i ff Js PROTECTION A BENEFIT? Plea for t!)e jflegatfte BY EDWARD TAYLOR Industry makes to Legislation the modest request of Diogenes to Alexander: " Stand out of my sunshine." Bentfitim CHICAGO A. C. McCLURG AND COMPANY COPYRIGHT, BY A. C. MCCLURG AND COMPANY, A.D. 1888. PREFACE. O one who has been observant enough to note the trend of public sentiment in this country can fail to see that the tariff question is coming to the front. For more than twenty years our national politics have looked toward the past, and not toward the future. It would be difficult to name a prominent question upon which the parties, as parties, have made a direct issue. The pretended issues grew out of or survived the Rebellion ; the real contest arose from the earnest desire of the parties out of power to get in, and the equally strong desire of the party in power to stay in, " the one striving to rout the outs, and the others to oust the ins." But the country may now indulge in the belief that the issues of war-time are no longer dominant, but have passed into history. We have fallen upon better years, when in our campaigns arguments upon economic, political, and moral questions are likely to take the place of the old-time appeals to local prejudices and sectional animosities. IV PREFACE. In this betterment of our political affairs the ques- tion of the tariff is to be prominent. It has been a lively question in our past history, and it is likely to remain with us as an issue for yet many a year. It is a question upon which every citizen, and espe- cially every voter, should have an intelligent and emphatic opinion. The difficulties should not appall, since they are far more imaginary than real. At the close of a day of discussion on the appointment of the Tariff Commission, a member of Congress petulantly remarked, " I don't understand the tariff question, and I shall not try to understand it." This hopeless avowal of ignorance is unworthy even a private voter, and it ought to be sufficient to lay the professed statesman upon the political shelf so high that no campaign step-ladder will ever reach him again. It should be kept in view that the present issue is not between direct and indirect taxation. Such a question may arise in the future. Absolute free trade is not now contended for by any considerable number of our people. The living contest lies be- tween revenue-tariff advocates and free-traders as they are interchangeably termed in the rather loose speech of the times on the one side, and the advocates of a protective tariff as an ultimate fiscal policy on the other side. The argument here presented is confined to this purpose and scope. While yet a young man in college I was much impressed with the beauty and harmony of eco- nomic laws as they were reflected from the pages of PREFACE. V our text-book, written by an honored American, Pro- fessor John Bascom, late President of the University of Wisconsin. A somewhat careful inquiry during the succeeding years into the subject of national revenues and the effect of commercial legislation has brought the mature conviction that " protec- tion " is the most pronounced misnomer of the age. This volume springs from a desire that others should perceive and hold this now vital truth. I have written for the average citizen who cares to reflect upon a public question which has always been important, and apparently is soon to be su- preme in our politics. I have written as a student of economic science, not as a political partisan. All will agree that the question of industrial freedom, like civil freedom, ought to be superior to the contests of parties. The divergence of opinion relates solely to meth- ods. On the issue of protection, which in recent politics has been but dimly outlined, the parties have no coherency, free-traders among Republicans and protectionists among Democrats being num- bered by thousands. The crystallization of public opinion into coherent parties upon the question will come as a result of broader knowledge and a better realization of the interests involved. Many of the thoughts and arguments here pre- sented are original in form and substance, but many of them also are the ideas of others recast to suit the present purpose. Economic principles are of slow growth. Like the laws of physics and the great inventions in mechanics, they have become Vi PREFACE. known only from the labors of many men and many years. All men build upon the foundations laid by their predecessors. That would be a very barren and profitless book which should ignore our one hundred years of tariff history, and the ideas evolved by that wrestle of policies. Free-traders in this contest, like Martin Luther in his, have nailed their theses to the door; and until sound argument and the experience of the nation shall throw upon their principles at least a reason- able doubt, they propose to avow, advocate, and defend them. But no one may appear as " Sir Oracle." Modesty is a graceful attitude in every one who would approach this question in discussion. Much has been well said on both sides, and the advocate of free trade has something to beat more substantial than the air. Neither body of pleaders can with any gracefulness claim, even in thought, to be the embodiment of all that is true ; nor can free-traders make to protectionists, any more than protectionists can make to free-traders, the ironical suggestion of Job to his comforters, " No doubt but ye are the people, and wisdom shall die with you." I can not speak for protectionists ; but it has been my constant aim to give an impartial, though neces- sarily a brief, statement of their opinions. The ad- vocates of the restrictive policy are mostly honest men, who sincerely desire the highest material pros- perity of our country. That they are mistaken, I believe and have tried to show. Their writers have given ample expression to their views. They will not PREFACE. Vli find them distorted, I hope, after passing through a free-trade medium. Unfairness would be even more fatal to my purpose than sophistry. "On all great questions much remains to be said ; " and no one can hope to settle for others a question like this. He will do enough if he can excite thought, provoke inquiry, and stimulate dis- cussion, knowing that conviction comes to the best minds rather from their own activity than from a passive reception of other men's opinions. No puzzling question of economic or moral re- form can ever be finally settled or cease to be an issue until it is adjusted as it ought to be adjusted. Truth is inherently strong, and it has within itself the germ of ultimate victory. There is much fact, as well as much exaggeration, in the epigram, " Truth survives a cyclone, but error dies from a pin-scratch." The great American heart always beats right, and the national good is always, in the end, the net product of public agitation. Newton's apple did not more naturally and certainly fall to the earth than does the public conscience approve of that which is equitable and just, and condemn that which is partial and oppressive. It is not strange to me, therefore, that those who believe in untrammelled commerce and industry are a mighty host, and that men are perceiving that free speech, a free press, free schools, a free ballot, and a free church are no more the legitimate out- comes of popular government than free trade. I have the greatest confidence that investigation and thought, with a fuller knowledge, will lead our Vlii PREFACE. people to a large degree of unity in the sentiment that all legislative interference with economic laws and with legitimate trade is either inoperative or else harmful to the aggregate prosperity of our "country E. T. APRIL 21, 1888. CONTENTS. CHAP. PAGE I. INTRODUCTORY. THE PROBLEM n II. RISE OF THE TARIFF SYSTEM IN EUROPE . 21 III. A LEAF FROM THE HISTORY OF PROTECTION IN ENGLAND 27 IV. OUTLINE OF TARIFF HISTORY IN THE UNITED STATES 35 V. SOME LESSONS FOR THE PRESENT FROM THE TARIFFS OF THE PAST 50 VI. SOME ECONOMIC PRINCIPLES UNDERLYING THE TARIFF ISSUE 64 VII. Is SCARCITY BETTER THAN ABUNDANCE, DEAR- NESS THAN CHEAPNESS, OBSTACLES THAN FACILITIES, LABOR THAN LEISURE? ... 75 VIII. THE INTERESTS OF PRODUCERS VERSUS THE RIGHTS OF CONSUMERS 88 IX. Is PROTECTION THE CAUSE OF OUR PROSPERITY ? 96 X. RELATION OF PROTECTION TO PRICES . . . 109 XI. RELATION OF PROTECTION TO WAGES . . . 121 XII. How DOES PROTECTION AFFECT OUR FOREIGN TRADE? 143 X CONTENTS. CHAP. PAGE XIII. How DOES PROTECTION AFFECT OUR SHIP- PING INTERESTS? 155 XIV. Is THE AMERICAN FARMER PROFITED BY PROTECTION ? 160 XV. THE RELATION OF THE LABORING MAN TO THE PROTECTIVE TARIFF 174 XVI. HOW FAR DOES PROTECTION BENEFIT THE FAVORED INDUSTRIES ? 183 XVII. A GLANCE AT SOME OF OUR PROTECTED IN- DUSTRIES 191 XVIII. SOME FALLACIES OF THE PROTECTIONIST SCHOOL 206 XIX. SOME FURTHER CONSIDERATIONS .... 232 XX. PLEAS BEFORE THE COMMITTEE ON WAYS AND MEANS. AN EXTRAVAGANZA . . . 249 XXI. THE MORAL ASPECTS OF THE ISSUE . . . 262 XXII. CONCLUSION. THE OUTCOME 267 IS PROTECTION A BENEFIT? CHAPTER I. INTRODUCTORY. THE PROBLEM. N all ages anarchy has been a dreaded thing. Government is necessary to the existence society, of business, of order, of civilization itself. Whatever may be the theory of monar- chies, it is certain that in the United States government is instituted for the common benefit of the people. That "governments derive their just powers from the consent of the governed," is a fundamental truth which has become axiomatic with all Americans. Good government can not exist without money; since all share in the benefits of order, all should contrib-/T' ute to its support. Taxation in itself is an evil, and it ^ U*Jti-e4 can not be defended unless it shall bring compensating/****^ benefits. Vfcv> \ &*_, Though we have been so long under protection, the question can not be considered a settled one. In truth, the voters of the country have never in all our history cast a ballot squarely on the single issue. In the early days of the Republic the question was bound up with the greater question of national existence itself. It mingled with the war politics of 1812 and the succeeding years. It was entangled with the issue between state sovereignty and national supremacy in the days of Nullification. For more than a generation it was overshadowed by the slavery question. In 1861 it was involved in the prosecution of the war, and the enormous financial requirements of the time. Since that date, the large revenues needed, and the evident disposition of both the great parties to shun the question, lest it should disquiet their organizations, have been suffi- cient to prevent it from becoming a clear-cut and definite national issue. Perhaps no other purely economic question in our gov- ernment is of such far-reaching importance as this. Hun- dreds of millions of dollars are involved in it every year, and protection has an incalculable potency for good or ill upon the prosperity of our people. The signs of the times would seem to indicate that the great question is coming up for final solution here, as it came up in Eng- land, much sooner than the popular expectation would predict. Starvation of the millions will not in America, as it did in England, bring the question to a sharp, abrupt adjustment ; but the contest is likely to be long, and full of temporary reverses to both sides. That truth will be finally apprehended with clearness, as a result of public 7S PROTECTION A BENEFIT? 17 agitation, no one can doubt who believes in the progres- sive tendency of the age. There are four classes of opinion in our country with respect to the tariff existing since the Rebellion : 1. Protectionists are supporters of the tariff substantially as it now exists; and they plead for the highest rate of duties compatible with sufficient revenue, with the view of shielding domestic industry from foreign competition. 2. Tariff-reformers, or moderate protectionists, adhere to the idea of protection for its own sake, but advocate the repeal of many inconsistencies and abuses which they declare result from the present scale of taxes. Many of these favor, in the interests of manufacturers, the repeal of all duties on raw material imported. Some of this class claim that the existing tariff threatens the ruin of the protected industries themselves. 3. Moderate free-traders, or revenue reformers, be- lieve that protection is a mistake, and favor the raising of the revenue by duties on a few articles only, so as to give as little protection as possible, and to interfere as slightly as may be with the natural course of commerce and industry. 4. Absolute free-traders are those who advocate unre- stricted trade between our nation and others, as now exists between the States of the Union. They would provide the public revenues by excises, and by property, capitation, and income taxes. They believe, with the third class, that free- dom of exchange is as much the birthright of every Amer- ican as freedom of person and ballot. They believe that all interference of legislation with the natural currents of trade is destructive of real prosperity, makes wages lower and employment uncertain, raises the price of manufac- tured goods with no compensating increase in the value of other necessaries of life, and limits American industry to 2 1 8 fS PROTECTION A BENEFIT? a home demand when it might enter the markets of the world. There is a wide-spread belief that the inquiry as to what is the true policy with respect to industry, exchange, and revenue, as influenced by law, is too abstruse to interest the masses, and too complicated to be understood by them. This is a mistake. It is perhaps true that there is no pop- ular comprehension of economic laws in the abstract ; but we have no citizens of ordinary intelligence who do not perceive that principles which are best for the individual are also best for the nation. All men see that national wealth is the aggregate of individual wealth, and that what- ever influences persons for good or ill financially, has ex- actly the same effect upon the nation. The question is a large and many-sided one, but it is not difficult. Thus far all agree. Even free-traders will concede that protection does benefit certain classes of our people ; and most protectionists will grant that a revenue tariff is best for certain other of our industries. But when the question arises as to the effect of the two systems upon our people in the aggregate, there is an immediate and emphatic divergence of opinion. The fact that the ma- jority of our voters have views more or less mature, and based upon what seems to them adequate support, would lead us to infer that the questions involved are not beyond the grasp of any adult mind of good intelligence. An actual examination of the debatable ground fully confirms this inference. There are two avenues of approach to every economic question : i. The avenue of theory, or abstract principle. Here we study the influence of legislation upon industry as revealed by the known laws of human action. Men perceive the effect of the thing under consideration be- cause they see the causes which have led to that effect. SS PROTECTION A BENEFIT? 19 2. The avenue of experience and practical application. Napoleon said, " Experience is the true wisdom of na- tions." By this means of approach men are able to know what will be, and now is, from what has been. It is the domain of history and statistics. To many minds it is the most satisfactory form of inquiry ; but others, with more penetration, perceive that while the fact may be undis- puted, the inference therefrom may be erroneous. If these two lines of argument harmonize, and point out the same conclusion, they constitute the strongest possible chain of evidence ; but if they diverge and contradict, they are mu- tually destructive, and serve only to befog and darken. We have had discussion on the tariff, on occasion, both in our national legislature and among the people, ever since the First Congress in 1789. But it would be a mistake to infer that the masses of the people are well versed in economics. There are several reasons for this : i. Our people have been absorbed in the activities of business, and they have not inherited any mediaeval burdens to make them smart under their wrongs and drive them to a study of their grievances. 2. We have never had a na- tional text-book on economic science such as Adam Smith gave to England in the " Wealth of Nations." 3. The policy of our Government has been peaceful, our wars have not been numerous, and immense standing armies have not, as in Europe, absorbed the surplus and eaten out the substance of our people. 4. The immense fertility of our soil, the abundance of the common necessaries of life, and the easy conditions of existence, have diverted us from the practice of small economies. 5. Even men in official station have felt that the people did not demand that they should understand economic science. Not more than two or three, even, of our Presidents have had a clear and comprehensive grasp of the subject of taxation. In con- 2O IS PROTECTION A BENEFIT? sequence of this public indifference in the past, our law- makers in Congress have not been called to a sharp account for their voices and their votes, and the patient public have allowed affairs to drift. In a republic the people are, at least theoretically, the only proper guardians of their liberties and interests. Public safety is found only in virtue and intelligence ; and the solution of political problems, as of moral ones, can not wisely be left to politicians, nor the adjustment of economic questions to Congressmen and college professors. Like the Sphinx of Thebes, such questions as the one under con- sideration will either enslave or destroy us if the popular intellect and ballot be not able to unravel their riddles. CHAPTER II. RISE OF THE TARIFF SYSTEM IN EUROPE. HE tariff is not an American invention. The word itself has a history. Etymologically it is said to come from Tarifa, a town and castle at the Strait of Gibraltar, where the Moorish pirates, for a considerable period during the eight centu- ries of the Mohammedan sway in Spain, exacted tribute from every vessel entering or leaving the Mediterranean. This tariff was like the "squeeze stations" now customary in China. A certain part of the value of every cargo went to satisfy the demands of these pirates. It was a robbery tamely submitted to by the nations of Europe rather than be at the trouble and expense of ending it, just as in American history our Government for so many years encour- aged the exactions of the Algerian pirates by unresistingly paying them. It is not just to hold words, any more than people, to a strict account for their antecedents ; but it may be said that the name could not have adhered to the thing, had there been no kinship between them. Though the word does not have a flattering origin, it is true to its history in at least this sense, that it always takes, but never gives ; it always levies, but never contributes. 22 IS PROTECTION A BENEFIT? In the Middle Ages those towns that had purchased their freedom from the lord of the realm were governed by guilds, or trade-corporations, existing in them. These guilds, like the trade-unions of our own day, aimed, not to secure rights to all citizens, but privileges to themselves. The acknowledged policy everywhere was to establish mo- nopolies and to maintain a discrimination against rival goods and the non-privileged class both within and without the town. They forbade the intrusion of strangers into the favored industries, limited the number of workmen, and guarded against the importation of competing products. Here is the origin of that prominent figure of our own time, the skilled workman. In France, for hundreds of years, freedom of choice in trade was denied the people by the despotism of the mon- arch and the feudal lords, who not only levied the general tax and such military service as the feudal system required, but also laid on other most odious restrictions. It was the legal duty of every peasant to get his grain ground at the mill of his lord, his bread baked at his lord's bakery, his wine made at his lord's wine-press, all, of course, at prices scheduled to suit the proprietor. Under the meddle- some hand of such legislation in the simple affairs of do- mestic life, it is not strange that the miseries of the people increased, and the productiveness of labor diminished. When it was seen that seven eighths of the people of France gave more than half their products to support the other one eighth in idleness and luxury, there arose an agitation among the peasants and the workmen of the towns. This discontent continued from age to age till it culminated in the horrors of the French Revolution. For centuries but little was done in any country of Europe to stimulate intercourse with other nations, till the commercial idea was revived by the astonishing success of fS PROTECTION A BENEFIT? 2$ Venice, followed later by the other maritime cities of Italy, Genoa, Naples, Amalfi, Florence, and Pisa. The abound- ing wealth acquired by their trade with the outlying world, and especially with India, opened a new era in Europe. They were the pioneers in modern commerce ; and their history shows what prodigality of riches will flow from an unobstructed trade, in spite of factions within and jealousies without. In imitation of the Italian cities, the Hanseatic League was formed by about seventy commercial and manufactur- ing cities on and near the Baltic and the Rhine. Their object was to obtain an organized commercial supremacy in the North. They established auxiliary trading-posts in other parts of the world. Perfect freedom of trade existed between all these towns, and between them and their dis- tant depots. They obtained almost exclusive control of exchanges in the North, as the cities of Italy had done in the South. But these two pictures of prosperous trade were con- spicuous exceptions in the general course of commerce in Europe during the Middle Ages. The usual practice was that governments, while not establishing systematic tariff schedules, laid many restrictions upon the incoming trade. But in thus trying to injure others to benefit themselves, they did not stop at the boundaries of their territory. They carried restriction to the logical end, that if it was good for boundaries, it was also good for the interior ; and hence they protected one class of citizens against another class, cities of one district against cities of another district, and one domestic occupation against other domestic occupations. " If a man of Liege came to Ghent with his wares, he was obliged first to pay toll at the city gate ; then, when within the city, he was embarrassed at every step with what were termed ' the privileges of companies.' " With the 24 JS PROTECTION A BENEFIT? exception of England, whose Magna Charta prevented, every State of Europe laid national, provincial, and city tolls, with an interruption of home production and domestic trade of all sorts. The tyranny of prescribing by law the price at which all articles should be sold was nearly universal. Blanqui, the historian of political economy, tells us that commerce would have been destroyed by these laws but for the fact that they were inadequately enforced, since the instincts of a people are stronger than their legislation. It was not till the modern age that commerce began to be rightly valued as a minister to the comforts and luxuries of life. But for a long time erroneous ideas prevailed as to the laws of trade. Men did not see that international com- merce is advantageous to both parties engaged therein, and that after every fair exchange they are richer than before. A prominent opinion of the time was that trade is a kind of commercial war, and that in exchange between two nations one gains, while the other loses. The paramount idea with any nation in selling its products was, not to ob- tain the commodities of other lands, but to secure gold therefor. In the estimation of the times, successful com- merce consisted, not in obtaining the products of labor, but in getting into one country from another the largest possi- ble balance of the precious metals. This has been called the " Bullion Theory " of trade. At a later period the policy of European traders might have been formulated, rather paradoxically, as follows : To sell is profitable ; to buy is unprofitable. If we trade with- out restriction with a neighboring people, we take as much of their products as they take of ours. Since, therefore, they profit by our trade as much as we profit by theirs, legislation should step in and destroy half of these ex- changes, so that we may do all the selling, and they all the buying. Thus shall we reap all the profit. This modifi- SS PROTECTION A BENEFIT? 