Manufacturing Crisis!

[Tachyon Flare]

Manufacturing Crisis!

Recently I ran into article titled "America's Maligned and Misunderstood Trade Deficit" by Daniel T. Griswold (http://www.freetrade.org/pubs/pas/tpa-002.html) that advocated "free trade" as a so called successful form of economic policy, it is this article that encouraged me to write a refutation concerning America's dwindling manufacturing base and trade deficit. First, Daniel T. Griswold is an associate director of the Cato Institute's Center for Trade Policy Studies (www.cato.org), an institute largely funded by financial sector (banks and insurance), not to mention they consider Milton Friedman as "ally and leader in the battle for human liberty and human dignity." This is the same man who advocated the inherently unstable floating exchange rate system (also known as dirty floats) and also wanted legalize insider trading. (Notice my bias? =)

Interestingly enough, I had a chance to also listen to Daniel T. Griswold concerning "high-tech and white collar jobs being moved to foreign markets" (http://video.c-span.org:8080/ramgen/gdrive/15days/wj080403_tonelsongriswold.rm') with Alan Tonelson (wrote a decent called "Race to the Bottom." However, it fell short in some areas). I highly recommend listening to there comments, a great deal of Griswold's statements are incredibly short sighted, he was convinced that there was no real concerns on the shifting of jobs, that it was for the betterment of America. Some of his statements were rather shocking, he completely deluded himself of the coming economic recovery was just around the corner.

Article concerning NAFTA states:
"In the aftershock of the peso crisis, Mexico's real GDP shrank in 1995 by 6.2 percent. Because of falling domestic demand, fleeing capital, and a plunging peso, Mexico's overall trade balance flipped from a deficit in 1994 to a surplus in 1995. Mexico's bilateral balance with the United States did the same, going from a deficit to a surplus. That supposed "trade debacle" for the United States had nothing to do with NAFTA or any other change in trade policy. It was caused by mismanagement on the part of Mexico's monetary authorities, and the chief victims of that mismanagement were Mexican workers. Perhaps NAFTA critics who believe our bilateral trade deficit with Mexico is such a terrible development would have preferred that the U.S. economy, not the Mexican economy, contract 6.2 percent in one year. Of course, American workers would have suffered, but it would have done wonders for our bilateral trade balance."

This is one of the most blatant examples of implementing foolish policies. There were many opponents of the NAFTA, there were many individuals who gave a detailed analysis on the destructive effects of unregulated trade. The peso crisis was not simply a contraction, it was entire economics model brought to it knees, millions of jobs were lost, 50% annual inflation rate, business bankruptcies, and decline of living standard. Short-term interest rates Mexican government bonds rose from 14 to 70 %, peso depreciated from 29 to 15 US cents per peso. Investment firms like Fidelity, Goldman Sachs, Scudder, and Solomon Brothers were bailed out because they had lost over 30 billion dollars of savings funds, how is that for the welfare state? Those proponents of NAFTA suddenly felt compelled to bailout financial parties who heavily invested in Mexico, how is that for state intervention? Apparently, it is easier to blame the "mismanagement on the part of Mexico's monetary authorities," than to accept the reality that NAFTA failed miserably in a year after its implementation.

The article starts:

"Contrary to popular conception, the trade deficit is not caused by unfair trade practices abroad or declining industrial competitiveness at home. Trade deficits reflect the flow of capital across international borders, flows that are determined by national rates of savings and investment. This renders trade policy an ineffective tool for reducing a nation's trade deficit."

Not entirely true. Today's US corporations (Perhaps I should state transnational corporations?) are radically different from early 20th century, the shift of manufacturing base with international capital mobility gravitate towards low wage labor markets. Since foreign competitors have taken advantage of lowest wages to undercut rivals which ultimately erode US domestic manufacturing, this has drastically reduced profits margins and hence many of the fortune 500 companies have no choice but to move manufacturing / service related jobs overseas. In the midst of this cut throat foreign competition, and shifting of domestic factories overseas, the US not only loses tax revenues it also forces the nations manufacture base jobs convert to "service" related jobs. You will notice, most of the current neo-Keynesian Friedamite economists glorify the service oriented economy. Notice in the graph during the service-oriented economy was taking effect, there was a noticeable influx of capital, capital that created this illusion of wealth. However, the influx created distortions in the structure of credit flows however produced ephemeral "wealth" by propping up financial assets (Federal Reserve also doubled the monetary supply within a ten year period). The 1990s years of "prosperity" was because of massive net foreign capital inflows to US and loose monetary policy, it was certainly not because of a drastic increase physical output.

