The Congressional Globe, Volume 13, Part 2: Twenty-Eighth Congress, First Session Page: 341
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Feb. 1844.
APPENDIX TO THE CONGRESSIONAL GLOBE.
m.
28th Cong 1st Sess.
The Tariff—Mr. Phelps.
Senate,
There is a demand for cotton in Great Britain
for three purposes: 1. For her domestic consump-
tion. 2. For American consumption. And 3. For
the supply of other markets, foreign both to them
and to us.
In regard to her domestic consumption, it is diffi-
cult to perceive how the manufacture of the article
by us, for our own consumption, should affect it.
Cotton fabrics have become there, as they are here,
an article of necessity. There is no substitute for
them. Flax has been superseded. To the extent
of her own necessities at home, she iftust have it;
and if she cannot supply herself elsewhere, she
must take it from us. If she can obtain her sup-
plies from her own dependencies, she will do
But competition from abroad in the growth of the
raw material we cannot avoid. No financial or eco-
nomical regulations of our own will prevent it.
It has been represented that the cotton used
in Great Britain, for the supply of the Ameri-
can market, is very small in comparison with her
domestic consumption. It it be so, the difference pro-
uced by manufacturing for ourselves will be trivial.
So far as our own consumption is concerned, the
wants of our own people must be the criterion; and
the same amount of the raw material will be required,
whether the fabric is manufactured here or abroach
Suppose ten millions in value of the fabric is wanted
for the American market: would not the same
amount be required if manufactured at homer Sir,
the demand for cotton would be increased by the
manufacture of the fabric in this country. If the
manufacture could be distributed throughout the
country, and a cotton factory established in every
county in the Union, the consumption of the article
would be increased fifty per cent. Place it within
the reach of every agriculturist, where the surplus
produce of his farm would enable him to purchase
it, and he would use it the more freely. They are
many articles of production, especially m the north-
ern States, which will not bear transportation, and
some are of a perishable character. The establish-
ment of manufactures in evei y section creates a home
market in every neighborhood, and thus enables
your people to purchase the fabric in exchange for
productions which would otherwise be of no value.
The manufacturers become consumers, not merely
of your great staples of exportation, but of that spe-
cies of agricultural production which is never regard-
ed as exportable.
It is said, that by withdrawing your support from
the laborers of Europe, you deprive them of the
ability of purchasing and consuming your cotton.
Be it so. Will not the employment of your own
laborers confer a conesponding ability upon them?
If one hundred thousand people are sustained in
Europe by your demand for cotton fabrics, will not
the same number be sustained here' and will not
their wants, both of the raw material and of the
means of subsistence, be as great! Nay, they will
be greater, inasmuch as the American laborer is bet-
ter fed and better clothed than the European oper-
ative. Sir, the idea that the establishment and exten-
sion of our cotton manufactories would have a direct
and inevitable tendency to destroy the demand for
the raw material, is to me a paradox, which I
would thank the honorable senator from South
Carolina to explain. He has spoken of a paradox
which troubles him, and which I will endeavor to
explain in due season. The senator speaks of ruin
to the cotton interest from this source—of the neces-
sity of giving up the cultivation, because we are
providing for its consumption. He seems to think
that if we manufacture for ourselves, Great Britain
will want none of the material for her consumption,
and we shall need none here. And then, sir, how
is it as to the cotton necessary to supply other mar-
kets of the world? If Great Britain supplies them,
she must get the material from us, if she cannot get
it elsewhere; and how is their consumption to be af-
fected by the inquiry, whether the manufacture for
our use is to be carried on here or in Europe'
Whether Great Britain can get the article cheaper
elsewhere than from this country, is a problem
which time must solve. If there be danger on this
score, the most effectual mode of obviating it is to
secure to ourselves, by fostering our domestic estab-
lishments, the foreign market, and thus secure not
only the sale of the raw material, but the profitable
employment of our surplus and otherwise useless
labor. This process has commenced already. We
compete with Great Britain in South America, in
