To see at once how quickly Franklin could evade the danger, lurking in the proposition, urged by John Adams upon Vergennes, that the subjects of King Louis were as fairly amenable to the will of Congress, in reducing the value of paper money in their hands to one part in forty, as the Americans themselves, and yet how perfectly Franklin understood the workings of a depreciated paper currency, we need but turn to a letter from him to M. Le Veillard dated Feb. 17, 1788.
Where there is a free government [he said in this letter] and the people make their own laws by their representatives, I see no injustice in their obliging one another to take their own paper money. It is no more so than compelling a man by law to take his own note. But it is unjust to pay strangers with such money against their will. The making of paper money with such a sanction is however a folly, since, although you may by law oblige a citizen to take it for his goods, you cannot fix his prices; and his liberty of rating them as he pleases, which is the same thing as setting what value he pleases on your money, defeats your sanction.
Franklin was a free-trader, but his opinions with regard to import duties are sometimes streaked with Protectionist reasoning. All the natural leanings of such a broad-minded man were, it almost goes without saying, in favor of unrestricted commerce. His general attitude towards commercial restrictions was emphatically expressed in one of his letters to Peter Collinson from which we have already quoted.
In time perhaps [he said] Mankind may be wise enough to let Trade take its own Course, find its own Channels, and regulate its own Proportions, etc. At present, most of the Edicts of Princes, Placaerts, Laws & Ordinances of Kingdoms & States for that purpose, prove political Blunders. The Advantages they produce not being general for the Commonwealth; but particular, to private Persons or Bodies in the State who procur'd them, and at the Expence of the rest of the People.
Many years later, he wrote to Benjamin Vaughan, "The making England entirely a free port would have been the wisest step ever taken for its advantage." In recent years, his Wail of a Protected Manufacturer has been reprinted and widely circulated in England by the opponents of the Fair Trade movement:
Suppose a country, X, which has three industries—cloth, silk, iron—and supplies three other countries—A, B, and C—therewith, wishes to increase the sale and raise the price of cloth in favour of its cloth-makers.
To that end X prohibits the importation of cloth from A.
In retaliation A prohibits silks coming from X.
The workers in silk complain of the decline in their trade.
To satisfy them X excludes silk from B.