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century; and on them depends her further progress in agriculture



and industry; in trade; navigation and naval power。 But in order to



render reforms of this kind possible and practicable; the Russian



aristocracy must first learn to feel that their own material



interests will be most promoted by them。







Chapter 9







The North Americans







    After our historical examination of the commercial policy of



the European nations; with the exception of those from which there



is nothing of importance to be learnt; we will cast a glance beyond



the Atlantic Ocean at a people of colonists which has been raising



itself almost before our eyes from the condition of entire



dependence on the mother country; and of separation into a number



of colonial provinces having no kind of political union between



themselves; to that of a united; well…organised; free; powerful;



industrious; rich; and independent nation; which will perhaps in



the time of our grandchildren exalt itself to the rank of the first



naval and commercial power in the world。 The history of the trade



and industry of North America is more instructive for our subject



than any other can be; Because here the course of development



proceeds rapidly; the periods of free trade and protection follow



closely on each other; their consequences stand out clearly and



sharply defined; and the whole machinery of national industry and



State administration moves exposed before the eyes of the



spectator。



    The North American colonies were kept; in respect of trade and



industry; in such complete thraldom by the mother country; that no



sort of manufacture was permitted to them beyond domestic



manufacture and the ordinary handicrafts。 So late as the year 1750



a hat manufactory in the State of Massachusetts created so great



sensation and jealousy in Parliament; that it declared all kinds of



manufactories to be 'common nuisances;' not excepting iron works;



notwithstanding that the country possessed in the greatest



abundance all the requisite materials for the manufacture of iron。



Even more recently; namely; in 1770; the great Chatham; made uneasy



by the first manufacturing attempts of the New Englanders; declared



that the colonies should not be permitted to manufacture so much as



a horseshoe nail。



    To Adam Smith belongs the merit of having first pointed out the



injustice of this policy。



    The monopoly of all manufacturing industry by the mother



country was one of the chief causes of the American Revolution; the



tea duty merely afforded an opportunity for its outbreak。



    Freed from restrictions; in possession of all material and



intellectual resources for manufacturing work; and separated from



that nation from which they had previously been supplied with



manufactured goods; and to which they had been selling their



produce; and thus thrown with all their wants upon their own



resources: manufactures of every kind in the North American free



states received a mighty stimulus during the war of revolution;



which in its turn had the effect of benefiting agriculture to such



an extent that; notwithstanding the burdens and the devastation



consequent upon the then recent war; the value of land and the rate



of wages in these states everywhere rose immensely but as; after



the peace of Paris; the faulty constitution of the free states made



the introduction of a united commercial system impossible; and



consequently English manufactured goods again obtained free



admission; competition with which the newly established American



manufactories had not strength enough to bear; the prosperity which



had arisen during the war vanished much more quickly than it had



grown up。 An orator in Congress said afterwards of this crisis: 'We



did buy; according to the advice of modem theorists; where we could



buy cheapest; and our markets were flooded with foreign goods;



English goods sold cheaper in our seaport towns than in Liverpool



or London。 Our manufacturers were being ruined; our merchants; even



those who thought to enrich themselves by importation; became



bankrupt; and all these causes together were so detrimental to



agriculture; that landed property became very generally worthless;



and consequently bankruptcy became general even among our



landowners。'



    This condition of things was by no means temporary; it lasted



from the peace of Paris until the establishment of the federal



constitution; and contributed more than any other circumstance to



bring about a more intimate union between the free states and to



impel them to give to Congress full powers for the maintenance of



a united commercial policy。 Congress was inundated with petitions



from all the states  New York and South Carolina not excepted 



in favour of protective measures for internal industry; and



Washington; on the day of his inauguration; wore a suit of



home…manufactured cloth; 'in order;' said a contemporary New York



journal; 'in the simple and impressive manner so peculiar to this



great man; to give to all his successors in office and to all



future legislators a memorable lesson upon the way in which the



welfare of this country is to be promoted。' Although the first



American tariff (1789) levied only light duties on the importation



of the most important manufactured articles; it yet worked so



beneficially from the very first years of its introduction that



Washington in his 'Message' in 1791 was able to congratulate the



nation on the flourishing condition of its manufactures;



agriculture; and trade。



    The inadequacy of this protection was; however; soon apparent;



for the effect of the slight import duties was easily overcome by



English manufacturers; who had the advantage of improved methods of



production。 Congress did certainly raise the duty on the most



important manufactured articles to fifteen per cent; but this was



not till the year 1804; when it was compelled; owing to deficient



customs receipts; to raise more revenue; and long after the inland



manufacturers had exhausted every argument in favour of having more



protection; while the interests opposed to them were equally



strenuous upon the advantages of free trade and the injurious



effects of high import duties。



    In striking contrast with the slight progress which had; on the



whole; been made by the manufacturers of the country; stood the



improved condition of its navigation; which since the year 1789;



upon the motion of James Madison; had received effectual



protection。 From a tonnage of 200;000 in 1789 their mercantile



marine had increased in 1801 to more than 1;000;000 tons。 Under the



protection of the tariff of 1804; the manufacturing interest of the



United States could just barely maintain itself against the English



manufactories; which were continually being improved; and had



attained a colossal magnitude; and it would doubtless have had to



succumb entirely to English competition; had it not been for the



help of the embargo and declaration of war of 1812。 In consequence



of these events; just as at the time of the War of Independence;



the American manufactories received such an extraordinary impetus



that they not only sufficed for the home demand; but soon began to



export as well。 According to a report of the Committee on Trade and



Manufactures to Congress in 1815; 100;000 hands were employed in



the woollen and cotton manufactures alone; whose yearly production



amounted to the value of more than sixty million dollars。 As in the



days of the War of Independence; an

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