If the establishment of American manufactures, therefore, had the sole effect of creating a new and an American demand for cotton, exactly to the same extent in which it lessened the British demand, there would be no just cause of complaint against the tariff. The gain in one place would precisely equal the loss in the other. But the true state of the matter is much more favorable to the cotton-grower. It is calculated that the cotton manufactories of the United States absorb at least two hundred thousand bales of cotton annually. I believe it to be more. The two ports of Boston and Providence alone received during the last year near one hundred and ten thousand bales. The amount is annually increasing. The raw material of that two hundred thousand bales is worth six millions, and there is an additional value conferred by the manufacturer of eighteen millions; it being generally calculated that, in such cotton fabrics as we are in the habit of making, the manufacture constitutes three fourths of the value of the article. If, therefore, these twenty-four millions worth of cotton fabrics were not made in the United States, but were manufactured in Great Britain, in order to obtain them, we should have to add to the already enormous disproportion between the amount of our imports and exports, in the trade with Great Britain, the further sum of twenty-four millions, or, deducting the price of the raw material, eighteen millions! And will gentlemen tell me how it would be possible for this country to sustain such a ruinous trade? From all that portion of the United States lying north and east of James river, and west of the mountains, Great Britain receives comparatively nothing. How would it be possible for the inhabitants of that largest portion of our territory, to supply themselves with cotton fabrics, if they were brought from England exclusively? They could not do it. But for the existence of the American manufacture, they would be compelled greatly to curtail their supplies, if not absolutely to suffer in their comforts. By its existence at home, the circle of those exchanges is created, which reciprocally diffuses among all who are embraced within it the productions of their respective industry. The cotton-grower sells the raw material to the manufacturer; he buys the iron, the bread, the meal, the coal, and the countlessnumber of objects of his consumption from his fellow-citizens, and they in turn purchase his fabrics. Putting it upon the ground merely of supplying those with necessary articles who could not otherwise obtain them, ought there to be from any quarter an objection to the only system by which that object can be accomplished? But can there be any doubt, with those who will reflect, that the actual amount of cotton consumed is increased by the home manufacture? The main argument of gentlemen is founded upon the idea of mutual ability resulting from mutual exchanges. They would furnish an ability to foreign nations by purchasing from them, and I, to our own people, by exchanges at home. If the American manufacture were discontinued, and that of England were to take its place, how would she sell the additional quantity of twenty-four millions of cotton goods, which we now make? To us? That has been shown to be impracticable. To other foreign nations? She has already pushed her supplies to them to the utmost extent. The ultimate consequence would then be, to diminish the total consumption of cotton, to say nothing now of the reduction of price that would take place by throwing into the ports of Great Britain the two hundred thousand bales, which, no longer being manufactured in the United States, would go thither.
Second, that the import duty is equivalent to an export duty, and falls on the producer of cotton.
[Here general Hayne explained, and said, that he never contended that an import duty was equivalent to an export duty, under all circumstances; he had explained in his speech his ideas of the precise operation of the existing system. To which Mr. Clay replied, that he had seen the argument so stated in some of the ingenious essays from the South Carolina press, and would therefore answer it.]
The framers of our constitution, by granting the power to congress to lay imports, and prohibiting that of laying an export duty, manifested that they did not regard them as equivalent. Nor does the common sense of mankind. An export duty fastens upon, and incorporates itself with, the article on which it is laid. The article cannot escape from it—it pursues and follows it, wherever the article goes; and if, in the foreign market, the supply is above or just equal to the demand, the amount of the export duty will be a clear deduction to the exporter from the price of the article. But an import duty on a foreign article leaves the exporter of the domestic article free, first, to import specie; secondly, goods which are free from the protecting duty; or, thirdly, such goods as, being chargeable with the protecting duty, he can sell at home, and throw the duty on the consumer.
But, it is confidently argued that the import duty falls upon the grower of cotton; and the case has been put in debate, and again and again in conversation, of the South Carolina planter, who exports one hundred bales of cotton to Liverpool, exchanges themfor one hundred bales of merchandise, and when he brings them home, being compelled to leave at the custom-house forty bales in the form of duties. The argument is founded on the assumption that a duty of forty per centum amounts to a subtraction of forty from the one hundred bales of merchandise. The first objection to it is, that it supposes a case of barter, which never occurs. If it be replied, that it nevertheless occurs in the operations of commerce, the answer would be that, since the export of Carolina cotton is chiefly made by New York or foreign merchants, the loss stated, if it really accrued, would fall upon them, and not upon the planter. But, to test the correctness of the hypothetical case, let us suppose that the duty, instead of forty per centum, should be one hundred and fifty, which is asserted to be the duty in some cases. Then, the planter would not only lose the whole hundred bales of merchandise, which he had gotten for his hundred bales of cotton, but he would have to purchase, with other means, an additional fifty bales, in order to enable him to pay the duties accruing on the proceeds of the cotton. Another answer is, that if the producer of cotton in America, exchanged against English fabrics, pays the duty, the producer of those fabrics also pays it, and then it is twice paid. Such must be the consequence, unless the principle is true on one side of the Atlantic, and false on the other. The true answer is, that the exporter of an article, if he invests its proceeds in a foreign market, takes care to make the investment in such merchandise as, when brought home, he can sell with a fair profit; and, consequently, the consumer would pay the original cost and charges, and profit.
