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ments in navigation, and by canals, turn-❘ pikes, and railroads, is a diminution of loss both to producer and consumer.

We consider it, therefore, to be a false and mischeivous maxim in political economy, that transportation adds to the value of a product, and that therefore commerce and transportation are in themselves advantageous. On the contrary, it is the duty of the economist to look upon them as obstructions of so formidable a character, and involving such an enormous waste of life and energy, as to make their diminution and facilitation the first object of private enterprise and legislative enactment.

This object is to be accomplished in two different ways; 1st, by bringing the furnace and smith-shop as near as possible to the mine; and the anvil and the loom as near as possible to the plough; and, 2d, when they are brought as near together as nature and circumstances will permit, to facilitate communication between them by the cheapest, safest, and freest modes of inter-communication.

As the object of the political economist is to give the labor of man a right direction, and to make it yield the greatest possible return, and by no means to stir up an aimless and wasteful commercial activity, he will look upon what are called the interests of commerce and trade with a jealous eye, keeping guard lest the carrier employ himself in the unnatural and unjust enlargement of his function, absorbing more than his due share of the surpluses of industry. Strictly speaking, the most odious and injurious of all monopolies are those which complicate, and render difficult and expensive, the commercial intercourse between cities of the same nation.

The loss on the transportation of raw materials to the manufacturer, being far greater than the loss by the transportation of manufactured articles, it is a necessary point of national, as it is of private economy, that the product of the field and the mine should not have to be conveyed over long distances, by land and sea, to reach the places where they are to be wrought up. It may be safely conjectured, in the absence of exact statistical proof, that the losses and expenses of transportation of the raw material fall, in great part, upon the producers.

The producer of cotton depends entirely

upon the sale of cotton, not only for the return of his labor and capital invested, but for his surplus or profit. Now as it is a much easier process to extend the production of the raw material, and to overflow the market with a particular agricultural commodity, such as cotton, than it is to overstock the market of the world with manufactures, the cotton planter lies, in a great measure, at the mercy of the manufacterer.

The cotton planter has but one purchaser, namely, the manufacturer; and that one purchaser, with capital at his disposal, and the whole world for his market, is the absolute master of the planter, especially when the latter by over production, has lost the power of retention, and is obliged, at any cost, to throw his goods upon the market.

But this is not the only disadvantage suffered by the planter: the only profit which comes to him is the first profit of production on the raw material, and out of this must be deducted part of the loss by transportation. As freights fall, the price of cotton rises, and at the same time the price of manufactured articles, received in exchange for cotton, is diminished, but not in the same proportion. Equal weights of manufactured and of raw cotton, may pay equal freights, although one be a thousand times more valuable than the other; and where the manufacturer pays ten cents to have his goods borne across the water, the seller of the raw material will pay a hundred; for it is just as difficult and as expensive for the navigator to carry a bale of raw cotton, from New York to Liverpool, as to carry an equal weight of manufactured cotton from Liverpool to New York: it is therefore absolutely certain that the disadvantage of a rise of freight to the planter, occasioning a fall in the price of cotton, is far greater than the simultaneous disadvantage of the same rise to the English manufacturer. If, therefore, it be true that the losses and expenses of transportation affect the producer more than the manufacturer, it is greatly for the interest of the producer to bring the manufacturer as near as possible to himself.

Let us take the cotton planters together as a community of interest, and consider the contingencies to which, as a body, they

are subjected by their dependence upon ❘ off their sole communication with the more distant manufacturers.

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The second contingency, is that of over production by the planters; a contingency so well understood and so much feared, as to be a subject of consultation among public conventions of planters.

The third contingency, resulting from the dependence of the planters upon one set of manufacturers, is that of suffering by extortionate prices; a circumstance very familiar to them some thirty years since.

A fourth contingency, is that of being flooded, through the competition of foreign manufacturers themselves, with an excessive abundance of cheap and worthless manufactures; those of better quality not being to be had, for any reasonable price.

