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The convention helped lead him to move to New Orleans to start editing the Commercial Review of the South and Southwest, a monthly, beginning January 1846. He was thereafter a vigorous advocate of economic improvement in the south. His economic philosophy was fairly congruent with the "American System" advocated by Clay, Hezekiah Niles and others, but over the years, he came under the strong influence of Calhoun and other southern nationalists and secessionists, and became an important articulator of their views. Broadus Mitchell, his biographer in the Dictionary of American Biography (source of all quotes here), described him as a "vocal drifter with the tide which set toward secession."
In economics, he had a vigorous and analytical mind, reflected in the
two articles presented from the first volume of what became known as simply
* The first complained about the lack of an effective U.S. system of consulates for assisting merchants in foreign trade, and illustrated why one was needed.
* The second article argued that the current implementation of the tariff system, which taxed imports for re-export the same as imports for sale within the U.S. had decimated the re-export trade (particularly hitting New Orleans, which had once served as a great emporium for Mexico). He advocated, setting up warehouses, on a British model that would make it possible to track what goods were sold for the U.S. trade and what ones were re-exported, so as to tax only the former.
The articles are from pp 56-64 of the January 1846 issue. De
Bow's Review issues from 1846-62 and 1866-69 have been put online by
the Making of America Project. I highly recommend a visit to the Online
Books Page listing of Serials at http://digital.library.upenn.edu/books/serials.html,
which puts you one click away from the De Bow's archive and many
other wonderful resources, including the Southern Literary Messenger
and the North American Review.
The Empire of Commerce began its growth in what we are accustomed to call the "dark ages." The flint and steel were in its hand, which struck out the sparks of light that are recognized at that obscure period. The best authorities on international or public law and modern civilization admit, that the stipulations and compacts which commerce induced, were among the first in the order of those influences, which resulted in the resuscitation of letters and arts, and in the entire redemption of mankind. The lordly barons in wresting from King John the rights he had usurped, stipulated at the same time in behalf of the rights of all merchant traders visiting the empire.*
The London chapmen, in losing their insignificance and in growing up to princely wealth, established a third estate in the kingdom; too respectable to be despised, too powerful to be resisted, and bold enough to declare for or against kings and dynasties, for the Henrys or Edwards of the middle ages.
Whether for Britain, for France, or for Russia--for India, for the South Seas and the Pacific, or for republican America--there is but one voice now, and that cries for "trade." "Give us of your labor, and take of ours." "Buy" or "sell" are the pregnant words in every language under heaven. The RIALTO is the centre of the world's negotiations. For this navies float upon the ocean, for this grave embassies receive audience from the Tammahamahas of the Pacific, and talk Chinese with the potentates of the Celestial Empire.
What has become war in the lexicography of "King Commerce's" subjects? Will men apply torches to the granaries which contain their bread? Will they batter to pieces and sink in the ocean the elements of trade, which are to warm them amid winter snows, and defend them from summer suns? The lines of consolidation between nations and men are verging nearer to each other; and they meet in the unity, the entire "oneness" of us all.
To watch over and protect the great interests of trade, permanent departments of government have been instituted, which, taken together, constitute what is called the Consular System of the world. These agencies, representing their sovereign and country, are located at every considerable emporium of traffic, and by the theory of their constitution, are supposed to possess the sleeplessness of Argus, in watching over the rights and privileges and interests of their countrymen abroad, and the many-handedness of Briareus in providing for their security and defense.
This Consular System was scarcely at all understood among the ancients. Mr. Lester, our able and efficient consul at Genoa, whose work upon this subject ** is now before us, observes that we get the term consul from the Romans; and certainly we get little else. The
* This provision of the Magna Charta drew from Montesquie the concession that the people of England, above all other people in the world, understood the value of commerce and liberty.
** A Letter on the Establishment of a new Consular System in the United States: with Glances at the Origin and History of the Consular Establishments of Ancient and Modern Nations-the evils of our present system, the remedy, &c., &c. Addressed to Hon. Wm. W. Campbell, Member of Congress elect, from the City New York.
consuls of the early republic were scarcely less in authority than the kings they superseded. Still the interests of Commerce were not neglected in antiquity, but agents were located in different trading states, charged with duties of a similar nature to our modern consuls. The codes of international law, which obtained, for the most part, in those ages even among the most enlightened nations, were such as to speak little for the advancement of mankind. The ships of Athens were characterized as a "piratical fleet,"--" universal spoliation abroad, and cruel oppression at home," is affirmed of Rome, and Phoenicia, Tyre, and Carthage, recognized no rights or duties in their intercourse with foreigners.
