DOES PROTECTION PROTECT ? AN EXAMINATION OP THE EFFECT OF DIFFERENT FORMS OF TARIFF UPON AMERICAN INDUSTRY. UJ I BY W. M. GROSVENOR, EDITOB OF THE ST. LOUIS DEMOCRAT NEW YORK: D. APPLETON AND COMPANY, 90, 92 & 94 GEAND STEEET. 1871. ENTERED, according to Act of Congress, in the year 1870, by D. APPLETON & CO., In the office of the Librarian of Congress, at Washington. To THE AMERICAN FREE TRADE LEAGUE, t Whose earnest efforts to diffuse information have awakened multitudes to examine the results of the system of protection, and, having examined, to perceive the failure of that system, and whose ready contributions have secured a wide circulation for the reports of Commissioner Wells and for the writings of other inquirers like myself, this book is dedicated with great respect. CONTENTS. PAGE INTKODUCTIOX, 7 CHAP. I. NATURE AND OBJECT OF THE INQUIRY, . . . . 11 II. PROTECTION DOES NOT PREVENT OVERTRADING, . . .13 III. CURRENCY AND IMPORTS, 25 IV. HIGH TARIFFS CHECK EXPORTS, 45- Y. SHIP-BUILDING, ........ 61 VI. INTERFERENCE WITH NATURAL LAWS, .... 68 VII. POPULATION AND WEALTH, 79 VIII. AGRICULTURE, 85 IX. MECHANICS AND NATURAL MANUFACTURES, . . . 114 X. THE COTTON MANUFACTURE, 122 XI. THE WOOLLEN MANUFACTURE, 135 XII. THE WOOL-GROWER, 157 XIII. IRON HISTORY OF THE IRON MANUFACTURE PRIOR TO 1833, 168 XIV. IRON THE COMPROMISE TARIFF, 188 XV. IRON THE TARIFF OF 1842, 202 XVI. IRON HISTORY SINCE 1846, 223 XVII. ARE MONOPOLIES BLESSINGS ? 239 XVIIL THE SALT MANUFACTURE, 252 XIX. SKILLED LABOR PROTECTS ITSELF, 262 XX. SHALL OUR LABOR BECOME PAUPER LABOR ? . . . 267 XXL WAGES AND PRICES IN 1845, 284 XXII. PROTECTION AND NON-PROTECTION CONTRASTED, j -. . 303 XXIIL THE PRESENT SITUATION, .311 XXIV. THE LABOR BAROMETER, . . . . . . 335 XXV. CONSUMPTION, 345 XXVI. CONCLUSION, 35T INDEX OF STATISTICAL TABLES, 363 IN T E O D II T I O m ; ;.; :, ; TEN years ago a Representative in Congress, when called to ac count by his constituents for his vote on a tariff bill, replied, " I don t know any thing about the tariff, and I never pretended to." Yet this was a member from one of the largest commercial cities in the country, and nearly half of his constituents, by their votes soon afterward, testified that they preferred as their Representative a man who knew nothing about the tariff. It has been fashionable to know nothing about this question. For nearly twenty years this country has been engaged in solving another problem, and men have been preferred for all positions, from lowest to highest, for qualifications quite distinct from those which enable a man to vote intelligently on a tariff bill. It has been fash ionable, but it will be so no longer, to treat the tariff question as of lit tle consequence. Everywhere men now begin to realize that business, industry, and individual well-being, are materially affected by legis lation, and demand of each Representative not only the devoted loyalty of a patriot and the sincere purpose of an honest man, but the ability and the disposition to so shape legislation as to promote national prosperity. Labor conventions assemble ; powerful leagues are formed in cities and States ; audiences settle to the deepest at tention whenever the speaker touches upon the method of taxation ; official documents, crowded with statistics once thought dry, are sought for with unwonted eagerness ; and public servants will hence- 8 INTRODUCTION. forth need not only opinions but reasons for them. If any politicians fancy that a few well-turned phrases, or, at most, a few fragments of fact picked hurriedly from the ruins of theories overturned by the war, will serve their turn because " the people know nothing about this question, and never will understand it," they will surely learn their mistake. In some degree, the people have learned the respon sibility which self-government imposes ; they begin to see that men do not really govern themselves who do not understand the ques tions qpoil tv.ilk h ;they are voting, and they feel that, if they are to be lit to govern themselves, they must at least be able to determine \ \ t ! whether tfce $mccth speech or the spicy article contains fact or fal lacy, sense or nonsense. Hence, from all quarters there is heard a demand for information upon this question, and those who examine it in earnest find it neither an inscrutable mystery nor an uninterest ing topic. I feel sure that my own experience has been that of many others. Born of Whig parents, trained under influences wholly fa vorable to the system of protection, and thrown, when I began life for myself, into editorial association with an able and experienced advocate of that policy, I rather borrowed than formed an honest be lief that it was the wisest, and joined with sincerity, if not with clear understanding, in efforts to secure " protection for American indus try." When the war closed, and we returned to peaceful pursuits, reconstruction engrossed attention. But, in the readjustment of in dustry, and in legislation since the war, prompted by frequent ap peals by those interests which had been most favored, I saw reason to doubt whether the trial of the protective system had entirely jus tified the anticipations of its advocates. It seemed to me strange that, if protection had the desired effect, favored interests should be constantly demanding more protection, and I began to look into the question for myself. These pages are the result, and they are pub lished in the hope that in some measure they may shorten the labor or aid the judgment of others who are honestly seeking to under stand the tariff question. It has not been my purpose to assail any theory, to defend any INTRODUCTION. 9 theory, or to set up any theory of my own. If any new idea is advanced, it is one which the facts have suggested. My object has been to ascertain facts. Having been somewhat familiar with writ ings of advocates and opponents of protection, I have been often annoyed at the incompleteness of the facts presented by each. When Prof. Perry exhibited a specimen of cloth, saying, " Duty eighty per cent. ; excluded," I was hungry to know what a similar cloth of American manufacture cost now and under low duties. When Mr. Greeley stated that a yard of some woollen cloth cost not more in gold in 1869 than did the same quality in 1860, 1 did not dis pute his fact, but regretted that he had not also stated how much the material cost per pound, how many pounds were used per wrd, or how much similar cloth cost in other countries in 1860 and in li given only one fragment of a fact ; it seemed a pity tl given the whole fact. These morsels of information 01 but did not satisfy the appetite. With rare exceptions, to start with a theory fully formed, and to pick out here and there such facts as would support it, but did not give complete colloca tions of facts needed to decide questions at issue. Many honest de baters on either side seemed to have formed their opinions before they began to ascertain the facts. Now, a fixed theory possesses a more than magnetic power of drawing to itself congenial facts, and repelling all others. This world has all sorts of facts in it, and the man who searches with a fixed idea in his head will always find facts to fit that idea. In questions of political economy, this method may be called the seductive and that science demands the inductive. He who would arrive at truth must invite all facts, and be content to take such theories as they may bring with them. I have honestly endeavored to follow this method ; to obtain full records bearing upon each point of inquiry, and to present them with such sugges tions as the facts themselves seem to warrant. I need not say that the information gathered is far less complete than I wish. To those who have had experience of the difficulty of collecting statistics, who know what strange contradictions occur be tween authorities deemed most reliable ; who have spent days in 10 INTRODUCTION. searching old pamphlets or musty files for a single item, I need not apologize for imperfections. It should, however, be stated that this work was substantially completed and prepared for publication early in January, 1870, and, though other duties delayed arrangements for publication several months, I have not had time to gather and add statistics of later date than January 1st. DOES PKOTECTION PEOTECT? CHAPTER I. NATTJEE A1O> OBJECT OF THE INQUIRY. are living under a high " protective tariff." What does the phrase mean ? The theory of its advocates is that the industry of this country cannot prosper in competition with " the pauper labor " of Europe, and that certain products of foreign labor must therefore be excluded, or so increased in cost that they cannot compete with similar products of domestic labor. The avowed object is to check or prevent competition. But, if competition is prevented, to that extent importation of foreign products must be prevented ; and, if importation of any foreign products is prevented, to that extent revenue by duties on imports must be sacrificed. With the pro tective tariff, therefore, the controlling object is protection restraint or prevention of competition. To that object it makes some sacri fice of revenue. With a revenue tariff, on the contrary, the con trolling object is to secure duties with the least burden, and to that object it sacrifices the idea of excluding foreign competition. < Every revenue tariff protects as far as it prevents foreign competition, or ] checks its force by enhancing the cost of foreign products. But its duties are adjusted with intent to secure the largest revenue at the smallest cost to the people. On the other hand, a protective tariff secures revenue only by virtue of provisions which do not exclude competition. J But the theory of its advocates is that, when our industry is fostered by preventing or checking competition, our people are so prosperous that they buy more largely of foreign articles not excluded by duties, and that the revenue is thus in creased. The protective system seeks first to check competition. The revenue system seeks first to fill the treasury. 12 DOES PROTECTION PROTECT? We have been living since 1861 under tariffs intended to be protective. Whenever it has appeared that an important industry was still exposed to serious competition, that fact has been usually regarded as justifying an increase of duties. Eleven changes of the tariff have thus been made since the adoption of the act of March 2, 1861, and these frequent changes and the present con dition of our industry have aroused men to inquire whether the protective system itself is in fact beneficial to the country. National economy presents three methods of testing the pros perity of a country. The first is by the balance-sheet between that and other countries. The second is by ascertaining the increase in the production of wealth. The third is by ascertaining the distribu tion of wealth. If a nation imports in the way of trade more than it exports, due allowance being made for the profits of trade and for freights, it is running into debt. But a debt-involving purchase may so increase the productive power of the purchaser as to enable him to pay with interest, and realize ample profit. The second in quiry, whether the production of wealth by domestic industry is increased, is thus suggested. But the true national economy re gards the welfare of the individuals who compose the nation rather than the aggregate of wealth. England s wealth is England s shame, if, in Spite of great accumulation of property, the proportion of paupers is increasing. In the end, the richest country will be that in which the average condition of the laboring population most steadily and rapidly improves ; for in that country the productive energies of the people are most fully employed and stimulated. When the labor of a country is improving in condition, and thus gaining both the power and the desire to produce more largely, the nation is enlarging its sources of wealth, though the balance of trade may be against it, or its production of wealth may be tempo rarily checked. But when the natural improvement in the condition of the laboring people of any country is retarded or stopped, that country is growing poorer; the very sources of its wealth are choked ; and only a change in the condition of its labor can save it from decay. It matters not, then, how largely the balance of trade may be in its favor, or how vast may be the accumulations of wealth in the hands of a class. The power of growth and progress dies with the deterioration of the laboring people, and the loss of oppor tunity or stimulus to employ their energies to the utmost. Hence, to ascertain the present condition of a country, we examine its balance of trade and its production of wealth. But, to determine PROTECTION DOES NOT PREVENT OVERTRADING. 13 whether seeming prosperity is real, whether its apparent progress involves future disaster, whether the country is living within its income, and adding to its productive power, or wasting its very capital, and drying up the sources of its wealth, we must study the condition of its laboring population. Tried by these tests, how is the condition of this country affected by the system of protection ? It is not denied that many unfavor able symptoms appear. The balance of trade is against us. Most important branches of industry are checked in their progress. The Special Commissioner of the Revenue, in his report of January, 1869, presented statements which attracted very general attention in regard to the condition of the laboring class. But it is said that each of these unfavorable symptoms is due to other causes, and that the tariff has not produced, but has greatly diminished disasters. To test the correctness of this reasoning, it is necessary to trace the effect of different tariff systems in other times, to ascertain whether, other causes being absent, similar duties have in other times pro duced results such as we now witness. Taking each of the three tests in order foreign trade, produc tion of wealth, and distribution of wealth we shall endeavor to ascertain what results have been produced in common by the present and by former protective tariffs, and to compare them with the effects of tariffs for revenue. In brief, does the protective system benefit American industry ? CHAPTER II. PROTECTION DOES NOT PREVENT OVERTRADING. DURING the twelve months ending June 30, 1869, we imported merchandise and specie of the invoiced value of 8437,026,541 in gold. In the same time we exported foreign and domestic goods and specie valued at 8438,999,349 in currency. Reducing this to gold, we have 8343,233,932 of exports, against 8437,026,541 of im ports, and a balance against us for the year 1869 * of 893,792,609 in gold. * In these pages, instead of " the fiscal year ending June 30, 18 ," the phrase " the year 18 " will be commonly used. 14 DOES PROTECTION PROTECT? It is true that exports, if trade between this and other countries be profitable, have a purchasing power in foreign ports considerably greater than their valuation in our own. The merchant who ships a cargo of wheat or cotton to Liverpool expects to sell it there for a sum larger than its value here enough larger to cover the cost of freight and yield a profit. But a large share, both of freight-money and of profits, goes to foreigners. The report for the year 1869 states that 69 per cent, of our imports and 67 per cent, of our ex ports were in foreign vessels, but the proportion of freight-money paid to foreign vessels is still larger, for the more expensive trans atlantic trade is done more largely in foreign bottoms than the traffic with Canada, the West Indies, Mexico, and South America. Treasury returns do not enable us to ascertain accurately either the aggregate of freight-money, or the proportion paid to foreign ves sels, but the aggregate has been estimated at sixty millions, and, if that estimate is correct, more than forty millions must be yearly paid for freight to foreign vessels. Of the profits of foreign trade, it is probable that a proportion equally large goes to foreign dealers, who have many agencies and branch houses in New York. What ever difference there may be between the returned value of our ex ports and their purchasing power when delivered abroad, not less than two-thirds of it goes to foreigners, either in the form of freight- money or of profits, and not more than one-third can be regarded as applied to payment for our imports. Omitting reexports, and de ducting them from foreign imports also, we have net imports for the year $411,896,374, and domestic exports $318,103,765 in gold. It will hardly be supposed that the exports were enhanced in value fay transportation more than 18 per cent, in the average, and, if we add one-third of this, 6 per cent., or $19,086,225, to the value of domes tic exports, we have $337,189,990 as the purchasing power of those exports delivered in foreign ports. But the goods purchased were valued in foreign ports at $411,896,374. Not only are we buying each year more than we sell, but we have a large foreign debt on which we pay interest. It has been estimated that at least six hundred millions of United States bonds are held abroad, and we have also State and city, railroad, and other corpo ration bonds held in Europe to an amount not known, on which some interest is paid. In September Mr. Greeley estimated that our whole bonded indebtedness to Europe was over one thousand mill ion dollars. In his report for 1870, Special Commissioner Wells es timates that indebtedness at $1,400,000,000. If we suppose the PROTECTION DOES NOT PREVENT OVERTRADING. 15 lower estimate approximately correct, the interest on this sum, about sixty millions, must be paid by our exports. Let us suppose that we actually send abroad for interest-money only fifty millions ; deducting this sum from the purchasing value of our exports, we have $287,189,990 in gold to pay for imports valued at $411,896,374, and the balance of trade against us for the year appears to be $124,706,384. Not even this large sum, it is believed, fully repre sents the real balance against us. It is known that, in many cases, foreign goods are invoiced at prices below their true value, to escape part of the duty. A Secretary of the Treasury has declared his be lief that this undervaluation amounts to not less than fifty millions yearly. The actual balance against us may upon these estimates be placed at one hundred and seventy-five millions in gold. In the statement of domestic exports was included the sum of $37,301,426 in specie exported. If, instead of treating gold as mer chandise, we regard it as money, the balance against us will appear still greater. Our net imports of merchandise exceeded our exports of merchandise of domestic production by $131,094,035. Making the same estimates as before for the increased value of exports, freight, profits, interest, and undervaluations, the balance due from this to other countries appears to have been not less than $212,007,810, of which we remitted $37,301,426 in specie. Never before, since this nation first declared its independence, has the balance against us been as large. In 1864 the merchandise balance was larger by over eighteen millions, but we remitted over ninety-two millions of specie, and had much less to pay on account of interest. In 1866 our imports were larger, but we exported so largely that the merchandise balance was only eighty-nine millions, and we remitted over seventy-five millions in specie. Prior to the war, the merchandise balance against us was never sixty-two mill ions, and we were then exporting only our surplus of gold. In a word, our foreign trade has never before presented as unfavorable an aspect as in the fiscal year 1869. The people of this country have been taught by the advocates of a protective tariff that it would check overtrading, diminish im ports, and cause them to be exceeded by exports, and thus turn the balance of trade in our favor. From the earliest days, men de servedly honored for ability and sincere patriotism have argued that high duties on imports must check purchases of foreign goods, and stimulate the production of needed wares and fabrics at home. Through years of heated political strife, this was ever a main and , 16 DOES PROTECTION PROTECT? very effective argument in behalf of the protective ^system. It seemed consistent with the teachings of common-sense. Plain men, who did not think they fully understood the tariff question, still thought it clear that a high duty on one foreign article must check its importation, and hastily jumped to the conclusion that high duties on all would check the importation of aIL_^ So widely has this argument gained lodgment in the minds of men that to-day, when ever it is shown that we are buying more than we can pay for, and running into debt to Europe, not a few instinctively say, " We must shut out these foreign goods by a higher tariff ! " Nor is this the reasoning of those only who have not studied the question. Mr. Greeley has been for many years prominent in discussion of this sub ject, and has gained much reputation by an adroit use of facts, which has seemed to many readers to prove that he was fully and cor rectly informed. Undoubtedly there are few men in the country who have given to the subject more labor. In his work on " Political Economy," the ripest fruit of many years of investigation, he con stantly betrays the presence and mastery in his mind of one fixed idea, that a high tariff will diminish imports. Thus, in his seven teenth chapter, he says : " When we had low tariffs, we increased debts abroad," and urges adherence to the essential provisions of the existing tariff, " with no expectation of supplying all our wants from domestic sources, but with a resolute, firm, intelligent purpose that our exports shall soon be made to overbalance our imports, so that we may cease transmitting to Europe bonds." We are living to-day under the highest tariff ever enforced in this country. Beginning with a law deemed fully protective in 1861, in order to still more effectually exclude foreign goods, we have made eleven amendments or revisions, each raising the duties on some ar ticles, and several adding materially to the general average of duties. In 1868 the amount collected by duties was 44 per cent, of the entire value of imports, and 48 per cent, of the value of all dutiable imports. The attempt to shut out foreign goods and diminish importations has been faithfully made, and per sisted in for nine years, and yet we find that in the last year the balance of trade against us is greater than it has ever been before, under any tariff, since the earliest settlement of the country. If, under the highest duties ever imposed, the balance of trade against us becomes larger than ever before, must we not conclude that a high tariff does not prevent overtrading ? The advocates of the existing tariff reply that the excess of im- PROTECTION DOES NOT PREVENT OVERTRADING. 17 ports is caused entirely by the inflation of the currency and the re cent war. The correctness of this explanation may be tested by examining the effect of similar tariffs, in times when there had been no recent war, and when the currency was not inflated. At the close of this chapter will be found a table of exports and imports since the organization of the government, with the excess of either. When the war of the Revolution ended in acknowledgment of the independence of these colonies, we had no central government em powered to control commerce with foreign nations, and the power of taxing imports was exercised at pleasure by the different States. In those dark days, the comparative liberality of New York encouraged foreign trade, and laid the foundation of her commercial supremacy. With the formation of a government empowered to regulate com merce began the history of our tariffs. Much stress has been laid upon the fact that the founders of the republic imposed duties upon imports. Their example is not necessarily an unerring guide. The nation was then weak ; its industry was in its infancy. It does not appear that, in all the discussions of those times, any of those promi nent in the formation of the government ever advocated discrimi nating duties except as a temporary measure, adapted to the condi tion of a people just beginning national existence. Still less does it appear that of these patriots there was a single one who imagined that it was possible to protect every branch of industry at once. Arguments offered in favor of any protection whatever contemplated only a temporary discrimination in favor of a few of the most im portant branches of industry. Whether these fathers of the repub lic believed in duties prohibitive in purpose, or tariffs averaging 44 per cent., we may judge from the fact that until 1807, when those difficulties with European powers began which led to em bargoes and war, the duties actually imposed never averaged higher than 16 per cent, of the value of imports, and were usu ally about 10 per cent., and in six years even less. Yet we had just emerged from the war of the Revolution, with a heavy debt, and w r ere then, if ever in our history, in a position to need protection for infant industries. The result proved the wisdom of moderate du ties. A vast carrying-trade fell into our hands ; the commerce of the young nation excited the envy and roused the fear of the most pow erful ; our imports for the years 1800 to 1807, inclusive, exceeded eight hundred millions of dollars. Nearly forty years after, during the eight years ending with 1845, they were but little greater. Nor was this rapid growth of commerce due to the carrying-trade alone. 2 18 DOES PROTECTION PROTECT? In those early days we exported domestic produce worth forty or fifty millions yearly, and our progress in domestic industry was yet more wonderful. " Never in the history of the world," says Seybert, "was there a more rapid and extraordinary prosperity." Those great branches of manufacture, which have since been thought to need so much aid, then rapidly advanced under competition, and in 1810 were thought to be firmly established. The war interrupted our commerce, and caused a fatal inflation of our currency. Its close was followed by the extravagant importations which inflation in vites, by the depreciation and abandonment of the currency, by pros tration of banks and of business, and by general distress. The first tariff for protection was passed in 1816. The fact that this distress followed it only deserves mention as showing that protective duties do not prevent the disastrous effects which naturally flow from a cor ruption of the currency and an overthrow of the banking system. The detailed records of the Treasury commence with 1821. In that year the country was still suffering from the disorder already described. But, as soon as it began to revive, importations in creased. Demands for heavier duties, to shut out foreign goods, were answered by the higher tariff of 1824. Four years proved that it was not satisfactory, and a still higher tariff was granted in 1828. In the first period, 1821 to 1824 inclusive, the imports were $303,955,539, and exports, $287,820,350 ; excess of imports, $16,135,189. In the second period, 1825 to 1828 inclusive, under higher duties, imports were $349,305,444, and exports, $331,720,223 ; excess of imports, $17,585,221. In spite of the increased duties, imports had increased more than exports. Then the extreme pro tective tariff was adopted, Congress being determined, it would seem, to test the theory then held by advocates of protection, and still adhered to by Mr. Greeley, that high duties would make our exports exceed our imports. Accordingly, with " a firm, intelligent purpose " of that sort, the experiment was made, and in the third period, 1829 to 1832 inclusive, imports were $349,589,837, and ex ports were only $314,695,705 ; excess of imports, $34,894,132. It is true, imports were reduced in the first and second years under this tariff, but in the third rose to a larger value than had ever been im ported in any year since the war. Meanwhile, exports had been reduced, and the balance of trade against us was increased from the seventeen millions of the preceding period to nearly thirty-five millions. Never in our history have we given to any policy a longer, more PROTECTION DOES NOT PREVENT OVERTRADING. 19 uninterrupted, and faithful trial than we then gave to the plan of causing exports to exceed imports by means of protective duties, increased from time to time at the desire of protected interests. Is it not plain that the effort failed ? Our imports, three times tempo rarily checked, had each time recovered more than they had lost, and during the whole period of twelve years had largely increased. But our exports had been checked, and, as compared with 1818, when the second protective tariff was passed, or 1825, the year after the third increase of duties, had been actually reduced. Meanwhile, no inflation of the currency had existed to account for these events. The protective system had been thoroughly and fairly tried. If history teaches any thing, if fair trial can prove any thing, it surely was proved, by the experiments of 1818 to 1832, that high duties do not permanently shut out importations, but do check exports of domestic products; and that protection, therefore, does not cause exports to exceed imports. The people of that time, at any rate, seem to have learned the lesson, for they demanded and obtained a change of policy. We are seeking to ascertain the effect of former protective tariffs, in times when the currency was not inflated. The tariff of 1833-1842 was not protective, and during the years 1833-1837 occurred a remarkable inflation of the currency, accompanied by excessive importations, which will be considered at a proper time. The currency was not restored to a proper level until the closing years of that tariff, when imports fell below exports, and the years 1840-1842 inclusive show a balance of twenty-three millions in our favor. Nor did the protective tariff of 1842 immediately work a .change ; for, in the first year of its operation, the balance in our favor was about twenty millions. But in 1844 this balance was re duced to less than three millions ; in 1845 the situation was so changed that imports exceeded exports by nearly three millions; and in 1846 the balance against us was over eight millions. The system was then a second time abandoned. This second experi ment, adopted at a time when exports exceeded imports, in its first year, by twenty millions, in less than four years worked such a change that imports exceeded exports by over eight millions. In this case, also, it is impossible to say that inflation of the currency produced the result. For the currency in circulation was actually less in 1846, when the excess of imports was eight millions, than it was in 1840, when the exports exceeded imports by twenty-five millions. And in this instance, too, the same phenomenon is a 20 DOES PROTECTION PROTECT? second time presented imports increased in spite of duties intended to check them ; but exports were checked, remained almost station ary during the four years, and were smaller in 1846 than they had been in 1840, and smaller for the last three years of that tariff than they had been for the last three years of the tariff of low duties which had preceded. The non-protective tariff of 1846 continued in operation until 1857, and was then changed for another of similar character, but lower duties. The closing years of this period, the seven years 1855 to 1861 inclusive, deserve mention as the first in our history in which the balance of trade was turned decidedly in our favor. For the first time our exports exceeded our imports every year, and the balance in our favor during the seven years named was one hundred and eighty-four millions. Thus ended the first serious trial of the non-protective policy. And, whereas the mere approach of that policy in 1840- 42 gave us the first three years of peace in which the aggregate of exports exceeded the aggregate of imports, the fair trial of that policy gave us in its last seven years a balance of one hundred and eighty-four millions in our favor. Toward the close of the fiscal year 1861, the protective system was again adopted. Since that time we have endeavored most faithfully, by frequently-increased duties, to exclude foreign goods. Both in frequency of changes and in severity of imposts, this period surpasses any other in our history. Its result, reducing exports to gold values, and including specie, has been as follows : imports, $2,598,849,217; exports, $1,796,988,873; balance against us, $284,600,939. But of this aggregate of exports $517,259,405 has been in gold. The balance of trade, not counting gold as merchan dise, has therefore been $801,860,344, or one hundred millions a year against us. Or, comparing this period with the preceding period of non-protection, the account stands thus : Non-protection, seven years, balance one hundred and eighty-four millions in our favor ; protection, eight years, balance two hundred and eighty-four millions against us. The first period, 1821-1824, of moderate protection, gave a balance against us of sixteen millions. The second period, 1825-1828, of higher duties, gave a balance against us of over seventeen millions. The third period, 1829-1832, of extreme protection, gave a balance against us of nearly thirty-five millions. The fourth period, 1843-1846, of high protection, changed the PROTECTION DOES NOT PREVENT OVERTRADING. 21 situation from a balance in our favor of twenty millions to a balance against us of eight millions. ( " The fifth period, 1862- 69, of increasing anci extreme duties, has given a balance against us of two hundred and eighty-four millions, although in the seven years preceding, under low and non-protective duties, the balance in our favor was one hundred and eighty-four millions. If it be possible for any theory to be refuted, conclusively and forever, by official records, surely the theory that high protective duties check overtrading, prevent imports, and turn the balance of trade in our favor, is so refuted. And any man who clings to the protective system, " with a firm, intelligent purpose " to cause ex ports to exceed imports, has studied facts with little benefit, and his right to call his purpose " intelligent " may well be doubted. In deed, the facts are so conclusive that the ablest writers who support protection now maintain that a high tariff not only permits, but en courages and even causes increased importations, or, in the words of Mr. Carey, that a protective is the only true revenue tariff. It will be observed that it is not denied that inflation of currency stimulates increased importations, nor that inflation has increased the recent extravagant overtrading. But, by comparison with other periods in which the currency was not inflated, it has appeared that high tariffs check importations only for a single year or two, if at all, and that the accompanying decrease of exports has left the balance of trade against us larger in each period of high duties than in a corresponding period of lower protective or non-protective duties. From these facts it follows, not only that high tariffs do not prevent overtrading, but that they do not effectually shelter our industries against competition. If, in spite of them, or as Mr. Carey reasons, because of them, our people buy more largely of foreign products in the aggregate under high duties than under low duties, is there not already reason to suspect that a protective tariff, from some cause or other, tends to defeat its own object ? It aims to exclude foreign goods. The facts prove that in the aggregate it does not exclude, but permits, if it does not cause, an increased importation of them. If the importation of some is lessened, that of others is increased still more largely, and hence, while some interests may be favored, the competition which American industry in the aggregate has to meet from foreign industry is increased rather than diminished. That this inference is not erroneous, will appear when the progress of manufactures is examined. 22 DOES PROTECTION PROTECT v^x % "But can a high tariff possibly cause increased importations?" it will be asked. In two ways. It may increase prices, secure arti ficial profits to particular industries at the expense of the community at large, increase the cost of living and the cost of production and of materials, so that the cost of our manufactured product is increased more than the duty adds to the cost of the foreign article. On the other hand, Mr. Henry C. Carey, whose acknowledged ability and vigor have made him the leader of the modern advocates of protec tion, maintains that a high tariff confers such blessings on a people, so stimulates their industry, so fully employs their labor, and secures to all such ample reward, as to enable them to buy of foreign nations more than they can under any other system. Both of these theories so far accord with the actual increase of importations after the effect of high duties is felt, that we may ascribe them to some examination of facts, rather than to that preconceived notion of what a tariff ought to do which alone can account for the idea that high duties prevent overtrading. But the theory of Mr. Carey does not account for the decrease of exports. In 1817, we were exporting $87,671,560, and, at the close of the long era of progressive protection in 1832, we were exporting only $87,176,943. Yet during that time popula tion had increased from 8,918,687 to 13,698,665. In the only period of long-continued low duties, our exports increased from one hun dred and nine millions in 1846, to three hundred and seventy- four millions in 1861, a gain of more than two hundred per cent, in fifteen years, while in the fifteen years under prottfction exports actually decreased ! Moreover, if Mr. Carey s theory be accepted, it proves too much, for imports were vastly greater in 1837 and 1857, under low duties, than in any year prior to the war under high duties. If we are to ascribe increase of importations to a con- dition of prosperity, in which labor is well rewarded, and people are able to buy largely, then a condition of far greater prosperity appears to have existed under low duties, in the years mentioned and others, than in any time of high duties. A different explanation is needed to account for all the facts. PROTECTION DOES NOT PRETEXT OVERTRADING. 23 Exports and Imports, Gross Value, from the Beginning of the Government to June 30, 1869. EXPORTS. Domestic. Foreign. Total. E*ceExpts. 1790 $19,566,000 $539 156 $20 205 156 $23 000 000 $2 794 844 1791 1792 18.500.000 19 000000 512,041 1 753 098 19,012.041 20 7">3 098 29.200.000 31 500 000 10.187,959 10 746 902 1793 24.000,000 2 109.572 26.109 572 31.100,000 4 990 428 1794 26.500.000 6 526 233 33 026 233 34 600 000 1 573 767 1795 39 500,000 8 489 472 47 989 472 69 756 268 21 766 796 1796... 40,764.097 26.300,000 67.064.097 81.436.164 14 372 067 1797 29.850.206 27 000,000 56 850 206 75,379 406 18 529 200 1798 28.527.097 33 000 000 61 527 097 68 551 700 7 024 603 1799 1800... 1801... 83,142.532 31,840,903 47.473.204 45.523,000 39.130,877 46,642.721 78,665.522 70,971,780 94,115,925 79,069.148 91,252,768 111.363.511 403,626 20,280.988 17 247 586 1802 36,708.189 35 774 971 72 483 160 76 333 333 3 850 173 1803 . . . 42.205,961 13 594 072 55 800 033 64 666 666 8 866 633 1804 41.467 477 36 231 597 77 699 074 85 000 000 7 300 926 1805 42 387 002 53 179 019 95 566 0^1 120 600 000 2o 033 979 1806 41,253,727 60,283.2315 101 536,963 129,410,000 17 873 037 1807 48,699.592 59 643 558 108 343 150 138 500 000 30 156 850 1808 ... 9,433546 12 997 414 22 430 960 56 990 000 34 559 040 1809 31.405.702 20,797,531 52.203.233 59,400.000 7,196 767 1810 42.366.675 24.391.295 66,657,970 85 400 000 18 742 030 1811 45.294.043 16 022 790 61 316 833 53 400 000 $7,916 833 1812 30.032 109 8 495 127 38 527 236 77 030 000 38 502 764 1813... 25.008.132 2,847,865 27.855.927 22 005 000 5,850,927 1814 6 782 272 145 169 6 927 441 12 965 000 6 041 559 1815 45,974,403 6.583.350 52,567 J58 113!041^274 60,483,521 1816 64,781 896 17 138 156 81 920 452 147 103 000 65 182 548 1817 68.313,500 19358 069 87 671 560 99 250 000 11 578 440 1818 73,854,437 19 426 696 93 281 133 121 750 000 28 468 867 1819 1820 50.976,838 51 683 640 19.165,686 18 008 029 70.142.521 69 691 669 87,125.000 74 450 000 16.982.479 4 758 331 1821 1822 48,871,894 49,874079 11,808,488 22 286 202 64,974.382 72 160 281 62.ft85.724 83 241 541 2,088,658 11 081 260 1823 47 155 408 27 543 622 74 699 030 77 579 267 2 880 237 1824 50 649 500 25 337 157 75 986 657 89 549 007 " 13 562 350 1S25 66 944 745 32 590 643 99 535 388 9g g4o o75 3 195 313 1826... 53.055.710 24.530.612 77,595.322 84,974^477 7,379,155 1827 1828 53,921.691 50 669 669 23.403.136 21 595 017 82,324.727 72 264 686 79,484,068 88 509 84 2,840,659 16 245 138 1829 1830 55.700.193 59462029 16,658,478 14,387 479 72.358,671 73 849 508 74,492.527 70 876 920 2972 588 2,153,856 1831 61 277 057 20 033 526 81 310 583 103 191 124 21 880 541 1832 63 137 470 24 039 473 87 176 943 101 029 9 66 18 852 ;>;! 1833 70.317,698 19 822 735 90 140 443 108 ll8 ? 311 17 977 868 1834 81 024 162 23 312 811 104 336 973 126 521 332 22 184 359 1835 101.189.082 20,504.495 121,693,577 149,895.742 28 202 165 1836 106.916.680 21,746 3(50 128 663 040 189 980 035 61 316 995 1837 95,564414 21 854 962 117 419 376 140 989 17 23 569 841 1838 96 033 821 12 45 795 108 486 616 113 717 404 5 230 788 1839 103.5,33,891 17,494 525 121,028 416 162 092 132 41 063 716 1840 113,895.634 18 190 312 132085936 107 141 519 24 944 417 1841 . .. 106,382 722 15 469 081 121 851 803 127 946 177 6 094 374 1842 92 969 996 11 701 538 104 691 534 100 162 087 4 529 447 1843 77,793,783 6 552 697 84 346 486- - 64753 799 19 592 681 1844 99,715,179 11 484 867 111 200 04ft- 108 435 035 2 765 Oil 1845 1846 99.299,776 1"2 841 893 15,346,830 11 346 623 114,646,606 113 488 516 117,254,564 121 691 797 2.607,958 8 203 281 1847 1848 150.637,464 132 904,121 8,011.158 21 128 010 158.648,622^- 154 032 131 146.545,638 154 998 928 12,102,984 966 797 1849 1850 132,666,955 136,946.912 13.088,865 14.951,808 145,755.820 151,898,720 147,857,439 178,138.318 2,101619 26,239,598 1851 196,689,718 21 698 293 218 388 Oil -216 224 932 2 163 079 1852 192 368 984 17 289 382 209 658 366 212 945 442 3 287 076 1853 1854 213.417,697 253 390 870 17,558,460 24 850 194 230.976,157 278 241 064 267.978,647 304 562 381 37.002,490 26,821 317 1855 1856 1857 246, 708.553 310,586,330 338 985 065 S8,U8\m 16.378.578 23 975 617 275.158,846 326.964,908- 36 %0 682 261,468.520 314,639,942 360 890 141 13.688,326 12,324.966 2 070 541 1858 293 758 279 30 886 142 304 fin 401 28 -* 613 150 42 031 271 1359 335 894,385 20 895 077 356 789 462-- 838 768 130 18 021 332 1860 . ... 346 256 252 26 933 02 373 189 274 362 166 254 11 023 020 1861 36-2,191.047 20,645,427 382,836 474* 352 739 387 30 097,097 1862 199 107 587* 14 145 973 213 253 560* 275 446 939 62 193 379 1863 214,283.928* 26 123 584 240 407 512* 252 919 920 12,512,408 1864 221 710 108* 20 256 940 241 967 048* 329 565 134 87 598 086 1865 164 121 298* 32 114 157 196 235 455* 248 555 652 52 320 197 1866 1867 402.399,967* 313,739,145* 14,742.117 20.611,508 417,142,084* 334 350 653* 415.512,158 411 733 309 28,370.074 77,382.656 1868 330.592.764* 22.195 438 352 788 202* 373409^*48 20,621,246 1869 318,103,765* 25.130,167 343.233.932* 437.026,541 93,792,609 * Merchandise export* since I860, reduced to gold values. 24 DOES PROTECTION PROTECT? EXPOKTS AND IMPORTS, COIN AND MERCHANDISE, FROM 1821 TO 1868, INCLUSIVE. YEAR. IMPORT ENTRIES. TotaL RE-EXPORTS. Net Imports. COIN. Specie. Merchandise. Specie. TotaL Domestic Exp. 1821.. 1822.. 1823.. 1824.. 1825.. 1826.. 1827.. 1828.. 1829.. 1830.. 1831.. 1832.. 1833.. 1834.. 1835.. 1836.. 1837.. 1838.. 1839.. 1840.. 1841.. 1842.. 1843.. 1844.. 1845.. 1846.. 1847.. 1848.. 1849.. 1850.. 1851.. 1852. . 1853.. 1854.. 1855.. 1856.. 1857.. 1858.. 1859.. I860.. 1861.. 1862. 1863. 1864. 1865. 1866. 1867.. 1868.. 1869.. $8.064,890 3,369,846 5,097.896 8,379,835 6,150,765 6,880,966 8,151.130 7,489,741 7,403,612 8,155,964 7,305,945 5,907,5 >4 7.070,368 17,911,632 13,131.447 13,400,881 10,516,414 17,747,116 5.595,176 8,882,813 4,988.633 4,087,016 22,390,559 5,830,429 4,070,242 3,777,732 24.121.289 6,360,284 6.651,240 4,628,792 5,453,592 5,505,044 4.201,382 6,939,342 3.659,812 4.207,632 12,461,799 19,274,496 7,434,789 8,550,135 46,339.611 16,415,052 9,584,105 13,115,612 9,810,072 10,700,092 22,070,475 13,702,928 $54,520,834 79,871,695 72,481,371 81,169,172 90,189,310 78.093,511 71,332,938 81,020,083 67,088,915 62,720.956 95,885,179 95,121,762 101,047,943 103,609,700 136,764,295 176,579,154 130,472,803 95,970,288 156,496,956 98,258,706 122.957,544 96,075,071 42.363,240 102,604,606 113,184,322 117,914,065 122,424.349 148,638,644 141,206,199 173,509.526 210,771,340 207,440,398 263.777,265 297,623,039 257,808,708 310,432,310 348,428,342 263,338,654 331,333,341 353,616,119 306,399,776 259,031,887 243,335,815 316,449.522 238,745,580 434,812,066 389,662,834 359,706,520 $62,585,724 83,241,541 77,579,267 89,549,007 96,340,075 84,974,477 79,484.068 88,509.824 74,492,527 70,876,920 103,191,1-^4 101,029,266 108,118,311 126,521,332 149,895,742 189,980,035 140,989,217 113,717,404 162,092.132 107,141,519 127,946,177 100,162,087 64,753,799 108,435.035 117,254,564 121,691,797 146,545,638 154,998,928 147,857,439 178,138,318 216,224,932 212,945,442 267,978,647 304,562,381 261.468,520 314,639,942 360.890,141 282,613,150 338,768,130 362.166,254 352,739,387 275,446,939 252,919,920 329,565,134 248,555,652 445,512,158 -411,733,309 373,409,448 437,026,541 $10,478,059 10,810,180 6,372,897 7,014,552 8,797,055 4,098,678 6,971,306 7,550,439 4.311,123 1,241,622 6,956,457 4,245.399 2,244.859 1,676,258 5,748.174 3,978.598 4,692,730 3,035,105 6,868.385 6,181,941 7,287.846 3,642.785 1,413.362 5,270,809 7.762,049 3,481,417 1,844,404 13,141,204 4,447,774 5,476,315 11,403,172 5,236,298 3,938,340 3,218,934 2,289,925 1,597,206 9,058,570 10,225,901 6,385.106 9,599,338 5,991,210 5,842,989 8,163,049 4,922,979 3,025,102 3,400,697 5,892,176 10,038,127 $21,302,488 22,286.202 27,543,622 25.337,157 32,590,643 24530.612 23,403,136 21.595,017 16.658.478 14,387,479 20,033,526 24.039,473 19.822,735 23,312,811 20,504.495 21,746,360 21,854,962 12,452,795 17,494.525 18,190,312 15.469.081 11,721,538 6.552,697 li;484,867 15,346,830 11,346,623 8,011,158 21,128,010 13,088,865 14,951,808 21.698.293 17,289,382 17,558,460 23,748,514 28,448,293 16,378,578 23.975,617 30,886,142 20,895,077 26,933,022 20.645.427 14,145,973 26.123,584 20,256,940 32,114,157 14,742,117 20,611,508 22,195,438 25,130,167 $41,283,236 60,955,339 50,035,645 64,211,850 63,749,432 60,443,865 56,080,932 66,914,807 57,834,049 56,489,441 83,157,598 76.989.793 88,295,576 103,208,521 129,391,247 168,233,675 119,134,255 101,264,609 144.597,607 88,951.207 112,477.096 88,440,549 58,201,102 96,950,168 101.907,734 110,345,174 138,534,480 133,870.918 134,768,574 163,186,510 194,526.639 195,656,060 250.420.187 280,813,8(57 233,020,227 298,261.364 336,914,524 251.727,008 317,873,053 335.233,232 a32,093.960 261,300,966 226.796,336 309,308,194 216,441,495 430,770,041 391,121,801 351,214,010 411,896,374 $605,855 1,043,574 693,037 612,886 937,151 2,058,474 1,410,941 366,842 400,500 729,601 345,738 1,2*3,519 472,941 1,998,358 2,235,073 2,746,487 1,170,754 107,429 183,405 844,446 423,851 62,620 2.700,412 956,874 2,046,679 18,069,580 37,437,837 23,548,535 38,062.570 53.957,418 44,148,279 60,078,352 42,407,246 57,502,305 56,946,851 23,799,870 31,044,651 55,993,562 100,321.371 64,618.124 82,643.374 54,976,196 83,746,161 CURRENCY AND IMPORTS. 25 CHAPTER III. CURRENCY AND IMPORTS. No one who attentively considers the record of our foreign trade fail to observe that the influence of changes of tariff, either to check or to stimulate importations, has been much less than has commonly been supposed. Great changes in the current of trade, for which no tariff accounts, have already been observed. The geol ogist, as he searches the surface of the earth for traces of its history, finds here and there paltry mounds which human hands have reared ; here and there ridges or indentations which tell of the action of winds or waters. But, when, in his journeyings, he reaches the frowning mountain-ranges, stretching from continent to continent, where the very foundations of the earth have been uplifted, he reads there the working of tremendous forces which lie imprisoned within the earth itself; compared with which the waves and their ridges, the currents and their indentations, and the human hands which have heaped up little mounds, seem alike insignificant. In searching the history of commerce, we find slight changes which may be traced to the action of tariffs, or to temporary conditions in this country or in Europe. But there are also mighty upheavals which tell of a power greater than any of these. The line of our commerce now rises, in majestic swell, for a period of many years, and then suddenly drops again, as if the very foundations of trade had given way. Reading the record in the light of tariffs only, we are like those who puzzle over some hieroglyphic writing of which the key is yet unknown. The growth of imports from 1830 to 1837, the sudden collapse in 1837 and 1838, the advance of fifty millions in 1839, and the fall of nearly sixty millions which followed these changes are not consistent with the regular reduction of duties by only two per cent., and they tell of a power far greater than these paltry changes of tariff which then occurred. Equally inexplicable, if we have only the tariff to guide us, are the sudden fall of eighty millions in imports in the year 1858, and the sudden recovery in 1859. To explain these changes, we must seek for a power more mighty in its influence over the prosperity and commerce of a country than any changes of tariff. We all know that in 1837 and 1857 there were great changes in our currency. Prior to those years there had been expansion of cur rency, and our imports had also been largely increased. In those 20 DOES PROTECTION PROTECT? years the banks suspended, the currency was violently contracted, and imports were suddenly reduced. These coincidences suggest some comparison of the changes of currency with the changes in our importations. During the War of 1812, our currency increased from about forty millions to about one hundred millions in 1816, and was then reduced, by general overthrow of banks, to about fifty-five millions in 1820. In like manner, our imports for domestic consumption, which in 1807 had been about seventy millions, as soon as the war closed rose to over one hundred millions, and to one hundred and thirty millions in 1816, and were then reduced to about sixty millions in 1820. From 1820 to 1833 the currency increased a little faster than population, and our imports increased in like proportion. From 1833 to 1837 the currency rose very rapidly to two hundred and twenty-two millions, and the imports were in like manner in creased from eighty to one hundred and sixty-nine millions. From 1837 to 1843 the currency was contracted from two hundred and twenty-two to one hundred and twenty-eight millions, and imports shrank from one hundred and sixty-nine to fifty-eight millions. Again, from 1843 to 1857, the currency was expanded from one hun dred and twenty-eight to four hundred and seventy-four millions, and the gross imports rose from sixty-four to three hundred and sixty millions. In 1857 the currency was violently contracted, and imports were instantly reduced. For more accurate comparison a diagram is necessary. The quantity of currency actually in circula tion at different periods it is not possible to ascertain with certainty or exactness. But, from estimates by Secretaries of the Treasury, especially Gallatin and Crawford, from reports of congressional committees, and estimates of statistical writers, the following fig ures have been gathered, which probably approximate as closely to the actual circulation in the years mentioned as it is now possible to do. The figures are millions and decimals : CIRCULATION. YEARS. Specie. Paper. Total. Currency. Imports. 1790 16. 3. 19. 22. 22.4 1792 12. 7. 19. 24. 29.7 1804 17.5 13. 30.5 42. 48.7 1808 14 22 7 36 7 60 7 78 8 1816 7 5 110 117 5 136 129 9 1819 8. 62. 70 109 5 67 9 1820 16 44. 60. 89 4 56 4 1829 8.5 52.7 . 61.2 95.7 57.8 CURRENCY AND IMPORTS. 27 The irfiports for 1807 are given ; our trade in 1808 was inter rupted by the embargo. No other reliable statistics or estimates have been found, except the estimates of Gallatin for the years 1814 and 1815, which are of no value for our purpose, for our foreign commerce in those years was not uninterrupted. It is not supposed that the figures given are absolutely correct, nor is it possible to ob tain exact information of the amount of specie and paper in actual circulation in those early times, but the aggregates of actual circu lation and of currency in the country are sufficiently reliable to show that there was a remarkable parallelism between the currency of the country and its imports for consumption. In every case an increase or decrease of circulation and of currency is accompanied by a cor responding increase or decrease of imports. Were statistics ob tainable for the years of peace not given, it is probable that the co incidence would be still more striking. And the increase of imports bears a general proportion to the increase of currency, especially where the statistics of currency are most reliable. From the year 1830 onward, more complete information of the amount of currency is obtained. The following table is based main ly upon one prepared from the official records, by the New York Economist. In this table only bank-notes and specie are included as currency. It has been carefully verified by comparison with such records as the writer has been able to obtain, additions having been made for the years 1829, 1831, 1832, and 1834, for which the Econ omist gave no figures. Treasury reports of 1834 and 1836, with a calculation of the quantity of specie in the country, and comparison of returns of the banks of the different States, as far as those could be found, supply data sufficiently complete to justify the figures given. Thus the returns of the Massachusetts banks (given at the close of the chapter) show an increase of circulation from $5,124,070 in 1830 to $7,739,317 in 1831, and a decrease to 87,122,856 in 1832. Returns of other banks show similar changes ; while the specie in the coun try, estimated at thirty-three millions, in 1830, by Gallatin, was de creased $1,708,986 by exportation, but increased nearly as much by the discovery of gold in North Carolina, which increased the coinage at the mint to nearly four millions. In^J1834 the circulation of the banks was reported as $94,839,570, and the specie in the country had been increased by January of that year, by imports and yield from the mines, then delivering a million a year, to over forty-four mill ions. With similar data the figures of the Economist have been compared, and their substantial correctness may be accepted with 28 DOES PROTECTION PROTECT? qualification as to the years 1838, 1839, 1840, and 1855. The quan tity of paper-money in the country, after the first suspension of the banks in 1837, by no means accurately indicates the quantity accept ed as currency, for the notes of many banks were altogether refused, while the notes of others were passed only at a discount. The specie in the country was increased by importation of $14,239,070, so that it was probably eighty-five millions by the beginning and about ninety-two millions by the middle of the year 1838 ; but the paper in circulation, reported as $116,138,910 at the beginning of the year, probably includes at least twenty millions of notes, which were actually refused, and not effective as currency. With these data, the effective currency for that year may probably be placed at one hundred and eighty-two millions. Nor were all the dead notes in circulation quickened by the temporary resumption of the next year, or accepted as currency ; and, though the quantity of paper returned was $135,170,995, it is probable that, of paper effective for currency, there was not more than one hundred and fifteen millions, which, with eighty-nine or ninety millions of specie, would give an effective currency of two hundred and five millions. The second suspension reduced the paper circulation reported to $106,986,572; but of this quantity, again, it is probable that a considerable proportion was ineffective perhaps twenty-five millions. The quantity of paper kept afloat by banks, which were not entirely thrown out before the year 1842, was only eighty-three mill ions; and, if we suppose that not more than eighty millions of the quantity in circulation in 1840 was accepted as currency, and add ninety millions of specie, we have an effective circulation of one hundred and seventy millions. For the year 1855 the figures of the Economist are four hundred and forty-four millions, an increase of twenty-six millions, as compared with 1854. But the paper in cir culation was eighteen millions less in 1855 than in 1854, namely, only one hundred and seventy-eight millions. And the quantity of specie was reduced by the export of $52,587,531, while the coinage was also less than in 1854. No estimate of the quantity of specie in circulation will warrant placing the currency for 1855 higher than three hundred and ninety-four millions, and these figures are there fore substituted for those of the Economist. In the second column we have placed the imports of merchandise for consumption, and in the third and fourth are given the rate of currency per capita, and of imports per capita. IMPORTS AND CURRENCY, PER CAPITA, FOR THIRTY-TWO YEARS, 1829- 61. The dotted line 1837 to 1841 represents the supposed quantity of effective currency (gold and paper in circulation) during suspension of specie payments. It should be re membered that imports are for fiscal years, from September until 1843, and thence from June 30th. But estimates of currency and bank returns are mainly from January to Janu ary. Thus the currency, about January, 1837, was $222,000,000, but contraction began, and the banks suspended several months before the fiscal year 1837 closed. Net Imports, per capita.. 1829 30 31 32 33 31 35 30 37 38 39 40 41 42 13 44 45 46 47 48 49 00 51 52 53 54 55 56 57 56 59 60 61 CURRENCY AND IMPORTS, MOVEMENT OP CURRENCY AND IMPORTS COMPARED. 29 TEAK. Currency. Imports. PER C APITA. Currency. Imports. 1829 $95,700,000 $57 834 049 7 70 4 61 1830 93 000 000 56 489 441 7 20 4 31 1831 117 ooo ooo 83 157 598 8 80 6 9 5 1832 112 000 000 76 98) 793 8 20 5 61 1833 1834 119,000,000 139 000 000 88,295,576 103 08 521 8.50 9 60 6.25 7 09 1835 .. . 183 000 000 19 391 247 12 40 8 64 1836 205 000 000 168 233 675 13 30 10 93 1837 222,000,000 119 134 255 14 00 7 53 1838 203,000,000 101 264,609 12.50 6 23 1839 222,000,000 144 597,607 13.40 8 68 1840 190 000 000 88 951 207 11 20 5 21 1841 187 000 000 112 477 096 10 70 6 38 1842 1843 143,700,000 128 500,000 88,440,549 58 201 102 8.00 6 90 4.87 4 15 1844 175 000 000 96 950 168 9.10 5 03 1845 .. . 186,000 000 101 907 734 9.40 5 15 1846 . 202,500 000 110 354 174 9.90 5 42 1847 225,500 000 138 534 480 10.70 6 60 1848 240,000,000 133 870 918 11.10 6 25 1849 234,700,000 134 768,574 10.50 6.13 1850 285,000,000 163,186,510 12.20 7.03 1851 341,000,000 194,526,639 14.20 8.14 1852 360,000,000 195,656,060 14.50 7.95 1853 380 000 000 250 420 187 14 80 9 88 1854 418 600 000 280 813 867 15 80 10 71 1855 394 600 000 233 020 227 14 50 8 67 1856 446 200 000 298 261 364 16.10 10 77 1857 474 300 000 336 914 524 16.70 11.81 1858 406 600,000 251,727,008 14.00 8.57 1859 458,800,000 317,873,053 15.80 10.50 1860 457,000,000 335,233,232 14.50 10.80 The returns of imports are for fiscal years ending in September prior to 1843, and June 30th since ; the statements of currency are from returns near the 1st of January in the years named. It will at once be observed that there exists an astonishing cor respondence between these records. Every expansion of currency is found to be accompanied by an increase of imports, and every con traction by a reduction of imports, except in the years 1840 and 1848. For 1840, if we substitute the estimate already given of effective cur rency, the correspondence is exact. The currency in 1848 was af fected by the famine and disasters in Europe. In every other year since 1829, as in every year prior to that of which we have records of currency, a contraction of currency is accompanied by a reduc tion of imports and an expansion of currency by an increase of im ports. But the relation of long columns of figures to each other is not easily borne in mind ; therefore a diagram is given, representing by two lines the changes of currency and of imports, each per capita. 30 DOES PROTECTION PROTECT? Both lines are drawn in fidelity to the table just given, and upon the same scale, though for convenience they are brought near each other the base-line representing $3 per capita for imports, and $5 per capita for currency. For 1838, 1839, and 1840, a dotted line is given for the effective currency per capita, according to the esti mates already made. No reasoning being can study this remarkable correspondence of facts without attributing it to a relation of cause and effect. One or two coincidences might be ascribed to chance. But chance does not trace such lines as these. Nothing less than an irresistible law by which one series of events has controlled the other, or both have been alike controlled by a third, can account for the fact that during thirty-two years, under tariffs of all kinds, from the highest to the lowest, in spite of the wonderful development of our resources and growth of our manufactures, and in spite of famines or com mercial revulsions on either side of the ocean, the lines of imports and of currency follow each other in every rise and fall as if chained together. In every change, for, when such absolute correspondence appears elsewhere, the correctness of the estimates of effective cur rency in the years 1838- 42 is strongly confirmed by the fact that these estimates correspond, while the record of aggregate currency, effective and non-effective, does not correspond, with the changes of foreign trade in those years. But the correspondence at all other points, between records extending for thirty-two years, is surely con vincing enough. If there can be absolute demonstration of cause and effect, we surely have it in this marvellous parallelism.* Which is cause and which effect ? Is the quantity of currency controlled by the increase or decrease of importations ? A moment s * Since this chapter was completed, the attention of the writer has been called to a very similar diagram and demonstration in the elaborate work of Hon. Amasa Walker, entitled " The Science of Wealth." Mr. Walker, however, includes as cur rency the bank circulation and deposits, so that the figures given differ materially. Yet the correspondence remains, and that writer holds it demonstrated " beyond cavil that the demand for foreign merchandise depends upon the quantity of cur rency in the country." It may justly be observed that this conclusion is not logi cally unavoidable ; that some other cause may have controlled both the changes of the currency and the movement of imports. It is not the intention of this work to affirm or deny the conclusion at which Mr. Walker arrives ; for the present purpose it is enough to prove that the movement of imports is not controlled by changes of the tariff, but corresponds so perfectly with changes of the currency as to demon strate that imports are either controlled by the currency, or that both are controlled by some third cause independent of changes of the tariff. CURRENCY AND IMPORTS. 31 consideration will remove that idea from the mind. The currency is used in performing the domestic exchanges of the whole country, and these amount to thousands of millions in value, while importa tions amount only to hundreds of millions. In foreign exchanges, only a small part of our currency, namely, the specie, could be used, and it will appear that the quantity of specie in the country has va ried very differently from the quantity of currency. Yet the changes o^ currency not used in foreign trade correspond exactly, while the quantity of specie which may be used in foreign trade does not correspond with the movement of imports. It is not reasonable to suppose that the variations of a currency used for domestic exchanges amounting to thousands of millions have been controlled by a foreign trade amounting to hundreds of millions only, in which that currency has not been used, while the movement of specie, which may have been used in those foreign exchanges, has not been so controlled. Yet the correspondence of facts demonstrates that some relation of cause and effect exists. We are forced to believe, either that the quantity of imports for consumption is controlled by the quantity of currency, or that both 4 are alike controlled by some other cause. If the latter hypothesis be adopted, it is enough for the present purpose to know that this other cause cannot be the changes of the tariff. A comparison of the lines representing the movement of currency and of imports with the diagram showing the percentage of duties to imports under different tariffs will show how complete is the lack of correspondence, and will convince every mind that the controlling cause of fluctuations in the currency or in imports, whatever it may have been, has certainly not been the change in tariffs. These com parisons show that imports have repeatedly increased or decreased greatly, while the tariff has remained substantially the same, and that increase of duties has neither been followed uniformly by de crease nor by increase of imports, nor has decrease of duties been followed uniformly by increase or decrease of imports. In short, whatever the real cause of large importations may be, whenever that cause has existed, imports have increased in spite of high duties or low duties, tariff reduction or tariff increase, and, whenever that cause has been removed, imports have fallen off whether the duties have been heavy or light, increasing or decreasing. But, in each of these changes, imports have corresponded with the changes of cur rency. When currency is expanded, money is plenty, and is easily ob tained for tlic transaction of business including the importation of 32 DOES PROTECTION PROTECT? foreign goods. High prices and expansion of currency occur contem poraneously, and when currency is contracted low prices prevail. But high prices invite the seller. Whenever prices in this country are higher than in other countries, importation becomes profitable, and goods rush hither for sale. At such times, also, abundance of money stimulates other branches of business, people feel able to consume more largely of foreign products, and have plenty of money with which to buy. There is an easy money-market for borrowers, a profitable margin for importations, and a quick sale. If water will run down-hill, foreign goods will flow into a country where these conditions exist. But, when the currency is contracted, and low prices prevail, the margin of profit in importations narrows or closes, the seller is repelled, money is scarce for borrowers, and there exists a general contraction of business and purchases. Thus it is easy to see that the condition of the currency must affect importations, while the facts prove that in all changes the correspondence has been com plete. It is not necessary in this inquiry to enter upon that much- debated question whether expansion of currency is a cause or con sequence of high prices, nor to ask whether some other cause, con trolling at once domestic exchanges, foreign importations, and movements of currency, may not produce the parallelism observed in the phenomena. But the parallelism between these events, and the non-correspondence between changes of importations and changes of tariff, leave no room to doubt that the tariff does not control im portations, and that they are controlled either by the currency or by some other influence coinciding and cooperating with that, and not coinciding with the tariff in effect. It has been claimed that the great periods of inflation, specula tion, and subsequent prostration, occurring under low tariffs, have been caused by the tariff; that excess of foreign importations has produced bankruptcy ; and that these disorders can be prevented only by protective duties. If the conclusions be accepted to which facts have led us, it will be conceded that the excess of importations was a consequence and not a cause of the expansion of the currency; that changes in foreign trade amounting to hundreds of millions can not have produced an inflation of the currency used in domestic exchanges amounting to thousands of millions ; and that the low tariff, if it has in any manner contributed to cause the inflation, can have done so only by producing such activity of domestic business, such vigor of production, such a demand for consumption, and such rapidity of the societary circulation, as to bring about expansion of CURRENCY AND IMPORTS. 33 currency and rise of prices. In other words, low duties so greatly promoted the prosperity and stimulated the business and industry of the country, that men anticipated too bright a future, that credit was too widely extended, that currency expanded beyond the limit of safety, and some temporary revulsion became necessary to correct the evils engendered by a prosperity too great and too rapidly at tained. If the advocate of protective duties is driven to this position, it will rest with him to show that we cannot secure all the wonder ful growth resulting from low duties, without the disasters which have followed, by legislative barriers against undue expansion of the currency. It will rest with him to show that the evils which he ascribes to the tariff were not wholly attributable to the lack of a proper system of currency and banking. It will rest with him to show, also, that the marvellous progress under low duties was more than balanced by the disasters of subsequent prostration. But these periods of inflation deserve separate consideration. COMMERCIAL CKISES. No discussion of the tariff question is conducted without frequent reference to the great commercial disasters of 1817, 1837, and 1857. Other seasons of prostration have indeed occurred, but they have been less severe, less extended in effect upon different industries, and are therefore less frequently referred to in discussion. Before proceeding further, we may well notice briefly the nature and causes of these revulsions. It may appear that, in selecting these for fre quent reference, both advocates and opponents of protection have given peculiar attention to those very disasters which were in the least degree produced by changes of duty. In each case, unnatural expansion of the currency and the credit system and the resulting failure of banks were the immediate causes of disaster, but it is main tained by writers of reputation that the speculation and expansion were produced or greatly increased by unrestricted importations, and that the flood of foreign goods, breaking down our domestic industry, caused the subsequent failure of banks and contraction of- currency. Of the revulsion of 1817, at least, this cannot be pretended with any regard to the facts. The expansion began, and extended so far as to cause general suspension of the banks, during the war, when our foreign trade was almost wholly interrupted. The suspension of banks began in Philadelphia, August 29, 1817, and the banks of Xew York and Maryland followed September 1st. In that same 34 DOES PROTECTION PROTECT? year the imports were only $12,965,000 less than in any other year in our whole history. The treaty of peace was signed on the 24th of December, and in the next year, after the suspension of the banks, the flood of foreign goods came in. It cannot be said, then, that the expansion or suspension was caused by any excessive importations. In fact, they were caused by the measures used by the government to carry on the war ; the loans amounting to over sixty-two millions in the three preceding years, and to thirty-five millions in 1815 ; the charter of countless banks, and the authorization of banking, manufacturing, and even bridge corporations, to issue paper-money. Forty-one banks were authorized in the State of Pennsylvania alone, within the six months preceding the suspension. In consequence, specie bore a premium of about twenty per cent, before the banks failed, and the revival of foreign trade with a flood of depreciated paper-money in circulation, and with all prices enormously high, was necessarily most injurious to industries already much embarrassed. Relieved of all obligation to pay in specie, the banks loaned without measure, and increased their issues greatly, and a year or two of fictitious prosperity followed, but the attempt to resume specie pay ments brought all the unsoundness to light, and caused terrible dis tress. The government refused to receive paper-money after Feb ruary 20, 1817; the United States Bank and branches went into operation at the same time, forcing other banks to resume ; and in the December previous the Bank of England, after suspension since 1797, began to pay specie for small notes. These measures brought on a general bankruptcy, a suspension of business, domestic and foreign, and severe sufferings, which lasted until 1820. Thi brief review shows that no excess of foreign importations caused the infla tion and the breaking of the banks, but it occurred under a suspen sion of foreign trade more complete than the highest tariff could have produced ; that the flood of foreign goods, which continued until the resumption of specie payments and the violent contraction of the currency, was caused by the inflation and the attendant high prices ; that the contraction was not caused by any change of tariff, but by the refusal of paper by government and the United States Bank, and that the contraction of currency brought with it bankruptcy and dis tress, as well as a decrease of importations. Scarcely less clear is it that the inflation which culminated in the panic of 1837 was caused not by the tariff, but by other agencies. It occurred in a time of wonderful prosperity, and when duties had been not violently but gradually reduced from the maximum at- CURRENCY AND IMPORTS. 35 tained in 1832. That the reduction of duties caused neither the excessive importations nor the expansion of currency appears from the fact that both began, as has been shown, in 1830, before any reduction of duties took place (except on coffee, tea, and molasses, duties on which were reduced in that year), and that neither con tinued as the reduction of duties progressed after 1837. Indeed, so plain is it that excessive importations did not prostrate our industry, that Mr. Carey, in a pamphlet discussing the history of the iron manufacture, absolutely ignores the panic of 1837, and does not dis cover that there was any difficulty until 1839 or 1840. His readers were doubtless astonished to find the great collapse of 1837 sup pressed by a writer so distinguished, but they will search his reply to Mr. Wells, and some other pamphlets by him, in vain for any evidence that he had ever heard of that event. The reason is ob vious. The production of iron continued to increase, in spite of re duced duties and foreign importation s^ until 1839 or 1840, and that writer therefore found it inconvenient to refer to the prostration of 1837 without suggesting another and more reasonable cause for the embarrassments of 1840 than the reduction of duties. By all writers of that time, the unsoundness of the currency is regarded as the main cause of the disaster. But, in the heated con tests of those days, the cause of that unsoundness does not seem to have been clearly set forth. Intense hostility to the National Bank, or to the State banks selected for custody of the deposits, led people to ascribe all disasters to official action in one direction or another. Nor can it be doubted that the distribution of twenty-eight millions of the surplus revenue to certain State banks, with scarcely-needed injunction to loan it liberally, poured oil on flame already too fierce. But the main cause of the inflation, as the records of that time seem to prove beyond doubt, w T as the speculation in Western and South ern lands. This speculation was in part the effect of causes easily discovered. The Erie Canal, completed in 1825, soon began to in crease very rapidly the value of Western lands, to attract immigra tion to the Western country, and to build up thriving towns along the lakes. In 1830 the steamboats on the Western rivers numbered 130, and their tonnage was 63,053 ; in 1834 the number was 230, and the tonnage 122,474; and in 1837 the tonnage had increased to 153,661. Thus the successful and extensive use of steam-vessels, and the building of canals, the Erie and others, had greatly increased the value of Western lands. At the same time the price of cotton rose in Liverpool from six to eight and ten cents for uplands, and 36 DOES PROTECTION PROTECT? the price of cotton lands was greatly increased. Every natural and legitimate increase in the value of a species of property induces speculation in that property in anticipation of further advance, and that speculation itself, increasing the demand, contributes to produce a further advance. Thus there sprang up a traffic in land of which the following record of the receipts from sale of public lands gives proof:* RECEIPTS FROM SALE OF PUBLIC LANDS, t YEAR. Amount. YKAB. Amount. YEAH. Amount. 1796 $4 836 13 1821 $1 212 966 46 1845 $2 077 022 30 1797 83,540 60 1822 1,803,581 54 I 1846 2,694,452 48 1798 11 963 11 1823 916 523 10 1847 2,498,355 20 1799 1824 984,418 15 1 1848 3 328 642 56 1800 443 75 1825 . 1,216,090 56 ! 1849 1,688,959 55 1801 167 726 06 1826 1,393 785 09 1850 1,859,894 25 1802 188,628 02 1827 1,495,845 26 1851 2,352,305 30 1803 165,675 69 1828 1,018,308 75 1852 2,043,239 58 1804 487 526 79 1829 1,517 175 13 1853 .. . 1 667,084 99 1805 540 193 80 1830 2 329 356 14 1854 8 470 798 39 1806 765,245 73 1831 . 3,210,815 48 1855 11,497,049 07 1807 466 163 27 1832 2,623 381 03 1856 . . 8,917,644 93 1808 647,939 06 18,33.. 3,967,682 55 1857... 3,829,486 64 1809 442,252 33 1834 4.857,600 69 1858 3,513,715 87 1810 696 548 82 1835 14 757 600 75 1859 1,756,687 30 1811 1 040 237 53 1836 24 877 179 86 1860 . 1 778 557 71 1812 710,427 78 1837 6,766,236 52 1861 870,658 54 1813 835,655 14 1838 3 081 939 47 1862 . .. 152,203 77 1814 1815 * 1,135.971 09 1 287^959 28 1839 1840 7,076,447 35 3,292,683 29 1863 1864 167,617 17 583,333 29 1816 1 717 985 03 1841 1 365 627 42 1865 966,553 31 1817. . . 1,991,226 06 1842 1,335,797 52 1866 665,031 03 1818 1819 2,606,564 77 3274,422 78 1843 1844 .. . . 897,818 11 2,059 939 80 1867 1868 1,163,575 76 1,348,715 41 1820 1,635,871 61 It appears that the receipts prior to 1830 had never been two mill ions in any year except in 1818 and 1819, although the minimum price prior to 1820 was $2 per acre, and from 1820 onward only $1.25 per acre ; that in the year 1830 there began a purchase of lands more than double the average of preceding years, doubtless owing to the actual enhancement in the value of Western lands by cheaper transportation ; that in 1833 the receipts were about four millions, and in 1834 about five millions ; that a speculative demand then grew up, and in 1835 the receipts mounted suddenly to over four teen millions, and in 1836 to nearly twenty-five millions. During the whole decade prior to this speculation there had never been more than two millions of acres sold in a year, but in 1835 there were sold twelve millions, and in 1836 about twenty millions of acres. Not all the enormous immigration since that day, not all the excitement * In the chapter on immigration, Diagram X., will be found a representation of the sales of public lands at different periods. | Report of Secretary of the Treasury, 1868. CURRENCY AND IMPORTS. 37 caused by the discovery of gold and silver, not even the enormous increase in the value of Western lands, after the building of new railroads in 1854 and 1855, caused sales of land in any year one-half as great as those of 1836. This record will recall to the minds of those who remember that time the mad speculation which raged throughout the country. The sales by government were but the be ginning of transactions of enormous magnitude. Paper cities sprang up at the West and South by the hundred. The lands for which forty millions of dollars were paid to government in the two years 1835 and 1836 were quickly sold and sold again, doubtless for four or five times that sum, and for all these transactions the currency and the credit were supplied by the banks. Enormous sums were loaned upon real-estate security, and the lands were accepted at the imaginary value which speculation had given to them. Of the three hundred millions then loaned by the banks, much the greater part had no better security than government lands thus extravagantly valued, paper cities projected thereon, and corner lots and eligible locations in every Western and Southern city. For the speculation was not confined to wild land or cities " in nubibus" as may be in ferred from the following record of the valuation of real estate in Mobile, and the assessment of property for taxation in New York City: YEAR. 3 Polls. lOBELE. Real Estate. NEW YORK. Assessed Value. YEAR. MOBILE. NEW YORK. Assessed Value. Polls. Real Estate. 1820.. 88 $493,300 $69.530,753 1836.. 617 $18,050.080 $309.500.920 1821. 211 403.200 68,285.070 1837.. 836 27,482,961 263,837.350 1822. 287 419^550 71,289.144 1838.. 1,487 20.407:435 264. 152.941 1823. as2 989.350 83.431.170 1839.. 1,725 21,098,915 266.789,130 1824. 512 832.125 87,480.026 1840.. 1.453 13.441,783 252,8-13.163 1825. 334 1,519,765 101,160,046 1841.. 1,372 17,601,950 251,771,702 1826. 407 1,535,640 107,447.781 1842.. 1,615 16,138.643 237.806.901 1827. 471 1.408,327 112.211,926 1843.. 855 14,773,470 228.001.889 1828. 527 1,483.168 111,130.240 1844.. 452 14.053.056 235;960:047 1829. 402 1,891,760 112,526,016 1845.. 943 12.622,085 239.995.517 1830. 531 2.162.770 125.288,518 1846.. 12,854,650 244,952,404 1831. 417 1,294,810 139,280,314 1847.. 8,638,250 247.152.3a3 1832. 764 2.623,110 146,302,618 1848.. l ,2i7 8.943.810 254,192.027 1833. 898 3,377,649 166,495,187 1849.. 1,607 9,300,930 256.217.093 1834.. 980 4,611,950 186.548.511 1850.. 1,400 8.577.025 286.085.416 1835.. 788 6,414,425 218,723,703 1851.. 1,554 11,698,045 320,108,358 The official assessments for taxation are given, the only records accessible, although they do not accord with actual values, because they probably bear nearly the same relation in different years to the supposed value. Mobile and New York probably represent two extremes ; the former, a class of cities in which speculation was most wild, and the latter, those older cities which were affected by 38 DOES PROTECTION PROTECT? the mania in a less degree. In New York, however, the valuation began a natural increase in 1829, and, during the speculation, more than doubled in four years. But in Mobile, where the valuation was larger than ever before in 1832, and was then only $2,623,110, it rose to six and a half millions in 1835, to eighteen millions in 1836, and to twenty-seven millions in 1837. Not less than twenty millions of this increase was imaginary, and the population, as indi cated by the polls, had scarcely increased at all. If we suppose that a large part of the land taken from government was held at similar extravagant prices ; that land in other Western and Southern towns and cities was bought and sold in the same wild fever ; and that even in the oldest Eastern States the valuation of property doubled in four years, we shall understand what pressure there was in every quarter for loans of money, and on what imaginary security all loans were based. To this insane passion for gambling in real estate, and to the enormous loans made on property valued at fictitious rates, whether in city, projected city, town, or prairie, are directly trace able the inflation and the subsequent explosion of 1837. Will any one pretend that this speculation was caused by the tariff ? Was there at that time any extravagant importation of foreign lands ? By writers who do not trouble themselves to consult facts, it has indeed been suggested that this speculation was caused by the with drawal of capital from manufacturing, which importations, it is imagined, had rendered unprofitable. But two facts make an end of that theory. The speculation, increased valuation, and in-|^ creased purchase of lands, as -the statistics given prove, actually | commenced in 1830, two years before the tariff was changed ; and in every branch of manufactures there were great prosperity and rapid growth during the whole period of inflation; so that more capital was invested, and the product yearly increased, as will fully appear when the progress of manufactures is discussed. Indeed, it is because this increase in manufactures cannot be denied or explained away that Mr. Carey takes pains to forget that there was any panic in 1837 ! The cause of the inflation has been ascertained. It only remains to show that the tariff was equally guiltless of the subsequent ex plosion. Indeed, no argument is needed to prove that the explosion of such a bubble was an inevitable consequence, not of low duties or large importations, but of the hollowness of the whole system of currency and credit. Loans and paper-money alike had corner lots in paper cities for their only security. Increase of the circula- CURRENCY AND IMPORTS. 39 tion swelled values, and thus enticed thousands more into the mad whirlpool. Paper-money pervaded the air. The government threw its surplus revenue into the vortex, and begged the banks to lend it. For a few short months everybody went on getting enormously rich, in dreams, and then the bubble burst, and with it exploded almost every bank in the country. Shall we ask what caused the bubble to burst ? "What explodes the boiler when the captain has been sitting on the safety-valve ? Failure of crops helped both to produce the explosion and to aggravate its effects. But the main cause was the steam in the boiler the expansive force of a crazy laud speculation. A partial resumption was reached in 1838 ; but the volume of currency and the load of debt, sustained only by imaginary pros perity, were too vast. A second suspension was followed by a throwing out of worthless banks and their notes, and a shrinkage of currency and prices. Then, thousands of firms were driven to bankruptcy, and manufacturing establishments, which had thriven when foreign importations were large, went to ruin when those importations had almost ceased ! And this prostration of industry, which did not precede, but followed the shrinkage of values and the bankruptcy of firms and banks, is the event which Mr. Carey regards as the cause of the disaster. Ignoring the panic of 1837, and the fact that our industry had continued to thrive until after foreign competition had been checked, that writer and others point to the prostration of 1841 and 1842 as proof that the tariff of 1833 was fatal to our manufactures. With a like indifference to facts, they ascribe the subsequent recovery to the tariff of 1842. If a whole people stop gambling and wasting, and begin earning and saving, the inevitable effects are, first, dulness of trade and revival of industry; and second, steady and sure revival of both. The people had stopped gambling and wasting before the tariff of 1842 was adopted. They had begun to earn and to save. Many records prove that the revival of industry had already begun, and of these some will appear in con nection with the history of manufactures. Two items here must suffice. In 1841 there were 224,176 tons of freight moved from Western States or Canada eastward over the Erie Canal, and in 1842 there were 221,477, though in 1840 there were only 158,148, and in 1839 only 121,671. Receipts of flour, wheat, and other products at Buffalo, from the West, also show a steady increase from 1840 onward. The number of vessels built for domestic trade, 40 DOES PROTECTION PROTECT? including sloops, canal-boats, and steamers, was largely increased in 1842, and 137 steamers were built in that year against 78 in 1841, and 63 in 1840. Our foreign trade revived less promptly ; but the recuperation of domestic industry began as soon as the banks re sumed specie payments, and that was before the tariff of 1842 went into effect. The sure revival came because people had begun to live economically, and to earn their living by honest labor. Knowing that economy had begun, that specie payments had been resumed, and that industry had revived months before the tariff went into operation, we may unhesitatingly assert that prosperity would have come had no change in the tariff been made. To doubt it is to doubt that honesty and industry will , earn a living. To deny it is to deny that economy and faithful labor will secure prosperity to any people. The panic of 1857 was neither long continued, nor did it mate rially affect the productive power of the country. It was a collapse of the credit system rather than of the currency, and its cause is easily ascertained. Those who ascribe it to the importations of the preceding years seem to forget that those imports were more than paid for by our exports of surplus products. It was not a bankruptcy caused by buying more than we could sell ; on the contrary, our foreign trade was then in a peculiarly healthy condition. During the years 1851-1857 inclusive, we exported of merchandise, of domestic production, $1,476,672,650, and of specie, $269,616,413. The merchandise was valued in our own ports ; its purchasing power or exchange value in foreign ports was, at least, 15 per cent, greater; and, adding this, we have merchandise valued abroad at $1,718,873,547 to exchange for imports valued abroad at $1,783,926,710. Thus, in these seven years we almost paid for our entire imports in exports of merchandise alone, without counting the surplus of gold. Nor was the gold needed here ; our production was greatly in excess of our capacity to .use it as currency or otherwise, and though $264,616,413 was exported much of it to pay interest on loans, or dividends on investments, by European capitalists there still remained in the country more than we could advantageously use. The value of precious metals produced and added to our supply after the discovery of mines in California cannot be accurately ascer tained, but official estimates place the product of the years 1848- 1857 inclusive at not less than five hundred millions, and the records of the mint show that four hundred and thirty-eight millions had CURRENCY AND IMPORTS. 41 passed through that institution and its branches. It is safe to say that the product was, at least, four hundred and eighty millions ; and, as only two hundred and eighty millions were exported, there were added to the circulation or supply of precious metals in this country not less than two hundred millions a sum equal to the entire cur rency of the country, specie and paper included, in 1846. At the same time the paper circulation was also increased. The currency thus became greatly expanded; primarily, by the flood of gold thrown into circulation. Certainly no tariff caused, and none yet known among men could have prevented, this inflation ; but, if the tariff of 1846 stimulated importations, and facilitated the exchange of this superfluous metal for iron rails, to that extent it checked the inflation, and lessened the consequent disaster. For every increase oTcurrency, whether in specie or paper, tends to increase prices, and every increase of prices prompts to speculation in the hope of further increase. In its origin, then, the inflation prior to 1857 was a gold inflation. But a second cause operated more powerfully to accelerate the expansion, and produced the subsequent explosion. With the set tlement of new States, the rapid extension of the boundaries of civilization, the large immigration which followed the European famine of 1847, and the political disturbances on the Continent, came both the demand and the labor for the building of railroads. The flood of gold made money plenty. A low tariff made iron cheap. Roads built to supply the most immediate necessities were at once prosperous. Lands in the neighborhood were greatly enhanced in value. Then came a rush into railroad-building and land specula tion. Statistics of receipts from sale of public lands already given (page 36) show that the amount more than quadrupled in 1854, reached eleven and a half millions in 1855, and was about nine mill ions in 1856. But this movement was altogether subordinate to the growth of the railroad system. On page 42 will be found sta tistics of the number of miles of railroad built each year, and the diagram, " Iron, Coal, and Railroads," page 350, will clearly pre sent the facts to the eye. Only four hundred miles were built in 1848 ; then the number suddenly rose to 1,369 in 1849 ; to 1,656 in 1850 ; to 1,961 in 1851 ; to 1,926 in 1852 ; to 2,452 in 1853 ; and to 3,643 in 1856. In the years 1849 to 1857 inclusive, 18,212 miles of railroad were built, and the average outlay for track, rolling-stock, buildings, equipments, and repairs, was not less than $50,000 a mile. We have here an actual expenditure of $910,600,000 for railroad 42 DOES PROTECTION PROTECT? RAILROAD-BUILDING. Statement of the Number of Miles of Railroad in Operation, and Increase of Mileage each Year, since 1830. TEAR. Miles in Operation. Increase of Mileage. YEAR. Miles in Operation. Increase of Mileage. 1830 23 1850 9,021 1 656 1831 95 72 1851 10,982 1,961 1832 229 134 1852 12,908 1 926 1833 380 151 1853 15,360 2,452 1834 633 253 1854 , 16,720 1,360 1835 1 098 465 1855 18 374 1 654 1836 1 273 175 1856 22,017 3,643 1837 1,497 224 1857 24,508 2,491 1838 1,913 416 1858 26,968 2,460 1839 2 302 389 1859 28 789 1 821 1840 2 818 516 I860 30,635 1,846 1841 3,535 717 1861 31,256 621 1842 4026 491 1862 32,120 864 1843 4,185 159 1863 33,170 1,050 1844 4 377 192 1864 33,908 738 1845 4,633 256 1865 35,085 1,177 1846 4 930 297 1866 36,827 1 742 1847 5,599 669 1867 39,276 2,449 1848 5 996 397 1868 42,255 2 979 1849 7,365 1,069 purposes. Of this vast sum, nearly one thousand millions, it is well known that a large proportion was invested in works not immediately profitable; indeed, few of the roads returned fair dividends until after the crash of 1857. A sum so enormous could not be directly withdrawn from the productive capital of the country, and, of neces sity, most of the roads then built were constructed mainly on credit. Stocks and bonds were thrown upon the market, or used as securities to sustain loans, and to meet the demand the banks * expanded their circulation from one hundred and twenty-eight millions in 1848, to $214,778,822 in 1857, and their current credits from two hundred and eighty-one millions to four hundred and forty-five millions. Thus rapidly expanding to sustain these enterprises, the whole banking system soon came to depend for its stability upon the value of railroad securities. When loans were not made directly upon stocks or bonds, the banks loaned to individuals or corporations whose whole capital or more was so invested ; brokers were sustained whose operations in stocks went far beyond their actual means ; and thus, directly or indirectly, the whole credit system of the country became * See table of the condition of the banks at different periods, following this chapter. CURRENCY AND IMPORTS. 43 dependent upon the success of new railroads which were being built through half-settled regions at the rate of three thousand miles a year ! Can any one wonder that the collapse came ? Most of the railroads did not pay. The stocks and bonds lost value. Individuals and firms became bankrupt. Finally, with the fall of a prominent institution which had speculated largely, general prostration came. Yet this is the panic which Mr. Carey and others, with prodigious stride of logic, attribute to the reduction of duties in 1846, eleven years before ! Every reader will judge for himself whether the cause of this disaster was a foreign trade which gave a balance of two hundred millions in our favor exchange value of merchandise being allowed or the investment of one thousand millions of dollars in roads temporarily unprofitable. It will, however, be said, and said with truth, that the country would not have built so many railroads had not the iron been ad mitted at low duty. It is true that, if iron had then cost what it costs now, the vast net- work of railroads built in 1849- 57 would not now be in existence. Would the country be the gainer ? Thou sands of men sunk their property in these enterprises, but was not the nation enriched and strengthened beyond all estimate? Let those answer whose farms have been quadrupled in value ! Let those answer who have since been enabled, by those very railroads, to develop mines and erect factories and mills, in regions before inaccessible ! The railroads constructed in that period have done more to protect American industry, by building up a home market and rendering possible an increased production of wealth, than all the tariffs, high or low, ever yet adopted. To those railroads we owe the growth of manufactures in spite of the war, in spite of em barrassing duties on almost every material, and in spite of large im portations which an inflated currency has invited, and which no protective tariff can shut out. To them we owe no small share of the enormous immigration which adds yearly to our population a quarter of a million of workers. To them we owe, in no inconsider able measure, the stability of the Union itself, for the railroads of the North multiplied its forces, and made possible some of its best feats of generalship. The phenomenon of 1837 was the explosion of a currency sj^stem corrupted by speculation in real estate. The phenomenon of 1857 was the explosion of a credit system built upon an investment of one thousand, millions of dollars in eighteen thousand miles of new 44 DOES PROTECTION PROTECT? railroad through a half-settled country. The first originated in the legitimate increase in the value of Western lands by the opening of the Erie Canal and other improved facilities of communication. The second originated in the flood of gold from California. In both cases the increase of importations was a consequence and not a cause of the inflation, and the bursting of the babble and suspension of the banks would have occurred, in both cases, as the suspension did in 1814, although foreign trade had been wholly stopped. In each case, also, the suspension was followed by an attempt to go on with out material reduction of values, and by the failure of that attempt. In each case, the people came back, before any change of tariff, to more solid values, to more real business, and began again that sober industry and economical life which make prosperity certain. BANKS OP THE; UNITED STATES CONDITION AT DIFFERENT TIMES. YEAB. Specie. Circulation. Deposits. Current Credits. 1811 $15,400,000 $28,100,000 1815 . 17,000,000 45,500,000 1816 19,000,000 68,000,000 1820.. . . 19,820,240 44,863,344 $ 35,950,470 $80,813,814 1830 22,114,917 61,323,898 55 559 928 116 883 826 1833. .. 30,600,000 80,000,000 1834. . 35,000,000 94 839 570 75 666 986 170 503 556 1835. . 43,937,625 100,602,405 83,034,365 131 773,860 1836 1837.. . 40,019,594 37,915,340 140,301,038 149,135,990 115,104,420 127,397,185 276,495,478 276 533 075 1838 . 35,184 112 116,138 910 84 691 184 200 830 694 1839 45,132,763 135,170,995 90,240,146 225,411 141 1840 33,165,155 106 986 572 75 696 857 182 665 439 1841 34,818,913 107,290,214 64 890,101 172 180315 1842 28,440,423 83,734,011 62,498,870 146,142,881 1843 33,515,806 58,653,603 56 163,623 114 732 231 1844 1845 49,898,269 44,241,242 75,167,646 89,608,711 84,550,785 83 020,646 159,718,431 177 629,357 1846.. . 42,012 095 105 552 427 97 918 020 202 465 497 1847 35 132 516 105 519 766 91 792 533 197 312 299 1848 46,369,765 128 596 091 108 226 177 281 732 263 1849 43 619 863 114 743 415 91 178 623 205 922 033 1850 1851 45,379,345 48,671,048 131,366,526 155,165,251 109,586,595 128 957,712 240,953,121 284 122 963 1854 59,410,253 204 689 207 188 188 744 392 877 951 1855 53,944 546 186 952 223 190 400 342 377 352 565 1856 59,314,063 195,747 950 212 705 662 408 753 612 1857 58,344,838 214 778 822 230 351 352 445 130 174 1858 74,412,832 155,208,344 185,932 049 341 140 393 1859 104 537,818 193,306 818 259 568 278 452 875 096 I860 83,594,537 207,102,477 253,802,129 460 904 606 1861 87,674,507 202,005,767 256 229 562 459 235 329 1862 102,146,215 183,792,079 297,322,408 480 114487 1863 101,227,369 238,677,218 393,686,226 632,363,444 HIGH TARIFFS CHECK EXPORTS. MASSACHUSETTS BANKS. 45 TEAR. Bills in Circulation. TEAK. Bills in Circulation. 1815 $2,605,611 00 1834 $7,650,146 75 1816 2,332 100 00 1835 9,430,357 72 1817 2,482,500 00 1836 10,892,249 50 1318 2,631,150 00 1837 10,273,118 71 1819 2,437,802 00 1838 9,400,512 75 180 . 2 562 000 00 1839 7,875,322 50 1821 2,859,540 00 1840 9,112,882 25 1822 3,096 800 00 1841 9,509,112 00 1823 3,145,010 00 1842 8,049,906 75 1824 3,742,231 00 1843 9,219,267 50 18-^5 3,508,100 00 1844 12,183,158 25 18 9 6 3,644,400 00 1845 14,339,686 00 1827 6 567 606 50 1846 14 591 914 50 1828 5,034,593 50 1847 17,196,362 25 1829 4 747 784 50 1848 . . 13 196 029 00 1830 5,124,090 00 1849 15,700,935 25 1831 7 739 317 00 1850.. 17,005 826 25 1832 7 122 856 00 1851 19 694 698 25 1833 7,889,110 67 CHAPTER IV. HIGH TARIFFS CHECK EXPORTS. Ix every fluctuation imports follow currency. With the certainty of a law of Nature, goods are attracted to the market where expanded currency and high prices exist, just as water runs down-hill, or air forces its way into a vacuum. But it has already appeared that ex ports do not obey the same influence, and that in certain periods of high duties or high prices our exports have been checked, while our imports have increased, thus turning the balance of trade against us. What laws, then, govern our exports ? An examination of the table of total exports and imports will suggest the fact that, except under unusual circumstances, imports have always exceeded exports in such proportion as to indicate a mutual exchange of products. To present the facts to the eye, a dia gram has been prepared (Plate II.), in which imports for each year since 1800 are represented by a full and exports by a dotted line, both being drawn on the same scale. The perpendicular lines opposite certain years indicate movements of specie ; the full line, imports; and the dotted, exports, and are also in proportion to the aggregates. By 46 DOES PROTECTION PROTECT? this diagram, the history of our exchanges with other nations during the current century is presented in a form to be readily understood. The interruption of our commerce during the War of 1812, the de pression of 1843, and the prostration during the recent war, at once attract attention, as well as the period of prosperity before the em bargo of 1808, the inflations of 1816 and 1836, and the enormous de velopment of our commerce during the decade 1850- 60. Less im portant changes next attract notice ; the year of prostration and the year of attempt to go forward without readjustment of values, which follow each inflation ; and the minor depressions of 1829 and 1830, of 1849 and 1855. Then the fact will be observed that, prior to 1855, when gold began to overflow, our imports always exceeded our exports, except in certain years. Omitting the period of the War of 1812, we find that exports first rose above imports in the year 1821, the year of greatest depression after the suspension of 1814. The next instance was in 1825, when a peculiar demand existed in Eu rope. For the same reason, 1847, the year of famine, may be omit ted from further consideration. In 1827 and 1830 our industry was greatly depressed. In 1840 culminated the disasters caused Iby the land mania. Thus, prior to the overflow of gold, our imports never fell below our exports except in years of famine abroad or prostration and disaster at home. The_jear^ of jgrostration and disaster are years of extreme low prices, which favor exports but repel imports. Our foreign trade, except in such periods of disaster, is an ex change of products, in which the imports valued abroad naturally exceed the exports valued here. Unless under stress of commercial disaster, we cannot sell more than we buy. But we can and do buy more than we sell, especially in every period of inflation. Then prices here are high, so that exportation of our products becomes un profitable, except as the foreign price of those products may be con trolled by our own. And, even then, the enhanced price tends to check foreign consumption. Accordingly, periods of inflatioji are those in which imports most largely exceed exports. Hogk-prjces here, as compared with prices in other countries, favor the foreign industry and operate against our own industry. It will, however, be said that this idea of exchange is not con sistent with rules generally accepted ; that Mr. Mill and other dis tinguished authors teach that a nation cannot buy more than it sells, and that our imports must therefore by controlled by our exports. It would, doubtless, be a mistake to suppose that any eminent writer had overlooked the fact that of two nations trading with each other HIGH TARIFFS CHECK EXPORTS. 47 it is impossible that the imports of each should be controlled by its exports. If we exchange cotton for cotton goods with England, a refusal on our part to take goods must cause England to diminish her purchases of raw cotton, until an equal market for her products should be opened elsewhere, and thus, in this case, our imports con trol our exports, while Britain s exports control its imports. But Mr. Mill undoubtedly teaches that in the long-run a nation s pur chases will not exceed its power to pay by its exports. There is a feature in our condition which may render the rule less applicable to us than to older nations. This is a new and rapidlv-^rrowing country, and offers a peculiarly inviting field for foreign investments or loans of capital"."" Tri times of rapid development, when lands quickly double in value, when mines of vast wealth are opened, or when railroads are pushed forward, making business for themselves and creating civilization as they advance, it is natural that foreign capi talists desire to share in the enormous profits, and it is certain that our people, needing increased capital, have both sought and found it in Europe. The sale of bonds or shares, though not represented in our export account, is in fact an important and constant element in our transactions with Europe, and especially important in times of speculation or rapid development. Prices here being unnaturally high, the importer, S., will import as largely as he can. Speculation being rife, the real estate, or railroad, or mining operator, R., will desire to place bonds or shares or to effect loans in Europe. Interest here being high, and the rapid growth of the country giving com parative certainty to enterprises which might otherwise be hazardous, European capitalists are prompted to invest. S. buys an enormous stock of goods, and at the same time R. sells abroad a quantity of shares or bonds. S. buys in the New- York market a draft on Lon don to pay for his goods, and at the same time R. sells in the New- York market the draft which he has received in payment for bonds or shares. Thus it happens that the importer has not run into debt, but is doing a prosperous business, while the country has imported more than it can pay for ; in other words, we have bought goods or iron, and paid in bonds or shares. Our imports may have created in England an increased demand for raw materials, and may thus in crease exports as far as we supply that demand, but the same inflation has so enhanced the price of those of our products which can be elsewhere produced as to prevent our exports from rising in propor tion to our imports. Precisely this phenomenon we have observed as occurring in 1836, and in recent years. 48 DOES PROTECTION PROTECT? Not only in times of inflation, but under ordinary circumstances, our rapid growth and healthy progress invite investment of foreign capital. This country, always needing capital, constantly seeks to borrow as largely as anybody will lend. J^Tor is this altogether an evidence of folly : our resources yet undeveloped are so great, and our progress is so rapid, that many millions can at any time be invested in enterprises reasonably certain of ultimate profit, though, in older countries, similar undertakings might be most hazardous. Hence, as a nation, we are naturally and legitimately borrowers, and the loans of foreign capital form a fund upon which we can con stantly draw for payment of imports in excess of exports. In the end, perhaps, we must repay in profits, dividends, interest, and prin cipal, as much as we borrow ; but that fact has never yet restrained us from importing more than our exports; nor will it until this ceases to be a country where capital can be profitably invested. If these reasonings are correct, and applied to the condition of this country thus far they certainly accord with ascertained facts : it follows that, in any year, or during any ordinary term of years, our imports have not been limited by our exports, while our exports have been limited by the law of exchange. Let us now inquire what effect, if any, tariffs have had upon our exports. It is plain that if they have diminished our importation of manufactured products, they may have checked, the. .exportation of the materials ; and, if they have increased prices, or caused infla tion, they have checked exports, and placed our industry at a (iigadr^ vantage in foreign markets. TtTis important, first, to separate the exports of specie from those of merchandise. No tariff gives us the specie-producing power. It may be doubted whether any tariff can cause specie to flow into a country, or arrest its outflow, and, whether, could either be done, it would be advantageous. Specie, beyond the quantity needed to facilitate exchanges, is a non-productive investment, and may be advantageously exchanged for any products of other countries which enable us to increase the production of wealth, which improve the condition of the people, or which, being necessary for use, can be obtained cheaper than we can produce them, thus enabling our own labor to be more profitably employed. The table on page 49, of exports and imports of specie since 1820, gives only the excess of either in each year, showing at a glance the move ment at different periods, and in the third and fourth columns is shown, for each year, the aggregate excess of imports or exports from 1820 to 1869. These tables show that under the protective system, HIGH TARIFFS CHECK EXPORTS. 49 MOVEMENT OF SPECIE. YEAR. Excess of Exports. Excess of Imports. Balance of Exports. Balance of Imports. 1821 $2,413,169 $2413,169 1822 7 440 334 9 853 503 1823 1,275,091 11 128,594 1824 $1,366,148 9,762,446 1825 2,646,290 12 408,736 1826 2,176,433 10,232,303 1827 136,250 10,096,053 1828 753 735 10 849 788 1829 2,479,592 8,370,196 1830 5,977,191 2,393,005 1831 1,708,986 - 4,101,991 1832 251,164 3,850,827 1833 . 4,458,667 $607 840 1834 .... 15,834,874 16442 714 1835 6 633 672 23 076 386 1836 9,076,545 32 152931 1837 4,540,165 36,693,096 1838 14,239,070 50932 166 1839 3,181,567 47,950,599 1840 465,799 48 216 398 1841 6,045,699 43,170,699 1842 726 523 42 444 176 1843 20,869,768 63,313,944 1844 376 215 63 690 159 1845 4 536,253 59,164,906 1846 127536 59 037 370 1847 .... 22,214,265 81,251,635 1848 9481 392 71 770,243 1849 1,246,592 73,016,835 1850 2 894 202 70 122 633 1851 24,019,160 46,103,473 1852 37 169091 8,934,382 1853 23 285 493 14 351 111 1854 34 342 162 48 693 273 1855 52,587,531 101 280,804 1856 41 537 853 142 818 657 1857 56,675,123 199,493,780 1858 33 358 651 232852431 1859 56,452,622 289,305,053 I860 57 996 104 347301,157 1861 16,548,431 330,752,726 1862 20472688 351,225,414 1863 54,672,506 424,005,791 1864 92 128 738 515,975,835 1865 . 57,833,154 573,808,989 1866 75 343 979 649,152,968 1867 38,797,897 687,950,865 1868 80081 660 768,032,225 1869 37,301,426 805,338,651 from 1820 to 1825 inclusive, gold flowed out of the country to the amount of twelve and a half millions ; that the higher tariff of 18M but slightly reduced the excess of exports to about eleven millions in 1828 ; and that the extreme protective tariff then reduced it to 50 DOES PROTECTION PROTECT? about four millions in 1832. The first year of the compromise tariff, 1833, is also the first year in which the balance was turned to the side of imports, and, from that time, imports, every year until 1838, raised the excess of imports to fifty-one millions. The years 1839 and 1841 reduced this excess by more than eight millions, but the year of extreme depression, 1843, raised it again to sixty-three millions. The other years of the tariff of 1842 caused a slight reduction ; but the famine in England lifted the balance to $81,251,635 the highest point of excess of imports. At that point, the supply of California gold changed the current, and by the year 1854 the exports had again exceeded imports. Since 1850 we have been, exporting gold largely in every year, except 1861 another year of great depression. Since the discovery of gold in California, an outflow of that metal has been not only natural, but necessary. The effects of different tariff systems can only be inferred from the movement prior to that event. The record indicates a more steady influx of gold under the compro mise tariff than under either of the protective tariffs ; but it must be observed that the influx was greatest in the year of extreme prostration after the protective tariff of 1842 was adopted. These facts warrant only negative inferences that an influx of gold is neither an unerring symptom of health, nor of disease ; that it has not been caused exclusively by any form of tariff; and that the " drain of gold," which some writers ascribe to the system of low duties, has existed only in their imaginations unless, indeed, they mistake the overflow since the opening of California mines for an unnatural drain. If so, the outflow since 1861 has been still greater. But, if we observe the large importations of gold in years of disaster in 1829 and 1830, in 1838 and 1843, and in 1861 we shall, per haps, be inclined to regard an influx of gold as a very questionable boon. Spain has done much to teach civilized nations the folly of trying to hoard gold. Her many and stringent laws, designed to prevent the outflow of precious metals, have not made Spain either prosperous or wealthy. Having examined the movement of specie, we may now ascertain the effect of tariffs upon exports of other products of our industry. In a table at the close of this chapter will be found a statement of exports of domestic products, other than specie, each year since 1820 earlier Treasury records do not distinguish specie com pared with imports for consumption of foreign products, other than specie. For the present purpose, however, the following table will HIGH TARIFFS CHECK EXPORTS. 