2$ cation of the Bullion Theory is known as the " Mercantile Theory." France was the first nation to put the Mercantile Sys- tem into actual operation. In 1572, the year of the mas- sacre of St. Bartholomew, the king, Charles IX., forbade the exportation of wool, flax, hemp, and yarn, and the importation of all woven fabrics and some other manufac- tured goods, under penalty of confiscation. Sully, the finance-minister of Henry IV., elaborated the system, and said : " It is still more necessary to do without the com- modities of our neighbors than without their money." But the system was brought to its highest perfection under Colbert, the famous minister of finance to the Grand Mon- arch, Louis XIV. His idea of securing national wealth is thus pointedly expressed in his own words : " To reduce export duties on provisions and the manufactures of the kingdom ; to diminish import duties on everything which is of use in manufactures ; and to repel the products of foreign manufacture by raising the duties." From France the system extended to other parts of Eu- rope. Under Emperor Charles V. of Spain and Germany, and his successors, it obtained wide adoption. But since it was based upon the injury of neighboring nations, it brought on retaliations and enmities, which found expres- sion in frequent wars. For two centuries most of the wars of Europe were partly or wholly commercial in charac- ter. Under the operation of this system and the contests brought on by it, Spain passed within a century from the highest grandeur of empire to a condition of weakness and dependence. It is not strange that under the system of Colbert man- ufactures should flourish. They responded to the new policy ; and whatever may be said of its effects upon other industries, their growth was really phenomenal. The whole 26 IS PROTECTION A BENEFIT? force of legislation was directed to their stimulation. The national treasury also received large revenues. Encour- aged by this apparent success, Colbert proposed another change in the theory of sales. This time the Protective System was the result. "His tariff of 1667 was the first protective tariff, so called, that is to say, it was the first formal schedule of tariff taxes laid for the avowed purpose of cutting off competition from home manufacturers in order to raise the price of their wares." This tariff shut out the products of the Dutch looms. The Hollanders first argued, then remonstrated, and then adopted retaliation. The wines, brandies, and textile manufactures of France were excluded from Holland by the counter-irritant, another protective tariff. French agriculture, which had suffered injury from the prohibition of the export of grain, was now further injured by the foreign interdict against the vintage. As the Mercantile System went from France over Eu- rope, so did the Protective. Notwithstanding the remon- strance of the farmers, the tradesmen, and the importers of France, the system was persevered in as a settled policy. Most of the other commercial nations of Europe, if not persuaded to adopt it because of its virtues, felt compelled to do so in self-defence. This system has continued till our own time. To-day France, Germany, Russia, Spain, and Austria are practising protection as a settled and definite national policy. England, the Netherlands, and Switzerland do not believe in legislative restriction of com- merce ; and in giving expression to their economic ideas, they have made trade as free as is compatible with a rev- enue derived from customs-duties. Thus in our time one part of Europe practises the largest attainable freedom of exchange with all the world, and the other part practises isolation, restriction, and national self-sufficiency. CHAPTER III. A LEAF FROM THE HISTORY OF PROTECTION IN ENGLAND. OR a thousand years Great Britain was known as an agricultural and grazing island. Her heaths and meadows were favorable to the raising of sheep, and in the early time wool became the chief article of export. In the English House of Lords the seat of highest dignity is known as the Woolsack, hav- ing been originally a sack of wool, thus to indicate that England's power and wealth were founded upon that product. Previous to the time of Edward III. the wool was sold to Belgium, there converted into cloth, and then taken back for consumption in England. In order to obtain revenue, Edward I. secured, in 1275, by vote of Parlia- ment, a tax on each sack of wool exported. This was the very first step in taxation looking to customs revenue in England. A later monarch, in order to force the manu- facture, forbade that wool should be exported, and woollen cloth imported. Flemish weavers were invited to settle in England, and the wearing of any but English cloth was prohibited. The Parliament of Queen Elizabeth enacted that the exporter of sheep or wool should suffer fines, 28 fS PROTECTION A BENEFIT? mutilation, and other savage penalties. This prohibition was continued till 1825. An Act was passed in 1678, ordering, for the encouragement of the woollen manufac- ture, that every corpse should be buried in a woollen shroud. The result of all this was the establishment of woollen manufactures, in rivalry with the Flemish. The merchant marine of England also had its origin at this time, encouraged by the free importation of raw material and the free exportation of finished commodities. The Colonial System grew out of the Protective, as the Protective grew out of the Mercantile, and the Mercantile out of the Bullion. It was a policy to make the colonies of the parent country minister to its prosperity. It pre- vailed among all the colony-planting nations of Europe. "The home government," says Blanqui, "used the col- onists to rob the natives, and tariffs to rob the colonists." Our own colonial history shows what a zealous supporter of this system and what an unkind guardian of colonial commerce was Great Britain. Her dependencies in all parts of the world were made a source of revenue. An English statesman declared in Parliament that this was the very purpose for which they were planted. The precise object was to secure an American market for English goods at a high price, and an English market for American goods at a low price. It meant the importation of American raw material into England, and the exportation of English fin- ished goods to America. The first and all attempts to begin manufactures in this country were followed by the interference of Parliament. The Navigation Acts of 1651 greatly restricted the colonial shipping. In 1698 the colonial woollens, whose manufacture had sprung up spon- taneously in the free atmosphere of America, were for- bidden to be sold by one colony to another. In 1710 the Commons declared that manufactures in the colonies IS PROTECTION- A BENEFIT? 29 would lessen their dependence on England. In 1732 it was forbidden, in the land of the beaver, to export hats, since, as was argued, America would soon supply the whole world with hats. In 1750 it was forbidden to erect in America any mill for rolling or slitting iron ; and Pitt exclaimed, " It is forbidden to make even a nail for a horse-shoe." In a country where every family read the Scriptures, no English Bible could be printed without com- mitting piracy. In 1765 the emigration of artisans from England was made an offence, under heavy penalties. The first General Congress of the American colonies in 1 765 passed a mild resolution, which sounds to-day like a truism : " That the restrictions imposed by several late Acts of Parliament on the trade of these colonies will render them unable to purchase the manufactures of Great Brit- ain." The Revolutionary War was a commercial war. "No taxation without representation" was not the real issue. That was only an outcry to catch the popular ear. It was well understood that it was not the custom with any European nation to permit colonial representation in its law-making assemblies. The soul of the war was the com- mercial question, whether America should have an un- disturbed commerce ; and that eight years' struggle was simply a well-conceived revolt against the selfish and un- natural motherhood of England. The early law for the protection of wool-growers and woollen manufacturers was soon followed by the protection of the grain-growers. These Acts were called the Corn Laws. They date from 1360, in the reign of Edward III. The first legislation prohibited the export of grain, except from a few cities which had bought license from the Crown. Later it was the law that exportation should be allowed when grain was so abundant in England that the price did not exceed 6s. 8 an< ^ i* 1 !88o they were $32.35. In the year 1880 the total exports of the United States amounted to $ 1 6.66 per capita, only half of that of England, though the volume of our exports in that year was greater than in any previous year in our history. In 1879 our exports of cotton goods which was our largest item of manufactured products were $10,850,000, which was less than it was twenty years before, under 152 IS PROTECTION A BENEFIT? revenue tariff. During the same year the export of cotton goods from England was $60,000,000 more than it was in 1860; so that the mere increase of exports in this one line of products was almost six times as great as the whole of our own. How long shall we continue to hear the talk of those who praise the industrial independence and pro- claim the commercial superiority of the United States? All readers of newspapers are familiar with the general and unsupported statement that our cutlery is selling even in Sheffield more freely than the goods of Sheffield manu- facture, both being displayed at the same counter and at the same price. What are the facts? The Report on Commerce and Navigation for any recent year will show that our imports of cutlery, chiefly from Sheffield, are from eight to twenty times as great as our exports. A few years ago Mr. Morrill, the author of the tariff, represented Shef- field as rapidly losing control of its favorite industry. But that city is now sending direct to the markets of the United States, overleaping our tariff walls, twice as large a volume of its goods as when the words were uttered. Is it very probable that the grass is going to seed in the streets of Sheffield? So much for the boast that our goods are competing with the products of England under the shadow of her factories, and driving them out of the marts of the world. Thus with production normally great through natural resource and the increasing use and power of machinery, but now further stimulated by artificial means, with foreign exportation cut off, with importation unchecked, and the domestic consumption reduced by high prices, is it not a natural and inevitable circumstance that our markets should be all the time congested with goods and the chan- nels of trade choked up with the plethora of our pro- duction? Over-production is one of the loudest cries of JS PROTECTION A BENEFIT? 153 our times, and there are strong indications that our over- supply of products will be permanent. The result is, that American manufacturers are already compelled to do one of two things, either to export their goods at a loss, or else restrict their productions by running on short time. No fact is better understood than that they are doing the latter of these things. Both of them mean enforced idle- ness to thousands, wages reduced to a starvation minimum, and the labor agitation which is sure to follow. The overshadowing commercial question of the hour is, How shall we obtain more extended markets? In the light of the fact that our production is increasing more rapidly than our population, the high talk which we hear about a home market sounds like the satire of a political philosopher or the plausible half-truths of a sophist. The home market is already full, and protection has no power to enlarge it. No one knows better than our protected manufacturers that the real cause of the stagnation in their business is not high wages, is not low prices, is not foreign competition in our markets, is not the production of too large a volume of goods, but rather the inability to enter distant ports which protection has fastened upon our indus- tries. The time will come, and perhaps at no distant day, when manufacturers will themselves confess that protection does not protect our markets, that its effect is exactly the reverse, and that with a constantly increasing production it is far wiser to seek an international trade than to confine ourselves to a national one which we are forced to divide with foreigners. They will cease to clamor for " protection against foreign products which deluge the market," and voluntarily enter the open field of competition, in order, by securing the world for a market, to insure the existence and prosperity of their industries. This time has already come in the case of some of our most far-sighted and pro- 154 fs PROTECTION A BENEFIT? gressive manufacturers. Many of them are seeing as they never saw before, that commercial isolation is both a delu- sion and a failure, and that real industrial independence can never come till we secure the world for our market. Many of them are seeing that our markets could not be more " flooded " under absolute free trade than they are under protection ; and that to divide with others a market of fifty millions of people is vastly less advantageous than to divide one of fifteen hundred millions. The blessings of an unrestricted trade came to England unsought. It came from the unkindness of the climate and the clamors of her starving millions. It will probably come to us also from causes more potent than any device of man. Those most intimately acquainted with the inner, the less apparent, and the more subtile operations of pro- tection the manufacturers themselves are seeing that the system is working its own destruction. It has within itself the seeds of death. The people, too, are seeing that the primacy of industry and trade is within our grasp, and that to reach it all hindering restrictions of law must be cast aside. May the final adjustment of the question be reached through the intelligent deliberation of our states- men and people ; not forced upon us by popular uprisings, or by public discontent emphasizing itself in the turmoils of revolution. CHAPTER XIII HOW DOES PROTECTION AFFECT OUR SHIPPING INTERESTS ? ROM the beginning of our history we have been a maritime people. Planted in the wilderness of the New World, the colonies felt that ships were a first necessity, in order that they might draw from England whatever civilized life required, and send to Europe the spontaneous gifts or the crude products of the virgin continent. Beginning with the construction of the " Blessing of the Bay " in 1631, our merchant ma- rine rapidly increased in importance during colonial times, till it became a rival of the maternal " mistress of the seas." In those days such coast towns as Marblehead, Salem, Lynn, and Boston were centres of great .activity in the shipping trade. For a century and a half ship-building flourished here not only without any protection, but in the face of the continual hostility of England toward colonial shipping. Although the Navigation Laws of England in 1651 were enacted chiefly against Holland, they were en- forced with rigor against all other rivals, and especially against her own colonies in America. In spite of this at- tempt at repression, our marine interests steadily grew. How great they were at the outbreak of the Revolution, 156 IS PROTECTION A BENEFIT? any one may learn from Burke's speech in Parliament on " Conciliation with America," or in Lord North's final pro- posals preceding the outbreak of hostilities. All this was accomplished under conditions of absolute free trade in ships and shipping. But in 1 789, by one of the first laws enacted under the Constitution, all foreign- built ships were excluded from registry under the American flag. The object of this law, which has remained in force during all our history to this hour, was to make it profitable to build, own, and use ships in America, by cutting off for- eign competition in ship-building. The result now is, and has always been, that no foreign-built ships, even though owned by American citizens, could be used on the ocean, unless they sailed under foreign flags. No ships except those made here can have the protection of our laws. This is prohibition expressed in the strongest language known to law-makers. There are only three things which American citizens are positively forbidden to buy in foreign markets ; namely, obscene pictures and books, drugs and instruments for immoral purposes, and ships! The first two are evidently in the interest of public morals. The third was enacted for no other reason than to encourage, and if possible to force our people to build ships instead of buying them. In 1792 it was enacted that no foreign-made vessel should take any part in the coasting trade of the United States. That law has always remained in operation and is on the statute books to-day. Thus our shipping interests have been protected to the point of prohibition for a century. Under the present tariff and other periods of high pro- tection it has been impossible to build ocean-going ships in this country in competition with the foreign makers, on account of high duties which raised the cost of iron, steel, lumber, duck, cordage, and all material entering their con- 7S PROTECTION- A BENEFIT? 157 struction. The result is, that for many years our mer- chants, importers, and ship-masters have found themselves in an embarrassing dilemma in which it was unlawful to buy ships, and impossible to build them. Let us see the facts. According to official statistics (see Report on Commerce and Navigation for any recent year), the tonnage of American sailing vessels entering our ports from foreign countries has decreased more than fifty per cent since the adoption of our present tariff. But the tonnage of foreign vessels has increased over three hundred percent. During the four years just before 1861 the ton- nage of American steam vessels entering our ports from foreign countries averaged forty-one per cent of the entire steam tonnage. But during the four years just before 1887 it averaged only sixteen per cent. It is there shown that in 1856 seventy-one per cent of the entire tonnage, both of sail and of steam, entering our ports from foreign countries, was American, and twenty- nine per cent was foreign. But now only twenty per cent is American and eighty is foreign. In 1860 seven tenths of our foreign commerce was carried in our own ships. In 1870 thirty-five per cent was so carried; in 1875, twenty- six per cent; in 1880, nineteen per cent; and in 1885, only sixteen per cent. Although we have such a large trade with Brazil, we have no line of vessels plying between that country and our own ; and we so seldom send out a vessel thither on an occasional venture, that even the Lili- putian kingdom of Belgium has a larger shipping interest with Brazil than we. Furthermore, the Report shows that during the life of our present tariff the marine service of every commercial nation has greatly increased, several of them more than a hundred fold, except the United States alone. We have declined both relatively and abso- lutely. These are luminous facts. 158 SS PROTECTION A BENEFIT? This remarkable decay of our shipping can not be ac- counted for by any natural causes. No country in the world is so well endowed as ours for this particular form of industry. Our timber supply is not equalled in any quarter of the globe. We have mountains full of iron, and vast areas underlaid with coal. We surpass all lands in the growth of cotton for sails, and we equal any in hemp for cordage. Our sailors, from the day of Paul Jones, have proved themselves at least the equals of any other, and American ingenuity has no superior in the invention and use of the most approved appliances for every kind of pro- duction. Yet it is conceded by all that ships intended for the foreign trade can not be built in our dock-yards in com- petition with those of the Clyde. But this excessive cost does not arise from the rate of wages paid ship-carpenters here. It is chiefly owing to the artificial dearness of the material used in the construction of ships. Thus our marine interests are exposed to the evils of protective taxation on one hand, and to the competition of European ships on the other. With a smaller first cost, and, hence, lower rates for freight, the ships of foreign con- struction usurp the employment naturally belonging to our own, and they are left to rot at the wharves, or to be sold to the junk-shops. Every year we pay to foreigners millions of dollars to do our ocean carrying. If this were a natural result, it would be attended by no loss to the country. But it is a result wholly artificial. Our ship-owners should have at least the lion's share of this business. Our ship-yards might resound again, and our ports would be filled with the stars and stripes, instead of foreign flags. Instead of going out half- laden with crude products and returning with an empty bottom, our merchantmen would go into all parts of the world loaded down with finished products, and return SS PROTECTION A BENEFIT? 159 freighted with the good things peculiar to other lands. Instead of sending our goods on a triangular voyage, as we now do, to England, there to be re-shipped with additional charges for handling, insurance, and commission, all at the expense of the original producer, our products would go from our ports direct to the place of consumption. " Go to the ocean ! " thundered Webster in 1814. But Massachusetts has never been able to regain that prosperity to her shipping which the policy of protection took away. There is no probability that she ever will regain it, so long as the system is adhered to. If we would boast of bearing the trident of Neptune, we must abandon a tariff system which during many years has been legislating our merchant marine out of existence. We must abandon a policy which has reduced us within twenty-five years from the rank of a first-class maritime power to a grade lower than that held by us when we were a colonial weakling of Great Britain. What unrest must haunt the soul of Joseph Rodman Drake, who wrote the beautiful poem on " The American Flag ! " " Flag of the Seas ! on ocean wave Thy stars shall glitter o'er the brave.'' Was the poem a joke? Was it a satire? Was it the sentimental bombast of a school-boy ? Surely in the light of to-day it sounds like any or all of these, anything except the sober prophecies of a patriotic American bard. CHAPTER XIV. IS THE AMERICAN FARMER PROFITED BY PROTECTION ? VER one third our people are engaged in agri- culture in its various branches. It has been a standard maxim in all ages that the cultiva- tion of the soil lies at the base of all other in- dustry. No one will deny this to-day. It is therefore an interest of surpassing importance, and its welfare should be a matter of concern to every citizen. The farmers have never objected to bearing their rightful portion of the national burdens. But they do demand that in a government based upon the idea of equality, the pres- sure of taxation shall bear alike upon all. Protection is shaped and manipulated in the interests of manufacturers ; but this class, including in the count all employe's in these industries, and their families, numbers less than twenty per cent of our people. How does it affect our forty per cent of agriculturists ? The advocates of the system have seen that its perpetuity requires that it shall be made to appear advantageous to as many classes of people as possible. Since the farmer carries more votes than any other class, most strenuous efforts have been made to show the blessings of protection to the agricultural interests. 75 PROTECTION A BENEFIT? l6l The one chief plea which protectionists have addressed to farmers is known as the " home market argument." Stated in words it is as follows : The burdens which pro- tective taxation imposes must, indeed, be borne in part by agriculture. But protection so encourages manufacture that more people engage therein, who must be supplied with food by the farmers. This gives a ready and profita- ble market at home for the surplus products of the farmer, who sells at enhanced prices and without the expense of foreign transportation. It would be a mistake to assume that this argument has been ineffectual. It has existed for a century, and during all that time it has been persistently rung in the ears of our agriculturists. It constitutes the staple of every protection- ist speech in the farming districts. Is it logically sound, or is it only a plausible fallacy ? It is to be noted, first, that protection does nothing to increase the number of consumers of farm products. The same people will require the same amount of food, whether engaged in manufactures, or in some other pursuit, or in no productive occupation at all. From this point of view, it is not easy to see how protection can increase the absolute home demand for farm products. But, seeing this, a prominent protectionist from Penn- sylvania attempted to show in Congress that. protection has the effect to increase foreign immigration. If such is really the case, and if the immigrants come to spend their lives in idleness, the plea might be a good one, since more mouths must be filled with bread and meat. But they do not lead lives of idleness. They come to our shores fully resolved to win their way through some productive employ- ment. If most of them engage in manufactures, their com- petition can but reduce the wages of our native operatives, while it can add no advantage to our farmers, as will be ii 1 62 fS PROTECTION A BENEFIT? shown. If one half of them become farmers or farm labor- ers, they reduce instead of increase the home demand for food. This is the very thing they are doing. They in- crease production in a greater ratio than consumption, thus hastening our movement toward a general so-called over- production in all branches of industry. Statistics utterly fail to support the claim of protectionists in regard to home markets. According to the Census of 1880 the wheat production of the country was 460 millions of bushels. We exported in round numbers 180 millions, or forty per cent. About 30 millions were retained for seed, and 250 millions were required for home consump- tion. The agricultural population consumed about 100 mil- lions, while our manufacturing population consumed about 45 millions, which was only one tenth of the annual yield, and only one fourth of the amount for which we were com- pelled to find a foreign market. From another point of view the home market argument is mere theory, and an empty one at that. One operative, attending a machine, will manufacture for five, but he can eat bread for himself alone. Pennsylvania eats her own bread and meat ; but she not only produces steel rails, iron, and coal for herself, but for twenty other states also. Let two other states do the same, and no market for the goods could be found within the area of the Union. We already make more goods than our people will use at present prices, while we yearly export increasing quantities of our grains and meats. " Markets for agriculture can not be extended at home until markets are extended for our manufactures abroad." Again, the fact is shown by the official statistics that the agricultural exports of the United States in 1860 under rev- enue tariff were $295,000,000, or seventy-nine per cent of the entire exports. In 1870, after ten years of protection, SS PROTECTION A BENEFIT? 