possession a letter from a respectable merchant, well known to me, in
which he says, after complaining of the operation of the tariff of 1828,
on the articles to which it applies, some of which he had imported, and
that his purchases having been made in England before the passage of
that tariff was known, it produced such an effect upon the English
market that the articles could not be resold without loss, and he adds:
"For it really appears that, when additional duties are laid upon
an article, it then becomes lower instead of higher!" This would not
probably happen where the supply of the foreign article did not exceed
the home demand, unless upon the supposition of the increased duty
having excited or stimulated the measure of the home production.

The great law of price is determined by supply and demand. What affects
either affects the price. If the supply is increased, the demand
remaining the same, the price declines; if the demand is increased, the
supply remaining the same, the price advances; if both supply and demand
are undiminished, the price is stationary, and the price is influenced
exactly in proportion to the degree of disturbance to the demand or
supply. It is, therefore, a great error to suppose that an existing or
new duty necessarily becomes a component element to its exact amount of
price. If the proportions of demand and supply are varied by the duty,
either in augmenting the supply or diminishing the demand, or vice
versa, the price is affected to the extent of that variation. But
the duty never becomes an integral part of the price, except in the
instances where the demand and the supply remain after the duty is
imposed precisely what they were before, or the demand is increased, and
the supply remains stationary.

Competition, therefore, wherever existing, whether at home or abroad,
is the parent cause of cheapness. If a high duty excites production at