Good maxims are often worshiped with pretended devotion, and clothed with the splendours of eloquence, when their subversion is meditated; like white heifers whose horns were tipped with gold, and adorned with ribbons, preparatory to their being sacrificed.
The report of the Committee of Manufactures dated the 15th day of January, 1821, commences with the usual zeal which precedes innovation, and with the common eulogy of principles intended to be violated. It is like a road smoothly paved at the beginning, but terminating in rocks and precipices. It embraces a great scope of information, condenses the arguments in favour of the advocated system, and is embellished by a style, only assailable by the simplicity of truth. It is the ultimate Thule upon which the disciples of the doctrine for restricting the liberty of property, have taken their stand; and if they can be dislodged from their last fortress, no other place of refuge will remain. If the general welfare is the object of this report, it courts an examination; and if ambition, avarice, or prejudice, lurks under a painted exterior, the same welfare demands their detection: for, though the Committee is dead, its ghost may haunt us hereafter.
The Committee state —
That at the end of thirty years our debt is increased $20,000,000; that our revenue is inadequate to our expenditure in a time of peace; that the national domain is impaired, and $20,000,000 of its proceeds expended; that $35,000,000 have been drawn from the people by internal taxation, and $341,000,000 by impost, and yet the public treasury is dependent on loans; that there is no national interest which is in a healthful thriving condition; that it is not a common occurrence in peace, that the people and the government should reciprocally call on each other to relieve their distresses; that the government has been too unwise to profit by experience, especially the experience of other nations; that its policy has been adopted for war and not for peace; that other nations shun our principles of political economy and profit; that the Cortes of Spain are establishing commercial restrictions; that history does not furnish another instance of a nation relying on the importation of goods as the main and almost exclusive source of revenue; that in every other nation agriculture, manufactures, and commerce, have been deemed intimately connected, each necessary to the growth and wealth of each other, but in ours there is said to exist an hostility between them; that the true economy of individuals is to earn more than they expend, yet this is said to be bad policy for a nation; that if the debts of the country were deducted from the value of property, the nation is poorer than in 1790; that our exports have not increased in proportion to our population; that the exportation of cotton has indeed prodigiously increased, but that to sixteen States it affords no profits, except by carrying and consumption; that it furnishes no foreign market for other productions; that the currency has been reduced in three years from $110,000,000 to $45,000,000; that no calamity has visited the country, and that in the last five years of exuberant plenty, our fat kine has become lean; that an overflowing treasury indicates national prosperity; that the causes of this distress cannot be in the people, and must be in the government; that revenue cannot be permanent whilst consumption is in a consumption; that there should be no system of restriction, but one of reciprocity; that this is a free trade; that this reciprocal system of restriction has aided our commerce; that year succeeds year and our troubles increase; that no other remedy for them has been offered but an extension of the restrictive system, which the Committee propose as a forlorn hope; that the means of consumption must be in the hands of our own people, and under the control of our own government; that the flood of importations has deprived currency of its occupation; that there is more specie in the United States than at any former period, but it is not currency, because it is unemployed; that the importation of foreign goods was never so great, as when our embarrassments were produced; that the importer's ledger ought to settle the question; that in the cases of bankruptcy foreign creditors appear; that we have only the miserable and ruinous circulation of a currency for remittance to foreign nations; that they hold the coin and we hear it jingle; that the excess of exports over imports is the rate of profit; that we flourished in war and are depressed in peace, because manufactures then flourished and are now depressed; that there is an animating currency where they still flourish, and scarce any where they do not, except in the cotton-growing States; that the people are groaning under a restrictive system of bounties, premiums, privileges and monopolies imposed by foreign nations; that commerce is exporting not importing, and by reversing her employment she is expatriated; that they have no predilections for foreign opinions, and are less desirous to force facts to conform to reasoning, than to apply reasoning to facts; and that they trace the true principles of political economy to the conduct and the interest of the individuals who compose the nation.
Excluding rhetorical flourishes with which the report, inspired by a furor dogmaticus, or a zeal for truth abounds, I have literally extracted the plain assertions upon which its conclusion is founded. In examining the medley of truth, error, and inconsistencies, from which the Committee have drawn their inferences, the alternative is to use language sufficiently strong to express my convictions, and to convey my meaning without reserve; or smoothed like treachery towards the cause I am advocating. Wherever plain truth is considered as indecorous, or it is thought necessary to mingle adulation with reasoning, a nation has prepared its mind for the catastrophe of sycophancy; yet decency as well as firmness is a duty; and freedom of opinion may, I hope, be exercised, without violating the obligations of civility.
The leading facts from which the Committee have extracted their conclusion, are unquestionably true. In thirty years the people have paid in taxes $376,000,000; the public debt has increased $20,000,000, and the public lands have produced the same amount. The Federal treasury, having received $416,000,000 in thirty years, is bankrupt, and the people are distressed. The Committee have likened national to domestick economy, and the comparison is correct. A government, like an individual is embarrassed or ruined, by expenses beyond its income. It cannot export its patronage, its exclusive privileges, and its extravagance, to foreign nations, and bring back foreign cargoes of frugality and equal laws for home consumption. The Committee have reprobated the importation of foreign necessaries, but they have quite overlooked the effects of our having largely imported a catalogue of foreign political manufactures, which are the luxuries of governments, and infinitely more injurious to nations, than the luxuries which individuals import and consume. Let our governments surrender these dear foreign political luxuries, and we shall no longer feel the distress of buying cheap foreign manufactures.
Suppose an individual to have purchased an estate for one hundred millions — about the price of our independence; to have spent $376,000,000 of its profits in thirty years, to have sold and spent $20,000,000 worth of the land itself, to have added $20,000,000 to his debts, and finding his affairs very much embarrassed by this process, to have asked in his distress, the counsel of his friends. His agricultural friend advises him to diminish his expenses and to forbear to run in debt. His mercantile friend, to supply his tenants with necessaries at the cheapest rate, that they may be able to pay their rents; his factory-capitalist friend, to give him a bounty for making spinners and weavers of these tenants; and stockjobbing friend, to continue his extravagances by the aid of borrowing. What would domestick economy, the honest referee of the question, chosen by the Committee, say to these counsels? Would she prefer the speculations of pecuniary craft upon the credulity of our landlord, to the sound common sense of tillage? Would she prefer the arithmetick of the stockjobber, to that of the merchant? Whence is the money to come according to the united advice of the stockjobber and speculator to pay usury to one and bounties to the other; and also to feed the landlord's extravagance, and discharge his debts? Some of his tenants who pay rents are to be transferred to factory-capitalists, who are to receive bounties and to pay no rents. His stockjobbers must have interest and premiums. His remaining tenants will be rendered less able to pay their rents, by having to support these two combinations. He cannot draw money from foreign countries to sustain his extravagance, by manufactures, because theirs must be cheaper than his own for some centuries after he is dead. Would any landlord of common sense, who had considerably diminished his debts, and enjoyed great prosperity previously to his taking the factory-speculators and stockjobbers into his service, shut his eyes upon his own experience, and persevere in surrendering his own understanding to their counsels?
It is, in fact by too much proficiency in the art of political spinning and weaving, and not by too little patronage of capitalists, that our prosperity has been lost. By spinning legislative into judicial powers; by spinning federal into local powers; and by spinning exclusive privileges out of representations created for securing equal rights, the oppressive results stated by the Committee have been produced. We can spin out debates about economy, so as to make economy itself an instrument of waste. We can weave legislative and judicial powers into one web, to exhaust time, and increase the income of the workmen. We can weave law and judgment into more durable stuff than constitutions. Our parties have not been deficient in shooting the political shuttle for weaving republican threads, into a web compounded of extravagance, patronage, heavy taxation, exclusive privileges and consolidation. They are weaving a co-ordinate, into a sovereign and absolute power. They have woven the people out of four hundred and sixteen millions in thirty years. Considering that Washington's administration worked well with three or four millions, that Adams' worked ill with ten, that Jefferson's worked admirably with six; and when this revenue was increased by commerce, accounted for the surplus by paying a large portion of the public debt, and a part of the purchase money of Louisiana; a republican party must work by very different rules, which requires twenty-five millions in time of peace for carrying on its trade. The true manufacturing system proposed by the Committee, is to extend this species of trade. It offers more money to avarice, and even urges the enormous expense already endured, as an argument for aggravating the distresses it has already produced. But the estimate of the Committee, high as it is, excludes the great sums of money out of which the people are worked by unnecessary State expenditures, and by the machinery of banking and protecting duties. These items included, and at least the enormous annual draft of sixty millions is now taken from them in the existing appreciated money. Compare this deduction from the profits of labour, with the deductions in the times of Washington, Adams, and Jefferson, and consider how it happens that both the people and the treasury are famished. Can it have resulted from any other cause, but some new political system, by which the old one has been overturned? The remedy proposed for these wonderful and seemingly inconsistent misfortunes, is no less wonderful than the misfortunes themselves. They have been caused, say the Committee, by the want of wisdom in the government, and they propose to mend the workmanship of political jacks by mechanical jinnies; and to finish the web for conveying the nation to suitors for money, instead of imitating the conduct of the wise Penelope.
Let us, say the Committee, persevere in the wise imitations by our foolish government, of other nations, by which they have acquired; hear reader! — by which these envied other nations have acquired — wealth and happiness. The prosperity of European nations, is reiterated to provoke our envy, and urged as an argument to convince our reason. Yet it is only a palpable evasion, and a delusive bait. The delusion lies in substituting the word "nations" for "governments," and the bait, in varnishing over the miseries of European nations, with the wealth of privileged classes, in order to hide the hook intended to be swallowed. "The interest of nations!" What government except our own is so constituted, as to enable a nation to pursue its own interest? If there be any such, it is time for us to adopt it, admitting the truth of the Committee's assertion, that our government has not been guided by the national interest. If no European nations are able to compel their governments to pursue the national interest, it is a naked sophistry to assume, that they have done, what they could not do. The fact is, that all the European governments are so constituted, as to be completely able to sacrifice the national interest to their own. Have we forgotten human nature? When did such an absolute power chasten governments of avarice, and convert their administrators into patriots? We ought to have had the phenomena pointed out to us, before we were desired to believe, that a political miracle had been worked in Europe, sufficient to induce us to resign our faith.
Look steadfastly at these supposed martyrs to patriotism; these self-denying political mummeries; these immolaters of avarice and ambition upon the altar of national interest. The admired government of England is compounded of a noble order; of an unequal place-hunting and place-holding representation, ready to sell their votes bought of rotten boroughs; and of an hereditary George. The government of Spain, said by the Committee to be particularly worthy of our imitation, is compounded of an equally infected representation, and an hereditary Ferdinand. That of France is of the same complexion. Ethics informs us that human nature is guided by self-interest. History proclaims in every page that governments exhibit conclusive proofs of this truth. Is it probable, that in the management of commerce (the best fund for their self-gratifications) the European governments have forgotten themselves, and remembered only the interest of the nation? If not, an inference from what is false, must be defeated by an inference from what is true, and the argument becomes a syllogism. Governments able to do so, uniformly sacrifice the national interest to their own; the European governments possess this ability; therefore they have regulated commerce with a view to advance their own interest, and not the interest of the nation. The recommended imitation is of course perfidious in exhibiting to our view European nations, actuated by national interest, instead of European governments, actuated by an insatiable lust of power and money; and in suggesting that the recommended measures are imitations of the measures of wise nations instead of oppressive governments. If we pursue these measures, whatever may be the western motives, the eastern consequences must be produced. Form is the shadow, but measures are the substance of governments; and by copying the measures of the English government, we adopt its substance. There is none which has co-extensively fostered avarice at the expense of the people, or managed commerce both foreign and domestick more successfully for this end. The Committee endeavour to allure us into this English mode of acquiring happiness, by a splendid picture of the English government; and that government can only compel the people to be as happy as the Committee propose to make us, by a great mercenary army. This wise nation must either be very foolish in compelling the government to force them to be happy by the sword, or this patriotick government must be very tyrannical, in saddling the people with a heavy unnecessary expense. The English nation, besides being awed by an army, is bribed to approve of the measures which constitute the system of their government, by the annual contributions of sixty millions of people in Asia, of vast continental and insular possessions in America, of a large territory in Africa, and of money-yielding possessions in Europe. But rich tributes from the four quarters of the globe, cannot prevent a frightful degree of pauperism, nor reimburse the people for the distresses inflicted upon them by commercial restrictions. The reason is, that these are so contrived as to destroy all the good which commerce could have produced for the mass of the people, by making it merely an instrument for taxing them, and for intercepting all the wealth and tribute it brings in, to convey both into the pockets of the government, and of the exclusively privileged allies it has created. But admitting the tributes of the English territories to be palliations of their system for regulating commerce, why should we be induced to believe their drug sweet without any such saccharine ingredients, when the English people themselves evidently abhor it. They flee to their own fleeced colonies, and even to the United States, less blessed, or less cursed, by commercial restrictions and exclusive privileges, to escape from this policy; the effect of which is, that the labours of above sixty millions of tributaries cannot enable twelve millions of Englishmen, inhabiting the finest island in the world, and unequalled in industry, perseverance, and ingenuity, to subsist comfortably.
Reasoning deduced from mismatching things to be compared, must be eminently erroneous. We ought to chasten the argument by a parallel between things of a similar nature; by comparing governments with governments, and nations with nations. An absence of similitude precludes the possibility of imitation. A free nation is not like an European government, nor an European government like a free nation. The wealth and splendour of a government, is seldom or never the wealth and splendour of a nation. Even our government cannot be likened to the British government, because it has not the foreign possessions, the tributes of which enable the British government to persevere in its system of extravagance, bounties, exclusive privileges, and oppressive taxation. The British nation would yet rebel against this system of their government if they could do so successfully; we may prevent the introduction of the same system into this country without rebellion, if we will. If the Committee are to be understood literally, as advising an imitation of the British nation, they counsel us to abandon a system which that nation would overturn except for mercenary armies. If they speak figuratively, and mean the government when they use the term "nation," they recommend an imitation of the British government by our government. The example of the British government is undoubtedly the best which has ever appeared for extracting money from the people; and commercial restrictions, both upon foreign and domestick commerce, are its most effectual means for accomplishing this object. No equal mode of enriching the party of government, and impoverishing the party of people, has ever been discovered. By classing the objects to be compared correctly, and confronting things of the same nature with each other, we get rid of the confusion produced by mismatching them; and discern that the Committee, as advocates on the side of government, reason soundly in recommending an imitation of the system adopted by the British government; because it must be admitted that no other example can be adduced, by which a government can extract as much money from the people. It would certainly exalt our government up to the British standard, and as certainly humiliate our people far below the British people, because we do not possess the foreign auxiliaries, by which they are hardly able to exist under the system recommended for our imitation.
But the Committee have endeavoured to forestall this argument by asserting "that an overflowing treasury" (the end they have in view) "indicates national prosperity." This is the chorus of all the songs uttered by those who receive such overflowings. But what painter has drawn Liberty as a mogul almost suffocated with money and jewels; or with an overflowing treasury in her lap, and scattering money and exclusive privileges with her hands? Would not a Sciolist have been ashamed of such a picture, and a Reynolds or a West have viewed it with contempt? Upon this egregious political heresy the committee have founded their system. It is a species of political irrigation which exsiccates a nation to overflow a government and exclusive privileges. Louis the fourteenth, when he bribed Charles the second and other princes, had an overflowing treasury; yet the English, with a treasury insufficient to supply the extravagancies of Charles, were happier than the French. The richest treasury in Europe was at that time united with the most miserable people, instead of being an indication of their happiness and prosperity. The Swiss Cantons are remarkable for the poverty of their treasuries, and the happiness of their people. The severity of their climate and sterility of their soil, are both compensated by the frugality of their governments; and two great natural evils are more than countervailed by one political blessing. If a poor country is made happy by this cardinal political virtue, what would be its effects in a rich one? The Committee are fond of comparisons. Let them compare the situation of Switzerland; a rugged country under a severe climate; with that of their neighbours the French and Italians, favoured with fine soils and genial latitudes. All writers unite in declaring that the happiness of the Swiss far exceeds theirs. It exists under governments aristocratical or democratical, because of the absence of those paraphernalia by which rich treasuries are surrounded. Does this comparison prove that we ought to abandon the principles by which a barren country is converted into a paradise, and adopt those by which the finest countries in the world are converted into purgatories for purging men, not of their sins, but of their money? An overflowing treasury in imperial Rome, impoverished the provinces, fed an aristocracy, corrupted the empire, and enslaved the fairest portion of the earth. That of the great Mogul, starved the people, enriched privileged orders, was a prize for Persia, and finally for England. Russia is a country of a soil and climate resembling Switzerland, associated with a rich treasury; and the government is a tyranny. The whole world proves that there is no fellowship between overflowing treasuries and the happiness of the people; and that there is an invariable concurrency between such treasuries and their oppression. They are the strongest evidence in a civilized nation of a tyrannical government. But need we travel abroad in search of this evidence? Have we not at home a proof that national distress grows so inevitably with the growth of treasuries, as to render even peace and plenty unable to withstand their blighting effects? Our short financial history faithfully recorded by the Committee, leads us from treasuries of republican frugality, to those of aristocratical opulence. If the great annual amount now drawn from the people by our governments and exclusive privileges, does not constitute an overflowing treasury, what sum of money will deserve that appellation? Have we experienced a concurrency between the happiness of the people and an overflowing treasury? The Committee have informed us that it does not exist in our case, and yet they advise us more ardently to pursue this heretical phantom. No, it is not a phantom: it is a real political Colossus, erected to overshadow and reduce to dwarfs, the comforts of the people, and the people themselves. Is not the confederation of European kings or governments, a treasonable plot against the happiness of nations? Is it not the essence of this plot to obtain overflowing treasuries, and to foster exclusive privileges, for the special purpose of sustaining the oppressions of governments? Would not our adoption of the same policy, be a tacit accession to this nefarious conspiracy? If our republican party, consumed by the rays of power, has died a natural death, may we not still hope that a new phenix will arise from its ashes, and again excite the admiration of the world by the beautiful plumage of frugality and equal laws, for increasing individual happiness; instead of towering above the people, in the European turban composed of exclusive privileges, extravagance, oppressive taxation, and an overflowing treasury.
The Committee say, "that in every other nation agriculture, manufactures and commerce, have been deemed intimately connected, but in ours there is said to exist an hostility between them." To remove an evil, we must previously discover how it has been produced. Enmities among men are produced by a clashing of interests, and the intention of republican governments is not to promote, but to prevent this clashing, by a just and equal distribution of civil or legal rights. If artificial enmities are superadded to natural, their true intention is defeated; and the very evil is aggravated, they are intended to correct. Such is the policy which has arrayed class against class in Europe, and marshaled all its nations into domestic combinations, envenomed against each other by an ardour to get or to keep the patronage of their governments. These patrons make their clients pay the enormous fees they covet. As no government can patronize one class but at the expense of others, partialities to its clients beget mutual fears, hopes, and hatreds, and bring grist to those who grind them for toll. Even brothers, whom nature makes friends, are converted into enemies by parental partialities. Will the partialities of a government between different classes promote the harmony and happiness of society? Is not their discord the universal consequence of the fraudulent power assumed by governments, of allotting to classes and individuals indigence or wealth, according to their own pleasure? Has not the English parliament been fatigued for centuries with eternal petitions, remonstrances, and lamentations from the artificial combinations it has created, or the natural classes it has favoured or oppressed, soliciting partialities, and deploring their pernicious effects? Does not the English press at this time, teem with complaints by the manufacturers, of the corn laws? What has produced our existing enmities? Are our agricultural, manufacturing, and commercial enmities; our slave-holding and non slaveholding enmity; our banking and anti-banking enmity; our pension and bounty enmity; the enmity between frugality and extravagance; and our Federal and State enmities, natural or artificial? Do they not all proceed from an imitation of the European policy deduced from the claim of a sovereign or despotic power in governments to distribute exclusive privileges, local partialities and private property, by their own absolute will and supremacy? What then is the remedy for these crying evils? To remove or to increase their cause. The policy by which they are produced, caused for ages religious as well as civil enmities. A patronage of religious classes is yet attended in other countries with mutual hatred. Here, the removal of the cause, is proved to be the best remedy for the evil. If civil enmities, like religious, have every where attended legal partialities, the remedy is before our eyes. It is in vain to preach conciliation, if a policy, which inevitably begets division and hatred is adhered to. The justice of leaving wealth to be distributed by industry, is a sound sponsor for social harmony; whilst the injustice of compelling one class to work for another, as naturally excites rapacity and indignation, and is equally a sponsor for hostility.
