Twenty Years of Congress Volume I Part 12

The slaves in the United States numbered about seven hundred thousand when Was.h.i.+ngton's administration was organized. They had increased to four millions when Lincoln was chosen President. Their number in 1860 was less in proportion to the white population than it was in 1789. The immigration of whites had changed the ratio. But the more marked and important change had been in the value of slave labor. In 1789 the slaves produced little or no surplus, and in many States were regarded as a burden. In 1860 they produced a surplus of at least three hundred millions of dollars. The power of agricultural production in the Southern States had apparently no limit. If the inst.i.tution of Slavery could be rendered secure, the dominant minds of the South saw political power and boundless wealth within their grasp. They saw that they could control the product and regulate the price of a staple in constant demand among every people on the globe. The investment of the South in slaves represented a capital of two thousand millions of dollars, reckoned only upon the salable value of the chattel. Estimated by its capacity to produce wealth, the inst.i.tution of Slavery represented to the white population of the South a sum vastly in excess of two thousand millions. Without slave-labor, the cotton, rice, and sugar lands were, in the view of Southern men, absolutely valueless.

With the labor of the slave, they could produce three hundred millions a year in excess of the food required for the population.

Three hundred millions a year represented a remunerative interest on a capital of five thousand millions of dollars. In the history of the world there has perhaps never been so vast an amount of productive capital firmly consolidated under one power, subject to the ultimate control and direction of so small a number of men.

THE SOUTH AND THE SLAVE-TRADE.

With such extraordinary results attained, the natural desire of slave-holders was to strive for development and expansion. They had in the South more land than could be cultivated by the slaves they then owned, or by their natural increase within any calculable period. So great was the excess of land that, at the time Texas was annexed, Senator Ashley of Arkansas declared that his State alone could, with the requisite labor, produce a larger cotton-crop than had ever been grown in the whole country. In the minds of the extreme men of the South the remedy was to be found in re- opening the African slave-trade. So considerate and withal so conservative a man as Alexander H. Stephens recognized the situation.

When he retired from public service, at the close of the Thirty- sixth Congress, in 1859, he delivered an address to his const.i.tuents, which was in effect a full review of the Slavery question. He told them plainly that they could not keep up the race with the North in the occupation of new territory "unless they could get more Africans." He did not avowedly advocate the re-opening of the slave-trade, but the logic of his speech plainly pointed to that end.

John Forsythe of Alabama, an aggressive leader of the most radical pro-slavery type, carried the argument beyond the point where the prudence of Mr. Stephens permitted him to go. In recounting the triumphs of the South, he avowed that one stronghold remained to be carried, "the abrogation of the prohibition of the slave-trade."

So eminent a man as William L. Yancey formally proposed in a Southern commercial convention, in 1858, that the South should demand the repeal of the laws "declaring the slave-trade to be piracy;" and Governor Adams of South Carolina p.r.o.nounced those laws to be "a fraud upon the slave-holders of the South." The Governor of Mississippi went still farther, and exhibited a confidence in the scheme which was startling. He believed that "the North would not refuse so just a demand if the South should unitedly ask it."

Jefferson Davis did not join in the movement, but expressed a hearty contempt for those "who prate of the inhumanity and sinfulness of the slave-trade."

Quotations of this character might be indefinitely multiplied.

The leaders of public opinion in the Cotton States were generally tending in the same direction, and, in the language of Jefferson Davis, were basing their conclusion on "the interest of the South, and not on the interest of the African." Newspapers and literary reviews in the Gulf States were seconding and enforcing the position of their public men, and were gradually but surely leading the mind of the South to a formal demand for the privilege of importing Africans. A speaker in the Democratic National Convention at Charleston, personally engaged in the domestic slave-trade, frankly declared that the traffic in native Africans would be far more humane. The thirty thousand slaves annually taken from the border States to the cotton-belt represented so great an aggregation of misery, that the men engaged in conducting it were, even by the better cla.s.s of slave-holders, regarded with abhorrence, and spoken of as infamous.

It is worthy of observation that the re-opening of the African slave-trade was not proposed in the South until after the Dred Scott decision. This affords a measure of the importance which pro-slavery statesmen attached to the position of the Supreme Court.