A fifth contingency, is that of being obliged sometimes, if not always, to pay the freightage both of the raw and the manufactured materials, through the private or legislative management of the foreigner.

The sixth contingency, and by no means a remote one, results from the general colonial dependence, into which producers of the raw material, in a remote and half civilized community, depending on the one profit of production for their wealth, and without manufacturing resources, must necessarily fall, producing, at once, a moral, an intellectual and a pecuniary subordination.

civilized world.

The eighth contingency, is in the rivalry of other colonial dependencies producing the same kinds of raw material with themselves, as must eventually come to pass in regard to the South; the greatest efforts being now made by England, to make herself and her Asiatic colonies independent of the American cotton growers.

The ninth contingency, is from the absence of an armed artisan population in time of war, to maintain a voluntary and efficient defence of the country.

The tenth contingency, is in the absence of capital, -the sinews of war; -for the accumulation of capital by a colony dependent upon a single foreign market, and producing only one material-a material valueless until passed through machinery, is a thing unheard of and impossible. The planter extends his plantations, but he does not increase the ratio of his profits; these, on the contrary, diminish regularly as plantations extend; nor can that property be considered a safe or a desirable one, which enslaves its owner by a dependence upon so many and so formidable contingencies.

We have enumerated the disadvantages which attend the Southern system: equal and even far greater disadvantages, and affecting still more deeply the interests of the nation attend upon the system of the Northfree trade economists, which proposes to make the Northern corn-grower, like the Southern planter, dependent on the remote manufacturer. But the reader will not need to have the application of the principles detailed to him, after what has

ern

The seventh contingency, is in the event of war; an embargo, or a blockade cutting | been already said in regard to the South.

VII.

CURRENCY, BALANCE OF TRADE.

IF the entire currency of the world consisted of gold and silver coin, if its quantity were, on a sudden, increased two-fold, for every ounce of coin a second ounce being called into existence and put in circulation, there would be, as a consequence, a very considerable rise in the price of all purchaseable commodities. The abundance of coin would depreciate the value

of coin, and this depreciation would be the same with an apparent rise in the value of purchaseable commodities.

The value of the precious metals is given to them by their uses in chemistry, and in the arts. A few only are employed as currency: the others, known chiefly to chemists and manufacturers, viz., Rhodium, Iridium, Platinum and some others, have not been employed as currency, with the excep-❘ tion of Platinum, the great demand for which metal in the arts, occasioned such very large supplies of it to be procured from the ores, as to depreciate the value of this metal as specie. The values affixed to the Platinum coins of Russia, are much above the actual market value of the metal itself.

If it should happen at any time, that by the discovery of some new uses for the precious metals, in chemistry and the arts, a very large quantity of them should be withdrawn from circulation and consumed in manufacture, a proportionate rise would be felt in the value of specie, and a relative depreciation in the value of purchaseable commodities. Thus it appears, that the value of gold and silver depends, other things being equal, on its abundance or scarcity in the market.

But there are other causes of variation in the value of gold and silver. For the purposes of commerce, and for the ordinary purchase of commodities at retail, a certain amount of exchangeable property in a convenient form is needed, that can be passed readily from hand to hand. The precious metals are preferred for this purpose, and the relative value which they bear to each other is ascertained and stamped upon equal pieces of them by the government. A certain weight of silver represents one hundred pieces of a certain weight of copper. A certain weight of gold represents ten pieces of a certain weight of silver; that is to say, so much gold will purchase so much silver or copper, and so much silver will purchase so much gold or copper. The adjustment of the coinage consists chiefly in ascertaining the relative values of the three metals in use, and giving to the coined pieces of each metal, a decimal relationship to those of other metals. If, for example, copper, through great abundance, should fall to half its present value, and it was considered necessary still to make the copper coin represent one hundredth part of the silver dollar, a new coinage would have to be made of copper, either doubling the size of the present cent, or making it, with its present size, represent a half cent; and 80 of the other metals used as specie.

