travellers from the land, the effect would be to diminish the value of pro perty in taverns and farms, on public roads. It would prevent every advancement in manufactures to be accomplished by the substitution of new labor-saving machines for old ones, upon the principle that the old ones would have to be thrown away. It would, in fine, be at war with the march of improvement in all its departments, and make the world stop where it is; and hence is so manifestly unsound, that it is difficult to imagine how any man of comprehensive mind, and free from the influence of existing vested interests, can seriously advocate it.

The fourth and last class, however, are of a different character. They embrace a large body of intelligent men, who have minds open to convic tion. It is to this class alone I offer the following remarks. My design is to endeavor to convince them, that if ninety-nine out of a hundred nations adopt the restrictive system, it is the true policy of the remaining one nation to adhere to the principles of free trade. And here, at the offset, I will observe, that if this proposition cannot be demonstrated to the satisfaction of every unprejudiced man, who considers himself bound to admit the conclusions which result from arguments that cannot be logically con troverted, I would agree to burn all the books that were ever written upon political economy, from Adam Smith down to the present day. Upon the making out of this case, I am willing to stake the whole cause of free trade. A greater concession than this can hardly be demanded by any generous opponent; and as, in discussions of this nature, a particular case must be taken for illustration, I have chosen one, as appropriate to the subject, which is familiar to you all-the trade between the United States and Buenos Ayres.

Everybody, acquainted with the productions of these two countries, knows, that they are both agricultural, that they can both raise wheat and cattle in sufficient abundance to afford bread and animal food for the sup port of the whole of their respective populations. Between two such countries, situate by the route of the ocean seven thousand miles apart, it would appear to a person not conversant with the details of commerce, that no trade in such agricultural products could be carried on to advan tage between them. It would be difficult for him to imagine, how such bulky commodities could be made to defray the expenses of freight for so long a voyage, and after paying insurance and commissions, to leave a satisfactory profit for the shipper. Difficult, however, as the problem would be to him, it would not be so to mercantile sagacity. The mer chants would soon discover that each country had advantages over the other in regard to some particular branch of agriculture, which would make it most profitable for each to devote itself exclusively, as regards their interchange of products, to that particular branch in which it had the advantage. Hence we see, that the farmers of the United States have found it their interest to cultivate wheat, to be manufactured into flour, rather than cattle, for exportation to Buenos Ayres; whilst the farmers of Buenos Ayres have found it their interest to cultivate cattle for the sake of their hides, rather than wheat, for exportation to the United States. By this division of employments, the farmer of the United States gets more hides from the cultivation of his land, than he would if he raised cattle instead of wheat; whilst the farmer of Buenos Ayres gets more flour than he could if he raised wheat instead of cattle.

In a state of perfect freedom of trade, that is, in such a condition of

things, as that the United States should impose no duty whatever upon the hides of Buenos Ayres, and that Buenos Ayres should impose no duty whatever upon the wheat or flour of the United States, the commerce between the two countries would experience its largest development. I do not mean to say, that all the hides consumed in the United States would be imported from Buenos Ayres, or that all the flour and wheat consumed in Buenos Ayres would be imported from the United States. The United States would necessarily produce all the black cattle which they could raise more advantageously than wheat, and Buenos Ayres would necessarily produce flour and wheat upon that portion of her soil that was fitter for the plough than for grazing. What I mean to say is, that there would be the fullest exchange of the surplus products of each country, which it would be for the interest of both parties to make; and beyond this, no one will contend that exchanges ought to be made.

Now, let us suppose, that under this perfect freedom of trade, the farmers of the United States should find annually a demand in Buenos Ayres for a hundred thousand barrels of flour, and that the farmers of Buenos Ayres should find a demand in the United States for three hundred thousand hides: the two commodities being supposed to be equivalents of each other in that proportion, and the exchange affording to each party the usual profits of trade.

Let us, then, suppose that Buenos Ayres, either for purposes of revenue, or with the view of benefiting the owners of her wheat lands, by enabling them to get a higher price for their grain, should impose a duty of twenty per cent upon the flour of the United States, what would be the consequences? These are easily to be seen.

The first would be a rise in the price of flour at Buenos Ayres, foreign as well as domestic, after the lapse of a little time, if not immediately, to an extent equal to the duty; for it is very clear, that if such increased price could not be obtained, the foreign supply would cease, for the simple reason, that if, at the old price, shipments of flour, when free from duty, did no more than yield the usual profits of trade, they could not yield the same profits under a duty of twenty per cent without such an increased price; and without full remuneration, no trade can be long continued.

