By Gerald Therrien
While, in many history sources, Mathew Carey is described as a ‘Jeffersonian republican’, the question arises, how did a supporter of Jefferson – the opponent of ‘federalist’ Alexander Hamilton, become the father of the ‘American System’, the defender of Hamiltonian economics and the opponent of the British free-trade policies of Adam Smith? In his own words, I will briefly try to show how this actually happened.
Mathew Carey arrived in Philadelphia in 1784, having to flee from Ireland to avoid arrest and imprisonment by the British Government. With $400 given to him by Gilbert Lafayette, he started a book store and publishing shop. He became a strong supporter of the adoption of the United States Constitution and a strong supporter of Alexander Hamilton and the ‘federalists’, until the fight over Jay’s treaty in 1795. Carey felt the treaty was pro-British, and there probably wasn’t anyone on earth who disliked the British Empire more than he did. His opposition to Jay’s treaty changed his support from the ‘federalists’ to the ‘republicans’, although he still favoured Hamilton’s economic policies – as can be seen in 1810, when he become a leading voice in favour of the renewal of the charter for the Bank of the United States.
From the Autobiography of Mathew Carey (Letter XIII), that originally appeared in the New England Magazine:
‘In the year 1810, the apple of discord was thrown among the citizens of the United States by the question of a renewal or non-renewal of the charter of the Bank of the United States, which was to expire on the third of the ensuing March; the discussion of which was carried on with great acrimony. I took a deep interest in the question, and withdrew myself from the care and attention to my business for three months, devoting myself with all my zeal and energy to the support of the renewal, anticipating, as I did, the disastrous consequences that were likely to result from the host of State Banks, for which the dissolution of that institution would afford a plea or pretext – the probable depreciation of their paper – and ultimately the suspension of specie payments. The great body of the democrats were opposed to the renewal; and of the party I stood alone in this city; was regarded by many as having abandoned them; and made myself hosts of enemies among my quondam friends.
I wrote a series of essays, in which I endeavored to disprove the reasons adduced in favor of the non-renewal, and to place in the strongest point of light the arguments on the opposite side of the question …
One morning towards the close of the session, as I lay on my bed, pondering on “the prospects before us”, I was suddenly struck with the idea, that, being regarded as an ultra-democrat, and being intimately acquainted with some of the most influential members of the Pennsylvania delegation, who would probably place some reliance on my judgement, as having been some years a Bank director , and long engaged in extensive trade, I might be able to convince them of the danger of a non-renewal.
Without a moment’s delay I hurried out of bed; and having signed some checks and notes, and left directions for the management of my business, I was in less than an hour and a half in the stage on my way to Washington, without consulting an individual … Finding that in the course of the debates some most absurd assertions and assumptions were presented, I wrote and had printed a pamphlet, entitled “Desultory Reflections on the ruinous consequences of a non-renewal of the Charter of the Bank of the United States” … But all arguments and facts on the subject were in vain. The Bill for a renewal was indefinitely postponed on the 24th of January 1811, in the House of Representatives, and in the Senate rejected on the 20th of February, by the casting vote of the Vice-President, George Clinton, on the ground of unconstitutionality…’
The defeat of the bill to re-charter the Bank (by one vote!) removed Carey as a devout member of the ‘republicans’, and it now freed him from all the strife of parties and factions – and that would turn out to be a true blessing.
During the War of 1812, many New Englanders opposed the war; opposed sending the state militias to fight against the British, were threatened with a bill for conscription, and called for a convention to discuss the possibility of seceding from the Union. In the middle of this crisis, could it be possible ‘that a man in private life, wholly without influence, unsupported by party or by family connexions, could calm the raging waves of faction which threatened shipwreck to the vessel of state’?
The Olive Branch
In 1814, while not looking to the interest of any political party, but only to the interest of the nation, Carey would write ‘The Olive Branch, or Faults on Both Sides, Federal and Democratic. A Serious Appeal on the Necessity of Mutual Forgiveness and Harmony’.
From the Autobiography of Mathew Carey, Letter XXIX:
‘The publication of the Olive Branch was one of the most important incidents of my life … The lawless and outrageous depredations on our commerce, by the belligerents, most of which, under pretexts the most fallacious, violated every principle of honor, honesty, justice and international law, had divided the people of the United States into two hostile parties, by which, as is the case in times of faction in all countries, the solid interests of the nation were often in some degree lost sight of.