http://www.goldismoney.info/web/1.jpg

Unfortunately, as the manufacturing base erodes and once the influx of foreign capital begins to decline, this creates a vacuum in terms of financial assets, eventually this creates a collapse function. Domestic manufacturing can no longer compete due to low wage labor markets and currencies deliberately pegged at low rate make it even more difficult for industrialized nations, ultimately this country has been running with foreign capital not because of domestic industries. Let me lastly state that export surplus or trade deficit is an indicator, it does not necessarily tell you the overall health of an economy, there are many third world countries that are net exporters yet there standard of living have hardly improved.

Check out this quote from Safe Money Report:

"Stiff competition from low-cost overseas competitors is pummeling the US manufacturing sector so hard that some companies are flat out giving up. Take, for example, North Carolina-based Pillowtex, a maker of sheets, pillows and other home goods. Yesterday, the struggling company shuttered 16 plants and started the liquidation process. It fired a whopping 6,450 workers - and will probably let the other 1,200 go once it sells off its assets.

Clearly, corporations are still trying to cut costs to survive, and some are even giving up altogether. And a slight pick-up in economic activity isn't going to be able to erase three years of a slumping economy."

Companies will continue to cut cost at attempts to stay in business, either they will continue to sell off there assets, or shift manufacturing to low wage labor markets, face bankruptcy or they will plea to the Federal government for a bailout, but are any of these choices acceptable? Keep in mind, once foreigners begin to liquidate their holdings in the stock market and a combination of short selling and currency attacks takes effect, this country will face an unimaginable credit collapse that will wipe out the manufacturing sector. The crash of the dollar will sky rocket interest rates, raw material will sharply increase in price, which will make production costs higher and will reduce profit margins, corporations will then try to layoff jobs in hopes of cut costs, at the same time they will face harsh competition overseas, hence this will dramatically reduce economic activity.

Let me state the CATO institutes believes "trade deficits reflect the flow of capital across international borders, flows that are determined by national rates of savings and investment;" It is this superficial analysis that influence US policy makers in the wrong direction in identifying the cause of the problem. It states "the trade deficit is not caused by unfair trade practices abroad or declining industrial competitiveness at home," this is by far the weakest argument of free trade, it assumes that all labor markets are completely the same. No amount of savings or investments can prevent domestic industries from competing with different labor markets, low peg currency valuation, lack of foreign labor laws, environmental laws, etc, it assumes everyone is on the level playing field, that all labor markets are the same; this in of itself is rather a glaring flaw.

Historical Growth of Manufacturers

What were Alexander Hamilton's views? Let us examine wisdom of Alexander Hamilton: Report on the Subject of Manufactures, December 5, 1791:

"Duties of this nature evidently amount to a virtual bounty on the domestic fabrics since by enhancing the charges on foreign articles, they enable the national manufacturers to undersell all their foreign competitors. The propriety of this species of encouragement need not be dwelt upon; as it is not only a clear result from the numerous topics which have been suggested, but is sanctioned by the laws of the United States in a variety of instances; it has the additional recommendation of being a resource of revenue. Indeed all the duties imposed on imported articles, though with an exclusive view to revenue, have the effect in contemplation, and except where they fall on raw materials wear a beneficent aspect towards the manufactures of the country."

"The continuance of bounties on manufactures long established must almost always be of questionable policy: because a presumption would arise in every such case, that there were natural and inherent impediments to success. But in new undertakings, they are as justifiable, as they are oftentimes necessary."

Does this sound like a man who advocates free trade? Is this policy not contrary to the Austrian school of economics? Is it not contrary to the mainstream neo-Keynesian Friedamite economists? Did Henry Clay advocate free trade? Thomas Jefferson? Henry C. Carey? Friedrich List? Lincoln? Adams? McKinley? Was the United States historical protectionist or free trade? The word tariff (also can be referred to as protectionism) has a rather ugly sound, its origin comes from the seaport town of Tarifa, Spain occupied by the Moorish pirates with the aim of levying duties on all departing and arriving vessels whether legal or illegal. However, one must ask, was the United States historically protectionist or free trade? How did the United States increase domestic industries and foster economic growth? Did it accept David Ricardo's "comparative advantage" and Adam Smith's "invisible hand"?