51 be more convenient, in which the rate per capita of net exports and imports of merchandise is presented, with the excess of net exports or imports of merchandise for each year. The exports since 1861 are reduced to specie values, and, as the Treasury year 1843 contained only nine months (September 30th to June 30th), the figures per capita given are four-thirds of the rate for actual exports and imports during these months. The table thus constructed gives a complete record of our exchanges of merchandise with foreign nations com pared with the progress of population. It is proper to remark that, in many of the Treasury reports, in tables of " foreign merchandise consumed," specie has, by some curious error, been included. EXCESS OF IMPORTS AND EXPORTS, AND THE RATE OF EACH PER CAPITA. TEAR. MERCHANDISE. SAMB CAP , Expt s. , PER ITA. Impt a. YEAR. MEBCHANDISE. SAMI CAI i Expt s. :, PEB ITA. J , Imp ti. Excess Export*. Excess Imp ts. Excess Exports. Excess Imports. 1821.. 1822.. 1823. 1824. 1825. 1826. 1827. 1828. 1829. 1830. 1831 $ 24.511 18,521.594 4,155,238 3,197,067 5,202,723 16,998,873 $4.38 4.84 4.45 4.64 5.98 4.56 4.86 4.09 4.40 4.53 4.45 4.50 4.99 5.56 6.69 6.92 5.97 5.97 6.12 6.56 5.92 5.09 *5.51 5.24 5.05 $4.39 6.64 4.84 5.77 5.92 5.01 4.58 5.49 4.38 3.91 6.22 5.50 5.96 5.99 8.13 10.31 7.17 5.41 8.79 5.07 6.56 4.88 2.68 5.07 5.41 1846.. 1847.. 1848.. 1849.. J1850.. 1861.. 1852.. 1853.. 1854.. 1855.. 1856.. 1857.. 1858. 1859.. I860.. 1861.. 1862.. 1863.. 1864.. 1865.. 1866.. 1867.. 1868.. 1869.. $34,317,249 $8,331,817 10,448429 1,055.027 29,133.800 21.856.081 40,456,167 60.287.983 61,937,155 38,899.205 29,212,887 54,604,582 $5.08 7.34 6.09 6.00 5.87 7.50 6.30 7.50 8.27 7.19 9.61 9.78 8.58 9.21 10.07 11.09 7.75 7.56 5.24 4.39 9.42 7.65 7.17 7.13 $5.50 5.67 6.57 6.05 7.13 8.42 7.94 9.89 10.65 8.64 10.67 11.70 8.28 10.49 10.71 9.02 10.66 9.23 11.11 699 11.92 10.27 9.27 10.52 $549,623 3,977,669 345 , 736 8,949,779 23.589 ,527 8 672,626 1832. 1833. 18:34. 1835. 1836. 1837. 1838. 1839. 1840. 1841. 1842. 1843. 1844. 1845. 9,608,282 25,410,226 3,80l ,924 40,462.449 3,141,226 13,601,159 13,519.211 6,349.485 21,548,493 52,240,550 19,029,676 38,431,290 20,040,062 6" 29l ,045 68,519.944 40,961,330 159.469,884 78.039,194 88,971,936 95.569,045 78,507,168 131,094,035 44,245,283 11,140,073 7,144,211 There have been only twelve Jj^j^^HJ ^L 8 * ?! , sm ce 1820 in which^ffTeTex ports of domestic products have exceeded imports for consumption, and six of these were in times of protective duties ; but all, except 1847, were years of panic, distress, or prostration of our hifTustry, and 1847 was the year of famine in Europe. Those who cherish " a firm and intelligent purpose " that our exports shall exceed our imports, must therefore desire to bring about a state of perpetual prostration, a chronic paralysis of our industry. * Four-thirds of the actual rate. 52 DOES PROTECTION PROTECT? Under the protective system, from 1821 to 1832, inclusive, our exports barely kept pace with the increase of population. They were $4.38 per capita in 1821, and only $4.50 per capita in 1832. In like manner, the protective tariff of 1842 only reduced our exports from $5.09 in that year, and $5.51 in 1843 (allowing for twelve months instead of nine), to $5.08 in 1846, the last year of its operation. And under the protective system now in force our exports have been reduced from $11.09 in 1861, to $7.13 per capita in 1869. This was not because our imports had been stopped, so that the law of ex change restrained exports. For in 1821 our imports were $4.39 per capita, and, though twice temporarily checked in their natural in crease, they were $5.50 in 1832. In 1843 they were $2.68 per cap ita (for the nine months only $2.01), and in 1846 they were $5.50. In 1861 they were $9.02 per capita, and, in spite of eleven additions to the tariff, in 1869 they were $10.52 per capita. With a natural and unrestricted exchange, imports increasing would have caused a larger exportation of our products. But the high tariffs, while their power to stop importations is quickly expended, so that in the long- run they do not prevent increased imports, do have this effect : they prevent any like increase of exports. Intended to prevent purchases of foreign goods, the protective tariff, reduced to its simplest terms, says to the American producer, " Thou shalt not export ! " As a nation progresses in growth, refinement, prosperity, and in dividual well-being, its people desire new or increased supplies of foreign products, and become able to consume a larger quantity in proportion to population. If they are truly prosperous, they must in like proportion increase in their power to produce a surplus of goods to exchange with foreign nations for those which they de sire. rThus a reasonable and healthy increase per capita of exports and of imports is at once a result and a proof of the progress of a country in civilization and real prosperity. In every period of relaxation of duties, a rapid increase of exports bears testimony to the vigor of our industry and the increased prosperity of our peo ple. When the protective system was abandoned in 1832, our exports instantly rose from $4.50 per capita in 1832 to $4.99 per capita in 1833, to $6.56 per capita in 1840, and, in spite of the de pression of our industry, were $5.09 in 1842. Again, upon the second abandonment of the system, our exports rose from $5.08 in 1846 to $11.09 in 1861. These contrasts, and the changes of each year, may be most easily observed in the accompanying diagram, in which the rate of net exports and imports per capita, specie ex- HIGH TARIFFS CHECK EXPORTS. 53 clubed, is traced year by year according to the table already given. The lower line also represents the exports of manufactured prod ucts, to which we shall presently refer. Remembering that the years 1825 and 1847 were years of peculiar demand from Europe for our products, and that the sudden rise in 1866 was largely owing to the escape of cotton worth over two hundred and eighty millions of dollars, much of which had been confined during the war, we may trace year by year the effects of the currency on the one hand, and of tariffs on the other, upon our exports and im ports. \~During the twelve years of protection, with which the record begins, our imports, repeatedly depressed for one year or two, al ways recovered, and were higher per capita at the end than at the beginning of t the period. But our exports, in spite % of the increase of currency in 1831, remained about the same during the whole pe riod, though, as soon as the duties were removed, they rose rapidly, and in 1834 reached the natural limit of exchange value. The ex pansion which followed increased them some, but imports far more, and the depression of exports which followed was due in part to failure of crops. Again, through all the tariff of 1842, our exports slightly declined in rate per capita, although imports, forced down to the lowest point in 1843, the first year of the tariff, more than recovered at once, and were higher at its close than in 1842. But the instant that tariff was removed, exports rose rapidly not only in the year of famine, for they were higher in 1850 than in any year under protection and from that time moved naturally and reg ularly in sympathy with imports, year by year, until the panic of 1858. Here the law of exchange was free to operate, and exports and imports both increased rapidly and harmoniously. But under each protective tariff that law of exchange has been interrupted; imports, obeying law T s more powerful than any tariff, have risen in spite of temporary depression, while the natural tendency to in crease exports in like proportion has been thwarted. Omitting the year 1866, for the reason given, we find that our exports since the war are lower than they were in any year since 1853, before the war. But our imports, cut down in 18C1 to 89.02 per capita, in stantly ;rose to $10.66. Higher duties cut them down to 89.23, but in the very next year they rose again to $11.11. Then came-one more effort to shut out foreign goods, and duties, intended and be lieved to be almost prohibitory, cut down imports to $6.99 per cap ita. But in the very next year they -rose to 811.92 higher than 54 DOES PROTECTION PROTECT? ever before in our history. And the last tariff, which reduced im ports to $9.27 in 1868, seems already to have lost nearly all its force, for in 1869 we find an increase to $10.52. Meanwhile our ex ports are decreasing, and the gap to be filled every year with gold and bonds grows wider. Is it not wide enough already ? It will be said, however, that the recent decrease of exports is owing to the changes at the South, which have reduced the cotton crop. During the war, when our exports sank to $4.39 per capita almost precisely the point at which the record starts, forty-eight years ago the cotton crop was indeed interrupted. But it must be observed that the records before us are of values, not quantities, and the cotton crop since the war has actually sold for nearly as much money, and therefore added nearly as much to our exports J>er capita, as it di4 in the years before the war. In 1866 our exports of cotton were valued at two hundred and eighty-one millions, or in gold at two hundred and two millions ; in 1860 at only one hundred and ninety-one millions. During the four years 1866- 69, inclusive, we have exported cotton valued at seven hundred and ninety-seven millions, or in gold at five hundred and seventy-four millions. Dur ing the four years 1857- 60, inclusive, we exported cotton worth six hundred and sixteen millions, so that the loss on this crop is only forty-two millions in four years, or ten millions a year less than thirty cents per capita. Neither has the loss been in tobacco ; in 1869 we exported of that article more than twenty millions worth, and in 1860 less than sixteen millions. Nor has it been in bread- stuffs. In 1860 we exported of wheat to the value of four millions, of flour fifteen millions, and of corn two and a half millions ; in 1869 we exported of wheat over twenty-four millions, of flour nearly nine teen millions, and of corn nearly seven millions. And in 1868 the values were : of wheat, thirty millions ; of flour, twenty millions ; and of corn, thirteen millions. It is the theory of the advocates of protection that by high duties we build up a home market for the farmer, enable the country to consume its own breadstuffs, and thus save the transportation to Eu rope on these and other bulky products, while we export more of finished products of industry. It is very plain that protection for eight years has not rendered our farmers more independent of for eign markets for their breadstuffs. It is very plain that the reduc tion of our exports has not been in the raw materials chiefly ex ported. Let us see whether the tariff actually does enable us to ex port a larger proportion of manufactured products, and a smaller pro- HIGH TARIFFS CHECK EXPORTS. 55 portion of raw materials. It must be admitted that this is a crucial test. If protection has failed in this, it has utterly failed to justify the theory of its advocates. It has been stoutly asserted by Mr. Carey and others that our exports of manufactured products are now greater than ever before. If this were true, it would not sustain their reasoning. As a nation grows in population and in commerce, its exports of manufactured products ought to increase in at least equal ratio, and, if it progresses at all in civilization and mechanic arts, in a greater ratio. W^ere the statement true, therefore, it would only prove that our manufac tures have not been conspicuously prostrated by a system especially designed to develop them. But it is not the fact ! -At first glance, the records published by the Treasury Depart ment seem to sustain the assertion. The aggregate value of the exported articles now classed as manufactures is reported as greater than the reported value of articles exported before the war, and then classed as manufactures. Thus when the Treasury tables assert that the value of manufactured exports in 1867 was $74,796,531, we look in vain to any former year for figures as large. In 1860 the reported value was only $48,090,640. But a moment s reflection suggests tljgtthe exports of 1867 were valued in a currency worth only seventy- Qne^cents tojthe Mlaraiid, "reducing" th"e ^seventy-four millions in pjaper to gold values, we have only fifty-three millions an increase of o^nlyjive millions in nine years. Now, the nation has increased more than ten per cent, in population, and would naturally have increased more than ten per cent, in productive power. But when we look into the items now classed as manufactures, and compare them with those of manufactured exports in 1860, we find that the tables are quite curiously constructed. The eye pres ently reaches the item, " Petroleum " exported over twenty-four millions in 1867 ! Now, we did not export, nor in any considerable quantity produce, petroleum in 1860. This enormous item is simply added to our exports of manufactured articles, and the record is then quoted with infinite zest, as proving that our industries have been vastly benefited by high duties. \\IJiattariff, then, claims the honor ot_Drake!s.-discovery ? What tarin^ia7n5ore"d" ^We1ts 1 "to" Ke "great reservoirs of oil ? Or did some very high protective tariff, far back in ages of the world s infancy, store away in caverns for the use of man these inexhaustible deposits of light and heat ? Only by this addition of all exports of petroleum, crude or refined, have our ex ports of manufactures been thus apparently increased. Such a table 56 DOES PROTECTION PROTECT ? evidently gives no just test of the effect of the present system upon our manufactures. Further, it appears that all exports of lumber, timber, masts, spars, shocks, staves, and headings, are now classed as manufactures. Whether such classification be proper or not, it is certainly not calculated to help to a correct understanding of the progress of what are usually regarded as manufactures. And it will be observed that exports of lumber have increased from six millions in 1860 to over ten millions in 1867 and 1868, so that, deducting these and the exports of petroleum, we have, in 1860, exports valued at forty-two millions in gold, against exports, in 1867, valued at forty millions in paper, and in 1868 valued at forty-one millions in paper^ Now, the forty-two millions of exports in 1860, of ar-ticles legiti mately classed as manufactured products, were/uS-J- per cent, of our whole domestic exports in that year. But the""forty-one mil lions in paper, or twenty-nine millions in gold, of manufactured exports in 18 G8,.. were -only 10 percent, of our domestic exports for that year. So that the exact result of nine years of protection has been to reduce the proportion of our manufactured exports, and increase the proportion of exports of raw materials.. It happens, indeed, that these nine years of protection have pushed us back farther than we were in 1846, for then, after only four years of pro tection, our exports of the same ^manutctured articles were only $11,139,582, or almost 11 per cent. ol\onr domestic exports. From that time to 1860, without protection, bur manufactured ex ports advanced from 11 to over 13 per cent., an4, from 18&Qv to 1868, the export of the same articles has declined to pnly 10 per cent. ! Surely these facts do not justify the assertion that our ex- - ports have been checked by the tariff only because we have been sending away less of raw materials. For the contrary is proved by the Statistics: thfi forifE-J3aa~uQt--nnly p.hpp.kpr| pypnrffijjrnfji-. has retarded our exports of manufactured more than our exports of raw products. But it will be said that these selected facts may not fairly repre sent the whole history, and that there has been just complaint of other writers on that score. Let us, then, present a complete record of our exports of manufactures, from the earliest day. The following table is compiled from official records : * the data for the years prior to 1847 are taken from the Treasury reports of that period, and do * On Diagram III. (page 52), the lower line represents the exports of manufac tured products. HIGH TARIFFS CHECK EXPORTS. 57 not include exports of lumber, timber, and shooks ; the data for the years subsequent to 1847 are taken from the Treasury reports of 1866 and later, and do include exports of lumber, timber, shooks, and also two small items, ashes and sperm candles, which were not classed as manufactures prior to 1847. There is thus a break in the continuity of the record at that point an apparent increase caused by including for the first time the articles named. The values for recent years are reduced to gold, and exports of petroleum are of course excluded not because refined petroleum may not be called a manufactured product, but because the object is to compare the effect of tariffs in different years upon those branches of industry commonly spoken of as manufactures, and which may be affected by them. Against the amount exported each year, since 1821, will be found in another column the amount per capita. VALUE OP MANUFACTURED PRODUCTS EXPORTED. YBAB. Value per Cap. Value. YEAR. Value per Cap. Value. 1821 $ .28 $2,752,631 1845 & .53 $10 329 701 1822 .30 3 121 030 1846 . ... 55 11 139 582 1823 .29 3,139 598 J-1847 .76 15 756 814 1824 45 4 841 383 1848 .89 19 249 896 1825 .51 5,729,797 1849 .73 16 116 400 1826 .48 5 495 130 1850 67 15 414 222 1827 47 5 536 651 1851 1 15 27 317 107 1828 .44 5 548 359 1852. 1.02 25 284 123 1829 42 5 412 320 1853 1 12 29 255 104 1830 . . .41 5 320 980 1854 1 40 36 380 397 1831 38 5 086 890 1855 1 34 35 999 387 1832 .36 5,050 633 1856 1.32 36 612 053 1833 46 5 557 080 1857 29 36 655 296 1834 .43 6,247,893 1858 .23 35 853 693 1835 51 7 694 073 1859 32 39 934 373 1836 .40 6,107,528 U.860. . .53 48 090 640 1837 46 7 136 997 i86i rrrrT 33 43 190497 1838 .51 8,397,078 1862 11.36 32 026 250 1839 50 8 325 082 1863 1 54 37 549 508 1840 .58 9,873,462 1864 .88 24 122 859 1841 . . 57 9 953,020 1865 79 23 932 073 1842 47 8 410 699 1866 81 29 019 254 1843 *48 6 779,527 1867 ... . 98 35 818 949 1844 .50 9,579,724 1868 .96 37,163,465 In 1803, prior to the complete Treasury records, it is mentioned that the exports of manufactured products were but $1,355,000, * For the year 1843 four- thirds are allowed, the Treasury year embracing only nine months. f Change of items included. \ Population within military lines, as per table elsewhere ; values reduced to gold. 5 58 DOES PROTECTION PROTECT? or 23 cents per capita, and that they then rose, before our commerce was interrupted, to $2,963,000, or 45 cents per capita in 1806. This was without any such tariff as is now called protective, either to help or to embarrass. The seas were not free to our commerce again until 1815, and in that year the record starts with only $2,051,000, or 24 cents per capita, increased the next year to 27 cents, and the next to 28. But at this point begin the first duties for protective purposes, and, after an increase to 30 cents in 1818, there is a sudden decrease. From 1821 the records of the Treasury are complete, and we find that manufactured exports again rose to 45 cents per capita in 1824, and to 51 cents in 1825, when the protective tariff of 1824 began to be felt. From that time, with irfcreasing duties to protect our manufactures, there is a curiously steady and regular decrease, a little every year, in the power of our manufacturers to compete in foreign markets. Exports of manufactured products fell from $5,729,797, or 51 cents per capita in 1825, to $5,050,633, or 36 cents per capita in 1832, the last year of that tariff. Instead of decreasing, they should have increased, if natural progress of industry had been left to work its legitimate results. It is equally interesting to notice how promptly exports of man ufactured products increase when the duties begin to decline. In 1833, the first year of the compromise tariff, the exports increased over a million and a half, or from 36 to 46 cents per capita. The inflation of 1836 and 1837, and the consequent panic, checked this progress, but in 1840 we were exporting of manufactured products $9,873,462, and in 1841, $9,953,020. Thus, in spite of the great panic, our ex port of manufactures had almost doubled in nine years. We shall see that a still more surprising progress followed the removal of pro tection in 1846. During the tariff of 1843- 46, as has been already explained, the country was steadily recovering from the effects of the bank explo sion, and exports of manufactures rose from ten millions in 1841 to eleven millions in 1846. The low figures for 1843, it will be remem bered, represent only nine months. A gain of little more than a million in five years, or, population growing more rapidly, a decrease per capita from 58 to 55 is the result in that period. In the next year the ad valorem tariff took effect, and we have also a change in the items, as already stated. Starting, then, with lumber, ashes, and sperm candles included, we have in 1847 an ex port of $15,756,814, or 76 cents per capita. For three years our manufactures were affected by foreign competition, but then began HIGH TARIFFS CHECK EXPORTS. 59 to grow in earnest. By 1854 our exports of the same products had reached $36,380,397, or an increase of nearly 150 per cent, in four years. The exports per capita reached the highest point then ever attained, $1.40 per capita, and, though interrupted again by the dis aster of 1857, they more than kept pace with population, reaching $1.53 per capita in 1860. At that time the export of the manufac tured products was $48,090,640, an increase of more than 200 per cent, in ten years. We have now to observe the steady decline under protection to $23,932,070 in 1865, a loss of more than 50 per cent, in five years. But it is unjust to ascribe this wholly to the tariff; it is also the ef- ~fect of the withdrawal of a large number of men from production, and of the high prices caused by an inflated currency. The amount per capita is calculated for the number of persons estimated in Treas- ory reports as being within our military lines and supplied by our trade each year, and this causes the figure for 1863 to rise too high, as compared with other years. During the war, when the Southern population, never largely engaged in manufacturing, was not consuming, while the force producing was not materially dimin ished by their isolation, and the population by which we divide was much reduced, the rate per capita was high, but the restoration of the Southern population to the computation makes the test of com parison of years since with the years before the war a fair one. Though we have been slowly recovering in exports of manufactured products, we are still more than eleven millions behind the point reached in 1860, and in 1868 exported only 96 cents per capita. The diagram (opposite page 52) will enable every reader to mark, first, the steady decrease under protection to 1832, and the rapid increase following the abandonment of protection ; second, the slight increase under the tariff of 1842, compared with the rapid growth after 1850 ; and, finally, the condition to which our industry has now been brought by nine years of protection, as compared with the progress attained under low duties prior to 1860. Is not this test a decisive proof that high duties render our indus tries less able to compete in open markets with those of other coun tries ? Is it not proof that high duties- do not, as has been claimed, reduce our exports of raw materials and increase our exports of man ufactured products? Does it not clearly appear that the protective system thus fails, tested by facts, to sustain the expectations of its advocates ? 60 DOES PROTECTION PROTECT? NET IMPORTS AND EXPORTS OF MERCHANDISE ONLY. YEAR. Exports. Per Capita. Imports. Per Capita. 1821 $43,671,894 $4.38 $43,696,405 $4.39 1822 49,874,079 4.84 68,395 673 6.64 1823 47,155,408 4.45 51,310,646 ^4.84 1824 . 50,649,500 4.64 53,846,567 4.89 1825. 66,944,745 5.98 66,395,722 . 5.92 1826 52,449,855 4.56 57,661,577 5.01 1827 57,878,117 4.86 54,901,108 4.58 1828 49,976,632 4.09 66,975,505 5.49 1829 55,087,307 4.40 54,741,571 4.38 1830... 58,524,878 4.53 49,575,099 3.91 1831 59,218,583 4.45 82,808,110 6.22 1832 61,726,529 4.50 75,327,688 5.50 1833 89,950,856 4.99 83,470,067 6.96 1834 80,623,662 5.56 86,973,147 5.99 1835 100,459,481 6.69 122,007,974 8.13 1836 106,570,942 6.92 158,811,492 10.31 1837 1838 94,280,895 95,560,880 5.97 5.97 113,310,571 86,552,598 7.17 5.41 1839 101,625,523 6.12 145,870,816 8.79 1840 111,660,561 6.56 86,250,335 5.07 1841 1842 103,636,236 91,799,242 5.92 5.09 114,776,309 87,996,318 6.56 4.88 1843 77,686,354 *4.21 37,223,905 2.01 1844 99,531,774 5.24 96,390,548 5.07 1845 98 455 330 5 05 * 105 599 541 5.41 1846 101,718,042 5.08 110,048,859 5.50 1847 150,574,844 7.34 116,257,595 5.67 1848 130,203,709 6.09 140,651,838 6.57 1849.. 131 510,081 6 00 132 565 108 6 05 1850 134,900,233 5 87 164,034,033 7.13 1851 178 620,138 7 50 200 476 219 8 42 1852 154,931,147 6.30 195,387,319 7.94 1853 189 869,162 7 50 250,151 145 9 89 1854.. 215 156 304 8 27 277 093 459 10 65 1855 192 751,135 7.19 231,650,340 8 64 185 6. 266438 051 9 61 295 650 938 10 67 1857 278,906,713 9.78 333,511,295 11 70 1858 251 351 033 8 58 242 678 413 8.28 1859 278,392,080 9.21 316,823,370 10.49 I860 316 242 423 10.07 836,282 485 10 71 1861 359,036,604 11.09 291,745,559 9.02 1862 182 208 909 7.75 250,728 903 10.66 1863 184,413,850 7.56 225,375,280 9.23 1864 141645 677 5.24 801,115,561 11 11 1865 131,617,331 4.39 209,656,525 6.99 1866 334498 710 9.42 423,470,646 11.92 1867.... 279,374,457 7.65 374,943,502 10.27 1868 1869... 269,042,041 275.187.799 7.17 7.13 847,549,209 406,281.834 9.27 10.52 * Per capita estimated for number within United States lines during the war, as per table of population. Rate for 1843, if four-thirds of the year be allowed : Ex- ports, $5.51 ; imports, $2.68. SHIP-BUILDING. 61 The examination of our exchanges with foreign nations has es tablished certain facts : 1. That the protective system does not prevent overtrading. 2. That high duties check imports only temporarily, and their ef fect is lost after one or two years. 3. That any decrease of imports so caused is purchased at the cost of a greater decrease of exports. 4. That every period of high duties has checked the natural in crease of our exports. 5. That in every such period our exports of manufactured prod ucts have been checked, and our industry has been rendered less able to compete with that of other nations. 6. That the present tariff has increased the proportion of raw ma terials, and decreased the proportion of manufactured products ex ported, and rendered the farmer more largely dependent upon foreign markets for his products than he was before the war. CHAPTER V. SHIP-BUILDING. IT may now be confidently asserted that our prosperity, as af fected by foreign exchanges, is not increased, but is retarded in its natural growth, by high duties on imports. Yet it may be true that those duties so stimulate home industry and domestic commerce as to confer benefits more than compensating for disadvantages result ing. " Protection to home industry " the idea has an almost magi cal fascination. By many the policy bearing that name is thought to have a magical effect. Some have called it the American policy, but neither its virtues nor its vices are our own. It comes from Europe, was practised by European nations long before this nation was born ; and has descended to us of modern times, a relic of the dark ages when the germs of civilization, struggling up through the mould of barbarism and the wreck of feudalism, deemed it necessary to shelter every industry with the strictest laws. Indeed, it has in spirit, if not in form, a still older exemplar in that nation which pro tected her industries by walls of stone instead of legislative barriers. Unconsciously, they borrow Celestial ideas who say, " What need we care for foreign commerce ? Let us build up within this country 62 DOES PROTECTION PROTECT? industries to supply all our wants, for thus only can we achieve, in peace or in war, a true national independence." One industry, however, we do not stimulate. To the enlightened protectionist, foreign commerce is a waste of human effort, and ships are a waste of the raw material. The object of his system is to eliminate the cost of transportation, and a perfectly protected coun try ought to have no use for a sailor. So much, at least, we might almost infer from the coolness with which the advocate of protection contemplates the decline of our shipping and ship-building. Our ship-yards become desolate; our seamen seek service under other flags ; and our best vessels find owners in foreign ports ; but Mr. Greeley quietly remarks that this interest cannot be expected to prosper at present. Yet our naval power depends upon the growth of our commercial shipping. Our fisheries, so long encouraged with liberality by government as a school for seamen, no longer meet the needs of modern times. Our coasting service has been greatly con tracted by the rapid growth of railroad communications. Our for eign merchant-ships alone provide the trained seamen who can be called to man our vessels in time of conflict. Foreign commerce alone can keep in existence those magnificent ship-yards from which, in former time, went forth stanch and swift vessels, everywhere en vied in peace and dreaded in war. No one who wishes to see our flag respected by foreign powers can witness without regret the de cline of our shipping interest, the abandonment of yards, the sale of ships, and the expatriation of hardy and trained seamen. What manufacture deserves protection more than the manufacture of ships ? No small share of our success in the recent struggle we owe to the readiness of our ship-yards, the genius of our architects, and the skill of our mechanics. But to-day that great interest the only arm with which we can strike any foe of importance is crippled, and that in dustry is almost annihilated. The immense yards and iron-works, from which years ago we sent ships and engines of matchless excellence to all countries, are closed and silent. In September there were but two sea-going steamers for commercial purposes being built in all our ports. Nor is this strange. The wonder is that any are built, when the cost of every material, iron, copper, cordage, duck, and timber, is so great. It is a singular proof of the superiority of our workmen, that, in spite of these disadvantages, they can still build any class of vessels within 20 per cent, of the cost in foreign ports. In Nova Scotia, wooden vessels can be built, it is stated, nearly 30 per cent, cheaper than in this country. On the Clyde, for SHIP-BUILDING. 63 miles, the ear is stunned with the clang of hammers, and iron ships by the hundred are built at rates with which our builders cannot now compete. If it is desirable or possible to " protect American industry," this particular industry of all others deserves its full share of favor. The artisans of our ship-yards, the machinists of our great iron-works, were not these also American laborers ? Were not they entitled to some thought from a paternal government which holds it a duty to secure plenty of work at high wages to American workmen ? Or do we intentionally selectj as the one industry which we will not protect, that very one upon which our national honor and safety most depend ? Prior to 1855, wooden vessels were mainly used ; since that time they have been rapidly superseded by iron. At the point of change, during the years 1856 and 1857, our foreign tonnage declined, but it began to recover again in 1858, and increased in 1859, 1860, and 1861, iron ships being built with success in our ship-yards. The two periods, then, are to be considered separately, and in the following table will be found the registered tonnage for each year since the War of 1812, the proportion of tonnage to population expressed in thousandths of a ton per capita, and the number of ships, barks, and brigs, built each year since 1821. Of schooners, sloops, and steam ers, a large proportion has been used in the coasting, lake, or river traffic, and it is with foreign tonnage only that we have to do at this time. TONNAGE VESSELS BUILT. YEAR. Registered. Tonnage per Cap. Ships and Barks. Bripu YEAR. Registered. Tonnage per Cap. Ships and Barks. Brigs. 1815. 854,294 .101 1840. . 899,765 .053 97 109 1816. 800.760 .092 1841. . 845,803 .048 114 101 1817. 809,725 .091 1842. . 975,359 .054 116 91 1818. 606.089 .067 1843. . 1,009,315 .054 58 34 1819. 612,930 .065 1844. . 1.068,765 .056 73 47 1820. 619,047 .064 1845. . 1,095,173 .056 124 87 1821. 619,896 .062 1846. . 1,130,286 .056 100 164 1822. 628.150 .061 64 131 1847. . 1,241,313 .060 151 168 1823. 639,921 .060 55 127 1848. . 1,360,887 .663 254 174 1824. 669,973 .060 56 156 1849. . 1,438.942 .065 198 148 1825. 700,787 .062 56 197 1850. . 1,585,711 .069 247 117 1826. 737,978 .064 71 187 1851. . 1,726,307 .072 211 65 1827 747,170 .062 55 153 1852. . 1,899,448 .077 255 79 1828. 812,619 .066 73 108 1853. . 2,103,674 .080 269 95 1829. 650,142 .052 44 58 1854. . 2,333,819 .089 334 112 1830. 576,675 .045 25 56 1855. . 2,535,136 .094 381 126 1831. 620,452 .047 72 95 1856. . 2,491,402 .090 306 103 1832. 686,989 .050 132 143 1857. . 2,463,967 .086 251 58 1833. 750,026 .053 144 169 1858. . 2,499,742 .085 122 46 1834. 857,438 .059 98 94 1859. . 2.507,402 .083 89 28 1R35. 885,822 .060 25 50 1860. . 2,546,237 .081 110 36 1836. 897,774 . .058 93 65 1861. . 2,642,628 .081 110 38 1837. 810,447 .051 67 72 1862. . 2,291,251 60 17 1838. 822,592 .051 66 79 1863. . 2,026,114 97 34 1&39. 834,244 .050 83 89 64 DOES PROTECTION PROTECT? At the close of the War of 1812, our registered tonnage was 854,294 tons, or 1 1 Q y 5 - of a ton per capita. As there is no other method of reaching, even approximately, the amount of tonnage employed in foreign trade, we may treat the registered tonnage as foreign, and may suppose that the number of ships, barks, and brigs built affords a fair basis of comparison for the whole number of sea going vessels put afloat. Never, since 1815, has our registered ton nage been as great in proportion to population as it was in that year. Under the tariff of 1816 there was a sudden decline to 606,089 tons, or iljjjo per capita in 1818 ; and from this time until 1828 there was an increase almost exactly proportioned to that of popu lationfrom yf 5- to y!-^ of a ton per capita. The tariff of 1828 affected this interest just as it did others ; it produced a rapid decline and general prostration in 1829 and 1830, after which imports revived, and shipping also. In 1830, tonnage fell to 576,675, or TtHhr P er capita, its lowest point in our history since the war. Four teen years of protection had reduced our foreign tonnage from 800,716, in 1816, to 576,675, in 1830, and from y^ to yf^. It is difficult to avoid the inference prompted by the fact that this, the lowest point in our history, was reached under the heaviest duties on iron, hemp, cordage, duck, copper, and other materials. Nor will the singularly steady and regular decline be overlooked, which followed the duties placed on iron in 1818. The rate per capita changed thus : 67, 65, 64, 62, 61, 60. The subsequent increase under the tariff of 1824, though not large, is, nevertheless, note worthy, because it was in spite of duties still higher, and it may, perhaps, be ascribed to an increase of the cotton crop, from 560,000 bales in 1824 to 957,000 bales in 1827, that the higher duties did not cause a further decline of tonnage. The actual increase was less than that of the cotton crop. The decrease in 1830 of 236,000 tons since 1828 cannot be wholly explained by a decrease in the cotton crop, from 957,000 bales in 1827 to 870,415 in 1829, and in 1830 the crop was 976,845, and in 1831 it was, for the first time, over one million bales, which in part explains the recovery of ton nage in 1831 and 1832. Taking the whole period of sixteen years of protection, we have an actual decrease of foreign tonnage, from 854,294 tons in 1815 to 686,989 tons in 1832, and from yV^ toyfj^. And this was in spite of the fact that our cotton crop had grown from almost nothing to one million bales. It certainly cannot be denied that such a change gives proof that our shipping and ship building were affected most unfavorably then, as they are now, by high duties on the materials used. SHIP-BUILDIXG. 65 In anticipation of reduction of duties and revival of commerce, a large number of ships were built in the year 1832, and a still larger number in the year 1833, and, under the compromise tariff, tonnage rose to 885,822 in 1835, or from 50 to 60 per capita. In the same time, the cotton crop had increased in the same ratio. The financial disasters prevented further increase after 1836, until the return to specie, but there was then an increase, and in 1842 the tonnage was 975,359, or 54 per capita. Taking this period as a whole, therefore, its results* are an increase from 686,989 to 975,359 tons, slightly greater than that of population from 1 g to yf-g-^- per capita. Under the protective tariff there was also a very slight increase, from 54 to 56 per capita. But, with the return to a non- protective policy in 1847, the tonnage gained in two years more than it had in four years under protection, and the rate per capita gained in one year more than it had in four. Thenceforward an increase is maintained with great regularity, until 1855. In those nine years tonnage increased from 1,130,286 in 1846 to 2,535,136 in 1855, or more than doubled. Let us now compare the fifteen years under protection, from 1816 to 1830 inclusive, with the nine years under non-protection, from 1847 to 1855 inclusive. In the protective period we have a decrease from 854,294 in 1815 to 576,675 in 1830. In the non-protective period we have an increase from 1,130,286 in 1846 to 2,535,819 in 1855. And these are the only periods in our history during which long-continued adherence to either policy, without inflation of currency, fully tested its effect. It will be said, however, that the tonnage declined during the remaining years of the non-protective period. It did, indeed, increase less rapidly than population, and the cause, as has been remarked, was the substitution of iron for wooden vessels. But the commercial disorders of 1857 also had a depressing effect. It will be reasoned that the rapid increase of our cotton crop and of exports of cotton caused the increase of tonnage from 1847 onward. If this were so, the reply would be ready that it is the avowed object of protection to diminish the quantity of raw mate rial sent abroad for manufacture, and that, had that policy been in force, and had it produced such effects as its advocates desire, it would have prevented this increase of shipping. But the facts do not fully sustain this plausible explanation of the increase. For, first, if it were the true one, our tonnage should have increased far more from 1855 to 1860 than in the previous years, because our cotton exports increased from one thousand to seventeen hundred 66 DOES PROTECTION PROTECT? million pounds in that period. But tonnage did not increase in the same time, and the increased exportation was done in foreign vessels. And, again, if the increased exportation of cotton is to account for the increase of tonnage between 1846 and 1855, then there should be some proportion between them. But there is not, for the exports of cotton were eight hundred and seventy-three million pounds in 1845, and eight hundred and fourteen million pounds in 1848 (the crops were short in the years 1846 and 1847), while they were only one thousand million pounds in 1855, and only nine hundred and eighty- seven million pounds in 1854. Increase of cotton exports, from eight hundred and fourteen to one thousand million pounds, or 25 per cent. ; increase of tonnage, from eleven hundred to twenty-five hundred thousand tons, or 225 per cent. surely, these facts do not sustain to each other the relation of cause to effect ! By no such reasoning can the inference be avoided, that under a non-protective policy our ship-building was stimulated to vigorous progress by profitable employment for our ships in foreign commerce, while under a protective policy that interest was retarded, both by that decline of our exports which we have traced as an effect of that policy, and by the unnatural enhancement of the cost of mate rials used in ship-building. The record of ships built strongly confirms the same conclusion. We suppose that ships, barks, and brigs, were mainly used in foreign trade, and that taken together they afford a fair test of the amount of shipping built each year for ocean service. The number built under the tariff of 1824 was 931 (1824 to 1827 inclusive), and the number built under the higher protective tariff of 1828 (1828 to 1832) was only 533 a loss of four-ninths. The number built in 1832 may, perhaps, fairly be attributed in part to the expectation of a more prosperous trade from the change of tariff then rendered certain by the elections. And the number in that year and the years 1833 and 1834, before inflation of currency had greatly increased prices, was 880 more by 60 per cent, in three years than had been built in four years under protection. Again, though building had revived after the inflation and panic, so that 628 vessels were built in the three years 1840, 1841, and 1842, it was instantly checked by the tariff of 1843, so that only 587 were built during the four years of its operation. And, after the expiration of that tariff, in the next four years (1847 to 1850 inclusive) the number built rose to 1,457 an increase of more than 250 per cent. ! In the years 1852 to 1856 inclusive there were built, of ships and barks only, 1,645, or nearly SHIP-BUILDING. 67 three times the number of ships, barks, and brigs, built under the protective tariff, and almost five times that of ships and barks ! No comments can add to the force of these figures. They de monstrate that high tariffs are injurious to our ship-building interest. They demonstrate that, when we claim to be protecting American industry, there is at least one branch of American industry, and that not the least important, which we protect well-nigh to death. Is there any reason why the thousands of workmen in our forests and ship-yards, and the tens of thousands of sailors and of people de pendent upon their trade in our maritime towns, should be selected from all other laborers by our government, and sentenced to starva tion or a change of employment ? This great interest cannot longer be safely ignored or trampled down. For, since the change from wooden ships to iron, the effect of the protective policy is more injurious than ever before. The wooden ships of twenty years ago required, for one of five hundred tons, about fifty-two thousand pounds of iron, twenty thousand pounds of cordage, three thousand .five hundred pounds of copper, and fifty-two pieces of sail-duck ; and on smaller vessels the quan tity required of these articles, though less, was much larger in pro portion to tonnage thus a schooner of only one hundred tons re quired fifteen thousand pounds of iron, eight hundred pounds of copper, five thousand pounds of cordage, and twenty-four pieces of sail-duck. It was estimated that the tariff of 1844 enhanced the prices of those articles alone $2,290 for a five hundred ton ship, or $4.58 to the ton ; and, as ship-building had cost prior to that tariff not far from $35 a ton, the tariff added about one-ninth to the cost of the ships by the duties on those articles only. But the burden is still greater now. It would cost to build the same vessels now about $70 a ton in gold,* while builders in New Brunswick will build for any customer at $40 a ton. The iron needed, which before the war could be bought for $45 a ton, now commands $85 ; the hemp then costing 4J cents, now costs 12 ; the copper, then 22 cents, is now 34 ; hackmatack knees, then costing $1.25 and $1.50 a-piece, now cost $2.50 to $3 ; oak timber, then 28 cents per foot, now costs 60 ; white pine, then 22 cents, is now 45 ; and yellow pine, then 23, is now 35 cents per foot. The present prices are stated in currency, but it will readily be seen that they are far higher now in gold than they were in 1860. It is noticeable that ship-carpenters do not share in the benefits of the tariff, for before the w^ar they received $2.25 to * These and other figures following give prices in the fall of 1869. 63 DOES PROTECTION PROTECT? $2.50 per day, and now they get only $3.25 to $3.50 in currency, and a great part of them are idle even at that. But in the building of iron ships the disadvantage is fatally great. Iron for that use cost before the war $45 a ton, and now (1869) it costs $85 in currency, or about $60 in gold. This alone would add nearly one-third to the cost of the ship, while the cost of iron to other builders in Great Britain and elsewhere has been re duced by improvements in manufacture. Before the war our build ers of iron vessels were beginning to compete vigorously with foreign builders ; but it needs no elaborate reasoning to show that they work to-day under such a load as must crush all enterprise. The history of England in this matter is instructive. Prior to 1848, through centuries of battle with the world, England tried by every form of legislative aid to help her shipping interest, and had the mortification to see young America fairly rival her in number of vessels, and outstrip her in excellence. In 1848 England adopted free trade in shipping, and, after freeing from import duty all foreign timber, copper, iron, hemp, rope, and naval stores, took away the futile legislative helps and told her ship-builders to fight for them selves. The consequence was that her tonnage quickly rose from about 3,000,000 tons entered in her ports in 1848, to 5,388,953 in 1859, and to 7,299,417 in 1863 ; while in the years 1853 to 1862, in clusive, there were built of steam vessels alone in Great Britain 1,940, of which 1,499 were of iron. To-day we have eight steamers in all sailing from our ports to Europe, while England alone has sixty-eight steamers sailing to American ports, France has six, and North Germany has twenty-four. Here, then, is one great branch of American industry which we are protecting to death. And it is that upon which depend the honor of our flag in war, and, in a large degree, the commercial prosperity of our country in peace. CHAPTER VI. INTERFERENCE WITH NATURAL LAWS. THE inquiry thus far has not touched those points upon which advocates of the protective system mainly depend. Shipping and ship-building are important interests, but they are so allied with for eign commerce that it is impossible to repress that commerce with- INTERFERENCE WITH NATURAL LAWS. 69 out unfavorably affecting them. If it be proved that high tariffs do not prevent over-trading, since they check imports only at the ex pense of a greater reduction of exports, it will be replied that they may nevertheless have given needed aid to our industries. If it be proved that any high tariff to check imports quickly spends its force, the reply is that it gives at least a temporary advantage, which, by frequent additions to duties, can be prolonged. If it be proved that our manufactures, tested by the power to compete in foreign markets, have progressed more rapidly under low than under high duties, the answer is that protection does not look to foreign markets. There is something grand in the attitude of a people who delib erately make voluntary sacrifices, resolutely spurn the allurement of goods offered at lower prices, and with unflinching fidelity to their purpose tax themselves, year after year, in order to build up a nationality complete in every industry, armed at all points, and suf ficient unto itself. Other nations have borne such taxes when im posed by rulers, but few, if any, themselves have imposed them. Whether the effort has succeeded or has failed, there has been a cer tain heroism in making it. Perhaps even the failure may place in a brighter light the heroism of the endeavor ; as the Spartans at Ther mopylae, or the six hundred at Balaklava, were not the less glorious in their death. But, honorable as it may be in a people to make vol untary sacrifices for the public good, the time has come when we must ask whether the endeavor has succeeded ; if so, at what cost ; if not, whether it has reasonable prospect of success ; in short, whether an- enlightened desire for the public welfare still demands that the effort shall be continued. We cannot always afford to waste the nation s strength in honorable but futile exertions. If the idea has been a mistaken one, its patriotic purpose is a sufficient justification in the past ; but, when it shall appear mistaken, the same patriotism will prompt to its abandonment. Briefly stated, the idea of the advocate of protection is that high and discriminating duties, in spite of some disadvantages, greatly benefit the country by building up within it such diversified industry as to render it comparatively independent of other coun tries. Independence is not always and necessarily a blessing. The savage tribes of some Pacific islands were wholly independent of the rest of the world, but their condition has improved since their independence was destroyed. China and Japan, by exclusion of 70 DOES PROTECTION PROTECT? foreign trade, built up wonderfully complete and self-sustaining civilizations, but we do not envy them. Already greater depend ence upon the outside world is giving to them the benefits of a civilization less isolated and stagnant. Yet, if mere protection to home industry could ever confer blessings, those nations should have been most blessed. If mere diversification of industry, with out regard to its cost, is the one thing needful, those nations gained it. If the perfect condition is that in which a nation produces every thing it wants and has no foreign commerce, deeming that a useless waste of material and effort, then China and Japan were for cen turies models of perfection. These phrases, by which the system of protection is defended, tempt the mind to overlook two important considerations : first, whether the desired diversification and independence can at this time be secured except at a cost greater than their value ; and, sec ond, whether these ends can be obtained more speedily, surely, and cheaply, by a system which seeks to exclude foreign competition than by one which permits that competition as an additional stim ulus to our industry. Protection is not a blessing in itself, for it involves denial of freedom to satisfy all wants at the least cost. Diversification of industry is not a blessing in itself, for it would cost a great sacrifice of labor and capital to produce on our own soil all the natural products of the tropics. Diversification, attainable at a future time without cost, may now be attainable only by a wasteful sacrifice. He who advocates the encouragement of any in dustry by legislation, ought, therefore, to show that it will not grow up as fast as the country can afford to sustain it without encourage ment. And, the cost being considered, he is also bound to show that the industry in question will be more healthy and valuable to the country if sheltered from foreign competition, than if subjected to that stimulus. Not all plants can be grown under glass to advan tage. Oaks do not become tough and sturdy in a hot-house. These two considerations cost to the country, and effect upon industry of competition or its absence must be taken into account when we attempt to decide whether the protection of any branch of industry has been successful. In other words, we must not only as certain whether the production of wealth has on the whole been in creased under protective duties, but whether it has been increased more rapidly and surely under those duties than under the non- protective system. It will hardly be denied that every interference with natural INTERFERENCE WITH NATURAL LAWS. 71 laws involves some disadvantage. If it be only a difference of a cent in the pound of an article of food or a material of industry, it causes some inconvenience to somebody. However slight it may be, that inconvenience is an element in the cost, and, if there are many, the aggregate may not be slight. Every change from one form or degree of interference with trade to another also involves loss to somebody. If it increases or lessens the value of a stock on hand, or the cost of filling a contract, there is loss to somebody ; and, when there is a general change in the rate of duties, there are a great many losses on a great many different articles. The disadvantages and losses which result from the changes them selves are an important element in the cost of a protective system. If by the prospect of frequent changes men are discouraged from attempt ing the production of wealth, the cost is still further increased. The policy of interfering with the laws of trade has now been tried for more than eighty years. Absolute free trade this country has never tried. The lowest ad valorem tariffs have operated to some extent as a tax upon all industries and as an encouragement to many. Ever since our government had being, it has been making artificial conditions for trade and industry ; sometimes with equal or level tariffs, and sometimes with unequal or discriminating ; some times with high duties and sometimes with low; sometimes with specific, and sometimes with ad valorem duties; but always in one way or another interfering with natural laws. Thirty-five distinct tariff laws have been passed, each changing in some way the condi tions of trade and production. It will be admitted by all that such fluctuation is in itself a great evil. No one, who attentively consid ers the effect upon commerce, manufactures, investments and profits of capital, and employment of labor, can fail to realize that these changes have been terribly injurious. Thirty-five alterations of the very basis upon which industry and capital must build thirty-five earthquakes, each shattering some structures, destroying some, and trying all thirty-five changes, each involving to one class or another loss or gain, bankruptcy or sudden wealth how can such fluctua tions occur without imparting to all business something of the char acter of gambling ? The sober and cautious method, the true en terprise of quick sales and small profits, must give place to something else. Large profits must be realized to make up for expected losses ; the lender must charge twice, once for use of money, and once for risk ; timid capital must shrink from productive enterprise ; the rate of interest and the charges for exchange of commodities must rise. DOES PROTECTION PROTECT? All these consequences must result, in a greater or less degree, from a system which changes the conditions of trade and the very basis of industry thirty-five times in eighty years, and introduces the ele ment of chance into the most legitimate business. But is not this frequency of change a natural effect of the attempt to set aside or modify natural laws ? Does not interference with natural relations breed more interference ? No tariff can please everybody, and, if we interfere for the benefit of one, another may ask aid with equal justice. The favor to one interest is a detriment to some other. Men are not omniscient; not all the consequences of any measure can be foreseen. If in any respect it works badly, the result is a new interference, this again begetting still another. And, the higher the duties, the more decided the discrimination between some interests and others, the stronger will naturally be the ten dency to frequent changes. Since the War of 1812 there have been twenty-four tariffs adopted. Twenty of these have been protective in their object. Only four were non-protective, and one of these scarcely went into operation before it was repealed by a protective tariff. But the three non-protective tariffs lasted over twenty-three years. The twenty protective tariffs lasted less than twenty-nine years. Begin ning with the protective period of 1816- 32, we find that new tariffs were adopted in 1816, 1818, 1819, 1824, 1828, 1830, and 1832 the last a protective tariff, though succeeded early in the next year by the compromise act of 1833. For this period of seventeen years, seven tariffs were necessary. The protective tariff of 1842 lasted four years without change, because the elections in 1844 precluded all hope of increase. The third protective period began March 2, 1861, and including the act of that date we have had twelve changes in eight years. Compare the proportion of duties to the whole value of imports and dutiable imports, for each period, with the du ration of each tariff ! NON-PROTECTIVE TARIFFS. PEBCBN PAGE OP Date of Tariff. Duration. Duties to dutia ble Imports. Duties to whole Imports. 1846 August 6 10 years 7 mos. 24 20.4 1857 March 3 4 " 19 13 8 1833 March 2 8 " 6 " 31.9 15.4 1841 Sept 11 11 " 23 1 16 6 Four tariffs. 24 years. INTERFERENCE WITH NATURAL LAWS. PROTECTIVE TARIFFS. 73 Date of Tariff. Duration. PEKCENTAGE OF Duties to dutia ble Imports. Duties to whole Imports. 1816 April 27 2 years. 34!i 38.1 46.5 41.1 31.9 32.4 26.7 33.2 37.2 43.7 47.06 47.34 47.86 20. 23. 29. 33.1 38.5 32.2 22.4 25.2 17.7 23.7 81. 34.2 40.2 42.8 44. 1818 April 20 1819 March 3 ... 5 " 2 " 4 " 2 " 2 " 2 " . 74- " 1824 May 22 18og May 19 1830 May 20 1832 July 14 First period seven acts .... 16 years 104; mos. 3 years 11 mos. . . 5 mos ) 1842 August 30 . .... 1861 March 2 1861 August 5 . . 44- " V 1861 Dec. 24 7 " ) 1862 July 14 ... . 74- " 1863 March 3 1 year 4 " 8 " 1864 June 30 1865 March 3 1 year $ " . . 2 " ) 1866 March 14 1866 Mavl6 . . 24- " v 1866 July 93 7 " ) 1867 March 2 ) 2 years. 1 year. 1869 Feb. 24 Third period, twelve acts 9 years. It appears that the longest period without change of laws, ten years and seven months, and the next in duration, eight years and six months, were under a non-protective policy. Under the act of 1833 there were changes of duty, but no change of system, the de sign being to reach a purely revenue standard; and the act of 1841, extending low duties to the free list, effected no material change in industrial relations. The other non-protective period, also, properly extends from August 6, 1846, to March 2, 1861, fourteen years and seven months, for the change of duties in 1857 was but slight, from 30 to 24 per cent. These are the periods of low duties and non-pro tection, and their long duration without essential change is evidence that such tariffs tend less strongly than those of a different character to produce frequent fluctuations. For, excepting the tariff of 1842, which was virtually condemned to repeal by the popular vote when it had been in operation hardly two years, other high tariffs have invariably led to clamors for still higher duties, or protection to additional interests. At the same time, they have roused an intense 74 DOES PROTECTION PROTECT? desire for their repeal. By these contending forces, legislation has been constantly threatened, and obtained with such frequency, that the average duration of protective tariffs without change is less than eighteen months, while the average duration of non-protective tariffs is six years. The chief cause of frequency of change under protection is the increased cost of production here, as compared with a reduced cost elsewhere, in consequence of which the advantage of duties is soon neutralized. It is important that this statement should not be mis understood. It is not intended to repeat that notorious untruth, that duties always enhance to their full amount prices of domestic products. Nor is it true that an absolute increase of price follows every duty. Instances can be and have been given of an actual re duction of price after protective duties had been imposed on the corresponding foreign article, sometimes because, as protectionists maintain, home competition has sufficed to reduce the price, and sometimes because less costly raw material or improvements in man ufacture, here and in other countries, have caused a great reduction of cost, a part of which appears in a lower price, while another part appears in larger profits of the manufacture. But it must be re membered that in the latter case the cost here, though not abso lutely, is relatively increased ; the margin between the cost here and the cost in other countries is made wider. It will not be denied that the general object of protective duties is to enable the manufacturer to receive more for his products than the cost of like foreign prod ucts, and their general effect is therefore to make prices higher here than they would have been without the duties. Not all prices, but some unquestionably, are enhanced; and the cost of production is therefore affected. If iron is dear, the cost of machinery is affected ; if coal is dear, the cost of power or fuel is affected ; if dye-stuffs are dear, the cost of cloths is affected ; and in like manner the price of lumber affects the cost of buildings, and the price of clothing and food, the cost of labor. These many items make a large aggregate, and each of them is swelled by the large profits which every trans porter, merchant, or middle-man, must charge to cover his own in creased risk from fluctuations, or expense from enhancement of prices. Let us now suppose that, with cotton at twenty cents, a maker of cotton goods, four yards to the pound, could sell them at eight cents a yard without loss, the manufacture costing twelve cents to the pound, or three cents a yard, and that British goods cost eight and a half cents imported. The manufacturer can make a INTERFERENCE WITH NATURAL LAWS. 75 profit of one-half cent a yard. If we now add a tariff of one cent a yard it simply enables him to make three times as large a profit, at first. But other articles are also protected, and presently his ma chinery costs more, his coal more, his dyes more, his buildings more, and each item is increased by higher charges of middle-men, and his labor needs higher wages to meet increased cost of living. Let us suppose that the cost of working up a pound of cotton rises to six teen cents, or four cents to the yard ; the benefit of the tariff is then fully neutralized. He has to sell at nine and a half cents to get a profit of one-half a cent a yard. Meanwhile, the British manufac turer, forced by competition, steadily reduces his cost of manufac ture by improvements or greater skilL If he reduces the cost one- half cent, the profit of the American manufacturer must vanish, competition from abroad overwhelming him. Were there no tariff, he would be forced to keep pace with others in skill ; but, since gov ernment has taught him to look to legislation for success, he flies to Congress, represents with truth that the foreign competition is crushing him, and obtains a duty of two cents a yard. How many such instances have we seen ! How often,, in the record of foreign trade, have we observed that importations were at first checked by high duties, but presently rose higher than ever ! Every such in crease shows that the duties have in some way neutralized them selves, and the method just described is, perhaps, the most com mon. To show how this loss of the effect of duties may occur while the price of the product here is not absolutely, but ^nly relatively increased, let us suppose that cotton falls from 20 to 12 cents a pound while the high duty is in force. Both in England and here the cost of the goods is reduced. Our manufacturer now pays three cents for his material to the yard, though he formerly paid five, and, though the cost of manufacture has been increased by the tariff to four cents a yard, he can now sell without loss at seven cents, or lower than he could at first. But the British manufacturer has his cotton cheaper also, so that the goods which could be delivered here for eight and a half cents now cost six and a half, or, with the duty, seven and a half. And the natural progress in skill and machinery, under pressure of competition, has enabled him to reduce the cost of production one half cent, so that foreign goods can be sold here, duty paid, at seven cents. The American can make no profit. He flies to Congress, states with truth that competition is crushing his industry, and, by way of proving that the high tariff has not taxed 76 DOES PROTECTION PROTECT? the people at all, he points to the prices when cotton was twenty cents, and says with truth, " The same goods which I sold before the tariff for eight and a half cents, I sell now at seven and a half ; but the pauper labor of Europe undersells me, and drives me from the market." Then, Congress, convinced that high duties make low prices, gives him a larger duty, and he goes home again to manufac ture until that duty also has neutralized itself. What is the fact ? The price is absolutely lower, but relatively higher. If the cost of production had not been increased by a tariff, and if the manufac turer, forced by competition, had kept pace with others, the cost of production, originally three, would have fallen to two and a half cents a yard, and, the cost of material having fallen to three cents, the goods actually ought to be sold as low as six cents, yielding to the manufacturer a profit even then of one half cent a yard. What, then, is the result in the case supposed ? The goods sell at seven cents, the people are taxed one cent a yard, the manufacturer makes no profit, and British competition crushes him. Everybody is taxed ; nobody is benefited ; and our industry clamors for a still higher tariff. This is an imaginary case. But it shows precisely what the effect must be, when the cost of production is increased fully as much as the duty increases the cost of foreign goods. Now, any tariff which affects the prices of thousands of articles must increase the cost of production in some measure. And every such increase, whether much or little, tends to neutralize the effect of the duty, and to drive the manufacturer to Congress, seeking higher duties. That this effect does follow, we may infer from the frequency of changes under the protective system, and from the fact that imports, temporarily checked by high duties, have always become larger than ever after those duties have been in force one or two years. When the history of separate industries shall be examined, a multitude of facts will illustrate this principle. Other causes contribute to bring about frequent changes. Not all manufacturers are enterprising or careful in management. Inter ference in behalf of any interest invites all who are not successful in that business to ask further aid. The less enterprising and capable, finding themselves unable to realize large profits, repre sent that the industry, as a whole, is still depressed by foreign competition, and needs higher duties. The capable and enterprising manufacturer, not averse to still larger profits, joins the demand, or rarely opposes it. A third cause of dissatisfaction is that the manu- INTERFERENCE WITH NATURAL LAWS. 77 facturers, in anticipation of higher duties, prepare and hold as large stocks as possible, to be thrown upon the market when the new duties cause higher prices. But so many take this course, straining their capital to carry large stocks, that the market is depressed for a time, and, indeed, in some cases, great losses have occurred. Finally, the expectation of large profits invites capital to a favored industry. Men rush into it without experience or skill, and with insufficient capital, who cannot produce at a cost much below the artificial limit fixed by duties, and cannot afford to wait in an unfavorable condition of the market. Production is suddenly increased; the market is overstocked ; prices fall a little, and that little suffices to break the new adventurers, and, perhaps, older manufacturers who have been holding back heavy stocks. The broken firms cease pro ducing; the production falls once more below the demand; and, after sacrificing the entire capital of many firms, the country is in the hands of a monopoly, which points to the distress and ruin of many as proof that duties still higher are needed. He who will attentively examine any faithful history of either industry, however strongly it may advocate protection, will find examples of the work ings of these principles. " Bishop s History of Manufactures," a work which no protectionist will consider unfriendly, says (vol. 2, p. 336) of the year 1829, immediately following the passage of the high tariff of 1828 with its minimum of 35 per cent, on cotton goods : " An unusual degree of distress prevailed at this time among the manufacturers of New England, particularly in the cotton branch, producing numerous failures and great depreciation of the value of stocks. The cause was by some ascribed to the disappearance of specie, and by others to over-speculation, which had tempted great numbers into manufacturing with insufficient capital and consequent over- production." And the same result is noticed as the first effect of the tariff of 1842, which caused such a deluge of goods on the market in 1843, that many manufacturers, who had survived all the pressure of foreign competition, were then ruined. Prices were then temporarily de pressed remarkably ; but, when the market had cleared itself, they rose again higher than before, and those manufacturers who had survived made large profits. The history of the past eight years is full of illustrations of the same principles of demands for new duties from the less capable, when the majority of manufacturers were already thriving ; of demands from all, caused by increased 78 DOES PROTECTION PROTECT? cost of production ; of stoppage of factories in consequence of over production; of failures and losses caused by fluctuations of price. And every change has induced a new appeal to Congress for aid. Accordingly, the changes of tariff have been more frequent than ever before. It needs no argument to prove that these continual changes are most injurious to industry. Said one of the shrewdest manufac turers of New England, protesting against the proposed increase of duties in 1866 : " Your constant changes of tariff do more harm than any possible foreign competition. Give us any system, with duties low or high, but let it only be permanent, and the business of the country will adapt itself to the circumstances and will prosper." That he did not exaggerate the benefits of a steady and enduring policy may be inferred from the fact that the progress of the country in wealth, production, and prosperity, was never as great in any decade in its history as in the decade 1850 to 1860, the only one during which the same tariff policy prevailed, with only one slight change of duties. In like manner, speaking in behalf of the agri cultural interest, Henry S. Randall, who will be recognized by the farmers as high authority, said in 1845 : " If the same settled and steady character could be given to our tariff laws, our prosperity would be greatly augmented. The farmer wants to know what to depend upon. He asks that the fruits of his labor shall not be subject to constant varia tions in value, by reason of vacillating legislation ; he asks that his government shall not one year enact laws to encourage him to embark his capital hi one branch of industry, and the next, by adverse legislation, destroy or depreciate the value of the investment. In a word, he asks that the tariff be settled on a fixed and permanent basis one admitting of no fluctuations but those rendered indispensable by im portant natural changes, or discoveries developing new interests, or modifying existing ones." Mr. Randall s judicious words will be most heartily indorsed by the ablest representatives of every other producing interest. Constant fluctuations can benefit only the gambler. The producer, no matter of what branch, needs for prosperity a steady and settled basis for his calculations. We have seen that high duties, and especially protective and increasing duties, tend to cause fluctua tions, and that this is an almost inevitable result of the nature of that system. We have seen that low duties alone have endured for more than five years, and that non-protective tariffs tend to prevent frequent changes. It may fairly be asked at the outset, whether a system which involves frequent changes, however much it may POPULATION AND WEALTH. 79 momentarily benefit particular interests, must not of necessity pro duce by its fluctuations greater evil than can result from duties lower and more steady. CHAPTER VII. POPULATION AND WEALTH. " Ix spite of frequent changes, the production of wealth is even now increasing," it may be said. It certainly is ! During the war, when half a million of men were withdrawn from useful labor, and when heavy burdens rested upon every back, and a fearful uncer tainty filled the air even then the production of wealth increased. But we do not suppose that the war caused the increase. There has never been a period in the history of this country, of which any statistical evidence can be given, during which the aggre gate production of wealth has not increased. Single years can be found, in which widely extended commercial disaster or failure of crops occurred ; but of no period, long enough to test the working of any policy or measure, can it be said that it witnessed a decrease in the aggregate production of wealth. The reason is obvious. We have an inexhaustible supply of natural resources, land both rich and cheap, mines of wonderful productiveness, forests scarcely less than continental in area. In consequence, the time never has been when any large proportion of our population were reduced to want, or when any considerable share of our labor was more than temporarily un employed. Our population is increasing at the rate of three and a third per cent, yearly, and, unless that proportion of the laboring population were deprived of employment for a whole year, the ag gregate number of laborers and the aggregate production of wealth must have increased. But there is no period, regarding which statis tics are attainable, in which the wealth of the country has not in creased faster than population. The proportion of labor which has at any time been kept out of employment has been very small ; but the increase in the productiveness of labor, by means of inventions, facilities for transportation, development of resources, and settlement of the country, has been very rapid. Disaster in one employment has only driven a small surplus of labor to seek another. Perhaps a more considerable change of this character was caused when the war broke out than at any other time ; but even then the aggregate pro- 80 DOES PROTECTION PROTECT? duction of wealth in the Northern States was probably reduced not more than one year, and certainly not more than two. No period of tariff, whether high or low, protective or " free trade " in character, has ever diminished the production of wealth. The only changes effected have been in the mode of production, and in the rapidity of increase. This fact it is of essential importance to keep in mind, for if in every period wealth has increased faster than population, a mere increase of production under any duty proves nothing ; the test is the rapidity of increase in one as compared with other periods. Tlie population of the country has increased with very great reg ularity. Immigration and the acquisition of a vast territory swelled the increase during the decade 1800- 10 that of the Louisiana pur chase to 36| per cent., and during the decade 1840- 50 that of the acquisition of Texas, New Mexico, and California to 35^- per cent. Large immigration during the last decade, 1850- 60, made the increase 35 J per cent. Its lowest rate was in the decade of 1830- 40, when it was only 32.67 per cent. ; but no inference valuable to our inquiry can be drawn from this fact, for the loss in that decade was wholly in the slave population, the white population having in creased more rapidly than in either of the two decades preceding. The increase of the white and total population during the seven de cades since 1790 has been as follows : ft TEAK. White. Total. 1790-1800 35.68 35.02 1800-1810 36.18 36.45 1810-1820 34.11 33.13 1820-1830 34.03 33.49 1830-1840 34.72 32.62 1840-1850 37.74 35.87 1850-1860 37.97 35.46 The increase of colored population has been affected by causes not pertinent to this inquiry, and the increase of white population has been mainly affected by other causes than changes of tariff. It happens, however, that the only decade during the whole of which the protective policy was in force is the one in which the increase was smaller than in any other, 1820- 30 ; and the only decade dur ing which no protective duties of any kind were in force is the one in which the increase is greater than in any other, 1850- 60. In deed, if we remember that the decades 1800- 10 and 1840- 50 were marked by annexation of territory, the difference between the last decade of low duties and any former decade will be quite impressive. POPULATION AXD WEALTH. 81 No accurate statistics of the aggregate wealth of the country in earlier decades enable us to make comparisons. The property valued for taxation in 1789 was $619,977,247.92, and an increase at the rate of little more than 40 per cent, in a decade would give about the valuation estimated from the census of 1830, or $2,591,000,000. From 1830 to 1840 the increase was 53 per cent., and the valuation of 1840 about $3,964,322,000. From 1840 to 1850 the increase was 80 per cent., and the valuation of 1850 was $7,135,780,228. But from 1850 to 1860 the increase was 126 per cent., and the valuation of 1860 was $16,159,616,068. Incomplete as these statistics must necessarily be, they suffice to prove, first, that in every period there has been a productive power in constant and vigorous activity ; and second, that the increase has been far more rapid in that decade in which there were low duties and no material changes of tariff, than in any other in our history. Even if we suppose the natural increase of wealth to gain in a regular ratio, that gain was greater in the last than in any former decade 50 per cent, from 1830- 40 to 1840- 50, and 57| per cent, from 1840- 50 to 1850- 60. But it must be remembered that the acquisition of a vast and rich ter ritory, and the opening of California mines in the decade 1840- 50, account for a portidh of the increase of wealth in that decade. The contrast between the last decade, of low duties and no material changes of tariff, and any preceding decade, then becomes still stronger. We may fairly say that the increase of wealth from 1850 to 1860, from causes other than the acquisition of territory, was nearly double that of any former decade. It appears, then, that the same period in which our population gained most rapidly is also that in which the production of wealth was most largely increased. It happens to be the only decade of continuous low duties ; the only one in which nothing like protection was attempted. Of the progress of the whole country in wealth since 1860 no complete and reh able statistics can be given. The Secretary of the Treasury has recently made an estimate, which, however, was not based upon any ascertainment of facts, but upon the supposition that the increase has been about as great since 1860 as it was during the preceding decade. Mr. Wells, the Special Commissioner of the Revenue, in the report just published, gives an estimate confessedly based only upon a supposed continuation of the increase at the rate of the increase during the preceding decade, with allowance for property destroyed and productive industry diverted in consequence of the war. But both these estimates take for granted the very 82 DOES PROTECTION PROTECT? thing in question whether the rate of increase has been -as great since 1860, allowance being made for the war and its effects, as it was before. Always faithful to facts when he can ascertain them, however, Mr. Wells has presented statistics which, if they do not suffice for a reliable estimate of the present wealth of the country, at least suffice to prove conclusively that the supposition above men tioned is quite unwarranted. These statistics are records of valuations t)f property, real and personal, in several of the richest States, according to assessments for taxation by State authority. That these assessments never rep resent the full value of property is true ; but it may fairly be sup posed that as to real estate, at least, they are likely to bear about the same relation to the actual value in different years. As to personal property, which can more easily be concealed from assessment, the disposition to conceal it has undoubtedly been increased by the in crease of taxation since 1861 ; but, on the other hand, the efforts to discover property have been stimulated by the same cause, and that work has been greatly aided by the laws passed and the efforts made by the Federal Government to reach property for taxation. On the whole, however, it is probable that assessments do not now reach quite as large a share of personal property, other than United States bonds, as they did in 1861 ; but the difference in the relation of aggregate assessments of real and personal property to actual value cannot be material. But the property invested in United States bonds is important, and a material difference in the calcu lation must be made for the fact that so large a value of personal property is now in form not subject to taxation. Of a bonded debt of about twenty-one hundred millions, it is estimated by the best authorities that not less than one thousand millions are now held in foreign countries, and three hundred and forty-two millions held as security for bank circulation are represented in the capital of the banks, and the property thus invested is therefore within reach of taxation. Deducting these, there remain about seven hundred and fifty millions of United States bonds held in this country, an invest ment of property not liable to taxation or assessment by State au thority. For this withdrawal of property from assessment, allowance must be made in any estimate based upon assessments in 1861 and 1868.* * Since this was written, I have learned that in at least one of the States named the valuation includes United States bonds, though I supposed they were not in cluded in either. POPULATION AND WEALTH. 83 Mr. "VVells gives the assessments in Massachusetts, Rhode Island, Connecticut, Ohio, Indiana, and New York, for 1861 and 1868, as follows : Valuation, Real and Personal. STATES. 1861. 1868. Massachusetts $861,485,418 $1,220,498,939 Rhode Island 121,118,126 187,697,591 Connecticut 224,962,514 312,574,408 Ohio .. . 892,850,084 1,143,461,386 Indiana 441,562,339 587,970,549 New York 1,441,769,430 1,766,089,140 Total $3,983,747,911 $5,218,292,013 In these States the nominal increase has been 81,234,544,102, or 31 per cent. But during the year 1868 the premium on gold was 39.8 per cent., so that the gold valuation of property for assessment in these six States was actually less in 1868 than in 1861 ! Yet these States embrace no small share of the wealth of the whole country. In 1860, according to the census, their wealth was %&ffo per cent, of the entire valuation reported. They represent mainly that very branch of industry which it is the object of the protective system to promote ; and in States like these, if anywhere, the recent tariffs must have caused a more rapid production of wealth. If the country has increased in wealth while these States have declined, it may be said with certainty that the increase has not been in conse quence of any development of manufactures that it has been^in spite, and not because of the tariff. But no one will suppose that the aggregate wealth of the country has increased in ratio materially different from that in the six States named. Reducing the valuation for 1868 to gold at 139, we have this comparison : Valuation six States, 1861 $3,983,747,911 Valuation six States, 1868 3,757,170,249 Loss in seven years $226,577,662 This shows a loss of 6 per cent, in seven years. If the wealth of the whole country has decreased in like proportion, the loss has been $850,000,000, a sum larger than the whole amount invested in United States bonds not reached by assessment. If this cal culation were absolutely correct, what would follow ? This, simply ? that the destruction of wealth by the war has been as great as the entire increase by the production of wealth up to the year 1868. Mr. Wells estimates the " destruction of wealth, or diversion of 84 DOES PROTECTION PROTECT? industry which would have produced wealth," at nine thousand millions of dollars. But in this estimate he counts all money ex pended by the Government in supporting men under arms, and, at the same time, counts the loss of their industry. The men must have been fed and clothed, had there been no war. He counts all the money applied by them to the support of families ; but those families also must have been supported, and would probably have consumed as much, had there been no war. He counts all that sol diers saved from their pay, and sailors from their prize-money, and all the money paid in bounties or yet to be paid in pensions, as so much wealth absolutely destroyed, whereas it was simply transferred from one person to another. Much more than half the expenses of Government, in feeding, clothing, and paying the army and navy, must be deducted, with all pensions and bounties paid, and all the bonded debt now held in this country, which is simply property in another form. With these corrections, the cost of the war, as a re duction of the wealth of the country, was not more than four thou sand millions, accepting the estimates of Mr. Wells in other respects, and those estimates are certainly liberal. Had there been no war, then the country should have been four thousand millions richer than it is ; or, since it seems to have gained not more than the war has cost, the increase by production of wealth has been apparently about four thousand millions, or 28 per cent, in eight years. This estimate would show an increase during the de cade of not more than 35 per cent., against 126 per cent, in the pre vious decade ; and, of that 35 per cent., 28 per cent, would be cancelled by the losses and the waste of war. It is not pretended that this estimate is altogether reliable. Any calculation based upon assessments for taxation must be accepted only with many reservations. But one thing it does seem to prove : that, after making full allowance for property which is now invested in bonds, and after making full allowance for the waste and destruc tion of property and diversion of industry caused by the war, the increase of wealth during the decade now drawing to a close must have been less than the increase during the decade 1850- 60 under a revenue tariff. The estimate may vary widely from the truth, but it can hardly vary as widely as the supposed increase differs from the ascertained increase of that decade. AGRICULTURE. 85 POPULATION OP THE UNITED STATES. YEAR. Population. YEAR. Population. YEAR. Population. 1791 1792 4.067,371 4.205,404 1818 1819 9.158.513 q 398 339 1844... 1845 19,034.332 19 525 749 1793 4 343 457 1820 9 638 166 1846 20 017 155 1794 4481 500 1821 9 959 965 1847 20 508 582 1795 4.619 553 1822 10 281 765 1848 21 413 890 1796 4 757 586 1823 10 603 565 1849 21 956 945 1797 4 805 629 1824 10 925 365 1850 23 191 876 1798 5.033 672 1825 .. .. 11 247 165 1851 23 887 632 1799 5 171 715 1826 11 568 965 1852 24 604 261 1800 5 379 788 1827 , n 890 765 1853 25 342 388 1801 5.5()2 772 1828... 12 212 565 1854 26 102.659 180-2 5 695 787 1829 12,534 365 1855 26 885 738 1803 5 888 801 1830 12 856 165 1856 27 692 310 1804 6,081,816 1831 13 277 415 1857 28.523.079 1805 6,274,830 1832 13 698 665 1858 29 378,771 1806 6 467 845 1833 14 119 915 1859 30260134 1807 6 660 859 1834 14 541 165 I860 31 429 891 1808 6.853,874 1835 14 962 415 1861 32 373.388 1809 7,047,888 1836 15 383 665 1862 23 500 000 1810 7.239,908 1837 15,804,915 1863 24.400,000 1811 7,479.729 1838 16 226 165 1864 27,000.000 1812 7,719.555 1839 . 16 649 415 1865 30,000,000 1813 7 959 381 1840 17 068 665 1866 35500000 1814 8,199,208 1841 17 560,082 1867 36.500.000 1815 8.439 034 1842 18 051 499 1868 37,500,000 1816 . . . 8,678 860 1843 18 542 915 1869 38640000 1817 8,918,687 The population given for the years 1862- 65, inclusive, is the Treasury estimate of persons within the military lines, and in all calculations of exports or imports, production or consumption per capita, these figures are used, with the estimates given for the sub sequent years, as approximately correct. __^ f CHAPTER VIII. AGRICULTURE. Library BY far the greater part of our production of wealth is by means of agriculture. The annual product of that branch of industry, ac cording to the census of 1860, was about $2,598,393,364. The product of manufactures, mining, and fisheries, was $1,885,861,676; but the cost of raw material consumed was $1,031,605,092, so that the wealth produced by those industries was $854,256,584 less than one-third of the amount produced by agricultural labor. In a scientific rather than a popular sense, trade and transpor tation produce wealth, it is true, by adding to the value of products of other industries. But these employments depend upon the indus- 86 DOES PROTECTION PROTECT? tries commonly called productive ; and, since it will not be claimed that legislation injurious to agriculture, mining, manufactures, and fisheries, in the aggregate can have increased the production of wealth, and it is impossible to distinguish in statistics between the increased value given to foreign and the increased value given to domestic products by exchange or transportation, it will be sufficient for the purpose of this inquiry to consider the effect of tariffs upon those popularly known as producers. Thus agriculture, mining, manufactures, and fisheries, may be regarded as the wealth-producing industries, and of their production more than three-fourths is by means of agriculture. The protective system is designed to aid manufactures and min ing. Its theory is that those operations in which large capital and costly machinery are needed must be stimulated by legislation, while the abundance of cheap land renders it unnecessary to stimulate or shelter agriculture. But, when the farmer began to feel the burdens which the protective system imposes, men sought to reconcile farmers to their burdens by pretending to give them a share of the benefits. Duties were imposed on wool for the North, and sugar and tobacco for the South ; and in due time other duties, of no effect whatever except in localities close to our northern border, were added. The tariff under which we now live imposes duties of twenty cents a bushel on wheat, fifteen cents on rye and barley, ten cents on oats and corn, and twenty-five cents a bushel on potatoes, the potato in terest being thus peculiarly protected ! It can hardly be said that we owe the existence of the potato industry to this beneficent duty ; for in 1860, under a revenue tariff, we raised 153,000,000 bushels of that crop, and in 1867, under protection, it yielded only 97,000,000, and, in 1868, only 106,000,000 bushels. Nor can it be said that the market is flooded with foreign potatoes grown by pauper labor ; for in 1868 we imported only 194,905 bushels, or less than one very small potato to each bushel of domestic production. If any farmer supposes that his crop is increased in value by this duty, he may ob serve that the average price of potatoes for New York, the State most exposed to this flood of foreign potatoes, according to the Agri cultural Bureau, is lower in currency than the price paid in gold in 1860, before this peculiar form of protection began. It is amazing, too, that a crop so important as that of Indian corn receives no better protection than a duty of ten cents a bushel ; and yet, though exposed in this manner it amounts to 768,000,000 bushels. Strange it is that our production has not been stopped by the flood of corn AGRICULTURE. 87 from Canada, whence we received in 1868 just 43,042 bushels, cost ing seventy-one cents a bushel in gold ! Of the duty on wool we shall inquire in another chapter, and it will appear that in every instance the protective duties have de prived the grower of a part of the value of his fleece. Duties on sugar and tobacco would be imposed for revenue rather than protec tion. On every other agricultural product except potatoes, the du ties are lower now, under an extreme protective tariff, than they were under the purely revenue tariff of 1846 a fact which suffices to prove that the protective system is not meant to protect the farmer, and that the duties imposed on the great products of agriculture are merely legislative tubs thrown to political whales. Under the level ad valorem tariff those products then paid 30 per cent., while they now pay only 20, 15, or 10 cents, as already stated ; flax pays only 4 per cent., Russian hemp 23, and Manilla 20 per cent. Wheat then paid 30, and in 1868 only 12 per cent., and not one of the grains pays as large a duty as was imposed by the revenue system. Per haps potatoes, the duty on which has been raised from 30 to 56 per cent., are specially protected, because their bulk makes them least likely to be imported. No sensible man supposes that the farmers of this country get a better price for their crops because of these duties. It is an insult to the farmer, if his intelligence is supposed to be unequal to the task of discovering that they do not really benefit him. The plain truth is that these duties are put into a bill for the benefit of manufacturers, in the hope that some farmers may be so ignorant as to suppose themselves blessed thereby. Indeed, in 1844 it was gravely argued by one of the advocates of the tariff then in force, that our farmers were in need of a protective duty, lest their industry might be destroyed by the importation of wheat from Russia ! The farmers who vote for such members chiefly need protection against their own ignorance. From the earliest times the large majority of farmers in this country have looked upon the protective system as injurious to their interests. They could well understand that a people, with land as cheap and as rich as ours, could not be and did not need to be pro tected in agriculture against any other country. They could see the effects of the protective system upon the prices of manufactured products of which they were consumers, and they held that the sys tem could in no way benefit, while, to some extent, it manifestly taxed them. Moreover, an opinion widely prevailed that the prices 7 88 DOES PROTECTION PROTECT? of agricultural products were lower under the operation of the pro tective system than under other tariffs. To overcome this opposition, it has been argued that protection will in some way prevent the exhaustion of the soil, and facilitate the return to it of the elements withdrawn in crops sent to market. If it were true that under non-protective duties we exported ten times more largely of breadstuffs and raw materials than under pro tective duties, this reasoning would still be absurd. To the farmer it makes no difference whether his wheat or his cotton is sent to New York, New England, or to Liverpool. The possibility of a re turn of its fertilizing elements to the soil is not greater in one case than in the other. Farmers within short distances of cities or towns, whether manufacturing or not, may, by some possibility, receive again in the form of manure the identical elements of their crops, or an equivalent to some extent ; but farmers so located would also do this, whether the tariff were protective or not, and they are in num ber not to be considered in comparison with the millions of farmers who never bring from any city a single peck of manure, or who use only such fertilizers as guano. Throughout the great producing re gion no fertilizer is needed or used, and the crop sent to eastern con sumers might as well be sent to England or China. But even at the East or nearest cities and towns, of the fertilizers used, guano, gypsum, plaster, lime, ashes, bone or fish, it is difficult to see how the supply of a single one can be affected by the quantity of wheat exported, or by the tariff. No protective duty has caused the birds to visit particular islands of the sea, or placed in the earth the de posits of stone, or caused the people of towns to burn wood or to gather bone for grinding. It is hard to give serious treatment to such evanescent will-o -the-wisps of argument. The farmer, be he east or west, will hardly raise good crops who looks to Congress to fertilize his fields by law. In practical effect on his soil, he will find one dead fish worth a million tariffs. Others have reasoned that agriculture will become over-crowded, and the prices of its products depressed, by the withdrawal of labor from other occupations. In reply to this argument, facts will be pre sented showing conclusively that the prices of agricultural products have increased during the longest period of low duties, and that the number of persons employed in manufactures, mining, and the fisher ies, and in trade and transportation, during that same period, increased more rapidly than the whole population. If, during fourteen years of a non-protective policy, and of lower duties than have been in AGRICULTURE. 89 force in any other period since 1816, the proportion of persons at tracted to other occupations increased, and the price of agricultural products rose, it must be conceded that the fear of an overcrowding of agriculture, as a consequence of low duties, is groundless. The census returns for 1850 and 1860 show that, during that period, the number of persons engaged in manufactures, mining, and fisheries, increased from 956,000 to 1,310,000, or more than 37 per cent., population meanwhile increasing only 35J per cent. In view of these facts, the apprehension of overcrowding agriculture may be dismissed as chimerical. The most common and plausible argument to prove that the pro tective system will benefit agriculture is, that it will build up a local home market for agricultural products. It has this basis of truth, that farmers in the immediate neighborhood of manufacturing towns are enabled to raise bulky or perishable crops for that market, which they find highly profitable. Hence, it is somewhat hastily inferred that the protective system will give to all farmers this advantage. But it is the proximity to a town, and not the protection, from which the advantage comes. Other towns, as well as the manufacturing centres, give it. Unless protection can build up towns in immediate proximity to every farm unless, in short, it can bring one-half of our population to live packed together in cities, while millions of acres of rich and wild land remain uncultivated the argument is deceptive. But somebody must grow wheat, corn, and cotton, and those other crops which will not be produced on costly land near a large market. The country cannot do without these crops to have every farmer raising garden vegetables and strawberries ; and a na tion composed two-thirds of operatives and mechanics living entirely on the costly vegetables which farmers can afford to raise for a city market, however beautiful it might seem to the eye of the specu lative philosopher of the protective school, would scarcely find any body to consume its wares and fabrics. The absurdity of this, which may be called the garden-sauce theory of political economy, is sufficiently made manifest by the fact that in 1860 the entire re turned value of market gardens and orchard products was only thirty -five millions ; only this quantity was required to supply the consumption of a body of over two millions of persons engaged in manufactures, mining, fisheries, trade, and transportation. If two millions of consumers required $35,000,000, more or less, of garden products, how many millions of consumers must we have to enable all our farmers to raise vegetables and fruits for a city market ? 90 DOES PROTECTION PROTECT? Laughably unimportant as this branch of production is, compared with the great crops of agriculture, it does not appear that even the garden-sauce interest can in any way be promoted by protective du ties, unless those duties will increase in the aggregate the number of persons engaged in manufacturing, and, at the same time, dis perse them about the country in such a manner as to create towns where none existed before. Certain natural facilities determine the selection of localities for manufacturing establishments. The presence of a natural water-power, proximity to coal mines, or mines of mineral, and lines of communication which afford the cheap est transportation for materials and products these determine the location of the great manufacturing centres, and in the nature of the case such centres are few in number. Around such natural centres cluster many minor and dependent branches of manufacture. But by far the greater number of persons engaged in manufacturing have their locations fixed by the lines and centres of trade, and gather of necessity in those towns which the lines of trade create. From time to time new mines are opened ; but by far the greater portion of the increase in the number of persons employed in manu factures is simply an increase in the population of a few large cities or manufacturing centres. That increase of population benefits, by creating increased demand for garden or orchard products, only the farmers who already own lands near such localities, and the increase by opening of iron mines affords a market only to the few farmers who own lands adjacent to these. The great bulk of the farming popula tion remains beyond the reach of benefit in that way, whether the increase of manufactures be rapid or tardy. Manufacturing, limited in its choice of location by natural facilities or lines of trade, tends peculiarly to a compact and concentrated growth around great centres of industry ; and the expectation of building up a factory on every farm, if by anybody seriously entertained, is doomed to disappointment. To all these curious theories of the benefit to be derived by agriculture from the protective system, a few statistics conclusively reply. The census returns of 1840, 1850, and 1860, if not abso lutely correct, are sufficiently accurate in regard to this industry to enable us to test its progress. The decade 1840- 50 embraced the protective period of 1843- 46. The decade 1850- 60 was one of low and non-protective duties throughout. The accompanying tables show whether this industry progressed more rapidly in the decade which includes a protective period than in the decade of unbroken non-protection. AGRICULTURE. AGRICULTURAL PRODUCTS QUANTITIES. 91 CROP. 1S40. 1850. 1860. 1867. 1868. Corn, bushels Wheat, " Eye, Oats, " Barley, " BnekwH, " Potatoes," Hay, tons Tobacco, Ibs 377,492,388 84,821.065 18,640.486 123,054.992 4,161,210 7,291.371 104,285,435 10,246,777 219,607,739 592,071,104 100,485,944 14,188,813 146,584.179 5,167,015 8,956,912 104,066,044 13,838.642 199,752,655 838,792.740 173,104.924 21,101,380 172.643.185 15,825,898 17,571.818 153,243,893 19,083.896 434,209,461 768,320.000 212.948.390 23,184,000 278.698,000 25,727,000 21,359.000 97,783.000 26,277,000 313,724,000 906.527,000 224.036,600 22.504,800 254.960.800 22,896,100 19.863.700 106.090,000 26,141,900 320,982.000 Cotton, bales 1,513,543 2,445 793 5,387,052 2,450,000 2,500.000 AGRICULTURAL PRODUCTS VALUES. CROP. 1850. 1860. iser. 1868. 1868 Ceold). Corn $296 035 552 $503 275 644 $610 948 390 $569 512 460 $410 048 971 Wheat. 100 485 944 216 381 155 421 796 561 319 195 290 229 820 609 Rye 7,803,847 12660,828 32,499,790 28,683,677 20,652,247 Oats 43 975 253 57 547 728 172 472 970 142,484 910 102 589.185 Barley 3 616 910 7 912 949 23 850 130 29 809 931 21 463 150 Buckwheat 6 969 838 14 057 454 23 469 650 20 814 315 14 986 307 Potatoes 45 453 232 76621 946 89,276,830 84.150040 60,588^029 Hay 96 870 494 190 838 960 372 864 670 351,941 930 253 398 190 Total $601 211 070 $1,079 296.664 $1,746,178,800 $1,546,592,553 $1,113,546,638 Cotton 98 603 720 215 480 000 220 000 000 325 000 000 162 000 000 Tobacco 13 982 686 43,420,946 41,283,431 40,081,942 28.858,998 Total $713,797,476 $1,338,197,610 $2,007,462,231 $1,811,674,495 $1,304,405,636 The crop of corn increased over two hundred millions in each of the periods under comparison ; that of wheat increased sixteen mil lions, or 19 per cent., in the period 1S40- 50, and seventy-three mil lions, or 72 per cent., in the period 1850- 60 ; rye decreased in the first period four and a half, millions, and increased in the second seven millions ; oats increased twenty-three and a half millions in the first, and twenty-six millions in the second period ; barley in creased one million in the first, and ten millions in the second pe riod ; buckwheat increased less than two millions in the first, and over eight millions in the second; tobacco decreased about twenty millions in the first, and increased two hundred and thirty-four mil lions in the second ; and cotton increased nine hundred thousand bales, or 60 per cent., in the first, and nearly three million bales, or about 125 per cent., in the second. These crops, however, are pro duced largely for exportation ; let us see how those fared which de pend wholly or mainly upon a home market. In hay, the increase was three and a half million tons in the first period, or 33 per cent, but in the second period it was 5,245,000, or 38 per cent. The home 92 DOES PROTECTION PROTECT? market appears to have been the better in the non-protective period. Again, in potatoes there was an absolute decrease in the first period, but in the second an increase of forty-nine millions of bushels. Very clearly, this crop also found an encouraging home market under low duties. It may be added, as evidence that the production of crops for a home market exclusively was by no means retarded during this long period of low duties, that the quantity of butter produced in creased from three hundred and thirteen millions to four hundred and fifty-nine million pounds ; of peas and beans, from nine to fif teen million bushels ; hops, from three and a half to eleven million pounds ; clover seed, from 468,973 to 956,188 bushels ; grass seed, from 416,921 to 900,040 bushels. The value of orchard products in creased five and a quarter millions in the first, and 7,190,000 in the second period, a larger increase, but smaller percentage. But the value of market gardens increased in the first period about two and a half millions, or 100 per cent., and in the second about ten mil lions, or 200 per cent. This comparison must satisfy those who look at political economy from a market-garden point of view, that protec tion is a grave mistake ! For comparing values, the census of 1840 does not give complete data ; but from 1850 to 1860, the value of slaughtered animals in creased over one hundred millions, or 90 per cent. ; the value of live stock over five hundred millions, or about 100 per cent. ; the value of farm implements and machinery about ninety-five millions, or 60 per cent. ; and the value of farms more than three thousand three hundred and seventy millions, or over 103 per cent. The entire wealth of the country in 1840 was nearly four thousand millions. The increase between 1840 and 1850 in the value of farms can by no computation be estimated higher than eleven hundred millions, or 52 per cent. But the increase in the decade of unbroken low duties was about twice as great. It will not be forgotten that this enormous increase in the pro duction of wealth by agriculture was not caused by the change of laborers to that pursuit from others, or at the expense of a reduced price of agricultural products. We have stated that during the same decade of low duties the increase of laborers in manufacturing industry was more rapid than the increase of population, proving that, in spite of non-protection, a larger share of the population was drawn to manufacturing for employment. Yet the quantity of agri cultural products increased, as has been shown, with great rapidity, and the value of farms, by which their productive power may be AGRICULTURE. 93 measured, increased over 103 per cent. The actual value of the leading crops above mentioned increased from seven hundred and fourteen millions to one thousand three hundred and thirty-eight millions, or over 80 per cent. But what has been the effect of the recent protective duties ? It may be supposed that the decade 1840- 50 was an exceptionally unfavorable one for the agricultural interest, or that, as it comprised only four years of protective duties, the comparison is unjust. Of the progress since 1860 we have no more reliable statistics than those of the Agricultural Bureau, and the latest published report is that of 1868. Its statements, therefore, may be accepted as the best and latest evidence attainable as to the progress of agriculture under the recent extreme protective duties. The figures are given in com parison with those of 1840, 1850, 1860, and 1867. In the production of corn there is a decrease in 1867 of seventy millions, but in 1868 an increase of about sixty-eight millions of bushels, or about 8 per cent. The crops of tobacco and cotton have largely decreased, but in part from causes not connected with this inquiry. The increase in wheat, since 1860, has been forty millions in 1867, and fifty-one millions in 1868, a gain of 29 per cent, in eight years ; while in the ten years preceding 1860 the gain was 73 per cent. The crop for the year 1869, though not accurately known, is estimated in the papers at two hundred and fifty millions of bushels, a gain of 43 per cent, since 1860. In rye, the increase has been scarcely 7 per cent, against 50 per cent, in the last decade. The crop of oats has in creased about 48 per cent., and is the only one of the principal crops which has increased as rapidly as it did in the decade ending in 1860. Barley has increased about 40 per cent, in 8 years, against 200 per cent in ten years. Buckwheat has increased about 13 per cent., against nearly 100 per cent, in the last decade. Hay has in creased about 36 per cent, against 38 per cent. Potatoes, notwith standing "protection," have decreased about forty-seven millions, or nearly one-third. It is very plain that agriculture has not ad vanced as rapidly by any means in the present as it did in the last decade. But it may be said that the increase in value of crops may have compensated for a loss in quantity. This has been in part the case with cotton and tobacco ; these crops together, though much reduced in quantity, command so much larger prices, that the value realized in currency is about seven millions more than it was in 1860 in gold. But other crops have fared quite otherwise. In the tables given for values, the estimates of the Bureau are accepted for 1867 94 DOES PROTECTION PROTECT? and 1868, though the prices are much higher than the average allowed for 1860 and 1850. The figures for 1850 are from De Bow s Compendium of the Census, and those for 1860 are prepared on the same plan, allowing for the average value throughout the country the same proportionate reduction from the prices at New York in 1860. In the last column, the values for 1868 are reduced to gold at 139, a little less than the average premium for the year. It ap pears that the crop of corn, though somewhat larger, was worth nearly one hundred millions less in gold than the crop of 1860, while that crop was worth over two hundred millions more than the crop of 1850; that the crop of wheat increased in value only about 6 per cent, in eight years, against an increase of 116 per cent, in the last decade ; that the crop of buckwheat has increased less than one million in value, against a gain of over 100 per cent. ; that the crop of potatoes has decreased sixteen milh ons in value, against an in crease of over 60 per cent. ; and that the crop of hay has increased in value only 33 per cent, in the last eight years, while the increase during the last decade was almost 100 per cent. The aggregate value of the principal crops, except cotton and tobacco, increased only $46,250,000, or 4J- per cent, in eight years, while the value of the same crops increased from 1850 to 1860 over four hundred and seventy-eight millions, or about 79 per cent, in ten years. No possible correction of these estimates can affect the conclusion to which they irresistibly lead that the increase in the production of wealth by means of agriculture has been arrested in a most re markable manner during the past eight years. Instead of the rapid and healthy progress of the last decade, by which the wealth of the country was more than doubled, though manufactures at the same time increased with about the same rapidity in value of product from one thousand to nineteen hundred millions there has been during the eight years ending with 1868 scarcely any increase what ever in the value of Northern agricultural products, with a positive decrease in aggregate value, if cotton and tobacco are included. Two other items, for which the Agricultural Bureau furnishes sta tistics, confirm, in the most striking manner, these conclusions. The value of live stock increased a little more than 100 per cent, from 1850 to 1860. But from 1860 to 1867 the apparent increase was only three hundred and seven millions, less than the difference between currency and gold, and the value given by the Bureau, $1,337,111,822, for 1868, reduced to gold at 139, is only $962,720,511, against $1,089,329,915 in 1860. Again, the report of 1867 contains AGRICULTURE. 