It was on the one side asserted that Mr. Jefferson, and the administration generally, were in the interests and in the pay of the French Government – and this was as firmly believed by the mass of the party whose leaders had promulgated the idea, as if it had been judicially proved. On the other side it was confidently asserted, and as implicitly believed, that the opposition was so blindly devoted to the interests of Great Britain, that they were ready to sacrifice those of their own country in her favour … I had watched for years the progress of this excitement in New England with the most intense anxiety. It foreboded, in my estimation, civil war and all its horrors. That we were on the verge of it can scarcely at this moment be doubted by those who have a perfect recollection of the perturbed state of the public mind at that period …
In the month of September 1814, in a moment of ardent zeal and enthusiasm, I was seized with a desire of making an effort, by a candid publication of the numerous errors and follies on both sides, (to call them by no stronger names), to allay the public effervescence and calm the embittered feelings of the parties. The idea was truly Quixotic, which nothing but the excited state of my feelings could have suggested …
It was after the shameful defeat at Bladensburg, and the Vandalic conflagration at Washington. The stoutest hearts felt qualms, and were lost in suspense as to the fearful result of such an awful state of things. Those were really “times that tried men’s souls” … But great as was my despondency, I felt dissatisfied with what I had written – tore the pages – and, for some days, relinquished the idea of pursuing the subject.
Meanwhile three events occurred, admirably calculated to raise the spirits of our citizens generally, viz; the victory of Commodore McDonough, the defeat of Prevost at Plattsburg, and that of Ross in his attempt on Baltimore. These exhilarating circumstances dispelled the gloom of the public mind; removed the despondence by which I had been borne down; and, on the 18th of September, commenced anew, on a different plan …
The edition was sold out in a few weeks … I was preparing for a new edition, when the thrice-welcome news of peace arrived – which, I thought, would render a new edition unnecessary. I was much mistaken. The demand increased daily, and I need not say that I had every motive to induce me to supply it … in three years and a half it went through ten editions. The whole number sold was above 10,000 copies, a greater sale probably than any book ever had in this country, except some religious ones.’
Soon, in February 1815, the Senate would ratify the Treaty of Peace and Amity between His Britannic Majesty and the United States, ending the war of 1812-1814. But, for an American economic recovery – to repair the collapsed currency, to build the needed roads and canals, and to protect the domestic industries from the ravages of British free-trade, the battle would now begin.
On December 5th 1815, President James Madison sent a Message for the opening of the 14th Congress, stating that because of ‘the embarrassments arising from the want of an uniform National currency’ and of the need for ‘the revival of the public debt’, ‘the probable operation of a National Bank will merit consideration’; that ‘in adjusting the duties on imports, to the object of revenue, the influence of the tariff on manufactures will necessarily present itself for consideration’; and that ‘among the means of advancing the public interest, the occasion is a proper one for recalling the attention of Congress to the great importance of establishing throughout our country the roads and canals which can be best executed under the national authority’.
A National Bank
What was being proposed ‘for consideration’ was – a National Bank, a protective tariff, and internal improvements!!! While realizing the national economic crisis that was created both during and after the war, Madison however, was not about to adopt a Hamiltonian solution – but a Jeffersonian version of one.
Although Madison hadn’t agreed to the adoption of the First National Bank – but had agreed to a compromise whereby, in exchange for the location of the Capital to the District of Columbia, he and Jefferson accepted Hamilton’s proposal for the federal government assumption of the States’ war debt – since these debts subsequently became the basis of the First National Bank, he could un-hypocritically propose the ‘consideration’ of a Second National Bank.
The effects on the American economy, during the war of 1812-1814, had proved Carey to have been right, and he became one of the leading pamphleteers in favour of the second Bank of the United States – to be established by some of the very men who had defeated the first National Bank, including Henry Clay.
In 1810, Clay had been appointed to the United States Senate by the Kentucky Legislature, and ‘he was induced to oppose the renewal of the charter to the old Bank of the United States by three general considerations. The 1st was that he was instructed to oppose it by the Legislature of the State … although the two late Senators from this State, as well as the present senators, voted for a national bank. The next consideration … was that he believed that the corporation had, during a portion of the period of its existence, abused its powers, and had sought to subserve the views of a political party … A 3rd consideration … was, that as the power to create a corporation, such as was proposed to be continued, was not specifically granted in the Constitution, and did not then appear to him to be necessary to carry into effect any of the powers which were specifically granted, Congress was not authorized to continue the bank’.
