Chapter III. The Tariff, 1830–1860

IN THE YEARS between 1832 and 1860 there was great vacillation in the tariff policy of the United States; there were also great fluctuations in the course of trade and industry. A low tariff was succeeded by a high tariff, which was in turn succeeded by another low tariff. Periods of undue inflation and of great demoralization, of prosperity and of depression, followed each other. The changes in the rates of duty and the fluctuations in industrial history have often been thought to be closely connected. Protectionists have ascribed prosperity to high tariffs, depression to low tariffs; free traders have reversed the inference. It is the object of the present essay to trace, so far as this can be done, the economic effect of tariff legislation during the thirty years of varying fortune that preceded the civil war.

First, by way of introduction, a sketch must be given of the history of the tariff. We begin with the tariff act of 1832, a distinctly protectionist measure, passed by the Whigs, or National Republicans, which put the protective system in a shape such as the advocates of protection hoped it might retain permanently. It levied high duties on cotton and woollen goods, iron, and other articles to which protection was meant to be applied. On articles not produced in the United States, either low duties were imposed, as on silks, or no duties at all, as on tea and coffee. The average rate on dutiable articles was about 33 per cent.

In 1833, the Compromise Tariff Act was passed, and remained in force until 1842. That act, there can be little doubt, was the result of an agreement between Clay and Calhoun, the leaders of the protectionists and free traders, while it secured also the support of the Jackson administration. Clay had been hitherto the most uncompromising of the protectionists; Calhoun had represented the extreme Southern demand that duties should be reduced to a horizontal level of 15 or 20 per cent.¹ The compromise provided for the retention of a considerable degree of protection for nearly nine years, and thereafter for a rapid reduction to a uniform 20 per cent. rate. The tariff of 1832 was the starting-point. All duties which in that tariff exceeded 20 per cent. were to have one tenth of the excess over 20 per cent. taken off on January 1, 1834; one tenth more on January 1, 1836; again one tenth in 1838; and another in 1840. That is, by 1840, four tenths of the excess over 20 per cent. would be gone. Then, on January 1, 1842, one half the remaining excess was to be taken off; and on July 1, 1842, the other half of the remaining excess was to go. After July 1, 1842, therefore, there would be a uniform rate of 20 per cent. on all articles. Obviously, the reduction was very gradual from 1833 till 1842, while in the first six months of 1842 a sharp and sudden reduction was to take place.

Considered as a political measure, the act of 1833 may deserve commendation. As an economic or financial measure, there is little to be said for it. It was badly drafted. No provision was made in it as to specific duties; yet it was obviously meant to apply to such duties, and the Secretary of the Treasury had to take it on himself to frame rules as to the manner of ascertaining the ad valorem equivalents of specific duties and making the reductions called for by the act.² Again, the reductions of duty were irregular. Thus on one important article, rolled bar-iron, the duty of 1832 had been specific,—$1.50 per hundredweight. This was equivalent, at the prices of 1832, to about 95 per cent. The progress of the reductions is shown in the note.³ Up to 1842, they were comparatively moderate; but in the six months from January 1 to July 1, 1842, the duty dropped from 65 to 20 per cent. Producers and dealers necessarily found it hard to deal with such changes. It is true that a long warning was given them; but, on the other hand, Congress might at any moment interfere to modify the act. Finally, and not least among the objections, there was the ultimate horizontal rate of 20 per cent.—a crude and indiscriminating method of dealing with the tariff problem, which can be defended on no ground of principle or expediency. The 20 per cent. rate, according to the terms of the act, was to remain in force indefinitely, that being the concession which in the end was made to the extremists of the South.⁴

As it happened, however, the 20 per cent. duty remained in force for but two months, from July 1 till September 1, 1842.⁵ At the latter date the tariff act of 1842 went into force. That act was passed by the Whigs as a party measure, and its history is closely connected with the political complications of the time. The Whigs had broken with President Tyler, and had a special quarrel with him as to the distribution among the States of the proceeds of the public lands. Tyler vetoed two successive tariff bills because of clauses in them in regard to distribution. The bill which he finally signed, and which became law, was passed hurriedly, without the distribution clause. Attention was turned mainly to the political quarrel and to the political effect of the bill in general.⁶ The act, naturally enough, was a hasty and imperfect measure, of which the details had received little consideration. The duties which it levied were high—probably higher than they would have been had the tariff discussion been less affected by the breach between Tyler and the Whigs. Though distinctively protective, and proclaimed to be such by the Whigs, it had not such a strong popular feeling behind it as had existed in favor of the protective measures of 1824, 1828, and 1832. In the farming States the enthusiasm for the home-market idea had cooled perceptibly; and in the manufacturing States the agitation came rather from the producers directly interested than from the public at large. There is much truth in Calhoun’s remark that the act of 1842 was passed, not so much in compliance with the wishes of the manufacturers, as because the politicians wanted an issue.⁷

The act of 1842 remained in force for but four years. It was in turn superseded by the act of 1846, again a political measure, passed this time by the Democrats. The act of 1846 carried out the suggestions made by Secretary Walker in his much debated Treasury Report of 1845. Indeed, it may be regarded as practically framed by Walker, who professed to adhere to the principle of free trade; and the act of 1846 is often spoken of as an instance of the application of free-trade principles. In fact, however, it effected no more than a moderation in the application of protection. The act established several schedules, indicated by the letters A, B, C, D, and so on. All the articles classed in schedule A paid 100 per cent., all in schedule B paid 40 per cent., all in schedule C paid 30 per cent., and so on for the rest. Schedule C, with the 30 per cent. duty, included most articles with which the protective controversy is concerned,—iron and metals in general, manufactures of metals, wool and woollens, manufactures of leather, paper, glass, and wood. Cottons were in schedule D, and paid 25 per cent. Tea and coffee, on the other hand, were exempt from duty.

The act of 1846 remained in force till 1857, when a still further reduction of duties was made. The revenue was redundant in 1857, and this was the chief cause of the reduction of duties. The measure of that year was passed with little opposition, and was the first tariff act since 1816 that was not affected by politics.⁸ It was agreed on all hands that a reduction of the revenue was imperatively called for, and, except from Pennsylvania, there was no opposition to the reduction of duties made in it. The framework of the act of 1846 was retained,—the schedules and the ad valorem duties. The duty on the important protective articles, in schedule C, was lowered to 24 per cent., cottons being transferred, moreover, to that schedule. Certain raw materials were at the same time admitted free of duty.

The act of 1857 remained in force till the close of the period we now have under examination. We begin with a high protective tariff in 1832; then follows a gradual reduction of duties, ending in 1842 with a brief period of very low duties. In the four years 1842–46 we have a strong application of protection. In 1846 begins what is often called a period of free trade, but is in reality one of moderated protection. In 1857 the protection is still further moderated, and for a few years there is as near an approach to free trade as the country has had since 1816.

Turning now to the economic effect of this legislation, we have to note, first, its connection with the general prosperity of the country. That there was a distinct connection is asserted by both protectionists and free traders. The protectionists tell us that the compromise tariff caused the disastrous crises of 1837 and 1839; that the high tariff of 1842 brought back prosperity; that depression again followed the passage of the act of 1846, and that the panic of 1857 was precipitated by the tariff act of 1857. On the other hand, free traders not infrequently describe the period between 1846 and 1860 as one of exceptional prosperity, due to the low duties then in force.

It would not be worth while to allude to some of these assertions, if they were not so firmly imbedded in current literature and so constantly repeated in many accounts of our economic history. This is especially the case with the curious assertion that the crises of 1837 and 1839 were caused by the compromise tariff of 1833, or connected with it. This assertion had its origin in the writings of Henry C. Carey, who has been guilty of many curious versions of economic history, but of none more remarkable than this. It may be found in various passages in his works; and from them it has been transferred to the writings of his disciples and to the arguments of protectionist authors and speakers in general.⁹ Yet no fair-minded person, having even a superficial knowledge of the economic history of these years, can entertain such notions. The crises of 1837 and 1839 were obviously due to quite a different set of causes—to the bank troubles, the financial mistakes of Jackson’s administration, the inflation of the currency, and to those general conditions of speculation and unduly expanded credit which give rise to crises. The tariff act had nothing whatever to do with them. Indeed, the reductions in duty under it, as we have seen, were slight until 1840, and could hardly have influenced in any degree the breaking out of the panics. Even if the reductions of duty had been greater, and had been made earlier, they would probably have had no effect, favorable or unfavorable, on the inflation of the earlier years or on the depression which followed.