The second consequence would be, a diminished demand for the flour of the United States, owing to the augmented price; for nothing is clearer than that the consumption of commodities of every description, whether they be articles of luxury, comfort, or necessity, is influenced by the price, and that it is wholly impossible to sell as many things at high prices as at low prices, as every wine-dealer knows who sells a basket of champaign wine, as every farmer knows who sells a pound of butter, as every baker knows who sells a loaf of bread, and as even every apothecary knows who sells a dose of physic.

The third consequence would be, that the raisers of cattle in Buenos Ayres would experience a diminished demand for their hides; for as the second consequence would leave a less fund as the nett proceeds of the sale of the flour of the United States, there would not be so large an amount to be invested in hides. It is true, that in the first instance, owing to a superabundant supply, the price of hides might fall, but this diminu tion of price would only continue until the new supply should have become adjusted to the new demand-a remunerating price, as already said, being an inseparable condition of all continued supplies.

The fourth consequence would be, that the people of Buenos Ayres would be obliged to pay for their domestic flour, as well as for their foreign flour, an additional price, equal to the duty, which would not only restrict them in the consumption of an article of the first necessity, but restrict them in their consumption of other things; for if they have more to pay for bread, they must have less to expend in other articles.

Whatever might be the precise extent to which the trade would fall off by the imposition of this duty, it will be sufficient for our purpose of illus. tration, to estimate it at twenty per cent; and assuming this to be the proportion, it would appear that, under the new regulation, there would be a sale at Buenos Ayres of only eighty thousand barrels of American flour, and a purchase, in exchange there for, of only two hundred and forty thousand hides. Such a diminution of the trade, it is manifest, would inflict an injury upon the growers of cattle in Buenos Ayres, as well as upon the growers of wheat in the United States, by restricting the market of each. The aggregate product of the land in both countries would be diminished, and the incomes of both people would be lessened, inasmuch as neither would have as great a demand as before for that particular species of product which it could raise to the best advantage.

The theory I am about to attempt to controvert is, that in consequence of Buenos Ayres imposing a duty of twenty per cent upon the flour of the United States, by which the latter are deprived of the sale of twenty thousand barrels of flour, it is for the interest of the United States that a countervailing duty be laid upon the hides of Buenos Ayres. Of such a step, let us examine the result.

Let us suppose, for example, that the United States should impose a countervailing duty of twenty per cent upon the hides of Buenos Ayres: what would be the consequences? These, it is manifest, could not be different from those described in the former case. They would be

First, an ultimate rise in the price of hides in the United States, foreign and domestic, to an extent equal to the duty; for if this were not the case, the foreign supply would cease; for it is very clear that hides could not be afforded, subject to a duty of twenty per cent, and yield the usual profits of trade, if that was all they could do whilst subject to no duty.

The second consequence would be, a diminished demand in the United States for the hides of Buenos Ayres, owing to this rise of price.

The third would be, that the growers of wheat in the United States would experience a diminished demand for their flour for exportation to Buenos Ayres.

And the fourth would be, that the people of the United States would have to pay for their leather made from domestic hides, as well as for that made of foreign hides, an additional price equal to the duty.

Estimating the effects of this countervailing duty, for the sake of round numbers, as equal to another twenty per cent diminution in the original amount of the trade, the new posture of affairs would stand thus: the United States would now import from Buenos Ayres twenty per cent less in number of hides than before, and, as a necessary consequence, would export to Buenos Ayres twenty per cent less in barrels of flour than before. In other words, the exchanges between the two countries would now be reduced to 60,000 barrels of flour, and 180,000 hides; for there are no truths in any science more demonstrable, than that the commerce of every country is an exchange of equivalents or equal values at the

place where the exchanges are made, and that "a nation that will not buy, cannot sell," and that "a nation that cannot sell, cannot buy.”

I have thus shown, that by the countervailing duty above supposed, the United States have lost instead of gained. They have, it is true, injured the agricultural interests of Buenos Ayres, by cutting them off of a sale of sixty thousand hides; but as a concomitant and inseparable effect of this operation, they have injured their own agricultural interests to the same extent, by cutting their farmers off of a sale of twenty thousand barrels of flour. The game they have been playing, is precisely the same as that which would take place, if one man had cut off one of his own fingers, and in the act of so doing, had accidentally cut off one from the hand of another person; and the other person, by way of retaliation, should cut off a second finger from each of the wounded hands-one from his own, and one from that of his antagonist.

