Besides this consideration which greatly diminishes the force of the objection, there is another which entirely destroys it. There is a strong reciprocal influence between the prices of all commodities in a State, by which they, sooner or later, attain a pretty exact balance and proportion to each other. If the immediate productions of the soil rise, the manufacturer will have more for his manufacture, the merchant for his goods; and the same will happen with whatever class the increase of price begins. If duties are laid upon the imports in one State, by which the prices of foreign articles are raised, the products of land and labor within that State will take a proportionate rise; and if a part of those articles are consumed in a neighboring State, it will have the same influence there as at home. The importing State must allow an advanced price upon the commodities which it receives in exchange from its neighbor, in a ratio to the increased price of the article it sells. To know, then, which is the gainer or loser, we must examine how the general balance of trade stands between them. If the importing State takes more of the commodities of its neighbor than it gives in exchange, that will be the loser by the reciprocal augmentation of prices; it will be the gainer if it takes less, and neither will gain or lose if the barter is carried on upon equal terms. The balance of trade, and consequently the gain, or loss, in this respect, will be governed more by the relative industry and frugality of the parties than by their relative advantages for foreign commerce.
Between separate nations this reasoning will not apply with full force, because a multitude of local and extraneous circumstances may counteract the principle; but from the intimate connections of these States, the similitude of governments, situations, customs, manners, political and commercial causes will have nearly the same operation in the intercourse between the States, as in that between the different parts of the same State. If this should be controverted, the objection drawn from the hypothesis of the consumer paying the duty must fall at the same time; for as far as this is true it is as much confined in its application to a State within itself as the doctrine of a reciprocal proportion of prices.
General principles in subjects of this nature ought always to be advanced with caution; in an experimental analysis there are found such a number of exceptions as tend to render them very doubtful; and in questions which affect the existence and collective happiness of these States, all nice and abstract distinctions should give way to plainer interests, and to more obvious and simple rules of conduct.
But the objection which has been urged ought to have no weight on another account. Which are the States that have not sufficient advantages for foreign commerce, and that will not in time be their own carriers? Connecticut and Jersey are the least maritime of the whole; yet the Sound which washes the coast of Connecticut has an easy outlet to the ocean, affords a number of harbors and bays very commodious for trading vessels. New London may be a receptacle for merchantmen of almost any burthen; and the fine rivers with which the State is intersected, by facilitating the transportation of commodities to and from every part, are extremely favorable both to its domestic and foreign trade.
Jersey, by way of Amboy, has a shorter communication with the ocean than the city of New York. Prince's Bay, which may serve as an outport to it, will admit and shelter in winter and summer vessels of any size. Egg Harbor, on its southern coast, is not to be despised. The Delaware may be made as subservient to its commerce as to that of Pennsylvania, Gloucester, Burlington, and Trenton, being all conveniently situated on that river. The United Provinces, with inferior advantages of position to either of these States, have for centuries held the first rank among commercial nations.
The want of large trading cities has been sometimes objected as an obstacle to the commerce of these States; but this is a temporary deficiency that will repair itself with the increase of population and riches. The reason that the States in question have hitherto carried on little foreign trade, is that they have found it equally beneficial to purchase the commodities imported by their neighbors. If the imposts on trade should work an inconvenience to them, it will soon cease by making it their interest to trade abroad.
It is too much characteristic of our national temper to be ingenious in finding out and magnifying the minutest disadvantages, and to reject measures of evident utility, even of necessity, to avoid trivial and sometimes imaginary evils. We seem not to reflect that in human society there is scarcely any plan, however salutary to the whole and to every part, by the share each has in the common prosperity, but in one way, or another, and under particular circumstances, will operate more to the benefit of some parts than of others. Unless we can overcome this narrow disposition and learn to estimate measures by their general tendencies, we shall never be a great or a happy people, if we remain a people at all.
NO. VI
July 4, 1782.
Let us see what will be the consequences of not authorizing the Federal Government to regulate the trade of these States. Besides the want of revenue and of power, besides the immediate risk to our independence and the dangers of all the future evils of a precarious Union, besides the deficiency of a wholesome concert and provident superintendence to advance the general prosperity of trade, the direct consequence will be that the landed interest and the laboring poor will in the first place fall a sacrifice to the trading interest, and the whole eventually to a bad system of policy made necessary by the want of such regulating power.
Each State will be afraid to impose duties on its commerce, lest the other States, not doing the same, should enjoy greater advantages than itself, by being able to afford native commodities cheaper abroad and foreign commodities cheaper at home.
A part of the evils resulting from this would be a loss to the revenue of those moderate duties which, without being injurious to commerce, are allowed to be the most agreeable species of taxes to the people. Articles of foreign luxury, while they would contribute nothing to the income of the State, being less dear by an exemption from duties, would have a more extensive consumption.
Many branches of trade, hurtful to the common interest, would be continued for want of proper checks and discouragements. As revenues must be found to satisfy the public exigencies in a peace and in war, too great a proportion of taxes will fall directly upon land, and upon the necessaries of life—the produce of that land. The influence of these evils will be to render landed property fluctuating and less valuable; to oppress the poor by raising the prices of necessaries; to injure commerce by encouraging the consumption of foreign luxuries, by increasing the value of labor, by lessening the quantity of home productions, enhancing their prices at foreign markets, of course obstructing their sale, and enabling other nations to supplant us.
Particular caution ought at present to be observed in this country not to burthen the soil itself and its productions with heavy impositions, because the quantity of unimproved land will invite the husbandman to abandon old settlements for new, and the disproportion of our population for some time to come will necessarily make labor dear, to reduce which, and not to increase it, ought to be a capital object of our policy.
Easy duties, therefore, on commerce, especially on imports, ought to lighten the burthens which will unavoidably fall upon land. Though it may be said that, on the principle of a reciprocal influence of prices, whereon the taxes are laid in the first instance, they will in the end be borne by all classes, yet it is of the greatest importance that no one should sink under the immediate pressure. The great art is to distribute the public burthens well, and not suffer them, either first or last, to fall too heavily on parts of the community, else distress and disorder must ensue; a shock given to any part of the political machine vibrates through the whole.
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