Smith, Stephen; Wilkinson, J. Grains for the Grangers, Discussing All Points Bearing Upon the Farmers' Movement for the Emancipation of White Slaves from the Slave-Power of Monopoly . Philadelphia: John E. Potter and Company, 1873. [format: book], [genre: essay; history; letter; narrative; poetry]. Permission: Northern Illinois University
Persistent link to this document: http://lincoln.lib.niu.edu/file.php?file=smith.html

It is undeniably true that all the wealth of the world is the product of industry, and that what is called "capital" is the mere accumulation through economy of a portion of that which has been produced by labor. The possessors of this accumulation have, in all ages, derived a profit by loaning it to producers, and the general tendency of legislation, as governments advanced, was to increase the proportion of the produced wealth which fell to capitalists, and to diminish, of course, the share which those who produced it might retain to their own use. When military conquerors, like the Norman bastard, divided among their followers and adherents the territory overrun by their arms, the occupants of the lands became the serfs of the landlords, and the whole wealth of the country, less the maintenance of the workers, belonged to its lords. As the feudal system fell into decay, and the corporations of towns freed the manufacturers and trades-people from servitude to barons, the number of independent cultivators increased, until gradually the whole

people became personally free. A new system then developed itself. The personal service of tenants was no longer demanded by the lord, nor that of the latter required by the king as lord paramount ; but monopolies succeeded to fiefs, and special trading and manufacturing privileges, rather than land tenures, became the means by which the government rallied to its support the magnates of the land. Instead of giving a military follower a tract of land, with the right to the produce raised upon it by its occupiers, it gave to its parliamentary supporters the exclusive right of selling to those people the supplies they must purchase with their labor. As the monopolists charged more than the free-traders, the producers were thus compelled to give up indirectly a portion of their labor for the support of a crown favorite. The only difference here was that the military chief took directly from the producer a portion of that which he produced, while the crown favorite attained the same end in the shape of a price for articles sold to the cultivators become free. This system was gradually refined upon, and as it became distasteful to those people who, having obtained their personal independence, wished for commercial freedom, it was called "protection to industry." But, like all advantages granted by government to a class, it was at the expense of another class.

Thus, in 1534, the city of Worcester, and the towns of Eversham, Droitwich, Kidderminster, and Bromsgrove, petitioned parliament to the effect, that the inhabitants of said cities were mostly employed in the

manufacture of woolen cloths, and that within a few years, "divers persons dwelling in hamlets, thorps and villages, make all manner of cloth, and exercise weaving, fulling and shearing, within their houses, to the great depopulation of said towns." For these cogent reasons, the wise parliament enacted, 25 Henry VIII, that "no person within Worcestershire shall make any cloth, but the proper inhabitants of said towns and citv, excepting the persons who make cloths solely for their own and family's wearing."

The town of Brentford obtained a similar grant relative to rope-making, with the addition of compelling all hemp-growers in the country to sell said material only in that town. It was in this manner that the growing corporations obtained from a partial prince advantages at the expense of the growers of the raw material. As these latter became more powerful, so as to make their voices heard in the national councils, such barefaced infringements of their rights could not be continued, and to prolong the same system, further disguise was necessary. The funding system, towards the close of the 17th century, developed its powers to the same general end; and for more than 150 years, fundholders, landlords, manufacturers, and government officials have conspired under the plea of "protection to home industry," to appropriate more effectually than could have been done by feudal tenures, all the proceeds of national labor. Down to the year 1842, this protective system remained in full force, producing, as the inevitable result, a nobility and gentry of enormous wealth, dazzling the world, like the phosphoric light emitted by

corrupt substances, with the gorgeousness of their display from amidst millions of paupers, entirely destitute of any portion of that immense wealth which their industry had created. The system of indirect taxes, or taxes upon articles consumed by the industrious, to the exemption of the property amassed by the few, was the instrument by which all the wealth of the country had become accumulated in a few hands. Capital had, however, obtained the largest share of the general wealth, and so little was left to those who had produced it, that the government revenues began to fail. The operation of the corn laws was eminently calculated for this end.