We may dispose at this point of a similar assertion occasionally made in regard to the crisis of 1857,—that the tariff act of 1857 caused or intensified it. This view also is traceable, probably, to Carey. It appears in his writings and in those of his disciples.¹⁰ In fact, the crisis of 1857 was an unusually simple case of activity, speculation, over-banking, panic, and depression; and it requires the exercise of great ingenuity to connect it in any way with the tariff act. As it happened, indeed, the tariff was passed with some hope that it would serve to prevent the crisis. Money was accumulating in the Treasury; and it was hoped that by reducing duties the revenue would be diminished, money would be got out of the Treasury, and the stringency, which was already threatening, prevented.¹¹ The reduction failed to prevent the panic; but, at the time, it would have been considered very odd to ascribe the disaster to the tariff act.

On the other hand, it has been very often said that the activity of trade in 1843–44 was due to the enactment of the protective tariff act of 1842. There may be a degree of truth in this. The unsettled state of legislation on the tariff before the act of 1842 was passed must have been an obstacle to the revival of confidence. After July 1, 1842, there was the uniform duty of 20 per cent.; nay, it was doubtful whether there was by law even that duty in force. It was certain that Congress would wish not to retain the horizontal rate, but would try to enact a new tariff law; yet the quarrel between the Whigs and Tyler made the issue quite doubtful. Such uncertainty necessarily operated as a damper on trade; and the passage of any act whatever, settling the tariff question for the time being, would have removed one great obstacle to the return of activity and prosperity. It is even possible that the passage of the act of 1842 may have had a more direct effect than this. No doubt, in the regular recurrence of waves of activity and depression, the depression of 1840–42 would soon have been followed, in any event, by a period of activity. The point at which activity will begin to show itself under such circumstances is largely a matter of chance. It begins, for some perhaps accidental reason, with one industry or set of industries, and, the materials for general revival being ready, then spreads quickly to the others. In the same way, when the materials for a crisis are at hand, a single accidental failure may precipitate a general panic. In 1842–43 the high duties of the tariff act probably helped to make profits large for the time being in certain manufactures, notably those of cotton and iron. Prosperity in these set in, and may have been the signal for a general revival of confidence and for a general extension of business operations. To that extent, it is not impossible that the protective tariff of 1842 was the occasion of the reviving business of the ensuing years. But it is a very different thing from this to say that the tariff was the cause of prosperity, and that depression would have continued indefinitely but for the re-establishment of high protective duties.

In truth, there has been a great deal of loose talk about tariffs and crises. Whenever there has been a crisis, the free traders or protectionists, as the case may be, have been tempted to use it as a means for overthrowing the system they opposed. Cobden found in the depression of 1839–40 a powerful argument in his crusade against the corn laws, and knew that a return of prosperity would work against him.¹² Within a few years, the opponents of protection in this country have found in general depression a convenient and effective argument against the tariff. In the same way, the protectionists have been tempted to use the crises of 1837 and 1857, and conversely the revival of 1843–44, to help their case. But the effect of tariffs cannot be traced by any such rough-and-ready method. The tariff system of a country is but one of many factors entering into its general prosperity. Its influence, good or bad, may be strengthened or may be counteracted by other causes; while it is exceedingly difficult, generally impossible, to trace its separate effect. Least of all can its influence be traced in those variations of outward prosperity and depression which are marked by “good times” and crises. A protective tariff may sometimes strengthen other causes which are bringing on a commercial crisis. Some such effect is very likely traceable to the tariff in the years before the crisis of 1873. It may sometimes be the occasion of a revival of activity, when the other conditions are already favorable to such a revival. That may have been the case in 1843. But these are only incidental effects, and lie quite outside the real problem as to the results of protection. As a rule, the tariff system of a country operates neither to cause nor to prevent crises. They are the results of conditions of exchange and production on which it can exercise no great or permanent influence.

Remarks of the same kind may be made on the frequent assertion that the prosperity of the country from 1846 to 1860 can be traced to the low duties then in force. He who is convinced, on grounds of general reasoning and of general experience, that the principles of free trade are sound and that protective duties are harmful can fairly deduce the conclusion that the low tariffs of 1846 and 1857 contributed, so far as they went, to general prosperity. But a direct connection cannot be traced. A number of favorable causes were at work, such as the general advance in the arts, the rapid growth of the railway system and of ocean communication, the Californian gold discoveries. There is no way of eliminating the other factors, and determining how much can be ascribed to the tariff alone. Even in the growth of international trade, where some direct point of connection might be found, we cannot measure the effect of low duties; for international trade was growing between all countries under the influence of cheapened transportation and the stimulus of the great gold discoveries.¹³ The inductive, or historical, method absolutely fails us here.

We turn now to another inquiry, as to the effect of the fluctuating duties of this period on the protected industries. That inquiry, it is hardly necessary to say, leads us to no certain conclusion as to the effect of the duties on the welfare of the country at large. It is quite conceivable, and indeed on grounds of general reasoning at least probable, that any stimulus given to the protected industries indicated a loss in the productive powers of the community as a whole. But it has often been asserted, and again often denied, that the duties caused a growth of certain industries; and it is worth while to trace, if we can, the tangible effect in this direction, even though it be but a part of the total effect.

It is the production of iron in the unmanufactured form that has been most hotly discussed in the protective controversy. And in regard to this, fortunately, we have good, if not complete, information.

The duty on pig-iron had been 62½ cents a hundredweight under the tariff act of 1828. In 1832 it was reduced to 50 cents, or $10 per ton. This rate was equivalent to about 40 per cent. on the foreign price at that time; and, under the Compromise Act of 1833, it was gradually reduced, until it reached 20 per cent. in 1842. Under the act of 1842, the duty was again raised to $10 ton. In 1846 it was made 30 per cent. on the value, and in 1857 24 per cent. As the value varied, the duty under the last two acts varied also. In 1847, a time of high prices, the duty of 30 per cent. was equal to $5.75 per ton; in 1852 it was only $3.05; in 1855 it was as high as $6; in 1860 it again fell to $3.40.¹⁴

The duty on bar-iron was of two kinds until 1846,—a duty on hammered bar-iron, and another heavier duty on rolled bar-iron. The duty on hammered bar was, in 1832, fixed at 90 cents per hundredweight, or $18 per ton. That on rolled bar was nearly twice as heavy, being $30 per ton, or nearly 100 per cent. on the value. These duties were reduced under the Compromise Act; and, as we have seen, the reduction on rolled bar was very great, and, in 1842, very sudden. Under the act of 1842, the duty on hammered bar was made $17 per ton, that on rolled bar $25 per ton. The act of 1846 gave up finally the discrimination between the two kinds, and admitted (125) both alike at a duty of 30 per cent.; and the act of 1857 admitted them at 24 per cent.¹⁵

Before proceeding to examine the economic effect of these duties, it should be said that our information as to the production of iron is in many ways defective, and that the statements relating to it in the following paragraphs cannot be taken to be more than roughly accurate. The government figures give us trustworthy information as to the imports; but for the domestic production we must rely, at least for the earlier years, on estimates which are often no more than guesses. Nevertheless, the general trend of events can be made out pretty clearly, and we are able to draw some important conclusions.¹⁶

It seems to be clear that the importation of iron was somewhat affected by the duties. The years before 1842, when the compromise tariff was in force, were years of such disturbance that it is not easy to trace any effects clearly to the operation of the tariff; but imports during these years were a smaller proportion of the total consumption of iron than they were during the period after 1846. It must be remembered that from 1830 till 1842 all railroad iron was admitted free of duty, and that a large part of the imported iron consisted of rails. If this quantity be deducted from the total import, the remaining quantity, which alone was affected by the duties, becomes still smaller as compared with the domestic product. In 1841 and 1842, when duties began to be low under the operation of the Compromise Act, imports were larger in proportion to the home product. On the other hand, in the four years, 1843–46 under the act of 1842, they show a distinct decrease. After 1847, they show as distinct an increase, and continue to be large throughout the period until 1860. In the speculative and railroad-building years, from 1852 to 1857, the importation was especially heavy; and in 1853 and 1854 the total quantity of iron imported was almost as great as the home product.