But there are still other causes of fluctuation in the value of the metals used for currency. Let us suppose that by an act of all

the governments of the states, it was forbidden to use bank notes under the denomination of ten dollars; it would then follow that the multifarious businesses, which are now carried on by the medium of a paper currency of small notes, would be transacted in coin; and a much larger quantity of coin would be needed than is at present in use; the need would increase the value of that coin which happened to be available at the time, and the value of gold, silver and copper coins would have a sensible rise in all parts of the country. Thus we see that the value of metals, used as currency, is given to them by several causes :

1. Their uses in chemistry, and in the arts, and

2. Their relative abundance or scarcity, as a medium of exchange.

Again. Their values fluctuate1. Relatively to each other, and

2. Relatively to purchaseable commod

ities.

When it becomes necessary, in consequence of a balance of trade against us, to remit large amounts of specie to Europe, the precious metals experience a rise in value, in consequence of the insufficiency of what is left to meet the ordinary necessities of the market.

When, on the contrary, the balance of trade is in our favor, and foreigners purchase largely of us with specie, the precious metals experience a fall, because there is more than enough for all the purposes of life.

When there is a great abundance of the precious metals in this country, and a relative scarcity in Europe or Asia, they are sent abroad for the purchase of foreign commodities; because at such times, a dollar will buy more in foreign countries, than it will at home; and thus, a scarcity of coin in foreign countries, occasioning a free exportation of specie, will make a balance of trade against us, greatly to our advantage; it is therefore necessary to make due allowance for this circumstance, in judging whether the state of our trade with foreigners is favorable or unfavorable to ourselves. Let us suppose for example, that by the creation of a great number of new banks, a vast quantity of paper currency was thrown out upon the markets, composed of small bills; and that these

were accepted by the people, instead of gold and silver; a momentary consequence of this would be a depreciation of gold and silver, and its consequent exportation, and an increase of the appearance of an unfavorable balance of trade.

ance of an unfavorable balance of trade against us.

Thus it appears that the proportion of specie to merchandise, in the comparison of exports and imports, cannot be taken, other things considered, as a perfect measure of commercial prosperity; but it is always necessary to ascertain by what other causes in the country itself, and in foreign countries, the value of specie has been affected, before we pronounce favorably or unfavorably for ourselves in regard to the

And now let us imagine the failure of all these newly created banks; their notes becoming valueless; then, all over the country there would be a rise in the relative value of gold and silver, and a consequent re-importation of the precious metals, and a diminution of the appear-Balance of Trade.

VIII.

ORGANIZATION OF INDUSTRY.

tion of journeymen working and selling in a shop of their own, can divide this profit between themselves and the buyer; selling the clothes for two dollars and a half less price, and reaping two dollars and a half advantage to themselves. If a combination of miners can establish a furnace, smelt their own ores, and sell their own products, they are enabled to divide the profits which would otherwise go to the capitalist, between themselves and the purchasers.

As it is the object both of the producer | profit of the merchant tailor; a combinaand the consumer, to secure for themselves the largest possible share of the surpluses of industry, which, by the intervention of trade and commerce, are greatly diminished, it is equally for their interest to deal justly with each other, without the intervention of brokers, tradesmen, and speculators. This idea has given rise to combinations of artisans, who abandoning the old plan of forcing the master to pay them higher wages, and of persecuting those workmen who would allow themselves to be employed for insufficient wages, have discovered that by a judicious combination, they may escape entirely out of the power of the master workman, and bring themselves in a direct contact with the purchasing public, in other words, with the consumers.

If an hundred artisans can combine for the erection of a village of their own, or of a dwelling house in the city large enough to contain them all, they save to themselves all the profits of rent, and are thus enabled to purchase more of the comforts of life, and escape the dangers of ejectment from inability to pay rent.

If the journeyman artisan can supply the market, without the intervention of a merchant or employer, he saves to himself a portion of that profit which would come to the employer. If the employer makes ten per cent. by selling the labor of his journeyman, that loss is divided between the buyer and the journeyman; but if the journeyman is able to supply the cus-profit, and subject to fewer contingencies

tomer directly, and without the intervention of a third party, the purchaser will obtain the goods at a lower rate, and the journeyman will obtain a higher wage; and so both parties are the gainers by dispensing with the dealer or master workman.

