, a further reduction of that duty from 28 to 11 per cent. a lower rate than that at which it stood before the tariff of 1816, when the permanent duty was 12 per cent. on woollens, with a free importation of foreign wool.
paying a much lower duty, than would otherwise have been levied upon them.
Lastly, it was alleged that very extensive importations of foreign cloths were made by the agents (themselves foreigners) of the manufacturers, which cloths were notoriously charged at lower prices than they could be purchas. ed at in the foreign market. Whether this low estimation in the invoices were altogether fraudulent, or whether the foreign importer, being himself the manufacturer, merely intended to sell the surplus stock to no profit, and even to loss, for the sake of relieving the domestic market from a glut, cannot in all cases be ascertained. Both causes no doubt conspired to the inundation of the American market with goods, not merely cheaper than they could be manufactured here ; but cheaper than they could be imported, in open course of trade, by the American merchant.
In addition to the effects of this act of foreign legislation, the American manufacturer had to struggle with the arts and frauds of their agents. It is well known, that scarce any article of manufacture is susceptible of so wide a gradation in value and price, in proportion to the different degree of finish applied to the same substantial basis, as cloths. On this circumstance was founded a fraud, (to what extent practised is not of course a matter ascertained,) which consisted in im. porting cloths in an unfinished state, capable of being finished into much A bill was reported on the 10th better fabrics, and consequently of January, from this committee,
Such was the state of things, which was laid before congress, at their last session, in very numerous memorials, from almost every part of the country interested in the growth or the manufacture of wool. These memorials were, in the house of representatives, referred to the committee on manufactures, of which Mr. Mallory, of Vermont, was chairman.
of which the following were sub- visions of the bill. On the 17th of Jastantially the features:
1. That from and after the first of August, 1827, all manufactures of wool imported into the United States, (except worsted stuff goods, and blankets,) whose value shall not exceed forty cents the square yard, at the place whence import. ed, shall be deemed to have cost forty cents, and shall be charged with the present duty accordingly. If exceeding in cost forty cents, and not exceeding two dollars and fifty cents the square yard, they shall be deemed to have cost the latter sum, and shall be charged duty accordingly. If exceeding two dollars and fifty cents in cost, and not exceeding four dollars per square yard, shall be deemed to have cost the latter sum, and shall be charged accordingly.
2. That all unmanufactured wool now chargeable with thirty per cent. duty ad valorem, shall, from and after the first of June, 1828, be charged with thirty-five per cent. duty; and after the first of June, 1829, be charged with forty per cent. duty. If the actual value of such wool at the place whence im. ported shall exceed ten, and not exceed forty cents per pound, it shall be deemed to have cost forty cents, and be charged accordingly, as above stated.
The third section provided for a duty on wool imported on the skin. Such in substance were the pro
nuary, the house resolved itself into committee of the whole on the state of the union, by a vote of 80 to 59, to take up this bill. The debate was opened by Mr. Mallory, in a detailed exposition of the grounds, on which the bill had been prepared. He stated, from the best estimate he had been able to form, that the capital invested in the woollen manufacture amounted to forty millions of dollars, and that sixty thousand individuals were actually employed in it. With respect to the number of sheep, he observed that it had been assumed to be fifteen millions in the United States. In 1825, it was ascertained to be 3,496,000 in the state of New-York. If the number had gone on increasing, it could not, at the present time, be less than 4,000,000 in that state; and calculating on this ratio, must be at least 14,000,000 in the union. Of these Mr. M. calculated, that at least ten millions of sheep were kept, to supply the wool called for by the manufacturers. These ten millions of sheep, at a low estimate, were worth two dollars each, giving twenty millions of dollars as the value of the flocks dependent on the manufacture. The annual amount of wool required by the manufacturers, was probably not less than 40,000,000 lbs. Taking it to be but 30,000,000 lbs. its value at thirty-five cents per lb. would be over $10,000,000. The quantity of