Thirty Years' View (Vol. I of 2)

CHAPTER XLVII.

REGULATION OF COMMERCE

The constitution of the United States gives to Congress the power to regulate commerce with foreign nations. That power has not yet been executed, in the sense intended by the constitution: for the commercial treaties made by the President and the Senate are not the legislative regulation intended in that grant of power; nor are the tariff laws, whether for revenue or protection, any the more so. They all miss the object, and the mode of operating, intended by the constitution in that grant – the true nature of which was explained early in the life of the new federal government by those most competent to do it – Mr. Jefferson, Mr. Madison, and Mr. Wm. Smith of South Carolina, – and in the form most considerate and responsible. Mr. Jefferson, as Secretary of State, in his memorable report "On the restrictions and privileges of the commerce of the United States in foreign countries;" Mr. Madison in his resolutions as a member of the House of Representatives in the year 1793, "For the regulation of our foreign commerce;" and in his speeches in support of his resolutions; and the speeches in reply, chiefly by Mr. William Smith, of South Carolina, speaking (as it was held), the sense of General Hamilton; so that in the speeches and writing of these three early members of our government (not to speak of many other able men then in the House of Representatives), we have the authentic exposition of the meaning of the clause in question, and of its intended mode of operation: for they all agreed in that view of the subject, though differing about the adoption of a system which would then have borne most heavily upon Great Britain. The plan was defeated at that time, and only by a very small majority (52 to 47), – the defeat effected by the mercantile influence, which favored the British trade, and was averse to any discrimination to her disadvantage, though only intended to coerce her into a commercial treaty – of which we then had none with her. Afterwards the system of treaties was followed up, and protection to our own industry extended incidentally through the clause in the constitution authorizing Congress to "Lay and collect taxes, duties, imports and excises," &c. So that the power granted in the clause, "To regulate commerce with foreign nations," has never yet been exercised by Congress: – a neglect or omission, the more remarkable as, besides the plain and obvious fairness and benefit of the regulation intended, the power conferred by that clause was the potential moving cause of forming the present constitution, and creating the present Union.

The principle of the regulation was to be that of reciprocity – that is, that trade was not to be free on one side, and fettered on the other – that goods were not to be taken from a foreign country, free of duty, or at a low rate, unless that country should take something from us, also free, or at a low rate. And the mode of acting was by discriminating in the imposition of duties between those which had, and had not, commercial treaties with us – the object to be accomplished by an act of Congress to that effect; which foreign nations might meet either by legislation in their imposition of duties; or, and which is preferable, by treaties of specified and limited duration. My early study of the theory, and the working of our government – so often different, and sometimes opposite – led me to understand the regulation clause in the constitution, and to admire and approve it: and as in the beginning of General Jackson's administration, I foresaw the speedy extinction of the public debt, and the consequent release of great part of our foreign imports from duty, I wished to be ready to derive all the benefit from the event which would result from the double process of receiving many articles free which were then taxed, and of sending abroad many articles free which were now met by heavy taxation. With this view, I brought a bill into the Senate in the session 1829-'30, to revive the policy of Mr. Madison's resolutions of 1793 – without effect then, but without despair of eventual success. And still wishing to see that policy revived, and seeing near at hand a favorable opportunity for it in the approaching extinction of our present public debt – (and I wish I could add, a return to economy in the administration of the government) – and consequent large room for the reduction and abolition of duties, I here produce some passages from the speech I delivered on my bill of 1830, preceded by some passages from Mr. Madison's speech of 1793, in support of his resolutions, and showing his view of their policy and operation – not of their constitutionality, for of that there was no question: and his complaint was that the identical clause in the constitution which caused the constitution to be framed, had then remained four years without execution. He said:

"Mr. Madison, after some general observations on the report, entered into a more particular consideration of the subject. He remarked that the commerce of the United States is not, at this day, on that respectable footing to which, from its nature and importance, it is entitled. He recurred to its situation previous to the adoption of the constitution, when conflicting systems prevailed in the different States. The then existing state of things gave rise to that convention of delegates from the different parts of the Union, who met to deliberate on some general principles for the regulation of commerce, which might be conducive, in their operation, to the general welfare, and that such measures should be adopted as would conciliate the friendship and good faith of those countries who were disposed to enter into the nearest commercial connections with us. But what has been the result of the system which has been pursued ever since? What is the present situation of our commerce? From the situation in which we find ourselves after four years' experiment, he observed, that it appeared incumbent on the United States to see whether they could not now take measures promotive of those objects, for which the government was in a great degree instituted. Measures of moderation, firmness and decision, he was persuaded, were now necessary to be adopted, in order to narrow the sphere of our commerce with those nations who see proper not to meet us on terms of reciprocity.

"Mr. M. took a general view of the probable effects which the adoption of something like the resolutions he had proposed, would produce. They would produce, respecting many articles imported, a competition which would enable countries who did not now supply us with those articles, to do it, and would increase the encouragement on such as we can produce within ourselves. We should also obtain an equitable share in carrying our own produce; we should enter into the field of competition on equal terms, and enjoy the actual benefit of advantages which nature and the spirit of our people entitle us to.

"He adverted to the advantageous situation this country is entitled to stand in, considering the nature of our exports and returns. Our exports are bulky, and therefore must employ much shipping, which might be nearly all our own: our exports are chiefly necessaries of life, or raw materials, the food for the manufacturers of other nations. On the contrary, the chief of what we receive from other countries, we can either do without, or produce substitutes.

"It is in the power of the United States, he conceived, by exerting her natural rights, without violating the rights, or even the equitable pretensions of other nations – by doing no more than most nations do for the protection of their interests, and much less than some, to make her interests respected; for, what we receive from other nations are but luxuries to us, which, if we choose to throw aside, we could deprive part of the manufacturers of those luxuries, of even bread, if we are forced to the contest of self-denial. This being the case, our country may make her enemies feel the extent of her power. We stand, with respect to the nation exporting those luxuries, in the relation of an opulent individual to the laborer, in producing the superfluities for his accommodation; the former can do without those luxuries, the consumption of which gives bread to the latter.

"He did not propose, or wish that the United States should, at present, go so far in the line which his resolutions point to, as they might go. The extent to which the principles involved in those resolutions should be carried, will depend upon filling up the blanks. To go the very extent of the principle immediately, might be inconvenient. He wished, only, that the Legislature should mark out the ground on which we think we can stand; perhaps it may produce the effect wished for, without unnecessary irritation; we need not at first, go every length.

"Another consideration would induce him, he said, to be moderate in filling up the blanks – not to wound public credit. He did not wish to risk any sensible diminution of the public revenue. He believed that if the blanks were filled with judgment, the diminution of the revenue, from a diminution in the quantity of imports, would be counterbalanced by the increase in the duties.

"The last resolution he had proposed, he said, is, in a manner, distinct from the rest. The nation is bound by the most sacred obligation, he conceived, to protect the rights of its citizens against a violation of them from any quarter; or, if they cannot protect, they are bound to repay the damage.

"It is a fact authenticated to this House by communications from the Executive, that there are regulations established by some European nations, contrary to the law of nations, by which our property is seized and disposed of in such a way that damages have accrued. We are bound either to obtain reparation for the injustice, or compensate the damage. It is only in the first instance, no doubt, that the burden is to be thrown upon the United States. The proper department of government will, no doubt, take proper steps to obtain redress. The justice of foreign nations will certainly not permit them to deny reparation when the breach of the law of nations evidently appears; at any rate, it is just that the individual should not suffer. He believed the amount of the damages that would come within the meaning of this resolution, would not be very considerable."

Reproducing these views of Mr. Madison, and with a desire to fortify myself with his authority, the better to produce a future practical effect, I now give the extract from my own speech of 1830:

"Mr. Benton said he rose to ask the leave for which he gave notice on Friday last; and in doing so, he meant to avail himself of the parliamentary rule, seldom followed here, but familiar in the place from whence we drew our rules – the British Parliament – and strictly right and proper, when any thing new or unusual is to be proposed, to state the clauses, and make an exposition of the principles of his bill, before he submitted the formal motion for leave to bring it in.

