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diversity of resources, the varied races and endowments of their people, and their distinctive interests, constitute a world by themselves. Fortunately our Constitution forever forbids the protective policy to restrict their trade with each other. Here is a broad arena for the experiment of free trade. For nearly forty years the writer has watched the course of that experiment in the unfolding growth of a young Western State. Her chief industry was at the first, and must long continue to be, agriculture. But as population poured into the prairies and groves, and agriculture yielded a surplus of home capital, and a basis of credit was laid for the introduction of Eastern capital, every kind of industry suited to her climate and conditions has been successfully established. Her mines have been worked, her water. powers have been utilized, villages and cities have sprung up suddenly, and the diverse genius and taste of her sons have found ample scope and stimulus for profitable exercise. According to the theory of protection, the competition of New England manufactures, brought in freely by the best facilities for cheap and rapid transportation, should have "crushed out the home production of all but the rudest and coarsest articles of manufacture." But the facts are all against the theory. Woolen factories, cotton factories, shoe factories, iron works, machine shops, paper mills, establishments for making agricultural implements, all have been set up and carried on with a success that promises to be abiding and expanding. This result of a brief but fair experiment of the principle of free trade confirms every phase of that doctrine, and shows that what is philosophically sound and true is also practically safe and wise.

The Golden Rule of Christ is full of wisdom and righteousness in its application to the intercourse of nations. We cherish the fond hope that the day is not distant when the nations will conform their policies to the rule, and “do each to others as they would have others do to them.” Then the

theory of protection, with its false ideas of antagonism and selfish isolation, will have no place; but, instead, the brotherhood of nations as well as of individual men will be recognized, and the broad philantrophy which Christianity inculcates and aims to make universal, will have free scope to work out the world's emancipation from all wrong and evil. In such a state, the first principles of sound political economy will find their consummate application.

CHAPTER II.

MODERN POLITICAL ECONOMY.

A

DAM SMITH, LL.D., F.R.S., has been properly called

the father of Modern Political Economy. His arguments have often been repeated, but we will give a few of them:

OF

RESTRAINTS

UPON THE IMPORTATION FROM FOREIGN COUN

TRIES OF SUCH GOODS AS CAN BE PRODUCED AT HOME.

By restraining, either by high duties, or by absolute prohibitions, the importation of such goods from foreign countries as can be produced at home, the monopoly, of the home market is more or less secured to the domestic industry employed in producing them. Thus the prohibition of importing either live cattle or salt provisions from foreign countries secures to the graziers of Great Britain the monopoly of the home market for butcher's meat.

The high duties upon the importation of corn, which in times of mod. erate plenty amount to a prohibition, give a like advantage to the growers of that commodity. The prohibition of the importation of foreign woolens is equally favorable to the woolen manufacturers. The silk manufacture, though alto. gether employed upon foreign materials, has lately obtained the same advantage. The linen manufacture has not yet obtained it, but is making great strides towards it. Many other sorts of manufacturers have, in the same manner, obtained in Great Britain, either altogether, or very nearly a monopoly against their countrymen. The variety of goods of which the importation into Great Britain is prohibited either absolutely, or under certain circumstances, greatly exceeds what can easily be su spected by those who are not well acquainted with the laws of the customs. (Restrictions on importations are now few.)

That this monopoly of the home market frequently gives great encouragement to that particular species of industry which enjoys it, and frequently turns towards that employment a greater share of both the labor and stock of the society than would otherwise have gone to it, cannot be doubted. But whether it tends either to increase the gen. eral industry of the society, or to give it the most advantageous direction, is not, perhaps, altogether so evident.

The general industry of the society can never exceed what the capital of the society can employ. As the number of workmen that can be kept in employment by any particular person must bear a certain proportion to his capital, so the number of those that can be continually employed by all the members of a great society, must bear a certain proportion to the whole capital of that society, and can never exceed that proportion. No regulation of commerce can increase the quantity of industry in any society beyond what its capital can maintain. It can only divert a part of it into a direction into which it might not otherwise have gone; and it is by no means certain that this artificial direction is likely to be more advantageous to the society than that into which it would have gone of its own accord.

Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society, which he has in view. But the study of his own advantage, naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to the society.

I. Every individual endeavors to employ his capital as

near home as he can, and consequently as much as he can in the support of domestic industry, provided always that he can thereby obtain the ordinary, or not a great deal less than the ordinary, profits of stock.

Thus, upon equal or nearly equal profits, every wholesale mer chant naturally prefers the home trade to the foreign trade of consumption, and the foreign trade of consumption to the carrying trade. In the home trade his capital is never so long out of his sight as it frequently is in the foreign trade of consumption. He can know better the character and situation of the person whom he trusts, and if he should happen to be deceived, he knows better the laws of the country from which he must seek redress. In the carrying trade, the capital of the merchant is, as it were, divided between two foreign countries, and no part of it is ever necessarily brought home, or placed under his own immediate view and command. The capital which an Amsterdam merchant employs in carrying corn from Konigsberg to Lisbon, and fruit and wine from Lisbon to Konigsberg, must generally be the one-half of it at Konigsberg and the other half at Lisbon. No part of it need ever come to Amsterdam. The natural residence of such a merchant should either be at Konigsberg or Lisbon, and it can only be some very particular circumstances which can make him prefer the residence of Amsterdam. The uneasiness, however, which he feels at being separated so far from his capital, generally determines him to bring part both of the Konigsberg goods which he destines for the market of Lisbon, and the Lisbon goods which he destines for that of Konigsberg, to Amsterdam; and though this necessarily subjects him to a double charge of loading and unloading, as well as to the payment of some duties and customs, yet for the sake of having some part of his capital always under his own view and command, he willingly submits to this extraordinary charge; and it is in this manner that every country which has any considerable share of the

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