Let us examine the historical percentage of import duties:

http://www.goldismoney.info/web/4.jpg
http://www.goldismoney.info/web/3.jpg
http://www.goldismoney.info/web/2.jpg

Notice the relatively high protective barriers particularly during the "Gold Standard Era (1870-1914)." Now notice England's import duties, particularly when the British Empire dominated 1815-1915. One can easily state, the rapid growth of the US & United Kingdom used heavy protectionism to foster economic growth to maintain it dominancy. One can also argue the progressive lowering of tariffs and quotas during the 50s and 60s promoted by GATT (General Agreements on Tariffs and Trade), IMF and various other financial non-government organizations may have partially contributed market distortion that led to the eventual breakdown to the Bretton Woods. In addition, notice both the United States & United Kingdom (See Chart Below) percent labor force has considerably declined during the reduction of tariffs over the decades, particularly during the Kennedy Rounds.
http://www.goldismoney.info/web/5.jpghttp://www.goldismoney.info/web/6.jpg

The German-American Friedrich List influenced with Hamilton tradition eloquently said:

"It is a very common device that when anyone has attained the summit of greatness, he kicks away the ladder by which he has climbed up, in order to deprive others of the means of climbing up after him... Any nation which by means of protective duties and restrictions on navigation has raised her manufacturing power to such a degree of development that no other nation can sustain free competition with her, can do nothing wiser than to throw away these ladders of her greatness."

Overall

I am convinced that unregulated trade and capital has weakened national sovereignty, it has put this country in an extremely vulnerable position. When I speak of United States, it should be as a sovereign nation, a country that is economically sovereign, not subjugated and subverted by foreign import or the whims of international capital. This country is no longer self-sufficient, it is extremely dependent on imports, and the dismantling of our quotas and tariffs has moved our production abroad thereby putting a downward pressure on living standards. The use of protection would motivate firms to get behind a tariff wall to sell their products increase domestic industries thereby increasing competition within the same labor markets. But when protection is removed, and since labor markets are different, firms are gravitated to low wage labor markets hence markets do not necessarily come to a equilibrium as most free traders like to think, but free trade heightens disequilibrium between nations. Although US industries have faced intense competition because of free trade, that competition has been on radically different labor markets which has forced US corporations to move there operations abroad, either to remain competitive or to increase profit margins. Let me also state that during the past 30 years destruction of our protectionist policy, the small to medium domestic manufacturers have been destroyed through excessive foreign competition either by bankruptcy or consolidation leaving a great deal of monopolies / multinationals / transnational corporations hence there is no longer competitive competition within the US. The use of anti-trust laws which were heavily enforced during early part of the 20th century should be used with a gradual increase tariffs, this will no doubt entice foreigners to invest in industries since they are not only protected by trade barriers but will also take advantage of US monopolies being dismantled hence an increase of economic activity aggregate will produce jobs within US. In summary, this country needs to go back to what historically worked.

The following is a list of require changes (Not necessarily in order):
<UL><LI><font face="arial">The use of exchange controls to prevent speculative attacks (dollar devaluation), and capital flight.</font>
<LI><font face="arial">Gradual increase of tariffs and quotas within a five-year period to its 19th historical levels. (See graph / chart above)</font>
<LI><font face="arial">Putting the US banks (including Government-Sponsored Enterprises) derivatives exposure into government controlled bankruptcy reorganization</font>
<LI><font face="arial">Reinstituting Glass Steagall Act and the Depository Institution Deregulation & Monetary Control Act</font>
<LI><font face="arial">Radical Monetary Reform (Gold Reserve System), fixed exchange rate system</font>
<LI><font face="arial">Eliminating Federal Reserve, transition to the Dept. of Treasury</font>
<LI><font face="arial">Use the existing volume of credit instead for domestic industry or infrastructure development. (In my opinion, this option is safer than monetary contraction)</font>
<LI><font face="arial">Eliminate Public Debt</font>
<LI><font face="arial">Enforcing anti-trust laws to increase domestic competition.</font> </UL>

Last Notes:

Many institutions are also promoting the idea of drastic dollar devaluation, although this does increase exports to balance the trade deficit, this outlook is typically is propagated as a solution by the (neo-Keynesian Friedamite economists) IMF and World Bank. The IMF has been notoriously known to exacerbate financial crisis, there solutions usually include trade liberalization and loans with strict stipulations (Structural Adjustment Policy). It is in the interest of United States under any circumstance (even under a collapse) to refuse any loans (bailouts) or policies recommended (Yes even the CATO Institute!) by the IMF, World Bank, WTO, and BIS. Third world countries that accepted loans from financial oligarchies often become subjugated and hence no longer become a sovereign nation.