"The tenor of it is, not to abolish, but to provide for the abolition of duties. This phraseology announces, that something in addition to the statute – some power in addition to that of the legislature, is to be concerned in accomplishing the abolition. Then the duties for abolition are described as unnecessary ones; and under this idea is included the twofold conception, that they are useless, either for the protection of domestic industry, or for supplying the treasury with revenue. The relief of the people from sixteen millions of taxes is based upon the idea of an abolition of twelve millions of duties; the additional four millions being the merchant's profit upon the duty he advances; which profit the people pay as a part of the tax, though the government never receives it. It is the merchant's compensation for advancing the duty, and is the same as his profit upon the goods. The improved condition of the four great branches of national industry is presented as the third object of the bill; and their relative importance, in my estimation, classes itself according to the order of my arrangement. Agriculture, as furnishing the means of subsistence to man, and as the foundation of every thing else, is put foremost; manufactures, as preparing and fitting things for our use, stands second, commerce, as exchanging the superfluities of different countries, comes next; and navigation, as furnishing the chief means of carrying on commerce, closes the list of the four great branches of national industry. Though classed according to their respective importance, neither branch is disparaged. They are all great interests – all connected – all dependent upon each other – friends in their nature – for a long time friends in fact, under the operations of our government: and only made enemies to each other, as they now are by a course of legislation, which the approaching extinguishment of the public debt presents a fit opportunity for reforming and ameliorating. The title of my bill declares the intention of the bill to improve the condition of each of them. The abolition of sixteen millions of taxes would itself operate a great improvement in the condition of each; but the intention of the bill is not limited to that incidental and consequential improvement, great as it may be; it proposes a positive, direct, visible, tangible, and countable benefit to each; and this I shall prove and demonstrate, not in this brief illustration of the title of my bill, but at the proper places, in the course of the examination into its provisions and exposition of its principles.

"I will now proceed with the bill, reading each section in its order, and making the remarks upon it which are necessary to explain its object and to illustrate its operation."

The First Section

"That, for the term of ten years, from and after the first day of January, in the year 1832, or, as soon thereafter as may be agreed upon between the United States and any foreign power, the duties now payable on the importation of the following articles, or such of them as may be agreed upon, shall cease and determine, or be reduced, in favor of such countries as shall, by treaty, grant equivalent advantages to the agriculture, manufactures, commerce, and navigation, of the United States.

"This section contains the principle of abolishing duties by the joint act of the legislative and executive departments. The idea of equivalents, which the section also presents, is not new, but has for its sanction high and venerated authority, of which I shall not fail to avail myself. That we ought to have equivalents for abolishing ten or twelve millions of duties on foreign merchandise is most clear. Such an abolition will be an advantage to foreign powers, for which they ought to compensate us, by reducing duties to an equal amount upon our productions. This is what no law, or separate act of our own, can command. Amicable arrangements alone, with foreign powers, can effect it; and to free such arrangements from serious, perhaps insuperable difficulties, it would be necessary first to lay a foundation for them in an act of Congress. This is what my bill proposes to do. It proposes that Congress shall select the articles for abolition of duty, and then leave it to the Executive to extend the provisions of the act to such powers as will grant us equivalent advantages. The articles enumerated for abolition of duty are of kinds not made in the United States, so that my bill presents no ground of alarm or uneasiness to any branch of domestic industry.

"The acquisition of equivalents is a striking feature in the plan which I propose, and for that I have the authority of him whose opinions will never be invoked in vain, while republican principles have root in our soil. I speak of Mr. Jefferson, and of his report on the commerce and navigation of the United States, in the year '93, an extract from which I will read."

The Extract

"Such being the restrictions on the commerce and navigation of the United States, the question is, in what way they may best be removed, modified, or counteracted?

"As to commerce, two methods occur: 1. By friendly arrangements with the several nations with whom these restrictions exist: or, 2. By the separate act of our own legislatures, for countervailing their effects.

