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action were required for giving to the country a prosperity such as had never before been known; for so increasing the public revenue as to render necessary the emancipation from import duties of tea, coffee, and many other articles the like of which was not produced at home; for taking thus the first step in the direction of real freedom of external commerce; for finally annihilating the public debt; and for causing our people to forget the state of almost ruin from which they had been redeemed by the combined action of the tariffs of 1824 and 1828.

Northern submission to Carolinian threats of nullification next gave us the Compromise of 1833, by means of which the country was, within the next decade, to be brought under a strictly revenue tariff of 20 per cent. The South needed cheap food, and did not, therefore, desire that Western farmers should make a market at home which might tend to raise its price. Most generously, however, it permitted protection to remain almost untouched, until the first of January, 1836, and how gradual were the changes then and for several years thereafter to be made, will be seen from the following figures representing the duties to be paid on an article that had stood originally at 50 per cent.:

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For the first two years general prosperity continued to be maintained. Thereafter, however, we find the whole period of its existence presenting a series of contractions and expansions ending in a state of weakness so extreme that bankruptcy was almost universal; that labor was everywhere seeking for employment; that the public credit was so entirely destroyed that the closing year of that unfortunate period exhibited the disgraceful fact of Commissioners, appointed by the Treasury, wandering throughout Europe and knocking at the doors of its principal banking houses without obtaining the loan of even a single dollar. Public and private distress now, August, 1842, compelling a return to the protective system we find almost at once a reproduction of the prosperous days of the period from 1829 to 1835, public and private credit having been restored, and the demand for labor and its products having become greater than at any former period.

Again, however, do we find our people forgetting that to the protective policy had been due the marvellous changes that were then being witnessed, and again, 1846, returning to that revenue tariff system to which they had been indebted for the scenes of ruin which had marked the periods from 1817 to 1828, and from 1835 to 1842. California gold now, however, came in aid of free trade theories, and for a brief period it was really believed that protection had become a dead issue and could never be again revived. With 1854, however, that delusion passed away, the years that followed, like those of the previous revenue tariff periods, having been marked by enormous expansions and contractions, financial crises, private ruin, and such destruction of the national credit that with the close of Mr. Buchanan's administration we find the treasury unable to obtain the trivial amount which was then required, except on payment of most enormous rates of interest.

Once again, 1861, do we find the country driven to protection, and the public credit by its means so well established as to enable the treasury with little difficulty to obtain the means of carrying on a war whose annual cost was more than had been the total public expenditures of half

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century, including the war with Great Britain of 1812. Thrice thus. under the tariffs of 1828, 1842, and 1861, has protection redeemed the country from almost ruin. Thrice thus, under the revenue tariff's of 1817, 1833, and 1846, has it been, sunk so low that none could be found 'so poor to do it reverence." Such having been our experience throughout half a century it might have been supposed that the question would be regarded now as settled, yet, do we find an officer of the government whose special duty it has been made to inquire into all the causes affecting the public revenue, and who has had before him all the evidence required in proof of the above assertions," now venturing to assure Congress and the people that

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"There does not seem to be any reliable evidence which can be adduced to show that the change which took place in the legislative commercial policy of the country in 1846 had any permanent or marked effect whatever; while, on the other hand, the study of all the facts pertaining to national development from 1840 to 1860, and from 1865 to the present time, unmistakably teaches this lesson; that the progress of the country through what we may term the strength of its elements of vitality is independent of legislation and even of the impoverishment and waste of a great war. Like one of our own mighty rivers, its movement is beyond control. Successive years, like successive affluents, only add to and increase its volume; while legislative enactments and conflicting commercial policies, like the construction of piers and the deposit of sunken wrecks, simply deflect the current or constitute temporary obstructions. In fact, if the nation has not yet been lifted to the full comprehension of its own work, it builds determinately, as it were, by instinct."

How much of truth there is in all this, and what has been your warrant for making such “assertions" it is proposed now to examine, commencing with the iron manufacture.

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Yours respectfully,

HENRY C. CAREY.

