UC-NRLF 
 
 $B S4D 4S2 
 
 PROTECTION 
 
 IN THE 
 
 UMTTFH 
 1^1 1 i C/U 
 
 II 
 
 
 I 
 
 A. MAURICE Low 
 
LIBRARY 
 
 OF THE 
 
 UNIVERSITY OF CALIFORNIA 
 
 Class 
 
PROTECTION IN VARIOUS 
 COUNTRIES. 
 
 EDITED BY WILLIAM HARBUTT DAWSON 
 
 THE UNITED STATES 
 
PROTECTION IN THE 
 UNITED STATES 
 
 A STUDY OF THE ORIGIN AND 
 
 GROWTH OF THE AMERICAN TARIFF 
 
 SYSTEM, AND ITS ECONOMIC AND 
 
 SOCIAL INFLUENCES 
 
 BY 
 
 A. MAURICE LOW, 
 
 Member of the American Social Science Association ; 
 
 Author of " The Conspiracy and Protection of Property 
 
 Act," "The British Workman's Compensation Act," 
 
 " Labour Union and British Industries," etc. 
 
 SITY 
 
 LONDON: 
 
 P. S. KING & SON 
 
 ORCHARD HOUSE 
 
 WESTMINSTER 
 
 1904. 
 
m 
 
 I 
 
AUTHOR'S NOTE. 
 
 IN the following pages an attempt is made 
 to present a concise historical statement 
 of the origin and growth of the Protective 
 System in America ; the underlying philo- 
 sophic motives that animated the first Pro- 
 tectionists in America ; the reason Protection 
 has commanded the adherence of a majority 
 of the American people ; and the social and 
 economic effects of Protection. 
 
 Limitation of^space makes this volume a 
 sketch rather than a detailed plan ; and a 
 subject so comprehensive in view of that 
 limitation must necessarily deal with broad 
 principles rather than minute details. Even 
 so, frequent references to the words of the 
 great exponents of the American principle 
 of Protection will enable the student, if he 
 desires to pursue the subject further, to find 
 a wealth of elaboration and argument that 
 
 1 33445 
 
vi AUTHOR'S NOTE. 
 
 will either convince him or more firmly 
 buttress his preconceived opinions for that, 
 after all, is the fate of every writer on a con- 
 troversial subject who cannot demonstrate 
 the faith that is in him by mathematical 
 proof. 
 
 The investigator of Protection in America 
 is confronted by more difficulties than the 
 investigator in any other country. So many 
 causes complicate the problem natural 
 resources, area of the country, population, 
 political institutions, and many others 
 causes exercising less influence elsewhere, 
 that it is not easy to give to each element 
 in a complex social system its proper weight ; 
 to determine narrowly, in some cases, cause 
 and effect, and to reach an exact conclusion 
 as to the precise good wrought by Protec- 
 tion, or the greater good that would have 
 followed had the system of Protection not 
 been adopted. The impartial historian can 
 do no more than state facts. From these 
 facts every reader will draw his own con- 
 clusions according to his prejudices or 
 predilections. 
 
 I avail myself of this opportunity to express 
 
AUTHOR'S NOTE. vii 
 
 my thanks to the Hon. 0. P. Austin, Chief 
 of the Bureau of Statistics of the United 
 States Government, for his co-operation in 
 furnishing me with much valuable historical 
 and statistical data, which I have freely used ; 
 and to the Hon. Carroll D. Wright, LL.D., 
 Chief of the Bureau of Labour of the United 
 States Government, for his always helpful 
 suggestions and wise counsel. 
 
 A. M. L. 
 
 WASHINGTON, 
 
 June, 1904. 
 
CONTENTS. 
 
 CHAP. PAGE 
 
 I. THE FIRST TARIFFS OF THE UNITED 
 
 STATES I 
 
 II. TARIFF REDUCTION DEMANDED BY THE 
 
 SOUTH 15 
 
 III. PROTECTION BECOMES A REPUBLICAN 
 
 DOCTRINE 27 
 
 IV. THE PHILOSOPHY OF PROTECTION . . 40 
 V. LABOUR AND WAGES . . . -59 
 
 VI. THE GENERAL COST OF LIVING. . . 79 
 
 VII. PROTECTION AND NATIONAL WELFARE . 94 
 
 VIII. PROTECTION AND POLITICS . . . Io8 
 
 IX. THE TARIFF AND TRUSTS . . . .119 
 
 X. WHAT THE TARIFF COSTS. . . . 130 
 
 XI. THE TARIFF AS A WEAPON . . .14! 
 
 XII. GENERAL CONCLUSIONS .... 152 
 
 INDEX ....... 165 
 

 
 
 PROTECTION IN THE 
 UNITED STATES. 
 
 CHAPTER I. 
 
 , THE FIRST TARIFFS OF THE UNITED 
 STATES. 
 
 THE tariff history of the United States is a 
 peculiar one. When the young nation began its 
 existence, with thirteen States, an area of 827,000 
 square miles, and a population of 4,000,000, it 
 experienced several years of Free Trade in its most 
 absolute sense. Even this short experience, with 
 this comparatively small area and population, con- 
 vinced the thoughtful men of the young republic 
 that it needed Protection to develop its manufac- 
 turing industries, and thus create a home market 
 for its agricultural products ; and the first Tariff 
 Act declared itself, and those who framed and 
 passed it, in favour of that principle. As the nation 
 grew the protectionist sentiment developed greater 
 strength. In '1803, *the great Louisiana Purchase 
 doubled the area of the country); the following 
 year saw the tariff increased, and every year the 
 P.U.S. U 
 
2 PROTECTION IN THE UNITED STATES. 
 
 country was brought step by step to what it believed 
 to be a definitely protective state. In 1819 Florida 
 was added, and soon a still higher thoroughly pro- 
 tective tariff was passed, bringing with it great 
 prosperity. In 1845, 1846, and 1848 came the 
 great additions of Texas, Oregon, and the Mexican 
 cession, and after a dozen years of experiment with 
 low tariffs following these increases in territory, a 
 territory with all varieties of climate and power 
 of production, the people again decided in favour 
 of Protection, and have maintained it as a fixed 
 principle of governmental policy from that time to 
 this, with a single exception of less than four years. 
 Thus, as the country grew and added new areas 
 with new varieties of climate and production, the 
 protectionist sentiment grew. The area occupied 
 by the bulk of the people who fought the Revolu- 
 tionary War was not exclusively an agricultural 
 area, but was much of it better adapted to manu- 
 facturing. When at the close of that war the tide 
 of emigration poured over the Alleghanies into the 
 great agricultural area of the West, the importance 
 of being able to manufacture for such a prosperous 
 population, and of supplying to that agricultural 
 population a home market for its products, im- 
 pressed itself upon the minds of the statesmen of 
 the nation. When that other great agricultural 
 area, the Louisiana Purchase, was added, and the 
 producing power of agriculture and mining greatly 
 increased, the importance of the manufacturing 
 interest became more and more apparent. When 
 
THE FIRST TARIFFS. 3 
 
 Texas, Oregon, and California were added, the 
 country was in control of a party whose leaders 
 believed in a low tariff, and they maintained that 
 tariff until the people grew tired of the business 
 conditions which accompanied it, and removed 
 them from power so effectually that a quarter of a 
 century passed before they were again entrusted 
 with office, even for a single presidential term. 
 The area of the United States, an area practically 
 equal to that of all Europe, gives it such a variety 
 of climate, soil and production, agricultural, mineral 
 and forest wealth, that each added section, with its 
 new climate and power of production, offered a new 
 reason for Protection as a means to develop manu- 
 facturing and enlarge the great home market. The 
 development and retention of the home market has 
 always been regarded as of equal importance with 
 the development of a great manufacturing industry 
 in the minds of the supporters of the protective 
 tariff policy. 
 
 The first tariff experience of the United States 
 was during that period after the close of the Revo- 
 lution in which the new Union existed as a mere 
 confederation. It had no President or other execu- 
 tive officers, and the Congress had no power to 
 enact and enforce tariffs for the whole country. 
 It could recommend to the States what they should 
 do, but each State was at liberty to determine for 
 itself whether it should adopt or reject the measure 
 or general plan recommended by Congress. Some 
 of the States indicated a willingness that Congress 
 
 B 2 
 
4 PROTECTION IN THE UNITED STATES. 
 
 should enact a general tariff law, but others refused 
 to give their consent. Congress, on the other hand, 
 urged upon the States a uniform rate of duty, but 
 without success. The result was that each State 
 framed a tariff to suit itself, making the rates of 
 duty apply not only to merchandise from foreign 
 countries, but also to that from the other States 
 of the confederation. The result was, first, the 
 destruction of the principle of developing a great 
 internal exchange among the States, and of thus 
 building up a great home market ; and, second, 
 the admission by smuggling of goods from abroad 
 without payment of duties. 
 
 Even where tariffs were imposed they were in 
 most instances so low as to prove no barrier to 
 merchandise from abroad. The tariff rate named 
 by the great State of Pennsylvania, now the most 
 persistent supporter of a high protective tariff, was 
 but 2\ per cent., which, of course, was not in the 
 slightest degree protective ; but even this was 
 nullified by the fact that New jersey established a 
 free port just across the river from Philadelphia, 
 into which goods were imported without payment 
 of duties and quietly smuggled into Philadelphia. 
 The same thing was done at the northern end of 
 New Jersey, a free port being established opposite 
 New York, from which goods were smuggled into 
 that city. As a result a large part of the merchan- 
 dise coming into the United States during the 
 period of the confederation, from 1783 to 1789, 
 was admitted free of any duty, and that which paid 
 
THE FIRST TARIFFS. 5 
 
 duty was so lightly taxed that the impost had no 
 effect upon the volume of importations. Conse- 
 quently, it may be said that the United States 
 during the period of the confederation, from 1783 
 to 1789, had a nearer approach to Free Trade than 
 has been known to the present generation. The 
 effect is told by that well-known and generally 
 accepted historian Hildreth, who says (Vol. III., 
 p. 446) : 
 
 " The large importation of foreign goods subject to 
 little or no duty and sold at low prices was proving 
 ruinous to all those domestic manufactures and 
 mechanical employments which the non-consumption 
 agreements and the war had created and fostered. 
 The country had been flooded with goods, and debts 
 had been unwarily contracted for which there were no 
 means to pay. The importations from Great Britain 
 in 1784 and 1785 had amounted to 30 millions of 
 dollars, while the exports thither had not exceeded 
 9 millions. . . . The community was fast becoming 
 divided into two embittered factions of creditors and 
 debtors. . . . The excessive importation of foreign 
 goods had drained the country of its specie, and the 
 circulating medium consisted principally of treasury 
 orders on the State tax collectors and depreciated 
 certificates of State and federal debt." 
 
 The result of this experiment with Free Trade 
 was a growing feeling in favour of giving Congress 
 power to create and enforce a tariff, and the condi- 
 tions above described were among the principal 
 causes which led to^the adoption of the Constitu- 
 tion which not only required Congress to establish 
 and enforce tariff laws, but at the same time 
 abolish all tariff lines between the States. 
 
6 PROTECTION IN THE UNITED STATES. 
 
 Those two articles of the Constitution have con- 
 tributed in no small measure to the industrial 
 success and prosperity of the United States, a 
 success which, it will be admitted, is phenomenal. 
 The Constitution gives to Congress the power to 
 create and enforce such tariff as the conditions of 
 the country require, and it requires that "all duties, 
 imports, and excises shall be uniform throughout 
 the United States." In other words, it prohibits 
 any tariff between the States and permits the pro- 
 ducts and manufactures of one section to pass 
 freely and uninterruptedly to any other section of 
 the country. This gives an opportunity to build up 
 as high a tariff wall around the outside of the 
 country as may be desired and yet permits an 
 absolutely free interchange among the people of the 
 entire Union. This in a country of the area of the 
 United States, with its diversified climates and soils 
 and its varied productive capacity, has preserved the 
 home market, a market recently characterised by 
 the Hon. O. P. Austin, Chief of the Bureau of 
 Statistics, as " equal in value to the entire inter- 
 national commerce of the world." 
 
 The first work of Congress under the new Con- 
 stitution was to pass a tariff measure which declared 
 in its preamble that " it is necessary for the support 
 of the Government, for the discharge of the debt 
 of the United States, and for the encouragement 
 and protection of manufactures, that duties be laid on 
 imported goods." It does not follow, however, that 
 this declaration, coupled with the intention of the 
 
THE FIRST TARIFFS. 7 
 
 framers of the Act, did in effect make it a suffi- 
 ciently protective measure to accomplish the desire 
 for the development of manufacturing. The 
 framers of the Act had little experience in eco- 
 nomic legislation, and the rates of duty levied 
 were extremely low, as compared with what is now 
 considered Protection by any of the countries which 
 adopt that system for the maintenance of home 
 industries and home markets. It soon became 
 apparent that the rates of the first tariff, although 
 intended to be protective in their operation) were 
 too low, the actual workings of the law showing that 
 the average rates on all importations were only 
 about 7 \ per cent. The next year another Bill was 
 passed slightly increasing the duties, and in the 
 following years there were more advances, until 
 about 1800 the average rates were about 13 per 
 cent, ad valorem on all imports. In 1808 a much 
 more protective tariff was enacted, which placed a 
 duty upon 175 articles and admitted 30 articles free 
 of duty, the average rate of duty on all imports 
 being about 28J per cent. About the same time 
 was passed the famous Embargo Act, prohibiting 
 all imports from England and France, and while it 
 was not intended as a protective measure its effect 
 during the one and a-half years of its existence was, 
 of course, to stimulate greatly home production. 
 
 The effect of these protective duties, even at 
 rates which at the present time would be con- 
 sidered low, was strongly marked. Manufacturing 
 developed so rapidly that the census of 1810 showed 
 
8 PROTECTION IN THE UNITED STATES. 
 
 the value of manufactures in the United States to 
 be over 2 5,000,000, a very large sum in the stage 
 of manufacturing which had been reached, and 
 especially so for a young nation of 7,000,000, 
 in a new country, hampered for capital, with crude 
 and insufficient machinery, and the production of 
 raw materials but little developed. The manufac- 
 turing industry had its effect upon agriculture, 
 which was prosperous. Commenting upon the 
 conditions of this period, Adam Seybert, a distin- 
 guished member of the House of Representatives, 
 from Pennsylvania, in his well-known and often- 
 quoted work, " Statistical Annals of the United 
 States," published in 1818 and probably written in 
 1816 and 1817, says: 
 
 " The population of the United States in the twenty 
 years from 1790 to 1810 acquired an augmentation of 
 84 per cent. When an increase so great is accompanied 
 with the happiness of the people, when a moderate 
 share of industry will secure to every individual the 
 comforts and many of the superfluities and banish 
 mendicity, there can no doubt remain of the pros- 
 perity of the community. It has been acknowledged 
 in Beaujour's ' Sketch of the United States ' (1814) 
 that ' the poorest individual in the United States, 
 even the simple labourer, is there better fed and 
 clothed than in any other country.' The many large 
 cities, towns, and villages that have been established 
 are monuments of the industry of the people. 
 
 " Our agriculture has not only furnished an abun- 
 dance for the inhabitants of the United States, but 
 has in addition contributed an enormous surplus for 
 other nations. In 1791 the exports were valued in 
 the aggregate at $19,000,000; in 1817 the exports of 
 
THE FIRST TARIFFS. 9 
 
 domestic merchandise had swelled to the enormous 
 amount of $61,000,000. 
 
 " It is not long since the manufacturers of the 
 United States have gained the public attention ; now 
 they are respectable from their number, as well as 
 from the number of persons to whom they have given 
 employment, and in the capital which has been 
 invested. Abroad these establishments have excited 
 the fears of competitors, much anxiety has been 
 exhibited on account of their progress, and the success 
 with which our artists have executed many of the 
 most difficult processes. These workshops have been 
 extensively diffused in our own country, they are 
 numerous on the seaboard, and there are many of ^^^ 
 them west of the mountains." 
 
 A part of the prosperity /which Seybert describes 
 was doubtless due to the causes existing between 
 1812 and 1816. During the war of 1812, the tariff 
 rates were doubled, giving an average rate of about 
 33 per cent., and this coupled with the small 
 importations during that period and the great 
 demand, of course, stimulated home production 
 and general activity. 
 
 But a cloud, only a speck on the horizon when 
 Seybert wrote, soon spread over the country. The 
 prosperity of the manufacturers, which, he says, 
 " has excited the fears of competitors abroad," 
 soon led to a definite plan of attack by the manu- 
 facturers of England. The policy of "dumping," 
 of flooding the country with manufactures at low 
 prices, was entered upon with a deliberate purpose, 
 and although the tariffs adopted in 1816 and 1818 
 were doubtless intended to be protective, their 
 rates ranging about 26 per cent, on all imports, 
 
io PROTECTION IN THE UNITED STATES. 
 
 they were insufficient to prevent large imports, 
 which averaged more than 20,000,000 a year up 
 to 1819. During that period there was great 
 distress among the American manufacturers, and 
 a consequent reduction in the demand for agricul- 
 tural products, and this continued until 1824, when 
 a thoroughly protective Tariff Act was passed. 
 
 While the average tariff rates during the period 
 from 1816 to 1824 were higher than those prior to 
 the war of 1812, they were not sufficient to keep 
 out a flood of foreign merchandise, which came 
 with such volume and persistence as to close many 
 of the factories and throw thousands out of employ- 
 ment, so that Henry Clay declares that the values 
 of property fell off one-half and there was general 
 distress. Horace Greeley, the distinguished editor 
 and owner of the New York Tribune, says of this 
 period : 
 
 " At the close of the second war with England, 
 peace found the country dotted with factories which 
 had sprung up under the precarious shelter of embargo 
 and war. Those not yet firmly established found 
 themselves suddenly exposed to a relentless and deter- 
 mined foreign competition. Great Britain poured her 
 fabrics far below cost upon our markets in a perfect 
 deluge. Our manufactures went down like grass 
 before the mower, and agriculture and the wages of 
 labour speedily followed. Financial prostration was 
 general, and the presence of debt was universal. In 
 New England, fully one-fourth of the property went 
 through the sheriff's mill, and the prostration was 
 scarcely less general then elsewhere." 
 
 Of this period, George B. Curtiss, an American 
 
THE FIRST TARIFFS. u 
 
 writer on tariff questions, whose work was highly 
 commended by the late President McKinley, says 
 (" Progress and Prosperity," p. 577 et seq.) : 
 
 " Though a protective tariff law, intended as such, 
 had been enacted, yet it was really a Free Trade statute, 
 and brought about a Free Trade period. It matters 
 riot how high an import duty may be ; if it is not 
 sufficiently high to keep out foreign goods it is not 
 protective. No duty is protective if the foreign 
 manufacturer is willing to pay this duty, sacrificing 
 his own product, and selling his goods cheaper than 
 he can make them, in order to destroy our industries 
 and then step in and control the market. ... A 
 tariff, however high, is still a low tariff when it will 
 not prevent the importation of manufactures that 
 should be made at home. In 1816, young as were 
 our industries and small as was our population, 
 70,000 persons were discharged and made idle or 
 driven to the farms. The agriculturist, thereby, not 
 only lost his market, but had to divide his profits, so 
 that his products hardly paid for the marketing." 
 
 So it came about that a really protective tariff 
 was enacted by Congress in 1824. It advanced 
 the rates of duty on a large number of articles, 
 bringing the average ad valorem duties up to 37 
 per cent, on all imports. This was followed by 
 improved conditions and proved so satisfactory 
 that a still further advance of duties was made in 
 1828, bringing the average rate on all imports up 
 to about 45 per cent, ad valorem. This tariff was 
 characterised by Greeley as " the most protective 
 tariff ever adopted," though this characterisation 
 was made prior to the adoption of the thoroughly 
 protective tariffs of 1890 and 1897, under which 
 
12 PROTECTION IN THE UNITED STATES. 
 
 the United States has experienced its greatest 
 prosperity. That there was great prosperity under 
 this high and thoroughly protective tariff of 1824 
 cannot be doubted. It is generally admitted by 
 all. President Jackson, in his annual message in 
 1829, said : 
 
 " Our country presents the most cheering evidence 
 of general welfare and progressive improvement. . . . 
 The public prosperity is evinced in increased revenue 
 from the sale of public lands, and in the steady main- 
 tenance of that produced from imposts and tonnage. 
 There will have been paid on the public debt, during 
 the present year, the sum of $12,000,000. This state 
 of the finances exhibits the resources of the nation 
 in an aspect highly flattering to its industry and 
 auspicious of the ability of the Government, in a very 
 short time, to extinguish its debt." 
 
 Lossing, the historian, says of the condition of 
 this period that President Adams on his retire- 
 ment from office " left to his successor a legacy of 
 unexampled national prosperity, a greatly reduced 
 public debt, and a surplus of more than $5,000,000 
 in the treasury." 
 
 Mr. McKinley, discussing the conditions of that 
 time said, during his Congressional life, prior to his 
 election to the Presidency : 
 
 " None of the awful prophecies which had been 
 made by those opposed to the Bill were fulfilled. 
 None of the dire results ensued. The nation was 
 not only not palsied, but quickened into new life. 
 The merchants did not move out of their costly piles 
 of stores and dwelling-houses ; they remained only to 
 acquire larger and finer and more costly ones ; the 
 
THE FIRST TARIFFS. 13 
 
 poorer classes were not driven to cold water as their 
 only food and drink, but their labour was in greater 
 demand and their wages advanced in price. The 
 entire country under the tariff moved on to higher 
 triumphs in the industrial progress, and to a higher 
 and better destiny for the people." 
 
 Henry Clay, the distinguished advocate of Pro- 
 tection, six times' Speaker of the House of Repre- 
 sentatives, member of the Senate, Secretary of State, 
 and candidate of the Whig party for the Presi- 
 dency, in a speech delivered in Congress, said : 
 
 " On a general survey we behold cultivation ex- 
 tended, the arts flourishing, the face of the country 
 improved, our people fully and profitably employed, 
 the public confidence exhibiting tranquillity, content- 
 ment, and happiness, the public debt of two wars 
 nearly redeemed, and, to crown all, the public treasury 
 overflowing. If a term of seven years were to be 
 selected of the greatest prosperity which this people 
 has enjoyed since the establishment of their present 
 Constitution, it would be exactly that period of seven 
 years which immediately followed the passage of the 
 tariff of 1824." 
 
 Curtiss, the historian, adds this testimony 
 (" Protection and Prosperity," p. 586) : 
 
 " The country made wonderful strides during the 
 operation of the protective tariffs of 1824 and 1828. 
 From the ruin and distress of 1820 we had again 
 become a prosperous nation in 1830. The American 
 system was developed and fostered. The home 
 market was becoming year by year of greater pro- 
 portions. Wages had advanced, and the American 
 labourer was even then enjoying a content unknown 
 elsewhere." 
 
?4 PROTECTION IN THE UNITED STATES. 
 
 Thus, in little more than the first quarter of a 
 century of national existence the relative merits 
 of Free Trade and Protection had been tested, 
 and the advantages of Protection had been 
 demonstrated. 
 
TARIFF REDUCTION DEMANDED. 
 
 CHAPTER II. 
 
 TARIFF REDUCTION DEMANDED BY THE 
 SOUTH. 
 
 THE people of the South, who were selling their 
 cotton, and tobacco, and rice, agricultural products, 
 to Europe, began to fear that if the United States 
 maintained high tariffs against European manu- 
 factures, Europe would refuse to buy American 
 agricultural products, and despite the generally 
 prosperous condition of the country, in the South 
 an agitation began for a reduction of the tariff. 
 
 As the people of the South were not manu- 
 facturers, and had no manufactures to sell in the 
 home market, their sole interest was to prevent 
 conditions which they believed would be hurtful to 
 their market for agricultural products. The existing 
 law was characterised by the South as " the tariff 
 of abominations," and its reduction was demanded, 
 even on the threat that the South would refuse to 
 pay the duties levied under it. While President 
 Jackson, himself a Democrat and a Southern man, 
 quickly silenced this threat, the violent opposition 
 to the law had its effect, and in 1833 a new tariff 
 law was passed, providing that all duties in excess 
 of 20 per cent, should be gradually lowered by 
 removing 10 per cent, of that excess each alternate 
 
i6 PROTECTION IN THE UNITED STATES. 
 
 year during ten years, and the remainder on the 
 year following, the purpose being by easy stages 
 to bring the tariff rates down to not more than 
 20 per cent, ad valorem. 
 
 While a reduction of tariff at this slow rate, a 
 rate which extended the reduction over a full 
 decade, and at the end of that period still left a 
 duty of 20 per cent, would not seem to be such a 
 serious matter, it is a fact that the period of 
 reduction was full of troubles, financial and com- 
 mercial. And the friends of Protection assert that 
 it was largely due to the existing and prospective 
 tariff conditions. This was not so much from the 
 mere reduction of duties by the slow process 
 described, but by reason of the destruction of the 
 protective features of the Act. Thomas H. Benton, 
 a member of the Senate at the time the Bill was 
 passed, though himself a Democrat and a Southern 
 man, denounced the measure in the most vigorous 
 terms. In his work, " Thirty Years in the Senate," 
 he says (Vol. I., pp. 346 and 347) : 
 
 " The Act of 1833 comprises every title necessary to 
 stamp a vicious and reprehensible Act, bad in the 
 matter, foul in the manner, full of abuse, and carried 
 through upon a plea which was an outrage upon 
 representative government and upon the people of the 
 States. . . . The overthrow of the old revenue system 
 that duties were to be levied on luxuries and not on 
 necessaries, the substitution of universal ad valorem 
 to the exclusion of all specific duties, the abolition of 
 all discrimination upon articles in the determination 
 of duties, the preposterous stipulation against Protec- 
 tion while giving Protection, all these were flagrant 
 
TARIFF REDUCTION DEMANDED. 17 
 
 vices of the Bill. . . . The year 1842, that fixed for 
 the completion of the gradual reduction of duties, 
 was to have been the jubilee of all these inventions 
 and set them all off in their career of usefulness, but 
 that year saw all these fine anticipations fail." 
 
 While it would not be just to attribute to the 
 tariff of 1833 all of the disasters which came during 
 the decade following its passage, doubtless a part 
 of them was chargeable to it. The first reduction 
 was little felt, but when the second and then the 
 third came, there was a general reduction of 
 revenue, a general reduction of business activity, 
 a great crash financially such as the young country 
 had never known before. While much of this was 
 doubtless due to other causes unsound banking 
 and finance, rash speculation, and defective business 
 methods it is a fact that the people were glad to 
 return to a protective tariff at the end of the period 
 fixed for the gradual reduction, and in 1842 a 
 protective tariff was passed, by which the rates of 
 duty were placed as high as 50 per cent, and in 
 some cases even 75 per cent.) the average rate of 
 duty being about 35 per cent. Commenting upon 
 this Act and that which preceded it, Lossing 
 says (p. 477) : 
 
 " By the Act of 1833 duties on foreign goods were 
 to reach the minimum of reduction at the close of 
 1842, when the tariff would only provide revenue, not 
 protection to manufactures, like that of 1828. The 
 latter object (protection) appeared desirable, and by 
 an Act passed in 1842 high tariffs were imposed on 
 many foreign articles." 
 
 P.U.S. C 
 
i8 PROTECTION IN THE UNITED STATES. 
 
 That the Act of 1842 was thoroughly protective 
 is generally admitted, and that a period of 
 prosperity existed during most of its operation 
 is also a fact. 
 
 " Its effect," says Curtiss (" Protection and Pros- 
 perity," p. 593), " was instantaneous. First came 
 confidence. Then the fires were lighted, the wheels 
 began to revolve, and the industries and business of 
 the country improved daily. Not only that, but the 
 Treasury gained relief at once. The customs receipts 
 for the year ending June 3oth, 1843, were $25,234,750, 
 as against $14,487,21 6 for the previous year under the 
 compromise tariff. Under the Free Trade tariff, there 
 had been a steady decrease of revenue. Under the 
 protective tariff of 1842, there was a steady increase 
 of revenue. And this, too, in the face of the most 
 decided falling off in certain imports. The com- 
 mittee which framed the Bill of 1842 showed that the 
 balance of trade had been $200,000,000 against us 
 during seven years. ' All branches of industries are 
 paralysed,' said the report, ' but perhaps the most 
 interesting point made was the difference between our 
 tariff and the tariffs of foreign countries. On our 
 products, valued at 91,000,000 in Europe, duties 
 were levied amounting to $113,000,000, while on 
 products which were imported, to the amount of 
 $73,000,000, our duties were only $17,000,000.' " 
 
 Free Trade, or, more properly speaking, low 
 tariff, had been tried and found wanting. A 
 reduction of the rates on imports had been 
 attended with general distress ; prosperity had 
 immediately followed in the train of high duties. 
 The protectionists pointed to conditions as vindi- 
 cating their judgment. The South, which believed 
 that its present and future welfare rested on low 
 
TARIFF REDUCTION DEMANDED. 19 
 
 tariffs, found that its wealth did not increase pro- 
 portionately with a reduction of duties, although 
 it still clung to its belief in the wisdom of imposing 
 the minimum of taxation on imports. 
 
 The protectionists of this period, their writers 
 and speakers, sang their songs of victory. 
 
 " After four years of real prosperity," says Henry G. 
 Carey, the well-known political economist, " under 
 this tariff of 1842, how great was the change ! Labour 
 was everywhere in demand. Planters had large crops, 
 and the domestic market was growing with a rapidity 
 that promised better prices. The produce of the farm 
 was in demand, and prices had risen ; the consump- 
 tion of coal, iron, wool, and cotton, and woollen 
 clothing was immense and rapidly increasing, while 
 prices were falling because of the rapidly improving 
 character of the machinery of production. Produc- 
 tion of every kind was immense, and commerce, 
 internal and external, was growing with unaccustomed 
 rapidity." 
 
 That conditions during this period were favour- 
 able is also shown by an extract from the message 
 of President Polk in 1846, who said : 
 
 " Labour in all of its branches is receiving an ample 
 reward, while education, science, and the arts are 
 rapidly becoming the means of social happiness. The 
 progress of our country, in her career of greatness, not 
 only in the vast extent of her territorial domain and 
 the rapid increase of her population, but in resources 
 and wealth, and in the happy condition of her people, 
 is without an example in the history of nations." 
 
