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farmer and the smith, have hitherto very much misunderstood their own interest. And with regard to the internal trade of a country, in which the same rule would apply as between nations, do we ever speak of such an intercourse being prejudicial to one side because it is useful to the other? Do we ever hear that, because the intercourse between New York and Albany is advantageous to one of those places, it must therefore be ruinous to the other?

May I be allowed, sir, to read a passage on this subject from the observations of a gentleman, in my opinion one of the most clear and sensible writers and speakers of the age upon subjects of this sort? * "There is no political question on which the prevalence of false principles is so general, as in what relates to the nature of commerce and to the pretended balance of trade; and there are few which have led to a greater number of practical mistakes, attended with consequences extensively prejudicial to the happiness of mankind. In this country, our parliamentary proceedings, our public documents, and the works of several able and popular writers, have combined to propagate the impression that we are indebted for much of our riches to what is called the balance of trade." "Our true policy would surely be to profess, as the object and guide of our commercial system, that which every man who has studied the subject, must know to be the true principle of commerce, the interchange of reciprocal and equivalent benefit. We may rest assured that it is not in the nature of commerce to enrich one party at the expense of the other. This is a purpose at which, if it were practicable, we ought not to aim; and which, if we aimed at, we could not accomplish." These remarks, I believe, sir, were written some ten or twelve years ago. They are in perfect accordance with the opinions advanced in more elaborate treatises, and now that the world has returned to a state of peace, and commerce has resumed its natural channels, and different nations are enjoying, or seeking to enjoy, their respective portions of it, ali see the justness of these ideas; all see, that, in this day of knowledge and of peace, there can be no commerce between nations but that which shall benefit all who are parties to it.

If it were necessary, Mr. Chairman, I might ask the attention of the Committee to recur to a document before us, on this subject, of the balance of trade. It will be seen by reference to the accounts, that, in the course of the last year, our total export to Holland exceeded two millions and a half; our total import from the same country was but 700,000 dollars. Now can any man be wild enough to make any inference from this of the gain or loss of our trade with Holland for that year? Our trade with Russia for the same year, produced a balance the other way; our import being two millions, and our export but half a million. But this has no more tendency to show the Russian trade a losing trade, than the other statement has to show that the Dutch trade has been a gainful one. Neither of them, by itself, proves anything.

Springing out of this notion of a balance of trade, there has been another idea, which has been much dwelt upon in the course of this debate; that is, that we ought not to buy of nations who do not buy of us; for example, that the Russian trade is a trade disadvantageous to

* Mr. Huskisson, President of the English Board of Trade.

the country, and ought to be discouraged, because, in the ports of Russia, we buy more than we sell. Now allow me to observe, in the first place, sir, that we have no account showing how much we do sell in the ports of Russia. Our official returns show us only what is the amount of our direct exports to her ports. But then we all know that the proceeds of other of our exports go to the same market, though indirectly. We send our own products, for example, to Cuba, or to Brazil; we there exchange them for the sugar and the coffee of those countries, and these articles we carry to St. Petersburg, and there sell them. Again; our exports to Holland and Hamburg are connected directly or indirectly with our imports from Russia. What difference does it make, in sense or reason, whether a cargo of iron be bought at St. Petersburg by the exchange of a cargo of tobacco, or whether the tobacco has been sold on the way, in a better market, in a port of Holland, the money remitted to England, and the iron paid for by a bill on London? There might indeed have been an augmented freight, there might have been some saving of commissions, if tobacco had been in brisk demand in the Russian market. But still there is nothing to show that the whole voyage may not have been highly profitable. That depends upon the original cost of the article here, the amount of freight and insurance to Holland, the price obtained there, the rate of exchange between Holland and England; the expense, then, of proceeding to St. Petersburg, the price of iron there, the rate of exchange between that place and England, the amount of freight and insurance home, and finally, the value of the iron, when brought to our own market. These are the calculations which determine the fortune of the adventure; and nothing can be judged of it, one way or the other, by the relative state of our imports or exports with Holland, England, or Russia.

