I have partly anticipated, yet I will state distinctly, my
Proposition V. Protection is necessary and proper to sustain as well as to create a beneficent adjustment of our National Industry.
“Why can’t our Manufacturers go alone?” petulantly asks a Free-Trader; “they have had Protection long enough. They ought not to need it any more.” To this I answer that, if Manufactures were protected as a matter of special bounty or favor to the Manufacturers, a single day were too long. I would not consent that they should be sustained one day longer than the interests of the whole Country required. I think you have already seen that, not for the sake of Manufacturers, but for the sake of all Productive Labor, should Protection be afforded. If I have been intelligible, you will have seen that the purpose and essence of Protection is Labor-Saving,—the making two blades of grass grow instead of one. This it does by “planting the Manufacturer as nearly as may be by the side of the Farmer,” as Mr. Jefferson expressed it, and thereby securing to the latter a market for which he had looked to Europe in vain. Now, the market of the latter is certain as the recurrence of appetite; but that is not all. The Farmer and the Manufacturer, being virtually neighbors, will interchange their productions directly, or with but one intermediate, instead of sending them reciprocally across half a continent and a broad ocean, through the hands of many holders, until the toll taken out by one after another has exceeded what remains of the grist. “Dear-bought and far-fetched” is an old maxim, containing more essential truth than many a chapter by a modern Professor of Political Economy. Under the Protective policy, instead of having one thousand men making Cloth in one hemisphere, and an equal number raising Grain in the other, with three thousand factitiously employed in transporting and interchanging these products, we have over two thousand producers of Grain, and as many of Cloth, leaving far too little employment for one thousand in making the exchanges between them. This consequence is inevitable; although the production on either side is not confined to the very choicest locations, the total product of their labor is twice as much as formerly. In other words, there is a double quantity of food, clothing, and all the necessaries and comforts of life, to be shared among the producers of wealth, simply from the diminution of the number of non-producers. If all the men now enrolled in Armies and Navies were advantageously employed in Productive Labor, there would doubtless be a larger dividend of comforts and necessaries of life for all, because more to be divided than now and no greater number to receive it; just so in the case before us. Every thousand persons employed in needless Transportation and in factitious Commerce are so many subtracted from the great body of Producers, from the proceeds of whose labor all must be subsisted. The dividend for each must, of course, be governed by the magnitude of the quotient.
But, if this be so advantageous, it is queried, why is any legislation necessary? Why would not all voluntarily see and embrace it? I answer, because the apparent individual advantage is often to be pursued by a course directly adverse to the general welfare. We know that Free Trade asserts the contrary of this; maintaining that, if every man pursues that course most conducive to his individual interest, the general good will thereby be most certainly and signally promoted. But, to say nothing of the glaring exceptions to this law which crowd our statute books with injunctions and penalties, we are everywhere met with pointed contradictions of its assumption, which hallows and blesses the pursuits of the gambler, the distiller, and the libertine, making the usurer a saint and the swindler a hero. Adam Smith himself admits that there are avocations which enrich the individual but impoverish the community. So in the case before us. A B is a farmer in Illinois, and has much grain to sell or exchange for goods. But, while it is demonstrable that, if all the manufactures consumed in Illinois were produced there, the price of grain must rise nearly to the average of the world, it is equally certain that A B’s single act, in buying and consuming American cloth, will not raise the price of grain generally, nor of his grain. It will not perceptibly affect the price of grain at all. A solemn compact of the whole community to use only American fabrics would have some effect; but this could never be established, or never enforced. A few Free-Traders standing out, selling their grain at any advance which might accrue, and buying “where they could buy cheapest,” would induce one after another to look out for No. 1, and let the public interests take care of themselves: so the whole compact would fall to pieces like a rope of sand. Many a one would say, “Why should I aid to keep up the price of Produce? I am only a consumer of it,”—not realizing or caring for the interest of the community, even though it less palpably involved his own; and that would be an end. Granted that it is desirable to encourage and prefer Home Production and Manufacture, a Tariff is the obvious way, and the only way, in which it can be effectively and certainly accomplished.