I no doubt will expect a great deal of criticism concerning the use of protectionism as a means of increasing domestic manufacturing, however historically speaking, did not the founding fathers use tariff walls? Was that not the policy as a means of economic sovereignty? The charts speak for themselves. The propagation of dogmatic economic policies spewed out of media, academia, politicians, financial institutions have gradually weakened the foundations of America, and such a crisis of this magnitude can only be prevented by rethinking and changing policies that are historically proven. I hope to you hear constructive criticism concerning the manufacturing crisis.


"Free trade cheapens the product by cheapening the producer. Protection cheapens the product by elevating the producer. Under free trade the trader is the master and the producer the slave."

-William McKinley, 25th President.</font>

[Tachyon Flare]

The Honorable David Wells was the Special Commissioner on the Revenue. The 1869 report of that commission, which had been set up under President Abraham Lincoln, urged the United States to adopt the economic policy of the British System and chiefly targeted Henry Carey and his circle for their insistence on the American System.


Carey's open letters to Wells were printed in the millions, showing all how Wells had doctored the statistics — with the help of John Stuart Mill — to "prove" that economic growth occurred no matter what financial policy was adopted by the nation.


Philadelphia, February 20, 1869



Dear Sir:

You have advised your constituents that —


"As respects the relations of legislation by the national govern­ment to the results under consideration, if we except the adoption of a liberal policy in the disposition of the public lands, it is difficult, at least for the period which elapsed between 1840 and 1860, to affirm much that is positive, unless, in conformity with the maxim, that that government is best which governs least, absence of legislation is to be regarded in the light of a positive good. If important results followed the acquisition of California, such results were certainly neither foreseen nor anticipated, while as regards commercial legislation, a review of all the facts cannot fail to suggest a doubt whether the evils which have resulted from instability have not far more than counterbalanced any advantage that may have proceeded from the experience of a fluctuating policy."



That fluctuations of policy are to be avoided is very certain, but what, I beg to ask, are those of which you have now been led to speak? Are they to be found in the changes forced upon us in 1824, 1828, 1842, and 1861, by the almost universal ruin, public and private, of the closing years of those British free trade periods which commenced in 1817, in 1835, and in 1846? Are they not rather to be found in those several abandonments of American policy which led to the ruin of 1820, 1823, of 1841, 1842, of 1857, 1861? To one of those systems of policy, the one American, the other British, you here object, but to which of them you are thus opposed you do not clearly state. Which is it? Are you in future to stand before the world as advocate of the great British capitalists who would compel our fanners to make all their exchanges in Liverpool; or of the farmer himself who seeks to have the market brought so near to home as to enable him to free his land and himself from that terrific "tax" of transportation by means of which he, in the past, has been so nearly ruined? We have here a very important question, and that you may be enabled to answer it with satisfaction to yourself, I propose now to furnish "a review of all the facts" that have thus far been de­veloped, to wit:

British free trade almost crushed out the great iron manufac­ture in the period from 1817 to 1824; paralyzed it in that from 1835 to 1842; and did the same in that from 1848 to 1860.


American freedom of commerce, resulting from protection against the "warfare" of British "capitalists," more than trebled the iron production from 1824 to 1833; did the same from 1842 to 1848; and has doubled it since 1861.


British free trade never permanently added a single ton to the iron production in the whole thirty years of its existence.


American freedom of commerce has added 1,500,000 tons in the less than twenty years that the country has been ruled by the tariffs of 1828, 1842, and 1861.


British free trade closed the cotton mills that had been brought into existence during the war for freedom of navigation, and for sailors' rights, which commenced in 1807 and found its close in 1815. It wholly arrested progress in the period which closed in 1842; and almost wholly in that which ended in 1860; doing this in despite of that great discovery of California treasures by means of which the cotton manufacture should have trebled.


American freedom of commerce doubled the cotton consump­tion in the period ending in 1833. It almost trebled it in that ending in 1847-48. It has added fifty percent thereto in the last four years, and promises soon to exhibit an increase so great as to make a home demand for half the crop.


British free trade prevented the growth of either the iron or cotton manufacture in the South, and thus prevented the diversi­fication of employments which would peacefully and profitably have given freedom to the slave, while increasing tenfold the value of land.


