STATE OF TRADE. THE COTTON INTERESTS. In our last article on the State of Trade, we gave a condensed summary of the first part of an argument given in an editorial of the "Plough, Loom, and Anvil," in confutation of the views taken by the New York correspondent of the Union, who is also the financial writer of the Democratic Review. We now proceed to an examination of the statistics of that correspondent. While speaking of the cotton trade, our argument will be taken chiefly from the "Plough, Loom, and Anvil."* In the general argument, we shall indulge in some reflections of our own. In his tables, the cotton crop of '46-7 is set down, as usual, for that of '47, and that of '47-8, for that of '48. The whole business relative to the crop of '47-8 was closed in July, '48, just at the time when the tariff of '46 came into direct and practical operation upon the business of the country. One effect of the system was, however, felt before that time. The failure of the large English cotton brokers had disabled them from acting as usual for the American growers, and funds had fallen in consequence; this bankruptcy, the fifth of that class of dealers in one quarter of a century, being attributable to unforeseen causes in England, of which we shall not now make mention. The crop of the present year's consumption is the first that came under the operation of the tariff of '46; and yet the Union gives us tables showing a large increase of consumption of cotton during three years, under the operation of a tariff whose practical effects could not be felt by any crop previous to the one of the year that has just ended. Observe the crop produced and sold in '47-8 is the crop of '47. The increas * For a critical notice of this important periodical, see Critical Notices of this number. ed sale of this crop was, by the Union's tables, 103,805 bales. Just at this time, the practical effects of the tariff of '46 begin to be felt; and the increase for the succeeding year is only 20,000! and the price, until very lately not above the cost of production. When cotton was low, the purchasers sent their orders early and purchased largely. Thus, of the crop of 1847-8, 281,497 bales were taken in the first seven months, being at the rate of 40,000 a month, leaving for the last five months, 250,000—i. e., 50,000 a month. Of the crop of '48-9, there were taken in the first six months, 307,303 bales— 51,000 per month, leaving to be taken, to equal the last year, less than 83,000 a month. Thus it appears that low prices, and a large supply, induce larger sales in the early part of the year, and vice versa. "If our readers will now re-peruse our exeffect of the article to be produced by compartract from the Union, they will find the whole ing the early purchases of the present year, which were large, with the early purchases of last year, which were small. The real facts we will now show, made up to the time at which we write : The remaining period may give 30,000, but | 1842 remained unchanged? Would not that is exceedingly doubtful, for within a month we now be consuming 250,000 additional we have seen notice of the total stoppage of bales? And would not the demand have three or four large factories in our own imme-sustained the price at ten cents, as it now diate neighborhood, and the same causes that stop them must tend to produce the stoppage stands, instead of the low rates that have of others. Allowing, however, that 30,000 ad- prevailed through the year? And is not ditional bales will be required, we obtain as the this the price that has been paid by the consumption of the year, 512,360; against a South, not less than $55,000,000, for reconsumption of the previous year of 531,772; fusing to allow the products of the land being a falling off of 20,000 bales in a year, to be consumed on the land? instead of an increase of 20,000 in ten months. The consumption and exportation of cotton cloth for the year, notwithstanding the low prices, will thus fall short of last year not less than 20,000 bales; and then the following will be the result of the years affected by the tariffs of 1842 and 1846: Increase Increase 1846. Crop 840 millions pounds, about 8 cents. Total increase, then, over 1842, 16,000 1848.-Crop again large-price seven cents. Home consumption increased 103,000 bales, and exceeded by 206,000 the quantity taken in 1843, when the crop was nearly the same, showing a large decrease in the power of consumption abroad. 1849.