The Committee inform us "that the true economy of individuals, is to earn more than they expend, yet this is said to be bad policy for a nation." The first assertion is universally known to be true; but the second is gratuitously and unfairly attributed to their adversaries, to discredit the very principle by which only the first assertion can be realized, namely, that industry should be free to save as well as to earn. Yet the two assertions combined are not devoid of edification. To get more than we spend is undoubtedly a thrifty maxim, applicable to governments and classes, as well as to nations and individuals. The Committee have illustrated its truth, by stating that the Federal government has received a very large sum of money, but that by expending more, it is reduced to the necessity of borrowing. True economy, say the Committee, consists in spending less than we get; and in lieu of this true economy, they recommend a project for making the treasury overflow by internal taxation. Yet overflowings of treasuries will increase public expenditures and taxation. Compare then the thrifty maxim applauded by the Committee, with their conclusion, and consider whether it will confirm or refute it. The government has spent more than it received; the maxim recommends an expenditure of less; and from these facts the Committee have extracted their policy for making the treasury richer, the expenditures of the government greater, the agricultural class which chiefly supplies these expenditures, poorer; and for enabling the capitalist class, which supplies none of these expenditures, to milk all other classes, which milk they sell, but never give to governments. Apply the maxim to classes. The Committee endeavour to persuade the agricultural class, that it is false as to that class, by asserting that it will be impoverished by buying cheap, and of course expending less; and that it will be enriched by buying dear, and of course expending more. There would be wonderful ingenuity in convincing both the spendthrift, and the receiver of the spoil, that the first lost nothing, and the second gained nothing. Yet the Committee have undertaken to perform both these exploits, by endeavouring to prove that the agricultural class, far from losing any thing, will be a gainer; and that the capitalist class, far from gaining any thing, must in the end sell cheaper than foreigners, and also buy dearer of the agricultural class. But, however strong the arguments of the Committee may be to prove both of these assertions, the capitalists obstinately persist in disbelieving them, and fatuitously contend for a bounty, designed only as a bait for the snare intended to overwhelm them with the double ruin of selling cheap and buying dear. The Committee have been more successful with the agricultural class than with these calculating gentlemen. A spendthrift is more convincible than one of your thrifty cautious people. If his character is compounded of vanity, ignorance, and generosity, he is exposed to flattery, cunning, and ambiguity; and the liberality of his mind is only frozen by the poverty resulting from his indiscretion. A portion of the agricultural class have credited the prophecy of a future cheapness of manufactures, and a future dearness of eatables, to be produced by violating the very maxim of thrift; whilst the capitalists unanimously disbelieve it, and eagerly prefer a bird in the hand. As to the mercantile, sea-faring, and professional classes, they have no products to carry to the visionary markets so alluring to some of the agriculturists; and being weak and defenceless, not even a prospective bonus is offered to them. The mechanical class, as I shall hereafter show, is treated still worse: only that class, strong enough to do itself justice, is complimented with being deceived. The temptation held out to the government and its satellites is proportioned to the power and perspicacity of this formidable class. More taxes, an overflowing treasury, and of course more power, to be immediately received, is offered to this class. The agricultural class is told — "you are rich, liberal, worthy, honest fellows, almost noblemen; assent to our project suggested by a great Italian artist, who either taught governments to oppress mankind, or mankind to detect the stratagems of ambition and avarice. Generous as you are, will you refuse to create a family of capitalists for the national good, by only paying double prices for your dainties and necessaries, when you will be reimbursed profusely by the pleasures of the imagination?" The argument addressed to the capitalists is short and solid. "You are to pay nothing for our project. It will double the price of your wares." And they vociferate for it. That addressed to the government is the strongest of all, "our project will beget an overflowing treasury." In this auction affair, the mercantile, mechanical, professional, and sea-faring classes are offered nothing at all, though they may remain in the vendue office, work as hard as they can, run about with errands, or make voyages in ballast.
The Committee endeavour to hide the effects of their policy to classes and individuals, by kneading up all of them into one mass called a nation; and assuming it for a truth, that the chymist Self-Interest cannot divide it into parts. Having created this imaginary one and indivisible being, more valuable and wonderful than the philosopher's stone, they conclude that its interest must also be one and indivisible. But as this being needs a head, without which the hands and feet would not know what to do, the Committee have made one for it, of the Federal government. The members of their political being, are supposed, like those of the human body, to have no brains; and the head of course can only know what is best for them. Could they have come up to the perfection of the model; could they have constructed a head, unable to hurt a member without hurting itself; to swell itself into a hydrocephalus, burdensome to the body; or to fatten some of its members by impoverishing others; the analogical argument might have been applicable to their imaginary political being. But until they can do this, a political head, able to advance its own power, to feed its own avarice, and to buy partizans with the property of individuals; will never resemble the heads which providence has been pleased to place on our shoulders. Why did God give brains to natural heads, if man could make a political head, better fitted to discern what will contribute to individual happiness? If a political head is better adapted for the attainment of this object, then the divine beneficence, instead of being the first of blessings, has only inflicted upon us the regret of having received a natural capacity to pursue our own good, which we are prevented from using by the interposition of political power. But, unfortunately for this policy, the artificial head must be composed of natural heads, which will retain the impressions with which they were born. They are impelled by the same self-love implanted in other heads, to pursue their own interest; and if they are invested with a power of controlling the capacity of other heads to do the same, they universally exert it for selfish ends. Slavery, either personal or political, consists only in the powers of some natural heads to dictate to others. Political liberty consists only in a government constituted to preserve, and not to defeat the natural capacity of providing for our own good. The States and the people, in constituting the Federal government, intended to reserve the use of their own heads. The States never designed to subject themselves to be partially taxed by the brains of other States; nor the people to surrender their own heads to the use of those which manage exclusive privileges.
The Committee contend that a transfer of the rights and capacities of natural heads to privileged heads, is the best mode of enforcing that true economy, by which only individuals can flourish. Individual saving is admitted to be the only true political economy. Nothing else can produce national wealth or capital, nor generally enrich individuals. A political economy which takes away individual savings by exclusive privileges, might have been exemplified, could Nero have killed his mother by the hands of mercenaries before he was born. The comparison between individual and national economy is no sooner used, and the assertion that saving constitutes the former, than the doctrine is proposed to be violated. How can an individual save by being obliged to buy dear and sell cheap? Thus compelled, he ceases to be a model for any species of national economy, unless its object is to buy dear, and sell cheap also. In one view only will the comparison apply to the project of the Committee. Individuals are compelled to buy dear of capitalists, and to sell cheap to foreign nations, in consequence of prohibiting exchanges; and thus individual and national economy are placed nearly on the same ground. The Committee however imagine, that the destruction of individual economy will beget national economy. This would be a rare anomaly indeed. But it is to be effected, say the Committee, by means of internal taxation, an overflowing treasury, and buying what we want at double prices, until we bribe capitalists to sell cheap and to buy agricultural products dear. The evils of going to war with the true principles of economy, are only proposed to last, until these speculations shall succeed; for the design is not to establish false principles of economy permanently, but only to use them until they shall beget true principles. It is only intended to extract national thrift from individual unthrift. But it is clear to my understanding, that this cannot be effected in any mode whatsoever; though it is quite easy to extract the thrift of exclusive privileges, from the unthrift of individuals.
A balance of trade is the chimerical price offered us for individual and national prosperity; those indissoluble twins, born only of individual industry. This balance itself is of the self-same parentage. In a competition for it between two nations, in one of which industry is invigorated by the freedom of buying as cheap, and selling as dear as she can; and, in the other, compelled to buy dear and to feed exclusive privileges; which competitor would gain the victory?
But it is supposed that practice in this case is at war with theory. The Committee say,
that our exports have not increased in proportion to our population, cotton excepted, which affords little or no profit to sixteen States, and furnishes no market for other productions. That our currency has been reduced in three years from $110,000,000 to $45,000,000. That no calamity has visited the country, and yet in the last five years of exuberant plenty, our fat kine has become lean. And that the causes of this distress cannot be in the people, and must be in the government.
Neither theory nor practice disclosed these supposed symptoms of disagreement between the freedom of industry and national prosperity, for many years after we became independent; but now our exports, in proportion to population, have diminished, as taxes, exclusive privileges, and bounties have increased; or as the profits of industry applicable to its own use or consumption, have been curtailed; and yet the very causes of the deprecated consequences, are proposed to be aggravated. The first period of our political existence, was but little infected by taxation, exclusive privileges, and bounties, and the present has to struggle with a host of these machines. The first dispensed prosperity during many years of fluctuating fruitfulness; and the second, distress, during the last five years of exuberant plenty. Under the theory of leaving to industry as great a share of its profits as possible, practically enforced, the nation was prosperous; as this theory has been gradually violated, national distress has increased. But it is supposed that theory and practice, though they have travelled so many years together, have at length quarreled; and that the facts stated in the quotation are sufficient to prove it. On the contrary, these facts seem to me incontestably to establish the indissoluble connexions both between the freedom of industry and national prosperity; and also between national distress and protecting duties, bounties, exclusive privileges, and heavy taxation. Our former policy produced national happiness; the present produces national misery. Is it merely accidental that these two pair of yokefellows have drawn so exactly together? The Committee suppose that they have been mismatched, though they have worked in conjunction, and that industry will work better harnessed with more protecting duties, bounties, exclusive privileges, and taxes, than when she was not impeded by such trammels. But, aware of the consequence of a fair combat between speculation and fact, they expunge the existing protecting duties, bounties, exclusive privileges, and heavy taxes, from the history of our existing distress; and, as ingeniously, ascribe all the benefits produced by the freedom of industry to use its own earnings for many years, to occasional wars between foreign nations. Thus they contrive to strip the question, both of the prosperity attending the first policy, and also of the distress which followed the second. By this management, the system which produced our prosperity is artfully put out of view, and also that which has produced our distresses; and to prevent a comparison between them, by the unerring evidence of their respective effects, a comparison is drawn between war and peace, for the purpose of ascribing all the good effects of the first policy, to a war between foreign nations; and all the bad effects of that by which the first has been superseded, to the want of such a war. The result of this comparison, as admitted by the Committee, destroys their own argument. It is, that the existing policy, even when aided by peace and plenty, produces national distress. Our former policy is admitted to have been well calculated for producing national prosperity in time of war; our existing policy, for producing national distress in peace and plenty. One was then good for something, and the other worse than good for nothing, as it is not adapted for reaping advantages from foreign wars, and reaps distress from domestic peace and plenty. By getting rid, both of the merits of one and the vices of the other, and exhibiting both as virgin projects, which have hitherto produced no effects; since the effects of both are ascribed to foreign wars, or the absence of foreign wars; the Committee endeavour to free the question from the gripe of experience, and to bind it by the gossamer fibres of the imagination, and thus ingeniously avail themselves of our bias for the newly invented mode of construing constitutions; so pliant as to resist nothing, and yet so elastic, as to bound over all the restrictions of common sense. By such fanciful reasoning any facts, the freedom of industry, and local State rights, are all exposed to be manufactured into gratifications for avarice and ambition.
But the Committee would have disclosed still more ingenuity, had they suppressed more facts, and advanced fewer opinions. In also ascribing our distresses to a diminution of bank currency, and urging it as an evidence of bad policy, they ought to have foreseen that the history of this fact was understood by the nation. We know that the plethora of bank currency was caused by the expenses of the last war, and by the influence of the banking bubble to awaken fraudulent speculations; and not by manufactures. Public expenditures and knavish designs united to produce it, and this plethora, urged by the Committee as a proof of national prosperity, was in fact one cause of national and individual distress. It tempted governments to launch into an ocean of extravagance, and individuals into an ocean of speculation, from a fraudulent hope of an increased depreciation. It produced a great number of bubbles, under the denomination of internal improvements, having the effect of enriching projectors and undertakers, and impoverishing the people. The bursting of the banking tumor left behind the sores of public extravagance, foolish public contracts, excessive taxation, and great private debts; all of which it had generated; and these are proposed to be cured, by letting them run on, and promoting a gangrene, by the new bubble of granting an enormous bounty to another set of undertakers, called capitalists. The Committee say, "if the debts of the country were deducted from the value of property, the nation is poorer than in 1790." What has caused these debts? Banking, borrowing, taxing, and protecting duties. They united to increase expenses and mortgage property. Why have the Committee, in deploring our debts, concealed their origin?
During the revolutionary war, we experienced the effects of an abundant currency, united with exclusive internal manufactures. Necessity compelled us to push both to the utmost extent, and a general loathing of both experiments, induced us to resort to political frugality and a freedom of industry, and not to commercial restrictions, in search of a remedy for the national distress they had combined to produce. It was found in these principles, and was so sudden in its efficacy, that the public distresses speedily passed away like a dream. Another redundancy of paper currency, and another necessity to manufacture for ourselves, have combined to produce another state of national and individual distress, so severe as to render "our fat kine lean," but we do not resort to the policy which worked so well in peace and plenty, after the first event of the same character; and the distress continues for want of those remedies, then so successful. The Committee say, "that the causes of this distress cannot be in the people, and must be in the government." To remove the first distress, our governments used commerce, free industry, and frugality; and it was removed. Under the second, they adhere to commercial restrictions, exclusive privileges, and extravagance; and the distress continues. They admit the distress to have originated in the government and not in the people, "without either having been visited by any calamity"; but leave us to imagine the rare, if not the solitary, case in a time of peace and plenty, that it has not been caused by misdeeds, but by no deeds on the part of the government. It is utterly inconceivable how this taciturnity, this let-us-alone policy, could have so completely destroyed the usual effects of peace and plenty; but as the fact is, that our governments have been extremely loquacious in transferring its fruits from industry to idleness, there is no difficulty in discovering how they are lost. The system of commercial restrictions, bounties to bubbles, exclusive privileges, and excessive taxation, comprises the operative misdeeds which have caused the national distress, and solved the enigma, that plenty and distress are united. If the solution is true, the assertion of the Committee, so far as it supposes that the public distress has been produced by the neglect of deeds, is unfounded; and only correct in ascribing it, not to the people, but to the government.
In the same operating system, we find the cause of the decrease of our exports in proportion to population. Industry is discouraged, both by the internal spoliations inflicted upon it by governments, and also by impairing the resource of a free commerce for alleviating its losses. It is deprived of the enhanced prices produced by exchanges for imported products, and of its best customers by driving them into rival markets. It is made heartless by being subjected to the mercy of monopolists at home, and by being told that its chance for getting out of their clutch is only "a forlorn hope."
In order to discredit the national benefits arising from the great increase in the exportation of cotton, the Committee have unwarily developed their principles, and displayed their design. "Cotton," say they, "affords little or no profit to sixteen States, and furnishes no market to their productions." And what is the inference? That cotton agriculturists shall be made by law to furnish a profit to other States, and be forced to become a market for monopolies. Thus the object of making some States tributary to others is confessed; and the factory markets so dazzling to some agriculturists, turn out to be an agricultural market for capitalists, in which they will have the exclusive power of regulating prices, or weights and measures. As the protecting duty system is designed to make agricultural States profitable to capitalist factories, it must of course make all agricultural individuals, wherever situated, profitable also to them. How can this avowed object be reconciled with the pretence, that this system will be profitable to agriculturists? Can States and individuals both pay a tribute to factory monopolists, and also exact from them a greater tribute? Does not profit and loss require two parties? Thus the acknowledged intention of the protecting-duty system, is simply that of every legal fraud, however disguised, namely, to make some individuals profitable to others; and strictly accords with the tyrannical policy of making nations as profitable as possible to governments.
But the assertion of the Committee, "that cotton affords little or no profit to sixteen States, and furnishes no market for other productions," is so egregiously erroneous, that it could only have been hazarded to induce these sixteen States, to feel no sympathy for the cotton States. Supposing it to be true, it is the strongest argument imaginable, against the power and the justice of a legislation by these sixteen States, to settle a scale of internal profits to operate between the States. They constitute a majority in Congress; and are addressed by two arguments as little likely to make them legislate fairly and honestly, as can be imagined. One, that they derive no profit from the prosperity of the cotton States, whilst their industry is free; the other, that they may draw a profit from them by the factory monopoly. The assertion, however, is adverse to the known effect of the division of labour, to beget mutual markets. By creating additional skill and facility, it vastly increases necessaries, comforts, and luxuries; the exchange of which is the basis of political economy, and the sower of civilized societies. It would be superfluous to cite proofs of a fact, seen everywhere, except among savages. Will Alabama want nothing but cotton, should that State select this species of labour for its staple? Can she eat, drink, and ride her cotton? Can she manufacture it into tools, cheese, fish, rum, wine, sugar, and tea? Would it be beneficial to her to destroy the principle which produces perfection and success, by distracting her occupations? Do either the principles which recommend a division of labour, or soils, or climates, or habits, suggest the policy of making each State a jack of all trades? Is not Georgia a market for manufactures, and Rhode-Island a market for cotton, in consequence of the division of labour? If this division is highly beneficial to mankind throughout the civilized world, ought it to be impaired by making one species of labour tributary to another? In fact the profits arising from the extraordinary skill and industry of some States in raising cotton, are diffused through the States; but if such was not the case, it would not furnish an argument of more weight to justify the policy of making those States tributary to factories, than might be urged by sugar boilers to prove that the raisers of maple sugar ought to be tributary to them. The policy of making some divisions of labour tributary to others, after they have been adopted by States or individuals, is both fraudulent on account of the loss occasioned by a change of occupations; and also opens an endless field of contention and animosity.
The division of agricultural labours is visibly imposed by nature to diffuse and equalize her blessings. Seas and rivers transfuse them throughout the world, and the geography of the United States is particularly impressed with characters for that purpose. Look at the Mississippi and its waters. Do we not read in this spacious map "here are to be mutual markets?" Are not such markets already established? The cotton country purchases horses, meat, and flour of the upper States, and these receive returns in comforts which they cannot raise. Can it be for the interest of these upper States, composing I suppose a portion of the sixteen said to derive no profit from cotton, to tax the cotton agriculturists to enrich capitalist factories, and thereby impair the markets provided by nature for themselves? If the cotton States suffer a diminution of profit, it will correspondently diminish the market of the upper States; and the evil will in some degree reach every State embraced by the waters of the Mississippi, as a punishment for their having endeavoured to make a better scheme for themselves, than that formed by the Creator of the universe.
As the Mississippi States are markets for and profitable to each other, so are the Atlantick. In the latter, also, a division of labour begets mutual markets, and mutual benefits resulting from that happy principle. South-Carolina and Georgia are markets for northern corn, flour, and manufactures; and the northern States are markets for rice and cotton. The eastern States are markets for the live stock of the western. It has been more beneficial to them to raise cotton, tobacco, and bread stuff, than live stock; but as these occupations are rendered less profitable by commercial restrictions and factory monopolies, the loss will re-act upon the western States, by diminishing the capital applicable to this species of internal commerce, and compelling the eastern to raise articles, which they would otherwise buy. The division of labour, if left free, invigorates industry, increases skill, and diffuses general benefits. No State can be benefited by impairing this principle. A monopoly established to transfer the profits of labour from south to north, is a precedent for transferring such profits from the upper to the lower States on the Mississippi. In both cases the monopoly would be bestowed on rich capitalists, and be paid by poor industry. But it would not be so generally injurious to the whole Union, as the Atlantick monopoly at this time, because the effects of the latter spread far wider.
"That free local occupations dictated by climates and soils, destroy markets and mutual profits" — said by capitalists to be both false and true, for a purpose not impenetrable; is the assertion, by which we are desired to be convinced of the wisdom and justice of giving an enormous bounty to these rich gentlemen. The free exchanges of local products with foreign nations, will not produce mutual profit or benefit to the exchangers of property, and therefore the principle, in that case, is false; but the free exchanges of local products between united States will produce mutual profit or benefit, and therefore the principle is true. But it is perfectly obvious that the profit or benefit, in both cases, arises from exclusive local facilities in the production of articles to be exchanged, and therefore that the principle must be true in both cases or in neither. It is admitted to be true in the latter by the profession of the protecting policy, that it intends ultimately to restore the principle of free exchanges, and only to destroy its effects at present. As to foreign nations it endeavours to get over the truth, as to the effects of free exchanges, by the fact, that they have by their laws obstructed the free exchanges by which this happy principle is able to diffuse the most mutual profit or benefit; and yet it proposes to create greater obstructions of the same character, by domestick laws, more capable of execution, liable to fewer checks, and operating more oppressively. Let us suppose that sixteen States shall be convinced by the Committee, that they derive no benefit or profit from the cotton States, and that they possess the power of getting from them as much of both as they please. What can be a greater degree of tyranny to the cotton States? Will it not cost them more to feed the avarice of sixteen States, than that of an individual tyrant? Has the tyranny of republics over provinces or districts, which they could make subservient to their own avarice, been uniformly more or less than the tyranny of single despots? Did not the tyranny of republican Rome, in pilfering the provinces, drive the people into the arms of a military chief. With equal truth or falsehood it may also be said, that sixteen States derive no profit or benefit from raising tobacco or rice, or from prosecuting the fishery by other States, and this majority in Congress have also the power of making these, and many other local employments, subservient to their avarice. Thus a general hostility would be created among all the local divisions of labour; and their capacity to diffuse mutual profit and comfort, would be defeated. But if this policy is wise and just, as applicable to each natural division of labour, because hardly one covers a majority of the people, it is still more forcible when applied to the artificial divisions of labour. These are more personal and local, than the former. They do not supply objects of consumption more necessary nor more universal than their comrades. Each of the artificial occupations embrace only a minority in every State. Supposing that cotton planters and other cultivators of local products, ought by law to be made profitable to a majority of States, ought not the capitalists to be made profitable to a majority of the people according to the same principle? Is it not infinitely more grossly violated by making these cotton planters profitable to an inconsiderable number of capitalists, than it would be by leaving them at liberty to make the most of their product by a freedom of exchange. Capitalists are undoubtedly more local, and will be guided by an interest more exclusive, than that national interest subservient to the natural divisions of labour. How then can the general good be advanced by sacrificing the interest of this vast majority to the purpose of enriching a very small minority; by inflicting a deep wound upon all the natural divisions of labour, for the purpose of bestowing a monopoly, operating upon and impoverishing the whole of them, to create a local and exclusive class of capitalists? Such a policy is equally unfavourable to the invigorating and perfecting principle of a division of labour, whether that division is natural or artificial; and if its violation will produce evil in one case, it must do so in the other. But a trespass upon the right of free exchange, belonging to natural divisions of labour, is more pernicious to the common good, than a trespass upon the same right belonging to artificial divisions of labour, because it makes more victims. The question is, Which will produce most general good? The enjoyment of this right by all divisions of labour, natural or artificial; or the subjection of all the rest to the avarice of one, the capitalists, if theirs may be considered as a laborious occupation. Recollect, reader, that republics can be avaricious, and then seriously consider the doctrine, that sixteen of these republics have a right, under the federal constitution, to make a few other republics subservient to their own profit. What power can be more tyrannical? Where are its limits? Under it, will any minority of States be free republics, or provinces dependent on a combination of sixteen.