In the light of these facts, the repeated protests of Senator Douglas "against such schemes as the re-opening of the African slave-trade" were full of significance; nor could any development of Southern opinion have vindicated more completely the truth proclaimed by Mr. Lincoln, that the country was destined to become wholly anti-slavery or wholly pro-slavery. The financial interest at stake in the fate of the inst.i.tution was so vast, that Southern men felt impelled to seek every possible safeguard against the innumerable dangers which surrounded it. The revival of the African slave-trade was the last suggestion for its protection, and was the immediate precursor of its destruction.

In reckoning the wealth-producing power of the Southern States, the field of slave labor has been confined to the cotton-belt. In the more northern of the slave-holding States, free labor was more profitable, and hence the interest in Slavery was not so vital or so enduring as in the extreme South. There can be little doubt that the slave States of the border would have abolished the inst.i.tution at an early period except for the fact that their slaves became a steady and valuable source of labor-supply for the increased demand which came from the constantly expanding area of cotton.

But his did not create so palpable or so pressing an interest as was felt in the Gulf States, and the resentment caused by the election of Lincoln was proportionately less. The border States would perhaps have quietly accepted the result, however distasteful, except for the influence brought upon them from the extreme South, where the maintenance of Slavery was deemed vital to prosperity and to safety.

In the pa.s.sions aroused by the agitation over slavery, Southern men failed to see (what in cooler moments they could readily perceive) that the existence of the Union and the guaranties of the Const.i.tution were the s.h.i.+eld and safeguard of the South. The long contest they had been waging with the anti-slavery men of the free States had blinded Southern zealots to the essential strength of their position so long as their States continued to be members of the Federal Union. But for the constant presence of national power, and its constant exercise under the provisions of the Const.i.tution, the South would have had no protection against the anti-slavery a.s.saults of the civilized world. Abolitionists from the very beginning of their energetic crusade against slavery had seen the Const.i.tution standing in their way, and with the unsparing severity of their logic had denounced it as "a league with h.e.l.l and a covenant with death." The men who were directing public opinion in the South were trying to persuade themselves, and had actually persuaded many of their followers, that the election of Lincoln was the overthrow of the Const.i.tution, and that their safety in the Union was at an end. They frightened the people by Lincoln's declaration that the Republic could not exist half slave, half free. They would not hear his own lucid and candid explanation of his meaning, but chose rather to accept the most extreme construction which the pro-slavery literature and the excited harangues of a Presidential canva.s.s had given to Mr. Lincoln's language.

SOUTHERN CONFIDENCE IN SECESSION.

The confidence of Southern men in their power to achieve whatever end they should propose was unbounded. They apparently did not stop to contemplate the effect upon slavery which a reckless course on their part might produce. Having been schooled to the utmost conservatism in affairs of government, they suddenly became rash and adventurous. They were apparently ready to put every thing to hazard, professing to believe that nothing could be as fatal as to remain under what they termed the "Government of Lincoln." They believed they could maintain themselves against physical force, but they took no heed of a stronger power which was sure to work against them. They disregarded the enlightened philanthropy and the awakened conscience which had abolished slavery in every other Republic of America, which had thrown the protection of law over the helpless millions of India, which had moved even the Russian Autocracy to consider the enfranchis.e.m.e.nt of the serf. They would not realize that the contest they were rashly inviting was not alone with the anti-slavery men of the free States, not alone with the spirit of loyalty to the Republic, but that it carried with it a challenge to the progress of civilization, and was a fight against the nineteenth century.

CHAPTER IX.

The Tariff Question in its Relation to the Political Revolution of 1860.--A Century's Experience as to Best Mode of levying Duties.-- Original Course of Federal Government in Regard to Revenue.--First Tariff Act.--The Objects defined in a Preamble.--Const.i.tutional Power to adopt Protective Measure.--Character of Early Discussions.

--The Ill.u.s.trious Men who partic.i.p.ated.--Mr. Madison the Leader.-- The War Tariff of 1812.--Its High Duties.--The Tariff of 1816.-- Interesting Debate upon its Provisions.--Clay, Webster, and Calhoun take part.--Business Depression throughout the Country.--Continues until the Enactment of the Tariff of 1824.--Protective Character of that Tariff.--Still Higher Duties levied by the Tariff of 1828.