-Crop 1100 millions pounds, average price eight and a half cents; and yet the consumption, so far as seaboard is concerned, has, for the first time in some years, absolutely gone backward, while our population has increased with immense rapidity. Now, if the consumption of 1847, with a crop of 711 millions, average above ten cents, increased 5000 bales, what would be the increase of the present year, with a crop 389 millions larger, had the tariff of And now upon the topic of the Southern factories, upon which the correspondent remarks that they have no protection against New England. It is true they have no legal protection against New England, but they have the prodigious advantage over the New England factories, of having their raw material growing almost at the door of the factory. Against England, however, the South maintains a protection for herself in the shape of the tariff of 1846, and there is every probability that if that were removed, she would be deluged with cheap and worthless goods of foreign manufacture, and her new and flourishing factories be broken down. Another topic of importance, touched upon by the "Plough, Loom, and Anvil," is that of emigration. Every emigrant to the West is an additional producer of corn or cotton in the West, whose competition tends to lower the price of Eastern and Southern products, and, we may add, to raise the price of manufactures; and every individual workman who is kept at home and employed in manufacture, is an additional consumer of Eastern and Southern products, whose competition lowers the price of manufactures, and raises that of corn and cotton. "We are gravely assured that the consumer benefits largely by the low prices, but whence come the low prices? Is it not from And can the the depression of the South? South consume as much cloth with cotton at five cents, as they could do at ten? Certainly not. The South is now clothing the world at its own loss, and the power to consume cloth is there diminished, and would be still more so, were it not that it is to a certain extent maintained by the introduction of a new species of employment, that would long since have been naturalized there had the plough, the loom, and the anvil been permitted to come together. The consumption of the North diminishes, notwithstanding a vast increase of population, and notwithstanding the great diminution of cost, and it does so because the people who worked in mines, and furnaces, and mills, are idle and unable to sell their labor to obtain the means of buying food, or cloth, or iron. "Every increase in the ratio of consumers to producers tends to raise the price of food and cotton, and of all other agricultural products, and to enable farmers and planters to consume more largely of cloth and iron, shoes and hats, paper and books, and the producers of these latter commodities are thereby enabled to consume more largely of food and cotton, and thus it is that the owner of land benefits by an increase in the home consumption of the products of the land. Every man that is driven to seek the West, there to raise food or cotton, tends to diminish the power of farmers and planters to consume cloth and iron, and to diminish the power of the makers of cloth and iron to con sume food or cotton, and thus it is that the owner of land is injured by a diminution in the home consumption of the products of the land." -Plough, Loom, and Anvil. It is a fact but little attended to by the enemies of protection, that the wealth of the farmer is not to be measured by his production merely, but by his power of exchanging his surplus products. A sheaf of corn rotting unused in the stack is not wealth; but when a market opens for it, then it becomes wealth. Now, by the free trader's plan of trusting to the contingencies of an European market, the wealth of the United States is to be gauged by the wants of Europe. A good crop and low prices in Europe is to bring the entire trade of America to a dead stop. Let us suppose that not a single manufactured article was produced on this side of the Atlantic, that our entire commerce consisted in an exchange of breadstuffs for manufactures, which would be the paridisaical condition of free trade, we are then under the necessity of keeping the prices of breadstuffs down so low as to compete with the farmers of England and the grain-growers of Europe, who produce at a half or one third the price that we do; and being subject to this competition, we should be obliged to pay our own freights and brokerages, and run our own risks of insurance, and other expenses, while we have twice or thrice the distance to travel over, and the political contingencies of corn-laws, embargoes, and maritime wars hanging perpetually over us; to say nothing of the certainty of a time to come, and that not far distant, when the improvements in agriculture shall furnish Great Britain, even without the aid of corn-laws, with a full supply of better food than the stale corn, rancid meal, and withered potatoes, which our farmers send across the Atlantic. 1. Either the farmer depends on the contingency of a deficient supply of fooe in foreign countries, raising prices to th famine point there; or, in times of plenty 2. He must expect to undersell the European producer, who is able to produce at half the cost. Again, 1. At all times, the wealth of the farmer depends upon his ability to exchange his surplus products for manufactured articles, or for money wherewith to purchase such articles. 2. The increase of his wealth is limited to his ability to dispose of his surplus: that is to say, to the ability of the foreign manufacturer to supply him. 3. The foreign manufacturer will supply him at prices regulated by the dearth or abundance of grain in Europe and Great Britain. 