Let us advert to the nature of currency, in order to discern, how it is subservient to the mutual benefits diffused by a division of labour, and how it is made to destroy these benefits. It possesses two generick capacities; those of exchanging, and transferring, property. Under the first is comprised the intercourse between individuals; under the second, all payments made without receiving an equivalent in property, invariably computed in exchanges. If an individual sells his land to another, though he receives currency, he receives in fact an equivalent for his land in other property which the currency represents. But, when an individual pays money or currency to a government or to exclusive privileges, that portion of his property which the currency represents, is transferred without his receiving any equivalent in other property, and is to him an actual loss. In such payments for the support of a free government, he obtains an equivalent in social security, but not in property; and even these expenditures, though highly beneficial to him, constitute a loss of property, sustained for the preservation of the residue. But when such payments are extorted to feed either an oppressive government or exclusive privileges, they degenerate into actual tyranny, and individuals receive no equivalent either in property or in liberty. Government has been called an evil, because it requires a transfer of property; but it only becomes a tyranny by aggravating this evil without necessity.
As its degeneracy advances, more currency is required for the purpose of transferring more property from one individual to another, because in this operation it acts only periodically; annually, only for the most part in the case of governments, between the gainer and the loser of property; but more frequently, in the cases of the property, it transfers to exclusive privileges, so as to aggravate the deprivation. One portion of currency is employed in exercising its capacity of transferring property, and another in exercising its capacity of exchanging it. But as the latter portion passes with infinitely more rapidity from hand to hand in performing its occupation than the former, there is no need of an exuberant quantity of currency to fulfil this salutary end; nor can this pernicious exuberance long exist, because it must be limited by the extent of exchanges; by which the value of currency in circulation will either be raised by appreciation, or brought down by depreciation, to a level with the demand for carrying on exchanges, so as to correct the evils both of a deficiency or redundancy. Far different is the character of money or currency employed for the purpose of transferring property. Its quantity must be increased, as this occupation is increased; nor is it liable to the salutary restriction interwoven with its capacity of exchanging property, because these artificial transfers of it are subject to no limitation, so long as the people have any thing to lose. It is true that these occupations, though perfectly distinct, appear to run into each other, because currency, like Araspes the Persian, has two souls.
Its capacity to exchange property is its good soul, and its capacity to transfer property, its bad one. When its good soul prevails, it dispenses justice; under the influence of its bad one, it becomes a violator of each man's spouse, private property. Will Congress be less magnanimous than a Cyrus? Will it encourage the adulterous or the chaste soul of currency?
Even the money paid to the officers of government is a transfer of property, either transitory or permanent. So much as is used by the receiver for his current subsistence, is transitory as to himself; but the payer receives no equivalent in other property; and so much as augments the wealth of the receiver, is as permanently transferred as property can be. If a robber seizes the money of an individual, the loser receives but a poor equivalent for his loss, because the robber throws it into circulation, either in procuring subsistence, or by purchasing an estate. In like manner money paid to officers of government and to exclusive privileges is a transfer of property, having the same effects. In the case of exclusive privileges the similitude is exact, but not in the case of the officers of government, so far as exactions for their compensation are necessary for social order, of which the security of property constitutes an essential article. In this case also the similitude becomes exact, whenever these exactions exceed the legitimate object of sustaining a free government, and are gradually introducing an oppressive one. In fact, out of this distinction between the good and evil capacities of money, flow most or all of the phrases used to convey an idea, either of a good or a tyrannical government.
It is the identical distinction which constitutes the contrast between our own and the European governments, and if it is lost, I should be glad to learn what will be the real value of a mere theoretical remnant. The distress of England at this juncture is at least equal to ours. It provokes a much greater degree of national disquietude. The distress of Ireland far exceeds ours. This foreign distress has not found a remedy in manufactures and exclusive privileges. To obtain it by the same policy, we must therefore push it further than the English have done. As the cause of the evils under which England and Ireland are groaning, cannot lie in a want of the advocated policy, it is only to be found in its existence. It undoubtedly lies in the encouragement given by the government to the bad soul of money. Its wicked capacity of transferring property is patronized by a multitude of laws, for enriching the officers of government, privileged combinations, projectors, pensioners, and sinecures, beyond the limits prescribed by social considerations. Thus the effects of the good soul of money are nearly suffocated, and the predominance of its bad soul dispenses the mischiefs to be expected from an evil spirit.
If we cannot ascertain the extent in which we have cultivated the capacity of currency to transfer property, because it is impossible to discover how much has been transferred by its depreciation, we can yet compute it with considerable accuracy, so far as this capacity is exercised by taxation, State and Federal, by dividends paid to bankers, and by bounties paid to capitalists. These united cannot amount to less than sixty millions of dollars annually, and as this enormous sum of money transfers every year the property it represents, we need not wander any further in search of a cause for the public distress. As it represents and transfers twice, or perhaps thrice, as much property as it did a few years past, the distress which has awakened the compassion of the Committee, was unavoidable; but they propose to alleviate it by pushing still further the policy of transferring property. They say we have but forty-five millions of currency. If such be the fact, what must be the consequences of laws compelling these forty-five millions to transfer, annually, sixty millions worth of property, and also to perform the whole business of facilitating exchanges. The first duty being imperative, in its present magnitude, must chiefly employ the supposed quantity of currency, and leave but little of it to be employed in the second; so that the great increase in the efficacy of money or currency to transfer property, unites with the insufficiency of the amount applicable to facilitating exchanges, brought about by the enormous sum absorbed in its pernicious employment, to produce the present state of things.
A permanent increase of currency can only be effected by employment for it in exchanging or transferring property, but its increase for one or the other object, produces very different consequences to a nation. When currency is increased by a demand for it to facilitate exchanges, it indicates national prosperity; but when it is increased for the purpose of transferring property, it is an infallible proof of fraud and oppression. The operations of currency in exchanging and transferring property are so interwoven, that it is easy to delude the people into an opinion, that the former and not the latter design is at the bottom of its legal augmentation; and debtors are bribed by a hope of depreciation, to mortgage the remnant of their property, with themselves and their posterity, to the property-transferring policy. When currency is increased, as in the case of banking, for the primary object of transferring property, a temporary depreciation ensues, which robs once by this means, and again by appreciation. Upon either alternation, however frequently they occur, injustice is perpetrated. But the effect of either between individuals is moderate and shortlived, because the demand of currency to be employed in exchanges will regulate its value; and in making such exchanges it will be computed by its representative relation to property. An increase of currency, for the purpose of transferring property, contains no such internal remedy against the evils of excess. Governments and exclusive privileges increase their exactions at least comparatively, and usually take care that their compensations shall exceed a temporary depreciation. When it ceases, or appreciation happens, the transfer of property from the people to themselves, commenced by increasing currency under the pretext of facilitating exchanges, is aggravated without any new law; and the numerical acquisitions are doubled or trebled in value, merely by saying nothing. When wheat was worth two dollars a bushel, sixty millions of dollars would transfer property equal to thirty millions of bushels of wheat; but when wheat is reduced to one third of that price, the same sixty millions transfers property equal to one hundred and eighty millions of bushels. Is this chasm so wide and deep, that the national distress cannot be discerned in its bottom?
The disciples of the capacity of currency for transferring property, are more ardent and skilful than those who are contented with its utility in exchanging it, because the cultivation of that capacity is their trade, in which they become perfect by practice; and because mankind have ever thought it very pleasant to get rich without industry. Hence a school appears in every country for teaching nations that taxation, stocks, and exclusive privileges, are the best guardians of their prosperity. This school is perpetually lecturing us in the newspapers and in pamphlets, with a success demonstrated in the present state of things, obtained by confounding the very different capacities of money to transfer and to exchange property; and by considering its abundance, whether created for either purpose, as equally an evidence of national prosperity. Thus it has deluded us into the error of coveting the abundance, without considering in which of its capacities it will operate. Yet in every instance, when a plentiful paper currency has been created for the purpose of transferring property, or has produced that effect, though created from considerations both honest and patriotick, evils in no degree dubious have been identified with it. The abundance of paper currency in England, far from being a dispenser of individual happiness, is a severe oppressor, because it is chiefly employed in transferring property. The abundance of our revolutionary currency, though created by patriotism, produced great distress, in its effect of transferring property. The late abundance of our bank currency caused great distress by transferring property. In all these cases we see clearly, that national distress uniformly occurs in proportion as property has been transferred. Yet the Committee propose to remove the existing national distress, proceeding from the enormous amount of property now annually transferred, by transferring still more property to capitalists, by producing an artificial demand for more currency to work in its transferring character, by increasing taxation, and by diminishing the business of its exchanging character, in excluding the importation of foreign commodities to a great extent. Suppose the importation of foreign commodities should be quite prohibited, that our revenue should be doubled, that our bounties, exclusive privileges, and public expenses should be also doubled, and that our currency should be increased up to a complete sufficiency for transferring an hundred and twenty millions worth of property annually; would this policy be an index of national prosperity, or recover the happiness of individuals? I cannot discern upon what principle the Committee have founded their computation as to the amount of our currency, nor even what they mean by the term; and yet accuracy in both respects is indispensable, before we can draw any correct conclusion from this amount. If they mean by the term "currency," bank paper only, it is hardly possible that they could have obtained credible returns of its amount from all these institutions, unsubjected to compulsion, and influenced to secrecy by the strongest motives; and it would be equally incredible, that only forty-five millions of currency could perform the business of transferring annually sixty millions of property, and also of discharging so much of the business of facilitating exchanges, as our commercial restrictions have left for it. If they understand by the term "currency," bank paper, metallick money, funded stock, and incorporated stock, all of which possess the capacities both of transferring and exchanging property, their computation is widely erroneous. If these capacities constitute currency, that of the United States is enormously redundant at this time, for the employment of exchanging property. It consists of funded stock for old debts and new loans, of the stock of the whole family of banks, of the stock of many other corporations, of all the specie in the country, and of all the bank notes in circulation. If at some antecedent juncture a larger amount of bank notes was in circulation, it was not associated with any thing like so large an amount of stock and specie as at present. We ought to estimate every species of circulating currency capable of transferring or exchanging property, to procure a sound foundation for an argument extracted from that source; and as these stocks possess such qualities, and are transferable for such purposes, our computation would be erroneous, should they be excluded. In the case of banks, their stock or shares constitute a portion of the circulating medium, as well as their notes; and perhaps we should not deviate far from the truth, by doubling their stock, to come at the total of banking currency, made up of the items of stock and notes.
These items would, undoubtedly, far exceed one hundred millions of currency; funded stock, State and Federal, considerably exceeds another hundred millions; and the metallick currency in the country may be, probably, estimated at thirty millions. Our astonishment excited by the idea that we have only forty-five millions of currency, to transfer annually sixty millions of property, and also to perform the whole business of exchanges, now ceases; and we also discover, that an abundance of currency, far from being an evidence of national prosperity, may be the identical cause of national distress. Two hundred of our existing two hundred and thirty millions of currency, have been created or are calculated for the very purpose of transferring property; and, though this capital also performs some share of the business of exchanging it, yet this association of the good capacity of currency with its bad one, alleged as a proof of merit, is only a cloak of fraud. Under the pretext of facilitating exchanges, the bad capacity of currency has obtained the profits of labour to a ruinous amount. The metallick currency is incarcerated, to create a necessity for a transferring currency; and extravagance and borrowing is used to increase its quantity, to carry our lands and goods to capitalists. The more of these which are intended to be transferred, the more of the transferring currency becomes necessary to facilitate the conveyance; and it has at length grown up into a monster which eats faster than five successive years of uncommon fruitfulness could furnish food; and so impoverishing, that we must either direct against him the thunderbolt of common sense, or submit to his ravages in despair. If it was true, that this monster had diminished down to the weight of forty-five millions, there might be some hope of his becoming extinct; but, as the fact is that he has already exceeded that size four- or five-fold, it behooves those whose fruits he eats to look about them, when it is proposed to make him grow still larger.
As an argument for replenishing his larder by another cut-and-come-again carcass, the Committee assert, "that we flourished in war and are depressed in peace, because manufactures then flourished and are now depressed; that there is an animating currency where they still flourish, and scarce any where they do not, except in the cotton-growing States." Manufactures then, it seems, do actually flourish somewhere in the United States, their depression notwithstanding, so wonderfully as to reflect around their orbits an animating pecuniary halo, no where discernible around any agricultural sphere, that of cotton excepted. It seems strange that wealth should attend factories in spite of oppression, and that poverty should lay hold of agriculture, though fortified by commercial restrictions. An impartial judge, from these two facts asserted by the Committee, must conclude that agriculture had already given too much of her estate to her children in some fit of morbid fondness, and that one of them must think her in her dotage, who can tell her gravely "I am rich, you are poor, therefore make me richer." Is not this the language of an ungrateful favourite, who thinks his beneficent parent an old fool, and fit only to work or starve. But it seems that one species of agriculture still presumes to vie with the factories in getting money. As this is the great merit by which the Committee sustain the claim of the factories to further bounties, one would think that the same merit ought to have attracted the same philanthropy to the cotton planters, because they also gain and circulate an animating currency where they flourish. But no; this solitary agricultural interloper in the trade of growing rich, is treated as a culprit, for doing that which acquires for a factory the character of patriotism. It yields no profit to sixteen States, and therefore it deserves no bounty like the factories, for making money. But this is not all. It is to be treated as all monopolists treat those who have the presumption to interfere with their privileges. The profits of raising cotton, far from recommending them as objects of bounty, are considered as a trespass upon the capitalists' privilege of exclusive accumulation; and even the prosperity of this last item of successful agriculture, is to be assailed for the benefit of our enormous pecuniary monopoly, because it is so local as to yield no profit to sixteen States. It is impossible to find a more lasting argument for transferring the profits of agriculture to capitalists, than that they are local. Even factories may be transplanted from place to place. Capitalists can follow their speculations. Travelling pedlars are ambulatory. And poor agriculture, being immoveably local, ought to be made subservient to the avarice of these pedestrians, under the notion that cotton planters can do no good to sixteen States. But cannot the cotton travel as well as the cloth made out of it? Cannot the money earned by cotton and tobacco planters make its escape from them? Whence came the enormous capitals accumulated in a few large northern towns, if it is true, that local agricultural profits do not promote the general prosperity?
These assertions of the Committee, however, require a graver consideration, and are calculated to bring matters to light, of which they were either not aware, or did not perceive the force. It is freely admitted that currency is infinitely more plentiful in several States where factories flourish, than in those without them. It is even admitted that there is a local redundancy of it in a few hands, so very considerable at this juncture of its general scarcity, that it is seeking for borrowers; and that governments and individuals can obtain loans at a lower interest and premium than at any former period. If the factories produced this redundancy, they are already, almost suffocated with wealth, drawn to them by the property-transferring policy; and it cannot contribute to the general interest that a body of capitalists, already so rich that they know not how to employ their capitals, should, by an addition to this redundant capital, be bribed to use their influence for encouraging the extravagance of government, to obtain employment for their capitals by repeated loans. It is very important to consider how the enormous and local accumulation of redundant capital has been produced; because, if the diffusion of currency will dispense more national prosperity than its monopoly, the instrumentality of the factories towards effecting the latter cannot be a merit with the nation, however grateful it may be to their owners. Let us, therefore, take a glance at the process by which this has been gradually effected, that we may at least know by what road we have travelled to get where we are, and be able to determine, with our eyes open, whether we will proceed in the same track.
The local redundancy of money, confined to a few persons, and factories, was originally produced, and has been subsequently increased, by using currency more to transfer, than to exchange property. This policy commenced with our first funding system. The sudden appreciation of revolutionary certificates above twenty-fold beyond the value at which they were bought, was a transfer of property by law, of about one hundred millions from the public to a few fortunate speculators. The local residence of Congress, the local expenditures of the war, and the local ingenuity of those who formed the funding project, had amassed these certificates in the north, and their conversion into national debt, not by the scale of value like the paper money, but numerically, suddenly created a great property-transferring capital or currency. In this acquisition, the majority in no State participated; it was bestowed on the initiated few, skilled in the secrets of legislation, and able to manage its stratagems for their own emolument. The effects of a transferring currency being thus tasted by a capitalist junto, and its wealth having invested it with legislative power, it of course adverted to banking as another item of the property-transferring policy. This second mode of transferring property settled in those districts where the first had provided a capital to give it efficacy. Thus the certificate capital was made to transfer property both by interest and dividends. The new project was imitated throughout the Union, most calamitously in States unprovided with the transferring capital created by the funding system; and whilst the people in those States wherein this capital resided, lost only the regular transfers of property caused by the banking and funding systems, those States wherein capital only existed partially or not at all, sustained a vast additional loss, by an unavoidable succession of frauds and bankruptcies. Every individual of all the States not enriched by this second deluge of property-transferring currency, contributed to the wealth of the few, who were so; but the western States which held a very small share of the artificial certificate capital, suffered most, and so sorely, that some of them have been searching for a remedy with great assiduity. Ohio struck at the root of the evil by endeavouring to repel the machine for transferring property from the people to capitalists, but she is told that this is both a wise and a constitutional operation, and that she must for ever submit to it. She has only an election it is said, between transferring the property of the people to the stockholders of the bank of the United States, or to stockholders of her own creation; but for want of the resident capital created by the funding system, and as she has no means of raising up an internal capitalist sect, she cannot avail herself of this poor right of election, and must remain tributary to the existing transferring capital, residing without the State. The late war was a third source for increasing the amount of property-transferring capital or currency. The loans, premiums, and expenditures, or the permanent profit made by the war, chiefly settled, where the existing property-transferring capital or currency chiefly resided; and became a great auxiliary to this monopolizing policy. The little war with France had previously given it some impulse. But the capitalists sect, not content with these several modes for transferring property from the great body of the people of every State to itself, and whetted by previous success, has ingeniously introduced two others for effecting this object. They still roll along this policy, although its accumulation, like that of a snow-ball, has already uncovered the humble herbage to many a pinching frost. By encouraging the extravagance of governments as a basis for loans, and by protecting-duty bounties, they have at length established the European system, by which employment for their redundant capital may be provided without limitation, and property may be transferred without end. The surplus beyond the prices which would be fixed by a freedom in exchanging property, gained by the owners of factories, transfers property without any equivalent, and goes in company with the other enumerated means, to the accumulation of a property-transferring capital, and not to the increase of a property-exchanging currency. It is an accumulation of the same character with that which creates capitalists in London, and pauperism in Britain; and transfers self-government from a nation to a combination between the governing and capitalist sects. The principle of this policy in all its modifications, consists in using currency or capital by legal contrivances, to effect the end of transferring property without an equivalent. If the assertion of the Committee, "that the local factories have created an animating currency around themselves," is true, it is an unanswerable argument against transferring to them more currency to be extracted from a suffering public by protecting duties. But the fact is, that our local and personal redundancies of money are not caused by the wares manufactured at these factories, but by the several enumerated modes for accumulating property-transferring capitals, among which the bounties given to factory owners is one of great effect. It is not accidental, but unavoidable, that these factories should fall into the hands of the capitalist sect, because old contrivances for transferring property both suggest and absorb new contrivances for the same end; and it is as evidently a mistake to imagine, that the factories have created a local redundancy of currency, which in truth created them, as that new loans caused old loans. This redundancy is notoriously caused by a current of wealth constantly flowing from all states, districts, and individuals, towards the places at which the attracting transferring capital resides; and by such currents individuals are fraudulently enriched, and the people fraudulently enslaved. Whether the animating currency said to reside near to factories arises from the lucrative nature of their employments, or whether it arises from the property-transferring policy, there seems to be no reason, either for giving bounties to factories which have been able to create an animating currency for themselves, or adding to the accumulation of capitals already partially created by laws, at the expense of the great body of the nation, languishing for want of an attracting capital, or an animating currency.