95 a very elaborate statement of the value of farming lands in that year, as compared with 1860, from which it appears that in only one of the old States there has been an increase equal to the difference between gold and currency, and in that State, Delaware, the im provement was due to new railroads. In Illinois the nominal increase was 42 per cent., or 2 per cent, actual increase ; in Michigan, 70 per cent., or 30 per cent, actual ; in Wisconsin, 50 per cent., or 10 per cent, actual, and in Iowa 75 per cent., or 35 per cent, actual. But in these States the great increase of population and railroad facilities has caused the improvement. The value of farming lands is determined by the net value of their annual products. The fact that in all the great agricultural States there has been an actual decrease in gold values, except in the newer Western States named, and in Illinois so small an increase, conclusively proves that the value of agricultural products has not advanced as fast as the actual cost of production, so that the farms are absolutely less profitable, and can produce less wealth now than they could in 1860. It is indeed true that the crops of 1869 have been generally larger than those of 1868, but the very remarkable fact appears that this increase of crop has caused a corresponding decrease of price. The country is to-day not able to consume as many bushels of grain and potatoes, per capita, as it could consume in 1860, at higher prices in gold! For the aggregate quantity of grain and potatoes produced in 1868 was 1,656,879,000 bushels, or 42 bushels per capita, while in 1860 the aggregate quantity was 1,392,283,838 bushels, or 45 bush els per capita. But in 1868 the aggregate value of those crops was $860,148,448 in gold, and in 1860 the aggregate value was 8888,457,704 in gold. And the crops of 1869, a little larger in quantity, at once depressed prices materially. This is the decisive fact in the discussion of the tariff question. By all parties the truth is acknowledged that any system which in volves injury to agriculture, that industry by which three-fourths of our wealth is produced, must be injurious to the whole country. Hence it is claimed that the protective system will create " a home market " for agricultural products establish in this country such a body of consumers that a larger crop of agricultural products can be consumed here at better prices. The low tariff in force from 1850 to 1860 did so develop manufactures, mechanic arts, commerce, trade, and transportation, that crops from 50 to 100 per cent, larger in quan tity were consumed at prices 10 to 50 per cent, higher, so that the 96 DOES PROTECTION PROTECT? aggregate value of the principal crops increased from $713,797,476 in 1850, to $1,338,197,610 in 1860. But the high protective tariffs in force since 1860 have in some way so retarded the natural growth of this home market that crops not as large per capita as those of 1860 were consumed in 1868, at a cost twenty-eight millions less than that of 1860, and a small additional increase of the crop in quantity instantly forces down prices below the cost of production and much below the gold values of 1860. But the advocates of protection will reply that, although the growing of wheat, cotton, and other principal crops may be discour aged, the farmers are enabled to grow garden produce and green crops for consumption in cities and manufacturing villages, and to ob tain better prices for these than they could for principal crops. No statistics are obtainable of the product of such crops in recent years ; but, if the absurdity of this theory has not been already sufficiently demonstrated, the records of the Agricultural Bureau give it the coup de grace. If the farmer can produce a more valuable crop, his farm becomes more valuable. The Bureau gives statistics which prove that the farms of the chief manufacturing States are actually worth less money to-day in gold than they were in 1860. The re port for 1867, p. 119, gives the following summary of "the increase or decrease of nominal values of farm lands in the several States since 1860," and it is only necessary to remember that the premium on gold in 1867 was 40 per cent. : STATES. Increase per cent. Decrease per cent. STATES. Increase per cent. Decrease per cent 65 70 28 55 18 Maine . ... 19 17 17 17 18 20 28 30 25 66 20 27 50 60 55 55 60 Mississippi New Hampshire Louisiana Vermont Texas Massachusetts. ... . Arkansas Rhode Island Tennessee 32 10 32 42 27 32 70 50 100 75 150 175 Connecticut New York West Virginia Kentucky New Jersey .... Missouri Illinois Delaware Indiana Maryland Ohio Virginia Michigan North Carolina South Carolina Wisconsin Minnesota Georgia Iowa Florida Kansas Alabama Nebraska The increase in the Western States is due to settlement and ex tended railroad facilities. The increase in States like Ohio, Illinois, Indiana, Michigan, and Delaware, is fully accounted for, also, by the increase of railroad facilities. But the remarkable fact remains that AGRICULTURE. 97 in every one of the great manufacturing States the cash value of farms is absolutely less than it was in 1860. Reducing the statement of the Bureau to gold values, it appears that the actual value, in 1867, of land worth $100, in 1860, was in the several States as follows : Maine $85 68 New Hampshire 84 24 Vermont 84 24 Massachusetts 84 24 Rhode Island 84 24 Connecticut 86 40 New York 92 16 New Jersey 93 60 Pennsylvania f 90 00 Maryland 86 40 West Virginia 95 04 Kentucky 79 20 Missouri 95 04 Illinois 10080 Indiana 91 44 Ohio... .. 95 04 From this statement, the farmers of the manufacturing States can learn exactly how much protection has cost them in the value of their farms. In Massachusetts it has cost them $15 76 on every $100 ; in New York $7 84, and in Pennsylvania just $10 on every $100. Can there be a more conclusive demonstration of the fact that, even in the largest manufacturing States, the cost of production has increased more largely than the value of crops raised even for a market close at hand ? For population has unquestionably increased in these States, manufacturing has made progress, new towns and villages have grown up, and there must of necessity be a larger de mand for those products which can be raised only for markets near at hand. But the value of a farm must depend upon the profit which can be realized by working it, and that depends upon the value of products raised, compared with cost of production. If the actual value of farms is less than it was in 1860, the conclusion is unavoidable that the cost of production has increased more rapidly than the value of products which can be sold in an enlarged market. There is no reason to doubt the accuracy of the statement given by the Bureau. But the conclusion to which it leads is absolutely fatal to the whole system of protective duties. For to no other cause can the injury to agriculture be ascribed. The comparison of crops and values in former years is conclusive. Similar comparisons for earlier periods are not possible, for want of statistics of minor crops ; but the crop of wheat is by all regarded as a fairer test than any other of the general progress of agriculture, and of that crop the production at different periods is thus stated : Increaie Bushel* i Increase Bushels YEARS. Crop. percent per capita. YEARS. Crop. per cent. per capita. 1790. . . 17,000.000 4.19 1840 84.321.065 .69 4.96 1800... 22.000.000 .29 4.15 1850 100,485,944 .19 4.. 33 1810 30.000000 36 4 ig 1860 173 104 924 72 5 51 18QO 38.000.000 .27 3.95 1868 224,036,600 .29 5.97 1830 50,000,000 .31 3.88 98 DOES PROTECTION PROTECT? These records show that the production of wheat, as compared with population, declined during the forty years from 1790 to 1830> from 4.19 bushels per capita to 3.88 bushels per capita ; and that, during nearly forty years since, it has increased to 5.97 per capita. The year 1830 was just before the close of the long protective pe riod, and prior to the beginning of that experiment were the em bargo of 1808 and the War of 1812, so that our commerce was al most unceasingly interrupted, by war, high tariffs, or other blessings, from 1808 to 1832. But from 1810 to 1830 the production of wheat declined from 4.16 bushels per capita to 3. 88 per capita. Again, the progress from 1830 to 1860 is broken by a marked decrease in the decade 1840- 50, and it happens that in that decade, and in no other after 1832, until 1861, there was a protective tariff in force, from 1843- 6 inclusive. Finally, during the eight years since 1860, the increase of population having been retarded by war, there is a slight increase in the production of wheat, from 5.50 to 5.97 per capita. But the two periods in which we have increased most rapidly have been the very decades during which non-protective tariffs were the rule, namely: the decade of the compromise tariff, 1832 to 1840, and the decade of the revenue tariff, 1850 to 1860 ; and in those decades the increase was 69 and 72 per cent., and in no other period was the increase more than one-half as great. Did agriculture become overcrowded in these periods, so that its products declined in price ? Statistics are attainable with which to answer that question also, and as the precise inquiry before us is whether the protective or the non-protective system causes the greater increase, not in the production of crops, but in the produc tion of wealth by agriculture, the comparison of values is indeed the more correct one. As it is not well with the farmer when he raises a great crop but has no market for it, so the production of wealth by agriculture may decrease, though crops increase in quantity. We may, indeed, infer that production will only temporarily increase be yond the demand, and that rapid increase during any period is proof that the labor so employed has been well repaid. But statistics are better than syllogisms. The price of wheat in all parts of the coun try is determined, first, by the price in a market for export ; second, by the price in chief markets for consumption, and third, by cost of transportation to those markets. We shall presently see that the cost of transportation has been very materially reduced by the more rapid increase of facilities for transportation under non-protective than under protective tariffs. But, setting aside that topic for the AGRICULTURE. 99 moment, let us first take the New York prices of wheat, and sup pose that these have borne the same ratio to the actual value to the farmer in different years. The following statement does not give the actual value of the crops, but the value at which they could have been sold in the principal market for export, New York : YEAR. Price. Value of Crop. Increase. Per cent. 1820 1 00 38 000000 1830 1.06 53;000.000 15,000.000 .36 1840 1 10 93 303 000 40 303.000 .76 1850 1.25 125.600.000 32,297.000 .35 I860 1.50 259,656.000 134,056.000 1.07 1869 (currency) 1.37 342 000,000 82.000.000 .32 1869 (gold) 1.06 265,000,000 5,344,000 *x The crop of 1869, supposed to be about two hundred and fifty millions of bushels, is included at the prices prevailing in New York since it has begun to be delivered. It will be observed that, in every period until the present, the price of wheat has risen, so that the increase in the production, not of wheat but of wealth by wheat- growing, in the last decade, was 107 per cent. ; that this was three times as great as the increase in either of the periods, 1S20- 30, wholly protective, or 1S40- 50, partially protective; and that the increase in the other decade of low duties, 1830 to 1840, was also very large. But the contrast between these periods of rapid prog ress and the present period of protection is very striking. In cur rency, the increase in value since 1860 has been about 32 per cent., but in gold the increase has been only 2 per cent, in nine years. Nor will the result be materially changed if, instead of the large crop and low price of 1869, we insert the higher price and smaller crop of 1868, for the increase of value would then be only thirty millions in gold, or about 11 per cent, in eight years, against 107 per cent, in the last decade. The advocate of protection does not wish to see wheat exported, or sent to any market for export ; let us therefore ascertain what its price has been in the principal markets for home consumption. Let us take the price of flour in that market where it is bought and sold not for export but for consumption ; that market by which the largest number of persons employed in manufacturing is supplied. We shall thus test the truth of the theory that high duties, by building up a home market for the farmer, have increased the value of his products. The city of Philadelphia is the centre of the largest manu facturing region in the country, where almost all branches of manu facture flourish. From that city go the supplies of flour to miners 100 DOES PROTECTION PROTECT? and iron-workers by the thousand, and to a vast body of workers in other branches of manufacture, while in the city itself almost every branch is represented. At the same time, Philadelphia exports so little flour, as compared with other large cities, that we may suppose that there, if anywhere, the price will be governed rather by the " home market " of which so much is said than by export demand. Fortunately, an accurate record of the price of extra fall wheat flour, for every month since 1790, has been preserved by the Philadelphia Board of Trade. Diagram No. V. presents to the eye, at a glance, the changes of price from 1800 to 1867, the average each year, and for different periods. The record of the Board of Trade is given in currency, but for the diagram the currency prices are reduced to gold at the average rates for each month. It will at once be seen that the imaginary " home market " has not secured to the farmer high prices for flour in times of high tariffs, even in this market, the centre of supply for a vast manufacturing region. On the contrary, the ugly fact is very plainly presented, that high tariffs have given low prices to the farmer for his wheat, and that low tariffs have given high prices. The period from 1800 to 1815 was one of low duties and of high prices for flour higher than have ever ruled since. But it must be remembered that the War of 1812, and the great inflation and depre ciation of currency which followed, account in part for the high prices, as the collapse of the currency and the prostration which fol lowed account in part for the extreme low price of 1821. Neverthe less, the first great fall in the price is coincident with the adoption of the iron protective tariff in 1818. From that time the price de clined, and, though it recovered a little after the panic had passed, the tariff of 1824 gave an average price of $5.09 a barrel, and the tariff of 1828, with two short crops, gave an average of only $5.63, while from 1820 to 1824 it was $5.91. We have here the first test : eight years of extreme protection did not lift the price of flour in this manufacturing centre, but simply reduced it, as compared with the average price of previous years. The increase of price in the years 1835, 1836, and 1837, was partly due to the inflation of cur rency. In the years of contraction and hard times, 1839, 1840, 1841, and 1842, the average price was about $5.45. After the passage of the high tariff in August, 1842, it fell from $5.45 to $4.12, and early in 1843 to $3.75. During the four years of that tariff, the average price was very low, not more than $4.46. It has never been as low during any period of years in our whole history, except during the >Sfo*~ - Library. u .*. O o> 3*; " Si tl P. ||1 ili! AGRICULTURE. 101 high tariff now in force. The diagram shows, at a glance^ this -con trast, and the fact that under the high protective tarziF tliS average price of flour was lower, during the whole period, than it wjas <r/en in the hard times and extreme prostration which followed tha pkiiio of 1837. As soon as the tariff was removed, we find that the price rose in the next year to $8.25, but part of this increase was due to the famine in Europe, and the peculiar demand. Nevertheless, it never fell again, until protection was revived, as low as it had been in 1846, and the average for the first period of low duties, 1847- 50, inclusive, was $5.37. Even the panic of 1857 did not cause the price to fall as low as the average for the whole protective period ending in 1846. But the passage of the protective tariff of 1861 was in stantly followed by a fall, and the price under the successive addi tional tariffs since imposed is most conclusive proof that high tariffs do not help the farmer to higher prices for his produce, even in the very heart of the manufacturing region. The diagram, with its frequent fluctuations, speaks to the eye, but a brief statement of the figures for certain periods may serve to aid the comparison. The first non-protective period ended in the years of hard times, in which, if ever, we should expect prices of flour in a great manufacturing centre to be depressed. Yet, taking the lowest price each month, the averages for the first and last half of each year, for each year, and for the whole period, are as follows : Year. $6.16 5.04 5.40 5.20 Average for the four years, $5.45. This, then, is the measure of the effect of extreme hard times, when occurring under a non-protective system. Compare these four years, the worst under that tariff, or under any system of low duties, with the record of the protective tariff which followed : Year. $4.35 4.31 4.64 4.55 Average for the four years, $4.46. As compared with the extreme hard times which preceded, then, the tariff of 1842- 46 cost the farmer just one dollar a barrel in re- 8 1839 First Half. $7.46 Last Half. $5.48 1840 5.08 6.00 1841 4.65 6.15 1842.. 5.74 4.66 1843 First Half. $4 16 Last Half. $4.53 1844 ... 4.53 4.08 .1845 4 44 4.84 1846.. 4.68 4.42 102 DOES PROTECTION PROTECT? duccd price of his product ! And this is the effect, in the greatest manufacturing centre in the country, of that system which is to *? build Up a home market ! " Let us 1 compare two other periods. We throw aside the earlier years of the tariff of 1846, because the price was then affected, on the one hand, by the European famine, and on the other by the de pressed condition of business in 1851, and take the eight closing years of that tariff to compare with the six years of protection which followed. It must be remembered that this period includes the panic of 1857, which seriously reduced the price for six months. The average of monthly prices is as follows : First Half. Last Half. Tear. 1854 $8.44 $8.47 $8.45 ]855 9.78 8.68 9.23 1856 6.87 6.56 6.71 1857 6.57 5.78 .17 1858 4.47 5.15 4.81 1859 6.40 5.28 5.84 1860 5.48 5.35 5.41 1861 5.29 6.05 5.17 Average for eight years, $6.47. We include 1861, though it reduces the average, because the effects of the tariff were not felt in its earlier months. Observe how quickly the price recovered from the depression in the winter of 1857- 58, and observe also that the average is just two dollars a barrel more than the producer received under the tariff of 1842- 46. The quotations since the adoption of the protective system in 1861 have been reduced to gold, at the rates current each month, and are as follows : First Half. Last Half. Tear. 1862 $4.89 $4.52 $4.70 1863 4.01 3.86 3.93 1864 3.91 4.20 4.05 1865 4.42 5.23 4.81 Average for four years, $4.37. 1866 $5.30 $5.72 $5.51 1867 7.89 5.43 6.66 Average for six years, $4.94. The published table closes with the year 1867, but it is well known that the price during the year 1869 has been so low that, were the monthly quotations given, the average for the whole eight years would be even lower than the average for the six years given. AGRICULTURE. 103 It appears that, during four years of protection, the average price, at Philadelphia, was lower than it had ever been during any preceding period. Moreover, during this period of six years, as compared with the non-protective period preceding, the loss to the farmer on each barrel of flour was $1.53. The four periods compare thus : Average price of flour during Four years, from 1839 to 1842 ("free trade") $5.45. " 1843 " 1846 ("protection") 4.46. Eight " " 1854 " 1861 ("free trade") 6.47. Six " " 1862 " 1867 ("protection") 4.94. Average price for twelve years, under "free trade," $6.13. Average price for ten years, under "protection," $4.75. The system of high duties, therefore, costs the agricultural inter est an average yearly of one dollar and thirty-eight cents on every barrel of flour produced, which means, of course, an average of nearly thirty cents a bushel on every bushel of wheat grown. Yet these are the prices in the greatest manufacturing region in the country, and, if " the home market " is not a myth, there we should see its effects most conspicuously displayed ! If we call the crop of wheat two hundred and fifty millions of bushels, protection costs us this year seventy-five millions of dollars in the value of that product alone. And this is only one of the many products of the farmer, though its price is by all accepted as the best test of the general prosperity of the agricultural interest. If agriculture has ever been overcrowded to that degree that its products have exceeded the ability of this country to consume, or of other countries to buy them at remunerative rates, that event has happened under the heaviest protective duties ever imposed in this country. In periods of low duties, the production by agriculture in creased nearly or over 70 per cent, in a decade ; and yet our ability to consume at fair prices was so much more rapidly increased that the price rose, and the production of wealth was swelled 76 and 107 per cent. But in this latest and most faithful trial of the protective system an increase in quantity of products of not more than 40 per cent, has been met by such an inability to consume at fair rates that the prices fall, and the increase in the production of wealth shrinks to a smaller proportion than ever before since the War of 1212 and the protective system first interfered with a prosperous foreign com merce. Startling and conclusive as these facts are, they by no means represent the full injury done to the agricultural interest by high 104 DOES PROTECTION PROTECT? tariffs. We have thus far considered only the price in the principal markets for export or consumption, because by these, it is well known, prices in all parts of the country are governed. But to every farmer another consideration is of vital importance the cost of transporta tion to those markets. If transportation for wheat from Columbus to New York costs 18 cents, and wheat is selling in New York at 81.28, it is certain that it cannot bring more than $1.10 at Columbus, and the actual price is still further reduced by charges of shippers and middle-men. Thus to every farmer a saving of ten cents a bushel in the cost of transporting his grain to the principal markets results in an increase of nearly ten cents in the price which he receives. It is, therefore, of vital importance to the farmer that facilities for transpor tation shall increase with rapidity. Increase there must be in any case, in a country as new and rap idly growing as this. Not a year has passed, however complete the prostration of industry, in which no improvements have extended fa cilities for transporting our products to market. But that increase has been greater in some periods than in others, and in a very re markable degree it has been greater in times of low than in times of high duties. In the earliest times of which we have record, the interior ton nage was not distinguished from the foreign, but from 1815 we can trace the progress of ship-building on Western lakes and rivers. In 1815, 1816, and 1817, the average was about one thousand tons yearly ; in 1817 there were built vessels measuring 1,250 tons. Then the tariffs of 1616 and 1818 were felt, and in 1818, 1819, 1820, 1821, and 1822, the lake tonnage was increased only 189, 267, 88, 249, and 105 tons respectively, the aggregate for five years being less than the tonnage built in the single year 1817. In 1823, for the first time, we have record of steamers built for the Western rivers, 663 tons, making the aggregate for lakes and rivers in that year, 1,066. It then increased rapidly, reaching 5,000 in 1827, falling to 3,027 in 1828, rising to 6,044 in 1829, and falling to 5,222 in 1831. The average for these eight years of protective duty, 1824 to 1831, inclusive, was about 4,300 tons yearly. The tariff bill passed July, 1832, greatly reducing duties, though it did not immediately take effect, appears to have stimulated ship-building enormously, internal as well as foreign, for in that year the foreign tonnage built was over 100,000, more than twice as great as that of the year before, while the lake and river tonnage built amounted to 14,475, more than double that of any previous year. Nor did it recede in any AGRICULTURE. 105 year afterward as low as the highest point reached under protec tion. The average under the seven years of compromise duties, 1833- 39, inclusive, in spite of a decrease of nearly one-half after the panic of 1837, was 14,456 tons. In the hard times of 1840 it fell to 8,693, but recovered to 15,318 the next year, and to 20,782 in 1842, so that the average for the whole period was 14,598, an increase of more than 200 per cent, on the average of the eight years of protec tion. The rapid increase noticed in 1841 and 1842 continuing, the ton nage built rose to 38,872 in 1846, the average for the four years of protection being 31,708, a gain of 100 per cent, on the average of ten preceding years, and of 50 per cent, on the last year of low duties. But in 1847, the first year after the removal of the protec tive system, the tonnage built for the rivers and lakes jumpe d to 58,240, an increase of more than 50 per cent, in a single year. And by 1856, before it was reduced by the panic, it rose to 100,713, a gain of 200 per cent, on the average of the protective period. The panic of 1857 reduced the Western tonnage built to 23,308 in 1859, but it recovered to 43,056 in 1860, and to 53,427 in 1861. Again, if we observe the number of steamers built, we find that in 1823 there were 15, and in 1824 there were $6 ; that the yearly average for the four years under the tariff of 1829 was 38, and the yearly average under the tariff of 1829- 32 was 53| in cluding the year 1832, in which alone there were 100 built. The reduction of duty was then certain, and the average without that year was only 38 just the same as that of the preceding tariff. But under the reduced duties the average for the four years 1833- 36 was 72 a year, and for the next four years, 1837- 40, it was 103 a year, in spite of the panic. For the last two years of this tariff, 1841 and 1842, the average was 107^. Here is an increase of about 150 per cent., as compared with the average of eight years under pro tection. Again, from 1842- 46, inclusive, the average was 157, a gain of less than 50 per cent. But the four years which followed under low duties, 1847- 50, show an average of 185 yearly, and the period 1851- 54 shows an average of 261 yearly. After the panic the number so decreased that the average for 1859 and 1860 is only 233. Let us next consider the progress in railroad-building. The in fluence of railroads in increasing the value of farming products and of farming land has been most wonderful, and every farmer will un derstand that, if the building of railroads has been materially checked 106 DOES PROTECTION PROTECT? or retarded by any tariff system, that system has cursed the farmer and retarded the whole agricultural interest of the country. In the years 1829- 32, under protection, we built 229 miles of road, an average of 76 miles yearly. A table at the close of this chapter gives the number of miles of railroad built each year, and the same record is presented in Diagram, " Iron, Coal and Railroads" (p. 206). In the years 1833- 36, under reduced duties, we built 1,044 miles, an average of 261 miles yearly; in 1837- 40, with duties still lower, we built 1,545 miles, an average of 386 miles yearly ; and in the two years, 1841 and 1842, duties being at the lowest point, though busi ness was depressed, we built 1,208 miles, or 604 yearly ! But it will be said that this increase was natural, the country being new and greatly in need of railroad facilities. True ; but observe how suddenly the tariff of 1843 cuts down this progress, from 717 miles built in 1841, to 159 miles in 1843 ! The whole number of miles built under that tariff was only 904, an average of 226 miles yearly less than had been built ten years before under lower duties ! Ob serve, again, how the progress is resumed instantly when the load of duties is removed ! In 1847 the number of miles built was 669, more than double the number built in 1846, and in 1849 it had doubled again. The whole number of miles built in the four years after the removal of the tariff was 4,091 more than four times as many as were built in the four years of protection just preceding ! The average for 1847- 50 was 1,023 miles yearly, and for the next period, 1851- 54, it was 1,925 yearly, 7,699 miles being built ; and for the next period, 1855- 5S, it was 2,562 miles yearly, 10,248 miles being built. The panic reduced the yearly average to 1,833 for the years 1859 and 1860, but the tariff of 1861 reduced it still more. Though government needed and built roads for military purposes, and gave enormous subsidies to others, the whole number of miles built during the years 1861- 64 was 3,273, an average of 818 yearly. But these were years of war. Take, then, the latest years of peace, 1865- 68, inclusive, during which the average was 2,087 less than the average of the period 1855- 58, ten years before ! Nor is this a fair comparison ; for within the last four years more than 3,000 miles of road have been built by government land grants and subsidies, involving a debt of over fifty millions of dollars. Yet the whole number of miles built was only 8,347, and a portion of these were built by government aid. Deducting these, the yearly average for these four years under protection is less than the average twenty years ago, during the first period after the tariff of 1842 expired ! AGRICULTURE. 107 In short, there have been built in fifteen years of protection, without government subsidies, 9,750 miles, an average of 650 miles yearly. But in twenty-four years of revenue tariff we have built 29,502 miles, an average of 1,229 miles yearly. Does " protection " protect the agricultural interest ? The most accurate measure of the benefit conferred by railroad-s upon the farmers is the increase in the value of farm lands. A farm is worth that sum upon which its net products, with allowance for value of labor, will pay a fair interest; and an improvement which reduces the cost of transporting these products to a market, thus adding to the price which the farmer can obtain for them, directly increases the yearly value of the farm. Statistics of hundreds of counties, in different parts of the country, prove that the opening of a railroad into a county, not previously blessed with such means of transportation, has ordinarily increased the average value of lands in the county nearly 100 per cent, within a few years. Under the tariff of 1842 only 904 miles of railroad were built in four years ; and, if we suppose that the value of farming land for fifteen miles on each side was doubled, 27,120 square miles of land were thus raised in value. But the average number of miles built every year after that tariff was repealed was greater than the whole number built during four years of its operation, and in the four years, 1855- 58, under low duties, we built 2,562 miles yearly, and thus doubled the value each year of 76,860 square miles of land, a territory one-fourth larger than the old State of Virginia. During the decade 1850- 60, under low duties, there were built 21,613 miles of road ; and, had these nowhere conflicted with each other, about 650,000 square miles of land would have been raised in value a territory more than one-fifth as large as the entire domain of the United States. These figures serve only to give some idea of the importance of railroad-building to the agri cultural interest, and it may easily be inferred that a protective sys tem which makes the rails alone for every mile of railroad cost 88,000, when far better rails could be procured, did no tariff hinder, at a cost of $5,000, and enhances the cost of other materials in like proportion, must greatly retard the progress of railroads, and conse quently the progress of agriculture. Men who have five millions of money at command can iron one thousand miles of road if no tariff interferes ; but a protective tariff reduces them to 625 miles, or com pels them to defer the undertaking altogether. The examination of the effect of the protective system upon agri culture has been somewhat lengthy, but it is repaid by the extreme 108 DOES PROTECTION PROTECT? importance of the facts established. It is proved, beyond question, that the system of protective duties does very materially retard the production of wealth by agriculture. It reduces the export price of products. It reduces the prices of agricultural products in the great manufacturing centres. It reduces the value of farming land in the chief manufacturing States. It has rendered the country unable to consume crops scarcely larger than those of 1860, at prices lower in gold. It has produced similar results, as to the general progress of that branch of industry, in every period in which it has been tried since 1790, so that the increase in non-protective periods has been fully twice as great as the increase in protective periods. It has checked the growth of facilities for transportation, thus depriving the farmer of a part of even that low price which his products could in protec tive times have brought in markets for export or consumption. Within the last decade, the increase in the production of wealth by agriculture was fully 100 per cent., but during eight years, under protective duties, the increase has been, measured by the quantity of wheat, about 40 per cent. ; measured by the value of wheat pro duced, 2- per cent. ; measured by the value of all the principal crops, nothing ; measured by the value of Northern crops, 4J- per cent. ; measured by the value of live-stock, nothing ; measured by the value of farm lands, less than nothing. But by agriculture three-fourths of all our wealth has been pro duced. If the production of wealth by that industry has been re- -tarded by at least one-half of its natural growth during every protec tive period, and if under the present tariff the progress has been yet more seriously retarded if not arrested altogether what has the country lost ? The annual product in 1860 was about twenty-six hundred millions. If the progress of the last decade had been main tained, the yearly product would now be five thousand millions. If there has been no progress, we have lost in yearly product by agri culture alone a sum as large as the whole national debt. If the progress of agriculture generally has been retarded no more than the crop of wheat, we have lost in the product of this year only a sum half as large as that debt. And if, in the year 1870, it shall appear that the production of wealth by agriculture has increased 40 per cent. a rate more rapid than that of any other protective period in our history we shall then have lost, upon the product of a single year, not less than $1,500,000,000, a sum nearly twice as great as the entire production of wealth by all other forms of industry in the year 1860. To compensate for that loss, the AGRICULTURE. 109 production of wealth by manufactures and mining must have in creased threefold. The following tabbs show, first, the number of miles of railway built, and the number in operation each year since 1830 ; second, the price of flour each month, according to the report of the Philadelphia Corn Exchange ; third, the averages for different periods of the lowest quotations each month, those since 1861 being reduced to gold values ; fourth, the number of ships, barks, brigs, schooners, sloops, and steamers built, and the total tonnage each year from 1815 to 1862, inclusive. The Philadelphia quotations are for extra -fall wheat flour, and the published report ends with 1867. In the next table the averages of the lowest quotations are given, for the first hah of each year, for the last half, for the year, for periods of several years, and under each taruT. For the years 1868 and 1869 newspaper quotations of January 1st, and July 1st, reduced. to gold, are averaged for the first half, and quo tations for July 1st and January 1st, for the last hah of each year. RAILROADS. Statement of the Number of Miles of Railroad Built each Year. (From Poor s Hail- way Manual.) YEAR. Built. Total in Oper n. YEAR. Built. Total in Oper n. laso . 23 23 1850 1,654 9,021 1831 72 95 1851 . . 1 961 10982 1832 134 229 1R52 1,926 12,908 1833. . 151 380 1853 2,452 15,360 1834 253 633 1854..., 1 360 16 720 1835 465 1 098 1855 1654 18 374 1836 175 1,273 1856 3 643 22,017 1837 224 1,497 1857 2491 24508 1838 416 1,913 1858 2,460 26,968 1839 389 2 302 1859 1 821 28 789 1840 516 2,818 1860 1,846 30,635 1841 717 3 535 1861 621 31 256 1842 491 4,026 1862 864 32.120 1843 159 4.185 1863 1.050 33,170 1844 192 4 377 1864 738 33,908 1845 256 4 633 1865 1 177 35 085 1846 297 4,930 1866 1,742 36,\827 1847 669 5599 1867 2449 39276 1848 397 5 996 1868 2979 42 255 1849 1,369 7,365 The number of miles built in 1869, after Poor s work was issued, waa very large it is said nearly six thousand miles. But a large part of this was built by gov ernment aid, and at heavy expense to the people, either in subsidies or land grants. But for the Pacific roads, and those constructed to give access to or connection with them, the contrast in railroad building between the present period and that of low duties which preceded would be very striking. 110 DOES PROTECTION PROTECT? Highest and Lowest Price for Flour in Each Month for Eighty-one Years From 1786 to 1867. YEARS. January. February. March. April. May. June. 1786.. 42s. Od. 41s. 6d. 40s. 6d 40s. Od. 43s. Od. 1787.. 1788 40s. Od. 40s. Od. 40s. Od. 35s. Od 40s. Od. 36s. Od. 40s. Od. 37s Od 42s. 6d. 37s. Od. 1789 !! 1790 35s. Od. 44s. 6d. 34s. Od. 35s. Od. 35s. Od. 40s! Od . 42s. 6d. 1791.. 45s. Od. 45s. Od. 40s. Od. 38s. Od. 40s. Od. 40s. Od. 1792.. 37s. 6d. 37s. 6d. 37s. 6d. 37s. 6d. 87e. Od. 37s. 6d. 1793.. 45s. Od. 45s. Od. 45s. Od. 1794.. 56s. Od. 48s. 2d. 50s. Od. 50s. Od. 1795 75s Od. 82s. 6d. 80s. 3d. 1796.. $12 "66" $13 50 $15 00 $14 00 $14 00 $12 50 1797.. 10 00 10 00 10 00 9 25 9 00 8 50 9 00 8 50 1798.. 8 50 8 50 8 50 8 50 7 50 7 00 6 75 1799.. 9 50 9 50 9 25 9 25 9 50 9 50 1800.. 9 50 9 75 10 00 1801 . . li so li 25 li 50 9 50 11 00 11 50 11 50 1802.. 7 00 7 00 7 00 7 00 7 00 7 00 1803.. 6 50 6 50 6 50 6 00 6 00 6 00 6 50 1804.. 7 50 7 50 7 00 6 00 6 50 6 50 7 75 1805.. 11 00 12 00@13 00 17 00 11 75 11 00 1806.. 7 50 7 66 7 00 6 75 6 50 7 00 7 00 8 00 8 00 1807.. 7 50 7 50 725 7 25 7 25 7 25 7 00 1808.. 6 00 5 T5 5 75 5 18} 5 00 5 00 1809.. 5 50 7 00 7 00 6 25 7 00 6 50 7 00 1810.. 7 75 8 00 8 25 8 25 9 00 9 00 1811.. 11 00 10 50 10 50 10 50 10 25 10 12 1812.. 10 12 9 75 9 25 9 00 7 00 7 25 8 50 8 50 1813. . 12 66 10 50 9 50 9 7510 00 8 50 7 25 8 00 8 50 1814.. 7 50 7 00 6 75 1815.. s 66 8 66 , 7 75 7 75 850 8 50 9 00 1816.. 9 00 9 00 8 00 7 75 7 87 8 75@10 50 1817.. 13 50 13 75 14 0014 75 14 0014 25 14 50@14 00 11 5011 00 1818.. 9 2510 00 10 50@10 75 10 50 10 00 10 00 10 25 1819.. 9 00 875 8 00 7 25 6 37 6 00 1820. . 6 005 37! 5 50@5 12! 5 00 4 75 4 75 4 37 4 87 4 50 4 75 1821.. 4 00 4 00 3 62 3 75 4 00 4 00 4 09 1822.. 6 25 6 25 6 25 6 50 7 12 6 75 7 00 1823.. 6 50 7 00 6 50 7 00 7 00 7 25 7 37 750 1824. . 6 00 6 00 6 00 6 50 612 6 00 6 00 5 75 1825.. 4 87! 5 12 5 12 5 00 6 00 5 50 5 00 1826.. 4 75 4 62 4 50 4 25 4 25 4 25 4 75 1827.. 5 25 6 00 6 00 5 75 5 75 5 12 5 12 5 00 5 00 5 00 1828.. 5 00, 4 75 4 87i 4 75 4 75 475 4 75 4 50 1829.. 8 25 8 25 8 00 8 00 7 50 7 50 6 75 6 60 6 75 6 75 6 25 1830.. 4 62i 4 50 4 50 4 50 4 50 5 00 475 4 75 4 50 1831.. 6 25 6 00 6 00 6 25 7 00 6 37 7 00 6 50 5 50 5 75 5 25 1832.. 5 50 5 50 5 25 5 00 5 25 5 50 5 50 5 75 6 25 1833.. 5 75 5 00 5 19 5 25 5 25 5 50 5 50 5 75 1834.. 5 25 4 87 4 62 4 75 5 25 5 25 5 50 5 50 1835.. 4 93} 5 09 5 00 5 18} 6 00 6 25 1836.. 6 62i 6 75 7 00 6 81} 6 50 6 81} 1837.. 1838.. 11 0011 25 8 12|8 62i 10 5011 00 7 508 06} 10 50@10 75 7 50 8 00 9 31} 7 50 8 00 9 00 7 71 7 90 9 00 9 37 7 50 7 75 1839.. 8 25850 850 7 50 8 62 7 37 7 50 7 00 7 50 6 12 6 32 1840.. 5 75 5 50 5 00 4 87 4 62 4 75 1841.. 4 65@5 25 4 505 06} 4 50 4 93 4 62 5 00 4 65 5 00 5 00 1842.. 6 06} 5 906 12 5 60 5 81 5 62 5 80 5 75 5 50 5 62 1843.. 3 98 3 753 92 3 79 3 91 4 22 4 25 4 40 5 00 5 12 1844.. 4 50 480 4 75 4 68 4 37 4 57 4 10 4 30 1845.. 4 15 4 31} 4 31} 5 38 445 4 25 4 40 1846.. 5 31} 4 90 483 4 81 4 31 3 91 1847.. 1848.. 4 83* 6 06} 6 17 5 87! 5 93} 6 06} 6 87 5 93} 7 90 5 87 8 25 8 40 5 44 1849.. 5 21 5 00 4 75 5 13 4 50 4 68 4 55 1850.. 5 00 4 78 479 5 00 6 18 5 27 1851.. 4 66 4 25@456} 4 12 4 50 426 4 25 1852.. 4 25 5 55 4 18} 4 06} 4 20 4 20 1853.. 5 37i 5 20 4 93* 4 90 4 18 4 62 1854.. 7 59 8 12 7 45 8 08 8 69 8 72, 8 90 1855.. 9 18} 8 94 9 06} 10 25 10 75 10 52 1856.. 8 33 7 31 7 00 6 57| 6 06} 5 94 1857.. 6-32 6 37! 6 12| 6 00 7 19 7 45 1858.. 4 73 446 4 46 440} 4 44 4 31} 1859.. 5 75 5 81 6 73 6 25 7 25 6 62 I860.. 5 44 5 00 5 00 6 00 5 94 5 50 1861.. 5 31 5 12 5 12 5 37 5 56 5 25 1862.. 5 31} 5 31} 5 00 5 12! 4 87} 4 75 1863. . 6 25 6 25 6 12 6 12 5 87 5 75 1864.. 6 25 6 25 6 00 7 00 7 25 7 50 1865.. 9 75 9 75 8 25 7 50 6 25 6 25 1866.. 7 25 6 50 6 75 7 25 8 00 8 50 1867.. 11 25@13 50 10 25@11 25 10 00@11 00 12 0014 00 11 00@12 50 10 0015 25 AGRICULTURE. Ill Highest and Lowest Price for Flonr in Each Month for Eighty-one Years From 1786 to 18C7 (Continued). YKAKS. July. August. September. October. November. December. 1786.. 43s. Od. 43s. Od. 42s. 6d. 42s. 6d. 42s. Od. 40s. Od. 1787.. 42s. 6d. 36s. 6d. 33s. Od. 33s. Od. 1788.. 358. Od. 35s. Od. 35s. Od. 34s. 6d. 84s . Od. 35s. Od. 1789.. 38s. 8d. 41s. Od. 42a. Od. 42s. 6d. 40s. Od. 42s. 6d. 1790.. 53s. 6d. 45s. Od. 43s. 3d. 46s. Od. 46s. Od. 1791.. 40s. Od. 35s. Od. 36s. Od. 368. Od. 37s. 6d. 37s. 6d. 1792.. 37s. 6d. 37s. 6d. 39s. Od. 389. 6d. 38s. 6d. 38s. 6d. 1793.. 48s. 6d. 47s. 6d. 47s. 6d. 47s. 6d. 47s. 6d. 1794.. 54s. Od. 53s. Od. 52s. 6d. 56s. Od. 59s. Od. 69s. Od. 1795.. 1796.. 86s. 3d. $11 75 90s. Od. $11 00 909. 6d. $1200 $13 00 12 00 $13 00 12 00@11 50 $13 75 11 50@10 50 1797.. 8 50 8 50 8 50 8 50 8 50 8 50 1798.. 6 75 8 00 8 50 8 50 8 50 8 50 9 50 9 50@10 00 1799.. 10 00 9 50 9 50 9 50 9 50@10 00 10 50@11 00 10 00 1800.. 10 25 10 75 10 50<|> 9 75 9 50 10 50 11 00 1801.. 11 50@11 00 11 00 10 00 9 50 9 25 9 00 8 00 6 50 1802.. 725 7 25 7 00 6 50 6 50 6 50 6 50 1803.. 7 00 7 00 7 75 7 75 7 50 7 50 7 50 7 50 1804.. 7 75 8 00 9 75@10 00 9 00 10 00@10 50 11 00 1805.. 10 75 9 00 9 00 8 00 8 00 8 00 8 00 8 50 8 25 1806.. 8 00 7 50 6 75 7 00 6 75 7 00 7 50 7 50 1807.. 6 75 6 75 7 12 7 50 7 25 6 75 7 00 6 75 1808.. 5 00 5 75 5 25 5 00 6 00 6 00 6 00 5 56 5 50 6 00 1809.. 6 12 7 00 6 75 6 75 7 25 7 25 7 50 8 00 7 50 1810.. 10 oo^ii oo 11 00(^12 00 11 00@10 75 10 75@11 50 10 25 11 25 1811.. 1812. . 10 0011 00 8 50 10 7510 00 8 25 9 00 9 00 9 0010 00 8 50 10 25@10 00 9 50 11 50@10 50 10 00 10 25 1813.. 7 50 7 00 8 00 8 25 8 75 9 25 8 25 8 50@10 00 10 00 7 50 1814.. 7 00 7 25 7 25 8 50 850 8 75 8 75 8 00 1815.. 9 25 8 75 8 62 8 75 9 00 9 50 9 25 1816.. 11 00 10 75 9 50 9 75 10 00@11 00 11 50@12 50 12 5013 50 1817.. 10 5011 50 11 50@10 00 9 50 9 00 9 50@10 00 9 75 9 00 1818.. 10 25 10 50@10 75 9 75 9 75 9 25 9 00 1819.. 6 00 6 00 6 25 6 50 6 50 6 12 6 00 6 25 1820.. 4 50 4 75 4 50 4 50 4 25 4 25 4 50 1821 . . 4 00 4 50 4 62 5 00 5 25 5 50 5 50 7 50 7 00 6 00 6 00 6 50 1822.. 6 75 6 25 6 25 7 00 700 6 62 6 50 6 50 1823.. 700 6 50 6 50 6 75 6 62 6 25 6 00 1824.. 5 25 5 25 5 12 5 50 5 12 5 50 5 00 4 75 5 00 1825.. 5 50 4 50 5 00 5 00 5 00 5 12 5 12 5 00 4 87 1826.. 4 37 4 50 4 50 4 50 5 00 5 00 4 25 5 50 5 25 1827.. 5 00 5 00 5 00 5 25 5 25 5 25 5 50 5 00 1828.. 4 50 4 75 5 00 5 50 5 50 7 00 6 25 7 00 7 25 9 00 7 75 8 25 1829.. 6 00 5 00 5 00 5 50 5 50 5 75 5 25 5 00 5 00 5 25 5 25 4 62 1830.. 4 50 5 25 5 25 5 75 5 50 5 25 5 25 5 00 5 00 5 00 5 62 1831.. 5 37 4 75 4 75 5 25 5 50 5 50 5 50 5 25 5 25 1832.. 6 00 6 37 6 25 6 37 5 50 5 50 6 00 5 25 6 12 5 75 5 50 lass.. 6 00 6 50 6 12 600 600 5 87 5 75 5 75 5 50 5 25 1834.. 5 25 5 50 5 50 5 50 5 25 5 25 5 25 5J2 5 00 4 80 1835.. 6 81 6 061 6 12 6 061 6 37 6 75 1S36.. 7 00 8 37 9 37 9 31 10 62 11 00 1837.. 9 50 9 95 9 00 8 53 8 00 8 50 8 25 9 00 9 31 9 81 9 50 9 75 1838.. 6 43 6 12 6 12 7 12 6 90 8 45 8 25 8 40 8 00 8 12 8 31 8 50 1839. 5 59, 5 12 5 75 6 12 5 87 6 12 5 87 6 00 625 5 56 5 90 1840.. 5 25 5 00 5 00 5 00 5 00 4 75 5 25 1841.. 5 25 5 50 606 6 34 6 62 6 87 6 12 6 30 6 47 6 96 6 42 1842.. 5 50 5 37 5 25 5 45 4 561 4 19 4 12 4 37 4 S7@ 4 62 1843. . 1844. 5 25 5 37 4 00 4 37 4 75 5 06 3 91 4 19 1 4J. 3 89 4 33 4 00 4 50 4 37 429 1845. 4 22 4 62 4 18* 4 60 4 061 5 91 6 661 1846. 3 84 3 83 3 82 4 12 5 18 5 10 4 76 1847. 5 91 6 03 5 50 6 45 6 31 6 49 1848. 5 25 5 22 5 67 5 42 5 25 5 14 1849. 4 561 4 87 5 12 5 02 5 10 5 061 4 87 1850. 5 061 5 12 5 37 5 00 4 83 4 85 4 71 1851. 4 25 3 97 396 4 12 3 97 4 15 1852. 4 12 4 20 4 44 448 4 90 5 16 1853. 500 5 33 5 70 6 61 6 90 7 45 6 72 7 00 1854. 8 06 8 29 8 13 8 53 8 50 8 81 8 33 8 58 8 68 8 90 9 12 9 25 1855. 931 8 81 7 47 8 37 9 31 8 82 8 90 1856. 6 561 6 52* 6 49 6 50 6 62* 6 60 1857. 687i 6 50 5 62* 5 25 5 311 5 12* 1858. 437* 5 25 5 59 5 42 5 15 5 12* 1859. 587 5 12 5 00 5 12 5 25 5 311 1860. 5 31 5 56 5 69 5 75 4 94 4 87 1861. 4 75 4 42 5 12 544 5 27 5 31 1862. 4 87* 5 25 5 00 6 12* 6 12* 6 12* 1*63. 5 50 4 75 5 06 5 62 5 75 6 00 1864. 9 75 10 25 10 25 9 75 10 00 10 00 1865. 7 00 7 00 8 25 8 25 8 00 7 25 1866. 7 00 8 25 8 50 9 00 8 50 8 75 1867.. 8 75@10 00 8 00 8 75 7 25 9 50 8 25 8 75 7 00 8 50 .... 112 DOES PROTECTION PROTECT? PKICE OF FLOTJK. Average of the Lowest Quotations Each Month for Certain Periods. YEAE. First Half. Last. Year. Period. Tariff. Remarks. 1817 $13 54 $9 96 $11 75 Inflation. 1818 10 08 9 75 9 91 1819 7 89 6 19 7 04 Contraction. 1820 5 02 4 42 4 71 $8 35 u 1821 3 94 5 39 4 66 u 1822 6 56 6 60 6 58 1823 7 02 6 60 6 81 1824 6 02 5 16 5 59 5 91 $7 13 1825 5 27 5 08 5 17 1826 4 43 4 85 4 64 1827 5 35 5 08 5 21 1828 4 77 5 96 5 36 5 09 1829 7 56 5 33 6 45 1830 4 60 5 03 4 81 1831 6 19 5 27 5 73 1832 5 47 5 74 5 60 6 63 6 36 1833 5 37 5 87 5 62 1834 5 04 5 29 5 16 1835 .... 5 39 6 36 5 87 1836 6 75 9 28 8 01 6 16 Inflation. 1837.. 9 72 8 93 9 32 tt 1838 7 64 7 33 7 48 8 40 {< 1839 7 46 5 48 6 16 Contraction 1840 5 08 5 00 5 04 u 1841 5 65 6 15 5 40 u 1842 5 74 4 66 5 20 5 45 6 32 (( 1843 4 16 4 53 4 35 1844 4 53 4 08 4 31 1845 4 44 4 84 4 64 1846 4 68 4 42 4 55 4 46 4 46 1847 6 66 6 11 6 38 Irish Famine. 1848 5 87 5 32 5 59 1849 4 78 4 91 4 85 1850 6 17 4 93 5 05 6 37 1851 4 51 4 07 4 29 1852 4 56 4 55 4 55 1853 4 87- 6 04 5 45 1854.. 8 44 8 47 8 45 5 69 1855 9 78 8 68 9 23 1856.. 6 87 6 56 6 71 . i 1857 6 57 5 78 6 17 1858 4 47 5 15 4 81 6 70 Panic 1859 6 40 5 28 5 84 1860 5 48 5 35 5 41 5 62 5 86 1861 5 29 5 05 5 17 War. 1862 4 89 4 52 4 70 u 1863 4 01 3 86 3 93 u 1864 3 91 4 20 4 05 (( 1865 4 42 5 23 4 81 4 53 Short Crop 1866 5 30 5 72 5 51 (i 1867 7 89 5 43 6 66 1868 5 10 4 17 4 63 1869 3 44 3 42 3 43 5-05 4 79 AGRICULTURE. 113 SHIP-BUILDING. TheNumber and Class of Vessels built, and the Tonnage thereof, from 1815 to 1862. YEAB. CLASS OP VESSELS. Total No of Vessels built. Total Ton nage. Ships anc Barks. Brigs. Schooners Sloops and Canal B ts Steamers. 1815 136 224 681 274 1,315 Tons. 95ths. 154,624.39 1816 76 122 781 424 . 1,403 131,668.04 1817.... 34 86 559 394 1,073 86,393.37 1818 53 85 428 332 . . 898 82,421.20 1819 53 82 473 243 851 79,817.86 1820 21 60 301 152 . . 534 47,784.01 1821.... 43 89 247 127 . . 506 65,856.01 1822 64 131 260 168 . . 623 75,346.93 1823.... 55 127 260 165 15 622 75,007.57 1824 56 156 377 166 26 781 90,939.00 1825 56 197 538 168 35 994 114,997.25 1826 71 187 482 227 45 1,012 126,438.35 1827.... 55 153 464 241 38 951 104,342.67 1828 73 108 474 196 33 884 93,375.58 1829.... 44 68 485 145 43 785 77,098.65 1830 ... 25 56 403 116 37 637 58,094.24 1831.... 72 95 416 94 34 711 85,962.68 1832 132 143 568 122 100 1,065 144,539.16 1833.... 144 169 625 185 65 1,188 161,626,36 1834 98 94 497 180 68 937 118,330.37 1835 25 50 301 100 30 506 46,238.52 1836 93 65 444 164 124 890 113,627.49 1837.... 67 72 507 168 135 949 122,987.22 1838 66 79 501 153 90 889 113,135.44 1839 83 89 439 122 125 858 120,989.34 1840 97 109 378 224 64 872 118,309.23 1841 114 101 310 157 78 760 118,893.71 1842 116 91 273 404 137 1,02k 129,083.64 1843. . . . 58 34 138 173 79 452 43,617,77 1844 73 47 204 279 163 766 103,537.29 1845. . . . 124 87 322 342 163 ,038 146,018.02 1846 100 164 576 355 225 ,420 188,203.93 lfrL7. . . . 151 168 689 392 198 598 ^243,732.67 184877.. 254 174 701 647 175 1,851 318,075.54 1849 198 148 623 370 208 ,547 256,577.47 1850 247 117 647 290 159 ,360 272,218.54 1851 211 65 522 326 233 ,367 298,203.60 1852 255 79 584 267 269 1,444 351,493.41 1853 269 95 681 394 271 1,710 425,571.49 1854.... 334 112 661 386 281 1,774 535,616.01 1855 381 126 605 669 253 2,037 583,450.04 1856 306 103 594 479 221 1,703 469,393.73 1857 251 58 504 258 263 1,334 378,804.70 1858 222 46 431 400 226 1,225 242,286.69 1859.... 89 28 297 284 172 870 156,601.33 1860 110 36 372 289 264 1,071 212,892.45 1861.... 110 38 360 371 264 1,143 233,194.35 1862 ... 60 17 207 397 183 864 175,075.84 114 DOES PROTECTION PROTECT? CHAPTER IX. MECHANICS AND NATURAL MANUFACTURES. HAS the production of wealth by manufactures increased more largely under protective than under non-protective duties ? And, if so, has that increase been so great as to compensate for an ascer tained loss in a branch of industry to this country three times as im portant ? We approach questions which have not usually been considered, in discussions of the tariff, with that attention which their impor tance invites. Some have argued with force that this country ought to build up a diversified industry. Others, with equal force, have argued that the effort costs heavily. But the question, " Does pro tection protect ? " may not have received as much attention as it deserves. By many, at least, it has been taken for granted that the system of protective duties must at least stimulate manufactures. If protection does protect anybody, then it confers some benefit, even though it may injure others more. But if, with all its dis advantages to other interests, the protective system results in no healthy and permanent development of manufactures, greater than would be attained without it; if, with reference to that interest alone, protection is a failure and a mistake ; if the supposed protec tion has proved unreal, and the supposed stimulus only a hinderance, then all the arguments in favor of a diversified industry become arguments for a non-protective policy. What production of wealth actually results from manufacturing industry, and to what extent is that industry supposed to be within reach of protection? The census report of 1860, volume "Manu factures," includes the statistics of mining and fisheries. The mining of iron, coal, and other metals than gold and silver, may the more properly be classed with manufactures, as the mining and the manu facture are frequently combined. But the mining of gold and silver is not supposed to be protected. Fisheries are included, no doubt, only because they are too unimportant for a separate schedule. De ducting the products and materials reported for these industries from the aggregates given in the census return, we have as the product of manufactures, or mining other than of gold and silver, $1,822,234,031, while the raw material used cost $1,009,972,896, and the production of wealth, therefore, amounted to $812,261,135. MECHANICS AND NATURAL MANUFACTURES. 115 But there are also included as manufactures many branches of industry which may, perhaps, properly be termed mechanic arts. Masons, carpenters, and painters, if manufacturers at all, do not be long to that class whose relations to the tariff we are especially investigating. Some classification of the branches of industry in cluded by the census under the head of manufactures is necessary. Yet the vagueness of the entries in the census returns renders any rigorous classification impossible. Thus under the single head of " Lumber sawed " are entered over 19,000 establishments, employing over 71,000 hands, and yielding a product of over ninety-three millions yearly. Evidently, every variety of establishment, from the smallest and most primitive saw-mill to the largest works of our chief lumber- markets, is here included. Whatever may be thought of the wis dom of duties on timber and lumber, it will not by any one be seriously supposed that the existence of this industry depends upon duties, the less as we export largely of lumber and its manufactures. Under the heads of " Boots and shoes " are included 12,486 establish ments, and 123,026 hands, whose product was about ninety-two mill ions. Every village has its shoemaker, and in this entry are evi dently included all those who make boots and shoes to order, as well as the larger establishments more properly called manufacturing. Under the head " Clothing " are included over 4,000 establishments, employing over 120,000 persons, whose product was nearly ninety millions. The wholesale maker and the village tailor are indistin guishable here. But, while accurate classification is not possible, a few general principles may enable us to reach a fair approximation. A country mainly agricultural in its industry needs no duty to protect its flour-mills and provision-packers. The product of our flour-mills was $248,580,365, and the material cost $208,497,309. The product of provision-packing was $31,986,433, and the material cost $24,894,624. No one will apprehend that we may import our bakers bread, and the bakers produced $16,980,012, and their ma terial cost $10,634,199. Mill-wrights will also find employment as long as we raise our own wheat, and the ice dealer will scarcely need protection until there is an increased supply of pauper labor about the North Pole. Whatever may be thought of the duty upon lumber, it will by no one be seriously supposed that this country is in danger of de pending upon foreign forests for its main supply of wood. But in some parts of the country, at least, the duty does increase the cost of lumber, and in consequence a manufacture is retarded which is as 116 DOES PROTECTION PROTECT? necessary as any other to every country, which could be subjected to no serious competition if all duties were repealed, and which em ploys a large share of our industry the manufacture of wood. We cannot import the hundredth part of our lumber; and saw-mills must exist in which to cut our own forest-trees. The simple fact that they did exist, in number quite as great as ever before or since, during the time when lumber from Canada was admitted free of duty under the reciprocity treaty, must end all dispute as to the necessity of protecting this manufacture. But if the sawing of trees into lumber is beyond the reach of protection, the manufacture of lumber into houses, furniture, and household articles, is still more independent. We cannot import our own houses, or the repairs on them, our barns, or our fences. Except in a few of the most costly articles, this country is beyond the possibility of competition in the matter of furniture ; indeed, we have for many years sent to other countries large quantities of furniture for sale, and, with lumber in creased in cost, are still exporting not less than ten millions worth of wood and its manufactures. But the manufacture is incomparably more important than that small fraction of the lumber interest which can be benefited by duties on Canadian products. If those duties en hance the cost of lumber in the least degree, they benefit only a few owners of forests near the Canada border, while they injure a manu facture employing a quarter of a million of skilled mechanics, and yielding a product quite incalculable in value, since no census return attempts to ascertain the cost of houses or barns built, or the value of additions and repairs. Still less does any census give the value of fences, yet farmers on western prairies know to their sorrow how large a share of the expense of farming is caused by the cost of lumber. And the cost of all furniture made of Northern lumber is in like manner affected. Whatever makes a product more costly, other things being equal, diminishes consumption of that product and in jures the manufacture. But statistics prove beyond question that the duty on Canada lumber does affect the price in our largest and- most important markets. The price of lumber at Albany and at Chicago has largely increased since the expiration of the reciprocity treaty in the spring of 1866.* The owners of certain timber-lands have thus been benefited. But one of our most important manu- * Commissioner Wells, in the report published since this volume was mainly completed, gives tables showing that the increase at Chicago was from $14.80 per M. to $17.70 per M., and at Albany from $22,12 per M. to $29.83 per M. The general fact that there has been an increase, however, is undenied and undeniable. MECHANICS AND NATURAL MANUFACTURES. H7 factures has been retarded, and consumers in all parts of the country dependent upon those markets have been taxed, while the cost of furniture has necessarily been somewhat affected. This manufacture, since it cannot be aided by duties on foreign houses or barns, fences or furniture, and has been to some extent injured by increased cost of its material, must be classed with the non-protected industries. In the table of manufactures of 1860, it includes 139,000 persons ; raw materials, $74,100,000 ; products, $167,600,000. We are as likely to import foreign houses, as the bricks or the dressed stone of which they are built. Nor can masons, joiners, plasterers, carpenters, painters, plumbers, roofers, whitewashes, paper-hangers, upholsterers, or locksmiths, be protected in their in dustry, because no foreign competition is possible. Unless we can import foreign gas, the makers and gas-fitters must also be classed as unprotected. But each of these is to some extent retarded in his industry by duties on lime, lead, paints, lumber, tools, or paper, and the gas-manufacturers, especially in Eastern cities, having to pay heavy duties on foreign gas-coal, find the consumption of their prod uct in some degree restricted by its increased cost. To these, which may be classed as house-building employments, may be added the dressing of marble, not separable from stone-cutting in census returns, for we are not likely to import our tombstones engraved to order. These branches, in 1860, employed 59,188 persons, used material cost ing $15,300,000, and produced to the value of $56,200,000. Of necessity, the manufacture of clothing must be injured by a system which undeniably increases the cost of some of its materials. Without entering at present upon the question whether woollen, cotton, silk, or linen goods are generally rendered more costly by high duties, it is not denied that they are in many cases. But, when ever the materials are rendered more costly, the increased cost of clothing must to some extent affect its use, and limit the consump tion. It is perfectly true that this injury does not follow all duties, but certain that it does result from some ; perfectly true that it is not always apparent, since other circumstances, such as an inflated currency, may prompt people to consume more largely in spite of the cost, but the fact remains that even then they would have consumed still more largely, had the clothing cost less. Any increase in the cost of materials also increases the capital necessary to transact the same business, and thus reduces its profits, causing a smaller pro duction of wealth in proportion to . the capital and labor invested. A single fact proves that it is not even intended by the protective 9 118 DOES PROTECTION PROTECT? system to confer any benefit upon the tailor, and the manufacturer of clothing : the duty on clothing is only 54 per cent, if of wool, and 35 per cent, if of cotton, while the duty on woollen cloths ranges from 56 per cent., upward, and the duty on cotton cloths, of qualities inported, is from 40 per cent, upward. In fact, so much does the clothing manufacture depend upon taste, style, changes of the fash ion, and the form or habit of the wearer, that Congress has very correctly inferred that it could not be exposed to any serious compe tition, and, in spite of the duty on the uncut cloth larger than the duty on the finished article, we imported in 1868 less than $200,000 worth of woollen clothing of all kinds. Adding ladies dress-making, dying, and bleaching, the returns for 1860 include, under manufactures of clothing, 128,488 persons employed, $51,400,000 of materials, and $98,000,000 of product. The manufacture of leather needs no protection, because this country possesses materials superior to those of any European coun try, and has so perfected the manufacture, that in 1845 it was testi fied, by men in that business, that leather could be made here cheaper than in Europe. It may be considered certain that an agricultural country, amply supplied with the best materials for dressing leather, will not throw away its hides, or send them abroad to be dressed. But this important manufacture is also impeded by the duty on for eign hides and materials used. The hides produced in this country supply less than three-fourths of the consumption, and the hides from South America and elsewhere, thus required for our own use, are rendered more costly ; currying oil is increased in cost, and in some localities hemlock-bark is also made more expensive. The re sulting injury to the whole leather manufacture may be slight, but it affects an industry of vast importance, and the increased cost of leather in turn injures another manufacture of the very first rank the making of boots and shoes. In 1868, according to estimates by the trade, given by Commissioner Wells, there were made 51,500,000 pairs of boots and shoes for males, and 47,000,000 pairs for females, the aggregate value being about $228,250,000, and statistics are published by him, to show that the cost of these products is increased by more than fifteen million dollars by the duties on hides, bark, oils, lasting, serge, and rubber webbing, so that men s boots cost 842.38 a dozen, and would cost only $39.37 without the duties ; and cheap gaiters for women, sold before the war for 60 cents, now cost $1.05. The result is, that an export trade in boots and shoes, which has existed for many years under all changes of style, and which, MECHANICS AND NATURAL MANUFACTURES. 119 after the removal of the protection tariff of 1842, increased from $93,140, in 1847, to more than two millions in 1865, is now reduced to $475,053, the trade with South and Central America, Mexico, and the West Indies, being almost entirely lost. It need not be added that workmen in New England are suffering from lack of employ ment and low wages, and the organ of that industry states that they are now employed on an average only ten months in the year. Since leather and boots and shoes can be made here cheaper than anywhere else, and could therefore be profitably exported, while no duty can aid the workmen in this industry, duties which enhance the cost of its materials must inevitably injure it, rendering it less able to compete in foreign markets. Only a part of the shoemakers are included under manufacturers in the census tables of 1860, but, of persons so included in all branches of leather manufacture, there were 161,563 ; raw material, $99,000,000 ; product, $182,000,000. Enough has been said to show that ship-building has been seri ously injured by the system of protection. It employed 9,560 per sons, materials worth $10,500,000 ; and its products are valued at $21,000,000. Carriages, cars, omnibuses and wagons, from their bulk, are not readily imported, and so superior is our manufacture that, in spite of the cost of transportation and materials, we have shipped American vehicles of many kinds to foreign countries, and even to Europe. But no other interest is more directly injured by high duties, which affect the cost of the iron and steel, the paint and the varnish, the woollen cloth and silk trimmings, and some varieties of leather, the cost of which forms a large part of the cost of the finished carriage. In this industry 40,638 persons used materials costing $13,800,000, and produced to the value of $40,200,000. To these may be added, as manufactures, natural and necessary to the country, which cannot be helped by duties on foreign products, the production and refining of coal-oil, kerosene, and turpentine, the manufacture of soap and candles, and the taking of photographic likenesses, which we are not likely to import. These branches in 1860 employed 13,689 persons ; used $20,100,000 of materials, and produced to the value of $32,300,000. But there still remain important branches of industry which must be set aside in any inquiry as to the effect of protective duties. For revenue purposes only, duties are imposed in nearly all coun tries, and with assent of all parties in this country, upon a class of articles which may be termed natural objects of taxation liquors, tobacco, jewelry, silks, sugar, and coffee. Extreme protectionists 120 DOES PROTECTION PROTECT? and extreme free-traders agree that a part of the revenue needed by government may advantageously be raised by duties on such arti cles ; and those duties, whether they affect favorably or unfavorably the manufacture in this country, are not properly classed with those of a protective character, and need not be considered in an examina tion of the protective system. In these branches of manufacture 63,164 persons were employed, and the raw material used cost $105,000,000, and the product was $171,000,000. It will not be seriously argued that we are in danger of import ing our daily and weekly newspapers, or our handbills, posters, and advertising cards. The great majority of our printers are employed in newspaper or in job offices not depending upon the publication of books or magazines for success. Of books originating here, not one in twenty would, under any circumstances, be published in for eign countries, and by far the greater part of that business also is beyond the reach of any foreign competition. But, in the publica tion of foreign books, the American has an advantage in the fact that the foreign publisher has to pay the authors. The proportion of the publishing business which depends upon protective duties is therefore small. But, while the publication of books is but a small part of the printing business, and but a small part of that can be helped by protective duties, all publishers in all their business are injured by duties w^hich increase the cost of paper, ink, machinery, types, and labor. Even those few publishers who print works of foreign origin are probably injured more than they are benefited by the duties, while the much larger proportion, including the whole force of job and newspaper publishers, are injured materially and are not benefited at all. It is reasonable, therefore, to class the printing business, as a whole, with those branches of industry which are in no degree protected by duties on corresponding foreign prod ucts. It employed, in 1860, among those returned in the table of manufactures, 28,150 persons, using material costing $15,000,000, and its product was $38,000,000. The industries already specified yielded, in 1860, a product of $1,104,000,000, and the raw material cost $648,000,000. Nearly two-thirds of the entire product of manufactures, therefore, is de rived from branches not benefited by duties upon corresponding importations, protective in design. But, besides those enumerated, there are others in great number, each yielding a small product, though the aggregate is over one hundred and fifty millions, which are indeed protected by duties on foreign products, but are injured MECHANICS AND NATURAL MANUFACTURES. 121 to a much greater extent by the duties designed to aid the great branches of manufacture, and by the consequent increase in cost of materials. Thus the manufacture of looking-glass frames is in no considerable degree aided by duties, because the glass is almost of necessity framed near the place of use, but it is retarded by duties ranging from 20 to 90 per cent, on the silvered glass which is im ported, and manufacturers of the silvered glass are in turn impeded by duties ranging from 20 to 90 per cent, on glass, added to a duty of 15 per cent, on quicksilver. In the time of low duties, American oil-cloth gained a deserved reputation for its excellence, and our workmen are so superior that we could manufacture largely for ex port if the cloth and the paints were not rendered costly, especially by duties ranging from 50 to 200 per cent, on the most important paints. The preparation of medicines has been peculiarly successful in this country as a branch of manufacturing, but it has to meet most extraordinary duties on drugs and barks, in addition to revenue duties or excises upon alcohol in all forms. The manufacture of rubber goods, by patents of American invention, has grown up in spite of duties on the imported raw material, and still is so flourish ing that notwithstanding those duties we export largely of rubber goods. American pianos are by our makers so skilfully adapted to our climate that they are in no danger of foreign competition, the less as our makers have won premiums, at European expositions, for their excellent workmanship ; but the cost of materials is somewhat enhanced by duties. American invention has distanced competition in the manufacture of buttons, and in producing silk hats our work men are only retarded by the duties on materials, while the manu facture of wool hats, even in colonial times, had progressed so rapidly that the British Parliament, at the appeal of London work men, prohibited the exportation of felt goods from these colonies in order to protect the British manufacturer from competition, and ever since our independence we have exported of such goods. American clocks may be found in every part of the world ; brooms, baskets, boxes, lamps, matches, and other such articles, no one imagines that we shall ever cease to make for ourselves ; billiard-tables are made better here than anywhere else ; tinware is too bulky for importa tion, nor is there any danger that we shall import our coffins, send our soiled clothes to European laundries, or our wood and coal to Europe to be made into charcoal and coke. Space does not serve even to enumerate the many minor branches of manufactures, but enough has been said to show the relative im- 122 DOES PROTECTION PROTECT? portance of those which are recognized as especial objects of legis lative aid. These are the manufactures of iron, and of articles of which iron is the material of chief cost, the manufactures of cot ton, of wool, of paper, of glass, of salt, copper, brass, linen, flax, lead, and hemp. The unprotected branches of manufacture those which cannot be aided by duties, or are necessarily injured more than they are aided employ not less than two-thirds of the hands, and yield not less than two-thirds of the annual product, of all manufac turing industry. Before passing to an examination of separate branches of industry, it is well to fix attention upon the inquiry, " Does the system of protection increase the production of wealth ? " Three-fourths of our production is by agriculture, and is not increased but retarded by this system. Of the remaining fourth, it now ap pears that a large share is derived from industries not protected, or seriously injured by high duties. Not more than six hundred mill ions in the aggregate, or, deducting cost of material, not more than two hundred and sixty millions of annual product, is derived from all these branches of industry which are supposed to be sustained or aided by the tariff. It is therefore necessary to inquire, not merely whether these have been aided, but whether the production of wealth by these industries has been so enormously increased as to compen sate, first, for the injury to agriculture, producing nearly ten times as much ; and second, for the injury to other manufactures producing more than twice as much. About seven per cent, of our annual production was derived, in 1860, from industries supposed to depend upon protection. How vastly must their product be increased, to balance any injury to industries yielding 93 per cent, of that annual protection ! CHAPTER X. THE COTTON MANUFACTURE. FOUR hundred years before Christ, Herodotus, the father of his tory, learned of India that its trees bore fleeces, which the Indians made into cloth. But Herodotus does not tell us that the manufac ture owed its existence to any protective tariff. The cultivation and manufacture of cotton in Persia are spoken of by Strabo, and Pliny recorded that cotton clothes had been made in Egypt. Nor is it doubted that calico-printing by blocks, and the use of mineral dyes, THE COTTON MANUFACTURE. 123 were known to the Egyptians. Early in the Christian era, cotton stuffs from India were transported to Europe for sale ; indeed, long before that time, the vestal virgin had preserved the last sparks of sacred fire on the altar, by casting upon it her head-dress of " carba- sus." When civilized travellers first penetrated to the interior of Africa, they found broad fields cultivated in cotton, by dusky na tives dressed in its soft fabrics. When Columbus first gazed upon the wonders of a new world, he saw women clothed in coats of cot ton ; the earliest discoverers found the plant growing wild as far in land as the Mississippi ; and Cortez sent back, among his earliest spoils from Mexico, cotton cloths woven into beautiful figures, " mantles, some all white, others mixed with white and black or red, green and yellow, and blue; waistcoats, handkerchiefs, counter panes, tapestries, and carpets of cotton." Those who suppose that the working of cotton into fabrics is due in this country to protective duties, or that it would not now survive without them, must suppose that the ingenious and skilful American has less of that wonder working power on which civilization is based than the natives of Hindostan, less than the Persians, less than the negroes of the wilds of Africa, less than the copper-colored savages, and far less than the ancient Aztecs. Long before any legislative aid had been given to it, this in dustry existed in this country. Early in the history of the colonies, women and children carded and spun the raw cotton, while the father of the family plied the loom ; and in 1645 the General Court of Mas sachusetts, with a patriotic desire to direct the industries of the people, which may be called the very germ of American protection, declared in a general order that the towns should take measures for the importation of sheep, because " those who had provided their families with cotton cloth (not being able to get the other) have by that means had some of their children much scorched by fire, yea, divers burned to death." So little did this industry then need aid, that it was thought necessary to discourage it, and, by this and many other acts, to compel the making of woollen goods. In New Amsterdam and in Virginia, the utmost efforts were also made to stimulate the making of other cloth, but in the acts of that period the cotton industry is treated as not in need of similar care. In all parts of the country, the manufacture of cotton had grown up with the colonies, and existed prior to the Revolution. The cloth used by the people was mainly of their own manufacture, and after the Revo lution the domestic supply continued to increase so greatly that the 124 DOES PROTECTION PROTECT? importations of goods were largely reduced. Indeed, Bishop, in his " History of American Manufactures," notices this fact, and adds, " It may be questioned if the people of that day were not as really inde pendent of other countries for such necessaries as are their descend ants at present." Yet the same writer ascribes the subsequent prog ress of the manufacture to the stimulus afforded by legislation ! Until that time (1790) the Arkwright machinery had not been intro duced, while it was largely used and had materially reduced the cost of the cloth in England ; and yet, in spite of that advantage, the in crease of the domestic manufacture was rapidly driving out the for eign goods. Is it reasonable to suppose that, with the machinery then introduced, we should not have sustained this industry had no legislative aid been given it ? In 1790, Samuel Slater set up in this country two Arkwright frames of thirty-two spindles ; and, in 1791, a duty of 7-J- per cent, was laid on all imported manufactures of cotton. This would hardly be called a protective duty now, and, in his report of that year, Hamilton explains that the duty previously imposed of three cents a pound on the raw cotton, then largely brought from the West Indies, " was a serious obstacle " to the manufacture. The duty on goods was, perhaps, designed to counterbalance this disadvantage ; but in 1794 it was raised to 12J per cent. At that time Slater was selling American yarn, No. 20, at $1.21. After six years of pro tection, we find that the price of Slater s yarn, No. 20, had in creased in 1800 to $1.36, although, during the same period, the price of yarn in England had been reduced No. 100, from 15s. Id. to 8s. 9d. per pound. Accordingly, in 1802, there were petitions from calico-printers for legislative aid. And, until our commerce was interrupted by embargo in 1808, the price of yarn and goods continued about the same yarn, No. 20, being 131 cents, sheeting, in 1805, 50 cents a yard, and gingham 70 cents, although the price of United States upland cotton had fallen in Liverpool from 38d., in 1799, to 14d. in 1804, and the price of yarn, No. 100, in England, had fallen to 7s. lOd. In consequence, the imports of British goods increased largely to about nineteen millions in 1807. Under no duties at all, and without machinery, the domestic manufacture had reduced imports. With machinery of the same style as the English, and with duties to aid the manufacture, the imports of cotton in creased. For, under the operation of duties, the price of yarn here actually increased from 121 cents to 131, although the cotton had fallen in price, and the yarn in England had been reduced in cost THE COTTON MANUFACTURE. 125 from 15s. to 7s. lOd. Is there not, in this brief history of the manufacture prior to the embargo, a complete illustration of the failure of duties on imports to build up a manufacture or to exclude foreign goods ? During the embargo and the war with England, the manufacture of cotton grew rapidly on both sides of the ocean. In England and in this country the power-loom was invented and successfully ap plied, but with this difference : in England, sharp competition forced every manufacturer to adopt the best methods ; in this country, the manufacture was shut out from all competition, and adhered, gen erally, to the old hand-loom. The power-loom, invented by Mr. Lowell, was applied with success, in the first large establishment for spinning and weaving combined, by the Waltham Company, and the price of yarn was reduced to less than one dollar before the war closed, but very few establishments had made similar improvements. When the peace brought our manufacturers to the test of competi tion with those of England, and cargoes of goods were sent to our markets for sale, what was the effect ? The power-loom of Mr. Lowell held its ground so well that in 1816 its proprietors stated to Congress that they were making a profit of 25 per cent., and stood in no need of further protection. Other enterprising manufacturers either had adopted improved ma chines or quickly did so. Mr. Bemis, of Boston, who had begun the manufacture of sail-duck in 1809, was still using the hand-loom and selling his duck at a dollar a yard in 1815. But, under the pressure of competition, he introduced the power-loom in 1816, and, not long after, we find that he was selling the same quality of duck at 35 cents a yard. Other mills did likewise, and new mills were put up in the years 1815 and 1816, in spite of the utmost efforts of the British manufacturers to break down this industry. But, while men of enterprise were only stimulated by competition to new effort and progress, a large majority of the manufacturers were still using the hand-loom, and, instead of seizing upon improve ments, they appealed loudly to government for aid. Seven years of great prosperity, entire freedom from competition, and consequent large profits, had indeed enormously increased the number of mills, but had led the majority to no such improvements as had been made in England, or in this country by a few men of enterprise. To help them, they asked and obtained the first tariff in which the minimum principle was applied : all cotton goods were deemed by the law to have cost at least 25 cents a yard, and were subjected to a duty of 120 DOES PROTECTION PROTECT? 25 per cent, on this assumed cost. It was intended to be, and in effect it was, absolutely prohibitory as to low-priced goods. It is important to observe the real difficulty which led to the adoption of this tariff. It was not that the raw material had risen in price, or that the currency had greatly depreciated those disad vantages, serious as they were, affected the Waltham Company as well as others, and did not prevent it from making a profit of 25 per cent. It was simply the failure to adopt new and improved machin ery, either during the war, when the manufacture yielded great profits, or after its close, when foreign competition rendered weaving by hand-looms unprofitable. The minimum tariff was devised to protect these old methods, to sustain men in their adherence to old machines, to help men who had refused to help themselves. The first heavy shirtings, unbleached, made by the Waltham Company during the war, sold for 30 cents a yard, but, in 1816, shirtings, from yarn, No. 12, sold in New York for 23 cents, and, at that price, the Waltham spinners were making a profit of 25 per cent., while goods made on the hand-loom could not be sold at a profit. Their testi mony to Congress proves that the duty was not needed to protect them or others who had adopted new looms. Was not the tariff a premium for laziness and want of enterprise ? Have we not the right to infer that, if all manufacturers had then been forced to adopt the best machines, and to win success as the Waltham Company did, by keeping pace with the progress in other countries, this industry would not then have needed any protection, and its growth would have been more sure, more healthy, and thenceforward independent of artificial aid ? The effect of this tariff was not such as to encourage other ef forts in the same direction. British mills quite generally changed from United States to the cheaper Bengal and Surat cotton, and the price of cotton here declined from over 20d. to about lid. in 1819, and 9Jd. in 1820. The losses of shippers and planters were severe, and a similar decline in breadstuffs of fully 50 per cent, combined to reduce the agricultural interest, then even more than now the basis of all prosperity, to great distress, and affected ship pers and merchants not less. When farmers stop buying, mills must stop producing. " A general paralysis fell upon all branches of industry," writes Bishop ; " the distress became more general and severe than had ever before been known; farms were mortgaged and sold at one-half and one-third their cost," and factories and workshops were everywhere closed." In the Pennsylvania courts, THE COTTON MANUFACTURE. 127 there were 14,537 actions for debt in 1819, and 1,800 imprisonments for debt in the county of Philadelphia alone. These disasters were not caused by the excess of foreign importations, for those had greatly declined. The manufacturing interest was not the basis ; it employed but a small part of the people. Neither is it claimed that the tariff was the principal cause ; the condition of the currency, already explained, was undoubtedly the main trouble. But, in view of the peculiar prostration of agriculture, it is not easy to avoid the conclusion that this disaster was immediately brought on and great ly aggravated by the decline in our great exported staples, cotton and breadstuff s. In the midst of the prostration then prevailing, when mills had generally suspended, and prices had fallen 50 percent., the Waltham Company went forth cash in hand to seek a site for a much larger establishment, and in 1820 bought the site now occupied by the city of Lowell. These gentlemen had not suspended. Others were call ing on government to help them. But these had helped themselves by enterprise. They had testified that they did not need the tariff of 1816 with its minimum, nor would others had they relied upon themselves and not upon government. Others, in the midst of the prostration, were begging for higher duties. But the Waltham makers, understanding that their only sure reliance was in the inven tion and enterprise of American industry, " were supposed to be un favorable to an increase of duties," say records of that time. Ac cordingly, while others were begging for aid, they were putting up at great cost the largest establishment in the United States, which went into operation in 1823, and in 1825 " made its first dividend of $160 per share, and the company had also built three new mills ! " As early as 1823, the " domestics " of this company had become so popular that they were counterfeited by foreign manufac turers, and as early as 1827 it is recorded that " the demand for American cottons in Brazil was considerably affected by imitations of them made in Manchester, and offered there " (in Brazil) " at lower prices, although they could be made as cheaply in the United States as the same quality could be produced in that city." (Bishop, ii., 317.) In view of the progress of this company, is it not plain that the act of 1816 was unnecessary to protect the enterprising manufac turer ? If to protect him it was unnecessary, it was simply a pro tection to others against the consequences of their own lack of en terprise, and a discouragement to those who might by peculiar ener gy and skill have commanded a larger share of the home market. 128 DOES PROTECTION PROTECT? If the act of 1818 was not necessary, what shall we say of the act of 1824, with its increased duties? By that act the minimum was raised from 26 to 35 cents, in face of the fact that the Lowell mills were then making that profit of $160 per share in two years ! What shall be said of it in view of the fact that, after the prostration, the great prosperity of the cotton manufacture was acknowledged, and new mills had been established in every di rection prior to 1824 thirty-six in New York alone in the years 1821-1824 ? Although American cottons were largely exported, and were counterfeited by foreigners both for pur own and for other markets, although the manufacture was already increasing faster than the demand for its products, this increased duty was by some demanded, and by Congress granted. The effect was such as to instruct those not wilfully blind. Within less than five years (in 1829) we find it recorded that great distress prevailed " among the manufacturers of New England, par ticularly in the cotton branch," and that " at a meeting of the man ufacturers of Philadelphia on 3d February (1829) resolutions were adopted to establish one or more private houses for the sale of their goods, and to discontinue sales at public auction, as having a tendency to reduce prices below value." Here we have the first recorded instance of combination to keep up the price of goods, in spite of competition and over-production. The tariff, therefore, had worked thus : first, profits to the manufacturer, " $160 per share in two years ; " second, great numbers of new mills started ; third, great distress among the manufacturers because of over-production ; fourth, combinations of the manufacturers to prevent reduction of the price. It is the constant argument of those who favor the protective policy, that it cannot increase the price of manufactured products, because competition will invariably keep down that price. But at every step will be found proof that manufacturers can combine in this country as well as in England, and that, when they are pro tected against foreign rivalry, they constantly do combine to keep up the price, the rate being fixed not by the progress of the most skilful, but by the negligence of the most unenterprising. Thus the least deserving and useful are kept alive to " cumber the ground ;" and, though the quantity of goods made is increased often beyond the demand, the method of manufacture is not improved and the cost reduced, by weeding out the incompetent and yielding returns only to those who advance toward perfection. Those whose unskil ful manufacture is a sheer loss to the country continue to share the THE COTTON MANUFACTURE. The quantity of Cotton produced, and the quantity consumed, in this country, in pounds, per capita, with the average export price, from 1827 to 1861, inclusive. 1827 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 CO 61 NOTE T. The extreme low price during the tariff of 1842- 46. II. That the manufacture has been governed, in almost every increase or decrease of consumption, by the quantity of crop and the price. III. That the short crops and high prices of 1850 and 1851 fully account for the re duced consumption. IV. That the short crops of 1841 and 1842, rather than any state of tariff, explain the small consumption. V. That in 1847, under low duties, it happened for the first and only time, that two short crops did not reduce the manufacture. THE COTTON MANUFACTURE. 129 profits and divide the market ; and the more enterprising, unable to extend their sales freely to foreign markets because of a cost of pro duction artificially increased, are themselves subjected to frequent losses and prostration by the overcrowding of the home market. Thus repeated disasters, shared by all, have to do the work which natural competition would do more surely, confining its effect to those who fail to keep pace with the times ; they are crushed from time to time, but by prostrations which affect others as well. Mean while, all classes are trained to rely, not upon ceaseless improve ment, but upon frequent interpositions of government. The consumption of cotton, which, according to Bishop, had reached 150,000 bales in 1826, and according to the statistics of the Cotton Association was 149,516 bales in 1827, declined in 1828 to 120,593, and in 1829 to 118,853 bales, a loss of nearly one-fifth. This was not caused by a failure of crops, or by an increase of price. The crop of 1827 was the largest then ever produced by more than 200,000 bales, and except in that year none had ever been produced larger than those of 1828 and 1829. The price of cotton was 6Jd. in Liverpool in 1827, and fell to 5fd. in 1829. The duties on im ported goods were higher than ever before ; on sheetings about 145 per cent., checks 109, shirtings and chintzes 43, and calicoes about 72 per cent. Yet this prostration was more severe in effect upon the cotton interest than that produced by the terrible currency explosion of 1837. But it evidently had a good result. It forced into bankruptcy a great many concerns which had been kept alive by protection, and were a constant impediment to the progress of the manufacture ; though it inflicted heavy losses upon the more en terprising as well, it left this branch of industry in a more healthy condition. For thenceforward, during many changes of duty, it con tinued a steady and rapid progress. From this time onward we are able to trace with accuracy the progress of this manufacture by the aid of statistics. The following table presents the crop of each year since 1827, the quantity ex ported, the quantity consumed each year in this country, the pro portion of the crop consumed here, the number of pounds con sumed per capita, the price of uplands in Liverpool in pence, and the average price of all cotton exported in our own ports in cents. To render this table more intelligible, the accompanying diagram has been drawn, showing the crop, consumption, and price. By comparing these lines, the cause of every considerable change in the production of cotton goods may at once be traced : 130 DOES PROTECTION PROTECT? THE COTTON MANUFACTURE. TAKEN FOR CONSUMP t TION. EXPORTED. TOTAL CROP. PRICE. t CONSUMED YEAR. 1 i -M 1 2 I 1 I i ! t! _g 5 1 I 0< 5| 1 ~ 1820 127,800 000 Ibs 16 c. 9>d 1821 124,900.000 Ibs i80.ddd.bob ibs 16 83^ 1822 144,700,000 Ibs 210.000.000 Ibs 16.6 8J/ 1823 173,700 000 Ibs 11.8 8% 1824 142,400,000 Ibs 15.4 8J 1825. 176,500,000 Ibs 255,000,000 Ibs 20.9 UX 1826.... 150,000 .. 204,500,000 Ibs 720,000 bales. 12.2 6^ Bales. Balei. 1827.. 149.516 331 49,489,796 854,000 957,281 10 6^ 26 15 4.22 1828.. 120.593 335 40,398,655 600,000 720,593 10.7 6% 19 16 3.30 1829.. 118,853 341 40,528,873 740,000 870,415 10 5X 23 13# 3.31 1830. . 126,512 339 53,887,508 839,000 976,845 9.9 6% 26 13* 4.19 1831.. 182,142 341 62,110,422 773,000 1,068,847 9.1 6 26^ 17 4.67 1832.. 173,800 360 62,568,000 892.000 987,477 9.8 6& 26 17 4.56 1833.. 194.412 350 68,044,200 867,000 1,070,438 11.1 8^ 26^ 18 4.81 1834.. 196.413 363 71,297,919 1,028.000 1,205.394 12.8 8% 30 16 4.90 1835.. 216,888 367 79,597,896 1,023,500 1,254,328 16.8 105^ 31 17 5.31 1836. . 236.733 373 88,301,409 1.116,000 1,360,725 16.8 &A 33 17 5.73 1837.. 222.540 379 84,342.660 1.169.000 1,423,930 14.2 7 34 15 5.33 1838.. 246.063 379 93,262,877 1,575,000 1,801,497 10.2 7 42 14 5.74 1839.. 276,018 384 105,990,912 1,074,000 1,360,532 14.8 7% 31# 20 6.36 1840.. 295.193 383 113,058,919 1,876,000 2,177,835 8.5 6 49 13 6.68 1841.. 297,288 394 107,131,472 1,313.500 1,634.954 10.3 6^ 3# 18 6.08 1842.. 2(57,850 397 106,336,450 1,465,500 1,683,574 8.1 5X 37 16 5.85 1843. . 325,129 409 132,977,761 2,010,000 2,378,875 6.2 4% 52}<r 13 7.11 1844.. 346,750 412 142,861,000 1,629,500 2,030,409 8.1 4% 44 17 7.42 1845.. 3S9.000 415 161,435,000 2,083.700 2,394.503 5.9 4% 51 16 8 15 1846.. 422,600 411 173,688,600 1,666,700 2,100,537 7.8 4% 43 20 8.54 1847.. 1848.. 428,000 616,044 431 417 184,468,000 256,890.348 1,241,200 1,858,000 1,778,651 2.439,786 10.3 7.6 6% K 37 47 24 25 8.87 11.99 1849.. 642,485 436 280.123.460 2,228,000 2,866,983 6.4 5> 56^ MX 12.75 1850.. 613,498 429 263,190,642 1,590.200 2,233,718 11.3 7X 41 27 11.34 1851.. 485,614 416 162,015,424 1,988,710 2.454,442 12.1 5X 43 19j 6.78 1852.. 699,603 428 299,430,084 2 443,646 3,126,310 8 5% 54 22 12.16 1853.. 803,725 428 343,994,300 2,528,400 3,416,214 9.8 5% 57# 28# 13.57 1854.. 737,236 430 317,011,480 2,319,148 3.074,979 9.5 5% 50^ 24 12.16 1855.. 706,412 434 306.582,808 2,244,209 2,982,631 8.74 5X 48 24 11.40 1856.. 770,739 420 323,710.380 2,954,606 3,665,557 9.49 6 55X 21 11.70 1857. . 819,936 444 364.162.584 2.252,657 3,093,737 12.55 7& 48 26X 12.76 1858.. 595,562 442 263,238,404 2.590,455 3,257,239 11.70 6X 49 18 8.95 1859.: 927,651 447 414.659.997 3,021,403 4,018.914 11.64 6^ 59 23 13.70 i860.. 978.043 461 450,877,823 3,774,173 4,861,292 10.89 5X 71 20 14.32 1861.. 843,740 477 401,263.980 3,127,568 3,849.469 11.07 8V 57 22 12.39 1862 370 000 170,200,000 1,600,000 23.18 17% 7.24 1863 . . 28s!oOO * 120, 960 000 450,000 42*57 23^ * * 4^99 1864!! 22o!oOO " 92,400.000 300,000 52.72 -21% 3*42 1865 ! 345^000 423 145 935,000 2 130 000 38 05,19 " " * " 5!21 1866!! 731 J25 441 322^690,725 1,554,664 2,342,116 30!6715^ 29 si" 9!09 1867.. 940,039 444 417,377,316 1,557,054 2.318,660 21.5911 28 40 11.49 1868.. 968,165 445 425,992,600 1,655,816 2,599,241 .... 9% 34 39 11.36 1869.. 968,000 447,216,000 1,447,643 2,439,039 .... hag 39 11.57 The crop of 1819- 20 is entered as 1820, and so for each year. The estimate of consump tion in 1826 is Bishop s. The figures for 1869- 70 are from the Financial Chronicle ; another statement gives the quantity consumed as 995,127 bales, or 11.94 pounds per capita, and the total crop aa 2,260,557 bales. THE COTTOX MANUFACTURE. 131 Since 1829, until the recent war, the progress of the cotton man ufacture has been rapid and generally steady, without regard to any changes of duty whatever. The compromise tariff of 1832, with its great reduction of duties, did not prevent the consumption advancing from 173,800 bales in 1832, to 297,288 bales in 1841, or from 4.67 Ibs. per capita to 6.68 Ibs. in 1840, and 6.08 in 1841. Nor was this advance caused or accompanied by any sacrifice of the producer of cotton, for the price was 9.8 cents in 1832 and 10.2 cents in 1841. The severe shock given to all industry, by the currency explosion of 1837, only reduced consumption 14,000 bales less than one- fifteenth ; and, in the extreme depression of the return to specie pay ments, the consumption was reduced less than 30,000 bales, or about one-tenth. This progress, therefore steady, rapid, and sure-footed enough to be little shaken by the greatest industrial prostration was not gained at the expense of the producer. Neither was it gained at the expense of the consumer. Tables of prices, which will be found in Chapter XXI., show that there was a very considerable reduction in the prices of all kinds of cotton goods, from 1835 to 1841, amounting, in the average, to about one- third of the price in 1835, and a further reduction in 1842, so that nearly 40 per cent, of the cost to the consumer was removed during these eight years of non-protection. The cost of manufacture to the pound of cotton was reduced, it was stated by manufacturers in 1845, from 33 cents in 1828, to 14 in 1841 ; and, as the price of cotton was more than 60 per cent, higher in 1835 than in 1841, it is plain that the reduction of price was not disastrous to the manufac turer, but that his profits at the prices of 1841 were probably about as large as they were at the prices of 1835. It is easy to understand, also, why the extreme depression of business after the resumption of specie payments did not more seriously prostrate this manufac ture, for it found a ready outlet in exports for its surplus product whenever domestic consumption was checked. Grower, consumer, and manufacturer, were all benefited during this period. In the next period it was otherwise. In 1843 the price in Liver pool fell below 5d., and so remained until the tariff of 1842 expired. The price here dropped to six cents, and during those four years averaged only seven cents. With a reduction of price from 15 cents in 1839, to 6 cents in 1845, and less than 8 cents in 1846, it is not strange that the consumption here advanced from 276,000 bales to 422,000 bales, an increase of just one-sixth in seven years. Indeed, this increase of the manufactures was not more rapid than the in- 10 132 DOES PROTECTION PROTECT? crease of the crop, for in 1839 we consumed 20 per cent, of the entire crop, and in 1846 exactly the same propdrtion. The con sumption per capita increased under this tariff from 6.68 in 1840 to 8.54 in 1846, or about two pounds per capita, and this was at an expense of two cents a pound on the value of the whole crop, or sixteen million dollars. Whether the tariff of 1842 caused the low price or not, the diagram shows that, in every period of protec tion until the war, the price has been low. The essential point is, that the consumption increased only in proportion to the crop, and in connection with prices extremely favorable to the manufacture, and extremely unfavorable to the grower. It is also necessary to observe that this progress was made at the expense of the consumer of cotton goods. The tables of prices in Chapter XXI. show that the progressive reduction of price, which had been quite rapid from 1836 to 1842, was suddenly arrested dur ing this tariff; that the low price of cotton was not permitted to inure to the benefit of the consumers of cotton goods, and that the prices of a large majority of the qualities there named were higher in 1846, at the close of the protective tariff, than they had been in 1842, before its adoption, or in 1843, its first year. Buying cotton at 10 T 2 Q- cents in 1841, the manufacturer made Chicopee brown sheet ings, three yards to the pound, so that they were sold in 1842 at T TST cents a yard, and the cost of manufacture and profits were then not greater than eleven cents to the pound of cotton worked. But the same establishment, buying cotton at 5^ cents, in 1845, sold the same quality of sheeting in 1846 for eight cents a yard ; so that the cost of manufacture and profits were then 18 T *g- cents to the pound of cotton manufactured. It will elsewhere appear that wages were not higher in 1845 than in 1841 or 1842, but the cost of manu facture may in many other ways have been increased in conse quence of the tariff. Yet it is reasonable to suppose that the great part of the increased tax then borne by consumers amounting to 7-^0 cents to the pound of cotton used went in the form of increased profits to the manufacturer. The grower, therefore, was injured, the consumer was taxed, and the manufacture increased at the ex pense of both classes. If profits were very large, they went not to the benefit of labor, but to the capitalist. May it not fairly be doubted whether progress so gained was wisely gained ? Under the " free-trade tariff " which followed, the manufacture progressed far more rapidly, while the cotton-grower received better prices, and the consumer obtained his cloths at a great reduction of THE COTTON MANUFACTURE. 133 cost. By reference to the table of prices it will be found that the cost of every quality of cotton goods was reduced from 1846 to 1849, the average reduction being about one-sixth. The same qual ity of sheetings already mentioned was sold in 1849 for 6 T %- cents, a reduction of ly 1 ^ cents, but the grower in that year received 6 1 4 i5 - cents, and in 1848 he received 7 T V cents a pound, while in 1845 the price was 5 T 9 Q- cents, and in 1846 it was 7fV cents. Two enormous crops pushed down the price in 1849 ; but in no other year thence forward was the price as low as the average for the whole tariff of 1842. Stimulated by the reduced price of goods, the consumption advanced from 422,600 bales in 1846, the last year of protection, to 642,485 in 1849, a gain of more than one-half in three years, and the consumption per capita from 8.54 Ibs. to 12.75 Ibs., about one- half. Moreover, this increase was not caused by an increase of crop alone, for in 1846 we consumed 20, and in 1850 we consumed 27 per cent, of the whole crop. The short crops of that year and the next, however, causing the price to rise to twelve cents, temporarily reduced consumption, and imports of cotton goods were increased, England having the advantage of other and cheaper supplies of cot ton. But, the instant that advantage was removed, by recovery of our crop, the manufacture rose in 1852 to 699,603 bales, and in 1853 to 803,725 bales, 13.57 pounds per capita. Thus, in seven years, the quantity manufactured in this country had increased un der low duties nearly 100 per cent., and the proportion of the crop consumed here had increased from 20 to 23|- per cent., while the price of cotton to the producer had risen from 7.8 cents to 9.8 cents a pound just two cents. With many millions gained to the grower, the manufacture doubled, and cotton goods cheapened, this tariff cannot be said to have injured the country. Thenceforward, until the war, the cotton manufacture varied al most precisely in proportion to the crop, rising from 803,725 bales in 1853, to 978,043 bales in 1860, or from 13.57 Ibs. per capita to 14.34 Ibs., the price meanwhile also rising to about eleven cents. The main variation caused by the panic of 1857 was a loss in con sumption of about one-quarter in 1858, which was more than recov ered in the next year. Taking this tariff period as a whole, the gain from 1846 to 1860 was in consumption from 422,600 bales to 978,043 bales, or 130 per cent., and to the grower from 7.8 cents a pound to 10.8 cents a pound, or over fifty million dollars on the crop of 1860. The war cut off the supply of cotton and reduced the manufacture greatly, but since peace was restored it is again vigorously advan- 134 DOES PROTECTION PROTECT? cing. The consumption per capita, however, has not yet reached the quantity consumed before the war, and the great increase in the growth of cotton elsewhere has made England comparatively less dependent upon our crop for supply. In consequence of this fact, and of the reduced crop, we consume a larger proportion of the crop than we did before the war, though the manufacture does not as yet supply to consumers as large a quantity of goods per capita as it then did. As the crop is less than one-half as large as it was in 1860, the grower gets much higher prices, so that the production of wealth by the growth of cotton has not been materially diminished. Nor, if we consider the manufacture as productive of wealth in pro portion to the quantity of cotton which it transforms into fabrics, can we say that the production of wealth by this branch of industry has increased. But the effect of the present tariff cannot be deci sively distinguished from the effects of other causes upon both growth and manufacture. To the periods prior to the war we must look for proof whether the cotton manufacture has been aided by the protective system. The review of facts, we think, has fully demonstrated I. That the manufacture, like the growth of cotton, is indigenous to this country, and has never owed its existence to protection. II. That protective duties, even in the earlier years, were desired only by the less enterprising, to shield them from the effects of lack of enterprise. III. That those duties were a premium to bad management, and kept alive the less useful establishments, a hinderance to progress. IV. That severe prostration, the disasters of which were shared by the best and the worst, were needed to weed out these con cerns, and prepare the manufacture for healthy growth a work which natural competition would have done with less detriment to others. V. That since 1829, under all changes of duty, the growth in this manufacture has been such as to demonstrate its independence of legislative aid. VI. That the manufacture has progressed, since that time, in proportion to the growth of the crop, but a little more rapidly in times of non-protective than in times of protective duties. VLL That progress in the manufacture has been accompanied with loss to the grower of cotton and to the consumer of goods under protective duties, but under non-protection a more rapid progress has been made, with gain to the grower and to the consumer. THE WOOLLEN MANUFACTURE. 135 VIII. That the production of wealth by cotton manufacture pro gressed more rapidly under the low revenue tariff of 1846- 60 than at any other time in our history. CHAPTER XI. THE WOOLLEX MANUFACTUKE. THE condition of the woollen interest in this country is very re markable. During the past year many large mills have stopped, and very few of the manufacturers have worked full time. The business, it is generally acknowledged, was never in a more unsatisfactory condition, and fine factories are for sale at great sacrifice. Some of the largest and most intelligent manufacturers openly appeal to Congress to repeal the protective duties, and give them a moderate revenue tariff. Yet this disastrous condition of the manufacture is not caused by high prices of the raw material, and is not accom panied with any benefit to the wool-grower, for the prices of almost all varieties of American wool are lower than they were in 1860, and of the most important grades lower in currency than they were in 1860 in gold. In consequence, the wool-growers are slaughtering their sheep by thousands, and the clip of wool for the year 1869 is said to be fully forty millions less than that of 1868. While the manufacturer is ruined and the wool-grower slaughters his sheep, the consumer is taxed from fifty to one hundred and fifty per cent, for his clothing, blankets, and carpets. Surely this cannot be con sidered a successful policy, which ruins manufacturers, slaughters sheep, and fleeces consumers ! " How can these results possibly occur under the same tariff?" Yet they actually do occur ; here they are, to be witnessed by any man : mills, silent or bankrupt ; growers feeding hogs ; consumers paying nine dollars a pair for blankets which cost not more than five in 1860. Nor is this the worst phase of the matter. We imported in 1869 of wool and woollens about as much in value, and of woollens far more in quantity, than we did in 1860, under lower duties. Yet many important kinds of woollen goods are absolutely excluded, and the manufacturer here has absolute control of the market. No ad vocate of protection can be persuaded that a system which entirely excludes a foreign article can benefit nobody, yet who is benefited 136 DOES PROTECTION PROTECT? here ? No advocate of that system will admit that duties which ruin the manufacturer and the grower can at the same time tax the consumer, yet here are duties which unquestionably injure grower, consumer, and manufacturer. It is for no lack of protection that these disasters occur. The tariff under which we live was shaped by a convention of wool-growers and wool-manufacturers, and unani mously demanded by both, as absolutely necessary to keep those in terests from destruction. Congress, as if legislating for them alone, and for the millions of consumers not at all, granted what they asked. How can the results be explained ? Three causes have combined to that end : There has been a large increase here in the manufacture of those goods of which, prior to protection, consumption was mainly or wholly supplied by our own mills, rather than of those of which consumption was not so supplied. The cost of production here has been increased, while the cost of the raw material elsewhere, partly because of our tariff, has been greatly reduced. The cotton manufacture has recovered from its extreme depression during the war. To a considerable extent, the woollen and the cotton manufacture compete to supply the same consumption. When the supply of cot ton failed during the war, the woollen manufacture was very largely increased. A similar increase, less in degree, occurred in other countries, where the consumption of cotton was checked. In this and in other countries an enormous demand for wool was created, and production rapidly increased. But the revival of the cotton supply and manufacture, after the war, diminished the consumption of woollen goods, and the supply exceeded the demand. Conse quently, in other countries as well as in this, the woollen manufac ture has been reduced or compelled to accept lower prices, and the wool-grower has also been compelled to reduce production, or sell at lower rates. When this cause began in all countries to affect both the growth and manufacture of wool, people in other countries adjusted their industry to the facts. If they could sell at lower prices or manufac ture more cheaply, they did so. But in this country they went to government for aid. Already both grower and manufacturer had been aided, first by the Morrill protective tariff of 1861 as perfect a piece of work of its kind as ever was devised and, that having failed, by the higher tariff of 1864. Instructed thus to rely upon legislation to cure all industrial ills, they asked and obtained a still higher duty in 1866, and finally the wool tariff, framed by wool- THE WOOLLEN MANUFACTURE. 