white population. The slave cannot average one-third of this amount. The great consumers are the whites, both Southern and Northern. Let us allow for this difference, and the consumption of foreign imports in the slave States will fall below three tenths of the entire importation." p. 374.

The inference might be drawn, that if the slave consumed less of the costly imports, he consumed more of the coarser domestic manufactures, so that he used an average share of the whole mass of goods foreign and domestic. If this were Mr. Derby's meaning, it would be useless to dispute it, for, as we have seen, the theory that the consumer pays the duties, involves the payment of more than three times as much in the increased price of the home manufactures, and the Southern burden would be shifted from one shoulder to the other; it would still be in proportion to her whole population. But I suppose that the reviewer's meaning is different, and he believes that the whole consumption of the Southern population is less per head than the Northern, because the day laborers are slaves, instead of hirelings. For the only reason he gives for such a strange assumption, is that the slaves at the South cannot average one-third of the consumption per head of the whole white population. The very phrasing of this proposition is delusive. The question is not whether the laborers, North or South, consume as much as their employers, or whether the average consumption of the slaves isequal not only to that of the Northern population, but to that of their own masters besides; but whether the average consumption of the whole Southern population per head, masters and slaves, is equal to that of the Northern employers and day laborers. Thus stated, it is deprived of the deceptive air which Mr. Derby attempts to throw around it. In every country in the world, there is a large class of persons who live by daily labor, that is, upon wages. In the North they are hirelings, and receive their wages in money; in the South they are slaves, and receive their wages in maintenance and lucrative privileges. I can imagine no reason why the former class should be supposed to consume more than the latter. No laborers in the world receive larger wages than the slaves in the greater part of the Southern country, or have a larger supply of wholesome though plain food. The slave is well, though coarsely clad; he may not wear "costly linens and silks," but does the hireling of the North? He lives on his wages, and upon the same fund must be charged his doctor's bills, house rent, and fuel, and the provision for his old age, and infant children, (all of which are provided by the master for the slave,) and I presume, the surplus cannot supply very costly clothes or luxurious fare. The peculium of the slave, what he makes for himself in his holidays, &c., is often considerable, and he consumes it all. This whole notion belongs to the same confusion of words and ideas, which speaks of the slave labor and free labor States, instead of more accurately saying, slave labor and hireling labor States; the correct designation is not slave States and free States, but slave States and hireling States, and so I shall hereafter call them.

But it cannot be disputed that the master and slave together at the South, that is, capital and labor, produce as much as equal capital and labor at the North. In fact, it is well established, that whether it be due to institutions, climate, or soil, the people of the South produce more per head than the people of the North. And of course their consumption bears at least as large a ratio to their production as that of the frugal Northerners. The master and slaves consume their joint productions, if we suppose the latter class consumes less, it is only because the former consumes more.

When

Mr. Derby asks whether "the slave uses the costly linens, silks, woolens, liquors, coffee, sugar, tea, and other valuables from abroad?" he forgets that some of these articles, as tea and coffee, are free, and that all costly goods have been comparatively lightly taxed under the system of specific duties, which prevailed until 1846. For the real question is, not who consumes the imports, but who consumes the imports on which the duties are levied. Now it appears, by the document before referred to, (444 Sen. Doc., 1845-6,) nearly two-thirds of the customs were levied on sixteen articles, and the heaviest duties were placed upon such as are chiefly consumed on Southern plantations. The duty on salt was 77 per cent, on iron 35 to 116 per cent, on cotton bagging 55 to 123 per cent, on coarse woolens 40 to 100 per cent, on coarse cottons 30 to 160 per cent, on negro head handkerchiefs 108 per cent, &c. Can it be pretended that such articles as these are less used on Southern plantations than Northern farms, because the laborers are slaves on the one and hirelings on the other?

To make the subject still plainer, let us inquire how far it is true, as Mr. Derby maintains that the consumer pays the duties, and examine his objections to the position assumed in the pamphlet, that they fall on the sections in the ratio of the foreign exports of their produce. He says that the "touchstone" of this theory is the question, "Do the exports carry the title to the importations?" I answer that, for all the purposes of the present discussion, they do, as the latter are certainly bought with the former, and coastitute the value received for them. The case is not changed by a New England merchant intervening to buy the exports, in order to sell them abroad for the imports. What he can pay for them plainly depends on what he can sell for again-that is, upon the value of the imports he receives in return. Take Mr. Derby's "case in point. A New England ship sails for Charleston with a cargo of granite, ice, fish, and manufactures. She exchanges these for lumber, rice, and cotton. She then sails for Liverpool, makes freight and profit, then to Cardiffe, where the proceeds are invested in slate, or iron, and returns to Boston," (p. 373.) Now " as the South has nothing to do with these imports," she has a good deal to do with the duties paid upon them. If the importer can add the whole duty to the cost, then the price is raised, and so must be the price of the domestic slate or iron; both will fall on the consumer, and we have just seen what would be the effect on the South. But if the importer cannot so raise the price, then the whole duty, or a part of it, falls on him; his cargo of slate or iron is worth just so much less to him, and as his object was profit, he must pay as much less for the Southern "lumber, rice, and cotton," which he bought to exchange for the slate or iron. In this case, it is perfectly true that "the imports are reduced in price," or rather their whole value to the importer is reduced "by the duties, and thus the exports are impaired in value;" and it was only in this sense that the pamphlet ever asserted anything of the kind. And such is the true answer to Mr. Derby's objection, "that upon this theory, properly extended, the true exports, which are indebted to the imports, are the productions of the North shipped to the South; there converted into cotton, tobacco, and rice, and in that shape exported, they buy for the North a large proportion of the imports; and hence it appears that if the duty is paid by any producer, it must be by the producer of the exports for the foreign markets, and that is the Southern producer.