The Committee say, "that we flourished in war, and are depressed in peace, because manufactures then flourished, and are now depressed" — depressed by drawing around them an animating currency. They had before asserted that the policy of the government was adapted for war and not for peace. However doubtful it may be what species of war they mean by the last assertion, it is obvious that the quotation refers to our own war with England. "We flourished in that war." Who are We? Not the people of the States generally. They were loaded with taxes, deprived of commerce, and involved in debt. Those who really flourished by the war, can only be embraced by the assertion, and with these the Committee identify themselves. The families which flourished during the war, were the contracting and capitalist families; the latter by loans and premiums, and by selling the wares of their factories at a profit of fifty or an hundred per centum. Had the great family of the people flourished, they would not have hailed peace with transport. But we flourished in war, and are depressed in peace, say the Committee. And what is the remedy which we propose as a remedy for this depression? To revive in peace the property-transferring policy which operated so delightfully in war, that we may still flourish as we did then. Thus the Committee have made out their assertion "that the government was adapted for war and not for peace." It is a consequence of war to transfer property, and this has been hitherto considered as one of its evils. No, say the Committee, it is a blessing: we flourished by it during the war, and therefore this effect of war ought to be still enforced in peace, that we may still flourish. The congruity of the policy of our government in war with the interest of these We, was an unavoidable national calamity, and when peace enables it to avoid this evil of war, the Committee in supposing that our government is not adapted for peace, only mean that they do not push the transferring policy quite as far as it was carried in war. The capitalist family very modestly come forward and say, "We got more property transferred to us in war than in peace, and demand that the difference should be made up to us by protecting duties." Upon the same principle they ought to require the government to waste and to borrow.
The Committee having previously eulogized an overflowing treasury (the chief feeder of the grand European policy of using currency to transfer property) observe, "that revenue cannot be permanent whilst consumption is in a consumption, and that the means of consumption must be in the hands of our own people, and under the control of our own government." Consumption is in a consumption! A pun may be true as well as pretty, but we ought not to lose sight of its moral, in contemplating its smartness. Is this hectick natural or artificial? Have the people lost their appetites, or the power of gratifying them? How can they be gratified, except by exchanging the fruits of their own labours for the fruits of the labours of others? Has not currency superseded barter, and become the medium of such exchanges? If instead of being used for this purpose, by which consumption is both encouraged and supplied, it is used to accumulate wealth for capitalists, or any other separate interest ennobled or hierarchical, must not the consumptions of the people be diminished? Suppose a law should pass for compelling the rest of a community to barter with a few capitalists hogs for hogs, or cattle for cattle, but forcing them to give two hogs, or two cows, for one. In this barter, the injustice would be seen by every one in his senses, because the case would be stripped of the obscurity produced by hiding the very same thing with the vizor of a transferring capital or currency. Compulsory exchanges of two measures of labour for one, between our capitalists or factory owners and the rest of the community, is the same case. The nation is not made richer by such exchanges of cattle and hogs, but their consumption is diminished, because those who give two hogs or cows for one, must eat less; and those who receive the two are not thereby enabled to eat double, and must of course accumulate stock instead of increasing consumptions. Such fraudulent accumulations, in fact, make nations poorer by converting the profits of labour, the only fund for sustaining consumptions, into a dead capital. They are like the iron chest of misers, which locks up, and robs money of its utility in promoting exchanges and consumptions. The annual sum, whatever may be its amount, transferred from industry to officers of government, to privileged corporations, and to receivers of bounties, beyond the expense of their individual subsistence, is transferred from the business of promoting consumption, to that of promoting accumulation. A robber might plead that he consumes some portion of what he seizes. A furious democracy, which invades private property, and scatters it among a multitude, might, with far more force, urge the plea of encouraging consumptions, than our property-transferring policy. Is there any moral difference between effecting a transfer of property by violence, or by fictitious currencies or legal privileges, except that one must be transitory and the other may be permanent. It is curious to observe that mobs and aristocracies aim at the same object by the different instruments of force and fraud, and that though brothers in principle, they are converted into deadly foes by their contest for pillage.
As the policy of transferring property has increased, the diminution of consumptions has followed. I remember when fifty times as many families drank wholesome liquors as now do, and when it was quite common to give good wine to the poor as a medicine. Many, then able to practise a charity, often extending to the preservation of life, now need the same charity themselves; but it is almost abolished by the restrictive system. In the time of one of the Edwards, a law was made in England prohibiting the common people from eating the best meats, and confining them to the most ordinary. As they were brought down to the food next to dry bread, we are nearly reduced to the drink next to common water. Do such privations increase consumptions? Pardon me ye whiskey drinkers! I do not mean to deprive you of an enjoyment as delicious when compared with water, as neck beef is when compared with cold bread, but only to assert that there is something tyrannical in "using a control of consumptions" to deprive you of the liberty of comparing whiskey with wine. But, say the Committee, "the means of consumption must be in the hands of our own people, and under the control of our own government." Never have I seen two more hostile positions coupled together. Of what value to the people are the means of consumption, if the government can control their use? One is almost a perfect idea of liberty, and the other of despotism. Can any power be more tyrannical than one which prescribes to its slaves what they shall eat, drink, or wear? Yes. A power to transfer from industry that portion of its profits by which the most agreeable gratifications can only be purchased, to the augmentation of another's capital. Before the last union, the means of consumption, and the liberty of applying those means, resided in the people of the States. Without the liberty of application, the possession of the means of consumption is entirely nugatory. Did the reservation to the States, or to the people, exclude a right essential to liberty? Certain rights were intended to be retained or surrendered to the Federal government; but it is now said to be so difficult to draw a line between these two classes of rights, that it is best to obliterate it entirely, by an unlimited power in Congress to control all our consumptions; and in virtue of this power to enable Congress to transfer our property to exclusive privileges. Is not this a cat, not of nine tails only, but of nine thousand, by which individuals and whole States, may be as well lashed as the maddest despotism can desire? And for what reason are we to bear this severe discipline? Truly, because it is inflicted by a government of our choice. But are high-minded Americans yet to learn, or can they be made to forget that every species of government, uncontrolled by constitutional checks, will become a despotism, and reduce their boasted liberties down to the standard of the rights of man (pardon me reader for using an obsolete phrase) as they exist in Europe.
Governments have universally exercised a despotic control of consumptions, sometimes from humane, but chiefly from fraudulent motives. Laws for limiting the prices of consumable articles, unattended by the desire of transferring property are of the former description; and laws for controlling consumptions, with the covert intention of transferring property, of the latter. But whether the motive by which such laws have been dictated has been good or bad, their effects have been uniformly tyrannical or pernicious. They have even sometimes created the famines they intended to prevent. The whole code of these laws is a commentary upon the policy of subjecting consumptions to the absolute control of governments, however constituted. When these laws design to provide the multitude with bread, they starve them; when they pretend to supply the multitude with money, they impoverish them.
Let us look at a few of our own transferring laws. The bounties bestowed by the General and State governments upon supposed revolutionary officers and soldiers, may probably embrace ten thousand persons, and transfer property to the amount of three millions of dollars annually. This sum alone suffices to inflict upon us the additional transferring necessity of making loans. The bounties bestowed by the exclusive privilege of banking may embrace fewer persons, and transfer annually four times as much property. The manufacturers are said to amount, with their families, to half a million of persons. If the bounty supposed to be bestowed upon this number by controlling consumptions, should be equal to the pittance necessary to relieve an old soldier, it would be enormous; if it is only five millions, annually, it would yield only ten dollars to each person, a sum insufficient to influence their industry to any sensible extent. But the fact being that the bounty goes into the pockets of the officers of the supposed five hundred thousand manufacturers, it infuses only into them a corresponding portion of excitement. A capitalist would laugh at his share of the bounty, if he only received an equal share with his workmen. He would despise the pension of even a war-worn general. He pants for the rewards of a Wellington. Contemplate then an army of five hundred thousand manufacturers, commanded by fifty or an hundred capitalist generals, dividing the bounty arising from controlling consumptions among themselves, and you will see the controlling system as it operates. The military pension list dwindles into a feather compared with it. That dies daily; this daily grows. Russia has given to us a model of this policy. A hundred square miles of land, with all the people upon it, is sometimes given to a nobleman by the government, to enable him to work some mine for the public good. His privilege only operates over this limited space, and only enables him to control the consumptions of a few thousand people to enrich himself. The Federal government, far more bountiful than an imperial despot, extends the principle of controlling consumptions over millions of square miles and millions of people, for the public good also; but the noble capitalist is, undesignedly to be sure, enriched by it. The wages of the Russian boor, being barely necessary for his subsistence, instead of increasing, diminish his consumptions; he must regulate them by his scanty stock, and not by free industry. The profits of his master are applied to accumulation. Thus also our control over consumptions will neither increase consumptions nor the revenue. Should the army of five hundred thousand manufacturers each, unexpectedly, acquire some pittance of the bounty, it would only be the means of their consuming that which those who pay it would have otherwise consumed; but whatever portion of the bounty goes to enrich the generals of this army, correspondently diminishes both consumptions and revenue.
Suppose that comfort and pleasure should both be excluded as ends of consumption, and revenue should be allowed to constitute all their value. A wise politician, though governed by this sole motive, would not have his head as well as his heart indurated, so as to diminish the enjoyments of his fellow creatures, merely to defeat his own object. As wants are the basis of consumption, he would discern at once, that obstacles to their gratification would diminish its capacity to produce revenue; and that fruition united with industry, was one of the best resources for taxation. Industry, unattended by fruition, soon flags. The comparison between the civilized and the savage man would demonstrate to him, that the multiplication of wants and enjoyments, and not their dimunition, was the ally of national wealth and an ability to pay taxes; and therefore if he only extends his views to common defence and national welfare, he will not exceed that nice limit to which revenue may be carried, without diminishing those gratifications which beget or invigorate the ability to pay. How, then, has it happened that a truth so obvious should have been so frequently violated by proscriptions to human wants, and controlling consumptions? It has entirely arisen from using the power of controlling consumptions to transfer property to exclusive privileges. When fair and honest revenue for genuine public purposes is the object of a government, it will compute how much tax the consumption will bear, without killing the want or gratification which is to pay it; but when the object is to transfer property from the public to exclusive privileges, by controlling consumptions, the computation is, not how much the revenue for public purposes may lose, but how much the exclusive privileges may gain. This latter design is obliged to admit that it will cripple revenue to-day, but then it promises to set its dislocated joints in future. It also exclaims, "that revenue cannot be permanent whilst consumption is in a consumption," whilst it is innoculating revenue with a fatal hectick, by investing the government with the power of controlling consumptions, for the purpose of enriching an exclusive privilege.
The tyranny of a power to control human gratifications; its peculiar capacity, if exercised by the Federal government, for begetting the most oppressive partialities, and destroying the rights reserved to the people or to the States; and its evident hostility to the object of revenue; suggested to the Committee a necessity for rebutting such formidable objections, by a verbal vindication of the freedom they are stabbing with a political poniard, deadly to a creature compounded of wants and sustained by consumptions. They say, "that there should be no system of restriction, but one of reciprocity. That this is a free trade. That this reciprocal system of restriction has aided our commerce. That year succeeds year, and our troubles increase." In Russia, formerly, many articles of commerce were monopolized by the emperor; at present he contents himself with a monopoly of salt, brandy, saltpetre, and gunpowder; articles internally produced. As his monopolies were diminished, commerce flourished, and the prosperity of the country increased. He yet, however, extracts a very great revenue from the four articles of monopoly retained. Our protecting-duty monopoly, less moderate than the imperial, extends to an infinite number of articles, capable of producing a much larger income, than the four with which an absolute monarch is contented. But this income is given to capitalists, instead of being applied to public use like the Russian, and exhibits the pure policy unmingled with an extenuation, which has not been able to defend the Russian from the charge of despotism. In Russia, the government gets the whole profit of the monopoly; here the government cannot even divide the spoil with the capitalists.
Supposing it to be true, "that restriction united with reciprocity begets a free trade," as the Committee assert, must not the principle be as applicable to domestick as to foreign commerce? The former affects private property, individual happiness, and national prosperity, more deeply than the latter. If a violation of reciprocity between the United States and foreign nations may impoverish or enrich one of the parties, may not a violation of the same principle, as applicable to States or to particular interests, impoverish or enrich one of the parties also? Will not a restriction upon domestick commerce enrich factory owners, and correspondently impoverish those from whom this wealth is obtained? Between nations, it is said, that one restriction may balance or compensate for another; and upon this ground only, such restrictions are justified. Between States and domestick interests, the same policy must be justified upon the same ground, or be destitute of defence. Now, where is this compensating reciprocity to be found, in the regulation of domestick commerce by the protecting-duty restrictions, without which, in the opinion of the Committee, a free trade cannot exist? Is there any equivalent, reciprocal, domestic monopoly, bestowed upon the agricultural, commercial, or any other interest, except the banking? Yes, it is replied; we give you an invisible inoperative monopoly to compensate you for our visible and active one. Only learn to weigh smoke, and you will discover a fine paper system of reciprocity, in laws for prohibiting the importation of bread stuff, cotton, tobacco, or fish. To make this system completely reciprocal, upon paper, it only remains to prohibit the importation of land.
But let us no further imagine that complete retributive justice may be accomplished. That monopolies can be so nicely balanced, as that the loss inflicted by one, will be reimbursed by the profit acquired from another; and that the system will eventuate in leaving private property exactly where it found it, without transferring a cent from States to capitalists, or from one individual to another. In short, that a perfect system of domestick reciprocity and compensation may be established by commercial domestick restrictions, and its equal and fair execution effected, so as to produce a domestick free trade by these reciprocal restrictions. What will the nation gain by it? All the States, all interests and all individuals, would only stand in the same relative situation, which they previously occupied, with a single exception, namely, the general loss incurred by a successful execution of the system itself, according to its fairest profession. There is no political system so expensive, and requiring so many public officers, as that of regulating domestic commerce by restrictions, monopolies and reciprocities, because it abounds with temptations to violate a multitude of laws; and because such violations are considered as self-defence by the sufferers, though they are called frauds by the monopolists. The total of this expense is an enormous sinecure, if the system honestly leaves property where it found it, as is promised by the doctrine of reciprocity and compensation; and is therefore a dead loss and a living oppression to the people. If this doctrine lies when it promises not to transfer private property, it is a swindler; if it speaks the truth when it promises to prevent this fraud by reciprocity and compensation, its whole effect is to expose nations to the torments and expense of being watched and controlled in all their dealings and gratifications, by an army of public officers.
But suppose that this new idea of applying the doctrine of balances to private property, should turn out to be as fallacious as the old one of applying it to political power; and that some one monopoly should be able to absorb property, by its exclusive privileges, as the king of England absorbs power by his prerogatives, like the capitalists of the same country. Do the acquisitions of property now making by pensions, banking, borrowing, extravagance, and protecting duties, forbid such an apprehension? Where are the reciprocities and compensations for these transfers of property to be found? They are in fact always promised, but never found under any system of restriction and monopoly, applied to commerce, foreign or domestick; and such systems universally inflict upon nations the two misfortunes of having the property of individuals transferred to other individuals without an equivalent, and of being saddled with a heavy and lasting expense necessary to enforce the injustice.
A system of adjusting by law the numerous balances of property, is a machine infinitely more complicated, than the system of political balances. Ours is already so much disordered, as to have called forth the utmost talents of project-menders. Various schemes for patching it up have been tried and failed. The inference is, that all legal machines for transferring property are incurably vicious, and that industry and talents are better regulators of it. Their introduction by funding and banking caused some dissatisfaction, but the pretexts were specious, and the oppression was at first light. As they have been multiplied, the oppression becomes heavier, and the dissatisfaction increases. But the Committee say, "that a reciprocal system of restriction has aided our commerce." How? Why, they add "that year succeeds year and our troubles increase." Palpable contradictions are not arguments. Year succeeds year, and commercial restrictions are multiplied. What kind of aid is that by which our troubles are increased? But let us search for a reconciliation of assertions apparently so hostile. It cannot be our foreign commerce which has been aided by a system of reciprocal restriction, for the Committee have told us "that our exports have not increased in proportion to our population." And this is admitted to be growing worse as restrictions are multiplied. Our domestick must, therefore, be the commerce, aided by our restrictive system; and it is certainly true that protecting duties have operated more feelingly upon this, than upon our foreign commerce. The chief existing species of domestick commerce has been undoubtedly vastly extended, and the capitalists think aided by the system of transferring property, or as the Committee are pleased to call it, of reciprocal restriction; and our troubles have also increased in concomitancy with it. The system pretended to be levelled against foreigners, has only hit ourselves. How can this have happened except by its internal operation in transferring property, and accumulating capitals at the public expense? This, say the project-menders, has been caused by the oversight of not giving to industry some countervails, to balance the avails extorted from her to enrich privileges and capitalists; and therefore to establish a restrictive, reciprocal, free trade between agriculture and factories, it is necessary to get together colonies of mechanicks by bribes to capitalists, numerous enough to consume the fruits of the earth. When this is effected, the two classes will be employed in a delightful game of shuttlecock, that is, in passing a bag of money to and fro between themselves, without its producing the fraudulent transfers of property, which have only increased our troubles for want of this just reciprocation.
Thus the apparent contradiction is removed, and we are driven to consider, whether reciprocal restrictions can constitute, or were ever intended to constitute, a free trade, foreign or domestick. If these restrictions amount to prohibitions, yet if they are reciprocal, according to the position of the Committee, the trade is free. It would be exactly the case of a pacifick war, in which two nations should make laws that neither should attack the other, but that each should shed at home a reciprocal portion of its own blood. Let the agricultural and capitalist interests stand for these two nations. As protecting duties draw much of the blood or money of one, an equal portion of blood or money ought to be drawn from the other, to make a free trade or a peaceable war, by means of reciprocity. Neither can be effected, if the blood or money drawn from the veins or pockets of the one, should be infused into the veins or pockets of the other. That would only be the experiment of exchanging youth for decrepitude, by surrendering a vital principle. Rare as it has been to persuade or compel individuals to submit to this species of free trade, the operation has been frequently performed upon separate interests in all civilized countries, under some pretext of reciprocity. The pretext for it in the case under consideration, is less specious than any I have met with. Invigorate us now with your blood, say the capitalists to the agriculturists, and you shall bleed us in your turn, after both you and ourselves are dead. This is the proposed restricted-reciprocal free trade.
Chaptal, a French financier, has said "that it is impossible to reconcile hostile interests, and that the legislator must balance the censure he receives from one party, by the approbation of another." This honest confession denies the practicability of effecting just pecuniary balances by legislative favours or exclusive privileges, as contended for by the avaricious and ambitious schools, and avows the true principle of the policy to consist in suppressing the dissatisfaction of the injured, by the aid of the favoured class. The universal policy of these schools is to bribe each other with money or power extorted from nations, and to unite this power and money in self-defence. Such is the restricted, reciprocal, free domestick trade established in England; and exactly the same coalition which sustains fraudulent transfers of property there, is rapidly growing up here. The only reciprocity produced by the policy, is between the corrupters and corrupted, each party in the trade alternately acting in each character. We will gratify your avarice if you will gratify our ambition; or we will gratify your ambition if you will gratify our avarice — comprises all the negotiations and all the reciprocity between statesmen and exclusive privileges. This coalition has already become so formidable in the United States, that it openly and earnestly pleads its own cause, without faltering from beholding the mischiefs it has already caused. It remains to be seen whether it can delude the Americans by the same arts with which it has deluded the English.
All monopolies and exclusive privileges have succeeded by using the same argument urged by the Committee. It is invariably condensed in the single word "reciprocity." These stratagems say, "give us your money or your rights, and we will give you something more valuable. We will give you heaven for dirty acres or filthy lucre. We will give you protection for manors and feudal powers. And now, we will give you a restricted, reciprocal, domestick, free trade, for a profit of fifty or an hundred per centum upon most of your consumptions." To these arguments, they never fail to add their own verdict, that such reciprocities will advance the national welfare. But are they impartial judges? We have a notion that the only proper judge in giving away his own property, is the man himself; and that each person ought to make his own will. If it is a just notion, the capitalists ought to have no vote in transferring to themselves a vast tax upon the consumptions of every body else. If a man should combine with a government to take away another's property, the tyranny of the act would not be obliterated by the power of an accomplice. Had the man who foolishly killed the goose that laid the golden eggs, spared her life, and only persuaded her that she did not lay such eggs at all whilst he was daily taking them away, it would have been a case fitting both the capitalist and agricultural interest. The facts are stated to be "that agriculture has ceased to lay golden eggs; that factories will lay them in abundance; and that, when laid, the capitalists will give them to the agriculturists." I shall not presume to say which of the parties would represent the goose.
