fourth to constitute the professional and mechanical classes; and suppose that one half of the produce of the former is sufficient to supply the whole population of the country. Now, if there were no foreign demand for the surplus products of agricultural labor, such labor would be poorly paid, and agricultural produce would bear a low price. Suppose, however, that the price of wheat is now one dol. lar a bushel, and foreign broadcloth four dollars a yard, as in the case before supposed. (§ 824.)

§ 838. We will next suppose that the government, in order to encourage domestic manufactures, imposes a duty of fifty per cent. on foreign broadcloth. A part of the capital of the country will now take a new direction. New employment will also be given to a part, (one third let us suppose,) of the three fourths of those who had been engaged in agriculture, who will now find employ in the erection of manufactories, the making of machinery, &c.; and also in the construction of roads and canals; for it is to be presumed, that the increased demand for domestic products of various kinds, which are to be conveyed from one part of the country to the other, will require increased facilities of transportation.

§ 839. One half only of the laboring population will now be employed in agriculture; and the non-producers of agricultural products composing the other half, being twice as numerous as before, it will be reasonable to suppose that the price of wheat will be at least one dollar and fifty cents. If now the price of broadcloth be six dollars a yard, the same quantity of wheat will purchase a yard as when the price of cloth was four dollars. But as the domestic article can be afforded for five dollars a yard, we may presume that the competition among the manufacturers will have reduced the price to five dollars. In this case, a less quantity of wheat will buy a yard of cloth than before. And if, as it is said facts have proved, articles of nome manufac tures eventually become as cheap as the foreign, the cou sumer will realize a still greater benefit from the protection.

prices and labor? § 838. What, in this situation of things, would be the consequence of a duty on foreign manufactures? 839. What will be the results of increasing the proportion of manufacturing

§ 840. The result, however, of no measure can be calculated with mathematical accuracy; but it is believed, that, in the case above supposed, the benefits ascribed to protection do not exceed what may be reasonably antici. pated; because the impulse given to all branches of industry by the increased demand for labor, will have a tendency to stimulate each laborer to perform a greater amount of labor; and every advance towards perfection in manufactures causes a decline in the price of manufac tured products.

§ 841. Dr. Smith admits that there are "two cases in which it will generally be advantageous to lay some burden upon foreign, for the encouragement of domestic industry." First, to encourage a particular sort of industry necessary for the defence of the country. Thus, the security of a nation is said to depend much upon the number of its sailors, and the extent of its shipping; and to encourage the building of ships, nations have enacted laws granting peculiar privileges to their own navigation. In the navigation act of Great Britain, enacted many years ago, a provision was inserted, requiring that no ships, except those whose owners or masters and three fourths of the mariners were British subjects, should be permitted to trade to British settlements and plantations, or be employed in the coasting trade. The navigation laws of this country also, give a prefer ence to our own shipping, by the imposition of discriminat. ing duties.

§842. For the same object, the security of the nation, a government may, it is said, encourage by duty, the manufacture of gunpowder, and other munitions of war, that in case of an interruption of its trade with other nations in times of war, it may not be dependent on them for the means of defence. But if it be proper for a nation to make itself independent of others for these, why is it not expedient to be independent for food and clothing also? The

labor? 840. How does the demand for labor affect the quantity performed by each laborer? How does improvement in manufactures affect their price? § 841. For what reason does Smith admit the propriety of encouraging domestic navigation, by discriminating du ties ? § 842. What particular articles of manufactures are en

want of these, though less serious at such a crisis, would be attended with great inconvenience and difficulty.

§843. The second case in which the propriety of a tax upon foreign industry is admitted, is, when a commodity of home production is already subject to duty abroad. It may then be proper to impose a duty on a like article of the foreign country. Suppose that the United States were at present dependent for manufactured goods on Great Britain; and that the latter should exclude our agricultural productions from her markets by prohibitory duties, choosing to supply her own population. It is evident that we could gain nothing by imposing a like duty upon her grain, because she produces none for exportation. Would it not be necessary to tax her manufactures?

