The simple consideration that condemns this second expedient of the Mercantile System, namely, the prohibiting the importation of such commodities as can be produced at home, and the Protective policy inseparably connected with it, is, that it involves a dead loss to the productive powers of the world. There is in the world a certain amount of capital and a certain amount of industry. These, if left to their own keen sense of interest, will make the aggregate amount of production in the world as great as that amount of capital and industry can make it. If, then, a free commerce distribute this aggregate production over the earth in accordance with the simple law of supply and demand, we shall have not only the greatest production, but the most perfect distribution.

But if now government steps in, and withdraws capital and industry from their freely chosen posts of activity, prohibits exchanges that would otherwise be made, and commands commodities to be manufactured or grown in localities where they would not naturally be manufactured or grown, then certainly the aggregate production of the world is lessened, and its distribution is less pèrfect.

(3.) The Mercantile System had two other expedients which were frequently employed to subserve the ends of its grand principle. For the sake of increasing the exports, and thus improving the balance of trade, bounties were given to encourage the export and sale of native fabrics in foreign markets. A bounty, we understand, is a sum of money paid outright by the government to the exporters of native fabrics, in order to enable them

to sell their goods as cheap or cheaper than their rivals in the foreign market. England, for example, was so anxious to sell her goods to foreigners, that she regularly paid her merchants for selling the goods at a loss. "The price of these goods in that market," says the merchant, "will not reward my capital with the ordinary profit." "Never mind," says England, "sell away, and I will make up your loss by a bounty!" Was not that a rare and brilliant way of enriching the country? By natural laws, a branch of industry ceases as soon as it becomes unprofitable; but by the system of bounties a trade was perpetuated of which the expense was greater than the returns, of which every operation destroyed a portion of the capital employed in it. The loss was made up to the operators by government; in other words, the people were taxed to pay it."

(4.) The fourth and last expedient of the Mercantile System was to help the balance of trade by founding colonies, that the mother country might enjoy the monopoly of their trade, and force them to resort exclusively to her markets. All the English colonies on this continent were bound by the rigid fetters of this colonial system. Up to the date of American Independence, Virginia and Massachusetts must buy all they wished to buy in English markets, and carry all they had to sell to English ports. Spain and France extended the same colonial monopoly, with even more of inflexibility, over their American and West India settlements; and it was considerations growing out of this colonial policy which gave birth to the American Revolution; and that war was waged not more for the interests of humanity than for the freedom of trade.

CHAPTER XV.

ON AMERICAN TARIFFS.

So long as the United States were colonies of Great Britain, their commerce was bound in the rigid fetters of the Mercantile System. We have already seen in the last chapter that colonies were one of the devices of the Mercantile System to secure a favorable" balance of trade." If the maxim be to sell as much as possible and buy as little as possible, then colonies, which could be compelled to receive the goods of the mother country, must be commercially valuable. Accordingly, all the commercial countries of Europe, and particularly Spain and England, adopted a colonial policy that sprung directly from this fundamental maxim. They valued their colonies as affording broad markets for the sale of products, and also because they could monopolize the articles produced by the colonists themselves. In general, the colonists were compelled to sell all they had to sell to the mother country, and to buy all they had to buy of the mother country; even though the articles thus bought were not the produce of the mother country, but must first be imported there and then exported thence to the colonies. Until the Revolution, a Boston ship, for example, could not sail directly to China for teas, but the teas must first be

brought to England in British ships, must pay a duty there, and then be reëxported to the colonies.

As early as 1650 this monopoly system was entered upon by the then republican Parliament of England. The colonies had already overcome the difficulties incident to their first settlement, had begun to increase rapidly in wealth, and their cómmerce had become so considerable as to afford a temptation to restrict its freedom and to endeavor to make it peculiarly advantageous to the mother country. In the year named an act was passed restricting the export and import trade of the colonies to British ships and to ships built in the colonies. No foreign keel could enter a colonial harbor, either to buy or to sell.

Ten years later, that is in 1660, the famous "Navigation Act" was passed, which with small modifications continued to be the maritime law of England down to 1815; which was essentially modified in 1825; and the small remains of which have only recently been expunged from the statute-book.

This Navigation Act is of great interest to Americans, because the American Revolution grew directly out of it. Says Bancroft, "American Independence, like the great rivers of the country, had many sources; but the head spring which colored all the stream was the Navigation Act." It was enacted that certain enumerated articles, which included all the principal productions of the colonies, could not be exported directly to any foreign country, but must first be sent to Great Britain, and there unladen, before they could be forwarded to their final destination. It amounted to the same thing as prohibiting all exports

except to the mother country. The chief products of their industry the colonists could not export- to any place but Great Britain, not even to Ireland; neither sugar, nor tobacco, nor cotton, nor wool, nor indigo, nor ginger, nor dye-woods, nor molasses, nor rice, nor peltry, nor ore, nor pitch, nor tar, nor turpentine, nor masts, nor yards, nor bowsprits, nor coffee, nor cocoa-nuts, nor whale-fins, nor hides, nor ashes.

Nor was this all. England constituted herself not only the sole market for American products, but also the sole storehouse for American supplies. The colonies must not only sell exclusively in British markets, but they must also buy exclusively in British markets. It was enacted, that "no commodity of the growth, production, or manufacture of Europe, shall be imported into the British plantations, but such as are laden and put on board in England, Wales, or Berwick-upon-Tweed, and in Englishbuilt shipping, whereof the master and three fourths of the crew are English."

The preamble to this statute, which was supplemental to the Navigation Act, is curious, and assigns as the motive of the restriction, "the maintaining a greater correspondence and kindness between the subjects at home and those in the plantations; keeping the colonies in a firmer dependence on the mother country; making them yet more beneficial to it in the further employment and increase of English shipping and in the vent of English manufactures and commodities; rendering the navigation to them more safe and cheap; and making this kingdom. a staple, not only of the commodities of the plantations, but also of the commodities of other countries