The Committee have ingeniously endeavoured to divert our attention from a bad principle at home, to the same bad principle abroad. They say "the people are groaning under a restrictive system of bounties, premiums, privileges, and monopolies, imposed by foreign nations." If these devourers of property, even at a great distance, are so dreadful, as to make us groan, they will certainly make us roar like the European nations, when well fixed among us. Why do they make us groan though so far off? Because, as the Committee contend, they are stratagems for transferring wealth from one nation to another. Is their ability to prowl for property across an ocean, a proof that they will graze like lambs at home? How comes it, that fostered by our own laws, unobstructed by distance, unchecked by competition, and unresisted by retaliation, they will suddenly lose their very nature, and cease to transfer property fraudulently; whilst they make one nation tributary to another, in spite of the resistance opposed to their voracity by the sufferers? If it is the innate principle and design of foreign bounties, premiums, privileges, and monopolies, to transfer wealth from one nation to another, must it not also be the innate principle and design of domestick bounties, premiums, privileges, and monopolies, to transfer wealth from one domestick interest to another? In fact, this latter is the vital principle of the whole family of mercenary stratagems, and the political only imitates the military tactician in calling off the attention of his adversary from the true point of attack, by feigning a false one.
It is improbable that one nation can do any material or permanent injury to another, by its bounties, premiums, privileges, and monopolies; but quite certain that governments can injure, oppress, and enslave nations by these instruments. Should one nation even succeed in getting a little money from another by these tricks, it certainly loses a great mass of liberty at home; and a nation which should lose this money but retain its liberty, would be happier than one which should get the money but lose its liberty. But the free nation will speedily prove too hard even in the contest for wealth, with a nation which may be groaning as we are, or roaring like the English and Irish, under a system of bounties, premiums, privileges, and monopolies. Bounties and premiums given by the supposed cunning nation, upon their exportations, would frequently be received by the importing free nation. Privileges and monopolies would transfer property from productive labour to capitalists, and diminish industry; and would moreover produce a system of smuggling and expense, which would also foster the commerce of the free nation. It is as impossible to prevent it, as it was for Canute to stop the waves of the ocean; and if all the nations in the world should plunge yet deeper into the system of bounties, premiums, privileges, and monopolies, I believe that it would nurture the commerce of the United States, provided the imitation of this oppressive system was expunged from our statute book, and it was made really free. The invigoration of industry by its freedom, would inevitably work down the industry cheated by stratagems for transferring property, and heavily laden with taxation, just as a well fed and well paid army, will beat an army half starved.
The idea of what is called "a balance of trade" has furnished the authors of all the stratagems for transferring property internally by restrictions, privileges, and monopolies, with ammunition for this formidable political artillery, which has been so successfully used against the liberty and happiness of mankind. Accordingly the Committee observe "that commerce is exporting, not importing, and by reversing her employment she is expatriated," meaning thereby, that unless a country exports more than it imports, so as to have a pecuniary balance in its favour, it has a bad commerce or none. It is impossible to suppose, as the words imply, that exportation alone constitutes commerce, or that such a commerce could even exist. No selection of a basis upon which to erect a system of premiums, bounties, privileges, and monopolies, could have rivalled in dexterity this of a balance of trade. Its intricacy leaves it at liberty to assert whatever it pleases; and the total ignorance of the mass of every nation as to such assertions, invests the initiated few, if there are any such, with the advantage of making the most of the impenetrable secret, to advance their own designs. When an agriculturist murmurs at our system of bounties, premiums, privileges, and monopolies, he is told that the balance of trade is against us, and that it is necessary to pilfer him by this system to get it in our favour, because otherwise the nation cannot be wealthy. The argument is beyond his reach; he has no reply; he submits; but the Committee say he groans. If the happiness of nations really depends upon a pecuniary balance of trade, with other nations, several surprising consequences follow. A great blunder in the structure and scheme of this world must have been committed, as few, or at most not above half mankind, can acquire this enviable balance; so that one half the world must be in poverty and trouble. The situation of all inland people must be peculiarly miserable. They can never lose or gain much money by this balance; yet they must be made subject to domestick stratagems for transferring property by bounties, premiums, privileges, monopolies, and an expensive government, in order to obtain an enigma. Domestick commerce must be converted from an instrument for fair exchanges, into an engine for foul transfers of property, under pretence of realizing a dream. All mankind have hitherto mistaken the chief cause of their troubles. They have not been caused by forms of government, sustained by bounties, privileges, monopolies, and oppressive taxation, no, they have been caused by not having a balance of trade in their favour. If the idea is not nearly or quite a delusion, invented for fraudulent purposes, even supposing it to contain some truth, yet a nation which sells its liberty to exclusive privileges for the sake of a balance of trade, ought to ascertain how much money it will get, for the commodity it is disposing of and how long they will keep it, lest the bargain should turn out to be a bad speculation.
The speculation is merely a barter of liberty for privileges, monopolies, and heavy taxation. It does not propose to bring us more land, or more articles of consumption, in exchange for it. The minimum of necessaries, conveniences, and luxuries, is considered as the maximum of the supposed blessing. To be a good thing, the balance must be paid in money. The advocates of this balance of trade and exclusive-privilege doctrine, use our avarice to make us forget what money is. It is the representative or emblem of consumable property only, between nations. It is kept in fusion by circumstances beyond the control of any one nation. It is as hard to hold as quicksilver. If it is held, it is good for nothing. It is a bird of passage, and when it cannot find food in one country, it flees to another. If we purchase this fugitive at the expense of establishing privileges, monopolies, and heavy taxation, the necromancer, Commerce, waves its wand, and presto, it is gone; but the Tyranny incurred to obtain it, hangs upon our necks for ever. Let us not give a valuable estate, of which we have been so proud, for a slave who will infallibly run way. Suppose a balance of trade should bring us ten millions annually in hard money, and even that we could retain it for ever. Should we be a cent the richer for it? Would it not depreciate like local paper money, the moment it exceeded the demand for employment? If we could find the undiscovered secret of prohibiting its exportation, and deprive it of its emigrating character, the accumulation of specie by a constant pecuniary balance of trade, would only produce the same effects as an accumulation of local paper money by the operation of the press, and only invest us with the blessings of depreciation. We should grow numerically richer, as a miser would by converting dollars into cents. If we cannot discover this worthless secret, restrictions, exclusive privileges, and monopolies cannot keep the money they promise to bring. If they should really extract money from foreign nations, instead of transferring property at home, the money cannot be retained, but the property transferred can. The residence of money is regulated by a power beyond the reach of legislation itself. It will go from the place where it abounds, to the place where it is scarce. As the emblem of commodities, it will search for the cheapest. If restrictions, exclusive privileges, and monopolies could bring in so much money, as to destroy the equilibrium of its value between ourselves and other commercial nations, they would have done their utmost; but the acquisition would be transitory, because the equilibrium would be restored, like the level of water after it has been disturbed by a storm. The influence of exclusive privileges, commercial restrictions, and monopolies upon other countries soon ceases; but it remains as to separate interests at home. If these stratagems could have both gotten and retained wealth from other countries, it would have somewhere been seen both enormous and permanent; for though they pretend to be too conscientious to transfer the wealth of their fellow citizens to themselves, they have no scruples about transferring that of other countries to their own. The bargain therefore made by a nation, which establishes commercial restrictions, exclusive privileges, and monopolies, to obtain a balance of trade, is only a permanent subjection to an oppressive policy, for the sake of a pecuniary acquisition, which will probably be never obtained, and if obtained, cannot be permanent. The oppression may grow into unlimited tyranny; but the acquisition can never grow into unlimited wealth. The exclusive privileges and monopolies can never prevent the departure of money, but they may prevent the recovery of the principles surrendered to obtain its temporary appearance.
If the nature of money is correctly stated, the idea of governing its value by commercial restrictions, exclusive privileges, and monopolies, is more chimerical, than that of governing the local value of paper money by tender laws; and as its value is not regulated by these jugglers, but by the universal laws of commerce, it is evident that all their tricks for making money travel and settle where they please, are fallacious.
To conceal their inability to effect any such thing, the whole protecting-duty, restricting, monopolizing or balance-of-trade family, have used paper money as a mask for their legerdemain. If it was true that protecting duties would bring to us a balance of trade in specie, what necessity could there be for the banking exclusive privilege, or paper money? This consideration is a test and detection of the real design of the protecting duty, and all other exclusive privileges. If the protecting-duty monopoly would secure for us a pecuniary balance of trade, a surplus banking monopoly of currency would be worse than useless, as serving to banish the money which the sister monopoly boasts of bringing in. It is curious to see the United States equally zealous for two monopolies, one to bring in money, the other for sending it away. Both have loudly boasted of their capacity to enrich the nation, and both have been very patiently tried. The results are, first, that the nation is distressed; secondly, that our governments have been made extravagant by confiding in these promises and are reduced to borrowing; thirdly, that exuberant personal capitalists have been created; and fourthly, that the two monopolies have generated a third, that of supplying the government with these loans. If the capitalists would give up two of these monopolies provided they might retain one, it might bear some distant analogy to their doctrine of reciprocity and compensation, as it would be a considerable retribution in a thief who had stolen three horses to return two of them; but to demand another horse because he had already gotten three, would almost stagger an adept in that species of property-transferring occupation. But reciprocity, compensation or restoration, constitute no part of the exclusive-privilege policy; one privilege or monopoly begets another; the two a third, as we have already experienced; and the more there are, the more they breed.
The supreme power of commerce has defeated laws for compelling local paper money to fulfil its promises of reciprocity and compensation; and therefore no laws can compel exclusive privileges and monopolies, which carry on their operations by the instrumentality of currency, to use it according to the principles of reciprocity and compensation, and not to use it for transferring property to themselves. The supremacy of the universal law of commerce, is demonstrated in the fate of every species of paper money. Foster it by privileges or defend it by tender laws, it is exposed to fluctuation, depreciation and death. A balance of trade in specie is subject to the same laws. It must flow out after having run in, or it will generate a putrid miasm. The Committee propose to produce an influx of specie by restrictions upon commerce; but if the project should succeed, the money would be useless, and might be pernicious without a reflux. This pecuniary balance must go out again in search of something. Not of a cargo of money in return for a cargo of money, but of moveable consumable property. Which would be the most economical mode of managing commerce for the purpose of obtaining a profit or a balance in our favour; to send out a cargo of wares to bring back a cargo of money, and then to send out a cargo of money to bring back a cargo of wares; or to bring back a cargo of wares for a cargo of wares? The first is a kind of exporting commerce recommended by the Committee, to come at a balance of trade.
Money, far from being the regulator of the balance of trade, has its own value regulated by the price of commodities; and the price of commodities being regulated by plenty or scarcity, by superfluity and want, by fashion and folly, by climates and soils, by durability and decay, and by a thousand other circumstances, which are continually fluctuating, the wit of man is unable to find the Proteus, or pecuniary balance of trade; or if it could be found, to hold the perpetual metamorphosis. This never-ceasing fluctuation is the basis of commerce, the invigorator of industry, and the equalizer of comforts. It is also the appraiser of money, and bills of exchange are used to execute its valuations. As money itself has no fixed value, the exchange of this emblem of commodities rises or falls, as the value of the substances it represents locally fluctuates. The shadow will go in spite of laws, wherever it can acquire most substance. A balance of money may be against a nation, and yet a balance of trade in its favour. If a nation gains more of this substance than it loses by commerce, its prosperity and comforts will be increased, although it should lose more of the shadow than it gains. The balance of the shadow of commodities, has for near two centuries been in favour of Spain, by reason of the money she has drawn from her provinces; but the balance of trade has always been substantially against her. Even commodities themselves cannot furnish any certain rule for ascertaining the balance of trade, because the value of labour by which they are produced, is unsettled. The cultivation of a poor soil, must give more labour in exchange for other labour to supply his wants, than the cultivator of a rich soil. Seasons and healthiness will constantly affect the value of labour. A balance of trade in commodities is however greatly preferable to a balance in money. It possesses the most valuable quality of money; that of being able to go abroad in search of other commodities needed by a nation. The only commercial value of money is its capacity to obtain from other nations articles for consumption, and commodities are articles for consumption. They constitute a fund for taxation. Money itself is in a very small degree an article of consumption, nor is it susceptible of taxation, on account of its invisibility, except through the medium of its purchases.
How then can a balance of trade be ascertained? Not by money, because its value fluctuates. Not by labour or commodities, because scarcity, rarity, taste, sterility, fertility, seasons, and endless circumstances, render both scales utterly unsteady. Not by corn, because the value of that also is governed by demand, and influenced by most of the circumstances which influence the value of other commodities. As neither of these scales are sufficient for ascertaining a balance of trade; as such a balance, if obtained in money, could not be lasting, on account of the acuteness of money in search of its equilibrium; as a balance in commodities must be consumed or re-exported to procure other articles of consumption; and as even corn is subject to these laws, it follows that a balance of trade, estimated by either of these scales, is either an idea wholly chimerical, or exposed to perpetual fluctuations. But if we change terms, and rejecting this equivocal and fluctuating idea of a balance of trade, consider whether commerce has contributed to the wealth and prosperity of the United States, or has been the cause of the distress they are now enduring, the evidence will at once strike us as more intelligible, and the conclusion as more certain. Agricultural improvements, building houses and raising up cities, manufacturing improvements and ship building, are among the strongest proofs of a permanent increase of national wealth and prosperity. In these and other acquisitions the United States have been unrivalled by any nation ancient or modern. If our commerce has produced these effects, what reason is there for subjecting it to the regimen of exclusive privileges contrived for transferring property internally? With what exultation have we seen a free commerce delineating our wide-spreading canvass with all the representations of national prosperity! With what anguish do we behold commercial restrictions wrenching the pencil from this successful artist, and obliterating the work! Our commerce, both before and since the revolution, increased the national prosperity, with undeviating progress, and we are exchanging its solid benefits for restrictions, bounties, exclusive privileges, and monopolies, recommended by recondite and intricate speculations about the balance of trade.
The proposition itself "that commerce is exporting and not importing" urged by the Committee to justify this change of policy, would in my view contain more truth, if it were reversed. I should think that the most gainful commerce which imported more than it exported. If two dollars are exported and only one imported, is it a gainful commerce? The case is the same if such a commerce is carried on in commodities, or in their representative, money. If two measures of labour are exported in any form, and only one imported, a loss ensues. If one is paid for in money, so as to equalize the exports and imports, that money is only the representative of the labour it leaves behind, and must be sent back for it; or remitted to some other place upon a similar errand. If a nation can pay for its imports, the greater they are the more it will flourish, as a superiority in gratifications is the highest degree of human prosperity; as these gratifications re-create themselves by exciting industry; and as this industry obtains its gratifications by things which would be of no use to it, unless they are so employed. If a nation cannot pay for its imports, the trusting nation will be the loser, and the importing nation the gainer. But no importing trade could continue with an inability to make payment. It would inevitably stop of itself. Does not this fact explode all the theories about the balance of trade? Does it not prove that commerce must contain some reciprocal compensating ingredients, or cease, according to its own laws, to exist.
The Committee have endeavoured to overturn all these ideas by the following assertions. They say
that the flood of importations has deprived currency of its occupation. There is more specie in the United States than at any former period, but it is not currency because it is unemployed. The importation of foreign goods was never so great as when our embarrassments were produced. The importer's ledger ought to settle the question. In cases of bankruptcy foreign creditors appear. We have only the miserable and ruinous circulation of a currency for remittance to foreign nations. They hold the coin and we hear it jingle. The excess of exports over imports is the rate of profit.
Dictums of impartial judges are the lowest species of authority, and those of lawyers pleading for clients are of no authority at all. Both are often inconsistent with truth, contrary to sound principles, and liable to answers by which they are easily refuted. The report of the Committee abounds with this kind of authority, uttered with a confidence often inspired by a destitution of better arguments. Let us see if this family of dictums can bear an examination.
"The flood of importations has deprived currency of its occupation." So then, the flood of paper money has been no cause of our troubles; on the contrary this flood of commodities has deprived the flood of bank paper of its occupation, and thereby caused the national distress. Had the exchange of property been the occupation of paper money, the greater the importation of exchangeable commodities, the more this occupation would have been increased. But if the chief occupation of bank paper is to transfer property, and this flood of importations has really diminished that occupation, the regret expressed by the Committee on the occasion, is only an indication of their preference for the transferring policy. It is hardly conceivable how the introduction of more exchangeable articles, could have deprived currency of its occupation in exchanging property, except, that as cheapness is a consequence of plenty, less currency suffices to exchange more commodities, than when the price of these commodities is enhanced by an artificial scarcity. In this view, the scarcity of manufactures produced by the protecting-duty system, undoubtedly increases the occupation of bank currency in transferring property. If this flood of importations had consisted, not of things represented by money, but of the representative itself, would not the universal law of commerce have operated upon an exuberance of money? The quantity of money being increased, and the stock of commodities diminished, from which money derives its occupation of facilitating exchanges, both the causes which generate a depreciation of money would have existed. Scarcity or plenty affect the value of money, precisely as they affect the value of commodities. There is however a great difference to us between the depreciation of each. The depreciation of foreign commodities produced by exuberant importations is a loss to foreign nations, and a gain to us; but the depreciation of money, which would also be produced by exuberant importations of that article, would be a gain to foreign nations, by enhancing the prices of their commodities, and a loss to ourselves, until an equilibrium was produced. A depreciation of money is not an accumulation of national wealth, and therefore a nation may both abound in currency, and also become poor and wretched. This is, invariably, effected by the system for increasing currency, combined with regulations by which its occupation of exchanging property is contracted, and that of transferring it, is extended. The supreme law of commerce governs currencies both local and universal. We have fully experienced its uncontrollable power. A redundancy of paper money enabled individuals to acquire more currency, nominally, but its cheapness or depreciation made most of them substantially poorer. Nations are individuals in respect to universal currency. A redundancy, if they keep it, does not enrich them, because its value is reduced by depreciation. A specie balance of trade in favour of Spain for two centuries, attended by a domestick system of exclusive privileges, exhibited a rich class, and a poor miserable people. Her exuberance of money and its consequent cheapness, served only to invigorate foreign industry. If we could, by the tricks of exclusive privileges, import annually the product of the mines of Mexico and Peru, we should be enriched like Spain. It would bribe industry (the only true and lasting source of national wealth) to become idle; and excite fraud to become industrious. If industry is the only true and lasting source of national wealth, the idea of burdening it with exclusive privileges; of taxing the great mass of it to obtain a balance of trade by giving these taxes to one or a few of its objects; must be chimerical. If the favoured products should become redundant by the tribute they receive from the others, this redundancy would produce depreciation, and terminate, not in a retribution for the expense they had cost, but in a positive loss. A redundancy contains the seeds of calamity unless it is dissipated. Whilst Spain clung to the idea of enriching herself by a redundancy of money, Holland, but a splinter of the enormous Spanish monarchy, pursued a policy precisely the reverse. A flood of importations in money and a flood of importations in commodities, side by side, engaged in war and in commerce; and tried both the prowess and profitableness of the adverse systems. Rich mines and every physical advantage were on the side of Spain. A free trade, but few people, and a small slip of half-drowned country, on the side of Holland. A free trade turned the scale, and bestowed a double victory on the dwarf. Is not this fair trial more weighty towards ascertaining truth, than a complexity of facts and speculations, so useful to monopolies and exclusive privileges, but so inimical to plain honesty and common justice? It proves that a balance of trade in imported commodities, excites industry by increasing enjoyments, and by furnishing a surplus for re-exportation; and that it augments wonderfully both national wealth and strength. The abundance of commodities invited by a freedom of commerce, enables the re-exporting merchant to make up cargoes fitted for their destination, more speedily and cheaply, than in ports stripped of variety by commercial restrictions; and to undersell competition by a vast economy of time and expense.
The Committee proceed to say "there is more specie in the United States than at any former period, but it is not currency, because it is unemployed." We have then already obtained a redundancy of specie, and the policy it has suggested to the Committee, is to increase it by exporting more than we import; and to diminish its business of facilitating exchanges, by prohibiting the importation of commodities. If the existing redundancy is a useless surplus, would not its augmentation, if it can be augmented by a domestick monopoly, produce another useless surplus? If with a surplus of currency beyond our wants, national distress has appeared, it is demonstrated that the remedy for national distress is not deposited in a surplus of currency; and the speculations in reference to a pecuniary balance of trade, having such a surplus for such an end in contemplation, are of course exploded. The proposed monopoly system also says, that we possess a great surplus of agricultural commodities, which, though not entirely unemployed, like the surplus of money, is yet by abundance considerably diminished in value; and in its patriotick enthusiasm, it has humanely prohibited the importation of more tobacco and other articles, lest this agricultural surplus should become quite useless. The same reason was still stronger for prohibiting the importation of more money, because we have already a useless surplus of it. Instead of candidly acknowledging that a surplus or redundancy either of money or agricultural products must be governed by the same commercial laws, the Committee press into view the latter disguised in the garb of a calamity, and seize upon the prevalent love of money to make us believe that a redundancy of money is a blessing, and to hide, with this delusion, the evils brought upon mankind by monopolies and exclusive privileges. Their doctrine is this. "Continue and increase commercial restrictions, and tax agricultural products because they are of very little value, to increase a surplus of specie, already of no value at all for want of employment." It would be a better policy to bring in more flour, cotton, and tobacco, as these commodities might have been of some use, instead of laying in the vaults of a bank, like a dead nabob in his funeral robes. But how did this useless surplus of specie get into the United States, if the balance of trade in that commodity is against us, and why is it not employed as currency? The answer to the first question cannot be very conclusive; we cannot unravel the labyrinths in which money travels; custom-house computations are uniformly erroneous; the prices at which commodities actually sell, can never be ascertained; whether this useless surplus of money has been brought here by our own commodities, or by the re-exportation of foreign goods, or by the sale of bank and debt stock to foreigners, we cannot tell; we know, however, that it has not come gratuitously. But the answer to the second question is more satisfactory. The imported specie is useless as currency, because we have more bank currency than we can find employment for, and because the expulsion of foreign commodities to a considerable amount, has correspondently diminished the use of money for facilitating exchanges. If the dead specie surplus, said by the Committee to exist, has been produced by the sales of stock, commerce will inevitably seize and scatter the accumulation, unless we should be saved by a beneficial bankruptcy of all our banks. The capitalists look with dismay at this possibility, because it will break to pieces the master wheel of the property-transferring machine; and therefore they strive by prohibitions and restrictions to deprive the nation of a free trade which would bring in comforts and wealth for individuals, lest it should seize the specie deposits of banks, and destroy a fiction for transferring property. Their object is to regulate commerce for the attainment of two ends; one, to prevent it from assailing bank deposits; the other for preventing it from supplying individuals with necessaries, and investing capitalists with a privilege of doing so at double price. Thus it happens that they advise us to destroy the best and most enriching species of commerce, that of exchanges, and to sell our products for specie, though they tell us that this specie cannot find employment. By destroying our commerce, they hope to save their banks; by prohibiting importations, they will certainly increase their capitals. And thus the banking and manufacturing capitalists are united by a common interest, the magnitude of which is sufficient to awaken the great talents they possess, and to excite all the industry and perseverance they have shown. If the expedient of protecting duties is able to keep the specie deposit in the banks, and prevent their currency for transferring property from blowing up, it would be able to supply the nation with a currency chastely devoted to the end of exchanging property, and render it unnecessary that a currency for making property tributary to capitalists, should any longer exist.