Suppose that a suit of clothes costs twenty-five dollars, five of which go to the

If several farmers can combine for the cultivation of a single great farm, the same stock and labor can be employed upon the whole, and with such a saving of time, and such an economical distribution of labor and capital, as to insure a much larger

and losses. Such is the new principle of the organization of industry, agitated by the new economists, and it is hard indeed to discover any fallacy in the reasoning which they employ to establish it.

Combinations of this kind require to be undertaken with caution, and to be conducted with extreme economy and integrity: whether they succeed or not, seems to depend entirely upon the intelligence, prudence and honesty of those who engage in them, and not upon any inherent difficulty in the system itself.

Let us suppose, for example, that a number of farmers agree to establish for themselves a store in their vicinity, which shall also be a place of deposit for the sale of the products of their farms: the manager of the store will require indeed to be supported out of their joint surpluses, and the prices paid by purchasers; the goods deposited in his care, being no property of his, the temptation to fraud on his part will be infinitely less than if he were, at once, the buyer and seller of all that pass through his hands.

As it might not be advantageous to maintain such a person by a salary, let us suppose that he is paid by a certain per centage of the profits; this per centage being regulated by an agreement between himself and the parties who employ him. Every farmer in the neighborhood would leave with the person an account of the products which he had to dispose of. This would be a necessary function of the agent in this labor and profit saving scheme, and constitute him a commission merchant, a person whose duties are already thoroughly understood and defined; nor is it probable that any improvement could be theoretically suggested for the better management of commission.

All that is advanced by the new theory, is a reduction of those enormous profits of the commission merchant, by subjecting him to the immediate supervision of a combination of producers. A wealthy combination of producers making large profits themselves, a circumstance which would happen of course, would, however, willingly allow their commissioner to make large profits: indeed, were he ever so much under their direction and influence, the superior knowledge which he would soon acquire, would make them dependent upon him in a measure, and that too, in the proportion of the service which he rendered them.

On the other hand, it would be his duty, under the new theory, to purchase for them either with their capital, or by the barter of their commodities, those luxuries and comforts for which their surplus is to be ❘

exchanged; and here again the superior knowledge and keenness of the agent gives him an unavoidable advantage over his employers, and his salary must be increased or his per centage augmented in proportion to the wealth and the profits of those for whom he acts.

We see, therefore, that the inequality of gain is a circumstance unavoidable under the present system, however exactly and judiciously organized. In fact, we are driven to the conclusion, that the new theorists are not indeed theorists, but only reformers, who, accepting the established modes and processes of commerce, desire only to give them a better shape, excluding what is irregular and mischievous, extending what is permanent and valuable, and in fine, perfecting the economical arrangements of society as they exist among ourselves.

Stripped of that ridiculous accompaniment of metaphysics and false science, with which it has been invested by Fourier and his followers, the organization of labor seems to be an effort merely to insure to industry and ability their just reward. There is indeed a science of business, and that science is economy-the law of the household; and its principles are one and the same for families, villages, towns, cities, states, and nations, under the regulation of that mind which is undefinable, that universal reason which distinguishes men above the brutes.

The first principle of economy, is doubtless, the simple necessity that the individual shall exist, that he shall sustain himself: The second, that he shall not injure, but benefit his neighbor. Justice only forbids an injury, and restrains the individual to the limits assigned him by reason and circumstance. Economy commands a benefit, and extends the activity of the individual for the good of others.

Nothing serves to illustrate the objects and principles of public economy more perfectly than the two propositions which have been already dwelt upon. The proposition, first, that the consumer and producer should be near together, to escape the losses and delays of transportation; and proposition, second, that the exchange of surpluses, between consumer and producer, should be through the fewest possible hands.

It is the fashion of a certain school of miscalled economists to look upon the

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