Clay supported the bill for the Second National Bank because ‘a general suspension of species payment had taken place, and this had led to a train of consequences of the most alarming nature … about 300 banking institutions, enjoying in different degrees the confidence of the public, shaken as to them all, under no direct control of the general government, and subject to no actual responsibility to the State authorities. These institutions were emitting the actual currency of the United States; a currency consisting of a paper, on which they neither paid interest nor principal, while it exchanged for the paper of the community, on which both were paid … they were no longer competent to assist the treasury in either of the great operations of collection, deposit, or distribution of the public revenues … Considering, then, that the state of emergency … threatened general distress, if it did not ultimately lead to convulsion and subversion of the government; it appeared to him to be the duty of Congress to apply a remedy, if a remedy could be devised. A national bank … was proposed as that remedy.’ [Address to his Constituents, June 3rd 1816]
While Clay had voted against the renewal of the First National Bank, but voted in favor of the Second National Bank, his reasons for supporting the Bank hadn’t changed – as can been seen in his speech on Domestic Manufactures on April 6th 1810, and his speech on Internal Improvements on February 4th 1817.
The Secretary of the Treasury, Alexander Dallas, sent a report to Congress on a plan for a National Bank.
After various amendments – to reduce the capital of the Bank, to stop Government subscription to the Bank, to stop Government appointment of five Bank directors, and to prohibit a branch unless accepted by that State’s law – were defeated, the bill passed the House by a close vote (80 to 71), and the Senate (22 to 12).
During an earlier 1806-07 session of Congress, resolutions were introduced for internal improvements:
– for a road from Cumberland, Maryland to the State of Ohio (a bill was passed to appropriate $250,000),
– for a canal at the Ohio rapids (the resolution was introduced by Senator Clay, and a bill was passed to appoint 3 commissioners to examine its practicality), and,
– for the Chesapeake and Delaware Canal (a bill was debated but postponed until the next session).
[Note: Thomas Gilpin Sr. (along with Dr. Benjamin Franklin) had been part of a committee of the American Philosophical Society in 1769, that was set up to study a canal to link the Chesapeake and Delaware bays. Joshua Gilpin would become a promotor, and a director of the Chesapeake and Delaware Canal Company in 1803. William Gilpin was the grandson of Thomas Sr., and the son of Joshua.]
It was during the debate on the Chesapeake and Delaware canal, that Senator John Quincy Adams proposed a resolution – ‘that the Secretary of the Treasury be directed to prepare, and report to the Senate at their next session, a plan for the application of such means as are constitutionally within the power of Congress, to the purposes of opening roads, for removing obstructions in rivers and making canals; together with a statement of the undertakings of that nature now existing within the United States, which as objects of public improvements, may require and deserve the aid of Government’.
Although Adams’s resolution was negatived, it was then re-introduced by Senator Thomas Worthington (Ohio) with an addition – that ‘and, also, a statement of works of the nature mentioned which have been commenced, the progress which has been made in them, and the means and prospect of their being completed; and all such information as, in the opinion of the Secretary, shall be material, in relation to the objects of this resolution’. The resolution passed by a vote of 22 to 3 on March 2nd 1807, and the Secretary of the Treasury, Albert Gallatin, would present his report the following next year on April 6th 1808. Although the report is called Gallatin’s Report, it should really be called the Latrobe Report.
In 1804, Benjamin Latrobe had been selected to be the engineer to design and construct the Chesapeake and Delaware Canal, until it was stopped, due to lack of funds in December 1805. In response to the petition to Congress from the Joshua Gilpin and the Chesapeake and Delaware Canal Company, for a land grant in order to continue the work, came that bill, and subsequently, that resolution of Adams and Worthington.
From ‘Benjamin Henry Latrobe and the Revival of the Gallatin Plan of 1808’, by Lee Formwalt:
‘Gallatin sent out questionnaires to custom collectors throughout the United States concerning the canals and turnpike roads which had been built, were being constructed, or were still in the planning stages in their respective districts. In addition, he asked Robert Fulton and Benjamin Latrobe for more general information of roads and canal … Not only did Latrobe compose a thirty page essay on canals and river improvements in America but he met with Gallatin at least every other day during March 1808 when the secretary was sorting out the masses of information that had poured into Washington from canal and turnpike companies across the country and compiling his report to the Senate.’
Adams reported the printing of 1200 copies of the report, including the essays of Latrobe and Fulton.
