cessive duties on tobacco levied in some European countries, such as Great Britain, &c., and the monopoly of the trade in that article in others, such as France and Austria. In fact, the one cause has acted on the other as cause and effect: the increased duties in some countries and monopolized trade in others have operated to encourage the production of the article in Europe; although it may, perhaps, be doubted whether the application of capital to the cultivation of an article so inferior in quality can be justified on sound principles of political economy, when a cheaper and better article of the same kind might be obtained by the cultivation and sale abroad of other productions better suited to the soil and climate of Europe. The trade of America with Europe has a constant tendency to import more than it exports-to consume annually more than it can pay for, with the annual produce of the land and labor of the country-and thus to incur a constantly increasing debt to Europe. What is called the balance of trade is constantly against America, and in favor of Europe. This state of things produces periodically, every few years, a revulsion in trade like the commercial crisis which is now in operation, which has reacted on Europe, and which is felt more or less all over the world. The financial distress thus produced has called the public attention in America to the means of paying the debt thus incurred. Hitherto this debt has been liquidated by the exportation of gold and silver coin to Europe, and with the freights earned by American vessels in navigation, and the profits of their trade with other parts of the world. But the present commercial crisis has so deranged the currency of the country as to compel the public and private banks to suspend the payment of their notes in specie. The gold and silver coin is thus locked up in the coffers of the banks, while the production of the precious metals from the mines of Mexico has prodigiously diminished from the political disorders which afflict that unhappy country. It is therefore evident that if America is to continue to consume its accustomed quantities of European goods, it must pay for them with the produce of its soil; its cotton, wool, tobacco, rice, sugar, indigo, and peltries; with the produce of its whale and cod fisheries, and the freights of its shipping employed in the carrying trade. But if the great staple articles of American agriculture are burdened with excessively high duties in Europe, greater than can be considered indispensable for the fair purposes of revenue-it is evident that the quantity exported from America cannot be increased in value, and consequently the debts, due by the American merchant to his European creditor, must remain unliquidated, while the quantity of European goods consumed in the United States, must be greatly diminished. Experience has shown that the loss occasioned by this diminution must be principally borne by those countries which export, principally articles of luxury to the United States, such as the wines, silks, and half-silk goods, glass, galanterie waaren, of France and Germany, while the export trade of Great Britain with America will suffer less; it principally consisting in articles of necessity, or such comforts as the habits of life have rendered indispensable to its well-being. A nation is is like an individual, who, finding it necessary to economize in order to get out of debt, begins with retrenching in the use of luxuries which are not indispensable to the comfort of himself and family. Next to cotton-wool, the article of tobacco is the most important staple production of America. The statistical returns collected and published by the American Government, show that there has been for several years past an over-production in the article of cotton-wool. But it does not appear that this is the case with tobacco, since the quantity exported has been but little diminished, though the consumption in the interior has greatly increased. In 1622, the infant colony of Virginia produced only 60,000 pounds of tobacco. But in 1639, seventeen years subsequent, the quantity had so much increased that the Colonial Assembly passed a law (ou similar principles of policy which induced the Dutch to burn a large proportion of the spices produced in their East India colonies) declaring that, "Whereas, the excessive quantities of tobacco of late years planted in the colony has debased the quality," and enacting "That all the tobacco planted this present year, and the two succeeding years, in the colony of Virginia, be absolutely destroyed and burnt, excepting and reserving so much, in equal proportions to each planter, as shall make, in the whole, just the quantity of 120,000 pounds of tobacco, stripped and smoothed," &c.; and that the creditors of the planters should be compelled "to accept and receive 40 pounds of such tobacco in full satisfaction of every £100 due them." The article had already become, and was long afterward, used as a circulating currency, instead of coin or paper money. The production went on rapidly increasing until the breaking out of the war of the American Revolution, when the quantity exported to Great Britain (which then monopolized the whole trade, and supplied the rest of Europe) amounted to about 100,000,000 of pounds, or, more accurately, to an annual average of 99,374,785 pounds for the period of four years, from 1772 to 1775, inclusive. During the war of the Revolution, the whole amount exported was not equal to the average