--Southern Resistance to the Protective Principle.--Mr. Calhoun leads the Nullification Movement in South Carolina.--Compromise effected on the Tariff Question.--Financial Depression follows.-- Panic of 1837.--Protective Tariff pa.s.sed in 1842.--Free-trade Principles triumph with the Election of President Polk.--Tariff of 1846.--Prosperous Condition of the Country.--Differences of Opinion as to the Causes.--Surplus Revenue.--Plethoric Condition of the Treasury.--Enactment of the Tariff of 1857.--Both Parties support it in Congress.--Duties lower than at Any Time since the War of 1812.--Panic of 1857.--Dispute as to its causes.--Protective and Free-trade Theories as presented by their Advocates.--Connection of the Tariff with the Election of Mr. Lincoln to the Presidency.

--General Review.

The Slavery question was not the only one which developed into a chronic controversy between certain elements of Northern opinion and certain elements of Southern opinion. A review of the sectional struggle would be incomplete if it did not embrace a narrative of those differences on the tariff which at times led to serious disturbance, and, on one memorable occasion, to an actual threat of resistance to the authority of the government. The division upon the tariff was never so accurately defined by geographical lines as was the division upon slavery; but the aggressive elements on each side of both questions finally coalesced in the same States, North and South. Ma.s.sachusetts and South Carolina marched in the vanguard of both controversies; and the States which respectively followed on the tariff issue were, in large part, the same which followed on the slavery question, on both sides of Mason and Dixon's line. Anti-slavery zeal and a tariff for protection went hand in hand in New England, while pro-slavery principles became nearly identical with free-trade in the Cotton States. If the rule had its exception, it was in localities where the strong pressure of special interest was operating, as in the case of the sugar-planter of Louisiana, who was willing to concede generous protection to the cotton-spinner of Lowell if he could thereby secure an equally strong protection, in his own field of enterprise, against the pressing compet.i.tion of the island of Cuba.

PROTECTION AND FREE-TRADE SECTIONAL.

The general rule, after years of experimental legislation, resolved itself into protection in the one section and free-trade in the other. And this was not an unnatural distinction. Zeal against slavery was necessarily accompanied by an appreciation of the dignity of free labor; and free labor was more generously remunerated under the stimulus of protective laws. The same considerations produced a directly opposite conclusion in the South, where those interest in slave labor could not afford to build up a cla.s.s of free laborers with high wages and independent opinions. The question was indeed one of the kind not infrequently occurring in the adjustment of public policies where the same cause is continually producing different and apparently contradictory effects when the field of its operation is changed.

The issues growing out of the subject of the tariff were, however, in many respects entirely distinct from the slavery question. The one involved the highest moral considerations, the other was governed solely by expediency. Whether one man could hold property in another was a question which took deep hold of the consciences of men, and was either right or wrong in itself. But whether the rate of duty upon a foreign import should be increased or lowered was a question to be settled solely by business and financial considerations. Slavery in the United States, as long experience had proved, could be most profitably employed in the cultivation of cotton. The cost of its production, in the judgment of those engaged in it, was increased by the operation of a tariff, whereas its price, being determined by the markets of the world, derived no benefit from protective duties. The clothing of the slave, the harness for the horses and mules, the ploughs, the rope, the bagging, the iron ties, were all, they contended, increased in price to the planter without any corresponding advance in the market value of the product. In the beginning of the controversy it was expected that the manufacture of cotton would grow up side by side with its production, and that thus the community which produced the fibre would share in the profit of the fabric. During this period the representatives from the Cotton States favored high duties; but as time wore on, and it became evident that slave-labor was not adapted to the factory, and that it was undesirable if not impossible to introduce free white labor with remunerative wages side by side with unpaid slave-labor, the leading minds of the South were turned against the manufacturing interest, and desired to legislate solely in aid of the agricultural interest.

