No Danger of Poverty from Free Trade.-All these things being true, as to exchange of goods for goods, it will be seen that there is no danger of poverty from free trade. People will not buy unless foreign goods are more desired than their cost; and whatever the purchase or exchange, they get back something for what they give. Not only can there be no loss, but under free trade, as stated before, an advanced people can accumulate wealth most rapidly and certainly.

A System of Industry in a New Country or section, settled by progressive people, would ordinarily be developed in about the same way as was the system of the United States. When so many persons have engaged in the first industries of farming, stock raising, mining, and lumbering, that prices of these products fall, or from lack of inland transportation the point of diminishing returns is approached in their production-long before that time as a rule-men of enterprise with some capital notice opportunities for gain in new occupations for which demand is springing up. As the American coast cities grew, and as the people in the settled regions developed wants and means for a larger supply of goods of finer

pany, and the Standard Oil Company, maintain their own warehouses and selling agents in all countries affording a sufficient market. In the more backward countries, not having reliable importing merchants, foreign sellers must establish their own agencies. This is the case in Greece, as lately explained in a published letter from the American consul. British and German exporters have agents there, who push the sale of goods, and attend to credits and collections. German manufacturers have started in recent years many agencies in Brazil and Mexico. It is for introducing goods in our new possessions that attention has been directed to learning the Spanish language. The American Export Association, which serves any manufacturer by selling his goods in any part of the world, is described in the World's Work of January, 1902.

manufacture, men engaged in new industries undaunted by competition from Europe.

1

Rise of Manufacturing in the American Colonies. "The industries that now constitute the bulk of our manufactures had their origin in colonial days." Shoes were exported from Lynn in 1651. A permanent iron furnace was started in Massachusetts in 1644, one built in Virginia in 1619 having been destroyed by Indians. After 1725 iron was regularly exported, and many iron works were operated in the middle colonies. Besides household production of clothing everywhere, manufacture of flax and woolen cloth was followed as a regular occupation in all except the Southern colonies, in which effort was confined to the profitable crop of tobacco, readily exchanged for manufactures from Europe. In 1770 there were forty paper mills in Pennsylvania, New Jersey and Delaware;2 and Pennsylvania had then probably sixty iron furnaces (Levasseur). Connecticut and Pennsylvania had thoroughly established before 1789 the variety of metal industries for which they have ever since been noted. In that year 234 of the 700 families in Lancaster were engaged in manufacturing. But the greatest industry of all was shipbuilding and ocean carrying, which grew up from the beginning in the Northern colonies, and became important in the South also before 1789. In the one year 1769 a total of 389 vessels were built, aggregating 20,000 tons. Manufactures in 1789, it was estimated twenty years later, reached a total output in value

1 Wright, IOI. Most of the information here given is taken from his valuable book.

2 A full account of the rise of all American industries is given by Wright, and brief outlines by Bullock and Levasseur. The information above regarding paper mills is taken from The Story of Paper Making, J. W. Butler Paper Co., Chicago, 1900.

of $20,000,000, of which the exports amounted to $1,000,000. In 1791 over 1,000,000 bushels of wheat were exported, and in 1792 sawed lumber to the amount of 66,000,000 feet, besides timber and staves.

Alexander Hamilton's Report on Manufactures, in 1791, gives a long list of articles then made on a considerable scale. The principal were the following: Leather, shoes, harness; iron bars and sheets, steel, nails, implements, tools, utensils, arms, carriages; ships, furniture, cooperage; cables, cordage, sail-cloth; paper of various kinds, and paste-board; hats of fur and wool; copper, brass and tin wares. Besides the production of these and many other articles mentioned, carried on as regular trades, there was "a vast scene of household manufacturing.'

Colonial Manufacturing Restricted by England. - All this was done, not under protection, but under attempts at suppression. Before the Revolution, English tariffs were made to hinder, not to help American manufacturing. The intention was to keep the colonies engaged in producing raw materials for England, that the latter might be well supplied with these, and also that the colonial market might be reserved for her manufactures. In 1699 Parliament prohibited the exportation of wool and woolen goods from the colonies, and in 1731 the exportation of hats. The making of cloth in New York was prohibited by Holland with heavy penalties. In 1750 Parliament forbade the erection of new iron forges, rolling mills, and slitting mills, to restrict the colonies to the production of pig and bar iron. Colonial manufacturing, therefore, developed "not only in the face of English competition, but in spite of repeated attempts to destroy these industries." 2

1 Bullock, 52.

2 Bullock, 50.

Did the Independent Country Need Protection?-After the peace of 1783 many enterprises made necessary by the Revolutionary War1 were suspended, commerce having been resumed with England, whose steam engines and machines for spinning and weaving (invented 1767– 85) had meanwhile been rapidly developed. The difficulties of hurriedly starting these American enterprises, in conditions not yet ready for them, and the necessity to consumers of having to put up with unsatisfactory goods, were only a part of the losses of war, whatever the value of the experience. Men abandoned these industries because better business was at hand, yielding products whose exchange for foreign wares was a benefit to all concerned. But American manufacturing as a whole remained vigorous, as shown above in the figures for 1789. While it is true that a need for systematic regulation of industry and commerce was a cause of union in 1789 under the Constitution, which was the "outcome of the industrial necessities of the people" (Wright), there was greater need for harmonizing crude state tariffs, which hampered free trade at home, than for protection against manufacturers abroad.

An Aroused National Spirit, which in recent times in Europe has so often appeared in self-weakening high tariffs, took wiser methods among Americans after 1783. While different states, in response to popular demand,

1 Protection Drove America to Revolution.-"The purpose to monopolize the trade of America brought on the Revolution, by unjust taxes, and the crushing out of local industries." (Roberts, 59.) The same policy, ruthlessly followed, brought on England the apparently everlasting Irish question. The two greatest losses, therefore, the British Empire has ever sustained, may be attributed mainly to protection. In these earlier cases its gains were exacted from dependent territory; in present cases its gains are exacted from a submissive consuming class.

enacted protective tariffs, they followed also their earlier methods, then doubtless fully justifiable, of granting land, remitting taxes for a time, offering prizes, and giving or lending to capable men without capital a few hundred dollars, to assist in starting badly needed industries that would not otherwise have come soon. In the people's "patriotic enthusiasm, many societies arose in all the states for protection and encouragement of industrial undertakings." The fact that "England sought by every means to prevent the introduction of mechanical industry," shows that, regardless of tariffs, the capacity of the Americans, as proved by colonial manufacture under English restrictions, was not to be smothered. The general sentiment against use of English goods gave the unforced encouragement that a person now enjoys anywhere locally who starts a new industry. "All the great industries, those that are now the great industries, were in existence, and so fully recognized, not only by this country, but by England, that they needed only the fostering care of enterprise, and the persistent effort of proprietors of capital and of labor, to secure rapid development" (Wright).

The Protective Act of 1790, which paved the way for the introduction of the factory system from England (Wright), was only a part of the general system of favor with which the people welcomed new industries. It was a revenue measure with the light incidental protection that many tariff reformers now approve-71⁄2 per cent on iron and leather, 10 per cent on paper, 121⁄2 per cent on chinaware, and I cent a pound on nails. But new enterprises did not wait for it. Having the cotton fields and the water power, with well established iron works, fulling mills, and carding mills, the Americans lacked