During the debate on the National Bank, Bolling Hall (Georgia) proposed a resolution to apply ‘the bonus arising to the Government from the incorporation of the Bank to the internal improvement of the country’. John Calhoun (South Carolina) supported the idea, but was afraid that its adoption ‘might drive off some who would otherwise support the bill – unfortunately for us, there was not a unanimous feeling in favor of internal improvement, some believing this not a proper time to commence that work; and such a provision might deprive the bill of some friends, which at present was the main object of his solicitude’. Hall ‘thought this the most proper moment for commencing the great work of internal improvement; but if he thought his amendment would draw off any support from the bill, he would not urge it’.
But, in the next session of Congress, Calhoun would propose a bill (based on Hall’s amendment) to establish a ‘permanent fund for internal improvements’ from the Government’s share of the dividends of the National Bank and the bonus for its charter. Clay noted that ‘he had long thought that there were no two subjects which would engage the attention of the National Legislature more worthy of its deliberate consideration, than those of internal improvements and domestic manufactures’. The bill was narrowly passed by the House, 86 to 84, and by the Senate 20 to 15.
Previously, in President Jefferson’s Message to Congress (November 8th 1808) he stated his economic outlook that ‘the probable accumulation of the surpluses of revenue beyond what can be applied to the payment of debt, whenever the freedom and safety of our commerce shall be restored, merits the consideration of Congress … shall it not rather be appropriated to the improvements of roads, canals, rivers, education, and other great foundations of prosperity and union, under the powers which Congress may already possess, or such amendment of the Constitution as may be approved by the States?’
Since Jefferson had proposed that in times of peace, and once the public debt was paid off, a surplus could be spent on internal improvements, so then Madison would only venture as far as Jefferson’s interpretation of the Constitution would allow him to go.
On the very last day of his presidency, March 3rd 1817, Madison vetoed the bill for the fund for internal improvements, on the grounds that it was unconstitutional – that ‘… “the power to regulate commerce among the several states” cannot include the power to construct roads and canals, and to improve the navigation of water-courses, in order to facilitate, promote, and secure such a commerce … “to provide for the common defence and general welfare” would be contrary to the established and consistent rules of interpretation … (and) would have the effect of giving to Congress a general power of legislation, instead of the defined and limited one hitherto understood to belong to them.’
The House voted 60 to 56 to support the bill – but it wasn’t enough to over-ride the President’s veto.
[Note: The federal funding and promotion of needed internal improvements to provide for the general welfare of the nation, would have to await the election of President John Quincy Adams.]
A Protective Tariff
Although Hamilton’s Report had proposed bounties as well as tariffs to protect new manufactures, Madison would propose the ‘consideration’ of a tariff for manufactures – but only as ‘an object of revenue’, in keeping with the Jeffersonian dogma, concerning which proportion of revenues came from direct taxes and which came from duties on tariffs, while bearing in mind that paying off the public debt was paramount.
Carey would describe the problem in the country with this type of thinking concerning a protective tariff. From Letter XXII:
‘From the commencement of our Government, a strong jealousy prevailed of the protection of manufactures, fostered and encouraged by those citizens engaged in commerce, particularly those connected with the importation of British manufactures, whether Americans or British agents. The latter description of persons were indefatigable in their efforts to promulgate those doctrines, so essentially promotive of their dearest interests. The leading papers in the commercial cities also took this ground. The general prevalence of these opinions is not, therefore, wonderful. Neither pains nor expense were spared to impress on the public mind, that the national prosperity depended almost altogether on commerce; that the protection of manufactures by duties on imposts was impolitic and unjust; that it sacrificed the interest of the many for the benefit of the few, by obliging the mass of our citizens to purchase domestic manufactures at a great advance, beyond the prices at which similar articles could be had from abroad; and that the imposition of duties on imports should be confined to the mere raising of revenue to meet the wants of Government …
So entirely and shamefully were we dependent on foreign nations for most essential necessities, that we were unable, during the operation of the nonintercourse law, to supply the Indians with blankets, due to them by treaty stipulation, to the amount of about $6,000, insomuch that the Secretary of War actually applied to Congress to modify the law, so as to enable him to import the blankets from Great Britain! A proper sequel to this miserable state of things is the important and disgraceful fact, that our soldiers suffered more, at some stages of the late war, by deficiency of clothing, than from the arms of the enemy.’