4. If food is abundant in Great Britain and Europe, the home demand in those countries for manufactures will raise their price, while at the same time it raises the price of food in America. 5. Thus it appears that the American producer has a double disadvantage of selling less food, and getting less for it, whenever the price of food falls in other countries. But there is still another consequence to be taken into the account. The surplus of the farmer is that which remains over, when he has fed himself and his dependents. The home market is therefore composed of those who are not engaged in farming. But these are chiefly the artisans, and handicraftsmen, and those connected with them. The farmer is almost always able to produce a considerable surplus, the sale of which is his source of wealth; and the more there are of handicraftsmen and others who consume this surplus, the greater will be the wealth of the farmer. When the number of handicraftsmen and operatives is sufficient to supply the farmer with all he needs, both parties will sustain each other, independently of foreign aid, | and free of the contingencies and fluctuations of the foreign market. But the process does not stop here. The handicraftsman is able to produce more than is necessary both for himself and the farmer. Over-production reduces the price, and the farmer is the gainer. But, if there is an over-production of food, in the hope of a foreign market, the handicraftsman gains, and the farmer is the loser. much the produce of her food producers as of her artisans, her agricultural resources must be measured by the value of her manufactured exports, less her imports of food and raw material. Let us suppose for instance, that England and America export equal values of home-manufactured articles. Then, if America produces the raw material, food, and machinery, which made these articles; while England, a mere workshop, imports the food and raw material for hers; America reaps three profits where England reaps one. America reaps the profit-1st, on the raw material The foreign market for grain stimulates the over-production of grain; and being unsteady, always inflicts more mischief-2d, on the food sold to operatives and than good upon the producer. And, The foreign market for manufactures stimulates the over-production of manufactures, reduces their price, and is in that sense gainful to the farmer; while, at the same time, it is not subject to one half or one third the extent of fluctuation suffered by the market for food. Strange as it may appear at first view, we make bold to insist, that no country was ever made wealthy by a foreign demand for breadstuffs:-while we equally insist that a foreign market for manufactured goods, creating a home market for the farmer, has been the great source of riches time out of mind. Let us consider it. The raw material exported, pays a certain profit. The same material manufactured and exported, pays the same profit, and an additional one for being manufactured. A pound of cotton worth ten cents, pays perhaps 1 cent profit; worked into a piece of cloth valued at $1, it pays 10 cents profit. Other things being equal, the more a substance is wrought up, the more is gained by its exportation. It is therefore a much better plan to have the raw material worked up as much as possible at home, in order that all the profit that can be got out of it may be got at home. It is a very common error with the shallow free-trade economist, in whose ears the word free tingles with a deceitful talismanic power, to suppose that a country must export the staff of life, in body and unchanged, in order to be considered a food-exporting country. It has been long noticed, we believe in the first instance by Mr. Carey, that as the home manufactures of a country are as manufacturers-3d, on the manufacture itself, and the machinery employed in it. England, importing food and raw material, reaps only one profit, viz., that on the manufacture and machinery. The unexampled increase of wealth in England, from the time of Cromwell down to the time when American manufactures began to compete with hers in the markets of the world, is doubtless to be attributed to the policy pursued by England, of securing all the profits to herself, excepting, of course, that upon the raw material of cotton fabrics, which she was never able to command. Thus, the navigation laws secured to her the profits of transportation, and created a wealthy merchant marine, besides enriching the growers of English foresttrees. The corn-laws raised the value of lands, and enriched the aristocracy. The protection on every species of chemical and mechanical manufacture created a powerful and wealthy manufacturing interest. These several branches of protection were part of a grand system of protection, and the one supported the other. It was the policy of England first, to cultivate her waste lands, and to carry