Importations of Bar Iron-Increase of Rail-roads-Protection. 495 prepared for the change, and have in The time has arrived when we must look many instances been put to serious in- more closely into our estimates of exconvenience. It is by no means extra- penditures in constructing rail-roads; and ordinary that iron, or any other article, as the cost of iron is a very important should command remunerating prices; item, it is possible the increased and but it is strange that, during such a de- increasing value of this article may mand as has existed for years past, both tend materially to check the progress in this country and in Europe, prices of these improvements. Rail-roads which should remain so much depreciated now, have been built within the past four or that when the rail-road mania has par- five years, have purchased their rails in tially subsided, the value of the raw England, at prices considerably below material should become so much en- the cost of manufacture. Roads now hanced. Nearly all the great rail-roads in course of construction, contracts for in this country, in the course of construc- ironing which have not been made, will tion, secured the bulk of rails required cost so much more to complete, that the before the recent rise in value. Several power of competition will be very much of these companies could have sold reduced. their contracts at handsome profits. The We annex an official statement, show effect, therefore, on this side of the At- ing the quantity, total value, cost per lantic, will not be so serious as it other- ton, &c., of bar iron, manufactured by wise would have been. We shall not, rolling, imported into the United States however, be entirely exempt from the in each of the past eight years:disadvantages arising from high prices. Years. Importations of Bar Iron, Manufactured by Rolling, into the United States. Tons.. Value. Av'ge Cost. Duty. Duties. 30. 30 64 2,319,150 29. 30 .. 2,197,285 7,397,166. In putting down the average cost per ton in this table, we have left off the cents and put down the price nearest the fraction. The period included in this table covers nearly the full operation of two tariffs. In 1841, when the compromise act of 1832 had reached its lowest point, the aggregate value of rolled iron imported was $2,172,278--averaging $34 per ton. In the year 1846, which closed the operation of the high tariff of 1842, the value of rolled iron imported was $1,127,418-averaging $47 per ton. By going back a little further we can find a better illustration of the strength of the position we intend assuming. In 1839, when the compromise tariff of 1832 had been in operation seven years, and the per cent. of duties had become very much reduced, the value of rolled iron imported was $3,181,180-averaging $53 per ton-a higher price than ruled at any time during the operation of the high protective tariff of 1842. For seven years previous to 1839, the iron manufacturing interest of the country had been ther, such extremes to connect, such unbounded, unlimited resources to develop, that it has been, and still is, utterly out of the question to wait the slow movement of those who require so much aid and support from the government in the shape of prohibitory duties. Where would our great rail-road system have been had we waited for our own manufacturers to supply the iron at their own prices? And where would prices have been had there been such a duty imposed as would have prohibited the importation of a foreign article? The first would not have been developed to one quarter the extent it is at this moment; prices for the iron would have ruled so high that it would have required, at least fifty per cent. more capital to have built the roads. By checking the extension of rail-roads, and thereby preventing the opening of new channels of commerce, the progress of the country would have been materially retarded, and all the most important interests of the masses sacrificed-and for what? Merely for the purpose of filling the pockets of comparatively a limited number of iron manufacturers faster than smaller profits would. The manufacturing interest of this country, generally, is fully impressed with the belief that the only true policy for the government to pursue is to sacrifice every other interest for that. Within the past four years we have paid $24,461,115 to foreigners, for rolled iron. We will admit that a large per cent. of this aggregate has been in rail-road iron, imported for roads constructed within that period. This iron has been purchased at prices varying from twentynine to forty-five dollars per ton, and a good part of it has been paid for in railroad bonds and other first-class securities. Previous to the reduction of the tariff in 1846, our rail-road companies were paying from sixty to eighty dollars per ton for rail-road iron, both at home and abroad; and at that time the railroad movement in the United States was very moderate compared with what it has been since. At that time the rail-road mania in Great Britain and throughout Europe was at its height, and the market prices for iron had reached very high points. This enabled our manufacturers to extort immense rates from companies then constructing roads here. Instead of turning out iron at fair remunerating prices, they took advan tage of the limited supply from England, caused by the immense home demand and consumption, and realized enormous profits. This is undoubtedly all right and proper in the way of business; and viewed in that light, not a word of