Mr. Lester confesses the difficulties of tracing out the origin of the modern system:
"It has long been a disputed point with whom the modern Consular System originated, and what nation first led the way in the establishment of the commercial code, which was finally adopted by modern states, and has in our own times worked itself so deeply into the laws of nations. Nor could it be placed in its proper light without great toil and learning, aided by all the facilities which might be derived from investigations conducted on the shores and islands of the Mediterranean." pp. 165-66.
When the decayed tree of Rome had fallen and lay massive in its ruins, there grew up on the soil of Italy a few republics of contracted territorial limits, but of genius and enterprise which astonished the world, and of power and influence which made themselves felt among crowned potentates, and extorted from Rome's proud pontiff the confession, that Genoa alone was more "adequate" to the conquest of the Saracens in Africa, than any other power in Europe.
That noble Commercial Code, the Consolato del Mare, which has been attributed to the Spaniards, is now said to have originated in the councils of Pisa. The Pisans conquered Amalfi in the 12th century, and carried off the copy of Justinian's Institutes, which had been deposited there-the only copy existing. The Consolato del Mare recognizes the existence and regulates the actions of the Consular System.
Venice and Genoa were not long in adopting and carrying out the wise policy of the Pisans. They had commercial agents throughout all the East, and wherever public interests appeared to require it. These officers were held in the highest regard; they were required to be diplomatists; they were sent in public vessels, and were not allowed to participate in any traffic. What were the results?
We are told of Venice
"Her daughters had their dowers
From spoils of nations; and the exhaustless East
Poured in her lap all gems in sparkling showers."
And Shakespeare says:
"Since that the trade and profit of the city Consisteth of all nations."
"Venice, which had been founded by a few old men, women, and children, who had fled to the marshes of the Adriatic, to escape the rage and devastation of the northern barbarians, who were sweeping over Italy, became, in a few centuries, the first power in Europe.
ABUSES IN THE CONSULAR SYSTEM.
Pisa, which had been obliged to struggle for many years against the most formidable obstacles that can ever impede the growth of new states, with a malaria which annually swept off a multitude of her population, soon made her name feared from the pillars of Hercules to the shores of the Danube and the banks of the Nile, and became the commercial law-giver of all future ages. Genoa, which stands at the head of the Ligurian sea, hemmed in by almost impassable mountains, the Apennines and maritime Alps (which she could not cross), could not get her bread from the barren and rocky hill-sides, and she was driven out upon the Mediterranean. In the 8th century, the little city of Genoa drove the Saracens from their hold on the continent to the island of Corsica; from Corsica, she chased them to Sardinia; from Sardinia, she forced them out upon the open sea, and at last fell upon the seat of their power in Africa, and laid their capital in the dust--seized uncounted millions of treasure, liberated all the Christian captives of all their wars, and dragged back their dreaded chief to an Italian prison, where he died in chains." pp. 176-78.
It was not till 1485 that England commissioned an agent to reside abroad for the performance of consular duties, and not until the 17th century that these commissions came to be generally granted throughout the European States.
We have alluded to Mr. Lester's letter to Mr. Campbell. This active representative of our merchants abroad complains bitterly of the defects of the American consular system. He regards it, in fact, as no system at all; and trusts that a government such as ours will not long endure its abuses. Surely there needs no elaborate argument at this late day to establish the importance, the absolute necessity, of a proper vigilance over our commerce and our shipping, now scattered over every sea in the world, and over our citizens, who find their way "to the uttermost ends of the earth." If there be any deficiency in the present establishment, an American Congress will look to it--an American people will demand its removal.
We make a few extracts from Mr. Lester, which establish the abuse, and propose the remedy:
"The office of a consul is generally held by American merchants or foreigners; for, with a few exceptions, no American who is qualified for such a station will ask for or accept an office which is only a bill of expense, except with a view of making his official standing contribute to his own speculations. There are many ports where an American business cannot be supported; and, in such cases, those consulates are filled by foreigners." p. 191.
In regard to the evil of appointing a merchant to be consul, Mr. Lester gives the following example in point:
"In 1842 or'43 (I am not certain which), an American merchantman arrived at a port in the Mediterranean with a valuable cargo, which the captain was authorized to consign to any house he might select. He addressed himself to the consul, from whom he had reason (as his constituted adviser) to expect safe and disinterested counsel. The consul requested him to go on making the necessary arrangements for discharging his cargo, and call the following day. In the mean time the consul laid a scheme by which he should receive no little profit; although, with an appearance of disinterestedness, the cargo was to be consigned to another man. The captain had never been in the port before, could not speak a word of the language, was ignorant of the customs of the place and the state of the market, which put it out of his power to get the necessary information to guide him in transacting the business for himself. The cargo was just the one which at that moment, if properly sold, would have given the largest profit to the owners. Intelligence had been privately received by the consul the day before, which made his profit large and sure upon his own merchandise and that of the captain. This intelligence, however, he did not communicate to the captain, and his cargo went for the price which then ruled in the market! This intelligence it was the duty of the consul to communicate to the captain, and he would have done it, without doubt, had he been disinterested! He kept his own counsel, and made over ten thousand dollars by the speculation!" pp. 19-5.
