Henry Charles Carey (December 15, 1793 – October 13, 1879) was an American publisher, political economist, and politician from Pennsylvania. He was the leading 19th-century economist of the American School and a chief economic adviser to U.S. President Abraham Lincoln and Secretary of the Treasury Salmon P. Chase during the American Civil War.

Carey's central work is The Harmony of Interests: Agricultural, Manufacturing, and Commercial (1851), which criticizes the system of laissez faire capitalism and free trade expounded by Thomas Malthus and David Ricardo in favor of the American System of developmentalism through the use of tariff protection and state intervention to encourage national self-sufficiency and unity. Carey was also a critic of the practice of slavery from an economic perspective. His work on protective tariffs was largely influential on the early Republican Party and United States trade policy through the start of the 20th century, and his views on banking and monetary policy were adopted by the Lincoln administration in its issuance of paper fiat currency as legal tender.

Biography

Early life

Carey was born in Philadelphia, Pennsylvania on December 15, 1793.

thumb|left|x250px|Carey's father, [[Mathew Carey|Mathew, was a leading economist in Philadelphia.]]

His father, Mathew Carey (1760–1839), was a native of Ireland and an influential economist, political reformer, editor, and publisher whose patrons included Benjamin Franklin and the Marquis de Lafayette. He founded a publishing firm, which soon became among the leading firms in Philadelphia and the young United States. Among his many writings was Essays on Political Economy (1822), one of the earliest American treatises favoring Alexander Hamilton's idea of protection and its use in the promotion of American industry.

Carey began working at his father's firm at only twelve years old. At the firm, Carey read most of the books selected for publication, substituting for a formal college education. In 1812, he traveled to Raleigh, North Carolina as part of his business for the firm. He was elevated to partner alongside his father in 1814.

In 1819, he married Martha "Patty" Leslie, the sister of Charles Robert Leslie and Eliza Leslie. They adopted one daughter.

Publisher

In 1821, Carey became the leading partner at Carey & Lea, at the time the largest publishing house in the United States. He took little formal interest in economics, tacitly accepting the market doctrines of Jean-Baptiste Say and of his Philadelphia associates, Condy Raguet, Nicholas Biddle, and Charles Pettit McIlvaine who were active believers in free trade doctrine.

In 1824, Carey established the common method of trade sales, a medium of exchange between booksellers, which lasted through his life.

Economist

In 1835, Carey read the published 1829–30 lectures of Nassau William Senior titled The Rate of Wages and The Cost of Obtaining Money and published his refutation Essay on the Rate of Wages, with an Examination of the Differences in the Condition of the Laboring Population throughout the World. Regardless, Republicans in Pennsylvania, led by Carey, made protection the central issue of the campaign and carried the state in the fall elections. Though Abraham Lincoln, the Republican President-elect and former Whig, publicly expressed ignorance on tariffs and pledged to "endeavor to comprehend it more fully," Lincoln historian Reinhard H. Luthin claims that by the time of his election, Lincoln had almost certainly read Carey's work on the subject.thumb|left|Carey served as a trusted adviser to President [[Abraham Lincoln, Secretary of the Treasury Salmon P. Chase, and Representative Justin Smith Morrill, among others. His thinking was the basis for the Morrill Tariff and the National Banking Act of 1863.]]

Advisor to Lincoln and Chase

After his election, Abraham Lincoln sought Carey's advice on whether he should nominate Simon Cameron for Secretary of the Treasury. Lincoln initially sought Carey out for his expertise on Pennsylvania politics and Cameron's reputation for corruption, which Carey confirmed despite their prior alliance. Lincoln soon began to consult with Carey on tariff policy. At the same time, Carey backed Lincoln's alternative for Treasury, Salmon P. Chase. Though Chase did not respond to Carey's letters and had a background as a supporter of free trade, Carey preferred to persuade Chase than trust Cameron. Via a sustained correspondence through the summer of 1861, Chase and Lincoln consulted Carey on the tariff, domestic taxation, and financial matters generally. By July, Morrill reported to Carey that although "[Chase's] Philosophy is Free trade or ad valorems," he was "willing to yield" on tariff policy amid the growing cost of the American Civil War. "I think Chase, considering his antecedents, should receive generous treatment by all our friends," Morrill wrote. "He is doing the best he can practically." Carey also used his influence to secure key appointments in the Treasury Department for protectionists, including his trusted adviser Dr. William Elder as the lead tariff architect in the administration.

In the winter of 186061 amid Southern secession, Morrill and Campbell pressed tariff protection in the lame duck Congress, and Carey personally went to Washington to direct lobbying efforts. John Sherman, now serving as Chair of Ways and Means, was persuaded to the cause. With most free trade advocates leaving Congress as the result of secession, the bill passed with some amendments in the session's final days. George W. Scranton of Pennsylvania also distributed Carey's writings to all members-elect in the incoming Congress; Carey continued to influence tariff policy in Congress throughout the war, and his views remained dominant in the party long after.

National Banking Act and greenbacks

Carey's theories also influenced the National Banking Act of 1863 and the provision of greenbacks and secured bank notes.

In March 1865, Carey published a series of letters written to the Speaker of the House Schuyler Colfax during the Civil War, entitled "The Way to Outdo England Without Fighting Her". In these letters, Carey advocated the continuance of the greenback system to ensure economic sovereignty. Carey also suggested raising the reserve requirements on private banks up to 50%.

After the war, Carey publicly opposed Secretary Hugh McCulloch's proposal to contract the money supply. In a series of public letters, he accused Wall Street banks of artificially inflating the cost of capital and predicted that a swift contraction would lead to chaos, economic paralysis, and political rebellion, particularly among farmers in the West whose mortgage rates would increase. He also opposed the sale of United States bonds overseas, arguing that specie payments could not be resumed until the national debt was held by America creditors, and that payment should be made in silver as well as gold.

Later work and death

In autumn 1872, Carey was a delegate to the convention organized to write a new Pennsylvania Constitution. His commentary during the convention on banking, usury, corporations, and railroads were later published in pamphlet form.

He died at his home in Philadelphia on October 13, 1879.

A portrait of Carey painted by his brother-in-law Charles Robert Leslie is housed by the Pennsylvania Academy of the Fine Arts.

Carey elected to prestigious societies during his lifetime:

  • Elected a member of the American Philosophical Society in 1833
  • Elected an Associate Fellow of the American Academy of Arts and Sciences in 1863
  • Elected a foreign member of the Royal Swedish Academy of Sciences in 1868