THE TARIFF ON CALIFORNIA. 147 If the goods were domestic, still they were greatly advanced in price by the action of the tariff upon imported goods; for it is a rule of human nature to ask as much price as can be obtained, with but little regard to cost of production. The tariff, by excluding foreign goods, or enhancing their prices, helps the home producer of such goods to advance his rate of charges upon the excluded or duty-paying article. Under these circumstances, it is within bounds to assume that of the above eight hundred and fifty millions of gold, California has lost one-third of it by the action of the customs upon its value. This makes the sum of $283,333,333 loss to California through the customs. Add to this sum the interest at six per cent. for only eight years, or half the time California has belonged to the Union, and we have one hundred and thirty-six millions loss of interest-making the gross sum of $419,333,333 as a tribute which California has paid to the Union in the shape of loss upon the value of her gold, and interest upon that loss. Surely, this is no trifling tribute for a population of 380,000 to pay for the good of the Commonwealth. The people of this State suffer under the burden of their taxes, but a large amount of them are out of sight. They pay them in ways which they do not comprehend. At present the mines of California are yielding about $48,000,000 a-year. The custom-house takes one-third from the value of this gold, for foreign use. In a subsequent paper I purpose to demonstrate that quite as large an amount is taken from its value by Federal legislation, for domestic uses as money. Hence we are justifiable in deducting fully one-third the value of all the gold yield of the mines for, and on account of such legislation. Such being the case, let us see what California pays and loses for the good of the Union: Annual yield of gold $48,000,000; loss on this year just closed. $16,000,000 7,134,664 fiscal $28,289,589 148 WHAT CALIFORNIA HAS HAD, ETC.. Such is the annual tribute which California pays for the support of the Union at large, and it is equal to eighty dollars for every one in the State. This, however, is only the national claim. The State, County, and City expenses are some four per cent. further. No wonder then, that with such drafts, occult and patent, upon the resources of the people, they cry out hard times. California has paid in times past to the Federal Government, in losses on her gold through the action of the tariff and interest on these losses, $419,333,333—enough to build four railroads from the State to the Missouri River. She is paying to the Federal Government, and losing on her gold through the action of the tariff, more than $28,000,000 a year, enough to build the railroad from California to the Missouri River with a double track the whole distance, and equip it with rolling stock, locomotives, and appointments every five years;-yes, reader, every five years, California is paying enough in gold, adding to it the losses which the tariff makes on her coin, to do all this immense work. But lest the imposing of an import duty cannot be seen to be the same in effect as an export duty upon the article which pays for the import, I will add a little further upon that view of the case. A duty imposed upon articles which a State neither buys nor sells, cannot directly affect the interest of such State; but a duty imposed upon any article which a State buys or sells does directly affect the interest of the same. The State of Maine would not be much annoyed by a heavy export duty, if such were constitutional, upon diamonds, silks, and laces, because these articles are not produced there. But it would be uproarious, perhaps belligerent, if Congress should impose an export duty of one-third the value upon all the pine lumber manufactured there. It would not satisfy the sturdy lumbermen to tell them that the duty would be added to the value of their deals, and the consumer must pay it. The native sense of the people would teach them that they could neither sell so much nor at so good remunerating prices, with such a duty imposed, as under a free trade. Again: suppose that the duty was not imposed upon the manufactured lumber, but upon goods brought into the State ;-goods purchased THE TARIFF VS. GOLD AND COTTON. 149 in Boston with the proceeds of the sales of their lumber, and how would the case stand? Simply thus: if lumber were the only means they possessed of paying for goods, then a duty upon goods would virtually be a duty upon their lumber, and vice versa. The tariff, then, bears onerously upon all those States which have articles for sale in the markets of the world. Under this definition it bears harder upon California than upon any other State. This for the reason that gold is always marketable and in demand in all the civilized world. Wheat and flour, pork, hams, lard, butter, etc., etc., are only marketable abroad when the foreign markets run short of these articles. It is only when these goods bring prices which will pay for shipping that they are exported. But gold is money, and will always bring its value abroad. Cotton comes next upon