of one year's previous exportation. That war gave a check to the rapid increase of the production of American tobacco, from which it has never entirely recovered. Previous to that event, the European continent depended upon Great Britain for its supply, which, being cut off, the different countries of Europe began to cultivate an article which, however inferior in quality, served, from habit, as a substitute for the American plant. At the peace of 1783, the cultivation of tobacco again revived in America, and the exportation went on, gradually increasing, until it amounted, in 1789, to eighty-eight millions of pounds. The establishment of the present federal Constitution, in that year, produced a closer union among the States, and enabled the Central Government to retaliate the prohibitive measures of other foreign Governments, and to form advantageous treaties of commerce on the basis of reciprocity with foreign nations. A new impulse was thus given to the agriculture and trade of the republic. The exportation of tobacco again went on increasing until it was interrupted by the continental system of Napoleon, in 1810 and 1811, and the war between America and England, which lasted from 1812 to 1815. At the general peace, the trade once more revived, and the exportation amounted, for the twenty-one years-from 1815 to 1835, inclusive-to an average of 82,760 hogsheads annually. Estimating each hogshead at 1,200 pounds, which is the average, we shall have 99,313,000 pounds as the annual average exportation for that period of twenty-one years, which is just about equal to the total exportation for each of the four years preceding the war of the American Revolution, which establishes the remarkable fact, that the exportation of leaf-tobacco had remained nearly stationary for a period of sixty years, except when interrupted by wars in which the United States were themselves engaged, or by commercial embarrassments, arising out of the wars of other nations. The large surplus produced by the increased production, amounting to about one hundred millions of pounds, was taken off by domestic consumption, and by the manufacture of snuff and segars for exportation abroad. Although the mere quantity of tobacco exported has not much diminished during this long period, yet the price of the article, and, consequently, the total value of the exportations, have very considerably fallen since the year 1800. Since 1816, the price has fallen from 15 cents per pounds to 74 cents per pound, in 1835, being thus reduced one-half in value. The total value of the exportations has amounted, during the last five years, to an average of about six millions of dollars annually; to which, add the profits on the sale in Europe, and freights earned by the transportation, and we shall have the total annual proceeds thus remitted to pay for European manufactures-wines, &c., consumed in the United States. In the year 1834, there were exported 87,979 hogsheads of tobacco, of which 30,658 went to Great Britain, 20,611 to the Hanse Towns, 11,011 to Holland and Belgium, 5,430 to France, and the rest to various parts of the world. Nearly 40,000 hogsheads are annually consumed in Germany, which are principally imported through the Hanse Towns and the Netherlands, as very little is imported through the Prussian ports in the Baltic or the Austrian ports in the Adriatic. Even the Austrian regie purchases its tobacco at Bremen. The duties on the importation in the ports of Antwerp, Rotterdam, Amsterdam, Bremen, and Hamburg, are very light. It is only when the tobacco enters the lines of the German zoll-verein, and of the Austrian customs, that it is charged with duties which, in America, are considered heavy; but which, having been imposed with the single object of revenue, have incidentally operated to encourage the production in various parts of Germany of an article far inferior in intrinsic value to the American plant. As stated in Banke's Zeitsschrift, vol. 2, p. 503, "The Prussian law on imports of the 26th of May, 1818, declares, in the preamble, expressly, that the same is established, not so much to protect the national industry as to collect a revenue from trade and luxury." And, in a subsequent passage, the author of this article, signed (L. K.), states that, "So much is certain that it would be a great folly, and it cannot enter into the mind of any one, to adopt a protective system of import duties, merely to promote national industry, unless the same yields a productive revenue." Doubtless, the duties on foreign tobacco do yield a productive revenue of great importance to the state. The only question is, whether a modification of these duties, which would render them less discouraging to North American tobacco, might not be adopted without injuriously affecting the revenue. It is a well-known law of fiscal economy, that excessive duties on importation, when pushed beyond a certain point, defeat their own purpose; and that a reduction of the nominal rate of duties is often followed by a great increase of consumption, and consequently of revenue. This was remarkably the case on the famous revision of the English tariff by Mr. Pitt in 1787. Whether this principle could be applied to the duties levied in Germany on American tobacco, it is for the wisdom of our statesmen to consider. We will only venture, as journalists, to assert, that, if it can be done with propriety, it could not fail to have the most beneficial effects upon our trade with America, which country affords, in ordinary