It would be useless to pursue the illustration further. Should Buenos Ayres retaliate upon the United States for this duty on her hides, by adding a second duty, equal to another twenty per cent of the original amount of the trade, on American flour, she would be able to sell only one hundred and twenty thousand hides; and every repetition of the folly by either party, could only have the effect of cutting off some more of their own fingers. By such a policy nothing can possibly be gained; and it is very evident that, pushed to its utmost extent, it must end in the complete annihilation of all trade between the two countries. And how, then, would stand the account between the parties? Why, they would look at each other like a couple of idiots, for having, by their own acts, crippled their own prosperity, and retarded their advancement in wealth, by compelling each other to divert the land and labor of their respective farmers from the most profitable branches of business to which they could be applied, to pursuits of a less profitable character-that is, pursuits which they would never have engaged in under the system of free trade.

Now what is true of the trade between the United States and Buenos Ayres, is true of the trade between every nation and all the rest of the world. No nation can for any long period together buy to a greater amount than she can sell, and Providence has very wisely ordered, that the power to sell is, in a great measure, left in the hands of each nation. By abstaining from protecting or countervailing duties, it is only liable to the diminution of trade resulting from the folly of others. By resorting to them, it voluntarily aggravates the evil. Had the United States, in the case supposed, avoided imposing the countervailing duty upon the hides of Buenos Ayres, she would have had a continued demand for eighty thousand barrels of flour, which, although not equally beneficial as a sale of a hundred thousand barrels, was still better than a sale of sixty thousand. It is as sound policy for nations as for individuals not to refuse to sell to others what can be raised to better advantage than other things, merely because the others, through fancied self-interest or ignorance, or even spite, are not willing to buy the whole quantity of such things that could by possibility be raised. I apprehend that a sensible baker would not refuse to sell a loaf of bread to a family that baked at home the principal part of the bread they consumed, or that a butcher would not refuse to sell a small joint of meat to a man merely because he was not willing to buy a large one; and how a nation, because another will not take a hundred thousand barrels of flour, but only eighty thousand, should expect to gain by VOL. VI.NO. 1.

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depriving the other of the power of buying more than sixty thousand, is an enigma only to be explained upon the principle of an utter ignorance of the operations of commerce. And here I will take occasion to remark, that the tendency of the restrictive system, in all its various applications to nations as well as to individuals, is to diminish the products of industry, and thereby to inflict an injury upon the whole human race, precisely as would happen if all nations in their wisdom, with the view of encouraging their own domestic industry, should destroy all the wind and water mills in the country, and permit no grain to be ground but by hand-mills.

If I have been successful in making out my case, the application of the same principles to any other trade than the one I have referred to, can readily be made by the hearer. If it be asserted, that because Great Britain, by her impolitic and oppressive corn laws, deprives the United States of the sale of half a million of barrels of flour per annum, our interests would be promoted by imposing high duties upon her cotton and woollen goods, the answer is, that because Great Britain is silly enough to compel her subjects to pay four pence for a twopenny loaf, and to take from us our flour only in unfavorable seasons, let us not be guilty of equal folly in compelling our own citizens to pay double price for a suit of clothes, and cut off our southern planters from a sale of their cotton, thereby depriving them of the means of buying the very flour of the north which the British refuse to take. If it be asserted, that because the German States will buy, per annum, only twenty-eight thousand hogsheads of tobacco,* when we could easily supply them with fifty thousand, our interests would be promoted by imposing heavy duties upon, and thereby diminishing the demand for, their manufactures, the answer is, that because Germany is not sufficiently enlightened to see the luxury of cheap segars, snuff, and tobacco, that is no reason why she should not be indulged in as large a supply of the delicious weed as her notions of policy or self-interest will lead her to take, and especially as our refusal to buy her manufactures, which we want more than tobacco, will of necessity oblige her to diminish her already limited demand. If it be asserted that because France will only take from us fifteen thousand tierces of rice,† when we could easily furnish double the quantity, we should be benefited by imposing high duties upon her silks and wines; the answer is, that because the French do not love rice puddings as much as we should wish them to do, that is no reason why they should be deprived of the privilege of eating all they want, especially as by our refusing to take the things they have to give in exchange for it, which we find it most for our interest to take, we should cut off our South Carolina planters from the sale of a portion of what they now have a demand for, and thus diminish their means of purchasing the products of the northern states.

If any proof were wanting of the gross impolicy of restrictive and counter-restrictive laws, the trade between Great Britain and France presents the most striking example. We here see two great nations, containing populations of twenty-seven and thirty-three millions, respectively, possessing a variety of soil and climate eminently adapting them for a vast extent of

* The total export of tobacco from the United States for the year ending 30th Sept., 1940, was 119,484 hogsheads, of which 28,138 went to Germany.

+ The total export of rice during the same year was 101,660 tierces, of which 14,212 went to France and her dependencies.