137 growers and manufacturers, the blessings of which we and they now experience. How higher duties could be expected to increase con sumption, or relieve a market already overstocked with the wools and goods mainly produced here, we do not see. But, in some such strange hope, Congress granted the extreme duties desired, and grower and manufacturer were permitted to ruin themselves at the public expense. When the cotton supply fell short and prices of woollen goods went extravagantly high, many people were attracted to the growth and manufacture of wool. Quite naturally, they preferred to grow that class of wool which had been found most profitable here, instead of other qualities more really needed, but less profitable. The manu facturer, also, having promise of control of the home market, preferred to make goods for which our wool was suitable, rather than those which required the use of foreign wools bearing high duties. Thus both growth and manufacture progressed rapidly in one direction, without extending greatly in others. Of wools which we naturally produce because they are supposed to be the most profitable, we produced more. Of goods which we naturally make because they can be made of American wools, we produced more. And, of these wools and woollens, the supply quickly equalled or exceeded the de mand. But, for other wools and other qualities of woollen goods, we remained as dependent as ever upon foreign supply. This did not please legislators, nor yet gentlemen who wanted to exclude foreign products entirely, and, therefore, duties were raised still higher. This promised larger profits, and accordingly more people rushed into the growing of the same wools and the manufacture of the same goods. Then the markets were overstocked, and losses followed, while we continued as dependent as before, for other goods and wools, upon foreign supply. Now, protection makes it the business of government to apply a remedy whenever any pro tected interest is losing. Wherefore, the remedy was applied higher duties. With special determination to shut out foreign wools, on mestiza, then selling at 13 cents in gold, a duty of 11^- cents was imposed. To help the manufacturer, duties of fifty cents a pound and thirty-five per cent, ad valorem were imposed on the goods. These promised great profits, and more people still began to grow the same wools and to manufacture the same goods. And now we have factories idle or for sale, and sheep slaughtered by the million. Yet we are still importing wool and woollens to the value of over forty millions ; for the manufacture, extended mainly in 138 DOES PROTECTION PROTECT? those directions in which we do not compete with foreign products, has but slightly diminished our importations. " But how can it be that an overcrowded manufacture of certain goods does not reduce the prices of those goods ? " It does reduce the prices of some below the cost of manufacture, but not below the cost in 1860, when wool was dearer, but the manufacture cost much less, and not at all to compare with the reduction of cost in other countries. The attempt to exclude mestiza wool from our ports has thrown it upon the markets of Europe at a greatly reduced price. The English manufacturer, getting his wool cheaper than before, can produce cloths cheaper. Thus our tariff has operated to protect the foreign manufacturer, and so great has been the reduction of cost that he can now pay the duty of " fifty cents a pound, and 35 per cent, ad valorem," amounting, in some cases, to nearly 150 per cent., and still sell some goods in our market at prices little above those of 1860. But our manufacturer, with his increased cost of manufacture, and with no cheap foreign wool to mix profitably with our own, cannot sell lower than he did in 1860 without a ruin ous sacrifice. Of the qualities which are sold at the prices of 1860 in gold, some are sold at a sacrifice, and even then the consumer is heavily taxed because foreign goods cost much less. But the goods sold at or near the prices of 1860 in gold are few. At the sale after the exhibition at Cincinnati in August, the prices paid to the manu facturers direct, in large quantities and not by the piece, were for flannels plain, 50 to 65 cents ; red, 52^ ; plaid, from 40 to 52^ ; cas- simeres, 81.12-J-, $1.25, and $1.35; blankets, from $9 to $11 a pair; shawls (long), $7.25 ; jeans, from 50 to 82^- cents. Similar goods sold in 1860 flannels, 26 to 36 cents; cassimeres, 66 to 90 cents; blankets, $3 to $6 a pair ; shawls, $7.* * In the report for 1870, received after this chapter was prepared, Mr. Wells gives tables of prices (quoted p. 153), which more fully illustrate the principles above stated than any statistics which I had been able to obtain. He gives, first, the selling prices at Stewart s, New York, of the most important articles of domestic manufacture, in 1860 and in 1869 ; and, second, the importing prices of certain French goods. These tables show that the prices of American goods have been increased from 10 to 80 per cent, since 1860, though many of them now sell for less in gold than they then did, but at the same time the cost of goods has been reduced in other countries very greatly. I add, at the close of this chapter, another table, prepared by Mr. Greeley to prove that many qualities of domestic-made goods actu ally sell for less or little more in gold than they cost in 1860 which is true of some goods which can be advantageously made of American wool only, because the price of American wool is much lower in gold than it was in 1860. But of other goods THE WOOLLEN MANUFACTURE. 139 But these are the goods which we most successfully manufac ture, sold at auction in large quantities by the manufacturers direct. Of others the price has been much more increased so much that the foreign manufacturers supply quite as large a share of the con sumption as they have ever done. The reason is, that the wool of this country is not suited to the production of such goods, and for eign wool of that quality has not been admitted at such terms that our manufacturers could compete with others who have their wool free of duty. Nearly all the wool produced in this country is of the merino of medium grades, suitable for the manufacture of card-wool tissues flannels, blankets, shawls, cloakings, satinets, and cassimeres. But of the fine clothing wools from which broadcloths and doeskins can be made, this country produces no supply. Of combing wool, that quality by which the vast manufacture of England is mainly sus tained, a long wool necessary to the worsted manufacture, we pro duce no supply. So small is the quantity produced of either of these qualities, that we might as well not produce them at all. Neither have we the Cheviot wool, a mixture of which gives their peculiar character to the Scotch tweeds, cassimeres, and coarser shawls and blankets. Nor have we those finest qualities of merino wool such as enable the French to excel all nations in dress-goods for women. The American wool is costly, and, though superior in quality for many purposes, can even for those be often most economically used in mixture with foreign wools. A free supply of cheap wool from other countries, therefore, enables the manufacturer to consume a larger quantity of American wool, and retain command of the market. Manufacturers in other countries have this opportunity to choose from many qualities of wool the best and most economical it is not true. And while Mr. Greeley introduces this table to prove that consumers in this country are not taxed by the tariff on woollen goods, he carefully conceals the fact that prices of goods in other countries have been so much reduced that duties of 80 per cent, do not shut out importations nearly as large as those of 1860 ; and he also conceals the fact that the cost of American wool here has been so de pressed that the material for a yard of cloth, which cost in 1860 just $1.08 J (wool 50 cents 21 Ibs.) now costs only 84| cents (wool 39 cents 2 Ibs.), a difference of 24 cts. in gold in a yard of cloth. It is plain, then, that if the cost of manufacture has not been increased, the cloth costing one dollar and a half a yard in 1860 ought now to be sold for one dollar and a quarter in gold. It is not worthy of Mr. Greeley s rep utation to suppress these essential facts, which prove that the people are taxed, and that heavily. 140 DOES PROTECTION PROTECT? mixture. The policy of our government has always denied to our manufacturers that opportunity. The "protection" the advantage thus given to the foreign manufacturer is so great as to be abso lutely decisive of itself in a contest between national industries. But another advantage, not less great, is the power of changing from one class of goods to another, as the state of the market may require. With free and amply supply of wools of all kinds, the foreign manufacturer, if he finds the market overstocked with goods of any kind, can change to others for a time. But the manufac turer here, when foreign wools are either excluded or by duties made too costly for profitable use, is forced to confine himself to the production of such goods as can be made wholly or mainly of Ameri can wool ; and, whenever the market for these few qualities is sup plied, he must close his mills or work at a sacrifice. These few facts are the key to the whole history of the woollen interest. It was impossible for the manufacturer to compete on even terms with those of other countries, without free supply of all kinds of wool. But that supply has not been given a single year since 1824. Consequently the manufacture has always been at a disadvantage, and, in the attempt to produce goods other than those for which American wool alone can be profitably used, that disad vantage has been fatal. Even in the i\se of American wool, free dom to mix with others being denied, our manufacturer has been unable to produce as cheaply as that of other countries, except in a few articles ; and thus, while the manufacture of some fabrics has been repeatedly prostrated by an excess of production over demand, the industry as a whole has been narrowed, weakened, and rendered unable to consume as largely of American wool as it otherwise might have done. When to these disadvantages is added the increased cost of machinery, of buildings, of power, and of dyes, under a protective tariff, it will be realized that the cost of production here has been artificially raised above the cost in other countries. Hence, this great industry is the weakest of all leading branches of manufac ture, and demands the heaviest duties to shelter it against compe tition; and, having those duties, finds itself worse off than ever before. In plain terms, it has been " protected " almost to death. Instead of leaving it free to enjoy such success as it could honestly win and surely hold, unimpeded by legislative interference with the cost of materials and of production, we have been trying almost without cessation for forty-five years to compensate the THE WOOLLEN MANUFACTURE. 141 manufacture for protection to the wool-grower and others, and have shut it out from supplies of wool absolutely necessary to make it permanently successful. " But this has been done to benefit the wool-grower," it will be said. The only market for American wool must come from Ameri can manufacture, and that manufacture will be able to consume American wool at fair prices only when it has attained a healthy condition, a solid and enduring success. We shall presently inquire what protection has done for the grower. Let us first ascertain how it has affected the manufacture. A review of statistics will prove, first, that the woollen manufacture, never needing protection as to such goods as can be best produced from American wool, has never by protection been so extended as to materially diminish our de pendence upon foreign countries for other goods; and second, that the manufacture has been retarded and crushed by repeated and mistaken efforts to protect wool-growers. Under all tariffs prior to 1824, wool was free. Light revenue duties were imposed on carpets, of 7-J- per cent, in 1791, of 10 per cent, in 1792, of 15 per cent, in 1794, and in 1800 of 12 per cent., and in 1804 of 15 per cent, on other manufactured goods. Under these trifling duties the manufacture grew up. Arthur Schofield established the mill at Pittsfield from which goods were soon sent to New York, sold for British broadcloths, and brought back for sale by a dealer of that same town in which they were manufactured. He was soon followed by others, and in many quarters, before the embargo of 1808, woollen goods were made for $1.06 which were declared to be equal in fineness and superior in wear to British goods of double width costing $3.50 a yard. Thus British goods, if free of duty then, would have cost $1.50 for the same quantity and an inferior quality, compared with goods manufactured here at $1.06. But this was before we began to protect wool-growers. During the war, the woollen manufacture greatly increased, but wool was so scarce as to be sold for $4 a pound, and broadcloths sold as high as $18 a yard. When the war closed, and these fictitious prices in the then inflated currency were brought in contact with those of other countries, the manufacturer, having wool free, adjusted himself accordingly ; and it is recorded that new and large woollen mills were built after the close of the war, until the prostration produced in 1819 by the great disorder and contraction of the currency, already described. In that disaster the woollen manufacture shared, yet not more largely than that of cotton, and it recovered quite as vigor- 142 DOES PKOTECTION PROTECT? ously. Under the tariff of 1816, imported woollen goods bore a duty of 25 per cent., blankets, worsteds, and stuffs, bearing 15 per cent. ; but these duties did not prevent the subsequent prostration. A table of the importations of woollen goods, from 1821 to 1845 inclusive, classified, is taken from the Treasury report of 1845 (Table No. 5 at the close of this chapter), and preceding (Table No. 4) is also a table of wool, woollens, and carpets, imported since 1845. From these records it appears that in 1821, when the country was just beginning to recover from depression, the value of woollen goods imported was nearly seven and a half millions, of which five mill ions were of cloths, shawls, etc., and a million and three-quarters of worsted goods. But, of blankets, the importation was less than half a million, and of hosiery, gloves, etc., less than $200,000. It is evident that the importation of worsteds and of fine woollen cloths supplied a large part of the consumption, while of blankets, hose, and the coarser cloths, very much the greater part consumed was then produced here. The importations of 1822 were much heavier, but those of 1823 and 1824 were about eight and a quarter millions, and the proportions of different articles were about the same. At that time the whole consumption of woollens was about $43,000,000, of which $8,386,597 was imported in 1824, the last fiscal year preced ing a change of duty, or less than one-fifth. In 1824 the first attempt was made to protect the grower, and the manufacturers, to balance the duty on the raw material, received largely increased protection, the minimum principle being then ap plied to woollen goods. All goods costing less than 33J cents a yard bore a duty of 25 cents a yard, and goods costing more a duty of 33^ per cent. This system, to the astonishment of its advocates, greatly prostrated the woollen manufacturer, and reduced the price of wool to the grower from 32 \ to 25 cents ! The reason is plain : the manufacturer was prostrated by denial of his choice of wools. That effect alone was so injurious, that, in spite of a reduced cost of nearly one-quarter in American wool, and an increased duty on foreign goods, the importations increased in the very next year, 1825, to over $11,000,000, and were $8,679,505 in 1828, the last (fiscal) year of this tariff. Demonstration cannot be clearer; the prostration of the manufacturer cannot possibly be ascribed to any other cause except the inability to compete without free choice of wool. It cannot be ascribed to increased cost of American wool. It cannot be ascribed to importations merely, for those only reached in 1828 about one-fifth of the total consumption. But the manufac- THE WOOLLEN MANUFACTURE. 143 turers themselves testified before a congressional committee to their losses. Thirteen of those who were examined in 1828 declared that they had been losing money since 1825-? some largely, and only one, a maker of flannels, reported success. And they stated the real difficulty : they were dependent upon imported wools, which cost, Saxony, 61 cents to $1.60 ; Spanish, 35 to 85 cents ; merino, 30 cents to $1.25 ; Italian, 32J cents ; German coarse, 16 to 20 cents ; Rus sian, 13 cents ; Smyrna, 16 to 22 cents per pound, w r hile the com mon American was selling for 20 to 25 cents. Its value had depre ciated, they truly testified, because of " the depressed state of the manufacture." Here are to be observed, as consequences of the first protective tariff on wool, nearly the same results as are now witnessed ; manu facturers ruined, wool depreciated in price, consumers taxed, and importations increased. But Congress, failing to see that protection itself was the cause of these disasters, or believing in the maxim "Similia similibus curantur" prescribed another dose of protection. On wool the duty was 4 cents a pound, and 40 per cent, for one year ; then 45 per cent, for one year, and then 50 per cent. On woollens minimums were established of 50 cents, $1, $2.50, and $4, with a duty of 40 per cent, for one year on such arbitrary valua tion, and after that of 45 per cent. If it is possible to exclude foreign goods, and give to domestic manufacturers an absolute mo nopoly, by any form of tariff, it would be supposed that this tariff would have that effect. The practical object of it was to impose upon the four classes of goods such duties as to establish in this country a fixed price, so that no reduction in the cost of the goods abroad could affect the price here. For if goods costing four dollars a yard should be reduced by improvements in manufacture to $2.51, they would still be valued at the custom-house at four dollars, and a duty of $1.80 a yard would be exacted. No improvement in manu facture abroad, it was intended, should ever inure to the benefit of any American consumer by affecting the duty. At the time this extraor dinary tariff was passed we were importing of woollens $8,679,505. Three years after, in 1831, we imported $12,627,229. This increase, it is important to observe, was mainly in those qualities of goods which are not well manufactured from American wool, namely, fine cloths and worsteds. The importation of cloths increased from $4,315,714 to $6,121,442, and the importation of worsteds from $1,446,146 to $3,392,037. Instead of supplying any larger part of the consumption of these articles, the domestic manufacturer actually 144 DOES PROTECTION PROTECT? lost ground as to these, and supplied a smaller proportion, the im portation of such goods being much larger in proportion to popula tion, when this tariff closed, than when it was adopted. Here is illustrated the futility of attempting to force the manufacture into other channels than those to which the supply of American wool directs it. But it is equally important to observe that the importa tion of blankets increased from $624,239 in 1828 to $1,180,478 in 1831. " Blankets can be made wholly of American wool, but its cost has always been too high," said a manufacturer before the com mittee in 1824. Hence some mixture of cheap or foreign wool was useful, but the tariff tried to exclude that wool. Accordingly, the foreign wool came in the form of blankets ! During these four years it does not appear from the most minute records of the manufacture that a single new woollen-mill was established, or that it was extended or improved in any noteworthy respect. If individuals made money, they made it in spite of dis advantages which all felt, not the least of these being the increased cost of woollen goods to the consumer, which tended to check con sumption, the increased cost of iron and its products, and of manu facture as compared with the cost in other countries where it was being constantly reduced. Once more, the consumer was taxed, and the manufacture not developed or extended, and yet the grower was worse off than ever. The price of wool during the years 1829 and 1830 was very low ; in 1830 common sold for 18 cents in July ; and in 1831 for 22-J- cents in May. If the grower was not benefited ; if the manufacture was not developed in any healthy sense ; if the consumer was heavily taxed, and if foreign importations increased from eight to twelve millions, in what sense can this tariff be called successful ? In 1832 a tariff was passed reducing duties on nearly all articles materially, abandoning the minimum principle on woollens, and put-> ting very low duties on cheap woollen cloths, worsteds, flannels, and on ordinary carpets and hosiery only 25 per cent. Meanwhile wool costing less than 8 cents was admitted free, and other wool reduced to 4 cents and 40 per cent, duty ; dye-stuffs were also made free. In the next year Mr. Clay s compromise tariff was adopted, which pro vided for a gradual reduction of all duties, by abating every second year one-tenth of the excess above 20 per cent., until 1841, when one-half of the residue of such excess should be abated. It is impossible to distinguish the effects of this tariff from those of the great ebb and flow of currency induced by the land specula- THE WOOLLEN MANUFACTURE. 145 tion already described. It would be unfair to ascribe the general prosperity of the manufacturer until 1841 altogether to the large re duction of duties, and equally unfair to ascribe the subsequent depres- soin altogether to the continued reduction. The extreme contraction of the currency and the general distress fully account for the prostra tion of the manufacture in 1842, while foreign importations do not, for those were less in either of the years 1840- 42 inclusive, than in the years 1831- 33 inclusive. The aggregate value of woollens im ported for the three years 1831- 33 was nearly thirty-six millions, and the aggregate value imported for the three years 1840- 42 in clusive, when the duties were lowest, was twenty-eight and a third millions. The prostration of this interest at that time cannot, there fore, be ascribed to the effect of foreign competition. It is worthy of note, also, that the imports continued to be almost wholly of qualities of goods not manufactured here with success, namely, worsteds and fine cloths. The importation of blankets, notwith standing the low duty, had fallen to $500,000, and of carpets to about $250,000, and of flannels to $90,289. The manufacture of these articles, especially of carpets and flannels, was so established that only the more costly kinds were imported under any rate of duty, and while the domestic manufacture supplied of carpets as early as 1834 fully 1,147,500 yards, of the qualities for ordinary use, besides great quantities which were made in families, the quantity imported under the reduced duty in 1833 was only 344,173 yards. The average price of all carpets made in this country, in factories, was then about a dollar a yard. The proportion of carpets imported was less in 1842, when this tariff closed, and under the lowest duties, than in 1833, when it began, and when duties were highest, and the same was true of flannels and blankets. But the importation of woollen cloths and worsteds varied with the general prosperity of the country, and was largest in the years 1835 and 1836, when the domestic manufacture of woollens was also most prosperous. These facts confirm the view already taken, that the importation was mainly of such articles as are not produced here ; that the manufacture was aided by the admission of cheap wool free, and the reduction of duty on all wool, and that its subsequent depression was due not to im portations or reduction of duties, but to changes of currency and of the general condition of the country. Tables given in Chapter XXI. show that the prices of woollen goods made with success in this country were greatly reduced under the operation of this tariff. The price of Salisbury 38-inch flannels was 146 DOES PROTECTION PROTECT? reduced from 44 cents in 1835 to 40 cents in 1838, and 33 cents in 1840 ; Lowell carpets were reduced in price from $1.10 in 1835 to 90 cents in 1841 ; linseys were reduced from 28 to 22 cents ; cassimeres from $2 to $1.70 per yard; broadcloths from $4.25 to $4 per yard; and blankets from $5.25 to $4.25 a pair. A further reduction of price followed the return to specie in 1841, caused not only by the depression of business, but by the low price of wool. But, prior to this change, the consumer had been greatly benefited by the reduc tion in the cost of goods ; the wool-grower, in spite of the admission of cheap foreign wool free of duty, had received very high prices for his wool, and the manufacture had advanced with very great rapidity. In Massachusetts the value of woollen goods produced increased 60 per cent, in the five years from 1832 to 1837. The restoration of the currency was followed by a revival of all industry, and, because the protective tariff of 1842 was adopted soon after that event, the tariff has been credited by its advocates with the revival of industry and the restoration of currency itself. For the present purpose, it is essential only to observe that under this tariff, as before, the importation of woollens increased with the in crease of the manufacture here, so that the progress of our industry cannot be ascribed to the exclusion of foreign goods. The increase of importations was frdm $8,375,725 in 1842, to $10,083,819 in 1846, the last year of this tariff, and it was in every quality of goods, as follows : YEAB. Cloths. Worsted. Blankets. Hosiery. 1842 $4,180,875 $2,366,132 $566,233 $375,297 1846 4,488,434 2,658,023 633,745 838,866 YEAB. Yarn. Carpets. Flannels. All other. 1842 $217,611 $242,309 $90,289 $336989 1846 266,330 253,543 156,851 788,027 The importations, in 1845, of cloths, blankets, and carpets, were much higher than in 1846. No statistics are attainable of the quan tity of woollen goods manufactured in these years, but it is known that it increased rapidly after the revival of industry, and that the manufacture of broadcloths was quite generally attempted. The duty on such cloths was 40 per cent., and the duty on wool, costing less than seven cents, was but 5 per cent., while on other wool it was three cents a pound, and 30 per cent. Under these circum stances, the growth of fine wool and the manufacture of fine cloth were undertaken, and in 1844 the finest wools commanded a high price. THE WOOLLEN MANUFACTURE. 147 But these and all other wools thenceforward fell rapidly in price, while the importations of woollen cloths slightly increased. It appears that the American supply of the fine wools was en tirely insufficient, and that the manufacturers depended very largely upon foreign supplies ; and Mr. Randall, in a statement in 1845, said : " Numerous specimens of wool, equalling our choicest Saxon, are in the hands of various individuals throughout the country, which men of well-known standing and veracity allege they obtained of import ers and manufacturers such importers stating that they were from bales of South American wool admitted under the 5 per cent, ad valorem duty, and conceding that large quantities of a similar qual ity were received by them from the same source. It is alleged that some of the smaller manufactories of good cloths receive their princi pal supply in this way." In that same year we imported, of wool, no less than 23,833,050 pounds, and in the next year 16,558,247. Whether this wool was or was not fraudulently admitted, does not affect the inference that its admission under merely nominal duty was the advantage which enabled the manufacturer to extend his ef forts to the finer cloths for which the American wool did not suffice. Convincing evidence that this was in fact the cause of the tem porary success of that branch of the manufacture is afforded by its immediate abandonment in 1847, when the duty on all foreign wools was changed to 30 per cent. Thus this tariff, though called a " free-trade " tariff, was in this particular eminently a protective tariff it excluded the foreign wool upon which the manufacture of fine cloths had depended, and stopped that manufacture so that the com mittee of wool manufacturers and growers say in their memorial to Congress of 1866 : " The manufacturers of fine cloths found it in vain to struggle against foreign wools, who, in addition to cheap interest and cheap labor, had the crowning advantage of free wool. The higher branches of the manufacture were abandoned ; soon every one of the eighteen hundred broadcloth houses in the country ceased work. The branches of the manufacture continued with activity were those like flannels, which were supplied by the common wool of this country so superior in its spinning qualities as in itself to afford an advantage over the foreign manufacturer. There was no longer a demand for any but common wools. The Saxon wool-hus bandry ceased with the manufacture of fine cloths which had called it into existence." It seems to be very satisfactorily established by this concurrent testimony of both parties interested, the growers and manufacturers, that the increased duty on foreign wools at this 11 148 DOES PROTECTION PROTECT? point destroyed the manufacture of fine cloths, and with it the de mand for and culture of the Saxon wools. Returning to the tariff of 1842, it appears that in other branches the manufacture made no such progress as to supply a better market for American wool at its close than had existed in the year of pros tration with which it commenced, and that the price of goods was not reduced in proportion to the reduction in the cost of wool. Northampton broadcloth sold for $3 a yard without change for four years, and some other qualities of broadcloth were increased in price ; satinet was increased in price from 50 to 65 cents ; Lowell carpets were raised a little ; flannels were slightly higher in 1846 than in 1843, and blankets were raised 50 cents a pair ; yet all grades of wool were cheaper in the last year of this tariff than in its first. The tables already mentioned (Chapter XXI.) show that the consumer and the wool-grower were taxed to support the manufacturer, and that after the repeal of this tariff the price of wool materially im proved, while the cost of goods to the consumer was lessened. Notwithstanding the lamentable effect of the tariff of 1846 upon the broadcloth manufacture an effect due, as has been stated, to a protective feature in a tariff generally non-protective in character the manufacture of those qualities of woollen goods for which the American wool suffices so increased that a larger quantity of that wool was used at higher prices than it had obtained since the infla tion in 1837. The tariff of 1857 was marked by an entirely different policy. The duties on manufactured goods were reduced to 24 per cent., and all wool costing 18 cents or less was admitted free, other wool bear ing only a 24 per cent. duty. Under the first provision was admitted nearly every kind of wool upon which our manufacture had depended. The tariff went into effect, however, at a time when industry was much disordered, and the panic which occurred in that year deferred for some months the improvement, but the subsequent progress was very rapid. So great, indeed, was the demand for wools of all kinds, that the prices of all grades of American rose higher than ever be fore since the War of 1812, although it was believed that fully 95,000,000 Ibs. of foreign wool were imported within the three years ; and the census of 1869 shows that about 98,379,785 Ibs. of wool were consumed in the manufactures, of which about $51,516,959 were of domestic growth. In that year the product of this manufacture was in value about eighty millions, and consisted of 124,897,862 yards of cloth, THE WOOLLEN MANUFACTURE. 149 6,401,206 Ibs. of yarn, 296,874 pairs of blankets, 616,400 shawls. In value the product had increased 42 per cent, since 1850, and a large part of that increase had been effected within the years 1858- 60, under the lowest duties on both wool and woollens. The product in cloth was nearly four yards to each inhabitant, and in value $1.97 per capita, ; but the quantity of cloth exceeded the quantity manu factured in 1850 by 42,691,210 yards, or 52 per cent., showing that while quantity and value had both increased faster than population, the cost of a given quantity had been reduced. Under this tariff, therefore, the manufacture grew with great rapidity, the wool- grower received the highest prices for his wool, and the consumer had cheaper cloth. But this was during the period of the lowest duties, both on wool and woollens, ever imposed since 1824. And, though no official records show the quantity of goods manufactured in the whole country, except in years of census, the State census of Massachusetts discloses the following facts, as to the value of the product of woollen manufacture in that State, at different periods : 1832 $6,500,000 1837 10,399,807 Increase, 60 per cent. 1845 8,877,478 Decrease, 1850 1 2,781,514 Increase, 44 per cent. 1855 12,105,514 Decrease, 1860 19,655,787 Increase, 62 per cent. As Massachusetts is by far the larger producer of woollens, the value of the goods produced made in that State being nearly one- third of the value made in the whole country, and as there is no reason to suppose that, in either of these periods, the manufacture increased or decreased except under the influence of causes affecting in like manner other wool-manufacturing States, these figures give quite conclusive proof, first, of the large increase in the manufac ture after the abandonment of the protective system in 1832 the increase having been 60 per cent, in five years ; second, of the great depression caused by the disorders of currency ; third, of the great increase in the manufacture as a whole, after the abandonment of the protective system in 1846, notwithstanding the defeat of the broadcloth experiment already described ; fourth, of a decrease in the manufacture from 1850 to 1855, caused, apparently, by the press ure of competition from foreign mills enjoying cheap wool, while our mills were forced to pay 30 per cent, duty on their foreign wool a competition the extent of which will* be seen from the table of im ports of woollens, which shows that over eighty-five millions in value 150 DOES PROTECTION PROTECT? were imported in the three years ending 1 1855 and finally, of the very rapid increase from 1855 to 1860, which was more than 62 per cent. Of this increase nearly the whole occurred after the removal of duty from wool of 18 cents a pound or less, in 1857. In view of these facts, it must be admitted that the greatest increase ever at tained in the woollen manufacture was during the two periods when a large share of foreign wool was admitted free, while duties on woollen goods were low or rapidly reduced. Of the two periods, that increase was largest in the period when duties were lowest. These are the conclusions compelled by a review of the history of this manufacture prior to the war. Since 1860 its growth has been greatly affected, first favorably and then unfavorably, by the changes in the production of cotton goods. The enormous increase prior to 1865 was by no means due entirely to the admission of foreign wool at low rates, on the one hand ; nor on the other to the high duties on imports. Its great depression since 1865 has been in part caused by the revival of the cotton manufacture, but still more by the duties imposed on foreign wool. Very potent in its influence was the repeal of the reciprocity treaty. By that change, the worsted manufacture was remarkably affected, and the cost of making carpets greatly increased. It has been stated that in this country no wool is grown from which worsteds are made. In 1866 the wool-manufacturers reported that " the American production of worsted combing wool is not suf ficient to supply one mill" say three hundred thousand pounds. At that time it was estimated that the quantity of combing wool consumed in the worsted-mills was four million pounds. This wool, grown in Canada far more largely than it has there been consumed, when admitted free, enabled us to build up a branch of manufacture not only important in itself, but exceedingly beneficial to the Ameri can wool-grower, because it increased the consumption of our own qualities of wool. But the tariff of 1864 subjected this wool, after the reciprocity ceased, to a duty of 37 to 40 per cent. The effect upon our manufacture may easily be imagined it was entirely pros trated. The manufacturers were not wrong in saying, in January, 1866, " A duty on Canada wools would crush an industry which has already assumed a truly national importance," as the importation of worsteds worth about fourteen millions in that year indicated. In the manufacture of Brussels carpets, also, it was then made clear that the duty was a serious disadvantage. But Congress, instead of giving to the manufacturer free wool, at- THE WOOLLEN MANUFACTURE. 151 tempted to compensate for the higher cost of the material by higher duties on the product, and the result is before us in the depression now existing. Of the effect of the tariff of 1867, two witnesses may testify. The Providence Journal, edited by Senator Anthony, of Rhode Island, an advocate of the protective system, speaks of some mestiza wool thus : No American wool has ever been found which will make so nice a finish, or felt so well. The tariff at the time this wool was purchased was six cents a pound. At the revision of the tariff a duty was placed upon it of 10 cents per pound in gold, and 13 per cent, on the valuation. This makes from 11 to 12 cents per pound duty on the wool in the grease, and is absolutely prohibitive. In consequence of this duty, the price of wool has been so brought down in Europe, that the manufactur ers in Germany, England, and France, can obtain it at a much less rate than before we were deprived of it. In fact, much of it can be bought by them for the same price per pound that would be paid by us in duties. This enables them to send into the United States their fine goods, which only pay a duty to our government of 60 per cent., whereas the duty paid to this government on much of the same kind of wool amounts to from 100 to 120 per cent., leaving our manufacturers from 40 to 50 per cent, worse off than they would be under a free-trade system. To the same purport, but more explicitly, writes Mr. Edward Harris, one of the largest woollen manufacturers in New England : This (the duty) has put down the price of fine wool in Europe so low, that it enables their manufacturers to produce their fine goods so low that they can and will eventually drive us out of the market. It is worse to the American manufac turers than free trade, by 50 to 60 per cent., while the poor wool-grower is killing off his fine-wool sheep. ... I venture to suggest that we have a tariff simply for rev enue, that the reciprocity treaty be renewed, and that all duties on the raw mate rial be repealed. If manufacturers themselves are driven to such conclusions and confessions, must it not be admitted that the system which has taxed the consumer heavily has rendered no permanent service to this branch of industry ? But it will be said that these admitted evils spring only from ill-adjustment of the protective tariff, and can be remedied by further legislation. So it was reasoned in 1866, when the wool-growers and manufacturers met in convention, and selected committees of their ablest men to frame a tariff. So faithfully did Congress echo their demands in legislation, that it might, without exaggeration, be said that in this instance the wool interest itself was permitted to make laws for the rest of the country, Congress having abdicated in its favor. If the very men who most thoroughly understand the wants and circumstances of this interest have found it impossible to frame a law with better results to themselves than 152 DOES PROTECTION PROTECT? those now witnessed, may we not begin to doubt the possibility of improving upon natural laws by finite. wisdom? Is there not, in short, something in protection interference with those natural laws which defeats itself? As to the wool manufacture, it is plain that duties for its benefit prompt the grower to demand like favors. Say the committees, in their joint memorial of 1866 : " The obvious disadvantage to the manufacturer of the policy of the tariff of 1857 was its inherent in stability. The manufacturer, investing large capital in structures and machinery which cannot be diverted to other purposes, and which may not give returns until years of operation, demands above all things stability of legislation. This he could never expect under a system which made the agricultural interest secondary to his." Is not that the inevitable result of any and every policy which taxes the agricultural interest for the benefit of the manufacturing ? Is there not in every protective tariff this obvious and fatal disadvan tage "inherent instability?" The more thoroughly it discrimi nates in favor of an interest, the greater the probability of speedy change. Whoever will glance at the record of changes of the tariff, already given, will see reason to believe that tariffs are short-lived in proportion as they are " protective." The tariff of 1857, though the lowest revenue tariff ever adopted since 1816, was regarded by the wool-grower as a discriminating or protective tariff in favor of the manufacturer. Statistics have shown that under it the manufac ture did increase more rapidly than under any other form of duty. But its " inherent instability " was obvious because it was supposed to discriminate in favor of the manufacture, although in fact it gave the wool-grower higher prices for his wool than he had ever received since " protection " began. It must at least be admitted that the system which succeeded it did not display any inherent stability, for we have had twelve changes in eight years. Is it not time for the manufacturer to seriously consider whether low duties for revenue, raw materials free, and stability, will not confer greater benefits upon him in the end than high duties for protection, with producers of raw materials also demanding protection, and twelve tariffs in eight years ? THE WOOLLEX MANUFACTURE. 153 NO. 1. MR. GREELEY S TABLE. The prices of the most important woollen fabrics ten years ago, when we had comparative free trade in wool and in woollens, and now, are as follows : FABRICS. Price in 1859. Price in 1869.* Currency price, 1869. Flannels, per yard A. & T. white $0 18 $0 16 $0 21 H. A F scarlet 26 23 30 J R F twilled scarlet 30 29 3~3 B. twilled scarlet 26 25 32# Double weight scarlet twilled 27 X 30% 40 F. & C 36 34> 44^ Talbot R% plain scarlet 26 25 3-2^ G. M & Co twilled scarlet 23 20% 27 E. S 25 23 30 NAM 25 23 30 Ballam bale 4-4 white No 1 75 65^ 85 Ballam bale 4-4 white, No. 2 60 53X 70 Ballam bale 4-4 white No. 3 45 403^ 52j Ballam bale 4-4 white No 4 40 34/ 45 Ballam bale 4-4 white No 5 35 323 42^ Blankets, per pair Holland 10-4 all wool 3 50 4 23 5 50 Holland 11-4 all wool 5 00 5 38 7 00 Cocheco 11-4, ex super 6 00 6 15 8 00 Cocheco 12-4 ex super 7 50 7 30 9 50 Cumberland 10-4 3 00 3 46 4 50 Cumberland 4 00 4 23 5 50 Rochdale 10-4 super extra super .... 3 50 3 27 4 25 Rochdale 11-4 super extra super 4 50 4 03 5 25 Rochdale 12-4, super, extra super 5 50 4 80 6 25 Rochdale 10-4 premium 4 50 4 23 5 50 Rochdale 11-4, premium 5 50 5 00 6 50 Rochdale 12-4, premium 6 50 5 77 7 50 Cassimeres, per yard Broadbrook Co. s fancy Cassimeres, 14 oz Hamilton Woollen Co. s (1860) per yard Shawls Middlesex Co s 1 62^! 75 66 T 9 & 7 00 1 34@1 44 52% 5 38 1 75 1 87^ 68^% 7 00 De Laines Hamilton Woollen Co. 1 s (1860) Salisbury Mills Boys Checks, per vard (1860). . . Salisbury Mills Eugenie Cloths (1860) 16 T 9 <?o 58% 94 13 45# 69 lT$b B9X 903 Salisbury Mills Silk Codrington (I860) Crossly Co. s, Conn., Tapestry Carpet The imported article sold in 1859 for 95c. 1 52% S* 1 54% 1 25 NO. 2. -WOOLLEN GOODS. The following table, prepared at the request of Commissioner D. A. Wells, by the house of A. T. Stewart & Co., of New York, shows the selling price of certain leading varieties of woollen goods in 1860 and 1869, respectively : FABRICS. 1860. 1869. Cadet Cloths, Government standard, per yard Harris Cassimeres, 14 oz. per yard $2 75 1 37^(3)1 50 $3 25 1 75(^2 00 Cotton Warp Cloths, 14 oz., per yard 1 00 @,l 25 1 75 All-wool Cloths. 14 oz., per yard 1 50 2 75 Middlesex Sackings, per yard .... . . 1 10 1 25 Middlesex Doeskins, per yard. . . 1 05 1 15 Middlesex Shawls, each 7 00 7 00 Middlesex Beavers, per yard .... 3 75 4 25 Middlesex Opera Flannels, per yard 47) 50 Broadbrook Cassimeres, per yard 1 62V@1 75 1 75 Broadbrook Beavers, per yard . . . 2 75 3 00 Spring Cassimeres, 8 to 9 oz., per yard 12V@1 25 1 25@1 37* Glenham Repellants, per yard 10 1 15 1 20 Glenliam Sackings, per yard 05 1 15 Swift River Fancies, 11 to 12 oz., per yard 90 1 00@1 10 Rovalston Cassimeres, per yard, average 073 1 25 Fitchburg Cassimeres, per yard, " 07* 1 25 * Equivalent in gold (gold at 130). October average. 154 DOES PROTECTION PROTECT? NO. 3. FRENCH GOODS. Importing Prices. Report 1869, p. 104. FABRICS. 1859. 1866. 1869. French Merinos all worsted . < Francs. 2 62 3 03 Francs. 2 40 3 00 Francs. 1 90 2 00 Dyed Mousseline de Laines, all worsted, j French dyed Poplins, all worsted ] 3 22 1 13 1 22 3 15 98 1 06 1 75 240 79 85 1 19 2 15 1 69 IMPORTS OF WOOL AND WOOLLENS. YEAR. UNMANUFACTURED. Carpets. Other ManuPs. Value ManuPs. Quantity. Value. 1841 15,006,410 11,420,958 3,517,100 14,008,000 2,3,833,040 16.558,247 8^60,109 11,341,429 17,869.022 18,669,794 32,548,461 18,341,298 21.599.079 20,200,110 18,534,415 14,737,393 16,502,060 j Estimated j 95,000,000 36,000,000 43,571,026 73,897,807 90.396,104 43,858,154 67,917,031 33,482,155 24,474,307 $11.001.939 8,375,725 2,472,154 9,475,702 10,666,176 10,083,850 10,998,933 15,240,883 13,704.606 17,151,509 19,507.309 17,573.694 27,621,911 32,382,594 24,404.149 31,961,793 31,286.118 26,486,091 - 33,521,956 37,936,945 28,261,039 14,884.394 20,411,625 32,139,336 20,347,563 57,115,901 45,776,475 32,460,884 1842 1843 1844 1845 1846 $1,134,226 555,822 857,034 1,177.347 1,681,691 3,833.157 1,930,711 2,669,718 2,822,185 2,072,139 1,665,064 2,125.744 4,022,6135 4,444,954 4,842,152 $253,543 289,881 643,187 493,058 790,604 996,781 730,967 1,217,279 2,268,815 1,506,577 2,212,318 2,181,290 1,542,600 2,200,164 2,542,523 $9,830,307 10,709.052 14,597,696 13.211,548 16.360,905 18,510,528 16,842,727 26,404,632 30,113,779 22,897,572 29,749,475 29.104.828 24,943,491 31,321,792 35,394,422 1847 1848 1849 1850 1851 1852 1853 1854 1855 1856 1857 1858 1859 I860 1861 1862 1863 1864 1865. 1866 . 10,068,533 5,565,279 3,868,137 2,854,097 2,766 ,29i 54,261,804 29,694,593 1867 1868 f r &&& THE WOOLLEN MANUFACTURE. 155 156 DOES PROTECTION PROTECT? A letter from Mr. Edward Harris, the " veteran, eminent, and successful manufacturer," as Mr. Greeley publicly states, has recent ly appeared in the Tribune^ and deserves notice. He says : I ain a woollen and cotton manufacturer, and use annually a large amount of coal for producing motive-power, and am otherwise employing quite a large number of persons in skilled labor. I have, and can now use, bituminous coal from the British possessions ; but I am met with a duty of $1.25 in gold per ton, which is equal in currency to $1.50 per ton. There is no escaping this tax ; and, it being so high, I can use but very little of this coal ; consequently, I am obliged to purchase my coal from the Pennsylvania mines, and pay not only such a price as the miners may charge, but also, in addition, such a price as those who transport the coal to me may charge ; which sums, added together, make it very high. Thus you can see that, so far as the item of coal is concerned which is a very heavy one I cannot compete with those establishments situated near the coal fields. Thus a very heavy burden is legislated not only upon me, but upon a vast and varied interest, comprising a large section of our country, and giving employment to hundreds of thousands of our citizens. And for whose benefit is this duty imposed ? Not for the poor men who work in the mines ; for demand and supply fix their wages, and those who work the mines are importing laborers daily at a small expense, and without paying a duty on the hands so imported. And even, for argument, if it did give these poor labor ers a little more pay it is nothing in comparison to the detriment of the many who are benefited by the use of the coal. I have only alluded to the use of coal for producing motive-power. Think of the thousands of poor families which suffer for the want of fuel to keep soul and body together. The reasons for a repeal of this duty are numerous, and the benefits of continuing the duty are not apparent. Now for the duty on fine wool. I will here state, without fear of contradiction, that fine nap goods cannot be made to advantage in this country without the use of foreign fine wools, which can be mixed to advantage with our American wools, and produce an article which will favorably compare with foreign goods. But here I am met with a duty of over 100 per cent, on this article, as I can prove to you by the Liverpool prices current. I quote from one published by John L. Bowes & Brother for the month of November, 1869 : Buenos Ayres No. 1 wool, average shrinkage 70 to 72 per cent. ; 5d. per pound. Call this, reduced to gold, 1 1 cents per pound. The duty on this wool is specific, 10 cents per pound, and 11 per cent., making a little over 100 per cent, duty; whereas the duty on fine woollen goods will not ex ceed 45 or 50 per cent, at most. This leaves a net balance of at least 50 per cent, against the American manufacturer, so far as the wool is concerned, which is much the heaviest item hi the cost of the goods. To simplify the matter, it is 50 per cent, worse than free trade to the manufac turer. Now, I ask, how can any American grower of fine wools receive any advantage whatever from such a tariff, when, instead of the fine wools being brought to this country, we receive the fine goods smuggled and brought into this country in every direction ? THE WOOL-GROWER. 157 This tariff has shut us out of the foreign markets for fine wool, and consequently reduced the price so low to the foreign manufacturers, and has given increased ac tivity to their business, and enabled them to raise the price of their labor. In fact, it has acted as a bounty on smuggling ; and, if continued, will ere long transfer the manufacture of fine goods from this country to foreign countries entirely. As an instance of the bad effects of this tariff upon the fine wool-growers of this country, we see their sheep disappearing in every direction. I believe, if the duty was taken off from fine wool, that the price of that article would advance in Europe to such an extent that the manufacturers there would not be able to produce fine goods at such extreme low prices as to enable them to send the same into this country, and destroy our business in spite of any tariff which can be enforced. If our wool-growers, by this unjust tariff on scoured wool of 32 cents per pound and 11 per centum in gold, succeed in keeping the fine foreign wool out of this country, they cannot keep out the fine goods of foreign manufacture ; and no American manufacturer can afford to pay them any higher price for their wool than these fine foreign goods will warrant, as they will govern the price of American goods. I will only add, I am of the opinion that the best minds of New England are coming to these conclusions. With great respect, I remain your friend, EDWARD HARRIS, Woonsocket, R. Z, January 19, 1870. CHAPTER XII. THE WOOL-GROWER. Do protective tariffs benefit the wool-grower ? The question is one of fact, easily answered by statistics of the most reliable charac ter. At the close of this chapter will be found tables giving the price of wool of different qualities at New York, according to the offi cial report of the Treasury Department of 1863, and at Boston, ac cording to Mr. Livermore. The diagram indicates by two lines the prices of merino and common fleece in the New York market, with every monthly variation since 1824 until the close of 1861, when variations of currency began to affect the price. In 1824 the first duty on wool was imposed 15 per cent, on wool worth 10 cents or less, and on other wool 20 per cent, until 1826, and afterward 30 per cent. As a consequence, in 1825 and the ear lier half of 1826 the price was slightly reduced and afterward fell rap idly. The loss under that tariff was in New York 10 cents for com mon, 15 to 20 for full-blood merino, and 5 to 10 cents for pulled. 158 DOES PROTECTION PROTECT? According to Mr. Livermore s tables, the prices at Boston declined 1 cent for long, 4 cents for middle, and 14 cents for fine wool. What is the explanation ? The manufacture, shut out for the first time from cheap supply of foreign wool, was depressed and unable to consume as largely as before. The first attempt to benefit the grower having resulted thus un favorably, on the 19th of May, 1828, duties were imposed of 4 cents a pound and 40 per cent, until June 30, 1829, 45 per cent, until June 30, 1830, afterward 4 cents and 50 per cent. At once the manufacture was prostrated, and the prices of all grades fell still lower. The pro duction of wool very readily adapts itself to the demand, and with production reduced, the reviving manufacture gave higher prices in 1831 and 1832. But in 1832, after eight years of protection, the prices were still lower than they were when it began, thus : Common. Merino. Pulled. 1825 30-38 50-62 25-44 1832 25-30 40-45 37-40 (No. 1.) We have seen that the consumer was taxed. We have seen that the manufacturer was worse off at the end than at the beginning of this period of eight years. We now see that protection deprived the grower of a part of the value of his wool. In 1832 wool worth 8 cents a pound was admitted free, and the duty on more costly wool was reduced to 4 cents and 40 per cent., with gradual reduction af terward. It is interesting to note how the prices of American wool rose under this relaxation of duties. We have seen that the manufac ture in Massachusetts increased 60 per cent in five years. The ta bles show that the prices of all grades increased both in Boston and New York, according to the official record, thus : Common. Merino. Pulled. 1832 25-30 40-45 37-40 1836 40-50 50-68 52-58 Thus the increase of price kept pace with the increase of the manu facture. And in like manner, when the manufacture was prostrated during the disorder of currency, the price of wool fell very low. Yet the average for this period is higher than that of the protective pe riod which preceded it. In 1842 another protective period commenced, with duties of 5 per cent, on wool costing 7 cents or less, and on other wool 3 cents and 30 per cent. It is curious to observe how the momentary improve ment in prices in 1844 was followed by a decrease to as low a point as had ever been reached. Growers expected great profits, evidently, THE WOOL-GROWER. 159 and held their wool for a few months, hoping to realize them. They realized the loss which awaits everybody who tries to mend natural laws by human legislation. The American wool was rejected while the manufacturer obtained from South America wool as fine " as our choicest Saxon," says Mr. Randall ; " no American wool has ever been found which will make so fine a finish," says the Providence Journal necessary for the success of the broadcloth experiment. The result of this tariff to the grower was : NEW YORK. BOSTON. Common. Merino. Pulled. Fine. Middle. Long. 1842.... 19 29 27 42 37 30 1846.... 20$ 27$ 22* 40 33 27 Thus the closing year of the great protective tariff of 1842 gave to the wool-grower lower prices than he received in the extreme " hard times " in 1842, and the average for the whole period was lower than that of any other, protective or non-protective, in our his tory. With 1847 went into operation the " destructive British free- trade tariff," as Mr. Carey calls it a level, 30 per cent, ad-valorem tariff, which remained unchanged until 1857. This raided the duty on wools costing less than 7 cents, but removed from those costing more than 7 cents a duty of 3 cents a pound. The broadcloth manu facture stopped, but people began to work up American wool with profit to the grower. The statistics have exhibited the increase of the manufacture from 1845 to 1850. The following figures show how the grower fared : NEW YORK. BOSTON. Common. Merino. Pnlled. Fine. Middle. Long. 1846 20$ 27$ 22$ 40 33 27 1850 33$ 40$ 34$ 45 38 32 Nor was this an increase for a single year only ; for, though the manufacture did not greatly increase after this time until 1857, it continued to consume American wool at these rates or higher. Thus the prices of 1850 and of 1856 were : NEW YORK. BOSTON. Common. Merino. Pulled. Fine. Middle. Long. 1850 33$ 40$ 34$ . 45 38 32 1856 32 42$ 32$ 57 48 41 It is not improbable that the high price of the material* as com pared with reduced prices in other countries, did much to cause that 160 DOES PROTECTION PROTECT? slight decrease of the manufacture which has been observed, and the rapid growth of the cotton manufacture contributed to the same result. The only true remedy for this evil was to give a free supply of cheap foreign wool to mix with the American in use, and that remedy Con gress applied in 1857, by a tariff admitting free all wool costing 18 cents a pound or less, which Mr. Stanton, of Ohio, denounced as " a blow at the wool-grower." How severe a blow, let the prices prove ! The record shows that the prices of common and merino were higher during the whole of that period, 1857- 60, inclusive, except during the panic, than they were before the change of duty. Taking the New York record, because monthly prices are given, the average price of common wool was : 1853. 1854. 1855. 1856. Average. 41 29* 34* 1857. 1858. 1859. 1860. 37 30 38 36| Average 35* In spite of the reduced price during the panic in 1858, the aver age under this tariff was higher than before. Nor was this true at New York only, but in Western markets. The Chicago record, in spite of the very high price of 1853, gives the following average of prices for August: 1853. 1854. 1855. 1856. Average. 40 25 31* 28* 31 1857. 1858. 1859. 1860. 29* 33* 36 Average 34 Returning to the New York table, it is interesting to compare the average prices for different periods. Common. Merino. Pulled. 1825- 28 28* 42| 27 1829- 32 26 44f 38 1833- 41 34 49 42 1842- 46 23 82 27 1847- 56 32 89 31 1857- 60 35* 44* 28* It must now be conce ded, since facts indisputably prove, that under the system of protective duties the price of wool has been lower th an under non-protective tariffs ; that the American wool has risen in price when the manufacture has been encouraged by the free THE WOOL-GROWER. 161 admission of foreign wools, or by low duties on them, coupled with a revenue duty only on the woollen goods ; and that it has been de pressed in price whenever the manufacture has been retarded by high duties on foreign wool, or pushed by protection to attempt branches of the manufacture not naturally sustained by our own quality of wool. But to the wool-grower there is another considera tion of especial importance. The essential thing is not that he shall get high prices in a single year; still less that he shall see high quotations for a single month ; he needs, and must have, to make the culture of sheep profitable, a price remaining steadily at or above a certain limit, and never falling below it in any year so continuously that he cannot dispose of his clip of wool for that year at fair rates. The diagram will show at a glance when such periods of sustained prices have occurred. The first was from January, 1833, to Febru ary, 1840, eight years, during which common fleece never fell below 32 cents, except for a month in 1833, the winter of 1834, and a part of 1835. In any one of these eight consecutive years, the grower could obtain at least 32 cents for his common fleece, and in the same years he could obtain 49 cents for merino, though only in the last month of 1838. But this was a period of " free trade," during which cheap foreign wool was admitted free, and all duties were reduced. The next period of sustained high prices was from 1849 to 1861, thir teen years ; and in any one of these years the grower could have sold common fleece for 30 cents, and the price fell below that mark only in parts of four years. Merino, also, never fell below 36 cents dur ing that period, and in every year after 1849 the grower could have obtained at least 40 cents. But this was also a period of " free trade," and during the closing years wool worth less than 18 cents was admitted free. During the thirty-six years which these tables cover, no other periods of sustained prices occurred ; and these facts, with the averages already given, prove that low duties on foreign wool, and free admission of cheap foreign wool, have secured higher and more steady prices to the American grower than any other form of tariff tried during that period. But wool is consumed by manufacturing, and the manufacturer can pay more when prosperous than when embarrassed. Do not these facts prove that the wool manufacture possessed greater abil ity to consume wool at fair prices, under low and non-protective duties, than under protection ? The domestic supply of wool has not controlled the price, for this country has never produced as much as it has consumed ; the tendency has therefore been at all times to 162 DOES PROTECTION PROTECT? secure to the grower as high prices as the manufacturer could afford to pay. When he is able to pay 30 cents for common, as he was in the periods 1833- 40, and 1849- 61, then the farmer asks and ob tains it ; but when he is hot able to consume wool profitably at that price, as he was not in the protective periods, 1824- 32 and 1843- 46, then the farmer has to accept less. The facts prove, then, that the manufacturers of wool in this country have been able to consume wool at the best prices when they have been least protected ! To those who still believe that protection must protect, the propo sition will be somewhat startling. But it accords precisely with the incidents already observed in the history of the manufacture, and especially with the records of foreign importations. When high duties deprive the manufacturer of a variety of cheap foreign wools, he is placed at a fatal disadvantage as compared with manufacturers of other countries. Forced to use American wool exclusively, he must abandon the making of articles which can be most profitably made by mixture of wools, or must see himself undersold by foreign goods. When high tariffs prompt manufacturers to attempt work in which countries with free wool have the greatest advantage, they tempt them with delusive hopes. The foreign competition is shut out only for a short time. Soon the flood of foreign goods rushes in again, and the capitalist, who has been tempted to build on a quick sand, sinks. It remains to consider the effect of recent tariffs. Protective duties were imposed in 1861 of 5 per cent, on wool worth 18 cents a pound or less, 3 cents a pound on wool worth 24 cents to 18 cents, and 9 cents a pound on wool worth over 24 cents. Under the act of 1865, wool worth 12J cents a pound or less bore a duty of 3 cents a pound. Under the act of 1866, the same wool was, by additional charges, held to have cost over 12 cents a pound. Under the act of 1867, the duties imposed were, on clothing or combing wools, value 32 cents per pound or less, 10 cents a pound and 11 per cent, ad valorem ; on such wools of higher price, 12 cents a pound and 10 per cent. ; on carpet wools, costing 12 cents a pound or less, 3 cents a pound, and costing over 12 cents, a duty of 6 cents a pound. What effect have these extraordinary duties had upon the prices of American and foreign wool ? It is admitted by all that the price of American wool is lower than it was in 1860. Mr. Greeley states the fact as a proof " that protection inevitably tends, by stimulating home production, to a reduction of price," but neglects to state that this same protection, within the very year in which his essays were THE WOOL-GROWER. 163 written, instead of " stimulating home production," actually caused a reduction of forty millions of pounds in the clip ; caused no less than four million sheep to be slaughtered, according to one state ment of the Agricultural Bureau,* and the number actually killed must have been still greater ; and, in spite of this greatly-reduced production, also caused prices of wool to fall even lower than the ruinous rates of 1868. These facts, which would, indeed, have sadly marred the beauty of his theory, Mr. Greeley remembered to forget In a table, at the close of this chapter, will be found prices of different grades of wool at New York, October 31st, in 1860, and since; but the price of wool and the rate of gold have quite recently changed. The prices, October 31, 1860, and December 25, 1869, gold then selling at 120, compare thus 1860. 1869. 1869. Gold. Currency. Gold. Saxony Fleece. Full-blood Merino 54-58 48-52 65-60 47-53 46 -50 39 -44 lr and 40-46 46-50 38 -42 Extra Pulled 42-46 39-45 324-37* Superfine Pulled 37-40 42-46 35 -38 No. 1 Pulled 28-30 30-33 25 -27^ California, unwashed. . . . 24-32 26-30 22 -25 Every grade of American wool is selling at a price considerably lower in gold, and scarcely higher in currency, than it commanded at the close of the long free-trade period. The loss has been eight cents a pound on Saxony, eight and a half cents on blood merino, ten cents a pound on extra pulled, and about five cents on California wool. Inspection of the table referred to will show that meanwhile foreign goods have been somewhat increased in price in this country, in spite of the very great decrease in price elsewhere. African un washed sold in New York for 9-18 cents, and washed from 16-28 cents, in 1860. African unwashed now sells for 16-19, and Cape of Good Hope unwashed for 33-34 cents. But the price at the place of export has decreased from 18 to 11 cents, and the foreign manu facturers have the benefit of that advantage, while ours do not. Mes- tiza then sold for 16-25 cents in New York, and it now sells for 20-30 * In another statement (March and April report, 1869) the decrease since 1866 is declared to be " not less than 20 per cent.," which would imply a slaughter of at least eight millions. 12 164 DOES PROTECTION PROTECT? cents, but the cost to the foreign manufacturer has declined so greatly that good qualities are bought in England for sixpence a pound just about the sum which our manufacturer would have to pay in duties alone. Smyrna unwashed sold, in 1860, in New York, for 11-18 cents, and washed for 22-28, but the same qualities now cost 20-23 cents and 33-35 cents. These facts show I. That, in the manufacture of any goods requiring foreign or a mixture of foreign wool, the foreign manufacturer has an advan tage absolutely fatal to our industry. II. That, in the manufacture of goods from American wool alone, the manufacturer lives only by depressing the price of American wool lower than was paid in 1860, under " free trade." Paying eight to ten cents a pound less for wool than in 1860, the manufacturer ought to be able to make a yard of cloth eighteen to twenty-two cents cheaper ; but he does not and cannot. The foreign manufacturer, with wool still lower, can and does make cheaper cloth. Hence, our mills meet a competition almost as great as they did in 1860 ; the people have to pay twice as much for their clothes as they should; and the unhappy, much-protected wool- grower slaughters his sheep. He has been plundered doubly : ten cents a pound has been taken from the price of his wool, and twenty cents a yard has not been taken from the price of his cloth. Yet there are farmers who meet in convention and resolve that the duty on wool ought not to be removed ! Do not these men show less good sense than the sheep whose wool they clip ? For the sheep never insist upon being shorn, and never solemnly resolve that they like it. In this country we have never yet produced either the quantity or the variety of wool needed to sustain a vigorous manufacture, and the ability of the manufacturer to consume American wool at fair prices depends upon a free choice and ample supply of cheap foreign wool. Those who advocate protection to the wool-grower maintain that it will cause the growth of other needed qualities. But it is well known that the effort has been entirely unsuccessful ; that the increase in production has been almost exclusively in those qualities which we already produce quite as largely as they can be consumed. The reason is plain : the farmer, rightly or wrongly, believes that the growth of those qualities is the most profitable, and he persists, and will persist, as long as duties encourage him to do so, in growing sheep for the wool alone, and in striving for weight instead of quality of fleece. If a removal of all duties would make it no longer profit- THE WOOL-GROWER. 165 able in Eastern States to grow sheep, except for wool and mutton, the culture of breeds such as those which sustain the manufactures of England, France, and Germany, might soon be generally under taken in the States where land is costly, and where proximity to markets secures a fair price for flesh and lambs. But high duties and hopes of profit only encourage the farmer to multiply his flocks of the American merino. Tariffs do not induce men to grow rye on land which will produce wheat in equal quantity. Neither tariffs on wool nor appeals from manufacturers will persuade the farmer to grow fleeces weighing three pounds as long as the duties promise him a profit on fleece and yolk weighing from seven ,to twenty pounds. Why should we encourage, at public expense, the growing of sheep in Eastern States for the wool alone ? Can it be that this culture is the most useful employment of land as costly and labor as dear as ours ? We have in Texas, New Mexico, and California, lands less valuable, and peculiarly adapted to the sheep-culture, and thither, if no artificial system prevented, the growing of sheep, for wool only, would naturally be transferred, while the English breeds of sheep would be found in well-settled States, and the manufacture would have a solid footing. Is it indeed desirable for a great and well-settled country to go back as far as possible toward a patriar chal &>rm of industry ? Ought the country to pay men for employ ing costly land and costly labor in such a fashion ? To " protect American industry," must we employ it as nearly as possible after the methods of the South American or African pampas ? We are simply trying to prevent a natural progress from semi-barbarism to the highest civilization ; trying to prevent the growing of sheep in Texas and New Mexico, where it will always be profitable, and to force in New England, New York, and Ohio, a growth of sheep for wool only. Whatever the purpose, eight years of protection has only induced an excessive development of a culture which, in many localities, is a sheer waste of land and labor. Nature frowns upon all attempts to arrest the progress of mankind.- Disaster after dis aster has driven the farmer to Congress for more aid, which, when granted, has only proved a new Pandora s box of evils. . Meanwhile, he has been taught to rely much upon Congress, and little upon common-sense. Such lessons have to be unlearned, and experience is a severe teacher. In brief, the protection of wool and woollen manufactures has never enabled us to shut out any important part of foreign importa- 166 DOES PROTECTION PROTECT? tions, but has retarded natural growth in the working of American and foreign wools. It has never caused the growth of new and needed varieties of wool, but has only hindered a natural adaptation of sheep-culture to the condition and needs of the country. More than once it has tempted the capitalist into ruinous undertakings, and the grower into a waste of land and labor. It has taxed the people many millions, has taken money from the farmer s pocket, and has deprived both grower and manufacturer of that measure of solid prosperity which, under low duties and with free wool, both had attained. PRICE OF WOOL. Common Fleece, New York, Highest and Lowest Each Month, with Average for Year, and Duty. 1825 20 p.c. 1826 1887 1828 18294-45 18304-50 2530 ;>:><- :;u Mi)-,/ 3D 30@35 88| 43 184 801 40| 38J- 30 28 20@24 27 30@34| 29 31@37 31@37 3530@35i 37 30@32 l 30 -,40! 38 27@32i27@32 27@32 ! 27@32 27@32 27@32 27@32 27@32 27 30@34|30@34 80@34!88@84:8884 83@34 28@80 2a85 47 47 40(T/4:24(yrM240@4240@4242@4445@51 62@65 65@70 75@80I75@80 70@73 65@,67|65@67j 1835 4-36 183614-34 1837,4-32 18384-30 1839,4-28 1840*4-26 1841,4-24 1842 4-22 18433-30 1844 3-30 1845|3-30 1846 3-30 1847 30 p.C. 1848 1849 1850 1851 1852 1853 1854 1855 1856 1857 1858 24 p.C. 1859 1860 1861 1862 1863 9cts. PRICE OF WOOL AT NEW YORK, EACH MONTH.-TREASURY REPORT, 1863. P Highest price, merino, for two years, 1836- 37, 56 cents ; five years. 1832- 37, 48 cents ; twelve years, 1849- 61, 36 cents ; common, two years. 1836- 37, 37 cents ; five years, 1835- 39, thirty cents; six years, 1855- 61, twenty-nine and a half cents; six years, 1849- 54, twenty, six cents ; seven and a half years, 1833- 39, twenty-eight cents. THE WOOL-GROWER. WOOL NEW- YORK QUOTATIONS REDUCED TO GOLD. icr 1860. 1861. 1869. 1868. 1864. 1865. 1866. 186U. x y l d full-bl d nieri 48@52 4 Nat e, % & % bl.|3446 3 pulled .... 42 1 3S40 44 4846 t>4846 ,.,.. .. _ 14448 Extra pi Superfine " 3740 36@40 43 No. 1 " .... 2830 3234 37 California,uuw d 2432 2732 29 " common, " :10@20 12 |15>^( S. A. Mestiza, " |l6@25 16@20 19 " common, " 1 10 13 14@17 14 Cordova 81 Valparaiso 1 African, washed. " African, unw d.. Mexican, " Smyrna, " " washed . 14H9 27 18 163tf@21|14X " 31 35 126^ The quotation for 1869 is that of September llth ; for the other years the prices of Octo ber 31st are given, taken from the Chronicle, New York. PRICE OF WOOL. YEAR. NEW YORK. AVEBAGE or MONTHLY RATES. Merino. Pulled. BOSTON. G. LIVERHOBE S TABLE. Fine Middle. Long. 1825 1826 1827 1828 1829 1830 1831 1832 1833 1834 1835 1836 .. 1837 1838 1839 1840 1841 1842 1843 1844... 18 15 1846... 1847 1848 1849 1850... 1851 , 1852 1833 1854 1855 1856 1857 1858 1859... 1860... 25*130 37<T/ 40 86 :U 5S 50 4:i 57 :>i 58 59 47 44 49 40 4-2 87 81 89 96 80 96 41 49 88 45 40 15 4!) 89 88 40 88 84 ;n 80 96 80 89 88 37 47 84 84 U u Pulled No. 1 from this point forward. 168 DOES PROTECTION PROTECT? CHAPTER XIII. IKON-HISTORY OF THE IRON MANUFACTURE PRIOR TO 1833. WHAT is " the iron interest ? " Is it confined to the taking of ore from the mountains ; to the reduction of ore, by smelting, to raw iron, called pig-metal ; or to the preparation of that metal, by further processes, for use as bar-iron, wrought-iron, or steel ? Does it not include far more ? Does not the whole business of casting iron into forms for use, and of manufacture of hardware, tools, cutlery, and wire, deserve consideration as part of "the iron interest?" Do not the making of nails and bolts, horseshoes, safes and locks, the shaping of sheet-iron into pipe, or the working of iron at the black smith s forge ; the manufacture of agricultural implements, and of all forms of machinery, steam-engines especially included do not all these deserve to be remembered whenever " the iron interest " is mentioned ? Are not these, indeed, the very branches of that in terest which most affect the welfare of the country ? To certain persons it seems otherwise, if we may judge by their words or acts. Whenever " the iron interest " is named, they seem to think only of pig-iron. To them, a large production and a high price of pig-iron seem to represent an approach to the millennium. Whenever protection is abroad in the land, it seizes upon the pro duction of pig-iron as the tender infant which stands in greatest need of careful nursing. By these persons, the idea that an extrav agant and unnatural price of pig may do injury to the iron interest as a whole is treated as the most absurd of all notions, and a sug gestion that lower duties on pig-iron may benefit the iron interest as a whole is regarded as conclusive proof that its author has been " bought with British gold ! " If some gardener, anxious to make his tree bear fine fruit, should dig up its roots and wrap them all closely in bandages to " protect " them from the soil and moisture, he would do a thing not more un reasonable than those are doing who make pig-iron costly, and call that " protecting the iron interest ! " In 1860, there were employed in all branches of iron manufacture 198,532 persons, and its aggregate product was valued at $56,1 3 7,73 6. In the mining and smelting of iron the production of- pig-metal there were employed 19,133 persons, and their product was valued at $23,275,412. Less than one-tenth of the hands employed, less than one-eleventh of the product, belong to the making of pig. In HISTORY OF THE IRON MANUFACTURE PRIOR TO 1833. 169 forging and rolling iron, and making steel in the preparation of iron were then employed 22,903 persons, and the value of products was $38,417,099. As the production of pig employs 9 per cent, of the hands, and yields 9 per cent, of the product of the whole iron interest, the preparation of iron employs 12 per cent, of the hands, and yields 15 per cent, of the product. Looking next to the branches which may more properly be termed manufactures of iron, we find that these are of two classes : those which are supposed to be sus tained by protective duties ; and those which in the nature of things cannot be thus sustained because exposed to no competition, or which have been so developed in this country that they need no aid. In a classification of the iron interest (page 187) will be found the entries in the census-tables of 1860, arranged in four divisions: "Production," "Preparation," "Protected," and "Non-protected Branches." It will at once be granted that, if the non-protected branches cannot be aided by duties, they must be retarded or injured by any increase in the cost of iron. To these, therefore, if the classi fication is correct, the protective system can only do harm, if it in creases the cost of the material. And these embrace more than half of the hands employed, and yield more than half of the product, of the whole iron interest. Concerning the correctness of the classification, it may be re marked that in the making of all machinery our artisans are exposed to no competition; that when, iron has been of moderate price, American locomotives have been shipped to Europe for use in Eng land and Prussia ; that, sewing and other machines are even now largely exported to Europe ; that American fire-arms are not only of known excellence, but are made by machinery not equalled any where else for ingenuity and effectiveness ; that our agricultural im plements have proved their superiority in European expositions, and the history presently to be reviewed will show that dependence upon foreign manufactures of this class was long ago prevented by the superiority of our products. The same fact will appear in regard to all cut nails indeed, we export of them largely even when the raw iron is costly. The workers in sheet-iron are not separated in the census-tables, and in fact cannot be, from the workers in tin ; and while the making of sheet-iron can be protected, the shaping of it into pipe or other forms evidently cannot be exposed to any com petition. Nor can the blacksmith be affected by duties except when they increase the cost of his tools and materials. In general terms, then, it may be said that one-half of the iron\ 170 DOES PROTECTION PROTECT? interest cannot be aided by any form of protective duties on similar products, but must be injured if the cost of its material is increased. /"~ Again, one-quarter of that interest, comprising those branches /classed as " protected," must be injured if raw iron, bar or wrought / iron, or steel, is rendered more costly. Whether this injury can be I compensated by duties on foreign manufactured products, must be \ascertained. Again, one-eighth of the iron interest, engaged in the rolling and forging of iron, an<J the making of steel, must be injured if raw iron is rendered more costly, but its products may be correspondingly en hanced in price. Finally, less than one-tenth of the iron interest the production of pig-metal if benefited at all in the increased price of its prod uct must be so benefited at the expense of injury to more than nine-tenths of the iron interest, and to a whole nation of consumers of iron and its products ; or, stating it more exactly, the relation of the different classes, measured by number of hands and by value of aggregate product, is as follows : Hands. Product. Production (pig) 9^ per cent. 9 per cent. Preparation (bar, etc.) 12 " 15 " Manufacture (protected) 24 " 25 " Manufacture (not protected) 54 " 51 " 100 " 100 " This is " the iron interest," with pig for its roots, bar for its trunk, castings, etc., for its boughs, and the non-protected manufac tures for its richest fruit, and our protecting gardeners have band aged roots, trunk, and boughs, to make it bear more largely. Has the experiment succeeded ? In reviewing the history of this interest, it is important to keep in mind the relation of these classes to each other, and to inquire not only whether the production of pig alone, or of pig and bar iron, has been increased, but whether the produc tion of wealth by the manufacture of iron in all forms has been in creased by protective duties. The fashioning of iron into shapes for use began in this country as early as 1646, when Joseph Jenks made the first castings in New England of which we find record. In 1652 there were established in Massachusetts blast-furnaces, a bloomery, and forge-hammer; in 1655 there was granted to Jenks a patent for " an improved scythe," which, in every essential feature, was like the implement now in use ; in 1666 people skilled in wire-drawing were found, and in 1731 there were six furnaces for hollow ware in New England, nineteen HISTORY OF THE IRON MANUFACTURE PRIOR TO 1833. 171 forges, or bloomeries, one slitting-mill, and a nail-factory. Before the Revolutionary War, in Massachusetts, as in other colonies, there were made edge tools, augers, scythes, shovels, " better and cheaper than the English," nails, muskets, cannon, and almost every kind of domestic casting. During all this time this industry, then really in its infancy, was exposed to the full force of a foreign competition, not only unchecked by any duties whatever, but even favored by British officials and British laws. If it grew so rapidly and vigorously, even then, can it be supposed that it would not now survive the removal of artificial aid ? So rapid was its growth that the manufacturers of England became alarmed, and besought Parliament to protect them, against the infant. By the act of 1750, England absolutely prohibited the erection of any slitting or rolling mills, plating-forges, or steel-fur naces, in the colonies, and prohibited the exportation from them of any manufactured products, but, with a greater wisdom than we have since shown, encouraged the exporting of pig and bar iron to Eng land, that the British manufacturer might have his raw material both cheap and abundant. In fact, as early as 1718, raw iron had been exported to England from Maryland, and by 1730 the quantity exported from that colony, Virginia, and Pennsylvania, to England, was over 2,250 tons. In 1732- 33 we began to export bar-iron to England, and from that time until the Revolution a quantity of pig and bar was thus exported every year. Prior to 1750 the iron thus exported paid a duty of 3s. 9d. a ton, and, when it was proposed to repeal this impost, and admit American iron free, the iron-masters protested that their works at Sheffield and elsewhere, erected at great expense, would be ruined, the laborers be rendered destitute, or forced to emigrate, and " the plenty and cheapness of wood would enable American iron to undersell the British, and thus ruin the trade, while the iron manufacture, rendered wholly dependent on so distant and precarious a source for material, would probably de cay, and reduce thousands of workmen to want and misery ! " How often have we since heard from American lips the same dismal prophecies ! It is the old cry of a threatened monopoly, pleading anxious regard for the welfare of labor. Were these men honest ? Every bit as honest as the men who say that American furnaces would now be closed by the repeal of duties on pig-iron ! The act of 1750 encouraged the importation of American bar, but prohibited the taking it ten miles from London. In 1756 the manufacturers petitioned for repeal of this prohibition, and, again, 172 DOES PROTECTION PROTECT? the owners of 109 forges in England and Wales represented that the American would compete with British iron, the making of which would be stopped, "and a great number of families, dependent thereon, be reduced to beggary." It was answered that a manufac ture is much more valuable than the raw materials, and that, as these could not be produced at home in such quantity and at such a price as to sustain the manufacture, it was the duty of the legislature to encourage their free importation if it should arrest their production on the island ; that progress of other nations made it more than ever necessary to obtain materials at a lower price, or lose the manufac ture of fine articles of steel and iron ; the only way to do this was to reduce the duty on foreign iron, " or make it necessary for the iron-masters to reduce their price by raising up a rival in Amer ica" Is there not matter here which an American Congress to-day may well study ? The prohibition was repealed, and the importation of American iron to England increased from 3,441 tons in 1755 to 5,303 tons in 1771, and then began to decrease. It is not necessary to add that this flood of foreign iron did not put out British furnace-fires ; but, forcing British monopolists to put down the price of the material, it did build up in England a most powerful manufacture. Not only before the war, but after the Revolution, and before the adoption of the Constitution or of any national tariff, our manufac ture was exposed to the full force of British competition. The most abundant evidence exists that our industry was not only not crushed by this competition, but made very great and rapid progress. In the making of machinery our independence was thus early estab lished ; even then, before the invention of nail-machines, the making of nails was so extensively carried on, that there was a large surplus exported, both from Pennsylvania and New England ; and, in making fire-arms and all forms of farming implements, American superiority was quickly demonstrated. Nor was the country prevented from commencing the higher branches of the manufacture. Before the adoption of the Constitution, the importations of steel had been ma terially reduced by the progress of our own industry, in spite of open competition with other countries. A single furnace in Pennsylvania was making 230 tons of steel in a year; and at that time we find it recorded that "a dangerous rivalry to British iron interests was apprehended in the American States not only in the production of rough iron, from the cheapness of fuel and the quality of the iron, but also in articles of steel cutlery and other finished products, HISTORY OF THE IRON MANUFACTURE PRIOR TO 1833. 173 from the dexterity of the Americans in the manufacture of scythes, axes, nails, etc. In these they exceeded the French and most Euro pean nations, as well in the style and finish as in the quality of their articles, being made from the best iron." That the manufacture was not prostrated after the peace, Secretary Hamilton shows in his elaborate report of 1791, saying that iron-works were carried on more numerously and more advantageously than formerly, and the price of iron had risen because of the increase of the demand for the manufacture, from about $64, the average before the Revolution, to about $80. He particularly mentions that, in the manufacture of steel, several new enterprises on an extensive scale " had been lately set on foot." If this manufacture had here such natural advantages that in its very infancy it alarmed English manufacturers of the higher grades, and, though exposed to wholly unchecked competition with foreign industry, actually advanced with such vigor and rapid ity, before the adoption of any tariff laws whatever, as to produce nails for exportation, machines unmatched in excellence, implements of acknowledged superiority, and scythes and axes equal to the best of European make, is it not the height of folly to say that it would never have existed, or could not now be sustained, without protec tive duties? The first tariff framed by the founders of the government, though intended to give protection in some sense, imposed no higher duties than those upon iron, namely, 7J per cent, on bar, bolt, and pig iron, one cent a pound on nails, and one-half cent a pound on steel. In 1792 the duty on steel was raised to $20 a ton, and on iron cables to $30 a ton ; and in 1794 the tariff on rolled iron and steel was fixed at 15 per cent., on hardware 10 per cent., and on all other manufactures of iron at 15 per cent. These low rates were maintained until 1816, when protection of a very different character was demanded and granted. From 1790 to 1800 the manufacture of iron steadily increased, though no accurate information of its progress is obtainable. Nor are there any records of the importations of iron at that time. But we find recorded the opening of twenty-one furnaces in Pennsylva nia alone within that time, one of them yielding 2,800 tons per annum. It appears that in 1798 Lancaster County had 3 furnaces, 11 forges, and produced 1,200 tons of pig, and as much of bar; that Berks had 6 furnaces, and as many forges; that Chester had 6 forges, and produced 1,000 tons of bar-iron; and that, patents for nail-machines having been granted in 1794, there were three facto ries in operation in Philadelphia by 1797. In New Jersey also, in 174 DOES PROTECTION PROTECT? 1794, there were produced 1,200 tons of bar-iron, "besides hollow- ware and castings, and iron in pigs and bars was exported to a large amount. Only eight years later, the manufacture in that State had more than doubled. There were then produced 3,000 tons of bar- iron and 3,500 tons of pig, and four rolling and slitting mills were in operation. But in that same year, 1802, the citizens concerned in the manufacture petitioned Congress for increased duties on foreign products. We are not forced to look far for the explanation. It happens to be recorded that in 1789, before any duties had been im posed, the price of pig-iron was 6 lOs.^ Pennsylvania money, equiv alent to $17.33^, while in 1800 pig-metal was worth 10 a ton, or $26.67f . This enhanced price, whether caused in part by the duties, or altogether by increased demand for iron to be used in manu factures, had a double effect. First, it stimulated the building of those furnaces which we have seen starting up in every direction, and thus caused New Jersey to more than double its product of pig and bar iron in eight years. But, second, it rendered all manufac turers of iron less able to cope with foreign competition, for, the ma terial costing more, they could no longer produce castings, nails, and other articles, as cheaply. Hence, a cry to the government for aid. Nor was it without excuse; for we find that in 1801 there were im ported of nails 3,120,691 pounds, of spikes 280,237 pounds, and of steel 14,844 cwt. In 1790, as Secretary Hamilton stated in his report, there were imported only 1,800,000 pounds of nails, and he recommended a duty, "to put an end to this importation." It will be remembered, moreover, that a duty was granted, on nails one cent a pound, higher than on any other form of iron. And it will also be remembered that within the same decade the manufacture had been greatly im proved by the invention of better machinery in this country than any other possessed. Yet, the importation had increased from 1,800,000 pounds to 3,120,691 pounds ! Such was the effect of the first effort to " put an end to an importation " by duties ! The iron had risen in price from $17 to $26 a ton, and bar-iron, protected now by duties of 15 per cent., had also risen in like proportion, and therefore the cost of domestic nails had risen more than the one cent a pound of protective duty, and the importation had increased. No better illustration can be desired of the workings of the tariff. Nor can it be supposed that other manufactures had fared better, for that of nails was justly regarded as most firmly established before the war. Although the New Jersey men complained, and the manufacture was, no doubt, relatively retarded, it still continued to increase. HISTORY OF THE IRON MANUFACTURE PRIOR TO 1833. 175 New works were opened; in 1805 there were 16 furnaces and 37 forges in Pennsylvania, and on the west side of the Alleghanies 11 forges and about the same number of furnaces; and 10 more fur naces, three forges, and a bloomery, were in that year erected in the State. In 1807 there were in Pittsburg four nail-factories, one mak ing 100 tons of nails a year. And yet in that year the importation of nails was about as large as in 1801, being 3,072,238 pounds, and of spikes 284,742 pounds, and of steel 10,604 cwt. The impor tation of steel had decreased about one-third. In the next year, 1808, foreign trade was interrupted by the embargo, but in 1810 the foreign importations were about the same, except of nails, 2,112,223 pounds. At this point, Mr. Gallatin, Secretary of the Treasury, in a report on manufactures, classed that of iron as " firmly established," and estimated the quantity of bar-iron produced to be 40,000 tons, against about 9,000 imported. But he observes that a reduction of the duty on Russia iron was asked for by the rolling and slitting mills. The same difficulty of which the nail-makers had complained in 1802, namely, the cost of the raw material, had now, in 1810, extended to the rolling-mills. As to the nail business, he said that the use of machinery had extended throughout the country, and about 280 tons were already exported annually, but we still imported about 1,500 tons of wrought nails and spikes. The manufactures of iron were principally agricultural implements, black- smith s-work, anchors, shovels, spades, axes, scythes, and other edge tools, saws, bits, and stirrups, and every sort of machine and other castings, and a great variety of coarser products, but cutlery and the finer hardware, and steel- work, were almost entirelyiimported. The value of iron imported was nearly four millions, and the value of iron produced and manufactured was from twelve to fifteen millions. To the important information of this report we have also added the cen sus of that year, which stated the number of furnaces as 153, pro ducing 53,908 tons of iron, and 4 steel-furnaces producing 917 tons of steel, whereas we imported only 550. In the same year, notwith standing the duty, we imported 852,949 pounds of " anchors and sheet-iron," and 759,337 pounds of " sheet or hoop iron." These statistics give a very fair idea of the condition of the iron\ manufacture before the war which soon followed. Until after the close of the war, neither duties nor importations affected our indus try, but the great inflation and depreciation of our paper-money cur rency caused enormous prices, and prepared the way for inevitable disaster when the war ended. 176 DOES PROTECTION PROTECT? * High prices invite the seller, we reasoned in speaking of imports. This was forcibly illustrated after the War of 1812, when our indus tries, which had prospered before the war with little protection, were suddenly checked by importations of foreign products. Our people imagined that the whole world had conspired to ruin our industry by selling goods below cost. The truth was, that it cost less to pro duce in other countries, where lower prices prevailed. But, in the vain effort to arrest this influx of foreign products, the tariff of 1816 was adopted, with increased duties in 1818. The attempt failed. Nothing could stop the flood except a return to the natural level of prices, and that was precisely what people dreaded. _ In spite of the tariff, it came, and with it the prostration of manufactures in 1819 and 1820. It is to be regretted that complete and reliable statistics do not exist of the immediate effect of foreign importations upon the iron business after the war, and prior to the tariff of 1816. It is said that 21,000 tons of British iron were imported in 1815, and a like amount in 1816, of which only 7,600 tons were bar-iron. It is not strange, for in 1816 Congress authorized a contract for 500 tons of iron for use in the navy, at a cost of $52,558, or $105 a ton. In 1818 iron had fallen at the seaports to about $100, but was still worth at Pittsburg $190 to 200, and at Cincinnati $200 to 220. In the latter city and at Zanesville castings and hollow-ware were worth $120 to 130. These facts show how the great depreciation of the currency affected our business. "Where our industries were brought at once face to face with foreign prices, the evil was more quickly corrected, and it may be questioned whether, if that natural corrective had been left un interrupted by legislation, the disasters which followed would not have been less severe and prolonged. It was inevitable that prices should fall before a healthy business could be done, and the great reduction which did follow flour from $1 a barrel in 1817 to $5 in 1819 ; bar-iron from $140 to $80 ; pig-iron to $30, and castings to $75 a ton was neither caused nor averted by any tariff. It appears, however, that the iron manufacture was by no means stopped by importations. New establishments, including some of great im portance, went into operation in this very time of greatest depres sion. The census returns showed that thirty iron-works fourteen blast-furnaces and sixteen bloomeries had been built in Pennsyl vania within ten years ; new and important branches of the industry had been commenced, and the reduction of the price of pig and bar iron, and consequently of the profits of these branches, though de- HISTORY OF THE IRON MANUFACTURE PRIOR TO 1833. 177 pressing to them, was an encouragement to the manufacture of all finished products. The imports, in these years, were comparatively small. They included, in all, less than 8,200 tons of iron, against 21,634 in 1816. Of pig-iron there was imported only 329 tons surely not enough to control the price ! Of bar there was imported rolled 59,385 cwt. and hammered 389,797 cwt. ; of castings only 6,202 cwt. ; of anchors only 79,252 pounds and yet it was said that excessive importations at this time stopped the manufacture of anchors at Baltimore of sheet-iron only 12,520 cwt., of wire 127,866 pounds, of tacks and brads 23,506, of steel 7,802 cwt, and of nails only 220,682 pounds, and spikes 38,625 pounds. These figures do not indicate that the importation was heavy enough, or of such a character as, to prostrate the manufacture, and its depression must be referred to the general prostration of business, attending the contraction of currency and the return to a specie basis. With reference to this period Mr. Henry C. Carey says : In 1810, prior to our second war with England, our furnaces numbered 153, with an average yield of 36 tons, giving a total produce of 54,000 tons. Protection afforded by the war caused a considerable increase, but there exist no reliable sta tistics in regard thereto. Peace in 1815 was followed by the so-called revenue tariff of 1817, and that in turn, as is so well known, by the closing of factories and furnaces ; by the ruin of manufacturers and merchants ; by the discharge of work men everywhere ; by the stoppage of banks ; by the bankruptcy of States ; by the transfer under the sheriff s hammer of a large portion of the real estate of the Union ; and by an impoverishment of our whole people general beyond all former precedent. The demand for iron had so far ceased that the manufacture was in a state of ruin so complete, that not only had it lost all that had it gained in time of war, but had, as was then believed, greatly retrograded. In placing it, as I now shall do, near the point to which, by aid of non-intercourse and embargo acts, it had been brought in 1810, I am, as I feel assured, doing it entire justice. Such with little change con tinued to be the state of things until the passage of the semi-protective tariff of 1824. It is for readers to judge whether such a statement, wholly sup pressing the vital fact of currency inflation and depreciation, and the destruction of paper-issuing banks, is a fan- account of the events of this period. Mr. Carey surely was not ignorant of the fact that the enormous issues of paper during the war, and the creation of new banks, many of them financially worthless, had disordered the cur rency and increased prices most unnaturally ; nor was he ignorant of the fact that the failure of such banks, the depreciation and ultimate abandonment of such a currency, its shrinkage from $110,000,000 13 178 DOES PROTECTION PROTECT? in 1816 to $45,000,000 in 1819, and the return from fictitious to legitimate prices, must in any case have produced severe revul sion, prostration of business, and embarrassment to all productive industry. If he knew these facts, it would surely have been more candid, not to say honest, had he mentioned them as causes, in part if not altogether, of the disaster described. Nor are there known to the writer any statistics which justify the statement that the manu facture " lost all that it had gained in time of war." On tjie con trary, it appears that many new iron-works were established after the war, and prior to the general failure of banks in 1819- 20, among which may be mentioned a factory of steam and fire engines, mill machinery and steamboat engines, in Cincinnati in 1817, and another machine-factory in 1818, while another in operation at the same time employed eighty hands. The manufacture of chain cables, by Cotton & Hill, was commenced at the same time at Boston ; and the Hunt Brothers, in Litchfield County, Conn., made anchors of 8,000 and 9,000 pounds, and screws for the largest machinery, while anchors were made at Baltimore for 8 and 9 cents a pound. That there was great depression in the production of iron, caused by decrease of prices, is stated, but the fact that new establishments were started for the manufacture of iron accords with the reasonable supposition that cheaper raw material would naturally stimulate both manufacture and use. Nor is it possible to reconcile the last-quoted statement of Mr. Carey with recorded facts. The iron production and manufacture had both begun to revive before the year 1824. This was in part due, no doubt, to the opening of mines of anthracite coal, already used in the working of iron to some extent, and the completion of the Lehigh Canal, which forwarded to Philadelphia its first supply of 365 tons in 1820, and in the year 1822 the canal brought its first supply from the Schuylkill region, of 1,480 tons. By the year 1824, when the tariff was passed to which Mr. Carey ascribes all the sub sequent progress, the quantity of coal forwarded from the Lehigh region was 9,541 tons, and the whole amount was 11,108 tons. This increase is a proof as it was a cause of rapid growth of the manufacture of iron, which revived as soon as the currency had reached a solid basis. (Numerous inventions in the production and manufacture of iron were at that time made, as the patent records show, prior to the change of tariff, and these contributed to the in creased growth of that interest. In 1822 Bishop records the first extensive use of iron pipes for the water-works of Philadelphia, and HISTORY OF THE IRON MANUFACTURE PRIOR TO 1833. 179 states that the iron-works in Brandon, Vermont, in that year pro duced a very superior quality of shovels, " said to be better and tougher than those imported," while " Mr. Conant s works, recently put in operation," made castings to the amount of 100 tons annu ally, including stoves so popular that the demand exceeded the supply. Incidents like these do not indicate that the manufacture waited for the tariff before it revived. Again, of 1823, Bishop says : " With the general revival of business about this time, the building of steamboats was resumed at Marietta," and " the business received a new impulse in the other river-towns." In the same year the first railway act was passed, to give communication from Philadelphia to Lancaster County, of whose iron-works we have seen statistics. This does not indicate that all the furnaces there were idle, and waiting for the tariff! In New Hampshire, in the same year, " fifty- four trip-hammers were at work, and a rolling and slitting mill and nail-works and machine-shops were in course of erection," not waiting for the tariff ! The first steam printing-press was put in operation in the same year ; a pin-machine was in operation in New York which would make thirty pins a minute, the best machines in London then making only fourteen, less perfectly ; and a cutler in New York used New Brunswick steel for penknife-blades, which he made superior to any of English blistered steel. In the same year surveys were made for the Delaware and Raritan and Morris Canals, the latter giving access to the anthracite mines of Pennsylvania, and a cheap outlet for the iron of that region, which at that time had three fur naces and fifty-one forges, though many " had gone to decay in part from the scarcity of fuel and the increasing cost of transportation." And, in 1825, only a year after the tariff had passed, Pittsburg con tained seven steam rolling-mills, eight air-furnaces, and a cupola furnace, a foundery, and six steam-engine factories, while there were five blast-furnaces north of the river supplying metal, besides sev eral in Fayette, Westmoreland, Beaver, and Armstrong Counties. And Huntington County contained the next year eight furnaces and ten forges, one slitting-mill, and a nail-factory. Not even Mr. Carey will claim that all these works were erected in a single year, or in two. I These incidents, among many which might be gathered from the records of that time, seem to prove conclusively that in all parts of the country the production and manufacture of iron had greatly revived, with the revival of other business, before the adop tion of the tariff of 1824, to which Mr. Carey ascribes all the prog ress then made. If this is true, it is not a candid statement to say 180 DOES PROTECTION PROTECT? that the prostration continued " until the passage of the semi-pro tective tariff of 1824." For the facts prove that it did not. It is of no small importance to ascertain whether Mr. Carey is right or wrong in this instance, for upon his authority rest many statements vital in the history of the iron interest. If it appears that in the statement quoted he has distorted or twisted, suppressed or misrep resented facts, we may be prepared to receive, not with absolute confidence, other statements by him in the same interest. More over, if the iron manufacture had actually revived, and begun to grow with vigor before the change of tariff, it is reasonable to con clude that its growth would have continued had there been no such change. Some evidence of the real condition of the country in the years 1820- 24 may be drawn from the record of imports of iron. The duty being unchanged in those years, the great decrease of imports in 1821 marks the general prostration in business in that year, and the revival of imports in the years 1822 and 1823 marks a revival of business, and a renewed demand for iron, which benefited the domestic manufacturer more than the importer, for the quantity made here was several times as large as the quantity imported. From the Treasury reports we take the statistics of imports of iron from 1818 to 1844, which will be found at the close of chapter XIV. It appears that the quantity of pig imported, less than 1,000 tons in 1821, increased to about 2,500 tons in 1823. This proves that an increased demand existed, while the quantity imported is still so small as to prove that domestic production was not percepti bly impeded by it. In like manner, the importation of hammered bar-iron increased from 17,000 tons in 1821, to 29,000 tons in 1823 ; and the importation of rolled bar from 2,000 tons in 1821, to 5,300 in 1823, and 5,790 in 1824. The whole amount of raw iron im ported for manufacture was therefore 20,000 tons in 1821, and 36,800 tons in 1823. Now, Mr. Carey himself admits that there was produced as much as 53,000 tons, and it is known that furnaces existed for the production of at least 100,000 tons. The rapid in crease of manufactories shows that a demand existed for the iron ; is it likely that these furnaces remained idle ? j Is it not more probable that they shared with foreign producers the benefit of increased de mand, and that the production grew as well as the manufacture)? For, in the same time, the importation of nails and spikes decreased, from 1,072,000 Ibs. in 1822, to 658,000 in 1823 ; and we remember that over 4,000,000 pounds had been imported in 1804, when the great HISTORY OF THE IRON MANUFACTURE PRIOR TO 1833. 181 part of the consumption was even then supplied by home products. The importation of manufactured wares paying ad-valorem du ties, which was $2,767,757 in 1822, was $2,568,842 in 1823. In creasing imports of the material, and decreasing imports of finished products, with neither the one nor the other in such quantity as to overwhelm domestic production these conditions surely indicate a growing demand and a growing manufacture. At all events, the statistics prove that the imports were not large enough to break down nor prevent the growth of the manufacture. Only $5,083,351 in value of iron of all kinds was imported in 1823, and $5,210,056 in 1822. But it will be remembered that, ten years before, the do mestic product was over fourteen millions in value, and the importa tions four millions, the manufacture rapidly growing, and that the production had fully doubled before and during the war. It would be absurd to suppose that, after thirteen years of growth, an importa tion of five millions was enough to depress or check a manufacture which in half that time had doubled its productive power ! This is surely conclusive. We must dismiss Mr. Carey s special pleading at this point, with the conviction that, had he recognized two truths first, that the iron interest had revived and begun to grow again before 1824 ; and second, that importations were not so great as to prevent a healthy progress he would not, perhaps, have made out so great an apparent need for the tariff of 1824, but would have been more true to the recorded facts. From 1824 onward, records bearing upon the iron interest are more complete. The tariff of that year did not increase the duty upon pig or rolled bar, and only raised the duty on hammered bar from 75 to 90 cents per cwt. ; showing that the production of iron was not then thought to need much greater aid. Products before admitted under an ad-valorem duty of 20 per cent, now paid 25 per cent. ; on castings the duty was raised from 75 cents per cwt. to 1 and 1 cent per pound ; the duty on anchors, tacks, and brads, and on steel, was not changed ; the duty on nails was raised from 4 to 5 cents per pound, but anvils, blacksmiths hammers, cables and chains, muskets and rifles, braziers rods, mill saws, cranks and irons, were taken from the ad-valorem list and placed under specific duties. This tariff lasted four years. In its first year it reduced the impor tations of iron to $4,518,134; in its second year they were higher than ever before, and in its last year, 1828, the importations of iron were $7,286,543. This attempt to protect does not seem to have protected. 182 DOES PROTECTION PROTECT? Beginning with the raw material, we find that the imports in creased as follows : 1824. 1828. Pig-iron (cwt.) 15,856 69,937 Rolled Bar, " 115,809 205,897 Hammered Bar (cwt.) 425,906 667,849 Total 557,571 943,683 Thus the imports of the material increased from about 27,000 tons to about 47,000 tons. Mr. Carey asserts that the production of iron in the same time increased to 130,000 tons, " giving a dupli cation in the short period of four years." This is plainly an erro neous statement, for it has been shown that the product of 1824 was undoubtedly more than 100,000 tons, and the increase of production, not more than 30 per cent, in four years, was less than the increase of importations which did nearly " duplicate in the short period of four years." Notwithstanding a large share of articles had been taken from the ad-valorem list, the value of imports under that head was $2,486,164 in 1824, and $3,225,907 in 1828. Of the articles taken from that list for specific duties the imports increased as follows : 1824. 1828. Anvils (Ibs.) 116,387 972,129 Blacksmiths Hammers (Ibs.) 10,144 58,855 Cables and Chains, " 210,550* 847,655 Muskets and Rifles, 2,14^ 7,097 Braziers Rods (Ibs.) 2,128 730,031 Wood Screws $5,206 $87,100 MiU Saws $1,073 $2,758 Cranks . . none. We certainly need not say that these attempts to protect singu larly failed ! Other qualities of iron were also much more largely imported, thus : 1824. 1828. Steel (cwt.) 21,954 35,660 Sheet-iron (Ibs.) 1,088,858 6,551,642 Nail-rods, " 2,307 985,909 Band-iron, " 6,832 97,909 Enough of these details ! How this tariff was ever called pro tective, or " semi-protective," unless on the principle " lucus a non lucendo" passes comprehension. A- There is proof that during this period the production and manu- i facture increased, but the evidences of its progress are less numerous HISTORY OF THE IRON MANUFACTURE PRIOR TO 1833. 183 or conclusive than are those of progress in former periods. The fact is noted that American hammered bar-iron had been enhanced in price, to $105 per ton, since the increased duty on foreign hammered bar, but pig and rolled bar, after a sudden and unnatural rise to enor mous prices during the financial trouble in 1825 which affected England seriously, receded at once, and for the whole period slightly declined. The increase of facilities for transporting iron was an im portant advantage gained at this time, which contributed more than all tariffs to the future growth of the iron interest, and this, as we have seen, began before the tariff of 1824. The anthracite coal sent to market had increased to 77,516 tons, and the Delaware and Hud son Company had by this time completed its works, and began to deliver in 1829. It was not the iron but the wool interest that demanded and ob tained the tariff of 1828, but, to secure strength enough to carry the enormous duties desired by that interest, larger duties were also given to others. The duty on pig-iron was raised to $12.50 per ton ; on hammered bar to $22.44, or 67 per cent., and on rolled bar to $37 per ton, or 121 per cent. Did this effort protect ? The importation of pig at first fell to 22,771 cwt., but then in two years rose to 203,025 cwt., far higher than ever before. Rolled bar at first fell to 66,408 cwt., but after two years rose higher than ever before, reach ing, in 1832, 427,745 cwt. Hammered bar, in like manner, falling off to sixty-six million pounds, rose again to eighty-five million pounds. In 1828 we imported 47,000 tons of iron unmanufactured. In 1832 we imported 74,000 tons, an increase of 57 per cent, in four years. Meanwhile, taking Mr. Carey s own statements, the domestic pro duction of iron had increased from 130,000 to 200,000 tons, or in a ratio of 53 per cent. Under this, the last effort of protection to shut jout foreign products by extreme duties by duties higher than ever before or since until recently the imports of foreign iron had in creased faster than the domestic production, so that actually a larger share of our consumption was supplied by imports in 1832, when this tariff was abandoned, than in 1828, when it was adopted. No wonder it was abandoned ! No wonder men began to doubt whether protection really did protect ! Nor were the manufactures of iron more successfully shut out from foreign competition. The duties imposed by the act of 1828 were very heavy, but the importations, though diminished in the first year or two, afterward became larger than ever : 184 DOES PROTECTION PROTECT? 