, 1866-01-29
THE THEORY OF FREE TRADE.
PeFTYsa New Volume "a Political
Econ0my,

inexpcdient. Indeed, nothing is more com.
mon in my experience thnn to hear the mo.
nopoly party exclsim: 80, your theory il ali
very f1ne; the argun,en. ia on your side, but
1t Is all moonshine In praetice." Now theory
Is either true or false. 4 theory cannot BE-
true In principle and false In practice. I haye
theory that two and two make four. Il
any man thinks this is false theory, his rem.
edy Is to show where 1t is false. The outcry
against theories Is only the outcry Of knaye4
against what is getting the better Of them. !
have theory TINT II I am compelled to pay
tn1 Of twenty-five dollars on coat, of which
only five dollars goes into the Treasury OF the
United States, I am robbed Of twenty dollars.
Il anybody thinks this theory false, let him
show where 1t Is false, and not tell me that It
: Is all very true in the abstract, but untenable
in practice. have another theory that Il Il
be true that the coat maker cannot get along
without calling In the assistance Of govern,
ment to make me pay him bounty OF twenty
dollars, then that twenty dollars Of which
am robbed Is thrown into the Sea, sunk, lost.
obltt1ated, expunged, and that not only am
lrobbed, but al persons are robbed upon
whom would have expended tho twenty
dollars u had not been robbed. II the
twenty dollars Of bounty was the manufac-
turef's profit. 1t would amount merely to this,
that the money would 20 to Zurich lie wrong
person; but Il, as the ProtcctionIsts contend.
It Was necessary to bring the coat makers
business up to the level OF my business, and
ne level Of the general business Of the couu-
tfy, and really gave him no undue profit, then
II was wasted burned up, extinguished.
Or the five dollars that went to the
government ] make no complaint. But
have theory Tint was robbed of the other
twenty dollars Just as c1ectually and certain
y as though It had been taken from me by .
a fnlse theory let the Protectionists show
where 1t Is false.
new american work on Political Econo-
my hns Just been published, from the peu of
Arthur Latham Perry, Professor Of Political
Economy In Williams College, Aiassachu-
setts. have Transcribed few pages, bear
iDg upon this interesting controversy, which
respectfully ask you to print. They. are as
follows:
The yattous countries Of The earth hase received
rom ths hand Of God diversity Of original gff1s.
opportunity. This diversity e1isls ior good de-
slgn, md can never be substantially reduced By
man. eEen i the1u reEe, as there Is not any good
yelsiE ln these retpettA there ha. been DEVELOPED
n tho history OF the inhabitants OF these coun.
uies, z dive5ity Of tasser. aptitudes, haoits,
Of The forces Of Nature sround them. The dlf.
ferences arc eon,cu hat less inherent md
more flexible than Others, but hey exist. md
always VIII exist; and 1t IL On these diversltiez,
original, traditional and acquired, that information.
al a sommsIcs depends; I never Would havc come
ssantly and completely uere they 10 fade out. Men
t 40 ~ e r. IN aGfsin szsds 9r I'm hey
both parties thcy desst rom it 20 sooa Is III ,e
mutual gain disappears :. and there IL no mutual
gain fn any series OF exchan4es unless each party
nss speo1 osst y that b. which
greater cost Of csl,iase, forsisn tfade "rs pts.
Se s n9 H6,es to 1se sat only
and limitations applicable to domestic eIcnanscs s
q sss 10 aodSsss Ssssn lad. II lbs a
which each Of the respective con1ries has IN ab.o-
On n arnes IN lie p1odSetion CIT o1 bois os Of WEE WEE
one nation shall have an abtolp,e superiority over
the Other This l. N enectua znswer to the elamor
o., o. !o1s H wno object to Importing articles which
that shs1 might be made, II does pot follow list
i.e ihe eS1nsty Importing them sonld get them as
the importing conntr5 has Al efficiency Ii max.
tng those articles equal to that Of The foreign
sSsso ssso;. but eq 1,,34S + 3 se h;ss ss. sapsoH
the production Of other articles which that country
Wants In exchange: u so, the exchange complained
o.may 60 on to Inc manifest prodt Of botn parties.
Let no nation be In hatte then to drop trade, be-
cause 1t thinks IL akc tha article received in
exchange a cheaply A. the oiher nation makes ii.