But why is a Tariff necessary after Manufactures are once established? “You say,” says a Free-Trader, “that you can Manufacture cheaper if Protected than we can buy abroad: then why not do it without Protection, and save all trouble?” Let me answer this cavil:—
I will suppose that the Manufactures of this Country amount in value to One Hundred Millions of Dollars per annum, and those of Great Britain to Three Hundred Millions. Let us suppose also that, under an efficient Protective Tariff, ours are produced five per cent. cheaper than those of England, and that our own markets are supplied entirely from the Home Product. But at the end of this year, 1843, we,—concluding that our Manufactures have been protected long enough and ought now to go alone,—repeal absolutely our Tariff, and commit our great interests thoroughly to the guidance of “Free Trade.” Well: at this very time the British Manufacturers, on making up the account and review of their year’s business, find that they have manufactured goods costing them Three Hundred Millions, as aforesaid, and have sold to just about that amount, leaving a residue or surplus on hand of Fifteen or Twenty Millions’ worth. These are to be sold; and their net proceeds will constitute the interest on their capital and the profit on their year’s business. But where shall they be sold? If crowded on the Home or their established Foreign Markets, they will glut and depress those markets, causing a general decline of prices and a heavy loss, not merely on this quantity of goods, but on the whole of their next year’s business. They know better than to do any such thing. Instead of it, they say, “Here is the American Market just thrown open to us by a repeal of their Tariff: let us send thither our surplus, and sell it for what it will fetch.” They ship it over accordingly, and in two or three weeks it is rattling off through our auction stores, at prices first five, then ten, fifteen, twenty, and down to thirty per cent. below our previous rates. Every jobber and dealer is tickled with the idea of buying goods of novel patterns so wonderfully cheap; and the sale proceeds briskly, though, at constantly declining prices, till the whole stock is disposed of and our market is gorged to repletion.
Now, the British manufacturers may not have received for the whole Twenty Millions’ worth of Goods over Fourteen or Fifteen Millions; but what of it? Whatever it may be is clear profit on their year’s business in cash or its full equivalent. All their established markets are kept clear and eager; and they can now go on vigorously and profitably with the business of the new year. But more: they have crippled an active and growing rival; they have opened a new market, which shall erelong be theirs also.
Let us now look at our side of the question:—
The American Manufacturers have also a stock of goods on hand, and they come into our market to dispose of them. But they suddenly find that market forestalled and depressed by rival fabrics of attractive novelty, and selling in profusion at prices which rapidly run down to twenty-five per cent. below cost. What are they to do? They cannot force sales at any price not utterly ruinous; there is no demand at any rate. They cannot retaliate upon England the mischief they must suffer,—her Tariff forbids; and the other markets of the world are fully supplied, and will bear but a limited pressure. The foreign influx has created a scarcity of money as well as a plethora of goods. Specie has largely been exported in payment, which has compelled the Banks to contract and deny loans. Still, their obligations must be met; if they cannot make sales, the Sheriff will, and must. It is not merely their surplus, but their whole product, which has been depreciated and made unavailable at a blow. The end is easily foreseen: our Manufacturers become bankrupt and are broken up; their works are brought to a dead stand; the Laborers therein, after spending months in constrained idleness, are driven by famine into the Western wilderness, or into less productive and less congenial vocations; their acquired skill and dexterity, as well as a portion of their time, are a dead loss to themselves and the community; and we commence the slow and toilsome process of rebuilding and rearranging our industry on the one-sided or Agricultural basis. Such is the process which we have undergone twice already. How many repetitions shall satisfy us?
Now, will any man gravely argue that we have made Five or Six Millions by this cheap purchase of British goods,—by “buying where we could buy cheapest?” Will he not see that, though the price was low, the cost is very great? But the apparent saving is doubly deceptive; for the British manufacturers, having utterly crushed their American rivals by one or two operations of this kind, soon find here a market, not for a beggarly surplus of Fifteen or Twenty Millions, but they have now a demand for the amount of our whole consumption, which, making allowance for our diminished ability to pay, would probably still reach Fifty Millions per annum. This increased demand would soon produce activity and buoyancy in the general market; and now the foreign Manufacturers would say in their consultations, “We have sold some millions’ worth of goods to America for less than cost, in order to obtain control of that market; now we have it, and must retrieve our losses,”—and they would retrieve them, with interest. They would have a perfect right to do so. I hope no man has understood me as implying any infringement of the dictates of honesty on their part, still less of the laws of trade. They have a perfect right to sell goods in our markets on such terms as we prescribe and they can afford; it is we, who set up our own vital interests to be bowled down by their rivalry, who are alone to be blamed.