The most effective part of the iron duties until 1846 was the heavy discriminating duty on rolled bar-iron. That duty amounted (from 1818 till 1846, except during a few months in 1842) to about 100 per cent. Rolled iron, made by the puddling process and by rolling, is the form of bariron now in common use. The process was first applied successfully by Cort in England about 1785, and in that country was immediately put into extensive use. It made bar-iron much more cheaply and plentifully than the old process of refining in a forge and under a hammer; and, at the present time, hammered bar of the old-fashioned kind has ceased to be made, except in comparatively small quantities for special purposes. Cort’s processes of puddling and rolling were practicable only through the use of bituminous coal and coke. The abundant and excellent coal of Great Britain gave that country an enormous advantage in producing rolled iron, as it had already done in smelting pig-iron, and put her in that commanding position as an iron producer which she continues to occupy to the present day. When rolled iron first began to be exported from England to foreign countries, it aroused strong feelings of jealousy, being so much cheaper than other iron. Several countries fought against the improvement by imposing discriminating duties on it.¹⁷ That course was adopted in the United States. In 1818, a discriminating duty was put on rolled iron, partly because it was said to be inferior in quality to hammered iron, and partly from a feeling in favor of protecting the domestic producers of hammered iron. The duty was retained, as we have seen, till 1846. Its effect was neutralized in part by the free admission of railroad iron, which was one form of rolled iron; but, so far as it was applied to rolled iron in general, it simply prevented the United States from sharing the benefit of a great improvement in the arts. It had no effect in hastening the use of the puddling and rolling processes in the country. Though introduced into the United States as early as 1817, these processes got no firm hold until after anthracite coal began to be used, about 1840, as an iron-making fuel.¹⁸

We turn now to the history of the domestic production. By far the most important event in that history is the use of anthracite coal as a fuel, which began about 1840. The substitution of anthracite for wood (charcoal) revolutionized the iron trade in the United States in the same way as the use of bituminous coal (coke) had revolutionized the English iron trade nearly a century before. Up to 1840, pig-iron had been smelted in this country with charcoal, a fuel which was expensive, and tended to become more and more expensive as the nearer forests were cut down and wood became less easily attainable. Charcoal pig-iron could not have competed on even terms with the coal-made English iron. But between 1830 and 1840 it was protected by the heavy duties on English iron and, under their shelter, the production in those years steadily increased. There seems to be no doubt that, with lower duties or no duties at all, the domestic production would have been less, and the import greater. In other words, the duty operated as a true protective duty, hampering international trade and increasing the price of the home product as well as of the imported iron.

In 1840, however, anthracite coal began to be applied to the making of pig-iron. The use of anthracite was made possible by the hot blast—a process which was put in successful operation in England at nearly the same time.¹⁹ The importance of the new method was immediately appreciated, and predictions were made that henceforth there would be no longer occasion for importing iron, even under the 20 per cent. duty of the Compromise Act. Many furnaces were changed from the charcoal to the anthracite method.²⁰ At very nearly the same time, as it happened, the tariff act of 1842 was passed, imposing heavy duties on all kinds of iron, among others on the railroad iron which had hitherto been admitted free. Very shortly afterwards a general revival of trade set in. Under the influence of these combined causes, the production of iron was suddenly increased. The exact amount of the increase is disputed; but the production seems to have risen from somewhere near 300,000 tons in 1840–41, to 650,000 or more in 1846–47. Some part of this great growth was certainly due to the high protection of 1842; but, under any circumstances, the use of anthracite would have given a great stimulus to the iron trade. This is shown by the course of events under the tariff acts of 1846 and 1857. The production remained, on the whole, fairly steady throughout the years when these acts were in force. There was, on the whole, an increase from between 500,000 and 600,000 tons in the earlier years of the period to between 800,000 and 900,000 tons in the later years. For a few years after the passage of the act of 1846, the reduction of the duty to 30 per cent. had little, if any, effect. Prices were high both in England and in the United States; for it was a time of active railroad building in England, and consequently of great demand for iron. The ad valorem duty was correspondingly high. In 1850–51 the usual reaction set in, prices went down, production decreased, and the iron-masters complained.²¹ But the natural revival came after a year or two. Prices rose again; production increased, and continued to increase until 1860. Although the duty, which had been $9 a ton under the act of 1842, was no more than $3 and $4 under the 24 per cent. rate which was in force during the years 1858, 1859, and 1860, and although these were not years of unusual general activity, the domestic production showed a steady growth. The country was growing fast, many railroads were in course of construction, much iron was needed. An undiminished home product was consumed, as well as largely increased imports.

The most significant fact in the iron trade, however, is to be seen, not in the figures of total production, but in the shifting from charcoal to anthracite iron. While the total product remained about the same, the component elements changed greatly. The production of anthracite iron rose steadily: that of charcoal iron fell as steadily. The first anthracite furnace was built in 1840. In 1844 there were said to be twenty furnaces, making 65,000 tons annually.²² Thence the production rose with hardly an interruption being

	In 1844	65,000 gross tons.
	In 1846	110,000 gross tons.
	In 1849	115,000 gross tons.
	In 1854	308,000 gross tons.
	In 1855	343,000 gross tons.
	In 1856	394,000 gross tons.23

As the anthracite iron production increased, that of charcoal iron decreased. Under the tariff act of 1842, a large number of new charcoal furnaces had been put up.²⁴ Many of these had to be given up under the combined competition of anthracite and of English iron. Some maintained themselves by using coke and raw bituminous coal, in those parts of the country where bituminous coal was to be had²⁵; others disappeared. That at least some of them should disappear was inevitable. Charcoal iron for general use was a thing of the past; and the effect of the tariff of 1842 was to call into existence a number of furnaces which used antiquated methods, and before long must have been displaced in any event by anthracite furnaces.

The use of anthracite not only stimulated the production of pig-iron, but also that of rolled iron and railroad bars. Anthracite was first used in puddling and reheating in 1844 and 1845,²⁶ and thenceforward rolled iron was made regularly in large quantities. In 1856 the production of rolled iron was nearly 500,000 tons.²⁷ Iron rails first began to be made while the tariff act of 1842 was in force, though the steps towards making them were taken even before that act put an end to the free admission of English rails.²⁸ With the decline in railroad building and the general fall in iron prices, which took place in 1849, many of the rail mills stopped work. But the business revived with the general prosperity which set in early in the decade, and the production of rails steadily increased until 1856. Under the influence of the crisis of 1857 it fell, but soon rose again, and in 1860 was more than 200,000 tons.²⁹

To sum up: The high duty on iron in its various forms between 1832 and 1841, and again in 1842–46, impeded importation, retarded for the United States that cheapening of iron which has been one of the most important factors in the march of improvement in this century, and maintained in existence costly charcoal furnaces long after that method had ceased in Great Britain to be in general use. The first step towards a vigorous and healthy growth of the iron industry was in the use of anthracite in 1840. That step, so far from being promoted by the high duties, was taken in a time when duties were on the point of being reduced to the 20 per cent. level. Hardly had it been taken when the high duties of the tariff act of 1842 brought about (not indeed alone, but in conjunction with other causes) a temporary return to the old charcoal process. A number of new charcoal furnaces were built, unsuited to the industry of the time and certain to succumb before long. Under the lower duties from 1846 to 1860, the charcoal production gradually became a less and less important part of the iron industry, and before the end of the period had been restricted to those limits within which it could find a permanent market for the special qualities of its iron.³⁰ On the other hand, the lower duties did not prevent a steady growth in the making of anthracite iron; while the production of railroad iron and of rolled iron in general, also made possible by the use of anthracite, showed a similar steady progress. There is no reason to doubt that, had there been no duty at all, there would yet have been a large production of anthracite pig- and rolled iron. Meanwhile the country was rapidly developing, and needed much iron. The low duties permitted a large importation of foreign iron, in addition to a large domestic production. The comparative cheapness and abundance of so important an industrial agent could not have operated otherwise than to promote material prosperity.

