If we apply these principles to our situation under an embargo, it will be difficult not to perceive, that, from the diminution of national income, to an extent-according to our certainly much underrated computation, of no less than 63,000,000 dollars per annum-there must result a proportionate diminution of consumption, which will necessarily affect the demand for home manufactured articles, as well as for those imported from abroad.

A sum so considerable, in a country of 8,000,000 of inhabitants, cannot possibly be substracted from consumption,without serious injury to the manufacturers and artists, as well as to cultivators, and almost every other description of people.

This observation will be deemed the more correct, when we reflect, that this diminution of income, affects in the first instance, and affects most severely, the people in the sea ports; whose prosperity chiefly depends on the success of commercial pursuits, and who are in this country the largest consumers; who sustain from an embargo a yearly loss of more than 23,000,000 dollars; who find themselves placed by this measure in the most discouraging and helpless situation.

It receives further corroboration from the well known fact, that all those articles, the manufacture of which has succeeded best in this country, have been exported to the West Indies, and other places, to an amount by no means trifling. Our nails, our hats, our leather, shoes, saddlery, cabinet ware, tin ware, chairs, cotton yarn, gun powder, lumber, paper, &c. &c. have found an advantageous market abroad.

If we only consider how many arts, and trades, are concerned in shipbuilding, how can we doubt that our domestic manufactures must suffer, during a state of things which renders ships useless.

On appealing to facts, we perceive, that every manufacturer and tradesman, who prospered with the general prosperity, previously to embargo and restrictions, now partakes of the general distress.

Those, therefore, who imagine that an embargo gives encouragement to domestic manufactures, cannot possibly mean such manufactures, as comport best with our local circumstances, with our present state of capital, skill, and knowledge; such as are most natural to us, and have been hitherto thriving. It is too obvious that these will suffer. They must mean manufactures with which, properly, we ought not yet to meddle, because we are not ripe for them, and which cannot succeed, unless aided by embargo or war.

With regard to these their opinion would be correct, if the

embargo were the permanent law of the land. But the measure is not, cannot be a permanent one.

People will not therefore readily engage in forming establishments, which must cause their ruin when the embargo

ceases.

Besides this consideration, they will be deterred by the fear of the competition arising from smuggling.

The cheapness of goods in Europe; their increased price with us; the lowness of exchange on England-hold out together such great temptations to smuggling, that even a government, as energetic and despotic as that of Bonaparte, with sea coasts, and frontiers, like ours, would prove inadequate to prevent it.

Experience supports the argument. Fresh British goods, notwithstanding the non-importation act, make their appearance daily in this market.

Manufactures, therefore, of commodities, the manufacture of which does not succeed with us in regular times, will not be readily attempted in consequence of an embargo, from apprehension of ruin, when it ceases; and of the competition arising from systematized smuggling, while it lasts.

Besides, manufacturing establishments, of the description in which Great Britain excels, require mostly the command of low priced labour, or the investment of large capitals. But our labour must continue high, till our population becomes redundant, and embargoes, so far from disengaging capital, as is most erroneously conceived, cause it, as we shall presently show, to dwindle away, and disappear.

But, if restrictions on commerce were to bring a few manufactures into existence, and occasion them for a while to prosper, the individual benefit, in this instance, would nevertheless result from the national loss, while the infinitely greater number of manufactures, suitable to our situation, and the flourishing state of which, is the more desirable on account of their promoting individual as well as public prosperity, must inevitably suffer.

Generally speaking, therefore, it seems undeniable, that embargoes, and commercial restrictions of any sort, like every other violent, unlawful interference of government with pri vate pursuits, proves in the highest degree injurious to manufactures, as well as to agriculture and commerce.

Measures of this description have consequently a baneful effect on our own industry, whilst they only partially, momentarily, and in a slight degree, affect the industry of other nations.

In addition to this they have a tendency to disunite us, because they operate with great inequality, bearing, in the first instance, most heavily, and destructively, on one particular, and useful description of citizens-the merchants, who link us with the world; enable us to make the most of our national advantages, and to attain the greatest share of prosperity at the least expense of labour.

They have a tendency to disunite us also, because they affect some parts of the Union more severely than others. The people in the back country experience from their operation no inconvenience, that could be compared to the privations which those suffer who, in the maritime districts, derive their com forts from the produce of the sea.

Nor ought we to forget, that the calamities which these measures occasion, by destroying security, and defeating all rational calculation, affect chiefly the active, the enterprising, the industrious, the honest.

The injuries, which the country sustains from embargoes, do not even cease with them. A trade, once repelled, rarely returns again to its former channel.

They, moreover, demoralize the nation; introduce, and systematize the business of smuggling; permanently impair, and temporarily destroy, the most convenient, and most productive source of public revenue.