 The American people have always been a 
 mutable people and their love of change has shown 
 itself in nothing more striking than their frequent 
 changes in the tariff, often, it would seem, without 
 
 C2 
 
20 PROTECTION IN THE UNITED STATES. 
 
 any good reason but merely to gratify the whim 
 for something new. 
 
 Even while the President was extolling the 
 greatness of the country and the happiness of its 
 people, and protectionists dilated on what Pro- 
 tection had accomplished, the pendulum of popular 
 sentiment swung once again. 
 
 In 1846 the most thoroughly Free Trade Act 
 ever passed in the United States was put upon the 
 statute books. It reduced the average rate of 
 duty on all imports to about 23 per cent. But this 
 was not its most important feature. It radically 
 changed the entire system of the tariff. Instead of 
 placing protective duties on manufactures and 
 admitting material for manufacturing free, accord- 
 ing to the principle of the protective measures, it 
 reduced the duties on manufactures and placed 
 higher rates on raw materials and foodstuffs. 
 Edwin Williams, in an article in Fishers National 
 Magazine for September, 1846, commenting on 
 this tariff, says : 
 
 " While the British Parliament are reducing duties 
 on all articles for the use of their manufacturers, the 
 American Congress have increased the burdens of 
 the manufacturers by additional duties on the raw 
 materials for their use ; at the same time they have 
 reduced the protective duties. Was there ever a 
 parallel case of injustice in the history of legislation 
 in any other country ? " 
 
 This tariff of 1846, popularly known as "the 
 Walker tariff," because of the fact that it was 
 framed by Robert J. Walker, then Secretary of the 
 
TARIFF REDUCTION DEMANDED. 21 
 
 Treasury, was the ideal measure of the free traders, 
 a " revenue tariff/' with no attempt at Protection 
 and its duties all laid on the ad valorem basis. 
 Daniel Webster, who originally opposed the pro- 
 tective system, but had by this time become a 
 supporter of that doctrine, said of the Bill in a 
 three days' speech opposing it : 
 
 " It is not a Bill for the people or the masses. It 
 is not a Bill to add to the comfort of those in middle 
 life or the poor. It is not a Bill for employment, it is 
 a Bill for the relief of the highest and most luxurious 
 classes of the country, imposing onerous duties on the 
 masses, and taking away the means of living from 
 labour throughout the land." 
 
 The effect of this tariff is a matter of dispute 
 between the protectionists and the free traders, 
 even to this day. The free traders point to the 
 great prosperity of the few years immediately 
 subsequent to its passage, and claim that they 
 were the results of the tariff. The protectionists 
 say that the prosperity of that period was due to 
 the discovery of gold in California, which largely 
 increased the wealth of the country ; to the build- 
 ing of railroads, which began to develop about that 
 time ; to the Mexican War, which created a great 
 demand for home products and a general activity ; 
 to the famine in Ireland, and to wars in Europe. 
 
 Mr. Walker, the author of this tariff, laid down 
 the following principles as those upon which it was 
 based : 
 
 i. That no more money should be collected than 
 is necessary for the wants of the Government 
 
22 PROTECTION IN THE UNITED STATES. 
 
 2. That no duty should be imposed upon any 
 article above the lowest rate which will yield a just 
 amount of revenue. 
 
 3. That below such rate discrimination may be 
 made, descending in the scale of duties, or for 
 imperative reasons the article may be placed upon 
 the free list. 
 
 4. That the maximum revenue duty should be 
 imposed upon all luxuries. 
 
 5. That all minimum and specific duties should 
 be abolished and ad valorem duties substituted in 
 their place. 
 
 The Bill arranged all classes of articles into nine 
 groups, to pay, respectively, 100, 40, 30, 25, 20, 15, 
 10, and 5 per cent, ad valorem, with a list of articles 
 on which no duty was to be collected. The 
 100 per cent, class included liquors, brandy, &c. ; 
 the 40 per cent, class, wines, and luxuries of like 
 character ; the 30 per cent, class, manufactures of 
 iron, wool, cotton, and glass, sugar, coal, soap, and 
 many other articles. 
 
 Its chief characteristics were the abandonment of 
 a protective system which its author denounced as 
 discriminating in favour of the manufacturers and 
 against the agriculturist, the workman and the 
 merchant, and the substitution of ad valorem for 
 specific duties. 
 
 There was and still is a difference of opinion 
 among protectionists and free traders as to whether 
 the Walker Free Trade tariff was responsible for the 
 conditions which followed it. Certain it is, that 
 
TARIFF REDUCTION DEMANDED. 23 
 
 there was prosperity for a term of years, though 
 the fact that the gold production at the rate of 
 ; 10,000,000 a year soon began, that the war with 
 Mexico caused unusual demands for supplies, and 
 that the demands from abroad for foodstuffs were 
 abnormal because of famine in Ireland and wars, 
 must have had a material effect in stimulating 
 business activity in the United States and pro- 
 ducing prosperity. Equally certain it is, however, 
 that by 1854 the prosperity ended and a period of 
 great depression began, continuing until the low 
 tariff was substituted by one thoroughly protective. 
 Importations under the low tariff had been large, 
 and they were of a class produced by home manu- 
 facturers, and as a result there was idleness among 
 the manufacturers and their employees. This 
 reduced the home demand for the products of the 
 farm, and the farmer in turn was unable to buy. 
 The New York Tribune of January i5th, 1855, 
 says of the conditions then prevailing (" Protection 
 and Prosperity," p. 604) : 
 
 " The cry of hard times reaches us from every part 
 of the country. The making of roads is stopped, 
 factories are closed, and houses and ships are no 
 longer being built. Factory hands, road makers, 
 carpenters, bricklayers, and labourers are idle, and 
 paralysis is rapidly embracing every pursuit in the 
 country. The cause of all this stoppage of circula- 
 tion is to be found in the steady outflow of gold to 
 pay foreign labourers for the cloth, the shoes, the 
 iron, and the other things that could be produced by 
 American labour, but which cannot be so produced 
 under our present revenue system. The convulsion 
 
24 PROTECTION IN THE UNITED STATES. 
 
 would have come upon us sooner but for the extra- 
 ordinary demand in Europe for breadstuffs, growing 
 out of huge famines and big wars, and but for the 
 dazzling and magnificent discovery of gold in Cali- 
 fornia, by which hard money, sufficient to buy an 
 empire, has been called into existence and exported 
 to Europe. If we could stop the import of foreign 
 articles, the gold would cease to flow out to pay for 
 them, and money would then again become more 
 abundant, labour would then again be in demand, 
 shoes, clothing, and other commodities would then 
 again be in demand, and men would then cease to 
 starve in the streets of our towns and cities. If it be 
 not stopped the gold must continue to go abroad, 
 and employment must become from ckiy to day more 
 scarce." 
 
 Notwithstanding the depressed conditions, the 
 low tariff party, in control of Congress, in 1857 
 adopted a new tariff law, making even lower rates 
 on some articles, and this remained in force until 
 1861, when the Republican party elected its first 
 President, Abraham Lincoln. That conditions 
 were deplorable during a large share of this Free 
 Trade period, from 1846 to 1861, cannot be doubted, 
 and that they existed in the face of the fact that 
 California was pouring out gold at the rate of 
 about - 10,000,000 a year is also true. During the 
 period public expenditures exceeded receipts by 
 nearly 10,000,000, imports exceeded exports by 
 more than 80,000,000, and the financial condition 
 of the Government during the closing years of the 
 period was such that it could borrow money only 
 by paying high rates of interest. President 
 Buchanan, in a message to Congress during the 
 
TARIFF REDUCTION DEMANDED. 25 
 
 closing years of that period, said that Government 
 obligations could not be negotiated at a rate of 
 less than 12 per cent, interest. Within recent 
 years the Government of the United States has 
 placed nearly 100,000,000 of its bonds at 2 per 
 cent. That conditions during the period described 
 were serious and were apparently due in some 
 degree at least to the low tariff duties is shown by 
 the following extract from the message of Presi- 
 dent Buchanan, a Democrat, sent to Congress 
 December 8th, 1857 : 
 
 " We have possessed all the elements of material 
 wealth in rich abundance, and yet, notwithstanding 
 all these advantages, the country in its monetary 
 interests is at the present moment in a deplorable 
 condition. In the midst of unsurpassed plenty in all 
 the products of agriculture and in all the elements of 
 national wealth, we find our manufactures suspended, 
 our public works retarded, our private enterprises of 
 different kinds abandoned, and thousands of labourers 
 thrown out of employment and reduced to want. The 
 revenue of the Government, which is chiefly derived 
 from imports from abroad, has been greatly reduced, 
 whilst the appropriations made by Congress for the 
 current fiscal year are very large." 
 
 In his message sent to Congress in December, 
 1860, President Buchanan again declared against 
 the low tariff then in existence and adopted 
 by his own party, saying that the financial diffi- 
 culties of the Government required a revision of 
 its schedules, and he recommended a return to 
 specific duties instead of the ad valorem system 
 which had been such a marked feature of the 
 
26 PROTECTION IN THE UNITED STATES. 
 
 Walker tariff and its successor then in operation, 
 saying : 
 
 "Specific duties would secure to the American 
 manufacturer the incidental protection to which he 
 is fairly entitled under a revenue tariff, and to this 
 surely no person should object." 
 
 The message from which the above quotations 
 are made, admitting the failure of the ideal Free 
 Trade of Walker and that which followed it, was 
 the last sent to a Congress by a representative of 
 the low tariff party for twenty-five years. In the 
 following year, 1861, a Republican President and 
 Congress came into power, a protective tariff was 
 enacted within a few weeks of the meeting of 
 Congress, and the protective tariff system remained 
 continuously in operation for thirty-three years. 
 A Democratic President was elected in 1884, but 
 his party did not obtain control of both branches 
 of Congress during his term, and therefore no 
 change in the tariff system was made. It was not 
 until the second election of this Democratic 
 President, Cleveland, in 1892, that a Congress 
 in sympathy with his tariff views was also elected, 
 and more than one year of his term had expired 
 before the protective system fathered by the Re- 
 publican party in 1861, and continued with many 
 modifications during thirty-three years, was re- 
 pealed and a low tariff measure placed upon the 
 statute books. 
 
A REPUBLICAN DOCTRINE. 27 
 
 CHAPTER III. 
 
 PROTECTION BECOMES A REPUBLICAN 
 DOCTRINE. 
 
 WITH the incoming of the Republican party in 
 1861, Protection became more distinctively a party 
 issue than ever before. The chief support for 
 Protection had been found in the Whig party prior 
 to the organization and success of the Republican 
 party, and the Democratic party had been looked 
 upon as supporting low tariff, but lines were never 
 so sharply drawn before as after the incoming of the 
 Republicans. When the Republicans found them- 
 selves in control of the Congress and the presidency 
 in 1861, and the necessity existed for raising large 
 sums of money to carry on the Civil War just 
 beginning, they naturally turned to the tariff and 
 increased the rates ; they made them so high, in 
 fact, that there could be no doubt of their " pro- 
 tective" character. The platform upon which they 
 gained their first national victory declared for 
 Protection in the following words : 
 
 " That while providing revenue for the support of 
 the general government by duties from imports, sound 
 policy requires such an adjustment of these duties as to 
 encourage the development of the industrial interests 
 of the country ; and we commend the policy of the 
 National Exchange which secures to the working men 
 
28 PROTECTION IN THE UNITED STATES. 
 
 liberal wages, to agriculture remunerative prices, to 
 mechanics and manufacturers an adequate reward for 
 their skill, labour, and enterprise, and to the nation 
 commercial prosperity and independence." 
 
 The first tariff Act passed by the Republicans 
 largely increased duties, and was followed by 
 sundry other increases from time to time during the 
 four years of war which followed, which heavily 
 taxed the revenues. As a result of this demand for 
 funds, the tariff legislation during the war period 
 was necessarily crude and unscientific so far as the 
 question of Protection pure and simple was con- 
 cerned. Act after Act was passed as the demands 
 of the war grew, and the demands of the manufac- 
 turers for more and more protection were generally 
 complied with when not absolutely unreasonable. 
 Edward Stanwood, a recent writer on the history 
 of tariff of the United States, says in his work 
 "American Tariff Controversies "(Vol. 1 1., page 129): 
 
 "The extreme character of these tariffs may be 
 judged by the fact that the tariff adopted in 1864 
 made the duty on wool from 3 to 10 cents per 
 pound, and woollen goods, a * compound duty,' partly 
 specific and partly ad valorem, of 24 cents per 
 pound and 40 per cent, ad valorem. On beer the rate 
 was 35 cents per gallon ; on brandy, $2.50 per 
 gallon ; and on refined sugar, 5 cents per pound. 
 In the Bill passed in the following year the com- 
 pound duty system was applied to cotton goods, the 
 rate on the cheapest calicoes being 6J cents per yard 
 and 10 per cent, ad valorem. In this Bill the rate on 
 rails for railways was advanced to $22.40 per ton, and 
 this high rate is looked upon by protectionists as the 
 beginning of the very successful steel rail industry in 
 the United States, and the generally high rates fixed 
 
A REPUBLICAN DOCTRINE. 29 
 
 on articles of this class as the basis of the phenomenal 
 success which has attended the iron and steel industry 
 in this country ever since that date." 
 
 How much these extremely high tariffs were 
 responsible for the great prosperity and business 
 and manufacturing activity which followed it is, of 
 course, impossible to say. The check upon imports 
 and commerce generally due to the war, the with- 
 drawal of large numbers of men from industrial 
 operations, fluctations in currency, the great energy 
 required to furnish the materials of war, foodstuffs 
 and clothing for the large armies in the field, and 
 the fact that the Government was a heavy pur- 
 chaser of all these articles at high prices, made 
 manufacturing and commerce extremely active and 
 profitable, arid it would not be fair to say that the 
 tariff was, of itself/ the cause of any definite share 
 of the conditions that existed from 1861 to 1865. 
 Following the close of the war it was necessary to 
 maintain high rates of taxation to produce funds 
 to meet the interest upon and reduce the principal 
 of the enormous public debt created during the war, 
 and consequently the high tariff was maintained, 
 the Republican party, the party of Protection, being 
 still in power. 
 
 From 1865 to 1870 it was possible to determine 
 in some degree the effect of the tariff upon indus- 
 tries under normal conditions, and this gave a 
 favourable view of the results, so much so that 
 there was no disposition seriously to reduce the 
 general tariff rates. The census of 1870 showed 
 
30 PROTECTION IN THE UNITED STATES. 
 
 that the value of the products of manufacturing had 
 grown from 377,000,000 in 1860 to 846,000,000 
 in 1870. When it is remembered that during a 
 decade of Protection, of which one-half was spent 
 in war, with a large part of the country absolutely 
 devastated, the value of manufactures had grown 
 more than in the entire seventy years under the 
 irregular tariffs preceding 1860, the advocates of 
 protection claimed it was a great triumph for their 
 system. The wealth of the country, as represented 
 by the census, had increased from 3,200,000,000 
 in 1860 to 6,000,000,000 in 1870, despite the 
 great destruction during the war. 
 
 The fact that revenues were redundant and the 
 rates of tariff taxation high upon many articles 
 which were not produced in the United States and 
 therefore were non-competitive, led to a material 
 revision of the tariff in 1870 and again in 1872, a 
 large number of articles of a non- competitive char- 
 acter being put on the free list. From 1861 to 1872 
 about 5 per cent, of the total importations came in 
 free of duty. After 1872 about 25 per cent, were 
 admitted free of duty, but they were non-competing 
 articles. In 1875 occurred another revision and 
 after that date about ^per cent, of the importations 
 were free of duty. Among the articles relieved of 
 tariff duties were tea and coffee, the principle of the 
 protectionists being to remove all taxation from 
 articles which did not compete with domestic pro- 
 duction, especially those which were required by 
 the masses, and to maintain high duties on articles 
 
A REPUBLICAN DOCTRINE. 31 
 
 competing with home production and manufacture. 
 In 1 880 the census showed the value of manufactures 
 in the United States to be 1,073,800,000 and the 
 wealth 8,400,000,000. One feature of the Tariff 
 Act of 1870 may be briefly mentioned in passing. 
 It placed a duty of $28 (5 12s.) per ton on steel 
 rails, with the fixed purpose of developing the home 
 industry. In the year before the passage of the 
 Bill placing this high duty on steel rails, the num- 
 ber of tons produced in the United States was 
 8,6 1 6. By 1875 the manufacture had developed to 
 259,699 tons; by 1881, it was 1,210,285 tons, and in 
 1883 the duty was reduced to $17 per ton, and in 
 1890 to $13 per ton. From $106 a ton in 1870 
 the price, through domestic competition, fell to 
 $28 a ton in 1902. 
 
 In 1883 another revision of the tariff was made 
 by the Republicans, in part for the purpose of re- 
 ducing the revenues and in part in recognition of 
 the demand of the opposition party for a reduction of 
 duties on certain articles. The rates of duty were 
 reduced on cotton and woollen goods, on raw wool, 
 on some manufactures of iron and steel, and a 
 limited number of agricultural products. It was 
 claimed that the rates on wool and woollens were 
 reduced below the point of safe protection, and that 
 as a result the sheep industry suffered. Certain it 
 is that the number of sheep in the country fell off 
 several millions in the few years following this 
 Act. 
 
 In 1884 the Democrats, after having been out of 
 
32 PROTECTION IN THE UNITED STATES. 
 
 power since 1860, regained the presidency by the 
 election of Grover Cleveland. Space will not 
 permit a detailed examination of the causes that 
 led to this political reversal, but it is admitted that 
 a growing feeling in favour of " tariff reform," that 
 is, a reduction of duties that were regarded as 
 oppressive and unjust, and in the interest of 
 manufacturers as opposed to the best interests of 
 the people at large, was one of the most potent in- 
 fluences in breaking nearly a quarter of a century of 
 Republican rule. But although Mr. Cleveland was 
 elected his election did not carry with it the control 
 of both Houses of Congress, as under the American 
 Darliamentaifosvstem a Bill must receive the assent 
 of both Houses of Congress to become a law. The 
 American President has no power to initiate legis- 
 ation ; he can act merely in an advisory and recom- 
 mendatory capacity. Mr. Cleveland strongly urged 
 upon Congress the passage of a low tariff Bill, and 
 although a Bill was introduced in response to his 
 recommendation it did not become a law, and 
 Mr. Cleveland's term ended with a protective tariff 
 law on the statute books. 
 
 From 1884 to the second election of Mr. 
 McKinley in 1900 electoral campaigns were 
 fought with the tariff subordinating every other 
 issue. Mr. Cleveland was defeated at the next 
 election, the tariff being the leading question, and 
 Mr. Harrison, a Republican, succeeded him. Mr. 
 Harrison took his seat in 1889, and the following 
 year the famous McKinley Bill became a law. 
 
A REPUBLICAN DOCTRINE. 33 
 
 Although the country had set the stamp of its 
 disapproval on Free Trade, the Republicans could 
 not ignore the growing demand for tariff reform, 
 which they recognised by pledging themselves to 
 revise the tariff if entrusted with the government. 
 Mr. McKinley's Bill, which was entitled " A Bill to 
 reduce the revenue and equalise duties on im- 
 ports," was a bitter disappointment alike to free 
 traders and tariff revisionists. It is true that it 
 made several additions to the free list and 
 removed the duty on raw sugar, but its general 
 tendency was to increase duties and to make the 
 average ad valorem rate as high as had ever been 
 imposed. The Bill increased the duties on wool 
 and woollens, placed a high duty on tin-plate to 
 foster the tin-plate industry in the United States : 
 imposed equally high duties on farm products to 
 prevent the importation of agricultural products 
 from Canada and elsewhere ; reduced the duty on 
 binding twine for the benefit of the farmers using it 
 with their self-binding reapers ; levied a high duty 
 on pearl buttons to aid in building up a pearl button 
 industry in the United States ; removed the duty 
 on raw sugar, and authorised the payment of a 
 bounty on sugar produced in the United States, 
 and was, in fact, in the words of one of its 
 admirers, " the most thoroughly scientific measure 
 of Protection ever passed up to that time." Under 
 it the tin-plate industry and the pearl button 
 industry were established and manufacturing 
 generally was prosperous. 
 
 P.U.S. D 
 
34 PROTECTION IN THE UNITED STATES. 
 
 Protectionists hailed the Bill as a triumph for 
 their principles and the embodiment of all fiscal 
 wisdom, but the country was not so enthusiastic ; 
 in fact, it was angry and longed for an opportunity 
 to display its resentment. It found it in 1892, when 
 it swept the Republicans out of power (it had already 
 defeated Mr. McKinley when he offered himself 
 for re-election to Congress), and for the second 
 time Mr. Cleveland sat in the White House, while, 
 to make the triumph complete, there was a Demo- 
 cratic majority in both Houses of Congress. This 
 was the first time in thirty-two years that the 
 Democratic party had a free hand to bring the 
 tariff back to Free Trade principles. But, strangely, 
 it found that there had grown up within itself a 
 strong Protectionist sentiment. While the party 
 had in its National Conventions usually declared 
 for a "revenue tariff," these declarations were in 
 many cases coupled with a reservation that the 
 revenue duty should be so adjusted as to give 
 "incidental Protection." Almost imperceptibly 
 there had grown up among the members of the 
 party a Protection sentiment, due, doubtless, in 
 some degree to the influence of the manufacturing 
 industries upon the leaders in their respective 
 sections of the country. When an attempt was 
 made to enact a low tariff the party was divided 
 within itself, and so seriously divided that, despite 
 the resolute low tariff views of the vigorous 
 President, he was unable to carry his plan through 
 Congress without great modification. Nearly a 
 
A REPUBLICAN DOCTRINE. 35 
 
 year and a-half of his administration passed before 
 the measure introduced in Congress shortly after 
 his inauguration became a law, and it emerged from 
 its final vote in such unrecognizable condition that 
 President Cleveland refused to be responsible for it 
 by affixing his signature to the Act, and allpwed it 
 to become a law without his approval. 
 
 In the revised and re-revised form in which it 
 finally became a law, it was not by any means 
 so radical a " Free Trade " measure as had been 
 expected, and not, of itself, capable of so seriously 
 affecting the manufacturing interests as had been 
 feared. But much of the harm had already been 
 done. For nearly two years, from the date of the 
 election of Cleveland in November, 1892, to the 
 passage of the Act in August, 1894, the business 
 men of the country had waited in uncertainty, 
 unable to determine what changes would be made 
 in tariff rates and prices of foreign commodities, 
 and this uncertainty, coupled with grave financial 
 complications, due to the fear of continued silver 
 inflation and the country going on a silver basis, 
 led to general business depression even before the 
 Tariff Bill became a law. Following its final enact- 
 ment there was further depression and suspension 
 of work among those manufacturers seriously 
 affected, and the result was the great commercial 
 stagnation from 1893 to 1896. In those years a 
 large number of factories were closed, hundreds of 
 thousands of men were thrown out of employment, 
 business failures were numerous, many railroads 
 
 D 2 
 
36 PROTECTION IN THE UNITED STATES. 
 
 went into the hands of receivers, gold was hoarded, 
 and the money in circulation fell to an unusually 
 low total. Prices of farm products were low, 
 wages were low, employment was scarce, and 
 suffering and hunger were common. "Armies" 
 of the unemployed paraded from city to city, and 
 one of the largest marched from far in the interior 
 to Washington and drew up in front of the Capitol, 
 where Congress was in session, demanding the 
 adoption of measures for the relief of labour. 
 
 It was not surprising, therefore, that in the next 
 presidential election the Republican party was 
 returned to power. The protectionists asserted 
 that much of the depression and losses and suffer- 
 ing was directly chargeable to the low tariff and 
 injurious foreign competition ; that the fear of an 
 even more radical tariff and the long period of 
 uncertainty and general dislocation of business 
 were equally potent causes in destroying public 
 confidence and injuring credit. But the truth of 
 history compels the conclusion, always maintained 
 by Democratic free traders, that they were made 
 vicarious victims of Republican folly. Much of 
 the distress of that time was undoubtedly due to 
 vicious financial legislation, to the constant dilution 
 of the currency with silver, which menaced the 
 power of the Government to maintain the parity 
 between gold and silver and threatened the country 
 being forced to a silver basis. Silver coinage 
 was Republican legislation ; the Republicans were 
 responsible for it and kept it on the statute books, 
 
A REPUBLICAN DOCTRINE. 37 
 
 and they resisted its repeal. That finally it was 
 repealed was due solely to the courage and 
 tenacity and wisdom of President Cleveland. To 
 accomplish this he was forced to fight his own 
 party as well as his political opponents, but he 
 never swerved, in the end he won, and earned the 
 gratitude of men intelligent enough to be able to 
 appreciate his great services. 
 
 But it is idle to attempt a too minute analysis 
 of national psychology as manifested at a general 
 election. The country was in no mood to weigh 
 causes in a delicate balance or to apportion with 
 exact and discriminating justice the proper meed 
 of responsibility. Mr. McKinley had been nomi- 
 nated by the Republicans, Mr. McKinley's name 
 was the very synonym of a protective tariff, and 
 the Republicans promised the electorate that if 
 they were successful peace and plenty would once 
 more come upon the land. Mr. McKinley was 
 elected in November, 1896, and his election was 
 immediately accepted as an assurance that the 
 breaches in the ramparts of Protection would be 
 repaired and the walls would be made so high 
 that they would be invulnerable to assault. The 
 fear of silver no longer existed. Heeding the 
 lesson taught them by Mr. Cleveland, the Repub- 
 licans stood irrevocably committed to the gold 
 standard. 
 
 With Mr. McKinley Protection was more than 
 a belief, it was almost an immanent conviction. 
 A new tariff law, he held, was vital, and if a thing 
 
38 PROTECTION IN THE UNITED STATES. 
 
 were to be done the sooner it was done the better. 
 A few days after his inauguration the new Presi- 
 dent called Congress together in extra session, 
 and in July, 1897, the "Dingley Act," the existing 
 tariff law of the United States, was placed on 
 the statute books. It was a radically protective 
 measure, the only tariff law since the first one 
 enacted in 1789 that had declared itself as having 
 for one of its objects the encouragement of manu- 
 facturing. Its title was " An Act to provide 
 revenue for the Government, and encourage the 
 industries of the United States." 
 
 This Act was essentially protective. Raw sugar, 
 which had been put on the free list under the 
 McKinley tariff, and had been made dutiable by 
 the Democratic tariff of 1894, was also made 
 dutiable by the Dingley Act, but apart from this, 
 the free list was not materially reduced as com- 
 pared with the McKinley Act, but was somewhat 
 increased. Under the Dingley law about 44 percent. 
 of the imports came in free of duty. In the calendar 
 year 1903 the value of merchandise imported free 
 of duty was 85,400,000, and of merchandise 
 subject to duty 1 1 1,600,000. Of the free imports 
 over 60,000,000 represent the value of materials 
 for use in manufacturing, and nearly 21,000,000 
 foodstuffs. Of the dutiable imports, 57,000,000 
 were manufactures and luxuries, 1 7,600,000 partly 
 manufactured articles for use in manufacturing, 
 21,200,000 foodstuffs, and 15,800,000 manu- 
 facturers' materials. 
 
A REPUBLICAN DOCTRINE. 39 
 
 During the period in which the Dingley tariff 
 law has been in existence the prosperity of the 
 United States has been very great, probably 
 greater than in any preceding period, and the 
 exportation of manufactures has begun to be an 
 important feature in the industries and commerce 
 of the country. Exports of manufactures, which 
 in 1896 were 4 5, 600,000, were in 1903 86,600,000, 
 and have continued about 80,000,000 since that 
 time, despite the unusual home demand due to 
 general prosperity. The money in circulation has 
 increased more than 50 per cent, since 1896, 
 and the deposits in the banks of the country 
 have doubled. The census of 1900 showed the 
 value of the manufactures of the country to be 
 2,600,000,000, or more than twice as much as in 
 1880, and the wealth of the country 18,800,000,000, 
 also twice as much as that of 1880. 
 
 This prosperity protectionists ascribe solely to 
 the beneficent effect of the high protection secured 
 by the Dingley Act ; to the preservation of the 
 home market from foreign invasion, and the conse- 
 quent steady employment at high wages of 
 American labour. Free Traders do not deny the 
 existence of prosperity it is so palpably obvious 
 that its denial is impossible but they contend that 
 the high tariff has enabled manufacturers to charge 
 excessive prices for commodities, and thus lay an 
 oppressive burden upon the country. 
 
40 PROTECTION IN THE UNITED STATES. 
 
 CHAPTER IV. 
 THE PHILOSOPHY OF PROTECTION. 
 
 THE philosophy of Protection, the objects sought 
 to be attained by protecting and fostering American 
 industries, and the underlying motives that ani- 
 mated the fathers of Protection in America can be 
 briefly stated in three sentences. 
 
 First : The full development of the industrial 
 resources of the country through an interchange of 
 its natural products for manufactures produced by 
 its own workmen ; 
 
 Second : The greatest good to the greatest 
 number by providing means of employment for all 
 classes engaged in gainful occupations ; 
 
 Third : To establish a standard of living and 
 wages that should enable the labourer to receive 
 proper remuneration and protect him from the 
 competition of lower paid foreign labour. 
 
 This philosophy, therefore, was based on economic 
 as well as humanitarian motives ; and the more 
 closely one examines the writings of the early 
 protectionists the more sensibly one is impressed 
 with the conviction that they had a definite pur- 
 pose in view, and love of humanity influenced them 
 no less than a desire to evolve an economic system 
 that should enable a new, untried, and sparsely- 
 
PHILOSOPHY OF PROTECTION. 41 
 
 populated country to compete with countries rich 
 in all that they were poor in. Theirs was no 
 chance system, the offspring of greed and ignor- 
 ance. Intuitively or instinctively they knew that 
 national happiness and national strength cannot 
 exist when the masses are in hopeless poverty ; 
 when the few are prosperous and the many are 
 poor. Whatever the consequences of Protection 
 may be to-day and those results are still a matter 
 of opinion in fostering monopoly or creating dis- 
 proportionate wealth, certain it is that the idea of 
 helping a favoured few, or setting up an aristocracy 
 of wealth, was not in the minds of the originators 
 of Protection. If as a result of Protection the 
 multitude was prosperous, many men were made 
 rich, and a few became possessed of great wealth, 
 that was inevitable and not to be deplored, because 
 prosperity rested on the solid foundation of the 
 welfare of the multitude. 
 