It was this change in the South that produced the irritating discussions in Congress,--discussions always resulting in sectional bitterness and sometimes threatening the public safety. The tariff question has in fact been more frequently and more elaborately debated than any other issue since the foundation of the Federal Government. The present generation is more familiar with questions relating to slavery, to war, to reconstruction; but as these disappear by permanent adjustment the tariff returns, and is eagerly seized upon by both sides to the controversy. More than any other issue, it represents the enduring and persistent line of division between the two parties which in a generic sense have always existed in the United States;--the party of strict construction and the party of liberal construction, the party of State Rights and the party of National Supremacy, the party of stinted revenue and restricted expenditure, and the party of generous income with its wise application to public improvement; the part, in short, of Jefferson as against the party of Hamilton, the party of Jackson as against that of Clay, the party of Buchanan and Douglas as against that of Lincoln and Seward. Taxes, whether direct or indirect, always interest the ma.s.s of mankind, and the differences of the systems by which they shall be levied and collected will always present an absorbing political issue. Public attention may be temporarily engrossed by some exigent subject of controversy, but the tariff alone steadily and persistently recurs for agitation, and for what is termed settlement. Thus far in our history, settlement has only been the basis of new agitation, and each successive agitation leads again to new settlement.

EXPERIENCE IN TARIFF LEGISLATION.

After the experience of nearly a century on the absorbing question of the best mode of levying duties on imports, the divergence of opinion is as wide and as p.r.o.nounced as when the subject first engaged the attention of the Federal Government. Theories on the side of high duties and theories on the side of low duties are maintained with just as great vigor as in 1789. In no question of a material or financial character has there been so much interest displayed as in this. On a question of sentiment and of sympathy like that of slavery, feeling is inevitable; but it has been matter of surprise that the adjustment of a scale of duties on importations of foreign merchandise should be accompanied, as it often has been, by displays of excitement often amounting to pa.s.sion.

The cause is readily apprehended when it is remembered that the tariff question is always presented as one not merely affecting the general prosperity, but as specifically involving the question of bread to the millions who are intrusted with the suffrage. The industrial cla.s.ses study the question closely; and, in many of the manufacturing establishments of the country, the man who is working for day wages will be found as keenly alive to the effect of a change in the protective duty as the stockholder whose dividends are to be affected. Thus capital and labor coalesce in favor of high duties to protect the manufacturer, and, united, they form a political force which has been engaged in an economic battle from the foundation of the government. Sometimes they have suffered signal defeat, and sometimes they have gained signal victories.

The landmarks which have been left in a century of discussion and of legislative experiment deserve a brief reference for a better understanding of the subject to-day. Our financial experience has been practically as extended as that of the older nations of Europe.

When the Republic was organized, Political Economy as understood in the modern sense was in its elementary stage, and indeed could hardly be called a science. Systems of taxation were everywhere crude and ruthless, and were in large degree fas.h.i.+oned after the Oriental practice of mulcting the man who will pay the most and resist the least. Adam Smith had published his "Enquiry into the Nature and Causes of the Wealth of Nations" in the year of the Declaration of Independence. Between that time and the formation of the Federal Government his views had exerted no perceptible influence on the financial system of England. British industries were protected by the most stringent enactments of Parliament, and England was the determined enemy not only of free trade but of fair trade. The emanc.i.p.ated Colonies found therefore in the mother country the most resolute foe to their manufacturing and commercial progress. American statesmen exhibited wisdom, moderation, and foresight in overcoming the obstacles to the material prosperity of the new Republic.

When the administration of Was.h.i.+ngton was organized in 1789, the government which he represented did not command a single dollar of revenue. They inherited a mountain of debt from the Revolutionary struggle, they had no credit, and the only representative of value which they controlled was the vast body of public land in the North- west Territory. But this was unavailable as a resource for present needs, and called for expenditure in the extensive surveys which were a prerequisite to sale and settlement. In addition therefore to every other form of poverty, the new government was burdened in the manner so expressively described as _land poor_, which implies the owners.h.i.+p of a large extent of real estate constantly calling for heavy outlay, and yielding no revenue. The Federal Government had one crying need, one imperative demand,--money!

An immediate system of taxation was therefore required, and the newly organized Congress lost no time in proceeding to the consideration of ways and means. As soon as a quorum of each branch of Congress was found to be present, the House gave its attention to the pressing demand for money. They did not even wait for the inauguration of President Was.h.i.+ngton, but began nearly a month before that important event to prepare a revenue bill which might, at the earliest moment, be ready for the Executive approval. Duties on imports obviously afforded the readiest resource, and Congress devoted itself with a.s.siduous industry to the consideration of that form of revenue. With the exception of an essential law directing the form of oath to be taken by the Federal officers, the tariff Act was the first pa.s.sed by the new government. It was enacted indeed two months in advance of the law creating a Treasury Department, and providing for a Secretary thereof. The need of money was indeed so urgent that provision was made for raising it by duties on imports before the appointment of a single officer of the Cabinet was authorized. Even a Secretary of State, whose first duty it was to announce the organization of the government to foreign nations, was not nominated for a full month after the Act imposing duties had been pa.s.sed.