China, the East and West Indies—indeed, every-
where where a market is to be found. Sir,
which is best—to content ourselves with a bare i
competition for the sale of the raw material only,
and that in the_ ports of our great and only ri-
val in commercial pursuits, or to enter boldly into
a competition, not for that material only, but for its
value enhanced by our labor, and one m which we
are not at her mefcy? t)oes the Senatoi: imagine
that such a competition, tending directly to transcend
the demand for the fabric, to an overstock of the
market at the liazuid of the manufacturer, will di-
minish the demand for the raw material? Sir, I have
high authority for my position. A distinguished
citizen of South Carolina, late a member of this
body, once said to me, "Sir, your protective system
will fail you—your policy is wrong. You must be
a manufacturing people, but you must seek a foreign
market; when you have secured that, your prosper-
ity will stand upon a stable basis." Sir, tkat. dis-
tinguished man was right in his advice in the last
particular—he had advised us to bell the cat. I
agree with him, that if we can secure the foreign
market, we are safe. But he did not advise how we
were to secure the foreign market, without first se-
curing our own; nor how we could successfully
compete with Great Britain in the great mart of the
world, if we suffered her to stifle and crush our
manufacturing energies at home. Did that sagacious
man suppose that this competition to which he
urged us, and which was to give us permanent pros-
perity, was to sacrifice the Interests of his native
State, and blast the hopes of her sons?
Sir, in the English maket we should have to com-
pete with Brazil, Texas, indeed every country capa-
ble of growing cotton. How far the British East
India possessions may hereafter supply that mar-
ket, we are not now able to determine; but I warn
the senator that the interests of the northern man-
ufacturer and the southern planter are indentical.
Let him see to it, that in destroying the former he
does not sacrifice the latter also. Revolutions are
no new thing in the commercial world. Cotton
has taken the place of indigo as a southern produc-
tion. It will be well to inquire what shall succced
to cotton, when that shall have shared the same
fate.
Mr. President, there are other objections to the
policy of the act of 1842, addressee! rather to the
prejudices and selfish passions, than to the sound
judgment of men. The old story of "taxing the
many for the benefit of the few," so often told,
and as often refuted, is lenewed. The senator
from New Hampshire, assuming that the duty en-
hances the price of the article to the extent of the
impost, and professing to deal in facts, very gravely
proceeds to give us, to a fraction, the enormous bur-
den laid upon the people of his State by this most
oppressive tariff. He tells us that there are 300,000
people in that State; that the consumption of iron
there is equal to an average of twenty-five pounds
to each soul; that a duty of three cents per pound
is equal to seventy-five cents to each person, and
amounts, in the aggregate, to the sum of $225,000—
being more than four times the whole State tax.
These are facts which will not be disputed. But
what use does he make of them? Why, he assumes
that the cost to the consumer is increased, and his
constituents taxed to that amount. Without the aid
of this assumption, erroneous as if is, his facts^are
not worth a straw. They furnish no aid to his ar-
gument, and lead him to no such conclusion. The
senator is most unfortunate in his illustrations.
Will he permit me to substitute for his assumption
certain other facts, which I commend to his espe-
cial attention? The most common, nay, universal
use of iron in that section of the country, is in the
form of cut nails, the duty on which, by the act of
1842, is three cents per pound; yet the article can
be bought in the village where I live for three and a
half cents the pound. Deducting the three cents
for the duty, the cost of the article would be one
half cent.! Does the senator really imagine, that if
this odious act were repealed, the price would fall
to that sum? The honorable senator also adduces
leather as a further illustration of the burdens im-
posed upon his people. Here is equally unfortunate.
He states the duty at 30 to 35 per cent. He has
not told us the amount paid by his constituents, but
has left that to be guessed at. Now, the fact is,
that durtng the last two years for which we have
returns, not a pound of leather has been imported,
except a small amount of morocco. No duty has
been levied. The manufacture at home has equalled
the consumption. He will not contend that the
price of the article has been raised by this nominal
duty.