 The purpose of Protection, as an acknowledged 
 authority on the subject has pointed out, is an 
 endeavour to keep society dynamic and progres- 
 sive and to prevent it from becoming static. Pro- 
 tection, Patten says, " ceases to be an isolated 
 exception to the general passive policy which it 
 has been popular to advocate, and becomes a part 
 of the fixed national policy to increase the value of 
 labour with the increase of productive power, and 
 to aid in the spread of knowledge and skill and an 
 adjustment of its people to its environments." 
 Protection, therefore, does for the individual what 
 
42 PROTECTION IN THE UNITED STATES. 
 
 the individual is incapable of doing for himself 
 unaided, not for the benefit of the individual but 
 for the good of the mass, in which the individual, 
 of course, shares. 
 
 Given a great country with great variety of 
 soil and climate, and such wealth of mines and 
 forests that within its boundaries are produced 
 most of the requirements of man, and to this add 
 a population large enough to furnish the necessary 
 labour to convert those products into a condition 
 for man's use, the supporters of Protection urge 
 that manufacturing may be, by their plan of opera- 
 tion, developed to its highest stage and through 
 the interchange of manufactures for the products 
 of the field and forest and mine, create a great 
 international market which shall so diversify 
 industry as to give full and varied employment to 
 its great population. By this plan, it is urged, the 
 faculties of the individual may be more highly 
 advanced through the opportunity afforded to 
 adapt himself to such employment and industry 
 as is best fitted to his tastes and abilities, and the 
 producing power of the nation is increased. 
 
 This was the theory upon which the early pro- 
 tectionists, from the time of Alexander Hamilton, 
 who has been termed the " father of Protection," 
 have based their argument and their work in 
 behalf of that doctrine and of diversified industries 
 in the United States. In a word, it may be 
 said that the theory of Protection is the highest 
 development of man of the citizen and the 
 
PHILOSOPHY OF PROTECTION. 43 
 
 combination of the several tastes and talents to 
 be found among a great mass of people in such 
 manner that the interchange of their products shall 
 supply their common wants and offer to the 
 markets of the world a surplus which their 
 industry and skill, stimulated through domestic 
 competition, creates. Whether this theory has 
 been sustained each must judge for himself, but it 
 is an undoubted fact, a fact admitted by all, that 
 under the system thus developed there has grown 
 up the greatest manufacturing industry that the 
 world has known, and simultaneously, and as a 
 part of it, the greatest industry in agriculture, in 
 mining, and in international transportation which 
 the world affords to-day. 
 
 The agricultural products of the United States 
 exceed those of any other country ; its mines and 
 mining industries are the greatest of the world and 
 the most highly developed ; its manufactures which, 
 according to Michael G. Mulhall, were in 1860 
 less than those of Germany, France, or the United 
 Kingdom, were, according to the same authority, 
 in 1894 more than those of any two of the nations 
 named, and it may be safely said that they now 
 exceed in value those of the three nations com- 
 bined. In 1860 Mr. Mulhall estimated the value 
 of the manufactures of the United States to be 
 381,400,000 ; those of Germany 399,000,000; 
 France 418,400,000; and those of the United 
 Kingdom 561,000,000. In 1888 he again esti- 
 mated the value of the manufactures of the four 
 
44 PROTECTION IN THE UNITED STATES. 
 
 countries, putting those of the United States at 
 1,404,400,000; Germany 567,400,000; France 
 472,000,000, and the United Kingdom798,ooo,ooo. 
 Thus, in the short period from 1860 to 1888, a period 
 of continuous Protection in the United States, the 
 United States, according to this authority, ad- 
 vanced from the foot to the head of the list of 
 the world's great manufacturing nations. In 1894 
 he again estimated the value of the manufactures 
 of the four nations, giving the United States 
 i ,899,600,000 ; Germany 671,400,000; France 
 5 80,000,000, and theUnited Kingdom 8 5 2,600,000. 
 Thus, according to Mulhall, the manufactures of 
 France from 1860 to 1894 increased a little over 
 40 per cent, in value ; those of the United Kingdom 
 slightly in excess of 50 per cent. ; those of Germany 
 about 70 per cent., and those of the United States 
 nearly 400 per cent. 
 
 Taking the official figures of manufactures in the 
 United States which are collected by the decennial 
 census, the gross value of the manufactures was 
 put by the census of 1850 at 203,800,000 in 
 round terms; in 1860 at 377,000,000; in 1870 
 at 846,400,000; in 1880 at 1,073,800,000; in 
 1890 at 1,874,400,000, and in 1900 at 
 2,607,800,000. 
 
 Another factor in the industrial development of 
 the people of the United States is found in the 
 absolute freedom of interchange among its people. 
 While a high tariff wall, the highest which the 
 world knows, is erected at its border for the 
 
PHILOSOPHY OF PROTECTION. 45 
 
 admitted purpose of excluding, or at least dis- 
 couraging, competitive manufactures or products, 
 the most perfect freedom of interchange exists 
 between the States and between the great climatic 
 and productive sections. Thus, the cotton of the 
 South passes freely to the manufacturing centres 
 of New England, whose manufactures are sold in 
 the producing regions of the South ; the agricul- 
 tural products of the Mississippi valley are freely 
 exchanged for the manufactures of the East ; the 
 iron and copper of the lake region are sent to the 
 manufacturing sections and there exchanged for 
 manufactures and coal and other commodities. 
 The wool and the products of the soil of the 
 country west of the Mississippi find a market 
 North as well as South ; the fruits and grain and 
 minerals of the Pacific coast make their way into 
 every section of the land and are exchanged for the 
 manufactures, the foodstuffs and even for consider- 
 able quantities of manufacturers' materials which 
 are now being utilised by the newly developed 
 manufacturing industries of the Pacific coast. 
 Coincident with this great interchange have steadily 
 grown up new manufacturing industries in all parts 
 of the country. The development of coal mines in 
 the South in the immediate vicinity of the cotton 
 fields suggested the wisdom of manufacturing 
 where the raw material and the power could be 
 brought together with the minimum of transporta- 
 tion. In western Pennsylvania, Ohio, and Illinois 
 the proximity of coal and iron created great iron 
 
46 PROTECTION IN THE UNITED STATES. 
 
 manufacturing industries ; still further west and 
 north the abundant supply of coal and timber 
 lying side by side make possible the development 
 of industries for the production of agricultural 
 implements, furniture and lumber, and on the 
 Pacific coast various manufacturing industries are 
 now being developed with great success, the power 
 being in part supplied by electricity generated in 
 the mountain streams scores of miles distant from 
 the factory, and by the use of petroleum, which is 
 found in abundance, as a substitute for coal. 
 
 This theory of Protection, the stimulation of all 
 classes of domestic industries and the development 
 of man to his highest stage of production through 
 interchange, has been that proclaimed by the sup- 
 porters of the protective doctrine from the earliest 
 period down to the present time. While the first 
 Tariff Act declared in its preamble, as one of its 
 principles, "the encouragement and protection of 
 manufactures," the theory of Protection was first 
 distinctly and definitely started by Alexander 
 Hamilton, the first Secretary of the Treasury, who, 
 in 1790, was directed by Congress to " prepare and 
 report to this House a proper plan or plans con- 
 formable to the recommendations of the President 
 of the United States in his speech to both Houses 
 of Congress for the encouragement and promotion 
 of such manufactories as will tend to render the 
 United States independent of other nations." In 
 that report, which is still regarded by protectionists 
 as an unanswerable presentation of the theory of 
 
PHILOSOPHY OF PROTECTION. 47 
 
 Protection, Hamilton, after calling attention to the 
 rapid extension of settlement in the United States 
 and the uncertainty of relying upon foreign markets 
 for the surplus of agricultural products, says : 
 
 " To secure such a market there is no other expe- 
 dient than to promote manufacturing establishments. 
 This idea of an extensive domestic market for the 
 surplus produce of the soil is of the first consequence. 
 It is of all things that which most effectually conduces 
 to a flourishing state of agriculture. By their tendency 
 to secure a more certain market for the surplus 
 produce of the soil they would at the same time 
 cause lands which were under cultivation to be better 
 improved and more attractive. And while by their 
 influence the condition of each individual farmer would 
 be ameliorated, the total mass of agricultural production 
 would probably be increased. The multiplication 
 of manufactories not only furnishes the market for 
 those articles which have been accustomed to be pro- 
 duced in abundance in the country, but it likewise 
 creates a demand for such as were either unknown or 
 produced in considerably small quantities. The 
 bowels as well as the surface of the earth are to be 
 ransacked for articles which were before neglected." 
 
 This theory of Hamilton, proclaimed more than 
 a century ago, has, according to the belief of the 
 supporters of Protection, been thoroughly justified 
 by the experience of the century, and especially 
 of the forty years since Protection became prac- 
 tically a permanent part of the economic system of 
 the country. The value of manufactures during 
 the sixty years from 1800 to the date at which 
 Protection was definitely adopted had grown to 
 only 377,000,000; in the forty years from 1860 
 to 1900 it grew to 2,607,800,000. In proof that he 
 
48 PROTECTION IN THE UNITED STATES. 
 
 was justified in the belief that agriculture would 
 be rapidly developed under Protection, pro- 
 tectionists point to the fact that the value of farms 
 and farm property, which had reached only 
 1,600,000,000 in 1860 was, in 1900, forty years 
 later, .4,000,000,000. In proof that his prediction 
 that the "bowels of the earth as well as the surface 
 of the earth" would be "ransacked for articles which 
 were before neglected " was justified, they refer to 
 the pig-iron production of the United States, which 
 from 821,000 tons in 1860 increased to 18,000,000 
 tons in 1903 ; to the fact that in 1860 the copper 
 production was 7,500 tons, and in 1902 286,000,000 
 tons, and that the .coal production had increased 
 from 8,513 tons in 1860 to 265,000,000 tons in 
 1902, or more than the coal production of any 
 other country, while pig-iron and copper also 
 exceeded that of any other country. 
 
 Another distinguished advocate of Protection, 
 Henry Clay, in an address in the House of Repre- 
 sentatives, in 1824, thus stated the philosophy of 
 Protection : 
 
 " The greatest want of civilised society is a market 
 for the sale and exchange of the surplus of the pro- 
 duce of its members. This market may exist at home 
 or abroad, or both ; it must exist somewhere if society 
 prospers ; and wherever it does exist it should be 
 competent to the absorption of the entire surplus of 
 production. It is most desirable that there should be 
 both a home and foreign market. But with respect 
 to their relative superiority I cannot entertain a doubt. 
 The home market is first in order and paramount in 
 importance. 
 
PHILOSOPHY OF PROTECTION. 49 
 
 " Our agricultural is our greatest interest. We 
 have seen that an exclusive dependence upon a 
 foreign market must lead to still severer distress, to 
 impoverishment, to ruin. We must then change 
 somewhat our course. We must give a new direction 
 to some portion of our industry. We must speedily 
 adopt a general American policy. Still cherishing 
 the foreign market, let us create a home market to 
 give further scope to the consumption of the produce 
 of American industry. Let us counteract the policy 
 of foreigners and withdraw the support which we now 
 give to their industry and stimulate that of our own 
 country. 
 
 " The creation of a home market is not only 
 necessary to procure for our agriculture a just reward 
 of its labours, but it is indispensable to obtain a 
 supply of our necessary wants. It is in vain to 
 tantalise us with the greater cheapness of foreign 
 fabrics ; there must be the ability to purchase if an 
 article is to be obtained whatever may be the price at 
 which it is sold. The superiority of the home market 
 results, first, from its steadiness and comparative 
 certainty at all times ; secondly, from the certainty of 
 reciprocal interest ; thirdly, from its greater security, 
 and, lastly, from an ultimate and not distant aug- 
 mentation of consumption from increased quantity 
 and reduced prices." 
 
 A vital and fundamental difference between the 
 American protectionist and the American free 
 trader has been until the last few years a difference 
 of opinion as to the relative merits of the home and 
 foreign market. " The home market is first in 
 order and paramount in importance," says Clay, 
 and that was the feeling of every protectionist who 
 remained indifferent to an export trade in manu- 
 factures so long as the home market was protected 
 from foreign competition. The free trader, on the 
 
 P.U.S. E 
 
59 PROTECTION IN THE UNITED STATES. 
 
 other hand, always appreciated the value of the 
 foreign market and held that it would be to the 
 material advantage of the United States to sur- 
 render a fraction of the home market for the sake 
 of gaining the foreign market. " If we trade only 
 among ourselves," was the homely illustration used 
 by a stump orator, "it is like a couple of boys 
 trading jack-knives. What we want are the jack- 
 knives of England and France and Germany." | 
 
 During the last five years the American pro- 
 tectionist has become as keen to possess the foreign 
 market as the free trader, but this desire has not 
 changed his belief in the wisdom of Protection. 
 He still adheres to this conviction that the home 
 market must be preserved for the home manu- 
 facturer, and that by retaining the home market he 
 can better compete with the foreigner on his own 
 ground, the reasons for which are more fully 
 explained in subsequent chapters. The free trader 
 always retorted that foreign nations would not buy 
 from America unless America bought from them, 
 to which the protectionist points to the increase of 
 exports of manufactures under the high tariff rates 
 of the Dingley law as a fact which can afford to 
 defy all the theories of Free Trade doctrinaires. 
 
 Daniel Webster, one of the foremost American 
 statesmen, a member of the House of Representa- 
 tives, a member of the United States Senate, and 
 twice Secretary of State, was originally an oppo- 
 nent of Protection, but in 1828 he supported the 
 views expressed by Mr. Clay, and from that time 
 
PHILOSOPHY OF PROTECTION. 51 
 
 forward was an earnest advocate of Protection. 
 In a speech made in the Senate in 1846 he said: 
 
 " The interest of every labouring community 
 requires diversity of occupations, pursuits and objects 
 of industry. The more that diversity is multiplied 
 or extended the better. To diversify employment is 
 to increase employment and enhance wages. And, 
 Sir, take this great truth ; place it on the title page 
 of every book of political economy intended for the 
 use of the Government ; put it in every farmer's 
 almanac ; let it be the heading of the column of 
 every mechanic's magazine ; proclaim it everywhere 
 and make it a proverb that where there is work for 
 the hands of man there will be work for the teeth ; 
 where there is employment there will be bread. It is 
 a great blessing to the poor to have cheap food, but 
 greater than that, prior to that, and of still greater 
 value is the blessing of being able to buy food by 
 honest and respectable employment. Employment 
 feeds and clothes, and instructs. Employment gives 
 health, sobriety and morals. Constant employment 
 and well paid labour produce, in a country like ours, 
 general prosperity, contentment and cheerfulness." 
 
 The exponents of Protection, especially those of 
 half a century ago, when the country rapidly 
 veered from high to low tariff and appeared to 
 have no settled economic convictions, always felt 
 it necessary to dwell upon the importance of diver- 
 sified industries and the folly of the United States 
 being dependent upon foreign countries for its 
 manufactures. 
 
 " A nation which would be prosperous," Horace 
 Greeley said in an address delivered in New York in 
 1843, "must prosecute various branches of industry 
 and supply its vital wants mostly by the labour of its 
 
 E 2 
 
52 PROTECTION IN THE UNITED STATES. 
 
 own hands. Second, there is a natural tendency in a 
 comparatively new country to become and continue 
 an exporter of grain and other raw staples, and an 
 importer of manufactures. Third, it is injurious to 
 the new country to thus continue dependent for its 
 supplies of clothing and manufactured fabrics on the 
 old country. Fourth, that equilibrium between agri- 
 culture, manufactures, and commerce which we need, 
 can only be maintained by means of protective 
 duties. Fifth, protection is necessary and proper as 
 well to create a beneficent adjustment of our national 
 industry." 
 
 In the same address Mr. Greeley advanced an 
 opinion that of recent years has been relied upon 
 by protectionists as one of the chief virtues of 
 Protection. " I am equally confident," said Mr. 
 Greeley, "that the shutting out of foreign com- 
 petition from our markets for their articles of 
 general necessity and liberal consumption which 
 can be made here with as little labour as anywhere, 
 would be followed by a corresponding result a 
 reduction of the price to the consumer at the same 
 time with increased employment and reward to our 
 producing sections." The tariff", protectionists say, 
 reduces prices to the consumer through competi- 
 tion. I deal with that phase of the subject more 
 in detail in another chapter. 
 
 The nearer we come to the present day the 
 greater the insistence of protectionists upon the 
 effect of Protection in reducing the cost of all 
 commodities to the consumer. In his "Twenty 
 Years of Congress " (published in 1884 and 1886), 
 James G. Elaine, who was the unsuccessful 
 
PHILOSOPHY OF PROTECTION. 53 
 
 Republican candidate for the presidency when Mr. 
 Cleveland was elected for the first time, says : 
 
 " The essential question which has grown up 
 between political parties in the United States 
 respecting our foreign trade, is whether the duty 
 should be laid upon any import for the direct object 
 to protect and encourage the manufacture of the same 
 article at home. . . . The Protectionist starts with 
 the proposition that whatever is manufactured at 
 home gives work and wages to our own people, and 
 that if the duty is even put so high as to prohibit 
 the import of the foreign article, the competition of 
 home producers will, according to the doctrine of Mr. 
 Hamilton, rapidly reduce the price to the consumer. 
 He (the Protectionist) gives numerous illustrations of 
 articles which, under the influence of home competi- 
 tion, have fallen in price below the price at which 
 the foreign article was furnished when there was no 
 Protection ; that the reduction was made to compete 
 with the American product, and that the former price 
 would probably have been maintained so long as the 
 importer had the monopoly of our market. Thus our 
 protective tariff reduced the price in both countries. 
 This has notably been the case with steel rails, the 
 production of which in America has reached a magni- 
 tude surpassing that of England. Meanwhile rails 
 have largely fallen in price to the consumer ; the 
 home manufacturer has disbursed countless millions 
 of money among labourers, and has added largely to 
 our industrial independence and to the wealth of the 
 world. . . . Protection in the perfection of its design 
 does not invite competition from abroad, but is based 
 on the contrary principle that competition at home 
 will always prevent monopoly on the part of the 
 capitalist, assure good wages" to the labourer, and 
 defend the consumer against the evils of extortion." 
 
 The late President McKinley, whose ardent and 
 consistent advocacy of Protection was largely 
 
54 PROTECTION IN THE UNITED STATES. 
 
 responsible for his great reputation and popularity 
 with the people of his country, in an introduction 
 to a work entitled " Protection and Reciprocity 
 Illustrated," written in 1892, stated the purposes 
 of Protection as contrasted with low or revenue 
 tariffs, in this language : 
 
 " The revenue tariff accomplishes but a single 
 purpose that of raising revenue ; it has no other 
 mission, while a protective tariff accomplishes this 
 and more : it brings revenue to the American treasury 
 and discriminates in favour of the American citizen. 
 The revenue tariff invites the product of foreign 
 labour and foreign capital to occupy our market free 
 from any restriction, in competition with our own 
 labour and capital. The protective tariff invites the 
 foreign labour and foreign capital which are neces- 
 sary to the wants of the people and which we cannot 
 produce in the United States to occupy our markets 
 and go untaxed to the people, but insists that every 
 foreign product, the like of which is produced at home 
 or can be produced successfully in quantities capable 
 of supplying the domestic consumption, shall, when- 
 ever necessary to maintain suitable rewards to our 
 labour, bear a duty which shall not be so high as to pro- 
 hibit importations, but at such a rate as will produce 
 the necessary revenues and at the same time not destroy 
 but encourage American production." 
 
 In an address at Atlanta, Georgia, in 1888, Mr. 
 McKinley said : 
 
 "The chief obstruction in the way of a revenue 
 (low) tariff is the wages paid American workmen, 
 and any return to that policy involves a reduction of 
 the cost of labour. We cannot afford to have cheap 
 labour in the United States. Cheap labour means 
 cheap men and dear money. . . . Few men before me 
 but have found in the course of their lives that that 
 
PHILOSOPHY OF PROTECTION. 55 
 
 which was cheapest, when measured by the mere 
 price, was dearest when they were without money or 
 employment or when their products could find no 
 market, or, finding it, commanded no price commen- 
 surate with the labour required to produce them. 
 Primarily it is labour that is interested most in this 
 question of Protection. The man with money can 
 seek other avenues of profit or investment, or wait 
 for his dividends, but the labourer cannot wait for 
 his dinner, and the United States do not want citizens 
 who make Presidents, Senators and Representatives, 
 to be in a condition of dependence and destitution." 
 
 The supporters of Mr. McKinley's theory of 
 Protection and of the amelioration of labour and 
 the prosperity of the masses through Protection, 
 base their argument on the historical fact that under 
 Protection labour was prosperous, wages high and 
 employment easy to procure ; that during the 
 period of low tariff, from 1894 to Mr. McKinley's 
 election as President in 1897, wages were low, 
 employment scarce, destitution and want prevalent 
 among the labouring classes, and a general depres- 
 sion existed throughout the country ; following the 
 re-enactment of the protective tariff, immediately 
 after the inauguration of President McKinley, 
 manufacturing activities were resumed, wages again 
 advanced, employment of labour was general, and 
 prosperity has continued throughout the United 
 States down to the present time. 
 
 The present tariff law of the United States is 
 known as the Dingley Tariff Act by reason of the 
 fact that Mr. Dingley, a member of Congress from 
 Maine, was chairman of the committee which 
 
56 PROTECTION IN THE UNITED STATES. 
 
 framed the Act and its most active and ardent 
 advocate in the House of Representatives. In his 
 speech in support of the Act Mr. Dingley defined 
 the protective system in brief terms as follows : 
 
 " Our problem is to provide adequate revenues from 
 duties on imports to carry on the Government, and in 
 imposing duties to secure this result to so adjust them 
 as to secure to our own people the production and 
 manufacture of such articles as we can produce or 
 make for ourselves without natural disadvantages, 
 and thus provide more abundant opportunities for 
 our labour. For rest assured that no economic policy 
 will prove a success unless it shall in some manner 
 contribute to opening up employment to the masses 
 of our people at good wages. When this shall be 
 accomplished, and thus the purchasing power of the 
 masses is restored, then and not until then will prices 
 cease to feel the depressing effect of under-consump- 
 tion and the prosperity of our people rise to the 
 standard of 1892. The secret of the prosperity of the 
 United States up to 1893 was the fact that our people 
 were at work at good wages and thus had large 
 purchasing power. It was this large consuming and 
 purchasing power that made our markets the best 
 in the world that maintained prices. By our tariff 
 rates, in short, we made this country the envy and 
 admiration of the world." 
 
 The Tariff Act which Mr. Dingley framed and 
 supported in the address above alluded to, is the 
 highest protective tariff the United States has ever 
 known, and was the first Tariff Act subsequent to 
 that of 1789 which specifically stated as one of its 
 purposes " to encourage the industries of the United 
 States." In support of the arguments which Mr. 
 Dingley advanced when his Bill was under con- 
 sideration, protectionists cite the production of 
 
PHILOSOPHY OF PROTECTION. 57 
 
 pig-iron, that barometer of business conditions, 
 which increased from 8,623,000 tons in 1896, the 
 year preceding the enactment of the Dingley law, 
 to 18,000,000 tons in 1903 ; that coal production, 
 another measure of business and manufacturing 
 activity, increased from 171,416,000 tons in 1896 to 
 269,081,000 tons in 1902; that copper production 
 grew from 205,384,000 tons in 1896 to 294,423,000 
 in 1902 ; the value of farm animals from 345,600,000 
 in 1896 to 597,800,000 in 1902 ; exports of manu- 
 factures from the United States increased from 
 45,714,200 in 1896 to 81,505,200 in 1903, and 
 the total exports of all classes of merchandise from 
 174,640,000 in 1896 to 278,446,000 in 1903. 
 
 Commenting upon the growth of prosperity in 
 the United States since 1870, a period of almost 
 continuous Protection, Mr. O. P. Austin, Chief of 
 the Bureau of Statistics, said in a recent address 
 before the New York Chamber of Commerce : 
 
 " The market of our own country, the home market 
 in which you can transport your g6ods from the door 
 of the factory to the door of the consumer without 
 breaking bulk a second time, is equal to the entire 
 international commerce of the world. Not only is 
 this true, that our home market is equal to that 
 offered by the international commerce of the world, 
 but it is evidently growing far more rapidly than 
 international commerce, for the internal commerce of 
 the United States has grown from 1,400,000,000 in 
 1870 to 4,400,000,000 in 1903, while the international 
 commerce has grown from 2,200,000,000 in 1870 to 
 4,400,000,000 in 1903. Or in other words, while the 
 international commerce of the world is now twice as 
 great as in 1870, the internal commerce of the 
 
5 8 PROTECTION IN THE UNITED STATES. 
 
 United States is now three times as great as in 
 that year and equals the entire commerce between 
 all nations." 
 
 In this and the preceding chapters we have con- 
 sidered the origin and deeply rooted growth of the 
 protective system in America, and the philosophy of 
 Protection has been explained in the words of the 
 men who created the school. We shall now see the 
 fruits of that philosophy. 
 
 r 
 
LABOUR AND WAGES. 59 
 
 CHAPTER V. 
 LABOUR AND WAGES. 
 
 ACCORDING to the theory of Protection, Pro- 
 tection, in so far as wages are concerned, is both 
 cause and effect. The effect of Protection is to 
 increase wages, and the increase of wages, that is, 
 the higher scale of wages resulting as the effect of 
 Protection, increases the wealth of the country, puts 
 into circulation a larger volume of money, and 
 enables the wage worker to become a larger 
 consumer, thus creating a larger demand for all 
 commodities, and is one of the reasons (but not the 
 only one) why the manufacturer is able to pay high 
 wages. It is an endless chain, beginning in 
 Protection and ending in Protection. 
 
 It seems unnecessary to waste time in the discus- 
 sion of what no one disputes. It is a fact conceded 
 by economists, statisticians, manufacturers and work- 
 ing men, by protectionists as well as free traders, 
 that wages are higher in the United States than 
 in any other country in the world ; higher than 
 in England, the country, next to the United 
 States where labour is most liberally remunerated ; 
 in some trades in America wages are more than 
 twice as large as those paid in England. The 
 
60 PROTECTION IN THE UNITED STATES. 
 
 Blue Book laid before Parliament, August, 1903, 
 contains the following table of wages : 
 
 AVERAGE OF RATES OF WAGES CURRENT IN SOME RECENT YEARS, 
 CORRECTED WHERE NECESSARY, SO AS TO MAKE THE FIGURES 
 RELATE TO THE SAME " STANDARD YEAR." 
 
 OCCUPATIONS. 
 
 United , TT .. , 
 
 S: 
 
 Ger- 
 many. 
 
 France. 
 
 
 
 s. d. ' s. d. 
 
 s. d 
 
 5 d 
 
 Masons 
 
 /Capital 
 ( All other towns 
 
 43 9 120 o 
 39 tK 84 4i 
 
 o o 
 27 6 
 
 34 7 
 21 7 
 
 Carpenters and joiners 
 
 /Capital 
 \ All other towns 
 
 43 9 ! 82 7 
 
 38 3 73 4 
 
 25 I 
 21 7l 
 
 40 10 
 23 6 
 
 Plumbers 
 
 1 Capital 
 1 All other towns 
 
 43 I 93 3 
 38 3 93 9 
 
 
 
 o o 
 
 36 o 
 
 21 7j 
 
 Plasterers 
 
 ( Capital 
 ( All other towns 
 
 45 10 106 7 
 39 3 87 6 
 
 
 
 27 6 
 
 
 21 9 
 
 Painters 
 
 f Capital 
 1 All other towns 
 
 36 5i 87 3 
 35 of 73 3 
 
 
 
 o o 
 
 34 7 
 21 7 
 
 Turners 
 
 f Capital 
 1 All other towns 
 
 38 o 70 7 
 35 o 52 10 
 
 24 o 
 20 o 
 
 |2 3 8 
 24 o 
 
 Fitters 
 
 J Capital 
 1 All other towns 
 
 38 o 62 6 
 35 o 52 10 
 
 22 6 
 
 20 
 
 36 o 
 
 21 7 
 
 Smiths 
 
 (Capital 
 1 All other towns 
 
 38 o 62 6 
 36 o 75 o 
 
 21 O 
 
 21 7 
 
 39 7 
 24 o 
 
 Patternmakers 
 
 f Capital 
 1 All other towns 
 
 42 o 75 o 
 37 o 68 9 
 
 21 
 21 
 
 43 10 
 
 22 8 
 
 Brass moulders 
 
 ( Capital 
 1 All other towns 
 
 36 o 75 o 
 36 o 66 3 
 
 26 7 
 
 19 II 
 
 o o 
 
 O 
 
 Compositors 
 
 (Capital 
 1 All other towns 
 
 38 o 79 2 
 32 3 56 3 
 
 26 7 
 23 i 
 
 33 7 
 24 o 
 
 Lithographic printers... 
 
 ( Capital 
 1 All other towns 
 
 40 104 2 
 
 34 o 85 3 
 
 27 o 
 23 7 
 
 41 o 
 29 5 
 
 Cabinetmakers 
 
 f Capital 
 1 All other towns 
 
 42 8^ 70 o 
 35 6 58 2 
 
 22 6 
 22 6 
 
 28 5 
 24 o 
 
 Upholsterers 
 
 f Capital 
 1 All other towns 
 
 44 10 75 o 
 36 o ! 55 3 
 
 28 4 
 27 II 
 
 43 2 
 25 o 
 
 Coopers 
 
 /Capital 
 \ All other towns 
 
 42 o 72 5 
 36 o 52 7 
 
 23 2 
 22 7 
 
 31 8 
 19 8} 
 
 All of above fifteen 
 trades 
 
 /Capital 
 \ All other towns 
 
 42 o 75 o 
 36 o 69 4 
 
 24 o 
 
 22 6 
 
 36 o 
 
 22 IO 
 
 l New York is taken as the capital of the United States. 
 
 While it is no longer disputable that wages are 
 higher in America than elsewhere, the assertion is 
 frequently made that these earnings are more 
 nominal than real, as the cost of living in the 
 United States is so great as to absorb the difference 
 
LABOUR AND WAGES. 61 
 
 between the European wage and the American. In 
 other words, that the purchasing power of a shilling 
 in America is no greater than sixpence in England, 
 and while the American workman is paid a shilling 
 for the same amount of work which brings only six- 
 pence in England, after both men have paid for the 
 necessaries of life, the money remaining in the hands 
 of both would balance. That phase of the subject 
 will be considered later ; for the present an attempt 
 will be made to show what the effect of Protec- 
 tion has been on wages, and the reason why wages 
 are higher in America than elsewhere. 
 