Even if the whole duty could be thrown upon the consumers, by a rise in the price of the imported goods, it could only be in consequence of a di

minished supply obtained from abroad. But if less was bought from the foreign, he could buy less; his ability to pay for the cotton, &c., would be impaired, and its price would be reduced at home and abroad by this restriction in the market. Thus in whatever character the South is viewed, whether as producer or consumer, she bears a burden more than proportionate to her share of the exports.

Mr. Derby attempts to escape the force of this reasoning, by saying the South may exchange her exports abroad for specie, which is free, instead of goods which are taxed. He says, "the party who exports may not only receive his payment abroad, in coin or drafts, but if he takes goods, is not bound to bring them home; the markets of the world are open to him; those markets, not ours, fix their value," (p. 374. Did it never occur to Mr. Derby that these goods are of no use to the receiver, until they are brought home, or something in their place? And if "the markets of the world are open to him," his own is not; for whatever he brings home must pay the custom-house before it can be used. But we are told he may bring back specie, which is free. This operation cannot be carried far; no nation can retain more than her just proportion of the specie of the world. The attempt would soon raise money prices at home, and reduce them abroad, which would occasion an increased importation of goods; and as these must be paid for in specie, cheap here, and dear there, the balance would soon be restored. This argument is familiar to every tyro in political economy, and it is useless to enter into it at large here. I will rather remind Mr. Derby of a few facts which are conclusive for the present question. As the pamphlet says "it would be asking an impossibility, to demand nothing but specie in payment, when the exports of cotton alone are more than the whole annual produce of gold and silver in the world, before the discovery of the California mines. But it is useless to argue what may be; the quesion here is, not what the producer could do, but what he actually did," we may fairly presume that the exports were sold, as well as the circumstances permitted, and the exporter took payment in such articles as, upon the whole, yielded the best profit. Now the records show that payment was chiefly made in goods, upon which more than a billion of dollars have been paid. The true question is, who paid these $1,050,000,000 of taxes, on the $3,700,000,000 of imports, and not whether the payers could have escaped, if they had been smart enough to bring the $3,700,000,000 home in specie; more than the whole amount in the world.

It is truly surprising that a gentleman of Mr. Derby's intelligence should resort to this "broken down theory" of the old mercantile school, and should imagine that the precious metals are the ultimate objects of the trade of the world. He refuses to see that they are only the instruments by which balances are paid, and the measure by which the exchanges are estimated. The trade of the world consists in a great interchange of commodities between the various producers, who are all, in their turn, consumers, to the extent of their production; and the factors, and merchants, and shippers, who so disturb Mr. Derby's vision, intervene only to bring the distant producers more conveniently together. They may abstract their commissions, profits, and freights, from the commodities exchanged, as a compensation for the labor of exchanging them; but when the operation is analyzed, we are always brought back, at last, to the several producers, and it is upon the relative cost of production that the supply of their several productions depend, which again determines the rate at which they are interchanged-that is,

their value. Now three-fourths of our foreign trade consists in an exchange of Southern for foreign products; and when, by means of a duty, one-third, or any proportion of the value of the latter goes into other hands than those of the Southern producers, the loss must inevitably, in some shape or other, either directly or indirectly, fall on them. For the whole controversy, as to whether the duties are paid by the producer or consumer, springs out of a confusion of ideas, which hides the fact that the producers are the consumers. Every man's consumption depends simply upon his ability to buy-that is, upon his production. Now when the productions of one class, or section of a community, are different from those of the rest, it must evidently pay any tax which may be imposed upon the goods for which these productions are, and must be exchanged.