1838. 1832. Nails cwt 653 655 746 544 35,660 54 929 Tacks Ibs 21 859 32 885 Anchors cwt . 55 640 78 921 1 133 140 2 999 039 Anvils Ibs . . . 972 129 1 393 295 Chains, Ibs 847 655 2 454 360 Wood Screws $87 100 $133 698 Scythes, Spades, etc 119,849 133 677 Axes and Adzes 6,392 62 774 Bridle-Bits 7,445 99 977 Steelyards . . 3.804 67.613 In spite of the removal of many of these articles from the ad-va lorem list by the tariff of 1828, the aggregate of those remaining was still larger in 1832 than the aggregate of the whole in 1828 ; the in crease was from $3,225,907 to $3,894,298. In face of these facts, it would be folly to expect that the manufacture had grown more rap idly than the production of iron. In some branches it had made progress, but in all its real strength was undermined by teaching it to rely not upon skill but upon duties, and by enhancing the cost of the raw material, as compared with the cost in other countries. This last expression needs especial consideration. By reference to tables given at the close of chapter XY, it will be seen that the price of pig-iron here had slightly declined, from $38 in 1828, to $35 in 1832, and that the price of bar had also fallen from about $100 to $80 a ton. Hence, it is said, the tariff did not enhance the cost of the raw material, and did not, therefore, retard the manufacture. It is enough to point to the enormously increased importations of raw material. These prove that the prices were rel atively much higher here in 1832, as compared with other countries, than in 1828, otherwise this increased importation could not have taken place in the teeth of duties ranging from 60 to 120 per cent ! But we are not left to inference. The facts are known. The price of pig-iron in England in 1828 was from $31 to $39 a ton ; in 1832 it was from $23 to $26 a ton. The price of bar in Great Britain was in 1828 from $33 to $38, and in 1832 from $27 to $29. The use of coke in smelting iron had for some time been rapidly increasing in England, while in this country our furnaces, carefully " protected " from any very serious competition, were content to get along in the old way, and even our vast supplies of anthracite were not used to smelt iron until sharp competition after 1837 forced new methods. HISTORY OF THE IRON MANUFACTURE PRIOR TO 1833. 185 Hence the production in Great Britain had been so rapidly perfected that the cost of pig had been reduced from 25 to 30 per cent., while in this country it had scarcely been reduced at all. The natural tendency of the simpler manufactured products is to lower prices, as new inventions, and methods, and increased skill, are applied. ^Protection " arrested that steady improvement here, by paying our iron-makers well for sticking to the old methods. It held up the price of iron, while in other countries it was being rapidly reduced. Hence the increased importations in spite of the increased duty. But other countries, having cheaper material, could sell manufac tured products cheaper. Hence, in spite of increased duties, the fin ished products of iron came in from abroad more largely under the tariff of 1828 than before, and more largely in its last year than in its first. At the time, this was well understood. The tariff which Mr. Carey and other gentlemen, who do not allow facts to bother them, so greatly admire, seemed to some of the iron-workers of that day a nuisance. Upward of three hundred mechanics of Philadelphia, employed in the various branches of the iron manufacture, petitioned Congress in 1831, representing that the high duties on bar-iron, imposed by the act of 1828, were extremely unfavorable to the manufacturing of hardware, blacksmiths - work, and chain cables, " which last could now be imported cheaper than the rods out of which they were made," and a committee reported that relief could be afforded only by a reduction of the duties on raw iron. This little incident tells us the same story that the statistics have told how the producers quietly went on in their old methods, and pocketed high prices, while the manufacturer, for want of raw material at reasonable rates, was forced to face a greatly-increased importation of foreign wares. And this was the glorious protective tariff of 1828 ! the "thoroughly protective tariff," with its "mar vellous prosperity," as Mr. Carey calls it ! Truly, one must have a brilliant imagination to apply these phrases to such facts as we have reviewed. Before we leave this brilliant period, one more fact must be fixed in mind. The building of railroads had now begun in earnest, and a demand was thus created for a large supply of iron in manufactured form. We had the iron, the coal, and the labor, and rolling-mills, but our glorious tariff had "protected" our industry against the stimulus of competition. Our furnaces were happy in the good old charcoal process, and while England was coking bituminous coal 186 DOES PROTECTION PROTECT? with which to master the world, and while our beds of anthracite were already yielding 363,871 tons a year, not a ton had been used in smelting iron. Consequently, England could supply rails cheaper, and when the Columbia and Pennsylvania road advertised for pro posals to furnish iron in 1831, there were none for American iron, and the contracts were made in England for the whole quantity at 6 17s. 6d. per ton. Just here began England s mastery over us in the iron manufacture. Had our industry been in condition to meet this new demand, the future magnitude of which was not then fore seen, more than three million tons of manufactured iron, which we have since imported at a cost of one hundred and fifty million dollars, would have been made here. No one can estimate the power which this would have given to the iron manufacture thence forward. But it was not in condition. It was indulging in the comfortable dream of protection against competition. When we were colonies, this unprotected manufacture had frightened England with its products. When we had learned to protect ourselves, England mastered our strongest and most natural industry. In its infancy, rugged and self-reliant, this industry exported pig and bar to England. After seventeen years of careful nursing and wrapping by the fireside of protection, this same industry looked helplessly on while England began to make rails for all our railroads. And this, the final and crushing blow, was the latest gift of the protective system to the infant manufacture ! Ah, if, instead of so much shel ter, we had given a little more stimulus ; if, instead of so much coddling, we had subjected it to a few severe lessons in the rough practical world, how many millions we should have saved ! Not a solitary American would to-day dream that a duty on any form of iron was needed, if in 1832 our industry had never been protected at all, and had preserved the rugged vigor and tireless invention of its colonial times. -. HISTORY OF THE IRON MANUFACTURE PRIOR TO 1833. 187 THE IRON INTEREST. Entries Included. Material. Product. Hands. Net Product. Iron minin^ 439.562 12,293,030 21,961.437 858,274 15,524.01!! 4,402,958 226,035 1.263,010 3,671,247 642.668 19.587.928 2,411,954 700,776 1,059,622 376.913 820,810 7.004,162 6,069,095 1,325,159 157,263 7,699,047 3,421,410 2,405,292 20,870,120 36,537,259 1,879.840 36.678.073 10,903,106 429,884 2,135.118 9,151,893 1.689.148 52,550.668 4,866,900 4.403.206 4.040,692 2,362.681 2,144,150 20.944.004 9,857,223 3,468,115 446,133 16,718,388 11,655,843 3,206 15,927 22,014 m 26,961 10,721 278 860 7,284 812 41,688 4,174 2,452 2,937 2.056 1,314 17.094 6.878 2,229 317 11.226 15,733 Iron, pig. ... 10,542,820 Iron, forced, rolled, and wrought Steel 15,597,138 Castings (^eneral) Hardware.. . Forged Anchors, chains, anvils, vices, axles Wire. Cloth, and Rope Cutlery and Tools * Furnaces, etc Furnace?, grates, japan d- ware, tinned ironware, and sad-irons 35,316,685 Machinery Includes machinist s tools Locomotives Sewing-Machines.. . Other Machines t.. Needles, shuttles, and cases Fire-arms Safes and Locks . . Agricultural Imple ments Nails and Spikes Shovels, cotton-gins, ma chine-knives Bolts, Nuts, Scales. Horseshoes Lightning-rods and fish- Sheet-Iron Workers Blacksmith... 82,823.864 Tools and c riage-smiths Total 111,856,979 256,137,736 198,532 144,280,757 THE COTTON MANUFACTURE. Cotton Goods, etc Calico Printing. 57,309.387 115,785,931 7.748.644 3,522,152 122.202 3,894 1,766 3,789.783 2,420,124 Bags, etc Total 63,519,294 127,056,727 127,862 63,537,433 Woollen Goods Carpets THE WOOLLEN Goods, yarn, worsted, fulling, carding MANTJFACa 41,975,917 4.419.561 3,202,317 336,487 URE. 69.739.469 7.860,351 7,280,606 667,960 45,357 6.683 9,103 427 Hosiery Shoddy, etc Satinet printing, helting, dressing Total 35,614,104 49,934,282 85,548,386 61,570 Glass OTHER Us [TERESTS. 2,914,303 1,054,780 12,786,662 242,066,300 8.775.155 2,289,504 23,449,702 503,257,210 9,016 2,213 12,281 5.860.852 1,234,724 10,663,040 261,190,910 Salt Paper, etc Bags, hanging, ruling, shades, and staining. . . Total, six pr * Includes cutlery, carpenters , coopers , curriers , shoemakers , and stonecutters tools, edge tools, and axes, saws, springs, and wired steel. f Includes fire-engines, hoisting-machines, printing-presses, instruments, pumps, tinners machines, jack-screws, and steam-heaters. J Includes cotton-bags, batting, braid, cordage, coverlets, flannel goods, lamp-wick, mosquito-netting, and table cloths. Includes bags, bagging, flags, coach lace, etc. 188 DOES PROTECTION PROTECT? CHAPTER XIV. IRON. THE COMPROMISE TARIFF. THE history of the iron manufacture under the tariff of 1833 is full of interest. Passed with the avowed object of removing protec tion, and bringing back our industry to a self-supporting indepen dence without sudden or violent changes, that act has been called the Carolina Compromise, and by Mr. Carey the free-trade tariff. As names do not fix facts, it is important to ascertain what changes of duty affecting the iron interest this tariff involved. The tariff ap proved July 14, 1832, added about two hundred articles to the free list, and largely reduced the duties on iron and most of its manu factured products, bringing them back substantially to the basis of the act of 1824. Thus the duty on pig was reduced from 62 J- to 50 cents per cwt. ; on bar hammered from $1.12 to 90 cents ; on bar rolled from $1.85 to $1.50; on sheet from 3|- to 3 cents a pound; on nail- rods and band or slit, the same ; on screws from 40 to 30 per cent., and the same on implements (scythes, sickles, spades, and shovels). But the compromise tariff, passed March 2, 1833, made still further reductions. It provided that after December 31, 1833, there should be deducted one-tenth of all excess above 20 per cent, duty, and that a like reduction of one-tenth should be made every second year there after, namely, December 31, 1835, 1837, 1839 ; and after December 31, 1841, one-half of the remaining excess should be deducted, and June 30, 1842, all duties should be reduced to 20 per cent. This progressive decrease caused the duties to vary thus : 1832. 1833. 1834. 1836. 1838. 1840. 1842. Pig-iron . . $12 50 $10 00 $9 47 $9 34 $8 59 $7 CO $5 31 Hammered Bar. . . Rolled Bar 2240 87 00 1800 80 00 1722 27 77 17 00 26 00 16 00 24 00 1500 21 00 13 00 14 50 On manufactured articles the reduction of duty was in like pro portion. It will be admitted that this tariff was very far from pro tective in its purposes. The manifest object was, to get rid of the whole protective system, without a violent shock to industries accus tomed to unnatural conditions. What was the effect ? Under the " first completely protective tariff," as Mr. Carey styles that of 1828, imports of iron increased faster than domestic produc tion. Under this system of rapid reduction of duties, smelting by IROX. THE COMPROMISE TARIFF. 189 the aid of anthracite was commenced, new iron- works sprang into existence in every year, the domestic production was increased 73| per cent., and the imports of foreign iron were diminished. In 1832, the last fiscal year of the protective tariff, 74,000 tons of pig and bar were imported. At the same time, according to the statistics upon which Mr. Carey relies, we were producing 200,000 tons of iron. Twenty-seven per cent, of the unmanufactured iron used therefore came from Europe. But in 1840, the last year under this tariff in which the production of iron is known, we produced 347,000 tons, an increase of 73-J per cent, in eight years. In the same year there were imported of pig 110,314 cwt., of bar rolled 656,574 cwt., and of bar hammered 576,381 cwt. ; total 1,343,269 cwt., or 67,163 tons, a decrease in eight years of 6,603 tons, or 9 per cent. In 1832, under protection, the entire consumption was 274,000 tons, c>f which 27 per cent, was imported. In 1840, under non-protection, we consumed 414,163 tons, of which only 16 per cent, was imported. These facts may astonish, as they will probably annoy, those who have maintained that the reduced duties of that period were fatal to the iron interest in this country ; but they rest on no guess by any theorist on no doubtful authority. The Treasury reports state the importations of iron, and the quantity produced in the two years is stated by all authorities, and by Mr. Carey himself, as just given. Eight years of reduced duties, then, increased domestic produc tion 73^ per cent., and decreased importations 9|- per cent. Eight years of "British free trade," so called, reduced the proportion of foreign iron consumed by this country from 27 per cent, to 16 per cent. It is true, the domestic production was less in 1841, if statements generally accepted are true. Concerning the production of that year and 1842 there is dispute. But no one questions the fact that the product of 1840 was 347,000 tons. Each year of census is a stum bling-block in the way of those who seek to shape facts to theories. Since the production of that year is undisputed, it affords the only sure and satisfactory test of the effect of this tariff. In spite of the panic of 1837, the disorder and contraction of the currency, the gen eral disaster and bankruptcy which followed the suspension of the banks, the production of iron in 1840 was 73-J per cent, greater than in 1832, while the importations were 9 per cent. less. The non- protective tariff, tested by statistics, proves to have given more real protection than the protective tariff. Nor was this decreased importation of raw iron caused or bal- 190 DOES PROTECTION PROTECT? anced by an increased importation of manufactured iron. In 1832, there were imported of iron manufactures, covered by specific du ties by weight, an aggregate of 11,124 tons, and in 1840 there were imported of the same articles only 9,581 tons a decrease of 1,543, or 14 per cent. The tables following this chapter give the quantities of the leading articles. It thus appears that the manu factured product was more thoroughly excluded by domestic pro duction than the raw material. According to the census of 1840, the value of the products of iron was $50,820,907, but, according to the Treasury records, the value of all iron imported was $7,241,407 ; the total consumption was, therefore, $58,062,314, and the imports were less than 13 per cent. But in 1832, though the value of prod ucts of iron is not accurately known, it cannot reasonably be estimated at more than twenty-five millions, and the proportion of imports to consumption was about 27 per cent. In eight years, we had progressed about half-way to absolute independence of all foreign nations, as to iron and its manufactures. It does not shake this reasoning to observe that the importations of iron were much larger in the time of inflation. The effect of an inflated currency is to increase importations, nor will it be forgotten that the duties in 1836 were higher than in 1840. If high duties protect, why did not the higher duties of 1836 prevent an importa tion larger than that of 1840 ? The truth is again illustrated, that importations depend not upon duties so much as upon prices. In 1832, as has been shown, high duties had caused prices to stand still for years, while in other countries the price of iron was being reduced by great improvements. Following this cause of high prices came another, the expansion of the currency. The bank cir culation rose from $61,323,898 in 1830, to $149,135,190 in 1837 ; and in that wild hour of speculation, when all things bore fictitious- values, pig-iron sold for $52 a ton, and bar for $115 a ton. It is not strange that sellers sought such a market for their wares. Yet the excessive importations in 1836 and 1837 did not check domestic production. To this fact, strangely enough, Mr. Carey testifies when he says, " The production of iron continued to increase in the three years which followed," " smelting by the aid of anthracite was first introduced here in 1837 ;" " by the close of 1841, six such furnaces had been put in blast." Facts which Mr. Carey does not accidentally state may be added. It was in 1836 that the first wrought-iron was used for gas and water pipes ; in that year sixty- one steamers were built in Pittsburg, and, in the year 1837, wire IRON. THE COMPROMISE TARIFF. 191 factories in that town were supplying the whole Mississippi Valley, one using 600 tons of iron yearly. In 1838, Howe s solid-headed pin, and the Collins axes with punched eyes, were patented, as well as cast-iron car- wheels and improved ploughs ; and, in 1839, Baldwin received from England application to build locomotives for English ^railways. In 1840, Griffiths was excluding foreign saws with his own; Sanford had pushed his skate-manufacture to success. At the same time other manufactures throve ; the pin-machines at Derby amazed an English traveller, for each did the work of fifty- nine workmen ; and our clocks began to travel over all Europe. In the same year an establishment in New York turned out fifty tons of horseshoes daily, and sold them ready for use at five cents a pound. The hardware manufactures, also, were noted as extending their enterprises rapidly, and, having sold their goods direct to the trade since 1837, were doing an increasing and paying business. Best proof of all surest proof that the iron manufacture was vigor ously growing there were built, in 1837, 224 miles of railroad, and 416 in 1838, and 389 in 1839, and 516 in 1840, and 717 in 1841 ; so that, in the years 1840 and 1841, not less than 98,000 tons of iron were laid down in track and repairs, or used in engines and cars. Of this amount 52,000 tons were imported ; the rest was of domestic ^manufacture. In the same years 141 new steamers were built, each requiring many tons of iron. These incidents prove that the production and manufacture of iron had not been checked by the large foreign importations, but that, when prostration of business and reduction of prices stopped importations, the domestic manu facture, still advancing, supplied the demand, and, as we have seen, excluded yearly a larger share of the foreign products. Such is the true history of the iron interest from 1832 to 1840, under the reduced duties. And, so inconvenient was it to explain, and so impossible was it to deny the increased production of iron until 1840, that Mr. Carey, in discussing the history of this period, ab solutely ignores the crisis of 1837 ! It seems amazing that any writer addressing intelligent readers should venture upon such a step, but in his reply to Mr. Wells, in the second letter devoted to this period, there occurs not one word to indicate that the writer had ever heard of any disaster or disorder in that period prior to 1841 ! For, the quantity produced in 1840 being known, it was not possible to refer to the currency crisis preceding, without supplying to every reader a more reasonable explanation than Mr. Carey chooses to give of the reduction of prices in 1841 and 1842. Such 192 DOES PROTECTION PROTECT? treatment may be adroit and shrewd, but it is for candid readers to say whether it is worthy of any good cause. The " Iron Manufacturer s Guide," a work prepared by the Iron Association with great labor, gives a record of furnaces, with the date of their erection. By examination of this list, it appears that one hundred and eighteen furnaces are recorded as having been built in the years 1833- 42, inclusive, as follows : FUKNACES BUILT. Pennsylvania. Other States. ia33 .. 3 7 1834 2 7 1835 7 8 fi 1837 5 13 1838 7 5 Pennsylvania. Other States. 1839 5 5 1840 4 7 1841 6 3 1842 8 2 53 65 Other furnaces are mentioned, which appear to have been built during the same period, but the precise date is not stated. From this record it will be seen that the excessive importations of 1836 and 1837 did not prevent a rapid increase of domestic production in those years, and that the production continued to increase, in spite of the rapid removal of duties, and in spite of the panic and disorder of currency. Nor does this record show the whole number of fur naces then built, as we have stated ; the number, indeed, does not match the known increase of production. The tariff of reduced duties, during eight years to 1841, did not break down the iron manufacture, but so stimulated and strengthened it, that foreign iron had become less than 13 per cent, of the con sumption. It remains to ascertain the cause of depression in 1841 and 1842. The movement from a depreciated and worthless paper currency ( f to specie values involves inevitable distress, and temporary disorder of business. In the year 1841, the banks moved toward specie payments, and resumption was reached in 1842. .In the process, a large quantity of discredited paper, then in circulation, was thrown out, and the currency was severely contracted ; prices fell, people stopped buying, specie was scarce, and for the time no sound cur rency sufficiently supplied its place. Distress was the unavoidable consequence, yet it was the sure sign of better days. A represent ative from Indiana, in the year 1844, described the change thus : " A return to a rigid system of economy was apparent everywhere ; all men were trying to live within their means ; there were fewer debts contracted in 1841 and 1842 than there had been during any IRON. THE COMPROMISE TARIFF. 193 twenty-four months for more than fifteen years past ; the evils of the credit system were felt and acknowledged by every man, people everywhere were struggling to get out of debt, and limiting their expenditures to the least possible amount." Is this condition, so clearly described, one of disease and paralysis, or of returning health ? Trade was greatly retarded for the time, but were the productive energies of the country destroyed or paralyzed by severe economy ? Was this prostration of business caused by the tariff of 1833, or by the abandonment of a depreciated currency, and the return to specie payments ? Mr. Carey says it was caused by the tariff. That his language may not be misunderstood, we quote : " With 1841 there came, however, as already shown, the fifth reduction of duty, un der the Carolina nullification tariff of 1833." " With each succeeding day, therefore, the societary movement became more completely paralyzed, until there was produced a state of things wholly without parallel in the country s history." It is not directly asserted, but it is implied, that this fifth reduc* tion of duty was the cause of all distress. Is it possible that Mr. Carey was so careless as not to observe that this same fifth reduction came, not " with 1841," but after December 31, 1841, and that the distress and prostration preceded it ? When that prostration oc curred, the duties were still the same that they were in 1840, when our mills and factories were active. Which is the more reasonable, to suppose that the expectation of a reduction of duty from $15 to $13 a ton on bar-iron caused people to stop making iron, or to sup pose that the contraction of the banks, the refusal of depreciated currency, the change of prices from one currency to another, and the universal return to economy and patient industry, caused the pros tration ? May not the question be left to reasoning men, without argument ? Of a paper circulation of $107,290,204 in use, January 1, 1841, nearly fifty millions were virtually thrown out and discredited in a single year, and twenty-four millions were withdrawn altogether be fore January 1, 1842. To ignore such a fact as this, and to assign instead of it the prospect of a change of duty for eight years pro vided for by law as the cause of the prostration in 1841, is indeed a mode of reasoning in which its author can find few equals. The change of duty, when it came, did not cause an importation of iron as great as the average of the two years preceding, nor materially greater than that of ten years before, under the extreme protection of 1832. To ascribe to such importation the prostration of manufac- 14 194 DOES PROTECTION PROTECT? tures would be absurd ; but to ascribe the prostration to the mere apprehension of it, passes comment. Mr. Carey studiously represents this period as one of absolute pa ralysis, and asserts without an atom of proof that the production of pig-iron fell to 220,000 tons in 1842. A single fact shows whether "the societary movement" was "completely paralyzed." The record of produce moved by the Erie Canal to tide-water shows that the value of manufactured prod ucts moved not from the sea to a consumer, be it observed, but from the interior to the sea was $1,312,231 in 1840, and $2,159,832 in 1841, and $1,949,541 in 1842. That no difference of value may seem to account for this increase, it may be added that the quan tity of manufactured products so moved to the sea in 1840 was 1,267 tons, and in 1841 it was 3,702 tons, and 2,659 in 1842. In 1843, after the tariff had taken effect, there was a reduction to 2,077, and in 1844 a startling decline to 853 tons. Is this a " paralysis of the societary movement, more complete with each succeeding day," when the quantity of manufactured products sent forward to market more than doubles in a single year ? Or has Mr. Carey once more drawn upon his imagination for his facts ? In the year 1841, according to the records of the Iron Association, as already stated, six new furnaces went into operation in Pennsyl vania, and four in other States; and in 1842 eight went into opera tion in Pennsylvania, and two in other States. Nor were the furnaces alone increased. In 1841 a nail-factory was built at Weymouth, Massachusetts ; the Hecla rolling-mill at Pittsburg, and the Brady s Bend rolling-mill were built. In 1842 the Agawam rolling-mill of Massachusetts was rebuilt, the Fall River was built, the Cold Spring of Connecticut, the Heshborn and Crescent of Pennsylvania, and the Falcon of Ohio, were built. These facts appear in the statistics of the Iron Association. "With each succeeding day, therefore, the socie tary movement became more completely paralyzed," and the quantity of manufactured products sent to market doubled, ten new blast furnaces were built each year", and several new rolling-mills ! Early in 1844, in an elaborate speech in favor of protective duties on iron, Mr. Bidlack, of Pennsylvania, made some statements deserv ing of notice, as follows : " It is now only about four years since the first successful experiment " (in smelting iron w T ith anthracite coal) " was made, and there have already been erected no less than twenty furnaces on this principle, sixteen in Pennsylvania and four in New Jersey, and others are about to be erected. These furnaces are IROX. THE COMPROMISE TARIFF. 195 capable alone of producing 60,000 or 70,000 tons, being more than one-fifth of the whole production from charcoal in the United States." Now, Mr. Carey himself states that there were six such anthracite furnaces in 1841, and we find twenty at the close of 1843. Are we to suppose that none of them were erected and put in operation in the year 1842 ? But Mr. Bidlack goes on to name " six furnaces in Columbia County," and two more near Danville ; " these have been built within four years." Had these furnaces been built within one year (since the tariff), would he not have said so ? Again, he tells us of a new and extensive rolling-mill just put in operation which " Vas commenced in 1841," and of another furnace and rolling-mill just starting, " after a suspension of about a year," and this was early in 1844. The suspension, then, must have taken place in 1843, after the tariff was passed. These are given as samples only of indications, which meet every reader of the records of those times, and they prove not that there was no depression, but that it was not a prostration of the whole iron interest, as some have represented, followed by a magical revival as soon as the tariff was passed. No one can read that new furnaces and mills were built, and new modes of manufacture adopted in the years 1841 and 1842, without realizing that the statements of Mr. Carey are not in strict accord with facts. People do not build new mills and put money into new furnaces, when half the furnaces in the country are idle. The larger furnaces would hold out longest ; more than half the furnaces in the country must therefore have been idle in 1842, if, as Mr. Carey says, "there is the best reason for believing " the product of pig-iron was reduced from 347,000 tons, in 1840, to less than 200,000 tons. The produc tion in the year 1840 was 347,000 tons, and in that year, and in 1841 and 1842, furnaces of the capacity of 44,000 tons more were built and put into operation, so that the productive power increased at the least to 376,000 or 387,000 tons before the adoption of the protective tariff, and yet Mr. Carey asserts that less than 200,000 tons were actually produced ! In this same period of alleged complete paralysis, we began to make railroad iron for our own railroads. The first rail-mill was built, it is stated, in 1841 ; but in the " Iron Manufacturer s Guide " it is stated that the Mount Savage, Md., was built in 1839, and the Cosalo, Pa., " in 1839 or 1840," and the Brady s Bend, Pa., in 1841. Once more Mr. Carey seems to be at war with facts, for he asserts that, after the passage of the tariff of 1842, the first rolling-mill for 196 DOES PROTECTION PROTECT? railroad iron "made its appearance on American soil." In this same period of " complete paralysis," American mechanics built locomotives to order for English railroads. In 1842 it was stated in Congress that American locomotives were then rolling on railroads in England, Russia, Prussia, and Austria. Under the system of pro tection, England began to supply our railroads with rails. But, Under the system of protection, we began to supply England "with railroad engines. To those who believe that the high wages of labor in this country make protection necessary, it may be difficult to explain how labor of the most costly kind can be put into a machine so expensive and ponderous for transportation, and that ma chine, shipped across the ocean, can be sold at a rate defying foreign competition, at a time when, Mr. Carey asserts, the pauper labor of England was prostrating our industry, and making it impossible for us to produce even the rudest and simplest form of iron ! In 1842, iron sold here for $25, and in England for $16.50 per ton; wages here were fully 20 per cent, higher than in England; yet our labor was so much more intelligent, and therefore efficient, that the more costly iron, worked up by more costly labor, was shipped to England in the form of locomotives. What was the " prostration of the iron interest " in 1841- 42 ? A very simple explanation is consistent with all the reliable records. Though the price of iron had fallen to $25 a ton, the importation of pig-iron was only 18,694 tons not enough to interfere in the least degree with our production. But the whole people had begun to economize, and to consume as little as possible. __The production of iron had been pushed fully to the consuming power of the country. The fall in price had driven men to apply new methods, and the cheaper method of smelting with anthracite or coke began to be adopted. In 1837 the first anthracite furnace was built; two more followed in 1839, two more in 1840, two in 1841, and three in 1842. These ten furnaces, producing perhaps thirty thousand tons certainly far more than the whole quantity imported were offering iron for sale at low rates in a market already stocked beyond the power of consumption. The country was struggling out of debt, and re ducing consumption, at the very time that the producing power was thus increased, not only by the building of anthracite furnaces, but by the opening of furnaces with coked bituminous coal, and the building of twenty-three new charcoal furnaces, mentioned in the "Iron Manufacturer s Guide" as erected in 1840- 42. These, no doubt, were in localities most favored by natural advantages, and IRON. THE COMPROMISE TARIFF. 197 able to supply the iron at low rates. With the market in such a condition, furnaces less advantageously situated, or adhering to more expensive methods, were forced to stop. Accordingly, it is stated in a record which appears in De Bow s "Industrial Re sources," apparently taken from a memorial of the Pennsylvania iron manufacturers to Congress in 1849, that thirty-five iron works failed in Pennsylvania in the years 1840- 42, inclusive though, ac cording to the same table, a larger number were put in operation in the very same years. And this change, from old and expensive to new and cheaper methods, was the " complete paralysis " of the iron manufacture which Mr. Carey finds " the best reason for believing " reduced the production of pig-iron to less than 200,000 tons in the year 1842. How long, it may be fairly asked, would our beds of anthracite have slept undisturbed, had protection sheltered our iron-makers from competition, and made it profitable to continue making iron in the most expensive locations and by the most wasteful processes? For twenty years England had been using mineral coal for fuel, and had so vastly increased her production, that at this very time her furnaces, by mutual agreement, stopped work for a time, to let the market relieve itself. The price in England had been reduced from about $40 a ton in 1828, to $16.50 in 1842, and to $20 in 1841. Yet, through all the era of protection, and through all the prosperity and extravagant prices of 1836, our furnaces continued to use old methods ; and it was only when revulsion and trial came, that they began to use the anthracite that lay in masses beneath their feet. In the year of panic, 1837, the first furnace was built to test the anthracite ; in the year of the second suspension, 1839, two such furnaces were built, and in the three years of " hard times" and low prices, 1840- 42, no less than seven anthracite furnaces were erected. At the same time, the use of this coal in working iron was more generally adopted. The production increased from 738,697 tons in 1838, to 818,402 in 1839, to 864,384 in 1840, and 959,972 in 1841, and to 1,108,418, ris ing for the first time above one million tons, in the very year when Mr. Carey represents that the paralysis was most complete ! Jit is plain that the iron manufacture was greatly stimulated by the low cost of iron. It is equally plain that the making of iron, instead of being prostrated beyond all parallel, was simply changing its method from the old to the new, and preparing for a real and solid progress. This period, 1840 to 1842, may therefore be styled the new-birth of the iron manufacture. From the trials which forced it to better methods, dates its modern growth. 198 DOES PROTECTION PROTECT? of co *&* |SSv-IJ gjjjgg ffe s strfs ssi !* i- c^ T t ci < ;OOOT-.< ifeS ? sP^S ?TnS >THOCOOO< <N"<N icTco ^ o *- t- S "Si "" oc F as o IS1S8IS 1112 1 1- <M TH C "* Tf < 1 5: GO ic o4 TH S (T-lT-IOOO ic o^tie S THCCCCC oo ci p TH . ocacacxc IRON. THE COMPROMISE TARIFF. 199 IMPORTS OF IRON. By Quantities (Treasury Report of 1845) Continued. YEAR. Anvils. Blacksmiths Hammers. Cables and Chains. Braziers Rods. Wood Screws. * Implements. 1824. Lbs. 116387 Lbs. 10 144 Lbs. 210 550 Lbs. 2 128 Values. $5 206 Values. $6 095 1825 1826 1827 596.426 407,344 1,011 412 72,897 22.153 41 003 423,766 431,766 388 893 224,086 498,404 771 944 67.316 86,285 112 790 80,621 81.457 105 329 1828. 972 129 58 855 847 655 730 031 87 100 119 S49 1829.... 699,836 65.896 810372 169,531 61 967 77 262 1830 677.246 75 616 540628 218428 66 817 95 004 1831. . . 1 253450 116 166 1 004540 487 013 112 545 118 743 1832.. 1 393 295 90637 2 454 360 525 313 133 698 133 677 1833 943. 203 63,418 4,216.261 506,447 110343 97 071 1834 989.091 76,888 2,931 936 297,529 141 560 114003 1835.. 1 386 293 120 328 2 023 332 254 665 150 063 97 626 1836 1 573 367 180 339 2 925 527 537 817 161 769 137 378 1837.... 1,177.735 93.931 2.&30.878 450,817 145 565 133 949 lass 524,343 60.740 2,089,259 319,474 107 256 49 520 1839 1 026.497 116 271 3 486 810 852 695 166 570 88 126 1840. 324698 35 729 2 114 760 433 620 131 986 63 515 1841 558237 36 150 3 825 038 367 090 138 527 60 035 1842 518.361 45.231 2,488.852 1,178,374 113 469 52953 1843 266,452 19 307 884259 378 415 7 551 10 602 1844. 894565 62528 2 390 195 805 906 6 135 1845.... 1846 1,270,451 103 411 2 374 925 305883 64 177 Ibs f Includes Cutting-Knives, Scythes, Sickles, Reaping-Hooks, Spades, and Shovels. IMPORTS OP IRON AND ITS PRODUCTS. JBy Values ( Treasury Report of 1845). YEARS Pig- SteeL Scrap. BAR. M Specific. Ad Valorem. Total Value. Rolled. Hammered. 1821 $131,291 $1.213 041 $238 400 $1,630,129 $3 212 861 1822 18<) 613 l!864, ? 868 387^818 2 767 ? 757 s!21o 056 1823. . 224595 l, 89l 635 398^279 2!568l842 5,^083^51 1824. $3,444 236,405 . 962,897 $483,686 326,411 2,505,291 4,518,134 1825. 36.513 291,515 224.497 1,562,146 393,658 3,312.758 5,821,087 1826. 67,004 384,235 223,259 1,590.350 355,152 2,831,333 5,451,333 1827: 46.881 310,197 . .. 347,792 1,323.749 448,154 3.525,433 6,002,206 1828. 93,025 430,425 . 441,000 2.141,178 620,933 3,559.982 7,286.543 1829. 28,811 289,831 119,326 1,884,049 330,278 3,100,630 5,752,925 1830. 25,644 291257 226,336 1,730,375 283,702 3.372.146 5,929,460 1831. 160.681 399:635 544,664 1,260,166 468,912 4:358.921 7.192,979 1832. 222.303 645,510 701.549 1,929,493 608,733 4,697,512 8,805,100 1833. 217,668 523,116 $24.( 35 1,002,750 1,837,473 773,855 3,361,582 7,740,479 1&34. 270,325 554.150 33,243 1,187.236 1,742,883 656.000 4.090,621 8,534,458 1835. 289.770 576,988 11.609 1,050,152 1,641,859 524,155 4,827,461 8.921.503 1836. 272.978 686,141 28.224 2,131.828 1,891.214 879.465 7,001,404 12.891,254 1837. 422.929 804.817 18,391 2.573,367 2.017,346 1,038,382 5,488,311 12,36/3,543 1838. 319.099 487.334 7,567 1,855,121 1,166,196 543.779 3,069,507 7.418,603 1839. 285.300 771.804 10,161 3.181,180 2.054.094 922,447 5,585,063 12,810.049 1840. 114.562 528,716 15,749 1,707.649 1.689,831 609.671 2,575,229 7.241.407 1841. 228.228 609,201 10.587 2,172,278 1,614,619 827.820 3,428,140 8.885.8-23 1842. 295,264 597,317 8,207 2,053,453 1,041.410 652,583 2.919.498 j 7,567,752 1843. 48.251 201,772 2,743 511.282 327,550 977,849 734,737 ; 2,103.684 1844. 200,522 487,462 43,396 1,065,582 583.065 531,659 2,782.137 5.693.823 1845.. 506.291 775,675 119.740 1,691,748 872,157 908,043 4,169,745 9,0-13.399 1846.. 489,573 1.234,408 56,534 1,127,418 1,165,429 951,868 3,933,817 ; 8,959,047 The figures for 1845 and 1846, as far as I can find them, are added to the tables from the report of 1845, which give none later than 1844. 200 DOES PROTECTION PROTECT? ANTHRACITE COAL TRADE. [FROM THE MINER S JOURNAL.] The following Table exhibits the Anthracite Coal sent to Market from the different regions in Pennsylvania, from the commencement of the Trade, in 1820, to 1868, inclusive, to which is appended the aggregate of Anthracite, Semi-Anthracite, and Bitum.lnous Coal, moved toward the seaboard. HARD ANTHRACITES. ill Years. SCHUYLKILL. . \ \>TJ Sold on Line of Schuyl. LMHIGH. Canal. R. Road. Total. Pine- Grove. Little Schuyl. Canal. L. Valley Railr ad. Lehigh * Susq. Railroad. Total. 1820 365 1,073 2*240 5,823 9541 28,393 31,280 32,074 30,232 25,110 V.bes 165,740 418,235 471,030 577,652 1,058,054 365 1,073 2,240 6,823 9,541 28,393 31,280 32,074 30,232 25,110 1821 .... 1822 1823 1,480 1,128 1,480 1,128 1824 1825 1826 1827 1828 1,567 6,500 16,767 31,360 47,284 ::: 1,567 6,500 16,767 31,360 47,284 "3.154 3,332 1829 1830 . . 79,973 79,973 186,059 89,984 *" " " 186,059 89,984 7,486 5,321 6,150 10,048 13,429 19,429 18,571 17,863 21,749 28,775 30,390 166,131 41,750 40,966 70,000 123,000 106,244 131,250 148,211 223,902 213,615 221,025 166,131 41,750 40,966 70,000 123,000 106,244 131,250 148,211 223,902 213,615 221,025 1,319,963 225,318 143,037 272,546 267,793 377,002 429,453 517,116 633,507 670,321 781,656 1831 1832 1833 1834 1835 1836 1837 1838 1839 1840 1841 1842 1843 1844 1845 1846 1847 1848 1849 1850 1851 1852 1853 1854 1855 1856 1857 1858 1859 1860 1861 1862 1863 1864 1865 1866 1867 1868 81,854 209,271 252,971 226,692 339,508 432,045 523,152 433,875 442,608 3,031,960 452,291 584,692 491,602 447,058 398,887 263,587 3,440 222,693 436,602 489,208 "850 49,902 230,254 441,491 820,237 1,233,142 1,360,681 1,216,233 1,115,918 81,854 209,271 252,971 226,692 339,508 432,045 523,152 433,875 442,608 17,000 13,000 20,539 50,539 23,860 17,653 32,381 22,905 34,916 47,928 58,926 67,457 61,530 78,299 14",bbo 40,000 34,000 41,000 35,000 31,000 13,000 9,000 3,031,960 452,291 585,542 541,504 677,312 840,378 1,083,796 1,236,582 1,583,374 1,652,835 1,605,126 217,000 20,000 40,000 37,000 31,000 57,000 74,000 91,000 106,401 162,626 174,758 171,725 28,924 41,223 40,584 34,619 60,000 90,000 155,460 226,610 252,837 239,290 1,319,963 225,318 143,037 272,546 267,793 377,002 429,453 517,116 633,507 670,321 781,656 3.790,360 288,030 579,156 800,038 907, 354 1,105,263 1,169,453 1,275,989 1,323,804 1,372,021 6,468,708 1,423,977 1,650,270 1,650,912 1,582,248 1,987,854 2,213,292 2,088,903 1,709,552 1,542,645 1,632,932 10,358,740 1,712,007 2,229,426 2,450,950 2,470,943 2,895,208 3,318,555 3,258,356 2,985,541 2,866,449 3,004,953 445,855 70,919 none. 66,543 80,660 91,462 112,213 157,152 145,012 137,376 125,262 793,788 211,960 310,307 325,099 389,295 444,184 426,208 454,515 346,877 383,931 366,343 1,169,547 207863 312,367 322,211 394,078 444,160 471,861 620,499 511,977 441,166 554,774 4,317,749 690,456 964,224 1,072,136 1,054,309 1,207,186 1,275,050 1.186,230 900,314 909,000 1,050,659 4,317,749 690,456 964,224 1,072,136 1,054,309 1,207,186 1,284,113 1,351,970 1,318,541 1,380,030 1,628,311 11,951,286 1,821,674 1,738,377 1,351,054 1,894,713 2,054,669 1,822,535 2,128,867 2,062,44ft 2,507,582 9,709,803 1,356,688 1,183,570 981,729 885,842 1,000,500 1,022,740 1,297,047 1,030,235 987,628 17,482,585 1,878,156 1,460,832 2,305,606 3,065,216 3,065,577 3,090,814 3,714,644 3,446,826 3,574,874 27,192,390 3,270,516 2,697,489 2,890,598 3,433,265 3,642,218 3,735,802 4,633,487 4,334,820 4,414,356 986,599 152,957 167,357 183,985 212,794 211,216 157,840 167,833 157,817 163,633 3,658,719 323,136 171,432 249,451 385,788 537,498 585,534 617,278 549,097 389,994 4,181,156 608,877 435,320 545,916 671,589 748,448 746,629 1,010,905 1,107,826 1,268,573 10,309,564 1.091,032 994,705 396,227 699,558 758,087 888,784 1,066,303 1,006,604 989,947 1,641,720 730,642 743,672 882,573 1,195,155 1,295,419 1,402,277 1,730,475 1,948,385 2,603,103 26,458,061 49,503,881 73,804,982 3,057,945 8,468,475 12,654,000 24,105,781 14,143,411 1,058,054 35,157,158 IRON. THE COMPROMISE TARIFF. 201 ANTHRACITE COAL TRADE (Continued). HARD ANTHRACITES. Year*. 1820.. WYOMING RKQION. SHAMO- Kl.N. AeesK- GATS. Annual Increase. AGGBB- GATE OP ALL KINDS. BvLe- nigh R.R. Del. and Hudson Coal Co. Penna. Coal Co. .By Canals. G. West ern R. R. L.4B. R. R. Total 365 1,073 3,720 6,951 11,108 34,893 48,047 63,434 77,516 112,083 "708 2,647 3,231 4,157; 23,785 13,154 15,387 14,082 34,567 62,651 2,0861 187,051 i 123,877 dill, 112 184,122 1 23,359 i 195,327! 140,747; 79,805 45,982 95,589 148,445 155,180 367,252 382,163 330,992 5:>.::< 4 205,929 128,403 103,495 1,008,394 570,445 197,169 734,690 654,263 256,445 rf320,164 93,460; 1,092,678 626,422 ^522,663 rf!21,799 1,937,064, 564,388 <?725,866 _ , .<-:;, < <4n 155,508 1,193,801 365 23,195 38,243 37,384 18,336 60,538 83,712 103,691 109,818 157,476 1821.. 1822.. 1823.. 1824.. 1825.. 1826.. 1827.. 1828 1829.. 1830.. 1831.. 1 -:- .. 1833.. :::: 7,000 7,000 I 7,000 43,000 54,000 84,600 111,777 7,000 43,000 54,000 359,190 174,734 176,820 363,871 487,748 376,636 660,758 684,117 879,444 738,697 818,402 636,903 232,870 213,329 436,849 580,180 448,262 610,727 792,549 1,032,894 867,780 999,953 84,600 111,777 43,700 90,000 103,861 115,387 78,207 122,300 ii^g so 1834.. mi.. BM.. 1837.. 1838.. 1839.. 1840.. 1841.. :::: 43.700 90,000 103,861 115,387 78,207 122,300 .... .... 846,332 148,470 192,270 846,832 148,470 192,270 252,599 285,605 365,911 451,836 518,389 583,067 685,196 732,910 11,930 15,505 21,463 10,000 10,000 13,087 10,000 12,572 14.904 19,356 19,650 5,261,197 864,384 959,973 1,108,418 1,263,598 1,630,850 2,013,013 2,344,005 2,882,309 3,089,238 3,217,641 6,015,443 1,027,251 1,115,367 1,251,645 1,314,843 1,732,813 2,123,443 2,520,653 3,088,170 3,364,977 3,583,628 1842.. 1843.. 1844.. 1845.. 1846.. 1847.. 1848.. 1849.. 1850.. 1851.. 1852.. 1853.. 1854.. 1855.. 1856.. 1857.. 1858. . 1859.. I860.. 1861.. 1862.. 1863.. 1864.. 1865.. inc.. 1867.. 1868.. "5,886 10,466 10,425 19,590 205,253 227.605 251,005 273,435 320,000 388.203 437,500 454,240 111,014 316,017 426,164 512,659 496,648 504,S03 612,500 536,008 630,056 688,854 47,346 58,000 114,906 178.401 192,503 284,398 237,271 259,080 133,965 187,000 305,530 490,023 683,411 829,435 2 lb ,042 223,806 46,367 32,156 J5,072 41,890 26,235 39,232 50,209 44,270 37,959 69.644 71,399 2,897,981 441403 479,078 497.105 494,327 440,944 565,460 499,650 480,699 348,789 591,000 1,371,905 243,250 336,000 319,341 442,511 492,689 464,039 510,631 407,914 346,430 453,548 4,216,253 827,823 1,156,167 1,284,500 1,475,732 1,608,478 1,771,511 1,972,581 1,952,603 2,186,094 2,731,236 146,537 Jwi 24,899 25,846 15,500 63,500 116,117 137,406 155,806 135,893 180,753 19,373,429 3,321,136 4,329,530 4,899,975 5,097,144 5,831,834 6,486,097 6,751,542 6,431,378 6,524,838 7,517,516 21,109,575 3,736,186 4,876,183 5,510.664 5,959.639 6,903,498 7,556,030 7,858,959 7,593.118 7,774,388 8,889,787 66,169,401 9,629,455 8,980,646 9,015,504 11,580,356 11,747,984 11,340,675 14,337,950 14,541,498 15,848,410 438,066 100,277 111,073 26^723 *9 ,314 250,694 344,218 452,935 811,316 4,838,455 499,568 726,644 637,066 828,150 852,136 759,575 1,302,894 1, 42-2*29 1,611,113 4,834,723 4,016,353 701,5231 435,306 629,6571 316,765 601,091 559,246 662,904 662,721 759,544 630,142 577,494 358,463 535,385 569,401 861,730 451,475 953,855 429,642 2,629,364 1,080,227 1,104,319 1,094,315 1,223,165 1,302,457 1,007,074 1,519,538 1,719,321 1,728,785 433,848 519,777 648,399 767,661 964,753 929,374 674,744 1,050,313 1,184,110 1,291,839 12,961,725 2,941,817 3,055,140 3,145,770 3,759,610 3,960,836 3,256,658 4,736,616 5,328,322 5,990,813 875,641 210,108 241,451 241,642 274,936 333,478 457,162 557,161 485,697 492,265 56,954,864 8,143,938 7,621,354 7,499,555 9,427,619 9,998,046 9,272,157 12,055,797 12,216,215 13,405,016 ^,590,983 17,229,658 11,11 1,905 9,803,569 j 14,408,565 8,464,818 58,107,921 4,627,008 171,578,026 201,362,074 In making up this table, the coal transported over all the railroads is given in full but a large portion of the coal is transported over two or more roads from the same regions. In our tables the coal reported double is separated, deducted and credited to the different re gions. 202 DOES PROTECTION PROTECT? CHAPTER XV. IRON. THE TARIFF OF 1842. THE protective tariff of 1842, passed in August of that year, re stored hih duties on iron, and imposed duties higher than ever before were imposed on steel, castings, anchors, anvils, screws, sad irons, hinges, axle-trees, wrought iron, and wire, and the whole list of articles admitted under ad-valorem duties, such as axes, adzes, hatchets, knives, sickles, scythes, spades, shovels, saddlery, vices, chisels, etc. The importance of this tariff in the history of the iron interest justifies the following detailed statement, taken from the Treasury report of 1845, in which the duty and its equivalent pro portion to the cost of the article is stated : Castings, other 31.78 Blacksmith s Hammers 52.46 Anvils 45.09 Anchors 62.91 Steam, Gas, or Water Pipes Mill and other Saws Malleable Iron or Castings 46.22 Wrought Iron 88.03 Chains 101.02 Chain Cables 87.20 Spikes 168.14 Nails, cut ... 39.00 " wrought 58.31 Wood Screws 60.70 Tacks, Brads, Springs, etc 49.20 Pig Iron, duty percentage Scrap Iron 48.83 Rolled Iron 75.22 Hammered Iron 35.56 Steel, cast 11.65 " other 38.24 Band Iron 70.47 Hoop Iron 115.98 Sheet Iron 60.20 Nail Rods 98.99 Braziers 1 Rods 56.10 Axle-trees 41.03 Hinges 41.14 Sad-irons 87.54 Glazed Hollow- ware 33.76 Castings, Vessels 51.31 Pins and wire were classified, and bore duties, according to quali ty, from 18.42 per cent, to 70.31 per cent. This was the tariff of 1842, which continued in operation until December 1, 1846, and we have now to ascertain its effect. At the outset we must remember that the iron interest, when this tariff was passed, was just entering upon the great change spoken of already, from older methods to the gen eral use of anthracite fuel. This change had been forced^by the pressure of 1837 to 1842, and, as we have seen, it had increased the consumption of anthracite coal to 1,108,418 pounds in 1842, many mills having adopted the use of the mineral coal, while at least ten anthracite furnaces were in existence at the close of 1842. It need not be said that a change so important and advantageous, once be gun, must have continued had there been no change of duty. The same tariff which caused it to be commenced would have caused its IRON. THE TARIFF OF 1842. 203 completion, and it may be doubted whether the change would not have been more rapid and thorough had the same conditions of ne cessity and sharp competition been maintained. By the tariff of 1842, foreign competition was checked during the year 1843, and part of 1844 ; but the change still went on, and in consequence the production of iron was still retarded, while old furnaces were being abandoned or modified. That this change actually took place, is proved by the record of consumption of anthracite, which increased 155,180 tons in 1843, in spite of the extreme depression, and 367,252 tons in 1844. In 1845 and 1846 it increased 382,163 tons and 330,990 tons, so that the consumption in 1846 was 2,344,005 tons, against 1,108,418 tons in 1842. This record is proof that the revo lution which had commenced in the production and manufacture of iron was not entirely arrested, and the deliveries by the several lines of transportation show that the whole of this vast increase was sup plied by improvements made before the tariff of 1842 went into effect. The Schuylkill and Lehigh Canals had been delivering since 1822 and 1820 ; the Schuylkill Railway began to deliver in 1841 ; the canals from the Wyoming region in 1842, and the Shamokin in 1839. Not a single new line was opened during the tariff period of 1842- 3 46, except the Lehigh Railway, which made its first delivery of 5,886 tons in 1846, the last year of that tariff. Such a revolution in the iron manufacture having been commenced, due, as we have seen, not to the tariff of 1842, but to the conditions preceding its adoption, it must inevitably have resulted in large in crease of the production of iron without corresponding increase of price as a stimulus in other words, in a healthy growth. That this effect did, to some extent, follow independently of the tariff and in spite of its encouragement to iron-makers to adhere to less economi cal methods, is proved by the fact that after the tariff was removed, when the price, temporarily raised by the duties, had fallen much below the level of 1840 to little more than $20 a ton in 1849 and 1850 the production of pig-iron was 564,000 tons. This increase of over two hundred thousand tons in the decade, we may reasonably infer, is less than that which would have followed had no tariff inter vened to check the general adoption of the most economical methods of manufacture. But, it is said, the production under the high duties and high prices of 1844- 46 was far greater than that of 1850. Was it an ad vantage to the country, then, or to the iron manufacture as a whole if, by taxing the whole people, by enhancing the cost of the raw ma- 204 DOES PROTECTION PROTECT? | terial of that manufacture, men were induced to continue to make iron in the least favorable localities and at the greatest waste of time and labor, when, without interference, they would have been I driven to adopt better and more economical methods? Is the mak ing of a great quantity of pig-iron in itself the chief end of man ? Is a large product the greatest of all blessings, however much it may cost ? Which is better, to keep an industry on stilts, or to push it to a healthy and vigorous progress ? It is at least certain that the tariff of 1842- 46 rendered iron much more costly. Before that tariff was passed, in June, July, and August, 1842, Scotch pig sold for about $25 a ton, and yet American makers at that very time were erecting new furnaces. After that tariff was repealed, pig-iron fell in 1848 to $25, in 1849 to $22.50, and in 1850 to $21 a ton, and even then American furnaces produced more than half a million tons. It is, therefore, plain that the ac tual cost of making pig-iron here, in localities reasonably favorable, and with proper facilities, was not greater than $21 a ton. But, while the tariff was in force, the price went so high that in one month, May, 1845, Scotch pig was sold for $50 and $52.50 a ton in New York, and during that year and the next was never quoted lower than $30. American iron sold at the furnace at prices varying from $30 a ton upward according to locality. The whole iron manufac ture, then, was forced to pay about ten dollars a ton more than the real cost of its material, to enable certain men to continue the pro duction in old modes, while others were adopting the new. Is this truly protecting the iron manufacture ? How greatly the production was thus increased is a matter of dispute. Mr. Carey, devoting to this point his utmost skill in the handling of facts, which, as we have seen, is not small, claims that the production in 1846 reached 758,000 tons, and that a still greater increase in 1847 and 1848 was caused by the tariff, which had then ceased to operate. But, while he claims to have for these statements authority in some " statistics of the Iron and Steel Association," to which the writer has not access, his language betrays the fact that these statistics, whatever they may be, do not absolutely establish any thing, even in his own estimation. Thus, speaking of the pro duct in 1842, he says : " That it was under 200,000 tons, there is the best reason for believing, yet I have always placed it at 220,000." Of 1845 he says : " There exists no certain evidence thereto, and I feel assured that it " (the production) " must have exceeded half a million." That of which Mr. Carey " feels assured," with " no certain IRON. THE TARIFF OF 1842. 2^5 evidence " to sustain him, other people are at liberty to doubt. This language shows that his " statistics " are not derived from actual records, but rather evolved from his inner consciousness. And, again, of the product of 1848, which he asserts was 846,000 tons, he adds : " By no correction of the figures that can be even attempted will it be possible to reduce the quantity to 750,000. Admitting, however, that such a reduction be made," etc. This is not the language of one who has reliable records before him. And again, we find his inner consciousness called upon for statistical information : " That that presents more nearly ~than any other figure the quantity of iron actually produced in the closing years of that prosperous protective period is my firm belief" This in regard to the year 1848, two years after the protective tariff had been repealed ! And again, " As early as 1849, the product was supposed to have fallen off to 650,000." These phrases show that Mr. Carey is dealing not with statistical records of any kind, but with guesses. Yet in the same chapter he abuses Mr. Wells, because that official had not copied these guesses as established facts ! It is proper to observe that in the report by Secretary Meredith, in 1849, there appears a statement as to the production of iron in Pennsylvania, prepared by S. J. Reeves from data obtained by a committee appointed in 1846, by the Iron Asso ciation ; and from this statement it seems that the Association itself, in the year 1849, was obliged to rely almost wholly upon estimates, because it had been unable to obtain answers from the great majority of furnaces then in existence. The committee obtained answers from seventy-nine furnaces, which produced 84,885 tons in 1842, and guessed that a hundred and thirty-four others were in existence, and that their product was 67,000 tons, and the total production of Pennsylvania in 1842 was thus estimated at 151,885 tons. Yet, in this same year, Mr. Carey asserts that the production of the whole country was about 200,000 tons. By supposing that all the imagi nary one hundred and thirty-four furnaces continued in existence, and were increased 25 per cent, in power, the Iron Association, in 1849, calculated that the quantity produced in Pennsylvania was 373,231 tons in 1846, and this guess, based upon such slender foundation, embodied the best information which the Iron Association could then obtain. But Mr. Reeves, writing in 1849, plainly admits that the production began to decrease in 1848 : " The greatest production was during the last half of 1847 and the first half of 1848, when it must have been nearly 400,000 tons." Even this guess, based upon the supposed increase of power of imaginary furnaces, does not sustain 206 DOES PROTECTION PROTECT? the guess of Mr. Carey, for the iron-masters asserted that the produc tion of Pennsylvania was then more than one-half of the whole pro duction of the country. Nor does the statement of Mr. Reeves, as to the number of new furnaces built, correspond with that of Mr. Carey. It must be apparent that estimates so contradictory, and resting upon such slender foundation of facts, are not entitled to acceptance as indisputable records. There is one test of the correctness of Mr. Carey s guesses which it may be well to apply at once. Of the production of anthracite coal, there are very complete and, apparently, very reliable records. Long before 1840, anthracite had been used very generally in the manufacture of iron, and, after 1840, it began to be much used in the smelting also. Every one will understand that the production of iron could not very greatly have increased, the manufacture requiring about five tons of coal to work up a ton of iron, also increasing in like proportion, without a corresponding increase in the production of anthracite. In the diagram appended are two lines, one showing the actual production of anthracite coal, and the other, the production of iron according to Mr. Carey s assertions. This contrast will, at least, warrant a little inquiry as to the facts, before we accept those assertions. The only statements in the nature of fact which Mr. Carey gives are these, that eight new anthracite furnaces were blown in from 1841 to 1844, inclusive, and twenty-six charcoal furnaces in Pennsyl vania ; that eighteen new anthracite furnaces were blown in during 1845 and 1846, and (apparently) forty-one charcoal furnaces in Penn sylvania ; and that eleven anthracite furnaces were blown in during 1847 and 1848, and eighteen charcoal furnaces in Pennsylvania. Mr. Carey infers that as many more charcoal furnaces were started in other States. He guesses that enlargements of old furnaces added 70,000 tons to the product. He asserts that the furnaces in exist ence in 1840, which actually produced 347,000 tons, could then have produced 430,000. Of these assertions there is not a particle of proof presented by him, or attainable by the writer. But it is by means of these data that he arrives at a production of 557,000 tons in 1844, and 846,000 in 1848. The assertions of a writer who does not know that there was a panic in 1837, are not statistics of un questionable authority. Again, Mr. Carey asserts that the furnaces which, " in 1840, when pig had fallen to little more than half the price of 1837, had yielded but 347,000 tons, were now (1844) being driven to their utmost capacity, estimated at 450,000 tons." Mr. IKON, COAL, AND RAILROADS.-MR. CAREY AND FACTS CONTRASTED. The black line represents Mr. Carey s estimate of the production of pig-iron. The medium dotted line, the recorded consumption of anthracite coal. The fine dotted line, the number of miles of railroad built. From 1844 to 1850, the dotted coarse line represents an estimate of the actual product of pig-iron, allowance being made for charcoal furnaces disused, and the consumption of 1848, other than for railroads, being supposed equal to that of 1850. built 800,000 -- 1831 32 3J3 34 35 36 37 38 39| 40 41 42 43 44 45 46 47 48 49 60 51 52 53 54 55 56 57 58 59 60 Product of Anthracite Coal Fig-Iron. produced. IRON. THE TARIFF OF 1842. 207 Carey wishes to have his readers believe that the low prices of 1840 caused these furnaces to produce little, and higher prices in 1844 to produce much ; but in 1840, as the table elsewhere given from official sources w r ill show, pig-iron did not sell in New York at any time be low $32, and in 1844 it never rose as high as it did in 1840, and was quoted at $31 in January, and $30 in December. Such a witness clearly needs cross-examination. In the diagram will be seen a dotted line, representing the number of miles of railroad built each year. If a vast quantity of iron was produced in the years 1843- 46, where was it consumed ? Not in railroad-building, as a single glance will show. Yet in 1850 the quantity of iron used in building and repairing railroads alone must have been more than half as large as the whole quantity then pro duced. Without that, demand, with scarcely any railroad-building until the tariff of 1846 was repealed, where did the country manage to consume the quantity which it is asserted was produced vastly in excess of the known product of 1850 ? In the year 1848 only 397 miles of road were built, and, according to the statistics given in Bannon s work,* these averaged 86 tons of rail to the mile ; adding for other iron used in building, and in cars, locomotives, and other equipment, the quantity of iron used in building and stocking is fully one hundred tons to the mile ; hence there were thus used, in 1848, 39,700 tons of iron. But, upon the same basis, there were used in 1850, for 1,656 miles of road constructed, 165,600 tons of iron. Again, in 1848, there had been laid 4,633 miles of road, aver aging 50 tons of rail to the mile, and 966 miles averaging nearly 90, making about 364,920 tons of rail then laid, to undergo yearly re pairs. Bannon states that the average life of rails is 17f years ; if we suppose 20 years, 5 per cent, of the whole quantity laid must be allowed each year for renewals. Upon this basis, there were required for repairs in 1848 only 18,246 tons, and in 1850, on 523,860 tons of rail then laid, 26,193 tons. Thus there were used for all railroad purposes, in 1848, about 57,946 tons of iron, and in 1850 about 191,793 tons. Other facts appear to prove, beyond possibility of dispute, that the entire demand for and consumption of iron were at least as great in 1850 as in 1848. In 1848 there were 175 steamers built, but in 1850 there were 259. Nor is there any evidence in the records of domestic commerce that the ordinary demand for iron was dimin- * ^Coal, Iron, and OiL" 15 208 DOES PROTECTION PROTECT? ished, either by general prostration of industry and arrest of the so- cietary circulation, or by especial disaster to manufactures. The number of tons of manufactured products moved eastward on the Erie Canal to the sea, and not from the sea was 5,560 in 1848, and 7,858 in 1850. The number of tons of all products moved to tide-water was 650,154 in 1848, and 850,239 in 1850. Tonnage on the lakes increased from 160,250 in 1848 to 186,790 in 1850, and our domestic exports to Canada were $6,399,959 in 1848, and $7,758,291 in 1850. Imports of lumber largely increased, showing increased activity in building, and in every house iron is consumed. Our for eign tonnage increased from 1,360,887 tons in 1848, to 1,585,711 in 1850, and in every ship built there was needed a large quantity of iron. Most conclusive proof that there was no general arrest of trade or industry, the circulation of the banks increased in Massa chusetts from thirteen to seventeen millions, and, in the whole coun try, from one hundred and twenty-eight to one hundred and thirty- one millions; the deposits in Massachusetts savings-banks grew from twelve to thirteen and a half millions ; the deposits in all banks slightly increased, and, at the same time, as all know, the supply of gold from California began to swell the circulation, and to give greater life to all business. The coinage at the mint rose from less than five millions in 1848 to over thirty-three millions in 1850. The property assessed in Boston in 1848 was one hundred and sixty- seven millions, and in 1850 it was one hundred and seventy-nine millions ; in Baltimore, 1848, it was seventy-four, and in 1850 it was eighty millions ; in New York, in 1848, it was two hundred and fifty- four, and in 1850 it was two hundred and eighty-six millions. In 1848 the receipts for letter postage were three millions and a third, and in 1850 over four millions and a half. The aggregate receipts for taking produce from the West to the Atlantic cities on the New York, Pennsylvania, Ohio, Indiana, and Illinois canals in 1848 were $5,822,083, and in 1850 they were $6,018,340. The receipts for the same kind of freight on the Erie, Little Miami, Michigan Central, Georgia Central, Macon and Western, Philadelphia and Baltimore, Reading, and Baltimore and Ohio Roads were in 1848, in the aggre gate, $5,244,246, and in 1850, $6,219,582, every road showing an in crease. The total tonnage arriving at tide-water on the Erie Canal in 1848 was 1,447,905, and in 1850 it was 2,033,863. _ In short, this volume would not suffice to contain the facts which could be pre sented to prove that the general business and industry of the coun try in all its main branches was more vigorous and active in 1850 IROX. THE TARIFF OF 1842. 209 than in 1848. But the facts presented surely suffice to prove that there was no sucfi arrest of business and industry as to cause a de creased consumption of iron. Meanwhile, a few facts decisively "prove that the manufacture 01 iron was itself not decreased. The consumption of anthracite coal in 1848 was 3,089,238 tons, but in 1850 it was 3,321,136 tons. The records of the Ohio and Miami Canals show the quantity of different products moved each year, and the number of pounds of iron, manufactured iron, and nails, moved by those canals * in the two years compares thus : 1848. 1850. From Cincinnati 6,301,364 10,823,804 Total 22,424,277 44,328,431 It needs but few facts like these to dispose of the assertion by Mr. Carey, that the demand for iron so decreased that the produc tion in 1850 was " less than two-thirds of that of 1847- 48 ! " One other fact must be added. It is recorded that in the year 1849 there were ten new iron establishments built in Pennsylvania alone, and twelve in other States, and in the year 1850 there were seven in Pennsylvania, and seven in other States. Here, then, is a solid basis of ascertained fact : that the demand for and consumption of all iron in the aggregate, foreign and do mestic, was at least as great in 1850 as in 1848. In the presence of abundant proof that it must have been greater, it will at least be conceded that it was as great. But it is easy to determine how this consumption was supplied. In 1850 the total supply was 887,600 tons, of which 180,789 tons were pig and bar imported, 142,036 tons were railroad iron, and 564,775 tons were of domestic production. From this deduct iron used for railroads, as already stated, 191,793 tons, and there remain, for consumption otherwise, 695,807 tons. But in 1848 the quantity used in railroads was 57,946 tons, and the quantity imported was 133,216 tons ; the entire consumption, other * IRON AND NAILS. Pounds cleared on the Ohio and Miami Canals. YEAR. Cincinnati. Total. YEAR. Cincinnati. TotaL 1841. . 1842. . 1843. . 1844. . 1845. . 1846. . 2.389,306 1.653,890 1,930,318 2.403,725 3,026.385 3,696.200 13,172.295 10.153.652 10.363.223 9,597.340 11.049.652 14.569,755 1847.. . 1848.. . 1849.. . 1850.. . 1851.. . 4,945,800 6.301.364 8,781,467 10,823,804 19,345,053 15.674,326 22,424.277 28,449,934 44,328,431 63,136,687 210 DOES PROTECTION PROTECT? than for railroads, of iron of domestic production, therefore, could not have been greater than 620,537 tons. For, had it been, the en tire demand and consumption in 1848 must have been greater than in 1850.* It is plain that Mr. Carey s estimates and guesses have in some way led him astray. Taking now the facts which he states, and leaving out of sight for the moment his guesses, we have a known production in 1840 of 347,000 tons, and, as the price was as high then as in 1844, we infer that the furnaces were worked as nearly at their full capacity. Mr. Carey states that eight anthracite furnaces were put in operation in 1841- 44, and 26 charcoal furnaces in Pennsylvania, and that their "estimated" capacity was 66,000 tons. The total capacity of furnaces in 1844 would then be 413,000 tons. Mr. Wells states that the actual product in 1845 was 486,000 tons. Again, Mr. Carey asserts that 18 anthracite, and 41 f charcoal furnaces in Pennsylvania went into operation in 1845 and 1846, with estimated product of 125,000 tons. The capacity at the close of 1846 would therefore be 538,000 tons. Again, he states that 11 anthracite furnaces and 18 charcoal furnaces in Pennsylvania were opened in 1847 and 1848, with an estimated capacity of 72,000 tons ; * The following statement will make the reasoning more easily understood : 1850. Tons. Tons. Production (census) 564,775 Imports, pig and bar 180,789 Imports, railroad iron 142,036 Total supply 887,600 Deduct for 1,656 miles of road 165.600 Deduct for renewals 26,193 Used in Eailroads 191,793 Consumption other than for Eailroads 695,807 1848. Consumption other than for Eailroads 695,807 Add for 397 miles built 39,700 Add for renewals 18,246 Total consumption 753,753 Deduct imports, rails 29,489 Deduct imports, pig 51,632 Deduct imports, bar 52,095 Total 133,216 133.216 Total domestic production, 620,537 } Mr. Carey estimates eighty-two charcoal furnaces in all, but I suppose that in this case, as in the others, he has taken double the number supposed by him to be opened hi Pennsylvania alone. IRON. THE TARIFF OF 1842. 211 adding for these, we have a production, at the close of 1848, of 610,000 tons. But by another method it has already been ascertained that the production in 1848 was less than 620,537 tons. This cor- respondence is so complete as to give strong reason to believe that these estimates are quite close to the truth. So perfect a coincidence of ascertained facts is at least worthy of some weight as against mere assertions. Not only are the guesses and allowances of Mr. Carey evidently erroneous, but the truth seems to correspond very closely with the facts which he states without any estimated addition or allowance whatever. As to the year 1848, it is at least plain that the produc tion was not greater than 620,537 tons ; for, had it been, the total " consumption in that year must have been greater than in 1850 and ^rCarey, who estimates the product of 1848 at 846,000 tons, must, therefore, be in error by at least 226,537 tons ! Where, then, is the fault in Mr. Carey s reckoning ? He makes no allowance for furnaces disused or abandoned. All charcoal furnaces after a time consume the available supply of wood around them, so that the abandonment of the furnace and the erection of a new one, near a fresh supply of wood, become necessary. But, apart from this, in the change from smelting by charcoal to the use of anthracite, many charcoal furnaces situated where supplies of coal were attainable were abandoned altogether, or rebuilt for the use of anthracite. In Mr. Carey s reckoning, furnaces built or rebuilt are noted, but he is careful not to mention the great number that were disused and abandoned. From 1850 to 1860, according to census reports, the whole number of furnaces in the United States decreased from 404 to 286, although the quantity of iron produced increased from 564,000 to 987,000 tons, because the anthracite fur naces yield several times more than the charcoal. There were 118 more furnaces abandoned than were built in this decade, though the product increased more than 400,000 tons. JThe change from char coal to anthracite began in 1840, and, if the proportion of furnaces disused to the number built was as large in the decade 1840- 50 as in the following, there must have been sixty furnaces abandoned "~mpre than all that were put in operation. But, of all this, Mr. Carey makes no account or mention. In a memorial of the iron manufac turers of Pennsylvania in 1849 (quoted by De Bow, " Industrial Re sources"), it was asserted that Pennsylvania then had doubled its production of iron, and made one-half of all the iron produced in the United States, and the article then gives, in support of the claim 212 DOES PROTECTION PROTECT? that the manufacturers were not sufficiently protected, a statement of the number of iron-works which had failed in that State since 1840, from which it appears that 28 failed in the three years of extreme depression, 1840- 42 inclusive; that 25 failed during the years 1843- 46, while the protective tariff was operative, and 61 more dur ing the two years 1847 and 1848 which followed. Here is a state ment, derived apparently from the iron manufacturers themselves, that 114 iron- works in Pennsylvania alone stopped operations during the very years 1840- 48, inclusive, during which Mr. Carey supposes that the production was increased by the full capacity of all furnaces built, without any allowance whatever for furnaces abandoned. Not only does Mr. Carey omit this all-important item, but he allows 70,000 tons for enlargements, and supposes that as many charcoal furnaces were built in the other States as in Pennsylvania. But in 1840, according to the census, only 98,395 tons were pro duced in that State, and in 1850, according to the census, 285,702 ; increase, in Pennsylvania alone, 187,307 tons, while the increase in the whole country was only 217,000 tons from 347,000 to 564,000. Nearly the whole increase in that decade, therefore, was in the State of Pennsylvania ; and, even if it be granted that the figures of the census of 1840 were about 30,000 tons below the actual product of Pennsylvania, the increase in that State would still be between two and three times as great as the increase in all the other States to gether. It is plain, therefore, that this allowance by Mr. Carey is entirely at variance with the facts. There remains still another apparent error. Mr. Carey allows, for all anthracite furnaces built, an estimated product of about five thousand tons each. But the earlier anthracite furnaces produced much less. In a review of the history of the use of anthracite, in the census report of 1860, it is stated that there were in 1845 " nineteen furnaces with anthracite, four out of blast, and ten others erecting," and " they produced annually about 57,000 tons of pig metal." This is a product of three thousand tons each. Again, Mr. Carey allows 138,000 tons as the product of twenty-nine furnaces put in blast from 1845 to the close of 1848, which would make in all 195,000 tons of anthracite coal. But the same census report states that the product of anthracite coal in 1849 was only 115,000 tons, and the Miner s Journal states it at 118,664 tons, so that Mr. Carey seems to be in error to the extent of seventy-six thousand tons in this item alone. Indeed, the "Iron Manufacturer s Guide," issued by the association IRON. THE TARIFF OF 1842. 213 upon which Mr. Carey claims to depend largely for his facts, states that in 1856 the product of 121 furnaces was 394,509 tons of anthra cite iron, which is but little more than three thousand tons to each furnace. These most palpable errors certainly render Mr. Carey s calcula tions quite as valueless as his remarkable history of the panic period of 1837 with the panic of 1837 omitted. The reasonings already offered, based upon ascertained facts, assuredly have more weight than estimates confessedly based upon " firm convictions," and so grossly erroneous. The facts already observed certainly warrant the conclusion that the production of pig-iron in 1848 was less than 620,000 tons, the firm belief of Mr. Carey to the contrary notwith standing. The iron manufacturers of Pennsylvania, in their memorial in 1849, stated that there was produced in that State more than half of the pig-iron produced in the whole country, and in the next year the quantity actually produced, according to the census, was, in Pennsylvania, 285,702 tons, and in other States 279,053 tons. The increase during the decade had been mainly in Pennsylvania; if we suppose that its product in 1840 was fully 130,000, the in crease in that State was 155,000, and in all other States only 62,000 tons. The table already referred to, apparently based upon the me morial of 1849, states that there were in Pennsylvania, in 1840, in cluding those built in that year, 135 iron-works, of which six failed in that year ; and the statement, evidently based upon guesses only as to the years 1842 and 1843, continues thus (there are added to it a column showing the number of works remaining, if the account is correct, and another showing the number of anthracite furnaces built in Pennsylvania to the close of each year) : YEAE. Opened. Closed. Remaining. Anthracite. 1841 6 2 133 6 1842 20 20 133 8 1843 7 7 133 8 1844 21 11 143 13 1845 30 6 170 20 1846. . 53 4 219 27 1847 25 24 220 32 1848 17 37 200 37 1849 10 41 169 41 If this statement is correct, the whole number of iron-works re maining in operation at the beginning of 1850 was 169, of which 214 DOES PROTECTION PROTECT? 41 were anthracite furnaces. But the number actually reported in 1850, according to the census, was 168, so that the statement cor responds with the census. If it is correct, there were in operation at the beginning of 1848 only 220 works, of which 32 were anthra cite, and at the end of that year only 200, of which 37 were anthra cite ; the production, therefore, from an average of 35 anthracite, and 176 charcoal works, could not have been greater than 281,000 tons in Pennsylvania, and, allowing 300,000 for other States, only 581,000 in the whole country. But, if this is the truth, Mr. Carey is in error as to the production that year no less than 265,000 tons. Again, the statistics of the Iron and Steel Association, to which Mr. Carey so constantly refers as his authority, assert that the pro duction of charcoal-iron in Pennsylvania, in 1847, was, hot blast 94,519, and cold blast 125,155; total, 219,674; and that the quan tity produced then declined to 138,967 in 1849, and 113,282 in 1850. Now, the statement for 1847 is larger than is warranted by any record of furnaces in existence which the writer can discover ; but, accepting it as correct, and adding 90,000 tons for the produc tion of anthracite (from 27 furnaces at the beginning and 32 at the end of the year), we have a production of pig-iron in Pennsylvania of 309,674 in 1847, and, adding as much for other States, of 619,348 for the whole country. The quantity of charcoal-iron produced, the statistics say, then declined, so that the aggregate production of 1848 cannot have been materially greater. But once more the fig ures correspond closely with the quantity, 620,000 tons, which it was shown could not have been exceeded by the consumption of 1848. Finally, the record of furnaces given in the " Iron Manufac turer s Guide," if we include every furnace erected prior to and dur ing 1848, and suppose them all to have been in operation during all that year, at the rate of 3,000 tons for anthracite, and 1,000 for char coal furnaces, thus making no allowance whatever for the furnaces abandoned or disused from 1840 to 1848 inclusive, gives the follow ing result : Total number of anthracite furnaces built in Pennsylvania prior to and including 1848 37 Charcoal 227 Product 227,000 + 11 1,000= 338,000 Total number of anthracite furnaces built in other States prior to and including 1848 7 Charcoal 268 Product 268,000+21,000= 28&,000 Product of the whole country 627,000 IROX. THE TARIFF OF 1842. 215 Since this result is reached with no allowance whatever for fur naces disused since 1840, and thus gives another and independent proof that the actual production in the year 1848 must have been less than 620,000 tons, it may be stated without hesitation that Mr. Carey is proved, by the statistics of the very association which he claims to quote, to be at least 226,000 tons out of the way as to the actual production of pig-iron in 1848. By four distinct methods, each based upon records of fact, the same conclusion has been reached, that tne actual production of pig- iron in 1848 was less than 620,000 tons. To reach a just estimate, a comparison of the records is necessary. The " Iron Manufacturer s Guide" gives the date of the building of furnaces, but rarely states when they were closed. The statement supposed to be based upon the memorial of 1849, if incorrect as to earlier years, is probably ac curate as to the number of iron-works closed during the years 1844- 48, inclusive. The statistics of the production of charcoal-iron in 1847, 1849, and 1850, and of the quantity of anthracite-iron pro duced in 1845 and 1849, may also aid to reach the truth. The num ber of furnaces which are recorded in the "Iron Manufacturer s Guide " as built in the years 1840- 50, in Pennsylvania and in the other States, is given in the following table : YEAK. CHARCOAL. ANTHRACITE. Pennsylvania. Other. Pennsylvania. Other. 1840 3 4 6 6 13 20 30 13 1 2 6 3 1 3 10 15 14 21 11 12 1 2 2 V 7 7 5 5 4 1 1 1 1 1 1 1 1841. .. 1842 1843 ... 1844 1845 . . 1846 1847 1848 1849 The actual production in 1840 was 347,000, and it may fairly be supposed, for reasons already given, that the average production of anthracite furnaces, prior to 1850, did not exceed three thousand tons, and that the other furnaces averaged one thousand tons each. Upon this basis the productive power of all the furnaces in the country may be estimated, and we may thus reach the highest pos sible production for the years 1845 and 1846, thus : 216 DOES PROTECTION PROTECT ? YEAE. PENNSYLVANIA. OTHER STATES. TOTAL. Increase. Productive Power. Increase. Productive Power. Productive Power. 1840 ! 6,000 10,000 12,000 6,000 28,000 41,000 51,000 130,000 140,000 152,000 156,000 184,000 225,000 276,000 9,000 3,000 4,000 6,000 13,000 18,000 14,000 217,000 220,000 224,000 230,000 243,000 261,000 275,000 347,000 360,000 376.000 386^000 427,000 486,000 551jOOO 1841 .... 1842 1843 .... 1844 1845 1846 So far, no deductions have been made for failures or abandon ments of furnaces. It may, therefore, be assumed that the produc tion of pig-iron in the last year of this tariff, 1846, cannot possibly have been greater than 551,000 tons, and was probably less. It will be observed that the result for 1845, thus arrived at by adding the product of all furnaces built, as recorded in the " Iron Manufac turer s Guide," happens to be precisely the estimate which Mr. Wells gave of the production in that year. The protective tariff of 1842, it appears, with the adoption of anthracite for fuel, increased the productive power of the iron furnaces from 376,000 to 551,000 tons, ^or 46 per cent. In 1847, according to the statistical report of the Iron Associa tion, the production of charcoal-iron in Pennsylvania was 219,674 tons, and it happens that the record prepared from the " Iron Manu facturer s Guide," adding all furnaces built since 1840, gives just 220 as the number of charcoal furnaces in Pennsylvania at the close of that year. But the production of anthracite-iron, which was 57,000 tons, in 1845, had been increased by the erection of seven furnaces at the beginning of 1847, and six more during that year, so that about 81,000 tons could be produced in Pennsylvania, and 96,000 at the end of the year. Probably the actual production was about 81,000 tons, which, with the charcoal-iron, gives 300,674 tons as the production of Pennsylvania in 1847. It happens that the aggregate power of production, adding for furnaces built according to the table, was 304,000, but it has also been stated that four establish ments failed in 1846. The correspondence is sufficiently accurate, and, deducting also 2,000 tons from the aggregate power of produc tion of other States, we have a production for 1847 of 597,674 tons. This, however, makes no allowance for the twenty-four establish ments stated to have failed in the year 1847, while all furnaces built in that year are added. The estimate, therefore, is probably larger IRON. THE TARIFF OF 1842. 217 than the actual product. Deducting now from the number of fur naces in Pennsylvania twenty-four for failures in 1847, and adding for furnaces built in the year 1848, it appears that the highest pos sible production of charcoal-iron in that year was 203,000, but, before the year closed, thirty-seven other works had stopped, reducing the productive power as to charcoal-iron to 166,000 tons. On the other hand, the anthracite furnaces increased from thirty-two to thirty-seven in that year, so that the productive power at the begin ning of the year 1848 was 299,000, and at the end of the year 273,000 tons. The average, 281,000 tons, therefore, represents the utmost productive power of the furnaces in Pennsylvania in that year. Making deduction also from the productive power of furnaces in other States for less than half as many failures as occurred in Penn sylvania, namely, twelve in 1847 and sixteen in 1848, we reach an average production of 289,000 tons, making for the whole country 570,000 tons, as the product of the year 1848. In the year 1849, two furnaces for charcoal were built in Penn sylvania, but forty-one stopped ; the highest productive power in that year was therefore 168,000, and the lowest 127,000. The actual production of charcoal-iron is stated by the statistical report of the Iron Association at 138,967 tons, thus fully confirming the correct ness of the computation for the year 1848. The production of all anthracite coal in 1849 is stated as 118,664 tons ; if so, the produc tion of Pennsylvania and anthracite furnaces outside of that State was 257,567 tons, and, with allowance for failure of twenty charcoal fur naces in other States half the number of failures in Pennsylvania the production of the whole country was 517,567 tons. But, if we allow for the whole number of anthracite furnaces in operation during the year, the product will be increased to 542,903 tons, which represents the productive power at the close of the year 1849. ^ Again, deducting from the number of charcoal furnaces in Penn sylvania for twenty-two failures in that year, the result is a produc tive power of 127,000 at the beginning and 105,000 at the end of the year 1850; but the actual product, according to the statistical report, was 113,282 tons, so that the estimates again are confirmed. But the production of anthracite-iron had increased, and the quan tity of all iron produced in Pennsylvania, according to the census, was 285,702 tons. Meanwhile the records show that there were built in other States four, charcoal and three anthracite furnaces, and the lowest production of the previous year 273,000 tons thus in- 218 DOES PROTECTION PROTECT? creased, amounts to 286,000 tons, or, with allowance for seven fail ures, to 279,053, the quantity produced according to the census. This computation, then, accords at every point with the recorded facts. Is it not absolutely impossible that estimates so fortified on all hands by records of the Iron Association, by statistics of the date of erection of furnaces, by records of the number of failures, and by the census report of 1850, can be in error to the extent of 276,000 tons ? Yet they must be, in regard to the year 1848, unless Mr. Carey has been teaching his readers to believe that which is not the truth. Having now some basis of fact, we may inquire whether the tariff of 1842 really aided the iron manufacture. Under its oper- ^ation, the production of pig-iron increased from a known quantity of 347,000 tons, in 1840, to not more than 551,000 tons in 1846, ^biit twenty-two anthracite furnaces had been opened, by which 6^,000 tons of this increase were produced, and twenty- three charcoal furnaces built in the years 1840- 42, inclusive, also swelled the increase. Deducting these, we have JL15,000 tons, the product of furnaces other than anthracite, built under this tariff. But this increase was at a cost of about ten dollars a ton to the manufac turer and consumer of iron. The increase by the use of anthracite, it may fairly be reasoned, would have been at least as rapid if iron-makers had not been tempted by high duties to continue the use of old furnaces and less economical methods. The quan tity of anthracite iron produced increased, after the repeal of this tariff, from 118,000 tons in 1849 to 307,000 tons in 1854, while under the tariff of 1842 only twenty-two anthracite furnaces were built, producing about 60,000 tons. In the four years, 1853- 56 inclusive, 85 charcoal furnaces were also built, while 111 were built in the four years 1843- 46. It will be conceded, in the presence of these facts, that a very large increase in the production of iron would have followed the introduction of anthracite, whether high duties had been imposed on foreign iron or not ; and the question may fairly be asked, whether the iron interest, as a whole, would not have prospered quite as much in the end, had the production advanced a little less rapidly in quantity of charcoal-iron produced, a little more rapidly in quantity of anthracite-iron produced, and at less cost of the raw material to the manufacturer. Of the progress of the manufacture, no reliable statistics can be given. It appears that in 1842, the last fiscal year preceding this tariff, the imports of iron were $7,567,752, and in 1845 they were IRON. THE TARIFF OF 1842. 219 $9,043,399, and in 1846 they were $8,959,047. The quantity of bar and pig iron imported in 1845 was 78,698 tons, about 16 per cent, of the domestic production, but in the next year, and the last of the tariff, it fell to 69,624 tons, or about 12 per cent. Without ques tion, the use of anthracite and the adoption of better modes of man ufacture combined with the tariff to cause this reduction in the pro portion of foreign raw iron consumed, but no statistics are attainable for a like comparison as to manufactured products. In 1840 we consumed 414,163 tons of iron, or 20J tons to every thousand of population, and 46 pounds per capita. In 1846 we con sumed about 620,000 tons, or 27 tons to the thousand, and about 60 pounds per capita. But jn 1854 we consumed 1,222,000 tons, or 47 tons to the thousand, and 105 pounds per capita. The increase in the consumption was therefore less rapid under the protective tariff than after its repeal. This appears to indicate that the natural in crease in the use of iron was retarded by its cost. It appears plainly that the production itself, pushed fully to the power of the country to consume at the ruling prices, might have been more rapidly in creased had the prices been such as to invite the more rapid con sumption which followed the repeal of duties. But prices were not reduced, because the making of iron by economical methods, and in the most advantageous localities, had not been stimulated but re tarded by the high duties. Sooner or later, the business remaining in this condition, there must have come general disaster to those engaged in producing iron at a disadvantage in method or location, and many establishments must have been driven to bankruptcy, if not by the pressure of foreign competition and reduction of prices, then by the excess of production over the power of the country to consume, prices being maintained. To this very cause are partly at tributable the disasters and failures of 1847- 50. The foreign im portations were not then very large, nor was the price greatly re duced, but the pressure was sufficient to close a hundred and fifty furnaces, mainly in Pennsylvania, where the anthracite-iron could be more cheaply made, while in other parts of the country the produc tion was but little reduced, new and improved furnaces almost sup plying the places of those which were abandoned. Was it well for the country, then, that Pennsylvania was paid, at public cost, for erecting so large a number of furnaces destined surely to be closed and abandoned whenever the use of anthracite became more general ? Pointing to the wrecks scattered all over Pennsylvania, where millions of money were lost by men who were tempted by the tariff 220 DOES PROTECTION PROTECT? of 1842 into the making of iron at the public expense, the advocate of protection asks whether the country did not lose by the destruc tion of these works. It did lose, not by their destruction, but by their establishment. It lost by the investment of large sums of money and much energy and enterprise in a wasteful instead of a profitable manner. It lost money whenever a capitalist was led to invest his money in making iron where iron could not be profitably made ex cept with protective duties and at the public cost. Each one of those blackened wrecks bears witness to the folly of teaching men to rely upon legislation rather than natural advantages and enter prise as a basis for their industry. The same blackened ruins would be seen to-day had the protective tariff never been repealed. Sooner or later, Pennsylvania would have learned to use her richest deposits of metal and fuel in a more economical manner, and then charcoal furnaces least advantageously situated or skilfully managed would have been abandoned or changed to the use of coke. Every wreck is eloquent. It teaches that a protective system, unavoidably tran sient and fluctuating, is not the safest basis for industry. IRON. THE TARIFF OF 1842. 221 IMPORTS OF IRON SINCE 1840. YKAB. Imports Pig-iron. Duty. Imports Bar-Iron. DUTY. Imnorts Railroad Iron. Duty. Value of all Iron imported. Rolled. Ham d. 1840 Tons. 5,516 12,267 18,694 3.882 14,944 27,510 24,187 27,655 51,632 105,6S2 74.874- 67.249- 91.873 114,227 160,483 98.924 - 59.011 51.794 41,985 72,517 71.497 110,025 22.147 31.007 102.223 44.601 101.261 112,042 112,133 $7.60 7.60 5.31 9.00 9.00 9.00 9.00 30 p. c. 30 30 30 30 30 30 30 30 30 30 24 24 24 24 $6.00 6.00 6.00 9.00 9.00 9.00 9.00 Tons. 61,647 92,661 81.111 22,011 49,713 42,364 45,437 *26.642 52,095 104,294 105,915 65,676 45,761 88,358 45,551 95.141 91,579 69,875 52,657 81,902 134.199 77,968 24.250 64,210 96,380 40,512 54,904 68,212 59,270 $21.00 21.00 14.50 25.00 25.00 25.00 25.00 $15.00 15.00 13.00 17.00 17.00 17.00 17.00 Tons. 29,092 23.253 24,970 9,654 15,577 21,812- 5,897 13,536 29,489 69,163 142,036 188,625 245.625 298,995 282.866 127,516 -j 155.495 X 179.305 75.745 69,965 122,174 74,490 8,488 17,088 118.714 74,702 73,510 114,683 203,819 $25.00 25.00 25.00 25.00 30 per ct. u 24 per ct. u $12.00 13.50 13.50 13.50 13.50 15.68 15.68 $7,241,407 8.885.823 7,567,752 2,103,684 5,693,828 9,043,399 8,959,047 8,781,252 12,526,854 13,831.823 16,333,145 17,306,700 18,957,993 27,255,425 29,341,775 22,980,728 22.041,939 23,320,497 14,454,928 15,000,866 18,802,227 1841 1842 1*43 1844 1845 1846 1847... 1848 All Bar. 30 per cent. u U U II II U U All Bar. $15.00 17.00 22.40 22.40 22.40 22.40 22.40 1849 1850 1851 . . 1852 1853 1854 1855 1856 1857 1858 1859 1860 . 1861 1862 1863 1864 1865 1866 25.360,861 23,496,835 1867 1868 PRICE OF PIG-IRON. Average of Monthly Quotations in New York. (From Treasury Report of 1863.) YBA*. Pig-iron. Bar-Iron, Sheet-Iron. YKAK. Pig-Iron. Bar-Iron. Sheet-Iron. Average. Average. Average. Average. Average. Average. 1825. 1826. $57.08 63.12 55.83 i(5.2r> $104 108 91.25@97.50 $7.258.72 7.708.95 1845. 1846. $37.1638.79 ; $73.54@75.62 ll&@123jf Ib. 37.333920i 76.9679.54 11 12 1827. 50.00(7753.00 82.91@87.95 7.088.00 1847. 33.96@34.92j 71.4673.12ll 12 1828. 50.1754.25 79. 37 80.83 6.627.50 1848. 28.5029.71| 68.76@69.87 HM12i 1829. 45.83(T/ .VJ>J 78.5480.42 6.75@<S.OO 1849. 23.87@24.87i 46.7547.50 12^13K 1830. 42.00.47.92 74.0475.&3 6.75 8. 00 1850. 22.23 41.04@42.7113 14 1831. 40.OT@46.66 71.5073.75 6.75^78.00 1851. 20.77@21.85 30.0436.95 18 14 1832. 40.00,46.46 72.00. 73.25 6.75-8.00 1852. 22.29@23.14 39.16,40.45 IOK@UK 1833. 38.1745.21 74.2975.00 6.66.7.50 1853. 33.5435.50 63.3766.87 u 113^ 1834. 38.0044.79 70.96 T-. .ir, 3.25@3.75 1854. 37.79,39.16 69.7972.46 12^12% 1835. 1836. 38.00 42.50 50.4654.91 68.3370.41 92.7195.37 6.667.33 1855. 1856. 28.2529.25 ; 67.60@60.00 14#@17 31.87@32.96 68.08@80.70 14?tf@16X 1887. 49.7954.16 94.79%. fit) 7.00@-7.50 1857. 30.5431.71 66.69@56.66 12 12 JOS. 41.8745.21 86.25@90.21 6 7 Ib. 1858. 28.9126.04 50.8352.95 ii/^i2j^ 1839. 38.3340.91 87.71S!).17 6 @ 7 " 1859. 24.5825.96 44.88@46.04 10^ll 1840.1 88.6e@86.7l 74.17 77.08 6 7 " 1860. 23.15@23.87 41.96@42.92 13 13^ 1841. 33.3735.83 67.330!.37 6 @ 7 " 1861. 21.54@22.96 43.0444.75 16 @16>^ " 1842. 27.9529.37i 56.0458.12 13 14 " 18(52. 25.3326.66 58.0060.00 15 16 " 1843. 25.4626.79 56.4657.50 11 12 " 1863. 36.50@37.83 72.93@74.21 17 @18 1844. 32.0433.08 60.3762.29 ll.J@13}" From 1847 to 1865 this column includes only bar imported from Great Britain. 222 DOES PROTECTION PROTECT? 8 8888g8gggg888g8g88g8g88S888888888gggS g iSS^ " 8S888g88gg8888SggS8g8g88gg888888gSg888 ttti&$&tt$!&&&4&^ SI 88888g8S8gS88S88g88g8888g8gg88gg8S888g ||g J? ^ $ JS 3 ^ ? M^^^S ^^^ ^ %% ^1^ ^ ^ ^ ^ ^ S * ^ ^ S88S88^888S8SSS88S888S888888888S SSSSSS 88888g888S88888S8888 ^o?^?o^; o cj o o Jo Jo 2 ^ 8888gS88S888888 88S88Sg88S88888888 OOi^lOOb-t-lCOG ^OiOl 888888SS88S88S88S88SSS88S8S88888SSSS88 " 8 888888S88S88S88SS888S8 S 8 SS^SS 17 8888S8 J8888888g88g888^8ggg 888 g8888g8S88g8g88 o o iri si in o >o t^ w ic w xri o o o t-^ t^ 15 o o t- * in ?-< ~ ! ~ ~- - ~ ! - *--"" I iSt-KiQaZ^B*i^R <*!*SK^5og cj-^so <r?Ss<5? 88 8888S8888gg8|8g8888g8888S888888S888 88 8888S8SgS8888g8S8888S88Sg8S88888888 ?^ ^ ?? T? ??- ~- -*- - ~- - - i^ in i^ ir: ic c i* i^ i^ vt ^ ^c ii : fc 2 y I 12 5 O o m 253 a s 1! in -o I mllfffifrniWiTmTrrrrf II r 16 IROX. HISTORY SINCE 1846. 223 CHAPTER XVI. IRON. HISTOKY SINCE 1846. THE tariff of 1846 the free-trade tariff, as Mr. Carey has called it went into effect December 1, 1846. As American iron-makers had been selling at artificial prices, the change of duty forced them to moderate their demands. The progress of the manufacture in England had greatly reduced the cost of iron; Scotch pig, which sold at Glasgow for $20 in 1845, fell to $11.10 in 1848, to $11.37 in 1849, to $11.15 in 1850, and to $10.02 in 1851. It was with such prices as these, and a vigor and skill of industry which made such prices profitable^jthat our furnaces were called to contend, habituated as they were to artificial prices, and to reliance upon government, rather than skill. The price of Scotch pig in New York, which had I5ee~n $38 to $42.50 during the earlier part of 1846, fell to $35 to $36 December 1, to $33 to $34 January 1, 1847, and to $30 in June, July, and August of that year ; and, after a rise during the winter, to $26.50 in June, 1848, and $25 to $26 in December, 1848 ; to $22.50 in June, 1849, and $22 in June, 1850. In spite of the reduction of price, it is admitted by all that the production continued to increase in 1847, and Mr. Carey asserts that in 1848 it reached 846,000 tons. It is not worth while to inquire with what reason he ascribes this increase to a tariff which had then ceased to exist. The facts show that the maximum of production was reached in 1847, and that the building of new furnaces in that year and in 1848 nearly balanced the stoppage of the works run at the public cost in 1846. It appears also that, while the pro duction of charcoal-iron in Pennsylvania decreased, it rapidly in creased in other States twenty-one furnaces being built in 1847, eleven in 1848, and twelve in 1849. In Pennsylvania the pro duction had been overdone, and the removal of the duty and fall of price brought disaster, but in many other States the production con tinued to increase through all the years 1846- 50, and in all other States except Pennsylvania it was but 20,000 tons lower in 1850 than in 1848. Yet many furnaces, chiefly in Virginia, Maryland, and New Jersey, were driven, by competition of the growing anthra cite production, to stop work or to adopt the use of coke or coal. Eight in New Jersey alone, and ten in Virginia, are mentioned as 224 DOES PROTECTION PROTECT? having stopped work in consequence of the supply of cheaper an thracite coal, and it will at once be seen that, after deducting the stoppages from this cause, in Pennsylvania, and the States adjacent to the anthracite region, the aggregate production of charcoal-iron in all the rest of the country must have been very much larger in 1850 than in 1848. Hence it appears that the charcoal furnaces which had been artificially sustained at public cost in the region which could be more cheaply supplied with anthracite-iron, hin dered the growth of production in other States, and that, when they were stopped, the production of charcoal-iron elsewhere in creased. What was the effect of the removal of protection, then? In States beyond the immediate influence of the anthracite region, the lower tariff did not prevent an increase, steady and quite rapid, in the production of charcoal-iron. But within that circle, in the States of Pennsylvania, Virginia, Maryland, and New Jersey, charcoal-iron makers were prostrated, precisely as they must have been in any state of tariff whenever the general use of anthracite began to force down prices within that circle of supply. What, then, did the tariff do ? It simply fixed the time at which certain charcoal-iron furnaces within that circle should stop operations. Had high duties been retained, they might have continued work a little longer, but the cost of all iron would have been greater. Had high duties been retained, they must have failed before long, and the change of tariff simply short ened by a few years the life of furnaces which involved from the outset a wasteful expenditure of capital and labor. Meanwhile, all the rest of the country continued to increase its production of iron, and the whole country obtained its iron at a lower cost. ~~f The iron-makers in Pennsylvania and the adjacent States were forced to consider whether they could make iron, not at the public expense, but to the public profit. They were slow to adjust them selves to the new situation, and foreign iron flowed in largely to the value of $16,333,145 in 1850. The proportion of foreign raw iron consumed rose to 24 per cent., and by far the greater part of it was consumed in States near the Atlantic seaboard, which Pennsyl vania had not yet learned to supply at a reasonable cost. Then the question was fairly tested whether American industry was equal to competition with British. The foreigner found our in dustry on crutches, habituated to false prices, wasteful methods, and no competition, and he began to carry all before him, in that very region which, being most richly endowed with materials for the cheap IRON. HISTORY SINCE 1846. 225 production of iron, should have been best able to sustain the shock. While the manufacture in other States moved steadily forward, in Pennsylvania and the adjacent Eastern States it was prostrated. Then the healthful discipline of 1840- 42 found its value. Twenty-seven anthracite furnaces are mentioned as having been built in the years 1S47- 50 inclusive, and the consumption of anthracite coal rose from 2,882,309 tons in 1847, and 2,344,005 tons in 1846, the last year of protection, to 3,321,136 tons in 1850, an increase of one million tons in four years, while under the protective tariff the increase had been from eleven to twenty-three hundred thousand tons. But the Pennsylvania iron-masters had not yet begun to work in earnest. In 1851 the consumption of anthracite coal suddenly rose to 4,329,530 tons, an increase of 1,008,394 in a single year nearly as great in one year as had been the increase in four years of protection. In 1852 it rose again to 4,899,975 tons, a further increase of 570,445 tons; in 1853 it increased nearly 200,000 more, and in 1854 it increased three- quarters of a million, reaching 5,831,834 tons. The product of an thracite iron was 118,664 tons in 1849, and it was 340,555 tons in 1854, according to statistics in the Miners Journal, or 307,710 ac cording to tables of the Iron Association, an increase of about 200 per cent., in five years. To this must be added 54,485 tons of iron produced with coke or raw bituminous coal in 1854, for many of the furnaces which had been forced to stop using charcoal, adopted better methods and cheaper fuel. In 1854 anthracite-iron was made in Pennsylvania at a cost of $15 a ton. Nor did the production stop in its increase, for in 1854 nineteen new anthracite furnaces were built, and in 1855 ten, and in 1856 ten more. The production of anthracite-iron rose to 444,012 tons in 1856 (according to the Miners Journal, and 394,509 according to the Iron Association) and the production of coke-iron to 69,554 tons, so that the total production of that year was 874,428 tons. While the iron interest in the anthracite region achieved this magnificent victory over foreign competition, the production of iron iff other parts of the country, never seriously affected by changes of xtiify, moved steadily forward. In the Hanging Rock region (South ern Ohio and Eastern Kentucky), thirty furnaces were erected since 1850, there being 59 in operation in 1856, and the product (nearly all charcoal) reached 92,116 tons in the latter year. In Northern Ohio, Western Tennessee, and Kentucky, Indiana, Illinois, and Missouri, the production of charcoal-iron was 71,934 in 1854, and 77,858 in 1856. In Michigan and Wisconsin splendid deposits 226 DOES PROTECTION PROTECT? were opened, and the production, only 990 tons in 1854, rose to 6,178 tons in 1856. The panic of 1857 reduced production to 798,157 tons in that ~~year7and to 705,094 tons in 1858, but the importations of foreign iron were at the same time reduced far more largely from a value of twenty-three millions in the fiscal year 1857, to fourteen millions in the fiscal year 1858. As soon as the panic passed, the domestic production revived again ; new furnaces were built ; and in 1860, in spite of large importations caused by over-production and low prices in England, in spite of the fact that the price of iron here was lower than it ever had been, except in the years 1851 and 1852; the domestic production of iron was 913,774 tons according to the Iron Association, and 987,559 tons according to the census, which must be supposed the more reliable. In either case it was larger than it had ever been before. In that year, of raw iron (pig and bar) we imported 177,371 tons, and consumed 1,164,930 tons, so that only 15 per cent, of the unmanufactured iron used was imported. Yet the duties on iron were then lower than they had been at any time since 1816, and had been reduced from 30 to 24 per cent, in 1857. In review of the history of the production of iron in this decade of non-protection, it may be said that it demonstrates most con clusively the fact that the production increases more rapidly and surely without protection than with it. From 1842, when the pro ductive power of furnaces built was at least 376,000 tons, the actual production being unknown, to 1846 when the productive power was 551,000 tons, the increase was 46 per cent. But from 1852, when Mr. Carey states that the production was about the same as in 1850, namely, 564,000 tons, to 1856, when it was 874,428 tons, the in crease was over 55 per cent. Under protection, the gain was effected by the wasteful expenditure of money and skill in continu- ing the production of charcoal-iron, within the region which could be and was destined surely to be more cheaply supplied with an thracite, and over one hundred companies were thus induced to devote their capital to certain destruction. But, under non-protec tion, a larger gain was effected by leaving men to adapt their indus try to the natural resources of the country to make anthracite-iron when that could be made most cheaply, and charcoal-iron where natural conditions favored. Under protection, a gain of 46 per cent, was effected, but under such circumstances that it was sure to be balanced by subsequent loss. Under non-protection, a gain of 55 per IRON. HISTORY SINCE 1846. 227 cent, was effected, and neither panic nor war has since broken down any considerable number of the establishments then opened, Again, the history of this decade demonstrates conclusively that the country has now become so great, and its demand for iron so enormous, that it is no longer possible for foreign makers to control \ or seriously affect the market. In 1850 Great Britain found this in- v dustry disabled by its fall from the crutches of protection. English iron began to flood our market, but its cheapness invited an enor mous consumption. We began to build railroads at the rate of two thousand miles a year. So vast was the demand, that it was impos sible for England to supply it, and prices rose in 1852 in Glasgow to $11.37, and in New York to $30 a ton. In 1853 the average price at New York was $34.50, and in 1854 $38 a ton! In Great Britain, the same year, the average price was $17.05 per ton, a remarkable increase. The demand was, in fact, greater than Great Britain with all her energy could supply, and it forced up prices here almost as high as the protective tariff itself had done. But by 1852 our in dustry, no longer on crutches, but treading with firm foot the solid earth, was ready for the struggle. In the face of enormous importa tions, it made that wonderful progress which has been described, and by 1854 our domestic production began to force down the price of iron, which fell to $28.75 (average) in 1855, to $24.50 in 1858, and to $23.50 in 1860. Finding our industry prostrated in 1850, the ~~ British manufacturer, had it been within his power, would have kept V it from recovering control of tne market, and held prices so low as to \ prevent any increase of domestic production. But it was not in his power. The demand was too vast. The little colonies had grown to a great nation, needing iron in such quantities that the price in England was forced up by our demand in 1853 and 1854, and forced down by our production from that time until 1860. Jn a word, dur- C^ ing the decade, 1850 to 1860, we achieved our independence of ""Great Britain in the production of iron. We won back that mas tery of our own market which we enjoyed in colonial times, but of which, by a false system of protection, we had been so long almost deprived, [in the production of iron mining and smelting, the value of the product returned in 1850 was fourteen millions, but in 1860 it was twenty-three millions. In rolling or forging iron, a smaller number of establishments was engaged in 1860 than in 1850, but the num ber of hands employed had increased from eleven to twenty thou sand, and the value of the product from sixteen to thirty-three mill- 228 DOES PROTECTION PROTECT? ions. Including all branches of preparation and production, we find an increase of four thousand in the number of hands, and of twenty- six: millions in the value of jjhp p^rinr* Moreover, the average wages of hands employed both in mining and smelting, and in the rolling mills, increased materially from 1850 to 1860. This, then, was a healthy growth. Though the cost of iron to the consumer was about the same in 1850 the average price was $22.33, and in 1860 $23.50 the aggregate value of the product had nearly doubled, and the wages of labor had increased. Of the branches of the manu facture proper, those classed as protected (see table of the iron in terest), namely, the making of castings, forged iron, hardware, cut lery, tools of all kinds, and wire, increased in number of establish ments from 2,290 in 1850, to 2,318, in number of hands from thirty- four to forty-seven thousand, and in value of product from thirty- seven to fifty-two millions. This is a gain far more rapid than the increase of population, and it proves that, even in those branches sup posed to especially need protection, the manufacture moved forward magnificently under duties lower than have been in force at any other time since 1816. If, under this " free-trade tariff," as it has been called, the progress was so rapid, can it be said that protection is needed even for these branches ? ]Finally, in the branches of manu facture not protected, namely, the making of machinery, nails, bolts, scales, agricultural implements, stoves, and sheet-iron articles, and in blacksmithing, there were employed, in 1850, about seventy-three, and in 1860 about one hundred thousand hands an increase just propor tioned to that of population. But the value of the product increased from sixty-seven millions in 1850, to one hundred and twenty-two millions in 1860. This vast increase in the efficiency of labor is one of the most striking features in the history of that periodj In every branch of the manufacture there was wonderful progress; indeed, no better proof of the general prosperity of the manufacture can be asked than the fact that the consumption of anthracite coal mounted from 3,321,136 tons in 1850, to 7,517,816 tons in 1860. The product of steel was in value $172,080 in 1850, but it was $1,778,240 in 1860, a gain of nearly 900 per cent. The manufactures of steel pro duced in 1860 to the value of $9,151,893. The value of machinery produced in 1850 was $27,998,344, and in 1860 it was 146,644,586, a gain of 66.6 per cent. The forges and mills produced in 1850 to the value of $15,938,786, and in 1860 to the value of $31,888,705, a gain of about 100 per cent. The whole iron interest employed in 1850 about 142,534 hands, and in 1860 about 198,532 hands, while IRON. HISTORY SINCE 1846. 