American freedom of commerce gave to the South a cotton manufacture that in 1847 was of the highest promise. It now pro­poses to give to it every variety of manufacture, thereby greatly aiding the cause of freedom, while largely increasing the fortunes of those who own the land.


British free trade bankrupted merchants and manufacturers, and filled our cities with paupers in 1820, 1842, and 1860.


American freedom of commerce gave prosperity to merchants and manufacturers, and profitable employment to the laborer, in the periods which closed with 1835 and 1848; and is now doing the same under the protective tariff of 1861.


British free trade prevented immigration in the period preceding effective action of the tariff of 1828. It paralyzed it in that which closed in 1843-44. It had almost annihilated it in that which closed in 1861-62.


American freedom of commerce quadrupled immigration in the period controlled by the protective tariff of 1828. It quadrupled it again under that controlled by the tariff of 1842; and it has now been more than trebled under the tariff of 1861.


British free trade almost annihilated the railroad interest in the period which closed with 1842. It did the same in that which closed with 1861.


American freedom of commerce gave new life and vigor to the same interest in the period from 1842 to 1848. To a far greater ex­tent it has done the same under the tariff of 1861.


British free trade, throughout its several periods of existence, has looked to crushing out the domestic commerce; to increasing the necessity for seeking distant markets; and to throwing on our farmers all the "tax" of transportation.


American freedom of commerce has sought to bring the market to the farmer's door, thereby freeing him from all such "tax," while throwing on the foreign manufacturer all the expenses standing be­tween his market and himself.


British free trade, throughout its whole existence, subjected our farmers to taxes so heavy that to a frightful extent their properties, in 1818-23. 1840-42, and 1857-60, changed hands under the sheriffs hammer.


American freedom of commerce, in all its several periods, has given prosperity to the farmer; and has already so far relieved him from the "tax" of transportation that, and for the first time in our history, he is now almost everywhere free from the burthen of mortgage and other debts.


British free trade gave us the financial revulsions of 1818-23, 1837-42. 1857-60; ruining merchants and manufacturers; almost annihilating public and private revenues; making the rich everywhere richer and the poor everywhere poorer; and forcing the Treasury to the creation of burthensome debts.


American freedom of commerce filled the Treasury to repletion in the period ending in 1835, and saved it from bankruptcy in 1842.


It found the Treasury empty in 1861, and since then has supplied it with the means of making the most gigantic war recorded in the annals of the world.


British free trade, throughout, has looked to making Liverpool the hub of a great wheel of which American railroads were to be the spokes, as a necessary consequence of which there was no cohesion among the parts of which the Union had been composed. Of this discord, rebellion, civil war, were the unavoidable results.


American freedom of commerce looking, as it always has looked, to the creation of a great network of roads, tends toward bringing all the States into close communion each with every other, and thus establishing that complete harmony of interests to which alone can we look for the perpetuation of the Union.


2. Such is the "review" for which, in the extract from your Report above given, you have seemed to call. Having studied it, and having satisfied yourself that it contains nothing that may not be "accepted as historical truth," you may, perhaps be prepared to furnish answers to the following questions, to wit:


Why is it that, if protection be really adverse to freedom and to the general prosperity of our people, immigration always grows with such rapidity when protection is most complete?


Why is it that, if British free trade be really favorable to free­dom, men who previously had come among us with intent to stay, have always in free trade times so largely re-emigrated to Europe?


Why has it been that in the last few years hundreds of thousands of Canadians have abandoned their free trade country, and have preferred to settle in these benighted and protected States?


Why is it that of the emigrants who arrive at Quebec and Mont­real, and who have the choice between free trade on the one hand and protection on the other, nearly all prefer to take the latter, selecting homes in our Western States?


Why is it that Nova Scotia and New Brunswick are almost in a state of rebellion, because of their feeling of the absolute necessity for closer connection with these protected States?


Why is it that nearly the whole population of Ireland would desire to fly from British freedom of trade and seek for homes in this now partially protected country?


Why is it that British emigration to Australia diminishes, and that to us increases, almost precisely as our protective policy is made more and more complete?


Why is it that Australia, after a most severe political contest, has just now elected a protectionist parliament?


Why is it that furnaces are built and mines opened in protective times, and abandoned in British free trade times?


Why is it that when we build furnaces and open mines railroads are always profitable to their owners, and capital is easily obtained for the construction of new lines of road?


Why is it that when mines and furnaces are abandoned railroad property so far declines that it becomes most difficult to obtain the means for building further roads?