163 the figure was $391,000,000, or eighty per cent of the whole amount. In 1880, after twenty years of protection, the ex- ports of farm products amounted to $686,000,000, or eighty- three per cent of the entire exports. Instead, therefore, of the ratio of home consumption increasing, it has really be- come less, and a larger per cent than ever before of our agricultural products have sought a foreign market. In- stead of securing a growing home market, our farmers are becoming more and more dependent on Liverpool and London. But even if it could be shown that protection causes an increased demand for the products of the farm, this would be no sufficient warrant for inferring that the agriculturist would be thereby profited. It would lessen the amount ex- ported, but it would in no way affect the farmer's income from his sales. Farm produce is high on this side of the Atlantic for no other reason than that it is high on the other side. It is low here because it is low there. Prices, like the ocean, seek a level ; so that if only five per cent were exported, the aggregate value of the crop would be no greater than if ninety-five per cent were sent abroad. If every man, woman, and child in New England were a fac- tory operative it could not raise the price of wheat there one cent a bushel, since the moment the price advanced a shade beyond the figure dictated by the English market, the whole surplus product of the Union would flow there, like the wind, to fill the vacuum. With the exception of Rhode Island and one or two others, all our manufacturing states produce the major part of the bread stuffs needed for their operatives. They do not now furnish, and they never have furnished, a consid- erable market for the farm products of the Mississippi Valley. Even if they did furnish a home market for the farmer, they would laugh him to scorn if he should ask 1 64 S-S PROTECTION A BENEFIT? them to pay for his cereals one cent more than the market price, the figure dictated by Liverpool. These are suggestive facts. If protection has any in- fluence at all in increasing the demand for farm products, or in favorably affecting their price, it is quite too slight to be recorded by the barometer of statistics or detected by common observation. The home market idea, as addressed to farmers, is a purely theoretical affair, and has no basis of fact. It is conceded that protection places a burden of tax- ation upon farmers; but the home market argument as- sumes that they receive a compensating benefit. If this is true, why is it that any proposition, even to reduce duties, throws these same interests into a spasm of alarm ? If the claim is a good one, the protected industries would derive no benefit, since they would give as much as they receive. The advantages would reciprocally cancel. Their hot op- position to revenue reform and their hasty prophecy of ruin to themselves and to the artisan and laboring classes when a scaling down of duties is proposed, lead to the inference with almost the force of a demonstration, that they are aware that their system does not give the farmers any equivalent for the tribute which it levies upon them. There is another form of argument which springs out of the home market idea. It is this : If protection be aban- doned, manufacturing will be rendered unprofitable, mills and factories will be closed, operatives will be thrown out of employment, millions of people will rush into farming ; they will double the volume of agricultural products, they will prostrate prices, and thus plunge our farmers into ruin. No one can be found who has not heard this plea a score of times. But it is a matter of fact that there has never been any such movement in all our history, through all the tariff SS PROTECTION A BENEFIT? 165 fluctuations of the century. It is safe to predict that there never will be. The nearest approach to it was during the five years following the Jay Cooke Panic of 1873, under the shelter of the wall of high protection. Men do not readily abandon a familiar pursuit and willingly lose a skill already acquired, by becoming novices in a new vocation. Three things are undoubtedly true : i. If protection were abandoned it would not close our factories, since our lowest tariff did not close one fourth as many as high protection is now locking up. 2. Even if it did, the operatives would not engage in farming, since they never have done so, and they never can. 3. But if they should, they could not sen- sibly affect the price of farm products, since the world, and not the nation, is the market. The idea thus adduced is not an argument at all. It is only a fraudulent threat. It has the crack of the slave-driver's whip. If this plea means anything, except a transparent attempt at coercion and intimidation, it is a recommendation to farmers to buy off the competition of manufacturers rather than to meet it in an open field. But it never pays to buy off competition, unless a monopoly is thereby secured. This the farmer can never have, as he must still compete in his markets with all the agriculturists of the world. He must still divide the gains thus purchased with the Russian and the Hindoo. Even if the argument were a good one, it can never profit him to bribe competition. But it is not good. Though dressed in the garb of plausi- bility, examination shows it to be clothed in the rags of mere assertion and sophistry. Again, protection in theory and in practice confesses that manufactures are so weak that they must be supported by the stronger industries, and especially by agriculture. But if manufacture can not exist unless it becomes a parasite on the more vigorous pursuits, it would be better for farmers 1 66 fS PROTECTION A BENEFIT? if every shop and factory and mill were closed, and all their inmates were converted into tillers of the soil, than to sup- port them in a losing business. It is infinitely easier to compete with a pauper in an honest and profitable labor, than to feed him, clothe him, and provide him with spending money. But protectionists have other argumentative approaches to the self-interest of the farmer. They declare that all industries are favored by protective taxation. They con- cede that equitable legislation would demand that if the farmer may be called on to pay high taxes on what he buys, he should receive a compensating bonus on what he sells. They assert that he does receive reimbursement. By way of specification we are told that there is an im- port duty of ten cents a bushel on corn, oats, rye, and barley, fifteen cents on potatoes, and twenty cents on wheat ; one cent a pound on beef and pork, two cents on hams, bacon, and rice, ten cents on wool ; two dollars a ton on hay ; and twenty per cent ad valorem on wheat-flour and vegetables. Do these duties reimburse the American farmer for his protective taxation ; or are they mere paci- fying sops thrown to an important class of producers, like the tub was thrown to the whale? Let us see. We import no wheat, no corn, no meats, for consumption. We surpass the world in all kinds of farm products, and we steadily export them in enormous quantities. No tariff on imports therefore can touch them. Almost nothing that the farmer produces, except wool, can possibly be protected, since the tide of trade sets from our shores, not toward them. To write agricultural products, therefore, in the tariff schedules, is either to commit a blunder from ig- norance or else to play a trick to silence the reasonable demands of the farmer. True, we do import a little wheat from Manitoba, but fS PROTECTION A BENEFIT? 167 only because it has no other outlet to market. Once in our history, in 1881, we imported potatoes and cabbages from Scotland, but only because of a universal shortage in the home yield, when our farmers had no vegetables for market. We also import barley from Canada and rice from China, when we have a deficient crop of our own. The English market fixes the price of farm products the world over. What the farmer receives for his grain is the European price, less the expenses incident to transportation. The foreign market regulates the price not only of what the farmer sells abroad, but of what he sells at home also. The value of cotton at Manchester fixes the value at Savannah, at Mobile, and at every village in the South. The value of wheat at Mark Lane determines the price at every railroad station in the Mississippi Valley. Thus the farmer is forced to sell his surplus to the very people from whom he is for- bidden to buy, and that, too, at their own price. He is compelled to purchase what he requires in a market made artificially high for purposes of protection : he is forced to sell his surplus under conditions of absolute free trade throughout the world. But this is not the worst for the farmer. Foreign nations are placing a tax on our exports in retaliation for our tax on their exports. Since eighty-five per cent of our exports are products of the soil, this retaliation must be borne chiefly by our farmers. Germany has prohibited the importation of American meats, ostensibly in the interests of public health, but really in retaliation for our prohibitive taxation of Ger- man fabrics. Public opinion in France has demanded and obtained a tax of twenty cents a bushel on American wheat, professedly in the interests of French agriculture, but really as a measure of retaliation for our interdiction of French silks, gloves, and laces. Under the cry of " fair trade," an effort is now being made in England to tax our cotton, with 1 68 SS PROTECTION A BENEFIT? the delusive plea of aiding its cultivation in the British East India colonies. Already England sends her refrigerating steamers to South America, and lays down in London the frozen carcasses of beeves from the Pampas at a lower price than we can furnish the cattle of Texas and New Mexico. Our steadfast proscription of British goods has led Eng- land to turn her back upon our cereals also. British capi- tal, under government direction, is constructing railroads into the interior of India, in order that the 300,000,000 bushels of wheat which that country annually sells may be brought to market at Mark Lane. In the last few years the price of wheat has been lower in Liverpool than has prevailed at any time for a hundred years. Enormous harvests in all the fields of the world, and not the tariff, may be the cause of the present low price of wheat in the com- mercial centres ; but nothing can be more certain than that this depression will become permanent, when England, driven from our markets by our tariff, shall have opened, as she soon will, an avenue of approach to the vast cereal yield of India. These things can not fail to result in the permanent injury of the American farmer. They are the legitimate foreign offspring of our protective tariff. The foreign tariff does for the farmer's sales what the home tariff does for his purchases. He is compelled to face ruinous cheapness when he sells, and artificial dearness when he buys. It can easily be shown that protection increases the cost of transportation. Beyond all other men, our farmers are interested in securing low rates of freight for their bulky products. Though the rates of freight have fallen since 1860 through the competition of railroads, the decrease has not been so marked as it would have been under low tariff. The managers of railroads make no concealment of the fact that they reimburse themselves for their exces- SS PROTECTION A BENEFIT? 169 sive outlay for steel rails and other supplies by the exac- tion of higher freight charges on all the goods they carry. The aggregate of this excess is something enormous. It is of course a direct levy upon the farmer. Protection thus enforces an export tax on the production of our farms, a thing odious to our people, and forbidden by the Con- stitution itself. No farmer will object to paying the legiti- mate cost of transportation to his chosen market ; but that it should be largely increased by the covert device of a so- called protective taxation, is a thing which goads and stings beyond endurance. A protective tariff is a two-edged sword, and it cuts both ways into the resources of the farmer. It compels him to pay too much for what he buys and to accept too little for what he sells. In other words, it raises, under stress of law, the price of what the manufacturer sells, and unnatu- rally cheapens the food which he and his operatives buy. Protection is thus a double disadvantage to the former, and a double advantage to the latter. How long will the farmers patiently submit to this legal emptying of their little reservoirs by two buckets at once? But protectionists assure the farmers that all kinds of manufactured goods are cheaper under high protection than forty years ago under low tariff. This is pointed to with the air of a conqueror. The fact is unquestioned ; but the inference therefrom is utterly fallacious. Protection, as we have seen, could not have been the cause of low prices in manufactured goods. Fabrics, metals, and other protected articles are cheaper than half a century ago, through im- provement in labor-saving machinery, through skill, through better facilities for transportation, and through foreign com- petition. On the other hand, the farmers are informed that all kinds of agricultural products command a better price to-day than under our low tariffs. In confirmation of this 1 70 JS PROTECTION A BENEFIT? they are referred to the "oldest inhabitant," who can re- member when bacon was three cents a pound, and calico was forty cents a yard ; when wheat was thirty-seven cents a bushel, and salt was seven dollars a barrel ; when eggs were three cents a dozen, and thread was twenty cents a spool. All this is not sustained by the facts, when applied to the centres of population. It is true when applied to distant and frontier settlements. That it should be true at all, is not owing to protection, but rather to the fact that railroads have opened an outlet to the world and reduced the cost of transportation, so that the products of the western farms have not been retained at the place of pro- duction till the glut of crops had destroyed their value. But the official statistics of the United States warrant the statement that the price of farm products has not increased in the country's markets under protection. The exact opposite is the fact. The Report of the Bureau of Statis- tics for March, 1884, contains a table showing the average price of farm products in New York, for every year from 1846 to 1883. According to this, the average price of wheat was $1.59 under the Walker Tariff, and $1.48 under the Morrill ; corn was $.77 as against $.66 ; flour was $5.83 as against $4.69 ; wool was $.32 in the first period, and $.28 in the second; timothy seed was $3.12 and $2.62 To heighten the suggestiveness of this comparison, let it be remembered that these low values under protection were from 1861 to 1879 expressed in a depreciated paper cur- rency. A specie valuation would show to the farmer a still wider margin in favor of free trade and against protection. But what is the amount of the farmer's tariff bill ? How much does he pay in addition to the natural price? Ac- cording to the Report of the Bureau of Statistics, the aver- age rate of duty collected on imported dutiable goods is about forty-three and one half per cent. Now, since these fS PROTECTION A BENEFIT? 171 goods were imported, it is evident that the whole amount of the duty was added to their price when sold, otherwise they could not have been sold except at a loss, which would have put an immediate stop to importation. It is also evident that the entire volume of our domestic prod- ucts of the same kind were sold at the same price, else they would have been preferred to the foreign goods, and the latter would have been left without a market. It is not possible that any official record should state in figures the aggregate sum that farmers annually contribute under the stress of protective taxation. But the official data, coupled with the above facts, open the way to a reasonable estimate. According to the census of 1880, the manufactured products of the year amounted to $5,369,579,191. Not more than ten per cent of these were exported, leaving $4,832,621,272 to be consumed at home. Let it be assumed that eighty per cent of these were dutiable goods and twenty per cent on the free list, which was not far from the truth. The dutiable then were $3,866,097,017. The value of dutiable merchandise im- ported for consumption into the United States in 1880 was $419,506,091. Hence the amount of dutiable goods consumed in the United States during the year was $4,285,603,108. Now, since this figure was on an aver- age 43^ per cent in excess of the free-trade price, the amount extorted from our consumers by the tariff was $1,299,120,000. The American farmers and their families consumed one third of these goods. Their tariff bill there- fore was $433,040,000. This is indeed a crude approxi- mation ; but it is far too real to be thought a mere man of straw. How much of this vast treasure was a legitimate assessment to meet the needs of revenue, and how much a premeditated bonus to manufacturers, may be left for indi- vidual judgment to determine. It may, however, be stated 1/2 IS PROTECTION A BENEFIT? as a fact that during the last ten years the average amount collected on imports has been about $200,000,000. If the farmers could be rightly called on for one third of this, we have a balance of $366,374,000. This appears to be the amount extorted from the patient American farmers in excess of the needs of government extravagantly admin- istered. Is it not time that the American farmer should decree with emphasis, not to say explosive force, born of long sufferance and patient endurance of wrong, that such an outrage shall no longer exist? For over half a century protected manufacturers, a mere fraction of our population, aided by political allies, have mystified the farmers, sometimes by rank assertion, sometimes by sophistical pleas, and thus have gained their consent to pay for their supplies prices artificially enhanced, and to sell their produce at prices artificially depressed, in order to enable the said manufacturers to carry on branches of industry which, by their own showing, would otherwise be wholly unprofitable and impossible. It remains to be seen how much longer this large class will consent to be thus ground between these two millstones of wasteful taxation. In two ways have the farmers of the United States made the protective system possible. First, by their votes. It could not exist a month did it not receive either the active support or the tacit toleration of agriculture. Second, by sending their mighty surplus to pay for our imports from Europe. Without this as a prop, the fabric of protection would have crumbled long ago from its own weight. In times of financial stringency and disaster the country has grown into prosperity again chiefly through the productive- ness of agriculture. Do princely manufacturers acknowl- edge their obligation to the plain agriculturist? Should they not cease to look upon him as the proper subject for fS PROTECTION A BENEFIT? 173 a legal plucking? Should they not credit the very exist- ence of their system of taxation to the great fact that so wonderful are the capacities of our soil that our farmers are not broken down under the burdens of taxation which they bear, though they foot one third the bill of legitimate government revenue, and at the same time pass over a magnificent gratuity to our bounty-loving manufacturers? Will the tillers of the soil continue to listen to the sophis- tries of protection when it comes as a pauper to their houses, which for a quarter of a century it has been robbing under legal forms? Will they continue to tolerate a fiscal policy which covertly robs one class for the enrichment of another, and whose only language is that of the horse- leech's daughters, " Give ! give ! give ! " ? CHAPTER XV. THE RELATION OF THE LABORING MAN TO THE PROTECTIVE TARIFF. zfABOR is the producing agency in all wealth. It lies at the base of all industry. The manufac- turing system on both sides of the ocean has shown that labor may be advantageously em- ployed in large factories, constructed for the purpose, and filled with costly machinery and skilful operatives. In every part of the country not exclusively agricultural these operatives constitute an important element of popula- tion ; and it is pertinent to inquire what is the relation of these employes and of all laboring men to the protective system of taxation. Nothing is more familiar in the tariff controversy than the plea of protective journals and speakers, that a high tariff is needed in the interests of American labor. It is a significant fact that protectionists whether in debate, on the stump, writing editorials, or penning " plat- form palaver" do not so often urge protection as being a benefit to manufacturers, as they demand it because it is necessary to secure prosperity to the laborer. How far are these disinterested professions well based, and to what extent are these supposed benefits real ? 7S PROTECTION A BENEFIT? 175 i. It is argued that these benefits come to the laborers chiefly through the increased wages which protection se- cures to them. This subject has been already discussed in the chapter on Wages ; and it is there shown that a high tariff reduces wages both in theory and in fact below the standard prevailing under a low tariff or absolute free trade. Labor enters the market as any other commodity, and the price is governed by the great law of supply and de- mand. It is contrary to the laws of business that men should pay two dollars for a day's labor when they can command it for one. Sure it is, that no manufacturer has yet been found who will thus voluntarily reduce his profits for the sake of realizing his theory. He employs his laborers at the lowest market price, wholly without any regard to how much protection his industry may have re- ceived on the tariff schedule. In this matter of wages pro- tectionists usually begin, proceed, and end with blank asser- tion. They do not attempt to show that in point of fact the workman ever has received, or under the laws of business ever can receive, better wages on account of protection. The facts and figures are all the other way. Until some protectionist writer or orator shall be able to show by something more convincing than assertion that protection raises the wages of labor, the statement will con- tinue to be believed by many that this professed solicitude for the laboring man is really to capture his vote in support of their system, and to divert public attention from the fact that it enriches specified classes at public expense. Until highly protected capitalists can show how protection does, or how it can, raise the rewards of labor, they must still expect themselves to be styled, by a rather intemperate metaphor, "law-protected vampires, sucking blood from every consumer of their products." 176 fS PROTECTION A BENEFIT? 2. Again, the high prices which protection causes bear with peculiar weight upon the poor man and the laborer. The tax does not fall equitably upon people according to their ability to pay, but in the ratio of their purchases and consumption. The poor man pays relatively a much higher tax than the rich man. The laborer spends almost his entire income on the necessaries of life ; but the mil- lionnaire spends but a small portion of his. It follows that, though the latter may have spent a greater sum in dollars, he has made a much smaller sacrifice for the support of the system than the former. John Bright, during the free- trade agitation in England, showed that while the rich man paid only one per cent of his income in protective taxes, the poor man paid, in most cases, twenty per cent of his wages. This state of affairs could easily be shown to exist to-day in every humble home in the United States. It is a necessary operation of the protective machinery. The system can be justly arraigned for oppressing the poor. Carefully compiled statistics show that ninety-five per cent of our people earn less than $500 a year. If all of this be spent in dutiable goods, forty-two per cent of it will go as the tax imposed by protection. It is the aim of all just taxation that it shall bear with equal weight upon all. This can never be said of indirect taxes, and especially protective ones. No other class of our people are so highly taxed as the very ones that should bear the least burden, the poor, the laborer, and the man of modest means. 