229 its aggregate product in 1850 was $135,672,171, and in 1860 it was 8256,137,736. In this same year, I860, under the lowest duties which have been imposed since 1816, the whole value of foreign iron and manufactures of iron imported was $18,812,227, or barely 7 per cent, of the value of all products of iron consumed. " Can it hereafter be said that low duties will destroy the iron interest ? sJThe facts given show how splendid was the victory which American industry achieved, without protection, in its struggle with the iron manufacture of England. By them it is demonstrated that, since 1853, at least, the iron interest has been able not only to face, but to overpower all foreign competition. If the production of iron advanced, without protection, 55 per cent, in four years; if the manufacture advanced, without protection, from 60 to 100 per cent v in its different branches from 1850 to 1860 ; and if, at the close of that period, the proportion of foreign iron consumed in this country was barely seven per cent. ; what is the necessity of the protective duties which have since been imposed ? That the iron interest has made progress under protective duties, seems to some a proof that the duties have caused that progress. Jn the face of the marvellous victory achieved over competition " during the last decade, this idea must be abandoned. It must be "conceded that, unless the progress since 1860 has been greater than It was at any time under the non-protective duties, the country has ~~lslmply been taxed by high duties on iron, without any benefit what ever. But if the progress has been greater than it was under non- protection, it remains to ask whether the acceleration in the growth of this industry has been such as to compensate the country for the increased cost of iron and its products. The quantity of pig-iron produced in the year 1865 is stated at 931,582 tons. Five years of protection and war, it seems, had not only brought no increase, but an absolute decrease in the quantity. But since that time there has been a very large increase to 1,350,943 tons, in 1866, to 1,461,626 tons in 1867, and to about 1,600,000 tons in 1868. The quantity now produced is known only by estimates and statements of the Iron Association, and these, as has been discovered in examination of the history of the years 1842- v 48, are not always accurate. It is stated that the production for 1869 was 1,750,000 tons, but no facts are accessible to the writer which enable him to verify or correct the estimate. The quantity produced in 1868, stated by some as low as 1,550,000 tons, and by others as high as 1,650,000, was, undoubtedly, not greater than the 230 DOES PROTECTION PROTECT? / latter estimate, and the increase^in eight years since 1860 was, ^therefore, less than 66 per cent. But the increase under non- protection from 1832 to 1840 was 73J per cent., and from 1852 to I860 it was just 75 per cent. If the production in 1869 was 1,750,000 tons, as has been stated, the increase in nine years was 77 per cent., and it may then be said that the production of pig-iron has increased a very little more in nine years of protection than it did in eight years of non-protection. An increase in nine years, 3 \ per cent, greater than in the eight years 1832 to 1840, or 2 per cent, greater than in the eight years 1852 to 1860, is certainly not a proof that the production of pig-iron has been remarkably increased by protective duties ! Yet there is reason to believe that without the tariff the increase would have been more rapid than at any former period. The war itself created an almost immeasurable demand for products of iron in arms, projectiles, iron-clad vessels, and railroads, laid or repaired for military use, while nearly eighteen thousand miles of railroad have been built since 1860, government having given subsidies or grants to aid not less than four thousand, and about ten thousand miles of road at the South have been restored, repaired, and newly supplied. Not less than 2,800,000 tons of iron must have been used in building new roads or restoring those of the South, while the quantity yearly required for repair of track, at one-twentieth of the quantity laid, is now fully 240,000 tons, and in 1860 was only 150,000 tons. Yet, with all this enormous demand for iron, both during the war and since, the production has certainly increased little more in the nine years to June, 1869, than it increased in eight years under the " South Carolina nullification tariff," from 1832 to 1840, or in eight years under the " British free-trade tariff," from 1852 to 186.0y If these names, which Mr. Carey so freely applies, have any meaning, it must appear that " British free trade " is more beneficial to the iron interest than the system called protective. The importation of iron in 1860 was to the value of $18,802,227, and in 1869 the value imported was $29,443,917, and the increase was 56 per cent. But in ten years under low duties, from 1850 to 1860, the increase of importations was only 15 per cent., while the domestic production increased as largely as it has since the year 1860. It must therefore be conceded that, under protection, the country has not advanced in independence of foreign countries as rapidly as it did under non-protection. Statistics cannot be obtained of the progress of other branches IRON. HISTORY SINCE 1846. 231 of the iron interest. But it is reasonable to infer that they have suffered, first, because the cost of iron has been greatly increased ; second, because the importations of manufactured iron have largely increased ; and third, because Congress is even now assailed with passionate appeals for still higher duties, to protect the true manu facturer, not against foreign nations, but against the exactions of those who produce the pig-metal. The price of iron averaged $23.50 in 1860, and was only $20.09 in 18G1, but was increased to $50.22 in 1864, to $48 in 1866, and during the year 1869 has averaged about $39. With gold at $1.27, near the close of the year, Scotch pig sold at New York for $31.50 in gold, and the same metal sold in 1860, at the close of the year, for about $21.50. Whatever progress has been made in the production, then, has been at a cost of about ten dollars a ton in gold to the consumer, and to that extent the raw material of the manufacturer has been rendered more costly. Indeed, the disadvantage has been still greater, for the better qualities of American iron have been en hanced in price much more than the Scotch pig, and the lower qual ities which sell at nearly the same price. An increase of ten dollars / in gold in the cost of the material is equivalent to a tariff of twelve / dollars and a half in gold against the domestic maker of bar-iron. In consequence, the value of railroad iron imported has increased from $3,700,000 in 1860 to $7,281,005 in 1869, and the imports of sheet, band, and other manufactured iron, have largely increased. At the same time the value of pig and scrap iron imported, which was $1,106,000 in 1859, has increased to over $4,700,000 in 1869. _Jt_is_ impossible to deny, what the iron manufacturers themselves indig nantly assert, that the other branches of the iron interest suffer greatly from the cost of the material. But while they complain that " all the profits in the iron business go to the pig," and clamor for increased duties on iron manufactures and steel, the production of pig-iron increases less rapidly than the importation of pig and scrap, and not more than it increased during eight years under non-pro tective duties, when the manufacture also throve. It is known that the consumption of anthracite coal in manufacture bears so large a proportion to the whole consumption that the manufacture cannot have increased much more rapidly than the production of coal. But the quantity of anthracite sent to market in 1860 was 8,143,938 tons, and in 1868 it was 13,405,016, an increase of only 64 per cent, in eight years. It is not possible that the manufacture can have in creased so much more rapidly as to equal the growth from 1850 to 232 DOES PROTECTION PROTECT? 1860, when the consumption of anthracite advanced from 3,321,136 to 8,143,938 tons, an increase of 146 per cent. The manufacture of iron has therefore been retarded, the impor tation of foreign iron has been increased 56 per cent., and the pro duction of pig-iron has advanced in nine yeaxs to June, 1869, scarcely more than it advanced without protection in eight years. What, then, is the effect of the protective system ? Simply to put money into the pockets of those who smelt iron, to the disadvantage of all other iron-workers, and at the expense of the whole nation. Nine teen thousand men were employed in 1860 in producing ore and pig metal, and over 198,000 in all the branches of the iron manufacture. To enrich one-tenth at the expense of nine-tenths of this same iron interest, and at a cost of many millions to the nation is this " pro tecting American industry?" Is it not, rather, taxing American industry for the benefit of a monopoly? In January, 1868, Mr. Hewitt, reporting upon the manufacture of iron as illustrated by the Paris Exposition, said : In the Cleveland region (Great Britain), which is most favorably situated for the cheap production of iron, the cost of producing a ton of pig-iron is about forty shil lings, which, at the average rate of wages paid around the blast-furnace, is equiva lent to eleven -days labor that is to say, the labor of eleven men for one day. It is possible that in one or two works this may be reduced to ten days, but in other s it rises to twelve or thirteen. In the United States, the cheapest region for the manu facture of pig-iron, as yet extensively developed, is on the Lehigh River, in the State of Pennsylvania, where, taking coal and ore at their actual cost of mining, pig- iron is produced at an average cost of $24 a ton, which represents at the present rate of wages the labor of about thirteen days. But, when the iron business is established along the Great Yalley which extends from Virginia to Alabama, the labor of bringing the coal and ore together will be considerably less than on the Lehigh River, and it is safe to say that then iron can be made in any required quan tity, when the avenues of communication are sufficiently opened, with as little labor, to say the least, as it can be produced in the Cleveland region. The statement of Mr. Hewitt was made when gold was worth about 140 ; the average cost in gold, therefore, as stated by him, is $17.28. In 1854 the cost was not over $15 ; anthracite coal being 82 a ton. It requires now not more, but less, of human labor to make a ton of iron than it did it 1854; the mines are better devel oped, the facilities for transportation and for saving waste are more complete, and the construction and management of furnaces are much improved. If Mr. Hewitt s statement is correct, the protective system has increased the cost of production $2.28 in gold, partly by giving a monopoly to the coal-mines, and partly by the increased IRON. HISTORY SINCE 1846. 233 cost of living, which necessitates higher wages for labor. Pig-iron has never sold below $10 a ton in England, and the cost of trans portation, twenty shillings, with insurance, interest, commissions, and brokerage, about six shillings more at the least, increases the cost of imported iron without duty, or any allowance whatever for profits or transportation from shipboard to consumer, to at least $16.50 in gold. When iron could be made at a cost of $15 in gold, the business prospered, and foreign iron, had there been no duty at all, could not have been sold, even in the seaports, as low as the cost of production here. Not only was this true as regards anthracite-iron, but charcoal-iron then cost, according to a statement by the manu facturers themselves at Constantia, New York, only $16.25 per ton the items being for 150 bushels charcoal at 5 cents, $7.50 ; for 2 tons ore at $1.75, $3.50; for flux, 25 cents; for labor, $2, and for interest and repairs, $3 a ton. To get the imported iron to Constantia cost $2 a ton freight from the seaport, and in proportion as furnaces are located farther inland, the natural protection in cost of transporta tion becomes greater. Prior to the war, therefore, iron could be made, both with anthracite and charcoal, at lower cost than imported iron, of inferior quality, could have been delivered at any seaport " ffeejof duty. But the actual cost in human labor is less now than it was then. If artificial burdens and prices have raised the cost of production, as measured in gold, to $17.28, and in currency to $24 a ton, they have to that extent rendered the country less independent in its industry. But Mr. Hewitt s statement is far below the figure at which iron-makers now put the cost. In memorials published, makers in different parts of the country now assert that the actual cost of making iron is from $29 to $32 in a currency now worth about 80 cents. They assert, therefore, that the cost of making pig-iron is now $24 or $25 a ton in gold, whereas in 1854 it was $15 in gold, and in 1860 the average price of all the iron made in Penn sylvania, according to the census report, was only $19.41 per ton, after yielding to makers a fair profit. If their statements are truth ful, the system of artificial prices and burdens has simply increased the cost of making a ton of pig-iron $9 a ton in gold, or 60 per cent. Evidently, then, the duty ought to be raised still higher, because the poor iron-maker is actually worse off than he was in 1860 ! By all means, let us have duties still heavier, so that the cost of production may be still more increased, and our dependence upon foreign countries may be rendered more complete ! The real cost of a ton of pig-iron, according to statements 234 DOES PROTECTION PROTECT? recently published by Mr. Wells, is not more than $24 to $26 in currency, but in almost every part of the country it is claimed, apparently with truth, that furnaces favorably situated and well managed are making iron at a cost not exceeding $23. At Brazil, Indiana, it is asserted that the actual cost is $22.50, and that one furnace returned to the owners in seven months all the money in vested. At Clarksville, Tennessee, according to a statement by Mr. George T. Lewis, iron can be made and delivered at Nashville at a cost of $19 a ton, currency. At Round Mountain, Alabama, works located upon the banks of the Coosa River can make iron at a cost of $16 to $20 a ton. At Youngstown, Ohio, the Mahoning works make iron, according to a statement of the proprietors, at a coast of about $25. At St. Louis, Missouri, the actual cost is be lieved to be less than $23. The following actual record of a week s work in the Carondelet furnace shows the items of cost : Quantity used. Cost. Per ton. Coal 163 tons. $978. $5.87 Coke 52 " 468. 2.81 Ore . 222 " 1,276.50 7.66 42 " 37.80 .22 Mill cinder 11 " 27.50 .16 738.18 4.43 166| tons produced; cost, $3,525.98 ; per ton, $21.15 Allow for repairs $5,000 a year, which, the statement of one of the largest iron-makers in Pittsburg asserts, is sufficient to cover re pairs and incidentals, and the cost will be $21.75. The furnace at Carondelet was an old charcoal furnace, height 40 feet, width of bosh 11 feet 3 inches, never suitable for smelting with raw coal, and very imperfectly repaired for the purpose of testing the Big Muddy coal. Its expense for repairs, therefore, is not properly included ; and in the above statement the actual weighings of material and payments for labor are given from the books of the company, but for coal $6 a ton is allowed, and for ore $5.75. But the ore actually costs at the mines $3.50 per ton, and for freight 74-J- miles $1.90; total, with al lowance of 5 per cent, for waste, $5.67. The coal costs at the mines $3.85 per ton ; freight to Carondelet 75 ; total $4.60, but the arrange ments for transfer are so imperfect that it is claimed that 25 per cent, of the coal is wasted, and the cost of a ton weighed into the furnace is $5.75. Yet, with all these disadvantages and with allowance for IRON. HISTORY SINCE 1846. 235 more than the alleged waste, the cost of iron was only $21.15, or, allowing ordinary repairs, $21.75. In the same town two large and splendidly-equipped furnaces have been operated since July by the Kingsland Company, who state (January 1st) that they made 7,000 tons of metal, used 11,083 tons of ore, and 8,300 tons of coal. But the ore cost $5.40, and the coal $4.60: the cost per ton of metal made was therefore of ore $8.55, and of coal $5.45, and, supposing that the other expenses were the same as those of the other company, the cost was $21.62 per ton, or, allowing as before for repairs, $22.22. These are estimates of the actual cost of making iron at present, when the coal costs $4.60 and the ore $5.40 per ton. But the cost of mining coal in 1860 was about 50 cents a ton, and it is now arti ficially increased. The cost of mining ore, accessible in inexhausti ble quantities on the level of a railroad track, as at the Iron Moun tain, should not be more than 50 cents a ton ; in 1857 the Pilot Knob ore was delivered at the furnace at a cost of 20 cents. Adding freight, the cost of the coal at Carondelet would not necessarily be more than $1.25 a ton, and the ore $2.40 a ton. Where does the difference go ? The greater part of it in profits to two monopolies, one of coal, and the other of iron. In like manner the cost of trans portation of ore by railroad is increased, because there is but one road and it chooses to make somebody else pay for the increased cost of iron, rolling-stock, and machinery. The necessary cost of transportation is not more than $1 per ton of ore, and the necessary cost of the ore delivered is not more than $1.50 a ton. Allowing the same for other expenses as before, the necessary cost of making iron at Carondelet would be 11,083 tons ore, $16.624, or $2.37 per ton of iron; 8,300 tons coal $10.373 or $1.48 per ton of iron; flux, labor, coke, and repairs, $8.22 per ton ; total cost, $12.07 per ton. The iron sells for $36 to $38 a ton. The difference goes in part to the owner of the coal-mine, in part to the owner of the iron-mine, in part to the owner of the railroad, in part in the increased cost of production caused by artificial burdens, and after paying all these charges there remains a profit of fourteen to sixteen dollars a ton to the makers of iron. It is probable that iron can be made as cheaply in Missouri, or near the coal-fields in Illinois, as anywhere else in the country, and in quantity unlimited. But in other States, if the statements of Mr. Hewitt and Mr. Wells are correct, iron can be made at a cost below the lowest price at which foreign iron can be imported free of duty. It was made before the war at such cost as to defy competition, not 236 DOES PROTECTION PROTECT? only by Pennsylvania, but by other States. If the cost is greater now, to that extent has the system of protective duties deprived us of the industrial independence achieved before the war, and the plain remedy is to remove the artificial burdens which increase the cost of production. Take away the duty, so that the owners of mines may be driven to consult their own interests, by selling a larger quantity of coal or ore at a smaller profit ; so that railroad transportation may cost less ; so that the making of iron may be in creased in those regions where it can be made at reasonable cost. The duty on pig-iron is not merely unnecessary. It works great injury to the makers of bar and wrought iron and steel, to the makers of castings, hardware, and other products, in which compe tition is apprehended ; to the manufacturers of all machines, agri cultural implements, and nails, and to all blacksmiths and others in cluded in the non-protected branches ; to all other branches of manu facture in which machinery or tools are used ; to all transporters by rail or steamer, and consumers of products transported, and finally and mainly, for upon the producer all burdens at last must mainly . fall to the whole agricultural interest. If that duty were entirely removed, the whole iron interest would prosper. The rolling-mills could afford to reduce the price of railroad iron at least $12.50 in gold, and not a single ton of British rails could be imported at that price, while more railroads could be built, and transportation could be rendered less costly. It is a trifle in comparison with other benefits, that we should then keep at home 87,281,000 nqw^sent abroad to pay for rails. Bar-iron could be likewise reduced in price, and the makers would not be forced, as many have been during the past year, to stop work or sell at a sacrifice. The makers of steel, w T ho are now begging for higher duties, would be aided more by a reduction in the cost of the material than by an addition of $20 a ton to the duty on steel. Manufacturers of machinery of every kind could make better profits and pay better wages, and yet supply ma chines at less cost. Nails, which sold before the war at 3 cents and now sell at 4J cents, the mills even at that price losing money, could once more be reduced in cost, while the factories would become profitable. The founderies would prosper, and the poor man pay less for his stoves. Agricultural implements and machines would cost the farmer less, and the blacksmith, getting iron, and anvils, and hammers for less, could make more money, and work more cheaply. Thus the whole iron interest would prosper, and the increased de mand for iron of all kinds would compel an increased production of IROX. HISTORY SINCE 1846. 237 pig-iron. American industry would thus be truly protected, and the benefits would be diffused, as the burdens are now, through the whole community. Would the removal of the duty close the furnaces ? Does not the history of the last decade answer the question? American stone-coal iron sells at about three dollars a ton more than Scotch pig, because of its superior quality. While anthracite sells for $38, charcoal mill iron sells for $42 to $44, and foundery-iron for $46 to $50. If the other qualities are so much more valuable that they command from $4 to $12 more per ton than the anthracite, it is plain that, if the anthracite-iron can meet foreign competition, no other need fear. But that iron is also worth more than the foreign. It sells for about $38, and the duty on the foreign iron is $9 in gold, or, when gold is at 130, $11.70 in currency. The price could not, therefore, be reduced by removal of the duty lower than $26.30. If the iron costs $24 a ton, as Mr. Hewitt states, the repeal of the duty would still leave a profit of $2.30 on every ton. But, if the actual cost is not greater than it was before the war, $15 in gold, or (at 130) $19.50 in currency, the profit on every ton would be $6.80. If the cost is greater, then protection has crippled our strongest industry, and the sooner we tear that industry from the lap of Delilah the better for the iron manufacture and for the country. That the manufacture of iron suffers from the protective system, is confessed in frequent declarations like the following, from a letter published by W. H. Powell, superintendent of the Clifton Iron Works, Ohio : It is, however, very true, as has been claimed by you in your issue of the llth instant, that, at the present prices of pig-iron in the West, the entire rolling-mill, nail-factory, and foundery interests of the West, are completely paralyzed and ren dered unremunerative, while the furnace interests have beyond all possible contradic tion paid enormous dividends ; and were it not for the fact that the production of pig-iron must, and will of necessity, in consequence of the largely- increased produc tive capacity, exceed the demand to the extent of a gradual decline, such as we have predicted, and which result will be reached in as short a period as could possibly be reached through Congressional legislation, we would earnestly and industriously advocate the change of the present tariff on pig-iron from $9 to $4 per ton, and an increase on bar-iron, etc., of $5 per ton. We are decidedly opposed to the frequent Congressional tampering with and changes in the laws that regulate the great in dustrial pursuits of our country. The expectation that the price of domestic iron will in time be reduced (the tariff remaining), is not warranted by any incident in 17 238 DOES PROTECTION PROTECT? our history. For fifteen years under protection, from 1818 to 1832, the price was sustained, with scarcely any reduction. During the last year of the tariff" of 1842, when the production was over half a million tons, the price was over $38 ; though in the first year of that tariff, when the production was much smaller, the price was less than $26. In 1860 we produced 987,000 tons, at a cost of little more than $22, and now it is claimed that the production has in creased 77 per cent., but the price remains over $31 in gold higher than in 1860, by just the amount of the duty. The truth is, that there is really a monopoly in this branch of production, and as long as the iron-producers maintain their association, and prefer to stop work than to encourage the manufacture by lower prices, the ex perience of 1832 and 1846 is likely to be repeated. But, if the state ment of the iron-makers be accepted as truth, there is another reason for high prices. They assert that the actual cost of production has been increased from $15 a ton in 1860 to $25 a ton in gold, or $30 currency. If nine years of protection have so increased the cost, how many years more will be necessary to make it impossible to sell iron lower than $40 in gold without a sacrifice ? If nine years in creased the cost 60 per cent., continued protection nine years longer, until 1878, would raise the cost of producing pig-iron above $41 in gold! The country can no longer afford to garrote its most important branch of manufactures.. In the iron interest alone, we are strang ling nine- tenths to protect one-tenth. Nor does that protection accelerate the increase in the quantity of pig-iron produced, but it increases importations, increases the cost of production, and thus renders that industry permanently more feeble, more exposed to assault, and of less profit to the country. At every point the sys tem is wasteful. Which is the true protection of American industry, to secure a profit of $17 a ton to the owners of a few hundred fur naces, or to secure prosperity to thirty millions of laborers ; to secure more work and better wages to fifteen thousand blacksmiths, eleven thousand workers in sheet-iron, sixteen thousand makers of agricul tural implements, forty-eight thousand makers of machinery, and to put sixty-seven thousand people engaged in the manufacture of iron beyond the reach of foreign assault ? Let that question be asked in Congress ! Let it be determined whether " protection to American industry " means a monopoly for the furnace-owner, or prosperity to the manufacturer, the machinist, the blacksmith, the transporter, the farmer, and the whole body of workmen of these United States. ARE MONOPOLIES BLESSINGS? 239 PRICE OF IRON. Average yearly, as stated in the Special Report of Commissioner Colwell, 1866. YEAR. YEAR. 1838 1839 1840 1841 1842 1843.... 1844 1845 1846 1847 1848 1849. ... 1850 1851 1852 1853 1854 1855 1856 1857 1858... 1859. 1860. 1861. 1862. 1863. 1864. 1865. 29 20 20 16.50 PRICE or PlG-lRON. Great Britain 10.02 BAR-IKON. RAIL D United States. Britain. 40 46@58 37 46@51 29.8540@56 29.3340@45 25.2934 25.28J 23.44 25.72 26.87 29.25 27.81 30.21 26.50 21.02 20.82 21.38 .. 22.63 10.24f 36.07 17.05i 37.16 16.19 27.74 14.83 27.18 12. 30 1 26.35 10.09 22.19 10.32! 23.32 United States. 41.25 43.50 45.47 32.13 88.181 26.681 25.90 29.25 43.85 48.25 43.50 44.86 41.22 41.15 42 10. 83 -22. 17^38. 19 10 20.09 36.98 10.56! 23.92 37.18 States. 11.25 11.13 35.24 1.22 10.64-46.25 39.61 37 88.02 88.43 75 68.16 57.91 56.54 60.60 74. ( 78.71 74.29 69.10 59.06 62.25 43.38 ! 53.88 41.87i 47.83 37. as! 45.60 38.64 48.43 64.77 77.23 70.04 80.08 58.54 62.90 58.72 64.33 55.14! 50 48.11 50 45.37 42.43 44.02 59 47.95. 42.38 41.73 73.57 76.84 . 1126.02 By comparing this statement with the official record of actual quotations at New York (see pp. 221, 222), it will be seen that this table, which is supposed to be taken from " Statistics of the Iron and Steel Association," is often (and sometimes widely) in error in regard to American prices, and comparison with other records shows that it is entirely unreliable as to British prices. But it is, nevertheless, the only information obtained as to the price in certain years. CHAPTER XVII. ARE MONOPOLIES BLESSINGS ? THE three great manufacturing interests iron, cotton, and wool employing, with dependent branches, in 1860, not less than 387,964 hands, and yielding an aggregate product of $468,600,000, have now been considered. It has appeared that, of the iron interest, less than 240 DOES PROTECTION PROTECT? one-tenth is protected, to the injury of nine-tenths, and at the ex pense of the whole people, and that the single branch of industry thus favored the making of pig-iron has never by high duties been truly benefited, or stimulated permanently to greater produc tion of wealth, but, by putting great profits in the pockets of a few men, the true progress of that industry has been retarded. It has appeared that the cotton manufacture has never needed protection, and, with or without it, has advanced in proportion to the increase of the cotton crop, but has been only retarded in a healthy growth by the protective system and the frequent changes therewith insep arably connected. It has appeared that the woollen manufacture has been repeatedly prostrated by the duties on wool, while those duties have never benefited, but uniformly injured, the wool-grower, and that this industry would now be stronger without the protective system and its fatal changes than with it. Space does not permit a similar minute examination in regard to all other branches of manufacture. Nor is it necessary for the satis faction of any candid inquirer. For it will surely be acknowledged that, if the system of protective duties has failed to strengthen or benefit these three great branches, which have been more assiduously guarded by legislators, and fenced about with higher duties than any others, then indeed no results more satisfactory can be expected from the less persistent and less careful protection which has been granted to other industries. No reasoner, whose object is the dis covery of the truth, will pretend for a moment to defend the system of protective duties, unless it can be sustained in its application to these, the main objects of its care. No general tariff act, having protection in any degree for its object, has ever been passed in an American Congress, except at the urgent demand of one or more of these interests, and in the hope of aiding them. Take away the strength which those interests have in Congress, and there would not be left of the advocates of protection a force large enough to call the yeas and nays. Remove from the popular mind the feeling that those great branches of manufacture need artificial support, and can by such support be really aided, and there is not a State, from the Atlantic to the Pacific, in which persons, proposing to tax the people for the benefit of any other interest, would have strength enough to - secure a hearing in any convention of any party. These three inter ests are the backbone of the whole protective policy ; let it once be conceded that they cannot be aided, but have in fact been retarded by duties designed to aid them, and the policy of protection would, ARE MONOPOLIES BLESSINGS? 241 with almost absolute unanimity of opinion, be instantly and forever abandoned. Neither is it necessary to the logical completeness of this inquiry, to trace the history of other branches of manufacture in detail. For it has been ascertained that the production of wealth by agriculture has been retarded by protective duties, and from agriculture come three-fourths of our annual product. Of those branches of industry from which the remaining fourth is derived, it was first ascertained that industries yielding two-thirds of that fourth were not aided by protection, and of the other third more than three-fourths are derived from the three great industries examined. The account stands thus : SOURCES OF WEALTH. Industry. Effect. Net Product Agriculture Injured. 2,600,000,000 Natural Manufactures " 478,100,000 L~on, Cotton, aud-Wx>ol " 243,400,000 All other branches Unknown. 80,900,000 So small in relative importance are the branches of industry re maining, that if every one of these had been absolutely created by protection, and had its entire product been due to that influence, it could not compensate for the actually ascertained injury to agricul ture alone namely, the loss of seven and a half per cent, in its yearly increase. Still less could it compensate for that injury and the further injury to the more important branches of manufacture already examined. It is therefore plain that the production of wealth, in the aggregate, has not been increased, but has been re tarded in its natural progress, by the tariffs called protective. And, were logical completeness only desirable, this branch of the inquiry might here be dismissed. But it is also desirable to show, some what more fully, the effect of the protective system upon other branches of industry which produce necessaries of daily life, or the materials for such production. And, in glancing somewhat hastily at these, we shall find new illustrations and convincing proofs of the two principles which have already been so constantly traced, namely, that protection artificially increases the cost of production, and that security against competition prevents the surest and most rapid progress. An important industry, and one formerly supposed to need pro tection, is the manufacture of paper, in which there were employed, in 1860, 10,911 hands, who produced to the value of $21,216,802. 242 DOES PROTECTION PROTECT? At the first step in tracing its history there is found proof that, what ever it may once have needed, this industry does not now need arti ficial aid. For, in 1850, the number of hands employed in this branch was 6,785, and its product was $10,187,177. A manufacture which increased 110 per cent, in a decade of non-protective duties, the low est since 1816, can scarcely be thought to need any extraneous assist* ance. Indeed, this is par excellence the paper-making and paper- using nation of all the world ; we made more paper in 1860 than either England or France, and were believed to consume more than both together. Those two countries produced in 1854 only 334,600,000 pounds of paper, while this country in that year produced 270,000,000 pounds, and the production of England and France was 4. 5 5 pounds per capita, while that of the United States was 10.80 pounds per capita. As early as 1790, Alexander Hamilton classed the manufacture of paper among those which had arrived at the greatest maturity, and was most adequate to a national supply. The census of 1810 showed that the consumption was supplied almost wholly by the domestic manufacture, and from that time to this rags have been largely im ported to supply a lack of material. After the war, among other manu factures which suffered from the competition stimulated by fictitious prices was that of paper, and duties were imposed in protective tariffs for its support, of 30 per cent, in 1816, specific from 3 to 20 cents a pound in 1824, and from 3 to 17 cents in 1842. But in the general prog ress of manufactures in the period of the compromise tariff this branch became one of the most firmly established. In 1830, just before pro tection ceased, the Fourdrinier machine was first manufactured here, and that and other greatly-improved mechanism were very generally adopted during the period from 1832 to 1840. In 1836, when the im portations of all articles were extravagantly large, we imported only $152,000 worth of paper of all kinds, and in the same year exported $44,85 7. So insignificant were our imports of this article that in many Treasury reports of that date they are not specified at all, but our ex ports of paper and stationery became a regular item of consequence in the yearly account. In 1847, we were exporting paper worth $88,731 ; in 1850, $99,696 ; in 1855, $185,637 ; and 1860, $285,798. At no time have our imports of paper formed any appreciable share of our consumption ; thus in 1840 we made paper worth $5,641,499, and im ported less than $100,000 ; in 1850 we made paper worth $10,187,177, and imported less than half a million; and in 1860, when our product was over twenty-one millions, we imported writing-paper worth 4300,000, wall-paper worth $144,000, and manufactures of paper ARE MONOPOLIES BLESSINGS? 243 amounting to about 8200,000 more. In 1868, under the high duties, we imported about one million worth more than before, but still not enough to be seriously compared with the domestic product. The truth is, that since the manufacture with the modern machinery became thor oughly established in this country, which had taken place by 1840, the paper manufacture has been absolutely independent so independent, indeed, as to form at times, by combinations among makers, a most odious monopoly. The importation has been mainly confined to such products as the fancy or taste of consumers may prefer to the cheaper American article. From 1840 to 1850, with four years of protective duties, the manufacture increased 81 per cent. ; and from 1850 to 1860, without protective duties, 110 per cent. It would be a waste of time to consider this manufacture more at length, did not its recent history afford some instructive items. When protection came as an epidemic in 1861, it attacked this s, and gave it 35 per cent, duties upon foreign which still remains. Not long after, the war and other causes having induced a very rapid increase of consumption, the paper-makers found themselves in possession of a valuable mo nopoly, which-they used remorselessly. Prices beyond all reason were demanded and obtained, and, all checks through foreign com petition upon this plundering of the public being removed, the paper- manufacturers realized enormous incomes. In one collection district ninety-nine persons interested in this industry returned in 1865- 66 incomes of $948,988 ; one corporation an income of $178,000, and ten individuals an average of $31,430 each. In consequence, after the public had been fleeced in this way for three years, 1863- 65, the manufacture began to extend very rapidly ; and more paper- mills were put in operation in the years 1865- 66 than in a long period before. But the production had not been much less than the demand, and prices fell with great rapidity. The whole industry was prostrated more seriously than ever before ; many men lost all their capital ; many mills were sold at a great sacrifice ; and in the spring of 1869 the manufacturers in New England met in conven tion to discuss the propriety of " decreasing the production of paper." In October, 1869, a great storm helped them by destroying many mills and dams, and this providential interposition was regarded as a real relief. Was~it for 4he^.good of the country to induce so many men to ruin themselves, in order to effect what foreign. com petition, if let alone, would have effected without injury to anybody a reduction of the cost of paper ? Can any system be a blessing 244 DOES PROTECTION PROTECT? to a country which needs a foreign war to give it a fair start, and an occasional earthquake or tornado as an antidote to its poison ? Yet is not this the very core of the protective theory that with drawal of foreign competition, by giving to an industry unnatural profits, will force it to a growth unnaturally rapid ? It has been proved that this supposed law is not alwaj^s sustained by facts ; that in some cases the unnatural profits do not accelerate but really re tard the growth of an industry. But in the history of the cotton manufacture, and now in that of the paper manufacture, it also ap pears that, in every case where the unnatural growth is produced, it is followed by a prostration correspondingly severe. That prostra tion cripples hundreds of the most enterprising men, sweeps away an enormous capital, and so crushes an industry that an earthquake or a tornado seems a blessing if it annihilates a property wasted in over-production, and then, with reduced energy and means, the in dustry begins once more the Sisyphus-labor of rolling the rock of protection up-hill ! If it be true and facts prove that it is true that these prostra tions retard the progress of an industry more than the seasons of forced growth help it ; that they undermine its vitality by crushing not the worst but many of the best men engaged therein, whereas natural competition weeds out the poorer and strengthens the more competent manufacturers then does it not follow that the system of protection, even when its very best results are realized, and all its theories are answered by facts, simply retards real progress in the production of wealth ? Does it not induce to wasteful employ ment of capital and energy, and sustain men for long series of years in such waste of means, when natural competition would quickly warn them of their error ? Does it not in this way undermine and weaken even the most vigorous industry, and prepare it to need perpetual nursing in hospital, and shelter from that very competi tion which would have preserved its health ? These surely are ques tions which go to the very root of the matter, and the records of the manufacturers of paper and cotton supply the answers. The pro tective system is a boomerang a weapon fit only for barbarians to use, which, in civilized hands, is quite apt to knock the thrower on the head. Paper-making employed 10,911 hands, printing employed 20,159, in 1860, and yielded a product of $31,063,898. Whenever high du ties on paper increase its cost, they injure the larger industry of printing. Thus, during the years of extravagant prices already ARE MONOPOLIES BLESSINGS? 245 mentioned, the cost of paper forced hundreds of newspapers to sus pend, while others, raising their price, checked the increase of their subscriptions. Hundreds of job-offices were broken down ; and all, obliged to charge more for work, had less work to do. Many a book went unpublished which might have yielded a profit to pub lisher and author ; many more which were published met with a sale limited by their enhanced cost, and resulted in loss instead of profit, because of the extravagant prices of paper. Thus the legis lative boomerang not only came back with force upon the paper monopolists, who deserved it, but it damaged another industry far more important in the production of wealth, and incomparably more important in its bearing upon the education of the people. But it is not true that, even at the expense of prostration, a mo nopoly always cures itself. The history of the pig-iron interest has proved that the monopoly sometimes perpetuates itself by checking consumption in time of high prices, and in the cotton and woollen manufacture it has appeared that over-production of a particular ar ticle is often relieved by working short time without a reduction of price. Perhaps the most striking illustration of this method of evading natural laws is found in the history of coal-mining. In mining coal there were employed, in 1860, 36,486 persons, and the value of their product was $20,579,329. At that time there were mined 14,577,648 tons of coal, according to the census reports, and the number of hands employed had increased from 15,124 per sons in 1850, or nearly 150 per cent., while the capital invested in this branch of industry had increased within the decade over twenty- one millions, or 253 per cent. It needs no other demonstration to show that this industry, as a whole, requires no protection whatever; and the least consideration of the cost of transporting a product so bulky in proportion to its value, will make it clear that any duties, however heavy, can have effect only within a short distance from the sea board. In 1860 the cost of moving coal from the mines to market was declared by the census reports to be at least 50 per .cent, on its cost at the mines, which was then $1.34 for bituminous, and $1.46 for anthracite coal. But the freight on coal from Port Carbon, Pennsylvania, to New York, in April, 1869, was $2.33 a ton, and in August, $4.08 a ton, while the price of coal in June was $3.75. One hundred per cent, on the cost is therefore charged for transportation 175 miles. It is plain that no foreign coal can be transported to this country, and then moved more than fifty miles inland, except in New England, without meeting a cheaper supply from our own 246 DOES PROTECTION PROTECT? mines ; for our deposits of coal are scattered over the whole country, from tide- water in Pennsylvania to Monte Diablo in California, and foreign coal cannot possibly compete with our own, except in cities on the Atlantic coast and on the lakes, and in New England. The coal duty affects those localities only. In New England, Northern New York, and New- York City, foreign coal might be used in place of the American anthracite, if no duty hindered. Coal is power. A vast manufacturing industry of New England and New York is by protection compelled to depend for its power upon supplies of coal from Pennsylvania. Anthracite-coal owners in the State of Pennsylvania tax all iron manufacturing in the Eastern States, and all other manufacturing which depends upon this coal for power. They are not slow to use the monopoly thus bestowed upon them by the aid of New-England votes in Congress ; and, as long as they can persuade Eastern members to vote for protective duties, so long will Eastern constituents pay tribute to Pennsylvania. Millions of them, who use anthracite for fuel, have had occasion within the last year to thank their representatives for a tariff by which the cost of that fuel has been more than doubled. With them the burden and the remedy might be left, since their votes contribute to sustain the very system which plunders them, were it not instruc tive to see how a monopoly can be prolonged without benefit to anybody. For the anthracite mining is really a monopoly, controlled in part by the mining companies, and in part by the combination of miners themselves. Having within a narrow boundary the only considerable deposit of anthracite in the country, they control the price at their pleasure, and New York and New England, from which Nova-Scotia coal is practically excluded by the tariff, form their principal market. Early in the year 1869 it was discovered, by no means for the first time, that the supply of anthracite coal exceeded the demand. When .the same thing had occurred before, the mining companies, by agree ing among themselves to stop production, or by getting up strikes I among their men, had repeatedly contrived to diminish the supply without permitting a reduction of the price. In 1869, the miners, who had learned the lesson thoroughly, took the matter into their own hands. Out of thirty thousand men employed in the entire anthracite region, over twenty-five thousand stopped work. The suspension continued for months. The price of coal rose to ten dol lars a ton in New York, and the miners, in their negotiation with employers, formally demanded that it should be agreed that, when- AKE MONOPOLIES BLESSINGS? 247 ever the price of coal should fall below five dollars a ton, all work should cease. Before the strike, miners were paid about 90 cents a car, or 45 cents a ton, for mining, and at this price were making better wages than the very best mechanics, the lowest order of unskilled and newly-imported labor in the mines being paid $12 a week. After the strike the miners obtained $2.39 a car, or about $1.20 per ton for mining, and laborers received as much as $22 a week. The object of the strike was to secure, first, such wages as these, and second, the agreement that work should stop whenever the price should fall so low as to make it impossible to pay such wages. It is easy to see that, if the consumption is not checked, the price of coal can be kept as high as the miners please, and they can charge the public, if they like, a year s wages for doing only a day s work, provided all competition can be excluded. But, if the coal of Nova Scotia were admitted free of duty, these monopolists could not plun der the public beyond that point at which it would be profitable to import. No argument is needed to show that the production of wealth is retarded by this combination to keep up prices, and by the duty which makes it practicable. The direct and avowed object of the combination is to prevent the natural increase in the production of coal, and to compel other laborers to pay an unnatural price for their fuel, and other industries an unnatural price for their power. In a word, this is the protective system stripped bare of all disguises. Its object is to pay men for a wasteful application of capital and industry, either to the production of articles which can be more cheaply imported, or to the production by methods or in localities not the most advantageous and economical ; and this it does by com pelling other industries to pay the favored one an artificial price for its product. When foreign competition is naturally excluded, by cost of transportation, from a large part of the country, and no duty whatever is necessary, the effect of the duty is, first, to plunder that part of the country which might otherwise supply itself more cheaply ; and second, to create an absolute monopoly, like the mining of an thracite, with power to impose almost any tax it may please, and, by stopping production from time to time, to compel the consumer to pay more and not less, whenever over-production threatens to reduce the price. Twenty-five thousand men idle for four months, and as many more idle because mills and factories could not afford to buy coal at $10 a ton is this the road to wealth ? It is an absolute waste of the in dustry of two hundred thousand men for a month of one-sixth of 248 DOES PROTECTION PROTECT? all the laborers engaged in non-agricultural production. But the same stoppage of production, to keep up prices, has been seen dur ing the past year (1869), in the cotton and woollen manufacture, and in paper-making. Suppose a law should require that one-third of all laborers employed in manufacturing should lie idle every month, taking turns, and that those who work should pay the expenses of the idle third; would any one think that a wise and economical dis position of our industrial energies ? Precisely the same in kind, if not in degree, is the effect of any law which, by securing artificial profits to any industry, prompts more persons to engage therein than the demand for its products will sustain, and enables them, by re peated seasons of idleness, to keep up prices in spite of the excess of production. High duties invite, in certain cases, an unnatural increase of the manufacture. Sometimes the result is a prostration, such as the paper manufacture has recently experienced. Some times, by perfect combination, the loss by wasteful over-production is thrown upon the consumer, as in the case of coal, and the country then pays three men for doing the work of two. The protectionist, when he interferes with natural laws, can never know with certainty which of these results will follow. But either of them involves a waste of energy, capital, and labor a destruction of a certain share of the wealth-producing power of the country. If thirty thousand men, working eight months, can supply all the anthracite coal we need, twenty thousand, working the whole year, can do the same at two- thirds of the cost, and the remaining ten thousand ought to be forced, by natural competition, to go to work at some other industry, in which they could contribute to the national prosperity. But, the fact is. that the consumption is checked by the price. The work of thirty thousand, full time, is needed to give other industries cheaper power, so that the thirty thousand and all other laborers may have cheaper tools and clothing. And each man of them would get as much money in a year, with coal reduced in price and wages also reduced, as he now receives, working only two-thirds of a year. But a law has created a monopoly, and the miner tries to use it. The consequence is, that he must be idle one-third of the time, the country must pay him for doing nothing, his tools and clothing become more costly, and all the country is taxed and all industry embarrassed. The manufacture of glass employed 9,016 persons in 1860, and yielded a product of $8,775,155. This is another industry which increased about 100 per cent, in the last decade of low duties ; for in 1850 the number of hands was 5,668, and the prod- ARE MONOPOLIES BLESSINGS? 249 uct $4,641,766. And in this case also we observe a less rapid increase in the previous decade, during which the protective tariff of 1842- 46 occurred. For in 1840 the glass manufacture employed 3,236 persons, and produced to the value of $2,890,293. The history of this industry shows a natural and steady growth, not greatly affected at any time since 1820 by foreign competition. In 1791 it had hardly found a footing ; but in 1810 Mr. Gallatin reported that the manufacture was firmly established, and the census showed a produc tion of 4,967,000 square feet of window-glass, while only 27,000 boxes were imported. This was before the adoption of any protec tive tariff ; thirty years afterward, after many years of high duties, the value of the entire product of glass-works was less than three mill ions, while the value of the window-glass alone produced in 1810 was over one million. The manufacture of window-glass and bottles for or dinary use had become, as Mr. Dallas stated in his report of 1816, so firmly and permanently established as to wholly or almost wholly supply the consumption ; but the protective theory of that period seems to have been to place the heaviest duties on those articles the manufacture of which least needed aid, and accordingly heavy spe cific duties were placed on window-glass, while other glass was ad mitted at a revenue duty of 20 per cent. By 1818 it is mentioned that the New-England Glass Company was established, which made " every variety of fine, plain, and the richest cut-glass for domestic supply and exportation to the West Indies and South America ; " and in 1823 ten glass establishments had been started in New York alone since 1818. The prostration of 1819 and 1820 severely affected the glass manufacture in Pittsburg, but with the revival of business it became more powerful than ever, and the New-England Com pany was in 1823 making 22,400 pounds of glass a week. In Pitts- burg there were, in 1825, seven glass-works, producing 27,000 boxes annually, and about $100,000 worth of domestic glass was then ex ported. In 1827 the manufacture of stained glass, decanters, white, flint and green glass, rivalling any foreign glass in excellence, is mentioned, and among the many manufacturers who then appealed for more aid there were none of this branch. In 1829 the manufacture of watch- crystals by two establishments is mentioned, and in 1831 it was es timated that the manufacture employed 2,140 persons and yielded a product of three millions. Whether all this progress was due to the protective duties on window-glass, bottles, phials, and cut-glass im posed in 1824 and yet in force, we can judge from certain facts, namely: the manufacture had grown prior to the imposition of these duties 250 DOES PROTECTION PROTECT? so as to become firmly established in 1816 ; it grew rapidly after the prostration in 1819, and before the duties of 1824 were imposed ; and, when those duties were reduced in 1832 by the compromise tariff, the price of American glass was affected very slightly. The tables of prices at the close of this chapter show that the price per 50 feet had been absolutely unchanged during the whole period of protection from 1824 to 1832, namely, $3.12, which shows that the manufacture, sheltered against competition, either made no improve ments or suffered no improvement to diminish the cost to consumers. But in 1834 the price fell to $2.75, and in 1836 to $2.25 @ $2.37. In that year the importation of foreign window-glass was only $190,000 not enough to interfere with the manufacture in any degree. But this competition simply proved that the domestic manufacturer could afford the ordinary qualities cheaper than the foreign glass could be imported. From that time the price was steadily reduced to $1.87 @ $2.67 in 1842, and to $1.83 @ $2.62 in 1843, according to the statement of Philadelphia sales. In 1840 the importation had fallen to $56,000, and was almost wholly of plate-glass. While the manufacture of window-glass, by far the most im portant branch of this industry, thus proved its independence, the domestic manufacture was pushed by competition, after the change of tariff in 1832, to that invention which has given it in this country a peculiar success. In 1834 the invention of pressed glass is first mentioned as having been adopted in this country, and it caused a complete revolution in the manufacture, enabling it to produce a great variety of articles at. prices much below those attained by methods formerly in use. This invention, though borrowed from us by England, helped to put this industry beyond the reach of danger, and the importation was reduced from $618,107 in 1836 to $360,847 in 1840, while the number of hands employed increased from 2,140 in 1831 to 3,236 in 1840. With such an increase of the manufac ture, and importations decreased so largely in spite of reduced duties, and so trifling in comparison with the domestic production, this industry may certainly be considered in little need of the pro tection given by the tariff of 1842. At least, that tariff did not diminish the trifling importation, but increased it to $519,210 worth of window and plate, and $167,019 of other glass in the closing year, 1846. It is, perhaps, a suggestive fact that the years 1845 and 1846 are the only ones, prior to 1860, in which English crown-glass is quoted in the tables of prices published in the Treasury report of 1863. In those years English glass is quoted at $3.50 to $4, and ARE MONOPOLIES BLESSINGS? 251 American glass, which before the tariff had sold at $1.87 @ $2.67, rose in 1846 to $2.06 @ $2.81, according to the Philadelphia tables. But after the expiration of that tariff the price fell to $1.65 @ $2.16. These facts appear to indicate that prices of American glass were so high in 1846 under protection that the English glass began to be considerably imported. For ordinary use, however, the American glass completely excluded the foreign, both before and after this protective period, and the importation then and since has been mainly of the finer qualities and larger sizes of plate and of silvered glass. In 1860 these items amounted to $1,630,000, while all other imported glass was valued at about $500,000. Importations not greater than these it will not be supposed could have retarded the manufacture, and it has been shown that the increase during the decade of low duties was 100 per cent. During the same non-pro tective period we increased our exports of glass more than 200 per cent. ; from $90,860 in 1846, the closing year of protection, to $136,682 in 1850, and $277,948 in 1860. The high protective duties recently imposed have not prevented an importation of glass nearly double that of 1860. For in that year the value of glass imported was $2,175,000, and in 1869 it was $4,194,881. No facts are accessible to the writer which indicate that the domestic manufacture has grown with equal rapidity, though it has been much extended. Several times, within the past few years, the price has been put up, strikes of workmen being alleged as the cause, and recently the workmen seem to have learned, like the coal-miners, to manage the matter for themselves, and the rates now paid are extravagantly high. Meanwhile the im portation has increased most largely of those very qualities which we long ago demonstrated our ability to exclude by domestic pro duction. In 1868 the cast polished plate imported, silvered or not, amounted to $712,608. But the " cylinder, crown or common win dow glass " was imported to the value of $1,238,239. Of this quality there was imported in 1860 only 18,827,897 square feet, and in 1868 not less than 29,325,991 pounds ! The importation of 1869 was very much larger ; in seven months in 1868 the quantity imported was less than 15,000,000 pounds, and in the same seven months in 1869 the quantity wa*s 24,301,262 pounds. How much longer must this " pro tection " continue, before it brings into absolute peril that very manu facture of window-glass which, far back in 1810, was officially de clared to be permanently established, and which under the low duties in 1840 had excluded all foreign window-glass except to the value of 252 DOES PROTECTION PROTECT? $56,746 ? Truly, if this is the effect of protection as compared with non-protection, the glass manufacture may well pray to be pro tected against its protectors ! PRICE OF WINDOW-GLASS. From 1835 to 1849, at Philadelphia. (Statement by Hay and Coffin, Treasury Re port, 1849.) YEARS. 8x10. 10 x 12. 10 x 14. 18 x 18. YEARS. 8 x 10, 10 x 12. 10 x 14. 1 x 18. 18:35 $2 37 $2 37 $3 09 $3 56 1843. $1 83 $1 92 $2 36 $2 62 1836 2 49 2 49 3 09 3 56 1844 1 80 1 90 2 30 2 57 1837 1838 1839 2 36 2 23 2 22 2 48 2 46 2 35 2 93 2 90 2 87 3 37 3 35 3 19 1845. 1846. 1847 1 70 2 06 1 92 1 79 2 25 2 10 2 19 2 44 2 28 2 44 2 81 2 63 1840 ,. 1841 2 23 2 05 2 35 2 26 2 87 2 76 3 19 3 07 1848. 1849. 1 79 1 65 1 95 1 80 2 11 1 87 2 44 2 16 1842 1 87 1 96 2 40 2 67 PRICE OF AMERICAN GLASS AT NEW YORK. From Treasury Report, 1 863. YEARS. 1825 1826 1827 1828 1829 1830 1831 1832 1833 1834 1835... 1837. Per Box. 12 19@3 25 12 12 12 12 12 12 12 75@3 00 25@2 37 YEAR. 1838.. 1839.. 1840.. 1841.. 1842.. 1843.. 1844.. 1845*. 1846* 1847 1848 1849 1850... $2 75@,3 00 YEAR. 1851 1852 1853 1854 1855 1856 1857 1858... 1861.. 1863 Per Boz. CHAPTER XVIII. THE SALT MANUFACTURE. LONG ago, when Albany was a frontier town, the Indians used to bring salt from Onondaga to Albany with their furs. The manu facture which these savages were able to continue, though having to carry their product hundreds of miles on foot, now demands a duty of 130 per cent, to keep it alive ! In 1629, the fishermen of Cape Cod brought back from the sea shore good salt, spontaneously produced by the evaporation of the * For these two years the Treasury table gives no quotation of American glass, but gives " English crown " instead. THE SALT MANUFACTURE. 253 water left upon marshes and rocks. Then it was first learned that our warmth and dryness of climate are peculiarly adapted to the manufacture of salt. But the work which the sun did spontaneously for the fishermen of 1648 of whom Plantagenet writes that " with out boiling, only in pans with the sun, each laborer may make six bushels a day " that work their descendants cannot do without a duty of 130 per cent, to protect them ! In 1787, the Oneida Indians ceded to New York the Onondaga salt-lands, and in 1797 the State first legislated on the subject ; and the product of the springs was 25,474 bushels. Sixty miles west ward, this salt could then be sold for half a dollar a bushel, or $2.50 a barrel; in 1867, its price at Syracuse was $2.35 per barrel, and at Buffalo, 82.50; but in New- York City the patriotic owners, after paying 37J cents a barrel for transportation, could afford to sell it for $1.75, and in Canada they are selling it even now at $1.35 a barrel, in gold. These wells yield a bushel of salt for every 30 to 50 gallons of brine evaporated, and the actual cost per bushel in 1858 was not more than 6 cents. If the cost was doubled in 1867 and it was not the Onondaga Company realized on every barrel of five bushels, costing 60 cents, a profit of $1.75, at the Syracuse price not quite 300 per cent. An industry so needy and deserving as this surely should be carefully protected by every statesman ! In the War of 1812, the salt-wells on the Alleghany were opened, and before the close of the century salt was made and sold at mod erate prices in Kentucky, Tennessee, on the Illinois and Wabash, and west of the Mississippi ; and the Wabash salines had been used for more than half a century by the Indians for the manufacture of salt, before the Americans came into possession. In 1809 these supplied 130,000 bushels of salt, and many other works at the West so reduced the price that during the war with England salt averaged only 87J cents a bushel at the West, while worth from three to six dollars at the seaboard. Yet Mr. Greeley thinks we must put on high duties to prevent the West being forced to pay too large prices. There are a great many people at the West, at this moment, who would be pleased to get foreign salt at the cost of importation, so remorseless have the monopolists learned to be under protective duties. In 1789 Congress imposed a duty of six cents a bushel, and in 1790 we imported 2,337,920 bushels. But, finding that a then far more important industry would suffer in consequence, Congress authorized a drawback on salt intended for the fisheries, and, when 18 254 DOES PROTECTION PROTECT? the duty was increased in 1797 to 20 cents a bushel, an increased drawback was authorized. But, in 1806, convinced that the whole duty was onerous and worse than useless, Congress repealed it, in spite of protests. The product of the Onondaga salt-works in this year was 165,448 bushels, and by 1809, or within three years after the duty was repealed, it had increased to 300,000 bushels. The importation was neither materially increased nor diminished, but for six years ending 1807 had averaged about 3,000,000 bushels, exclu sive of the quantity used in fishery and for exported meats. During the next ten years after the repeal of the duty, extensive works were erected, and the domestic production greatly increased. By 1810, works in North Carolina, covering 275,000 square feet, had been erected, and the Western States supplied about 300,000 bushels. The census of 1810 reported 62 salt-works, producing 1,238,365 bushels. During the war our foreign trade was greatly interrupted, first by hostilities, and second by another blessing in the estimation of protectionists enormous duties. A duty of 20 cents a bushel on salt, with the interruption of trade, caused the price to rise, in 1814, at New York, to $3 a bushel. The production was rapidly increased, but could not supply the demand, and in spite of the duty, after hos tilities ceased, imports became larger than ever. In 1826 it was stated, in documents laid before the Senate, that the quantity of salt made in the United States was 4,113,000 bushels. If this estimate be accepted as correct, it enables us to make a comparison of do mestic production with imports. For in that year, notwithstanding the duty of 180 per cent, on the first cost, the imports of salt for con sumption were 4,534,040 bushels ; total consumption, 8,647,000 bush els, of which 47 per cent, was of domestic production. At that time the price was 50 cents in New York, although Turk s Island salt cost at the island eleven cents, and New- York salt was not claimed to cost the producer more than 20 cents. In 1829, three years after, a report to the New- York Legislature recommended a bounty, in addi tion to the enormous duties, to still further stimulate this needy manu facture. Yet this same report admitted that salt was made at the works at a cost of 12J cents a bushel with fair profit to the makers, though it sold in New- York City at about 50 cents. Meanwhile the cost of Turk s Island salt had been somewhat reduced, and the importations had increased to 5,945,547 bushels, while the domestic production had increased to 4,444,929 bushels. Thus, in three years, the pro portion of domestic salt to the whole consumption fell from 47 per cent, in 1826, to 44 per cent, in 1829. THE SALT MANUFACTURE. 255 Very sensibly, Congress reduced the duty to 15 cents in 1830, and to 10 cents after that year, but in 1831 a committee reported that the poor manufacturer would be ruined unless the duty was restored. The same report stated that the average price at the West was then 62J cents a bushel, and yet the manufacturer who could produce at a cost of 12 J cents a bushel could not live ! Under the reduction of duty the price fell in 1831 to 42 cents in New York, and to 38 cents in 1833. In that year Baltimore merchants petitioned for a further reduction of duty, stating that a factory in Maine was able to sell rock-salt at 25 cents a bushel, and cleared $100,000 a year. But, although the manufacturers had declared that they would be ruined by the reduction of duty, it appears that the product of New York State increased from one million bushels in 1829, to 2,209,867 in 1834 a gain of more than 120 per cent, in five years. Thencefor ward, with duties reduced under the compromise act to almost noth ing, the manufacture rapidly increased, so that in 1840 the domestic production was 6,179,174 bushels, while the price at New York fell to 32 cents in 1840, and to 26 cents in 1841. But the admission of foreign salt at lower duty did not materially increase the importa tion, for in 1829 the quantity imported was 5,945,547 bushels, and in 1842 it was 6,127,439 bushels ; in 1834 the value of salt imported .was $839,315, and in 1842 it was $841,572. Contrast now the two periods, protective ending in 1830, and non-protective ending in 1840. The protective period held up the price of salt to 50 cents, though it actually cost only 12J cents, and increased production from 4,010,569 bushels in 1820, to 4,444,929 bushels in 1830 an increase of 10 per cent, in ten years. Mean while, the importation of salt had increased from 4,200,000 bushels to 5,945,547 bushels, or 42 per cent. But the non-protective period lowered the price of salt from 50 to 30 cents, increased domestic pro duction from 4,444,929 bushels to 6,179,174 bushels, or 42 per cent, in ten years, while the importation increased scarcely any. Is it not plain that the non-protective period, increasing the production of salt 40 per cent., and lowering the price to consumers 40 per cent, with out increasing imports, was really of greater benefit to the country at large, and more truly beneficial to the salt manufacture itself, than the protective period, which increased production 10 per cent., kept up the price, and permitted an increase of imports of 40 per cent. ? This contrast ought to be forced upon the attention of every man who claims that high duties must reduce prices, and at the same time check imports, and increase domestic production. The same 256 DOES PROTECTION PROTECT? principles which govern one branch of industry, also govern others. If these theories, the pet arguments of those who defend monopoly, are conclusively proved to be false in one case, they are unworthy of reliance in every case. The tariff of 1842 imposed a duty of about 75 per cent, on for eign salt, and the domestic production increased from 6,100,000 in 1840 to 6,500,000 in 1845. (The production in 1846 the writer has been unable to ascertain.) But in the same time the value of im ports had increased from $841,572 in 1842 to $911,512 in 1844, and $898,663 in 1845, and the quantity of salt imported from 6,127,439 bushels to 8,543,527 bushels in 1845. The tariff of 1846 reduced the duty to about two cents a bushel, and the production of salt at once rose from 6,500,000 in 1845 to 9,763,849 bushels in 1850, a gain of 50 per cent, in five years. Yet salt sold for 35 cents in New York, in 1845, and for 40 cents in 1846, and it fell in 1850 to 21 cents. Here was a gain of 50 per cent, in the quantity manufactured, and a gain of nearly 50 per cent, in the cost to the consumer. During the same time, imports had in creased only to 11,224,185 bushels barely 30 per cent. Here is the same contrast again. Protection increased the do mestic production 6 per cent., at a cost of 5 to 10 cents a bushel, imports meanwhile increasing 40 per cent. Non-protection in creased domestic production 50 per cent., and lowered the price 14 to 19 cents, imports meanwhile increasing 30 per cent. The two periods were each of five years, and each began with a year of con trary character the protective period with the year 1841, non-pro tective ; and the non-protective period with the year 1846, protective. Is it not time for some advocate of high duties to reconcile these oft-recurring contrasts, so striking and so impressive, with the theories upon which all protective tariffs are based ? Does it seem strange that high duties check production ? It is not strange at all. They create a monopoly, increase the cost of production, keep up prices, and pay people for adhering to wasteful methods. Meanwhile, prices elsewhere being reduced, partly because our duties force for eigners to cheaper production or smaller profits, importations in crease more rapidly than domestic production. But low duties and low prices increase consumption, invite competition, and compel our industry to strengthen itself against that of other countries by better methods or development of greater natural advantages. The duty on salt was reduced still further, to 1 cents a bushel, by the tariff of 1857, and the production of salt, during this entire THE SALT MANUFACTURE. 257 period of low tariff, increased more rapidly than population. It is noteworthy that this increase was not only in that locality which has the greatest natural resources then developed. The New York product increased from 3,838,851 bushels in 1846, to 7,521,335 bush els in 1860 a gain of about 100 per cent. But the product of the whole country increased from 6,500,000 to 12,717,200 bushels a nearly equal gain. The average value of the product for the whole country was about 18 cents a bushel in 1860, and that of New York about 17 cents. In 1846 salt sold in New York for 40 cents, and in 1850 for 21 ; it rose during the years 1853, 1854, and 1855, but fell again to 26 cents in 1856, to 20 cents in 1857, to 16 cents in 1858, and was sold at 17 in 1859 and 1860, and as low as 15 in 1861. Under these low prices the consumption rose enormously, and while Great Britain consumed only 25 pounds of salt per capita, and France only 21-J- pounds, our whole consumption in this country in 1860 was 26,811,427 bushels, or nearly a bushel per capita, and our domestic product alone was 22^ pounds per capita, or more than the whole consumption of France. Thus do low duties stimulate con sumption, create an enormous demand, and consequently invite and sustain a great increase of the producing industry. Because this manufacture had not absolutely excluded foreign salt, and though it had grown in New York and in the whole country 100 per cent, under low duties, there was still more salt imported than was produced, our legislators imposed duties designed to be prohibitory. By records of actual importations, Mr. Wells has proved that these duties range from 115 to 170 per cent on the cost of the article. The price in other countries has not yet been so much reduced as to entirely overcome this obstacle, and the impor tations for 1868 were 636,041,262 pounds, or, at 56 pounds to the bushel, about 11,358,000 bushels a reduction of 2,700,000 bushels. The quantity actually produced in the country is not known to the writer, but the price is so largely increased that it may well be sup posed that consumption has been checked. The same salt which sold as low as 15 cents in 1861, and 17 eents in 1860, at New York, now sells at 48 to 50 cents, while Onondaga salt sells at Buffalo at $2.45 a barrel ; salt made on the Ohio River sells at Cincinnati for 46 to 48 cents, and the price at New Orleans is about 50 cents. If we have increased the domestic production of salt, we have done it at the expense of an increase of price from 17 cents in 1860 to 37 cents (gold) in 1868- 69, so that, if consumption is as large in proportion to population as it then was, we are paying a tax of 258 DOES PROTECTION PROTECT? seven millions and a quarter in gold, in increased cost of the salt which we use, and of that tax precisely $1,136,225.76 is paid to the government. Over six millions a year in gold is paid in the shape of bounty, and those who wish to know where it has gone, may read the testimony of the secretary of the Onondaga monopoly, who states that the company has increased stock worth $160,000 in 1860 to not less than $4,498,969 in 1867. The letter of Duncan Stewart, president of the Saginaw Salt Association, who declares " the pres ent high tariff simply an outrage on the best interests of the coun try," and the pertinent facts presented by Mr. Wells in his reports, must surely convince any man that the protective duty on salt is not now necessary for the support of that industry ; and the facts here given prove that it never has been of any service, but has simply retarded the growth of this manufacture. Let the facts be remem bered : Protection. Product to consumption YEAR. Domestic product. Imported. Consumed. per cent. 1820 $4,010,569 $4,200,000 $8,210,569 48 1826 4,113,000 4,534,040 8,647,040 47 1829 4,444,929 5,945,547 10,390,476 44 Average price, 50 cents a bushel. Increase of product, 10 per cent. Increase of imports, 42 per cent. Non-pro tection. 1842 $6,179,174* $6,127,439 $12,306,613 50 Price reduced from 50 to 30 cents. Increase of product, 40 per cent. Increase of imports, 3 per cent. , Protection. 1845 $6,500,000 $8,543,527 $15,043,527 43 Price increased to 35 and 40 cents. Increase of production, 6 per cent. Increase of imports, 40 per cent. Non-protection. 1850 $9,763,849 $11,224,185 $20,988,034 46 1860 12,717,200 14,094,227 26,811,427 47 Price reduced to 17 cents. Increase of production, 95 per cent. Increase of imports, 65 per cent. * The product of 1840 is given instead of that of 1842, which is not known, but supposed to be at least as great. The figures for 1846, the last year of the second protective period, are not known to the writer. THE SALT MANUFACTURE. 259 Readers will ask with surprise two questions : " How does it come to pass that any American Congressman can suppose a duty on salt necessary or useful for protection ? " " How does it happen that duties of more than 100 per cent, have not checked the importation of this article?" The first question can be answered only by Congress itself. The second is within the understanding of the ordinary human intellect. Twenty-five years ago it was declared that " provisions packed with ordinary domestic salt suffer a depreciation in value, not only in foreign but in our own markets." There is a chemical difference between the salt spontaneously produced under a tropical sun and any which has yet been manufactured by any process, dear or cheap, in more northern latitudes, and the salt of the West Indies is there fore superior for use in packing meats, fish, and provisions, to any which this country produces. When we import Turk s Island salt, we are importing so much tropical sunlight, as the raw material of our packing industry and the attempt to shut it out is simply an endeavor to deny to our provision-packers the benefit of that tropical sunlight, and to " light the world with gas ! " No wonder it is impossible to exclude this necessary material of an industry so important ! In 1860 the packing of provisions em ployed 7,479 persons, and yielded a product of over $31,000,000. The salt manufacture employed 2,213 persons, and yielded a product of two millions and a quarter. But under the name of protecting American industry we are taxing, prostrating, and driving out of the country, an industry worth thirty millions a year, in a futile attempt to help, which in fact only injures, an industry worth two millions a year ! The number of hogs packed at the West, under the protec tive tariff, when salt cost from 30 to 40 cents a bushel, was 1,079,082 in 1844, 781,372 in 1845, and 1,087,862 in 1846 ; but when the duty was reduced to 20 per cent., and the cost of salt to 21 to 24 cents in 1850, the number of hogs packed increased to 1,652,220, to 2,201,116 in 1853, and 2,350,822 in 1860, when salt cost 18 cents. In this industry there was an increase under low duties, from 1846 to 1860, of more than 120 per cent., and, were statistics acces sible, it would probably appear that the whole packing business of the country increased, if not quite as largely, at least more largely than the importation of foreign salt. When this industry is re tarded, a part of the loss falls upon the farmer. In 1826, when the duty on salt was 20 cents, and salt cost over 50 cents in New York, the price of hogs in Cincinnati was $2 per cwt. In 1835, when 260 DOES PROTECTION PROTECT? the duty was about seven cents, and salt sold in New York from 30 to 40 cents, the price of hogs in Cincinnati was $3.12 per cwt. In 1846, when the duty was eight cents a bushel, and the cost of salt about the same as in 1835, the price of hogs was $3 per cwt. But, after the reduction of the duty to 20 per cent., the price of salt fell to 20 cents in 1852, and 26 cents in 1853, and to 17 to 18 cents in 1859- 60, and the price of hogs at Cincinnati rose to $4 per cwt. in 1853, and to $6.21 in 1860. Two facts prove at once the uselessness of the present duty for protection, and the evil effect of that duty upon other industries. From Mr. "Wells s report it appears that the salt company in New York not only can, but actually does, send the salt to New England seaport towns, and there sell it to the fishermen, who are by law privileged to use foreign salt free of duty, at as low a rate as that foreign salt can thus be obtained. At the same time, we annually export to the British possessions over half a million bushels of American salt, which can there be sold at lower rates than foreign salt can be obtained. The Toronto Globe states that the Onondaga Salt Company (December, 1869) are offering salt in that city at $1.35 a barrel, and at the same time the very same salt cannot be bought on this side of Lake Ontario for less than $2.45, currency, or $1.94, gold. Nothing can more forcibly illustrate the character of the shameless and soulless monopoly, built up and sustained by the pro tective duty, than these facts. The company can afford to sell, and actually do sell, their salt in Toronto, after paying the cost of trans portation to and across the lake, at 27 cents a bushel, and as trans portation costs probably 10 cents a bushel, they make a satisfactory profit, even now selling their salt for 17 cents just what it was worth in 1861. But on this side of the lake, having a comfortable monopoly, they refuse to sell for less than $1.94, gold, a barrel, or about 39 cents in gold a bushel. With satisfactory profit at 17 cents, they are permitted, under the name of " protection to Amer- can industry," to force every American wool-grower to pay 22 cents more in gold $1.10 gold, or $1.43 currency per hundred sheep for his salt ; to force every American pork-packer to pay $110, gold, or $143, currency, more than a fair price for every hundred barrels of salt used ; to force the whole people to pay, upon perhaps 35,000,000 bushels consumed, not less than $7,250,000 in gold, or over $9,000,000 in currency, more than their salt actually costs. The duty robs the whole people. It plunders the farmer and the provision-packer. It does not even increase the production of salt, but, as statistics have THE SALT MANUFACTURE. 261 proved, only retards the growth of that industry, and places it at a disadvantage compared with foreign competition. Whom, then, does it benefit ? The salt monopolists. The men who have been able to realize a profit of $4,338,969 in seven years on an invest ment of $160,000. This same duty is driving a more important manufacture to Canada. The Toronto Globe, already quoted, shows that American beef and pork can be packed more cheaply in that country, with foreign or even with American salt, than in this country within the clutches of the monopoly. As a matter of fact, therefore, seventeen millions of pounds of salt passed across this country in bond, im ported and then exported, in 1868, to supply packing-establishments in another land where industry is not so marvellously benefited by legislation. Large packing-establishments have already been re moved to Canada, and American beef and pork, there put up, already are exported from Canada to Liverpool. In 1860 there were 2,350,822 hogs packed at the West ; in 1868- 69, for a popula tion increased from thirty-one to thirty-eight millions, there were packed only 2,781,084 hogs, and the statistics thus far published in dicate that the number for the season 1869- 70 will be still smaller. Thus, to enrich a monopoly, we retard the salt industry, worth $2,500,000 yearly, tax the wool industry, rob the people of ten million dollars, and drive the packing industry, worth over thirty millions yearly, to cross the border. How long shall we do this thing, and call it " protecting American industry ? " 262 DOES PEOTECTION PROTECT? PRICE OF TURK S ISLAND SALT AT NEW YORK. From Report of Secretary of the Treasury , 1863. YEAR. Jan. Feb. March. April. May. June. July. August. Sept. Oct. Nov. Dec. 1825 48 48 49 51 52 53 50 51 50 53 56 58 1826 . . 53 50 50 50 53 50 52 49 48 48 49 49 1827 50 50 54 60 62 62 55 58 58 58 1828 53 50 50 48 48 48 47 46 48 52 53 1829 1830 47 45 45 45 48 40 48 44 51 46 51 48 51 45 47 45 48 45 50 49 56 45 55 1831 1832 45 42 42 45 46 47 50 50 50 54 45 48 48 49 48 52 46 56 53 62 53 51 1833 1834 45 38 41 35 40 36 46 40 42 38 40 44 38 46 38 46 38 50 38 45 42 42 37 1835 32 30 35 37 40 40 35 35 35 35 41 35 1836 84 32 32 35 40 40 38 38 38 37 41 45 1837 40 40 40 43 40 31 33 34 35 40 41 37 1838 35 35 35 35 38 33 42 41 38 45 48 47 1839 35 35 35 41 41 38 37 38 40 36 32 1840 33 36 34 34 34 35 35 1841 30 31 32 30 31 30 29 26 27 28 1842 1843 28 22 25 27 31 si 29 26 24 26 31 30 1844 1845 24 26 26 25 24 27 30 33 35 1846 28 20 45 40 25 29 28 28 29 32 31 32 1847 1848 1849 1850 25 26 21 23 24 25 24 34 27 31 26 21 28 25 29 30 25 25 22 32 23 22 24 30 24 23 27 32 26 24 28 33 26 25 23 28 22 24 21 1851 22 25 22 21 20 1852 20 19 20 21 23 22 21 21 1853 27 26 26 35 30 40 32 31 32 50 49 1854 45 42 45 47 46 45 50 42 53 50 47 1855 1856 50 48 27 30 27 32 29 37 30 40 34* 56 33 45 31 40 26 1857 22 20 24 26 23 23 21 22 22 19 19 1858 16 18 18 17 18 22 19 19 17 18 1859 17 18 20 20 18 17 16 19 20 I860 19 18 17 18 18 19 19 18 20 21 19 1861 1862 17 20 15 30 15 30 19 24 20 24 21 27 19 30 20 31 22 30 24 31 23 36 21 32 1863 31 34 36 37 38 40 42 40 42 44 49 50 CHAPTER XIX. SKILLED LABOR PROTECTS ITSELF. NEITHER space nor accessible statistics permit a detailed exami nation of the history of minor branches of manufacture ; yet there are many which illustrate, with peculiar force, principles already de duced from the history of those branches which are recognized as of chief importance, and which have been most zealously protected. Nor can any reasoning person escape the conclusion that, if high tariffs have been unnecessary to sustain those industries which re quire the largest capital, they have also been unnecessary to sustain others. If high tariffs have increased, in those industries, the cost SKILLED LABOR PROTECTS ITSELF. 263 of production in this country as compared with that in others, and have thus tended to defeat themselves, the same effect must have extended to minor branches of manufacture ; and if high tariffs, in terrupting the natural effect of competition, have checked real prog ress, the minor branches must also have been deprived of a healthy and natural growth, in proportion as they have been interfered with by legislation. It must at least be conceded that if tariff discriminations have really given stimulus to any industry if protection has been real, and not a sham those branches which have received especial aid must have increased more rapidly than those which have been less favored, or which have received no artificial aid whatever. But, if the principles just stated are correct, those industries which have been left to the operation of natural laws, or but little considered in schemes of protection, must have progressed the more surely and rapidly. A comparison is possible. The principal manufactures which protec tion has been designed to stimulate have been those already exam ined, namely, of iron, cotton, wool, paper, glass, and salt. The fol lowing table, prepared from the census returns for 1840, 1850, and 1860, will show whether the increase in these branches of industry has been more rapid than the increase in other branches of manufac ture, which have been in a less degree or not at all objects of pro tective care: TEAK. Six BRANCHES. PROTECTED. UNPROTECTED. Hands. Product. Hands. Product. 1840 ... 152,413 342,748 411,474 $127,759,260 309,904,014 503,257,210 144 per cent. 63 per cent. 303,256 614,311 899,772 $112,076,964 709,202,602 1,381,016,320 533 per cent. 94 per cent. 1850 I860 . . Increase, 1840-50 " 1850-60 The greater completeness of the census in 1850 than in 1840 ex plains the apparent increase in that decade, both in the protected and the unprotected branches. But in both decades the unprotected those branches of manufacture which have been in a less degree or not at all the objects of legislative aid have grown more rapidly than those already considered in detail, which have been most assid uously cared for by legislation. No just comparison between the two decades can be instituted, because the returns of 1840 embrace only the leading branches of manufacture in each class, thus: the 204 DOES PROTECTION PROTECT? only entries for iron in 1840 are cast, rolled, hardware, and ma chinery, which yielded in 1850 less than seventy millions out of a total of one hundred and thirty-six millions produced by the whole iron interest. In like manner, more than half of the industries classed as unprotected were omitted from the account of manufac tures altogether in 1840, so that the increase in that decade is appar ent and not real. But the differences in the returns do not account for the fact that in each decade the product of the six industries chiefly protected increased less rapidly than the product of gthers not so favored. It should also be observed that during these de cades, and all other decades in our history, whether we have had high duties or low, the country has increased more rapidly in manu factures than in population, and, regardless of all changes of tariff or in spite of them, we are steadily progressing toward a healthy and natural diversification of industry. It is argued, by the advocates of protective duties, that such duties are needed because of the higher rate of wages in this than in other countries. To this it is enough to reply, that Continental nations are trying in vain to fence in their industries against British competition, although wages in England are higher than in any of those countries. Mr. Wells, in his report of 1869, presents this fact clearly and forcibly, and from his statistics we find that the wages in Belgium are actually lower, as compared with those of Great Britain, than are those of Great Britain as compared with the United States. Yet England floods Belgium even more than this country with her manufactured goods. It is also argued that the higher rate of interest in this country than in England places us at a disadvantage in manufacturing. Yet tables of the rate of interest in England and France for every month since 1830, published in " Bigelow on the Tariff" (p. 204), show that the rate during by far the greater part of thirty years has been higher in England than in France. It is a well-known fact that the rate is higher in England than in Germany, or in other Continental countries. Yet British manufacturers over power those of all Continental nations, in spite of the higher rate of interest and the higher wages of labor. With what reason, then, can it be claimed that the difference in these respects would be fatal to our manufacturers if unprotected ? The rate of wages measures the value of labor. The rate of in terest measures the value of money. In countries where labor is valuable, because ample opportunities exist for its profitable employ ment, wages are high. In countries where money is valuable, be- SKILLED LABOR PROTECTS ITSELF. 265 cause opportunities for profitable investment are numerous, the rate of interest is high. Other things being equal, then, high wages and high rates of interest in tliis, as compared with other countries, simply prove that labor and capital can be more profitably employed here than in other countries. Now, if labor and capital can be more profitably employed here than elsewhere, so much the less need of " protec tion," or artificial remuneration for either. It must be remembered that wages may be nominally when they are not really high, because the purchasing power of money is temporarily diminished, and that currency may command high rates of interest, simply because the interest itself is to be paid in depreciated currency ; that whenever prices are artificially swollen, whether by depreciation of currency, or by tariffs interfering with free exchange, the high rate of interest or of wages is imaginary rather than real. But, these causes of dis turbance aside, if the rate of wages or interest is higher here than in other countries, it only proves that labor or money can be more profitably employed here than there, and hence stands in the less need of any artificial reward. p3ut facts- test the truth of these theories. Pig-iron, wheat, salt, coal, lumber, are products in which comparatively a small amount of labor and capital is invested. A steam-engine, a gold watch, a sew ing-machine, are products requiring not only the labor of many men, but the most costly and skilled labor, and the employment of large capital. These products this country either exports largely now, or did export before an artificial cost of production interrupted the trade. In 1842, American locomotives were rolling on British railroads. The labor put into those machines was the dearest labor in any country, because it was the best, and because in this country were the best opportunities for its employment. The labor and capital invested in those engines were dearer than labor and capital in Eng land, but we could export these machines requiring for their produc tion large capital, and much labor of the costliest, while we could not export to that country a ton of pig-iron or a bushel of salt, re quiring far less capital, and far less labor, as well as labor of less skill. To-day, in spite of our artificial prices, and in spite of the ex travagant cost of iron, we can send our agricultural and sewing ma chines to Europe, why ? Because the production requires a higher- priced labor than England possesses. Yet these machines are in every part finished products of skilled labor, and they require far more capital to produce them than the ton of pig-iron or the bushel of salt. In spite of the fact that England has cheaper iron, we can 266 DOES PROTECTION PROTECT? send her these machines, but we cannot send her the iron or the salt. Must England " protect " herself against the skilled labor and inven tive genius of this country, just as we protect ourselves against her " pauper labor ? " Certainly, if all " protection " is not a blunder and a failure ! If England pleases to deny herself the use of our machines, as we try in vain to deny ourselves the use of her worsteds and of the salt of the tropics, will anybody imagine that English labor is " protected," because English farmers still have to use the sickle, and English sewing-girls still sing Hood s " Song of the Shirt," while ours do not ? One other illustration must suffice. No other article of general use embodies so much money or so much labor as the watch. If high rates of interest and of wages render our manufacturers inca pable of competing with those of Europe, then, surely, of all manu factured products, the watch must be the very one which we can least afford to produce without aid. If pig-iron needs a duty of 50 per cent., if salt needs a duty of 130 per cent., to secure high wages to American labor and interest to American capital, then the watch, em bodying more money, more labor, and the most costly kind of labor, must require a duty of 1,000 per cent. Yet we are to-day exporting American watches to London and to Paris ! Unaided by any duty, but greatly embarrassed by the almost prohibitory duties on the fine steel springs and some other materials required, the American watch maker nevertheless has contrived, by the help of a labor more intel ligent and skilful, and therefore better paid than that of other coun tries, to import the springs paying the enormous duty, to import other materials, and then to send back the finished American watch to the very country from which the materials were brought, there to be sold at a lower price than any foreign watch of like quality. Will some advocate of protective duties explain how this branch of manufactures has contrived to conquer foreign competition, in spite of the rate of interest and the high wages of labor ? If those branches of industry which require the largest propor tion of labor and capital need no protection, but conquer foreign competition on foreign soil, and with all the advantages against them ; and if unprotected industries thrive better and grow faster, both under low and under high duties, than those which we have weakened by a fruitless and unwise attempt to shelter them from competition, must it not be admitted that " protection " does not protect ? We are now prepared to give definite answer to the question, SHALL OUR LABOR BECOME PAUPER LABOR? 267 Have high duties on imports increased the production of wealth by domestic industry ? We have ascertained that the progress in the production of wealth by agriculture was less in periods of high du ties than in periods of low duties. We have ascertained that the production of wealth, by the six great branches of manufacture which duties have been especially designed to protect, has not in creased under high duties as rapidly as under low duties. We have ascertained that, in attempting to aid these, we inevitably embarrass other branches of manufacture more important both in number of persons employed and in value of product. We have ascertained that other branches of manufacture which have not been protected at all, or have at most received but slight attention, have progressed more rapidly in the production of wealth than those with which legis lation has most interfered. We have ascertained that the production of wealth by manufactures, therefore, has, on the whole, been re tarded by high duties, and most greatly increased under low reve nue tariffs, while industries not protected at all have proved them selves strongest in open competition with those of other countries. It follows that the production of wealth has been retarded by high duties, and has been most accelerated by non-interference with the natural laws of trade and industry. Nor is it difficult now to understand why the growth of agricul ture has been retarded by high duties. Three causes will occur to any who have studied the facts already presented : The demand for agricultural products for export has been checked. The increase of facilities for transportation has been checked. The cost of imple ments and machines, of clothing and furniture, and, finally, of labor, has been artificially increased, while the value of farming products has been reduced. These causes, operating together, though in different degrees in different localities, have placed agriculture at a disadvantage in times of high duties, and have retarded the produc tion of wealth by agricultural labor. CHAPTER XX. SHALL OUR LABOR BECOME PATJPEK LABOR? IP high duties do not benefit a country in its exchanges with other countries, and if they do not increase the production of wealth within the country itself, in what way can they benefit it ? 268 DOES PROTECTION PROTECT? The advocate of protection, driven from point to point by facts, finds in his reply to this question his " last ditch." He answers : " The aggregate production of wealth may not be increased by pro tection, but its distribution is changed. There are better things for a country than the mere accumulation of wealth. If the rich grow rapidly richer, while the poor do not advance in condition, or become poorer, the nation may get rich at the expense of the laboring classes ; it may coin wealth from the sufferings of the poor. This, we maintain, is the fact under free trade, while protection, by en abling the employer to pay higher wages, improves the condition of the laborer, and increases the proportion of the aggregate increase of wealth which falls to his share." And we then listen to eloquent words upon the necessity of securing high wages and comforts to the laboring people in this country, because here they are invested with the responsibilities of freemen. This reasoning has proved more effective than all others to reconcile Americans to the burdens of high tariffs. An argument addressed to popular feeling must be met with facts. Theories, though never so sound, do no good. The political economist may prove, ever so conclusively, that the tariff system only gives greater power to the capitalist ; that the distribution of wealth cannot be changed to the advantage of the laborer by taxing a whole community to secure large profits to a few manufacturers, or to build up an unnatural industry by artificial prices for its prod ucts ; and these reasonings cannot be controverted ; but they do not meet the necessity. The laborer points to his weekly receipts, and replies : " I used to get six dollars a week. Now I get nine. Protection to American industry is a good thing ! " Intelligent men may, indeed, see that the nine dollars in currency is worth not quite seven dollars in specie ; that the actual increase of wages is therefore not more than 16 per cent., and that the increase of the cost of living, reduced to gold prices, has been in much greater ratio. But, to the great body of laborers, it is a very satisfactory fact that they now receive nine dollars where they formerly received only six. In any attempt to meet this reasoning, we are brought face to face with the whole problem of wages and prices one of the most intricate and difficult of all the questions which political economy presents. It is in the last degree intricate, because in all times the wages of different kinds of labor vary considerably, and the wages of the same kind of labor vary in different places at the same time ; while there is a still greater diversity in the mode of living of dif- SHALL OUR LABOR BECOME PAUPER LABOR? 2C9 ferent families in the same place and the same or in different em ployments, or of families in the same employment, but in different localities. The question becomes still more complicated because both wages and prices are affected in different degrees by fluctua tions of the currency. These complications render necessary to any complete investigation of the subject a mass of detailed information, as to wages of different classes of laborers, at different localities, and for a series of years, and as to prices of many articles, at dif ferent periods, and in different localities. Such information it is extremely difficult to obtain. Efforts have recently been made to contrast the condition of laborers in this country at different times, or of laborers in this and other countries, by selecting certain articles and comparing the prices of these articles with the wages of laborers. Thus we are told that the wages of one week s labor in a particular employment will buy in England of felt carpets 133f yards, while in Hartford, Con necticut, near the great carpet manufactory, the higher wages of the laborers in the same employment will buy only 113f yards of the same kind of carpet. A thousand such illustrations are current, and they have truth to give them force. But they scarcely convince the inquirer. Human beings do not live altogether on carpets, on woollen blankets, on Irish poplins, on pig-iron, or on common salt. While the prices of these and other articles may be extrava gantly high, the prices of some other articles of necessity or common use are lower in this country than in England, and the illustration leaves upon the candid mind a sense of incompleteness. Most men know that carpets, blankets, and salt, are greatly enhanced in price by extravagant duties, and the question at once suggests itself whether these articles are not chosen for illustration because they are extravagantly high. The advocate of protection has at hand a very conclusive reply to all comparison of prices and wages in this country and in Europe : " How does it happen that people fly from Europe, where wages are relatively high and prices relatively low, to this country, where the laborer is so badly off?" It does not answer to say that political freedom attracts them. That is indeed true, but all men know that the material condition of immigrants is also improved, and that they come to this country in part because they know that they can improve their condition. Sophistries do not pay in argument. Candid men are repelled by them. It is a sophistry to reason that the high price of blankets and pig-iron renders the laborer, on the whole, worse off in this coun- 19 270 DOES PROTECTION PROTECT? try than in Europe. It is no less a sophistry to reason that the laborer is in better condition here than in Europe because of protec tive tariffs. Labor is generally better paid in this country than in others, because it is more valuable can be employed more profit ably. And this is because in this country cheap and rich land is accessible to every one ; because facilities exist for transportation of products to a market ; because mines the richest in the world, and other resources almost boundless, lie yet undeveloped ; because in many branches manufacturing has not yet attained its natural growth; because the rapid growth of the country constantly opens a new demand for labor of all kinds, and renders speedily remunera tive enterprises which, in an older and more fully-settled country, would wait for years or generations before attaining a solid success. In a word, labor is profitable here because this is a new country, of extraordinary natural resources, in which the political institutions, and the character of the people, stimulate enterprise to the utmost vigor. These causes exist independently of changes of tariff. No tariff causes the ore to burst from the earth in mountains of iron. No tariff has overlaid vast tracts of earth with the rich, black loam of Western bottoms and prairies. No tariff has caused immense for ests of splendid timber to grow, or the broad and navigable streams to flow which bear their products to the sea. We have proved that high tariffs have not accelerated, but have absolutely retarded the development of these natural resources, especially by checking the increase of facilities for transportation, by enhancing the cost of pro duction and consequently of development, and by interrupting the natural demand for our products for export to other countries. of_ the natural development of the country_has^ been retarded, the natural demand for labor mtist have been checked. It follows,^there- fore, as a logical result of the facts already^ established, that in con sequence of high duties the demand for labor inl;his country must, on the whole, have been checked, and its remuneration diminished., although in some branches of industry the demand may have been increased by the protective duties.] This is the true question to be considered. We have no reason to maintain that at any time the general demand for labor here has been less than in Europe, or that at any time the general condition of the laborer has been worse. In some branches of industry it has been true at other times, or may be true now, that the laborer in Europe is actually better paid, considering the purchasing power of wages, than the same class of laborers in this country. But this, if SHALL OUR LABOR BECOME PAUPER LABOR? 271 it were true, would not be conclusive as to the general effect of high duties, for labor of other kinds may have been at those periods in an equal or greater degree benefited. The question is, whether the laborers of this country, in the aggregate, have been benefited, or the contrary, by the protective system. For the discussion of that question, we may suppose that labor in the aggregate has at all times been better paid here than in Europe. The sole question is, whether it has been better paid under one system of duties than under another. The reasoning already offered will to many minds be conclusive. If the development of the country has, on the whole, been retarded in times of high duty, and if the production of wealth has, on the whole, been checked in its natural increase, it follows, as an inevi table consequence, that the demand for labor in the aggregate must have been checked, and that its remuneration, on the whole, must have been diminished. But to the majority of readers one fact ap peals more strongly than a thousand syllogisms. Therefore, let us ascertain facts. At all times the majority of American laborers have been employed in agriculture. According to the census of 1860, out of 7,259,155 persons enumerated as employed in different forms of non-professional labor, 3,375,141 were in agriculture and the slave-laborers, mainly engaged in agriculture, do not appear to have been included. There are also enumerated as " laborers," not otherwise classified, 969,301 ; and, while many of these were en gaged in building railroads, digging canals, or in various occupa tions in cities or towns, no small portion were probably employed, partially or entirely, in agriculture. In trade and transportation there were enumerated as employed 800,575 persons, and in me chanic arts, mining, fisheries, or manufacturing, 2,114,138 persons. But, of the persons enumerated as employed in manufactures and the mechanic arts, there were many women and children. The tables of manufactures show that more than one-fourth of the whole number were females, and a considerable number of the males were children how many the census does not state. In agriculture both women and children are actively engaged in contributing to produc tion of wealth on every farm, but they are not included in the record of occupations. Allowing for this difference, and for the omission of slave-laborers, it may be presumed that at least two-thirds of all our labor was engaged in agriculture. The census of 1840, less minute in its information regarding the mechanic arts, appears to have been somewhat more precise in regard to occupations; for, 272 DOES PROTECTION PROTECT? according to that census, there were employed in agriculture 3,717,756 persons, and in all other employments 1,078,661, divided thus : Manufactures and trades, 791,545 ; mining, 15,203 ; com merce, 117,575 ; ocean navigation, 56,025 ; internal navigation, 33,067; professions, 65,236. Here fully three-quarters appear to have been engaged in agriculture. In 1820 the proportion was still greater; in agriculture 2,070,646 persons, and in commerce, manufactures, and trades, only 421,999. The natural progress in diversification of industry appears in these statistics somewhat greater than it really has been, since it is probable that the records of 1820 and 1840 were less complete than those of 1860 in enumera tion of the persons employed in non-agricultural industry. But it is apparent that more than two-thirds of our labor has at all times been employed in cultivation of the earth. If the wages of labor employed in agriculture have at any time been decreased, as compared with prices of products by farmers pur chased and consumed, fully two-thirds of all American laborers have been injured, while less than one-third can have been benefited. In that case, to maintain the aggregate remuneration of American labor, the few must have gained per capita more than twice as much as the many lost per capita. Of labor employed in agriculture, a large proportion obtains its only remuneration through the sale ojf farm products. The very large majority of farming laborers either own or hire the land which they cultivate, or are the sons of farmers, and their labor is paid precisely in proportion to the price of farm products sold, as com pared with the price of articles bought for use and consumption. The farmer and his sons have no other wages, can in no way get any other remuneration for their labor, than by the excess of the price of farm products sold, over the price of articles of food, clothing, and convenience, and implements and machines purchased and consumed. The rise in the value of land, by reason of the labor expended in fencing and reducing it to cultivation, or by reason of the settlement of the country, and the increased facilities for trans portation, though a most important part of the remuneration of the farmer, may better be considered as the profit on his investment of capital, for every farmer who owns or rents land is at once capital ist and laborer. These profits of his investment can be realized only when he chooses to sell or leave the farm. As a laborer, his condi tion must be measured by the comforts which he can afford to enjoy, and the money which he can save or apply to objects of desire. And SHALL OUR LABOR BECOME PAUPER LABOR? 