Secretary of the Treasury Dallas sent to Congress his report ‘on the subject of a general tariff of duties proper to be imposed on imported goods, wares, and merchandise’ that proposed –
‘1st. the object of rising, by duties on imports and tonnage, the proportion of public revenue which must be drawn from that source; 2nd. the object of conciliating the various national interests, which arise from the pursuits of agriculture, manufactures, trade, and navigation’; and 3rd. the object of rendering the collection of the duties convenient, equal, and certain.’
In 1812, all duties on imported goods were doubled – until one year after a peace with Great Britain.
For example, on the duty for imported woollen and cotton manufactures, while Dallas had recommended a ‘conciliating’ duty of 33 1/3%, the Committee of Ways and Means lowered the duty to 25% when it brought in the bill. Clay moved an amendment to increase the duty back to 33 1/3% on imported cotton, ‘to try the sense of the House as to the extent to which it was willing to go in protecting domestic manufactures’ and he spoke in favor of ‘a thorough and decided protection of ample duties’, but his motion was defeated (by 51 to 43). Clay then proposed to raise the duty from 25% to 30%, speaking on ‘the expediency of affording protection to our manufacturers’, and this motion carried (68 to 61).
But even this ‘compromise’ was opposed in Congress – by the spokesmen of the New England shipping interests, and of the Southern cotton and slave interests – both of whom preferred the policy of free-trade.
After much debate, Daniel Webster (New Hampshire) proposed to limit the 30% duty on imported cotton to only 2 years, a proposal from Clay of 3 years was defeated, and it was then agreed to a limit of 30% for 2 years, 25% for 2 years, and then 20%.
William Lowndes (South Carolina) next proposed to reduce that to simply 25% for 2 years and then to 20%, but Samuel Ingham’s (Pennsylvania) proposal of 25% for 3 years, 22 ½ for 1 year, and then 20% was agreed to.
Next, Martin Hardin (Kentucky) again proposed 25% for 2 years and Timothy Pickering (Massachusetts) argued that even that was unnecessary, but the House finally agreed to Hardin’s motion (84 to 60).
Thomas Gold (New York) asked ‘will you uphold the present manufactures of woollen and cotton, against the inundation of foreign fabrics, co-operating with the unexampled price of cotton, to their destruction?’ and he quoted from ‘Secretary Hamilton, one of the brightest stars in our political hemisphere, in his report to the House of Representatives, on manufactures, in the year 1791’. Samuel Smith (Maryland) then proposed a duty of 25% for 3 years, and the House voted narrowly, 79 to 71, in favor.
An approach based on the principles as outlined in Secretary of the Treasury, Alexander Hamilton’s 1791 Report on Manufactures, would have placed a high tariff on all imported British (East India) cotton fabrics, in order to encourage and to protect the American cotton manufacturers (and, even to encourage the growth of cotton manufactures in the southern States!) – and thus, would have created a domestic market for the cotton produced by the southern States, so that the American cotton growers would not be entirely dependent on the foreign British market.
But this ‘conciliating’ compromised tariff left the manufacturers defenceless against the policies of the British Empire, and when the Empire cut back on its purchases of cotton from the United States, and collapsed the price, the great panic of 1819 set in.
From ‘1816 – America Rising’, by C. Edward Skeen – Chapter 4, A Tariff and a Bank:
‘The British were well aware of the growth of American manufacturing in the post-war period, and with large inventories and a desire to re-establish their former levels of export of manufactured goods to the United States, began emptying their warehouses and undercutting the prices of American manufacturers. Cheaper British goods, particularly textiles, led to demands by industrialists for congressional action to restore a balance of competition. On the other hand, Southern farmers, buoyed by rising cotton prices, which reached 29 cents a pound in 1816, were expanding cotton farming and were content to continue the status quo. New England shipping interests engaged in the carrying trade were also loath to engage in restrictive systems or commercial warfare.’