"There can be no doubt, but that, of these two, friendly arrangements is the most eligible. Instead of embarrassing commerce under piles of regulating laws, duties, and prohibitions, could it be relieved from all its shackles, in all parts of the world – could every country be employed in producing that which nature has best fitted it to produce, and each be free to exchange with others mutual surplusses, for mutual wants, the greatest mass possible would then be produced, of those things which contribute to human life and human happiness, the numbers of mankind would be increased, and their condition bettered.

"Would even a single nation begin with the United States this system of free commerce, it would be advisable to begin it with that nation; since it is one by one only that it can be extended to all. Where the circumstances of either party render it expedient to levy a revenue, by way of impost on commerce, its freedom might be modified in that particular, by mutual and equivalent measures, preserving it entire in all others.

"Some nations, not yet ripe for free commerce, in all its extent, might be willing to mollify its restrictions and regulations, for us, in proportion to the advantages which an intercourse with us might offer. Particularly they may concur with us in reciprocating the duties to be levied on each side, or in compensating any excess of duty, by equivalent advantages of another nature. Our commerce is certainly of a character to entitle it to favor in most countries. The commodities we offer are either necessaries of life, or materials for manufacture, or convenient subjects of revenue; and we take in exchange either manufactures, when they have received the last finish of art and industry, or mere luxuries. Such customers may reasonably expect welcome and friendly treatment at every market – customers, too, whose demands, increasing with their wealth and population, must very shortly give full employment to the whole industry of any nation whatever, in any line of supply they may get into the habit of calling for from it.

"But, should any nation, contrary to our wishes, suppose it may better find its advantage by continuing its system of prohibitions, duties, and regulations, it behooves us to protect our citizens, their commerce and navigation, by counter prohibitions, duties, and regulations, also. Free commerce and navigation are not to be given in exchange for restrictions and vexations; nor are they likely to produce a relaxation of them."

"The plan which I now propose adopts the idea of equivalents and retaliation to the whole extent recommended by Mr. Jefferson. It differs from his plan in two features: first, in the mode of proceeding, by founding the treaties abroad upon a legislative act at home; secondly, in combining protection with revenue, in selecting articles of exception to the system of free trade. This degree of protection he admitted himself, at a later period of his life. It corresponds with the recommendation of President Washington to Congress, in the year '90, and with that of our present Chief Magistrate, to ourselves, at the commencement of the present session of Congress.

"I will not now stop to dilate upon the benefit which will result to every family from an abolition of duties which will enable them to get all the articles enumerated in my bill for about one third, or one half less, than is now paid for them. Let any one read over the list of articles, and then look to the sum total which he now pays out annually for them, and from that sum deduct near fifty per cent., which is about the average of the duties and merchant's profit included, with which they now come charged to him. This deduction will be his saving under one branch of my plan – the abolition clause. To this must be added the gain under the clause to secure equivalents in foreign markets, and the two being added together, the saving in purchases at home being added to the gain in sales abroad, will give the true measure of the advantages which my plan presents.

"Let us now see whether the agriculture and manufactures of the United States do not require better markets abroad than they possess at this time. What is the state of these markets? Let facts reply. England imposes a duty of three shillings sterling a pound upon our tobacco, which is ten times its value. She imposes duties equivalent to prohibition on our grain and provisions; and either totally excludes, or enormously taxes, every article, except cotton, that we send to her ports. In France, our tobacco is subject to a royal monopoly, which makes the king the sole purchaser, and subjects the seller to the necessity of taking the price which his agents will give. In Germany, our tobacco, and other articles, are heavily dutied, and liable to a transit duty, in addition, when they have to ascend the Rhine, or other rivers, to penetrate the interior. In the West Indies, which is our great provision market, our beef, pork, and flour, usually pay from eight to ten dollars a barrel: our bacon, from ten to twenty-five cents a pound; live hogs, eight dollars each; corn, cornmeal, lumber, whiskey, fruit, vegetables, and every thing else, in proportion; the duties in the different islands, on an average, equalling or exceeding the value of the articles in the United States. We export about forty-five millions of domestic productions, exclusive of manufactures, annually; and it may be safely assumed that we have to pay near that sum in the shape of duties, for the privilege of selling these exports in foreign markets. So much for agriculture. Our manufactures are in the same condition. In many branches they have met the home demand, and are going abroad in search of foreign markets. They meet with vexatious restrictions, peremptory exclusions, or oppressive duties, wherever they go. The quantity already exported entitles them to national consideration, in the list of exports. Their aggregate value for 1828 was about five millions of dollars, comprising domestic cottons, to the amount of a million of dollars; soap and candles, to the value of nine hundred thousand dollars; boots, shoes, and saddlery, five hundred thousand dollars; hats, three hundred thousand dollars; cabinet, coach, and other wooden work, six hundred thousand dollars; glass and iron, three hundred thousand dollars; and numerous smaller items. This large amount of manufactures pays their value, in some instances more, for the privilege of being sold abroad; and, what is worse, they are totally excluded from several countries from which we buy largely. Such restrictions and impositions are highly injurious to our manufactures; and it is incontestably true, the amount of exports prove it, that what most of them now need is not more protection at home, but a better market abroad; and it is one of the objects of this bill to obtain such a market for them.