3. This is not a simple tax. It is, like the tax on raw material, a compound and cumulative one. The im- porter pays the tax and passes the custom-house with his goods. When he sells to the jobber he adds his per cent to make his gross price. When the jobber sells to the wholesaler he adds his per cent to what the goods cost him. So does the wholesaler. So does the retailer. Thus when AS 1 PROTECTION A BENEFIT? 177 the goods reach the consumer, the tax has swelled, like compound interest, much beyond its original volume. All this accumulated burden the final purchaser must bear alone. It is one of the peculiar iniquities of protection that it visits the heaviest assessments upon those who are able to bear only the lightest. It is utterly out of harmony with that theory of equality which lies at the base of the Republic. 4. In another way the wealthy have been favored at the expense of the poor. For several years we had an income- tax in connection with the Morrill Tariff. This being upon persons of good incomes only, in some degree " evened up " the difference in the burdens borne by the rich and the poor. But this tax was removed years ago at the clamors of the wealthy, and the heaviest part of the burden was thrown back upon the shoulders of the poor man and the laborer. 5. There is yet another way in which protection operates inequitably to the oppression of the poor. It is a marked feature of our present tariff that the lowest taxes are placed upon articles of luxury and splendor, and the highest upon necessaries and those made of the commoner and cheaper materials. Thus the millionnaire pays but ten per cent on his diamonds and all kinds of precious stones and on statuary. But the laborer pays seventy-four per cent on his carpets, sixty-eight per cent on his woollen hose and woollen hat, sixty-five per cent on woollen blankets, sixty per cent on thread, and eighty per cent on window glass. It is true that he, like " the curled darling of society " may buy his ottar of roses, oil of bergamot, cardamom seeds, and most kinds of perfumery at absolutely free-trade prices ! What satirical incongruities exist in that inscru- table document, a tariff schedule enacted for protective purposes ! 1 78 IS PROTECTION A BENEFIT? 6. Instead of increasing opportunities for labor, protec- tion makes employment uncertain. Under the stimulus of bounties too many mills are started. Soon a larger volume of goods is produced than the markets will absorb. Then prices fall. Then wages are reduced. Some mills stop and the rest run on short time. Hands are discharged, and strikes, riots, lock-outs, and labor troubles ensue. This is not an imaginary picture. It is being realized every day of the year. In his last State Message President Arthur, himself a reputed protectionist, said : " We have a system of productive establishments more than sufficient to supply our own demands." For the rest, glance over any newspaper. At such times goods are cheap as compared with prosperous times ; but the laboring man, being out of employment, has nothing to buy them with. Steadiness of employment, with established wages, is better for every man than full wages at one time, low wages at another, half time at another, and no employment at all at another. 7. But as has been shown, protection cuts off the foreign market for our manufactured goods. This misfortune falls more heavily upon the workingman than any other class. When the home market will take no more goods, the pro- prietors can protect themselves against loss by cutting wages, by half time, or by closing the mill. One of these three things they are constantly doing. Thus they shift upon the operative a burden which does not belong to him, but which he must patiently endure, since he can neither throw it upon others nor curtail his expenses to meet it. The English operatives of to-day have found out that the world for a market, with free trade, is a hundred per cent better for them than an insular market, with protection. 8. Again, one of the fundamental purposes of protection is to reduce or prevent importation of foreign goods. To the extent to which it really does this, it curtails the market AS PROTECTION A BENEFIT? 179 of foreign goods and throws- foreign operatives out of em- ployment. Many of these wage-workers then take refuge in this country to compete with our owtv workmen. This has been one of the chief causes of the fall of wages under our high tariff. 9. Again, laborers, like farmers, can have no protection. All our traditions declare that this government shall be a refuge for immigrants from all nations. It is our theory that all law-abiding and industrious immigrants help to develop the country and add to the national wealth. The phrase, " protection of American labor," is a very popular one with protectionists. It would convey the impression that in some way not quite obvious, labor is protected by the tariff. But the truth is, that we have absolute free trade in labor, all mankind being welcome to come and engage in any productive employment. We forbid the importa- tion of European goods, but allow the free importation of European laborers. Is there any reason that we should have perfect free trade in labor, and yet not have free trade in the products of labor? Is not the cry, " Protection of American labor ! " a fallacy so ridiculous as to become a satire ? Not only is the native workman left without protection against foreign rivals who come to our shores, but their rivalry is often encouraged by the very men who shout " Protection of labor ! " In recent years it has become a frequent occurrence that foreign laborers are imported under contract at low figures, with the deliberate purpose of giving them employment by displacing native workmen. Thus Hungarians, Italians, Belgians, Chinese, and others have been imported in herds at starving wages by the very men who ring all the changes upon "protection of our labor." All are acquainted with one of the first of these importations, when in 1871 a large force of Chinese 180 JS PROTECTION A BENEFIT? were taken to North Adams, Mass., and employed at low wages to the permanent displacement of the white shoe- makers, who had been forced by reduction of wages into a strike. Let one example suffice : It was testified before the Tariff Commission (see page 1,039) lnat m 1878 the masters of the glass-works at New Albany, Indiana, hear- ing that there were idle glass-workers in Belgium, sent an agent thither, who made a contract for their labor at fifty cents a box, one third the price paid to the native em- ployes. " Three hundred of these people were brought over at the expense of the proprietors, and landed at New Albany ; and without warning, the American workers were given the alternative of a discharge or sixty cents a box. They indignantly refused, and the Belgians were put to work in their places." Is this what is styled "protection of American labor " ? Among the much iterated phrases of protectionist jour- nals and speakers, none is of more frequent recurrence than "pauper labor." This means that the labor of foreign workmen is the toil of paupers, since their wages and their scale of comforts are assumed (in many cases falsely) to be lower than those of our native workmen. It means that the importation of the products of this "pauper labor" would be disastrous both to our manufacturers and our operatives. But it is chiefly a mere rallying cry to terrorize the unthinking, and as a whip to lash back into the party harness those who are about to run away. But the American farm-laborer, as was shown, does com- pete with the " pauper labor " of India and Russia in the markets of Mark Lane and Liverpool. The American operative does compete with the " pauper labor " of all Europe when transatlantic laborers are free to flock hither, or are imported like cattle by protected manufacturers. SS PROTECTION A BENEFIT? l8l The protectionist, on his own showing, entices the plow- man from the farm or the immigrant from Castle Garden, sends him into an iron-mill or thrusts him down into a mine at the lowest wages ever paid in the United States, and then rushes to Washington, asking with indignant sorrow whether an American citizen is to be forced to an equality with Russian felons ! These things show that the manufacturers who are usu- ally men of wealth, and hence need protection the least, are guarded by legislation in all directions, while our work- men, who need it the most, are left unprotected at every point. They show that the solicitude of protectionists for the workman, is either a profession born of ignorance, or else a deliberate attempt at deception. They show that no class of our people are more forgetful of the interests of our wage-workers than the very persons in whose interest protection was adopted, and who are so persistently raising the misleading cry of protection to domestic labor. Of course, protection can not continue to have a legal existence in this country without the approval of the farm- ers and the laborers. For this reason the most industrious efforts have always been made, either to convince these classes that protection is both righteous and beneficial, or to hoodwink them into a blind adoption of its doctrines, or to distract their attention to other issues. Though they are an essential factor on election-day, their judgment is not invoked. The voice of the laborer is never heard in the lobby. He is quite a forgotten party in the scramble for self and for greed. Though laborers are the economic equals of capitalists, their contribution to production being no less important than money, their interests have been systematically ignored by the makers of tariff schedules. There is but little wonder that workingmen who look beneath the mere surface of things, are losing faith in 1 82 IS PROTECTION- A BENEFIT? protection, and are rebelling against the Protective System, as our great-grandfathers did against the Colonial System. They are rapidly learning to do their own thinking, not accepting opinions ready made for their adoption by our theory-builders and metropolitan journals. They are see- ing that under protection manufacturers become more wealthy while they become more impoverished. They are seeing that protection is a misnomer as applied to them, that no restriction is placed on the immigration of Euro- pean workmen, and that English mechanics are returning to their old home because the larger purchasing power of wages there more than counterbalances the higher wages here. As a people, we are seeing more clearly from year to year that the abolition of all monopoly, whether na- tional, state, municipal, corporate, or individual, is a ne- cessary and should be an early step toward that " ideal government in which an injury to one is the concern of all." CHAPTER XVI. HOW FAR DOES PROTECTION BENEFIT THE FAVORED INDUSTRIES ? ROTECTION does benefit the favored producer. To assert that manufacturers are not profited by the system, would be to assert the incredible thought that for whole generations they have advocated and secured the adoption of a scheme of tax- ation which was all the time operating to their injury. The immediate benefits of protection upon those favored by it are so evident that it may easily be shown to be one of the chief causes of the growing disproportion of wealth among the people of this country, the increase of millionaires and paupers. But under all our tariffs, and especially the Morrill, in- fluences have been at work which, in all cases, have greatly reduced the profit of manufacture, and in many cases have forced it below what would have been realized under ab- solute free trade or a revenue tariff. Let us look at some of these influences. It is to be noted, as we proceed, that not one of them lessens or tends to lessen the burdens of the people. They simply nullify protection to its benefi- ciaries without removing any of the objectionable features of the system heretofore adduced. 1 84 IS PROTECTION A BENEFIT? 1. Protection utterly fails, as was shown, to protect the manufacturer against foreign importation, though this is one of the chief purposes of the system. If a tariff were placed so high in relation to home prices as to be prohibitory, the Government would receive no revenue. No one, therefore, has asked for such a thing, though on some articles it has been craftily and covertly obtained. Protection asks only that producers in this country be placed, as to prices, on terms of equality with the foreign producer. As has been shown, when the price is raised to this height the foreign goods may still pay the duty and enter our markets as largely and as easily as they could under absolute free trade. This is the very thing that foreign goods have been doing for many a year, and the tariff has no tendency to keep them out. The Report of the Bureau of Statistics for any year shows that importation of the very classes of goods named in our highest schedules is increasing from year to year more rapidly than our population. It would be easy to mention many striking examples of this, to show what a loose grip we have upon our own market. 2. While not protecting the home market, protection cuts off our manufacturers from the foreign one. This has elsewhere been shown. Only about five per cent of our ex- ports are protected commodities, and only twelve per cent are the products of manufacture, the rest being petroleum and the yields of agriculture. No protected manufacturer lays any claim to the foreign market. In fact, the very theory of protection is based upon our confessed inability to enter it. The result is an overproduction of our mills and factories, which, in turn, is the chief cause of strikes, lock- outs, short hours, reduction in wages, and depression of trade. Forced and bankrupt sales of goods do not relieve our congested markets, since the home supply is not thus re- IS PROTECTION A BENEFIT? 185 duced. The goods truly change owners, but they go to the very quarters relied upon for future sales. The British manufacturer relieves any temporary glut of products by sending his surplus as far from his island as possible. But we, not having access to outside markets, have no allevia- tion but to stop production. In the light of all our experience in these things it would seem to be as plain as the figures on a blackboard, that, by debarring us from other markets, protection not only in- flicts starvation wages and diminished employment upon operatives, but is of very dubious advantage to manufac- turers themselves. 3. Even within what is left of the home market, the pro- fit of the manufacturer is reduced by the tariff on raw material. The only way to offset this is by higher rates on the finished goods. Thus a tariff on wool means a yet higher tax on woollen fabrics ; that, in turn, means a still higher rate on clothing. Thus protection is a system of accumulated burdens to the people in order that the favored ones may get their bounty. No one realizes this influence half so well as protected manufacturers themselves, and it constitutes, in their opin- ion, a strong objection to our scheme of national taxa- tion. All readers of the Report of the Tariff Commission must have been impressed with the continual complaints made by heavily protected manufacturers against this very thing. In reading their elaborate and carefully prepared papers before the Commission, many of them pointedly de- clared that the antecedent taxes which they were obliged to pay on their materials reduced their profits to a mini- mum, in spite of their protection. Some of them said it would be better for them to have no protection at all, than to be thus handicapped ; and others said that this tax, and not high wages, is what obliges them to sell at a high price. 1 86 IS PROTECTION A BENEFIT? As an example, J. Schoenhof, a large woollen manufac- turer of New York, used the following language : " Manu- facturers of finished goods are not protected. They are worse than protected. Equal protection means protection to no one. You can not protect the raw-material man and the maker of finished goods at the same time. High-priced material means ruin to the manufacturer." Though confess- ing that his industry was protected by a tax of one hundred per cent, Mr. Schoenhof deliberately stated that it would be better for him to enter the market on a plane of absolute free trade. James Means, the large manufacturer of boots and shoes, Boston, has issued a circular to his operatives showing how protection is harmful both to his interest and theirs. Many further examples could be given. These complaints are well founded, and no assertion is more true in the whole doctrine of free exchange. Much that has been conferred by one section of the tariff has been taken away by another. The manufacturer has purchased the right to shear his countrymen like sheep by conceding to his fellow- shearers the right for them to shear him. By cutting off the supply of cheap material, protection has rendered it as impossible for our manufac- turers to make cheap goods as it was for the Israelites to make bricks without straw. 4. Many manufacturing industries can not have any protection, and yet they are compelled to pay a protective tax on the materials used by them. To illustrate : No agricultural implement is mentioned in any tariff schedule, and its maker could get no protection even if it were, since our farmers do not buy the foreign article. Yet the maker pays a duty on the lumber, iron, steel, paint, used by him. A large number of our industries are thus taxed without return benefits, as house-building, furniture-mak- ing, smithing of all kinds, founders, and the makers of all 7S PROTECTION A BENEFIT? 187 kinds of machines. It is not strange that important classes of makers even of material products (the only kind the tariff attempts to protect) should clamor, as some of them are clamoring, for a lowering of the tariff bars. 5. Our tax on raw material imported has had a tendency to reject crude products from our markets and make them cheaper in foreign lands. Thus protection here confers a benefit upon the European manufacturer, enabling him to compete in our market still more successfully than he could even under free trade. 6. The excessive profits which protection gives to manu- factures are likely soon to be absorbed into the general condition of the business and in large degree disappear. That is to say, an excessive margin of profits induces ex- travagant expenditures, wasteful processes, and the use of imperfect machinery. Only the man who is confronted with hot competition and small profits is kept fully abreast of the times. Prosperity makes the possessor prodigal and negligent. Secure a man against competition, and you remove the incentive to progress. Under these circumstan- ces, only a portion of the tax appears as profits, though the burden bears with undiminished weight upon all who con- sume. This is another way in which protection nullifies itself. 7. By raising the price of protected articles the system injures the manufacturer, since it reduces the demand for his goods in his own market. Cheapness always stimulates consumption ; and it is a mistake to assume that the home demand is sated when prices are high. A fall in the price of goods, within certain limits, quickens sales in greater ra- tio than the fall. " Small profits and quick sales," is a wise business maxim. Even if the whole of the tax were abso- lute profit to the producer, as it is loss to the consumer, a true business acuteness would lead him voluntarily to relin- I 88 SS PROTECTION A BENEFIT? quish a part of it, in order that he might swell his sales in still larger ratio, and thus increase the volume of his profits. 8. There is to-day a keener competition between our own manufacturers than they ever had with those of England, keener than they would now have under even absolute free trade. The factories of the East fear those of the West, those of the South fear those of the North, far more than they fear those of Europe. Combinations and " trusts " can not last. They are but makeshifts. Nothing will finally an- swer the purpose of our great producers but a clearing of the race-course for the freest competition with all the world. 9. From the position assumed by protectionists, their system, while entailing loss upon the masses, is without gain to the manufacturers. It is the theory that the pro- tection should be equal to the advantages enjoyed by the foreign manufacturer in excess of the domestic producer. The idea of a legal bonus is rejected, and they strenuously insist that the tariff-tax does nothing more than to place our manufacturers on an even footing with their foreign compet- itors. If this is correct, it is evident that the tax paid by consumers is without any profit to the manufacturer, serving merely to make his business possible. The loss is as abso- lute as though a highwayman should rob a traveller, and then throw the money into the sea. We may take " judgment by confession " of protectionists themselves that the system is a positive evil to one class and no benefit to the other. If, however, this claim is untrue, as would be inferred from the outcry for government recognition, they then be- come the beneficiaries of national taxation, and are receiv- ing a pure gratuity from the earnings of the people, for which they do not have even a theoretical justification to adduce. Which horn of this dilemma will they take ? By clamoring for protection the manufacturer tacitly admits, and often confesses in words, that his industry is a AS 1 PROTECTION A BENEFIT? 189 weakling that can not stand alone. Thus he is voted a gra- tuity from the pockets of the people. But in some manner it turns to ashes in his grasp. It is his apple of Sodom. Nothing is more patent to every-day observers than that when hard times strike the country the protected industries are the first to succumb. They suddenly collapse like a house of cards, or tumble one at a time like a row of bricks. One of the most striking paradoxes of our day is the fact that it is seriously argued that protection is the cause of our prosperity, while our most highly encouraged manufacturers are nearly all the time claiming to be in dis- tress. While our bounty-loving industries are demanding more protection, and protesting that bankruptcy is at the door unless they obtain it, our untariffed industries go straight ahead, paying the highest of wages and sending their products to all parts of the world. The theory adopted by protectionists is that it should cover every industry. This is equitable. If one may claim it, surely every other one may do the same. But this necessarily reduces protection to a nullity. In proportion as tariffs are broad, or cover every industry, they defeat themselves. By such a course our industries are like the old man and his five sons, who traded coats all day among themselves. At night each one had the same garment as in the morning. Or, to change the illustration, the attempt we have been making for so long to protect all classes is as absurd as it would be for the county treasurer to pay to every man a rebate of forty per cent on his taxes. Again, if protection were really a protector of one nation against others, all nations would adopt it. Thus each one would secure the maximum of benefit to itself. But this would involve an absurdity. Each one would grow rich by robbing all the rest. Instead of proving of advantage to any, it would prove to be an injury to all. The universal IS PROTECTION A BENEFIT? adoption of protection by the nations could but tend to universal impoverishment, besides being the cause of com- mercial hostility, jealousies, and war. Manufacturers are themselves beginning to see and con- fess that they are the victims of a mistaken policy. One evidence of this is the statement of the men themselves. Another is the fact that some of our heaviest manufacturing firms have established branch houses in England, in order to be enabled to compete in the foreign market. Another evidence is the fact that the men who are most dissatisfied with the provisions of any tariff are the very ones whose industries have been most carefully looked after. Among the several hundred persons who appeared before the Tariff Commission the reader will scarcely find one who declared himself satisfied in all respects with the pro- visions the existing tariff made for his welfare. There is no class of our people who see so clearly as our manufacturers, that our home-market is over-supplied, that it is invaded by foreigners, and that distant markets can not be reached. Experience far from sweet has taught some of them that while half measures may injure them, relief will come when they can participate in open competition with those free-trade countries which are rapidly monopolizing the exchanges of the world. Our shielded industries have good reason to cry out, and some of them are crying out, to be delivered from their friends. From this point of view it seems not improbable that the abolition of pro- tection will, at no distant day, be demanded by manufac- turers themselves. Thus the logic of events is slowly and painfully giving our people a lesson. The march of facts is teaching the truth of science, that all legal interference with the natural laws of business can but work open injury to the many, while it offers but a delusive promise of advantage to the few. CHAPTER XVII. A GLANCE AT SOME OF OUR PROTECTED INDUSTRIES. OME of the influences and effects of protec- tion are perhaps most clearly shown by a study of the system in its relation to specified indus- tries. Let us now see, in the light of official statistics and other facts, what has been its record during twenty-five years in some of our leading branches of manufacture. IRON AND STEEL. Iron is a staple material of this age. It is necessary to civilization. It ought to be made as cheap as possible to all our people. Instead of this, its price has been artifici- ally raised by an import tax on iron in all its forms. It would seem that " geographical protection " would be pro- tection enough. But the expense of loading the iron on ships, transporting it three thousand miles to our ports and unloading it here, was not deemed to give a sufficient encouragement to our capitalists. Hence Congress was importuned for a legal bonus in addition. On pig iron the duty for years has been $7 a ton. Under this stimulus blast furnaces sprung up all over the country. At first the duty was added to the foreign price, and the SS PROTECTION A BENEFIT? owners rapidly grew rich. But their capacity of production so far exceeded the requirements of the country, that dur- ing the depression following the panic of 1873, prices de- clined, and over half the furnaces were closed and the employe's turned adrift. The artificial stimulation of this industry was thus unfortunate for itself and damaging to the country. On the sudden return of activity in the iron trade in 1879, a ^ tn ' s was changed. The duty of $7 a ton was again added to the price of the foreign article on a production of 2,301,215 tons in that year. The importation was 87,576 tons. Thus, during 1879, the treasury of the United States received a revenue of $613,032 from pig iron, and the treas- ury of the Pennsylvania iron maker a bounty of $16,108,505, a ratio of $i for the government to $26 for the protected manufacturer. This startling disproportion is not an un- usual occurrence. A fact in our tariff on wood screws serves to illus- trate the operation of protection in a large number of other branches of manufacture. The duty is from six to twelve cents a pound, which is so high as to be entirely prohibitive, the article not being imported at all. The result has been to give a bounty to the owners of our two establishments making screws, at the expense of all the people. The manufacture of Bessemer steel rails for railroads fur- nishes some suggestive facts. Previous to 1870, the pro- tective duty was forty-five per cent ad valorem. In that year a combination of the steel companies, foreseeing that the decline in the price of rails would be permanent, and had not then reached its limit, demanded of Congress a specific tariff. At that particular time the ad valorem duty amounted to $28 a ton ; hence that figure was fixed as the specific tax. It continued so till 1883. As the price con- tinued to fall, the new tax gave the manufacturers a much fS PROTECTION A BENEFIT? 