273 these depend upon the price which he receives for farm products, as compared with the price which he pays for articles purchased. The wages of agricultural laborers hired by the year, month, or day, we shall find, will depend closely, though not absolutely, upon the same conditions. On one side of the equation, the conditions affect -both alike ; both have to purchase clothing and comforts, and the purchasing power of wages depends upon the prices of clothes, hats, boots, and other articles of use. To both, board is ordinarily the same, and, if high prices of articles of food prevent their use, the laborer equally with the farmer is forced to deny himself. The wages paid in money vary, generally, with the prices obtained for agricultural products, but not in every fluctuation nor to the full ex tent. But, since cheap land is always to be had, high prices for agri cultural products, operating as an inducement to every laborer to seek land for himself, unless balanced by increase of wages, will soon diminish the supply of laborers and thus compel higher wages. In general, therefore, the money paid for wages to hired laborers will vary with the price of agricultural products as compared with the cost of articles which the farmer has to buy, and the purchasing power of the money also varies with the prices of articles of neces sity or consumption, so that the hired laborer does well when the farmer does well, and his condition deteriorates when that of the farmer deteriorates. But the number of persons so employed is not large compared with that of owners or lessees of land and their sons. In 1860 it was less than one-fourth. We may, therefore, safely assume that the wages of farming labor, that is, of two-thirds of all American labor, depend upon the prices of agricultural prod ucts as compared with the prices of articles of necessity or comfort. We have already traced year by year the prices of some most im portant articles of agricultural production, namely, cotton, wool, and flour, and in each case have found that statistics establish the rule that, in time of high duties, the price has been lower than in time of low duties. The price of flour, it need not be said, depends upon and indicates the price of wheat. And these three products, wheat, wool, and cotton, constitute in value about one-third of our entire agricultural product. But, since this point is of vital importance, and the advocate of protective duties rests every thing upon the oft-repeated assertion that high tariffs will, in some way, secure to the farmer a better market and higher prices for his products, a few stubborn facts may be presented. 274 DOES PROTECTION PROTECT? The tables which follow are prepared from the tables of monthly quotations of prices, given in the official report of the Secretary of the Treasury for 1863. Only the average of the monthly quotations in each year is given, but, as these quotations cover the highest and lowest prices, and the averages for each month in the year, the com parison is as perfect as can be made. The average prices are also given for six periods, first, the years covered by the protective tariff of 1824 and the higher protective tariff of 1828 ; second, the ten years covered by the compromise non-protective tariff, 1833- 42 inclusive ; third, the protective tariff of 1843- 46 ; fourth, the four years which followed under non-protection ; fifth, the succeeding four years ; and, finally, the remaining years of that decade of non-protection. Simi lar figures for recent years are not given, first, because no official record presents the data ; and, second, because it may be supposed that fluctuations of gold have unfavorably affected the price of agri cultural products since 1860. It is a well-known fact that the prices of nearly all products of the farm are now lower than they were in 1860, except those of the Southern States, but the fact is commonly ascribed to other causes than to the effect of a tariff upon the pro ducing and consuming power of the community. But, if it shall ap pear that articles of farm production, whether those which are largely exported, or those which are consumed almost wholly at home, have commanded a higher average price in every period of low duties than under the preceding or following protective tariff, and that this same rule holds good in every case for thirty-five years, in spite of changes of currency, short crops or large crops, or other causes tending to affect the price, then, indeed, it must be admitted, even by the most obstinate advocate of protective theories, that high tariffs do not benefit the farmer, but in some way deprive him of a fair price for his products. Let the facts testify : PROTECTION 1825- 32. YEAR. Wheat. Cotton. Corn. Rye. OstB. Butter. Cheese. 1825 92 18V 55 54 31% 15 7v 1826 94 11 76) 70) 47/ 15V 8 1827 99 9% 61 68 40^ 17 7> 1828 122 10 52} 53X 29} 15^ 6 1829 124) 9 56J 66 35} 13X 6 1830 107 10 6 65 28M 13^ 6V 1831 118J 9 69# 78 37X 15 6 1832 126 9> 68 83 45^ 15/ 6 Average uo# 10M 62 67 37 15* 6M SHALL OUR LABOR BECOME PAUPER LABOR? COMPROMISE TARIFF. 275 YEAR. Wheat Cotton. Corn. Rye. Oats. Butter. Cheese. 1833 ... 119V 12^ 73> 80 40.V. 16 7 1834 100 12^ 66 66 35 14 14V T/1 1835 1836 121* 178 16% 16# 8* 91 104 8* 1% 19.V 3* 1837 177 12 104V H2> 52.V 18 OJf 1838 192 10% 84 104V 39V 20 8 1839 124^ 13 86 97 47 19 9^ 1840 .. 104.V. 8% 57 59.V 34 lT/ 7 1841 118V 10 62> 64 44 12 5V 1842 114 8 59.V 65X 36.V. 12 JX Average 135 12 77X 84^ 43 16# 7% PROTECTION-1843-M6. YEAR. Wheat. Cotton. Corn. Rye. Oats. Butter. Cheese. 1843... 98% 6^ 55 62 29 8V 4M 1844 97.V 6V 50 671^ 31V 10 4s/ 1845 104 6K 55 68^ 38 13V 6% 1846.. 108) 71^ 68 741^ 39^ 13 6% Averaere . . . 102 6^" 57 68 34^ 115^ 53^ NON-PROTECTION. FIRST PERIOD. YEAR. Wheat Cotton. Corn. Rye. Oats. Butter. Cheese. 1847 136V 10K 85^ 99 49 16 7 1848 116^ 6 63X 73V 41V 16 6V 1849 124 8 63 60 39 15 6 1850 127>^ 12 62.V 65 43 15 6K Average 126 9 68X 74X 43 15^ 6X SECOND PERIOD. YEAR. Wheat. Coiton. Corn. Rye. Oats. Butter. Cheese. 1851 . . 107.V. 10 71 73 43V 14V 5V 0/4. 1852 nox 9 62 81 X 43 19 1853 139 10V 67) 92 47>^ 18 8% 1854 219 9 84^ 119^ 54 1# 9X Average 144 9>r WJtf 91X 47 17% ?X THIRD PERIOD. YEAR. Wheat Cotton. Corn. Rye. Oats. Butter. Cheese. 1855 243V 9K 99 133V 59V 22 9Jtf 1857 175 167^ M* 81 96 94 43 53 21V 9V 1858 132 % 13 72 45 7 1859 . 86V 48 19 8V I860 150 10V 74 82V 42 10 x Average 169 11^ 81^ 94 48% 19# 8^ 276 DOES PROTECTION PROTECT? RECAPITULATION. Cotton. Corn. Rye. Data. Cheese. 1833- 42 1843- 46 1847- 50 I850- 54 1855- 60.... 135tf 102 126 144 10M 12 62 81* 11* During eight years of protection, 1825- 32, the average price of wheat ranged from 92 cents to 126 cents, and the average for the period was $1.10|-. But the ten years of non-protection which fol lowed gave an average price of $1.35 ; and, although the crop had increased in quantity 73^ per cent., and the three years of " hard times " were years of low prices, the farmer even then received more for his wheat than the average price during the whole protective period preceding. The average price of cotton during eight years of protection was lOf cents; but, during ten years of non-protection, though the crop had been enormously increased, from less than one million bales in 1832, to over two million three hundred thousand in 1842, the average price was 12 cents. The average price of corn during the protective period was 62 cents ; but, during the non-pro tective period, it was 77J- cents. But these, it may be said, are crops whose price is governed by the export demand. The price of rye, oats, butter, and cheese, certainly was not so governed; the quantity of these articles exported was then too small to affect the price at all. But the price of rye under protection was 67 cents, and under non-protection 84 cents ; the price of oats, under protection, was 37 cents, and under non-protection, 43 cents; the price of but ter was 15J- cents under protection, and 16J cents under non-protec tion ; and the price of cheese was 6} cents under protection, and 7f cents under non-protection. The export theory does not account for these facts. If protection creates a home market, how does it hap pen that eight years of protection reduced the price of cheese from 7-J to 6 cents, while ten years of non-protection raised it to 7 cents ? If non-protection destroys manufactures, and drives people into agri culture for a living, how does it happen that ten years of non-protec tion raised the average price of every one of these products, and caused crops of wheat three-fourths larger than were raised in 1830 to be consumed at higher prices ? Does it not follow that there were more consumers, or a greater ability to purchase and consume, even in the hard time of 1840- 42, than in the whole protective period? But it may be supposed that the inflation of the currency in 1836 SHALL OUR LABOR BECOME PAUPER LABOR? 277 and 1837 accounts for these facts. Let it be observed, then, that the average price of every article except rye, during the whole protective tariff which followed, was not only lower than the average price for the period of low duties, but was lower than the price during the years of extreme contraction of the currency and "hard times," 1840 - 42! Wheat was worth 118 in 1841, and 114 in 1842; but, dur ing the protective tariff, it never rose for either year above 108^, and averaged 102. Cotton was worth 10 cents in 1841, and 8 cents in 1842 ; but it averaged, under protection, only 6J. Corn was worth 59-J to 62 J, and it averaged under protection only 57. Rye aver aged lower, under protection, than it did during the previous period, but not lower than during the years of " hard times," and it is the only exception. Cheese, which the home market, if one had been created by the tariff, would surely have consumed at a fair price, never rose as high in any year as it was in 1842, the last year of low duties. Still more conclusive is the proof, when it is observed how the price of every article bounded upward when the burden upon agri culture was removed. During the four years of non-protection which followed, wheat averaged $1.26, or 24 cents higher than it had under protection ; cotton 9 cents, or 3J cents higher ; corn 68^- cents, or 11^ cents higher ; rye 74-J cents, or 6-J cents higher ; oats 43 cents, or 8-J cents higher ; butter 15J cents, or 4 cents higher ; and cheese 6J cents, or f of a cent higher. Was this change caused by the famine in Europe and the export demand ? Then let it be observed that the next four years gave a still further increase of price, on every article those which we consumed at home as well as those which we exported. Surely no demonstration can be more con vincing. Of all the articles named, not one ever fell again for a single year lower than the average price for the whole protective tariff of 1842- 46, and only one, cheese, fell in a single year as low as that average. Facts have already been given showing the enormous increase in quantity of agricultural crops during the decade of uninterrupted non-interference, and it is interesting to remember those facts in connection with this record of prices. An increase of nearly three millions of bales, over 100 per cent, in the cotton crop, had lowered the price only 1 cent as compared with 1850, and the price in 1860 was higher than the average of the years 1849- 51. An increase of seventy-three million bushels of wheat had occurred, but a crop three-quarters larger was consumed at a price 23 cents higher by a people more prosperous, because they had been let alone in their 278 DOES PROTECTION PROTECT? industry. A crop of corn two hundred and forty million bushels larger was consumed at a price 11 J cents higher. A crop of rye 50 per cent, larger was consumed at a price 17-J cents higher. A crop of oats twenty-six million bushels larger was consumed at a price only one cent lower. In 1850, the farmers made 313,247,014 pounds of butter, worth in New York 15 cents a pound, but in 1860 they made 459,681,372 pounds, worth in New York 16-j- cents a pound. In 1850 they made one hundred and five million pounds of cheese, worth, at 6J cents a pound, $6,560,000; and in 1860 they made one hundred and three million pounds, worth, at 10 cents a pound, $10,366,392. Need these comparisons be pursued further to convince every doubter that low duties enable the farmer to get high prices for his products, while high duties force him to sell at lower rates ? The fact being proved, it is not necessary to propose any theory in ex planation of it. To variation in the demand for export it cannot be wholly or mainly due, because the same effect extends to crops pro duced for a home market. Can there be more than one rational ex planation ? Is it not plain that, under high duties, the consumers of agricultural products are as a whole unable to consume largely at high prices, while, under non-protective duties, all trades and arts and manufactures so thrive that a larger body of more prosperous con sumers is enabled to consume larger crops at prices more profitable to the farmer ? Do not the facts force this conclusion upon every reasoning mind ? But, if so, high tariffs are not only robbery to the farmer, but in jury to the manufacturer and the mechanic. No other conclusion is possible. It is at least established that the farmer receives lower prices for his products under the system miscalled protective, than under low duties and non-interference. To that extent, therefore, two-thirds of American laborers have been injured by high duties, unless in times of high duties the prices of articles used and consumed by the farmer have been in equal measure reduced. The prices of pig and bar iron, of woollen and cotton goods, of glass and salt, have been traced, and we have seen that these have been higher in every period of high duties than in the following periods of low duties. Upon the price of iron depends in a measure the cost of stoves and utensils, of farm implements, of wagons, blacksmith s-work, horseshoes, of all machinery, of tools used in every trade, and of all transportation. The cost of clothing and household goods is affected by the price of woollen and cotton SHALL OUR LABOR BECOME PAUPER LABOR? 279 fabrics, and the cost of all mechanical work is also affected by the price which workmen have to pay for clothing and for tools. In like manner every other increase of prices which a tariff on imported articles may cause is passed on from importer to retail dealer, from dealer to consumer, from consumer to those for whom he performs any service, and thus all are diffused through the whole community, falling at last, in large proportion, upon the farmers, who are two- thirds of the productive laborers of the country. If a tariff increases the cost of pig-iron from $20 to $40 a ton, which for two million tons consumed would be a tax of forty millions yearly, that tax ulti mately goes back to the producers of wealth, and the farmers, being two-thirds of the purchasers, pay twenty-six millions of the forty. Does any one ask in what form ? A little in every stove and iron utensil for the household, in every chain, crowbar, shovel, plough, fork, hoe, or other implement ; a little in every wagon, or job of re pairs ; a little in every work which a carpenter, blacksmith, or other mechanic, may do for him ; a little in every pound of nails used in house or barn, and a great deal in increased cost of transporting to him all articles used, or from him to market all products of his farm. Sooner or later, it all comes back to the producers, and, of all taxes which the producers have to pay, the farmers pay two-thirds. Here the advocate of high tariffs will reply that the cost of stoves and nails, implements and machines, is not affected by the duty on such articles, which is in part true. That is not the tax which the farmer pays. He pays the tax by which the iron is enhanced in price. If the iron out of which his stoves were made had not cost the foun- dery more than $20 a ton, he would have had his stove for less money than he now pays. " But, some articles made of iron cost less now than they did years ago, when iron was cheaper ! " Very true, and they ought to cost still less. Such improvements in the manufacture have been effected, that the machine can now be made out of iron, at $40, at less cost than it could once out of iron at $20. But the cost of iron, nevertheless, increases the cost of the machine ; for, if with the new inventions it can now be made for any given price, it could be made for less if the iron had cost but half as much. The favorite device of protectionists is to point to articles which have absolutely fallen in price, and ascribe that fall to the tariff. They know that there is a constant tendency to lower prices for all manufactured products, as increased skill and new inventions dimin ish the actual cost of production. That decrease should be steady, 280 DOES PROTECTION PROTECT? and, when no arbitrary laws interfere to check it, is sure. It is part of the blessings which science, art, and progressing civilization, be stow upon the human race, and we are all entitled to a share in it. The farmer has a right to his share as much as the mechanic ; the laborer of this country has a right to his share as well as the laborer of England. Whenever arbitrary laws in this country arrest the downward progress of the price of any article, while in other coun tries the natural decrease continues, the tax is just the same as if the cost of the article had been increased to the same amount. For ten years ending in 1832, the price of glass in this country, being arrested by protective duties, stood unchanged, while the price in England and on the Continent was falling. If the difference in 1832 was fifty cents a box and it proved to be nearly as much then the tariff in that year taxed the consumer just fifty cents a box, as truly as if it had raised the price, while in other countries it remained sta tionary. The farmer, who wants glass for his new house, has a right to his share of the benefits which science has conferred by the cheaper manufacture of glass. But the tariff steps in, arrests the price, robs him of fifty cents a box, and the advocate of protection then says : " You have not been taxed at all, for glass is no higher now than it was twenty years ago ! " Yet the farmer was robbed nevertheless. He had a right to buy for less. So when prices have decreased, we are told that this is the effect of the tariff. The introduction of the power-loom and other improve ments, with the low price of cotton, reduced the cost of shirtings from twenty to seven cents a yard, and the protectionist pointed to the fact in 1845, as proof that the high tariff was a good thing. He forgot to mention that the same goods had sold in 1842, before the tariff was imposed, for 6-J cents, and that, instead of rising, they should have declined still further, had no law interfered. Other goods were being steadily reduced in cost under the low duties, and yet, as we have seen, the manufacture of wool and cotton, iron, and other products, was increasing. Just then the tariff arrested the natural decline, and the prices of those goods either increased, re mained unchanged, or declined but little until its removal.* The instant competition was readmitted, it was seen that prices in other countries had been still further reduced. The manufacturers cried " Fraud ! " and there was fraud ! They had defrauded the consumer of * Facts, showing in detail the effects of the tariff of 1842 upon prices, are given in the next chapter. SHALL OUR LABOR BECOME PAUPER LABOR? 281 that natural decrease of price, and yet had pointed to some slight re ductions here as proof that the tariff had been a blessing. These considerations show how easy it is for the advocate of high tariffs to find facts which, disingenuously or dishonestly used, seem to sustain him in the theory that " a high tariff does not usually en hance the cost of manufactured products." If they have declined in price, he claims a victory, and conceals the fact that in other coun tries they have declined still more, and that the difference is a tax caused by the tariff. If they have remained stationary in price, he declares that there has been no tax ; and, as before, conceals the dif ference in price between other countries and this. But when the raw materials of industry are increased in price, then no sophistry can evade the conclusion that the manufactured products have been artificially made more costly either more costly absolutely, as compared with the former price ; or more costly relatively, as compared with prices in other countries ; or, in a third case, of which some examples may be seen, more costly than they naturally would have been, although both absolutely and relatively decreased in price. As an example, we may take the sewing-ma chine. It was an American invention, and has been so skilfully manufactured here that it can be profitably exported from this to other countries where iron costs much less. It has decreased in price, sharp competition between makers pushing all to the lowest rates. And yet the tariff makes every sewing-machine more costly than it ought to be, though cheaper now than it was, and cheaper both now and then than in other countries. For, if the iron of which it is made cost less, and if the steel cost less, the machines could be furnished for less money, and competition would push the manufacturers to do so. Have not the sewing-girls of this country a right to every advantage over foreign labor which the skill and inventive genius of their own countrymen can give them ? Yet, they are robbed of part of that advantage, by a tariff which forces them to pay more for the machine which earns their bread ! The poor wife, whose " best friend " helps her through the toil of caring for a family, is robbed by the tariff when she pays five dollars, or one dollar, or one cent, more for that blessing than it should nat urally have cost. Who pockets the money ? Not the government ! Remember the figures one million goes to the Treasury, and at least twenty millions to the pockets of those who own iron-furnaces, and clear 100 per cent, profit in seven months ! This illustration will make it clear how the farmer is also taxed 282 DOES PROTECTION PROTECT? in the increased cost of every implement, utensil, and machine, he uses, even though the machine may in some cases cost less to-day than it did ten years ago, the manufacture having been improved, and less now than in any other country. The farmer, also, has a right to his full share of the blessing which the skill and genius of his countrymen bestow. He has a right to the machine, not only lower than it was formerly, not only lower than it is in Europe, but lower than it is here and now ! For the iron of which it is made is artificially increased in cost, and the machine therefore costs more than it naturally would. But the manufactured articles which are cheaper to-day than they were in 1860, are few in number. In one or the other of the three ways described, all are enhanced in cost, but the great ma jority not only cost more now than they do in other countries, but cost more now than they did here in 1860. What, then, is the truth ? The farmer receives less for his products than he did under low duties. The farmer pays more for manufactured products used and con sumed, for clothing, buildings, implements, machines, and trans portation, than he would have to pay if no duties interfered. Therefore the farmer is injured at both ends of the exchange ; his products sell for less, and the purchasing power of the price paid is less than it should be. He is plundered when he sells, and plun dered when he buys. Two-thirds of American laborers, therefore, are robbed by the high-tariff system, both in their wages and in the cost of their living ; a part of their earnings are taken, and they are forced to spend more for the necessaries and comforts which they buy. If two-thirds of American laborers have been injured, what has been the result to the remaining third ? It may appear that if the cost of agricultural products has been less, in times of high tariffs, this, though a disadvantage to the farm er, has been a benefit to the mechanic, manufacturer, miner, and other laborers ; while, if the price of any manufactured products has been increased, this, though a disadvantage to the farmer, has been a benefit to the laborer by whom those articles were produced, since it has enabled his employer to pay him more liberally. To some extent these positions are both true. Reduced cost of agricultural products does benefit other classes in the community in some degree. Increased price of manufactured prpducts does some times enable the manufacturer to pay better wages. Just as far as these things are true, the protective system does benefit other la- SHALL OUR LABOR BECOME PAUPER LABOR? 283 borers at the expense of the farmer plunders two-thirds of American labor for the benefit of some part of one-third. But in the end this benefit is usually more than balanced, and the one-third, in the aggregate, remain worse off than if no attempt had been made to aid them. This occurs in several ways. Either by reduced consumption or increased cost of manufactured products, the benefit derived from increased price of products may be neutral ized to the manufacturer. By increased cost of preparation for use, of transportation from producer to consumer, or increased friction and waste in exchanges, the benefit of cheap agricultural products may be absorbed before they reach the consumer. When the farmer finds himself pinched, and restricts his purchases, the manufacturer finds a surplus left on his hands, and must either sustain a loss, or reduce production by working short time. If he loses, wages cannot be increased ; if work is suspended, wages are in effect reduced. But the manufacturing laborer must also suffer from any increase in cost of manufactured products of necessary use. Not more than one-half of the expense of living, even to operatives in manufactur ing establishments, is for articles of food, and of these not all are products of this country. After extended investigation, Commis sioner Wells stated that the average expenditure of families in manu facturing towns in 1868, for articles of food, was, for parents and one child, $6.39 ; parents and two children, $8.15. In the same tables it appears that the other expenses were from nine to eleven dollars. In larger families a larger proportion is required for food, but in such fam ilies older children often assist by their work or earnings. Of the ex penses of unmarried workmen the proportion for food is still less. Taking all workmen employed in manufactures together, it is prob able, therefore, that the cost of food forms about one-third of their expenses, and it is certainly less than half. But of the expense for food, a part is for articles not produced in this country. In the esti mate by Mr. Wells, of the $6.39 allowed as the average weekly ex penditure for food, there are 73 cents for sugar and molasses, 26 cents for tea, 20 cents for coffee, and 9 cents for spices and salt, and none of these articles are agricultural products of this country, except the sugar and molasses, of which the quantity produced here is insignificant compared with the quantity consumed. Not less than $1.28 is spent for these articles, not produced by our own agri culture, out of $6.39 expended for food. More than two-thirds of the entire cost of living, and, taking the whole working-class together, Drobably three-fourths of the whole, is for articles other than the 284 DOES PROTECTION PROTECT? products of our farms. If agricultural products have been made cheaper to the consumer and it does not yet appear that they have he has, nevertheless, been worse off on the whole, wages remain ing the same, if other articles of necessity, such as clothing and household goods, have been rendered in like proportion more costly. If rents have also been increased as much in proportion as the cost of food has decreased, the balance is decidedly against the laborer. With these facts in mind, to assist us in judging how far a gen eral increase in the cost of manufactured products, or in the cost of agricultural products, has affected the cost of living in the aggre gate, we may now search for facts to show in what manner wages on the one hand, or the cost of living on the other, have been affected by different forms of the tariff. CHAPTER XXI. WAGES AND PRICES IN 1845. OF documents accessible to the writer, the earliest reliable data throwing light upon the wages and expenses of laborers of different classes, are supplied by the investigation of the Secretary of the Treasury in 1845. By that officer, inquiries were addressed to a great number of persons in all parts of the country, and, though a large pro portion of the manufacturers declined to answer his most important questions, enough replied, of manufacturers, merchants, farmers, and others, to give valuable information. This, it will be remembered, was at the close of the third year of the protective tariff of 1842, and the inquiries invited information as to the condition, not only at that time and during the three years under that tariff, but during the ten years of low duties which had preceded. The replies given conflict on many points, but as to certain essential facts there is very gen eral agreement. First, as to wages of agricultural labor, it appears that there had been no material change for years in the Eastern States, until the de cade 1832- 42, during which wages rose a little on an average, per haps, from $9 to $10 a month and board. In some States, as Con necticut, the price rose to $14. But at the West it reached $17 a month. There is no room for dispute as to the effect of the tariff of 1842. From every quarter came detailed statements of the decreased price of agricultural products since the protective system was adopted, and the strongest advocates of that system referred to the fact as an WAGES AND PRICES IN 1845. 285 evidence in their favor. Even in the New-England States, New York, and Pennsylvania, where growth of manufactures had supplied that " home market " upon which the farmers now are asked to rely, the same general and marked decrease in the price of agricultural products was stated by one party and admitted by the other. In Maine, wheat had fallen from $1 to 90 cents, corn from 75 to 70 cents, wool from 42 to 31 cents, potatoes from 30 to 25 cents ; in New Hamp shire, wool from 45 to 35 cents ; in Massachusetts, wool from 43 to 35 cents in Berkshire and Hampshire counties " its price is so seriously depressed as to induce a disposal or slaughter of very many sheep this fall ; " in Rhode Island, where surely a " home market " existed if anywhere, hay had fallen from $15 a ton to $12, corn from 92 to 70 cents, rye from $1 to 87 cents, potatoes from 33 to 30 cents, onions from 37 to 25 cents ; beef from 6 to 4 cents a pound, butter from 12 to 10 cents, and cheese from 8 to 6 cents. In New York, Henry S. Randall, the well-known wool-grower, gave several tables showing that " wool averaged higher under the compromise tariff than under that enacted in 1842," and was higher even in the years of greatest prostration and contraction just before the tariff than since its pas sage ; that wheat from 1832 to 1842 averaged $1.33|, and from 1842 to 1845 only 92 cents ; that com had fallen from 60 cents in 1840 to 50 cents in 1845 ; barley from 45 to 40 ; buckwheat from 38 to 31 ; peas from 50 to 40 ; pork from $4.50 to $3.50 per cwt. ; beef from $6 to $4.50; and wages of agricultural labor from $12 a month to $10. These records are conclusive for the Eastern States, but the West ern farmers had suffered still more severely. In Ohio, wheat had sold before 1842 on the lake-shore at $1 a bushel, and since had fallen to 70 cents, while pig-iron had advanced at the same point from $18 to $25 a ton. At Massillon, before the tariff, wheat averaged $1, and, after it, had fallen to 65 cents. In Indiana, hogs, the principal prod uct, had ranged from $4 to $7 per 100 pounds, but since the tariff had fallen $2 to $3. In Illinois, wheat ranged before the tariff from 75 cents to $1 a bushel, and corn from 25 to 40 cents. In 1844 wheat was 50 cents, and in 1845, 40 cents, and corn had fallen to 12^ cents a bushel. No wonder that wages had fallen from $12 and $15 per month to $7 and even to $5 per month ! Further quotations are needless ; no fact can be more indisputa bly proved than this, that the prices of agricultural products, and the wages of agricultural labor, were reduced, under the protective tariff of 1842, from 20 to 50 per cent. Did the prices of articles which farmers have to buy decrease in like proportion ? 20 286 DOES PROTECTION PROTECT? Among the questions asked by the Secretary were these : of the manufacturer, " At what prices have the manufactures been sold since the establishment ? " and of others, " Whether the average prices of what are called the protected articles have been as low in proportion to the average prices of the staples for the last three years as in the preceding ten ? " Of the manufacturers who sent replies to any of the questions, very few stated the prices at which their goods had been sold in different years. On the other hand, almost every per son of other employment stated that the cost of manufactured arti cles had been generally greater since the tariff was adopted than before, and proceeded to explain the fact according to his individual opinions : if opposed to the tariff, ascribing the increased cost to the duties ; and, if in favor of it, either ascribing the fact to other causes, or arguing that temporary high prices, " if they should lead to a large increase of the manufacture, sufficient, within a reasonable time, to supply the wants of the country at a price not much above the cost of the same articles if brought from foreign countries free of duty, would in the long-run be beneficial." What the effect has actually been upon the manufacture, we have seen. We are now seeking to ascertain whether prices have been increased by high duties, and the concurrent testimony of advocates and opponents in 1845 was, that the prices of manufactured articles had at that time been generally increased. Let it be here well understood that the duty did not in all cases, and does not always, enhance the price to the full amount of the duty. No fallacy has been more conclusively refuted by facts than this. On the contrary, we shall see that many articles were actually lower in price after the duty was imposed than before, because the materials were cheaper, or the manufacture had been improved ; that others remained unchanged in price, though the materials were cheaper ; and that, while very many were en hanced in price, in many cases the increase was not equal to the duty imposed. But it is maintained, and the facts prove, that there was an increase in the price of manufactured articles generally, and that, when there was no absolute increase, the cost of the manufac tured article had in nearly every case been reduced less than the cost of materials and of manufacturing, so that the consumer paid for the article more than its natural price. Of the manufacturers who did reply, a few were frank enough to give precise statements, but these were generally manufacturers of coarse cottons, who stated that they needed no protection, that the duty did not benefit them, that they were exporting of their prod- WAGES AND PRICES IN 1845. 287 ucts to other countries, and that a reduction of price had been effected by improvements which had reduced the cost of manufac ture from 33 cents a pound in 1828 to 14 cents a pound in 1840, and to 11 cents a pound in 1845, and, by a decrease in the cost of the raw material from 12,84 cents in 1830, to 7 cents in 1845. In consequence, the price of prints had been reduced in 1841 to 5.85 cents, and in 1842 shirtings No. 30 sold at 6.75 cents, printings at 4.75 cents, and sheetings No. 14 at 5.50 cents. But since that time prices had slightly risen, though the cost of manufacture had been reduced from 14^- cents a pound to 11 cents a pound, and the cost of the raw material from about 11 to 7 cents a pound. In 1845 the prices were, for shirtings No. 30, 7 cents ; for printings No. 30, 6 cents ; for sheetings No. 14, 6 cents. These are the figures given by the Great Falls Manufacturing Company. The Hamilton and Appleton Companies of Lowell stated that scarcely any foreign goods of similar descriptions to those of their make were imported, and " some would not be in any state of duty, as they appear to be made cheaper here than in any other part of the world ; the others are made nearly as cheap here as anywhere." Though neither these nor any other manufacturers reported prices at which their products sold as plainly as did the company above mentioned, we can under stand that the markets were the same for all, and that the same causes improvement of manufacture and reduced cost of cotton had affected the cost of producing other classes of cotton goods. Other evidence, however, is accessible, to prove that cotton goods were generally increased in price under this tariff. The Treasury report of 1849, a very elaborate work in the interest of the protective system, gives detailed statements of the prices of many articles which had been reduced in price from 1835 to 1849 by the progress of the home manufacture. The argument which these selected facts were designed to sustain was, that the cost of the ar ticles named had been reduced in consequence of the tariff of 1842, it being quietly taken for granted that the domestic manufacture would not have existed, or would have made no progress, had not that tariff been enacted ! At this day not a word need be said in refutation of an assumption so contrary to the history of our in dustries, and it is amazing that any Secretary of the Treasury ever resorted to such a sophistry in a labored report. It is plain, too, that the facts presented in the report were carefully selected for the purpose, for out of thousands of articles of domestic make, not one was given the history of which conflicted with the Secretary s 288 DOES PROTECTION PROTECT? peculiar theory, and only those were selected which had most steadily declined in price. Taken by itself, therefore, the report of 1849 was only calculated to create a false impression ; it kept out of sight the great multitude of articles which had been most enhanced in price, and gave elaborate records of those only which had been reduced in price with enough of regularity to sustain the reasoning of the Secretary. But the facts which this report presented, taken in connection with others which it suppressed, are of great value. Its statistics of the prices of certain cotton goods from 1835 to 1849 show most conclusively that the progress of the manufacture from 1835 to 1843 caused a very rapid reduction in the cost of every article ; that the tariff of 1842 simply arrested that reduction, and in a great majority of cases caused higher prices in 1846, the last year of that tariff, than in 1842, the last year preceding its adoption, although the raw cotton cost less in 1846 than in 1842. This will appear from the accompanying table, in which those statistics of the report of 1849 are condensed which show the prices of cotton goods of certain qualities from 1835 to 1849. This table shows a very great reduction in the price of all goods from 1835 to 1842 inclusive, under the non-protective duties, and in 1843, the raw material having fallen nearly two cents a pound, prices of goods fell still lower. But in 1844 every article quoted, except one, increased again, many of them 30 to 50 per cent., in a single year ; in 1845, notwithstanding a fall of cotton to the lowest price then ever reached, the price of goods remained about the same ; and in 1846, cotton selling for 2 cents less than its price in 1841, and for a lower price than it commanded in 1842, the prices of goods were with very few exceptions higher than in 1842. Of sixty-six arti cles and qualities quoted in the table, only nine were slightly lower in price in 1846 than in 1842, and only five remained unchanged, while forty-seven had increased in price. Not only was the natural reduction of price arrested that reduction caused by progress in manufacture which had enabled the makers to sell sheetings for 6 cents, shirtings for 6 cents, drillings for 7-J- cents, duck for 12-J-, calicoes for 5.70, and cotton yarn for 19 cents not only was the con sumer deprived of all benefit from a reduction in the price of cotton from 8.1 cents in 1842 to 5.9 cents in 1845, and 7.8 cents in 1846, but there was an actual increase of price, of sheetings to 6f cents ; of shirtings to 6J cents, of drillings to 7f cents, of duck to 13|- cents, of calicoes to 5.83, and of cotton yarn to 19f cents. The cot ton bought in 1841 at 10 cents a pound, and worked up by the WAGES AND PRICES IN 1845. 289 x x ". XX XX* .. XXXX -V \\ \ \-* NrfNrfVSrfVV V5 Sv N^ ^tf ^0 SwNF7 fc- t- 2&oo~-o3SK$es : : : : : 3S:2P : : o . . : P . : :8*S:2SS38S83S3S" ! 3 ::::::: X 5R X X si 35 XX 290 DOES PROTECTION PROTECT? manufacturer at a cost of 11 or 12 cents a pound, he sold in 1842 at small profits in goods at the prices quoted, but the cotton bought in 1845 at 6 cents, if worked up at the same cost, he sold, in 1846, at a profit of more than 4 cents a pound if his goods were unchanged in price since 1842 a profit of more than 60 per cent, in sheetings and shirtings. The consumer was taxed just as truly as if the price in 1846 had been 60 per cent, higher than in 1842. That all consumers were thus taxed appears still more conclu sively from the great reduction in prices from 1847 to 1849, on cali coes from 5.83 to 3.95 cents ; on shirtings, from 9 and 8J to 6 j- and 6 cents ; on sheetings, from 7J to 6J, and from 8 cents to 6.90 cents ; on duck, 2 cents a yard, and on yarn, 2f cents a pound. The price of cotton was higher in 1849 than in 1845, and in 1848 than in 1846, and yet the consumer gained in price just as he had lost under the pro tective tariff. It is only necessary to remember that the consump tion per capita suddenly increased from 8.54 under protection to 12.75 under low duties in 1849. The manufacturer, content with smaller profits, found a larger market, and was able to extend his business fully 50 per cent, in three years. Under the protective tariff, therefore, the consumer was taxed fully 60 per cent, on his cotton goods. The grower received less for his cotton. The manufacture was extended much less rapidly in four years under protection than in three years after the protection had been removed. And it will presently appear that the wages of oper atives were lower in 1845 than they had been in 1839, or than they were in 1849. Who, then, was benefited ? The capitalist, and no body else. In 1845 all companies reported profits, ranging from 10 to 30 per cent., and some reported profits even during the worst years, 1841 and 1842 the York Company, in Maine, reporting a profit in 1840 of 14f per cent.; in 1841, of 13| per cent.; in 1842, of 5 per cent. ; in 1843, of 9 per cent. ; and in 1844, of 20J per cent. We have not yet traced the effect of the tariff to the consumer. A statement of the prices actually paid at Charleston, South Caro lina, for goods there most used, enables us to realize better how the tariff operated. Common calicoes, costing the manufacturer 4-J cents a yard, were selling to consumers at 9 to 16 cents. The transporters and middle-men were evidently transferring their share of all tHe burdens to the consumers. Cheap cambrics were selling at 18 to 20 cents ; fine and checked cambrics, from 25 to 30 cents ; white dim ity, from 15 to 22 ; coarse counterpanes, for $1 to $4 each ; medium quality, from $2 to $4 ; blue and white checks, for 10 to 12J cents ; WAGES AND PRICES IN 1845. 291 plain negro cloth, for 40 to 55 cents ; and cotton thread, not on spools, for 40 to 75 cents. If the cotton manufacture, which needed no protection, at least for coarser qualities, because the goods "are manufactured here cheaper than anywhere else in the world " if this manufacture was thus affected by the high duties, so that the price of its products ac tually increased, though the cost of those products was reduced, and if the consumer was then forced to pay in some localities several times that increased price, what shall we expect of other manufac tures less favorably situated ? The price of leather was not especially increased, as the manufac turers state, because we "can manufacture for less than any other nation." Yet, while the price of some qualities of boots and shoes and other manufactures of leather was reduced, the price of others was increased, not so much because the shoemaker needed protec tion, as because, having control of the market, and having a tax to pay, he chose to make somebody else pay it. The duty on hides was 5 per cent., and on leather 6 and 8 cents per pound. The man ufacture of tobacco was also independent of duties, but the prices, though lower than the imported articles, allowed large profits. Lumber and its manufactures had somewhat increased in price in States near the Canada border ; in Maine, Washington County, pine sold for $9.50 ; spruce, for $6.50 ; and laths, for 85 cents. Plaster, like almost every thing else, was cheaper than it was during the inflation of 1836, but still sold for $1 for ground, and $1.62| to $1.75 for calcined, while the product from Canada could still be imported to some extent in spite of the duty, so much lower were prices there. White lead (ground in oil), with a duty of four cents a pound, had risen to $7 per cwt., or about 20 per cent., and a manufacturer re ports that a much lower duty would be ample. Soap and candles were not affected, " as the raw materials are lower here than in Eu rope." Printing-paper, which had sold for 12 J cents a pound in the highest inflation of 1837, was only reduced to 10 cents. It may be easily inferred that the consumer paid an unnatural price, and the manufacturer realized an unnatural profit, although the paper was still sold within the price at which dutiable paper could be im ported. Salt, which sold for 22 cents a bushel in New York in 1842, cost 35 cents in 1845, and 45 cents early in 1846, and in the interior was still higher. The wool manufacture presented a curious phenomenon. We have seen that wool at this time was very cheap so low was the 292 DOES PROTECTION PROTECT? price, indeed, that actual exportation to Europe proved that the Eng lish manufacturer was at a disadvantage of 5 per cent, in the cost of material. Nevertheless, imports of almost every kind ,of woollen goods increased, to the value of over one million in the aggregate, while the wool was so low that great numbers of sheep were being slaughtered. The broadcloth experiment, sustained, as Mr. Randall showed, by a supply of cheap wool from South America, not only made some progress, but encouraged the growing of fine wool to some extent, yet the importation of foreign cloths was increased, which shows that the price was much higher here than elsewhere. Other goods, of a quality likely to be imported, were increased in price, while goods never imported, if decreased in price at all, were reduced less than the cost of the material. Thus, goods which sold for 68 cents in 1839, when wool cost 40 cents a pound, were reduced in 1844 to 53 cents, when wool cost only 27 cents at that factory. But flannels increased in price more than 30 per cent, in 1844, and satinets 25 per cent. ; low-priced cassimeres, which cost in England Is. 4d. to 2s., were sold here in cities on the coast for from 50 to 90 cents ; cheap overcoat pilot-cloth, costing Is. 4d. to Is. 6d. in England, sold here for 50 to 65 cents. This occurred while the material was actu ally cheaper by 5 per cent, to our manufacturers than to the English. It was not pretended by any manufacturer that the price of goods had been generally reduced, but nearly every one acknowledged that improvements in machinery and greater skill had caused large prof its. It is very plain, then, that these improvements had not resulted in benefit to the consumers ; that the low price of his wool did not secure the farmer correspondingly cheaper cloths, and that, with an actual advantage over the English in cost of material, our manufac turers sold at rates so high as to encourage importations actually larger than those of 1840, when the wool cost much more here, and when some of the improvements in machinery had not been made. Nor can it be said that the natural increase of consumption was wholly unchecked by the high prices ; for, in reports from the farm ing States, it is recorded that a great many people had been obliged to discontinue the use of woollen cloths, other than those made on the farm. And we shall see that the manufacturers, with all their admitted profits, allowed no increase of wages, but were paying men 87J cents a day, women from 40 to 50 cents, and children from 20 to 37J cents. While agriculture was depressed, and wages were reduced from $17 to "even $5 a month" in Illinois, the labor thus forced to seek employment from manufactures gained no increase of wages from protection, though large profits were realized. WAGES AND PRICES IN 1845. 293 ; * s eo<Nc<<NG*Ticor-i S 3 8 8 g 2 : S g g g g wooo *}<eoeoco**<NCOT-c :8 : : CO-&S SO CO CO * anas a a 2 :- : -3 : : : 3 1. : N M | a i .. fi 1 i 5lM=J s . 294 DOES PROTECTION PROTECT? But was the consumer taxed ? Once more the statistics of the report of 1849, although giving only selected facts, and those the most favorable that could be ascertained, help to a correct decision. The preceding table presents prices of woollen goods, as stated in that report, for the years 1835 to 1849, and the prices of merino, common and pulled wool, at New York, as recorded in the Treasury report of 1863. Again, there is apparent a very considerable reduc tion of prices from 1835 to 1843, caused in part by the low price of wool in 1842 and 1843, but in part by the improvements in manufac ture. Broadcloth had been reduced in cost about one dollar a yard; cassimere, fifty cents ; flannels, 18 cents, or 50 per cent. ; linseys, 8 cents, nearly 30 per cent. ; carpets from 95 cents to 65 cents a yard. Blankets had also been reduced in cost since 1838 about $1.25 a pair. The low prices of 1843 were followed, after the tariff began to have effect, by an increase of price in almost every article. In 1846, with wool actually lower than in 1842, and far lower than in 1841, when the wool was purchased for goods made and sold in 1842, the prices of the goods selected by the Secretary show scarcely any de crease in price, while some of them were higher. A cloth requiring 2-J pounds of wool to the yard, made from merino wool bought in 1841 at the average price for that year in New York, would have cost for raw material alone 94-J cents, but the same raw material bought in 1845 would have cost 68^ cents to the yard ; and from this cause alone the price of such cloth could have been reduced 26 cents a yard, but no quality of cloth was reduced in price in that proportion from 1842 to 1846, while the average price of the Lowell black cas- simeres was precisely the same, the price of satinets was 4 cents higher, the price of Northampton broadcloths was 25 cents higher, linseys of Lowell were 3 or 4 cents lower, and carpets were some 2-J cents lower, and some as high ; flannels were also about the same in price, and blankets were 50 and 75 cents per pair higher in 1846 than in 1842, and 25 to 50 cents higher in that year, or in 1845, than in 1841 or 1840. In view of the fact that those prices were doubt less reported to the Secretary for publication which would best sus tain the protective policy, it is impossible to doubt that consumers of woollen goods were generally taxed, not only by depriving them of the advantage in the price of wool, but in the majority of cases by an actual increase in the price of their goods. Not only was the wool-grower deprived of a part of the value of his wool, but he was obliged to pay more for his cloth. The consumer was taxed. Even the hands employed in woollen manufacture gained nothing in wages, WAGES AND PRICES IN 1845. 295 but had to pay more of their wages for clothing. For whom was the whole community thus taxed ? For the manufacturers, whose profits were so large that in 1845 nearly all refused to report them. All iron-makers admitted that the cost of making pig-iron had decreased since 1840, and was still decreasing. It was shown that the actual cost of anthracite pig-iron was, in some cases, not over 815 a ton. Yet the price of pig-iron had increased from $25 a ton in New York, and $20 a ton at some of the furnaces, to $37 to $39 in New York, and from $30 to $35 at the furnaces, for cash. With such enormous increase of profits, we shall see the manufacturer had not granted any corresponding increase of wages ; at many furnaces the workmen were paid an average of 87-J cents. While the raw material was thus being reduced in cost and increased in price, is it strange that the true manufacturers of iron complained ? A maker of castings reported that his product had increased in price because of the increased cost of iron, and that he needed a reduction of the duty on pig. Another reported that he sold castings at $70 in 1844, when pig-iron cost $30, and then made a profit of 10 per cent, only ; and another stated that his castings sold in 1845 for $80 a ton ; that in 1842 they cost only $50 a ton; and during the inflation of 1836 sold for $100. A manufacturer of stoves reported no increase in wages, but an increase in the cost of his products. A maker of mechanics tools and agricultural implements speaks of " the high price we are enabled to obtain," and adds : " Without the protection at present afforded by the government, we could not successfully compete with the foreign manufacturer." This is a confession, first, that the con sumers were taxed, both farmers and mechanics, and that heavily ; second, that the price of pig-iron had brought this very manufacture, which in colonial times had taught England how to make scythes and shovels, into such a predicament that duties were necessary to keep out foreign implements. In Cincinnati, rolled bar cost $55 a ton in 1842, and $70 a ton in 1845, and the effect on manufacturers who used that material can be easily inferred. Nevertheless, such were the improvements in manufacture, not only during the existence of this tariff, but before and after it, that many articles, the manu facture of which needed no protection, and in which the raw material consumed caused but a small proportion of the cost, were reduced in price during the tariff of 1842, as they had been before its adop tion, and were after its repeal. These instances were paraded with great spirit by the advocates of the tariff as proofs that it had decreased the cost of manufactured articles. Thus in the report of 296 DOES PROTECTION PROTECT? 1849, different tables give the accompanying statement of the prices of certain articles of iron, but it is to be observed that nearly all of them are products in which the raw material is not an element of chief cost, and nearly all are articles which were successfully made in this country at an early day. The fact that of these selected articles all except four had been reduced in price prior to the adoption of the tariff, while every one, without exception, was greatly reduced in price after the removal of the tariff, and nearly all far more within the three years 1847-1849, inclusive, than they had been within the four years 1843-1846, inclu sive, effectually disposes of the idea that any reduction of the price which took place under the operation of the tariff was attributable to its influence. On the contrary, eight of these articles were sold at the same price in 1842 or 1843 as in 1846, the last year of the tariff, and nine were sold at a higher price in 1846 than in 1842 or 1843, while nine were slightly lower in price. Only three articles in the list were reduced in price as much from 1843 to 1846 as from 1846 to 1849. These very statistics, then, prepared in support of the tariff, to prove that domestic competition had reduced the price of some articles, show very forcibly that the natural decline in cost by reason of improvements was, in almost every instance, retarded, and, in most instances, arrested, by the protective duties, while of these articles about one-third were rendered more costly by the tariff. Taken in connection with the fact that these are but a few articles selected from a great number of products of iron, and they are gen erally articles in which the raw material used is comparatively a minor element of cost, the table will satisfy the mind that the great majority of products of iron were actually raised in price by the tariff; that, as to almost all, the natural reduction of price was arrested; and that there were very few indeed which were reduced in price as rapidly during the operation of the tariff as before its adoption, or after its repeal. But the consumer was taxed upon all articles of which iron is a material. If the improvements in manu facture enabled the maker to reduce the price of hoes from $3.25 in 1842 to $2.37 in 1846, it will not be denied that he could have reduced the price to $2.25, as he did in 1849, if the iron had cost less money. If nails made of iron costing $40 a ton could be sold in 1845 for 4f cents a pound, the same quality could undoubtedly have been sold for 4 cents, as they were in 1849, if the iron had not been made costly. Thus every consumer was really taxed, if not by the duty on nails or hoes, or other finished products needing no protection, then by the duty on pig-iron. WAGES AXD PRICES IX 1845. 297 s I < ^ I a 5^ ^ gas sss^s ^^ i s ssss 10 ^ 8 13 : iS ""sis* 8 gg g is^ 10 ^ ^^53 sc ic oo eootov .STH .8 . .8 i il I Lils! IS : |!j o-<lsaxTH ^ S ^ So^^sl &J-5SSsSS<o6 298 DOES PROTECTION PROTECT? It will not be overlooked that the prices of cotton and wool cards, $4 and $2.50 per dozen in 1843, were not reduced until the repeal of the tariff, but were then quickly and materially cheapened. In this and other methods the duty on iron simply embarrassed other manu facturers, by making it impossible for them to cut down the cost of production as rapidly as manufacturers elsewhere were enabled to do. It does not seem possible to doubt that by this tariff agriculture was doubly retarded, by reduction of the price of agricultural products and the wages of agricultural labor, and by a general increase in the cost of manufactured articles. While many articles were not affected in price, implements, clothing, and a large proportion of articles used by the farmer, were rendered more costly at the place of production or in wholesale markets, while neither internal navigation nor rail road facilities increased at the natural rate, and the cost of transpor tation was enhanced. Agricultural labor, then three-fourths of all American industry, if the census of 1840 was reliable, was injured by this tariff, both in its receipts and its expenditures. Injury to agriculture involves injury to the mechanic, the trades man, the merchant, the professional man ; for all these classes depend upon the farmers, the majority of the population, for support. Nor can it be supposed that the transporting interest was helped by duties which made iron cost from $35 to $40 a ton, and increased the cost of hemp, timber, and tools. There is no evidence known to the writer that the tariff of 1842 resulted in any increase of wages or profits to these classes or either of them, while every one can understand that, when a maker of mechanics tools boasted of the high price which he was enabled to charge for them, the mechanic must have regarded the matter quite differently. That hatters needed no aid is plain from the fact that in 1840, under extreme low duties, there were imported of " hats, leather, wool, and fur," only $7,000 worth, while there were exported $103,000 worth, and in 1846 the value of fur hats alone imported was over $12,000. In 1841 we imported of boots and shoes of all kinds only $17,166, and exported $100,725, while in 1846 we imported $37,572. In 1840- 42, inclusive, the three years of lowest duties preceding the protective tariff, there were imported only $28,000 of ready-made clothing, an average of $9,000 a year. The tailors surely did not need protection against a competition amounting to less than 10 cents a year per tailor ! But the protec tive tariff so enhanced the cost of cloth that, though the tailors were also " protected " by duties of 33 to 50 per cent, on clothing, people began to import ready-made clothing instead of cloth, and in 1845 WAGES AND PRICES IN 1845. 299 there was imported about $200,000 worth an increase of more than 2,000 per cent, in four years. It is not only plain that the tailors were not benefited it is plain that the cost of clothing to consumers was increased generally from 33 to 50 per cent, in the cost of material alone. This tax, like that involved in the cost of iron, bears upon all classes, and to the farmers and mechanics, and persons employed in non-protected manufactures, at least, it was in no wise compensated. There remain less than one-twentieth of the whole force of labor ers the number then employed in manufactures supposed to be aided by protection. If these were greatly benefited, if their wages were increased tenfold, did it profit the country to inflict injury upon three- fourths of its laborers, the farmers, and to embarrass or tax all others, simply to benefit one-twentieth ? Is this " protecting American indus try?" But was the one-twentieth of American laborers benefited ? Upon them, as upon all others, fell the burden of increased cost of clothing and of many other manufactured articles. Were their wages in creased ? Upon this point the proof is singularly conclusive. The returns from manufacturers who answered the inquiries of the Secretary must be accepted as at least as favorable to the protective tariff as the facts would permit. If the manufacturers strained the truth at all, they certainly did not do so to the disadvantage of the system intended to secure them large profits. Those who did not re ply at all would certainly have done so if the facts had enabled them to make a more favorable showing for the system than others could make. The vital importance of the inquiry in regard to wages was perfectly understood by every one ; and if any manufacturers were paying wages above the average of those in the same business, we may be sure that they would have been the most prompt to state the fact. Accepting the statements actually made as a fair presentation of the best phase of the facts, we must conclude that the average of all wages in any employment was certainly not higher than the average paid by those who made returns. In the cotton manufacture, over twenty establishments in New England made returns, and the wages paid by these averaged, for men, $1.17 a day ; for women, 50 cents, and for boys and children, 32 cents. The wages of men were ordinarily $1 a day, or $10 a month with board, but skilled mechanics and experienced hands were some times paid $1.50 or even $2. The wages of women ranged from 75 cents a day, the highest, to 30 cents, the lowest ; and of children, from 50 cents to 19 cents. But the vital question is, whether these 300 DOES PROTECTION PROTECT? wages, however small, were an increase upon those paid in earlier years. On this point there can be no doubt. Not a single one of these establishments claimed to have increased the wages paid ; but, while some were paying " the same as for twenty years past," others admitted that they reduced wages in 1842. The Saco establishment, indeed, stated that it paid two per cent, higher wages in 1844 than it did in 1834 ; but did not give any figures for 1836 to 1842, when other establishments increased or decreased. The Hamilton mill, at Lowell, which gave more detailed information than any other, said : " The number of persons employed is as follows : Men 245, average wages $1.03 per day; women 669, average wages 53 cents per day ; boys 34, average wages 44 cents per day. ... In 1842, when there were hardly any dividends, and when this company made none at all, there was a reduction of wages, but it was small in propor tion." Of all these companies, five worked ten hours a day, two worked eleven hours, five worked eleven and a half hours, ten worked twelve hours, one worked fourteen, and the rest did not state the number. In New York, fourteen cotton-mills reported, not one of them paying a higher average to men than $1.25, and the average of all was, men $1.15, women 42 cents, children 30 cents, all boarding themselves, and all the mills working twelve hours. Four of these state that wages have not materially varied ; but three, all paying the highest wages reported, frankly ascribe their prosperity in part to " diminished wages paid ; " a " small percentage of reduction," or a "decline of labor." It may, therefore, be held established, from the statement of the manufacturers themselves, that the tariff of 1842, which caused some increase in the price of cotton goods, notwithstanding a decrease in cost of cotton, did not cause any improvement in wages, but that, on the contrary, less wages were paid in the majority of establish ments in 1845 under protection than in 1840 under " free trade." Yet the profits of the manufacturers, according to their own state ments, had greatly increased, many admitting that they made 25 per cent., and the great majority declining to state how much they did realize. It is quite noteworthy that the Lowell company, look ing back over years of extreme low duties and financial prostration, refers to one year, 1842, as "the year in which few dividends were made, and in which this company did not make any." From this single remark we can judge whether the whole period of low duties was absolutely fatal ! It must be admitted, then, that in the cotton business high duties WAGES AND PRICES IN 1845. 301 had not increased, if indeed they had not really decreased wages, to the year 1845. The iron interest was not more liberal to labor. Of seventeen establishments in New England, New York, and Pennsylvania, not one reported paying to ordinary men more than $1, while two paid only $5 a week, and one 87-J cents a day. To skilled mechanics higher wages were paid in one establishment as high as $1.75, and one other reported as high as $2.50. The other establishments, except two in Alabama, which reported high wages, paid in no case higher than $2, and the average of them was $5 to $6 a week for ordinary hands. The average for the whole country, including all classes, was about $1.12J. But the labor paid over $1 a day was in the machine-shops or founderies. The pig-iron establishments, as far as reported, paid an average of only 87-J cents a day, and they made larger profits than others. Of all the iron establishments of all kinds, not one claimed to have granted an increase of wages, while some said that wages had not materially varied, and one acknowl edged that there had been a reduction. Returns from plaster, lumber, cordage, tobacco, flour, paper, and pottery establishments, all gave the rate of wages as $1 a day, and not one claimed that there had been any increase. Of leather estab lishments one was paying $18 a month ; of ashes and wines one each was paying $15 a month. In a soap establishment wages had been decreased, and were on an average only 69 cents a day, though the profits were 15 per cent. In one salt establishment the average sum paid was only $8 a month, though the duty on foreign salt was over 100 per cent. Finally, we take the woollen-mills, of which twelve reported in the Eastern and Middle States. Of these, several were paying as high as $1 a day to men, others 90 cents, others 88 cents, while two paid only an average of 75 cents to men, one only 65, and one paid only 55^- cents on the average to men and women. The average for all the establishments reported was 89 cents for men, and 30 cents for boys. One establishment paid $3.50 a week to women, four others 50 cents per day, some 40 cents, and three as low as 37^ cents. The average was about 45 cents. Again, we have to observe that not one of these establishments claimed that there was any increase of wages ; but, while several said that wages had not increased were " the same as ever " one, paying 75 cents a day to men, stated that wages had decreased. Another, paying the highest wages reported over one dollar to men, and $3.50 a week to women, claimed to be 21 302 DOES PROTECTION PROTECT? paying "the same as ever." If this, the highest return in 1845, was the average in former years, the decrease of wages in the woollen manufacture must have been considerable. But all the mills report profits, due to improved machinery and the low price of wool. While the farmer was injured, then, nobody was benefited except the capi talist, whose profits the tariff increased. We have been thus minute in examining these returns, because they furnish conclusive proofs as to the working of the only protec tive tariff since the development of manufactures by modern methods, and prior to the war. The results now ascertained cannot be ascribed to any fluctuation of the currency or of the banking credits, for the amount of currency in circulation during the latter part of 1845, and through 1846 and 1847, was almost precisely the same as the amount in circulation in 1840 and 1841, prior to the resumption of the banks, while the line of deposits was somewhat larger, January, 1845, than in either of the years 1840 and 1841. Neither can it be said that the condition of labor in this year was exceptionally unfavorable, for the country had recovered from the prostration wilich followed the return to the specie basis, and was in that condition which all advo cates of protection have been accustomed to mention as "marvel lously prosperous." The records of this year, as it happens, are a fairer test of the effect of the tariff, than those of the following year, the last of its operation; for, in 1846, a demand for breadstuff s from England began to revive agriculture, and the prospect of a change of the tariff gave hope to all who were straitened by its operation. What, then, is the result? The evidence is conclusive that the tariff of 1842 did depress the agricultural interest, reduce the price of its products and the wages of agricultural labor, and at the same time increase the cost of many articles of necessity to the farmer, or of universal use, particularly clothing, salt, glass, and the products of iron. The evidence is conclusive that the wages of labor employed in manufactures were not increased, but in many cases had been re duced since 1840, particularly in those very branches of manufacture which were most favored by duties, and which, owing to cheap ma terials and great improvements in method or machinery, were making the largest profits. It is conclusively proved, then, that American labor in the aggre gate received less wages under the tariff of high duties in 1845, than it had under the tariff of low duties in 1840, and that the cost of many necessities and comforts of general use was increased. PROTECTION AND NON-PROTECTION CONTRASTED. 303 To whom was this tariff a benefit ? Not to the fanner it robbed him. Not to the operative it did not increase his wages, and did increase his expenses. It was a benefit to those capitalists who, under it, were able to charge people higher prices for goods than the cost of production warranted, and who were blessed with large prof its. To enrich them, the labor of the whole country was taxed. CHAPTER XXII. PROTECTION AND NON-PROTECTION CONTRASTED. THE conclusions arrived at in regard to the effect of the tariff of 1842 are singularly confirmed by statistics given in one of the most elaborate works in defence of the system " The Tariff Question " by Hon. E, B. Bigelow. In that work, for the purpose of proving that laborers in England are paid less than laborers here, he gives statistics of wages paid by manufacturing establishments at Lowell, in the years 1839, 1849, and 1859. As these statistics are derived from the records of the companies, and have the authority of a gen tleman of high reputation, we may accept them unhesitatingly, and advocates of the tariff system will be sure that one of its most sincere defenders has not distorted the record to its disadvantage. Mr. Bigelow seeks to prove that labor is dearer here than else where, and therefore needs protection. This error has already been exposed. Labor is dearer here because it can be more profitably employed, and therefore does not need protection. The contrast be tween the wages paid in England and in Belgium or France con clusively proves that the higher-priced labor is not the less effective, but the more effective; does not give more costly products, but cheaper products. The world over, it is the "pauper labor" that needs protection most. Mr. Bigelow himself has contributed largely to the demonstration of this truth. To him we owe many inventions more ingenious and wonderful than any of like object in use in other countries, and the weaving of the Brussels carpet, especially, has been revolutionized by the loom of his invention. One who has contributed so much to make American labor more effective, should surely have considered the fact that its inventive talent and its superior intelligence are a better protection against the world than any that laws can give. 304 DOES PROTECTION PROTECT? Though useless for the purpose for which they were collected, the statistics given by Mr. Bigelow happen to be of great use in another quarter. It boots nothing to prove that our laborers get better wages than those of England ; we all know the fact, and they would surely need protection if they did not. But it is of vital importance to ascertain whether our labor is better paid under the protective system than under a non-protective tariff. That is the question of questions, and Mr. Bigelow helps to settle it. The years selected by him happen to be years just preceding the tariff of 1842, just after its close, and just preceding the protective period of 1861 - 69. Neither of them illustrates by itself the working of the pro tective system. But, contrasted with the facts already given, by which the record of 1845 is quite clearly presented, they are of value. As to the manufacture of textile fabrics, the record of Lowell will be accepted as the best test, for that manufacture is there most exten sive and successful. Fortunately, two of the most important estab lishments at Lowell made full and detailed returns in 1845, which we can compare with the record of wages in 1839, before the tariff, in 1849, after the tariff, and in 1859, after thirteen years of low duties. In 1845, the Lowell companies stated that they were paying to men, on an average, $1.03 and $1.05 a day the work being twelve hours a day. In 1839, as we learn from Mr. Bigelow s statistics, the Lowell companies were paying to fifty-two different classes of male hands, from overseer down to the common laborer, in all branches of the cotton manufacture, $411.30 a week, or an average of $7.91 a week, and $1.32 a day. The hours of labor were the same. The conclusion already arrived at, that there was a reduction of wages from 1840 to 1845, is therefore confirmed. The tariff was changed by an act passed in August, 1846. If any increase of wages had occurred prior to the change, no record of it is known to the writer* But in 1849, three years after the change of tariff, what were the wages ? The same Lowell com panies were paying, to men in fifty-two different classes of labor in the cotton manufacture, an aggregate of $407.07, or an average of $7.82 a week, and $1.30 a day. This is not quite as high as was paid in 1839, but it is higher than the companies reported in 1845. And in 1845, when the average of wages was $1.05 for men, the work was for twelve hours a day ; in 1849, when the average of wages was $1.30 a day for men, the work was for only eleven hours a day. Under the non-protective tariff, therefore, the men were actually paid PROTECTION AND NON-PROTECTION CONTRASTED. 305 higher wages for one hour daily less work than they were paid in 1845 under the protective system. In the woollen manufacture, wages were also lower in 1845 than in 1839. As we have seen, some of the mills were paying only 75 cents a day for men, and 40 cents for women, in 1845, and only one reported paying " from $5 to $8 a week for men, and from $3.50 to 85 for women " the highest wages then reported by any company in the country. The average was 89 cents for men, and 45 cents for women. Now, in 1839, according to Mr. Bigelow s statistics, the average wages of men of all classes employed in the woollen manu facture was $5.63 a week, or about 94 cents a day. There had therefore been some reduction of wages from 1839 to 1845. After the high duties were removed, in 1849, the same statistics show that the average w T ages paid for eleven hours work was $5.02 a week to men ; which, considering the time, is about the same as was paid in 1845. As we shall see, the rate subsequently increased under the non-protective system. Meanwhile, both woollen and cotton goods were much cheaper in 1849 than in 1845, although the wages paid were not reduced. With the aid of Mr. Bigelow s statistics, we now proceed to compare the wages in 1845, under protection, and in 1849, shortly after its removal, with those paid in 1859, near the close of the longest period of low duties. Beginning with cotton, it appears that the hands who were paid for fifty-two different classes of labor in 1849 an aggregate of $407.07 weekly, were paid in 1859 an aggregate of $446.85 weekly. In 1849 the average was $7.82 a week for eleven hours work. In 1859 it was $8.59 for eleven hours work. The fact is thus established that, during the long period of non-protective duties, the laborers were not " ground down " to pov erty, as it has been asserted must be the case under that system, but actually gained in their wages in the aggregate nearly forty dollars for fifty-two persons, and in the average, each 77 cents a week. Nor does the woollen manufacture show a different result. The same classes which were paid in 1849 an average of $5.02 a week for eleven hours work, were paid in 1859 an average of $5.43 for eleven hours work. Mr. Bigelow also gives the wages for 1849 and 1859 in the manufacture of ingrain carpets, in which, in 1849, there was paid, to twenty-seven persons of the different classes of labor, $232.23 a week, and to the same persons in 1859 there was paid $246.42 a week. In 1849 the average was $8.60 a week, and in 1859 it was $9.12. In brief, the result of this comparison of records, the data 306 DOES PROTECTION PROTECT? being furnished in every case by the manufacturers themselves, is as follows : WAGES AT LOWELL. "Free Trade." "Protection." "Free Trade." 1889. 1845. 1849. 1859. $411.30 7.91 1.32 12 61.96 5.63 .94 12 $V.30 1.05 12 5.34 .89 11 to 12 $407.07 7.82 1.30 11 55.22 5.02 .84 11 $446.85 8.59 1.43 11 59.70 5.43 .90J 11 Average weekly .... " daily. . Hours of work Woollen 11 classes Average weekly " daily Hours of work In 1845, the hours in the different establishments were not the same, and the wages of women are not given by Mr. Bigelow by the day or week, but by the job. They show the same increase from 1849 to 1859, but cannot be satisfactorily compared with the wages reported by the day or week in 1845. If these statistics are reliable and they are all taken from the statements of manufacturers themselves we have conclusively estab lished : 1. A reduction of wages from 1839 to 1845, in cotton and woollen manufactures both, the hours of work remaining in nearly all cases the same. 2. An increase of wages from 1845 to 1849 from "protection " to "free trade" in the cotton manufacture, of $1.52, in the aver age weekly wages, the hours of work being reduced from twelve to eleven. In the woollen manufacture, the wages were changed from 89 cents, average for eleven and twelve hours, to 84 cents, average for eleven hours. 3. An increase of wages from 1849 to 1859 during ten years of " free trade " the hours of work remaining the same, in the cotton manufacture, from $7.82, weekly average, to $8.59, weekly average ; in the manufacture of woollen goods, from $5.02 weekly, to $5.43 weekly ; and in the manufacture of carpets, from $8.60 to $9.12. The increase of wages from 1845 to 1860 was not confined to the two branches of manufacture just mentioned. By comparing the statistics gathered by the Secretary of the Treasury in 1845 with the records of wages in 1860, prepared by Mr. Wells, we find that the same increase extended to other kinds of manufacture, and particu- PROTECTION AND NON-PROTECTION CONTRASTED. 307 larly to the iron manufacture in all its branches. In the manufacture of edge tools in 1845, the wages were from $4 to $12 a week, and averaged about 87.50 ; but, in 1860, the wages of all the different classes of workmen averaged $10.70 a week. In 1845, the wages of men employed in hardware establishments averaged $1.25 a day. But in 1860, according to Mr. Wells s statistics, the wages paid to thirty- three different classes of laborers were, in the aggregate, $307.61 a week, the females and boys being omitted, and the average was $9.32 weekly, or $1.55 daily. In founderies and furnaces, in 1845, the wages paid to men ranged from 87 J cents to $1.75 a day, and the average paid by all the establishments was not over $1.22 a day. But in 1860 the average was $9.07 weekly, or $1.51 a day. In the manufacture of leather in 1845, the wages were one dollar a day, or $18 a month with board, but in 1860 the wages were $8 a week. In the paper-mills, in 1845, one dollar a day was the average ; but in 1860 the average for all classes of males was $7.38 weekly, or $1.23 daily. It is placed beyond dispute that the wages of men in manufac turing establishments of all the leading branches increased quite perceptibly from 1845, under protection, to 1860, the close of the period of " free trade." The wages of agricultural labor increased still more largely. In 1845, we have seen, farming wages had fallen to $10 a month, at the highest, and as low as $5 a month in Illinois. Nowhere was there reported for that year any higher rate than $10, and the average for the free States was probably less than $9. But in 1859, according to tables published in HunVs Merchant^ Magazine, the wages paid in eight localities in New England averaged $15 a month ; in ten localities in New York, $13.30 ; in Pennsylvania and New Jersey, $12.50 and $13 ; in Ohio, $13.50 ; in Illinois, from $13 to $18 ; and in Iowa, from $15 upward. The average for the free States must have been about $14, a gain of more than 50 per cent, since American industry had ceased to be mis- " protected." But, since the large majority of farmers own or rent the farms on which they work, it is much more important to determine whether the prices of agricultural products had improved. The price of wheat and of flour, of wool and of cotton, as we have already seen, was somewhat higher during the period of low duties than it had been under protection. Taking New- York wholesale prices, the lowest quoted, for the 1st of August, we have the following comparison : 308 DOES PROTECTION PROTECT? LOWEST PRICES, AUGUST 1ST, AT NEW YOKK. 1845. 1860. Flour per bbl. $4 31 $5 05 Rye " " 287 350 Corn-meal " " 231 340 Wheat per bush. 90 * 1 40 Rye " " 68 81 Oats " " 42 40 Corn " " 51 64 Lard per Ib. 7 12 Butter " 15-16 10-19 Cheese " "5 7 Rice per cwt. 3 50 4 50 Seeds, clover per bush. 6 8 Sugar, New Orleans per Ib. 5 6 TaUow " " 7 10 Tobacco, Kentucky " " 2-7 3-12 Wool, common " " 24-26 34-38 " merino " " 32-34 48-52 " puUed, No. 1 " " 28-30 28-30 Yet these figures by no means show the full value of the period of low duties to the farmer. These are New- York wholesale prices, but the prices actually paid to the farmer are in the main governed by New- York prices and the cost of transportation from the farm to New York, or some other market. During the years 1845- 60, greater reduction was made in the cost of transportation than during all other years of our whole history. Twenty-four thousand miles of railroad were built, for low duties on foreign iron enabled us to build roads with unexampled rapidity. Also, 3,512 steamboats were built, for iron was cheap. Vast progress was made in the system of canal transportation. By these great changes, the cost of getting his produce to a market was so greatly reduced that the farmer actually received much larger prices, in proportion to the wholesale rates in New York, than he received in 1845. It is impossible to estimate the value of these changes to the agricultural interest in the increased prices received for products, and it is equally impos sible to estimate their effect in the increased value of farms. It would not be rash to say that the entire value of farming land in the Northern States was increased fully 50 per cent, by the railroads alone that were built during this period of low duties. It only remains, regarding the period of low duties, to notice that the cost of many manufactured products was reduced. Receiv ing more for his crops, the farmer, in common with all other con- PROTECTION AND NON-PROTECTION CONTRASTED. 309 sumers, paid less for his iron, his glass, his salt, his clothing, his boots, and his implements and machines. In the year 1845 pig- iron ranged from $30 to $50 a ton ; in the year 1860 it ranged from $20.50 to $27 a ton. In 1845 the average price was about $38, and in 1860 the average price was $23.50. A difference of $15 a ton in the price of iron involves a material difference in the cost of nails and implements, tools and machines. In the year 1845 salt sold at an average of 37 cents in New York ; in the year 1860 it sold at an average of 18^ cents a bushel. Nails were 4J cents in 1845, and 3 cents in 1860. Linseed-oil, the important element in the cost of all paints, was 73-J cents a gallon in 1845, and 58 cents in 1860. Boots (men s heavy), which cost $3.50 in 1845, cost $2.90 in Rhode Island, and an average of $3.30 in the Eastern and Middle States in 1860. The fact will be observed that the wages of labor at Lowell have kept pace closely with the price of wheat. The comparison is note worthy : 1889. 1845. 1849. 1859. Wa^es at Lowell. . . $1 32 $1 05 $1 30 $1 43 Price of Wheat 1 24 1 04 1 24 1 43| Is there not some law of economy underlying this singular paral lelism? To all manufacturers the farmers are the consumers. If the farmers are able to purchase largely, the demand for products and the demand for the labor of operatives increase, and the rate of wages rises. But, if the farmers are rendered unable to purchase liberally by the low price of their products, the demand for manu factured goods and for labor in manufactures must decrease, and the rate of wages must fall. Generally, then, the rate of wages in manufactures must rise or fall with the price of agricultural products. So far, the cost of living and the wages of labor keep pace with each other. The laborer, benefited by higher wages, has also to pay in like proportion more for his food. But the cost of food pro duced by domestic agriculture is not more than one-third of the whole cost of living. Other articles, if controlled in price not by the natural law of demand, but in part by an artificial law, may be costly when the price of farm products is low, and when the rate of wages is low. Whenever that occurs, all labor, agricultural and manufacturing, has its cost of living increased in proportion to its consumption of 310 DOES PROTECTION PROTECT? the article so enhanced in cost. And this increase, being without any corresponding increase of wages or of the price of farm prod ucts, is a burden upon farmer and manufacturing operative a tax which can in no way be compensated. The cost of iron and of other articles, products of protected in dustry, has in fact been artificially increased, at a time when both agricultural prices and the wages of all labor have been reduced. As illustrations, take iron, the material of all tools, implements, and machinery ; salt, which is an element in the cost of all packed meats and fish ; nails, and linseed-oil, a material of importance in the cost of paints : 1889. 1845. 1849. 1859. Price of Wheat .... $1 24| 1 32 39 00 06| 75 37 $1 04 1 05 38 00 04i 74 37* $1 24 1 30 24 37 04 63| 24 $1 434- 1 43 25 00 03 60 184- "Wa"es Lowell Pig-iron per ton Nails cut per Ib . . Linseed-Oil, per gallon.. Salt, ner bushel. . Because prices of manufactured articles were not lower in 1845 than in 1839, in proportion to the decrease in agricultural prices or in the wages of operatives, all classes were taxed, and all labor burdened. The cost of living was not in all its elements reduced in proportion to the reduction of wages. But, when the protective tariff had been repealed, wages of labor and agricultural prices rose, but prices of all the manufactured products declined. The cost of living did not increase, then, in proportion to the increase of wages or the remuneration of the farmer, but, as affected by the important articles mentioned, it declined. And during the succeeding ten years of non-protection, while the wages of labor and the price of agricul tural products materially advanced, the cost of living, as affected by the price of the manufactured products named, either decreased still further or increased but slightly. It is not necessary to show that prices of all other manufactured products have corresponded with the prices of those given, nor are statistics for that purpose accessible. The conclusion is unavoid able that, if important elements in the cost of living have been artificially increased by duties, at a time when prices of agricultural products, cost of domestic food, and wages of labor, were reduced in correspondence, then all labor has been taxed, and all industry burdened by interference with the natural laws of exchange. Capi tal has pocketed profits. But labor has been taxed to pay them. THE PRESENT SITUATION. 311 CHAPTER XXIII. THE PRESENT SITUATION. THE conclusions justified by experience in former times are pecu liarly valuable now, when all acknowledge that the condition of the country is most unsatisfactory, but for the admitted fact different causes are assigned. Knowing how other protective tariffs have affect ed farming and other labor, we can judge more confidently whether existing evils are due entirely to a depreciation of currency, or to a mistaken interference with natural exchanges. Tables given at the close of this chapter show that, during the war, the price of farm-products was very low hardly higher in the average, measured in gold, than the rates of the panic period, Janu ary, 1858. During this time manufacturing was also seriously re tarded, but all disorders were ascribed to the war. In 1865 the crop of wheat was short, and for two years thereafter a continued defi ciency of supply lifted the price of wheat above that of 1860, although corn sold for very little more, and hay and some other products for much less than was realized before the war. By the high price of wheat the farmer was barely paid for a short crop, but, though in other respects worse off, he continued to hope. The crop of 1868 was ample, and a sudden and serious fall of prices was the result. Those who had ascribed the partial good fortune of 1866 and 1867 to the tariff, began to be undeceived. Meanwhile, the condition of laborers in manufacturing and me chanical employments was by no means enviable. In the report of 1869, Mr. Wells, Special Commissioner of the Revenue, presented, in a very strong light, the contrast between the condition of such labor in 1860 and its condition in 1867- 68, and the mass of statis tics gathered by him proved that the average increase of wages in manufacturing establishments was " for unskilled labor " 50 per cent., and for " skilled labor " 60 per cent., while " the increase of all the elements which constitute the food, clothing, and shelter of a family had been about 78 per cent., as compared with the standard prices in 1860- 61." The material part of these tables is copied at the close of this chapter, and no inquiry by private individuals can add weight to these official statements, nor has any private citizen at command the facilities for a more extended investigation than that of the commissioner. The fact which the commissioner also records, 312 DOES PROTECTION PROTECT? that wages in the cotton-mills were reduced in 1868, and that the prices for puddling and rolling iron declined in that year, so that the increase since 1860 was about 67 per cent., though the cost of making iron was still about 75 per cent, greater than in that year, will be noticed in due season, for this reduction accompanied the sudden fall in the price of agricultural products in 1868. When the tables were prepared, wheat was selling for $2 in gold, and yet the average in crease in the wages of agricultural labor was only 50 per cent., little more than the difference at that time between currency and gold values. The tables of wages, contrasted with those of retail prices, in the manufacturing towns of New England, New York, Pennsyl vania, New Jersey, and Delaware, leave" no room to dispute the con clusion that at that time wages had increased since 1860 less than the cost of living, and the workmen in mechanical and manufacturing employments were actually worse off than they were before the war. Reducing the results to gold values, at the rate of 1867- 68, we find that the average increase of wages in gold was for unskilled labor 7, and for skilled labor 14 per cent., but the average increase in the cost of living in gold was about 27 per cent. The skilled workman who received $100 a month in 1860, and expended $90 for his living, in 1868 received wages worth $114 in gold, but the cost of living, if he purchased the same quantity of the same articles as in 1860, was in creased to $114 in gold, and, though he could save $10 a month in 1860, he could save nothing from larger wages in 1868. Nor was his case in any way improved by calling his wages $160 in currency, for the cost of living, reckoned in currency, had increased to $160 also. WTiile the workmen in manufacturing employments were thus cir cumstanced, the wages of agricultural labor had increased only 7 per cent, in gold. But not more than one-third of the cost of living is for the products of domestic agriculture, and these products, as the tables show, had not increased in cost more than manufactured or imported articles. If the cost of living to other laborers was about 27 per cent, higher in gold than it was in 1860, the cost to farming laborers, after deducting all products of agriculture in this country, must still have been increased more than 13J per cent. Counting as nothing the products of the farm consumed in supporting its laborers, the cost of their living had still been increased at least twice as much in gold as their wages had been increased in gold. At that time, high prices of some farm-products were balanced, as they were caused, by short crops. Having calculated to raise one thousand bushels, and expended in seed and labor enough THE PRESENT SITUATION. 313 to raise that quantity, the farmer found that his crop was from five to eight hundred bushels only, and, even at the high prices then obtained, it returned to him little more than his outlay. Hay, however, was lower than in 1860, and wool also. Had the cost of living been no greater than it was before the war, both farmer and mechanic would have prospered, but the actual increase was far more than the increase in wages, or in the profits of farming. In the year 1868 the crops were ample, and the price of wheat fell nearly a dollar a bushel. The first fair crop in several years was consumed at a price scarcely higher in gold than the farmer had obtained in 1860. With an increase of population from thirty- one to thirty-seven millions, the number of farmers and of persons depending upon agriculture for support must have increased one- fifth, and, to yield them as fair wages as were received in 1860, the value of crops produced should also have increased one-fifth. But the actual increase in the gold value of Northern crops, as has been shown in the examination of the progress of agriculture, was from $1,079,000,000 in 1860 to $1,113,000,000 in 1868, while the gold value of all crops, cotton and tobacco included, was less in 1868 than in 1860. The return to each farmer or laborer per capita was, there fore, materially diminished; there were about six laborers in 1868 to divide returns not greater in gold than were divided by five per sons in 1860. But the cost of production and the cost of living had been affected also. Receiving less per capita for products sold, the farmers were compelled to pay more for articles imported or manu factured; for clothing, boots and shoes, blankets, household goods, tea, coffee, and sugar, and for implements. It need not be said that the farmers generally suffered. Within the year ending June 30, 1869, in some of the agricultural counties of Ohio, it has been stated, more mortgages were effected than in any preceding year for a long period. Wool declined so rapidly in price that the slaughter of millions of sheep began. Yet the farmer continued to pay, to purchase, and to hope. One more good crop, he trusted, would relieve him. It came the excellent crop of 1869. All know the result. Prices have fallen still lower. Michigan wheat sold in New York, January 1, 1869, for $2.12J, and January 1, 1870, for $1.55 ; No. 1, spring, declined from $1.70 to $1.30 a bushel ; wheat- flour from $6.60 to $4.85 ; rye-flour from $7 to $5 ; rye from $1.50 to $1.02 ; oats from 78 to 65 cents; hay from 90 to 85 cents. These are New-York prices. At Chicago, January 1, 1869, wheat was worth $1.13, and January 1, 1870, only 78 @ 79 cents ; oats had 314 DOES PROTECTION PROTECT? declined from 46-J to 41 J cents ; rye from $1.12 @ 66 cents ; barley from $1.48 to 77 j- cents; beans from $3 @ $4.25 to $2 @ $3 per bushel; and hay from $19.50 to $14 per ton. At Cincinnati the fall in flour was from $7.75 per barrel to $5.50; in wheat, No. 1, from $1.75> to $1.14; in rye from 1.35 to 93 cents; in barley from $2.35 to $1.35 ; in clover-seed from 15 to 13J cents ; in butter from 38 to 30 cents; apples from $4.50 to $3. 50 per barrel; potatoes from $2.50 to $1.50 per barrel. Nor do these prices at the principal Western markets present to the mind the full extent of the loss to the farmer. Thousands of bushels of wheat were bought in Iowa for 40 cents a bushel during the closing months of 1869. No farmei; can afford to produce wheat at such prices. In plain terms, the farmers of the country have quite generally failed to realize the actual cost of their products. They begin to restrict their purchases. The merchants in the country find it hard to remit to the city ; and the whole sys tem of exchange is clogged. The load borne by two-thirds of American laborers has proved too heavy. They have been taxed too long to support enormous monopolies, and blunders in national economy more fatal to industry than the hungriest monopoly, and their misfortunes must now be shared by others. No other branch of industry can long continue to prosper, after the farmer has been forced to economize. Accordingly, in spite of a reduction in the cost of living as far as that is affected by the price of agricultural products, the condition of laborers in mechanical and manufacturing employments has not on the whole improved. Bad as it was in 1868, it is now even worse, and the fact has been forced upon the attention in all parts of the country by strikes of unusual number and magnitude. Many of these have been unable to resist a reduction of wages. In one article, treating of the condition of labor in the metropolis and neighboring cities, the New- York Times men tions thirty strikes, and adds, " of these a few only were success ful." The painters had 1,300 men idle for more than three months ; the iron-moulders of Williamsburgh were idle for three months ; the potters of Trenton were on strike for five months, with serious loss to employers and employed. Carpet-weavers about Philadelphia were on strike for some time, but finally accepted reduced wages. In Pittsburg the wages of plasterers in 1869 were 11 per cent, lower than in 18*65 ; of masons 20 per cent., of blacksmiths 21 per cent., of carpenters 20 per cent., of painters 20 per cent., and of ma chinists 20 per cent. Mr. Wells records the fact that in 1868 the wages of iron-moulders were reduced, and it is elsewhere stated that THE PRESENT SITUATION. 315 the reduction was for puddlers 25 per cent,, rollers 40 per cent., and laborers %5 per cent.^ Nor is this the only form in which wages have been reduced dur ing the past two years. Thousands of establishments have been forced to reduce the number of their hands. In Chicago alone, on the 1st of January, 1869, it was estimated that over twenty thousand persons were out of employment. In every part of the country, the number of hands employed in mechanical occupations has been di minished, in consequence of the embarrassment of farmers. The country blacksmith, carpenter, or shoemaker, finds little money com ing in when the farmers in his neighborhood are pinched, and he is compelled, not only to economize in his own purchases, but to dis charge some of his hands. Thousands of mechanics and working- men are drifting to cities, from country towns where they have been employed, and seeking work at such wages as any employer may choose to offer. Even where the larger manufacturing establishments have neither reduced the number of hands nor the rate of wages, they have in very many cases reduced the aggregate sum paid in wages during the year by stopping work for a time. In many different branches of manufacture this expedient has been resorted to, because it was found that the markets were overstocked, production having in creased, while the increase of consumption has been suddenly ar rested. Many cotton-mills have worked short time ; yet the quantity of cotton manufactured has been scarcely greater, and actually less in proportion to population, than the quantity manufactured in 1860. Woollen and carpet establishments in considerable numbers have temporarily stopped work during the year. The paper-manufactur ers have held a convention to agree to diminish production. The American Workman, organ of the Shoemakers Union, states that the men employed in that branch of industry have had work only ten months out of the twelve. Out of thirty thousand anthracite- coal miners, twenty-five thousand stopped work for months, demand ing a formal agreement that production should never be continued when the price of coal should fall below five dollars a ton. Tailors in New York, working less than full time, found their wages insuffi cient, and demanded larger. Iron establishments throughout the West have been greatly embarrassed, few working full time ; and notices in the newspapers indicate that many Eastern establishments have also been working below their full force. The hat-manufacture complains of extreme depression, the domestic consumption having been reduced, within the past three years, fully twenty-five per cent., 316 DOES PROTECTION PROTECT? while the large demand for export, which for many years before the war sustained fully one-seventh of the production, has almost wholly ceased, our manufacturers for the first time in many years being un able to supply foreign markets as cheaply as can England, Germany, and France. The copper mining and manufacture are as seriously depressed as ever before ; and though large establishments, engaged in smelting foreign ores at Boston and Baltimore, have been broken up by the duties imposed by the act of 1869, the consumption has been so much more largely reduced, that the price of the domestic products has fallen four cents from 26-27 to 22-23 cents since the passage of that act. Manufacturers of paper-hangings, because of the duty imposed by the act of 1869 upon "Dutch metal," have been obliged to raise the price of their products from five to twenty-five cents a roll, according to the quantity of leaf used on each roll, and testify to a general falling off in sales, "owing to the high price and the difficulty of making the consumer understand the reason why we charge more." It does not occur to these gentlemen that the con sumer, though he should understand perfectly well, might still be limited in his purchases by his ability to pay. The number of hogs packed at the West, according to statements recently published, will fall short of the number packed in 1868- 69. Lumber-dealers and brick-makers, in important centres, have been driven to reduce their operations. Of several of the large Western cities, in which records are published of the number of houses built each year, all except one show a decrease in 1869 as compared with 1868. While these facts appear in regard to the most important branches of in dustry, there is no reason to doubt that the same causes have in like manner affected minor interests, whose complaints attract less atten tion in public journals and documents. These facts only accord with the reasoning that, whenever the farmers are pinched, the consumption of products of other industry must be checked, the demand for labor in other industry must be reduced, and the wages of such labor in the aggregate must be dimin ished. During the two years 1868 and 1869, wages in mechanical and manufacturing employments have in many cases been reduced in rate; in other cases, the rate being unchanged, there has been a virtual reduction by temporary stoppage of work ; and, in others still, the aggregate paid in wages has been reduced by the discharge of hands. It is beyond question, therefore, that the rate of wages J&o the whole lower than it was in 1867- 68, when Mr. Wells s inquiries were made ; and, if the thousands of laborers now out of employment be taken into account, the aggregate paid in wages to non-agricul- THE PRESENT SITUATION. 317 tural labor must be quite materially reduced. But in. 1868 the aver age increase since 1860 was only 14 per cent, in, gold for skilled and 7 per cent, for unskilled labor. The accompanying table of prices, January 1, 1860, and January 1, 1870, shows that the cost of living, measured in gold, has been increased far more largely : PRICES IN I860 AND 1870. Manufactured Products and Imported Articles. 1860. 18?0 Currency 1870 Gold. Inc. or Dec. p. c. Ashes pots 100 Ibs $5M* 39 5 50 10 50 8%g nx 4 50 16 00 235 6 ^ 22 17 42 25 3 20 30 75 3 00 26 53 24 50 57 16 37# 11 75 9 50 9 00 1450 9# 6^ M 16 20 9 a* 90 j* 35 21 79 7% 10 U# 200 6 9 00 75 3 50 21 50 4 50 24 14 6 00 $7 50 20# fS" 15 00 32 26 7 50 27 50 4 20 13# 37 56 86 25 5 30 42 1 50 "98 78 35 85 90 29 75 24 50 14 00 27 00 33 00 15 12 17* 30 42 17^ 48 1 70 1 50 10 13 70 87# 45 "io% 14^ 2 55 10X 1200 1 30 5 50 43 00 6 83 40 19 9 50 $6 22 KK 42^ 6 43 12 45 %* 6 22 22 88 3 48 11 14* 80 31 12 71 58 & 35 1 24# 6 CO 82 64 29 ro# 74^ 2469 20 33 11 62 22 41 27 39 8* y* 35 a* 1 41 1 24 8 8* 8* 87 9 11X ,8* * 1 08 4 56 35 69 5 67 33 16 7 88 + 21 3 + 8 + 18 + 20 + 4 + 90 + 38 + 42 + 49 + 68 + 130 + 33 + 40 + 70 + 41 + 25 + 16 + 66 + 100 + 200 + 20 + 20 + 34 + 30 + 50 + 73 + 22 + 149 + 88 + 33 + 54 + 40 + 50 + 75 + 24 + 110 + 23 + 37 + 60 + 26 + 132 + 117 + 79 + 10 + 16 + 17 + 36 + 5 + 40 + 10 + 44 + 30 + 67 + 26 + 37 + 14 + 31 Candles Adamant. Ib " Sperm, Ib Coal Anthracite ton " Liverpool ton .... Fish Orleans Ib " Dry Cod quintal " No. 1 Mackerel, bbl Fruits Raisins, box " Currants Ib Hemp Manila, Ib Indigo Manila Ib Iron American Pig * ton u English Bar ton " Nails, cut.* Ib Leather Hemlock Sole, Ib " Oak Sole Ib Lime Rockland bbl Liquors Brand v. gallon " Whiskey, gallon Molasses No gallon u Cuba, clayed, gallon Oils Whale, o-allon " Linseed gallon Provisions Pork Mess bbl ... " " Prime, bbl Beef, .plain West., bbl. " prime Mess, tee.. " " Hams, extra, bbl. Hams, pickled, Ib Shoulders, Ib Lard Western Ib ... " Butter, Western, Ib " " State, Ib " Cheese, factory, Ib Salt Turk s Island,* bushel " Liverpool, ground, sack " Domestic,* bbl Soap Brown * Ib . * Castile * Ib " Oolong * Ib Tobacco Afanuf d No 1 * Ib Whalebone Ib ... Sugar Cuba, raw, Ib " refined, Ib Coffee Rio * Ib Laths * M Paints Red Lead * Ib Collins Axes t doz Lowell Ingrain 2-ply Carpets,t Blankets 10-4 t pair Men s ordinary Boots t dozen Wax-le ( fed Boot e t pair Black Alpaca t yard Steel Sheffield C.t Ib Stoves, 5 hole? t Prices thus marked aro taken from the Treasury Report of 1863, and newspaper quotations of January 1, 1870, mostly from the New York Tribune. t Prices thus marked are given in the report of Commissioner Wells as the prices for 1859 and 1869. All other prices given are from tables published by th Journal f Owmerce. For American pip-", however, the price given for 1860 is the average for that year, as stated by Mr. Colwell, report of Revenue Commission, 1865- 66. 22 318 DOES PROTECTION PROTECT? PKICES IN 1860 AND 1870. Agricultural Products. 1860. 1870-Currency. 18TO Gold. Inc. orDec.p.e. Wheat-Flour State bbl $530 $5 35 $4 44 16 " " Western bbl 529 485 402 24 Rye-Flour bbl 4 00 5 00 4 15 + 4 Corn-Meal (Brandy wine), bbl Wheat Michigan bushel 3 90 1 50 5 00 1 55 4 15 1 28 + 6 14 " No 1 Spring, bushel 1 18 1 30 1 07 10 92 1 02 84 Oats State bushel 46> 65 54 + 16 " Western bushel . 453 62 51 4- 12 Com Western bushel 90 1 10 90 " Southern bushel .... 88 1 02 - 84 4 Hay Shipping 100 Ib ... 1 10 85 70} 36 Hops, Ib = 16 25 20% + 25 Seeds clover Ib 83 13 10% + 25 1 86 1 50 1 24 8 Hides B. A., Ib 24# 22# 10 Tobacco Kentucky, Ib 12 13 10M 10 Wool Saxony t 54^58 46-55 38-45 26 " Mprino % and blood .... 48-52 43-50 35-41 24 34-46 40-48 33-10 _, g " Extra pulled 42-46 39^5 32-37 21 " No 1 pulled .... 28-30 24-29 20-24 24 Cotton Middling Upland Ib 11 21 + 90 Eice, 100 Ibs 4 20 725 + 74 In all the long list of articles quoted, excepting the leading agri cultural crops, there are scarcely half a dozen which have not in creased in price since 1860 more than the average of wages of skilled labor had increased in 1867- 68, both being reduced to the gold stand ard, while many of the most important have increased from 20 to 200 per cent, in gold. Prepared meats and other packed or prepared food have increased in cost remarkably. Plain Western beef, which has increased only 22 per cent., and factory cheese, 24 per cent., are the lowest, but beef hams cost 88 per cent, more in gold, and mess beef 149 per cent, more in gold, than they cost in 1860; Turk s Island salt costs 110 per cent, more in gold ; fish from 40 to 90 per cent ; raisins 49 per cent., currants 68 per cent., tea over 100 per cent., and manufactured tobacco about 80 per cent, more in gold than the same article cost ten years ago, January 1st, as quoted in the same paper, the New-York Journal of Commerce, from which these quotations are taken. The contrast between the prices of farm crops and manufactured products will strike every reader. While wheat, flour, rye, corn, tobacco, potatoes, hides, tallow, wool, * Not having New York price of potatoes in 1860, 1 have given Cincinnati prices for December 31, 1860, and December 31, 1869. \ Wool prices for 1860 are from tables in the New York Chronicle, and for Oc tober 31 ; for 1870, January 1st, " Walter Brown s Circular." All other prices are from the tables in the Treasury report of 1863, or from the New York Journal of Commerce. THE PRESENT SITUATION. .319 and hay, sell for less money in gold than in 1860, and oats and hops for little more, and the only agricultural crops of considerable impor tance which command higher prices are cotton and rice, the price of nearly every manufactured or imported article in the list is much higher. To the quotations from the Journal of Commerce are added, from other papers, statements of the prices of leading articles Jan uary 1, 1870, and statements by Mr. Wells of the price of a few manufactured goods in 1859 and in 1869. It is creditable to the cotton manufacture that its products are not now enhanced in price, in view of the greatly-increased cost of raw material, and it may be added that from this manufacture, which has thus given evidence of real vigor and enterprise, there come none of those clamors for yet higher protective duties with which Con gress is assailed. Indeed, some of the ablest and most conspicuous cotton manufacturers are earnestly and openly advocating the repeal of the protective system. The prices of blankets and carpets may fairly be taken as indicating the change of price in a large class of woollen goods of which the domestic manufacture does not fully sup ply the demand, and in which the protective system gives a virtual monopoly. But tables already given show that some other woollen goods sell for about the same in gold as in 1860, though, wool being cheaper, they should sell for less. It may fairly be presumed that products of iron generally have not increased in cost less than stoves and cut nails. These, however, are wholesale prices, but the cost of living de pends upon retail prices. The statistics presented by Mr. Wells show that the difference between wholesale prices at the principal markets and retail prices paid by consumers in Eastern manufacturing towns was much wider in 1868 than it was in 1860. In 1860 the wholesale price of Western flour at New York was $5.30, but the average price to consumers in Eastern towns, as shown by the elaborate investigations of Mr. Wells, was $7.48, and the dif ference, which may be called the cost of exchange, was then $2.18 in gold In 1867- 68 the wholesale price of the same grade at New York was $9.55 in currency, or $6.87-J in gold, but the average retail price of flour in the same towns as before was $10.39 in gold, and the difference, or cost of exchange, was $3.52 in gold. The gap between the retail price of flour and the wholesale price at New York had therefore enlarged from $2.18 to $3.52 in gold, or about 64 per cent. In I860, the Western wheat from which this flour was made sold at Chicago for 95 cents to $1 a bushel, but in January, 1868, the same 320 . DOES PROTECTION PROTECT? grades sold for $1.25 to $1.30 in gold, and the increase in the cost of the wheat was, therefore, about 30 per cent. But the increase in the retail price of the flour to Eastern consumers was from $7.48 to $10.39 in gold, or about 40 per cent. In 1860, the price of live hogs in St. Louis was about $6 per cwt., and in Cincinnati $6.20, and at that time the retail price of smoked hams to Eastern consumers was 12.36 per pound. But in 1867- 68 the price of live hogs at St. Louis ranged from $5.50 to $7.25 in currency never higher than $5.21 gold. Yet consumers in the same Eastern towns were paying for smoked hams $22.21 in currency, or $15.86 per cwt., in gold. The retail prices of pork in Eastern towns compare with the price of live hogs at St. Louis, all reduced to gold, thus : I860. 