We are startled to hear from the advocates of the protecting-duty system such positions as these.
Money is so scarce, as to cause general distress, and to impede both agricultural and manufacturing improvements. It is so scarce, as to disable the people from paying taxes, and to force the government to borrow. It is so scarce that debtors are unable to pay their debts. Money is so plenty, that a great sum of specie is useless for want of employment. It is so plenty, that capitalists know not what to do with their abundance. It is so plenty, that loans are obtained by government at a lower rate than ever was known before, and individuals who can secure re-payment, can borrow below the legal interest.
But a little reflection will convince us that these apparent contradictions are all true. By adverting to the legal arrangement of the community into monopolists and contributors to monopolies, they may be reconciled. With the contributors money is scarce; its scarcity has caused general distress, because the contributors constitute by far the greatest portion of the community; its scarcity bears hard both upon agriculturists and mechanics, because both belong to the class of contributors; its scarcity disables the people from paying taxes, because they also belong to the contributing class; and disables debtors from paying their debts, because by incurring these debts they have not been able to escape from the contributing to the receiving class. Now let us turn our eyes from that side of the canvass, on which about ten thousand of us, out of ten thousand and one, are depicted, to the little smiling fat group which complains of a redundancy of money. Alas! say these gentlemen, money is so plenty, that we have a large sum of specie which is not currency for want of employment. Capital is so abundant as to stifle enterprise and speculation. It is so abundant, that when loans are called for, capitalists jump over each other's heads in a contest of underbidding. It is so abundant that they rejoice in the public calamity of borrowing. It is so abundant that they buy stocks at enhanced prices.
Our surprize vanishes upon discovering facts, at a glance so irreconcilable, to be true; but it returns with tenfold force, and rises up to amazement, upon being told, that the omnium of these facts, proves the wisdom and justice of increasing both this scarcity and this plenty of money, by a new bonus to capitalists. As extravagance, exclusive privileges, and monopolies have already involved the great bulk of the nation in distress, scattered poverty, disabled the people from paying taxes, and sorely afflicted debtors; and as they have already created a superabundance of capitalists who know not what to do with their wealth; a remedy for the mischief, and not its aggravation, seems unavoidably to present itself. When the fat-sow monopoly, confesses that she has swilled wealth, until her corpulency had become distressing, it would be like murder to pour more down her throat, and run the risk of bursting her. What should we think of a physician who should propose to make the nose larger than the whole body, by converting the aliment of the other members to its growth? Would he be a bad model of the politicians who have bloated up a capitalist interest to a pecuniary plethora, by starving down the other members of the body politick, to a pecuniary famine? Can a republican party have been this quack? Will a republican party increase the political nose, until its necessary amputation may endanger the life of the patient?
The Committee use many expedients to draw off our attention from this political caricature; this sport for capitalists and death for the rest of the nation; and by huddling assertion upon assertion, leave us to imagine that there must be some nostrum in the multitude of medicaments, able to reduce the monstrous nose to a natural size, or at least sufficient for the present to hide it. They sometimes endeavour to make us fall in love with the huge nose, by telling us that when it is made still larger, all the other members may feed upon it; and that though it starves them now, yet it will afford them a delicious repast, like the tail of a cape sheep, so soon as it has grown to a sufficient size to fatten all the rest. At other times, they ascribe the leanness of the other members, not to the excessive fattening of the nose, but to certain conjurations of necromancers three thousand miles off, able to impoverish all the members, except this fortunate nose. But the Committee have neither told us, how it has happened that British machinations have been able to starve all our social interests, except the capitalist; nor how this one interest has fattened up to excessive corpulency, in spite of these machinations. Have the British been giving bounties to this interest, whilst they were endeavouring to impoverish all others? Let it then apply to its benefactors, and say, "you have wisely made us enormously rich at your own expense, and therefore you will act still wiser, by making us still richer." How would the British regard such an argument, though attended with an assurance, that a compliance with it would at some future day increase their wealth and prosperity? If the great wealth of the capitalists were not extracted from the British, let them say from whom it was extracted, and address the same argument to the prodigal donors. Should it be of domestick origin, it must of course result, that not British, but domestick machinations have created an enormously rich unproductive class, and thereby inflicted upon productive classes a very considerable degree of distress.
In pursuance of the policy of diverting our attention from the phenomena of exuberant capitals and a general distress, the Committee have thrown out other lures. "The importation of foreign goods was never so great as when our embarrassments were produced." In the whole report of the Committee there is no hint that a legal accumulation of capitals in a few hands, has had the least influence in producing the national distress. A pecuniary inquiry, if its object was truth, could not have overlooked the largest pecuniary item, having a more extensive influence upon our pecuniary situation, than all others united. Whilst the advocates of exclusive privileges pretend to so much skill in calculation, and have been prodigal of figures, it is marvellous that they, and more marvellous that a Committee of the legislature, raised to find out the causes of our distress, should have been so covetous of both, as to have passed over with the most cautious silence, our enormous legal or artificial accumulations of capital. But a fair accountant will confront this item, in searching for the causes of our distress, with that of an importation of foreign goods. Suppose we change the assertion and say "the importation of foreign exclusive privileges, monopolies, and modes for accumulating capitals in a few hands, was never so great as when our distresses were produced." We are then left at liberty to consider which of these contemporaries contributed most towards producing our distresses. There was certainly a new procreative power disclosed by an importation of foreign goods, if that produced them; and it is even miraculous, that an importation of property, at least equivalent in value to its emblem, money, should suddenly have reduced us to distress, after we had flourished many years under such importations, less restricted, and often larger in proportion to population. But there is nothing either new or miraculous in the capacity of a system of extravagance, exclusive privileges, and monopolies, to produce national distress. How could it happen that exchanges of property with foreigners should ruin us, but that transfers of property to capitalists should do us no harm? In one case we receive an equivalent estimated by ourselves; in the other, we receive no equivalent at all. Is sudden ruin from a great importation of property more likely to ensue, than ultimate ruin from our progressive policy of transferring property from industry to capitalists? The original funding system, subsequent loans, a flood of bank currency, the bankruptcy of some banks, and the refusal or inability of all to pay their debts, the extravagance of our governments, loans, pensions, and the great increase of protecting duties, in many cases amounting to a prohibition, are so many instruments for cutting off every species of property from industry, to enrich capitalists, as the Abyssinian fattens himself with steaks cut from living cows; and this transferring property now assures us, that the pain and anguish at length produced by its operations, were occasioned by an importation of foreign goods. As such an importation was unavoidably contemporary with the catastrophe of the property-transferring policy, it gave the Committee an opportunity of exclaiming, Aha! we have detected the thief who has stolen our domestick property. Foreign property has done the deed, and reduced us to distress. We have, against this mode of stealing, the resources of eating, drinking, wearing, exporting and selling the thief himself; but we cannot eat, drink, wear, export or sell our capitalist, our pension, our banking, or any of our exclusive interests.
But "the importer's ledger ought to settle the question, and in the cases of bankruptcy foreign creditors appear." The doctrine of the balance of trade not being sufficiently intricate and dark for the purposes of exclusive privileges and monopolies, they are driven by fear, and by the want of arguments more suitable for examination, to appeal to a perfect camera obscura, hoping that it may afford some gleam sufficient to turn objects upside down. What a tenure is this for our liberty and property? Both ought to be determined by importers' ledgers in the opinion of the Committee, which ledgers are to decide whether exclusive privileges and monopolies are their friends or foes. Did the Committee really intend that the nation should examine and settle up these ledgers, to be able to estimate the evidence they might afford; or that our liberty and property should depend upon their own intuitive or inspired conviction, that there is decisive evidence hidden in these ledgers in favour of monopolies and exclusive privileges? Instead of endeavouring to extricate this evidence from its numerous dungeons, it may be wiser for the nation to open a ledger between itself and the several modes for transferring its property to capitalists. The items are few and notorious; and the balance between the nation and monopolies and exclusive privileges may be discovered with infinitely more facility, than a security for our liberty and property in importers' ledgers. The following might be the form of an account:
Capitalists and exclusive privileges to the nation, Dr.
To property transferred by banking, loan-
ing, pensions and protecting duties
annually about — $30,000,000
Credit, 00,000,000
Here is a plain loss to the nation of six hundred millions of dollars in twenty years. Can the importers' ledgers possibly contain any thing to prove both that it ought to be continued and even increased? But the estimate is too low, because the property-transferring policy ought to be charged with so much of the extravagance of our governments as it has caused. This item is somewhat harder to estimate than the others, because it is blended with the blessings of government; but the others return no compensation to the people either physical or moral. They both take away property and aggravate moral evils.
I have laboured in vain to discover, what bearing the appearance of foreign creditors to claim some dividend, in our cases of bankruptcy, can have upon the subject. Credit, like currency, is governed by the common law of commerce, and both are liable to be counterfeited. If we could give to foreigners our bad bank money for goods or specie, it would not be a bad trade. In giving them bankrupts for goods or specie, the trade is the same. But in the trade of bankruptcies loss and gain is reciprocal, and it would be as difficult to find how the balance stands, as to discover and hold the long-sought and yet unfound balance of trade, or the conclusive evidence said to reside in the importers' ledgers. A free nation would never submit to a plain system for transferring property; and, as it was therefore necessary to make the protecting-duty item of this system, as obscure as possible, I do not know that the Committee could have found better arguments in its favour, than a balance of trade, importers' ledgers, and casual bankruptcies.
"We have only the miserable and ruinous circulation of a currency for remittance to foreign nations. They hold the coin and we hear it jingle." The contradiction in these very short assertions is palpable. How can we make remittances in coin which foreign nations hold? It is palpable also compared with the assertion "that there is more specie in the United States than at any former period, but it is unemployed." How is all this? Foreign nations hold the coin, yet we hear it jingle. We hold more coin than at any former period, more than we can employ, yet we remit it to foreign nations. Was a pretty antithesis a temptation not to be resisted? Did a jingle of words cause the Committee to be content with a jingle of facts? Instead of our having a currency for remittance to foreign nations, we abound in a currency which will not answer that purpose; which cannot leave us; which is not subject to the honest common law of universal commerce; and which sticks to us for better or worse, as a bad wife sometimes does to her husband, long after he wishes she was dead. We have, in fact, but little of that kind of currency in circulation, which serves for remittance. It is true that we have heard the jingling of this kind of currency in the newspapers, and the Committee have rung the same bell, but our ears are thus regaled, merely for the purpose of keeping up the credit of that kind of currency, not liable to be remitted to foreign nations, and so happily employed at home in transferring property and creating capitalists and paupers. A free commerce would bring the musical kind of currency into our pockets, and diminish the bad effects of the transferring currency, by exposing it to the wholesome discipline by which commerce regulates the value of specie. To evade this discipline, the Committee propose to impose further restrictions upon commerce, lest it should lay hold of the specie deposits of banks, and destroy the credit by which they are enabled to transfer so much property. This is necessary to keep up the exhilarating jingling, which dispenses dividends of transferred property, and will also acquire an additional monopoly under the pretext of supplying us with manufactures, as its predecessor succeeded under that of supplying us with money. If remitting specie, to acquire what specie represents was an evil, free commerce would certainly remove it, but the property-transferring policy is fraught with the essence of modern tyranny, and admits of no remedy except that which puts an end to the power of doing mischief. "The excess of exports over imports is the rate of profit." However impossible it may be to ascertain this excess (since every calculation is deranged as soon as it is made by the perpetual fluctuations of commerce) it is not hard to discover the sophistry of the position itself. Both exports and imports are property, of which money is the emblem. Suppose trade was carried on by importing and exporting the emblem only of the things it represents. Where would be the misfortune of importing regularly more money than we exported? It would lie only in its exuberance, depreciation, and inutility, arising from the inhibition to exchange it for foreign commodities. If there is any difference between trading in the emblem, or in the substance itself, it is in favour of the latter, because a surplus of the emblem would be less useful than a surplus of the substance. The latter affords more comforts, excites more industry, and employs more shipping. The substance is also as re-exportable as the shadow. A trade in the substance may be permanent; in the shadow it cannot long exist, on account of the equalizing power of commerce, and the depreciating nature of money. Being only an instrument of exchanges, its office cannot be impaired or destroyed, without impairing or destroying commerce itself. A permanent surplus of money, beyond its instrumentality for facilitating exchanges, cannot be gotten and held if commerce exists, because when its plenty makes it less valuable than in other countries, the exuberance will be drawn off to the countries where its scarcity has made it more valuable. In like manner a permanent surplus of the commodities represented by money, cannot long exist, because the same power which acts upon the emblem, will act upon the things represented by it. In this view the importation of more money or more commodities than we export, is equivalent. Commerce acts in the same way on either surplus by reexportations, and profit results from the greater degree of mercantile skill and industry inspired by liberty. The question therefore is whether it is better to leave the regulation both of imports and exports, either of money or the commodities which it represents to the common law of commerce, which other nations may occasionally disorder but cannot repeal, and which must continue to act powerfully in concert with individual interest, in spite of fraudulent interpolations; or to resign their regulation to two monopolies — to banks, as to the regulation of currency; and to protecting-duty capitalists, as to the regulation of the price of commodities. The coalition between commerce and individual interests by perpetually labouring to diffuse comforts, wealth, and happiness, invigorates industry. The labours of the combination between their privileged rivals are devoted to a monopoly of comforts, wealth, and happiness, discourage industry, and generate pauperism. But, say the Committee, "no other remedy for our troubles has been offered, but an extension of the restrictive system, which they propose as a forlorn hope." Among the assertions hazarded in the report this is the boldest. Does not this controversy propose a remedy? Do the advocates of this remedy acknowledge it to be a forlorn hope? Has public opinion remained torpid longer than the dormouse, or is it entranced by the musick of exclusive privileges? On the contrary, is it not distinctly groaning under the whips and scorn of the various modes of transferring private property by legislative acts? It is one of the greatest misfortunes to mankind, that the justice which can only be rendered to nations by frugality in governments, has never been able to find a shield which could not be pierced by the arrows of wit, cunning, and ridicule. The tribes of patrons and clients, unite their talents to caricature every proposition suggested by benevolence to nations, and the Committee with contempt assert, that no remedy for our troubles, except their own forlorn hope, has been offered. Such arts constitute the science of modern civilized tyranny, and are therefore universally opposed to advocates for frugality, and its offspring, civil liberty. Even at the head spring of hope, in legislative bodies themselves, the refreshing water of frugality, is already muddied by those impurities which a blind confidence will for ever generate. Are legislative wages to be increased? Arguments abound: are they to be reduced? None can be found in favour of the frugality by which the public confidence was won. Speeches and professions are made; delays are practised to feed the public hopes with unfruition; and when these hopes are tired out and blunted, some member whose local influence is secure, strengthens his legislative influence by defeating the proposition. He addresses an internal sympathy; he easily appeases an external opposition; and he welds to himself all who can be persuaded that they deserve the salaries they exact. Among the artifices practised to smother frugality even in the womb, is that of mingling legislative wages with moderate salaries, in order to make good objections against diminution in one case, obstacles to reform in the other. The most plausible argument in defence of high legislative wages, is, that money buys talents; but it also buys corruption, fraud, ambition, avarice, and legislative patronage. Sound policy ought to take her stand between two extremes; one, a rate of wages so low as to expel talents; the other, a rate so high as to awaken vices. We may discover the golden mean by comparing facts. When the rate of wages was lower than at present, the abuses of extending unconscionably legislative sessions; of trying private suits without any judicial powers to ascertain truth, under the pretext of their being instituted in the guise of petitions; of patronising individuals at the public expense; of creating a horde of pensioners; and of corrupting election by flattery, deceit, and a waste of public money; were infinitely less abundant. To determine whether the nation has obtained an accession of talents, integrity, and patriotism, by an increase of legislative wages, former legislatures must be compared with the present. Will the former Federal and State legislatures be thrown into the back ground by this comparison? Under which policy, that of moderate or high legislative wages, did the nation enjoy most prosperity? Which has nourished most extensively the oppressive policy of transferring property? What power can be more tyrannical than this, or more extensively excite those arts by which election itself, our last hope (may it not be forlorn) is corrupted, and converted into an instrument for avarice and ambition? What do high wages beget but parties and pay, zeal and adulation, fraud and usurpation? An elective government thus poisoned, communicates the infection to the people, and is itself the cause of the spreading malady. Will its health be restored by the poison? Will its integrity be increased by bribes to become vicious? Was the situation of New-York, arising from an enormous legislative patronage, through the medium of a dependent and party council, no evidence of the consequences to be expected from such a policy. If it pollutes a State government, will Congress be purified by an absolute power over property, and by patronizing itself with high wages and protracted sessions? Our distresses answer the question with melancholy veracity. Must not legislatures pull the mote out of their own eyes, before they can introduce a general system of frugality? No policy can be worse than that of bribing representatives by high wages, to entail lasting evils upon their country; and therefore an inquiry how far we are falling into it, cannot be superfluous.
As the remedy for over-grown power, constantly proposed, is more power to suppress the disorders it produces; so the remedy for exclusive privileges, as constantly proposed, is more exclusive privileges, under pretence of removing the oppressions they have caused. With some inaccuracy the Committee have called an extension of the restrictive system, "a forlorn hope," as it is by no means so to capitalists, whatever it may be to the rest of the nation. It will certainly produce both sweet and bitter fruits in great abundance, and we are only to discern how they will be distributed.
The rival remedy for our troubles, so insignificant in the eyes of the Committee as to be wholly suppressed, although it has been often enforced by a multitude of able writers, and some patriotick statesmen; and although it was the basis of two federal administrations, which diffused more happiness and prosperity than can be otherwise obtained; is reducible to a few principles, which may be comprised in a few words. Return to frugality; restore a free trade; abolish exclusive privileges; retract unjust pensions; surrender legislative patronage; surrender, also, legislative judicial power; and vindicate the inviolability of property, even against legislatures, except for genuine national welfare. Not that spurious and thievish species of welfare, which usurps forbidden powers and steals private property, but the true kind, honest enough to discern a distinction between devoting rights and property to the infernal deities, ambition and avarice, or leaving both to the real owners.
The Committee have closed their proem by a protestation "that they have no predilection for foreign opinions, and are less desirous to force facts to conform to reasoning, than to apply reasoning to facts; and therefore trace the principles of political economy to the conduct and to the interest of the individuals who compose the nation." Such protestations are the children of either innocence or guilt. If the Committee were conscious that their opinions bore no resemblance to a foreign policy, where was the necessity for a protestation, that they had no predilection for foreign opinions? If they were conscious that foreign opinions and practices had really suggested the policy they have so ardently recommended, how could they protest that they had no predilection for them? They should have boldly asserted that the British policy was the best in the world. In this controversy protestations have abounded. The Committee have protested that no remedy for our troubles has been offered, except their forlorn hope of extending the restrictions upon commerce. Farmers' friends and merchants' friends, having slept very quietly without showing the least sympathy either for farmers or merchants, are now bred in abundance by the plastic power of love, either for the long-forgotten farmers and merchants, or for bounties and exclusive privileges. So very affectionate are these new friends, that some of them who know nothing of farming or commerce, zealous to correct the errors of those instructed by experience, give them long calculations and laboured directions, even at the risk of being very ridiculous. What gratitude is due to such heroic adventurers, merely from motives of disinterested friendship! But lest such conspicuous merit should be overlooked, protestations of patriotism accompany those of affection for farmers and merchants. Our protesters are for ever declaring, that they hate foreign opinions, that they abhor the British policy, that they love our own free principles above all others, and that public good is their sole object, without the least mental reservation of a local nature, or in favour of capitalists. If the farmers should undertake to instruct these protesters how to manage exclusive privileges, and augment artificial capitals, it would excite their gratitude or derision. I know not a better emblem of protestations, than hiding freckles by paint; and as it is extremely important to discover the foreign freckles with which we are disfiguring our fair republican countenance, I shall endeavour to wash off a little of the paint of protestation that they may be seen.
