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analyzed the real sources of wealth. A very slight examination is, however, sufficient to show the fallacy of the principles on which it is founded. General Hamilton dwells at great length on the advantages resulting from the establishment of manufactures on the stimulus which they give to industry and invention, the ample field which they lay open for enterprise, and the great scope which they furnish for the exercise of the various talents and dispositions with which men are endowed. That all this, and much more, may be truly said in praise of manufactures, no one, with perbaps the exception of the Laureate, will presume to deny. But the point which General Hamilton had to consider, was not, whether the prosecution of manufacturing industry was, abstråctly considered, advantageous, but whether it was for the advantage of the United States to force the establishment of manufactures, by imposing duties and probibitions on the importation of manufactured goods from abroad? He has not, indeed, wholly overlooked this part of the question; but, as was to be expected, he has entirely failed to make good his view of the case.

That the great principle of the division of labour ought to be respected by states, as well as by individuals, is a doctrine too well established, to require us to say one word in its defence. The circumstances, too, under which America is placed, render it peculiarly incumbent on her not to lose sight of this principle. It is not easy to say what species of industry is best suited for most of the old settled and densely peopled countries of Europe, or which they may prosecute with the greatest advantage. Industry is, amongst them, in a state of perpetual oscillation; every new discovery in thearts attracting capital to manufactures, and every improvement in agriculture again drawing it back to the land. But this is not the case in America. There neither is nor can be any doubt about the species of industry which it is most for her advantage to prosecute. And it is admitted by General Hamilton, and bas been admitted by all the subsequent advocates of duties and prohibitions, that were government to abstain from interfering to protect manufactures, none but the coarser and bulkier sorts could maintain themselves, and that agriculture would draw toitself most of the capital and industry of the nation. Nor is it difficult to perceive why this should be so. The most fertile lands of England, France, and most other European countries, have been long since exhausted; and we are now compelled to resort to soils of very inferior fertility, to obtain a part of our supplies of food. But America is in a totally different situation. She is still possessed of an almost unlimited extent of fertile and unappropriated land; and it is as obviously her interest to apply herself in preference to its

cultivation, and to obtain supplies of the finer sorts of manufactured goods from nations less favourably situated for the prosecution of agricultural industry, as it is the interest of the West Indians to apply themselves to the raising of sugar and coffee. The growth of raw produce must, for a long series of years, be the most profitable species of employment in which the citizens of America can engage. There can be no doubt, indeed, that those branches of manufacture, naturally adapted to her peculiar situation, will gradually grow up and flourish in America, according as her population becomes denser, and as the advantage which now exists on the side of agriculture becomes less obvious and decided. But to encourage, by means of duties and prohibitions, the premature growth of manufactures, is plainly to force a portion of the industry and capital of the nation into channels into which it would not otherwise have flowed, because it would, but for these duties and prohibitions, be less productively employed in them, than in those in which it was already invested.

Whatever, therefore, may be said with respect to the restrictive system in other countries, in America it seems to be destitute even of the shadow of an excuse. The advantages on the side of agricultural industry are there so very signal and obvious, that to attempt forcibly to draw capital from it to manufactures, is really to adopt that precise line of conduct which is best fitted to check the progress of wealth and population. But though the advantages on the side of agriculture were less obvious than they are, the policy of the American Legislature would yet be wholly indefensible. Let it be supposed, in illustration of the effect of probibitions, that America has been accustomed annually to import a million's worth of woollens, or some other manufactured product, from Great Britain, France, or any other foreign country; and let it be farther supposed, that in order to encourage the manufacture of a similar article at home, she prohibits its importation. Now, in this case-and what is true of this case is true of all restrictions whatever-it is, in the first place, plain, that to whatever extent the home demand for the produce of American industry may be increased by the prohibition, the foreign demand for that produce will be equally diminished. Commerce is merely an exchange of equivalents; and those who refuse to import, really, by so doing, refuse to export. If America cease to buy a million's worth of produce from foreigners, she must, at the same time, cease selling to them a million's worth of some other species of produce; that is, she must cease sending to the foreigner the articles she VOL. XLVIII. No. 96.

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had previously been accustomed to export, to pay the articles obtained from him, that are in future, through the agency of the prohibition, to be raised at home. All, therefore, that she will accomplish by this measure, will be the transference of capital from one branch of industry to another. That equality of protection, to which all the citizens of the Union are justly entitled, will be encroached upon; the increase of one employment will be brought about by the depression of some other employment, which, to say the very least, was equally advantageous. But it is obviously false to affirm that such a measure can make the smallest addition to the capital and industry of the republic, or to the facilities for employing them with security and advantage.

This, however, is to look at the measure in the most favourable point of view. It is necessary, in the second place, to advert to the price at which the probibited article will benceforth be sold. If the American manufacturers could bave produced it as cheaply as the foreigners, the prohibition would not have been thought of, as the article would not have been imported. The price must, therefore, rise when its importation is prohibited. Instead of being obtainable as before for a million, it will henceforth cost, perhaps, a million and a half, or two millions. Now, it is obvious, that the effect of this artificial increase is precisely the same, as to its operation on the consumers, as if a direct and peculiar tax had, under a free system, been laid upon them of L.500,000, or L.1,000,000 a-year. But it will be observed, that had such a tax been laid on the consumers, its produce would bave come into the bands of government, and would have formed a portion of the national income; whereas, the increased cost of the article is, under the circumstances supposed, occasioned by an increased difficulty of production, and is, therefore, of no advantage to any individual.