 One of the definite and most important results 
 protectionists hoped Protection would accomplish 
 was to raise the general scale, to bring about a 
 higher standard a higher standard of living, of 
 wages, of intelligence, of initiative, of the physical 
 strength of the nation. These things, protectionists 
 frankly admit, cannot be had for nothing, they must 
 be paid for, and though the cost of living in America 
 as compared with -the cost in Free Trade countries 
 may be a trifle higher, the difference is more than 
 met by the advantages derived. Moreover, the cost 
 of living in America compared with that in England 
 is not the difference between the wages paid in 
 America and those paid for like labour in England. 
 
 Cost is only a relative term. The price of an 
 article or a service may be high or low compared 
 with a similar article or service elsewhere or at some 
 other time ; the price of an article is high or low as 
 measured by the amount of labour that will purchase 
 
62 PROTECTION IN THE UNITED STATES. 
 
 the desired commodity. If in one country a 
 man must work, for the sake of illustration, twelve 
 hours before his labour enables him to purchase a 
 loaf of bread, the price of bread would be high and 
 the price of labour would be low. If, on the other 
 hand, a man need work only six hours to purchase a 
 loaf of bread, even if the loaf of the same weight 
 should sell in the market at twice the price of the 
 loaf in the first country, the workman would still be 
 twice as well off. It is true that simply comparing 
 the prices of the two loaves one is higher than the 
 other, but compared relatively to the earning 
 capacity of the two men it is the first and not the 
 second loaf that is the more expensive. In the one 
 case the workman must give twelve hours of labour 
 which is his maximum capacity to obtain a single 
 loaf, and has therefore expended all of his resources 
 for that one purpose, He has made a draft upon all 
 his vital energies and has no further stock to be 
 converted into labour and exchanged for some other 
 commodity. In the other case the workman has 
 expended for his loaf of bread only one half of his 
 raw material or his capital (according as one may 
 choose to call the pent up energy of a labourer 
 before it has been transformed into service, the 
 labourer's raw material or his capital ; the terms 
 being interchangeable and, in this case,synonymous) 
 and has still remaining a stock of energy which 
 may be converted into other articles of diet, clothing, 
 means of amusement, anything, in fact, for which he 
 has a desire. 
 
LABOUR AND WAGES. 63 
 
 It must be obvious that the man whose day's 
 labour yields a loaf and a pound of meat is better 
 off than the man whose day's labour is the equivalent 
 of only a loaf of bread. The question of actual 
 cost in England or America is of only minor 
 importance, and the comparative cost is of still 
 less consequence. The only practical considera- 
 tion is the ease with which the article can be 
 procured or, conversely, the labour which must be 
 expended to earn the required amount of money 
 to pay for the article in question. 
 
 It may be well to say that the use of the word 
 " labour " must not be taken to apply solely to 
 manual labour. Every man who does not derive 
 his means of subsistence or his income from rents 
 or other forms of investment is a labourer, whether 
 he be a day labourer, a skilled artisan, a clerk, a 
 writer, a doctor, a lawyer or a preacher. Each has 
 to contribute a certain portion of his own particular 
 form of labour to obtain a return in the shape of 
 wages or salary or income, and his comfort and 
 happiness are measured by the value which his 
 labour produces. Protectionists constantly point 
 out that free traders made the mistake of believing 
 that Protection is in the interest of a class and that 
 it is not of equal benefit to the entire community. 
 This, from the standpoint of Protection, is a funda- 
 mental fallacy which free traders have long 
 cherished. American experience has proved the 
 contrary. A nation in which a wide gulf exists 
 between prosperity and poverty is not really 
 
64 PROTECTION IN THE UNITED STATES. 
 
 prosperous. The day labourer no less than the 
 clerk and the professional man profits by Protection 
 and a high return for labour. 
 
 The American workman demands a higher 
 standard of living than the European workman. 
 Various reasons for this have been ascribed by 
 various writers. Levasseur, ("The American 
 Workman," p. 365) finds that "the democratic 
 spirit of the American people has assisted materially 
 in preserving the custom of high wages," and de 
 Tocqueville (" Democracy in America," chap. VII., 
 p. 230) wrote : " In proportion as social conditions 
 become more equal, wages rise ; and as wages are 
 higher social conditions become more equal." 
 
 I shall not go too narrowly into the causes that 
 make the American workman insist upon certain 
 diet and comforts which the European workman 
 does not deem necessary. Every observer is aware 
 of the fact, exactly as he admits that wages are 
 higher in America than elsewhere. The standard 
 which the American workman has set can be 
 maintained only by high wages. It may be open 
 to discussion whether the standard is the cause or 
 the effect of high wages, and whether it tends to 
 increase wages or simply acts as a restraining 
 influence in preventing their decrease, but I think 
 it must be accepted that the higher the standard 
 the greater the demands that will be made upon 
 capital by labour, and the tendency will be to 
 increase wages. The more wants a man has the 
 greater his desire to satisfy them. 
 
LABOUR AND WAGES. 65 
 
 The standard of living in the United States 
 being higher than in any other country, employers 
 are compelled to pay higher wages. To make 
 this highly paid labour remunerative the employer 
 might increase the hours of labour over those 
 prevailing in other countries and thereby obtain a 
 larger output per man, or he might by more 
 scientific methods make his labour more productive. 
 He could not put in force the first method because 
 labour in the United States will not allow itself to 
 be unduly exploited or sweated for the profit of 
 capital. Consequently, the alternative left to the 
 manufacturer is to devise a system whereby the 
 labourer in America, frequently paid double the 
 wages of the labourer in England for the same 
 class of work, shall produce an output so much 
 greater that the actual cost per unit of production 
 is lower in America. 
 
 The experience of the American manufacturer 
 engaged in every branch of productive industry 
 has shown that the cheapest labour is not the 
 labour that commands the lowest price in the 
 labour market, but, on the contrary, that the 
 cheapest labour is the labour that is the most 
 productive irrespective of first cost. Here the 
 American manufacturer with his practical experi- 
 ence runs foul of the theories of Adam Smith, 
 Ricardo, Mill and other economists who believed 
 that a day's labour in one country was the equiva- 
 lent of a day's labour in any other country, if the 
 work engaged in was the same in both places, 
 
 P.U.S. F 
 
66 PROTECTION IN THE UNITED STATES. 
 
 and on this theory the so-called " iron law " of 
 wages was founded, a law which was not a law, 
 but merely an assumption, which the facts have 
 routed. The American manufacturer has learned 
 that "low wages do not mean cheap production, 
 and that the best instructed and best labour proves 
 itself to be the most productive, so that the rate 
 of wages and the cost of production are not 
 alternative or -equivalent expressions, although 
 so frequently and ignorantly confused." The 
 American manufacturer has made the further 
 discovery that the highest paid labour is usually 
 the quickest labour, and is capable of turning out 
 work which commands the highest price in the 
 market, and produces better workmanship than 
 labour less highly paid. In fact, so thoroughly is 
 this now recognized, that one of the best known 
 American advocates of Free Trade was compelled 
 to use this significant language : 
 
 " In almost every employment of an industrial 
 nature a very great amount of training is requisite to 
 make it effective or make it serviceable at all. Only 
 in times of very great demand and scarcity of labour 
 would any one employ crude labour in factories 
 where skill is required. The first question at all 
 times for an employer to put would be, ' What can 
 you do ? ' ' How skilful are you ? ' ' What are your 
 earnings ? ' Never would he ask, ' How cheaply can 
 you work ? ' He would surely take the one offering 
 his of her services first who had been in the habit of 
 earning the highest wages, doing the greatest amount 
 of work, &c. In times of depression or lesser demand, 
 he would surely dismiss those of his hands who earn 
 the lowest rate of wages, and keep those who are 
 
LABOUR AND WAGES. 67 
 
 best paid per diem, &c. How, then, can it be that 
 wages cannot rise beyond the point of mere subsistence 
 of the worker, when the skill of the worker is so 
 powerful a factor in determining the rate of wages ? " 
 (J. Schoenhof : " The Economy of High Wages," 
 p. 27.) 
 
 Another equally well-known American writer, 
 who has championed the cause of Free Trade, 
 finds that " wages . . . must be determined in the 
 long run by what the product will bring, and not 
 by what the capitalist may promise or be willing 
 to pay for a given time. . . . Low wages are not 
 essential to a low cost of production, but on the 
 contrary they usually indicate a high cost of pro- 
 duction " (Edward Atkinson, " The Distribution 
 of Products," pp. 53 and 63). " Even at piece 
 work," says an English author, " The rapid work- 
 ing man is cheaper than the slow one in industries 
 in which costly machinery is required. The cost 
 of production is less with fast working men because 
 the cost on capital per unit of product is less" 
 (Marshall, " Principles of Economics," p. 628). 
 Many other equally eminent authorities might be 
 cited, but cumulative evidence is unnecessary. It 
 may be accepted as an economic axiom that the 
 cost of labour is not the determining cost of the 
 product of labour, and that the highest paid labour, 
 which is always the most expert labour, produces 
 the cheapest product. 
 
 While American labour commands the highest 
 price in the world, the product of that labour is 
 able successfully to compete with labour paid at a 
 
 F 2 
 
68 PROTECTION IN THE UNITED STATES. 
 
 much lower rate. What is the explanation of this 
 seeming paradox? Intelligent British working 
 men find the answer in the enterprise of the 
 American manufacturer, his readiness to adopt 
 more improved machine processes, and the substitu- 
 tion of machine for hand labour ; and the British 
 working man also believes that the American 
 working man is compelled to work longer hours 
 and under a greater strain, the Englishman being 
 satisfied with lower wages and an easier life. 
 Scientific observers and writers are content to 
 ascribe it to the greater productive power of the 
 American working man, without explaining the 
 secret of the productivity of the American working 
 man. Thus one writer says, " American higher 
 earnings are only in other words an expression of 
 a higher working capacity," which is doubtless 
 true, but it teaches nothing. " The whole product 
 of a nation," says another writer, " depends upon 
 two factors, its natural advantages and the efficiency 
 of its labourers," but the causes which produce 
 efficiency are not revealed. 
 
 The belief entertained by British working men 
 that the increased productivity of the American 
 working man is due in part to the more extensive 
 use of machinery, and especially the latest and 
 most improved type of machinery, is true ; but the 
 general substitution of machine for hand labour is 
 possible only because labour is expensive. It is 
 only where a high rate of wages prevails that 
 machinery can be profitably employed. It has 
 
LABOUR AND WAGES. 69 
 
 been pointed out that " in railroad building and 
 canal work in India it is found that the low day 
 rate at which labourers can be hired for carrying 
 the dirt away from the banks makes the employ- 
 ment of machinery unprofitable and unnecessary." 
 In America, on the contrary, railway building, 
 canal digging, and other like work can be more 
 profitably done by the use of steam shovels, exca- 
 vators, and similar machinery, than by an army of 
 working-men. The relation which the use of 
 machinery bears to the cost of labour is concisely 
 expressed by a distinguished French author. " A 
 manufacturer considering the purchase of a 
 machine," he says, "which will cost ^2,000 and 
 displace four labourers, but which must pay for 
 itself in ten years, will not hesitate to make the 
 purchase in a country where wages are ;ioo per 
 annum. The machine will affect a saving of 200 
 per annum. A manufacturer in a country where 
 wages are 40 cannot use the machine, however, 
 because it would cause an annual loss of ^40." 
 
 This explains in very few words why the 
 American manufacturer so quickly disregards an 
 obsolete machine, and is always willing to substitute 
 for it a machine that will do its work better and 
 cheaper. A machine costing 1,000, which in five 
 years has saved 1,200 in wages, can be sacrificed 
 at the end of that time without the manufacturer 
 feeling that he is losing money. He is not losing 
 money. He has made money by the use of the 
 machine, and if he can obtain something better, 
 
70 PROTECTION IN THE UNITED STATES. 
 
 something that in the next five years will have paid 
 for itself, and saved 1,500 in the cost of produc- 
 tion, he will feel that he has made a good invest- 
 ment. But it must be understood that it would be 
 impossible for him to make these changes, unless 
 the money he invested in machinery effected a 
 saving in the difference between machine and hand 
 labour, and this is only possible in a country where 
 high wages prevail. 
 
 The economy of machine over hand labour is 
 now recognised by all writers on economics. One 
 of the strongest American advocates of Free Trade, 
 who denounced Protection and the injury which 
 the McKinley Bill would do to the country, is 
 forced to recognise the advantages possessed by 
 the American manufacturer over his European 
 competitors. "Our labour," he says, "being 
 machine labour, is generally cheaper than Euro- 
 pean labour, which is to a large extent hand labour, 
 or inferior machine labour, or unproductive, under- 
 fed labour, as compared with higher productive 
 American labour." 
 
 The doctrine of high prices is always preached 
 by the protectionist ; and high prices for labour, 
 he believes, is a nation's salvation. " Let no one," 
 he says, "manufacturer or workman, be deluded 
 by the belief that cheapness means prosperity, or 
 that because things are cheap a man can have 
 them in abundance. Nothing is cheap to a man 
 without money ; nothing is expensive if a man can 
 afford to pay for it." 
 
LABOUR AND WAGES. 71 
 
 But it will undoubtedly be asserted, and believed, 
 that while conditions in America result to the advan- 
 tage of the working-man, in that he obtains higher 
 wages, they entail an additional and unnecessary 
 expense upon the manufacturer, and that in the 
 last analysis this cost is paid by the consumer; 
 and the working-man, being a consumer as well as 
 a producer, bears his burden of the cost, and is 
 no better off than the working-man in foreign 
 countries. An examination of the cost of living 
 in America is made in another chapter, and there- 
 fore will not be discussed here, but so far as the 
 additional cost entailed on the manufacturer and 
 the added cost of all products to the consumer 
 are concerned, the history of American industry 
 affords convincing proof that the use of the most 
 improved types of machinery and the most highly 
 specialised and best paid labour results not in in- 
 creasing the cost, but, on the contrary, in decreasing 
 it. A machine can better do that which was formerly 
 done by hand, and the greater the skill of the hand 
 which controls the machine the greater the produc- 
 tion, and consequently the lower its cost. It follows, 
 therefore, that the use of machinery in charge of 
 intelligent and highly trained men is of advantage 
 to the employer, because his profits are increased ; 
 to the advantage of the consumer, because cost is 
 decreased ; to the advantage of the labourer, because 
 the employer can afford to pay higher wages in 
 proportion as the cost of manufacture decreases 
 and its profits are increased. 
 
72 PROTECTION IN THE UNITED STATES. 
 
 American experience has demonstrated that the 
 manufacturer who would keep control of his market 
 and not be crowded out by more enterprising rivals 
 must keep pace with the march of scientific or 
 mechanical improvement or yield to a competitor 
 with more brains or more capital. Writers fre- 
 quently deplore the fierceness of competition by 
 which a manufacturer who has a large amount of 
 capital invested in plant is compelled to send 
 expensive machinery to the scrap heap because 
 it has become obsolete, although it is still in 
 good condition. No one who studies economics 
 philosophically and in their broader relations to 
 the welfare and progress of nations need waste a 
 single tear over this tragedy. It is immaterial to 
 the world whether a manufacturer, after having 
 spent 100,000 to equip his plant, must spend still 
 another 100,000 or else go out of business. If 
 he is forced by improvement to replace the first 
 set of machinery by other machines, it means 
 simply that inventive genius has succeeded in 
 producing a machine that will make certain 
 articles at a lower cost than was possible by the 
 employment of the machinery then in use. It is 
 pathetically true that the individual manufacturer 
 may be compelled to increase his capital by 
 100,000 or be forced into bankruptcy, but that 
 is more than counterbalanced by the advantage 
 derived by the entire world being able to obtain 
 a better article at a lower price, and by its in- 
 creased consumption, for increased consumption 
 
LABOUR AND WAGES. 73 
 
 always accompanies the reduction of the price of an 
 article of daily use ; greater profits also accrue to 
 the manufacturer, who is able to pay larger wages 
 to the labourer. 
 
 A manufacturer, describing a new loom before 
 the United States Industrial Commission, said : 
 
 " The cost of the machines per spindle is about $4, 
 making $60,000,000 invested in spinning frames ; and 
 these $60,000,000 are doing to-day what $120,000,600 
 would be required to do under the old method." 
 
 In a report of the chief of the Bureau of Labour 
 of the State of New York there is testimony as to 
 the use of machinery in the two principal manu- 
 facturing countries of the world : 
 
 " The United States and Great Britain are the 
 greatest owners and users of machinery. Compare 
 the general condition of the workers of those two 
 nations with that of any other country on the face of 
 the globe where machinery is unknown except in its 
 most primitive form. Where lies the superiority ? It 
 seems almost a paradox, but it is true, that machinery 
 conduces to employment and to betterment ; not only 
 increasing production, but multiplying the chances 
 of employment and incidentally the consumption 
 of products." 
 
 The use of machinery, therefore, in its largest 
 and most varied forms is a thing that every 
 protectionist believes that every labourer as well 
 as every consumer should heartily welcome. The 
 man who has only one thing to sell, that is, his 
 labour, can obtain for it more when he is required 
 intelligently to direct the operations of a machine 
 than he can when his labour is to be expended in 
 
74 PROTECTION IN THE UNITED STATES. 
 
 the cruder forms of manufacture. The greater the 
 use of machinery the higher the general rate of 
 wages, and to repeat what has already been said of 
 cost, because too much emphasis cannot be laid 
 upon a fact which some economists ignore, the 
 labourer, while a consumer, is also a producer, and 
 the labourer as well as every other person is vitally 
 concerned in maintaining a high standard of wages 
 and securing a low labour cost of production. The 
 more extensively machinery enters into manufac- 
 turing processes the lower the cost to the consumer. 
 Therefore, machinery increases wages and cheapens 
 production, so that the labourer obtains a double 
 benefit by receiving a greater reward for his labour 
 and having to spend less for the necessaries of life, 
 which means a surplus to keep him from the border 
 line of starvation. Furthermore, the physical and 
 mental condition of the labourer is immeasurably 
 improved by the substitution of machine for manual 
 processes. It is claimed that the effect on a man 
 placed in charge of a machine is to degrade him, 
 because his work is so monotonous that it blunts his 
 faculties and in a short time he becomes practically 
 an adjunct to the iron and steel of which he is 
 in charge. But no unprejudiced person who is 
 familiar with conditions existing in industries 
 before the use of machinery became general, and 
 who knows present conditions, will deny that the 
 general level of intelligence and the general con- 
 dition of the working-man are higher now than 
 ever before. It must be obvious that the strain on 
 
LABOUR AND WAGES. 75 
 
 a weaver who has to watch a few automatic looms 
 is a much less drain on his vital energies and less 
 dehumanising than the task imposed upon his 
 grandfather who worked a hand loom. The 
 automatic loom-tender works about nine hours 
 a day with less physical discomfort than his 
 grandfather, when fourteen hours counted as a 
 day, and the wages of the modern weaver are 
 as much larger than those of his predecessor as 
 his hours of toil are fewer. 
 
 To the credit side of the use of machinery must 
 also be added all the other things that have followed 
 in consequence of its introduction. Compare the 
 well-kept, well-ventilated shop of to-day with the 
 miserable cottage at the time when cottage in- 
 dustries flourished in England, and before the 
 factory system became universal. In countries 
 where machinery is extensively employed the 
 condition of labour is better than in countries 
 where machinery is only sparsely used, and it 
 will be found that the more general machine 
 processes enter into all branches of manufacture 
 the higher the social condition of the labourer. 
 
 One explanation of the greater productivity of 
 the American working-man, I think it will now 
 be conceded, is the greater use of machinery, and 
 it has been shown that only in a country where 
 the rate of wages is high is it economical to use 
 machinery. But it is the belief of British working- 
 men, a belief shared in by many British manu- 
 facturers as well as British and foreign writers, that 
 
76 PROTECTION IN THE UNITED STATES. 
 
 the American manufacturer is a hard taskmaster 
 who, figuratively, stands over his working-men 
 with lash in hand and compels them to exces- 
 sive labour, which they can only accomplish at 
 the expense of their physical well-being. Never 
 was there a more mistaken idea. The greater pro- 
 ductivity of the American working-man is not due 
 to the fact that, like the slave condemned to the 
 galley, he is pushed to the extreme limit of 
 exhaustion, but because the American working- 
 man is the best fed, the best housed, and the 
 best clothed working-man in the world, which 
 enables him to do better and more work than 
 any other working-man. That is the secret of 
 his efficiency. 
 
 The American workman is the best clothed, 
 best housed, and best fed workman in the world. 
 He lives in more comfort than 5 men of the same 
 class in Europe ; he has more money to spend 
 on luxuries and pleasures ; as a child he is not 
 half starved or insufficiently clad ; his mental and 
 physical development is not stunted ; he is not 
 compelled to work at an age when nature requires 
 that the growing child shall have much time for 
 sleep and play, and when good food is essential to 
 make bone and muscle and brain. 
 
 All these things make up the sum total of the 
 efficiency of the American working man. The 
 American who comes to the starting line of the 
 race of life, who must spend all his days at the 
 forge, the loom, or the lathe, is by reason of the 
 
LABOUR AND WAGES. 77 
 
 higher environment into which he has been born, 
 the better and more abundant food which he eats, 
 the greater comforts generally with which he is 
 surrounded, and the higher standard of living, more 
 competent to perform work requiring skill and 
 energy than the workman of a lower vitality or an 
 inferior physical and mental equipment. 
 
 Can anybody question the cause of the American 
 workman's efficiency or the effect which that 
 efficiency must have upon the national welfare 
 and the productivity of its workers ? Apply 
 the same test to an animal and it would not 
 be disputable. Will a well-fed horse, kept in a 
 properly ventilated stable, do better work with 
 less exertion than a horse insufficiently fed, whose 
 stable is dark and rank, whose coat has never 
 known the curry-comb ? Where shall we look to 
 the better stock to perpetuate the strain, and would 
 any sensible man in purchasing a colt hesitate in 
 his choice between the colt of the former and that 
 of the latter ; and would it not be certain that if 
 the colt was put to work when still immature it 
 would break down at an earlier age than the colt 
 which had been allowed to run wild until the time 
 came when nature intended that it should cancel 
 its debt by labour ? 
 
 " In England," says Schoenhof, " I frequently heard 
 it said that labourers brought from Ireland usually 
 break down after the first week's trial ; had then, 
 living with friends, to first get used to the English 
 standard of life, and feed up in order to do work at 
 the English rate. Gradually, in keeping with their 
 
78 PROTECTION IN THE UNITED STATES. 
 
 better feeding and living, they became as good and 
 strong workmen as the English. Now, in American 
 mills the very same holds good." 
 
 And the same author also says : 
 
 "'They don't eat and don't work,' said a shoe 
 manufacturer of Vienna, when we compared notes on 
 the productiveness of Austrian and German labour 
 and of American labour. ' Bread and beer swilling, 
 and an occasional bit of sausage cannot give strength 
 sufficient to compete with you/ " 
 
 The late Mr. Schoenhof, it may be remembered, 
 was for many years one of the foremost American 
 free traders. 
 
 To sum up : The American working-man has a 
 productive energy greater than that of any other 
 working-man, and this higher capacity is due to 
 his being able to obtain more and a greater variety 
 of food that is suited to his wants ; to his being 
 better housed and better clothed and having 
 better surroundings than the working-man in other 
 countries. Because he is a superior working-man 
 it is profitable to make a more extensive use of 
 machinery in America than in other countries, and 
 this more general use of machinery has made it 
 profitable to pay high wages, while at the same 
 time it has reduced the price of commodities. 
 
THE COST OF LIVING. 79 
 
 CHAPTER VI. 
 THE GENERAL COST OF LIVING. 
 
 IF producers and consumers dealt directly one 
 with another, there would perhaps be less necessity 
 to discuss the merits of Free Trade and Protection. 
 If all labour were hand labour, the more unrestricted 
 the exchange of commodities the better it would be 
 both for producer and consumer. If the man who 
 wanted wheat could barter it for cloth which he 
 wove on his hand loom, it would be to his benefit 
 to deal immediately with the wheat grower. In 
 that case low wages, or expressed in another term, 
 a low cost of production, would result in low-priced 
 commodities, for which society would pay by being 
 kept low in the scale of civilisation. Fortunately 
 for producers as well as consumers, for the world 
 at large, modern conditions require a more complex 
 system. Producers and consumers do not deal 
 directly with each other. Between the producer 
 and the consumer there is a wide gap, which is 
 bridged by the elaborate machinery of modern 
 distribution, and which involves much waste. It 
 does not necessarily follow that cheap production 
 means cheap prices to the consumer ; usually the 
 reverse. 
 
 I have shown that conditions in America enable 
 
8o PROTECTION IN THE UNITED STATES. 
 
 manufacturers to pay their workmen wages in 
 excess of those paid in other countries, and that 
 these high wages have stimulated inventive genius 
 and encouraged the use of machinery, the manu- 
 facturer finding it more economical to displace 
 men by machines. That economy, however, is 
 possible only when a machine, very often costing a 
 large sum, can be made to do more, better, and 
 quicker work than had previously been done by 
 hand. Quantity, workmanship and speed are three 
 of the greatest factors comprising the sum of the 
 cost of production. The manufacturer who can 
 turn out more pairs of boots of better workmanship 
 in a working day of ten hours than his competitor 
 in the same time can afford to sell his boots at a 
 lower price and still realise a greater profit. That 
 every manufacturer knows, and his constant effort 
 is to decrease the cost of his product by increasing 
 his output. 
 
 An illustration used by Adam Smith will show 
 how the consumer is the gainer by the use of 
 machinery. Adam Smith calculated that one man 
 working alone and without machinery could not 
 possibly make twenty pins a day, while in the small 
 pin factory, which he selected to illustrate the 
 advantages of the division of labour, ten men with 
 a little machinery and specialised work could 
 together produce 48,000 pins a day. Mr. Schoenhof 
 takes up the same illustration and cites a Con- 
 necticut factory in which seventy machines, directed 
 by one machinist, three operatives, and one boy, 
 
THE COST OF LIVING. 81 
 
 produced daily 7,500,000 pins, all placed in the 
 papers and ready for sale. A hundred years ago 
 they boasted that in one day a single workman 
 could make 4,800 pins ; to-day one man makes 
 1,500,000. The difference is typical. In a recent 
 investigation made by the Department of Labour 
 it was ascertained that one pound of pins which 
 cost $5.32 (say I is. 4^.) to make by hand, could 
 now be manufactured for a little less than 26 cents 
 (13 pence). 
 
 One of the results of Protection, its advocates 
 maintain, is to reduce the price of commodities. 
 This is not always seen immediately. Perhaps the 
 first effect of a high tariff is unduly to advance 
 prices, and another effect equally baneful is to 
 preserve obsolete methods, which must necessarily 
 result in high prices, but these evils correct them- 
 selves by the sharp pressure of competition. That 
 pressure may come either from within or without. 
 If the enterprise of home manufacturers is not 
 great enough to enable them to keep control of the 
 home market, it will be wrested from them by more 
 enterprising foreign competitors, but in either case 
 prices fall to their proper level. 
 
 Free traders assert that the consumer always 
 pays the tariff, and that the rate of duty levied on 
 an article is simply an added tax on consumption. 
 This theory is denied by protectionists. It is 
 really the crux of the whole argument. 
 
 It has been asserted that one of the most 
 important effects of Protection is to raise the 
 
 P.U.S. G 
 
82 PROTECTION IN THE UNITED STATES. 
 
 standard of existence. High wages are the rule 
 in America, and commodity prices are higher than 
 in Europe, but the difference in prices is more than 
 met by the difference in wages. A relatively high 
 range of commodity prices, due to natural and not 
 abnormal or artificial causes, such as a shortage of 
 crops, strikes, corners or other reasons, the protec- 
 tionist finds, is the expression of high wages ; high 
 wages indicate high productive power, which means 
 a high consuming power. Neither workman nor 
 capitalist, he says, has anything to fear from high 
 prices, the result of this economic system, but, on 
 the contrary, both will prosper by it. The Ameri- 
 can free trader cites the superior wages of the 
 British workman as compared with the German as 
 supporting his theory of the advantage of Free 
 Trade. The protectionist answers that the cost of 
 living is higher in England than in Germany. Will 
 the British workman, he asks, or the advocate of 
 Free Trade, contend that the condition of the 
 German workman, who enjoys the so-called advan- 
 tages of low prices, is better than his own ? And 
 will he not perhaps admit, after he has carefully 
 studied the question, that the condition of the 
 American workman, whose cost of living is higher 
 than that of the British, but whose wages are 
 proportionately still higher, is an even more 
 fortunate individual ? 
 
 England and the United States produce a 
 competitive article of general consumption. The 
 price of that article in England is, for the sake of 
 
THE COST OF LIVING. 83 
 
 illustration, ios., on which there is a duty of 50 per 
 cent., so that ignoring, for the sake of convenience, 
 the cost of freight, insurance and other incidental 
 charges, the article cannot be sold in the United 
 States for less than 15^. It can be produced in the 
 United States, equal in all respects to British 
 manufacture, for iCtf., but inasmuch as the tariff 
 advances the price to 15^., and there is no danger 
 of English competition below that price, the 
 American manufacturer may with safety charge 
 15^., and thus lay a tax of $s. on every customer. 
 Theoretically the illustration cannot be refuted. 
 It is a beautiful and simple example of a consumer 
 in a protected country paying tribute to the manu- 
 facturer. But is it as sound in its practical operation 
 as it appears to be in theory ? 
 
 At los. the manufacturer, both in England and 
 the United States, is making a proper profit on 
 invested capital. At i$s. the American manu- 
 facturer is making an excessive profit. Although 
 there is much loose talk indulged in at the present 
 time of monopolies, with the exception of patents, 
 railways, and other similar franchises, there is no 
 such thing as a trade monopoly, and any man with 
 capital, technical or professional knowledge, and 
 the requisite commercial ability can compete with 
 any other. Capital is always seeking investment, 
 and capital will naturally flow where the returns 
 are highest, the security of the investment being 
 the first consideration. A business which, because 
 it is protected by an unnaturally high tariff or for 
 
 G 2 
 
84 PROTECTION IN THE UNITED STATES. 
 
 any other reason, yields excessively high profits is 
 always the first to invite attack from competition. 
 
