fail to be useful to the other." And, to sustain his project in all its parts, he lays out the broad and sure doctrines, that "every benefit which is obtained by individuals through protection, is acquired at the loss of the public at large"—that "every thing in the nature of what is called legislative regulation of industry, is an evil"—and that "all that has been done in attempting to establish trades and manufactures at home, by imposing duties on the foreign, is highly pernicious, and had its origin in a theory on national prosperity which is entirely erroneous."
The arguments he uses against the protective system are brief, but masterly, and he challenges those who still maintain the policy of keeping the affairs of trade under the guardianship of legislation," to refute them, if they can, by reasons founded on fact and experience. After stating that "the whole object of protecting duties is to establish higher prices at home than the prices abroad," (and this must be their intent, or they are senseless) he goes on to demonstrate that, however burdensome this may be to the consumers, it shortly is of no avail to the manufacturers themselves, for their profits are brought and kept down by domestic rivalship; and that "no trade, or manufacture, has ever become really flourishing, until the prices have settled to the natural level, and the whole effect of factitious aid has been done away, (quond the manufacturers) by home competition."
The competition between capitalists at home being free, the incentives held out by protecting duties in the prospect of high prices, and corresponding profits, bring about rapid and greedy investments in manufacturing, and the market being restricted to home consumption, (for if exports can be made, imports of the same articles never will occur) the supply will tend always to exceed the demand, and prices, in consequence, must go down. They cannot, however, in all cases, as Sir Henry supposes, become as low as if foreign goods were admitted free of duty." This must depend upon the relative cost of production. Below that grade they cannot permanently fall. Wherever the want of sufficient skill, capital, and experience, a sparse population, high wages, superabundant lands, migratory habits, and the free spirit of agricultural labor exist as in America, they will always enhance the cost of production beyond the rate in other countries differently situated.
High prices do not necessarily imply high profits. Thus while the protective system compels the consumer to pay high-