I would not be understood to deny that it may often be our interest to cultivate a trade with countries that most require such commodities as we can furnish, and which are capable also of directly supplying our own wants. This is the simplest and most original form of all commerce, and is, no doubt, highly beneficial. And some countries are so situated, doubtless, that commerce, in this original form, or something near it, may be all that they can, without considerable inconvenience, carry on. Our trade, for example, with Madeira and the Western Islands, has been useful to the country as furnishing a demand for some portion of our agricultural products, which probably could not have been bought, had we not received their products in return. Countries situated still farther from the great marts and highways of the commercial world, may afford still stronger instances of the necessity and utility of conducting commerce on the original principle of barter, without much assistance from the operations of credit and exchange. All I would be understood to say is, that it by no means follows that that must be a losing trade with any country, from which we receive more of her products than she receives of ours. And since I was supposed the other day, in speaking upon this subject, to have advanced opinions which not only this country ought to reject, but which also other countries, and those the most distinguished for skill and success in commercial intercourse, do reject, I will ask leave to refer again to the discussion

which I first mentioned in the English Parliament, relative to the foreign trade of that country. "With regard," says the mover* of the proposition, "to the argument employed against renewing our intercourse with the north of Europe, namely, that those who supplied us with timber from that quarter would not receive British manufactures in return, it appeared to him futile and ungrounded. If they did not send direct for our manufactures at home, they would send for them to Leipsic and other fairs of Germany. Were not the Russian and Polish merchants purchasers there to a great amount? But he would never admit the principle, that a trade was not profitable, because we were obliged to carry it on with the precious metals, or that we ought to renounce it, because our manufactures were not received by the foreign nation, in return for its produce. Whatever we received must be paid for in the produce of our land and labor, directly or circuitously, and he was glad to have the noble Earl's marked concurrence in this principle."

Referring ourselves again, sir, to the analogies of common life, no one would say, that a farmer or a mechanic should buy only where he can do so by the exchange of his own produce, or of his own manufacture. Such exchange may be often convenient; and, on the other hand, the cash purchase may be often more convenient. It is the same in the intercourse of nations. Indeed, Mr. Speaker has placed this argument on very clear grounds. It has been said, in the early part of the debate, that if we cease to import English cotton fabrics, England would no longer continue to purchase our cotton. To this, Mr. Speaker has replied, with great force and justice, that, as she must have cotton in large quantities, she will buy the article where she can find it best and cheapest; and that it would be quite ridiculous in her, manufacturing as she still would be, for her own vast consumption, and the consumption of millions in other countries, to reject our uplands because we had learned to manufacture a part of them for ourselves. And would it not be equally ridiculous in us, if the commodities of Russia were both cheaper, and better suited to our wants, than could be found elsewhere, to abstain from commerce with her, because she will not receive, in return, other commodities which we have to sell, but which she has no occasion to buy?

Intimately connected, sir, with this topic, is another, which has been brought into the debate; I mean, the evil so much complained of-the exportation of specie. We hear gentlemen imputing the loss of market at home to a want of money, and this want of money to the exportation of the precious metals. We hear the India and China trade denounced, as a commerce conducted on our side, in a great measure, with gold and silver. These opinions, sir, are clearly void of all just foundation, and we cannot too soon get rid of them. There are no shallower reasoners, than those political and commercial writers, who would represent it to be the only true and gainful end of commerce, to accumulate the precious metals. These are articles of use, and articles of merchandise, with this additional circumstance belonging to them, that they are made, by the general consent of nations, the standard by which the value of all other merchandise is to be estimated. In regard to weights and measures, something drawn + Lord Liverpool.

* Marquis of Lansdowne.