 If the demand for the i$s. article exceeds the 
 supply it would be foolish for a rival to reduce the 
 price, because business is not an altruistic enterprise, 
 and every man tries to make all that he can ; but 
 if, as is usually the case, supply and demand keep 
 level the latest seeker for trade must, to obtain his 
 share of the trade, be content with smaller profits, 
 or produce a better article at the same price, or an 
 article equal to that already on the market at a 
 lower price. If by economy of management, 
 superior abilities, or improved processes, he can 
 lower the cost so that it can be sold for 14$-., his 
 profits are still very large ; they may be even 
 larger than those of his rivals selling at 15^., and 
 he will " monopolise " the business and obtain the 
 trade which formerly belonged to them. 
 
 According to some economists the cost of an 
 article is regulated by its cost to produce under the 
 most unfavourable conditions. It must be obvious 
 that this is false reasoning, and that the cost is 
 regulated by the cost required to produce it under 
 the most favourable conditions. The market price of 
 the article used for the purpose of illustration is no 
 longer i$s. but has fallen to 145., because all other 
 manufacturers must either meet that price or 
 abandon their trade to a more enterprising com- 
 petitor. At 14^. profits are still large enough to 
 attract new capital, and new capital is invested in 
 the business, again with the result that either 
 
THE COST OF LIVING. 85 
 
 profits are reduced by competition, which is for 
 the benefit of the consumer, or manufacturing can 
 be carried on more economically, which is equally 
 for the advantage of the consumer, and in the 
 course of time the difference in price between the 
 American and English article may be less than 2s., 
 although the duty imposed is 5^. 
 
 This is no fanciful or exaggerated illustration. 
 It is only putting in more convenient terms Ameri- 
 can experience in the manufacture of steel rails, or 
 a reduction in price from $106 to $28 a ton, and 
 scores of other staples might be similarly cited. 
 The difference in price between the great bulk of 
 commodities in England and in America is not the 
 difference which the tariff permits to be levied. 
 The following prices have been furnished me by 
 the United States Bureau of Statistics, and are 
 interesting as showing how slight the variance is 
 in commodity prices in the two countries : 
 
 COMPARATIVE PRICES IN THE UNITED STATES AND 
 ENGLAND. 
 
 Articles. United States. England. 
 
 Dollars. Dollars. 
 
 Flour, per 280 pounds ... 7*00 ... 6*52 
 
 Butter, per 112 pounds ... 24-92 ... 24-82 
 
 Hams, do. ... 13*44 * 2 '65 
 
 Bacon, do. ... 12*88 ... 10*95 
 
 Beef, do. ... 9-24 ... 9-08 
 
 Eggs, per 120 3-90 ... 3-04 
 
 Flour, butter, hams and eggs are maximum 
 prices from the London Public Ledger, and are com- 
 pared with maximum prices from the New York 
 
86 PROTECTION IN THE UNITED STATES. 
 
 National Provisioner and Journal of Commerce. 
 English prices for bacon and beef are average 
 prices of American bacon and beef from the 
 London Economist. English prices for butter are 
 for best Danish, and eggs, for best French ; all other 
 prices are for American commodities of the same 
 or similar grade so far as ascertainable. 
 
 But figures, even although exact, are often mis- 
 leading. One constantly hears that clothing is 
 cheaper in England than in America, and as with 
 all general statements this is true only in part. 
 Luxuries of all kinds are more expensive in 
 America than in England, and what by custom 
 is no longer considered a luxury in England is still 
 regarded as such in America. Thus, in America 
 most men of average means, and many well-to- 
 do, are satisfied with ready-made clothes, and 
 "custom clothing" that is, suits made to order 
 is in many places looked upon as extravagance. 
 A lounge suit for which a man pays five or six 
 guineas at a Bond Street tailor's will cost in 
 America from eight to twelve pounds, according to 
 the conscience and reputation of his tailor. On the 
 other hand, a well-made serviceable suit, if bought 
 ready-made, will cost no more in New York than in 
 London, and the New York suit will fit better, that 
 is, according to American ideas of style. It is the 
 same in regard to boots. A pair of boots made to 
 order will cost in America from -2 8s. to 4 or 
 more, but even the most fastidious dresser need 
 not pay more than 1 for boots ready made, 
 
THE COST OF LIVING. 87 
 
 which will look well and give him excellent service. 
 The workman pays 12s. or less. The shilling 
 necktie is as common in America as it is in 
 England, and yet there are men who think nothing 
 of paying i for a scarf. With a knowledge of prices 
 both in England and America, I am of the opinion 
 that the necessaries of life are little, if any, higher 
 in America than in England, but articles of luxury, 
 especially those hall-marked by fashion, are much 
 higher in the former country than in the latter. 
 
 An incorrect understanding of the difference 
 between the standards of living in the United 
 States and in Europe is the cause of much con- 
 fusion and the generally prevalent belief that for the 
 same style of living the cost in America greatly 
 exceeds the cost in European countries. British 
 workmen and British investigators who have only 
 superficially examined into conditions in the United 
 States are always fond of repeating that it requires 
 more money for a man to live in America than 
 elsewhere, and he immediately states it as an 
 incontrovertible fact that the working-man is no 
 better off in America than elsewhere, because of 
 high prices in America. If the foreign working- 
 man should be raised to the same standard as the 
 American, it would, perhaps be discovered that the 
 amount actually required to support a family in the 
 same comfort and give it the same surroundings 
 would not vary much. 
 
 Testifying before the United States Industrial 
 Commission, an Englishman, employed at that 
 
88 PROTECTION IN THE UNITED STATES. 
 
 time in the Trenton potteries, who had been 
 thirty-three years in the United States, and who 
 had also worked in the English potteries, said 
 that the average wages of jiggermen and dish- 
 makers in England were 2?s. while the American 
 average was approximately 50^., " but," he added, 
 " they do not go at the rapid pace we do. We 
 turn out a considerably greater number than 
 they do. We go at a killing pace in this 
 country." 
 
 "When you say 'a killing pace,' do you mean 
 that the pace that you work at here impairs your 
 strength?" was the question put to him by a 
 member of the Commission, and his answer was, 
 " No, I do not know that it does. It seems to me 
 that we live to about the average of potters in other 
 countries, but as the custom of the American 
 citizen is to go ahead in everything, we do the 
 same. Imitation counts for a great deal in this 
 country. For instance, if one person gets a 
 bicycle everybody else wants one. You go to 
 work at seven o'clock in the morning, Monday 
 morning, while in England and Scotland that 
 would be about breakfast time on Monday morn- 
 ing. Then they quit somewhat earlier than we do. 
 As a rule we keep at it ten hours a day except 
 Saturday, and quit on Saturday at four." 
 
 This is one explanation of the apparently higher 
 cost of living in America, because, as this man says 
 " imitation counts for a great deal in this country, 
 and if a person gets a bicycle everybody else wants, 
 
THE COST OF LIVING. 89 
 
 one." In other words, the protectionist says, if the 
 standard of living requires bicycles for the comfort 
 or happiness of men working in the Trenton 
 potteries, they buy them, because they have the 
 money. In other countries, much as they might 
 long for bicycles, they would be compelled to 
 go without. 
 
 Another witness, testifying before the same 
 Commission, put in an even more striking way the 
 reason why living appears to be higher in America 
 than elsewhere. 
 
 " There is very little difference in the actual cost of 
 living," he said, " if they live in the same way. But 
 the English potter is perfectly willing to wear a 
 flannel shirt and a handkerchief around his neck from 
 one week's end to another. That is the way they 
 come to this country generally. When they are here 
 for a few weeks or a few months, they want to do as 
 their neighbours do, and have a white collar and a 
 nice necktie and a pair of patent leather shoes, or 
 something of that kind. They actually spend a good 
 deal more money here. But if they lived in the same 
 way that they do over there, I doubt whether living 
 would cost but a very small fraction more than it 
 does here." 
 
 A Philadelphia manufacturer of worsted and 
 woollen goods for men's wear, an American, who 
 for eight years had carried on the same business in 
 England, testifying before the same Commission, 
 said : 
 
 " My conclusions were that the cost of living is 
 something lower there [in England] generally, but 
 among workpeople it is almost as high as it is here. 
 
go PROTECTION IN THE UNITED STATES. 
 
 The prices of food, if anything, are higher there than 
 they are here, which is an essential factor in the cost 
 of living. As I lived over there and kept house that 
 was a question I looked into somewhat. The only 
 article that I ever discovered over there that was 
 cheaper than in this country was potatoes. That in 
 some sections is a very important item of diet. But 
 they live fairly well over there ; they do not consume 
 a great deal of meat ; their food is more of a character 
 of cereals bread and all things of that kind. Over 
 there instead of living in houses as they do here, they 
 live in rooms. We have workpeople living in our 
 town living in houses by themselves that have all the 
 necessary conveniences, such as bathroom, heater, and 
 gas. The houses over there have gas in to a large 
 extent, but it is very rarely that any of them have 
 bathrooms. I do not think in any instances heaters 
 are much used, although they are economical in 
 household expense. They depend almost entirely on 
 open fires and live largely out of doors." 
 
 Jacob Weidmann, a silk dyer of Patterson, New 
 Jersey, testified before the Commission that labour 
 in the United States has a much higher efficiency 
 than in his Swiss dye-house, that wages are 
 from 60 to one 100 per cent, more in America 
 than in Switzerland, and that a man can live 
 cheaper in the United States than he can in 
 Switzerland. The statement that living is cheaper 
 in America than in Switzerland created surprise 
 and caused a member of the Commission to ask 
 him if he really meant what he said, and in reply 
 the witness said, " Yes, he pays a little more for 
 rent, but he can live here cheaper. Some men 
 keep a record of it and find that they can live 
 cheaper here." 
 
THE COST OF LIVING. 91 
 
 " And at the same time have meat twice a day ?" 
 he was asked. "Yes, meat three times a day 
 over here," was the reply. " Those are facts." 
 
 It has often been asserted by free traders that 
 because the tariff shuts out the foreign competitor, 
 the American consumer is at the mercy of the 
 American manufacturer, who can put upon the 
 market shoddy goods and articles of inferior 
 workmanship, as the consumer must either take 
 what is offered him or go without, as the price of 
 a superior foreign made article is prohibitive. It 
 has also been asserted that because of high prices 
 and the large volume of money in circulation 
 manufacturers are able to charge high prices, 
 knowing that men who are well paid will not 
 scrutinise their expenditure as closely as those 
 among whom the struggle for existence is more 
 severe, which results in prices being unduly 
 increased and the consumer being compelled to 
 take inferior goods. 
 
 Here, again, the protectionist joins issue with 
 his opponent and believes that the facts disprove 
 the theory. It has already been shown that in 
 any staple industry where the price and the profits 
 bear an undue relation to the cost of manufacture, 
 a direct invitation is extended to capital to obtain 
 a share of that business, which has the inevitable 
 result of bringing prices to the proper level. There 
 is also another reason why abnormal prices and 
 excessive profits cannot long prevail. Competition 
 in America is a fierce struggle, and the man who 
 
92 PROTECTION IN THE UNITED STATES. 
 
 would not be out-distanced must make a cheaper 
 or better article than his competitor. It is 
 certainly not true to-day, no matter how true it 
 was in the past, that the American, whether he is 
 a mechanic or a man higher in the social scale, is 
 content with shoddy or inferior goods, and it is 
 equally untrue that he recklessly throws away his 
 money. The converse is the truth. Although he 
 is not niggardly, as a rule, he tries to obtain the 
 best and the most for the least money. 
 
 American boots and shoes, American machinery 
 and other articles of use and wear have an estab- 
 lished reputation in Europe because of their artistic 
 workmanship, the excellence of the materials which 
 enter into them and their low price. It is the 
 same with everything else that the American uses, 
 every article of prime necessity, or comfort, or 
 luxury. Take, for instance, the roll top desk 
 which is found in every office. Nearly every year 
 manufacturers bring out a new style which contains 
 some small improvement over last year's pattern. 
 Just as the banker and the merchant demand 
 greater conveniences and something better than 
 their fathers did, so does the American insist upon 
 superior surroundings. In the house of the well- 
 paid, thrifty mechanic one finds solid furniture of 
 good workmanship and pleasing design. He is 
 no longer satisfied with wooden chairs or the 
 horse-hair-covered abominations which served 
 when he was a boy. He must have something 
 that is not only more comfortable but which 
 
THE COST OF LIVING. 93 
 
 appeals to his sense of the beautiful, and he obtains 
 both comfort and beauty at a smaller cost than 
 his father did because of competition and the 
 demands made upon the manufacturer not only 
 by the workman but by all classes ; because of 
 the generally high standard which prevails in 
 America ; a standard, protectionists assert, which 
 would be impossible were it not for Protection. 
 
94 PROTECTION IN THE UNITED STATES. 
 
 
 CHAPTER VII. 
 PROTECTION AND NATIONAL WELFARE. 
 
 ONE of the chief arguments of the protectionist 
 is that Protection is not only economically sound 
 but morally must command the approval of all 
 persons to whom humanity is of greater conse- 
 quence than the saving of a few pence on an article 
 of necessity. " The man, not the dollar," was the 
 epigrammatic expression used by one American 
 statesman. " Cheap goods make cheap men," said 
 another. This is the keynote of Protection. 
 
 The American workman and the American pro- 
 tectionist claim that the sum of the reasonable and 
 proper wants of a man in his sphere of life food> 
 clothing, housing, recreation, education for his 
 children, etc. constitute the "standard of living " ; 
 to lower that standard degrades the nation, and to 
 maintain the standard adequate wages must be 
 paid. 
 
 Accepting the Ricardian theory that the tendency 
 of wages is to sink to the minimum of existence, 
 they have by every means in their power sought to 
 prevent the degradation of labour and to make the 
 workman demand something more than the bare 
 minimum of existence. The workman, they say in 
 effect, is entitled to more than a minimum of food 
 
PROTECTION AND NATIONAL WELFARE. 95 
 
 and clothing ; his labour justly earns him decent 
 surroundings and some comforts. The principle 
 for which they contend is set forth in a pamphlet 
 issued by the American Federation of Labour : 
 
 " As a rule in all countries and in all times the 
 demand for higher or more wages is consequent upon 
 the increased pressure of new wants created. If a 
 man has learned to read and is surrounded by reading 
 men, he will want to read, and will demand such 
 wages as will enable him to satisfy this want. If 
 there was no such day as the Sabbath or rest-day, 
 and all wage-workers were employed the seven days 
 of the week, not only would wages not be advanced, 
 but they would be reduced because the present wants 
 of Sunday would be lost. Hovel life gives hovel 
 wages ; tenement-house life gives tenement-house 
 wages ; shabby clothes gives shabby wages ; good 
 clothes, good eating, good homes, mean good wages ; 
 you cannot have the best till you want the best." 
 
 " What does it matter ? " the writer supporting 
 the argument of Protection always asks, " that the 
 workman has to pay more for his commodities if 
 he can obtain his full share of them ? " The 
 labourer, says one writer, conforms his mode of 
 living to his income. When the wages of working- 
 men have once risen and their wants and satisfaction 
 have become adjusted to a higher plane, it is 
 exceedingly painful for them, as for other people, 
 to accommodate themselves to a lower plane ; they 
 make every effort to avoid the change. 
 
 " It does not matter much," said a member of 
 Congress, " that the labourer gets his share of the 
 price of the finished article if that share is not 
 
96 PROTECTION IN THE UNITED STATES. 
 
 enough for him to live on and to give him a 
 surplus. If the price of the finished article is low, 
 the reward of the labour is low." 
 
 In his "Wealth and Progress/' Mr. George 
 Gunton has clearly explained that the price of 
 labour tends to approach the cost of maintenance, 
 not of an isolated labourer, but of the most ex- 
 pensive family whose labour is required in pro- 
 duction, and that it is those who live best, and 
 not those who live cheapest, who, by their cost 
 of maintenance, determine the rate of wages. 
 
 The American believes that Americans of all 
 classes, but especially the working classes, live 
 better and in greater comfort than persons in the 
 corresponding ranks of life in any other country, 
 which to the protectionist is the justification for 
 Protection, and is met by the free trader with the 
 assertion that this higher standard, which would be 
 still higher were it not for Protection, is due to 
 natural advantages and to living being easier in a 
 new and partly-developed country than in countries 
 where life, because of a congested population and a 
 lack of opportunity, is too often a bare struggle for 
 existence. It is impossible, of course, to affirm or 
 deny the truth or falsity of either statement, but 
 impartial investigators bear testimony to the 
 higher environment of the American working-man, 
 and attribute it to the high wages which he earns. 
 " The more the forces of cultivated intelligence, 
 conscientiousness, and hopefulness shall infuse 
 themselves into human industry," wrote the late 
 
PROTECTION AND NATIONAL WELFARE. 97 
 
 Ambassador to England, Mr. Bayard, a very stout 
 free trader, by the bye, " the more abundant and 
 valuable the results, the greater the sum of human 
 happiness, and the more stable the political institu- 
 tions of a country." 
 
 This standard, whatever its cause, produces 
 certain results which are clearly seen in the daily 
 life of the nation in its manners, customs, health, 
 morals and institutions. The effect of high wages 
 and all that go with them better food, better 
 clothing, better houses is continually to raise the 
 less fortunate to the higher level, instead of dragging 
 down a higher class to a lower level. The immi- 
 grant when he first lands is usually willing to work 
 at any price, but after he has been in America a 
 short time and has become sufficiently Americanised 
 to understand the higher value placed on labour, 
 he quickly demands a higher wage, and one of the 
 great efforts of working-men is to prevent the 
 ruling price of labour from being broken down by 
 the influx of foreign labour, accustomed to lower 
 wages and a lower standard of existence, and there- 
 fore satisfied with lower wages. 
 
 This menace of cheap foreign labour is the 
 constant dread of the working-men and the pro- 
 tectionist, who believe that nothing could be more 
 injurious to the welfare and prosperity of the 
 country than a lowering of the general standard ; 
 but it is a fear more imaginary than real. There is 
 abundant testimony to show that the energy and 
 greater productivity of the American working-man 
 
 P. U.S. H 
 
98 PROTECTION IN THE UNITED STATES. 
 
 are the results of his superior surroundings, and 
 that the immigrant must pass through a pro- 
 bationary period, that is, his physical condition 
 must be improved ; in other words, that he must be 
 " fattened up " for the market, before he is able to go 
 the pace of the American, who is, in short, of better 
 stock. To a witness before the Industrial Commis- 
 sion (Vol. XIV., p. 647) this question was put : 
 
 " Many employers and many representatives of 
 labour unions have testified that the American 
 workman in any industry turns out a greater amount 
 of finished work than the English worker will do, 
 and they even go so far as to say that is true of the 
 Englishman transplanted to this country ; that there 
 is something in the air or the living that induces him 
 to turn out a greater product. I would like to ask 
 you if it has been your observation that that is true ; 
 what do you think are the causes that bring it about ? " 
 
 " It is true ; the causes I do not know." 
 
 " Is it a better living better conditions under 
 which the people work ? " 
 
 " I will say we live somewhat better than they do 
 in foreign countries. The opportunities present 
 themselves. I do not think that even the child has 
 the opportunity of living in foreign countries as he 
 does here. He has everything in season and he lives 
 better. It is a necessity that he does or he could not 
 keep this pace up. I have known men to come to this 
 country and start to work, and found the pace so 
 rapid that they have retired and gone back. The very 
 experience of seeing us with our shirts off scared 
 them into hysterics almost." 
 
 " You think the operative in your line of business 
 will live as long in this country as he will in the 
 other ? " 
 
 " I think longer. I believe if I had stayed in 
 England I would not have been living." 
 
PROTECTION AND NATIONAL WELFARE. 99 
 
 Another witness before the same Commission 
 testified (Vol. XIV. p. 704) : 
 
 " When I get a new man who comes over here he 
 is green, and it takes him some time to get worked 
 in ; but after he has been here five or ten years he is 
 just as good as any of them, and he will turn out in 
 our factory in Paterson one- third more work than 
 when he first came." 
 
 " The very basis and foundation," said still another 
 witness (Vol. XIII., p. 538), " of the superior energy 
 of the working people of this country in my judgment 
 lies in the abundance and adequate supply of food as 
 compared to every other nation. You can buy the 
 elements of adequate nutrition in Boston, New York, 
 and Philadelphia at a certain rate ; in Chicago, 
 St. Louis, and the Middle West at a less rate. Go across 
 the water and in England you will find that the 
 necessary elements of nutrition cost very much more, 
 in Germany yet more, in Italy so much more that 
 they cannot have them. Now, in proportion to the 
 feeding of the human boiler with adequate fuel is the 
 development of human energy and power applying it 
 to mechanism. Mr. Olcott, who has established an 
 enormous machine shop in Berlin on behalf of some 
 of the Germans who came out here lately, who import 
 American machinery in order to make American 
 machine tools, reported to me that before they could 
 get their machine tools started they were obliged to 
 come over here and hire some high-priced American 
 workmen to go out and start them. They paid them 
 extravagant wages, and they found that the Germans 
 could not do the work. The average nutrition of 
 Germany will not stand the racket, and those workmen 
 are trying to come home because they find a higher 
 cost of subsistence out there." 
 
 In this connection I shall use one more quota- 
 tion from the evidence adduced before the Com- 
 mission : 
 
 H 2 
 
ioo PROTECTION IN THE UNITED STATES. 
 
 " I should like to say just here," a witness testified 
 (Vol. XIV., p. 202), "that this protection of the 
 standard of life, standard of income, standard of 
 health, standard of intelligence, for our working 
 people, is highly important from a patriotic view. A 
 great deal is said about assimilating recent immi- 
 grants, and we hope to do that by training them up 
 in our American institutions, in our public schools ; 
 but it is quite as vital, perhaps even more vital, that 
 they should be held to our American economic 
 standards." 
 
 Fundamentally the American protective tariff 
 system is based upon the belief that American 
 civilisation is upon a higher plane than that of 
 any other country, and in order to maintain that 
 high plane the unscrupulous or short-sighted 
 manufacturer must not be permitted to take ad- 
 vantage of the temporary necessities of the working 
 class by compelling them to labour for a minimum 
 wage. The economic justification of a protective 
 tariff is that the Government does a thing which 
 the individual cannot do for himself. This, the 
 free trader asserts, is paternalism, and paternalism 
 in its worst form, because it is in the interest of a 
 class and opposed to the best interests of the 
 masses. Protectionists maintain that it is not 
 paternalism. 
 
 " Paternalism," as one writer observes, " is giving 
 something to the individual ; Protection is protecting 
 the opportunities for the individual to do for himself. 
 Protection in its strictly scientific aspect consists in 
 preventing, by such non-paternal methods, as can 
 within governmental authority be devised, any 
 element of a lower civilisation from being the means 
 
PROTECTION AND NATIONAL WELFARE. 101 
 
 of industrial success against the element of a higher 
 civilisation. 
 
 " The Government should protect the superior 
 element against the inferior. The inferior does not 
 need Protection and is not entitled to it. The test of 
 civilisation is the dearness of man. A cheap man 
 never created high civilisation or a strong nation. 
 When, through social conditions, the average labourer 
 and citizen becomes expensive, he is a factor in the 
 economic life of the nation. It is the duty of the 
 Government to protect that superiority against the 
 inferiority of any other nation. Competition between 
 nations should be on the basis of the higher civilisa- 
 tion. If any one wants the advantage of this country 
 that person should have it only by rising to our plane 
 of doing business. We should not be exposed to the 
 disadvantage of being obliged to drop to his plane." 
 
 Patten, in his " Economic Basis of High Protec- 
 tion," says that an argument often advanced by 
 free traders is that Protection impairs the moral 
 independence of the people and causes them to be 
 less enterprising and independent than otherwise, 
 and that it creates in them a tendency to rely 
 upon Government aid instead of self-help. This 
 argument cannot stand to-day, no matter how true 
 it might have been in the earlier days of Protection. 
 "The independence of the American working- 
 man," is a favourite theme of writers both in 
 America and in Europe, who agree that the 
 American working-man is more independent than 
 the working-man of any other country, but the 
 American working-man will claim that this is not 
 so much independence as it is self-respect. No 
 doubt part of this spirit of self-assertion of the 
 
102 PROTECTION IN THE UNITED STATES. 
 
 rights of the individual, of equality, comes from 
 democratic institutions and the feeling that class 
 and caste lines are less rigidly drawn in America 
 than in other countries, and that civilisation being 
 still so new and as yet in its formative stage the 
 traditions of birth and ancestry count for less in 
 America than elsewhere. Yet the investigator into 
 causes must not omit to give due weight to the 
 moral effect produced by good food and proper 
 surroundings. It is impossible for a starving man 
 to retain his self-respect, or for manly independence 
 to exist where the ordinary decencies of life cannot 
 be observed. Instead of Protection tending to 
 break down the moral independence of a people, 
 it appears, on the contrary, to stimulate that 
 independence, to infuse into all classes greater 
 vigour and enterprise, to create a desire for new 
 wants and to furnish means for satisfying them. 
 
 Scientific observers are agreed that any national 
 condition, Protection or Free Trade, for instance, 
 diffuses itself and has an influence, immediate or 
 remote, according to circumstances, on the whole 
 body politic. The experience of America has 
 shown that this deduction is sound, and that even 
 in those industries in which the protection afforded 
 is less than in the more highly protected industries 
 the condition of the labourer is better than in Free 
 Trade countries. The reason is not obscure. The 
 minimum wage in the United States is determined 
 to some extent by the maximum. There is a 
 certain solidarity and community of interest 
 
PROTECTION AND NATIONAL WELFARE. 103 
 
 between all men in the ranks of the industrial 
 army, although the gulf that separates them is 
 frequently as wide as that between the com- 
 missioned officer and the private in the military 
 army. The roller in the steel mills, whose wages 
 would make many a London professional man 
 envious, who belongs to the aristocracy of labour, 
 has little in common with the semi-civilised and 
 ignorant Slav who works in the iron mines of 
 Pennsylvania, whose severe and enervating labour 
 digs out from below the ground the ore which is 
 converted into steel, which enables the roller to 
 receive his high wages. The roller and the miner 
 are not brought into contact ; the former lives on a 
 much higher plane than the latter ; as a rule they 
 know as little of each other socially as the chair- 
 man of a board of railway directors knows of a 
 porter at a station which is merely a dot on the 
 map, and yet a common cause unites them. The 
 roller no less than the engineer, the compositor, or 
 any other skilled workman is in sympathy with 
 every attempt made by every other workman to 
 elevate the general condition of labour and increase 
 wages, because he knows that his wages are none 
 too large ; and much more so, he says, must the 
 struggle for existence be felt by those whose wages 
 are only one-half so large as his own. The conse- 
 quence is that the minimum wage exercises no 
 effect on the maximum, but the maximum is the 
 lever which raises the standard. 
 
 It is my endeavour to make a truthful and 
 
io 4 PROTECTION IN THE UNITED STATES. 
 
 unbiassed presentation of conditions existing in 
 America and not unduly to magnify or seek to 
 represent them otherwise than they really are, or 
 to disparage conditions in Europe by exaggerating 
 those in America. It would be absurd and dis- 
 honest to try and make the reader believe that the 
 condition of the working-man in America is perfect 
 and that nothing more can be done to improve it. 
 Much yet remains to be done to make life softer 
 and sweeter to him, but conditions, as I have 
 previously said about cost, are relative and com- 
 parative, and in any study of the position of labour 
 in the United States one is compelled to compare 
 it with labour in Europe. That the advantages 
 are on the side of the American cannot, I believe, 
 be controverted by any one who approaches the 
 question with an open and unprejudiced mind and 
 who scientifically studies a subject too complex to 
 be dogmatised about with insufficient knowledge. 
 Whether this superior condition of American labour 
 is the result of Protection no one can say with 
 positive knowledge ; his deductions will be influ- 
 enced by his personal convictions. Protectionists 
 find the ready answer in Protection ; free traders 
 find an answer resting on more complex causes. 
 
 In any discussion of the position of labour in 
 the United States the investigator must always 
 remember that there is a wide chasm separating 
 skilled from unskilled labour, and that in certain 
 occupations in England the intelligence and stan- 
 dard of the workers are higher than in the like 
 
PROTECTION AND NATIONAL WELFARE. 105 
 
 occupation in America. The skilled labour of 
 America is the best paid labour in the world for 
 the reason, which has been set forth in previous 
 chapters, that machinery is more extensively em- 
 ployed than in other countries, which requires a 
 high degree of intelligence, enables the manufac- 
 turer to pay high wages, and permits the operatives 
 to have an abundance of good food and to live 
 in comfort. In trades where there is more hand 
 and less machine labour the standard is lower, 
 partly due to the fact that a lower order of intelli- 
 gence is required, and also to the workers being 
 foreigners of a lower mental type who have not 
 been long enough in America to be brought up to 
 the level of American stamina or intelligence. 
 Thus, in the coal mining region of Pennsyl- 
 vania, perhaps the general conditions are as bad 
 as anywhere in the world, but the actual work 
 of liberating the coal from the bowels of the 
 earth is a manual operation, an operation that 
 requires little skill but much brute force. The 
 percentage of Americans in the coal mines of 
 Pennsylvania is very small ; an overwhelming pro- 
 portion of the miners are Slavs, Hungarians, and 
 Italians, men of low instincts, illiterate, mentally 
 and morally stunted. It would not be fair to 
 compare them with the coal-miners of England, 
 or to take them as a representative type of 
 American labour. 
 
 A low physical condition and a high level of 
 intelligence cannot exist side by side in the same 
 
106 PROTECTION IN THE UNITED STATES. 
 
 nation. Both brain and body must be nourished ; 
 in a man whose blood is anaemic there will be 
 mental and physical weakness. The recent report 
 of the Inspector -General of Recruiting of the 
 British Army shows that one-third of all men 
 offering themselves for enlistment were rejected 
 because they were physically, mentally, and morally 
 unable to pass the required tests ; that the physical 
 standard is lower to-day than it ever has been, and 
 that if the standard of the past were retained the 
 percentage of rejections would be still higher ; and 
 this official states that out of every thousand recruits 
 accepted only sixty-seven had a good education. 
 