Suppose the Committee had recommended monarchy, but protested at the same time, that they had no predilection for this foreign opinion. Would the protestation have rendered monarchy not only harmless but nutricious to our republican principles? A policy for transferring property by exclusive privileges, pensions, bounties, monopolies and extravagance, constitutes the essence of the British monopoly, and is sustained by a conspiracy between the government and those who are enriched by it, for fleecing the people. This policy is the most efficacious system of tyranny, practicable over civilized nations. It is able to subject the rights of man, if men have any rights, to ambition and avarice. It can as easily deprive nations of the right of self-government as it can rob individuals of their property. It can make revolutions re-organizers of the very abuses they overturn, and merely a wheel for turning up or down combinations equally oppressive. What is the difference between recommending the form or the substance of the European monarchies? Would it not be better, like the Lacedemonians, to adopt the form of monarchy without its substance, than to adopt its substance without its form? It is said by the holy alliance, that both the form and substance of all monarchies, however corrupt or oppressive, ought to be maintained, because they are established. By an alliance, not less holy, between our abuses, it is contended that these also ought to be maintained, because they are established. In both cases reformation is forbidden upon the same ground. England conceals the crimes of her policy by an impartial execution of her laws, but when the judicial ermine is stripped from her legislation, though it proceeds from a government called representative, the strict execution of her partial laws, are visibly an extension of the oppressions and frauds they are calculated to perpetuate. The execution of laws contrived for transferring property, only brings men to suffer the torture of a legal rack.
The British parliament, some years past, resolved, "that the influence of the crown had increased, was increasing, and ought to be diminished." Is it not at least as true here, that the influence of exclusive privileges and extravagance in our governments, has increased, is increasing, and ought also to be diminished? Which is most oppressive, the influence of one man, or the influence of a combination between several thousand men, to rule and plunder a nation? Which can be most easily overturned, a single-headed or a many-headed tyrant? In England, the instrumentality of royal influence in extending the policy of transferring property, was the evil which the parliament believed required diminution: but such was the force of this influence, that the parliamentary conviction has never been able to check it. Here the instrumentality of capitalist influence, has been able hitherto to suppress the national conviction that it ought to be diminished. Does its strength and success prove the wisdom of making it stronger, that it may become, like royal influence, irresistible even by the legislature? In England, the nature of the government requires some regal influence, and therefore the parliament only resolved, that it ought to be diminished: here, the principles of the government forbid any fictitious capitalist influence, and therefore it ought to be abolished. In England the abolition of regal influence would be a revolution; here the establishment of a privileged influence, would also be a revolution. I blush to behold a love for the principles of limited monarchy, inducing a British parliament to speak truth; and look with sorrowful disappointment for a similar proof of affection for our constitutional principles from republican legislatures. Instead of resolving that the several modes for creating a moneyed aristocracy, have increased, are increasing, and ought to be abolished, or even diminished; and not content with a tacit approbation of this revolutionizing policy, they have laboured actively for its introduction. The Committee protest that they have no predilection for it. They only propose to drive it, not away, but towards its oppressive English completion.
The machine for this end is worked by "fictitious capital," which turns out the same effects, by whatever wheels it is kept in motion. But the machine itself is not a fiction. It is a political loom driven by the steam of avarice, manufacturing tapestry for some and dowlas for others. Governments shoot the shuttle to weave golden garlands for themselves; and if the distribution of the two manufactures is complained of, they assert their patriotism by protestations, and their confederates exclaim, "a government of our own choice, like kings, can do no wrong." Though the capitals of exclusive privileges are no fictions, but woeful realities to those from whom they are drawn, let us use the terms, real and fictitious, to illustrate a necessary distinction. Fraudulent and honest, or forged and genuine, would have been better phrases, but I conform to common parlance. The thrift and comforts conferred by real capital, are general; by fictitious, partial and local; one is free, the other forced; but the generick difference lies in the chief quality of each; real capital being an accommodation in exchanging property, and fictitious an instrument for transferring it. The artifice of blending the characters of these two kinds of capital, like an attempt to conceal the infamy of a thief by showing him in good company, has deluded mankind by a superficial resemblance, to overlook the essential quality and primary design of fictitious capital. Even writers of high reputation have arranged credits between individuals, under the head of fictitious capital; such as bonds, notes, and bills of exchange; but they ought not to be placed there, unless they are forgeries. If they are genuine, they are honest exchangers of property, being merely an evidence, that for property delivered, other property, or its value, is to be returned. These papers are neither local, nor their acceptance compulsory, like paper money. Their credit arises from the property of individuals subject to their redemption, and is exposed to the decisions of free will. Whereas the credit of every species of fictitious capital, arises from delusion, and is more or less compulsory. Here we discern an impropriety in applying the term "confidence" indiscriminately to these two kinds of capital. Applied to the genuine species, including bonds, bills, and notes, it implies a belief, that the debtor possesses sufficient property to redeem his obligation; applied to the fictitious species, it implies a belief that the government will sustain its own fiction or forgery. A confidence in power, sustains fictitious capital. A necessity, caused by the laws for the introduction of fictitious capital, unites with power to give it currency, though we know it to be a vehicle for conveying our property into the pockets of others. An exclusion of real capital, an increase of fictitious, and an aggravation of taxation, unite to create this necessity. But this necessity is not confidence, though called so by those who inflict it, to transfer the odium from their own fraud, to the folly of a community; and to hide the compulsion under a veil like free will. Whenever the circulation of fictitious currency or capital is obstructed, governments, conscious that this property-transferring machine works for the conspiracy by which it is fabricated, protect their associates; not because they possess, but because they do not possess the public confidence. This legal interposition to enforce a system for transferring property, is ingeniously said by the Committee, "to trace the true principles of political economy to the conduct and interest of the individuals who compose the nation." The most eminent political writers have united in an opinion, that to govern too much is an error, and even tyrannical. How can government be pushed further, than into the very mouths of individuals? What other power can despotism need, after it has obtained a complete control over all the physical interests of the individuals who compose a nation? It boasts in the United States, that it leaves the mind free. The criminal extended on the rack still retains the freedom of his mind. Though confined in a dungeon upon bread and water, he may be of what religion he pleases. So bodies, impoverished, and sometimes starved by being encircled with the magical chains of exclusive privileges, may boast under the hardship of deprivations, that their minds are still free; that they can adore, though they cannot enjoy, those republican principles, which teach that governments ought to be instituted to secure the right of providing for our own wants, according to our own will, and not according to the will of the government; because such a power in the government, however it may leave the mind speculatively free, is a real despotism over both mind and body, since they are indissoluble except by death.
Tyranny is wonderfully ingenious in the art of inventing specious phrases to spread over its nefarious designs. "Divine right, kings can do no wrong, parliamentary supremacy, the holy alliance," are instances of it in Europe. "Common defence, general welfare, federal supremacy and political economy," are impressed into the same service here. When the delusion of one phrase is past, another is adopted to work out the same ends as its predecessor. Political economy is represented as a complicated system of deprivations and compensations, or of getting and giving back money. In the multitude of transactions implied by this notion of political economy, will none of it stick to the fingers through which it passes? Will the privileged bands of brokers get nothing by this economical traffick? Will the officers necessary to enforce this species of political economy, require no salaries? An economy exposed to endless frauds, and incomputable expenses. The pretence "that though it inflicts deprivations, it bestows compensations," is one of those gross impositions upon the credulity of mankind, believed upon no better grounds than the stories of ghosts and apparitions. In the history of the world, there is no instance of a political economy bottomed upon exclusive privileges, having made any compensation for the deprivations it inflicts. The Committee have likened it to household economy. What should we say of the household economist, who should keep a train of idle servants, surrender to them all his keys, entrust them with all his money, and buy of them all his necessaries at double prices? Would not his system of economy be the same with that of a nation, which creates a train of idle capitalists by exclusive privileges, surrenders to them all the keys of individual interest, intrusts them with its currency, and buys of them its necessaries at double prices? The similitude fails according to the Committee, because we choose our governments. But the individual also chooses his servants. Let us try it in another aspect. Suppose a train of servants, agents, or representatives; call them what you will, should offer their services to a wealthy individual, upon condition that they should have the power of prescribing to him in all his wants, of prohibiting some of his comforts, and of enhancing the price of others; would he believe that the proposal was made to advance either his wealth, liberty, or happiness? Again: Suppose our household economist had employed a train of servants, but upon the suggestion of another train desirous of getting into their places, that they were deranging his affairs, he should displace them and employ the friendly informers. If the new servants should embarrass his affairs more than the old did, would he say to them, "well done, ye good and faithful servants?" In all these views, household economy is no bad mirror for reflecting that species of political economy, managed by successive parties, as an engine for transferring property.
The Committee have untirely overlooked by far the most important branch of political economy, namely, the economy which teaches nations not to expend the principles which secure their liberty, in search of money. If we waste this treasure, under the idea that we shall thereby increase our treasure of currency, capital, or money, we should imitate the man who bestows the best part of his estate upon a swindler, because he promises to improve the residue. A waste of our republican principles certainly involves a waste of our money. Have the monopolies, extravagance, and exclusive privileges of European governments, saved the money of the people? No, but it is said, that the loss, both of liberty and money, caused by the political economy which minutely regulates the interest of individuals in Europe, proceeds from the badness of the governments, and that ours, being a good one, it can guard abuses against abuse, and make tyrannical principles the saviours of civil liberty. This very unpromising experiment, to make a blessing of actual tyranny by theoretical liberty, has never yet succeeded any where else, and the picture drawn by the Committee of the distress to which it has already conducted the United States, is a strong indication of the improbability of its success here. The endeavour to guard abuses against abuse, seems to be utterly hopeless, from our own experience. Specie payments was the guard against the abuse of banking, but the guard sleeps whenever the abuse requires it. The protecting-duty abuse, and the abuse of exclusive privileges, are guarded against abuse by our good theoretical governments, exactly as they are by the bad theoretical European governments. They are extended. The abuses of extravagance and borrowing, can grow under our governments, as fast as under those of Europe. In fact, the introduction of abuses, is an infallible prophet of their continuance. The nation which imagines that a government which introduces, will not foster them, or that a good government can by provisions convert fraud into honesty, relies upon a moral impossibility for the preservation of its liberty.
It is confessed, that the predilection of the Committee for foreign opinions or abuses, only extends to some of the modes for transferring property, by monopolies and exclusive privileges, without expressing an approbation of all. They have not approved of the regal, hierarchial, and sinecure modes, nor have they directly recommended chartered companies to carry on particular branches of foreign commerce. It may, however, be inferred from their approbation of a law charter to capitalists, conveying an exclusive privilege for carrying on many branches of domestick commerce, that they would have no objection to its own brothers and usual associates. But whatever modes of monopoly and exclusive privileges for transferring property they may love, and whatever modes they may hate, they have strenuously recommended one, which has become obsolete in England. Monopolies of domestick commerce, like our restrictions upon the importation of tobacco, have been tried and deserted in that country, and we are only dressing ourselves in our father's old clothes.
Chaptal observes, "that the advantages which England derives from a system excluding competition in the markets, are, in preserving the workmanship which supports her population; and in being able to tax every thing that goes immediately into internal consumption." The superiority of our workmanship has not awakened a jealousy of its being copied by other nations. Our population is supported by agriculture, and this motive for imitating the English policy, could not be urged by the Committee. Its remaining advantage of taxing every thing which we consume, though it would not have advanced their object to make the most of that argument, is yet prospectively eulogised by a pleasant view of the English excise system, which, like the second curse inflicted upon the Egyptians, feeds upon mankind. Through a dark avenue of intimations, cautiously planted here and there in the report, and fearfully suggesting the deficiency of revenue resulting from the restrictive system, we clearly discern the English excise system, or the policy of taxing all internal consumptions. But out-stripping their model, the Committee propose to pay this excise twice over, though the English writhe under the agony of paying it only once. To get internal commodities for taxation, we are first to pay an enormous excise to capitalists, and when we come to consumption, another excise is to be paid to government, to supply the loss in the customs, produced by the first tax. Thus we shall be doubly exposed to this dark, expensive, vexatious, and oppressive mode of taxation. Whereas commercial restrictions in England do not enhance the prices of home consumptions to give an excise to capitalists, as their manufactures are cheaper than any they could import; and this cheapness has suggested to some other nations, like ourselves, prohibitions and restrictions upon English competition. As England undersells other nations, they cannot undersell her: wherefore she only pays an excise to her government, and the exclusion of foreign competition bestows no bounty or excise upon her capitalists. Their exclusive charter to manufacture certain articles is now a dead letter, but ours is a more enormous tax, than could be inflicted by conferring on a mercantile company, an exclusive privilege of carrying on any one branch of foreign commerce, because it embraces internal necessaries to a far greater extent, which are less capable of being renounced than foreign importations. Our sweeping domestick monopoly is exactly of the same character with that established by several despotick English kings, by grants or charters to individuals. The Committee may therefore speak correctly, when they say, that they have no predilection for foreign opinions. In this view of the subject, they propose to introduce a species of monopoly which the English do not retain; and to discourage a species of industry, which the English have endowed with a monopoly. Not the manufacturing capitalists, but the landlords are enriched by a monopoly. Their exclusion of foreign manufactures does not enhance the price of domestick; but the exclusion of foreign corn does enhance the price of bread, and constitutes a tax or excise paid by its consumers; having the effect of a bounty to landlords by raising rents. But though the Committee deviate from the English policy, in their selection of the interest to be patronized, by sacrificing the land-owners to the capitalists, instead of sacrificing the consumers of bread to the landlords, they adhere to the principle of their corn laws.
The exclamations with regard to the English are curious. In that country the whole tribe of abusers are vociferating, "Oh! how happy we are." The sufferers from these abuses are groaning, "Oh! how miserable we are!" Here, monopolies, exclusive privileges, and extravagance, hold up the English happiness for our imitation, and our patriots represent English misery as highly to be deprecated. Is it not curious that the same foreign policy should furnish two comparisons; one to prove that we are a weak and miserable nation; the other that we are the wisest and happiest in the world?
The before-mentioned foreign political economist, Chaptal, regarded by capitalists as such an apostle of their creed (a creed for making themselves great pecuniary dignitaries) that they have translated, condensed, and published his doctrines, observes,
I grant it would have been wiser for each nation to confine its ambition to cultivating and perfecting that kind of labour, for which nature has particularly designed it; but all wish to obtain all kinds, and hence have arisen those principles of an interest badly understood, which isolates and reduces them to their own individual resources. I well know that the laws of nature are fixed, and that sooner or later every nation will resort to that species of industry she has marked out for it; but the evil is done, and the deviation of this departure from true principles will be much more considerable than is generally supposed. A nation which receives its manufactured articles from abroad, cultivates with care the productions of its soil to exchange them in return; this culture would be naturally more neglected, when the exportation is lessened by the refusal to admit foreign manufactures in exchange. We are not ignorant, besides how difficult it is to contract, and to resolve to sacrifice capitals, and annihilate manufacturing establishments when a nation has once engaged in a false route; her hasty change from it cannot be expected, unless by the will of the government, and the nation's recollection of its own interest.
This is a fair statement of the question, by a monarchical economist. Excluding those arguments resulting from the difference between a monarchical and republican form of government, he yet allows the exclusive-privilege system to be a false route. He admits it to be only defensible when it has been established, and asserts that every nation will return to that species of industry marked out by the laws of nature. The United States are at the crisis when they must determine whether they will persevere in this false route, or retrace their steps whilst they can. If we persevere, the difficulty of retraction will increase as it becomes more indispensable. The government will be implored in the names of good faith, of humanity, of honour, and of other virtues, impressed by self interest into a mercenary service, to sustain every abuse, monopoly, exclusive privilege, and extravagance, for transferring property, which it may have fatuitously established; and as its administrators always get a share of the spoil, they will be excessively charitable. The mammoth would have continued his ravages for ever, if his having been created, was a good reason for his perpetual existence. The wolf must be suffered to prowl without interruption after prey, because he exists. The sheep should even be forced into his jaws. In this doctrine lies the secret by which political devourers of the earnings of industry have been fed and multiplied. It is the cement of the holy alliance between frauds, abuses, and oppressions of every complexion, and of every degree of malignity to human happiness. The cruelty of restoring their own to the people, and of preferring the happiness of a multitude to the luxury of a few, causes the crocodile power, to shed affected tears of compassion, and is used for alluring unwary victims to their ruin. Chaptal uses England as a scare-crow to frighten France, not out of, but into the policy, which he says is a violation of the laws of nature.
The Committee use England and other nations to frighten us into the same policy. And thus the folly is rolled from nation to nation, and generates abuses and tyranny in all its progress.
This doctrine of imitating errors has already conducted us to a crisis at which we must once more decide whether we will be a free nation. Freedom is not constituted solely by having a government of our own. Under this idea most nations would be free. We fought in the revolutionary war against exclusive privileges and oppressive monopolies. Will a monopoly which can tax internal consumptions to a vast extent, be less avaricious or less oppressive, than the similar monopoly of which the article of tea was designed to be the entering wedge? What a spectacle for the Deity do we exhibit? We beseech him to deliver us out of a gulf of distress, and plunge ourselves deeper and deeper into it. Are bad political principles infectious like the plague, and can our constitutions afford us only a quarantine against them of forty years, after which we are to use no precautions against their liberty-killing effect, in imitation of the apathy with which the Turks behold that body-killing pestilence?
Such is that species of political economy which pursues the money, the food, and the clothing of individuals. Like money, political economy has two souls. It can increase individual happiness by diffusing comforts, or it can destroy it, by accumulating capitals for a few. A species of political economy having the latter effect, is only another species of paper currency for transferring property and comforts. If no tyranny can be more complete and more tormenting, than one which dictates to individuals in all their comforts and enjoyments; which prohibits some and enhances the price of others to enrich capitalists; the argument that we ought to establish this tyrannical species of political economy, because other nations have done so, is precisely of the same value, as the argument for introducing monarchy, aristocracy, or any other species of oppression, because other nations have established them. If we are under the necessity of adopting bad principles, because other nations do not, or rather cannot adopt good principles, the progress of civil liberty is at an end. Must we go back to their bad political principles, because they are unable to proceed forward towards our good political principles? Why then, liberty must be abolished by tyranny; and honest political economy, the ally of the former, must be supplanted by fraudulent political economy, the most powerful ally of the latter. The mind has full evidence in the experience of nations, upon which to decide between the species of political economy which breeds monopolies, enriches capitalists, and deprives the people of comforts; and that which leaves to individuals the free use of their earnings, undiminished by any legal transfers, the contributions excepted, necessary to sustain a free and frugal government.
The whole benefit supposed by the Committee to lie in the spurious kind of political economy, is to result from an exchange of the balance of liberty and comforts which we ought to possess under our constitutions, for a balance of trade with foreign nations. To advance this speculation, a moneyed aristocracy, already created, is to be made so strong as to place in our mouths a great number of padlocks, lest we should consume our earnings, instead of giving them to this aristocracy, that it may secure the coveted balance. The pecuniary balance in foreign trade thus obtained, would either be transitory or settle upon a pecuniary aristocracy, which would absorb the powers of government. But the balance of liberty and comforts surrendered to obtain it, as well as the pecuniary balance between a moneyed aristocracy and the people, is lost for ever. It is constantly repeated (an old story in Europe) that the capitalists will produce a home market, and compensate all other interests by purchasing their labours with their own money. If the argument is a good one, there can be no such thing as a pecuniary tyranny. Aristocracies of all sorts are not pecuniary frauds, because they eat. Hierarchies, bishops, and monks, are blessings, as they eat also. All the European monopolies, exclusive privileges, and sinecures, being composed of men, far from being oppressive or tyrannical, are only political economy, because they afford markets for those from whom the money is extorted, by which their products are purchased. It is the very argument which has been used time out of mind by all those governments whose maxims we scorn, and whose oppressions we condemn.