It is easily understood that the annual product of a nation's industry is that which constitutes its means of expenditure; that is to say, the support of the wealthy, of the professional classes, of the "paupers" and of the government. Under the system of indirect taxes, capitalists draw a larger share of the annual products than when there are no restrictions; and the larger the share these obtain, the greater is the sum required for impoverished laborers, called "paupers," the smaller is the surplus left to producers for the purchase of supplies; and consequently the more difficult is it for the government to procure sufficient revenue. Thus, suppose the annual revenue is one hundred — of which producers consume fifty, capital twenty, professions ten, "paupers" ten, and the government ten. If, now, by protective laws, the share of capital is increased to thirty, then labor will get but thirty-seven and one-half, because "paupers" will increase by that diminution to fifteen, and the

share of the professions will fall to seven and one-half, while, the revenues of the government falling upon thirty-seven and one-half instead of fifty, the share of labor will be raised with great difficulty. They will be so diminished, ultimately, that government must turn upon capital as its only resource, and this is precisely what was done in Great Britain in 1842. The capital of the nation was not sufficiently distributed to keep its industry employed, and enlightened statesmen saw that reaction had become inevitable; that industry must henceforth be relieved of taxation, while the expenses of government must be drawn from accumulated wealth, by direct impost.

It is the interchange of surpluses that constitutes foreign trade, and it is evident on a very little reflection, that it is to the last degree necessary to the national industry that a disposition should be made of this surplus. In the United States, land is the chief capital. In the densely populated countries of the old world, labor is the chief capital of the people. It follows very clearly, that the products of land will constitute the surplus which the United States have to sell, and the products of labor that which the countries of Europe can best spare. If the occupiers and cultivators of American land are prohibited from taking in payment for their surplus the products of the cheap labor of Europe, one of two things must happen: they must take far less of the product of factory labor for the produce of their land labor, or domestic factory labor must compete with foreign in supplying goods to land labor. The theory of the protectionists is, that after a short period of protection,

home labor will furnish products as cheaply as foreign labor; that is, the reward of American labor will be so diminished that it will not exceed that of the European laborer, and therefore the land cultivators can trade with them to as good advantage as with the "pauper laborers" of Europe. This will no doubt be the case, because, as the world has seen in the example of England, the tendency of the protective system is to impoverish labor and enrich capital; but, in the meantime, the market of the cultivator has been destroyed. A law which shall prohibit the taking in payment the surplus production of those who would buy our surplus produce operates as a prohibition upon the sale of the latter. The direct effect of retaining the surplus in the country is to sink the exchangeable value of the whole production, a circumstance which confines the sales to the farms most contiguous to market, and utterly deprives the distant cultivator of his market, and as effectually deprives him of the means of living as if he were deprived of his land. This is the same object sought now by manufacturers as that obtained directly through the enactments of Henry VIII., before quoted, viz: to compel producers to sell only to certain manufacturers, who give what they please.

The demand for commodities, in any country, is equivalent to supply; no man produces any article but because he wants that article, or something which he can procure for it. The articles which he produces, beyond what he consumes, constitute a stock which he may give in exchange for other commodities. If he desires one thing and produces another, it is only

because the thing which he desires can be obtained by means of the thing which he produces, and better so obtained than if he had endeavored to produce it himself. Every man wishes for the comforts and necessaries of life, house, food, clothing, etc., all, indeed, of the multifarious productions of industry, familiar to civilized life. This wish for commodities, accompanied by equivalents to give for them, constitutes demand. If a man is possessed of equivalents, but has no wish for other commodities, there is no demand; if he has the wish, but no equivalents, the demand fails. The wish for commodities prompts the desire to produce equivalents. For this purpose, capital of some sort is indispensable. In this country, the place of refuge for the poor of all nations, comparatively speaking, no capital but land exists. The labor of the individual, applied to this land, soon places him in possession of equivalents, and the demand is complete. But necessarily, "supply," which is demand for his equivalent, must come from others than land cultivators. His commodities are the same as their own. The supply, then, must come from capital and labor, and in order that the struggling cultivator may profit most by his means, he should exchange with that capital and labor which is most abundant, or which will give most of the commodities he seeks, in exchange for what he has produced. They demand his produce and he demands their goods, and each supplies the other, demand and supply being exchangeable terms. The cheaper the labor with which he exchanges, the more rapidly will he profit by the trade, and his wants will increase