from external nature is made a common standard, for the purposes of general convenience; and this is precisely the office performed by the precious metals, in addition to those uses to which, as metals, they are capable of being applied. There may be of these, too much or too little, in a country, at a particular time, as there may be of any other articles. When the market is overstocked with them, as it often is, their exportation becomes as proper and as useful as that of other commodities, under similar circumstances. We need no more repine, when the dollars, which have been brought here from South America, are despatched to other countries, than when coffee and sugar take the same direction. We often deceive ourselves by attributing to a scarcity of money, that which is the result of other causes. In the course of this debate, the honorable member from Pennsylvania has represented the country as full of everything but money. But this, I take to be a mistake. The agricultural products, so abundant in Pennsylvania, will not, he says, sell for money; but they will sell for money as quick as for any other article which happens to be in demand. They will sell for money, for example, as easily as for coffee, or for tea, at the prices which properly belong to those articles. The mistake lies in imputing that to want of money, which arises from want of demand. Men do not buy wheat because they have money, but because they want wheat. To decide whether money be plenty or not, that is, whether there be a large portion of capital unemployed or not, when the currency of a country is metallic, we must look, not nly to the prices of commodities, but also to the rate of interest. A low rate of interest, a facility of obtaining money on loans, a disposition to invest in permanent stocks, all of which are proofs that money is plenty, may nevertheless often denote a state not of the highest prosperity. They may, and often do, show a want of employment for capital; and the accumulation of specie shows the same thing. We have no occasion for the precious metals as money, except for the purposes of circulation, or rather of sustaining a safe paper circulation. And whenever there be a prospect of a profitable investment abroad, all the gold and silver, except what these purposes require, will be exported. For the same reason, if a demand exist abroad for sugar and coffee, whatever amount of those articles might exist in the country, beyond the wants of its own consumption, would be sent abroad to meet that demand. Besides, sir, how should it ever occur to anybody, that we should continue to export gold and silver, if we did not continue to import them also? If a vessel take our own products to the Havana, or elsewhere, exchange them for dollars, proceed to China, exchange them for silks and teas, bring these last to the ports of the Mediterranean, sell them there for dollars, and return to the United States; this would be a voyage resulting in the importation of the precious metals. But if she had returned from Cuba, and the dollars obtained there had been shipped direct from the United States to China, the China goods sold in Holland, and the proceeds brought home in the hemp and iron of Russia, this would be a voyage in which they were exported. everybody sees, that both might be equally beneficial to the individuals and to the public. I believe, sir, that, in point of fact, we have

Yet

enjoyed great benefit in our trade with India and China, from the liberty of going from place to place all over the world, without being obliged in the meantime, to return home-a liberty not heretofore enjoyed by the private traders of England, in regard to India and China. Suppose the American ship to be at Brazil, for example— she could proceed with her dollars direct to India, and, in return, could distribute her cargo in all the various ports of Europe, or America: while an English ship, if a private trader, being at Brazil, must first return to England, and then could only proceed in the direct line from England to India. This advantage, our countrymen have not been backward to improve; and in the debate to which I have already so often referred, it was stated, not without some complaint of the inconvenience of exclusion, and the natural sluggishness of monopoly, that American ships were at that moment fitting out in the Thames, to supply France, Holland, and other countries on the continent, with tea; while the East India Company would not do this of themselves, nor allow any of their fellow countrymen to do it for them.

There is yet another subject, Mr. Chairman, upon which I would wish to say something, if I might presume upon the continued patience of the Committee. We hear, sometimes, in the House, and continually out of it, of the rate of exchange, as being one proof that we are on the downward road to ruin. Mr. Speaker himself has adverted to that topic, and I am afraid that his authority may give credit to opinions clearly unfounded, and which lead to very false and erroneous conclusions. Sir, let us see what the facts are. Exchange on England has recently risen one or one and a half per cent., partly owing, perhaps, to the introduction of this bill into Congress. Before this recent rise, and for the last six months, I understand its average may have been about seven and a half per cent. advance. Now, supposing this to be the real, and not merely, as it is, the nominal par of exchange, between us and England, what would it prove? Nothing, except that funds were wanted, in England, for commercial operations, to be carried on either in England or elsewhere. It would not necessarily show that we were indebted to England: for, if we had occasion to pay debts in Russia or Holland, funds in England would naturally enough be required for such a purpose. And even if it did prove that a balance was due England, at the moment, it would have no tendency to explain to us whether our commerce with England had been profitable or unprofitable. But it is not true, in point of fact, that the real price of exchange is seven and a half per cent. advance, nor, indeed, that there is, at the present moment, any advance at all. That is to say, it is not true, that merchants will give such an advance, or any advance, for money in England, more than they would give for the same amount, in the same currency, here. It will strike every one, who reflects upon it, that, if there were a real difference of seven and a half per cent. money would be immediately shipped to England; because the expense of transportation would be far less than that difference. Or, commodities of trade would be shipped to Europe, and the proceeds remitted to England. If it could so happen, that American merchants should be willing to pay ten per cent. premium for money in England,

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