times, an extensive market for German goods, and which trade must again become flourishing when the present commercial crisis is past. Mr. Wheaton to Mr. Forsyth. [EXTRACT.] SIR: * FRANKFORT ON THE MAINE, August 9, 1837. Mr. Louis Marle, our consul at Ostend, who has long been familiarly acquainted with the commerce of Germany, and has particular connexions at Munich, having offered to proceed thither with the view of ascertaining the disposition of the Bavarian government, in respect to a reduction of the duties on tobacco, I did not hesitate to accept his patriotic offer, not being aware at the time that any special agency relating to this subject had been appointed. Mr. Marle gives me reason to hope that he has made an impression favorable to our views upon the minds both of the king and his principal minister (Prince Wallerstein) charged with the department of commercial affairs. Mr. Marle has, also, with my approbation, translated into the German language, and published, with a preface, in the Franconian Mercury, the report of the committee of the House of Representatives on the subject of the tobacco-trade. A number of extra copies have been struck off for distribution, one of which is enclosed. [No. 48.] Mr. Wheaton to Mr. Forsyth. [EXTRACT.] BERLIN, October 4, 1837. I have the honor to enclose a copy of the instructions I have given to Mr. Dodge, in pursuance of the directions given in your despatch. Mr. Wheaton to Mr. Dodge. UNITED STATES LEGATION, SIR: You having been appointed special agent for the purpose of collecting information in the several States of Germany (except Austria) with respect to the cultivation, importation, and consumption of tobacco, and having been directed by the Department of State to apply to me for instructions, as to the manner in which you are to fulfil the objects of your appointment, I beg leave to communicate the following: In respect to the particular scope of your inquiries, I cannot do better than to hand you the enclosed extract from a despatch addressed to me by the Department of State, under date of the 1st June last. In addition to the specific objects of inquiry enumerated in this despatch, I beg leave to add that of ascertaining in what manner the duties on native tobacco, produced in several states associated in the German commercial union (zoll-verein), and exported from one state into another, are collected so as to equalize the excise duties throughout the union. The countries of Germany to be explored by you, in the prosecution of the objects of your mission, are: 1st. The states associated in the German commercial union (zoll. verein). 2d. The states which have not joined the zoll-verein, but have formed their own separate commercial and customs union. These are, the kingdom of Hanover, the grand dutchy of Oldenburg, and the dutchy of Brunswick. 3d. Those states which have not acceded to either of these two commercial leagues. Such as the dutchies of Holstein and Lauenburg, the grand dutchies of Mecklenburg-Schwerin and Mecklenburg-Strelitz, and the Hanseatic towns. I have already made some progress in gathering information respecting the tobacco-trade in Prussia and her associated states, and you are already familiar with the general commerce of several of the states which have not joined the union; but it will be your duty to travel leisurely through all the countries of Germany (except the Austrian dominions), and carefully to examine every thing connected with the cultivation, manufacture, and trade of tobacco. You will communicate to me, from time to time, the results of your inquiries; but I would recommend you to include every thing relating to any one state, in one report, carefully digested, with marginal notes, for more convenient and easy reference. In the course of your different journeys, you will visit the different seaports and interior commercial and manufacturing towns, as well as the capitals, or respective residences of the Governments. You will be furnished by this legation with official letters of introduction to the ministers of commerce and of foreign affairs of the respective states which you may visit. In your intercourse with them, it will be one of your objects to endeavor to ascertain the practicability of obtaining a reduction of the present heavy duties and other burdens imposed on American tobacco in the different countries of Germany. Although it is not within the particular scope of your instructions to extend your inquiries beyond the subject of tobacco, I cannot but strongly recommend your attention to the commercial resources of Germany in general, and the means they afford of furnishing commercial exchanges with the United States. The information you may gather on these subjects cannot fail to promote the common prosperity of our beloved country, and may be very useful in the course of the negotiations confided to the mission here. Your long experience in trade, and in the duties of the consular office, will afford you great facilities in making such inquiries, and your zeal and perseverance in fulfilling the objects of the Government, are confidently relied upon by the department. The order to be observed in your different tours is left to your own discretion; but, for the particular reasons which have been suggested in conversation, I would recommend that you should visit Hanover, and the states associated with her in a separate union of commerce and customs. I have the honor to be, your obedient servant, JOSHUA DODGE, Esq., &c., &c. HENRY WHEATON. |