with his success. To interpose laws among a community of cultivators, which shall compel one portion to give such enormous prices for the commodities they desire as to induce some of their number to abandon cultivation and undertake to manufacture the desired articles, is to render the abandoned land valueless, and to deprive the cultivators of the balance of a portion of that which they might have obtained for their labor. Land here is very abundant and very cheap; the mode of making it available is to exchange its products with those countries where land is dear and labor cheap. The effect of such exchange is to enrich the land occupiers, and to accumulate capital in the country, which must and will find employment. The wish for other things, to which this capital will give effect, constitutes the demand on which manufacturing prosperity will be built up surely and permanently. The large majority of the people of the United States are cultivators, and it is from their demand for goods, that manufacturers are to look for a market for their wares. As we have seen, the demand for wares is a combination of wish and equivalents. These latter are food and raw materials, and where a large majority of the people are producers of them, considerable quantities, above the wants of all the people in the country, will exist and, as far as that surplus goes, the demand for goods will cease, unless it can be disposed of out of the country. To prevent such a disposition of it, by prohibiting a return of equivalents, is not only to destroy the foreign trade, but to crush the demand for manufactures, because the land had better have

remained untouched, than to have yielded a stock of produce, perishable in its nature, and useless because in excess of the wants of the inhabitants. It is but a few years since, that in parts of the western country stock were turned into fields of standing grain, because the latter would not pay the trouble of harvesting, while skilled laborers in England and France were starving to death. These countries forbade the interchange of industrial products for food, in order to "protect home industry."

It is not the mere tax, which is derived from duties upon the goods consumed, that constitutes the greatest burden, but the obstruction to trade, the lessening of the sale of the surplus agricultural products of the country, which is the great grievance. The interposition of a parchment wall between buyer and seller, when enterprise has just opened means of communication, is a singular anomaly. England having continually legislated for capital, until labor was exhausted, has been compelled to retrace her steps, and remove barriers to trade. In the United States, it is coming to be understood that the multiplication of means of transport, at the expense of capital, is an indirect benefit to capital, through the enhanced industry growing out of the extended sale of produce thus promoted, and the removal of legal restraints upon external intercourse is equivalent to new means of transportation. If capital taxes itself for the creation of new means of transportation, the same policy should prompt it to assume taxes for government support, and relieve labor and trade from duties altogether.

The substitution of direct taxes for the pernicious duties upon exchangeable products, is one of the most efficient modes of promoting labor reform, and of preserving a just distribution of the actual wealth of the country among those who produce it. The whole wealth of the country being the product of labor, it is to the interest of all parties that labor should be encouraged by removing every obstacle to the realization of the object of its wishes. The more continuous and efficient are its operations, the greater will be the aggregate wealth, and this created wealth is that which should bear the public burdens. When, therefore, the government proceeds upon the plan of encouraging the employment of created wealth, by taxing its creators for its benefit, it paralizes the arm of labor, diminishes its reward, and breaks down the springs of industry. It is not wealth that requires encouragement, but the production of it, as well as the enjoyment of it, by those who produce it. The great majority of the people of this country being occupiers of land, their interests require an adequate market for what that land produces. The more extensive the market, the greater becomes their profits, and the more rapid the accumulation of surplus moneyed capital, applicable to manufacturing employments. The capital so earned, by being applied locally to the construction of means of transportation, and ultimately to manufacturing purposes, under free competition, not only promotes the general prosperity, but insures a continued distribution of wealth.

England was an exporter of food, down to the

close of the last century, and it was by this means that she obtained capital to prosecute manufactures. New England earned her capital in free-trade commerce with the world, and then applied it to manufacturing. The great West and South now require a more extensive market for food, and this is to be found only in throwing down the barriers between European demand and American supply; in removing altogether the taxes upon imported goods, and levying upon the property of the country taxes for the support of its government. The millions derived, this year, by the federal government from customs, have been, to that extent, a burden upon the sale of farm produce. Had it been assessed upon the several states as a direct tax upon property, the sales of raw produce would have been promoted to an extent that, probably, would have added three times the amount to the reward of labor. The great reform which labor demands is release from taxes and from restrictions upon its market.

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