Carey writes about the outcome of the ‘destructive tariff’ in his Letter XXIV:
‘At length peace came “with healing on its wings”. To all classes except to the manufacturers, who were devoted to destruction by an infuriate spirit of hostility which was grounded on a most calumnious charge of extortion, because the prices of various articles of domestic production, more especially woollens, had been raised during the war. To render this envenomed and delusive cry of extortion more criminal, and (if it had nor proved so fatal) more ludicrous, it is to be remarked, that in the year 1816, in which the welkin rang with it, and in which a destructive tariff was enacted, the great staples of the country, produced by the very men who rang the changes on the extortion of the Manufacturers, rose enormously …
The manufacturers had been among the most zealous and ardent supporters of the war. There was scarcely a man among them that was disaffected to the cause of their country. But had they all been traitors, as black and fiendish as Arnold, a fouler spirit could not have prevailed against them, than was manifested by the Congress of 1815-16. They were the devoted victims of the grossest prejudices. Of those who felt this spirit most virulently, Gov. Wright of Maryland and John Randolph of Roanoke, were the most conspicuous … John Randolph with his usual vehemence gave a solemn pledge, that he would never wear, nor allow any of his people to wear, a single article of American Manufacture.
The illiberal spirit had ample room for display in the discussions of the details of the tariff … the duties were reduced on no less than forty-four articles, from 2 to 33 per cent. Thus, in an evil hour, were blasted the hopes, the happiness, the fortunes of thousands of individuals who, seduced by the delusive expectations held out by the Government had devoted their fortunes, and their time, and their talents, to furnish their country with the necessaries and comforts of life, at a period when she was debarred of supplies of many of them from the old world. And thus were blasted sources of national wealth and prosperity ….
It was vainly expected that the generality of our citizens would profit by these reduced duties; that they would thereby be able to procure foreign manufactures on easy terms, and secure themselves from the extortion of the manufacturers. Never was there a much more miserable error, and never was illiberality and oppression much more severely or justly punished. Great numbers of the Manufacturers and their operatives migrated into the country; the former to commence farming. And the operatives to become field laborers.
Desolation spread over the face of the land in the manufacturing and farming portion of the nation. The cotton planters, who almost to a man had voted against protection, were soon involved in the general distress. The depression of farming, by the conversion of so many manufacturers into farmers, thus rendering those rivals who had been customers, induced numbers of farmers who had migrated to the southwestern States, to commence cotton planting, and so far glutted the market … thus increasing the quantity nearly 50 per cent. The consequence was a most ruinous reduction of price, which produced nearly as much distress in the cotton-growing States as had taken place among the manufacturers and farmers, and ruined a large portion of the merchants engaged in cotton shipping. Thus the poisoned chalice which the cotton planters had drugged for the ill-fated manufacturers, was, by a just dispensation, returned to their own lips.’
Such was the desperate state of the country, and the inadequate understanding of a large number of the members of Congress and of the population, that Carey now again began organizing and writing in defence of the nation, and his offensive against free-trade, proceeding ‘to investigate the real causes of the distress’.
From Letter XXV:
‘At the crisis of the affairs of the country … there was a small society formed in Philadelphia, entitled the Philadelphia Society for the Promotion of National Industry. There were only ten members – James Ronaldson, Wm. Young, Thomas Hulme, Samuel Jackson, Thomas Gilpin , John Melish, James Cutbush, Joseph Nancrede, Joseph Siddall, and M. Carey. The object of the society was to advocate the protection of national industry generally, but more particularly of manufactures, as perishing for want of protection.’
‘It is due to myself to state, that in the modification of the Tariff, I had no personal interest whatever, to the amount of a dollar … I nevertheless entered on the defence of the protecting system, with as much zeal and ardour as if my life and fortune were at stake …
I had read but little on the subject, and had no recollection of having ever previously written a line on it. I had once taken up Smith’s Wealth of Nations, with an intention of studying it; but found it so dry, so abstruse, and so completely filled with what I regarded as extraneous matter, that I laid it down without an intention of resuming it. And when the society was formed, I had no idea of writing essays on a subject which I had so little studied. I undertook to collect a few maxims on political economy to form a manual for the guidance of our statesmen in the labyrinth in which that science is involved. And as Adam Smith was the most popular writer on the subject, I began with him. To my great surprise I found a gross contradiction on a most vital point, which nullified the great staple of his system …
These positions, absurd, futile, and untenable as they are, form the basis of the Wealth of Nations. To a person wholly unbiassed by prejudice, it must be a matter of astonishment, how a work, resting on such a sandy and miserable foundation, could have obtained, and still more, have so long preserved, its celebrity. The monstrous absurdity of these doctrines, and the facility with which they might be refuted, induce me to enter the lists against this Goliath, with the sling and stone of truth …’
From Letter XXVI:
‘When I commenced writing on this all-important topic, I did not intend to go beyond the two first essays … but these two were received with such approbation, and were so generally copied into the newspapers north of the Potomac, that I was encouraged to proceed, and wrote nine more, which were as favourably received and had as general a circulation, as the first two. They were originally published by the Society in pamphlet form … Of the essays, two, Nos. 12 & 13, were written by Dr. Samuel Jackson.’