Sir, the senator could not have selected two ar-
ticles which would have so happily illustrated the
fallacy of his assumption. There is not an article
manufactured in this country to any extent which
has not been made cheaper to the consumer. It is
not true that the tax is uniformly paid by the cor.- ,
sumer. It depends upon the ratio of demand and
Supply. When the former increases, the prii«
rises; when the reverse is the case, it falls. Some-
times it falls upon the consumer, sometimes the
producer, and often upon the intermediate holder,
and not unfrequently upon all.
The senator from South Carolina argues that the
importer adds the duty to the cost, the merchant
adds his profit, the country dealer his, and so
on till it falls ultimately on the consumer. If
the article be one of necessity, and you have no
competition at home, I admit sucli is the case! Bi t
if you v^ill sustain your home manufacturer, whi t
is the result? This cumulative process raises the
cost beyond what it can be made for at home; the
article is unsaleable except by a reduction of price;
and thus the duty falls upon the foreign manufactu-
rer, or importer, or both, in reduction of their
profits.
The senator {torn New Hampshire tells us that, in
England the price of coffee fell upon the reduction
of the duties. Here he is unfortunate again. Cof-
fee is not produced in England, and no raising of
duties could produce domestic compf-tition to keep
down the price. He selects an article to 'which the
protective policy could not be extended, either that
country or this.
Mr. President, the uniform effect of competition is
to reduce prices. But you can have no compe-
tition unless you protect your domestic establish-
ments. The American manufacturer cannot com-
pete with the immense capital in England. For-
eign goods are thrown into our market, and sold at
a great loss, which the foreigner can bear; and thus
the price is reduced, and the domestic manufacture
crushed in its infancy. The market being thu«
yielded to the foreigner, he makes amends for his
loss. Nor is this all: he has often on his hands a
surplus, which the ordinary maxims of trade re-
quire should be sold at any price. After all is sold
which can be sold at a profit, the surplus is forced
off for what it will bring. The object of protecting
duties is not to give the manufacturer at home
great profits, but to protect him against this opera-
tion. It is to sustain the weaker party in the com-
petition.
The senator from South Carolina cannot un-
derstand how it is that we desire protective du-
ties, while we insist that the effeet is to reduce
the price of the fabric. This is the paradox which
he desires explained. Sir, the explanation is ea-
sy. The manufacturer, if sustained in his enter-
prise, is enabled, by the greater skill acquired by
experience and by improvement in machinery, to
manufacture cheaper at the same profit. That skill
and that improvement will never be attained, if you
suffer him to be sacrificed in the outset by the
weight of foreign capital. Domestic competition
will prevent great profits; and as the manufacture is
matured, and becomes cheaper, the price of the fab-
ric is reduced to the consumer.
There is at this time nearly three hundred mil-
lions of capital in the United States invested in man-
ufacturing operations, and the annual production is
computed at two hundred and forty millions. Is not
this an interest worth protecting?
There are twenty millions of sheep in the United
States, and the amount of capital invested in real
estate depending for its value upon the growth of
wool is immense. All this rests upon the success of
that branch of manufacture.
Th#- opponents of the protective policy have re-
sorted to many ad captandum arguments to render it
unpopular. It is represented, not only as an im-
mense tax upon the country, but as a system of
favoritism, as tending to build up an aristocracy of
wealth, disregarding the interests of the farmer,
favoring the rich, and oppressing the poor. Appeals
are made to sectional feelings; the people of the
North are told that they are taxed to fill the pockets
of the sugar planter of Louisiana; the people of the
South, that they are taxed to support the manufac-
turer of the South; New Hampshire is reminded
that she is taxed upon salt and iron, which are n&t
found there; and the farmer of the West is taxed
for the benefit of the wool grower of the East.
Sir, in the great variety ©f interests, of pursuit and
production, in this widely extended country of
ours, with all its variety of soil and climatc and re-
sources, it is impossible to find anyone branch of
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United States. Congress. The Congressional Globe, Volume 13, Part 2: Twenty-Eighth Congress, First Session, book, 1844; Washington D.C.. (https://texashistory.unt.edu/ark:/67531/metapth2368/m1/351/: accessed April 26, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.