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Central Asia be outweighed by the proximity of the Russian Empire
and by its political influence。 Although Russia may still be； in
comparison with Europe； but a slightly civilised country； yet； as
compared with Asia； she is a civilised one。
Meantime； it cannot be denied that the want of civilisation and
political institutions will greatly hinder Russia in her further
industrial and commercial progress； especially if the Imperial
Government does not succeed in harmonising her political conditions
with the requirements of industry； by the introduction of efficient
municipal and provincial constitutions； by the gradual limitation
and final abolition of serfdom； by the formation of an educated
middle class and a free peasant class； and by the completion of
means of internal transport and of communication with Central Asia。
These are the conquests to which Russia is called in the present
century； and on them depends her further progress in agriculture
and industry； in trade； navigation and naval power。 But in order to
render reforms of this kind possible and practicable； the Russian
aristocracy must first learn to feel that their own material
interests will be most promoted by them。
Chapter 9
The North Americans
After our historical examination of the commercial policy of
the European nations； with the exception of those from which there
is nothing of importance to be learnt； we will cast a glance beyond
the Atlantic Ocean at a people of colonists which has been raising
itself almost before our eyes from the condition of entire
dependence on the mother country； and of separation into a number
of colonial provinces having no kind of political union between
themselves； to that of a united； well…organised； free； powerful；
industrious； rich； and independent nation； which will perhaps in
the time of our grandchildren exalt itself to the rank of the first
naval and commercial power in the world。 The history of the trade
and industry of North America is more instructive for our subject
than any other can be； Because here the course of development
proceeds rapidly； the periods of free trade and protection follow
closely on each other； their consequences stand out clearly and
sharply defined； and the whole machinery of national industry and
State administration moves exposed before the eyes of the
spectator。
The North American colonies were kept； in respect of trade and
industry； in such complete thraldom by the mother country； that no
sort of manufacture was permitted to them beyond domestic
manufacture and the ordinary handicrafts。 So late as the year 1750
a hat manufactory in the State of Massachusetts created so great
sensation and jealousy in Parliament； that it declared all kinds of
manufactories to be 'common nuisances；' not excepting iron works；
notwithstanding that the country possessed in the greatest
abundance all the requisite materials for the manufacture of iron。
Even more recently； namely； in 1770； the great Chatham； made uneasy
by the first manufacturing attempts of the New Englanders； declared
that the colonies should not be permitted to manufacture so much as
a horseshoe nail。
To Adam Smith belongs the merit of having first pointed out the
injustice of this policy。
The monopoly of all manufacturing industry by the mother
country was one of the chief causes of the American Revolution； the
tea duty merely afforded an opportunity for its outbreak。
Freed from restrictions； in possession of all material and
intellectual resources for manufacturing work； and separated from
that nation from which they had previously been supplied with
manufactured goods； and to which they had been selling their
produce； and thus thrown with all their wants upon their own
resources： manufactures of every kind in the North American free
states received a mighty stimulus during the war of revolution；
which in its turn had the effect of benefiting agriculture to such
an extent that； notwithstanding the burdens and the devastation
consequent upon the then recent war； the value of land and the rate
of wages in these states everywhere rose immensely but as； after
the peace of Paris； the faulty constitution of the free states made
the introduction of a united commercial system impossible； and
consequently English manufactured goods again obtained free
admission； competition with which the newly established American
manufactories had not strength enough to bear； the prosperity which
had arisen during the war vanished much more quickly than it had
grown up。 An orator in Congress said afterwards of this crisis： 'We
did buy； according to the advice of modem theorists； where we could
buy cheapest； and our markets were flooded with foreign goods；
English goods sold cheaper in our seaport towns than in Liverpool
or London。 Our manufacturers were being ruined； our merchants； even
those who thought to enrich themselves by importation； became
bankrupt； and all these causes together were so detrimental to
agriculture； that landed property became very generally worthless；
and consequently bankruptcy became general even among our
landowners。'
This condition of things was by no means temporary； it lasted
from the peace of Paris until the establishment of the federal
constitution； and contributed more than any other circumstance to
bring about a more intimate union between the free states and to
impel them to give to Congress full powers for the maintenance of
a united commercial policy。 Congress was inundated with petitions
from all the states New York and South Carolina not excepted
in favour of protective measures for internal industry； and
Washington； on the day of his inauguration； wore a suit of
home…manufactured cloth； 'in order；' said a contemporary New York
journal； 'in the simple and impressive manner so peculiar to this
great man； to give to all his successors in office and to all
future legislators a memorable lesson upon the way in which the
welfare of this country is to be promoted。' Although the first
American tariff （1789） levied only light duties on the importation
of the most important manufactured articles； it yet worked so
beneficially from the very first years of its introduction that
Washington in his 'Message' in 1791 was able to congratulate the
nation on the flourishing condition of its manufactures；
agriculture； and trade。
The inadequacy of this protection was； however； soon apparent；
for the effect of the slight import duties was easily overcome by
English manufacturers； who had the advantage of improved methods of
production。 Congress did certainly raise the duty on the most
important manufactured articles to fifteen per cent； but this was
not till the year 1804； when it was compelled； owing to deficient
customs receipts； to raise more revenue； and long after the inland
manufacturers had exhausted every argument in favour of having more
protection； while the interests opposed to them were equally
strenuous upon the advantages of free trade and the injurious
effects of high import duties。
In striking contrast with the slight progress which had； on the
whole； been made by the manufacturers of the country； stood the
improved condition of its navigation； which since the year 1789；
upon the motion of James Madison； had received effectual
protection。 From a tonnage of 200；000 in 1789 their mercantile
marine had increased in 1801 to more than 1；000；000 tons。 Under the
protection of the tariff of 1804； the manufacturing interest of the
United States could just barely maintain itself against the English
manufactories； which were continually being improved； and had
attained a colossal magnitude； and it would doubtless have had to
succumb entirely to English competition； had it not been for the
help of the embargo and declaration of war of 1812。 In consequence
of these events； just as at the time of the War of Independence；
the American manufactories received such an extraordinary impetus
that they not only sufficed for the home demand； but soon began to
export as well。 According to a report of the Committee on Trade and
Manufactures to Congress in 1815； 100；000 hands were employed in
the woollen and cotton manufactures alone； whose yearly production
amounted to the value of more than sixty million dollars。 As in the
days of the War of Independence； and as a necessary consequen