844. But it is said, that two countries seldom excel in the production of the same kind of commodities; and that it is for their mutual interest to confine their industry to the production of those commodities in which they respectively excel, and to procure, by exchange, what they do not them. selves produce. But nations may mistake their true interests; and, therefore, whether a nation injure or benefit itself by a restrictive policy, other nations can gain the advantages of equal trade, only by the adoption of a simila: policy.

CHAPTER X.

The Encouragement of Domestic Industry, continued.-Origin of the Protective System in this country.

§845. In the last two chapters have been presented, briefly, the opinions of political economists, concerning the policy of encouraging domestic industry by protective duties. As

couraged for the same reason? § 843. In what other cases is the propriety of a tax on foreign industry admitted? 844. In what case does the adoption of a restrictive policy become necessary

the protective principle constitutes one of the most promi nent features in the policy of the principal commercial nations; and as it is deemed important that every citizen understand the measures of the government under which he lives; it is proposed, for the benefit of the American student, to pursue the subject in the present chapter, by exhibiting the authority and reasons for the adoption of the protective system of the United States; together with its origin, progress, and supposed practical operations.

§846. The inefficiency of the former government of the United States, has frequently been alluded to in the progress of this work. One of the material defects of the confed. eration, was considered to be the want of provision for countervailing the restrictions imposed upon our trade and commerce by foreign nations. Soon after the peace of 1783, and the restoration of commerce between this country and Great Britain, the disadvantages of the restrictive measures of the latter began to be again realized. Complaints became general; and attempts were made by the states, separately, to counteract the unequal laws of Great Britain. But owing to the weakness of the federal government, and the want of concurrence among the state governments, in any system of measures, she was enabled to avail herself of the benefits of the freedom of trade allowed by our laws, and the monopolies secured to her by her own.

§ 847. A convention of commissioners from the several states was at length proposed, for the purpose of providing some remedy for the evils complained of. Commissioners from some of the states assembled; but finding their powers inadequate, they proposed a convention on a more enlarged plan, for a general revision of the federal government. "From this convention," says one of its members, (Mr. Madison,)" proceeded the present federal constitution, which gives to the general will the means of providing, in the several necessary cases, for the general welfare; and par. ticularly in the case of regulating our commerce in such manner as may be required by the regulation of other coun

§ 846. What was the condition of this country after the peace of 1783, in respect to its trade with Great Britain? § 847. What measures were taken to remedy the evils complained of? § 848. What

tries." At the first session of the first congress under the new constitution, a law was passed, one of the declared objects of which was, "the encouragement and protection of domestic manufactures, by duties on goods, wares, and merchandise imported."

§848. The opinions of the framers of the government respecting the expediency of encouraging domestic industry by protective duties, were the same as are held by the advocates of protection at the present day. It was the opinion of Washington, that "our country ought not to remain dependent on foreign supply, always precarious, because liable to be interrupted."

§ 849. It was remarked by Mr. Jefferson, that, "when a nation imposes high duties on our productions, or prohibits them altogether, it may be proper for us to do the same by theirs." In relation to the protection of manufactures, he observed: "The oppressions on our agriculture, in foreign ports, would thus be made the occasion of relieving it from a dependence on the councils and conduct of others, and of promoting arts, manufactures, and population at home." At a later period, he remarked that "the history of the last twenty years had been a sufficient lesson for us to depend for necessaries on ourselves alone."

the

§ 850. In recommending to congress some action upon subject of protection, Mr. Madison, after expressing the belief that manufacturing industry, by a proper encourage. ment," will become, at an early day, not only safe against competitions from abroad, but a source of domestic wealth, and even of external commerce," continues as follows: "In selecting the branches more especially entitled to the public patronage, a preference is obviously claimed by such as will relieve the United States from a dependence on foreign sup. plies, ever subject to casual failures, for articles necessary for the public defence, or connected with the primary wants of individuals."

§ 851. Respecting the effect of protection upon price,

was the opinion of Washington on the propriety of protection? § 849. State the reasons of Jefferson in favor of the same principle. § 850. For what reasons did Madison recommend the subject to the action of Congress? § 851. What was the opinion of Hamilton as to the