Mr. Lester exposes the evils of appointing foreigners to our consulates abroad, men without any interest or regard for our institutions, or even, at times, any knowledge of them. He received from one of these consuls, not long since, a letter directed "To his Lordship, the American Consul-General of the United States and its Dependencies."
The following extract illustrates the subject most pointedly:
"For several years the consulate of Trieste has been held by an Englishman, by the name of Moore; and as he has been recently removed, and with very great propriety, I feel no delicacy in calling his name and stating a fact. While the M'Leod case was pending in this country, and a rupture with Great Britain seemed likely to take place, the governor of Malta dispatched a fleet of steamers to the straits of Gibraltar to intercept all our merchant vessels, as soon as the governor of Gibraltar received an intimation of the hostile intentions of Great Britain. At this time there were a large number of our merchantmen in the Mediterranean, and several at Trieste.
"Mr. Andrews, our consul at Malta, immediately sent dispatches to all his colleagues in that sea, communicating this important information, that all American vessels might have warning, and remain in the ports of friendly powers. Mr. Andrews had often enough before had occasion to know that no dependence could be placed upon the consul at Trieste, and he sent a dispatch to Mr. Perdicarus, consul at Athens, requesting him to embrace the earliest opportunity of giving intelligence to our merchantmen in the port of Trieste; and assigned as a reason for adopting this course, that Moore, being an Englishman, no dependence could be placed upon him in such a case. To show how well-grounded was this conviction, Mr. Moore was heard by several Americans (I was informed) to say, that Mr. Andrews did perfectly right; for he must have been a great fool to suppose I should do anything that would have a direct tendency to injure my country. The Americans appoint me consul, to do consular business in time of peace; but when war comes, that is quite another matter.'"
Mr. Lester proposes, as a remedy, the adoption of the following principles:
Consuls should be paid salaries sufficient to preserve the rank and dignity of the office; should have judicial power to settle differences between citizens abroad; should have a proper library of commerce and diplomacy, and have all their rights and duties particularly defined; should be prohibited from any commercial transactions whatever on their own account; should have no fees beyond their salary; should be divided into grades of office, consuls, vice-consuls, and consuls-general; the consul-general to have served three years in a simple consulate first, and his jurisdiction to extend over several of these consulates. Lastly, Mr. Lester would have commercial agents to gather information abroad for the use of government. At the meeting of the Zollverein, in 1843, Great Britain had thirteen agents present, and the United States had but one--he being accidentally on the spot.
We close with a paragraph which sums up the whole:
"First, there is not an American merchant, nor an American master, nor an American seaman, who is not disgusted with the wretched system, and who would not rejoice in a change.
"Second, there is not an American consul who will not join with them.
"Third, our commerce is laboring under embarrassments which can never be removed until we have organized an efficient and well-regulated Consular Establishment." p. 214.
We were at Memphis, Tennessee, when a large portion of the Southern States were present, and the whole of the Western ones. Mr. Minor, from Virginia, reported favorably on the system; and had the vote of the Convention been taken. upon the merits of the question, from everything we saw and heard there, little doubt can exist that the report would have been almost unanimously adopted. Unfortunately, however, a gentleman, Mr. Trescott, of Charleston, presented a minority report, signed by himself and three others, which disposed of the question, as we conceived, on grounds scarcely tenable. The minority were not opposed to the warehousing system, but did not think it a proper subject to come before the Convention, partaking, as it did of a party complexion, and relating more to the mercantile than to the agricultural interests. We admired the ability of our friend Mr. Trescott's report, but humbly submitted that the subject was within the legitimate sphere of the Convention, and related to the best concerns of the whole country, without any reference to its parties or its politics.
The late report of the Secretary of the Treasury, Mr. Walker, comes out nobly in advocacy of the measure, and will, we think, exert a wide influence everywhere. We have only to refer to the facts upon which he bases his views, to adopt them.
Taxation is, at best, an evil; and, as such, should be disposed so as to press lightest upon the community. Mr. Jefferson had a motto which was a good one: "Taxes, as much as is necessary, and no more; as long as is necessary, and no longer." One of the best established principles in political economy is, to levy the tax on commodities at the nearest possible period to consumption. The consumer should not have to pay the tax, and the interest on the tax, when only the former can reach the government coffers. The warehousing policy proposes to tax the consumption, only, and not the importations of the country.