To illustrate this reasoning, let us trace out the ordinary and most complicated case. The Southern planter sells his cotton to a merchant in Charleston, who again ships and sells to a merchant in New York, who, in his turn, ships and sells in Liverpool. So far, it is plain that the Charleston merchant can afford to pay the planter only what the cotton will net in New York, after deducting his profits, and the result is, that the price paid the planter depends on the Liverpool price, precisely as if he had shipped directly; though in one case he may have to pay more profits and expenses to the intervening agents, than in the other. Meantime, he buys the goods he wants of the retailers in his neighborhood. The price he pays depends on what the retailer has to pay to the New York wholesale merchant, of whom he procures them, and that again depends on what the wholesale merchant has to pay to those of whom he buys, either the domestic manufacturer or the importer. What the latter sells for depends on the foreign cost, added to the expenses and duty, and the former, of course, charges an equal price for similar articles. The retailer pays the New York wholesale merchant in drafts on the New York cotton merchant, which are paid him by the planter, or his Charleston merchant.

But the New York wholesale merchant pays the manufacturer and importer in these very drafts; and, in either case, they are presented to the cotton merchant, who has to pay them out of the proceeds of the cotton in Liverpool. Therefore, out of this fund, all are paid in the end; for, if the New York cotton merchant sells his Liverpool drafts, so as to pay money to the manufacturer and importer, yet the purchasers must themselves be those who want money abroad-that is, importers. Hence the value of the cotton drafts depends upon the demand of the importers, which is measured by the quantity of the importations. But that depends on their means of purchasing, which again depends on the proceeds of their previous importations. And as the duty has to be paid out of these proceeds, (unless it is thrown by a rise of price on the consumer,) the value of the cotton drafts is pro tanto diminished; and we have seen that upon that value depends the price received by the Southern planter or producer. But if the price is raised by the duty, so as to avoid this consequence, then the cotton drafts bring, and the planter receives, as much money as before. But the same sum of money is worth less to him; for he, or the retail merchant who supplies him, or the New York wholesale merchant who supplies the retailer, can buy less of imported goods with it than before-as much less as the duty raises the price; nor can he buy as much of the domestic goods; for if these domestic goods were of the same kind with the foreign, of course their price will be raised to the same level. If of a different kind, then the manufacturer, who

was only making a fair average profit before, now finds that selling his goods at the same price, while other goods have risen, he is no longer as well paid for his labor as his neighbors, and his profit is below an average. He must, therefore, sell his goods proportionally higher, which he can easily accomplish by lessening the supply, and diverting part of his capital either to producing the protected articles, or importing, which ex-hypothesi still pays the same profits. It may be said this would increase the supply, and thereby lessen the price of the protected and imported articles. But in that event, the price of the imports would no longer pay the duties and cost; the duty would not be all thrown on the consumer, and we should have the case before supposed; the value of the cotton duties would be proportionally diminished, and, of course, the price of cotton. Therefore, it appears that the producer of goods for the foreign market must pay the duties, or suffer a loss equal to them, either as the exporter of his own produce, or as the consumer of what is bought with its proceeds, either in the home, or foreign market. There is no way of escaping this conclusion.

What is here true of the individual planter, is equally true of all planters, and the whole South collectively; on such conditions are all her surplus products exchanged for foreign, or Northern goods, for her consumption; and by buying dearer, and selling cheaper, she pays a tax fully in proportion to the whole production and consumption.

In the case just supposed, the Southern planter exports and imports to and from Liverpool, indirectly through New York, instead of directly through Charleston. On his sales of produce, he pays a profit or commission to the New York merchant, the expenses of handling and transhipment in New York to her laborers, and the excess of freight and insurance to New York, and thence to Liverpool, over the freight and insurance direct from Charleston to Liverpool; the whole being over and above the cost of a direct exportation. On his consumption, as compared with a direct importation, he loses a like difference of freight, and he pays profits, commissions, and expenses of landing, and handling, to New York merchants and laborers, instead of Charleston, besides the cost of transhipping in New York.

Now such is actually the case (see tables A., 1, 2, 3, 4, of the pamphlet) with 22 per cent of the exports of Southern produce, and 85 per cent of the imports which are taken in exchange for them, amounting together, in 1848, to about $120,000,000, and still more this year.

What this large trade is worth to the North, I cannot exactly estimate. The freight from Charleston or Norfolk to New York, and thence to Liverpool, is much greater than it would be direct. The difference is particularly great, from the fact that while the coasting trade is entirely closed by our navigation laws to all foreign vessels, the foreign trade has been partially open, and is now entirely so, under the reciprocity treaties. Therefore, the coasting freight to New York is not "regulated by the Trans-Atlantic," and is particularly high as compared with the freight abroad. I cannot suppose that the whole difference of cost, in profits, transhipment, freight, &c., &c., between the direct and indirect trade can be less than 20 per cent. Thus in 1848, at least $24,000,000 were lost to the South, and paid to Northern merchants, laborers, and shippers.

When the pamphlet called attention to the enormous amount of the exports of Southern produce, and of the imports paid for them, which were carried through Northern ports, it spoke of it as a Southern capital, the use of which the South lost, and the North gained, without any equivalent paid.