It consequently results, that, even in those rare cases in which a restrictive regulation has no tendency to raise the price of commodities, it is injurious by changing the natural distribution of capital, and lessening the foreign demand for the produce of industry to the same extent that it increases the home demand. But in that infinitely more numerous class of cases, in which a restriction is the cause of a rise in the price of the article which it affects, it is, incomparably more injurious. Besides the injuries arising from varying the natural distribution of capital, and circumscribing the foreign trade of the country, such restriction bas the effect of imposing a heavy burden on the people, for no purpose of general or public utility, but to produce a certain and grievous mischief, by tempting individuals to withdraw from really advantageous businesses, to engage in one that cannot be prosecuted without great national loss.

The truth of what has now been stated is very strikingly exemplified by what has actually occurred in America. The manufacture of Woollen goods is one which Congress seems to have been most anxious to promote. In 1790, an ad valorem duty of 5 per cent was laid, for the sake of revenue, on all woollen cloths imported into the republic. In 1798, after the restrictive mania had begun to gather strength, the duty was raised from 5 to 12} per cent; in 1804, it was raised to 15 per cent; in 1812, during the war with England, it was increased to 27 per cent; in 1816, after peace had been restored, it was reduced to 25 per cent; and in 1824, it was nominally raised to 33}, but really to 38 per cent! This was pretty well; but it fell far short of what has since been effected. By the tariff recently passed, it is enacted, that all goods which have cost 50 cents, (28. 1 d.) a yard, or under, shall be deemed to have cost 50 cents, and shall be charged with a duty of 45 per cent ad valorem ; and it is farther enacted, that all goods which cost above 50 cents the yard, and not more than 100 cents, shall be considered as costing 100 cents, or 4s. 3d., and shall pay a duty of 45 per cent on that sum ; so that every yard of cloth shall pay a duty of 45 per cent, and that which costs 51 cents, will be valued at 100, and will consequently pay a duty of 45 cents, or nearly 90 per cent! The whole iniquity of this regulation is not apparent at first sight :-For it is so devised as to press far more heavily on the lower and middle than on the upper classes. The price of by much the largest proportion of the cloth which the former make use of varies from 50 to 100 cents a yard; and while this is loaded with a duty varying from 90 to 45 per cent, or 67} per cent at an average, superfine cloth, costing four dollars the yard, is only loaded with a duty of 50 per cent! The encouragement of smuggling and fraud seems also to have been a favourite object with the framers of this regulation ; for they have so contrived it, that if an importer can, by falsifying his papers or otherwise, succeed in sinking the price of his goods from 51 to 50 cents, he will save 45 per cent of duty! This is outheroding old George Rose, and would, we are inclined to think, satisfy even Lord Malmsbury himself. Whether, indeed, there be any regulation equally iniquitous and absurd in the commercial code of Austria or Spain, is what we very much doubt; but, objectionable and vexatious as many of our custom-house regulations certainly are, still it is satisfactory to know that the very worst amongst them is fair and reasonable compared with the above.

The population of the United States is estimated, in a very able and detailed examination of the new tariff bill by a committee of the citizens of Boston and its vicinity, at 12 millions; and the value of the annual consumption of woollen goods is supposed to amount, at an average, to 6 dollars, or 258. 6d. a-head, giving a total sum of about 72,000,000 dollars for the entire value of the woollens consumed in the Union. But if the duties were reduced, the cost of the woollens would also be reduced. It is estimated that, under the tariff of 1824, the various charges, including the duty of 38 per cent, the expense of freight and insurance, the profits of the importing and exporting merchants, &c. attending the importation of foreign woollens into the United States, amounted to full 57 per cent of their entire value. But referring for the present only to the operation of the duty, it is plain that it must have been paid before the woollens could be brought to market; and as they were imported in considerable quantities, notwithstanding its imposition, it is further plain, as has been previously remarked, that if it had been lowered or repealed, their price would have been proportionally diminished. But this is not the only fall that would have been occasioned by the reduction of the duties. The woollens manufactured in the United States sold in the market along with the foreign woollens charged with the duty of 38 per cent; and it is certain that they did not, quality for quality, sell cheaper; for bad they done so, the foreign woollens would neither have been bought nor imported. On the whole, therefore, it is undeniable that the duty under the late tariff added 38 per cent to the cost of the whole woollens consumed in the republic, or made 27,360,000 of the 72,000,000 of dollars, which their aggregate value was supposed to amount to.

The value of the annual imports of woollens amounted, under the tariff of 1824, to about 9,000,000 of dollars. The gross amount of duty on this importation amounted to 3,420,000 dollars; by deducting this sum from the 27,360,000 dollars, which the duty added to the cost of the woollens consumed in the United States, the balance of 23,940,000 dollars is the net amount of the bounty, or bonus, which the American public were obliged to pay to their countrymen engaged in the woollen manufacture, to enable them to prosecute their business. (Report, p. 19.) And yet it appears, by the confession of the manufacturers themselves, that this immense bonus bas been quite inadequate for their support. In any country not blessed with a legislature thoroughly embued with a love of all the contradictions and absurdities of the mercantile system, such a confession would have been reckoned equivalent to a declaration,

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