THE TARIFF ENACTED BY FIRST CONGRESS.

All the issues involved in the new Act were elaborately and intelligently debated. The first Congress contained a large proportion of the men who had just before been engaged in framing the Federal Const.i.tution, and who were therefore fresh from the councils which had carefully considered and accurately measured the force of every provision of that great charter of government.

It is therefore a fact of lasting importance that the first tariff law enacted under the Federal Government set forth its object in the most succinct and explicit language. It opened, after the excellent fas.h.i.+on of that day, with a stately preamble beginning with the emphatic "whereas," and declaring that "it is necessary for the support of government, for the discharge of the debts of the United States, _and for the encouragement and protection of manufactures_, that duties be laid on imported goods, wares, and merchandise." Among the men who agreed to that declaration were some of the most eminent in our history. James Madison, then young enough to add junior to his name, was the most conspicuous; and a.s.sociated with him were Richard Henry Lee, Theodorick Bland, Charles Carroll of Carrollton, Rufus King, George Clymer, Oliver Ellsworth, Elias Boudinot, Fisher Ames, Elbridge Gerry, Roger Sherman, Jonathan Trumbull, Lambert Cadwalader, Thomas Fitzsimons, the two Muhlenbergs, Thomas Tudor Tucker, Hugh Williamson, Abraham Baldwin, Jeremiah Van Rensselaer, and many other leading men, both from the North and the South.

It is a circ.u.mstance of curious interest that nearly, if not quite, all the arguments used by the supporters and opponents of a protective system were presented at that time and with a directness and ability which have not been surpa.s.sed in any subsequent discussion. The "_ad valorem_" system of levying duties was maintained against "specific" rates in almost the same language employed in the discussions of recent years. The "infant manufactures," the need of the "fostering care of the government" for the protection of "home industry," the advantages derived from "diversified pursuits,"

the compet.i.tion of "cheap labor in Europe," were all rehea.r.s.ed with a familiarity and ease which implied their previous and constant use in the legislative halls of the different States before the power to levy imposts was remitted to the jurisdiction of Congress.

A picture of the industrial condition of the country at that day can be inferred from the tariff bill first pa.s.sed; and the manufactures that were deemed worthy of encouragement are clearly outlined in the debate. Mr. Clymer of Pennsylvania asked for a protective duty on steel, stating that a furnace in Philadelphia "had produced three hundred tons in two years, and with a little encouragement would supply enough for the consumption of the whole Union." The Pennsylvania members at the same time strenuously opposed a duty on coal which they wished to import as cheaply as possible to aid in the development of their iron ores. The manufacture of gla.s.s had been started in Maryland, and the members from that State secured a duty on the foreign article after considerable discussion, and with the significant reservation, in deference to popular habits, that "black quart-bottles" should be admitted free.

Mr. Madison opposed a tax on cordage, and "questioned the propriety of raising the price of any article that entered materially into the structure of vessels," making in effect the same argument on that subject which has been repeated without improvement so frequently in later years. Indigo and tobacco, two special products of the South, were protected by prohibitory duties, while the raising of cotton was encouraged by a duty of three cents per pound on the imported article. Mr. Burke of South Carolina said the culture of cotton was contemplated on a large scale in the South, "if good seed could be procured." The manufacture of iron, wool, leather, paper, already in some degree developed, was stimulated by the bill. The fisheries were aided by a bounty on every barrel caught; and the navigation interest received a remarkable encouragement by providing that "a discount of ten per cent on all duties imposed by this Act shall be allowed on such goods, wares, and merchandise as shall be imported in vessels built in the United States, and wholly the property of a citizen or citizens thereof." The bill throughout was an American measure, designed to promote American interests; and as a first step in a wide field of legislation, it was characterized in an eminent degree by wisdom, by moderation, and by a keen insight into the immediate and the distant future of the country. The ability which framed the Const.i.tution was not greater than that displayed by the first generation of American statesmen who were called to legislate under its generous provisions and its wise restrictions.