193 higher rate of profit than the ad valorem had given. Dur- ing several of those thirteen years the difference between the domestic and the English price was the full amount of the duty. The average difference was $24.44. Prices were kept at high tide, and our producers had a monopoly. It was a brilliant realization of the aims of protection ; but it is observable that protectionists never " point with pride " to this record. During the eleven years between 1870 and 1881, there were laid in the United States 4,279,831 tons of steel rails, of which 3,660,134 tons were of domestic, and 619,697 of foreign manufacture. Since the price was raised by the tariff an average of $24.44, it follows that during that time the Government received a revenue of $17,351,516, while the home manufacturers received a gratuity amounting to $105,385,079, a sum six times as large as the revenue. Thus protection accomplished its purpose of securing as much bounty as possible, while reducing the revenue to a minimum. True, we have had a surplus of revenue for several years. Instead of this being a contradiction of the above deduc- tion, it does but emphasize most strongly the evils of the protective system. How heavy must be the burdens of the people when they are compelled by law to pay six dollars in bounty for every one dollar they get into the treasury, which, nevertheless, is so full as to receive yearly $100,000,000 in excess of our extravagant expenditures ! It would baffle the ingenuity of man to devise a more wasteful scheme of national revenue than that which protection contemplates and enforces. WOOL AND WOOLLENS. The history of our experience under our tariff legislation on wool is a dismal recital. It has been unfortunate for all parties. 13 194 fs PROTECTION A BENEFIT? That our growers of wool have not been benefited is shown by two facts : i. Their product has not commanded so high a price on an average as it did under the revenue tariff of 1857. In fact, for years in succession, wool has brought lower prices than have been realized since it ceased to be a branch of household manufacture. 2. The number of sheep owned has steadily decreased, except in the great grazing States, as Texas and New Mexico. The European and Australian wool-growers have not prostrated, and never can prostrate, the business of the American wool-grower. But the exact adaptation of our great grazing areas and the ranches in the West to the sheep-raising industry, has taken it out of the hands of farmers in Vermont, Pennsylvania, and Ohio, in spite of all that protective legislation could do to prevent it. That the woollen manufacturers have not had a bonanza at their command, is shown by two facts : i . According to the census returns of 1870 and 1880, their business shows a smaller per cent of profit than any other of the leading branches of domestic industry. 2. For the last fifteen years more of their mills have been standing idle or have been converted to other uses than is the case in any other of our protected manufactures. Though for a quarter of a century we have been protecting the woollen industry in all its forms, it was never in so depressed a condition as it has been in during nearly all of those years ; and there probably never was so large a ratio of our people who are clothed in woollen goods of foreign manufacture as at the present time. That the woollen operatives have not profited is also shown by two facts : i. According to the census of 1860, the average annual wages paid in the woollen mills of the country was $359.26, while in 1880 it was $298.67, a reduction of seventeen per cent. 2. While receiving di- fS PROTECTION A BENEFIT? 195 minished wages, they have been compelled to pay on all their purchases of woollen fabric an increased price of from thirty to one hundred and fifty per cent, as a direct result of the high tariff on that article, not to mention their other purchases. That the American people as consumers of woollen goods have not been benefited, is shown by the fact that under the Morrill Tariff they pay more for their cloths, car- pets, and blankets, than the people of any other nation in Europe or America. If this were not true, importation must have ceased, which has not been the case. But so nearly has the domestic price been kept at the prohibitive point, that in some kinds of goods the imports have been insignificant. Hence the treasury gets the smallest possible amount of revenue, and the people pay the greatest possi- ble amount of bounty to the manufacturer. Thus in 1881 the treasury received, as import tax on woollen blankets, a meagre $2,000, while the people paid, in consequence of the artificial increase in price, probably a thousand times that sum in the same year. The tariff on wool and woollens has done nothing to render us commercially independent of foreign nations. The importation of wools in 1880 was 128,000,000 pounds, while we exported only 191,551. We imported $33,613,000 in manufactured woollen goods, and exported to the value of only $216,576. Thus we imported six hundred and sixty-six times as much raw material, and one hundred and fifty-five times as much finished product, as we exported. And yet the air is full of much talk about the tariff secur- ing us the home market, and about the restriction of foreign competition. The high tariff is in part responsible for a fraudulent feature in the woollen manufacture, the use of shoddy and spurious fibres. Owing in large degree to the duty on 196 SS PROTECTION A BENEFIT? raw wool, we have learned to mix shoddy and cotton with wool to an extent and with a degree of skill that can not be surpassed. In the census year our manufacturers of woollen goods used, according to their own figures, 169,000,000 pounds of wool, 55,000,000 pounds of shoddy, and 81,000,000 pounds of cotton, that is, three fourths of a pound of false fibre with every pound of genuine. This gives color to the charge that in all articles susceptible of adulteration the quality becomes poorer as the tariff on material becomes higher. Thus a premium is put upon dis- honesty, and the business of honorable manufacture is at a discount. As one remedy for this, pull down the barriers. COTTON. When Columbus saw the natives at San Salvador, the women were clothed in coats of cotton. From that day to this, the growth and manufacture of the fibre has been an industry in America. It has never owed its existence to legislation. In 1816 the power-looms of Mr. Lowell, at Waltham, succeeded so well that the proprietors stated to Congress that they were making a satisfactory profit and did not need any further encouragement. It is a historical fact that the protection of cotton manufacture was adopted in response to the demands of those who were shiftless in their processes, and those who adhered to the use of inferior machinery or hand-labor. The growth of the in- dustry has been such, under all changes of duty, as to demonstrate its ability to stand alone without legislative aid. In 1824 Webster said, " I consider the cotton manufacture not only to have reached but to have passed the point of competition." Cotton is the typical product of the United States. With the cotton fields at our doors, with the best machinery in SS PROTECTION A BENEFIT? 197 our mills, and with intelligent operatives within call, there has never been the remotest danger from disastrous foreign competition. As to wages, our operatives in cotton are paid, as has been shown, even less than the average of English workmen. These easy circumstances have taken away the spur to our enterprise. With a home market naturally ours, we have been content therewith, and have done little to enter foreign ones in a branch of manufacture in which we ought to surpass the world. It is true we do export some cotton goods, but not so much as we did twenty-five years ago, while we import more than we did then. Our greatest exportation in any one year was less than 150,000,000 yards, while year by year England ex- ports thirty- three times as much. In 1880 we congratulated ourselves on an exportation of raw cotton to the amount of $239,000,000 ; but during the same year Great Britain exported finished cotton goods to the value of $377,000,000. The major part of this might have been ours, had we not closed foreign markets against ourselves. After seventy years of " fostering our native industries," we are convert- ing only one fourth of our cotton yield into the products of our looms, while we export the other three fourths to the mills of Manchester and the continent. How shall our country secure what is our natural and rightful heritage, a participation in this great volume of business? Not by the device misnamed protection. We have been continuously trying it at a steady loss for a quarter of a century. The whole of our tariff legislation respecting cotton, in recent years, has proceeded upon the strange mistake that it would make us industrially inde- pendent of other nations, when in fact we have always been so. This was a disastrous blunder. It has hindered our industrial expansion more than figures or words can tell. It has beaten us back from markets which we might have IQ8 SS PROTECTION A BENEFIT? entered and made our own long ago. Cotton may yet be made one of the kings of the factory, as it has long been the king on the plantation. SUGAR. The tax on imported sugar is now (1888) three and a half cents a pound. In 1882 it was two and a half cents. In that year the people of the United States consumed 2,185,000,000 pounds of sugar of which ninety-five per cent was imported, and five per cent produced in the States. The whole amount consumed was raised in price artificially by the entire amount of the duty, else not a pound could have been imported. Thus our people paid $54,625,000 under stress of law in addition to what they would have paid under absolute free trade. If this were levied for purposes of revenue, it would be a very successful tariff, since nineteen twentieths of it goes into the national treasury ; but as a part of a protective system it is most wasteful and unwise, since it compels the people to pay a tax of $20, not to secure revenue, but in order to get $i into the pockets of the Louisiana sugar-makers. We paid in one year a tax of fifty-four millions for the privilege of preventing Cuba and the other Antilles from selling to us at low figures the sugar we must have, and can not make. This is twice as much as we should have to pay Spain for the island of Cuba in fee- simple ! Such legislation is nothing short of an outrage upon a patient people. Must sixty million Americans cut themselves off from the benefits of sub-tropical cheapness in an article of daily necessity in every house, in order that a gratuity may be passed over to a few men in one of our States, who have converted the finest cotton-lands on the planet into third-rate sugar plantations? It appears that they must. 75" PROTECTION A BENEFIT? 199 If this were taken by the open demand of a direct tax, nothing could withstand the storm which would arise ; but when it is spirited away through the expensive and waste- ful mechanism of a protective duty, we placidly congratulate ourselves that we are helping to develop the industries of the country. Like the foolish ostrich, which hides its head and thinks itself safe, we pay millions of disguised and use- less taxes and think we are growing richer. If our sugar- makers must receive their gratuity, it would be nineteen times as cheap to pay them from the treasury direct. We have a treaty of reciprocity with the Sandwich Islands, by which their sugar is admitted into the United States duty free. The most of this importation about 70,000,000 pounds a year goes to the Pacific States, and is there refined and consumed. As a result, sugar is cheaper in San Francisco than in Boston. If the question of revenue is to be ignored, or if it is a matter of secondary importance (as protection asserts), reciprocity in sugar is a public advantage. Is it not about time that we should adopt reciprocal free trade with Cuba in the interests of our eastern and central sections? If revenue is to take care of itself, let the statesmen at Washington pull down the barriers, and cease to nurse a sickly industry which a few men have been induced to pursue through the seduction of a government bounty. LUMBER. We have long had for protective purposes a tax on for- eign lumber of $2 per thousand feet. When it is remem- bered that we are a lumber-exporting country, such a tax becomes an absurdity on its face. But the exportation is confined to the Pacific, Gulf, and South Atlantic States. We import lumber from our Canadian frontier, and hence the duty is laid to encourage the lumbermen of Michigan, 20O IS PROTECTION A BENEFIT? Wisconsin, and Minnesota. The tariff, therefore, is purely local in its supposed benefits, and is confined to only a few individuals in that section, while it adds to the expense of all who own or live in a house made wholly or in part of wood. The bounty has averaged about $50,000,000 a year. But the chief iniquity of the tax is not the money in- volved. It was laid for no other purpose, as protectionists declare, than to encourage the production of lumber, the stripping of our pine lands and forest areas as quickly as possible. While, therefore, many of the States were main- taining forestry associations ; while the school- children in many States were observing annually an "Arbor Day" for the planting and protection of trees ; while the Govern- ment of the United States itself has on its statute books the Timber Culture Act, providing for the donation of a farm to every one who will plant and protect upon the public domain a grove of forest trees, the Congress of the United States is doing all that legislation can do to promote the destruction of our timbered areas. To offer a bounty to persons planting trees upon the public lands, and at the same time to pay a premium to those who destroy our tim- ber, is such a solemn legislative farce as to strike with awe both gods and men. This is all in the face of the well-known facts that the destruction of forests reduces rainfall and causes droughts at one season and leads to devastating freshets at another, and that it destroys the equability of the temperature, induc- ing excessive heat in summer and killing cold in winter. Thus by the short-sighted policy of voting, under the name of protection, a bounty to our lumbermen which they have never needed, Congress for years past has been doing its utmost, in effect, to reduce us to the desolate condition of oriental lands, Palmyra, Persepolis, Baalbec, cities JS PROTECTION A BENEFIT? 2OI whose territories were once fruitful with cereals, the vine, and olives ; or to the condition of the valley of the Eu- phrates, where once was the Garden of Eden, but which is now, through the denudation of its forest areas, a " parched and calcined desolation." Can Congress have forgotten, like the monks of Dunwald in the legends of the Rhine, that we can not raise a crop of oaks as quickly as a crop of corn ? If Government must act the paternal part at all, how infi- nitely wiser would it be to pay a bounty on the importation of lumber, so as to preserve our heritage of forest for the use of those who shall come after us ! Let all nations have free access to our markets, in order that they may furnish us the lumber with which we are now supplying our- selves at an absolutely fatal cost. COPPER. Copper is a product of Mexico, Chili, and some other foreign countries. Of the 50,655,140 pounds produced in the United States in 1880, the State of Michigan yielded 45,830,262 pounds, of which one company, the Calumet and Hecla Copper Company, produced one half. Under the Morrill Tariff the tax was originally five per cent ad valorem, but it was afterward raised to five cents a pound, which was so far prohibitory that in 1877 the imports amounted to only $30, from which the treasury received a revenue of $11.50. Thus the copper producers have mo- nopolized the home market. Under the revision of 1883 the duty is four cents a pound. This rate is maintained for the benefit of a few men on the south shore of Lake Superior. Copper is a necessary constituent of brass, which is used in every home in the land. The duty bears heavily upon the manufacture of copper and brass goods, prevents their exportation, and raises their price to all our people. The 2O2 IS PROTECTION A BENEFIT? tax of three cents a pound on imported copper ore has closed all but two of the smelting furnaces of the Atlantic coast, its effect being to prostrate one industry while it stimulates and subsidizes another. It was witnessed before the Tariff Commission 1 that our copper producers, in order to protect the market and main- tain the price at 19 cents a pound, sold 6,000,000 pounds of copper delivered free of freight at Havre, France, at 16 cents. It is inexcusable that men, under cover of a pro- tective tariff, should ship their goods, freight free, four thousand miles, and sell them at prices fifteen per cent lower than they will sell to their own countrymen. This case has numerous parallels. For years the salt com- panies of Michigan and New York have been selling their product, freight paid, in Canada for a less price than the American citizen could buy it in Saginaw and Syracuse. Such are the thanks of a protected industry to the people who by their votes have protected it ! Such a fact shows that the tax has been wholly unneces- sary by the confession of the copper producers themselves. The same thing is also shown by three facts : first, that the Michigan copper is in the form of ingots, which need no smelting, while the foreign copper is in the form of ores, both carbonates and sulphides, which makes an expensive process of reduction a necessity ; second, that our mines are nearly all above water and of easy access, while the foreign ones are deep and expensive to open ; third, that our mines, being on the border of a great lake, are accessible to water navigation to all parts of the world, while most of the foreign ones are far inland or in mountainous regions. In many branches of our manufactures, even if protection is necessary, the " geographical protection " is quite suffi- cient without the legislative. 1 See Report, p. 1392. IS PROTECTION A BENEFIT? 203 Under the circumstances, it is not strange that prosperity has attended our copper industry. It is not a source of wonder that 80,000 shares of watered stock in one of our copper companies, which cost the owners but $15, were soon selling at $175, and producing quarterly dividends of $5 a share, a return of one hundred and thirty-three per cent annually. NICKEL. In 1869 Mr. Adams, of Pennsylvania, discovered a pro- cess by which nickel-plating could be done cheaply. Like the discovery of the Bessemer process in steel, this gave a great impetus to the demand for nickel and to the produc- tion of it. In order to protect this new industry the duty was almost immediately raised to thirty cents a pound, which rate was continued till 1883. For whose benefit? For the benefit of a single mine-owner at Lancaster, Penn- sylvania. The duty was, and still is, so high as to be en- tirely prohibitive ; and nine tenths of it having been added to the foreign price to make the American price, it has yielded enormous profits to the producer, there being but one large smelter in America. As in so many other of our protected industries, we have for years not only been sub- sidizing a single firm at the expense of all our people who use nickel-plate, but by that act we have so raised the price of nickel to our manufacturers of plated wares, that they can not compete for the foreign market. The largest con- sumer of nickel in this country the Meriden Britannia Company has been forced to establish a factory in Canada, in order to sell their goods in Europe. This is an example of the way in which the short-sighted policy of protection restricts a large manufacture by stimulating a small one. 204 IS PROTECTION A BENEFIT! GLASS. Glass is one of our oldest manufactures, having been in a prosperous state before the Revolution. Under the Morrill Tariff the duty on window glass has averaged about seventy per cent. Importation has not ceased ; and, therefore, every person who owns or rents a house in the United States has been paying the glass-makers all the subsidy the law demanded. This is the nearest thing to taxing sun- light itself. For years the duty on plate glass has averaged one hun- dred and three per cent, and, as French and German plate has been all the time imported, there is no escape from the conclusion that a glass worth $50 has been costing in our market a trifle over $100. It was witnessed before the Tariff Commission by N. T. De Pauw, manager of the glass-works of W. C. De Pauw of New Albany, Indiana, 1 that that firm manufactures two thirds of all the plate glass made in the United States, that they have a capital of $1,300,000 invested, and that up to 1879 a l ss f $600,000 had been incurred. The inquiry arises in every thoughtful mind, Is there any solid business prudence in trying to legislate into prosperity an industry which, while receiving a bonus of one hundred per cent of its production, had nevertheless sunk in the unprofitable venture nearly one half of its capital? Has it really come to that pass in this country that any visionary business adventurer may embark in an enterprise forbidden by climate, or by location, or by other natural condition, or by the tastes and habits of the people, and yet feel war- ranted in the expectation that the Government will come to his aid by taxing sixty millions of people to help him out of the mire? It has. Let us all thank our stars of good 1 See Report, p. 937. IS PROTECTION A BENEFIT? 