 The qualities required to make a good soldier do 
 not differ materially from those required to make 
 an efficient mechanic. In the one case as in the 
 other, he must be physically sound and mentally 
 alert, for in these days, on the field as well as in 
 the factory, much depends on individual initiative. 
 But a nation one-third of whose males of military 
 age are defectives cannot hope to compete with 
 other nations, whether on the field or in the factory, 
 whose men are of superior physique and mental 
 equipment, whose bodies and brains have been fed 
 and not starved. 
 
 One would be inclined to believe that the average 
 duration of life of the American working-man must 
 be greater than the English working-man, because 
 good food, better sanitation, and higher surround- 
 ings ought to conduce to longevity, but there are 
 no means of proving the soundness of the theory, 
 
PROTECTION AND NATIONAL WELFARE. 107 
 
 as American census figures do not give ages by 
 occupations. 
 
 Hunger is the great incentive to crime and sin. 
 An investigator of social conditions in America 
 says : 
 
 " We find that the instances where women are 
 driven into sin by want are comparatively rare," and 
 he also says : " Even where everything seems to be 
 going against a family, there is this quality of 
 dauntlessness which one does not find in the same 
 grades of life in London, for instance. In the 
 English cities there is hereditary pauperism which 
 existed for several generations. Fortunately, in our 
 American cities we hardly find that at all as yet, and 
 that is one great ground of hope." 
 
 Protectionists assert that it will not be contro- 
 verted that a well-fed nation is a better nation 
 that is, better physically, mentally, and morally 
 than one which is under-fed or constantly on the 
 border line of starvation. It will do more and 
 superior work, the standard of self-respect will be 
 higher, its moral tone will be raised. No nation 
 can enjoy these blessings when the wage scale is 
 so low that the wage-earner has no margin above 
 the mere cost of a scanty, and often insufficient, 
 living. In the language of the writer already 
 quoted, " A cheap man never created a high 
 civilisation or a strong nation." 
 
io8 PROTECTION IN THE UNITED STATES. 
 
 CHAPTER VIII. 
 PROTECTION AND POLITICS. 
 
 IN America the protectionist as well as the free 
 trader appeals to morality to sustain his position. 
 The protectionist, as I have already shown, says 
 that Protection is morally right because it elevates 
 humanity and is in the interest of the great mass 
 of the people. The free trader says that Pro- 
 tection is morally wrong, that it is as immoral as 
 theft, that, in fact, it is only another species of 
 theft made respectable by legal sanction. The 
 protected manufacturer and the beneficiaries of 
 Protection generally are robbers who exact a 
 tithe from every customer ; they levy a toll just 
 as in the old days the robber barons laid a 
 country under tribute, and so appropriate do free 
 traders consider this simile that their favourite 
 name for the protected manufacturers is "the 
 robber barons." 
 
 The purpose of the present study being an 
 attempt to present the historical development 
 and effects of Protection in America and an 
 examination of certain of its economic and not 
 its ethical phases, I shall not enter into a meta- 
 physical discussion, but here I shall attempt to 
 answer a question often asked : " What is the 
 
PROTECTION AND POLITICS. 109 
 
 influence of the tariff on politics, and to what 
 extent does politics influence the tariff?" 
 
 In the United States the tariff has always been 
 a political question. In previous chapters I have 
 given a short history of tariff legislation in the 
 United States, and it is therefore only necessary 
 now to add that since the existence of two well- 
 defined political parties in America, the Republicans, 
 and their predecessors the Whigs, have been the 
 high tariff party, and the Democrats have called 
 themselves the low tariff or Free Trade party, 
 although it must not be forgotten that very few 
 " tariff reformers," which is a flexible term to be 
 interpreted according to circumstances, have the 
 courage to avow themselves free traders as that 
 term is understood in England. Most Democrats 
 theoretically believe in " a tariff for revenue," 
 which, if strictly construed, would mean simply 
 the levying of such duties as would be merely 
 sufficient to raise an adequate income for the 
 maintenance of the army and navy, foreign 
 intercourse, the civil establishment, and the other 
 proper functions of government, without con- 
 sideration of the protection to be afforded to 
 domestic industries or the American working-man. 
 It has been pointed out in a previous chapter that 
 when the Democrats were given an opportunity 
 in President Cleveland's second Administration to 
 make public confession of their faith their courage 
 failed them, and they contented themselves with a 
 Tariff Bill that was in every respect a protectionist 
 
i io PROTECTION IN THE UNITED STATES. 
 
 measure, as much so as any framed by the Republi- 
 cans, but a trifle lower in percentages. The Demo- 
 cratic Wilson Bill and the Republican McKinley 
 and Dingley Bills did not differ in principle, they 
 simply differed in the amount of Protection. 
 
 Nor must this be regarded as an evidence of 
 treachery or of political opportunism on the part 
 of the Democratic party. Times change and 
 sensible men change their views to suit the 
 times. In the youth of the Republic, in its 
 light-hearted days, before it had been tried in 
 the sorrow of the Civil War and in that crucible 
 of sorrow had lost its youth and found its man- 
 hood, the South was an agricultural country. The 
 war swept away slavery, and when slavery was 
 destroyed new economic conditions were born. 
 Before the war the South raised cotton and 
 tobacco and sugar-cane, which were exported to 
 Europe, principally, if not almost entirely, to 
 England, and the planter of the South was solely 
 interested in being able to purchase as cheaply as 
 possible. He was not an employer of factory 
 labour, consequently the condition of labour was 
 of no concern to him. His labour was enslaved, 
 and the economic laws governing free labour did 
 not apply to serfs. So long as the wealth of 
 the South lay in the bosom of the soil and 
 black chattels harvested the crops, whose price 
 was made in a mart 3,000 miles across the sea, 
 the South was destined to cling to the idol of 
 Free Trade. 
 
PROTECTION AND POLITICS. 11? 
 
 But Protection now changes " from a temporary 
 expedient to gain specific ends to a consistent 
 endeavour to keep society dynamic and pro- 
 gressive." In the wake of the Civil War followed 
 desolation and ruin to the South. Slavery ceased 
 to exist. Fortunes had disappeared. The old 
 order had departed, never to return. For a time 
 the South lay prostrate, but only for a time. The 
 soil of the South was a soil of incalculable wealth, 
 but beneath the surface was greater wealth never 
 dreamed of. The knowledge that the South was 
 rich in minerals, that it had iron and coal, taught 
 it the folly of transporting its manufactures of 
 iron and steel 1,500 or more miles when they 
 could be manufactured on the spot and save the 
 cost of transportation. In consequence the South 
 to-day is rich in iron furnaces ; its competition is 
 now making itself felt in the Northern States ; 
 the iron furnaces of Alabama are wresting the 
 supremacy from those of Pennsylvania, just as 
 Pennsylvania wrested the supremacy from Massa- 
 chusetts, and the products of Southern iron furnaces 
 are competing with those of the North in the 
 markets of the world. 
 
 Massachusetts is no longer the cotton factory of 
 the United States. The cotton States of the 
 South are dotted with factories, which supply the 
 demand for certain grades of cotton cloths in the 
 local markets. The Southern factories are not 
 yet able to compete with the Northern in the 
 manufacture of high-grade goods, because thus far 
 
ii2 PROTECTION IN THE UNITED STATES. 
 
 the labour in the Southern factories is lacking in 
 experience and the skill which is the heritage of 
 generations of workers, but the trade of the Far 
 East, which at one time was the monopoly of 
 Lancashire, yet which half a century later passed to 
 Lowell and other cotton centres in Massachusetts 
 and elsewhere in New England, has now for a 
 third time shifted and gone to the South. 
 
 Every additional furnace, every new loom, every 
 dollar invested in manufacturing enterprise in the 
 South has been a missionary in the cause of 
 Protection. The Southern manufacturer, no less 
 than his rival of the North, found that his best 
 interests lay in Protection. Free Trade had 
 become a creed with the Southerner ; it was one 
 of the tenets of his Democratic faith ; but by 
 becoming a creed it had lost its scientific basis. 
 The test of experience has shown that many of the 
 fundamental principles argued with so much force 
 by Adam Smith and other eminent Free Trade 
 theorists could not survive the shock when brought 
 in rude contact with facts. The Southerner would 
 like to believe that his theories were right and his 
 facts were wrong, but his bank account and his 
 balance sheet bear eloquent witness to the impossi- 
 bility of reconciling theories with facts when the 
 theories are unsound. 
 
 The tariff has always been a subject of political 
 controversy in the United States, or at least in 
 modern times, because after the issue of slavery 
 had for years been fought in the forum and finally 
 
PROTECTION AND POLITICS. 113 
 
 settled for ever by the sword, and the great pro- 
 blems following the war had been solved, until the 
 war with Spain, which brought new questions of 
 foreign policy and colonial administration, about 
 which men might very properly hold opposing 
 views, there was really no national question, no 
 great political issue, nothing to distinguish parties 
 except the tariff. There were, of course, petty 
 questions injected into every electoral campaign, 
 but stripped of all surplusage was the naked ques- 
 tion put to every voter : Will you vote for the party 
 of Protection or the party of Free Trade ? 
 
 The tariff became a battle cry. Men rallied 
 around its standard. It was at once the good and 
 evil genius of national existence. If crops were 
 abundant in America and crops of all the rest of 
 the world were drought-stricken, so that the world 
 had to turn to America for bread, which made the 
 farmer as well as everybody else prosperous, 
 " Behold," said the protectionist, " the beneficent 
 effects of Protection ! " If crops in America failed, 
 if the folly of statesmen attempted the impossible 
 task of making silver equal to gold, and men began 
 to hoard their gold and the world grew frightened of 
 American finance, the free trader in sullen gloom 
 pointed to the tariff, that tariff which, like an 
 unclean bird, fed on the vitals of national existence 
 and gorged itself on human misery. The masses 
 might hunger and shiver, but the robber barons, 
 behind their ramparts of dollars, coined from the 
 life-blood of the people, feasted in front of their fires. 
 
 P.U.S. I 
 
ii 4 PROTECTION IN THE UNITED STATES. 
 
 If it be true that it is to the selfish interest of 
 the employer of labour to fasten a system of 
 Protection upon the people, and, conversely, that 
 Protection is opposed to the interest of the 
 employed, it is only natural that many employers 
 would do everything in their power to perpetuate 
 the party of Protection. The Protection party 
 could appeal to the protected manufacturer on the 
 most sordid and selfish grounds. You must give 
 us money, the party manager would say, because 
 you cannot make a more profitable investment. 
 Protection has made you rich, Free Trade will 
 make you poor ; it is, of course, to your material 
 interest to enable the Protection party to retain 
 its power. This argument has led to the belief 
 among free traders that manufacturers, in their 
 efforts to rivet the shackles of Protection upon the 
 country, have debauched politics, and that Pro- 
 tection and politics have been an endless chain of 
 corruption, beginning with the prostitution of a 
 political party in the interests of a class and 
 ending in that class controlling the party and its 
 policy for its own mean ends. 
 
 To some extent, of course, this indictment is 
 justified. No man will work against his own 
 interests, whether he is controlled by a purely 
 selfish purpose or is animated by a higher motive. 
 The manufacturer who has no knowledge of 
 economic laws, to whom labour is simply so much 
 raw material to be turned into the finished product, 
 to whom the well-being of his employees is nothing 
 
PROTECTION AND POLITICS. 115 
 
 so long as he is made rich and profits by their 
 labour, champions Protection because Protection 
 is good enough for him and any change, he fears, 
 will operate to his disadvantage. But the manu- 
 facturer whose field of vision is broader, who knows 
 that national prosperity and happiness rest not upon 
 the wealth of the individual but the well-being of the 
 masses, who knows that the American working man 
 is paid higher wages and lives among better surround- 
 ings than the working man in any other country, 
 supports Protection not because he is avaricious but 
 because something finer is his guiding principle. 
 
 An illustration will perhaps explain why the 
 tariff has been made a political issue in the United 
 States. Suppose in England there was no differ- 
 ence of opinion among Conservatives or Liberals 
 as to the fiscal, foreign or colonial policy of the 
 Empire, and only minor matters of domestic 
 concern established the dividing line between 
 parties, but the test of party fealty was whether 
 England should build her navy in her own yards, 
 or should buy her warships armed and ready for 
 use from foreign builders, from American, German, 
 French, Italian, or those of any other country 
 competent to build a first-class battleship at a 
 price lower than a competitor. The argument in 
 favour of foreign-built ships, which, with a change 
 of motif, is the argument of American free 
 traders, would run something like this : 
 
 " We concede that England must have a great and 
 powerful navy, but it is folly to build a ship in an 
 
 I 2 
 
u6 PROTECTION IN THE UNITED STATES. 
 
 English yard when a ship similar in all respects can 
 be obtained for less money abroad. The less money 
 we have to pay for every new ship added to the navy, 
 the less taxation will have to be imposed upon our 
 people, and the more ships we can have for the same 
 amount of money. Consequently, we are better off 
 all round, and it must be for the advantage of the 
 nation to save money." 
 
 The advocate of home industries would make 
 the same reply that the protectionist in America 
 has so often used : 
 
 " The argument of cheapness appeals to the popular 
 imagination, but if we buy our ships abroad we 
 deprive labour shipbuilders, engineers, fitters, turners, 
 men in a hundred different trades of the opportunity 
 of earning a living ; the money which would be paid 
 to our people goes to the support of foreign labour 
 and increases the wealth of foreign countries. It is 
 true that at the present time it costs more to build a 
 battleship in England than it does abroad, but if the 
 work is furnished capital will soon correct that. 
 And even if prices should always remain higher in 
 England than elsewhere, that difference will be more 
 than compensated by the wages earned by domestic 
 labour." 
 
 If parties divided on this issue in England it is 
 not improbable that a builder of merchant ships, 
 who felt himself competent to build first-class battle- 
 ships, would support the party advocating home 
 industries, and would make financial contributions 
 to the party. On the other hand, it is no violent 
 stretch of the imagination to imagine the agents 
 of foreign shipbuilders foremost in their advocacy 
 of the opposing party, and even more lavish con- 
 tributors to its war chest. That would be deplorable, 
 
PROTECTION AND POLITICS. 117 
 
 but it would not alter the wisdom or folly of the 
 particular policy ; rather, perhaps, it would carry 
 conviction to the ordinary Englishman that what 
 is for the interest of foreign countries is not always 
 for the best interest of England. The protectionist 
 in America supports Protection because he believes 
 it furnishes work at high wages to the largest 
 number of Americans, and promotes the prosperity 
 and welfare of the nation. 
 
 If the manufacturer in America supports Protec- 
 tion because it is to his interest to do so, we must 
 not forget that there is another class that contributes 
 with equal generosity to the cause of low tariff or 
 Free Trade, and is equally an enemy to the purity 
 of politics. I refer, of course, to the importer. To 
 him the wages of labour or the conditions of 
 labour are of no consequence. His object is to 
 import as much as possible, and the lower the 
 tariff on certain articles the greater his American 
 market for foreign-made goods. The domestic 
 manufacturer, no matter how sordid, is, despite his 
 sordidness, animated by a certain spirit of patriotism, 
 and to him the welfare of his own country is of 
 greater consequence than the welfare of a foreign 
 country. The importer, on the other hand, is 
 always mercenary. With him patriotism stops at 
 the water's edge. It makes no difference to him 
 where an article is made, under what conditions, at 
 what cost of physical degradation, so long as he 
 can find a market, and successfully compete with 
 the domestic manufacturer. 
 
ii8 PROTECTION IN THE UNITED STATES. 
 
 It is unfortunately true that in America the tariff 
 is a political question, and will always continue to 
 be one so long as men make it an "issue," and 
 approach its study from the standpoint of the 
 politician rather than that of the economist or the 
 sociologist ; and the tariff, in its broader aspects, is 
 perhaps even more a sociological question than it 
 is an economic. For some years past there has 
 been a demand on the part of manufacturers and 
 business men generally " to take the tariff out of 
 politics," to consider the tariff scientifically, and in 
 the framing of Tariff Bills not to raise a schedule 
 at the mandate of campaign contributors, or lower 
 it because a pre-election promise must be redeemed. 
 That happy stage of scientific advanced progress 
 has not yet been reached in America, but when the 
 tariff is no longer a football for politicians, when 
 certain of its inequalities have been corrected, and 
 its unjust discriminations removed, the influence 
 of a tariff upon national industries and national 
 welfare will be more dispassionately studied, and 
 the menace of the tariff controlling or corrupting 
 politics will no longer be feared. 
 
THE TARIFF AND TRUSTS. 119 
 
 CHAPTER IX. 
 THE TARIFF AND TRUSTS. 
 
 IN the United States during the past few years 
 a combination of circumstances led to the forma- 
 tion of a large number of industrial corporations and 
 joint-stock companies, popularly termed "trusts," 
 and fixed the attention of the world upon one 
 phase of American economic finance which gave 
 rise to more discussions and more conclusions 
 predicated on false premises than perhaps any 
 other one branch of economics. 
 
 The majority of the trusts formed in the United 
 States during the last few years, from 1898 to the 
 beginning of 1903, when the trust madness ceased 
 to exercise such a malign influence over its victims, 
 were largely over-capitalised and obviously, to the 
 person with only a rudimentary knowledge of busi- 
 ness, foreordained to destruction because they were 
 an attempt to subvert certain well-established laws 
 of commerce. 
 
 Fundamentally the principle of the "Trust" 
 using that much applied word in its generic sense, 
 and intended to mean a combination of heretofore 
 rival and competing establishments, under a centra- 
 lised and unified management, for the purpose of 
 greater economy both of management and production 
 
i2o PROTECTION IN THE UNITED STATES. 
 
 and the elimination of ruinous competition, so 
 that profits might be increased and costs decreased 
 is scientifically sound, based on advanced busi- 
 ness principles, and in the interest of the consumer. 
 But although correct in principle, the American 
 trust was an economic and social menace, because 
 its organiser, who was more frequently a promoter 
 or a speculator than a manufacturer or a merchant, 
 using that term in its proper acceptance, found 
 that his profits lay more in the speculative manipu- 
 lation of the shares of the trusts, and their purchase 
 by the public, than in the economies of management 
 or the reduction of the costs of manufacture. 
 
 When distance adds the proper proportions to 
 the relativity of perspective, and time enables a 
 more correct judgment to be formed than when an 
 event is shaping itself under our hands, the trust 
 craze of the years 1898 to 1903 in the United 
 States will come to be looked upon as one of the 
 most remarkable psychological manifestations the 
 world has ever known, equalled only, but not 
 exceeded, by the magnificent schemes of John 
 Law, and the mad haste of the people of two 
 continents to become wealthy over-night by ob- 
 taining a share of the riches of the Indies, or by 
 growing tulips of extraordinary size. 
 
 In 1898 the American people, following a period 
 of great industrial depression and a foreign war, 
 which impressed them anew with their military and 
 financial strength, which fired their vanity, and 
 quickened their always strong belief in the 
 
THE TARIFF AND TRUSTS. 121 
 
 invincibility of their destiny, and which set the 
 stagnant pulse of the nation beating with accele- 
 rated and almost feverish vitality, were in a mental 
 condition that, in a military people, would have 
 turned their thoughts in the direction of further 
 military adventures, but which, in a commercial 
 people, acted as a powerful stimulus in making the 
 nation possessed with the impetuous desire to make 
 money. 
 
 The conditions were ripe for any adventure that 
 promised gain. Tulips or South Sea Bubbles, the 
 extraction of sunshine from cucumbers or making 
 water run up hill, were one and the same. The 
 promoter who could issue a deftly worded pro- 
 spectus, who had the prestige of success behind him, 
 whose shares stood at a premium of 25 or 50 per 
 cent., was of more importance than the man who 
 knew all the details of his trade, or the master 
 mind who knew when to sell or what to buy. Of 
 the business of the companies in which the public 
 invested, and in whose shares they gambled on the 
 Stock Exchange, they knew nothing, and they 
 cared still less. It was sufficient for them that 
 their shares bought to-day could be sold to-morrow 
 at a substantial profit, and must necessarily be 
 worth still an added profit the day after. The 
 whole country gave itself up to gambling, thinly 
 veiled under the euphony of " investing in trust 
 shares." A few persons, the ignorant and the 
 innocent, those least able, of course, to suffer loss, 
 professional men of small means, widows, the 
 
122 PROTECTION IN THE UNITED STATES. 
 
 trustees of orphans, honestly believed all they were 
 told, and made bond fide investments ; but the 
 majority bought and sold according to the whim 
 of the moment, with as much intelligence and as 
 much reason as the gamester who puts his money 
 now on the seven and now on the nine, who plays 
 red or black, because according to his theory of the 
 doctrine of chances, a number or colour is due to 
 win. Many made money for the moment, but in 
 the end the majority lost, and, as in all games of 
 chance where there is a fixed percentage in favour 
 of the banker, the few who handled the cards, and 
 who stacked them whenever there was a run of luck 
 against the bank, had all the winnings. 
 
 This extraordinary spectacle of a nation at the 
 gambling table, who used railways and iron mines 
 and steamships for counters, who while pretending 
 to be engaged in legitimate business operations 
 watched the stock " ticker " with the same feverish 
 anxiety and nervous dread that in the time of 
 war men and women watch and wait for the 
 announcement that shall tell of national humilia- 
 tion or give cause for national rejoicing, attracted 
 the attention of the whole world. The world had 
 to find a rational explanation. It found it in the 
 tariff. 
 
 Free traders have always believed that the 
 trusts were the effect of the tariff; that if there 
 were no tariff there would be no trusts. This belief 
 was fortified when Mr. Henry O. Havemeyer, one of 
 the great sugar refiners of the world, testified before 
 
THE TARIFF AND TRUSTS. 123 
 
 the Industrial Commission (Vol. I., p. 101, et seg.) 
 " the mother of all trusts is the Customs Tariff 
 Bill," and he added that inordinate protection was 
 given to all industries " sugar refining excepted." 
 
 Mr. Havemeyer's statement reminds one of the 
 American humorist, Artemus Ward, who said he 
 was willing to show his patriotism by allowing 
 all of his wife's relatives to go to the war. 
 Mr. Havemeyer is equally generous and disin- 
 terested. One other passage of Mr. Havemeyer's 
 testimony is peculiarly impressive as showing the 
 difference it makes whose ox is gored. The tariff 
 rates on all articles, he said, should be reduced to 
 10 per cent, ad valorem. " I have said that sugar is 
 an exception," he added, and he explained to the 
 Commission that sugar was at that time given a 
 protection of one-eighth of one cent per pound- 
 " It is not enough," he blandly added ; "the least 
 it should have is one-fourth of one cent per pound." 
 
 Mr. Havemeyer's testimony threw the protec- 
 tionist ranks into temporary confusion, but they 
 soon rallied. If in England, they said, thsre were 
 no trusts or combinations, that would be strong 
 presumptive evidence that combinations are im- 
 possible in a Free Trade country and that the tariff 
 mothered trusts, but that evidence is not sustained. 
 In a report made to the Industrial Commission by 
 Professor Jeremiah W. Jenks, this language is used 
 (Vol. XVI II., pp. 7, et seq.) : 
 
 " In England the movement toward combinations 
 has not gone so far as in either Austria or Germany. 
 
124 PROTECTION IN THE UNITED STATES. 
 
 There were in earlier days many local combinations 
 to keep up prices, and in some cases these rings have 
 proved very successful. With the last three years, 
 however, a very active movement toward the concen- 
 tration of industry into large single corporations, 
 quite after the form which has been common in the 
 United States, may be observed. Nearly all of the 
 feeling that one notes in England on this subject has 
 reference to the later great corporations formed by the 
 buying up of many different establishments in the 
 same line of business, corporations that through 
 combination have succeeded in acquiring in many 
 particulars a good degree of monopolistic control. 
 
 " In Free Trade England the combination move 
 seems to have developed considerably further than in 
 Protectionist France." 
 
 " For several years past the trend of business 
 toward consolidation and combinations of different 
 establishments has been noticeable in England. For 
 the last two or three years this movement has been 
 very marked. Ten or twelve years ago some of the 
 organisations which are still in existence, such as the 
 National Salt Union and the Brass Bedstead Combi- 
 nation in Birmingham, were formed, but within the 
 last two years a large crop of new consolidations in 
 the form of single large corporations have sprung up, 
 especially in the manufacturing districts of the North. 
 Not merely is this tendency toward the formation of 
 combinations noticeable, but the still further tendency 
 toward making existing combinations much more 
 complete in the control which the central management 
 holds over the different members is no less striking, 
 a fact which will be brought out more completely in 
 the discussion regarding the forms of combination 
 and methods of organisation." (Vol. XVIII., p. 14.) 
 
 Professor Jenks describes the formation of pools 
 and combinations in England, and says : 
 
 " There is nothing especially distinctive in the form 
 from that of the later American combinations which 
 
THE TARIFF AND TRUSTS. 125 
 
 in like manner, as, for example, the American Sugar 
 Refining Company [the company, by the way, of 
 which Mr. Havemeyer is president, it is interesting to 
 note], have bought up the plants of different com- 
 panies in order to unite them." 
 
 Several combinations are mentioned by Professor 
 Jenks to show that they practically control the 
 trade. It is not necessary to repeat the list here. 
 In England, as in the United States, the object of 
 the trust is to control the trade and to increase 
 profits in two ways : by the elimination of compe- 
 tition to prevent a reduction of price, and by the 
 power given to monopoly to enhance the price. 
 
 A few years ago, even as recently as three years 
 ago, the trust was a bogey to frighten capital as well 
 as labour. It has now lost much of its awe- 
 inspiring horror, although free traders still vehe- 
 mently insist that if there was no tariff there 
 would be no trusts. 
 
 " Naturally in England," says Professor Jenks, " as 
 there is no tariff of a protective nature on any of the 
 articles manufactured by the combinations, no claim 
 has been made that the combinations are created by 
 the tariff, a claim so usual in protectionist countries. 
 It may be worth while to observe, however, that 
 many powerful combinations have been formed in 
 England within the last few years, and that in those 
 lines the causes for the formation seemed to be 
 substantially the same as those given in other 
 countries, and the results of the combinations upon 
 prices and wages do not materially differ." 
 
 What is the result upon prices and wages ? It is 
 true that prices of nearly all articles advanced 
 
126 PROTECTION IN THE UNITED STATES. 
 
 during the great business activity and general 
 prosperity which followed the enactment of the 
 Dingley Tariff Act of 1897, but this increase 
 occurred in quite a marked degree in articles 
 which were not produced or in any way controlled 
 by trusts as those the products of trusts. 
 
 At one time it was feared that the trusts would 
 embrace in their octopus-like tentacles all com- 
 petitors, and when competition ceased to exist 
 the helpless public, like the victim in the grasp of 
 the octopus, would have its life-blood crushed out. 
 In some instances trusts foolishly flouted public 
 opinion by raising prices, but that move always over- 
 reached itself. From time immemorial men of 
 vivid imagination and audacious cunning have 
 essayed to " corner " a commodity or to create a 
 monopoly, and they have succeeded for a brief 
 time, but only for a brief time. We have seen a 
 single man controlling the world's supply of wheat 
 or corn or cotton, with all the world appealing to 
 him for foodstuffs or raw material ; we have seen 
 one man by a shameless coup hold in the grasp of 
 his hands the traffic of a continent ; but no man 
 has ever exercised his destructive power for more 
 than a fleeting moment as time counts in history. 
 
 " Corners " usually break of their own weight ; 
 combinations invite attack. I have already shown 
 that abnormal profits encourage competition. No 
 combination for the manufacture and sale of any one 
 article has ever been formed in America that 
 has included in its scope every manufacturer ; 
 
THE TARIFF AND TRUSTS. 127 
 
 frequently it has embraced 90 per cent., but the 
 remaining 10 per cent, has proved the saving 
 remnant. That remnant to live must undersell 
 its huge antagonist, and the trust, to crush the 
 independent competitor, must sell at a lower price 
 than any rival, so that excessive profits cannot long 
 continue. Manufacturing monopoly, unless founda- 
 tioned on patents, is well nigh impossible in the 
 United States. " I have seen more trusts dissolved 
 than organised," said Edward Atkinson when asked 
 if he did not fear the trusts. 
 
 The effect of the trust upon employment and wages 
 has received the careful attention of the Depart- 
 ment of Labour, which found that where business 
 organisations were combined into trusts, while in 
 some cases a reduction was made in the number 
 of persons employed, as a rule the number was in- 
 creased and higher wages were paid in the same 
 establishment after the combination than before. 
 In addition to this general increase in employment 
 and wages which followed the combinations 
 examined into by the Department of Labour, it 
 is asserted that the creation of these great organi- 
 sations of capital result in an advantage to labour 
 by ensuring steady employment. It is claimed 
 that the trust whose capital is not fictitious or 
 watered is better able to meet adverse market con- 
 ditions than can a number of smaller and weaker 
 competing units. 
 
 The outcry against the trusts, or more properly 
 speaking, combinations, is illogical and hysterical. 
 
128 PROTECTION IN THE UNITED STATES. 
 
 In themselves combinations are a good thing and 
 an evidence of progress, but as with many other 
 agencies intended to be the servant they have 
 become the master ; in many cases their legitimate 
 purpose has been perverted and they have been 
 made instruments to do harm. The great co- 
 operative stores in London and other large English 
 cities illustrate the economy of combination and the 
 advantage derived by the consumer in being able to 
 obtain superior goods at lower prices. One railway 
 system under a single management between London 
 and Glasgow can give the public a better service at 
 lower fares than if the route traversed was over the 
 lines of three separate companies. These things are 
 so obvious that they need no elucidation. 
 
 But it is claimed that unscrupulous men availing 
 themselves of the advantage accorded by the tariff 
 form a combination to increase the price of a 
 commodity. It has been shown that the same dis- 
 regard for the public welfare exists in a Free Trade 
 country as in a Protectionist country, so that clearly 
 trusts do not draw the breath of life from the 
 tariff, and the fear that the adoption of a tariff 
 would lead to the monopolistic control of business 
 is an imaginary fear. It may be pointed out, how- 
 ever, to those persons who honestly believe that 
 this is an ever present danger, and not merely a 
 spectre of the imagination, that the means of pre- 
 vention are always in the hands of the Legislature, 
 and if the Legislature does its duty the power of 
 monopoly and oppression can always be curbed. 
 