These great statesmen proceeded in the light of facts which taught them that, though politically separated from the mother country, we were still in many ways dependent upon her, in as large a degree as when we were Colonies, subject to her will and governed for her advantage. The younger Pitt boasted that he had conquered the Colonies as commercial dependencies, contributing more absolutely and in larger degree to England's prosperity than before the political connection was severed. He treated the States, after the close of the peace of 1783, with a haughty a.s.sumption of superiority, if not indeed with contempt--not even condescending to accredit a diplomatic representative to the country, though John Adams was in London as Minister Plenipotentiary and Envoy Extraordinary from the United States. English laws of protection under the Pitt administration were steadily framed against the development of manufactures and navigation in America, and the tendency when the Federal Const.i.tution was adopted had been, in the planting States especially, towards a species of commercial dependence which was enabling England to absorb our trade.

TARIFF ACT APPROVED BY WAs.h.i.+NGTON.

The first tariff Act was therefore in a certain sense a second Declaration of Independence; and by a coincidence which could not have been more striking or more significant, it was approved by President Was.h.i.+ngton on the fourth day of July, 1789. Slow as were the modes of communicating intelligence in those days, this Act of Congress did, in a suggestive way, arouse the attention of both continents. The words of the preamble were ominous. The duties levied were exceedingly moderate, scarcely any of them above fifteen per cent, the majority not higher than ten. But the beginning was made; and the English manufacturers and carriers saw that the power to levy ten per cent. could at any time levy a hundred per cent.

if the interest of the new government should demand it. The separate States had indeed possessed the power to levy imposts, but they had never exercised it in any comprehensive manner, and had usually adapted the rate of duty to English trade rather than to the protection of manufacturing interests at home. The action of the Federal Government was a new departure, of portentous magnitude, and was so recognized at home and abroad.

It was not the percentage which aroused and disturbed England. It was the power to levy the duty at all. In his famous speech on American taxation in the House of Commons fifteen years before, Mr. Burke a.s.serted that it was "not the weight of the duty, but the weight of the preamble, which the Americans were unable and unwilling to bear." The tax actually imposed was not oppressive, but the preamble implied the power to levy upon the Colonies whatever tax the British Government might deem expedient, and this led to resistance and to revolution. The force of the preamble was now turned against Great Britain. She saw that the extent to which the principle of protective duties might be carried was entirely a matter of discretion with the young Republic whose people had lately been her subjects and might now become her rivals. The principle of protecting the manufactures and encouraging the navigation of America had been distinctly proclaimed in the first law enacted by the new government, and was thus made in a suggestive and emphatic sense the very corner-stone of the republican edifice which the patriots of the Revolution were aiming to construct.

The opinions of Mr. Madison as thus shown in the first legislation by Congress are the more significant from the fact that he belonged in the Jeffersonian school, believed in the strictest construction of granted power, was a zealous Republican in the partisan divisions of the day, and was always opposed to the more liberal, or, as he would regard them, the more lat.i.tudinarian views of the Federal party. In regard to the protection and encouragement of manufactures there seemed to be no radical difference between parties in the early period of the government. On that issue, to quote a phrase used on another occasion, "they were all Federalists and all Republicans." Mr. Hamilton's celebrated report on Manufactures, submitted in answer to a request from the House of Representatives of December, 1790, sustained and elaborated the views on which Congress had already acted, and brought the whole influence of the Executive Department to the support of a Protective Tariff. Up to that period no minister of finance among the oldest and most advanced countries of Europe had so ably discussed the principles on which national prosperity was based. The report has long been familiar to students of political economy, and has had, like all Mr. Hamilton's work, a remarkable value and a singular application in the developments of subsequent years.

MR. HAMILTON'S PROTECTION VIEWS.