There are features in the species of political economy proposed by the Committee, very much resembling those which we have sometimes seen in stay-laws, as they are called, but far more fraudulent. It proposes to meddle more deeply with the contracts of individuals, and to control far more extensively the freedom of will. These stay-laws have often enacted, that the property offered by individuals, shall be valued by disinterested appraisers, and that the creditor shall receive it at this valuation. By depriving the creditor of this right to judge for himself, he is frequently defrauded, and always compelled to take things badly constructed, which he does not want, or which he could obtain cheaper, had he retained the right of laying out his money according to his own judgment. The system of economy advocated by the Committee enables the capitalists to value their own goods, and compels the purchasers by prohibitions and restrictions, just as they were compelled by war, to purchase them at the valuation of the sellers, although except for this compulsion, they might have been gotten cheaper. The stay-laws are only defended as temporary expedients, and only borne because they are soon to expire. Our new system of political economy is proposed as a permanent policy. The stay-laws pretend to the benevolent intention of benefiting the poor, and relieving the distressed. Our system of compulsory political economy proposes to give bounties to the rich at the expense of the poor, to be exacted by their own consciences in the valuation of their own wares. The stay-laws are honest in theory, but fraudulent in operation. The compulsory system of political economy is foul in theory, and less fair in its operation between capitalists and consumers, than stay-laws between debtor and creditor. The stay-laws are a species of political economy, contrived to effect a transfer of property between individuals, without the free will which constitutes fair exchanges. The compulsory political economy of protecting duties, effects a transfer of property between a combination of capitalists and the rest of the nation, in which the freedom of will is all on one side. The valuation under the stay-laws may sometimes be in favour of the creditor. Under the compulsory system of political economy, it can never be in favour of the nation. The creditor, by a stay-law valuation, gets something for his demand. All that the capitalist gets by his own valuation, beyond the price at which the purchaser could have gotten the commodity, except for the compulsion bearing upon him, is a total loss to the purchaser, and an entire acquisition to the capitalist of so much of the purchaser's property. Such a system of political economy must obviously be more ruinous to all interests except the capitalists, than the stay-law economy is to creditors.
The principles of political economy, as advocated by the Committee, terminate in two conclusions; one, that of producing a pecuniary balance of foreign trade; the other, that this balance will be gained by manufactures. By the first, the honest species of internal political economy, must be destroyed; by the second, the efficacy of agricultural products in regulating the balance of foreign commerce, is wholly overlooked. However equivocal the term "manufactures" may be, yet, as the Committee have used it to distinguish between the different products of human labour, I shall adhere to it for the purpose of enquiring, whether those products to which they have exclusively applied it, are in fact more efficacious in acquiring a balance of trade, than those to which they deny such a power.
In ancient times, the products of agricultural industry greatly preponderated, and constituted nearly all the objects of commerce; in modern, though this preponderance is considerably diminished by the improvements in manufacturing, it must still be confessed, that they retain a considerable superiority in value. Tea, a single agricultural product, obtains for a great empire, a balance of trade in money. Spices do the same for Holland. Liquors, sugar, and coffee, are staples which bestow wealth on other countries. Cotton, tobacco, grain, meat, live stock, rice, fish, tar, pitch, turpentine, potash, timber, and other articles, are the means of the United States for procuring a balance of trade. Chaptal thinks, "that it would be wiser for a nation to cultivate and perfect that kind of labour for which nature designed it, than to seek for wealth by prohibitions and restrictions upon commerce." The Committee are for forcing nature out of her course, by discouraging the long list of occupations which she patronizes, and fostering one at their expense, upon which she must frown for ages. According to their doctrine, China ought to diminish the cultivation of tea, and other countries that of spices, sugar, and coffee. The United States also, ought to diminish the cultivation of the entire mass of articles, which bring them all the money and commodities they get by commerce, for the purpose of encouraging an occupation, by which they gain nothing from foreign nations. Their scheme is to diminish the whole mass of our exports, in order to increase a species of labour which furnishes but few; and they call it "political economy." As its hopefulness depends more on the degree of favour it may expect from the laws of nature, than on the power of legislation to defeat those laws, we ought maturely to consider what these laws now decree, how long it will take us to make them null and void, and what will be the expense of a legislative war with them.
The laws of nature operate upon a great variety of circumstances in respect to commerce, both moral and physical. Among these, extent of country and the number of inhabitants, are of irresistible force. The relation of these two circumstances to each other, determines her mandate on the subject we are discussing. We discover that relation by considering the difference between population and populousness. The population may be considerable, and yet a country may not be populous, comparatively with its extent. Such is our case. Whatever may be the actual census of the United States, yet a superabundance of uncultivated land, will long prevent them from being populous. To determine correctly how nature legislates in such a case, we must be governed by the character she has given to man. The first objects of his solicitude are, a home, independence, and leisure. Where land is good, cheap, and plenty, he will certainly estimate the prospect of acquiring these objects, either by becoming the owner of a farm, or a day labourer for hire. He will compare the beneficence of the Deity with the beneficence of a capitalist; and consider whether it is better to work himself for another, than to have the best labourer in the world, the earth itself, to work for him. He sees this good mother ready to supply him spontaneously with meat, butter, milk, honey, and many other comforts, not earned by labouring at the anvil, or toiling at the shuttle, for the live long day; and to repay bountifully his moderate exertions; and he will never be deprived of these blessings for which his heart pants, except by the tyranny of force, or the influence of bounties, equivalent to his sacrifices. As coercion cannot be used, he can only be assailed by bribes; but these will be intercepted by his master, because he cannot rival foreign nations, except by reducing the wages of his workmen to a level with theirs. In the interval, the cheapness of land must enhance the wages of mechanicks, and if the bounty should also get into the pockets of the workmen, it will accelerate their ability of acquiring the domicil for which their hearts languish. Have not the laws of nature decided, which is the best substratum for commercial rivalry and competition, cheapness or dearness? Shall we build up a competition with foreign nations upon the cheapness of our land, or upon the dearness of our manufactures, both destined to live for centuries, and slowly to disappear together? I cannot discern the impolicy of erecting our commercial competitions upon the cheapness of land, so long as it remains; and transplanting them to the cheapness of manufactures, whenever that shall occur in a natural course.
In addition, however, to the considerations arising from the present plenty of land and relative scarcity of people, we ought to take into view the permanent difference between maritime and inland countries. As the latter can never become considerable manufacturers for exportation, it would be as preposterous and unjust to impose the manufacturing occupation upon them, as to compel maritime countries to be agricultural. What must be the bounties which would enable our inland people to rival the English and other maritime nations, with our manufactures, in foreign nations? If they were sufficient to effect that object, with respect to our inland people, would they not be so superabundant to our maritime people, as to enable them to undersell and suppress their interiour competitors. The protecting-duty bounty would therefore be chiefly or entirely received by a slip of maritime country, inferiour to our inland country in extent and population; whilst the latter would be equally subjected to an excise system of taxation, without partaking of the bounty.
The political economy of procuring a balance of trade in our favour, by manufactures, can only be effected by their exportation, and until the object is thus accomplished, we must diminish the value and quantity of all exportable commodities, and subject all our consumptions to a double excise, or all our lands to a direct tax. Chaptal justly observes "that a nation which receives its manufactured articles from abroad, cultivates with care the productions of its soil to exchange for them in return; this culture would naturally be more neglected, when the exportation is lessened by the refusal to admit foreign manufactures in exchange." The project of the Committee is to lessen the exportation of the productions of the soil by refusing to admit foreign manufactures in exchange for them, to cause their culture to be neglected by this effectual obstacle to their sale, to put a stop to the only means we have for drawing money, property, or capital from foreign nations, and to enable the class of capitalists to draw money, property, or capital from all other classes, by giving it an excise upon consumptions. This is a species of political economy which Chaptal seems to have overlooked. The different modes in which governments have managed the machine called political economy, would suffice to fill volumes. In Russia, an empress declared from the throne "that the removal of agriculturists to towns, in order to follow manufacturing employments, greatly checked population, prevented the cultivation of large tracts of country, and impeded the prosperity of the empire to a great extent." Here it is contended "that the removal of agriculturists to towns and villages in order to follow manufacturing employments will advance the prosperity of the United States," although it will also check population, and prevent the cultivation of a larger and better extent of country. But the nobility of Russia, having a power of exacting from their boors an unlimited capitation tax called an obrok, obstructed the wise and benevolent designs of the empress, because they could extort a higher obrok from them by means of a manufacturing monopoly, than by agriculture. Here the capitalists, like the Russian nobility, are endeavouring to get agriculturists into factories, because they will be thereby enabled to draw more money from their labours than they could otherwise do. But they have outstripped the dull Russian nobility in acuteness, by obtaining an obrok to be levied upon those who will not go into their factories, by the protecting duties. What are poor mortals! The Russian obrok for enriching an ennobled class is universally admitted to be a grievous species of slavery; our obroks for enriching a privileged class of capitalists, is eulogized as an admirable species of political economy.
In England, the capitalists perceive that the importation of raw materials, duty free, will enable them to draw an higher obrok from their factory slaves. Here, the capitalists have discovered, that by diminishing the value of agricultural products, they can draw an obrok both from factory and agricultural workmen. And both of these contrivances are called political economy.
Russia, as I gather from its eulogist, Tooke, having a four-fold population beyond the United States, exports only one fourth as much in value. Her exports, like ours, are agricultural. By this exportation she is said to gain a small pecuniary balance of trade. Here it is supposed that a four-fold exportation of agricultural products by one fourth of people, must lose it. But it will be vehemently asserted by the protecting-duty policy, that Russia gains her annual trifling pecuniary balance by commercial prohibitions upon importations. The fact is doubtful; as even an indisposition for expensive consumptions owing to the uncivilized state of the great mass of its people, and other causes, may very deeply affect it. But let it be admitted. Her exportations are sixteen-fold less than ours in proportion to population, and her duties only amount to three millions of dollars annually. To discover whether a small pecuniary balance of trade, thus procured, is a wise policy, we must compute the cost. First, the smallness of the agricultural exports, must be ascribed, as Chaptal observes, to the refusal of admitting foreign manufactures in exchange, and demonstrates that agriculture must be reduced to a very bad state. Secondly, the smallness of the importations demonstrates that forty millions of people can derive a very inconsiderable portion of comfort from other climates. And, thirdly, the prohibitions and restrictions upon commerce having rendered the customs wholly inadequate to the expenses of the government, a frightful catalogue of excises, obroks, and internal taxes of every description, has been created to supply the deficiency. The balance of trade in money is trifling compared with the oppressions arising from resorting to these resources, which it causes. These oppressions are permanent; and though Russia may get this small balance by inflicting them, she cannot prevent it from leaking out continually, so that she is obliged to resort to vast emissions of depreciating paper money. Besides, the commercial prohibitions and restrictions have reduced the price of agricultural products so low, as to inflict annually a pecuniary loss upon that one occupation, infinitely exceeding in amount the inconsiderable and fleeting pecuniary gain from a balance in trade. This part of the Russian policy, is the political economy recommended by the Committee. Even Russia is still obliged to take back many of her raw materials in a manufactured form, such as iron, furs, and wool, because the laws of nature have hitherto decided that she shall not be an exporting manufacturing country.
Athens, Carthage, and Holland, being deficient in commodities, both agricultural and manufactured, resorted to a free trade, and availed themselves of their maritime situations to excite industry by the utmost latitude both as to exports and imports. These examples of political economy have been admired by all the world. They raised three small barren districts to wealth and power. One was raised out of the sea. What then would be the consequence if we should unite the policy by which they flourished, to the advantage of possessing an extensive and fertile country, producing many indigenous commodities; when these little districts found it so efficient without such powerful auxiliaries?
Russia had no money when she had no trade. If a small trade will procure some money, a great trade will procure more. As we have no mines, the Committee propose to get money by diminishing trade. Suppose we had enough to facilitate domestick exchanges; ought trade to be therefore diminished? If so, the same reason would dictate its entire abolition. What will the money then be? As valuable and not more so than local paper money answering the end of facilitating local exchanges. Why is it true that money is every thing? Because it may be expended in obtaining comforts from foreign nations. Metallick money, locked up by commercial restrictions, is nothing in reference to other nations, beyond local paper money. Nations are individuals in relation to each other, and in locking up money, would act as wisely as an individual who should keep his money in a chest during his whole life. This is the political economy, for the sake of which we are advised to subject ourselves to the taxation of internal monopolies and exclusive privileges.
It is urged that governments ought to supervise the affairs of individuals, and that in order to promote their prosperity, they should give bounties to domestick obstacles, to be paid by domestick facilities, in order to enable these obstacles to undersell foreign facilities. By this policy the impracticability of equalizing climates, soils, situations, habits, and arts, is undertaken: and that, which, to a benevolent mind is still more beautiful, it will rob the ocean of its terrors, so soon as it is effected by all nations; and it may thenceforth roar and rage without swallowing up any more victims. The rival policy advises governments either to encourage the natural facilities of a nation, or at least to suffer them to produce as great a surplus as they can, to be exchanged for the facilities of other nations. If one of these systems of political economy is in its senses, the other must be run mad. No! It is not mad: It is an acute artifice practised by governments, under pretence of supervising the affairs of individuals, to enrich themselves, and their instruments of oppression.
The effects of bounties upon either imports or exports, are often very far from promoting the wealth or happiness of the nation which pays them. The consuming or exporting nation frequently receives these bounties from the paying nation, as in the cases of the bounties paid by England on the exportation of Irish linen, or the importation of corn. If the system of political economy recommended by the Committee, in the long, long run, should so completely succeed, as to enable the capitalists to become exporters of manufactures, the bounties preceding that distant epoch will have been paid to them, that foreign nations may receive those which shall succeed it. Drawbacks of duties, on the contrary, are allowed to be highly beneficial to commerce. These are special acts of freedom. Ought not the advantages resulting from them to suggest at least a drawback of all duties beyond the demands of revenue, as likely to have a similar effect upon commerce? It would be a general freedom.
There remains an argument if founded in fact, sufficient to overturn the whole theory of the Committee: and it seems perfectly plain to me, that the fact sustains the argument. The Committee say "that they have applied reasoning to facts, and traced the true principles of political economy to the conduct and the interest of the individuals who compose the nation." Let us adopt this correct principle, and consider whether the Committee have applied it so as to effect or defeat their object of procuring a balance of trade in our favour, from foreign nations. They contend, as is certainly true, that national political economy must have its source in the individuals who compose the nation, and therefore they go in search of it to "the conduct and interest of these individuals." Unless these individuals have a surplus of income beyond their expenses, the nation cannot acquire a balance of trade in its favour, because a national surplus, like a river, can only be formed by the streamlets of individual surpluses. If these rills are diverted into other channels, the river becomes dry. Suppose the income of an individual to be one thousand dollars, and his expenses eight hundred, two hundred would be his surplus applicable to the attainment of a balance of trade, and if so applied would draw from foreign nations money or property to that amount. But if he should be robbed of this surplus, he could not contribute any thing towards this object. Extend the supposition "to all the individuals who compose the nation" and, though each should, by his industry, procure a surplus beyond his expenses, yet if all are robbed of their several surpluses, none would have any thing applicable to the attainment of a balance of trade. The application is obvious. Whenever the profits of industry are transferred to monopolies, exclusive privileges, or public extravagance, the same amount is deducted from its means to procure for the nation a balance of trade. If the people of the United States are at this time paying thirty millions annually to banking pensions, the protecting-duty monopoly, and unnecessary public expenditures, it takes from individuals the same sum, which would otherwise have been applicable to the object of obtaining a favourable balance of trade, and applies it to the very different object of enriching a capitalist. Thus the theory is a felo de se, and inconsistent with the principle of tracing "political economy to the conduct and interest of individuals." It traces it on the contrary to the conduct and interest of a combination of factory capitalists. It proposes to acquire a balance of trade by transferring the means for doing so, to a totally different object. Would not individuals be more able to contend for this balance with thirty millions, or whatever the sum transferred may be, than without it? Besides, in this contest they would receive an equivalent for their surpluses, which would advance their own interest, and that interest is the end of true political economy.
But when their surpluses are transferred by laws to enrich any minor class in society, they get no equivalent for them, and their conduct has nothing to do in the affair. They are only passive instruments of fraudulent laws. It is unimportant to true political economy or national prosperity, whether the surpluses of individuals shall be applied to getting money or commodities from foreign nations, to building houses, or to other improvements; applied in either mode it is a substantial political economy, and a sound item in computing the balance of trade. But if these surpluses are transferred to exclusive privileges or lavished upon a sect of capitalists, they cannot be applied in either mode towards advancing this kind of political economy. During our colonial state, though the pecuniary balance of trade was against the provinces, the political economy of not transferring the surpluses of individuals to unproductive legal creatures, overbalanced the loss, and caused commerce to be so highly beneficial to the provinces, that they speedily grew up to be a match for the mother country, and surprised the world by the celerity of their improvement. Now, the fraudulent species of political economy transfers these surpluses to a large family of unproductive legal creatures, and our prosperity stops, because the profits of labour, heretofore applicable to the objects of drawing money or property from foreign nations, or improving our country, are diverted to, and exhausted by, this consuming family.
To obtain a distinct view of the oppressive system of commercial restrictions commenced about thirty years ago, and prosecuted to an issue widely different from what its authors contemplated, until it has made matter for another Paradise Lost, we have only to recollect that human happiness must consist of temporal gratifications. We can only extract from human nature itself a perfect test, by which to distinguish the honest and true, from the false and fraudulent species of political economy. If such a test is not to be found in the difference between privations and gratifications, I know not where it lies. A political economy for securing and increasing our gratifications, as we pass through this world, is exactly the adversary of a political economy for inflicting and increasing privations. One must therefore be a true, and the other a false, species of political economy. We have only to ask ourselves whether our gratifications or privations have been increased by commercial restrictions, to discover the species of political economy to which they belong. The embargo preceding the last war cost me, by a calculation which I believe to be correct, considerably more than my proportion of the expenses of the war itself. But it enriched capitalists. Commercial restrictions are all partial embargoes; but they will also enrich the capitalists. A complete embargo is a respectable witness to prove what are the effects of partial embargoes, because the latter only graduate the effects produced by a general policy of the same nature. These probably deprive individuals of as much annually as would pay their taxes, or purchase gratifications to the same amount. A species of political economy which inflicts privations on the present, under pretence of bestowing gratifications upon some future generation, is false, because it robs men of the only gratifications of which they are susceptible, and it ought to be distrusted, because it is not exposed to the least responsibility. If it fails to fulfil its promise, who are to be impeached? Its authors are in the grave. It may promise whatever its designs may require, without being deterred even by the fear of reproach, because the excuse "that the time is not yet come to exhibit the goodness of the system" is always ready. But when the temptation of acquiring wealth, is added to its incongruity with human nature, and to the absence of responsibility, it becomes highly suspicious. The political economy of the Committee inflicts innumerable privations on the existing generations, defended by a promise of making compensation after the Committee and the sufferers are dead; and also bestows eagerly-solicited gratifications on the existing sect of capitalists. As to the capitalists, it adheres to the principle of true political economy, in dealing out present gratifications to living people; but as to the rest of the nation, it rejects this principle, and adopts that of the false species of political economy, by dealing out present privations to living people. But justice requires that a system of political economy, like a system of government, should be founded in one principle, so as to operate upon all the living members of the society equally, and not dispense wealth and gratifications to a few, and poverty and privations to a multitude, under pretence that the account shall be settled with the unborn, and the balance paid by the bankruptcy of the grave. Gratifications should be bestowed upon all living people, or upon none, by a true political economy; and it should also inflict privations upon all, or none, because it is the very essence of tyranny to inflict privations, in order to reap or to bestow gratifications.
It is unnecessary to prove that political economy, in all countries, is capable of being founded in the same principles, and ought to result from the same theory; and it is sufficient to show a difference in the circumstances of different countries, in order to evince the species of political economy practicable in each. All the European writers upon political economy have extracted their systems from, and laboured to accommodate them to, local existing circumstances. Taking England for an example, and comparing it with the United States, these are so dissimilar, that a system of political economy, for that country cannot be suitable for this; and therefore an imitation by either of the other would be preposterous. England has two great interests, landlords and tenants, which are extensively computed in moulding her system of political economy; the yeomanry of the United States are land-owners, and must long continue so; wherefore rents are not an item of any importance, in moulding our system of political economy. Labour in England is environed by a multitude of laws, and must therefore be regulated by its system of political economy; being free here, it requires no such regulation. England abounds in political orders and exclusive privileges, of an influence to be considered and provided for: the United States have no such orders, and ought not to have any such exclusive privileges. These English orders and privileges are so interwoven with the form of government, that their preservation is a primary object with the English system of political economy, which must be calculated either to effect this end or to produce a revolution; nothing equivalent to these orders or privileges is interwoven with our form of government by our constitutions, and to create and provide for them by a legal system of political economy, would be a substantial revolution. We have no tribes of tenants, labourers, and mechanics, panting for a revolution, and breaking out into frequent seditions to be restrained by a system of political economy; England is under the necessity of maintaining a standing army both to repress their turbulence and for self-defence against powerful neighbours. These and other local circumstances are dictators to her writers upon political economy, but no dictators to us; and therefore neither reason nor power requires us to adopt the system of political economy, which they are compelled by both to defend and recommend.
Let us now proceed to a separate examination of the answers given by the Committee to certain objections urged against the restrictive system, which they have selected as most answerable. They amount to nine, namely: that the protecting-duty system is unconstitutional; injurious to morals, and productive of pauperism; improper to be extended; [a cause for smuggling;] a tax on the many, and a bounty to the few; a restrictive system; a destroyer of revenue; ruinous to commerce; and destructive to agriculture. Of all these crimes, the Committee contend that it is as innocent as the child unborn. If it can yet hide its future features in the womb, or excuse its present frolicks by its childhood, when it has grown up to maturity, it will hardly be acquitted, by an impartial judge, of any one. In considering the allegations of the Committee under these heads, an occasional recurrence to the principles we have passed over, will be unavoidable for the sake of their applications to new suggestions.