THE TARIFF AND TRUSTS. 129 
 
 Appropriate legislation, while not interfering with 
 the proper freedom of trade or the legitimate enter- 
 prise of the individual, while placing no obstacle in 
 the development of modern industrial conditions, 
 and while not hampering initiative or preventing 
 the use of such economical or other advanced 
 processes as superior intelligence or skill may show 
 to be of advantage in the conduct of business, can 
 protect the public against rapacity or dishonesty. 
 If the Legislature exercises its power wisely, 
 honestly, and in the spirit of modern progress, the 
 public has nothing to fear from the trusts ; rather 
 it will welcome them as among the most valuable 
 of the slaves of the lamp that civilisation has 
 called into existence. 
 
 P.U.S 
 
130 PROTECTION IN THE UNITED STATES. 
 
 CHAPTER X. 
 WHAT THE TARIFF COSTS. 
 
 THE economic and social effects of Protection 
 its relation to and influence on wages, productivity, 
 the cost of living and social conditions generally, 
 have been examined in previous chapters, and 
 there is now another phase of the question still to 
 be considered its financial aspect, or the general 
 cost which is laid upon the nation for supporting 
 Protection. 
 
 In the complex civilisation of to-day, which is 
 the distinguishing characteristic between society 
 now and society as it existed in the past, it is not 
 always easy to reduce the elements of civilisation 
 to their prime cost and weigh them in the scale of 
 pounds, shillings and pence. The exact expense 
 of education, of sanitation, of a finer cultivation of 
 the humane instinct cannot be always estimated, 
 and in every calculation allowance must be made 
 for the offset which is the result of these expendi- 
 tures, which raise national intelligence and health, 
 which make a nation a greater commercial asset, 
 if a nation is to be gauged by the test of 
 commercialism. 
 
 The direct effect of Protection has been shown 
 to be higher wages to labour jn America than 
 
WHAT THE TARIFF COSTS. 131 
 
 elsewhere, an average cost of living little, if any, 
 greater in America than in other countries, and a 
 higher standard generally which, it is believed, is 
 shared in by all classes. It is constantly asserted 
 by the opponents of Protection that these benefits, 
 and they are admitted to be benefits, are purchased 
 at too high a cost. 
 
 There are no means to determine with mathe- 
 matical precision whether the protectionist or the 
 free trader is right. Conditions in the United 
 States differ so markedly from those in other 
 countries with which a comparison could be made, 
 that any attempt to determine the effect of Pro- 
 tection by comparing the growth in population, 
 production, commerce, bank deposits or wealth 
 with that of other countries might be unjust and 
 misleading. This is also true, in some degree at 
 least, if an attempt is made to compare conditions 
 in America in high and low tariff eras. Society in 
 the United States in the first century of its exis- 
 tence has been in a state of constant flux ; it has 
 been more quickly responsive to changing social 
 conditions than perhaps any other country ; its 
 very mistakes, its experiments, the recklessness of 
 youth ; all those things, in short, that might have 
 been fatal to a well-matured social system have 
 often resulted to the advantage of the United 
 States. The golden grains and the grains of gold 
 the wheat fields of the West and the gold mines 
 of the Pacific coast added so enormously to her 
 wealth that even the folly of her law-makers was 
 
 K 2 
 
132 PROTECTION IN THE UNITED STATES. 
 
 not great enough to defeat the beneficence of 
 nature. 
 
 It is impossible to say whether Protection 
 has laid a burden upon the nation, whether the 
 United States would be richer, stronger, more 
 advanced if it had consistently adhered to Free 
 Trade ; but it may be added that even the most 
 pronounced advocate of Free Trade does not make 
 the assertion in unqualified terms. Proudhon's 
 " All property is robbery " finds its counterpart in 
 the expression of the free trader, who says " Pro- 
 tection is plunder " ; who argues that even if 
 Protection were necessary in the past it is no 
 longer necessary in the present, and is merely a 
 device of unscrupulous greed to enrich itself by 
 taking advantage of the people, who ignorantly 
 allowed themselves to be enmeshed in the coils of 
 Protection. 
 
 In any argument between protectionist and free 
 trader, the former can adduce certain unassailable 
 statistics in support of his position, while the latter 
 must rely on theory to a large extent. Thus, 
 resting on the mathematics of facts, the protec- 
 tionist shows that the period of greatest national 
 income was coincident with the highest duties 
 levied on imported goods, that is, the highest 
 tariff, and, conversely, low tariffs and low income 
 went hand in hand. It does not necessarily follow 
 that the magnitude of national income is the most 
 certain test of national prosperity, but it is one 
 test ; and as with individuals so with nations, 
 
WHAT THE TARIFF COSTS. 133 
 
 an income honestly earned and not the result 
 of abnormal causes is a standard of material 
 conditions. 
 
 From 1791 to 1903, a period of 112 years, there 
 have been twelve years when the United States 
 has been at war. Of the remaining years of peace 
 fifty-three have been under low tariffs and forty- 
 seven under high tariffs ; those fifty-three years 
 having produced an aggregate net deficit, or an 
 excess of expenditures over receipts, of $33,143,142 ; 
 and in the forty-seven years of high tariffs there 
 was a net surplus, or an excess of receipts over 
 expenditures, of $2,122,188,705 ; or reduced to 
 English equivalents, in the one case the deficit 
 was 6,62 8,648, and in the other the surplus was 
 424,437,741. It is significant that only twice in 
 those hundred years did the expenditures exceed 
 the revenues in high tariff periods. 
 
 Yet this array of figures does not carry con- 
 viction to the free trader. In any discussion of 
 the subject he always cites the prosperous years 
 immediately following the enactment of the Walker 
 tariff in 1846. Undeniably those years were 
 prosperous, but was the prosperity due to the low 
 tariff, as the free trader claims, or to war, the 
 demand for American foodstuffs and the discovery 
 of gold, which are the causes assigned by pro- 
 tectionists ? 
 
 Attempts to determine the effects of low or 
 protective tariffs at any given period, in which 
 their operation extends over a few years, are 
 
134 PROTECTION IN THE UNITED STATES. 
 
 unsafe and liable to be misleading-, and the only 
 satisfactory and fair method is to compare the 
 visible effects of protective and low tariffs respec- 
 tively upon the economic conditions of the United 
 States prior to and since 1861. From 1790 to 
 1 86 1, there have been only three brief periods of 
 what is termed " Protection," two of these being 
 of four years each and the other nine years ; while 
 the forty-three years since 1861 may be considered 
 broadly as years of continuous Protection. Even 
 in this comparison it should be borne in mind that 
 much of the development of the great interior, 
 much of the railway building, that placed the 
 agricultural lands, the forests and the mines of 
 the great Mississippi valley and the Lake region 
 in touch with the world's markets, and the building 
 of practically the entire system of railroads stretch- 
 ing from the Mississippi river to the Pacific ocean 
 took place since 1861. Yet protectionists maintain 
 that this very development was the result of the 
 stimulus given to manufactures by the protective 
 system. It is true that railroad building had been 
 extensively carried on before 1861 ; it is true that 
 the great agricultural region between the Rocky 
 Mountains and the Mississippi had been developed; 
 it is true that the South with its slave labour had 
 brought to a high state of perfection its cotton, 
 sugar, and tobacco, and thus the relative prosperity 
 in the years of almost continuous low tariff anterior 
 to that date may be measured against conditions 
 of a later period. 
 
WHAT THE TARIFF COSTS. 135 
 
 It may not be improper then, in an attempt to 
 judge relative prosperity after a long term of 
 almost continuous low tariff with that of a long 
 term of almost continuous protective tariff, to 
 compare a few great factors of national well-being, 
 whether as affecting the Government or the 
 individual, and this would mean a comparison, 
 where practicable, of conditions in 1860, the year 
 preceding the adoption of the protective tariff, with 
 those of 1903, or the last year for which data are 
 available. In so doing two great facts must be 
 kept in mind ; first, that the area of the United 
 States in 1860 was precisely the same as that of 
 to-day, omitting Alaska and the recently acquired 
 foreign possessions ; and that the population of 
 to-day is practically two and one-half times greater 
 than that of 1860. 
 
 The decennial census of the United States has 
 since 1850 stated the aggregate and the per capita 
 wealth of the country. In 1860, the wealth was 
 returned at 3,200,000,000 and the per capita 
 wealth at 102 i6s. ; the report for 1900 has not 
 yet been officially published, but semi-official 
 estimates put it at 18, 800,000,000 or an average 
 of 247 is. per capita. Thus, the wealth in 1900 
 is about six times as great as in 1860 and the/^r 
 capita wealth at the end of forty-three years of 
 Protection is about two and one-half times as great 
 as in 1860 at the end of the low tariff era. In 1860 
 the money in circulation in the United States was 
 estimated at 87,000,000, or 2 15^. jd. per capita ; 
 
136 PROTECTION IN THE UNITED STATES. 
 
 in 1903, it was officially stated to be 474,000,000, 
 or 6 per capita. 
 
 This catalogue may be prolonged indefinitely. 
 The protectionist can show, for example, that pig- 
 iron, prior to 1860, had never reached a production 
 of 1,000,000 tons and in 1903 exceeded 18,000,000 
 tons ; that copper production advanced from 7,200 
 tons in 1860 to 294,000 tons in 1902 ; in 1860 the 
 production of wool was 60,000,000 pounds and in 
 1902 316,000,000 pounds; cotton manufactures 
 from being valued at 23,000,000 in 1860 had an 
 estimated value of 67,800,000 according to the 
 census of 1900, and so on with every other item 
 of manufacture. Convinced that under Protection 
 the United States has advanced by giant strides, 
 that the nation in the aggregate is richer than it 
 ever was before, and that the individual has 
 obtained his fair share of the national wealth, the 
 protectionist asserts that not only has Protection 
 not imposed any burden of cost on the individual, 
 but, on the contrary, it has lightened his burden 
 and made it easier for him to contest for industrial 
 supremacy. 
 
 The free trader does not controvert the statistics 
 of the protectionist or attempt to dispute the 
 financial or commercial importance of the United 
 States in the roll of nations, but he insists that the 
 tariff is based upon privileges, and that it taxes 
 the many for the benefit of the few. Mr. W. H. 
 Lamb, president of the New England Free Trade 
 League, gives it as his opinion that much of the 
 
WHAT THE TARIFF COSTS. 137 
 
 discontent in America is the result of the feeling 
 of injustice caused by the knowledge that the 
 tariff is in the interest of a class. Mr. Holt, 
 secretary of the tariff reform committee of the 
 Reform Club of New York, holds that the United 
 States would have made greater progress and been 
 more at peace with the world if it had not adopted 
 a protective tariff. " It is because we are such a 
 great nation within ourselves," he says, " that we 
 have been able to stand the burden of high tariff 
 duties." Mr. Edward Atkinson, one of the most 
 vigorous of American free traders, says the pro- 
 tective tariff system " has been productive of the 
 greatest bankruptcy," and "the protective tariff 
 system has retarded the manufacturing progress of 
 the country." 
 
 It would be possible to cite numerous other 
 statements if such citations were necessary to show 
 that free traders believe that Protection has been 
 an obstacle to the full industrial development of 
 the United States. They can, however, no more 
 prove their belief than the protectionist can demon- 
 strate the scientific truth of his theory ; but the 
 protectionist has the advantage of position ; he is 
 able to oppose the negative remedy offered by the 
 free trader with the positive condition the result 
 of Protection, as he claims. 
 
 Perhaps the difference in point of view of pro- 
 tectionist and free trader is no more sharply 
 emphasised than in the opinions they hold on the 
 subject of immigration. The labourer complained 
 
138 PROTECTION IN THE UNITED STATES. 
 
 that everything was protected except labour, and 
 that while the manufacturer was safeguarded from 
 the competition of European underpaid labour, the 
 American workman found that labour being 
 brought to America and used by the manufacturer 
 to force down wages. Consistency and the fear 
 of political consequences compelled the Repub- 
 licans to pass laws prohibiting the entry of labour 
 brought to America under contract, and from that 
 time on the admission of aliens has been made 
 more difficult and greater restrictions have been 
 imposed. 
 
 The Democrats, among whom are found the great 
 majority of the free traders the Republican free 
 trader is an anomaly partly because of their 
 economic creed, partly because the Democratic 
 party is so largely recruited from the former 
 subjects of certain European countries, has been 
 less anxious to check immigration, although it has 
 been forced to recognise the danger of antagonising 
 labour by openly defying it. The Democrats, like 
 the Republicans, are anxious to prohibit the landing 
 of the defective, criminal or insane, but, unlike the 
 Republicans, they oppose an educational test, 
 which, if rigidly enforced, would prevent perhaps 
 at least half of the now arriving aliens from entering 
 the country. 
 
 Curiously enough, although at the present time it 
 is the protectionist who would place greater restric- 
 tions on the immigrant and the free trader who 
 would remove those restrictions, American labour, 
 
WHAT THE TARIFF COSTS. 139 
 
 the protectionist maintains, has less to fear from 
 immigration than has the labour of any other 
 country, because the evils of immigration more 
 readily correct themselves in a country where the 
 scale of living is high than where it is low. 
 
 "The Italian who lives largely on vegetables in 
 Italy," the Industrial Commission reported, " cannot 
 do the work of American labourers unless he has meat 
 and bread. It is everywhere found in all American 
 occupations that the immigrant cannot keep pace 
 with the American mechanics and labourers. For the 
 first year or more the pattern of speed set for him 
 exhausts his strength. It is not merely that he is 
 ignorant of American methods and devices ; he is 
 also unequal to the American intensity of exertion. . . . 
 
 " This hot exertion of American mechanics and 
 labourers is directly traceable to the mobility of the 
 American labour, including under that term immi- 
 gration. Men who have left their homes and gone 
 among strangers, are thrown upon their industrial 
 merits, and are spurred to activity greater than they 
 ever felt before. Their traditions and habits of life 
 are broken. They leave the customary track 
 and break across into new paths." (Vol. XV., 
 pp. 310-311.) 
 
 If " this hot exertion " did not exist in America, 
 if the American labourer lived on bread and vege- 
 tables as the Italian does in Italy, protectionists say 
 the immigrant would be from the outset fitted to 
 compete with the American, and the influx of aliens 
 would result in dragging down wages, and with a 
 reduction would follow a lowering of social condi- 
 tions, which is the effect of immigration in the East 
 End of London. But in America the accession of 
 immigration is to the ranks of labour what a draft 
 
149 PROTECTION IN THE UNITED STATES. 
 
 of recruits is to a well-disciplined regiment. The 
 recruits do not destroy the discipline or efficiency 
 of the regiment ; they are not soldiers, even although 
 they wear the uniform, until they have been man- 
 handled into fighting material. Until the vitality 
 of the immigrant has been improved by better food, 
 until the effect of this better food shows itself in an 
 increase of energy, which means an increase of 
 productive power and a capacity for more sustained 
 labour, he is unable to compete on even terms with 
 the " American " labourer who is often an alien 
 brought up to the higher standard and therefore 
 he does not drag the great body of labour down to 
 his own level. The more marked the comparison 
 between domestic labour and foreign, the less 
 domestic has to fear from immigration, is the theory 
 of the protectionist. 
 
THE TARIFF AS A WEAPON. 141 
 
 CHAPTER XL 
 THE TARIFF AS A WEAPON. 
 
 THE controlling motives of the early advocates of 
 the protective tariff were solely economic. Protec- 
 tion was deemed an economic necessity; it was 
 regarded as essential to enable a young and unde- 
 veloped country to develop its resources and become 
 independent of foreign countries. It was purely a 
 domestic policy. The first protectionists, splendid 
 as was their vision, could not anticipate that day 
 when the United States should be one of the 
 great competitors for international trade, although 
 they were men of vivid imagination, with superb 
 confidence in their country's destiny. Of more 
 recent years, since American exports of manufac- 
 tured goods have occupied such a prominent place 
 in the national balance sheet, it has been seen that 
 the tariff may serve a dual purpose ; it may have a 
 political as well as an economic end ; it may be 
 used as a weapon of offence as well as a weapon of 
 defence. 
 
 The opponents of Protection have asserted with 
 much ingenuity of argument that trade is always 
 bilateral, and that the protectionists, in an attempt 
 to destroy a well-established economic law, would 
 make it unilateral, which must have disastrous 
 
142 PROTECTION IN THE UNITED STATES. 
 
 effects. A nation, they say, cannot hope always 
 to be a seller and never a purchaser ; nor is that 
 desirable. The interests of nations are best served 
 when there is a free exchange of commodities ; when 
 they buy from and sell to each other, exchanging 
 wares rather than money, so that Nature's vacuum 
 in the one is filled by Nature's plenum in the other. 
 
 It has been urged that when a country syste- 
 matically and persistently places a high duty upon 
 the products of other countries with the avowed 
 purpose of excluding them from its markets, or of 
 embarrassing them for the benefit of its own indus- 
 tries, those countries will retaliate by excluding its 
 products, and its export trade will be hampered or 
 destroyed. The experience of the United States 
 in the period of almost continuous Protection, from 
 1860 to the present time, has not justified this 
 assertion ; on the contrary, it is in this period of 
 the highest Protection the world has ever known 
 that the exports of the United States have grown 
 most rapidly. 
 
 In 1860 the exports from the United States were 
 66,600,000, and this was the highest figure prior 
 to that time. During the decade which followed, 
 the decade of civil war and slow recovery there- 
 from, there was a marked increase, the total for 
 1 870 having reached 78,400,000; by 1880 it had 
 grown to 107,000,000; in 1890 it was 17 1,400,000; 
 in 1900, 278,800,000 ; and in 1903, 284,000,000. 
 Thus in the years in which the United States was 
 developing and increasing its protective tendencies, 
 
THE TARIFF AS A WEAPON. 143 
 
 the world quadrupled its purchases of American 
 products. The answer to this might be that the 
 world increased its purchases of American products 
 simply because it was compelled to have American 
 bread stuffs and meats for food, and raw cotton 
 for manufacturing purposes, but Protectionists 
 point out that the increase in exports of manufac- 
 tures has been equally rapid and striking, and that 
 the growth of exports of manufactures has been 
 most marked during the years of highest Protec- 
 tion. In 1860, after the low tariff era, the total 
 exports of manufactures amounted to 8,000,000, 
 which exceeded the total of any preceding year. 
 Every decade since the increase has been progres- 
 sive, and in 1900 the exports of manufactures were 
 valued at 86,600,000, or nearly eleven times as 
 much as in 1860, and it may be added that the 
 greatest growth has been coincident with the 
 highest Protection, and during the existence of a 
 tariff against which greater dissatisfaction was 
 manifested by foreign countries than ever before. 
 In 1897, pending the consideration by Congress 
 of the Dingley Tariff Act, which was the most 
 extreme measure of Protection adopted by the 
 United States, thirteen countries protested against 
 certain features of that Act ; but to these protests 
 Congress paid no attention, the Bill was enacted 
 into law, and in every single instance the protesting 
 countries have increased their imports from the 
 United States. 
 
 Equally interesting is it to note that the United 
 
i 4 4 PROTECTION IN THE UNITED STATES. 
 
 States continues to increase its consumption of 
 foreign wares. The Daily Consular report of the 
 Department of Commerce and Labour (No. 1886, 
 February 26th, 1904) shows that in 1870 imports, 
 exclusive of money, were valued at 87,191,681 
 and in 1902 at 180,644,189. The increase of 
 imports in thirty years from six of the principal 
 European countries was : 
 
 Per cent. 
 
 France 94 
 
 Germany 277-6 
 
 Belgium 4 2 5'6 
 
 Italy 360-1 
 
 Spain 127-3 
 
 Great Britain 9*1 
 
 " Naturally Great Britain," the report adds, " fur- 
 nished formerly more manufactured wares to the 
 United States than did any other country, but statistics 
 show that imports from Great Britain during the last 
 thirty years increased only 9 per cent., while those 
 from Germany, France, and other European countries 
 show a large increase. In 1902, Great Britain fur- 
 nished $165,746,560 of the $475,161,944 of the 
 European manufactured products imported into the 
 United States ; most of the remainder came from the 
 European Continent. Imports from Germany and 
 France combined exceeded those of Great Britain by 
 $19,000,000." 
 
 In recent years American statesmen have recog- 
 nised the use to which the tariff could be put as a 
 weapon, both commercially and politically. The 
 American people have made their tariffs in con- 
 sonance with their economic ideas, and without 
 regard to the injury that might be caused other 
 
THE TARIFF AS A WEAPON. 145 
 
 nations. When they deemed it for the national 
 
 welfare to build up the tin plate industry so as to 
 
 manufacture tin plate at home instead of buying it 
 
 abroad, they made the duty high enough to 
 
 encourage American capital to embark in the 
 
 business, uninfluenced by the fact that it carried 
 
 great injury to the tin plate mills of Wales, and 
 
 without being inspired by any feelings of hostility. 
 
 When thirteen European countries protested against 
 
 certain features of the Dingley Bill, those protests 
 
 were respectfully but ineffectually received. The 
 
 very fact that Europe protested carried conviction 
 
 that wares formerly purchased from the protesting 
 
 countries would thereafter be manufactured in the 
 
 United States, to the advantage of American 
 
 labour and American capital. The United States 
 
 was not making industrial war on Europe, but it 
 
 was protecting itself. 
 
 The tariff can be used as an economic regulator, 
 and especially in those cases where Governments 
 pay bounties to encourage the domestic producer 
 to seek a foreign market. The Dingley Act, to 
 prevent an unfair competition, gives to the Secretary 
 of the Treasury power to impose a " countervail- 
 ing " duty equal to the export bounties paid upon 
 sugar, so that the exporter of bounty-fed sugar 
 cannot come into the American market and break 
 the price. This provision of the law was enforced 
 by the United States against Russia ; it naturally 
 caused some friction in Russia, and led to a threat 
 on the part of Russia to cease to take American 
 
 P.U.S. L 
 
146 PROTECTION IN THE UNITED STATES. 
 
 imports. Yet American exports to Russia have 
 increased in value since the enforcement of the 
 " countervailing " duty. 
 
 Frequently the tariff has assisted the work of 
 diplomacy. The tariff gives diplomacy something 
 with which to "trade" ; it is an important make- 
 weight to be thrown into the scale when concessions 
 have to be made or are to be demanded. It can 
 be, and has been, used as a means to prevent other 
 countries from imposing tariffs that might be inju- 
 rious to great American industries. In late years, 
 in framing an American Tariff Act, members of 
 Congress have been influenced in a measure by 
 the tariffs of other countries ; "never hesitating to 
 impose a high duty when that seemed necessary, 
 but willing to make a slight reduction if that 
 seemed advisable as a whole. But in dealing with 
 a free trade country, whether in commercial or 
 political negotiations, the fear of that country 
 imposing restrictive duties has not to be taken 
 into consideration. In a word, one side is armed 
 with an effective weapon, and the other side is 
 weaponless. 
 
 The geographical position of the United States 
 and Canada has made their respective tariffs of 
 peculiar interest the one to the other. The accident 
 of politics makes one tariff end and another begin 
 at an imaginary line, often to the annoyance and 
 loss of people on both sides of the line. Canada, 
 small in population and wealth compared with 
 her more powerful Southern neighbour, with her 
 
THE TARIFF AS A WEAPON. 147 
 
 resources only partially developed, has naturally 
 been desirous to obtain access to the American 
 market. During the last few years Canada, under 
 the fostering care of a protective tariff, has become 
 so prosperous and is advancing so rapidly in wealth 
 and consuming capacity, that her market is of 
 sufficient importance to invite American invasion. 
 
 When the Dingley Bill was under consideration, 
 Canada proposed to the United States mutual 
 tariff concessions, on the assumption that they 
 would be for the benefit of both countries. The 
 United States declined to entertain the offer, 
 believing that it was required to give more than 
 it would receive, and duties on certain articles 
 that Canada would be able to sell in the United 
 States were made so high as to be practically 
 prohibitive. In retaliation, Canada announced her 
 purpose to grant to England, and any British colony 
 or possession making similar concessions, a reduc- 
 tion of I2j per cent, of the duties paid by other 
 nations. In the following year this preferential 
 rate was increased to 25 per cent., and in 1900 it 
 was still futher increased to 33 J per cent. British 
 importations into Canada, therefore, pay one-third 
 less duty than those from the United States. 
 
 It would be foreign to the purpose in view to 
 discuss the wisdom or folly of the statesmanship 
 that makes two adjoining countries, whose people 
 speak a common language and whose methods are 
 similar, unable to reach a mutually satisfactory 
 agreement, but it is of interest to point out how 
 
 L 2 
 
148 PROTECTION IN THE UNITED STATES. 
 
 little the United States is influenced by the actions 
 of other nations. Mr. Dingley and his associates 
 knew in 1897 that Canada would grant Great 
 Britain a preferential rate if the United States 
 refused to make concessions. Having, as a 
 matter of business, decided that the price asked 
 for Canadian favours was higher than the United 
 States could afford to pay, measures were taken 
 to nullify the injurious effects of the Canadian 
 policy, and the future was faced with a sense of 
 security. Despite the reduction given to British 
 imports, American imports have shown a greater 
 increase than British, both in percentage and 
 volume. English imports from 1896 to 1903 
 increased 80 per cent., or, in value, from 6,595,948 
 to 11,779,380, while the imports from the United 
 States increased 135 per cent., or from 11,714,805 
 to 27,521,039. This growth in the commerce of 
 the United States with Canada is, of course, due 
 chiefly to the proximity of the two countries and 
 the convenience with which the Canadian merchants 
 can transact their business with the American manu- 
 facturer, and the difference in time between sending 
 an order to England and any of the large manu- 
 facturing centres in the United States. Those are 
 advantages that the United States will always 
 possess in competing for the trade of Canada, 
 although one would question whether they are 
 great enough to overcome the handicap of the 
 difference of duties in England's favour. Appa- 
 rently they are, as the statistics indicate ; but 
 
THE TARIFF AS A WEAPON. 149 
 
 perhaps it may not be improper to assume 
 that the United States is able to compete with 
 England, despite the preferential rate, because the 
 United States can manufacture at a lower cost 
 than England. 
 
 The experience with Canada is of interest to 
 protectionists as destroying another free trade 
 theory. Free traders have always maintained 
 that Protection was dangerous and likely to lead 
 to friction between nations ; that any increase in 
 duties by the United States would at once be met 
 by a corresponding increase by the nation affected ; 
 that it would possibly result in concessions being 
 made to other countries to the exclusion of the 
 United States, with the inevitable result of dis- 
 location of business and loss of trade, and perhaps 
 even a more serious state of affairs. The theoretical 
 condition so often presented by free traders became 
 an actuality the moment Canada enacted a pre- 
 ferential tariff in favour of England and directed 
 against the United States. But the predictions 
 have not been verified. Instead of Canada refusing 
 to buy from the United States, she has, as we have 
 seen, more than doubled her purchases in the 
 last seven years. Instead of Canada's preference 
 for England leading to friction between Canada 
 and the United States, or the United States and 
 England, the relations between the three countries 
 are more cordial and intimate than they have ever 
 been. 
 
 Canada serves also to confirm another theory of 
 
150 PROTECTION IN THE UNITED STATES. 
 
 the protectionists that convinces them of the advan- 
 tages of Protection. Canada, they say, would like 
 an easier access to the American market. She 
 can have it whenever she admits certain articles 
 of American manufacture free, and in return con- 
 cessions will be made to her. If the United 
 States had no tariff there would be nothing to 
 offer Canada as an inducement ; and if Canada 
 had no tariff she could give nothing in return. 
 Each has something that the other wants, but 
 both are good traders, and are naturally trying 
 to drive the best bargain. Up to the present 
 time they have been unable to reach an agree- 
 ment, because, if the truth must be told, both 
 have been so well satisfied with existing conditions 
 that they have been content to let well enough 
 alone, and not give up a certainty for an un- 
 certainty. 
 
 When the Dingley Bill was enacted it gave the 
 President power to conclude reciprocal arrange- 
 ments with foreign countries, by which duties on 
 certain articles were to be reduced in return for 
 reductions made on certain other articles by foreign 
 countries. It has frequently been said that Mr. 
 Dingley made many of the duties excessively high 
 so as to force reciprocal arrangements, but if that 
 was his intention it has not been successful, because 
 the United States has invariably demanded too 
 much, and in the few cases where it was possible 
 to conclude reciprocity treaties the Senate has 
 refused to ratify them. The scheme of reciprocity 
 
THE TARIFF AS A WEAPON. 151 
 
 still further penalises a free trade country. 
 England, who admits all American products free 
 of duty, has no concessions to offer in the way of 
 abating certain duties, and, therefore, can receive 
 nothing in return ; France, who taxes all American 
 products, has only to reduce certain duties to obtain 
 free access to the American market ; an injustice 
 so palpable that some members of Congress have 
 refused to advocate reciprocity because it would 
 discriminate against England, the one country of 
 all others, they say, to whom the greatest favours 
 ought to be extended in view of her market being 
 open to America. Nor is England able to lift a 
 finger to help her struggling colonies. Jamaica 
 and Newfoundland have concluded reciprocal con- 
 ventions with the United States, which the Senate 
 has refused to ratify. If Jamaica could send her 
 fruit and Newfoundland the yield of her fisheries 
 to the United States, both colonies would be much 
 more prosperous, but they are denied this boon, 
 and England can do nothing, because there is no 
 tariff to be applied on American goods, there is 
 no way to bring the United States to terms ; the 
 tariff as a weapon cannot be used by England. 
 
152 PROTECTION IN THE UNITED STATES. 
 
 CHAPTER XII. 
 GENERAL CONCLUSIONS. 
 
 FROM whatever standpoint one discusses the 
 question of national prosperity and individual wel- 
 fare, whether one approaches the consideration of 
 the subject as a protectionist or a free trader, no 
 matter what his opinion may be on economics, it 
 cannot be controverted that the truth is found in the 
 following propositions : 
 
 That the greater the capacity of the labourer to 
 earn money the greater will be his purchasing 
 capacity ; 
 
 That the greater his purchasing capacity the 
 greater his consuming power. 
 
 Or, put in another form : 
 
 The more money the labourer earns, the more he 
 will spend ; and the corollary of these 
 premises is : 
 
 With the increase of the productive power of a 
 people follows greater and more diffused pros- 
 perity ; greater productivity means a low 
 labour cost of production, and the rate of 
 wages bears an inverse ratio to the cost of 
 production ; the cost of production being 
 
GENERAL CONCLUSIONS. 153 
 
 highest where wages are lowest, and, con- 
 versely, wages being highest where the cost of 
 production is lowest. 
 