And so, Carey began his attack on the writings of Adam Smith, the promotion of the ideas of Alexander Hamilton, and the education of the population in what would become known as the ‘American System’.
From the preface of the ‘Addresses of The Philadelphia Society for the Promotion of National Industry’:
‘… The advocates of the system of Adam Smith ought to be satisfied with the fatal experiment we have made of it. It is true, the demands of the treasury have not allowed us to proceed its full length, and to discard import duties altogether. But if our manufactures are paralized, our manufacturers ruined, and our country almost wholly drained of its metallic medium, to pay for foreign merchandize, notwithstanding the duties imposed for the purpose of revenue, it is perfectly reasonable to conclude, that the destruction would have been more rapid and complete, had those duties not existed …
We flatter ourselves that the most decided advocate of the doctor’s system will admit, on calm reflection, that these maxims are utterly destitute of even the shadow of foundation.
We urge this point on the most sober and serious reflection of our fellow-citizens. It is a vital one, on which the destinies of this nation depend. The freedom of commerce, wholly unrestrained by protecting duties and prohibitions, is the keystone of the so much extolled system of the doctor, which, though discarded, as we have stated, in almost every country in Europe, has, among our most enlightened citizens, numbers of ardent, zealous, and enthusiastic admirers. We have essayed it as far as our debt and the support of our government would permit. We have discarded prohibitions; and on the most important manufactured articles, wholly prohibited in some countries, and burdened with heavy prohibitory duties in others, our duties are comparatively low, so as to afford no effectual protection to the domestic manufacturer. The fatal result is before the world – and in every part of the union is strikingly perceptible…
This is the basis on which Adam Smith’s system rests, and being thus proved radically and incurably unsound, the whole fabric must crumble to ruins.
There is one point of view in which if this subject be considered, the egregious errors of our system will be manifest beyond contradiction. The policy we have pursued renders us dependent for our prosperity on the miseries and misfortunes of our fellow-creatures! Wars and famines in Europe are the keystone on which we erect the edifice of our good fortune! The greater the extent of war, and the more dreadful the ravages of famine, in that quarter, the more prosperous we become! Peace and abundant crops there undermine our welfare! The misery of Europe ensures our prosperity – its happiness promotes our decay and prostration!! What an appalling idea! Who can reflect without regret on a system built upon such a wretched foundation!
What a contrast between this system and the one laid down with such ability by Alexander Hamilton, which we advocate. Light and darkness are not more opposite to each other. His admirable system would render our prosperity and happiness dependent wholly on ourselves. We should have no cause to wish for the misery of our fellow men, in order to save us from the distress and embarrassment which at present pervades the nation. Our wants from Europe would, by the adoption of it, be circumscribed within narrower limits, and our surplus raw materials be amply adequate to procure the necessary supplies.
Submitting these important subjects to an enlightened community, and hoping they will experience a calm and unbiassed consideration, we ardently pray for such a result as may tend to promote and perpetuate the honour, the happiness, and the real independence of our common country.’
I hoped to have shown, in Mathew Carey’s own words, that contrary to some misleading sources, Carey didn’t change – instead, he changed others. From his youth, fighting for the independence of Ireland from the British Empire, to his adult life in the United States, fighting for America’s independence from the same British Empire, he never changed his ideal – he simply got better at it.
The effect of Carey’s work and writings, to educate the American population in understanding the basics of the ‘American System’, can best be summed up in the announcement of a young man, of his intention to run for public office, for a seat in the state legislature:
‘I presume you all know who I am. I am humble Abraham Lincoln. I have been solicited by many friends to become a candidate for the Legislature. My politics are short and sweet, like an old woman’s dance. I’m in favor of a national bank. I’m in favor of the internal improvement system and a high protective tariff. These are my sentiments and political principles.’
 For three years, 1802-1805, Carey was elected to be a director of the Bank of Pennsylvania.
 Thomas Gilpin was the brother of Joshua, and the uncle of William Gilpin.
Make a one-time donation
Make a monthly donation
Make a yearly donation
Choose an amount
Or enter a custom amount
Your contribution is appreciated.
Your contribution is appreciated.
Your contribution is appreciated.DonateDonate monthlyDonate yearly