complaint can be uttered. But let us look at the result. Protection at home, demands abroad for consumption far in advance of the supply, with a domestic demand greater than our manufacturers could meet, enabled them to realize profits in a year or two, sufficient to return the full capital employed. Then it was all sunshine. Had there been no protection under the tariff, their profits would have still been very great. There was a harvest ready to be gathered, and the iron manufacturers gathered it. In the course of time, the rail-road mania in Great Britain and on the continent exploded. Thousands engaged in that speculation were ruined. The extensive iron manufacturing establishments created by the demand for iron rails, became idle, and a large portion of the immense amount of capital invested in them became unproductive. For a time, all was chaos and confusion. The excitement had been so intense and extended, so many had become so deeply involved, that the effect was almost universal and disastrous. A long period of stagnation followed. Many of the iron manufacturing establishments continued operations upon a more limited scale, and prices of iron became reduced to the lowest points. The demand almost entirely ceased, and nothing but the necessity of keeping in motion, to make the sacrifice as light as possible, kept any of them going. The effect of this was to place prices on the other side at such low points, that manufacturers on this side were compelled to abandon all competition, and close up their works How long the manufacturers of England would have been able to continue this ruinous course, is a question we cannot answer; but fortunately the rail-road mania seized hold of our people, and the demand for rails rapidly increased. Since 1847, the construction of railroads in the United States has exceeded all previously completed. While this interest was languishing in England, it was moving on with rapid strides in this country. This was fortunate for foreign iron manufacturers. It enabled them to work at least without loss, and the competition was so great, or rather, the New-York Iron Market-Impetus to Industry. 497 sources of supply so numerous, that prices few months, numerous side lines from have, until very recently, continued main-trunk rail-roads have been contemmuch reduced. But for this we should plated, and all the indications are in fanot have made so much progress in our vor of the creation of many new and exinternal improvements. This favorable tensive companies. In this country the state of things has continued until lately. consumption of iron is steadily and rapWithin the past six months there has idly increasing. Our iron manufacturbeen a re-action in the iron market, and ers are by no means idle. Within the a very rapid rise has been realized. past year or two, since any important This has been produced by a variety of modification of the tariff in favor of procauses, the most prominent of which is tection has been entirely out of the questhe active demand for iron for the con- tion, the iron manufacturing interest has struction of vessels. It is intimated that been gradually recovering from its prosthere are at least sixty iron steamers tration. The recent improvement in building in Scotland, and about fifty in prices for the raw material will be of England. Independent of the demand immense advantage to those engaged. for consumption in this way, the railroad movements recently made in Great Britain are calculated to strengthen the current rates for iron. Within the past The annexed comparative statement shows the advance in market value during the past six months: This is enough for the present. As the season advances, and the different projects we have alluded to become matured, the demand will increase, and, as a matter of course, prices experience a much greater improvement. In the face of this favorable, and, to the iron manufacturer, encouraging state of things, with what grace and justice can the cry for more protection be kept up? The rise in prices on the other side is equal to an additional duty of full one hundred per cent. What more can be desired? The answer may be, that this enhancement of prices is not permanent-that it cannot be depended on-and it would therefore be dangerous to embark capital in establishing iron manufactories upon such a basis; that the only guarantee is in a high tariff, &c., &c. This is all very well, so far as it goes, but it is a very contracted view to take of the matter. The world is all alive with enterprise. The production of gold in California and Australia has given such an impetus to industry, and opened so many new channels for commerce, that a legitimate demand has sprung up for all the staple articles of agriculture and manufacture far beyond anything ever before realized in the history of the world. The progress of improvement has been so rapid VOL. XIV. 6 July 3, per ton. -1852. $19 a 19 75.... October 16, $26 a 27... 