Mr. Hamilton sustained the plan of encouraging home manufactures by protective duties, even to the point in some instances of making those "duties equivalent to prohibition." He did not contemplate a prohibitive duty as the means of encouraging a manufacture not already domesticated, but declared it "only fit to be employed when a manufacture has made such a progress, and is in so many hands, as to insure a due compet.i.tion and an adequate supply on reasonable terms." This argument did not seem to follow the beaten path which leads to the protection of "infant manufactures," but rather aimed to secure the home market for the strong and well-developed enterprises. Mr. Hamilton did not turn back from the consequences which his argument involved. He perceived its logical conclusions and frankly accepted them. He considered "the monopoly of the domestic market to its own manufacturers as the reigning policy of manufacturing nations," and declared that "a similar policy on the part of the United States in every proper instance was dictated by the principles of distributive justice, certainly by the duty of endeavoring to secure to their own citizens a reciprocity of advantages." He avowed his belief that "the internal compet.i.tion which takes place, soon does away with every thing like monopoly, and by degrees reduces the price of the article to the _minimum_ of a reasonable profit on the capital employed. This accords with the reason of the thing and with experience." He contended that "a reduction has in several instances immediately succeeded the establishment of domestic manufacture." But even if this result should not follow, he maintained that "in a national view a temporary enhancement of price must always be well compensated by a permanent reduction of it." The doctrine of protection, even with the enlarged experience of subsequent years, has never been more succinctly or more felicitously stated.

Objections to the enforcement of the "protective" principle founded on a lack of const.i.tutional power were summarily dismissed by Mr.

Hamilton as "having no good foundation." He had been a member of the convention that formed the Const.i.tution, and had given attention beyond any other member to the clauses relating to the collection and appropriation of revenue. He said the "power to raise money"

as embodied in the Const.i.tution "is plenary and indefinite," and "the objects for which it may be appropriated are no less comprehensive than the payment of the public debts, the providing for the common defense and the _general welfare_." He gives the widest scope to the phrase "general welfare," and declares that "it is of necessity left to the discretion of the national Legislature to p.r.o.nounce upon the objects which concern the general welfare, and for which under that description an appropriation of money is requisite and proper." Mr. Hamilton elaborates his argument on this head with consummate power, and declares that "the only qualification" to the power of appropriation under the phrase "general welfare" is that the purpose for which the money is applied shall "be _general_, and not _local_, its operation extending in fact throughout the Union, and not being confined to a particular spot." The limitations and hypercritical objections to the powers conferred by the Const.i.tution, both in the raising and appropriating of money, originated in large part after the authors of that great charter had pa.s.sed away, and have been uniformly stimulated by cla.s.s interests which were not developed when the organic law was enacted.

Some details of Mr. Hamilton's report are especially interesting in view of the subsequent development of manufacturing enterprises.

"Iron works" he represents as "greatly increasing in the United States," and so great is the demand that "iron furnished before the Revolution at an average of sixty-four dollars per ton" was then sold at "eighty." Nails and spikes, made in large part by boys, needed further "protection," as 1,800,000 pounds had been imported the previous year. Iron was wholly made by "charcoal,"

but there were several mines of "fossil coal" already "worked in Virginia," and "a copious supply of it would be of great value to the iron industry." Respecting "cotton" Mr. Hamilton attached far more consideration to its manufacture than to its culture. He distrusted the quality of that grown at home because so far from the equator, and he wished the new factories in Rhode Island and Ma.s.sachusetts to have the best article at the cheapest possible rate. To this end the repeal of the three-cent duty on cotton levied the preceding year was "indispensable." He argued that "not being, like hemp, an universal production of the country, cotton affords less a.s.surance of an adequate internal supply." If the duty levied on gla.s.s should not prove sufficient inducement to its manufacture, he would stimulate it "by a direct bounty."

Mr. Hamilton's conceptions of an enlarged plan of "protection"

included not only "prohibitive duties," but when necessary a system of "bounties and premiums" in addition. He was earnestly opposed to "a capitation-tax," and declared such levies as an income-tax to be "unavoidably hurtful to industry." Indirect taxes were obviously preferred by him whenever they were practicable. Indeed upon any other system of taxation he believed it would prove impossible for the Republic of 1790 to endure the burden imposed upon the public treasury by the funding of the debt of the Revolution.

More promptly than any other financier of that century he saw that ten dollars could be more easily collected by indirect tax than one dollar by direct levy, and that he could thus avoid those burdensome exactions from the people which had proved so onerous in Europe, and which had just aided in precipitating France into b.l.o.o.d.y revolution.

THE WAR TARIFF ENACTED IN 1812.