"It appears to me [said Mr. B.] to be a fair and practicable plan, combining the advantages of legislation and negotiation, and avoiding the objections to each. It consults the sense of the people, in leaving it to their Representatives to say on what articles duties shall be abolished for their relief; on what they shall be retained for protection and revenue; it then secures the advantage of obtaining equivalents, by referring it to the Executive to extend the benefit of the abolition to such nations as shall reciprocate the favor. To such as will not reciprocate, it leaves every thing as it now stands. The success of this plan can hardly be doubted. It addresses itself to the two most powerful passions of the human heart – interest and fear; it applies itself to the strongest principles of human action – profit and loss. For, there is no nation with whom we trade but will be benefited by the increased trade of her staple productions, which will result from a free trade in such productions; none that would not be crippled by the loss of such a trade, which loss would be the immediate effect of rejecting our system. Our position enables us to command the commercial system of the globe; to mould it to our own plan, for the benefit of the world and ourselves. The approaching extinction of the public debt puts it into our power to abolish twelve millions of duties, and to set free more than one-half of our entire commerce. We should not forego, nor lose the advantages of such a position. It occurs but seldom in the life of a nation, and once missed, is irretrievably gone, to the generation, at least, that saw and neglected the golden opportunity. We have complained, and justly, of the burthens upon our exports in foreign countries; a part of our tariff system rests upon the principle of retaliation for the injury thus done us. Retaliation, heretofore, has been our only resource: but reciprocity of injuries is not the way to enrich nations any more than individuals. It is an 'unprofitable contest,' under every aspect. But the present conjuncture, payment of the public debt, in itself a rare and almost unprecedented occurrence in the history of nations, enables us to enlarge our system; to present a choice of alternatives: one fraught with relief, the other presenting a burthen to foreign nations. The participation, or exclusion, from forty millions of free trade, annually increasing, would not admit of a second thought, in the head of any nation with which we trade. To say nothing of her gains in the participation in such a commerce, what would be her loss in the exclusion from it? How would England, France, or Germany, bear the loss of their linen, silk, or wine trade, with the United States? How could Cuba, St. Domingo, or Brazil, bear the loss of their coffee trade with us? They could not bear it at all. Deep and essential injury, ruin of industry seditions, and bloodshed, and the overthrow of administrations, would be the consequence of such loss. Yet such loss would be inevitable (and not to the few nations, or in the articles only which I have mentioned, for I have put a few instances only by way of example), but to every nation with whom we trade, that would not fall into our system, and throughout the whole list of essential articles to which our abolition extends. Our present heavy duties would continue in force against such nations; they would be abolished in favor of their rivals. We would say to them, in the language of Mr. Jefferson, free trade and navigation is not to be given in exchange for restrictions and vexations! But I feel entire confidence that it would not be necessary to use the language of menace or coercion. Amicable representations, addressed to their sense of self-interest, would be more agreeable, and not less effectual. The plan cannot fail! It is scarcely within the limits of possibility that it should fail! And if it did, what then? We have lost nothing. We remain as we were. Our present duties are still in force, and Congress can act upon them one or two years hence, in any way they please.