 These seeming paradoxes become susceptible of 
 rational explanation if one examines into the 
 economy of production and is not biassed by 
 preconceived prejudices. My first proposition 
 demands no detailed consideration. It is self- 
 evident that the more money a labourer is able 
 to earn the more money he will have to spend ; 
 and in the use of the latter word I include not only 
 the money disbursed for necessities or luxuries, 
 but also such sums as the labourer may save or 
 as constitute an investment. 
 
 Nor is it necessary, I think, to enter into any 
 elaborate discussion to prove what is equally self- 
 evident, that the greater a man's purchasing 
 capacity the greater his consuming power ; or, put 
 in other words, the better able a man is to satisfy 
 his wants the more highly developed those wants 
 will become, and the more they will need before 
 they are satisfied. The desire for decent sur- 
 roundings leads to a desire for decent clothes, for 
 better food, for greater comforts generally, for 
 luxuries for mind and body, all of which tend to 
 advancement and progress. The limit to this desire 
 is simply the limit of intelligence. 
 
 We have the authority of all competent observers 
 in America that one of the reasons to explain the 
 secret of American prosperity is the great produc- 
 tive power of the American workman, his output 
 
154 PROTECTION IN THE UNITED STATES. 
 
 being so much larger than those of his foreign com- 
 petitors that the cost of the American product is less 
 than that of any other workman ; and it has also 
 been demonstrated that wages and labour cost bear 
 not the relation that is ordinarily supposed ; that is, 
 it is not true that low wages are an indication of low 
 labour cost, but rather the reverse ; the low-priced 
 workman being usually an unintelligent and un- 
 skilled worker and unable to compete with the high- 
 priced worker of greater intelligence and skill. 
 
 The unrelation of labour cost and wages was 
 graphically explained by Edward Atkinson in his 
 testimony before the Industrial Commission, and 
 although Mr. Atkinson is one of the most advanced 
 of American free traders, he could not bind himself 
 to certain irrefutable economic facts. Mr. Atkinson 
 told the Commission that a few years ago gunny 
 bags and gunny cloth were imported in large quan- 
 tities, but now jute butts are imported, from which 
 the bags are made. One of Mr. Atkinson's friends 
 in Calcutta came to America to find out the reason 
 for the change. 
 
 " He went to a great factory in Brooklyn," as Mr. 
 Atkinson testified, "of which the late Mr. Marshall 
 was the treasurer and manager (a very stout free 
 trader), and went over his mill. He saw these great 
 looms working with one man to the loom on gunny 
 cloth. Said he : ' How much does that man earn ? ' 
 Mr. Marshall replied, '$1.50 a day.' ' Why, the 
 weavers in Calcutta only earn 12^ cents a day. I do 
 not understand it. How do you explain it, Mr. 
 Marshall ? ' Mr. Marshall replied, ' What is the cost 
 of weaving in Calcutta a yard of gunny cloth at 
 
GENERAL CONCLUSIONS. 155 
 
 12^ cents a day? ' He said '2% cents a yard.' Said 
 Mr. Marshall, ' The cost of weaving on that loom is 
 one-half cent a yard.' ' Well/ said my friend, 
 suddenly enlightened, * I have come half way around 
 the world to find out what a d d fool I have 
 been.' " 
 
 Mr. Atkinson's Calcutta friend, after travelling 
 half way around the world only needed to have his 
 object lesson so strikingly placed before him for his 
 mind to be illuminated and for him to grasp the fact 
 that wages and labour cost are not related ; but it is 
 a fact as yet only partially understood. If we take 
 these two typical examples the Calcutta weaver 
 at 12 J cents, or 6d. a day, and the Brooklyn 
 weaver at $1.50, or 6s., we instantly perceive 
 the effect on general prosperity when the pur- 
 chasing capacity of the workman is high, and that 
 low labour cost and high wages are synonymous 
 economic terms. Theoretically the manufacturer of 
 gunny cloth in Calcutta ought to be able to under- 
 sell his American competitor, because he pays only 
 one-twelfth the wages paid in Brooklyn, but as a 
 matter of fact, yard for yard, the Calcutta weaving 
 costs five times as much as the American. But 
 that is the most insignificant item in the cost. 
 The weaver in Calcutta earning >d. a day, and 
 the cost of weaving being 2j cents, or approxi- 
 mately \\d., a yard, his day's output is only five 
 yards. The American weaver, on the other hand, 
 earning 6s. a day and his labour cost being \d. a 
 yard, his daily output is 300 yards. Eliminating for 
 the moment, for the sake of convenience, the cost 
 
156 PROTECTION IN THE UNITED STATES. 
 
 of raw materials, management, profits and other 
 charges necessary to the conduct of the business, 
 we have established an irreducible minimum 
 below which the product cannot be sold, that 
 minimum being the labour cost. In Calcutta it is 
 i^d. a yard, in the United States it is \d. It must 
 be further obvious that the manufacturer who can 
 make 300 yards a day can do business at a smaller 
 margin of profit than the manufacturer whose daily 
 output is only five yards. Every yard of goods sold 
 must bear its proper proportion of the general 
 expenses. If in the one case the total sales are 
 300 yards and in the other five, in the former the 
 cost per yard for general expense is only a minute 
 fraction of what it is in the latter. Could there be 
 a more telling presentation of the effect of produc- 
 tivity in reducing cost, and the economy of high 
 wages in the cost of production ? 
 
 I now use the same illustration to show the effect 
 on the individual and the community resulting 
 from a high purchasing capacity. The Calcutta 
 weaver has 6d. a day and that 6d. must pay for 
 his housing, his food and his clothes. We may say 
 in effect that the Calcutta weaver has no purchasing 
 capacity ; his few pence must be used for the barest 
 necessities of life, and it is only by the greatest 
 frugality that he can support life, and then it is 
 under such adverse conditions that his vitality is 
 kept at the lowest state. The American weaver 
 with his 6s. a day, after he has paid for his 
 lodging and food, which is richer in the elements of 
 
GENERAL CONCLUSIONS. 157 
 
 nutrition than the food of the Calcutta weaver, has 
 a surplus left of not less than 3^. a day 3^. to be 
 spent for clothes, tobacco, books, pictures, beer, the 
 theatre, whatever he will, according to his tastes 
 and his intelligence. Multiply that 3^. a day by one 
 hundred, the number of men, for example, in a small 
 factory; multiply that hundred by another hundred, 
 the number of men in a group of factories ; and 
 multiply the sum once more by a thousand, which 
 is below the total of the working-men in the United 
 States earning 6s. a day, and you have a daily 
 purchasing capacity of 1,500,000, which goes into 
 the purchase of articles of daily use of boots and 
 hats and clothes, of furniture and what one will, 
 articles that, so soon as they are withdrawn from 
 the market by purchase or consumption, must be 
 replaced by others, so that the working-man con- 
 tinually makes a market for products, he keeps a 
 large volume of money in circulation, and furnishes 
 work for himself as well as his fellows. The 
 Calcutta weaver creates no market, or at best a 
 market so small that it is infinitesimal ; the 
 American weaver creates a market greater than that 
 to be found anywhere else in the world. 
 
 It may seem to the reader that I have unduly 
 dwelt upon the importance to be attached to high 
 wages, but that is the very keystone of the arch 
 of Protection, and unless Protection produced high 
 wages it would cease to have an economic justifi- 
 cation. High wages, great productive power, and 
 great purchasing capacity are the coefficients of 
 
158 PROTECTION IN THE UNITED STATES. 
 
 Protection, and unless the importance of those 
 three factors is properly emphasised the philosophy 
 of Protection would not be intelligible. The high 
 wages of America, protectionists assert, are the 
 cause and not the effect of national prosperity. 
 The free trader does not share this opinion ; he 
 more often agrees with the European economist 
 that wages are unduly high in America. This is 
 one of the irreconcilable differences between free 
 traders and protectionists. It is the conflict of 
 cardinal beliefs. To the free trader cheapness is 
 the economic Ultima Thule, to the protectionist a 
 proper reward, whether for labour or the product 
 of labour, is the finality for which he strives. 
 " Happy as the augury is for the working class," 
 says a writer, " the employer of labour is not only 
 not injured, but fully as much benefited by the 
 inevitable results of a high rate of wages." And 
 the same writer adds this significant testimony to 
 the economy of high wages and its inevitable 
 corollary of low labour cost : 
 
 " The wages paid in the [ship] yards of Scotland 
 and England are the highest paid in any calling. At 
 times of activity the earnings in the trades connected 
 with the building rise to \ and $ a week, two and 
 three times the rates paid in outside occupations. 
 Still, England is the iron boat-builder of the world, 
 and is only equalled by America in regard to the 
 high wages paid to the worker and low cost of 
 construction by the ton." 
 
 In this one industry in the building of ships 
 Great Britain holds the primacy and is able to 
 
GENERAL CONCLUSIONS. 159 
 
 compete with all the world ; to undersell all her 
 rivals ; to build better and cheaper ships in less 
 time than any other nation. One is naturally 
 impelled to ask whether England's acknowledged 
 supremacy in ship-building is the result of accident 
 or the effect of more subtle causes ; whether high 
 wages are not able to command artisans of the 
 highest intelligence and superior physical strength, 
 those two elements comprising the sum of the low 
 cost of production. 
 
 The charge that the protectionist most frequently 
 has to meet is that he seeks to discourage inter- 
 national trade. " Tariff is often represented as a 
 Chinese wall, which shuts out each nation from 
 any trade with its neighbours," says one of the 
 defenders of Protection. He points out that pro- 
 tectionists are pictured as wishing for a tariff that 
 would cut off each nation from the benefits of 
 commerce. This position, the protectionists assert, 
 does them an injustice. They do not wish, any 
 more than free traders, to destroy foreign trade 
 or curtail it. They are fully as eager as their 
 opponents to develop foreign trade, but with this 
 difference : the protectionist does not believe it 
 to be profitable to encourage foreign trade at the 
 expense of domestic manufactures or domestic 
 labour ; he does not believe it to be true economy 
 to effect a small saving by buying abroad the 
 same articles that can be made at home, when by 
 buying abroad he supports foreign labour and 
 deprives home labour of employment. 
 
i6p PROTECTION IN THE UNITED STATES. 
 
 There is also a marked difference between the 
 free trader and the protectionist in the relative 
 importance to be attached to foreign trade. The 
 free trader holds that foreign trade is of twofold 
 advantage. First, it enables the American con- 
 sumer to obtain at a lower price those articles 
 which can be produced cheaper abroad than in his 
 own country ; second, the larger the American 
 market for foreign goods the larger the foreign 
 market for American goods, so that there is a 
 double benefit conveyed. The protectionist, how- 
 ever, attacks both propositions. He relies on 
 experience to sustain his position that a reduction 
 of cost has not been brought about by the com- 
 petition of foreign manufacturers, but by the 
 stimulus given to American inventive skill and 
 enterprise, and but for the inducements offered to 
 American capital and intelligence to compete for 
 the possession of the home market, the great 
 reduction in the price of all articles of use and 
 necessity, which has been one of the most striking 
 phenomena in the industrial development of the 
 United States, would have been impossible ; and 
 it is the competition of Americans first with the 
 foreign manufacturer and later with themselves 
 that has cheapened all manufacturing processes. 
 
 In meeting the contention of the free trader 
 that an American market for foreign goods leads 
 reciprocally to a correspondingly favourable foreign 
 market for American goods, the protectionist says 
 that assumption is based on a false theory. It is a 
 
GENERAL CONCLUSIONS. 161 
 
 theory predicated on the infantile belief that the 
 commerce of nations is governed by the same 
 considerations that lead children to share their 
 playthings ; that sentiment and self-interest are the 
 mainspring of business. Business, the protectionist 
 is fond of saying, is an entity that is animated 
 neither by affection nor patriotism ; that is con- 
 trolled neither by love nor fear ; that knows no 
 flag, no language, no coinage ; which follows the 
 line of least resistance, that follows any flag, to 
 which the dollar, the sovereign, the franc, or the 
 mark is one and the same, so long as it is of 
 proper weight and fineness and bears the mint 
 stamp of authority. No nation buys from another 
 because it is controlled by feelings of good-will. 
 It buys because it is a necessity, or because it can 
 buy cheaper in that market than elsewhere. In 
 support of his position the protectionist cites the 
 increase of the export trade of the United States 
 during the period of high Protection and the 
 increase of the import trade. The United States, 
 the protectionist says, has found an increasing 
 market for its products in Europe because America 
 can successfully compete with Europe ; the United 
 States has been able to buy more from Europe 
 because Protection has increased national pros- 
 perity, it has given the American people more 
 money to spend on articles in which Europe 
 peculiarly excels, but it would not be possible 
 for them to make these foreign purchases if it 
 were not for Protection. 
 
 p.u.s. M 
 
1 62 PROTECTION IN THE UNITED STATES. 
 
 And finally, and in conclusion, the protectionist 
 maintains that while the doctrine of Free Trade 
 might have been good in the past for a particular 
 nation, it does not necessarily follow that it must 
 be good for all times or for other nations. Every 
 nation must work out its own industrial salvation, 
 and every progressive nation must adapt itself to 
 its own economic conditions, and the relations 
 which those conditions bear to the problems of 
 economy of all other nations. The fundamental 
 principles laid down by Adam Smith and developed 
 by his disciples, which have been erected into a 
 creed and invested with the odour of sanctity, are 
 not regarded as sacrosanct by the protectionist. 
 The fathers of Free Trade were fallible and not 
 infallible. They were endowed with no divine 
 light. They sought to teach the world the truth 
 as they conceived it, but that gave them no title 
 to inerrancy. The gospel of Adam Smith, as 
 expounded by Ricardo and Mill and the apostles 
 of Free Trade, the American protectionist refuses 
 to receive, because he claims that it has not stood 
 the test of time, it has failed to satisfy the touch- 
 stone of experience. Every theory of the American 
 free trader has been disproved in practice ; every 
 experiment with Free Trade has been injurious to 
 American industry. Every time the United States 
 has departed from its traditional policy of Pro- 
 tection disaster has followed in its train ; every 
 time the United States has abandoned Free 
 Trade and reverted to Protection the forge is 
 
GENERAL CONCLUSIONS. 163 
 
 re-lit, the silent loom pulses with renewed activity, 
 the languid lathe becomes infused with a new life ; 
 the farmer no less than the artisan is prosperous ; 
 work is plentiful and wages are high. These are 
 the substantial reasons to convince the protectionist 
 that Protection is the proper policy for the American 
 people. 
 
INDEX. 
 
 AD VALOREM Duties, 16 
 America, English Dumping 
 
 Ground, g 
 
 American Productivity, 68 
 American Workman, 64, 76; 
 
 higher environment of, 96; 
 
 his independence, 101 
 Austin, O. P., on Growth of 
 
 Prosperity, 57 
 Austrian Labour, 78 
 
 BAYARD on Happiness, 97 
 Benton, Thomas H., denounces 
 
 Act of 1833, 16 
 Blaine, James G., on the Cost 
 
 of the Tariff, 53 
 Buchanan, President, Extract 
 
 from Message on the Tariff, 
 
 25 
 
 CALCUTTA Weavers, Wages 
 of, 154 
 
 Canada, 146 ; Preferential 
 Tariff, 147 
 
 Carey, Henry C. , on the Tariff 
 of 1842, 19 
 
 Cheapness, 70 
 
 Civil War, Effect on the 
 Tariff, 27 
 
 Clay, Henry, ascribes pros- 
 perity to the Tariff, 13 ; on 
 importance of the Home 
 Market, 48 
 
 Cleveland, Grover, first elec- 
 tion of, 31 ; urges Low Tariff 
 on Congress, 32 ; second 
 election of, 34; refuses to 
 
 sign Tariff Act, 35; repeal 
 
 of Silver Coinage, 37 
 Clothing, Cost of, 86 
 Commodities, Cost of, 85 
 Competition, 72, 91 
 Cost, 61, 71 
 Congress, Power of, over 
 
 Tariffs, 6 
 Constitution of the United 
 
 States : clause relating to 
 
 Tariffs, 6 
 
 Consuming power, 152 
 Crime, 107 
 
 DEMOCRATIC Party and low 
 
 Tariff, 34 
 
 Dingley Bill, 38, 55 
 Duties, must be uniform 
 
 throughout the United 
 
 States, 6 
 
 ECONOMY of High Wages, 156 
 
 Efficiency, Secret of American, 
 76 
 
 Energy, Superiority of Ame- 
 rican, 99 
 
 England floods the American 
 Market, 9 
 
 Embargo Act, 7 
 
 FOOD, its bearing on American 
 energy, 99 
 
 Foreign Labour, 97 
 
 Foreign Trade, 160 
 
 Free Trade, the first experi- 
 ment with, 5 ; Act of 1846, 
 20; Democratic Party,34, 109 
 
i66 
 
 INDEX. 
 
 GERMAN Labour, 78 
 
 Germany, nutrition of work- 
 men, 99 
 
 Gold, discovery of, in Cali- 
 fornia, 21 
 
 Government, Duty of, 101 
 
 Greeley, Horace, on Protec- 
 tion, 52 
 
 HAMILTON, Alexander, "The 
 Father of Protection," 42; 
 his report on manufactures, 
 
 High Wages, Economy of, 156 
 Home Market, retention of, 
 
 3 ; Henry Clay on, 48 ; 
 
 compared with the Foreign 
 
 Market, 50 
 
 IMMIGRANT, The, and Wages, 
 
 97, loo, 138 
 India, Labour in, 69 
 " Iron Law " of Wages, 66 
 
 LABOUR, Cheap, 54 ; primarily 
 
 interested in Protection, 55 ; 
 
 cheapest, 65 ; quickest, 66 ; 
 
 productivity of American, 70 ; 
 
 in Germany and Austria, 78 ; 
 
 menace of cheap Foreign, 97 
 Labour, Cost and Wages, 153 
 Living, Cost of, 87, 88, 89 
 Living, Standard of, 61, 64, 94 
 Longevity, 106 
 Luxuries, 87, 153 
 
 McKiNLEY ACT, 32 
 
 McKinley, William, defeated 
 for Congress, 34 ; elected 
 President, 37 ; his views on 
 Protection, 54 ; on Cheap 
 Labour, 54 
 
 Machinery, Use of, in America, 
 68, 71 ; its use improves 
 social conditions, 75 
 
 Man, "Cheap" or "Dear," 
 101 
 
 Morality and Protection, 94, 
 101, 108 
 
 NATIONAL WELFARE, 94 
 
 PATTEN on Protection, 41 
 
 Polk, President, Extract from 
 Message of, 19 
 
 Prices, High, 82 
 
 Production, Cost of, and 
 Wages, 67, 152 
 
 Productivity, American, 68, 75, 
 98 
 
 Protection (see also TARIFF) a 
 Party Issue, 27 ; economic 
 justification of, 157 ; effect 
 of, 59 ; effect on Wages, 59 ; 
 effect on Moral Indepen- 
 dence, 101 ; increases Wealth, 
 59 ; influence on Politics, 
 109 ; morally considered, 94, 
 108 ; Paternalism. 100 ; 
 Philosophy of, 40 ; Political 
 Corruption, 1 16 ; Republican 
 Party, 27 ; what it has Cost, 
 137 
 
 RECIPROCITY, 150 
 Republican Party and Pro- 
 tection, 27 
 Revenue Tariff, 21 
 " Robber Barons," 108 
 Russia, 146 
 
 SILVER COINAGE, 37 
 
 Sin, 107 
 
 Smith, Adam, &c., Theories of, 
 
 Refuted, 65 
 South, The, agitates for Lower 
 
 Tariffs, 15 ; Free Trade, no 
 Specific Duties, 16, 26 
 Standard of Existence, 82 
 Standard of Living, 61, 64, 94 
 Standard of Wages, 74 
 Steel Rail Industry, 28, 31 
 Switzerland, Cost of Living as 
 
 compared with America, 90 
 
 TARIFF (see PROTECTION) ACT, 
 First, i, 6 : an economic 
 regulator, 145 ; it assists 
 
INDEX. 
 
 167 
 
 diplomacy, 146 ; relations 
 with Russia, 145 : with 
 Canada, 146 ; a Weapon, 
 141 ; its effect on Trade, 142 ; 
 prices, 81 ; an Illustration, 
 82 ; Reform, agitation for, 
 32 ; who pays it, 53 
 
 Tin Plate Industry, 145 
 
 Trusts, 119 
 
 UNEMPLOYED demand Relief, 
 36 
 
 WAGES in United States, 59 ; 
 higher in America, 65 ; 
 
 "Iron Law" of, 66; how 
 determined, 67 ; and Cost of 
 Production, 67 ; effect of 
 Protection on, 59, 61 ; de- 
 termined by Cost of Main- 
 tenance, 96 ; of Immigrant, 
 97 ; and labour cost, 153 ; 
 High, Economy of, 156 ; High 
 Standard of, 74 ; tendency to 
 sink, 94 
 
 Walker Tariff, 20 
 
 Wealth Increased by Protec- 
 tion, 59 
 
 Webster, Daniel, 21, 51 
 
 Welfare, National, 94 
 
 THE END. 
 
 BRADBURY, AGNEW, & CO. LD., PRINTERS, LONDON AND TONBRIDGE. 
 
IN THE SAME SBRIBS. 
 
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 "AoTONOMOS," in the Fortnightly Review: "One of the 
 ablest advocates of the Birmingham-Sheffield Policy is Professor 
 Ashley, whose book on the Tariff Problem is perhaps the most 
 effective plea for fiscal revolution which has appeared in the 
 course of the present controversy." 
 
 Manchester Courier: "Whatever other book the student 
 of economics may leave alone in view of the fiscal con- 
 troversy, he cannot afford to neglect Professor Ashley's 
 splendid vindication of the position taken up by the Prime 
 Minister, and to a large extent by Mr. Chamberlain. It 
 contains no padding, is an unanswerable plea for a drastic 
 remodelling of the Free Import system, and in our opinion 
 is far and away the best of the new books for the non-political 
 investigator." 
 
 LONDON : P. S. King & Son, Orchard House Westminster. 
 
Demy 8vo. Cloth, 256 pp. and Index. 35. 6d. net. 
 
 ELEMENTS OF 
 THE FISCAL * 
 PROBLEM ^ - * 
 
 BY 
 
 L. G. CHIOZZA MONEY, 
 
 Fellow of the Royal Statistical Society ; 
 
 Author of "British Trade and the Zollverein Issue," etc. ; 
 
 Statistical Secretary to the Free Trade Union. 
 
 Westminster Gazette : " It is impossible for anyone who reads 
 this book to complain that the Free Trade doctrine is abstract, 
 antiquated, or visionary. Never was a case presented in a more 
 modern, concrete, or practical form." 
 
 Sheffield Independent : " Mr. Money's book must be reckoned 
 as one of the very best practical expositions of our Free Trade 
 policy the controversy has given us." 
 
 Birmingham Express : " Every student of the fiscal question 
 should obtain a copy of Mr. L. G. Chiozza Money's book. ... It 
 is written in a clear and comprehensive style." 
 
 Spectator : " We do not know of any book of the same length 
 which contains such a mass of accurate and relevant information 
 upon the main question at issue, and especially upon the nature 
 of our imports and exports." 
 
 LONDON : 
 P. S. KING & SON, ORCHARD HOUSE, WESTMINSTER. 
 
SECOND EDITION WITH TWO ADDITIONAL SECTIONS. 
 Demy 8vo. Cloth. 436 pp. 1Os. 6dm net. 
 
 THEORIES OF 
 PRODUCTION 
 
 AND 
 
 DISTRIBUTION. 
 
 A HISTORY OF THE THEORIES 
 OF PRODUCTION AND DISTRI- 
 BUTION IN ENGLISH POLITICAL 
 . . ECONOMY FROM 1776-1848. . . 
 
 BY 
 
 EDWIN CANNAN, M.A., LL.D., 
 
 Appointed Teacher of Economic Theory 
 in the University of London. 
 
 CHAP. 
 
 I. THE WEALTH OF A NATION. 
 
 II. THE IDEA OF PRODUCTION. 
 
 III. THE FIRST REQUISITE OF PRODUCTION LABOUR. 
 
 IV. THE SECOND REQUISITE OF PRODUCTION CAPITAL. 
 V. THE THIRD REQUISITE OF PRODUCTION LAND. 
 
 VI. THE IDEA OF DISTRIBUTION. 
 VII. PSEUDO-DISTRIBUTION. 
 VIII. DISTRIBUTION PROPER. 
 
 IX. GENERAL REVIEW: POLITICS AND ECONOMICS. 
 INDEX. 
 
 WESTMINSTER: P. S. KING & SON, ORCHARD HOUSE, 
 
STATISTICAL STUDIES 
 
 RELATING TO 
 
 NATIONAL PROGRESS 
 IN WEALTH AND TRADE 
 
 Since 1882. 
 
 A PLEA FOR FURTHER INQUIRY. 
 By A. L. BOWLEY, M.A., 
 
 Author of "Elements of Statistics," etc. 
 
 Cr. 8vo, 2s. net. 
 
 Daily Chronicle: "This book constitutes far and away the 
 best unofficial analysis of statistics bearing on the fiscal 
 controversy. Mr. Bowley is much the most competent and 
 scientific of our unofficial statisticians, and, unlike the many 
 experts who have been entertaining us in the newspapers, 
 he is not only a trained statistician, but also a well-read econo- 
 mist who knows what is behind the figures he displays. . . . 
 Mr. Bowley holds no brief for either side, and is rightly 
 emphatic on the limits of the data, especially for comparison 
 with foreign countries ; but, as he remarks, so far as they go 
 they show a steady increase of prosperity, and the onus of proof 
 to the contrary lies on the challengers. As a corrective to loose 
 and slipshod argument this book is invaluable." 
 
 LONDON : F. S. KING & SON, 
 
 Orchard House, Westminster. 
 
SECOND EDITION. 344 pp., Demy 8vo, cloth, Numerous 
 Diagrams. Price ics. 6d. net. 
 
 ^ BY 
 
 CLEMENTS . Apthup L Bowleyj 
 
 STATISTICS. 
 
 M.A., F.S.S. 
 
 Appointed Teacher of Statistics 
 in the University of London; 
 Cobden and Adam Smith Prize- 
 man, Cambridge: Author of 
 " Wages in the United Kingdom 
 in the igth Century." 
 
 TTHIS Book is intended to supply a TEXT-BOOK dealing with 
 1 the METHODS and PRINCIPLES of STATISTICS recognised by 
 statistical experts or used by official statisticians. The methods 
 by which accurate statistics can be collected are examined and 
 illustrated, and the TECHNIQUE of statistical representation 
 DISCUSSED. Other subjects, little discussed in any books easily 
 accessible to English students, such as the ACCURACY OF RESULTS 
 and the INTERPOLATION OF MISSING ESTIMATES, are also dealt 
 with in Part I., while in Part II. will be found an ELEMENTARY 
 
 INTRODUCTION TO MODERN MATHEMATICAL STATISTICS, with a 
 
 careful analysis of the GROUNDWORK OF THE THEORY OF ERROR. 
 
 Economic Journal. "The London School of Economics has, since its 
 foundation, had systematic courses of lectures on the elements of statistics, 
 and the School therefore is entitled to share with Mr. Bowley the congratula- 
 tions which are due to him for supplying a long-felt want. Without further 
 ado it may be plainly stated that, whatever its shortcomings, this book is the 
 best on the elements of Statistics written in English, French, German, or 
 Italian." 
 
 University Extension Journal. " This is a work for which in itself we 
 have conceived an almost unqualified admiration. Its absolute merits are 
 great enough to enable it to dispense with such added praise or mitigation of 
 censure as pioneer work may often justly ask. It is really the first connected 
 English treatise which assumes the existence of the newest variety of the 
 human species, the serious and scientific student of statistics. To meet the 
 common superstition that 'anything may be proved by statistics,' there can be 
 no better means than to refer the objector to just such a work as this. But 
 in the present state of statistical knowledge, or rather of statistical ignorance, 
 it would be of little use so to refer him if the work itself were not well and 
 brightly written, as is this, with here and there those quiet gleams of humour 
 that mark the author for the skilled teacher that he is." 
 
 P. S. KING & SON, ORCHARD HOUSE, WESTMINSTER. 
 
2s. 6d. net. 
 
 CDe Ctberal View 
 
 A SERIES OF ARTICLES 
 ON CURRENT POLITICS 
 
 By MEMBERS OF THE 'SO CLUB. 
 
 With a PREFACE by 
 Rt. Hon. EARL SPENCER, K.G., P.C. 
 
 ARTICLES BY 
 
 BELLAIRS, Lt. Carlyon, 
 R.N. 
 
 BENN, J. Williams, L.C.C. 
 BIRRELL, Augustine, K.C. 
 
 BRASSEY, Rt. Hon. Lord, 
 K.C.B. 
 
 BRYCE, Rt. Hon. James, 
 M.P. 
 
 BUXTON, Sydney, M.P. 
 
 COLERIDGE, Rt. Hon. 
 Lord, K.C. 
 
 DILKE,Rt.Hon.SirChas. 
 W., M.P. 
 
 EMMOTT, Alfred, M.P. 
 
 GOOCH, Geo. P. 
 GRANT, Corrie, M.P. 
 GREENWOOD, George. 
 
 HARCOURT, Rt. Hon. Sir 
 William, M.P. 
 
 MACNAMARA, Dr. T. J., 
 M.P. 
 
 MOULTON, J. Fletcher, 
 K.C., M.P. 
 
 PAUL, Herbert W. 
 
 REID, Sir Robert T., 
 G.C.M.G., K.C., M.P. 
 
 SAMUEL, Herbert L, M.P. 
 
 LONDON : 
 
 P. S. KING & SON, ORCHARD HOUSE, WESTMINSTER. 
 
UNIVERSITY OF CALIFORNIA LIBRARY 
 BERKELEY 
 
 Return to desk from which borrowed. 
 This book is DUE on the last date stamped below. 
 
 JAN 26 1948 
 
 
 *LU 
 
 4DEC-59RT 
 
 LD 21-100m-9,'47(A5702sl6)476 
 
 
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 fift 
 
 27' 
 
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IB 65025 
 
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