We turn now to another industry,—the manufacture of cotton goods, by far the largest and most important branch of the textile industry. Here we are met at the outset by the fact that, at the beginning of the period which we are considering, the cotton manufacture was in the main independent of protection, and not likely to be much affected, favorably or unfavorably, by changes in duties. Probably as early as 1824, and almost certainly by 1832, the industry had reached a firm position, in which it was able to meet foreign competition on equal terms.³¹ Mr. Nathan Appleton, who was a large owner of cotton factory stocks, and who was also, in his time, one of the ablest and most prominent advocates of protective duties, said in 1833 that at that date coarse cottons could not have been imported from England if there had been no duty at all, and that even on many grades of finer goods competition was little to be feared. In regard to prints, the American goods were, quality for quality, as cheap as the English, but might be supplanted, in the absence of duties, by the poorer and nominally cheaper English goods,—an argument, often heard in our own day, which obviously puts the protective system on the ground of regulating the quality of goods for consumers. The general situation of the cotton manufacture, as described by Appleton, was one in which duties had ceased to be a factor of much importance in its development.³²

During the extraordinary fluctuations of industry and the gradual reduction of duties which ensued under the compromise tariff of 1833, the business of manufacturing cottons was profitable and expanded, or encountered depression and loss, in sympathy with the industry of the country at large, being influenced chiefly by the expansion of credit and the rise of prices before 1837 and 1839, and the crisis and liquidation that followed those years. Notwithstanding the impending reductions of duty under the Compromise Act, large investments were made in the business in the earlier part of the period. Thus, in 1835–36, the Amoskeag Company began on a large scale its operations in Manchester, N.H.³³ The depression at the close of the decade checked growth for a while, but did not prevent new investments from being made, even before the passage of the act of 1842 settled the tariff uncertainty.³⁴ The best informed judges said that the causes of increase or decrease of profit had been as one might expect, the same as those that produced fluctuations in other branches of business; and they made no mention of duties or of tariff.³⁵ Appleton’s account of the stage reached by the industry finds confirmation in a careful volume on the cotton manufacture in the United States, published in 1840 by Robert Montgomery. This writer’s general conclusions are much the same as those which competent observers reach for our own time. Money wages were about twice as high in the United States, but the product per spindle and per loom was considerably greater. The cotton, in his time, was not so well mixed, not so thoroughly cleaned, not so well carded in the United States as in England; but, on the other hand, the Americans were superior in ordinary power-loom weaving, as well as in warping and dressing. Elaborate tables are given of the expenses per unit of product in both countries, the final result of which, when all things were considered, showed a difference of three per cent. in favor of the American manufactures. Calculations of this kind, which are common enough in discussions of protective duties, are apt to express inadequately the multiplicity of circumstances which affect concrete industry; yet they may gauge with fair accuracy the general conditions, and in this case were made intelligently and without bias. It is worth noting that Montgomery attributes the success of the Americans in exporting cottons to greater honesty in manufacturing and to the superior quality of their goods.³⁶

During the years following the passage of the act of 1842, by which the duties on cottons were increased largely, the manufacturers made high profits. In Secretary Walker’s Report, and in other attacks on protective duties, much was made of this circumstance, the high profits being ascribed to the new duties. The protectionists denied the connection, and a lively controversy ensued.³⁷ The truth seems to be that the case was not different from that usually presented in economic phenomena,—several causes combined to produce a single general effect. The high duties very likely served, in part, to enable a general advance of profits to be maintained for several years. But there was also an increased export to China, which proved highly profitable. Moreover, the price of raw cotton was low in these years, lagging behind the advance in the prices of cotton goods; and, as long as this lasted, the manufacturers made large gains. The fact that prosperity was shared by the cotton manufacturers in England shows that other causes than the new tariff must have been at work.

On the other hand, when the act of 1846 was passed, the protectionists predicted disaster;³⁸ but disaster came not, either for the country at large or for the cotton industry. Throughout the period from 1846 to 1860 the manufacture of cotton grew steadily, affected by the general conditions of trade, but little influenced by the lower duties. Exact figures indicating its fortunes are not to be had, yet we have enough information to enable us to judge of the general trend of events. The number of spindles in use gives the best indication of the growth of cotton manufacturing. We have no trustworthy figures as to the number of spindles in the whole country; but we have figures, collected by a competent and well-informed writer, in regard to Massachusetts. That State has always been the chief seat of the cotton manufacture, and its progress there doubtless indicates what took place in the country at large. The number of spindles in Massachusetts, which was, in round numbers, 340,000 in 1831, had nearly doubled in 1840, was over 800,000 in 1845, and was over 1,600,000 in 1860, having again nearly doubled during the period of low duties.³⁹ The same signs of growth and prosperity are seen in the figures of the consumption of raw cotton in the United States, which, compiled independently, reach the same general result. Between the first half of the decade 1840–50, and the second half of the decade 1850–60, the quantity of raw cotton used in the mills of the United States about doubled. The annual consumption, which had been about 150,000 bales in 1830, rose to an average of more than 300,000 bales in the early years of the next decade, and again to one of more than 600,000 bales in the years 1850–54. In the five years immediately preceding the civil war, the average annual consumption was about 800,000 bales. During these years the consumption of cotton in Great Britain seems to have increased at very nearly the same rate.⁴⁰ Such figures indicate that the cotton manufacture was advancing rapidly and steadily. Another sign of its firm position is the steady increase during the same period in the exports of cotton goods, chiefly to China and the East. The value of the cotton goods exported averaged but little over $3,000,000 annually between 1838 and 1843, rose to over $4,000,000 between 1844 and 1849, was nearly $7,000,000 a year between 1851 and 1856, was over $8,000,000 in 1859, and almost touched $11,000,000 in 1860. An industry which regularly exports a large part of its products can hardly be stimulated to any considerable extent by protective duties. No doubt, the absence of high duties had an effect on the range of the industry. It was confined mainly to the production of plain, cheap, staple cotton cloths, and was not extended to the making of finer and “fancy” goods. But, even under the high protective duties of the last twenty-five years, the bulk of the product has continued to be of the first mentioned kind, and cottons of that grade have been sold, quality for quality, at prices not above those of foreign goods; while comparatively little progress has been made in the manufacture of the finer grades.⁴¹

The situation of the woollen manufacture differs in some important respects from that of the cotton manufacture, most noticeably in that it is less favorable as regards the supply of raw material. The maker of cotton goods is sure of securing at home cotton of the best quality at a price below that which his foreign rival must pay. But many qualities of wool cannot be produced to advantage in the United States; while others cannot be grown at all, or at least, notwithstanding very heavy protective duties, never have been grown. Moreover, the raw material, when obtained, is neither so uniform in quality nor so well adapted to treatment by machinery as is the fibre of cotton. Wool is of the most diverse quality, varying from a fine silk-like fibre to a coarse hairy one. A process of careful sorting by hand must therefore be gone through before manufacture can begin. In some branches of the industry the qualities of the fibre, and those of the goods which are to be made from it, call for more of manual labor, and admit in less degree of the use of machinery, than is the case with the cottons; and it is a familiar fact, though one of which the true meaning has not often been grasped, that a need of resorting to direct manual labor in large proportion and a difficulty in substituting machinery, constitute, under conditions of freedom, an obstacle to the profitable prosecution of a branch of industry in the United States. But, on the other hand, certain qualities of wool are grown to advantage in the climate of this country and under its industrial conditions, especially strong merino wools of good though not fine grade, of comparatively short staple, adapted for the making of flannels, blankets, and substantial cloths. At the same time, machinery can be applied to making these fabrics with less difficulty than to the manufacture of some finer goods.