agriculture to the highest possible pitch. This was the work of the aristocracy. To enrich the aristocracy, it was necessary to provide a home market for their surplus, the foreign market for grain yielding little or no profit, because of the excessive costs of production. Her next step was to make herself the grand manufactory of the world; and one of the first consequences of her doing so was the enrichment of the land-owners, who found at their doors a constant and free market for the sale of their surplus products; they thus, indirectly, became producers of food for all parts of the world, and the protection, extended to navigation and manufactures, became indirectly a protection to agriculture. Now, however, under the regime of Peel and Cobden, England has abandoned her protective system, and on the following principles, of which we do not mean, at present, to dispute the policy as far as regards herself. Having three objects to accomplish, the cheapening of raw material, the cheapening of transportation, and the cheapening of food-the cheapening of manufactures having been carried to the lowest possible degree, by the effects of competition--it was proposed to subject the home producers of food to a foreign competition, in order to bring food to bear some just ratio, in price, to manufactures. It was proposed, also, to subject transportation to a foreign competition, in order farther to lower the prices of manufactures in foreign markets; and, as a part of the same system, tariffs were to be lowered on the raw material of industry, to enable manufacturers to work with a smaller outlay of capital. This entire system, constructed not for the benefit of England or Great Britain, so much as to sustain the interests of the manufacturing classes, now deemed, by themselves, to be the leading interest, and therefore entitled to subordinate the others, cannot be subjected to criticism in its details, but only in its principle; that principle being to support one interest by the sacrifice of all others. It is diametrically opposed to the grand protective system of Great Britain, of which the design was, to make the plough, the loom, and the anvil, neighbors and equal partners in the great firm of the national enterprise. To return, after these desultory remarks, to the argument in the "Plough, Loom, and Anvil." "In 1842, we imported little, and were unable to pay the interest on our foreign debt. "In 1846 and '47, we imported largely, and paid off much of the principal of our debts. "In 1849, we import about the same amount per head, and run largely in debt. "In 1846, the demand for labor was great, and men consumed largely of coal, the produc tion of which trebled from 1842 to 1847. In 1849, men are unemployed, and the consumption of fuel is stationary. doubled. In 1849 it has become stationary. "From 1842 to '47, the consumption of iron "From 1842 to '47, the consumption of cotton and woolen cloth was doubled. In 1849 it has become stationary. "In 1846 and 1847, there was universal activity. In 1849, there prevails a 'masterly inactivity,' because houses and ships, and roads, and mines, and mills and furnaces, have ceased to be profitable. Capital, food, cotton, wool, cloth, sugar, shoes, paper, and all other commodities needed for the convenience and comfort of men, are surplus, and the universal desire is to diminish production to the level of consumption, while tens of thousands of laborers can purchase neither food nor clothing. The war against labour and capital,' agreeably to the doctrine of the Union, has ceased, but with each successive day labour and capital become less productive." A great deal of the private and commercial distress of the present season has been attributed to pestilence, and it is very certain that the business of the cities and towns has been immensely disturbed by that cause. No species of property feels the lighter fluctuations of the general interest more keenly than periodical works. From our own observation, we can say, with confidence, that there has not been a time since 1827 when persons of moderate means, indulging in moderate degrees of luxury, were more straitened or alarmed for their incomes, or more disposed to be economical than during the past season. Popular magazines have, in general, as an article of almost pure luxury, been an excellent and true index of popular feeling in regard to private expenditure, as they have, perhaps, never suffered more than during the last four months. Other interests have been affected in the same way. Of works of art, fewer than ever have been disposed of at reasonable prices, Paintings, an article of pure luxury, can be hardly said to have sold at all. The lithographic print establishments in New York, whose business is a very good index of the amount of pocket-money and feeling of pecuniary ability among the poorer classes of the community, both in city and country, are at present making but few sales, and those moderate; nor do they look forward to any immediate improvement of the business-that is to say, |