Why is it that financial crises, resulting in the ruin of trade, are the never failing accompaniments of the British free trade policy?


Why is it that such crises never occur in periods of protection?


Why is it that the deposits in our saving funds so much in­crease in times of protection, and so much diminish in those of British free trade?


Why is it that Sheriffs sales are so numerous in British free trade times, and so few in number in those of protection?


Why is it that British free trade periods always end in almost total failure of public revenue and almost total bankruptcy of the treasury?


Why is it that protective tariffs are so favorable to increase of public revenue, and to reduction of the public debt?


Why is it that a protective tariff now produces annually nearly as much revenue as was obtained by aid of an anti-protective one in the whole period of Mr. Buchanan's Administration?


Why is it that the Republican party — the party of liberty, of equal rights, of intelligence, and of sound morals — is so generally favorable to the protective policy?


Why is it that British free trade doctrines are so universally popular among men who believe in the divine origin of slavery — among sympathizers in the late rebellion — among foreign agents — among ignorant foreigners — and among the dangerous classes throughout the Union?


Why is it that, now that it diversifies its industry by raising its own food, the South obtains more for 2,000,000 bales of cotton than before it had received for 4,000,000?


Why is it that when the refining of our oil, thus fitting it for consumption, gives us now almost our only real free trade, the same results would not be obtained, and on a much larger scale, by finish­ing our cotton and fitting it also for consumption?


Why is it that France, in making her last treaty with England, established a tariff more intelligently protective than our own?


Why is it that the maker of that treaty, Mons. Chevalier, had been led to tell his countrymen that —


"Every nation owes to itself to seek the establishment of diversi­fication in the pursuits of its people, as Germany and England have already done in regard to cottons and woollens, and as France herself has done in reference to so many and so widely different kinds of manufacturing industry. Within these limits," as he further says, "it is not an abuse of power on the part of the Government; on the con­trary, it is the accomplishment of a positive duty so to act at each epoch in the progress of a nation as to favor the taking possession of all the branches of industry whose acquisition is authorized by the nature of things. Governments are, in effect, the personification of nations, and it is required that they exercise their influence in the direction indicated by the general interest, properly studied, and fully appreciated. "


Why is it that, small as are its natural advantages, France, the country par excellence of protection, has been enabled to establish a foreign commerce so vastly greater than our own?


Why is it that Germany, the country that has most persistently carried into effect the policy of protection, now stands in the lead of Europe, although so recently a mere collection of loose fragments, ready to be moved about in whatsoever direction might be most agreeable to France or England at one moment, Russia or Austria at another?


Why is it that our Union, at the close of a long course of policy directly the reverse, has recently with such difficulty escaped being broken into fragments?


Why is it that British policy, that policy whose imitation is urged upon us by all the advocates of that anti-protective system which has invariably resulted in the destruction of revenue, has so entirely crushed out of existence that whole race of small British proprietors "whose touch," according to Arthur Young, "turned sand into gold?"


Why is it that the British agricultural laborer has, by means of that policy, been reduced to a condition so nearly akin to slavery as to have before him no future but the poor house?


Why is it that all the countries of the earth which find them­selves compelled to submit to the, so-called, free trade policy now urged upon the world by British traders, are this day in little better than a state of ruin?


Leaving you to furnish answers to these important questions, I here close this protracted review of your labors with the request that you read once again the following passage of your Report, and that you then determine with yourself how far its broad "assertions" are to be regarded as making any approach toward "historical truth"; how far, too, the Report itself is such an one as we had a right to expect from a man who, holding a most important office, had been fully informed of the fact that money was being unsparingly used by British manufacturers in the effort now being made for perpetuating our industrial dependence as the most efficient mode of preventing the growth of political independence.


"Study of all the facts pertaining to the national development from 1840 to 1860, and from 1865 to the present time, unmistakably teaches this lesson; that the progress of the country through what we may term the strength of its elements of vitality is independent of legislation and even of the impoverishment and waste of a great war. Like one of our own mighty rivers, its movement is beyond control. Successive years, like successive affluents, only add to and increase its volume; while legislative enactments and conflicting commercial policies, like the construction of piers and the deposit of sunken wrecks, simply deflect the current or constitute temporary obstructions. In fact, if the nation has not yet been lifted to the full compre­hension of its own work, it builds determinately, as it were, by instinct."


Is there in all this a single word that you will now venture reassert? I doubt it much.



Yours Respectfully,

Henry C. Carey