1868. Pork, fresh $9.54 $12. Increase. " corned or salted 10.39 12.56 " " bacon 10.28 12.6 " " hams smoked 12.36 15.86 " " shoulders 9.46 12.20 " Live hogs, St. Louis 6.00 5.21 Decrease. A part of this difference is explained by the fact that in 1860 Turk s Island salt for packing cost at St. Louis and Cincinnati about 30 cents a bushel, and in 1868 about 65 cents. A part of it is ex plained by the fact that, in moving from the Mississippi River to the great centres of manufacturing industry in Eastern States, products roll over about one thousand miles of rail, which cost in 1860 $47.95 a ton (American), and which now cost about $75 a ton. At one hundred tons to the mile, each line of railroad has to pay nearly $3,000 per mile more for its iron alone than it paid in 1860, and every barrel of flour, every bushel of wheat, every barrel of meat, or head of cattle, sent to market over these railroads, must help to pay for the increased cost of building and maintaining them. A part of the difference, moreover, is explained by the fact that in 1860 the wholesale price of hams in New York was $9.25, while the average retail price in Eastern towns was $12.36 ; difference, $3.11 per cwt. ; but in 1868 the wholesale price in New York was 12 cents currency, or $8.64 in gold, while the average retail price in Eastern towns was $15.86 in gold; difference, $7.22 per cwt. In 1860, lard cost at wholesale in New York 10 cents, and the average retail price in that State was 12 cents ; the difference was, therefore, $1.50 per cwt. But, in 1868, lard cost at wholesale in New York 12f cents, and the average retail price in towns in that State was $18.36; THE PRESENT SITUATION. 321 difference, $5.61 per cwt. In 1860, dry codfish cost per quintal at New York $4.50, and the average retail price in towns in that State was 5 cents ; difference, 50 cents per cwt. But in 1868 dry cod sold in New York for $5.50, and the average retail price in towns in that State was 9 cents ; difference, $4.50 per cwt. These comparisons might be almost indefinitely extended. But they show quite clearly that the cost of preparing and transporting food has been increased, and that the gap between retail and whole sale prices has been greatly widened. They reveal an increased waste and friction in the whole system of exchan ges, by which it comes to pass that the consumer at the East does not get the full benefit of low prices of agricultural products, while the farmer at the West, receiving less than he did in 1860 for his products, is compelled to pay not only high prices for manufactured products consumed, but greatly increased charges for transportation and ex change. Nor is this strange. The dealer and transporter have to meet increased expenses, and they have both the power and the will to pass the burden over to the producers. If a pair of shoes actually costs 5 cents more than it did in 1860, the dealer finds his excuse for charging 10 cents more. If the cost of making or moving a barrel of pork, or of flour, is increased 20 cents, the dealer has his excuse for increasing his price 50 cents. If one article of woollen cloth is doubled in cost, the dealer knows that few customers will understand that other similar articles are not equally affected, and, if any customer complains at any increase of price whatever, the high tariff affords him an unfailing excuse. At all points, the friction of "the societary movement" is increased. Everybody is charged a little more for every thing, and, having a burden to bear, feels that he must also charge everybody a little more. Thus it happens, first, that the increase in wholesale prices of manufactured products is multiplied in retail prices to consumers, and, second, that the reduction in wholesale prices of agricultural products does not result in a proportionate reduction of retail prices to consumers. Much of the advantage to consumers resulting from the low price of crops is neutralized by increased cost of transportation and exchange. But the disadvantage resulting from increased cost of manufactured prod ucts is multiplied, to all consumers, by the same increase of friction. The price of manufactured products, it would naturally be sup posed, must be reduced in consequence of the arrest of consumption already described. But a reduction to the natural level is prevented by the increased cost of production. Many illustrations have already 322 DOES PROTECTION PROTECT? been given of the effect of the protective system in that respect, and the table of prices affords others. In 1860, 100 bushels of Western corn at the New- York price would buy 23 barrels of corn-meal, but in 1870 only 22 barrels ; of Southern corn, in 1860, 100 bushels would buy 22| barrels, but in 1870 only 20| barrels. In 1860, 100 pounds of ingot copper would buy 88 pounds of copper sheathing, but in 1870 only 64 pounds. In 1860, 100 pounds of South American hides would buy 122J pounds of hemlock sole-leather,* but in 1870 the same weight of foreign hides would buy only 55 pounds of that leather. In 1860, 100 pounds of hides would buy of men s ordinary boots 13^- pair, but in 1870 the same quantity of hides would buy of the same quality of boots only 6 J pairs. In 1860, 100 pounds of Ken tucky tobacco would buy of " manufactured tobacco No. 1 " 50 pounds, but in 1870 only 22 pounds. In 1860, 100 bushels of corn would buy of mess pork 5^ barrels, but in 1870 only 3-J barrels. It has been observed that all prepared meats, fish, and provisions, are in creased in price, and this change is not fully explained by the cost of live animals and of salt. The farmer, in 1860, who had for sale 100 pounds New- York Saxony fleece, could obtain 56 cents a pound in gold, and could buy 37 J yards of Harris cassimere ; but in 1870 the same farmer, selling 100 pounds of the same fleece at 48 cents currency, could buy only 24 yards of the same cloth. Having 100 pounds of full blood merino fleece in 1860, he could sell at 50 cents in gold, and could buy 14^- pairs of Holland 10-4 all-wool blankets ; but in 1870, with the same fleece selling at 45 cents in currency, he could buy only 8^ pairs of the same quality of blankets. His com mon wool selling in 1860 at 46 cents, the farmer could with 100 pounds buy 61 J yards of Lowell ingrain two-ply carpeting; but in 1870, 100 pounds of the same common fleece, bringing only 46 cents in currency, will buy only 35^ yards of the same quality of carpet. Illustrations of this kind need not be multiplied. It is enough to call attention to the fact that in almost every branch of industry the cost of production has been materially and in some cases very greatly increased. Every step from the rudest products of unskilled labor toward the fashioning of any thing for use or for food seems to cost more, not in currency merely, but in proportion to the original cost of the material, than the same process did in 1860. It should not be overlooked that the materials of house-building * January 1, 1860, according to price tables in the Treasury report of 1863, Buenos Ayres hides sold for 24^, but the Journal of Commerce table states the price of hemlock sole-leather, January 1, 1860, as 20 cents a pound. THE PRESENT SITUATION. 323 are all increased in cost, not in currency alone, but in gold. Lumber is higher, lath cost a little more, lime costs 66 per cent, more in gold, nails cost 41 per cent, more in gold, glass of the cheapest quality was quoted in 1860 at $2.75 and is now quoted at $6 ; linseed-oil, the main element in paints, is 30 per cent, higher in gold, and red lead 40 per cent, higher ; and English bar-iron is 70 per cent, higher. It is not strange, then, that rents are much higher. Mr. Wells stated that the increase in rents in New York and other large cities has been from 90 to 100 per cent., in small towns in New Jersey 111 per cent., and in small manufacturing towns of Pennsylvania 81 per cent. The Pittsburg Commercial, indeed, states that " within the past Jive years houses containing two, twelve, and fourteen rooms have doubled ; houses containing six, seven, and eight rooms, have advanced 150 per cent., while three, four, and five room tenement-houses have in a majority of cases trebled. These are the homes of the working-classes." This change, it will be ob served, is within five years since the war-prices had culminated. The increase since 1860 must therefore have been even greater in that city. Paying such rents, buying provisions costing from 22 to 88 per cent, in gold more than in 1860, buying clothing, boots, carpets, blankets, stoves, salt, tea, coffee, and tobacco, thus increased in cost, and paying an increased tax for every step in the preparation of food and clothing for use, how can the laborer live without a large increase of wages ? It is clearly impossible. But the higher wages them selves increase the cost of producing other articles of use or neces sity. The prices of manufactured articles cannot be reduced in pro portion to the prices of agricultural products until wages and the cost of production can be reduced ; but these, again, cannot be low ered until the cost of living can be rednced. Hence the manufacturer, unable to make or to sell at such rates as to stimulate purchases, bur dened with a stock of goods left on his hands by arrested consumption, and finding the outlet for this surplus in the export trade artificially clogged, if not plugged up entirely, is forced to reduce production by discharging hands or working short time. If he proposes a reduc tion of wages, his hands protest, and with truth assert that they are worse off to-day, with wages nominally high, than they were in 1860 with wages and prices both at a natural level. If he discharges men, the country loses their industry, but must still pay in one form or another for their living. If he works short time, the effect is worse than a reduction of wages. A payment of thirty dollars a week each 324 DOES PROTECTION PROTECT? to fifty hands, while fifty men are idle, is far worse for industry than fifteen dollars a week, the whole number being employed. Twelve dollars a week, if the factory stops work two months in the year, is not better pay for the operative than ten dollars a week and full time. The country loses two months of industry ; prices must be increased to compensate for the loss. The production of wealth and the aggregate wages of labor are reduced, but the cost of living and the cost of production do not correspondingly decrease. It cannot be denied, in view of the facts presented, that other labor, as well as agricultural, has suffered in consequence of inter ference with the natural system of exchanges. The farmer has been driven into debt, and consumption of manufactured products has been arrested. The manufacturer finds himself loaded down with a stock of goods unnaturally costly in production, larger than the home market will consume, and too high priced for exportation. The operatives find their wages decreased, either in the sum paid weekly, or by suspension of work. Yet the cost of clothing, houses, food, and necessaries of life, cannot be properly reduced, because of the cost of production, and all classes are compelled to pay heavier charges for exchanges and transportation. The whole community is taxed. The greater part of the tax is passed to the producers. Of these the farmer bears the largest share of the burden, but his em barrassment inevitably recoils upon the laborer employed in manu factures. Nor can the phenomena be reasonably ascribed to any other cause than a tariff which artificially lifts the prices of manufac tured products. For the very same sequence of events low prices of agricultural products and disaster to manufacturers followed the protective tariff in 1S29- 30, when the currency was neither depre ciated, inflated, nor fluctuating in value. The very same extraordi nary depression in prices of agricultural products followed the pro tective tariff in 1843- 44, when the currency was neither depreciated, inflated, nor fluctuating. The same increase in cost of manufactured products, in cost of production, and of exchange, accompanied by low wages of labor, in proportion to the cost of living, has appeared under every other protective tariff as far as statistics have enabled us to examine them. The secret of the disorder is the break between the remuneration of capital and labor applied to agriculture, and capital and labor applied to manufactures, and that break is caused by the artificial increase of the price of manufactured products, while it is not possible for any tariff to secure an equal advantage to the farmer. The gulf thus artificially created, as long as a tariff THE PRESENT SITUATION. 325 continues to widen it, can only be temporarily bridged by short crops, to the disadvantage and loss of all, or filled up by a general col lapse of industry, to the utter ruin of many. " True, the cost of production has increased ; but that is because the labor is better paid," say the advocates of protection. Labor does, indeed, receive more money than in 1860. But, in that which money will buy, labor is paid less than it was then. The cost of labor has increased, but far less than the prices of manufactured products. The increase of wages in gold, in the iron-mills, according to Mr. Wells s report for 1868, was only 20 per cent, since 1860; but the increase in the cost of bar-iron was 70 per cent, in gold. Since that time wages have been reduced, but bar-iron still sells at $85 a ton, as it did in 1868. With an increase of only 15 per cent, in gold in wages in the founderies, the cost of stoves has increased 31, and of nails over 40 per cent. The cost of labor per ton, in making pig-iron in Pennsylvania, was not less than $2.30 in gold; and, in 1868, it was stated by the manufacturers to be $4 in cur rency, increase in gold 58 cents, or about twenty-five per cent. ; but the cost of pig-iron, though lower now than then, is still 35 per cent, higher than it was in 1860. The wages of men employed in cutlery works were increased, from 1860 to 1868, only 3 T ^ per cent, in gold; but the price of Collins s axes had increased 10 T 6 7 per cent, in gold. The wages in sugar-refineries had increased, in gold, 14 per cent. ; but the cost of refined sugar had increased 20 per cent, in gold. The wages in glass-works had increased 17 per cent, in gold, but the New- York quotations of the cheapest glass had in creased over 50 per cent, in gold. The rate of wages in leather establishments had increased in gold 22 per cent.; but, though hides were 10 per cent, lower in gold, the price of hemlock sole- leather had increased 25 per cent, in gold. The wages of hands in the woollen-factories had increased less than 16 per cent, in gold; but, though wool cost less in gold in 1868 than in 1860, the cost of blankets had increased 30 per cent, in gold, and the cost of ingrain carpets 44 per cent, in gold. These comparisons, also, might be in definitely extended. Because manufactured products have increased in cost more than the wages of the labor employed in making those very same products, and manufactured products generally have in creased in cost more than the wages of labor employed in manufac tures, the laborer, though receiving more money, actually receives less pay than he did before the war. Where, then, is the leak ? Labor has gained nothing ; the products which it consumes are en 326 DOES PROTECTION PROTECT? hanced in cost more than the increase of its wages. The people gain nothing; the goods which they buy cost more in proportion to the cost of raw materials. The farmer gains nothing ; his wheat buys less iron; his hides buy less leather; his wool buys less cloth. Has manufacturing capital gained, while all labor and all the rest of the community has lost? In certain monopolies this is true. But, in the majority of cases, the manufacturer is embarrassed by the cost of production, by a restricted market, and by arrest of the natural in crease of consumption. In the long-run and in the aggregate, manu facturing capital also must realize smaller profits than if let alone. Nature s laws will be avenged. Men are tempted to wasteful em ployment of capital, to adherence to wasteful methods, by the expec tation of unnatural profits. The capital and the labor, if let alone, would be more economically and profitably employed. Everybody must be taxed to make up for this diversion of industry from the most remunerative employments and methods. The burden is dif fused over the whole people, and it falls upon the manufacturer him self as well. He must pay more for his machinery, in order that somebody may make iron in Pennsylvania, when it could be more cheaply made elsewhere. He must pay more for his buildings, in order that somebody may cut down our own rapidly-wasting forests, instead of using the timber of Canada also, and in order that some body else may realize profits in making linseed-oil and paints, and in order that somebody else may get rich, in making glass, faster than he did before the war. He must pay more for his labor, be cause his workmen have to pay somebody for making their blankets and carpets, their clothing and boots, an unnatural price, and must pay in every pound of prepared meat or fish they consume a part of the bounty to the salt monopoly. When all these taxes have been met, the manufacturer often finds that the cost of production has so increased as to eat up his expected profits. Meanwhile, the laborer is taxed more than his wages are increased ; the community is em barrassed in all its exchanges; the farmer sells his sheep for cloth really worth one-half the value of the wool on the sheep s back. Everybody is taxed, and nobody permanently and really benefited nobody, save those whose monopolies are sucking up the life-blood of the country. THE PRESENT SITUATION. 027 RETAIL PRICES IN 1860- 61, AND IN 1867- 68. In towns in New York State, and the average in the States of Maine. New Hampshire, Ver mont, Massachusetts, Connecticut, Rhode Island, New York, New Jersey, Pennsylvania, and Delaware, with percentage of increase, and prices of 1867- 68 reduced to gold values. From the Report of Commissioner Wells for 1868. ARTICLES. N.WYOK*. h 11 C T3 ids C c 1860- 61. 1867- 68. 1860- 61. 1867- 68. PROVISIONS. Flour, wheat, superfine, bbl. kk " ft... Flour, rye, bbl Corn-meal, bbl Beef, fresh, roasting-pieces, ft soup-pieces, ft., rump-steaks, ft.. corned, ft. . . . $7 02 3.86 486 2 94 10.25 5.25 10.33 7.67 7.25 9.14 11.43 8.8 9.63 10.14 9.75 10.25 10.75 11.25 9 11 12 5 9.18 18 10.7 46 6 6.36 4.25 63 15.4 20 8.20 9.50 48 45.54 63 8.63 10.73 5 62 4 50 341 87.5 9.63 13 10.25 12 13.33 19.50 11.3 18.5 11.33 61.20 347 4 20 578 3 15 2 53 $13 32 T. 9 00 5 47 20.5 10.35 20. 1C 14.2v 14.11 17.& 22 11.75 16.67 18 15.11 16 17.5 20.17 16.5 is. as 18.36 9 13.45 35 17.7 90 13.27 11.18 7.50 1 44 32.7 40.44 14.10 16.20 1 00 93.63 1 22.4 12.36 14 63 7 48.33 6 94 5 25 62.5 20 25 22 24 31.8 37 18 25.3 18.75 98 5 05 6 85 9 37 4 75 4 00 9C 1 8S s: 8 IOC 98 94 85 95 , 90 92 ; 77 ; 55 56 64 ! 79 Z 52 80 47 94 65 96 110 76 76 128 112 102 72 70 108 105 91 43 39 34 54 55 (* 107 94 115 100 138 90 60 36 67 60| 46 51 62 51 58 $7 48 j 3.99 1 444 3 13 11.46 5.78 12.25 8.46 8.06 10.27 12.92 8.02 10.29 11.39 9.54 10.39 10.28 12.36 9.46 11.6 12.47 4.87 8.01 19.7 11.38 55.34 6.09 6.96 4.64 67.72 14.96 18.26 8.34 9.02 49.74 44.1 9.79 7.86 9.91 5 58 4 44 3 23 87.05 9.62 11.79 11.15 13.56 13.14 18.57 11.59 18.02 10.24 56.43 3 30 444 6 02 2 75 1 86 $14 55 7.7] 8 11 5 33 22. 6f 11. Ot 24.4 15. 9c 14.54 18.48 22. If 14. 5 19.01 19. 7S 16.79 17. 5S 17.63 22.21 17.08 19.67 17.88 8.72 13.59 37.72 19.61 98.94 13.31 13.37 7.49 1 34.88 33.19 38.67 14.65 15.80 1 02.22 88.87 1 15.75 12.72 14.9 8 11 7 14 5 31 64.28 19.39 23.31 23.16 26.79 28.09 39.33 18.37 25.33 17.79 84.81 531 739 9 83 4 69 3 38 94.5? 93.21 78.6$ 70.3 97. 7S 91. 3S 99.38 109.6 80.41 , 89.95 71.54 81.92 84.75 73.69 76.10 69.31 71 ~)f. 1 79i69 80.54 69.6 46.84 79.31 69.51 91.48 72.27 78.79 118.73 92.05 61.45 99.19 121.82 111.74 75.67 75.13 105.49 115.14 65.85 61.82 50.39 45.53 60.87 64.44 35* 101.56 97.71 107.68 97.59 113.68 111.78 58.48 40.56 73.75 50.30 60.61 66.31 63.32 70. as 81.47 $10 39 5.51 5.79 3 81 16.19 7.9 17.5 11.4 10.4 13.2 15.83 10.42 13.58 14.14 12 12.56 12.6 15.86 12.20 14.05 12.72 6.24 9.71 26.95 14 70.67 9.51 9.55 5.35 96.34 23.71 27.62 10.46 11.29 73.02 63.48 82.68 9.09 10.64 5 80 5 10 3 78 45.92 13. 85 16.65 16.54 19.14 20.06 28.1 13.13 18.10 12.71 60.58 3 79 5 28 7 02 385 241 Veal, fore-quarters, ft hind-quarters, ft cutlets, ft Mutton, fore-quarters, ft ... legs, ft chops, ft Pork, fresh ft corned, or salted, ft ... bacon. ft hams, smoked, ft shoulders, ft sausages, ft Lard ft Codfish drv ft Mackerel, pickled, ft Butter, ft Cheese ft Potatoes, bushel Rice, ft Beans quart Milk, quart GROCERIES, ETC. Tea, Oolong, or good Black, ft Coffee, Rio, green, ft roasted.. . f , ""ar good brown ft ... yellow C. ft Molasses, New Orleans, gall.. Porto Rico, gall Syrup, gall Soap, common, ft Starch ft Fuel coal ton wood, hard, cord pine, cord Oil coal gallon DOMESTIC DRT-GOOD8, ETC. Shirtings, brown, 4-4, stand d qualitv, yard Shirtings, bleached, 4-4, do... Sheetings brown 9-8 do. bleached, 9-8, do... Cotton Flan l, Hamilton," yd Tickings, good quality, yard. Prints, Merrimack. yard Mousseline de Laine. dora., yd Crash, domestic, yard Satinet, medium quality, yard Boots, men s heavy, pair HOUSE-RENT. Four-roomed tenements, m th Six-roomed tenements, month BOARD. For men. week For women, week \ Calculated at $1.40. 328 DOES PROTECTION PROTECT? THE RATE OF WAGES IN ISeO- ei AND IN 1867- 68 COMPARED, WITH THE PER CENTAGE OF INCREASE. From the Report of Commissioner Wells, for 1868. COTTON-MILLS. Table allowing the average rates of wages paid to persons employed in the cotton-mills of the United States in the respective years 1860- 61, analSQl; also the percentage of e latter year. OCCUPATION. AVERAGE RATES OF "WAGES OR EARNINGS PER WEEK. 1 "3 I 39 54 59 63 64 64 54 60 56 44 59 74 81 80 48 68 77 76 64 65 52 42 65 67 62 76 41 62 57 60 53 35 56 52 66 In Massachusetts. New England. In the Middle States. Average in the United States. In 1860 -1861. Iu 1867. In 1860 -1861. In 1867. In 1860 -1861. In 1867. In 1860 -1861. In 1867. CAKDINO. Overseer $17 18 9 18 5 00 2 83 2 87 3 61 5 78 5 17 16 65 8 85 5 93 1 64 3 33 15 15 8 30 6 50 3 40 3 96 3 72 5 10 15 94 8 83 7 12 4 50 345 1489 8 82 9 09 6* 15 13 31 7 46 5 85 3 57 *20 00 13 33 7 42 4 70 5 02 626 9 80 7 18 20 60 13 21 11 16 3 17 6 05 21 44 13 45 10 75 6 49 6 81 6,75 9 89 21 11 14 23 11 83 9 06 6 02 19 20 13 75 13 83 14 00 9 17 17 03 10 54 8 92 5 50 $12 90 7 36 4 77 2 80 3 00 3 54 5 85 4 54 11 88 6 93 6 10 1 83 283 12 19 7 70 5 57 3 12 359 3 75 703 12 73 7 08 5 89 4 63 4 07 12 65 8 71 8 70 6 42 5 98 11 31 6 77 595 3 21 $17 61 11 25 8 22 4 51 5 00 596 9 37 786 16 98 10 90 10 18 3 14 5 18 18 09 12 42 9 18 4 71 6 09 6 41 11 40 17 84 11 42 9 10 7 80 6 65 18 11 13 65 13 66 10 78 9 09 14 41 9 77 8 97 5 14 $9 58 6 26 4 78 3 67 2 81 3 07 2 92 5 12 9 80 5 55 6 25 1 72 2 13 8 75 5 76 2*48 4 13 4 15 7 22 1031 6 66 6 25 4 75 4 50 11 65 7 92 9 39 11 50 6 00 7 32 483 $16 30 10 55 8 84 5 75 4 16 5 16 450 7 50 16 72 10 04 11 18 3 46 4 50 16 50 13 00 13 50 3 99 5 87 6 66 13 17 16 08 11 17 9 50 6 85 8 00 17 25 13 20 14 13 18 00 9 38 11 19 9 00 $1266 7 23 5 13 2 83 2 93 3 54 2 92 5 85 4 74 11 71 6 46 5 80 1 69 2 64 12 02 7 44 5 71 2 85 3 62 4 10 7 64 12 18 6 95 5 60 5 24 4 10 12 60 8 60 8 78 7 24 5 96 9 75 5 93 5 90 282 $1760 11 14 8 18 4 61 4 82 5 81 4 50 9 37 7 41 16 90 10 27 10 14 3 09 4 76 17 70 12 53 10 11 5 03 6 00 6 77 11 66 17 36 11 50 9 40 8 48 7 21 17 77 13 95 13 76 11 61 9 14 13 22 9 25 8 96 468 Second hand Picker tenders Railway tenders ... Drawing-frame tenders Speeder tenders Picker-boy Grinders Strippers SPINNING. Second hand . . . Mule spinners Mule backside piecers Frame spinners DRESSING. Overseer Second hand Third hand Spoolers Warpers Drawers and twisters Dressers . . . ... WEAVING. Overseer . . Second hand Third hand... Weavers Dra wing-in hands REPAIR-SHOP, ENGINE-ROOM, ETC. Foreman or overseer Iron- workers Wood-workers Engineer Laborers CLOTH-ROOM, ETC. Overseer . . Secondhand .. Other hands males Females 2 44 4 23 Hours of labor per week 66 Apparent average increase of wages in 1867 over those in 1860- 61, per cent . 56 True average, per cent 63 THE PRESENT SITUATION. 329 WOOLLEN-MILLS. Table showing the average rates of wages paid to persons employed in the woollen-mills of the United States in the respective years I860- 61 and 1867- 68, with the percentage of increase in the latter year y also the rat fs paid in England, with the percentage of excess in the rates paid in the United States over that country. OCCUPATION. AVERAGE WEEKLY WAGES OR EARNINGS. In New Eng land. In New York State. General average m New England and New York. 1 s f & 1 8 if IN ENGLAND 1 11 W P 28.33 20.41 19.27 33.55 I i !| 72 1.1 oST i j < S CO i d ! I a ]p s f 1 A ? ? a PREPARING. Wool-sorter* $8 05 5 65 6 13 1200 8 50 5 25 4 15 6 74 5 48 2 90 11 50 7 50 444 3 14 11 70 6 00 5 00 6 50 6 50 4 50 2 25 5 00 7 88 7 50 9 62 9 31 6 13 13 50 $1235 9 46 10 13 19 13 11 50 803 5 96 11 34 9 04 4 62 18 43 11 10 7 73 5 34 17 75 8 88 8 81 9 00 9 00 9 00 3 50 7 50 14 25 12 00 14 00 1598 10 50 18 00 $7 53 5 13 4 80 12 38 7 75 490 4 00 7 00 5 00 2 50 12 38 7 88 4 88 2 69 13 13 5 88 4 50 4 13 5 38 3 75 6 00 4 50 11 75 803 10 50 8 84 5 83 $1100 8 31 8 22 22 00 11 00 8 63 6 35 11 25 11 00 3 67 23 25 13 13 8 38 4 50 24 75 10 69 7 88 8 50 8 75 7 50 9 00 8 25 17 25 11 00 20 75 16 00 7 50 $7 84 5 42 5 46 12 19 8 13 5 11 4 08 6 84 5 27 2 73 11 85 7 69 4 66 2 92 12 33 5 93 4 77 5 55 6 05 4 12 3 50 4 75 11 12 806 9 97 10 54 6 00 13 50 $1186 9 00 9 17 20 56 11 25 8 25 6 12 11 30 9 88 4 21 20 27 12 00 8 02 4 95 20 55 9 78 8 34 8 80 8 90 8 25 5 m 7 75 18 62 11 00 16 70 15 98 9 64 18 00 51.28 66.05 68.32 68.66 38.38 61.45 50.00 65.20 87.48 54.21 71.06 56.04 72.10 69.52 66.67 64.92 74.84 59.45 47.10 100.00 52.28 63.15 68.34 48.88 67.50 51.61 60.66 33.33 $8 47 6 43 6 56 14 69 8 04 5 89 4 37 8 07 706 3 01 14 48 857 5 73 3 04 14 68 6 99 5 96 6 29 6 36 5 89 3 81 5 54 13 30 8 57 11 93 11 41 6 84 12 86 $6 00 4 85 5 00 10 00 $6 60 534 5 50 11 00 Wool -washers Dvers Overseers Assistants CARD G AND SPIN G. Pickers 4 60 3 50 5 50 5 12 2 50 10 00 4 25 2 25 10 00 5 25 5 00 5 50 5 25 3 75 2 50 5 00 10 00 5 06 3 85 6 05 5 63 2 75 11 00 4 67 248 11 00 5 77 5 50 6 05 5 78 4 13 2 75 5 50 11 00 16.40 13.50 33.38 25.40 9.46 31.64 22.70 22.58 33.45 21.14 8.36 4.00 10.04 42.15 38.55 00.73 21.00 Carders \\ arp s & Beamers. Reelers. Overseers Assistants WEAVING. Weavers Burlers Overseers DRESSING AND FIN ISHING. Fullers Dressers or Giggers Finishers Press Tenders Drawers Packers Overseers Assistants ENGINE-ROOM, ETC. Enineers 7 50 750 4 50 7 50 8 25 8 25 495 8 25 44.61 38.30 38.18 55.88 Mechanics Laborers, W hmen, and Yard Hands. . Foremen NOTE. General average hoars of labor per week in New England and New York, for 1860- 61, 71 ; and for 1867- 68, 66 ; in England, 60 ; adding 10 per cent., 66. Average increase in rates of wages in 1867- 68 over those of 1860- 61, 60.65 per cent. Average advance in rates of wages paid in the United States- over those of England (both in gold), 24.63 per cent 330 DOES PROTECTION PROTECT? LEATHER MANUFACTORIES. Table showing the average weekly | wages paid to persons employed in manufactories of leather in the United States in I860- 61 and in 1867 / also the rates paid in Scotland in 1866, as compared with those in the United States in 1867. OCCUPATION. AVERAGE WEEKLY EARNINGS IN United States. 1860- 61. United States, 1867- 68. Percentage of increase in 67. Wages in 1867 in gold. Edinburgh, Scotland, in 1866. Percent, of exc. in U. S. over Scotland. Tanners $7 00 9 00 9 00 10 00 7 00 6 00 $15 00 15 00 15 00 18 00 10 00 9 00 114 67 67 80 48 50 $10 71 10 71 10 71 12 86 7 14 6 43 $6 25 8 50 8 50 6 25 6 25 3 75 4.46 2.21 2.21 6.61 0.89 2.68 Curriers Dressers. .... Beam-men Shed-men Tanners 1 labor s. Average increase of wages in 1867 over 1860- 61, 71 per cent. Average advance of rates in the United States in 1867 over those of Scotland in 1866, 48 per cent. GLASS-WORKS. Table showing the average earnings of persons employed in glass-works of the United States in the years I860- 61 and 1867- 68, with the percentage of increase in the lat ter year: also the earnings in glass-works of England in 1866, compared with those in the United States in 1867. OCCUPATION. Av. weekly enrn 1860- 61. ings in the U.S. 1867- 68. Percentage of increase. Earnings of 67 in gold. Earn gs in Eng land in 1866. Percentage of excess in U. S. over England. Glass-blowers.. . Phial-blowers.. . Assistants Batch-mixers.. . Master-teasers. . Assistant " ... Potmakers $14 00 12 00 6 00 8 50 12 00 6 50 11 50 $22 73 18 00 10 00 14 25 18 00 13 00 19 00 62.36 50.00 65.67 67.65 50.00 100.00 65.22 $16 23 12 86 7 14 10 18 12 86 9 28 13 57 $12 00 10 50 5 41 6 25 6 25 35 22 32 63 48 Assist t " Packers 7 00 7 50 12 00 14 50 71.43 93.33 8 57 10 35 e 25 65 Blacksmiths Carpenters Demijohn-cover s Skilled boys Engineers Laborers 13 00 8 50 8 05 3.25 10 25 5 50 17 50 14 25 14 00 6 00 15 00 9 32 42.31 67.65 75.00 84.61 46.34 69.45 12 50 10 18 10 00 4 28 10 71 6 66 7 50 7 00 53 45 Apprentices Foremen 2 50 13 50 4 25 19 50 70.00 44.44 3 03 13 93 Average increase of earnings in 1867 over 1860- 61, 63 per cent. Average excess in United States over England, 45 per cent. PAPER-MILLS. Table showing the average weekly wages paid to persons employed in paper-mills in the the per- <t,v Biwwwty biiiv uvvfwyv uivvKvy wuyvs puia* /i> pvreune vrrvpwyevt vn paper- rri tii/s r t7t United States in the respective years 1860- 61 and 1867- 68, with the percentage of increase in the latter year ; also the rates paid in Scotland in 1866, with the p centage of advance in the United States. OCCUPATION. Av. weekly earnings in the U. S. Percentage of inc. in 1867- 68. United States in 1867 (gold). Edinburgh and vicinity in 66. Percent, in adv. in U. S. o r Sc d 1860- 61. 1867- 68. Machine-tenders. $9 67 $15 67 62 $11 19 $5 50 103 Assistant " 4 50 9 00 100 6 43 Rag-cutters,mal s " females 7 17 3 67 12 17 6 00 70 60 8 69 4 29 4 66 117 Loft-men or dry s 6 17 10 83 75 7 74 4"66 93 Callender-men... 8 75 14 25 63 10 18 Finishers 7 50 12 67 69 9 05 4" 50 loi Engine-men 7 50 12 00 60 8 57 5 00 71 Helpers on Eng s 4 75 8 50 79 6 07 Bleachers 7 00 11 00 57 7 86 4 50 75 Fizers 4 50 10 25 127 7 32 4 44 65 Millwrights 10 50 19 00 81 13 57 7 00 94 Masons 10 00 20 00 100 14 29 6 25 128 Carpenters 9 50 16 50 73 11 78 6 25 88 Blacksmiths 9 00 14 00 55 10 00 5 75 74 Laborers, etc 5 92 8 92 50 6 37 3 75 69 Apprentices 4 00 6 00 50 4 29 Firemen 9 00 14 00 55 10 00 4 50 122 Average increase of wages in 1867- 68 over 1860- 61, 84 per cent. Average advance in rates paid in the United States in 1867 over Scotland in 1866, 93 per cent. THE PRESENT SITUATION. 331 IRON-ROLLING MILLS. Table showing the average weekly earnings of workmen in the iron-rolling mills of the United States in the respective years I860- 61 and 1867- 68, with the percentage of increase in the latter year / also the earnings in England in the year 1867, with a comparison of the earnings in the two countries. AVERAGE EAR WEEKLY <INOS. i i 1 i .STS I! OCCUPATION. I A E ! 5 o~ II 1* j So a |2 ffl Earnings in E in 1867. Percentage of t V. States over Puddlers $13 37 $23 17 73 30 Sli M $8 75 89 03 Puddlers Helpers 7 27 13 46 85 14 9 61 4 50 113 55 Shin cr ler8 .... 12 06 22 27 84 66 15 90 11 25 41 33 Shin^lerV Helpers 5 33 9 50 78 24 6 79 6 75 Puddle-Mill Rollers 9 77 19 02 94 68 13 58 11 25 20 71 Top and Bottom Rollers For^e Rollers 10 75 10 25 25 06 21 25 133.12 107 32 17 90 15 18 15 00 11 25 19.33 44 93 Merchant-Mill Finishers Rail-Mill Rollers 18 50 27 00 35 00 37 69 99.31 39.60 18 50 26 92 13 75 12 00 35.57 124 33 Sheet and Plate Rollers Second Rollers 12 00 8 97 20 67 16 41 72.25 82 94 14 76 11 72 20 00 6 00 dec. 26.20 inc 95 33 Third Rollers Fur e-men or Heaters H lps. Shearmen .... 8 75 7 39 9 04 13 87 11 91 14 98 58.51 61.16 65 71 9 90 8 51 10 70 4 50 6 00 6 00 120.00 41.83 78 33 6 71 14 80 120 57 10 57 6 00 76 16 Rou cr hers . 8 67 20 24 133.45 14 46 8 00 80 75 Heaters 14 S3 25 36 71 00 18 11 12 50 44 88 Foremen or Superintend 1 ts.. Machinists 14 87 12 08 24 90 18 11 67.45 49.92 17 78 13 64 12 00 7 50 48.17 81 86 Engineers ... .... 9 64 14 28 48 13 10 20 7 50 36 00 Carpenters 8 44 15 46 82 70 11 01 7 00 57 28 Blacksmiths 8 07 14 66 81.66 10 47 7 50 39 60 Laborers, etc 5 34 9 10 70 41 6 50 4 00 62 50 Teamsters 6 00 10 25 70 83 7 32 4 00 83 00 Apprentices and Boys 2 80 4 34 55.00 3 10 i 2 50 24.00 Average increase of watres in 1867 over the rates in 1860- 61, 76 per cent. Average price of puddling in the New England and Middle States in 1867, $6.63 per ton ; in 1868, $6 per ton. The prices for puddling, rolling, etc., having declined in 1868, the average increase of 1868 over 1860 is thereby reduced to about 67 per cent. But. although the cost of labor has ad vanced but 67 per cent., the real advance over 1860, in the cost of making.iron, is believed to be about 75 per cent. The average advance in the earnings of the workmen employed in the rolling-mills of the United States over those of Great Britain (both in gold) is 48.34 per cent. STEEL-WORKS. Table showing the average weekly earnings of workmen employed in the steel-works of Pittsburg, United States, in 1867- 68, as compared with those in Sheffield, England, in 1866- 67. OCCUPATION. Av. weekly earnings In Pittsbnrg, 67- 68. Av. weekly earnings in Sheffield, 66- 67. Percent, of excess in Pittsburg in 67- 68. Currency. Gold. Converter $19 50 12 00 9 00 32 50 16 25 12 00 12 00 30 00 12 00 38 00 18 00 $13 93 8 57 6 43 23 21 11 61 8 57 8 57 21 43 8 57 27 14 12 85 $10 00 5 25 4 50 11 25 8 00 5 00 5 00 12 50 6 00 18 00 7 50 3.93 3.32 1.93 11.96 3.61 3.57 3.57 8.93 2.57 9.14 5.35 Converters Laborer Common Laborers Melter Puller-out Moulders ... Cokers Forgeman and Tilter Forgeman s Heater Roller Roller Furnace-man. . . Average advance of wages in the steel-works of Pittsburg over those of Sheffield, 62.23 per ct. 332 DOES PROTECTION PROTECT? I - cic5 aft QOt-^lN 5*t-T^t-S>Jt-10t-TH* i-(O5t-O .r. CO "S" eo-* ( t-oo-i-Hio t-ooo (ooocoocccocooso 05 O 50 in CO rn O O ,oaio.5,a :j-j sll :EH -a J :^ 5 * 1 :js*-o 03 x O C QJ * 02 -ti C rS * OB W Z ~ tc ^ 35 5 -^-^ <d * sal la a 3 ItliSl 2 II THE PRESENT SITUATION. 333 HARDWARE MANUFACTORIES. Table showing the average weekly wages of persons employed in the hardware manufac tories of the United States in I860- 61 and 1867, with the percentage of increase in the latter year ; also the rates in similar establishments in Great Britain in 1866, compared with those of the United States in 1866. OCCUPATION. AVERAGE WEEKLY WAGES OB EARNINGS. 9 1 I 5 i I 11 J I S . Wasres In England In 1866. :1I P Jill Moulders .... $7 95 7 15 706 7 57 7 33 11 03 6 61 887 8 11 7 92 12 00 11 48 10 70 6 00 729 388 13 00 834 3 75 10 50 10 50 900 12 00 12 00 9 19 11 50 9 64 11 10 10 50 10 50 7 75 6 26 9 22 648 13 06 3 59 $13 18 1065 11 02 11 21 11 58 17 25 10 18 12 16 11 58 11 50 15 00 18 18 16 50 9 60 12 00 5 85 2040 11 79 6 00 15 00 15 00 14 25 1500 13 50 13 94 17 86 16 52 16 20 16 50 1800 10 50 1010 14 53 9 50 19 87 5 64 65.79 48.95 56.09 48.09 57.98 56.39 54.01 37.09 42.79 45.20 25.00 58.36 54.21 60.00 64.61 50.77 56.92 41.37 60.00 42.86 42.86 58.33 25.00 12.50 51.69 55.30 71.37 45.95 57.14 71.43 35.48 61.34 57.59 46.60 52.14 57.10 $941 7 61 7 87 8 02 827 12 32 7 27 869 827 8 21 1071 12 99 11 79 6 86 8 57 4 18 1457 8 42 4 29 10 71 10 71 10 18 10 71 964 9 96 1276 11 80 11 57 11 79 12 86 7 50 7 21 1038 6 79 14 19 4 03 $7 50 6 25 8 50 5 00 6 50 6 75 7 50 7 50 7 50 750 5 25 250 1000 6 75 850 7 00 10 00 750 5 00 10 00 3 12 25.46 28.32 45.00 45.40 33.69 22.51 9.46 42.80 73.20 57.27 30.60 67.20 45.70 47.85 50.00 68.57 15.70 38.40 35.80 41.90 22.75 Cupola-tenders Annealing-furnace Tenders Filers Japanners Helpers Grinders Polishers Machinists Engineers . . Packers 41 Females Diemakers Rollers Welders Finishers Trip-hammer Men ... Twisters . Blacksmiths Helpers Apprentices or Boys . .... Hours of labor per week 60 Average increase in rates of waees in 1867 over 1860- 61... ...percent.. 50 23 334 DOES PROTECTION PROTECT? MANUFACTORIES OF EDGE TOOLS. Table showing the average weekly earnings of persons employed in manufactories of edge tools in the United States in I860- 61 and in 1867, with the percentages of increase in the latter year; also the comparative rates in similar establishments in Sheffield, England, in 1866- 67. AVERAGE WEEKLY EARNINGS. OCCUPATION. 15 Is s 2 . 1 fi W pi 1} if Ill K If w S5 ,502 2 B o i* VI 15 CC V+ W 9 & Forgers . . $13 50 10 50 $17 50 13 50 29.63 28 57 $5 ? $8 50 5 00 47. 92 Helpers Temperers 10 50 15 00 42 86 10 71 6 50 65 Grinders 12 00 18 00 50.00 12 86 9 25 39 Polishers 10 50 14 50 38 10 10 36 6 75 53 Laborers 6 00 10 25 70 83 7 32 5 50 33 Carpenters 10 50 16 50 57.14 11 79 7 50 57. Foremen 11 00 17 25 5682 12 32 10 00 23 Apprentices or Boys 6 00 12 00 8 00 18 00 33.33 50 00 5 71 12 86 3 75 7 50 52. 71 Machinists Trip-hammer Men 15 00 21 00 40.00 15 00 10 00 50. Hours of labor per week Average increase of earnings in 1867 over 1860- 61 Average excess of earnings in the United States over England per cent. . . .do MANUFACTORIES OF AGRICULTURAL IMPLEMENTS. Table showing the average rate of wages paid to persons employed in manufactories of agricultural implements in the United States in the respective years I860- 61 and 1867- 68, with the percentage of increase in OCCTTPATION. Aver ge weekly earnings Percentage of in crease. js g i a Moulders $10 97 8 68 8 50 5 75 8 75 777 9 00 6 82 7 87 9 08 8 97 18 22 9 00 5 33 2 62 13 12 $17 29 15 69 15 57 8 90 14 61 12 23 1500 10 52 12 05 17 25 1269 31 96 15 00 9 92 4 53 23 54 57.61 80.76 80.32 54.78 66.90 57.40 66.67 54.25 53.11 89.97 41.47 75.96 66.67 86.12 72.90 79.42 Machinists Blacksmiths Blacksmiths Helpers Wood-workers Painters Plough-makers Teamsters Grinders Pattern-makers .- Watchmen Clerks Engineers Laborers and unskilled Workmen Apprentices or Boys Foremen or Overseers Hours of labor per week Average increase of wages in 1867 over 1860- 61. .percent.. 68 THE LABOR BAROMETER. 335 CHAPTER XXIV. THE LABOR BAROMETER. WITH good reason, the movement of population from one country to another has been regarded by all writers as a very conclusive in dication of the relative condition of the laboring classes in those coun tries. Other causes besides suffering in one country or hope of wealth in another do indeed prompt men to migrate, l)ut the effect of these is comparatively slight, and can readily be traced. But it is a rule of almost universal application that, when men remove in large numbers from one land to another, the great majority of them do so in the hope of bettering their condition. A famine or a revolution at home may drive them away, but the world is wide, and, if they select one country rather than another for their future abode, the great majority do so because they, expect there to earn better wages and to live more comfortably than elsewhere. Hence, whenever opponents of the sys tem of protection have endeavored to show that it renders certain workmen of this country less able than similar workmen in other countries to purchase articles of common use, the advocates of pro tection have answered, with convincing effect, " Yet the laborers do come in great numbers from the land where you say their burdens are light, to the land where you say their burdens are heavy ! " There the argument must needs end. Everybody understands that laborers do not knowingly and intentionally migrate from comfort into pov erty. When Moses would lead the children of Israel out of a griev ous bondage, he promised them not freedom, but " a land flowing with milk and honey," and from that day to this nothing less than the hope of material gain has been potent enough to uproot large bodies of men from their native soil and transplant them in other lands. The protectionist is right ; there never has been a time, since the second war with England, when the general condition of the labor ing classes in this country was not better than their condition in the older countries of Europe. But that is merely an adroit evasion of the real question ; granting that the laborer at all times, and under all forms of duty and taxation, has been on the whole in better con dition here than in older countries, the real question is, whether his condition has been better here under one system of taxation than under another. The great richness of this land, its vast resources still undeveloped, 336 DOES PROTECTION PROTECT? and the enterprise, energy, and rapidity of growth, which free insti tutions favor, have made the demand for labor greater here, at all times, than in any country of Europe. But at what times has that demand been greatest ? Our natural and political advantages have rendered this country, at all times, more attractive to the industrious laborer than other new countries, but under what system has that superiority over other new countries been greatest ? If under pro tective duties a larger number of immigrants have come to this coun try from Europe, and a larger proportion to this as compared with other new countries than under non-protective duties, then it must be frankly admitted that the condition of the laborer on the whole has been improved by the system of protection. Does it not also follow that, if the contrary is true, the condition of the laborer on the whole has been improved by low duties and non-protective tariffs ? Realizing the logical necessity of meeting this test in some way, Mr. Henry C. Carey has invented a way of his own. In language not at all ambiguous, he says : " The effects of the protective tariff of 1829 exhibited themselves in the arrival" of 359,000 persons in the six years 1832- 7 inclusive, " against 140,000 for the ten British free-trade and semi-protective years by which that tariff had been pre ceded." It is difficult to notice such language without doubting the honesty of the writer. It is hard to suppose that Mr. Carey really believes that the effect of the tariff of 1828 upon immigration did not begin until the very year in which that tariff was repealed ! One would suppose that his high reputation must have restrained him from the intentional misrepresentations so common in discussions of this question. Yet it seems hardly possible that it was a mere oversight in him to style the ten years, 1819- 28 inclusive, "British free-trade and semi-protective years." The characteristics of the tariffs of 1816 and 1818 have been mentioned, and readers will find it not easy to believe that this language was used except in the hope that people would neither know nor take the trouble to ascertain what sort of tariff was really then in force. In its purpose and its essential fea tures, the tariff of 1816 was as strictly a protective measure as any ever adopted ; it was proposed, advocated, and carried by the then friends of the protective policy ; it was the first act in our history to apply the minimum price to foreign goods the very feature of all others which has since been held by protectionists the most effective, and by non-protectionists the most odious ; it was shaped from be ginning to end with intent to discriminate between industries, fa voring some and not others. The minimum on cottons was in effect THE LABOR BAROMETER. 337 absolutely prohibitory as to the coarser qualities. On rolled iron the duty was $1.50 per cwt., or $30 a ton, then " equal to 85 per cent, on its cost." (Bishop s "History of Manufactures," vol. ii., p. 228.) The duty on anchors and bolt iron was the same ; on hammered iron 45 cents, and on sheet, rod, and hoop iron, $2.50 per cwt. Yet this is the lowest tariff which was in force in all those years which Henry C. Carey, a writer of reputation, ventures to call " British free-trade years " for he elsewhere calls the tariff of 1824 " semi-protective." Can it be that he does not comprehend the difference between " Brit ish free trade " and a tariff absolutely prohibitory on coarse cottons, and of 85 per cent, on British iron ? It is a habit of that gentleman to accuse others of intentional suppression or misrepresentation of facts. But he may well consider whether one who stands in such need of charitable judgment had not better set the example of ascribing errors of statement to ignorance. In 1818 still higher duties were desired by the iron-makers, and granted. The duty on pig-iron was fixed at 50 cents per cwt., or $10 per ton, actually higher than it is to-day. Yet this is what Mr. Carey, a writer of reputation, ventures to call " British free-trade ! " If we turn to the figures given by Mr. Carey, we are forced to remark that they correspond neither with the records of the State Department, with the statistics given in the census of 1860, nor with reports from newspaper authority, but seem to have been evolved from his inner consciousness. Thus for 1832 he gives 45,000 as the total immigration ; the census volume says 53,179 ; the State Department returns, quoted by Tucker, say 34,970, and tables of actual arrivals published by the New- York Times show that 48,589 persons arrived at that port alone. For 1835 he gives 53,000; the census table says 45,374; the State Department re turns, quoted by Tucker, say 45,444 ; but Mr. Carey was apparently under the necessity of fitting the figures to his theory that the tariff caused " an almost regular rise." Also, to preserve regularity, he gives for 1836 the figures 62,000, while the census table says 76,242, the State Department returns 76,923, and the Times table shows that there were 60,541 arrivals at New York alone. It would seem that " regularity " had been preserved at the expense of exactness. And, again, comfortably assuming that the tariff ceased to protect in 1837, carefully suppressing mention of the currency panic of that year, asserting, contrary to facts by himself accidentally recorded, that " British free-trade prevented increase of mills and furnaces " after that year, he says : " The movement (of immigration) was irreg- 338 DOES PROTECTION PROTECT? ular, but the general result to and including 1844 showed a diminu tion, the average having been but 75,000." Now, " an average of 75,000 " is not a diminution, but is larger than any of the previous years by him quoted except one. And the records, which he is careful not to give, show that there was an increase to 84,066 in 1840, and to 104,565 in 1842. It will astonish every reader to learn that this same Henry C. Carey, even while accusing Mr. Wells of suppressing facts, himself utterly suppresses mention of the failure of crops and the great famine in Europe in the years 1846 and 1847, and ascribes all the immigration which followed that famine to the tariff of 1842, which expired in 1846 ! Yet this is exactly what he does. That his language may be observed, we quote (Carey to Wells, page 46) : Counter-news arriving in 1844, and men learning how great, under the protec tive system of 1842, had here become the demand for labor, and how liberal its re ward, we find the arrivals now running up from the 74,000 of 1844 to 102,000 in 1845, to 147,000 hi 1846, 240,000 hi 1847, 229,000 in 1848, and 300,000 hi 1849, giving a total of 1,018,000 in the five years which followed the commencement of the movement, against one of less than 400,000 by which that movement had been preceded, giving a gain under protection of more than 600,000. The italics are our own, and it is only necessary to remark that this gain did not take place " under protection," but under the non- protective tariff of 1846. But far more astonishing is the audacity of one who, professing to state facts, utterly suppresses all mention of the European famine, and ascribes this movement to the protective system which had already expired ! Had this been done by an ob scure or possibly ill-informed writer, it would have been easy to suppose that he was ignorant of the truth. Readers must judge whether such a misrepresentation as this, coming from a writer who surely cannot have been ignorant of the truth, does not destroy all confidence in the correctness of his statements. It is only necessary to add that, in discussing the movement since 1860, Mr. Carey ignores the effect of the civil war, first de terring immigration, and afterward, by creating a great scarcity of labor, increasing immigration. Turning, now, from the figures presented by that writer, to the facts, we adopt as a basis the table given in the census report of 1860, which corresponds in the main with other reliable records , and extends further than . any other to us accessible. Tucker, who appears to have discussed this subject with care and with excellent sources of information, maintains that the returns of the State De- THE LABOR BAROMETER. 339 partment were incorrect for the years 1831 and 1832, and gives 107,104 as the true immigration for those years. At the same tune he points out the fact that a considerable proportion not less than 10 per cent. of the immigrants of that period merely passed through tin s country on their way to Canada. This fact alone shows how little benefit sixteen years of protection had conferred, since they had not rendered this country so much more attractive than Canada as to prevent immigrants going directly thither from New York. But, in the main, the census table is as reliable and correct as any that can now be obtained or constructed. ALIEN PASSENGERS ARRIVING IN THE UNITED STATES FROM FOREIGN COUNTRIES FROM 1820 TO 1860, INCLUSIVE. From the Census Report of 1860. Tear ending Sept. 30, 1820. 8,385 Year ending Dec. 31, 1841 . 80,289 1821. 9,127 1842. 104.565 1822. 1823. 6,911 6,354 Three-quarters ending Sept. 30, 1843. Year ending Sept. 30, 1844. 52,496 78,615 1824. 7,912 1845. 114,371 1825. 10,199 1846. 154,416 1826. 10,837 1847. 234,968 1827. 18,875 1848. 2-26.527 1828. 27,382 1849. 297,024 1829. 22,520 1850. 310,004 1830. 1831. 23,322 22,633 Quarter ending Dec. 31, 1850. Year ending Dec. 31, 1851 . 59,976 379,466 1832. 53.179 1852. 371,603 Quarter ending Dec. 31 Year ending Dec. 31 , 1832. ,1833. 7.303 58.640 1853. 1854. 368.645 427,838 1834. 65,365 18.53. 200,877 1&35. 45,374 ia56. 200,436 1836. 76,242 1857. 251.306 1837. 79,340 1858. 123,126 1838. 38,914 1859.. 121,282 1839. 68,069 I860.. 153,640 1840. 84,066 Examination of these statistics will satisfy every reader that any change in the relative condition of the laboring class, on either side of the ocean, affects immigration instantly, and not, as Mr. Carey and his followers assert, only after the lapse of several years. The first considerable change was caused by the general distress and breaking of the banks in England, which occurred in 1825, and in that very year and not five years afterward the immigration in creased more than one-quarter, and rose to 10,199. In 1829 there was general distress here, especially among those employed in manufacturing, and in that very year and not five years afterward the immigration decreased from 27,382 to 22,520. Just before the close of the fiscal year 1837 the banks suspended, and the great panic occurred. In the year 1838 within eighteen months, and not some years afterward immigration was reduced more than one- half, from 79,340 in 1837 to 38,914 in 1838. Yet this was in spite 340 DOES PROTECTION PROTECT? of the fact that the English crops of 1837 were not large, and those of 1838 decidedly bad. Again, the crops in England and Ireland were inferior in 1845, and in 1846, the price of wheat rising rapidly, and in 1847 the general failure of crops, and especially of the potato-crop, produced a famine. In 1845, in precise corre spondence, immigration began to increase largely; in 1846 the number of immigrants was 154,416, and in 1847 the very year of the famine the number was 234,968. This was more than double the immigration for any previous year except 1846. And, again, the panic of 1857 was instantly followed by a falling off of more than half in immigration, for the number for the year 1857 was 251,306, and the number for 1858 was 123,126. Finally, when the civil war interrupted business here, in 1861, the effect was instan taneous ; immigration fell from 153,640 in 1860 to 91,920 in 1861. These facts are certainly conclusive. In view of them, the theory, that the change wrought by a tariff in the condition of labor does not affect the movement of immigration until after that tariff has ceased to exist, must be dismissed as adapted only to the needs of those who have to get around very inconvenient facts, and set them selves to make " the worse appear the better reason." If further proof were needed of the absurdity of Mr. Carey s statement, above quoted, it might be found in the fact that immigration from Great Britain to Canada and Australia, and other countries besides the United States, increased in the same years in which, he asserts, immigration was drawn this way by the protective tariff. For, in 1844, the emigration from Great Britain to other places besides the United States was 27,026 ; in 1845 it was 34,963 ; in 1846 it was 47,612, and in 1847 it was 116,116, and this increase was more rapid than that from Great Britain to this country, since, in 1844, about 62 per cent, of all emigrants from Great Britain came to the United States, while in 1847 only 55 per cent, of emigrants from Great Britain came to the United States. It is barely possible that a man may believe that a tariff in this country had some effect upon immi gration hither after it had ceased to exist ; but not even Mr. Carey will pretend that a tariff in the United States, after it had ceased to exist, attracted immigration from Great Britain to Canada and Aus tralia ! The movement of immigration, it has been proved, is a faithful measure of the relative condition of labor in this as compared with other countries, which records instantly every material change on either side of the ocean, and is as sensitive as a barometer or steam- THE LABOR BAROMETER. 341 gauge. Whenever the demand for labor rises here or falls in Europe, immigration increases, and prostration of industry here checks it instantly. Famines or revolutions in the Old World have been the main cause of migration ; men are moved to emigrate never so powerfully by rumors of prosperity elsewhere, as by the sight of the gaunt wolf of famine, or the grim demon of war, at their own doors. But it must also be observed that, under favoring circum stances, immigration causes increased immigration. People in the old country are induced to migrate hither, in a great degree, by the personal solicitation or direct aid of friends already here. Every immigrant becomes an active agent to induce his countrymen to follow him, and often remits the necessary funds, which the pinched laborer in Europe could obtain only after years of delay, if ever. Thus every great event which immediately produces a large im migration, causes also, after the lapse of a year or two, a second wave larger than the first. Sixty-eight thousand immigrants who arrived here, driven by English disaster, in 1827- 29, began by the years 1831- 32 to attract their friends in large numbers ; the 234,968 immigrants who came here in 1847, the year of the Irish famine, attracted so many that the number amounted to 297,024 in 1849, and 310,004 in 1850. With these general principles in mind, let us see whether tariffs here have materially affected the move ment. The protective period of 1824- 28 witnessed the first considerable movement of immigration to this country, and there is no room to doubt that the rapid increase at that time was caused by the great industrial and financial disorders, to which McCulloch thus refers (" Commercial Dictionary," vol. i., p. 101) : " The destruction of the country banks has upon three different occasions, in 1792, 1814r- 16, and in 1825 and 1826, produced an extent of bankruptcy and misery that has never perhaps been equalled, except by the breaking up of the Mississippi scheme in France." He shows that in 1825 thirty- seven banks broke, and forty-three in 1826. Just at this time the first strong current of immigration began to set toward this country, and immigration rose to 27,382 in 1828, but was then checked by the disaster here in the next year, and in 1830. Nor did it revive until 1832, the very year in which the protective tariff was repealed. The movement for these eight years of protection, ending September 30, 1832, was in the aggregate 188,947, or an average of 23,818 yearly. It is worthy of note that the large increase in 1832, the last year of this period, is partly due to the failure of revolutionary 342 DOES PKOTECTION PROTECT? movements in Germany, and the persecution feared or suffered, which drove not less than ten thousand Germans to this country. The non-protective period which followed witnessed no con siderable change in immigration caused by foreign events, though the exodus from Germany increased, in consequence of political oppression, to 23,035 in 1837. But the entire immigration increased much more largely, and though the table plainly shows the great reduction caused by the currency explosion in 1838, the aggregate for the eight years 1835- 42 under low duties was 576,859, or an average of 72,107 yearly, an increase of nearly 200 per cent. Yet these were the years of reduced duties, and non-protection, during which, it has been asserted, the condition of our laborers was ex ceedingly bad. The barometer indicates that it was at least 100 per cent, better than that of the protective period which preceded. The protective tariff which went into effect with the year 1843 was coincident with a decided falling off of immigration from 104,565 in 1842 to 52,496 for nine months of 1843, equal to about 70,000 for a year, and to 78,615 in the year 1844. The migration caused by disasters in England raised the aggregate for the whole period, 1843- 46, inclusive, to 399,898, or an average of 99,974 a year. But the aggregate for the four years preceding, 1839-1842, was 332,989, and the average 83,247 yearly ; so that, with the English short crops to aid it, the protective tariff only attracted to this coun try an average of 16,727 more than had come hither during the four years of hard times, bank suspension, and commercial disorder. It is not strange that the advocates of that tariff seek to make it ap pear that its blessings were realized mainly after it had been repealed ! Contrasting, with this protective period of four years, the non- protective period 1847- 50 inclusive, we find that in the protective period the aggregate number of immigrants was 399,898, and in the non-protective period the aggregate was 1,188,499, and the yearly average 282,124, an increase of 282 per cent. If any opponent of protection could stoop to imitate Mr. Carey, in suppressing all men tion of the Irish famine, he might make an argument at least as effective as the one already quoted. But, in fairness, the greater part of this immigration must be ascribed to causes in Europe. Following the Irish famine, came the great migration caused by the failure of revolutionary movements in Germany, in 1849 and 1850. But, with full allowance for these causes of increase, there is still evidence that the condition of laborers here was such as to offer THE LABOR BAROMETER. 343 greater inducements to immigrants than had been offered during the four years preceding. It has been observed that the proportion of immigrants from Great Britain who came to this country was 62 per cent, in 1844, and only 55 per cent, in 1847. But in the next year, 1848, it rose to 75 per cent. ; in 1849 it was 73 per cent. ; and in 1850 and 1851 it was 80 per cent. These facts surely have great significance. Of persons driven from that country to seek homes in a new world, it appears that 50 per cent, cnose this country in 1843, and 62 per cent, in 1844 and 1845, 63 per cent, in 1846, and only 55 per cent, in 1847. These years mark the relative condition of labor in this country during a period of protection for the migration of 1847 was, of course, mainly influenced in selection by what was known prior to that year. But, in 1848- 51, the proportion of those who chose this country suddenly rose to 80 per cent. Of British emi grants to North America during the years 1843- 46, under protec tion, 121,684 went to Canada, and 212,772 to this country, the proportion being 60 to 100. But in 1848- 51 that proportion fell to 16 to 100. It may naturally be supposed that this difference was due to the discovery of gold in California, and a part of it doubtless was. But it must be remembered that a very small por tion of British immigrants went to the mines ; the great body of them came to find labor, either on farms, or in cities, or in mechani cal employments, and they found it readily. Nor can it be supposed that the same cause continued to affect immigration after the mining excitement died out, but the immigration to Canada did not recover its proportion to that which chose this country during the whole of the period of low duties which followed, and was only 16 to 100 in 1848, 17 to 100 in 1855, 15 to 100 in 1856, and 11 to 100 in 1860. Thus, during this long period of non-interference with natural laws, the proportion of emigrants from Great Britain who chose this country as their home rather than Canada steadily increased, so that, where 60 had chosen Canada under the protective tariff, only 11 chose that country in 1860. It is not possible to ascribe the whole of this change to the discovery of gold in 1848. It simply corre sponds with the fact, already well established, that, during the decade 1850- GO, labor of all kinds in this country was improving in con dition, and the demand for it was increasing. It only remains to show that the great decrease in immigration in 1855 was not owing to any unfavorable change in this country, but to improvement elsewhere. The immigration to this country fell 344 DOES PROTECTION PROTECT? from 427,000 to 200,000 in a single year ; but, in the same year, the British immigration to Canada also fell from 43,000 to 18,000 ; and the migration to Australia from 83,000 to 52,000. The cause, whether it was the increased demand for labor arising from the Crimean War, or some other, was evidently not a change in this country, and, as has been shown, it did -not prevent a still larger share of immigrants choosing this country in preference to Canada. Since 1860, the movement has been retarded and afterward ac celerated by the war, which created an enormous demand for labor in the years 1863, 1864, and 1865, and it has since been greatly increased by changes abroad. The crops in England have repeatedly proved insufficient. Political disturbances in Ireland have driven a throng of refugees to this country. The general prostration of manufac tures in England has had a material effect. At the same time, the war involving Prussia, Austria, and Italy, and the great apprehension of a general strife, have led thousands to leave Europe ; the annexa tion of new provinces to Prussia in 1866, with the consequent prospect of military service, drove away great numbers, and the opening of States formerly held by slave labor, and yet peculiarly rich in natural resources, like Virginia, Tennessee, and Missouri, has given an additional attraction to foreign labor. Nor must it be for gotten that our depreciated currency carries with its many evils one blessing it gives our laborers wages nominally higher than are paid anywhere else, and in Europe, where the coin value of our dollar is known, while its depreciation is not fully understood, these high wages seem peculiarly attractive. Nevertheless, with all these potent causes working together to increase immigration, the number of arrivals during the four years 1865- 68 was only 1,162,247, against 1,128,499 in the four years 1847- 50, and 1,546,547 in the four years 1851- 54. With a combination of causes never existing before to drive or attract migration to this country, we are receiving less accessions than we did fifteen years ago under low duties, and scarcely more than we did nineteen years ago under the same non- protective tariff. Any inference from this fact alone must be conjectural. For the weight of the influences mentioned, other than the present condition of labor here, cannot be measured, except in conjecture. But this, at least, is certain, that the present immigration does not contradict the teaching of the whole history prior to the war. And so fatal is that record to the theories of protectionists, that they have been forced to the theory that the magical prosperity of the laborer here, CONSUMPTION. 345 under protective tariffs, begins to have its effect upon immigration when those tariffs are repealed, while the exceedingly wretched con dition of labor here, in times of low duties, does not begin to have its effect upon immigration until protection has been restored ! "Who so excuses, accuses." CHAPTER XXY. CONSUMPTION. IT doubtless has not escaped observation that certain articles, known to bear heavy duty, have not been at all times or corre spondingly enhanced in price. Tea, coffee, and sugar, are the most important of these, and it has been noticed, in England as well as here, that the prices of these articles have been comparatively little affected by changes of duty. Giving the statistics which prove that tea in England has risen in price as duties have been removed, Mr. Wells remarks, " There is practically but one producing country, and the trade, therefore, partakes of the features of a monopoly." Per haps the phenomenon may be more fully explained if we also con sider that countries which produce a large surplus of any article, and are compelled to rely mainly upon the export of that for their foreign exchanges, are placed in an unnatural dependence upon their chief consumers. Any refusal by such a consumer to purchase their prod ucts, or to purchase of them except at a lower price, throws so large a surplus of the product upon the markets that the price is reduced. We were so situated with regard to cotton before the war, and China is in the same way dependent upon the chief consumers of her tea, Brazil of her coffee, and the West Indies of sugar. If Eng land declined to buy freely of our cotton, it fell rapidly in price. In like manner, either England or the United States consumes so largely of sugar, coffee, and tea, that either can to some extent force the producer to pay any duty which threatens to check their consumption. Whatever cause we may assign, it is the fact that the prices of these three articles are not affected to the full amount of duties, but not infrequently fall in spite of an increased, or rise in spite of a decreased duty. Thus, in spite of the reduction of the duty on sugar from 3 to 2 cents in 1832, the price, which had been 6 cents in 1831, and 6J in 1832, rose to 7J in 1833, and to 7 in 1834. But, under the same duty, the price fell to 4} in 1842, and rose to 346 DOES PROTECTION PROTECT? 6f again in 1846 ; and, though the change of duty to 30 per cent, brought down the price at first to 4 cents, it rose again, and, in spite of a still further reduction of duty to 24 per cent., stood steadily at 6 cents in 1858 and 1859, and at 5-J in 1860. Similar facts may be observed in the table of the price of coffee. The removal of a duty of 5 cents a pound in 1830- 32 only increased the price from 11J- to 12 cents. The price of tea was more affected, yet it is observed by economists that this article is usually less affected in price than almost any other by changes of duty. It happens that coffee and tea, two articles which are almost uni versally consumed, were absolutely free of duty if imported in American ships from 1832 to 1862, a period of thirty years. Nor can it be said that the duties prior to 1832 had affected the price of these articles nearly as much as other duties had affected the prices of other articles of general use. Of all articles, therefore, these are the very best to test the general condition of the people at different periods. To these we may add sugar, for the duty on that article has been very slightly changed. In 1816, the duty on the quality most largely imported was fixed at 3 cents a pound ; in 1832 it was changed to 2J cents, and the same rate was preserved by the tariff of 1842 ; in 1846 it was changed to 30 per cent. a reduction of less than one cent an4 in 1857 to 24 per cent. ; a change very slight indeed. These three articles are consumed, in different quantities, indeed, by different classes and persons, but so generally that the consumption affords, perhaps, the best test attainable of the progress of the people as a whole toward comfort and prosperity. In pro portion as the country has thriven, the increase of consumption of these articles has been accelerated, and, when the country has suf fered, the consumption has either increased more slowly, or has been temporarily reduced. Thus the panic of 1837 reduced the consump tion of tea from .915 thousandths of a pound per capita to .467 ; the consumption of coffee from 6.1 pounds in 1835, and 5 pounds in 1836, to 4.8 in 1837; and the "hard times" of 1843 again reduced it to 4.6 per capita. In the same year the consumption of sugar fell to 11.29 pounds, though it had averaged over 13 pounds. In like manner the panic of 1857 cut down the consumption of sugar from 30.62 pounds to 26.10 pounds, and of coffee from about 8 pounds to 6 pounds ; and the prostration of 1861 reduced the consumption of sugar from 35.51 pounds to 28.45 pounds ; of coffee from 7.3 pounds to 5.8 pounds, and of tea from over one pound per capita to .79 hundredths of a pound. CONSUMPTION. 347 Attention has been called to these details, because in England, and in other countries where extreme poverty and suffering exist, it has been found that the poor consume tea largely in place of more solid food. But no considerable class of persons in this country have ever been reduced to that point, nor is there reason to believe that the actual lack of bread and meat has at any time driven any appre ciable proportion of the population to seek a substitute in the articles named. These articles have therefore been, in this country and in all times, not absolute necessities, but comforts, if not in some sense luxuries, and accordingly we find that in years of general prostration the consumption of them is suddenly diminished, while in times of great prosperity the consumption of these articles is very rapidly increased. No man of either party will deny that the years 1853- 54 were years of extraordinary prosperity. The consumption of sugar, only 23.90 pounds per capita in 1851, increased to .over 33 pounds per capita in the years 1853 and 1854. It cannot, indeed, be supposed that the exact consumption for any year is known ; in fact, it is stated, by men most familiar with the tea-trade, that not less than thirty million pounds were at one time on hand in this country, and any estimate based upon imports and exports only will be unreliable as to single years. But, for periods embracing several years, the consumption cannot vary materially from estimates based upon the imports, ex ports, known stock on hand as reported by the most competent authorities, and the domestic product in the case of sugar. From these data the following tables have been prepared, which show the amount of coffee, tea, and sugar, placed upon the market for con sumption each year, the average prices each year in New York, and the rates of duty. Opposite the quantity entered as " consumed " each year is also entered the proportion of that quantity to the popu lation in that year, but it must not be supposed that these figures represent with exactness the actual consumption in different years taken singly, for the reason just stated. Thus it will be observed, in tea and coffee especially, that unusually large imports in any year are often followed by imports unusually small, when the actual con sumption was an average between the two. From 1850 onward, as the commissioner of the revenue has observed upon authority of the leading tea-dealers in this country, the amount imported was largely in excess of the actual consumption, so that the stock on hand was swollen to about thirty million pounds, and afterward, for several years, ending in 1860 and 1861, the stock was steadily reduced, the imports being less than the consumption. The average yearly con- 24 348 DOES PROTECTION PROTECT? sumption for the whole decade, 1851 to 1860 inclusive, is therefore given, with the rate per capita. In other columns are presented the results for periods of several years each, during which, it is believed, the actual consumption cannot have varied to any appreciable ex tent from the statements thus prepared. CONSUMPTION OF SUGAR. YEAR. Duty. Taken for Consumption. Per. Cap. Consumption per Cap In Periods of Years. Average Price. 1821.. . 3 cents "$ R>. u u (t u u u (t u (( (1 2 cents ^ fi>. (C ( u u u (( (( (( (( u (( (( 30 ^ cent. ct (t (( u (( 24 ^ cent, u u i< 2 cents $ ft>. 3 cents $ ft,, u (1 (( u (( 59,512,835 88,305,670 60,789,210 94,379,764 71,771,479 84,902,955 76,701,629 56,985,951 63,307,294 86,483,046 109,014,654 66,451,288 97,688,132 115,389,855 126,036,230 191,426,115 161,092,811 201,624,719 241,262,173 194,764,937 232,103,397 243,274,422 209.056,749 278^264,053 298,728,920 287,059,764 376,655,814 474,637,773 453,456,333 445,474,361 568,406,575 706,086,000 835,495,360 863,067,520 846,164,480 848,422,400 743,825,600 965,780,480 1,072,370,880 1,040,867,520 922,096,000 1,082,379,200 762,720,000 628,320,000 922,880,000 990,110,209 875,362,142 1,145,444,163 6. 8.57 5.73 8.66 6.52 7.38 6.44 4.67 5.05 6.75 8.19 4.88 6.92 7.95 8.56 12.42 10.19 12.44 14.49 11.45 13.26 13.51 11.29 14.64 15.30 14.35 18.32 21.65 20.60 19.33 23.90 28.70 33.02 33.02 31.45 30.62 26.10 32.85 35.51 33.58 28.45 46.03 31.25 23.23 30.76 27.89 23.98 30.54 4 years. 7.24 4 years. 6.25 4 years. 6.22 5 years. 9.21 5 years. 13.03 . 4 years. 13.34 }4 years. 19.47 I 4 years. 29.66 I 4 years, j 30.25 I 2 years. ) 34.54 . 5 years. 31.95 K 3 years. | 27.47 IH H H iif H 8{ 8* H J 6 9- ft 9 6f 6f 6f 6| 6 4< Bi: 6J 1822 1823.. . 1824 1825 1826 1827 1828 . 1829 1830. 1831 1832.. .. 1833 1834 1835.. 1836 1837.. 1838 1839 1840 1841 1842 1843 1844. 1845 6} 6j: H 4 5 5 4; 41- 4;- Bj- fi- 84- 6 6 6 7 1846. 1847 1848... 1849 1850 1851 1852 1853.. 1854 1855 1856 1857 1858.. 1859 1860. 1861 1862.. 1863. 1864.... 1865.. 1866 1867 1868 CONSUMPTION. 349 CONSUMPTION OP COFFEE. YEAK. Duty. Consumed (Ibs.). Per Capita. Consumption per Cap., yearly, in Periods. Pric (Rio] 1821 . . 5 cents ^ K>. 11,886,063 1.2 W 1822 1823 u (( 18,515,271 16,437,045 1.8 1.5 - 1.60 255 W\ 18^4 20,797,"069 1.9 18^ 1825 1826 u ti 20,678,062 25,734,784 1.8 2.2 17 15 1827 u 28,354,197 2.4 2.40 14 1 18 9 8 < 39,156,733 3.2 l^a 1829 u 33,049,695 2.6 l?, a 1830 (( 38,363,687 2.9 11^ 1831 Free. 75,700,757 5.7 > 3.45 II 1 1832 .. 36,471,241 2.6 19, 1 1833 75,057,906 5.3 12 a 1834 . . 44,346,505 3.0 in 1835 u 91,763,002 6.1 L 4.84 113 1836 .. u 77,647,300 5. 111 1837 u 76,044,071 4.8 103 1838 (( 82,872,633 5.1 \ 101 1839 u 99,872,517 6. 11 1840 . . . (1 86,297,761 5.1 I 5.66 10 1841 u 109,200,247 6.2 10 1842 . . u 107,383,567 6.9 fl 1843 (( 85,916,666 4.6 1844 .. u 149,711,820 7.8 6i 1845 u 94,358,939 4.8 5.80 <H 1846... (( 124,336,054 6. 7 1847 (( 150,332,992 7.3 7 1848 u 143,561,050 6.7 6 1849 (( 150,954,271 6.9 6.62 6^ 1850 u 129,699,396 5.6 i4 1851 . u 148,920,491 6.2 9 1852 (I 204,991,595 8.3 8 1853 1854 u (( 175,687,790 179,481,083 6.9 6.8 7.05 8f 10* 1855 . 210,378,287 7.8 101 1856 tc 218,225,490 7.9 10$ 1857 . (( 172,565,934 6. 7.55 u 1858 u 251,255,099 8.5 10$ 1859 . (( 222,610,300 7.3 iH I860 Ci 177,111,923 5.6 6.45 13* 1861 11 187,045,786 5.8 133 1862 5 cents ^ 5>. 88,989,911 3.8 22 1863 K 79,719,641 3.2 }- 4.20 1864 u 109,086,703 4. 1865 128,146,356 4.2 1866 159,918,881 4.5 ) 1867... . u 203,506,671 5.6 J. 5.33 1868 cc 223,200,937 5.9 ) 350 DOES PROTECTION PROTECT? TEA. FISCAL TEAKS. Quantity consumed. Consumption per Capita. Price, Average, Y. Hyson. Per Capita, yearly, by Periods. Av. Price. 1821 4,586,223 .463 .93 1822 5,305,588 .515 .90 1823 6,474,934 .610 .92 .575 .94 1824 7,771,619 .713 1.02 1825 7 173 740 640 1 00 1826 8,482,483 .737 .87 1827 3,070,885 .258 .964 .538 .94 1828 . .. 6,289,581 516 .934- 1829 1830 5,602,795 6,873,091 .448 536 .92 .884 1831 4 656 681 350 98 .491 .91 1832 8,627,144 .630 .88 1833. . 12 927 043 916 75 1834 13,193,553 .910 .61 1835 12,331,638 827 .58 .901 .64 1836 14 484 784 940 634 1837 14,465,722 915 .UWJ .614 1838 . . 11 978 744 740 58 1839 7,748,028 .467 .63 1840 . 16 860 784 990 68 .712 65 1841 10,772,087 .615 .74 1842 13,482 645 749 64 1843 12,785,748 .691 .60 1 1844 13,054,327 686 60 1845... 17,162,550 .858 .60 V .759 .59 1846 16,891,020 804 58 ! 1847 . .. 14 221 910 711 52 ^ 1848 20,876,861 est. .975 484 1849 . . . 20,876,861 952 474 }- .969 .49 1850 28 752 817 1 239 494 | 1851 *vj[ 51 1852 Average for 494 1853 these years, .ttf-j 45 1854 . .. 494. 1855 j- 27,363,965 1 019 .*- 37 1856 374 i 1.019 .38 1857 .0 <-f 42 1858 354 1859 .... J 23 1860 26 331 193 25 1861 25 520 000 79 43 1862 27,468 600 1 17 614 1863 , 26 906 365 1 10 .Ul-J 564 001 1864 23,137 546 85 1865 29 853 433 995 1866 41 517 286 1 169 \ 1867 39,379 574 1 079 / V 1 Ofifi 1868 35 634 966 950 ... \ CONSUMPTION. 351 i From 1821 to 1824 inclusive, when the duty on sugar was 3 cents for the quality usually imported, the yearly consumption aver aged 7.24 pounds per capita. On tea the duty was 40 cents a pound for young hyson, and averaged from 30 to 34 cents on all teas, and the consumption, for the years 1821 to 1824 inclusive, was .575 thousandths of a pound per capita. On coffee the duty was 5 cents a pound, and the consumption was 1.60 pounds per capita. These duties remained absolutely unchanged until 1831, when the rate on coffee was reduced to 2 cents. With the exception of the last year, 1832, the duties on these three articles were not altered during the three pe riods of increased protection. If the general prosperity was great, if the condition of the laboring classes was really and materially improved, it is reasonable to infer that the consumption of these articles must have rapidly increased. Yet, excepting coffee, the consumption actually diminished ! In the second protective period, 1825- 28 inclusive, the consumption of tea was .538 per capita, and the consumption of sugar only 6.25 per capita. In the third protec tive period, that of the highest duties, 1829- 32 inclusive, the con sumption of tea was reduced to .491 per capita, notwithstanding a reduction of the price ; and the consumption of sugar fell 6.22 per capita, notwithstanding a reduction in the price. Can it be believed that the great mass of the people were enjoying an increasing pros perity, at a time when the consumption of these articles was thus reduced ? That the reduction of price of tea and sugar would naturally have caused an increased consumption of those articles, it is fair to infer. If the condition of the laboring people had remained the same, it is surely reasonable to suppose that those who were able to spend in a given time one dollar for sugar or tea in the first pe riod would have been disposed to spend at least an equal sum in the second and third, and an equal sum would have bought a larger quantity. But the fact is, that the average amount expended per capita was reduced. The price of sugar in the first period, 1821- 24, averaged 10 cents ; * in the second, 1825- 28, only 8J- cents ; and in the third, 1829- 32, only 6f cents. The sum actually expended for sugar per capita in the first period was 72.4 cents yearly ; in the second period it was 53. 12 cents yearly; and in the third 41.98 cents yearly, so that the sum of money expended on the average yearly per capita for sugar was reduced from 72 cents in the first period, of low duties, to 42 cents in the third period, of extreme protection ! * Wholesale New-York prices are used for comparison in all these estimates. 352 DOES PROTECTION PROTECT? Again, the average price of tea, taking young hyson, the most largely-imported variety, as the standard, in the first period, was 94 cents ; in the second, 94 cents ; and in the third, 91 cents. For tea, therefore, the average yearly expenditure per capita in the first period, of moderate duties, was 54.05 cents ; in the second, of in creased duties, it was 50.57 cents ; and in the third, of highest duties, it was only 44.68 cents. It must be remembered that no change of duty on these articles affected either their price or the consumption. Nor did a change of duty cause the great fall in the price of coffee, which was reduced from an average of 23 cents in the first period, to 14f cents in the second, and 12 cents in the third. This very large reduction in the price caused an increase of consumption. The consumption in the first period, of moderate duties, was 1.60 pounds per capita; in the second, of higher duties, 2.40 per capita ; and in the third, of highest duties, 3.45 pounds per capita. Thus the sum actually expended yearly per capita in the first period was 37.98 cents ; in the second, 35.40 cents ; and in the third, 41.40 cents. In view of the enormous increase of consumption which immediately followed the removal of protection, this increase in the consumption of coffee, without any material increase in the sum of money expended per capita under protection, does not indicate an improved condition of the laboring classes. It cannot be claimed that the use of any other articles superseded these three. Nor can it be claimed that their increased cost checked consumption. There was no change in the duty on these articles from 1821 to 1831, and during the last year, 1832, the duty on coffee only was changed. Yet the sum yearly expended per capita for these three articles of comfort and almost universal use was in the first period, 1821- 24, about $1.64 ; in the second period, 1825- 28, it was $1.39 ; and in the third period, of extreme protection, it was only $1.28. Is it possible to avoid the conclusion that a large share of the people restricted their use of these articles because their con dition was such as to induce greater economy ? From 1832 onward, coffee and tea imported in American vessels were absolutely free until the year 1862. At the same time, as has been stated, the duty on sugar was but slightly changed, and its price but very slightly varied. The circumstances, therefore, render the consumption of these articles, separately and in the aggregate, a fair test of the general condition of the people at different periods. For convenience we may divide the thirty years into certain periods : CONSUMPTION. 353 first, 1833- 37 inclusive, under reduced duties, period of currency expansion ; second, 1838- 42 inclusive, under very low duties, period of currency contraction; third, 1843- 46 inclusive, period of protec tion ; fourth, 1S47- 50 inclusive, non-protection ; and, finally, 1851- 60 inclusive, a decade of non-interference with the natural laws of industry and of growth. The contrast between these periods will be found decidedly instructive. In the first of these periods the consumption of sugar suddenly jumped to 9.21 pounds per capita, of coffee to 4.84 per capita, and of tea to .901 per capita. A comparison of the prices shows that the increased consumption cannot be ascribed to a lower cost. Sugar averaged 7.55 cents; coffee, 11 J cents; and tea only 64 cents. The sum expended yearly per capita in sugar was 69.53 cents an in crease of 27 cents; in coffee, 55.66 cents an increase of 14 cents; and in tea, 57.66 cents an increase of 13 cents per capita. And the whole amount spent yearly per capita for these three articles was $1.82 against only $1.28 in the preceding period. Can the conclusion be avoided that this largely-increased con sumption indicates a rapid improvement in the condition of the la boring classes ? In the second period of contraction and panic, we find an increased consumption, except of tea, though the rapidity of increase is checked. Of sugar there were consumed 13.03 pounds, average price, 5.9 cents ; cost per capita, 76.87 cents ; of coffee there were consumed 5.66 pounds, price, 9.9 cents ; cost per capita, 56.25 cents ; and of tea .712 per capita, cost .65 cents ; expense per capita, 46.28 cents. The aggre gate yearly expenditure per capita for these articles was therefore $1.79 against $1.82 in the preceding period. Here can be seen, traced with unerring hand, the record of general depression, retarded progress in wealth, and increased economy, which it is known were the characteristics of that period. But if the panic and prostration of 1838- 42 quite plainly checked consumption, the tariff of 1842- 46, with its extreme protection, operated still more powerfully in the same direction. It is exceed ingly curious to observe how plainly the averages for this period disclose that embarrassment of the working-classes, and particularly of the farmers, the great body of consumers, which we have already inferred from other records. The consumption of sugar yearly per capita was 13.34 pounds, not a third of a pound more than the con sumption in the period of panic. The consumption of coffee was 5.80 per capita, only fourteen-hundredths of a pound more than in 354 DOES PROTECTION PROTECT ? the period of prostration, although the average price had fallen 3 cents. And the consumption of tea rose to .759 per capita, an in crease of only forty-seven thousandths of a pound, though the price had fallen on the average 6 cents a pound. Thus the aggregate yearly expenditure per capita for these articles was only $1.67 under the tariff of 1842- 46, though it had been $1.79 in the "hard times" which preceded it. Is it possible to make more conclusive the demonstration that to the laboring people of the country the protec tive tariff of 1842 gave times harder than " the hard times," even though to capital employed in manufacturing it gave enormous profits ? The removal of the tariff in 1846 enables us to contrast the four years under its operation with the four years that followed under low duties, ending with 1850. In that period, as in every other when high duties have been withdrawn, consumption started for ward, as well as the production of wealth, as a powerful spring will bound upward when the weight is removed which has held it down. The consumption of sugar was 19.47 pounds per capita, an increase of nearly 50 per cent. ; of coffee 6.62 pounds per capita, an increase of nearly one pound; and of tea .969, an increase of two-tenths of a pound. Thus the aggregate yearly expenditure per capita for these three articles, which under protection had been $1.67, was increased to $1.94. The increase in the consumption of sugar and coffee in the four years 1851- 54 inclusive, is still more remarkable. The quantity of sugar consumed yearly per capita rose more than ten pounds, to 29.66, the price having changed only a fraction of a cent. The quan tity of coffee increased nearly half a pound, the price having never theless risen more than 1 cent. Supposing the consumption of tea to have been the same during these years as during the whole decade it was doubtless less, but how much less it is not possible to determine the aggregate value of these articles consumed yearly was $2.36. Again, in the next period of four years, though the price of sugar rose to 7 cents, the consumption increased in quantity ; and, though the price of coffee increased to 10 J cents, the consump tion increased half a pound. Adding the decennial average for tea, as before, the aggregate value consumed was $3.28 per capita. The panic of 1857 and an increase of price checked consumption of coffee in 1858- 60, so that the average quantity consumed for the two years 1859- 60 is slightly smaller, though the value is higher. Sugar rose rapidly in quantity, but the price was so much reduced, CONSUMPTION OF TEA, COFFEE, AND SUGAR, AS A TEST OF GENERAL PROSPERITY. rrrrfr i i i i i i ii i i i itif rs "i M-I 1 1 1 *J;;:2S2SSS 0> ! i M ! 1 1 i M r 1 1 1 M 1 1 MM i III MM 1 1 .._.! iiii 1 1 1 I M I M ~ MM TTT 1 1 I ; i TUFT H-H-l-H-h IN V 1 1 II I I I 1 1 II II I ==r 11. ? 3 -S 3 i 3 S !5 to ra s ^ *2 . ?? 1 fia Aggregate Cost Tea, Coffee, and Sugar, consumed, p. c. S? SS28SSgSS5S38SSgSSSS f( a CONSUMPTION. 355 that the aggregate value is only $3.17 yearly. -These statistics may be more readily understood by aid of the diagram, which shows the average cost of the three articles, tea, coffee, and sugar, consumed in each period, with the average quantity of sugar, and it will be observed that the reduced price of sugar in 1859- 60 causes more than the whole apparent decrease of consumption by value. The contrast between every period of protection and the nearest period of lower duties or non-protection will strike the eye at once. These figures and facts are not needed to prove that the country has ad vanced more rapidly in production of wealth during each period of low duties, and especially during the decade of non-interference, 1850- 60, than under any protective tariff. But they are of value because they show that, while the aggregate wealth of the country was increasing, it was so fairly distributed that the working-people, the farmers and mechanics who form the great body of consumers, were able to increase more rapidly than ever before their expendi ture for articles of comfort, and their consumption of such articles. Tried by this test, every protective tariff since 1821 has either actu ally decreased the consumption of these articles, or has checked the natural increase, and, we infer, has unfavorably affected the condi tion of the laboring classes as a whole. Tried by this test, every non-protective tariff since 1821 has greatly increased the consump tion of these articles, and, we infer, has improved the condition of the laboring classes on the whole. The tariff period of 18Cl- 69 is no exception to the rule, although it has been purposely omitted from the examination thus far, because it may be said that the war, the inflation of currency, or the high prices, have affected the consumption. The prices of coffee, sugar, and tea, however, have not been higher in proportion than those of other articles generally, and the use of coffee and sugar for the army largely added to the consumption. Whatever causes may be assigned, the fact remains that in this period, both during and since the war, the consumption of these articles has been reduced or its natural increase checked. For the war period, 1861- 65, the con sumption of sugar was 31.95 pounds per capita, estimating only by the population within our military lines, and since the war, 1866- 68 inclusive, the consumption has been only 27.47 pounds per capita more than three pounds less than the consumption before the war. The consumption of coffee was, during the war, only 4.20 pounds, and since the war only 5.33 pounds per capita less by nearly two pounds than the consumption before the war. And the consump- 356 DOES PROTECTION PROTECT? tion of tea during the war was only .981, and since the war 1.066 pounds per capita a very slight increase as compared with the con sumption of 1.019 before the war. Taking the average of the whole protective period, the consumption of sugar was 30.28 pounds, of coffee 4.6 pounds, and of tea 1.012 pounds, per capita a decrease in the quantity of each article, as compared with the decade before the war. The prices, stated in currency or in gold, would, however, show an increase, but it must be remembered that the general average of prices and of wages has been at least correspondingly increased. The principle holds good, therefore, that high duties have in every case reduced or checked the increase of the consumption of tea, coffee, and sugar, and the sum of money which the laboring classes have been disposed to expend on these three comforts. On the other hand, low duties have in every case rapidly increased the consumption, both in quantity and in the sum of money which the laboring classes have thus expended. Students of political economy will, we think, at once agree that the three articles chosen, as they are those of general use, the consumption of which can be most accurately ascertained, so they form, taken in connection with the prices, the most reliable test which can be found of the general con dition of the working-people. Salt is an article of absolute neces sity rather than of comfort or luxury. The consumption of soap which some profound economists have regarded as the best test of progress in civilization cannot be accurately ascertained. Neither can the quantity of meat consumed, nor of clothing used, be reliably ascertained. Tried by the best obtainable test, then, the protection of American industry proves an embarrassment and a burden to American labor. CONSUMPTION OF TEA, COFFEE, AND SUGAR, AT DIFFERENT PERIODS, PER CAPITA, WITH PRICE AND COST. CHARACTER OF TARIFF. 1 SUGAR. COFFEE. TEA. Total Cost. i Ji 1 1 $ II s 1 Cons. P. C. 1 I Protection, 29 p. c Protection, 33 p. c Protection, 38 p. c Non-protection, 15 p. c Non-protection, 15| p. c Protection, 25 p. c Non-protection, 19 p. c. Non-protection, 19 p. c. Non-protection, 19 p. c. Non-protection, 14.7 p. c. Protection (war) 1821-1824 1825-1828 1829-1832 1833-1837; 1838-18421 1843-1846: 1847-18501 1851-1854 1855-1858 1859-1860 1861-1865 1866-1868 7.24 6.25 6.22 9.21 13.03 13.34 19.47 29.66 30.25 34.54 31.95 127.47 10. 8.5 6.75 7.55 5.9 6.25 5. 4.78 7. 5.75 72.40 53.12 41.98 69.53 76.87 83.37 97.35 131.77 211.75 198.60 1.60 2.40 3.45 :4.84 5.66 5.80 6.68 7.05 7.55 6.45 4.20 5.33 23.75 14.75 12. 11.50 9.9 6.9 7.5 9.19 10.28 12.37 37.98 35.40 41.40 55.66 56.25 40.02 49.65 64.78 77.61 79.78 .575 .538 .491 .901 .712 . 759 .969 1 1.019 .981 1.066 .94 .94 .91 .64 .65 .59 .49 38.7 54.05 50.57 44.C.S 57.66 46.28 44.78 47.48 39.43 164.43 139.09 128.06 182.85 179.40 167.40 194.43 235.98 328.79 317.81 Protection (peace) CONCLUSION. 357 CHAPTER XXVI. CONCLUSION. No candid inquirer can attempt the investigation of this question without a constant sense of the imperfectness of his information, and the liability to error in the details of his work. But I have honestly tried to present the facts, as far as I could ascertain them, without distortion or unfairness, that every reader may judge for himself whether they sustain the conclusions to which I have been led. It appears to me that protection does not stop excessive impor tations, nor turn the balance of trade in our favor ; that it checks im portations only for a short time, until its efiect is felt in the arrest of improvement or the increased cost of production ; and that it re tards exports more than imports, and thus enlarges the balance of trade against us. The fact that in every period of high duties the proportion of manufactured products exported has decreased, while in every period of low duties it has increased, seems to prove that the protective system puts our manufacturing industry, as a whole, at a disadvantage in competition with that of other countries. Nor can the prostration of shipping and ship-building be regarded as a matter of small moment. It seems to me that the natural progress of this country in the production of wealth has been retarded by the protective system. From agriculture we derive about three-fourths of that production, and the progress of that great industry has certainly been greater in non-protective than in protective periods. I cannot find any evi dence that the loss by retarding the progress of this industry has been compensated that the natural growth of other industries, producing in the aggregate only one-fourth as much, has been so greatly accelerated by protection as to pay for any loss through agriculture. On the contrary, it seems to me that more than two- thirds of the production of wealth by mechanic arts and manufac tures is by branches of industry which are of necessity, and, in point of fact, ever have been, retarded in their natural growth by the pro tective system. Neither do the records show that those great industries which have been especially protected have been hastened in any healthy growth by legislative favor. All of them throve before they were protected; all of them made remarkable progress during the long 358 DOES PROTECTION PROTECT? period of low duties, from 1846 to 1861, and each one of them achieved the greatest triumph in solid and healthy improvement, when pressed by natural competition and unchecked by artificial burdens. But, under high tariffs, certain pet interests have been invested with the tape-worm s faculty of feeding upon the vitals of all other manufactures ; and while, under this infliction, our industry, as a whole, has suffered, these favored interests have grown, like the tape-worm, not in self-sustaining vigor, but only in useless length and destructive .voracity. The aggregate ability of any country to employ labor must de pend upon its production of wealth ; and, if the production of wealth in the aggregate has been retarded in its natural growth, the de mand for labor, and the remuneration of labor, in the aggregate, must likewise have been retarded in their natural increase. I think the facts prove that the wages of labor, in the aggregate, have been lower, measured by their purchasing power, in times of protection than in times of non-protection ; that the rewards of agriculture have been diminished by high tariffs, its expenses increased, and yet, through increased friction in exchanges, the cost of agricultural products has not been in like degree lessened to the consumer ; and that even the manufacturing laborers have not, under protective tariffs, enjoyed any increase of wages sufficient to compensate them for the increased cost of living. These conclusions as to the condition of labor in different periods have been confirmed, at every point : first, by the record of the move ment of immigration to this country as compared with others ; and, second, by the record of the consumption of articles of comfort and general use. These facts seem to me to prove, with regard to pro tective tariffs generally, that which Mr. Wells so convincingly proved with regard to the system now in force that it does not benefit but injures the laboring classes. Unless these conclusions are erroneous, it must be conceded that American labor cannot be helped by loading and taxing it ; that a . system which injures a country in its foreign exchanges, which re tards its natural growth in the production of wealth, and which leads to such a distribution of wealth that the rich grow richer and the poor poorer, can in no wise benefit a nation ; in a word, that protection does not protect. What is the attempt to protect but a confession of weakness ? How often we hear it, " American industry, because it is free, needs protection." Does freedom, then, put an industry at a disadvantage CONCLUSION. 359 in comparison with others? Is freedom a source of weakness? Surely, history proves that freedom is strength. For freedom means intelligence, hope, activity of mind, the highest stimulus to all the faculties ; it means industry, child of unbounded aspiration, married to inventive genius. Brains are better than tariffs. The mechanic who fears pauper-labor or prison-labor ranks himself below its level. Yet " we must build up a home market." Statistics prove that manufactures in the aggregate have not increased as rapidly with protection as without it. Protection does not build up a home market ; it only retards the natural progress of the country toward diversification of industry. Not only this, but it retards the increase of those facilities of transportation which bring all the markets of the world to the door of every farmer, and double the value of his farm. It will be said, with truth, that the evils which have been traced as resulting from protective tariffs have been partly caused by an attempt to protect too many interests at once. It is a common mis take to suppose that, if protection is good for one industry, it must be good for all. High duties on one article may secure the market to the American producer ; therefore, men mistakenly reason, high duties on all articles will protect everybody at once. A duty on one article may not affect at all the cost of producing others. But duties on three thousand articles, each duty being diffused in its effect through a whole community, must have some power to increase the cost of producing every thing, and thus must not only tend to neutralize every benefit contemplated, but to put even OUT most natural industries at a disadvantage. In proportion as protec tive tariffs are broad, or cover many industries, they defeat them selves. In a despotism, single interests can be persistently favored by law possibly to some effect. But no republic will tolerate such exclusive favoritism. No tariff can be passed for protection that does not promise benefit to a great number of interests. And, therefore, in republics, where labor is free and intelligent, and needs less pro tection than other labor, precisely there protection most surely defeats itself. In this country, at least, it is a necessary feature of any protective system that it shall cover a great many interests, and so greatly increase the cost of production. Again, it will be said, with truth, that the evils which have been traced are largely due to the frequent changes of the tariff. But this, also, is an inevitable consequence of protection by a republican government. A despotism, deaf to all popular clamor, can cling to 360 DOES PROTECTION PROTECT? a fixed policy for a century. A free government, doing the same, would cease to be a free government. If the taxation designed for protection could be distributed with exact equality, and the benefits derived could also be distributed with exact equality, every man who should receive ten dollars in the increased price of his products, would be taxed just ten dollars in the increased cost of articles pur chased. To protect everybody equally is to protect nobody at all. The only possible effect, for good or evil, must arise from such un equal distribution of burdens and benefits as may help some at the expense of others. In proportion as a protective tariff is just to all interests, it benefits none. It can only have effect in proportion as it helps certain classes at the expense of other classes ; the monopoly feature of protection alone prevents it being a nullity. But, in a free government, any monopoly, whether absolute or qualified, is unpopular, and must be short-lived. The strife of interests for a greater share of benefits, or for release of burdens, must be constant, and, as long as the people are free, there must result, from every attempt to protect, frequent changes, and constant fear of change. Fear of change neutralizes the stimulus which peculiar favors give. Frequent change prostrates all industry. Hence, in proportion as tariffs are protective, they tend to defeat themselves, and to expose all industry to fluctuations. Once more, it will be said that the evils which have been traced result, in part, from defective adjustment of duties between different interests. This is also true. It is a misfortune that even our wisest Congressmen are not wiser than the Creator. The laws of the uni verse which He has devised do not suit the advocates of protection, who desire to mend them. It is to be regretted that finite wisdom is not yet quite equal to the task ; but the historian, upon a candid review of its performances, must sadly confess that it is not. The attempt to make an artificial world, instead of the one in which we live, can hardly be expected to meet with complete success, until men become able to mend those natural laws of trade which the Creator devised as the most beneficial stimulus for human industry. If protection could accomplish what its honest advocates desire ; if it could build up some industries without injuring others more important ; if it could enhance the price at which three thousand domestic products may be sold, and, at the same time, not enhance the cost of production ; if it could get revenue, and yet exclude imports, and force a natural borrower to cease asking for money ; if it could rid manufacture of competition without depriving it of CONCLUSION. 361 the main stimulus to improvement ; if it could contrive to so please everybody as to be permanent, and yet give benefits to some at the expense of others ; if it could tax the whole country for the benefit of capitalists, and yet contrive to secure to all labor a larger share in the distribution of wealth ; if, in short, it could take these United States and put them off on a planet by themselves, with artificial sun and moon, artificial air and water, and create for us a world better than that which God has made then, protection would be a good thing ! But the atttempt has not, thus far, been entirely suc cessful. We are here, in a world of labor and progress, linked, by ties which we cannot break, to our fellow-men in other lands. Whether we like it or not, we are forced to share something of their burdens, and to partake with them of the blessings which the progress of humanity secures. Science and invention have marvellously reduced the cost of supplying the necessities of life, and this nation cannot be altogether deprived of a share in the blessing. Our manufactures must either keep pace with the progress of improvement, or they must give room to industries more thrifty and profitable. With every year, increased facilities for communication bring distant nations closer to each other, and weld together into a more compact body all races of men. France orders by telegraph thousands of silk-cocoons from China, and ships them from Canton, by railway across this continent, to Lyons. Orders from New York are delivered at Liverpool within an hour ; German bankers receive instructions at two o clock, sell our bonds before three, transfer the gold by tel egraph to New York, and sell that for currency before it is three o clock in Wall Street. No longer can the Atlantic or the Pacific shut out a people from the influence of foreign trade and foreign industry. With every step of progress it becomes more clearly impossible to fence up a nation against competition ; and high tariffs, never efficacious for protection, are constantly losing their power for good, and gaining only in power for evil. As the system of exchange becomes more perfect, the operations of commerce more rapid, the means of intercommunication more complete, the burdens imposed by any interference with natural laws are diffused the more quickly and thoroughly through the whole community; and thus, with every year, protective tariffs more speedily defeat themselves. It is time for the people of this country to seriously consider the truth that high duties cannot overturn the natural laws of exchange, nor wall up any nation against foreign competition. If the system 25 3C2 DOES PROTECTION PROTECT? of protection was ever necessary, it is not now. Its burdens are real its benefits unsubstantial. The manufacturer gets higher prices, but his goods cost him more. The laborer gets higher wages, but living costs him more. A short season of large profits and unhealthy growth in any industry unhealthy, because not based upon solid improvement in comparison with like industry elsewhere is followed by prostration, ruinous alike to the most useful and the most useless workers, and, more quickly than ever before, each protective tariff is followed by a pitiful appeal for more protection. How long shall it take us to discover that children who are always carried will never learn to walk ? When I began this inquiry, I still believed, as in earlier days I had been taught, that, while the tariff was confessedly defective, permanent protection in some form and degree must be beneficial. The inquiry has led me to the conviction that protection, as a per manent policy, if ever useful, no longer benefits American labor as a whole ; that its supposed benefits are mainly unreal, and, when they are real, fall to the share of capital, and do not improve the condi tion or stimulate the energy and inventive genius of labor ; and that this country, realizing its natural superiority of resources, and its vast advantages in political freedom and intelligence of labor, should henceforth seek prosperity through the only efficient and enduring protection which can be given to industry the removal of all un necessary burdens. That inquiry has convinced at least one person that we need nothing else so much as to stimulate the native vigor and inventive power of our industry, by competition with the labor and skill of other countries. The best protection for industry is to let it alone. Human wisdom cannot better, by artificial laws, the conditions under which the Creator has placed human labor by the natural laws of exchange. The world which He has given us is, in those provisions, the work of a higher intelligence than legislators have at their command; they may mar, but can never mend it, by interfering with its fundamental laws. DO)EX OF TABLES. PAGE Agricultural Implements, wages in manufacture of, 1861- 67 334: " Products, 1840, 1850, 1860, 1867, 1868 91 " " price of, 1825- 60 274 " " " at New York, 1845 and 1860 308 and manufactured goods, price, 1860 and 1870 317 Agriculture, value of farms, 1860 and 1867 96 Anthracite Coal, production of, 1820- 68 200 Banks of the United States, 1811- 63 44 " Massachusetts, 1815- 51 45 Consumption of Coffee, 1821- 68 349 " Sugar, " 348 " Tea, " 350 " these articles, with cost 356 Cotton Goods, price, 1835- 49 289 " Manufacture, progress, 1820- 69 130 " " valuein!860 187 " Mills, wages in, 1861 and 1867 328 Currency and Imports, 1790-1829 26 " with rate per capita, 1829- 60 29 Duration of Tariffs, with percentage 72 Edge-tool Manufacture, wages in, 1 861 and 1867 334 Exports, Coin and Merchandise, 1821- 68 24 " and Imports, gross value and balance, 1790-1869 23 " " Merchandise, 1821- 69 60 excess of each, with rate per capita 61 " " Specie, 1821- 69 49 " of Manufactured Products, 1821- 68, with rate per capita 57 Farms, value of, 1860 and 1867 96 Flour, priceat Philadelphia, 1796-1867, each month 110 " " " averages 112 Glass Manufacture, wages, 1860 and 1867 330 " Window, price at Philadelphia, 1835- 49 252 " " " New York, 1825- 63 252 Hardware Manufacture, wages, 1860 and 1867 333 Immigration, 1820- 60 339 Imports and Currency, 1790-1829 26 " " with rate per capita, 1829- 60 29 364 INDEX OF TABLES. PAGE Imports and Exports, gross, and balance, 1790-1869 23 " " of Coin and Merchandise, 1821- 68 24 " " with rate per capita 51 " Merchandise, 1821- 69 60 " of Iron, quantities, 1818- 46 198 " " values, 182 1- 46 199 " " since 1840 221 " of Manufactures of Wool, 1821- 45 155 " of Specie, and Balance, 1821- 69 49 " of Wool and Woollens, 1841- 68 154 Iron and Nails moved on Ohio canals, 1841- 51 209 " Articles, price of, 1835- 49. , 297 " Duties under tariff of 1842 202 " Founderies, wages in, 1860 and 1867 331 " Furnaces built, 1833- 42 192 " " " 1840- 49 215 " " closed, 1841- 49 213 " Imports of, 1818- 46 198 " " 1840- 68 221 " Manufacture, 1860, classified 187 " pig, bar, and sheet, price, 1825- 63. 221 " " price of, monthly, 1825- 63 222 " price of pig, bar, and rail, in Great Britain, 1810- 65 239 " production of, 1840- 46 216 " rolling-mills, wages, 1860 and 1867 331 Lands, sale of, 1796-1868 36 Leather Manufacture, wages, 1861 and 1867 330 Manufacture of Cotton, history, 1820- 69 130 " Cotton, Wool, Iron, Glass, Paper, and Salt, 1860 187 Manufactured Products exported, 1821- 68 57 Merchandise, exports and imports, 1821- 68 24 Paper Manufacture, wages, 1860 and 1867 330 .population, increase each decade 80 " of the United States, 1791-1869 85 Prices of Agricultural Products, 1825- 63 274 " New York, 1845 and 1860 308 " and Manufactures, 1860 and 1870 317 " Cotton Goods, 1835- 49 289 " Flour at Philadelphia every month, 1796-1867 110 average yearly and for periods 112 " Iron, pig, bar, and rail, in England and here, 1810- 65 239 " Iron Articles, 1835- 49 297 " Pig Iron every month, 1825- 63 222 " Retail Articles in 1860 and 1868 327 " Salt, Turk s Island, every month, 1825- 63 262 " Window Glass, Philadelphia, 1835- 49 252 " New York, 1825- 63 252 " Wool at New York, 1860 and 1869 163 INDEX OF TABLES. 365 PAGE Prices of wool at New York, monthly, 1825- 63 166 " " averages, New York and Boston, 1825- 60 167 " " at New York since 1860 167 " Woollen Goods, 1836- 49 293 " " in 1860 and 1869 153 " French Goods in 1860 and 1869 154 Property, valuation of, New York and Mobile, 1820- 51 37 Protected Manufactures, census of, 1860 187 Public Lands, receipts from sale, 1796-1868 36 Railroads built, 1830- 68 109 Retail Prices, 1860 and 1868 327 Salt Manufacture, progress, 1820- 60 258 " price of, at New York, monthly, 1825- 63 262 Steel Manufacture, wages, 1860 and 1867 331 Ship-building, 1815- 62 113 Specie, Exports and Imports, with balance, 1821- 69 49 Sugar, Consumption of, 1821- 68 348 Tariff on Iron, 1842 202 Tariffs, duration and percentage of 72 Tea, Consumption of, 1821- 68 350 Tonnage, foreign, with rate per capita, 1815- 62 63 " total, with kinds of ships built, 1815- 62 113 Valuation in certain States, 1861 and 1868 83 " Mobile and New York, 1820- 51 37 Wages, at Lowell, 1839- 59 806 " in Cotton Mills, 1860- 61 and 1867- 68 328 " hi Woollen" " " 329 " in Leather Works, " " 330 " in Glass " " " 330 " inPaper " " " 330 " hi Rolling-MiUs, " 331 hi Steel Works, " " 331 " in Iron Founderies, " " 332 " in Hardware Works, " " 333 " hi Edge-tool " " " 334 " in Agricultural Implement Works, 1860- 61 and 1867-68 334 Wheat, quantity produced, with rate per capita, 1790-1868 97 " product and export value, 1820- 69 99 Wool, price of, at New York, monthly, 1825- 63 166 " averages, 1825- 60 167 since 1860 163 Woollen Goods, price, 1835- 49 293 " " 1860 and 1869 153 " Imports, 1821- 68 164 " Manufactures, census 1860 x . 187 " " of Massachusetts, 1832- 60 149 THE END. 14 DAY USE RETURN TO DESK FROM WHICH BORROWED LOAN DEPT. 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