the list, and it is upon gold and cotton that the tariff bears with oppressive weight. These articles can be marketed abroad, but upon the goods bought with them the imposts of the Customs will take fifty per cent. of their foreign value. Another objection to the position is this: that the gold of California is paid for largely in goods of domestic manufacture by the old States, and that after it is paid for, it, of course, belongs to the purchaser who has given value for it. The reader will understand me; I am only examining the nature of trade, and maintaining that it stands upon an unequal, unjust, and wrong basis, and that the tariff does largely aid and support this basis. The gold of California is indeed paid for in such domestic goods, but the prices of these goods are advanced greatly by the action of the tariff on foreign goods. Thus, imports must pay fifty per cent. on their value before they can compete with the home-made articles. It is, for these reasons, so plain that he who runs may read. The American tariff takes from gold one-third of its value for use in purchasing foreign goods. N* No. IX. THE EFFECT OF DEMONETIZING GOLD UPON ITS DOMESTIC VALUE. In a former paper I have shown that the American tariff takes from gold one-third its value for foreign purchases, if those purchases are imported. To Americans, this closes the markets of the world for the article, except at a most ruinous sacrifice. What avenues of trade and commerce are still open to this metal upon a fair business basis? The value of gold is consequent, first, from the labor of extracting it from the quartz rocks; secondly, from the fact that civilized nations have adopted it as their most perfect measure of values-as their most accurate medium of adjusting the balances of commerce-as the most perfect form of money of the world which exists. If gold were not a universal medium of exchange among civilized nations, as a useful metal in the arts, it would scarcely rule above the value of silver. Indeed, its disuse as money would so lessen its value, that it would not pay for mining, unless found under much easier circumstances of attainment than any which exist in California. It is not yet known whether coined gold is money in the United States. In other words, the Supreme Court of the United States have not yet decided whether Treasury notes are a legal tender upon all money contracts. If they should rule thus, then will gold be most thoroughly demonetized at home. Mr. Stevens, of Pennsylvania, in a speech, in 1864, before Congress, made these statements: 'By the legislation of Congress, two years ago-whether wisely or not -it was declared, in effect, that gold is no longer money in the actual and practical sense of the word. The mo ney of the nation is that which has been made lawful money by Act of Congress, which has demonetized gold and HOW THE TARIFF AFFECTS CURRENCY. 151 other coin. He repeated that, practically, what Congress has declared lawful money is the standard of value." It is to be hoped that a kind Providence will forfend the necessity of any such abominable doctrine being ruled as the supreme law of the land. But while the question remains in abeyance, whether gold or paper is real legal tender, (for both cannot at one and the same time be such upon all contracts, especially if their values be widely different) the acts of Congress do have a most blighting effect upon the value of coin. The great exponent of the principles of political economy, Adam Smith, in an article upon money (Book II, p. 122, Wealth of Nations) lays down the following proposition: "The whole paper money of any kind which can easily circulate in any country, never can exceed the value of the gold and silver of which it supplies the place, or which (the commerce being supposed the same) would circulate there if there was no paper money." For my own part, I was never a thorough convert to the doctrine here laid down. But in arguing from it at this time, I will allow it to be strictly orthodox in finance. Granting, then, to the learned Doctor the full force of his reasoning, I contend that the American currency is excluded from his rule by the very terms of it. To make the rule binding, he presupposes that "the commerce is the same." This means a free and open commerce between nations, without any hindrances or trammels of customs. If it means anything different from this, the rule would be such an absurdity that no one of common penetration would admit it. To illustrate the rule by an example: suppose that a certain kind of cloth was worth one dollar in London, and the same kind of goods was worth one dollar and a half in New York, in gold; as Dr. Smith expresses it, "the commerce being the same" between the two countries-that is, no duties on either side-then would that style of goods immediately come from London to New York in quantities to supply the demand. The course of commerce would equalize the currencies. Again: suppose that, instead of free-trade, this foreign cloth, on its arrival in New York, was subject to a duty of fifty per cent., or one-half its value, in that case it would not be sent here for market; for the very |