205 fortune that Nature placed no tin mines in the United States ; for if there be found but one, the whole nation will be taxed in order to enrich the owner. This is not an exaggeration. Borax and boracic acid were on the free list as not being American products till it was discovered that Nature had provided one rich deposit in Nevada. At once the enterprising owner rushed to Washington demand- ing and obtaining protection against " pauper borax ! " Again, the only chrome mines yet found in the country belong to one family, who have forestalled the consumers of chrome by getting it taken from the free list and placed on the protected. Thus the more Nature blesses a country the more it is blasted by legislation. Better for our people if these deposits had lain a secret in the earth till " the last syllable of recorded time ! " According to the theory of protection this paradox becomes a fact, that the more a country is blessed by Nature, the more it must be loaded down by protective taxes ; and the poorer its natural re- sources, the less does it need protection. Let us rejoice that in the diversity of her gifts, Nature so far overlooked America that there are at least a few industries which are not only difficult but physically impossible ! CHAPTER XVIII. SOME FALLACIES OF THE PROTECTIONIST SCHOOL. RUTH is consistent with itself. In all its wide range there is no absurdity or contradiction. In the economic world, as in the mathematical, scientific, or moral, the test of every statement is harmony with the known body of truth. If it agree thereto, it is accredited as fact. If it contradict, it is branded as error. Let us try some of the claims of pro- tectionists by this standard. I. Protectionists assure us that /'/ is humiliating and un- patriotic to leave the United States commercially dependent on Europe, and to send to foreign lands for what we need. Does this mean that we should reject a profitable trade and embrace a losing one, in order to gratify our ambition ? If so, it is not pertinent to this inquiry. If not, it is the exact idea of the Chinese and the Japanese, who have thought so for a thousand years. To-day they should be the wealthiest nations on the planet. Protection loses sight of the fact, which is so evident as to be humdrum and platitude, that the true interests of every nation, as of every man, is to both buy and sell where it can deal to the best advantage, be it at home or abroad. All men do this when not under the dictation of Government. Can it be IS PROTECTION A BENEFIT? 2O/ true of men as individuals, and yet false of them in the million ? But there is really no such a thing as complete industrial independence. Is it any the less to the interests of Liver- pool to take our wheat, than it is ours to take the cutlery of Sheffield or the cloth of Leeds ? There is not now, and there never has been, a great nation which could produce all that civilized life required. The Eskimo and the Pata- gonian are the only men on the western hemisphere who can proclaim their independence of their neighbors. The more highly enlightened men become, the more diversified are their wants and the greater their commercial depend- ence. Here is a truth as compact as epigram : " Real independence rests upon the inter-dependence of nations." If we must, by the very limitations of physical endowment, rely upon Brazil for coffee, China for tea, and England for tin, is there any law of business prudence really practised among freely acting men anywhere in the world, which would decree that we should even make the attempt to foster by legislation a difficult and nearly impossible indus- try, as the raising of bananas in Dakota, or the breeding of fur- bearing animals in Texas? But does it not inevitably follow that if the attempt to establish an impossible indus- try by law must result in total loss, the attempt to establish a difficult and unnatural one must result in waste and public disadvantage? II. Closely related to this is the argument expressed thus : 77 is a wise policy to encourage all industries by legislation, to the end that we may develop our resources and have diver- sity of occupation. This is fallacious in three respects : First. It may be patriotic, but it is not economical, to pay a large price for a home article, when we can get a foreign one at a small price. Every man practises this, 2O8 IS PROTECTION A BENEFIT? whether it be in harmony with his theories or in contradic- tion of them. Why should not the nation do the same? John Roach, the ship-builder, exclaimed before the Tariff Commission, " Shall we buy iron from the mines four thousand miles away, and leave the ore undeveloped in our own inexhaustible mountains ! " Undoubtedly, if it can be done with less labor, skill, capital, time, in a word, if it be cheaper. Do it on the same correct prin- ciple which leads a city deeply underlaid with the best of coal to neglect the opening of mines, but to send for its fuel fifty miles away where the deposit crops out to the surface, transportation being less expensive than difficult mining. Second. It is fallacious in assuming that our resources are practically without limit. " Inexhaustible mountains " is a happy phrase to express the protectionist idea. But it is misleading. We have but one borax mine. To develop it in the protective sense means its probable exhaustion within a decade. We have had the richest gold fields in either hemisphere. But we have so developed this mining industry that surface washings were exhausted twenty years ago, the richest veins soon followed, and now only deep and hydraulic mining is left. Shall we act the part of the improvident man who killed his goose that laid the golden eggs? Will the men who shall follow us in the distant future the lineal and rightful heirs of this age thank us for the unnatural and forced development of the boun- ties Nature has conferred upon us in trust for them as much as in fee simple for ourselves? Third. It is sophistical in assuming that unless legis- lation should interfere, industries will not spring up. The truth is rather that instead of taxes being necessary to de- velop manufactures, neither taxation nor prohibition can prevent them from leaping into activity. Diversity of occu- pation is in human nature itself, and needs no legislative fS PROTECTION A BENEFIT? 209 spur. Our own history teaches it. We had dozens of well-established industries in this country, using the best machinery known to the times, many years before the Revolution, not only without legislative aid, but in spite of all that Parliament could do to prevent them. If an in- dustry does not exist, the fact shows that it can not exist at that time and place except at a loss. To commission legis- lation to create it, would be as disastrous as to issue a license to a tyro in surgery to run amuck in the streets with edged tools. To let an industry lie undeveloped until such time as it will grow into a healthy existence, is far wiser than to galvanize it into a sickly activity by legislation. III. One of the most common arguments of protectionists may be formulated thus : It is a wise policy so to regulate and equalize the facilities of production between our country and foreign ones, that they may have no advantage over us in our markets. A protective duty equal to the difference between the foreign and the domestic price does nothing more than secure free competition. Such a statement is as full of fallacy as an egg is of albumen. First. It is based on the assumption that the chief ob- ject is to win a race, and not to confer a benefit. It is illogical to base an argument upon a metaphor. If two men are to run a foot-race on a wager, it is quite proper that they should run on the same race-course, during the same hour, and be similarly clothed with regard to impedi- ments, so as to place them on an exact equality, except as to muscular power and skill in racing. But if utility be the object to be attained, if a man is bleeding to death, would we not despatch for the surgeon the swiftest runner, by the most direct route and with sole reference to speed ? 2IO IS PROTECTION A BENEFIT? So in this question, the end to be reached is to secure the well-being of the nation, not to plan a perfectly balanced and ideal commercial race. Second. But this claim is based on the further assumption that we ought, economically, to produce for ourselves, in- stead of buying abroad, everything we need, or at least everything whose production is possible. Protection thus becomes a drag-net, whose purpose is to bring everything to the surface. It is logic running wild. We produce coffee not at all ; tea, with incredible difficulty : silk, at great disadvantage ; sugar, but not so well as Cuba ; lace, but not so cheaply as France ; iron, but not so advanta- geously as England ; wheat, excellently ; and cotton, petro- leum, and Indian corn, the best on the globe. Where shall we draw the protective line? Protectionists say, on the ragged edge which divides the barely possible from the utterly impossible. Their theory declares that duties should be increased as the difficulty in production increases, and that this rising climax of taxes should be continued until the difficult loses itself in the impossible. Third. Protection is a man-made device for removing or counteracting the special facilities which other nations may have. But if it is successful, it removes the very foun- dations of trade' itself. Streams flow because the beds are inclined : make them level and you have a stagnant pond. Trade exists because men and nations in their individual capacity have certain advantages over others. Take away this special advantage, and the wheels of commerce will no longer turn. Commercial stagnation and distress must ensue. That trade continues with foreign nations in spite of all that legislation can do to prevent it, only shows that the elastic forces of Nature can not be whipped into harness by the clumsy devices of man. Fourth. Even if equality in the facilities of production 7S PROTECTION A BENEFIT? 211 were a desirable thing, legislation is utterly powerless to effect it. Nature has largely fixed the endowments and capacities of nations. What is the effect of the law-made attempts to contravene Nature in this matter of special endowment ? Let us illustrate : Law may make a banana imported from Vera Cruz sell for as much as one produced in the hot-house in Detroit ; but it can never take away the natural advantages of Mexico, nor confer them upon Mich- igan. It can only equalize the price. How does it do this? At Vera Cruz each banana can be produced, say, at a cost of one cent ; but at Detroit at a cost of fifty cents. The Government " equalizes our facilities " in the produc- tion of bananas by laying a tax of forty-nine cents on the Mexican fruit. What is the result? (a) The price of fruit, both foreign and domestic, is raised for all consumers to fifty cents, the natural price in Michigan. () It is quite as easy for Vera Cruz to compete with Detroit as it was be- fore, since its price is " equalized " with Michigan. Hence the seller of Vera Cruz can sell in Detroit at least to as much profit as at home. Under these circumstances there is nothing to protect our domestic market ; but the " floods " of foreign fruit pour in. High duty is no barrier so long as prices remain equalized, (c) So long as the price is kept at full tide fifty cents the national treasury receives forty-nine cents on every tropical banana consumed here, and hence the channels of revenue are full. ( average expenses, $1,616. At Vicksburg, Miss., average receipts, $75 ; average expenses, $689. At York, Me., re- ceipts, $3.02 ; expenses, $445. At Saco, Me., the total duty received during the ten years was $56.22, during which time $9,032 was paid as the cost of collection, 1 60 times the revenue. But even this is not the entire record. At the following custom-houses not a single dollar has been received in customs during the last ten years, while the revenue posts were steadily maintained at the average annual cost as given : Annapolis, Md., at an average cost of $2,032 a year ; Burlington, N. J., $296 ; Eastern District of Maryland, $3>33 6 j Cherrystone, Va., $2,996 ; Little Egg Harbor, N. J., $3,386; Sag Harbor, N. Y., $1,426; Southern Oregon, $2,642. Several of the customs districts and ports of delivery named above have been established since the enactment of the Morrill Tariff. All of them have been steadily main- tained from year to year till the present hour. Not a single one of them, at this writing, has been abolished. Do we not have occasion to remember the trite classical reference, " guarding against Scylla and plunging into 238 JS PROTECTIOA? A BENEFIT? Charybdis"? Do we not at once think of the homely aphorism, " saving at the spigot but wasting at the bung " ? Such "penny wisdom and pound foolishness " might occur under any tariff. It has occurred only under protection. It comes from the supposed necessity of guarding an open coast, not to collect revenue, but to enforce protection. VIII. For a quarter of a century, protection has been teaching our people, and especially the laborers, that wages can be regulated, and should be regulated, by law. Analyze those doctrines of protection that are intended for wage- earners, and they will resolve themselves into the proposi- tion that legislation can make the rewards of labor high. This is the very teaching upon which communism rests If our laboring people have accepted this lesson, it is not strange that discontent and riots should follow the fall- ing wages and diminished employment which protection causes. If protection is a true doctrine, the enforced idle- ness, the poverty, the famine of operatives, is far more than a misfortune. It is a crime and an outrage. What won- der that, accepting this doctrine and smarting under wrongs which they have no power to correct, the employe's of pro- tected industries should rise in riot ! If Government has the power to regulate their wages, but should refuse to exercise it, or should use it for their oppression, it is not strange that, like Samson, they should push with the strength of a giant to destroy their temple. In this day when labor is restive and public discontent is emphasizing itself by violent deeds in European coun- tries, communism in France, socialism in Germany, nihil- ism in Russia, the United States should try no hazardous experiments. This is the era of dynamite. Like the nations of Europe we also may find to our horror that even republics are not at an infinite remove from this 7S PROTECTION A BENEFIT? 239 dreadful agent of revolution. It is to-day a pertinent in- quiry, How far is our fiscal policy responsible for the growing disquietude of our laboring classes, and for the threatening cloud of revolution which already rises, like a man's hand, in our horizon? IX. One of the surprising features of the talk of protec- tionists is their boast that their system of taxation has been so far successful that we are now able to export our pro- ducts largely to foreign countries. They assure us that we are now sending our steel rails to Canada in competition with the English ; that we sell our watches in Switzerland in competition with the products of Neuchatel and Geneva ; that we are exporting our sewing machines to Europe ; that there is a profitable sale of our agricultural implements in South America and Australia ; and that we are shipping our cotton fabrics into all ports, and meeting Manchester in her ancient and favorite markets. Protectionists continue to ring all the changes upon this boast. In point of fact, it is true as to a very few of our industries only. But what does it really mean ? First. It implies that exportation is highly desirable, and that the sufficiency of " the home market " is a delu- sion and a fallacy. This is the very thing that free-traders have always asserted and the theory of protection has al- ways denied. Second. It shows that the supreme effort of protection- ists is to get an entrance into foreign markets, and yet save protection. In the very nature of things, their effort must fail. This age has never witnessed a more sublime absur- dity than the uniform custom of clamoring for protection in political platforms and legislating in Congress to secure it, and yet demanding at the same moment a more enlarged trade with foreign countries. 240 SS PROTECTION A BENEFIT? Third. It necessarily involves the confession that man- ufacturers are willing to accept from a foreign purchaser a lower price than they will accept from their own country- men. Nearly all our manufactured exports are selling in the foreign country at a smaller figure than the market price here. Do not the exporters give a slap in the face to the very men whose votes gave them their bonus? Fourth. It makes the assertion that though the effect of protection is to prevent exports, we are yet surmounting this objection to the system. It says that after a quarter of a century we are beginning to reap the benefits of free trade while we yet carry the burdens of protection. It is a shout of hallelujah because we are now getting what we might have had all these years. Fifth. The boast is a dangerous boomerang in the hands of the protectionists. Like the arrows of the Parthians, it returns upon their own heads. If it is true that protection has enabled us to export our goods to foreign markets, the system has made itself no longer necessary. It has borne its fruit and is ready to die. Let the fact be established that we can export our finished products to the outlying world, and the chief argumentative defences of protection are gone. Its friends are left naked to their enemies. X. In these years protection is bearing what we shall hope is its last and maturest fruit, the forced limitation of production. The steps to this end are plain : First. Those selfishly interested in the promotion of a given industry constitute a clamorous and influential con- gressional lobby in the committee rooms and on the floor, dictating to members the course legislation shall take. Second. Through log-rolling combination of votes the measure passes, inspired more by this dictation than by the public necessities. IS PROTECTION A BENEFIT? 241 Third. The promise of excessive profits thrills the busi- ness into activity all over the country, and labor is called from those pursuits naturally profitable into the one now made artificially so. Fourth. Production is increased beyond the public demand, but the high prices which prevail prevent exporta- tion to other markets, and our own is congested with pro- ducts the people will not buy at the inflated prices. Fifth. Depression follows activity. All revenue is cut off. Prices fall to find markets, and wages are reduced to leave the margin of profits intact. Sixth. Laborers become restive and go out on strikes. Proprietors order lock-outs or run on short time. The one class combine to resist falling wages by strikes, and the other to prevent falling prices by limiting production. These are the natural, necessary fruits of a system of favor- itism miscalled protection. Over-production is one of the loudest cries of our time ; and yet we have the same kind of destitution among the people as though the country were as sterile as Sahara or as bleak as Labrador. With capaci- ties for much larger consumption and with endless desires unsatisfied, millions of people are unable to reach the good things stored up in the bursting storehouses of production. When the Dutch had control of the Moluccas it was their custom to burn a portion of their spices, so as to con- trol the price in Europe, and thus secure such profits as were satisfactory. We resort to the less wasteful method of holding production in check. By a concerted move- ment, by trusts and combinations, in all parts of the coun- try, consumption remains unchecked, while production is reduced or has ceased. Thus the plethora is relieved, a scarcity is created, and prices are raised or sustained to the injury of all consumers. The mills start again when it is seen that satisfactory profits can be realized. 16 242 S-S PROTECTION A BENEFIT? Congress exercised the function of limiting importation, but combinations of our own citizens for selfish ends pre- sume to graduate and manipulate production. Manufac- turers who were modest enough in the past to ask only the exclusion of 'foreign goods and the monopoly of our mar- ket, have now the boldness to escape from the effects of the system they invoked by a wrong to their countrymen. In one decade they ask the votes of the people to make their business possible ; in the next they make a deliberate thrust at the man who deposited the ballot. Competition can not beat prices so low in any legitimate business as to reduce profits below a reasonable figure. It appears, however, that those so long accustomed to exces- sive profits are not to be satisfied with a modest gain. It is bad enough for the Government to dictate prices by a protective tariff, but that selfish men should do so by call- ing a halt in production, is intolerable. It would seem that those things so vital to the welfare of the country as prices, wages, employment, production, and the interests of the consuming millions, are to be manipulated with that ease with which the puppet is made to respond to the com- mands of the magician, or moves are made with " the titular dignitaries of the chessboard." XL The framers of the Constitution "builded better than they knew." Not to have said a word in our funda- mental law which could give any sanction to protection, and at the same time to have secured absolute free trade throughout all the land, this shows the profoundest political and economic wisdom. The United States is, in fact, the great free-trade nation of the world ideal and absolute free trade among thirty-eight States and eleven Territories. Large States, like New York, trade beneficially and freely with small ones, like Connecticut ; old ones, like fS PROTECTION A BENEFIT? 243 Massachusetts, with new ones, like Nebraska ; States rely- ing on one industry, like Nevada, with those of diversified occupations, like Ohio ; States pursuing different industries, as Maine and Louisiana ; States pursuing the same indus- tries, as Illinois and Iowa. The wisdom and benefits of this provision have never been questioned. Even protectionists admire this inter- state free trade. In 1 884 a prominent presidential candi- date, in his letter of acceptance, while praising the protective policy, used this strangely paradoxical language : " In addition to the advantages which the American people enjoy from protection against foreign competition, they enjoy the advantages of absolute free trade over a larger area and with a greater population than any other nation." Can any one suggest a single truly valid reason why free trade is such a blessing between the States, but such a calamity between the nations ? Is there a single plea made in favor of national protection that can not be applied with equal or stronger force in favor of State protection? If the United States suffer loss from the " invasion " of the iron products of England, the furnaces of Missouri suffer loss from the " invasion " of the iron products of Pennsylvania. If America be benefited by the exclusion of silk from France, Connecticut will be benefited by the exclusion of the silk from New Jersey. Illinois should forbid the wheat from Minnesota, and rejoice when the explosion of mill- dust destroys the giant mills at Minneapolis. Iowa should veto the transport of lead ore across the river at Galena. The pine lumber from Michigan " inundates " Indiana, to the stagnation of her business in oak lumber. Colorado should prohibit Kansas corn, lest the raising of grain on fertile prairies should ruin her system of agriculture by means of irrigation. If it is necessary for New England to institute a rigid quarantine against old England, is it not 244 fs PROTECTION A BENEFIT? still more necessary for the " infant " industries of the West to raise a wall against the established industries of the East? If an illustration is needed to show how a fortu- nately situated nation can prostrate the industries of one less fortunate, there is small occasion to look among foreign countries. No stronger can be adduced than between the States of the Union. But if it is conceded, as all protec- tionists do concede, that our States have not only met this competition of their neighbors without loss, but have actu- ally grown rich because of it, how small should be our fear of the competition of countries beyond the sea, and how cordially should we welcome their exchanges in order to enrich ourselves ! It has been argued that interstate free trade is beneficial because the States are neighbors, while international free trade is harmful, because the parties are strangers and for- eigners. What does this mean? It implies that Maine may trade freely with California, four thousand miles away, but that Detroit must not exchange goods across the river with Windsor, half a mile distant, nor Buffalo across the lake with Toronto. The people of the State of New York may trade freely across the Hudson with their neighbors of New Jersey, but not across the St. Lawrence with the foreigners of Canada. But the chief and almost the only plea advanced for in- terstate free trade and international protection, is that in the one case the States are parts of the same government, and in the other case they are different governments. But this is stating a fact, not giving a reason. How can the mere truth that there is a bond of political connection in the one case and none in the other, be a good reason why systems of trade so directly contradictory should prevail in the same government ? Does trade have geographical lines ? Would it not be just as reasonable to draw lines of dis- 7S PROTECTION A BENEFIT! 