Our information in regard to the history of the woollen manufacture is even more defective than that on iron and cottons. For the period between 1830 and 1840 we have no information that is worth anything. In 1840 the industry was confined to making satinets (a substantial, inexpensive cloth, not of fine quality), broadcloths, flannels, and blankets.⁴² The tariff act of 1842 imposed on woollen goods a duty of 40 per cent., and on wool one of three cents a pound plus 30 per cent. on the value. It is said that during the four years in which these rates were in force a stimulus was giving to the making of finer qualities of broadcloths, the development being aided by evasions of the ad valorem duty on wool.⁴³ The act, however, did not remain in force long enough to make it clear what would have been its permanent effect on the woollen manufacture. Whatever may have been the start made in these few years in making finer woollens, this branch of the industry, as is generally admitted, well-nigh disappeared under the duties of 1846. The tariff of that year imposed a duty of 30 per cent, on woollen goods in general; but flannels and worsteds were admitted at 25 per cent., and blankets at 20 per cent. On wool also the duty was 30 per cent. Under this arrangement of duties,—whether or not in consequence of it,—no development took place in those branches of the manufacture which needed wool that was subject to the 30 per cent. duty. The finest grades of woollens were not made at all. But the manufacture of cloths of ordinary quality (so-called cassimeres and similar goods), and that of blankets and flannels, continued to show a regular growth. The census figures are not of much value as accurate statistics, but there seems to be no reason for doubting that they prove a steady advance in the woollen manufacture as a whole.⁴⁴ The growth was confined mostly to those branches which used domestic wool; but within these there was not only increase, but development. The methods of manufacture were improved, better machinery was introduced, and new kinds of goods were made.⁴⁵ It is a striking fact that the very high protective duties which were imposed during the civil war, and were increased after its close, have not brought the manufacture of woollen cloths to a position substantially different from that which had been attained before 1860. The description of the industry which the spokesman of the Association of Wool Manufacturers gave in 1884 is, in the main, applicable to its state in 1860. “The woollen manufacture of this country * * * is almost wholly absorbed in production for the masses. Nine tenths of our card-wool fabrics are made directly for the ready-made clothing establishments, by means of which most of the laboring people and all the boys are supplied with woollen garments. The manufacture of flannels, blankets, and ordinary knit goods—pure necessaries of life—occupies most of the other mills engaged in working up carded wool.”⁴⁶

Some outlying branches of the woollen manufacture, however, showed a striking advance during the period we are considering. The most noteworthy of these is the carpet manufacture, which received a great impetus from the application of newly-invented machinery. The power-loom for weaving ingrain carpets was invented in 1841 by Mr. E.B. Bigelow, and the more complicated loom for weaving Brussels carpets was first perfected by the same inventive genius in 1848.⁴⁷ The new machinery at once put the manufacture of carpets on a firm basis; and in its most important branches, the manufacture of ingrain and Brussels carpets, it became independent of aid from protective duties. A similar development took place in the manufacture of woollen hose. The knitting-frame had been invented in England as early as the sixteenth century, but had been worked only by hand. It was first adapted to machinery in the United States in 1831, and was first worked by machinery at Cohoes in New York 1832. Other inventions followed; and a prosperous industry developed, which supplied the entire domestic market, and was independent of protective duties.⁴⁸ On the other hand, hardly more than a beginning was made before the civil war in the manufacture of worsted goods. In 1860 there were no more than three considerable factories engaged in making worsteds, and the imports largely exceeded the domestic product.⁴⁹ Some explanation of this state of things maybe found in the comparatively low duty of 25 per cent. on worsteds under the tariff of 1846. Something was due to the fact that the worsted industry in England not only was long established, but was steadily improving its methods and machinery. But the most important cause, doubtless, was the duty of 30 per cent. on the long-staple combing wool, which then was needed for making worsted goods, and which physical causes have prevented from being grown to any large extent in the United States.

The greatest difference between the woollen industry as it stands today and as it stood before 1860 is in the large worsted manufacture of the present, which has grown up almost entirely since the wool and woollens act of 1867. The high duties undoubtedly have been a cause of this development, or at least were so in the beginning; but a further and important cause has been the great improvement in combing machinery, which has rendered it possible to make so-called worsted goods from almost any grade of wool, and has largely done away with the distinction between woollen and worsted goods. The result has been that the worsted makers, as well as the makers of woollens, have been able to use domestic wool; and it is in the production of goods made of such wool that the greatest growth of recent years has taken place.

The tariff act of 1857 reduced the duty on woollens to 24 per cent., but much more than made up for this by admitting wool practically free of duty. Wool costing less than twenty cents at the place of exportation was admitted free, which amounted in effect to the exemption of almost all wool from duty. Moreover, dyestuffs and other materials were admitted free or at low rates. The free admission of wool from Canada, under the reciprocity treaty of 1854, had already been in force for three years.⁵⁰ The remission of duties on these materials explains the willingness with which the manufacturers in general acceded to the rearrangement of rates in 1857. In 1860, when the beginnings were made in re-imposing higher protective duties, it was admitted that no demand for such a change came from manufacturers.⁵¹ The only exception was in the case of the iron-makers of Pennsylvania, who did not share in the benefits of the free list, and who opposed the reduction of 1857. So far as the manufacture of woollen goods was concerned, the changes of 1857, as might have been expected, served to stimulate the industry; and it grew and prospered during the years immediately preceding the civil war. A remission of duty on materials obviously operates in the first instance mainly to the advantage of producers and middle-men, and brings benefit to consumers only by a more or less gradual process. The experiment of free wool, with a moderate duty on woollens, was not tried long enough to make certain what would be its final results. It is not impossible that, as is often asserted by the opponents of duties on wool, the free admission of that material would have led in time to a more varied development of the woollen manufacture. On the other hand, it may be, in the case of woollens as in that of cottons, that the conditions in the United States are less favorable for making the finer qualities than for making those cheaper qualities to which the application of machinery is possible in greater degree, and for which, at the same time, the domestic wool is an excellent material. The test of experience under conditions of freedom could alone decide what are the real causes of the comparatively limited range of both of the great textile industries; but it is not improbable that general causes like those just mentioned, rather than the hampering of the supply of wool, account for the condition of the woollen manufacture. However that may be, it seems certain that the practical remission of duty in 1857, whether or no it would in the long run have caused a wide development of the woollen manufacture, gave it for the time being a distinct stimulus; it seems to have had but little, if any, effect on the prices of domestic wool⁵² and it must have tended at the least to cheapen for the consumer goods made in whole or in part of foreign wool.

It would be possible to extend this inquiry farther,⁵³ but enough has been said for the present purpose. In the main, the changes in duties have had much less effect on the protected industries than is generally supposed. Their growth has been steady and continuous, and seems to have been little stimulated by the high duties of 1842, and little checked by the more moderate duties of 1846 and 1857. Probably the duties of the last-mentioned years, while on their face protective duties, did not have in any important degree the effect of stimulating industries that could not have maintained themselves under freedom of trade. They did not operate as strictly protective duties, and did not bring that extra tax on consumers which is the peculiar effect of protective duties. The only industry which presents a marked exception to these general conditions is the manufacture of the cruder forms of iron. In that industry, the conditions of production in the eastern part of the United States were such that the protective duties of 1842 caused a return to old processes, and an enhanced price to the country without a corresponding gain to producers. Even under the rates of 1846 and after the use of anthracite coal, the same effect can be seen, though in less degree.

