2d, A great loss was caused to the general production of the country. Labor and capital were withdrawn from pursuits of ordinary profitableness, and invested in business that required fifty per cent protection to make it profitable at all. If the duty was necessary to establish the manufacture in 1816, as it was,— for a still higher protection was called for, — does it not follow, that, on the whole amount made under the forced system of production, there was a loss to the country of thirty-three and one-third per cent; thirty-three and one-third per cent of ninety, the enhanced price, being fifty per cent on sixty, the original price? *

Is it possible that there can be any doubt of this? The production of wealth was decreased so much. The enhanced price, thirty dollars per ton, took the following form: —

* It should be understood that there can be no greater discount than one hundred per cent, which takes the whole of any tiling; yet there are men who profess to be learned and even well versed in financial matters, who speak very flippantly of two hundred or five hundred per cent discount. Professor Fawcett, in his " Manual of Political Economy," page 365, says, " Mr. Gladstone has been confident in his belief that a reduction of one hundred per cent, in the price of inferior French wines, will cause those wines to be purchased by classes of society in this country who have never before purchased them; and, therefore, the consumption will increase more than one hundred per cent." Certainly, Mr. Gladstone is right in supposing the consumption would be increased more than one hundred per cent, if the price were reduced one hundred per cent; but it seems almost incredible that the Chancellor of the Exchequer could have used the expression attributed to him. The fact that Professor Fawcett himself could write in this manner shows the importance of having the exact meaning of the term "discount" defined and determined. A writer in one of the most respectable magazines in New York lately stated that a certain commodity " had fallen six hundred per cent." Occurrences of this kind are frequent. The difficulty in the case seems to be, that discount and premium (or advance) are confounded. The first is limited to one hundred, the latter is illimitable.

Suppose the consumption of the United States at that time, 1816, to have been eighty thousand tons per annum, and that, under the system of protection, we made twenty thousand tons, importing the balance; there was, then, paid duty on sixty thousand tons, at thirty dollars............$1,800,000

Twenty thousand tons made, at a price enhanced by Total enhanced cost to the people * . . . . $2,400,000

Now, as the iron-masters did not get more than the average rate of profits, the entire six hundred thousand dollars was lost to the country, both to people and government. The sum of one million and eight hundred thousand dollars went to the national revenue. The protection of iron cost two million and four hundred thousand dollars, the people paying a tax not the less on the domestic than on the foreign product.

But the real loss to the country was much greater, because,—

3d, Many wasteful and disastrous experiments "were made. When any branch of industry grows up naturally, it commences upon a small scale, and is cautiously extended, as found profitable. Under a forced system, it is quite otherwise. A duty of thirty dollars a ton is laid upon iron.

Pennsylvania is full of iron ore and coal. What prevents her from making a vast sum by it? Has she not a protection of fifty per cent? So everybody reasons; so everybody acts. Great establishments are started at once. There is no occasion longer to consult adaptations of character, experience in business, or local economy. Success and fortune are secured to all by omnipotent protection. Men plunge headlong into the work, if, indeed, they suppose it to be any thing so serious as work. Merchants, professional men, farmers, mechanics, all are seized with the mania of iron-making. Large iron works are hastily and ignorantly got up.

* Besides all the profits charged on the duties and enhanced cost of the iron.

Incompetent heads manage them.

Inexperienced hands work in them.

Imperfect iron comes out of them.

Inevitable loss attends them.

Insolvency is the end of them.