Third. The next objection to the American system is, that it subjects South Carolina to the payment of an undue proportion of the public revenue. The basis of this objection is the assumption, shown to have been erroneous, that the producer of the exports from this country pays the duty on its imports, instead of the consumer of those imports. The amount which South Carolina really contributes to the public revenue, no more than that of any other state, can be precisely ascertained. It depends upon her consumption of articles paying duties, and we may make an approximation sufficient for all practical purposes. The cotton-planters of the valley of the Mississippi with whom I am acquainted, generally expend about one third of their income in the support of their families and plantations. On this subject I hold in my hands a statement from a friend of mine, of great accuracy, and a member of the senate. According to this statement, in a crop of ten thousand dollars, the expenses may fluctuate between two thousand eight hundred dollars and three thousand two hundred dollars. Of this sum, about one fourth, from seven to eight hundred dollars, may be laid out in articles paying the protective duty; the residue is disbursed for provisions, mules,horses, oxen, wages of overseer, &c. Estimating the exports of South Carolina at eight millions, one third is two million six hundred and sixty-six thousand six hundred and sixty-six dollars; of which one fourth will be six hundred and sixty-six thousand six hundred and sixty-six and two thirds dollars. Now, supposing the protecting duty to be fifty per centum, and that it all enters into the price of the article, the amount paid by South Carolina would only be three hundred and thirty-three thousand three hundred and thirty-three and one third dollars. But the total revenue of the United States may be stated at twenty-five millions, of which the proportion of South Carolina, whatever standard, whether of wealth or population, be adopted, would be about one million. Of course, on this view of the subject, she actually pays only about one third of her fair and legitimate share. I repeat, that I have no personal knowledge of the habits of actual expenditure in South Carolina; they may be greater than I have stated, in respect to other parts of the cotton country; but if they are, that fact does not arise from any defect in the system of public policy.
Fourth. An abandonment of the American system, it is urged, would lead to an addition to our exports of one hundred and fifty millions of dollars. The amount of one hundred and fifty millions of cotton in the raw state, would produce four hundred and fifty millions in the manufactured state, supposing no greater measure of value to be communicated, in the manufactured form, than that which our industry imparts. Now sir, where would markets be found for this vast addition to the supply? Not in the United States, certainly, nor in any other quarter of the globe, England having already everywhere pressed her cotton manufactures to the utmost point of repletion. We must look out for new worlds, seek for new and unknown races of mortals, to consume this immense increase of cotton fabrics.
[General Hayne said, that he did not mean that the increase of one hundred and fifty millions to the amount of our exports would be of cotton alone, but of other articles.]
What other articles? Agricultural produce—bread-stuffs, beef and pork, and so forth? Where shall we find markets for them? Whither shall we go? To what country, whose ports are not hermetically sealed against their admission? Break down the home-market and you are without resource. Destroy all other interests in the country, for the imaginary purpose of advancing the cotton-planting interest, and you inflict a positive injury, without the smallest practical benefit to the cotton-planter. Could Charleston, or the whole south, when all other markets are prostrated, or shut against the reception of the surplus of our farmers, receive that surplus? Would they buy more than they might want for their own consumption? Could they find markets which other parts of theunion could not? Would gentlemen force the freemen of all north of James river, east and west, like the miserable slave, on the Sabbath day, to repair to Charleston, with a turkey under his arm, or a pack upon his back, and beg the clerk of some English or Scotch merchant, living in his gorgeous palace, or rolling in his splendid coach in the streets, to exchange his ‘truck’ for a bit of flannel to cover his naked wife and children! No! I am sure that I do no more than justice to their hearts, when I believe that they would reject what I believe to be the inevitable effects of their policy.
Fifth. But it is contended, in the last place, that the south cannot, from physical and other causes, engage in the manufacturing arts. I deny the premises, and I deny the conclusion. I deny the fact of inability; and, if it existed, I deny the conclusion, that we must, therefore, break down our manufactures, and nourish those of foreign countries. The south possesses, in an extraordinary degree, two of the most important elements of manufacturing industry—water-power and labor. The former gives to our whole country a most decided advantage over Great Britain. But a single experiment, stated by the gentleman from South Carolina, in which a faithless slave put the torch to a manufacturing establishment, has discouraged similar enterprises. We have in Kentucky the same description of population, and we employ them, almost exclusively, in many of our hemp manufactories. A neighbor of mine, one of our most opulent and respectable citizens, has had one, two, if not three, manufactories burnt by incendiaries; but he persevered, and his perseverance has been rewarded with wealth. We found that it was less expensive to keep night-watches than to pay premiums for insurance, and we employed them.