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we shall be prepared to walk in the light of experience and look forward to a glorious national destiny. My friends! I dare not detain you longer. I commit to you the cause of the Nation's independence, of her stability and her prosperity. Guard it wisely and shield it well; for it involves your own happiness and the enduring welfare of your countrymen!

CHAPTER VII.

PROTECTING DUTIES.*

BY FRANCIS WAYLAND, D.D., LL.D.,

President of Brown University.

ON THE EFFECTS OF DIRECT LEGISLATION AS A MEANS OF INCREASING PRODUCTION.

I

HAVE thus far said nothing upon the effect of legisla

tive enactments, by means of bounties and protecting duties, as a means of increasing production. The reason is, that I have not yet been able to discover in what manner they produce this effect. Nevertheless, since many persons suppose them to be of great importance, it might seem that a discussion of this subject was incomplete, if they were passed over in silence. I shall devote this section to a consideration of their effects.

1. Duties of this sort are to be considered apart from those levied for the support of government, because they are either not necessary for this purpose, or else they are levied for a different object. Thus, if five per cent. on an import be necessary to the support of government, and ten per cent. be levied, in order to favor, or, as it is said, to protect one branch of industry, the additional five per cent. is levied for a distinct object, aside from that of the support of government. It is only this latter part of the duty which we propose to consider; that is, so much of the duty

*Elements of Political Economy, 1441.

as is levied for the purpose of favoring one particular product.

2.

Now, if such a duty have any effect upon the productiveness of a nation, it must be in one of these ways. It must either first increase the capital of a country, or, secondly, increase its number of laborers; or, third, create a greater stimulus to labor. I think it evident, from what has already been shown, that every condition which affects production, must exert its influence in one of these three methods.

3.

I think it evident that legislation of this sort cannot increase the capital of a country. The capital of a country, at any moment, is its present amount of annual and fixed capital. Now, a law cannot create capital; since, if it could, there would be no necessity for any other labor than that of legislation; and, in order to grow rich, a nation would have nothing to do but meet in public assembly, and spend its whole time in making and hearing speeches, and enacting I believe, however, that this mode of growing rich, has never been found remarkably successful.

laws.

If it be said that, in this manner, we shall attract foreign capital to our own county, I answer, this depends not upon legislation, but upon the rate of interest, and the security of

property.

If these conditions be more favorable here than

in another country, capital will flow hither. If they be more favorable in another country than here, it will flow thither. The system of Great Britain has been exclusive,

but

capital does not go from this country to be invested

there.

4.

Legislation of this kind cannot increase the actual number of laborers. The number of laborers is as the

number of inhabitants. Legislation has never been supposed to have any power to create men. It is true, populalation is found always to increase with the increase of means of living; that is, with the increase of the productiveness of

labor. Population will increase or diminish, just in proportion as a laborer is able to procure greater or less wages for a day's labor; that is, as everything is cheaper or dearer. Whether the tendency of duties is to render productions cheap, remains to be considered. It must, however, be evident to all, that laws do not create human beings; of course, they add nothing to the number of laborers; that is, of human beings in a country.

It may be said, we may thus induce laborers to come from other countries. To this it may be answered, this will depend upon the wages of labor. If laborers be better paid here than elsewhere, they will come here, and not otherwise. Besides, what is called protection changes only the mode of labor; that is, it takes meu from one mode of labor, to employ them upon another. Suppose, then, that it attracts foreign laborers to one branch of industry, it deters those in another branch of industry from immigrating. If, for instance, manufacturers are protected, this will tend to encourage manufacturers to immigrate; but it will, in a correspondent proportion, discourage agriculturists.

5. If, then, discriminating duties produce any effect upon production, it must be by stimulating industry; that is, while the amount of capital and the number of laborers remain the same, by stimulating men to labor more industriously, and thus to create a greater amount of production than they would under other circumstances. This, I believe, is supposed to be the way in which the system produces its effect. This is the point of view in which we shall now proceed to consider it.

The manner in which this is done, is the following: Suppose a country to be under a free system, and that every one is devoting himself to agriculture, commerce, or manufactures, as he finds it the most for his interest; under these circumstances, there will be a certain average of productiveness, both of labor and of capital. Woolen cloth can be

procured, by exchange, for five dollars a yard; but it cannot, in the present state of the country, be manufactured for less than ten dollars a yard; that is, capital and labor are, in everything else, so productive, that they could not be abstracted from other employments at the same rate of profit, unless the manufacturer could receive ten dollars a yard for his cloth. Now suppose, that, in order to enable him to do this, a duty of five dollars a yard is levied on imported cloth, by which the price of all cloth is raised to ten dollars a yard, that it may be in the power of the manufacturer, to employ his capital and labor in this manner. There is no doubt that thus the manufacture of cloth might be established.

Now I think it is evident, upon inspection, that the productiveness of labor is not, by this operation, increased. The reason why cloth was not manufactured before, was, that the productiveness of labor and capital, in this mode of investment, was lower than the average productiveness of labor and capital in other modes of investment. All that has been effected is, to raise the productiveness here to the general average elsewhere. There has been nothing done to render it any greater, either in this or in any other employ. ment; for I presume that no one will contend, that one kind of industry should be really more highly paid than another; nor that, if it were desired, it could be effected without the aid of a direct monopoly.

But the mannfacturer now gets ten dollars for that which before would bring only five. Let us inquire whence this additional five dollars comes.

It is evident that government possesses nothing. All that it possesses is precisely so much taken from the annual revenue of individuals. In this case, therefore, it really bestows nothing, but only causes a transfer of annual revenues, from one party to another. The case is, therefore, the same as it would be if, while there had been no duty

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