20 long As II has 20 advantage over the other abso
lutte or relauve, in making the article rendered in
viii drop ofitselL
Nations. no more thsn lndivtdnals, viii getthem-
selves eerred ut Ereatar effort than That at which
they can serve thenselves- u given effort does
9ot realize more through exchange than It would
disest nsn The exchange ceases Of necessity,
We see At this point, what to think Of those peo-
pie Nho deem It ueedful that each nation should
be able to compete" with other nations In every
enough to apply thelr hvort1e doctrine q 'scoa-
that the ele5e,man fhali hare facilities for .'eom-
rmtih, The farmer With the u13nntacture. .6e nnb.
lf4her with the authorf VIII th...e peonie nfyer
isaln That az exchanges: 35uc.ue IS Wi, rs for
potats. ane Eat nation which should Try to make
"a fpcceAe IN production equal at Ill points, would
be F. 1ooish ~ On artisan trying 10 practice al
WEI tsen snppg it, Msnss % s
average efficiency Of effort; whereas, by thorough
Development Of al Its own peculiar Iesourccs, Il
world at coes moi exceeding thst oi ia own pro-
duf1ise and active e1erton. In one word, what
ever ustines indlylduss Ia telectng diverse paths
Of production according to their cnpact.cs ard op.
poftuntty, the same tustdcs the nations IN fnllv
drawing ont their own best capabilities under tbs
y sas: III hs M s IT, s s I'd
othcrNise coat them much-fn cnfoyluR all that the
world offers at the least expenditure OF 1rksome et
ie1. sneb action prompts the common good q III
all. ana Drms each with the power Of nj; while the
opposite action, BY lessennR the diyetBttes Of re-
alse adYanaees 20 far forth sncaP.eita,es IL ior
e1eh1ngeA which are as once profitable End sttma-
iatins. The only may In which all nations can
share IN the benefits oi the thrft and enterprise q
eaeh Other, i hrongh mutual international e1-
4 tew commodities It least for which there u 4
strong demand among formsners, and In tbs pro
1 e., ai,s
from ahzosd, gold included. At the eheapeAt rae I.
i,setL ard eheses part Of the prosperity Of every
nation With which 1t t,ndes.
COST or TRANSPORTATION.
II IL now time to look at the coat Of carriage thus
far allowed 10 ssak out sight for the saka Of great
e. simplicity Of E1ew. This Ia IN important ele.
men. f. ip,eEnstdonal eSshsuess md one which
chanse.. te!siniy, II costs something 10 cary sny
sl esfa , eaa I'D
ihe e1penfe uoufd neser be incurred The fact thai
Ill expenses connected with calyiAce arc Gladly
borne 81 the merch1ntl who cary on tue Trade,
ehows that the gaIns Of the trade IRE 70 great ~ not
only TO pay Ge19hs and insurance, but aso to leave
asound ths stubborn fact what ase il ito I Die np
ca1rulabooe 10 show thas the expenses incurred ln
fEtape, II spilled to production :. home, would
would. Why dou't tbeyi Haven't t,en common
een.ef Int retpterest tole,ably strong motive
power! Il It needtul 10 inyoke the mighty arm o!
hw To- compel men to act tn accordance with Their
foreign trade because It eotta 70 much to carry on
l. I'll s s ed III tsz :1' al s a. y
ance It, wonld the trade go forward. Il The cost
be large as it i, that is good reason 10 des1ra
I. 7 REDUCTION, possible; te labor fol increased
End better rates of Insurance but 10 hsgua fol
So6y feppaf sds b IL
take to cary 1t on, Is not soun1 argument. The
aggregate cost Of transportation TO The foreign
market Il so much added 10 the cost Of production,
snd is a deduction Of 30 much from Mhat would
It is not tue that eaeh party necessarily pays the
whole Of bis own fteght, and, therefore, that the
rsr.y ca4yi9G bulky ar1lc1ss 4 at disadvantage
at dlsadvanta2e. That will depend on The effect
Of the new expense. howeyc. divided. on the de.
@snd IN 'hs !espeetase countries: Suppose H., b,
nd nd France i'S IL whole ' cost ot rdSs; csi,5ins
silks to England; hat as cottons arc many times
coionr would therefore all relatively to 1iks; bul
cottone and silks both have rlseu absolutely that T.
money standard. II is therefore eTe1y way likely
that thereafter the demand for eottons VIII bt
stronger thsn the demand for slkr and II 20, the
French will hare to oEcr better terms, or, whst II
the same thing, be Obliged to pay a part of tEt
Enslish hre3ehts; 70 that there ie nothing In tht
true state Of the case TO- justify the conclusion
jumped at by fomc people that they who car.J
heavy goods arc At a disadvantage compared Will
lho.e Who carry Light goods, That will depend OF
the equation Of international demand. Nothin. II
the nature OF things hirdeEs that each party shsl
IN effect pay the fashts ct the othrr. Of one ever
| pay the ireightB ol both.
these then, are the eeentia principles Of foreign
raAEbtoueht out, u Is hoped. as clearly And con
the tfnueaetons VIII allow; and In she light Of thes
principles II ss sey clear that foreign trade lust a
same ultimate principles In The constitution OF ma
| and in the pfoyidential arrangements OF n1turr
that the proGi Of It II mutual TO both parties, or
would cease Of Itself; that to prohibit & OF rcstsic
! nil tha mr. hns1