We often hear it said that any considerable reduction from the scale of duties in the present tariff, whose character and history will be considered in the following pages, would bring about the disappearance of manufacturing industries, or at least a disastrous check to their development. But the experience of the period before 1860 shows that predictions of this sort have little warrant. At present, as before 1860, the great textile manufactures are not dependent to any great extent on protective duties of the kind now imposed. The direction of their growth has been somewhat affected by these duties, yet in a less degree than might have been expected. It is striking that both under the system of high protection which has been maintained since the civil war, and under the more moderate system that preceded it, the cotton and woollen industries have been kept in the main to those goods of common use and large consumption to which the conditions of the United States might be expected to lead them. Very heavy duties have indeed stimulated the manufacture of more expensive goods; and the gradual change in the general economic situation must in any case have had some effect in making the textile industries more diversified. The iron manufacture has advanced by leaps and bounds, chiefly through the development of great natural resources in the heart of the country—hardly touched during the period here under discussion. But even during this period it held its own. Manufactures in general grew and flourished. The extent to which mechanical branches of production have been brought into existence by the protective system has been greatly exaggerated by its advocates; and even the character and direction of their development have been influenced less than, on grounds of general reasoning, might have been expected.

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¹ The Nullifiers had said that such a horizontal rate was the least they were willing to accept. See the Address to the People of the United States by the South Carolina convention, in the volume of “State Papers on Nullification,” published by the State of Massachusetts, p. 69.

² The instructions issued from the Treasury Department may be found in “Exec. Doc.” 1833–34, vol. I., No. 43. It has been thought that the act did not apply to specific duties; but this is a mistake.

³

Year	Duty, per cent
1834	87.0
1836	80.0
1838	72.5
1840	65.0
Jan. 1, 1842	42.5
July 5, 1842	20.0

This calculation is on the basis of the prices of 1833. If prices changed (and they did change greatly), the rates under the Compromise Act would vary materially from those given in the text; since the ad valorem equivalent of the specific duty, and its excess over 20 per cent., were ascertained for each year according to the prices of that year.

⁴ Clay, who drafted the act, probably had no expectation that the 20 per cent. rate ever would go into effect. He thought Congress would amend before 1842, and intended to meet by his compromise the immediate emergency only. See his “Works,” vol. II., pp. 131, 132. He tried to show Appleton and Davis, two leading representatives of the protectionists, that “no future Congress would be bound by the act.” See Appleton’s speech on the Tariff Act of 1842, “Appendix to Cong. Globe,” 1841–42, p. 575.

⁵ The Compromise Act was so loosely constructed that doubt was entertained whether under its terms any duties at all could be collected after June 30, 1842. The point was carried before the Supreme Court, which decided, however, that the rate of 20 per cent. was in effect during the two months before the act of 1842 went in force. (Aldridge vs. Williams, 3 Howard, 9.) Justice McLean dissented; and there is much force to his dissenting opinion and to the argument of Reverdy Johnson, the counsel against the government.

⁶ A full account of this struggle is in Von Holst’s “Constitutional History,” vol. III., pp. 451–463.

⁷ “Works,” vol. IV., pp. 199, 200. Calhoun thought that a good deal was due also to the influence of the “moneyed men” who wanted the Treasury to be filled.

⁸ Seward said, in 1857, that “the vote of not a single Senator will be governed by any partisan consideration whatever.” Appendix to “Congressional Globe,” 1856–57, p. 344; and see Hunter’s speech, ibid., p. 331.

⁹ References to the supposed effects of the act of 1833 abound in Carey’s works. As good a specimen as any is this: “Agitation succeeded in producing a total change of system in the tariff of 1833. * * * Thenceforward the building of furnaces and mills almost wholly ceased, the wealthy English capitalists having thus succeeded in regaining the desired control of the great American market for cloth and iron. As a consequence of their triumph there occurred a succession of crises of barbaric tendency, the whole terminating, in 1842, in a scene of ruin such as had never before been known, bankruptcy among the people being almost universal,” etc. “Letters on the Iron Question” (1865), p. 4, printed in his “Miscellaneous Works” (1872). To the same effect, see his “Financial Crises,” p. 18; “Review of Wells’ Report,” p.5; “Social Science” II., p. 225. Professor Thompson makes the same statement in his “Political Economy,” p. 353. See also Elder, “Questions of the Day” (1871), pp. 200, 201. Senator Evarts, in a speech made in 1883, ascribed to the act of 1833 “a bankruptcy which covered the whole land, without distinction of sections, with ruin.” The pedigree of statements of this kind, which are frequent in campaign literature, can he traced back to Carey. Doubtless Carey wrote in good faith; but his prejudices were so strong as to prevent him from taking a just view of economic history.

Oddly enough, Calhoun ascribed the crisis of 1837 to the fact that duties under the act of 1833 remained too high. The high duties brought in a large revenue and caused a surplus in the Treasury; the deposit and distribution of this brought inflation and speculation, and eventually a crisis (“Works,” IV., p. 174). No doubt the high duties were one cause of the government surplus, and thereby aided in bringing about the crisis, so that this view, incomplete as it is, has more foundation than Carey’s explanation. On the other hand, Clay, as might he expected, took pains to deny that the act of 1833 had any thing to do with the troubles of the years following its passage (“Works,” II., pp. 530, 531; edition of 1844).

¹⁰ Carey speaks in one place of “the terrific free-trade crisis of 1857.” Letters to Colfax,” p. 15; “Financial Crises,” p. 8; “Review of Wells,” p. 5 (all in his “Miscellaneous Works”). Thompson (“Political Economy,” p.357) says: “In 1857, Congress reduced the duties twenty-five percent. * * * It at once intensifed all the unwholesome tendencies in our commercial and industrial life. * * * Another great panic followed through the collapse of unsound enterprises.”

¹¹ See a letter from a Boston merchant to Senator Wilson, “Congr. Globe, 1856–57, Appendix,” p. 344; and the statement by Senator Hunter, ibid., p. 329.

¹² See passages in Morley’s “Life of Cobden,” pp. 162, 163, 210.

¹³ The growth of foreign trade under the tariffs of 1846 and 1857 was certainly very striking. In Grosvenor’s “Does Protection Protect?” there is a table showing the imports and exports per head of population from 1821 to 1869, in which it is stated that the annual average per head of population was:

	Imports	Exports
In 1843.46,	$4.66	$5.22
In 1847.50,	$6.35	$6.32
In 1851.55,	$9.10	$7.35
In 1856.60,	$10.41	$9.45
Annual average of the four years 1843–46,	92.7	100.0
Annual average of the four years 1847–50,	138.3	136.8
Annual average of the five years 1851–55,	231.0	186.2
Annual average of the five years 1856–60,	305.0	278.2

The imports and exports were, in millions of dollars:

But how are we to measure the share which low duties had in promoting this growth?

¹⁴ The duty from year to year, on the average, for the fiscal years ending June 30th, is given in the following table. The foreign value, on which the duty was computed, is also given. The figures are compiled from the tables given in French, “History of Iron Manufacture,” p. 70, and in the report of the Iron and Steel Association for 1876,” p. 182.

Year ending June 30th	Average value	Duty (30 per cent. till 1857, 24 per cent. after 1857.)
1847	$19.90	$5.95
1848	$15.80	$4.75
1849	$13.30	$4.00
1850	$12.70	$3.80
1851	$12.60	$3.75
1852	$10.20	$3.05
1853	$13.40	$4.00
1854	$18.00	$5.40
1855	$20.00	$6.00
1856	$19.80	$5.95
1857	$19.50	$5.85
1858	$17.60	$4.20
1859	$15.20	$3.65
1860	$14.10	$3.40

¹⁵ Between 1832 and 1842, an exception had been made for one class of rolled iron—iron rails actually laid down on railroads. These were admitted free of duty; or, rather, a drawback was granted of the full amount of duty due or paid on them. Between 1828 and 1832, a drawback had been granted such as to make the duty on railroad iron only 25 per cent. After 1842, however, it was charged with duty like any other iron.

¹⁶ The reader who wishes to examine further the data as to the production of iron before 1860, is referred to the Appendix to the Quarterly Journal of Economics for April, 1888, vol. II., pp. 377–382, where I have considered the figures in detail.