A vigorous war, by sea and land, substitutes at least one species of activity for another. Fleets and armies receive the surplus produce; fishermen find employment in the navy. Armed, or swift sailing merchant vessels will still force some trade; others will become lucrative as privateers. The pleasure of individual distinction, or the participation of national renown, may compensate in some small degree for pecuniary losses. Embargoes take all and give nothing. They deaden.

So that it seems difficult to conceive a system of policy, considered as a substitute for war, more inefficient, with regard to an enemy; more ruinous, with regard to ourselves; more unjust, in the mode of its operation; more inimical to our federal union; more ignominious; more thoroughly bad; more preposterous, in every point of view. It constitutes a species of political suicide; not suicide, but self-torture, with dissolution in the rear, in consequence of gradual disorganization, inanition, and languor.

Experience, during the long embargo, has so powerfully confirmed some of these observations, and was so near verifying the rest, that it is now seldom attempted to defend the

interdiction of foreign trade on this ground. It is rather pretended that the present embargo was necessary as a measure of safety, as a step preparatory to war.

But, an embargo could not be necessary, as a measure of safety, on account of approaching war, with a view to the trade from which it is attempted to exclude us by the orders in council. With respect to this trade we are already in the same situation, as if we were actually at war with Great Bri tain.

With regard to our trade to Great Britain herself, her dependencies, and allies, it is not probable that property sent to them by our merchants, under the idea of a still prevailing peace, or of the probability of its continuance, would be endangered. A nation to whom trade is so necessary, that she thinks proper to establish a licensed one, with the enemy bent on her destruction, is not likely to injure individuals, seeking to preserve a friendly, and mutually beneficial intercourse, to the last moment; the less as it must be her interest rather to reconcile the good will, than to provoke the resentment of our merchants; the less also, as she endeavours to hold out the idea, that the orders in council, the cause of the expected war, are with her a measure of self-preservation, and, consequently, of necessity, well or ill understood-but not of ill will, or enmity, to this country.

At any rate, if apprehensions were entertained by our government on this score, they ought, consistently, to have afforded our merchants an opportunity at least, of bringing home the vast amount of property, which they have in Great Britain already. A genuine parental solicitude in congress would have urged, as the true policy,-pursuant to their declared object, -the removal of every restriction on trade, and the intimation that a general embargo would be laid, and a hostile attitude taken at the expiration of a fixed period, should no adjustment of difficulties have taken place by that time.

Besides, if the embargo was intended as a measure of safe. ty, as a forerunner of war, there could be no occasion to lay it for sixty days, less for three months, still less for four, as was proposed.

Finally, our merchants might be suffered to judge them. selves of the degree of danger attending their adventures. Self-interest is of all others the most sagacious, and government does not pretend to be in possession of secret informa

tion.

As a last argument in favour of the present embargo it is urged, that the measure is expedient and beneficial, with a

view to preparations for war. We have vast capitals, it is said, engaged in foreign commerce. If we stop this commerce, they will become disengaged, and there will be created a disposition, both to lend them to government at a low interest, and to invest them in manufacturing establishments.

There seems to be some plausibility in this mode of reasoning, and yet we shall find it almost totally destitute of foundation.

If our circulating medium consisted of specie, then the argument just stated would have weight. Specie cannot be employed beneficially except by investing or lending it. A man who has two hundred thousand dollars hard money in his chest, and is not permitted to trade, may be glad to find a borrower, even at a moderate interest, or tempted to erect manufacturing establishments, should even the prospect of their success be doubtful, rather than be obliged to watch an unproductive treasure. But the case is vastly different when the active capital of the merchants, that is, the circulating medium, consists, as with us, chiefly of bank paper.

All the credits, which banks circulate, either in the form of bank notes, or book entries, bear an interest, with the sole exception of those, arising from specie deposits, and from the respective expenses of the several institutions, such as the erection of banking houses, the salaries of their officers, &c.-The truth of this position is obvious, because the banks never grant a credit, unless specie is deposited, but for a valuable consideration, which is the interest deducted, on discounting bills or promissory notes. Deposits made in the bank notes of other banks, in those of the bank itself, or in checks, form no exception, because they are themselves bank credits, which have come previously into existence, through the process of discount of promissory paper, or through deposits of specie.

The discount charged is, nominally, six per cent., but, being paid in advance, amounts in reality to a little more than six and one third per cent.

Such being the fact, the quantity of bank money in circulation, must necessarily be commensurate with the extent of commercial activity.

Suppose that there are in the city of Philadelphia ten merchants, worth in real capital, that is, in houses, lots, lands, wharves, ships, and other property, one million of dollars, and that they are in the habit of trading to South America, to the Havanna, and other places.

These persons, when trade is open, purchase on the spot, such commodities as are wanted at the places, where they have VOL. III. 2 S.