245 tinction upon race, color, language, or religion? The mere accident that Maine and California both send their repre- sentatives to Washington can have no relevancy in a purely commercial and economic question like this. If they are benefited by unrestricted trade to-day, they would be ben- efited no less if the political tie were severed to-morrow. No one has ever tried to give a truly valid reason why free trade with Texas has been a public benefit since its annex- ation in 1845, but a public calamity while it was yet a part of Mexico. President Grant wished to buy San Domingo in order that we might have the benefits of free trade with it. Has it not occurred to thousands of minds that we might have all these benefits, and yet keep our money? Is the mere fact of political connection such a necessity that we should pay millions to secure open trade with the Black Republic? Why not write a treaty and vote its adoption ? It has been seriously proposed that we should pay thirty million dollars for Cuba, in order that we may get its sugar without paying duty upon it. Will some political philosopher at Washington or elsewhere rise and explain how the competition of Cuban sugar will ruin Louisiana until the moment when the deed in fee simple to that island is signed and sealed, but that it would prove a bless- ing after that little formality? If international protection be a benefit, so is interstate protection ; and the States under the Confederation in set- ting up custom-houses along their little frontiers were more logical than the States under the Constitution. Consistency would require that we should either abandon national pro- tection or adopt interstate exclusion. When Napoleon sub- jected half of Western Europe to his sway, he abolished the custom-houses which stood on the frontiers of the States thus conquered. But after Waterloo, when his em- pire fell apart like a rope of sand, the toll-barriers shot up 246 SS PROTECTION A BENEFIT? again along all the borders of the petty principalities. As parts of a coherent empire, they could afford to reap the benefits of free trade ; but as separate sovereignties, they felt compelled to sacrifice its blessings in order to injure their neighbors, or to hand over gratuities to a few of their citizens. We are no wiser than they. Having tasted under the Confederation the bitterness of interstate protection, and having verified under the Con- stitution the benefits of unfettered commerce among our- selves, let us carry our experience to the logical limit of adopting on behalf of the general advantage as large a degree of free trade with all the nations of the earth as the public revenues will permit. XII. But he that objects to existing institutions may, with the utmost propriety, be called upon to suggest, at least in a general way, something which would be better. Free-traders are ready to meet this demand. The problem of taxation is simple enough in its general principles, but one of the most complicated in its details. It is, however, greatly simplified the moment legislation has decided to abandon the paternal function and the attempt to foster any branch of industry by special enactment. Free-traders therefore insist, first, that protection as a practice shall be discarded, and that all industries be left on that plane where most of them must of necessity stand, that of self-help and independence. Second. That fiscal legislation shall look, so far as taxa- tion is concerned, solely to the getting of money into the treasury to meet the legitimate expenses of the Government. No dollar shall be exacted for any other purpose. Third. That the taxes on imports shall be relatively low, both with a view of making the burdens of the people fS PROTECTION A BENEFIT? 247 as light as possible, and also of creating only sufficient revenues. Fourth. That the tariff-taxes shall be placed upon com- paratively a few articles only, so as to disturb the natural range of prices as slightly as possible. Fifth. That all compound, minimum, and specific duties shall be abolished, and ad valorem duties substituted, with the view of divesting the tariff of its complexity and those devices which may afford a convenient shelter for fraud, evasion, and jobbery. Sixth. That the duty shall be so imposed as to operate with impartiality throughout the Union, discriminating neither in favor of nor against any section or any interest. Seventh. That the taxes shall be placed upon articles not produced, or not produced to much extent in this country ; to the end that all the artificial increase in price which necessarily results from a tariff may pass into the treasury and none of it into private tills. Eighth. That an excise, or internal tax, be judiciously laid on those articles of domestic production which have received an incidental protection, to the end that they may stand upon an even plane of advantage with all other industries. Ninth. That the highest duties be levied upon articles of luxury and upon those of the more expensive qualities, and that the lowest duties be laid upon articles of necessity and upon those of coarser and commoner qualities, to the end that both the rich and the poor may be required, so far as is possible, to contribute revenue to the Government in proportion to the benefits which they receive from it, and to their respective abilities. Tenth. That taxes be so reduced from time to time that no vast surplus shall be allowed to accumulate in the treas- ury ; and that collections shall not long precede disburse- 248 fS PROTECTION A BENEFIT? ments, to the end that the people may be the guardians of their own money, that extravagant appropriations may cease, and that legislative jobbery may be discouraged. Of course this is radical reform. It is the contrary of protection at every point. Most free-traders do not demand that it shall be adopted with that convulsing suddenness which marked the abolition of protection in England. It is hoped that it may not be necessary in America, as it was in Great Britain, to resort to a fiscal revolution in order to avoid a social one. Perhaps it may not be best to destroy the evils of protection by one radical stroke of legislation. If it shall be made to appear with clearness that a tempo- rizing policy is best for the nation, free-traders demand only that the reform shall be adopted as rapidly as the country can adjust itself to the changed conditions. It is worthy of remark that the reform as contemplated by free-traders agrees, so far as tariff duties can be made to agree, with the four fundamental maxims of taxation laid down by Adam Smith, and which have become classical. First, that all persons should contribute to the support of the Government in proportion to their respective abilities. Second, that the amount of the tax should be known, def- inite, and not arbitrary, incalculable, or changeable. Third, that every tax shall be levied in the manner and at the time most convenient for payment. Fourth, that the tax shall exceed by as small an amount as possible the sum which actually reaches the treasury. The correctness of these principles has never been disputed. They are, in fact, merely the formulation of universal opinions, as are the Ten Commandments and the Golden Rule. CHAPTER XX. PLEAS BEFORE THE COMMITTEE ON WAYS AND MEANS AN EXTRAVAGANZA. HE Chairman called the Committee to order, and then instructed the Clerk to read the minutes of the last meeting. He proceeded as follows : WASHINGTON, Feb. 20, 188 . The Committee of the House on Ways and Means met pursuant to adjournment. All the members were present, except Messrs. Favorite, Equity, and Partial. On motion of Mr. Flood, the committee took up the special order for the evening, being the consideration of House File No. 1,001, "A Bill for an Act to Revise the Tariff, to Abolish Poverty, and to Promote Universal Wealth." The Committee being informed that several gentlemen wished to present pleas on the Bill, it was ordered, on mo- tion of Mr. Subsidy, that they be heard at this sitting. Mr. Stannvir was then introduced, who spoke as follows : Honorable Gentlemen of the Committee : I gratefully appreciate the opportunity accorded me of addressing you at a time when a measure so intimately affecting the welfare of the country is resting in your hands. A national Act for 250 /S PROTECTION A BENEFIT? the effective revision of the tariff, so as to usher in the millennium of individual and universal wealth, is so impera- tively demanded, and withal a matter of such difficulty, that it will, doubtless, claim your maturest deliberation. I am the sole proprietor of a tin mine in the State of Utopia, and I appear before you to make a few representa- tions respecting my industry. My tin mine is the only one in the United States, and it is but just discovered. I am now about developing an infant industry. As the law now stands, tin in the ore, in bars, in blocks, in grains, and in pigs, is imported free of duty from Cornwall, Banca, Ma- lacca, and Australia. The result is that the metal is ruin- ously low in price, and it is utterly impossible that I should compete with the old and well-established mines of Wales. They are now flooding this country with their foreign prod- ucts to the extent of $16,000,000 a year. It is the true policy to protect every one of our indus- tries from destructive foreign competition, and especially infant ones as mine. My mine is not rich either in the quality or in the quantity of its ores. It is also far inland, difficult of access, and continually flooded with water. As a result, while the English tin is sold to-day in our markets at eight cents a pound, my product can not be put on sale at less than ninety-four cents a pound. I therefore ask that an import tax of eighty-six cents be placed on the foreign article. This will enable me to compete on terms of perfect equality. America can not afford to be depend- ent upon our ancient enemy for an article of such prime necessity as tin. If my petition be objected to on the ground that it would have the effect to raise the price of tin to all purchasers more than one thousand per cent, it might be replied that in addition to the development of our " inexhaustible mountains," I shall give employment to more than a dozen fS PROTECTION A BENEFIT? 2$ I pack-mules, and a score of men, who are now engaged in the overdone business of raising wheat and corn. Besides this, the growth of my business will give a stimulus to the manufacture of engines, pick-axes, and blasting-powder. A village will grow up about the base of the mountain where all is now a wilderness. This will afford a market at home for all the wheat, corn, and live stock which the farmers of the valley can produce on their rocky and irrigated fields. Without this, their products would be nearly worthless. It is plainly to the interest of the country to encourage my industry. The increased cost of tin is a mere bagatelle in comparison with the public advantage. If there is any gentleman of the Committee who might be led to oppose the granting of my prayer on the ground that the protection asked for would give me excessive profits, I beg him to remember two facts : First, that even if this should be the case " the money will remain in the country," and thus the aggregate wealth will not be changed. Second, that, in fact, I will not be enriched at all. The tax no more than represents the disadvantages attending my undeveloped infant industry. It simply places me on the same level of advantage that is enjoyed by the design- ing foreigners who are flooding our markets. As before remarked, the consumption of tin in this coun- try is about $16,000,000 annually. If my industry shall meet with proper encouragement, I expect to be able to displace three-fourths of this importation by my own prod- ucts. The market value of the tin of annual consumption will then amount to $188,000,000, which would be a gain of $i 72,000,000 yearly in the national wealth. An industry which can present such figures as these may well claim to be of national importance. Trusting that you will find my appeal to be in the line of the public benefit, I thank you. 252 IS PROTECTION A BENEFIT? Thereupon Mr. Pinxit, of Chromopolis, was introduced, who said : Gentlemen : I come to address your honorable body in behalf of an ancient industry. I am a portrait painter, and I represent the Cosmic Art Society. Painting as a fine art was a well-developed industry more than two thousand years ago. It is not an infant. But we are to-day subjected to an intolerable competition from the prevalence of an upstart device, known as photography. By pressing into service the light of the sun and the laws of optics, and facts known in chemistry in a word, by some hocus-pocus certain designing men have been able to produce superior portraits at prices so ruinously low that the very existence of our industry, like that of Demetrius the silversmith, is endangered. You will perceive that it is impossible for us to compete when these laws of Nature are forced into harness to work against us. We therefore ask that you will recommend to Congress that a duty of one thousand per cent be levied upon all cameras, lenses, and chemicals imported for use in the new and hateful business known as photography ; and that a stamp duty of $10 be placed upon each sun-made portrait. These measures will so raise the cost of producing these now cheap goods, that our venerable industry will have scope to breathe again. When Benjamin West was painting portraits a century ago, the country was small and poor ; but now, through the influence of our industry, the nation has become the might- iest on earth. We think that, pointing to such a record, we may with modesty demand the ear of Congress. There are at least fifteen million people in the United States who need portraits. All this business was once ours ; and if prices can be sufficiently raised, it will be ours again. We invoke the aid of legislation against an fS PROTECTION A BENEFIT? 253 upstart business, which has raised the absurd claim of being art. Mr. Hortiman, being then introduced, addressed the Committee as follows : Gentlemen of the Committee : I am a gardener engaged in supplying fruits and vegetables to the markets of Phila- delphia. My farm is on the Delaware, ten miles above the city. I represent twenty gardeners in my vicinity. Our business is now in a very depressed condition by reason of the ruinous competition to which we are sub- jected. Early in the season, by the expensive use of hot- houses and other modern appliances, we would be able to sell the products of our gardens at fair profits, but for the fact that the railroads import early vegetables from Rich- mond, Charleston, and Savannah, where the sun does the work of our hot-beds. This competition of the southern gardeners in our domestic market is prostrating to us, es- pecially when ships and railroads are in collusion with them to effect the destruction of our industry. The prices of our goods are ruinously low at a time when we should be realizing a handsome profit. The foreign cabbages sell at 5 cents, while we find it impossible so early in the season to produce them for less than 50 cents ; asparagus, which costs us 70 cents a bunch, retails at 10 ; early beets, which cost us 60 cents a bunch, sell for 8 ; and strawberries, on which we would lose money at $1.00 a quart, are abundant at 15 cents. This foreign invasion continues with fresh arrivals every morning, until the middle of the season, when we are left in the possession of a market so reduced in price as to afford us nothing more than a reasonable reward for our labor and capital. Near the latter end of the season, when we might expect better prices to prevail, the same grades 254 IS PROTECTION' A BENEFIT? of fruits and vegetables begin to pour in upon our market in a prostrating flood from New York, Albany, and Mon- treal, so that the end of the season is even worse than the beginning. Now we can not compete with the sun. Foreigners have the advantage over us, and they are apparently determined to crush out our industry. We, therefore, ask of you in the revision of the tariff now pending to place for the en- couragement of our industry a tax of seven hundred per cent upon all fruits and vegetables imported into Pennsyl- vania. We shall then be able to reap the profits to which our importance as metropolitan gardeners entitle us. We are aware that the objection may arise that Congress has no power to protect the industries of one State against those of another State. This is a mere technicality. Pro- tection is wise in principle, and you should have the bravery to carry it out to its logical end. The early vegeta- bles of Virginia and the Carolinas are a thousand times as hateful and injurious to us as the fruits of Mexico, Panama, and South America. Tropical lands can not harm us ; but the competition of our own countrymen is intolerable. We hope you will not be misled by the sophistries of free- traders, who may represent that the one million people in the city of Philadelphia will be wronged by the rise in prices which would result from the imposition of the tax which we ask. The facts are all the other way. First, since prices will be higher, the increment will be an addi- tion to the wealth of the city. Second, since the outlying cities are excluded, the money will remain at home. Third, a much larger amount of money will move in our vegetable market than now does, which, overflowing into other branches of business, will give activity to all. Fourth, the extreme difficulty of raising vegetables by hot-house cul- ture will make a demand for labor, and we shall give 7S PROTECTION A BENEFIT? 255 profitable employment to two or three hundred men who are now no better employed than in mining coal, cutting lumber, or even operating railroads and ships which bring the odious southern products to our markets. Besides these considerations, it may be said that all patriotic people will cheerfully submit, and esteem it a privi- lege to pay eight times the natural price of their vegetables, when they know that by so doing they are maintaining home enterprise and developing domestic resources. Relying upon the inherent justness of our appeal, I wish you good-night. Mr. Theacult then came forward and said : Gentlemen, I am the proprietor of a tea plantation in Tennessee. Heretofore China and Japan have had a monopoly in the tea trade of the world. America has been dependent upon these heathen celestials. Such dependence is repug- nant to our theories of government ; and we can not pre- serve our national respect so long as we tamely submit to a foreign monopoly. With a view of conferring a benefit upon my country by enabling us to throw off this foreign dependence, I visited China two years ago. I studied carefully the climate, chemically analyzed the soil, and observed the nature of the tea plant and the manner of its cultivation there. I am now able to announce that on my plantation on the moun- tain sides of east Tennessee, by the use of certain chemical fertilizers, and by the distribution of hot-air reservoirs and fountains of water at proper intervals over my farm, I have so closely imitated the soil and climate of China, that tea may henceforth be called an American production. But on account of the pauper labor of China, the foreign article may be laid down in our markets at fifty cents a 256 fS PROTECTION A BENEFIT? pound, while in consequence of the higher price of labor and the expensive machinery necessary for the creation of suitable climatic conditions, together with the natural pre- cariousness of the industry in this country, tea can not be produced in Tennessee for less than $50.00 a pound. I therefore petition that a specific tax of $49.50 per pound be laid on foreign tea which may be imported. You will readily see that it is quite impossible for me to compete with the pauper and heathen goods which flood our markets. The granting of my petition will result in great advantage to the working men of the country, since I can pay them better wages than I can possibly pay now. If the public welfare should demand it, I can import a ship-load of native and experienced laborers direct from the tea-farms of China. A pauper laborer can not breathe in America. Thus I shall do my part in promoting that diversity of occupation upon which our prosperity is based. I agree with you that the producer is the man who should have the attention of legislation. He adds to the national wealth. The exchanger is an enemy of his country, since he imports the competing products, and thus does his utmost to prostrate our domestic industries. The consumer is "not worthy of attention. His sole function is to destroy what others have produced. Do not be solicitous for the tea-drinkers. They will never see the tax. Even if they do, they will not care for "a cheap tea-table," if they can but help along a new industry. They will approve of any policy which liberates us from commercial dependence upon the pagan Mongolians. You will perceive that it is imperatively demanded that the price of tea be raised to fifty dollars a pound, since ^-fo of its cost represents the labor and the difficulty which are necessary to overcome the climatic disadvantages here, but 7S PROTECTION A BENEFIT? 257 which in China are free gifts of nature. A large amount of labor will thus be created, which is one of the good aims of the protective system. It is also the very business of pro- tection to overcome this natural disadvantage by requiring consumers to place producers upon the same level of ad- vantage as is enjoyed by the foreigner. Under your fostering care tea culture will soon become a flourishing industry on the mountain sides of Tennessee, and prosperity will smile where is now a howling wilder- ness. Mr. Lucifact, a capitalist of Minnesota, of the firm of Lucifact, Thermogen, & Co., was then introduced, who enlisted close attention to the following plea : Gentlemen : The Bill upon which you are now sitting is one of vital importance to the country; and I come to speak of a matter in which the entire people is interested. That distinguished philosopher, Dean Swift, suggested in his day that it would be an economy of national importance if some cheap method could be discovered of extracting sunbeams from cucumbers. It is, as you are aware, a scientific fact that large amounts of light and heat are stored up in this vegetable during the summer. The problem is so to extract and utilize these forces that they may be made to minister to the health and comfort of our people in the winter and during the night. It was reserved for this decade to witness the solution of this great problem. It is with some feelings of triumph and of congratulation toward the country that I am now able to announce that, aided by the present advanced state of science, I have invented and constructed machinery which will accomplish this great desideratum. A giant stock company has been formed at St. Paul for the prosecution of the enterprise. The work is being 17 258 fS PROTECTION A BENEFIT 1 pushed with the utmost vigor. The buildings will cover an area of 120 acres, and cost $17,000,000. In addition to this, the company owns 10,000,000 acres of fine garden lands on the Rio Grande, in Texas. This is now being put in cultivation for the reception of our mammoth crop of cucumbers next season. Thus, as a true policy and economy would dictate, we shall produce the cucumbers where we shall have the benefits of cheap tropical heat and light, and shall extract their desirable qualities at a point in the northern latitudes where they will be greatly needed during ten months of the year. It will thus be seen that our enterprise, from the very start, will give employment to a large number of laborers, both skilled and unskilled, in the erection of our buildings and the cultivation of our land. Thousands of brick-makers, stone-masons, carpenters, many saw-mills, plow factories, and hardware manufactories, will feel the stimulus created by our great enterprise. The $150,000,000 we shall spend on our plant, will be so much added to the national wealth, and will contribute largely to the national prosperity. When we shall be able to start our factories, the transportation of the thousands of train-loads and ship-loads of cucumbers from Texas to St. Paul, will give employment to several thousand men. Our entire pay-rolls will, as we estimate, contain the names of 200,000 employe's, and our monthly disbursements of wages will amount to about $5,000,000. Besides all this, our industry will soon give such a stimulus to activities of all other kinds, that the population of St. Paul will soon reach 1,000,000, which urban population will afford a home market for all the wheat which the farms of Minnesota can produce and the mills of Minneapolis grind. This will save the ruinous waste of transportation to the Liverpool market. You will thus see that our indus- IS PROTECTION A BENEFIT? 