¹⁷ In France a discriminating duty equivalent to 120 per cent. was imposed in 1833 on iron imported by sea, i.e., on English iron. Armé. “Tarifs de Douanes,” I., 144, 145. The discrimination was maintained until 1855. Ibid., 271.

¹⁸ The first puddling and rolling mill in the United States was put up in Pennsylvania in 1817. The first puddling in New England was done as late as 1835. Wood was used as fuel at the outset. Swank, “Iron in All Ages,” 166, 330. The effect of the duty on rolled iron cannot be better described than in the clear and forcible language used by Gallatin in 1831: “It seems impracticable that iron made with charcoal can ever compete with iron made from bituminous coal. * * * A happy application of anthracite coal to the manufacture of iron, the discovery of new beds of bituminous coal, the erection of ironworks in the vicinity of the most Easterly beds now existing, and the improved means of transportation, which may bring this at a reasonable rate to the sea-border, may hereafter enable the American iron-master to compete in cheapness with foreign rolled iron in the Atlantic districts. On those contingencies the tariff can have no effect. To persist, in the present state of the manufacture, in that particular competition, and for that purpose to proscribe the foreign rolled iron, is to compel the people for an indefinite time to substitute a dear for a cheap article. It is said that the British iron is generally of inferior quality; this is equally true of a portion of that made in America. In both cases the consumer is the best judge,—has an undoubted right to judge for himself. Domestic charcoal iron should confine itself to a competition with the foreign iron made from the same fuel,” Gallatin added, prophetically: “Your memorialists believe that the ultimate reduction of the price of American iron to that of British rolled iron can only, and ultimately will, be accomplished in that Western region which abounds with ore, and in which are found the most extensive formations of bituminous coal.”—“Memorial of the Free-Trade convention,” pp. 60,61.

¹⁹ The hot blast was successfully applied in a furnace in Pennsylvania in 1835, but the experiment was not prosecuted. In 1837, Crane applied it in Wales, and, about the same time the process was successfully used in this country. Swank, “Iron in All Ages,” 208–273; French, History of the Iron Trade,” 58–60.

²⁰ See the notices in Hazard’s “Statistical Register,” I., pp. 335, 368; III., p. 173; IV., p. 207. That great results were at once expected from the new method is shown by an interesting speech of Nicholas Biddle’s, ibid., II., p. 230.

²¹ The iron-masters admitted that the act of 1846 had been sufficiently protective when first passed. But in 1849 and 1850, they began to complain and ask for higher duties. See “Proceedings of Iron Convention at Pittsburg (1849),” p. 9; “Proceedings of Convention at Albany,” pp. 27, 42. They certainly had a legitimate subject for complaint in the operation of the ad valorem duty, in that it tended to exaggerate the fluctuations of prices. When prices abroad were high, the duty was high; when prices abroad were low, the duty was low. Consequently, the price of foreign iron in the United States, which is the sum of the foreign price and the duty, fluctuated more widely than the foreign price alone. This was certainly an evil, especially with an article whose price was liable under any conditions to vary so much as the price of iron. See the table above, p. 124.

²² See a “Letter of the Philadelphia Coal and Iron Trade to the Committee on Finance” (pamphlet, Philadelphia, 1844).

²³ The figure for 1846 is that given in Taylor, “Statistics of Coal,” p. 133. Swank gives the figure for 1846 as 123,000 (gross?) tons. “Iron in All Ages,” p. 274. The figures for 1849–56 are from Lesley, “Iron Manufacturers’ Guide (1859),” pp. 751,752. Those given by Grosvenor, “Does Protection Protect?” p. 225, vary somewhat; but the differences are not great.

²⁴ See the figures in Grosvenor, p. 215. There were built in 1843, 9 charcoal furnaces; in 1844, 23; in 1845, 35; in 1846, 44; in 1847, 34; in 1848, 28; in 1849, 14.

²⁵ The use of coke began in the United States about 1850, but was of little importance until after 1856. The use of raw bituminous coal was introduced about 1850 in the Shenango and Mahoning valleys (on the border between Pennsylvania and Ohio), where there is suitable coal. Swank, “Iron in All Ages,” pp. 281–284. In the “Report of the American Iron and Steel Association for 1876” (prepared by Swank), the following figures are given of the production of iron with the various kinds of fuel. I have selected a few typical years:

Year	Anthracite iron	Charcoal iron	Bituminous coal and coke iron	Total
1854	339,000	342,000	55,000	736,000
1856	443,000	370,000	70,000	883,000
1858	362,000	285,000	58,000	705,000
1860	519,000	278,000	122,000	919,000

The figures here denote net tons.

²⁶ Speech of A. S. Hewitt, in “Proceedings of Iron Convention at Albany” (1849), p. 54.

²⁷ Lesley, “Iron Manufacturers’ Guide,” p. 761.

²⁸ See a pamphlet, “Observations on the Expediency of Repealing the Act by which Railroad Iron is Released from Duty,” 1842. It gives an account of large rolling mills then being erected at Danville, Pennsylvania.

²⁹See the figures given in “Report of Iron and Steel Association for 1876,” p. 165. The production of rails is there stated to have been:

In 1849	24,000 tons.
In 1850	44,000 tons.
In 1857	162,000 tons.
In 1854	108,000 tons.
In 1856	180,000 tons.
In 1860	205,000 tons.

³⁰ Charcoal iron has qualities which cause a certain quantity of it to be in demand under any circumstances. Since it settled down, about 1860, to its normal place as a supplement to coal-made iron, the product has steadily increased with the growing needs of the country, In the years 1863–65 the annual product was about 240,000 tons. In 1886 it was 460,000 tons.

³¹ See the previous essay on “Protection to Young Industries,” Part III., where an account is given of the history of the cotton manufacture up to 1824.

³² See Appleton’s speech on the Verplanck bill of 1833, “Congressional Debates,” IX., pp. 1216–1217. Compare his remarks in the same volume at p. 1579.

³³ Potter, History of Manchester, p. 552. The Stark Mills were built in 1838, the second Stark Mills in 1839.

³⁴ Earl, “History of Fall River,” pp. 35–37. “From the panic of 1837, which affected every business centre in the country, Fall River seems to have speedily recovered, since within a few years from that date nearly every mill in the place was enlarged, though only one new one was built.” Ibid., p. 53.

³⁵ See the answers from T.G. Cary, treasurer of a Lowell mill, and from Samuel Batchelder to circulars sent out in 1845 by Secretary Walker. Batchelder, our most trustworthy informant on the early history of the cotton manufacture, writes that “the increase and decrease of profit from 1831 to 1844 have conformed very nearly to the general prosperity of the country.” The circulars and answers are printed in the appendices to Walker’s Report. Exec. Doc. 1845–46, vol. II., No. 6, pp. 215, 216, 313.

³⁶ See Montgomery’s “Cotton Manufacture,” pp. 29, 38, 82, 86, 91, 101. The tables of expenses are on pp. 124, 125; the remarks on quality of goods, on pp. 130, 194; on wages and product, on pp. 118–121, 123. Montgomery was superintendent of the York Factories at Saco, Maine, of which Samuel Batchelder was treasurer. Allusions to Montgomery’s book, and confirmation of some of his conclusions, may be found in Batchelder’s “Early Progress of the cotton Manufacture,” p. 80 and following. At a convention in favor of protection, held in New York in 1842, committees were appointed on various industries. The committee on cottons reported a recommendation to Congress of minimum duties on plain and printed goods, but added that these duties were “more than is necessary for much the largest part of the cotton goods,” and that most of the printed calicoes are now offered to the consumer at lower prices than they could be imported under a tariff for revenue only.”

³⁷ See T.G. Gary, “Results of Manufactures at Lowell,” Boston, 1845; N. Appleton, “Review of Secretary Walker’s Report,” 1846; and the speeches of Rockwell, “Congr. Globe,” 1845–46, pp. 1034–1037, and Win throp, ibid., Appendix, p. 969.