DEAR SIR:

LETTER SECOND.

In accordance with the promise in my last I now proceed to an examination of the Iron Question, basing the statements here to be made on facts collected by myself in 1849, and now adopted, so far as they were found available for your purposes, by yourself.

In 1810, prior to our second war with England, our furnaces numbered 153, with an average yield of 36 tons, giving a total produce of 54,000 tons. Protection afforded by the war caused a considerable increase, but there exist no reliable statistics in regard thereto. Peace in 1815 was followed by the, so called, revenue tariff of 1817, and that in turn as is so well known, by the closing of factories and furnaces; by the ruin of manufacturers and merchants; by the discharge of workmen everywhere; by the stoppage of banks; by the bankruptcy of States; by the transfer under the sheriff's hammer of a large portion of the real estate of the Union; and, by an impoverishment of our whole people general beyond all former precedent. The demand for iron had so far ceased that the manufacture was in a state of ruin so complete that not only had it lost all that it had gained in time of war, but had, as was then believed, greatly retrograded. In placing it, as I now shall do, near the point to which, by aid of non-intercourse and embargo acts,

it has been brought in 1810, I am, as I feel assured, doing it entire justice.

Such, with little change, continued to be the state of things' until the passage of the semi-protective tariff of 1824, described in my former letter. By it full protection was granted to pig, bar, bolt, and other descriptions of iron, as well as to some of the coarser kinds of manufactured goods, the demand for iron being thus so far stimulated that the old furnaces were again brought into activity, others meanwhile being built; and the product being, by these means, carried up in 1828 to 130,000 tons, giving a duplication in the short period of four years, or 25 per cent. per annum." Two years later, under the tariff of 1828, it had grown to 165,000 tons, and by 1832 it had reached 200,000, if not even more, having thus trebled itself in the eight years which had followed the passage of the Act of 1824.

As nearly as may be the whole movement from 1817 to 1832 is presented in the following diagram, having examined which you may perhaps explain to what extent it furnishes material for the confirmation of your "assertion" that "the progress of the country through what we may term the strength of its elements of vitality is independent of legislation?" The history of the world presents no case of greater change as the result of sound legislation than will be found by those who study carefully the impoverished and unhappy condition of the country in the years that preceded 1824, and then compare with it the marvellous prosperity that marked the period of the thoroughly protective tariff of 1828.

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2. By the Act of 1832 tea, coffee, and many other articles, railroad iron included, were made free of duty, this last a serious blow to the then rapidly growing iron manufacture. As a consequence of this it was that England had, until after the passage of the tariff act of 1842, an entire monopoly of its supply, by aid of which she had then already imposed upon our people a taxation far greater than would, had it been so applied, given us furnaces and rolling mills capable of furnishing thrice more in quantity and value than Great Britain then produced of iron in all its varied forms. One year later, in 1833, came the Compromise tariff dictated by South Carolina, looking eventually to the establishment of a purely revenue system, but for the moment making changes so very gradual that its deleterious influence remained almost unfelt until after 1835. The production of iron continued, therefore, to increase in the three years which followed 1832, but it has been quite impossible to obtain any reliable statements in regard thereto; and for that reason it is, that in all tables hitherto furnished the whole of that growth has been credited to the revenue tariff policy, when it had properly belonged to the protective one.

For 1840 the product of iron is given at 347,000 tons, showing a gain of 147,000 in eight years from 1832, much of which, however, certainly resulted from the protection afforded from 1832 to 1836.

With 1841 there came, however, as already shown, the fifth reduction of duty under the Carolina nullification tariff of 1833, bringing with it, too, a close proximity of the horizontal twenty per cent. tariff that was to take effect in 1842-3. With each successive day, therefore, the societary movement became more completely paralyzed until there was produced a state of things wholly without parallel in the country's history, and even exceeding that of the revenue tariff period of 1817. The country swarmed with men, women, and children reduced to beggary because of finding no employment, owners of mills and mines meantime reduced to bankruptcy because of finding little or no demand for any of their products. Banks stopped payment and seemed unlikely ever again to reach resumption. States made default in payment of their interest, the national treasury meanwhile begging at home and abroad, and begging, too, in vain, for loans at almost any rate of interest.