259 try is one of large proportions and may justly ask recog- nition from the Government. But if this were the whole truth, there would be no oc- casion that we should appear before you. We are subjected to the powerful competition of a foreign rival, who inun- dates this country with his cheap light and heat, and threat- ens to render our products nearly valueless, and thus to prostrate our infant industry by his intolerable rivalry. This competitor is the sun. Without legislative help, we shall be utterly ruined. His products are poured into America in such floods that the whole land is inundated by his light and warmed by his heat. But what is still worse, is the fact that this foreign light and heat are so cheap as to be per- fectly paralyzing to our enterprise. In truth, these products of the sun are a pure gratuity to the American people. He has such hostile designs against us, that cheapness has been "put to the limit." But, gentlemen, this furnishes the ground for our strongest argument. You wisely protect steel rails when one third of the price is a gratuity from England to our people, and you tell them they shall not receive the gift. You wisely forbid foreign sugar, in which 50 per cent is a gratuity which the sun has conferred upon Cuba. You forbid tea, in which 94 per cent is a gratuity which the sun confers upon China. You forbid coffee, in which 99 per cent is a gratuity con- ferred by the sun upon Brazil. You are not logical if you stop short of the limit, and refuse to forbid the entrance of this foreign light and heat when 100 per cent of it is a gratuity from the sun. If you check the importation of woollen fabrics, iron products, and other foreign manufactures because they are to some extent in the nature of a gratuitous gift, and, in fact, in the very proportion as their price approaches zero, how inconsistent it would be to permit the sun to flood and 26O fS PROTECTION A BENEFIT? inundate the land with his products, whose price during the whole day and for every day is not only near zero, but at zero ! According to our system of political economy, the less the amount of the foreign gratuity the more able are our domestic industries to take care of themselves ; and the greater the gratuity, the more is there a necessity for gov- ernment aid. It is true that this odious foreign rival does not at all times harass us with his presence. During each night we might hope that there would be a demand for our products. But at these times we are obliged to encounter other com- petitors, such as gas companies, the Standard Oil Company, and that latest and most hateful of devices, the electric light. Nay, mother earth herself is in league against us. She belches forth her natural gas, millions of cubic feet, day and night. You will not think it strange that we should demand from you and from Congress that protection which is the birthright of every American citizen. In the matter of heat, we have a rival only less powerful than the sun in coal mines, forests, and peat-beds. From present indications it appears that our highly valuable in- dustry will be reduced to complete stagnation before it has been six months in operation. Our petition, therefore, is that you will enact that a tax of $20 be placed upon every window kept without blinds, that you rebuke the earth for her spontaneous outbursts, and that you proclaim a solemn interdict against the sun, as King Canute, of England, did against the tide of the ocean. Further, we demand that in arranging the schedule of duties in the new Bill for the Promotion of Universal Wealth, that you insert a provision for a tax of 1500 per cent ad valorem and $8,000 specific upon the products of all gas companies, oil companies, electric-light companies, coal mines, and peat-beds, to the end that our promising SS PROTECTION A BENEFIT? 26 1 industry may feel the fostering hand of legislation. With all seriousness we put to you this alternative : Will you prefer that the nation shall have its industries prostrated by a gratuitous production and consumption of light and heat ; or will you choose that it shall feel in all its avenues of activity the stimulus of laborious production? Several other gentlemen were present and desired an audience. The Committee is informed that one of the parties desires a little temporary encouragement for his new industry of breeding seals on the Staked Plain in New Mexico. Another would present a plea for a tax on the pauper ostrich feathers from the 'Sahara Desert, in order to foster his ostrich farm in the Everglades of Florida. Another would ask for protection from Cuban fruits in aid of his orange groves on the inexhaustible prairies of Dakota. Another would ask aid in his infant enterprise in Alaska the manufacture of nectar by the distillation of the Aurora Borealis. On motion of Mr. Audiphil the Committee adjourned to meet at the usual hour on February 25th to hear the additional pleas. SWING A. GAVEL, Chairman. A. STEELE PENN, Secretary. CHAPTER XXI. THE MORAL ASPECTS OF THE ISSUE. jjCONOMIC considerations are not the only ones involved in the controversy between protec- tionists and free-traders. The question has a strong moral complexion. Forty years ago, in England, John Bright and Richard Cobden showed that protection was not only a financial blight, but also a moral iniquity. For years their words were unheard ; but when the Irish famine precipitated the issue upon Parliament, the conscience of the nation rose to the occasion and demanded the abolition of the Corn Laws and the entire protective system. The moral discernment of men is usually clearer than their economic. An outrage against virtue or justice stirs the blood and rouses indigna- tion; but men submit tamely to an erroneous financial policy, " more disposed to suffer while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed." When in 1863 Mr. Bright pleaded against English intervention in American affairs on the ground that it would be wicked, selfish, and unjust, he car- ried the conscience of England with him. When Glad- stone opposed the foreign policy of Beaconsfield on moral grounds, as unchristian and dishonorable, his sentiments fS PROTECTION A BENEFIT? 263 swept England like a cyclone. So will it be in America. When our people shall see with clearness that protection is an evil morally as well as financially, the system will totter to its fall. That it can not be defended on moral grounds, follows from much that has been said in the preceding pages. In fact, many of the arguments against protection derive their chief force from the fact that it violates the ethical principle implanted in every breast. All people see that no man's rights can be based on another man's injury. If the indict- ment of protection in the preceding pages is a good one, it is impossible to make the ethics of the system harmonize with that correct adage of the fathers, " equal and exact justice to all, but special privileges to none." It promises large rewards to labor, which it has never been able to con- fer. It designedly compels one set of men to contribute of their earnings for the benefit of another class. It con- fessedly levies upon the strongest industries to coddle the weak and sickly. It exacts tribute from the masses for the benefit of a few. If one industry is unprofitable, protection cancels its losses by forced contributions upon those of sturdier growth. If it is profitable, the encouragement re- ceived becomes an unnecessary bounty, a subsidy, a gra- tuity. If, as protectionists assert, their system benefits an unprotected industry as much as it taxes it, then protection becomes an absurdity, since the benefits and the burdens resolve themselves into mutual cancellations, and we are supporting an expensive system with zero for a result. If it be not true, and if benefits and burdens are not equally distributed, we are supporting a system which we know to be partial and unjust. It puts a premium upon false valu- ation of goods when passing the custom-house. It encour- ages the breaking of the law, especially against smuggling. Though the system is not answerable for all dishonesty, it 264 IS PROTECTION A BENEFIT? is fair to say that it gives great encouragement to adulter- ation and other dishonest features in manufactures. Its ethics resolves itself into the idea that our consuming mil- lions are the proper objects to be plundered, if it can be done under the forms and sanction of the law. It has be- come one of the tricks of statecraft to make a levy upon the innocent and the unsuspecting without their knowledge, and then divide it among the cunning and the audacious. No good man will take pleasure in the growth of great for- tunes, if they result from the legal oppression of the poor. Wealth will prove a curse instead of a blessing, if it should deepen the chasm which already separates capital and labor, or if it should make the rich richer, and the poor poorer. The basis of protection is selfishness. It says in effect, " Let every nation look out for itself, and may ruin take the rearmost." It confesses that its purpose is to benefit our- selves by injuring every other people. If its tenets are true, its success must inflict unmerited disaster upon foreign na- tions. This, of itself, removes the doctrine from the realm of broad and liberal principles, and should be sufficient to condemn it in the minds of all lovers of their race. To particularize : In order to make the silk industry flourish in our country we do all that legislation can do to destroy the silk factories of France, and to throw the French operatives out of employment, by cutting off all we can of their foreign market. After having crippled this foreign industry for twenty years and meantime mulcted ourselves many millions, we succeed in acclimating the silk industry, at least so far as to make it exist in* New Jersey and Connecticut. We have the further satisfaction of see- ing a few starved Frenchmen, whom our folly has driven out of Lyons, come across in the steerage to work in our silk mills at Paterson. Forthwith we congratulate ourselves that we no longer pay tribute to foreigners. Economic fS PROTECTION A BENEFIT? 26$ science condemns such a system as unwise : humanity condemns it as cruel and selfish. Even the Samaritan was neighbor to him who fell among the thieves ; and foreigners are as much our fellow-men as our countrymen. That must be either a very blind or else a very wicked teaching which implies that we have no moral obligations to fellow- beings on other continents. No good man can take de- light in suffering, or look with the indifference of a Stoic upon poverty or disaster in any part of the world. An impression prevails widely in Europe that our rates of duty on most articles produced there are so high as to be oppressive, and to violate that comity which should char- acterize commercial intercourse between friendly nations. The opinion is deepening there that we have no moral right to lay such duties as will drive Europe from our mar- kets. The determination, therefore, is taking form on that side of the Atlantic, to evade, nullify, and defeat our pur- pose. Thus protection sets each nation against all the others in an attitude of commercial hostility, if not of armed conflict. Protection is the father of international retaliation. We discriminate against European products : the nations there strike back by excluding our exports. Like peevish chil- dren, we play across the Atlantic the narrow and short- sighted game of tit-for-tat. The French legislate against our cheap bread ; and we legislate against their cheap silks and laces. The Germans forbid the entrance of our cheap meats ; and we forbid their cheap cloths. We reject the products peculiar to Great Britain, though that island buys of our cereals five times as much as all New England. With one breath we demand the destruction of the Chinese walls erected by European parliaments, while, with the next, we advocate the placing of another layer of stone upon the one constructed by our own Congress. Thus under 266 SS PROTECTION A BENEFIT? the teachings of the abominable gospel of ill-will and retali- ation, the nations go on to their common injury. Was the world built upon a fallacy ? Is the constitution of Nature based upon a mistake ? Does commercial inter- course have no settled principles, and no better lamp to guide it than the dicta of empiricism? No. Conflicts arise because men war against Nature. International retali- ations exist because the commercial policies of nations are not in harmony with the inexorable trend of the universe. Some day it will be seen that we are citizens of the world as well as citizens of a republic ; that even the love of country is not so large a grace as the love of mankind ; that the patriot is a man of smaller stature and girth than the cosmopolitan ; that all policies are unwise and hateful which war against the blessed religion of good-will and fraternity. The prevalence of such conceptions will teach the race the lesson of interdependence, will bind all nations into a unity and harmony of interests, and open the door for the glories of that millennium, "Till the war-drum throbb'd no longer, And the battle-flags were furl'd In the Parliament of man, The Federation of the world." CHAPTER XXII. CONCLUSION. THE OUTCOME. O use the vernacular of the courts, " Here we rest our cause." The preceding is not the whole truth. Much more might be said which would be equally as pertinent as anything that has gone before. Like every other good cause, the argu- mentative defence of freedom of trade is really stronger than any man has ever put into words. What is to be the outcome ? Is so-called protection to be our final policy? Is restriction and embarrassment of trade to be the mature fruit of our civilization ? Is it the ultimate good ? A century ago the nose of the protective camel was modestly thrust into our national tent. But for the last twenty-five years he has been bodily within, a welcome guest ; and it has really become a vital question, and is soon apparently to be the dominant one, whether he shall be allowed to become a permanent tenant. Sir Robert Peel used to define agitation as " the marshal- ling of the conscience of a nation to mould its laws." With us to-day there is a public ferment. For the first time in a generation, the public attention is directed to the economical relation of taxation and industry. A busy people have too far trusted affairs to Congress, and have yielded a too unquestioning obedience to the laws. But 268 SS PROTECTION A BENEFIT? now there is a widespread conviction that there is a radical wrong somewhere. It is even seen by a great and con- trolling political party assembled in national convention, that "the inequalities of the tariff" call for adjustment. The people see that we are cutting ourselves off from the good products and the profitable trade of other nations, both in importables and exportables ; that the burdens of taxation are unequal and in many cases unjust; that we have made greater progress as a people in eras of low tariff, than we have in those of high ; and that we are pros- perous to-day only because the nation which possesses in- dustry, frugality, virtue, and intelligence can not long remain poor ; as the people who lack these qualities can not long remain rich. Our laboring population have witnessed fall- ing wages and diminishing employment with a descending scale of comforts ; they have been mulcted to sustain men- dicant industries, which throng the lobbies of Congress, as beggars swarmed in " the gate of the Temple which is called Beautiful." They see that there has been a rapid increase in the number of our millionnaires and paupers, till between the classes of society there stretches a chasm as impassable as that gulf which separated Dives in hell and Lazarus in Abraham's bosom. Our protected classes themselves are seeing that they are pressed by the keenest competition in the home market, while they are utterly unable even to enter, much less control, the foreign one ; that loaded down with antecedent taxes on material, they are forced into diminished production and lower profits, and that nearly all those industries upon which legislation has conferred the largest favors, are in a condition of depression, and often of panic and threatened collapse. When it shall be clearly seen, as it will be, that our fiscal system is chiefly responsible for this condition of affairs, the end of protection can not be distant. IS PROTECTION A BENEFIT? 269 Protection is an agreeable word. It suggests safety. It appeals strongly to the unthinking. It was once the win- ning word. It is so no longer. When public scrutiny is once seriously directed to it, it will go down like the baffled Sphinx, or fall off from the body politic like the Old Man of the Sea in the Arabian Nights. If its propagandists were right in their reasonings, the system would indeed accomplish all that its honest advocates could desire. If it could obtain revenue and yet exclude imports ; if it could build up some industries without pulling down others; if it could so aid a needy industry that it would some time sustain itself without government charity; if it could in- crease the price of domestic products, without increasing the cost of production ; if it could enable men to pay high wages in what they confess to be a losing business ; if it could please everybody while it continued to benefit a few at the expense of the masses, then protection would have prospects of long life. But in mechanism every machine will fail that is not constructed in harmony with Nature. So all the financial devices of man must end in disaster, if out of parallelism with the divine unity of the creation. Being an attempt to repeal or to counteract natural laws, protection has within itself the growing germs of death. Statesmen have not been greatly successful in their attempts to amend the laws or deflect the trend of the universe. Protection becomes more and more harmful each year. If as a nation we practised isolation, like the Chinese, if we were non-progressive, like the Turks, it could not be so disastrous to us. But the more the inventive genius of man opens the way for international intercourse, the more does protection become a harmful anomaly and contra- diction. Every year the increasing means of communica- tion welds the nations together in mutual dependence. The telegraph, like Puck, the fairy servant of Oberon, puts 27O IS PROTECTION A BENEFIT? a girdle around the earth in forty minutes. The cotton manufacturer of Manchester telegraphs to Mobile both his orders for a thousand bales of cotton and the money to pay for them. " France orders by telegraph millions of cocoons from China, and ships them from Canton by rail- way across this continent to Lyons." With every step of progress the more impossible does it become to shield a nation against competition, and the greater would be the loss if such a thing could be done. Thus does protection, with real burdens and unsubstantial benefits, plant itself squarely in the path of progress, and become more calam- itous as we approach an ideal civilization. The Greek philosophers amused themselves with ellipses, parabolas, and hyperbolas j but Kepler and Newton showed the utility of these curves in the celestial mechanism. So, Plato specu- lated about the Ideal Republic ; but we, far west of Atlantis, are trying to work it out into realization. Our theory of taxation is not among the minor things which stand as a barrier in our path. It no more resembles an ideal fiscal system than the schoolboy's snow-man resembles the Apollo Belvidere, or a five-cent chromo the Transfiguration of Raphael. So long as we continue narrowly to legislate in the interests of a few, we never can realize that lofty con- ception of Lincoln at Gettysburg, " government of the people, by the people, and for the people." When will reform come ? In completing his " Wealth of Nations," Adam Smith expressed the opinion that free- dom of trade could no more prevail in England than Utopia could be set up there, because of the opposition of strong vested interests. He was mistaken. Revenue reform will come to us also, and probably much sooner than most people would predict. " The people of the United States in respect to most public matters attend but one school, and that is the school of experience. This IS PROTECTION A BENEFIT? 2/1 school is now open. Instruction has begun, and heavy penalties for failure to learn are being inflicted." We are slowly learning that such a development as we believe to be our destiny is utterly incompatible with a high tariff shaped for protective purposes. The log-rolling of interests and the clamors of " vested rights " are losing their power, and they will probably not be able much longer either to coerce or to mystify public sentiment into the enactment of laws disastrous to men and the nation. Protection is at war with progress. The very forces of Nature are in league with the reform. " The stars in their courses fought against Sisera ; " so the instincts of human nature and the unrepealable laws of wealth and trade fight against protection. To use an epigram of Emerson, free- traders " have hitched their wagon to a star." Every great invention, every strait tunnelled, every canal which cuts an isthmus, every newspaper filled with the events of the day, every college and public school, every sermon which asserts the fraternity of men and the fatherhood of God, all these are bringing reform nearer. Restriction belongs to the past ; and it is as much out of harmony with the im- proved methods of to-day, as the sickle and the flail are in husbandry, the pillion in travel, or the foot-runner in conveying intelligence. The spirit of freedom protests against it, as it did against the Stamp Act and the divine right of kings ; as it did against religious intolerance and the Inquisition ; as it did against a muzzled press before the days of John Peter Zenger; as it did against negro slavery before Lincoln struck off the shackles by the Great Proclamation. " The manifest destiny " of the United States is an unrestricted trade with all the world. Our country is to-day far grander in most respects than Plato dreamed of in his Republic, or More imagined in his Utopia ; but it will never attain its ideal development till industrial eman- 2/2 IS PROTECTION A BENEFIT? cipation shall follow the servile emancipation of 1863, and the political emancipation of 1776. Neither men nor parties can successfully stand in the breach. The flood of events is already sweeping aside all opposing forces. In 1860 one great and dominant party went into political exile because it opposed the freedom of man : in 1884 another party of great deeds and honorable history went into the baptism of defeat because it opposed freedom of trade. Thus were the public intelligence and conscience emphasizing their verdict against the policies of statecraft. Freedom is the vital breath of real prosperity. A free ballot makes strong and happy States. Free speech makes intelligent and patriotic citizens. Freedom in worship makes zealous and spiritual churches. Freedom in trade will make wealthy and prosperous nations. " Free trade is only one of the many forms of unrestricted human action which poets, philosophers, and the common people wor- ship under the name of liberty." That in all the centuries freedom has been slain under the plea of public advantage or necessity, has been a sad tragedy of the ages. The great struggles of history have been to secure larger liberty. The battle for commercial freedom in the United States remains to be fought. The vanguard waging this contest is now becoming a mighty host. Agitation stirs and educates the age. In the march of public opinion back- ward steps are seldom taken. An abuse once corrected disappears from history. When favoring conditions con- spire, economic and moral reforms spring forth into vitality, like a grain of wheat which has slept for three thousand years in the linen shroud of a mummy. Right comes forth because of the very excess of wrong, and the public interest, when once aroused, does not easily relapse into apathy. fS PROTECTION A BENEFIT? 273 Dominant political parties may not indeed lend their approval to reform, because parties and sects laden with the burden of securing their own success can not afford to risk progressive ideas. The rancorous partisan is the typi- cal coward of the age. The man who deliberately closes his eyes to the necessity of industrial emancipation, and who, seeing the wrong of commercial thraldom, does not resent this outrage upon popular rights, is a fit subject for an Oriental despot. The man who cowers under the lash of party and dare not raise his voice or drop his ballot in protest against a public wrong, is unworthy the exercise of citizenship in the Great Republic. But the agitators and the independent citizens who stand on the solid ground of conviction, the slaves of no party, wedded to no candidate, with no object but truth and the betterment of men, can open the issue to public gaze and let the light shine in. Reforms usually pass through the three stages of ridicule, argument, and adoption. A truth is suspected ; it is an- nounced ; it is embraced by a few ; it is advocated by a minority ; the minority grows into a majority ; the majority pushes it forward to adoption. Truth is a constantly rising tide. It is inherently mighty. It does not go with bowed head and apologetic mien, but steps like a conquering Caesar on the day of his triumph. It invites criticism and challenges contradiction. Though it may be in temporary eclipse, all the powers of the universe are pledged to its support and final supremacy. Jefferson was right in saying that error is not finally dan- gerous, if truth be left unfettered to combat it. The popu- lar conscience is the Medea's cauldron which brings forth all things new. In that red-hot crucible all error, though ob- stinate and honored by time, is finally driven into vapor, and the pure gold of right and truth remains to men. With entire faith in the ultimate triumph of all right, let the 18 274 7S PROTECTION A BENEFIT? lovers of the millions continue to work while they wait, till the rising tide of public intelligence and the blessings of that Omnipotence which in all ages has so visibly energized every noble cause, shall cast down error and bring the truth to victory. frp. UC SOUTHERN REGIONAL LIBRARY FACILITY A 000 731 042 8