³⁸ Abbott Lawrence predicted in 1849 that “all this [a general crash] will take place in the space of eighteen months from the time this experimental bill goes into operation; not a specie-paying bank doing business will be found in the United States,” “Letters to Rives,” p. 12. Appleton made a similar prediction in his “Review of Walker’s Report,” p. 28.

³⁹ The following figures are given by Samuel Batchelder in a “Report to the Boston Board of Trade,” made in 1860 (published separately; the essential parts printed also in “Hunt’s Merchants’ Magazine,” xlv., p. 14):

Spindles in Massachusetts:

In 1831	340,000
In 1840	624,500 (other sources make it 665,000)
In 1845	817,500
In 1850	1,288,000
In 1855	1,519,500
In 1860	1,688,500

For New England, and the United States as a whole, Batchelder gives the following figures, taken from De Bow, for the years 1840 and 1850. They are not entirely trustworthy, but may be accepted as roughly accurate. We add the census figures for 1860:

Spindles in:	New England	United States
1840	1,597,000	2,112,000
1850	2,751,000	3,634,000
1860	3,859,000	5,236,000

⁴⁰ The reader is referred to the Appendix to the Quarterly Journal of Economics for April, 1888, for tables of the consumption of cotton and of the exports of cotton goods.

⁴¹ Batchelder, who was a decided advocate of protection, wrote in 1861 a series of articles for the Boston Commercial Advertiser, in which, after comparing the prices and qualities of English and American shirtings, he said: “The inquiry may then be made, What occasion is there for a protective duty? The answer is: There would be none in the ordinary course of business. But there are sometimes occasions when * * * there has been a great accumulation of goods in the hands of manufacturers abroad, so that, if crowded on their market, it would depress the price of the usual supply of their customers at home. On such occasions, our warehouse system affords the opportunity, at little expense, to send the goods here, where they may be ready to be thrown on the market to be sold,” etc.

In Ellison’s “Handbook of the Cotton Trade,” it is stated, at p. 29; “It is believed that, had it not been for the free-trade policy of Great Britain, the manufacturing system of America would at the present time have been much more extensive than it is; but the spinners and manufacturers of Lancashire can as yet successfully compete with those of Lowell, though for how long a time remains to be seen, for the latter are yearly gaining experience and improving their machinery, so that before long they will be able to compete with the old country, more especially should the executive [sic] abolish the present protective system adopted with respect to the import of cotton manufactures.” This was written in 1858.

⁴² See a passage quoted from Wade’s “Fibre and Fabric” in the Bureau of Statistics’ “Report on Wool and Manufactures of Wool.” 1887, p. xlvii.

⁴³ Grosvenor. “Does Protection Protect?” p. 147; Introduction to the volume of the “Census of 1860” on Manufactures, p. xxxiii.

⁴⁴ The census figures on the woollen manufacture are:

In millions of dollars:

	Capital	Value of Product	Hands Employed
1840	15.7	20.0	21,342
1850	26.1	43.5	34,895
1860	30.8	61.9	41,360

The figures for 1850 are exclusive of those relating to blankets; for 1860 are exclusive of those relating to worsteds.

⁴⁵ “Eighteen hundred and fifty saw the success of the Crompton loom at Loweland Lawrence, on which were made a full line of Scotch plaids in all their beautiful colorings, as well as star twills, half-diamonds. * * * Up to that time fancy cassimeres had been made largely through the Blackstone Valley (in Rhode Island) on the Crompton and Tappet looms, as made by William Crompton. As early as 1846 the Jacquard was used at Woonsocket and Blackstone. From 1850 to 1860 fancy cassimeres made a rapid advance, and the styles ran to extremes far more than they have ever since.” Wades “Fibre and Fabric,” as quoted above, p. xlviii.

According to the official “Statistical Information Relating to Certain Branches of Industry in Massachusetts,” 1855, at pp. 573–575, woollen goods were made in 1855 in that State as follows:

Broadcloth to the value of	$838,000
Cassimeres to the value of	$5,015,000
Satinets to the value of	$2,709,000
Flannels and blankets to the value of	$3,126,000
Woollen yarns to the value of	$386,000

⁴⁶ Mr. John L. Hayes, in the “Bulletin of the Association of Wool Manufacturers,” vol. xiv., p. 116. Mr. Hayes also states the woollen manufacture to be “capable of producing commodities of the highest luxury—rich carpets, fine upholsteries, and superfine broadcloths”; but his description of other branches of the industry is similar to that quoted in the text on card-wool goods. “The dress goods manufactured are fabricates almost exclusively for the million, the women of the exclusive and fashionable classes supplying themselves mainly through French importations. The vast carpet manufacture of Philadelphia, larger than in any city of Europe, has its chief occupation in furnishing carpets for the more modest houses.”

⁴⁷ See the sketch of Mr. Bigelow’s career up to 1854, in “Hunt’s Merchants Magazine,” xxx., pp. 162–170.

⁴⁸ See the account of the history of the manufacture of knit goods in the—"Census of 1860,” volume on Manufactures, pp. xxxix.-xlv. Compare the brief sketch by John L. Hayes in his address on “Protection a Boon to Consumers” (Boston, 1867), pp. 9–11. No attempt had been made before 1860, in the United States or elsewhere, to make knit goods of cotton.

⁴⁹ 160 See the Introduction to the volume on Manufactures, “Census of 1860,” pp. xxxvi.-xxxix.

From the figures of production in the “Census of 1860,” and from those of imports in the “Report on Commerce and Navigation “for the fiscal year 1859–60, we have the materials for a comparison of the domestic and the foreign supply of the most important kinds of woollen goods. The figures are:

	Production, 1860	Imports, 1859–60
Woollens generally (including flannels, but not blankets, shawls, or yarns	$43,500,000	$13,350,000
Carpets,	$7,860,000	$2,200,000
Worsteds	$3,700,000	$12,300,000

⁵⁰ Large quantities of combing wool were imported from Canada under the reciprocity treaty, and were used in making worsteds and carpets. In 1866, when the treaty was terminated, and high duties had been imposed on wool in general, the manufacturers pleaded hard for the continued free admission of Canada wool, though they were active in securing the general high duties of 1867 on wool and woollens. But they did not succeed in getting the Canada wools free. See the “Statement of Fact Relative to Canada Wools and the Manufacture of Worsteds,” made by the National Association of Wool Manufacturers, Boston, 1866.

⁵¹ Senator Hunter, who had been most active in bringing about the passage of the act of 1857, said, during the debate on the Morrill bill of 1860: “Have any of the manufacturers come here to complain or to ask for new duties? If they have, I am not aware of it, with the exception, perhaps, of a petition or two presented early in the session by the Senator from Connecticut. Is it not notorious that if we were to leave it to the manufacturers of New England themselves, to the manufacturers of hardware, textile fabrics, etc., there would be a large majority against any change? Do we not know that the woollen manufacture dates its revival from the tariff of 1857, which altered the duties on wool?” “Congressional Globe,” 1859–60, p. 301. Cp. the note to p. 138, below.

The prices of other grades moved similarly. The panic of 1857 caused a fall in 1858, but in the following year the old level was recovered. The figures are based on the tables of wool prices in the Bureau of Statistics’ “Report on Wool and Manufactures of Wool,” 1887, p. 109. The movement of wool prices abroad during these years seems to have been about the same.

⁵² The price per pound of medium wool, averaged from quarterly quotations, was:

	cts.
In 1852	38½
In 1853	53
In 1854	42½
In 1855	38
In 1856	45
In 1857	46
In 1858	36
In 1859	47
In 1860	47½

The prices of other grades moved similarly. The panic of 1857 caused a fall in 1858, but in the following year the old level was recovered. The figures are based on the tables of wool prices in the Bureau of Statistics’ “Report on Wool and Manufactures of Wool,” 1887, p. 109. The movement of wool prices abroad during these years seems to have been about the same.

⁵³ In the Introduction to the volume on Manufactures of the “Census of 1860,” to which reference has been made before, there is a useful sketch of the history of various branches of manufacture up to that date.