1853. January 5, per ton. . $30 a 31 68 a 70 65 a 68 that the remotest corners of the universe have been opened, and the shrill whistle of the locomotive, the splashing of steamships, the white sails of our clipper-ships, have been heard and seen in places which, a few years ago, were almost beyond the limits of civilization. In the extension of commerce; in additions to the commercial marine of all the great maritime nations; in the increase and distribution of populations; in the contraction of space by rapidity of communication-in fact, in everything calculated to augment wealth, strengthen prosperity, extend civilization, and to build up a magnificent system of commercial intercourse, which will open every port and remove absurd restrictions, more progress has been made within the past five years than in any previous century. The impetus all this has given to the consumption, particularly of iron manufactures, is the direct cause of the favorable change in prices we have recorded above. The demand has overtaken the supply, and it will, without doubt, soon outstrip it. We look for a much greater appreciation in this article, and anticipate increased activity among manufacturers throughout the United States. It is a long lane that has no turn. We take the following paper upon the gold productions of the world from the Economist, edited by Mr. Kettell:When the gold discoveries were made, and confirmed by the actual receipt in London and New-York, of unwonted quantities of bullion from the distant regions of the earth, a rise in prices and a disturbance of the relative value to all productions, which gold for so long a period had sustained, was at once considered as certain; and most great financial agents throughout the world, prepared for that expected change in a manner so hasty as to accelerate the operation; that is to say, gold was avoided, and all other productions, including silver, sought in exchange for it. Silver was the first to rise, but it soon subsided to its ordinary relative price, and gold accumulated at the great reservoirs in large amounts. The leading points for these accumulations were the banks of New-York, of London, and of Paris. Gradually these growing reserves have promoted speculations and stimulated rising prices; a natural result of which is a flowing of other products towards those points where they command the most gold, causing thereby currents of gold to set from the points of accumulation outward towards those remote regions where raw products are produced. This is the natural mode by which the new supplies of gold will become distributed throughout the world into all the channels of circulation. The following table shows the amounts of specie in the banks of the three great commercial and financial centres at different periods: Quantity of Specie, expressed in Dollars, in the Banks of New-York, London, and Paris. Banks of New-York. Bank of Bank of England. Total, three Baaks. Rate of Interest in Landas $5,850,424.. $46,588,339.. $73,143,717..$125,582,480..3 81,984,000.. 175,801,550..3} .3 66,844,215.. 182,544,968..3 71,776,320.. 199,149.003..S 83,738,868.. 196,738,713..2 7,985,954.. 107,714,800.. It will be observed that the accu- and increased consumption of almost all mulation went on step by step until raw produce, and increased disposition midsummer of 1852, or about four to export capital from the great centres months subsequent to the reduction of to those places where with safety it could interest to the lowest point, 2 per cent., be employed to better profit. by the Bank of England. This accumulation was accompanied by rising prices The following is a table of current prices in London at different dates: Specie in New-York, London, and Paris-London Markets. 499 In United States, from California Total....... 6 1 0 09 0 0166 0 0 3% 028 255 0 0 10%2 3 10 0 3.10 0 003 2 13 6 .17 10 0 $21,475,732 23,994,180 $45,469,912 Now it results that the high prices In England, from Australia.. caused by accumulations of gold at financial centres, stimulated the production of all other articles, and put them in motion towards those common centres; hence the rise in freights and great activity in transportation everywhere manifest. The result of this would necessarily be a drain of gold from those centres in a more rapid ratio than ever before. Because as gold, by raising prices, put in motion every branch of production, so all these branches once in motion would react upon the gold with redoubled force, or in the proportion of the value of all other articles to gold. Thus the receipts of gold in Great Britain, by a recent report, were for the last six months of 1852, £11,146,000, say $50,000,000. At the United States Mint they were $30,000,000, and the reduction in the banks as above is $34,000,000, making together $114,000,000, from which should be deducted the quantity sent from the United States to Great Britain in that time, $7.000,000, and there remains $107,000,000, which has gone, whither ? The supplies of gold in Great Britain and in the United States were, for the last six months of 1852, as follows:— Of the quantity received in the United States about $7,000,000 went to England, and has thence, in discharge of the large quantities of goods purchased and consumed by England, been distributed throughout the world. As gold has become comparatively cheap in England, and left it for other countries, its export thither from the United States has gradually fallen off. The reason of this appears to be that the inflation which causes gold to leave England and Western Europe, not only checks exports to this country, but induces continued exports of those articles of produce, for which they are our best customers; that is to say, although there has been inflation here it has been greater there. The efflux of gold from Paris has been larger than from England, reaching $24,000,000 since last June; if we look at the table of discounts by the French Bank, we shall observe how much more rapid has been paper expansion, fomenting those immense speculations of which Paris has been the theatre. |