Prior to 1842, we had a system of credit; but this is not to be tolerated in government finances, and it was found so. The warehouse is a necessary adjunct of cash duties. Without it, cash duties, even with the debenture feature, have the eflect of destroying a large portion of the commerce of a country. According to Mr. Walker's Report, the total amount of foreign imports re-exported, since the tariff of 1542, three years, in free and dutiable goods, is only $33,384,394, less than for any similar period since 1793, except during the war. Our re-exports have reached for three years $173,108,813 they never before fell under $41,315,705, for the same time. Our re-exports in dutiable goods for the last three years, were only $12,590,811 less than any three years since 1820. They have reached to $57,727,000, and never since 1820 fell below $14,918,444.
The warehousing system, the secretary thinks, will largely tend to build up our re-export commerce. "Under the present system," he says, "the merchant introduces foreign imports of the value $100,000. He must now, besides the advance for the goods make a further advance in cash in many cases of $50,000, for the duties. Under such a system, but a small amount of goods will be imported for drawback; and the higher the duty, the larger must be the advance, and the smaller the imports for re-exportation." He thinks that transporting goods from warehouse to warehouse, from the East to the Lakes, to Pittsburg, Cincinnati and Louisville, from New Orleans to Natchez, Vicksburg, Memphis and St. Louis, and collecting the duties at these places, will augment business and cheapen supplies-- will introduce large stocks for re-export, and greatly increase the revenue. In all of this we heartily concur.
The Chamber of Commerce of New Orleans, in a report from Messrs. W. L. Hodge, Alexandler Gordon, and J. W. Zacharie, adopted a few days ago with but one dissenting voice, thus express themselves upon this subject:
"It is a high and strong recommendation in favor of it, (the warehousing system,) that it was adopted on the most liberal and extensive footing in all those nations most celebrated for their commercial wisdom and experience. The want of it has already driven from New Orleans nearly the whole of the Mexican trade, as the merchants of that country can no longer procure here those large and varied assortments of foreign manufactures, which were always to be obtained in this city, and this lucrative want of commerce has been transferred to Havana, where a liberal warehouse system exists.
"While New Orleans retained this trade, from four to five millions of specie were annually received here from Mexico, while the amount now received is not a tenth part of that sum. Other parts of the Union have also suffered from the same cause, and it also operates injuriously as regards the produce and manufactures of the country, as these foreign purchasers always bought largely of them when making up their stock."
Great Britain has managed to take the lead of us in matters of commercial polity. She saw the evils of the system we are now suffering. One of her first writers, Dean Tucker, as early as 1745, in an essay, painted them in glaring colors. Sir Robert Walpole, twenty years before, had almost fallen a victim to an ungovernable mob, for endeavoring in some degree to rectify the abuse. In 1803, Great Britain adopted the warehousing system, and in 1833 perfected it. The result is, that Great Britain has the commercial empire of the world!
Since 1843, the matter has been much before the people of the United States. The President, in his Message of that year, strongly urged its adoption, on four grounds:
"1. That it would protect the market against redundant or deficient supplies; and that, through this influence, an approximation would be made to a steadiness and uniformity of price, which, if attainable, would conduce to the decided advantage of mercantile and mechanical operations.
"2. That without something to ameliorate the rigor of cash payment, the entire import trade may fall into the hands of a few wealthy capitalists, in this country and in Europe; that the present system may operate to the injury of the small importer, and that the rich capitalist abroad as well as at home would thus possess, after a short time, almost an exclusive monopoly of the import trade.
3. That a profitable portion of the carrying trade in articles entered for the benefit of drawback, must be seriously affected, without the adoption of some expedient to relieve the cash system.
"4. That the effect of the measure would be to supersede the system of drawback, thereby effectually- protecting the goverlment against fraud; as the right of debenture would not attach to goods after their withdrawal from the public stores."
The President's suggestion, together with the memorials of New York, Philadelphia, and New Orleans, were referred to the committee on Commerce, of which Mr. Kennedy was chairman. The committee seem to have looked upon the subject as something new and untried-something which required the utmost caution in the world and the result was, that they reported a bill favorable to the system to some extent, yet with limitations and restrictions enough to destroy all its value. The bill was not acted on. It provided for
1. The procurement of temporary warehouses.
2. The option to importers until 30th June, 1885, to introduce goods under the warehousing law, or under the old law with its debentures, &c.
3. The privilege of warehouse for two years on all kinds of merchandise, but the duties to be paid at all events in six months, whether withdrawn or not. Default of such payment, interest to be charged on duties.
Thus stood the matter. On the 12th February, 1824, the Hon. Mr. Phoenix, in the House of Representatives, ably reported on it, with an unanswerable array of facts and arguments. The whole subject is now before the country. On behalf of the South and West, we bespeak for it favor, assured as we are that prosperity will result from it to these sections, and that they will be thus elevated to a due participation in the foreign trade of the nation.
We hope to resume the subject in our next, through a commercial friend. You can support this site at no cost if you make an Amazon purchase using this link to get to Amazon: Thanks