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How all this affected the iron manufacture is clearly shown by the following facts. Smelting.by aid of anthracite had been first introduced here in 1837, and as it was an improvement of vast importance it should have rapidly extended. Nevertheless, so depressed became soon after the condition of affairs that at the close of 1841 but six such furnaces, capable of yielding 21,000 tons, had been put in blast. The cause of this may be found in the fact that Carolinian "legislation" had reduced the price in 1841 to little more than half of that at which it had stood in 1837, and had so reduced the powers of our people as to cause a diminution of consumption still greater than that of price.

As a consequence of this ruinous condition of affairs, so many furnaces were closed as to make it highly doubtful if the production were even half of what it had been two years before. That it was under 200,000 tons there is the best reason for believing, yet have I always placed it at 220,000, preferring to err against, rather than for, myself. All the facts, as now presented, have already been before you, but you have selected those alone which suited, at the same time asserting that all that had been published in reference to years the first of which are now under consideration, had been "mere assertions," entitled to none of that consideration which should be given to "accepted historical truths."

3. Whatsoever the policy of a country, whether protective or antiprotective, peaceful or warlike, the longer it is continued the more thoroughly its powers for good or evil become developed. To the latest years in which such policy had been maintained it was that you, therefore, were required to look when desiring to enable yourself properly to exhibit its excellencies or its defects. Have you done this? Have you given the latest of the years of protection, and exhibited the growth of iron production to 200,000 tons in 1832? Have you given the latest years of the revenue tariff system, and thus brought to light the fact that from the close of protection under the tariff of 1828 to the close of free trade under the Compromise tariff, notwithstanding an increase of population exceeding thirty per cent., there had been scarcely any increase whatsoever? None of these things, as I regret to say, have you done. Directly the reverse, you have suppressed the last years of both, to the end that you might be enabled to assure the nation that "the great anuual increase of production took place prior to the year 1840," production "in 1830 having been 165,000 tons; in 1840, 347,000; increase in ten years 110 per cent."

It has been said that "figures do not lie." That they may be made to speak the reverse of truth would seem to be here most clearly shown. Desiring now to present clearly to your eye all that has above been said of the period now under consideration, I submit another diagram presenting

First, A light line showing the entire facts, giving in all cases the figures you yourself have used; and

Second, A heavy line exhibiting the facts selected by you for presentation, and exposing the process by means of which you have so carefully thrown out of view the rise, under protection, which occurred in the years subsequent to 1830, and the great fall, under the revenue tariff sytem, which occurred in the years that followed 1840.

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Few, as I think, can study the picture thus presented without admitting the ingenuity with which your selected facts had been arranged. Whether or not they will as much admire the fairness of the presentation, it will be for time to tell.

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In another letter I propose to review the movement under the protective act of 1842, and the revenue tariff act of 1846.

HON. D. A. WELLS. PHILADELPHIA, January 26, 1869.

Yours, respectfully,

HENRY C. CAREY.

DEAR SIR:

LETTER THIRD.

The tariff of 1828 which was, as the country had been assured, almost to destroy the revenue, had, on the contrary, proved so very productive as to make it necessary wholly to emancipate from duty most, if not even all, of the commodities not competing with our domestic products, and had thus furnished conclusive evidence that the road towards financial independence and real freedom of trade was to be found in the pursuit of a policy leading to industrial independence.. Further proof of this was now being furnished, the customs revenue,. under what had been claimed as the true revenue system, having de-clined to half the amount at which it had stood in 1833, and Congress finding itself compelled, in 1841, to retrace its steps by remanding to the list of duty-paying articles a large proportion of those commodities. which had been freed by the Act of 1832. Still, however, the necessary work remained undone, each successive day bringing with it new evidence of a need for total abandonment of a policy nearly the whole period of whose existence had been passed amid financial convulsions of

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